Logistics

IntroductionLogistics is about moving materials, information and funds from one business to another or from a business to the consumer. It is a vital part of the business economic system and is a major global economic activity. In fact 10-15 per cent of product costs are logistics related. Worldwide, logistics constitutes about $2 trillion a year. For any country, the logistics cost is estimated between 9 and 20 per cent of its GDP.

Logistics Management ProcessInbound logistics: Purchasing, Inbound transportation, Inventory Management. Manufacturing: Production planning systems, Machine scheduling system. Outbound logistics: Order booking process, Distribution management, outbound transportation, and Warehouse management systems

Indian Courier Industry

Industry Overview1) Demand growth linked to general domestic markets & - Leading service providers include Blue Dart, DHL, AHL, Fedex etc. - Blue dart leads the domestic market with 38% market share. - Salient features of the industry; i. Door to Door Service ii. Time definiteness iii. Reliability iv. Tracing & tracking 2) International Express markets - Indian subcontinent constitutes approx 3.9% of the of the worlds airfreight

Industry Characteristics & Drivers Characteristics 1) Demand growth linked to general economic prospects 2) High Fixed Cost structure 3)Continuous investment in Fixed asset is required 4) The ability to provide time definite service wuth the competence to offer clients information about the status of shipments and supply chains crucial 5) Close control is required over all shipments with attendant need for sophisticated information system. Industry Drivers 1) General growth in the domestic industry and the imports/ exports 2) Increasing need of reliable and time definite services from the industry 3) Growth in volumes of consignments and the revenue realization

SWOT Analysis: Indian Courier Industry Strengths 1) Non Regulated Industry : No licenses required to enter the Industry. 2) Limited players at national level 3)High growth industry : expected to grow @ 30% in coming years 4) Presence of huge entry barriers; - Enormous set up of national networks. Offices, air lines tie-ups - International tie-ups required Weakness 1) High dependence on economic scenario 2) Poor infrastructural support, inadequate & inefficient airports, bad roads etc. Opportunities 1) Integrated Logistics solutions for companies. 2) Development of e-commerce enables customers to stay online for any queries Threats 1) Government regulations. 2) New Technology : Companies need to stay in touch with upgrading techno savvy world.

About BLUE DART Blue Dart Express Ltd. was incorporated on 5th April 1991. The company was converted into a public limited company on June 15th, 1994 and the certificate of incorporation on change of name was issued on June 17th, 1994. The Company is engaged in the courier business for carriage and door-to-door delivery of commercial documents, samples, panels and printed matter in India and throughout the world. The Company was promoted by Tushar Jani, Clyde Cooper and Khushroo Dubash. - The name of the firm was changed to Blue Dart Express on October 1st, 1990 and the firm was registered as a private limited company on April 5th 1991.

BLUE DART is South Asia's leading integrated air express carrier and premium logistics-services provider. It has the most extensive domestic network covering over 25,498 locations, and service more than 220countries and territories worldwide through its Sales alliance with DHL, the premier global brand name in express distribution services Blue Dart has warehouses at 14 locations across the country as well as bonded warehouses at the 6 major metros of Bangalore, Chennai, Delhi, Mumbai, Kolkata and Hyderabad. It has ISO 9001 - 2000 countrywide certification by Lloyd's Register Quality Assurance for their entire operations, products and services. Corporate Profile

NOVEMBER 8, 2004 US courier giant DHL had acquired a 68.2 per cent stake in a deal worth Rs 600 crore in Blue Dart Express. Blue Darts Indian promoters and Newfields Holdings have entered into separate definitive sale/purchase agreements to sell their equity shares, collectively constituting 68.21 pc of the total current post issue paid up equity share capital, at Rs 350 per share to DHL Express (Singapore) Pte. The price of the acquisition is at a 9.4 per cent premium to the current ruling market price of Blue Dart, of Rs 319.70. DHL will make an open offer for acquisition of additional 20 pc shares in Blue Dart as per Sebi guidelines on takeovers. Blue Dart already has a sales alliance with DHL. With a 39 pc market share in South Asia, it operates in India, Bangladesh, Bhutan, Nepal, and Sri Lanka. BLUE DART - DHL

Business StatementsVision Statement : "To be the best and set the pace in the air express integrated transportation and distribution industry, with a business and human conscience. We commit to develop, reward and recognize our people who, through high quality and professional service and use of sophisticated technology, will meet and exceed customer and stakeholder expectations profitably." Mission Statement : We commit to develop, reward, and recognize our people, who through high quality and professional services and use of sophisticated technology will meet and exceed customer and stakeholder satisfaction profitably.

BLUE DART Products/ ServicesThe services offered by Blue Dart Express are as follows - Air freight Ocean freight Supply chain solutions Freight forwarding Customs clearance Project handling Charters

BLUE DART Products/ ServicesSome of the New Products include: - Voice Dart: This is 24hr. hotline available to the customer in selected cities of the country. It is an interactive voice response computer system that enables customers to access key information regarding the range of services offered by the company, to track the states of their consignment and leave messages via a mailbox all in a voice form;

(ii) Power Dart: a software-run-system which is installed at the customer premises. Through a dial-up computer modem installed at the customer premises, he can directly access the company's database and retrieve relevant information of his shipments;

(iii) Dart Collect: Offers the overseas consignees receiving shipments from India, the facility to pay the freight changes in foreign currency;

(iv) Dart Apex: This is a day definite door-to-door product for shipments above 20 kgs. travelling to select cities within the company network; -

(v) IXF-2: This is a day definite door-to-door service for international shipments weighing above 45 kgs.

Logistics in BLUE DARTMain challenge for any courier Industry: - (i) The delivery of goods to the customer in the most reliable transit period(and preferably the shortest) possible.

(ii) The reverse flow of acknowledged signed delivery records without which,in many cases, recovery of bills are virtually impossible.

Solution derived by BLUE DART (Logistics Function)It offers a predetermined delivery schedule with close to 100% accuracy, with help of IT & efficient people.

Gave facility to its customers to track their packages through Power dart 2000.

The country's only express airline with a fleet of three Boeing 737s ensured that packages were flown to their destinations overnight

100 % retrieval system of delivery records.

Blue Dart not only handles large volumes and oversize packages overnight - it also provides the industry with status of their shipments and retrieves such records as are necessary for billing. The entire cycle has been considerably shortened, enabling the industry to achieve healthy bottomline.

Services of BLUE DART - DHLDomestic / Regional Services DART APEX DART SURFACELINE SMART BOX International Services International services of BLUE DART were taken over by DHL in 2002. They offers; Express Document (DOX) Worldwide Package Express (WPX) The Jumbo Box & Jumbo Junior Box Types of International Services AIRPORT TO AIRPORT CHARTERS INTERLINE

SWOT AnalysisStrengths Dominant player in the surface cargo segment in India, which accounts for more than 55% of the total volume of cargo moved. International presence, state-of-the-art mechantronic warehouses, warehouse management solutions and value-added services should aid growth in market share. Entry into the coveted cold-chain logistics business. Strong Brand Name and wide reach across India & global presence with collaboration with DHL. Significant presence at JNPT and other major Indian ports. Long-standing relationship with Indian Railways.

SWOT AnalysisOpportunities Strong macroeconomic growth, robust growth in trade driving the growth of the Indian express industry. The industry was valued at Rs71 bn in 2005-06 and has grown in the range of 25%-30% over the past 3-4 years. It is expected that the industry will register a similar growth rate over the next few years. Exemption of interstate sourcing from VAT will make having centralized large warehouses more viable for companies than having local sourcing and distribution.. Improvement in the logistics infrastructure in the country - the dedicated rail freight corridor, modernization of ports, and improvement in road infrastructure are set to give a boost to intra-state and inter state freight movement. Initiative by Indian Railways to allow private operators to run container trains.

SWOT Analysis Weakness A rise in fuel charges could have an adverse impact on margins, which are already low for the company. Substantial investments involved in the setting up of warehouses and building of vessels. Thus the industry is inherently capital-intensive. Threats Entry of new players into the courier operations business. Rise in transportation costs would adversely affect margins. Also, an increase in container traffic over and above capacity at the ports could lead to congestion at the ports, leading to a decline/delay in the throughput handled by the company. An economic slowdown could impact the logistics industry as a whole

Future PlansFocus on core products to expand market share and consolidate unique and premium position in the Indian market, and expansion into the near Mid-East and Far East markets and the SAARC (South Asian Association of Regional Co-operation) countries. Blue Dart would also leverage its vast customer base for global distribution through its alliance with DHL. Position ourselves as the preferred, seamless link to a country projected to be an economic superpower of the 21st Century. Continue to deliver value to our stakeholders through our People Philosophy and Corporate Governance based on distinctive Customer Service, Business Ethics and Accountability, and Profitability.

Key FindingsBlue Dart express ltd. is fully aware of the basic need of customers than its competitors.

The delivery of goods to the customer in the most reliable transit period (and preferably the shortest) possible.

The reverse flow of acknowledged, signed delivery records is trust worthy.

The country's most reliable air and surface network offers a predetermineddelivery schedule with close to 100% accuracy.

Blue Dart offers the country's most comprehensive communications technology and customer software to support critical supply-chain distribution demands.

Blue Dart is mainly focuses on the international services.

Blue Dart does not have very well connection with the national airports.

The national airport services are limited to certain airports and are very expensive.

At national level transportation of goods is done via road that makes delay in the service.

RecommendationsSince Blue Dart is mainly focuses on the international services so it must pay attention in the domestic services.

Blue Dart does not have very well connection with the national airports so Blue Dart must make good connection with the national airports.

At national level transportation of goods is done via road that makes delay in the service so the national airport services must be spread to every airport so it will be resulted into quick service.

The national airport services are limited to certain airports and are very expensive. Spreading to the every airport will also result into the reasonable service.

ThanksBlue Dart HOInternational ServicesInterlineChartersAirport to AirportDart Surface LineRegional ServicesExpress Package