SUPPLY CHAIN MANAGEMENT OF FEDEX

Dissertation submitted in partial fulfilment of the requirements for the

award of the Degree of

POST GRADUATE DIPLOMA IN MANAGEMENT

of
ABBS SCHOOL OF MANAGEMENT

By

A.PRUDHVI RAJ

REG.NO.17PGDM006

Under the guidance of

DR.KAMINI DHRUVA
PROFESSOR

ABBS SCHOOL OF MANAGEMENT

ANDHRAHALLI MAIN ROAD, OFF MAGADI ROAD

BENGALURU-560091

2017–2019
 ACKNOWLEDGEMENT

This project report would not be considered completed without acknowledging the name of the
people who helped us a lot during this project because the success and final outcome of this
project required a lot of guidance and help from many individuals.
First of all we would like to show our gratitude towards our respective director Dr. Madhumita
Chatterji, department of management studies for giving me this opportunity in terms of doing
this project.
I would like to owe our deep gratitude to our project guide Dr.Kamini Dhruva , Associate
professor, ABBS School of Management for providing us great assistance, all important
information and support till the completion of our project although he had a busy schedule.

As final words of thanks goes to all the staff of ABBS School of Management and who made this
project possible. Your contributions have been most appreciated.

A PRUDHVI RAJ
17 PGDM006
 CHAPTER -1

INTRODUCTION
MEANING OF LOGISTICS:

That part of the supply chain process that plans, implements, and controls the efficient, effective
flow and storage of goods, services and related information from the point of order to the point
of consumption in order to meet customers’ requirements

MACRO PROSPECTIVE

 Logistics adds value to a product

 Place utility - moving goods to points where demand exists
 Time utility - moving goods to points at a specific time
 Allows for economic development and specialization
 Affects land values due to increased accessibility

MICRO PROSPECTIVE

 Interfaces with production in determining the length of the production run

 Interfaces with marketing in selling the product
 price - size, quantity
 product - dimensions, packaging
 promotion - inventory, channels
 customer service

Logistics is the management of the flow of things between the starting point and the point of
consumption in order to meet requirements of customers or clients. Logistics management is the
piece of supply chain management that plans, implements, and controls the efficient, effective
forward, and reverse flow and storage of goods, services, and related data between the purpose
origin and therefore the point of consumption is to satisfy customer's needs.

Indian Logistics Industry

CAGR (5 years) – 7.8%

Expected Growth Rate - 8-10%

Estimated Value - US$ 160 billion

Expected Value (in next 2 years) - US$ 215 billion

Employment – 22 Million (expected to be largest job creator by 2022)

INDUSTRY PROFILE

FEDEX uses all the modes of transportations that is

 Airways

 Roadways

 Waterways

 Rail freight

FEDEX has its own fleet of airplanes and motor vans. Depending upon the final destination
where the goods have to finally reach and the type of package the customer has paid for, FEDEX
uses the individual modes of transport or a mix of both thses are all. Once again the
geographical location and how quick the goods have to be delivered are the factors for the final
selection of mode of transportation. The idea of economies of scale and economies of distance
area unit each taken into consideration in case of larger consignments where FEDEX provides
an applicable logistical solution which helps in reducing the overall cost for the customers.

The Indian logistics sector is on an enormous growth tide. According to the domestic rating
agency ICRA, Indian logistics sector is major development tide at a rate 8-10 per cent over the
medium term. This is an improvement over the compound annual growth rate (CAGR) of 7.8 per
cent at which the industry grew during the last five years. The logistics industry of India is
currently evaluated to be around US$ 160 billion. With implementation of GST the area is
predicted to benefit and touch US$ 215 billion over the next two years, as per the Economic
Survey 2017-18.

Global Ranking

The last number of years have seen vital development for this business that is reflected with in
the worldwide rankings. According to the Global Ranking of the World Bank's 2016 Logistics
Performance Index, India jumped to 35th rank in 2016 from 54th rank in 2014 in terms of overall
logistics performance. The report additionally demonstrated that India’s logistics sector has
improved its performance on all the six parameters used in the ranking. This is a huge jump of 20
ranks and clearly indicates the growth of the sector.

Employment

There is a lot of investment that the industry is attracting and as a result of the transformations
and changes led by these investments, the industry will stimulate job creation. The specialists
predict that it can be the largest job creator by 2022.The sector at presently provides
employment to more than 22 million folks with in the country. The report also emphasises that
improving the sector would result in a 10 per cent decrease in indirect cost, in turn leading to a
growth of 5-8 per cent in exports.

Government Policy

The Indian government has proclaimed that it's acting at the policy so as to line up new provision
set up within the country. The intention is to devise the most cost-effective method to transport
goods by the year 2035.The policy aims at preparing a proper integrated logistics plan. The new
logistics division within the department of commerce is working on this national integrated plan,
with the objective to identify and iron out any existing bottlenecks and gaps in the industry. This
is good news for the sector. It will also like wise empowered tech-enabled startups in the
logistics sector as they will be able to provide consistent developmentt of goods across the
country.

Key Drivers

Indian logistics industry may be a sunshine sector and there are numerous factors that are
driving this sector towards growth and boom.

The growth of logistics is 2 sided – led by demand supply. The demand led growth is
strengthened with the economic recovery and benefits from implementation of GST. In step with
the rating agency ICRA, post GST implementation the savings in terms of truck turnaround has
been 18-20 per cent.

Also, the outsourcing of non-center exercises like warehousing and associated activities to
integrated players is resulting in strengthen the organized players that successfully helpful for
the industry in long term..
The supply drove development drivers include improvement in logistics infrastructure,
integrated supply and birth of assorted supply start-ups, significantly technical school drove
start-ups. in step with associate degree business skilled, “Tech-drove startups have an enormous
scope to grow additionally drive the event of the arena. Not solely they're attracting significant
investments, they need the potential to create export procedures hassle-free by reducing needless
work, successively reducing delays in delivery”

 Relationship with all areas of a company

LOGISTICS ACTIVITIES

 Transportation - physical movement or flow of goods

 Storage - inventory management and warehousing
 Packaging - affected by product and transportation
 Materials handling - movement in, from, and within a warehouse
 Order fulfillment - completing customer orders, affects lead time
 Forecasting - predicting inventory necessary to fulfill customer demand
 Production planning - product necessary to cover market
 Purchasing - procurement of supplies, affects transportation
 CHAPTER -2

COMPANY PROFILE

2.1 NAME OF THE COMPANY AND ITS HISTORY:

FedEx Corporation is an American worldwide courier delivery services company headquartered

in Memphis, Tennessee. The name "FedEx" may be a syllabic abbreviation of the name of the
organization’s distinctive division, Federal Express (Present FedEx Express), which was named
from 1973 till 2000. The organization is well known for its nightlong shipping service and
pioneering a system that can track packages and provide exact time period updates on package
location (to find the lost packages), a feature that has now been implemented by most other
carrier services

FedEx Express invented express distribution and is the industry’s global leader, providing rapid,
reliable, time-definite delivery to more than 220 countries and territories, connecting markets
that including excess of 90 percent of the world’s gross domestic product at intervals one to 3
business days. Unmatched air route experts and transportation infrastructure, combined with
leading-edge information technologies, making the FedEx Express the world’s largest express
transportation company and providing fast and reliable services for more than 3.6 million
shipments every business day.

Europe, the Middle East, Indian Subcontinent and Africa (EMEA), FedEx Express currently
serves hundreds of cities and markets with its intercontinental and international express services.
FedEx Express EMEA is home to the largest hub outside of the US at Paris-Charles de Gaulle
and is consistently building its network across the region through good, strategic investments.

Express or less urgent, small packages or heavyweight, import or export, FedEx has the service
you need.

As business becomes a lot of world and competitive, everyone from entrepreneurs to big
companies turn to us for flexible and innovative solutions. It’s the No. 1 priority of all our
companies.

Think of them as a portfolio of solutions that can tackle any challenge in the world of global
commerce. Each network operates independently. That means our individual networks will be
fine-tuned, like a race car, to deliver the best service possible for customers.

It’s how we deliver real value.

Other Relevant Information:

• Federal Express Corporation ("FedEx Express") is the world's largest express

transportation company, offering time-certain delivery within one to three business days and
serving markets that comprise more than 90% of the world's gross domestic product. The FedEx
Express section also includes FedEx Trade Networks, Inc. ("FedEx Trade Networks"), which
provides international trade services and global cargo distribution.

• FedEx Express operates one of the biggest civil aircraft fleets in the world and the largest
fleet of wide-bodied civil aircraft.

• FedEx earns No.10 spot on the FORTUNE world’s most admired company list (Jan.22,
2019).

• FedEx named one of Forbes 2019 Best Employer for diversity (Jan.15, 2019)
• Fortune Magazine names FedEx one of the 2018 Best Workplace for diversity (Dec.6,
2018).

VISION AND MISSION STATEMENT :

Mission and Goals:

FedEx Corporation can produce a superior financial returns for its shareowners by providing
high value-added logistics, transportation and related business services through focused
operating companies. Customer necessities will be met in the highest quality manner appropriate
to each market segment served. FedEx will strive to grow commonly rewarding relationships
with its team members, partners and suppliers. Safety will be the primary consideration in all
operations. Corporate activities are conducted to the best moral and skilled standards.

Financial Goals

FedEx Corporation gives strategic leadership and consolidated financial reporting for the FedEx
family of companies, dealing with a broad portfolio of transportation, e-commerce and business
services. FedEx Corporation has clearly outlined objectives and strategies for the future.

FedEx Long Term Goals

 Increase EPS 10%-15% per year

 Grow profitable revenue

 Achieve 10%+ operating margin

 Improve cash flows

 Increase ROIC

 Increase returns to shareowners

SEGMENTS CATERED / TARGET SEGMENT:

Who is the target market?

“Anyone in the nation who needs to send . Either it is the single pack or you’ll ever ship in your
entire life or you have 1000 packages to ship every day.”

B2B, B2C, C2C, B2G, Health Care Solutions, Online Retail Solutions, Packaging services,
Ancillary Clearance Services.

STP:

Segmentation:

Business that require them to deal with couriers like embasies, stationary/office supply store,
eBay, etc.

Target:

Business/ professional/retailers those type people who want to send packages and have them
arrive (usually) on the next business day.

Positioning:

FedEx Position itself as the largest air cargo fleet in the world.

MARKET SHARE OF FEDEX

Market share of FedEx Express is 12.15% and market share of FedEx ground is 16.42% and
market share of FedEx freight is 29.17% where total market share of FedEx in India is 21.74%

CSR ACTIVITIES OF FEDEX

Over 1,700 FedEx team members across 34 cities in India were involved in community outreach
activities, clocking more than 5,000 hours of volunteer work. FedEx Cares is an annual global
volunteering program where FedEx team members and their families donate their personal time
and effort in giving back to their local communities.
  FedEx volunteers contributed to a number of projects all over the India

 Participated & organised many blood donation camps

 FedEx employees and their family visited orphanages and spent time with children

 They also initiated tree planting and cleanliness drive

 Donated required commodities, books and stationary items for children.

AWARDS AND REWARDS

FedEx has been recognised as one of FORTUNE’s most admired companies which has toped #8
ranked company overall and #1 in the delivery industry. Form the past 16 years FedEx is being
honoured to be in the rank of top 20 in the list.

 Ranked as #1 company to work on year 2010 in delivery industry.

SBU’S:

FedEx Express, FedEx Ground, FedEx services ,FedEx Office, FedEx Freight, FedEx Custom
Critical, Trade Networks, FedEx Cross Border, FedEx Supply Chain, TNT Express.
Competitors of Fedex

• UPS

• DHL
• SNCF

• Blue Dart

• Kuehne + Nagel

• DB Schenker

• CH Robinson

• XPO Logistics

• USPS

• PostNet

• Union Pacific Railroad

• McLane Company

SWOT ANALYSIS

STRENGHTS

 Strong brand image

 Strong revenue growth

 Large scale operations

WEAKNESS

 Declining operating efficiency and weak returns

 Total dependency on the US

OPPORTUNITIES

 International expansion.

 Expanding Chinese market

 Online shopping

THREATS
 Increasing transportation cost

 Economic slowdown in th U.S

 E-substitution

 Entry of small companies in the regional areas.

 CHAPTER -3

DESIGN OF DISSERTATION

3.1 REVIEW OF LITERATURE:

According to James P Hoffa General President of the international Brotherhood of Teamsters

Federal Express is a proponent of an alarming trend in today's market classifying workers as
independent contractors which allows them to maintain absolute control over operations shift
costs and risks to workers and reap the benefits oftheir labor This is a critical issue at Federal
Express whichdescribes itself in its Employee Handbook as a company that offers a wide range
of important benefits to all workers egardless

http://www.research-assistance.com/essays/Literature-Review--Federal-Express-and-
Unions.html

Federal Express (FedEx) are deploying new software to get that closer with consumers that
quicker. FedEx Corp. is unching a multi-million dollar Customer Resource Manager (CRM)
initiative, deploying software from Clarify Inc in an effon to cu costs and use existing customer
data to cross-sell and up sell services. FedEx hopes that this new system will allow them to taior
is data in ways that are not currently possible in the industry, ultimately contributing to the firm's
competitive advantage. The use of these brokerage systems will further help FedEx to realize
market Sweet Spots" and calculate how profitable those segments will be to the company. This
relationship between FedEx and Clarity can be expected to give FedEx a leading edge in their
industry. This competitive advantage will not last long, as other third party logistic suppliers in
the highly competitive package-delivery market are likely to keep pace in technological
advancement

It is clear that many companies today are outsourcing supply chain and logistical tasks to third
party customs brokers. Custom Brokers have an obligation to be up to date with technological
innovation and to implement it within their respective organization thus ensuring that they are
meeting the expectations of the services that they are providing These services must not only
meet industry expectations, but must exceed them to ensure competitive advantage. Companies
must rely on brokers to develop systems that increase efficiency, decrease lead-time, lower costs,
and increase the precision of the overall production process. Any brokerage firm that fails to
acknowledge consumer needs and adapt to the external environment will fail to provide what
their competitors surely will, as demonstrated in FedEx's case.

http://www.oocities.org/dbateconsuting/literature review.htm

3.2 NEED FOR THE STUDY:

3.3 SCOPE OF THE STUDY

In order to understand the theory of logistics in terms of practical usage and how the real
companies or the organization uses logistics and can gain more customer satisfaction and reduce
the overall cost and increase in efficiency

 I have selected FedEx the worlds leading courier services company.

 I have done study on how FedEx uses its logistics system effectively
The weakness and strength of FedEx

3.4 OBJECTIVES OF THE STUDY

The objectives of the project are:

PRIMARY OBJECTIVES

 To know the effectiveness of logistics management of FEDEX and to bench mark the
organization with respect to the industry
 To have a thorough understanding of how logistics system works in FEDEX

SECONDARY OBJECTIVES

 To know about logistics industry

 To understand the value of each organization
 To know whether the customers are satisfied with the existing range of services pattern.

3.5 OPERATIONAL DEFINITIONS OF CONCEPTS:

3.6 METHODOLOGY AND DATA COLLECTION:

COLLECTION OF DATA

The data was collected from two different sources

PRIMARY DATA

The primary data has been collected with the help of a questionnaire, prepared specially for
the retailers and consumers to be administered for their responses

Questionnaire
Direct Interview.
The main instrument of this research is Questionnaire earthed. In this method various
types of questions have been framed to bring out the customer response.

They were as follows

 Open Ended Questions

 Close Ended Questions
 Multiple Choice Questions
 Dichotonornous Method Questions
 Rating Scale
Questionnaire is the heart of the survey operation. This is a structured questionnaire, which has
been framed for conducting the survey. The questions were presented with exactly the same
wordings and in the same order to all of the respondents.

Direct interview is going to conduct with the customers of the FedEx and FedEx employees

SECONDARY DATA

The data collected from different sources is called secondary data. It also helps to get elaborate
information to do the research. Secondary data has been collected from the following sources
mentioned below

Books, Magazines, Internet, Interview with the FEDEX Company,

Interview with the fedex employees and also with others.

Company annual reports.

Research papers, Govt. Publications

Past Records and Files

3.7 RESEARCH METHODOLOGY

Research is a careful investigation or inquiry, especially in search for new facts in any
branch of knowledge. Research procedure is an approach to methodically take care of the
examination issue. It might be comprehended as an investigation of concentrate how inquire
about is done logically. In it we contemplate the different advances that are commonly embraced
by a scientist in examining his examination issue alongside. It is necessary for the researcher to
know not only the research method techniques but also methodology. Research has many
dimensions and research method constitute a part of research methodology. The scope of
research methodology is wide that of research methods. Along these lines, when we discuss
examine philosophy not just discussion of the examination think about and clarify why we are
utilizing a specific strategy or system and why we are not utilizing others so look into result are
equipped for being assessed either by the analyst himself or by others.

TYPE OF RESEARCH

For this investigation, spellbinding exploration has been utilized, it includes studies and
truth finding. The real motivation behind unmistakable research is the portrayal of the situation,
as it exists at present. It is involved with the analysis studies with attention on the portrayal of the
characteristics of a bunch of individual or a scenario.

The main objective of such studies is to amass data.

3.8 SAMPLING PROCEDURE:

Convenience sampling is the sampling procedure utilized in the survey. Convenience sampling
of homogeneous sample for the study. It refers to selecting a sample of study objects on
convenience. The researcher may make use of any convenient base to pick out the desired range
of samples. The procedure is known as non-probability sampling technique.
Supply chain is very important for this transportation companies the more efficiently they use
their resources they will gain more customer satisfaction

I am doing this survey in order to find out the key issues in the logistics industry and their
responsibilities and customers satisfaction level

SAMPLE SIZE

Due to time and resource constraints the sample size of the research has been restricted to 100
Members in consultation with the company. The survey that I’am going to choose and do is pilot
survey. Pilot testing is conducted for testing the Questionnaire. In a major enquiry the
noteworthiness of pilot review is felt without a doubt. Pilot study is in reality the imitation and
practice of the fundamental study.

Such a survey, being conducted by experts, brings to light the weaknesses (if any) of the
Questionnaire and also of the survey techniques. From the experience gained in this way,
improvement can be effected. Pilot testing of questionnaire is going to do with 13 numbers of
respondents. So that they will found it easy to answer the questions. Hence no modification in
the questionnaire has been made. Through survey method is going to conduct for 80 respondents.

3.9 PLAN OF DATA ANALYSIS:

The information after gathering must be handled and dissected as per the diagram set
down for the reason at the season of building up the exploration plan. This is fundamental for a
logical report and for guaranteeing that we have all the significant information. Handling
suggests altering, coding, grouping and arrangement of gathered information so they are
submissive to examination. The term analysis refers to the calculation of certain measures along
with searching for examples of relationship that exists among data-groups. In this method "amid
the time spent examination relationship or emerges supporting or conflicting from one in all a
sort or new hypothesis should be presented to bestowed to real preliminary of centrality to
choose with what data authenticity data can be said to show any finishes". Investigation of
information by and large includes various firmly related tasks that are performed with reason for
abridging the gathered information and sorting out them in such a way, that they answer the
questions.

3.10 LIMITATIONS OF THE STUDY

1. The time within which the study is been conducted is too short to carry out a detailed
analysis.
2. The respondents could be met only early in the morning and late in the evening.
3. During personal interview with respondents they felt inconvenient to answer.
4. The research was conducted in banaglore . Hence the resulting data may not be
appropriate to total population.
5. Most of the data was collected from primary source because it is very difficult to get the
appointment of the departmental head due to their busy schedule.
6. The result and findings are confined to a limited area.
7. The study includes the opinion of 100 persons (which includes customers, employees
and drivers).
8. The opinion of response may be biased.
 CHAPTER-IV

DATA ANALYSIS AND INTERPRETATION

REFERENCE

https://csimarket.com/stocks/competitionSEG2.php?code=FDX