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SYNOPSIS 1. INTRODUCTION Logistics is the management of the flow of resources between the point of origin and the point of destination in order to meet some requirements. In simple words logistics can also be defined as: The delivery of the required goods, at required place, at required time, in required state and to the required person, efficiently. Logistics is comparatively a new term, but not the operation. Logistics has existed since the beginning of civilization. Raw material and finished products had always to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centers. No longer did people live near production centers, nor did production take place near residence centre. As the geographical distance between the production point and consumption point increased, logistics gained importance. Third party logistics came in to picture when, any organization involves using an external agency to execute logistics activities that have traditionally been performed within an organization itself. 3PL (Third Party Logistics) falls under the domain of supply-chain management. According to the Council of Supply Chain Management Professionals, 3PL refers to a firm that provides multiple logistics services for use by customers. Preferably, these services are integrated, or bundled together, by the provider. Some of the services provided by 3PLs are Transportation, Warehousing, Cross-Docking, Page 1 of 7


Inventory Management, Packaging and Freight forwarding. In a simpler way, 3PL essentially refers to the fact that a firm outsources the logistics part of its supply chain to a third party which is known as third-party logistics provider.

2. VARIOUS STEPS INVOLVED IN A LOGISTICS STRATEGY DEVELOPMENT AND PLANNING PROCESS a. Visioning: This includes the systematic development of an organizational consensus regarding the key inputs to the logistics planning process as well as identification of the potential alternative logistics approaches. This is an important step for the following reasons: Helps to define a strategic direction to the company and also to get a clear understanding the role of logistics in it. Get a clear idea of the requirements of the various segments of customers. Have a look at the various factors that would affect the strategy of the company. Define alternative strategies and also the scope of the planning effort.

b. Strategic analysis: This involves taking a look at the various components involved in the process and selecting the best logistics process among the alternatives. These components, which are to be reviewed, are revealed during the first step. This may include revamping the entire process to assessing how a single component can be used more effectively. c. Planning: This involves the assembling of a plan that outlines the mission and goals for the logistics function and the programs and activities to achieve these goals. Logistics planning

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is an iterative process. The plans have to be redefined every year to improve the quality of performance. d. Managing change: This involves effective management to implement enhanced ways of conducting business. The management should keeping changing the plans in accordance with the change in the market and also coaches the organization to effectively embrace this change.

3. CURRENT LOGISTICS RELATED ISSUES There are several factors that affect logistics. These issues need to be anticipated, prepared for and taken advantage of for a company to be successful in todays market. They are

External: Globalization Technology Workforce 2000 challenging nature of the work force Environmental concerns

Internal: Customer service and quality Third party networks Supply chain management Changes in management and organization style

Listed below are some of the steps that could be followed to mitigate the above mentioned issues: Page 3 of 7


Performance: Better service for customers Improved productivity Assess just in time and quick response needs

System structure: Better relationship with vendors, customers and third parties to more effectively manage the supply chain Better relationship within and across the organization

Technology integration: Better information systems that connect functions and organizations Combine information and material handling systems for increased efficiency and effectiveness

4. SOME OF THE ADVANTAGES AND DISADVANTAGES OF EMPLOYING THIRD PARTY LOGISTICS: Advantages 1. Have access to the cutting edge technology that is required to perform the functions easily and with efficiently. 2. Have sufficient facilities and space to perform all the required tasks such as heavy transport facility and warehousing. 3. Will be capable enough to fulfill the requirements and goals of multiple clients at a time. 4. Provide your company with greater flexibility and resources to fulfill the customer demands at different places. Page 4 of 7


Disadvantages 1. Supplier failure can cause major interruption to the operations of company. 2. May end up losing some of the control over the operation. 3. Main business goals and objectives of one company should not be the same as the other company in the strategic alliance between companies.

5. COMPANY PROFILE BHEL is a PSU and Navarathna company, producing capital goods. BHEL is one among world's rarest few who have the capability to manufacture entire range of power plant equipment. It has 15 manufacturing units, 4 Power sector regions, 15 regional offices, 4 offices abroad, 2 subsidiaries and large number of project sites spread all over India. The raw materials, goods produced in-house/outsourced needs to be transported to the required location, at the right time, in good condition, by means of trusted carriers. For this purpose different units have involved in contract with various transport carriers, all over the country to ensure timely delivery to the customer's destination (both internal/external). Hence the third party logistics plays a major role in this organization.

6. STATEMENT OF PROBLEM The logistic providers are the main source to transport the consignments. These days many industries are hiring a third party logistic providers through contracting process to make their supply chain effective. To have an effective supply chain process there must be good relationship between the BHEL and logistic providers. Hence this research deal with the process of identifying the potential logistic providers to make their supply chain process more effective and also to quench the need of the logistic providers to make them satisfied. This will result to upgrade the relationship between the BHEL and the contractors. Hence this project is done to Page 5 of 7


find out the satisfaction level of the contractor, so that BHEL could enhance their supply chain process more effectively and they also want to be a benchmark for other concern in determining the satisfaction level of the contractors.

7. IMPORTANCE OF THE STUDY It is important to recognize the importance of a dynamic balance between the minute details and the main elements involved in a product. The Role of Logistics is to maintain that balance. Once the firm realizes the importance of logistics it is necessary that the firm make full and efficient use of logistics. The first step is to create a buyer value for the customer and a strategic value for the firm. The customer is the most important asset for a company. He drives the entire supply chain including manufacturing, marketing and logistics. Hence it is important for a firm to have a clear understanding of what the customer demands and to keep up to the customers expectations. Once a company has a clear understanding of its customers requirements it must devise a strategy on how to use logistics to achieve it. This means that the company has to have a clear understanding or assessment of companys strategic direction.

8. OBJECTIVE OF THE STUDY To find out the relationship between logistics providers and BHEL. To determine the satisfaction level of the logistics providers for BHEL. To analyze the obstacles in logistic operations. To propose improvement in the satisfaction level of logistics providers for BHEL. To find the strength and weaknesses of logistics providers for BHEL.

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9. RESEARCH METHODOLOGY a. Data collection technique There are two types of data will be collected for the research purpose i.e. primary data and secondary data. Primary data will be collected through well structured questionnaire. While secondary data mean the data which already exist. b. Sample size More than 500 contractors were provided the logistic services to BHEL. But I planned to collect the Primary data through questionnaire from 150 contractors of BHEL. c. Statistical Tools I planned to apply chi-square test, t-test, F-test with ANOVA and Percentage Analysis for computation the results.

10. LIMITATIONS OF THE STUDY Due to non-cooperation of the contractors, it may be difficult to collect the data.

Due to time constraint the researcher has been unable to cover the entire population and hence the findings of the study may certain only on the areas covered by the researcher.

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