Panalpina is happy with SAP. Unfortunately, says Gaurav Patra, the same cannot be said of the company’s experience with DoT. The logistics major is ready to defect — as soon as an alternative turns up

Markus Muecke says Panalpina is looking for a service provider that can provide connnectivity as per its requirements

Panalpina World Transport (PWT) is one of the world’s leading providers of forwarding and logistics services, and specialises in intercontinental airfreight and seafreight consignments, and associated supply chain management solutions. With its worldwide network and advanced IT systems, Panalpina is able to provide door-to-door transport solutions tailored to its clients’ individual needs. The Panalpina Group has over 300 branches in 74 countries and employs around 12,000 people worldwide, including 170 in India.

In India, the company is focusing on some key segments like hi-tech, automotive, retail, pharma and chemicals. The company also has a huge distribution network across the country. Panalpina started operations in India in 1986 as a liaison office, which in 1999 became a 100 percent subsidiary of PWT. Mumbai, which houses Panalpina’s main hub, is connected with the Singapore office through a leased line. Other locations in India like New Delhi, Bangalore, Kolkata and Chennai are also connected to Mumbai through a leased line. The other three locations of the company in India are yet to come online.

Markus A Muecke, Panalpina’s managing director and CEO in India, says, “IT has helped PWT work professionally; it not only helps day-to-day synchronisation of work, but also helps in improving efficiency.” He adds, “In today’s world you just cannot do business without having a proper IT set-up. IT helps in reducing costs and also saves time. From the very beginning of its operations in India the company has had a very good IT system in place.”

As far as hardware infrastructure is concerned, Panalpina uses IBM servers. The company uses Netfinity at the local area networks (LANs); for business operations it uses RS/6000. Apart from this, the company also uses a high-end server for its SAP application, which is located at the company’s APAC headquarters in Singapore. For routing Panalpina uses Cisco and Nortel products. All the LANs at Panalpina India are connected through a Cat5 cabling solution. These LANs talk to each other over a leased line wide area network (WAN). The logistics major also has an Internet VPN solution as a back-up to the leased lines.

Right now Panalpina is using leased lines from DoT, but is not happy with DoT’s service. “We are eagerly waiting for some other service provider to start this service. As soon as that happens we will no longer stay with DoT,” informs Muecke. “DoT cannot give us a solution between 64 Kbps and 2 Mbps. 2 Mbps is relatively costly and we do not require that much bandwidth right now. That’s why we are forced to use 64 Kbps leased lines. But what we would ideally like to have is a mix of 128 Kbps and 256 Kbps. So to manage bandwidth we needed to multiply it with the help of some other technology.” Nevertheless, Muecke says this is a short-term solution. The company is eagerly waiting for some other player to provide a solution as per its requirements. Once this happens the company is planning to go in for a videoconferencing facility. Muecke says this facility will help the company save a lot on travelling costs, and will also facilitate day-to-day tracking of different activities across the organisation.

Applications
As far as applications are concerned, the company has been using SAP for quite a long time. “In 1993 SAP was excellent. At that point of time no other package was as good as SAP. That’s why we opted for the best available solution. But SAP is still a very good platform,” comments Muecke. It gave Panalpina the option to integrate some of its own applications into the SAP package. So much is the company’s confidence in SAP that today it has taken both CRM and ERP applications from SAP.

As far as SAP modules are concerned, the company is using the financial accounting and asset management modules, besides using its own integrated module for job costing. “Ours is an exceptional case where SAP allowed an organisation to incorporate its own application into the SAP package,” he informs. As per the company’s experience, SAP is best suited for the manufacturing industry. “Before implementing SAP there were some functionalities which needed to be completed, which we eventually did,” he says.

The Worldwide Panalpina Group has its own SAP implementation team. When it decided to go in for SAP in India it did not ask SAP to implement it; instead, the company’s in-house team did the job. Till date it hasn’t faced any problem in running the application. “This is the expertise we have developed, and this is the competence we have. We have the license from SAP to implement our own solution,” says Muecke. Even the training and the designing of the architecture of the SAP set-up were done in-house. Although Panalpina is not an IT company, it still has a global team of 400 IT professionals. The company has a policy of having a uniform IT set-up across the globe, which is why they have SAP at 300 locations across 75 countries. This uniform system helps the company in providing better services to its clients.

Apart from SAP, all other business processes are running on applications which were also developed by their global in-house IS team. The company uses other applications like Windows XP and Microsoft Outlook for e-mailing.

Because of IT, says Muecke, Panalpina can access necessary information at any point of time; IT also helps the company keep track of all consignments. “It’s only because of IT that we are much more comfortable in doing business today. It has given us the extra cushion,” he declares. Apart from this, computerisation has also helped in cutting down costs and has made staff more efficient.

And what about future upgradation? Panalpina is just waiting for more bandwidth through better wide area connectivity. Says Meucke, “Unless we have bandwidth we do not want to constantly constrain our existing set-up. With the limited bandwidth at present, if we upgrade our set-up it might affect the speed of our data transfer, or there might be congestion in our network. We definitely have expansion plans, but we are waiting for a service provider to come and provide us leased line connectivity as per our requirement.”