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ABSTRACT
The operation of transportation determines the efficiency of moving
products. The progress in technique and management principles improves
the moving load, delivery speed, service quality, operations costs,
the usage of facilities and energy saving.
Transportation takes a crucial part in the manipulation of logistics.
Reviewing the current condition, a strong system need a clear frame of
logistics and a proper transport implements and technique to link the
producing procedure.
The objective of the paper is to define the role of transportation in
logistics for the reference of further improvement. The research was
undertaken to assist logistics manager, researchers and transportation
planner to define and comprehend the basic view of logistics and its
various applications and the relationship between logistics and
transportation.
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2
CHAPTER
I
Introduction
Since logistics advanced from 1950s, there were numerous researcher
focused on this area in different application. Due to the trend of
nationalization and globalization in recent decades, the importance of
logistics management has been growing in various areas. For
industries, logistics help to optimize the existing production and
distribution process based on the same resource through management
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technique for promoting the efficiency and competitiveness of
enterprise. The key element in logistics chain is transportation
system, which joins the separated activities. Transportation occupies
one- third of the amount in the logistics costs and transportation
system influence the performance of logistics system hugely.
Transportation is required in whole production procedures, from
manufacturing to delivery to the final consumer and returns. Only a
good coordination between each component would bring the benefit to
maximum.
Council of logistics management(1991) defined that logistics is ‘part
of supply chain process that plan, implements, and control the
efficient, effective forward and reverse flow and storage of goods,
service and related information between the point of origin and the
point of consumption in order to meet customer requirements’.
Logistics describes the entire process of materials and products
moving into, through and out of firm. Inbound logistics covers the
movement of material received from suppliers. Materials management
describes the movement of material and components within a firm.
Physical distribution refers to the movement of goods outward from the
end of the assembly line to the customer. Finally a supply chain
management is somewhat larger than logistics, and it links logistics
more directly with the user’s total communication network and with the
firm’s engineering staff.
The commodity of the recent definition is that logistics is a process
of moving and handling goods and materials, from the beginning to end
of the production, sale process and waste disposal, to satisfy
customer and add business competitiveness. It is ‘the process of
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anticipating customer needs and wants, acquiring the capital,
material, people, technologies, and information necessary to meet
those needs and wants, optimizing the goods or service producing
network to fulfill customer requests and utilizing the network to
fulfill customer request in a timely way. Simply to say logistics is
customer oriented operation management.
1.1Industry profile
Murugappa group was founded in 1900 is one of the leading business
conglomerates, founded, managed and largely owned by Murugappa family.
The group has 28 businesses including eight listed companies actively
traded in NSE and BSE headquartered in Chennai. The major companies
of the group include carborundum universal limited,cholamandalam
investment and finance company ltd,cholamandalam MS general insurance
ltd,coromandel international limited,coromandal engineering ltd, EID
parry ltd, parry agro industries, tube investment of India limited and
wendt(india) ltd.
Market leaders in several segments including abrasives , auto
components ,cycle, sugar, farm input, fertilizer, plantations, bio
products ,and nutraceuticals, the group has forged strond alliance
with leading international companies like groupe critiqueTunisian,
Foskor, Cargill,mitsui crucible and socieded quimica y minera de
Chile(sqm). The group has a wide geographical presence spanning 13
states in india and 5 continent across the globe.
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Renowed brands like BSA, Hercules, ballmaster, Ajax, parry’s, chola,
gromor and paramfos are from the Murugappa stable. The organization
fosters an environment of professionalism and has a workforce of 32000
employees. The company is sometime referred to as” THE TATA of south
india” due to its very diversified products and business portfolio. It
is known for its strong value and its focus on giving back to society.
The foundation of this group was laid by Dewan BahadurA M Murugappa
chettiar who established a money lending and banking business in 1900.
In 1930 the business moved back to India to start all over again from
the scratch. In 1947 established as coromondal engineering company
limited. In 1949 established TI Cycles of India ltd. In 1955 tube
investment of India ltd established tube products of India limited in
association with tube products (old burry) limited UK. IN 1951
carborundum universal of madras India limited was established in
madras, tamilnadu as a tripartite collaboration between Murugappa
groups. In 1965 established metal forming and in 1968 purchased
kadamane estates. In 1981 murugappa group took over EID party. In
1983 murugappa Morgan thermal ceramics limited is established. In 1993
TIDC India acquired satavahana chain. In 1999 tube products acquired
steel strips and tubes limited. In 2001 tube investment of india
limited acquired Cholamandalam investment and finance company
limited.in 2006 Coromandal fertilizer acquired ficom organic limited.
The murugappa group has a diverse interest in engineering, precision
tools, finance, agro products and bio technology. The group products
are primarly divided into the following sectors:
Agriculture and farm input(fertilizer, pesticides, plantations,
sugar and bio products)
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Engineering( tubes, chain and metal forms, material science)
Consumer durables(bicycles ,fitness equipment)
Services (financial service, insurance service IT, travel)
1.1.1Murugappa group corporate board
A VELLAYAN EXECUTIVE CHAIRMANM M MURUGAPPA VICE CHAIRMANN SRINIVASAN DIRECTOR FINANCESRIDAR GANESH DIRECTOR HUMAN RESOURSEVENKATATRAMAN THYGARAJAN NON EXECUTIVE EXTERNAL DIRECTORDEEPAK SATWALEKAR NON EXECUIVE EXTERNAL DIRECTORSRIDAR IYENGAR NON EXECUTIVE EXTERNAL DIRECTOR
1.1.2Group companies
Tube investment of india limited
Tube products of india
Eid parry
Coromandal international limited
Carborundum universal limited
Cholamandalam investment and finance company limited
Cholamendalam MS risk service limited
Parry agro
Ambadi enterprises limited
Parry enterprises india limited
Net access private limited
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Parry infrastructure company limited
Sterling abrasives limited
1.2Company profile
Tube products of India ltd was established in 1955 in collaboration
with tube products (old bury) limited UK as a measure of backward
integration with bicycle plant. In 1959 tube investment of India was
formed by Merging TI cycles of India and tube products of India.
Today TPI is the most preferred supplier of precision tubes, electric
resistance welded and cold dawn welded to major automotive companies
in India and abroad. TPI is India’s undisputed market leader in CDW
tubes for automotive industry. It also has significant market presence
in power plant, boiler, textilemachinery, general engineering. It is
the market leader in telescopic front fork inner tubes and cylinder
bore tubes for absorber and gas spring applications, propeller, and
shaft tubes for automotive segment. Other specialty product with rear
axle tubes, side impact beam, ties rods, drag link, heavy thick
steering shaft, and hydraulic cylinder tubes.
The international business division focuses on international market
gearing TPI to compete global tube manufacturer. The tubular component
division which manufacture high strength tubular auto component
provides innovative tubular solution to customers, resulting in weight
reduction, higher component efficiency and cost reduction. It also
produces a wide range of CRCA strips including special extra deep
drawing high tensile medium carbon finding application in industries
such as bearing, automobile, and general engineering.
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Stainless steel tube is the recent addition to TPI’s portfolio. A
dedicated state of the art plant housed in Avadi(Chennai) manufactures
TIG wielded austenitic, ferretics, and duplex grades of SS tubes
catering to the demand of power plant/boiler, oil and petrochemical,
foo d processing and various other core industries.
TPI has been supplying to customer such as Bajaj auto ancillaries, Tvs
motors ancillaries, Hero Honda ancillaries, Tata motors, Toyota India,
Delphi, Gabriel, escorts, endurance, and thermax. Its success stem
from market driven customer oriented approach coupled with superior
process design, short product development cycle, delivering high
quality products and efficient customer service ensuring total
customer satisfaction.
TPI received ISO-TS 16949 for all plants, ISO 9001:2000 for all
plants, ISO 14001:2004 for avadi , ibd stainless steel tube plant and
self-certification for boilers tube by the central boiler board.
Tubular components division plant of TPI has won a supplier
performance award 2007-2008. Timely delivery, top notch quality and
excellent service have been a key for the division for winning this
award. Stainless steel plant has obtained the Lloyds register, a third
party certification. TPI is the winner of the sword of honour for
outstanding safety performance from BRITISH SAFETY COUNCIL.
1.2.1Market leader in India for range of products:
Steel strips
Steel tubes
Bicycles
Chains(auto,agricultural&industrial)
Cold roll
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Well established market presence in
USA
Europe
Latin America
Asia
It has organized into four business division for focused growth,
high degree of vertival integration 13 manufacturing plant spread
over six states of India Tamilnadu Andhra Pradesh, Karnataka,
Maharashtra, Madhya Pradesh, and Haryana.
1.2.2Major clients
Delphi automotive system GabrielIndia ltd
Hydraulics ltd
Munjal showa ltd
Rane madras ltd
Ti diamond chain ltd
Ashok Leyland ltd
Ford india ltd
Bhel(trichey&ranipet)
Thermax
Bajaj tempo ltd
Products of tidc
Cycle fork
fan down rod
cycle frames
cylinder bore tubes
exhaust tubes
front fork tubes
transformers
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air pollution control equipment
industrial chain
1.2.3Product application
The cold rolled steel division manufactures the widest range of
strips for a variety of industries such as bearing auto and auto
ancillary, electrical stamping, bicycle and general engineering
and consumer goods. With strips thickness ranging from 0.1mm to
8.00mm and width of 10mm to 1000mm, TPI is a unique manufacturer,
providing a comprehensive product range in terms of dimensions
and grades. The collaborative approach with manufacturer and end
user has enabled TPI to develop steel strips for a variety of
application and customer specific requirements.
Fine
blanking
applicat
ion
AutomobileComputerCutleryTools and hardware
Bearing
applicatio
n
Engines and bearings
Ball bearing cages
Taper rolling cages
Chain
applicatio
n
Inner and outer plates
Rollers and bushes
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Automotiv
e and
general
applicati
on
Door frames
Clutch assembly& seat frames
Door hinges and internal body parts
1.2.4Quality
At the cold rolled division, quality assurance is an integral
part of the manufacturing process. Every product is processed
according to the norms sequenced by the process control engineers
and monitored through uncompromising quality control test at
every stage. Our strict adherence to quality at every stage of
manufacturing has earned them the prestigious ISO 9001
certification.
1.2.5R&D strength
World class product range world class R&D. at the cold rolled
steel division well equipped R&D center and a competent team
ensures that every customer get the benefit of cutting edge
technology and expertise.
The key objective of R&D wing is:
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To understand the manufacturing process and application of
the product.
Customize products to provide improved level of performance
Lend technical support to customers
Extend the usage of TPI resources including testing
resources to solve customer application issue.
1.3Objective of study
To re- clarify and redefine the position relation relationship
between transportation and logistics system.
Development of logistics and transport-related sectors.
To release traffic load in urban area.
Logistics in urban and rural area
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1.4Scope of the study
A logistics chain focuses upon an item part of an inventory and
extends from when the item is created until it is dissolved (item
consumed, becoming a part of another item or being split into several
items). For instance a logistics chain could include a product that
has been assembled into a final good, brought to a distribution center
to be sorted and temporarily stored and delivered to a retail store. A
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transport chain focuses upon a consignment and extends over movement,
physical handling and activities directly related to transport such as
dispatch, reception, transport planning and control. For long distance
transport chain can involve a sequence of modes and terminals.
Containerization and inter modals have helped improved the efficiency
of transport chain and consequently supply chain.
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1.5Need for the study
To know development of logistics and its cooperation in transport
system
To understand the role of transportation in logistics
To study various transport operation in logistics activities
The application of logistics in various felid
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1.6Limitation of the study
No previous experience to handle such type of projects
Due to the limitation of time more the research could not be made
more detailed
Due to the confidentiality of some data accurate information was
not revealed
This study is conducted only in tube products of India Avadi
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1.7LIERATURE REVIEW
Council of logistics management (1991) defined that logistics is part
of supply chain process that plans, implements, and control the
efficient, effective forward and reverse flow and storage of goods,
services, and related information between the point of origin and the
point of consumption in order to meet customer requirements.
1) Johnson and wood’s definition uses five important key terms which
are logistics, inbound logistics, material management, physical
distribution, and supply chain management to interpret.
2) According to logistics partners oy Helsinki fi “Logistics is
defined as a business planning framework for the management of
material service information and capital flow. It include the
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increasingly complex information communication and control system
required in today’s business environment”.
3) Military definition” the science of planning and carrying out the
movement and maintaince of forces those aspects of military
operations that deal with the design and development acquisition
storage movement distribution maintenance , operation and
disposition of facilities and acquisition of furnishing of
service”.
4) Canadian association of logistics management defines logistics as
“the process of planning, implementing, and controlling the
efficientflow and storage of raw material, in process inventory ,
finished goods and related information from of origin to point of
consumption for the purpose of meeting customer requirements”.
5) The government computer magazine defines as “ logistics is the
science of planning and implementing the acquisition and use of
the resource necessary to sustain the operation of a system”
6) Air force institute of technology defines logistics “ acquisition
logistics as everything involved in acquiring logistics support
equipment and personnel for a new weapons system. The formal
definition is “ the of systematically identifying, defining,
designing, developing, producing, acquisition, delivering,
installing and upgrading logistics support capability requirement
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through the acquisition process for air force system, sub system
and equipment.
7) Integrated logistic support is a management function that
provides planning funding and functioning control which help to
assure that the system meets performance requirements is
developed at a reasonable price and can be supported throughout
its life cycle.
Outsourcing of logistics (Mohammed Abdul Razzque)” outsourcing
third party logistics and contract logistics generally
mean the same thing. Lon Africk of consultant AT Kearney has
defined them as multiple logistics service provided by single
vendor on a contractual basis. They offer at least two services
that are bundled and combined, with a single point of
accountability using distinct information system that are
dedicated to and integral to the logistics process (Bradley 1994
c). it should however be noted that outsourcing “may be narrow in
scope and limited to one type of service (warehouse) only”.
According to Bradley there is no difference between outsourcing
logistical functions and any other procurement process. He asserts
that like a reliable supplier of material and parts, contract
logistician should also provide a high level of customer satisfaction
so that clients can become a tougher competitors.
Logistics and freight distribution Dr Jeanpaul rodrigue and Dr markus
hesse:
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The growing flow of freight has been a fundamental component of
contemporary changes in economic system at the global regional and
local scales. These changes are not merely quantitative with more
freight in circulation but structural and operational. Structural
changes mainly involve manufacturing system with their geography of
production while operational changes mainly concern freight
transportation with its geography of distribution.The application of
logistics enables a greater efficiency of movement with an appropriate
choice of modes ,terminals, routes and scheduling. The implies purpose
of logistics is to make available goods, raw material and commodities
fulfilling four major requirements related to order, delivery,
quality, and cost fulfillment. Logistics is thus multidimensional
value added activity including production location time and control of
elements of supply chain.
According to Coyle, Baradi, and Langley there are four sub divisions
of logistics:
Business logistics-part of supply chain management that plans,
implement, controls, the efficient effective forward and reverse flow
and storage of goods, services and related information between the
point of origin and point of consumption to meet customer requirments.
Military logistics- all that is necessary to support the operational
capaibility of military forces and their equipment in order to ensure
readiness, reliability, and efficiency.
Event logistics- management of all involved in organizing, and
deploying the resource necessary to ensure the occurrence of an event
and efficient withdrawal afterwards.
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Service logistics-acquisition, scheduling, and management of
facilities, personnel, and material need to support and sustain a
service operation.
Coyle, Baradi, and Langley list a number of activities that lie within
the realm of logistics:
Order fulfillment- activities involved with completing customer
order.
Traffic and transportation- the physical movement of goods
Warehousing and storage- a number of warehousing directly impact
logistics. For ex how many warehouse are needed.
Plant and warehouse site location-location can alter time and
place relationship between the warehouse and customer.
Material handling- the placement of goods and the movement of
goods within a warehouse, factory or the other facility.
Industrial packaging- transportation directly impacts the type
packaging needed.
Purchasing-quantities purchased directly affect transportation
costs. Also, transportation relates directly to the distance or
location of goods purchased by firm.
Demand forecasting-accurate and reliable forecasting is essential
for effective inventory purpose.
Inventory control- if transportation is slow higher level of
inventory are needed.
Production planning- it is used to ensure adequate market
coverage
Parts and service support-it depends upon speed of transport,
location of warehouse, and forecasting of support function needs.
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Return good handling- reverse supply chain logistics is
increasingly important but frequently overlooked dimension in
logistics.
Salvage and scrap disposal- disposal is an integral part of the
reverse supply chain. There is an increasingly interest, in the
logistics literature, in the impact of location of evaluation and
disposal facility for returned goods.
Customer service level- logistics play an extremely important
role in ensuring that customer gets the right products at the
right place at the right time. Transportation, warehousing,
forecasting, inventory control, and production planning, all have
a direct impact on customer satisfaction.
1) 1.7.1Interrelationship between transport and logistics
Without well-developed transportation system, logistics could
not bring its advantages into full play. Besides, a good
transport system in logistics activities could provide better
logistics efficiency, reduce operation cost, and promote
service quality. The improvement of transportation needs the
effort from both public and private sectors. A well-operated
logistics system could increase both the competitiveness of
the government and enterprise.
2) 1.7.2The role of transportation in service quality
The role that transportation plays in logistics system is more
complex than carrying goods for the proprietors. Its
complexity can take effect only through highly quality
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management. By mean of well -handled transport system, goods
could be sent to the right place at right time in order to
satisfy customer’s demand. It brings efficacy, and also builds
a bridge between producer and consumer. Therefore
transportation is the base of efficiency and economy in
business logistics and expand other function of logistics
system. In addition, a good transport system performing in
logistics activities bring benefits not only to service
quality but also to company competitiveness.
3)1.7.3Transport cost and goods characters in logistics
Transport system is the most important economic activity
among the components of business logistics system. Around
one third of two thirds of the expenses of enterprises
logistics cost are spent on transportation. According to
the investigation of national council of physical
distribution management (NCPDM) the cost of
transportation on average accounted for 6.5% of market
revenue and 44% of logistics cost.
1.7.4Forms of logistics operation
1.7.4.1Supply chain management
ROSS defined SCM as continue sly evolving management
philosophy that seeks to unify the collective productive
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competencies and resource of the business function found
both within the enterprise and outside in the firm’s
allied partners located along intersecting supply
channels into a highly competitive customer enriching
supply system focused on innovative developing innovative
solution and synchronizing the flow of market place
products, services and information to create unique
individualized sources of customer value.
1.7.4.2Reverse logistics
Rogers et al defined reverse logistics as “ the process
of planning implementing and controlling the efficient,
cost effective flow of raw material, in process inventory
, finished goods and related information from the point
of consumption to the point of origin for the purpose of
recapturing value or proper disposal.
The two main reasons behind the rise of reverse logistics
are the globalization of markets and policies for
environment protection. A successful reverse logistics
could help to increase the service level of companies and
reduce the cost of producing processes.
1.7.4.3Maritime logistics
Maritime industry plays an important role in
international freight. It can provide a cheap and high
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carrying capacity conveyance for consumers. Therefore it
has a vital position in the transportation of particular
goods such as crude oil and grains. Its disadvantage is
that it needs longer transport time and its schedule is
strongly affected by the weather factors. To save cost
and enhance competitiveness current maritime logistics
firms tend to use large scaled ships and cooperative
operation technique.
1.7.4.4Air freight logistics
Air freight logistics is necessary for many industries
and services to complete their supply chain and
functions. It provides the delivery with speed, lower
risk of damage, security, flexibility, and accessibility
and good frequency for regular destinations, yet the
disadvantage is high delivery fee. Reynolds Feighan said
air freight logistics is selected ‘when the value per
unit weight of shipment is relatively high and the speed
of delivery is an important factor’. The future
tendencies of air freight development are integration
with other transport modes and internationalization and
alliance and merger between air transport companies. The
future pattern of air freight logistics is cooperative
with other transport modes such as maritime and land
transport to provide a service base in just in time and
door to door.
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1.7.4.5Land logistics
Land logistics is very important link in logistics
activities. It extends the delivery service for air and
maritime transport from airport and seaport. The most
positive characteristics of land logistics high
accessibility level in land areas. The transport modes of
land logistics are railway transport, road freight
transport, and pipeline transport.
Railway transport has an advantage of carrying high
capacity, lower influence by weather conditions and lower
energy consumption while disadvantage as high cost of
essential facility, difficult and expensive maintenance,
lack of elasticity of urgent demands and time consumption
in organizing railway carriages. Road freight has an
advantage as cheaper investment funds, high
accessibility, mobility and availability. Their
disadvantages are low capacity, lower safety and slow
speed. The excessive usage of land transport also brings
many problem such as traffic jam, pollution and traffic
crashes.
1.7.4.6Express delivery
As the increasing demand of time accuracy and
decentralization of production the need to reduce stock
cost has led to the just in time delivery principle,
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which involve more frequent delivery of material at right
time and at the right place in the production process.
The characteristics of express delivery are door to door
service, efficiency, traceability, just in time and
growing various delivery demands.
1.7.4.7E commerce
E commerce is the future trend of business style. It
brings many benefits for both companies and consumers. E
commerce expands market area from regional to global, e
commerce uses electronic technique instead of traditional
paper work which promotes the industries efficiency and
competency. It might reduce the number of warehouse and
stock cost. Therefore the price could be lowered.
1.7.4.8City logistics
City logistics is the process for totally optimizing the
logistics and transport activities by private companies
with the support of advanced information system in urban
area considering the traffic environment its congestion
safety and energy saving within the framework of market
economy.
Cities are the main location of business activities.
Hence they play an important role in economic
development. However given the high concentrated
28
development in urban areas many cities have serious
traffic problems and negative environment impacts such as
noise and air pollution, this is the cost in both
developing and developed economies.
Urban freight logistics can be broken down in many
elements such as storage transport and handling.
Conventional improvement of logistics process is usually
only focused on single element.
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CHAPTER II
2.1Research methodology
A science of studying how research is done
A way to systematically solve the research problem but logically
adopting various steps
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Methodology helps to understand not only the products of
scientific inquiry but process itself
Aims to describe and analyze methods, throw light on their
limitations and resource, clarify their presuppositions and
consequences, relating their potentialities to the twilight zone
at the ‘frontier of knowledge’
2.2Ethics of Research
As a profound social activity research connects us to those who
will use it, to those whose research we used, through them, to
the research that our sources used. Hence beyond technique, we
need to think about ethics of civil communication
In addition to construction of bonds within any community, ethics
deal with a range of moral and immoral choices. Research
challenges us to define individual moral principles, academic
research are less tempted to sacrifice principle for a gain than
commercial researchers
Research done in best interest of others is also in your own
2.3Benefits of research methodology
Advancement of wealth of human knowledge
Tools of the trade to carry out research, provide tools to look
into things in a life objectively
Enriches practitioner and his practice , provide chance to study
a subject in depth, enable us to make intelligent decisions
31
Doing research is the best way to learn to read and think
crically.
2.4 TYPE OF RESEARCH
2.4.1Analytical research and descriptive research
1) Uses of facts or information already available and analyze to
make critical evaluation.
2)according to Glass and Hopkins descriptive research involves
gathering data that describes events and then organizes,
tabulates, depicts, and describes data collection. It often use
visual aid such as graphs and charts to aid the reader in
understanding the data distribution. Because the human mind
cannot extract the full import of large mass of raw data,
descriptive statistics are very important in reducing the data to
manageable form. When in depth narrative description of small
number of cases is involved, the research uses description as a
tool to organize data into patterns that emerge during analysis.
Those pattern aid the mind in comprehending a qualitative study
and its implication.
2.5 Source of data
2.5.1Primary data
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Data that has been collected fromfirsthand experience is known as
primary data. It is not been published yet and is more reliable
authentic and objective. It is not been changed or altered by
human beings therefore its validity is greater than secondary
data.
2.5.2Sources of primary data
Sources for primary data are limited and at times itbecomes
difficult to obtain data from primary source because of either
scarcity of population or lack of cooperation. Regardless of any
difficult one can face in collecting primary data; it is the most
authentic and reliable data source.
Following are the some of the source of primary data
2.5.3Experiments: it requires an artificial or natural setting in
which to perform logical study to collect data. In experiments
the experimenter has to keep control over the influence on any
extraneous variable on the result.
2.5.4Survey: it is most commonly used method in social science,
management marketing and psychology to some extent. Survey can be
conducted in different methods.
2.5.5Questionnaire: it is a list of question either opens ended
or close ended for which the respondent give answer.
Questionnaire can be conducted via telephone, mail, live in a
public area, electronic mail.
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2.5.6Interview: It is a face to face conversation with the
respondent. In interview the main problem arises when the
respondent deliberately hides information otherwise it is an in
depth source of information. The interviewer cannot only record
the statement of interviewee but he can observe the body
language, expression and other reactions to the questions too.
This enables the interviewer to draw conclusion easily.
2.5.7Observations: it can be done by letting the observing
person know that he is being observed or without letting him
know. It can also be made natural settings as well as in
artificial created environment.
2.5.8Secondary data: It is the data collected by someone other
than the user and it is collected through qualitative research.
It saves time that would otherwise be spent collecting data and
particularly in the case of quantitative data.
2.5.9Source of secondary data
2.5.10Published printed sources: There is variety of published
printed sources. Their credibility depends on many factors. For
example on the writer, publishing company time and date has
become much easier.
2.5.11Books: Books are available today on any topic that you
want to research. These book starts before even you have selected
the topic. After selection of topic books provide insight on how
much work has already been done on same topic and you can prepare
34
your literature review. Books are secondary source but most
authentic one in secondary data.
2.5.12Journals/periodicals: journals and periodicals are
becoming more important as far as data collection is concerned.
The reason is that journal provides up-to-date information which
at times books cannot, and secondly journals can give information
on the very specific topic on which you are researching rather
talking about general topics.
2.5.13Magazines/newspaper: magazines are also effective but not
reliable. Newspaper on other hand is more reliable and in some
cases the information can only be obtained from newspaper as in
the case of some political studies.
2.5.14Published electronic journals: as internet is becoming
more advanced fast reachable to the masses, it has been seen that
much Information that is not available in printed foam is
available on internet. In the past the credibility of information
was questionable but today it is not. The reason is that in the
past journals and books were seldom published on internet but
today almost every journal and book is available online
2.5.15E-journals: it is available most common than printed
journal s. latest journal are difficult to retrieve without
subscription.
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2.5.16General websites: generally websites do not contain very
reliable information so their content should be checked for the
reliability before quoting them.
2.5.17Weblogs: it is also becoming common. They are actually
diaries written by different people.
2.5.18Government records: it is very important for marketing
management, humanities, and
social science research.
1) Census data/population statistics
2) Health records
3) Educational institute record
2.5.19Public sector record:
1) NGO survey data
2) Other private company’s record
2.5.20Tools for data analysis
The data used are based on secondary data therefore the
tools used for this analysis are:1. Statistical tools like Bar chart and
2. Pie chart
2.6DATA ANALYSIS AND INTERPRETATION
2.6.1The logistics industry
The annual logistics cost in India is valued at rupees 6750
billion and it is growing 8-10% annually. Logistics cost by value
36
accounts for around 13% GDP in India- this is much higher than
that in US (9%), Europe(10%) and japan (11%) but lower than that
in countries like china (18%) Thailand (16%). In particular the
percentage-wise share of transport cost( an important constituent
of total logistics cost incurred by the nation) by value of GDP
has steadily increasing.
The high cost of logistics in India when compared to developed
nation may be attributed to poor quality of infrastructure and
inadequate service quality vis-à-vis counterpart such as US and
Europe. The transportation, logistics, warehouse, packing sector
in India is dominated by the unorganized segments (small truck
owning companies linked to intermediate broker or transport
companies, small warehouse operator, custom broker, freight
forwarder). The organized segment account for 10% of the total
logistics market in India.
The type of logistics service provided in India are yet evolving,
the focus in India has been on enabling ‘physical distribution’
as compared to developed nations where the focus has
progressively shifted to ‘integrated logistics management’.
2.6.2 Evolution of logistics service
37
External
Global logistics
Traditionally Indian logistics industry is made up of core
service provider and contracts are issued for trucking, shipping,
inland container depot, container freight station etc. There is a
gradual shift towards provider who bundle service such as
transport, warehouse, freight forwarding and who work as business
process provider. This shift is driven by global customer demand
for more control, higher technology, one stop solution for all
logistics need across geographies.
2.6.3Growth rate of various transport segments in India
Segment Mode of transport Growth rate (CAGR %)
Transportation
Road 5.50%
Airline passenger
service
14%
Airline freight
service
11%
shipping 13%
Figure 2.6.3
38
Physical
Internal integrated
Category 10246810121416
roadairline passengerairline freighshipping
Inference: From the above chart it is inferred that airline
passenger has grown around 13%.
2.6.4Various modes of segments in logistics
Segment Mode of transport Growth rate (CAGR)
Rail service 8.30%
warehousing Organized warehousing 20%
Value added
service
packaging 14-15%
Figure2.6.4
39
0
5
10
15
20
25
RAIL SERVICEWAREHOUSINGPACKING
Inference:
From the above chart it is inferred that organized warehousing
has grown by 20%.
2.6.5Contribution of GDP in Transport sector
YEAR GDP(TRANSPORT SECTOR)
1950 3
1960 4
1980 5
2010 7
40
Figure 2.6.5
1950 1960 1980 20100
1
2
3
4
5
6
7
8
Series7Series6Series5Series4Series3Series2Series1
Inference:
Fromthe above chart it is inferred that the transportation sector
GDP has contributed around 7% in 2010.
2.6.6Projected GDP GROWTH RATE IN TRANSPORT SECTOR
2008 1000
2012 5000
2018 6000
2022 7000
41
Figure 2.6.6
0
1000
2000
3000
4000
5000
6000
7000
8000
2008201220182022
Inference
For a period of 2008 to 2022 we expect the GDP to grow
between7.5% to 8%. Accordingly we project that the transportation
sector would record a growth of 8.5% to 9% over the same year.
2.7Road transportation segment
India has the world second largest network of roads. National
highway foam only 2% of the total roads by length and carry about
40% of traffic. About 80% of roads in India are village roads.
42
The road sector is significant to India’s transportation segment
as it accounts for nearly 65% of freight and 85% of passenger
traffic in country. The small operators are involved mainly in
physical movement of goods and depend on brokers and other fleet
operators who in turn depend on booking agents for obtaining
business. The small operator are not in a position to perform
functions of aggregating, handling, delivering of cargo, and
marketing. Besides they do not have geographical reach and
necessary infrastructure to tap business on continues basis, and
thus relay on brokers.
2.8 Railway transport sub segment
India has the second largest railway network in the world. The
Indian Railway have grown into a vast network of over 7500
railway station. Railways serve as a major mode of transportation
for freight and passengers and provide low cost effective option
for long distance transportation. Indian railway record 70% of
its revenue and most of its profit from freight sector. Railway
freight loading has increased at a CAGR of 8.3%. About 90% of
rail freight traffic is contributed by eight major commodities
coal, fertilizer, cement, petroleum products, food grains, iron
ore and raw material to steel plants.
2.9Air Transportation
43
The air freight segment presently accounts for a small pie of
India’s freight market but it is growing at a fast pace.
Liberalization and globalization has given a fillip to the growth
of this segment. For example 740 tons of cargo was handled at
airport. Sophisticated machinery component, pharmaceutical dyes,
fruits, vegetable, fish, meat foam a part of air cargo. An
investment of about 400 billion is projected for the development
of airports during 11th five year plan.
2.10Sea port
Approximately 95% of India’s International trade by volume and
70% by value are sea borne. India has 12 major ports and I
corporate port and 187 minor ports along 7517km long Indian
coastline. The strongest growth was witnessed during the 1960-80
period when factor such as expanding foreign trade, availability
of finance on easy terms and major support by the government
encouraged the expansion of Indian shipping Industry.
2.11Performance of tube products
The engineering segment of the company consists of cold rolled
steel strips and precision steel tubes, cold drawn welded tubes,
electric resistance welded tubes and stainless steel tubes. These
products primarily cater to the requirements of the automotive,
boiler, bicycle, general engineering, and process industry such
as pharmaceuticals and food processing.
44
The automotive industry in India witnessed a year of slow
decline, with the last quarter of financial year, traditionally
the strongest, declining the most. High interest rate as a
consequence of high inflation, ever increasing fuel price and
higher product price impacted demand across all segment of
industry. The lack of adequate financing, a key driver of this
industry, due to high interest rates and delinquencies in the
portfolio, saw volume dropping despite manufactures stepping in
with offers. Depressed global also meant lower export,
accentuating the problem.
The cold roll steel strips segment is dominated by integrated
steel manufactures. In this business the company continues to be
a niche player focusing on the special grades catering to diverse
application in various sizes and grades.
Sale of steel tubes in domestic market declined by 2% over the
previous year and cold rolled steel strips declined by 3% by
previous year. This performance is to be viewed against the
background of auto Industry performance. In the value added tube
segment, the market share in key products improved during the
year. Tubular components continued to enjoy good patronage from
its customers and grew by 6%. The segment focused on improving
its efficiency in difficult market and reduced the resources used
in the business. The newly commissioned stainless steel tubes
business contributed 7 Cr to the top line; this is expected to
improve in current financial year. Despite the slowdown in the
45
American and European market, exports of tube remain in the same
level as in the previous year. The profitability of this segment
is impacted by increase in power, fuel and freight costs, which
could not be passed on to customer’s entirety, given the market
situation. The operating profit before interest and tax stood at
110 Cr a decline of 16% over the last year. The business
continued to maintain its focus on the cost management and
modernizing its facility, which helped minimized the impact.
There are currently three established roll-formed car doorframe
manufacturer in India. The domestic passenger car segment
declined by 7% during the year. Export of passenger car too
declined leading to a lower off-take of door frames. The sale of
automotive chains to Original equipment manufacturer was
maintained at the previous years’ level, despite the adverse
market condition. The sale of kits, Comprising of chain and
sprockets, to the replacement market grew by 305 and helped
compensate lower demand from OEMS. The fine blanked components
business grew in volume terms by 33%. The growth came largely
from share gain and extension of the product range. The sale of
industrial chains both in the domestic and international markets
was lower due to fall in demand. The volume of car doorframes
sold was lower by 12% due to the muted growth of the industry and
the presence of many players in the market offering customer a
variety of cars to choose from. High inventory coupled with lower
realization due to capacity underutilization in the railway
business and lower take of doorframes impacted operating profit
46
of the segment. The net operating business before interest and
tax stood at 80 Cr a drop of 29% over previous year.
2.12Enterprise risk analysis and management
Risk management refers to the formal processes whereby risk
associated with the enterprise as a whole is managed. Risk
management encompasses the following sequence:
Identification of risk and risk owners.
Evaluation of risk as to likelihood and consequences
Assessment of operation for mitigating the risks
Prioritizing the risk management efforts
Development of risk management plans
Authorization for the implementation of risk management
plans
Implementation and review of the risk management efforts
Risk management strengthens the robustness of the business.
The company has an established risk assessment and
minimization procedure. There are normal constraints of
time, efficiency and costthe demand of growth of transport
sector in India
2.13Risk and counter measures of various risks in
Industry
Risk Why considered a risk Counter measure
47
Product
risk
Revenues are model
specific
Increase in customer base and model
Indigenization of equipmentModel specific investment tobe made by OEM
Customer
retentio
n risk
Availably of alternative source
Disruption in supplies
Leverage design strengthLeverage proximity to customerBuild technology superiority
Entry of
competit
ion
Low technology barrier
Impact on profit
Leverage position with customer as technology leader
Cost reduction
Concentration in focus market
2.14Growth of various transport system in India
48
ROAD 12%
RAILWAY 3%
DOMESTIC AIR 7%
INTERNATIONAL AIRWAYS 8%
SEA PORT 9%
Figure 2.14
02468101214
INFERENCE:
From the above chart it is clear that road transport is growing at 12%at average annual growth rate.
49
2.15traffic growth in Indian port
Year NO OF VESSELS
1990-2000 200
2000-2010 300
2010-12 500
Figure 2.15
1990-2000 2000-2010 2010-120
100
200
300
400
500
600
INFERENCE:
It is clear that the traffic in ports increased in the year 2012 by 500 mmt.
50
2.16GAP ANALYSIS AUTOMOBILE SECTOR
PERFORMANCE INDICATOR
18
OPTIMIZATION CONCEPT 25
OPTIMIZATION MEASURE 20
IT Deployment 40
Figure2.16
performance indicators
optimzation concept
optimization measures
Itdeployment0
5
10
15
20
25
30
35
40
45
Inference:
51
From the above graph it is evident that in automobile sector there is a considerable gap in IT deployment. Also there is significant gap for optimization concepts and measures which indicate that there is a potential for training and technology transfer.
2.17Cost ratio of logistics item
Figure 2.17
29.4
17
11.9
17.4
11
7.85.5
transportationwarehousingpacakinginventorym anagem entm ovem entordering
Transport system makes goods and products movable and providestimely and regional efficacy to promote value added under the least cost principle . Transportaffects the result of logistics activities and of course itinfluences production and sale. In the logistics systemtransportation cost could be regarded as a restriction of52
objective market. Value of transportation varies with differentindustries. For those products with small volume, low weight andhigh value, transportation cost simply occupies a very small partof sale and is less regarded for those big, heavy and low valuedproducts, transportation occupies big part of sale and affectsprofit more, and therefore it is more regarded.
CHAPTER-III
53
3.1Findings
There is a significant relationship between transport andlogistics
Internal trade is done through road Traffic is one of the biggest problem Lack of development of IT Transportation and warehousing plays important role in
logistics
54
3.2Suggestions:
Inadequate parking facility and lack of available land for expansion
Warehousing need to be improved
55
Vehicle tracking technology and warehousing management system should be introduced.
Multiple check point for trucks sometimes results in delay Hiring of quality professional manpower is challenging
56
3.3Conclusion
This paper covers broadly from logistics activity totransportation system and attempts to determine the role oftransportation in logistics system through extensive review. Themain content of research include the review of logisticsdevelopment, the characters of various transport operations inlogistics activities, the application of logistics in variousfield, city logistics, future direction in logistics developmentand its cooperation with transport system.to sum up logistics andtransportation have some relevance:
1) Logistics system has more and more important position in oursociety activity.
2) Transportation and logistics have interdependent relationshipthat logistics management needs transportation to perform itsactivity and meanwhile, successful logistics system could help toimprove traffic environment and transportation development.
3) Since transportation contributes the highest cost among therelated elements in logistics system, the improvement oftransport efficiency could change the overall performance oflogistics system.
4) Transportation play an important role in logistics system andits activities appear in various sections of logistics processes.
5) Without the linking of transportation, a powerful logisticsstrategy cannot bring its capacity into full play.
The review of logistics system in a broad sense might help tointegrate the advantage from different application cases toovercome their current disadvantages. On the other hand the
57
review of transport system provides a clearer notion on transportapplication in logistics activities. The development of logisticswill be still vigorous in the following decades and the logisticsconcept might be applied in more fields.
BIBLOGRAPHY:
1) Fair ML. and Williams, “EW Transportation and logistics “2) Portal “Inner freight transport and city logistics”3) Tilanus, b “information system in logistics and transportation”4) Ross DF “competing through supply chain management”5) Kothari CR “research methodology”
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