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A STUDY ON CUSTOMER LOYALTY TOWARDS LOGISTICS IN SAFE EXPRESS PRIVATE LIMITED by M.S ARUN KUMAR Register Number 0891003
of SRI RAMAKRISHNA ENGINEERING COLLEGE, COIMBATORE 641022 (AUTONOMOUS INSTITUTION, AFFILIATED TO ANNA UNIVERSITY COIMBATORE)
A PROJECT REPORT Submitted to the DEPARTMENT OF MANAGEMENT STUDIES in partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION ANNA UNIVERSITY COIMBATORE 641 047 JUNE, 2010
BONAFIDE CERTIFICATE
Certified that the a project report titled A STUDY ON CUSTOMER LOYALTY TOWARDS LOGISTICS IN SAFE EXPRESS PVT LTD is the bonafide work of Mr. M.S ARUN KUMAR who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported herein does not from part of any other project.
Faculty Guide
Internal Examiner
External Examiner
DECLARATION
This is to certify that the project titled A STUDY ON CUSTOMER LOYALTY TOWARDS LOGISTICS IN SAFE EXPRESS PVT LTDsubmitted to the Department of Management Studies, Sri Ramakrishna Engineering College, affiliated to Anna University; Coimbatore is an original record of project done by me, under the supervision of Mrs. V.VANAJA, Assistant Professor, and Department of Management Studies. Certified further, that to the best of my knowledge the work reported herein does not from part of any other project.
5 ACKNOWLEDGEMENT
I would like to thank Management, Principal, and Director of Sri Ramakrishna Engineering College for giving me the opportunity to carry out my project work. Also I wish to thank Dr.K.Chitra, Director, Department of Management Studies, Sri Ramakrishna Engineering College for the invaluable guidance throughout the project work. I am also grateful to my guide faculty member, Prof.V.Vanaja, Assistant Professor, Department of Management Studies for her valuable suggestion and guidance leading to my successful completion of this project. I owe my bound less thanks to the project guide Mr.E.Karthik IT Head, Safe Express Pvt Ltd., Coimbatore for his valuable
encouragement and proper timely advice. Last but not least I extend my grateful thanks to all my faculty members of Department of Management Studies and my beloved parents.
EXECUTIVE SUMMARY
In the current scenario logistics plays an important role in the transfer of goods and services to the customers and logistics services provide a variety of warehousing, transportation, and supply chain management services. The services offer that customized product solutions can perform custom, custom labeling, and packaging operations. Logistics forms the system that ensures the delivery of the product in the entire supply pipeline. This includes transportation, packaging, storage and handling methods, and information flow. Safe Express was started in 1993. It started its business as a door-to-door service in 1995 with 4 routes, 9 offices, 12 container mounted vehicles and 20 employees. Safexpress Indias Leading Logistics Company is renowned for its domain expertise and
experienced manpower in the LSCM sector The study is conducted with the main objective of understanding the demographic profile of the customers, service usage behavior of the customers and level of customer loyalty towards safexpress.
7 The study is descriptive as the objectives and purpose is very clear. A sample of 100 respondents is drawn from the population based on convenience sampling method. The data is collected with the help of Specially Designed Questionnaire. The tools used for analysis are Percentage Analysis and mean score. The limitations are , the study is limited to the survey is restricted to the customers of Safe Express Pvt ltd and time limit restricts detailed survey work for this particular topic of research and Some
customers have lack of time, so they may not communicate properly. From the findings of the study Demographic profile of
respondents most of the respondents annual turnover is more than 25 Lakhs and followed by and in the service usage behavior and Majority (66%) of the respondents identified the safe express through friends And Relatives and (80 %) of the respondents are satisfied with the way of handling goods and (85%) are satisfied in the 3PL. From the Level of customer loyalty Majority of respondents is very much satisfied in clearance department and Majority (70%) of the respondents are excellent in risk coverage in safe express, Majority (62%) of the respondents is very much satisfied in transit days and Most (41%) of the respondents are very much satisfied in security system and Most (33%) of the respondents values people relationship ahead in short term goals.
8 Also it reveals that the over all Satisfaction level of customers will recommend to others and satisfied with the over all services provided with the safexpress
TABLE OF CONTENTS
CHAPTE R 1 1. 1 1. 2 1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3 3.1 3.2 4 5 Review of literature Statement of the problem Objectives of the study Scope of the study Methodology Limitations Chapter scheme COMPANY PROFILE History of the organization Management Organization structure Product profile and market potential Competitive strength of the company Future plans Description of various functional areas MICRO - MACRO ECONOMIC ANALYSIS Industry position in Global Scenario Industry position in Indian Scenario DATA ANALYSIS AND INTREPRETATION 4 8 8 9 9 10 11 12 16 17 18 20 21 22 23 25 28 53 Background 1 INTRODUCTION CONTENTS PAGE NO
9 CONCLUSION
LIST OF TABLES
PAGE TABLE NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Type of Organization Type of Business Annual Turnover Association with Safe Express Information Resources Service Utilization Type of Express service Trustworthiness of goods handling Reasons for dissatisfaction Trustworthiness of Warehouse facility Reasons for dis-satisfaction Client Handling Risk Coverage Employee Efficiency Online track information Trustworthiness of Third-party Logistics Reasons for dissatisfaction Representative Ability Responsiveness to Telephone / email Handling & Packing Clearance Department Security System Transit Days TITLE NO 28 28 29 29 30 30 31 31 31 32 32 33 34 35 36 37 37 38 40 41 42 43 44
10 24 25 26 27 28 29 30 31 32 33 Shipment Delivery on Doorstep Logistics services of other companies Switch over to other Logistics Services Switch over to other companies. Safe express deserves loyalty Increase in loyalty Value people & Short term goals Recommendation to others. Rating the overall services Mean score 45 46 46 47 47 49 50 51 51 52
LIST OF CHARTS
PAGE CHART NO. TITLE 4.1 Client Handling 4.2 Risk Coverage 4.3 Employee Efficiency 4.4 Online Track Information 4.5 Representative Ability 4.6 Responsiveness to Telephone / email 4.7 4.8 4.9 4.10 4.11 4.12 4.13 Handling & Packing Clearance Department Security System Transit Days Shipment Delivery Increase in Loyalty Safe express Value people & Short term goals NO 33 34 35 36 39 40 41 42 43 44 45 49 50
11 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Review of Literature Statement of the Problem Objectives pf the study Scope of the study Methodology Limitations Chapter scheme (report structure)
Chapter 2: ORGANIZATION PROFILE 2.1 2.2 2.3 2.4 2.5 2.6 2.7 History of the Organization Management Organization Structure Products profile and market potential Competitive strength of the company Future plans Description of various functional areas.
Chapter 3: MACRO MICRO ECONOMIC ANALYSIS 3.1 3.2 3.3 Industry position in global scenario Industry position in Indian scenario Competitors profile - a snapshot
Chapter 4: DATA ANLYSIS AND INTERPRETATION Chapter 5: CONCLUSION i) ii) Results and Discussions Considered recommendations
INTRODUCTION
1.1. Background
12 A multitude of companies today has already identified the need to create a loyal customer base and acknowledges that maintaining existing customers and extending business with them is significantly less expensive than acquiring new customers. Empirical proof of the proliferation of such customer loyalty efforts in the business world is e.g. provided in the form of loyalty programs, which many companies have installed during the past years by engaging in efforts aimed at creating customer loyalty, which in turn fosters financial success in monetary terms firms react to increasing competitive challenges.
Indian Supply Chain and Logistics Industry is more than USD 100 Billion in size and is the backbone of Indian Economy. In India the industry is growing at a rate of 8-10% annually and has been a crucial contributor in the growth and development of the Indian economy. In the near future, Traditional Logistics services like Transportation and Warehousing would continue to grow at a good rate. In addition, we expect strong Foreign Direct Investment inflows in the Indian markets, which would lead to increased market opportunities for providers of Third-Party Logistics in India. Therefore, India possesses substantial opportunities for growth in the Supply Chain & Logistics industry in the coming years, notwithstanding the temporary jolt due to the economic slowdown. 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
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 USD 70 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.
Since the beginning of the 1990s, customer loyalty has gained importance both in relationship marketing research and in business. In business, this can be attributed to changing market- and competitionenvironments. Due to a shift from a sellers to a buyers market and because of an increasing degree of globalization, most industries find themselves confronted with new challenges.
A loyal customer base represents a barrier to entry, a basis for a price premium, time to respond to competitor innovations, and a bulwark against deleterious price competition. Loyalty is critical to
14 brand volume, is highly correlated to market share, and can be used as the basis of predicting future market share; consequently,
In the supplier-focused perspective, customer loyalty is seen as a bundle of measures that aim at improving relationships with
customers. The supplier is in the center of attention and the customer is only regarded as the factor at which success of customer loyalty becomes manifest. Here it becomes clear that this approach contains a conceptual deficit. It is the customer who eventually decides on whether customer loyalty management is successful or not, because all activities undertaken by a supplier can only be geared at influencing customers to be loyal. A customer-focused perspective therefore has to be added to evaluate the success of customer loyalty management.
Within the customer-focused perspective, customer loyalty is conceptualized taking into account customers complex characteristics. These can either be approached as customers directly observable actions and/or take into account their attitudes and intentions. Since customers actions are directly influenced by their attitudes and intentions, it is obvious that these have to be scrutinized to understand and manage loyalty.
15 The relationship-focused perspective directly examines the relationship between suppliers and customers. Accordingly, the
objectives of study in this perspective usually are buying behavior in retail contexts and long-term relationships marked by frequent interaction between suppliers and buyers in industrial contexts.
Martin sa al. (1998) A Study on Qualitative and quantitative analysis of logistics services in India & loyalty towards in logistics.
2
Paul Joseph Raj,A Study on Customer Satisfaction in Logistics , provide by the various companies in India.
16 logistics services. The data was collected from 150 respondents, under the age from 20 to above 65.From the findings of the study, most of the customers are satisfied with the service provided in the logistics. From the findings of the study, known that, few customers are neutral in services providing quick in delivery. William M. Weilbacher (2006)3 evaluates in her study comparison of Indian Logistics & Foreign logistics Services. The objective of the is to find out the level of usage in the logististics services in India as well as in globally. The data is mostly collected as secondary data. The scope of the study is broad in nature. From the findings of the study most of the users are very much satisfied in logistics services provided in all the aspects, the satisfaction level is very much satisfied in logistics services in India, on concluding that, logistics are very much useful in all the categories. Rathore Singh (2006)4, in their study evaluated the impact of logistics services in India, The main objective of the study is to identify the problems in logistics services, and to know about the customers loyalty in the logistics usage, the data is collected from 100 respondents under the age from 22 to above 60, From the findings of the study, most of the respondents are satisfied with the transportation, in transit, Insurance cover provided by the logistics company. Few respondents dissatisfied with the warehouse and the online tracking information. On concluding that the logistics services are useful in all aspects. Robertson. Eliza (2003)5, in their study on Customer preference in the Courier and the logistics Services, The study used an
3
Rathore Singh, A Study on Impact of Logistics Services in India with special reference to the North India & South India.
5
Robertson .Eliza, Customer Preference in the logistics services, International journal of Logistics, vol 25(1), pp.71-86.
17 experimental design in which certain groups of participants were exposed to a logistics to identified it well, The objective of the study is to identify the customer preference in the logistics services. From the findings of the study few customers are dissatisfied with damage of goods when in transit , most of the customers are very much satisfied in the logistics services provided. The result was that the respondents are well aware in choosing the logistics company. Prof.P.R.S.Sharma (2006)6, A Study on Current Scenario of Logistics service Iin India, The objective of the study is , to know the current scenario of the logistics services , and to identify well and measured by using the quantitative and qualitative analysis. The survey was collected mostly from the secondary data as well as primary data; the data is collected from the 75 respondents. From the findings of the study the Indian logistics is pretty good in nature and respondents are well aware of the logistics service providers. Paul E. Hendry et al. (2008)7, in their study under stand the Brand Recall Gati Brand in Logistics and Cargo Needs, The main objective if the study is to identify the brand strategy in Gati , in cargo needs as well in logistics services. The data is collected from the 150 respondents from the Gati, most of the respondents in the age from 22 to above 65, from the findings of the study most of the respondents are well aware and satisfied towards Gati cargo and logistics services. Prof.Ajay Sharma (2006)8, evaluated in their research investigated in supply chain management and competitive marketing strategy of major courier and cargo services in India, The main objective of the study is to identify the marketing strategy evaluated,
6
Prof.P.R.S.Sharma, A Study on Current Scenario of Indian logistics, International journal of Logistics, vol 28(1), pp.61-86.
7
Paul E. Hendry et al , A Study on Brand recall of Gati Logistics and Cargo services
8
Prof.Ajay Sharma , A Research in Supply chain Management and Competitive Marketing Strategy of Major Courier and Cargo services in India.
18 the data is mostly collected from the secondary data. From the findings of the study most of the respondents are satisfied with the marketing strategy by the cargo service provided, and few respondents are in not agree with the marketing. Peter R. Drake et al. (2004)9, in their study investigates the impact of Logistics services in globally, the main objective of the study is to identify the problems faced in the logistics services by the users, the data is collected from the 100 respondents, from the findings of the study most of the respondents are neutrally aware of the logistics services provided in domestically, and most of the respondents are very much satisfied in the logistics services provided globally. Prof.Srikanth.Gupta (2008)10, in their study Customer perception towards logistics services provided in India, The main objective of the study is to identify the customer perception towards logistics services, The data is collected from the 100 respondents, secondary data is been collected mostly , from the findings of the study , some respondents are not satisfied with the services provided and few are neutrally satisfied in it. Concluding that the customers are well satisfied in cargo services.
10
Prof.Srikanth Gupta, A Study on customer perception towards Logistics services provided in India.
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1. To know about the demographic profile of the customers. 2. To Study the service usage behavior of customers. 3. To study the customers opinion about the various services provided by Safe Express Ltd., and the customer loyalty. 4. To provide suggestions to safe express limited for further improvement.
20
The study is conducted at safe express pvt ltd. The respondents are various business houses in Coimbatore making use of logistics services provided by Safe Express Ltd.The present customers alone are considered for conducting this study.
21 Tools for Data Analysis: Simple percentage method and Mean Score is performed for the samples collected to estimate the overall customer satisfaction level of customers.
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Management, Organization Structure, Products profile and Market Competitive strength company, Description of various functional areas Chapter 3:MACRO-MICRO ECONOMIC ANALYSIS The prevailing economic scenario with respect to the industry Selected for the study is briefly discussed in this chapter Chapter 4:DATA ANALYSIS & INTERPRETATION This part of the project deals with the analysis of data using the Statistical tools and interpretation of the results Chapter 5:CONCLUSION This Considered part deals with the Results and Discussions,
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24 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. 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. Safexpress Indias 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 its 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.
25 Safexpress have a Integrated Logistics Management. It is our 3PL Product that optimises your companys 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 o ur uniquemix of local know-how, global practices and cuttingedge 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.
Mission: To adopt and internalize a work culture which demonstrates a "we can we will" attitude to reflect in our daily responsibilities so as to far exceed our objectives, consistently striving towards market dominance. It will create historical landmarks forming a strong edifice for the future overcoming all obstacles pro-actively as our personal responsibility and commitment to create delight for the customer with impeccable personalized services. Vision: To be a conscious learning organization maintaining flexibility for change so as to provide the most customized solutions. Striving towards global market share whilst maintaining dominance in the domestic market through good hr practice and excellent customer service. 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 efficiently
26 lead to the highest output from the lowest input and this is the strongest measure of quality. The best certification of a quality organization is the
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
27 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. 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 Provider" by Limca Book of Records 2002 Service
2003 Safexpress declared India's "Largest Logistics Service Provider" by Limca Book of Records 2003 Mr.pawan Jain, CMD, Safexpress, becomes one of the finalists in the prestigious EnY's Entrepreneur of the Year Award. 2005 Safexpress inaugurated its 500th scheduled delivery location Safexpress bags the Franchise Awards04 for excellence in Team Work. 2006 Safexpress bags the MICO:Power of We Award for excellent service in logistics Safexpress fleet crosses 3000 mark.
2.2 MANAGEMENT
Mr.Pawan Jain (Chairman and Managing Director Safexpress) 15 Years of experience in the industry Mr.Anil Sayal General Manager of Safexpress. Mrs. Jain Director HR & Admin.
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Mr.E Karthik Head IT Southern Region. P.Suresh Head Coimbatore Region Mr.Uday Sharma Director Marketing Head R.K Jain Director - Finance Mr.N.D Kishore Director Southern Region Mr. P.S Nair Director - Coimbatore Branch.
AREA MANAGER
ASST. MANAGER
Logistics HR Marketing System Finance & Accounts
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Manager Manager Manager Manager Manager
Executives
Executives
Executives
Executives
Executives
R&D Manager
Administration Manager
Executives
Executives
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
30 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: 14 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.
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
31 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.
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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.
Weakness Safe express is still lagging in ware house management to its competitors. Safe express was a late entrant to generic cargo business.
Opportunities Automotive industry in India is growing at 18% per annum creating a huge opportunity for Indian logistics companies like Safe express. Indian retail sector is growing 25% annually creating US$ 175200 billion by 2016. Threats Safe express business model was cloned by several retail courier operators thus creating threat for Safe express business. Safe express employees were recruited by its competitors with high salary and other perk and allowances.
33 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 2012. 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. 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.
Safexpress has also placed an order for 380 trucks to add to its current fleet of 3,000 vehicles.
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.
34 Marketing department System & administration department Finance & accounts department Research and development department Dispatch Department
Human Resource Department: A human resource department plays a vital role in the organization, to recruit the employees and train them to satisfying the need of the customer, and motivate the employees in the organization to achieve the goals. Marketing Department: It will try and maximize the level of sales by carrying out market research and promoting the goods or service through a motivated sales team. Finance & Accounting Department: Keep a record of all money coming in and going out of the business. They have responsibility for securing finances for future expansion and paying staff. System & Administration Department: Coordination of branch activities and provision of interaction between branches and the main office, and maintain the documents and invoice bills upto dates to be maintained to record it. Research and Development Department: Usually, the primary function of the R&D department is to conduct researches for new services and develop new solutions.
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Technological progress and worldwide trade and investment liberalization are presenting new opportunities for countries to harness global markets for growth and poverty reduction. But with the advent
36 of global supply chains, a new premium is being placed on being able to move goods rapidly, reliably, and cheaply. The ability to connect to the worldwide logistics web depends on a country'sinfrastructure, service markets, and trade processes. The government and the private sectors in many developing countries should improve these areas - or face the large and growing costs of exclusion, said a World Bank report. REVENUE DISTRIBUTION GLOBALLY:
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.
37 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. 3.2 INDIAN SCENARIO: Indian Supply Chain and Logistics Industry is more than USD 100 Billion in size and is the backbone of Indian Economy. Our industry is growing at a rate of 8-10% annually and has been a crucial contributor in the growth and development of the Indian economy. In the near future, Traditional Logistics services like Transportation and Warehousing would continue to growth at a good rate. However, the big ticket growth would come from the Value Added Logistics services in the near future. At present, Outsourced Logistics accounts for only one-third of the total Logistics market in India, which is a significantly lower proportion vis-a-vis the developed markets. Growth in this industry is currently being driven in India by over USD 300 billion worth of
38 infrastructure investments, the phased introduction of VAT, the development of organized Retail and Agro-processing industries, along with a strong manufacturing growth. In addition, we expect strong Foreign Direct Investment inflows in the Indian markets, which would lead to increased market opportunities for providers of Third-Party Logistics in India. Therefore, India possesses substantial opportunities for growth in the Supply Chain & Logistics industry in the coming years, notwithstanding the temporary jolt due to the economic slowdown. The logistics and warehousing sector in India, till now, has been highly fragmented and characterised by the presence of numerous unorganised players. A large number of players have been providing services in individual segments like transportation, warehousing, packaging etc. In 2007, organised players accounted for only 6 per cent of the total US$ 100 billion Indian logistics industry However, changing business dynamics and the entry of global third party logistics players (3PL) has led to the remodelling of the logistics services in India. From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions that improve efficiencies. Indias logistics sector attracted investments worth Rs. 23,200 crore in first half of 2008, according to a study by AssochamTrade logistics2008. The report said about 110 logistics parks spread over approximately 3,500 acres at an estimated cost of $1 bn are expected to be operational and an estimated 45 mn sq ft of warehousing space
Comparison of Indian logistics performance index with other countries: Country USA UK Singapore India China Mexico LPI Score 3.85 3.84 4.19 3.07 3.64 2.64
The Logistics Performance Index (LPI) indicators provide the indepth each country assessment of the logistics gap among countries. As the above graph shows those LPI scores of different countries and also the performance of developed countries comparing to the developing nations. Singapore-1stUSA- 9th China-30th India-39th.
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4.1 Respondents demographic profile. This demographic organization, part profile type of deals of the the of the study deals like with of the the and respondents business, type
annual
turnover
Percentage 27 24 23 21 5. 100
The above table reveals that most (27%) of the customers are Sole proprietors followed by Partnership business (24%), Private limited company(23%) and Public limited company (21%). Table 4.1.2: Type of Business Type of Business Manufacturing Trading Assembling No. of Respondents 36 47 13 Percentage 36 47 13
The above table reveals that most (47%) of the customers are in trading business followed by manufacturing business (36%) and assembling business (13%). Table 4.1.3: Annual Turnover Annual Turnover Less than 25 Lakhs 26-50 Lakhs 51-100Lakhs Above 101 Lakhs Total
Percentage 56 20 16 8 100
The above table reveals that majority (56%) of the customers have an Annual turnover less than 25 Lakhs and most (20%) are in 26-50 Lakhs category 16% are in 51-100 Lakhs category followed by 8% who are above 101 Lakhs category. Table 4.1.4: Association with Safe Express Association with Safe Express Less than 3 Years 3 to 5 Years 5 to 7 Years 7 to 10 Years More than 10 Years Total No. of Respondents 55 22 12 5 6 100 Percentage 55 22 12 5 6 100
The above table reveals that majority (55%) respondents are associated with Safe Express for less than 3 years followed by most of the (22%) respondents are in 3-5 years category, 12% in 5-7 years category, 6% in more than 10 years and 5% are in 7-10 years category.
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4.2 Information resources and service utilization. This part deals of the study deals with the information resources, service utilization, and type of express service.
Table 4.2.1: Information Resources Information Resources Newspaper Television Friends & Relatives Others Total
Percentage 11 16 66 7 100
The above table reveals that majority (66%) respondents came to know about safe express through Friends & Relatives and (16%) from Television and (11%) of the respondents from Newspaper. Table 4.2.2: Service Utilization Services Utilized Express Warehouse 3 P'L Draft on Delivery (DOD) Check on Delivery Total No. of Respondents 56 17 11 14 2 100 Percentage 56 17 11 14 2 100
The above table reveals that majority (56%) respondents availed Express Services, 17% are using Warehouse services, 14% are using Draft on Delivery services, 11% are using Third Party Logistics and 2% are using Check on Delivery services.
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Table 4.2.3: Type of Express service Type of Express Service Surface Air Total No. of Respondents 43 13 100 Percentage 43 13 100
The above table reveals that most (43%) of the respondents are availing Surface services followed by 13% who are availing Air services.
4.3 Respondents opinion about Goods Handling This part deals of the study deals with the trustworthiness of goods handling, reasons for dissatisfaction, trustworthiness of warehouse facility and reasons for dissatisfaction.
Table 4.3.1: Trustworthiness of goods handling Respondents Opinion Yes No Total No. of Respondents 80 20 100 Percentage 80 20 100
The above table reveals that majority (80%) of the respondents are satisfied with the way of goods handled and feel it is trustworthy. Table 4.3.2: Reasons for dissatisfaction Reasons Transit Damages Method Of Packing Accidents Others if any No. of Respondents 8 5 4 3 Percentage 40 25 20 15
44 Total 20 100.0 Out of 20 respondents who feel that goods handling system is not 40% of them expressed that it is due to transit damages
trustworthy, packing.
part
deals
of
the
study
deals
with
the
No. of Respondents
Percentage
81 19 100
81 19 100
The above table shows that majority (81%) of the respondents expressed that warehouse facility provided by Safe Express Ltd is trustworthy. Table 4.4.2: Reasons for dissatisfaction
Reasons for Dis-satisfaction Lack of Space Security Damages Marking Problems Total
No. of Respondents 8 5 4 2 19
Percentage 40 25 20 15 100
45 Out of 19 respondents who feel that warehouse facility is not trustworthy, 40% expressed that lack of space is the main reason for the dissatisfaction and 20% of them expressed that it is due to lack of security.
The above table reveals that most (44%) of the respondents expressed that client handling is excellent and 26% of the respondents stated that client handling is good. Chart 4.1: Client Handling
46
Table 4.5.2: Risk Coverage Respondents Opinion Excellent Good Fair Poor Total No. of Respondents 70 17 10 3 100 Percentage 70 17 10 3 100
The above table reveals that most (70%) of the respondents expressed that Risk coverage is excellent and 17% of the respondents stated that Risk Coverage is good. Chart 4.2: Risk Coverage
47
Table 4.5.3: Employee Efficiency Respondents Opinion Excellent Good Fair Poor Total No. of Respondents 28 22 20 30 100 Percentage 28 22 20 30 100
The above table reveals that most (30%) of the respondents expressed that Employee Efficiency is poor and 28% of the respondents stated that Employee Efficiency is Excellent. Chart 4.3: Employee Efficiency
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Table 4.5.4: Online track information Respondents Opinion Excellent Good Fair Poor Very poor Total No. of Respondents 30 18 27 12 13 100 Percentage 30 18 27 12 13 100
The above table reveals that most (30%) of the respondents expressed that Online track information is excellent and 27% of the respondents stated that Online track information is fair.
Percentage 85 15 100
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The above table shows that majority (85%) of the respondents expressed that Third Party Logistics provided by Safe Express Ltd is trustworthy. Table 4.6.2: Reasons for dissatisfaction Reasons Delay in Delivery Delivery status updates Frequent Inventory Damages & Shrinkage Just in time requirements Total
No. of Respondents 6 2 4 3 15
Percent 40 14 26 20 100
Out of 15 respondents who feel that third-party logistics is not trustworthy, 40 % of them expressed that the reason for dissatisfaction and 26 % felt that it is due to frequent inventory damages & shrinkage.
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Percentage 49 27 24 100
The above table reveals that most (49%) of the respondents are very much satisfied with Representative Ability and 27% are Satisfied. Chart 4.5: Representative Ability
Table 4.7.2: Responsiveness to Telephone / email Level of Satisfaction Very Much Satisfied Satisfied Neutral Dis-satisfied Total
Percentage 26 13 20 41 100
52 The above table reveals that most (41%) of the respondents are dissatisfied with responsiveness to telephone /emails and 26% are very much satisfied with responsiveness to telephone /emails. Chart 4.6: Responsiveness to Telephone / email
Table 4.7.3: Handling & Packing Level of Satisfaction Very Much Satisfied Satisfied Neutral Dis-satisfied Highly Dis-satisfied Total No. of Respondents 22 27 34 9 8 100 Percentage 22 27 34 9 8 100
53 The above table reveals that most (34%) of the respondents are neutral in their opinion about handling & packing and 27% are satisfied with the handling & packing services. Chart4.7: Handling & Packing
Table 4.7.4: Clearance Department Level of Satisfaction Very Much Satisfied Satisfied Neutral Total No. of Respondents 68 21 11 100 Percentage 68 21 11 100
54 The above table reveals that majority (68%) of the respondents are very much satisfied and 21% are satisfied with the services of clearance department. Chart4.8: Clearance Department
Table 4.7.5: Security System Level of Satisfaction Very Much Satisfied Satisfied Neutral Dis-satisfied No. of Respondents 33 25 26 16 Percentage 33 25 26 16
The above table reveals that most (33%) of the respondents are very much satisfied and 25% are satisfied with the security system followed in the company. Chart 4.9: Security System
Table 4.7.6: Transit Days Level of Satisfaction Very Much Satisfied Satisfied Neutral Total No. of Respondents 62 28 10 100 Percentage 62 28 10 100
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The above table reveals that majority (62%) of the respondents are very much satisfied and 28% are satisfied with the duration or time taken for delivery. Chart 4.10: Transit Days
Table 4.7.7: Shipment Delivery on Doorstep Level of Satisfaction Very Much Satisfied Satisfied Neutral No. of Respondents 38 25 26 Percentage 38 25 26
The above table reveals that most (38%) of the respondents are very much satisfied and (26%) are neutral with regard to shipment delivery on doorstep. Chart 4.11: Shipment Delivery
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Percentage 20 80 100
The above table reveals that majority (80%) respondents are not utilizing other logistics services and 20% are using other logistics services. Table 4.8.2: Switch over to other Logistics Services Switch over to Safe Express Yes No Total No. of Respondents 12 8 20 Percentage 60 40 100
The above table shows that out of 20 respondents who are using logistics services of other companies, majority (60%) have an idea to switch over to Safe Express Ltd in future.
No. of Respondents
Percentage
It is inferred from the above table that out of 80 respondents who are using only the services of safe express 25% have an idea to switch over to other logistics companies in future and 75 % expressed their wish to remain with Safe Express Ltd.
Table 4.9.1: Safe express deserves loyalty Respondents Opinion Dis-agree Neutral Agree Strongly Agree Total No. of Respondents 23 21 32 24 100 Percentage 23 21 32 24 100
The above table shows that most (32%) of the respondents agree that they are loyal towards safe express and 24% strongly agree that they are loyal towards safe express.
Table 4.9.2: Increase in loyalty Respondents Opinion Dis-agree No. of Respondents 32 Percentage 32
The above table reveals most (33%) of the respondents strongly agree and 32% disagree about increase in loyalty over the period. Chart 12: Increase in Loyalty
Table 4.9.3: Value people & Short term goals Respondents Opinion Dis-agree No. of Respondents 10 Percentage 10
The above table reveals most (41%) of the respondents strongly agree and 31% agree that safe express values people and relationship. Chart 13: Safe express Value people & Short term goals
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Table 4.10.1: Recommendation to others. Recommendatio n Yes No Total No. of Respondents 75 25 100 Percentage 75 25 100
The above table reveals majority (75%) of the respondents will recommend safe express to others 25% will not recommend to others.
The above table reveals most (41%) of the respondents are satisfied (33%) are neutral and (26%) are very much satisfied with respect to the overall services of the company.
63 This part deals with the Ranking Level of customer loyalty, increase in loyalty over the years and also respondents opinion about the companies value to people and relationship ahead of short-term goals.
The above table shows the categorization of the Customer Loyalty on the basis of the reasons trustworthiness of safe express. The respondents believe that safe express company values people and Reasons Mean Rank
3.9232
3.4788
Safe express company values people and relationship ahead in short term goals
1.7692
relationship ahead in short term goals following deserves the loyalty and loyalty towards safe express is become better.
CHAPTER-5 CONCLUSION
64 Chapter 5 deals with the results of the analysis and the interpretations and the discussions upon the same. It also deals with the considered recommendations. 5.1 Results and Discussions The Major findings are summarized under various sections. 5.1.1. Demographic profile Most (27%) of the respondents are sole proprietorship firms. Most (47%) of the respondents are engaged in trading business. Majority (56%) of the respondents Annual turnover is less than 25 Lakhs. Majority (55%) of the respondents are associated with safe express for less than 3 years.
5.1.2 Service usage behavior Majority (66%) of the respondents said that they came to know about the safe express through their friends and Relatives. Majority 43 %of the respondents is availing surface services. Majority of the respondents are satisfied with way of goods handled in safe express (85%), warehouse facility (80%), Thirdparty logistics services (85%). 5.1.3 Level of Customer Loyalty Majority of the respondents expressed that the client handling is either excellent (44%) or good (26%). Majority of the respondents expressed that the Risk coverage is either excellent (70%) or good (17%). 30% of the respondents expressed that Employee Efficiency is poor whereas 28% stated that Employee Efficiency is Excellent. The respondents expressed that online track information is excellent (30%) and 27% stated that online track information is fair.
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Majority of the respondents are either very much satisfied (49%) or satisfied (27%) with Representative Ability. 41% of the respondents are dissatisfied with responsiveness to telephone /emails while 26% are very much satisfied with responsiveness to telephone /emails. 34% of the respondents are neutral in their opinion about handling & packing and 27% are satisfied with the handling & packing services. Majority of the respondents are either very much satisfied (68%) or satisfied (21%) with the services of clearance department. Majority of the respondents are either very much satisfied (33%) or satisfied 25% with the security system followed in the company. Majority of the respondents are either very much satisfied (62%) or satisfied (28%) with the duration or time taken for delivery. 38% of the respondents expressed that they are very much satisfied and 26% are neutral with regard to shipment delivery on doorstep.
Majority (80%) of the respondents are using the logistics services of Safe Express Ltd only. Out of 20% of the respondents who are using logistics services of other companies majority of them have an idea to switch back Safe Express Ltd. Most of the respondents expressed that safe express deserves loyalty. About 50% of the respondents strongly agree or agree that their loyalty has increased over the period. Most of the respondents expressed that company values people relationship. Majority (75%) of the respondents said that they will recommend safe express to others. Majority of the respondents are either very much satisfied or satisfied in over all services provided by the safe express.
66 5.2 Suggestions 5.2.1 Most of the respondents are not satisfied with employee efficiency, therefore, Safe express can initiate Human resource Department to enhance employee motivation and to develop employee skills. 5.2.2 Most of the respondents are not satisfied with Online track information system, therefore Online track information system can implemented and services. 5.2.3 Most of the respondents are neutral in handling and therefore, packing updated effectively to improve client
5.2
Observatory based Recommendations. Security system can be upgraded with latest technologies as it will increase the loyalty. Proper communication with the clients regarding over all services to be updated frequently. Clients meeting/grievances cell should be instituted in the organization.
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Appendix 1
QUESTIONNAIRE
1) 2) 3)
Name & Address of the organization: Year of establishment: Type of the organization: a) Sole Proprietorship b) Partnership c) Private Limited Company d) Public Limited Company e) Others
4)
a) Manufacturing c) Assembling
5)
Annual Turnover: a) c)
d)
6)
How long you are the customer/client of Safe Express Pvt Limited?
a) c) e) Less than 3 Years 5 to 7 Years More than 10 Years b) d) 3 to 5 Years 7 to 10 Years
7)
How do you came to know about Safe Express Pvt Limited? a) Newspapers c) Friends & Relatives b) Television d) Others
8)
Which of the following services offered by the Safe Express are availed by you at present?
68
b) Warehousing
c) 3 PL
e) Check on Delivery
If express, which one of following services you are availing? a) Surface b) Air
10) Is the way of goods handled by Safe Express Pvt Limited trustworthy? a) Yes b) No
11) If No, what are the reasons? a) Transit damages b) Method of packing c) Accidents d) Others if any
12. Is the warehouse facility provided by Safe Express Pvt Limited trustworthy? a) Yes b) No
13) If No, what are the reasons? a) Lack of space c) Damages b) Security d) Marking problem
14) Please rate the services offered by Safe Express Pvt Limited? Services offered by the Safe Express 1)Client handling
2) Risk Coverage 3)Employee Efficiency 4)Online Track Information
Excellent
Good
Fair
Poor
Very Poor
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15) Is the Third-Party Logistics services provided by the Safe Express Pvt Limited trust
worthy?
a) Yes b) No
16) If no, what are the reasons? a) Delay in delivery b) Delivery status updates d) just in time requirements
17) Please mention the level of satisfaction regarding the following services provided by the Safe express Pvt Limited : (VMS - Very much satisfied, S Satisfied, N- Neutral, DS- Dissatisfied, HDS Highly Dissatisfied) VMS 1.Representative ability to help you resolve your issue/need 2. Responsiveness to telephone calls & emails 4. Handling & packing 5. Clearance Department 6.Security system 7. Transit Days 8. Shipment Delivery at your doorstep S N DS HDS
18) Do you also make use of logistics services of any other company at present? a) Yes b) No
70 19) If yes, will you switch 100% to Safe Express Pvt Limited in future? a) Yes b) No
20) If no, Do you have any idea of switching over to any other Logistics Services Company? a) Yes b) No
21 ) Please rate your level of agreement with the following statements (10-1 scale with 10 being completely agree, 5 being neutral, and 1 being completely disagree): 1 (Strongl y Disagree I believe Company Safe Express deserves my loyalty Over the years, my loyalty to towards Safe Express has become better Safe Express Company values people and relationships ahead of short-term goals 2 3 4a 5
a) Yes
b) No
23) Rate the overall services provided by the Safe Express Pvt Limited? a) Very much Satisfied b) Satisfied c) Neutral
BIBLIOGRAPHY
Book Reference: Logistical Management Tata McGraw 2000 Edition. Written by Donald. Bowersox, and David. Closs. The Management of Business Logistics 7th Edition: Written by Edward J. Bardi, C.John Langley, and John Joseph Coyle Kothari C.R. Research Methodology New Age International Publishers Kotter Philip Marketing Management Prentice Hall Of India Private Ltd Websites: i) www.safexpress.co.in ii) www.safexpresspackers.com iii) http://www.indexuae.com/Top/Business_and_Economy/Services/L ogistics iv) http://www.lintasfreight.com/ v) www.yahooanswers.com
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