Nippon Express

Introduction

Session: 2014-2016
SUMMER
INTERNSHIP
REPORT ON
Effectiveness

of

Logistics
Management : A
case of Nippon
Express
Under the guidance
of
Mr. Ajay Mishra
Sr. Manager (Logistics)
NIPPON EXPRESS
GURGAON
Submitted By:
SAURABH MAURYA
Roll no: 15
MBA-IB 3rd Semester
DECLARATION
I,Saurabh Maurya, student of Delhi School of Economics, University of Delhi hereby
declare that I have completed my Summer Internship project in Nippon Express,
Gurgaon from 01-06- 2014 for a period of 8 weeks on the project entitledEffectiveness of Logistics Management : A case of Nippon Express The contents of the report
are written by me and are exclusively based on my own experience during the

Internship period.

Date:
Maurya
Place:
Semester

Saurabh
MBA-IB 3rd
Dept. of Commerce
Delhi School of
Economics
University of Delhi

ACKNOWLEDGEMENT

This report has been possible due to the help and support of a lot of people. First of
all, I would like to thank my organizational guide, Mr. Ajay Mishra Sr. Manager
(Logistics)NIPPON EXPRESS GURGAON for guiding me throughout my summer
internship project. His encouragement, time and advice are highly appreciated.
I would also like to express my sincere gratitude to Mr. Nidheesh Sankaran, Incharge
Operations, NIPPON EXPRESS GURGAON also under whose guidance I carried out my
project. I am extremely grateful to him for his guidance, constant support and
patience throughout the project. This project would not have been successful
without his help.
I would like to thank the respondents of the survey who offered their opinions and
suggestions and sometimes critical views throughout the survey and helped me to
update myself constantly.
Saurabh Maurya
MBA 3rd Semester
Roll No.: 54
Dept. of Commerce
Delhi School of Economics
University of Delhi

1. INTRODUCTION

As part of curriculum of the MBA(IB) , Dept. of Commerce , Delhi School of Economics ,

University of Delhi , students are required to do a Summer Internship in any reputed
organization. For this reason, I did my Summer Internship in Nippon Express, Gurgaon . The
project work was titled Effectiveness of Logistics Management in Delhi and to suggest ways
and means to improve the management strategic decisions.

1.1 OBJECTIVE OF THE STUDY

The objectives of the Project are:

To know about Logistics Industries

To compare the effectiveness of logistics management at Nippon Express and to

benchmark the organization with respect to the industry.

To have a thorough understanding of how logistics and freight industries work.

To know whether the customers are satisfied with the existing range of service pattern.

1.2 METHODOLOGY OF THE STUDY

The data used for the study had primary and secondary character to it. The primary data was
collected through questionnaire method. The secondary data were composed through the
reference of books, websites, and interviews with various executives in different organizations of
the sample. The procured data was analyzed by a simple percentage method and the results are
supported with graphs and charts.

1.3 SCOPE OF THE STUDY:

The scope of the study is confined to Dubai Ports (Al Hamriya Port) and nearby organizations of
Nippon Express, which are into the concerned industry. The study is done only on industries
dealing with Freight and Logistics in Dubai area.
a. Introduction to Logistics Management
Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective forward and reverse flow and storage of goods, services and information
between the point of origin and the point of consumption in order to meet customers'
requirements. A professional working in the field of logistics management is called a logistician.
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing
complexity of supplying one's business with materials and shipping out products in an
increasingly globalized supply chain, calling for experts in the field who are called Supply Chain
Logisticians. This can be defined as having the right item in the right quantity at the right time at
the right place for the right price and it is the science of process having its presence in all sectors
of the industry. The goal of logistics work is to manage the fruition of project life cycles, supply
chains and resultant efficiencies.

b. Origin and Definition of Logistics:

The term "logistics" originates from the ancient Greek "" ("logos""ratio, word,
calculation, reason, speech, oration"). Logistics is considered to have originated in the military's
need to supply themselves with arms, ammunition and rations as they moved from their base to a
forward position. In ancient Greek, Roman and Byzantine empires, there were military officers
with the title Logistikas who were responsible for financial and distribution of supplies.
The Oxford English dictionary defines logistics as: The branch of military science having to do
with procuring, maintaining and transporting material, personnel and facilities.Another
dictionary definition is: "The time related positioning of resources." As such, logistics is

commonly seen as a branch of engineering which creates "people systems" rather than "machine
systems"....
c. Prospects of Growth in the Industry
In years gone by, the traditional warehousing and logistics facility was located by railroad tracks,
a water port, and/or freeways, usually in the least desirable parts of cities or large towns. This
stereotype then faded as gigantic, state-of-the-art facilities began to sprout in more rural areas on
the outskirts of transportation and population hubs. The World started beginning to see such
facilities showing up in even less "traditional" areas. Modern warehouses now are being located
in carefully manicured industrial parks that are sprouting as fast as the corn and wheat once did
in these open spaces-often in out-of-the-way places. Why the emphasis on such locations for
logistics companies?
Much of it is due to the great flux that the logistics industry has been undergoing in the first three
years of the 21st century. Most of these changes are being driven by a growing trend in the
manufacturing and retail sectors to form partnerships with companies to which they can
outsource non-core logistics competencies-3PL providers.

In turn, 3PL providers are continually looking to provide innovative supply chain solutions to
customers by focusing on value-added capabilities, differentiating themselves from the
competition. They focus on key objectives, such as implementing information technologies,
instituting effective management processes, integrating services and technologies globally, and
delivering comprehensive solutions that create value for 3PL users and their supply chains. This
need to partner with customers and become more integrated into their supply chain processes has
created the ancillary need to locate close to these customers.
That isn't to say the need for easy access to transportation hubs and different modes of
transportation won't continue to be important. But the above shift in business strategy, along with

the advances in technology and enhanced communication, has opened the door for logistics
facilities to operate effortlessly in a myriad of locations.
Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals, painful
layoffs and great geopolitical uncertainties can sweep away even the most comprehensive
logistics strategies and thats despite outstanding management over many years. These are
exceptionally difficult times and it has never been more important to connect logistics and freight
planning to executive board thinking than now. Its easy to lose sight of the bigger picture in the
rush to cut infrastructure cost and conserve cash. Hopefully organization succeed in protecting
the business, satisfying shareholders and analysts, but what about capacity and flexibility, morale
and momentum?
To be a logistics winner in the coming years organizations need to use the downturn to reshape
for growth, propelled by an unshakeable conviction that the mission is still important, that more
prosperous times lie ahead, and that in some way the company infrastructure is helping to build a
better kind of world.
Logistics is inevitable in the future and essentially the management policy also has a significant
role in the future of world. Generally the study is being featured with all aspects of management
in Logistics and Freight areas. (Logistics include Transportation, Warehousing, Network Design,
Crossdocking, and Value Adding)
d. General Import / Export Market
a.) Market Analysis
UAE sea freight exports rose in volume and value during recent years. UAEs largest exporting
state, Dubai, led these increases with substantial increases in volume and value of exports. All
states showed an increase in export value and many states having an increase in export volume.
Abudhabi, Rasalkhaimah, and other states showed small decreases in export volume compared to
Dubai.
Total freight import values increased 16.3% in 2006/07. China remains largest import market.
Exports to other largest sea freight export markets showed substantial growth, namely Africa

(25.8%), India (28.4%) and other Asian Markets (28.4%). Over the last 6 years, import volumes
and value to China and India have consistently grown, while imports from Japan increased
following three consecutive years of decline. Most of this increase can be attributed to a large
increase in sea freight imports from China, which rose 86,629,230 tones or 218.5%. Other
substantial increases in import volume were seen from Taiwan (23.7%), India (22.2%), Italy
(14.9%), New Zealand (14.9%) and Mexico (70.4%), while noteworthy decreases in export
volume were seen to Netherlands (-14.0%) and USA (-25.2%).
2006/07 saw a mixed result for Chinese and other Asian sea freight exports. Increasing
import value was led by Base Metals (principally Copper Cathodes and Lead), despite recording
a small decrease in import volume in the group. Mineral Products (mainly Liquid Gas and Iron
products) and Prepared Foodstuffs (mainly packed FMCG products) were the other major
commodity groups showing an increase in value, also backed by increasing commodity prices for
these groups. Prepared Foodstuffs have shown a continual increase in import value over the last
6 years. The 2006/07 increase in Mineral Products and Base Metal Products imports follows 3
years of import value decline in these products. (Base metals used mainly for Automobiles,
Batteries etc.)
The most substantial decrease in export volume was seen in Vegetable Products (grains and
other plant products), with an associated drop in export value. Transport Equipment also saw a
large drop in export value and volume. A decrease in export value continues 3 consecutive years
of decreases in export value in these groups. The most constant export is for dates to neighboring
nations. Dates are of very less demand in Western regions of the globe.
b.) Perishable Items- Animal Products: Meat, Dairy & Seafood
UAE import products in the Animal Products category include meat, seafood and dairy. Chicken
and lamb meat imports are UAEs largest sea freight imports in this category. Both Chicken
(110%) and Lamb (22.6%) saw increases in sea freight import value during 2006/07, with
smaller increases in total volume, reflecting the increased price for these commodities during the
period. Lamb imports by air also rose in 2006/07, but imports by air account for only 3.7% of the
total chicken and lamb exports. Over the last 5 years, sea freight lamb imports have been quite
consistent and at a high level. The dramatic growth in chicken imports during 2006/07 comes on
top of steady growth since 2000/01.

10

The other single largest Animal product commodity is Tuna, with 2006/07 sea freight imports
totaling $65,134,998 and 5,178 tonnes. This is well below the 2002/03 peak of $201,066,102,
with decreases in export value seen during the previous years. In addition to the sea freight
imports, Tuna is also imported by airfreight. Similar decreases were seen in both sea and
airfreight imports.
Frozen Prawns, increased in volume and value (7.0%) during 2006/07. Grated Cheese (including
Cheddar) remains an important dairy import by sea with yearly exports fluctuating between $36
and $49 million over the last 6 years. Cheese curd exports increased substantially during
2006/07. Imports are mainly from Denmark, Switzerland.
Grain: Wheat, Rice is UAEs single largest volume import commodity. Import volume and value
dropped across most major commodities in the grain category. Actually had an increase in import
volume for Rice and Wheat for the year 2006-07.

CHAPTER 2

Industry Profile

2. Logistics Industry
2.1 LOGISTICS (UAE - Middle East)
Logistics is the management of the flow of goods, information and other resources, including
energy and people, between the point of origin and the point of consumption in order to meet the

11

requirements of consumers. Logistics involve the integration of information, transportation,

inventory, warehousing, material-handling and packaging. In terms of value, global logistics
industry has been estimated to be more than USD 235 billion and make up significant part of the
GDP with regard to India. The Middle East is currently India's top export destination for
a burgeoning consumer electronics sector. Exports reached $175 million in 2005-06,
an increase of 96 percent over the previous year, according to the Electronics and
Computer Software Export Promotion Council (ESC). The growing trade reciprocity
with China, 63 percent of respondents to a recent China supplier survey, Middle
East Export / Import Opportunities, cited the Middle East as the next "hot" import
market for Chinese-manufactured goods.

UAE is now in a stage of transition from an import substitution closed economy model to an
outward oriented trade regime. The importance of logistics as an enabler of trade and economic
growth is worth mentioning. Massive improvement in infrastructure for transportation leads to
present and future development in trade, resulting in the economic growth of the nation. While
around Dh.200, billion of investments have been made during last 5 years to augment port
facilities in the country (UAE), equally massive investments have also been made in road
networks. The logistics/shipping/freight sector has received keen attention from both investors
and government.
On the positive point of view, new opportunities are opening up for the sector. Trade volumes
both overseas and inland are growing very fast. The pace of growth in the specialized sectors like
Liquid Natural Gas (LNG), Containers, Goods, Electronic Equipments etc. are comparatively
much higher. Integrated logistics and multimode transportation are opening up new business for
logistics/ shipping companies.

12

2.2 Logistics Management and Logistics Management Software

Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective forward and reverse flow and storage of goods, services and related
information between the point of origin and the point of consumption in order to meet customers'
requirements. A professional working in the field of logistics management is called a logistician.
Software is used for automating logistics activities which helps the supply chain industry in
automating the work flow as well as management of the system. Very few generalized software
are only available in the new market in the said topology. This is because there is no common
rule to generalize the system as well as work flow even though the practice is more or less the
same. Most of the commercial companies do use one or the other custom solution. There are

13

various software that are being used within the departments of logistics mainly in Conventional
Departments and for Container Trucking.
a. Business Logistics
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing
complexity of supplying one's business with materials and shipping out products in an
increasingly globalized supply chain, calling for experts in the field who are called Supply Chain
Logisticians. This can be defined as having the right item in the right quantity at the right time at
the right place for the right price and it is the science of process having its presence in all sectors
of the industry. The goal of logistics work is to manage the fruition of project life cycles, supply
chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus
(outbound logistics) covering the flow and storage of materials from point of origin to point of
consumption. The main functions of a qualified logistician include inventory management,
purchasing, transportation, warehousing, consultation and the organizing and planning of these
activities. Logisticians combine the professional knowledge of each of these functions so that
there is a coordination of resources in an organization. There are two fundamentally different
forms of logistics. One optimizes a steady flow of material through a network of transport links
and storage nodes. The other coordinates a sequence of resources to carry out some project.
b. Production Logistics
The term is used for describing logistic processes within an industry. The purpose of production
logistics is to ensure that each machine and workstation is being fed with the right product in the
right quantity and quality at the right point in time.
The issue is not the transportation itself, but to streamline and control the flow through the value
adding processes and eliminate non-value adding ones. Production logistics can be applied in
existing as well as new plants. Manufacturing in an existing plant is a constantly changing
process. Machines are exchanged and new ones added, which gives the opportunity to improve
the production logistics system accordingly. Production logistics provides the means to achieve
customer response and capital efficiency. Production logistics is getting more and more

14

important with the decreasing batch sizes. Even a single customer demand can be fulfilled in an
efficient way. Track and tracing, which is an essential part of production logistics - due to
product safety and product reliability issues - is also gaining importance especially in the
automotive and the medical industry.

CHAPTER 3

Company Profile

When it comes to supply chain management, the answer is:

Leadership, Innovation and Quality Solutions
What Nippon Express does:

Freight Movement
Cargo/ Freight Management Solutions

Full Truckload & Solution Providers

Contract Packaging & Other Services

15

Warehouse Operations (Outsourced) and Management

Logistics 3PL

3. Nippon Express Overall View:

3.1 Vision and Mission
Nippon Express: Best People. Best Processes. Best Value.
a. Vision
To become a leading freight, transportation, clearing and logistics company in the Middle
East. To be the recognized industry leader, through total commitment to customer service, by
maintaining our uncompromising integrity, in the support and development of our People,
Communications and Systems in sustained growth and profitability.
b. Mission
To set the standard for excellence in global logistics through total commitment to quality in
people and customer service, with superior financial results. To solve reliable transportation and
logistics services to the needs of the business community. Reliable services means on-time
delivery, undamaged goods, and correct documentation in case of deviations. To perform
continuous business improvement in order to meet and exceed customer expectation, To create

16

sustainable business growth in order to enhance the prosperity of employee and benefit
shareholders.
Decisions can impact the success of the company as much as the performance of the supply
chain. No matter what industry or region of the world other organization do business in, the
supply chain is an integral part to the success as same as the products, the services, and the
people. In 2002, Nippon Express, LLC was formed to build on the global distribution experience
to help other companies lower distribution costs while improving customer service and brand
loyalty.
Nippon Express is a technology-based company providing customized solutions that transform
distribution to a source of competitive advantage. Main motive is to provide integrated solutions
from managing transportation, inventory, and distribution centers to sophisticated forecasting,
information management, and network consulting services. Today, Nippon Express serves more
than 305 client companies, globally, in an array of different market sectors.
The organization mission is to provide best value, integrated freight and logistics solutions to
clients in time-sensitive, service-critical businesses. Organization tries to leverage and
continuously improve the capabilities. Our clients trust us and depend on our Best People and
Best Processes to help them succeed.
3.2 Nippon Express

Today, Nippon Express employ many professionals in their branch offices and in fields (Ports),
dedicated to helping freight, transportation, clearing, forwarding and logistics needs. Young,
energetic, professional, and passionate: their humble beginnings, satisfying customer needs has
been the driving force behind every Nippon Express employee.
Nippon Express provide these services around globally and main focus to UAE and
Indian markets
Nippon Express, focus on main areas they are:
a. Customer service to a higher level.
b. Partnering to seeking the right answers.

17

c. Finding solutions that optimize cost and service.

d. And always asking, how can we serve you better?
e. Analyzing every opportunity, every challenge to provide a custom solution that
works best for customer.

3.3

Continuous Improvement in the Organization

Nippon Express employees and other contracting people and other exceptional
people are the cornerstone of organizations service, they are experts in their fields.
Energetic, always looking for ways to drive cost out of the supply chain and all the
while working to improve the service. Initially from the beginning, organization has
hired only the best and brightest. The most committed. Every member of the team
is empowered to create and implement client-centered solutions. Deploying the
management team regionally means decision-making and is kept local, on-thescene. The team structure means good ideas can come from anywhere within the
company.
a. Customers need solutions now. Nippon Express get them on that moment.
With world-class technology as the backbone of the solutions and service.
Integrating systems and providing real-time information to help reduce cost
by moving the products of customers to market as efficiently as possible.
Organizations Can Do culture is rooted in customer service, flexibility and
innovation. Its been that way since the Nippon Express organization was

18

launched over 5 years ago. Organization has got a rich tradition of redefining
service for the supply chain management, freight management and logistics
industry. This commitment to quality customer service led Nippon Express to
become the third-party logistics provider to be certified by UAE as best
system standards. Today, the Quality Management System not only serves as
the foundation of the on-going Continuous Improvement in day-to-day
procedures, it also serves as the cornerstone of the Nippon Express. The
process driven approach to problem-solving helps the organization exceed
customers' expectations, as the organization helps tackle service and cost
issues within their supply chains.

3.4 Organization Functions:

a. Freight Forwarding
Departments typically arrange cargo movements to an international destination. This department
has the expertise that allows them to prepare and process the documentation and perform related
activities pertaining to international shipments. A freight forwarder organizes the safe efficient
movement of goods on behalf of an exporter, importer or another company or person, sometimes
including dealing with packing and storage. Taking into account the type of goods and the
customers delivery requirements, freight forwarder array, the best means of transport, using the
services of shipping lines, airlines or road and rail freight (Indian Markets) operators.
Functions:
i. Researching and planning the most appropriate route for a shipment. Taking account of
the perishable or hazardous nature of the goods, cost transit time and security.
ii. Arranging appropriate packing. Taking account of climate, climate, terrain, weight,
nature of goods and cost, delivery or warehousing of goods at their final destination.

19

iii. Obtaining, checking and preparing documentation to meet customs, excise and insurance
requirements, packing specifications and compliance with overseas countries regulations
and fiscal regimes.
iv. Offering consolidation services by air, sea, and road.
o Ensuring cost effective and secure solutions to small shippers with sufficient cargo to
utilize their own dedicated units.
o Liaising with third parties to move goods by road, air or sea in accordance with
customer requirements.
o Arranging insurance and assisting the client in the event of a claim.
o Arranging payment of freight and other charges or collection of payment on behalf of
the client.
o Transmitting data by internet and satellite systems, enabling real time tracking and
tracing of goods.
o Arranging charters for large volumes out of gauge or project movements by air and
sea.
o Acting as broker in customs negotiations worldwide to guide the freight efficiently
through complex procedures
o Arranging courier and specialist hand carry services
o Maintaining visibility and control through all phases of the journey, including the
production of management reports and statistical and unit cost analysis
o Acting as consultant in customs
o Maintaining current knowledge of relevant legislation, political situations and other
factors that could affect the movement of freight
o At more senior level, the role may also involve managing staff and overseeing
activities within a department or specializing in a particular area, such as sea freight
or air freight.

b. Logistics Field: Bulk Operations

The main function in this department includes identifying the customers and collecting
information about the amount of material to be exported, the product, place of exports. The

20

department also undertakes cargo booking, provides information on the rates, the schedules, the
arrival, departure time, name of the ship, transshipment details and does the follow up.
Functions
i. Identifying the customers by the marketing person of this department.
ii. Convincing the shipper of the services that company provides to be better than the other
shipping service providers.
iii. Enquire about the place or commonly referred to as the destination port to which the
shipper would like to export the cargo.
iv. Enquire about the type and quantity of the cargo, that he would like to export.
v. The type of container and the number of containers that the shipper would like to take.
vi. Analyzing the rate the shipper expects from his cargo movement .
vii. Informing the shipper the rate and negotiating with him.
viii.Scheduling the arrival and department time of the vessel
ix. Listing out the transshipment details and do the follow up.

c. Clearing and Forwarding (C & F)

The main function of C&F department is to undertake the customs formalities on behalf of the
exporters or importers. The documentation process and clearing activities are done by this
department.
Functions
i.

Preparation of various kinds of bill of entry and shipping bill.

ii.

Arrival and clearance of vessels.

iii. Determination of value for assessment.

iv. Conversion of currency.
v.

Nature and description of documents to be filed with kinds of bills of entry & shipping
bill.

vi. Procedures for assessment and payment of duties.

vii. Examination of merchandize at the customs stations.

21

viii. Prohibitions on imports and exports items.

ix. Re-importation and conditions for free re-entry.
x.

Check offences under the act

xi. Refund procedures, appeals and revision petitions.

d. Network Design

A Logistics Network Design initiative is a strategic analysis of entire supply chain.

Some of the strategic questions are:

To ensure enough facilities to meet future capacity requirements?

Which facilities should be closed and/or consolidated?

Is there an opportunity to make changes to the network to reduce logistics

costs?

Develop the Current Financial Model:

Before making sensible decisions on what changes to make the network, a base case financial
model needs to be developed. It should include the costs of all logistical activities such as
Warehouse costs, Transportation costs, Inventory costs and Order Processing costs.
Software Selection:

Due to the complexity of this analysis, a network optimization software package is in order. The
software selection phase may be completed concurrently with the financial model-building
phase above. One person on the project team should be responsible for sourcing the right
software to meet the projects modeling needs.
Data Gathering & Validation:

This is one of the key drivers to a successful project. It is imperative that the data from your
current data warehouse (transactional data) be accurate. For example, when an item is received
into the warehouse, are the correct product characteristics captured accurately? Some
characteristics of interest would be cube, weight, carton dimension, hazardous materials, etc.
One of the activities further into the project will be to create a summary of the product flows.

22

This is accomplished by creating family groupings of products. If the data is not clean the flows
will be misrepresented and this will affect the accuracy of the model.
Analyze Current State of Operations:

A throughput and capacity analysis should be completed for the existing operations. This will
help determine if there is additional capacity in the existing facilities or if there is excess capacity
available. This will help develop the scenarios later on. The impact to the other logistical
operations may then be identified.
e. Warehousing
A warehouse is a commercial building for storage of goods. Warehouses are commonly 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.
Most 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 inventory by recording warehouse transactions.
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.

23

The Warehouse are to be well guarded with safety provisions to counter pilferage, fire, floods &
other calamities. The Warehouses are in convenient locations & well connected by roads to
facilitate on time delivery to customers.

f. Crossdocking

Containerization
Crossdocking is a practice of logistics of unloading materials from an incoming semi trailer truck
and loading these materials to outbound trailers or rail cars, with little or no storage in between.
This may be done to change type of conveyance, or to sort materials intended for different
destinations or to combine material from different origin.
An increasing popular method of shipment is containerization. A container is a large box made of
durable material such as steel, aluminum, plywood and reinforced plastics. A container varies in
size material and construction. Its dimension is typically 8 foot high and 8 foot wide lengths
usually varying. A container can accommodate most cargo but is most suitable to packages of
standard size and shape. Containers can take case of most of 4 main packing problems. Because
of container construction, a product does not have to have heavy packaging, it gives protection
against:
i. Breakage

24

ii. Moisture
iii. Temperature controlled
iv. Pilferage and Theft
There are mainly 2 types of containers
v. Dry Containers
vi. Special Purpose Containers

Types / Size

20 Foot Dry

40 Foot Dry

45 Foot Dry

vii. Open top containers

viii. Flat rack for over sized cargo
ix. 40 foot refrigerated containers/ reefers
x. High cube containers (40 foot, 45 foot & Reefers)

25

3.5 Organization Structure

Organization is headed by Organization Head, and all other employees report to him. Firm
comprises of 12 employees for internal works and other team for activities including freight
forwarding, logistics, clearing and forwarding. Organization acts as a 3PL for other firms on
behalf of carry/ forward, logistics. Warehouse activities are being outsourced based on the
demand situations, as goods are being stocked in different warehouses, and is based on the
customer requirements.

26

3.6 Business Drivers

The following are the business drivers in logistical operation:
a) Cost Drivers: The average materials moved by manufacturers to export market is low, but
where as to import market is high in figure. The high technology portion reaches to 60%
to 72% of imports. Number of labour hours is a factor, tonnage of imports; size of
inventory, number of suppliers, number of batches, number of employees etc. are all
major concern in cost. Nippon Express keep a major favourable concern on the above, as
from the basic get-together of employees during the off peak hours in work. I was able to
figure out, employees were not happy with their present situations in office and in the
working hours. The situation has a major impact in operational stability. The situation
leads to lengthening/of delivery bills and other major invoice forms. As to managers
words, it is deciphered that situations are improving day by day. By using Activity Based
Costing (ABC) method of costing the organization can identify unprofitable warehouse

27

practices, other cost measures in logistics. If Nippon Express implement cost based on
ABC, the firm can improve and eliminate unprofitable situations, improve and implement
new facilities with much broader focus on future. To any organization cost reduction is
the ultimate method to get a much wider profit. As with the help of questionnaires and
through formal interviews with officials not many organizations have this generally. All
organizations will be implementing the cost method within the near future.

CHAPTER 4

Review of Literature

4. Review of Literature
a. Demand Chain Management
Understanding demand requires a comprehensive knowledge of your customers, You should
know what products / services are demanded by your customers; how do they make their
purchases, how often they order and what constraints they face on the purchasing process. Very

28

few companies have mastered this concept. Nippon Express was able to know all the above
concepts through considerable focus into customer needs and grievances.
b. Achieving Competitiveness in Logistics, Freight, Supply Chain

Reduced lead time, inventories, lower operating costs, product availability and customer
satisfaction are the benefits which grow out of effective logistics and supply chain management.
The decisions usually carried on by Nippon Express, cover both the long term and short term.
Strategic decisions deal with the corporate policies, and look at overall design and logistic chain
structure. Tactical, Operational decisions are those dealing with everyday activities and problems
of the organization. Change is the inevitable factor for each and every day situation within and
outside the organization. The decisions must take into account the strategic decisions already in
place. Therefore organization must structure the logistics ideas through long term analysis and at
the same time focus on every time situations. Furthermore, market demands, customer needs,

29

transport considerations and pricing constraints are the factors in order to structure the logistics,
freight. Nippon Express realized the fact and are prepared to face any unexpected situations like
inflation/ deflation in the economy, price factors, climatic problems etc.
c. Operational Fleet Routing & Loading

The organization derives routes in transportation are mainly long-haul (Optimization). For short
haul deliveries, there are ready solutions that are tightly integrated to warehouse management
systems (outsourced facility), to efficiently route fleets of vehicles and vessels and plan picking
and loading. Stipulated time windows for pick-ups and deliveries and vehicular weight and
spatial capacities would be used, as will constraints such as delivery within specified period
minutes upon pickup (useful for perishable goods). Time required at various stops - in terms of
fixed time to park and variable time dependent on amount to be loaded or off-loaded - can be
specified. Travel speeds along various types/zones of roads can be stipulated by traffic
information services. The organization schedules arrival and departure times for each stop can
thus be worked out quite accurately. Routes can be generated dynamically and ad hoc backhaul
or other opportunities can also be assigned to the most suitable vehicle. The benefits of
operational fleet routing include considerable reduction in fleet operating cost and improved
customer service with better estimated arrival time.
d. Vendor Managed Inventory
Vendor managed inventory, coordinated by an integrated logistics system, allows inventory to be
optimized together with transportation. Nippon Express try to know the product value as well as
storage capacity (mainly warehouse how much to outsource). As a routine job the company
collects information on consumption rate, current inventory levels, forecasted demand and status
of shipments. Thus the system can optimize the right quantities of replenishments to be sent at
the right time to ensure that service levels are maintained while minimizing cost of inventory and
transportation.
e. Mode of Transportation
Transportation generally is movement of product, goods, raw materials to different stages in
supply chain. Essentially in supply chain logistics plays a major role, the manner in which
product is moved from one location to another is through road, rail, truck, air, sea.

30

Nippon Express essentially uses only 2 modes for their operation they are air and sea. The goods
being delivered to end customer is brought to port or to the place through containers or other
methods like wagons, or cold enclosures like frozen storage. As in UAE rail transport does not
exist, so it has got a relevant drawback for the company, as company has to stick on road for
short routes and even routes between states of UAE and which is very much expensive and
increases the operational cost. Nippon Express strategically manage the procurement, movement,
and storage of materials, parts and finished inventory through the organization and its marketing
channels. Essentially from companies angle, there are two categories, initially inbound logistics,
i.e., handling goods that are brought into the company, through road transport and storing and
making them available. Another main phase is the outbound logistics, taking the cargo or the
goods through channels, and is being done with considerable effort to various parts of the world
as per the customer requirements.
i.

Intermodal Transportation System Used

This is the use of one or more than one mode of transport to move a shipment to
its destination. Nippon Express use this in an efficient way. Variety used is road
and sea in the case of organization. Referring to Global trade, this is the only
option as factories and markets may not be next to ports. It helps reduce cost in
operation. Helps reduce cost that cannot be matched by single mode. Essentially it
is very convenient for shippers as well as consignee.

ii.

Attributes: The price charged is reasonable with regard to the consignee, as

organization has got a long term relation with all the customers. Usually goods
being transported are electronics and frozen stocks from warehouse. The relevant
focus is on warehouse, transportations services offered. Service is another aspect
which focuses the advanced need of the customer, initially with proper timing
maintenance, order management. As the consignee is offered service by 3PL like
Nippon Express with favorable order management, and ease of doing business is
attained by logistics organization like Nippon Express.

f. The Challenge Faced by Organizations

In todays world, competence is taking on new dimensions. The ability to compete is being
determined by the degree of responsiveness to customers and key issues handling. How fast you
deliver the goods/ products, what the price paid by customers and what value customer is getting

31

throughout the service is considered in a schematic and ordered way. Markets are quick
demanding and customization of each logistics activities is essential for each customer, and has
become the essential factor in logistics management.
Nippon Express faces lot of ups and downs in each operation and improves operation on each
situation while dealing with each customer. Nippon Express dominant improvement methods
used are:
i.

What are the customer expectations?

ii.

How are your competitors performing in each aspect of operations?

iii.

Determining the gaps in each phase and try to fill it.

g. Economic Ordering Quantity (EOQ)

Efficient order quantities consider the Purchase Order Cost (POC), the Annual Demand rate
(AD), the Inventory Carrying Rate (ICR), and Unit Inventory Volume (UIV). Large Order
Quantities yield high inventory levels and high inventory carrying costs but fewer orders and
lower ordering costs. High ordering costs and demand rates suggest large order quantities. High
ICRs and high unit inventory values suggest small order quantities.
Generally during research the analysis shows, few organizations believe EOQ analysis is
outdated and quite few with enhanced focus on it. There is relevant need for EOQ in this era.
EOQ analysis should be completed as a part of any inventory strategy. The analysis suggests
appropriate reordering intervals for all items each organization is handling. Competitors focus on
reducing the costs of placing purchase orders. The lower the purchase order cost, the more
economical it becomes to order in small increments and the less inventory will be there in the
system. The purchase order costs is typically dominated by the labour and paperwork costs of
planning, negotiating, executing and tracking purchase orders. Large number of organization
extent to which these functions can be automated via automated purchase order planning, eprocurement, online catalogs, online bidding and online exchanges, is the extent to which
inventory levels and lost sales costs may be reduced in the supply chain and there to the
efficiency of logistic operations. Nippon Express has a considerable drawback in this scenario
comparing to the other firms. Cost is high in this situation for ordering costs to the firm.

32

4.2 Studies on Inventory, Back Order, Lost Sales, Stock Outs, Packaging and Packaging
Materials, Documentation from Nippon Express .
a. Inventory
Inventory is a list for goods and materials, or those goods and materials themselves, held
available in stock by a business. Inventory are held in order to manage and hide from the
customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease
the effect of imperfections in the manufacturing process that lower production efficiencies if
production capacity stands idle for lack of materials.
There are three basic reasons for keeping an inventory:
i.

Time - The time lags present in the supply chain, from supplier to user at every stage,
requires that you maintain certain amount of inventory to use in this "lead time"

ii.

Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand,

supply and movements of goods.

iii.

Economies of scale - Ideal condition of "one unit at a time at a place where user needs it,
when he needs it" principle tends to incur lots of costs in terms of logistics. So Bulk
buying, movement and storing brings in economies of scale, thus inventory.
[The Management of Business Logistics, Coyle, Bardi, Langley]

b. Back Order
A company having to back order an item that is out of stock will incur expenses for special order
processing and transportation. The extra order processing traces the back orders movement, in
addition to the normal processing for regular replenishments. The customer usually incurs extra
transportation charges because a back order is typically a smaller shipment and often incurs
higher rates. The seller may need to ship the back ordered item a longer distance. The seller may
need to ship the back order by a faster and more expensive means of transportation. We could
estimate the back order cost by analyzing the additional order processing and additional
transportation expense. If customers always back ordered out of stock items, the seller could use
this analysis to estimate the cost of stockouts. The seller could then compare this cost with the
cost of carrying excess inventory.

33

[The Management of Business Logistics, Coyle, Bardi, Langley]

c. Lost Sales
Most companies have competitors who produce substitute products, and when one source does
not have an item available, the customer will order from another source. In such cases the stock
out has caused a lost sale. The sellers direct loss is the loss of profit on the item that was
unavailable when the customer wanted it. Thus, a seller can determine the direct loss by
calculating profit on one item and multiplying it by the number the customer ordered.
E.g.: If the order was 100 units and the profit is 10$, the loss is 1000$.
If the effort is made by a sales man and if the effort is wasted and in that sense it is an
opportunity loss. Whether including such a cost is valid would depend upon whether the
company uses sales people in its marketing effort.
Another aspect is determining the amount of a lost sale may be different and difficult in certain
circumstances. Numerous companies customarily take orders by telephone. A customer may
initially just enquire about items availability without specifying how much is desired. If an item
is out of stock, the customer may never indicate a quantity and the seller will not know the
amount of the loss.
d. Stockout
Cost incurred to a firm when current inventory is exhausted for one or more items. Lost sales
revenue costs are incurred when the firm is unable to meet current orders because of a stockout
condition.

e. Packaging and Packaging Materials

Mainly this is a main division in warehouses. Packaging interacts with the logistics system in
number of different and important ways. The size of and protection afforded by the package
affect the type of materials handling equipment used and the level of product damage incurred.

34

The package has an impact on the stacking height of the product in the warehouse and thereby on
the utilization and cost of the warehouse. Packaging is quite important for effective damage
protection, not only in the warehouse but also during transportation. Packaging may contribute
nothing to a products value but its influence on logistics costs is considerable.
Packaging size may affect a companys ability to use pallets or shelving or different types of
materials handling equipment. Many companies design packages that are too wide or too high
for efficient use of either a warehouse or transportation carrier. So, coordinating packaging with
warehousing and with transportation is quite important. We need to note, poor packaging can
contribute to higher handling charges and result in lower future sales if the goods arrived
damaged.
Two types of packing exist: consumer packaging and industrial packaging. Consumer
packaging provides information important in selling the product. i.e. giving the product most
visibility when it comes with others on the retail shelf. On the other hand industrial packaging is
of primary concern to the logistics. The packaging protects goods that a company will move to
store in the warehouse and also permits the company the effective use of transportation vehicle
space.
Materials generally used in previous years was wood and other harder materials for no
breakage, but it added considerable shipping weight to the transport and it further increased
transportation cost. Generally new era has come up with efficient packaging materials,
organization nowadays use most cost effective packaging with focus on security and minimizing
cost. Cushioning materials protect the product from shock, vibration, and surface damage during
handling. Cushioning materials include shrink wrap, air bubble cushioning, cellulose wadding,
and plastics. Companies often use shrink wrap for consumer packaged goods. Packaging also
helped reduce pilferage and product tampering in warehouse and during transport. Air bubble
cushioning is made of plastic sheets that contain air pockets. There are other factors while
considering packaging they are environmental protection. They are considered in situations of
perishable items like food and drugs.

35

CHAPTER 5

Research Methodology
5.1 Objective of the Study:

To compare the effectiveness of logistics management at Nippon Express and to bench

mark the organization with respect to the industry.

To have a thorough understanding of how logistics and freight industries work.

To identify the drivers behind Logistics and Freight.

5.2 Research Problem:

The need for the study was to assess the effectiveness of Logistics Management in the Nippon
Express, compared with other organization in the same industry. The organization also needs
relevant data as to how it can improve its management policies in order to gain future market
share.
5.3 Research Methodology:
The type of research is analytical. Data regarding the division of logistics management such as
Freight, Warehousing, Crossdocking, Network Design etc. in which Nippon Express are at
present in business were collected from other similar firms in the industry. The indicators
selected are ease of service, client handling, customer service, website information, employee
efficiency in general. Other indicators for the freight and warehouse divisions are lead-time,
inventory management, product availability; time elapsed in transit, operating cost and customer
satisfaction. The collected data was analyzed and performance of Nippon Express was evaluated.
As to my study I believe I have selected the right mix of techniques for the comprehensive
approach, which can be suited well for the organization.

36

5.4 Sample Selection:

Convenience sampling is used for study, as I am interested here in getting an inexpensive
approximation of the truth. Operations of Nippon Express are mainly concentrated at large scale
AL-Hamriya Port, Dubai and having its branch office in Mumbai. The total numbers of logistics
organizations in and around this port are 6000 in number, which constitutes the population.
Similar, 100 organizations having major operations in the Freight and Logistics have been
selected as sample for the survey. The selection was based on the sampling said above.
5.5 Method of Data Collection:
Primary Data: The major tool used was interview with managers and staff of the branch office,
questionnaire was developed focusing various aspect.
Secondary Data: Books of Logistics Management for literature reference, Internet Web Portals,
Websites of each firm, Company Brochures.
5.6 Statistical Tools:
Percentage Analysis
Bar Diagrams
Pie Charts
5.7 Limitations of Study:

A few organizations did not publish the exact values for each question especially in sales
turnover and other similar figures.

The study was conducted in the Mumbai area only aiming at the main Dubai Centre and
confined to the freight division of the logistics management.

Certain monetary values were not being filled by organizations.

Due to organizations security reasons documents like Bills, Warehouse Bills, etc could
not be gained.

Most of the questionnaire answers were filled over internet email facility; therefore
contact was through phone and emails.

37

CHAPTER 6

Data Analysis and Interpretation

6. Data Analysis and Interpretation

The data collected through the questionnaire are analyzed to know about the respondents
opinions about various particulars asked in the questionnaire. The data collected from the
questionnaire was entered into spread sheet and the data has been interpreted. The questionnaire
comprises of fourteen questions with subparts for each.
The topics covered are with decisions of each operational area, employee numbers of each firm,
profitable area in operation, catering location, service offering, organizational effectiveness,
inventory, location, product availability and customer satisfaction.

38

a) Which are the logistics services organizations offers?

Table -1 Service Offer
Sl. No.

Service

Percentage

Freight

100

2
3
4

Warehousing
Crossdocking
Network Design

89
88
66

Value Adding

98

Chart-1 Service Offer

The
pie
chart
above
shows
the
service
offer
of each
organization. The chart shows that 100% of the respondents provide freight service and
almost 90% provide Warehousing and Crossdocking. Only 66% were providing service of
Network Design. Other service includes value adding, which represents 98% of the sample. It
includes packaging, labeling etc.

39

b) Operating with other logistical providers and reasons for decisions.

Table -2 Operate With Logistical Providers
Sr. No.
1
2
3
4

Decisions
Operational Stability
Cost Effectiveness
Customer Needs

Percentage
11
10
36

Other

96

Chart-2 Operate With Logistical Providers

The pie
chart
above
shows
the
operational decisions and reasons for operations with other logistical providers. The chart
shows that 96% of the respondents operate with other service providers for different reasons
like coordination, clearance, bulk operations etc. Almost 36% have operations with other
providers as per customer needs. Only 11% and 10 % were providing service along with
other providers for the purpose of operational stability and cost effectiveness respectively. It
is stated that 96% of organizations operate with other logistical providers and remaining 4%
as standalone.
c) What is the mode of decisions regarding the operations?
Table-3 Mode of Decision

40

Sl.

Operational Decision

No.
1 Strategic

Percentage
37

Tactical

88

Operational

63

Chart-3 Mode of Decision

The

pie

chart

above shows the

mode

of

decisions regarding the operations. The pie chart shows 88% of organizations take tactical
decisions followed by 63% with operational decisions and 37% strategic decisions. Most of the
organizations have a mixture of all the decisions in their day to day as well as in long and short
term plans.

d) Which is the area of the activity, that organizations feel best in their service?
Table-4 Best Activity
Sl. No.

Service

Percentage

Freight

98

2
3

Warehousing
Crossdocking

86
87

41

Network Design

Value Adding

97

Chart -4 Best Activity

The

pie

chart

above shows the

best activity which
organization feels
in their operations.
The

pie

chart

shows 98% of organizations have freight in the predominant area, followed by 86% of
warehousing. Another significant area is Crossdocking with 87% as best activity. There is only a
minor activity based on network design with 4% in pie graph. Most of the organizations have a
mixture of all the activities in their day to day and 97% of organization says other activities bring
in more revenue and the best of their activities, which includes packaging, labeling etc.

e) Number of employees in each type of the service rendered of the organizations

Table-5i Employees
Sl.
No.
1
2
3
4
5
6

Departments In Organizations
Top Management
Operations
Accounts / Finance
Marketing
Human Resource
Documentation /Others

Number of

Percentage

People in Each
452
468
451
517

11
11
11
13

371
1847

09
45

42

Table- 5ii Employees in Nippon Express

Sl.
No.
1
2
3
4
5
6

Nippon Express : Departments

Number of

Percentage

People
3
4
4
3

14
18
18
14

0
8

0
36

Top Management
Operations
Accounts / Finance
Marketing
Human Resource
Documentation /Others

Table-5iii Employees % of both.

Top
Manage
ment
Nippon
Express
Employees
Percentage
Other
Organization
Employees %

Operati
ons

Acc./Finan
ce

Marketin
g

HR

Docu
ment
ation/
Other
s

14

18

18

14

36

11

11

11

13

45

Chart-5i Employees

The
line
charts
above
shows
the

comparison of employees in each functional division of organization with Nippon Express. The
line chart shows around 14 percentages of people belong to top management and industry

43

standards has 11 percent, followed by 18% for operations and industry standards has 11%.
Human Resource has to be enhanced and need to be further improved or need to start in the
organization. Documentation also needs to be further strengthened. Marketing comprises of 14%
working in the said area. Most of the organizations have a mixture of top management with
marketing in their activities and functional area. Human Resource comprises of 371 people and
other main area is documentation and workers in the areas of loading, operational area. This
comprises of only 36% and industry standards are of 45%.

f) What are the locations to which the company caters to?

Table- 6i Catering Locations
Sl. No.
1

Catering Locations

Percentage
100

Asia

Europe

3
4

USA
Australia

89
86

Africa

71

6
7
8

Russia
Middle East
Other

98
98
90

Table 6ii Catering Locations

Asia
Nippon
Express
Other
Organizati
ons

Europe USA

Austral
ia

Africa

Russia

ME

Othe
r

100

100

100

100

100

100

100

89

86

71

98

98

90

44

Chart- 6i Catering Locations

Chart 6ii
Catering
Locations

The pie chart above shows each organizations catering location in the world. The chart shows
100% of organizations cater to Asian region followed by 6% to Europe and 89 % to USA. Each
organization has tremendous catering locations with 86% to Australia, 71% to Africa, 98% to
Russia, 98% to Middle East, and 90 % to other locations. Locations mentioned as other is
company catering frequently with repeat orders of customers. Chart 6ii shows Nippon Express
can enter European markets and other favourable market is Africa. This can be looked into very
seriously in future business.

45

g) Which division of logistical activity earns the maximum rate of profit for each
organization on a scale of 1-10 and overall profit of each organization?

Table-7i -Maximum Rate of Profit (Nippon Express Compared with Industry Average)
Profit Scale (1 - 10)
Nippon Express
Profit Scale
Industrial Profit
Average

Freight

Wareho
using

Crossdocki
ng

Network
Design

Othe
r

6.41

Chart-7i - Maximum Rate of Profit

46

Table-7ii Profit of Organization (All Services Combined)

Profit Level in
Percentage

Nippon Express

Industry Standards

13

15.39

Chart - 7ii Profit of Organization (All Services Combined)

The bar chart
shows

each

organizations
maximum
rate of profit
in each area on scale of 1-10, where 1 denotes least profit and 10 denotes the service that fetches
excellent profit. The chart shows Nippon Express has ample amount of profit in Freight area
followed by Crossdocking and other value adding activities with 9 and 6 in scale. The chart 7i
shows industry average value is 7 for freight followed by 6.41 for warehousing. It is inferred that
freight is giving ample amount of profit and Cross-Docking, Other including labeling and
packaging has industry standards. The chart 7ii shows profit percentages said by each
organization. We can infer that overall profit percentage for Nippon Express has 2.39
percentages lesser compared to industry average. The organization should implement more
strategies to reach industry mark.

47

h) Comparison of service offered by Nippon Express and rating of other organization in the
industry on a scale of 0- 4.
Table-8 Service Comparison (Scale 0-4)

Nippon Express
Industry Average

Ease of
Service
3
3.84

Client
Handling
4
3.76

Customer
Service
4
3.82

Website
2
3.29

Employee
Efficiency
3
3.83

Chart-8 Service Comparison

The
chart

shows Ease of Service is not up to the mark, it shows only 3 for Nippon Express and the
industry standards is 3.84. So organization can increase their Ease of Service. Client handling
is satisfactory compared with industry standards. Customer service also has remarkable value
compared with industry. Major area to look into is Website easiness, Employee Efficiency. It
can be brought up with a considerable effort by proper handling of human activities by
Human Resource Department.

48

i) What is the significant lead-time for each service rendered with previous years data of
each organization?
Table 9ii Lead Time in Days
LEAD TIME IN
DAYS(LT)
Nippon Express
Industry Average

Freight LT

Warehou
sing LT

Crossdo
cking LT

Network
Design LT

Other
LT

21
23

20
22

30
24

0
10

21
24

Chart 9ii Lead Time in Days

The
above
chart
shows
the

service executed last year in logistics area and the significant lead-time of each area. The chart
shows 4122 numbers of freight service jobs has been executed with average lead-time of 21
days. Similarly warehousing jobs with 224 and lead-time of 22 days. While comparing with
industry standards Freight is dominating and similarly the main lucrative area is other
(Packaging, Labeling etc.), which has 833 in number and 21 days lead-time. Organizations leadtime is excellent except for Crossdocking. Focus should be to reduce lead-time and increase
more service.

49

j) Average elapsed time between order receiving and delivery of the service (Inventory).
Table-11 Elapsed Time

Elapsed Time

Nippon
Express
3

Industry Standards
6.9

Chart- 11 Elapsed Time

The above
chart
shows the
physical

verification check and average elapsed time between order receiving and delivery of the service.
The chart shows 89% of organizations have physical verification. Average elapsed time between
order receiving and delivery of service has an average of 6.9 days. The total value of elapsed
time is 613 days for 89 organizations, hence the average days are 6.9 as explained in the figure
for Industry average. Nippon Express elapsed time is remarkable compared to industry standards.

k) Were there any shortage/ excess of stocks noted, in the last verification done?

50

Table -12i Inventory Shortage

Inventory Short

Nippon
Express
12

Industry
19.8

Chart-12i Inventory Shortage

Table- 12ii
Inventory
Excess

Inventory
Excess

Nippon
Express
0

Industry
4.8

Chart-12i Inventory Excess

The

above

charts

show

the Inventory
Excess

and

Shortage faced
by
organization during verification. It is evident that shortage faced by Nippon Express is less
compared to industry standards; there is a difference of 8. Another aspect is regarding the excess
of inventory; in this scenario, Nippon Express has a remarkable lead with comparison to
industry.

l) Average number of customer complaints generated and industry average.

51

Table- 14 Complaints (Nippon Express with Industry Average)

Complaints Generated Last

Year

Nippon Express
290

Industry
Average
179.71

Chart 14 Complaints (Nippon Expresswith Industry Average)

The above chart

shows average
number

of

complaints. The
complaints for
Nippon
ExpressF&L is
290 and whereas to industry average is around 180 in number. Hence organization should try to
reduce the complaints arising. This can be achieved by increasing new modern methods and
facilities to customers. Organization need to heavily focus onto the issue to reduce number of
complaints arising in operations, customer satisfaction and other similar areas.

m) How does the organization follow up to retain customers.

Table-15 Customer Retention
Sl. No.
1
2
3
4

Service
Customer Complaints given preference
Phone
Service Intimation
Gifts

Rating
100
100
100
3

52

5
6
7

Email
Fax
Other

100
11
100
Chart-15 Customer Retention

The above
chart
shows
preference
of
complaints
and

how

organization follow up to retain customers. Its been noted that cent percent of organization
follow up with customers for customer complaints. Most of the preferable methods for
contacting customers for new service intimation and customer realtionship are telephone, email
and other methods like marketing / sales, customer office visit with 100 rating. The least
preferred are gifts and fax with 3 and 11 in rating.

n) Does the organization has proper system for handling customer handling, and does
customer know whom to contact when a problem arises, ascertain the level of
satisfaction, feedback by customer and is customer suggestion given preference in the
organization?
Table- 16 Proper System
Sl No.

Service

Rating

Proper System

100

Customer Know

100

53

3
4
5

Contact Whom
Customer Feedback
Customer Suggestion

94
88
83

Chart-16 Proper System

The above chart

shows all
organization in
sample has propers
system for handling
customer
complaints. Its been
revealed that 100%
from sample, customers know the sytem of handling customer complaints in the firm. Whom to
contact in case of complaints is having rating of 94. Customer feedback and customer suggestion
is having rating of 88 and 83 respectively.

CHAPTER 7

Findings and Suggestions

Findings
i)

The quality of service as rated is above average in the case of Nippon Express
compared to industry. But the organization should continuously try to improve the

54

quality aspect as is being done by other players in the field. This is quite a necessity
as otherwise the figures may fall down. Continuous improvement is a must so that the
customers will prefer Nippon Express as their first choice in Logistics and Freight
industry category. This can be achieved with more modern equipments and proper
guidance to employees and the rating can go high to excellent service.
ii)

Pricing of service is satisfactory, which organization can further enhance with proper
management. Present employee strength is satisfactory compared to other
organization but more focus should be made to documentation areas where the firm
has lesser employees compared to other organizations.

iii)

Network Design is an area that the organization should not start immediately due to
low rate of returns is recorded as the industrial average . Design of new warehouse
areas and proper allocation of work with more sophisticated software facility can be
done through outsourced way during implementation.

iv)

Decision making is excellent for organization with respect to other organization in the
industry.

v)

Operation with other logistical providers should be given more preference to achieve
cost effectiveness.

vi)

Rearrangement of employees may be a better solution. Down sizing of personnel in

the Finance and Accounts section and deploying them for the HR function separately
is recommended.

vii)

The organization client handling, ease of service and customer service is having
remarkable difference from the industry standards. The main focus need to be on the
ease of website and employee efficiency. From the data we can infer that areas which
need to be improved are Website and employee efficiency. Employee efficiency can
be improved with a proper Human Resource department.

55

viii)

Service offer presently has good impact with other organizations service offers. The
remarkable areas are Freight, Crossdocking, and Value Adding. Company can further
enhance operations of Value Adding through proper methods.

ix)

As logistics industry is concerned Freight is the dominant service followed by

Warehousing and Cross-Docking. Another important area where organizations feels
very lucrative is Value Adding .

x)

It is observed that most of the organizations operate with other logistical providers.
96% of organizations are doing it and remaining 4% organizations stays independent.
It is inferred that for efficient logistical activity, support from other organizations is
essential.

xi)

Tactical decisions are mostly followed by organizations followed by operational and a

few strategical.

xii)

Freight and Value Adding is considered to be the best service which organizations
offer in industry. Another major observation is about Network Design, it has low
value and no organization feels it to be lucrative area in industry.

xiii)

Organization can enhance operations to European areas and another major favourable
area is Africa. From data Nippon Express can get good market share if they cater to
African regions.

xiv)

Organization profit is good compared to industry standards for freight and can further
work on warehousing. This shows a difference of 2 points from industry standards.
Whereas for Cross Docking it shows same as to industry standards.

56

xv)

Commenting on ease of service, website and employee efficiency, the organization

needs to further improve.

xvi)

Freight Service when compared with other industry freight service has got more
value. Warehousing has a difference of 30 and is negligible but Cross-Docking need
to be reviewed. Another favourable area as mentioned earlier is Value Adding and it
shows a difference of 447 works done compared to industry standards.

xvii)

From the observation 89 organizations have inventory verification. The lowest

observed days for elapsed time for Nippon Express are 3 days and industry standards
with 6.9 days. Hence it is a remarkable value for Nippon Express

xviii) In the sample taken only a few organizations has inventory short and excess. Values
are 119 and 29 for shortage and excess. Nippon Express had shortage, but no excess
in inventory and while comparing with industry Nippon Express have remarkable
value.

xix)

The efficient methods for retaining customers are Phone, Email, Sales Agents and
least preferred methods are Fax and Gifts.

Suggestions
i)

Organization can further strenghten the employee strength in the documentation

department. This can lead to further rapidity for operations.

57

ii)

Organization can initiate Human Resource Department to further enhance

employee motivation. This will have favourable impact for the operational as well as
total strenghtening of organization

iii)

Decision making is quite effective and can be followed for future operations

iv)

Operations with other logistical providers need to be enhanced further for

operational effectiveness, more focus should be given to customer delight and cost
effectiveness.

v)

Quality of service can be further enhanced to increase customer delight.

vi)

Client handling and service need to be followed in the same way and can be
further enhanced with more support. This can be achieved by proper guiding of
employees and other workers in the logistical area

vii)

Nippon Express can enter other markets in the Middle East especially to Saudi
Arabia where the potential of market is very high for Logistics industries and can
even diversify to other areas in logistics.

viii)

Nippon Express can focus to African regions for freight handling, as from the data the
potential market is high for those regions.

CHAPTER 8

Conclusion

58

Conclusion
The universe everyday is witnessing unimaginable growth in majority of the industries. The
logistics and freight industry is one such industry that is rapidly growing. Worldwide logistics
industry is distinguished by fast technological advances and is growing rapidly than
most other industries over the past years. With stiff competition around, the
company is likely to reduce the profitability But with proper management of
operations and by proper customer desired services, and also effectively utilizing its
alliances it can maintain and improve the performance. Joint operational ventures
for developing the customized services for its steady growth. The organization has
enormous opportunities to grow beyond the expectations.
Nippon Express has come a long way from being just a service provider. The
organization now has the value of being an ultimate service provider for Freight,
Transportation, Cross-docking and Value Adding as per customer needs. The present
scenario and the future of the organization with regard to the management are
satisfactory. The organization can increase the market share by improving with
more state of art technology. The organization can diversify into related other
business areas like Warehouses for lease to other organizations, state of art
technology providers for other organizations. More importance is to be given for HR
development by having a separate department for it. With the development of such
a department, several favourable impacts such as increase in out put per employee,
increased loyalty, team spirit etc can be generated.

As far as Nippon Express is concerned it can be stated that through its excellent service and
aggressive logistics service, organization has shown a noticeable increase in the market share.
However, there are some areas where the company is not at the top-most position but it can
certainly gear up in the near future and is committed to acquire that spot. On implementation of
the above recommendations, the management can lead Nippon Express to the top most position
when bench marked in the coming years.

59

CHAPTER 9

Bibliography

Bibliography
Reference:
a) Logistical Management Tata McGraw 2000 Edition.
Written by Donald. Bowersox, and David. Closs.
b) The Management of Business Logistics 7th Edition:
Written by Edward J. Bardi, C.John Langley, and John Joseph Coyle
c) Logistics and Supply Chain Management: Creating Value - Adding Networks
Written by Martin Christopher.
Websites:
i)

Source: http://www.idsc.com.sg/images/service_logistics_img1.jpg

ii)

http://www.indexuae.com/Top/Business_and_Economy/Services/Logistics

60

Annexure

Logistics Survey
------------------------------------------------------------------------------------------------------------Details of the Organization
Name: ___________________________________________________

61

Location:_________________________________________________
How long are you there in Business? _____________________Years _______________
---------------------------------------------------------------------------------------------------------------------

1. a) Which are the various Logistics Services you offer?

Freight

Warehousing

Network Design

Crossdocking

Other Value Adding Services if any

2. Number of employees in each type of the service rendered

S Divisions /
l.
N Functional area
o.
1

Top Management

Operations

Accounts/Finance

Marketing/Sales

Human Resources

Others if any

Number of Employees in your various

logistics division
Freight

Warehou Network Crossdocki Other

sing
Design
ng

3. Which is the area of activity; you feel you are the best?

Freight

Warehousing

Crossdocking

Total

62

Network Design

Other Value Adding Services if any

4. Which division of logistical activity earns the maximum rate of profit?

Rate them on Scale of 10

(Best 10 Average 5 Worst 0)
Freight
Warehousing
Crossdocking
Network Design
Any Other
(specify)___________

5.

a) What are the locations to which your company caters to?

i) Asia
ii) Europe
iii) USA
iv) Australia v) Africa
vii) Within Middle East only
viii) State if any other locational specialization

vi)Russia

___________________________________
___________________________________

b) Please rate the service offered by your organization

Excellent

Good

Fair

Poor

Very Poor

63

Ease of Service
Client handling
Customer Service
Website Information
Employee Efficiency

d) What is significant lead time in days for each consignment and Number of service
executed last year. (Kindly mention with previous years data)

i)Number of
Service Executed
in last year (2007)
Service

ii.) Number of transport

orders that have been
executed, such that the
delivery is on time as per
the agreed lead time?

Freight
Warehousing
Crossdocking
Network Design
Value Adding
Note: Kindly mention the answers with last years data (2007) from questions 10 to 12.

10. Inventory
a) What is the average elapsed time between the time of receiving order from the
customer to your firm to release the item from the ware house and the time the item
is ready for moving from the ware house with proper documentation.
________________________ Days

64

ii)

Were there any shortage / excess of stocks noted, in the last verification
done?
No shortage / excess of stocks noted
Shortage of stocks noted

Excess of stocks noted

11. Customer Satisfaction

a) Is customer complaints given preference in organization:

Yes / No

b) How your organization follow up to retain the customers

(Put Number 1 on desired coloumn)

No.

Method

Phone Call

New Service Intimation to Customers

Gifts

Email

Fax

Other methods if any ________________

Number

c) What is the total number of customer complaints received in each division last year?
______________Number

d) Do you have a proper system of handling customer complaints?

Yes / No

65

e) Do you have a system of contacting customers after completing all the formalities of
an order, to enquire whether they have any complaint and to ascertain the level of
satisfaction the customer enjoyed?
Yes / No

f) What is the number of customers you had business last year?

_________________ Numbers

g) Out of the above how many are there who availed your services repeatedly?
_________________ Numbers

h) How many of them avail same services from others (your competitors) as well
_________________ Numbers