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News highlights from the world of supply chain and logistics that appeared in media over the last two months
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| Union Finance Minister Smt Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament on Tuesday, July 23, 2024. In her budget speech, the Finance Minister said that the government will step up the adoption of technology toward digitalization of the economy. She proposed the development of Digital Public Infrastructure Applications for productivity gains and innovation by the private sector. She added that initiatives in this direction are planned in logistics and the areas of credit, e-commerce, education, health, law and justice, MSME, and urban governance. Smt Sitharaman particularly outlined nine priority areas, including infrastructure, energy security, employment and skilling, and urban development. About the shipping industry, she informed the Parliament that "ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment." You can read the complete budget speech here for details. Preceding the Budget, the Finance Minister tabled the Economic Survey 2024 document in Parliament on Monday, July 22, 2024. Economic Survey 2024 highlighted the launches of the PM GatiShakti National Master Plan and the National Logistics Policy (NLP) in October 2021 and September 2022 to emphasize the inherent objectives of boosting efficiency and lowering logistics costs. The Survey pointed out that since the NLP's launch, over 614 industry players had registered on the Unified Logistics Interface Platform (ULIP), 106 private companies had signed NDAs, 142 companies had submitted 382 use cases to be hosted on ULIP, and 57 applications had been made live by September last year. You can read the Economic Survey 2024 here for details. |
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| Mr R Dinesh, Immediate Past President - CII, and Executive Chairman, TVS Supply Chain Solutions Ltd, sharing his perspective on the Union Budget 2024 wrote in the Business Standard that the Budget's commitment to infrastructure development is evident in its allocation of Rs 11.11 trillion for capital expenditure, amounting to more than 3 per cent of GDP. The fiscal deficit target of 4.9 per cent of the GDP for 2024-25 is a positive step. It creates space to address any geopolitical uncertainties and global economic challenges that may emerge. This will enhance trust among both domestic and international investors and establish a strong basis for India's continuous economic growth, Mr Dinesh wrote. "The first Budget of the new government presented by Finance Minister Nirmala Sitharaman sets a clear direction for making India a Viksit Bharat by 2047 and, at the same time, reflects a prudent balance between growth imperatives and fiscal consolidation," he noted. |
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| On July 17, 2024, Press Information Bureau reported that Union Minister of Commerce and Industry, Shri Piyush Goyal, attended the G7 Trade Ministers' meeting held at Villa San Giovanni, Reggio Calabria, Italy. The report stated that the meeting served as a platform for discussions between the dignitaries on enhancing global trade relations and economic cooperation.Shri Goyal and Mr Antonio Tajani, Italy's Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation, discussed bilateral trade and investments, industrial co-production, and cooperation in clean technologies, and mutually agreed to promoting this aspects. Shri Goyal thanked Mr Tajani for the invitation and highlighted the importance of analyzing global supply chains' robustness, Ukraine-Russia conflict, and Red Sea crisis. |
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| The Economic Times reported that Apple's strong focus on manufacturing in India is leading to significant results, with the company's annual sales in the country reaching almost $8 billion. The revenue from India saw a notable 33 per cent increase over the past year, with iPhone sales contributing to over half of the total, the paper noted. Apple's expansion plans in India include the assembling of iPads and the Pro and Pro Max iPhone models through Taiwanese contract manufacturer Foxconn. Key suppliers like Corning, and Foxlink have plans to establish or increase their persence in India. The paper quoted Corning Gorilla Glass' VP and GM David Velasquez as saying that his company "will begin production out of our Tamil Nadu facility in the second half of 2025." |
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| Mr Vineet Agarwal, MD, Transport Corporation of India, writing on the takeaways from the Union Budget 2024 stated that the Budget is a catalyst for India’s logistics and economic growth. He noted that this Budget, like the earlier ones, continues to set an upward trajectory for the Indian economic landscape and it is sure to have a boosting effect on the economy, particularly the logistics sector, owing to its sharp focus on infrastructural development and fiscal prudence. One of the major feature of this year's Budget, he wrote, is "its commitment towards enhancing rural infrastructure, providing breakthrough to logistics companies for expanding their cold supply chain footprint and general warehousing capabilities in previously under-served areas." |
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| The Press Trust of India reported on July 13, 2024 that Northern India, especially Punjab and Rajasthan, is facing an energy crisis due to coal shortages, impacting power supply chain stability. The reported pointed out that the the coal materialization rate dropped to 45 per cent, causing power plants to operate with low coal stocks. This has led to significant challenges in meeting the region's escalating electricity demands. Measures are being taken to improve coal transportation logistics and accelerate domestic coal production, as per the news. Long-term strategies involve diversifying energy sources and enhancing energy efficiency to prevent future crises. |
INTERNATIONAL
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| A recent survey by Gartner, Inc. revealed that a striking 76 per cent of logistics transformations do not manage to meet crucial budget, timeline, or key performance indicator metrics. The survey, which involved 306 logistics professionals from organizations generating $500 million or more in annual revenue, highlighted the critical role of addressing team resistance and incorporating feedback in enhancing the success of these transformations. Senior Principal Researcher at Gartner's Supply Chain practice, Snigdha Dewal, stressed the importance of engaging teams from the outset, viewing resistance as a resource, and utilizing feedback to adapt transformation plans. "This approach not only enhances project management outcomes, but also boosts staff morale and can help unearth new competitive advantages", she said. The survey also pointed out that while 81 per cent of logistics leaders consider transformation crucial, only 20 per cent utilized resistance as a resource to leverage the collective wisdom of their teams for improving transformation outcomes. The predominant urgency approach, characterized by directive leadership and limited stakeholder engagement, led to a 47 per cent decrease in the odds of transformation success. Gartner's findings suggest that leaders should focus on listening, include resistant stakeholders in the process, and maintain an adaptable mindset to enhance the success of logistics transformations. |
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| Cadbury parent Mondelez International has initiated a $1.2 billion ERP and supply chain transformation project in collaboration with SAP, Accenture, and o9 Solutions, CIO Dive reported. The multi-year project, approved by the board in July, aims to enhance enterprise efficiencies and is scheduled for completion by 2028. CFO Luca Zaramella expressed confidence in the project's execution, stating, "We have tried to minimize all potential issues." The news article added that the other international Chocolate products behemoth Hershey Company is also nearing the end of its ERP implementation project as part of its drive cost savings amidst consumer spending cutbacks. |
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| Anders Dømmestrup, the EVP of DP World in Asia Pacific, believes that AI is set to revolutionize logistics in the region, stated a Seatrade Maritime article. The introduction of AI-powered tools at DP World's logistics centre in Busan, South Korea, has led to improved efficiency and reduced bottlenecks. According to Mr Dømmestrup, "As trade and logistics volumes expand, it puts pressure on traditional systems. And often those systems don’t have the logic to support that increased complexity." The year 2024 is anticipated to be a tipping point for AI adoption in APAC stated the article and article pointed out that AI has the capability to recommend enhancements to the layout of a warehouse by identifying high-demand products that should be prioritized for easy access in the warehouse, and low-demand products that can be stored in less accessible areas. |
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| The Straits Times reported that Singapore and its neighbouring countries are working on innovative solutions to keep global supply chains running smoothly amidst geopolitical disruptions. It added that Singapore’s Transport Minister Chee Hong Tat announced a new app designed to enhance Singapore's shipping and logistics sectors by improving efficiency, cutting costs, and providing contingency planning. The app, described as an "inter-modal control tower", aims to centralize critical information and decision-making tools, offering real-time data on flight and vessel schedules, as well as live tracking of cargo. Chee Hong Tat stated that the initiative is a way to "work together to further enhance Singapore’s value proposition as a global supply chain hub." One of the app's main features will be the ability to provide early notifications to users about potential delays, thereby giving the users sufficient response time for unforeseen circumstances. Amid recurring disruptions to global supply chains from geopolitical hot spots around the world, Singapore and its regional counterparts have been actively trying to find innovative ways to maintain an uninterrupted movement of goods, stated the article. |
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| The UK’s business group Logistics UK has warned that proposed cuts in infrastructure spending by the government could hinder the logistics sector's ability to drive economic growth. According to the business group, the cuts could affect the employment of over seven million people involved in the making, selling, and moving of goods. Policy director Kevin Green emphasized the importance of infrastructure spending, stating, "For too long, investment in improving the UK's infrastructure has been overlooked, making it more challenging for goods to be delivered to their customers." Logistics UK highlighted the critical role of logistics in the UK's economy, especially amid factors such as decarbonisation, Brexit, and technological advancements. |
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| Supply Chain Digital listed the top 10 largest brands based on their revenue. Walmart was featured at the top with a revenue of $642.6 billion. CEO Doug McMillon highlighted the company's transformative use of technology, particularly in automation and robotics, to enhance efficiency and operations. Following closely behind was Amazon, with a revenue of $574.8 billion and a strong emphasis on same-day and next-day order fulfilment through its vast network of 175 fulfilment centers and over 750,000 deployed robots. The United Parcel Service (UPS) was featured third with a revenue of $91 billion. The company’sutilization of advanced technology like the Symphony portal helps it streamline global logistics operations, processing and delivering over 21.9 million packages daily. These companies' strategic technological investments reflect their commitment to staying ahead in the fast-paced logistics industry and ensuring above-par customer service, stated the article. |
We will connect again next month, with a comprehensive dossier of news, trends and events from the industry.