CASE GLOBAL LOGISTICS MANAGEMENTcampus360.iift.ac.in/Secured/Resource/108/II/ECO 11/2448125.pdfITL,...

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1 ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS GLOBAL LOGISTICS MANAGEMENT: THE CASE OF ABC CEMENT ABC CEMENT is a French multinational and global leader in Cement in building material with a strong presence in the eastern part of India As a part of our brown field expansion at Jamshedpur, we had ordered the Vertical Cement grinding mill with Loesche, Germany. Rotary components such as drive gearbox, grinding rollers & table were manufactured at Hamburg, Germany. (Volume – 625 cum & Net weight – 417 tons) Static components such as Mill stand, base plate were made at Shanghai, China (Volume – 433 cum & Net weight – 150 tons) Some components such as separator fixed plate etc., were outsourced by Loesche in Chennai, India. The task at hand was to transport the material safely from Loesche’s works at Shanghai and Hamburg to Jamshedpur, India. The miscellaneous consignment from Chennai was much simpler and therefore handled by us through a local transporter. When we analyzed the modality of shipping the consignment to India, we realized that we did not have much expertise / knowhow on the following Import formalities and documentation Indepth knowledge of the countries involved. Knowledge of the carriers and routes Risks involved Consignment tracking and monitoring Q. < WHAT COULD ABC CEMENT INDIA DO? >

Transcript of CASE GLOBAL LOGISTICS MANAGEMENTcampus360.iift.ac.in/Secured/Resource/108/II/ECO 11/2448125.pdfITL,...

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

GLOBAL LOGISTICS MANAGEMENT: THE CASE OF ABC CEMENT 

 

ABC CEMENT is a French multinational and global leader in Cement in building material with a strong 

presence in the eastern part of India 

As a part of our brown field expansion at Jamshedpur, we had ordered the Vertical Cement grinding mill 

with Loesche, Germany. 

– Rotary components such as drive gearbox, grinding rollers & table were manufactured at Hamburg, 

Germany. (Volume – 625 cum & Net weight – 417 tons) 

– Static components such as Mill stand, base plate were made at Shanghai, China (Volume – 433 cum 

& Net weight – 150 tons) 

– Some components such as separator fixed plate etc., were outsourced by Loesche in Chennai, India. 

The task at hand was to transport the material safely from Loesche’s works at Shanghai and Hamburg to 

Jamshedpur, India. 

The miscellaneous consignment from Chennai was much simpler and therefore handled by us through a 

local transporter. 

When we analyzed the modality of shipping the consignment to India, we realized that we did not have 

much expertise / know‐how on the following 

– Import formalities and documentation 

– In‐depth knowledge of the countries involved. 

– Knowledge of the carriers and routes 

– Risks involved 

– Consignment tracking and monitoring 

 

 

Q. < WHAT COULD ABC CEMENT INDIA DO? > 

 

 

 

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

 

Therefore, we decided to engage a “Third party logistic service provider” who meets the following 

requirements 

– Presence in Germany, China & India 

– Knowledge / Expertise on import formalities, routes, carriers, territories, infrastructure limitation, 

appropriate material handling techniques and machinery 

– Credible past record & experience in handling similar consignment 

– Resources and infrastructure to handle a job of this nature. 

– Has the IT capability to track the consignment on a continuous basis using GPS technology. 

After evaluating various options, we finalized on M/s. Kuehne + Nagel, who are based out of Germany and 

having global presence in Americas, Europe, Asia pacific, Middle east and Africa. 

 

Q. HOW WOULD ABC CEMENT INDIA PVT LTD. EVALUATE THE PERFORMANCE OF M/s. 

Kuehne + Nagel? 

 

 

 

 

 

 

 

 

 

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

 

Following were the key challenges faced in the task. Performance of the Third party logistic provider was 

evaluated based on the same. 

Safety of consignment – (Accidents / damages etc.,) 

Security of consignment – (pilferages, loss of document etc.,) 

Timely shipment to Jamshedpur site. 

Cross – border legal issues 

Re‐packing / correction if reqd  

Continuous monitoring / tracking 

Coordination and net‐working with multiple agencies‐ Equipment manufacturer and their transporter, third  

party quality inspectors, Customs, Carriers, In‐land transporters. 

In‐land transportation – Easiest and safest route, infrastructure limitations (Bridges / rail line crossing / 

narrow roads, Congested and thickly populated areas en‐route 

Manage environmental issues & liaison with customs, railways, villagers, highway authorities, local 

administration en‐route, police etc.,  

Allocation of responsibility at various stages 

Execution of the activity at minimum cost 

 

Q.  WHAT IS ROUTING PLAN OF ABC CEMENT INDIA PVT LTD.? 

 

 

 

 

 

 

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

 

 

 

 

 

 

Q. WHAT SEA ROUTE THE CARGO WOULD FOLLOW? 

 

 

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

GLOBAL SEA ROUTES 

(ROUTE DESCRIPTION AT ANNEXURE) 

 

 

 

 

 

 

 

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

SEA ROUTE FROM HAMBURG TO MUMBAI PORT 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEA ROUTE FROM SHANGHAI TO MUMBAI PORT 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

Q.  IS THIS THE BEST ROUTING? WHAT ARE FACTORS FOR CHOOSING A PORT? 

INLAND TRANSPORTATION ROUTE FROM MUMBAI TO JAMSHEDPUR 

 

Figure: In‐land transportation route 

(Mumbai Port – Thane –  Nasik  – Dhule – Bandara – RajnandGaon – Bhilai – Raipur – Raigardh – Gumla – 

Ranchi – Jamshedpur ‐  Jojobera Cement Plant) 

Q. CAN THERE BE ALTERNATE MODE OF TRANSPORT 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

KUEHNE + NAGEL Projects 2010

Process Steps

Prealert

Arrival of shipment at destination.

M Filing and B/E processing

Break Bulk Import cargo operation and documentation flow (India)

Customs ProcessLogistics Service Provider

Sea Freight project & Import Department Importer

Shipment arrives at destination and consignee is sent arrival notice.Delivery Order is picked up from carrier after paying all charges and surrendering of the Carrier B/L

Prealert received from Origin office.Notice of shipment sent to Consignee.

Consignee surrenders the duly endorsed House B/l.

Copies of Master B/L ,House B/L.Invoiceand Packing List sent to carrier for filingof IGM .Carrier files the IGM with customsprior arrival of shipment at port

Based on the documents submitted by thecarrier's the customs approves the IGM

The consignee forwards the invoice and pacto K+ N for filing of Bill of Entry with customshipment is under some special licence it ihanded over to K+N.

K+N files prior Bill Of entry and arranges to send check list to cnee for confirmation about duty amount.After confirmation from cnee KN arrnange for assessment of Bill Of Entry with customs.

Customs checks the Bill of Entry advises discrpancy ,if any.

 

ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

Delivery of cargo Once duty is paid the Bill of Entry is endorsed by customs and cargo is released..

K+N picks the Demand Draft for the duty from the consignee and pays same to customs.

Consignee arranges for customs duty payable by Demand Draft once K+N confirms the duty figure.

Physical examination of cargo by Customs.Duty figure is confirmed after completion of

i ti

K+N takes permission from customs to open pkgs for physical examination of the cargo in port.

K+N pays the port dues if any and gets the gate pass from port Authorities.K+N arranges trucking for delivery cargo to consignee premises.

K+N raises invoice on the consignee for the services as per agreement and sends same to consginee for payment.

Cargo received by consignee's at their premises

Consignee's arrange for payment of charges as per K+N invoice.

Upon receipt of all charges from the consignee's K+N arranges to send the Original Bill Of Entry to the consignee's as this is required by them for disbursement of foreign exchange

Upon receipt of Original Bill of Enfrom K+N the consignee's proceecomplete their disbursement of foreign exchange.

 

 

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ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

CHOICE OF CARRIER 

 

 

Figure: In‐land transport carrier and unloading plan 

 

 

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ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

CONSIGNMENT TRACKING 

 

 

 

Figure: Web based dashboard for vessel tracking 

Web based dashboard for cargo tracking ‐ Inland 

 

 

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ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q. What else could be the MIS STRUCTURE for ABC CEMENT PVT. LTD. 

 

 

 

 

 

 

 

State Place

1 19.09.09 7 3084 RJ01GA-4604 16 Wheelers - Low bed volvo Maharashtra BHUSAWAL 2050 kms (Appx) 600 Kms

2 19.09.09 44,3,25 3085 CG04JA - 6916 Semi Low bed Maharashtra Raipur 2050 kms (Appx) 1150 Kms

3 19.09.09 8,9 3086 MH-06 AQ-2397 Low bed Maharashtra MP- MH Border 2050 kms (Appx) 1050Kms

4 19.09.09 1 3087 MH 43U-566 Hydrolic Exel Maharashtra Aurangabad 2050 kms (Appx) 450 Kms5 19.09.09 13,35,39 3088 NL-01D-2629 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400Kms

6 19.09.09 26,11,40,5 3089 NL-01D-1039 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400 Kms

7 19.09.09 27,28,12,17 3090 NL-01D-2669 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400 Kms

8 19.09.09 10,29 3091 RJ-06G-5247 Low bed Maharashtra AKOLA 2050 kms (Appx) 700Kms

9 19.09.09 2,6,20,33 3092 MH-06AQ-320 Semi Low bed Maharashtra Raigarh 2050 kms (Appx) 1300 Kms

10 19.09.09 30,23,22,19,4 3093 PB-06G-6664 Semi Low bed - 3 Exel Maharashtra Raipur 2050 kms (Appx) 1150 Kms11 19.09.09 31,24,21,18,34 3094 CG-04JB -2074 Semi Low bed - 3 Exel Maharashtra Raipur 2050 kms (Appx) 1150 Kms

12 19.09.09 42,32,14,16,36 3095 MH-06K-3520 Semi Low bed Maharashtra Bhandara 2050 kms (Appx) 950 Kms13 19.09.09 15,35,38,41,43,45SP1 3096 CG/04/JA/4621 Semi Low bed Maharashtra Amravati 2050 kms (Appx) 700 Kms

Package No.Actual date

of arrival (At Port)

Vehicle numbers Type of Vehicle

2nd Lot - Antwerp port to Mumbai port - Total 45 Packages

LR NO.

Sample -ABC- CEMENT India Pvt.Ltd - Cargo Tracker Sheet

Total Distance from Mumbai port to Site (Kms)

Distance covered from Port (Kms)

Vehicle PositionSr.No.

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ITL, Dr. D Sinha, IIFT, KOLKATA CAMPUS                                            CASE STUDY: ONLY FOR CLASS ROOM DISCUSSIONS 

 

 

 

ANNEXURE 

Circum Equatorial Route. With the expansion of the Panama Canal expected to come online in 2014, a relative parity will exist for the first time between the Panama and Suez canals. In such a setting, maritime shipping companies may elect to establish circum equatorial routes in both directions with the usage of high capacity (8,000 to 12,000 TEU) containerships. This high frequency "conveyor belt" could support a significant share of global east-west freight movements in a cost effective way. This does not imply a homogeneous service as several different configurations of ports of call are possible along this route, particularly if a 300 nautical miles deviation is considered. This enables different circum equatorial network configurations.

North-South Pendulum Connectors. These connectors reflect existing commercial relations, namely for raw materials (oil, minerals, agricultural goods), such as South America / North America, Africa / Europe or Australia / Asia. For container shipping, they are mostly based on the rationale that there is not enough volume to support transoceanic services, so cargo is collected / delivered along a latitudinal sequence of ports. This conventional network will be expanded with transshipment Opportunities with the circum equatorial route.

Transoceanic Pendulum Connectors. Connect through pendulum services selected ports of the facades of large oceanic masses. The three main transoceanic connectors are transpacific, Asia-Europe (through the Indian Ocean) and transatlantic. The industrialization of Asia (China in particular) has made the Asia - Europe and the transpacific connectors particularly important. Growth within the “BRIC” countries (Brazil, India and China) favors the emergence of a new connector in the Southern Hemisphere between the east coast of South America, the Cape of Good Hope and to Southeast Asia.

Transshipment Markets. They connect regional port systems to transoceanic and circum equatorial routes, mainly through hub-and-spoke services. The relay function between long distance shipping services performed by those markets is also significant. The most important are Southeast Asia, the Mediterranean and the Caribbean. They are referred as markets because the transshipment function can be substituted to another port. Therefore, a group of ports in a transshipment market are "bidding" for port calls as this type of traffic is difficult to anchor. The development of circum equatorial routes is thus likely to expand the opportunities of transshipment, including interlining between these routes.