Solutions to improve transportation service quality by door to door method of tico logistics

FOREWORD The reason to choose a topic Freight forwarding is an inseparable factor from international trade Business is increasingly abundant with many components and many services provided, meeting the needs set out in the transportation of society, especially import and export goods However, the fact that freight forwarding activities in Vietnam are still inadequate is the quality of operations Development of diversified and abundant services provided but ineffective, the main reason is the inappropriate business method, which has not met the needs of customers Therefore, the practice requires business methods to improve service quality and save costs Logistics services are very diverse and bring high profits to the field of Logistics, especially according to the Door to Door method, which is the business method that needs to be researched, applied and developed Tico logistics - one of the leading enterprises in Vietnam in the field of freight forwarding Founded in 2005, with a worldwide transportation network, relatively good infrastructure and transportation facilities Tico Logistics is fully confident in undertaking complex work, involving high value, fragile or even priceless goods Facing the context and the development trend of the world, Tico logistics as well as countless other businesses, need to equip themselves with knowledge, professionalism, and quality of service From that, the question was asked: “How to maintain existing customers, attract potential customers, high profits? How to improve the quality of service, provided with the shortest cost and execution time? Specifically for this issue, I decided to choose the topic "Solutions to improve transportation service quality by Door to Door method of Tico Logistics" Research objectives: Learn the process of forwarding import and export goods under Door to Door conditions of Tico logistics company Business situation of the company, business activities of the sales department in recent years Contact with other companies in the industry, learn, learn from experience Since then there are measures to improve, improve service quality, as well as meet customer needs, increase sales and profits Research scope: + Business activities: Logistics + Research area: Hanoi city + Research subject: Tico International Corporation Research Methods: + Qualitative research: refer to previous studies of the company, discuss with the senior staff in the company about service quality, or discuss with friends in Logistics group led by Dr Pham Hoang Cuong guide, as well as find out how satisfied customers are with the company's services + Quantitative research: Analyzing through the table the results of revenue, costs, profits of the company Topic structure: The topic is divided into four chapters with the following content: Chapter 1: Rationale for logistics service quality Chapter 2: Introduction about Tico Logistics Chapter 3: Operation process of Door to Door forwarding Chapter 4: Solutions to improve the quality of the company's import-export forwarding service by the Door to Door method CHAPTER 1: THEORETICAL BASIS ON QUALITY OF LOGISTICS 1.1 Quality 1.1.1 Quality concept Quality is a long-standing and widely used concept variable in many areas of human activity However, understand how is quality is not a simple matter Stand at different angles and depending on the objectives, the production and business tasks can give out concepts on different qualities that come from the product, from the manufacturer or from the needs of the market There are currently a number of concepts put forward by the authors in quality literature as follows: According to J.M.Juran said that the quality is consistent with purpose or history use According to Philip B Crosby (1979) in "Quality is free" Quality description is conformance to requirements And according to A Feigenbaum, quality is the aggregate characteristics of production products and services that, when used, will make products and services meet expectations waiting of customers According to ISO 8402: 1999, quality is a set of characteristics of an entity (object) capable of meeting the stated needs or implicit Vietnam is now also using this concept to consider about the quality of your product or service From the above concepts despite different expressions but the main content of It's about quality is still "demand satisfaction" Thus we can conclude that any product or service is durable no matter how beautiful they are, they not satisfy their needs and are considered to be of poor quality This is an important awareness to help businesses plan for quality of its products and services 1.1.2 Quality forming process From perceived quality as conformity to needs, we see that to satisfy needs, businesses must ensure quality in all process of manufacturing and distributing products and services Just guests the product is not satisfied with the product warranty, the attitude is also damaged previous stages So when it comes to quality people consider to overall product or service In other words, the quality is the synthesis, it formed through many stages and influenced by many other factors together Quality is created at all stages of the product process 1.1.3 Importance of quality Quality plays an important role in economic strategy planning business It is the point that makes a difference for our products their business compared to competitors, helping businesses create advantages sustainable competition and trust with customers Because quality is "satisfaction demand satisfaction ”, if customers are not satisfied then they will not use continue product or service Like John Young, chairman of Hewlett-Packard once said that: In today's competitive environment, neglect the matter of substance Quality is also synonymous with suicide (Pham Thi Minh Ha, 2009) From there can be seen Be the importance of quality And its importance is Jack GE's Welch condenses: Quality is the surest insurance for loyalty into the customer's; is the strongest barrier against foreign rivals, and is the only way to sustain our growth and profits 1.2 Services 1.2.1 Service concept Services are a common concept in marketing and in business Have many ways to define a service: According (Zeithaml and Bitner, 2000) claim that services are behaviors, too process and how to perform a task to create value for use customers satisfy customers' needs and expectations According to Philip Kotler and Armstrong (1991), services are all activities and ends indeed, one party can provide the other, mostly intangible, with no leads ownership of something Its products may or may not be attached to one material products According to ISO 8402: 1999, services are the results produced to meet requirements of customers by contact activities between suppliers - customers and supplier's internal operations In a nutshell: the service is a "special product", it includes all support that customers expect, beyond basic services, consistent with price, picture and related reputation 1.2.2 Service characteristics Services are a "special product", mostly invisible, not leading to ownership of something Therefore, the service has many other characteristics For common goods: ► Invisibility of services: unlike material products, translation service cannot be held, held, heard, or seen before purchase Guest the goods only receive the product or service as soon as it is delivered and therefore, to reduce uncertainty, buyers will look for signs or material evidence of service quality such as people, information, location points, device icons, prices they see For the reason being invisible businesses and customers find it difficult to perceive about service and service quality assessment ► Inseparability: this feature assumes a service delivery process a continuous occurrence, that is, the process of providing and receiving services begins at the same time, at the same time with the client's presence throughout the time manufacturing Therefore, the quality of service will be very unpredictable and will be based on subjective judgment of the customer and of course, we cannot accumulate, service reserves as well as pre-testing ► Heterogeneity, instability: The quality of the service depends performers, times and locations provided Therefore, you can rely on the last test to assess the quality of your service provided This is an important trait that suppliers should keep in mind if want to improve the quality of its services Organization can overcome by how to invest in recruitment and training, staff training; at the same time standardize implementation processes, and monitor and measure satisfaction regular customers ► Fragility, not keeping: Because invisible, service is given is very fragile, neither the provider nor the receiver can save retain, cannot be sold or sold for a later period 1.3 Quality of service 1.3.1 Definition of service quality From the perspective of service, we find it difficult to fully define quality of service because it is also intangible Guest goods received this product through communication activities, receiving information and feel The salient feature is that customers can only rate the whole thing quality of the service after purchasing and using them Customer reviews Service quality is based on attitude, subjectivity, and perceived ability As Zeithaml (1987) explains service quality as customer appreciation about the transcendence and the general excellence of an entity That is one the form of attitude and the consequences of a comparison between what is expected and awareness of what we receive Lewis and Booms (1983) think that service is a measure of service level delivered to customers is as good as our expectations are Creating a quality service means meeting customer expectations consistently According to Parasurman, Zeithaml and Berry (1985, 1988), the service quality is viewed as the gap between service expectations and customer perceptions goods when using the service And ISO 9000: 2000 considers service quality as the level of a set inherent characteristics of the service to meet the needs and expectations of the guests and stakeholders (Ta Thi Kieu An et al., 2010) Because of the quality of service related to the expectations of the customers as well like their perceptions of service Therefore the quality of service is difficult to assess There are usually three basic levels of assessment of service quality: ► Good service quality when customers feel that the service exceeds their expectations ► Satisfied service quality when customers feel in accordance with their expectations ► Poor service quality is when customers feel below their expectations for the service Therefore, in order to retain customers, businesses must make sure their services are always well evaluated There is such a new business exists and sustainable development 1.3.2 Characteristics of service quality Service quality has the following characteristics: ► The first characteristic, according to professor Noriaki Kano (1984), is the attribute of A service is divided into three levels: ● Level is the basic expectations that a service must have These are attributes that customers not mention but they take for granted must have Failure to meet these properties will result in the service being denied and denied excluded from the market because customers are frustrated ● Level are specific requirements or one-way attributes These properties are often referred to as a function desired customer The higher the level of responsiveness, the more customers feel satisfied ● Level is the attractive element of a product or service This is factors create surprises, make a difference compared to the same type of service prime However, this element is not constant, over time it will become basic expectations that a service must meet From this it can be seen that want to meet the needs of customers and organizations It is important to define attributes at each level to support effective investment more efficiently, resources are more focused and satisfying daily customer needs the better Besides, when you understand the three levels of attributes mentioned above, organizations will limit the misinterpretation of customer needs survey results ► The second characteristic of service quality is specific market conditions Any business process, what kind of product must be attached with a definite market A highly regarded service in the school it meets the existing market needs as well as requirements by stakeholders ► The third characteristic is also a key element of that service quality is to measure customer satisfaction Service quality is measured by customer satisfaction Therefore, the most important thing of any which business process is listening to the real user voice? Understanding the characteristics of service quality will help organizations respond better and better to customer needs 1.4 Overview of logistics are PL and PL, managing the entire distribution chain based on e-commerce platform Trends in Vietnam According to statistics, currently Vietnam has about 3000 enterprises operating in the field of logistics There is an emerging phenomenon of "logistics houses and logistics workers" Such mass production is true but in fact these units are only the second providers of logistics services, meaning just hire for foreign businesses and provide basic logistics services such as customs, transportation, A small number of businesses have just reached the level of a third logistics service provider, which provides services as a bridge between suppliers and users In other words, we still lack door-to-door logistics providers The major source of profit from logistics services is not in the hands of Vietnamese businesses but flowing into foreign logistics service companies' pockets A great source of income on home turf has not been taken advantage of by Vietnam businesses, but they are working for foreign corporations The new Vietnam services she has a very small part of the huge and growing pie of the logistics service market At Tico logistics company: Tico logistics is no exception, although trying to develop to be able to stand firm in the market economy, but want the logistics service package "Door to Door" In order to have a first step of development, Tico logistics must overcome the following problems: Existing 1: Currently Tico logistics does not have a branch in a foreign country, forwarding activities on an international scale, especially Door to Door forwarding 73 must be through an agent abroad Therefore, Tico logistics must have a significant foreign currency revenue, and not control the process of transporting goods from Port / Airport to the consignee's own warehouse in the importing country, as well as changes in the cost in the situation competition that Tico Logistics does not know Most of Door-to-Door forwarding activities are on behalf of foreign forwarders, thus limiting the initiative in exploiting foreign goods markets when goods are imported to Vietnam Therefore, it is not possible to guarantee the consignee or take the right to transport from warehouse to warehouse for imported goods, and usually Port / Airport to Door Exist 2: Quality of delivery Door to Door is not yet comprehensive Transport infrastructure, warehousing are still weak, still have to use outsourced services, not proactive or control all transportation, limitations in Door to Door delivery process leading to goods on time, location, risk with high costs - Moreover, Tico logistics also uses the traditional information system (telephone, fax, mail) to exchange information, send and receive documents without any software or information system connecting with partners of only me - Limited human resources, especially their own partners Exist 3: Infrastructure is weak - Information technology has not yet caught up with foreign companies, especially in the management stage (warehouses, fleets of vehicles, goods, ) - Still lacking reception room - There are still some obsolete machines and equipment that need to be upgraded or replaced 74 Existing 4: Currently, Tico logistics does not have a separate functional marketing department for the whole company operation but only 2-3 main people, serving marketing in each separate business department Lacking a comprehensive marketing strategy, forwarding marketing activities are still passive, only relying on the main agent, not actively exploring and exploiting the market Exist 5: How to diversify types of services and improve service quality to customers - Currently, the sea freight service is still the main company, it needs to improve operations to attract and increase customers for air and domestic goods - Customer care has not been focused yet 4.3 The solution is to improve the forwarding service by the Door to Door method at Tico Logistics 4.3.1 Solution 1: Establishing foreign branches in countries with trade relations, strong trade potential with Vietnam Currently setting up overseas branches is really difficult for Tico logistics as well as for other businesses in the same industry But the long-term strategy requires them to set up a network of overseas branches, possibly to stand firm on the international forwarding market in the face of globalization in this field Purpose: Exploiting the foreign market has the potential to exploit freight forwarding and competitiveness 75 Enhance control of goods when performing freight forwarding segments Content of the solution - Establishing branches in countries with strong foreign economic relations with Vietnam - When establishing a branch in a foreign country, it is necessary to study and quantify the growth potential for freight forwarding activities in that country That is, it is possible to identify the volume of goods traded between the two parties and predict the future increase, while also determining the level of competition in the service industry in that market - We take a total of countries that have trade and trade relations with Vietnam, then determine our major export and import markets, determine the volume of goods containerized or console in foreign transport In order to open a branch, it is necessary to open a branch In addition, it is also necessary to determine the trend of bilateral diplomatic cooperation between two or more parties that have a great influence on the increase or decrease of import output or turnover in our country Therefore, it is possible to determine the possibility of developing forward-looking volume in the future, thereby establishing a branch in a foreign country, promoting its effectiveness and exploiting a large forwarding market in foreign countries Besides, an important factor that greatly affects the delivery and receipt of goods, it is necessary to focus on surveying countries with large foreign investment capital into Vietnam, especially large capital flows of investment into export processing zones - Based on export turnover and important developments on external economic relations between Vietnam and other countries in the region and the world, at the 76 same time with the ability of Tico logistics company can propose Countries have great potential to set up branches here: Markets in Southeast Asia will have positive changes in the coming years, when free trade takes place, pushing the volume of circulation and transport of goods among countries in the region to increase At the same time, Vietnam is a member of the Asian bloc, joining the WTO is a favorable environment for longterm and sustainable business cooperation In which, China, India, Malaysia are markets with highly developed, forecast and sustainable economy So establishing a branch in the Chinese market is the most promising, followed by India and Malaysia Tico Logistics is a joint stock company, so it will be more convenient to raise capital from the establishment of a foreign branch It is possible to issue additional securities to mobilize both domestic and foreign capital Or, Tico Logistics will enter into joint ventures with well-known forwarding and transport firms in those countries or partners who have been or are currently having business relations, prestige and sustainability Conditions for implementation When acting as Door to Door freight forwarder, selecting a foreign agent is essential, it is necessary to consider and understand the object to be able to trust them to perform their delivery on their behalf The company should choose famous and reputable forwarders as agents to ensure the entire business takes place effectively Establishing a foreign branch requires a really good service of the entire business operations of the company Compare Disadvantage Advantage The table compares the two options for establishing a foreign branch So in both directions, each plan has its advantages and disadvantages But considering Tico logistics nowadays, the most appropriate solution is To succeed in expanding business operations to international markets, Tico logistics must now have a strategy to train personnel in the company, adapt to the pressure of international business, accumulate first reserve Investment and development of the company to prepare financial resources in the future Predict how effective it will be - Increase sales of goods imported to Vietnam and goods exported from Vietnam by the Door to Door method by which Tico logistics is the carrier - Market share of foreign forwarding, can be entrusted to transport goods of domestic customers to other countries - Increasing foreign currency revenue for Tico logistics from Door to Door brought by not having to pay commission to agents or earned profits Affirming the reputation of Tico logistics in the international competitive environment 78 4.3.2 Second solution: Improve the overall quality of delivery Purpose of the solution - Ensure delivery requirements on time required by customers - Ensuring safety, minimizing loss and damage Content of the solution - To meet the requirements of safety - quickly - accurately requires the freight forwarder to associate with a high sense of responsibility, ensuring that the stages in the process are coordinated smoothly, reducing the interval time gap between the two stages of implementation, limiting problems in the issue of documents and transportation Otherwise, it will affect the next stage or the whole process of Door to Door delivery is delayed, delayed - To build a Door-to-Door delivery system successfully, the company must step up and determine more the ISO quality management service system, and at the same time solve some current problems: - First: Improve the human element: In fact, as mentioned above, the sales team of Tico logistics is still quite weak compared to other companies, less competitive in the market So: + Constantly training, improving the qualifications of forwarding staff, helping them improve their professional competence, at the same time giving them access and update new information to apply to high quality work And can ensure logistics services such as purchasing goods, goods penetrating abroad, participating in foreign exhibitions, settling disputes 79 + Selecting and investing immediately in students studying foreign trade, shipping, foreign trade, import and export Through events such as: Connecting with the Club, Inter-branch hall to organize practical tours at the company, helping you to have the look and passion from the beginning with logistics, recruitment learn to hire potential employees for the company - Second: Promote investment in buying equipment for transportation and handling scientifically but still combine with the outsourcing policy when necessary and overloaded goods Performance conditions - Human resources with solid experience and expertise, love and care for the profession - Need a consultant to process ISO management effectively - The legal system and procedures of the state must be simple and effective by information technology, closely and quickly linked among departments Predict how effective it will be So Door to Door delivery service for each stage in the link of the process: storage, transportation, delivery, customs procedures, logistics services are not interrupted, but the stages must be prepared ingenious, coordinated smoothly and see the process as a practical effective system that will bring profits, improve competitiveness compared to other units in the same industry At the same time, to create trust and attract domestic importers for the services that Tico logistics provides, especially Door to Door package delivery 4.3.3 The third solution: Improving IT infrastructure 80 Infrastructure is an essential condition for the success of the business, especially in the field of logistics that the company operates Content of the solution - Firstly, Tico Logistics Company should use information technology in the vehicle and warehouse management system - Second: For warehousing, it is advisable to use Barcode - FEID and Warehouse Management System + Warehouse management systems often use Auto ID Data Capture (AIDC) technology, such as bar code scanners, mobile computers (warehouse detectors), wireless LAN and are capable of frequency recognition routes (RFID) to effectively monitor the flow of products Warehouse management systems can be stand alone in the system, or have the module of an ERP system or supply chain implementation The main purpose of a WMS is to control the movement and storage of documents in a warehouse - Tuesday: Using Item Trucking software - Tracking goods and parcels Track goods and parcels in internal and international delivery processes, applied in the post, freight, inland, international, and express delivery companies globally, barcodes allow service users to check to see where their packages are being processed, to what locations Conditions for implementation - The cost of buying software is not too high - Need a team of company technical experts of the company - Instructing employees to use the system honestly - Synchronization between customs, businesses, 81 Predict the effect brought - Easier to control in transporting and warehousing - Meet the business needs, provide information to solve promptly, minimize risks - Increase business efficiency of the company - Bringing the company to the international level 4.3.4 The fourth solution: Promote marketing activities to attract customers With the trend of regional and global integration taking place in the future, the barrier of freight forwarding services in our country will be broken The wellknown foreign freight forwarders will jump into Vietnam market, making the competition environment more and more fierce and the market share will be divided back in a negative direction for freight forwarding companies in Vietnam In order for Tico logistics to adapt to that terrible competitive environment, Marketing services are indispensable - Purpose Promote activities of all business sectors, promote strengths of freight forwarding services - Developing market share, creating a stable customer base, reducing dependence on agency relations in forwarding activities - Develop a business of transporting contractors to choose packages from door to door Content of the solution - Create a separate Marketing department 82 With clear functions and powers, at the same time affirming its role and position are on par with other departments and under the direct leadership of the board of directors - Personnel needs: when forming this room, there will inevitably be the demand for personnel responsible for the work - Function of Marketing Department + Must ensure to serve the entire business activities of the company, further enhance the role of forwarding activities for the company, especially to have a strategy to promote Door to Door forwarding activities in next time in line with the world trend, confirming the company's stature + Research, re-quantify the domestic market At the same time, we also study foreign market surveys on capacity, growth potential and the level of competition in countries with high trade potentials to enter and exploit + Attract and seek service contracts for operations in the professional bureaus The marketing department's departments are responsible for their own fields such as market research, finding customers, developing their own operating policies, Especially the consulting department is responsible for supporting the Other departments and customers such as buying insurance, settling complaints Building a marketing - mix strategy - Products and services policy: + Forwarding of import and export goods: Researching to further improve the quality of each business, especially the key business Port-Door, Door to Door, researching new needs of importers and exporters to offer new products and services + Shipping agency: the marketing policy must highlight the strength that Tico Logistics has many agents in the world, segmenting the markets On the other hand, restricting the abandonment, reducing cargo volume and reducing the risk of 83 dropping goods by maintaining agents for shipping lines, establishing good relationships with enterprises in the same industry and shipping companies + Warehouse business: quality, favorable price that is a competitive advantage in this field today, marketing activities must develop a program for warehousing activities for customers to know - Service price policy: The price factor is a decisive factor for the competitiveness of companies in the industry Therefore pricing for service activities is very important in attracting and keeping customers It is possible to research the price of competitors as a basis for customers but must ensure the cost Usually, the price of this industry is often secret, so it is possible to refer to customers, thereby having a lower price policy than competitors Researching competitors' price is very helpful in retaining patrons, doing big and long-term business so Tico Logistics can promptly lower prices in accordance with the competitive trend - Distribution policy: Promote cooperation with foreign forwarders to expand the network overseas Enhancing the appointment of agents in new forwarding markets with potential for development such as the US, Middle East, Europe, - Promotion policies: + Using Google AdWords purchased from FPT so that when customers search for keywords such as "delivery", "logistics", "shipping", the website of Tico Logistics will appear in the top of search on Google This creates a great advantage for Tico Logistics because the probability of accessing the website is very high Besides, it also makes a very good impression on customers about a reputable forwarding brand In particular, the website must be designed to leverage the company's shipping strengths 84 + Use the Forum related to topics indirectly about brand advertising, delivery services, of Tico Logistics such as the Forum of forwarding companies' association + In addition, Tico logistics can use email marketing to directly advertise its services to the audience Although this solution does not guarantee to be able to control and evaluate the effectiveness of sending and receiving email marketing, it can still bring certain effects if the right audience and time is even more reminiscent of customer + The telemarketing solution currently being used shows that it is effective when more and more customers know and use the company's services through this form In the coming time, it is necessary to continue implementing this approach based on data sources purchased from customs and from income sources cleared through industrial park websites, internet, magazines, advertisements, fairs, etc Conditions for implementation - Human resources meet the requirements and functions mentioned above - Cooperation between departments - Financial resources are under control of Tico Logistics Predict the effect brought - Increasing the company's market share in all three areas: forwarding, warehousing, and transportation - Ensuring stable revenue and delivery, limiting output reduction in the past years that the company encountered - Can increase the volume of tender package transport, improve competitive position compared to rivals 4.3.5 Solution 5: Diversify types of services and improve customer service Content of the solution - First: Diversifying service types: 85 With the current economic situation, the demand for logistics services is increasing, so the expansion, creating a professional in the form of forwarding is also an important condition to attract and diversify customers line - Second: Improve quality, service and customer care Most customers of the company are not fully understood in the field of logistics, so customer service staff should advise them with full information on the choice of shipping lines, transportation methods to save money fees, fast shipping time, to give customers the best choice For customer care department, every employee must have a sense of work, show enthusiasm, thoughtfulness, professional working style, politeness, closeness to customers Ready to answer all questions, listen to customers' opinions That way, customers will feel secure and satisfied when using the company's services Conditions for implementation Tico Logistics can implement this solution easily with: - Relationship with agents to associate, open road agents - Training resources, training on service classes, customer care - Development of corporate culture Effective forecasts bring - Meet the growing needs of customers, create a brand in the market - Increase sales and profits for the company - Help the company have a foothold in the market 86 ... about Tico Logistics Chapter 3: Operation process of Door to Door forwarding Chapter 4: Solutions to improve the quality of the company's import-export forwarding service by the Door to Door method. .. 1.6 Overview of door to door service 1.6.1 Concept 21 Door to Door transportation is a service of transporting goods from hand to hand, to the recipient and the whole package of Customs procedures... Basic content of Logistics The basic content of Logistics / Customer service 14 In logistics activities, customer service is understood as all outputs, a measure of the quality of the entire