On time, every time

Even in a price-conscious economy people persist in paying a 40 percent premium to Blue Dart to courier their letters and packages across the country. What is Blue Dart’s secret?

In an era where companies are slashing prices to tap new customers and retain existing ones, one company has been bucking the trend. Blue Dart, one of South Asia’s leading courier and integrated air express package distribution companies, is charging a 40 percent premium for its services and still acquiring customers by the dozen. And all this while continuing to retain its existing base. Blue Dart boasts of more than 100,000 shipments per day. No wonder then that the company has almost doubled its income in the last four years—from Rs 176 crore in 1998-99 to Rs 315 crore in 2002-03.

“Effective implementation of technology is the primary reason behind the phenomenal success that Blue Dart enjoys today. Technology has not only enabled us to sustain a competitive advantage by providing quality services but to also provide our customers with a reliable, secure and accessible infrastructure,” explains Malcom Monteiro, senior vice president-sales, services and systems, Blue Dart.

Since its inception in 1983, Blue Dart has invested more than Rs 40 crore in technology development. It has even provided free software to its large customers to ensure ease of operations. According to Monteiro, the company invests anything between Rs 3 to Rs 3.5 crore on technology initiatives annually. The company has strategically deployed technology to integrate various processes, enhance quality levels, achieve delivery excellence, and to create solutions for its growing customer base. Thanks to these initiatives, Blue Dart today stands testimony to technology’s role as a business enabler.

Blue Dart offers its services across 13,600 locations. Multiply this with the plethora of product offerings that the company has and the logistics involved is, simply put, extremely complex. Blue Dart makes a single delivery commitment across all its locations. It has set up certain internal standards, termed net service level (NSL), for measuring performance. The company claims that on an average it has managed to maintain its NSL at 99.95 percent constantly. The main factor here is that each and every product offering from the company integrates technology, right from an indigenously developed ERP system to a space management system to Web technologies.

The enticing Web

Of late, the company’s main initiatives have been in the area of e-trade and e-commerce. An interactive website has been developed to facilitate customer interface on the Net.

The Web interface has been designed on the principle that the customer should be able to get any required information within two clicks. Blue Dart has several tools, which enable real-time, online as well as wireless tracking of every single shipment. TrackDart, which can be accessed by logging on to the company’s website, www.bluedart.com, enables the customer to find the status of a shipment. MailDart on the other hand allows tracking of shipments using e-mail.

For the customer on the move MobileDart comes to the rescue. The customer can continue tracking delivery status by using either the short messaging service (SMS) option or the wireless application protocol (WAP). Other products include PackTrack, InternetDart, ShopDart, ImageDart and ShipDart. While ShopDart tracks purchases made online, ImageDart provides the delivery receipt online.

Hub and spoke

In keeping with its motto, ‘Solutions for peace of mind’, the company has taken various measures to ensure transparency, right from procurement to package delivery. Blue Dart’s indigenously developed ERP system, Cosmat 2 (short for computerised online system for management) enables tracking of shipments right from pick-up to various transit points, till delivery. Using barcode and scanner technology, this tool ensures that the customer receives real-time, complete and accurate information about shipments.

Leased lines, VSATs, microwave links and the Internet are among the various mediums used for effective data transfer between all locations. Data is captured right at the point of transaction and then stored centrally. The decentralised capture of data at various points is done on Novell NetWare servers. This in turn allows easy access to data over a WAN, and ensures real- time access to information. According to Monteiro, the current average lead time from the capture of data to the time it is made available to the customer is under 10 minutes. The system follows the hub and spoke system made famous by Federal Express with whom Blue Dart enjoyed a successful partnership for many years. The company has set up nine hubs throughout the country. The central database is located in Mumbai, and all the hubs update the database here.

Today, 97 percent of Blue Dart’s sales are directly connected to the WAN. The remaining 3 percent situated in small locations utilise the Internet to forward transaction information. The company ensures that the data is uploaded onto a central server in the shortest possible time.

Cosmat 2 also interfaces with the company’s human resources management, financial management, purchases, sales monitoring, executive systems and CRM systems. In order to enable all Blue Dart alliances and locations to interface with the system, the company has designed an application called Sentor. This system enables faster updates and feedback via the Internet. The system also features an in-built monitoring mechanism to check delivery performance.

Blue Dart has also developed a bridge at the back-end to connect with DHL Worldwide Express, a global courier and package distribution service provider. The company has a sales alliance with DHL in order to gain access to its worldwide distribution network.

Airspace

Blue Dart is the only courier and package distribution company in India to boast of flying four Boeing 737 freighter aircraft solely dedicated to transporting packages between the five main metros in the country. The company’s wholly-owned subsidiary, Blue Dart Aviation (BDA), has also contributed to enhancing the company’s bottomline. BDA posted a net profit of around Rs 36 lakh in 2002-03, a sharp rise from the Rs 19 lakh net profit it posted in the previous year. Blue Dart also has also tied up with a number of airlines. The company’s own aircraft enable late cut-off and early delivery of goods. Here again, technology has a major role to play. Says Monteiro, “Technology enables us to make and keep commitments by helping us focus on pain areas like a tight flight connection.”

Blue Dart has developed a space management system, christened Smart, to enable customers to book space online. Smart (space management allocation reservation and transfer) is a centralised application that allows real-time space and revenue management on the Blue Dart Aviation network. Thanks to the system, customers can book space on the aircraft and get an assurance that the package will be on the flight. Smart is connected to Comsat 2 in order to enables trace and track.

Safety first

Shield, BlueDart’s online security module, has been integrated with Caress, the company’s customer complaint and appreciation module. Monteiro feels this is the key reason why 90 percent of the credit card business is handled by Blue Dart. The system allows any employee to log in any area of concern. The information is the forwarded to the ‘trackers cell’, which studies the issue. If there is any cause for concern the matter is handed over to the security team for investigation. The company also has its own X-ray scanners at all airports, which enables the company to accept freight without the requisite cooling period for security. Even internally, the company doesn’t permit anything other than text attachments in e-mail to avoid the menace caused by threats from virus infested e-mail.

Last word

Technology has enabled Blue Dart to improve the quality of decisions taken, highlight areas of concern, issue prompt service delay notification (SDN) alerts to customers, save on costs, improve efficiency and reduce time spent on various processes. Voice over VPN has enabled the company to achieve tremendous savings in terms of communication costs. Though business volumes have gone up communication costs haven’t increased correspondingly. The company doesn’t have to incur any additional cost as voice and data can now move at the same time.

One area critical to businesses in any vertical is churn management. According to Monteiro retention of customers is something technology has helped them to maintain. In fact, he cites instances where customers who had switched to a cheaper service provider came back after realising the benefits provided by Blue Dart.

The team of 12, the company’s IT team, has many other products up their sleeves. A powerful sales automation system providing full transparency and pre-call intelligence to the sales team is just one of them. An e-learning module offering product knowledge to staff in operations is also being planned.

Blue Dart is also planning to expand its air network coverage by adding one more plane to its fleet in the near future. The company aims to employ technology to strengthen distribution within India over the next few years. It also aims to continually offer value-added services and ensuring global connectivity through its present and future interactive technology strengths.

This article first appeared in Express Computer