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upply chain management in

courier industry
SUPPLY CHAIN MANAGEMENT:
A supply chain is a network of sub-suppliers, suppliers, internal operations, trade
customers, retail customers, and end users. 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 companys 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 users. 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 SCMs 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 support 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
user-friendly computerized decision support systems and increased training.

DESIGN OF 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

managementsfuture.

COURIER INDUSTRIES:
Couriers are basically a service for sending money or goods at some extra cost. It involves a
person or a company engaged in transporting, dispatching and distributing letters, parcels and

mails. In a rather layman term, it can be said that, compared to normal mail service, a courier
possess many added features. A courier is much faster, safer and secured than ordinary mail.
It is a specialized service with authenticated signatures. It has tracking service with each
service being treated as a specific individual case. Dedicated timely deliverance is its primary
hallmark.
These features do cost a bit extra but with so many features available, the cost gets leveraged.
The courier industry specializes in time-definite, reliable transportation services for
documents, packages and freight. This is done via a combination of transport networking that
includes road, rail, sea and air for door-to-door delivery. This extensive distribution system is
supported by infrastructure that comprises hubs, warehouses, IT technology and human
resources, as well as offices in various cities. More and more courier companies appear on a
regular basis, and you may have noticed different courier logos and branding on vans and
planes across the world. Many of these courier companies operate independently, where as
others rely on some of the larger courier companies when it comes to providing international
deliveries. One of the main reasons for the increase in courier companies is the boom in
global trade, probably largely down to the Internet. Couriers have to deal with all sorts of
requests from delivering simple mail documents to large electronic items like computers,
printers and televisions. Simply put, the courier market has grown due to demand from
customers and businesses.

SALIENT FEATURES OF THE INDUSTRY

The courier industry specializes in time-definite, reliable transportation services for
documents, packages and freight.
The industry has exhibited a growth of about 30% over the past four years and is
expected to grow at 25% for the next two to three years, making it one of the fastest
growing segments in the transportation of cargo.
International express cargo holds 6% of the express cargo industry, but iS
forecasted to reach 40% by 2017.
The domestic courier industry with a turnover of Rs 20 bn is still at a nascent stage
as compared to developing countries like China where the industry is five to six
times bigger.
Currently there are about 2300 courier companies in India, but four major players
in the premium organized segment dominate the industry.

COURIER SERVICES IN INDIA:

The courier industry has world over been recognized as an essential and indispensable part
of any economy. In India, various factors like growth of the industrial segment, growth in
exports and imports and overall economic scenario of the country have contributed to the
growth of the courier industry. Domestic courier industry with a turnover in excess of INR

22 bn is still in a nascent stage. India has more than 2,300 courier companies. It is a highly
disintegrated industry with nearly 20 players in the organized sector, 2,000 in the semi
organized sector, and the rest in the unorganized sector. There are a few major players in the
organized sector who have a combined market share of 90%. Indian courier industry was
initially limited to all the four metros. The reason was the airport connection these metros
were having. The industry had its start some 15-20 years ago. But with changing economy
and technical advancement seen on a daily basis, the industry has extended fast to several
metropolis, township and even rural areas. Train, bus, motorcycle and even bicycle have
helped the industry in this regard. Industry has traveled a long way and now it has become a
very common sight to see an office of Courier Company in the nearby locality. Owing to the
growing demand for reduced transit time and early deliveries the industry is forecast to grow
at 25% for the next two to three years, making this one of the fastest growing segments in the
transportation of cargo. International express cargo holds 6% of the express cargo industry,
but is forecasted to reach 40% by 2017.

These are some key players in Indian Courier Industries:

1. Blue Dart
2. DHL India
3. FedEx India
4. First Flight Couriers
5. AFL
6. Gati
7. Elbee Express
8. Overnite Express
9. TNT India
10. UPS India
Blue Dart Express Ltd. (Blue Dart) is the market leader, with a 36% market share in the
domestic market, and Elbee Services Ltd., the second largest player, has a 20% market share.
AFL-DHL is primarily focused on the international segment, where it is the market leader,
whereas Gati Corporation Ltd. (Gati) is the market leader in the domestic packages, ground
distribution segment. In the domestic air packages segment, Blue Dart, having developed its
own air network and aircraft operations, is currently the market leader.

Revenues of Major Player in the Indian Market (Rs. bn):

The organized segment dominates the package and the premium document business since it
requires a strong infrastructure and resources, while the low-yield document business is the
domain of the unorganized sector. However in value terms the share of the organized sector is
64% and of the semi-organized and unorganized sector is 36% inspite of the large volumes it

handles.

BLUE DART: CORPORATE PROFILE

Blue Dart, South Asia's premier number one express air and integrated transportation,
distribution and Logistics Company, offers secure and reliable delivery of consignments to
over 21,429 locations in India. As part of the DHL Group (DHL Express, DHL Global
Forwarding & DHL Exel Supply Chain), Blue Dart accesses the largest and most
comprehensive express and logistics network worldwide, covering over 220 countries and
offers an entire spectrum of distribution services including air express, freight forwarding
supply chain solutions and customs clearance. Blue Dart was selected a Business Super brand
for the fourth time consecutively from over 1,699 brands and received the Readers Digest's
Most Trusted Brand Gold Award, three years in a row. It has been listed twice in the Dun &
Bradstreet top 500 companies in India. Blue Dart has been awarded with the Asia Brand
Congress Brand Leadership Award 2008. It has also been listed as one of the Forbes 'Best
under Billion' companies. The Blue Dart team drives market leadership through its motivated
people force, dedicated air capacity, cutting-edge technology, innovation, and value-added
services to deliver unmatched standards of service quality to its customers. State-of-the-art
Technology, indigenously developed, for Track and Trace, MIS, ERP, Customer Service,
Space Control and Reservations. Blue Dart Aviation, dedicated capacity to support their timedefinite morning deliveries through night freighter flight operations. 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. ISO 9001 - 2000 countrywide
certification by Lloyd's Register Quality Assurance for their entire operations, products and
services.

Its Competitive Advantage lies in:

Blue darts vast and unparalleled Domestic Network: Linked by some of the most advanced
communications systems and positioned to offer a consistent, premium, standardized quality of

service.
A spectrum of services to provide customized solutions. Blue dart is 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. Its services are relentlessly monitored to deliver a net service level
of 99.96% (as on February, 2005).

Its Customs and Regulatory expertise: Company had a dedicated team of specialists who
provide the expertise for customs as well as regulatory clearances at all States within the

country, to support seamless service to the customer.

Its Technology: Designed to enhance the reliability of our operations and process efficiency,
and add value to the customer through time and cost savings.
Its 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 passenger airline. A dedicated
aviation system to support Blue Dart's services is self-sustaining, with its own bonded
warehouses, ground handling and maintenance capability.
Its People force: Committed, diverse and over 4,000 strong are companys most valued asset.
All companys achievements have been possible because they have a team who believes in
themselves and their company, a team with a winning attitude. Blue dart is a learning
organization, valuing self-development, and most of companys managers are homegrown.

LOGISTICS IN BLUE DART

The Information Technology industry is, perhaps, typical of the changing and escalating
logistic demands of various industries today, irrespective of their category as 'old' or 'new'
economy. In the IT industry, the difference between success and failure is closely linked to
the supply/value chain integration, of which there are two distinct processes:

The delivery of goods to the customer in the most reliable transit period (and
preferably the shortest) possible. 'Reliable' alludes to a certain guaranteed transit time for
packages to reach customers or the response that organisations need in the event of any
exceptions.
The reverse flow of acknowledged signed delivery records without which, in many
cases, recovery of bills are virtually impossible. Especially so in the case of companies
placing multi-location orders that could cover hundreds of cities. The task for the supplier is
staggering - plan logistics for deliveries to all these locations, and hope for 100% of the
delivery records to be returned before bills can be submitted to the customer. In most IT
companies, the role of 'logistics' or 'fulfillment' is key. With organisations moving towards
close to perfect standards like Six Sigma, interaction with logistics suppliers has taken on a
critical role moving up sometimes to the level of the CEO of the organization. Blue Dart
Express Limited applied and found solutions to these critical demands much before other
players could even recognize their need. Through its exceptional people processes, superior
technology, and stress on quality systems over the last, almost two decades now, Blue Dart
was quick to fulfill these needs: The country's most reliable air and surface network offer a
predetermined delivery schedule with close to 100% accuracy. The IT industry could plan its
production with precision and avoid expensive inventory build-up. Blue Dart offers the
country's most comprehensive communications technology. Much before the internet was
prevalent; Blue Dart customers could dial into the network through Power Dart 2000 and
track their packages. As an added option, Fax dart could fax a copy of the delivery record the
minute the Blue Dart system was updated. 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 bottom-line.

SERVICES OF BLUE DART

REGIONAL SERVICES IN SAARC AREA
(Between India, Bangladesh, Bhutan and Nepal.)

Blue Dart offers the fastest, most reliable, door-to-door express deliveries for your
documents and packages to countries in the SAARC region through Regional Priority. The
service offers access to over 13,700 locations in India, and over 800 locations in Bangladesh,
Bhutan and Nepal, providing the widest coverage in the region through a quality network, an
integrated air and ground infrastructure dedicated to express transportation and innovative
technology support.
different type of regional services: -

DOMESTIC PRIORITY
The fastest, most reliable, door-to-door delivery service within India and to
Bangladesh, Nepal and Bhutan for documents and small shipments under 32kgs per package.
The special benefits of this service are:

Delivery to over 13,700 locations in India

Free pick-up from your location
Real-time Tracking
Regulatory Clearances
Free Computerized Proof of Delivery

DART APEX
Dart Apex is a door-to-door delivery service within India for shipments weighing
10kgs. And above. It is the fastest, most efficient delivery solution for commercial shipments
that are time-bound and are required to undergo regulatory clearances, or require special
handling. Dart Apex offers you an economical option of an Airport-to-Door service from the
major airports of Chennai, Bangalore, Mumbai, Delhi, Kolkata and Hyderabad to all the Dart
Apex locations serviced. A customer may book space for their shipments through companys
Customer Service and deliver customer shipments to Blue Dart Aviation Office at the related
airport. Dart Apex also offers a further economical option of a Door-to-Airport service. A
customer may book their shipments at any of companys locations serviced for this product to
any of the major airports. Consignee would be required to collect the shipment from the Blue
Dart Aviation office at the concerned airport.

Dart Apex offers the following benefits:

Wide Market Reach
Single-window Clearance
Real-time Information

Time-Definite Delivery
Free Proof of Delivery on Demand
Speed
Flexibility
Economical

DART SURFACELINE
Dart Surfaceline is an economical, door-to-door, ground distribution service within
India for shipments weighing 10 kgs and above. It offers a cost-effective logistics option for
your less time-sensitive shipments, with the following value-added benefits:

Time-bound Delivery
Track your Shipment
Regulatory Clearances
Pick-up Convenience
Secure Shipments
Economical Tariff

SMART BOX
Smart Box is a convenient, economic, packaging unit priced to include a door-to-door
delivery service within India. The units come in 2 sizes, 10kgs and 25 kgs, and are designed
to accommodate a variety of products. The special benefits of using Smart Box are:

A wide market reach

Speedy Delivery
Free pick-up
Real-time Tracking
Regulatory Clearances
Proof of Delivery
Trouble Free Service

INTERNATIONAL SERVICE
International services of Blue dart are taken over DHL EXPRESS in 2002. Blue Dart
Express Limited, through its International Sales alliance with DHL, the premier global brand
name in express distribution services, offers DHL Document Express (DOX), DHL
Worldwide Package Express (WPX) and the Jumbo Box (Jumbo Box - 25 kgs. and Jumbo
Junior - 10 kgs.), a one-stop shipping process for reliable, timedefinite, door to door delivery
of international documents and packages. The service offers access to 220 countries and
territories worldwide and the extensive, quality network of Blue Dart and DHL.
The special benefits of the International Services are:

A Convenient Solution for Urgent, International Documents & Shipments.

Documents and packages will be picked-up from location, cleared through customs

and delivered to consignee.

Customs Clearance Expertise Specialists conversant with customs formalities in India
as well as in 228 countries worldwide, and pre-clearance for shipments in transit

available for most destinations, ensure efficient delivery.

Real-time Tracking.
A Cost-effective Option.
Packaging.

VALUE ADDED SERVICES

Value added services on the rise. Blue Dart has started providing value-added services like
logistics management, supply chain management and warehousing facilities to its clients.
Going forward demand for such services from corporates is likely to grow at a fast clip. This
is because by outsourcing such services to third party service providers they would be able to
cut down on costs and improve their efficiency levels. For the courier companies such
services would be part of the overall value proposition they would be offering their clients
apart from the normal pick up and delivery. Such services have the potential for enhancing
the margins of courier companies like Blue Dart. We believe that Blue Dart is best equipped
to capitalize on the growing opportunities in the emerging areas of warehousing and supply
chain management.

BLUE DART INITIATES CUSTOMER SATISFACTION

BENCHMARK:
As a business entity customer have dispatched an important package that contains some
confidential business documents. Customers do not know the status of the documents
shipped. Customers end up making endless calls to the courier service office asking them
when the 'Proof of Delivery' (POD) will come their way since company need to be assured
that everything that was sent has reached the destination. Now, Blue Dart Express Ltd
promises to cure customers conventional woes. Termed 'net service levels', the initiative is
all internal benchmarking exercise by which the organisation evolves an action plan to
examine the areas where the customer satisfaction levels have not matched up to the
standards that have been established internally by the enterprise. The company also evolves
marketing strategics that can enable its business to effectively retain customers.

DISCUSSION:
To succeed today and to pave the way for a better future, firms in India need to create
strong linkages with their logistics and supply chain partners. More and more of them today

are realizing the importance of developing and implementing a comprehensive logistics and
supply chain strategy and then linking this strategy to the overall business goals. Adopting
these initiatives first and foremost requires taking a long-term view and having an extensive
focus on all the channels in the total transformation process to create a productive and
reliable supply chain. Technology, which was earlier taken to be a driver for doing business in
a particular fashion, has become a necessary enabler for aligning business to consumer
demand. It can change the way we capture and analyze information, differentiate products
and services, configure and sell existing products, crash order cycle times, introduce new
products and so on. ICT can thus achieve breakthroughs in the area of supply chain design,
configuration and planning, which otherwise can never be thought about. Theres a concerted
move to use ICT for data collection and forecasting.
Efforts to extend a common information system platform between partners will assist
in the transferring of information. Ideally one system should span all functions throughout a
supply chain. Firms in India are preparing themselves to harness power of ICT to improve
supply chains. The size of the firm now matters less as the cost of these technologies has been
reducing continuously so that even smaller firm can afford them. The goal should be to
implement a system that can make a decision more quickly and with better accuracy. Many
firms have gone for ERP. Ready access to transactional data does not automatically lead to
improved decision making. These transactional data must be analyzed through effective
models to support fact based decision-making. Analytical information technologies should be
helpful in achieving this purpose through the descriptive and normative models for effective
decision-making within and outside the firm. Since forecasting involves sharing competitionsensitive data beforehand, this practice hasnt taken off. If one probes deeper, it appears that
forecasting of customers themselves is uncertain, fluid and based on incomplete
understanding of trends and patterns, which, in turn, passes on the complexity to the vendors.
Companies in electronics, auto, auto ancillaries and IT sectors are using the collaborative
forecast practice widely. With India becoming the factory of the world, establishment of hubs
and spokes with quick international connections will only increase. Blue Dart and DHL have
already set up seven hubs. The proliferation of global majors in major industry verticals has
heralded the arrival of international supply chain service providers into the country. At the
same time many of the Indian business majors have shown inclination to manage the group
logistics in a unified manner to realize the benefits of consolidation efficiencies. These
logistics arm are set up to service the captive requirements of the parent company and
subsequently exploit the market demand.

CONCLUSION:
We examine the state of logistics and supply chain management practices in India
covering a wide spectrum of firms with at least one field visit and substantiate on-site
observations and informal discussions and interviews with data and information from
secondary sources. logistics and SCM practices are influenced by contextual factors such as
the type of industry, firm size, its position in the supply chain, supply chain length and the
type of supply chain. They are also influenced by regulatory and economic environment,
available infrastructure and competition with other supply chains. We identify the logistics
and SCM practices of these firms and discern various emerging trends as well as areas of
concern. We also suggest opportunities for improvements. Indian firms need to act fast to
capitalize on these opportunities to be competitive with the world market. The findings from
this study provide the type of information on logistics and supply chain management
practices in India that may help the Indian industry to benchmark these practices vis--vis
corresponding practices in other countries.