Why drivers pay for OEMs/3PLs inefficiency?

Folks, don’t raise your eyebrows and hurl expletives at me after seeing the headline that squarely pinpoints that long haul truck drivers are penalized for others foolhardiness. Sounds harsh? Indeed, it ought to.

Ramesh Kumar
Ramesh Kumar

This assessment does not need a pen-and-paper study by IIM or IIT grads. Even a school dropout can figure out by one look at the long line of waiting trucks at the material gates of any renowned Indian manufacturing companies’ factory gates and warehouses.

Several India Inc companies tom-tom about their observance of practice of “Just In Time” and or “Zero or No Inventory”. Great.  They also boast of how their supply chain honchos have developed a robust vendor base (Tier 1, Tier 2 and Tier 3 etc) as part of their outsourcing model. Supply chain risks, they claim, are manageable through this dependency via penalty clauses blah blah.

While the Big Boys of India Inc have re-layered or restructured their inbound operations to begin with, even Tier 1 vendors  have not achieved that level of maturity in Just in Time practice at their level. This is  not out of lack of desire but their own dependency on their vendors, who are not matured enough to meet the expectations of their Masters (Tier 1 vendor of the Big Boys).Further you go down, the adoption of efficient manufacturing – that’s what Just In Time is all about – is not robust.

Okay, how this chain of lesser and lesser efficiency impacts the Big Boys boast of Just in Time? One, Tier 1 vendors (other level of vendors or suppliers or suppliers are not directly linked to the Big Boys) to escape the penalty clause as part of their Service Level Agreement produce, pack and push it to the OEMs – the Big Boys – well before deadlines; rather Just Before Time to beat the penalty use of the Big Boys.

By and large, OEMs have again outsourced their logistics handling to 3PLs who monitor the inbound as well as outbound. It is no secret these white collar professionals have to abide by OEMs factory gate entry/exit norms. The OEMs don’t keep their gates open 24×7. Entry & Exit hours are restricted. Mostly, night entries into the factory premises for unloading is strictly a No-No affair. Considering the fact that products manufactured have several hundred – if not more – components procured right across the country and outside (routed via seaports and brought on road post-deshipment) these trucks line up outside factory gates for long hours for no fault of theirs.

Warehouse on Wheels. WoW! Actually, it was not what was intended originally. Pure inefficiency or poor planning on the parts of every stakeholder involved: be it OEM, 3PL or vendors etc.

Secondly, the Big Boys enamored by the gains of JIT have slashed down their inventory levels. Or almost, no inventory as they claim. So there is no question of a huge warehouse as in the past. Not that they 100% scrapped because imported and some vital components are kept for emergencies or supply chain risks. But that space is inadequate to store even a fortnight’s stock of their 100% requirement to keep their assembly lines running non-stop. That critical is inventory management.

Now, there is another element: another the Big Boast of the Big Boys: supply directly to the assembly line. This is more critical and more interesting. More challenging too. Components have to be unloaded directly from the trucks and pushed to the assembly line: from the belly of trucks to the tut-tuting production lines.

This “direct to assembly line supply” presupposes the assembly  lines are running. Unlike power utility companies – nuclear, thermal, hydro etc – which operates round the clock, not all Indian Inc operates 24×7 for a variety of reasons. Maybe, they operate two shifts in any 24 hour cycle and therefore, the assembly lines go to sleep for one shift of say 8 hours daily. Right?  Not to be overlooked is the weekend when the plants are shut totally.

They shut shop and go home for a few hours rest daily. Weekend shutdowns mean longer rest for white collar supply chain/logistics babus.

When the plants are shut and operators have gone home, vendors who pushed their part of agreement via trucks, witness their trucks loaded with their product waiting outside factory gates as the security guards (of course, they work round the clock!) bar any truck movement into the plant. Logical when there is no 3PL hand to monitor unloading and  pushing to assembly line feeding.

It is significant to note that NONE – repeat NONE – of the Big Boys have created Driver Rest Rooms outside their factory gates – whom they call their Business Associates. Proxy, yes, because Vendors are OEMs/3PLs’Business Associates. Not truck drivers!

Inside any factory when blue collar workers work beyond the prescribed hours, they are compensated in terms of Overtime allowance as per well laid out regulations. And there is a blue collar union to protect their rights if and when any violation occurs. Besides, there is governmental interface via the Labour Department of the respective state governments where the plants are situated for any dispute mechanism.

Unfortunately, there are no regulations for truck drivers. There is no Overtime for them. They is no Union to protect their rights. So even while their complaints are Himalayan size, there is no wailing wall or listening post. Rarely one heard of this unorganized truck drivers’ complaints being heard by authorities. They simply don’t exist for OEMs & 3PLs. Because their interaction is with their Business Associates viz., transporters or fleet owners. Not who actually move raw materials/components to help OEMs/3PLs to execute their production plans and assist the top echelon of these companies achieve their goals: increased top line and robust bottom line.

Significantly, these truck drivers are one of the vital supply chain links in the entire ecosystem, but ignored right royally.

These truck drivers are not paid by hour. They are mostly paid by kilometres they drive. There is no concept of compensating them for the waiting hours outside the factory gates.

So, it is not off the mark and pure baseless allegation when it is said that these less privileged and less educated truck drivers pay for the inefficiencies of highly educated, better profiled OEMs/3PLs, surely.

Yes, there are some Big Boys/3PLs claim that in the absence of unloading within a stipulated timeframe after trucks reach their factory gates, they have to pay a penalty to the transporter. But, it is all on paper. None of them pays. Instead they arm-twist transporters/vendors and subtly blackmail that any escalation of such inefficiencies on their part would entail transporters/vendors losing business. So, a lot of compromises – all in the interest of protecting OEM/3PLs’interests!

Having said that actually, truck drivers would not mind the long waiting hours outside factory gates if only there are some toilets/washrooms in and around the factory gates that they can access while waiting for the “Pearly Gates” to open. Surprisingly, these Big Boys talk of Village Adoption and building toilets in girls schools etc under the recently mandated CSR norms. Yet, they have not built toilets/washrooms outside their own factory gates to help Prime Minister Narendra Modi’s pet project of Swatchch Bharat Abhiyan. In the absence of any toilet/washroom facilities, these waiting drivers fertilize the surroundings of factory gates via open defecating. Nauseating. But who cares?

Just not in India, even overseas, drivers are paid for kilometres they drive. No penny for the long waiting hours caused by the inefficiencies of OEMs/3PLs. Detention time is a big productivity loss. This pain point is purely the handiwork of OEMs/3PLs. Nothing to do with drivers. So, why should they pay for this?

It’s time for a deep introspection by the white collar honchos. Will they?

(The writer is Founder-Chairman of KRK Foundation, a Registered Trust focused on imporving the working and living conditions of long haul truck drivers and their families living in remote villages of India.)

 

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