Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
BY
Auon Abbas (14826)
Waquas Hassan (16001)
Furqan Ahmed Khan (16260)
Uneeb (21204)
Supervisor
Dr. Mehmood Ali
Karachi
May 2019
Table of Contents
Chapter 1 Introduction.............................................................................................................................. 4
Chapter 2 Literature review ..................................................................................................................... 9
Chapter 3 Research Methodology .......................................................................................................... 15
Chapter 4 Data Analysis and Discussion ................................................................................................ 17
Strengths ............................................................................................................................................. 22
Weaknesses ......................................................................................................................................... 22
Opportunities....................................................................................................................................... 22
Threats................................................................................................................................................. 22
Chapter 5 Conclusion ............................................................................................................................... 23
References ................................................................................................................................................... 24
Acknowledgment
We would like to thank Allah the almighty for providing strength and capabilities to pursue this
project and NLC for trusting IoBM and providing this learning opportunity to IoBM students.
Special Thanks to our course facilitator Dr. Mehmood Ali for standing with us in all odds an evens
throughout this project without his guidance it would not have been possible to accomplish this
task. Hats off to Dr. Moin Ali Khan, HOD Supply Chain, for thinking diversely and connecting
students with such big organizations NLC, helping us to groom our experiential learning and
enhancing our skill set for practical life ahead. It has been an amazing learning experience.
Best regards.
Chapter 1 Introduction
Logistics and supply chain managmenet act as an vital foot in the growth and progess of any nation.
Logistics is a key component in every organization in any sector of the economy. The key
components of logistics involved, the means of transportation, cargo handling, warehousing and
dispatch of goods. Transportation, trucking and service delivery is the strength of a effective and
efficient logistics and supply chain management system. Transportation yearly costs for 34% of
the logistics charges (logistics charges the books for 11% of the total sales or revenue).
Transportation is a key component (cost center) that determines and constitutes a major impact on
the overall optimal efficiency "Pareto Optimality" in any organization. When it comes to
minimizing the overall cost of production or overall cost of provision of services. Transportation:
means rail, road, air, sea, the size of cargo, the turnaround time (TAT), the feasibility as per the
geographic array.
The Freight system has straight and indirect relation with all the vital divisions of the country. The
scope of the freight structure shakes the economic progress of any nation. A proficient and worthy
quality freight structure contributes to trade and industry growth by minimizing manufacturing
costs.
Highways and Rail networks are the two core pillars of Pakistan's Local Transportation Structure.
The responsibilty and role of Pakistan Rail network in the cargo delivery is on the deterioration
since the actual inception. In the 50s, its portion in cargo delivery was above 80% which has
currently shrunk to 5% merely. Highway freight division in Pakistan is extremely disorganized
and informal and is ruled by drivers cum holders of one,two or more lorries.
Road And Highway Structure:
In 1947, at the period of freedom, the total roads and highways were approximatel 50,000 Km,
with no proper motorways, and the roads concreteness was not more than 0.07 Km/sq Km while
Pakistan has currently above 264,000 Km roads connecting through 579 Km boulevards and 10906
Km of freeways with a road density of more than 0.30 Km/sq Km. Pakistan has now over and
above 178,000 km High- roads and 86,000 kms Low roads. Overall road and transportation
network, which were 229,595 kms in 1990-90, increased to 264,000 km by 2005-09 ― an
escalation of 16 percent. Through the on going financial year, 3.2 percent increase in the
construction of high typed road and networks on the other hand the network of the low typed roads
has diminished to 3 percent.
Fro the construction, development and maintenance of roads and highways is under the supervision
of National Highway Authority (NHA).Road maintenance account (RMA) is also controlled by
the National Highway Authority (NHA).Repair and maintenance is highways and roads is financed
through toll revenue generated through the fiscal year. Also, in the yearly budget announcements,
Grants are also given by Federal Government to the National Highway Authority of Pakistan. The
LTV vehicles and cars on highways and roads have been expanded and increased at a sensible
pace particularly over the most recent five years there has been huge development in this area. In
the past five years, vehicle generation, including autos, trucks, cruisers, tractors, transports and
other business vehicles, has hit the roof from 195,791 units production in 2001-02 to 998,592 units
production in 2005-06 that show growth over 400 percent . Traveler autos and light business
vehicles have seen generous development; from 50,000 units/year have developed, to 200,000
units/year in genuine ascents by 300 percent according to the statistics beaureu of Pakistan . i
But NLC Freight services are differentiated from its competitors because of the following services:
International Standard Rest Areas:
The National Trucking Policy of Ministry of Industries visualizes the demonstration of committed,
multipurpose parking and resting offices at areas nearby national inter states highways to fill in as
consistent assistance point by having all feasible help infrastructure. In compatibility of a similar
approach, NLC as a team with accomplices and partners is setting up International Standard Rest
Areas on the back of National Highways and CPEC courses. Drivers Emergency and Rest Areas
(DERAs) will encourage the Road Freight Industry and general sub ordinates, by giving relaxing
area and cutting edge offices. It will also deploy an extensive network of repair and recovery
services of both light and heavy vehicles all across the country here are the facilities provided to
drivers in DERA:
iv
Technological Factors:
1. Current technological development by rivals
2. Impact of technology on product offering
3. Impact of value chain structure in the services sector.
Legal Factors:
1. Consumer Protection
2. Health and Safety Law
3. Data Protection
According to Günter Prockl and Henrik Sternberg, 2015, for logistics company how drivers spend
their time plays a pivotal role in maximizing the profitability of the company. Estimating is the
initial step to distinguishing upgrades Furthermore, disposing of inefficient exercises. Estimating
the utilization of time beyond a shadow of a doubt exercises can turn out to be very troublesome,
particularly in enterprises where work is done without prompt supervision, for example, street
cargo haulage. However, "given the effect of driver exercises on how well engine transporters
address the issues of their flow and potential clients, the capacity of transporters to control the
activities of their drivers ought to essentially affect the company's intensity" (Mello and Hunt 2009,
20). Contingent upon the nation, time speaks to the biggest or second-biggest expense for engine
transporters, with the compensation cost of the drivers representing 20– 55 percent of the
administrator's absolute expenses. Time is likewise focal in the use of the engine bearers' armadas
and, consequently, turns into a key factor in deciding the effectiveness of engine bearer activities
(Simons, Mason, and Gardner 2004; Villarreal, Garcia, and Rosas 2009). The Motor Carrier
Efficiency Study (MCES) pointed out the noteworthiness of squandered driver time, for example,
the time wasteful aspects identified with stacking and emptying activities, which are evaluated to
cost administrators in the United States over $3 billion yearly (Belella et al. 2009). In their
investigation, Sternberg, Prockl, and Holmström (2014) found that drivers spent just 45 percent of
their working day driving, while 5.7 percent was spent on pausing and 5.4 percent on the
organization. They additionally discovered that presenting data correspondence innovation (ICT)
and improving transport forms could decrease time squandered on pausing and organization, and
feature the need to examine drivers' exercises.vii
The Time For Digitalized Transportation Solutions:
The coordinations worth chain of expedited service is a dynamic procedure with making
coordinations esteem for clients. In the customary, the "client" is the outside clients of a venture,
and the "administration" is the inward "clients". In the coordinations worth chain, joining the
inward and outside variables, the express endeavors improve the administration nature of outer
and interior clients synchronously, to get the full and proceeded with points of interest of inside
and outer assets, and after that structure the center coordinations aggressiveness.
Digital truck innovation will completely change the way freight is transported on highways around
the world. Trucks will drive not far off guided by an abundance of data from transportation
foundation and different vehicles, improving use through remote upkeep, expanding the
effectiveness, and upgrading wellbeing.
Combined with the digital supply chain, the promise of connected trucks is huge. However, the
dangers for those players who don't move to begin constructing the abilities and plans of action
expected to win in this new world are the equivalent.
The distribution centre framework allocates each truck to a stacking dock naturally, were a few
independent forklifts are prepared to empty. They at that point move the heap on to another piece
of the distribution centre, where it is arranged by machine for neighbourhood conveyance courses
and stacked for conclusive conveyance on the proper little self-ruling electric trucks.
This "digitized trucking," and the coordinations business that it is a piece of, is still later on for in
any event 10 years, yet parts of it are as of now being set up—on account of two noteworthy
worldwide patterns that are changing the trucking business. In the first place, administrative
endeavours worldwide to oversee environmental change and spare vitality and assets are
compelling the business to digitalize.viii
With a strong economy-boosting truck shipment volumes, the articulation "shipper of choice" has
maneuvered into thought. "Bearers can be explicit," says Brad Stewart, pioneer of Rock homestead
Supply Chain Solutions. They will pick shippers that are definitely not hard to work with. Without
a doubt, a couple of drivers go online to rate shippers, much like clients rate diners. Here are a few
different ways you can be a not too bad assistant and rein in trucking costs: Agree on what "on
schedule" signifies. Does it allude to when truckers get through the distribution center door or the
time they touch base at the stacking dock? A misconception can mean trucks sit inactive. "On the
off chance that shippers need to lower trucking costs, they need to assess to what extent trucks will
sit in the yard, not profiting," says Richard Stewart, Ph.D., teacher, transportation and
coordinations the executives, University of Wisconsin, Superior. At that point they have to limit
that time. Transporters that face reliable deferrals at a specific area may choose to stay away from
it, constraining the shipper out into the market—and higher rates. Distinguish transporters in your
path. Most bearers that as of now have resources on your courses can include stops at your areas
more effectively than a transporter from outside the district. Influence membership benefits that
give anonym zed information on what different organizations pay for a specific path and mode.
"With every one of the information focuses, you can rapidly make sense of a sensible range," says
Jonathan Eaton, head and national production network practice pioneer with bookkeeping and
counseling firm Grant Thornton. This data can place you in a superior arranging position. Band
together with your transporter. Since driver maintenance is so significant, numerous transporters
offer inclination to shippers that become solid accomplices. Drivers frequently like to work with
shippers whose items, individuals, and courses they've come to know and like. Over these
movements, the limit in numerous transportation modes has fixed. The truck driver deficiency has
been among the main three basic issues confronting the North American trucking industry for 12
of the previous 14 years, finds an ongoing study by the American Transportation Research
Institute. The deficiency resounds past the trucking business, the same number of shippers go to
other vehicle modes to move their products rapidly and productively.ix
Pakistan Geo-Strategic area manages that accentuation out and about cargo area to broaden the
offices at ports to differenet nations, particularly the Asian States, which can create it a territorial
center aimed at universal exchange through incorporating it with the global transportation
framework. Expanding exchange capacities, mutually at the residential and territorial dimension
requests this division to redesign and furnish itself with armada meeting TIR shows. In this manner
upgrading productivity by diminishing the expense to the economy causing the type of street harm,
higher fuel costs. A proficient trucking framework is a pre-imperative to become a territorial
exchange center point, for Pakistan. Consequently, the trucking armada need to be technologized
in request to encourage extending exchange exercises and beat misfortunes emerging out of area
wasteful aspects. Porter's analysis of the logistics industry addresses the bargaining power of
suppliers, bargaining power of the buyer, Barriers to entry, Substitute, and Industry competitors.
Bargaining power of supplier in the logistics industry is low as there is a major informal player in
the road freight sector. Conversely, the dealing intensity of the purchaser is high attributable to the
casual and divided nature of specialist organizations. Furthermore, Barriers to section are low
inferable from effectively accessible capital and joint effort with the products conveying
organizations. A rearing ground for people business people and is simple as loaning cash from the
bank, purchase the truck and work.x
Investment is considered as the remedy of organizations to getting them older. Logistic business
is completely based on vehicles used for transportation. Interestingly, NLC has vehicles as new as
20 years ago. According to IRS, the U.S government agency responsible for the collection of taxes
and enforcement of tax laws, assets that have an estimated useful life of 05 years includes cars,
taxis, buses, trucks, and computer and office machines. Without taking care of useful life, NLC is
using the vehicles up to 4 times over the useful life. Customer service is considered as a key to
retaining the existing customer while attracting the new ones. NLC customer service is one of the
low rating services considered in logistics companies. NLC has no call center, no one window
operations and no facility centers for customers to assist with their orders. NLC also do not
approach formal markets where most cargo is based upon. The issue also persists with high
compliance costs NLC has to bear as an organization while having less amount of orderings. Other
logistics companies and particularly unofficial logistic providers usually evade taxes, overlook
policies of NHA and other related institutions to save money and provide low-cost services to
customers. NLC lacks in identifying its core competency. In this digitalized world, not every
company can provide all the services required for customers. Few have to leave while few have to
opt but in NLC they just opt what they want and they leave what they do not. After all these
services, in some cases, NLC charge like tier A logistic provider which also burdens their bottom
line to be positive.
In this research, due to time constraint, we followed the Qualitative approach to identify the factors
which have an impact on the performance of the National Logistics Cell. In this regard, we
conducted interviews with different level of management at National Logistics Cell. Further, we
compared it with market practices and benchmark a few dominant names of the Logistic Industry.
To further strengthening our data, we take references from different research papers and with the
help of different newspapers, journals and business magazines we include different articles to
provide substantial pieces of evidence to our recommendations.
The nature of the questionnaire was descriptive so unanimously agreed upon views are being
incorporated about the analysis done below.
This discussion not only involves officials of NLC but also includes a fruitful discussion with the
leading freight forwarders (Potential customers of NLC) such as Yusen Logistics Mount Shipping
and Logistics, Pak link Shipping, Yaseen Shipping Venus Global, etc.
The generic discussion revolved around strength and the weakness (Internal factors followed by a
huge pool of opportunities (untapped markets) and the threat of existing competition for NLC in
the logistics industry.
Basically, through Value Chain analysis we identify NLC internal activities that help NLC in
converting offerings into services to its customers. We identified that Freight services of the
National logistics cell are facing the following problems in their respective departments.
• Right Person, Right Job
In Freight services, the right person for the right job is not available. We analyze this issue by
carefully looking into the human resource management department where we found that for certain
positions in the NLC, officials are appointed from Pakistan forces like army, airforce, and navy.
These officials are appointed for two years in different regions of Pakistan. In these two years, the
first years are wasted on the training and development of these officers and in the second year,
these officers just perform the daily basis duties and contribute nothing innovative in the
organizational development, as they haven’t got specialized skills in their assigned task.
• Customer Service
A discussion with the Khawja Saleem(Head of Marketing), we found there is no concept of
customer service in Freight services. NLC does not hold after the customer service department.
• Product Portfolio
We also analyze that NLC having a wide range of strategic business units lacks product portfolio
in freight services units. As with advance technological development in the trucking industry
globally, NLC is maintaining the product portfolio of the 70's and 80's era.
• Market Access
Evaluating the NLC we also found that Freight services do not have proper market access. In
Freight services, the process does did not ensure that the customers would get benefit from supply
chain management, and get fast and sustained access to the company's services at the right time
and the right place.
• Brand Loyalty
Looking into the internal activities and discussion with Khawaja Saleem we also discovered that
there is no concept of Brand Loyalty in the organization. NLC hasn't got any framework for
creating brand loyalty within customers and employees. Because of this, another problem arises
that employees lack a sense of ownership and achievement.
Opportunities Threats
1. Private middle man services are still 1. Huge competition by the private sector
having a question mark on the brands namely Agility, BSL, IBL,
reliability PTN, etc.
2. End to the end supply chain can 2. Private contractors constitute up to
provide a huge customer base hence 99%
long-term profitability 3. A significant increase in import duties
3. Can align with Pakistan National has put pressure over the competitive
Shipping cooperation, PIA and logistic pricing.
Speedex for end to end at a very
reasonable rate
4. Strict regulations in the fiscal policies 4. Variations in policies are creating big
by this new government will create a question mark on the sustainability of
competitive edge against the free the business
riders in the industry
SWOT Analysis:
Recommended Strategies:
Opportunities Threats
(External, positive) (External, Negative)
Chapter 5: Conclusion
Keeping the above factors into consideration NLC must opt for diversification in the portfolio
and revise its pricing model by negotiating with regulatory authorities to develop a centralized
(government-oriented) air and sea international trade services. Technology adaptation as
recommended above will not only improve the operation efficiency but it will help them to
compete for head to head with the existing competitors who are having this technological
advances such as DEMCO, BSL, IBL, Agility, etc. as we all know that technology-oriented
organization will ultimately excel in future as it is a direct culmination of red tapes in any
industry.
References
i
Analyzing Pakistan's Freight Transportation Infrastructure Using Porter's Framework and
Forecasting Future Freight Demand Using Time Series Models by Muhammad Abbas
Choudhary, Nawar Khan, Muhammad Arshad, Aisha Abbas
(http://climateinfo.pk/frontend/web/attachments/data-
type/0084Choudary%20et%20al%20(2009)%20Analyzing%20Pakistans%20Freight%20Transpo
rtation%20Infrastructure.pdf)
ii
Analyzing Pakistan's Freight Transportation Infrastructure Using Porter's Framework and
Forecasting Future Freight Demand Using Time Series Models by Muhammad Abbas
Choudhary, Nawar Khan, Muhammad Arshad, Aisha Abbas
(http://climateinfo.pk/frontend/web/attachments/data-
type/0084Choudary%20et%20al%20(2009)%20Analyzing%20Pakistans%20Freight%20Transpo
rtation%20Infrastructure.pdf)
iii
https://en.wikipedia.org/wiki/National_Logistics_Cell
iv
http://www.nlc.com.pk/strategic-units/nlc-dera-ir
v
http://www.nlc.com.pk/strategic-units/dry-ports-borders
vi
https://karandaaz.com.pk/blog/china-pakistan-economic-corridor-transport-logistics-sector-
growth-potential-pakistan/
vii
https://www.jstor.org/stable/10.5325/transportationj.54.2.0275?Search=yes&resultItemClick=tru
e&searchText=technology&searchText=and&searchText=truck&searchUri=%2Faction%2FdoB
asicSearch%3FQuery%3Dtechnology%2Band%2Btruck&ab_segments=0%2Ftbsub-
1%2Frelevance_config_with_tbsub&refreqid=search%3A0a41883c2b2d09c9f8a352fed621cd3b
&seq=1#page_scan_tab_contents
viii
https://www.strategyand.pwc.com/media/file/The-era-of-digitized-trucking.pdf
ix
https://www.inboundlogistics.com/cms/article/putting-the-brakes-on-transportation-costs/
x
https://www.researchgate.net/profile/Muhammad_Choudhary2/publication/228758137_Analyzin
g_Pakistan%27s_Freight_Transportation_Infrastructure_Using_Porter%27s_Framework_and_Fo
recasting_Future_Freight_Demand_Using_Time_Series_Models/links/53f09ebf0cf26b9b7dce0a
ef/Analyzing-Pakistans-Freight-Transportation-Infrastructure-Using-Porters-Framework-and-
Forecasting-Future-Freight-Demand-Using-Time-Series-Models.pdf?origin=publication_detail
Appendix-I
The following are interview questions that we will use in an undertaking of value chain analysis
of NATIONAL LOGISTICS CELL(NLC). This questionnaire, "Questionnaire for Value Chain
Analysis" is conducted with employees at all designations of the NLC, and are designed to:
1. Search out for the primary activities in the value chain, their responsibilty, and links between
different organization deparments
2. Identify different market needs and trends within the internal and external process of value
chain
3. Identify limitations and opportunities that are diminishing growth and competitive advantage
of the organization
1- Part 1 is related to the identification of factors that affect NLC internally and externally.
2- Part 2 is related to different departments of NLC that play a vital role in organizations
profits.
This part is related to the identification of organizational factors that affect the organization
internally and externally.
1. What do you see as your chances in getting to business sectors and accessing markets?
2. To whom do you sell your item or services (huge firms, medium sized firms, wholesalers,
exporters, retailers, direct to purchasers, and so on.)? What rate goes to each?
3. Portray the connections you have with these purchasers (who figure out what to deliver, item
particulars, costs, and sum obtained?). How much info do you have?
4. How would you advance and market your items and services?
5. How solid is the market for your product / services at the present time? One year from now?
What patterns do you see?
6. Are some client gatherings superior to others as far as deals and income development? Which
ones?
7. Do you ever team up with different firms on advancement and additionally promoting?
9. Do you have methods for conveying data about your firm to other people? (Connect any
handouts, rundown of items, and so on.)
1. What are your real needs in product plan and assembling or service delivery?
2. What different items do you produce/sell? What rate does every product speak to as far as
your gross income?
4. Is present equipment or machinery an barrier to growth? Clarify. Provided that this is true,
what sort of hardware or equipment can enahnce your services and products?
5. Is the present degree of your labourer's preparation keeping down development? Provided that
this is true, what extra preparing do they need?
MANAGEMENT/ORGANIZATION
1. In the sector of association and the executives, what are your significant needs/openings?
2. Who does the majority of the work in the sector of general administration/supervision, item
configuration, buying, generation, shipping, bookkeeping, advertising, fixes, and so on
proprietor, representatives, or outer?
4. Do you here and there team up with different firms to create and convey client orders?
5. Which parts of your business do you plan to change in the following 2 years, equipement,
hardware, PCs, new items, promoting procedure, quality control, the executives framework,
specialist aptitudes, and so forth ?
6. What the executives' skills might you want to re-inforce to develop your business?
INPUT SUPPLY
1. What are your significant needs/openings in the territories of info cost, quality, and
accessibility?
2. Who are your most significant providers and what do you purchase from each?
4. Have you at any point acquired sources of information or supply together with different
organizations?
FINANCE
2. Do you get credit from your vendors and service providers? What are the terms?
3. Do you get financing from your purchasers? What are the terms?
4. Do you require extra financing right now? Provided that this is true, what might it be utilized
for?
5. What sources (formal or casual) have brought you closer to debts and loans, and what have
been the key issues, if any?
POLICY/REGULATION
1. What are the most significant framework requirements influencing your business'
development and benefit (street/transport conditions, telephone utility, electric supply,
corruption, stock-piling, and so on.)
1. What are the significant benefits you have for advancing change in your value chain?
3. What do you believe are the qualities of your industry locally and globally?
5. What do you believe is the biggest challenge confronting your industry today?
6. Would you be able to name some entrepreneurs in your industry who are pioneers – for
instance, regarding innovation, item structure, quality, or promoting?
This part is related to different departments of the organization according to their role in the
organization.
FINANCE
Q1: What are NLC's Compensation and benefit policy for its drivers?
Q2: What are the recruitment and retention policy of NLC drivers?
LOGISTICS