1

BBA LOGISTICS MANAGEMENT

UNIVERSITY OF PETROLEUM & ENERGY

STUDIES

Dissertation

Report 2015

2

Dissertation Report on

Selection of Efficient Logistics or 3PL service

Providers

Under The Guidance Of

Submitted By:-

Ankit Kumar Ray

BBA-LM

R.No. R380212004

SAP ID 500021942

BBA LOGISTICS MANAGEMENT

Collage Mentor

Prof. Loveraj Takru

Professor & HOD

LSCM-COMES

3

DECLARATION

This is hereby to inform you that this report is very original in every sense of

the terms & condition and it carries a sense of responsibility and faith that no

shortcuts is been taken and I remain dedicated towards the accuracy of this

research. I have made in my best effort to keep this work simple and precise.

This is to be stated that during the preparation of this report some help was

taken from a web of professionally interchanged information and knowledge, a

detailed description which is to be mentioned in the reference of this report.

Date:

Signature:

Ankit Kumar Ray

R380212004

BBA- Logistics Management (2012-2015)

University Of Petroleum and Energy Studies

Dehradun, Uttarakhand

4

ACKNOWLEDGEMENT

I will truly express my deep gratitude, from the bottom of my heart to my

parents for always believing in me at each point of my life and helped me a lot

to be positive, motivated and determined throughout my project.

I am really thankful to my mentor Prof. Loveraj Takru who despite being busy

in his own assignments, guided me through my project provided valuable

suggestions and his experiences has helped me a lot in analysing different

aspects of my project.

Last but not the least I would like to thank my colleagues who supported me in

this project.

Ankit Kumar Ray

R380212004

BBA- Logistics Management (2012-2015)

University of Petroleum & Energy Studies

Dehradun, Uttarakhand

5

PREFACE

Bachelor of Business Administration (BBA) is a professional course which

brings the theoretical and practical aspcts of various contents in the field of

management together. As a mandatory feature of this course, every BBA

student has to prepare a final dissertation by himself which is to be submitted

for the completion of the degree. The ultimate idea of this project in to bring out

the appropriate model for the efficient selection of 3pl or logistics service

providers. It is very much important in improving the competitiveness of the

company and has a positive effect on expanding the life timre of the company.

Nowadays India is rising as a manufacturing base and many national and

international brands are focusing on to reach more and more customers and they

can only achieve this by having an efficient flow of goods and for that they need

to have a team of professionals who can effectively manage their flow of goods.

Professionals will also be helping them to make their products available at right

time, on right place and also at right cost and the manufacturers can simply have

them by outsourcing their logistics operation to some other firm to gain the

logistics expertise to make their products available whenever the demand arises.

Ankit Kumar Ray

R380212004

BBA- Logistics Management (2012-2015)

University of Petroleum & Energy studies

Dehradun, Uttarakhand

6

INDEX

1. Abstract…………………………………………………….7

2. Chapter1- Introduction……...…………………………….9-14

1.1 Logistics ……………………………………………9-10

1.2 Logistics Service Providers…………………………11

1.3 Logistics Environment in India……………………..12

1.4 Problem……………………………………………...13

1.5 Context…………………………………………........14

3. Chapter 2- Literature Review…………….………………..15-18

4. Chapter 3- Research Methodology………………………...19-20

3.1 Objective.………………………………………………20

3.2 Research Design………………………………………..20

3.3 Data Analysis or Collection……..……………………...20

5. Chapter 4- Selection and Evaluation Techniques………….21-29

6. Chapter 5- Selection of Lsp’s in India……………………..30-35

7. Chapter 6- Analysis…………...…………………...……36-40

8. References………………………………………………….41

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ABSTRACT

Nowadays, more and more companies are outsourcing their logistics and supply

chain operation so that they can concentrate on the core qualities to increase

their market share and gain more profit. But the major problem which they are

facing while outsourcing their logistics operations is “How to select the

Efficient Logistics or 3PL service providers” who can give a promising flow of

their products and also on which they can rely for their logistics and supply

chain operation. The experts also agrees that there is no best way exists to

evaluate or select logistics service providers, and thus organizations use a

variety of approaches. The major motive of the lsp evaluation process is to

reduce the risk and maximizes overall value to the purchaser. As the logistics

sector is booming in India and various organisations are emerging in this

logistics business. The selection of efficient logistics service providers

nowadays has become very difficult for the manufacturers as most of the

companies are outsourcing their logistics operations to the service provider’s to

concentrate on their major functions. As the major junk of money from the

profit of manufacturers is going towards the logistics service providers. So the

outsourcing companies are focusing in the reduction in the cost to gaining the

advantage of the lower cost in the competitive business. So most of the 3PL

service provider of India gives importance to Reduced Cost as the most

important success factor.

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CHAPTER 1

INTRODUCTION

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1.1 LOGISTICS – The word Logistics is derived from a Greek word

Logisticus which meant “ratio, word, calculation, reason

speech and oration”. It is also known as a branch of

science which deals with procurement, maintenance and

transportation of material, personnel and facilities. In the

era of development logistics was basically been used by

the military to move the machineries, arm and personal to

the places they are required. It has now become a very

crucial factor for every sector and industry around the

globe to survive and grow in this competitive world. It

has become an important part that plans implements, and

controls the efficient, cost-effective forward and reverse

fl0w and storage of goods, services, and related

information between the point of origin and the point of

consumption in order to meet customers’ requirements.

This definition directly refers to the importance of

economic considerations (efficiency, effectiveness) and

at the same time underscores the functional character of

logistics. Most of the concepts indicate that the

development of logistics follows three or four distinct

phases (Weber 2002; Bowersox & Daugherty 1987),

where sometimes the most advanced two phases are

viewed as a single phase only. These phases, as indicated

in the figure below are determined by the level of

logistics present in a firm and required a path dependent

on development from the lowest to the highest level of

logistics knowledge.

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Fig 1. Showing the different phases of Logistics

During the early phases, efficiency gains of the logistical process is

emphasized, both through specialization and the cross-functional

coordination of material flows. At the start of the third and fourth

phases the scope of logistics changes distinctly. It becomes a

management function, whose objective is t0 implement a flow and

process throughout the firm, which encourages logistical thinking and

acting beyond the logistics department. Weber (2002) pointed out that

even when a firm has reached those higher phases of logistical

development, it is important that the functions typically for the lower

phases should not neglected. The different phases of logistical

development reflects a shift of importance. Logistical activities such

as transportation, cargo handling and warehousing, the flow of

information in logistics processes is of increasing concern. While in

the early years of logistical development the physical capabilities of a

logistics system determined its potential, this has changed until today,

where the capabilities of the complementary processes of information

exchange are of at least equal importance.

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1.2 Logistics Service Providers –

The Logistics Service Provider (LSP) is referred to an outside company or a

person who is employed by a firm to perform some or all of its logistics

activities. Logistics Service Providers varies in terms of its service being

offered. The services offered by the logistics service provider are according to

the needs of the respective customers. Hence, they have been divided according

to the service they offer to their customers. They range from a narrow

spectrum, mainly consisting of warehousing and transportation services, for

customers of the starting phases to integrated the service portfolios including a

multitude of different services for the advanced phases. Altogether, five kinds

of LSPs can be distinguished: carriers, freight forwarders, courier and express

parcel/postal providers (CEP), third party / contract LSPs (3PLs) and fourth

party LSP (4PLs). Carriers owns the logistics assets and concentrate mainly on

supplying transportation services. They are mostly concentrated to either road,

sea, air or rail transportation and only in very less cases offer combinations of

these services. They receive orders either from the customer or through a

freight forwarder.

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1.3 Logistics Environment In India

The Indian Logistics industry spends 14 percent of its GDP on logistics. The

Indian logistics environment comprises road transport companies, railways, air

freight companies, inter-modal transport providers, ports and shipping

companies, as well as 3PL companies. Their performance totally depends on the

state of infrastructure – roads, railways, ports and airports.

Road & Trucks: India has a widespread road network of total to 2.7 million

kilometres of road length (1996-97), third largest road network in the world.

According to estimation of the Planning Commission, the road carried just 11%

of goods and 28% of passengers during 1950-51. The proportions stood at 60%

for goods and 80 per cent for passengers during 1995. Express and National

highways constitute only 1.4 per cent of the total road length but carry nearly

40% of all cargo moved through the road sector. Reach in the interiors of the

mainland is limited with only 48% of the 0.55 million villages which are being

connected with roads. This shows a serious limitation of access and connectivity

to rural areas.

Rail Transport: The Indian Railway network is a government monopoly in India

and has a lot of growth options. It is the second largest railroad systems in the

world over a route length of 62,809 kilometres (1998-99). This facilitates and

450 million tonnes of freight and 4630.05 millions of passengers movement

every year.

Airports & Air Cargo: In India there are now 6 international and 87 domestic

airports which handles more than 0.22 million metric tonnes of domestic cargo

and 0.468 million metric tonnes of international cargo, which is very poor in

terms of world standards. This is mainly because the air cargo is used only

when sea trade can not be used either due to lack time or space. This shows a

serious limitation in procuring, especially when companies are looking at

adopting international sourcing standards to reduce costs and enhance product

quality with quality service.

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1.4 PROBLEM

Nowadays, more and more companies are outsourcing their logistics and

supply chain operation so that they can concentrates on the core

competencies to increase their market share and gain more profit. But the

major problem which they are facing while outsourcing their logistics

operations is “How to select the Logistics or 3PL service providers” who

can give a promising flow of their products and also on which they can

rely for their logistics and supply chain operation. Experts agrees that

there is no best way exists to select or evaluate providers, and thus the

organizations is using a variety of methods. The overall objective of the

provider evaluation process is to reduce risk and maximising tthe overall

value to the customer.

The logistics sector in India is developing and various organisations are

attracted towards this business. The selection of efficient logistics service

providers has become very difficult nowadays for the manufacturers as

well as for the customers because most of the organisations are

outsourcing their logistics operations to the service provider’s to

concentrate on their major functions. As the major junk of money from

the profit of manufacturers is going towards the logistics service

providers. The outsourcing companies only cares about the reduction of

cost to attain the advantage of the lowest cost in the competition. So most

of the Indian logistics service providers concentrates on Reduced of Cost

as most important success factor. There are several supplier selection

applications available in the literature. In 1998 Verma and Pulman

differentiated between manager’s rating of the perceived importance of

different supplier attributes and their actual choice of suppliers in an

experiment setting. They used two methods: a Likert scale method which

contains set of questions and a Discrete Choice Analysis (DCA)

experiment. In 1998 Ghodsypou proposed the integration of an analytical

hierarchy process with linear programming to includde both tangible and

intangible factors in choosing the best logistics service providers.

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1.5 CONTEXT

The Evaluation and Selection of LSPs has now become a very crucial factor in

every organisation. As organisations are emphasizing more and more the

selection and scoring techniques by which they will be able to ensure the

quality, cost, and reliability and flexibility parameters. Till now there is no best

way to select & evaluate a logistics service providers, but the main point is that

the evaluation and selection process should be helpful to reduce purchase risk

and maximize value for the purchasing firm. Every industry aims to select

logistics service providers with whom business can be done over a extended

period. This reduces ability to switch logistics service providers, which

reinforces on selecting the right lsp which is a critical decision. This industry

deals with problems like Higher Inventory, longer lead time, Bull-whip effect

etc. To overcome this problems high degree of contribution between

outsourcing firm and logistics service provider is very much required. Vendor

Managed Inventory, Just In Time are the collaborative practices enabled by the

help of IT and infrastructure. For these practices to be effective, selection of

right type of logistics service provider is very much necessary.

The context of this study will be based on the descriptive research which will be

the mixture of primary and secondary sources of data collected from the

individuals, internet, journals and books which can limit the research to a

certain extent. Comparatively the less experience of the researcher will also be

one of the factor.

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CHAPTER 2

LITERATURE REVIEW

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The literature on performance measurement of logistics service providers

has evolved ever since its starting in the 1980s. Historically, when

organizations were small and operations were simple, the primary

evaluation are based of the cash flow of the firms. From the late 19th

century until the 1930s, theoretical and practical methods of management

accounting were established, and standards were widely applied by

Maskell, in 1991. Traditional management accounting techniques became

the method of evaluation for manufacturing firms and their distribution

operations. As the performance measurement technique developed,

Pursell focused on the performance evaluation of the entire business unit

and examine performance criteria, standards, and measures.

Sink in 1991, Performance evaluation was a popular topic which was

widely discussed but rarely expressed. It becomes necessary to introduce

certain relevant definitions of performance evaluation. Performance

means the nature & quality of an activities that an organization perform to

accomplish its principal missions and functions for the generation of

profit. Performance evaluation is a scale that can be used to measure

performance. It is a tool in the performance evaluation process that

records measures, displays results, and determines subsequent actions

(Rose, 1995). Generally, performance evaluation is categorised in

financial or non-financial and tangible or intangible. Financial

performance measures tend to focus on the impact in financial symbols of

production activities, such as logistics activities, whereas non-financial

performance measures tend to focus directly on actual production

activities, such as investment turnover, defect ratio, and lead time.

17

Heywood V stated that Supply Chain Management (SCM) emerged as a

strategy to attain competitive advantage, integrating customers into a

seamless process incorporating with the physical flow of goods from raw

materials to manufactures and distributes the corresponding information

flows in the management structures which totally controls the supply

chain. A buyer-supplier interface is a technique used for early supplier

involvement, where knowledge and technology of logistics service

providers are integrated in the supply chain.

Rodegher suggested that a supply chain management problem is how to

increase supply chain performance. He stated that a firm can develop a

supply chain into a competitive & cost effective strategic system that

maximizes value of the product. Today the forces that motivate logistics

service providers evaluation & development are ‘high global

competition’, ‘High cost of energy’, ‘Increasing supply chain risk’,

‘volatile market demand for value, productivity and quality’ and

‘Increasing pressure to reduce total cost’. If companies uses the Scorecard

system to evaluate their performance and able to identify the gaps, they

can attain smooth flow and zero defect. Logistics service providers

evaluation and process can help the organizations to develop a sound

flow of goods whenever required.

The market is so competitive nowadays that without the support of good

logistics service providers, it is very difficult to achieve a high quality

production with low cost. Right lsp selection helps in improving

company’s competitiveness, reduction of acquisition costs, and reduce the

problems related to material quality and delivery times.

18

Third Party Logistics (3PL) Service Providers

Execution is an ingrained topic in administration ideal models. It

incorporates vital and operations administration, and is of enthusiasm to

both scholarly researchers and honing chiefs. Execution is characterized

as the assessment of constituents utilizing proficiency, adequacy, or

social referent criteria to quantify how well an association meets the

yearning levels of constituents (Thompson, 1967; Friedlander and Pickle,

1968).

A few perceptions can be produced using the writing on production

network execution estimation. A lot of consideration has truly been set on

individual measures, instead of on frameworks of estimation (Beamon,

1999), and a hefty portion of the current studies are prescriptive in nature

and underscore the traits that great measurements and estimation

frameworks ought to have (Bourne et al., 2000).Keebler et al. (1999)

showed that generally couple of firms measure the execution of the

logistics inventory network, particularly logistics outsourcing. This is on

the grounds that the frameworks viewpoint is sometimes embraced and

almost no exact examination exists on production network execution

estimation from a more extensive framework point of view, for example,

authoritative execution estimation. Business execution estimation has

dependably been an administrative need, drawing in expanding hobbies

of both among academicians and directors. Directors industriously

measure business execution and appeal execution related data. Execution

estimation is indispensable to the effective execution of administrative

obligations. It helps in the transference of the complex reality of

execution into an arrangement of transmittable images that can be

duplicated under comparable circumstances (Lebas, 1995).The

Organizational hypothesis refers to connection – structure – yield

relationship as the major corporate capacity that makes hierarchical

progress. It uncovers both reasonable and exact relationship between 3PL

administration suppliers, production network accomplices, and 3PL

authoritative execution estimation and investigates the connections

between the determinants of the logistics outsourcing administration

nature of inventory network accomplices (suppliers or clients) and the

recognizable proof as far as hierarchical structure of the between firm

relationship between 3PL pr0viders and clients.

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CHAPTER 3

RESEARCH METHODOLOGY

20

3.1 Objectives :

1. Process and Technique used to explore the Logistics service provider

selection and evaluation

2. Tools used to compare the lsp selection and evaluation.

3. To compare the lsp techniques currently used for the selection and

evaluation

3.2 Research Design

This research is descriptive as it examines the existing methods and

ways of selecting the service providers. Existing literatures, journals

and findings from the individuals are collected from the internet and

the logistics service providing firms has been used as a source of

information

3.3 Data Collection

3.3.1 Primary Sources: Individuals from the firm specially from

Sales and Booking department.

3.3.2 Secondary Sources: Internet, Journals, White Papers published

21

CHAPTER 4

SELECTION AND EVALUATION

TECHNIQUES

22

By going through the review of the literature, I came across the various method

and techniques which is currently used for the selection of lsp’s which has been

developed over a period of time. On the 3 general criterias which are time, cost

and risk are emphasized by nearly all researchers as the most important criteria

for selecting an agent. Typically, these criterias are developed on the basis of

which the attributes of logistic services are evaluated. Jharkaria and Sankar

(2007) also provided a structure for the selection of logistic alternative which

include some of the strategy such as long-term and risk management. Other than

strategic aspects, there work also includes such operational activities as

operational performance and financial performance.

Methods being used for the lsp selection are as follows:

1. The Weighted Point Method

2. Categorical Mathod (Timmerman, 1986)

3. Cost Ratio Method

4. Total Cost of Ownership Approach (Thompson, 1990)

4.1 Weighted Point Method : This method involves factors taken by the

customer in considerations for the selection

and evaluation. Then the weight given by the

customers are multiplied by the performance

score which was assigned. Finally, these

products are summed to determine a final

rating for each logistics service providers.

In most of the outsourcing situation, all measurement attributes are

weighted for importance. This system was designed to utilize quantity

measurements. The main advantages of this method includes the ability

for any firm to include numerous evaluation factors and give them

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weights according to the need of the organization. This method tends to

minimize the qualitative factors in the evaluation. The main drawback of

this method is to minimize the qualitative evaluation criteria which do

not get considered effectively while selecting the lsp’s.

4.2 Categorical Method: This method t0tally depends on the ability

and experience of the customer by the

performance of the lsp’s in the criteria which

are crucial or very important to them. These

function which are selected defines whether

the lsp’s performance in neutral, satisfactory or

unsatisfactory which further turns the result of

either selection or non-selection of the lsp’s.

The advantage of using this method is that it helps to structure the evaluation

process in a smoothly & systematically. The major drawback of this technique

is that the identified factors are weighted equally and the decisions making

using this system are likely to be more subjective.

4.3 Cost Ratio Approach: This method focuses on the main identifiable

cost to the value of products. As the

value of the products goes higher, the lsp rating

decreases. . The costs to be included in

the selection procedure totally depends on the

products involved. Manufacturing department,

with the help of other departments like sales and

marketing set the quality & costs and then it is

documented by same department. This process

is so flexible that any firm in any sector can

adopt it. The major disadvantage of this method

is that it is complex and the

company implementing it must have a well

developed cost accounting systems.

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4.4 Total Cost of Ownership Method: This approach mainly measure all

costs associated with the value of

given quantity of products or

services. In addition to the cost

component, many factors play an

important role like lsp’s unreliable

delivery service, transhipment

shortcomings, warehousing costs,

transport costs. These factors will

from company to company and

activity analysis should be used to

express these activities. Then it is

followed by cost assignment to

different activities. Then the cost

drivers which increases the cost of

a given activity are defined.

The main drawback or lacking point about these approaches or methods were

the integration of quantitative and qualitative data. But the following

approaches integrates both qualitative and quantitative data which helps in

covering most of the aspects and decreasing the errors in selection and

evaluation of the logistics service provider’s.

4.4 Analytical Hierarchy Process: Analytical Hierarchy Process provides a

collective solution. As it consists of a questionnaire for comparison of each

element and mean to arrive at a final solution. Ghodspour and O’Brien had

mixed up the AHP and Linear Programming to consider both tangible and

intangible factors in choosing the efficient logistics service providers and

placing the optimum order quantity among them thus, by using integrated

AHP and Linear Programming the total value of purchasing (TVP)

becomes maximum. This model can be applied to supplier selection with

or without capacity constraints.

25

It consists of five major steps which are as follows:

Step 1- Construction: It aims to structure the complex problem into

‘humanly-manageable’ sub-problems. It is started by

iterating from top (the more general) to bottom (the

more specific). The unstructured problem at this step

is split into sub-modules which eventually become

sub-hierarchies. In the hierarchy from top to bottom,

the structure comprises goals (systematic branches

and nodes), criteria (evaluation parameters) and

alternative ratings (measuring the adequacy of the

solution for the criterion). Every branch is further

divided into an appropriate level of detail. The result

of iteration process is that it transforms the

unstructured problem into a manageable problem

which is arranged both horizontally and vertically

into hierarchy of weighted criteria. By raising the

number of criteria, the importance of each individual

criterion is diluted, which is compensated by

assigning a weight to each criterion.

Step 2- Selection of Attributes: Selection of each criteria is based on the

importance on its importance within the

node to which it belongs is assigned

relative weights. All the criteria which

belong to a common direct parent criterion

in the same hierarchy should sum up to

give result equal to 100% or 1. A global

priority is computed that quantifies the

relative importance of a criterion within the

overall decision model.

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Step 3 Evaluation: In this step alternatives are scored and each alternatives

are compared with others. If we consider the whole

structure of the problem as a tree then using AHP, a

relative score for each alternative is assigned to each leaf

within the hierarchy, then to the branch the leaf belongs

to, and so on, up to the top of the hierarchy, where an

overall score is calculated.

Step 4 Selection: The alternatives are then compared with each other and the

one which fits for the requirements in best to select for

efficient flow.

Fig 2. Showing the Selection & Evaluation of lsp By AHP Approach

27

4.5 Analytical Network Process: Analytic Network Process (ANP)is

developed by Thomas L. Saaty(1996).It is a

technique which is basically used for making

decision of multiple criteria. It is also

considered as generalized Analytic Hierarchy

Process (AHP), but ANP uses a grid instead

of hierarchy without the necessity to specify

levels. It allows relations of dependence

between its clusters and elements.

It basically consists of three steps which are as follows:

1. Formulation

2. Decision Making

3. Algebric Development

Fig.3 AHP Selection Process

28

Step 1: Formulation of Problem

First of all, problem is structured to define the objectives of the decision

processes, the clusters, elements or nodes and the alternatives to solve

the problem.

Step 2: Decision Making

Then the matrices are constructed to see whether any relation exists

between the distinct clusters or nodes and when the matrices shows the

existence of any relations of every cluster of the grid. In both matrices, it

shall be given the value 1 if there is relation/dependence otherwise, zero

value will be assigned.

Step 3: Algebric Development

29

CHAPTER 5

Selection of Logistics Service Provider in India

30

5.1 Overview of Logistics in India:

The annual logistics cost in India is valued at Rs 6,750 billion (US$ 135 billion)

and it is growing at 8-10% annually. Logistics cost by value accounts for around

13% of the GDP of India – this is much higher than that in the US (9%), Europe

(10%) and Japan (11%) but lower than that in countries such as China (18%)

and Thailand (16%). In particular, the percentage-wise share of transport cost

(an important constituent of total logistic cost incurred by a nation) by value of

GDP has been steadily increasing.

Traditionally Indian logistic industry is made of core service providers and

contracts are issued for trucking, shipping, Inland Container Depot (ICD),

Container Freight Station (CFS) etc. There is a gradual shift towards 3PL

(providers who bundle services such as transport, warehousing, freight

forwarding etc.) and 4PL (who work as business process providers; manage co-

ordination with various 3PL). This shift is driven by global customers’ demand

for more control, higher technology and one-stop solutions for all logistics

needs. Global logistics management is new generation futuristic concept where

a single supplier will be able to meet customers’ logistic needs across

geographies.

The high cost of logistics in India when compared to developed nations may be

attributed to poor quality of infrastructure and inadequate service quality vis-a-

versa counterparts such as US and Europe.

Warehousing refers to the storage of product and goods to be transported,

whether inbound or outbound. A warehouse is often used as a stock piling

location to manage demand-supply gaps over a longer term. Various material

handling equipment or systems are used in warehouses for loading and

unloading operations and movement of goods over short distances.

The Transportation, Logistics, Warehousing and Packaging Sector in India is

dominated by the unorganised segment (small truck owning companies linked

to intermediate brokers or transport companies, small warehouse operators,

custom brokers, freight forwarders, etc.); the organised segment accounts for

less than 10% of the total logistics market in India.

31

5.2 Major Logistics Players in India:

1. Safexpress

2. V-Xpress

SAFEXPRESS

Safexpress has firmly entrenched itself as the ‘Knowledge Leader’ and ‘Market

Leader’ of the Supply Chain & Logistics Industry. Safexpress offers a complete

spectrum of Supply Chain & Logistics services including Express Distribution,

3PL and Consulting to Enterprise Customers. Safexpress provides services to a

vast wide range of business verticals ranging from Apparel & Lifestyle,

Healthcare, Hi-Tech, Publishing, Automotive, Engineering & Electrical

Hardware, FMCG & Consumer Electronics, and Institutional. Safexpress has

been significantly involved in the Indian economic growth for the whole of last

decade. With an intention of contributing in country’s economic growth,

Safexpress kept its operations India-centric.

Safexpress provides Supply Chain & Logistics services to over 6000 corporate

clients across 8 business verticals. With its largest fleet of over 4000 GPS

enabled vehicles and largest network of over 588 destinations, 54 Logistics

Hubs including 17 Logistics parks in India. Safexpress has the capability to

deliver to every square inch of India. Since inception, learning has always been

a core focus at Safexpress.

32

Valued Services Being offered

1. Express Distribution This service of Safexpress assures time-

definite delivery services using a

combination of Air, Surface and multi-

modal transport. These services enables the

customers to plan their transit inventory.

2. Third Party Logistics

Warehousing has become a key

differentiator in an organisation market

strategy. The choice of warehousing

location, SKU mix, the level of

automation & distance from customers.

3. Consulting

Safexpress offers various value added services beyond physical

operations, in the form of supply chain & logistics consulting. Their

expert team of consultants are highly

experienced, brings global information, best

practices and cutting edge technology

solutions to the table, to make the supply chain model of the organisation

more dynamic.

4. Safe Air

Air Cargo management requires a special

expertise in handling and document management.

5. Stock2Shelf

It provides comprehensive mall supply chain

services like inspection and estimation, professional packaging, security

clearance, storage, unpacking and finally reverse logistics.

33

6. Campus to Home

It is the service only been provided by the

Safexpress in India to facilitate the

transition of smooth flow of student baggage from collage life to

professional life.

7. Easy2Move

Easy2Move provides a smooth flow

consignments by standardising Movement. Packing, Pricing, Options,

Risk Cover, Information and easy options for payment.

34

V-Xpress

Group V is one of the pioneers in transportation and logistics

organisations in India having a track record of over 50 years. As a group

it offers a complete range of supply chain solutions that harnesses the use

of technology and decision support tools. It is committed to offer

effective, industry focused and customer centric solutions that integrates

the various processes of its client to organise cost effective, reliable and

timely products and information flow.

It provides services on the following

1. Freight Management

2. Transportation

3. Cargo Express Movement

4. Warehousing

It has 400 branches spread across India which helps in providing both

National and local distribution.

35

CHAPTER 6

ANALYSIS

36

Comparison on the basis of the selection models:

Method Parameters Advantages Disadvantages

Weighted-

Point Method

Quality

Delivery

Service

Price

Attributes are

weighted by

importance

Subjective

Qualitative

criteria not

considered

Categorical

Method Quality

Delivery

Service

Price

Clear and

systematic

process of

evaluation

Inexpensive

Requires

minimum

performance

data

Imprecise

Subjective

Cost Ratio

Method

Quality

Delivey

Service

Price

Reduced

Subjectivity

Flexibility

Cost

Accounting

system is

required

Cost Ratios

are

expressed

in same

units

Total cost of

Ownership

Method

Ordering Cost

Transportation

Cost

Inspection

Cost

Unreliable

Delivery Cost

Cost

Savings is

low

Allows

various

purchasing

policies to

be

compared

with one

and other

Very

Complex

Analytical

Hierarchy

Process

Quality

Price

Delivery

Very

Simple

Not easily

applicable

37

Service Includes

both

Quantitative

and

Qualitative

data

Analytical

Network

Process

Quality

Price

Service

Delivery

Helps in

reducing the

number of

results

Makes the

supplier

selection

more

realistic.

Very

Complex

38

Comparison of Logistics Service Providers:

Factors Safexpress V-Xpress

Cost Fixed Varies(according to the

no. of consignment

booked)

Timely Delivery 96hrs(By Surface) 108hrs(By Surface)

Credit Options Available Rarely Available

To- Pay Options To-Pay, DOD, DACC TO-Pay, DOD

Flexibility Very Flexible Less Flexible

Customer Satisfaction High Low

Connectivity Throughout India Less Reachable (Not in

the North-Eastern part)

39

Factors that plays the major role in the lsp selection in India:

1. Cost- Cost plays a very vital factor as the major customer of the lsp are the production and manufacturing firms which aims at keeping the

value of the goods as low as possible as it is top priority of the

logistics service provider across the globe.

2. Timely Delivery- It is also the one of the main factor of selection most of the most of the times customer has made a

commitment and need a timely delivery and for that

they need a reliable lsp which can fulfil their

commitment.

3. Payment Options- It has now become an important factor as many

consignee and consignor do not trust each other for

that they acquire the payment options like DACC(

Delivery against consignor copy) or DOD(Draft

against Delivery) which helps in the flow of

consignment.

4. Connectivity- It has always been a vital factor for the selection and evaluation of the logistics service providers as if the

destination at which the consignor needs to book the

consignment but its not in the reach of the considered lsp

then the consignor have to acquire some other

alternative.

40

References

1. International & Supply Chain Congress, Nov 8-9, 2007

https://hal.archives-

ouvertes.fr/file/index/docid/366527/filename/Logistics_SCM_2007.P

DF

2. Viara Popova, Martijn Schut, Performance Measure & Controlling in

Logistics Service Providing, 2005

http://www.cs.vu.nl/~schut/pubs/Krauth/2005c.pdf

3. Smriti Asthana, Performance Measurement Variables in Third Party

Logistics, March 2013,

http://www.euroasiapub.org/IJRIM/mar2013/2.pdf

4. JaeJon Kim, KiJu Cheong, Geon Cho, 2006

http://www.scielo.br/pdf/jistm/v3n3/01.pdf

5. Erdal ÇAKIR, Hakan TOZAN, Ozalp VAYVAY, 2009

http://www.dho.edu.tr/sayfalar/02_Akademik/Egitim_Programlari/De

niz_Bilimleri_Enstitusu/Dergi/04_hakantozan.pdf

6. Huimin Zhang, Guofeng Zhang and Bin Zhou,

http://dl.ifip.org/db/conf/i3e/i3e2007-1/ZhangZZ07.pdf

7. GülGen Akman and KasJmBaynal, 16 June 2014

http://downloads.hindawi.com/journals/jie/2014/794918.pdf

Books

1. Folinas and Dimitris, Outsourcing Management for Supply Chain

Operation and logistics Service, Pages 856-992

2. Steven W. Simonson, Bruce W. Tompkins, Brain E. Upchurch

Logistics and Manufacturing Outsourcing: Harness Your Core

Competencies, Pages 18-25, 83-95