DISSERTATION REPORT ON

“Study of the Supply Chain Management in Courier Industry”

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LETTER OF THE HEAD OF DEPARTMENT This is to certify that Mr. Anup Dcruz (Registration number :- 0921302) is a bona fide

student of Christ University Institute of Management (MBA batch 2009-11) and has

successfully completed his Dissertation Report on Study of the Supply Chain

Management in Courier Industry in Lean Operations and Systems stream

Place: Prof. CKT Chandrashekara

Head of Department

Date: Christ University Institute of Management

Bangalore

CERTIFICATE –FACULTY GUIDE

This is to certify that this dissertation report on the title Study of the Supply Chain

Management in Courier Industry is a bona fide work of Mr. Anup Dcruz under my

guidance and support .This report is a part of MBA course with specialization in Lean

Operations and Systems stream and the content and the work done is genuine with

respect to the information covered and thought expressed.

Place: Prof. G. Ramachandaran

Senior Lecturer

Date: Faculty CUIM

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DECLARATION I Anup Dcruz hereby declare that the dissertation report titled Study of the Supply

Chain Management in Courier Industry submitted for the partial fulfillment of the

requirements for the award of the Master of Business Administration is my original

project work and has been carried out under the guidance of Prof. G.Ramachandaran

(Asst. Professor), Christ University Institute of Management.

Place: Anup Dcruz

0921302

Date: CUIM

Bangalore

Page | 3

ABSTRACT 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 for

lower-wages, transportation industry is stretching its reach longer than ever before. Major

players are focusing overseas markets for outsourcing cheap manufacturing as well as expanding

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

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

developing rhythm, but must export overseas now to sustain their positions in the market.

Couriers 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 specialized service with

authenticated signatures. It has tracking service with each service being treated as a specific

individual case. The courier industry specializes in time-definite, reliable transportation services

for documents, packages and freight. This is done via a combination of transport networking that

includes road, rail, sea and air for door-to-door delivery. This extensive distribution system is

supported by infrastructure that comprises hubs, warehouses, IT 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, whereas others rely on some of the larger courier companies

when it comes to providing international deliveries. One of the main reasons for the increase in

courier companies is the boom in global trade, probably largely down to the Internet. Couriers

have to deal with all sorts of requests from delivering simple mail documents to large electronic

items like computers, printers and televisions. Simply put, the courier market has grown due to

demand from customers and businesses. The study therefore focuses on the various aspect of the

supply chain management in courier industry which makes it efficient to any market variation.

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TABLE OF CONTENTS

TOPICS Page No. 1. Introduction 6

Background……………………………………………………………… 7 Silent features of industry…………………………………………….. 14 Growth of courier Industry in India…………………………………… 25 Logistics- Backbone of Courier Industry……………………………. 28 Courier Services in India……………………………………………… 32

2. Literature Review………………………………………………………… 35

Courier Company Study……………………………………………… 36 Blue Dart………………………………………………………………. 36 Dart Apex……………………………………………………………… 41 DHL…………………………………………………………………….. 43 DTDC…………………………………………………………………… 45 First Flight……………………………………………………………… 45 FedEx…………………………………………………………………… 47 Research Paper on Logistics and supply chain practices in India… 50

3. Design and Method of Study……………………………………………… 57

Design……………………………………………………………………. 68 Different Steps in Study………………………………………………… 60 Preparation of questionnaire…………………………………………… 61 Layout of questionnaire………………………………………………… 61 The pilot………………………………………………………………….. 62 Sample…………………………………………………………………… 62

Analysis……………………………………………………………………. 62

4. Analysis……………………………………………………………………. 63 Response and Analysis………………………………………………… 64 Inbound Supply Chain ………………………………………………… 64 Outbound Supply Chain……………………………………………….. 66 Role of IT in Supply Chain …………………………………………… 81 Occurrence of Waste…………………………………………………… 83

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Topics Page No.

5. Summary and Conclusion……………………………………………… 87

Major Finding……………………………………………………………. 88

Conclusion……………………………………………………………….. 90

Limitation of Study………………………………………………………. 91

Future of Research……………………………………………………… 91

6. Bibliography……………………………………………………………….. 92

7. Appendices………………………………………………………………… 93

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Introduction

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Background:-

A courier is a person or a company who delivers messages, packages, and mail. Couriers are

distinguished from ordinary mail services by features such as speed, security, tracking, signature,

specialization and individualization of services, and committed delivery times, which are

optional for most everyday mail services. As a premium service, couriers are usually more

expensive than usual mail services, and their use is typically restricted to packages where one or

more of these features are considered important enough to warrant the cost.

Different courier services operate on all scales, from within specific towns or cities, to regional,

national and global services. The world's largest courier companies are DHL, FedEx, TNT N.V.,

UPS, and Aramex. These offer services worldwide, typically via a hub and spoke model.

Couriers before the industrial era

In ancient times runners and homing pigeons and riders on horseback were used to deliver timely

messages. Before there were mechanized courier services foot messengers physically ran miles

to their destinations. To this day there are marathons directly related to actual historical

messenger routes.

Types of couriers

In cities, there are often bicycle couriers or motorcycle couriers but for consignments requiring

delivery over greater distance networks, this may often include lorries, railways and aircraft.

Many companies who operate under a Just-In-Time or "JIT" inventory method often utilise on-

board couriers. On-board couriers are individuals who can travel at a moment's notice anywhere

in the world, usually via commercial airlines. While this type of service is the second costliest—

general aviation charters are far more expensive—companies analyze the cost of service to

engage an on-board courier versus the "cost" the company will realise should the product not

arrive by a specified time (i.e. an assembly line stopping, untimely court filing, lost sales from

product or components missing a delivery deadline, organ transplants).

Representative couriers

Over time, demand for a new type of representative courier has emerged. With the increase in

fuel prices and productivity goals monitored closely by companies, this new type of all-in-one

courier has developed to "take care of business". Workers in companies have more work and less

time to be out of the office. Operating largely using independent contractors that have gone

through a screening process and background checks have found a niche in the courier industry.

Research, in transit pet care, complex paperwork filing, and a host of other services are now

offered in this new category of courier service.

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Supply chain management (SCM) is the management of a network of interconnected

businesses involved in the ultimate provision of product and service packages required by end

customers (Harland, 1996).Supply chain management spans all movement and storage of raw

materials, work-in-process inventory, and finished goods from point of origin to point of

consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the "design,

planning, execution, control, and monitoring of supply chain activities with the objective of

creating net value, building a competitive infrastructure, leveraging worldwide logistics,

synchronizing supply with demand and measuring performance globally."

More common and accepted definitions of supply chain management are:

Supply chain management is the systemic, strategic coordination of the traditional

business functions and the tactics across these business functions within a particular company

and across businesses within the supply chain, for the purposes of improving the long-term

performance of the individual companies and the supply chain as a whole (Mentzer et al., 2001).

A customer focused definition is given by Hines (2004:p76) "Supply chain strategies

require a total systems view of the linkages in the chain that work together efficiently to create

customer satisfaction at the end point of delivery to the consumer. As a consequence costs must

be lowered throughout the chain by driving out unnecessary costs and focusing attention on

adding value. Throughput efficiency must be increased, bottlenecks removed and performance

measurement must focus on total systems efficiency and equitable reward distribution to those in

the supply chain adding value. The supply chain system must be responsive to customer

requirements."

Supply chain management is a cross-function approach including managing the movement of

raw materials into an organization, certain aspects of the internal processing of materials into

finished goods, and the movement of finished goods out of the organization and toward the end-

consumer. As organizations strive to focus on core competencies and becoming more flexible,

they reduce their ownership of raw materials sources and distribution channels. These functions

are increasingly being outsourced to other entities that can perform the activities better or more

cost effectively. The effect is to increase the number of organizations involved in satisfying

customer demand, while reducing management control of daily logistics operations. Less control

and more supply chain partners led to the creation of supply chain management concepts. The

purpose of supply chain management is to improve trust and collaboration among supply chain

partners, thus improving inventory visibility and the velocity of inventory movement.

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Activities/Levels:-

Strategic level

Strategic network optimization, including the number, location, and size of warehousing,

distribution center, and facilities.

Strategic partnerships with suppliers, distributors, and customers, creating

communication channels for critical information and operational improvements such as cross

docking, direct shipping, and third-party logistics.

Product life cycle management, so that new and existing products can be optimally

integrated into the supply chain and capacity management activities.

Information technology chain operations.

Where-to-make and make-buy decisions.

Aligning overall organizational strategy with supply strategy.

It is for long term and needs resource commitment.

Tactical level

Sourcing contracts and other purchasing decisions.

Production decisions, including contracting, scheduling, and planning process definition.

Inventory decisions, including quantity, location, and quality of inventory.

Transportation strategy, including frequency, routes, and contracting.

Benchmarking of all operations against competitors and implementation of best practices

throughout the enterprise.

Milestone payments.

Focus on customer demand and Habits.

Operational level

Daily production and distribution planning, including all nodes in the supply chain.

Production scheduling for each manufacturing facility in the supply chain (minute by

minute).

Demand planning and forecasting, coordinating the demand forecast of all customers and

sharing the forecast with all suppliers.

Sourcing planning, including current inventory and forecast demand, in collaboration

with all suppliers.

Inbound operations, including transportation from suppliers and receiving inventory.

Production operations, including the consumption of materials and flow of finished

goods.

Outbound operations, including all fulfillment activities, warehousing and transportation

to customers.

Order promising, accounting for all constraints in the supply chain, including all

suppliers, manufacturing facilities, distribution centers, and other customers.

From production level to supply level accounting all transit damage cases & arrange to

settlement at customer level by maintaining company loss through insurance company.

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Importance of supply chain management:-

Organizations increasingly find that they must rely on effective supply chains, or networks, to

compete in the global market and networked economy, In Peter Drucker's (1998) new

management paradigms, this concept of business relationships extends beyond traditional

enterprise boundaries and seeks to organize entire business processes throughout a value chain of

multiple companies.

During the past decades, globalization, outsourcing and information technology have enabled

many organizations, such as Dell and Hewlett Packard, to successfully operate solid

collaborative supply networks in which each specialized business partner focuses on only a few

key strategic activities (Scott, 1993). This inter-organizational supply network can be

acknowledged as a new form of organization. However, with the complicated interactions among

the players, the network structure fits neither "market" nor "hierarchy" categories (Powell, 1990).

It is not clear what kind of performance impacts different supply network structures could have

on firms, and little is known about the coordination conditions and trade-offs that may exist

among the players. From a systems perspective, a complex network structure can be decomposed

into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply

network concentrate on the inputs and outputs of the processes, with little concern for the

internal management working of other individual players. Therefore, the choice of an internal

management control structure is known to impact local firm performance (Mintzberg, 1979).

In the 21st century, changes in the business environment have contributed to the development of

supply chain networks. First, as an outcome of globalization and the proliferation of

multinational companies, joint ventures, strategic alliances and business partnerships, significant

success factors were identified, complementing the earlier "Just-In-Time", "Lean Manufacturing"

and "Agile Manufacturing" practices. Second, technological changes, particularly the dramatic

fall in information communication costs, which are a significant component of transaction costs,

have led to changes in coordination among the members of the supply chain network (Coase,

1998).

Many researchers have recognized these kinds of supply network structures as a new

organization form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation",

"Global Production Network", and "Next Generation Manufacturing System".In general, such a

structure can be defined as "a group of semi-independent organizations, each with their

capabilities, which collaborate in ever-changing constellations to serve one or more markets in

order to achieve some business goal specific to that collaboration" (Akkermans, 2001).

The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC

28001 and related standards published jointly by ISO and IEC

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Historical developments in supply chain management:-

Six major movements can be observed in the evolution of supply chain management studies:

Creation, Integration, and Globalization (Movahedi et al., 2009), Specialization Phases One and

Two, and SCM 2.0.

1. Creation era

The term supply chain management was first coined by a U.S. industry consultant in the early

1980s. However, the concept of a supply chain in management was of great importance long

before, in the early 20th century, especially with the creation of the assembly line. The

characteristics of this era of supply chain management include the need for large-scale changes,

re-engineering, downsizing driven by cost reduction programs, and widespread attention to the

Japanese practice of management.

2. Integration era

This era of supply chain management studies was highlighted with the development of

Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the

introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop

into the 21st century with the expansion of internet-based collaborative systems. This era of

supply chain evolution is characterized by both increasing value-adding and cost reductions

through integration.

In fact a supply chain can be classified as a Stage 1, 2 or 3 networks. In stage 1 type supply

chain, various systems such as Make, Storage, Distribution, Material control, etc. are not linked

and are independent of each other. In a stage 2 supply chain, these are integrated under one plan

and are ERP enabled. A stage 3 supply chain is one in which vertical integration with the

suppliers in upstream direction and customers in downstream direction are achieved. An example

of this kind of supply chain is Tesco.

3. Globalization era

The third movement of supply chain management development, the globalization era, can be

characterized by the attention given to global systems of supplier relationships and the expansion

of supply chains over national boundaries and into other continents. Although the use of global

sources in the supply chain of organizations can be traced back several decades (e.g., in the oil

industry), it was not until the late 1980s that a considerable number of organizations started to

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integrate global sources into their core business. This era is characterized by the globalization of

supply chain management in organizations with the goal of increasing their competitive

advantage, value-adding, and reducing costs through global sourcing.

4. Specialization era—phase one: outsourced manufacturing and distribution

In the 1990s, industries began to focus on ―core competencies‖ and adopted a specialization

model. Companies abandoned vertical integration, sold off non-core operations, and outsourced

those functions to other companies. This changed management requirements by extending the

supply chain well beyond company walls and distributing management across specialized supply

chain partnerships.

This transition also re-focused the fundamental perspectives of each respective organization.

OEM‘s became brand owners that needed deep visibility into their supply base. They had to

control the entire supply chain from above instead of from within. Contract manufacturers had to

manage bills of material with different part numbering schemes from multiple OEM‘s and

support customer requests for work -in-process visibility and vendor-managed inventory (VMI).

The specialization model creates manufacturing and distribution networks composed of multiple,

individual supply chains specific to products, suppliers, and customers, who work together to

design, manufacture, distribute, market, sell, and service a product. The set of partners may

change according to a given market, region, or channel, resulting in a proliferation of trading

partner environments, each with its own unique characteristics and demands.

5. Specialization era—phase two: supply chain management as a service

Specialization within the supply chain began in the 1980s with the inception of transportation

brokerages, warehouse management, and non-asset-based carriers and has matured beyond

transportation and logistics into aspects of supply planning, collaboration, execution and

performance management.

At any given moment, market forces could demand changes from suppliers, logistics providers,

locations and customers, and from any number of these specialized participants as components of

supply chain networks. This variability has significant effects on the supply chain infrastructure,

from the foundation layers of establishing and managing the electronic communication between

the trading partners to more complex requirements including the configuration of the processes

and work flows that are essential to the management of the network itself.

Supply chain specialization enables companies to improve their overall competencies in the same

way that outsourced manufacturing and distribution has done; it allows them to focus on their

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core competencies and assemble networks of specific, best-in-class partners to contribute to the

overall value chain itself, thereby increasing overall performance and efficiency. The ability to

quickly obtain and deploy this domain-specific supply chain expertise without developing and

maintaining an entirely unique and complex competency in house is the leading reason why

supply chain specialization is gaining popularity.

Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has

taken root primarily in transportation and collaboration categories. This has progressed from the

Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-

6. Supply chain management 2.0 (SCM 2.0)

Building on globalization and specialization, the term SCM 2.0 has been coined to describe both

the changes within the supply chain itself as well as the evolution of the processes, methods and

tools that manage it in this new "era".

Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase

creativity, information sharing, and collaboration among users. At its core, the common attribute

that Web 2.0 brings is to help navigate the vast amount of information available on the Web in

order to find what is being sought. It is the notion of a usable pathway. SCM 2.0 follows this

notion into supply chain operations. It is the pathway to SCM results, a combination of the

processes, methodologies, tools and delivery options to guide companies to their results quickly

as the complexity and speed of the supply chain increase due to the effects of global competition,

rapid price fluctuations, surging oil prices, short product life cycles, expanded specialization,

near-/far- and off-shoring, and talent scarcity.

SCM 2.0 leverages proven solutions designed to rapidly deliver results with the agility to quickly

manage future change for continuous flexibility, value and success. This is delivered through

competency networks composed of best-of-breed supply chain domain expertise to understand

which elements, both operationally and organizationally, are the critical few that deliver the

results as well as through intimate understanding of how to manage these elements to achieve

desired results. Finally, the solutions are delivered in a variety of options, such as no-touch via

business process outsourcing, mid-touch via managed services and software as a service (saas),

or high touch in the traditional software deployment model.

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SALIENT FEATURES OF THE INDUSTRY

The courier industry specializes in time-definite, reliable transportation services for documents,

packages and freight.

The industry has exhibited a growth of about 30% over the past four years and is expected to

grow at 25% for the next two to three years, making it one of the fastest growing segments in the

transportation of cargo.

International express cargo holds 6% of the express cargo industry, but is forecasted to reach

40% by 2017.

The domestic courier industry with a turnover of Rs 20 bn is still at a nascent stage as compared

to developing countries like China where the industry is five to six times bigger.

Currently there are about 2300 courier companies in India, but four major players in the premium

organized segment dominate the industry.

Courier industry by country

United Kingdom

The genus of the UK same day courier market stems from the London Taxi companies but soon

expanded into dedicated motorcycle dispatch riders with the taxi companies setting up separate

arms to their companies to cover the courier work. During the late 1970s small provincial and

regional companies were popping up throughout the country. Today, there are many large

companies offering next-day courier services, including UK Mail Ltd., City Link Ltd. and UK

divisions of worldwide couriers such as APC Overnight, FedEx, DHL, UPS, TNT and Fastway

Couriers.

There are many 'specialist' couriers usually for the transportation of items such as

freight/palettes, sensitive documents and liquids.

The 'Man & Van'/Freelance courier business model is highly popular in the United Kingdom,

with thousands upon thousands of independent couriers and localised companies, offering next-

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day and sameday services. This is likely to be so popular because of the low business

requirements (a vehicle) and the lucrative number of items sent within the UK every day.

However, since the dawn of the electronic age the way in which businesses use couriers has

changed dramatically. Prior to email and the ability to create PDFs, documents represented a

significant proportion of the business. However, over the past 5 years documentation revenues

have decreased by 50 per cent. In addition customers are also demanding more from their courier

partners. Therefore a shift where, more and more, organizations prefer to use the services of

larger organizations who are able to provide more flexibility and levels of service is being

witnessed which has led to another level of courier company, the regional couriers. This is

usually one of the local companies who have expanded to more than one office to cover an area

such as LTG Couriers in Yorkshire or London Link in the south and Scarlet Couriers in the

Midlands.

CitySprint, in particular, foresaw the changing trends and started buying up these other

companies.

Some believe that an advantage of using individual couriers, over an established same day

courier firm is that they are able to offer far better rates to their customers. However, in reality,

larger organizations are far more flexible and able to offer very cost effective rates to their

customers.

Another benefit of using larger courier firms is the added-value services they provide. Many

companies now offer PODs online. Lots of the smaller companies and freelance 'Man & Vans'

are unable to provide this. CitySprint took this one step further with the launch of its real-time

system, CourierLocator which was the UK‘s first national, live courier tracking system. The

system enables customers to view a real-time map location of the courier undertaking their

SameDay courier delivery.

The unrivalled transparency was made possible following CitySprint‘s investment in GPS

handheld units, namely CityTrakkers. These handheld computers transmit real-time information

to and from the CitySprint system enabling CitySprint to have full sight of its entire courier fleet

at any time. This is a benefit which is enjoyed by many of CitySprint‘s customers.

Royal Mail was up until recently a reasonable competitor of most of the large couriers; offering

next day and special delivery services. This has however changed, with higher costs, strike

action and a lowering public perception of the company. With companies like Royal Mail & The

DX (who offer a private courier 'box network'), it can be difficult to draw a clear-cut line

between postal services and couriers.

Some UK couriers offer next-day services to other European countries. FedEx and Interlink

Express both offer next-day air delivery to many EU countries. Cheaper 'By-Road' options are

also available, varying from 2 days delivery time (e.g. France), to up to a week (e.g. Former

USSR countries).

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Large couriers often require an account to be held (and this can include daily scheduled

collections). Senders are therefore primarily in the commercial/industrial sector (and not the

general public); some couriers such as DHL do however allow public sending (at higher cost

than regular senders).

United States

The courier industry has long held an important place in United States commerce and been

involved in pivotal moments in the nation's history such as westward migration and the gold

rush. Wells Fargo was founded in 1852 and rapidly became the preeminent package delivery

company. The company specialised in shipping gold, packages and newspapers throughout the

West, making a Wells Fargo office in every camp and settlement a necessity for commerce and

connections to home. Shortly afterward, the Pony Express was established to move packages

more quickly than the traditional method, which followed the stagecoach routes. It also

illustrated the demand for timely deliveries across the nation, a concept that continued to evolve

with the railroads, automobiles and interstate highways and which has emerged into today‘s

courier industry.

The Courier industry in the United States is a $59 billion industry, with 86% of the business

shared by only four companies, including DHL, FedEx and UPS. The remaining 14% shared

among almost 11,900 other small businesses ranging in size from 1 employee to over 600. These

businesses comprise of mostly same day deliveries and are strong offline businesses and strong

online businesses like NAPAREX and USA Couriers

United States

Ondot Couriers & Cargo Ltd- On right Time right Point

International Air Couriers

UPS

FedEx

DHL

NAPAREX

International Courier Network (ICN)

Royale International Courier Inc

Bid or Send

Australia

There are several courier companies in Australia which cover most of the land which is both

sparsely populated and remote.

Yellow Express Sydney

Find and Freight Couriers

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Freight Broker Logistics

Civic Transport

Parcel Post

Australian Air Express

Pack and Send

AusPost

Toll / Ipec

Startrack Express

Fastway Couriers

Airroad express

DHL, FedEx, UPS, AFF

Courier's Please

TNT and Hunter Express.

Allied

FRF Couriers

Courier Easy

Australian Freight

Courier Quotes Australia

Royale International Couriers

People's Republic of China

Major players include:-

Speed Global Logistics Co., Ltd. - On-board Courier, Handcarry, Time Critical Shipment

Specialist

DHL-Sinotrans International Air Courier Ltd.

Federal Express (China) Co., Ltd.

UPS Parcel Delivery Co., Ltd.

China Railway Express Co., Ltd.

TNT (China) Holdings Co., Ltd.

SF Express (ShunFeng Express)

STO (ShenTong Express)

YTO (YuanTong Express)

Royale Asia Ltd (Hand Carry, Courier & International Freight Forwarding Agency)

(Beijng, Shanghai, Shenzhen)

Bid or Send

India

DHL

First Flight Couriers Ltd.

Airways Logistics Mumbai, India

DTDC

Gati

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Flyking Courier Services Pvt. Ltd.

Professional Couriers

Blue Dart

Speed Post (indian Post)

TNT

Indonesia

DHL

FedEx

TNT

DPEX

UPS

ARAMEX

OCS

Elteha

JNE

Titipan Kilat

Pandu Logistics

BYGA Cargo

Herona Express

Canada

1. Purolator - Domestic and international courier services

2. DHL Canada - Worldwide courier services

3. ICS Courier - Local and domestic courier services

4. Amadeos Courier Express - International and domestic courier services

5. Greyhound Canada - Worldwide courier services

6. Novex Clean - Domestic courier services

7. Sameday Worldwide - International courier services

8. Cardinal Couriers Ltd. - Local courier services

9. DTDC Courier Serv

10. UPS

11. FedEx

12. Canpar

13. Midland Courier

14. QA Courier - Local (Montreal, Ottawa, Toronto, Waterloo), National, International

Courier Service

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Iran

1. Payam Air - Domestic and international courier services

2. ACC, Ashena Courier Co,

3. DHL Iran - Worldwide courier services

4. GMS Express Pvt Ltd - domestic International Courier & Cargo

Malaysia

Courier services in Malaysia are relatively young. In the early 1970s foreign companies such as

DHL and OCS beginning their operations in Malaysia. The first local courier company to operate

in Malaysia is City-Link Express (M) Sdn Bhd which began its operations in 1979. This was

followed by ABX Express (1984) and Nationwide Express (1985). POSLAJU (part of the Pos

Malaysia) and UPS appeared in the scene in 1988. FEDEX came in 1991. In 1997 a local outfit

GD Express began operating. Today the domestic courier service is mainly dominated by City-

Link Express, Nationwide Express and GD Express (GDex). Both Nationwide and GDex are

public listed company while City-Link Express had remained firmly in the hands of its founder,

David Tan.

In the Malaysian Communications and Multimedia Commission ([3]

MCMC) report for 1H-2008

ISSN 1823-9919 it was reported that the number of Licensed Courier Service Providers as at

30.06.2008 total 114 companies.

The major players being (alphabetical order)

1. ABX Express (M) Sdn Bhd

2. City-Link Express (M) Sdn Bhd

3. DHL Worldwide Express Sdn Bhd

4. Federal Express Services (M) Sdn Bhd

5. GD Express Bhd

6. Kangaroo Worldwide Express (M) Sdn Bhd

7. Nationwide Express Courier Services Bhd

8. Skynet Worldwide (M) Sdn Bhd

9. TNTT Packages Express Sdn Bhd

10. United Parcel Service (M) Sdn Bhd

Russia

1. ProfKurier - delivery in Moscow, Courier, Courier delivery, express delivery, courier

services

Page | 20

South Africa

Aerospeed Couriers - Local and international express delivery[4]

Royale International

Mexico

DHL

Estafeta

Multipack

UPS

Aeroflash

Other aspects of Courier Industry:-

Same day couriers:-

Same day couriers, as the name suggest, pick up and deliver on the ‗same day‘. Deliver in less

than 24 hours and are an integral part of any modern economy. There are roughly seven thousand

courier companies in the United States that make up this multi-billion dollar sector. The UK

same day courier industry is highly fragmented with CitySprint assuming the largest portion at

around 10 per cent.

The business model for the courier industry is particularly dependent on independent contractors.

It is estimated that 50-65% of U.S. courier companies use independent contractors to make

deliveries in addition to their own dedicated employee resources.[citation needed]

The nature of the

industry, with its on-demand, often unscheduled delivery model, requires a varying number of

courier drivers on any given day and time of day to complete a set service. Experts in this

method of network delivery maintain hundreds of standby couriers in a "ready to move" status as

devised by Mark Kent, professor of Logistics at the University of Ghent. However, this business

model is under threat from IRS Reclassification where IC's are being recategorized as W-2

employees. This reclassification typically results in fines being imposed on the offending courier

company.

In December 2007, the Internal Revenue Service of the US 'tentatively decided' that FedEx

Ground Division might be facing a tax liability of $319 million for 2002, due to misclassification

of its operatives as independent contractors. Reversing a 1994 decision which allowed FedEx to

classify its operatives that own their own vehicles, the IRS is auditing the years 2003 to 2006,

with a view to assessing whether similar misclassification of operatives has taken place. FedEx

denies that any irregularities in classification have taken place, but is facing legal action from

operatives claiming benefits that would have accrued had they been classified as employees.[5]

Many expedited courier companies are regional; small businesses which can also provide

additional services such as logistics management, archive warehousing, messenger centers,

outsourced mailroom services and coordinated airfreight forwarding delivery services.

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In the UK, most of the couriers or dispatch riders were motorcyclists when the same day delivery

business started to show up in London. These tended to evolved from taxi companies but soon

regional courier companies were popping up throughout the country. Starting in the mid-1980s,

bicycle couriers, who were more economical for shorter distance deliveries,[6]

began to supplant

motorcycle couriers in the larger cities. Rising costs, including insurance premiums and petrol,

made motorcycle couriers less competitive.[citation needed]

Except for the metropolitan areas most of

the same day couriers throughout the country now use small vans to do deliveries. Under the

current financial climate the general trend has seen corporate businesses evaluate courier costs

and steer away from same day couriers and tend to sway towards the cheaper next day delivery

solution. The exception to this rule is where courier companies have been able to differentiate

themselves and develop services aimed at specific business needs. CitySprint, for example,

launched SecureData Courier which is a premium SameDay courier service designed for the safe

and secure delivery of confidential, valuable and/or sensitive information. The service has a

number of unique features such as the use of a single, dedicated courier assigned to each delivery

as well as a specialist support team to assist with bookings. With the SecureData Courier service

the package is delivered to the addressee only, as opposed to the offices or reception of the

recipient, ensuring a seamless hand-over. The entire delivery journey can be tracked on a live,

real-time basis from the point of collection providing reassurance as customers can view the

exact whereabouts of the package from collection to delivery.

Customers:-

These couriers specialize in delivering important or sensitive packages that need to be received

in the local area; and/or because of time and temperature concerns, such as organs for transplant

or key equipment or parts that are necessary for day to day operations. While most companies

use courier services certain industries depend on couriers on a daily basis. Biomedical labs need

samples for testing and evaluation, manufacturing industry require parts to keep their plants

operating smoothly, financial institutions transfer multiple documents every day between

branches and processing centers, law firms must deliver confidential signature documents on

very strict deadlines for court filings and pharmaceutical distributors use couriers to transport

medications to hospitals and nursing homes.

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Even two-day delivery services use courier firms. Items that are mis sorted, forgotten or just not

picked up on a larger courier‘s route. When a mistake has been discovered, courier firms fill in

the gap and ensure packages are delivered on time. One of the leading UK next day couriers

APC Overnight ensure that any timed delivery mis-sorted parcels are urgently collected and run

to their destination on same day delivery vehicles to ensure that the customer still receives the

service that they paid for.

Working conditions of couriers

The conditions of employment of couriers vary from country to country, city to city and even

company to company. Contracts governing the relationship between individual courier and

company are subject as much to customary practice, as local ordinance. In some places couriers

are independent contractors paid on commission and do not receive benefits such as health

insurance. In other places they will be regular employees of the courier company enjoying all the

benefits thereof.

In the US, the Obama-Durbin Independent Contractor Proper Classification Act of 2007 was

introduced to deal with the problem of workers 'misclassified' as independent contractors.[7]

It is

not clear what effect this legislation, if enacted, will have on the U.S. courier market. But if, as is

the Act's intention, courier companies are forced to treat those workers that they previously

declared independent contractors, as employees, with all the benefits thereof, then there is no

doubt that costs will rise.

The employment status of the couriers of one of the UK's biggest sameday courier services,

CitySprint, was challenged by the GMB trade union in December 2007. The challenge arose

from the firm deciding to terminate the contract of one of its self-employed couriers after a series

of misdemeanors.

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Courier industry — It's all about technology:-

The past years has been one of increased activity in the air express market with FedEx, UPS and

DHL focusing on India with services and products.

Though the express and logistics industry has seen double-digit growth, automation, service

standards and systems are still far below international standards. The Indian shipper, therefore,

has to deal with extremes — the best of technology or none at all.

But Mr Jeffrey Fairbairn, Director and CEO, UPS Jetair Express Pvt Ltd, makes a distinction

here. "First, I think that the word "courier" describes or perceives that this is an industry that is

somehow involved in the movement of documents and the like. I think that this description does

not fit the industry that we are in today."

"Our focus is clearly to work with customers on their supply chains and to ensure that they are

capable of competing as a global supplier in this age of globalisation, not to mention the impact

that can be made to a company's balance-sheet," Mr Fairbairn says.

This is another dimension and it is about real advancements in what is perceived today and what

is possible. He says that it is about the velocity at which you move goods, information and funds.

It is about technology.

Mr Fairbairn points out that India has a long way to go in creating an environment that enables

companies to truly control their supply chains with the latest technology. He says that though it

is happening the pace needs to be quicker.

Consolidation and going it alone is another issue that has kept the express companies busy this

last year. Mr Fairbairn says there are two ways of covering a market — you either go on your

own or tie up with a partner who can provide the infrastructure and reach. So, in that sense there

has been some consolidation in the industry in India.

He says that as for UPS, in terms of on-ground service it has its own operations. This allows it to

provide and maintain the service quality offered to customers across the globe. "When there is

Page | 24

third party intervention, our experience is that service levels and more importantly service

standards are difficult to maintain here," Mr Fairbairn says.

FedEx has an uncanny knack of knowing the region where the growth will come from, says Mr

Birender Ahluwalia, Marketing Manager (India, Sri Lanka, Bangladesh and the Maldives).

He says that as early as 1997 FedEx had decided to focus on India. Then last year, FedEx shifted

its business model and assumed full control of its retail operations.

Mr Ahluwalia says that in the last year the company has grown its retail business from five retail

counters to 52, and from four cites to 12. FedEx is now available out of eight gateways out of

India.

Though reluctant to reveal the actual numbers, Mr Ahluwalia says that the company has seen

growth mainly because it was able to introduce India- specific products.

For instance, he says, this was the only company equipped to carry dangerous and valuable

goods. Another product, which is tailored to meet the needs of the Indian exporter, is the fashion

solutions, he says.

DHL Worldwide Express plans to invest euro 50 million on infrastructure in the India, over a

three-year period. Mr Chris Callen, Country Manager, DHL Worldwide Express (India) Pvt Ltd,

recently told Business Line that the investment has been made into equipping the company's own

gateways at the major airports. DHL will start operating out of Delhi by October. It has tied up

with Blue Dart for ground operations.

DHL Danzas Air and Ocean, a part of DHL, has tied up with Lemuir for air and ocean freight

which gives it this capability also.

In DHL has eight warehouses that support its strategic partners in India for their spare parts

requirements. DHL warehouses and manages inventory of these crucial parts for the companies

and deliveries at the required time.

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Growth of Courier Industry In India:-

The Indian express industry is set for sizzling growth, despite rising usage of facilities like short

messaging services or multimedia message services.

If anything, several large-sized corporates and multinational express players are keen on

acquiring controlling stake in some of established Indian courier companies.

The reason: India's express industry is expected to register a growth of at least 20 per cent per

annum during the next five years and more than double its size by 2012, according to a study by

rating agency Credit Analysis & Research.

Opening of banking, insurance, retail, aviation and telecom sectors and their penetration to

smaller cities would be the major growth driver.

According to CARE, the size of India's courier industry currently stands at around Rs 7,100 crore

(Rs 71 billion) and is estimated to have grown at a CAGR of around 33 per cent over the past

decade. At its current estimated size, the courier industry is larger than the tea industry and close

to the size of paper and shipping industries in India.

The industry ranks amongst the fastest growing segments of the Indian economy and over the

next five years, it is expected to register a growth rate higher than of industries such as retail,

banking, financial, chemical and automobiles.

The industry is highly fragmented with more than 2500 express players and a few large sized

players account more than half of the industry revenues.

The industry contributes more than Rs 1000 crore (Rs 10 billion) to the government revenues by

way of service tax, income tax and other levies and it offers employment opportunity to about a

million people.

According to an Edelweiss Research study, the organized part of the express industry in India is

65 per cent of the total market. "Organized sector in the domestic market is little less than 50 per

cent. The unorganized and semi organized segments, which consist largely of regional and intra-

city service providers and EMS Speed post, account for the rest," it says.

"The organized segment, including the international majors' share, constitutes approximately 65

per cent of the total and is made up of a small group of fewer than two-dozen players," Edelweiss

adds.

Page | 26

Amongst domestic players Blue Dart, DTDC, First Flight and Overnite Express are leading

express services companies in India while UPS, FedEx, DHL and TNT are leading international

player‘s presence in the country.

According to the CARE survey, the industry players earn about 52 per cent of its revenues from

document parcels.

Document parcels weighing less than 300 grams account for about 70 per cent of the volume of

document parcels and intra-city deliveries account for nearly 37 per cent of their turnover.

Challenges faced by the industry include matching up to the rising expectations of the customer,

expanding the network to reach hitherto uncovered areas, containing rising fuel and freight costs

and retention of manpower.

India Courier Summit 2010:-

India Courier Summit 2010 offered an ideal platform to the courier industry to discuss issues of

common interest. India Courier Exhibition gives an opportunity to the value partners of the

industry, to showcase new trends and technologies that can add value to the efficient working of

the industry, to meet the desired demands of discerning customer. Organized by Manch

Communications (P) Ltd, India Courier Summit will be held on 6th & 7th April, 2010 at Hotel

Le Meridian, New Delhi, India.

India Courier Summit 2010 will endeavor to bring all the frontline stakeholders of the industry in

the country, under one roof, to deliberate on the challenges faced by the industry and also create

opportunities for networking for mutual benefit. The summit on courier industry will provide an

opportunity to the service providers of the industry to mark their presence among 100 plus

exhibition organizers from India and Overseas.

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Exhibit Profiles:

Suppliers to courier industry from all over the world

Vehicle Manufacturers

Material Handling Equipment Manufacturers

Barcode Sensors Companies

Weighing Machines Companies

Label Manufacturers

Ware-House suppliers

RFID Chips and Software

Storage Systems

Sorting Machines

Visitors Profile:

Major Courier companies

Industry Associations

Sales Agents of Courier Companies

Service Providers

IT Consultants

International logistic agencies

Government and autonomous bodies of the Courier Industry

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Logistics – The backbone of Courier Industry:-

Logistics is concerned with getting the products and services where they are needed when they

are desired. It is difficult to accomplish any marketing or manufacturing without logistical

support. It involves the integration of information, transportation, inventory, warehousing,

material handling, and packaging.

The operating responsibility of logistics is the geographical repositioning of raw materials, work

in process, and finished inventories where required at the lowest cost possible

The formal definition of the word ‗logistics‘ is: - it is the process of planning, implementing and

controlling the efficient, effective flow and storage of goods, services and related information

from the point of origin to the point of consumption for the purpose of conforming to customer

requirements.

In order to understand the concepts of logistics in terms of practical usage and to glimpse into the

how a real company or organization uses logistics as a formidable tool to gain customer

satisfaction, reduce overall cost and increase efficiency we selected ―DHL‖ the world‘s leading

courier Service Company. But DHL is multi-faceted and offers myriad types of services.

GLOBAL LOGISTICS SCENARIO:

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 for

lower-wages, transportation industry is stretching its reach longer than ever before. Major

players are focusing overseas markets for outsourcing cheap manufacturing as well as expanding

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

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

developing rhythm, but must export overseas now to sustain their positions in the market.

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

suppliers. Web-based sales, services and supplies are emerging vertically. The expanding reach

has compelled logistic industry to spur cross-border trade. Regardless-of this outbreak of

activity, it is commonplace also for expert managers of local logistics to get acquainted with the

complexity of international trade logistics. Global transportation and relevant services includes

Page | 29

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

times. Evaluation of the arrival times of international shipments is just a magic than solid fact.

The business players always look for just-in-time shipments, thus it aspires enhanced build to

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

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

would decide for carriers, customs agents and so on. Normally, their search doesn‘t go beyond

the initial service providers who cover all the minimum requirements. Once the shipment kicks

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

For example, a ship that started its journey from Asia could meet harsh weather, which may

delay its reaching on the West Coast for three days. On the other hand, the trucks at the West

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

in big loss. These kind of unpredictable losses are usual in international logistics. Thus, even the

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

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

boom in Internet services changed international logistics rapidly.

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

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

Factually, thousands of combinations of containers, ports, and so on are likely counted for

moving a shipment.

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

hundreds carriers, which are operational in dozens 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 stocks.

Thus, the costs of inventory management in the overseas parts are naturally higher. The

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

step. This is easier said than done. However vendors are now offering tracking system, which is

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necessary in continuous tracking of both international logistics network, and electronic visibility

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

the puzzle are gradually coming together. Even though vendors are offering a worldwide

network, significantly added and dedicated, equipment is still required. For example, tracking

completed products needs a yard management system, which recognizes each container in the

yard and its placement.

The radio frequency Identification (RFID) tags in containers, whose place is detected by

antennas located in the yard. Maintaining the clear vision also needs tracking the containers as

soon as they leave the yard. This tracking is possible by Global Positioning (GPS) systems and

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

not provide step-by-step tracking 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. Regardless of understandable limitation, global logistics should obviously

improve. Web-based companies and technically ground-breaking carriers such as UPS Logistics,

Ryder, and others will carry on showing the way. Global logistics in near future should be distant

more faultless and reasonably priced than ever.

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Size of the global logistics industry:-

Currently the annual logistics cost of the world is about USD 3.5 trillion. For any country, the

annual logistics cost varies between 9% and 20% of the GDP, the figure for the US being about

9%. US-based Armstrong & Associates, Inc. tracks the issues and trends in the world logistics

market and in the US logistics market, in particular, in their annual surveys of top 25 global

LSPs. According to the firm, the global logistics market sizes in 1992, 1996 and 2000 were USD

10 billion, USD 25 billion and USD 56 billion, respectively. In 2003 and 2004, the

corresponding figures were USD270 billion and USD 333 billion, registering high growth rates.

Though most of the large LSPs are headquartered in Europe, the US logistics market is the

largest in the world capturing one-third of the world logistics market. In 2003, it was about USD

80 billion.

In 2004, it grew to USD 89 billion, and in 2005, it registered an impressive growth rate of 16%

to cross the USD 100 billion mark for the first time and reach USD 103.7 billion (Foster and

Armstrong, 2004, 2005, 2006). However, considering the fact that the logistics market in the US

is about 10% of its annual logistics cost (Foster and Armstrong, 2006), there is still immense

potential for growth of 3PL in the US in particular, and in the world in general.

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Courier Services in India:-

Indian courier industry had its start some 15-20 years ago. The courier industry was initially

limited to the four metros – New Delhi, Mumbai, Kolkata, and Chennai and to some extent to

Bangalore. The reason was the airport connection these metros were. But, the changing economy

and technical advancement seen on a daily basis, the industry has grown and extended faster to

several cities and even rural areas. And it is still growing.

A courier company anywhere in the world has its primary virtue is its efficiency to render

services. The better the quality of service, the more the satisfied customers, better the chances of

survival. The industry is booming and market is cut-throat competitive. The advancement of

technology and internet has things slight easier and more competitive as well.

Courier services in India can be segregated in few categories. Basically, it begins with intra-city

services which are about speedy delivery of mails and goods within the city. Broadening the

services, inter-city services are covered. Normally this is termed as surface cargo services where

short distance and bulk loads are handled. Surface mode service is performed through two ways:

firstly, on road (by bus or vehicle) and secondly on track (by train) services. The products are

normally delivered through door to door.

Courier companies work in tandem with the foremost airlines and in sync with their well-tuned,

well associated set of connections the timely deliverance and protected service is guaranteed.

Few other variant of services could be express services, ocean freight, industry solutions, logistic

solutions, shipping tools. These particular services are individual of a company's area of

specialization and diversification.

If one tries to find a courier company in India, one can find them in every nook and corner of the

large part of India. The numbers of courier companies in India have seen a growth reminiscent of

wildfire.

Many factors have contributed towards this huge spread. Economic growth, technological

advancements, escalation of industrial sector, increase in export and import and large scale effect

of liberalization are few of the major reasons. Now a day, courier companies are considered as

vital component of any economy.

In the earlier days, the major courier players were centered in major metros because of their

better connectivity with airport, ports and railways. But with India rapidly becoming a major

economic force, now more and more companies are covering cities, towns and rural areas under

their wide network. Despite that development, the large and medium sized companies are still

based in the metro cities of India.

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The courier industry has world over been recognized as an essential and indispensable part of

any economy. In India, various factors like 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. Domestic courier industry with a turnover in excess of INR 22 bn is still in a

nascent stage. India has more than 2,300 courier companies. It is a highly disintegrated industry

with nearly 20 players in the organized sector, 2,000 in the semi organized sector, and the rest in

the unorganized sector. There are a few major players in the organized sector who have a

combined market share of 90%.

Indian courier industry was initially limited to all the four metros. The reason was the airport

connection these metros were having. The industry had its start some 15-20 years ago. But with

changing economy and technical advancement seen on a daily basis, the industry has extended

fast to several metropolis, township and even rural areas. Train, 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 Courier Company in the nearby locality. Owing

to the growing demand for reduced transit time and early deliveries the industry is forecast to

grow at 25% for the next two to three years, making this one of the fastest growing segments in

the transportation of cargo. International express cargo holds 6% of the express cargo industry,

but is forecasted to reach 40% by 2017.

These are some key players in Indian Courier Industries:

1. Blue Dart

2. DHL India

3. FedEx India

4. First Flight Couriers

5. AFL

6. Gati

7. Elbee Express

8. Overnite Express

9. TNT India

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10. UPS India

Blue Dart Express Ltd. (Blue Dart) is the market leader, with a 36% market share in the domestic

market, and Elbee Services Ltd., the second largest player, has a 20% market share. AFL-DHL is

primarily focused on the international segment, where it is the market leader, whereas Gati

Corporation Ltd. (Gati) is the market leader in the domestic packages, ground distribution

segment. In the domestic air packages segment, Blue Dart, having developed its own air network

and aircraft operations, is currently the market leader.

Revenues of Major Player in the Indian Market (Rs. bn):

The organized segment dominates the package and the premium document business since it

requires a strong infrastructure and resources, while the low-yield document business is the

domain of the unorganized sector. However in value terms the share of the organized sector is

64% and of the semi-organized and unorganized sector is 36% inspite of the large volumes it

handles.

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Literature Review

Page | 36

Courier Companies study:-

BLUE DART:-

BLUE DART is South Asia's leading integrated air express carrier and premium logistics-

services provider. It has the most extensive domestic network covering over 13,880 locations,

and service more than 220 countries and territories worldwide through its Sales alliance with

DHL, the premier global brand name in express distribution services.

BLUEDART‘S vision is to establish continuing excellence in delivery capabilities focused on

the individual customer. In pursuit of sustainable leadership in quality services, they have

evolved an infrastructure unique in the country today.

State-of-the-art Technology, indigenously developed, for Track and Trace, MIS, ERP, Customer

Service, Space Control and Reservations.

Blue Dart Aviation, dedicated capacity to support their time-definite morning deliveries through

night freighter flight operations.

Warehouses at 14 locations across the country as well as bonded warehouses at the 6 major

metros of Bangalore, Chennai, Delhi, Mumbai, Kolkata and Hyderabad.

ISO 9001 - 2000 countrywide certification by Lloyd's Register Quality Assurance for their entire

operations, products and services.

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Its Competitive Advantage lies in:-

Blue dart’s vast and unparalleled Domestic Network:

Linked by some of the most advanced communications systems and positioned to offer a consistent,

premium, standardized quality of service.

A spectrum of services to provide customized solutions.

Blue 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 99.96% (as on February, 2005).

It’s Customs and Regulatory expertise

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

well as regulatory clearances at all States within the country, to support seamless service to the

customer.

It’s Technology

Designed to enhance the reliability of our operations and process efficiency, and add

value to the customer through time and cost savings.

It’s Air Network

The only one of its kind in the country today, that is focused on carriage of packages as

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

to support Blue Dart's services is self-sustaining, with its own bonded warehouses, ground

handling and maintenance capability.

Its financial credibility

Fitch Ratings India Pvt. Ltd. has assigned the highest "F1+ (Ind)" [F one plus (Ind)]

rating for their short term debt programme of Rs. 30 crores. Further, ICRA Ltd. has also assigned

the highest "A1+" (pronounced A one plus) Rating for their Commercial Paper Programme of

Rs. 25 crores.

Page | 38

Its People force

Committed, diverse and over 4,000 strong are company‘s most valued asset. All

company‘s achievements have been possible because they have a team who believes in

themselves and their company, a team with a winning attitude. Blue dart is a learning

organization, valuing self-development, and most of company‘s managers are homegrown.

LOGISTICS IN BLUE DART:-

The Information Technology industry is, perhaps, typical of the changing and escalating

logistic demands of various industries today, irrespective of their category as 'old' or 'new'

economy. In the IT industry, the difference between success and failure is closely linked to the

supply/value chain integration, of which there are two distinct processes:

1. The delivery of goods to the customer in the most reliable transit period (and preferably the

shortest) possible. 'Reliable' alludes to a certain guaranteed transit time for packages to reach

customers or the response that organizations need in the event of any exceptions.

2. The reverse flow of acknowledged signed delivery records without which, in many cases,

recovery of bills are virtually impossible. Especially so in the case of companies placing multi-

location orders that could cover hundreds of cities. The task for the supplier is staggering - plan

logistics for deliveries to all these locations, and hope for 100% of the delivery records to be

returned before bills can be submitted to the customer. In most IT companies, the role of

'logistics' or 'fulfillment' is key.

With organizations moving towards close to perfect standards like Six Sigma, interaction with

logistics suppliers has taken on a critical role moving up sometimes to the level of the CEO of

the organization.

Blue Dart Express Limited applied and found solutions to these critical demands much before

other players could even recognize their need. Through its exceptional people processes, superior

technology, and stress on quality systems over the last, almost two decades now, Blue Dart was

quick to fulfill these needs:

Page | 39

The country's most reliable air and surface network offer a pre-determined delivery schedule

with close to 100% accuracy. The IT industry could plan its production with precision and avoid

expensive inventory build-up.

Blue Dart offers the country's most comprehensive communications technology. Much before

the internet was prevalent; Blue Dart customers could dial into the network through Power Dart

2000 and track their packages. As an added option, Fax dart could fax a copy of the delivery

record the minute the Blue Dart system was updated.

The country's only express airline with a fleet of three Boeing 737s ensured that packages were

flown to their destinations overnight. Another tremendous advantage was that the individual size

of packages that could be carried multiplied manifold.

Retrieval of signed delivery records posed the industry's most intriguing problem. Blue Dart was

quick to understand this requirement and put in place a 100% retrieval system.

Blue Dart not only handles large volumes and oversize packages overnight - it also provides the

industry with status of their shipments and retrieves such records as are necessary for billing. The

entire cycle has been considerably shortened, enabling the industry to achieve healthy bottom-

line.

SERVICES OF BLUE DART:-

REGIONAL SERVICES IN SAARC AREA

Between India, Bangladesh, Bhutan and Nepal.

Blue Dart offers the fastest, most reliable, door-to-door express deliveries for your documents

and packages to countries in the SAARC region through Regional Priority. The service offers

access to over 13,700 locations in India, and over 800 locations in Bangladesh, Bhutan and

Page | 40

Nepal, providing the widest coverage in the region through a quality network, an integrated air

and ground infrastructure dedicated to express transportation and innovative technology support.

Regional Priority: Documents (RPDX)

The most dependable and secure delivery for non-dutiable, critical and important shipments such

as legal documents and tenders. The Blue Dart Envelope provides secure and attractive

packaging for your documents, brochures and reports up to 500gms.

Regional Priority: Non-Documents (RPDT)

Fast reliable and safe door deliveries for samples and non-commercial shipments. Currently

available between India and Nepal only.

Different type of regional services: -

DOMESTIC PRIORITY

The fastest, most reliable, door-to-door delivery service within India and to Bangladesh, Nepal

and Bhutan for documents and small shipments under 32kgs per package. The special benefits of

this service are:

Delivery to over 13,700 locations in India

Free pick-up from your location

Real-time Tracking

Regulatory Clearances

Free Computerized Proof of Delivery

Page | 41

DART APEX

Dart Apex is a door-to-door delivery service within India for shipments

weighing 10kgs. And above. It is the fastest, most efficient delivery

solution for commercial shipments that are time-bound and are required

to undergo regulatory clearances, or require special handling.

Dart Apex offers you an economical option of an Airport-to-

Door service from the major airports of Chennai, Bangalore, Mumbai, Delhi, Kolkata and

Hyderabad to all the Dart Apex locations serviced. A customer may book space for their

shipments through company‘s Customer Service and deliver customer shipments to Blue Dart

Aviation Office at the related airport.

Dart Apex also offers a further economical option of a Door-to-Airport service. A

customer may book their shipments at any of company‘s locations serviced for this product to

any of the major airports. Consignee would be required to collect the shipment from the Blue

Dart Aviation office at the concerned airport.

Dart Apex offers the following benefits:

Wide Market Reach

Single-window Clearance

Real-time Information

Time-Definite Delivery

Free Proof of Delivery on Demand

Speed

Flexibility

Economical

Page | 42

DART SURFACELINE

Dart Surfaceline is an economical, door-to-door, ground

distribution service within India for shipments weighing 10 kgs

and above. It offers a cost-effective logistics option for your less

time-sensitive shipments, with the following value-added benefits:

Time-bound Delivery

Track your Shipment

Regulatory Clearances

Pick-up Convenience

Secure Shipments

Economical Tariff

SMART BOX

Smart Box is a convenient, economic, packaging unit

priced to include a door-to-door delivery service within India. The

units come in 2 sizes, 10kgs and 25 kgs, and are designed to

accommodate a variety of products. The special benefits of using

Smart Box are:

A wide market reach

Speedy Delivery

Free pick-up

Real-time Tracking

Page | 43

DHL:-

History and background:-

DHL are the first letters of the last names of the three company founders, Adrian Dalsey, Larry

Hillblom and Robert Lynn.

In 1969, just months after the world had marveled at Neil Armstrong's first steps on the moon,

the three partners took another small step that would have a profound impact on the way the

world does business.

The founders began to personally ship papers by airplane from San Francisco to Honolulu,

beginning customs clearance of the ship's cargo before the actual arrival of the ship and

dramatically reducing waiting time in the harbor. Customers stood to save a fortune.

With this concept, a new industry was born: international air express, the rapid delivery of

documents and shipments by airplane.

The DHL Network continued to grow at an incredible pace. The company expanded westward

from Hawaii into the Far East and Pacific Rim, then the Middle East, Africa and Europe. By

1988, DHL was already present in 170 countries and had 16,000 employees.

At the beginning of 2002, Deutsche Post World Net became the major shareholder in DHL. By

the end of 2002, DHL was 100% owned by Deutsche Post World Net.In 2003, Deutsche Post

World Net consolidated all of its express and logistics activities into one single brand, DHL.

The world's largest express and logistics Network:-

DHL is the global market leader in international express, overland transport and air freight. It is

also the world's number 1 in ocean freight and contract logistics. DHL offers a full range of

customised solutions - from express document shipping to supply chain management.

Page | 44

Below are the global facts and figures that show you the scale of the world's largest express and

logistics network.

Global Facts and Figures:-

Number of Employees: around 285,000

Number of Offices: around 6,500

Number of Hubs, Warehouses & Terminals: more than 450

Number of Gateways: 240

Number of Aircraft*: 420

Number of Vehicles: 76,200

Number of Countries & Territories: more than 220

Shipments per Year: more than 1.5 billion

Destinations Covered: 120,000

DHL Web Shipping: -

DHL WEB SHIPPING's new, simplified navigation guides customers, quickly and easily,

through the entire process. So they can respond to any shipping request within minutes.

With a click of a mouse customers can:

Select the right shipping and value-added services for each shipment

Prepare air waybills and customs documentation on-line

Get the latest service bulletins and customs information

Book collections and track shipments on-line

Save up to 300 customer addresses

Access shipment records for 99 days

Alert recipients and other interested parties

DHL WEB SHIPPING is also perfect for telecommuters. You can order a pick-up, check service

availability or track your shipments from any location, in real time, direct from your wireless

laptop.

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DTDC:-

DTDC is India’s Largest Domestic Delivery Network Company offering various custom

made services ranging from Domestic to International. DTDC delivers to the remotest places in

India with the help of 4,000 business partners spread across the length and breadth of India.

DTDC Courier & Cargo Ltd. (DTDC) was incorporated in 1990. Within a span of 17 years,

through its business associates DTDC expanded its delivery network across the length & breadth

of the country, thereby creating the nation's Largest Domestic Delivery Network. Today DTDC

is one of the largest Indian company in the Express industry. DTDC can also be credited with

pioneering the franchisee concept for the courier industry in India, and today has the largest

franchisee network.

Its headquarter is at Bangalore, with 4 of its Zonal Offices at Delhi, Kolkata, Chennai &

Mumbai, DTDC currently serves around 10,000 pincode areas and has over 4,000 Franchised

outlets, supported by 176 offices, which includes its Branch offices, Regional offices, Area

offices, Hubs and Sub-offices. It handles 10 million consignments every month. DTDC serves

over 240 international destinations.

First Flight:

First Flight Couriers came into being on Monday, 17th November 1986. It all began with the

setting up of three offices at Kolkata, Mumbai and Delhi.

The overwhelming response from customers, was not just a dream come true, but the fruits of an

early realization and recognition of the tremendous potential that the Indian subcontinent offered

in terms of market size.

It was the foresight and dynamism of the Founder Chairman and Managing Director, O. P. Saboo

which created a spring board for the organization to catapult into what it is today – India‘s

Largest Domestic Courier Company.

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930 First Flight Offices across India

2208 Authorized Collection Centers

452 Franchisee Locations

Serving over 5000 Pincode Destinations across India

Dedicated Worforce of over 10000 plus employees

Strategically located 8 own International Offices

Serving over 220 countries globally

The fast paced growth and widening network is the outcome of four basic beliefs:

Speed

Safety

Reliability

Economy

As a natural corollary to its growth endeavor, First Flight is in the process of setting up a large

scale integrated Logistics Division to offer an entire gamut of Warehousing, Inventory

Management, Supply Chain Services and Distribution Channels, thereby providing total end-to-

end solutions to customers.

In keeping with times, First Flight continues to invest substantial effort in building a State-of-

the-Art Super Information Technology highway.

First Flight‘s commitment to corporate excellence and its yearning for making it a common

household name opens floodgates of opportunities and challenges and to meet it head on, shall be

the co:rner stone of its philosophy.

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FedEx:-

Federal Express started operations in India in 1997, and currently operates ten flights a week

from Mumbai to Europe and Asia.

FedEx has an operations agreement with Prakash Airfreight Pvt. Ltd., which provides all pick-

up, and delivery services within India.

FedEx now services from eight centers as against four centers earlier and has branch offices in

Kolkata, Ahmedabad, Hyderabad and Coimbatore, in addition to the current operating locations

in Delhi, Mumbai, Bangalore and Chennai.

Page | 48

Online Tools:-

FedEx Global Supply Chain Services technology platform offers features such

As:-

1. Order administration – efficiently manage the processes associated with order

Fulfillment and transportation

2. Real time visibility – provides a view into inventory at rest and in motion

Throughout the supply chain

3. Connectivity – provides multiple access points to key members of your supply Chain.

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SMART:-

SMART (Space Management Allocation Reservation and Tracking), is an in-house developed

state-of-the-art technology system, which allows real-time space and revenue management on the

Blue Dart Aviation network.

It ensures that the aircraft is filled profitably, and that all customers with space confirmed on the

aircraft have the assurance that their packages would travel.

SMART dovetails into COSMAT II leveraging on the infrastructural strength of the system.

SMART is built on Oracle technologies, with the database housed on Oracle 8i (Release 2).

SHOP TRACK:-

Shop Track is an API (Applications Program Interface) designed specifically to support and

enhances the services provided by a portal or any e-business.

Shop Track provides an effortless, customized solution. Customers no longer have to leave the

Portal site to track their purchases. The Portal can decide how to display the data elements and

may even store them in their database.

Shop Track is another time and cost-saving tool created to arm Blue Dart's customers with a

competitive edge.

PACKTRACK:-

Pack Track is an API (Applications Program Interface) designed for any client involved in

logistics, distribution and inventory control.

It has been designed to streamline and integrate shipping processes.

Pack Track can be integrated into the client's systems and enables him to keep track of the entire

distribution status of all his customers.

Page | 50

Logistics and Supply Chain Management Practices in India

Samir K. Srivastava, Management Development Institute, Gurgaon, India

ABSTRACT

India is the fourth largest country in terms of Purchasing Power Parity (PPP) and

constitutes one of the fastest growing markets in the world. Globalization of businesses,

infrastructural bottlenecks, increasing uncertainty of supply chain networks, shortening of

product life cycles and proliferation of product variety have forced Indian firms to look beyond

their four walls. They face issues related to choosing and working with the right supply chain

partners (suppliers, customers and logistics service providers), fostering trust between them and

designing the right system of gauging performance.

In this paper, we present a snapshot picture of logistics and Supply Chain Management

(SCM) practices in India. It is borne out of the felt need by managers, expert professionals and

academicians to address logistics and supply chain practices at the national level. Our

exploratory study is based on both field visits and secondary data. We capture facts, figures as

well as qualitative responses about the logistics infrastructure and supply chain practices. We

focus on supply chain collaboration and partnerships, supply chain structure, facilities network

design, transportation and logistics and the role of Information and Communications

Technologies (ICT). Field visits to at least one major facility of 25 firms were carried out during

2005. We analyze and assess existing logistics and SCM practices and discern emerging trends

as well as areas of concern. The paper gives insights into how far the firms and their supply

chains in India have come in dealing with major logistics and supply chain issues, the practices

they focus on or need to focus on. We also highlight and address a few issues related to supply

chain managers and policy makers.

Page | 51

LITERATURE REVIEW

Literature portrays logistics and SCM practices from a variety of different perspectives

with a common goal of ultimately improving performance and competitiveness. Based on

literature, we find that the important supply chain practices concerns are mainly related to:

1. Supply Chain Collaboration and Partnership with various stakeholders such as the

product developers, suppliers, channel partners and end-users.

2. Supply Chain Structure including facilities network design taking into account related

transportation and logistics.

3. Forecasting and Demand Management to cope with supply chain complexity in a cost-

effective and delivery-efficient way.

4. Use of Information and Communication Technologies (ICT) to facilitate the above.

While there is plenty of published literature that explains or espouses SCM, there is a

dearth of empirical studies examining logistics and SCM practices. Galt and Dale (1991) study

ten organizations in the UK and find that they are working to reduce their supplier base and to

improve their communications with the suppliers. Fernie (1995) carries out an international

comparison of SCM in the grocery retailing industry. He finds significant differences in

inventory held in the supply chain by the US and European grocery retailers, which could be

explained by difference in degrees of their SCM adoption. Tan and Wisner (2000) compare SCM

in the US and Europe. Tan (2002) relates SCM practices and concerns to firm’s performance

based on data from US companies. He lists nine important supply chain concerns such as lack of

sophisticated ICT infra-structure, insufficient integration due to lack of trust and collaboration

among the supply chain stakeholders and thereby lack of supply chain effectiveness and

efficiencies. Basnet et al. (2003) report the current status of SCM in New Zealand, while Sahay

et al. (2003) discuss supply chain strategies and structures in India. These surveys rank the

perceived importance of some SCM activities, types of hindrances and management tools on the

success of SCM using representative samples mostly from manufacturing. Quayle (2003) surveys

supply chain management practice in UK industrial SMEs (Small Manufacturing Enterprises)

while Kemppainen and Vepsalainen (2003) probe current SCM practices in Finnish industrial

supply chains through interviews of managers in six supply chains. They analyze the change of

SCM both in terms of operational practices and organizational capabilities. Chin et al. (2004)

conduct a survey that examines the success factors in developing and implementing supply chain

management strategies for Hong Kong manufacturers. Moberg et al. (2002) state that there is

little literature on information exchange. Feldmann and Muller (2003) examine the problem of

how to establish an incentive scheme to furnish reliable and truthful information in supply

chains.

Page | 52

There is little literature on logistics and SCM practices in India. Available literature

focuses either on the best practices (Joshi and Chopra, 2004) or on re-engineering of internal

operations of the firms (Deshmukh and Mohanty, 2004, Kankal and Pund, 2004). In context of

ICT, Saxena and Sahay (2000) compare the manufacturing intent to be an agile manufacturer

and their Information Technology (IT) infrastructure in terms of scope of use, extent of use and

integration of IT-based systems. The more recent studies are mainly based on questionnaire

surveys and secondary data sources (Sahay and Mohan, 2003, www.etintelligence.com, Sahay et

al., 2006). Vrat (2004) discusses some issues and challenges as well as the potential of SCM in

India. All these studies find Indian firms generally lagging behind their counterparts in the

developed countries.

LOGISTICS AND SCM PRACTICES FROM SECONDARY SOURCES

Industry and academic estimates put logistics and SCM spend in India at approximately

13% of the Gross Domestic Product (GDP). Global estimates for this vary and are around 13%

of GDP in China and about 9% of GDP in the US. The transportation cost in India accounts for

nearly 40% of the cost of production, with more than half the goods being moved by road.

Trucking accounts for nearly 70% of transportation and accounts for 60% of all logistics cost.

67% of truck ownership is in the hands of small unorganized players. Road is followed by rail

and finally coastal shipping. Rail has been steadily losing ground due to myopic government

strategies and inherent inefficiencies. The freight movement of Indian railways has risen to

411354 net tonne-kilometers (Available at: http://www.indianrail.gov.in/) and the total road

length is 3315231 kilometers (Available at: http://www.nhai.org). Though enormous maritime

routes are available combination of poor government policies and lack of initiative from the

private sector, water which is probably the cheapest mode of transport is barely used. Air as a

mode is limited to a small percentage of courier shipments. Various SCM spend indicators such

as in-bound transportation costs, inventory related costs and distribution expenses as percentage

of net sales vary from industry to industry. However, as per Centre for Monitoring Indian

Economy (CMIE), they are coming down over a period of years. The aggregate of the same for

nine major manufacturing industries for four years are shown in Table II. These industries spent

nearly 17-18% of their net sales on various logistics activities, including distribution,

warehousing, and inventory. Global averages are around 9-12%. So, there is ample scope to

reduce spends on logistics. This in turn allows companies to protect operating margins during

downturns and make above-normal profits during upturns.

Page | 53

Table II: SCM Spend in 9 Major Indian Manufacturing Industries

SCM Spend Indicator 2001-02 2002-03 2003-04 2004-05

In-bound Transportation Costs as

percentage of Net Sales

1.5% 1.4% 1.3% 1.4%

Inventory-related Costs as

percentage of Net Sales

13.3% 13.9% 13.1% 13.1%

Distribution Expenses as

percentage of Net Sales

3.0% 2.8% 2.8% 2.7%

Total SCM Spend as percentage of

Net Sales

17.8% 18.1% 17.2% 17.2%

Source: CMIE

The focus on costs and ICT-enabled services is leading to electronic procurement that cuts time

and costs (including transaction costs) and brings in transparency and speed. The ERP industry

in India is worth US$ 300 million and is growing at over 15% a year. 52% of the respondents in

ETIG (Economic Times Intelligence Group) SCM 2004 survey (Available at:

http://www.etintelligence.com/) have implemented ERP and three-fourths of these find ERP to be

extremely effective in business. 44% of the companies surveyed had already implemented data

warehousing and mining applications, and another 26% had plans to do so. Almost every firm

found this practice to yield good results in revealing consumer trends, patterns and potential

segments.

For supply chain tracking, the most preferred method is the truck driver reporting his

location. Another method gaining popularity is the use of SMS (Short Messaging Service). Time

lags here can be pre-determined. Depending on the number of times the SMS signal is polled and

sent by to the base station, the location of the vehicle can be accurately determined. With Global

Positioning Systems (GPS), this is no longer the issue. However, the use of GPS for supply chain

management in India is relatively low. Service providers like Transport Corporation of India

(TCI) have poured in US$ 0.34 million for GPS in their trucks. Firms like Bajaj, Maruti Udyog

Limited, TVS Motors and Bharat Shell are already using TCI’s GPS systems.

Page | 54

LOGISTICS AND SCM PRACTICES OBSERVED ON-SITE IN 25 FIRMS

In our on-site observations, we find that the primary focus is on quality, cost and service.

Recently, responsiveness (delivery speed, volume flexibility and innovation) is also catching up

management attention. Correspondingly, the major concerns in all these firms and their supply

chains are related to costs, clarity of demand, reliability of partners, shortening delivery cycle,

production and logistics flexibility and innovation in supply chain practices. Sharing of benefits

within the supply chains has not yet gained much attention. Firms show relatively high

awareness of modern supply chain planning and control tools, including software and

mathematical models. However, the utilization of such tools is still at a relatively low level.

Relationships are messy and partnerships are short of true strategic alliances. Still, some

benefits are being derived. Firms, especially in the automotive, retail, manufacturing and FMCG

sectors, are increasingly opting to outsource their logistic requirements to specialized service

providers. The positive business atmosphere and a burgeoning consumer market are making the

shipper community push the logistic service providers hard for efficient supply chain value

propositions. Many firms in our study have gone for spend management outsourcing instead of

procurement management.

In firms with manufacturing as the core process, primary focus is still on in-house

manufacturing though trend towards contract manufacturing is on the upswing. Quality

assurance has become an order qualifier rather than being an order winner. The emergence of

Service Level Agreements (SLAs) with internal customers can be seen in most of the firms.

Presently, they are still informal in nature and not strictly binding. Firms have few

manufacturing facilities with 20-24 warehouses and many dealers. This number of warehouses is

a direct consequence of the tax-holidays and the erstwhile excise and custom duty structure in

India. High collaboration and partnerships with vendors is strongly evident in this sector.

There is big focus on vendor development. Firms focus on developing vendors in

geographical proximity. Another discernible trend is the gradual shifting of responsibilities and

risks to vendors. In automobiles sector, there is collaboration and partnerships downstream with

the dealers as well. Transportation and logistics being non-core activities are generally

outsourced. As regards implementation and utilization of ICT, 6 out of 8 firms use standard ERP

software, while one uses in-house developed legacy software. The firms appreciate the

importance of inventory and order tracking for which they use Wide Area Network (WAN),

Extranet and Internet. They seem to be catching up fast with their counterparts in the developed

world. However, forecasting is still based on targets from dealers/ sales force. This is an area

where they are much behind.

The focus of most of the service firms is on express deliveries and logistics solutions.

They focus on efficient and effective service and better customer reach. Most of the firms have

established highly responsive call centers with stringent performance metrics. High

collaboration and partnerships with partners can be seen. The firms are generally going for

global procurement and long-term strategic deals. They have multiple channels downstream so

as to achieve door-step reach to the ever-increasing customer base in India. Transportation and

logistics is generally through their own fleet. In some cases, it is outsourced. Routing and

Page | 55

scheduling software are increasingly being used for these activities. 5 out of 6 firms use standard

ERP software. There is high focus on tracking of customer orders and and technologies like bar

codes and GPS are being employed. Production process is mainly “pull” system.

In FMCG and perishables sector, the primary focus is on product availability (refilling

the shelves). The companies have few manufacturing facilities with complex distribution

channels. Packaging is generally outsourced. Mostly, the goods are packaged near the markets.

There is a very high collaboration with suppliers and firms are going for global procurement. E-

procurement is on the rise. At the same time, firms are negotiating long-term strategic deals.

There are multiple channels downstream so as to meet the objective of next-door reach.

Transportation and logistics services are generally outsourced to third parties. Transportation is

mainly by road and the lead-time of these supply chains is still as high as 9-12 weeks. This is

quite understandable, given the size of India and the state of its infra-structural facilities. Here

too, most of the firms use ERP and forecasting is based on data from dealers/ sales force.

In retail chains, primary focus is on expansion and reaching the consumer. The sector is

witnessing tremendous growth with increasing acceptability by the growing Indian middle class.

Two of the retail chains in our study are low cost mass market players, while the third one is

mainly into branded apparel. Their facilities are expanding to meet the increasing demands.

These firms have their own warehouses and retail outlets. The layouts of these facilities are still

evolving. Most of them are smaller replica of retail chains in the developed countries or famous

shopping cities like Singapore and Dubai. The firms have high collaboration and partnerships

with their suppliers who are generally located in close proximity. Transportation and Logistics is

outsourced. The implementation and utilization of ICT though limited, is growing rapidly. One

firm uses ERP and another uses in-house developed Resource Enterprise Management (REM).

These firms have not only gone for bar coding of items, but are pilot testing RFID and other

smart card technologies as well. Forecasting is based on historical data which is tinkered by

management intervention.

We find that most of the firms are not getting or using real-time demand data from

customers. Reasons cited for the same range from long, complex supply chains, lack of data and

ICT integration to lack of funds to go in for automation. However, they are making greater

investments in ICT, field force automation and cheaper software. A majority of the Indian

subsidiaries and joint venture firms use real-time data sharing and find it extremely effective. In

contrast, none of the family-owned firms uses it.

Based on our observations and secondary data, the major challenges to logistics and

SCM practices in India are related to integrating the supply chain, interfacing supply chain

department within a firm with other functions, evolution of logistics solution providers, sharing

real-time demand data across partners to ensure demand visibility in the supply chain,

resistance to change within and outside the firms, aligning supply chain partners to common

objectives, openness of partners to technology adoption and standardizing technology across

them.

Page | 56

REFERENCES

Basnet, C., Corner, J., Wisner, J. and Tan, K-C. (2003). Benchmarking supply chain

management practice in New Zealand. Supply Chain Management: An International Journal, 8,

57-64.

Chin, K-S, Rao Tumalla, V.M., Leung, J.P.F. and Tang, X. (2004). A study on supply chain

management practices: The Hong Kong manufacturing perspective. International Journal of

Physical Distribution & Logistics Management, 34, 505-524.

Deshmukh S.G. and Mohanty, R.P. (2004). Re-engineering of supply chain: Lessons from Select

Case Studies. In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd

Edition, Macmillan, New Delhi, 509-526.

Feldmann., M. and Muller, S. (2003). An incentive scheme for true information providing in

Supply Chains. Omega, 31, 63-73.

Fernie, J., (1995). International Comparisons of Supply Chain Management in Grocery

Retailing. Service Industries Journal, 15, 134-147.

Galt, J.D.A., and Dale, B G., (1991). Supplier Development: A British Case Study. International

Journal of Purchasing & Materials Management, 27, 16-22.

Quayle, M. (2003). A study of supply chain management practice in UK industrial SMEs. Supply

Chain Management: An International Journal, 8, 79-86.

Sahay, B.S. and Mohan, R. (2003). Supply chain management practices in Indian industry.

International Journal of Physical Distribution & Logistics Management, 33, 582-606.

Sahay, B.S., Gupta, J.N.D. and Mohan, R. (2006). Managing supply chains for competitiveness:

the Indian scenario. Supply Chain Management: An International Journal, 11, 15-24.

Saxena K.B.C. and Sahay, B.S. (2000). Managing IT for world-class manufacturing: the Indian

scenario. International Journal of Information Management, 20, 29-57.

Tan, K.C. (2002). Supply Chain Management: Practices, Concerns, and Performance Issues.

The Journal of Supply Chain Management, 35, 51-62.

Tan, K.C. and Wisner, J. (2000). Supply Chain Management Practices in the United States and

Europe. Research Paper Series of the APICS Educational and Research Foundation and The

Supply-Chain Council, Stock No. 07029, pp. 43.

Page | 57

DESIGN AND METHOD OF STUDY

Page | 58

Design:-

When deciding the research approach for a study, the researcher can choose between several

approaches, all characterized by specific strengthens and weaknesses. The most important

condition for choosing an appropriate approach is to identify the type of research questions that

should be answered. Yin (1994) presents five different types of questions; ―who‖, ―what‖,

―where‖, ―how‖, and ―why‖-questions.

With regard to the research questions of this thesis, the word ―what‖ dominates in all the

research questions? ―What‖-questions can be further divided into exploratory and descriptive

―what‖-questions. In this study the latter type is represented, and can be characterized as ―how

many‖ and ―how much‖-questions. Examples of such questions are how many of the respondents

have defined and documented their collaboration in terms of a process?; and how much joint

planning can be seen in the collaboration, i.e. to what extent does the actors jointly plan logistics

activities?

Other important groups of questions to be answered in this thesis can be labeled ―who‖ and

―where‖-questions. The ―who‖-questions are concerned with the characteristics of the

respondents. For example, are there any differences among industries considering how much

collaboration that can be seen? An example of a ―where‖-question is where in the supply chain is

collaboration performed?

To conclude, the research questions in this thesis can all be characterized as typical ―what‖,

―who‖ and ―where‖-questions. Common for these types of questions is that they are all suitable

for a survey study (Pinsonneault & Kraemer, 1993; Yin, 1994), and therefore this approach was

chosen for this study.

Researchers in the area point out that there is a difference between ―surveys‖ and ‖survey

research‖. While a survey can be made for many reasons not connected to research, such as

political opinion investigations and TV viewing polls, survey research aims to increase the

scientific knowledge in a research area.

Page | 59

Three main characteristics distinguish a survey approach from other approaches such as case

studies or experimental studies. First, the collection of information in done by asking people in a

structured manner. Collection methods in a survey approach could be mailed questionnaires,

interviews face to face, or telephone calls. Second, a survey approach is a quantitative method

that demands standardized information from and/or about the studied subject, e.g. individuals,

groups or organizations. Third, information is generally gathered from a sample, which is a

fraction of a specific population. The sample should be chosen in such a manner that the answers

from the sample can be generalized to the whole population. (Pinsonneault & Kraemer, 1993;

Malhotra & Grover, 1998)

In this thesis a suitable method to collect the empirical material was a questionnaire which was

mailed to logistics managers. Since the purpose of this thesis is to describe logistics

collaboration, i.e. to describe a situation, it is important that the chosen method can reach many

potential respondents. This is typical of a mailed questionnaire and is also a rather cheap way of

conducting a survey. The main reason for mailing the questionnaire instead of using email

(which would have been even cheaper and reached even more possible respondents) was the

belief that a mailed questionnaire would result in a better response rate.

Depending on its purpose, three different kinds of survey research are presented in research

literature; explorative, descriptive, and explanatory surveys. Again, in accordance with the

purpose and research questions in this study, the questionnaire in this thesis can in the first place

be characterized as a descriptive survey. Examples of a descriptive survey can be to investigate

the level of adoption of software for statistical process control (Forza, 2002), or documenting the

types of manufacturing processes being used by small and large manufacturing firms (Malhotra

& Grover, 1998).

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The different steps in the study:-

Quantitative analysis

In excel

Background and

Purpose

Theoretical

Framework

Research questions

Preparation of

Questionnaire

Data collection

Coding into Excel

Pilot study

Missing data

analysis

Further analysis and

conclusions

Page | 61

Preparation of a questionnaire:-

Constructing a questionnaire means a thorough break down procedure starting with the purpose

and ending with a number of questions that are possible for a respondent to answer in a

questionnaire (Forza, 2002). The breakdown procedure in this study should be regarded as a

translation of the theoretical concepts and ideas presented in the frame of reference into concrete

questions. As stated above all the questions in the questionnaire have their origin in the SCM

literature and can therefore be related back to existing literature about SCM and collaboration.

This means that the empirical material can be compared with existing literature in order to

investigate e.g. what parts that really are applied in existing collaborations.

The presentation of the purpose and the focus of this study should be seen as the first step in the

break down process. In connection to the research questions a short discussion followed each

research question where it was further defined and broken down. For example, the content aspect

information sharing was narrowed down to include four more concrete questions, namely what

type of information was shared, the frequency of sharing, the degree of processed data, and what

communication means that were used in the collaboration.

Layout of the questionnaire:-

The final version of the questionnaire consists of 20 questions on twenty pages and can be seen

in the questionnaire is divided into four main sections where the first deals with the inbound

supply chain questions about the respondent‘s company and their internal process approach.

In the next section questions were asked about the outbound supply chain of the company. It

included the sending of the parcel from the courier hub to its destination. All the factors involved

in the outbound logistics and the communications were included in the outbound questionnaire.

The next section included the questionnaire about the role of IT (Information Technology) in the

business process for the courier industries. All the factors which make the business for the

courier industry efficient were included.

Page | 62

Final section included questionnaire based on the various waste occurring in the courier industry.

The whole idea was to find out as to what type of waste are prevailing in the courier industry and

some remedies which could be found out to reduce the waste or to eliminate it.

The pilot:-

An obvious prerequisite for properly carried out survey research is that the respondents must

understand and interpret the questionnaire in the same way as the researcher. Even if the

researcher has a perfect understanding of the content and knows exactly how it should be

analyzed, the answers can be useless if the respondents interpret the questions in a different

manner. To avoid this, senior colleagues at the department were engaged as test persons. Above

all these colleagues looked for important questions that were not in the questionnaire and for

readability, i.e. how difficult/easy it was to understand the questions. Thereafter the

questionnaire was further developed using their opinions..

The sample:-

To fulfill the purpose of this thesis, suitable respondents had to be found. The population, which

in literature can be defined as ―the entire group of people, firms or plants or things that the

researcher wishes to investigate‖ .Therefore in the research several courier Hubs were selected in

various regions in Bangalore City. Furthermore, the population only covers companies which

reside in the main locations in Bangalore. The main reason for choosing this population is that

this type of Hubs is the one most considered in SCM literature. Much of the existing research on

SCM issues is performed on this group and it can therefore be considered as a target group for

SCM research. Furthermore, this population also represents different courier company‘s which

all have specific characteristics and constraints, but which have many similar logistics challenges

in common.

Analysis methods in Excel:-

Microsoft Excel is a commercial spreadsheet application written and distributed by Microsoft for

Microsoft Windows and Mac OS X. It features calculation, graphing tools, pivot tables and a

macro programming language called Visual Basic for Applications. It has been a very widely

applied spreadsheet for these platforms, especially since version 5 in 1993. Excel forms part of

Microsoft Office. The current versions are 2010 for Windows and 2011 for Mac.

For the research work the questionnaire were entered as an input in terms of the number of

respondents for each set of questions. The respondents response were taken as using the response

graph was plotted using pie chart, histogram etc.

Page | 63

Analysis

Page | 64

RESPONSE AND ANALYSIS

Inbound supply chain:-

1) How many parcels do your company receives every day?

200-400 400-600 600-800 more than 800

Analysis:-

From the respondents we can see the number of parcel handling lies around 400 to 600 parcels

per day. The ability to handle huge number of parcels could be attributed to better value chain

increase number of customer base and incorporation of information technology.

6 8 4 2

Page | 65

2) How many authorized dealers are available in the city for the company?

10-20 20-30 30-40 40-50

Analysis:-

The number of authorized dealer lies around 20 to 30 for 7 respondents, and 30 to 40 as well as

40 to 50 dealers for 5 respondents. This could be attributed to the fact that courier companies are

trying to increase their customer network throughout the city. More number of authorized dealers

means better service to the customer and addition of more number of customer.

7 3 5 5

Page | 66

3) How many numbers of area hubs are available in the Bangalore city?

Less than 5 5-7 8-11 more than 11

Analysis:-

Large number of courier company have around 8 to 11 area hubs. Area hubs can be defined as

a centralized location of a courier company in a loction from where it can collect/distribute

parcels in and around the location.More numbers of area hub could lead to better collection

and distribution network and better customer satisfaction.

14 0 3 3

Page | 67

4) How are the receipts generated at the authorized dealer while receiving the parcel?

Computerized receipts Manual Receipts

Analysis:-

Majority of the authorized dealers still use manual receipts to give to customers this could be

attributed to the fact that majority of the dealers are not willing to use computer as it need extra

skills and required investment.

2 18

Page | 68

5) Please tick Yes/No for the information which is printed on the receipts:-

Particulars Yes No

Customer Name 20

Receipts Name 20

Customer Address 20

Receipts Address 20

Customer Phone Number 20

Receipts Phone Number 20

Bar Code 20

Customer Care Number 20

Policies and Regulations 20

Analysis:-

A receipts can be defined as a formal document which is received by the customer who orders

for a service. In a courier industry all the company‘s provide a receipt to its customer during the

time when the customer places a order for sending a courier. The receipts consist of full details

of the customer and receipients, along with that all the courier company d mention bar code as

well as its customer care number. In order to avoid any legal issues during the transaction of

courier , companies do mention about the policies and regulations at the back of the receipts for

the customers to read.

Page | 69

6) How are the parcels brought from the authorized dealer to the area hub?

Motorbikes Small Truck

Analysis:-

More number of courier company‘s prefer to use motorbikes to bring the courier parcel from its

authorized dealer to its area hub, the main reason for the use of motorbikes is its cheap and easy

to maintain compared to a small truck. Also motorbikes gives a good mileage compared to a

small truck. Motorbikes can even go to locations where small trucks cant enter.

19 1

Page | 70

7) How many trips in a day are made for collecting parcels from the authorized dealers?

1 trip 2 trip 3 trip more than 4 trip

Analysis:-

Majority of the courier operators have two trips per days to bring the parcels from its various

authorized distributors, one trip in the morning and the other in the evening. The reason for

having 2 trips can be attributed to the fact that it gives sufficient time for the dealers to get more

parcels to deliver when the next vehicle comes for pick up. More of the courier company limit

there pick up upto 2 trips per day as it is more economical.

3 0 3 14

Page | 71

8) Total Numbers of vehicles which are available to collect the parcels from the dealers?

1-5 5-10 10-15 15-20

Analysis:-

More number of courier opeators posseses around 5 to 10 number of vehicles which included

both 2 wheelers as well as 4-wheelers. The totall number of vehicles are decided by the courier

company on the basis of the location of the area hub , numbers of the authorized distributors,

number of parcels received/dispatch in a day, number of employees etc. therfore on an average

we can see that for each of the area hub the number of vehicles ranges from 5 to 10.

5 2 12 1

Page | 72

9) What are the numbers of employees working in the area hub?

< 5 5-10 10-15 more than 15

Analysis:-

More number of courier operators have employee strength of more than 15 , it is due to the fact

that it is a people management industry where majority of the work is done by the human

resource. More number of employees refers to better management of the parcels, quicker

delivery of the parcels and other benefits.

0 4 7 9

Page | 73

10) On an average how long does it take to do the segregation of parcels from different location

prior to dispatch?

15-30 min 30-45 min 45-60 min more than 60 min

Analysis:-

The segregation of the parcels in a particular area hub is carried out in an average time of about

30 to 45 min. The segregation process includes the differentiation of various parcels on the basis

of the type, location, state, country etc. the segregation is made much easier with the use of bar

code machine which could read each of the parcel and segregate it.

8 4 2 6

Page | 74

OUTBOUND SUPPLY CHAIN:-

1) How many vehicles are available to dispatch the parcels to the destinations?

1-5 5-10 10-15 15-20

Analysis:-

More number of courier opeators posseses around 5 to 10 number of vehicles which included

both 2 wheelers as well as 4-wheelers. The totall number of vehicles are decided by the courier

company on the basis of the location of the area hub , numbers of the authorized distributors,

number of parcels received/dispatch in a day, number of employees etc. therfore on an average

we can see that for each of the area hub the number of vehicles ranges from 5 to 10.

5 2 1 12

Page | 75

2) Does your company outsource the logistics to a third party vendor?

Yes No

Analysis:-

Majority of the company do no outsource there logistics to a third party vendor, the main reason

being courier company have better control of the vehicles as the courier industry is fully

dependent upon the logistics part,therefore the company‘s do not want to comprimise on the

issues which could result with third party company if it outsource.

3 17

Page | 76

3) How many trips of vehicle are made for the dispatch of parcels to destination in a day?

1 trip 2 trip 3 trip more than 4 trip

Analysis:-

Majority of the courier operators have two trips per days to bring the parcels from its various

authorized distributors, one trip in the morning and the other in the evening. The reason for

having 2 trips can be attributed to the fact that it gives sufficient time for the dealers to get more

parcels to deliver when the next vehicle comes for pick up. More of the courier company limit

there pick up upto 2 trips per day as it is more economical.

14 3 0 3

Page | 77

4) Is the facility for tracking the package available online?

Yes No

Analysis:-

Almost all the courier company‘s have the facility to track the package anywhere in the world

with the help of internet. It is helpful for both company as well as the customer to know the

status of the parcel and also eliminate the chance of any parcel getting lost.

20 0

Page | 78

5) On an average how many days does it take to send a parcel anywhere in India?

1 day 2 days 3 days > 4 days

Analysis:-

On an average it roughly takes 2 days to send a courier to anywhere in India. The average

number of days usually depends upon the availability of the vehicle, delays of vehicle, delay in

processing the parcel delivery etc. The delivery of the parcel also depends upon the destination

distance from the source. Close destination could even be reached within 1 days.

3 14 2 1

Page | 79

6) On an average how many days does it take to send a parcel outside India?

Less than 3 days 3-5 days 5-7 days more than 7 days

Analysis:-

The average number of days for sending a parcel anywhere outside India takes more than 4 days

which again is a subject the location of the country and the resources available at the right time.

It also totally depends upon the use of information technology for the transport of the

parcels.Most of the delivery is carried with the help of airplane as it is fast and reliable.

0 1 4 15

Page | 80

7) What kinds of vehicles are used to dispatch the parcel destination area hub to the customer

address?

Motorbikes Small trucks

Analysis:-

More number of courier company‘s prefer to use motorbikes to bring the courier parcel from its

authorized dealer to its area hub, the main reason for the use of motorbikes is its cheap and easy

to maintain compared to a small truck. Also motorbikes gives a good mileage compared to a

small truck. Motorbikes can even go to locations where small trucks cant enter.

19 1

Page | 81

Role of Information Technology in Supply Chain Management:-

1) Does your courier company use computer application to process packages (if yes which one)?

No Yes

Analysis:-

The importance of computer application can be understood with the fact that all the courier

company‘s are using it to deal with the business. The computer applications has helped to better

manage the whole process. It has helped to reduce the overall cost to a greater extent and also

helped to automate few process.

20 0

Page | 82

2) Please rate your response on the scale of 5 (1-stongly disagree 5-strongly agree)

Has the computer application helped in?

1 2 3 4 5

Fulfilling the overall needs of the company

0 0 3 4 13

Reduce the package processing time

0 0 2 12 6

Improved the delivery speed 0 0 2 14 4

Improvised logistic management 0 0 3 14 3

Reduce the overall cost 0 4 11 3 2

Analysis:-

Analysing the above likert scale we see that majority of the company‘s do believe that

Information technology has helped to improvize the business of the company. It has not only

helped to understand the overall value chain but also helped to eliminate any non value activities.

It has also helped in package processing time by making the whole process automated with the

help of Bar code being printed on the parcel. This has therefore helped to reduce the overall time

which it took in a traditional manual work to a greater extent, and thus making the whole

process much effiecient. The courier industry also believe that the use of IT has helped to

improve the delivery speed as well as improvise the logistics. By properly routing the vehicle

with the use of technology of GPS courier company are able to reduce time cost and improvise

better customer satisfaction.

Page | 83

Usefullness of Computer Application:-

To study the usefullness of computer in managing supply chain in Courier Industry factors like

fulfilling the overall needs of the company, Reduce the package processing time, Improved

delivery speed, improved logistics management and reduced the overall cost were taken and

were rated on the scale of 1 to 5 (1 for least and 5 for maximum) by the respondents. 3 is taken as

neutral and the hypothesized value. The level of significance is a=0.05. Upper tail test is conducted.

Null hypothesis: mean rating <= 3

Alternate hypothesis: mean rating > 3

The results show that p-value is < a=0.05 for fulfilling the overall needs of the company, Reduce

the package processing time, Improved delivery speed, improved logistics management whereas

P value is > a=0.05 for reduce the overall cost which conveys that majority respondents have a

neutral feeling about the computer leading to the reduction to the overall cost.

Hypothesis test about a population mean with unknown Standard deviation

Fulfilling the overall

needs of the

company

Reduce the package

processing time

Improved the

delivery speed

Improvised logistic

management

Reduce the

overall cost

Sample Size 20 20 20 20 20

Sample mean 4.50 4.2 4.1 4 3.15

Std Deviation 0.76 0.62 0.55 0.56 0.88

Hypothesized value

3.00 3.00 3.00 3.00 3.00

Standard error 0.17 0.14 0.12 0.13 0.20

Test Statistic t 8.82 8.72 8.90 7.96 0.77

Degrees of freedom

19.00 19.00 19.00 19.00 19.00

p-value (lower tail)

1.00 1.00 1.00 1.00 0.77

p-value (upper tail)

0.00 0.00 0.00 0.00 0.23

p-value (two tail) 0.00 0.00 0.00 0.00 0.45

Page | 84

Occurrences of Waste:-

Strongly disagree

Disagree Neither agree or disagree

Agree Strongly agree

Are the vehicles well maintained?

0 0 2 9 9

Are Regular emission inspections are conducted?

0 8 7 3 2

Do paper and office waste occur?

0 0 2 10 8

Route planning for vehicle is done for shortest delivery time?

0 0 1 9 10

Analysis:-

Analyzing the above chart we see that most of the company spends a good deal of time in the

maintenance activity of the vehicle as its full operation is totally depended on the vehicles. The

maintenance activity is usually include regular checking for any issues with the vehicle, emission

test is generally carried out occasionally as the vehicles are busy for the logistics activities.

Occurrence of waste in terms of paper and office waste are very much prevailing in the courier

industry, the main reason being even though computer technology has been implemented its

scope are very limited and are used in few areas, whereas in other areas the job is done manually

which requires paper work to be done which leads to wastage of papers. The route planning is

also done in order to reduce time in delivering the package to the customer and to reduce the

overall cost associated.

Page | 85

Hypothesis on Occurrences of Waste:-

Hypothesis test about a population mean with unknown Standard deviation

Are the

vehicles well

maintained?

Are Regular

emission

inspections

are

conducted?

Do paper

and office

waste

occur?

Route planning

for vehicle is

done for

shortest

delivery time?

Sample Size 20 20 20 20

Sample mean 4.35 2.95 4.3 4.45

Std Deviation 0.67 1.00 0.66 0.60

Hypothesized value 3.00 3.00 3.00 3.00

Standard error 0.15 0.22 0.15 0.14

Test Statistic t 9.00 -0.22 8.85 10.72

Degrees of

freedom 19.00 19.00 19.00 19.00

p-value (lower tail) 1.00 0.41 1.00 1.00

p-value (upper tail) 0.00 0.59 0.00 0.00

p-value (two tail) 0.00 0.83 0.00 0.00

Page | 86

Analysis:-

To study the occurrence of waste in courier industry factors like maintenance of vehicles,

emission inspection, paper waste occurrence, routing planning done for shortest delivery

time were considered and were rated between 1 to 5(1 for least importance and 5 for high

importance).3 is taken as neutral and the hypothesized value. The level of significance is

a=0.05. Upper tail test is conducted.

Null hypothesis: mean rating <= 3

Alternate hypothesis: mean rating > 3

The results show that p-value is < a=0.05 for maintenance of vehicles, paper waste

occurrence, routing planning done for shortest delivery time, which means respondents

feels the above wastes are prevailing in the courier industry whereas p> 0.05 for emission

inspection which means that large number of respondents feels that the vehicles are not

inspected for the emission.

Page | 87

SUMMARY AND CONCLUSIONS

Page | 88

Major findings:-

Analysing the results obtained from the excel after given the data‘s as input from the

questionnaire we find that there are various parameters which need to be taken care of while

doing business in courier industry. Logistics are the backbone of any courier industry; therefore

in order to improve the service time as well as the customer satisfaction an efficient supply chain

management is required. The whole process of designing the inbound as well as the outbound

logistics can be formulated by understanding the value added process as well as non-value added

process.

In order to manage a large number of customers and to offer the best service almost all the

courier agency works on a large scale in terms of handling and delivering thousands of parcels

every day, From the respondents we can see the number of parcel handling lies around 400 to

600 parcels per day. The ability to handle huge number of parcels could be attributed to better

value chain increase number of customer base and incorporation of information technology.

Courier companies are trying to increase their customer network throughout the city. More

number of authorized dealers means better service to the customer and addition of more number

of customers. More numbers of area hub could lead to better collection and distribution

network and better customer satisfaction.

Majority of the authorized dealers still use manual receipts to give to customers this could be

attributed to the fact that majority of the dealers are not willing to use computer as it need extra

skills and required investment.

In a courier industry all the company‘s provide a receipt to its customer during the time when the

customer places a order for sending a courier. The receipts consist of full details of the customer

and receipients, along with that all the courier company d mention bar code as well as its

customer care number. In order to avoid any legal issues during the transaction of courier ,

companies do mention about the policies and regulations at the back of the receipts for the

customers to read.

More number of courier company‘s prefer to use motorbikes to bring the courier parcel from its

authorized dealer to its area hub, the main reason for the use of motorbikes is its cheap and easy

to maintain compared to a small truck. Also motorbikes gives a good mileage compared to a

small truck. Motorbikes can even go to locations where small trucks cant enter.

More number of courier operators have employee strength of more than 15 , it is due to the fact

that it is a people management industry where majority of the work is done by the human

resource. More number of employees refers to better management of the parcels, quicker

delivery of the parcels and other benefits.

Page | 89

More number of courier opeators posseses around 5 to 10 number of vehicles which included

both 2 wheelers as well as 4-wheelers. The totall number of vehicles are decided by the courier

company on the basis of the location of the area hub , numbers of the authorized distributors,

number of parcels received/dispatch in a day, number of employees etc. therfore on an average

we can see that for each of the area hub the number of vehicles ranges from 5 to 10.

The average number of days for sending a parcel anywhere outside India takes more than 4 days

which again is a subject the location of the country and the resources available at the right time.

It also totally depends upon the use of information technology for the transport of the

parcels.Most of the delivery is carried with the help of airplane as it is fast and reliable.

The importance of computer application can be understood with the fact that all the courier

company‘s are using it to deal with the business. The computer applications has helped to better

manage the whole process. It has helped to reduce the overall cost to a greater extent and also

helped to automate few process.

Information technology has helped to improvize the business of the company. It has not only

helped to understand the overall value chain but also helped to eliminate any non value activities.

It has also helped in package processing time by making the whole process automated with the

help of Bar code being printed on the parcel. This has therefore helped to reduce the overall time

which it took in a traditional manual work to a greater extent, and thus making the whole

process much effiecient. The courier industry also believe that the use of IT has helped to

improve the delivery speed as well as improvise the logistics. By properly routing the vehicle

with the use of technology of GPS courier company are able to reduce time cost and improvise

better customer satisfaction.

The maintenance activity is usually include regular checking for any issues with the vehicle,

emission test is generally carried out occasionally as the vehicles are busy for the logistics

activities. Occurrence of waste in terms of paper and office waste are very much prevailing in the

courier industry, the main reason being even though computer technology has been implemented

its scope are very limited and are used in few areas, whereas in other areas the job is done

manually which requires paper work to be done which leads to wastage of papers. The route

planning is also done in order to reduce time in delivering the package to the customer and to

reduce the overall cost associated.

Page | 90

Conclusion:-

As discussed in the background chapter of this thesis, SCM aims to improve the total supply

chain performance through collaboration among independent actors in the supply chain. The

supply chain should be managed as one single entity where end customer satisfaction is the

superior goal for all involved actors. This demands collaboration on a strategic level and that all

involved actors have a true supply chain orientation. This new way of thinking, which in turn

demands an extensive strategic change in the mindsets of the supply chain actors, should enable

them to work and act in one common direction towards common goals.

Such collaboration based on a supply chain orientation has however proved to be a rare

occurrence in real existing supply chains. Despite success stories where logistics collaboration

has contributed to extraordinarily positive benefits, most companies of today have not

understood the potential of SCM based collaboration. They are still occupied with internal

optimisations and have not adopted the SCM philosophy.

In addition to this, Speakman et al. (1998) identify some main differences in attitude and

behaviour depending on whether the collaboration is performed with a supplier or a customer.

These differences, which are in conflict with a true supply chain orientation, can have serious

consequences for the supply chain:

―In summary, we have implied that business has yet to crack the code; supply chain partners still

do not share a common vision or react to the same set of metrics. If this is true, opportunities

have been lost and many challenges remain. For a number of firms, talk is cheap and supply

chain management is still only part of today‘s jargon. Mattsson (2002) describes this

phenomenon as ―the traditional view‖ of supplier-customer relations where the customer

―demands what he wants‖ from the supplier. The reason for these differences is that the

customer in many cases has a stronger position for negotiation and that this position is used to

optimise the own company‘s business.

The results of this study confirm previous findings that the reality is far from that total SCM

environment described in many conceptual articles on the subject. In fact, the description of

logistics collaboration given in this thesis shows that companies involved in collaboration are

still concerned with operative issues and that their collaboration is seldom brought to a strategic

level. In addition to this, the results indicate that there are serious differences in attitude and

behaviour between supplier and customer collaborations. The study also shows that it is more

intensive collaboration on an operative level that contributes to the achievement of better results,

and that top management involvement has shown to be an important driver for such

collaboration.

Page | 91

Limitations of the study :-

The research work carried to understand the various aspects of supply chain management

in the courier industry gives us the snapshot of the activities carried out in the industry.

Therefore the courier locations sites selected for conducting the study may not be true

representation of the supply chain management carried out in various Courier compnay

worldwide. The data collected were from only from 20 courier agencies having hubs in different

parts of Bangalore city. . Further, as the concept of logistics and SCM is complex and involves a

network of companies in the effort of producing and delivering a final product, its entire domain

cannot be covered in just one study.

Future research:-

This study takes the perspective of a focal company on SCM and collaboration issues in a supply

chain. It is my belief that more studies on SCM issues with a company perspective should be

undertaken. This would make the research into SCM and its consequences progress. Three areas

of special interest for further research can be identified in this study.

One of the most interesting results from this study is the respondents‘ low degree of process

approach in their collaborations. Therefore this area has a great potential for improvement in the

collaboration. As a first step the reasons for the low figure must be investigated and analyzed

further. Here more in-depth studies have to be performed in order to increase the understanding

for the underlying reasons. One possible reason for the lack of process approach could be that in

reality most companies have to manage several relations that they consider to be collaborations.

Since a process approach encourages continuous improvements of the activities involved, the

focal company will have to constantly evaluate such a change for all relations they have. A

change could be difficult to realize due to interest conflict between different relations. On a basic

level this question is concerned with the classic conflict between a functional oriented

organization and the process approach advocated by SCM. More research is needed on the

subject of why functional interests still seem to override a process approach in the organization.

Page | 92

Bibliography:-

http://www.etintelligence.com/

http://www.indianrail.gov.in/

http://www.nhai.org/

http://www.weforum.org/

Joshi, V. and Chopra, S.K. (2004). Best Practices in Supply Chain Management at Modi Xerox.

In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd Edition,

Macmillan, New Delhi, 549-562.

Kankal, R.A. and Pund, B.S. (2004). Reengineering of supply chain: The case of Crompton

Greaves. In Sahay, B.S. (Ed.), Supply Chain Management for Global Competitiveness, 2nd

Edition, Macmillan, New Delhi, 527-537.

Kemppainen, K. and Vepsalainen, A.P.J. (2003). Trends in industrial supply chains and

networks. International Journal of Physical Distribution & Logistics Management, 33, 701-719.

Moberg, C.R., Cutler, B.D., Gross, A. and Speh, T.W. (2002). Identifying antecedents of

information exchange within supply chains. International Journal of Physical Distribution &

Logistics Management, 32, 755-770.

Quayle, M. (2003). A study of supply chain management practice in UK industrial SMEs. Supply

Chain Management: An International Journal, 8, 79-86.

Page | 93

Appendices:-

INBOUND SUPPLY CHAIN:-

1) How many parcels do your company receives every day?

200-400 400-600 600-800 more than 800

2) How many authorized dealers are available in the city for the company?

10-20 20-30 30-40 40-50

3) How many numbers of area hubs are available in the Bangalore city?

Less than 5 5-7 8-11 more than 11

4) How are the receipts generated at the authorized dealer while receiving the parcel?

Computerized receipts Manual Receipts

5) Please tick Yes/No for the information which is printed on the receipts:-

Particulars Yes No

Customer Name

Receipts Name

Customer Address

Receipts Address

Customer Phone Number

Receipts Phone Number

Bar Code

Customer Care Number

Policies and Regulations

6) How are the parcels brought from the authorized dealer to the area hub?

Motorbikes Small Truck

Page | 94

7) How many trips in a day are made for collecting parcels from the authorized dealers?

1 trip 2 trip 3 trip more than 4 trip

8) Total Numbers of vehicles which are available to collect the parcels from the dealers?

1-5 5-10 10-15 15-20

9) What are the numbers of employees working in the area hub?

< 5 5-10 10-15 more than 15

10) On an average how long does it take to do the segregation of parcels from different location prior

to dispatch?

15-30 min 30-45 min 45-60 min more than 60 min

OUTBOUND SUPPLY CHAIN:-

1) How many vehicles are available to dispatch the parcels to the destinations?

1-5 5-10 10-15 15-20

2) Does your company outsource the logistics to a third party vendor?

Yes No

3) How many trips of vehicle are made for the dispatch of parcels in a day?

1 trip 2 trip 3 trip more than 4 trip

4) Is the facility for tracking the package available online?

Yes No

5) On an average how many days does it take to send a parcel anywhere in India?

1 day 2 days 3 days more than 4 days

6) On an average how many days does it take to send a parcel outside India?

Page | 95

Less than 3 days 3-5 days 5-7 days more than 7 days

7) What kinds of vehicles are used to dispatch the parcel destination area hub to the customer

address?

Motorbikes Small trucks

Role of Information Technology:-

1) Does your courier company use computer application to process packages (if yes which one)?

No Yes

2) Please rate your response on the scale of 5 (1-stongly disagree 5-strongly agree)

Has the computer application helped in?

1 2 3 4 5

Fulfilling the overall needs of the company

Reduce the package processing time

Improved the delivery speed

Improvised logistic management

Reduce the overall cost

Occurrences of Waste:-

Strongly disagree

Disagree Neither agree or disagree

Agree Strongly agree

Are the vehicles well maintained?

Are Regular emission inspections are conducted?

Do paper and office waste occur?

Route planning for vehicle is done for shortest delivery time?