Supply Chain Management At Fedex India 3es64
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SUBMITTED TO PROF : MANMOHAN BAKAYA
TABLE OF CONTENTS
Sl No. TOPIC
PAGE
NO
Acknowledgement 1)
About FedEx
2)
Blue Dart
3)
The FedEx Supplt Chain
4)
Transportation And Logistics Management
5)
Customer Service in the Supply Chain Learnings
ACKNOWLEDGEMENT
We are very grateful to Prof. Manmohan Bakaya, our Supply Chain Management Professor for giving us the guidance and help in grasping the theoretical concepts of the subject and helping us in applying them practically in the Real Life Project at FedEx corporation, India.
We are also indebted to Mr. Hemanth D. P., Country Manager – Sales, FedEx, for taking time out of his busy schedule, patiently answering our queries and helping us in understanding the supply chain management processes and practices followed at FedExIndia.
FedEx Corporation provides integrated transportation, information, and logistics solutions through a powerful family of companies that operate independently yet compete collectively. The FedEx Family:
FedEx Corporation, a $20-billion global enterprise
FedEx Express, the world's largest express transportation company
FedEx Ground, North America's second-largest provider of ground small-package delivery offering a new service -- FedEx Home Delivery
FedEx Freight, a leading provider of regional LTL freight services
FedEx Custom Critical, the world's largest surface expedited carrier
FedEx Trade Networks, a high-tech customs broker and trade facilitator
Vision FedEx Supply Chain Services will be an acknowledged world leader in global integrated logistics management, supply chain solutions and time-definite delivery. Our motivated associates will forge mutually profitable partnerships with our customers using world-class technology and business practices.
In India FedEx follows a V3 strategy:
VISION ---- To connect 95% of the world GDP in 24-48 hours by continuously expanding our international flight network. The express transportation of goods from one corner of the globe to another has become a major imperative in international commerce. Achieving that goal is what our vision network is all about.
VALUE --- To use short and long-haul surface transportation integrated with our vast air operations. One of the greatest advantage of value strategy is that it helps us use our assets more efficiently and provide more value to our customer in of cost.
VIRTUAL --- Virtual strategy is to extend to extend our electronic reach to all our express customers, enabling them to electronically access markets with little regard for distance and time. Make FedEx a virtual company, easily accessible to all our customers and their customers and their customers through system enhancements
Mission •
Achieve success with highly trained and motivated associates.
•
Design, develop, and apply innovative time-definite, global logistics solutions which improve our customers' competitive positions and exceed their expectations.
•
Aggressively pursue business opportunities to meet and exceed our earnings and growth objectives.
Values The culture at FedEx is defined by •
The effectiveness of their communications.
•
The empowerment of their people for peak performance.
•
Employee pride in performance.
•
A safe and rewarding work environment.
•
Their mutually rewarding partnerships with customers and suppliers.
•
Understanding and valuing diversity.
•
Focus on our customers and a ion for service excellence.
•
Conducting business to the highest ethical and professional standards.
FedEx supply chain services FedEx Supply Chain Services designs, develops, and applies transportation management and e-Logistics solutions to improve inventory visibility, velocity, and speed to market. Their transportation management service improves transportation processes and can
increase efficiencies. Their e-Logistics group helps customers compete in today's highly competitive e-Business channels. The FedEx network is woven around the complex structure of our country through a HUB and SPOKE system allowing valued customers flexibility for their choice of routing vendor resourcement, primary warehousing, distribution, secondary warehousing so as to ensure minimum inventory holding cost providing the customers with a cutting edge over its competitors.
BLUE DART About Blue Dart Blue Dart Express Ltd., India's premier integrated air express carrier and logisticsservices provider, has been one of the largest Global Service Participants of Federal Express Corporation, the world's leading air express transportation company, since 1984. From 1984, Blue Dart represented all FedEx interests, under a principal to principal arrangement, in India. Blue Dart-Federal Express Relationship: Blue Dart and FedEx have determined a new agreement in October 1997 to coincide with the introduction by FedEx of its first round-the-world flight touching Mumbai, as well as its direct entry into the country.Under this agreement, Blue Dart is the exclusive provider of transportation, pickup and delivery, customs and related services for FedEx's International Priority shipments, as well as the sole preferred consolidator of FedEx services.The Alliance seeks to leverage the strengths of both organisations for mutual benefit. While FedEx focuses solely on the development of its international business, with its link to the vibrant economy of the Sub-Continent, Blue Dart continues to consolidate its dominant domestic position, and service and enhance its international customer base as a licensee of FedEx, to FedEx's international growth. The new agreement is designed to stimulate the development of India's international express market by combining the competitive advantages of FedEx's global reach with Blue Dart's domestic coverage to increase the market share of both companies.
As a technology leader in the business of supply-chain management in the country, Blue Dart Express Limited recognised the far-reaching scope of the internet in 1996, and has been exploring web-based solutions to extend the range of services available to its customers and integrate them into its core products. It has evolved an e-strategy.This estrategy encomes E-Solutions to deliver additional process efficiencies to business by allowing them access to Blue Dart's e-shipping tools and integration with its e-business
tools. An individual solution is available for each business, big or small, transacting off the internet or on the internet, and ranging from a stand-alone to a fully integrated one The basic tracking solution will enable Blue Dart's customers to track their shipments, through single or multiple waybills, on-line. Customers can check the status of their shipments using a waybill number or a reference number. A mail-based solution will allow the customers to query status of their shipments using e-mail.ed customers of Blue Dart can make advanced queries on the status of their shipments, and can keep track of them for up to 45 days on-line. They can filter their queries by date range, origin, destination and service, and sort the results on-line. ed customers can the entire waybill tracking data - schedule the , and select the frequency and the data to be ed. These customers can also generate and various reports customised to meet their individual needs.
E-Shipping Tools These tools are convenient aids to your shipping management processes:
TrackDartTM: Track the status of your shipment by using the TrackDart TM box, which is available on the upper left of every page on our website. You may track shipments sent on Blue Dart services within India or to Nepal, Bangladesh or Bhutan. You may also track international shipments sent on Federal Express to/from India. Shipments under single or multiple waybills may be tracked using either the waybill number or the reference number given at the time of shipping.
MailDartTM
:
You may either use the Waybill Number or the Reference Number to track the status of your shipments. This feature helps you to track Single or Multiple shipments. To track the status of your shipments by Waybill Number enter the waybill numbers
either in `Subject' or in the text of the mail, each Waybill number seperated by a comma. To track the status of your shipments by Reference/Order Number. Enter the reference/order numbers in `Subject' of the mail, each reference or order number seperated by a comma. Another powerful feature in the MailDart is the Intimate Me Option. Incase you need to know the status of the shipment upon delivery you only have to send a mail to [email protected] with Single or Multiple Waybill numbers in `Subject' or in the text of the mail, each Waybill number seperated by a comma.You will receive an automated reply giving you a Status Update of the shipment(s) upon delivery.
LocationFinder: Find the service locations of Blue Dart and the Blue Dart counter or franchisee located closest to you. You may search by city, street name or pin code to find one of over 11,558 locations serviced in India, or in 211 countries worldwide. TransitTimeFinder: Check the transit times for your domestic and international shipments, and for the various services offered by Blue Dart to help you identify the service that meets your requirements.
PriceFinder: Calculate your shipping costs for your domestic and international shipments by using our Price Finder. WaybillGeneration:
:
The Online Waybill generation tool helps the credit customer to generate a waybill for a consignment. The has to enter the details of the consignment and the waybill will be generated in a PDF format.Another powerful feature in Waybill Generation is the Address Book. This feature comes with the online waybill generation module. The
Address Book can be accessed by all credit customers of Blue Dart. You can create a new address list and modify or delete the addresses at any point of time.
COSMATII: COSMAT II (Computerised On-line System for Management, ing and Tracking) is a complete ERP system indigenously developed by Blue Dart. It interfaces with the Human Resources Management, Financial Management, Purchase, Sales Monitoring Executive Information and CRM systems.COSMAT II was constructed in 4 major modules to cover all the complex processes of the entire organisation. To set up this large application, various media were used (leased lines, VSAT, Microwave links) on our very own WAN for effective data transfer between all locations. Barcodes and Scanners were used for speedier operations. COSMAT II enables easy access to the database over a wide area network, and ensures reliable information and even in areas that are afflicted by poor telecom services. All the powerful web-based tools, including TrackDart, interface with COSMAT II to provide real-time response to customer requirements. COSMAT II is an evolving system, upgraded continuously, to deliver value to the customer and make operations easier, more secure and manageable.
SMARTTM
:
SMART (Space Management Allocation Reservation and Tracking), is an inhouse developed state-of-the-art technology system, which allows real-time space and revenue management on the Blue Dart Aviation network. It ensures that the aircraft is filled profitably, and that all customers with space confirmed on the aircraft have the assurance that their packages would travel.SMART dovetails into COSMAT II leveraging on the infrastructural strength of the system. This ensures that packages booked on SMART are picked, moved on the network and tracked until delivery.SMART is built on Oracle technologies, with the database housed on Oracle 8i (Release 2). This database is hosted on a Sun Enterprise 3500 server, a fully redundant, zero reboot system.
ShipDartTM: ShipDart is a Blue Dart proprietary solution especially created for the convenience of regular customers. ShipDart enables control over the entire shipping and tracking processes. ShipDart needs to be installed at the customers premises in order to interface with their own system for the pre-shipping and post-tracking activities, thereby playing a major role in bridging the existing gap in any package movement. A set of Master Files which controls the ShipDart system has to be ed from the site.
CustomisedSolutions: Blue Dart has delivered customised solutions to various industry segments such as Finance, Pharmaceutical, Consumer Durables and Information Technology, among others. These solutions integrate closely with the legacy systems of the business and enable them to accelerate their processes and provide them with effective MIS. E-Business Tools These tools may be efficiently integrated with your systems to provide you with a convenient and cost-effective solution to your shipping requirements. Blue Dart has been the only Indian Air Express Company that has invested extensively in Technology infrastructure to create differentiated delivery capabilities, quality services and customised solutions for the customer.
InternetDartTM: Track on-line the status update of your shipments sent over the last 45 days. You may track by a range of dates, origin, destination, delivered or undelivered shipments or service used, on-line. You may generate a series of reports, at a pre-determined frequency, and sort the results on-line.For on-line queries and reports: on providing the input of
range of pickup dates, origin, destination and services used, you can check any of the following, on-line:
• Waybill details and status of all shipments sent during a given period • Details of all delivered shipments • Status of all undelivered shipments • Details of all RTO (Return to Origin) shipments • Details of all Re-directed shipments ShopTrackTM: ShopTrackTM is an API (Applications Program Interface) designed specifically to and enhance the services provided by a portal or any e-business. Research indicated that, while etailers provided an entire gamut of product services and information, eshoppers invariably had to leave the website or use manual means to track their purchases. The result - less eyeball time on their pages. Portals that sought to resolve this dilemma were faced with the unattractive alternative of database maintenance and call centres. ShopTrackTM provides an effortless, customised solution. Customers no longer have to leave the Portal site to track their purchases. They just need to enter the order-number of their purchase and the shipping and delivery details are displayed on the same page. The Portal can decide how to display the data elements and may even store them in their database. ShopTrackTM is another time and cost-saving tool created to arm Blue Dart's customers with a competitive edge. PackTrackTMs: PackTrackTM is an API (Applications Program Interface) designed for any client involved in logistics, distribution and inventory control. It has been designed to streamline and integrate shipping processes. PackTrackTM can be integrated into the client's systems and enables him to keep track of the entire distribution status of all his customers. It is simple,
easy-to-use and can be easily integrated with any windows-based application or any Java compliant machine. Queries are fetched immediately from Blue Dart's database, providing a seamless service for the client and his customers, and bringing the entire chain within his domain. The client may store this data in his database, providing him with an effective CRM tool.These e-Business tools, the first of their kind in the country, bring
increased
efficiencies
to
most
B2C,
B2B
and
C2C
transactions.
Both ShopTrackTM and PackTrackTM provide the following :
On-line, real-time status details of the waybill number
On-line, real-time status details of all the waybills linked to an order number
Results in either XML, TEXT or HTML formats
s JSP & ASP
MobileDartTM: MobileDartTM - WAP works on any mobile phone or device which s Wireless Application Protocol. Using MobileDart-WAP, the customer can check the current status of his shipments on-line by entering the waybill number. In the case of an undelivered shipment, he can choose to receive delivery details by email or SMS. The customer can also access the Location Finder which provides details about all locations service by Blue Dart, based on a pincode. Information about all the Service product offerings as well as the company is also available on the WAP site (wap.bluedart.com). This enables the customer to make a shipping decision on the run.MobileDartTM - SMS works on any mobile phone or device which s sending email over SMS (Short Messaging Service). This service provides two tracking features - current status of shipments forwarded, and automated intimation on delivery of the shipment. To know the current status of his shipment, all the customer has to do is to send a message to [email protected] followed by the waybill number. An intimation will be received by the customer as soon as the shipment is delivered.
The country's only express airline with a fleet of three Boeing 737s ensured that packages were flown to their destinations overnight. Another tremendous advantage was that the individual size of packages that could be carried multiplied manifold.
Retrieval of signed delivery records posed the industry's most intriguing problem. Blue Dart was quick to understand this requirement and put in place a 100% retrieval system.
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 bottomlines.
State-of-the-art Technology, indigenously developed, for Track and Trace, MIS, ERP, Customer Service, Space Control and Reservations.
Blue Dart Aviation, our express airline, to our time-definite morning deliveries through night freighter flight operations.
A countrywide Surface network to complement our air services.
Warehouses at 14 locations across the country as well as bonded warehouses at the 4 major metros of Kolkata, Delhi, Mumbai, and Chennai.
ISO 9001 countrywide certification by Lloyd's Quality Assurance for our entire operations, products and services.
Ecommerce B2B and B2C initiatives including partnering with some of the prime portals in the country.
Our Competitive Advantage lies in: Our vast and unparalleled Domestic Network: Linked by some of the most advanced communications systems and positioned to offer a consistent, , standardized quality of service.
Our Customs and Regulatory expertise A spectrum of services to provide customized solutions: .We are the only express carrier in the country today which offers an entire range of services that extend from a document to a charter-load of shipments. Our services are relentlessly monitored to deliver a net service level of 99.95%.
We have a dedicated team of specialists who provide the expertise for customs as well as regulatory clearances at all States within the country, to seamless service to the customer.
Our Technology: Designed to enhance the reliability of our operations and process efficiency, and add
value
to
the
customer
through
time
and
cost
savings.
Our Air Network: The only one of its kind in the country today, that is focused on carriage of packages as its prime business, rather than as a by-product of a enger airline. Our express airline is self-sustaining, with its own bonded warehouses, ground handling and maintenance capability.
Our financial credibility : Fitch Rating India Pvt. Ltd. has assigned the highest "Ind D-1+" (Ind D One Plus) rating
for
our
commercial
paper
programme
of
Rs.
15
crores.
Our Peopleforce: Committed, diverse and 4,010 strong, are our most valued asset. All our achievements have been possible because we have a team who believes in themselves and their company, a team with a winning attitude. We are a learning organization, we value self-development, and most of our managers are homegrown.
THE FEDEX SUPPLY CHAIN
A supply chain is a network of sub-suppliers, suppliers, internal operations, trade customers, retail customers, and end s. Supply chain management is a loop that starts with the customer and ends with the customer. It requires looking at your business as one continuous process that absorbs such traditionally distinct functions as forecasting, purchasing, manufacturing, distribution and sales, and marketing into a continuous flow of business interaction. Under this the functional ‘stove pipes’ of corporate activity are replaced by departments structured as a pipeline that stretches between a company’s suppliers and its customers.
Integrated supply chain management is a process-oriented, integrated approach to procuring, producing and delivering products and services to customers. ISCM has a broad scope that includes sub-suppliers, internal operations, trade customers, retail customers and end s. ISCM covers the management of material, information and funds flow.
Supply chain management is the logical progression of developments in logistics management. Physical distribution management integrated two functions, providing inventory-reduction benefits from the use of faster, more frequent and especially, more reliable transportation.
Second phase in SCM’s development, the logistics stage saw the addition of the manufacturing, procurement and order management functions. This was aided by electronic data interchange, worldwide communications, and the growing availability of computers to store data and perform analyses.
The third and current stage is the integrated supply chain management stage. To the lengthening chain of functions being integrated, suppliers at one end and customers at the
other have been added. This has become a seven-function supply chain, vastly more complex than the two-functions physical distribution chain. To handle this complexity, we rely on electronic data, electronic funds transfer, higher bandwidth communications, and computerized decision systems for planning and for execution. Training is a key component too.
The next phase of supply chain management, super supply chain management for want of a better term will incorporate more functions such as product development, marketing and customer service. It will be enabled by even more advanced communications, better and more -friendly computerized decision systems and increased training.
Factors shaping supply chain management From the many factors potentially involved,it is believed that six business and economic forces will most impact future supply chain management.These include the three external factors:consumer
demands,globalisation
and
information/communication.Three
additional topics that will be critical to future supply chain design:competition,regulation and environmental concerns.Though other factors,for example, organized labour and transportation technology may play a role they will be secondary in defining supply chain management’s future.
FedEx in India has five flights a week coming to its Mumbai gateway (no flights on weekends).These flights come from the eastern hub and the western hub of the FedEx corporation. In India the FedEx corporation’s activities are governed by the DGCA rules (which requires a minimum cooling period for 24 hours for unaccompanied goods on flights, quota restrictions on the movement of certain goods within the country, transshipment not allowed because of custom laws etc.) Using its alliance with Blue Dart, the compliance aspect is left to Blue Dart to fulfill.
FedEx purchases from suppliers in two primary ways: •
Centralised purchasing--- a process with contract/business agreement formats executed by supply chain specialists at headquarters for the various divisions within FedEx. Centralised purchasing is most often used for high dollar value goods and services.
•
Decentralised purchasing--- a process at regional and local levels throughout FedEx all over the world. Decentralised purchasing is generally used for readily consumable commodities of small dollar value.
If we look at the supply chain of Fed Ex in India we see that their suppliers are Indian Oil for providing fuel for its aircrafts which lands in Mumbai. Khambatta Associates for doing all the ground handling work Jinnah & Associates for custom clearance. Stationery ( memos,notepadsetc) are bought from local suppliers Advertising ,PR and direct marketing functions are outsourced to various agencies. Blue Dart handles collection,distribution ,transportation and logistics in the country for FedEx Software supplied by FedEx,USA.developed inhouse. The customers of FedEx in India are Leather exporters Garments exporters Brass exporters Marine products exporters Gems and jewellery exporters , and Other exporters of the top ten export items
Transportation and Logistics Management Transportation choices in the supply chain
Transportation is the linkage process in logistics and often consumes much of the resources provided to the logistics function. It once dominated the distribution activity but for most companies it is now integrated into an overall activity. There are three factors that need to be considered. Operational factors include customer, environmental, product and company characteristics. The choice of transport mode is influenced by load size, density, value, competitive necessity and cost structures. Channel strategy considerations include the identification of available channels and the interfaces within each channel.
Transportation with facilities creates time utility value in the supply chain. The extent of this will be part of the decision making process. Clearly, there are a number of options available: the decision on which one to use will be based upon a number of factors. Transportation also creates place utility value by delivering product to locations that are convenient for customers.
Transportation s for the largest resource commitment in the logistics activity, therefore its relative cost/benefit profile must be established within the context of the level of customer satisfaction that is being set as an objective. There are a number of interface areas and therefore decisions shared by transportation. These should be explored by first identifying the areas of flexibility and inflexibility of the decisions and most importantly that of the customer service objectives. The decisions influenced by transportation considerations include: Customer communications
Market coverage Sourcing decisions Processing/manufacturing Customer service decisions. There are five factors which should be considered in the choice of transportation
o Company characteristics and philosophy-- These are important and concern the company’s marketing, financial and operations strategies o Market structures-- are important considerations. There are two factors: competitive structure and the geographical structure or territorial considerations. In fiercely competitive markets delivery may be one of the key factors influencing customers selection of suppliers. o Product characteristics-- to be considered are weight, size and shape, robustness, shelf life, potential danger, value and special characteristics, which may require expensive handling services and equipments. o Customer characteristics-- have an impact on profitability. Often it is those characteristics which may influence delivery costs that are important as to whether or not a customer is profitable to the business. o Environmental issues-- can influence a transport mode decision in a number of ways. In its broadest scope environment can be taken to include government and its influence on transport policy.
The concept of trade-off possibilities and potential for overall costs is important within the transport decision. There are three that should be considered.
Horizontal Trade-offs--occur within and between the different transport modes, which could be selected to perform the same task, such as air versus sea, or road versus rail.
Vertical trade-offs--Occur where a change takes place in a transport activity and offers a greater benefit in another area of the logistics function or the organization, such as markedly improved productivity due to an infrastructure development. Lateral trade-offs--occur where transport costs can be weighted against lower costs in other areas. Using express freight services may increase the freight cost but reduce the need for distribution centers or high inventory building. FedEx combines people and technology to optimize cost and service. Their transportation
management
service
combines
sophisticated
information
technology with human resources to improve the inbound and outbound transportation processes of their customers. Their service simplifies carrier selection, improves logistics management, and offers cost savings opportunities. They streamline transportation management by providing a single point of for all of a customer's shipment and delivery needs. A team of dedicated coordinators is assigned to each . Clients order service via electronic data interchange, the Internet, phone, or fax. They identify the carrier that will provide the lowest cost and best service for a customer's shipment. Then, a coordinator alerts the selected carrier and dispatches a vehicle. The result is a simplified, cost-effective process for managing transportation and inventory carrying costs. Here's what your company can expect from their transportation management service:
•
Transportation Savings. As a result of their carrier network and superior technology, they offer transportation savings opportunities to their customers.
•
Discipline & Control. They identify delivery dates; then, they determine the right mode of transportation for each shipment. In addition, they audit carrier compliance to their customers' specifications.
•
Convenience. They audit your freight bills and allocate charges to the appropriate ing code within your organization. In addition, they offer the opportunity to reduce istration costs through electronic, paperless invoices.
•
Information. They capture complete data about your company's shipments and provide useful management reports to further improve your transportation process.
Integrated Logistics Increase inventory visibility and velocity with integrated logistics.They combine knowledge and technology to integrate transportation management service with: •
order management
•
fulfillment
•
kitting and parts sequencing
•
supply chain consulting and design
•
returns management
Their customers can benefit from improved operating efficiencies, increased flexibility, and improved inventory visibility and velocity.
e-Logistics The components of FedEx e-Logistics
(web enablement fulfillment, returns
management) can be implemented individually to address the specific needs of supply chains. They can also be configured in a number of ways to create an integrated solution that works hard to speed entry into the digital marketplace, enhance inventory visibility and velocity, and improve cutomer service and relationship management. From a simple channel to a complex supply chain. From small e-tailers to manufacturing suppliers. The flexible, scalable, and configurable FedEx e-Logistics
package can help you
compete.and win. Enablement he front-end of your e-commerce operation is a critical component of your online channel. Many companies choose an outside vendor for creating their web sites, only to find they deliver partially. Often, the firm is ultimately focused on the look-and-feel, brand-building aspects of the site, and ignores the potential for optimizing the customer’s experience and building loyalty. The Enablement component of FedEx e-Logistics includes: •
Customer Relationship Tools that can provide customer interaction histories. This valuable information can easily be transformed into powerful, personalized sales programs.
•
On-Line Inventory and Order Information — access that can tell customers if an item is out-of-stock and suggest an alternative.
•
24 x 7 Customer that can help close sales with customers. Current technologies include pop-up chat windows, e-mail, and Internet
•
voice solutions.
E-Fulfillment A sale is a promise. A well-run fulfillment operation is how you keep that promise. Internet operations that have withstood the test of time are the ones that have backed up superior front-end interfaces with equal — if not stronger — back-end fulfillment infrastructure. FedEx e-Logistics offers eFulfillment solutions that include: •
Distributed National Warehouse Network that can provide a fast, flexible, and cost-efficient alternative to company-operated warehouses.
•
Integrated Information Systems that can allow high-volume picking and packing with maximum speed accuracy.
•
Customer Service Networks that can ensure your customers have someone to talk to about their orders 24 hours a day, seven days a week.
•
Flexible and Scalable Structure, which means your solution can be adjusted to meet specific needs.
CUSTOMER SERVICE IN THE SUPPLY CHAIN
Efficient Consumer Response refers to the situation that makes the consumer the hero by providing better service to customers at lower cost, fewer stockouts and new products they want. Consumers will get a better deal overall. All this is done through control of information and product form the point of manufacturing to the point of sale, with the intent of eliminating waste and reducing cost cross an entire distribution pipeline. With ECR the entire pipeline is driven by scanned data at the point of sale. Replenishment orders are communicated via EDI to direct store delivery to retail distribution centers to wholesaler / distributor and to the manufacturers. This ensures that the right amount of product is delivered in a timely fashion, eliminating unnecessary inventory in the pipeline, eliminating stock outs and also eliminating the need for each pipeline participant to conduct its own forecast. In essence, ECR makes it possible for participants in a distribution pipeline to substitute information for inventory. The benefits to them are increased product velocity and the competitive benefits of significantly lower costs.
In Delhi, FedEx has a 24 hour call center (6285911) wherein the customers can call and make an order for pickup and delivery. FedEx assures a maximum 1 hour response time for pick up. The customer is expected to package the goods to be sent himself.
Also after the pick up has taken place, a one-hour time for doing the necessary paperwork is required.
Following this a maximum of 6 hours processing time is needed at the airport for bagging, tagging, foreign exchange remittance, security check, clearance, etc.
Thus keeping in mind the time for departure of flight and all this time required, FedEx works backward to ensure that the product is picked and delivered on time. For achieving this FedEx has a call cutoff time after which they stop taking calls for that particular day They have a office cut off time after which paper work by the office is not done. And they have at ramp cutoff time after which a package is not taken to the airport(this is the time required to balance the aircraft and to secure the goods to it.) However the adjustments to these rules can be made depending on the proximity of the customers to the office or his volunteering to drop off the package at the airport, etc., FedEx has segmented its customers by By analysing large scale databases available with Blue Dart and the various export promotion councils. By segmenting Businesses based on their industry of operation and design of their supply Chains. On the basis of the customer service needs in the Asia Pacific region and the inputs required for it. FedEx has certain service quality standards and levels laid\d down and these are strictly adhered to. These are the net service levels(NSL) and the service quality
index.(SQI). Exceptions to this rule are followed only in the case of acts of God / nature beyond the control of man. The various “ perfect order” busters are:
right day late wrong day late partial delivery inner content damaged goods lost, etc.
Depending on the gravity of the act, certain points of non- conformance are deducted for each of these busters. Every unit of FedEx has been allowed a certain maximum tolerance limit for non-conformance within a stipulated time period beyond which the unit is penalized for non-conformance.
FedEx holds internal meets to measure and constantly upgrade its service levels. For this it has appointed a customer advisory board that keeps receiving from its customers. Also FedEx sometimes out sources its customer’s satisfaction survey to an agency or to an anonymous freelancer to carry out the survey without biasing the customers towards the FedEx name.
The FedEx Transportation management service combines sophisticated information management technology with human resources to improve the outbound and inbound transportation processes of t s customers. Their service simplifies carrier selection, improves logistics management and offers cost savings opportunities. They streamline
transportation management by providing a single point of for all its customer’s shipment and delivery needs. A team of dedicated coordinators is assigned to each . Clients order service via EDI, the internet, phone or Fax.. The FedEx identifies the carrier that will provide the lowest cost and the best service for a customer’s shipment. Then a coordinator alerts the selected carrier and dispatches a vehicle. The result is a simplified, cost effective process for managing transportation and inventory carrying costs. FedEx audits carrier compliance to their customer’s specification.
Returns Management Many companies are in denial about returns. Some studies show that return rates can be as high as one out of three products in some industries, and that can radically impact the bottom line. Commitments to customer service and sound inventory management require a plan for retrieving, monitoring, and processing returns with minimal customer inconvenience and inventory depreciation. FedEx e-Logistics
offers solutions that
include •
Automated
Returns
Shipping
Labels
with
a
bar-coded
Returns
Management Authorization (RMA) number for automated sorting of returned packages. •
Online Tracking for real-time monitoring of the returned shipment’s location.
•
Multiple options for returns handling flexibility, including: pickup at customer location or drop-off at multiple access points, and courier generated shipping labels or customer-generated labels.
Customers are demanding more from you. And key stakeholders are counting on you to protect your company’s financial and brand equity.
Information Technology: FedEx is now one of the best positioned companies to assist its The tracking technologies pioneered by FedEx have dramatically improved the amount of data that can be transferred and the success at which data are accurately collected. These developments--- creating the ability to get real time about the movement of goods from raw materials stage to the point of final sale--- have served as a critical foundation for the implementation of ‘just in time’ manufacturing, supply chain management and other business models that address the productivity challenges businesses have faced for years Consulting We offer both strategic and tactical supply chain consulting service. With a staff of experts in supply chain analysis and design, we offer supply chain network and process design consulting services, backed by tactical and operational services. The right mix of strategic and tactical service can lower costs and improve service for our customers. Our consulting service begins with an analysis of current supply chain processes. We define the scope of a customer's needs, map the customer's existing supply chain, and analyze current supply chain data. Next, we compare existing supply chain performance against available industry data. Benchmarking data helps us model various supply chain scenarios and identify opportunities for improvement. Finally, we help customers understand alternatives and suggest an optimal supply chain solution.
LEARNINGS
1) One of the most important lessons learnt while doing this course in general and the real life project in particular is that for any business, customer is the most important component and the very reason for existence for the business. But most companies tend to forget it. Proper Supply Chain practices help in serving the customer better and more efficiently with huge cost savings for the company which ultimately translate into operational profit for the company.
2) There is a lot of difference between the way a world class company like FedEx operates and the way other companies operate. Their processes are more or less directed towards customer satisfaction and the company goes out of the way in trying to satisfy its customer needs wherever it is necessary.
3) FedEx undertakes Customer Relationship Management programmes and it pays back because they have got very loyal customers which give them business continuously year after year. All through this project we have learned that this is one of the most important things for companies to follow because as someone rightly said that the cost of acquiring one customer is much more than the cost of retaining a customer. So this saying was reinforced in our minds looking at the world-class customer service levels that FedEx provides.
4) Just keeping up to its promises is not enough for a company. It must constantly innovate and develop new products and means to satisfy its customers. To be ahead in this dimension FedEx has employed a strong force of 5000 full time
software developers. Also it constantly s through associating itself with occasions that are synchronous with its mission i.e. The Formula One Racing
SUBMITTED TO PROF : MANMOHAN BAKAYA
TABLE OF CONTENTS
Sl No. TOPIC
PAGE
NO
Acknowledgement 1)
About FedEx
2)
Blue Dart
3)
The FedEx Supplt Chain
4)
Transportation And Logistics Management
5)
Customer Service in the Supply Chain Learnings
ACKNOWLEDGEMENT
We are very grateful to Prof. Manmohan Bakaya, our Supply Chain Management Professor for giving us the guidance and help in grasping the theoretical concepts of the subject and helping us in applying them practically in the Real Life Project at FedEx corporation, India.
We are also indebted to Mr. Hemanth D. P., Country Manager – Sales, FedEx, for taking time out of his busy schedule, patiently answering our queries and helping us in understanding the supply chain management processes and practices followed at FedExIndia.
FedEx Corporation provides integrated transportation, information, and logistics solutions through a powerful family of companies that operate independently yet compete collectively. The FedEx Family:
FedEx Corporation, a $20-billion global enterprise
FedEx Express, the world's largest express transportation company
FedEx Ground, North America's second-largest provider of ground small-package delivery offering a new service -- FedEx Home Delivery
FedEx Freight, a leading provider of regional LTL freight services
FedEx Custom Critical, the world's largest surface expedited carrier
FedEx Trade Networks, a high-tech customs broker and trade facilitator
Vision FedEx Supply Chain Services will be an acknowledged world leader in global integrated logistics management, supply chain solutions and time-definite delivery. Our motivated associates will forge mutually profitable partnerships with our customers using world-class technology and business practices.
In India FedEx follows a V3 strategy:
VISION ---- To connect 95% of the world GDP in 24-48 hours by continuously expanding our international flight network. The express transportation of goods from one corner of the globe to another has become a major imperative in international commerce. Achieving that goal is what our vision network is all about.
VALUE --- To use short and long-haul surface transportation integrated with our vast air operations. One of the greatest advantage of value strategy is that it helps us use our assets more efficiently and provide more value to our customer in of cost.
VIRTUAL --- Virtual strategy is to extend to extend our electronic reach to all our express customers, enabling them to electronically access markets with little regard for distance and time. Make FedEx a virtual company, easily accessible to all our customers and their customers and their customers through system enhancements
Mission •
Achieve success with highly trained and motivated associates.
•
Design, develop, and apply innovative time-definite, global logistics solutions which improve our customers' competitive positions and exceed their expectations.
•
Aggressively pursue business opportunities to meet and exceed our earnings and growth objectives.
Values The culture at FedEx is defined by •
The effectiveness of their communications.
•
The empowerment of their people for peak performance.
•
Employee pride in performance.
•
A safe and rewarding work environment.
•
Their mutually rewarding partnerships with customers and suppliers.
•
Understanding and valuing diversity.
•
Focus on our customers and a ion for service excellence.
•
Conducting business to the highest ethical and professional standards.
FedEx supply chain services FedEx Supply Chain Services designs, develops, and applies transportation management and e-Logistics solutions to improve inventory visibility, velocity, and speed to market. Their transportation management service improves transportation processes and can
increase efficiencies. Their e-Logistics group helps customers compete in today's highly competitive e-Business channels. The FedEx network is woven around the complex structure of our country through a HUB and SPOKE system allowing valued customers flexibility for their choice of routing vendor resourcement, primary warehousing, distribution, secondary warehousing so as to ensure minimum inventory holding cost providing the customers with a cutting edge over its competitors.
BLUE DART About Blue Dart Blue Dart Express Ltd., India's premier integrated air express carrier and logisticsservices provider, has been one of the largest Global Service Participants of Federal Express Corporation, the world's leading air express transportation company, since 1984. From 1984, Blue Dart represented all FedEx interests, under a principal to principal arrangement, in India. Blue Dart-Federal Express Relationship: Blue Dart and FedEx have determined a new agreement in October 1997 to coincide with the introduction by FedEx of its first round-the-world flight touching Mumbai, as well as its direct entry into the country.Under this agreement, Blue Dart is the exclusive provider of transportation, pickup and delivery, customs and related services for FedEx's International Priority shipments, as well as the sole preferred consolidator of FedEx services.The Alliance seeks to leverage the strengths of both organisations for mutual benefit. While FedEx focuses solely on the development of its international business, with its link to the vibrant economy of the Sub-Continent, Blue Dart continues to consolidate its dominant domestic position, and service and enhance its international customer base as a licensee of FedEx, to FedEx's international growth. The new agreement is designed to stimulate the development of India's international express market by combining the competitive advantages of FedEx's global reach with Blue Dart's domestic coverage to increase the market share of both companies.
As a technology leader in the business of supply-chain management in the country, Blue Dart Express Limited recognised the far-reaching scope of the internet in 1996, and has been exploring web-based solutions to extend the range of services available to its customers and integrate them into its core products. It has evolved an e-strategy.This estrategy encomes E-Solutions to deliver additional process efficiencies to business by allowing them access to Blue Dart's e-shipping tools and integration with its e-business
tools. An individual solution is available for each business, big or small, transacting off the internet or on the internet, and ranging from a stand-alone to a fully integrated one The basic tracking solution will enable Blue Dart's customers to track their shipments, through single or multiple waybills, on-line. Customers can check the status of their shipments using a waybill number or a reference number. A mail-based solution will allow the customers to query status of their shipments using e-mail.ed customers of Blue Dart can make advanced queries on the status of their shipments, and can keep track of them for up to 45 days on-line. They can filter their queries by date range, origin, destination and service, and sort the results on-line. ed customers can the entire waybill tracking data - schedule the , and select the frequency and the data to be ed. These customers can also generate and various reports customised to meet their individual needs.
E-Shipping Tools These tools are convenient aids to your shipping management processes:
TrackDartTM: Track the status of your shipment by using the TrackDart TM box, which is available on the upper left of every page on our website. You may track shipments sent on Blue Dart services within India or to Nepal, Bangladesh or Bhutan. You may also track international shipments sent on Federal Express to/from India. Shipments under single or multiple waybills may be tracked using either the waybill number or the reference number given at the time of shipping.
MailDartTM
:
You may either use the Waybill Number or the Reference Number to track the status of your shipments. This feature helps you to track Single or Multiple shipments. To track the status of your shipments by Waybill Number enter the waybill numbers
either in `Subject' or in the text of the mail, each Waybill number seperated by a comma. To track the status of your shipments by Reference/Order Number. Enter the reference/order numbers in `Subject' of the mail, each reference or order number seperated by a comma. Another powerful feature in the MailDart is the Intimate Me Option. Incase you need to know the status of the shipment upon delivery you only have to send a mail to [email protected] with Single or Multiple Waybill numbers in `Subject' or in the text of the mail, each Waybill number seperated by a comma.You will receive an automated reply giving you a Status Update of the shipment(s) upon delivery.
LocationFinder: Find the service locations of Blue Dart and the Blue Dart counter or franchisee located closest to you. You may search by city, street name or pin code to find one of over 11,558 locations serviced in India, or in 211 countries worldwide. TransitTimeFinder: Check the transit times for your domestic and international shipments, and for the various services offered by Blue Dart to help you identify the service that meets your requirements.
PriceFinder: Calculate your shipping costs for your domestic and international shipments by using our Price Finder. WaybillGeneration:
:
The Online Waybill generation tool helps the credit customer to generate a waybill for a consignment. The has to enter the details of the consignment and the waybill will be generated in a PDF format.Another powerful feature in Waybill Generation is the Address Book. This feature comes with the online waybill generation module. The
Address Book can be accessed by all credit customers of Blue Dart. You can create a new address list and modify or delete the addresses at any point of time.
COSMATII: COSMAT II (Computerised On-line System for Management, ing and Tracking) is a complete ERP system indigenously developed by Blue Dart. It interfaces with the Human Resources Management, Financial Management, Purchase, Sales Monitoring Executive Information and CRM systems.COSMAT II was constructed in 4 major modules to cover all the complex processes of the entire organisation. To set up this large application, various media were used (leased lines, VSAT, Microwave links) on our very own WAN for effective data transfer between all locations. Barcodes and Scanners were used for speedier operations. COSMAT II enables easy access to the database over a wide area network, and ensures reliable information and even in areas that are afflicted by poor telecom services. All the powerful web-based tools, including TrackDart, interface with COSMAT II to provide real-time response to customer requirements. COSMAT II is an evolving system, upgraded continuously, to deliver value to the customer and make operations easier, more secure and manageable.
SMARTTM
:
SMART (Space Management Allocation Reservation and Tracking), is an inhouse developed state-of-the-art technology system, which allows real-time space and revenue management on the Blue Dart Aviation network. It ensures that the aircraft is filled profitably, and that all customers with space confirmed on the aircraft have the assurance that their packages would travel.SMART dovetails into COSMAT II leveraging on the infrastructural strength of the system. This ensures that packages booked on SMART are picked, moved on the network and tracked until delivery.SMART is built on Oracle technologies, with the database housed on Oracle 8i (Release 2). This database is hosted on a Sun Enterprise 3500 server, a fully redundant, zero reboot system.
ShipDartTM: ShipDart is a Blue Dart proprietary solution especially created for the convenience of regular customers. ShipDart enables control over the entire shipping and tracking processes. ShipDart needs to be installed at the customers premises in order to interface with their own system for the pre-shipping and post-tracking activities, thereby playing a major role in bridging the existing gap in any package movement. A set of Master Files which controls the ShipDart system has to be ed from the site.
CustomisedSolutions: Blue Dart has delivered customised solutions to various industry segments such as Finance, Pharmaceutical, Consumer Durables and Information Technology, among others. These solutions integrate closely with the legacy systems of the business and enable them to accelerate their processes and provide them with effective MIS. E-Business Tools These tools may be efficiently integrated with your systems to provide you with a convenient and cost-effective solution to your shipping requirements. Blue Dart has been the only Indian Air Express Company that has invested extensively in Technology infrastructure to create differentiated delivery capabilities, quality services and customised solutions for the customer.
InternetDartTM: Track on-line the status update of your shipments sent over the last 45 days. You may track by a range of dates, origin, destination, delivered or undelivered shipments or service used, on-line. You may generate a series of reports, at a pre-determined frequency, and sort the results on-line.For on-line queries and reports: on providing the input of
range of pickup dates, origin, destination and services used, you can check any of the following, on-line:
• Waybill details and status of all shipments sent during a given period • Details of all delivered shipments • Status of all undelivered shipments • Details of all RTO (Return to Origin) shipments • Details of all Re-directed shipments ShopTrackTM: ShopTrackTM is an API (Applications Program Interface) designed specifically to and enhance the services provided by a portal or any e-business. Research indicated that, while etailers provided an entire gamut of product services and information, eshoppers invariably had to leave the website or use manual means to track their purchases. The result - less eyeball time on their pages. Portals that sought to resolve this dilemma were faced with the unattractive alternative of database maintenance and call centres. ShopTrackTM provides an effortless, customised solution. Customers no longer have to leave the Portal site to track their purchases. They just need to enter the order-number of their purchase and the shipping and delivery details are displayed on the same page. The Portal can decide how to display the data elements and may even store them in their database. ShopTrackTM is another time and cost-saving tool created to arm Blue Dart's customers with a competitive edge. PackTrackTMs: PackTrackTM is an API (Applications Program Interface) designed for any client involved in logistics, distribution and inventory control. It has been designed to streamline and integrate shipping processes. PackTrackTM can be integrated into the client's systems and enables him to keep track of the entire distribution status of all his customers. It is simple,
easy-to-use and can be easily integrated with any windows-based application or any Java compliant machine. Queries are fetched immediately from Blue Dart's database, providing a seamless service for the client and his customers, and bringing the entire chain within his domain. The client may store this data in his database, providing him with an effective CRM tool.These e-Business tools, the first of their kind in the country, bring
increased
efficiencies
to
most
B2C,
B2B
and
C2C
transactions.
Both ShopTrackTM and PackTrackTM provide the following :
On-line, real-time status details of the waybill number
On-line, real-time status details of all the waybills linked to an order number
Results in either XML, TEXT or HTML formats
s JSP & ASP
MobileDartTM: MobileDartTM - WAP works on any mobile phone or device which s Wireless Application Protocol. Using MobileDart-WAP, the customer can check the current status of his shipments on-line by entering the waybill number. In the case of an undelivered shipment, he can choose to receive delivery details by email or SMS. The customer can also access the Location Finder which provides details about all locations service by Blue Dart, based on a pincode. Information about all the Service product offerings as well as the company is also available on the WAP site (wap.bluedart.com). This enables the customer to make a shipping decision on the run.MobileDartTM - SMS works on any mobile phone or device which s sending email over SMS (Short Messaging Service). This service provides two tracking features - current status of shipments forwarded, and automated intimation on delivery of the shipment. To know the current status of his shipment, all the customer has to do is to send a message to [email protected] followed by the waybill number. An intimation will be received by the customer as soon as the shipment is delivered.
The country's only express airline with a fleet of three Boeing 737s ensured that packages were flown to their destinations overnight. Another tremendous advantage was that the individual size of packages that could be carried multiplied manifold.
Retrieval of signed delivery records posed the industry's most intriguing problem. Blue Dart was quick to understand this requirement and put in place a 100% retrieval system.
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 bottomlines.
State-of-the-art Technology, indigenously developed, for Track and Trace, MIS, ERP, Customer Service, Space Control and Reservations.
Blue Dart Aviation, our express airline, to our time-definite morning deliveries through night freighter flight operations.
A countrywide Surface network to complement our air services.
Warehouses at 14 locations across the country as well as bonded warehouses at the 4 major metros of Kolkata, Delhi, Mumbai, and Chennai.
ISO 9001 countrywide certification by Lloyd's Quality Assurance for our entire operations, products and services.
Ecommerce B2B and B2C initiatives including partnering with some of the prime portals in the country.
Our Competitive Advantage lies in: Our vast and unparalleled Domestic Network: Linked by some of the most advanced communications systems and positioned to offer a consistent, , standardized quality of service.
Our Customs and Regulatory expertise A spectrum of services to provide customized solutions: .We are the only express carrier in the country today which offers an entire range of services that extend from a document to a charter-load of shipments. Our services are relentlessly monitored to deliver a net service level of 99.95%.
We have a dedicated team of specialists who provide the expertise for customs as well as regulatory clearances at all States within the country, to seamless service to the customer.
Our Technology: Designed to enhance the reliability of our operations and process efficiency, and add
value
to
the
customer
through
time
and
cost
savings.
Our Air Network: The only one of its kind in the country today, that is focused on carriage of packages as its prime business, rather than as a by-product of a enger airline. Our express airline is self-sustaining, with its own bonded warehouses, ground handling and maintenance capability.
Our financial credibility : Fitch Rating India Pvt. Ltd. has assigned the highest "Ind D-1+" (Ind D One Plus) rating
for
our
commercial
paper
programme
of
Rs.
15
crores.
Our Peopleforce: Committed, diverse and 4,010 strong, are our most valued asset. All our achievements have been possible because we have a team who believes in themselves and their company, a team with a winning attitude. We are a learning organization, we value self-development, and most of our managers are homegrown.
THE FEDEX SUPPLY CHAIN
A supply chain is a network of sub-suppliers, suppliers, internal operations, trade customers, retail customers, and end s. Supply chain management is a loop that starts with the customer and ends with the customer. It requires looking at your business as one continuous process that absorbs such traditionally distinct functions as forecasting, purchasing, manufacturing, distribution and sales, and marketing into a continuous flow of business interaction. Under this the functional ‘stove pipes’ of corporate activity are replaced by departments structured as a pipeline that stretches between a company’s suppliers and its customers.
Integrated supply chain management is a process-oriented, integrated approach to procuring, producing and delivering products and services to customers. ISCM has a broad scope that includes sub-suppliers, internal operations, trade customers, retail customers and end s. ISCM covers the management of material, information and funds flow.
Supply chain management is the logical progression of developments in logistics management. Physical distribution management integrated two functions, providing inventory-reduction benefits from the use of faster, more frequent and especially, more reliable transportation.
Second phase in SCM’s development, the logistics stage saw the addition of the manufacturing, procurement and order management functions. This was aided by electronic data interchange, worldwide communications, and the growing availability of computers to store data and perform analyses.
The third and current stage is the integrated supply chain management stage. To the lengthening chain of functions being integrated, suppliers at one end and customers at the
other have been added. This has become a seven-function supply chain, vastly more complex than the two-functions physical distribution chain. To handle this complexity, we rely on electronic data, electronic funds transfer, higher bandwidth communications, and computerized decision systems for planning and for execution. Training is a key component too.
The next phase of supply chain management, super supply chain management for want of a better term will incorporate more functions such as product development, marketing and customer service. It will be enabled by even more advanced communications, better and more -friendly computerized decision systems and increased training.
Factors shaping supply chain management From the many factors potentially involved,it is believed that six business and economic forces will most impact future supply chain management.These include the three external factors:consumer
demands,globalisation
and
information/communication.Three
additional topics that will be critical to future supply chain design:competition,regulation and environmental concerns.Though other factors,for example, organized labour and transportation technology may play a role they will be secondary in defining supply chain management’s future.
FedEx in India has five flights a week coming to its Mumbai gateway (no flights on weekends).These flights come from the eastern hub and the western hub of the FedEx corporation. In India the FedEx corporation’s activities are governed by the DGCA rules (which requires a minimum cooling period for 24 hours for unaccompanied goods on flights, quota restrictions on the movement of certain goods within the country, transshipment not allowed because of custom laws etc.) Using its alliance with Blue Dart, the compliance aspect is left to Blue Dart to fulfill.
FedEx purchases from suppliers in two primary ways: •
Centralised purchasing--- a process with contract/business agreement formats executed by supply chain specialists at headquarters for the various divisions within FedEx. Centralised purchasing is most often used for high dollar value goods and services.
•
Decentralised purchasing--- a process at regional and local levels throughout FedEx all over the world. Decentralised purchasing is generally used for readily consumable commodities of small dollar value.
If we look at the supply chain of Fed Ex in India we see that their suppliers are Indian Oil for providing fuel for its aircrafts which lands in Mumbai. Khambatta Associates for doing all the ground handling work Jinnah & Associates for custom clearance. Stationery ( memos,notepadsetc) are bought from local suppliers Advertising ,PR and direct marketing functions are outsourced to various agencies. Blue Dart handles collection,distribution ,transportation and logistics in the country for FedEx Software supplied by FedEx,USA.developed inhouse. The customers of FedEx in India are Leather exporters Garments exporters Brass exporters Marine products exporters Gems and jewellery exporters , and Other exporters of the top ten export items
Transportation and Logistics Management Transportation choices in the supply chain
Transportation is the linkage process in logistics and often consumes much of the resources provided to the logistics function. It once dominated the distribution activity but for most companies it is now integrated into an overall activity. There are three factors that need to be considered. Operational factors include customer, environmental, product and company characteristics. The choice of transport mode is influenced by load size, density, value, competitive necessity and cost structures. Channel strategy considerations include the identification of available channels and the interfaces within each channel.
Transportation with facilities creates time utility value in the supply chain. The extent of this will be part of the decision making process. Clearly, there are a number of options available: the decision on which one to use will be based upon a number of factors. Transportation also creates place utility value by delivering product to locations that are convenient for customers.
Transportation s for the largest resource commitment in the logistics activity, therefore its relative cost/benefit profile must be established within the context of the level of customer satisfaction that is being set as an objective. There are a number of interface areas and therefore decisions shared by transportation. These should be explored by first identifying the areas of flexibility and inflexibility of the decisions and most importantly that of the customer service objectives. The decisions influenced by transportation considerations include: Customer communications
Market coverage Sourcing decisions Processing/manufacturing Customer service decisions. There are five factors which should be considered in the choice of transportation
o Company characteristics and philosophy-- These are important and concern the company’s marketing, financial and operations strategies o Market structures-- are important considerations. There are two factors: competitive structure and the geographical structure or territorial considerations. In fiercely competitive markets delivery may be one of the key factors influencing customers selection of suppliers. o Product characteristics-- to be considered are weight, size and shape, robustness, shelf life, potential danger, value and special characteristics, which may require expensive handling services and equipments. o Customer characteristics-- have an impact on profitability. Often it is those characteristics which may influence delivery costs that are important as to whether or not a customer is profitable to the business. o Environmental issues-- can influence a transport mode decision in a number of ways. In its broadest scope environment can be taken to include government and its influence on transport policy.
The concept of trade-off possibilities and potential for overall costs is important within the transport decision. There are three that should be considered.
Horizontal Trade-offs--occur within and between the different transport modes, which could be selected to perform the same task, such as air versus sea, or road versus rail.
Vertical trade-offs--Occur where a change takes place in a transport activity and offers a greater benefit in another area of the logistics function or the organization, such as markedly improved productivity due to an infrastructure development. Lateral trade-offs--occur where transport costs can be weighted against lower costs in other areas. Using express freight services may increase the freight cost but reduce the need for distribution centers or high inventory building. FedEx combines people and technology to optimize cost and service. Their transportation
management
service
combines
sophisticated
information
technology with human resources to improve the inbound and outbound transportation processes of their customers. Their service simplifies carrier selection, improves logistics management, and offers cost savings opportunities. They streamline transportation management by providing a single point of for all of a customer's shipment and delivery needs. A team of dedicated coordinators is assigned to each . Clients order service via electronic data interchange, the Internet, phone, or fax. They identify the carrier that will provide the lowest cost and best service for a customer's shipment. Then, a coordinator alerts the selected carrier and dispatches a vehicle. The result is a simplified, cost-effective process for managing transportation and inventory carrying costs. Here's what your company can expect from their transportation management service:
•
Transportation Savings. As a result of their carrier network and superior technology, they offer transportation savings opportunities to their customers.
•
Discipline & Control. They identify delivery dates; then, they determine the right mode of transportation for each shipment. In addition, they audit carrier compliance to their customers' specifications.
•
Convenience. They audit your freight bills and allocate charges to the appropriate ing code within your organization. In addition, they offer the opportunity to reduce istration costs through electronic, paperless invoices.
•
Information. They capture complete data about your company's shipments and provide useful management reports to further improve your transportation process.
Integrated Logistics Increase inventory visibility and velocity with integrated logistics.They combine knowledge and technology to integrate transportation management service with: •
order management
•
fulfillment
•
kitting and parts sequencing
•
supply chain consulting and design
•
returns management
Their customers can benefit from improved operating efficiencies, increased flexibility, and improved inventory visibility and velocity.
e-Logistics The components of FedEx e-Logistics
(web enablement fulfillment, returns
management) can be implemented individually to address the specific needs of supply chains. They can also be configured in a number of ways to create an integrated solution that works hard to speed entry into the digital marketplace, enhance inventory visibility and velocity, and improve cutomer service and relationship management. From a simple channel to a complex supply chain. From small e-tailers to manufacturing suppliers. The flexible, scalable, and configurable FedEx e-Logistics
package can help you
compete.and win. Enablement he front-end of your e-commerce operation is a critical component of your online channel. Many companies choose an outside vendor for creating their web sites, only to find they deliver partially. Often, the firm is ultimately focused on the look-and-feel, brand-building aspects of the site, and ignores the potential for optimizing the customer’s experience and building loyalty. The Enablement component of FedEx e-Logistics includes: •
Customer Relationship Tools that can provide customer interaction histories. This valuable information can easily be transformed into powerful, personalized sales programs.
•
On-Line Inventory and Order Information — access that can tell customers if an item is out-of-stock and suggest an alternative.
•
24 x 7 Customer that can help close sales with customers. Current technologies include pop-up chat windows, e-mail, and Internet
•
voice solutions.
E-Fulfillment A sale is a promise. A well-run fulfillment operation is how you keep that promise. Internet operations that have withstood the test of time are the ones that have backed up superior front-end interfaces with equal — if not stronger — back-end fulfillment infrastructure. FedEx e-Logistics offers eFulfillment solutions that include: •
Distributed National Warehouse Network that can provide a fast, flexible, and cost-efficient alternative to company-operated warehouses.
•
Integrated Information Systems that can allow high-volume picking and packing with maximum speed accuracy.
•
Customer Service Networks that can ensure your customers have someone to talk to about their orders 24 hours a day, seven days a week.
•
Flexible and Scalable Structure, which means your solution can be adjusted to meet specific needs.
CUSTOMER SERVICE IN THE SUPPLY CHAIN
Efficient Consumer Response refers to the situation that makes the consumer the hero by providing better service to customers at lower cost, fewer stockouts and new products they want. Consumers will get a better deal overall. All this is done through control of information and product form the point of manufacturing to the point of sale, with the intent of eliminating waste and reducing cost cross an entire distribution pipeline. With ECR the entire pipeline is driven by scanned data at the point of sale. Replenishment orders are communicated via EDI to direct store delivery to retail distribution centers to wholesaler / distributor and to the manufacturers. This ensures that the right amount of product is delivered in a timely fashion, eliminating unnecessary inventory in the pipeline, eliminating stock outs and also eliminating the need for each pipeline participant to conduct its own forecast. In essence, ECR makes it possible for participants in a distribution pipeline to substitute information for inventory. The benefits to them are increased product velocity and the competitive benefits of significantly lower costs.
In Delhi, FedEx has a 24 hour call center (6285911) wherein the customers can call and make an order for pickup and delivery. FedEx assures a maximum 1 hour response time for pick up. The customer is expected to package the goods to be sent himself.
Also after the pick up has taken place, a one-hour time for doing the necessary paperwork is required.
Following this a maximum of 6 hours processing time is needed at the airport for bagging, tagging, foreign exchange remittance, security check, clearance, etc.
Thus keeping in mind the time for departure of flight and all this time required, FedEx works backward to ensure that the product is picked and delivered on time. For achieving this FedEx has a call cutoff time after which they stop taking calls for that particular day They have a office cut off time after which paper work by the office is not done. And they have at ramp cutoff time after which a package is not taken to the airport(this is the time required to balance the aircraft and to secure the goods to it.) However the adjustments to these rules can be made depending on the proximity of the customers to the office or his volunteering to drop off the package at the airport, etc., FedEx has segmented its customers by By analysing large scale databases available with Blue Dart and the various export promotion councils. By segmenting Businesses based on their industry of operation and design of their supply Chains. On the basis of the customer service needs in the Asia Pacific region and the inputs required for it. FedEx has certain service quality standards and levels laid\d down and these are strictly adhered to. These are the net service levels(NSL) and the service quality
index.(SQI). Exceptions to this rule are followed only in the case of acts of God / nature beyond the control of man. The various “ perfect order” busters are:
right day late wrong day late partial delivery inner content damaged goods lost, etc.
Depending on the gravity of the act, certain points of non- conformance are deducted for each of these busters. Every unit of FedEx has been allowed a certain maximum tolerance limit for non-conformance within a stipulated time period beyond which the unit is penalized for non-conformance.
FedEx holds internal meets to measure and constantly upgrade its service levels. For this it has appointed a customer advisory board that keeps receiving from its customers. Also FedEx sometimes out sources its customer’s satisfaction survey to an agency or to an anonymous freelancer to carry out the survey without biasing the customers towards the FedEx name.
The FedEx Transportation management service combines sophisticated information management technology with human resources to improve the outbound and inbound transportation processes of t s customers. Their service simplifies carrier selection, improves logistics management and offers cost savings opportunities. They streamline
transportation management by providing a single point of for all its customer’s shipment and delivery needs. A team of dedicated coordinators is assigned to each . Clients order service via EDI, the internet, phone or Fax.. The FedEx identifies the carrier that will provide the lowest cost and the best service for a customer’s shipment. Then a coordinator alerts the selected carrier and dispatches a vehicle. The result is a simplified, cost effective process for managing transportation and inventory carrying costs. FedEx audits carrier compliance to their customer’s specification.
Returns Management Many companies are in denial about returns. Some studies show that return rates can be as high as one out of three products in some industries, and that can radically impact the bottom line. Commitments to customer service and sound inventory management require a plan for retrieving, monitoring, and processing returns with minimal customer inconvenience and inventory depreciation. FedEx e-Logistics
offers solutions that
include •
Automated
Returns
Shipping
Labels
with
a
bar-coded
Returns
Management Authorization (RMA) number for automated sorting of returned packages. •
Online Tracking for real-time monitoring of the returned shipment’s location.
•
Multiple options for returns handling flexibility, including: pickup at customer location or drop-off at multiple access points, and courier generated shipping labels or customer-generated labels.
Customers are demanding more from you. And key stakeholders are counting on you to protect your company’s financial and brand equity.
Information Technology: FedEx is now one of the best positioned companies to assist its The tracking technologies pioneered by FedEx have dramatically improved the amount of data that can be transferred and the success at which data are accurately collected. These developments--- creating the ability to get real time about the movement of goods from raw materials stage to the point of final sale--- have served as a critical foundation for the implementation of ‘just in time’ manufacturing, supply chain management and other business models that address the productivity challenges businesses have faced for years Consulting We offer both strategic and tactical supply chain consulting service. With a staff of experts in supply chain analysis and design, we offer supply chain network and process design consulting services, backed by tactical and operational services. The right mix of strategic and tactical service can lower costs and improve service for our customers. Our consulting service begins with an analysis of current supply chain processes. We define the scope of a customer's needs, map the customer's existing supply chain, and analyze current supply chain data. Next, we compare existing supply chain performance against available industry data. Benchmarking data helps us model various supply chain scenarios and identify opportunities for improvement. Finally, we help customers understand alternatives and suggest an optimal supply chain solution.
LEARNINGS
1) One of the most important lessons learnt while doing this course in general and the real life project in particular is that for any business, customer is the most important component and the very reason for existence for the business. But most companies tend to forget it. Proper Supply Chain practices help in serving the customer better and more efficiently with huge cost savings for the company which ultimately translate into operational profit for the company.
2) There is a lot of difference between the way a world class company like FedEx operates and the way other companies operate. Their processes are more or less directed towards customer satisfaction and the company goes out of the way in trying to satisfy its customer needs wherever it is necessary.
3) FedEx undertakes Customer Relationship Management programmes and it pays back because they have got very loyal customers which give them business continuously year after year. All through this project we have learned that this is one of the most important things for companies to follow because as someone rightly said that the cost of acquiring one customer is much more than the cost of retaining a customer. So this saying was reinforced in our minds looking at the world-class customer service levels that FedEx provides.
4) Just keeping up to its promises is not enough for a company. It must constantly innovate and develop new products and means to satisfy its customers. To be ahead in this dimension FedEx has employed a strong force of 5000 full time
software developers. Also it constantly s through associating itself with occasions that are synchronous with its mission i.e. The Formula One Racing
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