Alok Gautam, Country Logistics Leader, Dow Chemicals, In Conversation with LogiNext
Here we are in conversation with Mr. Alok Gautam, the Country Logistics Leader at Dow Chemicals. He is an industry veteran with more than two decades of experience in the Chemicals and Oil & Gas industry. He is celebrated as a change maker and a man of keen intellect driving transformations across the industry.
We had the privilege of absorbing his insights about the supply chain challenges within the chemical industry, about how the industry has changed and about the future trends expected within the industry as technology continually streamlines all processes and operations. We also the pleasure to understand from him, first hand, how LogiNext has helped Dow Chemicals them track their shipments better and comply with all regulatory and service level agreements.
Here’s the full interview with Mr. Alok.
LogiNext Team (LT): What are the primary challenges of Chemical Supply Chain Industry?
Alok Gautam (AG): The most pressing challenges for supply chain in chemical industry are inadequate infrastructure as against increased scale of industries, intermittent adoption of multi-modal transportation, longer lead-time, demand variability, pilferage and theft, and absence of guidelines for storage and transportation of dangerous goods. These challenges are the primary reason why there is discrepancy in logistics spend between India where we spend 10-11% as compared to developed countries that spend a meager 4-5 % of the total revenue.
We are gradually moving towards overcoming these challenges with the appropriate support from government and industry peers. Recent government initiatives such as diesel de-regulation, thrust on building highways, dedicated freight corridors and adoption of GST will enable immense potential to bring logistics in the front-and-center of business operations.
LT: How has the industry changed in the last five years?
AG: The chemical industry has experienced steady growth over the last five years with a CAGR of 7%. The improvement in the manufacturing and increased sophistication in the products and processes has been the primary booster for this growth.
Logistics and supply-chain for the industry are changing demand patterns and trade trends within countries, increase in logistic costs and focus on Environment, Health & Safety (EHS). Imports of chemicals are gradually balancing from complete Middle East focus to now include South-East Asia. This has given rise to development of ports on the East-Coast of the country like Vizag, Paradip, and Cuddalore.
Ever-improving road infrastructure, use of railroads to transport chemicals and better awareness and implementation of safety best-practices in movement of hazardous goods are good signs for the industry. We also see in recent years a trend towards significant investments in high-end vehicles for road transportation by Logistics Service Partners (LSPs). These activities are raising the bar on safety and sustainability of operations for chemical industry in India.
LT: Safety is key for the industry. How do you ensure it for – Shipments, Vehicles, Driver Personnel, Environment? What standards do you have to comply with?
AG: To counter the menace of pilferage on bulk movement, we are taking steps to share properties of chemicals being transported at loading stations, ensuring the info sheets are with drivers. Today, Dow India transports all hazardous material only in ISO tanks, reducing safety risk on the road considerably. We were the first to introduce ADR (formally, the European Agreement concerning the International Carriage of Dangerous Goods by Road – Accord Européen relatif au transport international des marchandises dangereuses par route) in the country for hazardous chemicals transportation.
A special Procurement, storage and transportation of chemicals and dangerous goods process are rolled out in line with SOPs. Right from loading points, en-route transportation to unloading at customer locations, we have checks and balances across the entire chain. For hazardous goods specifically, we conduct Distribution Risk Review (DRR) and the entire route is mapped by experts for any new location. It also includes assessment of unloading facility and, if required, includes training to personnel at different nodes.
We also have imposed restrictions on night driving and work with our partners to ensure drivers are adequately rested on long journeys. GPS tracking of the vehicles is done by LSPs and reports are shared on daily basis to ensure their safe movement on the road.
Dow India, we are proud to be one of the leading companies for Responsible Care® standard in the chemical industry and supporting initiatives such as Nicer Globe® that aim to reform the transportation of chemicals in the country.
Nicer Globe is an initiative on transportation safety under the Responsible Care® by Indian Chemical Council. This voluntary chemical community initiative is fostering collaboration on transport distribution safety, emergency response, and transport security. It also routinely evaluates and improves transport safety capabilities while sharing the best-practices in the industry.
LT: How does technology vendors like LogiNext help you in achieving your logistics and fleet management benchmarks in terms of safety & security, operational efficiency, complete movement visibility and cost optimization?
AG: Vendors like LogiNext help us in bringing visibility to our operations and enabling real-time tracking. We have in place processes of no driving at night, speed limits and deviations to the prescribed routes. The collaboration with LogiNext enables us with effective controls and communication in case of any potential delay to our customers.
LT: Based on your past experiences in technological advancements, how would you project the future of this industry for the next five years?
AG: Supply chain has been an integral part of our business strategy in the country and we believe the business growth is directly proportional to the efficiency of the supply chain. India is one of the priority markets for the company globally.
In the coming years, we will see a surge in consumerism, which subsequently will boost the chemical industry. For us to match the market demands, it will be critical to have a robust supply chain in place – to maintain a healthy demand-supply equilibrium.
The advent of ‘smart manufacturing’ will supplement this growth too. Real-time visibility of inventory and warehouse will make manufacturing more cost-efficient. The cost benefit can then be easily passed across the value-chain.
The technological digitization will enable us to create transparency across levels – right from shipment visibility, warehouse management, taxation compliance, to even enabling an emergency response mechanism at the ground level.