A Project Report on Logistics Management in Vrl Logistics Ltd Varur

“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

EXECUTIVE SUMMARY In the field of management practical work plays a vital role, it is this practical knowledge which drives one to his or her ultimate desire. In the similar way company can achieve its ultimate goal only if it has sufficient service which contents prospective workers.  Title of the project: “Logistics Management in VRL Logistics Limited at Varur”. This fruitful venture was accomplished by undertaking the study at VRL Logistics Limited, which is well known for its quality and in time service. The pioneer provides service in goods transportation, passenger transportation and courier service. The Logistics chain starts from suppliers or consigner, the strength of the chain would emerge from the relationship that are nurtured between the consignee (person to whom the goods are delivered) and transporter of each line and the flexibility would be a result of the transparency of communication, speed of reaction and the focus on core competence.  Need for the study:

To study the various aspects involved in the Logistics management.  Objectives of the study: i.

To study the various costs involved in the Logistics management.

ii.

To the importance of warehousing in Logistics management.

iii.

To know overview of freight movement.

 Limitations of the study:

The necessary information about the project was given by the company. Some of the study was depended on observation.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

 Findings:

i.

The effective pricing strategy of VRL Logistics Limited.

ii.

The various kinds of services offered by them.

iii.

The material handling in the Varur TPT.

iv.

The capacity of the warehouse.

v.

The strategies of the VRL logistics Limited.

vi.

Factors affecting road transportation.

 Suggestions: i.

It should emphasize on warehousing facilities provided.

ii.

Transhipment labours should be given sufficient training to handle the goods.

iii.

The company should build relationship with industries for more contracts.

iv.

TPT labours may be divided into three shifts for the efficiency. At present they are working in two shifts of 12 hours each.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

INTRODUCTION TO LOGISTICS Logistics is a broad, far-reaching function which has a major impact on a society’s standard of living. In a modern society, we have come to expect excellent logistics services, and tend to notice logistics only when there is a problem.  The difficulty in shopping for food, clothing, and other items if logistics systems

do not conveniently bring all of those goods or items together in one place, such as a single store or a mall.  The challenge in locating the proper size or style of an item if logistical systems do not provide for a wide mix of products, colours, sizes, and styles through the assortment process.  The frustration of going to store to purchase an advertised item, only to find out the store’s shipment is late arriving. There are only few of the issues for granted which illustrate how logistics touches many facets of daily lives. Because of the magnitude of the impact of logistics on society and individuals, a macro approach is taken to understand the logistics management. Logistics is called by the many names, including the following: 

Business logistics



Distribution



Logistical management



Supply chain management



Supply management

What these terms have in common is that they deal with the management of the flow of goods or materials from one point of origin to point of consumption, and in some cases even to the point of disposal.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

The Council of Logistics Management (CLM) describes logistics management as “The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to the point of consumption for the purpose of conforming to customer requirements.” KEY LOGISTICS ACTIVITIES Outlined below are the key activities required to facilitate the flow of a product from point of origin to point of consumption. All of these activities, listed below, may be considered part of the overall logistics process.  Customer service  Demand forecasting/planning  Inventory management  Logistics communication  Material handling  Order processing  Packaging  Plant and warehouse site selection  Procurement  Return goods handling  Traffic and transportation  Warehousing and storage While all organization may not explicitly consider these activities to be part of logistics activities, each activity affects the logistics process.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

Figure shows how logistics activities drive total logistics costs. Place/customer service levels •

Customer service

•

Parts and service support

Inventory carrying costs •

Inventory management

•

Packaging

Transportation costs •

Traffic and Transportation

Lot quantity costs

Warehousing costs

•

Material handling

•

Warehousing and storage

•

Procurement

•

Plant and warehouse site selection

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

Order processing and Information costs •

Order processing

•

Logistics communication

OBJECTIVES OF THE STUDY

1. To understand the logistics management. 2. To study the role of infrastructure in logistics management. 3. To study various documents maintained while transportation of

goods. 4. To study manpower used and material handling in loading and

unloading of trucks. 5. To study various costs involved in logistics and steps to reduce

those costs. 6. To study the booking and delivery process maintained in

organization. 7. To study the importance of warehousing in logistics. 8. To know the potential for logistics industry in fourth coming years.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR” METHODOLOGY It’s not only the data; it is the way in which we collect the data. So methodology is the sequence in which the data are collected. The tools for collection of data for the present project work are the primary data and secondary data. The information furnished in this report has been collected primary data as well as secondary data. The primary data is collected through the interaction with the managers, supervisors, drivers, and labours of the company. The secondary data has been collected from annual reports and company website.

INDUSTRY PROFILE INDUSTRY OVERVIEW Healthy economic growth, rise in the production of key commodities, infrastructure investments and growth in import-export have led to growth in freight movement in the past 5 years, with roadways dominating freight movement on account of higher flexibility, reach and customer preference. Domestic freight transportation service (DFTS) refers to transportation of goods within India; Here the mode of transportation also mainly refers to roadways and railways, as they carry nearly 90 per cent of the cargo in volume terms. The domestic freight transport services may be characterized as a large growing sector. The size of the DFTS sector in India, comprising mainly transport by roads, railways, coastal shipping and pipelines is estimated at 1,590 billion tonne kilometres (btkm) in volume terms and at Rs. 1,990-2,010 billion in value terms in 2006-07. In volume terms, as per CRISIL Research it is estimated that the sector has grown at 10.5 per cent per annum during 2001-02 to 2006-07, whereas during 2006-07 to 2011-12, it is forecast to grow at 10.1 per cent per annum, and reach a projected size of 2,569 btkm by 2011-12.Going forward, given the buoyancy in the economy and expected completion of infrastructure projects, the overall freight movement is expected to remain strong. As a result, roadways will further gain market share, backed by its inherent advantages of flexibility and due to the growth in demand from redistribution segment.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR” On the other hand, railways’ share will decline on account of capacity constraints, until the dedicated freight corridors are completed. In 2006-07, road transport services comprised nearly 58 per cent of the total freight share, followed by rail transport at around 32 per cent and coastal shipping and pipelines with relatively smaller shares of around 5 percent each. As per CRISIL Research roadways expects to continue to dominate freight movement, with its share expected to grow to a tidy 61 per cent in 2011-12. On the other hand, the share of railways is expected to decline to 29 per cent in 201112, on account of capacity constraints during the same period, while the share of pipelines and coastal movements will remain small. Thus, road transport will remain the growing segment,

owing to its plus points such as greater coverage, higher flexibility and door-to-door delivery. The sector will enjoy the benefits out of its inherent advantages despite higher effective cost. Other factors like lower risk of handling loss, lesser loading and unloading of goods, investments made in the NHDP and relatively higher customer orientation as perceived by users also give road freight transport an edge. INTRODUCTION Transportation is the process of moving goods and passengers from origin to destination in the timely and cost efficient manner possible with the available modes of transportation. MODES OF TRANSPORTATION: In order to transport material from one place to another transporters have to use Rail, Road, Air, Water and Pipe Line as the modes of Transportation. A brier introduction to the various mode of transportation is as follows Rail: Used for delivery of a wide range of goods including coal, iron ore, cement, food grains, fertilizers, steel, petroleum products and other heavy goods. Road: Used by suppliers to deliver goods in a cost effective manner. Many transport companies have expertise for fast delivery, packaging etc. for making scheduled delivery.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR” Air: Used mostly for delivery of high value and low volume goods from distant suppliers, usually not connected by any other mode of Transportation. It is also suitable for emergent item to be imported for some specific requirement. Water: Used by firms for delivery of goods from distant suppliers, mostly conducted in containers of varied size. This mode is ideal for transportation of heavy and bulky goods and suitable for products with long lead times. Pipe Line: Used by oil sector companies for mass movement of Petroleum

products

including gases. Due to quite low operating cost it is one of the preferred modes of transportation.

INDUSTRY CLASSIFICATION

FRAMEWORK FOR FREIGHT DEMAND DETERMINATION

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

DRIVERS THAT INFLUENCE FREIGHT MOVEMENT The overall freight movement in the country depends significantly on the growth in industrial, agricultural production and imports. This is also reflected in the high degree of correlation (>0.99) between GDP (industrial plus agriculture) and imports (called adjusted GDP) versus freight movement during 1971-72 to 2006-07.Besides economic growth, the investments made in infrastructure of transport segments also are an important driver of freight movement in a particular mode of transportation. Even though economic growth is the most significant driver for freight movement in a broad sense, the extent of influence specific demand drivers will have on a particular mode of transport may vary. For instance, freight movement in coastal shipping mainly depends on the extent of import-export in the country, while, rail and road freight movement has been significantly influenced by the hub and spoke model of freight distribution.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

REVIEW OF FREIGHT MOVEMENT During 1991-92 to 2006-07, the total freight movement is estimated to have increased at a CAGR of around 7.2 per cent, to 1,590 btkm in volume terms and at Rs 1,990-2,010 billion in value terms in 2006-07, in line with the CAGR of 5.9 per cent in adjusted GDP during the same period. Further, when the adjusted GDP growth declined from 7.3 per cent in 1996-97 to 2.3 per cent in 1997-98, demand for freight movement also declined from 5.2 per cent to 4.4 per cent. Similarly, over the past years, while adjusted GDP growth increased at a CAGR of 7.3 per cent, freight movement during the same period has increased at a CAGR of about 10.5 per cent.

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR”

DOMESTIC ROAD FREIGHT TRANSPORTATION SERVICE: Overview Going forward, given the buoyancy in the economy and expected completion of infrastructure projects, the overall freight movement is expected to remain strong. As a result, roadways will further gain market share, backed by its inherent advantages of flexibility and due to the growth in demand from redistribution segment. On the other hand, railways’ share will decline on account of capacity constraints, until the dedicated freight corridors are completed. In 2006-07, road transport services comprised nearly 58 per cent of the total freight share, followed by rail transport at around 32 per cent and coastal shipping and pipelines with relatively smaller shares of around 5 percent each. As per CRISIL Research roadways expects

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR” to continue to dominate freight movement, with its share expected to grow to a tidy 61 per cent in 2011-12 (excluding demand from last mile). On the other hand, the share of railways is expected to decline to 29 per cent in 2011-12, on account of capacity constraints during the same period, while the share of pipelines and coastal movements will remain small. Thus, road transport will remain the growing segment, owing to its plus points such as greater coverage, higher flexibility and door-to-door delivery. The sector will enjoy the benefits out of its inherent advantages despite higher effective cost. Other factors like lower risk of handling loss, lesser loading and unloading of goods, investments made in the NHDP and relatively higher customer orientation as perceived by users also give road freight transport an edge.

FREIGHT MOVEMENT: BULK VERSUS NON-BULK Freight movement can be divided into bulk and non-bulk freight. Bulk freight includes commodities like cement, fertilizer, food grains, POL, iron ore etc and non-bulk freight includes general cargo (increasingly containerized). In 2006-07, bulk commodities are estimated to have constituted about 70 per cent of the total freight movement. While 90-95 per cent of the railways’ freight constitutes bulk commodities, roadways’ freight is evenly balanced between bulk and non-bulk commodities, with the non-bulk commodities contributing 45-50 per cent of its total freight movement. Coastal shipping and pipelines largely move bulk commodities. Over the next 5 years, the share of non-bulk freight movement is expected to increase to 40 per cent of the overall freight movement, largely supported by road transport. While 60 per cent of the road freight transport is expected to be constituted by non-bulk commodities, the railways’

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“LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR” freight mix will continue to be dominated by bulk commodities at 90 per cent. (Estimations are on btkm terms.)

ROAD FREIGHT MOVEMENT: HAULAGE-WISE The road transport sector can be broadly divided into two areas, primary transportation that is, long haul (>800 km), medium haul (350-800 km) and short haul (50-350 km)] and secondary transportation (referred to as last mile distribution with