Building digital skills

2018 is sure to be a year of transformation, with significant opportunity for logistics managers to position themselves for success through proactive renovation of the operational processes. Operational excellence, particularly in the areas of technological adoption and cost realignment, will be central to the goal of executing through disruption.

“Businesses are counting on new hires to bring fresh insights on how leading edge technologies can be used in their companies. Seasoned employees expect the new hires to bring different perspectives that will help them drive change and build new capabilities. However, the bar for hiring the new employee is set even higher - not only are they expected to know the technology but in many cases, companies want them to know and truly understand the business.

As such, new hires need to focus ways to use digital to delivery new levels of supply chain performance. In addition to new hires, businesses are looking to improve the skill set of their current employees and many are investing in building digital skills

Regards

DR.N.K.ARORA
Expert & Senior Consultant
Warehousing,Logistics&Supply Chain Management
PUNE

Major reasons of food grain wastage in India

A study once represented that a quantity of wheat equivalent to the entire production of Australia goes to waste each year in India. Rs. 44,000 crore is the value of food grains wasted in India every year.What’s more, the food grain wastage value is 150 per cent of India’s budget allocation on agriculture. While many of us may raise eye brows on these statistics, unfortunately these have not moved our law makers. While the parliament and media have more than engaged themselves on a question of Rs. 288,000 crore spent on Food Security bill, unfortunately, they have not shown even a fraction of seriousness towards yearly loss of Rs. 44,000 crore due to food wastage. Stopping the food wastage should be the preamble of the food security of the country.

The problem of food wastage is not new. Food Corporation of India has admitted of food grain wastage of 79 million tonnes between 2009 and 2013. India produces about 260 million tonnes of food grain every year including wheat, rice, pulses and cereals. Rice has the major share (105 million tonnes), in it, followed by wheat (95 million tonnes), cereals (42 million tonnes) and pulses of (18 million tonnes). Farmers them-selves store about 70 per cent of the produce on their own and 30 per cent is procured by the government through different schemes for storage and public distribution. While the storage by farmers suffers a wastage of 6 per cent due to rodents, insects and fungi, surprisingly the wastage is about 30 per cent when the food grain is stored by FCI and state warehouses. lt’s surprising that the highest wastage occurs in the so-called developed states of Gujarat, West Bengal,Punjab, Maharashtra and Uttarakhand. FCI and State Warehousing Corporations together hold a storage capacity of only 70 million tonnes, whereas food grains procured every year exceed 80 million tonnes, creating a shortfall of about I0 million tonnes. An addition of emergency stock requirement of l0 per cent widens this gap to 20 million tonnes. While the average capacity of a facility is 20,000 tonnes, many of the FCI storage facilities are set up in open sky, making it easy for the grain to rot!

In the age of technology today, one is able to predict the consumer behaviour with minimal failures. Then, how come we are not able to predict the actual demand vs procurement of grains? Wrong estimates result in extra procurement, thus making FCI an official hoarder. Non-adoption of FIFO (first in, first out) principle further adds to this massive wastage. The solution is to develop an integrated software application linking overall production, demand, procurement and storage, keeping in view the associated regions and infrastructure available. The system will create most optimal location network of grain storage, minimizing travel distance for storage as well as final distribution. Such integrated software system is the key to building an efficient grain storage network. The financial institutions, technology, consumer markets and infrastructure move along with structure of society. The change of joint family to nuclear families has forced these to change from hub 8r spoke model to distributed architecture. Therefore, rather than one big bank, we now have thousands of ATMs; intelligence is stored in clouds rather than in one big computer; and home deliveries take care of our requirements, instead of one big shop.Similarly, the grain storage infrastructure architecture also needs to change. From several hundred big storage spaces, the architecture needs to move into several thousand small go- downs close to farmers and distribution spots.

The second intervention of technology is needed in the storage infrastructure itself. Today, new-technology steel silos and silo bags are available, whereby the life and safety of grain are enhancedmultiple times by creating modified atmosphere of low oxygen and high CO2. Through these technologies, one can create smaller storage of 2,000 tonnes per bag next to farmers, taking only 1/10th of an acre of land. It is the most chronic supply chain problem ever. It is time to get the perspectives right and implement solutions by supply chain professionals!

DR.N.K.ARORA
http://www.drarorawarehousing.co.in

strong increase in the containerization of maritime cargo in India.

The growing share of container tonnages shows there is a strong increase in the containerization of maritime cargo in India.
Evolution in Shares of Different Types of Cargo It is important to consider the development of different types of cargo because this will impact the ports and the ports policy in terms of required facilities, infrastructure, superstructure and equipment. The shares of major commodities  for five major commodity groups. Petroleum, Oil and   Lubricants (POL) declined from 41 percent to 37 percent of total tonnage, whereas coal increased in share from 13 percent to 15 percent. Iron ore reduced from 19 percent to 15 percent. The share of other commodities, which includes for example fertilizers, but also general and break-bulk cargo, has decreased from 23 percent to 17 percent. The share of containerized tonnage shows a large increase from 4 percent to 16 percent. The growing share of container tonnages shows there is a strong increase in the containerization of maritime cargo in India. This is an encouraging sign of the increased integration of the Indian supply chains and trade networks to the global container transport networks.

Regards
DR.N.K.ARORA
Expert & Senior Consultant
Warehousing,Logistics&Supply Chain Management
PUNE
23.3.2016

Our website

http://www.drarorawarehousing.co.in

Advantages of Negotiable Warehouse Receipts

With the introduction of negotiable warehouse receipts system, there would be following advantages: -  
Increased liquidity in rural areas. 
Encouragement of scientific warehousing of goods. 
Lower cost of financing. 
Shorter and more efficient supply chains.
Enhanced rewards for grading and quality.
Better price risk management. 
Higher returns to farmers and better services (quality) to the consumers. 

Brief note on achievements of Warehousing Development and Regulatory Authority during 2011

For the first time in the country, the Government of India had introduced a negotiable warehouse receipt system in the country by enacting the Warehousing (Development and Regulation) Act, 2007 from 25th October, 2010. As per the provisions of the Act, the Warehousing Development and Regulatory Authority (WDRA) had been setup by the Government from 26th October, 2010. 

The important achievements of WDRA during 2011 are as follows: 

1. Notification of Agricultural Commfies for Negotiable Warehouse Receipt: Initially the Authority had approved 40 agricultural commodities including cereals, pulses, oil seeds and spices to be notified for issuing Negotiable Warehouse Receipts. Most of these commodities have been approved by various commercial banks for loan against pledge to the farmers. Further, 75 more agricultural commodities including cereals, pulses, oilseeds, vegetable oils, spices, edible nuts and miscellaneous items like rubber, tobacco, tea coffee and makhana have also been approved for issuance of NWRs.

2.  Finalization of format of Negotiable Warehouse Receipt: The format of Negotiable Warehouse Receipts has been finalized by the Authority in consultation with Indian Banks’ Association (IBA), warehousemen and banks and the Negotiable Warehouses Receipt books have been issued to the registered warehouses. The Negotiable Warehouse Receipt has unique features such as Anti copy, endless text, fine line patterns micro printing with rainbow coloring.

3. Receipt of Application from Warehouses for Registration:  for commodity such a Turmeric, Raw Cashew Nut, Paddy, Chillies, Green Gram, Maize, Barley, Rice, Wheat and Pulses etc. 40% of NWRs have been financed by commercial and co-operative banks. PNB and Urban Co-operative Bank have taken lead in this regard.      

4. Regional Conferences: Regional conferences in association with FICCI, ASSOCHAM and PHD Chamber have been organised at New Delhi, Chandigarh, Bangalore, Thiruvanathapuram and Mumbai by the WDRA to create awareness about the negotiable warehouse receipt system the country.

5. Awareness programme for farmers: Awareness programmes for farmers in collaboration with CWC  In additions to this IGMRI and NIAM have also organised  awareness programmes, training  farmers in UP and Rajasthan.

6. Training programme for warehouse manager: A 5 day training programme for warehouse managers of CWC, RSWC and private warehouses has also been organised at NIAM.


Cont-2-g



-2-

7. Rural Godown Scheme (RGS): The RGS scheme has been revised as follows:

For godowns up to 1000 tonnes capacity- Project cost as appraised by financing Bank or actual cost or Rs. 3,500/- per MT of storage capacity, whichever is lower. For godowns exceeding 1000 MTs capacity- Project cost as appraised by Bank or actual cost or Rs. 3,000/- per MT of storage capacity, whichever is lower. For NE region/hilly areas, normative cost will be Rs. 4,000/- per MT or as appraised by bank/financial institution, whichever is lower irrespective of godown capacity. However, the revised cost estimates would need to be based on the rates of CWC and CPWD, wherever applicable.For godowns exceeding 30,000 MTs capacity (25,000 MTs for the NE States, Sikkim and hilly areas), the subsidy would be restricted to that admissible for capacity of 30,000 MTs (25,000 MTs for the NE States, Sikkim and hilly areas) only, excluding the cases of cooperatives. For renovation of godowns by cooperatives with assistance from NCDC- Project cost as appraised by Bank/NCDC or actual cost or     Rs. 750/- per MT of storage capacity, whichever is lower. 

8. RIDF Scheme: The scheme has opened up for the first time for private sector in the country. An allocation of Rs. 2000 crores has been announced by the Government of India for the setting up of warehousing infrastructure in the country under the scheme for Financing Warehousing Infrastructure under Rural Infrastructure Development Fund (RIDF). Loans to Government entities and private sector would be given for the construction of warehouses, @ 8% with rebate of 1.5% for timely payment of the loan.  

9. Extension of Crop Loan Facility with interest subvention to Post – harvest loan on NWRs to Farmers: At present concessional crop loan @7% with interest rate subvention is available to farmers as pre-harvest loan. In case of post-harvest loan against the negotiable warehouse receipts, the farmers are granted loan at commercial rates. In order to discourage distress sale of agriculture produce by farmers and to encourage them to store their produce in warehousing against the warehouse receipt, the benefit of interest subvention has been extended to small and marginal farmers having Kisan Credit Card (KCC) for a further period of up to six months post-harvest on the same rate as available to crop loan against negotiable warehouse receipt for keeping their produce in the warehouses. 
10. Working Group on Warehousing Development & Regulation for the 12th Plan Period (2012-17): The Planning Commission constituted a Working Group on Warehousing Development & Regulation for the 12th Plan Period (2012-17) on 18th July, 2011 under the Chairmanship of Chairman, WDRA with representatives from Department of Agriculture and Cooperation, Food and Public Distribution, Department of Financial Services, FCI, CWC, Banks, KSWC and NCMSL to suggest the approach towards orderly growth of the warehousing business and regulation thereof during the 12th Plan Period. The Working Group has submitted its report to the Planning Commission on the 12th Oct, 2011. Some of the important recommendations like revamping of Rural Godown Scheme, extension of crop loan facilities to the post-harvest loan on NWRs, allowing RIDF funding to Private parties for construction of warehouses have already been implemented by the Government.     
-3-

11. Infrastructure status to post-harvest storage and cold chain sectors: The Authority directly and through Planning Commission has taken up issue of according infrastructure status to post-harvest storages and cold chain sectors. Thereafter, the Committee of Secretaries (COS) has taken a decision to accord infrastructure status to post-harvest storage and cold chain. This will boost the development of warehousing and cold storages in the country.  

12. Introduction of NWR system in cold storages: The WDRA in consultation with National Horticulture Mission (NHM) and National Horticulture Board (NHB) is soon going to introduce the NWR system in cold storages so that the growers /farmers producing horticulture produce may store these commodities in cold storages and may avail the benefits of loan on NWRs issued by the registered cold storages. Perishable commodities such as Potato, Dehydrated Onion, Garlic, Ginger, Turmeric, Apple and Resins etc. are being notified.   

13. Integration of PACs with NWR: The WDRA plans to integrate the primary Agriculture Credit Societies (PACS) warehouses under the negotiable warehouse receipt system so that the small and marginal farmers may get benefited from this scheme. The WDRA has requested NABARD to chalk out a detailed programme in this regard.  The Maharashtra State Warehousing Corporation (MSWC) has also a plan to link PACs godown with larger capacity MSWC warehouses for introducing the electronic negotiable warehouse receipt in their warehouses. It has requested to relax the accreditation norms for these warehouses and also for exemption of accreditation and registration money. The matter is examined in the WDRA. 

Authority had been able to achieve some of these goals in the short period of one year and stands committed to outperform in due course. 

Gratitude is essential for a peaceful heart and a balanced life.

 Create a daily habit of taking a moment of solitude to humbly express gratitude for the great many blessings of this life. Let others know why you’re grateful for them. Let thanksgiving be the narrative of your life.” 
John Wooden
I had a friend growing up who never said thank you and it really pissed me off. Not only was it poor manners, but it made me uncomfortable when someone didn’t give thanks by offering a simple gesture of appreciation—and on the flip side, it made me equally uncomfortable when the provider didn’t receive thanks for their work.

“Thank you” is often thrown around in a busy work environment where teams are constantly completing tasks for each other in an effort to operate more productively and achieve their collective goal. Of course, certain situations and tasks call for a different degree of thanks. A simple “thank you” to a coworker in which you have developed a strong relationship with is usually sufficient—since you both have a mutual understanding of how much you appreciate each other. That being said, when someone goes above and beyond and delivers a substantial lift to your team, a special thanks is in order—whether it be a personal expression of gratitude or a public delivery of appreciation in front of teammates and other stakeholders.

Aside from integrity, the second most admirable trait I value in a leader is gratitude. Leaders have the ability to express their appreciation for their peers while simultaneously empowering them when giving thanks. As a young professional, receiving constructive feedback on projects/tasks is pivotal to personal and professional transformation. There is no better feeling when you exceed expectations on an assignment and receive recognition from your manager. What is even more empowering is when your manager provides you with a thoughtful expression of gratitude, outlining the specific impact your work has on the team's overall success. 

Going beyond the typical “Thank you, great job—I really appreciate it” and sharing the substantial value of an individuals’ work further inspires your team to achieve more, recognizing that their tasks hold significant meaning. The team will likely invest more in future projects if they understand the importance of each task and exactly why it is appreciated by leadership.

As we bring a short week to a close and projects are put on a brief hiatus over the holiday break, I hope readers will take a moment of solitude, just as John Wooden suggests, to reflect on the many blessings in our lives and the value added by those around us—expressing gratitude to those who support us in and out of the workplace. Whether it is family and friends over the dinner table or your colleagues reconvening in the conference room next week, let them know why you are grateful for the role they play in your life. I guarantee they will leave the dinner table/conference room feeling inspired to continue bringing more value into your everyday.

mechanisations and automation happening currently in Agri Warehousing area

I personally feel after moving around every nook and corner in different states of India that people are found sitting idally without any work.Hundreds of people are seen sitting without any work .You can't.imagine that India has such a powerhouse of the Manpower which is like a Car standing on the Road with its engine on 24 had without moving,causing wastage of fuel and energy resources.I think its the high time for the Government to plan manpower utilisation and the priority shall be given to this aspect and thereafter plan for mechanised operations and about automated warehouses parallelly.
   We.have to shift the paradigm of our this thinking to make India on the fast track of the growth chart of the world and I assure you that India will be number one and it will solve all our problems.Perhaps no body is thinking on these lines of how to startup the grossly underutilized manpower in India.It is more than a  Super nuclear power.  A comment was done to me that  I value your thoughts Sir. But the fact is everyone wants to economise and make their operation trouble free.

My reply to the said comment is that on the contrary Nation is first and important than the personal values and personal interests. I feel that rather so many benefits as follows:-

1 No ozone layer depletion.
2. No pollution.
3. No unemployment.
4. No criminals.
5  No equipment handling hazards.
6.No chemical hazards.
7. Contribution of 100% manpower towards growth.
8. Misnotion will be removed about mechanisation. 
9 All rural and poor population will get two times meals.
10 Fat income people will reduce.
11.A picture of one undivided Nation will emerge socially,economically and biologically.
12. Clean India, Clean peace,with clean mental confusions and Clean from health hazards.
You can't imagine,the list of above is endless chain reaction.
Regards,
DR.N.K.ARORA

Strategies to be devised to increase the registration of warehouse for issue of NWRs:-

1.The regulations are for day to day activities of warehousing business and need modification up gradation from time to time and Government approval procedure takes lengthy time to solve the issues at proper time, for which Government approval is not necessary. The WDRA shall be empowered to make regulations by its own for which no approval of central Government shall be necessary.

2 The confidence level of the depositors for keeping their goods in privately owned warehouses registered with WDRA is very low, due to which the owners also do not find any initiative for getting their warehouses registered. It was discussed that there is no comfort level in getting the registration done, because recoveries due to losses is very uncertain as the punishment provisions provided in the WDR Act, 2007 are off course deterrent to such losses but there is no solution for grievances of the depositors and Banks for recovery of their losses which are not covered under any insurance policies.

Therefore Authority has to devise some preventive methods to eliminate chances of losses such as to ascertain good background and good track history of the owner/Warehouseman or by appointing some outsourced agencies who can work as collateral Managers also of such warehouse which are registered by WDRA, or by taking help of state Govt. appointed licensing authorities whose basic duty also is to ensure fair and proper running of warehouses before granting them the licenses for warehousing. This will bring confidence amongst depositors and Banks.

3  Besides, The Act shall provide penalty and punishments for the registered warehouses for violating the provisions of the Act but surprisingly there is no punishment/penalty for unregistered warehouses violating   the same provisions of the Act. This non inclusion of punishment/penalty for unregistered warehouse is a like an incentive for violating all norms and regulations of the Act and getting scot free.

4  The Act shall provide provision for indemnity fund.

The indemnity fund is a type of insurance program that protects the farmer from loss of value should the grain be destroyed or damaged beyond its economic value while in storage. Without the indemnity protection, the risk of storing the grain for sale at a future time might be too high. The indemnity fund shall give a financial support system for the recovery of loss to the depositors/beneficial owners in the event of any failure of the warehouseman to deliver the goods or pay compensation as per its commitment, because the Act provides for punishments including recovery but which may take years for the metropolitan court to decide.  Besides recoveries are also not possible in certain cases like bankruptcy and other reasons such as force measures and natural losses due to moisture driage etc.

Therefore, the Act shall provide provision of some corpus fund which may be in the name of indemnity fund to mitigate financial risks which cannot be recovered under any circumstances but are protected under various provisions of the Act by the Government.  This will protect integrity of NWR system and therefore NWR issued by a warehouseman  under the Act will be a “good title”

.  

5. WDRA shall have judicial status with powers to settle disputes of all types in different warehousing activities to be notified.

6The registration of warehouses shall be in the name of warehouseman along with the name of owner and name of company, to have more clarity on the part of fixation of responsibility.

7 The Act shall include provisions for indemnity fund to mitigate financial risk of stake holders i.e. depositor, banker, financer, holder of warehouse receipt in whose name the depositor has endorsed.

8.The activities of logistics and supply chain management shall also be covered under the preview of WDRA.

9. The clarity is required for getting the registration done by a warehouseman for a part of the warehouse in the form of minimum one compartment/shed/godown.

10.Scope of offences and penalties may be broadened by way of notification of authorizing WDRA nominated officer to seal a godown which shall be duly protected by police.

11. The scope of WDRA shall also be broadened in formulating various standards, code of practices, designs and standardization of all procedures of different activities pertaining to all warehousing activities.  

12.The section 43, 44 and 45 prescribes punishments of imprisonment up to three years but does not empower WDRA to recover the damages/losses under the Act.

13. Provision shall be there in the Act to include banker and endorse, as their right to verify physical condition /physical presence of the stock along with the value mentioned in NWR to increase the comfort level.

14.Norms of storage losses due to natural driage shall be included in the Act for various commodities.

15. Provision shall be there in the Act to include the condition that the endorsement done by the depositor shall be immediately informed along with name and address of endorsee.

16. The WDRA role shall be as a regulator to ascertain that all activities of warehousing in India are in accordance of the norms and procedures prescribed by WDRA and to deal with the matters accordingly.

17.Min.of Finance May issue guidelines to all banking regulators and financial institutions to devise attractive schemes for popularising NWRs

18. WDRA in consultation with MEA ,RBI and NABARD may make regulations for making rating of warehouses based on proposed standards which may result into reflecting different level of confidence of different registered warehouses.

19. Banks may be advised to prioritise loans to WDRA registered warehouses,for which Banks may be empowered at local branch level to reduce rate of interest 2-3%,depending upon ratings as per the said regulations laid down.

20. All APMCs,local warehousing license issuing authorities may also be given space in the regulation making process.

21 Example  of MP Govt, may be followed by other state govts.to give priority to WDRA registerd warehouses,wherein more % of share to owners of warehouses is given which are registered with WDRA,in storage of govt.procured food grains.

22.  The FMC had issued circular dated 30.08.2013 for the mandatory registration of Exchange-accredited warehouses with the WDRA, accordingly the WDRA has been receiving following feedback for doing registration of  exchange accredited warehouses:-

Since the failure of the warehouse receipt system appears to be one of the main reasons for the crisis in the NSEL, the mandatory registration provides an opportunity and a challenge to the WDRA to establish a regulatory mechanism for oversight and integrity of the warehouse management system as follows:-

 AWherever not full but part of the warehouse is required by the Exchange, the WDRA should protect the interest of other depositors, and look into the warehouse as a whole.

In devising the mechanism and the framework, the WDRA should study all the lessons learnt from the NSEL and provide safeguards to prevent recurrences.

 B“Fit and proper conditions” for WSPs should be worked out and specified by the WDRA.

 C.The WDRA should specify comprehensive norms for insurance as mandated under the W(D&R) Act.The WDRA should evolve suitable norms on capitalisation, ownership, financial adequacy, etc. of the WSPs.

  D The WDRA should revisit the norms for the infrastructure, maintenance and quality standards for the Exchange-accredited warehouses.

  E.The WDRA should also work out a financial support system for the recovery of loss to the depositors/beneficial owners in the event of any failure of the WSP to deliver the goods or pay compensation as per its commitment.

    F. A robust ongoing inspection system should be put in place.

.