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Lintas Freight & Logistics LLC

[CHAPTER 1]
Introduction

1. INTRODUCTION

As part of curriculum of the Graduate Degree in Foreign Trade course at Sinhagad College of
Science & Commerce, students are required to do a project in any reputed organization. For this
reason, I did my project research in Lintas Freight & Logistics LLC, Mumbai. The project work
was titled “Effectiveness of Logistics Management” in Mumbai and to suggest ways and means
to improve the management strategic decisions.

1.1 OBJECTIVE OF THE STUDY

The objectives of the Project are:

• To know about Logistics Industries


• To compare the effectiveness of logistics management at Lintas Freight and Logistics and
to benchmark the organization with respect to the industry.
• To have a thorough understanding of how logistics and freight industries work.
• To know whether the customers are satisfied with the existing range of service pattern.
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1.2 METHODOLOGY OF THE STUDY

The data used for the study had primary and secondary character to it. The primary data was
collected through questionnaire method. The secondary data were composed through the
reference of books, websites, and interviews with various executives in different organizations of
the sample. The procured data was analyzed by a simple percentage method and the results are
supported with graphs and charts.

1.3 SCOPE OF THE STUDY:

The scope of the study is confined to Dubai Ports (Al Hamriya Port) and nearby organizations of
Lintas Freight & Logistics LLC, which are into the concerned industry. The study is done only
on industries dealing with Freight and Logistics in Dubai area.

a. Introduction to Logistics Management


Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective forward and 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. 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 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.
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b. 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 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.”Another
dictionary definition is: "The time related positioning of resources." As such, logistics is
commonly seen as a branch of engineering which creates "people systems" rather than "machine
systems"....

c. Prospects of Growth in the Industry


In years gone by, the traditional warehousing and logistics facility was located by railroad tracks,
a water port, and/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 as fast as the corn and wheat once did
in these open spaces-often in out-of-the-way places. Why the emphasis on such locations for
logistics companies?

Much of it is due to the great flux that the logistics industry has been undergoing in the first three
years of the 21st 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-core logistics competencies-3PL providers.
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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 processes, 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.

Profit warnings, share price pressures, mergers, reorganizations, relocations, disposals, painful
layoffs and great geopolitical uncertainties can sweep away even the most comprehensive
logistics strategies – and that’s despite outstanding management over many years. These are
exceptionally difficult times and it has never been more important to connect logistics and freight
planning to executive board thinking than now. It’s easy to lose sight of the bigger picture in the
rush to cut infrastructure cost and conserve cash. Hopefully organization succeed in protecting
the business, satisfying shareholders and analysts, but what about capacity and flexibility, morale
and momentum?

To be a logistics winner in the coming years organizations need to use the downturn to reshape
for growth, propelled by an unshakeable conviction that the mission is still important, that more
prosperous times lie ahead, and that in some way the company infrastructure is helping to build a
better kind of world.

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,
Crossdocking, and Value Adding)
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d. General Import / Export Market

a.) Market Analysis


UAE sea freight exports rose in volume and value during recent years. UAE’s largest exporting
state, Dubai, led these increases with substantial increases in volume and value of exports. All
states showed an increase in export value and many states having an increase in export volume.
Abudhabi, Rasalkhaimah, and other states showed small decreases in export volume compared to
Dubai.
Total freight import values increased 16.3% in 2006/07. China remains largest import market.
Exports to other largest sea freight export markets showed substantial growth, namely Africa
(25.8%), India (28.4%) and other Asian Markets (28.4%). Over the last 6 years, import volumes
and value to China and India have consistently grown, while imports from Japan increased
following three consecutive years of decline. Most of this increase can be attributed to a large
increase in sea freight imports from China, which rose 86,629,230 tones or 218.5%. Other
substantial increases in import volume were seen from Taiwan (23.7%), India (22.2%), Italy
(14.9%), New Zealand (14.9%) and Mexico (70.4%), while noteworthy decreases in export
volume were seen to Netherlands (-14.0%) and USA (-25.2%).
2006/07 saw a mixed result for Chinese and other Asian sea freight exports. Increasing
import value was led by Base Metals (principally Copper Cathodes and Lead), despite recording
a small decrease in import volume in the group. Mineral Products (mainly Liquid Gas and Iron
products) and Prepared Foodstuffs (mainly packed FMCG products) were the other major
commodity groups showing an increase in value, also backed by increasing commodity prices for
these groups. Prepared Foodstuffs have shown a continual increase in import value over the last 6
years. The 2006/07 increase in Mineral Products and Base Metal Products imports follows 3
years of import value decline in these products. (Base metals used mainly for Automobiles,
Batteries etc.)
The most substantial decrease in export volume was seen in Vegetable Products (grains and
other plant products), with an associated drop in export value. Transport Equipment also saw a
large drop in export value and volume. A decrease in export value continues 3 consecutive years
of decreases in export value in these groups. The most constant export is for dates to neighboring
nations. Dates are of very less demand in Western regions of the globe.
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b.) Perishable Items- Animal Products: Meat, Dairy & Seafood


UAE import products in the Animal Products category include meat, seafood and dairy. Chicken
and lamb meat imports are UAE’s largest sea freight imports in this category. Both Chicken
(110%) and Lamb (22.6%) saw increases in sea freight import value during 2006/07, with
smaller increases in total volume, reflecting the increased price for these commodities during the
period. Lamb imports by air also rose in 2006/07, but imports by air account for only 3.7% of the
total chicken and lamb exports. Over the last 5 years, sea freight lamb imports have been quite
consistent and at a high level. The dramatic growth in chicken imports during 2006/07 comes on
top of steady growth since 2000/01.
The other single largest Animal product commodity is Tuna, with 2006/07 sea freight imports
totaling $65,134,998 and 5,178 tonnes. This is well below the 2002/03 peak of $201,066,102,
with decreases in export value seen during the previous years. In addition to the sea freight
imports, Tuna is also imported by airfreight. Similar decreases were seen in both sea and
airfreight imports.
Frozen Prawns, increased in volume and value (7.0%) during 2006/07. Grated Cheese (including
Cheddar) remains an important dairy import by sea with yearly exports fluctuating between $36
and $49 million over the last 6 years. Cheese curd exports increased substantially during
2006/07. Imports are mainly from Denmark, Switzerland.
Grain: Wheat, Rice is UAE’s single largest volume import commodity. Import volume and value
dropped across most major commodities in the grain category. Actually had an increase in import
volume for Rice and Wheat for the year 2006-07.
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[CHAPTER 2]
Industry Profile

2. Logistics Industry
2.1 LOGISTICS (UAE - Middle East)

Logistics is the management of the flow of goods, information and other resources, including
energy and people, between the point of origin and the point of consumption in order to meet the
requirements of consumers. Logistics involve the integration of information, transportation,
inventory, warehousing, material-handling and packaging. In terms of value, global logistics
industry has been estimated to be more than USD 235 billion and make up significant part of the
GDP with regard to India. The Middle East is currently India's top export destination for a
burgeoning consumer electronics sector. Exports reached $175 million in 2005-06, an increase of
96 percent over the previous year, according to the Electronics and Computer Software Export
Promotion Council (ESC). The growing trade reciprocity with China, 63 percent of respondents
to a recent China supplier survey, Middle East Export / Import Opportunities, cited the Middle
East as the next "hot" import market for Chinese-manufactured goods.

UAE is now in a stage of transition from an import substitution closed economy model to an
outward oriented trade regime. The importance of logistics as an enabler of trade and economic
growth is worth mentioning. Massive improvement in infrastructure for transportation leads to
present and future development in trade, resulting in the economic growth of the nation. While
around Dh.200, billion of investments have been made during last 5 years to augment port
facilities in the country (UAE), equally massive investments have also been made in road
networks. The logistics/shipping/freight sector has received keen attention from both investors
and government.

On the positive point of view, new opportunities are opening up for the sector. Trade volumes
both overseas and inland are growing very fast. The pace of growth in the specialized sectors like
Liquid Natural Gas (LNG), Containers, Goods, Electronic Equipments etc. are comparatively
much higher. Integrated logistics and multimode transportation are opening up new business for
logistics/ shipping companies.
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2.2 Logistics Management and Logistics Management Software

Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective forward and reverse flow and storage of goods, services and related
information between the point of origin and the point of consumption in order to meet customers'
requirements. A professional working in the field of logistics management is called a logistician.
Software is used for automating logistics activities which helps the supply chain industry in
automating the work flow as well as management of the system. Very few generalized software
are only available in the new market in the said topology. This is because there is no common
rule to generalize the system as well as work flow even though the practice is more or less the
same. Most of the commercial companies do use one or the other custom solution. There are
various software that are being used within the departments of logistics mainly in Conventional
Departments and for Container Trucking.

a. Business Logistics
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 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.
In business, logistics may have either internal focus (inbound logistics), or external focus
(outbound logistics) covering the flow and storage of materials from point of origin to point of
consumption. The main functions of a qualified logistician include inventory management,
purchasing, transportation, warehousing, consultation and the organizing and planning of these
activities. Logisticians combine the professional knowledge of each of these functions so that
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there is a coordination of resources in an organization. There are two fundamentally different


forms of logistics. One optimizes a steady flow of material through a network of transport links
and storage nodes. The other coordinates a sequence of resources to carry out some project.

b. Production Logistics
The term is used for describing logistic processes within an industry. The purpose of production
logistics is to ensure that each machine and workstation is being fed with the right product in the
right quantity and quality at the right point in time.

The issue is not the transportation itself, but to streamline and control the flow through the value
adding processes and eliminate non-value adding ones. Production logistics can be applied in
existing as well as new plants. Manufacturing in an existing plant is a constantly changing
process. Machines are exchanged and new ones added, which gives the opportunity to improve
the production logistics system accordingly. Production logistics provides the means to achieve
customer response and capital efficiency. Production logistics is getting more and more
important with the decreasing batch sizes. Even a single customer demand can be fulfilled in an
efficient way. Track and tracing, which is an essential part of production logistics - due to
product safety and product reliability issues - is also gaining importance especially in the
automotive and the medical industry.
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[CHAPTER 3]
Company Profile

When it comes to supply chain management, the answer is:

“Leadership, Innovation and Quality Solutions”

What Lintas Freight and Logistics does:

• Freight Movement
• Cargo/ Freight Management Solutions
• Full Truckload & Solution Providers
• Contract Packaging & Other Services
• Warehouse Operations (Outsourced) and Management
• Logistics 3PL
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3. Lintas Freight & Logistics LLC Overall View:


3.1 Vision and Mission

Lintas Freight and Logistics: Best People. Best Processes. Best Value.

a. Vision

To become a leading freight, transportation, clearing and logistics company in the Middle
East. To be the recognized industry leader, through total commitment to customer service, by
maintaining our uncompromising integrity, in the support and development of our People,
Communications and Systems in sustained growth and profitability.

b. Mission

To set the standard for excellence in global logistics through total commitment to quality in
people and customer service, with superior financial results. To solve reliable transportation and
logistics services to the needs of the business community. Reliable services means on-time
delivery, undamaged goods, and correct documentation in case of deviations. To perform
continuous business improvement in order to meet and exceed customer expectation, To create
sustainable business growth in order to enhance the prosperity of employee and benefit
shareholders.

Decisions can impact the success of the company as much as the performance of the supply
chain. No matter what industry or region of the world other organization do business in, the
supply chain is an integral part to the success as same as the products, the services, and the
people. In 2002, Lintas Freight and Logistics Services, LLC was formed to build on the global
distribution experience to help other companies lower distribution costs while improving
customer service and brand loyalty.
Lintas Freight and Logistics is a technology-based company providing customized solutions that
transform distribution to a source of competitive advantage. Main motive is to provide integrated
solutions from managing transportation, inventory, and distribution centers to sophisticated
forecasting, information management, and network consulting services. Today, Lintas Logistics
serves more than 35 client companies, globally, in an array of different market sectors.
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The organization mission is to provide best value, integrated freight and logistics solutions to
clients in time-sensitive, service-critical businesses. Organization tries to leverage and
continuously improve the capabilities. Our clients trust us and depend on our Best People and
Best Processes to help them succeed.

3.2 Lintas Freight and Logistics Service

Today, Lintas employ many professionals in their branch offices and in fields (Ports), dedicated
to helping freight, transportation, clearing, forwarding and logistics needs. Young, energetic,
professional, and passionate: their humble beginnings, satisfying customer needs has been the
driving force behind every Lintas Freight & Logistics employee.

Lintas provide these services around globally and main focus to UAE and Indian markets

Lintas Freight and Logistics, focus on main areas they are:

a. Customer service to a higher level.

b. Partnering to seeking the right answers.

c. Finding solutions that optimize cost and service.

d. And always asking, how can we serve you better?

e. Analyzing every opportunity, every challenge to provide a custom solution that works best for
customer.
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3.3 Continuous Improvement in the Organization

Lintas Logistics employees and other contracting people and other exceptional people are the
cornerstone of organizations service, they are experts in their fields. Energetic, always looking
for ways to drive cost out of the supply chain and all the while working to improve the service.
Initially from the beginning, organization has hired only the best and brightest. The most
committed. Every member of the team is empowered to create and implement client-centered
solutions. Deploying the management team regionally means decision-making and is kept local,
on-the-scene. The team structure means good ideas can come from anywhere within the
company.

a. Customers need solutions now. Lintas Freight and Logistics get them on that
moment.
With world-class technology as the backbone of the solutions and service. Integrating
systems and providing real-time information to help reduce cost by moving the products
of customers to market as efficiently as possible. Organizations “Can Do” culture is
rooted in customer service, flexibility and innovation. It’s been that way since the Lintas
Freight and Logistics organization was launched over 5 years ago. Organization has got a
rich tradition of redefining service for the supply chain management, freight management
and logistics industry. This commitment to quality customer service led Lintas Freight
and Logistics to become the third-party logistics provider to be certified by UAE as best
system standards. Today, the Quality Management System not only serves as the
foundation of the on-going Continuous Improvement in day-to-day procedures, it also
serves as the cornerstone of the Lintas Freight and Logistics. The process driven approach
to problem-solving helps the organization exceed customers' expectations, as the
organization helps tackle service and cost issues within their supply chains.
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3.4 Organization Functions:

a. Freight Forwarding

Departments typically arrange cargo movements to an international destination. This department


has the expertise that allows them to prepare and process the documentation and perform related
activities pertaining to international shipments. A freight forwarder organizes the safe efficient
movement of goods on behalf of an exporter, importer or another company or person, sometimes
including dealing with packing and storage. Taking into account the type of goods and the
customer’s delivery requirements, freight forwarder array, the best means of transport, using the
services of shipping lines, airlines or road and rail freight (Indian Markets) operators.

Functions:

i. Researching and planning the most appropriate route for a shipment. Taking account of
the perishable or hazardous nature of the goods, cost transit time and security.
ii. Arranging appropriate packing. Taking account of climate, climate, terrain, weight,
nature of goods and cost, delivery or warehousing of goods at their final destination.
iii. Obtaining, checking and preparing documentation to meet customs, excise and insurance
requirements, packing specifications and compliance with overseas countries regulations and
fiscal regimes.
iv. Offering consolidation services by air, sea, and road.
o Ensuring cost effective and secure solutions to small shippers with sufficient cargo to
utilize their own dedicated units.
o Liaising with third parties to move goods by road, air or sea in accordance with
customer requirements.
o Arranging insurance and assisting the client in the event of a claim.
o Arranging payment of freight and other charges or collection of payment on behalf of
the client.
o Transmitting data by internet and satellite systems, enabling real time tracking and
tracing of goods.
o Arranging charters for large volumes out of gauge or project movements by air and
sea.
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o Acting as broker in customs negotiations worldwide to guide the freight efficiently


through complex procedures
o Arranging courier and specialist hand carry services
o Maintaining visibility and control through all phases of the journey, including the
production of management reports and statistical and unit cost analysis
o Acting as consultant in customs
o Maintaining current knowledge of relevant legislation, political situations and other
factors that could affect the movement of freight
o At more senior level, the role may also involve managing staff and overseeing
activities within a department or specializing in a particular area, such as sea freight
or air freight.

b. Logistics Field: Bulk Operations

The main function in this department includes identifying the customers and collecting
information about the amount of material to be exported, the product, place of exports. The
department also undertakes cargo booking, provides information on the rates, the schedules, the
arrival, departure time, name of the ship, transshipment details and does the follow up.

Functions

i. Identifying the customers by the marketing person of this department.


ii. Convincing the shipper of the services that company provides to be better than the other
shipping service providers.
iii. Enquire about the place or commonly referred to as the destination port to which the
shipper would like to export the cargo.
iv. Enquire about the type and quantity of the cargo, that he would like to export.
v. The type of container and the number of containers that the shipper would like to take.
vi. Analyzing the rate the shipper expects from his cargo movement .
vii. Informing the shipper the rate and negotiating with him.
viii.Scheduling the arrival and department time of the vessel
ix. Listing out the transshipment details and do the follow up.
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c. Clearing and Forwarding (C & F)

The main function of C&F department is to undertake the customs formalities on behalf of the
exporters or importers. The documentation process and clearing activities are done by this
department.

Functions

i. Preparation of various kinds of bill of entry and shipping bill.


ii. Arrival and clearance of vessels.
iii. Determination of value for assessment.
iv. Conversion of currency.
v. Nature and description of documents to be filed with kinds of bills of entry & shipping
bill.
vi. Procedures for assessment and payment of duties.
vii. Examination of merchandize at the customs stations.
viii. Prohibitions on imports and exports items.
ix. Re-importation and conditions for free re-entry.
x. Check offences under the act
xi. Refund procedures, appeals and revision petitions.

d. Network Design

A Logistics Network Design initiative is a strategic analysis of entire supply chain.


Some of the strategic questions are:
• To ensure enough facilities to meet future capacity requirements?
• Which facilities should be closed and/or consolidated?
• Is there an opportunity to make changes to the network to reduce logistics costs?

Develop the Current Financial Model:


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Before making sensible decisions on what changes to make the network, a ‘base case’ financial
model needs to be developed. It should include the costs of all logistical activities such as
Warehouse costs, Transportation costs, Inventory costs and Order Processing costs.

Software Selection:
Due to the complexity of this analysis, a network optimization software package is in order. The
software selection phase may be completed concurrently with the financial model-building phase
above. One person on the project team should be responsible for sourcing the right software to
meet the projects modeling needs.

Data Gathering & Validation:


This is one of the key drivers to a successful project. It is imperative that the data from your
current data warehouse (transactional data) be accurate. For example, when an item is received
into the warehouse, are the correct product characteristics captured accurately? Some
characteristics of interest would be cube, weight, carton dimension, hazardous materials, etc. One
of the activities further into the project will be to create a summary of the product flows. This is
accomplished by creating family groupings of products. If the data is not ‘clean’ the flows will
be misrepresented and this will affect the accuracy of the model.

Analyze Current State of Operations:


A throughput and capacity analysis should be completed for the existing operations. This will
help determine if there is additional capacity in the existing facilities or if there is excess capacity
available. This will help develop the ‘scenarios’ later on. The impact to the other logistical
operations may then be identified.

e. Warehousing

A warehouse is a commercial building for storage of goods. Warehouses are commonly 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,
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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.

Most 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 inventory by recording warehouse transactions.

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.

The Warehouse are to be well guarded with safety provisions to counter pilferage, fire, floods &
other calamities. The Warehouses are in convenient locations & well connected by roads to
facilitate on time delivery to customers.
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f. Crossdocking – Containerization

Crossdocking is a practice of logistics of unloading materials from an incoming semi trailer truck
and loading these materials to outbound trailers or rail cars, with little or no storage in between.
This may be done to change type of conveyance, or to sort materials intended for different
destinations or to combine material from different origin.

An increasing popular method of shipment is containerization. A container is a large box made of


durable material such as steel, aluminum, plywood and reinforced plastics. A container varies in
size material and construction. Its dimension is typically 8 foot high and 8 foot wide lengths
usually varying. A container can accommodate most cargo but is most suitable to packages of
standard size and shape. Containers can take case of most of 4 main packing problems. Because
of container construction, a product does not have to have heavy packaging, it gives protection
against:

i. Breakage
ii. Moisture
iii. Temperature controlled
iv. Pilferage and Theft
There are mainly 2 types of containers

v. Dry Containers
vi. Special Purpose Containers
 Types / Size
 20 Foot Dry
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 40 Foot Dry
 45 Foot Dry
vii. Open top containers
viii. Flat rack for over sized cargo
ix. 40 foot refrigerated containers/ reefers
x. High cube containers (40 foot, 45 foot & Reefers)

3.5 Organization Structure

Organization is headed by Organization Head, and all other employees report to him. Firm
comprises of 12 employees for internal works and other team for activities including freight
forwarding, logistics, clearing and forwarding. Organization acts as a 3PL for other firms on
behalf of carry/ forward, logistics. Warehouse activities are being outsourced based on the
demand situations, as goods are being stocked in different warehouses, and is based on the
customer requirements.
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3.6 Business Drivers


The following are the business drivers in logistical operation:
a) Cost Drivers: The average materials moved by manufacturers to export market is low, but
where as to import market is high in figure. The high technology portion reaches to 60%
to 72% of imports. Number of labour hours is a factor, tonnage of imports; size of
inventory, number of suppliers, number of batches, number of employees etc. are all
major concern in cost. Lintas Freight and Logistics keep a major favourable concern on
the above, as from the basic get-together of employees during the off peak hours in work.
I was able to figure out, employees were not happy with their present situations in office
and in the working hours. The situation has a major impact in operational stability. The
situation leads to lengthening/of delivery bills and other major invoice forms. As to
manager’s words, it is deciphered that situations are improving day by day. By using
Activity Based Costing (ABC) method of costing the organization can identify
unprofitable warehouse practices, other cost measures in logistics. If Lintas Freight and
Logistics implement cost based on ABC, the firm can improve and eliminate unprofitable
situations, improve and implement new facilities with much broader focus on future. To
any organization cost reduction is the ultimate method to get a much wider profit. As with
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[CHAPTER 4]
Review of Literature
the help of questionnaires and through formal interviews with officials not many
organizations have this generally. All organizations will be implementing the cost method
within the near future.

4. Review of Literature
a. Demand Chain Management
Understanding demand requires a comprehensive knowledge of your customers, You should
know what products / services are demanded by your customers; how do they make their
purchases, how often they order and what constraints they face on the purchasing process. Very
few companies have mastered this concept. Lintas Freight and Logistics was able to know all the
above concepts through considerable focus into customer needs and grievances.

b. Achieving Competitiveness in Logistics, Freight, Supply Chain


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Reduced lead time, inventories, lower operating costs, product availability and customer
satisfaction are the benefits which grow out of effective logistics and supply chain management.
The decisions usually carried on by Lintas Freight and Logistics (3PL), cover both the long term
and short term. Strategic decisions deal with the corporate policies, and look at overall design
and logistic chain structure. Tactical, Operational decisions are those dealing with everyday
activities and problems of the organization. Change is the inevitable factor for each and every
day situation within and outside the organization. The decisions must take into account the
strategic decisions already in place. Therefore organization must structure the logistics ideas
through long term analysis and at the same time focus on every time situations. Furthermore,
market demands, customer needs, transport considerations and pricing constraints are the factors
in order to structure the logistics, freight. Lintas Freight and Logistics realized the fact and are
prepared to face any unexpected situations like inflation/ deflation in the economy, price factors,
climatic problems etc.

c. Operational Fleet Routing & Loading


The organization derives routes in transportation are mainly long-haul (Optimization). For short
haul deliveries, there are ready solutions that are tightly integrated to warehouse management
systems (outsourced facility), to efficiently route fleets of vehicles and vessels and plan picking
and loading. Stipulated time windows for pick-ups and deliveries and vehicular weight and
spatial capacities would be used, as will constraints such as delivery within specified period
25

minutes upon pickup (useful for perishable goods). Time required at various stops - in terms of
fixed time to park and variable time dependent on amount to be loaded or off-loaded - can be
specified. Travel speeds along various types/zones of roads can be stipulated by traffic
information services. The organization schedules arrival and departure times for each stop can
thus be worked out quite accurately. Routes can be generated dynamically and ad hoc backhaul
or other opportunities can also be assigned to the most suitable vehicle. The benefits of
operational fleet routing include considerable reduction in fleet operating cost and improved
customer service with better estimated arrival time.

d. Vendor Managed Inventory


Vendor managed inventory, coordinated by an integrated logistics system, allows inventory to be
optimized together with transportation. Lintas Freight and Logistics try to know the product
value as well as storage capacity (mainly warehouse – how much to outsource). As a routine job
the company collects information on consumption rate, current inventory levels, forecasted
demand and status of shipments. Thus the system can optimize the right quantities of
replenishments to be sent at the right time to ensure that service levels are maintained while
minimizing cost of inventory and transportation.
e. Mode of Transportation
Transportation generally is movement of product, goods, raw materials to different stages in
supply chain. Essentially in supply chain logistics plays a major role, the manner in which
product is moved from one location to another is through road, rail, truck, air, sea.
Lintas Freight and Logistics essentially uses only 2 modes for their operation they are air and
sea. The goods being delivered to end customer is brought to port or to the place through
containers or other methods like wagons, or cold enclosures like frozen storage. As in UAE rail
transport does not exist, so it has got a relevant drawback for the company, as company has to
stick on road for short routes and even routes between states of UAE and which is very much
expensive and increases the operational cost. Lintas Freight and Logistics strategically manage
the procurement, movement, and storage of materials, parts and finished inventory through the
organization and its marketing channels. Essentially from companies’ angle, there are two
categories, initially inbound logistics, i.e., handling goods that are brought into the company,
through road transport and storing and making them available. Another main phase is the
26

outbound logistics, taking the cargo or the goods through channels, and is being done with
considerable effort to various parts of the world as per the customer requirements.
i. Intermodal Transportation System Used
This is the use of one or more than one mode of transport to move a shipment to
its destination. Lintas F&L use this in an efficient way. Variety used is road and
sea in the case of organization. Referring to Global trade, this is the only option as
factories and markets may not be next to ports. It helps reduce cost in operation.
Helps reduce cost that cannot be matched by single mode. Essentially it is very
convenient for shippers as well as consignee.
ii. Attributes: The price charged is reasonable with regard to the consignee, as
organization has got a long term relation with all the customers. Usually goods
being transported are electronics and frozen stocks from warehouse. The relevant
focus is on warehouse, transportations services offered. Service is another aspect
which focuses the advanced need of the customer, initially with proper timing
maintenance, order management. As the consignee is offered service by 3PL like
Lintas F&L with favorable order management, and ease of doing business is
attained by logistics organization like Lintas Freight and Logistics.
f. The Challenge Faced by Organizations
In today’s world, competence is taking on new dimensions. The ability to compete is being
determined by the degree of responsiveness to customers and key issues handling. How fast you
deliver the goods/ products, what the price paid by customers and what value customer is getting
throughout the service is considered in a schematic and ordered way. Markets are quick
demanding and customization of each logistics activities is essential for each customer, and has
become the essential factor in logistics management.
Lintas Freight and Logistics faces lot of ups and downs in each operation and improves operation
on each situation while dealing with each customer. Lintas freight and Logistics dominant
improvement methods used are:
i. What are the customer expectations?
ii. How are your competitors performing in each aspect of operations?
iii. Determining the gaps in each phase and try to fill it.
27

g. Economic Ordering Quantity (EOQ)


Efficient order quantities consider the Purchase Order Cost (POC), the Annual Demand rate
(AD), the Inventory Carrying Rate (ICR), and Unit Inventory Volume (UIV). Large Order
Quantities yield high inventory levels and high inventory carrying costs but fewer orders and
lower ordering costs. High ordering costs and demand rates suggest large order quantities. High
ICRs and high unit inventory values suggest small order quantities.

Generally during research the analysis shows, few organizations believe EOQ analysis is
outdated and quite few with enhanced focus on it. There is relevant need for EOQ in this era.
EOQ analysis should be completed as a part of any inventory strategy. The analysis suggests
appropriate reordering intervals for all items each organization is handling. Competitors focus on
reducing the costs of placing purchase orders. The lower the purchase order cost, the more
economical it becomes to order in small increments and the less inventory will be there in the
system. The purchase order costs is typically dominated by the labour and paperwork costs of
planning, negotiating, executing and tracking purchase orders. Large number of organization
extent to which these functions can be automated via automated purchase order planning, e-
procurement, online catalogs, online bidding and online exchanges, is the extent to which
inventory levels and lost sales costs may be reduced in the supply chain and there to the
efficiency of logistic operations. Lintas Freight and Logistics has a considerable drawback in this
scenario comparing to the other firms. Cost is high in this situation for ordering costs to the firm.

4.2 Studies on Inventory, Back Order, Lost Sales, Stock Outs, Packaging and Packaging
Materials, Documentation from Lintas Freight & Logistics

a. Inventory
Inventory is a list for goods and materials, or those goods and materials themselves, held
available in stock by a business. Inventory are held in order to manage and hide from the
customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease
the effect of imperfections in the manufacturing process that lower production efficiencies if
production capacity stands idle for lack of materials.
There are three basic reasons for keeping an inventory:
28

i. Time - The time lags present in the supply chain, from supplier to user at every stage,
requires that you maintain certain amount of inventory to use in this "lead time"
ii. Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand,
supply and movements of goods.
iii. Economies of scale - Ideal condition of "one unit at a time at a place where user needs it,
when he needs it" principle tends to incur lots of costs in terms of logistics. So Bulk
buying, movement and storing brings in economies of scale, thus inventory.
[The Management of Business Logistics, Coyle, Bardi, Langley]

b. Back Order
A company having to back order an item that is out of stock will incur expenses for special order
processing and transportation. The extra order processing traces the back orders movement, in
addition to the normal processing for regular replenishments. The customer usually incurs extra
transportation charges because a back order is typically a smaller shipment and often incurs
higher rates. The seller may need to ship the back ordered item a longer distance. The seller may
need to ship the back order by a faster and more expensive means of transportation. We could
estimate the back order cost by analyzing the additional order processing and additional
transportation expense. If customers always back ordered out of stock items, the seller could use
this analysis to estimate the cost of stockouts. The seller could then compare this cost with the
cost of carrying excess inventory.
[The Management of Business Logistics, Coyle, Bardi, Langley]

c. Lost Sales
Most companies have competitors who produce substitute products, and when one source does
not have an item available, the customer will order from another source. In such cases the stock
out has caused a lost sale. The seller’s direct loss is the loss of profit on the item that was
unavailable when the customer wanted it. Thus, a seller can determine the direct loss by
calculating profit on one item and multiplying it by the number the customer ordered.
E.g.: If the order was 100 units and the profit is 10$, the loss is 1000$.
29

If the effort is made by a sales man and if the effort is wasted and in that sense it is an
opportunity loss. Whether including such a cost is valid would depend upon whether the
company uses sales people in its marketing effort.
Another aspect is determining the amount of a lost sale may be different and difficult in certain
circumstances. Numerous companies customarily take orders by telephone. A customer may
initially just enquire about items availability without specifying how much is desired. If an item
is out of stock, the customer may never indicate a quantity and the seller will not know the
amount of the loss.

d. Stockout
Cost incurred to a firm when current inventory is exhausted for one or more items. Lost sales
revenue costs are incurred when the firm is unable to meet current orders because of a stockout
condition.

e. Packaging and Packaging Materials


Mainly this is a main division in warehouses. Packaging interacts with the logistics system in
number of different and important ways. The size of and protection afforded by the package
affect the type of materials handling equipment used and the level of product damage incurred.
The package has an impact on the stacking height of the product in the warehouse and thereby on
the utilization and cost of the warehouse. Packaging is quite important for effective damage
protection, not only in the warehouse but also during transportation. Packaging may contribute
nothing to a products value but its influence on logistics costs is considerable.
Packaging size may affect a company’s ability to use pallets or shelving or different types of
materials handling equipment. Many companies design packages that are too wide or too high for
efficient use of either a warehouse or transportation carrier. So, coordinating packaging with
warehousing and with transportation is quite important. We need to note, poor packaging can
contribute to higher handling charges and result in lower future sales if the goods arrived
damaged.
30

[CHAPTER 5]
Research Methodology
Two types of packing exist: consumer packaging and industrial packaging. Consumer
packaging provides information important in selling the product. i.e. giving the product most
visibility when it comes with others on the retail shelf. On the other hand industrial packaging is
of primary concern to the logistics. The packaging protects goods that a company will move to
store in the warehouse and also permits the company the effective use of transportation vehicle
space.
Materials generally used in previous years was wood and other harder materials for no
breakage, but it added considerable shipping weight to the transport and it further increased
transportation cost. Generally new era has come up with efficient packaging materials,
organization nowadays use most cost effective packaging with focus on security and minimizing
cost. Cushioning materials protect the product from shock, vibration, and surface damage during
handling. Cushioning materials include shrink wrap, air bubble cushioning, cellulose wadding,
and plastics. Companies often use shrink wrap for consumer packaged goods. Packaging also
helped reduce pilferage and product tampering in warehouse and during transport. Air bubble
cushioning is made of plastic sheets that contain air pockets. There are other factors while
considering packaging they are environmental protection. They are considered in situations of
perishable items like food and drugs.

5.1 Objective of the Study:


• To compare the effectiveness of logistics management at Lintas Freight and Logistics and
to bench mark the organization with respect to the industry.
• To have a thorough understanding of how logistics and freight industries work.
• To identify the drivers behind Logistics and Freight.

5.2 Research Problem:


The need for the study was to assess the effectiveness of Logistics Management in the Lintas
Freight & Logistics LLC, compared with other organization in the same industry. The
31

organization also needs relevant data as to how it can improve its management policies in order
to gain future market share.

5.3 Research Methodology:


The type of research is analytical. Data regarding the division of logistics management such as
Freight, Warehousing, Crossdocking, Network Design etc. in which Lintas Freight and Logistics
are at present in business were collected from other similar firms in the industry. The indicators
selected are ease of service, client handling, customer service, website information, employee
efficiency in general. Other indicators for the freight and warehouse divisions are lead-time,
inventory management, product availability; time elapsed in transit, operating cost and customer
satisfaction. The collected data was analyzed and performance of Lintas Freight & Logistics LLC
was evaluated. As to my study I believe I have selected the right mix of techniques for the
comprehensive approach, which can be suited well for the organization.

5.4 Sample Selection:


Convenience sampling is used for study, as I’ am interested here in getting an inexpensive
approximation of the truth. Operations of Lintas Freight & Logistics LLC are mainly
concentrated at large scale AL-Hamriya Port, Dubai and having its branch office in Mumbai. The
total numbers of logistics organizations in and around this port are 6000 in number, which
constitutes the population. Similar, 100 organizations having major operations in the Freight and
Logistics have been selected as sample for the survey. The selection was based on the sampling
said above.

5.5 Method of Data Collection:


Primary Data: The major tool used was interview with managers and staff of the branch office,
questionnaire was developed focusing various aspect.
32

[CHAPTER 6]
Data Analysis and Interpretation
Secondary Data: Books of Logistics Management for literature reference, Internet Web Portals,
Websites of each firm, Company Brochures.

5.6 Statistical Tools:


 Percentage Analysis
 Bar Diagrams
 Pie Charts

5.7 Limitations of Study:


• A few organizations did not publish the exact values for each question especially in sales
turnover and other similar figures.
• The study was conducted in the Mumbai area only aiming at the main Dubai Centre and
confined to the freight division of the logistics management.
• Certain monetary values were not being filled by organizations.
• Due to organizations security reasons documents like Bills, Warehouse Bills, etc could
not be gained.
• Most of the questionnaire answers were filled over internet email facility; therefore
contact was through phone and emails.

6. Data Analysis and Interpretation

The data collected through the questionnaire are analyzed to know about the respondents
opinions about various particulars asked in the questionnaire. The data collected from the
33

questionnaire was entered into spread sheet and the data has been interpreted. The questionnaire
comprises of fourteen questions with subparts for each.

The topics covered are with decisions of each operational area, employee numbers of each firm,
profitable area in operation, catering location, service offering, organizational effectiveness,
inventory, location, product availability and customer satisfaction.

a) Which are the logistics services organizations offers?


Table -1 Service Offer
Sl. No. Service Percentage
1 Freight 100
2 Warehousing 89
3 Crossdocking 88
4 Network Design 66
5 Value Adding 98

Chart-1 Service Offer


34

The pie chart above shows the service offer of each organization. The chart shows that 100%
of the respondents provide freight service and almost 90% provide Warehousing and
Crossdocking. Only 66% were providing service of Network Design. Other service includes
value adding, which represents 98% of the sample. It includes packaging, labeling etc.

b) Operating with other logistical providers and reasons for decisions.

Table -2 Operate With Logistical Providers

Sr. No. Decisions Percentage


1 Operational Stability 11
2 Cost Effectiveness 10
3 Customer Needs 36
4 Other 96

Chart-2 Operate With Logistical Providers


35

The pie chart above shows the operational decisions and reasons for operations with other
logistical providers. The chart shows that 96% of the respondents operate with other service
providers for different reasons like coordination, clearance, bulk operations etc. Almost 36%
have operations with other providers as per customer needs. Only 11% and 10 % were
providing service along with other providers for the purpose of operational stability and cost
effectiveness respectively. It is stated that 96% of organizations operate with other logistical
providers and remaining 4% as standalone.

c) What is the mode of decisions regarding the operations?

Table-3 Mode of Decision

Sl. Operational Decision Percentage


No.
1 Strategic 37
2 Tactical 88
3 Operational 63

Chart-3 Mode of Decision


36

The pie chart above shows the mode of decisions regarding the operations. The pie chart shows
88% of organizations take tactical decisions followed by 63% with operational decisions and
37% strategic decisions. Most of the organizations have a mixture of all the decisions in their day
to day as well as in long and short term plans.

d) Which is the area of the activity, that organizations feel best in their service?

Table-4 Best Activity


Sl. No. Service Percentage
1 Freight 98
2 Warehousing 86
3 Crossdocking 87
4 Network Design 4
5 Value Adding 97

Chart -4 Best Activity


37

The pie chart above shows the best activity which organization feels in their operations. The pie
chart shows 98% of organizations have freight in the predominant area, followed by 86% of
warehousing. Another significant area is Crossdocking with 87% as best activity. There is only a
minor activity based on network design with 4% in pie graph. Most of the organizations have a
mixture of all the activities in their day to day and 97% of organization says other activities bring
in more revenue and the best of their activities, which includes packaging, labeling etc.

e) Number of employees in each type of the service rendered of the organizations

Table-5i Employees
Sl. Departments In Organizations Number of Percentage
No. People in Each
1 Top Management 452 11
2 Operations 468 11
3 Accounts / Finance 451 11
4 Marketing 517 13
5 Human Resource 371 09
6 Documentation /Others 1847 45

Table- 5ii Employees in Lintas F&L


Sl. Lintas F&L : Departments Number of Percentage
38

No. People
1 Top Management 3 14
2 Operations 4 18
3 Accounts / Finance 4 18
4 Marketing 3 14
5 Human Resource 0 0
6 Documentation /Others 8 36

Table-5iii Employees % of both.


Docu
Top ment
Operatio Acc./Finan Marketin
Manage HR ation/
ns ce g
ment Other
s
Lintas F&L
Employees
Percentage 14 18 18 14 0 36
Other
Organization
Employees % 11 11 11 13 9 45

Chart-5i Employees

The line charts above shows the comparison of employees in each functional division of
organization with Lintas Freight and Logistics. The line chart shows around 14 percentages of
people belong to top management and industry standards has 11 percent, followed by 18% for
39

operations and industry standards has 11%. Human Resource has to be enhanced and need to be
further improved or need to start in the organization. Documentation also needs to be further
strengthened. Marketing comprises of 14% working in the said area. Most of the organizations
have a mixture of top management with marketing in their activities and functional area. Human
Resource comprises of 371 people and other main area is documentation and workers in the areas
of loading, operational area. This comprises of only 36% and industry standards are of 45%.

f) What are the locations to which the company caters to?

Table- 6i Catering Locations


Sl. No. Catering Locations Percentage
1 Asia 100
2 Europe 6
3 USA 89
4 Australia 86
5 Africa 71
6 Russia 98
7 Middle East 98
8 Other 90

Table – 6ii Catering Locations


Asia Europ USA Austral Africa Russi ME Othe
e ia a r
Lintas
Freight 100 0 100 100 0 100 100 100
Other
Organization
s 100 6 89 86 71 98 98 90
40

Chart- 6i Catering Locations

Chart – 6ii Catering Locations

1
0.8
0.6
0.4
Lintas Freight
0.2
Other Organizations
0
Asia
Europe

Lintas Freight
USA
Autralia
Africa
Russia
ME
Other

The pie chart above shows each organizations catering location in the world. The chart shows
100% of organizations cater to Asian region followed by 6% to Europe and 89 % to USA. Each
organization has tremendous catering locations with 86% to Australia, 71% to Africa, 98% to
Russia, 98% to Middle East, and 90 % to other locations. Locations mentioned as other is
company catering frequently with repeat orders of customers. Chart 6ii shows Lintas Freight and
Logistics can enter European markets and other favourable market is Africa. This can be looked
into very seriously in future business.
41

g) Which division of logistical activity earns the maximum rate of profit for each
organization on a scale of 1-10 and overall profit of each organization?

Table-7i -Maximum Rate of Profit (Lintas F&L Compared with Industry Average)
Profit Scale (1 - 10) Freight Wareho Crossdocki Network Othe
using ng Design r
Lintas F&L Profit Scale 9 4 5 0 6
Industrial Profit Average 7 6.41 5 5 6

Chart-7i - Maximum Rate of Profit


42

Table-7ii –Profit of Organization (All Services Combined)


Lintas F&L Industry Standards
Profit Level in
Percentage 13 15.39

Chart - 7ii –Profit of Organization (All Services Combined)

The bar chart shows each organizations maximum rate of profit in each area on scale of 1-10,
where 1 denotes least profit and 10 denotes the service that fetches excellent profit. The chart
shows Lintas F&L has ample amount of profit in Freight area followed by Crossdocking and
other value adding activities with 9 and 6 in scale. The chart 7i shows industry average value is 7
43

for freight followed by 6.41 for warehousing. It is inferred that freight is giving ample amount of
profit and Cross-Docking, Other including labeling and packaging has industry standards. The
chart 7ii shows profit percentages said by each organization. We can infer that overall profit
percentage for Lintas F&L has 2.39 percentages lesser compared to industry average. The
organization should implement more strategies to reach industry mark.

h) Comparison of service offered by Lintas F& L and rating of other organization in the
industry on a scale of 0- 4.

Table-8 Service Comparison (Scale 0-4)


Ease of Client Customer Website Employee
Service Handling Service Efficiency
Lintas F&L 3 4 4 2 3
Industry Average 3.84 3.76 3.82 3.29 3.83

Chart-8 Service Comparison


44

The chart shows Ease of Service is not up to the mark, it shows only 3 for Lintas F&L and
the industry standards is 3.84. So organization can increase their Ease of Service. Client
handling is satisfactory compared with industry standards. Customer service also has
remarkable value compared with industry. Major area to look into is Website easiness,
Employee Efficiency. It can be brought up with a considerable effort by proper handling of
human activities by Human Resource Department.

i) What is the significant lead-time for each service rendered with previous years data of
each organization?

Table – 9ii Lead Time in Days


LEAD TIME IN Freight Warehou Crossdoc Network Other
DAYS(LT) LT sing LT king LT Design LT LT
Lintas F&L 21 20 30 0 21
Industry Average 23 22 24 10 24

Chart – 9ii Lead Time in Days


45

The above chart shows the service executed last year in logistics area and the significant lead-
time of each area. The chart shows 4122 numbers of freight service jobs has been executed with
average lead-time of 21 days. Similarly warehousing jobs with 224 and lead-time of 22 days.
While comparing with industry standards Freight is dominating and similarly the main lucrative
area is other (Packaging, Labeling etc.), which has 833 in number and 21 days lead-time.
Organizations lead-time is excellent except for Crossdocking. Focus should be to reduce lead-
time and increase more service.

j) Average elapsed time between order receiving and delivery of the service (Inventory).
Table-11 Elapsed Time
Lintas F&L Industry Standards
Elapsed Time 3 6.9

Chart- 11 Elapsed Time


46

The above chart shows the physical verification check and average elapsed time between order
receiving and delivery of the service. The chart shows 89% of organizations have physical
verification. Average elapsed time between order receiving and delivery of service has an
average of 6.9 days. The total value of elapsed time is 613 days for 89 organizations, hence the
average days are 6.9 as explained in the figure for Industry average. Lintas elapsed time is
remarkable compared to industry standards.

k) Were there any shortage/ excess of stocks noted, in the last verification done?

Table -12i Inventory Shortage


Lintas F&L Industry
Inventory Short 12 19.8
47

Chart-12i Inventory Shortage

Table- 12ii Inventory Excess


Lintas F&L Industry
Inventory Excess 0 4.8

Chart-12i Inventory Excess

The above charts show the Inventory Excess and Shortage faced by organization during
verification. It is evident that shortage faced by Lintas F&L is less compared to industry
standards; there is a difference of 8. Another aspect is regarding the excess of inventory; in this
scenario, Lintas F&L has a remarkable lead with comparison to industry.

l) Average number of customer complaints generated and industry average.

Table- 14 Complaints (Lintas with Industry Average)


48

Lintas F&L Industry Average


Complaints Generated Last 290 179.71
Year

Chart – 14 Complaints (Lintas with Industry Average)

The above chart shows average number of complaints. The complaints for Lintas F&L is 290 and
whereas to industry average is around 180 in number. Hence organization should try to reduce
the complaints arising. This can be achieved by increasing new modern methods and facilities to
customers. Organization need to heavily focus onto the issue to reduce number of complaints
arising in operations, customer satisfaction and other similar areas.

m) How does the organization follow up to retain customers.


Table-15 Customer Retention
Sl. No. Service Rating
1 Customer Complaints given preference 100
2 Phone 100
3 Service Intimation 100
4 Gifts 3
5 Email 100
49

6 Fax 11
7 Other 100

Chart-15 Customer Retention

The above chart shows preference of complaints and how organization follow up to retain
customers. Its been noted that cent percent of organization follow up with customers for
customer complaints. Most of the preferable methods for contacting customers for new service
intimation and customer realtionship are telephone, email and other methods like marketing /
sales, customer office visit with 100 rating. The least preferred are gifts and fax with 3 and 11 in
rating.

n) Does the organization has proper system for handling customer handling, and does
customer know whom to contact when a problem arises, ascertain the level of
satisfaction, feedback by customer and is customer suggestion given preference in the
organization?

Table- 16 Proper System


Sl No. Service Rating

1 Proper System 100


50

[CHAPTER 7]
2 Customer Know 100
3 Contact Whom 94
Findings and Suggestions
4 Customer Feedback 88
5 Customer Suggestion 83

Chart-16 Proper System

The above chart shows all organization in sample has propers system for handling customer
complaints. Its been revealed that 100% from sample, customers know the sytem of handling
customer complaints in the firm. Whom to contact in case of complaints is having rating of 94.
Customer feedback and customer suggestion is having rating of 88 and 83 respectively.

Findings

i) The quality of service as rated is above average in the case of Lintas compared to
industry. But the organization should continuously try to improve the quality aspect
as is being done by other players in the field. This is quite a necessity as otherwise the
figures may fall down. Continuous improvement is a must so that the customers will
prefer Lintas Freight & Logistics LLC as their first choice in Logistics and Freight
51

industry category. This can be achieved with more modern equipments and proper
guidance to employees and the rating can go high to excellent service.

ii) Pricing of service is satisfactory, which organization can further enhance with proper
management. Present employee strength is satisfactory compared to other
organization but more focus should be made to documentation areas where the firm
has lesser employees compared to other organizations.

iii) Network Design is an area that the organization should not start immediately due to
low rate of returns is recorded as the industrial average. Design of new warehouse
areas and proper allocation of work with more sophisticated software facility can be
done through outsourced way during implementation.

iv) Decision making is excellent for organization with respect to other organization in the
industry.

v) Operation with other logistical providers should be given more preference to achieve
cost effectiveness.

vi) Rearrangement of employees may be a better solution. Down sizing of personnel in


the Finance and Accounts section and deploying them for the HR function separately
is recommended.

vii) The organization client handling, ease of service and customer service is having
remarkable difference from the industry standards. The main focus need to be on the
ease of website and employee efficiency. From the data we can infer that areas which
need to be improved are Website and employee efficiency. Employee efficiency can
be improved with a proper Human Resource department.
52

viii) Service offer presently has good impact with other organizations service offers. The
remarkable areas are Freight, Crossdocking, and Value Adding. Company can further
enhance operations of Value Adding through proper methods.

ix) As logistics industry is concerned Freight is the dominant service followed by


Warehousing and Cross-Docking. Another important area where organizations feels
very lucrative is Value Adding .

x) It is observed that most of the organizations operate with other logistical providers.
96% of organizations are doing it and remaining 4% organizations stays independent.
It is inferred that for efficient logistical activity, support from other organizations is
essential.

xi) Tactical decisions are mostly followed by organizations followed by operational and a
few strategical.

xii) Freight and Value Adding is considered to be the best service which organizations
offer in industry. Another major observation is about Network Design, it has low
value and no organization feels it to be lucrative area in industry.

xiii) Organization can enhance operations to European areas and another major favourable
area is Africa. From data Lintas can get good market share if they cater to African
regions.

xiv) Organization profit is good compared to industry standards for freight and can further
work on warehousing. This shows a difference of 2 points from industry standards.
Whereas for Cross Docking it shows same as to industry standards.
53

xv) Commenting on ease of service, website and employee efficiency, the organization
needs to further improve.

xvi) Freight Service when compared with other industry freight service has got more
value. Warehousing has a difference of 30 and is negligible but Cross-Docking need
to be reviewed. Another favourable area as mentioned earlier is Value Adding and it
shows a difference of 447 works done compared to industry standards.

xvii) From the observation 89 organizations have inventory verification. The lowest
observed days for elapsed time for Lintas F&L are 3 days and industry standards with
6.9 days. Hence it is a remarkable value for Lintas F&L.

xviii) In the sample taken only a few organizations has inventory short and excess. Values
are 119 and 29 for shortage and excess. Lintas F&L had shortage, but no excess in
inventory and while comparing with industry Lintas F&L have remarkable value.

xix) The efficient methods for retaining customers are Phone, Email, Sales Agents and
least preferred methods are Fax and Gifts.

Suggestions

i) Organization can further strenghten the employee strength in the documentation


department. This can lead to further rapidity for operations.
54

[CHAPTER 8]
Conclusion
ii) Organization can initiate Human Resource Department to further enhance employee
motivation. This will have favourable impact for the operational as well as total
strenghtening of organization

iii) Decision making is quite effective and can be followed for future operations

iv) Operations with other logistical providers need to be enhanced further for operational
effectiveness, more focus should be given to customer delight and cost effectiveness.

v) Quality of service can be further enhanced to increase customer delight.

vi) Client handling and service need to be followed in the same way and can be further
enhanced with more support. This can be achieved by proper guiding of employees
and other workers in the logistical area

vii) Lintas can enter other markets in the Middle East especially to Saudi Arabia
where the potential of market is very high for Logistics industries and can even
diversify to other areas in logistics.

viii) Lintas can focus to African regions for freight handling, as from the data the potential
market is high for those regions.

Conclusion
The universe everyday is witnessing unimaginable growth in majority of the industries. The
logistics and freight industry is one such industry that is rapidly growing. Worldwide logistics
55

[CHAPTER 9]
Bibliography
industry is distinguished by fast technological advances and is growing rapidly than most other
industries over the past years. With stiff competition around, the company is likely to reduce the
profitability But with proper management of operations and by proper customer desired services,
and also effectively utilizing its alliances it can maintain and improve the performance. Joint
operational ventures for developing the customized services for its steady growth. The
organization has enormous opportunities to grow beyond the expectations.

Lintas Freight& Logistics LLC has come a long way from being just a service provider. The
organization now has the value of being an ultimate service provider for Freight, Transportation,
Cross-docking and Value Adding as per customer needs. The present scenario and the future of
the organization with regard to the management are satisfactory. The organization can increase
the market share by improving with more state of art technology. The organization can diversify
into related other business areas like Warehouses for lease to other organizations, state of art
technology providers for other organizations. More importance is to be given for HR
development by having a separate department for it. With the development of such a department,
several favourable impacts such as increase in out put per employee, increased loyalty, team
spirit etc can be generated.
As far as Lintas Freight & Logistics LLC is concerned it can be stated that through its
excellent service and aggressive logistics service, organization has shown a noticeable increase in
the market share. However, there are some areas where the company is not at the top-most
position but it can certainly gear up in the near future and is committed to acquire that spot. On
implementation of the above recommendations, the management can lead Lintas to the top most
position when bench marked in the coming years.

Bibliography
Reference:
a) Logistical Management – Tata McGraw 2000 Edition.
56

Written by Donald. Bowersox, and David. Closs.


b) The Management of Business Logistics – 7th Edition:
Written by Edward J. Bardi, C.John Langley, and John Joseph Coyle
c) Logistics and Supply Chain Management: Creating Value - Adding Networks
Written by Martin Christopher.

Websites:
i) Source: http://www.idsc.com.sg/images/service_logistics_img1.jpg
ii) http://www.indexuae.com/Top/Business_and_Economy/Services/Logistics
iii) http://www.lintasfreight.com/
iv) http://www.uae-shipping.net/Lintas-Freight-Logistics-L.L.C..html
57

Annexure

Logistics Survey
-------------------------------------------------------------------------------------------------------------

Details of the Organization

Name: ___________________________________________________

Location:_________________________________________________

How long are you there in Business? _____________________Years _______________

---------------------------------------------------------------------------------------------------------------------
58

1. a) Which are the various Logistics Services you offer?

Freight Warehousing Crossdocking


Network Design Other Value Adding Services if any

2. Number of employees in each type of the service rendered

S Divisions / Number of Employees in your various Total


l. logistics division
N Functional area
o. Freight Warehousi Network Crossdocki Other
ng Design ng

1 Top Management

2 Operations

3 Accounts/Finance

4 Marketing/Sales

5 Human Resources

6 Others if any

3. Which is the area of activity; you feel you are the best?

Freight Warehousing Crossdocking

Network Design Other Value Adding Services if any


59

4. Which division of logistical activity earns the maximum rate of profit?

Rate them on Scale of 10


(Best 10 Average 5 Worst 0)

Freight

Warehousing

Crossdocking

Network Design

Any Other
(specify)___________

5. a) What are the locations to which your company caters to?


i) Asia ii) Europe iii) USA iv) Australia v) Africa vi)Russia
vii) Within Middle East only viii) State if any other locational specialization

___________________________________

___________________________________

b) Please rate the service offered by your organization

Excellent Good Fair Poor Very Poor

Ease of Service

Client handling

Customer Service
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Website Information

Employee Efficiency

d) What is significant lead time in days for each consignment and Number of service
executed last year. (Kindly mention with previous year’s data)

i)Number of ii.) Number of transport


Service Executed orders that have been
in last year (2007) executed, such that the
delivery is on time as per
Service the agreed lead time?

Freight

Warehousing

Crossdocking

Network Design

Value Adding
Note: Kindly mention the answers with last year’s data (2007) from questions 10 to 12.

10. Inventory
a) What is the average elapsed time between the time of receiving order from the
customer to your firm to release the item from the ware house and the time the item
is ready for moving from the ware house with proper documentation.
________________________ Days

ii) Were there any shortage / excess of stocks noted, in the last verification
done?

No shortage / excess of stocks noted


61

Shortage of stocks noted

Excess of stocks noted

11. Customer Satisfaction

a) Is customer complaints given preference in organization:


Yes / No

b) How your organization follow up to retain the customers


(Put Number 1 on desired coloumn)

No. Method Number

1 Phone Call

2 New Service Intimation to Customers

3 Gifts

4 Email

5 Fax

6 Other methods if any ________________

c) What is the total number of customer complaints received in each division last year?
______________Number

d) Do you have a proper system of handling customer complaints?


Yes / No

e) Do you have a system of contacting customers after completing all the formalities of
an order, to enquire whether they have any complaint and to ascertain the level of
satisfaction the customer enjoyed?
Yes / No
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f) What is the number of customers you had business last year?


_________________ Numbers

g) Out of the above how many are there who availed your services repeatedly?
_________________ Numbers

h) How many of them avail same services from others (your competitors) as well
_________________ Numbers