BLUE DART/ DHL

FINAL REPORT

This report contains details about the COSMAT II Platform Change Enterprise Resource System implemented by Blue Dart DHL India Limited.

Pavan Abhishek Bhupathi PGP/15/101 R Ranjith PGP/15/104 Rahul Ramesh PGP/15/105

Blue Dart/DHL: Final Report Acknowledgement

Our group would first like to extend its heartfelt gratitude to Mr. Gracious Torres and Mr.Shashi Kumar at the Blue Dart offices in Cochin and Bangalore for their guidance, cooperation and valuable insights which have been crucial in the making of this report. Also, it was a pleasure to interact with the team at the Blue Dart office in Cochin and witness the application of IT systems in practice in the logistics industry. The C2PC system is currently implemented in 3 zones in Kerala Cochin, Trivandrum and Calicut. We would also like to thank Prof. Shahid Abdulla and Prof. Anindita Paul for providing us the opportunity to study the IT operations at Blue Dart-DHL India Ltd as part of our project requirement for the Management Information Systems II course at Indian Institute of Management, Kozhikode.

Pavan Abhishek Bhupathi R Ranjith Rahul Ramesh

PGP/15/101 PGP/15/104 PGP/15/105

Blue Dart/DHL: Final Report

Table of Contents Introduction....................................................................................................................................... 3 Organization Structure....................................................................................................................... 3 Shipment Movement: From Pickup to Delivery ................................................................................. 4 Enterprise Resource System .............................................................................................................. 5 C2PC ERP System ............................................................................................................................ 7 Advantages of the C2PC System ....................................................................................................... 8 Disadvantages of the C2PC System ................................................................................................... 8 ROI Calculations ............................................................................................................................... 9 References....................................................................................................................................... 10

Blue Dart/DHL: Final Report Introduction This report investigates a new IT enterprise resource planning system currently employed at Blue Dart-DHL India as of January 2012. Known as the C2PC or COSMAT 2 Platform Change, Blue DartDHL India is currently adopting this IT system in order to support its logistics business and ensure the transportation and shipment of nearly 338,000 tonnes (as of 2010) annually1. The information contained in this report has been collected, assimilated and presented after site visits to the Kozhikode Blue Dart Service Centre and the Kochi Head Office.

Organization Structure

VP IT Head (India) Mr. Paul Vicent

VP IT Head (South 1) Mr. Shashi Kumar

VP IT Head (South 2)

VP IT Head (East)

VP IT Head (West)

VP IT Head (North)

Asst. Manager(IT Operations) Mr. Gracious Torres

A broad picture on the organization structure for the IT operations in Blue Dart DHL The Indian Operations for Blue Dart DHL is divided into five zones. o South 1 Covers Karnataka and Kerala o South 2 Covers Andhra Pradesh and Tamil Nadu o East o West o North The operations in each zone are further divided into regions. Under south zone, the region we looked at is the Cochin Region. The Assistant Manager for IT operations for the Cochin region is Mr. Gracious Torres.

(Logistics Times, 2011)

Blue Dart/DHL: Final Report

Shipment Movement: From Pickup to Delivery

The consignment delivery process undergoes the following procedure First consignment undergoes a security check up. Checks are on the authenticity of the consignment, whether they list in banned items published by Blue Dart DHL. It is checked whether serviceable or not according to the pin code given by the consignor. Driving License or other identification proof is checked for the verification of the customer. The consignor detail along with delivery details is entered into the system. AWB is generated. (Screenshot A) Invoice is generated for the transaction. Consignment is handed to the operations team for the delivery process. Destination segregation is done according to the pin code. System has master pin code and region code to ship to the destination For delivery, groups with 35 consignments called Canvas Bag is sent by Air or Surface and each package in the Canvas is called Plastic Bag. C2PC checks on the delivery of consignment in real time. Route is decided on the priority basis. Blue Darts have their own transport by air for delivery of consignments across metros.

(Ranganathan, 1999)

Blue Dart/DHL: Final Report

Technology has played a major role in Blue Dart DHLs success. The companys in-house information technology has been developing Information Technology solutions for past 20 years. It is the first company in India to introduce online tracking system and private email network to ensure real time information is available during shipments. Operational process controls, on-time data capture, and close monitoring of proof-of-delivery (POD) exceptions, minimize or almost eliminate billing discrepancies and revenue leakage. These efficient processes also support in reducing the collecting time and improving cash flows, which helped the company, achieve zero debt status. The tracking and control mechanism that has been developed in-house is called COSMAT II (Computerized Online System for Management Accounting and Tracking). It supports tracking of all items from pickup to delivery. It has been an advanced and sophisticated tracking system in the industry which can monitor the precise location of the consignment at every stage of its delivery. It offers complete visibility to our customers who have integrated their systems with IT solutions. Soft copies of proof of delivery (POD) are made available to them on demand giving details of delivery date, time, and receivers name to close the loop in their system for delivery data. This enables them to bill their customers. This in turn contributes to improved recovery of receivables and reduces their working capital requirements. Some of the tools widely used in and are associated with Blue Dart DHL are TrackDart, MobileDart, MailDart, InternetDart, ShopTrack, PackTrack, ShipDart, ImageDart, Schedule Pickup, Waybill generation and Billing on the Net.

Under Blue Dart-DHL Indias C2PC System, employees can access all of the above tools in real time using the same interface.

Enterprise Resource System The ERP system in Blue Dart DHL is an integral to the Business Strategy Information System and Decision support system. It has the following features which range from end-to-end visibility for customers, reduction in cycle time and variability, reductions in cost, enhanced system flow, increase in system capacity to improving customer service and also integrating tools and applications with that of customers. Another key benet of the ERP is that it has obviated the need for inter branch reconciliation, which is a big pain area for any company with global operations. SMART (Space Management Allocation Reservation and Tracking) It is a state-of-art technology, developed in 1995, which involves real time space and revenue management on the aviation network in Blue Dart DHL. The transportation is filled profitably and provides assurance to customers that the consignments will be shipped and delivered in time. Hence the consignment booked on SMART are picked, which is moved to the network and tracked until it is delivered. Customer Centric System A system which contains only a single window for all the information related to customers. It covers from customers profile, sales trends, and patterns in shipping, quality, performance and other details regarding customers which include feedback and technology tool usage. It also contains information on the industry segment analysis.

Blue Dart/DHL: Final Report Safire It is the application used by the sales force of Blue Dart DHL to manage acquisition of customers and the servicing process. It uses a sales force automation software package called SalesLogix which is customized to the meet the needs. It provides sales person overall view of the business along with the needs of the customers so that the sales force responds proactively. mPower Blue Dart uses MS Dynamics NAV, a Microsoft product as the Finance ERP, which is customized and enhanced to meet the companys complex requirements. It is a centralized, integrated, secure, robust and user friendly package. It supports the controllers/accountants through automatic consolidation of accounts across 65 accounting locations and over 200 cost centers every day in the country which in turn helps in the generation and review of reports. These reports are updated in real-time. TrackDart It is a technology that monitors the status of the consignments shipped from the pickup point to the delivery point. MailDart It is the technology that tracks shipments over the electronic mail. InternetDart It is memory bank that stores the details of the shipments. PackTrack It is software that tracks medium and large customers (industrial and commercial). ShopTrack It is tracking-cum-CRM tool for the e-business portals. ImageDart Online download of proof of delivery and delivery challan/documents to speed up the customers billing process and recovery cycle. ShipDart Customer control over shipping process, waybill issuance capability, customer directory, data upload and download of tracking information SENTOR It is software to facilitate tracking and feedback from far-flung locations. SHIELD It includes tracking and management of security incidents across the system. ESP (Enterprise Security Policy) It is a policy which involves selection and implementation of Anti-Virus software and security policies like access control to employees on demand by supervisors, addition of new recruits to user 6

Blue Dart/DHL: Final Report groups on C2PC, USB access and other related measures. Auditing is done every six months to maintain the required security measures set by Blue Dart in their policies.

A AWB Invoice to the Customer C2PC ERP System After implementing the Customer Oriented System for Management Accounting& Tracking(COSMAT I) in 1991, further improvements to Blue Darts indigenous ERP system led to a collaboration between Blue Dart and Arthur Anderson. A complete IT planning study exposed several deficiencies in the off-line tracking system, i.e. COSMAT I and led to an improved version of COSMAT, known as COSMAT II3 which was launched in 1994. The following table summarizes the differences between the C2PC and the COSMAT 2 ERP systems C2PC Centralized database with two servers Main server location at Mumbai with a backup server at Bangalore Real-time updation of inbound and outbound data from different service centres Increased capability of addition of new geographical service location related data at a single service centre ensures that new service area related details are reflected in each centre across the country in REAL-TIME. The online tracking system is functional on a 24
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COSMAT 2 Localized servers in each citys branch office across India operating as a standalone system. Each centre schedules the updation of outbound data at 5 pm daily and inbound data in real time. Addition of geographical service location data must be done MANUALLY in each service centre across the country to reflect the changes in the database The online tracking system reflects data which

(Ranganathan, 1999)

Blue Dart/DHL: Final Report hour basis This system relies on the use of ISDN and VPN and is restricted mainly to METROPOLITAN (Tier 1 and Tier 2) cities. This initiative will serve as the focus of Blue Dart DHLs IT Strategy for the coming fiscal year has been upgraded during the last scheduling cycle as mentioned in point 2 Poor performance of the VSAT and WAN employed has led to its slow transformation to a backup to the C2PC system in case of the latters failure

Blue Dart-DHL Indias C2PC system has leveraged the benefits of the previous COSMAT-II system and has not affected the current processes employed across service centres in order to handle the outbound and inbound logistics operations of the company. The C2PC system console has preserved the look and feel of the old COSMAT II system to ensure that employees do not face unfamiliarity while using the systems most commonly used modules such as the pickup module, area module, hub module etc.

Advantages of the C2PC System The updation of inbound and outbound data pertaining to master repositories to the central server at real time ensures that changes are visible to all service centres connected to the C2PC system. Prior to this, in the COSMAT-II system, the master files would be localized and updation was to be done manually. The COSMAT-II system was prone to localized database corruption during turn-on and turn-off due to power outages and maintenance in different regions. This resulted in data loss in the FOXPRO DBMS with no backup provision for data recovery. Since the server in C2PC system is functional for 24 hours and does not have a downtime, this problem is avoided. In case of outages of the main server, there is a backup server which can operate as a standby till the problems pertaining to the main server is resolved. In local setups, the local service administrators were given access to information in the localized servers. This was a cause of concern in terms of data security as well as non-compliance to security protocol and IT governance practices. With the C2PC system employing a uniform access control list segregated on the basis of the employee grades (management level), decisions are routed to a centralized location. A new feature called PRE-ALERT allows for information to be sent to a destination hub at the time of dispatch of a consignment which facilitates faster and more efficient report generation which will allow for better identification of SHORTAGES and OVERAGES of consignments.

Disadvantages of the C2PC System The main concern for this system is the lack of a backup for the standby server in case of multiple server failure which may occur due to a wide range of reasons. Blue Dart-DHL India is currently without a Disaster Recovery Plan for the system as it continues to use the COSMAT-II servers as backup till a full-phase implementation of the C2PC initiative is complete. The current stage of C2PC allows for integration of various modules as mentioned previously and is mainly focused on improving real-time display of metrics pertaining to shipment delivery and receipt across various hubs in the country as per the HUB and SPOKE MODEL followed by the company.

Blue Dart/DHL: Final Report ROI Calculations The success of the COSMAT-II ERP Systems can be inferred from the two graphs shown below. The first indicates a steady rise in the Net Worth of the company which is a zero-debt (unlevered) firm and the second demonstrates the return on the capital employed by the firm towards its operations.

Net Worth(in Rs crore)

Dec '10 Dec '09 Dec '08 Dec '07 Dec '06 541.41 449.81 391.87 317.3 250.22
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Net Worth(in Rs crore)

Graph 1

Return on Capital Employed(%)

34.45 31.57 29.63 26.23 20.96 28.2 Return on Capital Employed(%)

Dec '06 Dec '07 Dec '08 Dec '09 Dec '10 Jan '12

Graph 2 Though the C2PC systems implementation is currently in its nascent stages, one of the primary reasons for the overhaul of the COSMAT-II system is to continuously improve its IT operations which it considers as one of the key elements to its source of competitive advantage in India. This new track and trace system from Blue Dart DHL India, according to MD Anil Khanna, is in line with
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(http://www.moneycontrol.com/financials/bluedartexpress/balance-sheet/BDE#BDE) (http://www.moneycontrol.com/financials/bluedartexpress/balance-sheet/BDE#BDE)

Blue Dart/DHL: Final Report his belief that Every year, we are investing more and more in this department and our IT expenditure has consistently gone up. This is one area where we never make any compromise!

References

http://www.cfo-connect.com/images/article/on-my-mind-oct08.pdf. (n.d.). http://www.cfoconnect.com/images/article/on-my-mind-oct08.pdf. http://www.moneycontrol.com/financials/bluedartexpress/balance-sheet/BDE#BDE. (n.d.). http://www.moneycontrol.com/financials/bluedartexpress/balance-sheet/BDE#BDE. Logistics Times, N. 2. (2011, November). Blue Dart's Double Punch. Logistics Times. Ranganathan, S. B. (1999). Blue Dart Express Limited. Vikalpa, 10.

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