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ASSIGNMENT – I 1. Discuss the growth of Hospitality Industry and its impacts in the Indian Tourism Industry.
Tourism and Hospitality Industry ƒ Hospitality, as an industry segment in itself, is a US$ 3.5 trillion service sector within the global economy. ƒ In India, the tourism and hospitality industries are witnessing a period of exponential growth; the world's leading travel and tourism journal, "Conde Nast Traveller", ranked India as the numero uno travel destination in the world for 2007, as against fourth position in 2006. ƒ The year 2007 also marked the fifth consecutive year during which India has witnessed double-digit growth in foreign tourist arrivals. ƒ Along with the rise in foreign tourist arrivals, foreign exchange earnings have shown a robust growth of 25.6% during January-October 2007 to touch US$ 6.32 billion as against US$ 5.03 billion during January-October 2006. ƒ Tourism has now become a significant industry in India, contributing around 5.9 per cent of the Gross Domestic Product (GDP) and providing employment to about 41.8 million people. ƒ As per the World Travel & Tourism Council, the tourism industry in India is likely to generate US$ 121.4 billion of economic activity by 2015 and Hospitality sector has the potential to earn US$ 24 billion in foreign exchange by 2015. ƒ Additionally, India is also likely to become a major hub for medical tourism, with revenues from the industry estimated to grow from US$ 333 million in 2007 to US$ 2.2 billion by 2012, says a study by the Confederation of Indian Industry (CII) and McKinsey. ƒ The booming tourism industry has had a cascading effect on the hospitality sector with an increase in the occupancy ratios and average room rates. While occupancy ratio is around 80-85 per cent – up nearly 10 percent from three years back, the average increase in room rates over the last one year has hovered around 22-25%. It is pertinent to mention in this context, that according to recent estimates, there are a total of 110,000 rooms in India, as against a total requirement of approximately 250,000 – demonstrating the untapped potential that continues to exist in this industry. ƒ With a view to stimulating domestic and international investments in this sector, the government has implemented the following initiatives: i. 100% FDI under the automatic route is now permitted in all construction development projects including construction of hotels and resorts, recreational facilities and city and regional level infrastructure. ii. 100% FDI is now permitted in all airport development projects subject to the condition that FDI for upgradation of existing airports requires FIPB approval beyond 74%. iii. A five year tax holiday has been extended to Companies that set up
3 billion by 2020. Premier Travel Inn (PTI) and InterContinental Hotels group have already announced major investment plans in India in recent years. a total of US$ 636 million in foreign direct investments was channelised towards development of hotels and tourism. rich fauna.8 per cent during 2007-16. Regional Managing Director. particularly given the country’s stage of development. released by World Travel and Tourism Council (WTTC) and its research partner Oxford Economics in March 2011: . Marriott International. resorts and convention centers at specified destinations. many fairs and exhibitions and strong creative industries. For the period April 2000 to November 2007.41 billion in inbound investments over the next two years. and reasonable ground transport infrastructure (ranked 43rd). India also has quite good air transport (ranked 39th). Berggruen Hotels. making the country as the second-fastest growing tourism market in the world. India is well known for its natural resources (ranked 8th) and cultural resources (24th) with many World Heritage sites. According to the Tourism Satellite Accounting (TSA) research. Tourism and hospitality Last Updated: April 2011 Tourism Hospitality in India is based on the Sanskrit adage ‘Atithi Devo Bhava’ or ‘guest is god’.7 billion in 2010 and US$ 109. according to the Department of Industrial Policy and Promotion (DIPP). Plans for substantial upgradation of 28 regional airports in smaller towns and the privatization and expansion of Delhi and Mumbai airports ƒ The aforementioned initiatives have resulted in increasing FDI inflows being witnessed by this industry.hotels. according to the Travel and Tourism Competitiveness Report 2011 by the World Economic Forum (WEF). He projected the Indian hospitality industry to grow at a rate of 8. India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits. Government of India which aims at creating awareness about rich variety of tourism in India. InterContinental Hotels Group (IHG) Asia Australasia. Contribution to the economy The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2. The concept was adapted by the Ministry of Tourism. India is currently ranked 12th in the Asia Pacific region and 68th overall in the list of the world's attractive destinations. with 40 international brands making their presence in the country in the next few years. The domestic hospitality sector is expected to see investments of over US$ 11 billion by 2012.35 billion from April 2000 to February 2011. Investment in travel and tourism in India is expected to reach US$ 34. ƒ The hospitality industry has also been receiving increasing interest from the Private Equity Sector – investments have tripled from US$ 60 million in 2004-05 to over US$ 180 million in 2006-07. ƒ It is estimated that the hospitality sector is likely to see a further US$ 11. subject to compliance with the prescribed conditions. ƒ Several global hospitality majors such as Hilton. Cabana Hotels. reports The Travel and Tourism Competitiveness Report 2011 by World Economic Forum 2011. both natural and cultural. Accor. iv.
Hotels have introduced various offerings to improve performance (occupancy) during the lean months. The Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry. On the other hand. Travel and tourism is expected to generate 24. It is forecasted to rise by 8. travel agents.51 million (22. The industry is expected to attract capital investment of US$ 27. The fragmented nature of the Indian hospitality industry is reflected in the Herfindahl Index of Concentration.67 billion rising by 8. By 2021 industry will account for 30.5 per cent of GDP). airlines and other passenger transportation services.47 billion. is much higher than that for hotels across the world. and unskilled labour directly and indirectly.8 per cent pa for 201121. domestic tourist movement within the country was the highest in 2009. Usually the December and March quarters bring in 60% of the year’s turnover for India’s hoteliers.6 (2008-09). which was at 0.1 per cent) over the next ten years. However. . These include targeting the conferencing segment and offering lucrative packages during the lean period. rising to US$ 30. the impact on the Indian industry was much lower than that on the global counterparts. Visitor exports are expected to total US$ 15.44 million jobs directly. the average employee-toroom ratio at 1. Fragmented The Indian hotel industry is highly fragmented with a large number of small and unorganised players accounting for a lion’s share. Hotel owners in India tend to “over-spec” their hotels. FTAs are expected to increase in 2010. this trend is seeing a change over the recent few years. however. Labour intensive Quality of manpower is important in the hospitality industry. and East India Hotels. an increase of 5.65 billion (2 per cent of GDP) for 2011-2021 period.61 billion in 2011 (4. Indian hotel companies need to become more manpower efficient and reconsider their staffing requirements.9 and 1.93 million jobs directly in 2011 (5 per cent of total employment).• • • • The direct contribution of travel and tourism to GDP is expected to grow by 8. The ratio stands at 1. Foreign tourist arrivals (FTAs) into the country increased steadily from 2002 to 2008. FTAs dipped in 2009. semi-skilled. The industry provides employment to skilled. accounting for 4. With the entry of branded international hotels in the Indian industry across different categories. followed which the monsoon months entail low demand. leading to higher manpower requirement.7 per cent pa to US$ 63.062 in FY07.18 billion in 2021. The major players in the organised segment include The Taj. while the total contribution is expected to be US$ 82. In India. Oberoi. due to the global economic slowdown.9 per cent of GDP.6 for the four-star and three-star categories respectively. The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India.1per cent per annum (pa) to US$ 76. This includes employment by hotels. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry.23 billion in 2011. ITC Hotels.7 for five-star hotels and at 1. It has evolved into an industry that is sensitive to the needs and desires of people. Industry characteristics Major characteristics of the Indian hospitality industry are: High seasonality The Indian hotel industry normally experiences high demand during October–April.
These include government-approved service apartments. and Ibis are some of the popular budget hotels. interest subsidies. river lodges and heritage buildings. Ginger Hotels. Licensed units Hotels/establishments. hotels are classified as five-star deluxe. a significant portion of the hotels in India still remain unclassified. Heritage hotels These hotels operate from forts. and bed and breakfast establishments. heritage classic and heritage basic. which bridge the gap between expensive luxury hotels and inexpensive lodges across the country. Due to lengthy and complex processes for such classification. timesharing resorts. The Ministry of Tourism classifies hotels as follows: • • • Star category hotels Heritage hotels Licensed units Star category hotels Within this category. fall in this category. to provide contemporary standards of facilities and services at hotels. Other smaller players These are small hotels. hotels in India can divided into two categories: 1) DoT (Department of Tourism) classified hotels 2) DoT (Department of Tourism) unclassified hotels Classified hotels Hotels are classified based on the number of facilities and services provided by them. The categories within heritage classification include heritage grand. castles. five-star. Hometel. jungles. Based on the approval from the Ministry of Tourism. motels and lodges that are spread across the country.Classification of hotels The Ministry of Tourism has formulated a voluntary scheme for classification of operational hotels into different categories. two-star and one-star. Hotels classified under the Ministry of Tourism enjoy different kinds of benefits such as tax incentives. palaces. which have acquired approval/license from the Ministry of Tourism to provide boarding and lodging facilities and are not classified as heritage or star hotels. These hotels use various cost control measures to maintain lower average room rates without compromising on service quality. and import benefits. Increased demand and healthy occupancy have fuelled growth of budget hotels. Unclassified hotels Branded players This segment mainly represents the branded budget hotels in the country. Budget hotels are reasonably priced and offer limited luxury and decent services. This segment is highly unorganised and low prices are their unique selling point. three-star. . ITC Fortune. four-star.
7% and 7. It recorded healthy growth in the past few years.Growth drivers The fortunes of the hospitality industry are closely linked to the tourism industry and hence tourism is one of the most important growth drivers. Healthy corporate profits and higher disposable incomes with easier access to finance have driven the rise in leisure and business tourism. Despite the global economic slowdown.4% in FY09 and FY10 respectively. with discretionary purchases . Domestic industries have also made heavy investments to expand their facilities through greenfield and brownfield projects. The Indian hospitality industry has recorded healthy growth in recent years owing to a number of factors: Increased tourist movement Increased FTAs and tourist movement within the country has aided growth in the hospitality industry. In addition. the Indian economy clocked growth of 6. The middle class population with higher disposable incomes has caused the shift in spending pattern. thus having a positive impact on the hospitality industry. Attractiveness of India has encouraged foreign players to set up their operational facilities in the country. Changing consumer dynamics and ease of finance The country has experienced a change in consumption patterns. all factors that aid growth in the tourism industry also apply to the hospitality industry. Economic growth India is one of the fastest growing economies in the world. at more than 9% each during FY06-FY08.
occupancy rates dropped. This led to emergence of corporate guest houses. with expected increase in domestic tourist movement and rise in international tourist arrivals. As cities grow larger and more office spaces come up across the city. Lured by higher returns experienced by the hotel industry. Occupancy rates plunged sharply next year. entered the space. India became one of the most attractive destinations for such investments. Development of other markets A major trend in recent times is the development of the hotel industry in cities other than major metros. resorts. While average room rates rose in 2007/08. hit by sharp rise in rates. especially in major metros. average rates for hotel rooms also increased in 2006/07. as demand declined following the global economic slowdown and the terror attacks in Mumbai. corporates started looking for alternate cost-effective lodging options. The industry is expected to report healthy growth in 2010/11. This has led to the same hotel company setting up hotels across different location within a city. Pune. and Jaipur. hotel rates declined during 2009-10. Increased affordability and affinity for leisure travel are driving tourism in India and in turn aiding growth of the hospitality industry. This has led to increase in hotel development activity and expansion of hotel brands within the country. domestic as well as international. As real estate prices have been soaring. New Zealand. investments continued to flow into the hotel industry. with domestic tourist movement in the country being at a high. and recreational facilities) through the automatic route Introduction of ‘Medical Visa’ for tourists coming into the country for medical treatment Issuance of visa-on-arrival for tourists from select countries. Measures undertaken by the government Various policy measures undertaken by the Ministry of Tourism and tax incentives have also aided growth of the hospitality industry. Consequently. especially in major metros. travelers prefer to stay at hotels closer to the place of work/visit to save on time. Marketing strategies . setting up and maintaining businesses and hotels in major metros is becoming more expensive. As a result. The industry has also seen development of micro markets. and leased apartments as replacements for hotels. leading to search for other cities entailing lesser costs. and guest house facilities Five-year income tax holidays for 2-4 star hotels established in specified districts having UNESCO-declared 'World Heritage Sites'. Consequently. at times much higher than that those charged by their counterparts in other parts of the world. While average rates remained lower. liquor etc Capital subsidy programme for budget hotels Exemption of Fringe Benefit Tax on crèches. occupancy rates rose. equipment. especially in primary cities. and Finland Promotion of rural tourism by the Ministry of Tourism in collaboration with the United Nations Development Programme Elimination of customs duty for import of raw materials. employee sports. Trends in the industry The hospitality industry recorded healthy growth in early-2000. Emergence of credit culture and easier availability of personal loans have also driven growth in the travel and tourism and hospitality industries in the country. some of them include: • • • • • • • • Allowance of 100% FDI in the hotel industry (including construction of hotels. The hospitality industry reported improvement in 2009-10. hotel markets have emerged in cities such as Hyderabad. which include Japan. supported by surge in domestic tourist movement. Hotels were charging higher rates. a number of players. While on the one hand. The rise in average rates was also a result of the demand-supply gap for hotel rooms. leading to a rise in occupancy rate during 2005/06 and 2006/07.forming a substantial part of total consumer spending.
These include high real estate prices in the country. consistency. Although around 89.Marketing strategies in the hospitality industry have changed drastically over the past decade. While there is immense potential. hotel companies marketing strategies are differentiation. Travelers increasingly conduct basic research on the Internet. manufacturing facilities and ports across the country provide a good opportunity for budget and mid-market hotels. With revival in the global economy. delivery of brand promises. Additionally. Opportunities The prospects for the hotel industry in India are bright. . This would aid the growth of segments such as MICE. and travel sites are therefore being used for making choices and the information provided tends to influence opinions and choices. and nonuniformity in taxes. However. there exists huge potential for investors and operators across all the segments of hotel industry in India. with the arrival of well educated and experienced travelers. concerns for growth of the industry remain. creating the need for online marketing. The increase in room inventories is expected to make the hotel industry more competitive and hotels would be under pressure to maintain quality and service levels at competitive prices. Several travel portals have emerged in recent times and travelers are increasingly using these portals to make hotel reservations. the supply of branded/quality rooms in India is much lower compared to other countries across the globe. security threats. Blogs. customer satisfaction. Hence.500 additional rooms are expected to come up in India in the next five years. high tax structure. Development and use of technology have also changed the way hotel companies operate. networking sites. amongst others. and customer retention. shortage of manpower. Today. Competitive pricing amongst the branded hotels along with the addition of more budget and mid-market hotels would make the hotel industry cost competitive with other destinations. The upcoming industrial parks. A decade back. the brand name of the hotel was a major driver. international tourist inflow into the country is expected to rise. hotel companies have had to change/realign their marketing strategies. hosting of international sports events and trade fairs and exhibitions in the country are expected to aid both inflow of international tourists and domestic tourist movement.
Identify the service quality dimensions for a Entertainment Industry.2. recommend strategies to fulfill the service quality.343 in text book . Pg.
electronics. In addition. information and people from the origin point to the destination point. judging by independent market analyst Datamonitor's latest research. energy. and telecom will lead to increased market opportunities for providers of logistics services in India. phased introduction of value-added-tax (VAT). at the right time. India is the fourth largest economy in the world. However.ASSIGNMENT. and logistics outsourcing is gaining further momentum with this. capital goods. and is expected to reach a market size of over $125 billion in year 2010. rather than being pre-emptive. as a result of the under-developed trade and logistics infrastructure. services. It includes the proper combination of several activities such as material handling. India has human resources that are high in knowledge and abilities. the companies are only following with new distribution outlets. 4. Strong growth enablers exist in India today in the form of over $300 billion worth of infrastructure investments. The Indian government has favored the logistics market of India by making some helpful plans and policies to assist in its growth. The Indian economy is striving for improvements in the field of logistics and supply chain management to gain the competitive edge in today's worldwide economy. With India's gross domestic profit (GDP) growing at over 9% per year and the manufacturing sector enjoying double digit growth rates. 2. India will have to work on such systemic inefficiencies. As such. the consumer markets are extending beyond the five metros of Mumbai. Delhi. It's the the art and science of managing and controlling the flow of goods. and development of organized retail and agri-processing industries. for the purpose of ensuring supply of the right product. At just above one-quarter of the entire $90 billion Indian logistics market. As leading manufacturers realign their global portfolios of manufacturing locations. India Logistics& TransportationIndustry: $125 Billion Goldmine India's logistics market is all set to experience a period of explosive organic growth. strong foreign direct investment inflows (FDI) in automotive. There are several factors that benefit the Indian economy for reaching success in the field of logistics. in order to attract and retain long-term real investments. "India Logistics Outlook 2007-2008" predicts high double-digit growth rates for both outsourced and contract logistics in India. products. The Datamonitor report. India has been the student rather than the expert when it comes to the field of logistics. Bangalore.II 10marks 1. Chennai and Hyderabad. However. 3PL/outsourced logistics is the outsourcing of a company's logistics operations to a specialized firm. the Indian logistics industry is at an inflection point. There are several events organized for the promotion of logistics in India which are focused in their approach and relevant to the business solutions besides providing a solid platform for allowing people . compared to less than 10% of GDP in almost the entire Western Europe and North America. retail. It is the second-largest English speaking workforce. and information. for a right cost in the right condition. is slated to grow at a compound annual growth rate (CAGR) of over 16% from 2007-10 Logistics in India don't differ too markedly from logistics anywhere else in the world. the increased competition across industry verticals is forcing firms to focus on product distribution. 5. 3. It is believed that about one-quarter of the youth population of the world resides in India. which provides multiple tactical logistics services for use by customers as opposed to the respective company having a business unit in-house to oversee its supply chain and transportation of goods. With increased geographical distribution of incomes in India. namely: 1. it surely is walking on the path of being a service provider of class. warehousing. Discuss the growth in logistics Industry in India. It has the 2nd largest pool of qualified technical workforce. India spends 13 percent of its Gross Domestic Product (GDP) on logistics as opposed to the usual practice of 10 percent by other developing nations. at the right place. But with its current expertise. In the past. the logistics cost of the Indian economy is over 13% of GDP. valuable human resources and positive plans.
through the “process of purchase” and “supply of material from the vendor” right through to “final acceptance” and “payments to the supplier” and “issue to the indenter” and has to be considered as a “one whole activity” with each stage having an impact on price/cost of material supply. The key sectors include fashion. DEFINITION : The simplest way to. To put it more simply. the elements of which include inventories. The most wide spread definition from council of Logistics Management says that “Logistics is the part of the supply chain process and plans. India is keen to offer transportation and logistical service to grow itself as an emerging marketplace. the material supply logistics starts from the base level of “generation of the demand”. The Confederation of Indian Industry (CII) is the premier business organization with a known commitment towards the development of logistics in India. storage and handling. It is brought up to satisfy the latest industry needs for specialized SCM and logistics.describe logistics is to say that it is all about ways and means of meeting the demand for materials i. Indian logistical market players have started to gear up and position themselves in the global scenario. pharmaceuticals. logistics.e. raw materials or movement within the company or the physical distribution of finished goods. warehousing and inventory management. storage. implements and controls the efficient. logistics encompasses all of these. The true potential of these service providers is yet to be realized. related to the flow of materials and the relationship between the materials and their use at different facilities. internal and external movements and returns of material for environmental purposes.An Overview Introduction Logistics call for an understanding of the total supply chain. packing. This has resulted in the creation of the need for a vast range of supply chain management (SCM) and logistics solutions which cover several factors such as supply chain. Information technology (IT). in itself. Several global third party logistics providers (3PLs) have already started developing their operations and service networks in India with a purpose to explore the rampant Indian economy. a system. This has benefited the efficiency and productivity of the complete value chain in several dimensions of profits. Typical logistics framework mainly consists of Physical Supply. when he wants. This has been an emphatic source of providing business solutions and their development. material handling. freight. where he wants etc. precision tools and engineering goods. Internal Operations and Physical Distribution of Goods and Services. Logistics is responsible for all the movement that takes place within the organization whether it is inbound logistics of incoming. forwarding. India is being treated as the destination of the future in the field of logistical service providers all over the globe. . Logistics is. Definition includes outbound. it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel. The logistics concentrate on dynamic processes. speed and customer service. all of which need special shipping provisions Growth in Logistics .from a wide industry spectrum to meet and provide business within themselves from all over the country. It has established the CII Institute Of Logistics which is a specialized state-of-the-art institute of excellence with its focus on SCM and logistics. inbound. satisfying the customer with what he wants. jewelry. gems.
cement. excellent short and long term forecast visibility and JIT capability. JIT ends up being SHIT . It is also suitable for emergent item to be imported for some specific requirement. packaging etc. Rail: Used for delivery of a wide range of goods including coal. Pipe Line : Used by oil sector companies for mass movement of Petroleum products including gases. This mode is ideal for transportation of heavy and bulky goods and suitable for products with long lead times. will lead not only achieving immediate cost reductions in operations but also to enormous productivity gains over the next few years. The study of logistics is important to establish a lean supply chain which would give an advantage of quick product change over.” SCOPE: Logistics is not confined to manufacturing operation alone. fertilizers. Many transport companies have expertise for fast delivery. for making scheduled delivery. THIRD PARTY LOGISTICS : Third Party Logistics (3PL) provider handles all or most of freight of the organizations including the management of information by the third party. MODES OF TRANSPORTATION IN LOGISTICS : In order to transport material from one place to another Logistics Managers are using Rail. A logistics expert needs to understand these modes based on priorities. including Govt. Road : Used by suppliers to deliver goods in a cost effective manner and best suited for short distances. to decide the appropriate mode of Transportation. Road. Management of Logistics is an art which is extremely difficult to perfect in India. and having to oversee hundreds or thousands of shipment. where substantial outflow of freight is involved. iron ore. freeing the company from day to day interaction with carriers. capability. lead time etc. It is relevant to all enterprises. services and related information from the point of origin to the point of consumption in order to meet customers requirements. Air. steel. . The study of logistics is especially important for bulk raw materials. petroleum products and other heavy goods.effective flow and storage of goods. Water & Pipe Line as the modes of Transportation. institutions such as Hospitals and schools and service organization such as retailers. usually not connected by any other mode of Transportation. Due to quite low operating cost it is one of the preferred mode of transportation. mostly conducted in containers of varied size. product type. Water : Used by firms for delivery of goods from distant suppliers. New and cheaper information flow resulting from internet enabled solutions. food grains. Air: Used mostly for delivery of high value and tow volume goods from distant suppliers.some how in time. banks and financial service organizations.
but rather leverage the solutions created by 3PL.. There are many variations of the 4PL model that are practiced. The options are : increased trailer utilisation. • Resource constraints that require companies to concentrate only on their core manufacturing or new product development activities. To put simply.. to provide maximum overall benefits. The 4PLs do not compete with 3PLs as they have superior expertise in their respective fields by virtue of their investment and specialization. 4PL organizations can create unique and comprehensive supply chain solutions that cannot be achieved by any single provider. 4PL providers do not own assets for transportation or warehousing. • Competition that has forced companies towards more responsiveness and a reduction in inventories. FOURTH PARTY LOGISTICS : Fourth Party Logistics (4PL) provider is a supply chain integrator that assembles and manages the resources. capabilities and technology of its own organization with those of complementary service provider to deliver a comprehensive supply chain solution. . 4 PL companies are suppliers which have the expertise to manage resources. in order to identify and provide ‘best in class’ services to their clients. Three different models are summarized as under. combining full truckload shipments. It could be the use of a transportation carrier. Purchase asset based transportation is becoming increasingly a commodity. or a third party freight manager to perform all or part of a company’s production distribution functions. a warehouse. technology providers and management consultants. “White oufsourcing third party logistics is now a accepted business practice. 4PL is emerging as a path to achieve more than the one time operating cost reductions and asset transfers of a traditional outsourcing arrangement. requiring core competence in logistics management. value delivery processes and technology for their clients in order to allow their clients to totally outsource their logistics management activity. According to John Gaftorna.providers.” 4PL can be described as the complete outsourcing of the logistics function including procurement of service providers. 3PL refers to the outsourcing of a logistics function. An increased need for small but frequent shipments with 100 percent reliability.The tracking and control of movement of goods drive freight optimization and asset utilization. The principle reasons of for this function are as under: • Globalization of sourcing. manufacturing and distribution leading to an increase in the complexity of material movement. Through alliances between best-ofbreed third party service providers. consolidation. Fourth Party Logistics is emerging as a breakthrough solution to modern supply chain challenges. aggregation of smaller buyers.
A) Lead logistics provider: The 4PL provider acts as an in house freight management company. CONCLUSION: Logistics is one of the area of the supply chain i. C) Industry Innovator: Under this model the 4PL uses its expertise and resources to create a solution not for any single client. delivery time and the speed of information as well as ordering and payment process. RESERVE LOGISTICS: Increasingly. it might or might not have a role in the selection of 3 PL partners. 3PI selection and freight management on behalf of its client. The services provided by a 4PL provider are: • Freight Negotiations with 3PLs • Freight Contract Management • Transport Billing • Continuous Improvement Programs • Management of Service Providers • IT Solutions • Risk Management and Insurance • Cash-flow Management. B) Solution Integrator: In this variant of the model. to compete on services. but for offering 4PL services to a number of clients in an industry. Due to the big boon of information technology. Logistics service providers who offer these services have to tackle issues pertaining to duty payment on refurbished products. growing at a tremendous case as the Internet and E-Commerce is drastically changing the range. customs documentation and the establishment of collection points for repair for the customers. the time is not far when 5 PLs and 6 PLs may emerge which will probably we doing part of the manufacturing and marketing for the organizations. as a strategy. companies offer repair and replacement services for their products under the warranty periods. the 4PL acts as the integrator of various 3PLS and as a single window for freight negotiations.e. greatly influencing and enhancing the effectiveness of logistics. It takes care of transport invoicing and the monitoring of the performance of the 3 PLs. The defective products are often shipped across international borders to common repair centers to be refurbished and returned to the originating station. .
347 .”Gap analysis “is the concern for both customers and service providers of public utility services.-How to make success of their services? Pg.2.
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