Technology Development Essay Example for Free

Technology Development Essay The causal link between development and historical time is often contested, although there is persuasive evidence of this link. Therefore, this essay will have the following structure: first of all, theoretical justification of the claim that historical time is connected with development will be given; secondly, several case studies will be analyzed; and finally, the counterarguments will be discussed and refuted. Starting with the theoretical explication of the link between historical time and development, it is necessary to admit that power in international relations has been defined differently in different historical eras. For example, once military capabilities were the only measure of a state’s power; nowadays, a variety of economic, social, and cultural indicators contribute to a country’s position on the international arena. Power, in turn, is associated with development, being its cause and consequence at the same time: only developed countries can attain power, which later accelerates their economic development through providing access to resources and capabilities of other countries. As concerns case studies that prove this point, American involvement in World War I and World War II will be analyzed. These wars have had a significant impact on the economic conditions of the United States, although they were not started or incited by America, therefore can be regarded as external historical influences. Different war involvements have had different influence on the U. S. economy. The legacy of the World War I is associated with the Great Depression; on the contrary, US entry in the World War II boosted economic growth. The World War I was not the main reason for the Great Depression, but almost all causes of this economic disaster are directly or indirectly connected with the war. For instance, if we speak about agricultural sector, during the war the government was subsidizing farms and paid absurdly high prices for wheat and other grains, but when the World War I was over, the federal government abruptly stopped their policies to protect farmers. As the result, agriculture suffered from such an unbalanced approach. Moreover, foreign trade suffered significantly. The Fordney-McCumber Act of 1922, Hawley-Smoot Tariff of 1930 and a number of other lawsuits increased import tariffs without any economically sound reason. The result of the abovementioned tariff changes was that European businesses, devastated by the war, could not sell their products on the U. S. market in necessary quantities. It is possible to perceive the American entry into the World War II as an event that has actually ended the Great Depression in this country. Due to large numbers of citizens enlisted in the army, unemployment rates fell to record low levels during the war. Soldiers received decent salaries and were eagerly spending their money after the return from the battlefield. Strengthened consumer spending fueled growth and was a sign of restored consumer confidence. Large sums of defense spending pulled the U. S. economy out of the Depression for the ample reason that such fields as defense and security are very labor-intensive and created thousands of jobs to further decrease unemployment. The necessity to manufacture war supplies had given rise to a powerful military-industrial complex. While wars have had varying overall effects on the U. S. economy, they definitely fueled the development of the military-industrial complex. Wartime production of the military-industrial complex has been soaring throughout the American history. The military-industrial complex came to play a significant role in the overall structure of the economy. It is quite self-evident that the complex’s raison d’etre is the production of arms and equipment for subsequent use in military operations. Thus, military operations following the World War II have only strengthened the America’s leading position on the international arena, which in turn provided for beneficial trade agreements, migration of skilled labor to the U. S. , and a voice in international institutions. All the aforementioned factors are directly linked to economic development. Coming back to the link between the World War II and economic development, several other factors have to be mentioned. War machine demanded scientific innovations, so the war stimulated many important fields (Ruttan, 2006). The Marshall Plan was introduced after the war and helped to secure markets for numerous American products by providing financial help to devastated European countries. International monetary arrangements were reconsidered. Due to the spurt of economic growth and economic devastation of Europe, America became the world’s superpower. War is not necessarily an economic stimulus to the victor, but there was no destruction on American soil, so the U. S. was prosperous in the post-war era. The U. S. got involved in the World War II only at the closing stages of the conflict, when the victory over fascism was secured by its European allies. The U. S. entry in the World War II boosted the growth of the military-industrial complex, and that was one of the major reasons behind the decision to engage in it. This is an example of how a state can take advantage of historical circumstances to boosts its development. There are several strands of counterargument to the statement that development is connected with historical time. The most important strand argues that the development is associated solely with the country’s internal resources and capabilities: for example, natural resources are of greater importance for development than global historical conditions. However, there are examples that disprove this theory. For instance, Japan has very limited range of available natural resources, and their dependency on foreign energy sources is almost total. However, due to historic factors such as defeat in the World War II and Japan’s occupation by the Allied Powers, Japan adopted Western principles of state-building and social organization. Despite lack of natural resources, rapid westernization and modernization following the World War II allowed Japan to develop the most cutting-edge high-tech industry and become the second largest economy in the world. Therefore, the claim that internal resources are more important than historical time with regard to development does not hold. While the claim might have had some credibility in the past, when all important processes were confined to the borders of nation state, globalization changes the nature of those processes by reshaping all fields of human activity ranging from manufacture to governance. Therefore, it is possible to conclude that there is a strong link between development of a given state and global historical conditions. References Ruttan, V. W. (2006). Is War Necessary for Economic Growth? Military Procurement and Technology Development. New York: Oxford University Press.

Special Effects In Horror Movies

Special Effects In Horror Movies From our earliest days, we use our vivid imaginations to see ghosts in shadowy shapes, to be emotionally connected to the unknown and to fear things that are improbable. Watching a horror film gives an opening into that scary world, into an outlet for the essence of fear itself, without actually being in danger. Weird as it sounds, theres a very real thrill and fun factor in being scared or watching disturbing, horrific images. Horror films, when done well and with less reliance on horrifying special effects, can be extremely potent film forms, tapping into our dream states and the horror of the irrational and unknown, and the horror within man himself. (The best horror films only imply or suggest the horror in subtle ways, rather than blatantly displaying it, i.e., Val Lawtons horror films.) In horror films, the irrational forces of chaos or horror invariably need to be defeated, and often these films end with a return to normalcy and victory over the monstrous. The dissertation is based on the Study of cinematography and special effects in a Horror movie. In the recent past camera, lighting and special effects are of greater importance and fame, so it will be worth exploring those topics. As far as the technical aspect is concerned a brief research of how these kind of films are being filmed from the shooting spot itself, will be very useful for an aspiring artist to get a better idea about its development. Horror films go back as far as the onset of films themselves, over 100 years ago. Introduction: The researcher was interested in watching horror films from his childhood and he was deeply interested in these genres. In his childhood the researcher was very much impressed with the serial mainly called Genmam-X and Marmadesam. The drama that he staged in his schooldays with horror and scary effects as the theme was applauded well by the audience. So he started his concept and in addition to that he added makeup also. The tremendous response from the viewers made him start learning the concepts and idea relating to this genre and finally concluded with this concept. It is difficult to show scary effects in screens. If the director gets his requirements from all the technicians the film will be successful, otherwise it will not. In order to get success the film must contain interesting characters and it also depends on their acting. And in terms of technical aspects the cinematography and special effects play a major role. In Indian cinemas, there is some response for these kinds of genre when compared to Hollywood. The main aim of the upcoming short film is that after seeing this, many people have to change their mind to see horror films also. So the main thing that the film should contain is better cinematography with matching special effects. Instead of concentrating on the story alone, cinematography and special effects should be given more importance. Research Questions: What are Special Effects? Colors and intensity of lights? Camera trick and technique in cinematography? Special Effects (Make up) for horror movies? How the horror movies getting winning changes? Aim: To give the thrill the viewer expects mainly the use of the camera, lightings and Special Effects, Were Script play the secondary role. Statement of the problem: The main purpose of adding the special effects is to frighten the viewer.When it goes beyond the limit it might not be watched by many people. In this situation it may go to another genre of hardcore horror. It may scare people but it will create some abnormal effects in the minds of some people. Objectives: How is cinematography in horror films different from other films? What are special Effects? How is Special Effects done in horror movies? A Study of the cinematography for horror movies. How is make up done for horror movies? Significance of the study: Horror movies are the best platform to find rich special effects and lighting and Much interesting camera handling which gives the viewers a different experience From other films. The study through this dissertation is to understand The cinematography in horror films and application of special effects in them. With the gathered knowledge a short film based on horror story will be filmed. LITERATURE REVIEW Movies Reference: The name of the movie is Psycho (1960) and the director is Alfred Hitchcock. The cinematography is done by John L.Russell. Psycho is one of the best Hollywood horror movies. I saw this movie some time back. I thought it was the best example for lighting. In the film I saw one shot where the psycho is going to kill the lady who is taking her bath .In that scene the lighting was done very well. The 1961 best cinematography, Black and White John L.Russell Oscar was nominated for this film. Reference: The name of the movie is The Thing (1982) directed by John Carpenter with Special Effects by Rob Bottin. The movie was taken in 1982. In that period they used special effects and visual Effects and make up. The make up is so realistic that it will attract the viewer Quickly. A human is transformed to a demon easily and the scene is Presented very effectively which will fascinate the people. Even the lighting Effects are very good. And I watched this movie online. The comment was that it Was too scary. This shows how they have applied VFX and SFX. And the Best special effect 1982 Rob Bottin Saturn award nominated for this Film. Reference: The name of the movie is Van Helsing and the director is Stephen Sommers.The cinematography is handled by Allen Daviau. The movie Van Helsing comes under the genre of horror and it came out in the year 2004. In this movie they followed a really nice cinematography. Actually this movie came out from the comic that Van Helsing is a ghost hunter who will be roaming around the earth in search of ghost, In this movie also he is coming to a village in search of the ghost. There are two interesting characters in this movie one is the Frankenstein and the other one is the wolf character which was in the custody of the villain. The extra ordinary thing about the movie is that the CG In early days, man used special effects and later it got developed into visual effects. In this movie there are many visual effects shots. A few examples include the climate sequence where the ordinary man transforms into a wolf that is a quality CG work in the industry. Further there are many VFX shots in the movie. Special effects include the blood bossing from the mouth and the usage of the miniature in the movies where Gabriel (hero) taking the Frankenstein away from the village. Most of the shots were shot inside the studio and they were composited later. Usage of expressive and breath taking matte paintings added to the quality of the movie. The cinematography of the movie plays a major role because of the proper establishment and composition. Reference: The name of the movie is Mirror-2 directed by Victor Garcia. Cinematography is done by Lorenzo Senatore. I recently watched this film. It is really a kind of hardcore killing movie where we can find the hero who is replacing the old security guard in the office. The main concept behind this movie is the revenge by the girl who is killed by the head officer. And he is killing the people through the medium mirror. The main success behind the movie is the lighting and cinematography. Reference: The name of the movie is Saw-4, directed by Darren Lynn Bousman and cinematography by David Armstrong, This movie is the successor of the three early parts. The success behind the movie is that the usage of the equipments and the method he used for killing others. In the first scene the villain killed the victim by tying the body to a steel bed and the axe was in a to and fro motion just above the stomach of the victim where it got peeled into many pieces. Website Reference: This Media Studies Factsheet was researched Written by Steph Hendry The horror films are not from this period. Those films were taken from the very early times where they only depend on the special effects and the camera tricks .At that time also some nice pictures came namely the Frankenstein a ghost which was made by a man by assembling many internal organs .This is the fact, that behind the creation of the ghost namely Frankenstein, is one type of ghost. There are many types of ghost that may include the external ghost which was having its own appearance and they will have some special characteristics. The Internal ghost is that it will enter ones body and it will do some thing inside the body of the character. This is the kind of ghost and others include the vampire. Mostly all the thriller movies have this type of ghost, there will be a character sucking blood from the humans and using them for their existence. They will be more like humans living with them but they will have some special characteristics In the earlier periods the ghost will be only living inside the cave and later the living area of the ghost also increased ,no matter where the ghost are living it may be at school, it may in our home or inside ones soul no matter where it will be. So we can go to the place as we wish when going for this kind of genre. And nowadays time is also not a matter for the ghost it may come at day time or it may come when we are sleeping and when we are in dream. The only fact is that vampire can roam around the world during day times. Reference: www.darkwebonile.com Horror movies have been around since silent movies. Obviously being scared is something the audience want. The horror movie received a huge revival in the late 70s early 80s (Omen and Nightmare on Elm Street) but died a sad death in the late 80s and throughout most of the 90s. However, with the advent of the horror smash parody Scream the genre is, once again, extremely popular. What was frightening back in the silent movie days and what is frightening now may well have changed. As society changes so do our fears. For example, when moving image was first invented footage of a moving train caused fear in the audience because people really believed that the train would come straight out of the screen. Reference: http://www.horrorfilmhistory.com/index.php?pageID=1980s Horror Film History A Decade By Decade Guide to the Horror Movie Genre 1980s Horror Films. Horror movies of the 1980s existed at the glorious watershed when special visual effects finally caught up with the gory imaginings of horror fans and movie makers. Technical advances in the field of animatronics, and liquid and foam latex meant that the human frame could be distorted to an entirely new dimension, onscreen, in realistic close up. This coincided with the materialistic ethos of the 1980s, when having it all was important, but to be seen to be having it all was paramount. People demanded tangible tokens of material success they wanted bigger, shinier, and faster, with more knobs on as verification of their own value in society. 1980s Horror Movies The Shining (1980) The Thing (1982) Videodrome (1983) Nightmare on Elm St (1984) Fright Night (1985) Re-Animator (1985) The Fly (1986) The Hitcher (1986) Near Dark (1987) Hellraiser (1987) The Evil Dead Childs Play (1988) . Reference: http://www.horror-movies.ca/horror_17523.html Horror Movies and Special Effects Posted By Poppa Scotch, Horror is a genre that puts everything on the line in regards to the physical boundaries of at least semi explainable human anatomy and any and all possible items that can be used to destroy it. There are decapitations, eviscerations, monsters, dead animals, rotting corpse and pretty much anything else that you can think of that have already made their way into horror cinema. The invention of the green screen and computer generated background really are only limited by the artists imaginations, which in turn is an amazing tool for filmmakers. They can turn skylines into post apocalyptic landscapes, they can transform a crappy warehouse into Times Square, and they can even add massive crowds of people to create a larger than life sporting event. My gripe comes from when the filmmakers (or special effects houses) get lazy. Its no secret that the appeal for a large number of horror fans is the gore killing, and the absolute carnage. Considering the main focus, the effects have to be believable to the viewer. Through our many years of growth and development of horror film viewing, special effects have come a long way as well as presenting us with a base of what we as viewers believe that gore should look like. Book

Christmas Essay -- Narrative Essays, Descriptive Writing

A few days before Christmas, Oxford street is swarming with last minute shoppers, laden with parcels and bags. Christmas is the highlight for many people, especially little childen, from as tall as your ankle to as tall as your knee. Small todlers were moaning and disappearing into the clothes racks like magicians disappearing in a puff of smoke entertaining the gullible audiences. Families and friends gradually emerge from clogged buses and congested trains, tired, exhausted and hungry even at this very early stage, as if they had spent the whole night awake, like a distressed parent waiting for their child to arrive home from a party but has still not arrived, two hours past their curfew. Oxford street is the main high street of the whole of England. It flocks many tourists, as though it has a force or power, just like opposite ends of a magnet attract one another. Oxford street is as long as I can possibly imagine; it is 10 time longer than any local high street and is as wide as six elephants put together. Oxford street contains a lot of various shop which other high streets have, plus some extra. It is as if Oxford street encloses a immeasurable proportion of England as it has a great deal of stores; some immense while some petite. It's not restricted - even Regents street is much more genteel like a magnificent pet and Bond street is tremendously aristocratic like a diamond engagement ring and only the posh shop there. Oxford street is one maze, with all sorts of mystical secrets to be uncovered and adventures to be explored and experienced. It is one colossal, huge, extensive, perpendicular road with a range of exits... ...ng for breath. As I walk through 'MK1', I can undoubtedly see that many shoppers were haggling over the price of purchases. Then someone barges into me and I very nearly fall over with the force of it. After I recover from my sudden fall, I widen my horizon and gaze upon particular groups of people. I get attracted to look at the people with loud voices. The brightness of the light decreases as the clouds begin to fasten together together structuring one massive cloud. It began to snow. The cold was beating on me. I felt the cold reaching my body even with wearing a thick layer of wool covered by a fur coat. It was as though I was wrapped with a sheep, which had never had its fur, trimmed. The bitter air smacks my face as I walk, without any energy and worn out, forwards towards the end of the road to relaxation.

Times May Not Be A’Changin’ :: essays research papers

Times May Not Be â€Å"A’Changin’†   Ã‚  Ã‚  Ã‚  Ã‚  Although portrayed in a particularly gruesome scenario, author Shirley Jackson conveys the importance of upholding tradition in her short story, â€Å"The Lottery.† While the climactic execution-by-stoning isn’t quite a modern example, it still serves to show us that some traditions are worth upholding. In our society today, it seems as if there is a growing movement to look forward and embrace the new instead of remembering our past. But to effectively make changes and plan for the future, it is essential that we turn to our history. One of the greatest issues in the world today is that of patriotism. In the immediate wake of September 11th, nearly all residents of this country proudly proclaimed themselves â€Å"Americans,† putting aside personal bias, differences in religion, and family roots to support the rebuilding of a nation. Lately, however (since our involvement in the Iraq War), this notion of unity and brotherhood has once again ta ken a backseat to personal agendas.   Ã‚  Ã‚  Ã‚  Ã‚  In the same way that the town is proud to continue its June 27th tradition, most people also take pride in feeling allegiance towards their country (specifically the United States). Perhaps it is deep family roots or a strong connection with constitutional ideals; whatever the reason, patriotism seems to stick with Americans. Even though our interest in our country has been at an ebb and flow since the beginnings of the Revolution, we tend to strongly identify with this nation. The small town has a grizzly ritual that leaves at least one person each year particularly unhappy, yet we do not hear talk of moving away. We only read of other towns that have done away with the lottery: â€Å"They do say†¦ that over in the north village they’re talking of giving up the lottery (McMahan 87),† and there is â€Å"nothing but trouble in that (McMahan 87).† Even Tessie Hutchinson, the unlucky ‘winner,’ claims that the practice is unfair, but nonetheless goes along with it. Analogously, a soldier who dies for his country does so for the greater good. The soldier is so passionate about the ideals of his nation that he is willing to die defending them. He does not want to die, but knows he is doing so for a good cause – that of liberty.   Ã‚  Ã‚  Ã‚  Ã‚  The townspeople are not fighting for their freedom from oppressors or antiquated ideals; on the contrary, they are struggling to maintain their heritage.

Places in Gullivers Travels Essay -- essays research papers

Places In Gulliver's Travels By: Jonathan Swift Gulliver's Travels has several places that Gulliver visits. In this paper we will take a look a in-depth look at each of the places that Gulliver visits. In my opion Gulliver parelles many places to is home country, England. Lets take a look at the first stop in Gulliver's travels, Lilliput. Lilliput is inhabitited by people who are only six inches tall. Gulliver seems like a gigant. The Liliputians have a structured government and social lifestyles. The government has a senate, officials, a council, and an emperor. The government has several parrells to the England government. Gulliver tells us that these competitions, to choose the officials, who can 'Dance on the Rope', are often the cause of fatal accidents. Flimnap, in fact, would havekilled himself ina recent fall had not one of the king's "cushions" broken his fall. The king's "cushion" represents George I's mistress, who aided Walpole in his return to power after a "fall." Another comparison between Lilliput and England, Reldresal, a Lilliputian government officer. He represents Walpole's successor, he payed Gulliver a special visit. His purpose is to acquaint Gulliver further with domestic and international pol itics, and to enlist Gulliver for assists in protecting their land from invasion, corresponding to the Tories and the treats to France. In Lilliput, the warring parties are the High-Heels , the Tories, and the Low-Heels , the Whigs. Just as George I favored teh Whigs, so the Lilliputian emperor favors teh Low-Heels. Just as George I's successor, the Prince of Wales, indicated favor to both parties, the Lilliputian heir to the throne wears one high heel and one low. Although several things are parralleled to England some things are not the same. They both have punishment system that are based on different ideas, were as the Englandjudiciary system is based on on punishment, the Lilliputians judiciary system has its rewards for following the rules. They also have very stiff punishments for unjustly accusing another of a crime. If at a latter point in time the accused person is fround innocent, the person who wrongfully accused is put to an creul death and the un justly accused is rewa rded materially, and also recieves a title from the emperor. Upon leavin... ...y that is perfectly ordered, perfectly peaceful, except for the Yahoos, and exempt from the topsy-turviness of passion. In thier society there is also no crime, poverty, unhappiness but also their is no joy, passion, ecstatic love. Everything is done on an even keel. The Houyhnhnms are the representation of the perfect human culture. The marriages are arranged and the couples have no more feelings for each other than for any one else. The Yahoos are human-like, and are keep in a kennel, and prohibited from having anything to do with the Houyhnhnms. The Yahoo had arrived on thier island by acident. These people are less civilzed than the Houyhnhnms. They represent the lowest traits in human nature. They are gluttonous, filthy, lascivious, theiving, violentbrutes. Only physically do they resemble civilized people. They started out on the country only two Yahoo, and as they had children and their children had children they also lost the cilivilation and needed to be around other peo ple to stay civilized. In a way this represent the way Gulliver wanted him home country England to be, perfect in its ways. But what would they have done with the Yahoos that they would have incountered?

Final study guide

Final Exam Study Guide Know these people Carl Linnaeus- Swedish botanist who established a system for naming species that is still in use today; two-part name unique to each type of organism Jean Baptists Lamarckian-proposed that individuals change in response to challenges posed by the environment and the changed traits are then passed on to offspring Charles Darwin- said that species change over time but do not progress; individual variation is important and variation is what drives evolution Biodiversity How many species have been described? Approximately 1. 5 million (114 of all species) How many species remain to be described? What animals account for the greatest amount of species diversity? Insects How do we estimate biodiversity? Genetic diversity, species diversity, ecosystem diversity, change through time -variety and variability of life on earth, measured by species What are ecosystem services? Processes that increase the quality of the biotic environment -atmosphere and c limate, freshwater, nutrient cycling, pollination, pest population, disease What is an ecological footprint?How many additional planet earths would be required if all humans had the ecological footprint of an American? 4 planets Why is biodiversity important? Why study biodiversity? Economical and biological benefits Science What is a theory and how does it differ from a hypothesis? Well a hypothesis is a possible or tentative explanation for scientific findings that a scientist discovered during research. A theory is a tested by other scientists who get the same results as the previous scientists hypothesis Evolution and Natural Selection Why did Darwin delay the publication of The Origin of Species?Because of â€Å"special creation† was still very popular What is unfamiliarity's and how does it relate to the process of Natural Selection? Their ideas both relied on low changes over time rather than cataclysmic events that caused sudden upheaval or change What is a geometric progression;- -is a sequence of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the common ratio -population growth what is an arithmetic progression? -increases by a constant difference (e. . , units of 1 or 2 or 3) -food supply -supply gradually increases with large population jumps How do these relate to populations and natural selection? – lack of resources causes competition Review the medium ground finch study (Gasping forties). What type of selection? Directional selection What influenced beak size? Since only big seeds became available, individuals with particularly large and deep beaks were more likely to crack these fruits efficiently enough to survive How did this relate to rainfall? He drought cause the sources of seeds as food to decline What are the conditions necessary for Natural Selection? – individuals vary -some variations are heritable -more offspring are produced than can survive - individuals with traits that confer an advantage are more likely to survive and reproduce What are the agents of evolutionary change – review notes on tuition, coneflower, nonrandom mating, genetic drift.Mutation-constantly introduces new alleles at all loci -increases genetic diversity in population -ultimate source of all genetic variability -random with respect to fitness Gene Flow- the movement of alleles from one population to another -random with respect to fitness -tends equalize allele frequencies among populations Nonrandom matting- nonrandom mating between relatives -causes inbreeding depression -helps selection weed out deleterious alleles Genetic Drift- any change in the allele frequencies in a population that is due o chance (luck, sampling error) ;causes allele frequencies to drift up and down randomly over time What is fitness? The ability of an individual to survive and reproduce, relative to other individuals in that population What is artificial selection? S elective breeding of domesticated plants and animals to produce offspring with desired genetic traits How does natural selection produce major change? Trial selection is the tendency of the ones best suited to survive in their environment to survive longer and pass on their genes more often – those genes then become more common and the harmful rations die out, gradually reshaping all life and fine-tuning it to it's environment. What is homology? The occurrence of similar features in different species because they both inherited the trait from a common ancestor What is the most common cause Of homophony? -convergent evolution -occurs when natural selection favors similar solutions to problems posed by a similar way of life What is a vestigial structure? Any rudimentary structure of unknown or minimal function that is homologous to functioning structures in other species -are thought to reflect evolutionary history How do imperfect structures relate to the theory of evolution b y Natural Selection?If evolution is true, then â€Å"imperfect design† is expected, because natural selection works to make an organism well-adapted, but not perfectly adapted, to their environment What is convergent evolution? Review the fish ichthyology example from class and the text. Process by which unrelated organisms independently evolve similarities when adapting to similar environments. Starting about 200 million years ago, these marine reptiles evolved body plans (and behavioral patterns) strikingly similar to those of odder dolphins and bluffing tuna (great example of convergent evolution) Be able to recognize disruptive, directional, stabilizing selection.Disruptive both extremes are favored, and the average phenotype is selected against – relatively rare -maintains genetic variation -plays a role in speciation-the generation of new species Directional- one extreme is favored, and the average phenotype (and the other extreme) is selected against -changes th e average value of a trait Stabilizing- reduces genetic variation -the average phenotype is favored, and both extremes are selected against – he average value of the trait does not change over time What is the difference between macroeconomics- Large-scale evolution occurring over geologic time that results in the formation of new taxonomic groups. ND microinstruction – evolution resulting from small specific genetic changes that can lead to a new subspecies Hardy-Weinberg You will not be asked to do any Hardy-Weinberg calculations What is the basic tenet of the Hardy-Weinberg Theorem? When alleles are transmitted via meiosis and random combination of gametes, their frequencies do not change over time -for evolution to occur, some other actor or factors must come into play -if the frequencies of alleles AH and AH in a population are given by p and q, then the frequencies of genotypes AH AH , AH AH, and AAA will be given by pa, ops, and sq for generation after generatio n What are the assumptions of the H-W Theorem? O natural selection -no genetic drift (no random allele frequency changes) -no gene flow via immigration or emigration -no mutation -random mating (with respect to the gene in question) pa -the predicted frequency of the offspring AH AH genotype* ops-the predicted frequency of the offspring AI genotype + sq -the predicted regency of the offspring AAA genotype= 1 : what are the allele frequencies, what are the genotype frequencies in a non-evolving population? Frequency of dominant allele the frequency of the recessive allele frequency of AAA (homozygous dominant) ops= frequency of AAA (heterozygous) sq= frequency of AAA (homozygous recessive) How do you recognize a population not in H-W equilibrium? If it does not equal one Why would a population not be in H-W equilibrium? B/c changes would occur and that would not be realistic Species and speciation Review the Biological Species Concept. Cost widely accepted concept -defines species as a population or group whose members have the potential to interbreed with one another in nature to produce viable, fertile offspring Be able to differentiate between Predating/Precocity-individuals of different species are prevented from mating, Postdating/Precocity and Posthypnotic- when individuals from different populations do mate, but species will have low fitness or fitness or offspring will be sterile barriers. What are the predating-Factors which cause species to mate with their own kind (assertive mating) and postdating barriers-Genomic incompatibility, hybrid amiability or sterility What are posthypnotic barriers? What is a hybrid?Temporal isolation-populations are isolated because they breed at different times Habitat Isolation- populations are isolated because they breed in different habitats Behavioral Isolation- populations do not interbreed because their courtship displays differ Gametes Barrier- mating fail because eggs and sperm are incompatible Mechanical Isolatio n- mating fail because male and female reproductive structures are incompatible Hybrid Viability- hybrid offspring do not develop normally and die as embryos Hybrid Sterility- hybrid offspring mature but are sterile as adults Hybrid-the offspring of parents from two different strains, populations, or species In very general terms what does the Biological Species Concept state about the nature of species? What are some of the problems with the Biological Species Concept? Tot applicable to asexual or fossil species; difficult to assess if populations do not overlap geographically Be able to define the terms symmetric-occurs even though gene flow is possible; is rare or nonexistent – even though symmetric populations are not physically isolated, they may be isolated by preferences for different habitats and allophonic- begins with physical isolation via either dispersal or vicariate What is the phylogeny species concept? -based on reconstructing the evolutionary history of popul ations What is the morphological species concept? Identifies evolutionary independent lineages by differences in morphological features – based on the idea that distinguishing features are most likely to arise if populations are independent and isolated from gene flow The Fossil Record and Mass extinctions What are the different types of facsimiled materials?Thousandth Microfossils- first animals on Earth -include tiny sponges Dedicated faunas- -include sponges, jellyfish, and comb jellies as well as facsimiled burrows, tracks, and other traces from unidentified animals -small, have no shells, limbs, heads, mouths, or feeding appendages -sat immobile on the seafloor, or floated in the Water Burgess Shale Faunas- sponges, jellyfish, and comb jellies, arthropods, and mollusks -tremendous increase in the size and morphological complexity of animals occurred, accompanied by diversification in how they made a living Fossil Intermediate- we can see the bridge between where we start ed and here we are now with these intermediate fossils How are rocks in fossils preserved?What are fossil intermediates? What was the Cambrian Explosion? When did it occur? About 563 million years ago What is a mass extinction? How many are there in the paleontologist record? Result from extraordinary, sudden, and temporary changes in the environment , 5 records What is the sixth mass extinction? The ongoing extinction of Earth's creatures caused by humans What are some of the putative causes for the Permian mass extinction? When did it occur? What percentage of species went extinct? 0% 251 million years ago When was the KIT mass extinction? 65 million What is the evidence that points to an asteroid strike as the trigger of the KIP extinction?Sedimentary rocks that formed at the KIT boundary contain very high amounts of iridium (rare on Earth, common in meteorites) -In Haiti, shocked quartz and micrometeorites are abundant in rock layers from this time period -The huge crater off th e coast of Mexico Yucatan Peninsula Review the timing and general characterizations of the Paleozoic-saw the origin and initial diversification of the animals, land plants, and fungi, as well as the appearance of land animals, Pre-Cambrian-life was exclusively unicellular for most Of Earth's history -oxygen was virtually absent from the oceans and atmosphere for almost 2 billion years after the origin of life, Mesozoic- extinction of dinosaurs -in terrestrial environments of the Mesozoic, gymnosperms were the most important plants and dinosaurs were the most important vertebrates, Cenozoic-on land, angiosperms were the most important plants and mammals were the most important vertebrates and Cambrian Phylogeny How does the principle of parsimony apply to phylogeny reconstruction? Deer parsimony, the most likely explanation or pattern is the one that implies the least amount of change -a computer compares the branching patterns that are theoretically possible and counts the number of changes in DNA sequences required to produce each pattern Define the following terms: contemporary-a trait found in certain groups of organisms that exists in no others -homologous trait (inherited from a common ancestor), Primitive A structure which is NOT exclusively shared only by all members of a group by virtue of descent from a common ancestor -cannot be used to extinguish between members of a group because all actually or ancestrally possess the Structure -Example: Vertebrae are possessed by all birds but also by all other vertebrates.Possession of vertebrae cannot be used to distinguish the birds from other batteries since all batteries including birds share that trait, ancestral-A trait shared by all members of a group through a common ancestor. , derived-A structure which IS exclusively shared ONLY by all members of a group by virtue of descent from a common ancestor -Example: Among vertebrates, feathers are possessed by all birds ND by NO OTHER VERTEBRATE -Possession of feathers CAN be used to didst anguish the birds from other batteries since no batteries except birds share that trait.. Of the above which provide the only real evidence for relationship? Derived Trait How do you establish if a character is derived or ancestral (hint: outgrip and ingrown)- Assume that the character in the outgrip is ancestral.Fifth character is different in the ingrown, then it is considered derived -To determine whether a character is ancestral or derived compare the character in the ingrown with that of the outgrip Define: monopolistic-an evolutionary unit that includes an ancestral population and all of its descendants but no others (also called a clawed or lineage), paralytic-an evolutionary unit that includes an ancestral population and some but not all of its descendants -meaningful unit in evolution, polytechnic-composed of unrelated organisms descended from more than one ancestor. Be able to recognize the above terms within the context of a phylogeny tree. O f the above terms which one is preferred? – monopolistic group Which is most likely the reality of any group? Reparability group Prokaryote (study sections 28. And 28. 3) What feature has contributed significantly to bacterial diversity? Be able to differentiate been gram-positive- have cell walls composed of a thick layer of pedagogical -bacteria that look purple when treated with a gram strain and gram-negative-bacteria that look pink when treated with a gram stain bacteria have a cell wall composed of a thin layer of pedagogical and an outer phosphoric layer bacteria. Review bacterial metabolic diversity (heterodox-acquire carbon containing compounds from other organisms, lithograph-oxidize inorganic ions such as ammonia or methane to fuel cellular aspiration etc. What features distinguish Reach-no nuclear envelope -circular chromosome -all unicellular -flagella spin like bacterial flagella, but in a distinctive molecular composition have unique phosphoric in their plasma membranes, Bacteria-no nuclear envelope -have pedagogical in their cell walls -flagella spin like propeller -almost all unicellular and Eukaryote-nuclear envelope -flagella undulate back and forth? Are prokaryote monopolistic-yes, because there are two main lineages that diverged very early in the history of life Protests (study sections 29. 1 , 29. 2 and 29. ) What is the domain Eukaryote? What is the endometriosis origin of eukaryote – who proposed it and what is the evidence supporting it?Mitochondria are most closely related to what group of bacteria – to what group are chloroplasts most closely related? Do protests form a monopolistic group? What groups must be included? Land Plants (study sections 30. 1 and 30. 3) What group is most closely related to land plants? Green Algae What features were the main features that allowed plants to inhabit and subsequently diversify on land? Terrestrial habitats have more sunlight and more CA than aquatic habitats -Preventing water loss: cuticle and stomata -upright growth and vascular tissue Review the general features of land plant phylogeny. What were the major features to evolve over the course of land plant history?

Anonymous

INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and Challenges Pankaj Chandra Nimit Jain W. P. No. 2007-03-07 March 2007 The main objective of the working paper series of the IIMA is to help faculty members, Research Staff and Doctoral Students to speedily share their research findings with professional colleagues, and to test out their research findings at the pre-publication stage INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and ChallengesPankaj Chandra Nimit Jain Indian Institute of Management Ahmedabad Vastrapur, Ahmedabad 380015 [email  protected] ernet. in, [email  protected] ernet. in Abstract The logistics industry in India is evolving rapidly and it is the interplay of infrastructure, technology and new types of service providers that will define whether the industry is able to help its customers reduce their logistics costs and provide effective services (which are also growing). Changing government policies on taxation and regulation of service providers are going to play an important role in this process.Coordination across various government agencies requires approval from multiple ministries and is a road block for multi modal transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customers. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making. In this paper, we provide a perspective on these issues, outline some of the key challenges with the help of secondary information, and describe some interesting initiatives that some firms & industries are taking to compete through excellence in managing their logistics.IIMA INDIA Research and Publications 1 Introduction The Indian economy has been growing at an average rate of more than 8 per cent over the last four years (Srinivas, 2006) putting enormous demands on its productive infrastructure. Whether it is the physical infrastructure of road, ports, water, power etc. or the digital infrastructure of broadband networks, telecommunication etc. or the service infrastructure of logistics – all are being stretched to perform beyond their capabilities.Interestingly, this is leading to an emergence of innovative practices to allow business and public service to operate at a higher growth rate in an environment where the support systems are getting augmented concurrently. In this paper, we present the status of the evolving logistics sector in India, innovations therein through interesting business models and the challenges that it faces in years to come. Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire inbound and outbound segments of the manufacturing and service supply chains.Of late, the logistics infrastructure has received l ot of attention both from business and industry as well as policy makers. However, the role of managing this infrastructure (or the logistics management regimen) to effectively compete has been slightly under-emphasized. Inadequate logistics infrastructure has an effect of creating bottlenecks in the growth of an economy, the logistics management regimen has the capability of overcoming the disadvantages of the infrastructure in the short run while providing cutting edge competitiveness in the long term.It is here that exist several challenges as well as opportunities for the Indian economy. There are several models that seem to be emerging based on the critical needs of the Indian economy that can stand as viable models for other global economies as well. Chandra and Sastry (2004) have pointed towards two key areas that require attention in managing the logistics chains across the Indian business sectors – cost and reliable value add services. Logistics costs (i. e. inventor y holding, transportation, warehousing, packaging, losses and related administration costs) have been estimated at 13-14 per cent of Indian GDP which is higher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal, 2006a). Service reliability of the logistics industry in emerging markets, like India, has been referred to as slow and requiring high engagement time of the customers, thereby, incurring high indirect variable costs (Dobberstein et. al, W. P. No. 2007-03-07 Page No. 3 IIMA INDIA Research and Publications 2005).However, the Indian logistics story is one with islands of excellence though there has been a general improvement on almost all parameters. It is this aspect that we explore further in this paper. The paper is organized as follows: the next section gives a brief introduction of some of the peculiarities of the Indian logistics sector. In section 3 we discuss the determinants of growth in this industry. In section 4 we prov ide some interesting initiatives that point towards a renewal of the sector. The challenges facing the sector are discussed in the last section. 2 Some Peculiarities of the Indian Supply ChainsThe Indian logistics sector has typically been driven by the objective of reducing transportation costs that were (and often continue to be) inordinately high due to regional concentration of manufacturing and geographically diversified distribution activities as well as inefficiencies in infrastructure and accompanying technology. Freight movement has slowly been shifting from rail to road with implications on quality of transfer, timeliness of delivery and consequently costs except for commodities which over long distances, predominantly, move through the extensive rail network. More on the infrastructure issues later.Figure 1 shows the relative value of transportation costs vis-a-vis other elements of the logistics costs in India. The transportation industry is fragmented and largely unorga nized – a large number of independent players with regional or national permits that carry freight, often with small fleet size of one or two single-axle trucks. This segment carries a large percent of the national load and almost all of the regional load. This fragmented segment comprises owners and employees with inadequate skills, perspectives or abilities to organize or manage their operations effectively.Low cost has been traditionally achieved by employing low level of technology, low wages (due to lower education levels), poor maintenance of equipment, overloading of the truck beyond capacity, and price competition amongst a large number of service providers in the industry. Often, one finds transportation cartels that regulate supply of trucks and transport costs. However, the long run average cost of transport operations across the entire supply chain may not turn out to be low. W. P. No. 2007-03-07 Page No. 4 IIMAINDIA Research and Publications Figure 1: Elements of Logistics Cost in India Trans por tation 40 War e hous ing, Pack aging & Los s e s 24 26 Inve ntor y Or de r Pr oce s s ing & Adim ins trative 0 5 10 10 15 20 25 30 35 40 45 percent contribution Source: Sanyal (2006a) Table 1 gives a breakup of the logistics cost across different sectors of the Indian industry and the changes therein over the last five years. It shows how the logistics spend is increasing, sometimes dramatically, across various industrial sectors. Steel, harmaceuticals, food & agro-business, and auto have also been the sectors that are growing most rapidly in the national economy – it is no surprise that their logistics costs have been increasing at a faster rate. A few observations are in order here. The low change in order processing & administrative costs in the cement sector could possibly be due to the use of call centers by various producers for order processing and dispatch planning. Steel and pharmaceutical sectors have seen maximum changes in compon ent costs.The distribution practice of pushing goods down the channel might be responsible for high increase in the inventory and warehousing costs in the pharmaceutical industry. Investments in new cold chains and losses might be the causes of high change in the warehousing, packaging & losses related costs. Warehousing, has also been typically dominated by small players with small capacities and poor deployment of handling, stacking and monitoring technologies. While it has had detrimental effect on almost all sectors, the food sector has been the one that has suffered the most due to low investment in cold chains and allied machinery.Erratic power outages have also meant low dependence on technology and a more manual operation. Another fact that has affected both the location as well cost of operating a W. P. No. 2007-03-07 Page No. 5 IIMA INDIA Research and Publications warehouse has been the â€Å"octroi tax1. † Firms have been locating warehouses outside city limits. Ta ble 1: Distribution of Logistics Costs across Some Sectors (2000-2005) Logistics Cost Components (in US $ mn) Transport ation Inventory holding Warehousing, packaging & loses Order processing & administrative Total Logistics cost SectorAuto Cement Consumer Durables FMCG Food Garment Pharmaceutical Steel Source: IAEIS 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 285. 0 406. 5 20. 3 50. 6 55. 4 4. 8 331. 9 398. 9 11. 2 201. 5 280. 7 13. 2 398. 7 524. 5 21. 0 337. 3 454. 4 19. 5 174. 0 310. 0 22. 7 438. 3 693. 6 42. 5 171. 0 243. 9 12. 2 30. 4 33. 3 2. 9 199. 1 239. 3 6. 7 120. 9 168. 4 7. 9 239. 3 314. 7 12. 6 202. 4 272. 11. 7 104. 4 186. 0 13. 6 263. 0 416. 1 25. 5 185. 3 264. 3 13. 2 32. 9 36. 0 3. 1 215. 7 259. 3 7. 3 131. 0 182. 5 8. 6 259. 2 340. 9 13. 6 219. 2 295. 3 12. 7 113. 1 201. 5 14. 7 284. 9 45 0. 8 27. 7 71. 3 101. 6 5. 1 12. 7 13. 8 1. 2 83. 0 99. 7 2. 8 50. 4 70. 2 3. 3 99. 7 131. 1 5. 2 84. 3 113. 6 4. 9 43. 5 77. 5 5. 7 109. 6 173. 4 10. 6 712. 6 1016. 4 50. 6 126. 5 138. 5 12. 0 829. 6 997. 3 27. 9 503. 8 701. 8 33. 0 996. 8 1311. 2 52. 4 843. 2 1135. 9 48. 8 434. 9 775. 0 56. 7 1095. 7 1734. 0 106. 4 They delay moving goods into retail network as late as possible.It has also led to the development of a unholy business-government nexus to avoid the tax and extract rents. Use of technology is quite limited – both IT and engineering equipments in order to increase productivity and service. An in-appropriate evaluation of the diverse benefits of technology has led to higher usage of manual labour across the logistics industry whether An entry tax on goods coming into a city. The tax is a major source of revenue for city municipal corporations. W. P. No. 2007-03-07 1 Page No. 6 IIMA INDIA Research and Publications it is in the distribution activities or within pla nts.Many firms try to compete through the factor advantage of low wages which have necessitated hiring low or no skill personnel thereby sacrificing productivity related gains in the long run. Understanding the linkage between inventory and transport planning is a key to reducing operational cost of distribution. Chandra and Sastry (2004) identify transport & dispatch planning as an area of concern in a survey of manufacturing firms in India. Ninety eight per cent of sample firms in that survey have a contract with trucking companies for making dispatches and only 11 per cent own their own fleet of trucks.While 36 per cent of these firms use third party logistics (3PL) service providers for making dispatches, about 30 per cent use 3PL service providers for procuring their material from their suppliers. Somehow, transport planning has remained a unglamorous area within Operations despite the fact that about 10 per cent of the cost of sales comes through physical distribution (Sanjeev i, 2003). Transport planning (e. g. , optimal dispatch quantities & frequency of dispatch, vehicle routing, loading pattern in the trucks etc. ) does not appear to have received the required attention.For example, in the same survey, only 21 per cent of sample firms report the use of some software for scheduling dispatches. It is worth understanding the structure of the Indian supply chains, in aggregate, to get a better appreciation of many of the issues raised earlier. In Figure 2 Chandra and Sastry (2004) present the structure of the supply chain of a sample of firms. It can be seen that about 4 per cent of firms have less than five suppliers, about 85 per cent of firms have less than five plants, about 14 per cent of firms have less than five regional distributors, and about 9 per cent of firms have less than five retailers.A similar statistics is obtained for other ranges of suppliers, plants, distributors, and retailers. What is worth noting is that 63 per cent of firms have m ore than 100 suppliers, about 39 per cent of firms have more than hundred distributors, and 77 per cent of firms have more than hundred retailers. In addition, about 17 per cent of firms claim to have more than 500 suppliers. The same for distributors and retailers is 22 and 54 per cent respectively. This is perhaps where difficulties in managing logistics in India lie – larger the number of suppliers or distributors, higher is the cost of coordination.W. P. No. 2007-03-07 Page No. 7 IIMA INDIA Research and Publications Figure 2 : Structure of the Supply Chain of Sample Firms 90 80 70 Percent of Firms 60 50 40 30 20 10 5000-10000 1000-2000 2000-5000 500-1000 100-500 50-100 10-15 15-25 25-50 0 5-10 0-5 more than 10000 Range Suppliers Plants Approved Retailers Regional Distributors Source: Chandra and Sastry (2004) When we look at the spatial distribution of both plants and suppliers, the above statement becomes even stronger. Of the sample firms that operate more han one plant , 48 per cent of these plants are located more than 100 kilometers away from each other, 33 per cent of these plants are located more than 500 kilometers away from each other and 18 per cent of these plants are located more than 1000 kilometers from each other. Similarly, on an average, only 4 per cent of suppliers are located within 5 kilometers of the manufacturing plant, about 13 per cent are located within 5-25 kilometers of the plant, 16 per cent are located within 25-100 kilometers of the plant and about 67 per cent of suppliers have facilities that are more than 100 kilometers away from the plants.Location policies of the past may have forced some firms to locate plants away from each other. However, this may be coming to haunt today as the cost of coordination increases and the ability to provide quick response to customer requirements might reduce. This problem gets exacerbated with suppliers. Manufacturers have to either develop suppliers separately for each location (ther eby increasing the number and affecting consistency in quality, price & delivery times) else material has to travel longer distances if there is a common supplier to all plants. W. P. No. 2007-03-07Page No. 8 IIMA INDIA Research and Publications The logistics challenge in such an environment is immense – build the infrastructure, manage the requirements of a changing structure of various sectoral supply chain, change industrial policies to facilitate efficient production and movement of goods and services, deploy effective managerial practices and technology to enhance the competitiveness through better management of logistics networks, and develop new models for new sectors especially in the service sectors as well as traditional areas like agri-business etc.It must be mentioned that the logistics industry in India is transforming itself very interestingly despite its peculiarities by developing innovative business models and by chipping away at the such structural and polic y based rigidities. In a later section, we discuss some of these innovative initiatives that are leading the renewal of the logistics industry in India. 3 The Changing Logistics Infrastructure With rising consumer demand and the resulting growth in global trade, the role of infrastructure support in terms of rails, roads, ports & warehouses hold the key to the success of the economy.In this section we provide a quick overview of the status of the logistics infrastructure in India and the current initiatives, both private and public, in that area. Goods are transported predominantly by road and rail in India. Whereas road transport is controlled by private players, rail transport is handled by the central government. With the second largest network in the world, road contributes to 65 per cent of the freight transport (Rastogi, 2006). Road is preferred because of its cost effectiveness and flexibility.Rail, on the other hand, is preferred because of containerization facility and ease in transporting ship-containers and wooden crates. Sea is another complementary mode of transport. Ninety five per cent of India’s foreign trade happens through sea (Deccan Herald, 2006). India has 12 major ports, six each on the West and East coasts and 185 minor ports. Table 2 maps the various modes on different performance indicators, clearly indicating the vitality and importance of road transport in Indian economy. There is also evidence of an, across the board, increase in freight traffic for all modes indicating an increased logistics activity.For instance, the per cent change in road, rail, air and sea cargo traffic has increased, between 2001 and 2005, from 5 to 14 per cent, 4 to 7. 5 per cent, 6 to 20 per cent and 3. 5 to 11 per cent respectively (CMIE Database, 2006). W. P. No. 2007-03-07 Page No. 9 IIMA INDIA Research and Publications Table 2: Comparison Chart for Various modes Rail 214760 10. 66 0. 11 Road 3487538* 5. 12* 3. 34 Sea 806 7. 9 12 Number (wagons, tr ucks, ships) Freight Capacity(mn ton) Route Length (mn km) /Number of major ports Freight Revenue (US $ bn) 7. 00 coal, steel, petroleum, primary metals 38. 64 automobile, electronic items, garments etc. 304 iron ore, coal, petroleum (and industrial and consumer products on the outbound export) Major Products Source: IAEIS, 2005-2006, Financial Express, 2006a *This figure is for 2002-03 1 US$ = Rs 44 In keeping with the increasing demand for road transportation, the National Highway Authority of Indian (NHAI) has been strengthening and widening national highways in multiple phases. As part of the National Highways Development Project, the work on the development of golden quadrilateral (connecting Delhi, Mumbai, Chennai and Kolkata) and the North-South and East-West links were started in 1998.It will build 13000 km expressways that would connect the nation (Surabhi, 2006). NHAI is investing about $650mn towards the development of an Intelligent Transportation System (ITS) which will make transport services on the highways (like reducing congestion, advance signaling, medical assistance, accident management, etc. ) efficient and automating many processes like toll collection etc. (Sanjai, 2007). Because of the growing opportunity and potential for high revenue, the Ministry of Railways has been taking measures to expand the rail connectivity and recapture the market share of freight business.By focusing on improving wagon utilization, the Railways have managed to reduce the freight cost from 61 paise2 per net tonne km (ntkm) in 2001 to 56 paise per ntkm in 2005 (Rastogi, 2006). At present, goods train run on same 2 100 paise = 1 Rupee W. P. No. 2007-03-07 Page No. 10 IIMA INDIA Research and Publications railway tracks as passenger trains at an average speed of around 25 kmph (Gill, 2006). With the proposed dedicated west and east freight corridors, the goods trains are expected to run at 100kmph. The West and East rail corridor of 1469-km and 1232-km will be bu ilt with an investment of $2. 0 bn and $2. 40 bn respectively and will be equipped with the latest centralized traffic control systems (Acharya, 2006a). Indian Railways has also decided to collaborate with bulk users of freight transport to build the rail network in a Public Private Partnership (PPP) mode. The first project on this line comprises nine public and private sector companies that are building a 82-km rail line between Haridarpur and Paradip at a cost of $ 120mn (Telegraph, 2006). Recently several steel companies have also shown interest in linking iron and coal mines in Orissa with a 98-km rail line (Business Standard, 2006).Multi-modal transport in India was a monopoly of the Container Corporation of India till 2005. With licenses being given to 13 new private players (Acharya, 2006b), rail trade should improve considerably. In order to encourage trade by small scale industries, Indian Railways has started a â€Å"road-railer†system where container vehicles are c apable of running both on highways hauled by trucks and on rail (Guha and Sinha, 2006). In 199899, the Konkan Railway (one of the railway zones in South-Western India) pioneered the ‘roll-on, roll-off' (‘RO-RO') concept between Mumbai (Kolad) and Goa (Verna).Privately owned trucks are loaded with their goods which are driven on to a rake of flat cars and are carried (trucks and their cargo) to the destination. In 2005-06, the ports handled 456. 20 million tonnes of cargo traffic. This is expected to increase to 700 million tonnes by 2011-12. In keeping pace with the growing demand, the government plans to increase port capacities to around 1 billion tonnes per annum in the next six years (Raja, 2006). Under the National Maritime Development Programme (NMDP), the government is encouraging public-private partnership to build and maintain ports.This scheme will cover 276 port related projects at an investment of $12. 40 bn (Raja, 2006). With rising congestion levels at majo r ports and with high average turnaround time, the government has decided to develop minor ports in seven states to ease the traffic of major ports (Financial Express, 20006b). Tables 3 the operational performance of various ports in India – while there is an improvement in performance, the pace is slow. The estimated cost of this development is expected to be around $350 mn. Further, private sector is likely to invest $ 7. 67 billion over the next six years.W. P. No. 2007-03-07 Page No. 11 IIMA INDIA Research and Publications Table 3: Average Turnaround Time At Ports (in Days) Port Chennai Cochin Haldia Jawaharlal Nehru Kandla Kolkata Marmugao Mumbai New Mangalore Paradip Tuticorin Vishakhapatnam Average Source: IAEIS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 CAGR 6. 40 5. 80 5. 30 3. 70 4. 60 3. 80 (9. 90) 3. 23 3. 10 2. 37 2. 19 2. 22 2. 33 (6. 32) 5. 21 3. 96 4. 01 3. 02 2. 87 3. 00 (10. 45) 1. 72 2. 48 2. 34 2. 28 2. 04 1. 84 1. 36 6. 15 4. 72 6. 55 5. 94 5. 06 4. 62 (5. 56) 6. 59 5. 50 4. 71 4. 47 4. 29 4. 7 (8. 75) 4. 30 4. 25 2. 04 3. 86 4. 47 4. 35 0. 23 5. 60 5. 20 5. 47 5. 06 4. 10 4. 21 (5. 55) 3. 80 2. 89 2. 73 1. 90 2. 35 2. 96 (4. 87) 3. 89 4. 16 3. 99 3. 37 3. 42 3. 41 (2. 60) 6. 39 4. 10 4. 11 3. 59 2. 59 2. 66 (16. 08) 4. 75 3. 71 3. 51 3. 72 3. 33 3. 20 (7. 60) 4. 84 4. 16 3. 93 3. 59 3. 45 3. 38 (6. 92) Currently, fifteen private sector projects are operational at various major ports and four more projects are under implementation (Raja, 2006). One of them aims to build the deepest port in the world at an investment of $ 1bn (Financial Express, 2006c).This project is handled by a three-firm Chinese consortium with a Mumbai-based partner, Zoom Developers. Interestingly, firms like Ambuja Cement have been using barges for transport of clinkers from their factories to crushing and packaging plants all over the coast, thereby, reducing transport costs considerably. It can be seen that there is a fury of activity in enhancing the in frastructure capacities in the country. 4 Determinants of Logistics Growth in India The Indian logistics business is valued at US$ 14bn and has been growing at a CAGR of 7-8 per cent.As mentioned earlier, the logistics cost represents 13-14 per cent of the country’s GDP. The market is fragmented with thousands of players offering partial services in logistics; it is estimated that there are about 400 firms capable of providing some level of integrated service (Mahalaksmi, 2006). The economy is expected to grow around ten per cent over the next ten years and sectors like chemicals, petrochemicals (especially distribution), pharmaceuticals, metals and metal processing, FMCG, textile, retail and automobile are projected to grow the fastest.New business models are emerging as new firms, both domestic and foreign, enter the market. As a result of the ensuing competition, linkages with global supply chains and domestic market growth W. P. No. 2007-03-07 Page No. 12 IIMA INDIA Resea rch and Publications promise to change the face of logistics industry beyond recognition. In this section, we discuss how these are going to determine the growth of the sector. The scale of operations in manufacturing is changing and so are their markets and sourcing geographies.Growth in manufacturing in India has happened across clusters that are located in different parts of the country, e. g. , Ludhiana, NCR, Baddi and Dehradun in North, Rajkot, Jamnagar, Pune and Mumbai in West (along with Ankleshwar, Vapi, Aurangabad, and Kolhapur and most recently Kutch), and Coimbatore, Vishkahpatnam, Bangalore, Hosur, Chennai, Pudduchery and Sriperumbudur in the South. Assembly plants at these locations are being fed with raw materials and intermediate products from all over the country and abroad (as well as these locations).Moreover, distribution networks with emerging hubs in Indore and Nagpur (i. e. , Central India) supply all over the country and abroad. This is going to increase the n ature and extent of movement of goods and services across the country. This has been accompanied by the expansion of domestic production capacity (e. g. , ORPAT in Morbi has added capacity to produce 40,000 units of quartz clocks and time pieces at a single location) as well as a big MNC entry into the Indian manufacturing scene (e. g. NOKIA’s new factory at Sriperumbudur produces 1 million mobile phones per month). As the volume of production grows, so will the extent of movement of goods either to the ports for export or to the rest of the country. Some of the large players to enter (or expand significantly) the Indian market recently have been Reliance Retail, Big Bazaar Hypermart, Pantaloon and RPG in Retail; Nokia, LG, Samsung, Motorola, Sony, Blue Star in Consumer Electronics; Bajaj, Hero Honda, Maruti, Honda, Toyota, Audi,Volkswagen, Renault, Volvo in the Automotive sectors; Holcim in Cement; etc. It can be expected that their operations will drive the growth of logist ics industry. The liberalizing Indian economy is experiencing entry of large domestic and global firms in new businesses as well as enlargement of distribution network of many regional Indian firms. The announcement of large retail projects by Reliance and Bharti (in collaboration with Wal-Mart) will bring new technology, add additional warehouse capacity and will require fast and reliable movement of goods across the country.Reliance is thinking of establishing large warehouses in Thailand to take advantage of low cost sourcing from South-East Asia once the Free Trade Agreement with Thailand (as well as ASEAN) gets finalized. Similarly, regional food & grocery retail leaders like W. P. No. 2007-03-07 Page No. 13 IIMA INDIA Research and Publications Subhiksha who are present very extensively in the South Indian market are now entering the rest of the country with more than 600 new retail stores in 2007. Their logistics strategy and needs are transforming very significantly with this nationwide expansion.New retail chains are entering the non-metro towns and non-State capitals. It may be mentioned that the growth of the courier industry post-liberalization has helped change the parameters of service evaluation in the industry from cost alone to cost, time, and reliability. This sector has also seen a number alliances between regional and local players especially in the small package (less than 500 grams) market thereby creating networks of small players who are not only cost effective but also more flexible than the large national players.This segment of the industry has taken advantage of the large manpower and is gradually moving away from â€Å"Angadiyas† or manual inter-city couriers to a more organized network that shares transport infrastructure (and even consolidates sub-packages from various small couriers in a single large courier bag to be transported by air cargo or road transport rather than these sub-packages being carried by several manual couriers on the train; the courier firms are gaining on service and are sharing fixed costs).The entry of large third party logistics (3PL) carriers like Federal Express and DHL and the expansion of domestic networks of Indian firms like Gati and Shreyas Shipping is also transforming the nature of services and the business practices across the sector. Table 4 gives an idea of the investment plans announced by the various firms for the coming financial year and gives a sense of their increasing activity. Another trend driving growth in this sector has been the consolidation amongst the logistics player.Mergers & Acquisitions amongst Indian and MNC logistics firms is starting to increase the reach of MNC 3PLs in the domestic Table 4: Investment Plans of Major 3PL Service Providers Firms DHL TNT Gati *Shreyas Shipping and Logistics Investment Details/ Plans (2007-08) (in US $ mn) 260 115 200 350 Source: Baxi (2006), Sanjai (2006a) W. P. No. 2007-03-07 Page No. 14 IIMA INDIA Research an d Publications market while consolidating the business (e. g. , DHL acquired Blue Dart, TNT acquired Sppedage Express Cargo Service, Fedex bought over Pafex etc. ).Consolidation is expected to be beneficial to both the service providers as well as the consumers. Initially MNC 3PL firms were providing only custom clearance and freight forwarding facility to their international clients. With the logistics market growing we should see a shift in this trend. The complexity of managing the supply chain in the pre-consolidation era is illustrated through the following scenario at Nokia (Figure 3) . Logistics activity for Nokia’s India Hub was maintained by a large number of Figure 3: Typical Logistics Supply Chain of NokiaDHL, Panalpina Inbound logistics Nokia Hub in Sriperumbudur Gati, Blue Dart Domestic Outbound logistics UPS Warehouse in India Export Market International Outbound logistics DHL Source: Mishra et al. (2006 service providers. Coordination and handover was a problem at times. With DHL acquiring Blue Dart, it is now able to provide seamless end-to-end integrated supply chain solutions. Downstream distribution channels have also seen some consolidation.Manufacturing firms, particularly, in the FMCG sector have started to reduce the number of wholesalers (and at times, distributors) so as to increase the reach and consequently the returns to each wholesaler. This also induces them to invest in new productivity enhancing technology and effective managerial practices. Technology in the logistics chain is being upgraded bringing better visibility on customer off-takes (though an absence of cash registers and the accompanying regulatory discipline to avoid tax evasion stand in the way of automated data updation).Introduction of more efficient transport technology and mobile communication has the potential of changing the logistics practices in the industry. Increasing competition and the low penetration of IT also implies that the scope for change is immense and imminent. The agri-business sector’s supply chain, for example, has changed significantly with increasing investment in coldchains across the country. With this, fruits and vegetables are being transported long distances (often more than 1500 kms) and milk grid is able to pickup and deliver liquid W.P. No. 2007-03-07 Page No. 15 IIMA INDIA Research and Publications milk from and to remote areas more frequently. Here the role of cooperatives like AMUL has been exemplary both in increasing the size of the distribution network and also in reorganizing the supply network very efficiently along with enormous buildup of social capital – a pre-requisite for growth in emerging economies (Chandra and Tirupati, 2003). Low penetration of hand eld technologies for order processing and tracking, product tracking and material handling accessories, as well as IT for improved decision making can be seen as opportunities for growth. Mobile technologies also hold the potent ial for rapidly using information for real time decision making as well as for coordinating both the inbound and outbound logistics. Indian customers exhibit strong value and variety seeking behaviour hence developing capabilities in the process of product and service delivery will induce loyalty (i. e. , process loyalty).Government policies have been another driver of change in the logistics industry. The trend towards a higher road cargo traffic as compared to rail is going to require better logistics control and coordination. The golden quadrilateral road project and the east & west rail corridors are expected to change the reactiveness of Indian firms through shorter lead times as well as lower maintenance costs on the transport equipment. They also have the potential of reducing the procedural delays on highways by reducing the number of checks and related stoppages of vehicles.Its impact on perishable good will be most significant. Thirteen States and three UTs have already am ended the State laws allowing private sector participation in direct purchases of farm produce from farmers (Ahya, 2006) which is making procurement more efficient and is bringing better technology as well as products in the rural production and distribution network (e. g. , see ITC echoupal in the next section). Banks have developed venture capital funds for logistics players. Small Industries Development Bank of India or SIDBI, for instance, has invested $ 2. mn in the Mumbai based firm Direct Logistics (Baxi, 2006). The unbundling of the logistics supply chain (both the physical pickup, storage and movement of goods as well as allied services like invoicing, order management, freight forwarding, customs clearance, octroi tax management etc. ) will lead to business opportunities and add value to the customers. An interesting example is that of Reliance Connect Service Centres that have been established on Indian highways by Reliance industry along with petrol stations.The Connect Centres provide a place for truckers to relax (sometimes with overnight stay facilities), send information (including data) to parent firms on their location, completed transactions etc. , receive material/instructions from the firm, remit money to parent firm, W. P. No. 2007-03-07 Page No. 16 IIMA INDIA Research and Publications etc. It has become a one-stop shop for truckers and their companies to keep in touch. Similarly, once VAT is introduced, it will simplify the process of goods servicing and will lead to rationalizing of many operational decisions.The implication of the emergence of a strong service industry on logistics performance is not well understood. Perhaps, a new business segment will emerge that is technology driven and will help coordinate activities across business channels. For example, there is a need to integrate the flow of information, goods and services between a medical physician, a diagnostics center, hospitals & nursing homes, and retail medical outlets à ¢â‚¬â€œ all of which are un-coordinated independent entities at the moment.This could range from digital transmission of MRI scans from a diagnostics center to a computer to blood collection and delivery from physician’s various city centers to nursing homes/blood banks or directly to dispersed operation theatres. The role of a coordinating agency becomes, organizationally, valuable in such an environment. The need is to link physical logistics processes with communication technologies –building on the strengths of the IT and mobile communication industries. 5 The Renewal of the Sector: Some Innovative ExperiencesThere have been several instances of firms undertaking innovative re-design of their logistics systems or deployment of interesting business models to enhance the effectiveness of their networks in order to deliver value to their customers. Sometimes it was done to overcome an inherent disadvantage that may exist in the supply chain. In this section, we presen t a few such experiences both at the firm level and at the industry level, through brief caselets highlighting their innovative contribution. They also represent the renewal process that is transforming the logistics sector and the distribution strategy of firms.GATI3 Established at a time (in 1989) when firms in India hardly outsourced their logistics requirements, Gati has transformed itself from a cargo movement company to become one of the leading end-to-end logistics and supply chain solutions provider in India. Continuous innovation and high end technological investments to improve service 3 Source: www. gati. com, Sharma and Thakur (2006), Prowess (2006), Reddy (2007) W. P. No. 2007-03-07 Page No. 17 IIMA INDIA Research and Publications quality, speed and efficiency can be ascribed as the reasons behind their success.It is staring to connect with mass retail market in several cities through 1500 Customer Convenient Centres. It is also the first Indian company to operate in th e far-east market with its own subsidiary in Hong Kong. On the service front, there have been several firsts in India by Gati – a money back guarantee on cargo services, cash-on-delivery and a tollfree number for convenience of customers. Gati operates one of the largest road networks linking 594 districts out of a total of 602 districts in India at a turnover of $104mn in 2005-2006. It covers 3. 2 lakh4-km every day with a fleet size of 2000 trucks.Its automated shipment tracking ability has brought it closer to the customers – for example, the SMS based tracking system has allowed the customers to continuously get an update on the status of their consignment. Another feature also enables customers to get email based conformation of any delivery. Gati has also transformed the warehouse management practices in India with its modern system, WMS – a web based warehouse management system that provides both functionality and flexibility to customers in managing thei r warehouse operations. WMS enables Gati and its customers to track inventory status in real time.Along with its transportation related capabilities, this has allowed Gati to manage the entire outbound logistics (i. e. , warehousing, transport and dealer/retailer replenishment) of Blue Star for his home air-conditioning division. Order processing times and shipping errors have decreased and customer service levels have improved, as a consequence. Currently, Gati operates with 10 warehouses and plans to setup another 25 over the next three years at an investment of $100mn. It is designing these new warehouses with mechatronic systems that could lead to a paradigm shift in warehouse management in India.It has implemented CRM and ERP systems, using IT to full advantage delivering value to the customers. AMUL5 The Kaira District Milk Cooperative Union or better known as AMUL was established in 1946 in Anand in the western State of Gujarat with an aim to remove the intermediaries in the milk procurement and distribution process and thereby increase return to milk farmers. The milk farmers were mostly marginalized members of the society and most of 4 5 1 lakh = 100,000 www. amul. org; Chandra and Tirupati (2003) W. P. No. 2007-03-07 Page No. 18 IIMA INDIA Research and Publications hem barely poured a few litres of milk each day. They, however, depended on this for their livelihood and any money lost to the middleman or to uncertainty in the environment meant a threat to their existence. Thus was born AMUL (which means invaluable in Hindi)! The Story of AMUL is an extraordinary story of vision, effort and power of networks for the benefit of the poor. From being a net importer of milk in 1947 when India became independent, India has now emerged as the largest milk producer in the world. This remarkable story has been scripted by a network of cooperatives called AMUL.The AMUL network is coordinated by the Gujarat Cooperative Milk Marketing Federation (or GCMMF) which markets milk and milk products that are produced by 12 Milk Unions (each having several factories) one of which is AMUL at Anand. The Unions are spread in twelve districts of Gujarat. Each Union collects milk from farmers through cooperative Village Societies. (This structure is now replicated in almost all the States of India. ) In 2005-2006, GCMMF had a sales turnover of $860mn through milk and milk products (its Unions or plants produce 15 categories of milk products with several products in each category).The 12 Unions collect about 6. 3million litres of milk every day from 2. 5 million farmers through 11,962 Village Societies. (with an annual collection of 2. 28 bn litres in 20052006). Each village society may have 100 to 1000 member farmers who pour milk twice a day. Twice daily, about 500 trucks collect milk from these Village Societies and bring them to either of the five chilling centers or the processing plants (or Unions). The Unions process the liquid milk – produ ce milk of various types for consumption, convert some to powder as inventory and use both powder and liquid milk for producing milk products.These products are distributed to consumers through a channel comprising 4000 stockists (or distributors) and 5,00,000 retailers. It is not difficult to imagine the complexity of coordinating such a network of perishable products with an explicit social objective, in addition to a commercial one. The network realized the need for a unique model to deliver value to customers and through that serve the key objective of setting up of the cooperative – making a producer out of a poor consumer and helping her get better returns. W. P. No. 2007-03-07 Page No. 19 IIMA INDIA Research and PublicationsBriefly, we will illustrate the unique mechanisms used by this network to coordinate the complex supply chain through the intervention of a number of third party service providers (distributors, retailers, logistics service providers and IT support groups). The network practices frequent delivery and works with low inventory levels in the chain, supported by extensive information network and IT kiosks at the milk pickup locations that provide a variety of services. Payment to farmers for RM procurement is instantaneous (well, almost! ) – during the same or in the next pouring shift by the Village Society staff.Milk is carried in cans by trucks (twice daily) or in chilling trucks, once in a day, to the plants. The routes of the trucks are well established and the arrival timetables at each Society well known and rarely is there any delay. This helps provide visibility to every member of the chain and improves the return on investment in the channel. The network operates with a zero stock out through improved availability of products and quick delivery. Disciplined planning to reduce variability at each stage helps in maintaining timeliness in the channel.GCMMF coordinates the production plan between the twelve Unions and ensures matching of geographic markets with supplies. TQM and Hoshin Kanri are the key tools used to plan and implement daily production and change programmes – these have facilitated a six-sigma performance throughout the network and has led to a doubling of sales revenue in the last ten years. Most interestingly, AMUL has the largest market share in every product category that it competes in – its competitors are both large MNCs and large & small Indian firms.AMUL illustrates how good managerial practices can help bridge the gap between profits for the supplier and low cost, highy quality products for consumers – all through exceptional coordination of logistics operations across an extensive network. AMUL operates with one umbrella brand for products from all its member Unions – a testimony to strong quality and cost coordination across all Unions and Village Societies. In addition, its has been singularly responsible for pulling out several million o f its members from poverty, ill health and illiteracy through its business model (called Anand Pattern) and social programmes.For details on this case study see Chandra and Tirupati (2003). W. P. No. 2007-03-07 Page No. 20 IIMA INDIA Research and Publications The DABBAWALLAHs of MUMBAI6 The â€Å"dabbawallah’s† or the ‘lunch box delivery people’ of Mumbai pickup and deliver lunch boxes from homes or restaurants and deliver it to the customer’s office – all within a specified time frame – and then deliver the empty box back to the place of pickup. It is an example of how processes can play an important role in coordinating logistics of an important service industry in India.The Nutan Mumbai Tiffin Box Charity Trust of Mumbai was established in 1891 to provide pick-up and delivery of lunch for Britishers working in Mumbai. Since then it has become the leading lunch delivery cooperative in the city. It picks-up and delivers 200,000 lunch boxes in a standard container every day and returns the same to the place of pickup. The firm has an annual turnover of about $12 mn and employs 5000 people for pickup and delivery – almost all of them are uneducated. However, there are less than 10 boxes mis-delivered or un-picked in a month!We discuss, briefly, the processes that help make this logistics network errorproof and deliver such an astonishing performance. The operations of the group has attracted global attention and won them many awards. They represent a growing group of service providers that exist as an element of the logistics network, provide niche service and generate value in return for the customer. The Trust which is organized as a cooperative is operationally organized in hierarchical teams – pick-up teams, consolidation teams, delivery teams (and then the reverse logistics for empty boxes with reversing of the functions for the teams).Typically, each dabba or the lunch box passes through more t han four pair of hands and may be transported up to 60 km each way. Pickup is done between 7. 30am-9. 00am, delivery between 12. 00 and 1. 00pm and return between 2. 00-5. 00pm. These represent tight time-windows where a team of 20-25 members (and supervised by a team leader who also fills in as a pickup person in case of any absence) pick-up lunch boxes from homes – about 30 per pick-ups person. The boxes are carried in a specialized fixture on a bicycle to the nearest train station where the boxes are consolidated by destination.A consolidation team performs this task and carries the boxes (which may have been picked by members of different teams but need to travel to the same destination geography) into the train. Often tiffin or lunch boxes are un-loaded at intermediate train stations – re-consolidated with boxes coming from other locations (i. e, cross-docked) and carried on a third train to its 6 Lecture of Mr Megde, President of the Nutan Mumbai Tiffin Box Suppl iers Charity Trust at IIM Ahmedabad, 2003; Chandra (2004) W. P. No. 2007-03-07 Page No. 21 IIMA INDIA Research and Publications estination station. At the destination station, the lunch boxes coming from various origins/cross-docking destinations, are once again segregated by the building where the delivery is made. Finally, a delivery team picks up their boxes, i. e. , boxes that they will deliver to specific owners in specific buildings, carry them on their bicycles and deliver them in the office of the owner of the box. Later in the afternoon, the same person picksup the empty box and pursues the reverse logistics and the box is ultimately delivered at its point of origin – either a home or a restaurant.With this as the complexity, what may be plausible reasons for such low errors? Contextually, the group members see their role as very important – they are responsible for delivering food to their customers – socially, it enhances their commitment to their tas k and establishes a critical customer-service provider link. Operationally, the handoff is done successfully through simplification or breaking down of tasks, codification and repetition. The designed process is simple and easy to understand for each operator.More important, each operator has a limited yet definite role. This role is one of pickup, consolidation & transfer and delivery (and the similarly for reverse logistics). Each pickup operator does not pickup more than 25-30 boxes as that is the number of addresses etc. that he can remember accurately which helps in avoiding mistakes. The lunch box is enclosed in a standard container which carries a unique code for the destination station, the building where the box is to be delivered and the floor number in that building where the office of the customer is located.Each operator recognizes a limited set of codes that are relevant to him (and does not have to learn the entire coding scheme). And finally, repetition of the task ( i. e. , same pickup location, same place for cross docking, same delivery location etc. ) helps in making the task foolproof. Of course, what helps is the linear geography of Mumbai, the punctuality of trains, relatively stable demand and strong inter-dependence between operators. It is an example of how manual logistics systems can be organized to effectively deliver value to the customer.ITC e-choupal7 The e-choupal project was launched by ITC (a large diversified company with strong FMCG presence) in 2000 in the central Indian State of Madhya Pradesh (MP) to reorganize the distribution of soyabean in rural markets. Today e-choupal reaches out to Source: www. echoupal. com, Talk by the eChoupal CEO S Sivakumar at IIMA, 2003, Mitra (2004), MBS CS (2006) W. P. No. 2007-03-07 7 Page No. 22 IIMA INDIA Research and Publications more than 3. 5 million farmers in 31,000 villages through 5,200 internet enabled kiosks and now covers a variety of agri-business products.The e-choupal was a u nique venture which aimed to eliminate the middlemen from the agricultural commodity supply chain and reduce information asymmetry for the farmers. It is an extremely profitable rural distribution system with its unique design features. The e-choupal was started with an objective to re-organize the soybean trade which was operating in an inefficient manner. Farmers used to sell their produce through government mandated markets called â€Å"mandis. † Mandi trading was conducted by commission agents who bought and sold the produce.As the produce was sold through auction by these traders, farmers would find out the market price only upon arrival at a mandi. If the buyers had purchased enough for the day at this mandi then either the auction prices fell dramatically or the farmers had to wait for the next day’s auction. While all this may have been happening at one mandi, the farmers were unaware of the auction status at other mandis where there could have been shortages. The decision regarding the quality of the produce was also dependent on the trader.Similarly, distortions in price and quality effected agro-business trading firms like ITC who were, by government law, required to purchase from the mandi and through these traders and not directly from farmers. Under the e-choupal model, kiosks were setup in villages providing farmers information in local language on agricultural inputs, best practices in farming, market price realized at various mandi auctions, weather details etc. Nevertheless, it enabled ITC to purchase products directly from farmers (through a change in the law), enhancing quality of products and significant cost reduction (e. . , it saved $5. 40 per tonne on soyabean). The e-choupal now has just two service providers in its procurement chain – the sanchalak, a person between the kiosks and the farmers who inspects the produce and based on his assessment of the quality, the price of the commodity is decided (he gets 0. 5 p er cent commission on the volume sold) and samyojak, a person who manages the ITC warehouses (he gets 1 per cent commission on transactions). Samyojaks also handle much of the logistics at the procurement hub like storage management and transportation from the hub to processing factories.ITC was able to overcome the hurdles posed by infrastructure inadequacy in villages. It uses solar energy to power the batteries of the computer kiosks and has shifted from W. P. No. 2007-03-07 Page No. 23 IIMA INDIA Research and Publications dialup connection to satellite based technology (VSAT). Farmers are now able to make informed decisions as they understand the market better leading to higher productivity. Various seed and fertilizer companies are now able to reach wider market with lesser transaction cost.The e-choupal has provided a market for more than 64 companies (to name a few, Monsanto and Nagarjuna Fertilizers). This innovative direct procurement channel is a win-win mechanism for all the involved parties. ITC is now building a rural retail infrastructure on the foundation of the e-choupal network thereby changing the rural distribution landscape. Transforming the Auto-Component Replacement Supply Chain With changing government policies and consumer preferences, the distribution supply chain of Indian companies has been effected significantly. This poses new challenges for various channel partners.We illustrate this transformation process through the lens of the auto component replacement market supply chain and discuss its implications. We surveyed 21 manufacturers and 22 channel members (distributors, wholesalers and retailers) spread equally in Northern and Western clusters of auto component Industry in India for this purpose. The auto component industry produced parts worth $6. 7 billion (2004-05) with 57 per cent of the demand coming from the replacement market (ACMA, 2005). Low entry barriers have led to a large number of players in the replacement market.T here are about 400 firms in the organized sector and more than 5000 in the unorganized sector. Another feature of this sub-sector is the long duration of ownership of vehicles in India which leads to high requirement of parts. It is also found, anecdotally, that willingness to pay for parts decreases with the length of ownership. This has led to an intense segmentation of the parts market by price. Pre–1991, this industry was still in a nascent stage. It was characterized by few manufacturers and low demand. Consequently, the distribution network was flat (Figure 4a).Availability of spare parts was a key issue with long delivery lead-times and manufacturers sought large order sizes. This also led to the growth of un-branded parts or parts branded by regional producers (often supplied by small firms) in the replacement market. The product was sold chiefly on personal relationship with the buyer; quality, brand and price were not the selling propositions. Maruti Udyog Limited h ad created a W. P. No. 2007-03-07 Page No. 24 IIMA INDIA Research and Publications network of suppliers of quality parts for its vehicles.Hero Honda had done the same for its motorcycles. Post-1991, the liberalization of the automotive industry led to an entry of many foreign auto players. Because of the impending automobile industry boom and high margins for distributors, the demand for spare auto-parts was expected to grow. The distribution channel was modified with the entry of two more channel members, i. e. , wholesalers and semi-wholesalers (Figure 4b). The latter were smaller versions of the former and locally oriented. The period 1994-2007 saw a major transformation of the distribution structure (Figure 4c).OEMs started to operate in the replacement market through a parallel supply chain selling parts through their service stations. Additionally, the entry of large number of channel members caused semi-wholesalers to move out of the supply chain – they either moved up the chain to become wholesalers or moved down to become retailers. To strengthen the coordination of this extended supply chain and to buffer against the differential tax structure across states, companies started to operate with Carry and Forwarding Agents (C&FA). Transportation related activities are carried out by all the members of the supply chain.Manufacturers use services of 3PL for transferring their stock to C&FA and distributor locations. But thereafter, the transportation activity is solely managed by channel members themselves. An analysis of the available IT infrastructure and its usage pattern for all the channel members in our sample survey indicates that there is a high deviation in the usage of IT in the replacement market supply chain. Eighty seven per cent of the sampled firms use an ERP package – most of which is customized and developed locally. The main impediment in the use of a branded packages is the high cost of purchase and mplementation. These pac kages are used to generate sales report, order from suppliers, account for the financial transactions and track the level of inventory at plant and C&FA. Manufacturers order the stock from suppliers mostly through emails. In order to track inventory in the channel, firms also made IT investments both at C&FA and within the firm. Linking the C&FA to the company website enabled firms to check stock status at the C&FA and reduce the order processing and customer response times. Larger firms are also providing a similar setup to their distributors.Since the C&FA is mostly owned W. P. No. 2007-03-07 Page No. 25 IIMA INDIA Research and Publications and managed by the firms, manufacturers are also able to check the inventory status, dispatching status and customer records. Distributors have invested primarily in computers for keeping track of the inventory and updating accounting details. On the other hand, rest of the channel partners (wholesalers and retailers) don’t even own comp uters. Parts are ordered primarily on the phone. Interestingly, most distributors were found to be following periodic review olicy while the rest of the channel members were following continuous review policy because of their low sales volume. Post 2007, with the implementation of a uniform tax structure across all states, there will be some changes in the way firms operate. The C&FA will, perhaps, become redundant as most manufacturers will prefer to deal directly with distributors. The concept of an exclusive distributor is expected to vanish. It is expected that with the increase in variety of components, distributors might become wholesalers and will stock multiple brands for the same product.Two parallel distribution channels are expected to be in operation – the OEM chain and the non-OEM chain (Figure 4d). OEM network will primarily handle the passenger car replacement parts and the non-OEM distribution network will sell parts for Light Commercial Vehicles, Heavy Commer cial Vehicles, 2-wheelers and 3-wheelers as the car customer is becoming more brand conscious even while replacing parts which comes along with superior service. Further, we perceive that the more advanced automobiles, Free Trade Agreement with other Asian countries and VAT are going to change the way the replacement market operates.There will be a rationalization of this market in terms of number of firms competing thereby leading to an improvement in quality, delivery time and availability of parts. The size of the firms is expected to increase with an emergence of large national players (in addition to OEMs). This may reduce the number of producers exclusively focusing on the local markets. W. P. No. 2007-03-07 Page No. 26 IIMA INDIA Research and Publications Figure 4a Manufacturer Figure 4b Manufacturer Distributors Distributors Retailers Institutional Buyers SemiWholesalers Wholesalers Institutional Buyers RetailersGovernment Agencies & Transport Companies Garage-station Govern ment Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners Figure 4c Manufacturer Figure 4d Manufacturer Institutional buyers C&FA OEMs Institutional buyers OEMs Wholesalers Distributors Authorized Service Stations Authorized Service Stations SemiWholesalers Retailers Wholesalers Vehicle Owners Vehicle Owners Retailers Government Agencies & Transport Companies Garage-station Government Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners W. P. No. 2007-03-07 Page No. 27 IIMA INDIA Research and Publications Challenges Ahead Several challenges remain before the Indian logistics sector and its future success will depend on the ability of the industry to overcome these hurdles. Some of these impediments are at the firm level while others are at the policy level. At the policy level, the issues of infrastructure and integration of the nation’s logistics network remain the two most critical areas that require attention. The growth of inf rastructure, since 1991, has been quite extensive (covering a wide geographical area) as well as strategic – linking the key industrial, consumption and transshipment centers.However, some imminent weaknesses need be addressed. Movement beyond the golden quadrilateral is required to bring goods from upcountry production sources to main shipment centers. The rate of growth of expressway has to increase. Poor road conditions increase the vehicle turnover, pushing the operating cost a