2
Dissertation Report on
Selection of Efficient Logistics or 3PL service
Providers
Under The Guidance Of
Submitted By:-
Ankit Kumar Ray
BBA-LM
R.No. R380212004
SAP ID 500021942
BBA LOGISTICS MANAGEMENT
Collage Mentor
Prof. Loveraj Takru
Professor & HOD
LSCM-COMES
3
DECLARATION
This is hereby to inform you that this report is very original in every sense of
the terms & condition and it carries a sense of responsibility and faith that no
shortcuts is been taken and I remain dedicated towards the accuracy of this
research. I have made in my best effort to keep this work simple and precise.
This is to be stated that during the preparation of this report some help was
taken from a web of professionally interchanged information and knowledge, a
detailed description which is to be mentioned in the reference of this report.
Date:
Signature:
Ankit Kumar Ray
R380212004
BBA- Logistics Management (2012-2015)
University Of Petroleum and Energy Studies
Dehradun, Uttarakhand
4
ACKNOWLEDGEMENT
I will truly express my deep gratitude, from the bottom of my heart to my
parents for always believing in me at each point of my life and helped me a lot
to be positive, motivated and determined throughout my project.
I am really thankful to my mentor Prof. Loveraj Takru who despite being busy
in his own assignments, guided me through my project provided valuable
suggestions and his experiences has helped me a lot in analysing different
aspects of my project.
Last but not the least I would like to thank my colleagues who supported me in
this project.
Ankit Kumar Ray
R380212004
BBA- Logistics Management (2012-2015)
University of Petroleum & Energy Studies
Dehradun, Uttarakhand
5
PREFACE
Bachelor of Business Administration (BBA) is a professional course which
brings the theoretical and practical aspcts of various contents in the field of
management together. As a mandatory feature of this course, every BBA
student has to prepare a final dissertation by himself which is to be submitted
for the completion of the degree. The ultimate idea of this project in to bring out
the appropriate model for the efficient selection of 3pl or logistics service
providers. It is very much important in improving the competitiveness of the
company and has a positive effect on expanding the life timre of the company.
Nowadays India is rising as a manufacturing base and many national and
international brands are focusing on to reach more and more customers and they
can only achieve this by having an efficient flow of goods and for that they need
to have a team of professionals who can effectively manage their flow of goods.
Professionals will also be helping them to make their products available at right
time, on right place and also at right cost and the manufacturers can simply have
them by outsourcing their logistics operation to some other firm to gain the
logistics expertise to make their products available whenever the demand arises.
Ankit Kumar Ray
R380212004
BBA- Logistics Management (2012-2015)
University of Petroleum & Energy studies
Dehradun, Uttarakhand
6
INDEX
1. Abstract…………………………………………………….7
2. Chapter1- Introduction……...…………………………….9-14
1.1 Logistics ……………………………………………9-10
1.2 Logistics Service Providers…………………………11
1.3 Logistics Environment in India……………………..12
1.4 Problem……………………………………………...13
1.5 Context…………………………………………........14
3. Chapter 2- Literature Review…………….………………..15-18
4. Chapter 3- Research Methodology………………………...19-20
3.1 Objective.………………………………………………20
3.2 Research Design………………………………………..20
3.3 Data Analysis or Collection……..……………………...20
5. Chapter 4- Selection and Evaluation Techniques………….21-29
6. Chapter 5- Selection of Lsp’s in India……………………..30-35
7. Chapter 6- Analysis…………...…………………...……36-40
8. References………………………………………………….41
7
ABSTRACT
Nowadays, more and more companies are outsourcing their logistics and supply
chain operation so that they can concentrate on the core qualities to increase
their market share and gain more profit. But the major problem which they are
facing while outsourcing their logistics operations is “How to select the
Efficient Logistics or 3PL service providers” who can give a promising flow of
their products and also on which they can rely for their logistics and supply
chain operation. The experts also agrees that there is no best way exists to
evaluate or select logistics service providers, and thus organizations use a
variety of approaches. The major motive of the lsp evaluation process is to
reduce the risk and maximizes overall value to the purchaser. As the logistics
sector is booming in India and various organisations are emerging in this
logistics business. The selection of efficient logistics service providers
nowadays has become very difficult for the manufacturers as most of the
companies are outsourcing their logistics operations to the service provider’s to
concentrate on their major functions. As the major junk of money from the
profit of manufacturers is going towards the logistics service providers. So the
outsourcing companies are focusing in the reduction in the cost to gaining the
advantage of the lower cost in the competitive business. So most of the 3PL
service provider of India gives importance to Reduced Cost as the most
important success factor.
9
1.1 LOGISTICS – The word Logistics is derived from a Greek word
Logisticus which meant “ratio, word, calculation, reason
speech and oration”. It is also known as a branch of
science which deals with procurement, maintenance and
transportation of material, personnel and facilities. In the
era of development logistics was basically been used by
the military to move the machineries, arm and personal to
the places they are required. It has now become a very
crucial factor for every sector and industry around the
globe to survive and grow in this competitive world. It
has become an important part that plans implements, and
controls the efficient, cost-effective forward and reverse
fl0w and storage of goods, services, and related
information between the point of origin and the point of
consumption in order to meet customers’ requirements.
This definition directly refers to the importance of
economic considerations (efficiency, effectiveness) and
at the same time underscores the functional character of
logistics. Most of the concepts indicate that the
development of logistics follows three or four distinct
phases (Weber 2002; Bowersox & Daugherty 1987),
where sometimes the most advanced two phases are
viewed as a single phase only. These phases, as indicated
in the figure below are determined by the level of
logistics present in a firm and required a path dependent
on development from the lowest to the highest level of
logistics knowledge.
10
Fig 1. Showing the different phases of Logistics
During the early phases, efficiency gains of the logistical process is
emphasized, both through specialization and the cross-functional
coordination of material flows. At the start of the third and fourth
phases the scope of logistics changes distinctly. It becomes a
management function, whose objective is t0 implement a flow and
process throughout the firm, which encourages logistical thinking and
acting beyond the logistics department. Weber (2002) pointed out that
even when a firm has reached those higher phases of logistical
development, it is important that the functions typically for the lower
phases should not neglected. The different phases of logistical
development reflects a shift of importance. Logistical activities such
as transportation, cargo handling and warehousing, the flow of
information in logistics processes is of increasing concern. While in
the early years of logistical development the physical capabilities of a
logistics system determined its potential, this has changed until today,
where the capabilities of the complementary processes of information
exchange are of at least equal importance.
11
1.2 Logistics Service Providers –
The Logistics Service Provider (LSP) is referred to an outside company or a
person who is employed by a firm to perform some or all of its logistics
activities. Logistics Service Providers varies in terms of its service being
offered. The services offered by the logistics service provider are according to
the needs of the respective customers. Hence, they have been divided according
to the service they offer to their customers. They range from a narrow
spectrum, mainly consisting of warehousing and transportation services, for
customers of the starting phases to integrated the service portfolios including a
multitude of different services for the advanced phases. Altogether, five kinds
of LSPs can be distinguished: carriers, freight forwarders, courier and express
parcel/postal providers (CEP), third party / contract LSPs (3PLs) and fourth
party LSP (4PLs). Carriers owns the logistics assets and concentrate mainly on
supplying transportation services. They are mostly concentrated to either road,
sea, air or rail transportation and only in very less cases offer combinations of
these services. They receive orders either from the customer or through a
freight forwarder.
12
1.3 Logistics Environment In India
The Indian Logistics industry spends 14 percent of its GDP on logistics. The
Indian logistics environment comprises road transport companies, railways, air
freight companies, inter-modal transport providers, ports and shipping
companies, as well as 3PL companies. Their performance totally depends on the
state of infrastructure – roads, railways, ports and airports.
Road & Trucks: India has a widespread road network of total to 2.7 million
kilometres of road length (1996-97), third largest road network in the world.
According to estimation of the Planning Commission, the road carried just 11%
of goods and 28% of passengers during 1950-51. The proportions stood at 60%
for goods and 80 per cent for passengers during 1995. Express and National
highways constitute only 1.4 per cent of the total road length but carry nearly
40% of all cargo moved through the road sector. Reach in the interiors of the
mainland is limited with only 48% of the 0.55 million villages which are being
connected with roads. This shows a serious limitation of access and connectivity
to rural areas.
Rail Transport: The Indian Railway network is a government monopoly in India
and has a lot of growth options. It is the second largest railroad systems in the
world over a route length of 62,809 kilometres (1998-99). This facilitates and
450 million tonnes of freight and 4630.05 millions of passengers movement
every year.
Airports & Air Cargo: In India there are now 6 international and 87 domestic
airports which handles more than 0.22 million metric tonnes of domestic cargo
and 0.468 million metric tonnes of international cargo, which is very poor in
terms of world standards. This is mainly because the air cargo is used only
when sea trade can not be used either due to lack time or space. This shows a
serious limitation in procuring, especially when companies are looking at
adopting international sourcing standards to reduce costs and enhance product
quality with quality service.
13
1.4 PROBLEM
Nowadays, more and more companies are outsourcing their logistics and
supply chain operation so that they can concentrates on the core
competencies to increase their market share and gain more profit. But the
major problem which they are facing while outsourcing their logistics
operations is “How to select the Logistics or 3PL service providers” who
can give a promising flow of their products and also on which they can
rely for their logistics and supply chain operation. Experts agrees that
there is no best way exists to select or evaluate providers, and thus the
organizations is using a variety of methods. The overall objective of the
provider evaluation process is to reduce risk and maximising tthe overall
value to the customer.
The logistics sector in India is developing and various organisations are
attracted towards this business. The selection of efficient logistics service
providers has become very difficult nowadays for the manufacturers as
well as for the customers because most of the organisations are
outsourcing their logistics operations to the service provider’s to
concentrate on their major functions. As the major junk of money from
the profit of manufacturers is going towards the logistics service
providers. The outsourcing companies only cares about the reduction of
cost to attain the advantage of the lowest cost in the competition. So most
of the Indian logistics service providers concentrates on Reduced of Cost
as most important success factor. There are several supplier selection
applications available in the literature. In 1998 Verma and Pulman
differentiated between manager’s rating of the perceived importance of
different supplier attributes and their actual choice of suppliers in an
experiment setting. They used two methods: a Likert scale method which
contains set of questions and a Discrete Choice Analysis (DCA)
experiment. In 1998 Ghodsypou proposed the integration of an analytical
hierarchy process with linear programming to includde both tangible and
intangible factors in choosing the best logistics service providers.
14
1.5 CONTEXT
The Evaluation and Selection of LSPs has now become a very crucial factor in
every organisation. As organisations are emphasizing more and more the
selection and scoring techniques by which they will be able to ensure the
quality, cost, and reliability and flexibility parameters. Till now there is no best
way to select & evaluate a logistics service providers, but the main point is that
the evaluation and selection process should be helpful to reduce purchase risk
and maximize value for the purchasing firm. Every industry aims to select
logistics service providers with whom business can be done over a extended
period. This reduces ability to switch logistics service providers, which
reinforces on selecting the right lsp which is a critical decision. This industry
deals with problems like Higher Inventory, longer lead time, Bull-whip effect
etc. To overcome this problems high degree of contribution between
outsourcing firm and logistics service provider is very much required. Vendor
Managed Inventory, Just In Time are the collaborative practices enabled by the
help of IT and infrastructure. For these practices to be effective, selection of
right type of logistics service provider is very much necessary.
The context of this study will be based on the descriptive research which will be
the mixture of primary and secondary sources of data collected from the
individuals, internet, journals and books which can limit the research to a
certain extent. Comparatively the less experience of the researcher will also be
one of the factor.
16
The literature on performance measurement of logistics service providers
has evolved ever since its starting in the 1980s. Historically, when
organizations were small and operations were simple, the primary
evaluation are based of the cash flow of the firms. From the late 19th
century until the 1930s, theoretical and practical methods of management
accounting were established, and standards were widely applied by
Maskell, in 1991. Traditional management accounting techniques became
the method of evaluation for manufacturing firms and their distribution
operations. As the performance measurement technique developed,
Pursell focused on the performance evaluation of the entire business unit
and examine performance criteria, standards, and measures.
Sink in 1991, Performance evaluation was a popular topic which was
widely discussed but rarely expressed. It becomes necessary to introduce
certain relevant definitions of performance evaluation. Performance
means the nature & quality of an activities that an organization perform to
accomplish its principal missions and functions for the generation of
profit. Performance evaluation is a scale that can be used to measure
performance. It is a tool in the performance evaluation process that
records measures, displays results, and determines subsequent actions
(Rose, 1995). Generally, performance evaluation is categorised in
financial or non-financial and tangible or intangible. Financial
performance measures tend to focus on the impact in financial symbols of
production activities, such as logistics activities, whereas non-financial
performance measures tend to focus directly on actual production
activities, such as investment turnover, defect ratio, and lead time.
17
Heywood V stated that Supply Chain Management (SCM) emerged as a
strategy to attain competitive advantage, integrating customers into a
seamless process incorporating with the physical flow of goods from raw
materials to manufactures and distributes the corresponding information
flows in the management structures which totally controls the supply
chain. A buyer-supplier interface is a technique used for early supplier
involvement, where knowledge and technology of logistics service
providers are integrated in the supply chain.
Rodegher suggested that a supply chain management problem is how to
increase supply chain performance. He stated that a firm can develop a
supply chain into a competitive & cost effective strategic system that
maximizes value of the product. Today the forces that motivate logistics
service providers evaluation & development are ‘high global
competition’, ‘High cost of energy’, ‘Increasing supply chain risk’,
‘volatile market demand for value, productivity and quality’ and
‘Increasing pressure to reduce total cost’. If companies uses the Scorecard
system to evaluate their performance and able to identify the gaps, they
can attain smooth flow and zero defect. Logistics service providers
evaluation and process can help the organizations to develop a sound
flow of goods whenever required.
The market is so competitive nowadays that without the support of good
logistics service providers, it is very difficult to achieve a high quality
production with low cost. Right lsp selection helps in improving
company’s competitiveness, reduction of acquisition costs, and reduce the
problems related to material quality and delivery times.
18
Third Party Logistics (3PL) Service Providers
Execution is an ingrained topic in administration ideal models. It
incorporates vital and operations administration, and is of enthusiasm to
both scholarly researchers and honing chiefs. Execution is characterized
as the assessment of constituents utilizing proficiency, adequacy, or
social referent criteria to quantify how well an association meets the
yearning levels of constituents (Thompson, 1967; Friedlander and Pickle,
1968).
A few perceptions can be produced using the writing on production
network execution estimation. A lot of consideration has truly been set on
individual measures, instead of on frameworks of estimation (Beamon,
1999), and a hefty portion of the current studies are prescriptive in nature
and underscore the traits that great measurements and estimation
frameworks ought to have (Bourne et al., 2000).Keebler et al. (1999)
showed that generally couple of firms measure the execution of the
logistics inventory network, particularly logistics outsourcing. This is on
the grounds that the frameworks viewpoint is sometimes embraced and
almost no exact examination exists on production network execution
estimation from a more extensive framework point of view, for example,
authoritative execution estimation. Business execution estimation has
dependably been an administrative need, drawing in expanding hobbies
of both among academicians and directors. Directors industriously
measure business execution and appeal execution related data. Execution
estimation is indispensable to the effective execution of administrative
obligations. It helps in the transference of the complex reality of
execution into an arrangement of transmittable images that can be
duplicated under comparable circumstances (Lebas, 1995).The
Organizational hypothesis refers to connection – structure – yield
relationship as the major corporate capacity that makes hierarchical
progress. It uncovers both reasonable and exact relationship between 3PL
administration suppliers, production network accomplices, and 3PL
authoritative execution estimation and investigates the connections
between the determinants of the logistics outsourcing administration
nature of inventory network accomplices (suppliers or clients) and the
recognizable proof as far as hierarchical structure of the between firm
relationship between 3PL pr0viders and clients.
20
3.1 Objectives :
1. Process and Technique used to explore the Logistics service provider
selection and evaluation
2. Tools used to compare the lsp selection and evaluation.
3. To compare the lsp techniques currently used for the selection and
evaluation
3.2 Research Design
This research is descriptive as it examines the existing methods and
ways of selecting the service providers. Existing literatures, journals
and findings from the individuals are collected from the internet and
the logistics service providing firms has been used as a source of
information
3.3 Data Collection
3.3.1 Primary Sources: Individuals from the firm specially from
Sales and Booking department.
3.3.2 Secondary Sources: Internet, Journals, White Papers published
22
By going through the review of the literature, I came across the various method
and techniques which is currently used for the selection of lsp’s which has been
developed over a period of time. On the 3 general criterias which are time, cost
and risk are emphasized by nearly all researchers as the most important criteria
for selecting an agent. Typically, these criterias are developed on the basis of
which the attributes of logistic services are evaluated. Jharkaria and Sankar
(2007) also provided a structure for the selection of logistic alternative which
include some of the strategy such as long-term and risk management. Other than
strategic aspects, there work also includes such operational activities as
operational performance and financial performance.
Methods being used for the lsp selection are as follows:
1. The Weighted Point Method
2. Categorical Mathod (Timmerman, 1986)
3. Cost Ratio Method
4. Total Cost of Ownership Approach (Thompson, 1990)
4.1 Weighted Point Method : This method involves factors taken by the
customer in considerations for the selection
and evaluation. Then the weight given by the
customers are multiplied by the performance
score which was assigned. Finally, these
products are summed to determine a final
rating for each logistics service providers.
In most of the outsourcing situation, all measurement attributes are
weighted for importance. This system was designed to utilize quantity
measurements. The main advantages of this method includes the ability
for any firm to include numerous evaluation factors and give them
23
weights according to the need of the organization. This method tends to
minimize the qualitative factors in the evaluation. The main drawback of
this method is to minimize the qualitative evaluation criteria which do
not get considered effectively while selecting the lsp’s.
4.2 Categorical Method: This method t0tally depends on the ability
and experience of the customer by the
performance of the lsp’s in the criteria which
are crucial or very important to them. These
function which are selected defines whether
the lsp’s performance in neutral, satisfactory or
unsatisfactory which further turns the result of
either selection or non-selection of the lsp’s.
The advantage of using this method is that it helps to structure the evaluation
process in a smoothly & systematically. The major drawback of this technique
is that the identified factors are weighted equally and the decisions making
using this system are likely to be more subjective.
4.3 Cost Ratio Approach: This method focuses on the main identifiable
cost to the value of products. As the
value of the products goes higher, the lsp rating
decreases. . The costs to be included in
the selection procedure totally depends on the
products involved. Manufacturing department,
with the help of other departments like sales and
marketing set the quality & costs and then it is
documented by same department. This process
is so flexible that any firm in any sector can
adopt it. The major disadvantage of this method
is that it is complex and the
company implementing it must have a well
developed cost accounting systems.
24
4.4 Total Cost of Ownership Method: This approach mainly measure all
costs associated with the value of
given quantity of products or
services. In addition to the cost
component, many factors play an
important role like lsp’s unreliable
delivery service, transhipment
shortcomings, warehousing costs,
transport costs. These factors will
from company to company and
activity analysis should be used to
express these activities. Then it is
followed by cost assignment to
different activities. Then the cost
drivers which increases the cost of
a given activity are defined.
The main drawback or lacking point about these approaches or methods were
the integration of quantitative and qualitative data. But the following
approaches integrates both qualitative and quantitative data which helps in
covering most of the aspects and decreasing the errors in selection and
evaluation of the logistics service provider’s.
4.4 Analytical Hierarchy Process: Analytical Hierarchy Process provides a
collective solution. As it consists of a questionnaire for comparison of each
element and mean to arrive at a final solution. Ghodspour and O’Brien had
mixed up the AHP and Linear Programming to consider both tangible and
intangible factors in choosing the efficient logistics service providers and
placing the optimum order quantity among them thus, by using integrated
AHP and Linear Programming the total value of purchasing (TVP)
becomes maximum. This model can be applied to supplier selection with
or without capacity constraints.
25
It consists of five major steps which are as follows:
Step 1- Construction: It aims to structure the complex problem into
‘humanly-manageable’ sub-problems. It is started by
iterating from top (the more general) to bottom (the
more specific). The unstructured problem at this step
is split into sub-modules which eventually become
sub-hierarchies. In the hierarchy from top to bottom,
the structure comprises goals (systematic branches
and nodes), criteria (evaluation parameters) and
alternative ratings (measuring the adequacy of the
solution for the criterion). Every branch is further
divided into an appropriate level of detail. The result
of iteration process is that it transforms the
unstructured problem into a manageable problem
which is arranged both horizontally and vertically
into hierarchy of weighted criteria. By raising the
number of criteria, the importance of each individual
criterion is diluted, which is compensated by
assigning a weight to each criterion.
Step 2- Selection of Attributes: Selection of each criteria is based on the
importance on its importance within the
node to which it belongs is assigned
relative weights. All the criteria which
belong to a common direct parent criterion
in the same hierarchy should sum up to
give result equal to 100% or 1. A global
priority is computed that quantifies the
relative importance of a criterion within the
overall decision model.
26
Step 3 Evaluation: In this step alternatives are scored and each alternatives
are compared with others. If we consider the whole
structure of the problem as a tree then using AHP, a
relative score for each alternative is assigned to each leaf
within the hierarchy, then to the branch the leaf belongs
to, and so on, up to the top of the hierarchy, where an
overall score is calculated.
Step 4 Selection: The alternatives are then compared with each other and the
one which fits for the requirements in best to select for
efficient flow.
Fig 2. Showing the Selection & Evaluation of lsp By AHP Approach
27
4.5 Analytical Network Process: Analytic Network Process (ANP)is
developed by Thomas L. Saaty(1996).It is a
technique which is basically used for making
decision of multiple criteria. It is also
considered as generalized Analytic Hierarchy
Process (AHP), but ANP uses a grid instead
of hierarchy without the necessity to specify
levels. It allows relations of dependence
between its clusters and elements.
It basically consists of three steps which are as follows:
1. Formulation
2. Decision Making
3. Algebric Development
Fig.3 AHP Selection Process
28
Step 1: Formulation of Problem
First of all, problem is structured to define the objectives of the decision
processes, the clusters, elements or nodes and the alternatives to solve
the problem.
Step 2: Decision Making
Then the matrices are constructed to see whether any relation exists
between the distinct clusters or nodes and when the matrices shows the
existence of any relations of every cluster of the grid. In both matrices, it
shall be given the value 1 if there is relation/dependence otherwise, zero
value will be assigned.
Step 3: Algebric Development
30
5.1 Overview of Logistics in India:
The annual logistics cost in India is valued at Rs 6,750 billion (US$ 135 billion)
and it is growing at 8-10% annually. Logistics cost by value accounts for around
13% of the GDP of India – this is much higher than that in the US (9%), Europe
(10%) and Japan (11%) but lower than that in countries such as China (18%)
and Thailand (16%). In particular, the percentage-wise share of transport cost
(an important constituent of total logistic cost incurred by a nation) by value of
GDP has been steadily increasing.
Traditionally Indian logistic industry is made of core service providers and
contracts are issued for trucking, shipping, Inland Container Depot (ICD),
Container Freight Station (CFS) etc. There is a gradual shift towards 3PL
(providers who bundle services such as transport, warehousing, freight
forwarding etc.) and 4PL (who work as business process providers; manage co-
ordination with various 3PL). This shift is driven by global customers’ demand
for more control, higher technology and one-stop solutions for all logistics
needs. Global logistics management is new generation futuristic concept where
a single supplier will be able to meet customers’ logistic needs across
geographies.
The high cost of logistics in India when compared to developed nations may be
attributed to poor quality of infrastructure and inadequate service quality vis-a-
versa counterparts such as US and Europe.
Warehousing refers to the storage of product and goods to be transported,
whether inbound or outbound. A warehouse is often used as a stock piling
location to manage demand-supply gaps over a longer term. Various material
handling equipment or systems are used in warehouses for loading and
unloading operations and movement of goods over short distances.
The Transportation, Logistics, Warehousing and Packaging Sector in India is
dominated by the unorganised segment (small truck owning companies linked
to intermediate brokers or transport companies, small warehouse operators,
custom brokers, freight forwarders, etc.); the organised segment accounts for
less than 10% of the total logistics market in India.
31
5.2 Major Logistics Players in India:
1. Safexpress
2. V-Xpress
SAFEXPRESS
Safexpress has firmly entrenched itself as the ‘Knowledge Leader’ and ‘Market
Leader’ of the Supply Chain & Logistics Industry. Safexpress offers a complete
spectrum of Supply Chain & Logistics services including Express Distribution,
3PL and Consulting to Enterprise Customers. Safexpress provides services to a
vast wide range of business verticals ranging from Apparel & Lifestyle,
Healthcare, Hi-Tech, Publishing, Automotive, Engineering & Electrical
Hardware, FMCG & Consumer Electronics, and Institutional. Safexpress has
been significantly involved in the Indian economic growth for the whole of last
decade. With an intention of contributing in country’s economic growth,
Safexpress kept its operations India-centric.
Safexpress provides Supply Chain & Logistics services to over 6000 corporate
clients across 8 business verticals. With its largest fleet of over 4000 GPS
enabled vehicles and largest network of over 588 destinations, 54 Logistics
Hubs including 17 Logistics parks in India. Safexpress has the capability to
deliver to every square inch of India. Since inception, learning has always been
a core focus at Safexpress.
32
Valued Services Being offered
1. Express Distribution This service of Safexpress assures time-
definite delivery services using a
combination of Air, Surface and multi-
modal transport. These services enables the
customers to plan their transit inventory.
2. Third Party Logistics
Warehousing has become a key
differentiator in an organisation market
strategy. The choice of warehousing
location, SKU mix, the level of
automation & distance from customers.
3. Consulting
Safexpress offers various value added services beyond physical
operations, in the form of supply chain & logistics consulting. Their
expert team of consultants are highly
experienced, brings global information, best
practices and cutting edge technology
solutions to the table, to make the supply chain model of the organisation
more dynamic.
4. Safe Air
Air Cargo management requires a special
expertise in handling and document management.
5. Stock2Shelf
It provides comprehensive mall supply chain
services like inspection and estimation, professional packaging, security
clearance, storage, unpacking and finally reverse logistics.
33
6. Campus to Home
It is the service only been provided by the
Safexpress in India to facilitate the
transition of smooth flow of student baggage from collage life to
professional life.
7. Easy2Move
Easy2Move provides a smooth flow
consignments by standardising Movement. Packing, Pricing, Options,
Risk Cover, Information and easy options for payment.
34
V-Xpress
Group V is one of the pioneers in transportation and logistics
organisations in India having a track record of over 50 years. As a group
it offers a complete range of supply chain solutions that harnesses the use
of technology and decision support tools. It is committed to offer
effective, industry focused and customer centric solutions that integrates
the various processes of its client to organise cost effective, reliable and
timely products and information flow.
It provides services on the following
1. Freight Management
2. Transportation
3. Cargo Express Movement
4. Warehousing
It has 400 branches spread across India which helps in providing both
National and local distribution.
36
Comparison on the basis of the selection models:
Method Parameters Advantages Disadvantages
Weighted-
Point Method
Quality
Delivery
Service
Price
Attributes are
weighted by
importance
Subjective
Qualitative
criteria not
considered
Categorical
Method Quality
Delivery
Service
Price
Clear and
systematic
process of
evaluation
Inexpensive
Requires
minimum
performance
data
Imprecise
Subjective
Cost Ratio
Method
Quality
Delivey
Service
Price
Reduced
Subjectivity
Flexibility
Cost
Accounting
system is
required
Cost Ratios
are
expressed
in same
units
Total cost of
Ownership
Method
Ordering Cost
Transportation
Cost
Inspection
Cost
Unreliable
Delivery Cost
Cost
Savings is
low
Allows
various
purchasing
policies to
be
compared
with one
and other
Very
Complex
Analytical
Hierarchy
Process
Quality
Price
Delivery
Very
Simple
Not easily
applicable
37
Service Includes
both
Quantitative
and
Qualitative
data
Analytical
Network
Process
Quality
Price
Service
Delivery
Helps in
reducing the
number of
results
Makes the
supplier
selection
more
realistic.
Very
Complex
38
Comparison of Logistics Service Providers:
Factors Safexpress V-Xpress
Cost Fixed Varies(according to the
no. of consignment
booked)
Timely Delivery 96hrs(By Surface) 108hrs(By Surface)
Credit Options Available Rarely Available
To- Pay Options To-Pay, DOD, DACC TO-Pay, DOD
Flexibility Very Flexible Less Flexible
Customer Satisfaction High Low
Connectivity Throughout India Less Reachable (Not in
the North-Eastern part)
39
Factors that plays the major role in the lsp selection in India:
1. Cost- Cost plays a very vital factor as the major customer of the lsp are the production and manufacturing firms which aims at keeping the
value of the goods as low as possible as it is top priority of the
logistics service provider across the globe.
2. Timely Delivery- It is also the one of the main factor of selection most of the most of the times customer has made a
commitment and need a timely delivery and for that
they need a reliable lsp which can fulfil their
commitment.
3. Payment Options- It has now become an important factor as many
consignee and consignor do not trust each other for
that they acquire the payment options like DACC(
Delivery against consignor copy) or DOD(Draft
against Delivery) which helps in the flow of
consignment.
4. Connectivity- It has always been a vital factor for the selection and evaluation of the logistics service providers as if the
destination at which the consignor needs to book the
consignment but its not in the reach of the considered lsp
then the consignor have to acquire some other
alternative.
40
References
1. International & Supply Chain Congress, Nov 8-9, 2007
https://hal.archives-
ouvertes.fr/file/index/docid/366527/filename/Logistics_SCM_2007.P
DF
2. Viara Popova, Martijn Schut, Performance Measure & Controlling in
Logistics Service Providing, 2005
http://www.cs.vu.nl/~schut/pubs/Krauth/2005c.pdf
3. Smriti Asthana, Performance Measurement Variables in Third Party
Logistics, March 2013,
http://www.euroasiapub.org/IJRIM/mar2013/2.pdf
4. JaeJon Kim, KiJu Cheong, Geon Cho, 2006
http://www.scielo.br/pdf/jistm/v3n3/01.pdf
5. Erdal ÇAKIR, Hakan TOZAN, Ozalp VAYVAY, 2009
http://www.dho.edu.tr/sayfalar/02_Akademik/Egitim_Programlari/De
niz_Bilimleri_Enstitusu/Dergi/04_hakantozan.pdf
6. Huimin Zhang, Guofeng Zhang and Bin Zhou,
http://dl.ifip.org/db/conf/i3e/i3e2007-1/ZhangZZ07.pdf
7. GülGen Akman and KasJmBaynal, 16 June 2014
http://downloads.hindawi.com/journals/jie/2014/794918.pdf
Books
1. Folinas and Dimitris, Outsourcing Management for Supply Chain
Operation and logistics Service, Pages 856-992
2. Steven W. Simonson, Bruce W. Tompkins, Brain E. Upchurch
Logistics and Manufacturing Outsourcing: Harness Your Core
Competencies, Pages 18-25, 83-95