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Logistics
Chain
Tejaswini Babbepall(12)
Arjun Saluja(22)
Rachna Shah(8)
Nidhi Sarda(7)
Shiva Dhawan(20)
Table of Contents
What is Logistics ?
Logistics is the
management
of the flow of goods
Securit
from
y
origin to destination to
meet
customer
Right
Time, Right
requirements
Place
@ Minimum Cost
Transpo
rtation
Invento
ry
Logist
ics
Packagi
ng
Started as a
business concept
Wareho
using
Informa
tion
Manage
ment
TEMPERATURE
CONTROL
(REFRIGERATION
)
COLD CHAIN
LOGISTICS
Fruits &
Vegetables
Meat
Fish &
Seafood
Dairy
Products
Beverages
Banana
Chill
Frozen
Deep Frozen
Temperature
and
Shelf Life
Product
Refrigerated
Shelf Life
(Days)
Optimum
Temperature
(Celcius)
Apple
90-240
Bananas
7-28
13.5
Bell Peppers
21-35
Cabbage
14-20
Eggs
180
1.1
Onions
30-180
Lettuce
12-14
0.6
Fresh Meat
(beef, lamb,
pork, poultry)
14-65
-2
Oranges
21-90
Pears
120-180
-0.6
Potatoes
30-50
10
Seafood (shrimp,
120-360
lobster, crab)
-17.8
Strawberries
5-10
0.6
Tomatoes
7-14
12
source: www.coldchainpharm.com/
Cold chain in
Pharmaceutical Sector
Sources: http://www.aircargoinsights.com/news/cold-chain-pharmaceuticals-worth-billio
http://www.aircargoinsights.com/more-market/global-biopharma-demand-on-the-rise/
HISTORY &
For the first time in 1797 a
BREAKTHROUGHS
British fishermen used natural
ice to preserve their fish stock
piles
1970, Tropicana orange juice
was shipped in bulk via
insulated boxcars in one
weekly round-trip from
Bradenton, Florida, to Kearny,
New Jersey.
By 1972, they were carrying
around 1,000,000 US
Top icing of
gallons(around 38,00,000
A circa 1870 refrigerator
car design. Hatches in bagged
Litres)
vegetables in a
the roof provided access
Illinois Central Railroad #14713,
refrigerator car
a ventilated fruit car dating from 1893 to the
ice tanks at each end
BREAKTHROUGHS IN
INDIA
Value Parameters
Network (Geographical coverage)
Temperature Range Availability (Product
Range Covered)
End to End Solutions (Integrated approach)
Temperature & Humidity Control
Tracking Methods
Real time information feedback
Security
Cost
Trust /Reliability of service provider
Flexibility of service provider
Ability to meet Tech Specs
Regulatory Compliances
Carbon Footprint
Transportation Time *
Stakeholders
Infrastructure
Warehouse / Cold Storage
Owners
Refrigeration and Cold
Chain Equipment
Technology suppliers
Refrigeration Solution
Providers
Specialized Equipment
Providers
ICDs (Inland Containers
Depots)
Sea / Air Ports
Transport Vehicles
Security
Stakeholders
Stakeholders
Others
Power / Electricity
Shelf Life
Temperature
Humidity
Distance
Seasonal Changes
Roads Connectivity
India
Growth
( CAGR )
Processed Food
$ 17.8 Billion
13.5 %
Agriculture
$ 200 Billion
3.8 %
Bio-Pharmaceutical Sector
User Industry
India
Pharmaceutical
$12 Billion
Growth
( CAGR )
10-11 %
Clinical
Research
$ 2.2 Billion
23 %
Generic Drugs
$ 11 Billion
17 %
Healthcare
$ 36 Billion
Microsoft Excel
97-2003 Worksheet
Source: http://agmarknet.nic.in/coldstorage.h
4) RK Foodland
A 35 year old 3pl company with
pan-India presence.
Clients include Dominos, Abbott,
GSK, Cadbury.
5) GATI RedSun
A leading cold chain company for
perishable goods and frozen items
The Hyderabad-based Gati recently
bought a majority stake in the
company. Gati plans to scale up
operations in cold chain logistics
6) Adani Agrifresh
A logistics venture formed by the
Gujarat-based $ 6 Billion Adani
Group
Has invested $ 40 Millions in setting
up 3 CA stores in HP.
Promotes FARMPIK Brand in North
Negative
temp.
(Frozen
Material)
Cold Chain
Positive
Temp.
(Chilled
Material)
Cold
Chain
Single
Product
Cold
Chain
Multi
Product
Cold
Chain
Supply
Side Cold
Chain
Distribu
tion Side
Cold
Chain
Refrigeration system
Insulated Wall Panels, Metal Roofing system
Material handling equipment's
Pallet racking system
Dock equipment's and special doors
Special cold storage doors
Contractors and Civil Engineers
Vehicle reefer units
Vehicle supply Fresh line Processing equipment
Process Grading and Sorting
Consultants
Food Service Distribution Centre concept design
consultant
Local Indian Architectural & Structural Consultant:
Stup Consultants
Integrated Building Management System : Tata
Backend: Refrigeration
Providers
WAREHOUSES (Static Refrigeration)
Insulation Experts
Owens corning
Lamiflux
Bayer Material Sciences
SSI- Schaefer
Godrej & Boyce
Metaflex
Dan Foss
Lloyd Insulations (India) Limited
Salco
HiCon
Rite-Hite
Backend: Role of
Consultants
Refrigeration Equipment
Transportation
Reefer trucks
Sample Cold
Room
Costs
Rs. 300-350 per sq ft.
Rs. 18,000-20,000 per MT
3.5 KW per MT
Rs. 50-80 lakhs
Rs. 4-7 lakhs
Rs. 500
Rs. 25-30 lakhs for 9-13
tonnes
Source: Anderson Consulting Report on cold chain
Costs
Communication System
(VSAT Links)
Office infrastructure
Computing Power
Rs. 5 lakhs
Website Design
Working capital
Rs. 3 crores
Blanket Costs
( Excluding civil constr.)
Drivers
Growth in organized retail
Reliance, future, bharti- walmart, etc.
Growth in processed food sector
$ 70 bn in 2010. Projected growth to $ 150bn
by 2015
Changing consumption pattern
Increase in consumption levels
22 million MT supply against 31 million MT
demand
Government Initiatives
Mega food parks, Subsidies
Challenges
Lack of Infrastructure:- Roads and Real Estate
Lack of logistical support
Uneven distribution of cold chains:- Geography and
Inter convertibility.
High capital investment
-Rs.80-90/sq.ft.($ 1.6-2.0) against Rs.40/sq.ft. ($
0.6) in west
Power supply
-17-18% power deficit
-30% of total expenses against 10% in west
Management of different temperatures
Awareness and Mindsets
Error Irreversibility
-Highly temperature sensitive cargo
Government Incentives
Some of these incentives are
The Budget 2011-2012 provided infrastructure status to the
cold chain sector.
The Budget 2010-2011 included duty-free import of
refrigeration units, which is required to make refrigerated
vans or trucks. It also exempted trailers and semi-trailers
used in agriculture from excise duty.
The Budget exempted air-conditioning equipment and
refrigeration panels used in cold chain
infrastructure, including conveyor belts, from excise duty.
It also extended excise duty exemption to conveyor belts.
Budget 2009-2010, Government of India introduced tax
benefits for companies making investments in setting up
cold chain facilities
Other past incentives include access to external commercial
borrowings, 100 per cent FDI and provision of up to 25
per cent project costs involved in setting up cold storage
Need Gaps
Lack of knowhow and trained manpower
Lack of backward & forward linkages to
supplement cold chain:- High Value and
Value Preservation.
High cost of power: Agricultural sector is
offered subsidized power tariffs by the
Government of India,
Cold chain industry is instead subjected to
industrial power tariffs.
Need Gaps
104 million metric tons of Perishable
produce is transported between cities
each year. But Only 4 million metric
tons moves via reefer mode.
Problems of Optimization in reefer
transport: Lack of two-way cargo movement.
Interstate barriers, intercity/state taxes, and bad
roads are some of the issues which increase
operating costs, delay timely deliveries and reduce
the efficient utilization of fleets.
Need Gaps
Infrastructure: Coolers, warehouses,
refrigerated trucks, carriers, shopping malls
and others. Needs to study the potential risks and
the return on investment (RoI)
Third-party logistics:
Manual- handling reduces the product quality and
life.
Lack of end-to-end solutions. One can also
adapt state-of-the-art techniques such as cross
docking that will reduce the transit times and
inventory.
Need Gaps
Reefer location tracking challenges
(Technology effectiveness & penetration
low)
Discontinuous Energy Supply for hours
(Backup power is very expensive)
Lack of 3rd Party solution providers for
small players. Geographical and service
range expanding on project basis from big
players
Education and awareness:- Low
acceptance due to high costs
Thank You