Beruflich Dokumente
Kultur Dokumente
CONCLUSION
5.1 Summary
Logistics and supply chain management are observed as the areas in which logistics
service providers, by virtue of their expertise, are able to offer the most added value to
transactions in the freight trade. Freight forwarders, as logistics service providers,
play an important role in supply chain management, as an increasing number of firms
outsource their logistics function. These third party logistics providers are now
becoming more involved in the design, management, and control of firms' supply
chains. Asia-based regional logistics providers are the best equipped to manage
supply chains in Asia as they are familiar with the context in which they operate.
The task of a logistics provider is to facilitate trade to the extent that the trader needs
only to produce and sell the goods (or to order the goods, in the case of imports).
Once this has been done the logistics provider can take over and provide every
subsequent function from factory gate to final delivery. As the distance between the
manufacturer (i.e., the exporter) and the distributor or retailer is often quite
considerable (and vice-versa for imports), problems relating to both material and
information flows are common.
117
The problem of delivering finished goods on time to its customers becomes very
crucial when MNCs use JIT management techniques. LSPs main role is to deliver the
products to the customers at the right time, right cost, right price so that they are
competitive.
The present study is conducted to understand the supply chain system of logistics
service providers. In order to measure supply chain effectiveness, a tool was designed
with the help of researchers and practitioners of the field. The tool was tested for its
reliability and validity. Supply chain Competitiveness of Select LSPs was also
measured and compared. Finally, SAP-LAP analysis was carried out for Logistics
Industry.
The topic for the research was A Study of Supply Chain Effectiveness of Logistics
Service Providers in Indore. In order to fulfill this research four objectives were
framed out.
For the purpose of study, four major logistics service providers of Indore such as Gati
Logistics Ltd, Safe Express Ltd, Blue Dart Ltd. and DHL Ltd. Were considered. As
each of the LSP has different types of customers hence a sample of all types of
customers was drawn. of each LSP a random sample of 25 customers was drawn
which included 5 Individual Customers, 5 Proprietors, 5 Small Scale Industry
Customers and 10 Large Scale Industry Customers were selected, thus a total sample
was 100. All the samples were drawn on convenience and judgmental basis.
The thesis has been divided into 5 chapters named as Introduction, Literature Review,
Research Methodology, Results and Discussions and Conclusions. At the end,
Questionnaire, Intermediate results of analysis has been presented in the form of
annexure. In the last references has been presented in American Psychological
Association (APA) Style. List of Tables and figures have also been presented.
Chapter one Introduction has presented the conceptual framework. In this chapter
logistics industry and its present status, its relationship with supply chain
management, its evolution and framework has been discussed so that there is a clear
understanding of the subject. Evolution of Logistics systems which starts from
physical distribution, internal integrated logistics (3PL), external integrated logistics
(4PL), and Global Logistics Management. It also talks about various components of
118
Logistics which include Transportation, Warehousing and Value Added Services.
The Compounded Annual Growth Rate of all these components during 2008-13 is
summarized as Transportation (52%), Warehousing (20%) and Value Added Services
(15%). It also discussed various subsectors such as Road Transport, Airline
Passenger, Airline Freight, Shipping and Rail Services.
Key Success Factors such as Quality manpower, Keeping pace with technology,
Enhanced operational efficiency along with the key Risk Factors such as: highly
unorganised and fragmented market, infrastructure issues, lack of standards and
processes within the sector, regulatory restrictions, lack of skilled manpower have
been discussed.
Rationale of the study is presented which gives clear justification for carrying out the
research work. In the present global scenario, when the world has become borderless,
organization started to purchase the products from all parts of the world. They had
started dictating their terms to the Logistics Service Providers (LSP) to deliver their
product at the right time and minimum price. To compete and survive in the market,
the LSPs are trying to re-engineer their processes and trying to cut their internal costs
from all corners. They need to relocate their warehouses, collaborate with their
counterparts and optimize the existing resources. In order to provide the information
and tracking facilities to the customers, they are going in for the online product
tracking system and also for Global Positioning System.
119
Chapter two included the review of related work carried out by the researchers at the
National and International level. The review was carried out on logistics as well as
supply chain management areas. With the help of a graph, the variance of the total
cost of Logistics with the change of Transport mode has been explained. It also
presented Sector wise presence of various Logistics companies in India. Brief Profile
of all the LSPs such as: Gati Logistics Ltd, Safe Express Ltd, Blue Dart Ltd. and DHL
Ltd. has been presented.
Responses have been collected from the customers of the LSPs has been collected.
The categories of customers who have been selected were: Individual, Proprietors,
Small Scale industries and Large scale Industries. Of each LSP 5 individual
customers, 5 proprietor customers, five Small Scale industry customers and 10
Large Scale industry customers were selected. Thus 25 customers of each LSP
were selected to evaluate the Supply Chain Effectiveness, resulting into a total of
100 respondents which formed a sample. From the individual and proprietor
category those customers were selected who have already availed the services of
LSP and were willing to provide the feedback on their experience with LSP. From
Small Scale as well as large scale industries one executive each has been selected
who were senior or middle level executives, from the departments directly
involved in SC activities
120
For Comparing the Supply Chain Effectiveness as well as Competitiveness of
various Service Providers, the following hypothesis were formulated,
The questionnaire has a total of 10 questions. First four questions talked about the
type of logistics service user, frequency of the LS availed, LSP and duration since
when LS is being used. In question 5, respondents were supposed to rank (1-5)
various attributes considered for selecting LSP. In question 6 respondents were
supposed to tick the logistics services they are availing. In question 7, customers
ticked the IT based service provided by the LSP. Question 8 has 26 parameters
which were on Likert scale (1- Strongly disagree to 5-Strongly Agree) evaluates
the Supply Chain Effectiveness of LSP. Question 9 has 12 parameters measuring
the competitiveness of the LSP. Question 10 has the personal details of the
respondents. The data was collected after developing rapport with the subjects.
1. Content validity for the questionnaire was tested as it was designed having
a thorough literature review. On supply chain effectiveness, Split half
reliability and validity was computed and was found to be 0.82 and
0.905 respectively. Split half reliability was computed by finding our the
coefficient of correlation between sum of the responses on SCE of odd
numbered respondents such as (R1, R3, R5..R99) and Even numbered
respondents (R2, R4. R100) making the odd respondents. Validity was
computed by taking the square root of reliability. This high value of
reliability and validity is the indicator of a good and accurate tool used to
measure SCE.
121
2. Principle Component Factor analysis with Varimax Rotation and Kaiser
Normalization was applied for exploring factors of Supply Chain
Effectiveness. It conveged the 26 parameters of Supply Chain
Effectiveness into 10 factors. After extraction maximum value of r was
found to be 0.911 (parameter b) while the minimum was found to be 0.554
(Parameter c)
3. In order to test the hypotheses, t-Test for the difference between two means
has been applied between various LSPs which compared the Supply Chain
Effectiveness as well as Competitiveness. It was tested whether SCE and
Competitiveness of various LSPs differ significantly from each other or
not. Hypothesis testing was done by applying two tailed t-test on 5% level
of significance.
4. SAP-LAP analysis has also been carried out and few strategies are
suggested for LSPs to improve the SCE.
Chapter four presented the results and discussions on the quantitative and qualitative
aspects. It is found that out of a total of 100 respondents 63 were found to be using the
services of LSP almost everyday followed by 16 using once in a week. This reflects
that people selecting any LSP on the basis of quality of service and commitment of
LSP to provide cost effective service on timely basis are continuing the business. It is
also revealed from the study that 99% of the customers are dealing with the LSPs for
more than a year.
On the basis of preferences of all the customers for selecting any LSP, various parameters
were ranked on the basis of average values (1-5) responded by the customers on likert scale..
It is found that Delivery Reliability (4.48) is ranked 1 followed by Price (4.29) and Delivery
Lead Time (4.26). This preference is due to that fact that in this IT era when all the
information is available on a single click of a mouse, customers would like to deal with those
LSPs who have proved to be reliable. They were of the opinion that they can not tolerate the
delivery failures. At the same time, people are price sensitive too also they expect that
delivery of the product should reach to the destination in the optimal time.
122
The SCE scale consisted of 22 parameters. Split half reliability and validity was
computed and was found to be 0.82 and 0.905 respectively.
The Supply Chain Effectiveness Score as well as Competitiveness Score of all LSPs
was compared by calculating mean and standard deviation presented in the following
table. It is visible from that table that DHL has maximum SCE as well as
Competitiveness average value with the lowest standard deviation which reflects that
it is providing best service to its customers. In order to know the relationship between
SCE and Competitiveness, coefficient of correlation was computed and was found to
be 0.92 which shows that SCE and competitiveness are highly positively correlated.
SCE and Competitiveness Score of LSPs were compared by applying two tailed t-test
and formulating and testing 12 hypotheses H01-H012. The t-values were found to be
less than the tabulated value at 5% level of significance. All the hypotheses were
accepted which means that there exists no significant difference in the SCE as well as
Competitiveness of various LSPs.
123
H04: There is no significant difference in Supply Chain Effectiveness of Safe
Express and Blue Dart. (Accepted)
124
SAP-LAP analysis was carried out and presented in the following
Table
SAP-LAP Model for LSPs
Issues
125
1. A Team of 1. Offering the 1. Govt policies may 1. Offers cost
Actor not support the
highly motivated Scheduled Network, effective
team works to which allows the business to grow. services
Actor can be
achieve customers to plan 2. Special
individual 2. A tough
competitive his supplies. competition forces deliveries and
managers, or
advantage. towards offering the pickups, free
groups,
2. Safexpress minimal delivery lead Storage for
departments or
2. The HR policies follows a stringent time. three days, e-
class of actors
helps the transit-time com tools, e-
such as suppliers,
organization to schedule. billing, and key
competitors, 3. Use of IT,
retain the account desk.
government, 3. Good network to Community
performing
consultants, serve the customers Information Centers
employees. (CICs) and
management, in all parts of the
employees, etc. Computer Literacy
3. R & D team country. Programme (CLP)
always propose the help in obtaing the
customized 4. Not only the effectiveness
solutions. reach but even the
Transit Time has
been scheduled. We
take minimum time
in reaching the
scheduled
destination.
126
SYNTHESIS
Learning 1. To find solutions from 1. Strong 1. Limitation 1.Regular pickup
the resources available. team should of e- network. service, data
Key issues explore news exchange
related to 2. In order to be and 2. The
process, late pickups,
situation, Competitive, technology innovative availability of
fund and early deliveries, on-
actor and services to
need to be adopted site support, e-com
customers. technology.
process tool, e-billing, special
New location
2. Synergy amongst team 3. The billing,
of services
members to be ensured.. may be added dedication of re-weight report, and
to the the daily shipment
2. User comfort is to be Scheduled development
e-reports.
kept at priority. Network from commissioner
time to time. s.
2. E-solutions,
3. System should be self
4.The easy delivery duty paid,
sustainable. 2. Saving of
the extra availability of neutral delivery
Service the services, drop
4. Technology policy is
Charge that information shipment, break bulk
missing. In its absence, the
company ends up as a mere the customer express, cross
pays for docking, one-stop
manufacturing facility.
delivering to clearance, and key
such account desk.
6. Core competencies have locations, an
not been identified. exercise
which is not a
7.Backward integration of very
high-tech or key component conscious
manufacturing by way of approach with
takeovers can help in most of the
improving technological Service
Providers.
health of the company.
8. Takeovers of high-tech
firms affect the innovation
culture adversely, and those
firms technologists lose
creativity.
127
1.Technology Management 2. Developed 1.Centers are 1.Onsite mailroom
Action a transparent connected
at par with other staff, customization
management functions to system for through a of billing / operation /
rates of satellite based
be accomplished more IT solutions, key
transportation computer
professionally by communicatio account desk
. .
establishing technology n network. (dedicated customer
policy. 3. Avoid there service), and project
always 2.Enhanced management of
2. To Develop and deploy a remains Networking. customer solution.
core competence building confusion
agenda. with respect 3.Use of 2.Domestic service,
to the improved
mailroom service,
3.Strengthen perception Technologies.
and program
implementation of and reality
management of
backward integration giving rise
to solution
strategy by acquiring key implementation.
discomfort.
component 4. The location
manufacturing firms. of the last
Delivery
4. Develop in-house R&D Station of
for technology absorption different
so that further innovations Service
can be made. Providers
also raises
the issue of
establishing
the exact
distance to
the intended
location of
delivery and
hence there
is a
dilemma in
the mind of
the
customer.
3. The
company
ensured that
the Delivery
Gateways
have vehicles
in addition to
their routine
delivery
operations to
ensure the
committed
transit
schedule and
avoid any
service
related issues.
128
1.Development of 1 .Earlier the 1.Growth in 1. IT solutions
Perfor- service was the density of
sustainable competitive including EDI has to
mance advantage through core available to visitors been setup for billing,
only 3PL availing the
competence building. regular pickup and
customers. CICs services
. delivery, track and
However,
2.Higher customer trace/regular activity
now
satisfaction by way of 2.Boost to all- reporting, and same-
Safexpress
innovation to meet local has extended round day uplift.
needs. this service to development
all of its of these 5.Developed
3. Dependence on imported customers. backward
competencies to face
technology is minimized. region
through ICT. the completion.
2. Safexpress
started
operating s on 3.Increase in
the concept of substantive
'Hub & revenue.
Spoke' Model.
4.Time,
3. Safexpress money and
delivered effort saving .
goods to the
consignees on
the Scheduled
Network of
over 610
locations
through 245
Delivery
Gateways.
129
5.2 Suggestions & Implications
During the study, a due care has been taken even though there are some limitations.
The study was conducted on a sample of 100 respondents because it was restricted to
Indore region only. The same study can be replicated in state or in multiple states.
Here in the study only the perception of consumers is taken, it is suggested that
internal employees of LSPs can also be considered for the study.
130
5.3 Expected Benefits of Study
1. On the basis of findings of the research, the LSPs may concentrate upon the
ten factors explored in the study to evaluate themselves and can identify their
weak area on which organizations may work upon for improvements.
2. Society may be benefitted as they may understand that these are the
parameters to be considered for evaluating LSPs.
3. Researchers may use this study as the base study and they may undertake
similar study on a larger sample or in other industry.
5. Economies of scale may be introduced with the existence of proper Sales Tax
Structure.
7. With the use of IT tools such as EDI. RFID, ERP, GIS and GPS the services
like on time delivery, transparency, visibility and real-time tracking ability
may be increased.
8. Indian shippers are gradually will become more aware of the benefits of
logistics outsourcing. They will realize that customer service and delivery
performance are equally important as cost to remain competitive in this global
economy.
9. With the emerging globalisation and integration of Indian market with the
global market, Indian companies are increasingly demanding services at par
with global standards. In thsi sitaution by offering quality services, LSPs may
have good opprtunity to enter into the untapped market.
131
10. LSPs may design, develop, provide and manage their customer-specific
requirements.
11. Indian LSPs may offer integrated global supply chain management, analysis,
re-engineering, freight payment and full seamless execution via a joint service
offerings.
5.5 Conclusion
Present study resulted in a Reliable (0.82) and Valid (0.905) Tool to measure Supply
Chain Effectiveness and Competitiveness of Logistics Service Providers.
132
It explored 10 factors of Supply Chain Effectiveness namely Conformance to
Quality, Commitment, Information Adequacy & Availability, Concern,
Accuracy, Consistency, Technological Updation, Error Handling Efficiency,
Speed and Promptness.
133