20DM021 - Alvin Subash - SIP Report Safexpress

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INTERNSHIP REPORT

RISK IDENTIFICATION AND MITIGATION FOR


OPERATIONS AT SAFEXPRESS
A report submitted in partial fulfillment of the requirements for the Award of Diploma of

Post Graduate in Management

In

Post Graduate Diploma in Management

by

ALVIN SUBASH
Roll No. 20DM021

Under Supervision of
Prof. Somonnoy Ghosh

(Duration: 1st May, 2021 to 30th June, 2021)

BIMTECH (An Autonomous Institute)


Approved by AICTE, Accredited by NBA (AICTE) & NAAC (UGC),
Plot Number 5, Knowledge Park 2, NCR, Greater Noida, Uttar Pradesh- 201306
Summer Project Certificate

This is to certify that Mr. Alvin Subash, Roll No. 20DM021, a student of PGDM
(Operations and IT/ITES), has worked on a summer project titled “Risk Identification and
Mitigation for Operations at Safexpress” at “Safexpress Pvt. Ltd.” after Trimester-III in
partial fulfillment of the requirement for the Post Graduate Diploma in Management
programme. This is his original work to the best of my knowledge.

Date: Signature

BIMTECH SEAL Prof. Somonnoy Ghosh


Letter of Transmittal
Mr. Soumitra Pramanik,
AGM – Operations and Risk Management
Safexpress Pvt Ltd,
NH 8, Mahipalpur Extension,
New Delhi 110037

Dear Sir,

Re: Summer Project Report

Attached herewith is a copy of my summer-project report “Risk Identification and


Mitigation for Operations at Safexpress” which I am submitting in order to mark the
completion of my 08-week summer project at your organization. This report was prepared
by me using the best of practices and summarizes the work performed on the project and
is being submitted in partial fulfillment of the requirements for award of diploma.

I would like to mention that the overall experience with the organization was very good,
and helped me to know how work is carried out in real practice with the help of your
esteemed organization. I feel honored that I got an opportunity to work with Safexpress
Pvt. Ltd., a company of great repute.

I hope I did justice to the project and added some value to the organization. Your
suggestions/comments would be appreciated.

Yours truly,
Alvin Subash
Letter of Authorization

I, Alvin Subash, a student of Birla Institute of Management Technology (BIMTECH),


hereby declare that I have worked on a project titled “Risk Identification and Mitigation
for Operations at Safexpress” during my summer internship at “Safexpress Pvt. Ltd.”, in
partial fulfillment of the requirement for the Post Graduate Diploma in Management
programme.

I guarantee/underwrite my research work to be authentic and original to the best of


my knowledge in all respects of the process carried out during the project tenure.

My learning experience at Safexpress Pvt. Ltd., under the guidance of Mr. Soumitra
Pramanik, AGM-Operations and Risk Management, and Prof. Somonnoy Ghosh,
Associate Professor, has been truly enriching.

Date: July 03, 2021 Alvin Subash


ACKNOWLEDGEMENT

I would like to gratefully acknowledge the contribution of all the people who took active
part and provided valuable support to me during the course of this project. To begin with,
I would like to offer my sincere thanks to “Mr. Soumitra Pramanik, AGM-Operations
and Risk Management”, for giving me the opportunity to do my summer training at
“Safexpress Pvt. Ltd.”. ‘Without his guidance, support and valuable suggestions during
the research, the project would not have been accomplished.

My heartfelt gratitude also goes to the entire “Risk Management” team at Safexpress
Pvt. Ltd., for their co-operation and willingness to answer all my queries, and provide
valuable assistance.

I also sincerely thank “Prof. Somonnoy Ghosh”, my faculty mentor at BIMTECH, who
provided valuable suggestions, shared his rich corporate experience, and helped me script
the exact requisites.

Last, but not least, I would like to thank all members of Safexpress team for sharing their
experience and giving their valuable time to me during the course of my project.

Name: Alvin Subash

Roll No. 20DM021


INDEX

Certificate of Completion .................................................................................................. i


Summer Project Certificate ............................................................................................... ii
Letter of Transmittal ........................................................................................................ iii
Letter of Authorization. ................................................................................................... iv
Acknowledgement ............................................................................................................ v
Executive Summary.......................................................................................................... 1
1. Introduction. ..................................................................................................................... 3
1.1 Safexpress .................................................................................................................. 3
1.2 SWOT Analysis of Safexpress ................................................................................. 19
1.3 PESTLE Analysis for Safexpress ............................................................................. 21
2. Literature Review ........................................................................................................... 24
3. Operations at Safexpress ................................................................................................. 26
3.1 Movement of Consignment ....................................................................................... 26
3.2 Booking Process ....................................................................................................... 26
3.3 Transhipment Hub Process........................................................................................ 28
3.4 Delivery Gateway Process ........................................................................................ 30
3.5 Claims made due to Risks ......................................................................................... 32
4. Details of Study............................................................................................................... 35
4.1 Risk Management ...................................................................................................... 35
4.2 Risk Management in Logistics Industry ..................................................................... 35
4.3 Problem .................................................................................................................... 36
4.4 Scope of the Project ................................................................................................... 36
5. Research Methodology .................................................................................................... 37
5.1 Fishbone Diagram ..................................................................................................... 37
5.2 Secondary Data Analysis .......................................................................................... 38
5.3 Pareto Chart Analysis ............................................................................................... 38
5.4 Hub Visit .................................................................................................................. 38
5.5 Regression Analysis .................................................................................................. 38
5.6 Forecasting ............................................................................................................... 39
5.7 Queuing Theory ....................................................................................................... 39
5.8 Brainstorming ........................................................................................................... 40
6. Analysis and Discussions ................................................................................................ 41
6.1 Risks in the Logistics Operations .............................................................................. 41
6.2 Fishbone Diagram ..................................................................................................... 47
6.3 Data Analysis ........................................................................................................... 49
6.4 Pareto Chart Analysis ............................................................................................... 51
6.5 Regression Analysis .................................................................................................. 54
6.6 Forecasting Claims for Next Year ............................................................................. 56
6.7 Queuing Theory ........................................................................................................ 57
7. Recommendations ........................................................................................................... 60
8. Conclusion and Learnings ............................................................................................... 62
9. References....................................................................................................................... 63
Appendix ........................................................................................................................ 64
EXECUTIVE SUMMARY

In India, there is a sizeable demand for end-to-end logistics solutions. There is a wide spectrum of
players in the logistics domain ranging from very small exporters and importers, to medium sized
and large traders to MNCs. The Indian logistics industry is expected to reach 250 billion USD by
2022 at a CAGR of 10.5%. Safexpress, since its inception in 1997, is one of the key players in the
industry. Safexpress provide their services in 31,183 pin codes and covers every square inch of
our country with its well-developed infrastructure and efficient operations.

Due to the increased competition in the Indian logistics market, customer satisfaction is seen as a
key differentiator and increasingly has become a key element of business strategy, which would
eventually help them improve their market share and profits. Risk management is a very important
tool used by Safexpress to identify the drawbacks and risks in their current operations and to
improve their processes and services to make the customer happy. This project aims to identify the
risks in operations of Safexpress and to provide recommendations for the company to mitigate
those risks leading to satisfaction of customers and reduced revenue leakage.

The problem addressed by the project is the revenue leakage taking place due to the claims made
by customer. The entire work process flow of Safexpress from booking to the delivery is studied
and analysed to identify different risks involved. The major causes of the risks are categorised and
further analysis was carried out with the support of data, which contains the claim details of the
company in the financial year 2020-21. Fishbone diagram was made to identify root causes for the
claims made by customers and to categorise the risks. The major causes of risk include improper
handling of consignments by cargo handlers, damage to consignments, mistakes in delivery of
consignment due to wrong information, mistakes in information flow within the company, theft,
fire, improper packaging of consignments, transit unworthy consignments and carelessness of
employees during their work process. Pareto chart analysis was carried out using classification of
claims based on different states and material type. Damage to automotive parts during
transhipment was found to be more when compared to other types of consignments.

Data analysis was carried out to support the findings. 60% of the claims were due to damage of
consignments. Packaging and improper handling of consignments was found to be the reasons for
damage. A regression analysis was carried out to find relationship between the distance of
transportation and number of packages in the consignment with the claims. The result indicated
that there was no significant impact of distance on the claims. The claim amount does not increase
with the increase in distance. There was no significant relationship between number of packages

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in the consignment and the claim amount. Both the results points to the fact that Safexpress have
high operational efficiency. Forecasting of the claim amount was done for the upcoming financial
year using the moving average method to help the management team to make decisions to reduce
the claims. Queuing theory was used to analyse the use of handlers and an optimum utilisation
point was recommended to the hubs to maximise utilisation and reduce the loading and unloading
times.

Recommendations were given to the company in order to mitigate the risks identified. The scope
for process standardization, technological upgradation and digital transformations for agility and
integration of logistics services is very huge for the logistics industry. Even though Safexpress has
always tried to use new technology to improve its operations, there is still a long way to go for the
company in this area. Adoption of new technology will help Safexpress mitigate the risks. The use
of RFID tags with the locks, automatic alarm and surveillance systems will help reduce the theft
cases. Customer engagement can be improved and errors during the delivery can be reduced using
the SMS facility. Medical assurance, designation and appreciation should be given to the cargo
handlers in the warehouse to motivate them and reduce their mistakes while handling the
consignments. Safe parking zones identified in each region will aid seamless flow of trucks
between the transhipment hubs and to reduce theft. The ERP software, Propel, for Safexpress can
be utilised in more creative manner to reduce the mistakes in information flow within the company.
My internship at Safexpress has helped me develop a broader perspective of operations
management in logistics industry and helped me gain valuable experience which will be beneficial
for me in my career.

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CHAPTER - 1

INTRODUCTION

1.1 SAFEXPRESS

1997 At present

Safexpress 'Knowledge Leader' & 'Market


began its Leader’
journey. of supply chain & logistics industry in
India

Service Offered
Customers
9 12  Express
18 Regional Route
Offices Vehicles  Apparel & Lifestyle, 60
Distribution,
Offices, departs
 E-commerce, Logistics  3PL, and
261 Area Offices every 47th
 Healthcare, Park  Consulting
seconds.
 Hi-Tech,
 Publishing to Automotive,
 Engineering & Electrical Hardware,
 FMCG & Consumer Electronics and
Institutional.

The major player in Indian logistics includes Blue Dart Express Limited, FedEx transportation &
supply chain India Limited, Safexpress Private Limited and Gati Limited is top the chart with
holding more than 45% market share of overall logistics industry. The Indian logistics industry
employs more than 82.4 lakh people and estimated to witness 14.19 per cent job growth. It can be
stated that this sector has flourished well in past years as in the World Bank's Logistics
Performance Index (LPI) India's rank has went up from 54 in 2014 to 44 in 2018 and with the
aforementioned efforts, India is hoping that in the next 5 years the targets set by the National
Logistics policy to improve India’s ranking in Logistics Performance Index to 25 and to reduce
cost of logistics in India by 40% from 13% to 8% of GDP will be met.

Safexpress Private Limited, a leader in Supply Chain Management industry started its operations
in India in 1997 with 9 offices, 12 vehicles and 9 hubs across the country. Safexpress is one of the
few organized players in logistics industry in India. In its constant pursuit to serve the Indian
economy effectively, Safexpress has today given a new face to the Indian Logistics industry. The
unparalleled leader in Indian Supply Chain Management, today, Safexpress delivers to every nook
& corner of India through its Largest Network and Fastest Transit Times. The company provides

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its services to a vast range of customers ranging from the Automotive, Engineering, Electronics,
Telecom, IT to Retail, FMCG, Healthcare and Publishing industry.

1.1.1 VISION

"To become the most preferred partner to provide a single window solution for entire supply chain
and logistics needs of our esteemed customers pan India and thereby, contribute to their as well as
country’s growth through our impeccable, continuously evolving strengths & expertise, and
maintain the established 'knowledge leadership' and 'market leadership” in the industry."

1.1.2 MISSION

"We shall internalize a customer-centric & people-centric work culture, which demonstrates a
proactive, result-oriented, zero conflict & problem-solving attitude towards surpassing company
objectives through perfect alignment with company policies & guidelines & undeterred focus on
continuous improvement to beat our self-created benchmarks of unmatched, most advanced tech-
enabled service quality, consistently striving towards market dominance".

1.1.3 VALUE – A CULTURE OF RESPECT

 Safexpress believes in nurturing a healthy Relationship with people, partners and


customers.
 Safexpress constantly strive to Evolve from an 'Effort-based Organization' to a 'Result-
based Organization'.
 Safexpress ensure that their Self-Discipline allows a complete ownership and
accountability of their work as well as compliance to policies and processes.
 Safexpress take a deep sense of Pride in what they do and for the organization.
 Safexpress explore unchartered territories and by continually seeking Knowledge.
 Safexpress are Custodians of their, and customers' goods and resources.
 Safexpress believes in the power of Talk in dealing with any situation.

1.1.4 FOUNDATION OF THE COMPANY

 Focus on offering quality services, driving ethical behaviour and fulfilling its commitments
towards all its stakeholders.
 Aim to reduce its carbon imprints; innovative ways to minimize energy consumption
through non-renewable resources.

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 Practice safety norms and measures to ensure safe working conditions for its employees,
drivers.
 Contribute towards the social upliftment of the communities around its hubs across India.

1.1.5 GROUP COMPANIES

1.1.5.1 SAFEDUCATE

Safeducate is India’s Largest Logistics Training Provider and consistently strives towards
maintaining a 'knowledge leader' position in the industry through leading training, skilling and
consulting organization and specializes in the domains of Supply Chain Management & Logistics,
Retail, Manufacturing and Automotive. Partnership with National Skill Development Corporation
(NSDC), Chartered Institute of Logistics & Transportation (CILT), Logistics Sector Skill Council
(LSC), Indian Institute of Management (IIM Kashipur), Retailers Associations Skill Council of
India (RASCI), Automotive Skill Development Council (ASDC), National Association of
Software and Services Companies (NASSCOM), and many more

80000 Nos - Trained & Upskilled


150 Nos - Training & Skilling Centres
500 Nos - Industry Connects
250 Nos - Industry Linked Courses

1.1.5.2 SAFEXPRESS B2C

Safexpress B2C is a specialized logistics entity in the supply chain and logistics space offering
customized multimodal services to its online retail customers through its enviable surface and
SafeAir infrastructure in India.

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Green Truck Private Limited was incorporated on 28th-February 2011and is responsible for
managing Retail business for parent company M/s Safexpress Pvt ltd at 32 locations Pan India,
with a target to facilitate up to 150 locations with first and last mile pick-up and delivery. Directors
of Green Truck Private Limited are Rubal Jain and Divya Jain. Green Truck Private Limited works
on the philosophy & ethics of Safexpress, and provide vehicle & business support to drivers/
business partners. We transform drivers to entrepreneurs (Chalak to Malak). Total number of
drivers to entrepreneurs associated counts to 1650+ nos.

1.1.5.3 TRANSOLUTIONS

Transolutions, incorporated in 2005, is a Transportation/ Trucking/ Railroad industry and deals


with Full truck Load consignments only, also it has an unparalleled infrastructure built with the
strength of a vast experience, backed by a huge network of 250 branches spread across the country
in all state capitals and major towns to take care of the primary transportation needs, providing
huge warehousing space and security for the customers' invaluable cargo. The company is on the
approved list of the Indian Banks Association. It imbibes the basic values of customer orientation
and the custodian role far beyond the role of a carrier alone. It has a large fleet of more than 300
modern vehicles mounted with ISO 9001 certified all weatherproof containers. The company has
the most modern IT interface and has inducted advanced technology for the 'track n trace' systems.
Most of the line-haul vehicles are equipped with the GPS technology that enables 'on line real time'
information and data. Directors of Transolutions Private Limited are Pawan Kumar Jain and Rubal
Jain.

1.1.6 REACH OF THE COMPANY

1.1.6.1 CONNECTIVITY

 Cover entire 3.287 million Sq. Km. of India.


 Cover 31155 Pin codes of India.
 Covers 28 states & 8 union territories of India.
 Robust network of over 697 delivery gateways.
 Unique Safextension network.

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 Hub and Spoke Model.
 Also, unique, direct, long distance routes to facilitate fastest delivery across India.
 Over 7500+ GPS- enabled, all weather-proof, containerized vehicles.
 More than 1882 routes, linked through 84 Transhipment hubs.
 Delivering more that 100 million packages a year.
 Traversing over 10,00,000 kms a day.
 Warehousing space of over 18 million square feet.
 Operating 24 hours a day, 365 days a year.

Fig. Safexpress Coverage


1.1.6.2 SAFEXTENSION

 'Network beyond the Scheduled Network'


 Safexpress has mapped and covered every square inch of the country and can deliver to
every possible place in India.
 Simple and robust design - delivery gateways are assigned for delivering consignments.
 A periodically updated reference guide helps employees to identify the delivery gateway
for delivering consignment.
 'Centre for Intelligence Research Excellence' – responsible for company research.
 All deliveries are time definite as we follow a stringent transit time schedule.

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 Delivery gateways have vehicles ready apart from routine delivery operations to complete
transit schedule.
 Consignor can send to the remotest locations considering the time when the supplies is to
be available with consignee.
 Transparent system for rates of transportation to locations.
 By R&D – add locations based on frequency to the network - saving extra service charge
to the customer for such locations.

1.1.6.3 AIR NETWORK – SAFEAIR

 SafeAir - specialized air service.


 Connected with 54 state-of-the-art air hubs Locations for Air Cargo movement.
 It complements the surface logistics in offering optimal multimodal solutions and faster
deliveries.
 Cost-effective routing design for surface and air network for valuable air-worthy cargo.
 Provides door-to-door pickup and delivery service.
 Careful handling due to its subtle and time sensitive nature.
 Dedicated team of specialized air freight experts deployed at hubs 24x7.
 Team have expertise and experience in completing the various documentation formalities
required for different product categories across different airlines travelling to different
states.
 Through our alliances with leading air cargo agents, who have access to leading airlines,
we ensure prioritized and cost-effective movement of goods.

1.1.7 COMPANY INFRASTRUCTURE AND NETWORKS

1.1.7.1 LOGISTICS PARKS

Safexpress, as the 'Market Leader' has been driving the warehousing revolution in India as it
expects that this would be the major area of focus for the industry for many years to come. Through
its pioneering initiatives, the company has totally redefined the way supply chain functions in the
country. Safexpress has developed 61 state-of-the-art warehouses with space of over 18 million
square feet across the country and it delivers more than 100 million packages every year.

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Key highlights of Safexpress logistic parks

61 state-of-the-art warehouses with space of over 18 million square feet across the country and it
delivers more than 100 million packages every year.

 Large, fully secure logistics parks built close to National Highways.


 24x7 @ 365 days operations.
 Secured campus with surveillance and security systems provide 24x7 security.
 Continuous truck-height loading platform for proper material handling.
 60-80 feet concrete docking area to provide a dust-free environment.
 Hundreds of docks ensuring minimal truck wait time.
 Ergonomically designed cross-dock platforms.
 High quality heavy-duty floor (point loads of 4 MT / 6 MT per square meter).
 24x7 Power backup.
 24x7 Connectivity & backup connectivity.
 16 feet cantilevered shed & Industrial lighting for all-weather secured loading & unloading
operations.
 Ventilated & insulated buildings for temperature controlled, dust-free and healthy work
environment.
 Rainwater harvesting facilities.
 On-site staff residence.
 On-site driver facilities and rest rooms.
 High end material handling equipment for safe and efficient operations.
 Column less span to provide large operating spaces.
 Automated, well maintained material handling equipment.
 Advanced firefighting equipment deployed at all the hubs.
 Separate truck and car parking areas.
 Conference rooms and office facilities.
 Green campus.
 Technology.
 All hubs and distribution centres are connected on a Virtual Private Network.
 24x7 Surveillance using advanced IP cameras that send live feeds to a Central Command
Centre.
 Wireless enabled hubs that facilitates the usage of handheld terminals.

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Fig. Safexpress Logistics Parks

Fig. Inside Safexpress Logistics Park

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1.1.7.2 FLEET

Safexpress fleet serves pick-ups, transhipment and final delivery routes and is fully equipped to
cater to a wide range of cargo loads, which ranges from 1 ton for pick-up and delivery to 15 tons
for transhipment.

 All weather-proof vehicles


 A fleet of over 7500 ISO-certified, fully containerized, all-weather-proof vehicles
 GPS-enabled vehicles
 To ensure real-time monitoring, tracking and analytics
 10,00,000 kilometres everyday
 The fleet traverses over 10,00,000 kilometres every day on more than 1830 dedicated
routes
 Wide range of cargo load capacity
 Vehicle capacity ranges from 1 ton for pick-up and delivery to 15 tons for transhipment
 Low carbon emission
 We have the youngest and most fit fleet in the industry to ensure low carbon emission
 Innovation and Technology
 Continuous investments in procuring best-in-class technology to enable vehicle efficiency

Fig. Fleet of Safexpress

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1.1.8 SERVICES OFFERED BY SAFEXPRESS:

SERVICES

3PL &
SERVICES FOR
SUPPLY CHAIN EXPRESS INVENTORY CUSTOMIZED SERVICE FOR REVERSE
INDIVIDUALS/
CONSULTING DISTRIBUTION MANAGEMEN PROJECTS ENTERPRISE LOGISTICS
SME
T

Easy2 Stock2 Vendor


Move Air Shelf Managed
Campus2 Inventory
Home
Surface
Virtual
Sainik End-to-end Warehousing
Express Supply Chain

Safe
Return

1.1.8.1 SERVICES FOR INDIVIDUALS/SME (RETAIL)

CAMPUS2HOME

 'Campus2Home' - specialized service for students – providing logistics services to manage


the movement of their baggage and material to their home or next destination.
 To assist students in packing their belongings, unlike other packers and movers, Safexpress
provides unique 20 kg-capacity 'Campus to Home' Box free of cost.
 Pick- up from Hostel/PG and Door delivery at any destination in India with an option of
To-pay/Freight collection on delivery.
 Free insurance (Limited Liability) if package is lost in transit.
 Packing and documentation support.
 Online and Mobile app-based tracking of consignments.

EASY2MOVE

 Door-to-Door pick-up and delivery service - shifts your baggage anywhere in India (31,083
pin codes of India) and saves above 90% on airlines excess baggage charges.

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 Minimum shipment weight is 10 kg and less than 10 kg weight will be calculated at the
10kg rate.
 Free good quality carton box, poly pack, tape etc. for packing.
 Simplified flat rate per box.
 Sunday and holiday pickup & delivery without any extra charges.
 Packing and documentation support.
 Digital payment (net banking, credit & debit card, digital wallet, etc.).
 Free insurance (limited liability).
 Online booking request/ service enquiry.

Fig. Campus2home and Easy to move

SAINIK EXPRESS

 Door pick-up and delivery of Indian defence personnel belongings safely, conveniently
and in a cost-effective manner across nation.
 Special price offer, discounts, easy payment options, inbuilt risk coverage and convenient
pick-ups/ deliveries.
 Easy pricing and Inbuilt risk coverage
 Packing and transit documentation support
 No extra charge for Sunday/ Holiday delivery

SAFERETURNS

 Exhibition Returns - hassle-free returns of company’s products and demo pieces.


 Pick-ups at desired times (when the event is over) and provides door delivery to any place
in India.
 Cost-effective price offer and option of 'To-pay' freight

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 Handling over 100 events/ year.
 Retail Returns - pick-ups of unsold, end-of-season, damaged and expired stocks from
retailers and shopkeepers (in malls, shopping complexes, retail streets, etc.) to the
manufacturers - Paid booking only i.e., freight paid by consignor.
 Free packing support by providing new Safexpress branded packing cartons.
 Provide retailer reliable services to ensure on time and accurate returns to the company.
 Pick-ups are managed through our small, containerized vehicles.

Fig. Safe Returns

1.1.8.2 SERVICES FOR ENTERPRISES

STOCK2SHELF

 Executed at retail outlets operating out of mega malls where customer footfalls are high –
reduces high inventories in retail outlets back rooms, distribution company does not have
to manage and own warehouses near the point of consumption and the customers always
have their favourite brands on the shelf.
 Provides comprehensive time-definite mall supply chain services, inclusive of movement
of retail and lifestyle goods, inspection and estimation, professional packaging, security
clearance, storage, and destination delivery, unpacking and reassembling/setting of retail
goods, and finally reverse logistics.
 Determining the need at a retail store, assessing the stock available at the feeder warehouse,
delivering the stock as required within the given timelines.

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VENDOR MANAGED INVENTORY (VMI)

VMI - Just-in-time requirements of OEMs - Responsibility of managing inventory shifted to


suppliers take ownership (deciding frequency & quantity of deliveries) of ‘assembly line - ready
deliveries’ for being directly put in production.

 Box-in Box-out, Box to Bin and Box to trolley - Assembly line- ready deliveries to OEMs
at Safexpress.
 Dedicated VMI team, daily MIS reports, value-added services including quality checks,
repacking, cleaning, and wiping, barcode labelling, racking, bin tagging, order
management, supplier-wise inventory management and documentation.
 Prepare Delivery Schedule Management ensuring Continuous Replenishment Planning,
updating the same on portal.
 Focuses on CRM and SRM and deployment of Specific material handling equipment &
pallets.

VIRTUAL WAREHOUSING

 Box-In-Box-Out Invoicing - Multi-state warehouse replenishment model for VAT


optimization.
 Order processing and invoicing, also Clearing & Forwarding.
 Fast last mile delivery and efficient order fulfilment.
 Robust IT systems to support operational efficiencies and inventory visibility.

Fig. Virtual Warehousing

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END-TO-END SUPPLY CHAIN (LOGISTICS SOLUTIONS PROVIDER/LSP)

 Efficient management of logistics across the supply chain, better visibility, and systematic
flow of information.
 Standardization of services and guarantee reduction in current total logistics expenditures.
 Round the clock safety, security and careful handling of your consignments, work as
partners – frequent information sharing and collaborative relationship.
 Nationwide single service provider for all your supply chain needs, thus increased
accountability and higher sense of ownership at all levels.
 Fastest surface transit time and turnaround of your inventory with minimal inventory
holding costs.
 Minimal loss of business opportunity while waiting for in-transit material.
 Continuous and daily supply to dealers without any need of stocking up extra material.
 Management of Entire supply chain exclusively by Safexpress.

1.1.8.3 EXPRESS DISTRIBUTION

SURFACE

 Fastest transit-time time-definite deliveries through our robust network supported by


'Hub and Spoke' model intended to minimize the distance travelled and strategic
management of logistics.
 Fleet of over ISO-9002 certified, all-weather-proof 7500 containerised vehicles with
advanced 'Track and Trace' facility - Largest Multi-modal Supply Chain Network

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 Proactive clearance of Octroi & Entry Taxes to provide seamless transfer of goods.
 Proactive reporting and online track & trace to ensure pin-point accuracy in delivery
schedule.

SAFEAIR

 Complements surface logistics - optimal multimodal solutions, faster and cost-effective


routing of valuable air-worthy cargo.
 Widest possible network covering every square inch of the country and providing Multi-
modal connectivity.
 Associations with different Air Taxi Operators to ensure delivery on time.
 'Door-to-door Pickup and Delivery' of your valuable cargo for no extra charge.
 Highly Efficient Services through Excellent Warehousing support and Distribution
Network.

1.1.8.4 3PL (THIRD PARTY LOGISTICS) AND INVENTORY MANAGEMENT

 Warehousing Solutions via state-of-the-art Warehouse management solutions (WMS) -


Inbound or Goods Receipt (where we scan the part numbers and quantity received), Put
Away (Ensure that the right part number is placed in the right location using location scan)
and Outbound (Orders are picked, packed and shipped using hand held scanners).
 Highly configurable lot handling and shelf-life handling, scanning each goods for tracking
movement of inventory within and between warehouses and Integration with Warehouse
Control Systems.
 Provides Value-Added Services such as Kitting with powerful integration and reporting
functionality.
 Highly configurable rules and strategies for put-away, replenishment, picking, kitting and
VAS
 Wave Planning - to group and plan the work in the warehouse.
 Strong cross-dock – easy flow through, VAS with quick transhipment facility.
 WMS integrated with ERP.
 Stock accuracy @ 99 % - 'A' category parts are counted at least once in two weeks while
'B' category parts are counted once a month. 'C' category parts are reviewed once in a
quarter.

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Fig. Inventory Management and 3PL

1.1.8.5 SUPPLY CHAIN CONSULTING

 Distributions Requirement Planning: - How many warehouses should there be and where
should they be located based on demands for seamless logistics services.
 Labour Resource Planning: - How to structure shifts; source labour, manage compliance.
 Warehouse layout and design: - How to have an optimal put-away and pick-up.
 Statutory Documentation Support: - How to manage permits, manifests, state and
commodity specific clearances, and document templates.
 Supply Chain Optimization: - Choice of carrier, multimodal planning, and in-transit
inventory management.
 After Market Distribution Design: - Reaching out to distributors and retailers with the
right part at the right time.

1.1.8.6 CUSTOMIZED PROJECTS

 Professionals and technical staff for effective execution of specified activities at delivery
site are required for proper handling of odd-sized shipment, and delivery at any floor
required, and coordinate with customer representative before site delivery.
 Delivery in the deep corners of India, beyond Tier IV towns which may require installation
at site, which forms a part of the delivery process - delivery is complete only after
installation and testing of product.

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 Dedicated team of engineers and supervisors along with specialized material handling
equipment to monitor and coordinate and deployment of special dedicated vehicles and
assistance for route planning.
 Safexpress can also provide warehousing at various regional depots for consumables and
parts, for repair and refurbishment of the products in future.

1.1.8.7 REVERSE LOGISTICS

 Safexpress’ REVLOG system - separate documentation procedure (Returns Invoice),


specialized handling (repacking as in the original arrival state) and returns authorization
from the original consignor.
 Goods disposition decision, approvals and authorization hierarchy, revised documentation
and taxation and re-packing for road worthy shipment.
 Downstream dealers / partners put returns request that goes to the work bench of a pre-
configured approver, and once approved, the closest Safexpress’ point ‘pick-up’ from the
requestor and updates the pick-up request with the waybill number. All stake holders,
requesters, approvers, pick up associates, receivers get a transparent view of the entire
'Returns Process'.

1.2 SWOT ANALYSIS OF SAFEXPRESS

STRENGTHS

 Largest Logistics service Provider in India by Limca Book of Records in 2002 and thus have
a trusted brand image
 Largest logistics and supply chain company in the India according to Limca book of records.
 Credit & Retail basis pricing strategy
 Creative Service like Campus2home, Sainik Express, Easy2home, Safereturn
 Has reach to all 627 districts in 36 states and union territories in India
 It has more than 7500+ GPS-equipped all-weather proof, containerized vehicles which
operates on more than 1,882 routes 24x7x365 days
 Safexpress has built an in-house platform called as HOG- (Hub on the Go) that enables it to
optimise labour and hub performance by enabling faster loading and unloading of vehicles
 Safexpress has developed 61 state-of-the-art warehouses with space of over 18 million
square feet across the country which makes their operation process much smoother

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 Safexpress has built a Green App which is responsible for increasing productivity and
optimization

WEAKNESS

 Marketing and advertising are lower than national and global competitors.
 Work life balance is an issue as it is 24x7x365 days working company
 Transport Damages
 Claim Policies

OPPORTUNITIES

 Diversification in more innovative services


 Growth of manufacturing industry after the initiation of “Make in India” campaign
according to Indian Brand Equity Foundation.
 It has 7500+ weather proof ISO-9002 vehicles which can be used for increasing range of
services
 It can enter international market
 Warehousing Revolution which is being started by the company can lead become a trend
setter in the market
 Ecommerce Boom
 Strategic Tie Ups with E-commerce industry
 Improve retail channel which will make them more visible to individuals (who are B2C)
 Minimizing the revenue leakages
 Cloud based application to smoothen the process flow

THREATS

 Entry and penetration of international players FedEx, UPS


 Competition from national competitors like DTDC, Delivery, Xpressbees, Blue dart
 Unorganised transportation sector
 Price Wars
 Capacity vs Demand Management
 Global Pandemic

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1.3 PESTLE ANALYSIS FOR SAFEXPRESS

POLITICAL FACTORS

Political factors play a significant role in determining the factors that can impact Safexpress long-
term profitability in India. Safexpress is operating in Air Delivery & Freight Services all across
India and exposes itself to different types of political environment and political system risks.
Safexpress can closely analyse the following factors before entering or investing in a certain
market-

 Political stability and importance of Air Delivery & Freight Services sector in the State’s

economy.
 Level of corruption - especially levels of regulation in the Services sector.

 Bureaucracy and interference in Air Delivery & Freight Services industry by government.

 Legal framework for contract enforcement

 Intellectual property protection

 Trade regulations & tariffs related to Services

 Favoured trading partners

 Anti-trust laws related to Air Delivery & Freight Services

 Pricing regulations – Are there any pricing regulatory mechanism for Services

 Wage legislation - minimum wage and overtime

 Work week regulations in Air Delivery & Freight Services

 Mandatory employee benefits

 Industrial safety regulations in the Services sector.

 Product labelling and other requirements in Air Delivery & Freight Services

ECONOMIC FACTORS
The Macro environment factors such as – interest rate, inflation rate, foreign exchange rate, savings
rate, and economic cycle determine the aggregate demand and aggregate investment in an
economy. While micro environment factors such as competition norms impact the competitive
advantage of the firm. Safexpress should look after these economic factors such as inflation,
growth rate, & industry’s economic indicators such as Air Delivery & Freight Services industry
growth rate, consumer spending etc to forecast the growth trajectory. The factors which affect the
Safexpress operations are: -

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 Government intervention in the free market and related Services

 Efficiency of financial markets – Does Safexpress needs to raise capital in local market?

 Infrastructure quality in Air Delivery & Freight Services industry

 Skill level of workforce in Air Delivery & Freight Services industry.

 Labour costs and productivity in the economy

 Business cycle stage (e.g., prosperity, recession, recovery)

 Economic growth rate

 Discretionary income

 Unemployment rate

 Inflation rate

 Interest rates

SOCIAL FACTORS
Social factors also playing an important role in the world of business. Social factors can affect the
social image businesses. Businesses are working to develop a socially responsible image. They are
also investing a lot in social responsibility and community engagement. Safexpress has also
launched a Safeducation platform which provide training, skilling and consulting in the
organization and specializes in the domains of Supply Chain Management & Logistics, Retail,
Manufacturing and Automotive. This unique profitable company was launched by Safexpress,
India’s leading Logistics management company, in 2007 and has been growing by leaps and
bounds Ten World’s Most Admired Companies and 100 Best Companies to Work for”. Some
Social factors which impact the organization are: -

 Demographics and skill level of the population

 Culture (gender roles, social conventions etc.)

 Attitudes (health, environmental consciousness, etc.)

TECHNOLOGICAL FACTORS
Technology is fast disrupting various industries across the board. Transportation industry is a good
case to illustrate this point. Over the last 5 years the industry has been transforming really fast, not
even giving chance to the established players to cope with the changes. Factors which affect the
organization are: -

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 Recent technological developments by Safexpress competitors

 Technology's impact on product offering

 Impact on cost structure in Air Delivery & Freight Services industry

 Impact on value chain structure in Services sector

ENVIRONMENTAL FACTORS
Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even in India different states can have different
environmental laws and liability laws. Factors which impact the organization are: -

 Weather

 Climate change

 Laws regulating environment pollution

 Air and water pollution regulations in Air Delivery & Freight Services industry

 Recycling

 Waste management in Services sector

 Attitudes toward “green” or ecological products

 Attitudes toward and support for renewable energy

LEGAL FACTORS
The legal framework and institutions are not robust enough to protect the intellectual property
rights of an organization. A firm should carefully evaluate before entering such markets as it can
lead to theft of organization’s core competency and leading to stall the competitive edge. Some
factors that impact the organization are: -

 Copyright, patents / Intellectual property law

 Consumer protection and e-commerce

 Employment law

 Health and safety law

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CHAPTER - 2
LITERATURE REVIEW

In the paper titled “Risk Management in Logistics” by Hui M Wee in 2012, an insight into the
impact of Risk Management in Logistics sector was discussed. Because of the unpredictable
market and business climate, undesirable disturbances in logistics can influence ventures and
weaken their business strength. Risk Management has gained a lot of importance in the industry
by helping the firms ensure their continuous operations. Logistics interference can emerge out
of an unanticipated exogenous occasion like an earthquake or from an endogenous occasion,
similar to the Toyota Quality reviews in 2010 that interrupted enterprise logistic operations and
degraded its performance (Trkman and McCormack, 2009). In this paper, risk management in
logistics is studied from the process flow perspective. The paper comprises logistics measures,
risk management strategy, risk management the process in logistics, and enterprise
performance evaluation. A few risk management theories and frameworks are mentioned in the
paper. The aim is to give important information through understanding the fundamental risk in
logistics.
Alper and Tekin in their paper titled “Risk Management in Logistics Sampling of Risk
Components, published in November 2017 states that: For the Logistics industry, factors like
speed, quality, intactness are vital to provide a sense of trust to customers and to meet the
expanding customer requirements. The use and integration of data framework in the logistics
sector have improved the processes of transportation, storage, distribution, etc, and has made
the logistics system much more efficient. This makes auditing, adaptability, and decision-
making simpler. The growth and success of the logistics industry rely upon how adequately
new technologies are used as an infrastructure in the industry. Hence, it is critical to utilize new
technologies successfully in the logistics sector and different sectors as well. The goal of
organizations is to compete in the market and reduce the risk involved, they should follow and
execute the technologies for innovation in the sector. If the logistics company understand these
risks and work to eliminate them. They can acquire a huge advantage against their rivals.
The paper titled, “Risk Mitigation”, published by Chapelle in December 2018, focuses on the
two most common risk mitigation solutions: internal controls and risk transfers. There are a
series of classifications for controls: preventive, detective, corrective, and directive controls.
Control testing is customarily the duty of an internal audit. Controls can be tried with different
degrees of investigation. More controls don't mean less risk. Poor control configuration can

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increase the weakness of interaction to different risks. The paper investigates the broader issue
of forestalling non‐financial chances by utilizing the design of processes. Knowledge‐based
blunders are because of a lack of information, a lack of familiarity with a process, or a lack of
training or guidance. Risk transfer, similar to avoidance, is another kind of mitigation.
Protection is a typical and trustworthy type of risk transfer; outsourcing is possibly another
amazing method to transfer risk. The legitimacy of risk move from outsourcing will rely upon
why risk is transferred and to whom.
In the paper titled “Route Risk Mitigation” by Bogovich and Jordon, published in April 2015,
a method is disclosed for mitigating the risks related to driving by assigning risk values to road
segments and using those risk values to pick less risky travel routes. Various approaches to
helping users mitigate risk are presented. A computer is configured to get a database of risk
values. That device may receive accident information, geographic information, vehicle
information, and other information from one or more data sources and calculate a risk value
for the associated road segment. Subsequently, the computer may provide the associated risk
value to other devices. Furthermore, a private navigation device may receive travel route
information and use that information to retrieve risk values for the road segments within the
travel route. An insurance firm may use this information to work out whether to regulate a
quote or premium of a policy. This and other aspects concerning using geographically encoded
information to market and reward risk mitigation are disclosed.

The paper titled “Operationalizing Risk Mitigation”, published by Wills in April 2019, talks
about how operational processes and procedures monitor risk mitigation. Risk mitigation
follows through on the decision of assurance and data security promises made by risk
management. The data innovation of an association is the collaboration of the PCs,
organizations, and correspondences frameworks that the business claims, rents, or uses. The IT
architecture is a plan that characterizes how the association will interpret necessities into
capacities; capabilities into hardware, software, systems, and data; and then manage how to
deliver, support, and secure those systems and technologies.

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CHAPTER - 3

OPERATIONS AT SAFEXPRESS

3.1 MOVEMENT OF CONSIGNMENT

3.2 BOOKING PROCESS

The booking process at Safexpress is as follows:

1. Pick up request is made by the customer through the pickup request portal or dialling the
toll-free no. He can directly visit the booking office too.
2. Once the request is made, Pickup vehicle is assigned for the pick-up and saathi
(booking associates are called by this name in Safexpress) will visit the customer premises
as soon as possible. The pickup will take place only if the pickup can be completed before
6 PM.
3. The transit worthiness of the package is checked by saathi.
4. The transit documents required from the consignor end is collected and checked.
5. All the consignments are sorted as per the destinations. This is to assign a different waybill
number for consignments to each destination.
6. The waybill number is assigned for each consignment and the barcode is generated. The
consignments are marked with the barcode and directional stickers (as per the suggestion
of the consignor).

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7. The actual weight and the volumetric weight are calculated. This is done to calculate the
chargeable weight. The chargeable weight is either the actual weight or the volumetric
weight, whichever is the highest. Actual weight is calculated using the weighing machine
carried by saathi and volumetric weight is calculated using the formula.
Volumetric Weight =
(Length(inch) * Breadth(inch) * Height(inch) * 10 * No. of Packets) / 1728
8. The waybill is prepared for the consignments.
9. The consignor signs on the waybill and the consignor’s copy is given to the consignor.
10. The consignments are loaded and stacked in the vehicle.
11. After collecting all the consignments assigned on that day, the details are entered into the
Propel software and a local manifest is generated for the vehicle. This has to be done on
the same day.
12. All the consignments are delivered to the nearest hub or the nearest office of Safexpress as
informed by the managers.
13. The vehicle arrival report is collected from the hub as soon as the unloading is done at the
hub and the reconciliation of the short and excess in the packages are done.

3.2.1 BOOKING PROCESS AT THE BOOKING OFFICE AFTER THE PICKUP

The process that has to be carried out at the booking office after the pickup of the consignment
is as follows:

1. The waybill details are entered to the Propel software before sending the consignments to
the hub.
2. The local manifest is created for each vehicle. In case of the presence of surface and air
packages in the same vehicle two separate manifests have to be created for each mode.
3. The vehicle should be loaded according to the local manifest when the consignments are
sent to the hub.
4. The vehicle arrival report has to be collected upon the unloading of the vehicle.

3.2.2 DOCUMENTS NEEDED FOR THE BOOKING PROCESS

1. Waybill
Waybill is issued by the pickup agent during the pickup. The waybill is a very important
document which includes details about 26 parameters like consignor consignee details,
mode of payment (paid, to pay, credit), booking location, rate, mode of transport, details
of package, DOD (Delivery on Demand draft) details, invoice details about the

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consignment, special instructions etc. are shown in the waybill. It acts as a receipt for the
consignment. 4 copies of waybill are generated. The first copy is given to the consignor,
second one travels with the material or consignment, third one is for the accounts purpose
and the fourth copy is kept at the booking office.
2. Customer GST invoice
This document includes the details about the consignment necessary for the transit of the
material to the destination.
3. e-waybill
e-way bill must be generated when there is a movement of goods of more than Rs 50,000 in
value to or from a registered person. A Registered person or the transporter may choose to
generate and carry e-way bill even if the value of goods is less than Rs 50,000
4. Declaration
The declaration is needed for a non-GST customer sending consignments worth more than
50,000. The declaration is normally done by students and other customers using the retail
services.
5. Local Manifest
Local manifest is the consolidated list of all the consignments carried in a vehicle. Separate
manifest has to be created for each mode of travel for each pickup vehicle. The local
manifest includes details like the waybill number, destination, packets no etc.
6. Retail Rate Card
This document contains the details of zone wise tariff, measurement details for volumetric
and actual weight calculations, other details for the booking etc. This is used when the
booking is done for the retail customers. The retail rate card is updated on a quarterly basis.
7. Transit schedule and calendar
This document is used to know the details of the delivery time required once the
consignment is booked according to the different zones of service. The transit calendar
contains details for six months.

3.3 TRANSHIPMENT HUB PROCESS

The transhipment process can be divided into two; Departure process and Arrival process. The
transhipment hub departure process is as follows:

1. The audit of the vehicle is done in the hub and upon approval, the loading plan is made for
the vehicle.

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2. The re-auditing and finalisation of the loading plan is done.
3. The loading tally for the vehicle is generated using the propel and the vehicle is assigned
to operational assistants at the hub.
4. Each packet is scanned using the barcode scanner and is loaded to the vehicle as per the
loading plan. The scanning is done by the operational assistant and the package handlers
will carry out the loading and the stacking process.
5. Bay audit is done for each vehicle and the loading tally is updated using the barcode
scanner.
6. The vehicle is sealed in case of a transhipment departure and the route performance sheet
is generated and updated.
7. All the documents are given to the driver and the instructions are given to the driver if there
is any.

The transhipment hub arrival process is as follows:

1. The vehicle reports at the gate and a platform are allotted for the vehicle at the gate.
2. All the documents are checked and the vehicle arrival report is generated.
3. The unloading tally is generated using propel and the operational assistants are assigned to
each vehicle.
4. The seal is checked. This is applicable only to the transhipment vehicles and not for the
booking pickup vehicles.
5. The unloading of the packages is done. All packets have to be scanned by the operational
assistant and the packets are stacked in the bay. The heavier packets have to stacked in the
bottom and the lighter ones on the top.
6. The vehicle and the respective bay are audited.
7. The unloading tally is updated upon completion of the unloading and audit process through
the bar code scanner. The Route performance sheet of the vehicle is closed for the vehicle.
8. The way bills are deposited in the pigeon boxes and it is sorted according to the routes.

3.3.1 DOCUMENTS FOR THE TRANSHIPMENT HUB PROCESS

1. Unloading Tally Sheet


The unloading tally sheet document contains the details of all the consignments send to the
hub. It is used to check the short and excess of the packages.

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2. Vehicle Arrival Report
Vehicle arrival report is generated upon the arrival of the vehicle in the hub. It contains the
details about the vehicle and the packages with the vehicles.
3. Loading Tally Sheet
Loading tally sheet contains the details about the consignments that are to be loaded on to
the truck. This is used to systematically load the vehicle and to avoid the short and excess
of the consignments.
4. Transhipment Hub Manifest
The manifest contains the consolidated details about the different consignments send to the
hub. The details include the waybill number, destination, package details etc.
5. Consolidated e-Way bill
The consolidated e-waybill includes the details about all the GST e -waybills carried in the
vehicle.
6. Route Performance Sheet
The RPS is given to the network driver. This is updated once the vehicle has reported the
hub. The details included are arrival time, seal condition etc. This document helps to
calculate the vehicle hire or the drivers pay for the trip.
7. Vehicle Arrival Report 2
This document is the confirmation of different consignments received through the vehicles.
It is given by the operational assistant or the hub staff. This is used to confirm the count,
condition and the status of different packages.

3.4 DELIVERY GATEWAY PROCESS

The delivery process at Safexpress can be divided into 2; Departure process and Arrival process.
The departure process is as follows:

1. The planning of the delivery routes is done and gate pass is generated for each waybill.
2. The Loading tally is generated using the Propel and an operational assistant is assigned for
the loading task.
3. The loading of the vehicle is done after scanning each packet and the loading tally is
updated using the barcode scanner after the loading of the vehicle.
4. The delivery vehicle trip sheet is generated and the instructions to the driver and the
delivery associates is given.

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There are two types of delivery associates. The first one is the Green Dost Associates who delivers
packages with weight less than 100 kg. The next one is the DRM who delivers the packages more
than 100 kg.

The arrival process for the delivery gateway is as follows:

1. Once the vehicle returns, the documents like POD, SNSD, DACC and DC is received and
is checked.
2. Unloading tally is generated for the vehicle if there are any packages which are not
delivered due to any reasons.
3. The unloading of the undelivered consignments is carried out, the gate pass of the
undelivered consignments is cancelled and the unloading tally is updated in the propel by
the OA.
4. The trip sheet is reconciled and checked and the delivery report is prepared.
5. The records of the physical stock are updated by the hub workers and the documents like
POD, DD and DACC is forwarded to the corporate office.

3.4.1 DELIVERY GATEWAY PROCESS DOCUMENTS

1. Gate pass
Gate pass is a propel generated document containing the details about the payment charges
(to pay). It can also be called as a delivery receipt or money receipt. This is generated for
each waybill separately. Gate pass can be used as the delivery report and also gives details
to the delivery associates about the charges to be collected from the consignee.
2. Provisional Loading Tally (delivery)
This document contains all the details about the consignment to be loaded in the delivery
vehicle from the delivery gateway. This document helps to load the consignments
systematically and to avoid any short or excess.
3. Delivery Vehicle Trip Sheet
The delivery vehicle trip sheet is a propel generated summary sheet that gives details about
the charges, payments to be collected from the consignee and other instructions.
4. Delivery Trip Unloading Tally
This document contains all the details about the consignments received after unsuccessful
deliveries. The consignments have to be unloaded if it is not delivered. This will help check
the short and excess of the packages.

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5. Proof of Delivery (POD)
This document is a copy of the waybill of the consignee that accompanies the consignment
from the time of the booking until the delivery. This is a confirmation from the consignee
regarding the received consignment. The stamp of the consignee, signature have to be there
on the POD copy.
6. DACC Copy
DACC copy is given by the consignee upon which the delivery of the consignments booked
on DACC. This is for the acknowledgement of delivery and to ensure the payment.
7. Delivery Challan
This document works as a proof of delivery for the consignee. It is issued by the consignor
and remains an important transit document. It is generally used for government order, the
details in the document includes the description of product, quantity, list price, total amount
and the instructions given by the consignor.
8. Invoice or Purchase Order
Invoice is a bill issued by the individual or the organization who has provided the products
or services to a customer who is an individual or a organization. This includes the list of
all the goods and services provided to the customer.
9. POD forwarding note

3.5 CLAIMS MADE DUE TO RISKS


Due to the above-mentioned risk involved, sometimes it is observed that, Safexpress must resolve
and process cargo losses and damages, which many a times involves paying the claimed amount.
In such capacity, Safexpress faces liability exposure to their customer for any sort of inability to
timely or appropriately bring the claim into notice with all the required proofs for the claim.
Likewise other processes, the company have some specific rules which constitutes of list of valid
proof of claim and how it is to be filled.
Safexpress is already targeting majority of customers in the country but faces heavy competition
in the market. Thus, the company continuously keeps a check on the responsiveness of the claims
as the company is still in growing stage, hence can offer some Lucrative packages to attract the
customers to their side., and at the same time keep an eye over the amount claimed as it will
ultimately have an impact over the financial statements of the company. The company is trying to
expand its territory by positioning themselves as value for money company and trying to reach to
the remote areas of the country. Majority of remote areas are still unexplored, and they are the
future prospective customers who can help them to capture a big chunk of market. With such

32
continuous eyesight for expansion, it calls for a need for similar continuous check for the risk
involved, and the claims thereafter.
The terminology - "at owner's risk" appears in every waybill which are issued by Safexpress to the
consignor such as traders, manufacturers, or businessmen for delivery to their dealers or any
individual customers. But this does not completely exonerate Safexpress from its liability if the
goods so consigned are not delivered, late delivered, partly delivered, or delivered in a damaged
condition. Still the transporters say so and invariably advance this plea if any action is taken against
them. It is manifest that while certainly the consignors would be advised to insure the precious
goods transported through the transporters, the mere fact that the goods receipt mentions that the
goods were dispatched at "owner's risk" should not by itself deter the consignors in claiming
compensation from the transporters.
Safexpress deals with number of categories, thus different cases of claim are witnessed by them
regularly. Few of the similar risks are discussed below.

Fig. Terms and Conditions for Customer (Behind Waybill)

The scope of Safexpress usually involves spotting a vehicle for the movement of vendor’s loads,
but sometimes shipments are improperly packed, and the same situation is well known to the
carrier. And when the carrier delivers to the destination, the shipment is damaged, the consignee
files a claim and thus it becomes difficult for the carrier to declines the claim due to improper
packaging.
Safexpress needs to check the packaging and be satisfied with cargo worthiness of the same, before
shipping the same. In case the consignment being offered by the consignee to Safexpress is not

33
cargo worthy, it has the right to refuse accepting the same from the shipping and an obligation to
the buyer not to utilize the same to avoid exposing the cargo to be loaded to the risk of damage.
But occasionally, such worthiness check for the cargos is not done properly, leading to issues
during delivery of the same to the consignor.
Another major area for concern, apart from damage of consignments, are theft and fire risk. Cargo
theft tactics are evolving. Opportunistic thieves can make almost all goods fair game. Knowing
emerging tactics can help businesses recognize their vulnerabilities and prevent potential cargo
theft. Safexpress has leveraged appropriate technology, such as GPS monitoring, which has proved
effective, but the issue remains an area of concern.
Employee motivation is of enormous importance in logistics, since motivated, efficient, and
healthy employees represent a decisive competitive advantage, especially during periods of
heightened competitive pressure and crisis. These staff, starting from a Material handler, to a
Saathi, further to a GDA, GTA, GBA and OA, finally to an area manager, ensures the safety of
consignment which will in turn ensure optimum Customer Service Level (CSL), thus efforts
should be made continuously to ensure their training and motivation. Through our project work,
we have focused on identifying such cases and through brainstorming, identify some dos and
don’ts which would help in eliminating these risks.

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CHAPTER - 4

DETAILS OF STUDY

4.1 RISK MANAGEMENT

In simple terms, risk is the possibility of something bad happening. Risk


involves uncertainty about the effects/implications of an activity with respect to something that
people value (such as health, well-being, wealth, property or the environment), often focusing on
negative, undesirable consequences. Risk management is the identification, evaluation, and
prioritization of risks followed by coordinated and economical application of resources to
minimize, monitor, and control the probability or impact of unfortunate events or to maximize the
realization of opportunities.

4.2 RISK MANAMGEMENT IN LOGISTICS INDUSTRY

Logistics is the “process of planning, implementing, and controlling the efficient, effective flow
and storage of goods, services, and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements.”

All activities in logistics have to be planned and organized well in advance. Any disruption will
lower the designed performance. In order to sustain logistics performance, a risk management
should be put in place as part of enterprise risk management. Same as business development,
logistics will subject to change to meet business requirements, at the same time, naturally, more
risks can be found in the chain. Therefore, an adaptive logistics is needed to meet the market
competition as well as a continuous risk management improvement is required to be build. In
General, risk management actions can be classified in accordance with the happenings or events.
Two approaches to handle risk must be developed. One is the mitigation action that is proactive to
reduce the risks, another is the contingency action to take when the damage had occurred.

Logistics is the backbone of any economy. Being one of the fastest growing economies, India has
great potential for significant growth in the logistics sector. The logistics industry in India is
evolving rapidly and it is the interplay of infrastructure, technology and new types of service
providers that will define whether the industry is able to help its customers reduce their logistics
costs and provide effective services (which are also growing). Changing government policies on
taxation and regulation of service providers are going to play an important role in this process.
Coordination across various government agencies requires approval from multiple ministries and
is a road block for multi modal transport in India. At the firm level, the logistics focus is moving

35
towards reducing cycle times in order to add value to their customers. Consequently, better tools
and strategies are being sought by firms in order to enhance their decision making.

4.3 PROBLEM

Safexpress is a prominent brand and one of the pioneers in the Indian logistics industry. The
company since its inception in 1997 was able to cater services throughout India. With its 25 years
of experience in the industry, the company was able to set the benchmark for its services
throughout the country, covering every square inch and almost all pin codes in the country. There
are customised solutions for all sectors of the society and they are one of the most efficient
companies in the industry with their well-built infrastructure to support the faster and efficient
delivery of consignments throughout the country. Even though Safexpress is one of the market
leaders in the industry, revenue leakage is one of the major issues they are facing. One of the major
areas of revenue leakage is the claims that the customers make for improper delivery of
consignments. In financial year 20-21 the customers claimed an amount of around 21 crores, out
of which 19.6 crores was approved by the company based on the authenticity of claims and paid
it to customers. The claim amount paid is well below the industry standard of 2% of revenues,
revenue leakage has to be reduced. Moreover, the claim incidents will impact the goodwill of the
customers and lose of existing and potential customers.

4.4 SCOPE OF THE PROJECT

Revenue leakage occurs mainly due to claims given to the customer once an improper delivery
take place. The reasons for delivery issues include damage, non-delivery, part-delivery and delays
in the delivery. The objective of the project is to find the causes for improper delivery and
recommend mitigation strategies for the company. The claims data was analysed to get a better
idea about the problem faced. The scope of the project includes the following:

 Transit worthiness of the consignment


 Booking Process
 Package of consignment before transhipment
 Consignment handling
 Worker related problems
 Theft, fire and accidents

36
CHAPTER - 5

RESEARCH METHODOLOGY

The objective of the project was to identify and mitigate the risk throughout the operations of
Safexpress. The outcome of the recommendations and suggestions made after the project aim to
achieve the following targets:

1. To decrease the number of damages, shortage, part-delivery and non-delivery issues.


2. To increase customer retention.
3. To maintain the goodwill of company.
4. To decrease theft and accident cases
5. To reduce the number of claims.

A lot of research tools were employed to meet the objectives of the project. These include Fishbone
Diagram, Pareto Chart Analysis, Hub Visits and Secondary Data Analysis.

5.1 FISHBONE DIAGRAM

Fishbone Diagram or the Cause-and-Effect Diagram was developed by Dr. Karou Ishikawa for
industrial process analysis. This visual tool is used to brainstorm and logically organize possible
cause for a specific problem or effect. The potential high-level causes are identified and
brainstorming is done to find more deep potential causes for the problem identified by the
researcher. These causes are arranged in a logical manner using the diagram. This technique helps
to identify the root cause for a problem and then the researcher will be able to shift his or her focus
in that direction. In this project, 4 categories of problems were identified as major ones. These are
errors in booking process, errors during transhipment and delivery, errors inside the ware house
during the handling of goods and external risks like theft, fire, regulations etc.

Fig. Fishbone diagram framework

37
5.2 SECONDARY DATA ANALYSIS

The claim data for the last financial year was given by the Risk Management team at Safexpress.
The data included waybill number, pickup date, booking branch, delivery branch, mode of
payment, SFX code (for credit customers), consignor consignee details, total packages booked,
packages delivered, value surcharge details, actual weight of the consignment, value of the good,
claim number, creation date, reason for the claim, approval amount, claim status, cheque number,
cheque date, claim amount and said to contain.

5.3 PARETO CHART ANALYSIS

Pareto chart is a bar chart that graphically ranks the possible causes from largest to the smallest
which can help prioritise the different problems and focus the improvements and recommendations
in that area such that large gains can be made. Pareto analysis was designed by Vilfredo Pareto
and was started using for operations management and six sigma by Dr. Joseph Juran. It is based
on a common principle that 80% of problems find their roots in 20% causes. The diagram shows
that 20% of the inputs cause 80% of the problems in the output of the company. Here the pareto
analysis is used for identifying the major causes for revenue leakage through claims and lost
customers for Safexpress. The data given from the company include details of the claims made by
customers in the financial year 20-21. Two pareto charts was made. One was made on the basis of
the place of delivery for the consignments claimed and the second one was based on the type of
materials transhipped in the consignment.

5.4 HUB VISIT

Safexpress have their transhipment hubs located in almost all cities in India for seamless
movement of consignments throughout the country. Hub visit was carried out as a part of the
project to understand and identify the risks in operations of Safexpress. The concerns and opinions
of the workers and employees were considered when the risks were identified. The entire
movement of consignments inside the hub was observed and possible risks were found out. The
drawbacks of the process flow were identified and suitable recommendations were made after the
analysis of the problems and consultation with the senior management.

5.5 REGRESSION ANALYSIS

Regression is a statistical process to identify relationships between a dependent and independent


variable. It can be used to find the degree of relationship like how strongly two variables are
related. Regression can also be used for forecasting and prediction of values for different variables

38
depending on the relationship between these variables. In this project based on data given for
analysis, regression is performed on the parameters like distance, no. of packages, claim amount
etc. In the first model of regression the relationship between distance of transportation for delivery
or transhipment of consignment and the claim amount. This was done based on the assumption
that due to increased distance of transportation the consignment is handled multiple times and
transported in different before reaching the destination and there is a chance of damage in such
conditions. In the second model we use the regression model for measuring the impact of number
of packages of consignment on the claim amount. With increased number of packages for
transportation, there is more handling in the hubs which could lead to damage of consignments.
These two relationships are studied and analysed to get a better understanding about the impact of
different parameters as risk for the operations of Safexpress.

5.6 FORECASTING

Forecasting is a method to predict what is likely to happen in the future based on the data of past
and present. Forecasting is basically a decision-making tool that help businesses cope with the
uncertainty of future. Logistics industry carries a lot of uncertainty in the working. The claim data
for the 20-21 financial year is used to calculate the claim amount for the next financial year. There
are many methods used for forecasting. The moving average method is used here to forecast the
claim amount. It is a technique used to get an overall idea of the trends in a data. It uses the average
of subset of numbers and finds application in forecasting the long-term trends. The average is
calculated several times for several subsets of data.

5.7 QUEUING THEORY

Queuing theory refers to the study of formation, function and congestion of waiting lines or queues.
There are two situations in the queuing theory. In the first part there is a request for service and
the second part is the person or thing that delivers the service. Here in this project, the two parts
are the trucks that request service of loading and unloading and the handlers who deliver these
services to the truck. Queuing theory is used to calculate the waiting time for each truck arriving
at the hub and then analyse the service delivered by handlers by loading and unloading of the
trucks. Different parameters and resource combinations are compared using the theory. This theory
is used further to find an optimum mix of resources so that maximum utilisation and effectiveness
is achieved in this process.

39
5.8 BRAINSTORMING

The objective of the project was to identify all the possible risks in the operations of Safexpress
and develop a mitigation plan for these risks. All the possible risks were identified using hub visit,
categorised and identified high impact risks using the pareto chart analysis and secondary data
analysis. The recommendations to mitigate those risks were obtained using brainstorming
techniques. Several ideas were generated during the process and discussions were carried out with
the management team of Safexpress to arrive at the final list of recommendations for the project.

40
CHAPTER - 6

ANALYSIS AND DISCUSSIONS

6.1 RISKS IN THE LOGISTICS OPERATIONS

Logistics service providers play a very important role in the supply chain because they integrate
and coordinate material and information flow. The demand for Logistics service has increased and
the competition among different Logistics Service providers have grown significantly. All the
company’s function in a complex and tightly coupled manner to ensure efficiency in their
operations, reducing cost and increase the speed of their service. There are certain vulnerabilities
and risks within the operations of a Logistic Service Provider. Some of the major causes of these
risks are as follows.

1. Fire or Accidents
2. Damage to the consignments
3. Worker related issues in the company
4. Carrier delays and non-performance
5. Hijacking and theft
6. Technology related risks

There can be many causes for these risks to occur. We analyse the operations of Safexpress from
booking to the post-delivery processes and are trying to identify these risk factors in their
processes.

6.1.1 BOOKING PROCESS

 Delay of Saathi to reach the customer (more than 90 mins) can lead to loss of business and
customer dissatisfaction.
 Improper checking of transit worthiness can cause problems to the service provider during
the transshipment. Transit unworthy consignment can suffer from damage during the
process and can cause problems.
 Improper packaging of the consignment by saathi can cause damage and problems to the
company during the transit
Improper packing occurs due to:
1. Packaging do not fit the material type
2. Improper packaging material

41
3. Careless packing by Saathi
 Mistake in information collection can lead to non-delivery of consignments and problems
during the transit
 Documents not checked properly, due to which rework has to be done
 Mistake in creation of Waybill and Barcode stickers leads to the improper handling of the
consignments and can result in non-delivery of consignments. Correct creation of Barcode
 Improper pasting of Waybill, Barcode. If these stickers are not seen properly after pasting
during the transit, it can lead to problems during the sorting of consignments in the hub
which will result in non-delivery.
 Directional Stickers, if not pasted in the right manner, can lead to damage of consignment
in transit due to handling.
 Mistake in Weight calculation, volumetric and actual weight calculation, can bring lose of
revenue and opportunity to the company.
 Mistake in selecting zone from rate card will lead to a mistake in pricing for the services,
rework for the same, and can sometimes lead to loss of customer.
 Improper stacking of consignments will lead to the damage of consignments during the
transit.
 Reconciliation of short and excess packages have to be done the vehicle reaches the hub.
If not done, it will lead to shortage of packages for delivery, if some packages go missing.
 All documents are not submitted by Saathi to the hub which will lead to delay of the
transshipment of consignments.
 Data entry mistake to Propel will cause rework and shortage of packages.

6.1.2 TRANSSHIPMENT PROCESS

 Mistake in preparing tally sheet can lead to loss of packages and will have to rework.
 Mishandling of consignments while loading and unloading of consignments is the reason
for damage of many consignments. Proper guidelines are given to the consignment
handlers with the Do’s and Don’ts.
 Over-loading/stacking of pallets. Over loading of pallets can result in toppling which might
be fatal to both the cargo handler and the consignment.
 Improper safety measures for the cargo handlers. This can lead to accidents sometimes.
 Delay in loading vehicle and dispatching consignments (more than 2 hrs.) will result in
delay of transit and delivery.

42
 Misfunction of barcode scanner during the loading and unloading can cause delay.
 Bay audit if not done properly, can reduce the chances of rectifying the mistakes in loading
and can create shortage.
 Improper sealing of the vehicle will lead to problems while transit and if theft occur during
the transit cannot be identified. Moreover, an unsealed vehicle arriving at the destination
hub will cause rework and confusion among the employees.
 Not handing over complete documents to the driver can delay the process at transshipment
hub and will cause problems during the transit.
 Improper entry in RPS can lead to mistakes in calculating the vehicle hire.
 Improper vehicle arrival sheet entry, unloading tally and audit can cause rework if some
mistakes occur.
 Improper inspection/checking of trucks was done at the exit gates. This is highly risky.
 Mishandling of consignments while unloading leads to damage of consignments.
 Delay in unloading vehicle and dispatching empty vehicle (more than 2 hrs.) can create
delay in delivery.
 Waybills not collected from drivers and placed in pigeon box properly will create delay
and mistakes in unloading and delivery of consignments.
 Improper stacking of consignments can create damage to consignments.

6.1.3 DELIVERY PROCESS

 Delay in delivery.
Delay in the delivery is caused due to:
 Improper Delivery Route plan, causing redundant movement.
 LIFO not followed while loading delivery vehicle.
 Mistake in creating Vehicle trip sheet and Gate pass.
 Improper Scanning leading to rework.
 Improper tally between barcode scan reading and tally sheet.
 Did not approach customer twice for delivery can reduce goodwill of the company and
leads to non-delivery.
 Did not collected proof of delivery (POD).
 In case of To-pay, improper documents submission.
 Unavailability of online mode of payment from consignee.

43
 Improper unloading of undelivered or returned consignments leads to damage of
consignments.
 Improper checking of returned consignments.
 Did not cancelled the gate pass of the returned consignments can cause confusion and cause
delay in operations.
 Improper reconciliation of returned consignments.
 Delay in dispatching the returned consignments to transshipment hub.
 Delay in dispatching the docs of returned consignments to corporate office.

All these risks can incur losses to company, hamper its goodwill and decrease in customers. Proper
instructions are given and SOPs are set for the entire process and information flow of the company
operations starting from booking of consignment to the delivery of consignment.

6.1.4 EMPLOYEE RELATED RISKS

The employees of Safexpress plays an important role and their efficiency is a very key aspect in
getting things done according to prescribed SOPs. If any issues occur in the company related to
the workers leading to the demotivation of employees is also a very impactful risk in the
operations. Certain schemes are enacted in the company to motivate its employees and their
development. Proper training is given to the employees on a regular basis and the problem areas
are identified and rectified accordingly. Work allocation is also carried out in an effective and
efficient manner. All these will improve efficiency of all the employees and will result in
uninterrupted and streamlined work process flow. Some risks in this area are:

 Improper training and lack of experience for the employees.


 Inexperience due to high attrition rates.
 Demotivated employees.
 Health issues to the workers.
 High absenteeism in workers.
 Improper safety measures taken by workers.

6.1.5 FIRE AND ACCIDENTS

A fire or accident taking place can cause large amounts of damage to consignments, company
resources and personals and is a huge risk in the logistics and warehousing companies. The fire or
accident can take place due to a variety of reasons.

A fire can occur due to:

44
 Improper handling of dangerous goods like flammable liquids, chemicals etc.
 Vehicle related issues:
 Old vehicles
 Temperature inside and outside the vehicle
 Vehicle batteries
 Carelessness of workers or others

Accidents can be human made due to carelessness or due to some natural hazards. In case of
accidents inside the hub or when during the transit the company is responsible to settle the claims
raised by the customer.

The cost to the company in case of a fire or accident includes the following:

 Claims by customers for the non-insured products


 Cost of repacking the undamaged goods
 Return to origin cost (if consignment is sent back to consignor due to damage)
 Extra labor Cost
 Warehouse Cost for keeping the consignments until they are shipped to consignor or
consignee after the survey and repacking
 Goodwill and Trust

There is no Standard Operating procedure for Safexpress if a fire or accident occurs since these
accidents vary on a case-to-case basis. A survey is carried out and the damage to the goods are
accessed and future steps are taken in consultation with the consignor.

6.1.6 EXTERNAL RISKS

These risks or factors can cause interruptions to the services of the company and can reduce the
quality of service provided by Safexpress. Some of these are:

 Quality of roads and infrastructure


 Road blocks due to traffic
 Natural disasters or calamities
 Regulations by external agencies like government in the industry
 Political unrest in specific areas
 risk of loss of property due to strikes, mass unrest, hostilities
 Risks of theft in particular warehouse and transportation operations

45
 Environmental risks - incident with the product or mismatch of its properties with the
package, which may cause damage to the environment

6.1.7 TECHNICAL RISKS

The services provided by Safexpress are dependent on information systems and technologies.
Any disruption or failure of these technologies can cause serious impacts to the services offered
by the company. The technology related risks to Safexpress operations are:

 Improper functioning of their cloud based RPS software Propel


 Data breach and cyber security related issues to company’s information systems
 technical risk - failure and failure of vehicles and, as a result, possible delays in delivery
of goods and increased probability of other risks

Some of the risks or problems identified in the operations of Safexpress during the hub visit are:

 Delay in loading consignments due to wet floor of vehicle.


 Improper parking of vehicle/ non-operating vehicles parked at dock space – lead to lack
of space for operating vehicles and thus, delay in reaching dock and henceforth, long
waiting time.
 Due to improper stacking of consignments (especially small volume), delayed pick-up
activity. (e.g. – Jockey /3 kg box / to Jaunpur – was kept in Varanasi area) –
 Whole WH can be divided into matrix like (ABC-123), and the location of the same
should be mentioned during put-away which makes the pickup task easy.
 Consignments to be loaded in the vehicle do not fit volumetrically, thus volumetric test is
required prior to creation of list, alternative is - deploy an extra vehicle to the same route.
 Improper packing – spillage of consignment – took 15 mins to repack and tally prior to
loading.
 Due to hastiness by driver – one consignment was not loaded, later kept in the driver’s
cabin.
 The sequence of consignment loading on Green App (which is used for scanning the
consignments to be loaded in vehicle) is not as per the vehicle route (LIFO) and this
sequence is decided by the vehicle operator.
 Delivery of part load is not allowed, and permission is needed to be conduct for the same,
time taking process – alternative is to be figured out.

46
 Expected route and time for delivery can be mapped out in PROPEL as per Waybills.
 Confusion occurred during contacting customer. Driver had contacted the consignee for
delivery retry, meanwhile OA forces the consignee to take it immediately, risk of losing
customer – single channel.
 Irrespective of the route, GDA’s pay, incentive and allowances are same.
 Pick up vendors create stickers at hub office (not at customer’s place) – risk of mixing of
the address and the respected consignments.
 Rates fixed with the permanent customers’ needs to be written down in the Propel/Green
App – this would eliminate chances of human error.
 Not accepted To-pay material by consignee and consignor left in stock - long ageing
period.
 Inappropriate payment details for DACC – caused rework.
 Confusion or miscommunication between GDA and OA regarding estimated delivery to
the customer (single point of contact should be there).
 SMS updates to the customer can be introduced, prepares the customer to take the
delivery in advance.
 Due to mishandling of consignment which contained adhesive, the packaging broke and
it spilled over the vehicle, customer denied giving POD – cost to company, vendor,
customer, opportunity.
 Due to dimensional issue, consignment wasn’t able to fit into green vehicle, the
consignment was kept at top – risk of damage.
 Lack of motivation amongst the material handler.
 Sometimes pin code inside a particular state belongs to different district but lies under
different district inside Safexpress system, thus issue in deciding the delivery person
(because different district has different delivery person).

6.2 FISHBONE DIAGRAM

Based on the following risks identified a fishbone diagram was made. A fishbone diagram is used
to categorise the potential causes of a problem. The problem identified here is the claims that
Safexpress is paying each year due to various reasons.

47
The four categories of risks identified are Errors in Transhipment and Delivery, Errors in
Booking Process, Errors inside the warehouse and the External Factors accounting for the
reasons of claims inside Safexpress. The causes of claims were prioritised and suitable
recommendations were made to reduce the risk involved for these cases.

48
6.3 DATA ANALYSIS

The claim data for the last financial year was given by the Risk Management team at
Safexpress. The data included waybill number, pickup date, booking branch, delivery branch,
mode of payment, SFX code (for credit customers), consignor consignee details, total packages
booked, packages delivered, value surcharge details, actual weight of the consignment, value
of the good, claim number, creation date, reason for the claim, approval amount, claim status,
cheque number, cheque date, claim amount and said to contain. Data editing was done
according to the requirement of analysis followed by data analysis using MS Excel and Power
BI.

6.3.1 INITIAL CLAIM ANALYSIS

The total waybill requested for claims is said to be less than 2% of the total waybills booked
in the financial year. 2% is considered as the industry standard. The total number of waybills
booked was 12,676 from April 2020 to March 2021.

CLAIMS BY DIFFERENT CUSTOMERS

There are 3 types of customers for Safexpress based on the mode of payment done by these
customers. These are credit customers, to pay customers and paid customers.

CLAIMS MADE BY DIFFERENT TYPES OF


CUSTOMERS

1609
735

10325

Credit ToPay Paid

Among all the claims made in the financial year, around 82 % were from credit customers
(10330 out of 12676), 6% from to pay customers and 12% from the paid customers. Most of

49
the customers for Safexpress are credit customers. Hence the results obtained are also in the
same proportion. The total claim amount approved for each type of customers also fall in line
with the proportion of different customers demanded claims from the company.

FREQUENCY OF TYPE OF CLAIMS

The claims made by customers can be classified into 4 categories based on the reason for claim
requested. These are Shortage, Damage, Part-Delivery and Non- Delivery.

FREQUENCY OF TYPES OF CLAIMS


9110

2568
670

334

DAMAGE NON-DELIVERY PART-DELIVERY SHORTAGE

The major reason for the claims is damage to consignments followed by shortage of
consignments. The total claim amount sanctioned by Safexpress is mainly due to damage.
60%of the claim amount was sanctioned in the last financial year for claims due to damage,
20% for non-delivery, 9% for part-delivery and 11% for shortage of consignments. This points
to the fact that if we focus on this potential area and if improvements are made for reducing
damages, a significant risk reduction can be achieved.

CLAIMED AMOUNT V/S ALLOTED AMOUNT

The total claimed amount was around 21 crores during the last financial year. Out of this, 91
percent of the amount claim was approved and the remaining claim of 9% was revoked on the
basis of authenticity of the claim case. The authenticity of claims made by the retail customers
was generally low compared to the credit customers, who is likely to have a long-term
relationship with the company.

50
CLAIMED AMOUNT VS APPROVED AMOUNT
250000000

200000000

150000000

100000000

50000000

0
Claimed Approved

6.4 PARETO CHART ANALYSIS

The Pareto chart analysis used as a statistical graphical technique to map and rank the various
causes of claims made inside Safexpress starting from the most frequent to the least one with a
goal of focusing efforts on the factors that produces greatest impact on the entire claims made
inside the company.

To begin with the analysis, initial plan was created to analyse Pareto chart based on the categories
of the consignment being shipped by the company, and another Pareto chart to analyse the claims
made based on location to which these consignments were shipped. To summarise, we created
Pareto Chart to identify the top states and top category of the product causing majority of the
claims.

The very next step for the Pareto analysis was to categorise these consignments, thus the major
categorisation of the same were as follows - Automotive, Institutional, FMCG and Consumer
Electronics, Apparels and Lifestyle, Healthcare, Engineering, Hi-Tech and Books and Periodicals,
and for location-based analysis, the geographical diversification of Indian states were used.

It can be observed from the Pareto chart, that the major portion of the claim made to the company
by the customers can be attributed to these four main types of consignments falling in these
categories, i.e., Automotive, Institutional, FMCG and Consumer Electronics and Apparels and
Lifestyle (majorly including automobiles spare parts, individual consignments, or personal
belongings, FMCG, edible, consumer electronics, clothing, footwear, and other lifestyle items).

51
Product Category wise Claim
6000 100%

%age Cummulative of Claim


90%
5000 80%
Counts of Claim (Nos.)

4000 70%
60%
3000 50%
40%
2000 30%
1000 20%
10%
0 0%

No. of Claim per State Cumm. %age of Claim

Fig. Pareto Chart for Product Category

Major Product Category for Claim

17%
33%

22%

28%

AUTOMOTIVE INSTITUTIONAL FMCG & CONSUMER ELECTRONICS APPARELS & LIFESTYLE

Fig. Share of Major Product Categories causing Claim.

52
Statewise Claim
2000 100.00%
1800 90.00%

%age Cummulative of Claim


Counts of Claim (Nos.)

1600 80.00%
1400 70.00%
1200 60.00%
1000 50.00%
800 40.00%
600 30.00%
400 20.00%
200 10.00%
0 0.00%

No. of Claim per State Cumm. %age of Claim

Fig. Pareto Chart for State wise Claim

Fig. State wise Claims Frequency

53
Also, the Pareto Chart explains that major claims originated from the consignment that are booked
towards the States mentioned on the left-hand side of the chart Figure 24, the same are highlighted
in Figure 25. This states that extra precautions efforts are to be taken for consignment with such
type of destinations.

6.5 REGRESSION ANALYSIS

6.5.1 RELATIONSHIP BETWEEN DISTANCE AND CLAIM AMOUNT

Aim: To find the impact of distance on the claim amount for the company.

Process:

 Simple random sampling is used to take the sample size of 8,676 out of total data
12,683.
 The sample size is big enough to minimize the sample random sampling error.
 The latitude and longitude of each booking and delivery branch are calculated using
geolocation and merged to convert them into coordinates.
 A python code is created to calculate the distance between the coordinates of the
booking and delivery branch.
 Outliers are removed to increase the efficiency of the result.
 Regression analysis is performed to known the relation/ impact of distance on the claim
amount.

Variable:

 Independent Variable: - Distance


 Dependent Variable: - Claim Amount

Hypothesis:

 Null Hypothesis: - Claim amount does get effected by the increase in the distance of
the transportation or delivery

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 Alternate hypothesis: - Claim amount does not increase with the increase in the
distance of the transportation or delivery

Fig. The regression model summary depicting the significance value for the model

Result

 As the value of significance F is lesser than 0.05, therefore the alternate hypothesis is
accepted
 This implies that distance has no impact on the claim amount which shows the
operational efficiency of Safexpress.

6.5.2 RELATIONSHIP BETWEEN NO. OF PACKAGES AND CLAIM AMOUNT

Aim: To find the impact of the number of packages on the claim amount for the company.

Process:

 Simple random sampling is used to take the sample size of 8,676 out of total data
12,683.
 The sample size is big enough to minimize the sample random sampling error.
 Outliers are removed to increase the efficiency of the result.
 Regression analysis is performed to known the relation/ impact of the number of
packages delivered on the claim amount.

Variable:

 Independent Variable: - Number of Packages


 Dependent Variable: - Claim Amount

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Hypothesis:

 Null Hypothesis: - Claim amount does not get affected by the no. of packages involved
in the transportation or delivery
 Alternate hypothesis: - Claim amount increases with the increase in the no. of
packages involved in the transportation or delivery

Fig. The regression model summary depicting the significance value for the model

Result:

 As the value of significance F is greater than 0.05, therefore null hypothesis is accepted.
 This implies that the number of packages has no impact on the claim amount which
shows the efficiency of the operation of Safexpress.

6.6 FORECASTING CLAIMS FOR NEXT YEAR

Aim: To forecast the claim amount for the company based on the previous year's claim data.

Process:

 Simple random sampling is used to take the sample size of 9,840 out of total data
12,683.
 The sample size is big enough to minimize the sample random sampling error.
 Forecasting is done through the Moving Average Method using approval amount (Y t).
 Data is segregated into 4 quarters in a year.
 The average of claim data is taken to calculate the moving averages (Y t).
 The centered moving average (CMA) is calculated to obtain the baseline for the data.
 Seasonality (St) and Irregularity (It) are obtained by dividing the (Yt) with (CMA).

56
 Irregularity is removed from the data by adding taking an average of the same quarters'
data.
 Deseasonalization is done by diving (Yt) with (St).
 Regression analysis is performed between Deseasonalization and Time series.
 Trend Line (Tt) is created by adding the coefficient of intercept and time series and
multiplying it with the quarter number.
 The forecast is obtained by multiplying seasonality (St) and Trend line (Tt).

Formula For Forecasting: -

Yt=St x It x Tt

Fig. Forecast data for the next year in Power BI

Result:

 The forecasting of claim data is very important for Safexpress to curb revenue leakage.
 The forecasting is done for the next four quarters which will help the company to reduce
the revenue leakage and plan the operation accordingly.

6.7 QUEUING THEORY


Aim: To study the impact of number of workmen for material handling over the service time
per vehicle during the vehicle loading.

57
PROCESS

• Noted down observations for the time taken by to load vehicles for three days. Total number
of observations counts to 11.
• With start and end time for each observation, control chart was formulated to identify mean
time with upper and lower control limits.

Control Chart for Service Time


1:26
Service Time (in Hrs:Mins)

1:12 1:09 = UCL

0:57

0:43

0:28

0:14
0:00 = LCL
0:00
1 2 3 4 5 6 7 8 9 10 11

Fig. Control Chart for Vehicle Loading Time

• From the company’s ERP, the number of vehicles arriving the station per day was obtained
and thereby calculated number of vehicles served per hour.
• Considering each server containing 2 nos. material handling workmen, applying various
combinations of the mentioned counts of server, we calculated waiting time and total time a
vehicle would be in the system.

RESULT:

• At present condition, if the workmen are increase to 8 nos. from 6 nos., there is decrease of
approximately 40% in the total service time and 80% in the waiting time. This method is to be
used at each station to identify optimum strength of the workers.

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Rate of Customer arrival l = 4.17 per hr
Rate of Service by one server m = 1.76 per hr
No. of servers c = 3 Nos
Rate of Service by all server c x m = 5.29 per hr

Intensity/Utilisation r = 79%

P(x) for idle server P 0 = 6.079%

Expected no. of Customers in Queue E(m) = 2.31

Expected no. of Customers in System E(n) = 4.68

Expected waiting time of Customers in System E(w) = 33.33 mins

Expected total time of Customers in System E(v) = 67.33 mins


Fig. Queuing Theory for Server = 3 Nos

Rate of Customer arrival l = 4.17 per hr


Rate of Service by one server m = 1.76 per hr
No. of servers c = 4 Nos
Rate of Service by all server c x m = 7.06 per hr

Intensity/Utilisation r = 59%

P(x) for idle server P 0 = 8.693%

Expected no. of Customers in Queue E(m) = 0.40

Expected no. of Customers in System E(n) = 2.76

Expected waiting time of Customers in System E(w) = 5.70 mins

Expected total time of Customers in System E(v) = 39.70 mins


Fig. Queuing Theory for Server = 4 Nos

59
CHAPTER - 7

RECOMMENDATIONS

The recommendations were made after the analysis of different risks and factors involved in the
operations of Safexpress and in consultation with the management team at Safexpress. The
recommendations are grouped based on the different categories in the fishbone diagram made after
the analysis. The solutions to mitigate the risks identified are as follows.

Eliminating errors in Booking Process

 Improper Packaging/Wrong Sticker – consent from customer should be taken on waybill for
the packaging worthiness
 Printing of sticker done at hub – The sticker can be divided into two parts, barcode part,
which is to be pre-printed and pasted in front of customer, and details for the consignment
can be entered using the same barcode number. The remaining part of the sticker (from, to,
lot size) can be printed later at office and pasted to the consignment.
 Wrong Transport worthiness check/Improper stacking inside vehicle /Improper repackaging
of consignments – Case study-based training is to be given to the handlers and booking
associates in order to improve their decision making, quality of work and efficiency.
 Wrong Dimension / Improper handling of over-dimensional consignment – Volumetric
check of all Waybill going inside the vehicle should be done before loading.

Eliminating error in Transhipment/Delivery

 Vehicle not sealed pack/Old vehicle – Vehicle audit is to be carried out at least in each
month. This should be done at the respective hubs. The audit report has to be stored.
 Improper packaging for rough terrain – Cushioning of the floor of the containerised vehicle,
cushioning of the fragile material should be done to minimise the damage.
 Error in pin code leading to Part delivery / Improper pin code in Propel – Correcting pin
code in propel once for all after the problem is solved.
 Vehicle and Driver detail and Seal no. is not entered properly in Green App – Upload a photo
of seal in Green App before the vehicle leaves for transhipment or delivery.
 Incomplete POD collected – Until and unless the POD is uploaded in the Green app, further
delivery will not allowed by the delivery associates.

60
Eliminating error inside Warehouse

 Improper stacking / Mishandling of consignments – Motivate the handler and stick the Tip
N Tell sticker in every fragile and bulk consignment.
 LIFO not followed while loading inside delivery vehicle – sequence should be visible in the
green app as per the route, so that the handlers can load the vehicle accordingly.
 Customer refused payment or not accepted To-pay consignment / Customer unavailable for
pickup – SMS service to be brought into action for intimating the consignee about the
delivery. Consignee should be informed about the charges, consignment details and expected
time of delivery at the time of booking through SMS.
 Risky materials kept together – The risky materials like the chemicals should be kept away
inside warehouse and truck. Trays should be used for chemical-based consignment during
the transhipment.

Eliminating External error

 Miscommunication between GDA and OA / Did not attempt delivery – An option should be
there in green app for the GDAs to enter the reason for non-delivery and next expected
delivery attempt for the returned or undelivered consignments.
 Lack of training and motivation – The handlers should be given a designation like Saathi
and a monthly appreciation should be given to them based on their performance.
 Health and Safety of employee – Shoes, shoulder pads, gloves and medical assurance (on
submission of proper proof) should be provided for the labours/drivers.
 Improper valuation of the consignment – Statement of what is inside the consignment along
with a tentative value should be collected from the consignor.
 Theft – Background screening of drivers and associates –
1. Add police verification of the drivers
2. Use blockchain with Barcode to trace the consignment even after the theft
3. Forceful attempt to break the lock should instigate an alarm
4. Identify safe parking areas for the vehicle on long routes and ask the driver to park the
vehicle in these areas only.
5. Brake lock system which allows only driver to unlock the brakes for the vehicle
movement.
 Fire – Fire extinguisher, Tarpaulin and Bucket should be available in the cabin of all
vehicles.

61
CHAPTER - 8

CONCLUSION AND LEARNINGS

The internship awarded an opportunity for me to work with Safexpress, one of the most prominent
and leading brands in the Indian logistics industry. Safexpress serves more than 31000 pin codes
and covers every square inch of area with their efficient and well-developed logistics services. The
project involved studying about the company, its entire operations, different work processes taking
place in the company and to identify and recommend mitigation plans to improve customer
satisfaction and reduce revenue leakage for the company. Safexpress suffers from revenue leakage
mainly in the form of claims made by customers for improper delivery of consignments to the
customers. The possible reasons for the improper delivery were studied. Several factors like theft,
damage to consignments, mistakes in delivery, worker caused problems like improper handling of
consignments, bad packaging etc. contributed to the revenue leakage through claims. The data of
claims for financial year 2020-21 was analysed to draw some conclusions. The damage of
consignments during the transit or when in the hub was a major issue. The number of automotive
parts consignments damaged was very high compared to other types of consignments. All the risks
were categorised and ranked according to their importance. Relationship of claims with respect to
distance and number of packages was analysed. Recommendations were made for mitigating these
risks.

With the increasing competition in the logistics sector, the importance for satisfying customers
and providing them with great services is a very important factor for improving the market share
and goodwill for the company. Risk management is one of the key functional areas, which will
help the companies to understand and improve their services to increase the satisfaction for their
services among the customers. This internship helped me realise the importance of risk
management in the logistics industry and provided me valuable information about Safexpress and
logistics industry as a whole.

62
CHAPTER - 9

REFERENCES

1. Hui. M. Wee, Risk Management in Logistics, January 2012


2. Alper, Tekin, Risk Management in Logistics Sampling of Risk Components, November
2017
3. Chapelle, Risk Mitigation, December 2018
4. Bogovich, Jordon, Route Risk Mitigation, April 2015
5. Wills, Operationalizing Risk Mitigation, April 2019
6. www.safexpress.com
7. www.researchgate.net
8. www.inboundlogistics.com
9. www.ibef.org

63
APPENDIX

20DM021_Alvin_Subash_SIP_PLAG.docx
ORIGINALITY REPORT

16 %
SIMILARITY INDEX
17%
INTERNET SOURCES
1%
PUBLICATIONS
6%
STUDENT PAPERS

PRIMARY SOURCES

1
www.safexpress.com
Internet Source 7%
2
www.vinayroadline.com
Internet Source 3%
3
www.freepatentsonline.com
Internet Source 1%
4
www.scribd.com
Internet Source 1%
5
fernfortuniversity.com
Internet Source 1%
6
www.safeducate.com
Internet Source 1%
7
Ariane Chapelle. "Operational Risk
Management", Wiley, 2018
1%
Publication

64
8
link.springer.com
Internet Source 1%
9
www.slideshare.net
Internet Source 1%
www.indiatoday.in
10 Internet Source 1%
Exclude quotes On Exclude matches < 1%
Exclude bibliography On

65

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