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A PROJECT REPORT ON

WAREHOUSING & DISTRIBUTION IN SUPPY CHAIN


MANAGEMENT

SUBMITTED TO:

UNIVERSITY OF PUNE

SUBMITTED BY:

RAKESH GAUR

PGDMLM
(2008-2009)

SINHGAD INSTITUTE OF
BUSINESS ADMINISTRAION
AND COMPUTER APPLICATION

ACKNOWLEDGEMENT
Thanking is formality and sometimes a necessity, nevertheless an
essential part of any project report. The list of expression of thanks no matter how
extrusive is always incomplete and inadequate. This acknowledgement is no exception.

One of the best parts of writing a project report is the opportunity to thank those who
have contributed to it. This project report has been made possible through direct and
indirect
Co-operation of various people. I specially with to acknowledge the following people
who reviewed the project. Thank for the most perspective and helpful comments.

I sincerely thank to Prof. R.R.Jaware for his support and valuable guidance in reviewing
the project form time. I also express my gratitude to Prof. H.D.Thorat for his precious
help during the entire course.

RAKESH GAUR

PERFACE

2
Winter training is an integral part of our academic curriculum. During the
training, a student gets an opportunity to understand the practical aspect of
theory. Training makes the concept clearer.

This project report is the outcome of the training that I have undergone at
SAFXPRESS PVT. LTD. for the partial fulfillment of Post graduate
Diploma in Foreign Trade.

The topic allotted to me by the company WAREHOUSING &


DISTRIBUTION IN SPPLY CHAIN MANAGEMENT.

The project emphasizes on the warehousing and distribution in supply chain


management done by the company.

I have tried to my best to make a good report.However; no one can claim


perfection in its entiretity.So I apologize for the discrepancy, if any, crept in.

Preparation of project requires perseverance, initiatives, proper guidance and


direction. So it is mandatory to take the aid of various departments.

TABELS OF CONTENTS:-

S.NO. CONTENTS Pg.no.


1. Introduction 05
1.1 Company Profile 06
1.2 Type of Business 14
1.3 Safexpress Services 15
1.4 Future Expansion 18
3
1.5 Company’s Turnover & Achievements 20
2. Supply Chain Management 23
2.1 Meaning 24
2.2 Supply Chain Management by Robert B. Handfield 26
2.3 Components of Supply Chain Management 28
2.4 System of Supply Chain Management 29
3 Case Study: Dabbawalas of Mumbai 32

4 Warehousing 38

5 FQAs 45

6 Conclusion 52

7 Bibliography 54

CHAPTER-1

INTRODUCTION
➢Company Profile
➢Types of Business
➢Safexpress Services
➢Future Expansion
4
➢Company’s Turnover &
Achievements

5
Company Profile

Safexpress –India’s Leading Logistics Company is renowned for its domain


expertise and experienced manpower in the LSCM sector. Safexpress can
best understand your Logistics and distribution requirements and can offer
the most suitable Logistics model and solution to you. Safexpress has the
largest network coverage across India traversing over 3,50,000 km. every
day covering over 550 locations through more than 750 routes operating 24
hours a day 365 days a year reaching these locations through it’s fleet of
3000 vehicles operating on. All Safexpress vehicles have all-weather proof
containers for safe transit. Safexpress also operates through Air to locations
directly covered by flights and to all other locations on a multi modal basis.

Safexpress have a Integrated Logistics Management. It is our 3PL Product


that optimises your company’s supply chain. First, we examine the linkages
between your suppliers, producers, buyers, intermediaries and end users in
order to identify time and cost inefficiencies. Next, we deploy our unique
mix of local know-how, global practices and cutting-edge technology to
provide integrated supply chain solutions. These range from specific
services such as warehouse management, statutory compliance and
invoicing - to an entire gamut of third party logistics services.

6
Safexpress works and carries on the philosophy of 'Custodians First Carriers
Later’. We sincerely abide by our corporate philosophy on the subject.
Safexpress has an all risks cover - Carrier’s Risk offer, which unburdens the
customer of his worries of losses in transit. On minimal extra charge of Risk
Charges, we cover your valuable shipment against all sorts of transit losses
including fire, flood, damage, accident, shortage, etc.

The Latest of the material handling equipment are used at Safexpress' hubs
to ensure safety and remove Laxity from material handling. Equipment
including hydraulic hand pallet trucks, dock levelers, trolleys, fork lifts’
multilevel pallet stackers are used by Safexpress. 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 Safexpress are on
platform level height. Any Logistician will understand and appreciate the
essentiality and importance platform level warehouses have for material
handling.

7
Pawan Jain
Chairman and Managing Director
Safexpress

Anil Sayal
General Manager
Safexpress

Safexpress started its business as a door-to-door service in 1995 with 4 routes, 9


offices, 12 container mounted vehicles and 20 employees.
Safexpress' door-to-door services include niche products like DoD and To-Pay
freight.

After one year i.e in 1996 Safexpress opens super hubs at Delhi, Mumbai and
Bangalore.

Next year Safexpress launches Integrated Logistics Services. Our first ILS client is
NIIT, the first international ILS account is signed with Hilti from Europe. Spurred
on by a surging domestic economy, Safexpress extends its fleet to 250 and number of
stations to 290. Safexpress Private Limited emerges as an independent entity
8
Then in 1998 Safeair and Safebox are launched, setting a new standard in value
added cargo services.All hubs are connected through web-based software. In 1999
Having grown by over 300%in 4 years without compromising quality, Safexpress is
awarded the Golden Peacock Award for quality and innovation in Logistics
Management.

In 2000 Pilot run for GPS starts on 28 routes. Also Safexpress reaches the 350-
destinations mark and the fleet crosses 1400. Again 2001 Safexpress upgrades and
launches a whole lot of features on www.safexpress.com including ePod, Virtual
Cargo and Privileged Member.

In the year 2002,2003 Safexpress was declared India's "Largest Logistics Service
Provider" by Limca Book of Records. In 2005 Safexpress bags the MICO:Power of
We Award for excellent service in logistics. In the same year Safexpress fleet crosses
3000 mark.

Next year in 2006 Safexpress was awarded by ADC Krone for providing best
logistics services and in same year Safexpress bags prestigious RAI's (Retailers
Association of India) Award for Best Logistics Service Provider.

HISTORY
1995 Safexpress launches as a door-to-door service with 4 routes, 9 offices, 12
container mounted vehicles and 20 employees.
Safexpress' door-to-door services include niche products like DoD and
To-Pay freight.

1996 Safexpress opens super hubs at Delhi, Mumbai and Bangalore.

1997 Safexpress launches Integrated Logistics Services. Our first ILS client is

9
NIIT, the first international ILS account is signed with Hilti from
Europe.
Spurred on by a surging domestic economy, Safexpress extends its
Fleet to 250 and number of stations to 290.

Safexpress Private Limited emerges as an independent entity.

1998 Safeair and Safebox are launched, setting a new standard in value
added cargo services.
All hubs are connected through web-based software.

1999 Having grown by over 300% in 4 years without compromising quality,


Safexpress is awarded the Golden Peacock Award for quality
and innovation in Logistics Management.

2000 Pilot run for GPS starts on 28 routes.

Safexpress reaches the 350-destinations mark and the fleet crosses


1400.

2001 Safexpress upgrades and launches a whole lot of features on


www.safexpress.com including ePod, Virtual Cargo and
Privileged Member.

2002 Safexpress declared India’s “Largest Logistics Service Provider”


By Limca Book of Records 2002.

2003 Safexpress declared India’s “Larges Logistics Service Provider”


by Limca Book of Records 2003.
Mr. Pawan Jain , CMD , Safexpress , becomes one of the finalists
in the prestigious EnY’s Entrepreneur of the year Award.

10
2004 Safexpress inaugurated its 500th scheduled delivery location
Safexpress bags the Franchise Awards04 for excellence in
Team Work.

2005 Safexpress bags the MICO:Power of We Award for excellent service


in logistics
Safexpress fleet crosses 3000 mark.

2006 Safexpress awarded by ADC Krone for providing best logistics


Services.
Safexpress bags prestigious RAI’s ( Retailers Association of India )
Award for Best Logistics Service Provider.

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.

VISION
To be a conscious learning organisation maintaining flexibility for
change so as to provide the most customised solutions. Striving
11
towards global market share whilst maintaining dominance in the
domestic market through good hr practice and excellent customer
service.

QUALITY
“A quality service relies upon constant customer interaction and
feedback. An immediate response to the changing environment
with pre-defined business processes managed effectively and
efficientlylead to the highest output from 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”

STRENGTHS
• Over 550 destinations, spread across 28 states & 7 union territories.

• Warehousing space exceeding 3 million square feet.

• Over 3,000 all weather-proof ISO 9002 vehicles.

• More than 1000 routes, linked through 41 super hubs & hubs.

• Delivering more than 3 million packages a month.

• Traversing more than 5,00,000 kms a day.

• Operating 24 hours a day, 365 days a year.

12
TYPE OF BUSINESS

Indian Economic Scenario today marks the emergence of total chaotic market with
lot of competitors, piling stock of products, lowering margins, taxation changes and
more. In the present situation what is needed to see the blue?
The ‘way to higher profits’ comes from streamlining the channels and outsourcing
the segment of business which is not the core focus or expertise of the company.

One such fragment of business model is Supply Chain. Being a medium of linking
product to market, a robust model of supply chain management ensures a better
‘TAT’ (turn around time), low inventory holding cost and less of damages.
Over the time discipline of business logistics has advanced from the warehouse and
transportation dock to the boardroom of leading Global Enterprises.
Supply Chain has to be viewed not only as material and information pipeline but as
integration of logistics with the human factors that need more attention to be paid to
understanding, creating and managing demand more effectively.

Safexpress works on the Value Chain concept using a framework for examining
linkages between suppliers, producers, buyers, intermediaries and end users.
Safexpress, India’s leading logistics company offers Integrated Logistics
Management, Express, Air, Multi-modal, Door-to-Door, time definite delivery and
consultancy services. The company also offers e-logistics and customized solutions
for e-business.

13
SAFEXPRESS SERVICES

➢ EXPRESS

Safexpress service is an express service which involves movement of cargo in all


weather proof sealed containers on feeder and express routes. The service is time definite
with a published transit schedule covering more than 550 destinations nation wide and
provides the flexibility for surface, air and multi-modal connectivity with a wide reach
associated with Indian airlines and air taxi operators such as jet airways, Sahara etc.

➢ DRAFT-ON-DELIVERY

Draft on delivery is an unparalleled value-added service wherein the seller can dispatch
goods through Safexpress to the buyer and be assured that the delivery would take place
only when the draft has been collected.

In the Safexpress 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.

➢ ALL RISK COVER

The management of Safexpress hereby undertakes and declares that:

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“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 Safexpress, 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 receipent as required without waiting for any request for the same.”

➢ SAFEBOX

The safebox comes in two convenient sizes of 17” x 17” x 12” and 16” x 12” x 9” easily
accomodating upto 20 & 10 kgs respectively of your cargo. The 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 an auto insurance upto rs.
5000 absolutely free of cost.

➢ SAFEAIR

To ensure that time sensitive cargo reaches the destination through a faster mode
meeting all your requirements for the time definite deliveries. Safeair connects your cargo
through airlines, atos and uses the services for morning and evening flights to provide a
wide variety of connectivety to suit different market cutoffs.

➢ ILM
Safexpress works on the value chain concept using a framework for examining linkages
between suppliers, producers, buyers, intermediaries & end users.

Safexpress ensures the success of the entire chain, marrying local knowhow with the best
global practices, technology & perspective

➢ CONSULTING

Safexpress offers value added services beyond physical operations in the form of
logistics consultancy covering a wide spectrum of the Indian economy.

15
The company plays a pivotal role in guiding diverse market segments on existing and
recommended logistics models with various simulation modules to map transactions
using historical data and providing befitting supply chain solutions.

HOW FAST IT WORKS

Cargo from PATNA to BANGALORE booked on Saturday, September 06, 2008

will travel a distance of 2280 kms./ 1425 miles

check posts through which your cargo will pass

documents required
2 Copies of Consignor's Invoice with ST & CST No. Printed

permits / forms required


VAT FORM-505/VAT FORM-515

octroi applicability
NO

entry tax applicability


YES subject to nature of transaction

your virtual cargo would be delivered on

by Express mode
Thursday, September 11, 2008

by Safeair mode
Monday, September 08, 2008

16
FUTURE EXPANSION

Logistics services provider Safexpress plans to invest Rs 800-1,000 crore (Rs 8-10
billion) in five years to expand its operations on the back of the boom in manufacturing
and retail activities in the country.
As a result of the expansion, the company's turnover is likely to touch Rs 1,000 crore (Rs
10 billion) by 2010.
The company expects to fund its expansion through internal accruals and debt as it claims
to have strong bottomline and cash reserves. The privately-held Safexpress has been
growing at 35 per cent and posted a turnover of Rs 450 crore (Rs 4.5 billion) in 2006-07.
The company expects similar growth this year as well, Pawan Jain, chairman and
managing director, told reporters at the CII Logistics 2007 summit in Chennai.
Safexpress intends to set up logistics parks comprising warehouses, vendor management
services, raw material management and finished products storages at 32 locations across
the country.
Each park will come up on an area of 25-30 acres. A group company, which is into the
realty business, has already completed around 70 per cent of the land acquisition.
The company is also establishing a 3 lakh sq ft logistics park near Chennai at an
investment of Rs 35 crore (Rs 350 million). It already operates a 80,000 sq ft warehouse
in Chennai.
Through the expansion programme, the warehousing capacity of the company will grow
to 10 million sq ft in the next three years from the current 3 million sq ft.
The company was planning to strengthen its presence in the air cargo segment by taking
three Boeing-737 cargo aircraft on lease. These would cover five cities in the country by
the next financial year, according to Jain. Safexpress has also placed an order for 380
trucks to add to its current fleet of 3,000 vehicles.
The company doesn't own the vehicles, but hires them through its network of 59 vendors.

17
HEALTHCARE SEGMENT is one of Safexpress's special focus area which
contributes 16 percent of the revenue. With more than than 100 percent customer
retention rate Safexpress has always given due importance to the demands of their
customers. Aiming at expansion, they are investing heavily in infrastructure development
and will soon be coming up with 32 logistics parks and will be adding seven million
square feet of warehousing capacity. The investment is planned for a total of Rs 1000
crore in infrastructural development in the next three years. Pawan Jain, Chairman and
Managing Director, Safexpress, says, "We have plans for expanding our specialised
logistics product range. This range would be specifically designed for the healthcare
industry after thoroughly analysing its needs. Apart from offering our multi-modal
services, we will be providing single window solutions and, along with managing the
logistics channel end-to-end from distribution channels to pharmacy or patient level. We
would be offering specialised logistics solutions to the rural healthcare, customised
pharma and cold warehouses pan-India, packaging solutions, implementing bar-coding to
prevent spurious drugs and offering solutions as per regulatory norms like GDP, US
FDA, MHRA and GCCDP."

With a view to provide customised logistics services for booming retail industry
Safexpress also sponsored the ninth Marketing and Retail Conclave. The conference saw
the presence of leading retail players from all across the world. Vineet Kanujia, General
Manager Marketing, Safexpress said, "The idea behind sponsoring this conclave was to
bring the retail and logistics industries closer. Safexpress has been at the helm in
harnessing and synergising the needs of the retail industry for the growth of the economy.
We have successfully managed to gather the required inputs and the coming period will
see us roll out these plans."

TURNOVER
18
The company hopes to double its turnover to Rs 1,000 crore by 2010, he told reporters on
the sidelines of CII Logistics 2007. The privately-held company has been growing at 35
per cent and posted a turnover of Rs 600 crore in 2007-08. It expects a similar growth this
year, Mr Jain said.

In three years, Safexpress will add 7 million sq ft of space to its existing 3 million sq ft. It
will set up logistics parks comprising warehouses, vendor management, raw material
management, finished products storages, and also distribute consignments. These parks
will come up in 32 locations across the country, he said.

EMPLOYEES TURNOVER

At present there are 2500 employees in safexpress but they are planning to expand there
number of employees in future.

ACHIVEMENTS

Safexpress wins ‘International Business Excellence Award 2008


Safexpress CMD, Mr. Pawan Jain conferred with the ‘Bharat Gaurav Puraskar’
by the Institute of Economic Studies

19
Mumbai, September 4, 2008: ‘Logistics Guru’ and CMD, Safexpress, Mr. Pawan Jain
was conferred with the ‘Bharat Gaurav Puraskar’ for the ‘Best Business Leader’ by the
Institute of Economic Studies (IES) this week. His entrepreneurship venture, Safexpress
Pvt. Ltd. which has grown into one of the leading logistics and supply chain management
companies in India was also awarded the ‘International Business Excellence Award’ for
the ‘Best Business Enterprise’ at the same platform organised at Hotel Grand Sukhumvit
By Sofitel at Bangkok, Thailand.

The prestigious award was presented in a ceremony proceeded by a seminar on ‘The


Global Indians’. The award was given in recognition of the achievements of Mr. Pawan
Jain with respect to bringing innovation, excellence and quality in the field of Logistics.
The award was presented to Mr. Jain by the former Deputy Prime Minister of Thailand,
Dr. Korn Dabbaransi.

On this grand occasion, ‘Logistics Guru’, Mr. Pawan Jain, CMD, Safexpress said “Both
these prestigious awards mean a lot to us. It is indeed a proud moment for everyone
associated with Brand Safexpress. We are happy that our relentless efforts have been
recognized in the industry. We have always ensured quality, security and timely services
and promise to continue in delivering the best. We are humbled by this adulation.”

This award ceremony was a platform for honoring Indian entrepreneurs and enterprises,
who have been consistently demonstrating Business Excellence as per International
standards.

IES is the most esteemed economic institution of the country. It seeks to provide expert
advice on the various facets of Indian economy by way of in-depth study and research.
IES has been actively involved in providing information to its members on the critical
developments taking place on the various economic fronts. In present day, it has come to
epitomize excellence in economic sphere.

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About Safexpress- Safexpress is India’s No. 1 Supply Chain and Logistics Company. The
company offers the best and the most innovative solutions for all SCM and Logistics
requirements. Their services are totally customized as per the demand of different
segments of the business industry. Courtesy their wide range of quality services,
Safexpress has set a benchmark in SCM standards and redefined the functioning of
Indian Logistics Industry. Growing at a phenomenal rate of over 30 % in the last couple
of years, Safexpress achieved an annual turnover of Rs. 500 crores in the FY 2006-07.
The company is targeting a turnover of Rs. 1000 crores by the year 2010.

CHAPTER-2

SUPPLY CHAIN MANAGEMENT

➢ Meaning
➢ Components of Supply Chain Management
21
➢ Supply Chain Management: Robert B.
Handfield
➢ System of Supply Chain Management
➢ Processes of Supply Chain management

22
SUPPLY CHAIN MANAGEMENT

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.
Particularly, information technology and communication infrastructure has
resulted into a continuous acceleration in the magnitude competition. To
sustain themselves in such an erratic environment, firms need to have door
competency and productivity. That is why firms are perceived to have more
systemized activities related to movement and storage of goods so as to
make them available at a short noticed with the lower inventory level. For
instance, Godrej locks – a division of Godrej & Boyce Company – has to
reduce its order to delivery cycle from there weeks to only three days.
Computers giant Hewett Packard has cut the duration of its cycle to deliver
to customers in India from the us by one third, from 37 days, to 10 days.
All this happened because of higher and systematic. Supply Chain
Management the new and more Indian companies are jumping onto supply
chain management bandwagons for the completive edge.

Supply Chain Management is business system of enterprise strategies,


business processes and information technologies for improving the
planning, execution and collaboration of material flows, information flows,
financial flows and workforce flows in the supply chain. SCM is supported
by modular software applications that integrate.

Activities across organizations, from demand forecasting, product planning,


parts purchasing, inventory control, manufacturing, product assembly to
product distribution.

DEFI
NITION

23
Supply Chain Management is the
process of planning implementing, and
controlling the operations of the supply
chain as efficiently as possible. Supply
Chain Management spans all movement
and storage of raw materials, work-in-
process inventory, and finished goods from
point-of-origin to point-of-consumption.

The definition one American professional


association put forward is that Supply Chain
Management encompasses the planning
and management of all activities involved
in sourcing, procurement, conversion, and
logistics management activities.
Importantly, it also includes co-ordination
and collaboration with channel partners,
which can be suppliers, intermediaries,
third-party service providers and
customers.

In essence, Supply Chain Management


integrates supply and demand
management within and across companies.

24
Source: Introduction to Supply Chain Management by Robert B. Handfield, Ernest.

➢ Customers: Customers are the sole purpose of existence of any business.


customers interact with retailers or supermarket. Website or telemarketing
firm can also act as an interface for the customer. Retailer works towards fulfilling
the demand, either through inventory or through placing fresh orders with
preceding link in the supply chain. In some case the customers bypass the
traditional supply chain and interact directly with the manufacturers for example
in case of online purchase of computer from Dell Computers, customers directly
place an order with a manufacturer i.e. Dell.

➢ Retailers/Distributors: Retailers interact with distributors or manufacturers


directly to fulfill the demand created by their respective customers. Retailer places
an order with preceding link in the supply chain to replenish its depleting
inventories. Typically the orders are initiated by the retailers but, in some case the
manufacturers monitors supermarket’ stocks and automatically initiates reorders,
Wal-Mart and P&G using continuous replenishment program is one example.

➢ Manufacturers: Retailers or distributors often place their orders with


manufactures after gauging the demand. Based on the demand from
retailers/distributors manufactures decide their production targets and schedules.
Manufacturers usually follow either push based strategy or pull based strategy. In
push based strategy production decisions are based on long-term forecasts thus
making it more difficult for the manufacturers to adjust their production
schedules.

In a pull-based strategy production is driven by customer demand rather than


forecast thus allowing for greater flexibility in the production. Information flow
and technologies like Point-of-Sales ( POS ) data play a significant role in this
strategy.

25
➢ 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?
Manufacturers works in close coordination with suppliers in order to reduce high
inventories. Just in time is one such technique, which manufacturers use to achieve
this objective.

REVERSE SUPPLY CHAIN

➢ Reverse Logistics is the process of planning, implementing and controlling the


efficient, effective inbound flow and storage of secondary goods and related
information opposite to the traditional supply chain direction for the purpose of
recovering value or proper disposal. Reverse Logistics is also referred to as
“Aftermarket Customer Services”. In other words, anytime money is taken from a
company’s Warranty Reserve or Service Logistics budget, that is a Reverse
Logistics Operation.

26
COMPONENTS OF SUPPLY CHAIN
MANAGEMENT

Our Global Supply Chain Management practice


focuses on four key solution areas:-

➢ Adaptive Execution. We transition your supply


chain into a high-speed, low-cost, rapid-response engine
to increase visibility and response from procurement to
fulfillment and replenishment.

➢ Supply Management. Our technologies and


collaborative business processes improve sourcing,
procurement, contracting, purchasing, invoicing and
analysis.

➢ Customer-Supply Synchronization.
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.

➢ Securing Supply Chains. Comply with security


requirements and speed container inspections with
solutions that offer tracking, analysis, alert capabilities,
and process and policy documentation.

27
A SYSTEM OF SUPPLY CHAIN MANAGEMENT

Supply Chain Management is a social or soft


system which has goals, components,
processes and boundary.

Goals of SCM.

To reduce inventory cost.

To increase sales

To improve the coordination and the


collaboration with suppliers,
manufactures and distributor.

Components of SCM System - The components


of a supply Chain System consist of

1. Supply Chain Software and Hardware,

2. Supply Chain Business processes and


Users of SCM System.

SCM Software and Hardware – The core of


an SCM System is SCM software. Supply Chain
Software is module based application. Each
software module automates business activities
of a functional area in the Supply Chain.

UNIX is the most common operating system


for running SCM software.

28
Business Processes – Business processes of
supply chain includes supply chain planning,
execution and collaboration and operational
control.

Users – The users of SCM systems are workers


of supply chain participants at all levels.

PROCESSES OF SUPPLY CHAIN MANAGEMENT

➢ Demand Planning and Forecasting - A critical success factor to supply


chain management is accurate demand forecasting. Supply chain software systems

29
utilize sophisticated mathematical models for predicating future demand from
historical data.

➢ Procurement - Thisis 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.

➢ Manufacturing and Assembly - Raw components are assembled into final


products or raw materials are manufactured into finished goods.

➢ Distribution - This is the process of delivering your products or services


consumers. Distribution involves warehousing, delivering, invoicing and payment
collection.

➢ Return - Return and refund are important parts and also the problem pats of
supply chain management.

➢ Boundary of the SCM systems- The boundary of a SCM system is he


boundary of extended enterprise which includes the company, suppliers, partner,
distributors and customers.

CHAPTER-3

30
CASE STUDY

DABBAWALAS OF MUMBAI

31
CASE STUDY

6 Sigma Dabbawalas of Mumbai,


And their Operations Management-
An Analysis.

The ubiquitous Dabbawalas also known as tiffinwalas who provide a lunch delivery
service in Mumbai have been in the business over 115 years. Their mode of operations
have been studied by global management gurus and business schools. In 1988, Forbes
magazine conducted a study and rated them a Sigma 6 organization i.e. a 99,9999 per
cent correctness – which means if the organization delivers six million tiffins, it will not
misplace more than one or just one tiffin in six million transactions.
Considering the unique achievement of Dabbawalas in the field their operations, this
study has been undertaken to access their group efforts and managerial efficiency. The
main objectives of this subject are :
1) To examine how the Dabbawalas operate;
2) To study howDabbawalas of Mumbai perform an amazing role in procurement
and distribution of tiffins to their clients from which one can learn many critical
issues of supply chain, distribution and logistics management. This subject mainly
dwells on the examination of their operations and achievement of almost zero-
fault performance including their problems and prospects in this changing
environment of their business, they work as a team to achieve a common goal
with a cent percent accuracy, and
3) To explore the problems and prospects of the Dabbawalas’s services in the light of
changing environment.

Their Glorious Past Performances:

The origin of the Dabbawala’s lunch delivery services dates back to the year 1890.
Mahadeo Havaji Bacche, a migrant from Pune district ( North Maharastra ) started this
lunch delivery service. At that time, eople came from different states and form different
communities migrated to Mumbai for work. At working place there were no canteens or
fast food centres and they did not bring their lunch from home. Besides, different
communities had different food habits, tastes and preferences which could only be
satisfied by a home made meal. Recognizing the need, Mahadeo started this lunch
delivery service.

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In this business, Mahadeo recruited young men from the villages neighbouring Mumbai
(generally Pune district and adjoining areas ), who had no formal education or technical
efficiency to get work in the city. There were 100 Dabbawalas increased. In 1950,
Dabbawalas were delivering 1,00,000 lunches per day. After the death of Mahadeo they
became organized in 1954 and formed Nutan Mumbai Tiffin Box Suppliers Charity Trust.
The trust had branch offices in different parts of the Mumbai sucha s Chembur, Dadar,
Ghatkopar etc. In 2005, 5000 Dabbawalas are delivering around 2,00,000 lunches per day.

Levels of Management:
The trust is a co-operative body having three levels of management, viz.
1) The Governing Council, its President, Secretary – Top level,
2) Mukabams ( Team leaders or supervision ) – Middle level,
3) Dubbawalas – Lower level.

The Governing Council ( also called as Panch Committee ) holds meetings on the
15th day of every month. Mukadams and Dabbawalas are entitled to attend the
meetings. At these meetings, Dabbawalas discussed their problems and business
policies. The trust collected Rs. 15 p.m. for each member to maintain a welfare
fund. The trust provides various services to its members, including loan facilities
for emergencies, educations expenses for children, health care etc. from this
welfare fund. The Dabbawalas are organized in supervise to sorting Dabbas ( tiffin
box ), to keep records of payment, to settle disputes, to seach new customers and
train new Daddawalas. Each goup is financially independent but work together in
the delivery process. Each gouup serves its own customers without hampering the
interests of other. Now the Dabbawalas are charging cutomers Rs. 250 to Rs. 300
p.m. for their services. Total monthly collection is shared equally among the
members of the goup. Each Dabbawala receives Rs. 5,000 to Rs. 6,000 after
meeting all expenses like railway monthly ticket, rent for handcarts, crates etc.
Newcomers who want to become Dabbawala are initially hired on a salary, after
evaluating their performance they are offered membership (shareholders) of the
trust and assigned to one of the groups. Each Dabbawala is guaranteed to receive a
monthly income and employment for life. As there is no retirement age, he may
work as long as he is physically fit. To become profit sharing member of the trust,
new Dabbawalas needs to pay a certain amount to the trust. This was Rs. 30,000 in
2003.

How they operate and work as team :

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This service is available in every working day and whenever the local trains run in
Mumbai & Suburban because it is their primary mode of transportation. The
Dabbawalas deliver home-cooked meals to individuals (irrespective of their caste,
creed or religion) at their working places (offices/factories) and return empty
boxes to customer’s houses or caterers. Every customer who avails himself the
service is given a aluminum container (called Dabba-contains 2 or 3 containers,
often carrying rice, chapattis, curry and salad) with appropriate code painted on
the lid. The Dabbas are changed hands at least four or five timers before they
reach their destinations during the delivery process. The process runs as follows:

A Dabbawala picks up the tiffin box with cooked food from a house or caterer
early morning (generally between 8:30 a.m. and 10:30 a.m.), then transports it by
cycle or handcart to the nearest railway station. Then he hands it over to a
Mukadam who sorts it and arranges them in crates or trays, according to the
destination. Another Dabbawala then transports it in the suburban train vendor
compartment to the railway station nearest to its destination where another picks it
up and delivers it to the ultimate recipient by 12:30 p.m. After lunch, the Dabbas
are picked up and return to the customer’s house or caterer in a reverse operation.

The food and the Dabba both belong to the customer. Even housewives
occasionally send messages to their husbands in these Dabbas. This delivery
system has been compared to a relay race.

The Dabbawalas have developed their unique coding system. The codes help each
Dabbawala to identify and fulfill his responsibility. These codes are understood by
the Dabbawalas and no one else. The code is painted on the lid of the Dabba,
which indicates the originating address & station and the destination station &
address. Their coding system is very interesting. They use colours and code
markings to ensure faultless delivery. They use both alphabets and numbers to
identify Dabbawala, station, building and floor. For example, if the code on a
Dabba is “P-BO-10 15/A/11”, then P identifies the name of the Dabbawala,
BO indicates Borivili (area) where the Dabba has to be collected from,
10 represents the area, Nariman point, where the Dabba has to be delivered and
15/A/11 stands for 15th building, 11th floor.

Dabbawala’s ability to successfully run the service in a crowded city like


Mumbai could be attributed to its geography and local train service. The trains run
every day in a year and there is very rarely any interruption in the service. At
monsoon, due to heavy rain, when the rail tracks would get flooded then the
service is disturbed. Raghunath Medge, President of the trust said, “Mumbai’s
geography makes it unique, it is a longish city where residences are in the north
and offices in the south, so it makes our work simple.

According to their version, they use the cheap public transport system which is
advantageous to them. Several groups are involved in this service, but their team
work is unique and delivery almost flawless due to their effective co-ordination.
Even there is no mixing of vegetarian and non vegetarian Baddas on the same
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bicycle. Raghunath Medge claimed “ We generally make one mistake in two
months. We can’t afford to make mistakes to often or else we will be out of
business. And our employees understand this reality very well so they are always
very caution.”

Problems & Prospects :


The trust faces the cut-throat competition from the growth of fast food centers like
Pizza Hut, Mac Donald’s etc. while there are thousands of die-hard customers,
rapid urbanization, increasing personal transportation and availability of different
kinds of fast food have drawn a good chunk of the younger generation away from
the home made food. But there is an increasing number of people who are health
conscious and feel that home cooked food suits their stomach and health. Even
some customers now send water along with their tiffins. Knowing this very issue
the trust do not bother about the competition. Today, the Dabbawala delivers them
to offices. But Medge said that food from caterers is still a small segment of the
total operation. Most people want to eat homemade food in the offices without the
bother of having to carry a cumbersome tiffin box. Six Sigma quality rating helps
the organization streamline their delivery systems, eliminate errors and achieve a
cent percent accuracy. Around 8000 Dabbawalas deliver about 5,00,000 tiffing
boxes to factories and offices acroos Mumbai with high labour intensive and with
almost zero technology inputs. But they receive international recognition after 115
years of glorious service. Every year their business grows by 25,000 to 30,000
tiffin boxes. They lose a few customer too each year but are more than
compensated with the addition. Actually they grow annually by about 10%. Till
the time people will feel hungry their business will keep growing.

They have started advertising on Dabbas by putting stickers on them. This brings
in extra income. Mumbai Dabbawalas deliver mainly during day time. They are
not night bird. But India shifts to a 24 Hours X 7 Days work culture, the tiffin
boxes’s network would also work under the moon and stars.

Conclusion of Case Study :-


The concept of ‘Dabbawala’ comes into picture in one of India’s big and busiest
cities – where people can enjoy the fresh homemade lunch every day. What a
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wonderful service they provide. It is not just a service but a vocation. Their main
aim is customer satisfaction the trust shows how these illiterate or semiliterate
Dabbawalas have mastered the art of logistics management, supply chain
management, customer service, just-in-time management, team work and problem
solving. People cannot believe that uneducated people can provide such and
efficient service. Even people of foreign countries (like U.K., Italy etc.) are
amazed that uneducated Dabbawalas can carry out such type of business so
accurately. Actually the uneducated have an ability to memorize and retain more
as opposed to educated who are used to writing down everything. So they claim
that “our head is our computer and Gandhi cap in the computer cover to protect it
from the sun or rain.” The white-capped, white-shirted Dabbawalas shot the
limelight when they were awarded the six sigma rating, but it was Prince Charles’
meeting with them in Mumbai in November,2003 that really helped them. He was
the first celebrity who visited them. R. Megde said “ Many people talk about us,
but Prince Charles was the first famous person who met us. He encouraged us. He
is our friend.

Hard work and sincerity of Dabbawalas are the two main factors to reach such
levels of efficiency with such an untrained work force. They got six sigma rating
of highest operational efficiency without using any paper work or computer.
Thanks to their personal as well as group efficiency and dedication to their
vocation.

CHAPTER-4

36
WAREHOUSING

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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.
Some warehouses are completely automated, with no workers working inside. The pallets
and product are moved with a system of automated conveyors and automated storage and
retrieval machines coordinated by programmable logic controllers and computers running
logistics automation software. These systems are often installed in refrigerated
warehouses where temperatures are kept very cold to keep the product from spoiling, and
also where land is expensive, as automated storage systems can use vertical space
efficiently. These high-bay storage areas are often more than 10 meters high, with some
over 20 meters high.
The direction and tracking of materials in the warehouse is coordinated by the WMS, or
warehouse management system, a database driven computer program. The WMS is used
by logistics personnel to improve the efficiency of the warehouse by directing putaways
and to maintain accurate in inventory by recording warehouse transactions.
For a warehouse to function efficiently, the facility must be properly slotted. Effective
slotting 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-to-voice 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
labor 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 offshoring 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.
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Recent developments in marketing have also led to the development of warehouse-style
retail stores with extremely high ceilings where decorative shelving is replaced by tall
heavy duty industrial racks, with the items ready for sale being placed in the bottom parts
of the racks and the crated or palletized and wrapped inventory items being usually
placed in the top parts. In this way the same building is used both as a retail store and a
warehouse.
Modern warehouses are also used at large by exporters/manufacturers as a point of
developing retail outlets in a particular region or country. This concept reduces the end
cost of the product to the consumer and thus enhance the production sale ratio.
Warehousing is an age old concept which can be used as sharp tool by original
manufacturers to reach out directly to consumers leaving aside or bypassing importers or
any other middle agencies or person.

Internet impact

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 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. This warehouse
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 is called value added services.

Types of Warehouse Storage Systems


Some of the most common types of warehouse storage systems are:
• Pallet rack:
39
Including selective, drive-in, drive-thru, double-deep, pushback, and gravityflow.
• Mezzanine:
Including structural rolls formed, rack supported, and shelf supported.
• Cantilever Rack:
Including structural and roll formed.

• Industrial Shelving:
Including metal, steel, wire, and catwalk.
• Automated Storage and Retrieval System (ASRS):
Including vertical carousels, vertical lift modules, horizontal carousels, robotics,
mini loads, and compact 3D.

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CHAPTER-5

FQAs

43
FQAs
➢ Why Safexpress?
Safexpress –India’s Leading Logistics Company is renowned for its domain expertise and
experienced manpower in the LSCM sector. Safexpress can best understand your Logistics and
distribution requirements and can offer the most suitable Logistics model and solution to you.
Safexpress has the largest network coverage across India traversing over 3,50,000 km. every
day covering over 550 locations through more than 750 routes operating 24 hours a day 365
days a year .

➢ What is the Network Strength of Safexpress?


Safexpress-India’s leading Logistics Company, has more than 550 Locations across India in its
network. Safexpress reaches these locations through it’s fleet of 3000 vehicles operating on more
than 1000 routes, 24 hours a day 365 days a year. All Safexpress vehicles have all-weather proof
containers for safe transit. Safexpress also operates through Air to locations directly covered by
flights and to all other locations on a multi modal basis.

➢ Will Safexpress cater to my destination?


Safexpress-India’s Leading Logistics Company, has network of more than 550 Locations across
India. To check whether Safexpress caters to your destination, please check our 'Contact Us'
page and click on Network.

➢ How do I Contact Safexpress for Pick-up?


Safexpress-India’s Leading Logistics Company, has offices across all industrial and commercial
towns and cities of India. To contact any one of them, please check our 'Contact Us' page and
click on your State to identify your city of origin, or click on the first alphabet of your destination to
see a list of destinations starting with the alphabet. Across India you could also contact our Toll
Free phone 1800 113 113 & you can also mail Corporate Customer Services Desk at
safexpress@safexpress.com

➢ Does Safexpress handle both Domestic and International


Consignments?
Safexpress, India’s Leading Logistics Company today handles only Domestic cargo.

➢ What are Safexpress Services?

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To view our entire bouquet of services in Logistics and Supply Chain, please go to our 'Services'
page. Here, you will find all our Services listed with complete explanations. For further queries or
more customised solution, Please mail us at safexpress@safexpress.com or call us toll free 1800
113 113.

➢ What is ILM?
Integrated Logistics Management is our 3PL Product that optimises your company’s supply chain.
First, we examine the linkages between your suppliers, producers, buyers, intermediaries and
end users in order to identify time and cost inefficiencies. Next, we deploy our unique mix of local
know-how, global practices and cutting-edge technology to provide integrated supply chain
solutions. These range from specific services such as warehouse management, statutory
compliance and invoicing - to an entire gamut of third party logistics services.

➢ Does Safexpress operate in Containers only?


All the fleet of Safexpress is all-weather proof containers meeting global quality standards. Unless
specifically required for a customised project Safexpress does not carry in open body vehicles.

➢ What does Safexpress Carry?


Almost every product manufactured, imported or sold in India can fall under our purview which
requires to reach its destination in time, safely and conveniently. Barring goods contraband in
nature, explosives, Cash, jewellery, and inflammable material...
Broadly major areas of business for Safexpress include IT hardware, Ready Made Garments,
Pharmaceuticals, Electrical and Electronic goods, Automobile Components & Spares, Fabric and
Cloth, FMCG, and Non-Perishable Food Products among many other products belonging to
diverse market segments.

➢ What about Packaging?


Safexpress principally does not handle packaging themselves. We can consult and provide
needful help and assistance but directly might not pack. We have SAFEBOX for our clients that
comes in two convenient sizes: the 17”x17”x12" Safebox carries up to 20kgs of cargo; the
16"x12”x 9" Safebox carries up to 10kgs of air cargo. The robust design of the Safebox is further
reinforced with internal insulation, which eliminates packaging costs. There’s another outstanding
feature built-in to the Safebox that covers an auto insurance for up to Rs. 5,000, absolutely free of
cost.

➢ What about Transit Risks?


Safexpress works and carries on the philosophy of 'Custodians First Carriers Later’. We
sincerely abide by our corporate philosophy on the subject. Safexpress has an all risks cover -
Carrier’s Risk offer, which unburdens the customer of his worries of losses in transit. On minimal
extra charge of Risk Charges, we cover your valuable shipment against all sorts of transit losses
including fire, flood, damage, accident, shortage, etc.

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For more details please call our toll free phone 1800 113 113 or mail us at
safexpress@safexpress.com

➢ Does Safexpress offer CFA Services?


Yes, Safexpress –India’s leading logistics company has a special product to offer. Corporate CFA
services under- ILM. Our corporate CFA is a very customised and scalable solution for Clients
who require variety of CFA services at one/many locations. Services range from sourcing,
Warehousing ,Inventory Management, Despatch, Delivery and many other modules from which a
customer can pick his requirements. Most importantly our Turnaround Time (TAT) to set-up the
infrastructure is very low and also it is cost effective to the entire Supply Chain.

➢ What about Warehousing Risks?


As mentioned in the previous answer, Safexpress Solution–ILM takes care of everything,
including warehousing insurance. If the customer requires it, the customer gets it.

➢ What kind of Material Handling Equipment are used at


Safexpress' Hubs?
The Latest of the material handling equipment are used at Safexpress' hubs to ensure safety and
remove Laxity from material handling. Equipment including hydraulic hand pallet trucks, dock
levelers, trolleys, fork lifts’ multilevel pallet stackers are used by Safexpress. 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 Safexpress are on platform level
height. Any Logistician will understand and appreciate the essentiality and importance platform
level warehouses have for material handling.

➢ How do I locate my material?


Safexpress.com offers you online tracking of your consignment. Simply punch in your way bill
number and the site informs you the status of your Consignments immediately. You may
download a copy of epod (Electronic Proof of Delivery) for your reference.

➢ What are the statutory obligations required for shipments?

46
Statutory obligations in India vary from state to state. For a check on obligations like documents,
form/permits, octroi /entry tax applicability - please visit our online logistics planning tool- Virtual
Cargo. By simply selecting your booking origin and destination along with the planned date of
despatch, it tells you all the obligations involved. For further clarity, please call us toll free 1800
113 113 and customer services desk will help you. You can also mail us at
safexpress@safexpress.com

➢ What is virtual cargo?


Virtual Cargo is a Safexpress' gift to Logisticians. It’s an online logistics distribution planning tool
for clients. By Simply selecting your origin and destination along with planned date of despatch, It
tells you all the obligations involved like number of copies of documents /invoice required, forms
or permits required, octroi or entry tax applicability. It confirms you the expected day/date of
arrival at destination by various modes, so as to plan a pre/postponement of your despatch to
realign with your supply chain. It also confirms you the distance your cargo will travel and the
check posts it’ll pass through in its transit.

➢ How can I become a Privileged Member?


Safexpress offers special attention and offers value added services to its large volume customers.
For these customers our online lounge has been named as Priviledged Members. Through a
login/password access a Priviledged Member gets access to a host of services including Multiple
Waybill Tracking, Tracking by Invoice, various MIS reports on Despatch and Receipt of
consignments, Service Performance Analysis of Safexpress month on month. We provide direct
access for our Priviledged Member to his account manager from safexpress to respond to direct
issues.
A host of other add-on and special offers are being added for our Priviledged Members.

➢ What about Reverse Logistics?


Safexpress has special arrangements to offer project based Reverse Logistics assignments. For
detailed discussions, please call us toll free 1800 113 113 or send us mail on
safexpress@safexpress.com

➢ Does Safexpress carry Liquid Cargo?


Safexpress principally does not carry liquid cargo on consolidation basis. However, items like
pharmaceuticals, adhesives are handled by Safexpress. For special project please speak with our
Customer Service Officers on toll free number 1800 113 113 or email us at
safexpress@safexpress.com

47
➢ What is Safexpress' cut off time for pick-ups?
Cut off time for pick-ups vary from origin to origin depending on connections. Please check with
our customer services officer at the origin station for exact cut off time for pick up and he/she will
confirm it to you. Our toll free number is 1800 113 113.

➢ Does Safexpress deliver on a Sunday? If yes, are there any


extra charges?
Safexpress operates its operations function 24 hrs a day 365 days a year. Safexpress not only
offers delivery services on Sunday but also does not charge anything extra for Sunday delivery.

For all other queries / questions, please mail us at safexpress@safexpress.com

CHAPTER-6

CONCLUSION

48
CONCLUSION
Today we are essentially operating in a global market. In this era of crumbling
economic barriers, the customer reigns supreme. The successful enterprises in this
fiercely competitive economy are those which are able to ensure a high level of
customer satisfaction and at a considerably low cost. The focus today is not on meeting
the customer’s expectations, but on exceeding them. The strategic role of logistics and
supply chain management in this regard becomes vital.

To achieve the objectives of logistic and supply chain management, it is essential to have
a well-defined organizational structure that supports the corporate mission and improves
and influence logistics system performance. With the growing nature and scope of
logistics and supply chain management in the overall performance of the enterprise over
the years, there have been changes in the logistics organizational structure from being a
part of various functions like manufacturing, finance, and marketing to a core function.

While designing a logistics organizational structure, firms need to follow certain


principles of organization, like unity of command, span of control, authority and
responsibility, line and staff relationships, centralization and decentralization of
power etc.

At the same time, it is essential to take into consideration the various factors like the size
of organization, corporate structure and strategy, the role of logistics and supply chain
management in the overall value-addition activities, availability of IT infrastructural
resources, and environmental uncertainty.

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CHAPTER-7

BIBLIOGRAPHY

50
BIBLIOGRAPHY

SUPPLY CHAIN MANAGEMENT L.C. JHAMB

INTERNATIONAL LOGISTICS PIERRE DAVID

SUPPLY CHAIN MANAGEMENT SUNIL CHOPRA

BROCHURE OF SAFEXPRESS

WEBSITES

www.logisticworld.com
www.safexpress.com
www.google.com

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