Summer Internship Project Report_

©Max Retail Page 1

Warehousing and Supply Chain Management

SUBMITTED TO:

Prof. Rajeev Sharma

SUBMITTED BY:

Student Name: Anand Narayan Shukla

Roll No: 10Rm904

Course: PGDM (Retail Management)

Batch: 2010-2011

©Max Retail Page 2

PREFACE

The purpose of this report is to explain what I did and learned during my internship period

with the Lifestyle International Pvt. Ltd.-Max Retail Division in the Division of RDC

Bangalore (BRDC), Karnataka. The report is also a requirement for the partial fulfillment of

BIMTECH summer internship program. The report focuses primarily on the warehouse

process manual, working environment, successes and shortcomings that were encountered

when handling various tasks.

The different chapters of the report reflect the different warehouse processes, analysis on

certain parameters and some cost cutting measures. Therefore the report also gives a number

of comments and recommendations.

©Max Retail Page 3

ACKNOWLEDGEMENT

We express our sincere gratitude towards all those people who have helped us in the

preparation of this project, which has been a learning experience.

Our sincere thanks to Mr.Baiju Pillai (Manager- Logistics, Max Retail), Mr.Amrut Shetty

(Sr. Executive, Max Retail), Mr. Krishna (Regional Warehouse Manager (South)) and

Mr.R Visvesvaran (Asst. Warehouse manager, BRDC) under whose able guidance and

kind cooperation we were able to complete the project work.

We sincerely thank for the help provided by my institute “Birla Institute Of Management

Technology” which gave us an opportunity to go for the Summer Internship Program by

providing us the necessary material and support for completion of this project.

We are also thankful to our sincere faculty Prof. Rajeev Sharma for his support throughout

the endeavor.

Also, we thank all the BRDC staff who supported us and without their help project

completion was not possible.

Date – 10 June 2011

Anand Narayan Shukla

©Max Retail Page 4

Contents PREFACE............................................................................................................................................2

ACKNOWLEDGEMENT .................................................................................................................. 3

CHAPTER – 1 ...................................................................................................................................... 7

ComPAny REviEw ............................................................................................................................. 7

LANDMARK GROUP .............................................................................................................................. 8

MAX RETAIL ........................................................................................................................................... 8

OUR VISION AND MISSION ............................................................................................................... 9

SWOT ANALYSIS OF MAX ................................................................................................................ 10

Strengths ..................................................................................................................................... 10

Weakness .................................................................................................................................... 10

Opportunities .............................................................................................................................. 10

Threats ........................................................................................................................................ 10

CHAPTER – 2 .................................................................................................................................... 11

wAREHousE PRoCEss mAnuAl .................................................................................................. 11

List of figures ....................................................................................................................................... 12

INTRODUCTION ................................................................................................................................... 13

RECEIVING ........................................................................................................................................... 14

Vendor ............................................................................................................................................ 14

LR Slip .......................................................................................................................................... 14

Excise Invoice .............................................................................................................................. 15

Packing Slip ................................................................................................................................. 15

Purchase Order ........................................................................................................................... 16

Q C Report ................................................................................................................................... 16

Store returns ................................................................................................................................... 18

Back to back .................................................................................................................................... 18

Concessionaire ................................................................................................................................ 18

Problems at receiving end .............................................................................................................. 19

SECURITY ENTRY ................................................................................................................................. 19

MGRN ENTRY ...................................................................................................................................... 19

INWARD SCANNING ............................................................................................................................ 20

GRN ..................................................................................................................................................... 22

Problematic Remarks .......................................................................................................................... 24

DISCREPANCY REPORT ........................................................................................................................ 25

©Max Retail Page 5

STOCK UPDATION ............................................................................................................................... 26

INTERFACE .......................................................................................................................................... 26

ROLE OF ACCOUNTS DEPARTMENT .................................................................................................... 26

PLANNERS ........................................................................................................................................... 26

OUTBOUND ALLOCATION ................................................................................................................... 26

PULLOUT ............................................................................................................................................. 28

Problems at pullout ........................................................................................................................ 29

BINNING .............................................................................................................................................. 29

OUTWARD SCANNING ........................................................................................................................ 29

STN NUMBER CREATION ..................................................................................................................... 30

TAGGING ............................................................................................................................................. 33

CHECKLIST ........................................................................................................................................... 34

DOCUMENTATION .............................................................................................................................. 35

Packing Slip ..................................................................................................................................... 35

STN (Stock Transfer Note) ............................................................................................................... 37

LR Slip .............................................................................................................................................. 39

Gate Pass ......................................................................................................................................... 40

E-Sugam Form (TAX FORM) ............................................................................................................ 40

LAN POSS ........................................................................................................................................ 42

SOME KEY CONCEPTS ......................................................................................................................... 44

CONSOLIDATION ............................................................................................................................. 44

REVERSE LOGISTICS ......................................................................................................................... 44

REFINISHING ................................................................................................................................... 44

CHAPTER – 3 .................................................................................................................................... 45

DATA AnAlysis .............................................................................................................................. 45

FILL RATE ............................................................................................................................................. 46

Vendor to RDC fill rate .................................................................................................................... 46

Fill rate vs. growth rate ................................................................................................................... 48

VENDOR ANALYSIS .............................................................................................................................. 48

Season wise vendor analysis ........................................................................................................... 48

Summer ....................................................................................................................................... 48

Autumn ....................................................................................................................................... 48

Winter ......................................................................................................................................... 49

Spring .......................................................................................................................................... 49

©Max Retail Page 6

Summary ......................................................................................................................................... 49

Overall vendor analysis ................................................................................................................... 50

Fill rate vendor wise analysis .......................................................................................................... 50

Less than 85% ............................................................................................................................. 50

Between 85%-95% ...................................................................................................................... 50

Above 95% .................................................................................................................................. 50

Summary: .................................................................................................................................... 50

INVOICE ANALYSIS .............................................................................................................................. 51

PROBLEMATIC VENDORS .................................................................................................................... 53

Summary ......................................................................................................................................... 53

LEAD TIME FOR DOCKET TO ACCOUNTS ............................................................................................. 53

For perfect Invoices ........................................................................................................................ 53

For Imperfect Invoices .................................................................................................................... 54

WAREHOUSE ....................................................................................................................................... 55

Warehouse Specifications .................................................................................................................. 55

Warehouse Cost .................................................................................................................................. 55

Total Sales ........................................................................................................................................... 55

Quantity handled per year .................................................................................................................. 56

Some noteworthy ratios ..................................................................................................................... 56

CHAPTER – 4 .................................................................................................................................... 57

CosTing ............................................................................................................................................. 57

CARTON v/s CRATES ........................................................................................................................... 58

After replacing Cartons with Crates ................................................................................................ 60

New pattern in which tape will be applied on cartons during dispatch:- ...................................... 60

NEW MODULE OF TAPE FOR DISPATCH OF BOXES............................................................................. 62

Current pattern of tape application: .............................................................................................. 62

New pattern in which tape will be applied on cartons during dispatch:- ...................................... 63

Comparison ..................................................................................................................................... 64

Cost Analysis ....................................................................................................................................... 64

COSTING OF XEROX MACHINE ............................................................................................................ 65

CHAPTER – 5 .................................................................................................................................... 67

wAREHousE AssEssmEnT ............................................................................................................ 67

©Max Retail Page 7

CHAPTER – 1

ComPAny REviEw

©Max Retail Page 8

LANDMARK GROUP At Landmark Group, the statement of purpose is 'Creating exceptional value for all

lives we touch'. This is as true today as it was in 1973, when they started with Baby

shop in Bahrain.

Landmark Group is one of the largest and most successful retail organizations in the

Middle East

As one of the largest retail conglomerates in the Middle East and India, the

Landmark Group has a diverse portfolio of retail and hospitality brands.

1. Retail brands (16)

2. Hospitality brands (6)

3. Mall management (1)

The group operates over 900 stores encompassing a retail presence of over 13 million

sq. ft. across the Middle East, India, Egypt, Turkey, Yemen and Pakistan (franchise

operation).

MAX RETAIL Max, the largest value fashion retailer in the Middle East offers fashion clothing,

footwear, accessories and household products at amazing value, all under one roof.

Max Retail is widespread across 15 countries in the Middle East, India, Lebanon etc.

and has over 145 stores.

With stores that typically measures between 18,000 to30,000 sq. ft., Max retails

private label clothing for men, women and children as well as footwear and home. It

targets the middle income group, which has the largest set of customers.

A good shopping experience with fashionable products at great value is an assurance

that translates into making customers "Look good, Feel good" with Max.

USP of max is not just value for money, but it believes in providing value and

fashion for money.

By December 2011, it plans to have over 200 stores in the Middle East as well as in

new markets. Max is planning to open new stores in tier I and tier II cities apart from

the metros so as to revolutionize their fashion scenario.

©Max Retail Page 9

OUR VISION AND MISSION To create a truly global brand that provides growth opportunities for teh company

and its employees, whilst achieving its goal of becoming the number one value

fashion retailer across the Middle East and India.

Our Mission Statement

Be a market leader in the field of value retailing

Provide fashionable products at a valuable price

BE innovative, cost effective and globally competitive

Exceed our customers’ expectations

Provide opportunities of growth for our employees

Our Core values

Constant focus & development on the product and value offered

Continuous improvement of the customers shopping experience

Commitment towards staff training & development

Encouraging open work culture

©Max Retail Page 10

SWOT ANALYSIS OF MAX

Strengths

• Largest value fashion retailer in India.

• Offers wide range of products all in one store.

• Very strong presence in South.

• Development and innovation with regards to products, consumer preferences

and lifestyle changes.

Weakness

• Absence of any system in the company. Since its inception its working on

MS- Excel. No WMS no ERP.

• Dealing with B class vendors.

• Small presence in east region

• Weak awareness among masses about Max

Opportunities

• Growing middle income group in the country having high disposable income.

• Growth expected in organized retail sector

• Opportunity to set up new retail outlets

• Right now it is the only player in this segment which is providing value for

money products, so it has an opportunity to explore new cities and increase its

consumer base.

Threats

• Financial slowdown

• This market segment is open, any new player can take entry in this segment

• Consumer choice differs

• Price wars


CHAPTER – 2

wAREHousE PRoCEss

mAnuAl


List of figures

1. Figure 1 -Snapshot of LR Slip

2. Figure 2-Snap shot of Tax Invoice

3. Figure 3-Snapshot of Packing Slip

4. Figure 4-Snapshot of Purchase Order

5. Figure 5-Snapshot of QC Report

6. Figure 6-Snapshot of Receipt Check List

7. Figure 7-Screenshot of MGRN data entry

8. Figure 8-Screenshot of Inward Scanning

9. Figure 9 Screenshot of GRN Window

10. Figure 10 Snapshot of GRN file

11. Figure 11 Snapshot of the discrepancy Report

12. Figure 12-screenshot of Allocation List

13. Figure 13-screenshot of Closing Stock

14. Figure 14-Snapshot of Control Sheet

15. Figure 15-Screenshot of STN number generation

16. Figure 16-Screenshot of STN showing Status as Checklist

17. Figure 17-Snapshot of Checklist

18. Figure 18-Screenshot of Packing Slip

19. Figure 19-Screenshot of STN showing Status as Checklist

20. Figure 20-Screenshot of STN showing Status as Confirmed

21. Figure 21-Snapshot of Stock transfer Note (STN)

22. Figure 22-Snapshot of LR receipt

23. Figure 23-Screenshot of Gate Pas

24. Figure 24-Screenshot of E-Sugam Form

25. Figure 25-Screenshot of LAN POSS

26. Figure 26-Screenshot of the LAN POSS file which is send through mail


INTRODUCTION May 2004 marked the beginning of an exciting Journey of Max. With the launch of

the first max store in United Arab Emirates, Max now has a total of 145 stores across

15 countries in the Middle East, Turkey, Egypt, Yemen, Lebanon and India. With a

single aim of addressing the fashion and footwear needs of middle income customers

offering them good quality products at amazing value, Max has quickly filled the

position of largest value fashion retailer in the Middle East. Max retails its own label

of clothing for men, women and children’s well as footwear and home ware.

By the end of 2011, Max aims to have a network of close to 200 stores across Middle

East and new markets. Max currently operates in UAE, Saudi Arabia, Jordan,

Kuwait, Bahrain, Qatar, Oman, Turkey, Egypt, Yemen and India. An average Max

store ranges between 18000 to 30000 square feet. With an International shopping

experience Max believes in delivering ‘More Fashion More Value’ to its customers.

Here in Max we follow four seasons:

• Spring –January to March

• Summer- April to June

• Autumn –July to September

• Winter-October to December

Apart from these four main seasons we also have two EOSS (End of Seasons sale).

For after every two seasons we have EOSS. So overall we have to plan the

merchandise for six seasons in a year.

The benefits of EOSS in that it helps in clearing the old stock on discounts to get

back our blocked investment.

The Operational responsibility of the warehouse is outsourced to a 3PL (Third Party

Logistics) Expo Century. They are responsible for the working of the warehouse

from Inwarding to Outwarding. They are answerable for any loss of our merchandise

and delay in the processing of the merchandise.

In Max we need two types of transportation:

• Up Country (outside the city of warehouse)

• Local (Within the city of warehouse)


The major processes which take place in the warehouse are described below:

RECEIVING Verification of papers that are received from the vendors is done to see if they are

complete or not. Also, the condition of cartons is checked. Damaged cartons are

checked manually to verify the physical quantity and the quantity on paper. If the

vendor doesn’t send QC report or excise invoice in original then the goods are not

received and are returned to the vendor.

It can be of 4 types:-

• Vendor

• Store return

• Back To Back

• Concessionaire (SOR)

Vendor Vendor Goods are those goods which are being manufactured and delivered as per

buyer’s (MAX).

The documents which are received from the vendor are:

LR Slip

LR slip is the Lorry Receipt slip which we get after booking the goods with the

transporter. It is the formal proof that from now onwards Transporter s responsible

for the safety of the goods.

Figure 1-Snapshot of LR Slip


Excise Invoice

Excise Invoice is the statement of tax which the vendor has paid for our goods.

Figure 2-Snap shot of Tax Invoice

Packing Slip

Packing slip is the detailed report of a carton about all merchandise which is kept

inside it.

Figure 3-Snapshot of Packing Slip


Purchase Order

Purchase Order is the formal purchase document which the Buyers have send to the

vendors.

Figure 4-Snapshot of Purchase Order

Q C Report

Quality Check report is given by our quality person at the vendors end. It is a formal

proof about the conformity of the quality of the merchandise which the vendor is

sending to the RDC.

Figure 5-Snapshot of QC Report


The documents which are received from the vendor are to be arranged in a particular order as:

• Receipt check list

Figure 6-Snapshot of Receipt Check List

• LR copy

• Clearance slip

• Excise Invoice(Original & or Photocopy)

• Packing Slip(Original & or Photocopy)

• Purchase Order

• Q C Report

Arrangement of the Excise Invoice paper is done according to the PO number,

Invoice number, Price and Quantity of the items.

If in some cases there exists the same PO number, same price and quantity but

different Invoice number then Style Number is checked.

At the time of receiving, the transporter’s copy of LR slip is returned to the

transporter after receiving the goods.

These papers are then sent to the security for their entry, which in turn, sends it

to the MGRN (Manual Goods Receiving Note) team.


Store returns This includes returned goods from stores. These goods comprise of the old stock,

damaged stock, and non-moving stock. Also, some goods on NRGP (Non-Returnable

Gate Pass) like soft tags, hard tags etc. are received.

The documents received from the store are:-

• STN

• Gate pass

• Carton breakup(packing List)

The number of cartons and the quantity are checked. The Receipt check list is

not attached on the papers received from the store for store return process.

At the time of receiving, the transporters copy of LR slip is returned to the

transporter after receiving the goods.

These papers are then sent to the security for their entry, which in turn, sends it

to the MGRN (Manual Goods Receiving Note) team.

Back to back Goods which are to be sent to the pre-mentioned locations are received. Cartons are

not opened, only cross docking is done. The documents which are received from the

store are:-

• STN • Gate pass • Carton breakup(packing List)

Concessionaire The goods are directly received from the vendors of the branded apparels. The papers

which are received from the vendor are:-

• LR copy

• Excise Invoice(Original & or Photocopy)

• Packing Slip(Original & or Photocopy)

• Purchase Order

QC report is not required as the goods are branded .For E.g. Bossini, W, John

Players etc. At the time of receiving, the duplicate of transporters copy of LR slip

is returned to the transporter after receiving the goods.


Problems at receiving end The major problems which the receiving end is facing are:-

• Pack in slip-mismatch

• Quality of carton

• Interchange of cartons between regions (10-15%)

• Insufficient papers (10-15%)

SECURITY ENTRY The folder made at the time of in warding is sent to the security. Entry is made in the

register and a security receipt number is given on the Receipt checklist. The security

sends those folders to the MGRN team.

MGRN ENTRY MGRN team does the MGRN (Manual Goods Receiving Note) of the received

goods. It acts as a proof of the quantity of goods received which is then entered

into the system.

The stock is not checked physically; rather only those details are entered which

are present on the documents. MGRN is done in the FoxPro based software

named BOSS (Back Office Stock & Sales System) developed by Landmark IT

and it is registered to Lifestyle International PVT Ltd).

The process for doing MGRN is as follows:

BOSS

Transaction

MGRN Data Entry

It has two windows (figures enclosed) - one is for putting the general

information from the PO and the second window has the details of the number

of invoices.


This file is then saved and printed. This is kept in the folder which is received

from the in warding person. The folder is then sent for Vendor Card entry.

Figure 7-Screenshot of MGRN data entry

INWARD SCANNING The inspection team gets the same folder with the MGRN paper attached to it. The

inspection in charge allocates different folders to various persons who are involved

in doing inspection. Then the bulk is broken according to the POS (Purchase Order

Sheet). The software which is used in inspection is INWARDING. The inspection is

started by entering the PO number, carton number in the window.


Figure 8-Screenshot of Inward Scanning

If a carton has 10 pre packs and each pre pack has 4 pieces then there will be 4

different barcodes available, which will be same for all pieces available in the 10 pre

packs. After completing the scanning of one PO, GRN file is created from the

inspection window itself. That GRN file has 3 sub files in it:-

• G file


• M file

• U file

The discrepancies faced at the time of scanning are:-

• Bar code mismatch-

• Colour mismatch

• Quantity mismatch

• Price mismatch

• Size mismatch

These discrepancies can be solved with the help of vendor en-route buyer, followed

by the GRN proceedings.

GRN Here the quantities in PO, Invoice and the inspection Reports are matched. Then

GRN is done accordingly of the quantities which we have received physically.

Following are the problems that occur during inwarding or during other processes

after inwarding. These problems causes increase in the lead time in the processing of

the documents.


The process for doing GRN is as follows:

BOSS

Transaction

Goods Receipt Not

Maintenance

Figure 9 Screenshot of GRN Window


Figure 10 Snapshot of GRN file

Problematic Remarks Following are the problems that occur during the GRN process. These problems

causes increase in the lead time for the product to reach to their respective stores.

1. PO problem

This problem arises when received the cancelled/expired PO with the other papers

received from the vendor.

2. Barcode problem

This problem arises when we receive the merchandise from the vendor without the

barcode or the scanners are not able to read the barcode.

3. Mismatch

This mismatch can be of many types:

Quantity mismatch-

Here we physically receive short or excess quantity in comparison to the PO and

Invoice quantity. Our permissible acceptable range is +10/-10 % .

Colour Mismatch


Here we physically receive different colours as mentioned in the purchase order.

Style Mismatch

Here we physically receive different styles as mentioned in the purchase order.

Amount Mismatch

This problem arises when vendor wrongly does the calculations or wrongly calculate

the tax or excise duty.

4. Invoice Required

This problem arises when we receive the merchandise without the invoice with other

papers from the vendor.

5. Packing slip problem

Here we receive the merchandise either without the packing slip or wrong packing

slip, so exact breakup of the merchandise is unknown to us.

6. LR copy not received

Here we receive the merchandise without LR slip. So we are not able to do GRN

until we receive the LR slip.

DISCREPANCY REPORT If any discrepancy arises in the quantity then we make Discrepancy Report

mentioning the mismatch about the number of pieces.

Figure 11 Snapshot of the discrepancy Report


Folder is sent to the other members of the team to crosscheck and it is sent to the

Accounts Department at H.O. within 4-5 days after receiving the order from the

vendor.

STOCK UPDATION Stock updation is done to show the stock physically in closing stock.

INTERFACE Interface is a process of interfacing of BOSS software with Oracle Financial software

which is there in the Accounts Department. It is done to process the bills of the

Vendor.

ROLE OF ACCOUNTS DEPARTMENT The accounts department pays to the vendor according to the invoice raised by the

vendor and the amount of GRN quantity.

PLANNERS Planners make the allocation list in the Corporate Office taking into consideration the

requirement of each and every store catered by one RDC. They make allocation

taking into consideration the sales forecast and sales target of the stores. Before

goods are delivered at RDC, RDC receives the allocation. After the GRN process is

completed if any modifications are required then the planners re works on it and

sends it again to the RDC. For first issuance the allocation is given by the planners in

the Head office. For Replenishment Order the allocation is given by the planners

from the Regional Office.

OUTBOUND ALLOCATION Outbound starts when the planners send the planned allocation of the merchandise

for different stores through the mediator to the RDC. The person who receives that

allocation through mail matches it with the closing stock of the previous day. In

closing stock, the Item style number is checked with the quantity as mentioned in the

allocation list. If any discrepancy arises (as in quantity mismatch), then manipulation


is done in case of minor mismatches. If the mismatch is more, planner will be

informed and allocation will be modified.

Allocation list -

Figure 12-screenshot of Allocation List

Closing Stock-

Figure 13-screenshot of Closing Stock


The allocation which is received can be of many types- same season, old season,

same year or previous year. For E.g. – In the attached file, there are two seasons

namely summer 11 and spring 11, where Summer 11 is the new season and Spring

11 is the old season. In the old season i.e. Spring 11; there is merchandise in the form

of store returns. Thus, they are stored department wise/group wise in the bins (not

style wise). Hence, for efficient processing the planner should send the allocation for

old season group wise rather than giving it style wise.

PULLOUT Pullout is of two types-

• First issuance(ID-Immediate Dispatch)

• Replenishment(From Bins)

In case of ID (immediate dispatch) when the allocation list reaches the pullout

person then, the pullout is started by matching the vendor name written on the

allocation list with the name written on the carton and the PO number.

The style number and colour are matched with the allocation list. In case of

replenishment the style number and colour mentioned in the allocation list are

matched with the stock in the bins and store returns.

If these variables match in both the cases then, the cartons having required

merchandise will be assembled at one place.

The empty cartons are kept and the name of the store, category name, hit date are

all written on every empty carton which he kept for allocation.

Then the pre packs which are mentioned in the allocation list will be transferred

to the respective empty cartons for specified locations.

After completing the pullout process the left over pieces are sent to RDC bins

and stored there according to the category and style number which will be used

for replenishment in the store in the later stage of the season.

Generally 70/30 rule is followed i.e. we send 70% stock in first issuance and rest

30% stock in replenishment.


Problems at pullout • Haphazard placement of cartons in the warehouse -- so it takes a lot of time in

searching the cartons.

• PO number mismatch between the allocation list and the carton.

• Quantity mismatch between the allocated quantity and the quantity available

for allocation.

• Wrong prepack quantity.

BINNING

It is a process in which that stock is kept, which is left after doing the pullout of first

issuance. This stock is of RDC which is used for replenishment and kept in the bins

department wise.

There are 5 departments:

• KW(Kids wear)

• WW(Women’s wear)

• MW(Men’s wear)

• EW(Ethnic wear)

• FW(Footwear)/Accessories

OUTWARD SCANNING After doing the pullout, the cartons are handed over to the person who is responsible

for outward scanning. It can be done in two ways:

• Computer

• RF gun (Radio frequency Gun)

The scanning process is almost same in both i.e. by RF guns and by computer. Here a

new file is created with particular location name. A file can record information of

about 10 cartons at a time. If more cartons are present for a particular location then, a

new file is to be created for the remaining cartons.

After making the file, scanning of the merchandise is done and modification of the

carton number is done manually for successive scanning. After completing one


location the person saves the file and makes an entry in a control sheet. The sample

of control is shown below.

Figure 14-Snapshot of Control Sheet

In the remarks, the scanner writes the file number and location for that file number

against the box number and quantity in that box.

After scanning, the boxes are handed over to the supervisors of particular locations.

Tagging of boxes follows. And the RF guns and control sheets are given to the DO

(data entry operators).

STN NUMBER CREATION Next step involves exporting the data from RF Gun. The process of data export

involves attaching the RF gun with the adapter and cutting the file numbers which

are mentioned in the control sheet. Extension is changed to .txt.

If the person is using the computer for outward scanning then he just has to submit

the control sheet in the office. Then the office person from the STN software in their


own system extracts the data by entering the file number mentioned in the control

sheet and export the data from there.

After matching the quantity mentioned in the control sheet and the quantity which is

given by the software, the office person generates the STN number.

The process for generation of STN number is as follows:

BOSS

Transaction

Stock Transfer

STN Auto (PDT)

Figure 15-Screenshot of STN number generation

The panel then asks the drive from which the data needs to be imported. The

particular drive is selected and the data is imported. The quantity is then checked and

the GTM number is created. Then the office person writes the GTN number on the

control sheet.


For creating the STN file the process is as follows:

BOSS-Transaction

Stock Transfer

Item

Figure 16-Screenshot of STN showing Status as Checklist

Follow the steps given below:

Enter the GTM number in Doc # and press generate query.

Enter in the remarks column the file number and to which location the

merchandise is being transferred.

All this is done in BOSS software and this entry is saved in that software

itself.


TAGGING The supervisor responsible for outward scanning takes the merchandise into his

purview for tagging as well. Tagging is done to attach RFID tags to the merchandise

so that it can’t be taken out of the store without billing. The RFID scanners placed in

the store detects the RFID tags attached to the merchandise.

The tags can be of two types:

• Soft tags

• Hard tags

Soft tags are for accessories, footwear etc whereas hard tags are for apparels.


CHECKLIST The STN number generated is used to generate checklist. This is done by entering

that number in Brio Intelligence software and generating the check list.

This checklist is given to the supervisor who is responsible for different locations to

check the quantity in each box and the number of boxes according to the check list.

Figure 17-Snapshot of Checklist


DOCUMENTATION This is the step where all the documents are prepared which are required for sending

the merchandise from the warehouse. The various documents are mentioned below:

Packing Slip This document contains item wise complete details of the merchandise in each box.

This packing slip is handed over to the supervisor responsible for that particular

location.

After checking the box according to the check list, a packing slip is kept inside the

box. This is done so that the people at the receiving end come to know which box

contains how many pieces of which style.

Procedure of getting the Packing Slip:

Brio Packing Slip

Process

STN Number

Location Code

Packing Slip


Figure 18-Screenshot of Packing Slip

If any discrepancy arises in quantity mismatch then, it is amended accordingly. For

e.g. if there are 12 pieces in check list but in physical counting by the supervisor he

found 10, then there are 2 options- either we can increase the quantity to 12 or make

the STN of 10 only or if we have 14 pieces in physical counting then the supervisor

can remove 2 pieces from the box on his own.


STN (Stock Transfer Note) This document contains the complete information of the merchandise which is sent

to any location. Procedure of getting the STN:

Brio STN

Process

STN Number

Location Code

STN

While doing the STN it can be crosschecked whether the checklist is done or not.

This is done by seeing the status in the window of STN.


Figure 19-Screenshot of STN showing Status as Checklist

Figure 20-Screenshot of STN showing Status as Confirmed

If status shows “Confirmed” then the STN file is printed. The MRP value of the local STN is considered, while the cost price is considered in case of upcountry STN.


Figure 21-Snapshot of Stock transfer Note(STN)

LR Slip The entries in the LR slip are done after making the STN. LR slip is for the legal

documentation, which claims that the merchandise is booked and now it the

responsibility of the transporter (in our case TNT) that he will deliver the

merchandise to the destination obeying the conditions which are given.

Figure 22-Snapshot of LR receipt


Gate Pass Gate Pass is the formal document from RDC’s behalf that mentions how much

merchandise is to be moved out of RDC.

Procedure of getting the Gate Pass: BOSS Software

Transaction

Stock Transfer

STN DO (STN Docket)

Figure 23-Screenshot of Gate Pass

E-Sugam Form (TAX FORM) After generating the Gate Pass, entry is made in E- Sugam form online.


Procedure of getting the E-Sugam Form:

VAT e-filling System

E-Sugam form

New Entry

Figure 24-Screenshot of E-Sugam Form

Two types of entries are made:

• Within State

• Inter State

Within state is used when the goods are being transferred within a state and

Interstate is used when we are transferring within state.


LAN POSS The final stage is the LAN POSS entry. This is done to update the system of the

stores so that the billing can be done of the new merchandise.

Procedure of doing the LAN POSS entry: BOSS

Point of Sale

BOSS to POSS

STN DO

Figure 25-Screenshot of LAN POSS


After making the entry some files are created, which are directly mailed to the location where the merchandise is being sent.

Figure 26-Screenshot of the LAN POSS file which is send through mail


SOME KEY CONCEPTS

CONSOLIDATION In a season of 90 days the planners analyse store wise sales of different merchandise

through Sell thru. Then they redistribute the merchandise according to the sales

response of that particular merchandise in different stores. In consolidation we just

collect the merchandise from different stores and send consolidated merchandise to

that particular store which is giving more sales of that merchandise.

REVERSE LOGISTICS Reverse logistics is the process of moving goods from their typical final destination

for the purpose of capturing value, or proper disposal. Remanufacturing and

refurbishing activities also may be included in the definition of reverse logistics.

The reverse logistics process includes the management and the sale of surplus as well

as returned equipment and machines from the hardware leasing business. Normally,

logistics deal with events that bring the product towards the customer. In the case of

reverse, the resource goes at least one step back in the supply chain. For instance,

goods move from the customer to the distributor or to the manufacturer.

Here we have two types of Reverse Logistics:

• Store Returns to Warehouse

• RTV (Warehouse return to Vendor)

Approximately we have around 15% reverse in Apparels Industry.

REFINISHING It is a process of refurbishment of the merchandise before sending it in EOSS. Here

refurbishment includes Ironing, strain removing etc. The person who do refinishing

are called Refinishers.


CHAPTER – 3

DATA AnAlysis


FILL RATE This signifies the rate at which a vendor supplies the quantity that has been ordered.

The higher the rate is, higher is the efficiency of the vendor.

Vendor to RDC fill rate To calculate the vendor to RDC fill rate here we are considering the data of financial

year 2010-2011.

Table-1 Fill rate for financial year 2010-2011 Month PO Quantity GRN Quantity GRN/PO PO-GRN

April 352646 307724 87.26% 44922 May 349995 286448 81.84% 63547 June 443867 386767 87.14% 57100 July 700131 524880 74.97% 175251 August 836749 646173 77.22% 190576 September 830120 824868 99.37% 5252 October 755920 690629 91.36% 65291 November 343778 321274 93.45% 22504 December 486983 486745 99.95% 238 January 546773 505407 92.43% 41366 February 450833 386224 85.67% 64609 March 170858 149994 87.79% 20864

Average 88.21% 62626.7

As shown above, the fill rate comes out to be the least in the summer months – April

to August. On the other hand, it is observed to be the highest in the winter months

from September to December.

Thus, the average for the financial year 2010-2011 comes out to be 88.21%.

Besides, there is a marked difference between the PO quantity and GRN quantity.

This should be as less as possible. However, for 2010-2011, the average of the

difference comes out to be 62626.70.


Figure 12-Pie Chart of Vendor to RDC fill rate for year 2010-2011

The following table splits the fill rate according to the different seasons that MAX

follows:

Table 2-season wise fill rate

Season PO Quantity GRN Quantity GRN/PO Spring 11 1146508 980939 85.56 Summer 10 2367000 1995921 84.32 Autumn 10 1586681 1498648 94.45 Winter 10 1168464 1041625 89.14

Average 88.37

Autumn 2010 observed the highest fill rate, whereas the lowest was observed in

summer 2010.

Figure 13-Graph to show season wise fill rate

April, 87.26%

May, 81.84%

June, 87.14%

July, 74.97%

August, 77.22%

September, 99.37%October, 91.36%

November, 93.45%

December, 99.95%

January, 92.43%

February, 85.67%

March, 87.79%

Vendor to RDC Fill Rate for year 2010-2011

7580859095

100

Spring 11 Summer 10 Autumn 10 Winter 10

Series1


If we take the entire financial year 2010-2011 as 100%, then the four seasons

observed almost the same fill rate, with autumn being a little over the edge with 27%.

Fill rate vs. growth rate • With this 88% fill rate we are growing at 30% (average) year on year. If any

how we are able to increase this fill rate to 95%-97% then our average growth

per year will show some considerable increment.

• With 88% fill rate we have growth rate of 30% (average) per year

• With 1 % fill rate the growth rate will be=30/88=0.34%

• With 97 % fill rate the growth rate will be = 30/88*97= 33.06%

• I.e. approximately 3.06% increment in the growth rate year on year. So this

will help in achieving the projected net worth of the company in less period of

time.

VENDOR ANALYSIS

Season wise vendor analysis (FY 2010-11) Here we have calculated the fill rates of vendors’ season wise. [Note - as per the policy of MAX RETAIL LTD., mentioning the names of vendors are not allowed, so different names are used in this report]

Summer

Suppliers like ‘ABC’ had shown the fill rate of more than 100%, which crossed the

efficiency level. But, on the other hand, company had suppliers like ‘DEF’ whose fill

rate was not even 10%. Thus the average came out to be 73.72, which is lower than

what it should be.

Autumn

For autumn season, supplier ‘GHI’ topped the list of fill rate with 109.17%, while

about 10% of the suppliers had less than 50% fill rate. The observed average was

62.03%, even behind the summer season.


Winter

Where about 10 of the suppliers ensured a 100% fill rate, about 20 achieved even

more than that. However, 30 odd suppliers had their fill rate below 50%. The average

came out to be 67.98%.

Spring

The average observed for this season was 81.04%, which was the highest out of all

the other seasons. Merely 15 suppliers out of the 182 suppliers had their fill rate

below 50%.

Summary Out of all the seasons, autumn had the largest number of suppliers associated with it.

However, it had the lowest fill rate. Spring had about 20% more fill rate than that of

autumn and it topped the charts

Table 3- Season wise fill of vendors

SEASON WISE FILL RATE SEASON AVERAGE FILL RATE SUMMER - 10 73.72 AUTUMN - 10 62.03 WINTER - 10 68.00 SPRING - 11 81.04

Figure 14-Season wise fill rate

73.72

62.0368.00

81.04

SUMMER - 10 AUTUMN - 10 WINTER - 10 SPRING - 11

SEASON WISE FILL RATE


Overall vendor analysis (FY 2010-11) In this analysis all the 233 vendors are kept at one place in the decreasing order of their fill rates.

Out of the 233 suppliers, 23 were exactly accurate with 100% fill rate. If a range of

90%-110% is considered fairly acceptable, 131 suppliers fall in this range. However,

102 suppliers are still out of this acceptable range. This is a huge number, and thus,

an area of concern. Average fill rate was found to be 83.87%.

Fill rate wise vendor analysis (FY 2010-11) Here fill rates of all 233 vendors are categorized into three ranges i.e. fill rates <85%, 85% to 95% and >=95%

Less than 85%

In this category, 80 odd suppliers are present. Though the average is 60%, some

suppliers like ‘JKL’ have extremely low fill rate below 40%. Even if just 10 such

suppliers out of 80 are not considered, then the fill rate rises to 65 %.

Between 85%-95%

There are just 43 suppliers that fall within this category. The average observed is

90.16%.

Above 95%

Out of the 110 suppliers, 25 suppliers showed 100% efficiency in their fill rate. The

average of this category was 100.12%, which is near perfect.

Summary:

Out of the total 233 vendors, nearly half of the vendors fell in the category of fill rate

greater than 95%.

Table 4-Fill rate wise vendor analysis

NUMBER OF VENDORS IN FILL RATE RANGES FILL RATE RANGE NUMBER OF VENDORS OUT OF 233 %of vendors FILL RATE < 85% 76 34.33 85% <= FILL RATE < 95% 43 18.45 FILL RATE >= 95% 110 47.21


Figure 15-Fill rate wise vendor analysis

INVOICE ANALYSIS Here we analyzed the total invoice of the financial year 2010-2011. The Invoices

which we have considered imperfect were those who had some problems in it or

which has taken some of our time in doing the GRN

Table 6-Problematic invoices in the year 2010-2011

Month Total

Invoice Imperfect

Invoice Perfect Invoice

Imperfect Invoice/Total Invoice

Perfect Invoice/Total

Invoice April 568 139 429 24.47 75.53 May 450 96 354 21.29 78.67 June 591 112 479 18.86 81.05 July 886 164 722 18.41 81.49 August 742 176 566 23.53 76.28 September 859 100 759 11.42 88.36 October 844 137 707 16.12 83.77 November 395 106 289 26.84 73.16 December 515 89 426 17.28 82.72 January 634 173 461 27.29 72.71 February 542 171 371 32.45 68.45 March 158 76 82 49.67 51.90

Total 7184 1539 5645 Average 598.67 128.25 470.42 23.97 76.17

76

43

110

NUMBER OF VENDORS IN FILL RATE RANGES

FILL RATE < 85%

85% <= FILL RATE < 95%

FILL RATE >= 95%


Following are the problems that occur during the GRN process. These problems

causes increase in the lead time for the product to reach to their respective stores.

1. PO problem

This problem arises when received the cancelled/expired PO with the other papers

received from the vendor.

2. Barcode problem

This problem arises when we receive the merchandise from the vendor without the

barcode or the scanners are not able to read the barcode.

3. Mismatch

This mismatch can be of many types:

Quantity mismatch-

Here we physically receive short or excess quantity in comparison to the PO and

Invoice quantity. Our permissible acceptable range is +10/-10 % .

Color Mismatch

Here we physically receive different colors as mentioned in the purchase order.

Style Mismatch

Here we physically receive different styles as mentioned in the purchase order.

Amount Mismatch

This problem arises when vendor wrongly does the calculations or wrongly calculate

the tax or excise duty.

4. Invoice Required

This problem arises when we receive the merchandise without the invoice with other

papers from the vendor.

5. Packing slip problem

Here we receive the merchandise either without the packing slip or wrong packing

slip, so exact breakup of the merchandise is unknown to us.

6. LR copy not received

Here we receive the merchandise without LR slip. So we are not able to do GRN

until we receive the LR slip.


PROBLEMATIC VENDORS The following chart gives a picture of vendors that have caused inefficiency at max.

Although 65% vendors belong to this category, but the frequency of each differs as

shown below.

Summary S No. Parameter Value Ratio Value 1 Total number of vendors 273 2/1 65.20% 2 Total number of problematic

vendors 178

3 Total invoices 7184 4/3 21.40 % 4 Total no. of problematic

invoices 1538

LEAD TIME FOR DOCKET TO ACCOUNTS

For perfect Invoices

Table 8-Average time for dockets to accounts Month Total

Invoice Perfect Invoice

Average time

April 568 400 13 days

May 451 322 16 days

June 594 479 19 days

July 891 728 22 days

August 748 573 19 days

September 876 774 20 days

October 850 713 20 days

November 395 289 12 days

December 515 416 7 days

January 634 448 7 days

February 527 318 6 days

March 162 78 7 days

Average 600.9 461.5 14 days


For Imperfect Invoices Table9- Average working days for different processes

Month Total Invoice

Imperfect Invoice

Receipt-MGRN

MGRN-GRN

GRN-A/c Receipt-A/c

April 568 168 1 5 14 17 May 451 129 2 3 16 20 June 594 115 1 8 15 22 July 891 163 1 7 22 28 August 748 175 1 8 18 26 September 876 102 1 10 18 27 October 850 137 2 5 21 26 November 395 106 1 6 11 16 December 515 99 1 5 8 12 January 634 186 1 3 7 9 February 527 209 1 3 8 10 March 162 84 4 5 6 13 Average 600.9 139 1.42 days 5.67 days 13.67 days 18.83 days


WAREHOUSE

Warehouse Specifications

S No. Particulars Value 1 Warehouse Carpet Area 39491 sq. feet 2 Rent/month 486720/- 3 Rent/ sq feet 12.32/-

Warehouse Cost

Particulars Amount Warehouse rentals 56,95,654.00 Electricity & Diesel expenses 7,45,659.00 Manpower(RDC) 1,05,95,192.00 Security and Housekeeping 10,97,043.00 IT Consumables 2,27,415.00 Internet charges 5,970.45 Printing and Stationery 3,82,824.94 Xerox charges 74,727.00 Telephone & Fax 24,674.00 Postage & Courier 14,081.00 Staff welfare 8,39,008.00 Packing Material / Polybags 28,73,373.44 RDC to stores 84,64,711.00 Hiring Charges 2,08,599.00 Transport Expenses - Residence 4,47,327.00 Travel Expenses 11,177.00 Miscellaneous 16,72,238.94

Total Cost 3,33,79,674.77

Total Sales Season Units Sold Sale Value

Spring 11 556740 193272535 Winter 10 950590 425387597 Autumn 10 299351 127086982 Summer10 359492 144078718 Total 2166173 889825832


Quantity handled per year

Trans Qty (in Piece) Trans Value



APRIL 569391 93435877 522782 88955095 1092173 182,390,973 MAY 449288 73673931 492418 83122576 941706 156,796,507 JUNE 372049 62670163 426930 70782156 798979 133,452,320 JULY 771436 147746302 688910 133793109 1460346 281,539,412 AUGUST 490818 83423585 521928 86405751 1012746 169,829,336 SEPTEMBER 1152915 196272235 765624 138349086 1918539 334,621,320 October 754945 133508476 1542392 284432965 2297337 417,941,441 November 594079 111672773 845118 156999698 1439197 268,672,471 December 5270249 896360029 704080 119458176 5974329 1,015,818,205 January 11227909 1917931844 532403 83262407 11760312 2,001,194,251 February 569696 105991108 566838 110050238 1136534 216,041,346 March 532591 92817374 598993 105995431 1131584 198,812,805

Total 22,755,366 3,915,503,698 8,208,416 1,461,606,688 30,963,782 5,377,110,386

MONTHInward (GRN+STN IN) Outward (STN out + PRN) Total RDCS

Some noteworthy ratios

Sales/sq. feet of warehouse 22532.37

Warehouse cost/total sales 3.75 %

Warehouse cost/unit handled 1.08

Sales value/total outbound value 60.88 %

• Warehouse cost/total sales

This is calculated to be 3.75%. However, ideally it should be 2-3%. For this, either

efforts must be made to increase the overall sales or the warehouse cost should be

reduced by cutting down the avoidable expenses.

• Warehouse cost/ unit handled

Ideally the value should come out to be below 1. However, here the value is

exceeding 1. To make up the difference, units handled should be increased or

warehouse cost should be minimized.

• Sales value/total outbound value

This ratio is observed to be 60.88%, which is less. Efforts should be made to match

the sales value, as much as possible, with the outbound value.


CHAPTER – 4

CosTing


CARTON v/s CRATES Here we are considering the average data of one month.

Average total Inbound cartons per month 6500.00 Average total outbound cartons per month 9500.00

Average new cartons used per month (from data) 4400.00

If we replace all the cartons with crates(at the time of inwarding) then, we can save 6500 cartons

Extra new cartons used [=4400-(9500-6500)] 1400.00

Cost of 1 carton Rs51.00

Cost of extra new cartons per month (=1400*Rs51) Rs71400.00

Cost of extra new cartons per year (=12*Rs71400) Rs856800.00 Inbound Use of tape in inbound inspection 0.67m Total use of tape on 6500 cartons (=6500*0.67m) 4355.00m Length of 1 tape roll 60.00m No of tape rolls used (=4355.00m/60m ) 72.58

Coat of 1 tape roll Rs44.00

Total cost of tape used (= 72.58*Rs44) Rs1936.00

Outbound scanning Tape used for outbound inspection 0.67m Total use of tape on 9500 cartons (=9500*0.67m) 6365.00m

No of tape rolls used (=6365m/60m) 106.08

Total cost of tape used (= 106.08*Rs44) Rs4667.67

Outward Packing Tape saving for outbound packing 2.50m

Total saving of tape on 9500 cartons 23750.00m No of tape rolls saved (=23750m/60m) 395.83

Total cost of tape used, that can be saved (=395.83*Rs44) Rs17416.67 Total saving on tape cost for one month (=Rs1936.00+ Rs4667.67+ Rs17416.67) Rs24020.33 Total saving on tape cost for one year (=12*Rs24020.33) Rs288244.00

Usage of Tape

We are considering the dimensions of max boxes as a standard for our analysis.

Length (L) = 56cm

Breadth (B) = 37cm

Height (H) = 30cm

before the replacement of all the cartons with crates 1 BOX Inspection STN Scanning Dispatch Total New L=0,B=1,H=1 L=0,B=1,H=1 L=2,B=4,H=5 L=2,B=6,H=7 Old L=0,B=3,H=2 L=0,B=1,H=1 L=2,B=5,H=5 L=2,B=9,H=8


B

H

L

H

H

B

L

H

Old Carton

B

L

H

Inward Scanning

B B

Outward Scanning

L

Dispatch

New Carton Old Carton

New/Old Carton

New Carton

B


New Pattern

B

L

After replacing Cartons with Crates

• When we replace all the cartons with crates then all the cartons that will be

available for the dispatch of goods will be in good condition (almost new).

So here we are excluding the wastage of tape on the old cartons and we are

considering every carton to be in good condition.

• Now, as we have replaced all the cartons with crates, so we are using cartons

only for the dispatch of goods from the warehouse. Goods will travel in the

warehouse in crates instead of cartons and every crate is fitted with a cover

So, we won’t use tape in processes like – inspection and scanning.

• Tape will be used only once i.e. while dispatching.

New pattern in which tape will be applied on cartons during dispatch:- 1 BOX Inspection Scanning Dispatch Total Old (but in very good condition)

- - L=2,B=3,H=2 L=2,B=3,H=2

Tape usage in meters: L, 56X2 = 112cm B, 37X3 = 111cm H, 30X2 = 60cm Total = 283cm= 2.83m

Dispatch (new carton)

• Now, as we are using old cartons only for the whole dispatch process (i.e.

cartons that we have received from the vendors and stores). One benefit of

using these cartons is that we don’t have to apply tape on the base of the

cartons (because base is already closed by vendor or store people). So, new

need of application of tape during dispatch of goods is :-


B

L

H

SAVINGS PER CARTON

1 BOX Inspection Scanning Dispatch Total Old (but in very good condition)

- - L=1,B=2,H=1 L=1,B=2,H=1

Tape usage in meters: L, 56X1 = 56cm B, 37X2 = 74cm H, 30X1 = 30cm Total =160cm = 1.6m

Dispatch (old carton)

Comparison

Before Replacement After Replacement For new cartons, total tape usage = 5.44m

For new cartons , total tape usage = 2.84m

For old cartons, total tape usage = 6.65m

For old cartons (in very good condition), total tape usage = 1.6m

Difference: - New Cartons, 5.44-1.6 = 2.5m Old Cartons, 6.65-1.6 = 5.05m Total savings for a year

Total tape cost for one year Rs288244.00

Total cost of cartons for one year RS856800.00

Total savings Rs1145044.00

New Pattern


B

H

B

L

H

B

L

NEW MODULE OF TAPE FOR DISPATCH OF BOXES We are considering the dimensions of max boxes as a standard for our analysis.

Length (L) = 56cm Breadth (B) = 37cm Height (H) = 30c

Current pattern of tape application: 1 BOX Inspection STN Scanning Dispatch Total New/ Old L=0,B=1,H=1 L=0,B=1,H=1 L=2,B=4,H=5 L=2,B=6,H=7

Tape usage in meters: - L= 56X2 = 112cm B= 37X6 = 222cm H= 30X7 = 210cm Total = 544cm = 5.44m – (1)

Inspection

Scanning Dispatch


New/Old Carton

L

New Pattern

New pattern in which tape will be applied on cartons during dispatch:- 1 BOX Inspection Scanning Dispatch Total New L=0,B=1,H=1 L=0,B=1,H=1 L=2,B=3,H=2 L=2,B=5,H=4

Tape usage in meters: - L, 56X2 = 112cm B, 37X5 = 185cm H, 30X4= 120cm Total = 417cm= 4.17m

Dispatch

• Now, as we are also using old cartons for the dispatch process (i.e. cartons that we have received from the vendors and stores). One benefit of using these cartons is that we don’t have to apply tape on the base of the cartons (because base is already closed by vendor or store people). So, new need of application of tape during dispatch of goods is :-

1 BOX Inspection Scanning Dispatch Total Old (but in very good condition)

L=0,B=1,H=1 L=0,B=1,H=1 L=1,B=2,H=1 L=1,B=4,H=3

Tape usage in meters: - L, 56X1 = 56cm B, 37X4 = 148cm H, 30X3 = 90cm Total = 294cm = 29.4m

Dispatch (old carton)


Comparison

Old Pattern New Pattern For new cartons, total tape usage = 5.44m

For new cartons, total tape usage = 4.17m



Cost Analysis

• Now if we consider all cartons to be new, then according to new pattern we

have to use 4.17 m tape per carton.

• So, the difference between the usage will be = (5.44 – 4.17) m = 1.27m

• Saving of tape per carton = 1.27m

• As per the data, avg. no. of tape rolls given to the labors every day = 48

i.e. per year usage of tape rolls in the warehouse = 48*30*12 = 17280 rolls

Cost of one tape = Rs44 /-

Cost of tape for one year = 17280 tapes * Rs44 = Rs760320 /-

• 1 tape= 60m - (2)

• Tape usage for 1 carton = 5.44m (according to the old pattern)

• Therefore, no. of cartons per tape roll = 60/5.44 = 11cartons

• Tape usage for 1 carton = 4.17m (according to the new pattern)

• Therefore, no. of cartons per tape roll = 60/4.17 = 14 cartons

• Now, difference in the no. of cartons per tape = 14 – 11 = 3 cartons

• So, difference in the no. of cartons per day = 3*48 = 144 cartons

• As per old pattern usage of tape per carton = 5.44m (from 1)

• Therefore, saving of tape for 144 cartons = 144*5.44 m = 800m

• So, no. of tapes saved per day = 800/60 = 13.33 tapes (from 2)

• So, no. of tapes saved per month = 13.33*30 = 400 tapes

• So, no. of tapes saved per year = 400*12 = 4800 tapes

• Cost of one tape is = Rs44 /-

• Therefore cost of 4800 tapes = 4800*44 = Rs211200 /-

• Savings = Rs211200 /- i.e. 27.7%


COSTING OF XEROX MACHINE

Sl noRec'd Date Supplier Name Qty Inv Value Remarks Docs to Ho Date1 12-Oct-10 Unique Copiers Solutions 17,078 10,586 Xerox Machine Rent bil l for the month of Spt-10 12-Oct-10

2 20-Nov-10 Unique Copiers Solutions 29,126 18,053 Xerox Machine Rent bil l for the month of oct -10 30-Nov-10

3 12-Mar-11 Unique Copiers Solutions - 5,281 XEREOX MACHINE READING 15-Mar-11

4 - Unique Copiers Solutions 4,265 2,643 Xerox Machine Rent bil ls 20-Sep-10




8 - Unique Copiers Solutions 15,375 9,530 Xerox Machine Rent bil l for the month of Nov -10 12-Jan-11

9 - Unique Copiers Solutions 7,142 4,427 Xerox Machine Rent bil l for the month of Dec -10 12-Jan-11

10 - Unique Copiers Solutions - 5,303 xerox machine reading 7-Mar-11

Total 96,646 70,490

Total number of prints for financial year 2010-2011= 96646 prints

Total value of bills for financial year 2010-2011=Rs70490/-

The copier which we are using is CANON IMAGERUNNER 2230 (Canon IR 2230)

Cost of New Machine=Rs 94990/-(2065$)

Cost of toner cartridges-

• 21000 prints= Rs3220/-

• 75000 p= Rs8852/-

As from the table the total number of prints per year is 96646

So to have these many prints we need two toners in a year (supposing that with machine we

did not got any toner)

So cost of two toners-

• Option One

3220+8852=Rs12072/- (one 21000 +one 75000)

• Option Two

8852+8852 =Rs17704/- (two 75000)

So we are taking into consideration the second option, as it is more economical.

So cost of toner for 97000 pages of print = (97000/150000)* 17704 =Rs11449/-

So total investment in a year= Cost of machine+ Cost of toner

= Rs (99490+ 11449)

=Rs106439/-


Considering depreciation of Electro stat Machine of 10 years,

So each year deduction =94990/10 =Rs9499/-

Opportunity cost –

If we have invested Rs106439/- in savings account at 7% interest,

Then interest earned = 106439*0.07 =Rs 7450.7/-

So, total cost for 1st year = Cost of machine+ Cost of toner + Interest for 1 year+

depreciation – Bill Amount

=Rs (94990+ 11449+7451+9499-70490) = Rs52899/-

Cost for 2nd year= Cost of toner+ Interest+ Depreciation

= Rs(11449+7451+9499) =Rs 28399/-

Total saving in 2nd year= Bill Amount- Cost for 2nd year

=Rs(70490-28399)=Rs42091/-

So, from the second year itself we are making the savings of Rs42091/-


CHAPTER – 5

wAREHousE AssEssmEnT


What is Warehouse assessment? It is a tool which has a set of categories and sub categories which can be used for the

rapid evaluation of the plant (warehouse in our case).

Categories:

• SAFETY

• INTEGRATION IN THE SUPPLY CHAIN

• SCHEDULING SYSTEM AND SPACE UTILIZATION

• MOVEMENT OF PRODUCTS

• EMPLOYEES

• VISUAL MANAGEMENT

Methodology of conducting Warehouse Assessment

Sample:

We have conducted RPA (Rapid Plant Assessment) 3 times per day for 20 days. So

we have received a sample size of 60.

Form:

We have prepared a form which contains six categories and 18 sub categories.

Every sub category is rated on a scale of -

poor, average, above average, good and excellent. These remarks have respective

ratings of 1,2,3,4 and 5.

Analysis:

Analysis is being done after receiving sample of 60 forms after 20 days.

(9th May’11-31 May’11)



CATEGORIES

SAFETY

Working environment and equipment should be safe. The plant should be well lit, air

and water quality should be good and noise levels should not be very high. Employee

should be trained for the processes they are into and equipment they are handling.

Condition of equipment should be good (e.g. racks and machines should not be

rusty). There must be optimum number of fire extinguishers available and should be

placed at easily accessible locations.

VISUAL MANAGEMENT

Tools that provide visual cues and directions are readily apparent in well-functioning

warehouses. Such signage, clearly guides employees to appropriate locations and

tasks and help in increasing their efficiency. Cartons must be placed or stacked in a

good manner so that it will give a pleasant look and thought about the warehouse.

SCHEDULING SYSTEM AND SPACE UTILIZATION

Every department should work according to the schedule because demand of product

at each department is triggered by the demand at next. It helps in increasing the

inventory flow, reduces time and makes process smooth.

Space in the warehouse should be utilized in an efficient manner by stacking the

cartons in a proper way and at a defined place.

MOVEMENT OF PRODUCTS

Products should be moved to their appropriate respective places after every process.

If the products are to be moved to shorter distances then employees should use hand

propelled roll carts and not forklifts because forklifts require wide aisles, are

expensive to operate and encourages unnecessary handling of this heavy machine.

EMPLOYEES

In any warehouse, efficiency can be increased only then when the employees are

trained, working in teams, have knowledge of the product and process that they are

handling. With this the working environment should be safe. Working hours should

be optimum and required number of brakes should be given so as to keep the

employee fresh and active.


INTEGRATION IN THE SUPPLY CHAIN

A good and efficient supply chain is basically a spontaneous integration among the

various departments present in that supply chain. So, this synergy can be established

only then when there will be a proper information flow among the various

departments of the supply chain.

Hypothesis:

Null hypothesis (H0) - company thinks that warehouse is perfect on above mentioned

six categories and 18 sub categories. So It should receive GOOD or EXCELLENT

remark

And alternate hypothesis (H1) - warehouse is not perfect and should receive remarks

below GOOD i.e. ABOVE AVERAGE or AVERAGE or POOR.

H0: remark = good/excellent

H1: remark ≠ good/excellent

= poor/average/above average

Warehouse Assessment SHEET

After getting sample size of 60 forms, we have consolidated these forms in one RPA

(Rapid Plant Assessment) form.e.g. -

Category- Safety

Sub Category – Fire extinguishers and their accessibility

From the sample of 60 forms we have observed that this sub-category has received

“Average” and “Above Average” remarks 25 and 35 times respectively. So in the

final RPA sheet we have indicated 25 and 35 in the columns of “Average” and

“Above Average” remarks respectively.


AVERAGE RATING SHEET

In this sheet we have calculated the average rating for each sub-category by using

RPA sheet.

Calculation:

For a particular sub category,

Average rating =

[(No. of times “Poor” remark received X Rating for “Poor” remark) +

(No. of times “Average” remark received X Rating for “Average” remark)+

(No. of times “Above Avg.” remark received X Rating for “Above Avg.” remark)+

(No. of times “Good” remark received X Rating for “Good” remark)+

(No. of times “Excellent” remark received X Rating for “Excellent” remark)]

Sample Size

e.g. -

Category – Safety

Sub-Category - Fire extinguishers and their accessibility

Average Rating = [(0X1) + (25X2) + (35X3) + (0X4) + (0X5)]

60

= 2.58 (Above Average)

So, rating for this Sub-Category is 2.58 and remark is “Above Average”.


CATEGORY WISE RATING AND REMARKS SHEET

In the average rating sheet we have calculated the average rating for all the sub-

categories under all categories. Now to calculate the average rating for each category

we have taken average of all the ratings of sub-categories of that category.e.g. -

Category – Safety

Average rating = Sum of the ratings of 5 sub-categories under “Safety” Category

number of sub-categories

= (4 + 4 + 4 + 4 + 2.58)/5

= 3.72 (Good)

So, rating for this “Safety” Category is 3.72 and remark is “Good”.

Similarly we have calculated the average ratings and remarks for all the categories.


Documents

Summer Internship Project Report_