KCT Group steps into container manufacturing with Indicon Logistics

With the scheduled launch on April 4 of what is touted to be India's largest container manufacturing unit, Karam Chand Thapar & Bros (Coal Sales) [KCT] is all set its feet firmly on the container logistics sector. Spearheading the move is the company's wholly-owned subsidiary, Indicon Logistics (Indicon), which has set up the state-of-the-art box manufacturing facility in Ranchi, Jharkhand at an estimated cost of Rs 400 million. Initially it has a capacity of manufacturing 750 TEUs per month. 
The facility is said to be a first of its kind, and in terms of installed capacity it is India's largest container manufacturing unit with a built-in flexibility to produce all types of containers, including standard ISO boxes and containers for specialized applications like bunk houses, tank containers, refrigerated containers as well as custom-built containers. 
Aiming to become the technology leader in the container manufacture segment, the company plans to set up several such facilities across in India to take advantage of the growing demand in the logistics sector, which is currently pegged at $100 billion, and is estimated to grow at 20% CAGR over the next three years. The company has already bagged orders worth of Rs 20 crore from segments as diverse as oil & gas and mining. 

Detailing the plans of the company, Indicon Logistics director Varun Thapar said:

"In the first phase of operations, which entails container manufacture and container leasing, we are looking to invest about $20 million. We have already commissioned our first greenfield facility that is the single largest container manufacturing factory in India today. Over the next phase of expansion, we are looking to invest approximately $100 million as we move from manufacturing and diversify into the development of logistics infrastructure like integrated logistics hubs, Container Freight Stations (CFS), Inland Container Depots (ICD) and cold chain and warehousing solutions." 
The company is also engaged in container rental services across India under its 'Kargatact' brand. The extensive and latest model hire fleet consists of safe and well maintained containers available for short, medium and long term lease. 
Responding to the ever growing demand of the cold chain logistics sector, the company has invested heavily in bringing sandwich panel technology to India with the import of the largest and most cuttingedge sandwich panel equipment in the India, capable of producing insulated panels made of GRP, stainless steel, aluminium etc.

Ways to promote clean transportation

In a quaint conversation between Alice, of the Alice in Wonderland fame and Humpty-Dumpty, the latter keeps reiterating a promise made to him by no other than the King, to put him together again, if he fell off the wall. But, we know the gory end result. 

There are many such promises made in the Finance Bill, 2011, which perhaps are made with the right intent, but at this juncture one is skeptical of the results. 
For instance, in his Budget speech, our finance minister (FM) had remarked: "The Indian automobile market is the second fastest growing in the world and has shown nearly 30% growth this year. World over, substantial investments are being made in the field of hybrid and electric mobility. To provide green and clean transportation for the masses, National Mission for Hybrid and Electric Vehicles will be launched in collaboration with all stakeholders." Alice would probably ask quite a few questions, such as: How? When? 
Hybrid and electric mobility requires a lot more to be done in India, rather than just R&D in this sector - such as proper roads, but that is another story. In India, hybrid or electric cars will have limited usage, by a limited number of people, on some limited routes. Yet, this announcement will perhaps (if one is as optimistic as Humpty Dumpty) be a beginning. 
Some countries are not only pumping money into R&D efforts to promote the green auto sector but are also providing tax credits to the end-user. In the US, tax credit was available to hybrid diesel-electric cars, under the Energy Policy Act, 2005, which ended in December last year. These had granted up to $3,400 as a tax credit for the most efficient hybrid cars and $4,000 for a compressed natural gas vehicle.
However, there was a catch. This policy called for a phase-out of the tax credit when any specific automaker sold more than 60,000 hybrid or clean-tech vehicles.
Now the focus in the US is on electric vehicles. Indeed, federal and state legislations offer many 'greenies' to the end-user. The tax credit can be as much as $7,500 plus a $2,000 credit for charging equipment installation. In 2009, Japan, in its tax reform bill, waived an automobile weight tax for people buying hybrid cars and electric vehicles. News reports suggest that normally, people purchasing new cars pay the automobile acquisition tax, which is equivalent to roughly 5% of the car's price, and three year's worth of the weight tax. This means a person buying a ?2million car that weighs 1.3 tonnes has to pay approximately ?1,6,700 in taxes. If the car is a hybrid or an electric vehicle, the taxes will be waived completely. Other types of environmentally-friendly cars also receive 50-75% tax reductions depending on their fuel economies and exhaust emissions. 
In addition, Japan also imposed a higher levy on gasoline. By adopting a carrot-and-stick approach, many hybrid or electric car models, such as Toyota's Prius, became a runaway success in Japan. 
As Zenobia Aunty's tiny car (not an expensive hybrid, but not a petrol-guzzling vehicle either) shudders as it passes a huge pothole, she grimaces. But, she is kind enough to let us know that a few concrete announcements have also been made. Full exemption from basic customs duty and a concessional rate of central excise duty has been extended to batteries imported by manufacturers of electrical vehicles. The government has announced excise duty of 10% on vehicles based on fuel cell technology. Exemptions have also been granted from basic custom duty and special CVD, to critical parts/assemblies needed for hybrid vehicles. The government has also proposed a reduction in excise duty on kits used for the conversion of fossil fuel vehicles into hybrid vehicles. 
Indirect tax experts point to a slight snag in the above and say certain clarifications are required. In India, car manufacturers tend to import completely knocked down (CKD) kits and carry out assembling in India. As per a recent notification, a CKD unit means a unit having all necessary components, parts or sub-assemblies for assembling a complete vehicle but does not include a kit containing a pre-assembled engine, gear box or transmission mechanism; nor one that includes a chassis or a body assembly for a vehicle. The fear is that these kits may continue to be subject to higher basic custom duties, despite the intent to promote import of assemblies needed for hybrid vehicles. 
The Mumbai heat, the pollution and the long drive is getting to Zenobia Aunty. So you are sure, she will keep a watch out on how the National Mission for Hybrid and Electric Vehicles will pan out.

My Groups | NDTV Social

My Groups | NDTV Social

Japan’s supply chain still under pressure

In an era of globe-spanning operations, multiple events over the past year once again underscore the critical need to develop comprehensive business continuity plans in light of supply chain vulnerabilities.

While government and relief agencies are dealing with the ongoing health and safety consequences of Japan’s earthquake and subsequent tsunami, supply chain professionals are coping with the tremendous impact this has made on global shipping and sourcing.

“Right now the only thing that appears safe to say is the ports in the northern part of the country are most affected by the quake and the tsunami,” said spokesmen for BIMCO, an independent international shipping association based in Bagsvaard, Denmark.

“All ports in that area are assumed to be out of order as operations have stopped and port facilities may have been washed away,” spokesmen added.
The long term implications, said BIMCO analysts, is that container shipping may be impacted by lack of exports from the Japanese factories, causing liner companies to leap-frog Japanese ports on their trans-Pacific trading lanes.

“Dry bulk shipping may be impacted in many ways as Japan is a major importer of thermal coal for power generation, iron ore and coking coal for steel production and grains for food and feedstock,” said BIMCO. 
And as noted in the mainstream press, several nuclear power plants may be shut down for days or weeks and coal stocks at coal-fired power plants have experienced coal stocks getting flooded away.

Meanwhile, tanker shipping may be impacted as refineries are on fire, which could affect product tanker demand. Moreover, the nuclear power plant shutdown may also affect overall oil imports for power generation.
Both imports and exports may be affected by force majeure, added analysts, but the full impact this will have on the global insurance industry is a matter of conjecture.

Air cargo operations were interrupted immediately following the quake, with Lufthansa Cargo among the first to suspend service.

At last report, however, the airline spokesmen said “light operations are “stabilizing and returning to normal.”

In an era of globe-spanning operations, multiple events over the past year once again underscore the critical need to develop comprehensive business continuity plans in light of supply chain vulnerabilities. 

That’s the conclusion shared with SCMR by Insight, Inc., a provider of supply chain planning applications in a recent interview.

“Heightened risks and outright disruptions are coming at us at a furious pace and it is absolutely critical that firms be prepared with detailed contingency plans,” said Dr. Jeff Karrenbauer, president of INSIGHT, Inc.

The LP formulation of the TP problem is:

Let,

X_ij = Quantity of Product (transport from source i to destination j)

C_ij = Per unit transporting cost from sources i to destination j

S_i be the row i total supply (where i= 1, 2, 3,....)

D_j be the column j total demand (where j= 1, 2, 3.....)

For this type of problem all units are available

m Warehouse and n Stores

No. of Variables is (mXn)

No. of Constraints is (m+m) (Constraints are for warehouses capacity and stores demand)

To solve the transportation problem by its special purpose algorithm, it is required that the sum of the supplies at the warehouses equal the sum of the demands at the stores. 

 ∑S_{i(i=1,2,3....)} = ∑D_{j(j=1,2,3...)} = units

LP Formulation

The linear programming formulation in terms of the amounts shipped from the origins to the destinations, X_ij, can be written as:

Objective function:

Minimize Z = X₁₁ +X₂₁ +X₃₁ + X₂₁ + X₂₂ + X₂₃ + X₃₁ +X₃₂ +7X_{33....................}   

Subject to the constraints:

X₁₁+X₂₁+X₃₁ > .....

X₁₂+X₂₂+X₃₂ > .....

X₁₃+X₂₃+X₃₃ > ....

X₁₁+X₁₂+X₁₃ < ....

X₂₁+X₂₂+X₂₃ < ......

X₃₁+X₃₂+X₃₃ < .....

With non negativity condition: X₁₁,X₁₂,X₁₃,X₂₁,X₂₂,X₂₃,X₃₁,X₃₂,X_33....... > 0

APPROCH AND METHODOLOGY

The transportation problem is solved in two phases: 

Phase I — obtaining an initial feasible solution

Phase II — moving toward optimality

In Phase I, the Minimum-Cost Procedure can be used to establish an initial basic feasible solution without doing numerous iterations of the Simplex Method.

There are three different ways:

·         Northwest corner method

·         The Minimum cell cost method

·         Vogel’s approximation method (VAM)

SENSITIVITY ANALYSIS

Sensitivity Analysis investigates the change in the optimum solution resulting from making changes in parameters of the linear programming of transportation problem, So the changes in coefficients of (C_ij) Cost Factors.

Humans and the Carbon Cycle - Wry Heat

Humans and the Carbon Cycle - Wry Heat

Taking steps to finance infrastructure - Article from Supply Chain Management Review

Taking steps to finance infrastructure - Article from Supply Chain Management Review