To study and formulate strategy to improve the

Logistics and Distribution System

For Abhishek Yarn, Sanghera

By
Nacchhater Singh,
MBA-2009-11

Under The Guidance of:

Mr. Ashutosh Singh, Mr. Aniket Raj Aggarwal
Head SCM Head, Commercial & Logistics
Yarn Division Yarn Division
Abshihek Industries Ltd. Abshihek Industries Ltd.

University Business School, Chandigarh

27.06.2010
 Certificate of Approval

The following Summer Project Report titled "To study and formulate the strategy to improve
the logistics and distribution system thereby increasing its overall efficiency" is hereby
approved as a certified study in management carried out and presented in a manner
satisfactory to warrant its acceptance as a prerequisite for the award of Master in Business
Administration for which it has been submitted.

It is understood that by this approval the undersigned do not necessarily endorse or approve
any statement made, opinion expressed or conclusion drawn therein but approve the Summer
Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner Dr. Deepak Kapoor, Dr. Monica Bedi

2. PG Summer Project Co-coordinator

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 Certificate from Summer Project Guide
rom Summer Project Guides

This is to certify that Mr. Nacchhater Singh, a student of the Master in Business Administration
has worked under our guidance and supervision. This Summer Project Report has the requisite
standard and to the best of our knowledge no part of it has been reproduced from any other
summer project, monograph, report or book.

Mr.Ashutosh Singh
Head, Supply Chain Management
Yarn Division
Abhishek Industries Ltd.
Sanghera, Barnala.

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 Acknowledgment

I am thankful to my project guide Mr.Ashutosh Singh for providing me an opportunity to work

on this project. I especially thank Mr.Aniket Raj Aggarwal for his constant support and
encouragement without which this project would never have seen the light of completion.

My special thanks to Mr.Sanjeev Verma, Mr.Rajdeep Gill, Mr.Manoj kalia, Mr.Ranjeet ,

Mr.Lakhwinder Singh, Mr.Madhu Sudan, Mr.Gurpreet Singh who inspite of their preoccupations
and busy schedule in the office left no stone unturned in enhancing my knowledge to achieve
the desired target.

I extend my sincere gratitude to my faculty guide Dr.Deepak Kapoor and Dr.Monica Bedi for
guiding and helping me at every stage of this project.

I am also grateful to all the people who directly or indirectly supported me during the course of
the project and provided value addition to it through their constructive feedback. They all were
a source of inspiration and have continuously motivated me to put my best efforts in the
project.

Last but not the least my heartfelt thanks to my erudite teachers and my colleagues who have
been the guiding light all through.

Nacchhater Singh Sandhu

MBA-2011
UBS, Chandigarh

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Executive Summary
Abhishek Yarn, which is one of the divisions of Trident Group, is into manufacturing of grey
yarn. The project intended to study and formulate a strategy for Abhishek Industries Limited to
increase the efficiency of logistics and distribution system

Efficiency has been measured on following parameters:

1. Cost
2. Time

Project is broadly categorised into following categories:

1. Internal Logistics
2. Logistics for Abhishek Home textiles, Dhaula.
3. Logistics for other domestic customers except AHT.

Project started with the study of the complete logistics and distribution process. Data was
collected for the period Jan’10-May’10 (From the company’s ERP system) and analysis was
done for the various patterns that arose from that data and finding the bottlenecks and
inefficiencies in the system.

A pilot project was implemented to find the effect of size of vehicle on the efficiency of internal
logistics and finding the feasibility of implementing the same for complete Raw material
transfer. Next phase was to evaluate the various options available for the logistics for AHT,
Dhaula which is the major customer comprising around 36% of the sales. Various studies and
observations were done to optimise the utilization of vehicles and time.

Finally in last phase, vehicle and transport union utilization were analysed based on the data
collected. Recommendations were made for the various deficiencies and problems which can
happen in the future. Also Optimum marketing Order priority matrix was created based on the
cost incurred per kg of the dispatch. This includes the optimum order size for each destination
and then selecting the most optimum option for the transportation.

Finally the implementation plans were developed based on the priority and also on the basis of
process time lead. Basic parameters for implementation plan were:

1. Lead Time (Includes approval time etc)

2. Cost Incurred
3. Changes required.

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Table of Contents

Certificate from Summer Project Guide ...................................................................................................... 3

Acknowledgment .......................................................................................................................................... 4
List of Tables ................................................................................................................................................. 8
List of Figures ................................................................................................................................................ 8
1. Group Introduction ................................................................................................................................... 9
Home textiles ............................................................................................................................................ 9
Paper ....................................................................................................................................................... 10
Chemicals ................................................................................................................................................ 10
Yarn ......................................................................................................................................................... 10
Energy ..................................................................................................................................................... 10
2. ABHISHEK YARN ...................................................................................................................................... 13
Challenges and Threats ........................................................................................................................... 14
Clients...................................................................................................................................................... 15
Product Range ......................................................................................................................................... 15
3. Supply Chain Management ..................................................................................................................... 16
Elements of the Supply Chain ................................................................................................................. 16
Levels in Supply Chain Management ...................................................................................................... 17
Supply Chain Decisions ........................................................................................................................... 18
4. SCM Department Structure .................................................................................................................... 20
5. Supply Chain Management Process Charts ............................................................................................ 23
6. Objective: ................................................................................................................................................ 26
Types of Raw Material: ........................................................................................................................... 28
Mode of Transfer: ................................................................................................................................... 28
SWOT- Internal Logistic........................................................................................................................... 29
Pilot Study: .............................................................................................................................................. 30
Other Recommendations: ....................................................................................................................... 32
8. Objective 2 .............................................................................................................................................. 33
AHT’s Share in the total dispatch ............................................................................................................ 33
Scheduling Contract ................................................................................................................................ 33

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 Mode of transfer ..................................................................................................................................... 34
Cost Incurred ........................................................................................................................................... 34
Detailed Dispatch flow Chart .................................................................................................................. 34
SWOT- AHT.............................................................................................................................................. 35
Data Analysis ........................................................................................................................................... 36
Future Strategies ..................................................................................................................................... 37
Recommendations: ................................................................................................................................. 37
Evaluations Of each recommendation.................................................................................................... 38
9. Objective 3 .............................................................................................................................................. 45
SWOT- Domestic Dispatch ...................................................................................................................... 46
Region Wise Dispatch ............................................................................................................................. 47
Destination Wise Dispatch ...................................................................................................................... 47
Destination Wise transporter ................................................................................................................. 48
Transporter Wise Distribution ................................................................................................................ 48
Time Analysis .......................................................................................................................................... 49
Marketing Order Priority Matrix ............................................................................................................. 52
10.Implementation Plans ............................................................................................................................ 54
Short Term Implementation Plan: .......................................................................................................... 54
Long Term Implementation Plan: ........................................................................................................... 54
11. References ............................................................................................................................................ 56

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List of Tables

Table 1: List of major export customers ..................................................................................................... 15

Table 2: Product Range ............................................................................................................................... 15
Table 3: Raw Material Transfer Data (Source: Daily Manual Register)...................................................... 30
Table 4: Time-Motion Study for Bales Transfer .......................................................................................... 31
Table 5: Dispatch Data to AHT, Dhaula. (Source: SAP, Jan’10-May’10) ...................................................... 36
Table 6: NPV Calculation for New Trolley ................................................................................................... 39

List of Figures

Figure 1: Levels in Supply Chain Management ........................................................................................... 17

Figure 2: SCM Department’s Top Ladder Hierarchy.................................................................................... 20
Figure 3: Commercial and Logistics’ Hierarchy ........................................................................................... 20
Figure 4: Raw Material Stores Hierarchy..................................................................................................... 21
Figure 5: Spares Stores Hierarchy ............................................................................................................... 21
Figure 6: Waste Dispatch Section Hierarchy ............................................................................................... 22
Figure 7: Purchase section Hierarchy .......................................................................................................... 22
Figure 8: Purchase Process .......................................................................................................................... 23
Figure 9: Store Process ................................................................................................................................ 23
Figure 10: Waste Dispatch Process ............................................................................................................. 24
Figure 11: Finish Good Dispatch Process .................................................................................................... 25
Figure 12: Raw Material Flow Chart. ........................................................................................................... 27
Figure 13: Segment Wise Dispatch Distribution (Source: SAP, Jan’10- May’ 10)........................................ 33
Figure 14: Dispatch Flow Chart .................................................................................................................. 34
Figure 15: Graphical Representation of Table 5.......................................................................................... 36
Figure 16: Layout of closed truck considered for negotiation. Size: 32’ x 8’ x 8.5’ ..................................... 38
Figure 17: Unloading Ramp Condition at AHT 2.......................................................................................... 44
Figure 18: Category Wise Dispatch Distribution ......................................................................................... 45
Figure 19: Region Wise Dispatch ................................................................................................................. 47
Figure 20: Destination Wise Dispatch Distribution ..................................................................................... 47
Figure 21: Destination Wise Transporter Used ........................................................................................... 48
Figure 22: Transporter Wise Distribution.................................................................................................... 48
Figure 23: Time Analysis for Domestic Dispatch (Source SAP, Jan’10-May’10) .......................................... 49
Figure 24: Marketing Order Priority Matrix. ............................................................................................... 53

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1. Group Introduction

The Trident group is a dynamic and continuously growing group of companies creating a
buoyant economic climate focussed on generating economic prosperity for the stakeholders,
while growing harmoniously with the community and environment. Levering business from an
expanding product portfolio, Abhishek Industries Limited, the flagship company of the group is
one of the largest towel manufacturers in the world, one of the world’s largest agro based
paper manufacturer and one of the largest yarn producers in India. Strong business ethics,
excellence in business, creating a productive work environment, continuous improvement
through sound corporate governance and dynamic employee engagement have been at the
foundation for the continuous success of the Group.

Making way in Punjab as an agro-based manufacturer in 1990, the Group has diversified and
expanded multifold giving way to business based on sustainable growth. Under the dynamic
leadership of Mr. Rajinder Gupta, the CEO and MD of the Group, Trident continues to grow
embracing new challenges, expanding boundaries and creating new opportunities.

With business spanning across 54 countries, Trident today is Rs. 25 billion enterprise with the
employee headcount more than 10,000, and providing indirect employment to 20,000 people.
Implementing sound Corporate Governance as the basic management principle, Trident is a
pioneer at it. It is the recipient of ICSI National Award for Excellence in Corporate Governance,
2006. Abhishek Industries Limited has been awarded the prestigious 'International Supplier of
the Year' for 2001, 2003, 2005 and 2006 by Wal-Mart, USA and 'Supplier of the Year Award' for
2006 by JCPenney Corporation. Achieving a CAGR of more than 30%, it is one of the fastest
growing Groups of companies of India.

Trident Group is currently into 5 businesses namely Home Textiles, Paper, Yarn, Chemicals and
Energy.

Home textiles
Trident offers a wide variety of the best quality towels in attractive designs and colours.
Exported across 54 countries world-wide, it is one of the largest terry towel manufacturers in
the world. They have accomplished this position in a short span of a decade. Commissioned in
1998, the ultra-modern terry towel unit was started to vertically integrate the existing cotton
spinning facilities. Now the units have reached the capacity of 40000 MT / Annum of Towel
production and 6825 MT / Annum of Cotton Yarn Processing. Their clients include some of the
leading retail chains in US and Europe and many other countries across the globe. Trident
towels are available in many countries at all retail segments like Departmental stores, Mass
merchants, Specialty stores, Club stores and Premium brand stores.

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Paper
Growth in harmony with nature and environment has always been the guiding philosophy at
Trident. Stemming from this philosophy is the expanding paper business. The paper at the
Paper Division is produced in eco-friendly manner making use of wheat straw and agro-residue
as prime raw material. Having been commissioned in 1992, the production capacity of the unit
has increased to 400 TPD. Further expansions of more than 100,000 TPA, have recently been
made for addition of special grade products. The unit produces both writing and printing grades
of paper for various segments. Their customers include Renowned Publishing House, Children's
Books Publishers, Press Houses, Educational Institutes, Computer Stationery Manufacturers,
Business Stationery Manufacturers, Government bodies and Corporate Houses.

Chemicals
The Sulphuric acid plant was set up in 1985 with initial production capacity of 33000 TPA, which
was increased to 100,000 TPA in 1997. Today, the company has become the leading Sulphuric
acid manufacturer. Further, the company is planning to set up a Glass Make Plant for
manufacturing LR and AR grades of Sulphuric acid by importing technology from Germany.
Battery Grade Sulphuric acid is the premium quality product. Commercial Grade is also
manufactured keeping in view the larger market share.

Leading battery manufacturers and other high-end consumers comprise the clientele for these
products.

Yarn
Trident manufactures the finest quality yarn catering to both domestic and international
markets. Manufacturing a wide variety of quality yarn, they have accomplished a significant
presence in America, Europe, Africa, and the Far & Middle East within a decade of
commencement of yarn operations. Besides catering to the domestic and international
markets, a part of the yarn produced is also used for captive consumption by Terry Towel
Division of Trident.

Energy
At Trident, keeping in view the increasing requirements of the continuously expanding
operations, captive power is generated to meet the demands of the industry. The power
generated internally aids in uninterrupted supply of power for the production processes,
ensuring enhanced efficiency, round-the-clock production, and cost savings.

The main outputs are steam and power that meet the requirements for operations of
production plants.

Trident Group is also expanding its business into Sugar, Construction and Consultancy domains.

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Major Customers

Yarn Terry towel Paper Division

Arvind Mills Wal-Mart Thompson Press

Elegant Overseas JC Penney Gopsons Printing

Kapoor Industries Target Aggarwal Accurate printers

Bamboo Tex, Turkey Ikea Sahara

Chemitax, Belgium K-Mart Tata Mc Graw

IMM SPA, Italy Create & Barrel Repro India

Primark Oxford University Press

Linen N Thing Navneet Publications

Bath and Beyond NCERT

Shoppers Stop IGNOU

Spencer’s Bureau of Text Books

Big Bazaar Sahitya Bhawan

Sahara Sundaram Multi Pap Ltd.

Ebony Indian Railways

Westside

Oberoi Hotel

Taj Hotel

ITC Shereton

Marriot

Hyatt Group

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Awards and Recognitions
Year Awards
2010 Texprocil Gold Trophy for highest exports in Terry Towel.
2009 Best Supplier Quality Award (South Asia)
2008 Award for Best HR strategies
2007 JC Penney Supplier of the Year Award
2007 Padma Shri Award
2006 Safety Award
2006 Wal*Mart International Supplier of the Year
2006 National Award for Excellence in Corporate Governance
2006 CITI Birla Award for Quality Management
2005 Wal*Mart International Supplier of the Year
2005 Excellence in Corporate Governance
2005 ICAI Awards for Excellence in Financial Reporting
2005 ICWAI National Award for Good Performance
2005 Distinguished Entrepreneurship Award
2005 Udyog Ratna Award
2005 Outstanding Export Performance for 2004-05
2005 Merit Award at Kaizen Summit
2004 Excellence in Corporate Governance
2004 E&Y – India Inc Icons of the Year
2004 Tata Crucible Business Quiz, CII Quality Circle
2003 Wal*Mart International Supplier of the Year
2001 Wal*Mart International Supplier of the Year
1999 Energy Conservation Award
1990 AI Second Best Performed SSP Unit Award
1989 FAI Best Performed SSP Unit Award
1989 Udyog Patra Award
1988 FAI Runner up Award
1985 Yuva Shakti Puraskar

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2. ABHISHEK YARN
The Company is one of the largest yarn spinners of India with spinning capacity of 1,25,952
spindles at single location. The Company has total spinning capacity of 1,76,352 spindles and
also has 1920 rotors.

The year under review has witnessed special focus on value added products as recognized to be
the major drivers of growth. To this effect, the division has undertaken modernization and
expansion of capacity leading to increase in turnover.

Optimization of resources, lean manufacturing and energy saving techniques have been the
cornerstones of the year improving productivities and other operational parameters.

The Company is perpetually engaged in the process of making efforts to be globally relevant in
a competitive scenario and therefore is expanding the spinning capacity by 1,00,800 spindles at
Budni in Madhya Pradesh. The first phase of this expansion consisting of 50,400 spindles has
already been completed. The expanded capacity would concentrate on manufacturing special
yarns like compact, elli-twist, core-spun and special cottons like supima, organic and giza. This
would foster expansion of product base with count range extending to Ne 60. The Company has
adapted the latest technology, encourages better customer relationships and religiously
organizes yarn dealers’ meets to the effect.

Facilities:

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Strengths and Opportunities
Technology:

The division has adopted state of art technology and is abreast of all the current advancements
in the field due to its attempts of accumulating technological updates.

Projected growth of textile industry:

Considering the immense growth potential of Industry, companies like us who have
implemented process and technology of global standards can live on substantial hopes of
success.

Access to raw materials:

The major raw material, cotton is sourced locally following the Company’s principle of
establishing integrated synergies in raw material sourcing, manufacturing facilities and markets,
therefore helping in lean manufacturing.

Geographical diversification:

The Company is setting up textile facility at Madhya Pradesh for fine counts which would
enhance the division’s product basket and hence increase customer base.

Challenges and Threats

Increased competition:

The increase in capacity in the yarn spinning industry in recent time and globalization
momentum have led to manifold increase in competition internationally as well as domestic.

Cotton sourcing:

Government intervention in fixing Minimum Support Price (MSP) has badly impacted
international competitiveness of industry and likely to have the impact in the future as well.

Capital Expenditure

The Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh which involves a total
capital outlay of Rs 3,737 million. This project is being implemented in phased manner. The first
phase of expansion consisting of 50,400 spindles has been completed in April 2009 and the
second phase has been completed in the third quarter of financial year 2009-10.

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Clients
The major segments Abhishek Yarn serves to are:
1. Knitting
2. Weaving
3. Denim
4. Fine count shirting and sheeting

Yarn is exported to the following countries:

Bangladesh Nepal
Belgium Slovakia
Chile Korea
Egypt Philippines
Israel Singapore
Italy Spain
Latvia Sri-lanka
Lithuania Switzerland

Table 1: List of major export customers

Product Range

Organic Cotton Yarn Corn/Cotton Yarn

Compact Yarn Soya Fibre Yarn
Slub Yarn Contamination Control Hosiery Yarn
Bamboo/Cotton Core Spun Lycra Yarn
Blended Yarn
Cotton/PC Blended Yarn Imported Mixing Yarn
Bamboo/Cotton Open end Yarn
ZERO Twist Yarn Open end Slub
Modal/Cotton Blended Yarn

Table 2: Product Range

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3. Supply Chain Management

A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Supply chains exist in
both service and manufacturing organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm.

Elements of the Supply Chain

A simple supply chain is made up of several elements that are linked by the movement of
products along it. The supply chain starts and ends with the customer.

1. Customer: The customer starts the chain of events when they decide to purchase a
product that has been offered for sale by a company. The customer contacts the sales
department of the company, which enters the sales order for a specific quantity to be
delivered on a specific date. If the product has to be manufactured, the sales order will
include a requirement that needs to be fulfilled by the production facility.

2. Planning: The requirement triggered by the customer’s sales order will be combined
with other orders. The planning department will create a production plan to produce
the products to fulfill the customer’s orders. To manufacture the products the company
will then have to purchase the raw materials needed.

3. Purchasing: The purchasing department receives a list of raw materials and services
required by the production department to complete the customer’s orders. The
purchasing department sends purchase orders to selected suppliers to deliver the
necessary raw materials to the manufacturing site on the required date.

4. Inventory: The raw materials are received from the suppliers, checked for quality and
accuracy and moved into the warehouse. The supplier will then send an invoice to the
company for the items they delivered. The raw materials are stored until they are
required by the production department.

5. Production: Based on a production plan, the raw materials are moved inventory to
the production area. The finished products ordered by the customer are manufactured
using the raw materials purchased from suppliers. After the items have been completed
and tested, they are stored back in the warehouse prior to delivery to the customer.

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 6. Logistics/Transportation: When the finished product arrives in the warehouse,
the shipping department determines the most efficient method to ship the products so
that they are delivered on or before the date specified by the customer. When the
goods are received by the customer, the company will send an invoice for the delivered
products.

Levels in Supply Chain Management

To ensure that the supply chain is operating as efficient as possible and generating the highest
level of customer satisfaction at the lowest cost, companies have adopted Supply Chain
Management processes and associated technology. Supply Chain Management has three levels
of activities that different parts of the company will focus on: strategic; tactical; and
operational.

Figure 1: Levels in Supply Chain Management

1. Strategic: At this level, company management will be looking to high level strategic
decisions concerning the whole organization, such as the size and location of
manufacturing sites, partnerships with suppliers, products to be manufactured and sales
markets.

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 2. Tactical: Tactical decisions focus on adopting measures that will produce cost benefits
such as using industry best practices, developing a purchasing strategy with favored
suppliers, working with logistics companies to develop cost effect transportation and
developing warehouse strategies to reduce the cost of storing inventory.

3. Operational: Decisions at this level are made each day in businesses that affect how
the products move along the supply chain. Operational decisions involve making
schedule changes to production, purchasing agreements with suppliers, taking orders
from customers and moving products in the warehouse

Supply Chain Decisions

There are four major decision areas in supply chain management:

1. Location Decisions.
2. Production Decisions.
3. Inventory Decisions.
4. Transportation (distribution) Decisions.

Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. The location of facilities involves a commitment of
resources to a long-term plan. Once the size, number, and location of these are determined, so
are the possible paths by which the product flows through to the final customer. These
decisions are of great significance to a firm since they represent the basic strategy for accessing
customer markets, and will have a considerable impact on revenue, cost, and level of service.
These decisions should be determined by an optimization routine that considers production
costs, taxes, duties and duty drawback, tariffs, local content, distribution costs, production
limitations, etc. Although location decisions are primarily strategic, they also have implications
on an operational level.

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Production Decisions
The strategic decisions include what products to produce, and which plants to produce them in,
allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before, these
decisions have a big impact on the revenues, costs and customer service levels of the firm.
These decisions assume the existence of the facilities, but determine the exact path(s) through
which a product flows to and from these facilities. Another critical issue is the capacity of the
manufacturing facilities--and this largely depends the degree of vertical integration within the
firm. Operational decisions focus on detailed production scheduling. These decisions include
the construction of the master production schedules, scheduling production on machines, and
equipment maintenance. Other considerations include workload balancing, and quality control
measures at a production facility.

Inventory Decisions
These refer to means by which inventories are managed. Inventories exist at every stage of the
supply chain as either raw material, semi-finished or finished goods. They can also be in-process
between locations. Their primary purpose to buffer against any uncertainty that might exist in
the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of
their value, their efficient management is critical in supply chain operations. It is strategic in the
sense that top management sets goals. However, most researchers have approached the
management of inventory from an operational perspective. These include deployment
strategies (push versus pull), control policies --- the determination of the optimal levels of order
quantities and reorder points, and setting safety stock levels, at each stocking location. These
levels are critical, since they are primary determinants of customer service levels.

Transportation Decisions
The mode choice aspect of these decisions is the more strategic ones. These are closely linked
to the inventory decisions, since the best choice of mode is often found by trading-off the cost
of using the particular mode of transport with the indirect cost of inventory associated with
that mode. While air shipments may be fast, reliable, and warrant lesser safety stocks, they are
expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate
holding relatively large amounts of inventory to buffer against the inherent uncertainty
associated with them. Therefore customer service levels and geographic location play vital roles
in such decisions. Since transportation is more than 30 percent of the logistics costs, operating
efficiently makes good economic sense. Shipment sizes (consolidated bulk shipments versus
Lot-for-Lot), routing and scheduling of equipment are key in effective management of the firm's
transport strategy

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 4. SCM Department Structure

1. Top Ladder

Ashutosh
Singh
Head SCM

Anil Kumar Manoj Kalia

Aniket Raj Aggarwal Ranjeet Kumar Rajdeep Gill Sanjeev Verma
Waste Purchase
Commercial & Logistics RM Stores Purchase (Spares) Spare Stores
Dispatch (Packing)

Figure 2: SCM Department’s Top Ladder Hierarchy

2. Commercial and Logistic

Aniket Raj Aggarwal

Executive, Commercial & Loistics

Gurpreet P.K. Prakashan Madhu

PPC & Excise Export Billing & Excise Logistics Jagsir, Sukhjeet
Ravinder & Ranjodh
Loading Supervisor

Lakhwinder Singh Pawan Kumar

Billing/Dispatch Logistics

Figure 3: Commercial and Logistics’ Hierarchy

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3. Raw Material Stores

Ranjeet Kumar
Raw Material Store

Avtar Singh
Raw Material Godown

Jai Prakash KaramJit Singh

Balbir Singh Prem Chamkaur Singh
Unit 3 Unit 1
Unit 2 Reliever Unit 4

Figure 4: Raw Material Stores Hierarchy

4. Spares Stores

Sanjeev Verma
Spares and consumable store

Inderjeet Singh Gurjant Singh Dev Narayan Gurpreet Singh

Unit 1 & 2 Unit 3 & 4 Operative Operative

Figure 5: Spares Stores Hierarchy

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5. Waste Dispatch

Anil Kumar
Waste Dispatch

Shambu Nath jaswinder Singh Manoj

Waste Dispatch Waste Dispatch Waste Dispatch

Figure 6: Waste Dispatch Section Hierarchy

6. Purchase

Ashutosh Singh

Rajdeep Gill Manoj Kalia

Spare and Consumable Purchase Packing Material Purchase

Pritpal Singh Gurpiar Singh

Figure 7: Purchase section Hierarchy

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5. Supply Chain Management Process Charts

1. Purchase Process
Purhcase has been done under two heads:

1. Machines, Spares & Consumables.

2. Packing material.
Basic process for the procurement of both is same as mentioned below:

Purchase Unit Head's Request for Comparative Purchase

Requisition Approval Quotation Statement for RFQ. Order

Figure 8: Purchase Process

2. Store’s Process
Store an AY, Sanghera has been divided into two basic parts:

1. Raw Material Stores

2. Spares and Consumable stores.

Raw material stores process has been discussed in detail in the later part of the project report.

Spares and Consumable differs from the RM stores at the point of issuing the material only. In
RM stores, material has been issued against the lot no. Whereas in Spares and consumable
stores, material has been issued against the item number.

Basic material flow followed in the stores is as follows:

GIN to MIN Stocking and Issuance against

Purchase order
(As in RM Stores) Tagging Item No.

Excise Deptt. MIRO

Figure 9: Store Process
(Vat Claim) (Payment)

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3. Logistics and Distribution
Logistics and distribution basically comprised of two elements:

1. Waste Logistic
2. Finish Good Logistic

Waste Dispatch

Various types of waste have been produced during the various stages of production line. Some
of these wastes have been consumed internally whereas some has been sold to other customer
who uses this waste in their processes.

Basic Waste Dispatch Process has been shown below:

• Daily Waste Production Report

Generation • Marketing requirement

• Dispatch Plan
Logistics

• Dispatch (Logistics)
Commercial • Billing/Invoice

Figure 10: Waste Dispatch Process

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4. Finish Good Dispatch
Finish good, once produced, came to finish good godown after the packing. These FG has been
dispatched to various customers as per the dispatch plan from the Marketing.

Basic Finish goods Dispatch process is as below:

• Production Stock
Plan • Tentative dispatch plan

• Order for vehicle

Order • Detailed Dispatch Plan

• Vehicle Gate-In
Loading • Weighment, Loading, 2nd Weigment

• Billing
Commercial • Vehicle Gate Out

Figure 11: Finish Good Dispatch Process

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6. Objective:
To study and formulate the strategy to improve the efficiency of Logistics and
Distribution System.

Sub-Objectives
1. To study and formulating the strategy for improving the efficiency of
Internal Logistic.
2. To study and formulating the strategy for improving the efficiency of
AHT Logistic.
3. To study and formulating the strategy for improving the efficiency
Domestic Logistics other than AHT.

Methodology
Internal Logistics:
1. Complete study of the Raw Material flow has been carried out.
2. Pilot project was implemented to see the effects of improvement on the total diesel
consumption per year.
3. Data for the bales transfer and diesel consumed was gathered for the last 3 months.
4. Analysis was being carried out for: Increased/Decreased bale transfer per litre,
Increase/Decrease diesel consumption per bale and finally total diesel saving per year
5. Time-Motion Study was carried out for calculating the man-hr. saving per year.

External Logistics:
1. Complete study of the Finish good flow has been carried out.
2. Data was gathered for the total dispatch done for the last 5 months (Jan’10-May’10)
3. Analysis was done to find the pattern and major areas of concern.
4. All areas of concern was observed for some time and finally recommendations has been
finalised.

Limitations:
1. Complete analysis has been done on secondary data only.
2. Data for the Raw Material shifting was stored in daily entry register only.
3. Reasons for the events happened were not available anywhere so analysis for the same
has been done on the basis of observations or interview with the people working on the
process.

26 | P a g e
7. Objective 1
Internal Logistic: Raw Material Transfer from RM stores to Production Line.

As shown in below mentioned process flow, Raw material (RM), bought by ATCL, has been
stored in the godown according to the lot number assigned to it. Daily RM has been issued from
the various lots according to the requirement of the R&D, as given in the issue slip against the
particular lot number. RM has been issued from the various lots to make the product more
homogeneous, which happened during the mixing stage in the production line.

Basic Process for Raw Material Store is as follows:

Cotton Vehicle Gate Inward Weighing Unloading Lot No.

& Counting
At Gate (GIN) (TAT Assigned
Start)
R&D approval

)
Physical RM Material Issue Material
transfer
Against Slip no. Inward (SAP)

RM requisition
slip (From R&D)

Figure 12: Raw Material Flow Chart.

27 | P a g e
Types of Raw Material:

Basically two types of raw material have been transferred as described as follows:

1. Cotton: This is the basic element of the yarn produced in any unit. Various types of cotton
have been transferred like Shankar 6, MCU 5, Geza, Organic cotton etc.

2. Comber Noil: This is basically the waste cotton with short fibre length generally produced
from the Comber process. Comber Noil has been produced in the Unit I, Unit II and Unit IV and
has been used in the Open End Yarn in the Unit III. Generally, daily production of comber noil is
120-125 bales of 85-90 kg each.

Mode of Transfer:
Raw material has been generally transferred with the help of tractor and open trolley.

Generally, trolley can transfer 18 bales per round.

Loading on the trolley has been done manually.

28 | P a g e
SWOT- Internal Logistic

Strength:
1. Excellent RM management system with Independent Lot no. for every lot, Segregated
Storage as per lot no., different godown for each unit etc.
2. Good Issuing Process.
3. Physical vs System inventory management system.
4. Trained managers and manpower with excellent knowledge of inventory handling and
Management.

Weakness:
1. Poor godown conditions.
2. Roads in very bad condition leading to high RM transfer cost.
3. Exposure of RM to the external conditions like rain, dust, sunrays etc leads to wastage.
4. Stacking system not so good.
5. Lack of infrastructure like availability of PC which leads to manual data storage etc.
6. Transferring system not so efficient and good.

Opportunities
1. RM inventory level going to increase in the coming years due to company’s target of
15000cr by 2015 with 15% PAT.
2. Material handling and storage system have to be modernize to reduce the transfer as
well as carrying cost thereby increasing the gross profit.
3. Closed godown has to built with in close proximity to each unit.

Threats
1. Tough working conditions as manpower has to work in open areas.
2. If not done, handling inventory in the future will become a threat.

29 | P a g e
Pilot Study:

Study was done by increasing the size of trolley. Bigger trolley was able to transfer 30 bales as
compared to the 18 bales per round by existing trolley.

Feb March April May

PB11H1175 247.0 183.2 154.0 449.4
Avg. RM PB19D2748 0.0 0.0 0.0 269.4
Transfer PB19B2503 0.0 0.0 0.0 289.0
Feb March April May
PB11H1175 6668.0 5129.0 1232.0 13481.0
Total RM PB19D2748 0.0 0.0 0.0 6736.0
Transfer PB19B2503 0.0 0.0 0.0 7224.0
Feb March April May
PB11H1175 --- --- --- 130.0
Total Fuel PB19D2748 --- --- --- 65.0
Consumed PB19B2503 --- --- --- 60.0
Feb March April May
PB11H1175 --- --- --- 4.3
Avg. Fuel PB19D2748 --- --- --- 2.6
Consumption PB19B2503 --- --- --- 2.4
Feb March April May
Avg. RM PB11H1175 --- --- --- 103.7
PB19D2748 --- --- --- 103.6
Transfer
Per lt. PB19B2503 --- --- --- 120.4

Table 3: Raw Material Transfer Data (Source: Daily Manual Register)

Analysis:
As clearly visible from the table, number of bales transferred per litre of diesel has been
increase to 120.4 bales from 103.6 bales i.e. almost 17 more bales per litre can be transferred.

30 | P a g e
Saving:
Two types of saving were observed:

1. Diesel Saving:

Although with the bigger trolley, total diesel consumption per round also increased but specific
fuel consumption i.e. diesel consumed per bale decreases which helps in decreasing the overall
total diesel consumption.

1. No. Of bales increased per litre of diesel: 17 bales per litre

2. Total diesel saved per bale: 0.014 lt.
3. Total Diesel saved per year: 0.014 x 365 x 120 or 614 litre or Rs. 30660 per year.
(Assuming Diesel @Rs.50 per litre and 120 bales transferred to Unit III as per Mr.
Shambu, Waste stores)

2. Man-Hr saving

Again as was the case with diesel consumption, Total man-hr per round increases but man-hr
required to transfer per bale decrease which leads to man-hr saving as calculated below:

Avg. round required:

Current: 270/18 or 15 round Improved: 289/30 or 10 round
Avg. manpower required per round: (Man-hour @ Rs25 per hr.)

30 bales 18 Bales
Loading time per Bale (in min.) 0.47 14.00 8.40
Transit time (in min.) 14.00 16.00 16.00
Unloading Time (in min.) 0.27 7.00 4.80
Transit time (in min.) 13.00 13.00 13.00
50.00 42.20
Time Required per bale 1.67 2.34
Yearly time required hrs. 1216.67 1711.44
Table 4: Time-Motion Study for Bales Transfer

Yearly Man-hr. Saved: 495 hrs.

Total saving: Rs.18500 (In tangible terms)

31 | P a g e
Other Benefits:
1. Greater level of motivation as well as satisfaction level.
2. Extra man-hr. can be utilized for other purposes

Other Recommendations:
1. Roads leading to godowns should be properly maintained to avoid any damage to the
transportation system.
2. Godowns conditions must be improved as lot of wastage happens due to increase in the
dust levels, change in moisture content level etc.
3. Shelf stacking system can be used to avoid the load of top bales on the bales at the
bottom.
4. All the bales should be covered properly to avoid the contamination due to rain, dust
etc.
5. Better mode of transportation should be implemented.

32 | P a g e
8. Objective 2
AHT Logistic: Finish Goods Transfer from AY, Sanghera to Abhishek Home
Textile (AHT), Dhaula.

AHT’s Share in the total dispatch

AHT comprised of major share in the dispatch of finish goods as shown in the figure.

Category Wise Distribution

22.09
36.88
AHT
Domestic
41.04 Export

Figure 13: Segment Wise Dispatch Distribution (Source: SAP, Jan’10- May’ 10)

AHT constitute approximately 37% of the total dispatch happened in the last 5 months.

Scheduling Contract
Yarn has been dispatched from all four units, in Sanghera, to AHT Dhaula against the scheduling
contract. Scheduling contract is agreement to supply a particular amount of quantity of yarn
during the particular time period. Dispatch plan either weekly or daily been given to marketing
by the purchase department of AHT, Dhaula. PO has been raised against that dispatch plan and
budget is being linked to that PO and finally physical transfer of finish goods happen.

33 | P a g e
Mode of transfer
Physical finish goods have been transferred with the help of closed trolley and closed body
trucks. Finish goods has been packed in pallet and stretched film packing with the following
specification:

1. Pallet packing with 240 cones and 12 layers of cones.

2. Generally one pallet weigh around 604.8 kg (Net Weight) and 648 kg (Gross weight)
3. However, it varies for open end and double yarn.
One trolley as well as truck generally has carrying capacity of 6-6.5 ton and carries 10 pallets
per round.

Cost Incurred
Cost incurred per round is as follows:

1. Closed trolley: Rs.750 per round.

2. Closed Body Truck: Rs.1100 per round.
(Source: Annual Contract, ABIL with transporters)

Detailed Dispatch flow Chart

Vehicle

Call

Figure 14: Dispatch Flow Chart

34 | P a g e
SWOT- AHT

Strength
1. Group companies which lead to better negotiation level for improvements.
2. Smaller lead time.
3. Lower packing and transportation cost.
4. Almost constant level of dispatch thereby helps in smooth planning.
5. Easy availability of vehicles even possibility of JIT.
Weakness
1. Non availability of computer systems in FG stores leads to time consumed in checking
stocks somewhere and also non-availability of data in soft format for analysis.
2. High Waiting time at AY as well as AHT gate.
3. Unclear roles and responsibilities definition at AY, Sanghera.
4. Pallet packing crashes during the transportation.
5. Unsafe Unloading practices at AHT, Dhaula.
6. Infrastructure problem at AHT Dhaula like availability of hand trolley for unloading.
Unloading rap etc.
7. Wrong entry of reporting time which leads to wrong data available for analysis.
Opportunities
1. With increase in the business at AHT, demand for yarn will be increasing in the coming
2. years.
3. New trolleys can be added to the kitty thereby decreasing the transportation cost.
4. Negotiation can be done at better level which can lead to increased overall group’s
profit.
5. Decreasing the turnaround time can increase the no. of rounds per trolley per day
thereby reducing the transportation cost.

Threats
1. Transporter may not be interested in adding more trolleys due to high initial
investment.
2. Negotiation on various issues, if not done properly can lead to bitter relationship within
the group company which should be avoided as long as possible.
3. Involvement of both sides needed to resolve the issues.

35 | P a g e
Data Analysis
Following data was gathered from the SAP and analysis was done.

Vehicle Total Net Weight (in Total FG Transfer per round FG Transfer % of
Type Kg) Round (tonn) per day (tonn) total
Other 1315480.00 203.00 6.48 10.12 22.94
T1 926480.00 148.00 6.26 7.13 16.16
T2 905510.00 144.00 6.29 6.97 15.79
T3 878490.00 139.00 6.32 6.76 15.32
T4 837330.00 136.00 6.16 6.44 14.60
T5 870900.00 141.00 6.18 6.70 15.19
Grand
5734190.00 911.00 6.29 44.11 100.00
Total

Table 5: Dispatch Data to AHT, Dhaula. (Source: SAP, Jan’10-May’10)

T1, T2, T3, T4 & T5 represent the trolleys whereas others represent the all other vehicle except
trolleys

24.00
22.00
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Other T1 T2 T3 T4 T5

FG Transfer per round FG transfer as % of total FG transfer per day

Figure 15: Graphical Representation of Table 5

36 | P a g e
Interpretation:
1. Following conclusions can be drawn from the above data:
2. Dispatch per round is almost constant for all the vehicles i.e. 6-6.5 ton per round.
3. Daily dispatch is around 45 ton, which is close to the actually observation.
4. Number of rounds by trolleys per day is around 5-6 per day.
5. Almost two more rounds of trolley are required to save around Rs.700 per day.

Future Strategies
With the company’s vision of 15000 cr. By 2015 with 15% PAT, Total turnover of the AHT will
also be increases thereby increasing the requirement of yarn over the years. Thus finding the
cost effective solutions has become the need of the hour.

Thus in long term approach, this small changes can make a huge difference to the efficiency of
supply chain thereby leading to company’s high overall.

Recommendations:
 Add one more layer of cones to the existing pallet.
 Adding 1 more trolleys to the kitty.
 Getting bigger truck at lower cost.
 Decreasing Turn Around Time (TAT) at AY, Sanghera as well as at AHT, Dhaula.

37 | P a g e
Evaluations Of each recommendation

Option 1
Getting bigger truck at lower cost.
Negotiation has been done with some transporter to supply bigger truck with double capacity
as that of smaller truck but at higher overall cost of Rs.1800 per round.

Although total cost per round will be more but cost per kg of yarn will be much less.

Figure 16: Layout of closed truck considered for negotiation. Size: 32’ x 8’ x 8.5’

Benefit:
1. Material will be sent with much safety as compared to current scenario.
2. Cost saving of around Rs.400 per day or Rs.146000 per year is possible.

Constraints:
Negotiation has to be done with truck operator union to either provide trucks at Rs.1800 or to
go out of contract to hire truck from other transporters.

Option 2
Adding one more layer of cone:
Additional layer of cone can be added at the top of the pallet which means 13 layers instead of
12 layers thereby increasing the total number of cones to 260 cones from 240 cones per pallet.

Benefits:
1. It can increase the FG transportation by 5/6th pallet per round which means around 5
more pallets per day (Assuming 6 rounds per day)
2. It will save the packing cost for every 13th pallet.
3. Transportation cost saving will be Rs.175 per day or Rs.63875 per year.
4. Packing cost saving will be around Rs300 per 13 pallets or Rs.54228 per year.

38 | P a g e
 Constraints:
1. Negotiation has to be done with AHT, Dhaula as they were very reluctant to adding any
additional layer.
2. Packing machines’ capacity to pack at that height has to be confirmed.
3. This addition is possible in case of cones only as cheese doesn’t properly got locked in
the other cheese which is not the case in cone winding.

Option 3
Adding one more trolley
One more trolley can be added to the kitty thereby transporting total dispatch to AHT, Dhaula
thru’ trolley only.

Benefits
Cost Saving is the main benefit in this case as calculated below:

Total Initial investment: Rs.150000 (For new trolley)

Annual maintenance charges: Rs.10000

Assuming trolley life: 10 years

NPV (Discounted @10%): Rs.577373

Year 0 1 2 3 4 5 6 7 8 9 10
Inflow 0 127750 127750 127750 127750 127750 127750 127750 127750 127750 127750
Outflow 150000 10000 10000 10000 10000 10000 10000 10000 10000 10000
Net Flow -150000 117750 117750 117750 117750 117750 117750 117750 117750 117750 127750
Table 6: NPV Calculation for New Trolley

Constraints:
Due to high initial investment and longer payback period, transporter is not ready to invest in
trolleys.

39 | P a g e
Option 4

Decreasing the Turn Around Time (TAT)

1. Other option is to increase the number of rounds per trolley

2. This can be achieved by decreasing the total turnaround time of each round.

Decreasing TAT at AY, Sanghera

TAT consists of following times:

Time between:-

1. Check-in and 1st weigh: - 00:15:10 hr.

2. 1st and 2nd weigh. : - 01:05:27 hr.
nd
3. 2 weigh and billing. : - 00:27:54 hr.
4. Billing and check-out. : - 00:30:38 hr.
(Data Source: SAP, Jan’10-May’10)

Scope of Improvements
Scope of decreasing time is between:

1. 2nd weighment and Billing.

2. Billing and check-out.

Reasons for delay

Main reason observed for the time lag between above mentioned times are:

1. Unavailability of Test Report: Test report is generally sent after asking for the same
which delay the vehicle at the gate.
2. Distinguished Roles and Responsibility definition: Administration has all the roles after
the billing whereas SCM is accountable for the delay happened after the billing.
3. Unavailability of authorised signatory: Authorised signatory is not available and without
the signatures vehicle can’t move out of company’s premises.

40 | P a g e
Recommendations:
1. Dispatch plan has to be sent to the concerned deptt. in advance.
2. All test reports of the material has to ready before the loading completes.
3. Check can be implemented at packing stage only. Material should be shifted to FG
Godown only after the availability of test report.
4. TAT Demurrage should be responsibility of Administration department after billing.
5. A person should be always available at gate for signing the invoices as authorized
signatory.

Decreasing TAT at AHT, Dhaula.

TAT can be reduced at AHT, Dhaula by working on the following:-

1. Waiting time at main gate.

2. Waiting time at unloading ramp.
3. Condition of unloading ramp.

41 | P a g e
Study 1
Waiting time at main gate, AHT Dhaula

Observations:
Reporting time was not properly entered into the system which leads to wrong analysis of the
waiting time at Gate. Generally, reporting time was being put when all the documents got
cleared and Vehicle can move inside. In practise, it should be the time at which vehicle reports
at the gate.

Reasons for the delay

1. PO not Raised: PO for that particular order has not been raised which in practise, they
raise after seeing the billing due to the variability in the weight of yarn.
2. Wrong PO raised: PO raised but with wrong quantity which means PO needs to be
updated but it usually took long time.
3. Budget not Linked: This is the main area of concern. Budget, most of the time, remained
pending for the approval which takes time and caused the delay at the main gate.

Recommendation

1. PO has to be raised as soon as the duplicate copy of the invoice generates at the AHT,
Dhaula counter. After the billing, vehicle took around 45-50 min. to reach AHT’s main
gate. This provides the enough time for doing all the PO realated activities.
2. Budget has to be approved before placing the order and if approved, it has to be kept
separately and should not be consumed for any other purchase
3. Still if Consumed, then budget has to approved as the first work in the morning.

42 | P a g e
Study 2
Waiting Time at Unloading ramp.
Unloading is also one of the main time consuming activity at AHT, Dhaula. Thus it need to
studied carefully, observed and then recommendations should be made.

Reasons for Delay at Unloading ramp:

1. Waiting problem at gate got multiplied when all the trolleys got clearance at the same
time and proceed for the unloading.
2. Last trolley has to wait for 3 hr, considering 30min unloading time, as all trolleys has to
be unloaded.
3. Hand Trolley, used to unload pallets, are usually being borrowed from other
department which cause the delay in the unloading process
4. Already vehicles are standing at the unloading ramp.

Recommendations:
1. Priority should be given to the trolleys from AY, Sanghera.
2. All the hand trolleys should be in working conditions, which is not the scenario as per
the sources.
3. Solving gate’s problem can solve this problem automatically.

43 | P a g e
Study 3
Condition of Unloading ramp
Infrastructure is very important in the smooth functioning of any process. Same way, loading
ramp should be in good condition to unload the pallets easily and safely.

Conditions at AHT-2:

Figure 17: Unloading Ramp Condition at AHT 2

Problems at AHT-2 Unloading ramp

1. Base of the trolley is almost a feet above the base of loading ramp. A steel plate, with
wooden baton under its bottom, has been used to unload the pallets.
2. This practice makes it very unsafe for the unloading manpower.
3. This is the main hindrance to the addition of one more layer of cone at the top of the
pallet.

Recommendation
1. Reporting time should be entered correctly so that correct data should be available for
the analysis.
2. Reason for the delay should be entered into the SAP in the remark column to reach the
root cause.
3. Hydraulic unloading ramp should be installed to make the unloading process more
smooth, easy and safe.

44 | P a g e
9. Objective 3
Domestic Logistic other than AHT: Dispatch to domestic customers
other than AHT, Dhaula.

Category Wise Distribution

22.09
36.88 AHT

41.04 Domestic
Export

Figure 18: Category Wise Dispatch Distribution

As shown in the above figure, domestic dispatch constitutes the highest share amongst the all
other. Around 41% of the total dispatch has been done to domestic customers, other than AHT,
Dhaula.

Major Transporter
Main transporters used are:

1. Truck Operator Union, Barnala

2. J.S. Transport
3. BLR Transport
4. GOEL Transport
5. TATA 407 owner welfare society.

All the transporters signed a legal contract with ABIL for the services, they are supposed to
provide. The legal contract contains the freight to be charged for different destinations, Lead
time for each destinations, lead time for providing the vehicle, penalty to be charged under
different circumstances etc.

45 | P a g e
SWOT- Domestic Dispatch

Strength:
1. Well streamlined process.
2. Contract with various Transports.
3. Well structured logistics and distribution team having excellent knowledge and
management skills.
4. Finish goods storage facilities are well managed.
5. Excellent coordination within the loading team at various units to provide timely help
like manpower requirement etc.

Weakness:
1. Contracts lead to monopoly of some transports.
2. Lack of coordination between marketing and production thereby leads to unavailability
of FG for loading or availability in wrong packing.
3. Dissatisfaction amongst the loading manpower.
4. Difference of roles and responsibilities.
5. High time lag between 2nd weighment and gate out.

Opportunities
1. Other transporter’s share should be increases to decrease the exploitation during the
emergency timing.
2. Roles and responsibilities should be logically defined to make the working person
responsible for the things happened.
3. With increase in the company’s turnover, more options will be needed to cater this
segment which insists for having relation with different transporters.
4. TAT can be reduced which results in improved efficiency of the whole system.

Threats
1. Any issue with TOU can lead to problem in availability of vehicle for certain places.
2. Leading dissatisfaction can affect the whole process which is due to small-small issues
like variable pay etc.

46 | P a g e
Region Wise Dispatch

Region wise distribution

1.23

31.87 East

66.89 North
West

Figure 19: Region Wise Dispatch

Major chunk of the dispatch went to north and west region. These constitute around 99.5% of
the total dispatch.

Destination Wise Dispatch

3.72 AHMEDABAD
Destination Wise Distribution AMRITSAR
0.11 ANJAR
0.18 0.11 0.31 0.30 BANGAON
4.77
0.38 0.64 2.30 BHILWARA
0.11 1.38 DELHI
19.22
1.21 FARIDABAD
1.23 FATEHPUR
2.97 GHAZIABAD
GURGAON
ICHALKRANJI
37.82 6.12 LALRU
4.51 LUDHIANA
6.35 MACHIWARA
MUMBAI
MURADNAGAR
NAGPUR
1.07 NEEMRANA
2.48 PANIPAT
2.30 0.43 SAHARANPUR

Figure 20: Destination Wise Dispatch Distribution

As shown in the chart, major dispatch receiving destinations are:

Ahmedabad, Delhi, Faridabad, Fatehpur, Ludhiana, Panipat, Yavatmal

47 | P a g e
Destination Wise transporter
1600000
1400000
Area Of
1200000
Concern
1000000
800000 BLR
600000 GOEL
400000 JS
200000 TATA 407
0 TOU

PANIPAT
ANJAR

NAGPUR

SILVASA
SIRPUR
MUMBAI
AHMEDABAD

LALRU

NEEMRANA
DELHI
FARIDABAD

MACHIWARA
LUDHIANA
BHILWARA

ICHALKRANJI

MURADNAGAR
FATEHPUR
GHAZIABAD
GURGAON

SAHARANPUR

YAVATMAL
AMRITSAR

BANGAON

TARAPUR
Figure 21: Destination Wise Transporter Used

1. As clear from the chart, Truck Operator Union has monopoly for Ahmedabad logistics.
2. This can be a problem in the future so alternate source of transport has to be developed for
the same.

Transporter Wise Distribution

Transporter wise Logistics

BLR LOGISTIKS (I) LTD
4.30
1.99
GOEL ROADWAYS

37.31 J.S. TRANSPORT CO.

53.63
Tata 407 Owners
Welfare Society (Re
TRUCK OPERATOR
2.76 UNION

Figure 22: Transporter Wise Distribution

 Truck Operator Union and J.S. Tranport have the around 91% share (combined) of the
complete dispatch.
 Share of GOEL and BLR transport has to be increased to avoid the exploitation of
company, in case of any emergency.

48 | P a g e
Time Analysis

Time analysis is being done on the data available for the domestic data. Following conclusion
can be drawn from the chart shown below:

1. Time after the billing is very high and happened very frequently as median is almost
equals to average time lag at that point.
2. Loading time is also very high but this includes loading at various units, putting tarp on
it, waiting at weighing scale etc.

Mainly focus was on Non-Value added activities like waiting time after Billing, waiting time
before 1st weigh etc.
06:11:11

06:25:51
07:12:00

06:00:00
04:10:31

04:48:00
Average
02:23:58

02:18:52

02:12:56

03:36:00
Maximum
02:24:00 Minimum
00:29:30
00:24:41

00:24:35
00:17:01

00:15:42
00:14:52

00:14:19

Median
00:02:35

00:00:26

00:00:20

01:12:00

00:00:00
Check in & 1st 1st and 2nd weigh 2nd weigh and Billing and check out
weigh diff. diff. billing diff. time diff.

Figure 23: Time Analysis for Domestic Dispatch (Source SAP, Jan’10-May’10)

Recommendations to Decrease the TAT

1. Marketing should coordinate with production before giving the dispatch plan.
2. All the delivery orders should be available with dispatch plan.
3. TAT Demurrage should be responsibility of Administration department after billing.
4. A person should be always available at gate for signing the invoices as authorized
signatory.
Area of Concern
49 | P a g e
Area 1
Unavailability of 8 ton LP Trucks: LP trucks are very difficult to hire due to
below mentioned reasons.

Reason:
Due to obligation for Insurance that truck should not be older than 12 years. Most of the people
buy bigger trolla due to high profit margin in it. This leads to dearth of LP Truck in the market.

Recommendation:
1. 20’ container should be used instead of LP truck for the following destinations:-
Ambernath, Anjar, Daman, Ichalkranzi, Khapoli, Malegaon, Mumbai, Silvasa, Tarapur, and vapi.
For these destinations, freight per kg is less as compared to LP truck.
2. Marketing should try to get order near to capacity of trolla or Club the orders in the
same city or on the same route and state

Area 2
Monopoly of Truck Operator Union for Ahmadabad.
Reason
ABIL is in contract with Truck operator union that ABIL can request vehicle from other
transporter, only if it is not available with union.

Recommendation:
Alternate sources like BLR or GOEL transport has to be used for the same route thereby
eliminating the TOU’s monopoly and hence the future troubles.

50 | P a g e
Area 3
Synchronization problem:
Lack of synchronization between marketing and production like either material not ready or
material in wrong packing.

Reason:
1. DO raised against WIP.
2. DO raised for the right material but material available in wrong packing.

Recommendations:
1. Coordination amongst the marketing and production should be very impeccable regarding
the availability of FG at a point of time.
2. DO should be raised against the finished goods only
3. DO should be raised with proper packing specification.

Area 4
Manpower:
Manpower allocation is the main difficulty due to absenteeism and attrition.

51 | P a g e
Marketing Order Priority Matrix
Study was carried out on the contract done with various Transporter and analysis done for the
cost per kg for the various destinations and various quantities.

Following matrix came out as a result and it should be worked in coordination with SCM and
Marketing. For eg. For Ahmedabad, order should be of quantity of trolla and that trolla should
be hired from BLR only and so on.

Priority
I II III
Destination Vehicle Transport Vehicle Transport Vehicle Transport
AHMEDABAD Trolla BLR LP Any Trolla, Any
20'
AMBERNATH 40' BLR, Goel 20' BLR, Goel LP Any
AMRITSAR LP Any Trolla Any -- --
ANJAR 20', 40' BLR, Goel LP Any Trolla Any
BANGALORE Trolla Any -- -- -- --
BANSWARA LP Any Trolla Any -- --
BATHINDA LP Any Trolla Any -- --
BHILWARA LP Any Trolla Any -- --
BURHANPUR (MAH.) LP Any Trolla Any -- --
CALCUTTA LP Any Trolla Any -- --
CHANDIGARH LP Any Trolla Any -- --
COIMBATORE Trolla Any -- -- -- --
DAMAN 40', 20' BLR LP Any Trolla BLR
DELHI LP Any Trolla Any -- --
DERA BASSI LP Any Trolla Any -- --
DHAULA LP Any Trolla Any -- --
FARIDABAD LP Any Trolla Any -- --
FATEHPUR VIA KANPUR LP Any Trolla Any -- --
GAJROULA LP Any Trolla Any -- --
GHAZIABAD LP Any Trolla Any -- --
GILLPIND LP Any Trolla Any -- --
GURGAON LP Any Trolla Any -- --
HINGANGHAT (MAH.) LP Any Trolla Any -- --
HOSUR Trolla Any -- -- -- --
ICHALKRANJI 20', LP BLR, Any Trolla Any 40' Any
INDORE LP Any Trolla Any -- --
JAIPUR LP Any Trolla Any -- --
JAMMU LP Any Trolla Any -- --
KANPUR LP Any Trolla Any -- --
KARAD LP Any Trolla Any -- --

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KHAPOLI 40', 20' BLR LP Any Trolla Any
KHUSHKHERA LP Any Trolla Any -- --
KISHANGARH LP Any Trolla Any -- --
LALRU LP Any Trolla Any -- --
LUDHIANA LP Any Trolla Any -- --
MACHIWARA LP Any Trolla Any -- --
MALEGAON 20' BLR LP Any Trolla Any
MANDIDEEP LP Any Trolla Any -- --
MUMBAI 40', 20' BLR LP Any Trolla Any
MURADNAGAR Trolla Any LP Any -- --
MURADNAGAR VIA DELHI Trolla Any LP Any -- --
MYSORE LP Any Trolla Any -- --
NAGPUR LP Any Trolla Any -- --
NALAGARH LP Any Trolla Any -- --
NANGANGUD(KARNKT) Trolla Any -- -- -- --
NEEMRANA Trolla Any LP Any -- --
NOIDA Trolla Any LP Any -- --
PANIPAT Trolla Any LP Any -- --
SAHARANPUR(UP) Trolla Any LP Any -- --
SILVASA 40', 20' Goel, BLR LP Any Trolla Any
TARAPUR 40', 20' Goel, BLR LP Any Trolla Any
TIRPUR LP Any Trolla Any -- --
VAPI 40', 20' BLR LP Any Trolla Any
YAVATMAL LP Any Trolla Any -- --
BUNGAON Trolla Any -- -- -- --
DURAHA Trolla Any LP Any -- --
KHEKRA Trolla Any LP Any -- --
KHEKRA (VIA DELHI) Trolla Any LP Any -- --
SHANEWAL Trolla Any LP Any -- --
SIRPUR Trolla Any -- -- -- --
HYDERABAD Trolla Any -- -- -- --

Figure 24: Marketing Order Priority Matrix.

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10.Implementation Plans
Implementation is the future process which should be based on the recommendations and
should be planned in two parts:-

1. Short Term Solution Implementation.

2. Long Term Solution Implementation.

Short Term Implementation Plan:

Focus should be on implementing the solutions which can be done easily and also without
major changes and high CAPEX. So main area of focus over here should be:

1. Implementation of recommendation for test reports. It includes putting check on

availability of test report at packing stage only.
2. Defining roles and Responsibilities: Single department should have the role and
responsibility after the billing, which is not the case as per current scenario.
3. Negotiation should be done with AHT, Dhaula to improve the PO as well as Budget
approval process.
4. All the hand trolleys at AHT Unloading ramp should be serviced so that there should not
be any time lag between the arrival and unloading of the finish goods.
5. Priority should be given to AY trolleys to improve the overall efficiency.
6. No dispatch order against the WIP should be accepted and check should be made at DO
raising step only.

Long Term Implementation Plan:

Long term solutions are difficult to implement due to approval process required for CAPEX
approval and requires major changes. Initially all the recommendations have to be discussed at
top level and then correspondingly solutions have to implement.

1. Pilot project should be implemented for the complete cotton transfer.

2. For AHT, Based on the future goals of the company at Sanghera Plant, decision has to be
taken regarding the hiring new trolley, bigger trucks etc.
3. At AHT, Unloading Ramp should be improved which will help in addition of the one
more layer of the cones at the top and also will increase the safety.
4. More hand trolleys should be available so that unloading time should be decreased and
hence decreasing the TAT at AHT, Dhaula.
5. For other Domestic customers, Share of other transporter should be increased by
negotiating them for the complete range.

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6. Marketing should try to implement the Marketing Order Priority matrix and SCM should
request vehicle from the transporter as mentioned in the Table (Marketing Order
Priority Table) to decrease the transportation cost.
7. Last but not the least, manpower’s satisfaction level should be increased by making the
all processes clear to them regarding the wages, variable pay etc. and also paying them
at proper time and with proper quantity.

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11. References

Journal/Magazines

 Kotler, P., Keller, K.L., Koshy, A. & Jha, M., 2009. Marketing Management. London:
Pearson Education.
 B Mahadevan, 2002, Operation Management: Pearson Education
 Everette E. Adam Jr., Ronald J. Ebert, 2009. Production and Operations Management:
PHI Learning Private Limited, New Delhi.

Import data & competitive Analysis

 http://lcm.csa.iisc.ernet.in
 http://www.cio.com
 http://logistics.about.com
 http://en.wikipedia.org
 http://www.iitd.ac.in
 http://rockfordconsulting.com
 http://www.aquamcg.com

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