A PROJECT REPORT ON FINANCIAL IMPACT & OPERATIONAL FUNCTIONS IN LOGISTIC BUSINESS

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR MASTERs DEGREE IN FINANCE MANAGEMENT

TO UNIVERSITY OF MUMBAI

BY NILESH HASMUKHBHAI VADHER MFM III SEM I ROLL NO. 20 0!" 20 0#20 $ UNDER THE GUIDANCE OF PROF. ASHOK RAINA

LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALA%MI& MUMBAI '00 0$'

A PROJECT REPORT ON FINANCIAL IMPACT & OPERATIONAL FUNCTION IN LOGISTIC BUSINESS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR MASTERs DEGREE IN FINANCE MANAGEMENT TO UNIVERSITY OF MUMBAI

BY NILESH HASMUKHBHAI VADHER MFM III SEM I ROLL NO. 20 0!" 20 0#20 $ UNDER THE GUIDANCE OF PROF. ASHOK RAINA

LALA LAJPATRAI INSTITUTE OF MANAGEMENT MAHALA%MI& MUMBAI '00 0$'

DECLARATION
I hereby declare that this dissertation submitted in partial fulfillment of the requirement for the award of& MASTERs DEGREE IN FINANCE MANAGEMENT (MFM) of the University of Mumbai is my original work and has not been submitted for award of any other degree or diploma fellowship or other similar title or prizes I further certify that I have no ob!ection and grant the rights to ""IM to publish any chapter or pro!ect if they deem fit in !ournals or magazines and newspaper etc without my permission

NAME( NILESH H. VADHER CLASS( MFM III SEM I BATCH( 20 0#20 $ ROLL NO.( 20 0!" DATE( 2"TH OCTOBER& 20 2 PLACE( MUMBAI

NILESH VADHER

PROJECT GUIDE CERTIFICATE FORM I M). N*+,s- H.s/01-2-.* V.3-,) the undersigned R4++ N4. 20 0!" studying in the #hird $ear of MFM is doing my pro!ect work under the guidance of P)45. As-41 R.*6. wish to state that I have met my internal guide on the following dates mentioned below for %ro!ect &uidance'(

SR. NO.

DATE

SIGNATURE OF THE INTERNAL GUIDE

______________________ S*76.80), 45 8-, C.63*3.8,

______________________ S*76.80), 45 I68,)6.+ G0*3,

Certificate
#his is to certify that the dissertation submitted in partial fulfillment of the requirement for the award of MFM of the U6*9,)s*8: 45 M0/2.* is a result of the bonafide work carried out by M). N*+,s- H.s/01-2-.* V.3-,) under my supervision and guidance )o part of this report has been submitted for award o f any other degree* diploma fellowship or other similar titles or prizes #he work has also not been published in any scientific !ournals+ magazines

DATE( 2"# 0#20 2 PLACE( MUMBAI

NAME( NILESH HASMUKHBHAI VADHER ROLL NO.( 20 0!"

-----------------------------DR. V. B. ANGADI <DIRECTOR& LLIM=

--------------------------DR. M. GO;RI SHANKAR <PROJECT GUIDE=

ACKNOWLEDGEMENT
#his pro!ect has been a great learning e,perience for me I take this opportunity to thank* %rof -shok .aina my internal pro!ect guide whose valuable guidance / suggestions made this pro!ect possible I am e,tremely thankful to him for his support 0e has encouraged me and channelized my enthusiasm effectively I e,press my heart(felt gratitude towards my parents* siblings and all those friends who have willingly and with utmost commitment helped me during the course of my pro!ect work I also e,press my profound gratitude to 1r -ngadi* 1irector of "ala "a!patrai Institute of Management for giving me the opportunity to work on the pro!ect and broaden my knowledge and e,perience My sincere thanks to %rof -rati 2ale for her valuable guidance and advice in completing this pro!ect I would like to thank all the professors and the staff of "ala "a!patrai Institute especially the "ibrary staff who were very helpful in providing books and articles I needed for my pro!ect "ast but not the least* I am thankful to all those who indirectly e,tended their co( operation and invaluable support to me

E%ECUTIVE SUMMARY
India is one of the fastest growing economies of the world today #his growth is fuelled by growth in infrastructure* booming manufacturing sector* 34IM trade* retail and agricultural related activities amongst others "ogistics assumes central activity in these growth areas In India logistics cost* as a proportion of &1%* stands today at 56 per cent which is set to rise as the Indian economy shifts from service oriented economy to that of non(service activities* like* manufacturing and food( processing etc .ural logistics is set to contribute a larger share to this increase as the infrastructure related to agricultural activity unfolds 7ith rising disposable income* changing lifestyle* focus of government and private sector on rural and agricultural related activities* the rural logistics has received special attention in the past two to three years .ural logistics* though lucrative* has a number of challenges which makes it difficult to tap the opportunity 1evelopment of cold chain warehousing infrastructure* thus* remains at the core of the government8s plan to enable growth of rural areas* provide employment opportunities for rural youths* meet India8s growing food demand etc 9imilar is the trend in cities which have witnessed changing lifestyle and shift to consumerism which is further fuelling national intra(trade activity and thus the logistics sector Indian economy is opening up and one recent step in this direction is the signing of India(-93-) trade agreement which will likely to push trade through 3astern :oast of India many folds #he inclusion of India into )uclear 9uppliers &roup ()9&) and civilian nuclear co(operation agreements with U9- and France* and another one in pipeline with .ussia is a pre(cursor to the increase in trade activities with ma!or powers of the world ;y <=6=* the economic benefits that will

accrue to India8s economy* as a result of the nuclear trade could touch U9 >?== billion Further* the government is strengthening the infrastructure with over U9 >@= billion of investment planned till <=5< "ogistics will be one sector which will be the backbone of flourishing trade activity and infrastructure development* and will receive special attention by the government + private sector in coming years #here are a number of activities in the Indian logistics sector which are broadly classified under A0ardware8* A9ervices8 and A#echnology8 related activities* however* not all of these activities are core to the growth of the sector Indian logistics sector offers unique opportunities which are mainly driven by an opening and near double(digit growing economy* and lack of infrastructure in key areas It may be noted that although* lack of infrastructure acts as an inhibitor* but the dearth of adequate infrastructure also presents unique opportunities to players who are ready for the situation and understand the market #his report identifies such elements which are growth engines of the Indian logistics sector and focuses on understanding opportunities related within these elements Identifying strategic logistics elements requires one to understand the supply chain and value chain* 34IM trade elements and their role* government policies and subsidies etc to identify the most critical elements #he report begins with identification of such strategic elements which are then studied in deep for each element to find market structure* growth drivers* barriers to entry* rules + government policies applicable to the market* competition threat and opportunities Financials are discussed with possible scenarios and their financial + technical analysis* wherever required -nd reports end with the recommendation

INDE%

T4>*?s N./,
C-.>8,) I( I68)430?8*46 & R,s,.)?- M,8-434+47: 5 5 Introduction 5 < Bb!ective of 9tudy 5 6 9cope of 9tudy 5 D .esearch Methodology Formation of %roblem Method of 1ata :ollection .esearch Instrument .esearch "imitation C-.>8,) II( R,9*,@ 45 L*8,).80), < .eview of "iterature C-.>8,) III( I63*.6 L47*s8*?s I630s8):( O08+441 6 5 %rospect &rowth in the Industry 6 < Indian "ogistics Industry( :urrent 9cenario 6 6 9ize of "ogistic Market in India 6 D "ogistics on a 0igh &rowth #ra!ectory 6 ? :ompetitive 1ynamics and Bther Issues 6 C Future %rospeccts C-.>8,) IV( L47*s8*?s M.6.7,/,68 F06?8*46s D 5 Brder %rocessing D < 7arehousing D 6 Inventory Management D D #ransportation D ? Information Flow D C %ackaging D @ .elevance of "ogistic in International Market

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C-.>8,) V( M43,s 45 T).6s>4)8.8*46 & ;.),-40s*67 ? 5 .oadway ? < .ailway ? 6 %ort+7aterway ? D -irway C-.>8,) VI( ;.),-40s, C-.>8,) VII( G+42.+ L47*s8*?s S?,6.)*4 @ 5 Introduction of &lobal "ogistics Industry @ < 9ize of &lobal "ogistics Industry @ 6 :urrent 9tatus / 1ynamics of the Industry C-.>8,) VIII( L47*s8*?s C4/>.6*,s 45 I63*. A63 I63*.6 S*80.8*46 E 5 "ogistics :ompanies of India E < Indian 9ituation C-.>8,) I%( V.+0, A33,3 & E/,)7*67 S,)9*?,s F 5 3,press 9ervices F < #ruck and #race F 6 :old :hain F D #he #hird %arty "ogistics(6%") F ? .egional %rospective F C "ocation -ttractiveness -nalyses C-.>8,) %( D.8. A6.+:s*s & I68,)>),8.8*46 C-.>8,) %I( F*63*67& R,?4//,63.8*46s & C46?+0s*46 55 5 Finding 55 < :onclusion 55 6 .ecommendation A66,A0), B*2+*47).>-:

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