summer internship project on study of 3pl

Study of Third Party LogisticsBy

Kapil MittalMBA, 3rd Sem, MarketingRoll No.: 15423MBA018

Company Mentor:Mr. Pawan RaoArea Manager

Faculty Mentor:Prof. Raj KumarDean, Director & Head

Industry Profile

Company profile

Research Methodology

Findings

Suggestions

Learning From Summer Internship

FLOW OF PRESENTATION

Industry Profile Company Profile

Research Methodology Data Analysis Findings Suggestion

Learning from Summer Internship

INDUSTRY PROFILE Logistics is the management of the flow of things between the point of origin and the

point of consumption in order to meet requirements of customers or corporations

The global logistics industry, which reported 1016 billion euro revenue in 2015, is expected to grow up to 2 per cent per year till 2020

Annual logistics cost of the world is about USD 3.5 trillion

The annual logistics cost in India is estimated to be 14.4% of the GDP, which translates into USD 140 billion assuming the GDP of India




Major PlayersINDUSTRY PROFILE

COMPANY PROFILE




Safexpress began its journey in 1997 with 9 offices and 12 vehicles, with a focus on ensuring safety of cargo

Safexpress provides logistics & SCM services to over 5000 corporate client across different business verticals

Safexpress largest fleet of over 4000 GPS Enabled vehicles, over 11 million sq. ft. warehousing space and largest network of over 620 destinations

Safexpress declared India's "Largest Logistics Service Provider" by Limca Book of Records 2003




COMPANY PROFILE Express Distribution Service FTL Campus2Home Easy2Move Retail Return Third Party Logistics Warehousing Packaging Order Processing Inventory Control Barcode, labelling and scanning Transportation Cross Docking Reverse Logistics Fleet Management Invoicing




COMPANY PROFILESTRENGTH

• Covering every square inch of India with a large network of 620 locations.

• All water proof containerized vehicles operating on more than 1000 routes, linked through 48 hubs & mega hubs, delivering more than 80 million packages a year and operating 24*7*365 days.

• “Largest Logistics service Provider in India” by Limca Book of Records in 2003.

WEAKNESS• Marketing and advertising is lesser than global brands• Lower adoption of advanced technology.

OPPORTUNITY • It has 4000 weather proof ISO-9002 vehicles which

can be used for increasing range of services • Can enter international market

THREAT• Big competitors with advanced technology• Entry and penetration of international players and

domestic players.

SWOT




RESEARCH METHODOLOGYRESEARCH PROBLEM:Logistics has been an important part of every economy and every business entity. Many companies nowadays are outsourcing their logistics function to Third Party Logistics (3PL) companies, so as to focus on their core competencies. 3PL companies face many challenges in providing those logistics services. So my research problem will be Identification of factors causing challenges in logistics services provided by 3pl companies and how to overcome these challenges. Logistics services here refer to warehouse and transportation.

RESEARCH OBJECTIVE To understand the customer perception of the delivered logistical service. To find out the major reasons for logistical service delivery gap, if any.

RESEARCH DESIGN Descriptive Research Design.




RESEARCH METHODOLOGYSAMPLING Population: Population comprises of 2 groups: 1. 3PL service providers in Delhi-NCR region 2. Customers availing 3PL services Sampling Frame: 1. 3PL service provider in Gurgaon Region 2. Customers availing 3PL services in Delhi-NCR region Sampling Technique: 1. Judgmental Sampling 2. Convenience Sampling Sample Size: 1. On the basis of market share and popularity in Delhi-NCR region, I selected various 3PL companies DHL, Safexpress, Innovative Logistics, DTDC, FedEx, Redington, FirstFlight, TCI & GATI and visited their different warehouse available in that region and met 3PL Expert of that warehouse. I met 20 3PL experts for my questionnaire. 2. From those warehouse, I got the list of their respective customers and I visited 40 of them. Instrument: Sample Survey Tool: Survey through questionnaire, personal interview




DATA COLLECTION Data used in the study is based on the primary & secondary sources.

For primary data, the technique used was through Personal Interview and Questionnaire.

Secondary data was collected from the following sources

Organization Journals Books Websites Logistics Reports




&DATA ANALYSIS & INTERPRETATIONPart A: To understand the customer perception of the delivered logistical service. 1. Which of the following objective function do you mainly outsource to a 3PL company




&DATA ANALYSIS & INTERPRETATION2. Which of the following is the service level agreement signed by your company when outsourcing logistics activity to a 3PL company?

14; 35%

20; 50%

2; 5%

4; 10%

Transaction by transaction based agreement

Formal contract of at least 1 year in length

Partnership – benefit & risk shared for agreed period

Partnership – sharing of facilities/human resource

&DATA ANALYSIS & INTERPRETATION3. Rank the following criteria in order of expectation from 3pl service providers (from 1to 14)




&DATA ANALYSIS & INTERPRETATIONSo the advantages gained by companies by outsourcing their logistical service are as follows:1. Gaining competitive edge2. Receiving customized service3. Enhancing geographic reach4. Using the expertise of a third party5. Gaining the use of sophisticated technology6. Ability to focus on core activities7. Market Expansion8. Reducing inventory & increasing inventory turnover9. Logistic cost reduction10.More flexibility in operation11.Improved customer service & timely delivery12.Developing supply chain13.Improvement in sales revenue14.Improving return of assets.




&DATA ANALYSIS & INTERPRETATION4. Rate the following 3PL service attributes in accordance to the service delivered by them to your company?




&DATA ANALYSIS & INTERPRETATION5. Are you satisfied with the quality of service delivered by your 3pl service provider

2, 5%

12, 30%

18, 45%

8, 20%

Very Dissatisfied

Quite Dissatisfied

Average

Quite Satisfied

Very Satisfied




&DATA ANALYSIS & INTERPRETATION6. Do you intend to re-engage your current 3PL service provider and why?

36; 90%

4; 10%

yes no

Out of the respondents interviewed, 90% want to re-engage their current service providers due to good reputation of companies, long term relationships, service satisfaction is committed and there is no other better option available for them in the market taking into consideration price for the service outsourced and 10% do not want to re-engage their current service providers due to high service cost, lack of communication, poor past experience and service level commitment not realized.




&DATA ANALYSIS & INTERPRETATIONPART B: To find out major reasons for logistics delivery gap, if any.7. Material Handling Equipment used by your company in warehouse?Ans :Material Carrying Equipment’s:• Pallet jack• Walkie stacker• Fork lifts Unit Load Formation Equipment’s:• Pallets• Pallet and skid boxes Storage Equipment’s:• Pallets• Simple racks• Push back racks in bins Identification and Control Equipment’s:• Barcode Scanner




&DATA ANALYSIS & INTERPRETATION8. How are orders managed in a 3pl warehouse of your company?




on hourly basis

on daily basis

seasonally

schedule picking

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

&DATA ANALYSIS & INTERPRETATION9. What are the major issues encountered by your company when performing inbound logistics?Ans: On the basis of survey, major issues encountered are :• Interchange of consignment• Wrong barcode on cartons• Wrong quantity received i.e. in shortage or in excess• Damaged item received10. What are the major issues encountered by your company while processing orders in warehouse?Ans:On the basis of survey, major issues are that encountered are:• IT integrated system error• Warehouse setup• Product theft• Wrong packing• Product damage• Item out of stock




&DATA ANALYSIS & INTERPRETATION11. What are the major issues encountered by your company when performing outbound logistics?

Ans: On the basis of survey, major issues that are encountered are:• Product damage• Wrong item send• Shipping delay• Wrong address shipped to• Wrong tracking code• Wrong quantity shipped




&DATA ANALYSIS & INTERPRETATION12. How often do these issues occur in your warehouse?Ans:




Daily; 9; 45%

Weekly; 1; 5%Monthly; 2; 10%

Quarterly; 8; 40%

DailyWeeklyMonthlyQuarterlySeasonally

&DATA ANALYSIS & INTERPRETATION13. What measures have been taken in place to either minimize or eliminate the issues that you are facing?Ans: Proper Training is being given to employees so that less number of error occurs and new technology is being adopted to make every process fool proof.

14. How challenging is it for a 3PL company to deal with its customers?




1; 5%

18; 90%

1; 5%

Very EasyEasyMediumToughVeryTough

&DATA ANALYSIS & INTERPRETATION15. To what extent does your company has the ability to solve problem of its customers?




Highly Competent, 20, 100%

Less CompetentCompetentHighly Competent

&DATA ANALYSIS & INTERPRETATION16. To what extent should these factors in the warehouse be maximized to deal with issues that come up in warehouse?




&DATA ANALYSIS & INTERPRETATION17. Is your warehouse under CCTV surveillance?




14; 70%

6; 30%

yes

no

&DATA ANALYSIS & INTERPRETATION18. Does your company use WMS(Warehouse Management System)?




9,45%

11,55%

yes

no

&DATA ANALYSIS & INTERPRETATION19. Using WMS can help 3PL Company overcome the problems in warehouse. If you agree, please explain how?Ans:WMS is a software application that supports the day to day operations in a warehouse. WMS enables centralized management of tasks such as tracking inventory levels and stock locations. Proper stock placement makes best use of your valuable space and also optimises operator work paths. WMS is a very optimized process. WMS is a system that contains the blueprint of the warehouse which shows where which stock is kept. A comprehensive warehouse management system helps streamline multiple functions of your enterprise:• Receiving – Gain insights into shipments that have been delivered. It makes sure that items at low stock levels are

staged and put away first, reducing the impact of out-of-stocks and inefficient fulfilment processes.• Put-Away – Know the location of all inventory on your shelves. Route your workers to the right location, set up their

picks in the proper order to minimize travel time, and increase the number of orders they can pick each day.• Picking – Improve error-proofing and productivity in the picking process. Workers receive their picks on a mobile device

that routes them to the proper location. Scanning items when you pick them verifies that the right item at the right quantity is picked.

• Packing – Ensure the accuracy of each order that is picked and reduce material costs by determining the right sized shipping carton.

• Shipping – See that each order is properly packaged and shipped to the right destination and delivered on the right date.




&DATA ANALYSIS & INTERPRETATION20. Does your company use GPS track enabling system?




19,95%

1,5%

yesno

&DATA ANALYSIS & INTERPRETATION21. Does your company use TMS (Transport Management System)?




16; 80%

4; 20%no

yes

&DATA ANALYSIS & INTERPRETATION21. Using TMS can help 3PL Company overcome the problems it encounters while delivering consignments. If you agree, please explain how?Ans:TMS typically sits between an ERP and WMS. The ERP application passes inbound and outbound orders to the TMS application which then determines the optimized transportation routing. The TMS evaluates the pool of orders, consolidates them into shipment and determines the optimal mode/lane/carrier/route assignments to minimize transportation expense within the required customer service level constraint. TMS help companies reduce transportation spend and optimize their operations by handling basic payment, auditing and route scheduling, carrier optimization and fleet management.




FINDINGS




• Warehouse, packaging, order processing, transportation and sales return are the most outsourced services by customer

• Transaction by transaction based agreement and formal contract of at least one year in length are the major service level agreement signed by customer company.

• Gaining competitive edge, Receiving customized service , Enhancing geographic reach, Gaining the use of sophisticated technology and ability to focus on core activities are the major advantages gained by any company by outsourcing their logistical service.

• Most of the customer agree that 3PL providers are approachable, easy to contact, complete a task by certain deadline, have required skill and knowledge to perform the service.

• Only some customers are satisfied with the quality of service delivered.• Most of the customer want to re-engage their current service provider due to good reputation of

company, long term relationship, service satisfaction is committed and there is no better option available for them in the market taking into consideration price for the service outsourced.

• Mostly order are managed in warehouse on daily basis and schedule picking.

FINDINGS




• Interchange of consignment, wrong barcode on cartons, wrong quantity received, Wrong packing , product damage, wrong item send , shipping delay are the major issues encountered by logistic companies.

• Labour utilization and accessibility of all material are the factor that should be maximized in warehouse to deal with issues in warehouse.

• Most of the companies do not use WMS and TMS in their companies . They feel that doing the task manually is much easier but many issues come up while doing these task manually.

SUGGESTIONS




• Company should work towards improving the level of service offered so that the customers are highly satisfied and this would bring in more customers.

• Companies should try to overcome the issues that come up in warehouse by adopting the required technology, so that every process is fool proof, competitive and attract new users.

• Companies should adopt WMS (Warehouse Management System). A warehouse management system is used to control and track the transfer and storage of materials in a warehouse. The system involves a number of processes that are important when shipping, receiving, or even putting away materials and integrates with other systems in the supply chain to ensure data transparency throughout your enterprise. The WMS will facilitate the tracking of the product through moves and cycle counts while in the warehouse, then finally be picked and sent to either the shipping system or Transportation Management System to route the trucks. The entire time Enterprise Resource Planning system will be tracking the values, orders, sales, and invoices with all of the systems.

• Companies should adopt TMS (Transport Management System) A TMS typically sits between an ERP and WMS. The ERP application passes inbound and outbound orders to the TMS application which then determines the optimized transportation routing. The TMS evaluates the pool of orders; consolidates then into shipment; and determines the optimal mode/lane/carrier/route assignments to minimize transportation expense within the required customer service level constraints. TMS help companies reduce transportation spend and optimize their operations by handling basic payment, auditing and route scheduling, carrier optimization and fleet management

• Proper Training should be given to labor so that they do the work properly and no more issues come up because at the base level all the material are managed by the labors on the instructions of the supervisor.

LEARNING FROM SUMMER INTERNSHIP




• Discipline.

• Patience is a virtue

• Time Management

• Coping up with change

summer internship project on study of 3pl

Leadership & Management