Drive For Import Substitution & Emergency Logistics Management To Operationalize The Plant: A Case Study

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Introduction

When any operating plant forced to take shutdown due to its critical equipment failure, all the upstream and downstream units of the plants were gradually taken under shutdown due to non-availability of space for storage of liquid feedstock and solid intermediate products. Accordingly, an emergency situation emerges due to stoppage of production and huge financial loss to the company.

Considering above, Original Equipment Manufacturer (OEM) was contacted immediately to supply the newly manufactured equipment on SOS basis to save the plant. OEM regretted due to non-availability of finished stock. Further OEM also informed that the manufacturing process at their end will take approx. 6-7months time to deliver at plant. In order to minimize the shutdown period/ consequential loss, on consistent efforts, purchase orders were issued to indigenous suppliers with a delivery period of 3 to 4 weeks.

In order to facilitate the manufacturing activities indigenously, one set of component/parts was air freighted for onward dispatch to domestic supplier location through air to expedite the process and also to avoid any time loss.

After various efforts, the equipment was manufactured at a domestic location for onward dispatch to the plant for assembly and making it operational.

The weight of the indigenously manufactured equipment was more than 15 Ton (approx.) in weight and size wise too is more than 8.0 ft. width, thereby making it under ODC (over dimensional cargo) category. Generally, the normal permissible width of truck/ trailer ranges up to 8 ft. – 8.5ft (96 inch/ 2.44mtrs – 102 inch/2.6mtrs) as per Indian MV Rules-1989.

Challenges in Logistics Arrangements

Being an ODC (over dimensional cargo) consignment, the possibility of shipment was only through road transport on open body trailer (as the open body of truck cannot accommodate the width of the cargo). Moreover, to cover the distance of 3,600 km (approx.) by road from domestic manufacturing location to the plant, the trailer would take minimum 10 days’ time for delivery of the consignment at the plant.

The primary objective of getting the equipment manufactured in lesser time as compared to the overseas manufacturing time was accomplished. However, the crisis was still there in transporting the manufactured equipment from domestic manufacturing location to the plant.

Therefore the transportation aspects were taken up with domestic air cargo owners (who work for cargo movement by air) for getting the ODC consignment on chartered flight basis. Unfortunately, they had expressed their inability to meet the requirement as the cargo was more than 15 Ton weight. Various other airlines operating in India had also been contacted for airlifting this consignment, but no one was willing to airlift the shipment beyond 150-160 kg within India.

Way-forward for Logistics Arrangements

The plant was under shut-down and incurring a huge financial loss. The equipment was required on SOS basis to make the plant operational. Therefore, the matter was taken up with a leading Logistics Company to consider the assignment for airlifting the equipment by a chartered flight from domestic manufacturing location to the airport nearest to the plant.
In this regards to facilitate the logistics company, photographs of the shipment along with packing dimension were communicated. The matter was later communicated to DGCA for obtaining necessary approvals to hire a foreign Aircraft IL-76 on a chartered basis considering the fact that domestic airlines expressed their inability to take initiative in this regard.

On continuous follow-ups with logistic company, the DGCA finally accorded permission for carriage of the consignment by a special chartered Flight/ Aircraft, IL-76 from abroad.
Meanwhile, logistic company forwarded photographs/ video clip of inside arrangement (dimensional details) of IL- 76 aircraft including photograph of complete aircraft view along with its opening as well as closing arrangement to perceive an idea on the deployment of truck trailer and crane for unloading of the consignment at airport once the flight reaches.

Conclusion

Though the financial outgo in movement of the consignment by air (chartered flight basis) was quite substantial as compared to by road in trailer, it was prudent decision in proceeding with hiring of the foreign airline wide-bodied chartered aircraft (IL-76) engaged as the special case which had helped in reducing the transit time and loss of production resulted in recurring revenue loss.
Had the consignment was been brought by road trailer, the transit time would have been much more as compared to chartered flight, thereby plant getting affected in the long run in multifold fronts/ aspects such as:

(i) Stagnation in capacity utilization of the unit
(ii) Loss of production of feed-stock and in turn loss of production of primary products.
(iii) Loss of profit.
(iv) Loss of credibility in the market due to non-supply of primary products for a relatively longer duration.
(v) Disruption in various supply chain aspects.
(vi) Possibility of downstream customers switching to other suppliers to maintain their production plan, etc.

Disclaimer

Any views or opinions represented in this presentation are personal and belong solely to the author and do not represent those of people, institutions or organizations that author may or may not be associated with in professional or personal capacity unless explicitly stated. Any views or opinions are not intended to malign any organization, company or individual.

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