1. Standardization in Supply chain CII Auto SCM
Delhi ,July 15
Versi on 4.0

2. Factors Infrastructure Taxation policies Labor laws Land laws
An overview
Infrastructure
Taxation policies
Labor laws
Land laws
Fuel prices
Currency
Competition…..… etc

3. Complexity – Internal factors
How the customer explained it
How the project leader understood it
How the business consultant described it
What operations installed
How the customer was billed
What the customer really needed

4. Standardisation – is it possible?

5. Packaging The very basic unit of Supply Chain No. Challenges1
Space utilisation 2
In-efficient Handling 3
Component damage and cardboard contamination 4
High CAPEX for non-core activities 5
Disposal costs of waste (one way packaging) 6
Lack of Standardisation 7
CO2 emissions per vehicle built
All these have cost implications which are built up in the cost of a component!

6. Inefficient handling & Component damages
Quality- Supplier Line to Customer
Line ?
Multiple Handling?
Decanting?
Waste disposal?
OEM’s and suppliers have to build a system to minimize these inefficiency’s, which is a cost

7. Non core activities Line side collection of waste
Disposal costs & CAPEX
Line side collection of waste
Investment in infrastructure for waste disposal
CAPEX involved in buying/ replenishing of crates
Man-hours for decanting and collection activities
Significant supply chain savings can be derived from removing waste alone from one-way packaging!

8. Standardization can drive the efficiencies in supply chain
Standardisation
No countrywide standards in place for crates and pallets
All manufacturers have different standards with small variations in Length, Width or height.
OWP is largely customized, decreasing fill up rates in trucks and driving up Logistics costs.
Standards of truck sizes not available
Standardization can drive the efficiencies in supply chain

9. Summary- Major concerns
Tier 1
OEM
CAPEX burden
Storage efficiencies
Outsource non-core activity
National network coverage
Part protection
Control & Handling
Supply chain expertise
Storage efficiencies
Damage reduction
Eliminate One Way Packaging
Control & handling
National network coverage
On-time delivery of parts
Supply chain expertise
TODAY Pain-Points
Export solutions
Inter-cluster flows
Tracking
Export/Import solutions
Total Equipment Management
Entire SC on Returnable
FUTURE Pain-Points
With the increasing volumes, the future pain-points will be much more complex

10. Automotive hubs NCR Gujarat Jamshedpur Pune Bangalore Chennai
NCR, Pune and Chennai
Similar Components criss-crossing the country as per OEM requirements
Examples -
Starters from Lucas to NORTH and from Denso to SOUTH
Clutch Sets from Am Valeo to NORTH, Clutch Auto to WEST and Valeo to SOUTH
Gujarat – Green field opportunities
NCR
Gujarat
Jamshedpur
Pune
Bangalore
Chennai

11. Only pay for what you use
What is Pooling ???
Equipment pooling is the shared use of standardised packaging by multiple customers
Equipment Pooling incorporates the many different processes involved in owning and managing returnable equipment in one simple package.
CAPITAL EXP.
EQUIPMENT
WASH & SERVICE
RELOCATING
TRACKING
Outsource management of packaging reusable standard industry accepted equipment
Managed Equipment Pooling
MODERNIZATION
Only pay for what you use
when you use it.
CHEP adds value by enabling you to outsource equipment management activities & costs
Purchase transaction costs
Capital expenditure / finance costs
Depreciation costs
Repair costs
Wash costs
Tracking / retrieval costs
Off peak storage costs
R&D / research costs
[Slide Objective: reduce the perceived risk of loss & highlight this as a key differentiator vs. other pooling competitors]
CHEP continues to invest significant resources each year to help its customers reduce the risk of equipment loss
The transfer-hire system eliminates the need for tracking
Web based transaction / hire balance & invoice review system (Portfolio)
PC based transaction / invoice reconciliation systems (CHEPMate)
Equipment Control Training Courses (ECAP)
National field service team focused on helping customers:
improve processes/procedures
implement systems
train staff
assist with stock take reconciliations
CHEP Confidential 11

12. Is it just another theory to talk???

13. Who is pooling today in India ???
250+ Tier 1 Suppliers and OEMs are using pooled packaging in India Today! 13

14. Collaboration in Packaging
Cost reduction
No CAPEX required for non-core activities
Standardization of trucks, racking, material handling equipment, warehousing etc…
Space savings at OEM and supplier
Reduced manpower – decanting, warehouse, waste management etc.
Improved Truck Utilisation & Less Truck Movements
Reduced component damages and losses
Greening of entire supply chain. Reduced carbon footprint
Availability and sharing of global best practices in packaging.

15. The way forward…
Working with Industry Members to agree and sign off to returnable packaging standards
OEM’s and Tier 1’s need to look at the “Total Cost of Ownership” – end to end costs of the supply chain
OEM’s move to separate packaging costs from component cost
Senior level leadership at the OEM is critical and driven from top-down
Greenfield plants collaborate and implement from start up
Continued joint OEM / Supplier visits to educate the Industry
CHEP is ready to partner with OEM’s and suppliers to help to uncover all costs in Supply Chain from packaging perspective.

16. Thank you for your interest and time!
More details on
us at 16