Warehousing system
Warehousing system

Typical planning issues in warehouses are inventory management and storage location assignment. Well-Organized inventory management may result in a reduction of warehousing costs. For example, by applying sophisticated production planning and ordering policies we may reduce the total inventory while guaranteeing a satisfactory service level. The service level specifies the percentage of the orders to be supplied directly from stock. Reduced inventory levels not only reduce inventory costs but also improve the efficiency of the order-picking operation within the warehouse. As such in a smaller warehouse, the travel times for order-picking are smaller. Apart from this, an effective storage location assignment policy may reduce the mean travel times for storage/retrieval and order-picking. Also, by distributing the activities evenly over the warehouse subsystems, congestion may be reduced and activities may be balanced better among subsystems, thus increasing the throughput capacity. The planning policies define a framework for the control of the warehouse processes. Inventory management and storage location assignment policies determine which products arrive and where these should be stored. Control problems typically deal with the sequencing of order picking and storage/retrieval operations, and hence with the routing of manual order pickers or S/R machines, the allocation of products to storage positions in a class-based or random location system, the internal movement of items to more attractive retrieval positions, the dwell point of S/R machines, etc. An item picking operation is an operation in which single items are picked from storage positions (less-than-case picking), as opposed to a pallet-picking operation in which pallet loads are moved in and out. A warehousing system is the combination of equipment and operating policies used in an item picking or storage/retrieval environment. With respect to the level of automation, we may distinguish three types

of warehousing system:

1. Manual warehousing systems (picker-to-product systems),

2. Automated warehousing systems (product-to-picker systems),

3. Automatic warehousing systems.


Globalization
Globalization - SLMT

Globalization is a major trend affecting not only the world economy but logistics and SCM as well. Factors such as the advent of container shipping and computing power, the removal of tariff barriers, and the move to outsourcing manufacturing and services to other countries have all contributed to an increase in global trade since the end of World War II. Merchandise exports grew by a factor of 3,300% since that time and global container trade has increased on average 5% per year over the last twenty years and at its peak in the mid-2000s comprised 350 million twenty-foot equivalent containers per year. Container shipments declined during the recession in 2008 and 2009 however the market has recovered and in 2010 was 200 million TEU. Global trade flows are also important in terms of shipping and port capacities. The Maersk Group developed a forecast of container traffic by 2015. In the major global trade corridors there are 42 million TEU movements forecast between Asia and Europe, 31 million TUE between Asia and North America, and 45 million TEU intra-Asia, which likely reflects trade between Asian countries related to sub-contracting manufacturing and providing logistics services such as consolidation for other marketplaces. These forecasts suggest there might be bottlenecks emerging in port capacity to handle increased container traffic. While the Maersk Group has led the shipping sector in building large vessels that can carry up to 18,000 TEU, such large ships may not able to go through the Panama or Suez Canals and thus take longer to reach destinations. Further, many ports around the world do not have berths or handling equipment sufficient to service such ships. The logistics performance as per the delivery reliability has gone down due to increasing customer requirements, greater volatility, and problems with infrastructure. Over two-thirds of respondents to their survey noted that their firm’s logistics capability is negatively influenced by poor transportation infrastructure, which may be a problem in emerging countries. One way of determining the logistics capability of any country is the World Bank’s Logistics Performance Index (LPI), which is a weighted average of individual country scores on six key dimensions: the efficiency of clearance processes, quality of trade and transport-related infrastructure, the ease of arranging competitively priced shipments, the competence and quality of logistics services, the ability to track and trace the consignments and their timeliness in reaching the desired destination within a scheduled or expected delivery time.


Bill of Lading
BILL-OF-LADING - SLMT

Bill of Lading is a valuation, which identifies the ownership of goods and cargo in general, which have not yet been loaded into means of transport. The bill of lading is generally a loading document freight/cargo to be shipped and charter contract, especially when it has not been drafted charter party. In our case, we will deal with the case of the bill of lading in the shipping market and not generally in the transport world, which is issued according to the terms of the charter party. It is important to note that the bill of lading must contain some specific documents to be considered correct and valid. Originally, the document should indicate the name of the purchaser, charterer and consignee, as well as his name masters and insignia of the means of transport (name of the ship, the port of registry and flagship). Additionally, the place of loading and destination should be precisely defined as goods/loads. This contract should also include distinctive signs of the things loaded, their general condition, and the number parcels or pieces or the quantity by weight of the goods transported (bulk load). At the same time, the fare agreements should be mentioned, namely the amount of the fare, the waiting time (shipment), the way and the time of payment, etc. Finally, the date of issue may not be shown on the securities. The bill of lading shall be issued by the master of the vessel after its completion loading of goods/ loads. This time is set to protect it and the security of the various transactions associated with the bill of lading, because it does a credit title transferred by simple endorsement or assignment, and for avoidance uncertainty as to whether the goods /cargoes were eventually loaded. Therefore, the date of issue is also the date of completion of the shipment. Although the master issues the bill of lading, the charterer is the one he chooses how to issue the bill of lading. There are two ways to issue. The first is the nominal bill of lading which is issued in the name of a certain person (natural or legal) and shall be transferred by assignment, by the provisions of the Civil Code. The receipt of the goods transported can only be made by the person whose name is referred to it or acquired it. The other case is that of ‘bill of lading’ which is transferred by endorsement and receipt of the goods after the end of the transaction of loading is performed by both the person mentioned in it and the person who is with me endorsement as indicated by this.


Information Technology and Internet in Logistics

The impact of developments in IT on marketing management has been profound. This impact is particularly pronounced in the area of logistics with IT acting as an enabling factor in more effective logistics management. Several major trends are having an impact on the use of IT in logistics. Integration and flexibility are important. Advance transaction processing systems which enable management to monitor inventory at all locations throughout the organization are commonplace. The level of flexibility and sophistication in software is continually being enhanced, enabling organizations to manage the whole supply chain system to give them a competitive advantage. It is a fact that developments such as Electronic Data Interchange (EDI) where customers and suppliers interact through an on-line system to conduct transactions. EDI is not a new concept, but increasingly the emphasis on the way it is being used is moving from one-off tactical benefits to strategic benefits i.e. Its use for developing closer supply chain relationships. Suppliers and customers are now able to work more closely for mutual benefit by coordinating integration. A series of developments in IT has enabled a paperless supply chain. The IT hardware is small, fast and cheap enabling it to be implemented in parts of the logistics process that were previously never considered because of space and cost considerations, e.g. the use of hand-held bar code scanners. Various developments such as point of sale terminals, satellite tracking, electronic funds transfer and EDI systems have resulted in substantial gains in logistical efficiency. Another area of IT development that has affected logistics is developments in mobile communications. The growth of cellular technology-based mobile voice communications and developments in digital service providers offer the possibility of voice and data services, and more one-to-one contact has led to better client-supplier relationships. Developments in computing power and software systems. The trend in logistics planning has been to minimize the levels of stock held. One of the problems for Internet marketers is that although it is easy to place an order, many sometimes fail to deliver. Internet supply requires holding larger stocks than would be considered ‘normal’ in conventional channel systems. However, it has beneficial effects on managing logistics. Effective supply chain management requires good communication between channel members and from the extent to which the Internet facilitates this we see advantages that accrue through the application of Internet technology to logistics have enabled marketers to cope with the complexities of managing interactions and trade-offs.


The Growth of Logistics Sector
The Growth of Logistics Sector

The sector in India is said to be around $160 billion and is expected to grow phenomenally over the next two years and reach a size of $215 billion by 2020. The government has decided on modernizing the functionalities of Indian logistics with a key focus on infrastructure development. With a view to improving supply chain efficiencies and enhancing connectivity to help logistics players tap the underleveraged markets in the country’s hinterlands, key infrastructure development projects have been laid out. The high- speed, Dedicated Freight Corridor Project aims at decongesting a heavily saturated road network and reducing freight transit times from industrial heartlands in north India to ports on the eastern and western coast of the country. Maximizing the freight transport, the dedicated corridor initiative will promote economic growth and generate employment through the setting up of industrial corridors and logistics parks along the corridor route. Key reform measures and policy interventions like the introduction of the Goods and Services Tax, (GST), relaxed FDI regulations and granting of infra status has boosted the core competencies of the Indian logistics industry. GST was a game-changer for Indian logistics. It laid the foundation for the setting up of large format multi-modal logistics parks along with key consumption and industrial centres which can function as freight aggregation and distribution hubs. The well-known trade war between the US and China provides India with the key opportunity to expand its export trade and correct its trade imbalances with the Asian economic powerhouse. The development has helped India gain an upper hand in renegotiating the terms of economic engagement with its regional neighbour. This is a very good opportunity for India to improve trade relations and economic cooperation with China and gain inroads into its vast consumption-led economy. The latest technologies like artificial intelligence, internet, and machine learning will disrupt the conventional workings of the country’s logistics sector. The ultimate effect of these technologies is anticipated to enhance productivity across the supply chain spectrum and streamline operational processes. These technologies will largely play an important role in boosting efficiencies of supply networks, reduce wastages and lead to supply chain optimization.


Importance of Transport
Importance of Transportation - SLMT

Transportation is considered a very important part of any society. This is again reflecting the style of life, the range and location of activities and the goods and services that will be available for consumption. Development of transportation has brought about changes in the way of living and the way in which societies are organized and thus affecting the development of civilizations. Transportation is essential for the growth of civilizations from very old times by meeting the travel requirement of people and transport requirement of goods. This has changed the way people live and travel. In most of the countries, many people travel everyday for work, shopping and social purposes. But transport also consumes a lot of resources like time, fuel, materials and land Transport is a service industry responsible for carrying or transferring people and goods from one place to another. Without it, a country’s trade, its progress, and even its very life would be possible. In effect, links between the members of a community, between cities, regions and countries depend on the availability of transportation. Transport is a complementary industry, but it is no less important than basic industries, whether they belong to the primary sector (extractive: agriculture, fisheries, mining) or the secondary sector (industrial or manufacturing activities). Together with trade and communications, it forms part of the service sector, whose activities are indispensable for society. Many ingredients are necessary for the economic and social development of a community, but no one of them alone is sufficient to produce an improvement in the standard of living of a nation. The exploitation of natural resources, industrialization, education and public health programs, arid good administrative organization are some of the factors that promote development, and while all are necessary, none is sufficient in and of itself. Transport is not the key to progress either, but it plays a major role in facilitating other basic objectives. Thus, transport is a major factor in making the land productive, in marketing agricultural products, and in making forest and mineral resources accessible. It is a significant factor in the development of industry, in the expansion of trade, in the implementation of nation-wide education and health programs, in the exchange of ideas and in national and regional integration. Thus transport, on the average, comes first or second in magnitude among the costs incurred to develop countries. Its importance is also reflected in the stress placed on it in the technical assistance programs offered by international agencies; for example, one-fifth of all the loans made by the World Bank have been allocated to .transport. Furthermore, transport services have a dual relationship with trade, since, on the one hand, transport appears in response to a given trade requirement, while on the other hand, it is often true that transport services promote trade. Historically, the sequence in which transport has been made available first and trade has followed is more important than the case in which the possibility of trade exists and transport is provided to serve it.


Urbanization and Supply Chain
Urbanization and Supply Chain - SLMT

The strength of Indian sub-continent is that the nation is the youngest in the world which means that the nation has more than 60% of its population dying in below 30 years age group. Hence the nation will be the main supplier of the skilled youth in the world. This demographic dividend will remain at least for two to three decades. It is estimated that India will be reaching GDP around $7 trillion from the present $2 trillion and the country will be the third largest economy after USA and China. The growth is expected among the working class and middle-class income society which will flow in demand for new products and services and will increase in the demand for increased and innovative supply chains. A paradigm shift in the population migration from rural to semi-urban and to urban regions also demands more supply chains. The ongoing urbanization is giving birth to a good number of megacities. The size of the demand from the megacities will be more than 5times now hence there will be a spurt in demand for supply chains to cater. Further, the corporate sector has two types of supply chains namely (City/urban and Rural) but due to ongoing urbanization, every company needs to have more than two types of channels that suit the region and customers profile. Increasing per capita income, more visibility of online markets, more usage of social networks, higher awareness, widening gap in the income levels, wide range of lifestyles, difference in the value system due to cultural differences leading to demand for more customization, individual preferences and micro or small segments and also there will be increasing niche segments such as, time-starved, double-income-no-kids (DINKs), “rurbans” (rural+urban cultured) and mass premium (customers belong mass group but premium in nature) which in turn raise demand for newer and speedier supply chains. The rise in internet consumption and e-commerce enabled the companies to penetrate non-metro regions which brought significant sales. When compared to that of metro-city based turnover. Top online retail in organized retail business also is witnessing the rapid growth. Speedy transportation facilities: Special fright corridor railway line across the country will increase the speed to 100Km/hour which in turn reflects the speed of supply chain delivery. Similarly, road transportation speed also is focused through PPP (Public- Private Partnerships) to build. The high ways and electronic toll collection and also fleet modernization in order to speed up the supply chains. The need for the consolidation of the supply chain in India is necessitated due to the growth of infrastructure to meet the future needs of the nation by increasing the ability to handle high volumes of material by means of automated facilities and consolidation of manufacturing plants; adapting supply chain design for a multimodal network, integrating road, rail, air, and sea transport and by introducing standardized operating models and practices.


What is Supply Chain?

supply-chain-management - SLMTA supply chain should be characterized by an ongoing process of improvements. Therefore, managing the supply chain, being the coordinator of this chain, becomes a very important task. Today, there is an increase in customer requirements in terms of duration of delivery services, their flexibility, availability and reliability. The expectations and the requirements of customers grow and, on the other hand, a need occurs to reduce costs and limit the amount of capital tie-up. Currently, it is very important for consumers that products and services are tailored to their individual needs. Consumers are becoming more and more impatient. How to meet these expectations in the context of the supply chain? The required speed of response and need to ensure a high level of safety, as well as the possibility to efficiently respond to potential dangers in the supply chain, generates the need to use all the modern technical and technological solutions and latest concepts for the functioning of logistics, including solutions from the area of telematics. The broadest area of use of telematics solutions in the supply chain is, of course, transport, which combines the individual links. In this case, telematics, or rather telematics of transport, will refer to the movement of people and goods (the cargo), using the appropriate means of transport and technical solutions – organizational, which through integrating IT and telecommunication solutions allow for proper management and control of movement in transport systems to improve efficiency and safety of operation of these systems and positively affect the environment. The objective of telematics is to support, supervise, control and manage the processes in transport and link these systems within all transport tasks carried out in the supply chain. The priority element for the implementation of these tasks in telematics systems are functions of operating of information, which primarily relates to the collecting, processing and distributing of data essential for making the right decision. Such processes are both processes implemented in the manner determined in advance (for example, automatic control of movement) or processes arising from the ad hoc situations (decisions of the operators, dispatchers, independent users of infrastructure such as drivers or pedestrians, etc., supported by updated information) (Wydro 2002). Today, the ability to ensure fluent and efficient transport of people and goods, transport prepared for the implementation of tasks under conditions of interference, is an essential requirement. The way to guarantee such possibilities is the introduction and extensive use of telematics solutions in the supply chain. The delay in implementation or the lack of such solutions will affect the level of competitiveness and will generate the unsustainable use of logistic infrastructure.


Growth of Warehouses
Growth of Warehouses - SLMT

Warehousing is one of the key enablers in supply chain solutions and is the fulcrum for procurement, manufacturing and distribution services which collectively contributes to robust supply chain services. The demand for modern warehousing has increased, and so has its lease period. The warehousing space is expected to undergo a big transformation with the help of advanced technologies that will significantly change the way products are received, stored, and shipped. Warehouse establishment in tier I and tier II cities has increased, in addition to the demand for better quality warehouses with support ecosystem. multinational companies that prefer to occupy only compliant facilities, statutory penalties on non-compliant warehousing facilities, implementation of GST, and economies of scale due to larger warehouses have led to the demand for organised players in the segment.

India as such has a larger market for FM Logistic. In 2016, FM entered India through the acquisition of Pune- based Spear Logistics. There has been an expectation of a very strong double-digit growth in India in FY 2019-20. Overall the company’s activities in India have been growing by an average 25 per cent + YoY for the past 10 years, On the other hand, there is a rise in logistics marketplaces owing to the escalating need for transparent, flexible, and easily adjustable logistics services. For example, warehousing marketplaces like LogHub, Warehouse-India.in, Xplent, and others match the demand for warehousing services with supply.

Despite vast betterment over the year, there are still many challenges in the warehousing industry. Moreover, the warehousing sector is capital intensive as it involves buying of land. Real estate developers are joining hands with private equity firms/companies to develop Industrial Parks. Overall the government, logistics companies, shippers and other supply chains stakeholders are taking conducive steps to ensure that warehousing and warehouse management solutions are top-notch to propel the potential growth of various industries. There has been a dynamic change in the warehousing sector developing it into sophisticated fulfilment centres with advanced with the coming of e-commerce, real-time tracking mechanisms and other state-of-the-art facilities without which e-tail would still be a dream. The coming years would be focusing on smart, tech-driven operations to reduce operating expenses as well as to increase efficiencies. When the government granted logistics an infrastructure status, the logistics infrastructure included various Logistics park like Inland Container Depot(ICD) with a minimum investment of Rs 50 crore and a minimum area of 10 acres, with a minimum investment of Rs.15 crore and a minimum area of 20,000 sq. ft, and warehousing facility with an investment of a minimum Rs 25 crore and a minimum area of one lakh sq ft. Thus helping the logistics sector to avail infrastructure lending at easier terms with enhanced limits, access to larger amounts of funds as external commercial borrowings, access to long term funds from insurance companies and pension funds and be in a position to borrow from India Infrastructure Financing Company Limited.


How does the right of Subrogation arise?

As is known the right of subrogation arises in the following:
Under tort, This is wrongdoing to another. A person cannot be wrong with another there causing
damage to another’s property of inflicting injury on the person of that another. If it is so done then
a right of action accrues in favour of the wronged and to the determent of the wrongdoer.


Under Contract A


A contract exercises some obligations on the person making a breach of contract to compensate the person who has been aggrieved as a result of the breach. For example Obligation under the
contract of affreightment and contract of bailment etc.


Under statue


Statues may create liability, for charging compensation, arising out of a breach thereof. For
Examples: Factories Act, Occupies Liability Act, Carriage of goods by Sea Act, etc.


TYPES OF SUBROGATION


Subrogation is considered as an equitable remedy and is subjected to all the limitations that apply
to equitable remedies. Subrogation is a highly technical area of the law. Although the classes of
subrogation rights are not fixed and vary between different legal jurisdictions, types of
subrogation is commonly divided into the following categories:


• Indemnity insurance’s subrogation
• Surety’s subrogation
• Creditors subrogation
• Lender’s subrogation rights
• Banker’s subrogation rights
• Trustee’s subrogation rights.


Although the various fields have the same conceptual underpinnings, there are certain differences
between them in connection to the application of the law of subrogation.


Indemnity insurance rights


There are three parties involved in insurance subrogation: the insurer; the insured; and the
tortfeasor. The insurance company under subrogation assumes the right to sue the tortfeasor for the amount of the damages reimbursed to the insured. An indemnity insurer has two distinct types of subrogation rights Firstly, they have the classic type of subrogation; viz. the insurer is entitled to
take over the solutions of the insured upon another party in order to recoup the sums paid out
by the insured and by which the insured would otherwise be overcompensated. The insurer is also
entitled to recover from the insured up to the amount which the insurer has paid to the insured and
by which the insured is overcompensated.


Surety’s subrogation rights


A surety who pays of debt of another party is subrogated to the creditor’s former claims and
solutions against the debtor to recoup the sum paid. This also includes the endorser on a bill of
exchange. In relation to the surety’s subrogation rights, the surety will also have the benefit of any
security interest in support of the creditor for the original debt. An important aspect is that the
subrogate will take the subrogor’s security rights by process of law, even if the subrogee had
been unaware of them. Accordingly, in this area of the law at least, it is conceptually improbable
that the right of subrogation is based upon an implied term valid mandate of its client, pays
money to a third party which fulfils the customer’s obligation to the third party, the bank is
subrogated to the third party, the bank is subrogated to the third party’s former remedies against
the customer.


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CILTianAkhil Ajith