Project on Logistics Industry

PROJECT ON LOGISTICS COMPANY

“LOGISTICS HAS BEEN DEFINED AS MANAGEMENT OF INVENTORY WHERE IN MOTION OR IN REST”

SUBMITTED TO:-

PROF- MONICA MOR

PROF-DR ANURUPA SINGH

SUBMITTED BY:-

ANURAG SHARMA

BHARAT PRAHIAR

DEBENDAR RAJ PATRA

HIMANSHU SINGH

NARENDRA JHURIA

RAHUL KATOCH

ROHIT THARWANI

INDEX

1. EXECUTIVE SUMMARY2. INTRODUCTION3. IMPORTANCE OF LOGISTICS4. SUBDIVISION OF LOGISTICS MANGEMENT5. LOGISTICS INDUSTRY IN INDIA6. TOP 10 LOGISTICS COMPANIES 7. COMPANY PROFILE 8. MISSION STATEMENT 9. HISTORY OF SAFEXPRESS10. LOCATION & FACILITY 11. SERVICES PROVIDED BY SAFEXPRESS12. MARKET ANALYSIS 13. PRICING STRATEGIES 14. PROMOTION STRATEGY OF SAFEXPRESS 15. SWOT ANALYSIS16. PORTER’S FIVE FORCE MODEL

EXECUTIVE SUMMARY

Organized Logistics industry in India is at a nascent stage, industry is dominated by unorganized players. The annual logistics cost is around 13% of GDP out of this almost 99% is accounted by the unorganized and slightly more then 1% by organized players.

Safexpress is India’s largest logistics service provider which provides all kind of logistics solution to its customers. Company is growing rapidly and key success factors are its wide network across the country, its efficient service and its successful marketing strategies. Company’s future plan is to make services available to everybody at every location of the country.

INTRODUCTION

Logistics: - Logistics is the “process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.” Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software.

Origins and definition :- The term "logistics" originates from the ancient Greek "logos"—"ratio, word, calculation, reason, speech, oration “Logistics is considered to have originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistics’’ who were responsible for financial and supply distribution matters.

Logistics is defined as a business planning framework for the management of material, service, information and capital flows. Logistics systems have received considerable attention in the last 10 years as they constitute one of the cornerstones in the design and control of production systems and the modeling of supply chains.

Whether the forwarder is acting for an importer or an exporter, the main service provided is the movement of goods. The forwarder’s experience will enable the provision of advice on the best routing (cheapest, quickest, safest), the best mode of transport (air, sea, road, rail), customers requirements, packing, insurance, security issues, and the myriad of regulations that apply in both the country of destination and the country of origin.

Logistics Management: - Logistics management is that part of the supply chain which plans, Implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer & legal requirements. A professional working in the field of logistics management is called a logistician. A logistician is a professional logistics practitioner.

Professional logisticians are often certified by professional associations. Some universities and academic institutions train students as logisticians, by offering undergraduate and postgraduate programs.

Logistics must make work effectively. This is required by your customers and, in turn, by your company. For effective logistics, there are four key issues--

Time/service: - Hours may decide customer service, competitiveness and value-added.

Time/service is a factor of competition, customer requirements, your company's position in the industry, your corporate culture, how well everyone in the global supply chain works together, and how well everyone works together in your company. Distance means time. Yet time delays are not acceptable.

Cost: - Cost is the key measure by which logistics effectiveness is often measured. Cost control, containment, and management are important for corporate profitability. Cost has a relation to service. As we define our service against our costs or costs against service, the give and take develops into our operating costs and budgets. Logistics cost measurement is a shortcoming in the present accounting systems.

Inventory management: Inventory requires to be maintained to take care of needs between the time of demand and time of supply. Inventory management involved decisions concerning: Buffer stock, Lead time, Replenishment of stocks.

Warehouse Management and Control System: - There is some functionality overlap, the differences between Warehouse Management Systems (WMS) and Warehouse Control Systems (WCS) can be significant. To put it simply, the WMS plans a weekly activity forecast, based on such factors as statistics, trends, and so forth, whereas a WCS acts like a floor supervisor, working in real time to get the job done by the most effective means. For instance, a WMS can tell the system it’s going to need five of SKU A and five of SKU B, hours in advance, but by the time it acts, other considerations may have come into play or there could be a potential logjam on a conveyor. A WCS can prevent that problem by working in real time and adapting to the situation by making a ‘last-minute decision’ based on current activity and operational status. Working synergistically, WMS and WCS can resolve these issues and maximize efficiency for companies that rely on the effective operation of their warehouse or distribution centre.

Importance of Logistics:-

Logistics is the bed rock of trade and business: - Without selling and or buying there can be no trade and business. Buying and or selling takes place only when goods are physically moved into and or away from the market. Leads to customer satisfaction through superior customer service:- Organizational objectives of P [Productivity],Q [Quality],C [Cost],D [Delivery],E [Employee Morale],F [Flexibility],S [Safety],H [Health],E [Environment] are set to meet customer expectations of Q,C,D. Q, C, S, H, E is

parts of must be quality that a customer expects. Logistics addresses D, F objectives which lead to customer satisfaction through superior customer service

Integrates logistical activities: - In conventional management environment, various activities of logistics work in isolation under different management functions.

Competitive edge: - In the fiercely competitive environment logistics provides the edge. Due to technological revolution most of the products are moving into commodity markets.

Logistics wins or loses wars: - British lost American war of independence due to poor logistics.

Supports critical functions like operations and marketing: - Strong logistics support enables a company to move towards JUST IN TIME production system for survival in a highly competitive market.

Logistical costs: - For individual businesses logistics expenditures are 5% to 35% of sales depending on type of business, geographical areas of operation, weight/value ratios of products and materials. This is an expensive operation. Improvement in the efficiency of logistics function yields savings as well as customer satisfaction.

Subdivisions of logistics management

Business LogisticsProcuring, moving and storing of R/M and transporting, warehousing and distribution of F/G.

Facilitation of relevant manufacturing and marketing. Making finished goods available to the customers in the market. Procuring, moving and storing of agricultural products. Providing competitive edge in commodities market

Event Logistics :- The net work of activities, facilities and personnel required to organize, schedule and deploy the resources for an event to take place and to efficiently withdraw after the event

Service Logistics :- The acquisition, scheduling and management of the facilities/assets, personnel and materials to support and sustain a service operation

Military Logistics: - Design and integration of all aspects of support for the operational capability of the military forces [deployed or in garrison] and their equipment to ensure

Readiness, reliability and efficiency. Third-party Logistics: - Third-party logistics involves the

utilization of external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, third party logistics includes any form of outsourcing of logistics

activities previously performed in-house. Example: - A company with its own transport facilities decides to employ external warehouse specialist, this would be an example of third party logistics.

Production Logistics: - The term is used for describing logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time. Production logistics is getting more and more important with the decreasing batch sizes. In many industries (e.g. mobile phone) batch size one is the short term aim. This way even a single customer demand can be fulfilled in an efficient way. Track and tracing, which is an essential part of production logistics - due to product safety and product reliability issues - is also gaining importance especially in the automotive and the medical industry.

LOGISTICS INDUSTRY IN INDIA

“Logistics is a process of planning, implementing and controlling the efficient, effective flow of storage of goods, services and relative information from point of origin to point of consumption for the purposes of conforming to customer requirements.”

Annual logistics cost in India is to be estimated to 14% of total GDP, which translates into USD 140 billion assuming GDP of India is slightly over USD 1 trillion logistics cost is almost 99% is accounted for about unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operator, custom broker, freight forwarder) and slightly more than 1% that is approximately USD 1.5 billion, is contributed by organized sector. So one can see that the logistics industry in India is in Nascent Stage. How ever industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of GDP ,saving to the tune of USD 50 billion will be realized at the current GDP level, making Indian Goods more competitive in global market. Moreover, growth in the logistics sector would imply improved service delivery and customers’ satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.

Competition India freight forwarder face stiff competition from multinational freight forwarders for domestic and international freight movement.

Future Prospective of Indian Logistics The Indian logistics industry is growing at 20% vis-à-vis the average world logistics industry growth of 10%. Since the organized sector accounts for merely 1% of the annual logistics cost, there is immense potential for growth of the sector.

Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business.

Indian shippers are gradually becoming more aware of the benefits of logistics outsourcing. They are now realizing that customer service and delivery performance are equally important as cost to remain competitive in this global economy.

The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, east-west and north-south corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (SEZ) with 100% Foreign Direct Investment (FDI) limit and public-private partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sector.

In India, 100% FDI is allowed in logistics whereas in China, until recently, foreign investment was not allowed in domestic logistics. Almost all large global logistics companies have their presence in India, mainly involved in

freight forwarding. For domestic transportation and warehousing, they have tie-ups with Indian companies. As the Indian logistics scenario look promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route. The latter may be the preferred route of investment since the target company is readily acquired with its asset base and distribution network, and the need for building everything from scratch can thus be avoided. The benefits for the acquired company include the patronage of an MNC and access to the MNC’s global network..

INDIAN TOP 10 LOGISTICS COMPANIES

1. TNT2. AFL

3. DHL4. BLUE DART5. GATI6. SAFEXPRESS7. ASHOK LEYLAND8. AGGRAWAL PACKERS AND MOVERS9. DTDC

10.FIRST FLIGHT

\ SAFEXPRESS

COMPANY PROFILE “Whatever your business, Safexpress can help take it further.”

Safexpress –India’s leading Logistics Company renowned for its domain expertise and experienced manpower in LSCM

sector. Safexpress can best understand your logistics and distribution and offer the most suitable logistics model and solution to you. Safexpress is the one of largest network coverage across India traversing 3500000km .Every day covering 550 location through more than 750 ,operating 24 hour in a day and 365 reaching these location through its fleet of 3000 vehicle operating on.

MISSION STATMENT

We shall adopt and internalize a work culture which demonstrates a "we can we will" attitude to reflect in our daily responsibilities so as to far exceed our objectives, consistently striving towards market dominance. We will create historical landmarks forming a strong edifice for the future overcoming all obstacles pro-actively as our personal responsibility and commitment to create delight for the customer with impeccable personalized services.

VISION STATEMENT

To be a conscious learning organization maintaining flexibility for change so as to provide the most customized solutions. Striving towards global market share whilst maintaining dominance in the domestic market through good hr practice and excellent customer service.

HISTORY OF SAFEXPRESS

1995 Safexpress launches as a door-to-door service with 4 routes, 9 offices, 12 container mounted vehicles and 20 employees. Safexpress' door-to-door services include niche products like DoD and To-Pay freight.

LOCATION AND FACILITY

Safexpress-India’s leading Logistics Company, has more than 550 Locations across India in its network. Safexpress reaches these locations through it’s fleet of 3000 vehicles operating on more than 1000 routes, 24 hours a day 365 days a year. All Safexpress vehicles have all-weather proof containers for safe transit. Safexpress also operates through Air to locations directly covered by flights and to all other locations on a multi modal basis.

Company provides an unrivaled range of logistics and supply chain solution door to door distribution, single source invoicing, Re -verse logistics, 3PL, packing solutions and e- logistics.

SERVICES PROVIDE BY SAFEXPRESS

Express: Express service is the services for carrying Goods from one destination to another destination with the help of weather proof containers .This service is covering 550 location across India through surface and air in optimum time

Draft-on-delivery: Draft on delivery is a value-added service wherein the seller can dispatch goods through Safexpress to the buyer and be assured that the delivery would take place only when the draft has been collected.

In the Safexpress DOD system pre-alerts are sent to the consignee to allow reasonable time for the draft to be made, thus meeting the desired objective of express transit with the amount ready for collection. 

All risk cover: - “the company would redeem the value of the loss in the uneventful case of any shortage or damage to the consignment whilst in the custody of Safexpress, subject to the risk charge having been paid by the sender or the recipient as per the company policy. The amount corresponding to the loss as declared would be paid by the company to the sender or the recipients as required without waiting for any request for the same.”

Next Day Delivery: This service insures that delivery of goods will be delivered on next day form the day of booking .This service is for the near by location for e.g.: (New Delhi to Noida & Gurgaon)

VMI(Vendor Managed Inventory): VMI is unique service provided by safexpress to manufacturing companies in which safexpress keeps the stock of raw-material in there warehouses

used in manufacturing companies and provides them as per there requirement.This very helpful for the manufacturing companies because they don’t have to bother about there storage of inventory and its reduce the cost of company. Safexpress is proving this service to HONDA MOTORS which stores SAMKRG Pistons.

Reverse Logistics: Reverse logistics stands for all operations related to re use of the product and material. It is “the process of planning, implementing, and controlling the efficient, cost effective flow of raw material, in process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper deposal”

Safexpress use this service for many companies like United color of benniton, company take back of the cloths in off season and store it as well mend it for the next season.

3PL:- “A firm (that) provides multiple logistics services for use by customers. Preferably, these services are integrated, or “bundled” together, by the provider. Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding”

Safexpress provide 3PL Logistics to many companies like TATA Motors, it manage all the logistics part of TATA motors from the procurement of raw material from the different manufacturing companies to the stores of material in the warehouse and also provide the raw material to TATA motors at right time in required quantity. It also delivers the finish product of the TATA motors to the different dealer and showrooms so

from the availability of raw material to the storage of goods and in last the delivery of finished goods all is managed by Safexpress.

The 3PL option would result in the reduction of overall costs, but it must be a joint effort by the service provider and the customer.

Sunday delivery: - This service was launched by the company to provide services to Malls. So that the goods can be easily available on their racks even on Sunday.

Campus to Home delivery: - This service is provided by the company to the students to deliver their books and luggage to

their hometown. This service is provided to the students at reasonable price.

Market Analysis

Market segmentation:-

On the basis of Income: - company make segment on the basis of Income of organization and Size and capacity of business given to company.

High income customers – e.g. HILTI, TATA Motors, Madura Garments, HONDA Motors and SAMKRG.

Middle income customers- e.g. united color of , TnG Garments, Penguin Publication, Cipla and Landmark.

Low income customers- e.g. Landmark Publication and students.

On the basis of geographical:- company divide its market on the basis of size and location of the cities.

Tier 1Cities – NCR resign, Mumbai, Kanpur, Kolkata, Pune, Bangalore and Hyderabad.

Tier 2 Cities- Jaipur, Lucknow, Jalandhar, Udaipur.

Tier 3 Cities- Varanasi, Rajgir, Karnal,

Market Trend: - Logistics industry trends indicate that in the years to come the following factors, which guide the logistics industry is reckoned to strengthen further. The factors facilitating the effective functioning of the logistics industry are integration, confederations, technology, legislation and globalization. The 3PLs or the third party logistics providers are required to carefully ascertain the market trends in the logistics industry and accordingly sketch the plan of action of the logistic companies.

Expanding up on geographical boundaries is being given prime importance. It is considered that this logistics industry trends is likely to continue for several years to come. The logistics industry trends imply that the role of the 3PLs is anticipated to increase in future. Collaborating efficiently and strengthening alliances are two factors, which are expected to look up in the logistics industry trends. Companies with specializations excelled in the logistics industry to a considerable extent. However, the success of these companies in the logistics industry will be determined how effectively the companies dealing in the logistics industry make use of the five factors mentioned above. The 3PLs belonging to the mid market categories generate revenues every year as much as $100 million to approximately $500 million. They comprise of companies

dealing in transport, warehouse facilities and brokers dealing with freight related assignment.

MARKET GROWTH

Valued at $890.3 million in 2005, the third party logistics (3PL) market in India is projected to grow at a compound annual growth rate (CAGR) of 21.9 percent from 2005 to 2012, reaching $3,556.7 million by the end of this period. Rapid growth in the Indian manufacturing sector is creating an increasing need for seamless logistics solutions. While the Indian 3PL market is still very much in its infancy compared to those in other countries, it is experiencing healthy growth and attracting new companies eager to capitalize on the plentiful opportunities it offers.

Currently, the trend of outsourcing the entire logistics function to a 3PL service provider is visible only in a few sectors in India. In the automotive sector, for instance, end-to-end outsourcing is becoming increasingly popular as companies realize the benefits of focusing on core competencies and delegating the logistics to 3PL service providers. Just-in-time delivery (JIT) to the assembly line is another emerging concept that is gaining acceptance in this sector. "The penetration of 3PL services is particularly high in the automotive sector," remarks the analyst of this research service. "Even companies that have

traditionally adopted a conservative business outlook have started outsourcing logistics to 3PL service providers." The IT hardware and electronics sectors are also witnessing a rise in this trend, while those for fast moving consumer goods (FMCG) and pharmaceuticals have relatively low penetration rates.

P’s ANALYSIS OF SAFEXPRESS

PRICING STRATEGY: Safexpress follow a unique pricing Strategy for its customer. It follows two kind of price segment for customer according to extent of business given to them.

1. Credit Basis 2. Retail Basis

CREDIT BASIS: This service is for the organization who give huge amount of business to company and who are the long term and regular customer.

There is no fix charges for the services company decide price on the basis of monthly billing the price is totally negotiation based and payment form the companies is received at the end of the month from the companies means it is totally credit based. For e.g. Tata and hility use credit basis price policy from the company which is on the basis of extent of order to the company and usage of warehouses.

Importance of Credit Bases:

1. Reduce the cost for the company2. Helps in building relationship with company

RETAIL BASIS:

The retail basis is the price for the customer who is not very heavy user of the services. The price depends upon following charges

1. Rs 200 fixed charge per safe box2. Fuel surcharges 3. FTL charge4. Insurance charge

The freight of the goods depends upon on the medium by which they are carried

1. By Road2. By Train 3. By Air

The rate is calculated on the basis of

1. By Weight 2. By Volume

By Weight Technique is used for heavy Weight Goods Such as Machine Engine, parts of machine etc.

By Volume technique is used for light weight products such asT-shirt, shirts, medicines and FMCG products.

PLACE: Safexpress is located in all cities across country in India even in the remote areas of country .It has a large network chain spread all across the country. Safexpress has expanded its reach over 560 destinations all across India .Company divide whole country in four different zone names only

East WestNorthSouth

Safexpress is coming up with warehouses at these places. Investments in cross-dock (hub) facilities in places like Pune, Nasik, Ahmedabad, Chennai, Ambala and Jamshedpur are strategic in nature and serve industries and manufacturers in these regions thereby enhancing their logistics Company has its own booking offices in almost all cities from where its takes order from the customer and provide them services of delivering goods at right place.

Company has its own warehouses in Tier 1 cities and most of Tier 2 Cities where it store the raw material and finished goods and hubs in main locations (big cities) of the country.

Leading edge expertise is backed by formidable national network comprising of over 550 location and more than 3000 vehicles operating over 1000 routes, 365 days a year.

Its strong network all across the country enables it to deliver goods to all big as well as remote parts of the country in right time at right place so to present at right place is key success factor of the company and it provide competitive edge to company from the competitors.

PROCESS: Process start from take-in order from the customer than booking the goods at desired location of customer then take goods in vehicles to the warehouses and store there in safeboxes at optimal temperature and at weather condition and then loads the goods in different trucks of different locations as required then takes the goods to the warehouses of desired cities and store there for the optimum time and in proper condition so that they can not damage, the last part of the process begins with deliver of goods from the warehouses to the desired locations.

For example:- Company has to deliver goods from Delhi manufacturing units of united colour of benetton to different showrooms in Lucknow in 2 days Then first company will take the goods from the manufacturing units in safe box through vehicles to the warehouse which is in Delhi, then goods will be stored in the racks which is made for the

Lucknow delivery in optimal conditions all this will take about 7-8 hours then goods will be once again loaded in the vehicles and taken to the 1.by road or 2. By train or 3. By air as required to the warehouse which is in Lucknow and stored there and once again maintain by the people over there and then delivered through the different vehicles to the desired showrooms.

Process of Safeexpress

PROMOTION STRATEGY OF SAFEXPRESS

UCBManufacturing units

Air

Road

Train

Hub in Delhi

Warehouse in Lucknow

Showrooms

Company has a B2B business so they do not follow traditional promotional tactics like advertisement and other promotional campaigns.

But for the brand building they strictly follow proper usage of Safexpress logo on every vehicle other resources.

For Promotion Company launch a new service which is campus to home by them they target IIM students and build a strong brand name among them.

SWOT ANALYSIS OF SAFEPRESS

Strengths:-

1. Distribution channels of safexpress 2. Working 7 days a week 3. Next day delivery services for near by location 4. Safety

Opportunities:-

1. Rise in demand for courier services 2. Global business diversification 3. Rise in manufacturing sector 4. Development in niche market

Weakness:-

1. Less use of technology

2. Manpower 3. Less of brand awareness among the people

Threats:-

1. Competitors (Blue Dart and unorganized sector)2. Rise in operation cost

Marketing plan

Marketing plan of safexpress should be to start courier services all across India.

Vision statement:- provide fast courier services at economy rate.

4 ps

Promotion- this services for B to B and B to C network so company has to focus on two promotional strategies for BtoC & BtoB. BtoC advertisement can be done through T.V. advertisement and newspapers and BtoB promotion can be done through word of mouth

Price- The price strategies should on the basis of value base pricing and competition base pricing.

Process-

BLUE PRINTING

PORTER’S FIVE FORCE MODEL FOR SAFEXPRESS

Online Request

Pick-up Boy (Books delivery)Collection

Customer walk-in Books a Courier Collection

Transportation

Line of interaction

Line of visibility

Line of internal interaction

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1.Rivalry among competitors: - Rivalry among competitors is often the strongest of the five competitive forces. For safexpress competition is from

• Unorganized transporters

• International players like DHL

• Domestic company GATI

2. Threat from new entrants: - company may have the market cornered with the product, but the success may inspire others to enter the business and challenge your position.For safexpress• Threat is from various cargo companies which may

enter in logistics business• Threat is also from entry of other international players

like UPS

3. Bargaining power of Buyers:- the power of buyers describe the effect that your customers have on the profitability of your business the transaction between the seller and buyers create value for both partiesFor safexpress • The bargaining power of buyers is medium because

of sufficient number of logistics companies

4. Bargaining power of suppliers:- any business requires inputs-labors, parts, raw material and service. The cost your inputs have a significant effect on your companies profitabilityFor safexpress

The bargaining power of suppliers depends on the

• Price of fuel • Government polices • Taxes• Cost of land • Increase in rents

5. Threats of substitutes: - products or services from one business can be replaced by products or services from another if you produce a commodity product that is undifferentiated, customer can switch from your product.For safexpress Substitute may be the transporters who give services at cheaper rate.

REFERENCES

Information from Safexpress corporate office contact person Mr. Amit Chhari (Operation Manager)&Sanjeev Kumar

Web sitesGoogledoc.comIBEF.orgEconomy watch .com