CHAPTER 1

INTRODUCTION
1.1 INTRODUCTION TO THE STUDY

Logistics is the process of planning, implementing, and controlling the efficient, cost
effective flow and storage of raw materials, in-process inventory, finished goods and related
information from point of origin to point of consumption for the purpose of meeting customer
requirements. India has become the prime destination for logistics service providers all over
the world. The demand for logistics services in India has been largely driven by the
remarkable growth of the economy.

Many large multinationals from the retail industry are planning to set up operation in India
and large local retailers are also planning to expand their operations. But with the
infrastructure largely under-developed and incapable of catering to a growing economy,
logistics management in India becomes too complex. India is emerging as one of the world’s
leading consumer market with the raise of middle income group.

The logistics industry is also hampered by low rates of technology adoption and poor skill
levels. On the technology front the industry now seems to be paying serious attention with
use of RFID, vehicle tracking technologies, warehouse management systems etc.
Also logistics industry is still not looked at as the industry of choice for young graduates
thereby making hiring of quality professional manpower challenging. On the ground level too
there are challenges. A recent study has found that a variety of skills are required in the
sector.

This project gives an overview of logistics industry in India. The poor condition of
infrastructure directly translates to higher turnover, pushing up the operating costs and
reducing efficiency. Logistics is a high-cost, low-margin business. The problem of organized
players is compounded by unfair competition with unorganized players. There is lack of trust
and awareness among Indian shippers with regard to outsourcing logistics. The future of the
logistics sector depends not only on the continued development of infrastructure but also on
the capability of the service providers in adapting themselves and making optimal utilization
of technology.

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These include technology skills, driving skills including safety procedures, industry
understanding and multi operations skills. The present state of affairs is illustrated by
example of truck driver in India, who is a critical point of contact for the logistics company
with its customers where the truck drivers today find it difficult to accurately record delivery
records, understand delivery documents, negotiate for return business, handle queries etc.

Logistics has huge impact on the domestic and capithan exports economy of any country. As
such, the role and importance of logistics has been elevated in many business environments.
India’s spend on logistics activities - equivalent to 13 percent of its GDP is higher than that of
the developed nations. The key reason for this is the relatively higher level of inefficiencies in
the system, with lower average trucking speeds, higher turnaround time at ports and high cost
of administrative delays being just a few of the examples.

Transportation is a key element in a logistics infrastructure. In India, about 40% of the

logistics cost is due to transportation alone. The major infrastructure required for moving
goods in India involve the active roles of roads, railways, ports and shipping, and airports all
of which are either managed or regulated by the government.

Logistics is about moving materials, information and funds from one business to another
business or from a business to the consumer. Logistics is an important part of the business
economic system and is a major capithan exports economic activity. It encompasses activities
like freight transportation, warehousing, material handling, protective packaging, inventory
control, order processing, marketing forecasting and customer service.

The present form of logistics industry in India is still in its infancy and is highly fragmented
There are thousands of logistics companies, ranging from the international giants to the
highly localized small players in the country. As the logistics industry in India is in nascent
stage, there are a lot of logistics issues to be improved.

Meaning of Material Handling

Defines “Material handling embraces the basic operations in connection with the
movement of bulk, packaged and individual products in a semi-solid or solid state by
means of gravity manually or power-actuated equipment and within the limits of individual
producing, fabricating, processing or service establishment”. Material handling does not add

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any value to the product but adds to the cost of the product and hence it will cost the
customer more. So the handling should be kept at minimum. Material handling in Indian
industries accounts for nearly 40% of the cost of production. Out of the total time spent for
manufacturing a product, 20% of the time is utilised for actual processing on them while the
remaining 80% of the time is spent in moving from one place to another, waiting for the
processing. Poor material handling may result in delays leading to idling of equipment.

Materials handling can be also defined as ‘the function dealing with the preparation, placing
and positioning of materials to facilitate their movement or storage’. Material handling is
the art and science involving the movement, handling and storage of materials during
different stages of manufacturing. Thus the function includes every consideration of the
product except the actual processing operation. In many cases, the handling is also included
as an integral part of the process. Through scientific material handling considerable reduction
in the cost as well as in the production cycle time can be achieved

Objectives of Material Handling

Following are the objectives of material handling:
 Minimise cost of material handling.
 Minimise delays and interruptions by making available the materials at the point of
use at right quantity and at right time.
 Increase the productive capacity of the production facilities by effective utilisation
of capacity and enhancing productivity.
 Safety in material handling through improvement in working condition.
 Maximum utilisation of material handling equipment.
 Prevention of damages to materials.
 Lower investment in process inventory

Principles of Material Handling

Following are the principles of material handling:
 Planning principle: All handling activities should be planned.
 Systems principle: Plan a system integrating as many handling activities as
possible and co-ordinating the full scope of operations (receiving, storage, production,
inspection, packing, warehousing, supply and transportation).
 Space utilisation principle: Make optimum use of cubic space.

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 Unit load principle: Increase quantity, size, weight of load handled.
 Gravity principle: Utilise gravity to move a material wherever practicable.
 Material flow principle: Plan an operation sequence and equipment arrangement
to optimise material flow.
 Simplification principle: Reduce combine or eliminate unnecessary movement
and/or equipment.
 Safety principle: Provide for safe handling methods and equipment.
 Mechanisation principle: Use mechanical or automated material handling
equipment.
 Standardisation principle: Standardise method, types, size of material handling
equipment.
 Flexibility principle: Use methods and equipment that can perform a variety of
task and applications.
 Equipment selection principle: Consider all aspect of material, move and method
to be utilised.
 Dead weight principle: Reduce the ratio of dead weight to pay load in mobile
equipment.
 Motion principle: Equipment designed to transport material should be kept in
motion.
 Idle time principle: Reduce idle time/unproductive time of both MH equipment
and man power.
 Maintenance principle: Plan for preventive maintenance or scheduled repair of all
handling equipment
 Obsolescence principle: Replace obsolete handling methods/equipment when
more efficient method/equipment will improve operation.
 Capacity principle: Use handling equipment to help achieve its full capacity.
 Control principle: Use material handling equipment to improve production
control, inventory control and other handling.
 Performance principle: Determine efficiency of handling performance in terms of
cost per unit handled which is the primary criterion.

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Selection of Material Handling
Selection of Material Handling equipment is an important decision as it affects both cost
and efficiency of handling system. The following factors are to be taken into account while
selecting material handling equipment.
 PROPERTIES OF THE MATERIAL
Whether it is solid, liquid or gas, and in what size, shape and weight it is to be
moved, are important considerations and can already lead to a preliminary
elimination from the range of available equipment under review. Similarly, if a
material is fragile, corrosive or toxic this will imply that certain handling methods
and containers will be preferable to others.
 LAYOUT AND CHARACTERISTICS OF THE BUILDING
Another restricting factor is the availability of space for handling. Low-level ceiling
may preclude the use of hoists or cranes, and the presence of supporting columns
in awkward places can limit the size of the material-handling equipment. If the
building is multi-storeyed, chutes or ramps for industrial trucks may be used. Layout
itself will indicate the type of production operation (continuous, intermittent, fixed
position or group) and can indicate some items of equipment that will be more
suitable than others. Floor capacity also helps in selecting the best material handling
equipment.
 PRODUCTION FLOW
If the flow is fairly constant between two fixed positions that are not likely to
change, fixed equipment such as conveyors or chutes can be successfully used. If,
on the other hand, the flow is not constant and the direction changes occasionally
from one point to another because several products are being produced
simultaneously, moving equipment such as trucks would be preferable.
 COST CONSIDERATIONS
This is one of the most important considerations. The above factors can help to
narrow the range of suitable equipment, while costing can help in taking a final
decision. Several cost elements need to be taken into consideration when
comparisons are made between various items of equipment that are all capable of
handling the same load. Initial investment and operating and maintenance costs are
the major cost to be considered. By calculating and comparing the total cost for each
of the items of equipment under consideration, a more rational decision can be
reached on the most appropriate choice.
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  NATURE OF OPERATIONS
Selection of equipment also depends on nature of operations like whether handling is
temporary or permanent, whether the flow is continuous or intermittent and material
flow pattern-vertical or horizontal.
 ENGINEERING FACTORS
Selection of equipment also depends on engineering factors like door and ceiling
dimensions, floor space, floor conditions and structural strength.
 EQUIPMENT RELIABILITY
Reliability of the equipment and supplier reputation and the after sale service also
plays an important role in selecting material handling equipments

Evalution of Material Handling System

The cost factors include investment cost, labour cost, and anticipated service hours per year,
utilization, and unit load carrying ability, loading and unloading characteristics, operating
costs and the size requirements are the factors for evolution of material handling equipment.
Other factors to be considered are source of power, conditions where the equipment has to
operate and such other technical aspects. Therefore, choices of equipments in organisation
will improve the material handling system through work study techniques. They usually
result in improving the ratio of operating time to loading time through palletizing, avoiding
duplicative movements, etc. Obsolete handling systems can be replaced with more
efficient equipments.

The effectiveness of the material handling system can be measured in terms of the ratio
of the time spent in the handling to the total time spent in production. This will cover the
time element. The cost effectiveness can be measured by the expenses incurred per unit
weight handled. It can be safely said that very few organisations try to collate the expenses
and time in this manner so as to objectively view the performance and to take remedial
measures. Some of the other indices which can be used for evaluating the performance of
handling systems are listed below:

Equipment Utilisation Ratio

Equipment utilisation ratio is an important indicator for judging the materials handling system.
This ratio can be computed and compared with similar firms or in the same over a period of
time.
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 In order to know the total effort needed for moving materials, it may be necessary to
compute Materials Handling Labour (MHL) ratio. This ratio is calculated as under:
Personnel assigned to materials handling
MHL =
Total operating work force
In order to ascertain whether is the handling system delivers materials work centres
with maximum efficiency, it is desirable to compute direct labour handling loss ratio. The
ratio is:
Materials handling time lost of labour
DLHL =
Total direct labour time
The movement’s operations ratio which is calculated after dividing total number of
moves by total number of productive operations indicates whether the workers are going
through too many motions because of poor routing.

It should, however, be emphasized that the efficiency of materials handling mainly

depends on the following factors:
(i) efficiency of handling methods employed for handling a unit weight through a
unit distance,
(ii) efficiency of the layout which determines the distance through which the
materials have to be handled,
(iii) (iii) utilisation of the handling facilities, and
(iv) (iv) efficiency of the speed of handling.

In conclusion, it can be said that an effective material handling system depends upon tailoring
the layout and equipments to suit specific requirements. When a large volume has to be
moved from a limited number of sources to a limited number of destinations the fixed path
equipments like rollers, belt conveyors, overhead conveyors and gauntry cranes are preferred.
For increased flexibility varied path equipments are preferred.

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1.2 NEED OF THE STUDY

The Indian logistics industry is played vital role in domestic and international market. The
study attempts to analyze and understand the freight handling scenario of transport sector in
India (Road, Railway, Seaports, Airports).The study works out the growth and services in
Indian logistics sectors for the period 2013-2017.

1.3 PERIOD OF THE STUDY

In this research study, the data collected from the respondents who are directly associated
with the problem have been analysed during the period from May 2017 to June 2017.

1.4 OBJECTIVES OF THE STUDY

1. To study the freight material handling scenario of transport sector in Capithan

Exports.
2. To study the logistics material Handling Management in .Capithan Exports
3. To study the outsourcing of procurement of materials
4. To overall distribution planning used to survive in the competitive market

1.5 LIMITATIONS OF THE STUDY

 The study has been conducted using secondary data.

 The study does not over the limitation of Logistics Industries
 Thus the study is limited to a glance of Indian logistics industry.

1.6 SCOPE OF THE STUDY

This project gives an overview of logistics industry in India. The poor condition of
infrastructure directly translates to higher turnover, pushing up the operating costs and
reducing efficiency. Logistics is a high-cost, low-margin business. The problem of organized
players is compounded by unfair competition with unorganized players. There is lack of trust
and awareness among Indian shippers with regard to outsourcing logistics. The future of the
logistics sector depends not only on the continued development of infrastructure but also on
the capability of the service providers in adapting themselves and making optimal utilization
of technology.

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1.7 INDUSTRY PROFILE

In years gone by, the traditional warehousing and logistics facility was located by railroad
tracks, a water port, and/or freeways, usually in the least desirable parts of cities or large
towns. The Indian logistics industry has come a long way from being a labour intensive
during 60’s to the present technology oriented system that provides wide range of logistics
services.

The concept of 3PL is a recent past culture in India. Traditionally, manufacturing companies
in India managed their own logistics requirements in-house. The country then gradually
evolved from the stage where the Indian organizations outsourced their labour requirement in
order to avoid labour related problems.

Subsequently, basic services such as transportation and warehousing were outsourced to

different service providers known as the (Second-Party Logistics) 2PL service providers.
With the increasing demand, the service providers started providing integrated services
together with other value added services, while the organizations focus on the core
competencies and streamline their supply chain.

In terms of infrastructure, road is the dominant mode of transport which accounts for 68% of
freight movement in India. Trucks are the most widely used mode of transportation in India.

The primary objective of logistics management is to effectively and efficiently move the
supply chain so as to extend the desired level of customer service at the least cost. Thus,
logistics management starts with ascertaining customers’ needs till their fulfilment through
product supplies. However, there are some definite objectives to be achieved through a
proper logistics system.

At present, around 1.5 million trucks operate on the Indian roads and the number of trucks
increases around 10% a year. Railways are considered a relatively cheaper mode of transport
and are used mainly for transporting bulk materials over long distances.

About 89% of its freight traffic is contributed by major commodities such as coal, fertilizers,
cement, petroleum products, food grain, finished steel, iron ore and raw material to steel
plants. The balance 11% is other commodities moving in bulk and containers.

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The World Bank, in a recent survey Connecting to Compete: Trade Logistics in the capithan
exports Economy, has developed a Logistics Performance Index (capithan exports) that can
serve as a benchmarking tool for measuring performance of businesses along a country’s
logistics supply chain.

The Bank study asserts that countries that are able to connect to the capithan exports logistics
web would not only have access to vast new markets but also remain a part of the capithan
exports trade growth. It also warns that those countries whose links with the capithan exports
logistics chain are weak are bound to face large and growing costs of exclusion from
international trade.

India trails behind China on important indices such as customs procedures, overall
infrastructure quality, international shipment, logistics competence and tracking of shipments,
but is ahead of the latter on the domestic logistics efficiency front. The Indian government
has focused on infrastructure development. Examples include the golden quadrilateral
project, east-west and north-south corridors (connecting four major metros), Free Trade and
Warehousing Zones (FTWZ) in line with Special Economic Zones (capithan exports) with
100% Foreign Direct Investment (FDI) limit and public-private partnerships (PPP) in
infrastructure development. It is expected that infrastructure development would boost
investments in the logistics sector.

In India, 100% FDI is allowed in logistics whereas in China, until recently, foreign
investment was not allowed in domestic logistics. Almost all large capithan exports logistics
companies have their presence in India, mainly involved in freight forwarding. For domestic
transportation and warehousing, they have tie-ups with Indian companies.

As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger
role, probably forming wholly-owned subsidiaries or taking the acquisition route.

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MODES OF TRANSPORTATION & WAREHOUSING:

ROAD:

The road freight industry in India is worth about INR 1.42 trillion and is growing at about 6-8
percent year on year Manpower spends amount to only about 4 percent of sales as against the
overall sector average of 8-10 percent. The industry has traditionally been extremely
fragmented - almost 75 percent of the trucking 'companies' are single truck operators and
almost 90 percent of trucking companies have a turnover of less than INR 10 million

A majority of players in this industry have been small entrepreneurs running family owned
businesses. Given their small scale and limited investment capability, most of their
investments have been focused on short term gains - direct and immediate impact on the top
line / bottom line of the business being the key decision criterion. While industry players
have been incapable of investing in manpower development, the government has also not
focused sufficiently on the same.

The result has been that in the current scenario, there exist gaps in core technical skills of the
existing set of personnel. For example, the backbone of the trucking industry truck drivers
lack knowledge of good driving practices and areas associated with driving like
understanding of VAT. Taking a level-wise view of the skill issues, it is seen that in the road
sector, skill issues are widespread across the board with the situation being most severe at the
operational level

Advantages:

 Road network of 3.3 million km is the second largest capithan exports

 60% of total freight movement is via roadways
 Roads offer wide reach and easy accessibility to even small markets

Disadvantages:

 High cost of transportation

 National Highways account for only 2% of the total network but carries 40% of total
freight

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Key Developments:

 National Highway Development Project to upgrade and modernise highways

 24,000 km of National Highways are to be upgraded to four/six lanes. Connectivity to
ports is also being improved

RAILWAY

Introduced in 1853, Indian Railways (IR) which is a government monopoly is the world's
second largest rail network spread over 81,500 km and covering around 7000 stations. Rail
freight traffic revenues stood at around 1038 Million tonnes in 2013 having grown at around
8 percent in the recent past with the growth in the last couple of years being around 10
percent.

Manpower spends amount to about 45 percent of revenues as against the overall sector
average of 8-10 percent. Also, non-salary expenditure comprises 36 percent of overall
manpower expenditure compared to the sector average of 13-14 percent.

India has high stakes in rail infrastructure and freight. Of all the freight moved through IR, it
is estimated that over 70% of them are produced or marketed by government-owned
agencies. The containerized freight movement by rail in India is provided by Container
Corporation of India Ltd (CONCOR). Incorporated in 1998 CONCOR provides multi-modal
logistics support for the country’s domestic trade and commerce, with 44 out of 51 of the
CONCOR terminals are linked by rail network.

Railways are considered a relatively cheaper mode of transport and are used mainly for
transporting bulk traffics over long distances. About 89% of its freight traffic is contributed
by major commodities such as coal, fertilizers, cement, petroleum products, food grain,
finished steel, iron ore and raw material to steel plants. The balance 11% is other
commodities moving in bulk and containers.

Advantages:

 Spread over 81,500 km, railways carries 25% of total freight movement
 Low transportation cost as compared to roads

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Disadvantages:

 Bulk commodities account for 90% of total freight revenues

 Inflexibility to reach deep interiors

SEAPORTS

India, with a vast coastline of 7,517 kms handles 95% of India’s foreign trade through its
seaports. It has 12 major ports (Figure 2.2) and 184 other (minor and intermediate) ports.
Among the minor ports are located in Gujarat, Maharashtra, Goa, Karnataka, Daman & Dui,
Karnataka, Kerala, Lakshadweep, and Andra Pradesh.

The major ports are governed by the Major Port Trust under the control of Central
Government, while the minor ports are under the jurisdiction of their respective state
governments. The main commodities handled at major ports in India are petroleum products,
coal, iron, ore, containerized cargo, fertilizer and raw material. Over 75% of the container
throughput in India of 2.88 million TEUs is handled by the JNPT, Madras and Bombay ports.

The growth in shipping has been even higher than that of the railways driven by strong
growth in foreign trade both in bulk and containerized cargo. Manpower spends amount to
about 8-10 percent; non-salary expenditure varies greatly between companies ranging from 3-
20 percent of overall man power expenditure.

The nature of liner shipping services to and from India has undergone a sea change in the last
few years as a result of the growth in break-bulk and conventional cargoes. With the nature of
goods being shipped changing, the potential and opportunities for container transport and
logistics companies are enormous. Over the past few years the size and the number of vessels
that are being deployed by India has increased.

Thus, in the core shipping industry, while the manpower situation in terms of quality fares
much better than the other segments of logistics, the issue here is that of quantity with an
increasing number of qualified people being attracted towards working on foreign vessels as
they offer better salaries and perks.

However, if one were to look at the ports side, there is an increasing lack of trained
manpower for pilotage functions and equipment operators

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Advantages:

 Cheapest mode of transportation

Disadvantages:

 Poor state of inland waterways in the country

 High turnover time

Key Developments:

 Cargo handling capacity of ports to be increased from 600 million tonnes in 2007 to
1500 million tonnes by 2015

AIR:

Airports in India are managed by Airport Authority of India (AAI), under the central
government. The country has six international airports- Delhi, Bombay, Calcutta, Madras,
Trivandrum and the newly upgraded Bangalore airport.

The air cargo carried by airways usually constitutes high value goods such as computers,
microprocessors, electronics and optical equipment, precision instruments and perishable
foodstuffs. The air cargo service was also the first to be liberalized. The increased
participation of private operators, air express and other cargo movers, and the need for
efficient and timely delivery of door-to-door cargo have further fuelled the aviation sector in
India.

Delhi and Bombay are the two main airports in India and each is well connected with the rest
of the country in a regional hub. With the increasing movement of goods through air, there is
a continued need for the upgrading and modernization of air traffic services in India.
Currently, the quality of Indian airport is rated 40th among 59 countries.

Existing domestic airports requires critical infrastructure improvements, namely in the areas
such as air traffic control, communication, navigation, ground handling and air terminal. It is
also estimated that the present infrastructure can support the rise of only 10% growth in
cargo, indicating a possible saturation of Indian airports.

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In order to improve current situation, airports need to be upgraded to the level of world-class
international airports, with state-of-the-art air traffic control systems to increase the runway
capacity, and to minimize interruptions to air traffic during bad weather.

Advantages:

 Fastest mode of transportation

Disadvantages:

 Low freight movement

 87% of total freight traffic being handled by airports in metro cities

Key Developments:

 Modernisation of 37 operational airports and development of new airports will

increase air cargo handling capacity

WAREHOUSE:

The warehousing segment consists of storage warehousing related to distribution whether

inbound or outbound trans shipment warehouses or 'terminals' used for bulking / de-bulking,
stuffing / de-stuffing cross docking and temporary storage (including CFS and ICD)

The warehousing segment is perhaps where the greatest growth potential exists. Like road
transportation, this segment has traditionally been extremely fragmented, small scale and
scattered geographically. A key reason for this has been India's indirect tax structure, with tax
paid on cross border (state border) sales not being fully set off against local tax liabilities.

As a result, most players resorted to setting up small warehouses across different states,
rather than large, centralized set-ups. This has led to the prevalence of small scale,
fragmented warehouses, with corresponding inefficiencies.

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LOGISTICS COMPANIES OF INDIA

TNT Express:

This company is a key leader in the international market in the sector of CAPITHAN
EXPORTS express services. The company ensures safe and on time delivery of your
documents, freight and parcels. The company offers time and day definite delivery in about
200 nations across the world. It operates 47 jet freighter aircraft and 26,000 road vehicles and
has a network of 2,300 companies.

AFL:

One among the acknowledged leaders among the logistics companies in India is AFL.
Through its domain of logistics services, the company has delivered world class service in
India. In 1979, the company introduced the first ever courier service by forming an alliance
with DHL World Wide Express. The company offers services like Logistics and
warehousing, Courier Company and Custom Consultant.

DHL:

This company is one among the major logistics companies in India. It is a market leader
CAPITHAN EXPORTSly in overland transport, air freight and international express. The
company ranks No.1 in the world in contract logistics and ocean freight. The biggest logistics
and express network in the world has a network in about 220 territories and countries, 72,000
vehicles, 350 Aircrafts, 36 hubs and 4,700 bases.

Blue Dart:

This logistics company is South Asia's top integrated express package Distribution and
Courier Company. The domestic network of the company covers about 21,340 locations and
provides service to 220 countries by the company's sales alliance with DHL. It provides the
best service like Free Pick up from your location, Regulatory Clearances, Real Time
Tracking, Free Computerized Proof of Delivery etc.

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Gati:

The company is a key leader in the arena of express cargo delivery and a significant one in
the supply chain management solutions and distribution in India since the year 1989.The
company provides services like the Ware Housing, Express Cargo etc. Logistics Solutions of
the company are Warehousing, Supply chain Management. The Distribution Solutions of the
company are Gati Surface Express, Gati coast to coast and Gati Air Express etc.

Safexpress:

It is one of the largest express companies in India. The company offers the best and
integrated logistics solutions. In 2002 the Limca Book of Records declared the company as
the Largest Logistics service Provider in India. The company has a network over 550
locations in 28 states and 7 countries. It has 3000 weather proof ISO-9002 vehicles.

Ashok Leyland:

The leading provider of logistic vehicles for the India Army is this company. It is a key leader
in the tractor-tailers and multi axle trucks. The company manufactures buses, trucks, engines
and special application vehicles in India. It is promoting a new company called Ashley
Transport Services Ltd. for exchange of information and integrated services related to
logistics in order to tackle the business of freight contractors.

Agarwal Packers and Movers:

This popular Indian logistics company provides logistic services like the home shifting, car
packing etc. across India. The company believes in keeping technology and people and of
course heart and soul in the movement of the individuals respective items. The company
offers quality service in transportation and packing.

DTDC:

The biggest Domestic Delivery Network Company is DTDC. The company offers high class
delivery service in about 3700 Indian locations and 240 international places. The company
dispatches about 10 million parcels in a month. It also offers low cost for bigger parcels to
US, UK, India, Nepal, Dubai and other places across the world.

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First Flight:

This logistics company in India specializes in courier services worldwide. The multi-tracking
programs of the company are Domestic, International, First Wheels, First Wings and many
others. The overseas offices of the company are in Malaysia, Singapore, UK, US, UAE,
Qatar, Oman.

Many large Indian corporate such as Tata and Reliance Industries have been attracted by the
potential of this sector and have established logistics divisions. They started providing in-
house logistics services, and soon sensing the growth of the market, have started providing
services to other corporate as well. Since logistics service can be provided without assets,
there is growing interest among entrepreneurs to venture into this business.

The Indian economy is growing for the last couple of years which implies more outputs and
more demand for specialized logistics services.

1.8 COMPANY PROFILE

Capithan is a globally renowned company, having more than three decades of experience in
supplying the finest Indian seafood worldwide. Under the able leadership of Mr. Alphonse
Joseph, Managing Director, what initially began as a small freezing plant in the state of
Kerala, India, has today transformed into one of India’s largest and most modernized seafood
companies. It has a wide array of products and caters to almost all the major palettes of the
world.

Capithan was established in 1974. It was one among the eight seafood-processing plants that
were initially granted approval for export to the EU after the successful implementation of
HACCP. Today the group has two EU approved seafood-processing plants – Capithan
Exporting Company and Veronica Marine Exports Pvt. Ltd.

The company attributes its success to a number of external and internal factors.
External Factors
The topographical advantages of having easy access to both the Indian Ocean and the
Arabian Sea.
Access to a diverse and plentiful reserve of marine products and some exotic species

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which are found nowhere else in
the world.
The company is strategically located near two of the biggest landing centers in India,
namely - Sakthikulangara &
Neendakara harbor.
The company is having easy access to both the Cochin and Tuticorin ports.
The company has access to a huge manpower pool skilled in the marine field.

Internal Factors
State-of-the-art processing units.
Own fleet of refrigerated and insulated vehicles.
Fully equipped in-house laboratories.
Experienced quality control personnel who strictly monitor and ensure quality standards.
Skilled managerial talent who have added professionalism to the company’s operations.
Time tested processes and techniques in purchase, production and marketing.

Products

Our catch of seafood products are the finest in the world. Being the front runner in the
country we provide a wide range of products namely shrimps, lobsters, crabs, cuttlefishes,
shell fishes, squids & octopus. Capithan ensures that its customers get the opportunity to treat
themselves to a wide array of seafood. We have the following products on our side.

Select a category from the above given choices to view our product details.

Our Products

Cephalopods Cuttle Fish, Squid, Octopus

Fin fishes Reef cod, Emperor, White Snapper, Ribbon Fish, Pomfrets

Crustaceans Shrimps, Crabs, Lobsters

19
 Shell Fishes Baigai, Clams

Squid Rings, Squid Tentacles, Cut Octopus, Cuttle Fish Strips, Shrimps
Cooked/Blanched
– PUD, PDT/On

Brand
Our brand ‘Captain’ is a testament of our commitment to procure, process and distribute
quality seafood worldwide. Today at Capithan we enjoy a high level of market penetration
and Brand recall because we constantly strive towards ensuring complete customer
satisfaction. Our continuous efforts to provide the finest products has earned us the befitting
tag -“The Captain of Indian Sea Food”

Facilities
The company makes continuous effort to not only process quality seafood products but also
to deliver these goods within the specified time bounds. This objective has been the driving
force behind various technical and infrastructural initiatives of the company. The company
has a fleet of refrigerated and well insulated trucks which protect and guarantee freshness and
quality till it reaches the consumer.

Veronica Marine Exports Pvt.

Facility Capithan Exporting Co.
Ltd.

Integrated Pre-processing
Capacity of 40 MT per day Capacity of 45 MT per day
Center

Integrated Flake Ice Machine Capacity of 15 MT per day Capacity of 15 MT per day

Ice Block Factory Capacity of 40 MT per day Capacity of 50 MT per day

Chilled storage Capacity of 2 MT each Capacity of 2 MT each

Depurations A total capacity of 30 MT per day for both units together

20
 Veronica Marine Exports Pvt.
Freezing Facilities Capithan Exporting Co.
Ltd.

Plate Freezers 2 Nos. – 20 MT/day 3 Nos. – 27 MT/day

Blast Freezers 3 Nos. – 25 MT/day 3 Nos. – 27 MT/day

Cooking & Freezing Machine 1 No. - 400 Kg/Hour -

Veronica Marine Exports Pvt.

Cold Storage Capithan Exporting Co.
Ltd.

Cold store 1000 MT 800 MT

Quality
Capithan is proud to state that it is one among the eight seafood processing plants which were
initially given approvals for export to the EU after the successful implementation of HACCP.
The Group has, over the years perfected processes and techniques in purchase, processing
and distribution which preserve and augment the quality of the product. To achieve this goal,
Capithan has invested heavily in both infrastructure and human capital.
Capithan has two state of the art in-house laboratories and experienced quality assurance
personnel who keep vigil from the point of procurement to the final product. Efficacy of ‘in-
process controls’ are validated by micro biological tests on a regular basis.

"At Capithan quality is not just a catch word but a commitment to our customers,
a commitment steeped in trust, because we believe that in Quality there is trust."

21
 CHAPTER II

2.1. REVIEW OF LITERATURE

A literature review[1] is a body of text that determines the aims to review the critical points
of current knowledge including substantive findings as well as theoretical and
methodological contributions to a particular topic. The review of relevant literature is
nearly always a standard chapter of a thesis or dissertation. The review forms an important
chapter in a thesis where its purpose is to provide the background to and justification for
the research undertaken

Bruce (2017)[2], who has published widely on the topic of the literature review, has
identified six elements of a literature review. These elements comprise a list; a search; a
survey; a vehicle for learning; a research facilitator; and a report.

According to Cooper (2017) [3] ‘a literature review uses as its database reports of primary or
original scholarship, and does not report new primary scholarship itself. The primary reports
used in the literature may be verbal, but in the vast majority of cases reports are written
documents. The types of scholarship may be empirical, theoretical, critical/analytic, or
methodological in nature. Second, a literature review. seeks to describe, summarize, evaluate,
clarify and/or integrate the content of primary reports

Stoke (2016) [4] stores management the basic responsibilities of stores are to act as
custodian and controlling agent for parts, supplies, and materials, and to provide service to
users to those goods. Typically and at times essentially, a store has to follow certain
activities that are managed through use of various resources and are thus called stores
management. The objective is to efficiently and economically provide the right materials at
the time when it is required and in the condition in which it is required.

Study by Edwanjala (2015) [5] implies that there is some conflict between the need for
efficient and effective services and the need to economize in stockholdings. On one hand, the
more stock held, the easier it is to have items available on demand. On the other hand, larger
the stock held, greater the cost, though of course ordering very frequently in order that

22
holding cost may be kept low can itself lead to high cost. It is, therefore, necessary to seek,
find and operate a satisfactory compromise between the various opposing costs, i.e.
optimizing stock holding in such a way that both operating and financial objectives are
attained. At no point of the time, work should suffer for want of critically required materials
and at the same time unnecessary funds (working capital) are not blocked in stocks,
especially inactive/slow moving items. In addition, the stores department itself should be
economically operated with other functions to achieve saving in material and other costs
wherever practical. Cost of transportation shall be lowest possible by selecting right mode of
transportation and an effective carrier for the given materials.

Namukasa(2014)[6] observed that as companies continue to strive at achieving their

objectives, management is required to focus more on the area of operations management. One
main reason for failure to achieve/realize company objectives (especially the financial) is
unfavorable cost structures, which compromise on performance (e.g. profitability) levels.
With the increasing need for effective operations management, Business organizations now
requires that costs and cost centres be well managed and controlled. Consequently stores, as
cost centres must be well managed. In practice, firms spend an inordinate amount of
resources i.e. time and money managing and directing their suppliers to ensure that critical
inventory/stock control levels are maintained and the vital flow of products needs for
operation continue. In contemporary business operating environments, significant
developments have emerged in stores and inventory management aspect. Stores and
inventory management is now appreciated as a value adding activity able to make a
contribution to the profitability performance of an organization if managed in a more
effective and efficient manner. Therefore, companies must find ways for ensuring such
effectiveness and efficiency. The use of advanced technology demands that companies go for
automation

According to S. Roychowdhury(2014) [7], every manufacturing and commercial enterprise

has as part of its operations, the need of store materials and products for customer,
maintenance and repair parts for production plants, or office supplies for the administration
and operation of the firm. The Inventory and Stores Manager thus plays an important part
in satisfying the needs of the customers of any enterprise. Adequate stocks of material must

23
be kept, proper control over the locations of goods must be maintained, and as customers
order their goods from the warehouse, the store must have a good selection and adequate
shipping procedures. The Inventory and Stores Manager performs managerial tasks and in
addition he/she is normally responsible for tasks such as, deciding an optimum layout for
stores; keeping a record of incoming items and notifying the purchasing department of
items that need to be reordered. The Stores Manager may also control internal transport,
undertake quality control inspection of incoming goods, arrange for the sale of obsolete,
used or damaged goods and negotiate with employee representatives.

Christos Genekos(2014) [8] and others has pointed out, “there is a vast literature on the
theory and measurement of management practices. There is a wide spread of opinions over
the definition, scope, and impact of different practices and even a debate whether the ‘best
practices’ exist or whether every management practice is contingent.” The researcher is
attempting to study various practices in stores management in electronic goods
manufacturing companies.

Salawati Sahari, Michael Tinggi and Norlina Kadri(2014)[9] empirically examines the
relationship between inventory management and firm performance and capital intensity on
a sample of financial data for 82 construction firms in Malaysia for the period 2006–2010.
By employing regression and correlation techniques, it was found that inventory
management is positively correlated with firm performance. In addition, the results indicate
that there is a positive relationship between inventory management and capital intensity.
The study of inventory management certainly implies the operational issues involved in
store management. The nature of products may differ from organization to organization,
but the function of store remains same. The contribution of stores efforts thus can leave
strong impacts on the inventory management.

Shahadat Khan and Robert Mark Bosgraaf(2013) [10] addresses two inventory management
systems that are evident in the high technology industry being inventory postponement and
inventory speculation. Moreover the paper investigates a high technology organization with
respect to inventory management decisions, and identifies factors that lead the high
technology organization to adopt inventory postponement over inventory speculation. This

24
paper examines the relative importance of the inventory management decisions made by the
high technology organization, and the implications these decisions have on the third party
logistics provider and the impact this has on the consumer.

A. L. Adeyemi and A. O. Salami(2013) [11] suggests that the materials management unit
should pay attention to sales growth over the years and thus take into consideration, the
apparent relevance of sales and production cost in making decision with regards to inventory.

Jaroslav Kral(2013) [12] titled ‘review on the Harris’s Economic Order Quantity (EOQ)
model in inventory management’ reviews the oldest inventory model introduced by F. W.
Harris. Harris´s formula, computing EOQ and discussed here, is usually a part of decision
support systems or advanced planning modules of an enterprise resource planning.
Inventory plays a key role in the logistics behavior of manufacturing systems, but
inventory modeling is a very poor field of enterprise practices.

Dimitrios P. Koumanakos(2012)[13] investigated the results with the help of cross-

section linear regression, that the higher the level of inventories preserved (departing
from lean operations) by a firm, the lower its rate of returns. Moreover this study sheds
more light to the issue by employing more sophisticated statistical tests applied to a
large and recent sample of Greek manufacturers across different industries. Even if the
paper does not directly deal with the stores management, it implies that the higher level
of inventories preserved could be putting the firm into additional costs. Store
performance can help in reducing the cost so incurred by its efficient and vigilant acts.

Scott Grant Eckert(2012)[14] examines inventory management and the role it plays in
improving customer satisfaction. It looks at how companies have been under pressure to
streamline their inventory systems, and the consequences of such actions. It also examines
how many organizations are trying to implement a “perfect order” system and how
suppliers are constantly under pressure to meet the demands. Many companies are,
therefore, looking at various inventory management systems as they belief this will have a
positive effect on the satisfaction of their customers.

25
Geoff Relph, Witek Brzeski and Gail Bradbear(2012) [15] tilted ‘the first steps to inventory
management’ reveals that good inventory management is essential to achieving business
objectives and building competitive advantage. Yet the traditional techniques most often
used to manage inventory do not always provide optimal solutions. Driven by a greater
emphasis on customer service and cost control and the advent of new technologies,
inventory management is rapidly moving to a higher level of sophistication. The research
paper thus emphasizes on the new technologies which prove to be beneficial in managing
inventory and hence is also applicable in case of managing the stores.

Gerald O. Ondlek(2011)[16] analyzed the attention and recognition the Kenyan

manufacturing firms are giving to the materials management. The motivation of the study
was based on the fact that long-term success and survival of any Organization depends
entirely on how well organization are managing their costs. The conclusion drawn from the
research was that Kenyan firms were not practicing professionalism in materials
management and that materials management was more suited for large firms.

M. Caridi and R. Cigolini(2011)[17] provides a literature review in the field of uncertainty

dampening methods for manufacturing systems, and proposes a new model to improve
materials management effectiveness in materials requirements planning environments. The
literature review gives rise to a classification framework of the models along nine
structural dimensions that refer to the safety buffer treatment, the environmental
characteristics and the type of approach.

Benni ‘materials management(2010) [17]’ reveals that efficient materials management

not only keeps the business running smoothly but also helps companies maintain
improved relationships with the members of their supply chains, cut down on their costs,
and satisfy the demands of their customers. All of which have become increasingly
important because of the competitive market most organizations are faced with today.
These benefits are not optional; they have become mandatory for companies that have
been successful in their fields.

Jyothic(2009)[18] labeled as ‘materials management’ stated that materials management

helps in reduction of materials cost, preventing a large amount of capital being locked up
26
for a longer period and improving the capital turnover ratio. Materials management today
is a distinct area of industrial management and plays a vital role in production and
productivity. This concept aims at cost reduction, as a result of integrated approach
towards the management of materials at all stages viz., planning, purchasing, receiving,
stocking and disposal. Materials management is concerned with the planning and
programming of materials and equipments, market research for purchase, pre-design value
analysis, procurement of all materials including capital goods, raw materials, components
and assemblies, finished material, packaging and packing of material, inventory control
etc.

Materials Management(2008) [19] has always been an area of scrutiny for organizations.
This has become a central focal point as trends from the supply chain arena have indicated
that substantial operating cash can be freed with leaner and more efficient handling of
inventory. It’s clear that top management and materials management personnel focus their
attention sharply on material costs and there is no doubt that reliable long term supply of
materials is an increasingly important material.

G. Anand, Rambabu Kodali and B. Santosh Kumar(2018) [20] stated in the research paper
titled ‘development of analytic network process for the selection of material handling
systems in the design of flexible manufacturing systems (FMS)’ that conveyor is a better
alternative for the FMS under the given case situation. Furthermore, this study also
revealed the computational complexity of the Analytic Network Process (ANP), though it
is successful implementation of dependency/relationships between the factors within the
decision-making process.

27
 CHAPTER III

RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

A research design is an arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure. It
is the conceptual structure within which research is conducted and it constitutes the blue print
for the collection, measurement and analysis of data. The research design may be specific
representation of the various steps in the process of research. Descriptive design was taken
for the study focuses on phenomena, group and situation.

3.2 SAMPLING
A Finite subset of population selected from it with the objective of investigating its properties
called sample. A sample is a representative part of the population. A sample of 80
respondents in total has been randomly selected, the response to various element under each
questions were totalled for the purpose of various statistical testing.

3.3 SOURCE OF DATA

Primary data
Primary data are the first hand information collected by the research for immediate
purpose of the study. For the present study structured questionnaire and personnel interview
was used to response from the respondents because of simplicity and reliability

Secondary data
Secondary data was collected from company, library, company records, magazines, internet
etc.A secondary questionnaire was used to elicit the primary data. The questionnaire contains
closed ended questions with two points, four points and five points technique.
 Journals and magazines
 Websites
 Reports

3.4 SAMPLE SIZE

Representative sample of total 44 respondents were drawn for the study.
28
3.5 TOOLS OF DATA COLLECTION
 Questionnaire
 Interview
 Observation

3.6 PLAN OF ANALYSIS

The following tools were applied for analysing the data collected from for the purpose of the
study
 Tabulation of data
 Interpretation of data
 Graphical representation of data through bar diagram, pie charts
 percentage

3.7 TOOLS OF ANALYSIS

 Simple Percentage Method

Simple Percentage Analysis

The data collected from the respondents were converted into readable format for process,
classification arguments. The data was tabulated and analyzed using statistical method of
simple percentage.
No. of Respondents
Percentage = x 100
Sample Size

Bar Chart
A bar chart or bar graph is a chart or graph that presents categorical data with rectangular
bars with heights or lengths proportional to the values that they represent. The bars can be
plotted vertically or horizontally. A vertical bar chart is sometimes called a line graph.

Line chart
It is similar to a scatter plot except that the measurement points are ordered (typically by their
x-axis value) and joined with straight line segments. A line chart is often used to visualize a
trend in data over intervals of time – a time series – thus the line is often drawn
chronologically

29
 CHAPTER IV
DATA ANALYSIS & INTERPRETATION

TABLE NO:1

INITIAL INVESTMENT OF THE RESPONDENTS

Particulars Frequency Percentage

0-10 lakhs 11 25
10-30 lakhs 10 23
30 lakhs & above 23 52
Total 44 100

30
 CHART NO:1

INITIAL INVESTMENT OF THE RESPONDENTS

60

50
52

40

30

20 25
23

10

0
0-10 lakhs 10-30 lakhs 30 lakhs & above

INTERPRETATION
It is observed that 52% of the firm’s investment is more than 30 lakhs, 23% firm’s investment
is between 10 & 30 lakhs and 25% firm’s investment is not more than 10 lakhs.

31
 TABLE NO:2

NUMBER OF EMPLOYEES OF THE RESPONDENTS

Particulars Frequency Percentage

0-20 31 71
20-40 8 18
40 & above 5 11
Total 44 100

32
 CHART NO:2

NUMBER OF EMPLOYEES OF THE RESPONDENTS

80

70
71
60

50

40

30

20
18
10
11
0
0-20 20-40 40 & above

INTERPRETATION
It is observed that 71% of firms under study have manpower less than 20, 18% have
manpower between 20 to 40 workers and 11% firms have their manpower more than 40
which indicate that the majority of the firms requires less manpower. The functioning of the
business is relatively less complex.

33
 TABLE NO:3

NUMBER OF WORKING SHIFTS OF THE RESPONDENTS

Particulars Frequency Percentage

Ist shift 33 75
Ist & IInd shift 10 23
Ist, IInd & IIIrd shift 1 2
Total 44 100

34
 CHART NO:3

NUMBER OF WORKING SHIFTS OF THE RESPONDENTS

80
75
70

60

50

40

30
23
20

10

0 2
Ist shift Ist & IInd shift Ist, IInd & IIIrd shift

INTERPRETATION
From the data it is observed that 75% of the firms run only Ist shift, 23% firms run Ist & IInd
shift whereas only 2% of the firms run all the three shifts. Small scale manufacturing units
are engaged mostly in job work which is part of intermittent production process and where
they are not required to run all the three shifts.

35
 TABLE NO:4

ANNUAL TURNOVER

Particulars Frequency Percentage

0-10 lakhs 3 7
10-30 lakhs 13 29
30 lakhs & above 28 64
Total 44 100

36
 CHART NO:4

ANNUAL TURNOVER

70

60 64

50

40

30
29
20

10
7
0
0-10 lakhs 10-30 lakhs 30 lakhs & above

INTERPRETATION
64% of the respondent units have turnover between 30 lakhs and above, 29% of the
respondent units have turnover between 10 and 30 lakhs whereas only 7% of the units
understudy have turnover between 0 to 10 lakhs.

37
 TABLE NO:5

PRODUCT CATEGORY

Particulars Frequency Percentage

Engineering 11 25
Manufacturing 7 16
Maintenance/Packaging 6 14
Agri Products 4 9
Casting/Fabrication 12 27
Chemical 4 9
Total 44 100

38
 CHART NO:5

PRODUCT CATEGORY

30
27
25 25
20
15 16
14
10 9 9
5
0

INTERPRETATION
27% of the total sample constitutes Casting/Fabrication units, 25% of the sample constitutes
Engineering units, percentage of other manufacturing units is 16, percentage of
Maintenance/Packaging units is 14, Agri Product units is 9% and Chemical units are 9%.

39
 TABLE NO:6

BUSINESS OBJECTIVES

Particulars Frequency Percentage

Maximise customer 2 4
satisfaction
Maximise profit 36 82
Increase return on investment 3 7
Increase turnover (sales) 3 7
Total 44 100

40
 CHART NO:6

BUSINESS OBJECTIVES

90
80
82
70
60
50
40
30
20
10
4 7 7
0
Maximise customer Maximise profit Increase return on Increase turnover
satisfaction investment (sales)

INTERPRETATION
82% small scale manufacturing units under study indicates that profit maximization is the
business objective, 7% indicates objective is to increase return on investment, 7% units have
objective as increase in turn over (sales) and rest 4% has objective of maximize customer
satisfaction.

41
 TABLE NO: 7
PARTICIPATION BY MANAGEMENT LEVEL

Particulars Frequency Percentage

Director 37 84
General Manager 4 7
Senior Manager 3 9
Manager 0 0
Total 44 100

42
 CHART NO: 7
PARTICIPATION BY MANAGEMENT LEVEL

90
84
80

70

60

50

40

30

20

10 9
7
0 0
Director General Manager Senior Manager Manager

INTERPRETATION
84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior
Managers and 7% were General Managers.

43
 TABLE NO: 8
WHERE IS YOUR RAW MATERIAL STORES SITUATED?

Particulars Frequency Percentage

Director 37 84
General Manager 4 7
Senior Manager 3 9
Manager 0 0
Total 44 100

44
 CHART NO: 8
WHERE IS YOUR RAW MATERIAL STORES SITUATED?

90

80 84
70

60

50

40

30

20

10
7 9 0
0
Director General Manager Senior Manager Manager

INTERPRETATION
84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior
Managers and 7% were General Managers.

45
 TABLE NO:9
WHERE IS YOUR RAW MATERIAL STORES SITUATED?

Particulars Frequency Percentage

Near main entrance 21 48
Far from entrance gate 6 14
Middle of production plant 17 38
In isolation 0 0
Total 44 100

46
 CHART NO:9
WHERE IS YOUR RAW MATERIAL STORES SITUATED?

60

50
48
40
38
30

20

10 14
0
0
Near main Far from entrance Middle of In isolation
entrance gate production plant

INTERPRETATION
48% respondent firms have their store department near to main entrance, 38% have their
stores middle of production plant and rest 14% has the stores department far from the
entrance gate. During the visit to these units researcher observed that the space utilisation was
poor and materials were placed in an improper manner in the stores. Location of stores is
proper but they lack in store management.

47
 TABLE NO:10
WHERE ARE YOUR FINISHED GOODS STORES SITUATED?

Particulars Frequency Percentage

Near main entrance 34 77
Far from entrance gate 4 9
Middle of production plant 6 14
In isolation 0 0
Total 44 100

48
 CHART NO:10
WHERE ARE YOUR FINISHED GOODS STORES SITUATED?

90
80
70 77

60
50
40
30
20
10 14
9 0
0
Near main Far from entrance Middle of In isolation
entrance gate production plant

INTERPRETATION
From the data it is clear that 77% of the respondent firms have warehouses near to the main
entrance, 14% have placed warehouse in the middle of the production plant where as rest 9%
respondent firms have placed it far from entrance gate. Finished goods stores location is
proper and in place.

49
 TABLE NO: 11
WHICH PRINCIPLE YOU USE TO SELECT MATERIAL HANDLING
EQUIPMENT?

Particulars Frequency Percentage

Planning principle 12 27
Operating principle 13 30
Equipment principle 12 27
Costing principle 7 16
Total 44 100

50
 CHART NO: 11
WHICH PRINCIPLE YOU USE TO SELECT MATERIAL HANDLING
EQUIPMENT?

35

30 30
27 27
25

20

15 16

10

0
Planning principle Operating principle Equipment Costing principle
principle

INTERPRETATION
30% of the respondent firms consider operating principle while selecting material handling
equipments, 27% firms consider planning principle as important factor, 27% uses equipment
principle and rest 16% considers costing principle as important factor in selecting material
handling equipment. According to the researcher priority, the use of costing principle is not
observed here where as over all use of principles are in place.

51
 TABLE NO: 12
WHICH GROUP OF MATERIAL HANDLING EQUIPMENT YOU USE?

Particulars Frequency Percentage

Floor operated group 35 80

Vertical handling group 1 2

Overhead handling group 8 18
Allied equipments 0 0
Total 44 100

52
 CHART NO: 12
WHICH GROUP OF MATERIAL HANDLING EQUIPMENT YOU USE?

90
80 80
70
60
50
40
30
20 18
10
0 2 0
Floor operated Vertical handling Overhead handling Allied equipments
group group group

INTERPRETATION
Almost 80% of the respondent uses floor operated material handling equipment, 18% uses
overhead handling group, and only 2% firm uses vertical handling group. It can be observed
that none of the firms uses allied equipments.

53
 TABLE NO:13
WHAT IN YOUR OPINION ARE THE FACTORS AFFECTING MATERIAL
HANDLING SYSTEM?

Particulars Frequency Percentage

Production system 19 43
Product to be handled 24 55
Cost of material handling 0 0
Type of building in which 1 2
material is to be handled
Total 44 100

54
 CHART NO:13
WHAT IN YOUR OPINION ARE THE FACTORS AFFECTING MATERIAL
HANDLING SYSTEM?

60

50 55

40 43

30

20

10
0 2
0
Production system Product to be Cost of material Type of building in
handled handling which material is to
be handled

INTERPRETATION
Nearly 55% of the respondent firms are of the opinion that material handling system is
affected by product to be handled, 43% of the respondent firms say its production system
which affects the material handling where as only 2% are of the opinion that type of the
building affects material handling. Product and production system are the major factors
affecting material handling since the units under study manufactures different products.

55
 TABLE NO: 14
WHAT CRITERIA YOU THINK IS IMPORTANT WHILE SELECTING
MATERIAL HANDLING EQUIPMENT?

Particulars Frequency Percentage

Reduced cost of 4 9
transportation
Efficient services 7 16
Safety 25 57
Flexibility 8 18
Total 44 100

56
 CHART NO: 14
WHAT CRITERIA YOU THINK IS IMPORTANT WHILE SELECTING
MATERIAL HANDLING EQUIPMENT?

60
57
50

40

30

20
18
16
10
9
0
Reduced cost of Efficient services Safety Flexibility
transportation

INTERPRETATION
Out of 44 small scale manufacturing firms, 57% i.e. 25 units considers safety as important
aspect to choose material handling equipment, 18% chooses flexibility criteria, 16% chooses
efficient services as important and 9% considers cost of transportation as the important factor.
Units under study are well aware of safety issues while selecting the material handling issues.

57
 TABLE NO: 15
WHICH IS THE PROBLEM AREA WITH RESPECT TO MATERIAL HANDLING,
IN YOUR ORGANISATION?

Particulars Frequency Percentage

In receipts & stores 2 4

In production areas 12 27
In dispatch department 2 5
No problem 28 64
Total 44 100

58
 CHART NO: 15
WHICH IS THE PROBLEM AREA WITH RESPECT TO MATERIAL HANDLING,
IN YOUR ORGANISATION?

70

60 64

50

40

30
27
20

10
4 5
0
In receipts & stores In production areas In dispatch No problem
department

INTERPRETATION
27% of the firms under study faces problem of material handling in production areas, 5%
faces problem in dispatch department, 4% faces problem in receipts & stores and 64%
respondent firms say they didn’t face any problem of material handling. This indicates that 16
firms i.e. 36% units under study out of 44 are still in need of improvement in material
handling.

59
 CHAPTER V
FINDINGS, SUGGESTIONS & CONCLUSIONS
5.1 FINDINGS
 52% of the firm’s investment is more than 30 lakhs, 23% firm’s investment is
between 10 & 30 lakhs and 25% firm’s investment is not more than 10 lakhs.

 71% of firms under study have manpower less than 20, 18% have manpower between
20 to 40 workers and 11% firms have their manpower more than 40 which indicate
that the majority of the firms requires less manpower. The functioning of the business
is relatively less complex.

 75% of the firms run only Ist shift, 23% firms run Ist & IInd shift whereas only 2% of
the firms run all the three shifts. Small scale manufacturing units are engaged mostly
in job work which is part of intermittent production process and where they are not
required to run all the three shifts.
 64% of the respondent units have turnover between 30 lakhs and above, 29% of the
respondent units have turnover between 10 and 30 lakhs whereas only 7% of the
units understudy have turnover between 0 to 10 lakhs.

 27% of the total sample constitutes Casting/Fabrication units, 25% of the sample
constitutes Engineering units, percentage of other manufacturing units is 16,
percentage of Maintenance/Packaging units is 14, Agri Product units is 9% and
Chemical units are 9%.

 82% small scale manufacturing units under study indicates that profit maximization is
the business objective, 7% indicates objective is to increase return on investment, 7%
units have objective as increase in turn over (sales) and rest 4% has objective of
maximize customer satisfaction.

 84% of the respondents were Directors of the small scale manufacturer units, 9% were
Senior Managers and 7% were General Managers.

60
 84% of the respondents were Directors of the small scale manufacturer units, 9% were
Senior Managers and 7% were General Managers.

 48% respondent firms have their store department near to main entrance, 38% have
their stores middle of production plant and rest 14% has the stores department far
from the entrance gate. During the visit to these units researcher observed that the
space utilisation was poor and materials were placed in an improper manner in the
stores. Location of stores is proper but they lack in store management.

 77% of the respondent firms have warehouses near to the main entrance, 14% have
placed warehouse in the middle of the production plant where as rest 9% respondent
firms have placed it far from entrance gate. Finished goods stores location is proper
and in place.

 30% of the respondent firms consider operating principle while selecting material
handling equipments, 27% firms consider planning principle as important factor, 27%
uses equipment principle and rest 16% considers costing principle as important factor
in selecting material handling equipment. According to the researcher priority, the use
of costing principle is not observed here where as over all use of principles are in
place.

 80% of the respondent uses floor operated material handling equipment, 18% uses
overhead handling group, and only 2% firm uses vertical handling group. It can be
observed that none of the firms uses allied equipments.

 55% of the respondent firms are of the opinion that material handling system is
affected by product to be handled, 43% of the respondent firms say its production
system which affects the material handling where as only 2% are of the opinion that
type of the building affects material handling. Product and production system are the
major factors affecting material handling since the units under study manufactures
different products.

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 57% i.e. 25 units considers safety as important aspect to choose material handling
equipment, 18% chooses flexibility criteria, 16% chooses efficient services as
important and 9% considers cost of transportation as the important factor. Units under
study are well aware of safety issues while selecting the material handling issues.

 27% of the firms under study faces problem of material handling in production areas,
5% faces problem in dispatch department, 4% faces problem in receipts & stores and
64% respondent firms say they didn’t face any problem of material handling. This
indicates that 16 firms i.e. 36% units under study out of 44 are still in need of
improvement in material handling.

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5.2 SUGGESTIONS

 Scheduling of service time point of arrival and departure of rails, ships and plane has
great scope for improvement. They never run on time and require national discipline.
 The official are trained as ever in manage development. There should be time to
bound programme of simplify procedure and format.
 With the increasing trend of all modes of transportations more facilities should be
implemented maximum services to customers.
 Logistics development is absolutely necessary. In the absence of flow less and latest
logistics, the MNCs shy away from doing business in India. There is need to increase
FDI in logistics sphere and relaxing of norms relating to entry, taxation, import of
material handling and movement of equipment etc.

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 5.3. CONCLUSION

Indian Logistics industry is continuously improving its performance in the capithan exports
logistics industry by improvement of customs, trade-related infrastructure, inland transit,
logistics services, information systems, and port efficiency help to provide trade goods and
services on time and at low cost. The World Bank's 2007 the capithan exports Logistics
Report ranks India 46 amongst 150 countries in terms of logistics performance during the
year as well as its future potential.

However, as India’s logistics outsourcing and investments to improve logistics efficiencies

are still at a nascent stage, these future trends will take place, but it will take longer time to
materialize. The resources needed for wholesale development will also take enormous
amounts of time and resources. However, India should recognize the extraordinary role
logistics plays in economic development and in enhancing the competitiveness of all sectors
of the economy. As such, India should move forward for an integrated strategy towards
developing a world-class logistics industry.

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 BIBLIOGRAPHY

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Thousand Oaks, Ca: Sage, 1998.
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 Cooper, Harris. The structure of knowledge synthesis, Knowledge in Society, Vol.1,
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Malaysian Construction Firms: Impact on Performance." SIU Journal of
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 Khan, Shahadat , and Robert Mark Bosgraaf. "INVENTORY MANAGEMENT
IN A HIGH TECHNOLOGY ORGANISATION: THE IMPACT ON
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  Caridi, M, and R Cigolini. "Improving materials management effectiveness: A
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Newspaper
 Times of India
 Economic times

Website
www.google.com
www.unitedglobal.com
www.revireliterature.com
www.wikipedia.com

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 QUESTIONNAIRE
A STUDY ON MATERIAL HANDLING MANAGEMENT OF CAPITHAN EXPORTS
LOGISTICS PRIVATE LIMITED, KOLLAM, KERALA

I] Organisation profile:-
1. Initial investment:
[ ] 0-10 lakhs
[ ] 10-30 lakhs
[ ] 30 lakhs & above
2. Number of employees:
[ ] 0-20
[ ] 20-40
[ ] 40 & above
3. Number of working shifts:
[ ] Ist shift
[ ] Ist & IInd shift
[ ] Ist, IInd & IIIrd shift
4. Annual Turnover:
[ ] 0-10 lakhs
[ ] 10-30 lakhs
[ ] 30 lakhs & above
5. Product catagory:
[ ] Engineering
[ ] Manufacturing
[ ] Maintenance/Packaging
[ ] Agri Products
[ ] Casting/Fabrication
[ ] Chemical

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6. Business objectives:
[ ] Maximise customer satisfaction
[ ] Maximise profit
[ ] Increase return on investment
[ ] Increase turnover (sales)

7. Participation by management level

[ ] Director
[ ] General Manager
[ ] Senior Manager
[ ] Manager

ii. Material Handling Management

8. Where is your raw material stores situated?
[ ] Near main entrance
[ ] Far from entrance gate
[ ] Middle of production plant
[ ] In isolation

9. Where are your finished goods stores situated?

[ ] Near main entrance
[ ] Far from entrance gate
[ ] Middle of production plant
[ ] In isolation

10. Which principle you use to select material handling equipment?

[ ] Planning principle
[ ] Operating principle
[ ] Equipment principle
[ ] Costing principle

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11. Which group of material handling equipment you use?
[ ] Floor operated group
[ ] Vertical handling group
[ ] Overhead handling group
[ ] Allied equipments
12. What in your opinion are the factors affecting material handling system?
[ ] Production system
[ ] Product to be handled
[ ] Cost of material handling device
[ ] Type of building in which material is to be handled

13. What criteria you think is important while selecting material handling equipment?
[ ] Reduced cost of transportation
[ ] Efficient services
[ ] Safety
[ ] Flexibility

14. Which is the problem area with respect to material handling, in your organisation?
[ ] In receipts & stores
[ ] In production areas
[ ] In dispatch department
[ ] No problem

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