freight project
TRANSCRIPT
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PROJECT REPORT ON
FREIGHT COST CONTROLLING &
PROCESS
(An analysis)
Submitted To:-Mr. Ajay Jain
HOD
Finance & Account Dept.
Project Guide:-
Mr. Sumesh Agarwal
Finance & Account Dept.
Submitted By:-
Sachin Kumar Gumber
PGDM- IVth Trimester
IILM-GSM Greater noida
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ACKNOWLEDGMENT
Exchange of ideas generated new objects to work in a better way. Whenever a
person is helped & cooperated by others, his heart is bound to pay gratitude &
obligation to them. During the making of this project I was helped by many
people. They motivated me & gave me valuable suggestion & guidance apart
from their cooperation to complete this project. I sincerely want to extend my
heartily thanks to all of them.
I deeply extend my gratitude &appreciation to Mr.Ajay Jain (H.O.D., Finance
& Accounts Dept., M&M Ltd.)For their encouragement & valuablesuggestions. I am also grateful to Mr. Sumesh Agarwal (Project guide) for their
constant guidance during my entire project work. I also express my sincere
thanks to Mr. V.K. Joshi, Mr. Susheel Bhatt, Mr. Nitin Saxena. who always
helped me to understand the concepts & aspects of industry & their dept.
I sincerely thanks to Mr.Sunit Joshi, Mr.Kavinder Singh, Mr.C.S. Pandey,
Mr. C.S. Bhatt, for their selfless support to carry out all the work.
I would like to thank Mahindra & Mahindra Ltd. who gave me wonderful
Opportunity to do my Industrial training at their industry.
A special thanks to 'GOD' for giving me confidence and strength to initiate this
venture.
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PART 1:- ORGANIZATIONAL PROFILE
1.1 History of Mahindra & Mahindra Ltd.
1.2 Overview of Mahindra Group
1.3 Company Profile
1.4 Core Purpose & Values
1.5 Various sectors of Mahindra Group
1.6 Board of Directors
1.7 Technology Used in Mahindra & Mahindra ltd.
1.8 Milestones & Awards
1.9 Corporate Social Responsibility
1.10 Introduction of Farm Equipment Sector
1.10(i) Products
1.11 About Rudrapur Plant
1.11 (i) Organization structure
1.11 (ii) Products
1.11 (iii) SWOT Analysis
1.12 Problems of Industry
1.13 Strategy of FES( M&M Ltd.) for F-09
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M&M FOUNDERS
The history of M&M starts in period of World War IInd, when two
brothers Mr. Jagdish Chandra Mahindra and Mr. Kailash Chandra
Mahindra envisioned a much greater role for themselves in the building
and growth of independent India, Mr. J.C. Mahindra was the advisor to
the government at that time and was first Indian to become the Iron and
Steel Controller of India, Mr. K.C. Mahindra was then the head of the
Indian Supply Mission to Washington, USA.
The Mahindra brothers left their flourishing career to become
entrepreneur give shape to their vision and create an organization to be
a strong pillar in the building and growth of Industrial India. The two
brother and Mr.Ghulam Mohammed formed the company, Mahindra &
Mohammed in 1945 to make general purpose utility vehicles for the
Indian market. M&M Ltd. was incorporated on 2nd October 1945 initially
it was Mahindra & Mohammed Ltd., whose name was changed on 13th
Jan 1948 to Mahindra & Mahindra Ltd. as Mr. G. Mohammed went to
Pakistan to become First Finance Minister of Pakistan.
M&M becomes Public Ltd. Company on 15th June 1955 when it issued
its first public share. These shares were listed on the BSEin 1956.
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THE MAHINDRA GROUP- AN OVERVIEW
The US $6.7 billion Mahindra Group is among the top 10 industrial
houses in India. Mahindra & Mahindra is the only Indian company
among the top tractor brands in the World. Mahindras Farm Equipment
Sector has recently won the JQM (Japan Quality Medal) , the only
tractor company worldwide to be bestowed this honour. It also holds
the distinction of being the only tractor company worldwide to win
Deming Prize. Mahindra is the market leader in multi-utility vehicles in
India. It made a milestone entry into the passenger car segment with
the Logan.
The Group has a leading presence in key sectors of the Indian
economy, including the financial services, trade and logistics,
automotive components, information technology, after-market and
infrastructure development. With over 62 years of manufacturing
experience, the Mahindra group has built a strong base in technology,
engineering, marketing and distribution which are key to its revolution
as a customer centric organization. The Group employee over 50,000
people and has several state- of-the-art facilities in India and overseas.
The Mahindra Group has ambitious global aspirations and has a
presence on 5 continents. Mahindra products are today available on
every continent except Antarctica. M&M has 1 tractor manufacturing
plant in China, 3 assembly plants in the United States and 1 at Brisbane,
Australia.
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It has made strategic acquisition across the globe including Stokes
Forgings (UK), Jeco holding AG (Germany) and Schoneweiss & Co
GmbH (Germany). Its global subsidiaries include Mahindra Europe Srl.
based in Italy, Mahindra USA Inc. and Mahindra South Africa.
M&M has entered into partnership with international companies like
Renault SA, France, and International Truck and Engine Corporation,
USA. Forbes has ranked the Mahindra Group in its Top 200 list of the
Worlds Most Reputable Companies and in the top 10 list of most
Reputable Indian Companies. Recently Mahindra & Mahindra was
awarded the prestigious 21st CFBP Jamnalal Bajaj Uchit Vyavahar
Puraskar 2008, in the Large Manufacturing Enterprises category.
Instituted in 1988 by the Council for Fair Business Practices, the award
recognizes and applauds the efforts of businesspersons, business
houses and business associations with an exemplary record of
practicing and promoting Fair Business Practices. It encourages and
motivates businesses to proactively pursue opportunities to fulfill its
social responsibilities.
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PROFILE
Mahindra & Mahindra ltd. soon branched out into manufacturing
Agricultural Tractors and Light Commercial Vehicles (LCVs). The
manufacturing of utility vehicles commenced in 1954 in collaboration with
Willys Overland Corporation and its successor, (now part of the Daimler
Chrysler Corporation). Manufacturing of the first LCV by the company
commenced in 1965.In 1963, the International Tractor Company of India
Ltd. (ITCIL) was incorporated as a joint venture among the companies,
International Harvester Incorporation (now part of Case New Holland,UK)
and Voltas Ltd. to manufacture and sell tractors in India. 1n 1977 ITCIL
merged with M&M Ltd. and become its tractor division. The company
entered into technical collaboration with Peugeot in 1979 for the
manufacture of diesel engines and transmissions and with KIA motors in
1982 for the manufacture of transmission assemblies. In 1982 the
International harvester brand was discontinued and the Mahindra brand
was born.
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CORE PURPOSE OF MAHINDRA & MAHINDRA LTD.
Indians are second to none in the world. The founders of our nation and of
M&M passionately believed this. Company will prove them right by
believing in themselves and by making Mahindra & Mahindra Ltd. known
world wide for the quality durability and reliability of its products and
services.
CORE VALUES
AT M&M we say
Our core values are influenced by our past, tempered or present and are
designed to shape our future. They are an amalgam of what we have been,
what we are and what we want to be.
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GOOD CORPORATE CITIZENSHIP
As in the past, we will continue to seek long-term success that is in
alignment with our country needs. We will do this without compromising
on ethical business standards.
PROFESSIONALISM
We have always sought the best people and given them the freedom and
the opportunity to grow. We will continue to do so. We will support
innovation and well-reasoned risk-taking, but will demand performance.
CUSTOMER FIRST
We exist and prosper only because of our customers. We will respond to
there changing needs and expectations speedily, courteously and
effectively.
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QUALITY FOCUS
Quality is the key to delivering value for money to our customers. We will
make quality a driving value to our work, in our products and in our
interactions with others we will do first time right.
DIGNITY OF THE INDIVIDUAL
We value individual dignity, uphold the right it express disagreement and
respect the time efforts of others. Through our actions, we nurture
fairness, trust and transparency.
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SOME INDUSTRIAL TERMS
1) Customer service: All the activities that are done to keep theexisting customer satisfied come under the gamut of customerservice.
2) Demand Forecasting: The process includes various statisticalmeasures that enable the firm to estimate the demand of the future,which helps in proper demand management.
3) Documentation Flow: The processes cover the movement of thepaper work that accompanies the movement of physical product.
4) Inter plant movement: This is only applicable to those firmswhere production process is accomplished in more than one plant,requiring the movement of semi finished product from one plant toother.
5) Inventory management: Inventory management requires a costeffective maintenance of stocks of goods and material.
6) Order processing: Order processing starts with the receipt of an
order from the customer and ends when the order is ready forpackaging.
7) Packaging: Packaging is done mainly to protect the product whenit is being transported from source to destination. It can also beused for promotional purposes.
8) Parts and service support: This covers the whole after salesservice Process.
9) Plant and ware house Site selection: This function is carried
to determine where the plant and the ware house are going tolocated.
10) Production Scheduling: This function task is to balancedemand for products with the existing plant capacity and availability ofinputs.
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M&M GROUP AT GLANCE
SECTORS IN MAHINDRA &MAHINDRA LTD
Group
Divisions
Financial
Services Sector
Infrastructure
Development
After Market
Sector
Farm Equipment
Sector
Mahindra Two-
Wheeler
Information
technology
Mahindra
Systech
Mahindra
Partners
Mahindra & Mahindra Ltd
Specialty
Business
Automative Sector
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There are sectors in Mahindra, which are as follows:
1. Farm Equipment Sector (FES).
Domestic Operations International operations Mahindra Agribusiness
2. Automotive Sector. Domestic Operations International operations Mahindra Renault Private Limited (MRPL) Mahindra Navistar Automotives Limited (MNAL) Mahindra Navistar Engines Private Limited (MNEPL)
3. After market sector.
Mahindra Spares Business Mahindra First Choice Mahindra First Choice Wheels Ltd.
4. Infrastructure Development Sector. Mahindra Holidays & Resorts Mahindra Lifespaces Developers Limited Mahindra World City Mahindra Infrastructure Developers Acres Consulting Engineers
5. Specialty Business Sector Mumbai Mantra Mahindra Defence System
6. Financial Services Sector.
Mahindra & Mahindra Financial Services Ltd (MahindraFinance)
Mahindra Insurance Brokers Ltd.
Mahindra Rural Housing Finance Ltd (MRHFL)
7. Mahindra Systech Mahindra Forgings Limited (India & Europe) Mahindra Engineering Engines Engineering Italy Mahindra Aerospace Mahindra Sar Transmissions
8. Mahindra two-Wheeler
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9. Information Technology Tech Mahindra Bristlecone
10.Mahindra Partners Mahindra Odyssea Mahindra Intertrade Mahindra Steel Service Center Mahindra MiddleEast Electrical Steel Service Centre
(MMESSC) Mahindra Logistics Ltd. Mahindra Retail
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BOARD OF DIRECTORS
Mr. Keshub Mahindra Chairman
Mr. Anand Mahindra Vice- chairman
Mr. Bharat Doshi Executive Director & Group Chief FinancialOfficer
Mr. A. K. Nanda Executive Director
Mr. Deepak S. Parekh
Mr. Nadir B. Godrej
Mr. M. M. Murugappan
Mr. Narayan Vaghul
Mr. A. S. Ganguly
Mr. R. K. Kulkarni
Mr. Anupam Puri
Mr. Thomas MathewT Nominee of LICI
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GROUP MANAGEMENT BOARD
Dr. Pawan Goenka President- Automotive Sector
Dr. Bharat Doshi Executive Director & Group Chief FinancialOfficer
Mr. A. K. Nanda Executive Director & President( Infrastructure
Development Sector)
Mr. AnjanKumar Choudhari President Farm equipment Sector
Mr. Rajeev Dubey President (HR, After-Market and Corporate
Services)
Mr. Hemant Luthra President- Systech Sector
Mr. Raghunath Murti PresidentTrade, Retail and Logistics Sector
Mr.Uday Y. Phadke President- Finance, Legal and Financial
Services Sector
Dr. Pawan Goenka President- Automotive Sector
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TECHNOLOGY USED IN MAHINDRA & MAHINDRA
All the activities in Mahindra are carried out under an integrated package
called ERP (Enterprise Wide Resource Planning). All the activities are
carried as per SAP (System application Product In Data
Processing).Mahindra uses LAN (Local Area Network) to connect its
computers within the organizations. It uses BSNL 2 mbps lease line,
which gives a fast connectivity. Mahindra & Mahindra, Rudrapur unit has
165 PC switch are dual core processors and are loaded with MS OFFICE
2003 and SAP Software. System
has the required peripherals. There is one laser Jet HP, color disk jet and
dot matrix printer for each department. There is one scanner and one CD
writer which is centralized with IT (Information Technology) department.
Organisation.
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What is SAP?
System Applications and Product in Data Processing
SAP AG is a German company founded by 5 ex - IBM
Employees in 1972
Till 1994 it was R/2 and now it is R/3
R/3 stands for release 3, where 3 indicates -
GUI (graphic user interface)
Application server 3 tier Architecture
Database server
The first version was 2.0 in India.
The current version is 6.0
Indian Office: Bangalore
Major Customers: M&M ltd. ,General Motors, Mercedes, Coco- Cola etc.
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BENEFITS OF SAP AS AN ERP PACKAGE
1. Improves employee productivity through reduction in non-productiveactivities.
2. Provides quantifiable benefits such as Octroi refund, Bill passing & Payment.
3. Better control on obsolesce etc.
4. Improves inventory turns through reduction in Material through puttime.
5. Provides real time data for decision - making.
6. Reduces financial consolidation time.
7. Provides for more efficient product costing.
8. Provides foundation for e business activities.
ADVANTAGES OF SAP AS ERP PACKAGE
1. User friendly.
2. Addresses all business processes.
3. Fast and reliable in data accessing.
4. Enforces user discipline.
5. Built on best business practices world over.
6. Ability to be upgraded system + technology.
7. Integration with Microsoft Windows.
8. Efficient post - implementation support
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SAP AT MAHINDRA AND MAHINDRA LTD.
SAP is an ERP (enterprise-wide resource planning) initiate operative at
different sites for different periods. All transactions such as buying and
receiving the materials, dispatching vehicles and spares, transacting
among units, paying bills, taking credits and consolidating the accounts
are carried out in SAP. M&M users have acquired sufficient expertise to
navigate through the system for carrying out transactions and seeking
information. Authority profiles have been created to offer enough
flexibility while controlling the critical applications only to a few
personnel.
The system usage has also been improved by developing number of
functionalities. This helped M&M business in performing more effectively
as time progressed.
Following are the few representative enhancements:-
1. Vendor Rating System.
2. Spares Indenting System
3. Octopi Refund System.
4. General Payment and Receipt System.
5. Plant Maintenance System.
6. System for Sales and Operation Planning.
7. Materials Requirement Planning
8. Automatic Link Enabling for Inter Unit transfers.
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The system is now ready and being extended to cover the entire
Supply Chain. All the Area Offices will soon be a part of the system and
the warehouses will operate as plants receiving finished goods from
the manufacturing set-ups and delivering them to the dealer. On
upstream, a website is being create for supplier to log on to eliminate
communication delays and cut down the supply lead time.
SAP AND M&M:-
M&M is world largest SAP implementation on Windows NT.
M&M is currently largest SAP implementation in India.
M&M is first to implement CIN 2 in India with SAP 3.0F
M&M played major role on development of CIN 2.0
M&M has implement maximum number of modules in India.
M&M is first to implement BW (Business warehouse)
M&M is first to implement SRM (Supplier relationship management)
M&M is first to implement APO (Advance planning optimizer).
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MILESTONES
2009:-
Mahindra launches the Xylo January 13
Farm Equipment Sector honoured with the Golden Peacock
award for outstanding innovation in Testing & Evaluation January
22
FES makes a foray in the South East Asian Market February 9
Mahindra Group forays into boat manufacturing February 17
Rajasthan CM inaugurates Light Engineering and Handicrafts
SEZ at MWC Jaipur February 28
Tech Mahindra and Times Foundation present Shikshak
Samman Awards February 24
Mahindra launches the New, Mighty Muscular Scorpio- March 6
Mahindra signs MoU with Bank of Baroda for vehicle finance
March 22
Tech Mahindra declared highest bidder for Satyam April 14
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2008:-
Mahindra enters into JV with TMI Pacific in Australia.
Project Ingenio is now Mahindra XYLO.
Mahindra introduces Fuel Smart system in Bolero and
Scorpio SUVs
Tech Mahindra receives the Frost and Sullivan 2008 Growth
Excellence Award
Anand Mahindra receives Harvard Business School Alumni
Achievement Award.
Mahindra launches first Sustainability Report with highest
GRI Rating.
MHRIL honored with Super brand 2008 award
Mahindra Renault launches the Logan in Nepal
Mahindra acquires majority stake in 3rd largest tractor
company in China
Mahindra to enter the two-wheeler industry
Mahindra Tractors is among Indias most innovative
companies
Tech Mahindra wins USD700 million ST Program from BT
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Mahindra launches Environment Friendly Bolero Pik-Up CNG
in Delhi
Mahindra Tractors tops USA dealer satisfaction survey
Mahindra Tractors launch Indias first bio-diesel tractor
Mahindra receives the Innovation Excellence award
2007:-
The Logan ranks first in the J.D Power Asia Pacific 2007 India
Initial Quality Study SM (IQS) in the Entry Mid-size segment with a
score of 65 PP10O. Released in December 2007, this study serves
as the industry benchmark for new-vehicle quality measured at two
to six months of ownership. Overall quality performance is based
on both design quality and production quality problems per 100
vehicles (PP100).
Mr. Anand Mahindra features among the top 15 in the Mint
Influencers Index. The Mint Infleuncers Index is an objective
measure that tracks 20 high-profile Indian business and policy
leaders across the print media.
http://mconnect/Mahindra%20News%20Flash/Anand%20Mahindra%20among%20the%20top%2015%20in%20the%20Mint%20Influencers%20Index.pdfhttp://mconnect/Mahindra%20News%20Flash/Anand%20Mahindra%20among%20the%20top%2015%20in%20the%20Mint%20Influencers%20Index.pdfhttp://mconnect/Mahindra%20News%20Flash/Anand%20Mahindra%20among%20the%20top%2015%20in%20the%20Mint%20Influencers%20Index.pdfhttp://mconnect/Mahindra%20News%20Flash/Anand%20Mahindra%20among%20the%20top%2015%20in%20the%20Mint%20Influencers%20Index.pdf -
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Scorpio tops TNS Automotive TCS Study in the MPV/SUV
segment with a segment leading score of 91 (joint first with Innova)
as per a study released in December 2007.
Logan was the highest selling sedan and Scorpio the highest
selling UV in July 2007.
The Economic Times has rated Mahindra & Mahindra among the
Top 50 Most Valuable Brands in its edition dated July 31, 2007. The
ratings were arrived at by analyzing the companys five years of
historic revenues and its current market value. The valuation was
performed by Brand Finance using the Relief from Royalty
approach. This approach assumes that a company does not own its
own brand and calculates how much it would need to pay to license
it from a third party. The present value of that stream of
(hypothetical) royalty payments represents the value of the brand.
Mahindra Logan Diesel tops TNS Automotive TCS Study in the
segment- Midsize Diesel with exceptional score of 96 as per a study
released in December 2007
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2006:-
Forbes has ranked the Mahindra Group in its Top 200 list of the
Worlds Most Reputable Companies and in the Top 10 list of Most
Reputable Indian companies.
M&M is first Indian auto maker to launch CRDe
M&M wins Overdrive Car Maker of the Year Award
Mr. Anand Mahindra, Vice Chairman & Managing Director, named
Auto MonitorPerson of the Year
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Scorpio crosses 1 lakh production milestone
2005:-
M&M Tractors launches Australia operations
M&M and Jiangling Motor Co. Group enter into a JV to form
Mahindra (China) Tractor Company Ltd.
2004:-
Mahindra City gets gets permission for Special Economic Zone
Forms new sector, Mahindra Systems and Automotive
Technologies
M&M becomes first Indian company to achieve sales of 1 million
tractors
2003:-
M&M opens second tractor assembly plant in USA
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2002
Launch of Scorpio - a completely new indigenously designed
vehicle
2001:-
M&M ties up with Renault for petrol engines
1999:-
Trading division spun off as separate company called Mahindra
Intertrade Ltd (MIL)
1994:-
Mahindra USA Inc., formed for distribution of tractors in the US
1983:-
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M&M became market leader in Indian Tractor market & position it
has retained till date.
Tractors were manufactured under the brand name Mahindra
1978:-
International Tractor Company of India merged with M&M to
become its tractor division
1955:-
Mahindra & Mahindra goes public.
SOME RECENTS AWARDS
2009:-
Mahindra FES was honoured with the 'Golden Peacock Award
for Occupational Health & Safety - 2009' for Excellence in
Occupational Health and Safety practices. The award was presented
to the FES representatives at a special Gala Awards Event during
the Global Convention on Climate Change on Sunday, 14th June
2009 at S.M. Convention Centre, Palampur (Himachal Pradesh).
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Mahindra FES won gold as the Best New Tractor in the Lower
Horse Power Category (upto 70 Hp) at the 76th International
Novisad Fair. The fair was held from 8th May 09 - 16th May 09 at
Novisad, the capital of the Serbian Province of Vojvodina. Mahindra
outbeat competition on parameters such as aesthetics, fuel
consumption, handling ease and overall performance. The
competition was organized by the organizing committee of Novisad
fair and was conducted by leading agricultural experts from
accredited agricultural universities.
On May 14, 2009, Mahindra & Mahindra was awarded the
prestigious 21st CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar
2008, in the Large Manufacturing Enterprises category. Instituted in
1988 by the Council for Fair Business Practices, the award
recognizes and applauds the efforts of businesspersons, business
houses and business associations with an exemplary record of
practicing and promoting Fair Business Practices. It encourages
and motivates businesses to proactively pursue opportunities to
fulfill its social responsibilities
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The Scorpio receive the Best Off roader vehicle of the year 2009
award and the Start-stop technology received the Environment
Initiative of the year 2009 award from Carwale.com on April 29,
2009.
2008:-
Mahindra & Mahindra was honored with the Business world
FICCI-SEDF Corporate Social Responsibility Award from the
Honorable Finance Minister, Mr. P. Chidambaram in New Delhi on
May 18, 2008.
Mr. Arun Nanda, Executive Director, Mahindra & Mahindra has
been conferred the award of Chevallier de la Legion dHonneur by
the President of the French Republic, Mr. Nicholas SARKOZY.
Mahindra & Mahindra Ltd. was awarded the Excellence in
Innovation Award at the Indira International Innovation Summit (3is
Summit) at a glittering function held on the 15th of February, 2008 in
Mumbai
The Scorpio and the Logan received the TNS The Voice of the
Customer award along with the Innova at a glittering ceremony in
New Delhi on January 9, 2008.
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2007:-
Chairman, Mr. Keshub Mahindra, has been conferred with the
prestigious Ernst &Young Entrepreneur of the Year Lifetime
Achievement Award for 2007 held in Delhi on November 20, 2007
The Institute of Economic Studies (IES), New Delhi, has awarded
the 'Udyog Rattan' to Anjanikumar Choudhari, President Farm
Equipment Sector and Member of the Group Management Board.
Mr. Anand Mahindra, VC & MD, Mahindra Group has been
honored with The Most Inspiring Corporate Leader of the Year
Award by NDTV Profit in New Delhi on July 27, 2007. Finance Minister
P. Chidambaram presented the award to Mr. Mahindra in the
presence of who's who of India's corporate world.
M&M ,FES win the JQM award.
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CORPORATE SOCIAL RESPONSIBILITY
1. Mahindra United World College of India- MUWCI the Indian Global
School:-
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The Mahindra United World College of India was founded in 1997, as a
premier educational institute offering true international education to
students from India and abroad. The global education offered by MUWCI
brings together students of various nationalities for a pre-university
degree. Keen focus is given on all-round development of the students,
and the students are encouraged to become agents of change by
involving themselves in socially and environmentally relevant issues.
2. KV Mahindra Education Trust :-
It was established in 1953 by the Late K C Mahindra, M&M is the main
sponsor of the KC Mahindra Education Trust. The trusts objective is the
promotion of education at various level, and it is involved in and
contributes to various education initiatives.
3. Nanhi Kali- Empowering the girl child :-
In 1996 the KC Mahindra trust kicked off an ambitious program aimed at
helping the underprivileged girl child in India. Christened Nanhi Kali, the
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projects principle goal is to promote primary education for the
underprivileged girl child in both rural and urban parts of the country.
4. Promoting Health and Hygiene :-
Mahindra forgings, chanak has developed a CD title Teen Prashna Ek
Uttar an entertaining and enlightening visual journey about health and
hygiene. It is targeted at village level primary school children who are
often unaware of basic hygiene factors. The CD will be screened at
schools in and around chanak.
5. Enhancing Safety:-
FES Kandivli organized a traffic training programme for 58 sanskar
students. Mrs. Suvrata Gharge planned the activity. These students will
participate in traffic control on Ganesh Vsarjan days.
6. Driving Excellence in Education:-
The chanak Project Office, Pimpri, Pune initiated its first Esop activity with
the presentation of ten fully fuctional desktop computers to the Don
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Bosco Technical Institute, chinchwad. The Don Bosco society is
internationally renowned for its service to the underprivileged. The
training cell was inaugurated by Mr. Prince Augustin, Sr. VicePresident
Human Capital and Mr. Sohan Maine, Vice President Chanak Project.
7. FES Rdpr Plant takes the Lifeline Express to Uttarakhand:
The Lifeline express the Worlds first hospital on rail was sponsored
by the FES Rdpr Plant, as a Corporate Social Responsibility initiative, held
under the activities of the companys Esops.
Lifeline Express: First time by Mahindra, First time in Uttarakhand:
Over 2000 patients benefited from the Camp.
647 surgeries were performed in 24 days(102: cleft lip, 93: ear, 54:
polio and 398: cataract)
21000 voluntary man hours through community participation.
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FARM EQUIPMENT SECTOR
The Mahindra Groups Farm Equipment sector has significant presence
across six continents (except Antarctica). It is among the top five tractors
brands in the world, with its own state-of-the-art plants in India, USA, China
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and Australia, and a capacity to produce 1300000 tractors a year. The Group
has a network of 800 dealers across world-wide.
In the domestic business, the Farm Equipment Sector has had an unparallel
market leadership for the last 25years. It is the largest producer of tractors
in India. Mahindra & Mahindra recently consolidated its position as the
leader of the Indian tractor industry when it acquired 43% stake in Punjab
Tractors, the owner of the owner of the leading Swaraj brand of tractors.
Mahindra Gujarat Tractor, acquired by Mahindra & Mahindra from the
Government of Gujarat in 1999, is the oldest running tractor unit in the
country. The Mahindra Group has a 60% stake and the balance is with
Government of Gujarat.
Mahindra Agri-business integrates the food chain by providing quality
inputs and farm solution to post- harvest management of high value farm
produce. The Companys core business is to provide Supply Chain
Services to organized retail, to both export and domestic markets for fresh
fruits and vegetables as well as to the food processing industry.
Mahindra Agri-business is the first Indian corporate body to be awarded
EUREGAP certificate as Primary Market Organization for grapes.
The Mahindra Groups Farm Equipment sector is the largest producer of
Agricultural tractors in India. It has enjoyed an unparalleled market
leadership in the domestic market for the last 25 yrs. With a 30% market
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share, the Bhoomiputra, Sarpanch and Arjun brands of tractors give the
groups Farm Equipment Sector a presence in the entire major tractor
segment in India. It has a large customer base of around 12 lacks satisfied
Customers and the deepest distribution reach. The Sector has 4
manufacturing plant in India, located at Mumbai and Nagpur in
Maharashtra, Rudrapur in Uttarakhand & Jaipur in Rajasthan.
The Farm Equipment Sector has always been a process driven
organization with a strong focus on its quality system. The TQM
movement in the Sector has brought accolades like the most coveted
Deming Application Prize, JQM(Japan Quality Medal) making it the first
tractor company in the world to win recognition of the stature.
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PRODUCTS OF MAHINDRA & MAHINDRA (FES)
TRACTORS BELOW 30HP
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1. 265 DI SARPANCH
2. 265 DI BHOOMIPUTRA
TRACTORS BETWEEN 30-40 HP
1. ARJUN 445 DI
2. 275 DI TU SARPANCH
3. 475 DI BHOOMIPUTRA
TRACTORS ABOVE 40 HP
1. ARJUN 555 DI
2. ARJUN 605 DI
3. 575 DI-SARPANCH
4. 575 DI-SARPANCH
5. 475 DI-SARPANCH
MANUFACTURING LOCATIONS FES
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MUMBAI
RUDRAPUR
NAGPUR
JAIPUR
ABOUT UTTARAKHAND
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If its peace and serenity, reinforcing the divine power, It could only be
UTTARAKHAND.
On 9th November 2000, Uttaranchal was declared as a
separate state.
It is a Pilgrim and Tourist center with places like Badrinath,
Kedarnath, Mussourie, Nainital etc.
Places like Rudrapur, Kashipur are agricultural cum industrial
towns.
Rudrapur is in the district of Udham Singh Nagar & is the foothills
of Himalayas
ABOUT RUDRAPUR
Total population : 1.75 lacks
Geographical Location : Around 250 kms from Delhi
Literacy Rate : Male-approx76.2% ,
Female approx 54.16%
Major Industries : M&M(FES), TATA, Bajaj, Ashok
Leyand Dabur,Britannia, Voltas, Parle, Nestle.
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RUDRAPUR PLANT VIEW
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MAHINDRA & MAHINDRA Ltd, RUDRAPUR
UTTARAKHAND
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MISSION--- Zero Accident & Zero Defect
Rudrapur Performance Unit came into existence in March 2000 as a Satellite
plant with installed capacity of 9000 tractors per annum (15 tractors per shift
on two shift basis) having an idea to be closer to the market in northern part
of India so that the requirement of the customers can be met faster. The plant
is a part of Farm Equipment Sector of M&M group. In year 2003 due to
expected increase in market demand and manufacturing strategy to be a low
cost manufacturer, it was decided to expand the Rudrapur plant capacity
from 15 Tractors per shift to 47 Tractors per shift with in house assembly
facility of Engine, Transmission and Hydraulics aggregates in a phased
manner.
PLANT CAPACITY TREND
0
50
100
150
200
F-05 F-06 F-07 F-08 F-09
FISCAL YEAR
TR
ACTOR
PERD
AY
plant capacitytrend
With the introduction of new assembly lines the plant becomes Integrated
Assembly Plant in Dec, 04. Assembly process includes engine docking,
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pre-painting assembly, pre-treatment of skid. Painting followed by paint
,baking, post painting assembly, tier mounting, roller testing, road testing
and PDI, finally stock transferred to the Rudrapur. Transmissions, Engines
are received from Kandivli or Nagpur and painted sheet metals from
Kandivli. Child parts are procured from Nagpur and directly from suppliers
approved by Kandavli.
In 2007, the plant started 3rd shift operation for quality and productivity &
machine shop for Crankcase and Cylinder head manufacturing. The plant
wins the Star of the FES Award in 2007. The Rudrapur plant is the largest
producer of Tractors in the entire Sub- continent. The plant is increased
its productivity by many folds within recent 2 to 3 yrs. The net productivity
of the plant is 183 Tractors per day.
The net market share of M&M Tractors is 30%, out of which Rudrapur
plant alone contributes 51%. The credit of such achievement lies in the
hands of hundreds of hard working employees of M&M Ltd. who works
day and night. The model which is manufacturing in plant is
Bhoomiputra and the no. of employees working there is around 1000
including cell members.
The plant is awarded by many national and international standard
certificates such as TS 16949, ISO 14001, ISO 18001, QS 9000, & OHSAS
etc. for policies relating environment, safety and information security. The
Company has won the Deeming Application Prize, the first ever in the
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world in tractor segment for its distinctive performance improvements
through the application of TQM. TPM is recently implemented there.
Following were the assumptions in the initial business case of the plant:
Reduce manufacturing cost by way of Tax benefits like Sales Tax, low
manpower and transportation cost.
Fast availability of local demand.
Loyalty of customers for locally manufactured products.
Quicker deliveries.
Integration of manufacturing, marketing and extension services.
To promote and establish Mahindra Brand.
Co location of stockyard to reduce cost, achieve synergy and improve
marketing & Distribution in the region.
This plant has kept its constant focus on continuous improvement in
assembly processes to improve quality, productivity and reduce cost
.Rudrapur Performance Unit has been the main focus of the FES. The
plant is designed to follow the single piece flow and minimum handling.
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The main responsibility of Rudrapur PU is to make and provide defect free
Finished Tractors as per SCPC Domestic marketing requirement.
DIAGRAMATIC REPRESENTATIONOF
FINANCE & ACCOUNTS, IT DEPARTMENTOF
MAHINDRA AND MAHINDRA
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PRODUCTS OF RUDRAPUR PLANT
MR. AJAY JAIN(Manager)
Mr. V. K.
Joshi
(Deputy
Manager)
Mr. Susheel
Kumar Bhatt(Deputy
Manager)
Mr. Sumesh
Agarwal
(Deputy
Manager)
Mr. Nitin
Saxena
(Deputy
Manager,IT)
Accounts
Executive
Trainee,
(Service
center)
( AccountAssitant,
Service center)
IT Assistant
Assistant
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Tractors model as :
Bhoomiputra
265BP
265NBP
275BP
475BP
SHAAN
Upcoming Model:
275NSTU
575BPE
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SWOT Analysis Framework
Environmental Scan
Internal Analysis External
Analysis
Strength Weakness Opportunity Threat
SWOT MATRIX
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SWOT MATRIX
Strengths: A firm strengths are its resources and capabilities that can beused as a basis for developing a competitive advantage. For example-
goodwill reputation among customers.
Weakness: The absence of certain strengths may be viewed as
weakness. For example- high cost structure.
Opportunities: The external environmental analysis may reveal certain
new opportunities for profit and growth. For example- arrival of new
technologies.
Threats: Changes in the external environment may also present threats
to the firm. For example- Shifts in customers tastes away from the firms
product/services.
SWOT ANALYSIS OF PLANT
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S W O T1.Integrated
Plant
Remote
location
Favorable taxation
policies of
government.
Union
formation
(strike)
2.Youth
energy
(Average 24
years)
Inadequate
space available
Low manufacturing
cost attracts new
tractor model within
the available space.
Upcoming
new
industries.
4.Optimum
Capacity
Utilization (3
Shifts
operation)
High attrition
rate
Local supplier
development
Recession
4.Low
manufacturing
cost
Poor local
infrastructure
(Outside Plant)
Cheap labor
5.Lean
Organization
Talent crunch
6. Cell Member
Working Pace
-5MPH7.O/P/H
maximum
across all
plants
(Effective
space
utilization)
OTHER PROBLEMS OF INDUSTRY
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Seasonal business
Monsoon
Hike in oil prices
Price increase in material & utilities
Overall F-10 tractor market : small growth expected
MAHINDRA & MAHINDRA (FES) STRATEGY: F10
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1. Continued emphasis on Cost Re- engineering.
2. Aggressive growth of adjacencies
3. Synergy with Swaraj entities
4. Exploiting F09 domestic & overseas launches
5. Up gradation / re-launch of key models
6. Launch of Compact series & FS-25 in the US
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OBJECTIVE OF THE STUDY
The objective of every research work is to pin point certain
recommendations as per the requirement of the study and help the user
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as well as the manager in proper decision-making. In the under-taking
study an effort has been made together the pertinent facts.
The main objective of this project is to reduce the inward freight cost of
the M&M ltd. Lalpur.
For the fulfillment of this objective there were may be sub-objective to be
consider, some of them are:-
1. Analyzing the whole process of the freight.
2. Judging the operational efficiency of the user.
3. Analyzing the problems faced by the users.
4. Finding out the solution for those problems.
5. Internal control regarding the payment.
PERIOD OF STUDY
This project was executed during summer break after third trimester in
Mahindra & Mahindra Ltd., Farm Equipment Sector, Lalpur
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(Rudrapur)from 15th may 2009 to 30th June 2009 under the supervision
of Mr. AJAY JAIN (FINANCE & ACCOUNT MANAGER).
RESEARCH METHDOLOGY
To conduct any research a scientific method must be followed. As I
studied the process regarding the freight bill passing this is practically
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performed in Mahindra & Mahindra ltd. Lalpur (Rudrapur). I got the
information from the user knowledge.
SOURCES OF DATA:
The data collected for the project work is based on existing practice and
to understand it, staff of the organization had provided me some
documents and knowledge, therefore the source is to be called-
Secondary source.
The Secondary source data are collected from the person who actually
performing that activity and familiar with the practical problems which
occurs.
Performers knowledge is more beneficial for understanding actual
problem and to control them & cost also related with that.
Research Method : Random Sampling Method (Transporters bills
Survey)
SCOPE OF STUDY
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My study is confined toMahindra & Mahindra Ltd, Farm
Equipment Sector, Lalpur,, Industrial Estate(SIDCUL), Kichha road,
Rudrapur, Distt.- Nainital, (Uttarakhand)
M&M LTD can take advantage of our study to enhance their business
prospects, critically examine the outcomes of this study in respect of
their Transportation process, so that they can control the cost of
freight and increase their profit, they can also build- up proper internal
control over the process..
It has great scope for me also as I can apply this knowledge and
experience of 6 weeks in my future career.
Part 2: Theoretical Background
About Logistics Management
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Meaning of Transportation
Meaning of Freight Cost
Benefits of Transportation
Importance of Transportation
Various Modes of Transport( In Rudrapur Plant)
Elements of freight cost
Steps for controlling of Freight Cost
Transportation network used at Rudrapur plant
ABOUT LOGISTICS MANAGEMENT
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Organized movement of material and sometimes the people also is known
as Logistics.
This term firstly associated with the military but rapidly it cover the
business activities.
Proper business planning when used to move the material, service,
information and capital also for effective management, that process is
called Logistics Management. It includes the increasingly complex
information, communication and control systems required in todays
business environment. Logistics management includes planning,
procurement, transportation, maintenance and replacement of personnel
& material.
Different firms have their own method regarding logistics management.
Like some firms perform these activities under one department, while
some perform these under various department. The firm may also go in
for other-one method, which is called third-party logistics, which is
perform with the help of contract with an outside party to perform specific
logistics services.
Freight Management System is the main part of Logistics. Freight
Management System is a smaller concept and logistics is the bigger one.
MEANING OF TRANSPORTATION
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Transportation means the physical movement of material from one place
to another place. It includes activities like moving of raw material to
central or local storage, moving finished goods to and from prospective
customers.
In others words raw material can be transported from suppliers to the
production facilities and finished goods from there to the consumers.
Transportation helps in availability of the required product because
products are rarely produced and consumed in the same location.
Transportation is the main artery of logistics and Supply Chain
Management. It helps Logistics and Supply Chain Management to achieve
its objective of availability of right quantity of the right quality goods at
the right time and place at least costs.
MEANING OF FREIGHT COST
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Freight cost includes the expenses concerned with the delivery and
dispatch of finished goods to customers .In other words, it is an
expenditure incurred from the time the product is completed until it
reaches its destination or prospective customers.
It includes:
Cost of packing
Cost of time contributed in process of reaching of material from
suppliers to customers.
Distance cost
Volume cost
Loading and unloading charges
Services provided by transporters etc.
BENEFITS OF TRANSPORTATION
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Transportation plays a vital role in Supply Chain Processes. The Indian
economy is generally characterized by a wide coverage of the
geographical area, extensive coast lines, large population as well as
abundance of mines, minerals along with agricultural lands, large
population lands. It needs a variety of transport facilities in adequate
quantities. There are a lot of transport benefits to an economy, mainly
divided in two broad categories:
Economic benefits
Non-economic benefits
I. Economic Benefits:-
It includes
Transportation make products available to the final
condemns, i.e. it serves not only existing demands, but also
stimulates new demands by extending the variety of goods that can
be made available anywhere and everywhere.
It facilitates production by moving different means of
production, i.e. raw materials, machines, tools, men, etc. to places of
production where these are best suited. Transport also encourages
regional specialization for competitive advantages.
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It also considered as a key agency for the promotion of
planned development, i.e. regional economic disparities can be
removed by way of transport.
Transport provides ample opportunity for acceleration of
employment and income, which in turn, create demand for customer
goods.
II. NON-ECONOMIC BENEFITS:-
Non- economic benefits of transport may be judged by its great
contribution towards social, political as well as cultural integration of
mass population of any country with different moods, languages, castes,
creeds and traditions. Transportation brings people of different regions at
a common platform with the common social make- up of the community.
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IMPORTANCE OF TRANSPORTATION
Transportation is the main artery of logistics and Supply Chain
Management. It refers to the movement of goods from one location to
another. Transportation plays a significant role in supply chain processes
because products are rarely produced and consumed in the same
location.
The share of transportation cost is about 40 % of the total logistical costs.
Hence, any effort to cut down the logistical costs needs efficient and
effective utilization of transportation facilities and its trade-off with other
logistical components. Being an internal part of total logistics and supply
chain system in India, railways and roadways carry about entire domestic
freight cargo, whereas seaways and airways for international freight
cargo.
Liberalization, privatization and globalization have further increased the
market scope, where the world market is shrinking into a global village. In
this situation, movement of goods and products has become more
imperative as also wider. Further more, raw materials of one country are
processed in the other country and sold out in Third World countries at an
economy of scale and competitive advantage in the logistics and supply
chain perspective. Transportation has a significant link with various
stages of global supply chain.
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In the era of rapid innovations in the field of information and
communication technologies, there have been phenomenal growths in e-
commerce and online selling which need more specific and value-added
transportation services in order to meet delivery commitment. Hence, in
internet marketing and associated home delivery of products,
transportation costs have became even more significant in retailing. Now,
transportation plays a vital role in the success of e- commerce supply
chains.
Thus, the success of any logistical system and coordinated and efficient
supply chain performance, transportation plays a very strategic role
because:-
It ensures speedier and timely physical movement of goods from
points of inception to point of consumption.
It creates core competency by preventing stock-out and customer
annoyance.
It provides protective storage during transit.
It ensures cost- effective better customer service.
It fulfills specific service requirements of the corporate enterprises
for improvement of logistical capabilities and harmonious supply
chain relationships.
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DIFFERENT MODES OF TRANSPORT
IN CONTEXT OF THE M&M LTD (Rudrapur plant)
Various modes of transport are used by the companies for specific
purpose of movement of various types of goods. The basic modes of
transport are:-
Airways
Waterways
Roadways
Railways
Pipelines
In Rudrapur plant the modes of transport which are used are:
Airways
Roadways
Railways
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MODES OF TRANSPORT:-
1. ROADWAYS:
With the growing popularity of logistics and supply chain management,
the roadways have expanded rapidly since the last three decades. Most of
the logistical operations of corporate enterprise largely depend on this
mode of transport. It ensures flexibility in service for better customer
responsiveness. .The reliability and economy of this mode is gradually
increasing due to continuous improvement in the quality of motor
vehicles and the conditions of roads. These factors facilitate in the
achievement of logistical objectives like lower transit time, lower total
logistical costs, and improved customer service.
2.
RAILWAYS:
The major advantage of railways is to efficiently transport large quantities
of goods over long distances. Given the high fixed cost and low variable
cost of operation, the tariff of railways is low, which encourages large
shipments over a longer distance. That is why the bulk shipment of
shipment of production like fertilizer, cement, food grains, petroleum
products etc. are normally through railways from the production plant to
the bulk/central warehouses.
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3. AIRWAYS:
When goods are transported by air, the mode of transport is called
airways. This mode of transport is the newest and least preferred mode,
especially for domestic purposes. One of the significant advantages of the
air transportation lies in the speed. It needs only a few hours for a
shipment from one place to reach another, in contrast to the days
required with any other modes.
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ELEMENTS OF FREIGHT COST
As freight cost is one of the major constitutes of total logistical costs.
Hence, it is essential to have a proper analysis of freight cost, which
includes various elements. Some elements behave in a contradictory
manner with others. For instance, if firm opt for a more speedier mode of
transportation, say airways, the transit time, obsolesce and deterioration
costs are less but tariff costs goes up,
Following are the various elements of freight cost:-
1. TARIFF OF TRANSPORT MODE
It means charge of various modes of transport to be paid for movement of
goods from one location to another. Tariff of airways is highest, followed
by roadways, railways, seaways and pipelines. Normally, freight charge
increases with the decrease in transit time, i.e. higher the transit time,
lower the freight cost. Tariff of transport mode largely depends upon a
large number of factors, such as nature of the product, distance to be
covered, volume/ quantity to be shipped, density (weight and space) of the
product.
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2.TRANSIT TIME COST
This element is very significant: it deals with the cost of inventory in
transit. If the transit time of a particular mode of transport is longer, it
means that the product of the company remains in transit for a longer
period of time. So, the involvement of working capital is for a longer
period of time, resulting into higher transit time costs.
3. OBSELESENCE AND DETERIORATION COSTS
These elements involve costs caused due to deterioration and obsolence
in the physical attributes of the products during transit. There are certain
type of products which are perishable and delicate in nature, whose
physical attributes deteriorate aver a period of time, gradually resulting
into devaluation of the product.
4. PROTECTIVE PACKAGING COSTS
For specific products and modes of transport, there is requirement of
specific protective packaging. In comparison to roadways more
packaging is required in the railways, so this will also be the important
element of freight cost.
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5. TRANSIT INSURANCE COST
It is the cost of insurance paid to insurance company to cover various
type of risks. At the advent of containerization, this cost has been
minimized due to lesser chances of damages of goods during transit.
6. MISCELLANEOUS COSTS
It includes cost, such as local taxes, octroi, toll taxes, etc. especially
when goods are shipped through roadways.
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STEPS FOR CONTROLLING OF FREIGHT COST
Due to the prevailing global competitive environmental scenario,
corporate enterprises are continuously under pressure to cut down
freight cost and improve customer service capabilities. That is why, they
need:
Reduction in transit time for minimization of inventory cost
Less damages, en-route handling and pilferages for minimum
insurance charges.
Curtailment of protective packaging costs.
Point-to-point information regarding the status of the shipment.
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TRANSPORTATION NETWORK USED INRUDRAPUR PLANT
(Direct shipment via distribution centre)
Distribution
Centre
Plant 1
Plant 2
DESTINATION
POINT
Customer A
Customer B
Plant 3Customer C
SUPPLIER
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Part 3: FREIGHT BILL PASSING AT M&M
LTD.( Rudrapur)
Process of order placed
Arrival of material
Process of freight bill
generation
Payment of bills
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SUMMARY:( FREIGHT BILL PASSING & PAYMENT)
Receiving Production plan by plant from Kandavli(Mumbai, Head
Office)
Receiving Production plan from Production planning & Control(PPC
)Rudrapur
Purchase Order issued to the vendor:
One copy issued to the transporter.
Another copy to Kandavli (Mumbai).
Transporter reaches to the supplier and collects the material.
Vendor load the material.
All the necessary document are being prepared from the
Transporters office & dispatch them with the material to the buyer
through Transporter.
As per the conditions of the contract between transporter & M&M
ltd. some responsibility regarding product are being taken by
transporter during transport.
Receiving of material at gate of RDP Plant.
Entry formalities are fulfilled at gate.(Physical cont slip generated)
After this goods passed for Goods Receipt generation as goods are
being received by the plant and proof of this will handover to the
transporter.
Quality inspection process of the receiving goods at plant.
There transporter handover the document at transporters office.
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Freight bill are being send to the receiver of the material by the
transporter.
Person of Supply Chain Planning and Control dept. cheque the bill
as per the rules and regulation of the contract & information of GR
slip and if correct park it into the system (SAP).
At account department manager cheque that bill and if ok, then
pass it for Payment.
Payment of freight bill are made from Kandavli(Mumbai).
SUPPLIE
RR
SCPC
TRANSPORTER
COLLECTION
WAREHOUSE
SUPPLY
BUYER
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PARTIES INVOLVED IN SUPPLY OF MATERIAL
MATERIAL MANAGEMENT MODULE
It is the most important module of M&M as it manage the vital part called
material. First of all the masters will analyze and research the market
conditions, on the basis of their survey they make planning of future
requirements. Then each plant will make their individual plan according to
their master plan.
INDENT: all the department of an organization prepare Indent
(means their requirement) of material.
APPROVAL: this indent (requirement) is to be compared or
matched with planning made prior, accordingly approval is
passed.
QUOTAION INVITATION: The required details of material is to be
quoted such as price, quantity, part no., etc.
PURCHASE ORDER: then the acquired result through quotation
is to be implemented in purchase order, a separate department
SCPC is there to prepare purchase order, who make it as per the
requirement of all the department, and then place the purchase
order with the vendor. This purchase order is checked, signed or
sanctioned by an authorized person as a part of internal control.
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MATERIAL RECEIVED: when the order is received and accepted
by the vendor, the vendor send the required material to M&M as
per the contract held between the buyer (m&m) and the vendor.
Types of material:-
There are generally two types of material purchased by the company, i.e.
Direct Material
Indirect Material.
Direct Material:- Direct Material are those material which are real tractor
parts. Those material which are mainly required for the manufacturing of
tractors, are come under direct category such as transmission, engine,
VTU, steel body etc.
Indirect Material:- Variety of material which is not considered as a part of
the tractors like sterrings, tyres, bolts etc.
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FLOW OF MATERIAL:
PCS(physical
count slip
GR(Goods receipt)
QUALITY
CHECK
UNRESTRICTED
USE STOCK
UNDER
INSPECTION BLOCK
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PCS GENERATION (Physically Count Slip):
When the material reached at the factory gate, proper recording of
material is done through a transaction called Physically Count Slip, the
PCS is generated at the gate after which the material is entered for further
Processing. PCS generation and all the other transactions are made in a
software called SAP. A code or a transaction of SAP to generate PCS is
MIGO.
If suppose the goods being transferred through the other plant of M&M, it
is called plant to plant transaction handled by IUTN head. In this case the
PCS is not generated at the gate but the stamp is punched,&directly GR
will be punche and the record is maintained in a register. Now the further
handling of IUTN is made inside the plant, regarding the PCS and GR
preparation
1. INBOUND DELIVERY:-
When ASN no. not given by supplier then there is a need to create inbound
delivery. ASN no. means that supplier has put that material into the SAP
already. So in that case firstly there is a need of creation of material in
inbound delivery and then only the PCS will be generated.
Transaction Code used for inbound delivery:-
VL31N
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The page will open consisting of various details like-
Vendor
Purchase order no.
WHEN LOG ON THE SAP the following screen will display:
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Send the no. to MIGO
When select VL31N the below screen will display
GoodReceipt Inbounddeliver Inboundno.
Click in
PCS detail
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We have to enter this PO no. and execute it, then the list of various part
no. of material is open select the desired part no. matched with the invoice
then enter and save the quantity mentioned in invoice. Hence the inbound
no. is generated which is reflected below the screen. Then open a new
session in SAP, enter MIGO and fill the necessary requirements regarding
PCS. The whole process of PCS punching would be more clear with the
procedure given below:
Fill the required information:
Enter Purchase Order no
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The following screen will display:-
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Then again open
Select from here the MIGO,
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The following type screen will display:
Send the no. to MIGO
Good
Receipt
Inbound
deliver
Inbound
no.
Click in
PCS detail
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Enter the following detail
Invoice no. Item invoice amount
Invoice date and time excise amount
LR no. LR date
Octroi receipt/form31 octroi receipt date
Transporter name vehicle no.
Click ok
Click check
Save
Getting PCS no
2. GOODS RECEIPT:
For this, when ASN no. is given in then
Send the no. to MIGO
Then same process will be followed as in inbound delivery.
Good
Receipt
Inbound
deliver
ASN no.
Click in
PCS detail
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GR PUNCHING
GR punching is done in MIGO command
ZM3A- Use for sort out the list of pending material
MB51-for getting the detail of material by entering the part no.
Open MIGO in SAP, select GR blocked from the icon, select material
Document from the other icon , then put PCS no. in the box, enter or
Execute it, check whether the part no. is of v0 or v1 type if v0 then non
Excise option will be selected, when v1 is there then only capture option
is to be selected.
Put any no. in excise invoice and click enter, again choose only capture
option if v1 is there, click enter, check PCS details, click on item OK,
enter and post it, hence GR is generated, note the GR code on the invoice
which is reflected on the screen. The procedure of GR generation in both
the cases are almost the same except the checking of v0 and v1 code for
excise amount which is in the case of IUTN.
As the GR is generated certain entries are passed automatically in the
system such as :
Purchase Local A/C Dr
To Purchase offset A/C
Inventory A/C Dr
To GR/IR A/C
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MIGO( zmcl)
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1. IN IUTN TRANSACTION:-
Goods receipt Outbound delivery
Put PCS no.
Check PCS & other details
Post
See option V0 or V1{V0-no excise, V1- excise}
Put any no. in excise option
Only capture in
Enter (GR no. will be generated).
Format of GR Punching
Invoice no. Item invoice amount
Excise invoice date time excise amount
LR no. LR date
Octroi receipt no. octroi receipt date
Transporter name vechile no
Counted by invoice quantity
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2. IN OTHER TRANSACTION:-
MIGO
Release GR
Material documents
Put PCS no.
Enter
Item ok
GR generated
This type of screen appeared:
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GATE EXIT OF THE TRANSPORTER
1. The unloading of the material will be based upon the contract
between transporter & the buyer.
2. After unloading the material the transporter take the one copy of
each document with it and exit the factory gate.
3. Then transporter hand over those documents to the employee at
transporters office.
4. Transporter make the bill and send to the plant office, but in
M&M.Rudrapur transporter send the freight bills to the Mahindra
Logistics.
5. Mahindra logistics send those bills to the M&M plant Rudrapur.
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QUALITY INSPECTION
QUALITYASSURANCE
DEPT.
SQA(SUPPLIER
QUALITY
ASSURANCE)
RQA(RAW MATERIAL
QUALITY
ASSURANCE)
IHQA(IN- HOUSE
QUALITY
ASSURANCE)
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IF OK
IF
REJECTED(122)
OK312
BLOCK350
STORE
(311)FURTHER
LINE
SUPPLIER
STOCK OUT
QUALITY CHECK
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QUALITY REJECTION BY SPECIFIED DEPT.
There are specific parameters prescribed by quality department Kandivli,
Mumbai on the basis of which inspection process will be carried out.
Various departments perform their activities on the basis of these
parameters.
Activities performed by various departments are as under.
SQA:
1. Firstly the quality inspector will reach to the supplier place.
2. He will properly analyze the techniques and resources used by the
supplier and prepare a report accordingly.
3. This report will be submitted to the head of the department.
4. If the head is not satisfied with the quality of technical aspects of
supplier, he advice the supplier to change their techniques.
5. If supplier does not pay any attention, then the further dealings with
the supplier will be stopped.
6. And the vendor will be blocked in SAP.
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RQA:
1. Quality inspector take some sample from the material received from
supplier.
2. He will prepare the report on the basis of specified parameters, which
are specified by the common meeting of the production department,
engineering specialist etc.
3. This report will be submitted to the head of the department.
4. If any deviation will be found then that material will blocked and
rejected.
5. If rejected material can be improved by supplier then that improved
material will be used otherwise send back to the supplier.
Sometimes buyer will make improvement in the defected material
supplied by supplier on its own cost in order to continue the production
process, and later on debit the supplier account with the same amount.
If repeatedly, supplier will supply improper material then also the
supplier will be blocked. After the accomplishment of the activities of
both the above departments
the material will handover to the dock.
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IHQA:
1. Now the line man will use that material for the production
of Tractors
2. If the line man will found any defect in the material he is
using, he may inform the head of the quality department regarding the
defect.
3. And the material is to be rejected.
Sometimes payment to the vendor has already been made on his account
and later on the material he supplied may found defected, in that case
paid bill can not be recovered, but the present unpaid bill of that vendor
regarding the same part no. will not be paid equal to the amount of that
improper material.
Except In-House Quality department all other departments can block
the vendor.
Line rejection
Rejection meeting on daily basis
After reviewing decision will be taken on supplier rejection, process
rejection and transportation rejection
Entry of material in rejection file
Collection of material which has send back to supplier
Booking of material in system
Packing the material
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BILL PARKING (SCPC department)
Bill parking means the entry of the freight bill into the SAP. Parking
person properly check the bill on the basis of terms and condition of the
contract. If any change will be made regarding charges, then hard copy of
this Alteration should be dispatch & reach to the parking person as early
as possible by the head dept. (Kandavli).
PROCESS OF PARKING
Log on SAP
User Id & password
Put transaction code ZFLK
Fill the details
Execute
Parking no. generated
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When SAP will be log on & User ID put, Then following screen
will display-
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Fill the required information :
Amount of specific mode of transportation against it.
Vendor code.
Text code- it helps in processing further steps regarding tax & Cal tax
should be tick.
After that execute this.
The below screen will displayed:_
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Document 440792158744 means here the parked no.
In this 44 is the company code.
This parked no. will put on the bill for reference.
This parked bill will be send to the account dept. for passing.
Things which are very important to be considered in parking the bills are:-
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1. Invoice no.
2. Mode & type of transport.
3. LR no. & total no. of LR.
4. Freight charges per Kg.
5. Loading & Unloading charges.
6. Any extra charges (in case of collection of material from supplier
other than M&M supplier.
7. Lorry charges (Rs. 10 per lorry)
8. Any penalty or detention charges, if applicable.
Some other important things regarding bill parking
In road transit dispatch date will be excluded in calculating
transit time.
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In other transit dispatch date will be included in calculating
transit time.
Service tax will be applicable on airways mode of transport only.
For each party there is separate code no. in which payment
regarding that party will be transferred.
Less amount bill can be parked in which later on
supplementary bill can be parked, but bill of more amount will not be
parked.
Other important terms:-
For modifying &changing any information- FBV2
Execute
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Screen
Put parked no.
Execute
Screen display
Fast data entry
Execute
Make changes
NOTE:- not all the details can be changed, like G/L code & amount can be
changed but parked date cannot be changed.
For deleting any parked bill FBV0
In this when this transaction code will be put, it display all information
regarding that parked bill, choose delete option and bill will be deleted.
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For checking SE16 will be used
SE16
ZFLRDETAIL
Screen (fill the required information)
Important note:-
for financial year 1st April to 31st March in M&M Ltd., bill of date after 27th
March will not be parked in that year, it will be parked for next year.In this
case against invoice no. next year will be put.
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T r e n d o f B
0
1 0 0
2 0 0
3 0 0
4 0 0
5 0 0
6 0 0
7 0 0
J u n J u l y A u g S e p tO c t N o v D e c J a n F e b M a r
M o
o.
o
par
e
s
This trend shows the increasing efficiency of the parking person and also
helpful for finding reasons in case of low no. of parking.
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BILL PASSING
Bill passing is the process performed by the account dept. Here the bill
which are already parked into the system(SAP) are passed for payment.
As we any bill will be made for payment only, when it is passed by the
account dept..Account dept with the reference of freight contract check
the bill and if OK then passed it for payment. Here account person put the
parked document no.into SAP and it will display the information regarding
that bill.
With help of this transporter account will be credited for payment, which
he
get from Mahindra Logistics.
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PROCESS:-
SAP Log on
User ID
FBL1N
Parked bill list
Vendor selection
Open item
Put date Tick parked item Execute
After execute, a screen will displayed which contains the all
information regarding the parked bills i.e.- date, vendor code, amount,
tax code etc.
After this select the row as per need.
Export this to the spreadsheet show, this may help the user.
Check the information, and if all is correct then post that bill.
After posting, the entry will be passed:-
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For transferring into Vendor a/c Fbv0
For display all financial document, which has been set-up in the
contract Fb03
For display the tax amount FT
For clear the account of open vendor F44
With this entry, transporter account will be credited to that amount
and
Payment for freight charges will be given to ML from Kandivli(Mumbai) & ML
paid to transporters.
Freight A/c- Dr.
To transporter a/c
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SOME IMPORTANT DOCUMENT USED IN TRANSPORT-
Form 16
Lorry receipt
Pick-list
Form F & C
PAYMENT PROCEDURE
Finally after performing the whole process of Bill Passing, now the time
comes for its payment. The bill is ready for payment after it has gone
successfully passed. The payment is being made as per its due
date,which is mentioned in the invoice.Payment is made to the vendor and
for other expenses incurred for running the day-to-day expenses.
Separate set of transactions are used for making payment in both the
cases.
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Below is the chart showing the transactions used in payment tovendors and payment for Expenses.
General Expenses Vendor
Transaction code F-02 F-53
Entry
Expenses a/c - Dr.To Bank a/c
Expense a/c Dr.To Vendor a/c
Document TypeMC ZK
Cheque Printing
Zmck Fbz5
Transaction Code fordisplay the list of printedcheque
FCHI FIHI
AdviceZf10 Automatically with
cheque
1.Manual cheque payment:
Put transaction code : F-02(for payment of expenses)
The below screen will displayed
PAYMENT
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Fill document date , Document type ,Company code, currency rate.Posting
date,Period Refernce no.- shown in bill
First line item- Pstky shows the debit/credit &for debit the general
expenses 40 will
be used.Account no. shows the no. of receive.
First line item execute document generated &automatically
entry passed
Expenses a/c Dr.
To Bank a/c
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Cheque printing:
Transaction code Zmck
In this all information will be displayed:
Company code, Fiscal year, House bank, Account Id
Fill them and execute
Then click on print option & put the on the printer.
Cheque issued by Bank to make payment, entry of no. of cheque given to
account
dept. is maintained by bank in its books.
For display the cheque lots Fchi
For cheque register Zf53
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2.Vendor cheque payment:
Put transaction code : f-53
Fill the following information:
Document date, type, company code, Bank data etc. Special G/L item
Process open item {screen will displayed, fill in that assignment (cheque
no.), text (party name)
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Document stimulate
After stimulation entry will be generated:
Like this
Expense a/c Dr.
To vendor a/c
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For check printing fbz5
After this fihi transaction code will be used to display cheque lots.
With the help of this the payment will be made to the specific party
In M&M ltd. Rudrapur, payment only for indirect material will be made,
other payment are be made from the M&M ltd. Kandivli.
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Chapter 4: Freight cost analysis &
findings
An analysis
Findings
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FREIGHT COST ANALYSIS
YEAR 2007 2008
AMOUNT OF FREIGHT 25 crores 30 crores
Above data shows that the cost of freight has been increased in 2008 in
comparison to 2007. Generally it will be treated as a bad signal that cost
has been increased, but it not be necessary, and supported by the
following reasons:
REASONS FOR INCREASE IN FREIGHT COST
Increase in the production volume.
Faster mode at time of emergency in order to avoid the situation of
less or no production.
Sometime increase in the detention charges, which arises on
receiver when he will not unload the material at time .
Hike in Oil Prices
As the production of the plant has been increased, so rise in freight cost
is not a bad signal. On the other hand, it can not be ignored that sometime
improper management may also lead to the rise in the cost.
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FINDINGS
The freight process applicable in M&M ltd. Rudrapur, is very effective. The
processes to be followed are clearly laid down and the authority at every
level is well defined. The planning as well as the utilization procedure
norms are clearly laid down and are followed to a large extent by all the
units concerned.
It greatly helps in cost controlling. The result of this is that last year
Account dept. has won the AKRAMAN award for cost saving.
Infact whole process is good, but due to some small loop-holes better
results are bared.
Some small problems are:
As we discuss that freight bill passing is a manual process, so it
may contain some manual errors like slow speed, incorrect parking
due to mistake etc.
Cheat by transporter regarding weight & quantity
Late receiving of bills.
Double invoice by transporter.
No document in SAP for unloading of material.
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Chapter 5: SUGGESTIONS &
PROSPECTIVE PROCESS
Suggestions
Prospective process
regarding payment for
material
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SUGGESTIONS
Dont wait for the best idea,
Implement the better one,
Still better and the best will follow.
There are certain areas in which the system can undergo improvement.
The suggestions will come from the users themselves. But some
suggestions according to my research are:
PCS should be generated timely
Firstly, try to automate the freight bill passing process.
In manual process, random sampling of the bills of the transporter
will be done in order bared the fraud.
In random basis, GR. Information will matched with bills so that
transporter have
Some fear, due to this they not try to cheat.
The authorized person should rectify the mistakes immediately and
inform the vendor about the same, hence the bill passing follows.
As we know that freight is a very important part of cost of production,
so if this cost can be controlled the overall cost of product can be
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minimize, and it results in better profit generation for the company. The
image of company will also be increased.
PROSPECTIVE PROCESS
At the time of entrance of material PCS must be generated at gate
no. 1.
Gate entry stamp should be placed invoice copy.
When material will enter into factory gate the PCS should be
generated immediately.
In order to verify goods receipt into store GR should be punched
within 24 hours after PCS generation.
It is essential that the invoice must be submitted to the SC within 2
days after generation of GR.
SC person should properly check the received bills and if no error
is found then pass the bill for payment within 3 days.
In case of any error like tax condition, rate difference, tax code etc.
the bills should be return to the buyer within 24 hours of its receipt
with reason.
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Chapter 6: CONCLUSION AND LIMITATION
OF THE STUDY
Conclusion
Limitation
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CONCLUSION
At la