22251478 supply chain management of major courier companies in india

8/12/2019 22251478 Supply Chain Management of Major Courier Companies in India

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Asia-Pacific Institute of Management

30% of Winter Project

Titled

Supply Cain Management and Competiti!e mar"eting strategy of

major courier companies in India#

Su$mitted to

&r# A# '# Sar"ar(Area Cair person I)*

Su$mitted $yArun +umar Su"la

,"./I)/0


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12)A2 21ISTICS SC4'A5I

In a move to cut down costs, producers are exploring around the globe in search for the lowest

cost exporters/suppliers. Lured towards developing countries in south-east Asian region forlower-wages, transportation industry is stretching its reach longer than ever before. Maor

players are focusing overseas mar!ets for outsourcing cheap manufacturing as well as expanding

their businesses. "his result in outbound logistics. And acceleration in manufacturing capacity is

driving many producers to shutter superfluous plants. "he rest of the plants are gaining the

developing rhythm, but must export overseas now to sustain their positions in the mar!et.

#oom in the Internet based services made overseas suppliers capable to match foot with local

suppliers. $eb-based sales, services and supplies are emerging vertically. "he expanding reach

has compelled logistic industry to spur cross-border trade. %egardless-of this outbrea! of activity,

it is commonplace also for expert managers of local logistics to get ac&uainted with the

complexity of international trade logistics. 'lobal transportation and relevant services includes

much complex documentation than for domestic shipments. It almost includes longer delivery

times. (valuation of the arrival times of international shipments is ust a magic than solid fact.

"he business players always loo! for ust-in-time shipments, thus it aspires enhanced build to

order model and lot-si)e-of-one shipments, which results more pressure on logistics industry.

Logistics industry has usually been old-fashioned traditions. *sually, the shipping personals

would decide for carriers, customs agents and so on. +ormally, their search doesnt go beyond

the initial service providers who cover all the minimum re&uirements. nce the shipment !ic!s

off its ourney towards its destination, it is really hard to assume reaching time.

6or e7ample, a ship that started its ourney from Asia could meet harsh weather, which may

delay its reaching on the $est oast for three days. n the other hand, the truc!s at the $est

oast would have to wait and sat empty and ideal for the three days, which would certainly result

in big loss. "hese !ind of unpredictable losses are usual in international logistics. "hus, even the

largest multi-national companies avoided logistic services on a worldwide basis. "hey opt to


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establish their operations in each country and let them to manage logistics individually. "he

boom in Internet services changed international logistics rapidly.

At present, vendors can cater massive numbers of global shipments. omplying with this, they

create and uphold substantial databases, which cover country-specific laws and regulations.

actually, thousands of combinations of containers, ports, and so on are li!ely counted for

moving a shipment.

International logistics vendors also maintains cost and route information on hundreds of

hundreds carriers, which are operational in do)ens of regions, which offers both lower freight

bills and cutting of delivery times.

A biggest disadvantage in international logistics is the vagueness in arrival times. Materials

managers have had modest choice, so they had get around by adding more safety stoc!s.

"hus, the costs of inventory management in the overseas parts are naturally higher. "he

uncertainty of delivery time is due to not tapping of international shipments closely and step by-

step. "his is easier said than done. 0owever vendors are now offering trac!ing system, which is

necessary in continuous trac!ing of both international logistics networ!, and electronic visibility

in each yard and carrier. Although there is much to be done to achieve this stage, the pieces of

the pu))le are gradually coming together. (ven though vendors are offering a worldwide

networ!, significantly added and dedicated, e&uipment is still re&uired. or example, trac!ing

completed products needs a yard management system, which recogni)es each container in the

yard and its placement.

"he radio fre&uency Identification 1%I23 tags in containers, whose place is detected by

antennas located in the yard. Maintaining the clear vision also needs trac!ing the containers as

soon as they leave the yard. "his trac!ing is possible by 'lobal 4ositioning 1'453 systems and

satellites, however, use of these systems are not usual at present. As a result, the industry does

not provide step-by-step trac!ing of container.

An important trend among logistics services providers would aid the industry. Logistics industry

veterans unveil that logistics service providers are extending reach worldwide and expanding

their services too. %egardless of understandable limitation, global logistics should obviously


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improve. $eb-based companies and technically ground-brea!ing carriers such as *45 Logistics,

%yder, and others will carry on showing the way. 'lobal logistics in near future should be distant

more faultless and reasonably priced than ever.

Si8e of te glo$al logistics industry

urrently the annual logistics cost of the world is about *52 6.7 trillion. or any country, the

annual logistics cost varies between 89 and :;9 of the '24, the figure for the *5 being about

89. *5-based Armstrong < Associates, Inc. trac!s the issues and trends in the world logistics

mar!et and in the *5 logistics mar!et, in particular, in their annual surveys of top :7 global

L54s. According to the firm, the global logistics mar!et si)es in =88:, =88> and :;;; were *52

=; billion, *52 :7 billion and *52 7> billion, respectively. In :;;6 and :;;?, the

corresponding figures were *52:@; billion and *52 666 billion, registering high growth rates.

"hough most of the large L54s are head&uartered in (urope, the *5 logistics mar!et is the

largest in the world capturing one-third of the world logistics mar!et. In :;;6, it was about *52

; billion.

In :;;?, it grew to *52 8 billion, and in :;;7, it registered an impressive growth rate of =>9

to cross the *52 =;; billion mar! for the first time and reach *52 =;6.@ billion 1oster and

Armstrong, :;;?, :;;7, :;;>3. 0owever, considering the fact that the logistics mar!et in the *5

is about =;9 of its annual logistics cost 1oster and Armstrong, :;;>3, there is still immense

potential for growth of 64L in the *5 in particular, and in the world in general.

SI94 6 T:4 21ISTICS MA5+4T I' I'&IA

Indian 5upply hain and Logistics Industry is more than *52 =;; #illion in si)e and is the

bac!bone of Indian (conomy. ur industry is growing at a rate of -=;9 annually and has been

a crucial contributor in the growth and development of the Indian economy. In the near future,

"raditional Logistics services li!e "ransportation and $arehousing would continue to growth at

a good rate. 0owever, the big tic!et growth would come from the Balue Added Logistics services

in the near future.


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At present, utsourced Logistics accounts for only one-third of the total Logistics mar!et in

India, which is a significantly lower proportion vis-a-vis the developed mar!ets. 'rowth in this

industry is currently being driven in India by over *52 6;; billion worth of infrastructure

investments, the phased introduction of BA", the development of organi)ed %etail and Agro-

processing industries, along with a strong manufacturing growth. In addition, we expect strong

oreign 2irect Investment inflows in the Indian mar!ets, which would lead to increased mar!et

opportunities for providers of "hird-4arty Logistics in India. "herefore, India possesses

substantial opportunities for growth in the 5upply hain < Logistics industry in the coming

years, notwithstanding the temporary olt due to the economic slowdown.

Courier Industries

ouriers are basically a service for sending money or goods at some extra cost. It involves a

person or a company engaged in transporting, dispatching and distributing letters, parcels and

mails. In a rather layman term, it can be said that, compared to normal mail service, a courier

possess many added features. A courier is much faster, safer and secured than ordinary mail. It is

a speciali)ed service with authenticated signatures. It has trac!ing service with each service

being treated as a specific individual case. 2edicated timely deliverance is its primary hallmar!.

"hese features do cost a bit extra but with so many features available, the cost gets leveraged.

"he courier industry speciali)es in time-definite, reliable transportation services for documents,

pac!ages and freight. "his is done via a combination of transport networ!ing that includes road,

rail, sea and air for door-to-door delivery. "his extensive distribution system is supported by

infrastructure that comprises hubs, warehouses, I" technology and human resources, as well as

offices in various cities.

More and more courier companies appear on a regular basis, and you may have noticed different

courier logos and branding on vans and planes across the world. Many of these courier

companies operate independently, where as others rely on some of the larger courier companies

when it comes to providing international deliveries.

ne of the main reasons for the increase in courier companies is the boom in global trade,

probably largely down to the Internet. ouriers have to deal with all sorts of re&uests from

delivering simple mail documents to large electronic items li!e computers, printers and


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televisions. 5imply put, the courier mar!et has grown due to demand from customers and

businesses.


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SA2I4'T 64AT;54S 6 T:4 I'&;ST59 of the express cargo industry, but is forecasted

to reach ?;9 by :;=@.

"he domestic courier industry with a turnover of %s :; bn is still at a nascent stage

as compared to developing countries li!e hina where the industry is five to six

times bigger.

urrently there are about :6;; courier companies in India, but four maor players

in the premium organi)ed segment dominate the industry.

C;5I45 S45=IC4S I' I'&IA

"he courier industry has world over been recogni)ed as an essential and indispensable part

of any economy. In India, various factors li!e growth of the industrial segment, growth in

exports and imports and overall economic scenario of the country have contributed to the

growth of the courier industry. 2omestic courier industry with a turnover in excess of I+%

:: bn is still in a nascent stage. India has more than :,6;; courier companies. It is a highly

disintegrated industry with nearly :; players in the organi)ed sector, :,;;; in the semi

organi)ed sector, and the rest in the unorgani)ed sector. "here are a few maor players in

the organi)ed sector who have a combined mar!et share of 8;9.


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Indian courier industry was initially limited to all the four metros. "he reason was the

airport connection these metros were having. "he industry had its start some =7-:; years

ago. #ut with changing economy and technical advancement seen on a daily basis, the

industry has extended fast to several metropolis, township and even rural areas. "rain, bus,

motorcycle and even bicycle have helped the industry in this regard. Industry has traveled

a long way and now it has become a very common sight to see an office of ourier

ompany in the nearby locality. wing to the growing demand for reduced transit time and

early deliveries the industry is forecast to grow at :79 for the next two to three years,

ma!ing this one of the fastest growing segments in the transportation of cargo.

International express cargo holds >9 of the express cargo industry, but is forecasted to

reach ?;9 by :;=@.

Tese are some "ey players in Indian Courier Industries

=. #lue 2art

:. 20L India

6. ed(x India

?. AL

7. 'ati

>. (lbee (xpress

@. vernite (xpress

. "+" India

8. *45 India

#lue 2art (xpress Ltd. 1#lue 2art3 is the mar!et leader, with a 6>9 mar!et share in the

domestic mar!et, and (lbee 5ervices Ltd., the second largest player, has a :;9 mar!et

share. AL-20L is primarily focused on the international segment, where it is the mar!et

leader, whereas 'ati orporation Ltd. 1'ati3 is the mar!et leader in the domestic pac!ages,

ground distribution segment. In the domestic air pac!ages segment, #lue 2art, having

developed its own air networ! and aircraft operations, is currently the mar!et leader.


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5e!enues of Major Player in te Indian Mar"et (5s# $n*

"he organi)ed segment dominates the pac!age and the premium document business since it

re&uires a strong infrastructure and resources, while the low-yield document business is the

domain of the unorgani)ed sector. 0owever in value terms the share of the organi)ed sector is

>?9 and of the semi-organi)ed and unorgani)ed sector is 6>9 inspite of the large volumes it

handles.

5e!enue &istri$ution


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5ationale $eind doing tis project

In the transport segment, courier companies are playing maor role to provide services in

India. "here are three crucial elements which are involved in the supply chain management

of the courier companies. =. 4rocurement :. 4rocess and 6. 2elivery. In a comparative

business environment the companies will have to manage these things with lo>-cost?

customer satisfaction and just-in-time# If any companyfulfils customer satisfaction with

low cost strategy and ust in time, the company will be effectively more competitive. 5o at

the managerial point of view, it is very good opportunity for me to learn that how the

courier companies manage the above things.

"he proect report is useful to courier agencies in relation to improving the operational

efficiency, timeliness of the delivery scheduling and overall customer satisfaction. "he

courier companies can analy)e the efficiency and time management through this proect.

And they will also well aware about their strength and wea!nesses in comparison to other

courier companies.

$jecti!es and scope of study


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=. In-depth study of the supply chain structure, operation lin!ages and process

integration.:. "esting of the mar!eting strategy based on @just in time concept of the supply

chain.

6. Mar!eting and growth strategy of the courier companies with focus on cargooperation and improving service &uality.

?. omparison of 5ervice &uality the companies for customer satisfaction.

54S4A5C: M4T:&21


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Secondary &ata

Secondary data will be collected from the authorized agents of the companies

magazines newspapers and internet.

?. Analy8e te collected information

"his involves converting raw data into useful information. It involves tabulation of

data, using statistical measures.

Statistical Tools

#ar 2iagrams

olumn 2iagram etc.

7. 5eport researc findings

"his phase mar!s the culmination of the mar!eting research effort. "he report with the

research findings is a formal written document.

)2;4 &A5T

#lue 2art is 5outh AsiaDs leading integrated air express carrier and premium logistics-

services provider. It has the most extensive domestic networ! covering over =6,;

locations, and service more than ::; countries and territories worldwide through its 5ales

alliance with 20L, the premier global brand name in express distribution services.

#L*(2A%"5 vision is to establish continuing excellence in delivery capabilities focused

on the individual customer. In pursuit of sustainable leadership in &uality services, they

have evolved an infrastructure uni&ue in the country today.

Its Competiti!e Ad!antage lies in

)lue darts !ast and unparalleled &omestic 'et>or"

Lin!ed by some of the most advanced communications systems and positioned to offer a

consistent, premium, standardi)ed &uality of service.


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A spectrum of ser!ices to pro!ide customi8ed solutions#

#lue dart is the only express carrier in the country today which offers an entire range of

services that extend from a document to a charter-load of shipments. Its services are

relentlessly monitored to deliver a net service level of 88.8>9 1as on ebruary, :;;73.

Its Customs and 5egulatory e7pertise

ompany had a dedicated team of specialists who provide the expertise for customs as well as

regulatory clearances at all 5tates within the country, to support seamless service to the

customer.

Its Tecnology

2esigned to enhance the reliability of our operations and process efficiency, and add value to

the customer through time and cost savings.

Its Air 'et>or"

"he only one of its !ind in the country today, that is focused on carriage of pac!ages as its

prime business, rather than as a by-product of a passenger airline. A dedicated aviation system

to support #lue 2artDs services is self-sustaining, with its own bonded warehouses, ground

handling and maintenance capability.

Its financial credi$ility

itch %atings India 4vt. Ltd. has assigned the highest E=F 1Ind3E G one plus 1Ind3H rating for

their short term debt programme of %s. 6; crores. urther, I%A Ltd. has also assigned the

highest EA=FE 1pronounced A one plus3 %ating for their ommercial 4aper 4rogramme of %s.

:7 crores.

Its People force

ommitted, diverse and over ?,;;; strong are companys most valued asset. All companys

achievements have been possible because they have a team who believes in themselves and

their company, a team with a winning attitude. #lue dart is a learning organi)ation, valuing

self-development, and most of companys managers are homegrown.

&T&C

&T&C is Indias 2argest &omestic &eli!ery 'et>or" Company offering variouscustom made services ranging from 2omestic to International. 2"2 delivers to the

remotest places in India with the help of ?,;;; business partners spread across the length


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and breadth of India.

&T&C Courier B Cargo 2td# (&T&C*was incorporated in =88;. $ithin a span of =@

years, through its business associates 2"2 expanded its delivery networ! across the

length < breadth of the country, thereby creating the nationDs Largest 2omestic 2elivery+etwor!. "oday 2"2 is one of the largest Indian company in the (xpress industry.

2"2 can also be credited with pioneering the franchisee concept for the courier industry

in India, and today has the largest franchisee networ!.

Its head&uarter is at #angalore, with ? of its onal ffices at 2elhi, Jol!ata, hennai . It all began with

the setting up of three offices at Jol!ata, Mumbai and 2elhi.

"he overwhelming response from customers, was not ust a dream come true, but the fruits

of an early reali)ation and recognition of the tremendous potential that the Indiansubcontinent offered in terms of mar!et si)e.

It was the foresight and dynamism of the ounder hairman and Managing 2irector, . 4.5aboo which created a spring board for the organi)ation to catapult into what it is today K

Indias Largest 2omestic ourier ompany.

86; irst light ffices across India

::; Authori)ed ollection enters

?7: ranchisee Locations

5erving over 7;;; 4incode 2estinations across India

2edicated $orforce of over =;;;; plus employees

5trategically located own International ffices

5erving over ::; countries globally

"he fast paced growth and widening networ! is the outcome of four basic beliefsC

5peed


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5afety

%eliability

(conomy

As a natural corollary to its growth endeavor, irst light is in the process of setting up alarge scale integrated Logistics 2ivision to offer an entire gamut of $arehousing,

Inventory Management, 5upply hain 5ervices and 2istribution hannels, therebyproviding total end-to-end solutions to customers.

In !eeping with times, irst light continues to invest substantial effort in building a 5tate-of-the-Art 5uper Information "echnology highway.

irst lights commitment to corporate excellence and its yearning for ma!ing it a common

household name opens floodgates of opportunities and challenges and to meet it head on,shall be the corner stone of its philosophy.

6ed47 India

22251478 supply chain management of major courier companies in india

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