Logistics and Transportation Industry in India

Summer internship report on

“LOGISTICS AND TRANSPORTATION INDUSTRY IN INDIA” With reference to Marketing Management of BLR India Private Ltd.

Submitted to

Rajaram Shinde college of MBA (Affiliated to Mumbai University)

In partial fulfillment of MMS course

Under Guidance of

Prof. Madhavrao Shinde

Prepared by

Mr.Bankim .H. Dhimmar

Signature of student

Signature of Director

Signature of faculty

2007-2008

1

DECLARATION I Mr. Bankim Dhimmar the undersigned is the bonafide student of MMS course of Rajaram Shinde College of MBA. Pedhambe, Chiplun; (Affiliated to Mumbai University). I have completed my summer internship programme at BLR India Private Ltd. From 02/06/2008 to 02/08/2008. I have opted specialization in marketing subject for MMS 2nd year (3rd and 4th semester) This is report is an original work and is the outcome of practical knowledge and experience gained during the course of my SIP

Place: Date:

Mumbai 02/08/2008

Signature of Student

2

FACULTY CERTIFICATE

I Prof. Madhavrao Shinde have gone through and verified the contents of the report submitted by MR. Bankim Dhimmar a bonafide student of MMS course of Rajaram Shinde College of MBA., Pedhambe, Chiplun; (Affiliated to Mumbai University).

On the basis of information and data provided by the student the report is an original work to the best of my knowledge.

Certified this on ______day of ___________Month________ Year

Place:

Signature of faculty

3

Acknowledgement First, I would like to thank the UNIVERSITIY OF MUMBAI for giving me the

opportunity

to

make

the

project

on

subject

“LOGISTICS

AND

TRANSPORTATION INDUSTRY IN INDIA” and explore my knowledge and other who read this project. I would like to thank my college Principal Mr. Uday Kumthekar for giving me permission to go ahead with the project and support for which I’m really thankful to them. I also like to thank all the people at BLR India Private Ltd for their gracious support, without which the project would not have been materialized and completed successfully. Hereby, I want to take the opportunity to thank all sources, people, friends, guides who help me to get the required data. Because of them I’ll able to the knowledge of my curiosity about the subject. And those people who take out time from their busy schedule to entertain me. I would also like to thank Mr. Sanjay Dhanuka of BLR India Private Ltd. who worked as a mentor for this project and helped me a lot. Also thank to Mr. Makarand Kulkarni (Mktg Dept.) whom I interviewed for purpose of project. Because of them I was able to gain the knowledge about my subject. Last but not a list I am highly gratified to my fellow friends & classmates who helped whenever I was need of it. I hope that I shall be able to realize the dream of a worthy progress.

Mr. Bannkim .H. Dhimmar

4

Table of content OBJECTIVE OF STUDY........................................................................8 LIMITATION OF THE STUDY.............................................................8 RESEARCH METHODOLOGY............................................................9 INTRODUCTION: ................................................................................10 OVERVIEW...................................................................................................................10 The Logistics & Transportation Industry..............................................................11 INDIA LOGISTICS& TRANSPORTATION INDUSTRY: $125 BILLION GOLDMINE.........................13 INDUSTRY SCENARIO:.....................................................................................................15 CHANGING LOGISTICS LANDSCAPE IN INDIA........................................................................16 THIRD PARTY LOGISTICS................................................................................................17

TRANSPORTATION AND LOGISTICS.............................................19 ASPECTS OF TRANSPORT ................................................................................................19 MODES AND CATEGORIES................................................................................................20

LOGISTICS INFRASTRUCTURE IN INDIA:..................................22 ABOUT BLR...........................................................................................25 HISTORY:.....................................................................................................................25

COMPANY PROFILE: .........................................................................25 ORGANIZATION STRUCTURE ........................................................28 SERVICES OFFERED BY BLR...........................................................30 TRANSPORTATION SOLUTIONS:..........................................................................................30 WAREHOUSING & DISTRIBUTION SOLUTIONS....................................................................31

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INTERNATIONAL FREIGHT MANAGEMENT...........................................................................32

MARKETING MIX OF BLR................................................................33 PRODUCT.....................................................................................................................34 PRICE..........................................................................................................................34 PLACE.........................................................................................................................35 PROMOTION .................................................................................................................35 PEOPLE........................................................................................................................36 PROCESS .....................................................................................................................37

INFRASTRUCTURE OF BLR.............................................................38 BLR OFFICE NETWORK................................................................................................38 CORPORATE OFFICE ......................................................................................................39 BLR FLEET.................................................................................................................40 BONDED WAREHOUSES..................................................................................................40 GENERAL WAREHOUSES.................................................................................................40 BONDED TRUCKING.......................................................................................................41 BLR IT CAPACITY.......................................................................................................41 QUALITY AT BLR.........................................................................................................42

MARKETING DEPARTMENT STRUCTURE..................................43 CLIENTS OF BLR.................................................................................44 AWARDS AND ACHIEVEMENTS:.....................................................47 SWOT ANALYSIS..................................................................................48 SWOT ANALYSIS OF BLR..................................................................48 STRENGTHS..................................................................................................................48 WEAKNESSES...............................................................................................................48

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OPPORTUNITIES.............................................................................................................49 THREATS......................................................................................................................49

PROBLEMS /CHALLENGES OF INDUSTRY;.................................50 CONCLUSIONS AND RECOMMENDATIONS................................53 CONCLUSION................................................................................................................53 RECOMMENDATIONS/SUGGESTIONS...................................................................................55

BIBLIOGRAPHY & WEBILIOGRAPHY .........................................61

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Objective of study  To present an introductory profile of BLR India Private Ltd.  To provide introductory profile of the product, process, and other technical aspects of production  To give overall information about – with reference to global and national environment  To study in depth the marketing management of BLR India Private Ltd.  To draw a conclusion regarding marketing management of BLR India Private Ltd.  To study general management and organization of BLR India Private Ltd.

Limitation of the study  This study is limited to BLR India Private Ltd.  This study is specially related with marketing management in particular  This study is presented on the basis of information and knowledge which could be gained during the course of SIP at BLR India Private Ltd. •

Hypothesis (should be positive e.g. whether xyz has adopted principle of scientific management)

8

Research Methodology To make this project two approaches are used primary and secondary data. Primary Data: This information is collected by interviewing those who are working in for the logistics and transportation industry. Secondary Data: This data is collected from various sources such as internet, different books, newspapers and magazines on logistics and transportation industry.  Sample  Statement and significance (of product and company)

9

Introduction:

Overview The term logistics is often misinterpreted to mean transportation. In fact, the scope of logistics goes well beyond transportation. Logistics forms the system that ensures the delivery of the product in the entire supply pipeline. This includes transportation, packaging, storage and handling methods, and information flow. The industrial policies in India have prompted manufacturers to build plants in remote, backward areas due to inexpensive land and tax benefits. This poses some serious logistical problems. Apart from a poor road and transportation network, the existing communications system in India leaves a lot to be desired by any international standard. It is in this context that logistics has to be considered in India. Logistics call for an understanding of the total supply chain, the elements of which include inventories, packing, forwarding, freight, storage and handling. Logistics is responsible for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the company or the physical distribution of finished goods, logistics encompasses all of these. Typical logistics framework mainly consists of Physical Supply, Internal Operations and Physical Distribution of Goods and Services. To put it more simply, the material supply logistics starts from the base level of “generation of the demand”, through the “process of purchase” and “supply of material from the vendor” right through to “final acceptance” and “payments to the supplier” and “issue to the indenter” and has to be considered as a “one whole activity” with each stage having an impact on price/cost of material supply. Logistics is, in itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel.

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Travel and Transportation forms the backbone of infrastructure – the major sector of any economy. Millions of people and businesses rely on an extensive, interrelated network. The transportation industry is in an era of unprecedented change. Marked by unending demands for increased services and severely limited budgets for infrastructure, the industry faces continuous challenges. The travel industry is exploring new horizons in the way it does business, thanks to technology. Today, with the help of technology the travel industry is creating new propositions for its customers - online booking, remote travel management, and new age CRM programs. On the other hand, 3PL and Logistics provider industry that is heavily dependant on infrastructure set by transportation has been embryonic to offer greater scope and more complex solutions. Expansion of networks through rapid globalization with mergers and acquisitions amongst logistics providers and need to fulfill complex global contracts calls for higher performance through greater and deeper end-to-end integration and state of the art visibility tools. The underlying objective is, seamless flow of information across the complex and growing value chains, leading to effective and faster decision making which in turn leads to better transparency and visibility.

The Logistics & Transportation Industry •

Globally, the logistics industry is valued at US$ 3.5 trillion.

•

The U.S., which contributes to over 25% of the global industry value, spends close to 9% of its GDP on logistic services.

•

The Indian Logistics Industry is presently estimated at US$ 90 billion.

•

The industry has generated employment for 45 million people in the country in comparison with the IT and ITeS sector which employs approximately 4.3 million people.

•

It is forecast to grow at a Compound Annual Growth Rate (CAGR) of approximately 8% over the next three to five years.

•

Third Party Logistics (3PL) Solutions, is slated to grow at a compound annual growth rate (CAGR) of over 16% from 2007-10. Consequently,3PL service

11

providers are expected to corner an increased share of the Indian Logistics pie, from 6% in the year 2006 to 13% in the year 2011, at a CAGR of 25% The primary growth drivers of this industry are as under: •

Investments in the infrastructure sector amounting to US$ 350 billion

Increased efficiency and productivity of the transport system would result in lower transit times. •

Streamlining of the indirect tax structure: The introduction of Value Added Tax (VAT) and the proposed introduction of a

singular Goods and Services Tax (GST) are expected to significantly reduce the number of warehouses manufacturers are required to maintain in different states, thereby resulting in a substantial increase in demand for integrated logistics solutions. •

Robust trade growth Strong economic growth and liberalization have led to considerable increase in

domestic and international trade volumes over the past five years. Consequently, the requirement for transportation, handling and warehousing is growing at a robust pace and is driving the demand for integrated logistics solutions. •

Globalization of manufacturing systems Globalization of manufacturing systems coupled with advancements in

technology are increasingly compelling companies across verticals to concentrate on their core competencies and avail the cost saving potential of outsourcing. This is expected to contribute to an increase in the need for integrated logistic solutions, which is the niche of every

12

India Logistics& Transportation Industry: $125 Billion Goldmine India's logistics market is all set to experience a period of explosive organic growth, judging by independent market analyst Datamonitor's latest research. The Datamonitor report, "India Logistics Outlook 2007-2008" predicts high double-digit growth rates for both outsourced and contract logistics in India. With India's gross domestic profit (GDP) growing at over 9% per year and the manufacturing sector enjoying double digit growth rates, the Indian logistics industry is at an inflection point, and is expected to reach a market size of over $125 billion in year 2010. Strong growth enablers exist in India today in the form of over $300 billion worth of infrastructure investments, phased introduction of value-added-tax (VAT), and development of organized retail and agri-processing industries. In addition, strong foreign direct investment inflows (FDI) in automotive, capital goods, electronics, retail, and telecom will lead to increased market opportunities for providers of logistics services in India. However, as a result of the under-developed trade and logistics infrastructure, the logistics cost of the Indian economy is over 13% of GDP, compared to less than 10% of GDP in almost the entire Western Europe and North America.

As leading manufacturers realign their global portfolios of manufacturing locations, India will have to work on such systemic inefficiencies, in order to attract and retain long-term real investments. 3PL/outsourced logistics is the outsourcing of a company's logistics operations to a specialized firm, which provides multiple tactical logistics services for use by customers as opposed to the respective company having a business unit in-house to oversee its supply chain and transportation of goods. With increased geographical distribution of incomes in India, the consumer markets are extending beyond the five metros of Mumbai, Delhi, Bangalore, Chennai

13

and Hyderabad. However, rather than being pre-emptive, the companies are only following with new distribution outlets. As such, the increased competition across industry verticals is forcing firms to focus on product distribution, and logistics outsourcing is gaining further momentum with this. At just above one-quarter of the entire $90 billion Indian logistics market, is slated to grow at a compound annual growth rate (CAGR) of over 16% from 2007-10.

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Industry Scenario: The recent economic changes are proof enough to establish India as an evolving super power. The seventh-largest nation in terms of geographical area and a prominent force among emerging countries in terms of technology and infrastructure, India is now well ahead on the growing curve of the world economy In wake of this, India is witnessing a renaissance of sorts across all sectors, especially manufacturing, telecommunications, retail and services, as global as well as local players converge to cater to the world’s biggest marketplace and consumer community. As India surges ahead on transforming itself from a ‘developing’ nation to a ‘developed’ state, one of the core sectors that is a crucial part of an upward swing is - logistics. As big money gets pumped into manufacturing and other growth-centric sectors, especially retail –the role and potential of logistics companies is on the upswing as crucial business operations like supply chain management and contract logistics become key issues of managing the titanic surge in national business, both locally, nationally and globally. As more and more organizations think and act “global”, it is time for third party logistics service providers to follow suit by establishing networks and logistics infrastructure across Asia. On the logistics front, India has picked up good momentum over the last decade. With an estimated market worth Rs. 260,000 crores, the industry contributes 13 per cent to the national GDP.

15

Changing logistics landscape in India India is already a heavyweight globally in the services sector. Manufacturing still makes up only a relatively small proportion of GDP—about 20 per cent compared to China's 45 per cent—but it is growing, both in terms of domestic focus and exports. India's container trade has been growing at around 15 per cent over the past five years. That means the logistics services business will be growing at a multiple of the box trade, probably around 20 per cent and more per year. The growth in demand presents significant opportunities for the logistics industry, as also challenges. Looking ahead, India is going to play an increasingly important role in driving world economic trade, maybe even rivaling the phenomenal growth and transformation of China a manufacturing superpower. India's current trade profile provides important clues about the development of logistics industry In India the logistics costs are still higher than in the developed markets. The transportation cost accounts for nearly 40 per cent of the cost of production, with more than half the goods in India being moved by road. Gaps that India Post can fill •

Limited presence of operators in rural and semi-urban areas that are growing markets

•

Lack of door to door service

•

Lack of a national level integrated service provider, and

•

Existence of multiple contact points like freight forwarders, aggregators, transport agents, multiple transporters.

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Third Party Logistics To put simply, 3PL (Third Party Logistics) refers to the outsourcing of a logistics function. It could be the use of a transportation carrier, a warehouse, or a third party freight manager to perform all or part of a company’s production distribution functions. The industry has been at the receiving end of increasing interest from the private equity sector. The year 2007 witnessed just under US$ 1 billion in private equity investments in this industry, representing approximately 7% of total private equity investments during the year, against 3% in the previous year The principle reasons of for this function are as under: • Globalization of sourcing, manufacturing and distribution leading to an increase in the complexity of material movement. • Competition that has forced companies towards more responsiveness and a reduction in inventories. An increased need for small but frequent shipments with 100 percent reliability, requiring core competence in logistics management. • Resource constraints that require companies to concentrate only on their core manufacturing or new product development activities The Indian logistics industry is characterized by dominance of a disorganized market. Transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80% of revenues. The freight forwarding segment is also represented by thousands of small customs brokers and clearing & forwarding agents, who cater to local cargo requirements. In order to reduce logistics costs and focus on core competencies, Indian companies across verticals are now increasingly seeking and using the services of third-party logistics service providers (3PLs). Realizing the potential in the contract logistics market, 3PL service providers are expanding their basket of services as companies are now looking for more than

17

just transportation of their products and raw materials. Trucking and courier companies are now leveraging their network to provide express distribution and warehousing. Similarly, freight forwarders are moving towards owning assets in the form of Container Freight Stations (CFS), Inland Container Depots (ICD) and container trains. Furthermore, 3PLs are also increasing investments to become end-to-end integrated players. As per the investment plans of the leading 3PLs in India, the logistics industry's capital expenditure is progressively increasing to almost match its revenue growth, a strong indicator of both 3PLs desiring to become integrated service providers and the industry enjoying investment-driven growth. Infrastructure congestion: the key challenge According to Datamonitor, the logistics industry in India is currently hampered due to poor infrastructure such as roads (over 70 % of freight transportation in India is via roads), communication, ports and complex regulatory structures. The National Highways (NH) form only 2% of the entire road network in India, but handle over 40% of the national road freight traffic, putting enormous pressure on the highway infrastructure. Also, on an average a commercial vehicle in India runs at a speed of 20 miles per hour (mph) compared to over 60 mph in the mature logistics markets of Western Europe and the USA. In addition, the twelve major ports of India handle volumes higher than their full capacity, resulting in pre-berthing delays and longer ship turn-around time compared to even the East Asian counterparts like China and South Korea. With the collective economic interaction of growing per capita disposable incomes, fast growing manufacturing and organized retailing sectors, increasing external merchandise trade, infrastructure investments by the government and 3PL capex plans, both India's logistics industry and the 3PL sector of this market are set to witness explosive growth by 2012

18

Transportation And Logistics TRANSPORTATION : Transportation is the movement of people and goods from one place to another. The term is derived from the Latin trans ("across") and portare ("to carry"). Industries which have the business of providing transport equipment, transport services or transport are important in most national economies, and are referred to as transport industries.

Aspects of transport The field of transport has several aspects: loosely they can be divided into infrastructure, vehicles, and operations. Infrastructure includes the transport networks (roads, railways, airways, waterways, canals, pipelines, etc.) that are used, as well as the nodes or terminals (such as airports, railway stations, bus stations and seaports). Vehicles travelling on the networks will include automobiles, bicycles, buses, trains and aircraft. The operations deal with the way the vehicles are operated on the network and the procedures set for this purpose including the legal environment (Laws, Codes, Regulations, etc.) Policies, such as how to finance the system (for example, the use of tolls or gasoline taxes) may be considered part of the operations

19

Modes and categories Modes are combinations of networks, vehicles, and operations, and include walking, the road transport system, rail transport, ship transport and modern aviation. • • • • • • • • • • • • •

Air transport Cable transport Conveyor transport Human-powered transport Hybrid transport New Mobility Agenda Rail transport Road transport, including human-powered transport such as walking and cycling Ship transport Space transport Sustainable transportation Transport on other planets Proposed future transport

Logistics: Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers (frequently, and originally, military organizations). Logistics involve the integration of information, transportation, inventory, warehousing, material-handling, and packaging. The simplest way to describe logistics is to say that it is all about ways and means of meeting the demand for materials i.e. satisfying the customer with what he wants, when he wants, where he wants etc. Definition includes outbound, inbound, internal and external movements and returns of material for environmental purposes. The logistics concentrate on dynamic processes, related to the flow of materials and the relationship between the materials and their use at different facilities. The most wide spread definition from council of Logistics Management says that “Logistics is the part of the supply chain process and plans, implements and controls the efficient, effective flow and storage of goods, services and related

20

information from the point of origin to the point of consumption in order to meet customers requirements.”.

Major cost elements • Transportation

35%

• Inventories

25%

• Losses

14%

• Packaging

11%

• Handling and Warehousing

9%

• Customers’ shopping

6%

• Transportation 35% • Inventories 25% • Losses 14%

21

Logistics Infrastructure in India: •

Logistics involved global movement of materials, information and funds from country to country

•

Requires excellent state of the art infrastructure airports, sea ports, Internet and other related facilities

•

Indian infrastructure is poor as compared to developed and developing countries and stands at 54 amongst the 59 countries.  Road …………………56/59  Rail……………………25/59  Seaport………………..51/59  Airport………………...10/59

•

The underlying institutional problem  Fragmentation and overlapping of responsibilities among various government agencies.  Complexity of international trade documentation process and lack of IT infrastructure.  Complex tax laws  Lack of professionally competent logisticians  Industry readiness: weak asset or system management skills

Roadways •

National Highway Development Project (NHDP), US $13 billion, 1998-2007

 Four/six laning of the highway connecting Mumbai  North-South and East-West corridors (NS-EW)  Kashmir to Kanyakumari and Silchar to Porbandar •

The end to end transport to be optimized by controlling loading densities through packaging and palletizing standards and loading and unloading services automation.

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•

Slow speeds, traffic congestion, high wear and tear of vehicles are some of the problems

Air • The air cargo consists of express mail, computers, chips, electronic and optical equipment, precision instruments and perishable food stuffs.

• The six major airports carry 88% of the total cargo. • Privatization of the major airport, airlines is a popular headline.

Railways •

During the year 2006-2007 the Indian Railway carried  513.5 million tones of freight Rs 23,305 crores (69%)  89% of its freight is commodities like coal, fertilizers, cement, petroleum products, food grains, finished steel, iron ore and raw material to steel plants.  5,150 million passengers, Rs 11,213 crores (31%)

•

High Density

Network (HDN) connecting Bombay, Delhi, Calcutta, and

Madras,  Carries 65% of the total rail freight and 55% of passenger traffic. •

Concur in the Flag ship route

•

Freight is moving away from Indian railway although cheaper

23

•

Seaports  Vast coast line of 7517kms handles 95% of foreign trade  12 major ports and 184 other (minor & intermediate) ports  Traffic in major ports : 2007-08 was 333 million tones

• Hand

24

About BLR

History: Mr. L.C. Goel (affectionately called LCG), a self-made man, a great visionary of strong values, started a small trucking business in the 1968. His short-term goal was to establish a road transport business between his native place and the commercial capital of India. The company was very aptly named Bombay Ludhiana Roadways, catering to the transportation needs of the customers in these stations and the stations enroute. With his able leadership and great vision, LCG nurtured the nascent organization into an India wide Transport Company catering to the very need of the customers nationally. Quality, Integrity and Social responsibility are the values that he practiced, preached and imbibed in the culture of BLR. In line with his mission, he had grown the business steadily to about INR 2 crores by 1989. By that time, the 2nd generation had already been groomed to take the reigns of the business. Mr. Ashok Goel, a Commerce Graduate from Mumbai University, joined the Family business in 1985 started by his father Mr. L C GOEL. Through his able leadership, he has transformed BLR into an INR 235 crores company with a network of more than 80 offices spread across the length & breadth of the country. Mr. Ashok Goel is an active member of various developmental industry bodies & associations like Indian Road Transportation Development Association (IRTDA), All India Transport Welfare association (AITWA) and Bombay Goods Transport Association (BGTA) and is actively involved in industry regulations necessary for the development of the transport infrastructure in the country.

Company Profile: 25

Set up as a small trucking business in 1968, by a visionary Mr. LC Goel, BLR has shifted gears to become one of the largest & most reliable Transportation & Logistics companies in India. From a one man operating and managing in a single office in 1968, the company grew steadily to a sizeable business of about INR 2 crores (INR 20 Million) and three offices by 1989. 1990s saw the spurt of growth in BLR as the company grew from a INR 2 crores in revenues from three offices to 120 crores (INR 1.2 billion or USD 27 million) out of a network of more than 80 offices all over India at present. The Company has moved up the ladder through innovation & consolidation and today with a 450-people strong family, BLR has become one of the most sought after Transportation & Logistics companies in India. The fact is well endorsed by the customers nationally. With a fleet of more than 350 vehicles including trucks, trailers & LCVs and with a network of warehouses in major cities in India, BLR offers a truly integrated Logistics Services to its customer. Custom Bonded-warehousing, bonded-trucking and excise bonded warehousing are additional unique features of BLR's offerings to complete the bouquet of total Logistics Services. BLR is committed to service the customers by offering complete logistics & supply chain solutions. In order to facilitate this, BLR has promoted BLR Logistics to cater to the Logistics / Supply Chain requirements of the customers. BLR Logistics is being led by professionals with varied corporate backgrounds and rich industrial experience

26

Name of company

:

BLR India Private Ltd.

Corporate Office

:

B-115/117, Virwani Ind. Estate, Western Express Highway, Goregaon (E) Mumbai-Maharashtra Pin: 400063

TELEPHONE

:

22-40419090, 66981844, 9869302240

E-MAIL

:

www.blrindia.com

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Organization Structure

Mr. Mohan Meghnani (Executive Director)

Mr. Gautam Suri

Ms. Nilu Goel

(Director Operations)

(Director Finance)

Mr.Ashok Goel (Managing Director)

Mr. Mansingh Jaswal (Director Sales & Mktg)

Mr.P.D. Sharma (Director Transport & Pricing)

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•

Established by and on:  Mr. L.C. Goel (affectionately called LCG), a self-made man, a great visionary of strong values, started the business in the 1968.  Named Bombay Ludhiana Roadways  1 office in 1968  Mr. Ashok Goel joined the Family business in 1985  63 offices all over India at present

•

Product category: BLR India Private Ltd. provides complete LOGISTICS AND TRANSPORTATION solutions. BLR offers a truly integrated Logistics Services to its customer. Custom Bonded-warehousing, bonded-trucking and excise bonded warehousing are additional unique features of BLR's offerings to complete the bouquet of total Logistics Services.

•

Product range: BLR India Private Ltd. provides a variety of services to its customers that includes Transportation solutions, Warehousing & Distribution Solutions, International Freight Management Logistics & Supply Chain Solutions

29

Services Offered By BLR Transportation solutions:

BLR has the capability to provide Transportation to all kind of material within India. The broadline segmentation of Transportation Services is as below; o Domestics Transportation o Bonded Trucking o Project Transport o Scheduled Transport o Multi Modal Transport o Customised Transport

(Milk

run,

Hub& Spoke etc.)

30

Warehousing & Distribution Solutions

The ranges of warehousing services currently offered to the customers are following; •

Bonded Warehousing (Custom bonded and excise bonded)

•

General Warehousing (for all industry types)

•

Export Stuffing warehouse

•

Export Vendor Consolidation

31

International Freight Management

BLR through its logistics services entity does the complete programme management for the international Freight Management. We deal with the following: •

Air Export Freight Management

•

Air Import Freight Management

•

Ocean Export Freight Management

•

Ocean Import Freight Management

•

Project Transportation

32

Marketing mix of BLR Product

The service marketing mix comprises off: • Product Price

Process

• Price • Place Service Marketing Mix

• Promotion • People • Process

Place

People

The above mentioned marketing mix used for service marketing can also be explained with the given diagram: Promotion

33

Product BLR

India

Private

Ltd.

provides

complete

LOGISTICS

AND

TRANSPORTATION solutions. BLR offers a truly integrated Logistics Services to its customer. Custom Bonded-warehousing, bonded-trucking and excise bonded warehousing are additional unique features of BLR's offerings to complete the bouquet of total Logistics Services.

Price On receiving the tender from the client the marketing department forwards the details to the operations department in order to ascertain the transportation cost. The operations department while determining the cost takes into consideration:  Nature of Goods (consumer, durable, perishable etc)  Weight of Goods  Height of Goods  Government regulations  Distance to be covered  Market Price  Loading & unloading time  Fuel prices (rise in fuel prices adds to the total cost)  Transportation cost  Profitability  Insurance

34

Place BLR India’s network extends to almost every major state and city of India. BLR has more than 80 branches all around the country from north to south and west to east. Some of the branches are in Vapi, Surat, Pune, Ahmedabad, Akola, Aurangabad, Bangalore, Baroda, Bellary, Bhopal, Chennai, Gurgoan, Hyderabad, Indore, Kanpur, Panipat etc. The corporate office of BLR India Private Ltd.is in Goregaon

Promotion BLR India Private Ltd being a complete logistics and transportation service provider in order to promote their services uses the following promotional tools;

Newspapers: BLR India Private Ltd in order to market its services advertises in the following newspapers:  Economic Times  Exim India  Business Standard  DNA Money 

Magazines & Journals: BLR India Private Ltd in order to market its services advertises in a magazine called as Transportation and the Times Shipping Journal.

Internet: BLR India Private Ltd in order to market its services also has its own dedicated website called as www.blrindia.com BLR India Private Ltd also sends e-mails on a regular basis to its existing customers to let them know about their new offers.

35

People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. It tells consumers that the staff is taken care off by the company and they are trained to certain standards. An important marketing task is to set standards to improve quality of services provided by employees and monitor their performance. Without training and control employees tend to be variable in their performance leading to variable service quality. One of the biggest assets for BLR India Private Ltd.is its people. BLR is a place where employees are fully aware of their job duties and responsibilities and posses the required knowledge and skills to perform their day to day activities. It adopts an open door policy where employees can directly communicate their views and ideas to the top level management. The people working in the marketing department directly report to the managing director and there is no hierarchy as such that prevails in the department. Each individual is aware of the role they need to play in order to contribute to individual and organizational success. BLR as an organization believes in satisfying its internal customers (employees) which in turn would keep the ultimate customer (external customers) satisfied.

36

Process Refers to the systems used to assist the organization in delivering the service. Process – this means procedures, mechanism and flow of activities by which a service is acquired. Process decisions radically affect how a service is delivered to customers.

It includes several processes e.g. first contact with customers,

administrative procedure regarding course delivery, preparation, delivery and evaluation of the courses. The process at BLR India Private Ltd: •

ensures that marketing happens at all levels from the marketing department to where the service is provided

•

considers introducing flexibility in providing the service; when feasible customize the service to the needs of customers

•

recruits high quality staff, treats them well and communicates clearly to them the attitudes and behavior of the employees are the key to service quality and differentiations

•

attempts to market to existing customers to increase their use of the service, or to take up new service products

•

sets up a quick response facility to customer problems and complaints

•

employs new technology to provide better services

•

uses branding to clearly differentiate service offering from the competition in the minds of target customers

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Infrastructure of BLR

BLR Office Network BLR India’s network extents to almost every major state and city of India. Our endeavourer is to deliver complete and subtle logistic solutions to each and every corner of the country. BLR has more than 80 branches all around the country from north to south and west to east. Some of the branches are in Vapi, Surat, Pune, Ahmedabad, Akola, Aurangabad, Bangalore, Baroda, Bellary, Bhopal, Chennai, Gurgoan, Hyderabad, Indore, Kanpur, Panipat etc. The below given figure explains the same:

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Corporate Office B-115/117, Virwani Ind. Estate, Western Express Highway, Goregaon (E) Mumbai-Maharashtra PIN:400063

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BLR Fleet With a fleet of more than 350 vehicles including Trucks, Trailers and LCVs, BLR has the capability to carry all types of goods for transport within India. The profile of BLR customers varies from Global MNCs, Indian MNCs, Indian Corporate house, Start Trading house, Trading houses and Importers & Exporters. The industries and the products that BLR caters to currently include pharmaceuticals, Chemicals, Lubricants, Engineering, Automotive, Electronics, News Print, Papers, Fibers, Polymers, Steel, Project machinery, Plant & Equipments, odd dimensional cargo and Import & Export containers. With thorough knowledge of Indian Transport regulations, customers trust BLR and entrust with responsibilities to deliver goods in time, every time.

Bonded Warehouses BLR is Govt. approved Custom-bonded warehouse operator within India and is operating Custom-bonded and Excise Bonded warehouses around the country. BLR is also adding 50,000 sq ft state-of-art bonded warehouse space in New Delhi to the existing network. An Excise-bonded warehouse of 20,000 sq ft is also being planned for export container stuffing at Mumbai and Ludhiana.

General Warehouses BLR offers warehousing and distribution services to its customers. With a warehouse space of more than 100,000 sq ft and with a strong transport network around the country, BLR has the capability to provide integrated logistics & supply chain services to its customers in India.

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Bonded Trucking BLR has been approved by CONCOR (Container Corp of India), a PSU of Govt. of India, to operate bonded-trucking services within India and is one of the few transportation companies in the panel of Concor to offer this service. BLR has been given this approval by CONCOR after a due diligence on the capability, security and quality parameters.

BLR IT Capacity •

BLR has a dedicated in-house team of professionals to manage the IT systems.

•

BLR is using various modes of technology to support the business. All the offices are linked through the email network.

•

BLR uses Highway Vehicle Tracking System, Advanced Computer and Communication technology to link its network of branches nation wide.

•

Online tracking system is in place for tracking the movement of trucks and shipments.

•

BLR is committed to invest in leading-edge IT capability to support the gamut of logistics services offered and to give a real time Track & Trace visibility to our customers.

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Quality at BLR BLR is an ISO 9001:2000 certified company. BLR has a quality policy in place which ensures that each member of the BLR family complies with the set quality norms. All the processes that we undertake have an internal quality standard. Even our drivers are ensured to be compliant with the norms set forth for safety, security and quality. The processes are thoroughly monitored and regularly audited. We at BLR India Private Ltd. constantly endeavor to give utmost Satisfaction to all customers at competitive costs in all spheres of our business activity, achieving the highest standards of quality and service, by ethical means, constantly upgrading our skills through training and motivation and continually improve the effectiveness of the quality management systems Our mission is to provide safe and prompt services as part of complete and cost effective solutions to our client’s logistic requirements. Our vision is to become INDIA'S leading transport company and play an important part in the economic growth of the company

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Marketing department structure

Mr.Ashok Goel Managing Director

Mr. Makarand Kulkarni

Mr. Mahesh Shetye

Mr. Govind Sharma

Mr. Krishnan

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Clients of BLR BLR India Private Ltd. has a huge customer base. BLR India Private Ltd. Deals with variety of goods and services listed below:

Consumer Goods: •

Sony India Ltd

•

Pidlite Industries Ltd

•

Bajaj Electricals Ltd

•

H & R Johnson Ltd

•

VIP Industries Ltd

•

Nestle India Ltd

•

LG Electronics

•

Gujarat Glass (P) Ltd

•

Samsung

Polymers: • • •

Reliance Industries Ltd IPCL Ltd GSFC Ltd

Project Machineries: •

Wartsila NSD India Ltd

•

Mazagaon Docks Ltd

•

Larsen & Toubro Ltd

Steel/Cooper: •

Birla Cooper Ltd

•

Vikram Ispat Ltd

•

Aarti Steels Ltd

•

Bhushan Steel Stripes Ltd

•

Jindal Iron & Steel

Automobiles: 44

•

Honda Siel Cars India Ltd

Pharmaceuticals: •

Medley Pharma

•

Agio Pharmaceuticals

•

Lupin Laboratories

•

Ajanta Pharma

•

Dabur

Agro Chemicals: •

E.I. Dupont (I) Ltd

•

E.I.D Parry (I) Ltd

•

Excel Industries Ltd

Custom House Agent: •

LEE & Muirhead Ltd

•

J.M. Baxi Co.

•

Bax Global India Ltd

•

Maersk Logistics Pvt Ltd

•

UT Worldwide

•

Excel India Pvt. Ltd

Yarn/Fibre/Textile: •

Nahar Group of Industries

•

Vardhaman Spg. Mills Ltd

•

JCT Ltd

•

Grasim Industries Ltd

•

Government Undertaking:

•

Container Corporation of India Ltd

•

Cotton Corporation of India Ltd

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We are proud to have these Popular Brands as our customers

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Awards and Achievements: •

National Trade Excellence Award Reflects the excellence in BLR way of working

•

Samajshri Award Reflects the commitment of BLR towards the social responsibility

•

Appreciation Awards from AIMTCI All India Motor Transport Congress on March 2005

•

Appreciation Award by BGTA (Thrice) Bombay Goods Transport Association: Sept 2003, Sept 2004, Nov 2005

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SWOT Analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. In SWOT, strengths and weaknesses are internal factors and opportunities and threats are external factors.

SWOT Analysis of BLR Strengths •

Strong Brand Image

•

Quality and reliability.

•

Superior performance vs competitors in terms of delivery.

•

Some staff has experience of end-user sector.

•

Direct delivery capability.

•

Product innovations ongoing.

•

Management is committed and confident.

•

Willingness of staff to adapt to change

Weaknesses •

Customer lists not tested.

•

Paperwork

•

We cannot supply end-users abroad.

•

Need more sales staff.

•

Refresher training not practiced.

•

Delivery-staff need training.

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Opportunities •

Large, Potential Domestic and International Market

•

Could extend to overseas.

•

New specialist applications.

•

Could seek better supplier deals

Threats •

Competition from other developing countries, especially China.

•

Bad roads

•

Retention of key staff critical.

•

Vulnerable to reactive attack by major competitors

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Problems /Challenges of industry; There are a number of problems faced by the logistics and transportation industry which are discussed below:

1. Cut Throat Competition: The logistics and the transportation industry have been exposed to cut throat competition from the Indian and the overseas competitors in the recent past. Due to globalization the industry has seen entries of new companies from the overseas markets which offer excellent services at competitive rates. Though there has been a significant growth in the sector logistics analyst believe it is an era of survival of the fittest.

2. Heavy Maintenance cost: The logistics and the transportation industry is concerned with the movement of goods from the place of manufacturing to the place of consumption for this it requires trucks, trailers, low bed trailers, well bed trailers, which vary from 20 feet to 40feet depending on the clients requirements. The cost incurred to maintain these modes of transports contributes to a large amount of the total expenses incurred. The cost of components and accessories, such as tyres and batteries, has escalated tremendously.

3. Changing government Policies: A change in government policies regarding transportation, octroi, freight is a also one of the major challenges faced by the logistics and transportation industry. Change in these policies lead to increase in the total cost incurred by an organization

4. Heavy Advertisement cost:

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In order to market its products a huge amount is spent in the advertisements in business newspapers like the economic times, Exim newspaper etc in order to market its products and make ones presence felt in today’s highly competitive market

5. Entry of Foreign Companies: Due to globalization, privatization and liberalization the logistics and the transportation sector in the recent past has seen new companies from the overseas market entering in the sector. This has resulted in cut throat competition which ultimately directs a company to achieve exceptional customer experience and generating brand loyalty amongst their clients.

6. Increasing Fuel/Diesel prices: The logistics and the transportation is primarily concerned with movement of goods and services from one place to another. To achieve this it requires the use of trucks, trailers etc and to run these vehicles we require fuel. With a constant rise in fuel prices (petrol and diesel) the overall cost increases as well. Rise in fuel prices is one of the major challenges before the transportation and logistics industry. 7. Creditors Collection Period: On a number of occasions the industry provides credit facility to the clients & faces the problem of not receiving the payment from its creditors on time. In today’s cut throat competition era it is important to provide credit facilities to the customers and on the other hand a inappropriate credit policy can lead to blockage and idealization of funds which in turn would hamper the Organizations success.

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8. Availability of inadequate infrastructure facilities: Availability of adequate infrastructure facilities is vital for the acceleration of the economic development of a country. One of the greater challenges India is facing today perhaps is that of developing and deploying country’s infrastructure to keep pace with constant change that is revolving around us. Conditions on Indian road are very bad and hazardous. They tend to reduce speed of vehicles, which leads to wastage of natural transport capacity. The Indian Government has accorded a high priority to investment in sectors such as the roads, railways, power, ports and airports. The Government has taken appreciable initiatives like building the golden quadrilateral but it is like a drop in the ocean. The industry is still coping with an inadequate and poor quality of infrastructure network and suffers from a near absence of technological improvements. All these act as economic bottleneck impending growth across transportation industries.

Eg. Trucks get stuck in muddy roads, work sites remain unapproachable, and serious vehicular accidents are caused, Obstruction by Trees on highways while carrying goods which are taller in nature etc.

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Conclusions and Recommendations

Conclusion Logistics is the one important function in business today. No marketing, manufacturing or project execution can succeed without logistics support Logistics is important in India because of the country's size, geography, population variety, natural and man-made calamities etc. The transport facilities are inadequate in India and roads are bad. India lacks a well-developed road network and waterways are still unexploited. Due to competition, globalization and information availability, logistics has gained extra importance. First: the days are gone when a manufacturer had a better raw material supplier than competitors. Then, the operations in a manufacturing process are well known to all. The processes are more or less standard. Also, technology is available to all. The only area where one can score over competitors is logistics. If logistics cost is reduced, there is a gain. Logistics is a critical factor for effective marketing too: for, if a company cannot reach the right thing at the right place etc., then, regardless of the marketing efforts, the business comes down Logistics is one of the areas of the supply chain i.e. growing at a tremendous case as the Internet and E-Commerce is drastically changing the range, delivery time and the speed of information as well as ordering and payment process. Due to the big boon of information technology, greatly influencing and enhancing the effectiveness of logistics, the time is not far when logistics services would prove to be one of the major contributors to the National Income.

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The industrial policies in India have prompted manufacturers to build plants in remote, backward areas due to inexpensive land and tax benefits. This poses some serious logistical problems. Apart from a poor road and transportation network, the existing communications system in India leaves a lot to be desired by any international standard. With increased geographical distribution of incomes in India, the consumer markets are extending beyond the five metros of Mumbai, Delhi, Bangalore, Chennai and Hyderabad. However, rather than being pre-emptive, the companies are only following with new distribution outlets. As such, the increased competition across industry verticals is forcing firms to focus on product distribution, and logistics is gaining further momentum with this.

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Recommendations/Suggestions 1. Market Research The Logistics and Transportation industry is one of the booming sectors of the Indian Economy and India's market is all set to experience a period of explosive organic growth and thus market research plays a vital role in the expansion of the Industry. Market research is the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. The company can go ahead and conduct a systematic market research so as to understand and explore the potential markets where more business can be generated. Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats. Examples of market information questions are:  Who are the customers?  Where are they located and how can they be contacted?  What quantity and quality do they want? 2. Timely Supervision of Vehicles: The logistics and the transportation industry is concerned with the movement of goods from the place of manufacturing to the place of consumption for this it requires trucks, trailers, low bed trailers etc The cost incurred to maintain these modes of transports contributes to a large amount of the total expenses incurred. BLR may appoint a Dedicated Vehicle supervisor to look after the replacement, maintenance, performance etc of the vehicles on a regular basis. This in turn would help in determining when the vehicles needs to be serviced, whether they need to be replaced etc which would help in reducing cost to a great extent. The appointment of a vehicle supervisor would definitely lead to regular

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maintenance and in turn would reduce the cost and to minimize wastages which in turn would contribute to the Organizations success. 3. Appropriate Credit Policy: There should be an appropriate credit policy developed as per the convenience of the organization. As a higher credit collection period can lead to idle funds and contribute to the inefficiency of the organization, credit should be assigned to the client based on some research done about the turnover, financial position etc of the client. With proper assignment of credit one can avoid the blockage of funds which in turn can be used for other business activities and in turn would contribute to the organizations success. When

the

services

are

provided by the company on credit basis, the Company should keep a record of the number of days the client takes to pay the amount back, say a client in particular has been delaying payments on a regular basis, the company should consider altering its credit policy for the particular client may be by ways of asking for a greater amount of advance or may be completely on cash basis etc

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General management

Competitors: BLR India Private Ltd which provides complete Logistics solutions faces cut throat competition from companies from India. With Globalization at present and the realization of the huge amount of potential for the logistics and transportation industry in India there are companies from other countries entering into the logistic business in India. Some Major Competitors: •

Best Roadways.

•

Caravan Road lines.

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Product photos LCV

CONTANIRISED LCV

TRUCKS

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Open Truck

40 Feet Trailer

Low Bed Trailer

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Well Bed Trailer

Distribution

Warehousing

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Bibliography & Webiliography •

http://www.wikipedia.org/

•

http://managementparadise.com/

•

http://marketingteacher.com/

•

Economic Times

•

Exim India

•

Business Standard

•

DNA Money

•

Transportation Magazines

•

Times Shipping Journal

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