Company overview of Indian coffee business

Company overview of Indian coffee business This case study analyses and discusses the Indian company Cafà © Coffee Day, its Marketing Mix and entry mode to the UK. My research aims to explore the cafà © coffee days background, marketing mix, and the success strategies in India in addition to various kinds of international environmental factors and market entry mode to enter in the UK market. The questions of why and how to enter in the UK market are illustrated with different market entry modes. It is found that the UK market is ease to enter for business. I compared the companys marketing mix and UKs marketing environment. I presented some recommendation to the successful Indian organization except minimum international experience for building its charisma in the UK. This case study is illustrates a trusted and well known coffee house brand Cafà © Coffee Day, and how it is possible for this to venture into one of the largest economy in the European zone , The United Kingdom. This case study describes the various marketing mix of this organization, the marketing environment of UK and the possible entry modes. Cafà © Coffee Day in India Cafà © Coffee Day (CCD) is one of the well established company and heart throb of youths in India. The headquarter is situated in Chikkamagaluru, Karnataka its a division of Amalgamated Bean Coffee Trading Company Ltd. CCD opened its first cafe in the year 1996 on the socially frequented area called Brigade Road which is located in the heart of Bangalore, now it has become the biggest retail chain of cafà ©s in India, having more than 1000 cafes in 141 cities. Cafà © Coffee Day stands out as a unique brand in India and has managed to achieve the tag of Most Trusted Brand ranking itself as second in a survey for food services conducted in 2008. Nowadays CCD plans to create big global chain by 2012-2013(Cafà © Coffee Day Official website 2010). While expanding the business in India, CCDs marketing strategy is to open a cafà © near to educational institution and corporate campuses. CCD already started to explore European market; they made their present to open coffee shops in Vienna. Cafà © coffee day is having various kinds of formats depending on the target audience. Cafà © Coffee Day Trivia C:Documents and SettingsRanjeetDesktopccd_table1.JPG (Source: website CCD Coffee Day website 2010) Cafà © Coffee Day Formats: C:Documents and SettingsRanjeetDesktopccd_table2.JPG (Source: website CCD Coffee Day website 2010) United Kingdom: United Kingdom has the sixth largest economy in the world and stands tall in list of developed countries in the European Union. UK is the home of world famous education institutes and corporate houses. Central Intelligence Agencys cites that the population of UK is 62,348,447 (July 2010), and the real GDP of the country is -5% (2009 est.). The annual report of World Bank declared that United Kingdom is ranked 4 out of 183 economies for ease of doing business. While choosing the UK market Cafà © Coffee Day needs to analysis the international marketing environments (CIA world factbook 2010). International Market Environment Brassington Pettit, (2006) argues while taking the decision to pursue international development, the company has to investigate following environmental factors. Socio cultural Environment Cultural factors Language Factors The UK population speaks various languages according to the region, Although English is the national language but CCD needs to consider Scot, Scot Gaelic, Welsh, Irish and Cornish languages as well. Religion CIA world factbook categorized religions in The UK (2001 census) (Source: CIA FactBook Website) Social factors Demographic factors and lifestyle plays very important role. According to MSI various sectors of the fast food market appeal to different age groups as a result the age profile of the UK population is significant factor affecting the demand. The urbanization of UK population is 0.5% the annual rate of change from 2005-10 and in year 2010 the population growth rate is 0.563 % (CIA World factbook). Legal Environment The UK legal system has early influences of roman and modern continental practices of law; has guidelines for the Acts of Parliament under the Human Rights Act of 1998 which have a non binding review of judicial nature; accepts compulsory ICJ jurisdiction with reservations (CIA World factbook) International Laws The United Kingdom comes under European countrys laws and regulations, and Indian and UK participation organization like IFC, ICC etc. Technological Environment The UK is technologically advanced than the India and having wide range of internet, telephone, and mobile network. Economic Environment The UK is a leading trading power and financial centre. In India CCD does not have any rules of minimum wages but while entering in United Kingdom, Company needs to give consideration to minimum wage rule, inflation rate, unemployment rate and household income . Political Environment Political and legal factors plays an imperative role in this industry, these factors sets the rule of competition, operational cost and wages. Following points should consider while entering in the UK. Operational restrictions Discriminatory restriction Physical actions Marketing Mix of Cafà © Coffee Day The age old marketing mix, consisting of the 4Ps i.e; 1.Product 2.Price 3. Place 4. Promotion However CCD offering infrastructure, facilities, staffs, and the process from ordering the product to delivering it. This is the reason makes us to consider People, Physical evidence and Process (Brassington Pettit, 2006, P. 1063). Products Food (Source: official website of CCD) Beverages (Source: official website of CCD) Cafà © Coffee Day is offering various ranges of products, some of them already exist in UK market. The Cafà © Coffee Day adopts a product managing hindsight to distinguish each of its unique cafe which are exhibited under an umbrella of products and those can be different as per the location. For example we can introduce Masala Chai and Kashmiri Qahwah to Indian populated area. Price While considering the price mix for UK market, CCD needs to consider various factors which can play the vital role to influence the pricing strategy. Factors: Affects on the Pricing Strategy Company and Product factors Corporate and Marketing objectives The short term tactical use of pricing such as discounts, product offers, ex. McDonalds use Big Mac with fries and Coke Firm and Product positioning Available resources Marketing and Product development Market Factors Consumers perception of the product, associated expectations and the average spending ability Identifying the objectives of the existing, their upcomingstrategies and unqiue selling point Environmental Factors Government influences and constraints Level of inflation Cafà © coffee day can apply a variety of strategies, combination of affordable prices and understand consumers need in addition to estimate the competition from the major companies like Starbucks and Costa Coffee and their strength and weakness as well. Business in the UK is governed by Government regulations and inflation plays an important role running them. It is important for CCD to analyze all the important factors which i have mentioned above to integrate and coordinate pricing policies to grow in the UK (Doole Lowe, 2008, P. 383-4). Place Strategic locations of the outlets help to attract the target market by means of which Cafà © Coffee day is sustaining its business, for ex. in India their outlets are commonly situated near to family entertainment centers, educational institutes and high street. CCD can apply the same strategy in addition to it can open the outlets in city center and near to corporate offices. Promotion Cafà © Coffee Day use promotion mix in India like ties up with youth brand Levies and association in movies except as a new company in the UK; it needs to go with more options of promotions. The customer is most likely to build his/her expectations by grasping the communication messages marketing the service a business service is likely to deliver (Brassington Pettit, 2006, P. 1069). The Promotion criteria use a variety of communication and motivation techniques with adequate emphasis on the need to generate curiosity which ultimately helps the customer purchase the new product with trust (Lilly Walters1997). Following possible channels of advertising can aid CCD to realize its existence in the market. T.V. Radio Print Advertising Internet Advertising Sales Promotion (Student Concession) People The nature of Services provided depends on the various interactions between people, including Cafà © Coffee Days staff and the regular customer. The staff plays vital role to deliver the quality service, people in CCD knows People are hired for what they know but fired for how they behave. Cafà © Coffee Day believes that staff is the real face of any company so they can stress on intensive staff training to cope with customers. Physical evidence Brassington Pettit have mentioned Physical evidence comprises the tangible elements that support the service delivery, and offer clues about the positioning of the service product or give the customer something solid to take away with them to symbolized the intangible benefit they have received(2006, P.1070). Cafà © Coffee Day is well aware about the physical evidences it can be categorized by: Brand Image, Logo: Cafà © Coffee Day logo has bright red and green color which gives it a distinct appeal. Red color represents leadership, vitality and the zest for drinking coffee, whereas the strokes in green instantiates the heritage of producing coffee Architecture and Dà ©cor: Cafà © Coffee Day is using lots of young color of today like limegreen, yellow, orange and purple and lots of steel instead of wood. Literature: A youth representative image is indicated by the literature provided by Cafà © Coffee Day. The  colorful hardbound menus, placards, leaflets are all designed o appeal the younger generation who are able to emphasize with it. Processes In India earlier Cafà © Coffee Day opted on self serving system but nowadays in most of the outlets the waiter comes and takes away the order and delivers it to the particular table. While considering the UK market it can be vary according to the location for an example CCD can choose to go with self service with an outlet on Sauchihall street in Glasgow to alleviate the service provision in heavy rush and to avoid the appointment of an additional staff for servicing, thereby saving cost in process execution. Entry Mode to United Kingdom Once the company decided to enter in the UK market, it must evaluate various options on how to create an entry into the market. Different factors influence the choice of entry into the market. Brassington Pettit (2006, P.1131-2) state six main factors are as below: Speed: How quickly a company wants to penetrate into a market? Cost: How much is the initial investment required to enter into the UK market? Flexibility: How flexible is the company to adapt to the requirements of the changing market? Risk factors: Competitive and Political risk Payback period: The pressure from within the organization to produce a quick return on any foreign market investment How fast the organization operates to achieve break even on investments from foreign shores and also generate profits on the long run. Long-term profit objectives: long term strategic plan and opportunities While entering in the United Kingdom, Cafà © Coffee Day can use different entry modes for its all business divisions. Direct Export Direct exporting means that the Cafà © Coffee Day would produce FMCG products in India and then foray into a foreign venture thereby exporting it to the new found market i.e. (UK) customer without involving intermediary parties. The parent company Amalgamated Bean Coffee Trading Company Ltd is one of the biggest exporters of green coffee from India since 1999. The company having expertise in export, it will help Cafà © Coffee Day to send overseas its FMCG products like Coffee day, Cafà © Beat. Advantages Its sellers responsibility to find customers, negotiate with them and process their orders. Seller maintains complete control by selling through his own export department and sales force It helps to build up clear presence in the market Disadvantages Transportation cost will be high Dependency on Buyer (Porters 5 forces Bargaining power of Buyer ) It might creates lack of control over marketing and sales by delegating to agents Franchising Cafà © Coffee Day can consider Franchising for its Cafà © Coffee Day express and lounge which would mean that CCD is ready to grant the rights to use the multitude of marketing avenues like brand usage, trademarks and usage of products, and a franchisee mode of operation is put in place to make the local entities run the operations under the banner of CCD. Advantages It can generate franchise fee It creates Opportunities to build a broadermarket operation Disadvantages It may create quality control and protecting brand equity problem Wholly-owned Subsidiaries Cafà © Coffee Day can also be concerned about wholly-owned Subsidiaries for express and lounge division. One of the most expensive methods of market entry is using wholly owned subsidiary. It requires long term commitment from the management and resources (Doole and Lowe, 2008, P. 250). This entry method can facilitate Cafà © Coffee Day plans to create the big global chain by 2012-13, at the time of entering in the UK will send clear message about the companys agenda. Advantages Wholly own subsidiary will serve control of core competency and manufacturing method to a competitor The entry mode will assist to realize learning curve and location economies Disadvantages The entry mode will make CCD to bear full cost of establishing its own subsidiary Cafà © Coffee Day needs to study British culture, consumers and competitions Cafà © Coffee Day will have to face UK politics and laws Sales Subsidiaries Cafà © Coffee Day can think about sales subsidiaries while selling its coffee vending machines in the United Kingdom. Sales subsidiaries play no role in manufacturing the products apart from taking accountability for marketing, selling and distributing it (Brassington Pettit, 2006, P. 1138). Advantages CCD can recruit local as well as transfer staff from India It can build up closeness to the customer Transferred staff can have good expertise in the product and management knowledge Recruiting local staff will help CCD to acquire local contacts and knowledge Disadvantages CCD needs to give product and management training to local staff Transportation cost of vending machine can be high Transferred staff needs local knowledge and contacts, and expatriates cost can be high Manufacturing Subsidiaries CCD can also deliberate to establish manufacturing subsidiaries to reduce the import tariff. They can accumulate existing products in the local market or developing better products as per requirements (Brassington Pettit, 2006, P. 1139). Advantages UK government is keen to attract inward investment, it can offer incentives and grants to set up in key region This entry mode for CCD helps to reduce transportation cost in addition to CCD can export the machines to other European countries. Disadvantages This kind of operation needs to start from scratch or acquire manufacturing unit CCD needs to calculate long-term plan before investing resources Recommendations While considering Cafà © Coffee Day, its Business divisions and the United Kingdom as a potential European market I would like to present some recommendations. While studying marketing i come to know that there is no immediate or best solution for entering into a foreign market. Cafà © Coffee Day should calculate all the facts and figures regarding United Kingdom. Cafà © Coffee Day needs to consider franchising, direct export, wholly-owned subsidiaries, sales and manufacturing subsidiaries with their pros and cons. World Banks reports for doing business in the United Kingdom is positive but as a new foreign company in the market, Cafà © Coffee Day should consider to go with low investment and long term strategic goals. Cafà © Coffee Day must consider all the regulations, international laws, and culture and target customers in addition to existing competitors as well.

Engineering Drawing Distinction Computer Science Essay

Engineering Drawing Distinction Computer Science Essay There are two methods of producing engineering drawings. The most common way of drawing in engineering used to be done by hand on a piece of paper. These drawings were time consuming; they needed precision and skilful draftsman. They are still used because this is a quick method if we talk about simple sketches. On paper we can draw in different techniques that include isometric, oblique and orthographic. During my first assignment I had to use the manual technique. In this paragraph I will explain what they are. Oblique- This technique is based on showing the front of the object in 2D and the side and top in 3D. If we have a cube we will need to draw a square and to its right side measure 45 °. This is where lines will go to create the side. Generally, I did not find it very difficult from my point of view. Oblique involves simple equipment such as pencil, ruler and a protractor. A drawing that is usually drawn in oblique contains its benefits and limitations such as we can see the full front of the object (advantage) or that it isnt good enough in architecture where most drawings are isometric which is harder (inconvenience). Architectural drawing in Isometric (google.com)Isometric- Technique is slightly more complicated as it involves two 30 ° angles and if we want to draw an Isometric circle it appears to be quite hard. We will need the same equipment as in oblique however to draw an isometric circle we need a compass as well. The benefit is that we will see 3 Dimensions in more detail and it is suitable for architectural drawings. The limitation is that to draw some components in isometric more work needs to be done and it isnt easy for a beginner. Orthographic- Orthographic involves 1st and 3rd angle projections however it is easy to draw because it is in 2 dimensions. The equipment is the same as in case of Isometric. The drawing itself is very nice and simple however more details are needed such as hidden lines or sections etc. Typical Orthographic drawing shows plan, front and the side. An advantage is that it contains a lot more details and it is therefore used in manufacturing for plans. The disadvantage is that you will not be able to see how it looks as a 3D object. BELOW: equipment that can be used in the manual technique (google.com) Manually produced drawings are good because the drawer can develop his/her skills and it is suitable for quick sketching. We can just sit down with a piece of paper and a pencil and make an instant drawing. If we think back to the times where blue prints were used they were still done by hand. Manual drawings were very good however the drawer needed and still needs a lot of patience when producing a drawing not to make errors which may be disastrous for the project. Precision plays a big part in this type of drafting. We are in a higher risk of getting things wrong and if for instance the line is very thick rubbing it out will leave marks and the drawing will look not as professional. This may only spoil the neatness of drawing but we will look like an unprofessional drawer which is why it is so important to spend time and do something very well. Drawings produced manually have an advantage because when an error is made then it can be rubbed out. During my assignment work where I was asked to produce engineering sketches done manually, I found that a drawing needs to be thought through rather than rushed. This gives the drawer more calmness and so he can do it in a very short time with minimum of mistakes. The manual technique is suitable for different paper formats but with any type of formats there need to be some scaling. If we were to produce a drawing of a cars engine it will be hard to put it on A4 paper so as finding paper that is big enough to draw the engine. Scaling is simply making the picture smaller by dividing the actual size by a number that will allow us to fit the engine on paper. Could be by 8 or 25 this will depend on the engine and the paper format as well. Personally, I have used scaling for few components such as the machine vice because the actual size wouldnt fit on A4 paper. The scaling may be used wi th all of the manual techniques which is a big advantage. Manual technique is suitable for people without the knowledge of computers and software. It is therefore used in many cases. It is not used by professional companies mainly because if an error occurs which can happen within the manual technique then big sums of money can be lost. Another reason may be that everyone wants to be distinguished as a professional company who can afford a CAD drawer and so they hire a person to work on a computer rather than on paper. In fact any design starts with a paper drawn concept so originates from pencil and paper. Drafting companies dont use manual drawing because of the fact that the customer requires a formal drawing in a simple format with many details and as much clearly as possible. It is a harder task in manual drawing because it will need to be though through several times and the drawing will require lot more time. Summarising the manual technique is a good way to sketch things. The equipment needed to draw in this technique is simple to use and not expensive. The method gives us the opportunity to sketch in both 2 and 3 dimensions up to the choice. One thing that is a big unfriendly is the use of paper. This may or may not be a good reason but we need to remember about the environmental impact. The technique isnt going to be hard once we get used to it and practice as much as it is possible. It isnt a very popular technique amongst professionals one because they want to save time and the time is the money, they also want to look professional both in the eyes of their customers and the competition. Manual drafting offers flexibility to mistakes which can be corrected at any time but a problem may be that a CAD drawing can be carried on a memory stick or a CD. In terms of manual technique this isnt possible and the whole drawing needs to be carried around. CAD is a short version of Computer aided drafting. The term can be used to describe software with which it is possible to produce engineering drawings. Producing drawings using CAD was one of my tasks for assignment 2. In this explanation I will try and talk about many different advantages and disadvantages of this technique. CAD software is nowadays a vital tool for company with their own design department. It can also be used by individuals who understand how the software works. The main difference between manual drafting and using CAD is that there is no need for manual skills. Anybody with sufficient training can begin drawing variety of things in CAD. In the software we can draw in 3 Dimensions with the same projections as in manual technique. The software we have been using had a simple interface and after enough guidance by our experienced lecturer the software became very easy to use. Alternatively, there are many books which include details of options and FAQ. ABOVE: Autodesk inventor screenshot (google.com) Software works by following users commands. We have a library of standard components drawn and available to use. The commands include the very basic copy and paste and more complex such as chamfer or fillet. We can draw arcs and lines or circles and polygons. There are dimensions which we will have to enter or play around with a mouse. Before producing a drawing it is worth to set up a page of sufficient size. We can produce a template using this function. An advantage of CAD software is that they dont take up space and carrying them can be done electronically. Program is stored on a computer and any produced drawings can be carried on memory stick rather than a bunch of other drawings. The drawing can then be printed out of any printing station to the desired format. Above all that there is the accessibility. The drawing can be emailed in an electronic form to any other device. It is very good because this way a lot of time is saved if any changes need to be made to the drawing. This is another aspect I found very useful at the time of using this software. CAD software is very useful in making civil engineering plans. In mechanical and manufacturing sector, computer or a laptop can be connected to CAM manufacturing device and the plan will automatically be manufactured by the CAM machine. This minimises the costs of production. Software is expensive because it may cost up to  £10.000 for a year plus qualified person who can use this program and in some cases providing training to the personnel. With time the investment will turn into profit. Mainly because high accuracy and flexibility and on the top of that there is time saved on data transfer and any changes amended. Due to the fact that there are many CAD software on the market there is no easy answer on how the program works. As I have mentioned previously it works based on commands. These can be used to set up the layout of our page, the dimensions of the template and any other configuring options. Set up can include things such as: Extents- Setting up extents will limit the program to work to the page dimensions that we choose. If we want to work on A3 paper this needs to be slightly smaller than A3 paper itself so that it will be able to print the work afterwards. Grid- We have a guidance of reference points in form of a grid. This is a set of dots which can be enabled or disabled when there is a need. With aid of this it becomes very simple to draw lines and angles. Snap- Used to equalise the snap and grid to the same value, it is possible to turn it off. The function works by moving cross hairs on the screen. The drawing command is very simple; it can be anything from drawing lines to circles. Usually for lines we specify a start point and the direction and using the numerical pad we enter the length or angle. In circles we can specify to choose the diameter or radius and enter its data. Editing is also very simple so we can copy and paste, move rotate or trim or extend. The functions will vary depending on the software but these are usually the basic functions that all software contains. Businesses use CAD software because of its profitability. It is reasonable for companies to invest money into software and hire personnel who know how to operate it. It may seem costly but there are many advantages and turnouts. We look more professional and the company is time efficient. There is no impact on the environment by not using bunches of paper. The drawing itself is more eco-friendly. ABOVE: Architectural Drawing produced using CAD (google.com) The CAD software I have used for my assignments had many features that are needed in professional engineering. It contains a library of common devices such as a spring. There are also many types of gears and links. This is very significant because a feature can be picked out from the library and copied to our drawing. This way the time is saved because some components are already drawn. We can solve problem of time consuming isometric drawing using CAD. This is because we have a protractor saying the angles of each line. We will get the exact angle and length of the line. If we were to make something of a round shape we can draw arcs which are simple to do using a program. In addition to that we can label many things on the drawing or annotate it automatically. Using labelling on an engineering drawing we can draw any text which could be the standards, name of the company and the draftsperson and so on and so forth. Architectural companies may want software such as Autodesk inventor which is more suitable for their area of interest and could be used to create interactive plans and visualisations of buildings. For mechanical there is a special program called AutoCAD Mechanical which I have used personally. These programs are all related however they have different functions which are specific for the area of engineering such as the architecture. This is why a manufacturing company will not need software which will not be useful for them although it may be suitable for a specific product drawing. There are negative points to CAD as there were to manual drafting. One of them is that to get this an investment must be made and if there is no turnout, then there is no need for it. If the company has it is treated more professionally however the software isnt just totally reliable because a skilled draftsman is needed which also costs money. Mistakes can happen and so they can be made using CAD as well. Wrong labels or symbols can have a major effect on the business. We can see that both manual and CAD drafting techniques have good and bad points. CAD is more professional way of drawing however an idea starts from a piece of paper and a pencil which is manual so there are established connections between the two. Nothing is perfect and so these two techniques may not be suitable for something but they will do better in another task. The described CAD method does not require drawing skill from the user and it is more tolerant to mistakes because it will not be seen. Manual drawing requires more skills and uses paper which is gained from chopping down trees so it has an impact on the environment. The fact is that we are now in the 21st century and the world will develop as it started as a blueprint and developed to a piece of paper, from piece of paper it became more virtual. We will not predict what can happen to drawing techniques in future and we dont know how much time it will take to develop something new, something that is as popular as the tw o mentioned above. For the mean time the two ways of producing engineering drawings does its job very well.

The Importance of Harry Hoveden in Making History Essay example -- Mak

The Importance of Harry Hoveden in Making History In making history, Brian Friel uses Hugh O’Neill to define the characters in the play, and the way in which his actions affect them gives the audience some characteristics to decide on the personality of particular characters. Harry Hoveden is obviously an important character in the play because he plays a major part in the play, and appears in most of the major scenes. It is also clear that he is important to O’Neill because he is often the one person he turns to in times of crisis. Harry is presented as a very loyal and sober character by, he serves to balance out some of the other characters almost like a buffer. His calm nature in times of distress or excitement contrasts with the brash and aloof persona’s of other characters like O’Neill. As well as stabilizing the mood in the play as presented, if the play was reality, he would act as a soothing and calming presence to help particularly O’Neill. There is a direct link to his calmness and soothing nature in the comparison of him to dill. Every character i...

Switzerland Report 2005 Essay -- essays research papers fc

SWITZERLAND Switzerland is an independent country that has been able to maintain its neutrality, making them honored by the major European powers. An interesting historical fact is that Switzerland was not involved in either of the two World Wars. Switzerland’s active role in many UN and international organizations has been a positive strategy strengthening ties with its neighbors, but also letting them retain a strong commitment to neutrality. However, Switzerland did not officially become a UN member until 2002. Switzerland is located in Central Europe, east of France and North of Italy. Bordering countries are Austria, France, Italy, Liechtenstein and Germany. Bern is the capital city with Zurich being the largest city. It is mostly mountains and rolling hills with large lakes in the valleys. Switzerland is one of the most beautiful countries that I have had the opportunity to visit. The population taken in July of 2004 was 7,450,867. Their population growth rate is .54%. The total life expectancy is 80 years. The country’s nationality is Swiss. The ethnic groups that make up Switzerland are: Germans at 65%, French at 18%, Italians at 10%, Romansch at 1%, and all others at 6%. With the diverse ethnic groups the primary languages follow suit with German speaking at 64%, French speaking at 19%, Italian at 8%, Romansch at .6% and other at 9%. The primary religions are Roman Catholic at 46%, Protestant at 40%, other religions equaling 5%, and an estimated 8.9% are non-religious. Switzerland is known as the Swiss Confederation, with a Federal Republic type of government. The federal state is made up of 26 cantons. Of which 20 are â€Å"full† cantons and six â€Å"half† cantons for the purpose of representation in the Federal legislature. Switzerland’s government is somewhat similar to that of the United States, in that they have a constitution that provides for separation of the three branches of government. Switzerland’s Federal institutions are: The Federal Assembly – a bicameral legislature (The Legislative Branch). The Federal Assembly is the primary seat of power. It has two houses the Council of State and the National Council. These two houses have equal power in all respects, including the right to introduce legislation. The Federal Council – a collegial executive of seven members (The Executive Branch). The Federal Assembly individually elects the seven Fe... ...y at 32.3%, France at 10.8%, Italy at 10.7%, US at 5.5%, Netherlands at 5%, Austria at 4.2% and U.K. at 4.1%. The main industry is services accounting for 69.1%, then industry at 26.3%, and agriculture at 4.6%. Switzerland’s energy or electricity production is 68.68 billion kilowatts, 110/220V and 50H. Switzerland is a member of the UN, The World Trade Organization, the International Monetary Fund, the World Bank, and the Organization for Economic Cooperation and Development. Switzerland maintains diplomatic relations with almost all countries and historically has served as a neutral intermediary and host to major international treaty conferences. Switzerland’s ability to maintain good relationships with so many countries and its power to stay neutral, along with its economy being so advanced and prosperous makes it a prime market for global marketing. It would be a safe market for a business to invest their time and energy in creating a marketing strategy to begin importing and exporting with Switzerland. Works Cited â€Å"The World Factbook: Feb. 10, 2005.† Switzerland. 2005 . â€Å"Michigan State University: 2001-2004.† globalEDGE/country insights. 13 February 2005 .

lots of words :: essays research papers

Why should we build up a Start-up vocabulary quickly? Draft v1.1. August 4, 2002 Rob Waring This page is at http://www1.harenet.ne.jp/~waring/vocab/principles/early.htm ?@ Abstract This article will examine the reasons why it is important both linguistically and psychologically to build a vocabulary quickly when learning a foreign language. The article asserts that very little can be achieved or learned in a foreign language with a small vocabulary and that by building a sizable vocabulary quite quickly one can soon be able to function adequately. You may also wish to look at http://www.jalt-publications.org/tlt/files/95/feb/meara.html ?@ Introduction ?@ It is obvious that in order to learn a foreign language one needs to learn many many words. But how many? Educated English native speakers have a vocabulary of about 20,000-25,000 word families (A 'word family' refers to a group of words that share the same basic meaning e.g. create, creation, creating, created, creative etc), foreign learners of English need far fewer[1].The speaking vocabulary is usually said to be half of the reading and writing vocabulary. Foreign learners of English only need about 3000-5000 word families to be quite competent in speaking and listening to English. This is great news for learners of English because their task is much easier than that of native speakers! ?@ One of the reasons for this seemingly small number is the nature of words and the frequency with which they appear in a language. Not all words are equal because some words such as time, the, come, make, and so on are very common whereas others such as parasol, bombastic and edifice are relatively rare and not met everyday. It therefore seems clear that these frequent words should be among the first words to learn because they will be met most often and will be needed frequently in speech or writing. Thus the pay off for learning them is higher than for an average rare word. These words are often called a General Service Vocabulary because these words are found in many kinds of situations and domains. This is a vocabulary of about 2000 word families. The best list (although it is a bit dated is Michael West's 1954 list called the General Service Word List.) These General Service words are found a very very wide range of contexts such as in the medical world, in novels, in scientific reports, on web pages, in daily conversation, in politics and so on. Because these words appear in so many contexts they are extremely useful to almost all learners.

Freedom: Meaning of Life and Br Essay

Freedom is often spoken of in what can be referred to as a â€Å"loose sense†. One country has more freedom than another; a twenty-one year old has more freedom than a fifteen year old, but what exactly does this word, which is so often flippantly used, mean? Or, if this conclusion cannot be reached, what does it not mean? For different people it may mean different things, but there has to be an equilibrium that can be reached in order to determine the meaning of freedom itself. In one form, freedom can mean that a person has â€Å"exemption from an obligation.†* If only the root (free) is looked at, it can be interpreted that one is â€Å"not under the control or power of another.†* However often the latter definition is used, it is also disagreed with, and for good reason: there is always a ruler, although the ruler may not necessarily be in the form of a person or group of persons. Take, for instance, the human body. It consists of basically three things, as far as ruling powers are concerned: prudence, will, and raw appetite. Raw appetite can be looked at as what we have without reason, will is what can control raw appetite (or desires that we have without reason), and prudence is that which provides a choice between will and raw appetite. Prudence has the ability to choose between the two options. This is just one example of how a ruler must always exist, although it may not have a physical form. Taking this into consideration, the meaning of freedom can further be explored. Perhaps it can be defined as having the liberty to choose who/what the ruler is to be. For, since nothing can exist without having some form of rule, if people are not permitted to choose what the ruling factor is, then that would not be considered having freedom. Through this, it can be concluded that freedom, possibly, is not simply the ability to be able to do whatever it is that you want, and it is not simply being liberated from the power of another. It can also be concluded that one of the definitions of freedom could possibly be the liberty to choose the ruler. However, it is possible that it is unfeasible to ever obtain the exact definition of freedom.

Anonymous

INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and Challenges Pankaj Chandra Nimit Jain W. P. No. 2007-03-07 March 2007 The main objective of the working paper series of the IIMA is to help faculty members, Research Staff and Doctoral Students to speedily share their research findings with professional colleagues, and to test out their research findings at the pre-publication stage INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and ChallengesPankaj Chandra Nimit Jain Indian Institute of Management Ahmedabad Vastrapur, Ahmedabad 380015 [email  protected] ernet. in, [email  protected] ernet. in Abstract The logistics industry in India is evolving rapidly and it is the interplay of infrastructure, technology and new types of service providers that will define whether the industry is able to help its customers reduce their logistics costs and provide effective services (which are also growing). Changing government policies on taxation and regulation of service providers are going to play an important role in this process.Coordination across various government agencies requires approval from multiple ministries and is a road block for multi modal transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customers. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making. In this paper, we provide a perspective on these issues, outline some of the key challenges with the help of secondary information, and describe some interesting initiatives that some firms & industries are taking to compete through excellence in managing their logistics.IIMA INDIA Research and Publications 1 Introduction The Indian economy has been growing at an average rate of more than 8 per cent over the last four years (Srinivas, 2006) putting enormous demands on its productive infrastructure. Whether it is the physical infrastructure of road, ports, water, power etc. or the digital infrastructure of broadband networks, telecommunication etc. or the service infrastructure of logistics – all are being stretched to perform beyond their capabilities.Interestingly, this is leading to an emergence of innovative practices to allow business and public service to operate at a higher growth rate in an environment where the support systems are getting augmented concurrently. In this paper, we present the status of the evolving logistics sector in India, innovations therein through interesting business models and the challenges that it faces in years to come. Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire inbound and outbound segments of the manufacturing and service supply chains.Of late, the logistics infrastructure has received l ot of attention both from business and industry as well as policy makers. However, the role of managing this infrastructure (or the logistics management regimen) to effectively compete has been slightly under-emphasized. Inadequate logistics infrastructure has an effect of creating bottlenecks in the growth of an economy, the logistics management regimen has the capability of overcoming the disadvantages of the infrastructure in the short run while providing cutting edge competitiveness in the long term.It is here that exist several challenges as well as opportunities for the Indian economy. There are several models that seem to be emerging based on the critical needs of the Indian economy that can stand as viable models for other global economies as well. Chandra and Sastry (2004) have pointed towards two key areas that require attention in managing the logistics chains across the Indian business sectors – cost and reliable value add services. Logistics costs (i. e. inventor y holding, transportation, warehousing, packaging, losses and related administration costs) have been estimated at 13-14 per cent of Indian GDP which is higher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal, 2006a). Service reliability of the logistics industry in emerging markets, like India, has been referred to as slow and requiring high engagement time of the customers, thereby, incurring high indirect variable costs (Dobberstein et. al, W. P. No. 2007-03-07 Page No. 3 IIMA INDIA Research and Publications 2005).However, the Indian logistics story is one with islands of excellence though there has been a general improvement on almost all parameters. It is this aspect that we explore further in this paper. The paper is organized as follows: the next section gives a brief introduction of some of the peculiarities of the Indian logistics sector. In section 3 we discuss the determinants of growth in this industry. In section 4 we prov ide some interesting initiatives that point towards a renewal of the sector. The challenges facing the sector are discussed in the last section. 2 Some Peculiarities of the Indian Supply ChainsThe Indian logistics sector has typically been driven by the objective of reducing transportation costs that were (and often continue to be) inordinately high due to regional concentration of manufacturing and geographically diversified distribution activities as well as inefficiencies in infrastructure and accompanying technology. Freight movement has slowly been shifting from rail to road with implications on quality of transfer, timeliness of delivery and consequently costs except for commodities which over long distances, predominantly, move through the extensive rail network. More on the infrastructure issues later.Figure 1 shows the relative value of transportation costs vis-a-vis other elements of the logistics costs in India. The transportation industry is fragmented and largely unorga nized – a large number of independent players with regional or national permits that carry freight, often with small fleet size of one or two single-axle trucks. This segment carries a large percent of the national load and almost all of the regional load. This fragmented segment comprises owners and employees with inadequate skills, perspectives or abilities to organize or manage their operations effectively.Low cost has been traditionally achieved by employing low level of technology, low wages (due to lower education levels), poor maintenance of equipment, overloading of the truck beyond capacity, and price competition amongst a large number of service providers in the industry. Often, one finds transportation cartels that regulate supply of trucks and transport costs. However, the long run average cost of transport operations across the entire supply chain may not turn out to be low. W. P. No. 2007-03-07 Page No. 4 IIMAINDIA Research and Publications Figure 1: Elements of Logistics Cost in India Trans por tation 40 War e hous ing, Pack aging & Los s e s 24 26 Inve ntor y Or de r Pr oce s s ing & Adim ins trative 0 5 10 10 15 20 25 30 35 40 45 percent contribution Source: Sanyal (2006a) Table 1 gives a breakup of the logistics cost across different sectors of the Indian industry and the changes therein over the last five years. It shows how the logistics spend is increasing, sometimes dramatically, across various industrial sectors. Steel, harmaceuticals, food & agro-business, and auto have also been the sectors that are growing most rapidly in the national economy – it is no surprise that their logistics costs have been increasing at a faster rate. A few observations are in order here. The low change in order processing & administrative costs in the cement sector could possibly be due to the use of call centers by various producers for order processing and dispatch planning. Steel and pharmaceutical sectors have seen maximum changes in compon ent costs.The distribution practice of pushing goods down the channel might be responsible for high increase in the inventory and warehousing costs in the pharmaceutical industry. Investments in new cold chains and losses might be the causes of high change in the warehousing, packaging & losses related costs. Warehousing, has also been typically dominated by small players with small capacities and poor deployment of handling, stacking and monitoring technologies. While it has had detrimental effect on almost all sectors, the food sector has been the one that has suffered the most due to low investment in cold chains and allied machinery.Erratic power outages have also meant low dependence on technology and a more manual operation. Another fact that has affected both the location as well cost of operating a W. P. No. 2007-03-07 Page No. 5 IIMA INDIA Research and Publications warehouse has been the â€Å"octroi tax1. † Firms have been locating warehouses outside city limits. Ta ble 1: Distribution of Logistics Costs across Some Sectors (2000-2005) Logistics Cost Components (in US $ mn) Transport ation Inventory holding Warehousing, packaging & loses Order processing & administrative Total Logistics cost SectorAuto Cement Consumer Durables FMCG Food Garment Pharmaceutical Steel Source: IAEIS 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 285. 0 406. 5 20. 3 50. 6 55. 4 4. 8 331. 9 398. 9 11. 2 201. 5 280. 7 13. 2 398. 7 524. 5 21. 0 337. 3 454. 4 19. 5 174. 0 310. 0 22. 7 438. 3 693. 6 42. 5 171. 0 243. 9 12. 2 30. 4 33. 3 2. 9 199. 1 239. 3 6. 7 120. 9 168. 4 7. 9 239. 3 314. 7 12. 6 202. 4 272. 11. 7 104. 4 186. 0 13. 6 263. 0 416. 1 25. 5 185. 3 264. 3 13. 2 32. 9 36. 0 3. 1 215. 7 259. 3 7. 3 131. 0 182. 5 8. 6 259. 2 340. 9 13. 6 219. 2 295. 3 12. 7 113. 1 201. 5 14. 7 284. 9 45 0. 8 27. 7 71. 3 101. 6 5. 1 12. 7 13. 8 1. 2 83. 0 99. 7 2. 8 50. 4 70. 2 3. 3 99. 7 131. 1 5. 2 84. 3 113. 6 4. 9 43. 5 77. 5 5. 7 109. 6 173. 4 10. 6 712. 6 1016. 4 50. 6 126. 5 138. 5 12. 0 829. 6 997. 3 27. 9 503. 8 701. 8 33. 0 996. 8 1311. 2 52. 4 843. 2 1135. 9 48. 8 434. 9 775. 0 56. 7 1095. 7 1734. 0 106. 4 They delay moving goods into retail network as late as possible.It has also led to the development of a unholy business-government nexus to avoid the tax and extract rents. Use of technology is quite limited – both IT and engineering equipments in order to increase productivity and service. An in-appropriate evaluation of the diverse benefits of technology has led to higher usage of manual labour across the logistics industry whether An entry tax on goods coming into a city. The tax is a major source of revenue for city municipal corporations. W. P. No. 2007-03-07 1 Page No. 6 IIMA INDIA Research and Publications it is in the distribution activities or within pla nts.Many firms try to compete through the factor advantage of low wages which have necessitated hiring low or no skill personnel thereby sacrificing productivity related gains in the long run. Understanding the linkage between inventory and transport planning is a key to reducing operational cost of distribution. Chandra and Sastry (2004) identify transport & dispatch planning as an area of concern in a survey of manufacturing firms in India. Ninety eight per cent of sample firms in that survey have a contract with trucking companies for making dispatches and only 11 per cent own their own fleet of trucks.While 36 per cent of these firms use third party logistics (3PL) service providers for making dispatches, about 30 per cent use 3PL service providers for procuring their material from their suppliers. Somehow, transport planning has remained a unglamorous area within Operations despite the fact that about 10 per cent of the cost of sales comes through physical distribution (Sanjeev i, 2003). Transport planning (e. g. , optimal dispatch quantities & frequency of dispatch, vehicle routing, loading pattern in the trucks etc. ) does not appear to have received the required attention.For example, in the same survey, only 21 per cent of sample firms report the use of some software for scheduling dispatches. It is worth understanding the structure of the Indian supply chains, in aggregate, to get a better appreciation of many of the issues raised earlier. In Figure 2 Chandra and Sastry (2004) present the structure of the supply chain of a sample of firms. It can be seen that about 4 per cent of firms have less than five suppliers, about 85 per cent of firms have less than five plants, about 14 per cent of firms have less than five regional distributors, and about 9 per cent of firms have less than five retailers.A similar statistics is obtained for other ranges of suppliers, plants, distributors, and retailers. What is worth noting is that 63 per cent of firms have m ore than 100 suppliers, about 39 per cent of firms have more than hundred distributors, and 77 per cent of firms have more than hundred retailers. In addition, about 17 per cent of firms claim to have more than 500 suppliers. The same for distributors and retailers is 22 and 54 per cent respectively. This is perhaps where difficulties in managing logistics in India lie – larger the number of suppliers or distributors, higher is the cost of coordination.W. P. No. 2007-03-07 Page No. 7 IIMA INDIA Research and Publications Figure 2 : Structure of the Supply Chain of Sample Firms 90 80 70 Percent of Firms 60 50 40 30 20 10 5000-10000 1000-2000 2000-5000 500-1000 100-500 50-100 10-15 15-25 25-50 0 5-10 0-5 more than 10000 Range Suppliers Plants Approved Retailers Regional Distributors Source: Chandra and Sastry (2004) When we look at the spatial distribution of both plants and suppliers, the above statement becomes even stronger. Of the sample firms that operate more han one plant , 48 per cent of these plants are located more than 100 kilometers away from each other, 33 per cent of these plants are located more than 500 kilometers away from each other and 18 per cent of these plants are located more than 1000 kilometers from each other. Similarly, on an average, only 4 per cent of suppliers are located within 5 kilometers of the manufacturing plant, about 13 per cent are located within 5-25 kilometers of the plant, 16 per cent are located within 25-100 kilometers of the plant and about 67 per cent of suppliers have facilities that are more than 100 kilometers away from the plants.Location policies of the past may have forced some firms to locate plants away from each other. However, this may be coming to haunt today as the cost of coordination increases and the ability to provide quick response to customer requirements might reduce. This problem gets exacerbated with suppliers. Manufacturers have to either develop suppliers separately for each location (ther eby increasing the number and affecting consistency in quality, price & delivery times) else material has to travel longer distances if there is a common supplier to all plants. W. P. No. 2007-03-07Page No. 8 IIMA INDIA Research and Publications The logistics challenge in such an environment is immense – build the infrastructure, manage the requirements of a changing structure of various sectoral supply chain, change industrial policies to facilitate efficient production and movement of goods and services, deploy effective managerial practices and technology to enhance the competitiveness through better management of logistics networks, and develop new models for new sectors especially in the service sectors as well as traditional areas like agri-business etc.It must be mentioned that the logistics industry in India is transforming itself very interestingly despite its peculiarities by developing innovative business models and by chipping away at the such structural and polic y based rigidities. In a later section, we discuss some of these innovative initiatives that are leading the renewal of the logistics industry in India. 3 The Changing Logistics Infrastructure With rising consumer demand and the resulting growth in global trade, the role of infrastructure support in terms of rails, roads, ports & warehouses hold the key to the success of the economy.In this section we provide a quick overview of the status of the logistics infrastructure in India and the current initiatives, both private and public, in that area. Goods are transported predominantly by road and rail in India. Whereas road transport is controlled by private players, rail transport is handled by the central government. With the second largest network in the world, road contributes to 65 per cent of the freight transport (Rastogi, 2006). Road is preferred because of its cost effectiveness and flexibility.Rail, on the other hand, is preferred because of containerization facility and ease in transporting ship-containers and wooden crates. Sea is another complementary mode of transport. Ninety five per cent of India’s foreign trade happens through sea (Deccan Herald, 2006). India has 12 major ports, six each on the West and East coasts and 185 minor ports. Table 2 maps the various modes on different performance indicators, clearly indicating the vitality and importance of road transport in Indian economy. There is also evidence of an, across the board, increase in freight traffic for all modes indicating an increased logistics activity.For instance, the per cent change in road, rail, air and sea cargo traffic has increased, between 2001 and 2005, from 5 to 14 per cent, 4 to 7. 5 per cent, 6 to 20 per cent and 3. 5 to 11 per cent respectively (CMIE Database, 2006). W. P. No. 2007-03-07 Page No. 9 IIMA INDIA Research and Publications Table 2: Comparison Chart for Various modes Rail 214760 10. 66 0. 11 Road 3487538* 5. 12* 3. 34 Sea 806 7. 9 12 Number (wagons, tr ucks, ships) Freight Capacity(mn ton) Route Length (mn km) /Number of major ports Freight Revenue (US $ bn) 7. 00 coal, steel, petroleum, primary metals 38. 64 automobile, electronic items, garments etc. 304 iron ore, coal, petroleum (and industrial and consumer products on the outbound export) Major Products Source: IAEIS, 2005-2006, Financial Express, 2006a *This figure is for 2002-03 1 US$ = Rs 44 In keeping with the increasing demand for road transportation, the National Highway Authority of Indian (NHAI) has been strengthening and widening national highways in multiple phases. As part of the National Highways Development Project, the work on the development of golden quadrilateral (connecting Delhi, Mumbai, Chennai and Kolkata) and the North-South and East-West links were started in 1998.It will build 13000 km expressways that would connect the nation (Surabhi, 2006). NHAI is investing about $650mn towards the development of an Intelligent Transportation System (ITS) which will make transport services on the highways (like reducing congestion, advance signaling, medical assistance, accident management, etc. ) efficient and automating many processes like toll collection etc. (Sanjai, 2007). Because of the growing opportunity and potential for high revenue, the Ministry of Railways has been taking measures to expand the rail connectivity and recapture the market share of freight business.By focusing on improving wagon utilization, the Railways have managed to reduce the freight cost from 61 paise2 per net tonne km (ntkm) in 2001 to 56 paise per ntkm in 2005 (Rastogi, 2006). At present, goods train run on same 2 100 paise = 1 Rupee W. P. No. 2007-03-07 Page No. 10 IIMA INDIA Research and Publications railway tracks as passenger trains at an average speed of around 25 kmph (Gill, 2006). With the proposed dedicated west and east freight corridors, the goods trains are expected to run at 100kmph. The West and East rail corridor of 1469-km and 1232-km will be bu ilt with an investment of $2. 0 bn and $2. 40 bn respectively and will be equipped with the latest centralized traffic control systems (Acharya, 2006a). Indian Railways has also decided to collaborate with bulk users of freight transport to build the rail network in a Public Private Partnership (PPP) mode. The first project on this line comprises nine public and private sector companies that are building a 82-km rail line between Haridarpur and Paradip at a cost of $ 120mn (Telegraph, 2006). Recently several steel companies have also shown interest in linking iron and coal mines in Orissa with a 98-km rail line (Business Standard, 2006).Multi-modal transport in India was a monopoly of the Container Corporation of India till 2005. With licenses being given to 13 new private players (Acharya, 2006b), rail trade should improve considerably. In order to encourage trade by small scale industries, Indian Railways has started a â€Å"road-railer†system where container vehicles are c apable of running both on highways hauled by trucks and on rail (Guha and Sinha, 2006). In 199899, the Konkan Railway (one of the railway zones in South-Western India) pioneered the ‘roll-on, roll-off' (‘RO-RO') concept between Mumbai (Kolad) and Goa (Verna).Privately owned trucks are loaded with their goods which are driven on to a rake of flat cars and are carried (trucks and their cargo) to the destination. In 2005-06, the ports handled 456. 20 million tonnes of cargo traffic. This is expected to increase to 700 million tonnes by 2011-12. In keeping pace with the growing demand, the government plans to increase port capacities to around 1 billion tonnes per annum in the next six years (Raja, 2006). Under the National Maritime Development Programme (NMDP), the government is encouraging public-private partnership to build and maintain ports.This scheme will cover 276 port related projects at an investment of $12. 40 bn (Raja, 2006). With rising congestion levels at majo r ports and with high average turnaround time, the government has decided to develop minor ports in seven states to ease the traffic of major ports (Financial Express, 20006b). Tables 3 the operational performance of various ports in India – while there is an improvement in performance, the pace is slow. The estimated cost of this development is expected to be around $350 mn. Further, private sector is likely to invest $ 7. 67 billion over the next six years.W. P. No. 2007-03-07 Page No. 11 IIMA INDIA Research and Publications Table 3: Average Turnaround Time At Ports (in Days) Port Chennai Cochin Haldia Jawaharlal Nehru Kandla Kolkata Marmugao Mumbai New Mangalore Paradip Tuticorin Vishakhapatnam Average Source: IAEIS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 CAGR 6. 40 5. 80 5. 30 3. 70 4. 60 3. 80 (9. 90) 3. 23 3. 10 2. 37 2. 19 2. 22 2. 33 (6. 32) 5. 21 3. 96 4. 01 3. 02 2. 87 3. 00 (10. 45) 1. 72 2. 48 2. 34 2. 28 2. 04 1. 84 1. 36 6. 15 4. 72 6. 55 5. 94 5. 06 4. 62 (5. 56) 6. 59 5. 50 4. 71 4. 47 4. 29 4. 7 (8. 75) 4. 30 4. 25 2. 04 3. 86 4. 47 4. 35 0. 23 5. 60 5. 20 5. 47 5. 06 4. 10 4. 21 (5. 55) 3. 80 2. 89 2. 73 1. 90 2. 35 2. 96 (4. 87) 3. 89 4. 16 3. 99 3. 37 3. 42 3. 41 (2. 60) 6. 39 4. 10 4. 11 3. 59 2. 59 2. 66 (16. 08) 4. 75 3. 71 3. 51 3. 72 3. 33 3. 20 (7. 60) 4. 84 4. 16 3. 93 3. 59 3. 45 3. 38 (6. 92) Currently, fifteen private sector projects are operational at various major ports and four more projects are under implementation (Raja, 2006). One of them aims to build the deepest port in the world at an investment of $ 1bn (Financial Express, 2006c).This project is handled by a three-firm Chinese consortium with a Mumbai-based partner, Zoom Developers. Interestingly, firms like Ambuja Cement have been using barges for transport of clinkers from their factories to crushing and packaging plants all over the coast, thereby, reducing transport costs considerably. It can be seen that there is a fury of activity in enhancing the in frastructure capacities in the country. 4 Determinants of Logistics Growth in India The Indian logistics business is valued at US$ 14bn and has been growing at a CAGR of 7-8 per cent.As mentioned earlier, the logistics cost represents 13-14 per cent of the country’s GDP. The market is fragmented with thousands of players offering partial services in logistics; it is estimated that there are about 400 firms capable of providing some level of integrated service (Mahalaksmi, 2006). The economy is expected to grow around ten per cent over the next ten years and sectors like chemicals, petrochemicals (especially distribution), pharmaceuticals, metals and metal processing, FMCG, textile, retail and automobile are projected to grow the fastest.New business models are emerging as new firms, both domestic and foreign, enter the market. As a result of the ensuing competition, linkages with global supply chains and domestic market growth W. P. No. 2007-03-07 Page No. 12 IIMA INDIA Resea rch and Publications promise to change the face of logistics industry beyond recognition. In this section, we discuss how these are going to determine the growth of the sector. The scale of operations in manufacturing is changing and so are their markets and sourcing geographies.Growth in manufacturing in India has happened across clusters that are located in different parts of the country, e. g. , Ludhiana, NCR, Baddi and Dehradun in North, Rajkot, Jamnagar, Pune and Mumbai in West (along with Ankleshwar, Vapi, Aurangabad, and Kolhapur and most recently Kutch), and Coimbatore, Vishkahpatnam, Bangalore, Hosur, Chennai, Pudduchery and Sriperumbudur in the South. Assembly plants at these locations are being fed with raw materials and intermediate products from all over the country and abroad (as well as these locations).Moreover, distribution networks with emerging hubs in Indore and Nagpur (i. e. , Central India) supply all over the country and abroad. This is going to increase the n ature and extent of movement of goods and services across the country. This has been accompanied by the expansion of domestic production capacity (e. g. , ORPAT in Morbi has added capacity to produce 40,000 units of quartz clocks and time pieces at a single location) as well as a big MNC entry into the Indian manufacturing scene (e. g. NOKIA’s new factory at Sriperumbudur produces 1 million mobile phones per month). As the volume of production grows, so will the extent of movement of goods either to the ports for export or to the rest of the country. Some of the large players to enter (or expand significantly) the Indian market recently have been Reliance Retail, Big Bazaar Hypermart, Pantaloon and RPG in Retail; Nokia, LG, Samsung, Motorola, Sony, Blue Star in Consumer Electronics; Bajaj, Hero Honda, Maruti, Honda, Toyota, Audi,Volkswagen, Renault, Volvo in the Automotive sectors; Holcim in Cement; etc. It can be expected that their operations will drive the growth of logist ics industry. The liberalizing Indian economy is experiencing entry of large domestic and global firms in new businesses as well as enlargement of distribution network of many regional Indian firms. The announcement of large retail projects by Reliance and Bharti (in collaboration with Wal-Mart) will bring new technology, add additional warehouse capacity and will require fast and reliable movement of goods across the country.Reliance is thinking of establishing large warehouses in Thailand to take advantage of low cost sourcing from South-East Asia once the Free Trade Agreement with Thailand (as well as ASEAN) gets finalized. Similarly, regional food & grocery retail leaders like W. P. No. 2007-03-07 Page No. 13 IIMA INDIA Research and Publications Subhiksha who are present very extensively in the South Indian market are now entering the rest of the country with more than 600 new retail stores in 2007. Their logistics strategy and needs are transforming very significantly with this nationwide expansion.New retail chains are entering the non-metro towns and non-State capitals. It may be mentioned that the growth of the courier industry post-liberalization has helped change the parameters of service evaluation in the industry from cost alone to cost, time, and reliability. This sector has also seen a number alliances between regional and local players especially in the small package (less than 500 grams) market thereby creating networks of small players who are not only cost effective but also more flexible than the large national players.This segment of the industry has taken advantage of the large manpower and is gradually moving away from â€Å"Angadiyas† or manual inter-city couriers to a more organized network that shares transport infrastructure (and even consolidates sub-packages from various small couriers in a single large courier bag to be transported by air cargo or road transport rather than these sub-packages being carried by several manual couriers on the train; the courier firms are gaining on service and are sharing fixed costs).The entry of large third party logistics (3PL) carriers like Federal Express and DHL and the expansion of domestic networks of Indian firms like Gati and Shreyas Shipping is also transforming the nature of services and the business practices across the sector. Table 4 gives an idea of the investment plans announced by the various firms for the coming financial year and gives a sense of their increasing activity. Another trend driving growth in this sector has been the consolidation amongst the logistics player.Mergers & Acquisitions amongst Indian and MNC logistics firms is starting to increase the reach of MNC 3PLs in the domestic Table 4: Investment Plans of Major 3PL Service Providers Firms DHL TNT Gati *Shreyas Shipping and Logistics Investment Details/ Plans (2007-08) (in US $ mn) 260 115 200 350 Source: Baxi (2006), Sanjai (2006a) W. P. No. 2007-03-07 Page No. 14 IIMA INDIA Research an d Publications market while consolidating the business (e. g. , DHL acquired Blue Dart, TNT acquired Sppedage Express Cargo Service, Fedex bought over Pafex etc. ).Consolidation is expected to be beneficial to both the service providers as well as the consumers. Initially MNC 3PL firms were providing only custom clearance and freight forwarding facility to their international clients. With the logistics market growing we should see a shift in this trend. The complexity of managing the supply chain in the pre-consolidation era is illustrated through the following scenario at Nokia (Figure 3) . Logistics activity for Nokia’s India Hub was maintained by a large number of Figure 3: Typical Logistics Supply Chain of NokiaDHL, Panalpina Inbound logistics Nokia Hub in Sriperumbudur Gati, Blue Dart Domestic Outbound logistics UPS Warehouse in India Export Market International Outbound logistics DHL Source: Mishra et al. (2006 service providers. Coordination and handover was a problem at times. With DHL acquiring Blue Dart, it is now able to provide seamless end-to-end integrated supply chain solutions. Downstream distribution channels have also seen some consolidation.Manufacturing firms, particularly, in the FMCG sector have started to reduce the number of wholesalers (and at times, distributors) so as to increase the reach and consequently the returns to each wholesaler. This also induces them to invest in new productivity enhancing technology and effective managerial practices. Technology in the logistics chain is being upgraded bringing better visibility on customer off-takes (though an absence of cash registers and the accompanying regulatory discipline to avoid tax evasion stand in the way of automated data updation).Introduction of more efficient transport technology and mobile communication has the potential of changing the logistics practices in the industry. Increasing competition and the low penetration of IT also implies that the scope for change is immense and imminent. The agri-business sector’s supply chain, for example, has changed significantly with increasing investment in coldchains across the country. With this, fruits and vegetables are being transported long distances (often more than 1500 kms) and milk grid is able to pickup and deliver liquid W.P. No. 2007-03-07 Page No. 15 IIMA INDIA Research and Publications milk from and to remote areas more frequently. Here the role of cooperatives like AMUL has been exemplary both in increasing the size of the distribution network and also in reorganizing the supply network very efficiently along with enormous buildup of social capital – a pre-requisite for growth in emerging economies (Chandra and Tirupati, 2003). Low penetration of hand eld technologies for order processing and tracking, product tracking and material handling accessories, as well as IT for improved decision making can be seen as opportunities for growth. Mobile technologies also hold the potent ial for rapidly using information for real time decision making as well as for coordinating both the inbound and outbound logistics. Indian customers exhibit strong value and variety seeking behaviour hence developing capabilities in the process of product and service delivery will induce loyalty (i. e. , process loyalty).Government policies have been another driver of change in the logistics industry. The trend towards a higher road cargo traffic as compared to rail is going to require better logistics control and coordination. The golden quadrilateral road project and the east & west rail corridors are expected to change the reactiveness of Indian firms through shorter lead times as well as lower maintenance costs on the transport equipment. They also have the potential of reducing the procedural delays on highways by reducing the number of checks and related stoppages of vehicles.Its impact on perishable good will be most significant. Thirteen States and three UTs have already am ended the State laws allowing private sector participation in direct purchases of farm produce from farmers (Ahya, 2006) which is making procurement more efficient and is bringing better technology as well as products in the rural production and distribution network (e. g. , see ITC echoupal in the next section). Banks have developed venture capital funds for logistics players. Small Industries Development Bank of India or SIDBI, for instance, has invested $ 2. mn in the Mumbai based firm Direct Logistics (Baxi, 2006). The unbundling of the logistics supply chain (both the physical pickup, storage and movement of goods as well as allied services like invoicing, order management, freight forwarding, customs clearance, octroi tax management etc. ) will lead to business opportunities and add value to the customers. An interesting example is that of Reliance Connect Service Centres that have been established on Indian highways by Reliance industry along with petrol stations.The Connect Centres provide a place for truckers to relax (sometimes with overnight stay facilities), send information (including data) to parent firms on their location, completed transactions etc. , receive material/instructions from the firm, remit money to parent firm, W. P. No. 2007-03-07 Page No. 16 IIMA INDIA Research and Publications etc. It has become a one-stop shop for truckers and their companies to keep in touch. Similarly, once VAT is introduced, it will simplify the process of goods servicing and will lead to rationalizing of many operational decisions.The implication of the emergence of a strong service industry on logistics performance is not well understood. Perhaps, a new business segment will emerge that is technology driven and will help coordinate activities across business channels. For example, there is a need to integrate the flow of information, goods and services between a medical physician, a diagnostics center, hospitals & nursing homes, and retail medical outlets à ¢â‚¬â€œ all of which are un-coordinated independent entities at the moment.This could range from digital transmission of MRI scans from a diagnostics center to a computer to blood collection and delivery from physician’s various city centers to nursing homes/blood banks or directly to dispersed operation theatres. The role of a coordinating agency becomes, organizationally, valuable in such an environment. The need is to link physical logistics processes with communication technologies –building on the strengths of the IT and mobile communication industries. 5 The Renewal of the Sector: Some Innovative ExperiencesThere have been several instances of firms undertaking innovative re-design of their logistics systems or deployment of interesting business models to enhance the effectiveness of their networks in order to deliver value to their customers. Sometimes it was done to overcome an inherent disadvantage that may exist in the supply chain. In this section, we presen t a few such experiences both at the firm level and at the industry level, through brief caselets highlighting their innovative contribution. They also represent the renewal process that is transforming the logistics sector and the distribution strategy of firms.GATI3 Established at a time (in 1989) when firms in India hardly outsourced their logistics requirements, Gati has transformed itself from a cargo movement company to become one of the leading end-to-end logistics and supply chain solutions provider in India. Continuous innovation and high end technological investments to improve service 3 Source: www. gati. com, Sharma and Thakur (2006), Prowess (2006), Reddy (2007) W. P. No. 2007-03-07 Page No. 17 IIMA INDIA Research and Publications quality, speed and efficiency can be ascribed as the reasons behind their success.It is staring to connect with mass retail market in several cities through 1500 Customer Convenient Centres. It is also the first Indian company to operate in th e far-east market with its own subsidiary in Hong Kong. On the service front, there have been several firsts in India by Gati – a money back guarantee on cargo services, cash-on-delivery and a tollfree number for convenience of customers. Gati operates one of the largest road networks linking 594 districts out of a total of 602 districts in India at a turnover of $104mn in 2005-2006. It covers 3. 2 lakh4-km every day with a fleet size of 2000 trucks.Its automated shipment tracking ability has brought it closer to the customers – for example, the SMS based tracking system has allowed the customers to continuously get an update on the status of their consignment. Another feature also enables customers to get email based conformation of any delivery. Gati has also transformed the warehouse management practices in India with its modern system, WMS – a web based warehouse management system that provides both functionality and flexibility to customers in managing thei r warehouse operations. WMS enables Gati and its customers to track inventory status in real time.Along with its transportation related capabilities, this has allowed Gati to manage the entire outbound logistics (i. e. , warehousing, transport and dealer/retailer replenishment) of Blue Star for his home air-conditioning division. Order processing times and shipping errors have decreased and customer service levels have improved, as a consequence. Currently, Gati operates with 10 warehouses and plans to setup another 25 over the next three years at an investment of $100mn. It is designing these new warehouses with mechatronic systems that could lead to a paradigm shift in warehouse management in India.It has implemented CRM and ERP systems, using IT to full advantage delivering value to the customers. AMUL5 The Kaira District Milk Cooperative Union or better known as AMUL was established in 1946 in Anand in the western State of Gujarat with an aim to remove the intermediaries in the milk procurement and distribution process and thereby increase return to milk farmers. The milk farmers were mostly marginalized members of the society and most of 4 5 1 lakh = 100,000 www. amul. org; Chandra and Tirupati (2003) W. P. No. 2007-03-07 Page No. 18 IIMA INDIA Research and Publications hem barely poured a few litres of milk each day. They, however, depended on this for their livelihood and any money lost to the middleman or to uncertainty in the environment meant a threat to their existence. Thus was born AMUL (which means invaluable in Hindi)! The Story of AMUL is an extraordinary story of vision, effort and power of networks for the benefit of the poor. From being a net importer of milk in 1947 when India became independent, India has now emerged as the largest milk producer in the world. This remarkable story has been scripted by a network of cooperatives called AMUL.The AMUL network is coordinated by the Gujarat Cooperative Milk Marketing Federation (or GCMMF) which markets milk and milk products that are produced by 12 Milk Unions (each having several factories) one of which is AMUL at Anand. The Unions are spread in twelve districts of Gujarat. Each Union collects milk from farmers through cooperative Village Societies. (This structure is now replicated in almost all the States of India. ) In 2005-2006, GCMMF had a sales turnover of $860mn through milk and milk products (its Unions or plants produce 15 categories of milk products with several products in each category).The 12 Unions collect about 6. 3million litres of milk every day from 2. 5 million farmers through 11,962 Village Societies. (with an annual collection of 2. 28 bn litres in 20052006). Each village society may have 100 to 1000 member farmers who pour milk twice a day. Twice daily, about 500 trucks collect milk from these Village Societies and bring them to either of the five chilling centers or the processing plants (or Unions). The Unions process the liquid milk – produ ce milk of various types for consumption, convert some to powder as inventory and use both powder and liquid milk for producing milk products.These products are distributed to consumers through a channel comprising 4000 stockists (or distributors) and 5,00,000 retailers. It is not difficult to imagine the complexity of coordinating such a network of perishable products with an explicit social objective, in addition to a commercial one. The network realized the need for a unique model to deliver value to customers and through that serve the key objective of setting up of the cooperative – making a producer out of a poor consumer and helping her get better returns. W. P. No. 2007-03-07 Page No. 19 IIMA INDIA Research and PublicationsBriefly, we will illustrate the unique mechanisms used by this network to coordinate the complex supply chain through the intervention of a number of third party service providers (distributors, retailers, logistics service providers and IT support groups). The network practices frequent delivery and works with low inventory levels in the chain, supported by extensive information network and IT kiosks at the milk pickup locations that provide a variety of services. Payment to farmers for RM procurement is instantaneous (well, almost! ) – during the same or in the next pouring shift by the Village Society staff.Milk is carried in cans by trucks (twice daily) or in chilling trucks, once in a day, to the plants. The routes of the trucks are well established and the arrival timetables at each Society well known and rarely is there any delay. This helps provide visibility to every member of the chain and improves the return on investment in the channel. The network operates with a zero stock out through improved availability of products and quick delivery. Disciplined planning to reduce variability at each stage helps in maintaining timeliness in the channel.GCMMF coordinates the production plan between the twelve Unions and ensures matching of geographic markets with supplies. TQM and Hoshin Kanri are the key tools used to plan and implement daily production and change programmes – these have facilitated a six-sigma performance throughout the network and has led to a doubling of sales revenue in the last ten years. Most interestingly, AMUL has the largest market share in every product category that it competes in – its competitors are both large MNCs and large & small Indian firms.AMUL illustrates how good managerial practices can help bridge the gap between profits for the supplier and low cost, highy quality products for consumers – all through exceptional coordination of logistics operations across an extensive network. AMUL operates with one umbrella brand for products from all its member Unions – a testimony to strong quality and cost coordination across all Unions and Village Societies. In addition, its has been singularly responsible for pulling out several million o f its members from poverty, ill health and illiteracy through its business model (called Anand Pattern) and social programmes.For details on this case study see Chandra and Tirupati (2003). W. P. No. 2007-03-07 Page No. 20 IIMA INDIA Research and Publications The DABBAWALLAHs of MUMBAI6 The â€Å"dabbawallah’s† or the ‘lunch box delivery people’ of Mumbai pickup and deliver lunch boxes from homes or restaurants and deliver it to the customer’s office – all within a specified time frame – and then deliver the empty box back to the place of pickup. It is an example of how processes can play an important role in coordinating logistics of an important service industry in India.The Nutan Mumbai Tiffin Box Charity Trust of Mumbai was established in 1891 to provide pick-up and delivery of lunch for Britishers working in Mumbai. Since then it has become the leading lunch delivery cooperative in the city. It picks-up and delivers 200,000 lunch boxes in a standard container every day and returns the same to the place of pickup. The firm has an annual turnover of about $12 mn and employs 5000 people for pickup and delivery – almost all of them are uneducated. However, there are less than 10 boxes mis-delivered or un-picked in a month!We discuss, briefly, the processes that help make this logistics network errorproof and deliver such an astonishing performance. The operations of the group has attracted global attention and won them many awards. They represent a growing group of service providers that exist as an element of the logistics network, provide niche service and generate value in return for the customer. The Trust which is organized as a cooperative is operationally organized in hierarchical teams – pick-up teams, consolidation teams, delivery teams (and then the reverse logistics for empty boxes with reversing of the functions for the teams).Typically, each dabba or the lunch box passes through more t han four pair of hands and may be transported up to 60 km each way. Pickup is done between 7. 30am-9. 00am, delivery between 12. 00 and 1. 00pm and return between 2. 00-5. 00pm. These represent tight time-windows where a team of 20-25 members (and supervised by a team leader who also fills in as a pickup person in case of any absence) pick-up lunch boxes from homes – about 30 per pick-ups person. The boxes are carried in a specialized fixture on a bicycle to the nearest train station where the boxes are consolidated by destination.A consolidation team performs this task and carries the boxes (which may have been picked by members of different teams but need to travel to the same destination geography) into the train. Often tiffin or lunch boxes are un-loaded at intermediate train stations – re-consolidated with boxes coming from other locations (i. e, cross-docked) and carried on a third train to its 6 Lecture of Mr Megde, President of the Nutan Mumbai Tiffin Box Suppl iers Charity Trust at IIM Ahmedabad, 2003; Chandra (2004) W. P. No. 2007-03-07 Page No. 21 IIMA INDIA Research and Publications estination station. At the destination station, the lunch boxes coming from various origins/cross-docking destinations, are once again segregated by the building where the delivery is made. Finally, a delivery team picks up their boxes, i. e. , boxes that they will deliver to specific owners in specific buildings, carry them on their bicycles and deliver them in the office of the owner of the box. Later in the afternoon, the same person picksup the empty box and pursues the reverse logistics and the box is ultimately delivered at its point of origin – either a home or a restaurant.With this as the complexity, what may be plausible reasons for such low errors? Contextually, the group members see their role as very important – they are responsible for delivering food to their customers – socially, it enhances their commitment to their tas k and establishes a critical customer-service provider link. Operationally, the handoff is done successfully through simplification or breaking down of tasks, codification and repetition. The designed process is simple and easy to understand for each operator.More important, each operator has a limited yet definite role. This role is one of pickup, consolidation & transfer and delivery (and the similarly for reverse logistics). Each pickup operator does not pickup more than 25-30 boxes as that is the number of addresses etc. that he can remember accurately which helps in avoiding mistakes. The lunch box is enclosed in a standard container which carries a unique code for the destination station, the building where the box is to be delivered and the floor number in that building where the office of the customer is located.Each operator recognizes a limited set of codes that are relevant to him (and does not have to learn the entire coding scheme). And finally, repetition of the task ( i. e. , same pickup location, same place for cross docking, same delivery location etc. ) helps in making the task foolproof. Of course, what helps is the linear geography of Mumbai, the punctuality of trains, relatively stable demand and strong inter-dependence between operators. It is an example of how manual logistics systems can be organized to effectively deliver value to the customer.ITC e-choupal7 The e-choupal project was launched by ITC (a large diversified company with strong FMCG presence) in 2000 in the central Indian State of Madhya Pradesh (MP) to reorganize the distribution of soyabean in rural markets. Today e-choupal reaches out to Source: www. echoupal. com, Talk by the eChoupal CEO S Sivakumar at IIMA, 2003, Mitra (2004), MBS CS (2006) W. P. No. 2007-03-07 7 Page No. 22 IIMA INDIA Research and Publications more than 3. 5 million farmers in 31,000 villages through 5,200 internet enabled kiosks and now covers a variety of agri-business products.The e-choupal was a u nique venture which aimed to eliminate the middlemen from the agricultural commodity supply chain and reduce information asymmetry for the farmers. It is an extremely profitable rural distribution system with its unique design features. The e-choupal was started with an objective to re-organize the soybean trade which was operating in an inefficient manner. Farmers used to sell their produce through government mandated markets called â€Å"mandis. † Mandi trading was conducted by commission agents who bought and sold the produce.As the produce was sold through auction by these traders, farmers would find out the market price only upon arrival at a mandi. If the buyers had purchased enough for the day at this mandi then either the auction prices fell dramatically or the farmers had to wait for the next day’s auction. While all this may have been happening at one mandi, the farmers were unaware of the auction status at other mandis where there could have been shortages. The decision regarding the quality of the produce was also dependent on the trader.Similarly, distortions in price and quality effected agro-business trading firms like ITC who were, by government law, required to purchase from the mandi and through these traders and not directly from farmers. Under the e-choupal model, kiosks were setup in villages providing farmers information in local language on agricultural inputs, best practices in farming, market price realized at various mandi auctions, weather details etc. Nevertheless, it enabled ITC to purchase products directly from farmers (through a change in the law), enhancing quality of products and significant cost reduction (e. . , it saved $5. 40 per tonne on soyabean). The e-choupal now has just two service providers in its procurement chain – the sanchalak, a person between the kiosks and the farmers who inspects the produce and based on his assessment of the quality, the price of the commodity is decided (he gets 0. 5 p er cent commission on the volume sold) and samyojak, a person who manages the ITC warehouses (he gets 1 per cent commission on transactions). Samyojaks also handle much of the logistics at the procurement hub like storage management and transportation from the hub to processing factories.ITC was able to overcome the hurdles posed by infrastructure inadequacy in villages. It uses solar energy to power the batteries of the computer kiosks and has shifted from W. P. No. 2007-03-07 Page No. 23 IIMA INDIA Research and Publications dialup connection to satellite based technology (VSAT). Farmers are now able to make informed decisions as they understand the market better leading to higher productivity. Various seed and fertilizer companies are now able to reach wider market with lesser transaction cost.The e-choupal has provided a market for more than 64 companies (to name a few, Monsanto and Nagarjuna Fertilizers). This innovative direct procurement channel is a win-win mechanism for all the involved parties. ITC is now building a rural retail infrastructure on the foundation of the e-choupal network thereby changing the rural distribution landscape. Transforming the Auto-Component Replacement Supply Chain With changing government policies and consumer preferences, the distribution supply chain of Indian companies has been effected significantly. This poses new challenges for various channel partners.We illustrate this transformation process through the lens of the auto component replacement market supply chain and discuss its implications. We surveyed 21 manufacturers and 22 channel members (distributors, wholesalers and retailers) spread equally in Northern and Western clusters of auto component Industry in India for this purpose. The auto component industry produced parts worth $6. 7 billion (2004-05) with 57 per cent of the demand coming from the replacement market (ACMA, 2005). Low entry barriers have led to a large number of players in the replacement market.T here are about 400 firms in the organized sector and more than 5000 in the unorganized sector. Another feature of this sub-sector is the long duration of ownership of vehicles in India which leads to high requirement of parts. It is also found, anecdotally, that willingness to pay for parts decreases with the length of ownership. This has led to an intense segmentation of the parts market by price. Pre–1991, this industry was still in a nascent stage. It was characterized by few manufacturers and low demand. Consequently, the distribution network was flat (Figure 4a).Availability of spare parts was a key issue with long delivery lead-times and manufacturers sought large order sizes. This also led to the growth of un-branded parts or parts branded by regional producers (often supplied by small firms) in the replacement market. The product was sold chiefly on personal relationship with the buyer; quality, brand and price were not the selling propositions. Maruti Udyog Limited h ad created a W. P. No. 2007-03-07 Page No. 24 IIMA INDIA Research and Publications network of suppliers of quality parts for its vehicles.Hero Honda had done the same for its motorcycles. Post-1991, the liberalization of the automotive industry led to an entry of many foreign auto players. Because of the impending automobile industry boom and high margins for distributors, the demand for spare auto-parts was expected to grow. The distribution channel was modified with the entry of two more channel members, i. e. , wholesalers and semi-wholesalers (Figure 4b). The latter were smaller versions of the former and locally oriented. The period 1994-2007 saw a major transformation of the distribution structure (Figure 4c).OEMs started to operate in the replacement market through a parallel supply chain selling parts through their service stations. Additionally, the entry of large number of channel members caused semi-wholesalers to move out of the supply chain – they either moved up the chain to become wholesalers or moved down to become retailers. To strengthen the coordination of this extended supply chain and to buffer against the differential tax structure across states, companies started to operate with Carry and Forwarding Agents (C&FA). Transportation related activities are carried out by all the members of the supply chain.Manufacturers use services of 3PL for transferring their stock to C&FA and distributor locations. But thereafter, the transportation activity is solely managed by channel members themselves. An analysis of the available IT infrastructure and its usage pattern for all the channel members in our sample survey indicates that there is a high deviation in the usage of IT in the replacement market supply chain. Eighty seven per cent of the sampled firms use an ERP package – most of which is customized and developed locally. The main impediment in the use of a branded packages is the high cost of purchase and mplementation. These pac kages are used to generate sales report, order from suppliers, account for the financial transactions and track the level of inventory at plant and C&FA. Manufacturers order the stock from suppliers mostly through emails. In order to track inventory in the channel, firms also made IT investments both at C&FA and within the firm. Linking the C&FA to the company website enabled firms to check stock status at the C&FA and reduce the order processing and customer response times. Larger firms are also providing a similar setup to their distributors.Since the C&FA is mostly owned W. P. No. 2007-03-07 Page No. 25 IIMA INDIA Research and Publications and managed by the firms, manufacturers are also able to check the inventory status, dispatching status and customer records. Distributors have invested primarily in computers for keeping track of the inventory and updating accounting details. On the other hand, rest of the channel partners (wholesalers and retailers) don’t even own comp uters. Parts are ordered primarily on the phone. Interestingly, most distributors were found to be following periodic review olicy while the rest of the channel members were following continuous review policy because of their low sales volume. Post 2007, with the implementation of a uniform tax structure across all states, there will be some changes in the way firms operate. The C&FA will, perhaps, become redundant as most manufacturers will prefer to deal directly with distributors. The concept of an exclusive distributor is expected to vanish. It is expected that with the increase in variety of components, distributors might become wholesalers and will stock multiple brands for the same product.Two parallel distribution channels are expected to be in operation – the OEM chain and the non-OEM chain (Figure 4d). OEM network will primarily handle the passenger car replacement parts and the non-OEM distribution network will sell parts for Light Commercial Vehicles, Heavy Commer cial Vehicles, 2-wheelers and 3-wheelers as the car customer is becoming more brand conscious even while replacing parts which comes along with superior service. Further, we perceive that the more advanced automobiles, Free Trade Agreement with other Asian countries and VAT are going to change the way the replacement market operates.There will be a rationalization of this market in terms of number of firms competing thereby leading to an improvement in quality, delivery time and availability of parts. The size of the firms is expected to increase with an emergence of large national players (in addition to OEMs). This may reduce the number of producers exclusively focusing on the local markets. W. P. No. 2007-03-07 Page No. 26 IIMA INDIA Research and Publications Figure 4a Manufacturer Figure 4b Manufacturer Distributors Distributors Retailers Institutional Buyers SemiWholesalers Wholesalers Institutional Buyers RetailersGovernment Agencies & Transport Companies Garage-station Govern ment Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners Figure 4c Manufacturer Figure 4d Manufacturer Institutional buyers C&FA OEMs Institutional buyers OEMs Wholesalers Distributors Authorized Service Stations Authorized Service Stations SemiWholesalers Retailers Wholesalers Vehicle Owners Vehicle Owners Retailers Government Agencies & Transport Companies Garage-station Government Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners W. P. No. 2007-03-07 Page No. 27 IIMA INDIA Research and Publications Challenges Ahead Several challenges remain before the Indian logistics sector and its future success will depend on the ability of the industry to overcome these hurdles. Some of these impediments are at the firm level while others are at the policy level. At the policy level, the issues of infrastructure and integration of the nation’s logistics network remain the two most critical areas that require attention. The growth of inf rastructure, since 1991, has been quite extensive (covering a wide geographical area) as well as strategic – linking the key industrial, consumption and transshipment centers.However, some imminent weaknesses need be addressed. Movement beyond the golden quadrilateral is required to bring goods from upcountry production sources to main shipment centers. The rate of growth of expressway has to increase. Poor road conditions increase the vehicle turnover, pushing the operating cost a