Logistics Performance Management of Maersk Line**Dr. Chhavi JainAssistant professorDepartment of Management StudiesThe IIS University, Jaipur

*Ms Shilpi ChakravartyResearch Scholer & Assistant ProfessorDiscipline of Foreign Trade ManagementThe IIS University, Jaipur

AbstractShipping industry is the driving force that shapes the integration of global logistics. The face of logistics industry is changing day by day i.e. from profit orientation to customer satisfaction. The giant of this industry Maersk Group trying to create a business model which emphasis on developing core competency by customer contentment, communication, using innovative technology. They also used new marketing tools which are out of the league in this industry to develop an integrated communication channel.Here we investigated theoretically and empirically the key factors of this company which make them a global leader and also suggested them new areas of focus related to increase in market share and creating brand loyalty towards the company.Key words: Logistics performance, Customer Satisfaction, Nomination, Key Performance Indicator Introduction:Before we look into logistics and supply chain performance, we need to discuss Supply Chain Management(SCM).Logisticsandsupplychain performance is both involved in SCM. SCM is the coordination of logistics, location, production, and inventory, to name a few, in the supply chain. The systematic and strategic coordination of these functions achieves the best combination of efficiency and response to fulfil customers demands. Moreover, the coordination of these business functions improves the company and its supply chain as a whole. A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers[1].The Council of Supply Chain Management Professionals (CSCMP) states that logistics is a part of the supply chain that plans, controls and implements the movement of the inventory, i.e., the goods and services, from the point of production to the end consumer. In the corporate world, logistics scope includes transportation, shipping, warehousing and import and export operations. In addition to these functions, logistics also handles inventory management, production planning and customer services [2]. The importance of performance in the supply chain is immense. An effective supply chain performance system can provide the basis to understand a companys supply chain system. It influences the supply chains behaviour and, more importantly, it shows information regarding the outcomes of the supply chain to the company and its stakeholders. Basically, supply chain performance plays a major role in the strategy of a company. It has been proved that wellexecuted supply chain performance system measures lead to improvements in the overall performance of a company .Before 1990, logistics and supply chain performance was measured on a cost reduction basis. The lack of an appropriate performance measurement system has been a major obstacle to forming an effective supply chain. Companies in a supply chain have to decide to be either costefficient or timedriven. One contemporary way to measure the supply chain performance is in the form of metrics or Key Performance Indicators (KPI). The development of these KPIs should take place through the SMART goals (Specific, Measurable, ActionOriented, Relevant & Timely), forming a set of effectiveness, efficiency, customer satisfaction and IT utilization & Innovation. However, these indicators are more difficult to measure and compare. Considering a full set of indicators could result in a huge amount of data, which would require a lot of effort and high costs both in acquiring and analysing. A solution to this would be to select the set of the most important indicators, keeping in mind the goals of the company. The analysis should be performed with caution so that the resulting set of indicators covers every relevant point of view.Material and Method:In this study we collected data from both primary and secondary mode. We conducted a survey on companys clients as well as gone through the secondary material available on internet and published journals.Selected Company:Maersk Line is the worlds largest shipping company. It operates over 600 ships and 2.2 million containers and takes 23,000 bookings every day. With a 14.5% world market share, a Maersk vessel arrives in a port every 15 minutes. The bread you ate this morning, probably its flour arrived on a Maersk ship.Asias rise as an economic power has made it the most dynamic region in the world. Maersk Group is active across the continent, operating 10 business units. From China to Kazakhstan, Qatar, India and Vietnam, Maersk supports wealth through long-term investments and the transfer of critical knowledge to local workforces. The Challenge:Like many other companies, Maersk relies on its IT to deliver strategic initiatives in product, customer service and operational efficiency. Major projects at the time included a new global customer service booking system, upgrades to its enterprise services architecture and new customer facing systems reflecting Maersks desire to lead through innovation. This meant IT was under exceptional pressure, with demand seemingly endlessly outstripping supply. In 2009-10 it took an average of 150 days for Maersk Line to get value out of its development pipeline. A quarter of all requirements took over a year to develop, while any meaningful change would take at least two years to deliver. In other words, the company was moving too slowly which also meant it was proving very costly to deliver IT. Nor were they really sure that they were delivering the right thing. The department felt pulled in competing directions by numerous stakeholders.Sometimes the priorities produced an actual conflict between quality and cost, for example, prototypes moved into production and being used by tens of thousands of users. IT had somehow become an order taker for the rest of the company. No matter how hard they tried to fulfil delivery on time and on budget, the rest of the business seemed to perceive them as slow, expensive and lacking in innovation. Everyone was frustrated. There were significant problems that seemed to block any change: Technical a high level of dependency on legacy systems Structural significant off-shore and outsourced IT often caused priority conflicts Organizational budget and approvals processes could add months of time Cultural the teams had tried different ways of working before, including Agile and Scrum, but the changes had never stuck and it was making no meaningful difference to how long it took to deliver the change needed by customers. What make Maersk a Idealistic Brand?From last 5 year Maersk is in top 10 brand in shipping industry:S.NoCompanyShare

1APM-Maersk15.4%

2Mediterranean Shg Co13.6%

3CMA CGM Group8.3%

4Evergreen Line4.3%

5COSCO Container L.4.2%

6Hapag-Lloyd3.8%

7APL3.5%

8Hanjin Shipping3.4%

9CSCL3.0%

Above table shows that Maersk is a global leader in the industry and captured 15.4% of the total worlds market. What make it a top brand is its promotion strategies along with its sustainable growth.Social Media:For Maesrsk social media is about communication, not marketing. Its about engaging, not pushing. And social media is definitely not just about the media side. Here we are engaging our clients with the work environment of the company and it happenings. The Facebook page is run by the Maersk Line communication team for B2C use, and they attract attention and create engagement by sharing both positive and negative news (such as when they struck a whale last year a description was posted on Facebook and soon became the most shared post on the page, with a 1:1 like to share ratio, and received mostly positive comments) a way of showing their credibility.They also share users and employees images from Instagram and stories to create a visual and respectable brand. The team usea glocal approach with over 150 country communication managers worldwide being set up to post on the global page but with local news only being visible to their region. This ensures a simple approach which produces relevant customercommunication. The Maersk Line LinkedIn Company Page (/company/maersk-line) has almost 40,000 followers.Maersk Line found, after a social media survey they conducted, that their customers would prefer to connect with them on LinkedIn than any other network and they thereforeuse the platform in a very B2C manner to provide shipping industry news which is relevant to their followers (from the Company Page) and have high-end discussions in groups they decided to engage with customers on LinkedIn by setting up groups:The Shipping Circle group in January 2012 andThe Reefer Circle groupin August 2012 (both started by Jonathan). With a few hundred select users in each (users require approval to join), the groups consists of shipping experts from around the world who debate industry challenges and opportunities a great opportunity to gain knowledge from experts who Maersk may not otherwise meet. There are plans for further groups, especially a customer specific group or for a category of customer. Apart from this Maersk is also visible on other social tools like Twitter, Google plus, You Tube Etc.Sustainable approach of Maersk:In 2014, company introduced a new sustainability strategy aimed at addressing significant sustainability challenges in a way that creates value for society and Maersk. We have identified three key priority areas where focusing our efforts will help us unlock growth. At the same time, The will continue to integrate sustainability in our operations, mitigating risks and raising performance levels. Energy efficiency and climatic change - Maersk Lines reduction target is 60% less CO2 emitted per container moved by 2020 (2007 baseline). Combined with an expected 80% more volume in 2020, reaching this improvement target will result in Maersk Line having saved approximately 200 million tonnes CO2 from 2007 to 2020. This means they can sustain their efforts at decoupling growth from resource consumption. By the end of 2014 Maersk Line had reduced emissions by 39% per container.

Maersk Group-wide target is a 30% relative CO2 reduction by 2020 (2010 baseline). By the end of 2014 we had achieved a 19% reduction.Governance-The Group's Climate Change strategy includes the Group target for reducing CO2 emissions (see above), and is overseen by the Maersk Group Sustainability Council. The businesses are required to develop strategies and targets to reduce their environmental impact in line with their respective materiality and risk assessments. Performance is monitored and progress reported every half a year to the Group Sustainability Council. Enabling Trade-To succeed with their goal to reduce some of the many external barriers to trade, they will collaborate with other stakeholders from government bodies and infrastructure planners to the local farmer. Including as well as increasing their knowledge of transport and logistics could be what will enable improved trade conditions. Investing in training and education - This will involve setting up or expanding Maersk Training Centres, expanding collaborations with universities and secondary schools, developing curricula and designing new learning programmes. They will ensure that Maersk employees are involved in the programmes as instructors and consultants.

Swot Analysis of Maersk:Strength1. The largest container ship operator and supply vessel operator in the world2. Operates in 130 countries and have a workforce of over 100,000 employees3. Apart from shipping, company engages in energy, transportation, offshore, retail, and manufacturing businesses4. Strong global brand name and reputation as a top industry player

Weakness1. Relatively low visibility in road and air transportation2. Fluctuating profit margins is a concern

Opportunity1. Expand customer base geographically or through new services2.Strategic alliances and joint ventures3. Available technological innovations

Threat1. Economic slowdown2. Changes in regulations of various countries3. Rising cost of business

.Competitors 1. Mediterranean Shipping Company2. CMA CGM3. China Ocean Shipping Company

Analysis & Recommendation of current Logistic performance of Maersk:We conducted a questionnaire survey on connected clients of the company in Rajasthan and ask them the reason of connectivity with Maersk. And the analysis is given below Association of clients with the company In Rajasthan the corporate office is situated in Jaipur from last 8 years and we found that 32% of clients are associated with them from 1 year to 3 years and 1 year followed by 22% are in the category of 3 to 5 years and only 7% are associated from more than 5 years, which shows that Maersk recently created its image among clients in Rajasthan.

By the means of this analysis we analyse that most of the clients of Maersk are new so there is a great need of promotional strategy and capturing of market. Source of Information As we already mentioned that Maersk is a global Brand name and it is visible on many different virtual modes also but if discuss about Rajasthan the most informative source id the companys Website itself as 46% clients are getting information by its web tool, followed by C&F agents who are third party logistics who provide lisoning between the shipping line and the traders and only 18% are getting connected with social media. Therefore Maesrk should work more on their social media tool by increasing offers or referrals techniques to grab more and more clients on their Fanpages.

Preferred channel for using Maersk services - There are many channels by which shipping can be made, its up to trader which channel they select. For Maersk 39% are using C&F channel that means freight forwarders are promoting the company in good manner followed by nomination in which importer decide the channel of shipping and DAMCO ( personal freight forwarders of Maersk) 26% that and only 4% clients are directly using Maersk services.

By these figures we analyse that still people are relining on C&F agents in selection of shipping line so company should work on attracting more and more agents towards them. DAMCO although its own brand but then to lacking behind in grabbing customer. Maesrk should also work on the strategies to create customers directly use the services by making services more and more user friendly to gain maximum profit margin. Customer satisfaction In this study we have taken the key indicators of logistic performance as our base line and try to apply on the company strategies and impact of in on customers.

By the means of analysis we identified that most of the key indicators and factors are highly influencing for customer satisfaction out which better service quality in terms of competitive price is most preferred factor which shows that market of Rajasthan is still price sensitive so company should work on better competitive prices. Next is connectivity with the globe and better use of technology which show that Maersk marked its presence throughout the worlds leading ports and there is a good use of technology and innovation. Another USP of Maersk is the easy connectivity of shipper and line by the means of user-friendly web portals and 24/7 customer care services. If we analyse the key performance indicators of Logistic performance Customer satisfaction leads as the company provide best valued services in terms of time and price followed by Effectiveness of this brand leads due the better services and global reach. Next is Efficiency of the employees and its fast services which provide better results and lastly Technology & innovation which keep the employees and customers updated. Conclusion- Maersk is a global leader and trying to capture more and more market in Asia and for that company is focusing on customer satisfaction and better technology but they have to note that Asia and especially country like India, a developing nation is a price sensitive market so the strategies should be formed by keeping in mind about the user friendliness and competitive prices. Apart from it the key performance indicators are also been customised according to markets demand to achieve higher market capturing. References: 1. Khot, A.P. & Kulkarni, P.P. (2012) Supply Chain Performance Measurement. MPGI National Multi Conference (MPGINMC) [Online].2. Stroh, M.B. (2002) What is Logistics? Logistics Netowork Inc, New Jersey [Online]. Available at: http://logisticsnetwork.net/articles/What%20is%20Lo gistics.pdf [Accessed: 15 Nov 2012].3. Fisher, M.L. (1997) What is the Right Supply Chain for yourProduct?HarvardBusinessReview (March/April): 105116.4. Borges, J., Santos, S., Gomes, P.G. (2006) Measuring Performance in Supply Chain A Framework. Journal Paper of the Universidade de Aveiro [Online] Available at: http://www2.egi.ua.pt/cursos/files/GCA/EuromaSoni a2006Full%20paper.pdf [Accessed: 15 Nov 2012].5. Kleijnen, J.P.C. and M.T. Smits (2003) Performance Metrics in Supply Chain Management. Journal of the Operational Research Society 54(5): 507514.6. KJCF(2011)CorporateProfile.Availableat: http://www.kjcf.net/index.php?id=1 [Accessed: 15 Nov 2012].7. BursaMalaysia (2012) Company Announcements. Available at: http://www.bursamalaysia.com/market/ listedcompanies/companyannouncements/960837 [Accessed: 15 Nov 2012].8. Said, E. (2006) Supply Chain Management In A PackingCompany.[Online]Availableat: http://eprints.utm.my/4782/1/EttyshaMohdSaidKPFS KSM2006TTT.pdf [Accessed: 15 Nov 2012Web-liography:1. http://shippingwatch.com/carriers/Container/article6743426.ece2. http://www.seatrade-global.com/news/americas/container-shipping-demand-to-grow-rates-to-be-on-slight-decline-maersk.html3. http://www.tradewindsnews.com/finance/354890/maersk-posts-record-profit 4. http://www.ft.com/cms/s/0/c1a51f64-be8e-11e4-a341-00144feab7de.html#axzz3UoGHjGn1 5. http://www.alphaliner.com/top100 6. http://www.moggom.com/top-30-container-shipping-lines-in-the-world 7. http://linkhumans.com/case-study/maersk-line