Logistics - Services Marketing

Mangesh Sarfare Joseph Selvaraj Sikandar Pote Shakti S Rathore Sujal Shah Suryaprakash Sharma Jaspreet S Nagi

Prof Gautam Agarwal

Supply Chain Management

Supply Chain Management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. (Stanford Supply Chain Forum) Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption

Logistics Management

Logistics is the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements* Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and security.
* Council of Logistics Management - UK

Elements of Logistics Management

Transportation (Air, Land, water) Order Processing Warehousing Inventory Management Packing Material Handling Information Flow Customer Service

Importance of Logistics Management

Effective logistics management leads to: Reduced Operational Costs Improved Delivery Performance Increased Customer Satisfaction Organizations become more competitive in terms of cost, quality, delivery & flexibility.

Importance of Logistics Management Todays Scenario

Globalization sourcing, manufacturing & distribution on a large scale. Focus on core competencies. Third Party Logistics gaining importance.

Evolution of Logistics in India

Logistics in India

The Indian logistics sector, as elsewhere, comprises the entire inbound and outbound segments of the manufacturing and service supply chains. The Indian Logistics Industry is valued at approx US$ 140 billion and is expected to grow @ 20% yoy However majority of the industry is unorganized and fragmented. This fragmented segment comprises owners and employees with inadequate skills, perspectives or abilities to organize or manage their operations effectively.

Logistics in India

Goods are transported predominantly by Road and Rail. Road transport contributes to approx 60% of the freight transport. It is preferred due to its cost effectiveness and flexibility Rail, on the other hand, is preferred because of containerization facility and ease in transporting shipcontainers and wooden crates. Sea is another complementary mode of transport. Ninety five per cent of Indias foreign trade happens through sea.

Logistics in India

Rail transport comes under the purview of the govt, however, the road transport in controlled by private players. Low cost has been traditionally achieved by employing low level of technology, low wages, poor maintenance of equipment, overloading of the truck beyond capacity, and price competition.

Steel, pharmaceuticals, food & agro-business, and auto are growing most rapidly in the national economy it is no surprise that their logistics costs have been increasing at a faster rate. The distribution practice of pushing goods down the channel might be responsible for high increase in the inventory and warehousing costs in the pharmaceutical industry.

Example

Logistics in India - Issues

High Cost Low Margin business. Absence of economies of Scale. Non-uniform tax structure across states. Multiple check-posts & bureaucratic harassment. Poor infrastructure. Low penetration of IT & lack of proper communication. Lack of skilled and knowledgeable manpower.

Logistics in India - Issues

It is estimated that while outsourced Logistics accounts for 54% of the total logistic spending in India, Organized player have only 10% of the pie. In road transportation, which accounts for biggest portion of logistics spending, 74% of the operator are small time players owning a single vehicle. In outsourced warehousing 92% of players are from unorganized sector. Even in Organized logistics, only a few have offering among multiple modes and services (Transportation, warehousing and value added services such as packaging, cold chain and custom clearance) On avg a commercial vehicle is runs at a speed of 20 miles per hour in India as compared to avg speed of 60 miles per hour in western europe and USA.

Logistics in India Future Prospects

Increased spending on infrastructure by the government. Eg Golden Quadrilateral, Free Trade and Warehousing Zones, SEZs, etc 100% FDI is allowed in this sector. Third Party Logistics business is growing at 30% Indian Economy growing at approx 8% Standard of Living growing at a face pace resulting in an increase in spending on goods and services.

Logistics in India Future Prospects

NHAI is investing about $650mn towards the development of an Intelligent Transportation System (ITS) which will make transport services on the highways (like reducing congestion, advance signaling, medical assistance, accident management, etc.) efficient and automating many processes like toll collection etc. Increased spending by Service Providers on IT and infrastructure.

Leading Players in India

DHL TNT AFL GATI

BLUE DART
DTDC ASHOK LEYLAND FIRST FLIGHT AGARWAL PACKERS AND MOVERS

Cold Chain Logistics

Cold chain is a logistic system that provides a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the food supply chain. A well organized cold chain reduces spoilage, retains the quality of the harvested products and guarantees a cost efficient delivery to the consumer given adequate attention for customer service.

Cold Chain Logistics

The Cold chain logistics infrastructure generally consists of: Pre-cooling facilities Cold Storages Refrigerated Carriers Packaging Warehousing Information Management systems (Traceability and Tracking etc.)

Objectives of Cold Chain Solutions

Cold chains are a significant proportion of the retail food market. The success of implementing cold chain management involves continual monitoring of product temperature throughout distribution and having appropriate corrective action plans in place. A streamlined, well maintained cold chain helps to: Reduce costs Improve product integrity Increase customer satisfaction Reduce wastage and returns of expired stock

Industries requiring Cold Chain Solutions

Imported Fresh Fruits and Vegetables. Exports by sea (Seafood, Meat, Poultry, Fruits and Vegetables) Chocolate Industry Dairy Industry Meat & Poultry (Domestic) Ice Cream Industry Processed Foods Frozen foods

Customer Relationship Management (CRM)

Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing and nurturing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs.

Benefits of using CRM

Understand the customer better. It increases Efficiency. Gives a Competitive Advantage. Boosts All Round Development as a single application can help different departments. Provides up-to-date information. Helps serve the customers better.

Customer Relationship Management is a prerequisite for today's business and organizations simply cannot afford to bypass this customer strategy.

Company Profile - GATI

One of the pioneers and leaders in Express Distribution & Supply Chain Solutions in India. Provides total end to end logistics solutions for businesses across varied verticals It covers 98.69% of India. Provides multi-modal network services (air, road, Ocean & Rail). Has a strong presence in Asia Pacific Region and SAARC Countries.

Company Profile - GATI

Strong IT backbone Oracle CRM, GATI Enterprise Mgmt System (GEMS), Warehouse Mgmt System (WMS)

Supply Chain Management @ GATI

Gati provides customized solutions by integrating all the four stages of business procurement, production, distribution, after sales service and reverse logistics. It provides a Made Ready distribution channel with standardization at all locations. Helps enter new markets without a large capital investment Provides companies with shelf space in over 200 locations.

Supply Chain Management @ GATI

CRM @ GATI
5 ways to track shipment: Online tracking @ www.gati.com Mobile Updates Automatic Email Updates Registered customers can get Email Updates on 3 email IDs. Through Customer Care

CRM @ GATI

GATI provides options for logging complaints through their website as well as through the customer care numbers. Tracking of complaint status can be done online. Customers can chat online with GATI Customer Care officers in case of any query. Online Requests can be given for Parcel Pick-up. Customers can find the Rates and Transit Time online itself prior to booking. Comparisons can be done online between their various services.

Innovations in the Logistics Sector

RFID Radio Frequency Identification.

Used to track-and-trace throughout the supply chain.

merchandise/assets

TELEMATICS

Used to monitor and control remote devices (e.g Shipment Tracking, Vehicle Diagnosis) Satellite tracking systems can enable operators to position and track vehicles to assist real-time planning.

Innovations in the Logistics Sector

DIGITAL ADMINISTRATION Digital Signatures are now taken as proof of delivery. Eurotunnel introduced an automatic check-in system for its vehicles. The equipment is made up of touch screens which offer information for drivers at check-in in nine European languages, automatic number plate readers and sensors which measure vehicle size. It has reduced the transaction time to just 45 secs.

Innovations in the Logistics Sector

Value added services such as warehousing, copacking, co-manufacturing, labeling, postponement and mass-customization are expanding the role and importance of logistics providers in the supply chain. Concept of 4th Party Logistics is gaining ground. These companies own the computer systems and intellectual capital and tend to offer end-to-end logistics services on a global scale.

Innovations in the Logistics Sector

Green Logistics is another area where a lot of efforts are being taken. Efforts are being made to achieve a better integration of forward and reverse chains to improve vehicle utilization and reduce emissions.

Advertising Strategies to be done by Surya

Differentiation Strategies for GATI

Focus on Cold Chain Solutions as currently there are only a handful of players in that segment. Amongst the leading players, GATI is the cheapest logistic service provider, hence a Cost Leadership Strategy can be adopted by them.

THANK YOU