AC Cabins, Ergonomics in Indian trucks- Makes business sense! January 30, 2008Posted by Ramnath Rangaswamy in Blogroll, Business, Emerging Markets, India, Indian Economy, Logistics, Railways, Supply Chain.
On Indian trucks, providing air-conditioners was unheard of until Volvo entered India. All Volvo trucks come with a factory fitted AC for the drivers. Since then Asia Motor Works, Ashok Leyland and Tata’s too have begun offering Driver-Cabin ACs as an option in their trucks.
The reason for providing AC in the driver’s cabin is not altruistic. It has sound business and economic reasons.
A truck in India does anything between 300kms and 400kms a day. Compare this to 600kms-1000kms abroad.The reason for this low mileage were many – poor road conditions, overloading, long waits at multiple checkpoints and driver fatigue.
As road conditions have improved one bottleneck has been removed. Also governments have begun improving the efficiency of checkpoints- Gujarat abolishing Octroi and, Kerala improving their checkpoints are two examples.
Laws are being made, in some states to punish overloading even more severely. As bottlenecks are removed, driver fatigue would become the proverbial weak link in the chain.
Air conditioned cabs and ergonomically designed cabs become important to reduce driver fatigue . As driver tiredness and stress is reduced, the necessity for stops is reduced enabling longer distances to be covered.More importantly, it improves safety. Thus with AC cabins, trucks can cover ~600kms per
day. And they are safer.
Capital assets like locomotives, wagons, aircrafts and ships have to keep moving and earning. Airlines constantly endeavour to turnaround aircrafts at gates in as short a time as possible.
Southwest airlines turns around aircrafts in 20 minutes versus 45-60 minutes of other airlines .Airlines use aircraft flying hours per day to measure how effectively they use their aircrafts.
The Railways are measured on NTKM/day[ Nett Tonne kilometres per day] and GTKM/day[ Gross Tonne kilometres per day] which measures the revenue the assets of the Railways has earned per day.
Similarly the railways measures wagon productivity as wagon turnaround time. These measures are influenced by the hours the asset,locomotives and wagons are on the move.
Similarly for ships; they are measured by the revenue they earn everyday; Revenue per vessel per day or Revenue per DWT per day. That is why shipping lines charge a congestion
charges whenever the waiting time in Ports increases. This is to compensate for the loss in revenue.
So AC cabins and ergonomic design of the driving console not only keep the drivers happy, stress-free and fatigue-free and reduces attrition but also makes great business sense!
Aavin Milk and Product Launches January 6, 2008Posted by Ramnath Rangaswamy in Blogroll, Business, Consumer Goods, Emerging Markets, India, Indian Economy, Logistics, Retailing, Supply Chain.
2008 started very well for me. The milk packet or 1/2 litre sachet, in which milk is delivered to our home, had a special ‘Happy New Year’ graphics. I was amazed at TCMPF [ Tamilnadu Cooperative Milk Producers Federation] , the cooperative which supplies the Aavin brand of milk. Aavin celebrates festivals by supplying milk in packets with festive graphics on the day of the festival. On Id, the packet sported a “green with the crescent and star “graphic, on Diwali it had lamps and crackers and on New Year’s Day it had balloons and candles.
Many companies would be envious of Aavin.
Ensuring, that a batch of products with a particular graphic reaches consumers on a particular day, is a stupendous effort across multiple functions in the company. It requires a well oiled and efficient supply chain.
Aavin’s releasing a special graphic pack on a particular date [to sync with the launch of the advertisement in the media] is equivalent to launching a new product or line extension in the market or a special promotion [” buy 1 get 1 free” or “25% more at the same price” ] or a limited edition product. And Aavin does it time after time, many times a year!!
Companies struggle to launch a product or special pack, on a particular date. Based on our experience, product launch processes are weak or non-existent in most companies. Delays to product launches are common.
Product Launch Process
Product launches have to managed like a Project.
Multi-functional effort:It requires a multi-functional team – Marketing, Sales, Finance, R&D, Production and Logistics to be aligned on a product launch, work together and bring it to market.
Project Management- cps: The activities, required to get the product to market must be monitored by a cps and project manager.
Milestone reviews: There should specified and regular milestones that have to be passed.
Top management reviews: Management should be briefed about the status of the initiative or launch when the milestones are reached. Delay should be informed to top management.
S&OP Meetings: Launches and initiatives should be discussed at S&OP [Sales and Operations Planning] meetings.
Product Launches and the Supply Chain
Vendor and Suppliers: From a supply chain standpoint, a product launch starts with sharing the new product design and specification with suppliers and vendors.Once the prototype is approved, they supplier or vendor will get ready for producing the parts and components for the new product.
Inventory levels: The company in the meanwhile will have to liquidate inventory of the old product. A company with lower inventory will be able to bring products to the market much faster than a company with high inventory levels. I have experienced launches being pushed back because of high inventory of the old product.
Production: Once production is qualified, after the trial production batch, the plant is readied for regular production of the new product.
Distribution: The product has to be distributed well in advance of the launch so that on the day of the launch the product is available at all dealers and depots. It should not happen that a consumer who has seen the advertisement, asks for the product but is unable to buy it because of non-availability. The product may have lost it’s only chance of trial.
Customer Listing: Before the launch, the product has to be listed with the Modern retail chains [ assuming the product is a consumer product]. The Modern retail channels will include the product in their database, incorporate it in their planogram and ordering system.
TCMPF obviously has this process all streamlined and well-oiled. It helps that the inventory for milk which has a shelf life of 48 hours, is low. So the product reaches homes on the day it has been planned. It gets consumed within 2 days. So you do not find a Happy New Year packet in February!! They have an outstanding distribution system [ similar to newspapers distribution] and hence the producs reach all the outlets and homes as planned.
For effective and efficient product launches it is important to have robust and disciplined processes. To quote Sun Tzu [“Art of War”] in a similar context;
“Maneuvering with an army is advantageous;
with an undisciplined multitude, most dangerous.”
Here’s wishing all of you a great 2008! May all your supply chains run in a streamlined, disciplined, effective and efficient manner!!!