Di­alling it up with lo­gis­tics

Con­sid­er­ing the essence of mo­bile phones in ev­ery­one’s lives, the lo­gis­tics in­volv­ing tech­no­log­i­cal hand­sets is an­tic­i­pated to be smooth. CARGOTALK ex­plores the chal­lenges in sup­ply chain of mo­bile phones,fill­ing those gaps, and how de­mon­eti­sa­tion has aff

TravTalk - India - - FRONT PAGE - KAL­PANA LOHUMI

Mo­bile phones have be­come an in­dis­pens­able part of our daily lives. Due to the con­ve­nience and var­ied func­tions, peo­ple feel hand­i­capped with­out their mo­bile phones.There is barely a sin­gle per­son in the de­vel­oped world who does not carry a mo­bile phone. With the rapid in­flux of mo­bile phones in our lives,the pro­cure­ment of mo­bile phones is al­ways increasing. Hence, the ques­tion comes who bring the lat­est mo­bile tool on shelves on time?The mo­bile hand­sets are not easy to han­dle when it comes to its lo­gis­tics from one point to an­other. On the other side, it is an in­dus­try where time plays a cru­cial role. Hence, sup­ply chain need to be flex­i­ble and re­spon­sive to adapt to the fluc­tu­a­tions in de­mand. Lead times, ac­cu­racy, re­li­a­bil­ity and avail­abil­ity are all of sig­nif­i­cant im­por­tance. hears from the lo­gis­tics ser­vice providers on the chal­lenges faced presently and what is re­quired to to keep up with the rapidly evolv­ing mar­ket place.

Agree­ing with the fact that mo­bile phone is an in­dus­try with short prod­uct life­cy­cles, rapidly evolv­ing tech­nol­ogy, to name a few, Mo­hit Goyal, Ex­ec­u­tive Di­rec­tor, TKW Man­age­ment So­lu­tions, says, “There are two ways of look­ing at it. Be­cause of shorter prod­uct life­cy­cles and new prod­ucts com­ing out of­ten, we have a sea of op­por­tu­nity and so we are not com­plain­ing. Although it’s fickle na­ture does make it gru­elling in terms of on-time de­liv­er­ies.”

Talk­ing about the chal­lenges, Ma­nu­raj Gupta, COO, All-Ways Lo­gis­tics, shares, “Time is very im­por­tant el­e­ment for mo­bile phone in­dus­try. Some­time there has been space con­straint with air­line which put pres­sure on lo­gis­tics for­warders. Also, mo­bile bat­tery comes un­der haz­ardous com­mod­ity and there have been var­i­ous re­stric­tions been im­posed by car­rier in car­ry­ing bat­ter­ies in pas­sen­ger flight. Nowa­days, a char­ter flight is only al­ter­na­tive to carry such kind of com­mod­ity and this in­creases the cost of trans­porta­tion.”

Echo­ing sim­i­lar con­cern, Goyal ex­plains, “Also, fea­ture-phones made way for smart­phones and now 4-G phones are the next wave. When­ever a new tech­nol­ogy hits the mar­ket, cer­tain re­stric­tions in terms of cargo han­dling do crop up. For in­stance – bat­tery han­dling be­came a pain area for the in­dus­try since mid-2015.”

“We need to be up­dated with changes from reg­u­la­tion from air­lines, au­thor­i­ties and cus­toms,” em­pha­sises, Push­pen­dra Pratap Singh, Na­tional Man­ager- Strate­gic Sales, eusu Lo­gis­tics. “Be­ing a con­signee & for­warder, one tend to re­ceive the changes from re­li­able sources,” he adds.

“Across the mo­bile ver­ti­cal the time to re­spond to mar­ket de­mands and changes is dwin­dling swiftly. The mo­bile in­dus­try is amongst the most dy­namic to­day and prod­ucts have un­der­gone rapid changes and cre­ated end­less chain of in­no­va­tions and new prod­ucts. Cus­tomers are de­mand­ing cheaper but su­pe­rior prod­ucts which are fur­ther shrink­ing prod­uct life cy­cles and lead­ing to speedy ob­so­les­cence. To in­flu­ence the op­por­tu­ni­ties gen­er­ated by cus­tomer’s volatile de­mand, the in­dus­try need to tighten their de­mand an­tic­i­pa­tions, sourc­ing, and in­ven­tory man­age­ment. To suc­ceed in these highly com­pet­i­tive man­u­fac­tures, we need to have more re­fined sup­ply chain man­age­ment,” shares Ajay Khosla, ICA 2016 win­ner & DGM, Jaipur Golden Trans­port Co.

“Ev­ery year there is growth of 20-30 per cent in mo­bile de­mand/ re­place­ment. Digi­ti­sa­tion will in­crease the de­mand. That it­self is the growth op­por­tu­nity as com­pared to any other in­dus­try. The only need is to be in­formed on new tech­nol­ogy and in­no­va­tions. That will be the ba­sic chal­lenge in this in­dus­try due to tough com­pe­ti­tion plus new en­trants com­ing in the mar­ket,” says Singh.

Shar­ing what tai­lor­made so­lu­tions he is pro­vid­ing to the trade, Goyal in­forms, “Bat­tery han­dling due to its DG na­ture and some un­for­tu­nate ac­ci­dents made their con­duct dif­fi­cult such as Sam­sung S7 de­vices bust­ing. How­ever, no air­line was will­ing to take the risk of han­dling bat­ter­ies any­more on their pas­sen­ger or cargo freighters, due to added se­cu­rity-mea­sures en­forced by HACTL. TKWs be­came the first com­pany in In­dia and in Hong Kong to counter it, by fly­ing its own char­ter planes for mo­bile phone in­dus­try. Am­ply sup­ported by some of the large play­ers like Mi­cro­max, In­tex, Kar­bonn, Lava to name a few, we ap­plied for spe­cial DG-han­dling li­cense in Hong Kong and run char­ter-pro­gram weekly. Till date, we hold the largest char­ter in­ven­tory for han­dling in­ter­na­tional lo­gis­tics for mo­bile phones.”

“From pick­ing up cargo from ship­per premises in China, cus­tom clear­ance in Hong Kong, air cargo move­ment from Hong Kong to In­dian air­ports, cus­tom clear­ance at des­ti­na­tion and lo­cal trans­porta­tion to cus­tomer ware­houses, we are pro­vid­ing end to end lo­gis­tics so­lu­tion to mo­bile in­dus­try,” Gupta says. Ag­gres­sive sup­ply chain cru­cial

Con­sid­er­ing the na­ture of busi­ness and the chal­lenges lo­gis­tics ser­vice providers face to main­tain the avail­abil­ity and re­li­a­bil­ity of mo­bile phone mar­ket,

Be­cause of shorter prod­uct life­cy­cles and new prod­ucts com­ing out of­ten, we have a sea of op­por­tu­nity and so we are not com­plain­ing Mo­bile bat­tery comes un­der haz­ardous com­mod­ity and there have been var­i­ous re­stric­tions been im­posed in car­ry­ing bat­ter­ies in pas­sen­ger flight We need to be up­dated with changes from reg­u­la­tion from air­lines, au­thor­i­ties and cus­toms. The dig­i­tal­i­sa­tion will prompt more de­mand in the fu­ture The mo­bile in­dus­try is dy­namic to­day and prod­ucts have un­der­gone rapid changes and cre­ated end­less chain of in­no­va­tions and new prod­ucts

the sup­ply chain need to meet the im­por­tant sub­tleties. Khosla says, “In re­cent years’ sup­ply chain man­age­ment be­come more crit­i­cal as many of the big mo­bile brands out­source their core ac­tiv­i­ties like man­u­fac­tur­ing and lo­gis­tics ac­tiv­i­ties and im­ple­ment de­fer­ment strate­gies. They fo­cus their ut­most at­ten­tion on sales strate­gies and lever­ag­ing tech­nol­ogy to ac­cu­rately fore­cast de­mand and share that data with sup­pli­ers and other in­ter­me­di­aries. Out­sourc­ing SCM ac­tiv­i­ties re­duces turn and dwell times, which are im­por­tant con­sid­er­a­tions given the short shelf life of most mo­bile de­vices. These reschedul­ing strate­gies have speed-up the blur­ring of the lines be­tween cell man­u­fac­tur­ers and 3PL ser­vice providers. A slight shift in con­sumer pur­chas­ing habits can have rip­ple ef­fects through­out the sup­ply chain man­age­ment.”

Goyal em­pha­sises, “Due to the huge com­pe­ti­tion among mo­bile phone play­ers right from top-ofthe-line play­ers like Sam­sung and Ap­ple, down to home­grown com­pa­nies or Chi­nese com­pa­nies, lo­gis­tics re­quire­ments re­main vac­il­lat­ing. Be­cause the pro­duc­tion is still in China (as­sem­bly lines have moved to In­dia but we are de­pen­dent on them for parts), it is vi­tal to un­der­stand their work cul­ture and dy­nam­ics too. For in­stance, they have CNY twice ev­ery year and sup­ply shoots up im­me­di­ately be­fore but drops to al­most zero lev­els post-CNY. One must match up ca­pac­i­ties and sup­ply-chain-cy­cle to meet their dy­nam­ics.”

Com­ment­ing on the same note, Gupta points, “Timely move­ment, air­line space avail­abil­ity and cus­tom clear­ance of mo­biles are the crit­i­cal com­po­nent of sup­ply chain man­age­ment of mo­bile phones. Once cargo reaches to main port like Delhi/Mum­bai, lo­cal ware­hous­ing and dis­tri­bu­tion with in to­tal time bound sched­ule is crit­i­cal.”

“Now in­creas­ingly in­dus­try is mov­ing on as­sem­bling and man­u­fac­tur­ing in In­dia. In­stead of air, mo­biles parts are get­ting im­ported through ocean con­tainer, which is more eco­nom­i­cal be­cause of bulk move­ment and lower freight. How­ever, since in ocean move­ment, time in­volves is more, bet­ter plan­ning of sched­ule of ves­sel and move­ment of rail and road,” he adds.

“Now a day’s mo­bile com­pa­nies are de­vel­op­ing their prod­uct lines and adapt­ing their inim­itable sup­ply chains strate­gies to meet the ever-high needs of con­sumers. Cell phone man­u­fac­tur­ers chal­lenged to shape their sup­ply chain strate­gies around the grow­ing needs of their con­sumers, which of­ten mean out­sourc­ing lo­gis­tics ac­tiv­i­ties to 3PL ser­vice provider. Mo­bile’s sup­ply chain re­quired ef­fi­ciency and scal­a­bil­ity so it could avoid need­less cap­i­tal in­vest­ments in in­fra­struc­ture and avoid­able in­ven­to­ries. Out­sourc­ing al­lowed it to con­trol vari­able cost model to tackle needs of an im­pul­sive mar­ket,” stresses Khosla.

Hence to keep up with rapidly evolv­ing world of the mo­bile phones mar­ket­place, Goyal notes, “Once one get a hang of things, how the in­dus­try works, what are its chal­lenges, how sup­pli­ers never de­liver on time and how con­signees ex­pec­ta­tions are never-end­ing; one start mak­ing sense of it. Then it is im­por­tant to an­tic­i­pate. Read about trends, fol­low how trade ma­tured in de­vel­oped economies and try and pick-up how things will un­fold in our sce­nario.” De­mon­eti­sa­tion was harsh

Since the gov­ern­ment has dis­con­tin­ued the cur­rency notes of ` 500 and ` 100 last year, it is im­per­a­tive to un­der­stand and take mo­bile phones lo­gis­tics ser­vice providers per­spec­tive on af­fects within the in­dus­try.

“Since mo­bile phone is a re­tail prod­uct; their sales dropped by more than 50 per cent im­me­di­ately post- Novem­ber 8, 2016. And due to the food-chain­ef­fect, our trade has been in bad shape. Also with gov­ern­ment push­ing for e-trans­ac­tions and in smaller cen­tres; thrust of mo­bile phones is bound to in­crease and with it, the over­all lo­gis­tics trade,” points Goyal.

“De­mon­eti­sa­tion has sev­er­ally af­fected the in­dus­try. De­mand has con­sid­er­able slowed down dur­ing Novem­ber and De­cem­ber. Be­cause ma­jor­ity of mo­bile pur­chases is on cash. There has been pile of stock and new pur­chases has been put on hold. But now the in­dus­try is re­cov­er­ing fast and hope­fully get stream­lined by end of March 2017,” shares Gupta.

“Yes, it has ef­fected for a short time. But the dig­i­tal­i­sa­tion will prompt more de­mand in the fu­ture too,” shares Singh.

Push­pen­dra Pratap Singh Na­tional Man­ager- Strate­gic Sales eusu Lo­gis­tics

Mo­hit Goyal Ex­ec­u­tive Di­rec­tor TKW Man­age­ment So­lu­tions

Ajay Khosla ICA 2016 Win­ner & DGM Jaipur Golden Trans­port Co

Ma­nu­raj Gupta COO All-Ways Lo­gis­tics

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