A PROJECT REPORT ON

WAREHOUSING & DISTRIBUTION IN SUPPY CHAIN MANAGEMENT

SUBMITTED TO:

UNIVERSITY OF PUNE

SUBMITTED BY:

RAKESH GAUR

PGDMLM(2008-2009)

SINHGAD INSTITUTE OF BUSINESS ADMINISTRAION AND COMPUTER APPLICATION

ACKNOWLEDGEMENT

Thanking is formality and sometimes a necessity, nevertheless an essential part of any project report. The list of expression of thanks no matter how extrusive is always incomplete and inadequate. This acknowledgement is no exception.

One of the best parts of writing a project report is the opportunity to thank those who have contributed to it. This project report has been made possible through direct and indirect Co-operation of various people. I specially with to acknowledge the following people who reviewed the project. Thank for the most perspective and helpful comments.

I sincerely thank to Prof. R.R.Jaware for his support and valuable guidance in reviewing the project form time. I also express my gratitude to Prof. H.D.Thorat for his precious help during the entire course.

RAKESH GAUR

2

PERFACE

Winter training is an integral part of our academic curriculum. During the training, a student gets an opportunity to understand the practical aspect of theory. Training makes the concept clearer. This project report is the outcome of the training that I have undergone at SAFXPRESS PVT. LTD. for the partial fulfillment of Post graduate Diploma in Foreign Trade.

The topic allotted to me by the company WAREHOUSING & DISTRIBUTION IN SPPLY CHAIN MANAGEMENT.

The project emphasizes on the warehousing and distribution in supply chain management done by the company. I have tried to my best to make a good report.However; no one can claim perfection in its entiretity.So I apologize for the discrepancy, if any, crept in.

Preparation of project requires perseverance, initiatives, proper guidance and direction. So it is mandatory to take the aid of various departments.

3

TABELS OF CONTENTS:-

S.NO. CONTENTS Pg.no.

1. Introduction 05

1.1 Company Profile 06

1.2 Type of Business 14

1.3 Safexpress Services 15

1.4 Future Expansion 18

1.5 Company’s Turnover & Achievements 20

2. Supply Chain Management 23

2.1 Meaning 24

2.2 Supply Chain Management by Robert B. Handfield 26

2.3 Components of Supply Chain Management 28

2.4 System of Supply Chain Management 29

3 Case Study: Dabbawalas of Mumbai 32

4 Warehousing 38

5 FQAs 45

6 Conclusion 52

7 Bibliography 54

4

CHAPTER-1

INTRODUCTION

Company ProfileTypes of BusinessSafexpress ServicesFuture ExpansionCompany’s Turnover & Achievements

5

Company Profile

Safexpress –India’s Leading Logistics Company is renowned for its domain expertise and experienced manpower in the LSCM sector. Safexpress can best understand your Logistics and distribution requirements and can offer the most suitable Logistics model and solution to you. Safexpress has the largest network coverage across India traversing over 3,50,000 km. every day covering over 550 locations through more than 750 routes operating 24 hours a day 365 days a year reaching these locations through it’s fleet of 3000 vehicles operating on. All Safexpress vehicles have all-weather proof containers for safe transit. Safexpress also operates through Air to locations directly covered by flights and to all other locations on a multi modal basis.

Safexpress have a Integrated Logistics Management. It is our 3PL Product that optimises your company’s supply chain. First, we examine the linkages between your suppliers, producers, buyers, intermediaries and end users in order to identify time and cost inefficiencies. Next, we deploy our unique mix of local know-how, global practices and cutting-edge technology to provide integrated supply chain solutions. These range from specific services such as warehouse management, statutory compliance and invoicing -  to an entire gamut of third party logistics services.

6

Safexpress works and carries on the philosophy of 'Custodians First Carriers Later’. We sincerely abide by our corporate philosophy on the subject. Safexpress has an all risks cover - Carrier’s Risk offer, which unburdens the customer of his worries of losses in transit. On minimal extra charge of Risk Charges, we cover your valuable shipment against all sorts of transit losses including fire, flood, damage, accident, shortage, etc.

The Latest of the material handling equipment are used at Safexpress' hubs to ensure safety and remove Laxity from material handling. Equipment including hydraulic hand pallet trucks, dock levelers, trolleys, fork lifts’ multilevel pallet stackers are used by Safexpress. Chain Pulleys and Cranes handle consignments which are not possible by smaller equipments to manoeuvre. It might not be out of place to mention here all the hubs of Safexpress are on platform level height. Any Logistician will understand and appreciate the essentiality and importance platform level warehouses have for material handling.

7

Pawan JainChairman and Managing DirectorSafexpress

Anil SayalGeneral ManagerSafexpress

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

8

After one year i.e in 1996 Safexpress opens super hubs at Delhi, Mumbai and Bangalore. Next year Safexpress launches Integrated Logistics Services. Our first ILS client is NIIT, the first international ILS account is signed with Hilti from Europe. Spurred on by a surging domestic economy, Safexpress extends its fleet to 250 and number of stations to 290. Safexpress Private Limited emerges as an independent entity Then in 1998 Safeair and Safebox are launched, setting a new standard in value added cargo services.All hubs are connected through web-based software. In 1999 Having grown by over 300%in 4 years without compromising quality, Safexpress is awarded the Golden Peacock Award for quality and innovation in Logistics Management. In 2000 Pilot run for GPS starts on 28 routes. Also Safexpress reaches the 350-destinations mark and the fleet crosses 1400. Again 2001 Safexpress upgrades and launches a whole lot of features on www.safexpress.com including ePod, Virtual Cargo and Privileged Member. In the year 2002,2003 Safexpress was declared India's "Largest Logistics Service Provider" by Limca Book of Records. In 2005 Safexpress bags the MICO:Power of We Award for excellent service in logistics. In the same year Safexpress fleet crosses 3000 mark. Next year in 2006 Safexpress was awarded by ADC Krone for providing best logistics services and in same year Safexpress bags prestigious RAI's (Retailers Association of India) Award for Best Logistics Service Provider.

9

HISTORY

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

To-Pay freight.

1996 Safexpress opens super hubs at Delhi, Mumbai and Bangalore.

1997 Safexpress launches Integrated Logistics Services. Our first ILS client is NIIT, the first international ILS account is signed with Hilti from

Europe.Spurred on by a surging domestic economy, Safexpress extends its Fleet to 250 and number of stations to 290.

Safexpress Private Limited emerges as an independent entity.

1998 Safeair and Safebox are launched, setting a new standard in value added cargo services.All hubs are connected through web-based software.

1999 Having grown by over 300% in 4 years without compromising quality, Safexpress is awarded the Golden Peacock Award for quality and innovation in Logistics Management.

2000 Pilot run for GPS starts on 28 routes.

Safexpress reaches the 350-destinations mark and the fleet crosses 1400.

10

2001 Safexpress upgrades and launches a whole lot of features on www.safexpress.com including ePod, Virtual Cargo and Privileged Member.

2002 Safexpress declared India’s “Largest Logistics Service Provider”By Limca Book of Records 2002.

2003 Safexpress declared India’s “Larges Logistics Service Provider” by Limca Book of Records 2003.Mr. Pawan Jain , CMD , Safexpress , becomes one of the finalistsin the prestigious EnY’s Entrepreneur of the year Award.

2004 Safexpress inaugurated its 500th scheduled delivery location Safexpress bags the Franchise Awards04 for excellence in Team Work.

2005 Safexpress bags the MICO:Power of We Award for excellent service in logistics Safexpress fleet crosses 3000 mark.

2006 Safexpress awarded by ADC Krone for providing best logistics Services.Safexpress bags prestigious RAI’s ( Retailers Association of India ) Award for Best Logistics Service Provider.

11

MISSION

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

VISION

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

QUALITY

“A quality service relies upon constant customer interaction and feedback. An immediate response to the changing environment with pre-defined business processes managed effectively and efficientlylead to the highest output from the lowest input and this is the strongest measure of quality. The best certification of a quality organisation is the measurement of the scale of the smile on the customers face”

12

STRENGTHS

Over 550 destinations, spread across 28 states & 7 union territories.

Warehousing space exceeding 3 million square feet.

Over 3,000 all weather-proof ISO 9002 vehicles.

More than 1000 routes, linked through 41 super hubs & hubs.

Delivering more than 3 million packages a month.

Traversing more than 5,00,000 kms a day.

Operating 24 hours a day, 365 days a year.

13

TYPE OF BUSINESS

Indian Economic Scenario today marks the emergence of total chaotic market with lot of competitors, piling stock of products, lowering margins, taxation changes and more. In the present situation what is needed to see the blue?The ‘way to higher profits’ comes from streamlining the channels and outsourcing the segment of business which is not the core focus or expertise of the company.

One such fragment of business model is Supply Chain. Being a medium of linking product to market, a robust model of supply chain management ensures a better ‘TAT’ (turn around time), low inventory holding cost and less of damages.Over the time discipline of business logistics has advanced from the warehouse and transportation dock to the boardroom of leading Global Enterprises.Supply Chain has to be viewed not only as material and information pipeline but as integration of logistics with the human factors that need more attention to be paid to understanding, creating and managing demand more effectively.

Safexpress works on the Value Chain concept using a framework for examining linkages between suppliers, producers, buyers, intermediaries and end users. Safexpress, India’s leading logistics company offers Integrated Logistics Management, Express, Air, Multi-modal, Door-to-Door, time definite delivery and consultancy services. The company also offers e-logistics and customized solutions for e-business.

14

SAFEXPRESS SERVICES

EXPRESS Safexpress service is an express service which involves movement of cargo in all weather proof sealed containers on feeder and express routes. The service is time definite with a published transit schedule covering more than 550 destinations nation wide and provides the flexibility for surface, air and multi-modal connectivity with a wide reach associated with Indian airlines and air taxi operators such as jet airways, Sahara etc.

DRAFT-ON-DELIVERY

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

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

ALL RISK COVER

The management of Safexpress hereby undertakes and declares that:

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

15

SAFEBOX The safebox comes in two convenient sizes of 17” x 17” x 12” and 16” x 12” x 9” easily accomodating upto 20 & 10 kgs respectively of your cargo. The robust design is further reinforced with internal insulation for safety of your cargo. So you save on packaging cost and for a nominal amount it is ready for delivery with an auto insurance upto rs. 5000 absolutely free of cost.

SAFEAIR

To ensure that time sensitive cargo reaches the destination through a faster mode meeting all your requirements for the time definite deliveries. Safeair connects your cargo through airlines, atos and uses the services for morning and evening flights to provide a wide variety of connectivety to suit different market cutoffs.

ILM

Safexpress works on the value chain concept using a framework for examining linkages between suppliers, producers, buyers, intermediaries & end users.

Safexpress ensures the success of the entire chain, marrying local knowhow with the best global practices, technology & perspective

CONSULTING

Safexpress offers value added services beyond physical operations in the form of logistics consultancy covering a wide spectrum of the Indian economy.

The company plays a pivotal role in guiding diverse market segments on existing and recommended logistics models with various simulation modules to map transactions using historical data and providing befitting supply chain solutions.

16

HOW FAST IT WORKS

Cargo from PATNA to BANGALORE booked on Saturday, September 06, 2008

will travel a distance of 2280 kms./ 1425 miles check posts through which your cargo will pass documents required 2 Copies of Consignor's Invoice with ST & CST No. Printed permits / forms required VAT FORM-505/VAT FORM-515 octroi applicability NO entry tax applicability YES subject to nature of transaction your virtual cargo would be delivered on by Express mode Thursday, September 11, 2008 by Safeair mode Monday, September 08, 2008

17

FUTURE EXPANSION

Logistics services provider Safexpress plans to invest Rs 800-1,000 crore (Rs 8-10 billion) in five years to expand its operations on the back of the boom in manufacturing and retail activities in the country.

As a result of the expansion, the company's turnover is likely to touch Rs 1,000 crore (Rs 10 billion) by 2010.

The company expects to fund its expansion through internal accruals and debt as it claims to have strong bottomline and cash reserves. The privately-held Safexpress has been growing at 35 per cent and posted a turnover of Rs 450 crore (Rs 4.5 billion) in 2006-07.

The company expects similar growth this year as well, Pawan Jain, chairman and managing director, told reporters at the CII Logistics 2007 summit in Chennai.

Safexpress intends to set up logistics parks comprising warehouses, vendor management services, raw material management and finished products storages at 32 locations across the country.

Each park will come up on an area of 25-30 acres. A group company, which is into the realty business, has already completed around 70 per cent of the land acquisition.

The company is also establishing a 3 lakh sq ft logistics park near Chennai at an investment of Rs 35 crore (Rs 350 million). It already operates a 80,000 sq ft warehouse in Chennai. 

Through the expansion programme, the warehousing capacity of the company will grow to 10 million sq ft in the next three years from the current 3 million sq ft.

The company was planning to strengthen its presence in the air cargo segment by taking three Boeing-737 cargo aircraft on lease. These would cover five cities in the country by the next financial year, according to Jain. Safexpress has also placed an order for 380 trucks to add to its current fleet of 3,000 vehicles.

The company doesn't own the vehicles, but hires them through its network of 59 vendors.

18

HEALTHCARE SEGMENT is one of Safexpress's special focus area which contributes 16 percent of the revenue. With more than than 100 percent customer retention rate Safexpress has always given due importance to the demands of their customers. Aiming at expansion, they are investing heavily in infrastructure development and will soon be coming up with 32 logistics parks and will be adding seven million square feet of warehousing capacity. The investment is planned for a total of Rs 1000 crore in infrastructural development in the next three years. Pawan Jain, Chairman and Managing Director, Safexpress, says, "We have plans for expanding our specialised logistics product range. This range would be specifically designed for the healthcare industry after thoroughly analysing its needs. Apart from offering our multi-modal services, we will be providing single window solutions and, along with managing the logistics channel end-to-end from distribution channels to pharmacy or patient level. We would be offering specialised logistics solutions to the rural healthcare, customised pharma and cold warehouses pan-India, packaging solutions, implementing bar-coding to prevent spurious drugs and offering solutions as per regulatory norms like GDP, US FDA, MHRA and GCCDP."

With a view to provide customised logistics services for booming retail industry Safexpress also sponsored the ninth Marketing and Retail Conclave. The conference saw the presence of leading retail players from all across the world. Vineet Kanujia, General Manager Marketing, Safexpress said, "The idea behind sponsoring this conclave was to bring the retail and logistics industries closer. Safexpress has been at the helm in harnessing and synergising the needs of the retail industry for the growth of the economy. We have successfully managed to gather the required inputs and the coming period will see us roll out these plans."

19

TURNOVER

The company hopes to double its turnover to Rs 1,000 crore by 2010, he told reporters on the sidelines of CII Logistics 2007. The privately-held company has been growing at 35 per cent and posted a turnover of Rs 600 crore in 2007-08. It expects a similar growth this year, Mr Jain said.

In three years, Safexpress will add 7 million sq ft of space to its existing 3 million sq ft. It will set up logistics parks comprising warehouses, vendor management, raw material management, finished products storages, and also distribute consignments. These parks will come up in 32 locations across the country, he said.

EMPLOYEES TURNOVER

At present there are 2500 employees in safexpress but they are planning to expand there number of employees in future.

20

ACHIVEMENTS

Safexpress wins ‘International Business Excellence Award 2008Safexpress CMD, Mr. Pawan Jain conferred with the ‘Bharat Gaurav Puraskar’by the Institute of Economic Studies

Mumbai, September 4, 2008: ‘Logistics Guru’ and CMD, Safexpress, Mr. Pawan Jain was conferred with the ‘Bharat Gaurav Puraskar’ for the ‘Best Business Leader’ by the Institute of Economic Studies (IES) this week. His entrepreneurship venture, Safexpress Pvt. Ltd. which has grown into one of the leading logistics and supply chain management companies in India was also awarded the ‘International Business Excellence Award’ for the ‘Best Business Enterprise’ at the same platform organised at Hotel Grand Sukhumvit By Sofitel at Bangkok, Thailand.

The prestigious award was presented in a ceremony proceeded by a seminar on ‘The Global Indians’. The award was given in recognition of the achievements of Mr. Pawan Jain with respect to bringing innovation, excellence and quality in the field of Logistics. The award was presented to Mr. Jain by the former Deputy Prime Minister of Thailand, Dr. Korn Dabbaransi.

On this grand occasion, ‘Logistics Guru’, Mr. Pawan Jain, CMD, Safexpress said “Both these prestigious awards mean a lot to us. It is indeed a proud moment for everyone associated with Brand Safexpress. We are happy that our relentless efforts have been recognized in the industry. We have always ensured quality, security and timely services and promise to continue in delivering the best. We are humbled by this adulation.”

21

This award ceremony was a platform for honoring Indian entrepreneurs and enterprises, who have been consistently demonstrating Business Excellence as per International standards.

IES is the most esteemed economic institution of the country. It seeks to provide expert advice on the various facets of Indian economy by way of in-depth study and research. IES has been actively involved in providing information to its members on the critical developments taking place on the various economic fronts. In present day, it has come to epitomize excellence in economic sphere.

About Safexpress- Safexpress is India’s No. 1 Supply Chain and Logistics Company. The company offers the best and the most innovative solutions for all SCM and Logistics requirements. Their services are totally customized as per the demand of different segments of the business industry. Courtesy their wide range of quality services, Safexpress has set a benchmark in SCM standards and redefined the functioning of Indian Logistics Industry. Growing at a phenomenal rate of over 30 % in the last couple of years, Safexpress achieved an annual turnover of Rs. 500 crores in the FY 2006-07. The company is targeting a turnover of Rs. 1000 crores by the year 2010.

22

CHAPTER-2

SUPPLY CHAIN MANAGEMENT

Meaning Components of Supply Chain Management Supply Chain Management: Robert B. Handfield System of Supply Chain Management Processes of Supply Chain management

23

SUPPLY CHAIN MANAGEMENT

Since, the beginning of the 1990s, there has been a paradigm change in the business scenario, mainly due to the liberalization policy of various economies all over the world, and revolutionary innovation in the field of science and technology.Particularly, information technology and communication infrastructure has resulted into a continuous acceleration in the magnitude competition. To sustain themselves in such an erratic environment, firms need to have door competency and productivity. That is why firms are perceived to have more systemized activities related to movement and storage of goods so as to make them available at a short noticed with the lower inventory level. For instance, Godrej locks – a division of Godrej & Boyce Company – has to reduce its order to delivery cycle from there weeks to only three days. Computers giant Hewett Packard has cut the duration of its cycle to deliver to customers in India from the us by one third, from 37 days, to 10 days. All this happened because of higher and systematic. Supply Chain Management the new and more Indian companies are jumping onto supply chain management bandwagons for the completive edge.

Supply Chain Management is business system of enterprise strategies, business processes and information technologies for improving the planning, execution and collaboration of material flows, information flows, financial flows and workforce flows in the supply chain. SCM is supported by modular software applications that integrate.

Activities across organizations, from demand forecasting, product planning, parts purchasing, inventory control, manufacturing, product assembly to product distribution.

24

DEFINITION

Supply Chain Management is the process of planning implementing, and controlling the operations of the supply chain as efficiently as possible. 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.

The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes co-ordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers.

In essence, Supply Chain Management integrates supply and demand management within and across companies.

25

Source: Introduction to Supply Chain Management by Robert B. Handfield, Ernest.

Customers: Customers are the sole purpose of existence of any business. customers interact with retailers or supermarket. Website or telemarketing firm can also act as an interface for the customer. Retailer works towards fulfilling the demand, either through inventory or through placing fresh orders with preceding link in the supply chain. In some case the customers bypass the traditional supply chain and interact directly with the manufacturers for example in case of online purchase of computer from Dell Computers, customers directly place an order with a manufacturer i.e. Dell.

Retailers/Distributors: Retailers interact with distributors or manufacturers directly to fulfill the demand created by their respective customers. Retailer places an order with preceding link in the supply chain to replenish its depleting inventories. Typically the orders are initiated by the retailers but, in some case the manufacturers monitors supermarket’ stocks and automatically initiates reorders, Wal-Mart and P&G using continuous replenishment program is one example.

Manufacturers: Retailers or distributors often place their orders with manufactures after gauging the demand. Based on the demand from retailers/distributors manufactures decide their production targets and schedules. Manufacturers usually follow either push based strategy or pull based strategy. In push based strategy production decisions are based on long-term forecasts thus making it more difficult for the manufacturers to adjust their production schedules.

In a pull-based strategy production is driven by customer demand rather than forecast thus allowing for greater flexibility in the production. Information flow and technologies like Point-of-Sales ( POS ) data play a significant role in this strategy.

26

Suppliers: Manufactures interact with suppliers to make sure that they have all the available materials for manufacturing. Raw material orders placed with suppliers are more precisely determined as they are based on production schedule. But the question arises is the production schedule reflective of the correct demand? Manufacturers works in close coordination with suppliers in order to reduce high inventories. Just in time is one such technique, which manufacturers use to achieve this objective.

REVERSE SUPPLY CHAIN

Reverse Logistics is the process of planning, implementing and controlling the efficient, effective inbound flow and storage of secondary goods and related information opposite to the traditional supply chain direction for the purpose of recovering value or proper disposal. Reverse Logistics is also referred to as “Aftermarket Customer Services”. In other words, anytime money is taken from a company’s Warranty Reserve or Service Logistics budget, that is a Reverse Logistics Operation.

27

COMPONENTS OF SUPPLY CHAIN MANAGEMENT

Our Global Supply Chain Management practice focuses on four key solution areas:-

Adaptive Execution. We transition your supply chain into a high-speed, low-cost, rapid-response engine to increase visibility and response from procurement to fulfillment and replenishment.

Supply Management. Our technologies and collaborative business processes improve sourcing, procurement, contracting, purchasing, invoicing and analysis.

Customer-Supply Synchronization. Integrate SCM with marketing, sales and customer management and you’ll see high availability and low costs that can increase sales and eliminate rush shipments and back-orders.

Securing Supply Chains. Comply with security requirements and speed container inspections with solutions that offer tracking, analysis,

alert capabilities, and process and policy documentation.

28

A SYSTEM OF SUPPLY CHAIN MANAGEMENT

Supply Chain Management is a social or soft system which has goals, components, processes and boundary. Goals of SCM.

To reduce inventory cost.

To increase sales

To improve the coordination and the collaboration with suppliers, manufactures and distributor.

Components of SCM System - The components of a supply Chain System consist of

1. Supply Chain Software and Hardware,

2. Supply Chain Business processes andUsers of SCM System.

SCM Software and Hardware – The core of an SCM System is SCM software. Supply Chain Software is module based application. Each software module automates business activities of a functional area in the Supply Chain.

29

UNIX is the most common operating system for running SCM software.

Business Processes – Business processes of supply chain includes supply chain planning, execution and collaboration and operational control.

Users – The users of SCM systems are workers of supply chain participants at all levels.

30

PROCESSES OF SUPPLY CHAIN MANAGEMENT

Demand Planning and Forecasting - A critical success factor to supply chain management is accurate demand forecasting. Supply chain software systems utilize sophisticated mathematical models for predicating future demand from historical data.

Procurement - This is the process of choosing the suppliers that will deliver the goods and services you need to manufacture or assembly your products or create your services. It involves price negotiation, receiving, and verifying the shipments.

Manufacturing and Assembly - Raw components are assembled into final products or raw materials are manufactured into finished goods.

Distribution - This is the process of delivering your products or services consumers. Distribution involves warehousing, delivering, invoicing and payment collection.

Return - Return and refund are important parts and also the problem pats of supply chain management.

Boundary of the SCM systems - The boundary of a SCM system is he boundary of extended enterprise which includes the company, suppliers, partner, distributors and customers.

31

CHAPTER-3

CASE STUDY

DABBAWALAS OF MUMBAI

32

CASE STUDY

6 Sigma Dabbawalas of Mumbai,And their Operations Management-An Analysis.

The ubiquitous Dabbawalas also known as tiffinwalas who provide a lunch delivery service in Mumbai have been in the business over 115 years. Their mode of operations have been studied by global management gurus and business schools. In 1988, Forbes magazine conducted a study and rated them a Sigma 6 organization i.e. a 99,9999 per cent correctness – which means if the organization delivers six million tiffins, it will not misplace more than one or just one tiffin in six million transactions.Considering the unique achievement of Dabbawalas in the field their operations, this study has been undertaken to access their group efforts and managerial efficiency. The main objectives of this subject are :

1) To examine how the Dabbawalas operate;2) To study howDabbawalas of Mumbai perform an amazing role in procurement

and distribution of tiffins to their clients from which one can learn many critical issues of supply chain, distribution and logistics management. This subject mainly dwells on the examination of their operations and achievement of almost zero-fault performance including their problems and prospects in this changing environment of their business, they work as a team to achieve a common goal with a cent percent accuracy, and

3) To explore the problems and prospects of the Dabbawalas’s services in the light of changing environment.

Their Glorious Past Performances:

The origin of the Dabbawala’s lunch delivery services dates back to the year 1890. Mahadeo Havaji Bacche, a migrant from Pune district ( North Maharastra ) started this lunch delivery service. At that time, eople came from different states and form different communities migrated to Mumbai for work. At working place there were no canteens or fast food centres and they did not bring their lunch from home. Besides, different communities had different food habits, tastes and preferences which could only be satisfied by a home made meal. Recognizing the need, Mahadeo started this lunch delivery service.

33

In this business, Mahadeo recruited young men from the villages neighbouring Mumbai (generally Pune district and adjoining areas ), who had no formal education or technical efficiency to get work in the city. There were 100 Dabbawalas increased. In 1950, Dabbawalas were delivering 1,00,000 lunches per day. After the death of Mahadeo they became organized in 1954 and formed Nutan Mumbai Tiffin Box Suppliers Charity Trust.The trust had branch offices in different parts of the Mumbai sucha s Chembur, Dadar, Ghatkopar etc. In 2005, 5000 Dabbawalas are delivering around 2,00,000 lunches per day.

Levels of Management:

The trust is a co-operative body having three levels of management, viz.1) The Governing Council, its President, Secretary – Top level,2) Mukabams ( Team leaders or supervision ) – Middle level,3) Dubbawalas – Lower level.

The Governing Council ( also called as Panch Committee ) holds meetings on the 15th day of every month. Mukadams and Dabbawalas are entitled to attend the meetings. At these meetings, Dabbawalas discussed their problems and business policies. The trust collected Rs. 15 p.m. for each member to maintain a welfare fund. The trust provides various services to its members, including loan facilities for emergencies, educations expenses for children, health care etc. from this welfare fund. The Dabbawalas are organized in supervise to sorting Dabbas ( tiffin box ), to keep records of payment, to settle disputes, to seach new customers and train new Daddawalas. Each goup is financially independent but work together in the delivery process. Each gouup serves its own customers without hampering the interests of other. Now the Dabbawalas are charging cutomers Rs. 250 to Rs. 300 p.m. for their services. Total monthly collection is shared equally among the members of the goup. Each Dabbawala receives Rs. 5,000 to Rs. 6,000 after meeting all expenses like railway monthly ticket, rent for handcarts, crates etc. Newcomers who want to become Dabbawala are initially hired on a salary, after evaluating their performance they are offered membership (shareholders) of the trust and assigned to one of the groups. Each Dabbawala is guaranteed to receive a monthly income and employment for life. As there is no retirement age, he may work as long as he is physically fit. To become profit sharing member of the trust, new Dabbawalas needs to pay a certain amount to the trust. This was Rs. 30,000 in 2003.

34

How they operate and work as team :

This service is available in every working day and whenever the local trains run in Mumbai & Suburban because it is their primary mode of transportation. The Dabbawalas deliver home-cooked meals to individuals (irrespective of their caste, creed or religion) at their working places (offices/factories) and return empty boxes to customer’s houses or caterers. Every customer who avails himself the service is given a aluminum container (called Dabba-contains 2 or 3 containers, often carrying rice, chapattis, curry and salad) with appropriate code painted on the lid. The Dabbas are changed hands at least four or five timers before they reach their destinations during the delivery process. The process runs as follows:

A Dabbawala picks up the tiffin box with cooked food from a house or caterer early morning (generally between 8:30 a.m. and 10:30 a.m.), then transports it by cycle or handcart to the nearest railway station. Then he hands it over to a Mukadam who sorts it and arranges them in crates or trays, according to the destination. Another Dabbawala then transports it in the suburban train vendor compartment to the railway station nearest to its destination where another picks it up and delivers it to the ultimate recipient by 12:30 p.m. After lunch, the Dabbas are picked up and return to the customer’s house or caterer in a reverse operation.

The food and the Dabba both belong to the customer. Even housewives occasionally send messages to their husbands in these Dabbas. This delivery system has been compared to a relay race.

The Dabbawalas have developed their unique coding system. The codes help each Dabbawala to identify and fulfill his responsibility. These codes are understood by the Dabbawalas and no one else. The code is painted on the lid of the Dabba, which indicates the originating address & station and the destination station & address. Their coding system is very interesting. They use colours and code markings to ensure faultless delivery. They use both alphabets and numbers to identify Dabbawala, station, building and floor. For example, if the code on a Dabba is “P-BO-10 15/A/11”, then P identifies the name of the Dabbawala, BO indicates Borivili (area) where the Dabba has to be collected from, 10 represents the area, Nariman point, where the Dabba has to be delivered and 15/A/11 stands for 15th building, 11th floor.

35

Dabbawala’s ability to successfully run the service in a crowded city like Mumbai could be attributed to its geography and local train service. The trains run every day in a year and there is very rarely any interruption in the service. At monsoon, due to heavy rain, when the rail tracks would get flooded then the service is disturbed. Raghunath Medge, President of the trust said, “Mumbai’s geography makes it unique, it is a longish city where residences are in the north and offices in the south, so it makes our work simple.

According to their version, they use the cheap public transport system which is advantageous to them. Several groups are involved in this service, but their team work is unique and delivery almost flawless due to their effective co-ordination. Even there is no mixing of vegetarian and non vegetarian Baddas on the same bicycle. Raghunath Medge claimed “ We generally make one mistake in two months. We can’t afford to make mistakes to often or else we will be out of business. And our employees understand this reality very well so they are always very caution.”

Problems & Prospects :

The trust faces the cut-throat competition from the growth of fast food centers like Pizza Hut, Mac Donald’s etc. while there are thousands of die-hard customers, rapid urbanization, increasing personal transportation and availability of different kinds of fast food have drawn a good chunk of the younger generation away from the home made food. But there is an increasing number of people who are health conscious and feel that home cooked food suits their stomach and health. Even some customers now send water along with their tiffins. Knowing this very issue the trust do not bother about the competition. Today, the Dabbawala delivers them to offices. But Medge said that food from caterers is still a small segment of the total operation. Most people want to eat homemade food in the offices without the bother of having to carry a cumbersome tiffin box. Six Sigma quality rating helps the organization streamline their delivery systems, eliminate errors and achieve a cent percent accuracy. Around 8000 Dabbawalas deliver about 5,00,000 tiffing boxes to factories and offices acroos Mumbai with high labour intensive and with almost zero technology inputs. But they receive international recognition after 115 years of glorious service. Every year their business grows by 25,000 to 30,000 tiffin boxes. They lose a few customer too each year but are more than compensated with the addition. Actually they grow annually by about 10%. Till the time people will feel hungry their business will keep growing.

36

They have started advertising on Dabbas by putting stickers on them. This brings in extra income. Mumbai Dabbawalas deliver mainly during day time. They are not night bird. But India shifts to a 24 Hours X 7 Days work culture, the tiffin boxes’s network would also work under the moon and stars.

Conclusion of Case Study :-

The concept of ‘Dabbawala’ comes into picture in one of India’s big and busiest cities – where people can enjoy the fresh homemade lunch every day. What a wonderful service they provide. It is not just a service but a vocation. Their main aim is customer satisfaction the trust shows how these illiterate or semiliterate Dabbawalas have mastered the art of logistics management, supply chain management, customer service, just-in-time management, team work and problem solving. People cannot believe that uneducated people can provide such and efficient service. Even people of foreign countries (like U.K., Italy etc.) are amazed that uneducated Dabbawalas can carry out such type of business so accurately. Actually the uneducated have an ability to memorize and retain more as opposed to educated who are used to writing down everything. So they claim that “our head is our computer and Gandhi cap in the computer cover to protect it from the sun or rain.” The white-capped, white-shirted Dabbawalas shot the limelight when they were awarded the six sigma rating, but it was Prince Charles’ meeting with them in Mumbai in November,2003 that really helped them. He was the first celebrity who visited them. R. Megde said “ Many people talk about us, but Prince Charles was the first famous person who met us. He encouraged us. He is our friend.

Hard work and sincerity of Dabbawalas are the two main factors to reach such levels of efficiency with such an untrained work force. They got six sigma rating of highest operational efficiency without using any paper work or computer. Thanks to their personal as well as group efficiency and dedication to their vocation.

37

CHAPTER-4

WAREHOUSING

38

WAREHOUSING

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They come equipped with loading docks to load and unload trucks; or sometimes are loaded directly from railways, airports, or seaports. They also often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

Some warehouses are completely automated, with no workers working inside. The pallets and product are moved with a system of automated conveyors and automated storage and retrieval machines coordinated by programmable logic controllers and computers running logistics automation software. These systems are often installed in refrigerated warehouses where temperatures are kept very cold to keep the product from spoiling, and also where land is expensive, as automated storage systems can use vertical space efficiently. These high-bay storage areas are often more than 10 meters high, with some over 20 meters high.

The direction and tracking of materials in the warehouse is coordinated by the WMS, or warehouse management system, a database driven computer program. The WMS is used by logistics personnel to improve the efficiency of the warehouse by directing putaways and to maintain accurate in inventory by recording warehouse transactions.

For a warehouse to function efficiently, the facility must be properly slotted. Effective slotting addresses which storage medium a product will be picked from (pallet rack or carton flow), and how they will be picked (pick-to-light, pick-to-voice or pick-to-paper). With a proper slotting plan, a warehouse can improve its inventory rotation requirements-- such as FIFO (First In First Out) and LIFO (Last In First Out) -- control labor costs and increase productivity.

39

Traditional warehousing has been declining since the last decades of the 20th century with the gradual introduction of Just In Time (JIT) techniques designed to improve the return on investment of a business by reducing in-process inventory. The JIT system promotes the delivery of product directly from the factory to the retail merchant or from parts manufacturers directly to a large scale factory such as an automobile assembly plant, without the use of warehouses. However, with the gradual implementation of offshore outsourcing and offshoring in about the same time period, the distance between the manufacturer and the retailer (or the parts manufacturer and the industrial plant) grew considerably in many domains, necessitating at least one warehouse per country or per region in any typical supply chain for a given range of products.

Recent developments in marketing have also led to the development of warehouse-style retail stores with extremely high ceilings where decorative shelving is replaced by tall heavy duty industrial racks, with the items ready for sale being placed in the bottom parts of the racks and the crated or palletized and wrapped inventory items being usually placed in the top parts. In this way the same building is used both as a retail store and a warehouse.

Modern warehouses are also used at large by exporters/manufacturers as a point of developing retail outlets in a particular region or country. This concept reduces the end cost of the product to the consumer and thus enhance the production sale ratio. Warehousing is an age old concept which can be used as sharp tool by original manufacturers to reach out directly to consumers leaving aside or bypassing importers or any other middle agencies or person.

40

Internet impact

The internet has had an influence on warehouses too. Internet based stores do not require physical points of selling. However, warehouses are still required to store the goods. Since direct contact with customers means many small orders, this is a different situation where stores would be ordering large numbers of goods. Simply said, warehouses change from shipping large quantities of goods to shipping large numbers of small quantities of goods.

Having a large and complex supply chain containing many warehouses may be costly. Sometimes, it is beneficial to have one large warehouse per continent. This warehouse should be located at a central point, where transport is available to all other destinations. At these continental hubs, goods have to be customized for different countries. For example, goods get a price ticket in the language of the country where it will go. Making small adjustments to goods at a warehouse is called value added services.

Types of Warehouse Storage Systems

Some of the most common types of warehouse storage systems are:

Pallet rack:

Including selective, drive-in, drive-thru, double-deep, pushback, and gravityflow.

Mezzanine:

Including structural rolls formed, rack supported, and shelf supported.

Cantilever Rack:

Including structural and roll formed.

41

Industrial Shelving:

Including metal, steel, wire, and catwalk.

Automated Storage and Retrieval System (ASRS):

Including vertical carousels, vertical lift modules, horizontal carousels, robotics, mini loads, and compact 3D.

42

43

44

CHAPTER-5

FQAs

45

FQAs

Why Safexpress?

Safexpress –India’s Leading Logistics Company is renowned for its domain expertise and experienced manpower in the LSCM sector. Safexpress can best understand your Logistics and distribution requirements and can offer the most suitable Logistics model and solution to you. Safexpress has the largest network coverage across India traversing over 3,50,000 km. every day covering over 550 locations through more than 750 routes operating  24 hours a day 365 days a year .

 

What is the Network Strength of Safexpress?

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

 

Will Safexpress cater to my destination?

Safexpress-India’s Leading Logistics Company, has network of more than 550 Locations across India. To check whether Safexpress caters to your destination, please check our 'Contact Us' page and click on Network.

 

How do I Contact Safexpress for Pick-up?

Safexpress-India’s Leading Logistics Company, has offices across all industrial and commercial towns and cities of  India. To contact any one of them, please check our 'Contact Us' page and click on your State to identify your city of origin, or click on the first alphabet of your destination to see a list of destinations starting with the alphabet. Across India you could also contact our Toll Free phone 1800 113 113 & you can also mail Corporate Customer Services Desk at safexpress@safexpress.com

 

46

Does Safexpress handle both Domestic and International Consignments?

Safexpress, India’s Leading Logistics Company today handles only Domestic cargo.

 

 

What are Safexpress Services?

To view our entire bouquet of services in Logistics and Supply Chain, please go to our 'Services' page. Here, you will find all our Services listed with complete explanations. For further queries or more customised solution, Please mail us at safexpress@safexpress.com or call us toll free 1800 113 113.

 

 

What is ILM?

Integrated Logistics Management is our 3PL Product that optimises your company’s supply chain. First, we examine the linkages between your suppliers, producers, buyers, intermediaries and end users in order to identify time and cost inefficiencies. Next, we deploy our unique mix of local know-how, global practices and cutting-edge technology to provide integrated supply chain solutions. These range from specific services such as warehouse management, statutory compliance and invoicing -  to an entire gamut of third party logistics services. 

Does Safexpress operate in Containers only?

All the fleet of Safexpress is all-weather proof containers meeting global quality standards. Unless specifically required for a customised project Safexpress does not carry in open body vehicles.  

 

47

What does Safexpress Carry?

Almost every product manufactured, imported or sold in India can fall under our purview which requires to reach its destination in time, safely and conveniently. Barring goods contraband in nature, explosives, Cash, jewellery, and inflammable material...

Broadly major areas of business for Safexpress include IT hardware, Ready Made Garments, Pharmaceuticals, Electrical and Electronic goods, Automobile Components & Spares, Fabric and Cloth, FMCG, and Non-Perishable Food Products among many other products belonging to diverse market segments.

   

What about Packaging?

Safexpress principally does not handle packaging themselves. We can consult and provide needful help and assistance but directly might not pack. We have SAFEBOX for our clients that comes in two convenient sizes: the 17”x17”x12" Safebox carries up to 20kgs of cargo; the 16"x12”x 9" Safebox carries up to 10kgs of air cargo. The robust design of the Safebox is further reinforced with internal insulation, which eliminates packaging costs. There’s another outstanding feature built-in to the Safebox that covers an auto insurance for up to Rs. 5,000, absolutely free of cost.  

 

What about Transit Risks?

Safexpress works and carries on the philosophy of 'Custodians First Carriers Later’.  We sincerely abide by our corporate philosophy on the subject. Safexpress has an all risks cover - Carrier’s Risk offer, which unburdens the customer of his worries of losses in transit. On minimal extra charge of Risk Charges, we cover your valuable shipment against all sorts of transit losses including fire, flood, damage, accident, shortage, etc.

For more details please call our toll free phone 1800 113 113 or mail us at safexpress@safexpress.com

 

 

48

Does Safexpress offer CFA Services?

Yes, Safexpress –India’s leading logistics company has a special product to offer. Corporate CFA services under- ILM. Our corporate CFA  is a very customised and scalable solution for Clients who require variety of CFA services at one/many locations. Services range from sourcing, Warehousing ,Inventory Management, Despatch, Delivery and many other modules from which a customer can pick his requirements. Most importantly our Turnaround Time (TAT) to set-up the infrastructure is very low and also it is cost effective to the entire Supply Chain.

 

 

What about Warehousing Risks?

As mentioned in the previous answer, Safexpress Solution–ILM takes care of everything, including warehousing insurance. If the customer requires it, the customer gets it.

 

What kind of Material Handling Equipment are used at Safexpress' Hubs?

The Latest of the material handling equipment are used at Safexpress' hubs to ensure safety and remove Laxity from material handling. Equipment including hydraulic hand pallet trucks, dock levelers, trolleys, fork lifts’ multilevel pallet stackers are used by Safexpress. Chain Pulleys and Cranes handle consignments which are not possible by smaller equipments to manoeuvre.

It might not be out of place to mention here all the hubs of Safexpress are on platform level height. Any Logistician will understand and appreciate the essentiality and importance platform level warehouses have for material handling.

How do I locate my material?

Safexpress.com offers you online tracking of your consignment. Simply punch in your way bill number and the site informs you the status of your Consignments immediately. You may download a copy of epod (Electronic Proof of Delivery) for your reference.

 

49

 

What are the statutory obligations required for shipments?

Statutory obligations in India vary from state to state. For a check on obligations like documents, form/permits, octroi /entry tax applicability -  please visit our online logistics planning tool- Virtual Cargo. By simply selecting your booking origin and destination along with the planned date of despatch, it tells you all the obligations involved. For further clarity, please call us toll free 1800 113 113 and customer services desk will help you. You can also mail us at safexpress@safexpress.com

 

 

What is virtual cargo?

Virtual Cargo is a Safexpress' gift to Logisticians. It’s an online logistics distribution planning tool for clients. By Simply selecting your origin and destination along with planned date of despatch, It tells you all the obligations involved like number of copies of documents /invoice required, forms or permits required, octroi or entry tax applicability. It confirms you the expected day/date of arrival at destination by various modes, so as to plan a pre/postponement of your despatch to realign with your supply chain. It also confirms you the distance your cargo will travel and the check posts it’ll pass through in its transit.

 

 

How can I become a Privileged Member?

Safexpress offers special attention and offers value added services to its large volume customers. For these customers our online lounge has been named as Priviledged Members. Through a login/password access a Priviledged Member gets access to a host of services including Multiple Waybill Tracking, Tracking by Invoice, various MIS reports on Despatch and Receipt of consignments, Service Performance Analysis of Safexpress month on month. We provide direct access for our Priviledged Member to his account manager from safexpress to respond to direct issues.

A host of other add-on and special offers are being added for our Priviledged Members.

 

50

What about Reverse Logistics?

Safexpress has special arrangements to offer project based Reverse Logistics assignments. For detailed discussions, please call us toll free 1800 113 113 or send us mail on safexpress@safexpress.com 

 

Does Safexpress carry Liquid Cargo?

Safexpress principally does not  carry liquid cargo on consolidation basis. However, items like pharmaceuticals, adhesives are handled by Safexpress. For special project please speak with our Customer Service Officers on toll free number 1800 113 113 or email us at safexpress@safexpress.com

 

 

What is Safexpress' cut off time for pick-ups?

Cut off time for pick-ups vary from origin to origin depending on connections. Please check with our customer services officer at the origin station for exact cut off time for pick up and he/she will confirm it to you. Our toll free number is 1800 113 113.

 

 

Does Safexpress deliver on a Sunday? If yes, are there any extra charges?

Safexpress operates its operations function 24 hrs a day 365 days a year. Safexpress not only offers delivery services on Sunday but also does not charge anything extra for Sunday delivery.

For all other queries / questions, please mail us at safexpress@safexpress.com

51

CHAPTER-6

CONCLUSION

52

CONCLUSION

Today we are essentially operating in a global market. In this era of crumbling economic barriers, the customer reigns supreme. The successful enterprises in this fiercely competitive economy are those which are able to ensure a high level of customer satisfaction and at a considerably low cost. The focus today is not on meeting the customer’s expectations, but on exceeding them. The strategic role of logistics and supply chain management in this regard becomes vital.

To achieve the objectives of logistic and supply chain management, it is essential to have a well-defined organizational structure that supports the corporate mission and improves and influence logistics system performance. With the growing nature and scope of logistics and supply chain management in the overall performance of the enterprise over the years, there have been changes in the logistics organizational structure from being a part of various functions like manufacturing, finance, and marketing to a core function.

While designing a logistics organizational structure, firms need to follow certain principles of organization, like unity of command, span of control, authority and responsibility, line and staff relationships, centralization and decentralization of power etc.

At the same time, it is essential to take into consideration the various factors like the size of organization, corporate structure and strategy, the role of logistics and supply chain management in the overall value-addition activities, availability of IT infrastructural resources, and environmental uncertainty.

53

CHAPTER-7

BIBLIOGRAPHY

54

BIBLIOGRAPHY

SUPPLY CHAIN MANAGEMENT L.C. JHAMB

INTERNATIONAL LOGISTICS PIERRE DAVID

SUPPLY CHAIN MANAGEMENT SUNIL CHOPRA

BROCHURE OF SAFEXPRESS

WEBSITES

www.logisticworld.comwww.safexpress.comwww.google.com

55