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EXECUTIVE SUMMARY
Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. This is an effort put to A study on Logistics System of Gokak Mills Limited. The study was made based on observation and personnel interview with logistics manager. The main objective of this report is to study about the Logistics System of Gokak Textiles Ltd Gokak Mills Division, Gokak-Falls.
GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls INTRODUCTION OF THE STUDY
The term logistics is often misinterpreted to mean transportation. In fact, the scope of logistics goes well beyond transportation. Logistics forms the system that ensures the delivery of the product in the entire supply pipeline. This includes transportation, packaging, storage and handling methods, and information flow.
The industrial policies in India have prompted manufacturers to build plants in remote, backward areas due to inexpensive land and tax benefits. This poses some serious logistical problems. Apart from a poor road and transportation network, the existing communications system in India leaves a lot to be desired by any international standard. It is in this context that logistics has to be considered in India.
Logistics call for an understanding of the total supply chain, the elements of which include inventories, packing, forwarding, freight, storage and handling. Logistics is responsible for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the company or the physical distribution of finished goods, logistics encompasses all of these.
Typical logistics framework mainly consists of Physical Supply, Internal Operations and Physical Distribution of Goods and Services. To put it more simply, the material supply logistics starts from the base level of generation of the demand, through the process of purchase and supply of material from the vendor right through to final acceptance and payments to the supplier and issue to the indenter and has to be considered as a one whole activity with each stage having an impact on price/cost of material supply.
Logistics is, in itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel. Logistics is concerned with getting the products and services where they are needed when they are desired. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packing.
GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls INDUSTRY PROFILE INTRODUCTION
Indian cotton textile acquires a key and important position in the economy of our country because of its contribution to the industrial output employment generation & foreign exchange earnings. At present, the contribution of the textile industry to GDP is about 3.5% to 4%. The textile industry provides direct employment to about more than 30million people & is the second largest employment provides in India next to agriculture. It has good labor strength & adopted very modern technology. The industry apart from being one of the agro based industries is also labor intensive & produces one of the most important day to day customer items essential for the people. Cotton is main raw material use for production of yarn and cloth. When the mill feels lack of cotton by local areas it imports the cotton from Australia & South Africa. The textile industry is a self reliant industry from the production of raw materials to the delivery of final products with considerable value addition at each stage of processing.
Products
: Cotton and Blended yarn, Grey Cotton and Blended fabric Dyed yarn, Terry towel
7th Mill - 25200 Number of Employees Capacity of power Gen : 3778 as on 31/12/2011 : Hydro 10.8 MW Diesel - 5.6 MW H.F.O - 6.2 MW REGISTERED OFFICE Gopalkrishna Complex, Residency Road, Bangalore.560 025 Telephone No : 91-80-25588079 Fax No : 91-80-41232267. CORPORATE OFFICE 24th, 29th Main, BTM Layout 2nd Stages Bangalore
THE SP GROUP:
The SP Group has over 23,000 employees and a group turnover of Rs 12, 500 cores Shapoorji Pallonji Group has evolved and grown exponentially to become a huge conglomerate with multiple business segments with a progressive outlook and a thoroughly professional approach. The SP group operates in following sectors SP Real Estate Development of Luxury Apartments, IT / ITeS SEZs, Affordable Housing, Retail, Hospitality, Commercial, Leasing and Consulting SP Infrastructure SP Energy Bio SP Fabricators Ports, Power Plants, Highways, Tollways -Fuels and Solar Power Generation Engineered Facades, Cladding, Architectural Coatings SP EPC Power and Steel Gokak Textiles, Yarns
SP Construction Materials Pre-Engineered Buildings, Interiors, Access Flooring Afcons Infrastructure Marine Works, Roads, Bridges, Tunnels, Pipelines, Specialist Foundation Works Piling, Drilling, Grouting Eureka Forbes Air and Water Purifiers, Security Systems
Forbes & Company Engineering: (Precision Tools, Steam Turbines and Blowers), Shipping (Container Transportation, NVO Container Carrier), Logistics (sea and air freight, customs clearance, bonding, Warehousing and multi-modal transportation), Transaction Management & Business Automation (Currency Counting machines, Rural ATMs, Electronic Stamping and Electronic Franking Networks) Sterling AND Wilson Mechanical Engineering & Plumbing Services, HVAC,
HISTORY
A Gokak mill was registered in the year 1885 by Ritche Stewart Ltd, under the name of Gokak water power and manufacturing company Ltd (GWPCL). On the 5th October 1887 the first power house of the country was commissioned and with the help of 250 HP of mechanical power generated by peloton wheel, which was transmitted to the spinning mills run by Gokak waterpower and manufacturing company ltd. The extraordinary length of the line of transmission and speed attained by the huge pulley wheels were said to surpass only thing as the kind in the world.646.42 hectors is the total land location of the mill dividing area including village forestation and area listed in the total property.
LAND DETAILS
SI NO 1 2 ITEMS Total factory land in Gokak Undeveloped land A) Konnur B) Gokak 3 Developed land Total area Area in Acres 127.00 214.34 311.35 315.02 968
WORKING HOUR
SHIFT I Shift II shift III shift HOURS 1.00 AM to 8.00 AM 8.00 AM to 4.30 PM 4.30 PM to 1.00 AM TEA/LUNCH TIMING 5.30 AM to 6.00 AM
Designation Chairman Executive Director & CEO Director Director Director Director Director Director Director Director Director
Name Mr. Shapoorji Pallonji Mistry Mr. H.S. Bhaskar Mr. Pallonji Shapoorji Mistry Mr. Ashok Debabrata Barat Mr. Govind Dasu Prasad Mr. Chandrakanth Girdharalal Shah Mr. Kaiwan Kalyaniwalla Mr. Ramaotar Goyal Mr. Sanjay Sarkar Mr. Pradeep .N. Kapadia Mr. R. N Jha
COMPANYS GOAL
1. Leadership in quality. 2. Satisfied customer. 3. Consistent growth. 4. Reasonable profit. 5. Happy community
VISION
1. Customers delight through quality products and services. 2. Sustain and continuously enhance all stakeholders interest. 3. Create working environment to make all employees produces as a member of team. 4. Creation of clean and healthy environment..
QUALITY POLICY
We strive for achieving complete customer satisfaction by supplying quality products and services by exceeding customer requirements. We are committed to continual improvement in product quality and services based on customer feed back.
2. Forbes Campbell Knitwear 3. Forbes Brands Division KEY BUSINESS FACTORS OF GOKAK MILLS
1. Highly competitive, wide spread market. 2. Continuous changes in customers needs, which is fashion led. 3. Labor oriented hence high Labor force. 4. Too many controls by Government and trade. 5. High variable raw materials with fluctuations in price. 6. Appropriate technology to meet global competition.
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2. Growth:- To achieve a group turnover in excess of 500 corers per annum by year
2011-2012 Customer`s loyalty:- To ensure that customers become and remain our loyal friends and our most effective spokesmen and advertisement
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ENVIRONMENTAL POLICY
Gokak Mills No 7 is engaged in manufacturing of cotton yarns Combed and Carded is Committed to Comply with relevant Legislative, Regulatory and other requirements applicable to its activities and its products. Prevention of pollution by following good management practices, minimizing and reuse of solid waste wherever possible and conserve natural resources and Biodiversity by planting more trees within the mills premises and surroundings areas by providing saplings. Continual improvement in its environmental performance by periodically reviewing its objectives and targets. The above policy is well implemented and communicated to all the employees. The copy of the policy will be made available to the regulatory authorities and public on request.
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GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls HEALTH AND SAFETY POLICY
It is the policy of company which that its activities should be conducted so to ensure that health and safety of its employees as well as other persons, in the factory premises to ensure that environment around is not damaged. The Company attaches as great important to the above objectives as it do its primary business objectives. The Company believes that restricted to the Health and Safety in the manufacturing and allied activities are controllable and it will take all reasonable steps towards this End. While compiling with all relevant rules and regulations the company will also provide all necessary inputs by ensuring that:
The plant installed is designed, maintained and operated in such a way that it is safe and without risk to health.
All necessary arrangements are made in the mill to ensure safety and health of the workers during the use, handling, storage and transport of articles and substances & disposal of trade waste & effluents out side the mill premises.
Adequate arrangements are made for firefighting emergency exists. Workers are properly informed, instructed & trained for the job they handle. Pre-employment training is given. Regular safety contests on good house keeping, safety suggestions, safety slogans, safety posters etc. are carried out and prizes are awarded in order to involve workers to a great extent in promotion of safety and health.
Regular plant safety inspections are carried out and unsafe conditions, if any, are rectified. Monthly safety meetings with managers and department heads is conducted to discuss and organize safety and healthy related activities.
PRODUCT COMPETITORS:
Grey yarn for knitting : EOU like Amit, Indocount, Eurotex, Mahaveer, Nahara spinning mills. Grey yarn for weaving Terry towels Dyed yarns : Vardhaman, welspun, Jamshree : Vardhaman, Mahaveer, Arunodaya, Nahar etc. : Vardhaman Sundraj. 13
GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls SUCCESSIVE FACTORS OF THE COMPANY
1. Product Quality: As required by the customer delivery on time. 2. Productivity: Improvement and real growth. 3. Cost of manufacture: Reduction in cost high realization. 4. Finance: Economically managed funds and shorter cycle time. 5. Appropriate technology: To have an edge in the market. 6. Customer relation and satisfaction. 7. Supplier performance: Consistency in supply and delivery. 8. Effective support service. 9. Skilled and satisfied employees with empowerment. 10. Community support.
AWARDS AND ACHIEVEMENTS 1988 - K.P Goenka memorial award. 1998 - Supplier appreciations award. 2000 - Export aware by government of Karnataka 2001-02 - State award of excellence in exports NON SSI-GOLD. Best mills aware instituted by Karnataka cotton association Hubli. Guest of honor given at Belgaum industrial johnson. 2002 - Corporate award First Prize for Energy Conservation in Textile Sector by the Ministry of Energy
by Government of Karnataka. VTU Dept of PG Studies, Belgaum 14
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ORGANIZATION CHART
Prod Mgr SPG P.S.I S.I MT SO CNP INCH CAN TT PLNG ENGR ELECT
Abbreviations - Production Manager - Spinning - Post Spinning In-charge - Spinning In-charge - Maintenance - Shift Officer - Cone Packing - In-charge - Canvas - Terry Towel - Planning - Engineering - Electronics
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EXPORTS: The division concentrates on all export and the marketing of Terry Towel in both export and domestic market.
DOMESTIC SALES: It looks after sales of Terry Yarns and Grey Fabrics in domestic markets through its branch offices located in various centers all over India.
VALUE ADDED TEXTILE: It concentrates on processed yarns for both export and domestic markets. It has agents for offering better service and to collect information on markets
PRODUCTION DEPARTMENT:
Gokak Mills is involved in manufacturing cotton yarns of both grey and dyed. Gokak Mill also manufactures a small quantity of terry towel and canvas fabrics. As earlier mentioned Gokak Mills is integrated with seven different mills. No. 5 mill is a Dyeing Plant and is managed separately by chemical processing department.
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GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls RESEARCH AND DEVELOPMENT DEPT:
The main activity of this department is monitoring the quality assurance activities around clock. Its functions start from testing of raw materials to quality approval of end products. It guides the cotton purchase department to procedure-desired quality of raw materials for production of required products by considering the process involved. Quality
testing is done at each stage of manufacturing process and relative reports prepared. It always keeps in touch with production department. prepared here as per the ISO requisitions. Few of them are: Process control studies. Testing reports. Quality assurance reports. The reports and documents are
QUALITY OBJECTIVES
Revising process control and testing based on market feedback. Making internal quality acceptance criteria more rigid. Compile market request and study trends. Region wise market complaint is analyzed. Conduct training program. Plan daily activities to cover areas at a period of time. Device testing plans to suit product needs. 18
GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls FINANCE AND ACCOUNTS DEPARTMENT:
This section looks after the allocation of funds for various activities accounting of the transactions in monitory terms and manage the cash flow. All the major financial decision is taken at the corporate office. This department at Gokak maintains accounts for various transactions and works and costing.
MAJOR ACTIVITIES:
Cost accounting Financial Accounting Cotton Godown Inventory Stores Godown Inventory Management Central Excise, Sales Tax, Customs, Insurance, Logistic activities etc.
OBJECTIVES:
To maintain the clear-cut information of the transaction and maintain the records and the books of accounts. To show records to Government offices. To show profit, expense, assets & liabilities details at any time. To ensure endurance to accounting principles.
BANKERS:
Union Bank of India Punjab National Bank Standard Chartered Bank
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PURCHASE DEPARTMENT:
This section looks after the purchase of required spares, consumables, dyes, chemicals, etc. This department ensures that right material of right quality and quantity is available at right time. Identification and development of vendor. Timely placement of order. Follow up of orders for supply. Timely payment to suppliers. Periodic review of purchase activities
STORES DEPARTMENT:
Stores Department or Management refers to the management and control of stores materials and related activities. In other words, it refers to the planning, storing, issuing and controlling stores inventory. Other than cotton all other materials are stored like packing material, capital goods, engineering inputs, machinery spare parts, electrical etc. In Stores Department, Weighted Average Method is followed for issuing the materials.
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Identification of all materials stored. Receipts of incoming stores materials. Inspection of all receipts. Storage and preservation of goods. Issue and dispatch. Maintenance of stores records. Inventory control. Stock taking, i.e. physical verification of goods.
STORES OBJECTIVES:
Confirm supply as per Purchase Order. Ensure quantity and correctness. GRN preparation and approval in time. Verification of bills and Purchase Order amount. To satisfy user and issuing material in time. To co-ordinate with purchase department, suppliers, users and accounts department.
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TYPES OF TRAINING:
Pre-employment Refresher Development Functional
TRAINING PROGRAMMES:
Creativity of managers Energy saving and maintenance ISO 9000 refreshers program Fire fighting training Awareness program on Total Quality Management Camp Awareness Programs Leadership And Motivation Class-room Training On-the job Training Refresher Training
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GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls WELFARE FACILITIES: HOSPITAL:
30 bedded with modern equipments qualified doctors, medical facilities around the clock. Scholarship to children of employees Recreational facilities Quarters, houses for employees School facility (Kannada, Hindi, English, Marathi & CBSC ) to employees children & general public And concision in fees for employees children available
Canteen facility Colony maintenance Temples & Church maintenance Masques marriages Employees co-operative credit society PROCEDURE OF RECRUITMENT AND SELECTION
Workmen: A special committee, which includes managers, HRD managers, training officers, chief medical officer, and production manager, does workmen selection. Generally workmen are recruited from nearby areas. Eligibility: SSLC as minimum qualification, good physical health, now recently MSKL (multi skilled trainee) has been introduced where SSLC qualification is must. After selecting the workmen following phases is to be passed through Phase I: 6 months training Phase II: 6 months training In the period of 12 months training the workmens performance is evaluated by top level management and then given a badli pass, considering the factors like attendance, work practice, behavior and punctuality. The pay given is equal to the permanent employee. In addition to ESI is given. Clerks: Minimum qualification required is BA, B.Com, or SSLC. Competent workman category & promoted as clerks as per the requirements.
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SAFETY DEPARTMENT:
In the industries like Forbes Gokak ltd. Accidents are like very imminent. To core up with the same personnel department has imparted one safety in charge Mr. Sheelavant who looks after if any such accidents take place over the work place. The endeavor of the safety department is going to bring down the possibilities of the accidents and as such to the zero level for the companies like Forbes Gokak Ltd. It is not enough if they put the machines and some workers to operate the same because the accidents are very imminent during those operations. So the Gokak Textiles Ltd. Has adopted the safety department which in terms takes care of both minor and major accidents takes place. As per the data, I have collected the observation shows that the safety department is functioning properly through the accidents taken place in the industry since past in decreasing order every year.
MAJOR ACCIDENTS:
Form No. 12 & 17 (in case of major severe accidents) intimation will be sent the Inspector of the factories, Belgaum Zone Chief inspector of factories, Bangalore. District magistrate or sub divisional officer. Office in charge of the nearest police station. Relatives of the injured person. 24
MINOR ACCIDENTS
The Safety Department is bound to ensure whether the accident has occurred inside the Mill and during the course of duty, if the accidents has occurred inside the Mills then in charge of the operations should read the report the of, and send it to the Time office within 24 hours after investigating the accidents. Then the time office clerk will enter the details of the accidents in to the accidents register and return the report to the safety officer to file it future action parallel the in charge of the safety will shift the injured to the first aid and inform the ambulances if required doctor over phone and arrange sending him hospital with proper gate pass. Then the time office clerk with check whether the injured has resumed the duty. Then time office clerk will send report immediately through the safety officer to ESIC.
LOGISTICS DEPARTMENT
Logistics management from this total system is the means whereby the needs of customers are satisfied through the coordination of the materials and information flows that extend from the marketplace through the firm and its beyond that to supplies.
DISPATCH DEPARTMENT:
Under this department packed goods are sent to the respective parties. Here packed production is 90 tons per day and sent to the parties according to their specification i.e. through ship or road transport. Under this process, finished goods are first sent to the Packing Department, here goods are packed and sent to the Finished Goods Godowan. According to the contract, goods are sent or dispatched to the respective parties.
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Structure
strategy
Systems
Shared Values
Skills
Style
Staff
The 7S are STRATERGY The main strategy of Gokak Mill is to get a substantial advantage over competition through quality products and services and to develop quality products to suit specific customer needs in line with changes in demands. It is also trying to consolidate and enlarge manufacturing facilities to meet customers expecting quality standards and reasonable prices.
STRUCTURE The structure of this organization is more democratic and hierarchical for analyzing and taking decision the top management consists of the functional level and lower level management. The coordinators with the different departments are achieved through a set of well-defined procedures and guidelines.
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STYLE The organization chat of Gokak Milk shows that it has a well-defined structure and the functions under the various departments clearly mentioned. Gokak mills believe in "MANAGEMENT WITH HUMAN FACE". It has having greater concern for its employees and the society. The suggestions of workers and middle level manager are encouraged.
STAFF The task of acquisition, retention and developing human resources are well handled in Gokak Mills. The people of Gokak Mills are dedicated and result oriented. They believe in mutual trust and confidence and team work.
SKILL The company as the whole is very much skilled with the availability of human power and resources. Gokak Mills develop skills of its employees by continuous training and development programs.
SHARED VALUES With the version of being world class innovations, competitive the company has used all the available resources in an efficient manner. It shares the values like 1. Conduct the business with uncompromising integrity. 2. Observe ethics. 3. Trust, respect individuals. 4. Management with human face etc.
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Here various fibers like cotton and polyesters are mixed together.The bales coming from out state or local market are first kept in godown. The care is taken to avoid any fire or damage to the bales. Whenever they are required they are brought to the mills by tractors and they kept near the mixing bins.
2. BLOWROOM:-
In the Blow room, Machine, Opens the cotton and cleans them by passing through various openers and beaters various impurities like seeds bit, stones leaves etc., are removed here and cleaned and cotton is passed to carding Department.
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Carding Department is called as Heart of Spinning because without Carding cant spin good yarn. In this process the materials through fine wires point, here impurities remaining in Cotton and Short immature fibers are removed. The Card produces a continuous stand of fibers called as Sliver.
4. COMBER:-
1. Sliver Lap: To Convert carding sliver into lap from which is suitable for Ribbon Lap. 2. Ribbon Lap: Is later fed in the Comber. Here short fibers are extracted along with dust.
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Here work is done as making the sliver uniform and also makes the fibers parallel to the axis of the Sliver it becomes parallel by improve blending of fibers by drafting several as slivers to require thickness.
6. INTER:-
Making the sliver in to a bobbin by giving some amount of twist to roving which will stand in ring frame.
7. SPINNING:-
In this process the rove is to get the required liniest density and twist is given to get the required strength and effect. The yarns are wounded on cops (spindles) form the section, the cops are sent to post spinning section with the spinning Advice Slip.
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(Post
Spinning
Section)in
process
bobbin caps are on large cones. Which are suitable for markets? Yarn are cleaned and sent on large packages uniformly. The weight of the cones package varies as per customer
requirement.
9. TWISTING:-
Doubling is the process in which two or more single yarns are spiraled uniformly with each other by delivering them to get here a pair of roller and twisting them together, by means of revoking spindle. This is done to get *higher strength resistances increased, and *reduced careless of yarns and *fancy effect. The processed cones are sent to packing section with a slip to counts details advice but cone specification called Winding details from post spinning
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The cones are passed through ultra-violet rays cabin for checking if any defects, then they are checked for weight. The approved cones are packed in cartons bags as on pallets and carton are used for exports and bags for domestic sales.
PRODUCT DETAILS
Products are Dyed yarn TECHNOLOGY AT DYEING PLANT
furnishing, industrial yarn and customized yarn Canvas Made ups : Tents, tarpaulins, animal covers and agriculture covers : Terry towels, knitted garments
HTHP package dyeing machine Cone winding Dye lot sizes : 985 kgs, 430 kgs, 215 kgs, 96 kgs, 40 kgs, 19 kgs, 12 kgs, 6 kgs, 3 kgs, 1 kg.
Equipped with micro processor controls Spectro readings for color continuity Type of Dyestuff : Reactive, VAT & Disperse Dyestuff used : Procion 'HE" Dyes
TECHNICAL SUPPORT FROM CIBA, Clariant, ColorChem, Atul, Dystar and other MNC's. PACKING TYPE
Cones : 5'57" Cone weighing 1 kg Carton : 32 Cones per carton Container Capacity : 20' FCL: 6000 kgs 40' FCL: 12000 kgs
YARNS ON OFFER
100 % Cotton Dyed PC Dyed: Single component as well as solid. Marle/Grindle Yarns Yarns with special finishing
ECO-FRIENDLY PRODUCTS
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Reorder only by shade numbers as they maintain a formal color continuity library. Testing Equipments
Wash Wheel for Wash Fastness Testing. Crock Meter for Rub Fastness Testing. Per spirometer for Checking Perspiration Fastness.
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Strengths 1. Large capacities of raw material are available to help the downstream products. 2. State of are technology in the spinning mill. 3. Ability to give below 5% user level yarn. 4. Availability of different types of labor. 5. Ability to process small lots. 6. Large capacity of mam made fiber planets. 7. The whole production process done in an efficient way with the work divided among the 7 different mills. 8. Large number of trained work force. 9. Ability to service quality conscious customers. Large logistics chain. 10. 24*7 working capacity for 365 days Weaknesses 1. Lack of value addition. 2. Entire spinning and weaving department are fragmented. 3. Mismatch in the capacities of spinning, weaving and processing Opportunities 1. Huge population of qualified personnel. 2. Emerging biotechnology era. 3. Phasing out of quotas. 4. Proximity to gulf countries, which are emerging as the major consuming countries. 5. Due to agriculture getting mechanized, further large work force will be made available to the mill. Threats 1. Bilateral trade agreement overlooking world trade organization norms. 2. Government foreign policy. 3. International political situation cultural changes. Increasing rates of raw materials. VTU Dept of PG Studies, Belgaum 36
7. The In plant training has given me a chance to observe actual production process. The measures are taken to minimize the wastage; the company tries to reduce the cost of production, focuses on controlling pollution.
8. All together it was a good learning experience as we could see the theory which I can study in class is being put for practical use. The first few days were just spent struggling to adjust to their working conditions. Once they became familiar there was a lot of cooperation from various departments in the organization. Some information could not be given by them as it was classified. On the whole it was a good experience.
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GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls Statement of the Problem:
The problem selected for the study is A study of logistics system at Gokak Textile Ltd.
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Study is limited to within the organization But some extent I have satisfied by the information what I have got still now Organization has contract based transportation so it was difficult to meet the transport contractor.
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STRUCTURE
Logistics Officer
Asst. Holdings
Asst. Holdings
Logistics is concerned with getting product and services where they are needed, when they are also desired. ML/PD includes delivering finished goods to business customers and distributors / dealers. It is also called as Physical Distribution (PD).
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GOKAK TEXTILES LTD. (Gokak Mills Division) Gokak-Falls Key logistic activities:
All of these activities, listed below, may be considered part of the overall logistics process. Inventory management Logistics communication Material handling Order processing Packaging Procurement Return goods handling Warehousing and storage
Logistics System
Logistics Marketing Logistics
Material Storage Raw Materials Components Supplies Manufacturing Finished Goods Storage Business Customers Agencies
Major Cost Centers of Logistics and Marketing Logistics Transportation Warehousing Inventory Order Processing
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Channel structure influences warehousing decisions. Factors considered deciding if a company should use (1) Private - Private warehousing by owning warehouse space (2) Public - Public warehousing by renting warehousing space
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When to order? Based on recorder point = delivery lead time X average daily sales / production requirement.
How much to order? (1) Use inventory software (2) Use formula Where, P = Cost of ordering D = Annual Demand C = Annual inventory cost (% of product cost) V = Average inventory cost. Order Processing (OP) Decisions OP Starts with order receipt from a customer and ends when the customer receives the product as per delivery schedule and quantity in the order.
Functions involved in OP: Sales, marketing, finance, marketing logistics, production planning and control, production.
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THE MISSION OF LOGISTICS MANAGEMENT The mission is to plan and coordinate all those activities necessary to achieve desired levels of delivered service and quality at lowest possible cost. Logistics must therefore be seen as the link between the marketplace and the operating activity of the business. The scope of the logistics spans the organization, from the management of raw materials through to the delivery of the final product Materials flow Suppliers Procurements Operations Distribution Customers
LOGISTICAL INTEGRATION
Suppliers
Physical distribution
Manufacturing support
Procurement
Customers
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Inventory Flow The management of logistics is concerned with the movement and storage of materials and finished products. Logistical operations start with the initial shipment of a material or component part from a supplier and are finalized when a manufactured or processed product is delivered to a customer. From the initial purchase of a material or component, the logistical process adds value By moving inventory when and where needed. Thus the material gains value at each step. For a large manufacturer, logistical operations may consist of thousands of movements, which ultimately culminate in the delivery of the product to an industrial user, wholesaler, dealer or customer.
Similarly for a retailer, logistical operations may commence with the procurement of products for resale and may terminate with consumer pickup or delivery. The significant point is that regardless of the size or type of the enterprise, logistics is useful and requires continuous management attention. In order to understand logistics it is useful to divide it into three areas. Physical distribution Manufacturing support Procurement
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Procurement: Procurement is concerned with purchasing and arranging in-bound movement of materials, parts and /or finished inventory from suppliers to manufacturing or assembly plants, warehouses or retail stores. Procurement is also known as purchasing and buying and in some cases inbound logistics. Procurement is concerned with availability of the desired material assortments where and when needed. Within a typical enterprise, the three areas of logistics overlap. The prime concern of an integrated logistical process is to coordinate overall value-added inventory movement. The three areas combine to provide integrated management of materials.
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2. Operational flows: The second aspect of information requirements is concerned with directing operations to receive, process, and ship inventory as required supporting customer and purchasing orders. Operational requirements deal with Order management Order processing Distribution operations Inventory management Transportation and shipping Procurement
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The Council of Logistics Management (CLM) describes logistics management as - it is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.
Within the firm the challenge is to coordinate individual job expertise into an integrated competency focused on servicing customers. In most situations the desired scope of such coordination transcends the individual enterprise, reaching out to include customers as well as material and service suppliers. Ina strategic sense, the senior logistics officer leads a boundary spanning initiative to facilitate effective supply chain relationships. The excitement of contemporary logistics is found in making the combined results of internal and external integration one of the core competencies of an enterprise. Throughout the history of mankind wars have been won and lost through logistical strengths and capabilities or the lack of them. Even though the generals of the past have understood the critical role of logistics it is only in the recent past that the big organizations have realized its role in the achievement of competitive advantage.
Competitive Advantage: Effective logistics management can provide a major source of competitive advantage. The bases for successes in the marketplace are numerous, but a simple model has been based around the three Cs Customer, Company & Competitor. The source of competitive advantage is found firstly in the ability of the organization to differentiate itself, in the eyes of the customer, from its competition and secondly by operating at a lower cost and hence at greater profit. Seeking a sustainable competitive advantage has become the concern of every manager who realizes the realities of the marketplace. It is no longer acceptable to assume that the goods will sell themselves. An elemental, commercial success is derived either form a cost advantage or a value advantage or, ideally both. The greater the profitability of the company the lesser is the cost of production. Also a value advantage gives the product an advantage over the competitive offerings. Successful companies either have a productivity advantage or they have a value advantage or maybe a combination of the two. There are two main vectors of strategic direction that need to be examined: -
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It is a clich that customers dont buy products they buy benefits. These benefits may be intangible i.e. they relate not to specific product features but to such things as image and reputation. Unless the product or service that we offer can be distinguished in some way from its competitors there is a strong likelihood that the marketplace will view it as a commodity and so the sale will tend to go to the cheapest supplier. Value differentiation can be gained in numerous ways. When a company scrutinizes markets closely it frequently finds that there are distinct value segments. In other words different groups of customers attach different levels of importance to different benefits. The importance of such benefit segmentation lies in the fact that often there are substantial opportunities for creating differentiated appeals for specific segments. Adding value through differentiation is a powerful means of achieving a defensible advantage in the market. Equally powerful as a means of adding value is service. Increasingly it is the case that markets are becoming more service sensitive and this poses a challenge in management of logistics. It is important to seek differentiation through means other than technology. A number of companies have responded to this by focusing upon service as a means of gaining a competitive edge. Service in this context relates to the process of developing relationships with customers through the provision of an augmented offer.
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COMMODITY MARKET
COST
LEADER
In commodity market situations where a companys products are indistinguishable from their competitors offerings the only strategy is to move towards being a cost leader or towards being a service leader. Often the leadership route is not available. This particularly will be the case in a mature market where substantial market share gains are difficult to achieve. Cost leadership strategies have been based upon the economies of scale, gained through greater volume of sales. This is why market share is considered to be so important in many industries. This cost advantage can be used strategically to assume a position of price leader and make it difficult for high cost competitors to survive. This cost advantage can come through effective logistics management. In many industries logistics cost represents such a large part of total costs that that it is possible to make major cost reductions through fundamentally reengineering logistics processes. The other way to come out of the commodity quadrant of the matrix is to seek a strategy of differentiation through service excellence. Customers ion all industries are seeking greater responsiveness and reliability from suppliers; they are looking for reduced lead times, just-in-time delivery and value added services that help them do a better job of serving their customers.
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A firm can gain competitive advantage only when it performs its strategically important activities (designing, producing, marketing delivering and supporting its product) more cheaply or better than its competitors. Value chain activity disaggregates a firm into its strategically relevant activities in order to understand behavior of costs and existing and potential sources of differentiation.
They are further categorized into two types (i) Primary - inbound logistics, operation outbound logistics, marketing and sales, and service (ii) Support infrastructure, human resource management, technology development and procurement
To gain competitive advantage over its rivals, a firm must deliver value to its customers through performing these activities more efficiently than its competitors or by performing these activities in a unique way that creates greater differentiation. Logistics management has the potential to assist the firm in the achievement of both a cost/productivity advantage and a value advantage. The under lying philosophy behind the logistics concept is that of planning and coordinating the materials flow from source to user as an integrated system rather than, as was so often the case in the past, managing the goods flow as a series of independent activities. Thus under a logistics management regime the goal is to link the marketplace, the distribution network, the manufacturing process and the procurement activity in such a way that customers are service at higher levels and yet at lower cost.
REASONS FOR LOGISTICS TO EXIST: Logistics management from this total system is the means whereby the needs of customers are satisfied through the coordination of the materials and information flows that extend from the marketplace through the firm and its operations and beyond that to supplies.
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In this scheme of things, logistics is therefore essentially an integrative concept that seeks to develop a system wide view of the firm. It is fundamentally a planning concept that seeks to create a framework through which the needs of the manufacturing strategy and plan, which in turn links into a strategy and plan for procurement.
Difference between Supply Chain Management and Logistics Management: 1. Supply chain management is a broader concept whereas Logistics management is a narrower concept. 2. The concept of Supply chain management is relatively new whereas the concept of Logistics management is relatively old. 3. Supply chain management is an extension of Logistics management. 4. Logistics management is primarily concerned with optimizing flows within the organization whilst supply chain management recognizes that internal integration by itself is not sufficient.
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Since olden times, railroads have handled the largest number of ton-miles. As a result of the early establishment of a comprehensive rail network connecting almost all the cities and towns, railways dominated the intercity freight tonnage till World War II and in some cases of Europe, Asia and Africa they even connected the countries. This early superiority enabled railways to transport large shipments very economically. Railroads have come a long way, as we can see by just the US figures that 54.0% of intercity transport in 1947 was by Railways, 39.2% in 1958, 36.4 % in 1980 and almost 37% in 1992. The period from 1950-1970 saw a tremendous decline in use of railways. The capability to efficiently transport large tonnage over long distances is the main reason railroads continue to handle significant intercity tonnage and revenue. Railroad operations incur high fixed costs because of expensive equipment, right-of-way (railroads must maintain their own track), switching yards, and terminals. However, rail experiences relatively low operating costs. The replacement of steam by diesel power reduced the railroads variable cost per ton-mile, and electrification offers potential for more reductions. VTU Dept of PG Studies, Belgaum 55
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It is the oldest mode of transportation. First it was the sailing vessels, which was replaced by steamboats in early 1800s and by diesel power in the 1920s. Domestic water transportation involves the Great Lakes, canals, and navigable rivers. In every country, fewer system miles exist for inland water than any other transportation mode. The main advantage of water transportation is the capacity to move extremely large shipments. Water transport employs 2 types of vessels. Deep water vessels which are generally designed for ocean and great lakes use and are restricted to deep water ports for access. In contrast, diesel-towed barges, which generally operate on rivers and canals, have considerably more flexibility.
Water transport ranks between rail and motor carrier in the fixed cost aspect. Although water carriers must develop and operate their own terminals, the right-of-way is developed and maintained by the government and results in moderate fixed costs as compared to railways and highways. The main disadvantage of water transport is the limited range of operation and speed. Unless the origin and destination are adjacent, supplement haul by rail or truck is required. The capability to carry very high cargo at an extremely low variable cost places this mode of transport in demand when low freight rates are desired and speed of transit is a secondary consideration. But, water transport on the other hand isnt all that flexible. Labour restrictions on loading and unloading at docks create operational problems and tend to reduce the potential range of available traffic. Also, a highly competitive situation has developed between railroads and inland water carriers in areas where parallel routes exist. VTU Dept of PG Studies, Belgaum 57
Surprisingly, Pipelines are also one of the major form of transportation medium throughout the world. In 1989, in USA over 53% of all crude and petroleum ton-mile movements were through Pipelines. In addition to Petroleum, other important product transported by pipeline is the natural gas. Pipelines are owned and operated privately in most of the countries and many gas companies act as both gas distributors and contract transportation providers. Pipelines are also utilized for transport of manufacturing chemicals, pulverized dry bulk materials such as cement, flour via hydraulic suspension, and sewage and water within cities and municipalities. Pipelines are very unique in nature compared to other types of transport, such as; they operate on 24-hour basis, seven days a week, and are limited by commodity changeover and maintenance. Unlike other modes, there is no empty Container or vehicle that must be returned. Pipelines have highest fixed cost and lowest variable cost among transport modes. High fixed costs result from right-of-way, construction and requirements for control stations, and pumping capacity. Since pipelines are not labour-intensive, the variable operating cost is extremely low once the pipeline has been constructed. An obvious disadvantage of these pipelines is that they are not flexible and are limited with respect to commodities that can be transported. Experiments regarding transport of solid products are still going on. Coal slurry pipelines are proving to be economical over long distances but it concerns environmentalists, as it requires massive quantities of water.
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Air transport is the newest and the least utilized mode of transport. Its major advantage is its speed, which is accompanied by high costs. A coast-to-coast shipment via air requires only a few hours contrast to days taken by other mean of transportation. The high cost of transport can be traded off for high speed, which allows other elements of logistical design, such as warehousing, inventory to be reduced or eliminated. But still air transport remains more of a potential opportunity than a reality because it is very much underutilized. The high cost of jet aircraft, coupled with erratic nature of freight demand, has limited the assignment of dedicated planes to all-freight operations. However premium carriers provide planes dedicated for freight operations. This premium service started off with documents and has moved onto large parcels, which is an ideal service for firms with a large number of high-value products and time-sensitive service requirements. The fixed cost of air transport is low as compared to rails, water and pipeline. In fact, air transport ranks second only to highway with respect to low fixed cost. Airways and airports are maintained by public funds and terminals are by local communities. The fixed costs of airfreight are associated with aircraft purchase and the requirement for specialized handling systems and cargo containers. But the air freight variable cost is extremely high as a result of fuel, maintenance, and labour intensity of both in-flight and ground crews. Since they require wide-open space, airports are generally not integrated with other means of transport. However more all freight airports are being developed so as to redu ce conflict with passenger operations. No particular commodity dominates the traffic carried by airfreight operations. These operations are carried more on emergency basis than routine basis. Firms usually utilize scheduled or non-scheduled air cargo movements when the situation justifies high cost. Products with greatest potential for regular air movements are those having high value or extremely perishable. When the marketing period for an item is extremely limited, air transport comes into the picture, as it may be the only practical method for logistical operations. VTU Dept of PG Studies, Belgaum 59
Road transport forms an essential part of any transport activity, whether rail, sea or air. It is essential as a supplementary and complementary mode of transport to complete movement by other modes of transport. Eg: From one terminal i.e. the railway station the goods have to be carried to the destination like an area by road. Road transport offers certain advantages like i. Door to door service to customers which neither rail nor neither sea nor air transport can offer. ii. On per unit basis, the cost of making a road is 1/6th that of laying a railway line. iii. Capital investment in case of railways is much less then railways designed to carry equivalent quantum of traffic. iv. Road transport provides employment to six million persons (two million direct and four million indirect) v. There are negative points also to be viewed like: i. As much as 6200 crores are collected in dues but only 10% of this revenue is used for development of roads, which a disadvantage as road transport is still not well organized. ii. Road transport industry is not come of age in India, as there are very few companies, which own the entire fleet of trucks. Single vehicle owners operate most of the road transport.
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Outlined below are the key activities required to facilitate the flow of a product from point of origin to point of consumption. All of these activities, listed below, may be considered part of the overall logistics process. Customer service Demand forecasting/planning Inventory management Logistics communication Material handling Order processing Packaging Plant and warehouse site selection Procurement Return goods handling Traffic and transportation Warehousing and storage
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Respondents 5 40 5 0 50
Percentage % 10 80 10 0 100
Interpretation: In the above graph shows that 10% of customers are using general parcel services, 80% of customers are using Transportation services, 10% of customers are using courier services, & 0% of customers towards the Aviation services.
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Respondents 5 35 10 50
Percentage % 10 70 20 100
160 140 120 100 80 60 40 20 0 Low Reasonable Costly Total Percentage % Respondents
Interpretation: In the above graph shows that 10% of customers say price is low, 70% of customers say price is reasonable, & 20% of customers say price is costly.
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Respondents 0 50 50
Interprepation: In the above graph shows that 100% of damages are not paid by the company.
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4] To identify the goods what company will provide you? a) Batch number Sources Batch number Receipt number Total Respondents 45 5 50 b) Receipt number Percentage % 90 10 100
Respondents
Yes No Total
Interprepation: In the above graph shows that 90% of batch number is given to recognise the goods, & only 10% of receipt number.
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Interpretation: In the above graph shows that 92% of goods reaches at correct time, & 8% of goods reaches will not reach at correct time.
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6] Do you get better service from the logistics which you are using? a) Excellent Sources Excellent Very Good Good Poor Total b) Very Good Respondents 5 35 10 0 50 c) Good Percentage % 10 70 20 0 100 d) Poor
120 100 80 60 40 20 0 Excellent Very Good Good Poor Total Respondents Percentage %
Interprepation: In the above graph shows that 10% customers say excellent, 70% customers say very good, 20% customers say good. About the service they are using.
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7] which company logistics service are you using ? a) TCI Sources TCI VRL M B road services Varma Roadways Total b) VRL Respondents 20 10 10 10 50 c) M B Road services Percentage % 40 20 20 20 100
100 90 80 70 60 50 40 30 20 10 0 TCI VRL M B road services Varma Roadways Total Respondents Percentage %
Interprepation: In the graph shows that 40% of TCI logistics they are using, 20% of VRL logistics they are using, 20% of M B road services they are using, & 20% of varma roadways they are using.
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Respondents 47 3 50
Percentage % 94 6 100
Respondents
Yes No Total
Interprepation: In the above graph shows that 94% of customers satisfied by the service logistics is providing, 6% of customers are not satisfied by the service..
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FINDINGS
Logistics service used by the customers is that, 80% of them are using transportation service, 10% are general parcel, & 10% are courier service. Here, the opinion about the price of logistics is 70% of customers say price is reasonable, 20% say costly, & 10% say low price.
If any damages or wear & tear happen while exporting the company will not pay for the damages. To identify the goods company will provide batch numbers to the individual products that company produces.
The goods will reach the place on the correct time allotted to them. The vehicles are arranged by the customers or vendors to supply the goods to their places.
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SUGGESTIONS
In the company minor accidents occurs to prevent them emergency service must be provided. The company must buy the cotton from the local cotton producers. The top level management must try to fulfill the needs & wants of the employees as early as possible.
The workers who are on contract basis they must be hire on the talent they perform.. According to the talent of the employees the payment must be allotted. Safety measures must be taken while the work is in progress. The goods must be dispatched on the correct time when the customer is needed.
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Outbound Logistics For outbound logistics the organization dont have own vehicles while making sales the organization will make contract with purchaser that the vehicle will be arranged to shift the finished goods to customers but the transportation charge will be paid by the customer itself. The transportation cost has to paid while making the payments of goods purchased. Or the organization will shift the goods to its marketing depots from the depots customers have to arrange the vehicles to shift the purchased goods to their premises.
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ANNEXURE
QUESTIONNAIRE
Dear Sir / Madam, I VITTHAL B. DASAPPANAVAR the student pursuing MBA at VISVESVARAYA TECHNOLOGICAL UNIVIRSITY (VTU) Belgaum. As a part of my curriculum and course requirement, I have to undergo a major concurrent project entitled as Logistics system towards vendors to be undertaken at Gokak Textiles Ltd., Gokak Falls. I would highly appreciate if you could spare a few minutes of your precious time in answering this questionnaire. This would support & help me in completing my project. The information so collected will be kept confidential and will be purely used for academic purpose only. So I kindly request you to please tick the appropriate (Tick ).
PERSONAL DETAILS :
Name Age .... Address .... Telephone . Sex Occupation .. : Male Female
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Q 1. What sort of logistics services you have been make use? b) General parcel b) Transportation c) Courier service d) Aviation
Q 2. What is the opinion about the price of logistics services? a) Low b) Reasonable c) costly
Q3. Any damages or wear & tear are paid by the company? b) Yes b) No
Q4.To identify the goods what company will provide you? b) Batch number b) Receipt number
Q6. Do you get better service from the logistics which you will be using? b) Excellent b) Very Good c) Good d) Poor
Q7. which company logistics service are you using ? b) TCI b) VRL c) M B Road services
Q8. Are you satisfied by the service provided by the logistics ? b) Yes b) No
THANK YOU very much for your kind co-operation VTU Dept of PG Studies, Belgaum 75
BIBILIOGRAPHY
While preparing project report the following sources are used
Company booklets Gokak Textiles & SP Group Catalogues www.google.com (Search Engine) www.spgroup.com www.gokakmills.com
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