Friday, January 24, 2014

Sample Size Calculation, Power Calculation, Random Allocation, Chi Square Test, Correlation and Regression, ANOVA, Wilcoxon test

Group Work on Sample Size Calculation

1.      The mean birth weight (SD) of newborn is observed to be 2.25(0.4) kg in pregnant women belonging to low socioeconomic group. A study is to be carried out to determine whether nutritional supplementation would increase the birth weight of newborn. It is planned to include two groups of pregnant woman - one without supplementation (control group) and the other with supplementation (test group). Calculate the size of each group.

2.      The cure rate of a drug in a disease is 20%. It is claimed yoga is better than the drug and a trial is to be conducted find out the truth. It is decided that a even 10% increase in cure rate would be clinically important. The alpha and beta were set at 0.1 and 0.1. The results will be analysed using Chi Square test. How many patients would be required for the trial?

3.      The mean(SD) hospital stay of patients after a conventional surgical procedure (CP) is 12.3(4.8) days. A modified procedure(MP) is to be tried to reduce the stay. Two groups of patients will be undergoing either CP or MP. Their hospital stay will be compared using unpaired t test at p<0.05 with power of 90%. The minimum important difference is expected to be 3.Calculate the sample size for each group.

Employee Satisfaction Survey – As a Retention tool and a Hygiene factor


 What is employee engagement exactly? Alpha Measure defines employee engagement as the level of commitment and involvement an employee has towards their organization and its values.
The primary behaviors of engaged employees are speaking positively about the organization to coworkers, potential employees and customers, having a strong desire to be a member of the organization, and exerting extra effort to contribute to the organization’s success. Many smart organizations work to develop and nurture engagement. It is important to note, the employee engagement process does require a two-way relationship between employer and employee.


Why is Employee engagement so important?
An organization’s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior business results. Engaged employees will stay with the company, be an advocate of the company and its products and services, and contribute to bottom line business success. Engaged employees also normally perform better and are more motivated. There is a significant link between employee engagement and profitability. Employee engagement is critical to any organization that seeks not only to retain valued employees, but also increase its level of performance.

ASSIGNMENT TOPICS FOR M.B.A HR & MKTG

DISTRIBUTION AND LOGISTICS MANAGEMENT
1.      Role and Functions of channel distribution.
2.      Motivational tools of distribution channels & Measures of channel member financial performance.
3.      An overview of warehousing in India.
EVENT MANAGEMENT
1.       Events- As a marketing tool - Discuss
2.       Segmentation and targeting of the market events.
3.      Functions of management in events.
4.      Strategic Market Planning

Logistics and Supply Chain Management Practice in India


ABSTRACT

India is the fourth largest country in terms of Purchasing Power Parity (PPP) and constitutes one of the fastest growing markets in the world. Globalization of businesses, infrastructural bottlenecks, increasing uncertainty of supply chain networks, shortening of product life cycles and proliferation of product variety have forced Indian firms to look beyond their four walls. They face issues related to choosing and working with the right supply chain partners (suppliers, customers and logistics service providers), fostering trust between them and designing the right system of gauging performance.
World map showing 2007 estimates about GDP (PP...
INTRODUCTION
Logistics and SCM practices may be defined as a set of activities undertaken to promote effective and efficient management of supply chains. These include supplier partnership, physical movement of goods, meeting customer demands and information sharing throughout the supply chain. Some of the key logistics and SCM practices that impact performance are related to estimation of customer needs, efficient and effective delivery, integration and collaboration throughout the supply chain, sharing of information and vision using ICT as well as informal methods and use of specialists for performing specific jobs across the supply chain. All of these practices impact logistics and supply chain performance.
The de-regulation of the Indian economy in the 1990s has attracted global players and has unleashed a new competitive spirit. However, a distinctive characteristic of the Indian economic environment is the inadequacy of basic inputs normally required to support organized economic activity. The UPS Asia Business Monitor Survey, 2004 (Available at:  http://www.etintelligence.com/ ) finds that besides the lack of government support, poor logistics infrastructure and poor supply chain efficiency are the major obstacles to competitiveness in India. The Indian infrastructure comprising roads, railways, airports, seaports, ICT and energy production is poorer as compared to many other countries. However, things are changing for the better at a fast pace. The Growth Competitiveness Index survey conducted by the Geneva-based World Economic Forum (WEF) for 2005-06 puts India at 50th position among 117 countries in its Global Competitiveness Report, five places up from previous years ranking of 55. (Available at:  http:// /www.weforum.org/)
A few years ago, logistics and SCM were seen as necessary evils in India; today they are seen as a matter of survival and competitive advantage. As companies look at logistics and SCM strategically, they turn to specialized service providers to cut out non-core activities from within. A rising focus on outsourcing is leading to a surge in business performance for logistics service providers. One offshoot of the demand for logistics services is that many companies are changing their names to include ‘logistics’ somewhere as well, much like the dot-com boom times in the early 1990s.
Worldwide, best-in-class companies have invested in enabling infrastructure and technology to realize their supply chain vision into a reality. These include integrated supply chain cost models for decisive inventory management, technology for handling supply chain throughput and information systems capable of fostering visibility across organizational boundaries. Dell Computers and Wal-Mart were able to achieve leadership positions because of their efficient and effective supply chain management practices. Both of these have invested enormously in ICT to help them have continued focus on customer needs and supply chain efficiencies. Many instances of novel and innovative supply chain practices such as cross-docking, Collaborative Planning, Forecasting and Replenishment (CPFR), extensive use of bar-codes and now RFID, and direct-to-home delivery have been introduced by these firms. Wal-Mart had its own satellite communication system as early as 1983. Wal-Mart’s PoS data is shared with its suppliers to reduce the dependence on forecasts.
English: GDP per capita, purchasing power pari...Similarly, there are multi-billion companies which have shifted focus from courier and cargo to logistics and supply chain; from being freight forwarders to integrated shippers; and from customs clearances to consultants. Indian SCM service providers are also evolving rapidly. The shift in service providers from just movers of material to logistics to supply chain services has quickened in the past few years. Truckers are moving up into integrated haulers; large Indian companies with multi-million spends on logistics are hiving off entire divisions into service providers who handle not just the parent’s logistics but also of others; others are forming joint ventures to leverage skills. IT companies now provide not just the hardware and software, but consultancy for solutions, examples being Satyam, Wipro, Infosys and TCS. Big players like DHL have invested US $ 250 million in India and more is on the way. It has already acquired Blue Dart, the top firm in air logistics business. Container Corporation of India (Concor), at US$ 380 millions, the largest listed firm in logistics in India is diversifying. Others, like Gati, XPS and Safexpress, are expanding to UAE, Sri Lanka, Singapore and Bangladesh as well as into new areas like modern warehousing.
In our on-site observations, we cover a wide spectrum of firms covering varied businesses so as to get a reasonable insight into logistics and SCM practices. Care has been taken to ensure that these firms and their supply chains provide diversity in terms of ownership and industry sectors such as global travel, financial and network services, retail, milk and milk products, health services, sales and distribution of electronic consumer products, power generation, electrical appliances and switchgears, hospitality, international logistics service, domestic transport service, automobiles and auto-ancillary, Fast Moving Consumer Goods (FMCG) and computers. The same is shown in the Table I.
Table I: Nature of Business and Number of Firms Covered in Present Study
Nature of Business
Number of Firms
Automobiles
5
Food and Apparel Retail Chains
4
FMCG
3
Auto-ancillary
2
Electrical Appliances and Switchgear
2
Computers
1
Domestic Transport Service Provider
1
Global travel, financial and network services provider
1
Hotel
1
International Logistics Service Provider
1
Milk and Milk Products
1
Power Generation
1
Sales and Distribution of Electronic Consumer Products
1
Tannery
1

LITERATURE REVIEW

Literature portrays logistics and SCM practices from a variety of different perspectives with a common goal of ultimately improving performance and competitiveness. Based on literature, we find that the important supply chain practices concerns are mainly related to:
1. Supply Chain Collaboration and Partnership with various stakeholders such as the product developers, suppliers, channel partners and end-users.
2. Supply Chain Structure including facilities network design taking into account related transportation and logistics.
3. Forecasting and Demand Management to cope with supply chain complexity in a cost-effective and delivery-efficient way.
4. Use of Information and Communication Technologies (ICT) to facilitate the above.
While there is plenty of published literature that explains or espouses SCM, there is a dearth of empirical studies examining logistics and SCM practices. Galt and Dale (1991) study ten organizations in the UK and find that they are working to reduce their supplier base and to improve their communications with the suppliers. Fernie (1995) carries out an international comparison of SCM in the grocery retailing industry. He finds significant differences in inventory held in the supply chain by the US and European grocery retailers, which could be explained by difference in degrees of their SCM adoption. Tan and Wisner (2000) compare SCM in the US and Europe. Tan (2002) relates SCM practices and concerns to firm’s performance based on data from US companies. He lists nine important supply chain concerns such as lack of sophisticated ICT infra-structure, insufficient integration due to lack of trust and collaboration among the supply chain stakeholders and thereby lack of supply chain effectiveness and efficiencies. Basnet et al. (2003) report the current status of SCM in New Zealand, while Sahay et al. (2003) discuss supply chain strategies and structures in India. These surveys rank the perceived importance of some SCM activities, types of hindrances and management tools on the success of SCM using representative samples mostly from manufacturing. Quayle (2003) surveys supply chain management practice in UK industrial SMEs (Small Manufacturing Enterprises) while Kemppainen and Vepsalainen (2003) probe current SCM practices in Finnish industrial supply chains through interviews of managers in six supply chains. They analyze the change of SCM both in terms of operational practices and organizational capabilities. Chin et al. (2004) conduct a survey that examines the success factors in developing and implementing supply chain management strategies for Hong Kong manufacturers. Moberg et al. (2002) state that there is little literature on information exchange. Feldmann and Muller (2003) examine the problem of how to establish an incentive scheme to furnish reliable and truthful information in supply chains.
There is little literature on logistics and SCM practices in India. Available literature focuses either on the best practices (Joshi and Chopra, 2004) or on re-engineering of internal operations of the firms (Deshmukh and Mohanty, 2004, Kankal and Pund, 2004). In context of ICT, Saxena and Sahay (2000) compare the manufacturing intent to be an agile manufacturer and their Information Technology (IT) infrastructure in terms of scope of use, extent of use and integration of IT-based systems. The more recent studies are mainly based on questionnaire surveys and secondary data sources (Sahay and Mohan, 2003, www.etintelligence.com, Sahay et al., 2006). Vrat (2004) discusses some issues and challenges as well as the potential of SCM in India. All these studies find Indian firms generally lagging behind their counterparts in the developed countries.
LOGISTICS AND SCM PRACTICES FROM SECONDARY SOURCES
Industry and academic estimates put logistics and SCM spend in India at approximately 13% of the Gross Domestic Product (GDP). Global estimates for this vary and are around 13% of GDP in China and about 9% of GDP in the US. The transportation cost in India accounts for nearly 40% of the cost of production, with more than half the goods being moved by road. Trucking accounts for nearly 70% of transportation and accounts for 60% of all logistics cost. 67% of truck ownership is in the hands of small unorganized players. Road is followed by rail and finally coastal shipping. Rail has been steadily losing ground due to myopic government strategies and inherent inefficiencies. The freight movement of Indian railways has risen to 411354 net tonne-kilometers (Available at: http://www.indianrail.gov.in/) and the total road length is 3315231 kilometers (Available at: http://www.nhai.org). Though enormous maritime routes are available combination of poor government policies and lack of initiative from the private sector, water which is probably the cheapest mode of transport is barely used. Air as a mode is limited to a small percentage of courier shipments. Various SCM spend indicators such as in-bound transportation costs, inventory related costs and distribution expenses as percentage of net sales vary from industry to industry. However, as per Centre for Monitoring Indian Economy (CMIE), they are coming down over a period of years. The aggregate of the same for nine major manufacturing industries for four years are shown in Table II. These industries spent nearly 17-18% of their net sales on various logistics activities, including distribution, warehousing, and inventory. Global averages are around 9-12%. So, there is ample scope to reduce spends on logistics. This in turn allows companies to protect operating margins during downturns and make above-normal profits during upturns.
Table II: SCM Spend in 9 Major Indian Manufacturing Industries
SCM Spend Indicator
2001-02
2002-03
2003-04
2004-05
In-bound Transportation Costs as percentage of Net Sales
1.5%
1.4%
1.3%
1.4%
Inventory-related Costs as percentage of Net Sales
13.3%
13.9%
13.1%
13.1%
Distribution Expenses as percentage of Net Sales
3.0%
2.8%
2.8%
2.7%
Total SCM Spend as percentage of Net Sales
17.8%
18.1%
17.2%
17.2%
Source: CMIE

The focus on costs and ICT-enabled services is leading to electronic procurement that cuts time and costs (including transaction costs) and brings in transparency and speed. The ERP industry in India is worth US$ 300 million and is growing at over 15% a year. 52% of the respondents in ETIG (Economic Times Intelligence Group) SCM 2004 survey (Available at: http://www.etintelligence.com/) have implemented ERP and three-fourths of these find ERP to be extremely effective in business. 44% of the companies surveyed had already implemented data warehousing and mining applications, and another 26% had plans to do so. Almost every firm found this practice to yield good results in revealing consumer trends, patterns and potential segments.
For supply chain tracking, the most preferred method is the truck driver reporting his location. Another method gaining popularity is the use of SMS (Short Messaging Service). Time lags here can be pre-determined. Depending on the number of times the SMS signal is polled and sent by to the base station, the location of the vehicle can be accurately determined. With Global Positioning Systems (GPS), this is no longer the issue. However, the use of GPS for supply chain management in India is relatively low. Service providers like Transport Corporation of India (TCI) have poured in US$ 0.34 million for GPS in their trucks. Firms like Bajaj, Maruti Udyog Limited, TVS Motors and Bharat Shell are already using TCI’s GPS systems.

LOGISTICS AND SCM PRACTICES OBSERVED ON-SITE IN 25 FIRMS

In our on-site observations, we find that the primary focus is on quality, cost and service. Recently, responsiveness (delivery speed, volume flexibility and innovation) is also catching up management attention. Correspondingly, the major concerns in all these firms and their supply chains are related to costs, clarity of demand, reliability of partners, shortening delivery cycle, production and logistics flexibility and innovation in supply chain practices. Sharing of benefits within the supply chains has not yet gained much attention. Firms show relatively high awareness of modern supply chain planning and control tools, including software and mathematical models. However, the utilization of such tools is still at a relatively low level. Relationships are messy and partnerships are short of true strategic alliances. Still, some benefits are being derived. Firms, especially in the automotive, retail, manufacturing and FMCG sectors, are increasingly opting to outsource their logistic requirements to specialized service providers. The positive business atmosphere and a burgeoning consumer market are making the shipper community push the logistic service providers hard for efficient supply chain value propositions. Many firms in our study have gone for spend management outsourcing instead of procurement management.
In firms with manufacturing as the core process, primary focus is still on in-house manufacturing though trend towards contract manufacturing is on the upswing. Quality assurance has become an order qualifier rather than being an order winner. The emergence of Service Level Agreements (SLAs) with internal customers can be seen in most of the firms. Presently, they are still informal in nature and not strictly binding. Firms have few manufacturing facilities with 20-24 warehouses and many dealers. This number of warehouses is a direct consequence of the tax-holidays and the erstwhile excise and custom duty structure in India. High collaboration and partnerships with vendors is strongly evident in this sector.
There is big focus on vendor development. Firms focus on developing vendors in geographical proximity. Another discernible trend is the gradual shifting of responsibilities and risks to vendors. In automobiles sector, there is collaboration and partnerships downstream with the dealers as well. Transportation and logistics being non-core activities are generally outsourced. As regards implementation and utilization of ICT, 6 out of 8 firms use standard ERP software, while one uses in-house developed legacy software. The firms appreciate the importance of inventory and order tracking for which they use Wide Area Network (WAN), Extranet and Internet. They seem to be catching up fast with their counterparts in the developed world. However, forecasting is still based on targets from dealers/ sales force. This is an area where they are much behind.
The focus of most of the service firms is on express deliveries and logistics solutions. They focus on efficient and effective service and better customer reach. Most of the firms have established highly responsive call centers with stringent performance metrics. High collaboration and partnerships with partners can be seen. The firms are generally going for global procurement and long-term strategic deals. They have multiple channels downstream so as to achieve door-step reach to the ever-increasing customer base in India. Transportation and logistics is generally through their own fleet. In some cases, it is outsourced. Routing and scheduling software are increasingly being used for these activities. 5 out of 6 firms use standard ERP software. There is high focus on tracking of customer orders and and technologies like bar codes and GPS are being employed. Production process is mainly “pull” system.
In FMCG and perishables sector, the primary focus is on product availability (refilling the shelves). The companies have few manufacturing facilities with complex distribution channels. Packaging is generally outsourced. Mostly, the goods are packaged near the markets. There is a very high collaboration with suppliers and firms are going for global procurement. E-procurement is on the rise. At the same time, firms are negotiating long-term strategic deals. There are multiple channels downstream so as to meet the objective of next-door reach. Transportation and logistics services are generally outsourced to third parties. Transportation is mainly by road and the lead-time of these supply chains is still as high as 9-12 weeks. This is quite understandable, given the size of India and the state of its infra-structural facilities. Here too, most of the firms use ERP and forecasting is based on data from dealers/ sales force.
In retail chains, primary focus is on expansion and reaching the consumer. The sector is witnessing tremendous growth with increasing acceptability by the growing Indian middle class. Two of the retail chains in our study are low cost mass market players, while the third one is mainly into branded apparel. Their facilities are expanding to meet the increasing demands. These firms have their own warehouses and retail outlets. The layouts of these facilities are still evolving. Most of them are smaller replica of retail chains in the developed countries or famous shopping cities like Singapore and Dubai. The firms have high collaboration and partnerships with their suppliers who are generally located in close proximity. Transportation and Logistics is outsourced. The implementation and utilization of ICT though limited, is growing rapidly. One firm uses ERP and another uses in-house developed Resource Enterprise Management (REM). These firms have not only gone for bar coding of items, but are pilot testing RFID and other smart card technologies as well. Forecasting is based on historical data which is tinkered by management intervention.
We find that most of the firms are not getting or using real-time demand data from customers. Reasons cited for the same range from long, complex supply chains, lack of data and ICT integration to lack of funds to go in for automation. However, they are making greater investments in ICT, field force automation and cheaper software. A majority of the Indian subsidiaries and joint venture firms use real-time data sharing and find it extremely effective. In contrast, none of the family-owned firms uses it.
Based on our observations and secondary data, the major challenges to logistics and SCM practices in India are related to integrating the supply chain, interfacing supply chain department within a firm with other functions, evolution of logistics solution providers, sharing real-time demand data across partners to ensure demand visibility in the supply chain, resistance to change within and outside the firms, aligning supply chain partners to common objectives, openness of partners to technology adoption and standardizing technology across them. Over time, some of these capabilities will become an entry requirement for those wishing to compete. However, first movers are likely to continue to benefit from their pioneering efforts, and continue pushing forward seeking further differentiation.

DISCUSSIONS

To succeed today and to pave the way for a better future, firms in India need to create strong linkages with their logistics and supply chain partners. More and more of them today are realizing the importance of developing and implementing a comprehensive logistics and supply chain strategy – and then linking this strategy to the overall business goals. Adopting these initiatives first and foremost requires taking a long-term view and having an extensive focus on all the channels in the total transformation process to create a productive and reliable supply chain. Technology, which was earlier taken to be a driver for doing business in a particular fashion, has become a “necessary enabler” for aligning business to consumer demand. It can change the way we capture and analyze information, differentiate products and services, configure and sell existing products, crash order cycle times, introduce new products and so on. ICT can thus achieve breakthroughs in the area of supply chain design, configuration and planning, which otherwise can never be thought about. There’s a concerted move to use ICT for data collection and forecasting.
Efforts to extend a common information system platform between partners will assist in the transferring of information. Ideally one system should span all functions throughout a supply chain. Firms in India are preparing themselves to harness power of ICT to improve supply chains. The size of the firm now matters less as the cost of these technologies has been reducing continuously so that even smaller firm can afford them. The goal should be to implement a system that can make a decision more quickly and with better accuracy. Many firms have gone for ERP. Ready access to transactional data does not automatically lead to improved decision making. These transactional data must be analyzed through effective models to support fact based decision-making. Analytical information technologies should be helpful in achieving this purpose through the descriptive and normative models for effective decision-making within and outside the firm. Since forecasting involves sharing competition-sensitive data beforehand, this practice hasn’t taken off. If one probes deeper, it appears that forecasting of customers themselves is uncertain, fluid and based on incomplete understanding of trends and patterns, which, in turn, passes on the complexity to the vendors. Companies in electronics, auto, auto ancillaries and IT sectors are using the collaborative forecast practice widely. It may be observed that the customer base in these industries is not as diverse or massive as in FMCG, which have a few million of shops and dealers to ask data from. This may be one of the reasons why consumer-oriented industries do not use collaborative forecasting to a greater degree. All the major FMCG companies have programs in place to link their distributors to the firm via Internet or Intranet based systems. For example, HLL uses RSNet, Marico MINet and Dabur has its Daburnet. As a result, forecasting accuracies are increasing. SCM partners are emerging in banking, IT, telecom and insurance as well.
With India becoming the factory of the world, establishment of hubs and spokes with quick international connections will only increase. Blue Dart and DHL have already set up seven hubs. The proliferation of global majors in major industry verticals has heralded the arrival of international supply chain service providers into the country. At the same time many of the Indian business majors have shown inclination to manage the group logistics in a unified manner to realize the benefits of consolidation efficiencies. These logistics arm are set up to service the captive requirements of the parent company and subsequently exploit the market demand. Few of them have ventured into setting up their own logistics companies. Realizing the potential in the outsourced logistics market and the threat arising out of the entry of global logistics firms, the Indian logistics service providers are expanding their basket of services, looking beyond storing and transportation of products and raw materials and focusing on related services such as customs clearing and forwarding, labeling and packaging, fleet management, light assembly, kitting, repairs & reverse logistics, inventory management etc. Transporters are upgrading themselves to logistics solution providers. Dynamic engagement is developing between stock and fulfillment in warehousing services. The complexion and nature of warehousing will change, but the requirement for break bulk and re-packaging will still remain. The value of activity will be also higher, thereby offering service providers’ a means to shore up margins.
The SCM managers need to know the form and purpose of mathematical models and software before they apply them. Lack of this understanding may result in inferior use of models and analysis, and implementation of sub-optimal supply chain plans. They must also learn to appreciate the differences between transactional and analytical information technologies if superior supply chain management is to be achieved. The development of web-based/internet applications is another tool to process information pertaining to supply chain such as processing procurement activities both operationally and strategically. Use of e-mail/faxes, worldwide web (www), EDI, Electronic Funds Transfer (EFT), internet auctions, etc., are the few examples that web-based/internet technologies can offer to perform SCM activities more efficiently. Operationally firms can cut the procurement process time and improve the auditing process. Increasing use of internet/ intranets is resulting in more fluid and frequent exchange of information between firms.
Successful logistics and supply chain management depends heavily on the state of the infrastructure scenario in the country. Undoubtedly, the state of infrastructure in India has been hampering the industrial and economic performance for long. Infrastructure is the most quoted factor hindering supply chain competitiveness. This needs urgent remedy: most other bottlenecks of regulations and capital are falling away and it's only roads, ports and airports that hold Indian logistics back. Higher fuel cost in India lead to high inland movement cost. Poor conditions and low load-bearing capacity of roads lead to more wear and tear of vehicles, and slower movement. Imposition of load restrictions, permits for inter-state movement, lengthy and cumbersome documentation, large number of public holidays make lead-times larger with higher variability. Transportation costs too go up. It requires a concerted effort by the industry and government to dismantle bottlenecks in the completion of infrastructure-related projects and creation of demand-aligned capacities in sectors of logistics and information technology. The government is planning to set up 13 inland ports at a cost of US$ 190 millions. The project is to be implemented through the public-private partnership model. To improve the productivity of wagons, railways are going to reduce terminal detention below the national average of 16 hours. At present, 25% rakes take more than 24 hours and 50% rakes take more than 16 hours in loading and unloading. Similarly, plans have been laid down to reduce the wagon turnaround time from 5.0 to 4.5 days through effective implementation of new terminal incentive cum-engine on load scheme. By increasing the manufacturing capacity of wagons, it is likely to load 2.2m tonne of freight on a daily basis and achieve the target of 800m tonne of freight during the year. In March 2006, the railway ministry has announced the start up of double stacked container trains running on ‘freight corridors’. This is a welcome step forward for Indian logistics. At least half-a dozen private companies have applied for various categories of licenses for rail containers.

CONCLUSIONS

We examine the state of logistics and supply chain management practices in India covering a wide spectrum of firms with at least one field visit and substantiate on-site observations and informal discussions and interviews with data and information from secondary sources. Thus, we assess the current level of logistics and supply chain practices as suggested by Sahay et al. (2006). Our findings indicate that logistics and SCM practices are influenced by contextual factors such as the type of industry, firm size, its position in the supply chain, supply chain length and the type of supply chain. They are also influenced by regulatory and economic environment, available infrastructure and competition with other supply chains. We identify the logistics and SCM practices of these firms and discern various emerging trends as well as areas of concern. We also suggest opportunities for improvements. Indian firms need to act fast to capitalize on these opportunities to be competitive with the world market. The findings from this study provide the type of information on logistics and supply chain management practices in India that may help the Indian industry to benchmark these practices vis-à-vis corresponding practices in other countries.
The management and structures of supply chains in India have transformed since the early 1990s when they were perceived as linear chains of companies and managements focused on improving the efficiency of material flows. Indian firms are quite aware of the best logistics and SCM practices, but many of them are yet to practice them actively. They are generally adopting these practices piecemeal and supply chain integration is yet to take place in most of the chains. Increasing customer requirements and improved ICT have affected SCM efforts.  Today the extended multi-tier structure of supply chains as well as the need for better forecasting, collaborative planning, effective logistics and information sharing is better understood. In future, ongoing outsourcing and specialization are expected to result in demand-supply networks, with shared technology and systems, extended decision rights and non-territorial services. The awareness of planning and control techniques and communication means is high and work on increasing and improving supply chain integration and collaboration is likely to be intensified in the near future.
Based on our exploratory study, some emerging trends can be discerned. There is a growing focus on customer and end-consumer in terms of higher product availability, customer reach, and responsiveness. Concepts like Customer Relationship Management (CRM) are being tried. Most of the firms have a good facilities network design under given constraints. A very conspicuous trend is towards higher degree of collaboration and partnerships both upstream and downstream the supply chain. The degree is different in different firms. However, the economy of scale/ scope for supply chain entities to experience win-win situations is still awaited. Transportation and logistics are getting due attention and as a result some good third party and fourth party logistics service providers have emerged. The long-stressed importance of focusing on core competences is taking shape due to increased outsourcing of non-core operations. There is a growing trend towards implementation of ICT. However, most firms have a long way to go to take full advantage of the promises of supply chain integration.
Logistics and supply chain practices in India show that visibility is still limited. The companies have a realistic view on the advantages and risks of information sharing and so information is shared only selectively. Our study reveals that most Indian firms have aligned their logistics and supply chain objectives with their business objectives. However, due to some aberrations and diseconomies of scale/ scope most of them are not able to reap full potential benefits. Action is required by the Indian government to improve the infrastructure for better functioning of various supply chains. Firms and their supply chains need to closely integrate themselves into a network, carefully manage the complexity that ensues, align their business strategy with logistics and supply chain operations, and leverage information and communication technology with process improvement and pioneer operational innovation for superior performance. They also need to rigorously measure and monitor critical operational performance metrics such as customer service, responsiveness, supply chain costs, asset utilization, product quality and operational flexibility in order to achieve overall business success. Our findings are in agreement with Kemppainen and Vepsalainen (2003) that the distinction between partners and standard suppliers or customers guides collaboration.
Our study reveals a few areas of concern. One of the major areas of concern with most of the firms is related to redesigning their facilities network after Value Added Tax (VAT) implementation in most of the states in 2005-06. VAT is a multistage tax, levied on value added at different stages of production and distribution of a commodity or the supply of a service. The earlier structure of state taxes and laws meant setting up multiple warehouses in a state cost-effective. After VAT, there could be just few warehouses serving a host of smaller, transit warehouses in over 4-5 surrounding states, boosting the creation of hubs and spokes, the most efficient model of logistics. This will require not only strategic redesign but also involve other considerations related to relocation of facilities and reallocation of capacities. With emergence of web-based tools, on-line transaction security has become an important area of concern. Packaging is another area of concern for most of these firms and their supply chains.
The level of collaboration and partnerships upstream the supply chain still requires significant efforts. Concepts like Vendor Managed Inventory (VMI), revenue sharing and long-term contracts are exceptions rather than norms. Same applies to level of collaboration and partnerships downstream where trust and genuine information sharing are conspicuous by their absence. There are numerous infra-structural bottlenecks for transportation and logistics and various stakeholders need to address it on an urgent basis. ICT implementation is costly and many times has not been utilized to its full potential. Given advances in other logistics and supply chain practices, it was really disheartening to note that for most firms, forecasting is still not based on PoS data. This is a prime area for collaborative efforts. Another point to note is that India is still a sellers’ market despite growing competition and this has introduced inertia in some supply chains. Growing incomes and consumer awareness will probably force such supply chains to shed this inertia. The low level of application of some of ICT and insufficient skills should be the main concerns for government, academic and professional institutions, as well as for senior and middle management. Establishing trustworthy relationships among whole supply chain partners is the most important factor to share accurate information and to establish effective and efficient logistics and SCM practices. If managed well, reduction of system wide costs can be achieved, let alone increased customer service level and satisfaction.
There are many avenues for improvements for logistics and supply chain management practices in India. We are in total agreement with Tan (2002) that a massive commitment by important stakeholders is required for evolving truly efficient and effective supply chains. There is ample scope for facilities network redesign. Infra-structural bottlenecks need to be overcome. The golden quadrilateral project and initiatives by railways and ports administration in the last few months are good indicators that the concerned authorities are waking up. The golden quadrilateral road project will address some of the connectivity issues, but the larger problem is not so much a six-lane road as good roads. Ventures like BOT (Build-Operate-Transfer) and tolled roads all exist - but the essence is that law enforcement about technical standards must be made stringent. ICT implementation and utilization is low and needs to be spruced up. Forecasting based on PoS data is likely to come into use once there is more collaboration and trust, economies of scale and scope for supply chain entities and enabling-ICT are in place.  Benchmarking and learning good practices should be encouraged by government, industry associations and other stakeholders. Government should move from a regulator’s role to a facilitator’s role. A high degree of operational efficiency and cost efficiency will provide the much needed competitive edge to various supply chains in India.

LIMITATIONS OF OUR WORK

We present only a snap-shot view of the logistics and SCM practices in India. The firms for on-site observations were selected as a convenience sample and so may not be truly cross-sectional. Ours is only an exploratory study where data regarding logistics infrastructure was gathered from secondary sources and on-site observation data too was substantiated from secondary sources. Further, as the concept of logistics and SCM is complex and involves a network of companies in the effort of producing and delivering a final product, its entire domain can not be covered in just one study.

FUTURE RESEARCH DIRECTIONS

This research opens the way for in-depth studies of some of the areas of concern identified for logistics and supply chain management practices. Research may be carried out using specific cases to study these practices at firm level in detail. It should cover multiple functional areas (logistics, marketing, IT, operations, etc.) of a single firm in much more systematic manner. Later on, the same may be extended to supply chains. It may be worthwhile to investigate how these practices differ across firm size. Business-to-business transactions in India have just started. Some detailed study may be carried out in this area. Further, the idea of establishing a ‘third party’ Supply Chain Manager Firm to reliably and truthfully share information as suggested by Feldmann and Muller (2003) may be explored. Finally, research should also focus on establishing actual performance improvements in logistics and supply chain management leading to cost-savings and customer satisfaction.

REFERENCES

Basnet, C., Corner, J., Wisner, J. and Tan, K-C. (2003). Benchmarking supply chain management practice in New Zealand. Supply Chain Management: An International Journal, 8, 57-64.
Chin, K-S, Rao Tumalla, V.M., Leung, J.P.F. and Tang, X. (2004). A study on supply chain management practices: The Hong Kong manufacturing perspective. International Journal of Physical Distribution & Logistics Management, 34, 505-524.
Deshmukh S.G. and Mohanty, R.P. (2004). Re-engineering of supply chain: Lessons from Select Case Studies.  In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd Edition, Macmillan, New Delhi, 509-526.
Feldmann., M. and Muller, S. (2003). An incentive scheme for true information providing in Supply Chains. Omega, 31, 63-73.
Fernie, J., (1995). International Comparisons of Supply Chain Management in Grocery Retailing. Service Industries Journal, 15, 134-147.
Galt, J.D.A., and Dale, B G., (1991). Supplier Development: A British Case Study. International Journal of Purchasing & Materials Management, 27, 16-22.
http://www.weforum.org/
Joshi, V. and Chopra, S.K. (2004). Best Practices in Supply Chain Management at Modi Xerox. In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd Edition, Macmillan, New Delhi, 549-562.
Kankal, R.A. and Pund, B.S. (2004). Reengineering of supply chain: The case of Crompton Greaves. In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd Edition, Macmillan, New Delhi, 527-537.
Kemppainen, K. and Vepsalainen, A.P.J. (2003). Trends in industrial supply chains and networks. International Journal of Physical Distribution & Logistics Management, 33, 701-719.
Moberg, C.R., Cutler, B.D., Gross, A. and Speh, T.W. (2002). Identifying antecedents of information exchange within supply chains. International Journal of Physical Distribution & Logistics Management, 32, 755-770.
Quayle, M. (2003). A study of supply chain management practice in UK industrial SMEs. Supply Chain Management: An International Journal, 8, 79-86.
Sahay, B.S. and Mohan, R. (2003). Supply chain management practices in Indian industry. International Journal of Physical Distribution & Logistics Management, 33, 582-606.
Sahay, B.S., Gupta, J.N.D. and Mohan, R. (2006). Managing supply chains for competitiveness: the Indian scenario. Supply Chain Management: An International Journal, 11, 15-24.
Saxena K.B.C. and Sahay, B.S. (2000). Managing IT for world-class manufacturing: the Indian scenario. International Journal of Information Management, 20, 29-57.
Tan, K.C. (2002). Supply Chain Management: Practices, Concerns, and Performance Issues. The Journal of Supply Chain Management, 35, 51-62.
Tan, K.C. and Wisner, J. (2000). Supply Chain Management Practices in the United States and Europe. Research Paper Series of the APICS Educational and Research Foundation and The Supply-Chain Council, Stock No. 07029, pp. 43.

Vrat, P. (2004). Supply chain management in India: Issues and challenges. In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd Edition, Macmillan, New Delhi, 13-26.
MBA guide