SUMMER TRANNING PROJECT REPORT

ON

(STUDY OF PARTY LOGISTICS AT

ORIGIN LOGISTIC Pvt.Ltd)

FOR

Submitted in partial fulfilment for the requirement of the award of post-

graduate
Degree of
Masters of Business Administration (Lscm)
(Batch 2019-21)

SUBMITTED BY:

Preeti Yadav

MBA IV Semester

Enrollment No- 1607010001630

Submitted to

Acharya Vishnu Gupt Subharti College of Management & Commerce

SWAMI VIVEKANAND SUBHARTI UNIVERSITY, MEERUT
 ACKNOWLEDGEMENT

I am sincerely thankful to all those people who have been giving me any kind of
assistance in the making of this project report.

I express my gratitude to who has through her vast experience and knowledge
has been able to guide me, both ably and successfully towards the completion of
the project.

I would hereby, make most of the opportunity by expressing my sincere thanks

to all my faculties whose teachings gave me conceptual understanding and
clarity of comprehension, which ultimately made my work easier. Credit goes to
all my friends whose encouragement kept me in good stead.

Their continuous support has given me the strength and confidence to complete
the project without any difficulty.
 Index

Sr. CHAPTERS PAGE

No. No.
1 Executive Summery 4
2 Organization Profile 5
3 Outline of the Problem 8
4 Introduction 9

1. Introduction of Mustard oil 10

2. Market Potential of Mustard oil
10
3. Market Trends of Mustard oil
4. Process of Making Mustard oil 11

5. Nutritious Value of Mustard oil 11

6. Status Mustard oil Industry
12

14
5 Literature Review 16
6 Company Profile 18

1. Profile 19

2. Distribution Channel of PURI OIL MILLS Ltd 31

7 Project Profile 32

1. Purpose & Scope 33

2. Research Methodology
34
3. Data Analysis
37
8 Project Finding & Recommendations 47
 1. Conclusion 48
2. Recommendation
49
9 APPENDIX 50
10 BIBLIOGRAPHY 51

EXECUTIVE SUMMARY
The third-party logistics industry has come a long way in its relatively short history, a
maturity curve that has been documented in the seventeen years of this study. Early
on, shippers cautiously entrusted 3PLs with a relatively limited number of core
services, such as managing warehousing and transportation, then steadily asked 3PLs
to do more. 3PLs honed their craft in delivery of these services, while gaining
shippers’ trust and building toward more collaborative, integrated relationships with
their customers. Similar to other industries, shippers (customers) sometimes revisit
their decisions to use 3PLs, even over short periods of time. Overall, however,
results of this study suggest that far more companies increase their logistics
outsourcing in any given year than those that bring most logistics services back in-
house – which helps to explain
3PLs continue to rank their relationships with shippers a bit higher than shippers do,
but the vast majority (88% of shippers and 94% of 3PLs) view their relationships as
successful. Openness, transparency, and good communication as well as agility and
flexibility contribute to this success. Interestingly, figures from this year’s study
suggest decreases in the use of gain sharing and collaboration.

Later I went through the process of filling the questionnaires from 100 customers
which using 3rd party logistics both retailers and customers were taken into account to
make this project more effective. Secondary data from various sources like
magazines, a journal etc has also been taken.

1.1 OBJECTIVES OF THE STUDEY

The study of this topic has been undertaken with a number of objectives. Following
are the objectives of this study:

a) To understand the concept of 3rd party logistics, various operations in 3rd

party logistics.
b) Cost and time savings for the client.
c) Ability of client to focus on core business
d) To study the warehousing, inventory management and damage control.

INTRODUCTION- ABOUT 3rd Party Logistics

Definition

“Third-party Logistics is simply the use of an outside company to perform all or

part of the firm’s materials management and product distribution function.”

THIRD PARTY LOGISTICS is an industry to which a shipper (owner of

transported goods) outsources various elements of the supply chain to perform
some / all logistics management functions including inbound freight, customs,
warehousing, order fulfillment, distribution and outbound freight.

• Initiated in 1980s when companies began looking for opportunities to

improver logistics performance.

• FedEx drew attention to 3PL service by offering JIT delivery

• FedEx success in 3PL marketplace opened it up to competition

• Initially primarily domestic coverage, 3PL industry is now global in

character with a revenues approaching $150 billion in NA.
Characteristics of 3PL
 Types of 3PL

• There are three types of third party logistics providers:

1. Asset Based – 3PL companies that use their own trucks,

warehouses and personnel to operate the client’s business

2. Management Based – 3PL companies that provide the technological

and managerial functions to operate the logistics functions of their
clients, but do so using the assets of other companies and do not
necessarily own any assets

3. Integrated Providers – 3PL companies that can either be asset

based or management based that supplement their services with
whatever services are needed by their clients

As conditions for doing business in a global setting have changed significantly during
the last two decades the importance of logistics and supply chain management
(LSCM) has been recognized universally. As companies realized the need to adapt to
the ever changing conditions in an environment of globalization, technological
innovation, and more sophisticated consumer demand to survive and flourish they
began to incorporate into their systems of operations and focus on a strong LSCM
component (Rushton & Walker, 2007). Superior logistics and supply chain
performance is now a well-recognized strategic dimension for companies to gain
competitive advantage.

The growth of logistics outsourcing in the USA is attributable to better transportation

solutions; greater focus on core businesses; impact on cost reduction; improvements
in services; development of necessary technological expertise; availability of
computerized systems; and the need for more professional and better prepared
logistics services (Sheffi, 1990). The growth of business dynamics has caused
outsourcing of the logistics activities to gain increasingly greater importance.
Companies have been considering various options to manage their logistics activities
including, creating in house dedicated logistics function, setting up logistics
subsidiaries or acquiring a logistics firm. (Sahay & Mohan, 2006).

A 3PL provider is a company which supplies and/or co-ordinates logistics functions

across multiple links in the supply chain. The company acts as a “third party”
facilitator between seller/manufacturer (the “first party”) and buyer/user (the ‘second
party’),

Figure 1. Main components of 3PL.

A third-party logistics provider is (abbreviated 3PL, or sometimes TPL) is a firm
that provides service to its customers of outsourced (or "third
party") logistics services for part, or all of their supply chain management functions.
Third party logistics providers typically specialize in integrated
operation, warehousing and transportation services that can be scaled and customized
to customers' needs based on market conditions and the demands and delivery service
requirements for their products and materials. Often, these services go beyond
logistics and include value-added services related to the production or procurement of
goods, i.e., services that integrate parts of the supply chain. Then the provider is
called third-party supply chain management provider (3PSCM) or supply chain
management service provider (SCMSP). Third Party Logistics System is a process
which targets a particular Function in the management. It may be like warehousing,
transportation, raw material provider, etc.

*Advantages and disadvantages of third party logistics

a) Advantages of 3PL
1. Cost and time savings for the client
As logistics is the core competence of third party logistics providers. They possess
better know how and a greater expertise as any producing or selling company could
be able. This know how together with the global networks of the often large company
size enables a higher time and cost efficiency. Another point is, that the equipment
and the IT systems of 3PL providers are constantly updated and adapted to new
requirement of their customers, so that they are able to meet the requirements of their
customer’s suppliers. And that is more than essential to a company’s survival.
Producing or selling companies often do not have the time, resources or expertise to
adapt their equipment and systems as quickly as necessary. So in conclusion a 3PL
provider can meet the technical requirements in a faster and more cost efficient way
than a company could do itself.
2. Low capital commitment
Thus the fact that most or all operative functions are outsourced to a 3PL provider
there is no need for the client to hold own warehouses or transport assets. There is
very less or no tied up logistics capital. This is very beneficial if a company has high
deviations in warehouse capacity utilization, because a bad capacity utilization ratio
at equal fix cost (for warehouse) is evil for a company’s efficiency and profits.
3. Ability of client to focus on core business
The outsourcing of logistics departments permits the company to focus even more on
their real core business. If logistics is one of the firms’ core businesses then
outsourcing doesn’t make sense. But if logistics is no core competency but rather
needed or annoying attachment it should be outsourced to a logistics provider,
because the continuous increasing of business complexity makes it impossible to be
an expert in every division or sector.[4] And if you are no expert in a division, there is
always the opportunity to improve. Often only the core competency is really adding
value to your product. So it is immense important to be best in class or one of the
market leaders to generate profits, because normally the quality of the core product is
the main (not the only, but the main!) reason for the consumer to buy it.
4. 3PLs provide flexibility
Third party logistics provider can provide a much higher flexibility in geographic
aspects and can offer a much larger variety of services than the clients could provider
their selves. In addition to that, the client gets flexibility in resources and workforce
size and logistics fix costs turn into variable costs.

*Possible disadvantage of 3PL

The only big disadvantage (if you see it as one) is the loss of control a client has by
working with third party logistics. Eminently in outbound logistics when the 3PL
provider completely assumes the communication and interacting with a firms
customer or supplier. By having a good and continuous communication with their
clients most 3PL’s counter and try to charm away such doubts. Some 3PL’s even
paint the clients logos on their assets and vest their employees like the clients ones.

1.3 Implementation issues and requirements of 3PL collaboration

Due to the fact that a 3PL to client collaboration is a typical strategic alliance, as the
author mentioned earlier in this thesis, there will be an introduction of problem areas
in the practical implementation of strategic alliances. This points are important for a
successful strategic alliance. If they aren’t fulfilled or only badly, this will lead to
immense problems. And these problems will be even more serious in the
development of a strategic alliance than in a company’s daily routine, because
damaged faith in respect to the benefits and success of such an alliance is deadly and
destructive for change motivation of all people involved.
Important issues to think about, before contracting with a 3PL provider
First you have to know about your own logistics costs. Because only if you know
exactly your own costs you can compare it to the costs of a logistics provider. Often it
is useful to know the direct costs of each product and service, because sometime it
makes sense to outsource only some parts of the logistics and leave some products or
operating steps untouched because the in-house logistics is able to do better or
cheaper than an external provider.[8] Another important point is the customer
orientation of the 3PL provider. The provider has to fit to the structures and the
requirements of the company. This fit is more important than the pure cost savings,
like a survey of 3Pl providers shows clearly: The customer orientation in form of
adaptability to changing customer needs, reliability and the flexibility of third party
logistics provider were mentioned as much more important than pure cost savings.[9]
Closely entangled together with the point of customer orientation is the point of a
3PL’s specialization. The special requirements of the own company should be flow
into the decision which 3PL is the right one to choose. Experts often suggest firms to
choose 3Pl providers with roots in the same area of logistics as the department that
shall be outsourced.
Furthermore it is worth to discuss if the company wants an asset-owning or a non-
asset-owning 3PL Provider. 3PL provider without own assets are called lead logistics
providers. Lead logistics provider have the advantage that they have specialized
industry expertise combined with low overhead costs, but lower negotiation power
and less resources than a third party provider has, based on a normally big company
size, a good customer base and established network systems. But 3Pl providers tend
to shed clients efficiency consciously by preferring their own assets in order to
maximize their own efficiency. In addition to that third party logistics provider often
are bureaucratic and have long decision making cycles caused by the size of the
company.

*Implementation issues
If a company gets the result that it wants to implement a third party logistics provider
into their processes, it has to work on the following implementation issues. These are
points a company that is purchasing the third party logistics services, has to fulfill.
The startup phase of such a strategic alliance is the most difficult and most critical
phase. For implementation considerations there has to be planned a time frame of
between six months and a year! Otherwise you risk quality and reliability losses. The
client company has to clearly identify their needs and expectations to the 3PL exactly
to avoid misunderstandings and disaffections due to miscommunications.
Performance measure has to be set. Concrete guidelines are necessary.
Necessary guidelines:

 Aims and methods for target achievement have to be set

 Milestones for important actions of the alliance project have to be set
 Actions for encouragement of strengths on the one hand and methods for
compensation of weaknesses have to be planned
 Concept for the integration of alliance partners have to be developed
 Critical parts of the contract have to be discussed and a for both sides
responsible agreement have to be found
 A time frame of the contract has to be given.

Both parties, provider and client, must concentrate on the aim of a good collaboration
concept with mutual beneficial. Otherwise if there is no win-win situation one party
suffers and reduce its efforts.[ Just as important as the good communication between
client and provider is the communication within the workforce and employees and
not only within the managers’ level. In the best case the communication is
informative, motivating and anticipatory. The integration of employees should have
highest priority! To avoid incertitude of employees, customers and business partners’
changes in respect to structures and reliabilities have to be communicated internal
and external as early as possible. Good communication is essential within such a
project, employees want to know why a company is outsourcing and what the
expectations of this step are.[Upcoming fear in respect to employee reduction have to
be faced within the different departments in an early stage, if there is none, because
fear of losing one’s livelihood is paralyzing the working morale. The employees
should be motivated and mobilized to an active cooperation by understanding the
change as a chance.

1.4 *Motivation and aims of 3PL collaborations

The first point reported about now, is instantly the most stimulating and propulsive
reason for shippers and companies to commit their selves into strategic alliance
collaborations with third party logistics providers.
Often companies, equal what size they have, aren’t able to improve their market
position, as fast as the hard concurrency and competition in the national and
international business requires, alone. Or if they are able this fast adaption to the
market requirements would cause immense and disproportional costs.[16] So the
companies try to get their logistics more efficient and costs economic by working
together with third party logistics provider that have the size, the experience and the
know-how to make the clients supply chain more cost efficient, more flexible and
more profitable ( see also the advantages of 3PL in chapter .The 2014 annual Third
Party Logistics Study (subtitle: The State of Logistics Outsourcing) of Capgemini
investigated, that third party logistics clients have an average logistics cost reduction
of 11%, an average inventory cost reduction of 6%, and an average fixed logistics
cost reduction of even 23% by outsourcing their logistics to 3PL providers. Another
important point for shipper is, that their fill rates and their order accuracy increase
what is really important within the hard competition to satisfy, in special the
challenging, but also the general customer.
*Types of 3PL providers
Third-party logistics providers include freight forwarders, courier companies, as well
as other companies integrating & offering subcontracted logistics and transportation
services.
Hertz and Alfredsson (2003) describe four categories of 3PL providers.

 Standard 3PL Provider: this is the most basic form of a 3PL provider. They
would perform activities such as, pick and pack, warehousing, and distribution
(business) – the most basic functions of logistics. For a majority of these firms,
the 3PL function is not their main activity.
 Service Developer: this type of 3PL provider will offer their customers
advanced value-added services such as: tracking and tracing, cross-docking,
specific packaging, or providing a unique security system. A solid IT foundation
and a focus on economies of scale and scope will enable this type of 3PL provider
to perform these types of tasks.
 The Customer Adapter: this type of 3PL provider comes in at the request of the
customer and essentially takes over complete control of the company's logistics
activities. The 3PL provider improves the logistics dramatically, but does not
develop a new service. The customer base for this type of 3PL provider is
typically quite small.

On-demand transportation
On-demand transportation is a relatively new term coined by 3PL providers to
describe their brokerage, ad-hoc, and "flyer" service offerings. On-demand
transportation has become a mandatory capability for today's successful 3PL
providers in offering client specific solutions to supply chain needs.
These shipments do not usually move under the "lowest rate wins" scenario and can
be very profitable to the 3PL that wins the business. The cost quoted to customers for
on-demand services are based on specific circumstances and availability and can
differ greatly from normal "published" rates.
On-demand transportation is a niche that continues to grow and evolve within the
3PL industry.
Specific modes of transport that may be subject to the on-demand model include (but
are not limited to) the following:

 FTL, or Full Truck Load

 Hotshot (direct, exclusive courier)
 Next Flight Out, sometimes also referred to as Best Flight Out (commercial
airline shipping)
 International Expedited
On-demand transportation is a term to reflect what have become known as "smile and
dial" brokerages that essentially work as telemarketing call centers. Brokers have no
obligation to successfully ship all loads (as opposed to contract logistics providers)
and almost all sales representatives are heavily (and 100%) commissioned, and much
of the workers' day is spent cold-calling sales leads. Smile-and-dial brokerages
typically require a 15% gross profit margin (the difference between what the shipper
pays the brokerage and what the brokerage pays the carrier), and the commission
compensation scheme means that the turnover of personnel in the call centers
approaches 100% per year.
For the occasional shipper, smile-and-dial brokerages can provide a convenient way
to have goods shipped. But the lack of deep expertise due to constant turnover,
combined with the 15% pricing margins, mean that a reasonably capable traffic
professional can obtain transportation services much more economically and reliably.

1.5 Market Potential of 3rd Party Logistics

Third-party logistics (3PL) or logistics outsourcing is gaining importance as more and
more corporations across the world, unable to manage their complex supply chains,
are outsourcing logistics activities to the 3PL or logistics service providers. The 3PL
market in India is least developed and highly fragmented. However, due to the
increasing awareness of the Indian firms towards the benefits of logistics outsourcing
there is an immense potential for growth of 3PL in India.
Indian logistics industry is likely to continue its growth momentum due to the
reviving fortunes of the sector with booming end-user industries. Thus, to facilitate a
better analysis of the penetration level of 3PL logistic services across different
industries in India, we have studied the market potential of the 3PL services in four
major industries including: Automobile, IT Hardware, FMCG and Consumer
Electronics till 2015. Subsequently, it has been found that the automobile industry
dominates the 3PL market with majority share, and is forecasted to remain the fastest
growing segment in Indian 3PL market.

Further, it has been revealed that storage infrastructure is the most important aspect
of the logistics industry supply chain and forms the fundamental platform for the
development of logistics industry in any market across the globe. The report also
covers analysis of Warehousing, Cold Storage and CFS/ICD (Container Freight
Stations/Inland Container Depot) industry in India. It was found that, the CFS/ICD
industry is expected to register a strong growth in future, followed by cold storage
industry.

As infrastructure is the most important part of logistics industry, thus our report
discusses freight movement by roads, railways, air and ocean. Continuous
improvement in logistic infrastructure has led 3PL services to be perceived as a far
better mode of controlling both internal and external logistic processes. The report
also covers brief overview of logistics parks in India along with emerging industry
trends such as Green Logistics and 4PL industry.
The report also provides profiling of the major public and private players, which will
help the clients to gain insights on their overall business and industry activities.
Overall, the report is likely to prove as a proper source of knowledge for investors
and clients interested for investment in the Indian 3PL Market.

Indian Third party logistics market has been consistent over the past few years, but it
is expected to show a tremendous change in the next few years. Growth of the sector
is backed by investment in infrastructure, globalization of manufacturing systems.

Supply Chain Integration

 1.6 Why Use 3PL?
*BECAUSE SOMEONE ELSE CAN DO IT BETTER
Even if you have resources available, another organization within the supply chain
may be able to do it better, simply because its relative position in the supply chain,
supply chain expertise and economies of scale.
*TO SHARE RESPONSIBILITY
3PL companies can share responsibility for managing global supply chains, keeping
customers and stores properly stocked, and delivering the perfect order every time.

*TO RE-ENGINEER DISTRIBUTION NETWORKS

Logistics outsourcing can be a quick way to re-engineer distribution networks to meet
global market demands and gain a competitive edge. Did you know that you can drill
into the history of each SKU number tracked by P3PL and view when and to where
every piece was shipped, when new stock arrive and how many?

*BENEFITS OF USING A 3PL

 Reduced total delivered cost for your customer

 Local expertise in new markets
 Improved customer service through shorter shipment times
 Reduced inventory costs through better management
 Cost benefits through volume shipping discounts
 Improved focus on core competency
 Increased shipment visibility
 More scalable logistics operation and cost model
 Improved variety of technology and service
 Risk reduction

1.7 WAREHOUSE MANAGEMENT

Warehousing Management is one of the important aspects of 3rd party logistics
companies; where companies are store their stock in large warehouses in proper
manner. A warehouse is a commercial building for storage of goods. Warehouses are
used by manufacturers, importers, exporters, wholesalers,
transport businesses, customs, etc. They are usually large plain buildings in industrial
areas of cities and towns and villages. They usually have loading docks to load and
unload goods from trucks. Sometimes warehouses are designed for the loading and
unloading of goods directly from railways, airports, or seaports. They often
have cranes and forklifts for moving goods, which are usually placed on ISO
standard pallets loaded into pallet racks. Stored goods can include any raw materials,
packing materials, spare parts, components, or finished goods associated with
agriculture, manufacturing and production.
Storage and shipping systems in Warehouses:
Some of the most common warehouse storage systems are:
 Pallet racking including selective, drive-in, drive-thru, double-deep, pushback,
and gravity flow
 Mezzanine including structural, roll formed, racks
 Vertical Lift Modules
 Horizontal Carousels
 Vertical Carousels

A "piece pick" is a type of order selection process where product is picked and
handled in individual units and placed in an outer carton, tote or other container
before shipping. Catalog companies and internet retailers are examples of
predominantly piece-pick operations. Their customers rarely order in pallet or case
quantities; instead, they typically order just one or two pieces of one or two items.
Several elements make up the piece-pick system. They include the order, the picker,
the pick module, the pick area, handling equipment, the container, the pick method
used and the information technology used.] Every movement inside a warehouse must
be accompanied by a work order. Warehouse operation can fail when workers move
goods without work orders, or when a storage position is left unregistered in the
system.Material direction and tracking in a warehouse can be coordinated by
a Warehouse Management System (WMS), a database driven computer
program. Logistics personnel use the WMS to improve warehouse efficiency by
directing pathways and to maintain accurate inventory by recording warehouse
transactions.

Automation and optimization in Warehouses

Some warehouses are completely automated, and require only operators to work and
handle all the task. Pallets and product move on a system of
automated conveyors, cranes and automated storage and retrieval
systems coordinated by programmable logic controllers and
computers running logistics automation software. These systems are often installed
in refrigerated warehouses where temperatures are kept very cold to keep product
from spoiling, especially in electronics warehouse where they require specific
temperature to avoid damaging the parts, and also where land is expensive, as
automated storage systems can use vertical space efficiently. These high-bay storage
areas are often more than 10 meters (33 feet) high, with some over 20 meters
(65 feet) high. Automated storage systems can be built up to 40m high.

For a warehouse to function efficiently, the facility must be properly slotted. Slotting

addresses which storage medium a product is picked from (pallet rack or carton
flow), and how they are picked (pick-to-light, pick-to-voice, or pick-to-paper). With a
proper slotting plan, a warehouse can improve its inventory rotation requirements—
such as first in, first out (FIFO) and last in, first out (LIFO)—control labor costs and
increase productivity.

Benefits of Warehousing
 Warehouses enable storage of goods when their supply exceeds demand and by
releasing them when the demand is more than immediate productions. This on
one hand ensures a regular supply of goods in the market and on the other hand
it helps to stabilize prices by matching supply with demand.

 Warehouses provide for safe custody of goods. Businessmen can thus

minimize the risks to goods from loss, damage, fire, theft etc. Perishable
products can be preserved in cold storage. Also, the goods kept in a warehouse
are generally insured.

 A warehouse provides facilities for processing, packing, blending, grading etc,

of the goods for the purpose of sale. The prospective buyers can inspect the
goods kept in a warehouse.

 Warehouses provide a receipt to the owner of goods for the goods kept in the
warehouse. The owner can borrow money against the security of goods by
making an endorsement on the warehouse receipt. By keeping the imported
goods in a bonded warehouse, a businessman can pay customs duty in
installments.

1.8 Warehouse Management System

A warehouse management system (WMS) is a software application that
supports the day-to-day operations in a warehouse. WMS programs enable
centralized management of tasks such as tracking inventory levels and stock
locations. WMS systems may be standalone applications or part of an
Enterprise Resource Planning (ERP) system.

A warehouse management system (WMS) is a key part of the supply

chain and primarily aims to control the movement and storage of materials
within a warehouse and process the associated transactions, including shipping,
receiving, put away and picking. The systems also direct and optimize stock
put away based on real-time information about the status of bin utilization. A
WMS monitors the progress of products through the warehouse. It involves the
physical warehouse infrastructure, tracking systems, and communication
between product stations.

Early warehouse management systems could only provide simple storage

location functionality. Current WMS applications can be so complex and data
intensive that they require a dedicated staff to run them. High-end systems may
include tracking and routing technologies such as Radio Frequency
Identification (RFID) and voice recognition.

No matter how simple or complex the application is, the goal of a warehouse
management system remains the same -- to provide management with the
information it needs to efficiently control the movement of materials within a
warehouse.

More precisely, warehouse management involves the receipt, storage and

movement of goods, (normally finished goods), to intermediate storage
locations or to a final customer. In the multi-echelon model for distribution,
there may be multiple levels of warehouses. This includes a central warehouse,
a regional warehouses (serviced by the central warehouse) and potentially
retail warehouses (serviced by the regional warehouses).
Types:

Warehouse management systems can be standalone systems, or supply chain

execution suite, modules of an ERP system such as Odoo. Depending on the
size and sophistication of the organization, the system can be as simple as a
handwritten list that are updated when required, spreadsheets using software
such as Microsoft Excel or Access or purpose-built software programs.

In its simplest form, the WMS can track product's data during the production
process and act as an interpreter and message buffer between existing ERP and
WMS systems.
 Chapter 2:
Company Profile

Company Profile
About Us:

Origin Logistics Pvt. Ltd. caters to the 3PL requirements, local distribution and
express between Mumbai-Pune of the Customers across industries. Origin today has a
strong customer base of Multinationals, Domestic Giants and New entrants.

Origin has grown from a team of few to now over 40 employees, over 60 vendors
spread at multiple locations i.e. Mumbai, Pune and Gurgaon.

Director Profile – Raouf Ansari

Over 23 years of cross functional experience in Sales Operations (Air Express, Road
Express, Bulk Transportation, Rail transportation, Refrigerated transportation, Hard
Freight), Supply Chain Management (Warehousing, Local Distribution, Logistics, Stores
Management, Contract Administration). Currently an entrepreneur / Director of Origin
Logistics Pvt. Ltd. providing Warehousing and distribution services, with a customer
base of over 160+ with major customer like Lifestyle, Hypercity, Godrej, Redington,
Odyssey, Max and Brandhouse, expected to cross the turnover of over 7 cores in the 3rd
financial year of operation. Worked for companies like Schenker Logistics, TNT, Gati,
Patel Roadways and Panchmahal Cement at various locations and various levels.

Director Profile – Sudhir Sikka

Over 14 years of cross functional experience in Operations (Road Express, Bulk

Transportation, Rail transportation), Supply Chain Management (Warehousing, Local
Distribution, Logistics, Stores Management, Contract Administration). 
Currently an entrepreneur / Director of Origin Logistics Pvt. Ltd. providing
Warehousing and distribution services, with a customer base of over 160+ with major
customer like Lifestyle, Hypercity, Godrej, Redington, Odyssey, Max and
Brandhouse, expected to cross the turnover of over 7 cores in the 3rd financial year of
operation. 
Worked for companies like Schenker Logistics, Pyramid Retail, Gati, Elbee . 
Some of the Customers who using 3rd Party Logistics Services at Origin
Logistics Pvt. Ltd.

1. Keeda Sunglasses :

About The Organization:

Brand “Keeda” is the fashion accessory brand of Chrysal Fashions Pvt. Ltd. a
Chrysal Group company.

Chrysal Group operates with the attitude and motto “Open Minds, Open
Doors”.
The corporate motto embodies the Group’s passion for ‘investing in new
ideas’.

Whether it be Realty, Hospitality, Media or Fashion what sets Chrysal Group’s

ventures
apart is the fresh outlook with which each business is approached.
Our first launch under the brand Keeda is in the eyewear category.

WHAT IS BRAND KEEDA?

 That fire in the belly that motivates you to be someone, pushes you to do
something be seen and heard.
 Literally the worm.
 Metaphorically, the persona of an individual.
 In a manner the brand seeks to be more than just a fashion accessory, and be
that all-important statement one would want to be seen in.
 Eyewear by KEEDA
 By design, by color, by shape, by material KEEDA sunglasses will be an eye-
opener for those who want to see the world differently.
 Sturdy, snazzy & trendy. Keeda launches its eyewear in the market by
combining the latest from optical technology and style. Made from high
performance lenses and lightweight frames, every Keeda eyewear ensures a
snug and a comfort fit.

2.R Chrysal Fashions India Pvt. Ltd.

Vision:
To be an enterprise that pursues ides that have the potential to be rewarding
business and social ventures that offers value to the society.

Mission:
To be progressive company that is open to ideas, innovation, and unlocking
potential.
To promote free-thinking corporate culture that recognizes individual and
collective
Potential , nurtures talent and rewards contributions.

Values:
Open Minded, Transparent, Ethical & People Centric.

*Organization involves in the sector like Realty, Hospitality, Fashion, Media,

and Ventures.

Chapter 3:
 Industry
Profile
Figure 2. Outsourcing Development of Logistics Services and Network

Since the 1980s, along

with the trend to outsource non-core activates (Sink and Langley, 1997),
companies have increasingly turned to third-party logistics providers (3PL)
both in the USA (Lieb and Randall, 1996; Rabinovich et al., 1999; Knemayer
and Murphy, 2004) and in Europe (Van Laarhoven et al., 2000). 3PL services
help to achieve the strategic objectives by concentrating more on core
competency of the main business. The study by Sahay and Mohan, 2006, has
cited substantial growth in various financial indicators using services of 3PL,
for instance, various improvements in sales revenue by 13.5%, working capital
by 12.3%, returns on assets by 10%, capital assets reduction by 10%,
production cost reduction by 10.5%, labor cost reduction by 10.0%, and
logistics cost reduction by 15%. 3PL users depend on 3PL service providers to
secure capacity and gain agility (Hannon, 2005) who not only provide core
services like supplying right quality product,
in the right amount, at the right price and place, and at the right time but also provide
value added services such as tracking and tracing, sending information prior to the
arrival of products, flexibility in delivery, which are valued by customers. The role
3PL service providers play in enhancing services and thereby satisfying customers
has been universally recognized.

The growth in 3PL service providers is seen across the world. As the logistics service
demand increases, the challenges and opportunities will continue to increase. With
the wide availability of modern decision making tools and information technology a
paradigm shift in logistics is witnessed. Figure 2 depicts the evaluation and the state
of the art witnessed in logistics outsourcing.

Companies across industries and around the world regard logistics and supply chain
management as key components of their overall business success. Many users feel
that their relationships with 3PLs have helped them achieve critical goals related to
service, cost, and customer satisfaction.

\
 Third Party Logistics in India:

Ever since the liberalization of its economy India has been on a path to become one
of the top economic powers in the world. New avenues for progress and development
have opened up; manufacturing and retail sectors gained popularity because of the
changes in China’s export policy of not exporting manufactured items, from which
Indian manufacturing firms have benefitted. Hence this sector will contribute to GDP
significantly in the long run. The growth and competitiveness in these two sectors
largely depend on the efficiency of the logistics operations that facilitate the
companies’ ability to reach out to their customers quickly and at the desired location.
Realizing this many manufacturers and retailers are now restructuring their supply
chain processes in a manner to incorporate partnerships with expert supply chain
service providers and outsourcing such activities as domestic transportation,
international transportation, customs brokerage, warehousing, forwarding, cross-
docking, product labeling, packing, assembly, kitting, reverse logistics, freight bill
auditing and payment, IT services, fleet management, supply chain consultancy
services provided by 3PLs, order entry, processing and fulfillment and limited
liability partnership (LLP)/4PL Service.

Currently 3PL services are in their nascent stage in India. Third party logistics will
gain considerable share of the logistics sector because of the following compelling
facts.

 Globally, the logistics industry is valued at US$3.5 trillion and the Indian
logistics industry is currently estimated at US$90 billion (CII)1.
 The industry has generated employment for 45 million people in the
country in comparison with the IT and ITES sector, which employs
approximately 4.3 million people1.
 As per the World Bank Survey, India ranks 39th in terms of the logistics
performance index and indicators, with Singapore on top, the UK, USA and
China in 9th, 14th and 30th positions, respectively. India spends US$1,148
in handling costs to import one cargo container and US$820 to export it. In
comparison, Singapore spends US$367 per imported container and China
US$390, according to a World Bank study1.
 India spends 13% of its GDP on logistics compared to an average of 10% in
developed countries, while the U.S. spends just 8%. Better supply chain
management has reduced logistics costs by nearly 1% in 10 years1.
 The Indian government plans to spend US$24 billion over the next eight
years on supply chain infrastructure1.
1
  3PL solutions are on course to grow at a compound annual growth rate
(CAGR) of over 16% from 2007-2010. Consequently, 3PL service
providers are expected to corner an increased share of the Indian logistics
pie, from 6% in FY2006 to 13% in FY2011, at a CAGR of 25% (CII)1.
 According to the ASSOCHAM2, outsourcing of 3PL businesses in India
should reach the value range above US$ 90 million by 2012 as the concept
first introduced in US and Europe is being adopted at a pace that will lead
to increases in the efficiency of domestic operations through better managed
logistics functions.
 Companies in textile, automotive, pharmaceutical, manufacturing, retail and
FMCG sectors are increasingly opting to outsource their logistics
requirements to specialized service providers.
 According to a recent survey of 3PL service providers engineering,
automotive and retail sectors were top revenue earners.

3PL Market Structure in India

The 3PL market in India is comprised of two segments: the first one is asset based in
which assets like trucks, distribution centers and warehouses are utilized in supply
chain management, and the second one is non-asset based. There is a significant
difference between the nature of Indian 3PL and its counterpart elsewhere, especially
in the U.S., Table 1.

2
Table 1: Comparative Analysis of 3PL in India and the U.S.

Parameter USA India

Usage of 3PL 71% 55%
Common Warehousing (73.7%) Outbound Transportation (55%)
activities Outbound Transportation Inbound Transportation (52%)
outsourced (68.4%)
Freight bill payment Custom clearing and forwarding
(61.4%) (51%)
Inbound warehousing
(56.1%)
Reasons for not Control would diminish Poor infrastructure of provider
outsourcing (63%) (81%)
Costs would not be reduced Inability to respond to changing
(63%) needs (81%)
Service commitment would Unreliable promised from
not be met (48%) providers (80%)
Logistics is a core Concerns about capability of
competency (44%) providers (77%)
Necessity of e- 72% 67%
commerce
Collaborative 82% 14%
relationship
Gain sharing is 80% 6.6%
important for
relationship

Considerable amount of research on the topic of the implementation of 3PL in

different countries has been published in academic and trade journals. Viewpoints of
both users and service providers have been considered to identify the major issues,
industry dynamics, current status and future prospects of the 3PL industry. However
most of the research is descriptive in nature and does not go into in-depth statistical
analysis of survey data. In the present study Indian 3PL providers’ service
dimensions are analyzed in terms of the key success factors and growth strategies
using various statistical tools.

Chapter 4:

Literature Review
In this section a review of the literature is presented, which examines the perspectives
of the 3PL users and service providers to understand the variation in the services
offered and services expected.

Table 2 provides a list of recent contributions that address the reasons for outsourcing
logistics activities.

Table 2. Reasons for outsourcing logistics activities.

Author, (Year) Objective Conclusion

Sheffi, (1990) Understand the The main motives are to focus on
motives for the growth  Core businesses
of logistics  Better transportation solutions
outsourcing in USA  Cost savings and improved
services
 Development of necessary
Maltz, (1994) Establish relative The technological expertise
study determined that and
impact of cost and organizations are reluctant to use
services on the third party warehousing due to
Author, (Year) Objective
decision to outsource Conclusion
customer service considerations.
Rao & Young, Identify the factors The study identified factors such as
(1994) influencing  Centrality of the logistics
outsourcing of function
logistics functions  Risk and control
 Cost/service trade-offs
 Information technologies and
relationships with logistics
service providers
 Product-related (e.g. special
handling needs), process-
related (e.g. cycle times) and
network-related (e.g. countries
served) drivers are believed to
have an indirect influence in
the outsourcing decision
Daugherty et al., Study the perception The service users believe that they
(1996) of the third party are getting benefits like reduction
logistics service users in inventory levels, order cycle
van Damme et al., Examine outsourcing The “do
times, or times
lead buy” decision is also
and improvement
(1996) logistics management affected by evaluation of
activities cost/service trade-offs. One
important determinant of the
decision is cost comparison
between alternative options. Costs
associated with performing
Sink & Langley, Develop a managerial logistics activities
Concentration in-house
towards and
the core
(1997) framework for the competencies was the most
acquisition of third important factor for the acquisition
Bhatnagar et al., partyout
Find logistics
factorsservices
for of third
The party
major logistics
reasons services.
to outsourcing
(1999) decision-making of logistics activities were cost
process for choosing saving (86.8%), customer
Bhatnagar and Ascertain benefits of The manufacturing firms got the
Viswanathan, (2000) alliance between advantage of reduction in inventory
manufacturing and levels, order cycle times, lead times
Bask, (2001) Study
global benefits
logisticsof The customer satisfaction
and improvement increases
in customer
outsourcing the significantly and provides access to
Persson and Virum, logistics activities.
Study growth international distribution
Forming relationships networks.
with 3PL
(2001) strategies for logistics providers is an efficient and
service providers effective means of achieving the
Sohail & Sohal, Examine the reasons The major
required reasonswithout
services reported are
investing
(2003) for outsourcing  Cost savings
logistics activities in  Improved services
Malaysia  Better transportation solutions
 Better professionalism

Author, (Year) Objective Conclusion

Wilding & Juriado, Determine customer The main reasons for outsourcing
(2004) perceptions on the logistics activities are
logistics outsourcing  Competencies of 3PLs
in the European  Operating flexibility
consumer goods  Cost reduction
industry  Focus on core businesses
 Aktas & Ulengin, Review the reasons Turkish firms basically outsource
(2005) for outsourcing the transportation activities to
logistics activities in reduce the operating costs.
Turkey
Simchi-Levi et al., Determine the effect The most important reason for
(2008) of outsourcing of outsourcing is that it allows a
logistics on the company to focus on its core
management of the competencies and hence on
supply chain. customer requirements.

Studies based on user firms appear to indicate that outsourcing logistics activities is
appropriate if it has an impact on one or more factors depicted in Table 3.

Table 3. Impact of outsourcing logistics activities.

Factor Indentified by
Impact on customer satisfaction Gooley (1992); and Lieb et al. (1993)
Impact on logistics system Lieb et al. (1993) and Dapiran et al. (1996)
performance and Bhatnagar et al. (1999)
Reduction in capital investment in Foster and Muller (1990) and Richardson
facilities (1992, 1995)
Reduction in capital investment in Fantasia (1993), Foster and Muller (1990) and
equipment Richardson (1992)
Reduction in investment in Goldberg (1990), Sheffi (1990), Trunick
information technology (1990) and Fantasia (1993)
Impact on employee morale Bowersox (1990) and Dapiran et al. (1996)
Reduction in manpower cost Foster and Muller (1990) and Richardson
Improvement on specific logistics (1992,
Minaham1995)
(1997) and McMullan (1996)
function parameters
Improvement in inventory Richardson (1990, 1995)
Inturnover
UK there rates
is several research studies are made on 3 rd party logistics, below are the
some of the authors research in brief format:
Title: Third Party Logistics: a literature review & research agenda

Authors : Konstatinios Selviaridis, (Department of Management Science,

Lancashire University Management School, Lancashire(UK)
 Publisher: Emerald Group of Publishers Limited

Abstract:
Purpose – To provide taxonomy of third party logistics (3PL) research and,
based on that, to develop a research agenda for this field of study.

Design/methodology/approach – The proposed 3PL research classification

framework is based on a comprehensive literature review, which concentrates
on peer-reviewed journal papers published within the period 1990-2005. A
total of 114 academic sources have been retrieved and analyzed in terms of
research purpose and nature, method employed, theoretical approach and level
of analysis.

Findings – The review reveals that 3PL research is empirical-descriptive in

nature and that it generally lacks a theoretical foundation. Survey research is
the dominant method employed, reflecting the positivist research tradition
within logistics. It identifies certain knowledge gaps and develops five
propositions for future research. It suggests that focus should be directed
towards more normative, theory-driven and qualitative method-based studies.
It also argues that further empirical research in relation to 3PL
design/implementation and fourth party logistics services is needed.

Originality/value – This paper fulfils an identified need for a comprehensive

classification framework of 3PL studies.

Research Methodology

The research objectives of this paper are as threefold:

1.To identify the success factors of Indian 3PL firms and their relative
importance. 

2.To analyze the gap between achievement and expectation as defined by the
success factors identified.  

3.To prioritize the growth strategies and their relative importance. 

3.1Type of Research Employed

In this paper we used an exploratory research to help formulate relevant
questions and hypotheses that can be the basis of subsequent inquiries into the
issues faced by 3PL providers and users. This type of research is particularly
useful when the researcher is uncertain of the theories that are relevant, and
 would like to seek insights and ask questions to assess the phenomena he has
observed in a new light. The tools one may employ to conduct exploratory
research include review of the literature, and surveys of the opinions of experts
and focus groups.

3.2Sampling Procedure
I employed a non-probability sampling technique, Quota Sampling. Quota
sampling is used to ensure that a set of specific characteristics that are of
interest to the investigator is present in the sample.

3.3Sample Size
To collect data we sent out a structured questionnaire to 220 third party
logistics providers’ employees. 124 of the replies could be used for the
analysis.
3.4 Tools of Analysis
In study I used factor analysis, SERVQUAL and AHP. The stages of the
research process are shown in Figure 3.

Industry Review Literature Review

Research Issue

Research Questions

First Version

Development of
Questionnaire

Final Version

Data Collection

Data Analysis
 Conclusion

5 . Data Analysis

5.1 To identify the success factors of Indian 3PL firms and its relative
importance. 

Table 4. KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

0.769
Adequacy.
Bartlett's Test Approx. Chi-Square
of 3167.333
Sphericity
Df 325
Sig. .000
Table 5: Rotated Component Matrix (a)

Component

1 2 3 4 5 6 7 8
 Q1 .504
Q2 .431
Q3 .760
Q4 .417 .502
Q5 .639
Q6 .488 -.407
Q7 .646
Q8 .505
Q9 .813
Q10 .739
Q11 .555 .419
Q12 .699
Q13 .647
Q14 .639
Q15 .823
Q16 .815
Q17 .772
Q18 .457
Q19 .514 .491
Q20 .658
Q21 .731
Q22 .643
Q23 .742
Q24 .676
Q25 .688
Q26 .635

We note that about 65% (.64958) of the total variation in the 26 variables is
attributable to the first eight components, Table 10. We also observe that Component
1 explains a variance of 3.064, which is 11.786% of total variance of 26; Component
2 explains a variance of 2.964, which is 11.398% of total variance and so on. The
rotated component matrix contains the same information as the component matrix,
except that it is calculated after rotation, Table 11. From this table we construct the
following factor matrix, Table 12, where the key elements of importance in relation
to the eight factors are shown.

Table 6 : Factor Matrix

Eigen Value
 % of
Facto Factor Name Varianc Items Items
r No. Total e Loading
Realized Cost Reduction 0.823
Geographical Coverage 0.814
1 Reduced Cost 5.997 23.065 Experience as a 3PL
0.739
Provider
Continuous Improvement 0.635
Knowledge Based Skills 0.742
Project Management Skills 0.676
Global Capabilities 0.646

Operational Skilled Logistics

2 3.356 12.909 0.643
Performance Professionals
Real Time Access to
0.555
Information
Route & Load
0.514
Optimization
Enterprise Resource
0.699
Planning
Online Tracking System
0.688
and Transaction System
Information
3 Technology 1.625 6.250 Transportation
0.639
System Management System
Warehouse Management
0.488
System
Use of RFID Technology 0.431
4 Versatility 1.379 5.305 Breadth of Service Offered 0.647
Integration among Internal
0.639
3PL System
Flexibility & Adaptability 0.505
 Focus on specific Industry 0.504
Speed of the Delivery 0.731
Quality Availability of Data on
5 1.249 4.802 0.658
Management Time
Product Returns & Repair 0.457
Compatibility Good Relationship with
6 1.161 4.467 0.813
with the Users Service user
Investment in IT Systems 0.760
7 Fixed Assets 1.098 4.225 Investment in Quality
0.502
Assets
Performance Management of Key
8 1.023 3.935 0.772
Measurement Performance Indicators

5.2 Analysis of the gap between achievement and expectation

In order to analyze the gap between achievement (factor importance) and expectation
(company importance) of identified success factor SERVQUAL analysis was applied
on the success variables. In gap analysis, a positive difference between expectation
and perception points out the strengths, whereas a negative difference shows the
weaknesses of the service quality. In this context, the data collected from 124 3PL
service providers was analyzed. From the Table 13 and Table 14, we can say that
reduced cost, information technology system, versatility, quality management,
compatibility with user and fixed asset factor, there is scope of improvement.

Table 7:

Sr. Factor
Company Service
No Success Variable Importanc Gap
Importance Quality
. e
1 Realized Cost Reduction 4.40 4.20 -0.20 Weak
2 Geographical Coverage 4.50 3.90 -0.60 Weak
Experience as a 3PL
3 4.30 4.20 -0.10 Weak
Provider
4 Continuous Improvement 4.50 4.60 0.10 Strong
5 Knowledge Based Skills 4.10 4.50 0.40 Strong
Project Management
6 3.80 4.00 0.20 Strong
Skills
7 Global Capabilities 4.20 4.20 0.00 Neutral
Skilled Logistics
8 4.30 4.00 -0.30 Weak
Professionals
Real Time Access to
9 4.10 4.00 -0.10 Weak
Information
Route & Load
10 4.10 3.90 -0.20 Weak
Optimization
Enterprise Resource
11 3.80 3.40 -0.40 Weak
Planning
Online Tracking System
12 4.20 3.90 -0.30 Weak
and Transaction System
Transportation
13 3.60 3.20 -0.40 Weak
Management System
Warehouse Management
14 3.90 3.60 -0.30 Weak
System
15 Use of RFID Technology 2.90 2.40 -0.50 Weak
Breadth of Service
16 4.30 4.10 -0.20 Weak
Offered
Integration among
17 4.10 3.90 -0.20 Weak
Internal 3PL System
18 Flexibility & Adaptability 4.40 3.90 -0.60 Weak
Focus on specific
19 4.30 4.30 0.00 Neutral
Industry
20 Speed of the Delivery 4.00 3.90 -0.10 Weak
 Availability of Data on
21 4.10 4.20 0.10 Strong
Time
22 Product Returns & Repair 3.80 3.00 -0.80 Weak
Good Relationship with
23 4.60 4.40 -0.20 Weak
Service user
24 Investment in IT Systems 3.70 3.50 -0.20 Weak
Sr.
Factor Company Service
No Success Factor Gap
Importance Importance Quality
.
1 Reduced Cost 4.425 4.225 -0.200 Weak
2 Operational Performance 4.100 4.100 0.000 Neutral
Information Technology
3 3.680 3.300 -0.380 Weak
System
4 Versatility 4.275 4.050 -0.225 Weak
5 Quality Management 3.967 3.700 -0.267 Weak
Compatibility with the
6 4.600 4.400 -0.200 Weak
Users
7 Fixed Assets 3.700 3.450 -0.250 Weak
Performance
8 4.20 4.40 0.20 Strong
Measurement

5.3 Prioritizing the growth strategies and their relative importance

The Analytic Hierarchy Process (AHP) is a rational framework for structuring a

decision problem. It has been used in a wide range of decision-making situations to
evaluate alternative courses of action and identify the one that is most desirable in
view of the decision maker’s preferences (Roger 1987). The stages of the process
require the decomposition of the decision problem into a hierarchy of easier sub-
problems that can be considered independently. The hierarchical elements can relate
to any aspect of the decision problem. After building the hierarchy the elements of
the decision situation are compared to one another in a pair wise manner using
judgments about their relative importance. These evaluations are converted
to numerical values that represent the weight or priority of each element of the
hierarchy. Finally numerical priorities are calculated for each of the decision
alternatives.

We applied AHP to prioritize growth strategies for Indian 3PL providers. The chart
of the model for growth strategies used by the companies is shown in Figure 4. The
growth strategies have been identified through extensive literature review.

In this section the most important growth strategies are identified and then after the
ranking is given to selected companies like RAS India, Unique Air Express, AFL Pvt.
Ltd and FEDX.

Description of the Model:

Growth strategies have been determined through literature review and the relevant
attributes have been selected for the AHP model for the selection of growth
strategies. The attributes are:

1. Direct Investment [DI]

 Merger & Acquisitions [MA]

  Alliance [AL]
 RFID & IT [RI]
 Regional Expansions [RE]
2. Service Portfolio [SP]

 Broadening Service Lines [BS]

 Industry Specialization [IS]
 Global Service [GS]
 Integration [IN]
 Supply Chain Security [SS]
 Quality of Services [QS]
3. Green Supply Chain [GS]

4. 3PL User/Provider Relationship [UP]

 GOAL Growth Strategy

CRITERIA

DI UP GS SP

SUB
CRITERIA

MA AL RI RE BS IS GS IN SS QS

ALTERNATIVES

Unique Air
RAS, India Express AFL Pvt. Ltd FEDX

The AHP Model

Growth strategies are selected on the basis of judgment based on observation are fed
into AHP for each criterion and sub criterion of all levels of the hierarchy. Pair-wise
comparisons of the criteria at each level are performed on a relative importance scale
where 1 reflects equal weight and 9 reflects absolute importance (See Annex - III).

The steps described below follow Roger (1987):

1. Define the problem and determine the objective.

 2. Structure the hierarchy from the top through the intermediate levels to the
lowest level. See Figure 4.
3. Construct a set of pair-wise comparison matrices for each of the lower levels.
As element in the higher level is said to be a governing element for those in the
lower level, since it contributes to it or affects it. The elements in the lower
level are then compared to each other based on their effect on the governing
element above. This yields a square matrix of judgments. The pair-wise
comparisons are performed to determine which element dominates the others.
These judgments are then expressed as integers. If element A dominates
element B, then an integer number is entered in row A, column B and
reciprocal is entered in row B, column A. If the elements being compared are
equal, a “one” is assigned to both positions. Table 1 shows the pair-wise
comparison matrix for level II criteria.
n(n−1)
4. There are judgments required to develop the set of matrices in step 3
2
(reciprocals are automatically assigned in each pair-wise comparisons).
5. Having done all the pair-wise comparisons and entered the data, the
consistency is determined using the Eigen value. To do so, normalize the
column of numbers by dividing each entry by the sum of all entries. Then sum
each row of the normalized values and take the average. This provides
Principal Vector [PV]. Table 2 illustrates the normalized comparison matrix.
The check of the consistency of judgments is as follows:
Let the pair-wise comparison matrix be denoted M1 and principal vector be
denoted M2.

Then define M3=M1*M2; and M4=M3/M2. λmax = average of the elements of

M4.

Consistency Index (CI) = (λmax – N) = N - 1

Consistency Ratio (CR) = CI/RCI corresponding to N

Where RCI: Random Consistency Index and

N: Number of elements

Random Index Table

N 1 2 3 4 5 6
RCI 0 0 0.58 0.9 1.12 1.24
 If CR is less than 10%, judgments are considered consistent. And if CR is
greater than 10%, the quality of judgments should be improved to have CR less
than or equal to 10%.

6. Steps 3–5 are performed to have relative importance of each attribute for all
levels and clusters in the hierarchy.
First the pair wise comparison matrix for growth strategies was formed and then after
normalizing the same matrix the weight of particular strategies was find out. The
same procedure was followed for all the level of the hierarchy.

Table 8. Pair Wise Comparison Matrix for Growth Strategies

DI SP GS UP
DI 1.00 0.75 0.86 0.75
SP 1.33 1.00 1.14 1.00
GS 1.17 0.88 1.00 0.88
UP 1.33 1.00 1.14 1.00

λmax = 4, CI = 0 and CR = 0 (Perfect Consistency)

The Indian 3PL provider largely uses Service Portfolio and 3PL User/Provider
Relationship for the growth of the business.

Table 9. Pair Wise Comparison Matrix for Direct Investment

MA AL RI RE
M
1.00 0.71 0.83 0.63
A
AL 1.40 1.00 1.17 0.88
RI 1.20 0.86 1.00 0.75
RE 1.60 1.14 1.33 1.00

Table 10. Normalized Matrix for Direct Investment

 SUM Eigen RANK
MA AL RI RE
Vector
MA 4.00 2.86 3.33 2.50 10.19 0.192 4
AL 5.60 4.00 4.67 3.50 14.27 0.269 2
RI 4.80 3.43 4.00 3.00 12.23 0.231 3
RE 6.40 4.57 5.33 4.00 16.30 0.308 1
SUM 52.99

λmax = 4, CI = 0 and CR = 0 (Perfect Consistency)

From the table18 one can say that Indian 3PL providers uses Regional Expansion and
Alliance as Direct Invest for the growth of the business.

So, waitage of MA, AL, RI & RE in Direct Investment can be found out by,
MA = 0.207*0.192 + 0.207*0.269 + 0.207*0.231 + 0.207*0.308 = 0.040

Table 11. Weights in Direct Investment

Weight in DI
MA 0.040
AL 0.056
RI 0.048
RE 0.064

Table 12. Pair Wise Comparison Matrix for Service Portfolio

BS IS GS IN SS QS
BS 1.00 1.00 1.14 1.14 1.00 1.00
IS 1.00 1.00 1.14 1.14 1.00 1.00
GS 0.88 0.88 1.00 1.00 0.88 0.88
IN 0.88 0.88 1.00 1.00 0.88 0.88
SS 1.00 1.00 1.14 1.14 1.00 1.00
QS 1.00 1.00 1.14 1.14 1.00 1.00

Table 13. Normalized Matrix for Service Portfolio

SUM Eigen RANK

BS IS GS IN SS QS
Vector
BS 6.00 6.00 6.86 6.86 6.00 6.00 37.71 0.174 1
IS 6.00 6.00 6.86 6.86 6.00 6.00 37.71 0.174 1
 GS 5.25 5.25 6.00 6.00 5.25 5.25 33.00 0.152 2
IN 5.25 5.25 6.00 6.00 5.25 5.25 33.00 0.152 2
SS 6.00 6.00 6.86 6.86 6.00 6.00 37.71 0.174 1
QS 6.00 6.00 6.86 6.86 6.00 6.00 37.71 0.174 1
SUM 216.86

λmax = 6, CI = 0 and CR = 0 (Perfect Consistency)

Table 14. Waitage in Service Portfolio

Weight in Service
Portfolio
BS 0.048
IS 0.048
GS 0.042
IN 0.042
SS 0.048
QS 0.048

Now the ranking of the company can be obtained by constructing comparison

matrices with respect to various growth strategies used by the company.

Table 15. Pair Wise Comparison Matrix for Merger & Acquisition

RAS, Unique Air AFL Pvt

FEDX
India Express Ltd
RAS, India 1.00 5.00 1.00 0.83
Unique Air
0.20 1.00 0.20 0.17
Express
AFL Pvt Ltd 1.00 5.00 1.00 0.83
FEDX 1.20 6.00 1.20 1.00

Table 16. Normalized Matrix for Merger & Acquisition

RAS, Unique Air AFL Pvt FED Eigen

SUM
India Express Ltd X Vector
RAS, India 4.00 20.00 4.00 3.33 31.33 0.29
Unique Air
0.80 4.00 0.80 0.67 6.27 0.06
Express
AFL Pvt Ltd 4.00 20.00 4.00 3.33 31.33 0.29
FEDX 4.80 24.00 4.80 4.00 37.60 0.35
 106.5
SUM
3

λmax = 4, CI = 0 and CR = 0 (Perfect Consistency)

Table 17. Pair Wise Comparison Matrix for Alliance

RAS, Unique Air AFL Pvt

FEDX
India Express Ltd
RAS, India 1.00 1.60 1.14 1.14
Unique Air
0.63 1.00 0.71 0.71
Express
AFL Pvt Ltd 0.88 1.40 1.00 1.00
FEDX 0.88 1.40 1.00 1.00

Table 18. Normalized Matrix for Alliance

RAS, Unique Air AFL Pvt FED Eigen

SUM
India Express Ltd X Vector
RAS, India 4.00 6.40 4.57 4.57 19.54 0.18
Unique Air
2.50 4.00 2.86 2.86 12.21 0.11
Express
AFL Pvt Ltd 3.50 5.60 4.00 4.00 17.10 0.16
FEDX 3.50 5.60 4.00 4.00 17.10 0.16
SUM 65.96

λmax = 4, CI = 0 and CR = 0 (Perfect Consistency)

Table 19. Pair Wise Comparison Matrix for Regional Expansion

RAS, Unique Air AFL Pvt

India Express Ltd FEDX
RAS, India 1.00 0.89 1.60 0.89
Unique Air
1.13 1.00 1.80 1.00
Express
AFL Pvt Ltd 0.63 0.56 1.00 0.56
FEDX 1.13 1.00 1.80 1.00
Figure 5 shows the relative weights of all elements in AHP model. Service portfolio
(0.276) and 3PL User/Provider Relationship (0.276) is very important and common
criterion followed by the Indian 3PL Service provider when it comes for selecting the
growth strategy. It is followed by Green Supply Chain (0.241) and Direct Investment
(0.207). Green Supply Chain is getting importance due to the ever-changing
environment of the world. This is very important to control the green house effect and
hence to control the temperature of the world. On the basis of the sub criterion FEDX
secure the first rank in terms of using proper strategy as per change of the business
condition in India. While RAS, India secure second rank.
 SUB
GOAL CRITERIA ALTERNATIVES
CRITERIA

RAS, India 0.372

Merger &
Acquisitions

0.040

Alliance
Direct
Investment
0.056

0.207
RFID & IT

0.048

Regional
Expansions Unique Air
Express 0.265

Growth Strategies 3PL 0.064

User/Provider
Relationship
Broadening
0.276 Service Lines

0.048

Green Supply Industry

Chain Specialization

0.241
0.048

Global
Service Portfolio Service AFL Pvt.
Ltd. 0.326
0.276 0.042

Integration

0.042

Supply Chain
Security

0.048

Quality of
Services

0.048 FEDX 0.378

*
 Conclusion*
 3rd Party logistics having good scope in India as well as in
foreign Market.
 It manage, support and fulfill customer demand in all serviced
regions.
 It resulted in increasing the customer by fulfilling their demand
in short period of time.
 Attain a continuous and unrivalled 100 % customer satisfaction.
 Faster turnaround time to deliver goods to customer.
 Optimize price setting, increase sales, and reduce shipping cost
to maximize customer satisfactions.
7. Limitations of the Study

The study focuses only on the third-party logistics service providers. This study
has not taken into consideration towards the perspective of 3PL service users. The
view of the 3PL service user could affect the result of the success factor for the
3PL service provider.

This study is limited to only organize 3PL service provider. The research can be
improved by taking consideration of the unorganized 3PL service provider.