Analyst Magazine July 2015 Web

For private circulation only
July 2015 | Volume 1 | Issue No. 3
THE
WINNING
STREAK
One of the most successful women

entrepreneurs, Sulajja Firodia
Motwani, Vice Chairperson,
Kinetic Engineering Ltd, has taken
the path less travelled to rebuild
Kinetic Groups fortunes.
Leadership Series: Kavindra Mishra, MD & CEO,

Pepe Jeans India Ltd, gets candid about his style
Current_Issue_July_2015.indb 1
CEOs Roundtable: Driving innovations in ice-cream flavours

go hand-in-hand with managing cold chain challenges
14/06/2015 05:41:01 PM
CONTENTS
16
Re-engineering
Wheels of Success
In an exclusive interaction, Sulajja Firodia Motwani,

Vice Chairperson, Kinetic Engineering Ltd, shares the
strategy adopted by her to reorganise Kinetic Group
after they exited the twowheeler business.
Leadership Series
04 Styling with Passion

Experience the fusion of introducing innovative

flavours while managing complex supply chain
Interviews
12 Cold, Clean, On Time

Mr. Kavindra Mishra, MD & CEO, Pepe Jeans India

Ltd, deciphers on the various aspects that would
create Leaders of Tomorrow
CEO Roundtable
08 The Inside Scoop

21
Mr. Vikram Ogale, Director National Supply Chain

& Quality Assurance, McDonald's India, shares the
secret ingredients of delivering freshness from
FARM to FORK
Experience The Big Power of Small

Mr. Vinod Srivastava, Director Integrated
Operations, Lenovo INDIA, talks about crucial
parameters for creating a world-class supply chain
model
27
Enroute 3As
Mr. Gulshan Bakhtiani, Co-Founder & Director,
Finance & Strategy, Wellness Forever, cracks the
pharmacy retailing code
Focus
30 Eyeing Future Perfect Value
Proposition

Editor: Prerna Lodaya Cover Story Photo Courtesy: Abhijeet Anand
Mr. TAB Barathi, Vice President (SCM), Wheels

India Ltd (TVS Group) explains the importance
of investing in supply base and bringing about
technological advancements
24
Procuring to Perfection
Mr. Lionel Stanton, Interim Projects Director,

Future Supply Chain Solutions Ltd, talks about
holistic convergence of multi-channel, integrated
and synchronised value chains.
02 | The Analyst July 2015
14/06/2015 05:41:07 PM
MESSAGE
Dear Readers,
Indias GDP at 7.5 per cent for the March quarter has made it the world's fastest growing
economy and for the first time is leading the World Bank's growth chart of major economies.
The confidence levels raised by reforms initiated by the government and cheap crude oil prices
are expected to boost India's gross domestic product (GDP) this year. The government has also
relaxed many norms to improve ease of doing business in India which is likely to improve Indias
rating. Further, an aggressive approach to building infrastructure remains the key driver of
economy.
Talking more specifically about cold chain infrastructure, Indias investment in cold chain is
forecast to total $15 billion over the next five years. The food processing ministry has identified
the creation of cold chain infrastructure to link the farmers to the consumers seamlessly by
way of developing Cold Chain Grid in the country. Sanctioning of 17 new Mega Food Parks
and 30 Cold Chain projects will fetch total investment of about Rs3077 crore in the creation of
infrastructure in food processing sector.
I believe this is just the start and as service providers we should create world class integrated
cold chain to cater to sectors such as pharmaceuticals, food & beverages, quick service
restaurants, etc. Going ahead, integrated cold chain solutions will become the norm, connecting
farm to plate, this integration will revolutionise the way cold chain operates these days. Right
from mechanising farm equipment, temperature controlled transportation, chilled reefer
systems, as well as state-of-the-art cold storages will all offer complete end-to-end supply chain
solutions to companies.
Similarly, E-Commerce logistics is revolutionising customer experience. With emergence of
Omni-channel retailing, logistics will have to mature quickly and take over the role as an enabler
in driving consumption. While we continue to expand reach and coverage, we should also be
looking at better ways to manage inventories and reduce operations and logistics costs in both
forward and reverse.
This is the right time to invest, weed out inefficiencies in processes and get ready to capture the
enormous possibilities coming your way!
Warm regards,
Anshuman Singh
Managing Director & CEO

Future Supply Chain Solutions Ltd.
md@futuresupplychains.com
The Analyst July 2015 | 03
14/06/2015 05:41:08 PM
Young, dynamic, energetic and a

hands-on leader are metaphors that
describe the persona of the MD & CEO
of Pepe Jeans India Ltd. Candid in his
opinion on the people-led approach,
Mr. Kavindra Mishra believes in
leading from the front. His cool and
calm composure and work with ease
approach has led the company score
double digit growth in the recent years.
In an exclusive interaction with this
enthusiastic personality, Prerna Lodaya
explores various aspects that would
create Leaders of Tomorrow.
14/06/2015 05:41:11 PM
Leadership Series
STYLING WITH
PASSION
ashion is defined by its ability to evolve,

excite and create trends at breakneck
speed. When it comes to bringing the
best to the consumers, Pepe Jeans London
remains at the front of the fashion pack
with a winning formula based on its ability
to deliver the strongest denim-led fashion in
the market. With a rich heritage, Pepe Jeans
is recognised as a brand not only for the
youth but also for everyone who is young
at heart. The casual denim brand offers
international, fashionable and premium
clothing. Its Indian subsidiary matches up to
the enthusiasm and promise to deliver to its
customers not only value for money but also
an unparalleled international experience.
The moment you enter the Pepe Jeans
India head office in SoBo (South Bombay),
you can quickly feel the essence of the
parent brand retained by the company.
Buzzing with daily activities, the place
echoes the sense of ownership and pride
amongst its employees. The youthful and
peppy atmosphere demonstrates in spirit
and in numbers that the company has been
able to live up to its mantra, For the Youth,
By the Youth. The entire credit for creating
such an enviable work culture goes to the
MD & CEO, Mr. Kavindra Mishra. He prides
himself in being one among the many
people working in the company. His Can Do
attitude has metamorphosed the fortunes
of the company for India. Passionate about
the growth of the company, Mr. Mishra
believes in taking the team along to reach
the growth trajectory.
Heres what he had to say about the
Brand PEPE JEANS and of course his
covetous leadership style that has helped
him train, engage & enthuse GenY in the
simplest yet competent manner. Excerpts
Transitioning from being global to

GLOCAL
As fashion is immeasurable and abstract, we
strongly focus on forecasting the demand
and understanding constantly evolving
trends. Internationally womens wear
dominates markets compared to mens
fashion; whereas in India it is the other
way around. Around 70-80% of the mens
fashion market is captured by brands in
India. Most fashion brands in the country
sell a higher percentage of mens collection
in comparison to their counterparts across
the world.
We try to keep the spirit of our brand
alive while indigenising and customising
apparels basis consumer preference. In
order to have a wide and eclectic range, we
customise our offerings for both mens and
womens wear.
At Pepe Jeans, we use our global
experience and rich heritage to introduce
tailored products that best suit the local
market. Fashion at its heart is individual;
however there will continue to be a pattern
in the way consumers buy-in to trends and
make purchases. This insight has led us
to create fashionable collections that are
well received season after season. Keeping
in mind the demographics and customer
profile, we customise our offerings to best
suit our customers.
What we have retained from the parent
company is the store experience the
entire look & the feel of the store, and
most importantly the training of our teams,
especially when it comes to the concept
of Customise Your Denims. This concept
store is only available in the parent country
till date. We will be the second country
to launch such a unique concept for our
customers. I am sure with such a vast
geography, we will gain much success. As far

as the retail experience is concerned, we try
to align ourselves with the parent company.
Most importantly, as we are a global
brand, we have an edge as we are offering
customers an international experience at
Indian cost.
Capturing trends
Traditionally the value chain of textiles

takes 6-9 months right from capturing
trends, conceptualisation of design, getting
feedback & approval from the customers,
getting to the mass production and then
finally having the collection at the store for
consumers. Fashion is so dynamic; its not
like launching just a single product. You have
100-1000 design variations for customers
to choose from. You have to be very sure
that because of changes in fashion trends,
your products shouldnt become a quick
fad. A lot of forecasting takes place before
apparels actually reach the point of sale.
We need to analyse consumer preferences,
market trends, and identify key styles that
are likely to be a hit in the next season.
We are also increasingly witnessing a
14/06/2015 05:41:16 PM
Leadership Series
higher penetration in the tier III market with

the burgeoning growth of the e-commerce
industry. Social media is also helping us to
gauge the fashion trends faster and easier
than ever. As a result, the fast cycles are
shortening. Instead of getting to the market
with newer products year on year, we have
to make sure that we get to them quarterly
with newer varieties and never seen before
styles. Through the online medium, we can
understand consumers buying behaviour
by gauging consumer feedback for apparels
online. Depending on the response, we can
then decide to proceed with a full-fledged
sale online and offline. Earlier feedback
response mechanism was a tedious and
time consuming process. Thanks to the
online medium, it is now possible to
forecast quickly and accurately as we are
getting direct feedback from the customer.
Getting to the customers on time

every time
Fashion supply chain is 6-9 months cycle.

This is a very traditional supply chain.
We are attempting to shorten this long
and tedious cycle. We are doing Flashes
collection wherein we try to gauge
customer preferences through store
experience and create a collection to target
the specific needs. Online is also a strong
medium to understand demand patterns.
Basis findings and insights, we identify
and manufacture the appropriate quantity
of garments. The aim is to reach out to
customers more often. We are looking to
have a quarterly cycle soon. In fact there
are brands globally who introduce new
collections every month, however we
believe that for us that would result in an
inventory challenge. So, we dont want to
achieve that.
As far as the target cities are concerned,
while we have achieved considerable feat
in metros and tier I markets; tier II & III
cities also do very well for us. As fashion
becomes more and more accessible and
aspirations increase, consumers want to

buy branded clothes. This phenomenon is
true globally. It is here wherein the entire
revolution is taking place, and companies
are actively targetting these markets.
For us too, these are important markets.
Additionally, the online boost has created
awareness amongst people about the
latest fashion trends; and they are now
keen to experiment and buy in to new
trends. A customer may purchase a pair
of jeans or a shirt online from Pepe Jeans
currently available on an e-commerce
platform, but it is their experience with the
product primarily the look and feel that
will encourage them to visit the nearest
Pepe Jeans store to check out the latest
collection and the wide variety.
Acquiring the right talent
I believe that money is never the tool to

retain an individual in the company. You
can always find an organisation that can
possibly pay you better. There is no dearth
of jobs. I strongly advocate the principle
of do what you are passionate about, and
only then will you succeed. You should
set your goals right from the start of your
career as to where you would like to see
yourself 10 years down the line and work
towards achieving that. You have to create
an environment that appreciates talent. If
someone does well, make sure that you
complement him on his efforts and hard
work in front of the team. You have to
guide them to take the right path and build
a long lasting relationship based on trust.
As a company, we have taken concerted
efforts to ensure we are able to retain the
best talent with us while giving them the
remuneration they deserve to be a part
of this organisation. Its a very healthy
atmosphere where there is a lot of sharing
of ideas at every level in the organisation.
Its a very open culture. You have to
celebrate success with them and make
them feel like a part of the team. Give
credit to them for their success and dont

blame them for any failures. As a leader,
you cannot take credit for success and
blame them for failure. That way one will
never will be able to build a strong team.
Experimenting with the omni-channel

wave
An omni-channel strategy is the key for us.

If you want to succeed in the business and
especially in the apparel industry, you have
to have both online and offline presence,
says the determined CEO. Right now, we
have partnered with online portals such
as Jabong, Myntra, to sell our products.
Shortly, we will have our website, by way
of which customers will be able to shop
online. This allows the customer to place
an order while sitting in any part of the
country and can receive great service and a
brand experience through our stores. Right
now there is a centralised warehouse and
from there we dispatch orders. With omnichannel, our stores will become HUBS.
They will not only be servicing customers
who walk in to the stores, but also
customers who have placed orders online.
That is the insight to our new approach.
It is still at an idea level. The objective is
to reach closer to the consumers and be
more accessible.
Strategy to sustain the leadership

position
With considerable growth in its India

business, we are set to expand online as
well as brick and mortar presence in the
country. The company has been showing
profits since the last decade. The brand
has been doing very well for over a decade
now. We are strong in both metros, as well
as in tier II and tier III cities. Our distribution
is robust and our partners have been with
us for a long time. Its a reflection of the
way we manage.
Presently, the focus is on refurnishing
existing stores based on international
14/06/2015 05:41:21 PM
Leadership Series
store layout. We are evolving along with
the consumer. As the brand evolves, we
are trying to devise a new identity. We
are renovating our stores to introduce
an international imagery and elevate the
brand perception. We have invested in
store staff training to ensure that the team
is at par with that of our international
stores. We grew 25% last year, this year we
should grow at 30-35%. For the next four
to five years, we expect a CAGR of 25%.
The strategy is that we must be aware
of who our target audience is. There is
enough and more space for everybody in
the market. If you have the right product
at the right price, you will definitely
succeed. We are able to offer products at
an economical price, as we are a global
brand that manufactures in India. We will
soon be launching kids wear in the Indian
market. With this range, we want to be a
fashion lifestyle provider for the entire
family. We believe this is a very strong
promise.
Pepes kids wear is a strong line for
the company globally. It does well both in
standalone and department store formats.
We will bring the line to India and add just
a few variants to customise the offering
for the Indian market. Hence, its primarily
a line thats imported. This will give an
international feel to the brand. The talent
for designing kids wear is limited in India.
So, we will do little merchandising here.
We have grown double digit since last
few years. Our growth has not only come
from opening new stores but from making
operations better. The sales density has
increased. This year we plan to open around
40 stores. Next year, we are planning to
launch shoes and inner wear. The idea is to
launch a big project every season and build
on it. We are looking at a strong double
digit growth of the next 4-5 years. I think
the position at which we are right now; we
are poised for a good growth momentum.
Pepe, which was launched

in London by three brothers
as a weekend roadside stall
in Portobello Road in 1973,
became an established brand
in the UK's fashion industry in
the 90s starring celebrities like
Kate Moss for its advertising
campaigns. It is now present
in 60 countries and sells its
products through more than
7,000 multi-brand stores.
An entrepreneurial streak
Entrepreneurship has been a very

interesting experience. I often tell people
that what you acquire in two years of
entrepreneurship, you may fail to learn in
an entire career, even if you are employed
in an organisation and are leading the
best brands in the country. It offers you
tremendous learning because you have
to build a business from scratch. The
uncertainty about whats going to happen
tomorrow, the fear of failure and most
importantly when you put everything at
stake including your professionally well
settled career and your personal life, the
experience is really something one can
never get elsewhere. When the business
survives and succeeds, the pleasure and
happiness is unimaginable. But for that to
happen, you have to have a very strong
idea and a belief in what you want to do.
Zovi.com gave me a fantastic experience of
the online business. We were the first ones
who were selling our own brand rather than
selling other big brands. We created our
own brand. The entire experience of testing
& trying, getting more analytical in terms
of which product will do well in the future,

is an experience worth gaining. Obviously
there are a lot of challenges but the fruit
of that hard work is something one should
really work on and build a path towards
achieving that. I would recommend for
everyone to be an entrepreneur. If you have
the will and an idea, try it out now rather
than waiting for one year or 5 years or for
that matter your whole life, regretting that
you didnt give it a shot.
Leadership style
The best way to find out my leadership style

is to talk to my team. Firstly, you need to
be a good listener because you work with
a team. You just cannot be autocratic in
nature. If there is logic and it makes sense
for the business, then one must go for the
goal and achieve it in full spirit. I am a very
hands-on person. I dont believe in simply
delegating. I would rather involve myself
and feel like a part of the team. Thats not
because I want to micro-manage; instead I
believe that if I can add value to the process,
then why not do it right from the start to
harness better results. My first instinct is to
trust people a lot. I cannot work in a team
that I cannot trust. Thats the underlying
factor. If the team does well, I do well. Thats
the philosophy I work on. Though I have had
both the good and the bad experiences,
but thats a part of the journey. You have to
accept failures and move on. I have a very
young team, so its a very energetic and
enthusiastic atmosphere. I believe that let
people make mistakes. As long as they dont
repeat it consecutively, its fine. Thats the
only way to cultivate a sense of ownership
within an individual. You learn from your
mistakes and tend to find unique ways to
achieve the desired goal. I encourage people
to constantly challenge themselves and try
out new things. I believe that intelligence
and hard work is the business hygiene
right now. My fundamental philosophy is
that you should work with passion. It is the
differentiating factor because you can fake
your passion and interest in a certain thing
for one year to two years, but you have to
work for almost 25 years of your life and you
really cannot survive if you dont like what
you are doing. Do whatever you like to.
Only then will you be able to do well.
Mr. Kavindra Mishra pursued his MBA from
Indian Institute of Management, Bengaluru.
He started his career with Madura Coats
Limited and then worked for brands like
Allen Solly, Tommy Hilfiger and United
Colors of Benetton. He is also co-founder
of Zovi.com, the first online apparel and
lifestyle platform. After a two year stint
at Zovi.com as an entrepreneur, he moved
as the CEO of Pepe Jeans India and has
been instrumental in designing effective
strategies and embedding them tactfully in
the broad spectrum of global strategy.
14/06/2015 05:41:26 PM
ROUNDTABLE
THE
INSIDE
SCOOP
Toiling day in and day out, these
companies have been quenching
our temptations for ice creams.
The recent developments in the
cold chain space have opened
up newer vistas of opportunities
for ice cream manufacturing
companies in terms of maintaining
temperature throughout and
keeping the freshness intact.
While a lot needs to be achieved
for India to be at par with the
rest of the world, the steady pace
of growth is signalling bright
prospects ahead for companies
alike. This roundtable with ice
cream manufacturing companies
highlights the most prominent
challenges and offers insights into
dealing with the shortcomings
by an innovative streak, reports
Prerna Lodaya.
Pradeep Chona
Chairman & Managing Director,
Havmor Ice Cream Ltd
Almost all of us irrespective of age have

been in love with ice creams and in
summers, we crave for them all the more.
While we can just relish the taste and feel
the chill, a lot goes behind keeping them
frozen and fresh through the journey. The
ice cream industry has been witnessing
a paradigm shift not only in introducing
innovative flavours, but also the way they
manage their supply chain. Take a look
Indian cold chain infrastructure vis-vis other countries

Pradeep Chona: Indian cold chain industry
is still evolving & not yet developed unlike
infrastructure available abroad. It is
highly fragmented and organised players
contribute only 810% market share. Most
of the equipments used are outdated
and single commodity based. Cold chain
infrastructure in agri-commodity is still
in nascent stage. In our industry also,
cold chain infrastructure needs a lot of
improvements. In my view, main issue
is the availability of power, the cost of
power and the quality of roads. Facilities
like automated toll booths, better policing
(so many accidents happen due to wrong
driving positions, drivers drive slow in
fast lanes), etc., are required. Many
states still have octroi, which is obsolete.
Most importantly, we need to look at
modernisation.
Anuvrat Pabrai: In earlier years, the biggest
bottleneck used to be the poor conditions
of the roads and erratic power supply.
Presently road infrastructure has taken a
big leap towards betterment but electricity
is still an issue in several states. The quality
of storage is still at its infancy. Although ice
cream industry has by and large been able
to take care of its own requirements but still
Anuvrat Pabrai
Chief Mentor & Advisor,
Fresh & Naturelle Ice creams
there is a lot required to be done in terms

of developing cold storages by private
players. That means anyone wanting to
store ice creams should be able to find and
use private cold storages for storage of ice
creams. While some private players have
put up cold storages, adequate facilities
are still not yet available in tier 2 and tier
3 cities. In 1991, we started keeping our
ice creams in an external cold storage. We
were probably the first company in Kolkata
to start using an external cold storage for
storage and distribution purposes. At that
time, people were laughing at us because
we didnt have our own cold storage. Today
distributors of big ice cream companies
have their own cold storages. So to that
extent, there has been a development. But
today if someone is doing marketing of ice
creams at places like tier II towns of West
Bengal, storages are not available in minus
temperature. There is a bottleneck in terms
of overall availability of infrastructure at the
grass root level. That will take time. Forget
about ice creams, even for other nondairy
products, adequate storage is not available.
There is substantial wastage of fruit and
vegetables due to non-availability of cold
storages at farm level or in catchment
areas. So while things are improving, a
lot more needs to be done. We are even
behind countries in South East Asia such as
Thailand, Malaysia in terms of cold chain
infrastructure. We have to go a long way to
come at par with the rest of the world.
Nirav Momaya: SCM solutions have
improved dramatically in the last few years.
You have various easily available options in
terms of mode (air, ground, rail, sea) & time
(expedited, regular) and safety (insurance
options) & technology (tracking, billing)
across the board. However, cold chain is
14/06/2015 05:41:34 PM
ROUNDTABLE
Nirav Momaya
CEO,
Gourmet Gelato Company Pvt Ltd
getting developed in India and is yet very

expensive and tedious for LTL (Less than
truck load).
Sudhir Shah: According to the World Bank
2014 logistics Performance indicator, India
is ranked 54th and is behind countries such
as Japan, the United States, Germany and
China.
Challenges & opportunities
Pradeep Chona: Around 88-90% of the

share of cold chain industry comes from
cold storages and only 10-12% is from
reefer transport. High cost of transportation
is a major bottleneck. Almost 68% cold
room capacity is concentrated in three
states namely Uttar Pradesh, West Bengal
& Bihar. Out of which, 8590% account
for potato storage. Focus is required for
reefer transportation, multiple commodity
storage facilities and other states should
also increase capacities.
Anuvrat Pabrai: The government should
make development of cold storage and
cold chain infrastructure as a priority area.
As a first step, 10 year IT exemption, zero
import duties and other incentives should
be announced so that the infrastructure
gets developed. Once that happens, even
if the government removes subsidies, the
industry will be able to run on its own.
Its like affirmative action. We have to
encourage sectors, which are not developed
to further the growth momentum.
As far as the opportunities are
concerned, the number of people staying
in tier II & III cities is huge. They dont
have access to so many products at their
doorstep. There should be a cluster based
approach. There should be one cold storage
available in every part of the country. This
will automatically ensure that the area
Sudhir Shah
Director,
Sri Srinivasa Dairy Products Pvt Ltd
starts getting ice creams. That penetration

will start slowly. There are latent
opportunities waiting to be tapped once
the desired infrastructure is developed. We
still remember when we started marketing
ice creams, we just took to the rural
market. We thought that we dont have to
concentrate on the cities because the cities
have so much competition. We took a stand
that if we are able to convert even 10% of
the sweet eating habits into ice creams,
we were looking at volumes which would
require us to treble our ice creams capacity
and run 24 hours, even then we would not
be able to match up to the demand. So the
market is huge and the numbers are mind
boggling.
Nirav Momaya: It is not practical to use
cold chain outsourced solutions for smaller
consignments and JIT requirements. This
eventually impacts the whole life cycle
and growth of the frozen product since
it does not make it to the B2C level at an
affordable price and nominal effort from
all stakeholders. The regular problems
continue such as pest & rodent control,
lack of sanitation & hygiene at your
neighbourhood store, local unions for
tempos and labour, unable to get the most
economical options and forced monopoly,
poor planning of warehouses designed
as per older requirements loading and
unloading efficiency, parking, hours of
operation, security, etc. The cold chain
needs to evolve and requires eventually
a taxi aggregator type of option available
to make the whole process systematic,
transparent and economical.
Girish Pai: Infrastructure has been one of
the biggest challenges that the industry is
facing today. Absence of adequate power
supply, poor road conditions, connectivity
Girish Pai
Director,
Kamaths Ourtimes Ice cream Pvt Ltd
with the hinterland, as well as availability

of skilled and trained employees are acting
as major hindrances for the growth of the
segment. For me, the bigger challenge
lies in the mindset of people who dont
want to change and experiment with
newer technologies and equipment.
Food products should be given priority
in transportation as these are perishable
goods, which is not the case right now.
This scenario is true for any mode of
transportation be it rail, ship or air. Keeping
these challenges aside, the segment has
lot of opportunities for one and all. If the
cold chain infrastructure gets improved,
then there will be lesser wastage of food
and fruits & vegetables from the farms to
consumers. This will result in availability of
food in abundance. Consequently inflation
can be brought down to a certain level. As a
result, there will immense opportunities to
produce bi-products.
Sudhir Shah: Frozen foods business in any
country is fully dependent on the support
from cold chain facilities. The cold chain in
India is in nascent stages of development.
The segment is largely dominated by fly-bynight suppliers and small businesses with
poor networks. Due to frequent handling
and transfer, chefs have to wait their
turn in longer delivery cycles as suppliers
try to reduce their costs by combining
multiple deliveries on a route. Poor roads
and unreliable transport systems have an
adverse impact on costs and uncertainties.
Non-availability of infrastructure, like cold
chains affects certain product categories
significantly. Even if the cold chain is
available, power problems add to the
uncertainty. For example in the ice-cream
business, if the ice-cream melts even
once because of the non-availability of
14/06/2015 05:41:40 PM
ROUNDTABLE
power, the quality in general and the
taste in particular, of the ice-cream are
adversely affected. Most Indian cities
face power problems in summer and
ice-cream manufacturers have to live
with these problems in their distribution
network. Having said that, the segment
also offers lot many opportunities. There
is already a growing demand for frozen
foods in India today. An increased policy
support from the government in terms of
investment for cold chain projects, import
duty reductions, preferential taxes as well
as 100% FDI in cold chain facilities, will see
more private sector investing in supply
chain infrastructure (cold chain, storage,
preservation and better transportation)
and skill development.
Tech advancements
Pradeep Chona: Use of GPS system for

vehicle tracking, better quality of insulation,
better information flow, zero accidents,
places to rest for drivers may be known and
communicated to name a few.
Anuvrat Pabrai: In terms of the cold
chain supply chain, all the necessary
advancements such as GPS, temperature
monitoring, vehicle tracking, even the
remote monitoring of temperatures, etc.,
are available in India. But the problem is that
only a limited number of large companies
are able to implement or invest in such
technologies. Smaller companies are still
not able to adopt new age technologies. Its
going to take time for the old technology to
get weeded out and the new technology to
come to the fore. These are the challenges
when a country is growing and is passing
through such a rapid expansion phase.
The old will automatically get upgraded.
Ultimately those who dont modernise will
perish.
Nirav Momaya: Digital temperature logging
throughout the process, GPS tracking of
vehicle, consignment tracking provided
by solution provider, cost-effective freezer
on wheel (FOW) options vs. refrigerated
truck load., for e.g use Maruti EECO with
FOW are some of the latest technological
solutions available for the industry.
Sudhir Shah: For procurement, new
technology has been developed i.e.,
precooling system in order to keep food
fresh. In dairy sector, several BMC (Bulk Milk
Cooler) have been provided to the farmers
to chill milk immediately after milking.
Refrigerated trucks/refrigerated tankers/
insulated tankers, refrigerated railway
wagons/refrigerated cargo have been
developed to transport the materials under
controlled temperatures. Cold storage and
warehouses have been developed to store
the materials at controlled temperature.
For retailing the materials, deep freezers
are developed. This way, the entire value
chain has been getting tech updated.
Keeping up with the innovative spirits
Pradeep Chona: Not much is done as

far as innovation is concerned even the
equipment used are also based on old
technology. Its better if we can have cold
storages facilities in growing/producing
areas wherein availability of power may be
an issue, we need to find out cost-effective
alternative energy sources like solar for
cold rooms. We can look at western world
like the USA, Germany or Japan for better
mapping, forecast systems, etc.
Anuvrat Pabrai: Around 8 years ago,
we were mainline ice cream company
competing against brands like Amul,
Vadilal, Kwality Walls, etc. We were doing
exactly what all these companies were
doing. We were marketing to the same
set of distributor dealer network across
eastern geography.
In 2008, we decided to shift our focus
to natural ice creams of premium quality.
We went in for direct distribution to the
customers. If my client is a 5 star hotel,
they could directly reach out to me or
my franchisee in that city. So the entire
distribution strategy changed. We are
operating our own or franchisee run
Ice cream parlours. Instead of being a
Me Too product, we decided to make a
niche product which was being made by
a handful of people only. Within that, we
tried to create a range of products, which
no one else in the country was making
and are still not making. We are making
varieties of ice creams such as cuisine
based ice creams. For instance, if there is
a Japanese restaurant, we will give them
Japanese flavours like Black Sesame,
Mocha Green Tea ice cream, etc. We tried
to pair ice creams with food and we were
very successful. We approached the high
end hotels & caterers and the high quality
stand-alone restaurants.
Today we are very strong company
technologically. We have a very unique skill
set within our company. Being from the food
technology background, having worked in
the hospitality sector, I understand what
exactly goes in when the food is prepared.
I have worked with the Taj Group of Hotels.
That gave me a unique perspective, which I
used to the best advantage by creating ice
cream flavours and choices based of my
experience of how food would be paired
with ice creams. This is a skill set which
is not available with many people in the
country.
We have taken a very innovative
system of cold chain management. We
dont use any refrigerated trucks for our
transportation. We dont have C&F agents,
distributors & dealers. It is a direct company
to franchisee business. We use either air or
superfast trains to transport ice creams. We
use insulated boxes and dry ice, which has
a temperature of around -70. Ice creams
in dry ice packing, can sustain themselves

for approx. 24 hours. By that time, it
reaches the destination. If ice creams are
air freighted, it only takes about 5-6 hours
to reach the destination but its definitely
more expensive.
Girish Pai: At Natural Ice Cream, instead
of using flavour and colour, we use only
fresh fruit. Thats our USP. We boil milk
to an extent, that it gives us the thickness
and consistency, desired for making ice
cream instead of using cream & butter to
increase thickness. In our ice creams, you
will find only three ingredients milk,
sugar and fruit. We also need to realise
the fact that there are limited quantities
of fruits available in the market because
we require huge quantity for production,
so we have attempted fruit fusion such as
papaya-pineapple, pina-colada. We have
also attempted to bring in innovation in
terms of introduction of tropical fruit which
are rarely known such as jackfruit, musk
melon and coconut. These ice creams are
very different to produce, so we consider
ourselves as pioneers in this segment.
Sitaphal and tender coconut are our
signature flavours. For removing sourness
from ice creams, we have brought in new
age machinery. This way we have been able
to reach a certain level of automation and
manpower has substantially been reduced
in the shop floor. There are lesser chances
of errors.
We supply daily to each and every store
because we believe in serving fresh. We
dispatch products 365 days because this
is our commitment to the stores. When
we take franchisees, we make it a point to
train them first in our existing stores. We
train the owners of the franchisee as well
as all the employees. We have developed
a mock ice cream parlour in our factory
in Mumbai for the same. We give them
live demo on the customer behaviour, the
challenges that can be encountered in the
future and how to deal with them. We are
focussing a lot on cleanliness of the stores
as first impression is the last impression for
customers. Thats why we are not planning
a big bang expansion. We first want to run
the existing stores efficiently and then go to
the next level. We first perform trial before
starting a store as far as managing logistics
is concerned. Till the time, we dont have
full-proof logistics; we dont open a store
anywhere.
The need for skill development
Pradeep Chona: As majority of cold chain is

with unorganised sector, skill development
is very poor, resulting into more operational
costs and ultimately losses.
Anuvrat Pabrai: A franchising operation
requires a lot of skills because you are
transferring a successful model and
multiplying your outlets manifold. So if
14/06/2015 05:41:41 PM
ROUNDTABLE
I am running one ice cream parlour and I
find that I can run it successfully, I replicate
that successful model through franchising.
Thats what worlds best food chains such
as McDonalds, Pizza Hut and KFC have
done. The biggest requirement in this
business is that you should be able to
transfer your skill set to your franchisees
to replicate the success model. If you are
able to do that easily and properly, your
franchisee operations will be successful.
Not only that, you have to train them and
most importantly motivate them to deliver
the desired results. How successfully you
are able to train, select and sustain the
relationship with your franchisee will define
your success or failure. Its not always easy
because on paper someone may look
good but when it comes to the basics of
understanding the way your business needs
to be run, that person may not be able to
translate into reality.
Nirav Momaya: The key is developing the
right attitude for sensitivity to temperature
control, hygiene, FSSAI compliance, timely
delivery and effective communication.
Especially in F&B space, order delay is
not acceptable as it is demand driven for
immediate consumption (due to lack of
adequate back-up cold storage space &
limited shelf life).
Sudhir Shah: Cold chain is identified
primarily with fresh farm produce, whereas
processed fresh and frozen foods require
skill and other resource utilisation. So,
skill development of handlers as well as
operators is necessary. Appropriate skill
sets are intrinsic to cold chain since such
services involve product and cargo specific
inputs and continuous attention. These
skill sets are in addition to those needed in
ordinary supply chain.
Girish Pai: Skill development has been a
bigger challenge for us. There are many
lucrative options available for people
these days, so they dont want to prolong
their stay in this industry. This is what
we have realised over the years. The
moment they get trained, they move on
to other businesses. I have started the
practice of job rotation and have given
them work as per the liking. As this being
a highly unorganised industry, there is no
contractual agreement between us and the
employees. This mindset has to be changed
to bring it to the level of other industries.
Your wish list from the government
Pradeep Chona: Proper cold chain

infrastructure requires more funds.
Government should provide soft loans and
an easy single window clearance. Condition
of roads also has to be improved for the
success of cold chain. Its time to have No
Octroi. A task force needs to be brought
into place, which will ensure zero accidents.
Nirav Momaya: Remove all tempo and
loading labour unions from industrial

properties and make it an open efficient
market. Further incentivise companies
to invest in various segments of cold
chain transportation, storage and
other value added services. Simplify
interstate regulations C form, Way bill
and other documentation formalities. The
government should promote the process
of online documentation and approvals.
Reduce the bureaucracy and inefficiency
at tolls. Lastly, there should be simple and
transparent rules vs. interpretations.
Sudhir Shah: Service tax exemption
benefit is not applicable to modern cold
chain services. The government should
include cold chain activities and not cold
warehousing alone.
Girish Pai: There should be an ease of
doing business. We should have freedom
to procure any goods from anywhere like
the APMC barrier should be abolished
completely.
Achieving energy efficiency while

attaining targets
Pradeep Chona: Various techniques are

available and being adopted & deployed by
the industries as its an expensive resource.
Energy efficient means can favourably
impact profitability, e.g., solar energy
driven resources and technology may play
a vital role as well.
Anuvrat
Pabrai:
Energy
efficiency
is a product of technology. Earlier
the temperature of air conditioners
was controlled by thermostats. If the
temperature was achieved, the thermostat
would switch off the air conditioner and
it would come back on as soon as the
temperature rose to a preset level. Now
air conditioners run on inverter based
technology wherein the speed of the
compressor is increased or slowed down as
per requirement of cooling. This results in
electricity savings up to 60%. It is possible
to apply the same technology to cold
chains or refrigerating vessels for carrying
temperature sensitive materials over long
distances. Its just that its not popularised
in the country.
Nirav Momaya: It will come only with more
economies of scale. Imagine cost savings
in terms of fuel efficiency, multiple trips
if we had better highways, intercity roads
coupled with better traffic management
and could actually say average of 60 kms
per hour!
Sudhir Shah: The energy consumption in
India is the fourth biggest after China, USA
and Russia. The total electricity generated
in India during the financial year 2014-15 is
1043 billion Kwh, which excludes electricity
generated by renewable energy sources
and the captive power stations feeding in
to the utility power grid. All India per capita
consumption of electricity is nearly 957
Kwh during the financial year 2013-14. By

adopting latest technology and innovative
procedures & equipment, energy efficiency
can be achieved.
Promising prospects ahead
Pradeep Chona: Industry is going to grow

with the corresponding growth in other
sectors like retail, processed food and dairy.
Anuvrat Pabrai: If you include the
unorganised sector, we should ideally get
10% + growth year on year. The future is
very bright and promising.
Nirav Momaya: It is much needed as the
demand for frozen products increases.
The ultimate option for a business like us
would be to have easy to use options like
taxi aggregators like UBER, Meru, etc., and
bring the much needed transparency and
balanced opportunity for all stakeholders to
ultimately make the market place efficient
and competitive.
Sudhir Shah: Cold chain has been a major
driving force in the entire perishable food
sector. This is due to the fact that India is
a major producer of perishable foods. The
overall perishable food production in India
is over 350 million tonne. The Indian cold
chain industry is still in a nascent stage with
a large number of small and unorganised
players. However, we are witnessing a clear
shift towards usage of better technology,
equipment and operating processes.
The government has put a high focus on
developing the cold chain in India. This
is a golden time for Indian frozen food
companies to invest in expansion facilities
and develop innovative products. India is
the largest producer and exporter of milk
(133 million tonne), mango (15 million
tonne), banana (29 million tonne) and
beef (1.52 million tonne) where lots of
development in cold chain infrastructure is
required.
Girish Pai: Cold chain is at a very
nascent stage in the country right now.
Lot of investment is required. Newer
technologies have to be implemented.
Skilled professionals are needed. In this
regard, new age entrepreneurs should
take the lead and bring the best in the
industry. The existing systems need to be
upgraded with advanced technologies and
equipment. Inculcating innovative spirit is
the need of the hour. I believe, if we are
able to manage such shortcomings, we will
be able to manage 20% y-o-y growth. The
growing expanse of MNCs is also adding to
the growth trajectory.
14/06/2015 05:41:41 PM
Interview
Cold, Clean,
On-time
Known for developing & sustaining long-term partnership with its suppliers, McDonalds has been one
of the most favoured brands to work with. With its guiding principle of co-creating value for each
stakeholder, the company has grown with its suppliers and suppliers suppliers. In an endeavour to
understand the most complex yet extremely simplified supply chain that goes behind making the Brand
McDonalds peoples favourite choice, Prerna Lodaya met with Mr. Vikram Ogale, Director National
Supply Chain & Quality Assurance, McDonald's India. In this freewheeling discussion, the man behind
the stupendous value chain explained the secret ingredients of delivering freshness from FARM to FORK.
Excerpts
riven by vision of creating a level

playing field for every stakeholder,
McDonald's is the world's leading
global foodservice retailer with more than
36,000 locations serving approximately 70
million customers in over 100 countries,
each day. Celebrating 19 years of
leadership in food service retail in India,
McDonalds first launched its restaurant
way back in October 1996 and today has
a network of over 375 restaurants across
the country while serving over 325 million
customers annually.
While numbers will tell you one part
of the story, the immense hard work
and dedication in bringing farm food to
the plate on time every time is really
commendable. Few companies appreciate
the value of supply chain management
and logistics as much as McDonald's does.
From its experience in other countries,
McDonald's was aware that SCM was
undoubtedly the most important factor
for running its restaurants successfully.
According to the stakeholders, a
McDonald's restaurant is just the window
of a much larger system comprising an
extensive food chain, running right up
to the farms. McDonald's worked on
the SCM well ahead of its formal entry
to India. It actually spent six years to
develop the vast supply chain and
bring it to international standards
before setting shops.
McDonald's success in India has
been built on four pillars: diverse menu
choices across day parts, fresh food, fast
service and affordable price. Intense
competition and demands for a wider
menu, drive-through and sit-down meals

encouraged the fast food giant to customise
product variety without hampering the
efficacy of its supply chain. All this has
been possible by the strong support that it
receives from its chain of suppliers.
Lets take a look at some such best
practices adopted and implemented on
Indian roots by this truly global company
How complex is managing such a gigantic
value chain from farm to plate?
The supply chain begins at the grass root
level, with the suppliers receiving the
fresh produce from the farmers. The crop
is then processed and dispatched to the
distribution centres in special temperature
controlled trucks, which ensures that the
quality of the items is not compromised.
These items are stored in rooms with
different temperature zones and are finally
dispatched to the McDonald's restaurants
on the basis of their requirements.
McDonald's expectation of 'Cold, Clean,
and On-Time Delivery' plays a very vital role

in maintaining the integrity of the products
throughout the entire 'cold chain'.
The supply chain involved at McDonald's
is quite complex. We have a pan-India supply
base. We work closely with all our suppliers
which helps us get a deeper understanding
of the suppliers they associate with. That
spreads the net a lot wider. In a lot of cases,
there are farm linkages. We thoroughly
scrutinise the kind of materials we buy
across three temperature zones, i.e., frozen
at a -18, chilled at 1-4 and then ambient
and dried materials. So all these products
require different temperature monitoring.
We have materials which we buy across
different product categories. We have a
bakery category, poultry, dairy, beverages,
etc. Our purchase actually spans across
the entire food industry. Packaging is again
a separate entity altogether. That adds
to the complexities. Now comes shelf life
management. Depending on the wide
variety of products we deal with on a daily
basis, we have to manage various shelf lives
of products. Because its food, it becomes
all the more critical. So ranging from as low
as low as 5 days to as high as 90 days or
in some case 180 days, we manage shelf
lives of products. Considering all of these,
managing the entire gamut of activities,
and ensuring deliveries day in and day
out on time at all our restaurants and
ensuring no stock-outs, and lastly but
the most important aspect managing
quality, is a mammoth task. We cannot
forget the integral part of the value chain
food safety. All of these add up to the
complexity quotient of the supply chain.
14/06/2015 05:41:42 PM
Interview
But what I have learned by being a part
of McDonalds is that the company has a
unique way of simplifying processes. While
it does appear very complex, the processes
that the company has laid out globally are
so well structured that you can never go
wrong in taking any decision. Right from
farm, we have a very structured protocol
to manage each and every food product.
With lettuce being a very delicate product
to handle, we have taken special care to
maintain the freshness of the product till
the consumption. We have protocol for
every process, be it quality, food safety,
etc. Once all of these processes get laid out
and implemented, it becomes a lot easier.
The way we manage our supply chain is
largely through supplier relationship. We
dont do anything ourselves. We trust our
suppliers that they are the experts in their
domains. They know what they need to do
and hence it becomes far easier to manage
complexities.
What are the critical components that
make up for an exceptional supply chain
@ McDonalds?
The first part is the supplier relationship.
The essence of our supply chain is our
relationship. If you track the history of
McDonalds ever since its inception,
you will realise that there are a few
core suppliers who have been with us
throughout this period of two decades.
They started small and have grown along
with us over the years. They understand
what McDonalds needs. They are willing
to invest in our future. Thats the most
critical element of our supply chain.
Apart from that, one of the key levers,
which helped us become successful, is the
entire cold chain that we have managed
to develop over the last 20 years. About
20 years back, cold chain in India was
practically non-existent. We started
developing the cold chain infrastructure
in the country. The requirements of a
QSR player such as us really varies vis-vis the normal cold chain which needs
the products to be maintained at a single
temperature. We need a different skillset
because we require multi-temperature
facility. We need multi-temperature
transportation also. That kind of an
infrastructure has been created over the
past years.
The third and the most critical element
is a strong emphasis on the quality and

food safety. This is what we have learned
from McDonalds Corporation as to how
to assure precision in quality with such
a diverse supply chain. There are very
stringent systems in place for different tiers
of the supply chain. Being comfortable and
confident in ensuring the food that you
serve has desired quality & taste and is
going to be food safe is the key to success.
Last and the most important is the
traceability aspect. We need to know
are not many written agreements. That is

essentially because the suppliers believe
in what we do and we have been worthy
enough of that belief because we have
acted on what we have said. We have
shown them growth and have actually
walked towards achieving the goal with
them. The McDonalds supply chain is based
on three legged stool where the suppliers,
the company and the franchisees are equal
partners in the entire journey. The concept
of suppliers being partners in the journey
is something which I have really lived in
McDonald's. Everyone brings something to
the table. We provide long term vision to
the suppliers that we will continuously keep
growing. That gives suppliers a visibility as
to where his business is going to be few
years down the line.
We are very upfront and transparent in
a lot of our dealings with suppliers. They
give us the first look on a lot of concepts
that they are bringing to the market. We
get priority because of our relationship
with them. Its an entire ecosystem which
gets developed over a period of time. It also
gets aided by the supply chain processes
that we have. We have a very robust
performance management system to gauge
the performance of our suppliers where
we discuss at a set frequency annually or
in 18 months depending on the supplier on
the analysis of the performance. It is not
restricted to price performance and supply
Before setting up their first restaurant in India, McDonald's infused

around $200mn in the supply and delivery chain. McDonald's
developed local businesses that supply them the products of highest
standards. Today McDonald's has over 40 suppliers with long term
contracts.
everything about the product right from
the farm level produce. The system is so
transparent that even if I want to get the
details on the lot of potatoes for French
fries, their date of procurement and
temperature zones during transit, storage
parameters, agricultural parameters of
that farm, etc., its all available at the click
of the mouse. Thats what gives us the
confidence in providing our customers
fresh products on time every time and at
every location.
Maintaining relationship with suppliers
holds utmost importance in creating
an iconic brand. How do you ensure the
same?
It actually works both ways. As McDonald's,
we have to demonstrate that we are
partners for supply chain of suppliers. We
gave them a vision of the long term and
they believed in that. We have acted on
that vision over the past years. So there is
this saying at McDonald's lot of supplier
relationships are handshake based. There
assurance performance, it includes quality,

food safety, management values, etc. its
a very comprehensive evaluation. Its a
dialogue between us and the suppliers
where we actually identify opportunities
with our suppliers. Every quarter, we have
a business review. In all of these processes,
there is a lot of transparency between us
and the suppliers. Thats what leads to
creating trust. Typically in supply chains,
you will not find so much engagement
with suppliers. Its more of a transactional
relationship. Here we co-create both the
businesses.
What has been the most challenging day
in the life of the SCM Head of McDonalds?
Scalability is a big challenge for us. We
have about 375 restaurants in India. We
hope to scale up to a certain level in 3-5
years time. To ensure that such a gigantic
supply chain is capable of scaling up to that
level, we should have capacities in place
for each category for the next 3-5 years.
We need to have robust quality system to
14/06/2015 05:41:44 PM
Interview
ensure that we are able to manage such
a scale. This will help us in enhancing
risk management capabilities. The other
challenge that we face is that we are
introducing new platforms like McCaf.
Its a different ball game altogether in
terms of the kind of products that are
required, menu introduction, and kind of
scale-up that is required. We have rolled
out 37 McCafs across 6 cities in West and
South India since its launch in October
2013. The scale up there again is huge. We
have a menu roadmap for the addition in
our restaurants that tells us what should
be the menu for the next year. Ensuring
that we are able to deliver what the
business needs is a big challenge. Having
said that, we will keep exploring new
avenues and establishing our footprints
with such new additions.
How do you manage price points?
Theres a lot that goes behind attaining
that. We manage to keep such a price
range for a sustained period of time.
It is actually an amalgamation of a lot
of factors. There is a lot of work we
do on price predictability. One of the
attributes of supply chain is to ensure
predictability of pricing in the market.
Its one of my key goals to observe the
fluctuation in the commodity pricing and
give a predictable price to the market.
That means I would be expected to do
a lot of commodity hedging as well as
manage that risk. Our suppliers also
help us in defining the price points by
FAST FACTS
zz McDonalds came to India at a stage
when the country was opening up to
international brands.
zz Burger was an alien concept, nobody
knew French fries, and eating out was
rare; Coke and Pepsi were relatively
new, lettuce had never been grown in
the country before.
zz There were several challenges
right from having to create supply
chain infrastructure from scratch to
introducing the very concept of Quick
Service Restaurants as we know today.
zz The supply chain operation process
started six years before the debut of
their first restaurant in 1996 in India.
zz McDonalds along with its suppliers
invested over Rs800 1000 crores
($200 million) to set up its supply
and cold chain infrastructure in India
to ensure sustainable sourcing for its
expanding business.
zz McDonalds
interacted
with
agronomists to demonstrate best
practices and empowered farmers
with know-how, technology and
the introduction of new varieties of
analysing market trends. There are long
term pricing protocols that we get into
with our suppliers which essentially
is a 3-5 years arrangement on how
pricing is going to move over the next
few years. While there is an element of
produce like Shepody potato and

lettuce.
zz Initially, lettuce supplies in the summer
and monsoon months used to be a
huge challenge and lettuce growing
was restricted to a few regions of the
country like Ooty and Pune, but now
lettuce growers have been developed
across the country, which ensures a
year round supply of excellent quality
lettuce
zz The IEO segment in India is expected to
surge to US$ 1.2 trillion by 2015.
zz In order to meet with increased
demands, McDonalds has tripled its
capacity over the last three years to
meet needs till 2017.
zz Given the high cultural sensitivity in
India, McDonalds ensures a complete
segregation of veg and non-veg produce
right from transporting the same from
the facility to the distribution centres
and then the restaurants. In fact in
India, their soft serves and all mayo
sauces except Tartar are 100% veg.
zz Today, over 95 % of their products are
locally sourced.
fluctuation in commodity, there are noncommodity costs, which are also factored
into pricing. Once I know in advance
how non-commodity costs are going to
move in future, it helps me decide on the
price points.
14/06/2015 05:41:49 PM
Interview
What are the changes that you have
witnessed in the cold chain infrastructure
in the recent years?
Like I mentioned earlier, cold chain
was non-existent when we started our
operations in India. We have practically
done a lot of developments within the
cold chain infrastructure in the country.
In the last 3-5 years, there has been a lot
of development in the cold chain space.
Huge investments have happened in the
recent years and many more companies are
planning to invest in this space owing to the
potential that this segment holds. Capacity
addition has been witnessing a huge fillip.
While much has been happening in the
urban areas, we will see the investment
happening in the interiors of the country.
Traceability aspect of the cold chain in terms
of managing and maintaining the requisite
temperature throughout the transit, etc.,
has also been gaining momentum.
McDonald's unique 'cold chain', on
which the QSR major has spent more than
six years setting up in India, has brought
about a veritable revolution, immensely
benefiting the farmers at one end and
enabling customers at retail counters to
get the highest quality food products,
absolutely fresh and at great value.
McDonald's, through its unique cold
chain, has been able to, both cut down on
its operational wastage, as well as maintain
the freshness and nutritional value of
raw and processed food products. This
has involved procurement, warehousing,
transportation and retailing of perishable
food products, all under controlled
temperatures.
What are the global best practices that
you have inculcated in the Indian supply
chain model?
The entire supply chain is based on the
McDonalds philosophy followed globally.
The entire corporation is centralised
as far as following rules and values are
concerned. Specifically the focus on
quality and food safety, traceability, quality
assurance in the distribution chain, the
sensory programme, is all been followed
globally.
How do you enhance and ensure
traceability throughout the value chain?
McDonalds uses traceability systems to
record the movement of each ingredient
that goes into making a burger. These help
track the temperature and location of any
product being supplied to a restaurant
anywhere in India, in real time and with
complete accuracy, right down to the batch
and date of harvest or production (tracking
temperature variations as small as 1C)
This ensures freshness and consistency
in the taste of food at McDonald's, but
also sets in place stringent international
standards of food safety and quality,
allowing for specific batches to be

identified, isolated and removed in
instances where there is a discrepancy in
quality standards.
The traceability systems also help in the
implementation of preventive processes
within the McDonalds supply chain, with
significant savings in product waste and
operational resources. With the traceability
system firmly in place, customer can
receive complete transparency and be rest
assured about the freshness and quality of
food at McDonalds.
What are the learnings that one can get by
being a part of the worlds most successful
food chain -- McDonalds?
I have worked across diversified sectors
such as entertainment, food, FMCG,
etc. The requirements of each sector
are drastically different from each other.
larger audience. Back-end integration

will also play a major role going ahead.
Development of agricultural infrastructure
will help take the growth trajectory ahead.
2. Sustainability: We are doing our bit
in this direction. We have back-end
linkages into the lettuce plant. There are
lot of sustainable practices already being
implemented in the agricultural process
such as irrigation practices, crop rotation
technique, etc. This will transform the way
we do business.
3. Information and data analytics: We
are already using a lot of technologically
advanced equipment in our farms. With
the help of which, we can analyse weather
forecasting, weather pattern analysis that
can impact crop production. I believe
it is still at a nascent stage. There is so
much more that one can leverage
through technology.
McDonalds journey toward sustainable sourcing

begins with direct suppliers and extends to a complex
network of indirect suppliers that source ingredients for
menu items. The company recognises that the impacts
of a large, global supply chain are significant. In fact, the
majority of environmental impacts to air, land and water, occur in
the McDonalds supply chain. Thats why the company works with its
direct suppliers who are committed to doing business responsibly in
their own supply chains and making sure that they meet requirements
for ethics, environmental responsibility and economic viability
what they call the three Es.
Yes, its a great learning experience. By
joining McDonalds, I could learn the
tricks of the trade of the vast food supply
chain. The companys supply chain is a
fantastic learning ground. Even most of
us have read about this as a case study
in our management courses. Its a classic
example of maintaining a perfect supplier
partnership. You unlearn a lot when
you join this company to learn various
interesting facets of the incredibly complex
yet simplified supply chain.
What are the three megatrends in SCM
that the country will witness in the years
to come?
1. Infrastructure Development: There is
huge investment lined up in infrastructure,
which will offer a conducive environment
for companies like us. Cold chain
infrastructure specifically will see a
tremendous leap in times to come and
companies will dramatically witness a
transition phase in the way they operate
their businesses. This will lead to increase
in last mile connectivity. By way of which,
a lot more markets will be accessible.
This will change the dynamics of business
for each and every sector in the market
because we will be able to reach out to
What would be your contribution to the

Indian economy?
If you look at our history, McDonalds
was the first company to have brought
the concept of food chain in the country.
Many innovations have happened since
then. The mere concept of burger, the
grade of potatoes used for French fries was
unknown then. A whole new agricultural
supply chain has been developed since
our inception. This developmental
initiative will continue. We will continue
to be engaged with our farmers. We will
contribute towards transferring best
practices to them.
A supply chain veteran with 15 years of

experience, Mr. Vikram Ogale is responsible
for setting the long term supply chain
strategy for McDonalds India as well as
delivering on the operational supply chain
goals. Prior to joining McDonalds, he has
worked with Sony DADC India and Marico
Ltd. Vikram holds a BE in Mechanical
Engineering and a Post Graduate
Diploma in Industrial Engineering, with
a specialisation in Operations and SCM.
Vikram likes to read, loves to travel and is a
photography enthusiast.
14/06/2015 05:41:49 PM
COVER STORY
14/06/2015 05:41:53 PM
COVER STORY
RE-ALIGNING
WHEELS OF
SUCCESS
Standing tall amid competition and claiming prime position requires lot of grit and determination.
More so, when you are trying to find your feet in a male dominated industry. Crusading against all
these invariabilities, Sulajja Firodia Motwani, Vice Chairperson, Kinetic Engineering Ltd, has been an
inspiration for women entrepreneurs. In this exclusive meeting with Rupesh Janve, she gets candid on
her strengths, her vision for future and how she balances her personal as well as professional life
and become an example for others to follow
he may not be an R&D expert

like her father, Mr. Arun Firodia,
but possesses a fairly good
understanding about technology
and how it can benefit customers. Sulajja
Firodia Motwani, Vice Chairman of Kinetic
Engineering Ltd, believes in taking the
path less trodden. A go-getter, she is
not afraid to recreate the wheels of the
game. For her, success is infectious and
change is the only constant. Our various
encounters with this charming personality
has only substantiated the fact that there
is no substitute for hard work. No matter
how lucky you are. You have to prove your
mark and take the legacy ahead because
comparisons are bound to happen.
The same attitude and the passion
is evident once you enter the Kinetic
Engineering office in Pune. With a range of
two-wheelers from Kinetic Luna to Kinetic
Nova parked in the foyer, the glorious past
has subtly married the marvelous present.
These products including Kinetic Honda
were once part of the revolutionary range
of gearless scooters launched by Kinetic
Motor Company Ltd (KMCL).
In 2014, KMCL was merged with
Kinetic Engineering, the parent company,
after it exited the two-wheeler business.
There sits the Vice Chairperson Sulajja
Firodia Motwani and the brain behind
the restructuring of the whole Kinetic
Engineering Group. She is very passionate
about her work as well as values the
importance of relationship with the
employees and says, You should recognise
that you are part of a family and team.
Help various members and try to become
a go to person.
Before we started our interaction, I
recollected the history of the two products
Kinetic Luna launched in 1974 and
Kinetic Honda launched in 1984. These
two models revolutionised the gearless
two-wheeler business in mid-70s and
mid-80s. Kinetic Group was pioneer in
introducing the Luna, the cheapest twowheeler ever sold in the Indian market and
Kinetic Honda, which transformed mobility
for women. As Sulajja says, We grew up
with Luna and Kinetic Honda. These were
revolutionary products. I am proud to be
part of that legacy that was painted by my
father and grandfather. She was also the
first proud owner of the Kinetic Honda that
was launched in the Indian market.
A Thoroughly Determined Personality
Sulajja was determined to take the family

business forward even before she went to
the US to pursue her MBA from Carnegie
Mellon University. Even before I went
to study in the US, I was clear in my mind
that I would like to be part of the twowheeler business. So I didnt have any other
thought in my mind that I want to work for
any other product or any other business.
I was passionate about the two-wheeler
business, says Sulajja.
She worked with BARRA International; a
global technology investment firm based in
California before joining the family business.
In those four years, Sulajja understood
practical difficulties that would come up
while operating a business.
So when, Sulajja joined the Kinetic
Group, the Kinetic Brand that was created by
her father and grand-father, Mr. HK Firodia,

during License Raj, was under risk. The sales
of the mopeds were declining and their
JV with Honda after the launch of Kinetic
Honda was not moving forward. When she
was handed over the baton to lead from the
front, it was a challenge for her to maintain
the legacy and drive the business. It is your
responsibility to keep the legacy as sacred
as you have received and build on it. And of
course business changes, life changes and
you have to modernise it. Sometimes you
have to destroy to re-create. We should also
be able to take it forward but it may not be
what it was but it is your responsibility to
create new things, she says.
That is what happened, when she joined
the family business in 1996. She became
the Joint Managing Director of KMCL.
Within a year of her joining, Kinetic Groups
partnership with Honda Motor Company
was on the verge of break-up, while the
moped segment, was shrinking. Honda was
not giving new models as it wanted to enter
the Indian market on its own and as a result
business was stagnating. Similarly, due to
Honda-Hero Groups tie-up, Kinetic Group
was not allowed to enter the motorcycle
market, states Sulajja.
It was time to take a difficult decision
for this newly appointed Joint MD of KMCL.
The motorcycle segment had grown
rapidly, but we were not allowed to get in
to it. So we had missed that bus. We had
become a strong brand but a sub-optimum
player in terms of volume. Further the
(moped) segment we were in, sales were
shrinking. We had to break away with
Honda. It was a very difficult part, Sulajja
14/06/2015 05:41:54 PM
COVER STORY
adds. Kinetic Motors sales were further hit
after Honda launched the Activa scooter in
the domestic market.
A fire fighter by nature, Sulajja had to
take critical decisions to save 40 year old
business. It was not an easy task. We had
a two-wheeler business which was very
successful. It was almost a 40 year old
business. We had factory, we had labour, we
had lot of investments but when the markets
change, you had to relook at everything.
Entire Kinetic Group restructuring was a
crisis, she recollects.
Post the exit of Honda in 1998, Sulajja
forged alliances with Italian manufacturer
Italjet SpA, with Taiwans San Yang Motor
Co. Ltd (SYM) and launched scooters like
Kinetic Nova, Kinetic Marvel, ZX Zoom
and Kinetic Italiano Blaze, among others.
However, the sales did not pick up.
In the process, Kinetic Engineering Group
took an important decision led by Sulajja to
give up majority stake in KMCL to a company
who has strong rural brands, rural network
as well as financial wherewithal that even if
there is a loss in the business, it has appetite
to digest it and that is where Mahindra &
Mahindra (M&M) came in and we forged
a partnership with them in 2009, Sulajja
explains. Through this deal, the Kinetic
Engineering Group managed to retire some
debt and the fortunes took a U turn.
systems and components through JVs

with worlds leading companies, she
informs. At present, Kinetic Engineering is
manufacturing and supplying components
to corporates like Tata Motors, Piaggio,
Polaris and American Axle, among others.
Kinetic Engineering has also entered
into a JV with Belgium based Ikaros Solar
Group to provide customised solutions and
Soon the launch of Kinetic Safar, an electric auto developed by

Kinetic Greens, will mark Kinetic Engineering Groups reentry into
the automotive market. Kinetic Greens expects to sell 50,000 units in
couple of years after the launch.
After selling 80% stake to M&M, KMCL
was merged with Kinetic Engineering.
In 2014, Kinetic Group further sold its
remaining 20% stake in Mahindra Two
Wheelers to Samena Capital for Rs182
crore, thus exiting the two-wheeler business
that was created by the Firodia family. Soon
Kinetic Group will be debt free.
Bearing Fruits of Tough Decisions
Today, Kinetic Engineering is bearing the

fruits of the aggressive strategy adopted
by Sulajja. Kinetic Group has successfully
recreated the Kinetic Brand and has
forged alliances with international groups
in automotive systems and components,
infrastructure services business and is
looking at new opportunities to introduce
new products & services under the Kinetic
Brand. Kinetic Engineering is focussing on
the powertrain business, while the group
has formed a JV with Ducati for auto
electrical systems and JV with Taigene for
automotive motors. Other group companies
like Kinetic Technologies is focussing in
the area of tool design & engineering and
Kinetic Communications in engineering
services & electronics side. We are also
exploring opportunities in automotive
cater to low capacity solar photovoltaic (PV)

installations of 20kWp to 1 MW. Through
this JV, Kinetic Engineering expects to
address the power deficit issue across
the country. Sulajja also struck a deal with
Koreas Hyundai Elevator Project Company
as well as FGTecnopolo Advisors to
develop technology for infrastructure and
communication sectors.
Soon the launch of Kinetic Safar, an
electric auto developed by Kinetic Greens,
will mark Kinetic Engineering Groups reentry into the automotive market. Kinetic
Greens expects to sell 50,000 units in
couple of years after the launch. We are
early players in green mobility segment.
This will bring us back in the automotive
segment, which we had exited with the sale
of two-wheeler business, says Sulajja. The
Kinetic Engineering Group is determined to
support the Central and State governments
to achieve the last mile connectivity. With
the launch of Kinetic Safar, we aim to help
the government at the Centre and in States
to achieve the last mile connectivity as well
as Make in India campaign.
A Full Circle
According to Sulajja, life has come full
circle with the launch of Kinetic Safar in the

automotive product category. Our family
was pioneers in Make in India when we
started as Bajaj Tempo, Luna and Kinetic
Honda all these products were made
indigenously. My father and grandfather
went around the world and brought
world-class technology to the country,
developed suppliers, taught them advanced
technologies deployed globally. They not
only developed our products but were
instrumental in developing the automotive
ecosystem. So for us Make in India is a
second new chance. It is very good vision
of the Prime Minister Mr. Narendra Modi,
she adds.
The whole concept of Kinetic Safar has
been developed by Kinetic Greens at their
R&D centre in Pune.
Kinetic Engineering Group has also
developed the supplier base for the threewheeler from India, Taiwan and China.
We have developed the supplier base for
Kinetic Safar in India. The vehicle would be
developed at the companys Ahmednagar
plant in Maharashtra. Kinetic Greens has
invested around Rs10 crore in developing
the three-wheeler. Kinetic Engineering
Group has introduced electric powered
buggies and golf carts to be sold to golf clubs
as well as for tourism purpose. At present,
we are selling 200 buggies per year. By 2016,
we plan to sell 50,000 electric auto and 400
electric buggies. By next year, it will make
our business worth Rs600 crore, she says
with total conviction. Kinetic Safar has been
priced at Rs1.25 lakh (ex-showroom Pune).
According to the Vice Chairperson, the cost
per passenger is Rs6-8 per km as opposed
to normal rickshaw. The company is also
developing dealer network for the products
across the country.
Fostering Talent Management
Kinetic Engineering believes that the

country can grow on the strengths and pillar
of economic progress if jobs are created
for younger citizens. India is still a low cost
base country and companies around are
looking at us as a country where the cost
is low and products are well engineered.
If Chinas expertise is in mass production,
Indias expertise lies in engineering. We
are not into mass production as we do not
have appetite for building huge factories
and make huge investments, but still
India has upper hand in developing well
engineered products and large domestic
market. I am a believer in Make in India
and create jobs in the country, she says.
On the academic front, Sulajja was a
bright student. Her name appeared in
the toppers list in the SSC examinations
and HSC examinations. But she never
wanted to become an engineer and
continued with her sports. I could have
easily been an engineer, I chose not to
be because I wanted to play badminton
14/06/2015 05:41:56 PM
COVER STORY
by delegating time to the most important
priorities, schedule her work and build
systems & support network at home as well
as in office. I like to stay fit and exercise
regularly, she says. Sulajja is a high energy
person, who loved sport during school as
well as college days. While in school and
college, I used to play badminton and
do gymnastics, I was practically part of
every school sport team. But now, she
has shifted her preference to adventure
sport. I have got into adventure sport just
because I enjoy it. I enjoy adventure sports
like scuba diving, skiing, sky diving, roller
blading and long distance running like
marathon, she tells us with joy.
Striking a Perfect Balance
FIVE THINGS SULAJJA FIRODIA MOTWANI BELIEVES IN

1. Purpose and Commitment: Believe
in what you are leading and if you
dont then you are not leading.
2. Hard work and conviction: There is
no alternative to these aspects.
3. I believe in instinctiveness:
Because many times there are no
clear answers, so you have to take
decision based on instinct. My father
is a very instinctive person.
and not give up on sports at that time.
So I do feel that I could have been an
engineer but in that case I would have
been a different person, she reminisces.
Sulajja got support from her father, Mr.
Arun Firodia, who believed that even if
she does not pursue engineering, she can
be a good business woman. I was playing
badminton at national level and wanted to
4. People skills: These days, it has

increasingly become more important
as you have to work with younger
people and diverse group of people
working with you.
5. Knowledge & understanding as to
when to pull the plug: You should
know when to pull the plug before
the matter escalates to become a
bigger problem.
give time to the sport. My father felt that
I was good at managing business and he
encouraged me to do it.
Even after working for over 10-12
hours daily, the Vice Chairperson of Kinetic
Engineering Group successfully manages
her role of being a mother, a wife, daughter,
daughter-in-law and professional. She
strives to create a positive work life balance
On the family front, Sulajja married

Manish Motwani whom she met while
studying in US. After marriage, Manish
moved his base from Hyderabad to Pune.
At present, Manish is the MD of JHS
Taigene Electrical Company Pvt. Ltd., and
is associated with over half a dozen other
Kinetic Group companies. As a mother to
10 year old Siddhant, Sulajja believes in
giving freedom the same way she received
from her parents.
It is interesting to know that Firodia
family is very fond of food and delicacies.
But whenever they sit together for lunch
or dinner, business is their food. Sulajjas
mother is an exception. Invariably we
discuss business whenever we meet. Even
when we meet for family dinner my
father, brother (Ajinkya Firodia) and me,
we do business talk. But my mother is a
doctor, so she is the only saving grace,
Sulajja says fondly.
In her career spanning over 18 years,
she has learnt that whenever you enter
into a joint venture, be cautious and always
have a contingency plan in place if the
partnership trips. Earlier joint ventures
were like a long-term relationship, say
like a marriage, but now we look at JV as
a contract and not as marriage because
both partners have their own business,
their own ambitions and agendas. You
have to be practical, so that you can plan
for the future and have contingency plan
in place in case the JV ends, she adds.
Having established herself in a male
dominated industry, Sulajja loves to see
more women working in the sector. In
the end, a proud mother and a successful
entrepreneur, who has been awarded
several times, would like to continue the
practice followed by her parents and grandparents of focussing on serving the country
and its people rather than focussing on
profit. The idea is to bring comfort,
convenience and mobility to the people
of India. So when you do something that
is good for the society, automatically your
business benefits from it, she concludes.
14/06/2015 05:42:01 PM
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14/06/2015 05:42:03 PM
Interview
Procuring To
Perfection
Automotive supply chain is one of the most crucial and by far the most challenging value chain to
manage. While many innovative measures have been taken globally as well as in India, the key lies
in creating transparency and trust. The recent interaction with TAB Barathi, Vice President (SCM),
Wheels India Ltd (TVS Group) substantiates this very fact and he shares the importance of investing in
supply base as well as in bringing about technological advancements with Prerna Lodaya. Excerpts
How does the auto ancillary supply chain

work? What are the unique challenges
encountered by you?
There are two elements that constitute
by far the most challenges in automotive
supply chain automotive OEMs and Tier
I & II companies.
As far as OEMs are concerned, they
buy everything from their ecosystem of
suppliers and assemble those products.
Very few products are being manufactured
by them in-house. While Tier I & II
companies manufacture everything by
themselves and are suppliers to OEMs.
Because of large ecosystem of suppliers,
there is a huge scope of manoeuvrability
possible for OEMs in terms of price
reduction or scope for improvement.
Even if a fraction of improvement comes
from each one of the vendors, there is a
big cascading effect. This is the biggest
advantage for any OEM. It gives him a
lot of muscle and lot of scope to go for
improvements but that needs a large
number of suppliers to be taken care
of. Some of them could be capable and
some of them may not. Some of them
may be dedicated suppliers and some of
them may not be dedicated to one OEM.
Nevertheless the onus is on the OEM to
bring in technology changes, which is in
alignment with the suppliers technology
capabilities. So thats one area where
supply chain comes as a very big vehicle.
In case of automotive, the inbound supply
chain constitutes about 60-65% of value,
which is a large potential.
Supply chain has to be in consonance
with the technological changes and
enhancing the capabilities of the whole
value chain. When we talk about the
distribution side of the chain, it has got

multiple challenges. You cannot have
multiple plants. The efficiency of supply
chain comes into play in distributing at the
right place and at the right time.
The efficiently managed supply chain
will be able to offer value to you. It has got
two components one is at the right time
and the best way of doing it. If you look
at Tier I & II companies, these companies
manufacture everything except for some
companies who assemble components.
When its assembling, there are multiple
SKUs involved. That gives you a leeway
to manoeuvre. Even if you bring in a
fraction of improvement in everything,
there would be tremendous benefit
for the whole value chain. In some of
the companies, the manufacturing
functionality holds importance where
efficiency of productivity is taken into
consideration.
For outbound side of Tier I, there is
little peculiarity. Tier I company can only
be located at one place. These companies,
in essence, must be suppliers to multiple
OEMs. Today the thinking has changed
that every OEM wants the ecosystems of
suppliers to be near to him. In fact they
want it within their own complex. This
can happen only for dedicated Tier II &
III for an OEM. A larger Tier I cannot be
present everywhere. In this case, you lose
the scale of production. If you are going

to make 1 million pieces at a particular
place, which is subdivided into 4 different
locations, you are lost. The overheads
would go up, as a production unit, you also
need inputs, and you will be withering out
your strength. There is a bit of dichotomy
coming up that OEMs have a different set
of priorities, whereas the priorities for Tier
I & II companies are different.
Having said that, lot of things have
changed in the present times. Lot
of initiatives have come up towards
enhancing the entire value chain.
Please explain the concept of aggregate
buying and how has it helped in
streamlining supply chain network?
Aggregate buying has two components
attached to it aggregate buying within
multiple locations of the same company
or aggregate buying within the group
companies. In fact it was initiated in
2003 for the Group. We have many
manufacturing companies, when we
aggregate our volumes, it helps the
group. Every company has certain
established practices. It was a
mammoth challenge for us to
bring about a consolidation across
companies. This means downsizing
number of suppliers. We gave fair
chance to every supplier. We identified
14/06/2015 05:42:06 PM
Interview
items which could be consolidated, right
from the raw materials to computer
peripherals. We scanned through the
products bucket which could go for
consolidation. That created a base for
this concept. We gave certain guidelines
whether we buy one or 10,000 units, the
service levels and the quality levels have
to be the same. Cost was not prime motive
we were dealing here even though thats
an offshoot. We had put a major thrust on
the service level at the very start. This has
really benefitted us a lot. Lot of suppliers
couldnt match up to our expectations. In
fact our preferred suppliers have taken
it as a pride. Now whenever they meet
any other customer, they proudly say
that they are supplying to us since last 12
years. This obviously gives them a head
start. We have an informal group of heads
of people. We did primary administrative
negotiation. Based on that, individual
companies take the process ahead. There
is an apex group which monitors the level
of activities. The good part is that the
supplier doesnt need to go to 40 people.
It has helped both the parties in terms of
technology advancement. At a micro level,
within the same company, if I am at 5
different locations, in that case, wherever
the commonality could be harnessed, we
did that. It is helping everyone. In fact,
today every large organisation has started
implementing the process.
What are the best practices in material
procurement?
For me price comes the last. Customer
is important but one must realise that
maintaining relationship with the suppliers
is one of the biggest crucial factors to win
the race. At the same time, you have to
understand that trust is developed over
a period of time. If I have three different
suppliers, I lose the synergy and trust.
Believe me supply chain principles are
moving towards enhancing trust among
suppliers. It helps in investing in your
supply base as well as in bringing about
technological advancements. With such
trust level, any supplier will be dedicated
to you. He may be supplying to 5 different
companies and he knows that you are
100% dependent on him. In essence, try to
create your supplier base as your strength.
Thats one of the biggest transitions we
are witnessing today.
Kindly share with us some of the
innovative SCM practices implemented
and adopted by you.
We have initiated the group aggregating
concept, which helps in consolidated
procurement management. We have
mostly eliminated procuring liquid oils
for machines/operations in drums and
selling the empty drums. We have a
replenishment system with suppliers, who
replenishes the oil as and when they reach a

certain level in replaceable and returnable
containers. We are continuously working
with suppliers to achieve maximum yield
levels in raw materials.
Maintaining a transparent supplier
relationship is key to success. Your views
on the same.
There is no product across the world
which can be an exclusive domain to
someone. The differentiator comes from
how you make it. If you look at it from
this perspective, 90% of any industry
Maintaining relationship with

the suppliers is one of the
biggest crucial factors to win
the race. Supply chain principles
are moving towards enhancing
trust among suppliers. It helps
in investing in your supply base
as well as in bringing about
technological advancements.
In essence, try to create your
supplier base as your strength.
Thats one of the biggest
transitions we are witnessing
today.
is common across, the differentiator
is the remaining 10%. I never call
anyone competitor, after all, we are
collaborators. The reason is that the
same supplier supplies to two different
companies. Nowadays, no company is
talking about windfall profits. The best
engineering companies dont make more
than 7% profits. To attain that high profit,
the companies have to toil. The principle
behind this is that every supplier at the
end of the day has taken care of 5 or 7%
profit margin. The vendor says that let us
be transparent I am not going to touch
upon your profit margins. I have 93% to
manoeuvre with. Let us jointly work. The
first principle of management is never
leave money on the table. Supplier and
the vendor have to figure ways to reduce
irrelevant cost and put it to better use.

If we can figure ways to do innovative
packing such as returnable packing or
no packing at all, these two parties can
very well share the profits rather than
investing on packing. Working with
the supplier is the gist of an emerging
supply chain. Unless the responsibility is
percolated throughout the chain, nothing
works. This can be enforced by building
trust and transparency in doing business.
For instance, the stupendous success
of e-commerce companies is achieved
only by bringing in all the stakeholders
on one platform. Online is only a tool,
someone manufactures a smartphone
and that has to be picked up by some
company for delivery and ensure timely
dispatch. What exactly is happening? The
manufacturing of the smartphones has
not changed. Only the flab in its supply
chain from the factory has changed.
Instead of going to different dealers, it
now reaches online, which has become
a great marketing tool these days. The
inefficiencies among supply chain nodes
actually makes a product expensive,
which is not at all beneficial for the
producers as well as customers alike. In
order to reduce the inefficiencies, supply
chain needs to be shortened and made
more effective in the longer run. Make
it near, the best practice lies in bringing
the producer and the consumer near. It
will take a longer time but the times of
change have arrived.
How can we attain a green supply chain?
Green is an urgency surely but the trick
lies in understanding the nuances well.
It is a must but do people feel it? The
answer is a big NO. Because as long as the
resources are available, I have no qualms
in doing it. As long as I am capable of
getting it, I wouldnt mind. This is human
nature. It can only be possible by bringing
in cultural change and when we are forced
out of resources. Supply chain should take
this aspect very stringently. Let us take
an audit of resources. One of the classic
case is packaging. We need to think as an
industry to find ways in which the package
itself can be used as a utility, which not
only helps in removing irrelevant cost, but
is also sustainable in nature. We have to
cut down the areas of wastes in every act
of ours. Suppliers have to be trained. Its a
mammoth task. Look at all the processes
with minutest of details to reduce waste.
I would say we are not 100% successful in
doing that, but yes we are on the path to
progress to being green. This comes from
the compulsion of our own cost pressures.
There has to be an awareness and a
training module to teach the importance
of going green. Carbon credit was a rage
a few years back. Now nobody is talking
about it, everyone has accepted the fact.
14/06/2015 05:42:07 PM
Interview
GREEN is a big movement. Let us not go by
the rhetoric, let us go by the practice.
We need to think as an industry

to find ways in which the
package itself can be used as a
utility, which not only helps in
removing irrelevant cost, but
is also sustainable in nature.
We have to cut down the areas
of wastes in every act of ours.
Suppliers have to be trained.
Its a mammoth task.
Skill development need of the hour?

My first impression would be that skill
development per se is pathetic. In
Tamil Nadu, we have around 200,000
engineering students graduating every
year. Not even 10% are capable of
employment. First of all, we are not
imparting proper skillset in colleges. Skill
development has become a must today.
We do it in three ways for the actual
operational people, we have a training
centre, which is a common training centre.
Functional training is being imparted
there after assuming job. Second is we
have a clear methodology for induction of
people on various elements of supervisory
aspect. To a limited extent, these
initiatives are successful. We have tied up
with various institutions and associations
to harness employees skill sets. Some of
the knowledge sharing happens from the
cross learnings among group companies.
Still we have a long way to go.
fully.
zz Understand the supply market.
Knowledge of the supply market helps
in deciding the strategies.
zz Have different strategy for different
product group. Cultivate supply base
accordingly.
zz Evaluating and enhancing the levels of
supply base, on a continuous basis, is a
crucial success factor.
zz Create a complete trust in the
ecosystem.
What are the 5 steps towards attaining a

full-proof supply chain?
zz Understand the product thoroughly,
its relevance to the operations. The
necessity of the specification and the
application need to be understood
What crucial role can supply chain play in

making Make In India a success?
In the process of Make in India, the supply
chain sector will have a lot to contribute.
Some of the major factors to consider
would be:
zz SCM should focus on technology driven

supply chain and harness the potential
power of technology.
zz It should look at cutting down wasteful
cost in the overall perspective of the
product cost. (i.e. considering only
the production cost of a product is no
longer viable. Considering total cost of
operation, throughout the life cycle of
the product and beyond is the key to
success.)
zz Enhancing
community
network
and sharing of technology input/
information is very important. This
would help the MSME sector in a big
way.
zz Look for collaborative Innovative
technologies within India and harness
its home grown potential.
Mr. TAB Barathi is a Graduate in Mechanical
Engineering & has a Post Graduate Diploma
in Management. He completed his Bachelor
of General Law and is an international
Diploma Holder in SCMP from International
Trade Centre, Geneva. He is a CPSM
(Certified Purchasing & Supply Manager)
from ISM, Arizona, US & Certified Supply
Manager from IIMM, India. Having more
than 30 years rich experience in various
industries, he has held different positions
handling multiple functions and continuing a
long tenure in supply chain management.
FSCs twin wins at the

CII Scale Awards 2015
Future Supply Chain Solutions Ltd (FSC) won the CII SCALE
Award 2015 in the 3PL and Retail/Industrial Warehousing
category. After a stringent shortlisting process, the
shortlisted companies had to further make a presentation
in front of the jury. The felicitation ceremony was held in
Chennai on May 22nd.
This was the 2nd edition of CII SCALE Awards organised
by CIIs Institute of Logistics. Shri. S. Ramesh, Chief
Commissioner Customs, Chennai and
Mr Bhaskarachar, CMD, Ennore Port; attended as the Chief
Guests at the function. The aim of the Awards programme
is to encourage and acknowledge organisations that have
successfully implemented best practices in supply chain.
14/06/2015 05:42:11 PM
Interview
Experience the
BIG POWER
OF SMALL
We believe in keeping our customers first, innovate continuously, with deep adherence to external and
internal compliances & proactive working, informs Vinod Srivastava, Director - Integrated Operations
- Lenovo INDIA, during an interaction with Prerna Lodaya. Excerpts
What crucial role does supply chain play
in making sure that Lenovo sustains the
leadership position in the market?
Supply chain is the place of final conversion
of what was intended by the customer and
sales organisation. A competent supply
chain is the foundation to assure continued
trust from customers & strong top and
bottom lines for any business.
Lenovo assures not only the foundation
is built but also the same is strong enough to
delight the customers. The timeless indexes
of cost, quality & delivery need to be kept
at the best. Customer preferences are well
understood & worked to assure the best
fit to the requirements on responsiveness,
quality & cost.
Transparency & strategic partnership
with vendors, logistics providers &
customers bolster your relation and long
term association for mutual success. Right
management systems & high internal and
external collaboration assures a dynamic
and situation specific balance between
flexibility and scale with greater inventory
optimisation & cost efficiency.
Lenovo has been termed as one of the 10
Best Supply Chains in Asia Pacific. What
are the essential aspects that make up for
an exceptional supply chain at Lenovo?
Peace of mind for customer is the key
mantra. Lenovo supply chain connects
directly and closely to understand if the
customer is really appreciative of day to day
execution. Openness to change, incremental
refinements everyday added with bold
strategic re-modelling of physical and fiscal
network are few highlights that have helped
us build a strong supply chain engine.

We customise, we can synchronise our
systems to follow what customer prefers
between speed, cost and flexibility. To
illustrate the fact, we have a very different
supply chain model for consumer when
compared to the enterprise. The parameters
like flexibility, cost, responsiveness,
inventory & product features are differently
regulated based upon the needs of specific
customer segment.
Our attitude to accept the change and
feel excited about the change is what got us
where we are.
According to you, how can we create a
world-class supply chain model?
The basics dont change. There is no special

formula but I believe below are the critical
few in building up something great.
Know your customer well: This is the most
important step, else the organisations end
up putting their valuable efforts in wrong
direction & finally delivering mediocre
results. Many a times, you face variations
in requirement by several set of customers
you deal with. Find a way to connect with
them & design the best possible variety of
processes without losing much on scale.
Develop methods and processes for your
teams to be in touch with them regularly.
Keeping 100% transparency with customer
generates enormous trust & space for
you to build a collaborative synergy with
customers for the better. Loss of delivery
commitment is lesser an issue compared to
loss of trust.
Establish right Indexes to measure: Look
at what you are monitoring as supply
chain performance parameter. Ask yourself
whether Being at the best of what you are
monitoring - 1) Will delight customers or
not? 2) Will benefit your organisation for
either revenue or bottom line or not?
Be bold to drive a change: If the answer
is NO to both the above, then do not be a
victim of monitoring what you really do not
believe is a benefit.
Be Resourceful: Have direct dialogue
with customers & assure their perception
is taken for reality. Understand end to
end factors impacting cost, quality and lead
time. Put technology, modern analytical
techniques to use. Make intelligent
investments. Appropriating team structure
to develop right gravity at front-end with
14/06/2015 05:42:14 PM
Interview
everyone to generate new ideas and work
to implement those with their own hands
irrespective of which function they belong
to. Programme reached organisation wide
through Intranet. We saw not only great
innovations but also higher excitement,
greater team collaboration and astonishing
progress in teams creative thinking.
Lenovo built up capability to view
integrated INVENTORY pipeline including
goods lying in market, lying within Lenovo
and which are still planned to produce
sitting as parts. For industries having large
distribution chains, stocking at multiple
locations, such analytics can prove to be
a big game changer. This can drastically
improve market intelligence, cash flow,
demand planning & liability management.
customers & at back-end with suppliers is

important.
Drive strategy & encourage innovation:
Ensure that a well aligned annual strategy
to business priority is built for supply chain.
Find solution to small and big issues. There
is never a no-solution. Dont neglect the
power-house of incremental improvements
but to get to the best outcome you need a
strategy aligned to business goals.
Be careful to not jump into steps of
strategic alignments if your current supply
chain is running in to daily firefights. Fix the
basic first using first two steps mentioned
above.
Kindly highlight some of the innovative
supply chain measures taken by you.
Lenovo strives for exciting internal and
external customers with innovative
approach. To highlight a few:
Building 100% transparency in Order
execution: Customers are provided with
on-line access to see which stage their
orders are in. They are updated with mails
and facilitated with several methods of
their convenience to inform about when &
what would happen about the order they
have placed. Technology is deployed to
respond in few seconds for anything that is
asked by customer about their orders.
Lenovo Core channel 2.0 & THINK Circle
programs have been very unique: They
have not only helped us promote close
partnership & trust with our customers but
also made us proactive in our action. The
programme focusses on identifying the key
customers, assuring regular dialogue with
them and acting deep upon their feedback.
These programmes are not confined to high
level discussions but are very effectively
translated to actions on ground.
Another great success if I could describe
is an initiative named SMALL will be the New
BIG initiated last year. The programme was
to value small ideas, encourage organisation
wide creativity, provide opportunity to
Supply chain network optimisation holds

the key for future. Your views on the same
and how can one attain the same?
There is no end state when you can say
you have an optimised supply chain model.
The strategy for supply chain optimisation
needs to evolve from time to time
depending on the prevailing situation and
the change that you see in market scenario
induced by various customer expectations
and competitor moves. I do not recall a
single year when the supply chain teams
felt now we are done with it and there is no
If you are able to clearly visualise above

three, it is easy to convince management
to invest within the framework of business
growth, available cash & risk taking
capability of the organisation.
What are the emerging trends to watch
out for?
Online: Powerful e-commerce is already
making its deeper presence in B2B and
B2C in India. This is growing at significant
pace. Your business might have a segment
of such customers desiring to be enabled
on B2C/B2B. It is important to connect to
such needs and be ready to deliver to this
upcoming mega change.
Everything on Internet: It is important to
recognise the trends in new generation.
They are connected to everyone through
Internet. This opens up a big opportunity
for supply chains to directly hear from
customers, understand them and inform
them.
Changing government policies might
drive lot of your decisions related to
manufacturing base and warehouse
infrastructure. Need of the hour is to stay
actively close to evolving government
policies and framework to attract localised
manufacturing, localised sourcing &
simplifying tax structure. Lack of this
foresight might land you to less competitive
Lenovo supply chain connects directly and closely to understand if the

customer is really appreciative of day to day execution. Openness to
change, incremental refinements everyday added with bold strategic
re-modelling of physical and fiscal network are few highlights that
have helped us build a strong supply chain engine.
more room for change. Actually there have
been greater opportunities every year than
previous year to save cost, improve revenue
or build up a new competitive edge to add
value. The game is who takes bigger jump
every year, YOU or the COMPETITOR!
If I try to frame, the three steps which can
lead to supply chain optimisation are:
zz Assure a great opportunity for everyone
to innovate & find ways to motivate the
whole organisation. Assure your team
believes in whats called BIG power of
SMALL.
zz Study industry and competition to
estimate if the supply chain network
model that you have is the best fit or not
and find ways to build an edge which
would delight customers. Its critical to
foresee how this transition would lead
to another model in next few years and
proactively plan for it.
zz Plan and regulate your investments in
infrastructure, team structure and talent
pipeline in a way that it would keep you
much ahead on performance delivery
but with lesser hit to costs. Prioritise
basis ROI framework. Dont try to do
everything.
product costs, erosion of bottom lines, or

land in to wrong investments.
Changing face of demand planning:
Online era would bring deeper & speedy
understanding of customers changing
needs. Right set of technology and
management system could make demand
visibility easier. There might be a need to reengineer & invest in your demand planning
processes. The information can flow faster
than any time in past, analytical engines &
techniques are becoming more powerful
and customers are becoming more and
more demanding, but on other hand
online era is providing more opportunity to
easily read them and make better demand
judgments.
What are the criteria on the basis of which
you select a 3PL?
Financial capabilities, Infrastructure to
support hired services, proven experience
& cost competitiveness are the key
criteria. We observed longer strategic
partnerships where there was more cultural
synchronisation between us and the 3PL.
We believe in keeping our customers first,
innovate continuously, deep adherence
14/06/2015 05:42:15 PM
Interview
to external and internal compliances &
proactive working.
We want to choose our vendors who
share common belief with us. We feel it is
important to assure right level of flexibility
and discipline. For example, frequently
showing the rule book to customers is
not a good idea. Processes are meant to
delight the customers and they need to be
treated like our cool friends. We expect our
3PL to be using enough of technology to
assure us long term efficiency and speed of
execution.
Your views on greening the electronics
supply chain
Lenovo is committed to being a responsible
and active corporate citizen, consistently
working to improve its business while
contributing to the development of society.
Lenovo has been a member of the Electronic
Industry Citizenship Coalition (EICC) since
June 2006. The EICC Code of Conduct
is a code of best practices in supplier
engagement that provide guidelines
for performance and compliance in the
following five key areas: labour, health and
safety, environment, management system,
ethics & supplier engagement.
As an EICC member, Lenovo has adopted
the EICC Code of Conduct. We have
implemented a Supplier Self-Assessment
Questionnaire (SAQ) for Tier 1 production
suppliers, and we require supplier plant
sites to undergo audits from EICC certified
auditors. We also conduct these activities
for Lenovo and our facilities. Lenovo
leverages its membership in the EICC
to collaborate on industry issues such
as conflict minerals and environmental
sustainability. We support an industry
approach to address the conflict minerals
issue.
As a responsible corporate citizen,
Lenovo is committed to providing
leadership in environmental affairs in all
of our business activities and supply chain.
For the supply chain, Lenovo plans to
continue its support and participation in
the EICC Carbon Reporting System. Lenovo
embraces the benefits of this industry tool,
which include increased awareness within
the supply chain of carbon foot printing
and the ability to improve supply chain
performance.
As part of Lenovo's supplier engagement
process, we continue to engage our Tier
1 suppliers, seeking to strengthen their
commitment to EICC by signing formal
contract amendments. Around 97% of
Lenovo's Tier-1 production suppliers
have agreed to comply with the EICC
requirements. Currently, approximately
80% of Lenovo component spend suppliers
have completed self-assessments and/or
third party audits.
Lenovo continues to optimise its global
logistics programme to expand product
volumes to be shipped using methods that

are more environmentally friendly, such as
ship and rail. The company is also working
closely with its logistics partners to ship
products responsibly.
Kindly cite us an example of extreme
supply chain managed by you
I would like to recall the first ELCOT
orders that we served to the entire state
of Tamilnadu. It was one of its first kind
for us in terms of size, short demand
visibility, and product customisation and
delivery complexity. Close to about 300,000
customised PCs were to be delivered to
several schools spread across Tamilnadu. It
was a challenge to scale existing knowledge,
understanding customer preferences and
infrastructure in such a short time to meet
these requirements.
The size of the order challenged us. We
resorted to proactive demand planning
with judgmental elements like assessing
the risk on delivery and risk on part liability.
This is around the time when the
Thailand flood hit the PC industry creating
global shortage of hard disks.
Establishing new facility in short time
and ramping that up to meet technical
inspection requirements from customer
was a testing time for us. Order processing
and delivery planning for efficient
distribution to all schools and colleges in
several districts, collecting delivery receipts
from the authorised signatory again posed
challenge.
Organisation
wide
collaboration,
problem solving, speed and right
assessment of risks to make decisions
made us deliver the whole project very
successfully.
How crucial is the concept of reverse
logistics in your line of business?
Every corporate plays a major role in
addressing the growing green concerns.
So there is no second thought as to why
reverse Logistics is important. Especially in
the wake of smartphone, tablet and smart
TV sales going up, the customer returns are
amplifying. Dealing with reverse logistics
will help maximise the asset recovery and
reduce cost as much as possible. One key
fact is that e-waste is the fastest growing
municipal waste now in mature countries
like the US and India will be no different
sooner. So, playing a role in supporting a
greener future is important and crucial.
What are the tech tools implemented by
you in SCM?
Entire Lenovo runs on SAP. We have built
several satellite tools to bring speed and
friendly online experience for internal users
& external customers.
To mention a few: a) Lenovo Order
Tracking System (LOTS) is an online portal
available to customers to track their order
on almost real time. b) E2E inventory

tracking tool (BIMS) is providing integration
of channel and Lenovo systems to manage
better inventory and analysis of sales
trends, c) Sub-region supply planning
system is rolling up the field intelligence
to refine demand planning at a regular
interval.
We have our warehouses and billing
centres fully equipped with RF scanning
and security systems. We are electronically
online connected with our key supply chain
partners to avoid any inefficiency in our
transactions.
How is Lenovo taking measures to ensure
continuous skill development?
Opportunity to develop skills and putting
those to work forms the base for any
organisation to succeed. Lenovo provides in
having a strong global framework to address
these aspects. OHRP (Organisational
Human Resource Planning) assure every
manager engage to build succession plans,
job rotations and talent grooming. IDP
(Individual Development Plan) process
provides opportunity to discuss job skills
and leadership strengths of each individual
to leverage along with opportunities to
improve. Facilitations are done to improve
leadership and job skills using external
training interventions, on-job relevant
exposures and mentoring.
Your views on the promising prospects for
Indian economy
The growth prospects are indeed promising.
Asian Development Bank (ADB) predicts
India to surpass China to be at 7.8%
growth in current fiscal year and expects
to move up to 8.2% in the next fiscal. IMF
(International Monetary fund), Stanchart
predicts 7.7% for FY15-16 revised from
earlier forecast of 6.3%.
Prime Ministers reform plans and
intents of economic reforms are a great
start. Success of Make in India initiative
from government has strengths to improve
supply chain efficiency and enable more
choices for Indian customers.
For Lenovo, India is one of the most
important markets across the globe. We
are very much excited about the emerging
developments.
Mr. Vinod Srivatava has over 20 years
of diverse exposure in the industry. He
brings his expertise from manufacturing,
plant operations, project management,
procurement, logistics, supply chain network
modelling, inventory management &
product management with a deeper flare for
business & customer orientation. He is an
Electronics Engineering graduate from NIT
Surathkal. He has been recognised internally
and externally for his extra ordinary work
and transformations in the field of supply
chain and manufacturing.
14/06/2015 05:42:15 PM
Interview
ENROUTE 3As
CCESSIBILITY,
VAILABILITY &
CCURACY
With the guiding mantra of customer right and customer delight, Wellness Forever, is set to change
the dynamics of pharma retail in the country. In a free-wheeling conversion with Mr. Gulshan Bakhtiani,
Co-Founder & Director, Finance & Strategy, Wellness Forever, Prerna Sharma explores the very many
facets that would define the scope and prospects of pharma supply chain in times to come. Excerpts
ellness Forever is just not a

pharmacy, but it fulfills the needs
of community pharmacy with
wide range of medicines along with product
categories like wellness, beauty, personal
care and other items of daily necessity.
Round the clock services, availability of
qualified pharmacists and experienced
customer care executives to council the
customers are among the few qualities,
which sets apart Wellness Forever from
other service providers in the category.
Wellness Forever is probably the first
pharmacy retail chain in India with fully
integrated, cloud based, state of the art
software with customised modules to
offer strategic advantages over industry
competitors. The data output of software
is crisp & crunched in finest business
intelligence tool known as Qlikview which
also widely used by industry giants like GSK,
Nestle, MSD, etc.
It did not take too much of thinking
to understand that company desperately
needed a central warehouse and that
could solve the problems mentioned
above. However as the journey was
taken, company realised the advantages
of bringing facilities such as shop level
efficiency, availability of genuine medicines,
reduction of cost, reduction on manpower,
control on retail operations, transparency
on data and reports and most importantly
overall command on business.
It was an essential game changer and a
Company operated) outlets as well as start

franchising from Oct, 2015. Recent dialogue
with the founders of the company opened
up various interesting aspects of pharma
SCM. Take a look
great enabler for franchisee business and

therefore the company was completely
focussed to start a state of art, fully
computerised distribution centre.
Thus the company has opened Zero
Error Distribution Centre (ZEDC) with
ground clearance size of 56,000 sqft and
overall development size of 100,000 sqft
at Bhiwandi, Thane. The distribution
centre acts as an infrastructural and
supply chain backbone of the organisation
with international accreditation and is an
industry Showcase. The company plans
to open more COCO (Company owned,
What prompted you to start a pharma

retail chain?
There were many need gaps in the
way existing pharmacies operate. The
pharmacies in India are characterised by
occupying a small area, which is really
not sufficient to store large amount
of medicines. Secondly cold chain
management has been a big issue in terms
of storage of medicines be it diabetes
products, vaccines, temperature sensitive
products, etc. Each pharmacy typically
will have a small refrigerator and different
products will be stocked randomly. Third
important issue was that preventive
medicines are not easily available in the
country. These factors put together made
us believe that we should start something
which is not only easily accessible by the
customers but also widely available across
the country. This way we are also trying to
build trust for the pharmacy community
because today if you dont deliver on time,
you will lose your customers and in case
of pharma, it is all the more critical. We
realised that there is not one-stop shop
kind of a pharmacy retail chain. This was the
genesis behind starting Wellness Forever.
Precisely, providing right medicines, which
14/06/2015 05:42:18 PM
Interview
have been stored correctly, has been an
underlying mantra to start such a chain.
Our vision is to create a chain of
branded pharmacies (including hospital
pharmacies), which will deliver to the
unmatched performance in availability
of products, lowering healthcare cost,
offering value added services and on top of
all, its a human approach to business. Our
mission is to create Indias most respected
chain of pharmacies & wellness stores by
the year 2020.
By starting such a retail chain, you are
bringing pharma companies one step
closer to customers. How do you plan to
leverage on such a business model and
expand exponentially?
Officially the initiation of Wellness
Forever was in Feb, 2008 but the vision &
mission was deep rooted decades back
by three young entrepreneurs. Retail
chain pharmacy is considered as a sunrise
industry in India. It is still in its nascent
stage and has tremendous scope to grow
in the future. At present in India, there are
approximately 25 chains with total outlets
aggregating to 3000.
In India, Wellness Forever is first one
and unique retail pharmacy model, which
stocks & sells wide range of pharmaceutical
& wellness products in customer friendly
self-browsing format.
Traditionally local pharmacies in the size
of 150 to 300 Sqft having their limitations in
terms of number of products, cannot fulfill
all the requirements of pharmaceutical and
wellness category. Thats why, organised
retail chains keep their pharmacy sizes
ranging from 500 to 1000 sqft to keep wide
range of medicines and other wellness
products under one roof.
Today after six years of inception,
Wellness Forever stands tall with the
network of 60 retail pharmacy outlets,
which includes 55 convenient pharmacies
and 5 hospital pharmacies. All 60 Wellness
Forever retail pharmacies are being
professionally and efficiently managed
by pool of 1300 skilled and talented
professionals, which includes 250 qualified
and registered pharmacists.
By doing so, have you substantially
reduced the entire value chain?
Customer right and customer delight were
the guiding principles behind the inception
of our brand. Pharmacy is such a business
where you can never go wrong. It has to
be 100% accuracy assured. Customer right
is all about making accurate medicines
available to customers easily and on time.
Today most of us would find chemists
delighting customers by way of giving
discounts or offering them certain value
added services. Other value added services
can be incorporated once the business is
established and there is trust built.
What are the loopholes in operating such

a business and what are the unique ideas
implemented by you?
When you know that there are more than
one lakh SKUs, so if any pharmacy claims
that they will have all the SKUs stored at a
place, it will be an overstatement because it
is very difficult to achieve. However, we are
committed to that fact.
When distributors keep inventory, the
data doesnt get consolidated at one place.
If a product is not selling at one branch,
it immediately goes to another branch.
If a product is near expiry in 10 branches,
to predict the demand pattern. We kept

our inventories such that it optimises our
availability. Lastly we built up a sharing kind
of a system wherein a product might not be
available at one particular store, but at hub
level, all one lakh will be available. Suppose
if a particular medicine is not selling at a
particular store and there is a requirement
of the same medicine in some other store,
then the medicine can be dispatched to that
store. This way the availability increases
manifold and the customers get medicines
on time. The system is so transparent that
it can be understood by a store manager
Wellness Forever ZEDC is Indias first completely automated state-ofthe-art facility, keeping with best in global standards, and is the new
paradigm of looking at pharma logistics and warehousing. It also
allows full facilitation for web/online sales and franchising. The ZEDC
will employ over 200 skilled professionals at the facility.
it has to be circulated to other branches
before it expires. That kind of intelligent
optimisation has to be done. More than 70%
of pharmacies are not even computerised.
So the real-time information about the
expiry date of medicines is not available.
The key lies in preventing or minimising the
losses and reaching the consumers on time.
When it comes to pharma, refrigeration is
extremely important. In Tier II & III cities,
first the electricity problem needs to
be solved before going for any big bang
changes.
To mitigate these errors, we run very
high level of intelligence. Based on which
the paradigm will tell us what are the
items that we should keep such that we
are able to predict the consumer demands
and be able to meet them before time.
Even if I keep 100,000 units in my store,
only 10,000-14,000 SKUs are going to
be sold. We started running this system
easily. Based on the data availability, the

store manager can inform the customer as
to when at the earliest the medicine can be
available to him.
Kindly elaborate on Zero Error Distribution
Centre (ZEDC) and how is it going to
revolutionise the warehousing space for
pharma in India?
Our challenge was to make all the products
available quickly and at one place. So we
wanted one place where all the products
are available. Because all over Maharashtra,
if we are going to depend on our vendors,
who will have their own set of limitations
as well as different levels of commitment
to business. So, if all these inefficiencies
start accumulating into our system, then
there is no way we can offer availability. So
we realised that ownership of back-end is
a must. Thats how we came to conclusion
that lets segregate our purchases. People
14/06/2015 05:42:23 PM
Interview
do it from the view point of getting higher
margins, we did it from the perspective of
changing our process. The process has to
be zero error. There are ordering errors,
picking errors, packing errors. In order to
avoid inefficiencies, technology has to be
brought in, processes have to be made zero
error. Investment has to be made in the
area where human beings work, computers
are monitoring them and when computers
work, human beings are monitoring them.
We have tied up with C-Square Software to
develop a state of the art technology for us,
which in my opinion, even if you want to
attempt an error, it will not allow you. It has
to be that full proof.
Keeping that in mind, we recently
launched ZEDC, a completely automated
state-of-the-art warehousing facility for
pharma, lifestyle, wellness, FMCG products,
strategically located in the logistics park
near Bhiwandi on Mumbai-Nashik highway.
Supply chain management and efficacy
are critical aspects in pharmaceuticals as
it affects human lives, giving no scope of
errors. Our ZEDC is Re-designed to Redefine the same.
Spread across over 1,00,000 sq. ft., the
technologically advanced facility will cover
companys supply chain for Maharashtra.
It is designed and equipped with
future ready technologies with entirely
automated back-end. Addressing industry
inefficiencies related to SCM and cold-chain
management, the new facility has been
launched with an aim of providing error
free distribution, increase dependability,
provide complete ownership of back-end
operations to improve supply chain and to
eliminate any possibility of spurious drugs,
as well as optimise efficiency with punchto-pack time of less than 1 hour.
The Centre has two separate jumbo-size
walk-in cold rooms spread across 40,000
sqft of ambient temperature equipped
with advanced cold chain infrastructure to
efficiently manage storage and supply of
temperature sensitive products including
vaccines, anti-cancer drugs, biological
products and blood products.
Steps towards designing a full-proof
pharma SCM
The first and foremost is cold chain
management,
which
includes
air
conditioning of the warehouse, then cold
room advancements, and then the last
mile distribution. A highly efficient supply
chain will determine your success quotient
in the long run. Cold chain management
is very essential as far as pharma
warehousing is concerned.
Second is batch number specificity. In
FMCG, 100,000 tubes of Colgate means
100,000 tubes of Colgate. But in pharma,
if there are 20 batch numbers of Crocin,
then there are 20 different items. This
aspect requires a lot of attention.
to that idea, then you win half the battle. In

my business, it is like, right medicine, right
time, every time.
Third is IT system, which is applicable

to any sector. You have to deploy state of
the art software system to be consistent,
accurate and agile in your business
operations.
Fourth is manpower training, which is
crucial for any business to run successfully.
In my opinion, all these aspects put
together would aid in developing a future
perfect supply chain.
Skill development need of the hour
Every business professional will vouch for
the fact that if I am not able to utilise my
employees skills in the productive manner,
I will not be able to run my business
efficiently. Having said that, it just doesnt
come purely out of sheer own benefit. We
make sure that our employees get to learn
and experience so many newer facets of
business while being on the job. We, at
Wellness Forever, are focussing a little
more than skill development. We term it
as proficiency development. Pharmacy as
a profession has not really evolved. They
have not done adequate work in such a
manner that people should be able to
differentiate one pharmacist from another.
We are wanting to develop such a scenario.
We need to make a person realise what he
is qualified for, what is his role supposed
to be in the community and how he
should go and claim it in the community.
It is way beyond working on soft skills or
communication skills.
Whats your mantra for success?
My experience has taught me only one
thing in life that commitment is extremely
necessary for any business to be successful.
No matter what it is, how small it may mean
to someone else, but if you are committed
How do you see pharmacy retail chain

shaping up in the years to come?
Retail chain pharmacy has bright future
since the customers can get all the required
medicines at reasonable rates. By easing
FDI norms in multi-brand retail and opening
up door to global chains such as Walmart
and Tesco, India will see an exponential
growth in retail chain pharmacy sector.
Worldwide there are remarkable
changes in disease pattern from the last two
decades where in number of patients are
on higher side in lifestyle disease category
as compared to infectious or general
diseases. As of now, the disposable income
is gradually increasing; young generation is
spending a huge amount of their income in
personal care and wellness products.
India, being a developing country, the
economical growth is rapidly increasing
and multiple kinds of businesses are
emerging which makes an ideal platform
for retail companies to grow and have a
booming business.
Whats your roadmap for future?
We believe that retail organised pharmacy
business is going to remain a largely
vernacular business in near future because
fundamentally operations will organise but
socio-cultural factors remain same. So, in
every region or state, strong pharmacy
retail chain will emerge. Wellness Forever
has chosen a path of growth in next 3-4
years, majorly in western region and metro
cities of India.
We are going to have planned organised
growth. We are not targetting 10,000
pharmacies in two years. We will be
growing at an additional 250 pharmacies
in 2-3 years. We believe that pharmacy
is manned by pharmacists who need to
be trained. We have to make sure that he
understands processes thoroughly and can
ensure zero error operations. Our objective
is to grow in Maharashtra in the next 2-3
years. By that time, we expect FDIs would
be allowed in this sector and that would
open up many more opportunities for us
in times to come in terms of M&As, local
consolidations, etc. Thats our plan to reach
out to an all India footprint.
Mr. Gulshan Bakhtiani is a science graduate
and started his pharma career as a medical
representative. Gulshan, before starting his
retail store, was the Area Sales Manager
with a leading Indian pharmaceutical
company. He has built his operations by
carving a niche in bio medical products and
hospital supplies. Gulshan has more than
20 years of retailing experience and has an
extensive knowledge in orthopedic implants
and diagnostic products.
14/06/2015 05:42:25 PM
FOCUS
Eyeing Future
Perfect Value
Proposition
Modern supply chains have made a paradigm shift away from vertically integrated supply chains with
functional boxes. There is a holistic convergence of multi-channel, integrated and synchronised value
chains, informs Lionel Stanton, Interim Projects Director, Future Supply Chain Solutions Ltd.
upply chain solutions must be end

to end processes, based on the
internationally recognised SCOR model
(Supply Chain Reference Model) from the
Supply Chain Council.
Route to market is the key. It affects
time to market, costs, inventory levels,
availability, and hence sales.
The companys supply chain is its
competitive edge, so how can all this be
achieved?
Working with Constraints
There are many constraints, including
infrastructure, roads including inner
city, last mile connectivity power, etc.
Developers form sites by buying small
farms, parceling them together, and then
apply for change of use. This takes time and
can get political. Then comes availability of
manpower, which includes the labour pool,
lack of skills, knowledge, experience, lack of
awareness, non-industrial background, lack
of systems and technology vendors with
local support, availability of equipment and
most importantly, how do you move from
disorganised chaos to being structured,
organised, and disciplined.
My approach is simple manage through
the constraints, accept them, go through
them and just get on with it, otherwise
you will never do anything, you become
paralysed. There are these underlined
basics that one must follow:
zz Develop an Indianised solution based on
best practice using what is available
zz Start with the basics
zz So, you do not have a Warehouse
Management System? Then invent a

manual version of control.
zz You cannot find stock? Then sort it out,
lay it out, basic location system, get
some racking and a location system
zz You dont have a put to light system?
Then design a process to do it manually
zz Be innovative, inventive
zz Put controls in place; you cannot manage
what you do not measure
zz Lay out the warehouse with logical flow
of material
zz Coach warehouse managers to manage
a modern warehouse
zz Think lean, 5S, process.
Change Management Approach
Managing the big new sheds is not easy.
Things get lost, because old Raju cannot
know where everything is anymore. They

require disciplined procedures and well
organised management. New start-up
disciplines have evolved in Europe through
the same problems. Learning from early
mistakes is important.
It is not necessary to automate
everything, technology applications depend
on volume and range. But there are these
golden rules that one should follow:
zz You cannot automate a system, unless
you can work it manually first.
zz You need to prepare the company before
importing a system. How can you set up
a complex WMS unless you can tell it
what you want, and how you want it to
do things?
zz You have to map processes, this means
defining the processes first.
zz You cannot control and manage stock
without a location system, location
numbering mapped in the system. Even
then, with a system it is no use unless you
have a management team that knows
how they should manage a warehouse.
zz It is essential to design and plan a very
strong change management process
environment, supported by good
training, project management disciplines
and techniques. You cannot just set
up these big sheds and expect them to
work.
zz Buy-in is essential at all levels.
zz Stock accuracy is the foundation of all
warehouse management.
Warehousing and transport are only the
meat in the logistics supply chain clubsandwich. Supply chain development with
Typical Goals
Faster time
to market
Total cost
reduction
Operations
excellence
Least cost
to serve
Commercial
effectiveness
Availability
improvement
14/06/2015 05:42:26 PM
FOCUS
vendors, and with category buyers and retail
must be aligned. Dialogue, communication,
analysis and top management support are
essential in this environment. Whether
improving existing or designing new,
conventional or automated solutions, the
guiding principles and the approach are the
same.
Start with the basics, work from first
principles. Get the stock right, map & locate,
label, take stock.
Then improve the warehouse layout,
improve the infrastructure, shelving,
racking, MHE, and warehouse management
and reporting system.
warehouse solutions, the solutions designer

needs to have a constantly updated data
base of knowledge of all the technology
available and at the same time understand
how to apply it. One must always try to keep
it simple, and automation is not necessary
until large volumes are reached. At the same
time, the designer must have knowledge
across all the supply chain sectors.
Then he needs a holistic view of the
business, products, volumes, range, and
lead times, to enable him to engineer a
solution from the analytical modelling of the
business need. Very often, the final solution
is simulated with real order data, to make
sure it works, and there are no bottlenecks.
opportunity to transfer that technology

to another sector. Sorting machines, for
instance, were originally developed by the
post office for parcel sorting. Now we use
them for picking e-commerce, and store
replenishment.
E-Commerce boom is also challenging
conventional routes to market, with tighter
service levels, multiple sources of stock
to control, and variable customer base.
The big difference between a store order
and an e-commerce order is that Stores
are fixed locations of limited number,
placing large orders on a regular basis.
E-commerce orders on the other hand, are
random locations, with a large number of
The Approach to Solutions Design
very small orders.
This follows the same steps each time:
What about 3PL? (3rd Party Logistics
Modern systems have been developed
zz Data collection, intelligence gathering,
Contractors)
to enable both the retail and e-commerce
getting data on SKUs, sales throughput,
If you do not have the resources, and
orders to be satisfied from the same
stock.
want to outsource your non-core business
stock, at the same time the order can be
zz Analyse and model the data to generate
services, then there are plenty of 3PL service
satisfied from either the nearest store, or
a statistical model of the warehouse
providers, but take care, keep control, own
the warehouse. This is what we call Omnirequirements
the head lease and capex if you can. Make
channel, and it poses significant challenges
zz Engineer alternative solutions, utilising
sure that you specify exactly what you need,
to the value chain logistics, in both the
appropriate technologies
and what you want from the contract. Fix
warehouse and the delivery service, not
zz Evaluate each solution
the KPIs. Employ at least 1 senior logistics
to mention the warehouse management
zz Choose solution the best solution to meet
professional.
systems and stock control. There is no doubt
the business requirements
that this is a large and rapidly
Improve end-to-end Value Chain performance
zz Write specifications for building
growing segment of the modern
and equipment
supply chain.
Align Strategy, Operations & Workforce
zz Develop designs, layouts, etc.
The next big challenge is how
zz Tender for infrastructure,
can manufacturers and modern
equipment, systems
retailers penetrate the base of the
zz Execute the project with project
pyramid- the micro-kirana market?
Design Source Make Move Sell Service
management and financial
How can we use the best of
controls.
modern supply chain, and blend it
to traditional trade? Product offer,
Solutions MUST BE TOTAL End to
pack size and affordability are the
Improve specific processes
End Solutions
starting point.
Your thinking must be joined-up,
I think that modern logistics can
from supplier to customer, with
bring huge benefits upstream, with
the warehouse as the hub. You cannot
What should a 3PL Offer?
the strength of traditional trade for the last
design a warehouse without knowing how
Globally, retail has been a key growth driver
mile. The volumes upstream will be huge,
stock is ordered, how it is delivered, lead
for the logistics industry and India is no
hence economies of scale are possible, and
times, volumes. You must understand how
exception to this phenomenon. The growth
we have the technology!
the customer needs you to deliver. The
of organised retail has created demand
It all adds up to a hologram of technology,
processes in the warehouse must be joined
for specialised logistics services, wherein
sector knowledge, end to end thinking, and
up processes, from inbound to outbound,
every retailer relies on strong logistics and
the convergence of everything to make an
as a continuum from delivery to dispatch.
warehousing infrastructure for the success
efficient value chain, from which all sectors
The warehouse design must be In line with
of its business. This is the main rational and
can benefit.
the business model and supply chain from
driver for 3PL services. It should allow the
manufacturer to customer.
business to focus its resources on its core
Solutions come from business profiles
business.
using analytical techniques, knowledge of
The 3PL is expected to have domain
Lionel Stanton has 40 years of experience
in warehouse planning and design,
the industry, knowledge of the technologies
expertise, and to provide customised
consultancy and line management. He
available, and putting it all together from a
services & solutions to deliver orders in-full
has been responsible for design, build and
hologram of available knowledge.
and on-time. Multi-user warehousing and
start up project management in companies
transport services can bring lower cost, and
like, ASDA, New Look, Mothercare, as well
as companies in Portugal, Netherlands,
Build for 5 to 10 years Planning Horizon
low risk entry, from shared infrastructure.
and Russia. Lionel started his career as a
Once you have prepared the analytical
Chartered Engineer in the auto industry, and
business models, extrapolate. This means
What Next?
pursued his Masters from Warwick Business
forecasting. This is a must before designing
There are significant investments in
School, before getting into consultancy.
and building. If the strategy is wrong,
Lionel had earlier worked with Future Supply
warehouse automation and technology
Chain where he helped create modern and
everything that follows is wrong.
in the West, and this is already under
IT enabled supply chain and he is back as
consideration in India. Every time one
Interim Projects Director.
Technology Application
sector of the market sees technological
To design the supply chain network, and
development, so somebody sees an
14/06/2015 05:42:27 PM
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July 2015 | Volume 1 | Issue No. 3

One of the most successful women

Leadership Series: Kavindra Mishra, MD & CEO,

CEOs Roundtable: Driving innovations in ice-cream flavours

In an exclusive interaction, Sulajja Firodia Motwani,

Experience the fusion of introducing innovative

Mr. Kavindra Mishra, MD & CEO, Pepe Jeans India

Mr. Vikram Ogale, Director National Supply Chain

Experience The Big Power of Small

Mr. TAB Barathi, Vice President (SCM), Wheels

Mr. Lionel Stanton, Interim Projects Director,

02 | The Analyst July 2015

Managing Director & CEO

The Analyst July 2015 | 03

Young, dynamic, energetic and a

04 | The Analyst July 2015

ashion is defined by its ability to evolve,

Transitioning from being global to

geography, we will gain much success. As far

Traditionally the value chain of textiles

The Analyst July 2015 | 05

higher penetration in the tier III market with

Getting to the customers on time

Fashion supply chain is 6-9 months cycle.

aspirations increase, consumers want to

Acquiring the right talent

I believe that money is never the tool to

credit to them for their success and dont

Experimenting with the omni-channel

An omni-channel strategy is the key for us.

Strategy to sustain the leadership

With considerable growth in its India

06 | The Analyst July 2015

Pepe, which was launched

Entrepreneurship has been a very

of which product will do well in the future,

The best way to find out my leadership style

The Analyst July 2015 | 07

Almost all of us irrespective of age have

Indian cold chain infrastructure vis-vis other countries

there is a lot required to be done in terms

08 | The Analyst July 2015

getting developed in India and is yet very

Challenges & opportunities

Pradeep Chona: Around 88-90% of the

starts getting ice creams. That penetration

with the hinterland, as well as availability

The Analyst July 2015 | 09

Pradeep Chona: Use of GPS system for

Keeping up with the innovative spirits

Pradeep Chona: Not much is done as

in dry ice packing, can sustain themselves

The need for skill development

Pradeep Chona: As majority of cold chain is

10 | The Analyst July 2015

Your wish list from the government

Pradeep Chona: Proper cold chain

loading labour unions from industrial

Achieving energy efficiency while

Pradeep Chona: Various techniques are

Kwh during the financial year 2013-14. By

Promising prospects ahead