POSTAL AND COURIER TRAINING RUNNING A COURIER

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Expectations tree 2/5/2018 Ianstar Ltd. Excellence. Delivered 4

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Course objectives General objective:
To instill knowledge and skills on the fundamental aspects of running a courier business or operations (in PCK)

Specific objectives:
After a successful completion of the course, participants should be able to:
Understand the basic concepts of courier business
Understand and manage contemporary issues concerning planning and operation of a courier business.
Understand strategic options and solutions in handling the challenges in running a courier business
The participants will also share and learn from each other’s experiences. 2/5/2018 5 Ianstar Ltd. Excellence. Delivered

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Course topics Overview of the courier industry.
Basic concepts of courier business.
Marketing and selling courier services.
Courier operations support functions.
Performance measurement in a courier business.
Economic & social value of the courier industry (KE)
Strategies to address challenges in the courier industry. 2/5/2018 Ianstar Ltd. Excellence. Delivered 6

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Topic 1: Overview of the courier industry 2/5/2018 Ianstar Ltd. Excellence. Delivered 7

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Definition: Courier service Courier service involves conveyance of documents, parcels and distribution or parcels, catalogues, publications or any other material that needs to be delivered.
It is a premium service. On the other hand, Postal services are basic services. 2/5/2018 Ianstar Ltd. Excellence. Delivered 8

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Conveyance is by use of: Motorcycles
Delivery vans
Delivery trucks
Passenger buses
Bicycles
Foot/ ground couriers
Aircrafts 2/5/2018 Ianstar Ltd. Excellence. Delivered 9

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Elements of courier service Speed
Efficiency
Reliability
Flexibility
Safety
Proof of delivery
Compliance
Priority handling from acceptance to final delivery 2/5/2018 Ianstar Ltd. Excellence. Delivered 10

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Definition: Courier business An organization which offers courier services to customers in exchange for money.
A courier business can be publicly owned, or privately owned- PCK and private operators 2/5/2018 Ianstar Ltd. Excellence. Delivered 11

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The Regulator - Communications Authority of Kenya Mandate:
Licensing, promoting development of standards, monitoring operator activities, protect consumers, manage competition.
Maintains active licensee register.
Prepares annual industry reports. 12 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Relevant legislation Kenya Information and Communications Act 1998. Amendments in 2009 and 2013
Postal and Courier services regulations, 2010
Universal access and services regulations, 2010
The Kenya Constitution, 2010
Guidelines for postal and courier licensees on promotion of e- commerce
Courier License conditions 13 2/5/2018 Ianstar Ltd. Excellence. Delivered

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License conditions Compliance
Revocation
Type of operation and annual fees.
Compliance returns- courier revenue stream.
USF fees.
Service standards.
Customs.
Safety and security. 14 2/5/2018 Ianstar Ltd. Excellence. Delivered

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License conditions cont’d Tariffs and reviews
Interconnection
Business permits
Tax obligations 15 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Competitive services Offered by both public and private courier operators
Include courier services, distribution services and electronic mail services 16 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Services exclusive to PCK Acceptance and delivery of postal articles weighing up to 350 grams.
Provision of private letter-boxes and bags.
Printing and issuance of postage stamps.
Financial remittances. 17 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Courier services There are a variety of service levels and names in the market, including
Within the hour courier service
Same day courier service
Overnight service
J+ 2, J+3; extended delivery services
Export courier services
Import courier services
In- house courier services 2/5/2018 Ianstar Ltd. Excellence. Delivered 18

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Postal and Courier Industry stakeholders Definition:Stakeholders: Groups that have an interest in the company.
Without these groups the company ceases to exist. They provide resources.
Not all stakeholders are equal! 19 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Stakeholders cont’d It is important for managers and owners of postal and courier businesses to understand, manage, control, influence, monitor, advise, cooperate and comply to stakeholder interests and expectations for smooth business operations. 2/5/2018 Ianstar Ltd. Excellence. Delivered 20

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i. Internal stakeholders Employees
Managers
Owners/ Shareholders 21 2/5/2018 Ianstar Ltd. Excellence. Delivered

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ii. External stakeholders Customers- existing and potential customers
Government- CA, KRA, UPU, PAPU
Competitors
Industry groups- CIAK, KEPSA, KIFWA
Professional associations- HRM, ICPAK, ICX, MSK
Suppliers and partners
Financiers and investors
Communities- local, national, general public
Trade unions 22 2/5/2018 Ianstar Ltd. Excellence. Delivered

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Critical success factors in courier service provision Reliability and flexibility
Routing and work flow chart
Security
Information- track and trace
Fleet and transport services
Price of provided services 2/5/2018 Ianstar Ltd. Excellence. Delivered 23

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Critical factors cont’d Service Level Agreements
Customer service line, desk, department or call center
Courier waybill, consignment note, collection or delivery note.
Working time calculation sheet 2/5/2018 Ianstar Ltd. Excellence. Delivered 24

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Trends in the postal courier service industry Competition:
Own customer delivery systems
Increasing number of local courier/ city courier service operators
Entry and expansion of international companies 2/5/2018 Ianstar Ltd. Excellence. Delivered 25

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Trends contd’ 2. Client needs
Tracking and tracing
High quality service levels
Guaranteed delivery – speed, time
Price sensitivity- low cost
Value added services- returned documents, packaging... 2/5/2018 Ianstar Ltd. Excellence. Delivered 26

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Trends contd’ 3. Regulatory framework
Market structure clustered- public, national or international operator
Disproportional price regulation- PCK price controls vs. private operators notification of price changes
Access to network by competitors- interconnection contract filing 2/5/2018 Ianstar Ltd. Excellence. Delivered 27

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Trends cont’d 4. Technologies
Real time correspondence
E-commerce
Mobile and desktop applications
Amazon’s delivery drone service
Uber taxis entry into the parcel business
Orion by UPS- route optimization for UPS drivers and fuel saving 2/5/2018 Ianstar Ltd. Excellence. Delivered 28

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Technology trends cont’d GPRS- Maps and physical addresses applications- enabling fast and efficient collections and delivery.
Barcode scanning- real time data capture that reduces duplication of work, increases accuracy and ease of access.
Threat of cyber crime. 29

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Participants’ activity- Discussion Name the top 3 courier service providers in Kenya.
Give 3 reasons as to why the above companies are the best courier service providers in Kenya

( 20 minutes) 2/5/2018 Ianstar Ltd. Excellence. Delivered 30

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Topic 2: Basic concepts of courier business operations Elements of a courier operations strategy
Operations Network
Interconnection
Documentation and record keeping
Performance standards 2/5/2018 Ianstar Ltd. Excellence. Delivered 31

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i. Elements of courier a operations strategy 32

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ii. Operations Network Courier service providers use a hub and spoke network model. 2/5/2018 Ianstar Ltd. Excellence. Delivered 33

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Hub and spoke model cont’d The branches form the spokes in the network.
Large-sized players own and operate from many branches and service points.
Smaller players have a lower number of branches or an interconnection with an established operator. 2/5/2018 Ianstar Ltd. Excellence. Delivered 34

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Hub and spoke model cont’d The branch networks could be owned or outsourced i.e. a pharmacy acting as a drop-off point.
Investments in a network are required to be made in terms of facilities, equipment, labor, fleet and information technology. 2/5/2018 Ianstar Ltd. Excellence. Delivered 35

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The Courier Hub The central part of the wheel where the spokes come together
Strategically located facility where a courier company's major facilities and operations are housed, and where most of its scheduled fleet originate from or terminate at. 2/5/2018 Ianstar Ltd. Excellence. Delivered 36

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Question How does the hub and spoke model differ from point-to-point or direct-route operations? 2/5/2018 Ianstar Ltd. Excellence. Delivered 37

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Characteristics of the hub- and- spoke network model Detailed planning and coordination required
Cut-off Times along with limited sorting time
Labour-intensive environment
Highly sensitive (wrong sorting generates multiple problems)
Continuous operations at the hub e.g. administrative, customer service
Capacity management during peak & non-peak hours 2/5/2018 Ianstar Ltd. Excellence. Delivered 38

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Advantages of the Hub-and-Spoke network model Provision of express courier services at minimum cost
Efficient sorting: small number of sorting centers
Time accuracy
Easy incorporation of new points in the network
Reduction of long-distance transportation 2/5/2018 Ianstar Ltd. Excellence. Delivered 39

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Performance of the operations network At the highest level, the performance of a courier network should be evaluated along two dimensions:
Meeting customer needs- delivering value
The cost of meeting customer needs- to ensure profitability 2/5/2018 Ianstar Ltd. Excellence. Delivered 40

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iii. Interconnection A tie- up of an operational nature between courier businesses.
The tie- ups help in extending the geographical reach of a courier business.
These tie- ups are largely on a non- exclusive basis.
An example: tie- ups between international operators and national operators. 2/5/2018 Ianstar Ltd. Excellence. Delivered 41

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iv. Documentation and record keeping Documentation process is manual, semi- automated or automated.
Archive- collection of utilized documents over time. This is either in hard copy or soft copy formats.

Waybill- It is a document used by a courier company giving details and instructions relating to the courier item in reference. 2/5/2018 Ianstar Ltd. Excellence. Delivered 42

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Cont’d Some companies use alternative documents for the same purpose e.g. consignment notes, collection notes and dispatch notes. PCK to outline their process documents
The consignees sign on the waybill upon receipt of the courier item, indicating the name of recipient, date and time of receipt. This piece of information is known as the proof of delivery. 2/5/2018 Ianstar Ltd. Excellence. Delivered 43

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Cont’d Manifest- A document that serves as a tally- sheet, giving a detailed summary of all courier way bills issued by a courier company for a particular vehicle, vessel or journey.
It contains all the details of the number of courier items exchanged.
Invoice/ Cash receipt- Used to indicate the price of the courier service offered. 2/5/2018 Ianstar Ltd. Excellence. Delivered 44

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Dead weight limit Every country, region or area has its own definition of courier package dead weight limit.
In Kenya, the dead weight limit for courier service is 30kg per package. 2/5/2018 Ianstar Ltd. Excellence. Delivered 45

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v. Performance standards Observable behaviors and actions which explain how the job is to be done, plus the results that are expected for satisfactory job performance. 2/5/2018 Ianstar Ltd. Excellence. Delivered 46

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Standards cont’d PCK and private courier companies are required to comply with operational standards defined by the regulator.
The market also has industry standards based on the competitive environment.
The third set of standards are customized and based on service level agreements with customers. 47

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Standards cont’d The quality of service standards by CA range from J, J+1...J+5 for national deliveries.
For international deliveries, courier companies define their delivery standards.
CA monitors and tracks quality of service performance through compliance returns filed by the courier operators. 2/5/2018 Ianstar Ltd. Excellence. Delivered 48

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Participant activity Discuss:

Terms and conditions of courier service provision
Compensation policies 2/5/2018 Ianstar Ltd. Excellence. Delivered 49

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Summary- end to end courier service management Bookings- coordination
Courier item pickup with an option of packaging
Document digitization, filing and recovery
Data management
Fleet routing and scheduling
Sorting and distribution
Supervision and reporting.
Returns and disposal management 2/5/2018 Ianstar Ltd. Excellence. Delivered 50

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Topic 3. Marketing and selling courier services Definition: Marketing
It is the process of reaching, informing and educating your customers and prospects on why they should choose your courier service over your competitors’ 2/5/2018 Ianstar Ltd. Excellence. Delivered 51

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Marketing cont’d It is geared towards creating awareness.
Marketers design and provide information (a message) about the courier company for access by customers through different channels e.g. TV, print, Radio, billboards, online, social networks, internet and mobile phones. 2/5/2018 Ianstar Ltd. Excellence. Delivered 52

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The 7Ps of marketing This includes:
Creating the product or service concept,
Setting the price
Promoting the service
Moving it to the right place.
Additional P’s- process, physical evidence and people 2/5/2018 Ianstar Ltd. Excellence. Delivered 53

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A Marketing plan A marketing plan is a detailed document that outlines a company's marketing efforts for the coming year.
It describes business activities involved in accomplishing specific marketing objectives within a set time frame.
A marketing plan should always have a situation analysis, marketing strategy, sales forecast, and expense budget. 2/5/2018 Ianstar Ltd. Excellence. Delivered 54

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Purpose of a marketing plan The purpose of a marketing plan is to clearly show what steps or actions will be taken to achieve the plan goals.
For example, a marketing plan might have a strategy to increase the organization's market share by 5%. 2/5/2018 Ianstar Ltd. Excellence. Delivered 55

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Elements of a successful courier services marketing strategy Identifying your target market
Superior brand
Quality services
Professional staff
Promoting the product; courier service
Convenience
Customer focused process Ianstar Ltd. Excellence. Delivered 56

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Cont’d Customer focused process
Competitive pricing; pricing strategy
Business intelligence; analyzing competition and market research
Positioning
A budget
Linked with the overall company strategy. 2/5/2018 Ianstar Ltd. Excellence. Delivered 57

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Branding Brand- A name, term, sign symbol (or a combination of these) that identifies and differentiates an organization; the courier service business
A brand image is developed over time and is authenticated through a customer’s direct experience 2/5/2018 Ianstar Ltd. Excellence. Delivered 58

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Aspects of brand identity Physical aspect- logo, color scheme, packaging, and the online communities
Personality- the character of the brand i.e. how it communicates with the outside world. This might be expressed in a certain writing style or voice, design style, color scheme, and even by way of celebrity endorsements. 2/5/2018 Ianstar Ltd. Excellence. Delivered 59

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Branding cont’d Culture- the principles on which a brand is based. Coca-Cola's culture is based around socializing and sharing.
Relationship that a brand symbolizes e.g. between businesses or customers.
Reflection of the consumer e.g. banks, diplomats, hotels, hospitals, etc 2/5/2018 Ianstar Ltd. Excellence. Delivered 60

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Sample brands 2/5/2018 Ianstar Ltd. Excellence. Delivered 61

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Focus areas in marketing courier services Promotional and CSR activities- awareness creation, remind and persuade clients to buy from your company
Market share, customer loyalty, image
Pricing- discrimination strategy; different prices for courier services; different geographical areas, customers, transit and conveyance times, categories of services. Relationship: cost vs. price 2/5/2018 Ianstar Ltd. Excellence. Delivered 62

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Marketing focus areas contd’ Service areas- capabilities, reliability, timeliness, convenience, value adds,
Data collection, analysis, presentation, mining and warehousing and application of market research results.
Targets vs. Return on Investment 2/5/2018 Ianstar Ltd. Excellence. Delivered 63

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Selling courier services Definition: Sales
Activities undertaken (what you do) in order to close a deal and get a signed agreement or contract.
It involves conversion of prospects to loyal customers of your company’s service. 2/5/2018 Ianstar Ltd. Excellence. Delivered 64

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Sales plan A sales plan is a strategy that sets out sales targets and tactics for your business, and identifies the steps you will take to meet your targets.
A sales plan will help a company to choose sales strategies that are best suited to its target market. 2/5/2018 Ianstar Ltd. Excellence. Delivered 65

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Cont’d A sales strategy consists of a plan that positions a company's brand or product to gain a competitive advantage. 2/5/2018 Ianstar Ltd. Excellence. Delivered 66

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Sales process A sales process is a systematic, repeatable series of steps that map out and track interaction with prospects from their first point of engagement with your business through to a close. 2/5/2018 Ianstar Ltd. Excellence. Delivered 67

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Sales activities Setting goals and quotas.
Building a sales plan
Prospecting and lead generation.
Selecting a sales approach- influence customers to switch courier service providers.
Presentation on the benefits and value of the company’s courier services to the customer. 68

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Sales activities cont’d Closing deals
Demand forecasting
Sales team training, provision of tools and supplies and effective monitoring.
Sales team retention- compensation of sales personnel; remuneration, incentives,
Key account management. 69

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Key account management The individual approach sales people use to create long lasting business relationships with their customers.
Key account management responsibilities: 2/5/2018 Ianstar Ltd. Excellence. Delivered 70

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Benefits of key account management Targeted relationship management for clients with volumes
Provide clients with a single point of contact; transact seamlessly
Helps build relevant expertise to serve the customers. 2/5/2018 Ianstar Ltd. Excellence. Delivered 71

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Note on Sales vs. marketing Sales refers to the short term need to close a sale, get an agreement signed, or ultimately do what needs to be done to sell
Marketing is a longer term concept than sales and relates to forward looking strategies to understand customer needs, influence customer perceptions, and identify how a company can capitalize on that.
The end product of a marketing process is a sale.
A carefully crafted combination of marketing and sales is vital for business growth. 2/5/2018 Ianstar Ltd. Excellence. Delivered 72

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Competition Can have both positive and negative effect’s on the courier company’s market opportunity
Competitors use different strategies and it is impossible to deal with a competitor whose competitive strategies you do not know.
The courier industry has more than 100 active operators; each company has at least 100 competitors! 73

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Competitor analysis Name and brand.
Location and network.
Size and number of years in operation.
Ownership; local, multi national, foreign.
Services offered and Service standards.
Costs and Prices.
Revenue turnover.
Strengths and weaknesses of competitors. 74

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Types of customers for courier services Individuals- Retail customers
Corporate customers- profit making and not- for- profit organizations
Government

Terms of service: Cash or credit/ accounts 2/5/2018 Ianstar Ltd. Excellence. Delivered 75

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Customer expectations On time, in full and error free collections and deliveries.
Proper handling and storage of courier items
Convenience and accessibility- office locations and outlets, network capacity and routing
Accurate documentation- waybills, invoices, quotations, packing lists, delivery notes.
Timely updates- tracking; different platforms. 76

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Customer expectations contd… 6. Prompt resolution of queries, complaints and discrepancies.
Competitive prices and alternative payment platforms.
Safety and security of their letters and parcels, courier service provider premises, staff, fleet and systems.
Compliant service providers- risk management, fair and ethical trade practices
Continuous engagement- pre, transaction and post-transaction. 77

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Customer touch points Touch points are contact points through which customers and businesses engage to exchange information, provide service, or handle transactions.
Website- static or interactive
Telephone- fixed& mobile lines
Emails
Direct visits
Mobile and desktop applications- e portals,
Social media
CRM systems 78

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Participant activity In groups of 5, identify the challenges experienced by courier companies in marketing and selling their services.

Discussion time: 30 minutes
Presentation time: 20 minutes 2/5/2018 Ianstar Ltd. Excellence. Delivered 79

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Topic 4: Support functions to courier operations Their performance implies excellence or failure in the operations function. 2/5/2018 Ianstar Ltd. Excellence. Delivered 80

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1. Customer service/ customer experience management It involves understanding the customer’s courier service need and requirements, provision of quality services, real time customer updates, continuous communication and prompt resolution of queries and complaints on delays, losses/ theft and damages when they occur.
It has an impact on customer satisfaction. 2/5/2018 Ianstar Ltd. Excellence. Delivered 81

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What tracking information do customers expect to see? The complete courier item journey 82

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Confidence check Rate your courier firm’s customer service
1. Poor 2. Average 3. Excellent 4. Awesome
(up to 49%) (50- 75%) (76%- 90%) (above 90%) ( 2/5/2018 83 Ianstar Ltd. Excellence. Delivered

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Support functions cont’d 2. Customs clearance – staff experience, finance procedures and controls, internal system capabilities e.g. manifesting, IDF, entry declaration and port operations are fundamental aspects of on time customs clearance.
3. Procurement- timely acquisition of equipment, supplies, premises, goods, services and works that facilitate smooth operations 84

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Support functions cont’d 4. Warehouse or hub management – security, proper handling and storage of courier items in transit or awaiting delivery. Goods should be delivered in good condition. 85

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Support functions cont’d 5. Human resources- organizational structure, individual and organizational culture, employee skills, knowledge, abilities and experience in provision of courier services have an impact on the service levels offered to customers.
Employee welfare management Key areas Work hours, rest time/ off days, leave, training, motivation and compensation. Happy employees work harder! 86

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Human capital management Principal focus areas:
Recruitment.
Induction and orientation.
Performance measurement – systems, tools and metrics, best practice and benchmarking
Termination of employment (firing process).
Disciplinary procedure. 87

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Cont’d Grievance procedure
Training and development
Compensation and benefits policy.
Information technology in HR
External Stakeholder management- trade unions, labour law enforcement 88

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Participant activity What are the strategies used to retain staff in the courier industry? 2/5/2018 89 Ianstar Ltd. Excellence. Delivered

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Combating postal crime CCTV and 24 hour guarding of courier facilities, with controlled access into operational areas.
Metal detectors and screening of courier items, customers and employees.
Secure and secluded storage areas for high value courier items.
Staff training and accurate record keeping
Automating the courier process 90

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Support functions cont’d 6. Quality management
Involves development and implementation of policies, processes and procedures for planning and execution of courier services that consistently meet customer requirements and enhance satisfaction.
Key areas are staff involvement and continuous improvement. 2/5/2018 Ianstar Ltd. Excellence. Delivered 91

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Cont’d 7. Information technology- capabilities, creativity and innovation in providing solutions to customers’ courier service needs e.g. automation of sorting centers, optimizing routing and scheduling of fleet in the light of poor road infrastructure, heavy traffic congestion, poor national addressing system and high customer expectations. 2/5/2018 Ianstar Ltd. Excellence. Delivered 92

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Cont’d 8. Health and safety policy development and implementation
Guideline: Objectives, people and their duties, systems and procedures, safety training, tools and equipment, safety wear, safe facilities, first aid and emergency procedures, risk assessment, insurance covers and maintenance of records. 2/5/2018 Ianstar Ltd. Excellence. Delivered 93

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Cont’d 9. Finance function- cost management
It involves planning and controlling of the budget for the courier business.
Cost management activities include: estimation, allocation and control of costs in running the courier business. Expenses should be documented and tracked and actual costs must be compared with predicted costs to reduce chances of going over budget. 2/5/2018 Ianstar Ltd. Excellence. Delivered 94

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Cost management cont’d Three stages to successful cost management: 95

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Types of costs Facility acquisition, leasing or construction.
Facility furnishing and maintenance.
Machinery, tools, equipment acquisition and maintenance costs.
Fleet acquisition, leasing and maintenance costs.
Utility and energy costs.
License fees and levies.
Labour costs.
Information systems. 2/5/2018 Ianstar Ltd. Excellence. Delivered 96

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Topic 5: Performance measurement What are performance measures?
A performance measure is a numeric description of a business’ work and the results of that work.
Performance measures are based on data, and tell a story about whether a business or activity is achieving its objectives and if progress is being made toward attaining policy or organizational goals. 2/5/2018 Ianstar Ltd. Excellence. Delivered 97

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Cont’d Performance measures demonstrate how well the courier business is doing its job of meeting customer needs, goals and expectations of the courier service.
Measuring performance is a way to gauge the impacts of the courier organization’s decision making process
Performance measures aim to answer questions about whether the performance of the courier business is getting better or worse over time.
There are financial and non- financial performance measures. 2/5/2018 Ianstar Ltd. Excellence. Delivered 98

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Financial performance measures Financial performance measures are used to monitor the inflows (revenue) and outflows (costs) and the overall management of money in the business. They can be used to assess the overall performance of the business.
These measures focus on information available from the Statement of profit/loss and Statement of financial position of a business. 2/5/2018 Ianstar Ltd. Excellence. Delivered 99

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Performance measurement Performance measurement is the monitoring of
budgets or targets against actual results to establish how well the business and it's employees are functioning as a whole and as individuals.
Performance measurements can relate to short
term objectives (e.g. cost control) or long term
measures (e.g. customer satisfaction). 2/5/2018 Ianstar Ltd. Excellence. Delivered 100

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Suitable performance measures include: Strategic Measurement of the overall profitability of the courier business and/or the return made on investing surplus cash. Return on investment (ROI), return on sales produced monthly
Tactical Comparison of the actual costs and revenues with the budgeted costs and revenues for the courier business. Actual profit compared to budget produced monthly. 2/5/2018 Ianstar Ltd. Excellence. Delivered 101

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Cont’d 3. Operational
Measurement of day to day targets such as meeting collection and delivery requirements and lead times, volumes handled, meeting sales targets, capacity utilization, number of missed collections and deliveries, number of customer complaints, turnaround times at the hub, branches and outlets, departure times and arrival times, etc 2/5/2018 Ianstar Ltd. Excellence. Delivered 102

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Critical success factors (CSFs) CSFs are the essential areas of that must be excelled in if the mission, objectives and goals of the courier business are to be achieved.
CSFs act as a common point of reference to measure the success of the courier business and they help everyone in the team to know exactly what they need to do to ensure the courier business achieves its goals. 2/5/2018 Ianstar Ltd. Excellence. Delivered 103

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CSFs cont’d The following table shows a number of performance indicators grouped against CSFs.
Each courier organization will formulate its own, specific KPIs which best suit its business. 2/5/2018 Ianstar Ltd. Excellence. Delivered 104

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CSFs and KPIs 2/5/2018 Ianstar Ltd. Excellence. Delivered 105

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CSFs and KPIs cont’d 2/5/2018 Ianstar Ltd. Excellence. Delivered 106

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Measuring profitability Three ratios may be used:
Return on capital employed (ROCE) =
operating profit ÷ (noncurrent liabilities + total equity) %
Return on sales (ROS) = operating profit ÷ revenue %
Gross margin = gross profit ÷ revenue %

Operating profit is profit before interest and tax and after non-operational overheads have been charged. 2/5/2018 Ianstar Ltd. Excellence. Delivered 107

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Measuring liquidity A business can be profitable but at the same time encounter cash flow problems. Cash at the bank and profit are not the same thing.
Current ratio= current assets / current liabilities 2/5/2018 Ianstar Ltd. Excellence. Delivered 108

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Cont’d The ratio measures the company's ability to meet its short term liabilities due within one year with the current assets that should be converted into cash within one year. A ratio in excess of 1 is desirable but the expected ratio varies depending on the organization. 2/5/2018 Ianstar Ltd. Excellence. Delivered 109

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Cont’d A decrease in the ratio year on year or a figure that is below the industry average could indicate liquidity problems.
The company should take steps to improve liquidity, e.g. by paying payables as they fall due or by better management of receivables in order to convert the money owed into cash more efficiently. 2/5/2018 Ianstar Ltd. Excellence. Delivered 110

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Cont’d Equally a high ratio could indicate that any surplus cash is not being made efficient use of.
Cash does not provide a return so it should be reinvested in the business. 2/5/2018 Ianstar Ltd. Excellence. Delivered 111

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Measuring risk It is also important for a company to manage its risk. How 'geared' a business is can be calculated to assess financial risk. Gearing indicates how well a business will be able to meet its long term debts.
This ratio calculates the relationship between borrowed capital (debt) & owner's capital (equity): Capital gearing = noncurrent liabilities (debt) ÷ ordinary shareholders funds (equity) % or Capital gearing = noncurrent liabilities (debt) ÷ (noncurrent liabilities + ordinary shareholders funds (debt + equity)) % 2/5/2018 Ianstar Ltd. Excellence. Delivered 112

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Capital gearing (leverage) This ratio calculates the relationship between borrowed capital (debt) & owner's capital (equity):
= noncurrent liabilities (debt) ÷ ordinary shareholders funds (equity) % OR
= noncurrent liabilities (debt) ÷ (noncurrent liabilities + ordinary shareholders funds (debt + equity))% 2/5/2018 Ianstar Ltd. Excellence. Delivered 113

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Measuring risk cont’d The level of gearing indicates how much a business relies on long term debt finance. The higher the percentage, the higher the level of risk as any debt finance must be paid back through interest and capital repayments. There is a legal obligation to make these payments.
Repayment of equity finance is through dividends and there is no legal obligation to make these payments to shareholders. There is no 'correct' level of gearing but if debt exceeds equity then gearing is too high. 2/5/2018 Ianstar Ltd. Excellence. Delivered 114

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Topic 6: Economic and social value of the courier industry The courier industry in Kenya drives economic and social progress:
It facilitates trade by providing access to domestic and international markets
It improves business operations by offering fast, timely and efficient collections and deliveries
It provides employment.
It is a source of income to +100 investors 2/5/2018 Ianstar Ltd. Excellence. Delivered 115

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Cont’d 5. It facilitates communication and connects people, countries and cultures.
6. Contributes to sustainable development by generating economic growth and increasing tax revenues
7. Facilitates the delivery of emergency and humanitarian aid relief ;Swift delivery of medical supplies 2/5/2018 Ianstar Ltd. Excellence. Delivered 116

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Prospects for the courier industry in Kenya Despite these challenges, there are many prospects and opportunities that would abound should the industry/ courier operators overcome these challenges. 2/5/2018 Ianstar Ltd. Excellence. Delivered 117

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Participants activity In groups of 5, identify the prospects and opportunities for the courier operators in Kenya. 2/5/2018 Ianstar Ltd. Excellence. Delivered 118

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7. Strategic to address the challenges in the courier industry in Kenya Introduction of new services e.g. night deliveries, weekend shopping.
Vertical integration- take on activities done by suppliers or customers up and down the chain e.g. clearing and forwarding, warehousing, distribution.
Geographical expansion into new markets- locally, regionally and internationally.
Diversification- venturing into other business sectors e.g. real estate, freight forwarding, transport 2/5/2018 Ianstar Ltd. Excellence. Delivered 119

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Strategies cont’d Embracing IT capabilities and IT innovations. e.g. alternative service payment platforms, mobile tracking, in- hub bar code scanning,
Resourcing strategies
Ability to pull a range of the courier firm’s resources and competences together both inside the organization and in the wider value chain to create a competitive advantage e.g. low prices, staff retention 2/5/2018 Ianstar Ltd. Excellence. Delivered 120

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Strategies cont’d 7. InterconnectionTo increase domestic, regional and international network coverage, hence create additional revenue generating streams and optimal capacity utilization.
8. Horizontal integration-based on growth through the acquisition of one or more similar firms e.g. international courier operator acquiring a domestic operator 2/5/2018 Ianstar Ltd. Excellence. Delivered 121

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In conclusion A look back at the topics covered indicate that the courier industry is growing in significance and changing in the face of challenges and drivers of change.
There are issues that are achieving greater importance – sustainability, customer satisfaction, governance and management.
As the courier industry grows and courier services achieve greater importance, conventional approaches to running the courier businesses that focus on a narrow range of factors have to be replaced by more nuanced analysis and solutions. 2/5/2018 Ianstar Ltd. Excellence. Delivered 122

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Expectations Tree Review 2/5/2018 123

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Participant feedback and T.E. Participants to provide feedback on the course and suggest any other areas of interest in training.
** Fill in the training evaluation form.
Vote of thanks

THE END!!! 2/5/2018 124

POSTAL AND COURIER TRAINING RUNNING A COURIER

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POSTAL AND COURIER TRAINING RUNNING A COURIER

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