Recommendations to improve servicequality for imported cargo at cfswarehouse at greenport viconship

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MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: TRAN THI DUC HANH
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
RECOMMENDATIONS TO IMPROVE SERVICE QUALITY
FOR IMPORTED CARGO AT CFS WAREHOUSE
AT GREENPORT - VICONSHIP
HAI PHONG – 2015
MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING
VIETNAM MARITIME UNIVERSITY
STUDENT NAME: TRAN THI DUC HANH
CLASS: GMA02
DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS
RECOMMENDATIONS TO IMPROVE SERVICE QUALITY
FOR IMPORTED CARGO AT CFS WAREHOUSE
AT GREENPORT - VICONSHIP
Supervisor: Vu Thi Thu Hang
Division: Global Studies and Maritime Affairs
Faculty: Economics
HAI PHONG – 2015
Recommendations to improve service quality for imported cargo at CFS warehouse at GREENPORT
- VICONSHIP
PREFACE
The work outlined in this dissertation was carried out in the Warehouse Department,
Green Port, VICONSHIP, where I undertook my internship, over the period from
August 2015 to the end of September 2015.
I declare that this report is my own unaided work. It has not been submitted before.
If violated, I am solely responsible for and bear the punishments of the Institution and
University.
Student Name and Signature
Tran ThiDucHanh
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ACKNOWLEGEMENT
Firstly, I would like to express my sincere gratitude to my supervisor Ms. Vu Thi Thu
Hang for her continuous support, patience, motivation, and immense knowledge. Her
guidance was very helpful for me during the time of research and writing of this
thesis.
My sincere thanks also go to Ms. Tran Phuong Anh, Manager of Warehouse
Department at Greenport – VICONSHIP, who provided me an opportunity to join
their team as intern, and Ms. Nguyen Thi Ngoc Thuy, my instructor at the company,
who thoroughly guided me during my internship. Without they precious support it
would not be possible for me to conduct this research.
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TABLE OF CONTENTS
Preface.............................................................................................................................i
Acknowledgement..........................................................................................................ii
Table of Contents..........................................................................................................iii
List of Symbols, Abbreviations......................................................................................v
List of Tables and Graphs.............................................................................................vi
List of Figures..............................................................................................................vii
INTRODUCTION........................................................................................................1
Necessity ............................................................................................................1
Research object ..................................................................................................1
Research methodology........................................................................................1
Research scope ...................................................................................................1
Research findings ...............................................................................................1
CHAPTER 1: LITERATURE REVIEW...................................................................2
1.1. CFS warehouse....................................................................................................2
1.1.1. Definition of CFS warehouse........................................................................2
1.1.2. Services at CFS warehouse ...........................................................................2
1.2. Service quality ....................................................................................................2
1.2.1. Definition of service quality..........................................................................2
1.2.2. Tools to evaluate service quality...................................................................3
1.2.3. Evaluation methodology................................................................................6
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Recommendations to improve service quality for imported cargo at CFS warehouse at GREENPORT
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CHAPTER2: EVALUATION OF SERVICE QUALITY OF CFS WAREHOUSE
AT GREENPORT........................................................................................................9
2.1. Introduction about the company..........................................................................9
2.1.1. Introduction about VICONSHIP ..................................................................9
2.1.2. Introduction about the subsidiary of the field trip .....................................13
2.1.3. Business fields of CFS warehouse at GREENPORT.................................16
2.1.4. Detailed process of unstuffing imported cargo at CFS warehouse.............16
2.2. Result of evaluation...........................................................................................22
2.2.1. Overall information about sample..............................................................22
2.2.2. Analyzing mean expectation score.............................................................22
2.2.3. Analyzing mean perception score...............................................................26
2.2.4. Analyzing gap score between expectation and perception.........................29
CHAPTER 3: RECOMMENDATIONS TO IMPROVE CFS WAREHOUSE
SERVICE QUALITY.................................................................................................32
3.1. Identifying factors that need to be improved....................................................32
3.2. Recommendations to improve service quality at Greenport CFS warehouse...33
3.2.1. Important factors that need to be improved instantly.................................33
3.2.2. Other factors that should be improved in the long-term.............................36
CONCLUSION...........................................................................................................38
Reference .....................................................................................................................39
Appendices...................................................................................................................40
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LIST OF ABBREVIATIONS
CFS Container Freight Station
IPA Important – Performance Analysis
D/O Delivery Order
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LIST OF TABLES
TABLE 1: List of variables............................................................................................6
TABLE 2: Greenport Facilities....................................................................................13
TABLE 3: Distribution of respondent..........................................................................22
TABLE 4: Summary of the customers’ expectation score...........................................22
TABLE 5: Summary of the customers’ perception score............................................26
TABLE 6: Summary of gap score between expectation and perception.....................29
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LIST OF FIGURES
FIGURE 1: Important – Performance Matrix................................................................6
FIGURE 2: Organization chart of VICONSHIP..........................................................10
FIGURE 3: Growth of revenue of VICONSHIP from 2009 to 2014...........................12
FIGURE 4: Profit after tax of VICONSHIP from 2009 to 2014..................................12
FIGURE 5: GREENPORT general terminal layout ....................................................13
FIGURE 6: Racking system at Greenport CFS warehouse..........................................15
FIGURE 7: General unstuffing process at GREENPORT CFS warehouse.................16
FIGURE 9: Distribution of the expectation scores......................................................25
FIGURE 10: Distribution of the perception scores......................................................28
FIGURE 11: Distribution of variables in the I-P matrix..............................................32
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INTRODUCTION
Necessity
Together with shipping lines, consolidators and forwarders, CFS warehouses play
the role as an essential part of the transporting network for import and export
cargoes. Regarding the service quality of CFS warehouses in the city of Haiphong,
Greenport CFS warehouse is assumed to be in the top positions. However, there has
not been any official research before which measured this level of service quality.
Therefore, this research was conducted in order to find out how the Greenport CFS
warehouse is actually providing its service and what the warehouse manager board
can do to further improve the warehouse service.
Research object
The focus of this dissertation is to evaluate the quality of service provided at CFS
warehouse at Greenport – VICONSHIP and then figure out several possible
recommendations to improve the situation.
Research methodology
Questionnaires were sent out to customers to collect data for evaluation. Then,
RATER model and Importance – Performance matrix, along with data analysis,
were used to measure service quality at Greenport CFS warehouse.
Research scope
The research was carried out at Greenport CFS warehouse in a period of more than
one month from August 2015 to the end of September 2015. The data used for
evaluating the service quality of the warehouse was also collected in this period of
time.
Research findings
It was found that the service quality at Greenport CFS warehouse has not met the
expectation of the customers, since the overall perception score is lower than the
overall expectation score. Through evaluation process, five factors that need to be
improved have been determined. At the end of the research, several
recommendations for each of the abovementioned five factors were given.
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CHAPTER 1: LITERATURE REVIEW
1.1. CFS warehouse
1.1.1. Definition of CFS warehouse
In general, CFS (Container Freight Station) warehouse is the location
designated to handle consolidated shipments for both export and import cargo. As
the global trading and transportation are becoming more convenient, nowadays,
small-scale merchants can also easily take part in export and import activities.
Because of the growing demand for consolidated shipments, CFS services were
born to facilitate the process and also help those small shippers save transportation
costs.
1.1.2. Services at CFS warehouse
For export cargo, CFS warehouse is the place where loose cargoes from
various shippers are collected, sorted, and then packed into shipping container.
Regarding import cargo, CFS warehouse takes responsibility for unloading
and dividing containerized cargoes into smaller shipments for different consignees
at discharge place. (Flexport, 2014)
1.2. Service quality
1.2.1. Service quality definition
Service quality has long been an attractive issue with researchers, as
countless studies have been done about this topic. The 25-year history of quality
movement has been summarized in an article by Dahlgaard-Park el al (2013),
covering all published under the subject of Total Quality Management (TQM),
Business Excellence (BE), quality tools, techniques as well as core
values/principles.
Understanding the concept of service quality is essential for companies;
because it enables them to improve their service and therefore become more
competitive. However, most services are intangible as they are performance, not
physical objects, so it is difficult to measure the service quality precisely. Due to the
lack of tangible cues on which to evaluate quality, it is necessary to apply a new
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concept of “customers’ satisfaction”. Customer satisfaction is a measure of how
well a product or service provided by a company can satisfy their customers’
expectation (Nigel Hill, 2003). In order to satisfy the customers, companies need to
figure out what requirements their customers are looking for, and find the way to
meet those requirements. Therefore, it can be said that customer satisfaction is a
relative concept, not a fixed one. To measure the level of satisfaction, it is necessary
to calculate both sides of the equation. It is necessary to determine customers’
expectation through a set of specific criteria, together with evaluating companies’
performance, and then compare these two factors to see how well they match.
There are several models used to measure service quality, in which the most
common one is SERVQUAL (Parasuraman et al, 1985, 1988). Theoretically,
SERVQUAL is based on analyzing the gap between customers’ expectations and
their perceptions of provided service. In other words, this model is a tool to measure
satisfaction level of customers towards a specific service.
1.2.2. Tools to evaluate service quality
a) RATER model
RATER is a model for measuring service quality developed by A.
Parasuraman, Valarie ZeithamI, and Leonard Berry. Actually, RATER is the
shorten form of the SERVQUAL model.
Initially, SERVQUAL was introduced in 1988 with 10 quality criteria
(Parasuraman et al, 1988), namely:
 Reliability: involves consistency of performance and dependability.
 Responsiveness: concern the willingness and readiness of employees to
provide service and involves timeliness of service.
 Competence: means possession of the required skills and knowledge to
perform the knowledge.
 Accessibility: involves approachability and ease of contact.
 Courtesy: involves politeness, respect, consideration and friendliness of
contact personnel.
 Communication: means keeping customers informed in language they can
understand and listening to them.
 Credibility: involves trustworthiness, believability, honesty.
 Security: is the freedom from danger, risk or doubt.
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 Understanding/ knowing the customer: involves making the effort to
understand the customers’ needs.
 Tangibility: includes the physical evidence of the service.
Later on, researchers have integrated the above-mentioned ten dimensions
into only five ones – or RATER model which includes:
 Reliability: Reliability refers to the ability to perform the promised service
dependably and accurately, including
- Timeliness
- Consistency/Regularity
- Accuracy
 Assurance: relates to the knowledge and courtesy of staff; their ability to
inspire trust and confidence. Assurance refers to:
- Staff competence
- Respect for stakeholders
- Credibility
- Probity and confidentiality
- Safety and security
 Tangibles: involves the physical representations or images of your service,
including:
- Physical facilities
- Equipment
- Technology
- Employees
- Communication materials
 Empathy: The caring individualized attention you provide your stakeholders.
Empathy refers to:
- Access (to staff, services, information)
- Communication (clear, appropriate, timely)
- Understanding the stakeholder
- Services appropriate for stakeholders’ needs
- Individualized attention
 Responsiveness: Your willingness to help customers and to provide prompt
service. Responsiveness refers to:
- Willingness to help
- Prompt attention to requests, questions
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- Problem resolution
- Complaint handling
- Flexibility
In this research, RATER model was adopted for evaluating service quality at
Greenport CFS warehouse.
b) Important – Performance matrix
Important – Performance Analysis (IPA), introduced by Martilla and James
(1977) is a well-known tool which has been applied widely to measure client
satisfaction with a product or service. IPA provides service managers with valuable
information for both satisfaction measurement and the efficient allocation of
resources, since IPA examines not only the performance of an item, but also the
importance of that item as a determining factor in satisfaction to the respondent.
The two dimensional IPA model is divided into four quadrants with
performance on the x-axis and importance on the y-axis. As a result of this, four
quadrants namely Concentrate Here, Keep up the Good Work, Low Priority, and
Possible Overkill are created.
 Quadrant I (High Importance/Low Performance) is labeled Concentrate
Here. Attributes that fall into this quadrant represent key areas that need to
be improved with top priority.
 Quadrant II (High Importance/High Performance) is labeled Keep up the
good work. All attributes that fall into this quadrant are the strength and
pillar of the organizations, and they should be the pride of the organizations.
 Quadrant III (Low Importance/Low Performance) is labeled Low Priority.
Thus, any of the attributes that fall into this quadrant are not important and
pose no threat to the organizations.
 Quadrant IV (Low Importance/High Performance) is labeled as Possible
Overkill. It denotes attributes that are overly emphasized by the
organizations; therefore, organizations should reflect on these attributes,
instead of continuing to focus in this quadrant, they should allocate more
resources to deal with attributes that reside in quadrant I.
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Figure 1: Important – Performance Matrix
(Source: J. Martilla and J. James, Importance-performance analysis,
Journal of Marketing, vol. 41, no. 1, pp. 77-79, 1977)
With this matrix, warehouse managers are able to determine which factors
need to be concentrated on the most, and therefore can re-allocate the resources
more effectively.
1.2.3. Evaluation methodology
a) Method of data collection
This research used quantitative method for data collection. Two
questionnaire surveys were conducted for the customers to evaluate the quality of
the service they received at CFS warehouse of Greenport. The first questionnaire
involves the expectation of customers towards the services offered by Greenport
CFS warehouse, while the other questionnaire aims to assess their perception
toward performance of the warehouse. The questionnaires were pre-tested within a
small group of respondents to ensure clarity before officially sent out to
warehouse’s customers.
All the variables of the questionnaire are coded for later analysis, and are
shown in the following table:
Table 1. List of variables
No Research
Measurement items Code
. variables
1 Reliabilities The warehouse always provide fast service REL1
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2 The warehouse always provide services on time REL2
The warehouse always provide service in a
3 REL3
consistent manner
The warehouse always ensure safety and security
4 REL4
to our ships/shipments
The warehouse always produces error-free
5 REL5
invoice and related documents
The warehouse always offers competitive price
6 REL6
of service
The staffs in the warehouse always demonstrate
7 A1
good knowledge of our needs and requirements
Warehouse staffs have the ability to solve
8 A2
unexpected problem
The staffs have courtesy while working with
9 A3
customers
Assurance Information of customers is always kept
10 A4
confidential by Greenport CFS warehouse
The level of Information Communications
11 Technology applications in customer service at A5
the warehouse is comprehensive
The warehouse has sufficient equipments and
12 T1
facilities to handle cargoes
13 The staff are well dressed T2
Tangibles
The employees get sufficient support from
14 T3
company to do their jobs well
15 Costs of warehouse service are satisfactory T4
It is easy to contact and get access to the staff of
16 E1
Greenport CFS warehouse
The staff in the warehouse always demonstrate
good understanding of the needs and
17 E2
Empathy requirements of each customer and can give back
clear and appropriate responses
The warehouse always take good care of every
18 E3
customers without being partial
The staff in the warehouse always respond
19 RES1
quickly to any requests
Warehouse staffs can flexibly solve unexpected
20 RES2
problems for the benefits of the customers
Responsiveness
The warehouse always provide satisfactory
21 RES3
answers towards any complaint
The warehouse always collect feedbacks about
22 RES4
their services and reflect on their improvement
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(Source: author)
Respondents were asked to assess the quality of provided services by rating
from 1 to 5 for each statement describing the service quality factors. The point scale
being used to measure the attitude of respondent ranges from 1: ‘Totally disagree’
to 5: ‘Totally agree’.
The target population of this research included freight forwarders, shipping
lines and cargo owners which are all the frequent clients at Greenport CFS
warehouse. The questionnaires were directly given to a variety of individuals from
different companies who came to the warehouse to do business.
b) Method of data analysis
This research applied RATER model to measure the service quality that
Greenport CFS warehouse provided. To be more specific, after collecting back all
the survey questionnaires, mean score of each variable was calculated, and by
subtracting the expectation scores from the perception scores, the gap scores were
obtained.
Service Quality (Q) = Mean score of Perception (P) – Mean score of
Expectation (E).
If Q is a positive number, the warehouse is providing their service at higher
quality than being expected by the customers. In contrasts, in case Q is a negative
number, it means the expectation of the customers is not satisfied, and the
warehouse needs to improve their service quality.
Then, the research continued with Important – Performance matrix to
determine which factors need to be improved. Factors which fall into the Quadrant
1 of the matrix will be prioritized, as they are important factors and have decisive
influence on the satisfaction level of customers.
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CHAPTER 2: EVALUATION OF SERVICE QUALITY OF
CFS WAREHOUSE AT GREENPORT
2.1. Introduction about the company
2.1.1. Introduction about VICONSHIP
a) General information:
VIETNAM CONTAINER SHIPPING CORPORATION (VICONSHIP) is one
of leading Freight Forwarders and Shipping Agency Companies in Vietnam and has
been actively providing its services since 1985.
VICONSHIP has its own container terminal, warehouse, trucking lines for
container and conventional cargo moving services in the North, in the Central and
in the South of Vietnam. It provides complete facilities for all modes of cargo
service. Linking Shippers and Consignees with Owners is what they do best.
With well trained and experienced Management at Staff in shipping and
logistics, VICONSHIP has successfully applied Quality Management Systems
under International Standard ISO 9001-2000 and certified by SGS-UKAS since
May 2001.
With experience and good reputation in warehousing and terminal management,
VICONSHIP’S Container Terminal has been licensed as Custom Clearance Depot
by Vietnamese Government. Since September 10 th, 1999 Customs House has been
located and operating in VICONSHIP’S terminal. This Customs House controls
customs clearance for all kind of export and import goods via Haiphong.
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b) Organization and Personnel
Figure 2: Organization chart of VICONSHIP
(Source: viconship.com)
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 Supervisory Board:
Chief of Department Ms. Nguyen Thi Kim Nha
Members Mr. Nguyen Thi Minh Lan
Ms. Nguyen Thi Yen Ha
 Board of management:
Chairman of Board Mr. Nguyen Viet Hoa
Member of Board Mr. Nguyen Van Tien Ms. Hoang Thi Ha
Mr. Tran XuanBao Mr. Nguyen The Trong
Mr. Nguyen Viet Trung Mr. Nghiem Tuan Anh
Mr. Hoang TrongGiang Mr. Hoang Tien Luc
 Board of Director:
General Director Mr. Nguyen Van Tien
Finance Director Mr. Tran XuanBao
Technical Director Mr. Nguyen The Trong
c) Business status analysis
During the recent years, the business of VICONSHIP has always been
improved. According to the official website of the company, the business status is
showed in the following two charts.
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