184 Part III • Elements of Logistics Systems

CASE
CASE 9.1 ALL-INDIAN LOGISTICS SERVICES
All-Indian Logistics Services (AILS) is a third-r
logistics provided headquartered in South Delhi, India. infrastructure and pool of experienced personnel to
The company was founded by two former logistics handle a wide range of logistics activities. AILS consid-
executives ers itself a specialist in customized logistics solutions and
from Tata Steel (one of the biggest and oldest compa- services. Its services include:
nies in India) with expertise in ocean shipping, customs
• Imfiort consolidation. AILS has a well-developed
clearance, forwarding, and land transportation. Over the
network of offices and trade connections in the
last five years, AILS has been successful in building an
United States, Europe, the Far East, and the Middle

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EXHIBIT 9.A Map of India


East to render import consolidation by both air and
sea to any part of India. It promises a personalized,
prompt service with value for cost.
• Door-to-door services. AILS is fully ec{uipped to
deliver door to door, which includes cargo pickup
from the supplier’s warehouse, warehousing prior to
customs clearance, complete customs clearance of
exports from overseas, and freight booking with air-
lines/shipping lines to receive cargo in India. It also
undertakes local customs clearance and transporta-
tion to deliver to the door of the customer.
• Exports. AILS has expertise in handling exports o1
various kinds of cargo by ocean and by air freight,
and ensures the timely movement of cargo at the
most competitive rates. The company takes care of
both the complete export documentation formali-
ties and the physical movement of cargo.
• Consultancy on customs and logistics. AILS can
guide customers regarding various modes of
transportation and can help customers optimize
utilization of space and save on freight. It acts as
liaison with different Indian authorities like the RBI
(Reserve Bank of India), the Ministry of Shipping,
the Ministry of Railways, and the Ministry of Road
Transport and Highways, among others, on behalf
of clients for various permissions and quotas related
to import and export of cargo. India’s red tape,
bureaucracy, and corruption preclude anyone lack-
ing clout or established relationship channels from
conducting business in India.
Today AILS handles an average of 200- r lus TF.Us
(20-foot container equivalents) of imports and exports
every month between Delhi and Mumbai (Bombay),
which is the nearest big port (a distance of 1,407 kilo-
meters). (Sec Exhibit 9-A.) Luckily, most containers are
used for trafhc in both directions; moving empties is un-
productive. Main items for export arc bathroom fittings,
agricultural e‹juipicent, chemicals, scientific ec{uipment,
medical equipment, food processing machinery, and fur-
niture and kitchen equipment. Main items for import are
automobile engines and spares, cotton yarn, food prod-
Chapter 9 • Facility Location 185
ucts, electronics, televisions and components, rice, stone
for stone crafting, etc.
AILS has slowly expanded its consulting offerings
to include site selection for manufacturing plants and
ware- housing facilities. Recently, AILS was retained on a
site selection project by American Athletic Apparel
(AAA), a large multinational supplier of athletic clothing.
AAA has asked AILS to determine the best location for a
manufac- turing plant that will produce wickable athletic
shirts for export to North America and Western Europe.
AAA has one key stipulation for the chosen site:
The manufacturing plant must be located in a city with
a population of between 1,500,000 and 3,500,000 resi-
dents, which excludes places like Delhi, Mumbai, and
Bangalore, among others. Because the majority of shirts
will be exported from India via water transportation (air
freight may be utilized in extraordinary situations), AAA
has agreed to let AILS leverage its existing relationships
with logistics personnel at Mumbai Port. With this con-
sideration in mind, after several months of arduous work
AILS narrowed the r lant location to two metropolitan
areas: Patna (in the state of Bihar) and Lucknow (in the
state of Uttar Pradesh).
QUESTIONS
1. With respect to the natural resources needed to make
wick- able shirts, is Patna or Lucknow the prclcrrcd
lrication? Why?
2. With respect to transportation considerations, is Patna
or Lucknow the preferred location? Why?
3. With •••r • ct to labor characteristics, is Patna or
Lucknow the preferred location? Why?
4. With respect to quality-of-life considerations, is Patna
or Lucknow the preferred location? Why?
5. Should All.S recommend that the manufactutinc' plant
lac lcicatcd in Patna car Lucknciw? Why?
6. Would your answer to question 5 change if the shirts
ate exported through the Port of Ifiolkata? Why or
why not?
7. Supp‹asc that AAA clccidcs tc› ncarsciurcc prciduction t‹a
Lat- in America. keeping in mind the key stipulation
presented in the case, where might AAA locate its
production plant in Latin America* Why*