Jaypee Business School

A constituent of Jaypee Institute of Information Technology

(Declared Deemed to be University u/s 3 of UGC Act)
A-10, Sector 62, Noida (UP) India 201 307
www.jbs.ac.in

Logistics and Warehousing

Corporate Internship Report
Internship Report submitted as a partial requirement for the award of the two year
Master of Business Administration Programme
MBA 2012-14

Name: Nitin Sharma

Central Warehousing Corporation, Inland Container Depot, Patparganj
Corporate Internship Supervisor: Mr. Anang Pal, Manager
Mr. V.K Dikshit (IMPORT)
Manager
JBS-Faculty Supervisor: Dr. Rajnish Kumar Misra
Start Date for Internship: April 17th, 2013
End Date for Internship: June 18th, 2013
Report Date: July 1st, 2013

SELF CERTIFICATE

This is to certify that, I Nitin Sharma have completed the project report titled
LOGISTIC AND WAREHOUSING under the guidance of Mr. V.K. Dikshit,
for the fulfilment of the award of MASTER OF BUSINESS
ADMINISTRATION from JAYPEE BUSINESS SCHOOL, NOIDA.This is the
original piece of work and i have neither copied it from anywhere nor submitted it
earlier elsewhere.

Nitin Sharma
(12609199)
MBA 1st year.

ACKNOWLEDGEMENT

I wish to express my gratitude to those who, in some or the other way, helped me in
accomplishing this challenging project on LOGISTICS AND WAREHOUSING.

No amount of written expression can show my deepest sense of gratitude to my mentor

MR. V.K. DIKSHIT (IMPORT MANAGER) who motivated me to receive enormous amount
of input and inspiration at the various stages during my project preparation and assisted me in
bringing out my project in the present form.
I thankfully acknowledge an active support by my mentor who overwhelmingly shared his
knowledge with me and strengthened my conceptual framework.

I also thank MR N.K VINAYAK, who has sincerely supported me with the valuable insights
into the completion of this project.

I am also thankful to all the Faculties of MASTER OF BUSINESS ADMINISTRATION from

JAYPEE BUSINESS SCHOOL, NOIDA. Who supported me in various ways and enlightened
me about the valuable information pertaining to my project work.

Nitin Sharma
(12609199)
MBA 1st year

TABLE OF CONTENTS

1. Executive Summary
2. Introduction & Objectives
3. Companys Profile
4. Industry Analysis
5. Financial Analysis
6. Detailed Study/ Research Project
7. Conclusion & Recommendations
8. Key Learnings
9. References

EXECUTIVE SUMMARY

This project has been a great learning experience for me at the same time it gave me enough
scope to implement my analytical ability. This project was undertaken with the sole objective to
study LOGISTICS AND WAREHOUSING, and the associated with IMPORT AND EXPORT.

Under this project the methodology adopted was focus discussion and close observation through
in-house study and data is collected from various primary and secondary sources.
CENTRAL WAREHOUSING CORPORATION (CWC) a premier Warehousing Agency in
India, established during 1957 providing logistics support to the agricultural sector, is one of the
biggest public warehouse operators in the country offering logistics services to a diverse group of
clients. It operates in all the major components of Logistics, but has a very strong hold on the
Warehousing segment. CWC also offers services in the area of clearing & forwarding, handling
& transportation, procurement & distribution.
INLAND CONTAINER DEPOT (ICD) PATPARGANJ offers services in the area of handling &
transportation, Warehousing, clearing & forwarding from customs, shipping line and Bank
payment. Main objective of ICD PPG is to offer all the logistics services under the one roof.

The challenges facing warehouse management today has been greater than before due to
globalization, shorter lead time, high customer service level and changing market trends. As a
result, the role of warehouse has changed just from storing and issuing of goods to important
strategic roles. Today warehouse must operate with high efficiency to meet the various
requirements in a logistics system. As a result, many companies are investing in information
technology tools such as warehouse management system (WMS), bar code, RFID and EDI in
their operations to ensure the information flow is smooth to collect and plan the warehouse
operations.

INTRODUCTION
Logistics services market India is on a growth trajectory owing to rapid globalization and 100%
FDI allowance. Logistics services broadly encompass courier services, freight forwarding, third
party logistics and reverse logistics. Growth in international trade is providing huge impetus to
the demand for the logistics services. Growing competition in retail sector transcends need of
reverse logistics to handle returns and store up gradation. Third party logistics providers need to
customize their services and charge competitive rates to benefit from retail boom in India.
One of the major segments contributing to a rapidly growing logistics industry is the
warehousing business. The growth in international trade coupled with the rise in containerization
levels has led to high demand for warehouses. This creates tremendous opportunity for the
private sector. The market, which is valued at INR 20 bn, is expected to grow due to the demand
generated by importers and exporters for specialized services. The report begins with an
overview of the industry indicating market size, growth, current state of the market and the
infrastructural resources available. The report highlights various types of warehouses,
categorized on the basis of ownership and usage.

THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM:

The warehouse is where the supply chain holds or stores goods.

Objectives of warehousing include
Transportation
consolidation
Product mixing
Docking
Service
Protection against contingencies

OBJECTIVES:

The main objective of this project report is to get the practical knowledge of functions

in logistics.
To know the significance of Warehouse management in the logistics industry.
To find the strength, weakness, opportunities, threats of the warehouse management
system.

SCOPE OF THE REPORT:

The report covers the overview of Indian logistics industry,

Study of marketing aspects of ICD (ppg).
To understand the logistics process in CWC-ICD (ppg).
Analysis of Warehouse Management of ICD (ppg).
To Analysis the Marketing, Operational (Export/Import process), Financial
Aspects ,MIS and Record management of CWC- ICD(ppg).

PROJECT DETAILS
The present storage capacity available with CWC is 10.65 million tonnes, which comprises of
agriculture warehouses, container terminal, air-cargo complexes and industrial warehouses.
There is potential growth in all the four types of warehouses. To make a strong foothold in the
field of Industrial warehousing and to keep CWC ahead of its competitors in the field of storage,
to create a Warehouse Management System with an integrated RFID-based technology that
will improve the entire inventory handling process by providing an automated, systematic and
accurate warehouse management cycle that is error-free, efficient and updated real-time.

COMPANY PROFILE

NAME: Central Warehousing Corporation (CWC)

LOGO:
INDUSTRY: Logistics and Warehousing
CORPORATE & REGISTEED OFFICE:
Central Warehousing Corporation,
4/1 Siri Institutional Area,
Hauz Khas, New Delhi-110 016

WEBSITE: cewacor.nic.in
Central Warehousing Corporation (CWC), a premier Warehousing Agency in India, established
during 1957 providing logistics support to the agricultural sector, is one of the biggest public
warehouse operators in the country offering logistics services to a diverse group of clients.
CWC is operating 492 Warehouses across the country with a storage capacity of 10.80 million
tonnes providing warehousing services for a wide range of products ranging from agricultural
produce to sophisticated industrial products.
Warehousing activities of CWC include food grain warehouses, industrial warehousing, custom
bonded warehouses, container freight stations, inland clearance depots and aircargo complexes.
Apart from storage and handling, CWC also offers services in the area of clearing & forwarding,
handling & transportation, procurement & distribution, disinfestations services, fumigation
services and other ancillary activities. CWC also offers consultancy services/ training for the
construction of warehousing infrastructure to different agencies.
Though the corporation was established with the main objective to provide scientific warehouse
facilities for the agricultural produce, in course of 60 years of its existence its mission has
undergone a change. Its mission is not only to provide warehousing facilities but also logistics
service and related activities with value added services to a multi clientele. It is emerging as a
leading market facilitator by providing integrated warehousing infrastructure and other logistic
services.

MISSION
To provide total quality service in the field of warehousing, logistic services and related activities
with value addition to the customers satisfaction.
VISION
To emerge as a leading market facilitator by providing integrated warehousing infrastructure and
other logistic services, as a support to Indias economy with emphasis on customers delight.
OBJECTIVES
a. To meet the changing needs of agriculture, trade, industry and other sectors by
providing scientific warehousing,

logistic services and related infrastructural

facilities.
b. To assist in the implementation of the Warehousing (Development & Regulation)
Act, 2007 with a view to expand credit through banking institutions against
warehoused goods.
c. Efficient human resource management in order to enhance productivity &
customers satisfaction and reduce losses during warehousing & distribution.
d. To be a major player in providing pest control services.

Services Provided:
Storage:
Scientific storage and handling services for more than 400 commodities include Agricultural
produce, Industrial raw-materials, finished goods and variety of hygroscopic and perishable
items.

Scientific Storage Facilities for more than 200 commodities including hygroscopic and
perishable items through network of 465 warehouses in India with its 5,200 trained
personnel.

Import and Export Warehousing facilities at its 36 Container Freight Stations in ports and
inland stations.

Bonded Warehousing facilities .

Disinfestation services.

Handling, Transportation & Storage of ISO Containers.

Services at ICD / CFS

1) Exports
i) Receipt of export cargo
ii) In-House customs examination
iii) Export cargo aggregation and storage
iv) Preshipment Disinfestations of containers as well as of export cargo.
v) Cargo stuffing under custom supervision
2) Imports
i) Movement of Import containers from the port
ii) De-stuffing of LCL and FCL containers
iii) Customs Examination
iv) Bonded Warehousing facilities
Bonding Facility
CWC operates 66 Custom Bonded Warehouses with a total operated capacity of nearly 0.42
million Mts. The concept of custom Bonded Warehousing has been promoted with a view to

facilitate deferred payment of custom duty to encourage entrepreneurs and export oriented units
to carry out their operations with least investment.
These bonded Warehouses are located all over the country at places well - connected with the
port towns for smooth movement of goods to and from the discharge points.
Container Train Operations
With a category-I licence from the Indian Railways for running container trains on pan India
basis, CWC is presently operating container trains transporting EXIM containers between Loni
(Delhi) - J.N.Port (Navi Mumbai) and Loni - Mundra. CWC runs about 300 trains in these
sectors and handles about 26,000 TEUs annually. It is also operating Container Rail Terminals at
Loni and Kalamboli (Navi Mumbai ) on PPP model.
These terminals are also being used by other train operators as common user facility.
Air Cargo Complex
Ambitious expansion of CWC over the years has also brought CWC in the operation of Aircargo
Complexes which is a major step towards providing complete services as a multi-modal transport
operator.Presently, CWC is operating 4 Aircargo Complexes at the International Airports of
Amritsar, Goa, Singanallur and Virugambakkam besides managing the accompanied/mishandled
cargo warehouse at Indira Gandhi International Airport at New Delhi.
Railside complexes
Railways has vast network for not only operating passenger trains but also for freight movement,
an imminent need was assessed to augment the utilization level of Railway transportation system
so as to reduce the pressure on road traffic by making it cost effective and efficient operation for
the trade. As such, concept of Rail Side Warehousing facilities was evolved by the Corporation
as value addition to the rail transport system which extends benefits to the users in avoiding
multiple handling of their stocks and resultant escapable losses on this account; curtailing
handling cost and having a hassle free efficient operation.

For transforming the concept into tangible shape, CWC successfully developed a pilot project of
Rail Side Warehousing facility at Whitefield, Bangalore in association with South Western
Railway in February 2002 and on the strength of fruitful effect of this project on the front of
increase in traffic/freight revenue and the kind of satisfaction that trade enjoyed out of it on
availing this value added services in the arena of rail transportation, CWC and Ministry of
Railway joined their hand in the avenue of developing Rail Side Warehousing facilities at 22
strategic locations of Railway Terminal to provide better services through total logistic solution
to Rail users for, not only to attract additional traffic, but also to provide a cost beneficial and
efficient transport cum storage service to the trade under single window concept.
A subsidiary in the name of Central Railside Warehouse Company Ltd. Was incorporated
on 10.07.2007, under the Companies Act 1956 which commenced its business on 24.07.2007.
Disinfestations and Pest Control Services
Govt. Of India, vide Notification dated 23rd March 1968, entrusted additional responsibility to
CWC to undertake Disinfestations/Pest Control Services beyond its warehouses in respect of
Agricultural produce or other notified commodities.
Over the years, CWC has developed the expertise in Pest Management in the following areas

Storage Pest Management.

Container Fumigation.

Ship Fumigation(on Board)

Pre-shipment fumigation of Export Cargo Rail Coach disinfestations

Aircraft disinfestations

Disinfestations of Hotels & Restaurants

Disinfestations of Commercial Complexes & Office premises.

Disinfestations of Airports & Ports

Disinfestations of Delhi Metro Rail Premises

CWC the only organization in the public sector recognized by the Directorate of Plant Protection
Quarantine and Storage, Ministry of Agriculture, Govt. Of India as well as the Export Inspection

Council of India to undertake Pre-shipment fumigation and Ship (on board) fumigation of
exportable commodities. CWC earned a major breakthrough in infestations of aircrafts of Air
India using timer device. CWC has thus earned the status of a National Pest Control Agency.
CWC has taken lead in accreditation of its pest control operators under newly introduced
National Standards on Phytosanitary Measures NSPM 11 & 12 to facilitate MBr fumigation
treatment of export/import cargo carrying wood packaging material (WPM) in compliance to the
FAO/IPPC guidelines issued through International Standard on Phytosanitary Measures ISPM
-15. Under this accreditation regime, the Corporation is catering to quarantine treatments at the
following major centres:CFS-JN Port

CFS-Panambur (Mangalore)

CFS-Tuticorin (Tamil Nadu).

ICD-Patparganj (Delhi)

CFS-Tuticorin (Tamil Nadu).

CW-Nampally (Hyderabad)

CFS-Chennai

CW-Kakinada (Hyderabad)

CFS-Adalaj (Ahmedabad)

CWC-Regional Office, Bhopal

CFS-Kandla Port (Gandhidham)

CWC-Regional Office, Kolkata

CFS-Vizag

CW-Cochin (Hyderabad)

CFS-Whitefield (Bangalore)

CWC-Regional Office, Mumbai

Inland Container Depot (Patparganj)

Central Warehousing Corporation having consolidated its growth in the field of conventional
warehousing, realised the need and importance of Inland Clearance Depot / Container Freight
Stations which are an essential infrastructure for increasing containerization and hence decided
to establish india's first dry port at ICD, Patparganj way back in 1985 which is a single window
clearing place for Imports and Exports.

The Inland Container Depot, Patparganj, Delhi was commissioned on 25-02-1985. It is located
1525 km. From gateway ports of JNPT / NSICT /GTI &1100 km. From Mundra port. A brief
note showing the infrastructure facilities available at ICD, Patparganj .
LOGISTICS SUPPORT
M/s Suman Forwarding Agency (P) Ltd. have been appointed as handling & transport contractor
for handling & transportation of ISO Containers between ICD-PPG to ICD-Loni / TKD /
including handling / transportation of factory stuffed containers

ICD-Loni 26 KM.
ICD-Tughlakabad 28 KM.
Gateway Port JNPT/ NSICT / GTI 1525 KM.
Gateway Port Mundra 1100 KM

Central Warehousing Corporation having consolidated its growth in the field of conventional
warehousing, realized the need and importance of Inland Clearance Depot / Container Freight
Stations which are an essential infrastructure for increasing containerization and hence decided
to establish Indias first dry port at ICD, Patparganj way back in 1985 which is a single window
clearing place for Imports and Exports.
Capacity
COVERED
OPEN
TOTAL

Capacity of Container Yard

AT 2 STACK HIGH AT 3 STACK HIGH -

27293 MT
10812 MT
38105 MT

622 TEUs
933 TEUs

INDUSTRY ANALYSIS

LOGISTICS INDUSTRY IN INDIA

India has become the prime destination for logistics service providers all over the world. The
demand for logistics services in India has been largely driven by the remarkable growth of the
economy. The growth is being projected at 9-10 per cent in next few years, with the
CAGR(compounded annual growth rate) expected to grow at a rate of 7-8 per cent. This growth
is expected to gain greater momentum due to the exponential growth of the Indian economy.
India is also experiencing a big retail boom as the buying capacity of the middle and upper
middle segment of the population has scaled new heights. Many large multinationals from the
retail industry are planning to set up operation in India and large local retailers are also planning
to expand their operations. But with the infrastructure largely under-developed and incapable of
catering to a growing economy, logistics management in India becomes too complex. The poor
condition of infrastructure directly translates to higher turnover, pushing up the operating costs
and reducing efficiency. There are other problems such as complex regulatory compliance and
limited adoption and utilization of technology, which has resulted in increased paperwork and
inability to communicate effectively with customers. In spite of dismal infrastructural scenario,
the hopes of the logistics sector are kept up by the various upcoming infrastructural projects like
logistics parks and hubs and other initiatives by public and private sector. The future of the
logistics sector depends not only on the continued development of infrastructure but also on the
capability of the service providers in adapting themselves and making optimal utilization of
technology. India is emerging as one of the worlds leading consumer market with the raise of
middle income group. Estimated at US$991 billion in 2020, Total consumption expenditure is
expected to grow to nearly US$ 3.6 trillion in 2020. Food, housing & consumer durable and
transport &communication are expected to be the top 3 categories, accounting for 65% of
consumption in2020. The FMCG sector alone is expected to grow at a base rate of 12 % annually
to become an INR 4000 billion industry by 2020. The logistics sector is expected to play an
important role in accessing this emerging market and enabling this growth.

INDUSTRY TRENDS
Transportation:

Container cargo represents only about 30% (by value) of Indias external trade-much lower when
compared with the global containerized cargo average of 70-75%. At a growth rate of 12%,
Indias container cargo traffic is estimated to reach 15 million TEUs by FY16E from about 7.5
million TEUs now (at 12 major ports). In comparison, China has created capacity at its ports to
handle more than 100 million TEUs a year. Out of the 15 mn TEUs of total container traffic, we
estimate EXIM rail container traffic to be 5 mn TEUs by FY16E. This would be a huge
opportunity and will significantly benefit container rail operators. Rising investment in the rail
and port spaces also fuels growth in allied industries like wagon manufacturing, port handling
equipment, railway electrification systems and construction companies. To reduce the
transportation cost and for quicker movement of cargo Multimodal transport operation is
introduced (MTO). MTO helps exporters with less documentation for instance single document
for all modes of transport.

Third Party Logistics (3PL):

Outsourcing is everywhere. Logistics industry is no exception. Logistics services like
transportation, warehousing, cross docking, Inventory management, packaging and freight
forwarding all are part of third party logistic services. Companies in India currently outsource an
estimated of 52% of logistics. And 3PL industry is estimated to be US$1.5bn in FY14. 3PL
represents only 1% of logistics cost emphasis its significance in the industry. Future is no doubt
lying in outsourcing. As the growth in the 3PL market is expected to be in the range of 25-30%
CAGR over FY11-14E. As of now, the 3PL activity is limited to only few industries like
automotive, IT hardware, telecom and infrastructure equipment. The organized 3PL market in
India can be categorized into three major segments public sector, private sector and foreign
entrants. Some of the major players in each category are: TVS logistics, DIESL (TATA),
Panalpina, TCI, Gati, Allcargo, V Trans, Total, VRL and Reliance etc.

Private Participation:

The industry is becoming more competent with the entry of global giants like Gazeley Broekmen
(Wal-Marts logistics partner), CH Robinson and Kerry logistics and large Indian corporate
houses like Tata, Reliance and Bharti group. A series of mergers and acquisition like DHL
acquired Blue Dart, TNT acquired Speed age Express Cargo Service and Fedex bought over
Pafex, are also leading to consolidation industry at various levels and segments. Many of these
companies are planning to broaden their areas of operation and are also planning to develop their
own logistic parks across the country. If the trend continues as per the estimates, the market share
of the organized logistics players is expected to double from 6% in2013 to approx. 12% by 2020.

Express logistics:
Organized players have monopoly over the express logistics industry. 65%of express business is
in the hands of organized players, while semi-organized and unorganized players accounts for
25% and the remaining 10% of the market by EMS Speed Post. But altogether different picture
can be witnessed in the domestic segment. In domestic front, unorganized players hold 41% of
the market share based on price advantage. While organized players accounts for 45% and EMS
Speed Post the remaining 14%.

Warehouses:
Recently, warehouses have become key growth drivers in the logistics industry. Apart from
conventional storing services, warehouses now providing value-added services like consolidation
and breaking up of cargo, packaging, labeling, bar coding and reverse logistics etc. warehousing
and related activities account for approx. 20% of the total logistics industry. Most of the
warehousing space in India lies with unorganized players in domestic front, which is causing
wide supply and demand gap in storage space. According to KPMG, an additional120million
square feet of warehousing space is needed by 2013 to bridge this gap. Currently, the organized
warehousing industry in India has a capacity of approx. 80millionmetric tonnes and is growing at
35 to 40 per cent per annum. An investment of approximately US$ 500million is being planned
by various logistics companies for the development of about45million square feet of warehouse

space by 2013.Many players in this segment such as Multimodal Logistics Park, Mega Food
Parks and Free Trade Warehousing Zones have planned next generation storage models.
Logistic parks:
About 110 logistics parks spread over approximately 3,500 acres at an estimated cost of $1 bn
are expected to be operational and an estimated 45 mn ft2 of warehousing space with an
investment of $ 500 mn is expected to be developed by various logistics companies
by2020.Majority of these logistics parks are planned in close proximity to state capitals.
However, availability of large land parcels at relatively low cost, connectivity to multiple
markets across states and industrial clusters has led to the emergence of some tier-2 and tier-3
cities as favored destinations for the development of logistics parks and warehouses.

Government Initiatives and regulations Initiatives:

To emphasis the significance of transportation in logistics industry and to increase the
competence in the sector government introduced private participation, especially in port sector.
The major initiative in transport infrastructure is introduction of National Maritime Development
Program (NMDP) with an investment of Rs 568bn. NMDP would be addressing the challenges
of the growing international traffic demand of the country along with developing the port
facilities at par with world standards. While liberalizing the railway services, government opened
the doors of container business to the private parties. A total of 15 players immediately entered
the market.
FDI regulations

In general 100% FDI under the automatic route is permitted for all logistic services
FDI up to 100% subject to FIPB approval is permitted for courier services.
FDI up to 49% under the automatic route is permitted for air transport services, including air

cargo services.
100% FDI is permitted in Ports and Harbours under automatic route
100% FDI is permitted under the automatic route for storage and warehousing including

warehousing of agricultural products with cold storage.

100% FDI is permitted in transport and transport support services through automatic route.

Indian Logistics Industry- Future Trends

There have been several key indicators to the future trend in the Indian logistics sector. The
demand for logistics services has been largely driven by the remarkable growth of the Indian
economy. Logistics spend in India is estimated to be around 13% of the GDP, which is
comparatively higher than other developed countries.
The air transport sectors contribution has been around 0.2 per cent of the countrys GDP, while
the transport sectors contribution to the GDP has been growing over the last couple of years.
Indias air cargo is predicted to grow at over CAGR of 11.5 per cent in the next few years. The
contribution of the marine transport sector has also been around 0.2% to the countrys GDP.
The sectors contribution to the GDP has been increasing mostly because of the growing
economic developments in the country. The role of the shipping industry in the growth of Indian
economy has been very significant. Major ports in India together have handled around 500
million tonnes of cargo in the past two years and this figure is growing significantly.
The Indian railways has realized the necessity to improve the infrastructure provide better
service. The plan to develop Logistics Parks or hubs has the potential to streamline and optimize
the supply chain and reduce the costs. Currently around 80% of the goods in India move by road,
the railways has to essentially devise plans to divert this traffic to the rail.
Indias logistics sector attracted huge investments, leaving behind some of the major sectors
including aviation, metals, and consumer durables. The growths in the retail and manufacturing
industry, commodity markets and development of SEZs have been key factors in the growth of
Indian logistics industry. Recent studies have indicated that the Indian logistics industry is
expected to grow annually at the rate of 15 to 20%. A number of infrastructural projects
involving warehouse and logistics parks are being undertaken are expected to be operational in
the next 2-3 years.
The setting up special economic zones (SEZs) has led to increased logistics activities around
them. Several logistics parks have come up at locations like Mumbai, Kolkata, Chennai and
Hyderabad because of their excellent port, rail, and road connectivity and are witnessing
significant investment in infrastructure. Many of the large logistics players are in the process of

setting up warehouses, container freight stations (CFS), inland container depots(ICD), logistics
parks, distribution centers and other facilities to leverage the abundant opportunities. Increase in
foreign trade is expected to further accelerate the demand for logistics services.
The future of the Industry is very bright and is sure to witness exponential growth in the coming
years. The increased participation of both public and private sector is crucial for developing
logistics and improving supply chain management. Not only do the logistics companies need to
create efficient business to thrive in the logistics sector, but they also need to explore ways for
investing energy, costs and time to grow a strong logistics system.

Logistics Industry Structure

ICLMER n ixo quld apn uli tnard i eadmn si n sCl o e o g r n i st ta i c n s e r D e p o t ( I C D ) a n d

LCoHlFm rodage anuir gsltk athe i gct n es e r F r e i g h t S t a t i o n
Industry Snapshot

The Indian Logistics Industry is estimated at US$ 125 billion in 2010

Generated employment for 45 million people
The industry is expected to grow annually at the rate of 15- 20 per cent, reaching

revenues of approximately $ 385bn by 2015.

Highly Unorganized with organized sector responsible only for 6%
Market share of organised logistics players is also expected to double to
approximately 12 per cent by 2015

The size of the 3PL industry is estimated to be~US$1.5 bn in FY11 (1% of logistics

cost).
The share of 3PL services is expected to increase from 6% in FY06 to 13% in FY11,

at a CAGR of 25%
Logistics costs are 10-20% of GDP
Indian Infrastructure is rated 54th among the 59 countries -- Road : 56/59, Rail:
25/59, Seaport: 51/59, Airport: 40/59

Elements of Logistics cost

Transportation 35%
Inventories 25%
Losses 14%
Packaging 11%
Handling and Warehousing 9%

Key Opportunities

Indian Logistics : Key Challenges

1. Geographical Coverage Insufficient :
Insufficient distribution channels/infrastructure bottlenecks restrict the scope to
reach consumers of products nationwide.
2. Over-burdened ports
India has a long coastline. However, the countrys port system isnt utilized
properly. 70% of the seaborne trade is managed by 2-3 of its 12 major ports.
Remaining 185 minor ports in the country are largely underutilized
3. Warehousing investment is low
The infrastructure including roads, airports and seaports are preliminary the main
target areas of investment. However, warehousing, a facilitator for the agricultural
sector, has attracted lower investment that reduced its pace of growth in
comparison to rising farm output
4. Technology Usage
Technology usage is still very low in India, which restricts the scope of increasing
efficiency and productivity
5. Cost/Quality of Service

According to industry analysts, logistics costs in India are among the worlds
highest and outside of the metros and a few cities, the delivery time is very
uncertain

Overburdened physical infrastructure is a major bottleneck currently faced by the Indian

Logistics and Transportation players

Marketing mix in Logistics:

Marketing logistics involve planning, delivering, and controlling the flow of physical goods to a
market as well as the material and information necessary to meet customer demands. The
demands of the customer must be met at a profit that increases revenue for the orginization.
Maintaining an organizations competitive edge means understanding and implementing an
effective marketing logistics strategy regarding product, price, place and promotion. These four
functions of marketing logistics help the organization to reach the target customers and deliver
the products or services
PRODUCT
Each customer can have individualized needs so the logistical services provided may vary from
customer to customer. Regardless of these differences, the customers expects 100 percent
conformance and assured reliability at all times with every transaction. The goals of this aspect
of marketing logistics include filling the order, on-time delivery, precise invoicing and zero
damage.
PROMOTION
Logistics industry to take people in favour through Word of mouth publicity, reliability showing
through long years of establishment and other services. Corporation participated in various
Exhibitions, Krishi Expos, Trade Fairs, etc., and prominent fairs.
PRICE
An organization bases pricing decisions on both internal and external factors. Marketing logistics
must recognize price drivers. The profile of the customer, the product and the type of order are
factors that drive the price. Discounts for quantities and the related logistical cost structure can
impact the price the customer will ultimately pay for the product or service. Additional factors
driving price include the shipping costs based on the size, weight and distance the organization
will ship the item.

PLACE
The function of place in marketing logistics allows the organization to simplify the transactions
between a logistics provider and the customer. The organization must execute logistics in such a
way that the customer is not aware of the complexities involved in the logistics process. Also the
location of the factory, warehouse and customer can greatly impact the marketing logistics
process by increasing or reducing costs. For example, locating a factory in Bihar might reduce
the labor costs associated with a product. However, at the same time locating the factory in Bihar
might increase the shipping costs and negate any cost savings.

Competition Analysis:
The companies are selected on the basis of Earning per Share of top companies in logistics
industry. This is listed in BSE, NSE Index in India. List of selected companies for study

Container Corporation of India

All cargo Logistics
Aqua Logistics
Aegis Logistics
Arshiya International

The period of the study is five years that is 2008 to 2012 because of understand the growth of
the industry to find out competitive position in market.
Tools and Techniques:
These are the most popular tools of industry analysis. They focus on earnings, growth and value
of the companies in the market.

SWOT
BCG matrix
Financial ratio

Container Corporation of India Limited

Company Highlights
1. Concor is a public sector undertaking (PSU) with the government holding 63%
2. It has been the undisputed market leader in the Container Rail Segment with the largest
network 60 container terminals and around 220 rakes operating per year
3. The company also provides multi-modal logistics support to both the domestic and Exim
trade and targets to become an one-stop logistics solution going ahead and enjoys
operational support from Indian Railways

Allcargo Logistics Limited

Company Highlights
1. Allcargo Logistics Ltd is a leading multinational company providing integrated logistics
solutions
2. The company currently operates out of 140 offices in 65 countries and gets supported by
an even larger network of franchisee offices across the world
3. Allcargo Logistics Ltd. acquired two Hong Kong based companies engaged in Non
Vessel Owning Common Carrier (NVOCC) business in China and other parts of the
eastern region in 2010
4. One of worlds leading private equity firms has acquired a 14.99% stake in Allcargo
Logistics Ltd
Aegis Logistics Limited
Company Highlights
1. Aegis Logistics Limited provides total supply chain management services to the Indian
petroleum and chemical industry by storing, moving and distributing petroleum and
chemical products to the end user
2. It owns and operates a 20,000 MT fully refrigerated LPG import terminal which was
commissioned in 1997
3. Aegis has taken a pioneering role in the development of an extensive retail network of
Auto LPG stations in India under the brand name Aegis Auto gas. Currently the network
is spread over eight states

Arshiya International Limited

Company Highlights
1. Arshiya International Ltd. Is an integrated supply chain and logistics infrastructure
solutions provider headquartered in Mumbai
2. The company has multinational operations in the logistics and supply chain management
space and is currently involved in the phased investment of approximately USD 1.6
billion towards creating and pioneering logistics infrastructure within India
3. Arshiya has been accorded the status of Star Export House in accordance with the
provisions of the Foreign Trade Policy

Aqua logistics limited

Company Highlights
1. Aqua Logistics Limited is Indias foremost global logistics and supply chain partner,
delivering excellence across industries, through an integration of empowered people,
processes and technology.
2. The Company is a full-scope 3 PL (third-party logistics service provider),delivering endto-end solutions in the logistics and supply chain domain to customers
3. Past four years they retain so many reserves and surplus. In the FY2011 they retain 139%
in profit. Now the company reserve increased up to 1625% in past financial five years
Central Warehousing Corporation
Company Highlights
1. Highest ever Turnover of Rs. 1218.65 crore, an increase of Rs. 189.10 crore (18.37%)
over the previous year.
2. Import and Export Warehousing facilities at its 36 Container Freight Stations in ports and
inland stations.
3. Scientific Storage Facilities for more than 200 commodities including hygroscopic and
perishable items through network of 465 warehouses in India with its 5,200 trained
personnel.

BCG Matrix for Logistics Industry in India

1. Stars

The stars though generate funds but need to be constantly invested into because their
prospectus of becoming cash cows depends on the pre-requisite of them being the market
leader. Container Corporation of India, Arshiya International comes this position in
which the company take following strategic decision

Market Development
The Allcrgo Logistics Company can develop new product to capture market share in the
industry. Currently company hold high in growth due to earn more profit over the five
years
Market penetration
CONCORE can penetrate in to develop rail road to connect new cities, implement

developed technologies
Arshiya International can improve their warehousing facilities to speed up the delivery
time

2. Question marks
Since they are the new entrants or strugglers in the market for major share where the market
is changing at a high pace, efforts are being made to make sure that the gain on their market
share. Arshiya International comes under this position
Product development
To develop wide range of product in order to catch the new market in India also in aboard
To improve the 3PL segment it leads to increase the market growth

3. Cash cows
Since the cows needed to be milked now and then, and efforts are to be made to ensure that
they maintain the largest share in the market the following strategies are being adopted by
Aegis Logistics Ltd
Product development
CONCORE can develop their market into air cargo, to cover new market to increase its

operation in order to maintain this position in this industry

CONCORE can develop market in pipe line logistics segment
The company can come in to cargo handling segment, warehousing, container etc
The company may enter in to 3PL in segment Concentric diversification

The COCORE Company may add extra value to its existing product like new pipe line
between new markets. Focus to India market segment like road segment, airways.
Central warehousing corporation occurs between stars and cash cows as a market leader in
warehousing sector.CWC is bonded with FDI & Food ministry of India. It demands a
development in warehousing techniques, Currently company hold high in growth due to earn
more profit over the five years.

4. Dogs
They are run on breakeven point and in the eyes of an accountant they are not even viable.
But can be important for synergies Aegis Logistics and Aqua Logistics comes under dog
criteria in which the company deal with single segment so the company can diversify their
business into various segment it increase their value in the market.
Divestments
The company can come in to cargo handling segment, warehousing, container etc
The company may enter in to 3PL in segment
The company can improve their operation by way of increase the market segment

SWOT ANALYSIS OF INDIAN LOGISTICS INDUSTRY

Strength
1. Logistics industry contribute 10-13 % in GDP in India
2. Ranked at 46th position in world in 2012
3. Vital role in import and export business

4.
5.
6.
7.
8.
9.

Cheap labour available in India

Improve infrastructure like development of new roads, rail road, ports
100% in FDI in India
Quality and reliability
Direct delivery capability
Currently industry use latest technology

Weakness
1.
2.
3.
4.

Poor performance in infrastructure facilities in India

Lack of experienced people while taking strategic decisions
Poor physical facilities like road, port, rail road, IT etc
State and central government policies over its industry like import restriction over certain

products and export for certain scare products

5. Competitors from international players like DHL, UPS, TNT, FEDEX, Blue Dart etc
6. Indian logistics company adopt inadequate technology compare to foreign competitors

Opportunities
Growth and future of 3PL Market in India CRISIL Research has estimated the 3PL market in
India at Rs 47-50 billion in 2008-09, which is expected to grow at a CAGR of 27% to Rs162-165
billion by 2013-14.3PL penetration has been the highest in sectors such as cars and organized
retail. The segment is also gaining importance in other sectors such as IT hardware and FMCG.
The share of 3PL in the overall logistics market is expected to increase from around 1.5 - 2.0% in
2008-09 to around3.5 4% by 2013-14.
The benefits would accrue in the form of:
1. Reduction in warehousing space requirement
2. Improvement in efficiency due to better inventory management
3. Reduction in transportation cost due to higher capacity utilization The segment is also
gaining importance in other sectors such as Power, Infrastructure, IT hardware and
FMCG.

Threats
Key Challenges faced by the Indian Logistics Sector

1. Logistics has historically been a high-cost, low-margin business.

2. Economies of scale are absent in the Indian logistics industry. Even the organized sector
that contributes slightly more than 1% of the logistics cost, is highly fragmented.
3. Indian freight forwarders face stiff competition from multi-national freight forwarders for
international freight movement. MNCs, because of their size and operations in many
countries, are able to offer low freight rates and extend credit for long periods. Indian
freight forwarders, on the other hand, because of their smaller size and lack of access to
cheap capital, are not able to match the same.
4. Poor physical and communications infrastructure is another deterrent to attracting
investments in the logistics sector. Road transportation accounts for more than 60% of
inland transportation of goods, and highways that constitute 1.4% of the total road
network, carry 40% of the freight movement by roadways. Slow movement of cargo due
to bad road conditions, multiple check posts and documentation requirements, congestion
at seaports due to inadequate infrastructure, bureaucracy, red-tapism and delay in
government clearances, coupled with unreliable power supply and slow banking
transactions, make it difficult for exporters to meet the deadlines for their international
customers.
5. There is lack of skilled and knowledgeable manpower in the logistics sector.
Management graduates do not consider logistics as a prime job. To improve the status of
the industry, service providers have to move beyond the level of brokers and truckers to
attract and retain talent.

FINANCIAL ANALYSIS
HIGHLIGHTS OF PERFORMANCE DURING 2011-12

Highest ever Turnover of Rs. 1218.65 crore, an increase of Rs. 189.10 crore (18.37%)

over the previous year.

Gross Sale increased from Rs. 999.16 crore to Rs. 1152.03 crore growth of 15.30%.
A record profit Before Tax (PBT) of Rs. 159.12 crore inspite of provisions of Rs.100.13
crore towards employees pension scheme otherwise the profit before tax would have

been Rs. 259.25 crore

Dividend at par with the previous year @ 40% proposed to be paid on the paid-up capital

amounting to Rs. 31.60 crore (including corporate dividend tax).

Additional storage capacity of 2.09 lakh MT created with a capital outlay of Rs. 111.22

crore for storage of FCI and other depositors.

Overall capacity utilization (occupancy) increased from 88% to 91%.
All time high record Utilization of 52.16 lakh MT capacity for storage of foodgrains as

against 48.72 lakh MT utilized during 2010-11

Highest ever capacity utilization by foodgrains-57% up from 54% during 2010-11
Handled 11.55 lakh TEUs inspite of euro zone crisis and a weak Rupee.
Highest ever revenue of Rs.16.81 crore from Pest Control Services.
A revenue of Rs. 50.85 crore form CRT operations- inspite of overall decline in IMPEX
trade and stiff competition.

PERFORMANCE HIGHLIGHTS Consistent Growth During Last 5 Years

CAPITAL STRUCTURE
The authorized and paid up capital of the Corporation remained unchanged at Rs. 100 crore and
Rs. 68.02 crore respectively. The shareholding pattern also remained unchanged with the
shareholders being the Government of India, the State Bank of India, 35 other scheduled banks,
401 cooperative societies, 7 insurance companies and 6 recognized associations/ companies
dealing in agricultural produce.

FINANCIAL PERFORMANCE

The central warehousing corporation (CWC) achieved yet another record turnover of Rs.
1219 crore during 2011-12 as against Rs. 1030 crore achieved during the preceding year
registering a growth of 18.35%. This could be possible due to addition of constructed
storage capacity by 2.09 lakh MT and increase in overall capacity utilization (occupancy)
to 91% as against 88% achieved during previous year. Keeping in view the national
priority for safe preservation of foodgrains procured for Central Pool utilization of
capacity for storage of foodgrains was given adequate attention which increased from
54% during 2010-11 to 57% in 2011-12. CWC handled 11.55% lakh TEUs during 201112. CWC also achieved highest ever Gross Margin of Rs. 305 crore as against Rs. 237
crore during 2010-11, registering a growth of 29%.

Complimenting the CWC, inspite of the economic slowdown and increase in

establishment cost due to provisioning of Rs.100 crore for introduction of Pension
Scheme for the employees with effect from 1.1.2007, CWC achieved a profit Before Tax
(PBT) of Rs.159.12 crore and has declared dividend at the rate of 40% second time in the
row.

The Minister said that it is significant that during the current financial year, CWC has
plans to construct storage capacity of about 2.50 lakh MT with a financial outlay of Rs.
125 crore in 12 states mainly for storage of foodgrains.

Despite the adverse Impex scenario because of economic slowdown and the consequent
decline in the number of containers handled in the cfss/icds, the turnover of Corporation
increased from Rs.1029.55 crore during 2010-11 to Rs.1218.65 crore during 2011-12.
However, the profit before tax (PBT) declined to Rs.159.12 crore as compared to
Rs.203.73 crore last year and the profit after tax (PAT) declined to Rs.100.46 crore as
against Rs.136.17 crore during 2010-11 due to provisioning of Rs.100.13 crore for
contribution towards employees pension fund with effect from 01.01.2007. All segments
of operations, excepting Container Rail Transport (CRT) operations, such as
warehousing, marketing facilitation, pest control services, etc. recorded growth. As a
result, the operating income increased from Rs.975.89 crore To Rs. 1152.03 crore during
the year under report, registering a growth of 18.05%.

Performance at a Glance

Turnover has increased over five years from Rs. 77623 lakh in 2007-08 to Rs. 121865

lakh in 2011-12 FY
Net worth of the company also increased gradually due to increased capitalization of the
the warehousing. Net worth increased Rs. 130408 lakh from Rs. 108024 lakh in 2007-08.

PHYSICAL PERFORMANCE

Capacity and Utilization

As on the 31st March, 2012, Corporation operated 468 warehouses with a total storage capacity
of 100.85 lakh MT. This included 66 Custom Bonded warehouses, 36 CFSs/ICDs and 4 Air
Cargo Complexes with storage capacity of 4.24 lakh MT, 15.68 lakh MT and 7361 MT
respectively. During the year, 2.09 lakh MT capacity (covered godowns and open storage
capacity) was added while some 2.99 lakh MT of hired godowns/management warehouses
specifically hired for storage of various commodities and 0.72 lakh MT of open capacity were
rehired consequent upon release of the stocks or termination of the management contract. During
the year under report, the average capacity utilization further improved from 88% achieved
during 2010-11 to 91% which is an all time high.

Central railside Warehouse company ltd.

The fully owned subsidiary the Central Railside Warehouse Company Ltd. (CRWC) which was
operating 16 Railside Warehousing Complexes (RWCs) with a total storage capacity of 2,87,217
MT at the beginning of the year, added one more RWC at Dankuni (Kolkata), with a total
capacity of 13,750 MT during the year. In Rs.lakh:

The total operational storage capacity increased to 3,00,967MT with 17 operational RWCs as on
31.3.2012. Further, construction of part capacity of 7000 MT out of total capacity of 12,500 MT
at Mysore has been completed. CRWC is also in dialogue with the Ministry of Railways for
setting up of RWCs at Jogeshwari (Mumbai), Malda (West Bengal) and Whitefield Bangalore
(Phase-III). .
Operation of ICDs/CFSs/Air Cargo Complexes
Despite economic slowdown due to euro zone crisis and weak rupee, Corporation handled 11.55
lakh TEUs during the year under report at its 36 Container Freight Stations (CFSs)/Inland
Clearance Depots (ICDs) as against 12.32 lakh TEUs handled during 2010- 11.

Corporation

also operated four Air Cargo Complexes at Delhi, Goa, Virugambakkam and Amritsar during the
year.

BALANCE SHEET AS AT 31ST MARCH, 2012 (GENERAL FUND)

PARTICULARS

Current Year Rs

Previous Year Rs.

CAPITAL & LIABILITIES

Share Capital
Reserve Fund Under Section 30 (1)
Reserve for Bad & Doubtful Debts
Capital Reserve
Self Indemnification Reserve Fund
Reserve for Benevolent Fund
Reserve for CSR Fund
Capital Grant from Govt. of India
Deferred Tax Liability
Outstanding Liabilities
Provision for Pay & Allowances
Provision for Taxes
Provision for Dividend (inclusive of dividend tax)
Unclaimed Dividend
Profit & Loss Appropriation Account

680,210,000
12,710,203,564
862,646,018
45,954
132,664,948
180,673,329
3,820,970
50,300,000
1,791,174,012
2,577,981,187
4,649,764,388
1,471,322,688
316,003,970
709,242
49,674

680,210,000
12,059,103,564
695,153,982
45,954
121,012,206
170,901,388
0
0
1,505,094,588
2,279,985,378
3,499,241,583
1,832,948,361
317,053,594
552,042
60,570

(Balance as per accounts annexed)

TOTAL

25,427,569,944

23,161,363,210

10,703,509,867
1,100,059,373
20,686,701
121,012,206
154,846,388
1,442,903,920
2,828,939,636
4,269,533,995
4,436,466,227
349,611,631

9,798,703,989
1,092,559,373
26,248,881
115,175,183
146,445,174
1,023,458,517
2,793,472,410
4,323,883,448
3,425,323,066
416,093,169

25,427,569,944

23,161,363,210

PROPERTY & ASSETS

Fixed Assets
Investments (at Cost)
Income accrued on Investments
Self Indemnification Reserve Fund Investment
Benevolent Reserve Fund Investment
Deferred Tax Assets
Current Assets
Loans and Advances
Cash and Bank Balances
Unamortised Expenditure
Significant Accounting Policies
Notes forming part of Accounts
TOTAL

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31ST MARCH, 2012
(GENERAL FUND)

PARTICULARS

Current Year Rs

Previous Year Rs.

EXPENDITURE
Warehousing Licence Fee
Consumption of Chemicals,Covers and Dunnage
Pay & Allowances (with provisions)
Travelling Allowances etc.,
Wages
Repairs & Maintenance
Rent, Rates & Taxes
Insurance
Printing & Stationery
Miscellaneous Expenditure
Container Rail Transport (CRT) Operation Expenses
Marketing Facilitation Expenses
Bank Charges
Interest (Expense)
Directors' Remuneration (Fees,Travelling Allowances

8,829,078
154,571,102
5,077,032,797
41,416,204
86,990,943
242,347,917
459,723,561
126,047,598
20,238,248
820,814,666
462,394,963
2,487,961,282
3,445,216
63375903
1,201,467

4,452,066
131,137,951
3,620,580,059
35,097,324
77,445,836
202,972,092
429,888,154
101,027,778
20,338,698
710,287,689
459,624,600
2,040,144,533
3,412,344
22,446,112
721,997

4,567,564
6,463
4,881
252,023,949
19,647
210,827,397
357,213
10,524,198,059
1,662,273,101
12,186,471,160
1,662,273,101
71,062,752
1,591,210,349
586,637,512
1,004,572,837

3,999,874
3,384,267
256,255
250,728,699
146,777
150,897,533
326,266
8,269,316,904
2,026,166,839
10,295,483,743
2,026,166,839
(11126282)
2,037,293,121
675,558,119
1,361,735,002

etc.)
Auditors' Fee and Expenses
Loss on Sale of Assets/Assets written off
Bad Debts Written Off
Depreciation
Impairment Loss
Reserve for Bad & Doubtful Debts
Provision for Wealth Tax
Profit for the year
TOTAL
Profit for the year
Less : Prior Period Adjustments (Net)
Profit Before Tax
Less: Provision for Taxes
PROFIT AFTER TAX CARRIED DOWN

INCOME
Warehousing Charges
6,773,902,179
Marketing Facilitation Income
3,345,535,753
Income from Container Rail Transport (CRT) 508,544,076

5,663,599,572
2,805,254,424
515,495,587

Operation
Income from CFSs/ICDs under Strategic Alliance
Income from Pest Control Services
Interest (income)

528,384,499
159,261,620
347,245,812

595,244,821
168,147,652
494,514,164

Dividend Income
Miscellaneous Receipts
Excess Liability, Provision and
Depreciation Written Back
Profit on Sale of Assets
Significant Accounting Policies
Notes forming part of Accounts
TOTAL
APPROPRIATION TO
Reserve Fund Under Section 30(1)
Self Indemnification Reserve
Proposed Dividend
Tax on Distributed Profits
Benevolent Fund
Deferred Tax adjustment / Income Tax Provision (for

99,152,648
133,821,618
66,385,449

70,290,866
128,048,220
70,855,535

1,222,800

7,047,608

12,186,471,160

10,295,483,743

651,100,000
11,652,742
271,895,760
44,108,290
25,826,941
-

1,017,600,000
7,792,477
271,895,200
45,158,394
23,796,137
165,865,571

49,674
1,004,633,407

60,570
1,532,168,349

earlier years) &

Reversal /adjustment of MAT Credit Receivable
Balance Carried to Balance Sheet
TOTAL

Balance sheet for Container Corporation of India:

Particulars
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Mar '12

Mar '11
(Rs cr.)

Mar '10

129.98
129.98
0
0
5,476.45
0
5,606.43
0
0
0
5,606.43
Mar '12

129.98
129.98
0
0
4,847.83
0
4,977.81
0
0
0
4,977.81
Mar '11

129.98
129.98
0
0
4,206.42
0
4,336.40
0
0
0
4,336.40
Mar '10

12 mths

12 mths

12 mths

Application Of Funds
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets

3,472.61
1,078.86
2,393.75
115.12
293.1
8.17
19.59
2,761.50
2,789.26
906.35
0
3,695.61
0
714.37
176.78
891.15
2,804.46
0
5,606.43

3,266.11
959.13
2,306.98
339.18
243.96
6.26
17.27
56.34
79.87
561.77
2,239.34
2,880.98
0
639.22
154.07
793.29
2,087.69
0
4,977.81

2,965.48
825
2,140.48
222.44
240.54
6.99
17.64
49.44
74.07
571.56
1,940.07
2,585.70
0
707.79
144.97
852.76
1,732.94
0
4,336.40

Contingent Liabilities
Book Value (Rs)

1,746.47
431.32

1,440.38
382.96

1,308.84
333.61

Profit and Loss Statement:

Mar '12

Mar '11

Mar '10

12 mths

12 mths

12 mths

Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income

4,060.95
0
4,060.95
316.54
0
4,377.49

3,828.12
0
3,828.12
173.45
0
4,001.57

3,705.68
0
3,705.68
164.07
0
3,869.75

Expenditure
Raw Materials

5.04

2.67

2.29

Power & Fuel Cost

Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualized)
Shares in issue (lakhs)
Earnings Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

28.05
99.91
78.86
0
2,825.36
0
3,037.22
Mar '12

14.03
86.9
2,598.32
75.43
48.08
0
2,825.43
Mar '11

14.99
83.61
2,506.32
94.7
41.8
0
2,743.71
Mar '10

12 mths

12 mths

12 mths

1,023.73
1,340.27
0
1,340.27
158.49
0
1,181.78
-52.16
1,129.62
251.74
877.88
3,032.18
0
249.26
0

1,002.69
1,176.14
0.3
1,175.84
145.23
0
1,030.61
25.11
1,055.72
179.77
875.95
2,822.76
0
201.48
33.06

961.97
1,126.04
0.09
1,125.95
135.1
0
990.85
15.76
1,006.61
219.92
786.69
2,741.42
0
181.98
30.52

1,299.83
67.54
165
431.32

1,299.83
67.39
155
382.96

1,299.83
60.52
140
333.61

Cash flow Statement:

Cash Flow

Net Profit Before Tax

Net Cash From Operating Activities
Net Cash (used in)/from
Investing Activities

------------------- in Rs. Cr. --------Mar '12

Mar '11

Mar '10

1181.78
736.16
-36.18

1058.27
808.33
-267.22

1006.59
634.92
-198.21

Net Cash (used in)/from Financing Activities

Net (decrease)/increase In Cash and

-234.16
Cash 465.82

-234.94
306.17

-212.92
223.79

2295.68
2761.5

1989.51
2295.68

1765.72
1989.51

Equivalents
Opening Cash & Cash Equivalents
Closing Cash & Cash Equivalents

Comparative Financial Ratio Analysis of Central warehousing corporation

(CWC) with Container Corporation of India(CONCOR):
FINANCIAL RATIOS

Central warehousing
Corporation
2012
2011
2010

CONCOR
2012

2011

2010

Current Ratio

2.08

2.65

2.98

4.15

3.63

3.03

Quick Ratio

2.04

2.61

2.94

4.14

3.61

3.01

Adjusted Cash Margin(%)

24.15

21.11

24.95

26.5

24.9

23.41

Net Profit Margin(%)

16.28

16.79

18.5

20.05

21.88

20.32

Investments Turnover Ratio

97.81

--

--

497.06

611.52

530.14

Asset Turnover Ratio

--

0.66

0.64

0.77

0.82

0.92

Total Debt to Assets Ratio

--

--

--

--

--

--

Long-Term Debt to Assets Ratio

--

--

--

--

--

--

Total Debt to Equity Ratio

--

--

--

--

--

--

Liquidity Ratio

Profitability Ratios

Activity Ratios

Financial Leverage Ratios

Analysis:
Liquidity ratio:
Current Ratio provides a margin of safety to the creditors. In a sound business, a current ratio of
2:1 is considered an ideal one. For CONCOR the current ratio explains that the constant relation
between current assets and current liability but in the FY10 increased to 3.03:1 it indicate well
liquidly position. Later in FY12 the level of inventories would be increased it stood at 4.15:1 is
an ideal one. But CWC current ratio continuously decrease over four years but ratio cloud be
remain same position that is safe liquidity. The company spent more resource for expands its
operation over the upcoming years.
Profitability ratios
Profitability ratios show a company's overall efficiency and performance. The net profit margin
is the ratio of net income (net profit) to sales, and indicates how much of each Rupees of sales is
left over after all expenses. Having a higher value relative to a competitor's ratio or the same
ratio from a previous period is indicative that the company is doing well. As CONCOR has
higher ratio ,with a constant increment, whereas CWC profitability slightly down.
Activity Ratios:
Activity ratios are used to measure the relative efficiency of a firm based on its use of its assets,
leverage or other such balance sheet items. These ratios are important in determining whether a
company's management is doing a good enough job of generating revenues, cash, etc. from its
resources. CONCOR activity ratio is decreased over the years because of completion in market
and new government rules. But for CWC is constant over the year due to high capacity
utilization of the warehouses.

DETAILED STUDY/ RESEARCH PROJECT

CENTRAL WAREHOUSING CORPORATION

(A GOVT. OF INDIA UNDERTAKING)

STUDY OF LOGISTICS AND WAREHOUSE

MANAGEMENT AND ITS FUNCTIONS

Inland Container Depot, Patparganj

LOGISTICS MANAGEMENT - INTRODUCTION

Logistics

is the management of the flow of resources between the point of

origin and the point of consumption in order to meet some requirements, for
example, of customers or corporations. The resources managed in logistics can
include physical items, such as food, materials, equipment, liquids, and staff, as well
as abstract items, such as time, information, particles, and energy. The logistics of
physical items usually involves the integration of information flow, material
handling, production, packaging, inventory, transportation, warehousing, and often
security. The complexity of logistics can be modeled, analyzed, visualized, and
optimized by dedicated simulation software. The minimization of the use of
resources is a common motivation
1. Seven Rs of logistics:
a. Getting the right product,
b. to the right customer,
c. in the right quantity,
d. in the right condition,
e. at the right place,
f. at the right time,
g. with the right cost.

Warehouse
A warehouse is a large building where goods are stored, and where they may be
catalogued, shipped, or received, depending upon the type. Though in the past,
many warehouses, often located in industrial areas sometimes next to major
shipping ports, were teeming with workers, the modern warehouse may be either
completely or totally automated depending upon how advanced the company is.
Sometimes a manufacturing facility also has an attached warehouse, where their
manufactured goods are stored until shipped. It is a commercial building for storage
of

goods.

Warehouses

are

used

by

manufacturers,

importers,

exporters,

wholesalers, transport businesses, customs, etc.

Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective, forward and backward (reverse) flow and storage of goods, services and
information between the point of origin and the point of consumption in order to meet customers'

requirements rather to the customers delight. A professional working in the field of logistics
management is called a logistician.
Logistics, as a business concept, evolved only in the 1950s. This was mainly due to the
increasing complexity of supplying one's business with materials, and shipping out products in
an increasingly globalized supply chain, calling for experts in the field who are called Supply
Chain Logisticians. This can be defined as having the right item in the right quantity at the right
time at the right place for the right price and to the right target customers (consumer); and it is
the science of process having its presence in all sectors of the industry.
The goal of logistics work is to manage the fruition of project life cycles, supply chains and
resultant efficiencies. Logistics is concerned with getting (or transmitting) the products and
services where they are needed or when they are desired. It is difficult to accomplish any
marketing or manufacturing without logistical support. It involves the integration of information,
transportation, inventory, warehousing, material handling, and packaging. The operating
responsibility of logistics is the geographical repositioning of raw materials, work in process, and
finished inventories where required at the lowest cost possible.

Origin and Definition of Logistics:

The term "logistics" originates from the ancient Greek "" ("logos""ratio, word,
calculation, reason, speech, oration"). Logistics is considered to have originated in the military's
need to supply themselves with arms, ammunition and rations as they moved from their base to a
forward position. In ancient Greek, Roman and Byzantine empires, there were military officers
with the title Logistikas who were responsible for financial management and distribution of
supplies.
The Oxford English dictionary defines logistics as: The branch of military science having to
do with procuring, maintaining and transporting material, personnel and facilities.
The American Council of Logistics Management defines logistics asthe process of planning,
implementing and controlling the efficient and effective flow, and storage of goods, services and

related information from the point of origin to the point of consumption for the purpose of
conforming to customer requirements.
Objective of Logistics Management:
The primary objective of logistics management is to effectively and efficiently move the supply
chain so as to extend the desired level of customer service at the least cost. Thus, logistics
management starts with ascertaining customers needs till their fulfilment through product
supplies. However, there are some definite objectives to be achieved through a proper logistics
system. These can be described as follows:
1. Improving customer service:
An important objective of all marketing efforts, including the physical distribution activities, is to
improve the customer service. An efficient management of physical distribution can help in
improving the level of customer service by developing an effective system of warehousing, quick
and economic transportation, and maintaining optimum level of inventory.
2. Rapid Response:
Rapid response is concerned with a firm's ability to satisfy customer service requirements in a
timely manner. Information technology has increased the capability to postpone logistical
operations to the latest possible time and then accomplish rapid delivery of required inventory.
3. Reduce total distribution costs:
The cost of physical distribution consists of various elements such as transportation,
warehousing and inventory maintenance, and any reduction in the cost of one element may result
in an increase in the cost of the other elements. Thus, the objective of the firm should be to
reduce the total cost of distribution and not just the cost incurred on any one element.

4. Generating additional sales:

A firm can attract additional customers by offering better services at lowest prices. For example,
by decentralizing its warehousing operations or by using economic and efficient modes of
transportation, a firm can achieve larger market share. Also by avoiding the out-of-stock
situation, the loss of loyal customers can be arrested.
5. Creating time and place utilities:
The products are physically moved from the place of their origin to the place where they are
required for consumption; they do not serve any purpose to the users. Similarly, the products
have to be made available at the time they are needed for consumption.
6. Price stabilization:
It can be achieved by regulating the flow of the products to the market through a judicious use of
available transport facilities and compatible warehouse operations. By stocking the raw material
during the period of excess supply and made available during the periods of short supply, the
prices can be stabilized.
7. Quality improvement:
The long-term objective of the logistical system is to seek continuous quality improvement. Total
quality management (TQM) has become a major commitment throughout all facets of industry. If
a product becomes defective or if service promises are not kept, little, if any, value is added by
the logistics. Logistical costs, once expended, cannot be reversed.
8. Movement consolidation:
Consolidation one of the most significant logistical costs is transportation. Transportation cost is
directly related to the type of product, size of shipment, and distance. Many Logistical systems

that feature premium service depend on high-speed, small shipment transportation. Premium
transportation is typically high-cost. To reduce transportation cost. It is desirable to achieve
movement consolidation.

Logistics Management Function

Logistics is the process of movement of goods across the supply chain of the company. This
process is consist of various functions, which have to be properly managed to bring effectiveness
efficiency in the supply chain of organization. The major logistical function are shown in figure
OL
roro
dg
es
ri
Ps
rF
ou
cn
ec
si
sn
is
n
g

i
t
c

t
o

1. Order processing:
The starting point of physical distribution activities is the processing of customers orders. In
order to provide quicker customer service, the orders received from customers should be
processed within the least possible time. Order processing includes receiving the order, recording
the order, filling the order, and assembling all such orders for transportation, etc. the company
and the customers benefit when these steps are carried out quickly and accurately. The error
committed at this stage at times can prove to be very costly.
Order processing activity consist of the following
Order checking in any deviations in agreed or negotiation terms

Prices , payment and delivery terms

Checking the availability in of the material stocks
Production and material scheduling for storage
Acknowledge the order, indicating deviation

2. Warehousing:
Warehousing refers to the storing and assorting products in order to create time utility. The basic
purpose of the warehousing activity is to arrange placement of goods, provide storage facility to
store them, consolidate them with other similar products, divide them into smaller quantities and
build up assortment of products. Generally, larger the number of warehouses a firm has the lesser
would be the time taken in serving customers at different locations, but greater would be the cost
of warehousing. Thus, the firm has to strike a balance between the cost of warehousing and the
level of customer service.
Major decision in warehousing is as follow:

Location of warehousing facility

Number of warehousing
Size of warehouse
Design of the building
Ownership of the warehouse

3. Inventory Management:
Linked to warehousing decisions are the inventory decisions which hold the key to success of
physical distribution especially where the inventory costs may be as high 15 as 30-40 per cent
(e.g., steel and automobiles). No wonder, therefore, that the new concept of Just-in-TimeInventory decision is increasingly becoming popular with a number of companies. The decision
regarding level of inventory involves estimate of demand for the product. A correct estimate of
the demand helps to hold proper inventory level and control the inventory costs. This is not only
helps the firm in terms of the cost of inventory and supply to customers in time but also to

maintain production at a consistent level. The major factors determining the inventory levels are:
The firms policy regarding the customer service level, Degree of accuracy of the sales forecasts,
Responsiveness of the distribution system i.e., ability of the system to transmit inventory needs
to the factory and get the products in the market. The cost inventory consists of holding cost
(such as cost of warehousing, tied up capital and obsolescence) and replenishment cost
(including the manufacturing cost).
4. Transportation:
Transportation seeks to move goods from points of production and sale to points of consumption
in the quantities required at times needed and at a reasonable cost. The transportation system
adds time and place utilities to the goods handled and thus, increases their economic value. To
achieve these goals, transportation facilities must be adequate, regular, dependable and equitable
in terms of costs and benefits of the facilities and service provided.
5. Information:
The physical distribution managers continuously need up-to-date information about inventory,
transportation and warehousing. For example, in respect on inventory, information about present
stock position at each location, future commitment and replenishment capabilities are constantly
required. Similarly, before choosing a 16 carrier, information about the availability of various
modes of transport, their costs, services and suitability for a particular product is needed. About
warehousing, information with respect to space utilization, work schedules, unit load
performance, etc., is required.
In order to receive all the information stated above, an efficient management information system
would be of immense use in controlling costs, improving services and determining the overall
effectiveness of distribution. Of course, it is difficult to correctly assess the cost of physical
distribution operations. But if correct information is available it can be analyzed systematically
and a great deal of saving can be ensured.

6. Facilities:
The Facilities logistics element is composed of a variety of planning activities, all of which are
directed toward ensuring that all required permanent or semipermanent operating and support
facilities (for instance, training, field and depot maintenance, storage, operational, and testing)
are available concurrently with system fielding.
Planning must be comprehensive and include the need for new construction as well as
modifications to existing facilities. Facility construction can take from 5 to 7 years from concept
formulation to user occupancy. It also includes studies to define and establish impacts on life
cycle cost, funding requirements, facility locations and improvements, space requirements,
environmental impacts, duration or frequency of use, safety and health standards requirements,
and security restrictions. Also included are any utility requirements, for both fixed and mobile
facilities, with emphasis on limiting requirements of scarce or unique resources.

Warehouse Market Analysis

In recent times, the Indian warehousing segment in India has evolved
significantly, resulting in a gradual metamorphosis from the traditional
concept of godowns to modern formats. Further, interest and traction in the
potential advantages that free-trade warehousing zones (FTWZs) offer has
increased.
The demand for warehousing services in India was estimated at approximately INR245270
billion in 20111246. The market consists of industrial and agricultural warehousing, with both
segments expected to witness a significant evolution in their shares (by value) over the next five
years. The share of the industrial segment, which includes both bulk and non-bulk commodities,
is expected to increase from about 86 percent in 201011 to around 90 percent in 201516.47
This is likely to be at the cost of a corresponding decrease in the share of agricultural
warehousing.

In contrast to the industrial warehousing segment, which is highly fragmented, the agricultural
warehousing segment is dominated to the extent of two-thirds by government entities. These include the
Food Corporation of India, the Central Warehousing Corporation and all State Warehousing Corporations.
This trend is likely to vary relatively less in the next few years.

Emergence of modern warehousing formats

The demand for industrial warehousing space is estimated to have grown from around 391 million sq. ft.
in 2010 to 476 million sq. ft. in 2013, at a CAGR of 6.8 percent.

Among the analyzed sectors, the highest growth is expected from engineering goods, and IT, electronics
and telecommunications sectors, estimated to grow at CAGRs of about 8.6 and 8.2 percent, respectively,
during 201013. The other analyzed sectors are estimated to witness growth in the range of 5.7 to 7.1
percent48.
The share of modern warehousing is anticipated to grow from 15 percent (62 million sq. ft.) in 2010 to 30
percent (178 million sq. ft.) by 201548. This sharp growth is expected to be driven by rising domestic and
EXIM freight volumes, increased outsourcing to 3PL players, strengthened investment in infrastructure,
organized retail and the impending implementation of Goods and Services Tax (GST).

PROCESS OF IMPORT AND EXPORT IN INDIA

The process of IMPORTING
1.
2.
3.
4.
5.
6.
7.

Identify a product to import.

Registration for license.
Obtain IMPEX no. or RBI code.
Investigate the costs of importation, e.g., customs duty, shipping, warehousing.
Identify and verify potential suppliers.
Pay for and evaluate product samples.
Discuss and agree on shipping and payment terms. Ensure that proper documents will be

8.
9.
10.
11.

available.
Select shipping agent.
Place trial order. If the order is large, hire an inspection company.
Make payments.
Track progress of your goods through delivery to you.

The process for EXPORTING:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Registration
Generation of Shipping Bills
Processing of Shipping Bill
Quota Allocation
Arrival of Goods at Docks
System Appraisal of Shipping Bills
Customs Examination of Export Cargo
Stuffing / Loading of Goods in Containers
Drawal of Samples
Amendments
Export of Goods under Claim for Drawback

Functions of Central warehousing corporation

Operational aspects:
ICD PPG is managing LCL and FCL containers for export and import operations. The operation
for both export and import are defined in brief here under:
Steps of processing of bill of entry from submission to finalization/out of charge (IMPORT)
1. Filing of smtp (simple mail transfer protocol) by shipping lines at port of landing.
2. Transfer of container to ICDs (CWC) by RAIL.
3. Shifting of container to icd ppg(CWC).
4. Documents preparation, filing of bill of entry.
5. Documents verified by CUSTOMS by examination.
6. Bill of entry assessment and approved by D.C (CWC).
7. Generation of challan after clearance from D.C on system.
8. Payment of duty by importer in bank through challan order.
9. Obtain out of charge order.
10. Obtain shipping line/console delivery order after due check.
11. Generation of payment sheet.
12. Obtain the issue slip number by verification of all documents and online checking by
manager (import/export).
13. Issue GATE PASS by CWC.
14. Physical movement of container out of CWC.

Steps of processing of shipping bills/container movement (EXPORT)

1. Filing of declaration at CUSTOMS centre, on EDI (Electronic data interchange)
2.
3.
4.
5.

system online.
Generation of shipping bill and allotment of shipping bill no. through EDI system.
Handling charges are paid by exporter to the CWC before arrival of goods.
CCIN generated by system
Carting of goods on presentation of documents to SHED, Documents:
a. Shipping bill.
b. Invoice. An invoice or bill is a commercial document issued by a seller to a buyer,
indicating the products, quantities, and agreed prices for products or services the

seller has provided the buyer.

c. Packaging list.
6. Physical arrival of goods at the station.
7. Carting of goods into SHED in the specifies area allotted.

8. Allotment of gate pass-CWC.

9. Goods enter the warehouse verification by SHED inspector attended by CUSTOMS.
10. SHED superintendent marks the document for examine.
11. Allotment of let export order (LTO) by system (CUSTOMS) for stuffing.
12. Shipping line prepare stuffing plan based on customs approval.
13. Stuffing of goods into the nominated container under Customs supervision (SHED
Inspector).
14. Customs allow movement of loaded container after line seal and CUSTOMs TAG.
15. Movement of container by H&T agent of CWC to RAIL head t movement.
16. Shifting of container from ICD to exit port by RAIL.
Marketing Aspect
a) Corporation participated in various Exhibitions, Krishi Expos, Trade Fairs, etc.,
prominent among those being :
i) Haritholsavam-2011, Cochin -- 3rd - 7th Sept., 2011
ii) National Exhibition, Kolkata -- 7th - 11th Sept., 2011
iii) Krishi Utsav,2011 Kota -- 14th - 16th Sept., 2011
iv) India International Food & Agri Expo-2011, Cochin -26th- 28th Nov.,2011
v) India Maritime Week, New Delhi -- 19th - 21st Jan., 2012
b) Doordarshan (National Channel) also covered the activities of CWC through their
programme "Krishi Darshan" and phone-in-programme on six occasions during the year.

MIS And Record Management:

Corporation is maintaining all the record as per ISO procedures. The following reports are
maintained for smooth functioning of CWC-ICD PPG:
1. Reports related to export:
a. Daily carting sheet
b. Shifting report
c. Stuffing report
d. Genral space utilization report
2. Report related to import
a. Tally sheet
b. Stuffing sheet
c. De-stuffing sheet
3. Other report
a. PDA statement
b. Cash statement

c. Daily transaction report

d. Business/economy report

ICD patparganj uses and local area network system for handling the data in ICD warehouse .the
server is client based ,the software in build using oracle 10G. ICD PPG store backup for security
purposes. Backup is stored twice a day manually.
ICD PPG is still lack in technological issue of warehouse management system. As ICD is not
using RFID technology for tracking containers, Management team is working to solve the
limitations issues regarding RFID technology.

WAREHOUSE MANAGEMENT SYSTEM:

THE ROLE OF THE WAREHOUSE IN THE LOGISTICS SYSTEM:

1. The warehouse is where the supply chain holds or stores goods.
2. Functions of warehousing include
i. Transportation consolidation
ii. Product mixing
iii. Docking
iv. Service
v. Protection against contingencies
FACTORS INFLUENCING EFFECTIVE USE OF WAREHOUSES:
1.
2.
3.
4.

Cube utilization and accessibility

Stock location
Order picking and assembly
Physical Control & Security

WAREHOUSE ACTIVITIES:
1.
2.
3.
4.
5.
6.
7.
8.

Receive goods
Identify the goods
Dispatch goods to storage
Hold goods
Pick goods
Marshal shipment
Dispatch shipment
Operate an information system

PRINCIPLES OF WAREHOUSE LAYOUT DESIGN:

1.
2.
3.
4.
5.
6.

Use one-story facilities

Move goods in a straight line
Use efficient materials-handling equipment
Use an effective storage plan
Minimize aisle space
Use maximum height of the building

WAREHOUSE PROCESS:

OUTPUT

CONCLUSION & RECOMMENDATIONS

CONCLUSION:
Indian Logistics industry is continuously improving its performance in the global logistics
industry by improvement of customs, trade-related infrastructure, inland transit, logistics
services, information systems, and port efficiency help to provide trade goods and services on

time and at low cost. The World Bank's 2007th Global Logistics Report ranks India 39 amongst
150 countries in terms of logistics performance during the year as well as its future potential.
Indian Logistics industry has low performance than developed countries like USA, UK and
Singapore in global logistics sectors due inefficiency in logistics services and highest among the
low-income group countries. India spend in Logistics activities equivalent to 13 % of its GDP is
higher than that of developed countries.
The key reason is the relatively high level of inefficiency in the system with lower average
trucking speeds, higher turnaround time at ports and high cost of administrative delays. This can
be solves by a Warehouse Management System with an integrated RFID-based technology
that will improve the entire inventory handling process by providing an automated, systematic
and accurate warehouse management cycle that is error-free, efficient and updated real-time.

SUGGESTIONS & RECOMMODATIONS:

1. Installation of Warehouse Management System in CWC-ICD (ppg).
2. Integrated RFID-based technology that will improve the entire inventory handling
process.
Warehouse Management System can:

Scan & verify deliveries as they are received-right on the dock

Execute real-time inventory transactions, with full bin/serial/lot support
Manage the picking process from a single screen - without the need to print pick tickets
Verify Goods as they are packed & shipped, automatically generating bills of lading
Automate the Billing Selection process
Support a wide range of wireless radio frequency data collection devices to enable accurate,
efficient tracking of any product

Warehouse Management System (WMS) helps distributors, retailers, exporters/importers, and

3PL companies run more productive, efficient, and profitable warehouse operations. It helps
strengthening customer relationships, reduce operating expenses and increase warehouse and
distribution efficiencies. WMS is an intelligent investment that will bring instant accuracy in
warehouse operations and yield long-term financial benefits.

Proposed Solution:
The proposed solution is to create a Warehouse Management System with an integrated
RFID-based technology that will improve the entire inventory handling process by providing an
automated, systematic and accurate warehouse management cycle that is error-free, efficient and
updated real-time.
The warehouse performs four basic functions:
1.
2.
3.
4.

receiving of goods and other materials from a source,

inspection, storage, cross-docking and protection of goods,
retrieval of goods according to customer requirements,
preparation of goods for shipping and transportation.

To illustrate, pallets, cases, cartons and all other storage items in the warehouse will be RFID
tagged, plotting them in the system back-end. These tags are recognized by readers installed in
all the shelves, transporting equipments, and ingress and egress points in the warehouse. As a
result, all movements of goods within the warehouse are tracked and accounted, use of space,
equipment and labor is maximized, and retrieval of goods as needed becomes systematic- all
these contributing to increased customer service, productivity level, and warehouse utilization.

RFID is 15-20 times faster than manual and barcode processes for inventorying IT assets
Some companies experience a 95% reduction in time using RFID
The #1 RFID application being deployed is IT asset tracking

Tangible Benefits
This project can provide the company with tangible benefits that can quickly and dramatically
improve warehouse operations and increase material management efficiencies without adding
headcount. By implementing an RFID-based WMS, the company will achieve a number of
significant benefits.
That includes the following:

Reduced warehouse labor costs

Reduced clerical labor costs
Reduced overtime costs

Reduced of physical inventories

Lower shipping/freight costs
Lower costs to rectify errors
Reduced equipment costs

Intangible Benefits:

Increase in organizational transparency and responsibility.

Accurate and faster access to data for timely decisions.
A wider reach in terms of vendors, thus producing more competitive bids.
Improvement in customer response time.
Significant decrease in time and effort needed in data entry.
More controls thereby lowering the risk of inappropriate utilization of resources

Major Obstacles:
The following are the challenges that are highly likely to be experienced related to creating and
implementing this system:
The transition from a manual to an automated system will require extensive preparation
specifically on the operations-side. Flows and processes should be thoroughly examined to
ensure that the implementation of this wireless technology does not hamper operations,
supply-chain and warehouse management in place.
Alignment of the RFID WMS with the primary business software must be rolled-out.
Procurement of equipment such as RF/barcodes scanners, portable as well as heavy duty
printers, and the appropriate type of labels must be done after careful selection from various
options, taking into consideration the adaptability of existing systems and software.

RISK FOR IMPLEMENTATION:

Although the implementation of an RFID WMS will greatly benefit key areas, there are still risks
associated with the system. Primarily, if the RFID tags fail, the system will not be able to track

the movements of goods inside the warehouse. Moreover, the following issues are considered
risks:
DEAD AREAS AND ORIENTATION PROBLEMS: RFID works similar to the way a cell
phone or wireless network does. Like these technologies, there may be certain areas that have
weaker signals or interference.
PROXIMITY ISSUES: RFID tags cannot be read well when placed on metal or liquid objects
or when these objects are between the reader and the tag
HIGH COST: Because this technology is still new, the components and tags are expensive
compared to barcodes.
UNREAD TAGS: When reading multiple tags at the same time, it is possible that some tags will
not be read and there is no sure method of determining this when the objects are not in sight.
VULNERABLE TO DAMAGE: Water, static discharge or high-powered magnetic surges (such
as lightning strike) may damage the tags.

KEY LEARNINGS AND FINDINGS

While preparing this corporate internship project report I have understand many things about the
Indian Banking Industry and learned about the followings:
1. Functions of logistics especially in warehouse management in an organization.
2. Significance of warehouse in import and export operations.
3. Activities and tasks performed by logistics sector organisation.

FINDINGS:
1. The logistics performance index shows the performance of country in the global
logistics industry, customs, trade-related infrastructure, inland transit, logistics
services, information systems, and port efficiency are all critical to whether countries
can trade goods and services on time and at low cost. Here India LPI score is 3.07
and secure 39th position in the global logistics industry. As the share of Indian

Logistics Industry is more than the Mexico and less than the USA, UK and Singapore
witness that Indian Logistics industry is one of the growth drivers for Indian
economy.
2. In the global logistics sector India at the top position among the all the low income
group countries, that show that Indian Logistics sectors perform better among all the
low income countries or developing countries.
3. Logistics cost contribution of India in GDP is 13 % which shows the high logistics
cost of the Indian Logistics industry and also higher than the developed countries.
Due to the poor infrastructure and other logistics service is not better than the
developed countries like USA and Japan.

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