Freight Project

8/3/2019 Freight Project

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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 costeffective 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:


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


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

Documents

Freight Project