Transforming Warehouses by revolutionary technologies.

Technology is transforming every aspect of the warehouse—from tracking inventory to product picking—to get goods in and out as quickly and cost-effectively as possible. As operators face rising costs and a shrinking inventory of prime land, the continued demand for space and labor is spurring innovation that now defines how warehouses are being built.

1) Wireless technology and real-time inventory tracking: Warehouse operators are adopting new technologies to build efficiency into every aspect of the warehouse. Radio frequency identification (RFID) tags attached to each inventory item can transmit real-time data to and from the warehouse floor and inventory management applications, allowing warehouse teams to use mobile devices to track inventory from the moment it arrives.  

2) A hyper-connected facility: In a hyper-connected warehouse, operating systems are laid out in a highly advanced matrix to accommodate the growing mix of technologies. Today's warehouses hold bandwidth for technologies like barcoding, IoT, RFID scanning, GPS, load optimization and future technology innovations that may emerge. With this tech in place, logistics managers can quickly make and execute decisions. 

3) The new forklift: Forklifts, always a familiar sight in warehouses, are more connected than ever. IoT technologies can connect a warehouse operator's forklifts with their enterprise resource planning system and workers across the warehouse, shaving operations time. Some forklift manufacturers are incorporating alternative fuel systems and energy-efficient engines to reduce energy costs.     

4) Growing clear heights: To optimize warehouse utilization, yesterday's 24- to 26-foot ceiling height has risen to the 36- to 40-foot range today. One reason is that automated picking technology can easily reach even the highest shelves. Another is that today's lighting systems can efficiently illuminate tall spaces. Yet a third factor is the availability of fire-suppression technologies that can reach higher ceilings. 

5) Picking tech, picking up speed: From multilingual voice-picking and augmented reality to specialized robots, revolutionary technologies are changing picking practices. These technologies enable logistics operators to expand their labor pools by overcoming language barriers and accommodating a range of skillsets.

6) Sustainability, making strides: Alternative energy and energy efficiency are no longer optional as warehouse operators bring more automation into the warehouse. Solar panels, LED lighting, cool-roof systems, thermal glass, clerestory windows and other new green materials and innovations are leading warehouses into a new age.

7) Human-centric design: As labor shortages rise in many markets, there is a growing importance on workers' quality of life in the warehouse. New features such as effective lighting, air quality sensors and temperature control are more common as design becomes more human-centric. Improving the working environment not only benefits employee health but also reduces employee turnover and facilities risks. 

8) When it comes to land, flexibility is the name of the game: Industrial tenants are demanding flexibility in response to highly variable business conditions. Tenants want the option to add land and space if additional needs arise, like a seasonal rush. "Flex land" could be deployed for needs such as additional truck storage or warehouse expansion.

9) Super-flat to sloped floors: The super-flat floor has long been the norm in warehouses. Although many warehouse operators continue to require exceptionally flat floors for highly precise robotic picking and racking technology, sloped floors are appearing to accommodate technologies for moving inbound and outbound shipments.

Growing Indian warehousing market

The Indian Warehousing Market is expected to be an estimated $12.2 billion in 2020, growing to $19.5 billion by 2025.

The warehousing market is driven by the country's flourishing manufacturing, retail, FMCG and logistics sectors. Furthermore, supportive government policies such as establishment of logistic parks and free trade warehouse zones is expected to spur the market growth through 2025. Also, introduction of GST has led to reduction in inventory and turnaround time, which has led to the removal of check points thereby diminishing state boundaries.

Besides, technological advancements such as advent of AI, IoT, 3D Printing, among others, in the warehousing industry is further expected to create lucrative opportunities over the next few years. Moreover, the emergence of third part logistics and supergrid logistics is further expected to fuel the market growth during the forecast period.

Further, the sudden outbreak and spread of COVID-19 will have short-term impact on warehousing demand due to lockdown and reduced manufacturing activities. Further, it will help in strengthening the warehousing industry in India on account of the shifting consumer preference from offline mode of shopping to online in order to adhere to the social distancing norms.

The Indian Warehousing Market is segmented based on type, ownership, sector, usage pattern, infrastructure, end-user industry, company and region. Based on type, the market can be segmented into general, specialty and refrigerated. The refrigerated segment is expected to witness significant growth owing to the rising demand for such warehouses for storing perishable food items and ensuring food security & safety. Based on ownership, the market can be categorized into public, private and bonded. The public ownership segment is expected to dominate the market during the forecast period. These warehouses are owned by government and semi-government agencies and are rented by them. Such warehouses aid the small traders who don't have their own warehouses.

Based on usage pattern, the market can be split into single and co-warehousing segments. The co-warehousing segment is expected to witness significant growth in the market through 2025. This can be ascribed to the increasing demand for last mile distribution and growing preference for co-warehousing among manufacturers, suppliers, logistic companies as well as startups. Additionally, co-warehousing provides flexible storage that can help businesses meet their needs and give them a better control over their budgets. Co-warehousing provides scalability and helps in reducing overall operational costs.

Area under cultivation doubled in covid era

1 The area under cultivation of different crops in india has gone up doubled from 15.45 million hectares to 31.56 million hectares as above.

2 Further, as per the Food Corporation of India report dated 28.06.2020, FCI currently has 266.29 LMT rice and 550.31 LMT wheat. Hence, a total of 816.60 LMT food grain stock is available (excluding the ongoing purchase of wheat and paddy, which have not yet reached the godown).

3 About 55 LMT food grains is required for a month under NFSA and other welfare schemes.

4 Food grain Procurement:
As on 28.06.2020, total 388.34 LMT wheat (RMS 2020-21) and 745.66 LMT rice (KMS 2019-20) were procured.

The latest ‘All India Crop Situation’ report of the Agriculture Ministry shows a massive increase in planted acreage for various kharif season crops as of June 26, compared with the same time last year.

Crops such as cotton, oilseeds, maize and pulses have shown a remarkable increase in planted area for this time of the year. The planting acreage data, the current year’s numbers appear exceptional and, in some sense, too good to be true.

To be sure, we have had a combination of fortuitous circumstances, including the India Meteorological Department’s forecast of a normal south-west monsoon, timely onset of monsoon over Kerala and its rapid progress so as to cover the whole country two weeks ahead of normal time.

Additionally, the reservoir position has been satisfactory. It is possible, due to reverse migration following the national lockdown announced on March 25, that labour availability in rural India is comfortable, which has accelerated sowing. Cyclones Amphan in the east coast followed by Nisarga in the west coast, too, contributed to soil moisture.

Food and environment sustainability

Nature can neither be ignored, nor outsmarted. Producing food that is both healthy and sustainable demands that we work with–not against–nature.

With farmers having abandoned numerous local plant varieties in favour of genetically-uniform, high yielding ones, 60 per cent of dietary energy is now derived from just three cereal crops: rice, maize and wheat. Consequently, nearly one in three people suffer from some form of malnutrition.  

The situation is expected to worsen due to climate change.

Food is not only a matter of eating. Long before it reaches grocery store shelves, the process of production unleashes a multiplicity of factors affecting the length and quality of life on earth. Forests are cleared to create agricultural space, the atmosphere becomes warmer, diversity is systematically decreased,  buffers that protect humans from animal-borne viruses–like COVID-19–are removed, soil and water is contaminated, and plants and animals are infused with substances with precarious effect.

Many of the practices that were adopted to produce more food have resulted in environmental and health issues. Intensified farming has set into motion a vicious circle, affecting both immediate and long-term food security: expanding agricultural production demands clearing of trees and wildlife; deforestation contributes to climate change; and climate change increases the occurrence of flooding, drought and storms that result in food insecurity.

Pesticides and fertilizers used to boost food production are another concern. Not only do they pollute land and water, causing biodiversity loss; every year, 25 million people suffer from acute pesticide poisoning. Glyphosate–the most widely-used herbicide, worldwide–is associated with non-Hodgkin lymphoma and other cancers. 

Nature is essential to agriculture and nutrition.

Nature can neither be ignored, nor outsmarted. Producing food that is both healthy and sustainable demands that we work with–not against–nature.

With farmers having abandoned numerous local plant varieties in favour of genetically-uniform, high yielding ones, 60 per cent of dietary energy is now derived from just three cereal crops: rice, maize and wheat. Consequently, nearly one in three people suffer from some form of malnutrition.  

The situation is expected to worsen due to climate change. 

By recognizing the practical value of nature, a holistic food-system produces simultaneous net gains for the environment, public health and the economy.

Reducing CO2 could positively impact the nutritional value of the food produced–a significant health benefit, given that the vast majority of the world’s population gets most of its nutrition from plants. It could also reduce the risk of extreme weather events, which can lower crop yields. This is particularly important to small scale farmers and is not resilient to economic shocks.  In this way, protecting nature also protects livelihoods and economies.

Restoring biodiversity means strengthening the resilience of food systems, enabling farmers to diversify production and cope with pests, diseases and climate change. It would also reduce the risk of  viruses spillover and their tremendous economic impact, like the one we are currently experiencing.

Adopting plant-based diets would use less land, produce less greenhouse gas, and require less water. It would also play an important role in reducing chronic illnesses such as heart disease, stroke, diabetes and cancer and the associated costs of treatment and lost income. In fact, with a global burden of chronic disease projected to hit 56 per cent by 2050, dietary health will play an increasingly important role in economic management.

We need to consider the entire food system–from production to consumption–understand each of its components, their relationships, and their immediate and long-term impacts.

Agriculture should be recognized as a solution to biodiversity loss, climate change and pollution; and shift toward more regenerative or agroecological models that contribute to healthy landscapes and ecosystems.

Policies should be built on multi-stakeholder collaboration and address the food system holistically, valuing natural capital, promoting sustainable land use, preventing pollution and environmental degradation, and enabling producers the financial opportunity to innovate more sustainable models.

Behaviour change among consumers is also critical, towards healthy and sustainable diets and food waste preventing practices, through education, awareness-raising, strengthened urban-rural linkages and supportive food environments.

Environmental sustainability is not a luxury. It does not occur as an afterthought or as a happy accident. It is critical to human survival, now more than ever,as the current covid 19 endemic is one of the outcome.

Regards,

DR N K ARORA

Warehouse management through modern technologies.

Earlier, the warehouse was merely a building where goods would be stored, and it did not have any direct interaction with the customer. Today after the advent of e-commerce,and tougher competition, there has been a drastic transformation in the role of warehousing. It has emerged as a dynamic mechanism playing a crucial role in the order-fulfillment industry. Its entire focus has shifted from just storage to improving customer service through a warehouse management system.

The customer is the King! The warehouse industry now has to comply with all the latest management systems and tactics to keep their customers happy and improving customer service. Even though a customer will never be face to face with a fulfillment center, if he is disgruntled, it could spell doom for both the company and the service provider.

Nowadays, with warehouses are as vast as 100000 square feet, it becomes essential that all the employees stay connected at all times. Many employers are now equipping their employees with smartphones to streamline communications and improving customer service.

However, many recommend the use of radios. Two-way radios offer a quicker and much direct connection to their employees. They’re also more durable, which is vital in heavy-duty warehouse work.

Wearable GPS devices can be worn on the hip or the wrist. They help the user locate warehouse employees’ on-demand, which allows managers and supervisors to properly delegate tasks based on an employee’s proximity to areas or departments in need of help.

Keeping track of inventory on cloud-based software is the best solution for auditing stock and communicating data between two departments. It can help prevent severe backlogging and shortages.

I have available with me a very extraordinary software system known as IBWMS,which is a fully automated,smart and hyper efficient warehouse created with IOT.A complete knowledge is available on real-time data analytics with active event monitoring,and picking and packing through mobile interface with the help of beacons.

Warehouse management system, IBWMS, offers a plethora of tools to collect and analyze all of the warehouse information to see what is working up to mark and what is not. They can give the statistics on  products or individual employees to place things in the most optimal position and speed up the process in fastest manner.

Picking efficiency can be attained by deploying the right picking methodology coupled with the correct technology. The use of wearable and mobile technology can expedite the process by enabling pickers to move across the warehouse freely. At the same time, Radio Frequency Identifiers (RFID) tells them with precision the location of the goods. 

The requirement of demand forecasting has been a crucial topic of discussion in the supply chain context, there are three types of forecasting, through algorithms, which are:

Demand forecasting

This elucidates the investigation of the companies’ demand for an item to include current and future demand and product end-use.

Supply forecasting

It describes a collection of data about the producers and suppliers at present, along with technological and political trends that might disrupt supply.

Price forecast

This is the information gathered and analyzed about demand and supply. It provides a concise prediction of short- and long-term prices, trends, and its underlying reasons.

Besides,communication is paramount if the process must place an order from a customer. To avoid miscommunication and reduce expenses, it is highly recommended to offer customers an online portal or a platform through which inventory is seen, select the items they want to ship, and submit the order for processing.

Once the customer places the order, the system will produce a picking list or a loading guide with the items that the customer has selected. It is also recommended that the system provide individual fields for customers to enter detailed instruction if needed, e.g., for re-packaging instructions.

These all magical achievements are possible now through blockchain technology and IBWMS,and all these IOT and AI are available at a very reasonable costs.

Making agricredit system more efficient

Government of India started off the interest-subvention scheme in 2006, whereby crop loans would be given to farmers at 7% interest rate An idea of this diversion of agri-credit to non-agricultural purposes can be had by looking at agri-credit as a percentage of the value of input requirements in agriculture.

Normally, credit off-take in a particular sector is treated as a sign of performance of that sector. Higher the off-take, better performance is likely to be. From that angle, ground level credit (GLC) to agriculture and allied sectors has shown tremendous off-take. For example, in FY19, the banking sector disbursed Rs 12.55 trillion as GLC to agriculture, surpassing the government’s own target of Rs 11 trillion. This should call for celebration, but, unfortunately, growth in agriculture sector hasn’t been commensurate. How does one reconcile this? Let us try to understand and unravel some less known facts about agri-credit in India.

The accompanying graphic presents the absolute amount of direct institutional credit flow to the agriculture sector. There is no doubt that over a longer period, from 1971-72 to 2017-18, there has been more than a 1,000-time increase in agri-credit, from a meagre Rs 7.8 billion to Rs 8,235 billion. However, as a percentage of agricultural GDP, which should be the real measure of agri-credit growth, it has not been a smooth rise over all these years. For example, during the pre-reform period (i.e., 1971-72 to 1989-90) direct agri-credit flow as percentage of agri-GDP increased at a modest average annual growth rate (AAGR) of 4.2%.

However, during 1990-91 to 1999-2000, AAGR decelerated to 3.2%. But, thereafter, during 2000-01 to 2007-08 it witnessed tremendous growth at 12% only to fall back to just 3.6% during 2008-09 to 2017-18. The massive growth during 2000-01 to 2007-08 appears to be due to innovation in credit instrument in the form of Kisan Credit Card (1998), and policy intervention in the form of Interest Subvention Scheme (2006) that incentivised short-term credit. However, the slowdown after 2008 appears to be due to a loan waiver scheme (2008), which led bankers to be more conservative in lending to farmers for fear of increasing wilful defaults due to expected loan waivers in coming years.

Interestingly, the NABARD All India Financial Inclusion Survey (NAFIS) of 2015-16 reported that only 30.3% of all agriculture households availed credit from institutional sources. It could be that the remaining agri-households (about 70%) either don’t need credit, or they are not ‘bankable’, or both. But, the fact that almost 70% of agri-households did not avail institutional credit shows that there is still a lot of scope for the banking sector to increase its reach, be it for production purposes (crop loans), or investment, or even consumption needs.

Government of India started off the interest-subvention scheme in 2006, whereby crop loans would be given to farmers at 7% interest rate. Later, it added a provision for those paying back their loans in time regularly to get crop loans at a 4% interest rate. This is done in a situation where the interest rates in the informal sector, or even through micro-finance institutions generally ranged from 15-30%. This has created a huge opportunity to take large crop loans at subsidised interest rates from the banking sector, and then divert them for non-agriculture purposes. An idea of this diversion of agri-credit to non-agricultural purposes can be had by looking at agri-credit as a percentage of the value of input requirements in agriculture.

The accompanying graphic presents the state level picture for the triennium average ending (TE) TE 2016-17. The total short-term credit (outstanding) to agriculture and allied sectors as a proportion of input requirements (GVO-GVA) was substantially above 100% for many southern and northern states: Kerala (326%), Andhra Pradesh (254%), Tamil Nadu (245%), Punjab (231%), Telangana (210%) etc (see graphic). This is a clear indication that agri-loans are being diverted to other non-farm purposes. One of the key reasons for this diversion lies in low rates of interest being charged under the interest subvention scheme.

Another interesting feature is that in the total direct credit (outstanding) to agriculture and allied sectors, the share of short-term credit witnessed a significant jump from 44% in 1981-82 to 74.3% in 2015-16 whereas, somewhat disquietingly, that of long-term credit fell from 56.1% in 1981-82 to 25.3% in 2015-16.

Since long-term credit is basically for investments, and capital formation in agriculture, this dramatic fall in the share of long-term credit takes a heavy toll on the improvements in farm productivity, and overall growth of the agri-sector.

It is, therefore, high time to revisit the interest subvention policy, which is leading to these sub-optimal results. Also, for transparency, all crops loans, especially those availing interest subvention, must compulsorily be routed through Kisan Credit Cards (KCCs). Interestingly, it was reported in the latest economic survey that the cumulative number of KCCs issued was 150 million as of March, 2016, but the NAFIS survey, somewhat puzzlingly, reported that only 10% of farmers have used KCCs in the agricultural year 2015-16. This requires deeper research, but, nevertheless, issuance of KCCs in remote villages needs to be expedited.

A bolder step in this direction, however, would be to empower farmers by giving direct income support on a per hectare basis rather than by hugely subsidising credit, which is leading to massive diversion of agri-credit to non-agriculture purposes. Streamlining the agri-credit system to facilitate higher crop-loans to farmer producer organisations (FPOs) against commodity stocks can be a win-win model to spur agriculture growth.Therefore, the government should plug the diversion, and make agri-credit system more efficient.

MSP help for 2% of Agri produce in India.

e National Agricultural Market(eNAM) and it played the role in marketing of farmers produce in India

As per the Dalwai Committee Report 2017-18 (Volume IV), there are close to 29,547 marketing points. Of these, 22% or 6,615, are regulated markets under the APMC and 22,932 are regional periodical markets (RPMs). On an average, a farmer gets a regulated market in the radius of about 12 km and a RPM in a radius of about 7 kms. Out of these 6,615 markets, the NAM scheme aimed to bring 585 markets (i.e. 9%) on its e-market platform by the end of financial year 2017-18. Quite commendably, as on March 2018, all targeted mandis, i.e., 585 that are in 16 states and 2 UTs, (Chandigarh and Puducherry), have been integrated with the NAM-platform.

But, these 585 mandis brought only 90.5 lakh farmers onto the platform, which is less than 7% of the 14 crore Indian farmers. Close to 17 MMTs of quantity worth Rs 42,265 crore (cumulative since platform’s inception), is reported to have been traded on the platform. But, this value is only about 2% of India’s total value of agricultural output.
Salute to the Government for helping farmers for giving MSP to 2% of Agricultural produce of India.