Summer Training Report

On

MATERIAL COST CONTROLFor the partial fulfillment of the award of

Bachelor of Business Administration

(2008-2011)

Submitted To Submitted by

JIWAJI UNIVERSITY GWALIOR AKASH GUPTA

BBA-V Sem.

PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR

 Airport Road, Near Deen Dayal Nagar, Gwalior-474020Email: info@prestigegwl.org; Website: www.prestigegwl.org    

                                   

DECLARATION

I AKASH GUPTA, student of BBA V Semester of Prestige Institute of

Management, Gwalior, hereby declare that the project is my original piece of work

and not the copy of any such work undertaken by someone else, all the

information , facts and figures presented in the report are first hand in nature. They

are actually based on my intense efforts conducted in CADBURY INDIA LTD. I

have completed this project under the guidance of Prof. NAVITA NATHANI

( Faculty PIMG)

Date: AKASH GUPTA

BBA –Vth SEM

CERTIFICATE

This is to certify that Mr.AKASH GUPTA Student of BBA Vth Semester

programme has completed her summer training of 4 weeks and prepared this report

of “MATERIAL COST CONTROL” under my guidance.

 

Date: Prof. NAVITA NATHANI

(Faculty Guide)

    

     

    

 

   

   

   

   

   

   

  

ACKNOWLEDGEMENT

The present work is dedicated to the persons who not only taught me, but continue

inspire me in knowing the clandestine facts of workmanship. I bow in honor before

these great teachers. The accomplishment of the present study became possible by

the invaluable assistance and guidance of my professional guides to whom I may

gratefully indebted. Firstly I would like to express my sincere gratitude to my

faculty guide Prof. NAVITA NATHANI without whose invaluable guidance,

moral support and encouragement my work would have ever assumed the present

shape, research. I was indebted to my parents and friends for their moral support

and possible efforts they made for me.

Date: AKASH GUPTA

BBA –V SEM

INDEX page no

History of the Organization & Objective

Organizational Structure

Financial Performance

Material Cost Control

Production & Operations

Marketing

Strength & Weakness of the Organization.

Suggestion

Special Point

Names of the CEO/MD/Department Head

Chapter -1

Introduction

Chapter –II

Objective of The Study

Chapter –III

Result & Discussion

Chapter – IV

Suggestion

Chapter –V

Conclusion

HISTORY OF THE ORGANISATION AND OBJECTIVE

CADBURY INDIA

Cadbury began its operations in 1948 by importing chocolates and then re-packing

them before distribution in the Indian market. After 59 years of existence, it today

has five company-owned manufacturing facilities at Thane, Induri (Pune) and

Malanpur (Gwalior) , Bangalore and Baddi (Himachal Pradesh) and 4 sales offices

(New Delhi, Mumbai, Kolkota and Chennai). The corporate office is in Mumbai.

Our core purpose “Working together to create brands people love” captures the

spirit of what we are trying to achieve as a business. We collaborate and work as

teams to convert products into brands. Simply put, we spread happiness! Currently

Cadbury India operates in three sectors viz. Chocolate Confectionery, milk food

Drinks and in the Candy category.

In the Chocolate Confectionery business, Cadbury has maintained its undisputed

leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star,

Perk, Éclairs and Celebrations. Cadbury enjoys a value market share of over 70%

the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy

Milk is considered the “gold standard” for chocolates in India. The pure taste of

CDM defines the chocolate taste for the Indian consumer.

In the Milk food drinks segment our main product is Bourn vita – the leading

Malted Food Drink (MFD) in the country. Similarly in the medicated candy

category Halls is the undisputed leader. We recently entered the gums category with

the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is

sold in 25 countries worldwide. The Cadbury India Brand Strategy has received

consistent support through simple but imaginative extensions to product categories

and distribution. A good example of this is the development of Bytes. Crispy wafers

filled with coca cream in the form of a bagged snack, Bytes is positioned as “The

new concept of sweet snacking”. It delivers the taste of chocolate in the form of a

light snack, and thus heralds the entry of Cadbury India into the growing bagged

Snack Market, which has been dominated until now by Salted Bagged Snack

Brands. Bytes were first launched in South India in 2003.

MALANPUR FACTORY

In 1989 the company stated manufacturing operations from its third and newest

factory at Malanpur near Gwalior in M.P.

Using the most modern state of the art technology, the unit today manufactures

range of liquid milk chocolate and a variety of enrobed chocolate products.

Factory in 8 phases

1988-89 - Éclairs & Gems

1994-95 - 5 Star

1997 - Perk

2001 - Chocolate expansion

2005 - Fruity Gems

2006 - Ultra Perk

2008 - Short

2009 - Éclair Sticks

LOCATION : Plot No. 25, Malanpur Industrial area, Malanpur

distt. – Bhind.

Telephone No. : 07539-83803, 83804

Parent Company : Cadbury Schweppes International UK

Total Area 24 Acres – Constructed 8.5 Acre

HISTORY OF ORGANISATION

Fifty years ago, the real taste of chocolate as we know it today, landed on Indian

shores. An event that carried forward the entrepreneurship and vision born as far

back as 1824, when John Cadbury set up shop in Birmingham (UK) to sell among

other things – his own cocoa concoction. From these modest beginnings emerged

Cadbury Schweppes – that is today the leading manufacturer of confectionery and

beverages in the United Kingdom. A company that has its presence in over 200

countries worldwide and has made the name ‘Cadbury’ synonymous with cocoa

products in countries across the planet.

This is the brand that came to India in 1947 to a nation that was in its infancy, a

market that was ready for the world and a people that were open to new ideas, new

products.

Within a year of being set up as a trading concern, Cadbury fry India was

incorporated as a Private Limited company, set up for processing imported

chocolates and Bourn vita. The same year saw the launch of Cadbury’s Milk

chocolate for millions of Indians.

Through 50 years of investment in capital and marketing, the scale and scope of our

operations has expanded to cover a range of brands in the chocolate, sugar

confectionery and malted food drinks segments. We have a majority share in the

Indian chocolate market and a significant presence in sugar confectionery and food

drinks.

Today Cadbury India Ltd, a subsidiary of Cadbury Schweppes employs over 200

people across the country. And operates in one of the fastest growing chocolate

markets for Cadbury Schweppes group across the globe.

ORGANISATION STRUCTURE

Chairman         C Y Pal    Chairman - Non Executive     

     Managing Director         

   

Anand Kripalu    Managing Director     

     Non-Executive Directors         Harsh Mariwala    Radhakrishnan B. Menon    Suresh Talwar     

     Executive Directors    

 

Atul Bhatia Executive Director - Science & Technology

 Rajesh Garg Executive Director - Finance & Commercial

 

 

Jaiboy PhillipsExecutive Director - Supply Chain

 Sanjay PurohitExecutive Director - Marketing

     

 

Sunil SethiExecutive Director - Sales & Customer Development

 V ChandramouliExecutive Director - HR & Strategy

     

     Senior Management         Ashish Pisharodi   Rajesh RamanathanVice President - Modern Trade

 Vice President - People & Talent

     Shivanand Sanadi   Dr. Shantanu SamantVice President - Legal Affairs

 Vice President - Science & Technology

     Vivek Sarbhai   Dharmesh Joshi Vice President - Logistics & Customer Operations

 Vice President - Manufacturing Development

     Sherezad Irani   Sanjay KurupVP - Procurement   VP - Manufacturing (Baddi)      Monaz Noble    Company Secretary     

FINANCIAL PERFORMANCE

Finance holds the key to all human activity. Finance department of malanpur

factory is also working in the same direction and with the same objective but it

has some limitation because most of the importance finance related matter are

directly dealt and finalized by the central finance department in the Mumbai head

office.

Factory finance department always endeavors of maximizing the profit of high

company through two possible ways:

1. Reduction in cost

2. Increase in Sales

FINANCIAL FUNCTIONS

1. Preparing variance report

a) Material user variance report

b) Packaging material user variance report

2. Production report

3. Excise related matter

4. Export related matter

5. Payment to small engineering items and other goods.

MATERIAL COST CONTRL

MATERIAL COST CONTROL

Material cost control is the management of cost of material it consists of the

following .

1. Capital costs

2. Storage costs

3. Risk of price decline

4. Risk of obsolescence

MATERIAL

Material is very important factor for production. it includes physical commodities

used to manufacture the final end product. It is the starting point from which the

first operation starts. Material refers to all of commodities in the process of

manufactures. Proper control of material is necessary from the time orders of

purchase material are placed with supplies. Until the have been consumed.

COST

It is the amount of resources given up in exchange for some goods or services. The

cost is that which is given or a sacrifice to obtain something cost is also different

from value as cost is measured in terms of money whereas values is measured in

terms of usefulness or utility of an article.

We can define as: the amount of expenditure (actual or notional) incurred on or

attributable to a given thing or to ascertain the cost of a given thing.

Methods of controlling the size of material:

There arc two method of controlling as follows:

1) Standardization.

2) Simplification.

Standardization and simplification are the tools of material control to optimize on

the number of items and reduce the size of material, carried in the stores.

Standard institutions:

Standardization and simplification are the continuous process

for controlling the size of materials, so there are many institutions regarding the

help of this, these arcs as follows

. Indian Standard Institute.

. International Organization for Standardization.

. Other Specialilised Institutions.

Types of stores department:

I) centralized stores

2) Decentralized stores

3) Central stores with sub- stores.

1) Centralized stores :In case of such a store, material are received by and issued

from one stores department materials kept at one central store.

2) Decentralized stores:

Under this type of stores, independent stores are situated in various departments.

Such types or stores setup to meet the requirements of materials of each production

department are not very popular because of the heavy expenditure involved.

3) Central stores with sub-stores:

Such stores should be situated near production departments. For each item of

material, a quantity is determined and this should be kept in stock in sub-store at the

beginning of any period .In the end of a period the storekeeper of each sub-store

will requisition from the central stores.

Fixation of KO.Q. And various level:

A) E.O.Q.:

The decision about how much order has great significance in inventory

management .the quantity should be order neither small nor big because cost of

buying and carrying material are very high.

Economic order quantity is the size of the lot to be purchased which is

economically ) viable .this is the quantity of material which can be purchased at

minimum costs .economic order quantity is the point at which inventory carrying

cost is equal to order costs E.O.Q. is made. 01' two parts.

Ordering cost. Carrying cost.

EOQ = 2All

I

Where:

A Annual.

B Cost of placing an order/. Ordering cost or buying cost

PCI' unit

1 Inventory carrying cost of one unit

C*S(cost per unit*storage cost)

a) Minimum Level or safety stock level:

It represent the minimum qty. of an item, which must be keep in store at all

time .the main (II' determination of minimum level is that ,due to this, production

should not be stoped.Calcu1all' formula of min. stock level is as follows

Minimum level = Re-ordering level-(Normal consumption*Normal

Re-order – period

.

b) Maximum Level:

It represents the maximum quantity of an item of material which can be held in

stock at any time .stock should not exceed this quantity .the quantity is fixed so that

there may bb no overstocking .the formula of maximum stock level given by

WHELDON is as follows

Maximum stock level= Reordering level + Re-ordering Quantity-(Minimum

Consumption*Minimum Reordering period)

'--

c) Average stock level:

The average stock level is calculated by the following formula:

Average stock level = Minimum stock level + ½ of re-order quantity

d) Reordering level:-The order is sent before the materials reach minimum stock level.

Re-order level = Safety stock + (Average usage *Average re=-order period)OR

Maximum consumption * Maximum Re-order periodOR

Maximum usage * Maximum lead time

SAMPLE & TOOLS

1. First in first out (FIFO) method:

Under this method material is first issued from the earliest consignment on hand

and priced at the cost at which that consignment was placed in the stores .in other

words, materials received first arc issued first. The units in the opening stock of

materials are treated as if they are issued (first,

the units from the first purchase issued next and so on until the units left in the

closing stock of materials arc valued at the latest cost of purchases.

['his method is most suitable in times of falling price of materials to jobs or works

orders will he high, while the cost of replacement of materials will be low .but in

case of rising prices this method is not suitable because the issue price of materials

to production will be low ,while the cost of replacement of materials will be high.

Advantages of FIFO Method:

. Main advantage of FIFO method is that it is simple to understand and easy to

operate.

. It is logical method because it takes into consideration the normal procedure. Of

utilizing first those materials which arc received first .Materials are issued in order

of purchases, <; 0 materials received first are utilized first.

. Under this method, materials are issued at the purchase price; so the cost of jobs or

work order is correctly ascertained so far as cost of materials is concerned. Thus,

the method recovers the cost price of the materials.

. This method is useful when prices are falling.

. Closing stock of materials will be valued at the market price as the closing stock

under this method would consist of recent purchase of materials.

. This method is also useful when transactions arc not too many and price of

materials are fairly steady.

Disadvantages of FIFO method:

. This method is increase the possibility of clerical errors, if consignment are

received frequently at fluctuating prices as every time an issue of materials is

made ,the store ledger clerk will have to go through his record to ascertain the price

to be charged.

. For pricing one requisition more than one price has often to be taken.

. When prices rise ,the issue price does reflect the market price as material are issue

from the earliest consignment .therefore the change of production is low because

the cost of replacing the material consumed will be higher than the price of issue.

2) Last in first out method (LIFO) method:

The issues under this method are priced in the reverse order of purchase i.e., the

price of the latest available consignment is taken. This method is sometimes known

as the replacement cost method because materials are issued at the current cost to

jobs or work orders except when purchases were made long ago. This method is

suitable in times of rising prices because material will be issued from the latest

consignment at a price which is closely related to the current price levels. This

method was first introduced in the U.S.A.during the Second World War to get the

advantages of rising prices

Advantages of LIFO Method:

. Like FIFO method, this is simple to operate and is useful when transactions are

not too many and the prices are fairly steady.

. Like FIFO, this method recovers cost from production because actual cost of

material is charged to production. .

. In times of rising prices, LIFO method of pricing issues is suitable materials are

issued at the current market prices which arc high .this method thus helps in

showing a lower profit because of increased charged to production during

periods of rising prices and lower profit reduces burden of income-tax..

Disadvantages of LIFO Method

. Like FIFO, comparison between one job and the other job will become difficult

because one job started a few minutes after another of the same type many bear

are different charged of materials consumed.

. Like FIFO, this method many lead to clerical errors as every time as issue is made.

till. Stored ledger clerk will have to go through the record to as certain the price to

be charge’. For pricing a single requisition, more than one price has often to be

adopted. . The stock in hand is valued at price which does not reflect current market

price.

3) A VERAGE COST METHOD:

The principle on which the average cost method is based is that all of the materials

in store arc show mixed up that an issue can not be made from any particular lot of

purchases and, there fore, it is proper if the materials arc issued at the average cost

of materials in store.

Average may be of

two types:

I) Simple arithmetic average.

2) Weighted arithmetic

average.

Simple average price: A price which is calculated by dividing the total of the prices

of the material in the stock from which the material to be period could be drawn by

the number of the prices used in that total.

Weighted average price: A price which is calculated by dividing the cost of

materials in the stock from which the materials to be priced could be drawn by the

total quantity of materials in the stock.

2.2. OBJECTIVE OF STUDY

OBJECTIVE OF STUDY

1. To highlight the policies and procedures of Material cost control

2. To make a detailed analysis of the strategies adopted by the company for

planning and monitoring costs

3. To identify the vertical areas where greater attention is needed for better

management.

4. To find our better plan for company for controlling material.

PERSONAL POLICIY

QUALITY ASSURANCE OF CADBURY

1. Market high quality, superior value products that consistently meet our

specifications and comply with local regulatory requirements, while continuously

improving and exceeding our consumers ‘expectations.

2. Guarantee that our customers and consumers come first by actively

listening and understanding their quality and value expectations at the points of

purchase and consumption.

3. Ensure that any representation of our company image, including our products and

trademarks, meet approved standards, reinforce our commitment to quality and

safeguard the reputation of Cadbury.

4. Maintain a “right first time” culture that consistently embraces quality and food

safety, where everyone understands their responsibilities and accountabilities.

5. Operate audited quality management systems that continually improve processes

to deliver this policy and our standards.

6. Assign clear management accountability for setting and meeting measurable

goals and targets for quality and food safety.

7. Work with our supply chain and business partners to assure compliance with our

quality policy and systems, ensuring quality throughout our supply chain.

8. Place continuous improvement at the heart of our performance enabling us to

deliver superior products and service to our consumers and customers.

9. Create a passion for quality where success and achievement are communicated,

recognized and celebrated.

ENVIRONMENT, HEALTH AND SAFETY POLICY

At Cadbury PLC , we see sound and responsible environmental, health

and safety (EHS) management as an integral part of achieving our goal to grow

the value of our confectionery and beverages businesses for our shareowners.

We believe that such an approach will generate and sustain significant

environmental, social and financial benefits, thereby contributing to our objective

of long-term sustainability.

1. Conduct our business in compliance with environmental, health and safety laws

and with our global standards, and regularly assess the compliance of our

operations against these requirements.

2. Maintain and continually improve systems to manage our EHS responsibilities,

establishing and ensuring employee accountability for our EHS performance at all

levels of the organization.

3. Set clear targets for continual improvement in our EHS performance and monitor

these targets to ensure that they are met.

4. Strive to prevent pollution and to minimize the environmental costs and impacts

of our global operations.

5. Provide a safe and healthy environment for our employees, contractors and other

visitors to our sites

6. Train and motivate our employees to understand their EHS responsibilities and to

participate actively in our EHS programmers

7. Communicate with our shareowners, employees, customers and other interested

parties by regularly reporting on our EHS performance and maintaining an open

dialogue.

8. Review and update this policy regularly.

PRODUCTION & OPERATION

PRODUCT OF MALANPUR FACTROY

The story of Cadbury Dairy Milk started way back in 1905 at Bourneville, U.K.,

but the journey with chocolate lovers in India began in 1948.

The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they

think of Cadbury Dairy

Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the

urge for 'something sweet' after meals.

Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie,

chocolate with Disney characters embossed in it, and Cadbury Dairy Milk 2 in 1, a

delightful combination of milk chocolate and white chocolate. Giving consumers an

exciting reason to keep coming back into the fun filled world of Cadbury.

Our Journey:

Cadbury Dairy Milk has been the market leader in the chocolate category for years.

And has participated and been a part of every Indian's moments of happiness, joy

and celebration. Today, Cadbury Dairy Milk alone holds 30% value share of the

Indian chocolate market.

In the early 90's, chocolates were seen as 'meant for kids', usually a reward or a

bribe for children. In the Mid 90's the category was re-defined by the very popular

`Real Taste of Life' campaign, shifting the focus from `just for kids' to the `kid in

all of us'. It appealed to the child in every adult. And Cadbury Dairy Milk became

the perfect expression of 'spontaneity' and 'shared good feelings'.

The 'Pappu Pass Ho Gaya' campaign also went on to win Silver for The Best

Integrated Marketing Campaign and Gold in the Consumer Products category at the

EFFIES 2006 (global benchmark for effective advertising campaigns) awards.

Did You Know:

Cadbury Dairy Milk emerged as the No. 1 most trusted brand in Mumbai for the

2005 edition of Brand Equity's Most Trusted Brands survey.

During the 1st World War, Cadbury Dairy Milk supported the war effort. Over

2,000 male employees joined the armed forces and Cadbury sent books.

MARKETING OF CADBURY

Dairy Milk has always tried to keep a strong association with milk, with slogans such as "a glass and a half of full cream milk in every half pound" and advertisements that feature a glass of milk pouring out and forming the bar.

A

campaign for the Fruit & Nut variety ("everyone's a fruit and nutcase")

was particularly memorable and featured the writer, radio and television

personality Frank Muir.

On 9 March 1976, American singer Neil Diamond performed a concert televised

throughout Australia during which he did a humorous live commercial

for Dairy Milk. This concert, including the ad as a bonus selection, was

released on DVD on 1 July 2008.

In 2004, Cadbury's started a series of television advertisements in the United

Kingdom and Ireland featuring a person and an animal representing the person's

happiness debating whether to eat one of a range of bars including Dairy Milk.

In 2005, Cadbury's original Dairy Milk bar celebrated its 100th birthday, being first

sold in 1905. It remains the UK's biggest selling chocolate brand. Dairy Milk is sold

in the United States under the Cadbury label, but it is manufactured by the

Hershey's company in Pennsylvania.

On 28 March 2008, the second Dairy Milk advert produced by Glass and a Half

Full Productions aired. It features several trucks at night on an empty runway at a

Mexican airport racing to the tune of Queen's "Don't Stop Me Now". The ad

campaign ran at the same time as the problems at Heathrow Terminal 5 with

baggage handling; in the advert baggage was scattered across the runway.

On 5 September 2008, the Gorilla advert was relaunched with a new soundtrack –

Bonnie Tyler's "Total Eclipse of the Heart" – a reference to online mash-ups of the

commercial. Similarly, a version of the truck advert appeared, using Bon Jovi's

song "Living' on a Prayer".

News Related to Cadbury

1. Cadburys relaunches Bourneville chocolates news 15 October, 2008

Bourneville, a much neglected dark chocolate bar from Cadburys' has been

relaunched as a new category of dark chocolates in India.

"Dark chocolate is one of the fastest growing categories abroad. However, in India,

it is still in a nascent stage.

Thus, we are almost doing category creation with this launch," said Sanjay Purohit,

executive director- marketing and international business, Cadbury India

2. Festive campaigns by Coca Cola and Cadburys news 03 October 2008

Coca Cola has launched a special festive season communication drive of its

carbonated drink brand Thums Up. While the "Taste the Thunder" TV

commercial features Akshay Kumar performing acts like mountaineering and

roller coaster ride, the company is also launching a similar initiative for the market

in southern states featuring Tollywood star Mahesh Babu.

The initiative comes as a follow-up to the company's announcement of venturing

into the 350 ml pack segment of all its major brands.

3. Cadbury and Tamil Nadu Agricultural University join hands for cocoa

research project news 30 May 2008

Mumbai: Cadbury Asia Pacific, the Asian arm of UK confectionery giant Cadbury

Plc, has recalled 11 types of its Chinese-made chocolate as a precaution, the Hong

Kong government said in a statement.

In a statement, issued from its Singapore office, Cadbury said it has

recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of

our products manufactured in China.''

The products were meant for distribution in Taiwan, Hong Kong and Australia, it’s

said.

Tests ''cast doubt on the integrity of a range of our products manufactured in

China,'' Cadbury said in the statement issued from its office in Singapore.

4. Cadbury, others recall China-made confectionery news 29 September 2008

Mumbai: Cadbury Asia Pacific, the Asian arm of UK confectionery giant Cadbury

Plc, has recalled 11 types of its Chinese-made chocolate as a precaution, the Hong

Kong government said in a statement.

In a statement, issued from its Singapore office, Cadbury said it has

recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of

our products manufactured in China.''

5. Worm turns for Cadbury news Mohini Bhatnagar 28 November 2003

Hyderabad: The worms in the chocolate bars controversy has hit Cadbury India

where it hurts most and that is in sales. The company today faces tough

times ahead as the business environment for its chocolates becomes

increasingly negative with rising raw material prices and low consumer sentiments,

post the worms controversy in October this year.

6. Cadbury India net profit at Rs 190 million news 13 July 2002

Mumbai: Cadbury India Ltd has posted a net profit of Rs 190 million for the

quarter ended 16 June 2002 as compared to Rs 93.60 million for the quarter ended

17 June 2001.

STRENGTH & WEAKNESS

Strengths

Cadbury is the largest global confectionery supplier, with 9.9% of global

market share.

Strong manufacturing competence, established brand name and leader in

innovation.

Advantage that it is totally focused on chocolate, candy, chewing

gum, unique understanding of consumer in these segments.

Weaknesses

The company is dependent on the confectionery and beverage market,

whereas other competitors e.g. nestle have a more diverse product portfolio,

where profits can be used to invest in other areas of the business and R&D.

Other competitors have greater international experience - Cadbury has

traditionally been strong in Europe. New to the US, possible lack of

understanding of the new emerging markets compared to competitors.

Suggestions

1. Necessary knowledge and skills about new learning strategies at all levels;

2. Accreditation of the current teacher training and staff development programs

offered by various providers;

3. A critical mass of local experts to spread the new knowledge and skills

throughout the teachers in the country;

4. Suitable alternative model for in-service training;

5. A plan for national implementation;

Indication of support and commitment by the government

SPECIAL POINT

Use of Advertising'

No. 1 FMCG Company

Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG

company in India in 2008, by the Great Place to Work Institute.

Great Place to Work 2007'

Cadbury India' has been awarded the "Bronze Award for Excellence in People

Management" in the 'Great Place to Work 2007' survey conducted by Grow

Talent Company Limited and Business world. The award recognizes Cadbury India

as a national leader in the area of Human Resource Management.

Great Place to Work 2007'

Cadbury India' has been awarded the "Bronze Award for Excellence

in People Management" in the 'Great Place to Work 2007'

survey conducted by Grow Talent Company Limited and Business world. The award

recognizes Cadbury India as a national leader in the area of Human

Resource Management.

Cadbury India received a bronze award at the Cannes Lions International

Advertising Festival for partnering with a mobile phone operator in 2005 to provide

exam results via SMS to school children.

Reader's Digest Award recognizes Bourn vita

Bourn vita won the 'Reader's Digest Trusted Brands' Gold Award

for the vitamin health supplement category in Indian in 2006.

The merit was based on 7000 responses from questionnaires and

telephone interviews across Asia.

Suraksha Puraskar Award – 2005

Cadbury India's Bangalore factory has received the

"Suraksha Puraskar" safety award from the National Safety

Council - Karnataka chapter.

ABBY Award wins for India.

The prestigious ABBY awards, held in March, recognize creative excellence

in the Indian Advertising Industry. The Ultra Perk campaign won four Silver

Awards in total and the Cadbury Dairy Milk Campaign, Miss Palampur,

also won a Silver Award. This year Cadbury also sponsored the new 'Young

ABBY' Award.

Cadbury wins the Effies 2006

At the recent Effie 2006 awards organized by The Advertising Club of Mumbai, our

'Pappu Pass Ho Gaya' advertising campaign bagged two more awards - Gold in the

Consumer Products category and Silver in the integrated advertising campaign

category.

INTRODUCTION

INTRODUCTION of TOPIC

In India we believe that effective communication and availability of information at the

right team and time and right place is critical for an edge in business. In order to

achieve this we realize to importance of and have in place, an effective IT

infrastructure.

Cost accounting isn’t just collecting data for history. it is an important tool in

predicting and assuring future profitability . We can’t overstress the importance of

our costing tools that provide complete cost estimates at the time of quotation/order

entry based on your latest materials, labor and overhead costs.

MATERIAL COST CONTROL

Material cost control is the management of cost of material it consists of the

following.

5. Capital costs

6. Storage costs

7. Risk of price decline

8. Risk of obsolescence

MATERIAL

Material is very important factor for production. it includes physical commodities

used to manufacture the final end product. It is the starting point from which the first

operation starts. Materials refer to all of commodities in the process of manufactures.

Proper control of material is necessary from the time order of purchase material is

placed with supplies. Until the have been consumed.

COST

It is the amount of resources given up in exchange for some goods or services. The

cost is that which is given or a sacrifice to obtain something cost is also different from

value as cost is measured in terms of money whereas values is measured in terms of

usefulness or utility of an article.

We can define as : the amount of expenditure ( actual or notional ) incurred on or

attributable to a given thing or to ascertain the cost of a given thing.

RESULTS & DISCUSSION

During my research in “CADBURY INDIA LTD., MALANUR” I found that

MATERIAL COST CONTROL is an integral part of industrial success.

For purchasing material we should concentrate on the cost of material through

material cost control company can take a top position in corporate market.

Material cost has played a very important role in economic condition of

company.

After analyzing the data I have reached the conclusion that the miscellaneous

expenditure of the company has reduced which is good sign and shows the

capability of the company in handling wastage, losses and bad debts.

DISCUSSION

I have found here these below things from analysis of data.

For economic purchase order of 114 units of MS PIPE. We analysis of three

quotations for choosing lower cost of material. We select the B.D. Raj. & Co’s

quotation because the lower cost of material. This is the 56185.469 with

applying 4% ST & fright.

In store material we found these below things from the store keeping receipt.

Here we show about the two type of material.

ITEM CODE Re-order level Max. stock

level

Min. stock

level

Avg. stock

level

CC5801008 1290 1700 540 990

CC5801009 2700 3600 900 1500

As such we can get these levels for further items.

For issuing the material we found the knowledge through FIFO and LIFO

method. How material received in store and how should issue it from the store

etc.

During my research period. I have found material cost control management of

the company is very sound that’s why their economic position is also very

sound.

OBJECTIVES OF STUDY

OBJECTIVES OF STUDY

1. To highlight the policies and procedures of Material cost control

2. To make a detailed analysis of the strategies adopted by the company for

planning and monitoring costs

3. To identify the vertical areas where greater attention is needed for better

management.

4. To find our better plan for company for controlling material.

SUGGESTIONS

There are some suggestion,which may certainly improve the efficiency of material

cost control management.

FIFO and LIFO methods should be apply for keeping and issuing the material

in stores.

I suggest through research in this regard to arrive at some suitable mix of both

this method which gives due consideration to value, quality importance etc of

stock items.

The maximum and minimum level of each item should be indicated to avoid

over-stock or under-stock situation.

Internal performance report an inventory on at least monthly basis should be

prepared to study the material price variance, material usage and inventory

level variance from hr estimate figure.

Material should be purchase at the lower cost but also quality should be

maintains.

CONCLUSION

References (Co site )

link retrieved on -----date

1. Kothari C.R. , Research methodology (Methods & Techniques),

Wishwa Prakashan, 24th Reprint March 1999/

2. CHANDRA PRASANNA, FINANCIAL MANAGEMENT, Tata Megraw-

Hill publishing com. Ltd. New Delhi, Fifth edition 2002.

3. Shukla SM, ACCOUNTING FOR MANAGERS, SAHITYA BHAWAN

PUBLICATION COM. Ltd Raipur.

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