Govt plans to reduce time for cargo clearance at airports August 11, 2007Posted by Ramnath Rangaswamy in Business, Emerging Markets, Indian Economy, Logistics, Supply Chain.
I was shocked and appalled to read that it took nearly 6 days for customs clearance at Indian airports! And was amused to read that it took a inter-ministerial group [IMG] to decide that 6 days too long and had to reduced to 2 days!!
Air-freight is extremely expensive. Companies resort to air-freight only when it is really necessary, it is an emergency and when no other option is available. To keep a consignment for 6 days in a warehouse, while it has taken just hours to travel halfway round the world, is sacrilege, or in supply chain terms, a ‘waste’.
Anyway, better late than never! The IMG has decided to re-engineer the process to reduce the time to 2 days.
Process re engineering
To re-engineer and reduce the lead time to 2 days, the current process must be mapped. A good way to map the process is to draw a lead time map.Using a lead time map, it is easy to identify opportunities and waste.
In this case the lead time can be reduced by;
- Complete many of the activities even before the consignment lands in India. The airway bill, invoice, declaration forms etc. can be processed and cleared early. In fact, only the activities that require physical presence of the imported cargo should be done after the cargo lands. All other activity should be done before.This concept is applied in the Single Minute Exchange of Dies [SMED] in plants.
- The time taken for each of the activities should be ascertained. The time taken at each of the ‘activity stations’ should be equal. Adequate resources should be deployed at that ‘activity station’. This is similar to line balancing in an assembly line. This will also potential identify bottlenecks ‘activities’.
Use IT to so that the documents are submitted via the Internet or EDI. To ensure authenticity, companies can digitally sign the documents. Thus documents are transferred from station to station virtually. The physical documents are required only once to verify that the details in the soft copy match the hard copy.
Using IT customers, can log onto the web and get a status update on their application.
“Different strokes for different folks”
Customers should be graded based on their history. Customers having a reputation for honest declarations, accurate submission of documents and prompt response to any query from the Customs should be accorded a ‘gold status’. Their consignments could get checked at a lower frequency. The customer would have to continue with similar behaviour to retain the ‘gold status’.
Involve the people
To develop and implement the process, the IMG should include people at all levels. It should take a ‘diagonal slice’- different levels from different functions including customers- to make the team. The team should not be more tan 12-15 members, else the team becomes unwieldy.
Suggestions should be invited from the people who do the work and from customers.
Emergency backup processes
Systems can go down. There should be an alternate process when systems go down or in any other emergency.
Also, there would be periods when imports peak [ during Diwali, New Years]. The process should plan for this peak. One solution is to get more resources, similar to what the IT department does around the last date for filing IT returns when additional counters are open for longer hours.
What gets measured gets done
Once the process is implemented,the lead time has to be tracked and the measured. It is natural that there will be starting issues as the process is implemented. These can be tackled and resolved.
Based on the Custom’s track record for implementing change, I am confident that clearance time at the airports will come down to 2 days. It is then a small step to implement the process at the Ports too.!
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Govt plans to reduce time for cargo clearance at airports