Logistics Project Report
Logistics Project Report
Institution Office :C – 116, Sector – 39, Noida – 201301 (U.P) Ph: 0120-2500381, 2572237, 2570428 e-mail:
Certificate
The mini project report on “Indian Logistics Industry And Supply Chain
Management for RC Rail & Rail Services" has been undertaken as a
partial fulfillment of the requirement for the award of the degree of Master
of Business Administration of Dr. A.P.J. Abdul Kalam Technical
University, Lucknow. I hereby declare that this Project is my original work
and the analysis and findings are for academic purposes only. This project
has not been submitted by the any student earlier to any other institution/
university.
CHAITANYA ARYA
ACKNOWLEDGEMENT
This mini project is the outcome of sincere efforts, hard work and
constant guidance of not only me but a number of individuals.
First and foremost, I would like to thank MIMT, GREATER
NOIDA. I am thankful to my faculty guide DR. JASPREET
KAUR for providing me help and support throughout the Project
Report period.
I owe a debt of gratitude to my faculty guide who not only gave
me valuable inputs about the industry but was a continuous
source of inspiration during these months, without whom this
Project was never such a great success.
Last but not the least I would like to thank all my Faculty
members, friends and family members who have helped me
directly or indirectly in the completion of the project.
EXECUTIVE SUMMARY
India is one of the fastest growing economies of the world today. This growth
is fuelled by growth in infrastructure, booming manufacturing sector, EXIM
trade, retail and agricultural related activities amongst others. This, in turn, has
resulted in increased demand for world-class logistics and warehousing
services in India, leading to the growth and transformation of this sector. The
logistics sector has been growing at an impressive CAGR of 8 per cent. The
industry has been valued at USD 125 billion in 2010 and is expected to
continue this growth for the next 3-5 years. With rising disposable income,
changing lifestyle, focus of government and private sector logistics has
received special attention in the past two to three years. Development of cold
chain / warehousing infrastructure, thus, remains at the core of the
government’s plan to enable growth of the logistics sector. Further, the
government is strengthening the infrastructure with over US $70 billion of
investment planned till 2012.Logistics will be one sector which will be the
backbone of flourishing trade activity and infrastructure development, and will
receive special attention by the government / private sector in coming years.
The accelerated growth of the logistics industry, coupled with emerging trends
of 3PL services, logistic parks, cold chain and warehousing activities, has
made India a vast and untapped market.
For most domestic players logistics has for long been restricted to the basic
transportation of goods. Warehousing has grown to some extent but other
services are still at a nascent stage. With increasing demand (from both MNCs
and Indian companies) and growing requirements, the Indian logistics industry
has expanded its bouquet of services to courier, cold chain, container freight,
3PL etc. with greater emphasis being laid on value-added services, such as
packaging, labelling, bar coding and reverse logistics. All these factors have
led to the rapid growth of the organised warehousing industry in India. Growing
at the rate of 30 per cent per annum, the 3PL industry is capturing the
imagination of various logistics players, both domestic as well as international.
Over the next five years, approximately 110logistics parks and 45 million
square feet of warehousing space is expected to be developed across the
country by various logistics companies. Despite the impressive growth rates,
the logistics sector in India is fraught with much inefficiency. Logistics cost in
India is fairly high – at around 13 per cent of GDP, which is much higher than
that in USA (9%), Europe (10 %) and Japan (11%). These inefficiencies of the
Indian logistics industry can be attributed to factors such as a complicated tax
regime, fragmented market structure and inadequate infrastructure. It may be
noted that although, lack of infrastructure acts as an inhibitor, but the dearth of
adequate infrastructure also presents unique opportunities to players who are
ready for the situation and understand the market. Infrastructure developments
like the railway dedicated freight corridors, road development projects and
modernisation of over 37 operational airports will increase India's handling
capacities, thereby enhancing logistical performances. This report identifies
such elements which are growth engines of the Indian logistics sector and
focuses on understanding opportunities related within these elements.
The report identifies ten such strategic growth areas of Indian logistics sector
which includes:
PART – I INTRODUCTION 1
1.5 Turnover 08
1.6 Achievement 08
3 3.1 Meaning 22
3.2 Definition 23
7 Conclusion 38-39
8 Bibliography 40-41
PART - I INTRODUCTION
1
1.1 Project Profile
The Latest of the material handling equipment are used at RC hubs to ensure
safety and remove Laxity from material handling. Equipment including
hydraulic hand pallet trucks, dock levellers, trolleys, and forklifts ‘multilevel
pallet stackers are used by RC. Chain Pulleys and Cranes handle
consignments which are not possible by smaller equipments to manoeuvre. It
might not be out of place to mention here all the hubs of RC are on platform
level height. Any Logistician will understand and appreciate the essentiality and
importance platform level warehouses have for material handling.
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RC started its business as a door-to-door service in 1999 with 4 routes, 1 office,
4 container, 3 mounted vehicles and 6 employees.
After two year i.e.in 2002 opens hubs at Delhi and Ahmadabad. Next year RC
launches Integrated Logistics Services. Their first ILS client was Poddar
Pigment Ltd.
Then in 2003 RC air and RC box are launched, setting a new standard in value
added cargo services. All hubs are connected through web-based software. In
2003 having grown by over 300% in 4 years without compromising quality.
1.1.1 MISSION
We shall adopt and internalise a work culture which demonstrates a "we can
we will" attitude to reflect in our daily responsibilities so as to far exceed our
objectives, consistently striving towards market dominance. We will create
historical landmarks forming a strong edifice for the future overcoming all
obstacles pro-actively as our personal responsibility and commitment to create
delight for the customer with impeccable personalised services.
1.1.2 VISION
To be a conscious learning organisation maintaining flexibility for change so as
to provide the most customised solutions. Striving towards global market share
whilst maintaining dominance in the domestic market through good hr practice
and excellent customer service.
1.1.3 QUALITY
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the lowest input and this is the strongest measure of quality. The best
certification of a quality organisation is the measurement of the scale of the
smile on the customers face”
1.1.4 STRENGTH
• Over 125 destinations spread across 28 states & 7 union territories.
• Warehousing space exceeding 15000 square feet.
• Over 20 all weather-proof vehicles.
• More than 100 routes, linked through 4 hubs.
• Delivering more than 500 ton load a month.
• Operating 24 hours a day, 365 days a year
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1.3 RC SERVICES
1.3.1 EXPRESS
In the RC DOD system pre-alerts are sent to the consignee to allow reasonable
time for the draft to be made, thus meeting the desired objective of express
transit with the amount ready for collection
“The company would redeem the value of the loss in the uneventful case of any
shortage or damage to the consignment whilst in the custody of RC, subject to
the risk charge having been paid by the sender or the recipient as per the
company policy. The amount corresponding to the loss as declared would be
paid by the company to the sender or the recipient as required without waiting
for any request for the same.”
1.3.4 SAFEBOX
The safe box comes in two convenient sizes of 17” x 17” x 12” and 16” x 12” x
9” easily accommodating up to 20 & 10 kgs respectively of your cargo. The
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robust design is further reinforced with internal insulation for safety of your
cargo. So you save on packaging cost and for a nominal amount it is ready for
delivery with auto insurance up to Rs.5000 absolutely free of cost.
1.3.5 RC AIR
To ensure that time sensitive cargo reaches the destination through a faster
mode meeting all your requirements for the time definite deliveries. RC Air
connects your cargo through airlines, altos and uses the services for morning
and evening flights to provide a wide variety of connectivity to suit different
market cut offs.
1.3.6 ILM
RC works on the value chain concept using a framework for examining linkages
between suppliers, producers, buyers, intermediaries & end users.
RC ensures the success of the entire chain, marrying local knowhow with the
best global practices, technology & perspective.
1.3.7 CONSULTING
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• Documents required 2 Copies of Consignor's Invoice with ST & CST No.
Printed permits / forms required VAT FORM-505/VAT FORM-515
• Octroi applicability Certificate
• Entry tax applicability (Subject to nature of transaction your virtual cargo
would be delivered on)
• By Air mode Sunday 15, 2012 at 15.00 hrs
• By Rail mode Tuesday, July 17, 2008 11.00 hrs
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• The company doesn't own the vehicles, but hires them through its network
of 59 vendors.
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PART - II
INDIAN LOGISTICS
INDUSTRY
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2.1 INTRODUCTION OF LOGISTICS
Logistics management is that part of the supply chain which plans, implements
and controls the efficient, effective, forward and backward (reverse) flow and
storage of goods, services and information between the point of origin and the
point of consumption in order to meet customers' requirements rather to the
customers’ delight. A professional working in the field of logistics management
is called a logistician.
Logistics, as a business concept, evolved only in the 1950s. This was mainly
due to the increasing complexity of supplying one's business with materials,
and shipping out products in an increasingly globalized supply chain, calling for
experts in the field who are called Supply Chain Logisticians. This can be
defined as having the right item in the right quantity at the right time at the right
place for the right price and to the right target customers (consumer); and it is
the science of process having its presence in all sectors of the industry.
The goal of logistics work is to manage the fruition of project life cycles, supply
chains and resultant efficiencies. Logistics is concerned with getting (or
transmitting) the products and services where they are needed or when they
are desired. It is difficult to accomplish any marketing or manufacturing without
logistical support. It involves the integration of information, transportation,
inventory, warehousing, material handling, and packaging. The operating
responsibility of logistics is the geographical repositioning of raw materials,
work in process, and finished inventories where required at the lowest cost
possible.
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2.2 ORIGIN AND DEFINITION OF LOGISTICS
The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio,
word, calculation, reason, speech, oration"). Logistics is considered to have
originated in the military's need to supply themselves with arms, ammunition
and rations as they moved from their base to a forward position. In ancient
Greek, Roman and Byzantine empires, there were military officers with the title
‘Logistikas’ who were responsible for financial management and distribution of
supplies.
The Oxford English dictionary defines logistics as: “The branch of military
science having to do with procuring, maintaining and transporting material,
personnel and facilities.”
The American Council of Logistics Management defines logistics as “the
process of planning, implementing and controlling the efficient and effective
flow, and storage of goods, services and related information from the point of
origin to the point of consumption for the purpose of conforming to customer
requirements.”
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2.3.2 RAPID RESPONSE
The products are physically moved from the place of their origin to the place
where they are required for consumption; they do not serve any purpose to the
users. Similarly, the products have to be made available at the time they are
needed for consumption.
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It can be achieved by regulating the flow of the products to the market through
a judicious use of available transport facilities and compatible warehouse
operations. By stocking the raw material during the period of excess supply and
made available during the periods of short supply, the prices can be stabilized.
Logistics is the process of movement of goods across the supply chain of the
company. This process is consisting of various functions, which have to be
properly managed to bring effectiveness efficiency in the supply chain of
organization. The major logistical functions are shown in figure.
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the customers benefit when these steps are carried out quickly and accurately.
The error committed at this stage at times can prove to be very costly.
2.4.2 WAREHOUSING
Warehousing refers to the storing and assorting products in order to create time
utility. The basic purpose of the warehousing activity is to arrange placement
of goods, provide storage facility to store them, consolidate them with other
similar products, divide them into smaller quantities and build up assortment of
products. Generally, larger the number of warehouses a firm has the lesser
would be the time taken in serving customers at different locations, but greater
would be the cost of warehousing. Thus, the firm has to strike a balance
between the cost of warehousing and the level of customer service.
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Linked to warehousing decisions are the inventory decisions which hold the key
to success of physical distribution especially where the inventory costs may be
as high 15 as 30-40 percent (e.g., steel and automobiles). No wonder,
therefore, that the new concept of Just-in-Time-Inventory decision is
increasingly becoming popular with a number of companies. The decision
regarding level of inventory involves estimate of demand for the product. A
correct estimate of the demand helps to hold proper inventory level and control
the inventory costs. This is not only helps the firm in terms of the cost of
inventory and supply to customers in time but also to maintain production at a
consistent level. The major factors determining the inventory levels are: The
firm’s policy regarding the customer service level, Degree of accuracy of the
sales forecasts, Responsiveness of the distribution system i.e., ability of the
system to transmit inventory needs to the factory and get the products in the
market. The cost inventory consists of holding cost (such as cost of
warehousing, tied up capital and obsolescence) and replenishment cost
(including the manufacturing cost).
2.4.4 TRANSPORTATION
2.4.5 INFORMATION
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the cost of physical distribution operations. But if correct information is available
it can be analyzed systematically and a great deal of saving can be ensured.
2.4.6 FACILITIES
Planning must be comprehensive and include the need for new construction as
well as modifications to existing facilities. Facility construction can take from 5
to 7 years from concept formulation to user occupancy. It also includes studies
to define and establish impacts on life cycle cost, funding requirements, facility
locations and improvements, space requirements, environmental impacts,
duration or frequency of use, safety and health standards requirements, and
security restrictions. Also included are any utility requirements, for both fixed
and mobile facilities, with emphasis on limiting requirements of scarce or
unique resources.
In years gone by, the traditional warehousing and logistics facility was located
by railroad tracks a water part or freeways, usually in the least desirable parts
of cities or large towns. This stereotype then faded as gigantic state of the art
facilities began to sprout in more rural areas on the outskirts of transportation
and population hubs. The world started beginning to see such facilities showing
up in even less ‘traditional’ areas. Modern warehouses now are being located
in carefully manicured industrial parks that are sprouting open space-often in
out of the way places. Why the emphasis on such locations for logistics
companies?
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Much of it is due to the great flux that the logistics industry has been undergoing
in the first three years of the 21 st century. Most of these changes are being
driven by a growing trend in the manufacturing and retail sectors to form
partnerships with companies to which they can outsource non-care logistics
competencies-3PL providers.
In turn, 3PL providers are continually looking to provide innovative supply chain
solutions to customers by focusing on value-added capabilities, differentiating
themselves from the competition. They focus on key objectives, such as
implementing information technologies, instituting effective management
process, integrating services and technologies globally and delivering
comprehensive solutions that create value for 3PL users and their supply
Chains. This need to partner with customers and become more integrated into
their supply chain processes has created the ancillary need to locate close to
these customers.
That isn't to say the need for easy access to transportation hubs and different
modes of transportation won't continue to be important. But the above shift in
business strategy, along with the advances in technology and enhanced
communication, has opened the door for logistics facilities to operate
effortlessly in a myriad of locations.
Own passion for running the race matters most of all in a downturn, when
people are insecure, see only savage cost savings, and loyalty is tested. The
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corporation’s futures will be dominated by six factors, or faces of a cube,
spelling F U T U R E.
Logistics is inevitable in the future and essentially the management policy also
has a significant role in the future of world. Generally the study is being featured
with all aspects of management in Logistics and Freight areas. (Logistics
include Transportation, Warehousing, Network Design, Cross docking, and
Value Adding)
FINANCIAL PERFORMANCE
The Company’s income from operations & other income grew by 19% from Rs.
1,758.47million in 2007-2008 to Rs.2,092.86 million in 2008-2009. The
company maintained its throughput at 247,618 Teus in 2008-09 (2007-08:
251,728 TEUs). The Profit before tax increased from Rs.867.65 million in 2007-
08 to Rs.1,073.24 million in 2008-09 after providing for interest Rs.7.03 million
(2007-08: Rs.0.62 million) and depreciationRs.149.53 million
(2007-08: Rs.133.47 million)
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2.6.2 ALL CARGO GLOBAL LOGISTICS LTD.
FINANCIAL PERFORMANCE
The company has achieved a turnover of Rs. 5,167.56 million and earned a net
profit of Rs. 978.05 million as compared to turnover of Rs. 5,167.91 million and
net profit of Rs.926.73 million in preceding financial year, representing 5.54%
growth in net profit. EBITDA is Rs. 1,588.45 million as compared to Rs.
1,407.46 million in preceding financial year, representating 12.86% growth.
Gati is one of the leading express distribution and supply chain solutions
companies in India. Gati provides multi-modal transport services with
connectivity across air, road, ocean and rail. The company has overseas
presence too with markets in the asia pacific region and SAARC countries. The
company has a large network spread over 603 of India’s 611 districts and a
fleet of over 4,000 vehicles on road. Shares listed on the National Stock
Exchange and the Bombay Stock Exchange. Company regained the Consumer
Super brand Status for the year 2009-10. The road transport business of the
company provides both bulk and container services. It has a facility of online
cargo tracking, doorto-door pickup and delivery, documentation etc. Gati CTC
launched its sixth vessel MV-Gati Pride 7000 DWT and 441 TEU, which is its
first custom-built vessel. On March 31, 2009 Gati acquired the remaining 26.01
percent stake in Kausar India, increasing its total stake to 99.73 percent.
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FINANCIAL PERFORMANCE
South Asia's premier courier and integrated air express package distribution
company.DHL Express (Singapore) Pte. Ltd. acquired 81.03% of the equity
capital of BlueDart Express Limited in 2005. Blue Dart continues to operate as
an independent brand and provides a complete spectrum of domestic and
international express services through synergies with DHL. Blue Dart has the
most extensive domestic network covering over 25,416 locations, and service
more than 220 countries and territories worldwide through Sales alliance with
DHL, the premier global brand name in express distribution services.
Headquartered in Mumbai, it has a workforce of over 6,947 people. The
company has a fleet of 5,408 vehicles and has air support of 3 Boeing 737 and
4 Boeing 757 freighters.
FINANCIAL PERFORMANCE
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PART – III
SUPPLY CHAIN
MANAGEMENT
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3.1 MEANING
Since, the beginning of the 1990s, there has been a paradigm change in the
business scenario, mainly due to the liberalization policy of various economies
all over the world, and revolutionary innovation in the field of science and
technology.
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Activities across organizations, from demand forecasting, product planning,
parts purchasing, inventory control, manufacturing, product assembly to
product distribution.
3.3.1 CUSTOMERS
3.3.2 Retailers/Distributors
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link in the supply chain to replenish its depleting inventories. Typically the
orders are initiated by the retailers but, in some case the manufacturer’s
monitors supermarket’ stocks and automatically initiates reorders, Wal-Mart
and P&G using continuous replenishment program is one example.
3.3.3 Manufacturers
3.3.4 SUPPLIERS
Manufactures interact with suppliers to make sure that they have all the
available materials for manufacturing. Raw material orders placed with
suppliers are more precisely determined as they are based on production
schedule. But the question arises is the production schedule reflective of the
correct demand? Manufacturer’s works in close coordination with suppliers in
order to reduce high inventories. Just in time is one such technique, which
manufacturers use to achieve his objective.
Our Global Supply Chain Management practice focuses on four key solution
areas:
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3.4.1 ADAPTIVE EXECUTION
Integrate SCM with marketing, sales and customer management and you’ll see
high availability and low costs that can increase sales and eliminate rush
shipments and back-orders.
3.4.4 SECURING SUPPLY CHAINS
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• To improve the coordination and the collaboration with suppliers,
manufactures and distributor.
UNIX
UNIX is the most common operating system for running Supply Chain
Management software.
Business Processes
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Business processes of supply chain include supply chain planning, execution
and collaboration and operational control.
Users
The users of Supply Chain Management systems are workers of supply chain
participants at all levels.
3.6.2 Procurement
This is the process of choosing the suppliers that will deliver the goods and
services you need to manufacture or assembly your products or create your
services. It involves price negotiation, receiving, and verifying the shipments.
Raw components are assembled into final products or raw materials are
manufactured into finished goods.
3.6.4 Distribution
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3.6.5 Return
Return and refund are important parts and also the problem pats of supply
chain management.
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CHAPTER – 4
Objective of The Project
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better serve its customers and stay ahead of industry trends and
demands.
In the Indian logistics industry, RC Rail and Rail Services can play
a significant role in the supply chain management of goods and
materials. By providing a cost-effective, reliable, and sustainable
mode of transportation, RC Rail and Rail Services can support the
growth of the Indian economy and contribute to the development of
a modern and efficient logistics industry. The company can leverage
its extensive rail network and infrastructure, along with technology
and innovation, to optimize rail operations and improve the overall
customer experience.
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In terms of supply chain management, RC Rail and Rail Services
can work closely with other players in the logistics industry to
provide intermodal services that combine multiple modes of
transportation, such as rail, road, and sea, to improve delivery times
and reduce costs. By doing so, the company can help to increase
the efficiency and effectiveness of the supply chain, while also
reducing the environmental impact of transportation. Additionally,
RC Rail and Rail Services can continuously improve its processes
and technology to better serve its customers and stay ahead of
industry trends and demands.
WAREHOUSING
A warehouse is a commercial building for storage of goods. Warehouses are
used by manufacturers, importers, exporters, wholesalers, transport
businesses, customs, etc. They are usually large plain buildings in industrial
areas of cities and towns. They come equipped with loading docks to load
and unload trucks; or sometimes are loaded directly from railways, airports, or
seaports. They also often have cranes and forklifts for moving goods, which
are usually placed on ISO standard pallets loaded into pallet racks.
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recording warehouse transactions. For a warehouse to function efficiently, the
facility must be properly slotted. Effectives lotting addresses which storage
medium a product will be picked from (pallet rack or carton flow), and how they
will be picked (pick-to-light, pick-tovoice or pick-to-paper).With a proper slotting
plan, a warehouse can improve its inventory rotation requirements-- such as
FIFO (First In First Out) and LIFO (Last In First Out) – control labour costs and
increase productivity.
Traditional warehousing has been declining since the last decades of the 20th
century with the gradual introduction of Just in Time (JIT) techniques designed
to improve the return on investment of a business by reducing in-process
inventory. The JIT system promotes the delivery of product directly from the
factory to the retail merchant or from parts manufacturers directly to a large
scale factory such as an automobile assembly plant, without the use of
warehouses. However, with the gradual implementation of offshore
outsourcing and off shoring in about the same time period, the distance
between the manufacturer and the retailer (or the parts manufacturer and the
industrial plant) grew considerably in many domains, necessitating at least one
warehouse per country or per region in any typical supply chain for a given
range of products.
The internet has had an influence on warehouses too. Internet based stores do
not require physical points of selling. However, warehouses are still required to
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store the goods. Since direct contact with customers means many small orders,
this is a different situation where stores would be ordering large numbers of
goods. Simply said, warehouses change from shipping large quantities of
goods to shipping large numbers of small quantities of goods.
Having a large and complex supply chain containing many warehouses may
be costly. Sometimes, it is beneficial to have one large warehouse per
continent. These warehouses should be located at a central point, where
transport is available to all other destinations. At these continental hubs, goods
have to be customized for different countries. For example, goods get a price
ticket in the language of the country where it will go. Making small adjustments
to goods at a warehouse are called value added services.
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CHAPTER – 6
Feasibility Analysis
34
emissions and waste, and evaluate the social impact of the
company's activities on the communities it serves.
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CHAPTER-7
Strengths:
Extensive rail network and infrastructure
Strong reputation for safety and reliability
Cost-effective mode of transportation
Ability to carry large volumes of goods and materials
Weaknesses:
High capital costs for infrastructure and equipment
Competition from other modes of transportation
Limited market reach in some regions
Dependence on government funding and regulatory approval
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Opportunities:
Growing demand for rail transportation services
Opportunities for intermodal transportation and supply chain
optimization
Potential for expansion into new markets
Advances in technology and sustainability initiatives
Threats:
Economic and political instability
Competition from other modes of transportation
Environmental regulations and sustainability concerns
Natural disasters or other disruptions that may impact the rail network
By conducting a SWOT analysis, RC Rail and Rail Services can gain a better
understanding of the factors that may impact its operations and identify
opportunities for growth and improvement. This analysis can also help the
company to address any weaknesses and threats, and capitalize on its
strengths and opportunities, to ensure the long-term success of its rail
transportation operations and services.
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CHAPTER – 8
CONCLUSION
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Key findings and outcomes: Highlight the most significant results
and outcomes of the project, and describe how they impact the company
and its operations.
Lessons learned: Identify the key lessons learned from the project, and
discuss how they can inform future projects or initiatives.
The conclusion of the project for RC Rail and Rail Services would provide
valuable insights and recommendations for the company's future
operations, and help to ensure the continued success of its rail
transportation services.
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CHAPTER –8
BIBLIOGRAPY
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REFERENCE
WEBSITES
• www.logisticworld.com
• www.wikiapedia.com
• www.google.com
• www.gati.ltd
• www.srllogs.com
• www.safeexpress.com
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