CET IILM-AHL

PROJECT REPORT ON Study of service mix in OM logistics

Submitted to Ms. Nimisha Srivastava Faculty Marketing Management IILM Greater Noida

Submitted by Shashidhar Tripathi Samit Kumar Singh Saket Kumar Ravi Prakash Gupta MBA III SEM

Company Om Logistics Ltd., the flagship company of Om Group has been instrumental in providing innovative and value added solutions for Indian Corporate and Multinationals. Its the only leading multi-modal logistics company with single window integrated logistics services for all the elements of the supply chain management in India. Through its innovative and cost saving methods, Om Logistics Ltd. has consistently added value for its customers, which can be complimented by our competence to take the driving seat for generating maximum air cargo in India. It has been dealing with corporate, multinational automobile industry and has been pioneer in transportation, warehousing and logistics support to the sector. Quality Policy Om Logistics is committed to offer Logistics Solutions and Services to the Indian Industry designed to customers' satisfaction in order to help, support and grow together in a win - win situation. The Driving Spirit To redefine customer satisfaction, herald a rationalized approach of time & cost and eventually bridge the gap between Indian requirements and global standards. Logical Approach to your Logistics Importance to every detail has been the success mantra with us. Be it customers, work force or R & D , perfection makes our game an easy swipe! Customers One to one communication with customers Jigsaw-fit tailored services Responsibility cumulating through partnership Work Force Interactive and spirited with you for you Committed and devoted Fully trained hands with in-depth knowledge Market Watch Data collection and analysis Value-addition with commercial viability Control on cost and productivity Quality Consistency Priority to customers' standards Constant monitoring for a regularized quality Training to realize core-competency

Research Development Market research & development

IT team to keep in sync with changing communication system Pro-active to changes

Approaching Convenience in Real Time IT based graphical user interface On-line & real time applications Consignment tracking & tracing Cargo Handling System Fleet information system Incident reporting, follow-up of complaints Common language environment Lost and found application Cargo automation system-warehousing Productivity and Support System Planning of personnel and equipment Trained and qualified management Material and equipment management Future Plan Communication Systems Workstation system for communication technology Digital radio communication system Networked communication system Mobile communication Monitoring of logistics application Data Processing System

DP systems for logistics Databases and information system Identification and coding system Transport control and DP systems

Comprehensive Cohesive Logistics Solution The promising global market demands the manufacturers to hasten their products to the buyers within time and in one piece so as to avoid competition. Just in time delivery and taking you where the opportunities await is the equation to this trend. Based on this business principle Om Logistics Ltd. has established its infrastructure to help, support and grow together with the manufacturers across the world. Quick delivery, perfect organization of flow of goods combined with state-of-the-art IT communication system, are the tools we operate with. Connectivity Om Logistics Ltd. connects more than thousand destinations all over the country. The company also owns dedicated fleet for local distribution. In addition to the exemplary mix of rail and road, there is a perfect combination of air cargo in which the company has an edge over its competitors. With the flexible transportation set-up, Om Logistics Ltd. provides multiple opportunities for manufacturers to enhance their supply chain radius through out India. This is the major strength of Om Logistics Ltd. where by manufacturers may save their capital investment by reducing the inventory cost.

Warehousing Warehousing being an indispensable part of supply-chain Management, Om Logistics Ltd. Provides technically efficient warehouse located at all strategic location across the country. These state-of-art warehouses are equipped with modern material handling equipment and complete workforce for efficient logistics coordination.

NETWORK 400 Branch offices and 200 associates covering more than 1000 strategic locations across the country. Over 10 Million Sq. Ft. of Warehousing & storage space. More than 3500 dedicated personnel to ensure fulfillment of high service standards. Fully equipped Office Automation and state-of the-art Communication system. A fleet size of over 3000 Trucks, LCVs. Jumbo & Containers. Services offered by OM logistic Just in Time Supplies (JIT). Comb. of JIT and DOL. System and Management of Spare-Parts Distribution Centers (SPDC). Bin Charging. Kitting and Consolidation. Carting of Loads. Distribution through Merry Go-Rounds. First in First Out (FIFO). Warehouse Management Relocation of Warehouses. Bonded & Non-Bonded Warehousing Order processing Pre-Delivery Inspection (PDI) Total Inventory Management Bar Coding / KANBAN Dedicated Vehicles/ Designed Vehicles Tracking and Tracing through SWIPE Technology Concept of Small is Beautiful Pelletizing and Securing of Load Units Ware Houses Shrinking Films and Anti-slip Material Process Control for Storage Conveyer Systems Direct On line Deliveries (DOL).

 DI System. Concept of 2-Bit System. Bin Renting. Milk Run Application. Distribution through Hub & Spokes System. Introduction of Recyclable Packaging Material. Last in First Out (LIFO). Total Supply Chain Management (SCM). Cloak Room Facility (Instant Warehousing) MIS (Management Information System) Space for Segregation Space for Testing Equipment Movement with Mobile Communication Logistics related Manpower Support Export Service Super Market and Water Spider Concept Transport Packaging for all kinds of Freight Instruments of Measuring Transport Stress with Straps, Bands, Ropes and Chains, Storage Facility with Rack and Shelving Systems Material Handling Equipment Distribution System Process Control for Conveyer Systems GSM based vehicle tracking

Clients

OM group catering up to 500 corporate & multinationals. Main clients are Tata Motors Ltd. Maruti Udyog LTD. Samsung Bajaj Auto Ltd Futur group HCL LG Voltas Ltd M&M Ltd. Honda TVS GM Yamaha Hero Moto Copr. Eicher Motor Ltd. Escorts

Ranbaxy Cadila Arvind Mills Havells Airtel Ericsson Vodafone BSNL IDEA

Optimum connectivity is the companys USP as Om Logistics connects more than a thousand destinations all over the country. The company also owns a dedicated fleet of vehicles for local distribution. In addition to a mix of rail and road transport, it also offers air cargo. This flexible transportation set-up has benefited manufacturers who are able to grow their supply chain radius throughout India and also reduce their inventory costs.

Service Mix in OM--Efficient logistic management would also result in significant material conservation and better utilization of infrastructure assets.

Place involves location, accessibility, channel etc.

Today logistics services go beyond managing the supply chain and are destined to become a major option for all kind of physical business process outsourcing. What is more relevant to the country is that , when we attempt to improve the quality of logistic services, it would automatically help bringing down the transaction cost. In addition logistic management would also result in significant material conservation and better utilization of infrastructure assets. Logistic is the retail face of infrastructure of and like the retail sector, Indian logistic industry is dominated by traditional operators. It has evolved so far on its own without any specific policy props or incentives. OM logistics differentiated their strategies according to their availability of Warehouses, Trade union , transport and geographical location. They can be classified in various zones of India and international transit.. International logistics trade index fallen the rank of OM logistics rank 31st in 2009 but India logistics rank very high at 38th . The new assumptions of OM logistics are : a. Distinction between infrastructure and logistics due to changes in availability of place in compare to Mumbai and Chennai. b. Shifting of its 52% warehouses from Mumbai to Gujarat and Chennai. c. Due to changes in the government policy and trade union OM logistics place its sea routes transit due to availability of place. d. Privatization and partnership in the transformation of warehouses and availability of place opening the market and competition in South India. e. Place is the most affecting thing for the logistics company while starting and expanding their business. f. In present scenario southern states are attracting the big logistics company like, OM Logistics, Gati, Omaxe ,Fedex. g. Place of a logistics determine the business and their profitability because transportation, warehouses, market accessibility help them to create new clients and grabbing the market. h. Due to expansion in the new states these companies are covering the whole county market and it is easy for their clients.

i.

While covering the whole marker their all the cost decreases and profit increases.

To succeed in Indian logistic market, foreign companies should consider the following questions :1. What segments of Indian logistic industry are attractive for entry? 2 . What are the opportunity and risk in the segment of your choice? 3 . What are the tax and regulatory consideration for your segment? 4 . What are the key consideration of direct market entry? 5 . Who are the potential joint venture partners you can tie up with? 6 . Are there any attractive acquisitions target? 7 . What are the due diligence do you need to de before JV or acquisition? 8 . How do you integrate your acquisition with your global operations? 9 . What do you need to do to run an efficient operation in India?

PRICING

The price is a key element of the marketing mix. It must be acceptable to the target customers and it must reflect other components of the mix accurately. The price of the service is the value attached to it by the service provider and it must correspond with the customers perception of value. If the service priced at too high a level, it will be seen as poor value for money by customers who will not buy it. On the other hand, if the price is too low, the service may be perceived as shoddy or inferior in quality. E.g. Transportation of goods offer at different prices according to the distance and location, & in warehousing price is charge according to the space occupied by goods.

Some Pricing Concepts:

Price

Skimming: Here, the supplier skims the cream off the market by offering a product or
service at a higher price on a low volume basis. This is particularly appropriate for new product in new market situations where a proportion of consumers is always prepared to pay more for new, innovative goods. Frequently, the price reduces after a period as products become more popular & the sales volume increases. E.g. In case of perishable product OM logistics charged higher prices and vice-versa in case of cargo products.

Penetration pricing: In this case, the price is set at a low level in order to attract high
volume sales, thus penetrating the market & gaining substantial market share. For new products &services, the payback period is lengthy, but with the advantage of establishing a strong market position. The strategy is especially suitable for use when entering highly competitive market.

Mixed pricing: This pricing method is a combination of both of the above mentioned
methods. E.g. OM started off by charging very high prices to its customers, but then brought its price quite low afterwards, which was because of competition.

Differential Pricing: Under this approach, different prices are charged for the same
service at different/same times or to the same/different customers. E.g. OM charges different prices according to the nature of goods, in case goods required more safety during transportation charged higher prices and vice versa for goods which are unbreakable.

OWNERSHIP OF PRISING IN A LOGISTICS FIRM-

SELECTION OF LOGISTIC PRISING OPTION-

PROMOTIONPromotion is used to communicate information about goods and services to target audiences their by facilitating the exchange process. Promotion plays an important role in informing, educating, persuading and remanding customers. This role is even more important in the services sector industry where there is a high degree of intangibility so there is no physical product to attract the customers attention. Also, effective communication is required to inform the customers about their role in the delivery process. E.g. In logistics sector OM put logos and tag lines on their delivery vehicle, they also provide company uniform and various gifts which has logo and tagline of company & they also use their offices for promotion. Tools for PROMOTIONADVERTISING-

It is a paid mass mediated attempt to persuade. Advertising is an essential tool that helps create brand awareness and loyalty and stimulates demand. It is creative expression of a concept. For a logistic company it is not at much mass mediated but a way of communication with its current and potential clients.

MODE OF ADVERTISING1. Logistics Online- To give information online means spread information through internet. 2. Webcasts- Through electronic mode. 3. Virtual Tradeshow- Organize a virtual shows in which OM gives live advertising

campaign.
4. White Paper Programs 5. Research Briefs

Actually OM is not involved in individual marketing but its main focuses are on big conglomerates. They are its main clients. In B@B transactions there is no need of mass spread promotions, concentrated market is main focus. The Rs 500 crore Om Logistics is optimistic that its services will continue to be in demand from automobile manufacturers, despite a lower off take for them in the domestic market. Om Group has six associate concerns, namely Om Logistics Ltd, Crossroad Logistics Pvt Ltd (the telecom logistics division), OMX Cargo Ltd (international division), OMX (express division of Om Logistics) and OMX Info Management (record and data management division). Its Indo-Japanese joint ventures comprise Omtrax Packaging Solutions Pvt Ltd and Om Marubeni Logistics Pvt Ltd. What this means is that the Om Group, with its diversified operations in all the elements of the supply chain business, has emerged as a one-stop solutions provider. To promote itself on global scale OM collaborate with Japanees.

During launching any advertising champaign OMs main focuse is on its Om Line Transaction Process which makes its lag time almost zero. With its lag time zero advertising Om Logistics recorded a sales growth of around 30%. PeoplePeople play a major role in service organizations. It is their responsibility to see that the customers needs and wants are satisfied. This requires the employees to be well motivated and focused about their job. The providers have to be in the highest state of readiness and also in the highest level of skill. When several organizations vie for what is essentially the same group of customers, the level of customer service offered becomes a very important differentiator. This becomes even more important in the case of the service industry where the product is mostly intangible and thus cannot be a differentiator. Also, the inseparable nature of the services implies that the human element forms intrinsic part of service package. the service industry can be classified into either High contact or Low contact based on whether it is a labour-intensive or equipment based service since the logistics sector is so varied it has under it both high contact and low contact services. It is the employees of an organization which represents the organization to its customs. In an organization, basically the employees are the contact personnel with customer. Therefore an employee plays an important role in the operation of an organization, in logistics the employees are given the change or work on the basis of size of the project. E.g. OM has strength of hundreds of people & people are given salaries & incentives according to the work.