TBS SCORE

Qixun Express Service Company
A Case Study
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China Post
Intra city Express Mail Service (EMS)
Inter city Service
International Service
China Post EMS Beijing Operation
23 Express routes to pick up and transport express and international mails.
Mails were collected at 11:30 A.M., 3:00 P.M. and 7:30 P:M
Intra city Express mails arriving at processing center were immediately unpacked, stored and repacked for delivery by special handlers
 Express Mail typically arrived the second day
 China Post’s independent intra city express service
 Competition with joint venture express service companies such as DHL-Sinotrans
• New entrants: limited to only few major cities
• Monopoly (before 1997)
• WTO Accession
• Growth in Chinese industry led to need for more postal service providers

Qixun Express Service Company
A Case Study
• Intra city express service required low level of investment
• 300-400 express service companies in Beijing alone
• Rate of delivery ( RMB 20, 15, 10, 8) with same day delivery commitment
• Ambiguity in Law

Qixun Express Service Company
A Case Study
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QES Overview
Intra city express delivery business in Beijing (1996)
Small investment and quick High Returns
QES Target Market were large business customers
QES endeavored to provide High Quality, fast and low cost service to its customers
Customer Segments
Individual characterized by limited volume and Dispersed locations
Small and medium sized business customers with documents and parcels as main items characterized by large volume but dispersed locations
 Large business customers with documents and parcels as main items characterized by very large volume and concentrated locations and destinations
• Services to large customers reduced pickup and delivery cost while ensuring delivery speed and quality
• QES big Customers included Motorola, HP, Agilent, SUN, Lenovo, Fesco and Neusoft
• These customers were clustered in China World Trade Centre and Zhonguancun

Qixun Express Service Company
A Case Study
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Service Speed (2-4 hours delivery) and service quality its top priorities
Customer based enlarged & business volume grew revenue increased from RMB
52000 – RMB200000 per year (1999 to two years time)
RMB 30,000 net profit per month
Head count increased from 32 to 118 ( 100 for service and 18 for management)
Processed 500 service calls and 700 pieces of express items

Qixun Express Service Company
A Case Study
QES Operation System
• Initially single route expanded to six branches at major office locations in Beijing along with a head office
• Head Office/ 3 telephone operators/ one general dispatcher
• Branch office/ 1 Supervisor/ two operators excluding Shangdi / Supervisor responsible for pickups and deliveries while took in the orders sent from Head office
• Number of couriers in each office varied with business volume. The largest one was
CWTC(30) Xihuan and Parkson (20 each), Other offices at Anzhen Plaza, Sanyuanqiao and
Shangdi ( totally about 30)
• QES Fixed Assets: Two mini vans, office and communication devices, vehicle for operations included three leased three wheel motor bikes, eight motorbikes for disable persons ,
Some bicycles ( RMB 80,000 after depreciation)
• Total Corporate Assets RMB 200,000
• No Liability

Qixun Express Service Company
A Case Study
Service Process and Deployment
• Telephone operator to Supervisor or General Dispatcher
• Supervisor, Metal Map, Location of couriers
• Decision to dispatch directly to customer or send it to appropriate branch office
Pickup
• Location of courier and use of pager ( Half an Hour)
Transfer
• Sorting at branch office or en route
• Timeliness of shuttle service
• Traffic jams, vehicle malfunction
• Two way shuttle between branch offices
• One hour for transfer
Delivery
• Use of motorbike or bicycle (typically half an hour for delivery)

Qixun Express Service Company
A Case Study
People Management
• Orientation Training (Obey orders, General Cleanliness etc)
• Business training ( Working with other employ, Learning Geography of Beijing)
• Rotation
• Commission based job

Qixun Express Service Company
A Case Study
Building a Countrywide Express Network
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Cooperating with other service providers in other cities
Agreements with 29 express service businesses or trucking companies

Qixun Express Service Company
A Case Study
Cooperating with an Online Book store
• Cooperation in logistics of books, videos, music, software and games
• Online Connection with the book store
Order Volume
• 700 (Beijing), 200-300 (shanghai), 200 from other places daily
Book Store Inventory
• Daily Transaction amount (RMB 110,000 with Beijing RMB 70000)
• RMB 5Million Tied up in inventory
• Daily operating revenue of RMB 100,000
• 50 Inventory days should be reduced to 7 inventory days
• Outsourcing the logistics to third party
• E-commerce Strategy desired by the book store customers

Qixun Express Service Company
A Case Study
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