PROJECT REPORT ON FREIGHT COST CONTROLLING & PROCESS (An analysis)

Submitted To:Mr. Ajay Jain HOD Finance & Account Dept. Project Guide:Mr. Sumesh Agarwal Finance & Account Dept. Submitted By:Sachin Kumar Gumber PGDM- IVth Trimester IILM-GSM Greater noida

ACKNOWLEDGMENT
Exchange of ideas generated new objects to work in a better way. Whenever a person is helped & cooperated by others, his heart is bound to pay gratitude & obligation to them. During the making of this project I was helped by many people. They motivated me & gave me valuable suggestion & guidance apart from their cooperation to complete this project. I sincerely want to extend my heartily thanks to all of them. I deeply extend my gratitude &appreciation to Mr.Ajay Jain (H.O.D., Finance & Accounts Dept., M&M Ltd.)For their encouragement & valuable suggestions. I am also grateful to Mr. Sumesh Agarwal (Project guide) for their constant guidance during my entire project work. I also express my sincere thanks to Mr. V.K. Joshi, Mr. Susheel Bhatt, Mr. Nitin Saxena. who always helped me to understand the concepts & aspects of industry & their dept. I sincerely thanks to Mr.Sunit Joshi, Mr.Kavinder Singh, Mr.C.S. Pandey, Mr. C.S. Bhatt, for their selfless support to carry out all the work. I would like to thank Mahindra & Mahindra Ltd. who gave me wonderful Opportunity to do my Industrial training at their industry. A special thanks to 'GOD' for giving me confidence and strength to initiate this venture.

PART 1:- ORGANIZATIONAL PROFILE

1.1

History of Mahindra & Mahindra Ltd. 1.2 Overview of Mahindra Group 1.3 Company Profile
1.4

Core Purpose & Values

1.5 Various sectors of Mahindra Group

1.6 1.7

Board of Directors Technology Used in Mahindra & Mahindra ltd.

1.8 Milestones & Awards 1.9 Corporate Social Responsibility 1.10 Introduction of Farm Equipment Sector 1.10(i) Products 1.11 About Rudrapur Plant 1.11 (i) Organization structure 1.11 (ii) Products 1.11 (iii) SWOT Analysis 1.12 Problems of Industry 1.13 Strategy of FES( M&M Ltd.) for F-09

M&M FOUNDERS

The history of M&M starts in period of World War IInd, when two brothers Mr. Jagdish Chandra Mahindra and Mr. Kailash Chandra Mahindra envisioned a much greater role for themselves in the building and growth of independent India, Mr. J.C. Mahindra was the advisor to the government at that time and was first Indian to become the Iron and Steel Controller of India, Mr. K.C. Mahindra was then the head of the Indian Supply Mission to Washington, USA.

The Mahindra brothers left their flourishing career to become entrepreneur give shape to their vision and create an organization to be a strong pillar in the building and growth of Industrial India. The two brother and Mr.Ghulam Mohammed formed the company, Mahindra & Mohammed in 1945 to make general purpose utility vehicles for the Indian market. M&M Ltd. was incorporated on 2nd October 1945 initially it was Mahindra & Mohammed Ltd., whose name was changed on 13th Jan 1948 to Mahindra & Mahindra Ltd. as Mr. G. Mohammed went to Pakistan to become First Finance Minister of Pakistan.

M&M becomes Public Ltd. Company on 15th June 1955 when it issued its first public share. These shares were listed on the BSE in 1956.

THE MAHINDRA GROUP- AN OVERVIEW

The US $6.7 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra & Mahindra is the only Indian company among the top tractor brands in the World. Mahindras Farm Equipment Sector has recently won the JQM (Japan Quality Medal) , the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win Deming Prize. Mahindra is the market leader in multi-utility vehicles in India. It made a milestone entry into the passenger car segment with the Logan. The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade and logistics, automotive components, information technology, after-market and infrastructure development. With over 62 years of manufacturing experience, the Mahindra group has built a strong base in technology, engineering, marketing and distribution which are key to its revolution as a customer centric organization. The Group employee over 50,000 people and has several state- of-the-art facilities in India and overseas. The Mahindra Group has ambitious global aspirations and has a presence on 5 continents. Mahindra products are today available on every continent except Antarctica. M&M has 1 tractor manufacturing plant in China, 3 assembly plants in the United States and 1 at Brisbane, Australia.

It has made strategic acquisition across the globe including Stokes Forgings (UK), Jeco holding AG (Germany) and Schoneweiss & Co GmbH (Germany). Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc. and Mahindra South Africa.

M&M has entered into partnership with international companies like Renault SA, France, and International Truck and Engine Corporation, USA. Forbes has ranked the Mahindra Group in its Top 200 list of the Worlds Most Reputable Companies and in the top 10 list of most Reputable Indian Companies. Recently Mahindra & Mahindra was awarded the prestigious 21st CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar 2008, in the Large Manufacturing Enterprises category. Instituted in 1988 by the Council for Fair Business Practices, the award recognizes and applauds the efforts of businesspersons, business houses and business associations with an exemplary record of practicing and promoting Fair Business Practices. It encourages and motivates businesses to proactively pursue opportunities to fulfill its social responsibilities.

PROFILE

Mahindra & Mahindra ltd. soon branched out into manufacturing Agricultural Tractors and Light Commercial Vehicles (LCVs). The manufacturing of utility vehicles commenced in 1954 in collaboration with Willys Overland Corporation and its successor, (now part of the Daimler Chrysler Corporation). Manufacturing of the first LCV by the company commenced in 1965.In 1963, the International Tractor Company of India Ltd. (ITCIL) was incorporated as a joint venture among the companies, International Harvester Incorporation (now part of Case New Holland,UK) and Voltas Ltd. to manufacture and sell tractors in India. 1n 1977 ITCIL merged with M&M Ltd. and become its tractor division. The company entered into technical collaboration with Peugeot in 1979 for the manufacture of diesel engines and transmissions and with KIA motors in 1982 for the manufacture of transmission assemblies. In 1982 the International harvester brand was discontinued and the Mahindra brand was born.

CORE PURPOSE OF MAHINDRA & MAHINDRA LTD.

Indians are second to none in the world. The founders of our nation and of M&M passionately believed this. Company will prove them right by believing in themselves and by making Mahindra & Mahindra Ltd. known world wide for the quality durability and reliability of its products and services.

CORE VALUES AT M&M we say

Our core values are influenced by our past, tempered or present and are designed to shape our future. They are an amalgam of what we have been, what we are and what we want to be.

GOOD CORPORATE CITIZENSHIP

As in the past, we will continue to seek long-term success that is in alignment with our country needs. We will do this without compromising on ethical business standards.

PROFESSIONALISM
We have always sought the best people and given them the freedom and the opportunity to grow. We will continue to do so. We will support innovation and well-reasoned risk-taking, but will demand performance.

CUSTOMER FIRST
We exist and prosper only because of our customers. We will respond to there changing needs and expectations speedily, courteously and effectively.

QUALITY FOCUS
Quality is the key to delivering value for money to our customers. We will make quality a driving value to our work, in our products and in our interactions with others we will do first time right.

DIGNITY OF THE INDIVIDUAL

We value individual dignity, uphold the right it express disagreement and respect the time efforts of others. Through our actions, we nurture fairness, trust and transparency.

SOME INDUSTRIAL TERMS

1) Customer service: All the activities that are done to keep the existing customer satisfied come under the gamut of customer service. 2) Demand Forecasting: The process includes various statistical measures that enable the firm to estimate the demand of the future, which helps in proper demand management. 3) Documentation Flow: The processes cover the movement of the paper work that accompanies the movement of physical product. 4) Inter plant movement: This is only applicable to those firms where production process is accomplished in more than one plant, requiring the movement of semi finished product from one plant to other. 5) Inventory management: Inventory management requires a cost effective maintenance of stocks of goods and material. 6) Order processing: Order processing starts with the receipt of an order from the customer and ends when the order is ready for packaging. 7) Packaging: Packaging is done mainly to protect the product when it is being transported from source to destination. It can also be used for promotional purposes. 8) Parts and service support: This covers the whole after sales service Process. 9) Plant and ware house Site selection: This function is carried to determine where the plant and the ware house are going to located. 10) Production Scheduling: This function task is to balance demand for products with the existing plant capacity and availability of inputs.

M&M GROUP AT GLANCE

Mahindra & Mahindra Ltd

Automative Sector Mahindra Systech Specialty Business Mahindra Partners After Market Sector Financial Services Sector

Farm Equipment Sector

Group Divisions

Infrastructure Development Mahindra TwoWheeler Information technology

SECTORS IN MAHINDRA &MAHINDRA LTD

There are sectors in Mahindra, which are as follows: 1. Farm Equipment Sector (FES). Domestic Operations International operations Mahindra Agribusiness 2. Automotive Sector. Domestic Operations International operations Mahindra Renault Private Limited (MRPL) Mahindra Navistar Automotives Limited (MNAL) Mahindra Navistar Engines Private Limited (MNEPL) 3. After market sector. Mahindra Spares Business Mahindra First Choice Mahindra First Choice Wheels Ltd. 4. Infrastructure Development Sector. Mahindra Holidays & Resorts Mahindra Lifespaces Developers Limited Mahindra World City Mahindra Infrastructure Developers Acres Consulting Engineers 5. Specialty Business Sector Mumbai Mantra Mahindra Defence System 6. Financial Services Sector. Mahindra & Mahindra Financial Services Ltd (Mahindra Finance) Mahindra Insurance Brokers Ltd. Mahindra Rural Housing Finance Ltd (MRHFL) 7. Mahindra Systech Mahindra Forgings Limited (India & Europe) Mahindra Engineering Engines Engineering Italy Mahindra Aerospace Mahindra Sar Transmissions

8. Mahindra two-Wheeler

9. Information Technology Tech Mahindra Bristlecone 10. Mahindra Partners Mahindra Odyssea Mahindra Intertrade Mahindra Steel Service Center Mahindra MiddleEast Electrical Steel Service Centre (MMESSC) Mahindra Logistics Ltd. Mahindra Retail

BOARD OF DIRECTORS

Mr. Keshub Mahindra Mr. Anand Mahindra Mr. Bharat Doshi Mr. A. K. Nanda Mr. Deepak S. Parekh Mr. Nadir B. Godrej Mr. M. M. Murugappan Mr. Narayan Vaghul Mr. A. S. Ganguly Mr. R. K. Kulkarni Mr. Anupam Puri Mr. Thomas Mathew T

Chairman Vice- chairman Executive Director & Group Chief Financial Officer Executive Director

Nominee of LICI

GROUP MANAGEMENT BOARD

Dr. Pawan Goenka Dr. Bharat Doshi Officer Mr. A. K. Nanda Development Sector)

President- Automotive Sector Executive Director & Group Chief Financial Executive Director & President( Infrastructure

Mr. AnjanKumar Choudhari President Farm equipment Sector Mr. Rajeev Dubey Services) Mr. Hemant Luthra Mr. Raghunath Murti President- Systech Sector PresidentTrade, Retail and Logistics Sector President (HR, After-Market and Corporate

Mr.Uday Y. Phadke Services Sector Dr. Pawan Goenka

President- Finance, Legal and Financial

President- Automotive Sector

TECHNOLOGY USED IN MAHINDRA & MAHINDRA

All the activities in Mahindra are carried out under an integrated package called ERP (Enterprise Wide Resource Planning). All the activities are carried as per SAP (System application Product In Data Processing).Mahindra uses LAN (Local Area Network) to connect its computers within the organizations. It uses BSNL 2 mbps lease line, which gives a fast connectivity. Mahindra & Mahindra, Rudrapur unit has 165 PC switch are dual core processors and are loaded with MS OFFICE 2003 and SAP Software. System has the required peripherals. There is one laser Jet HP, color disk jet and dot matrix printer for each department. There is one scanner and one CD writer which is centralized with IT (Information Technology) department. Organisation.

What is SAP?
System Applications and Product in Data Processing SAP AG is a German company founded by 5 ex - IBM Employees in 1972 Till 1994 it was R/2 and now it is R/3 R/3 stands for release 3, where 3 indicates GUI (graphic user interface) Application server Database server The first version was 2.0 in India. The current version is 6.0 3 tier Architecture

Indian Office: Bangalore Major Customers: M&M ltd. ,General Motors, Mercedes, Coco- Cola etc.

BENEFITS OF SAP AS AN ERP PACKAGE

1. Improves employee productivity through reduction in non-productive activities. 2. Provides quantifiable benefits such as Octroi refund, Bill passing & Payment. 3. Better control on obsolesce etc. 4. Improves inventory turns through reduction in Material through put time. 5. Provides real time data for decision - making. 6. Reduces financial consolidation time. 7. Provides for more efficient product costing. 8. Provides foundation for e business activities.

ADVANTAGES OF SAP AS ERP PACKAGE

1. User friendly. 2. Addresses all business processes. 3. Fast and reliable in data accessing. 4. Enforces user discipline. 5. Built on best business practices world over. 6. Ability to be upgraded system + technology. 7. Integration with Microsoft Windows. 8. Efficient post - implementation support

SAP AT MAHINDRA AND MAHINDRA LTD.

SAP is an ERP (enterprise-wide resource planning) initiate operative at different sites for different periods. All transactions such as buying and receiving the materials, dispatching vehicles and spares, transacting among units, paying bills, taking credits and consolidating the accounts are carried out in SAP. M&M users have acquired sufficient expertise to navigate through the system for carrying out transactions and seeking information. Authority profiles have been created to offer enough flexibility while controlling the critical applications only to a few personnel. The system usage has also been improved by developing number of functionalities. This helped M&M business in performing more effectively as time progressed.

Following are the few representative enhancements:-

1. Vendor Rating System. 2. Spares Indenting System 3. Octopi Refund System. 4. General Payment and Receipt System. 5. Plant Maintenance System. 6. System for Sales and Operation Planning. 7. Materials Requirement Planning 8. Automatic Link Enabling for Inter Unit transfers.

The system is now ready and being extended to cover the entire Supply Chain. All the Area Offices will soon be a part of the system and the warehouses will operate as plants receiving finished goods from the manufacturing set-ups and delivering them to the dealer. On upstream, a website is being create for supplier to log on to eliminate communication delays and cut down the supply lead time.

SAP AND M&M: M&M is world largest SAP implementation on Windows NT. M&M is currently largest SAP implementation in India. M&M is first to implement CIN 2 in India with SAP 3.0F M&M played major role on development of CIN 2.0 M&M has implement maximum number of modules in India. M&M is first to implement BW (Business warehouse) M&M is first to implement SRM (Supplier relationship management) M&M is first to implement APO (Advance planning optimizer).

MILESTONES

2009: Mahindra launches the Xylo January 13 Farm Equipment Sector honoured with the Golden Peacock award for outstanding innovation in Testing & Evaluation January 22 FES makes a foray in the South East Asian Market February 9 Mahindra Group forays into boat manufacturing February 17 Rajasthan CM inaugurates Light Engineering and Handicrafts SEZ at MWC Jaipur February 28 Tech Mahindra and Times Foundation present Shikshak Samman Awards February 24 Mahindra launches the New, Mighty Muscular Scorpio- March 6 Mahindra signs MoU with Bank of Baroda for vehicle finance March 22 Tech Mahindra declared highest bidder for Satyam April 14

2008:-

Mahindra enters into JV with TMI Pacific in Australia. Project Ingenio is now Mahindra XYLO. Mahindra introduces Fuel Smart system in Bolero and

Scorpio SUVs Tech Mahindra receives the Frost and Sullivan 2008 Growth

Excellence Award Anand Mahindra receives Harvard Business School Alumni

Achievement Award. Mahindra launches first Sustainability Report with highest

GRI Rating. MHRIL honored with Super brand 2008 award Mahindra Renault launches the Logan in Nepal Mahindra acquires majority stake in 3rd largest tractor

company in China Mahindra to enter the two-wheeler industry Mahindra Tractors is among Indias most innovative

companies Tech Mahindra wins USD700 million ST Program from BT

Mahindra launches Environment Friendly Bolero Pik-Up CNG

in Delhi Mahindra Tractors tops USA dealer satisfaction survey Mahindra Tractors launch Indias first bio-diesel tractor Mahindra receives the Innovation Excellence award

2007:-

The Logan ranks first in the J.D Power Asia Pacific 2007 India Initial Quality Study SM (IQS) in the Entry Mid-size segment with a score of 65 PP10O. Released in December 2007, this study serves as the industry benchmark for new-vehicle quality measured at two to six months of ownership. Overall quality performance is based on both design quality and production quality problems per 100 vehicles (PP100).

Mr. Anand Mahindra features among the top 15 in the Mint Influencers Index. The Mint Infleuncers Index is an objective measure that tracks 20 high-profile Indian business and policy leaders across the print media.

 Scorpio tops TNS Automotive TCS Study in the MPV/SUV segment with a segment leading score of 91 (joint first with Innova) as per a study released in December 2007.

Logan was the highest selling sedan and Scorpio the highest selling UV in July 2007.

The Economic Times has rated Mahindra & Mahindra among the Top 50 Most Valuable Brands in its edition dated July 31, 2007. The ratings were arrived at by analyzing the companys five years of historic revenues and its current market value. The valuation was performed by Brand Finance using the Relief from Royalty approach. This approach assumes that a company does not own its own brand and calculates how much it would need to pay to license it from a third party. The present value of that stream of (hypothetical) royalty payments represents the value of the brand.

Mahindra Logan Diesel tops TNS Automotive TCS Study in the segment- Midsize Diesel with exceptional score of 96 as per a study released in December 2007

2006:-

Forbes has ranked the Mahindra Group in its Top 200 list of the Worlds Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies.

M&M is first Indian auto maker to launch CRDe

M&M wins Overdrive Car Maker of the Year Award

Mr. Anand Mahindra, Vice Chairman & Managing Director, named Auto Monitor Person of the Year

Scorpio crosses 1 lakh production milestone

2005:-

M&M Tractors launches Australia operations

M&M and Jiangling Motor Co. Group enter into a JV to form Mahindra (China) Tractor Company Ltd.

2004:-

Mahindra City gets gets permission for Special Economic Zone

Forms new sector, Mahindra Systems and Automotive

Technologies

M&M becomes first Indian company to achieve sales of 1 million

tractors

2003:-

M&M opens second tractor assembly plant in USA

2002
Launch of Scorpio - a completely new indigenously designed vehicle

2001:-

M&M ties up with Renault for petrol engines

1999:-

Trading division spun off as separate company called Mahindra

Intertrade Ltd (MIL)

1994:-

Mahindra USA Inc., formed for distribution of tractors in the US

1983:-

M&M became market leader in Indian Tractor market & position it

has retained till date.

Tractors were manufactured under the brand name Mahindra

1978:-

International Tractor Company of India merged with M&M to

become its tractor division

1955: Mahindra & Mahindra goes public.

SOME RECENTS AWARDS

2009: Mahindra FES was honoured with the 'Golden Peacock Award for Occupational Health & Safety - 2009' for Excellence in Occupational Health and Safety practices. The award was presented to the FES representatives at a special Gala Awards Event during the Global Convention on Climate Change on Sunday, 14th June 2009 at S.M. Convention Centre, Palampur (Himachal Pradesh).

 Mahindra FES won gold as the Best New Tractor in the Lower Horse Power Category (upto 70 Hp) at the 76th International Novisad Fair. The fair was held from 8th May 09 - 16th May 09 at Novisad, the capital of the Serbian Province of Vojvodina. Mahindra outbeat competition on parameters such as aesthetics, fuel consumption, handling ease and overall performance. The competition was organized by the organizing committee of Novisad fair and was conducted by leading agricultural experts from accredited agricultural universities.

On May 14, 2009, Mahindra & Mahindra was awarded the prestigious 21st CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar 2008, in the Large Manufacturing Enterprises category. Instituted in 1988 by the Council for Fair Business Practices, the award recognizes and applauds the efforts of businesspersons, business houses and business associations with an exemplary record of practicing and promoting Fair Business Practices. It encourages and motivates businesses to proactively pursue opportunities to fulfill its social responsibilities

 The Scorpio receive the Best Off roader vehicle of the year 2009 award and the Start-stop technology received the Environment Initiative of the year 2009 award from Carwale.com on April 29, 2009.

2008:-

Mahindra & Mahindra was honored with the Business world FICCI-SEDF Corporate Social Responsibility Award from the Honorable Finance Minister, Mr. P. Chidambaram in New Delhi on May 18, 2008. Mr. Arun Nanda, Executive Director, Mahindra & Mahindra has been conferred the award of Chevallier de la Legion dHonneur by the President of the French Republic, Mr. Nicholas SARKOZY.

Mahindra & Mahindra Ltd. was awarded the Excellence in Innovation Award at the Indira International Innovation Summit (3is Summit) at a glittering function held on the 15th of February, 2008 in Mumbai

The Scorpio and the Logan received the TNS The Voice of the Customer award along with the Innova at a glittering ceremony in New Delhi on January 9, 2008.

2007:-

Chairman, Mr. Keshub Mahindra, has been conferred with the prestigious Ernst &Young Entrepreneur of the Year Lifetime Achievement Award for 2007 held in Delhi on November 20, 2007

The Institute of Economic Studies (IES), New Delhi, has awarded the 'Udyog Rattan' to Anjanikumar Choudhari, President Farm Equipment Sector and Member of the Group Management Board.

Mr. Anand Mahindra, VC & MD, Mahindra Group has been

honored with The Most Inspiring Corporate Leader of the Year Award by NDTV Profit in New Delhi on July 27, 2007. Finance Minister P. Chidambaram presented the award to Mr. Mahindra in the presence of who's who of India's corporate world. M&M ,FES win the JQM award.

CORPORATE SOCIAL RESPONSIBILITY

1.

Mahindra United World College of India- MUWCI the Indian Global

School:-

The Mahindra United World College of India was founded in 1997, as a premier educational institute offering true international education to students from India and abroad. The global education offered by MUWCI brings together students of various nationalities for a pre-university degree. Keen focus is given on all-round development of the students, and the students are encouraged to become agents of change by involving themselves in socially and environmentally relevant issues.

2.

KV Mahindra Education Trust :-

It was established in 1953 by the Late K C Mahindra, M&M is the main sponsor of the KC Mahindra Education Trust. The trusts objective is the promotion of education at various level, and it is involved in and contributes to various education initiatives.

3.

Nanhi Kali- Empowering the girl child:-

In 1996 the KC Mahindra trust kicked off an ambitious program aimed at helping the underprivileged girl child in India. Christened Nanhi Kali, the

projects principle goal is to promote primary education for the underprivileged girl child in both rural and urban parts of the country.

4.

Promoting Health and Hygiene :-

Mahindra forgings, chanak has developed a CD title Teen Prashna Ek Uttar an entertaining and enlightening visual journey about health and hygiene. It is targeted at village level primary school children who are often unaware of basic hygiene factors. The CD will be screened at schools in and around chanak.

5.

Enhancing Safety:-

FES Kandivli organized a traffic training programme for 58 sanskar students. Mrs. Suvrata Gharge planned the activity. These students will participate in traffic control on Ganesh Vsarjan days.

6.

Driving Excellence in Education:-

The chanak Project Office, Pimpri, Pune initiated its first Esop activity with the presentation of ten fully fuctional desktop computers to the Don

Bosco Technical Institute, chinchwad. The Don Bosco society is internationally renowned for its service to the underprivileged. The training cell was inaugurated by Mr. Prince Augustin, Sr. VicePresident Human Capital and Mr. Sohan Maine, Vice President Chanak Project.

7.

FES Rdpr Plant takes the Lifeline Express to Uttarakhand:

The Lifeline express the Worlds first hospital on rail was sponsored by the FES Rdpr Plant, as a Corporate Social Responsibility initiative, held under the activities of the companys Esops. Lifeline Express: First time by Mahindra, First time in Uttarakhand: Over 2000 patients benefited from the Camp. 647 surgeries were performed in 24 days(102: cleft lip, 93: ear, 54: polio and 398: cataract) 21000 voluntary man hours through community participation.

FARM EQUIPMENT SECTOR

The Mahindra Groups Farm Equipment sector has significant presence across six continents (except Antarctica). It is among the top five tractors brands in the world, with its own state-of-the-art plants in India, USA, China

and Australia, and a capacity to produce 1300000 tractors a year. The Group has a network of 800 dealers across world-wide.

In the domestic business, the Farm Equipment Sector has had an unparallel market leadership for the last 25years. It is the largest producer of tractors in India. Mahindra & Mahindra recently consolidated its position as the leader of the Indian tractor industry when it acquired 43% stake in Punjab Tractors, the owner of the owner of the leading Swaraj brand of tractors.

Mahindra Gujarat Tractor, acquired by Mahindra & Mahindra from the Government of Gujarat in 1999, is the oldest running tractor unit in the country. The Mahindra Group has a 60% stake and the balance is with Government of Gujarat.

Mahindra Agri-business integrates the food chain by providing quality inputs and farm solution to post- harvest management of high value farm produce. The Companys core business is to provide Supply Chain Services to organized retail, to both export and domestic markets for fresh fruits and vegetables as well as to the food processing industry. Mahindra Agri-business is the first Indian corporate body to be awarded EUREGAP certificate as Primary Market Organization for grapes.

The Mahindra Groups Farm Equipment sector is the largest producer of Agricultural tractors in India. It has enjoyed an unparalleled market leadership in the domestic market for the last 25 yrs. With a 30% market

share, the Bhoomiputra, Sarpanch and Arjun brands of tractors give the groups Farm Equipment Sector a presence in the entire major tractor segment in India. It has a large customer base of around 12 lacks satisfied Customers and the deepest distribution reach. The Sector has 4 manufacturing plant in India, located at Mumbai and Nagpur in Maharashtra, Rudrapur in Uttarakhand & Jaipur in Rajasthan.

The Farm Equipment Sector has always been a process driven organization with a strong focus on its quality system. The TQM movement in the Sector has brought accolades like the most coveted Deming Application Prize, JQM(Japan Quality Medal) making it the first tractor company in the world to win recognition of the stature.

PRODUCTS OF MAHINDRA & MAHINDRA (FES)

TRACTORS BELOW 30HP

1. 2.

265 DI SARPANCH 265 DI BHOOMIPUTRA

TRACTORS BETWEEN 30-40 HP

1. 2. 3.

ARJUN 445 DI 275 DI TU SARPANCH 475 DI BHOOMIPUTRA

TRACTORS ABOVE 40 HP
1. 2. 3. 4. 5. ARJUN 555 DI ARJUN 605 DI 575 DI-SARPANCH 575 DI-SARPANCH 475 DI-SARPANCH

MANUFACTURING LOCATIONS FES

MUMBAI

RUDRAPUR
NAGPUR JAIPUR

ABOUT UTTARAKHAND

If its peace and serenity, reinforcing the divine power, It could only be UTTARAKHAND.

On 9th November separate state.

2000,

Uttaranchal

was declared as a

It is a Pilgrim and Tourist center with places like Badrinath, Kedarnath, Mussourie, Nainital etc.

Places like Rudrapur, Kashipur are agricultural cum industrial towns.

Rudrapur is in the district of Udham Singh Nagar & is the foothills of Himalayas

ABOUT RUDRAPUR
Total population Geographical Location Literacy Rate Female approx 54.16% Major Industries Leyand : M&M(FES), TATA, Bajaj, Ashok Dabur,Britannia, Voltas, Parle, Nestle. : : : 1.75 lacks Around 250 kms from Delhi Male-approx76.2% ,

RUDRAPUR PLANT VIEW

MAHINDRA & MAHINDRA Ltd, RUDRAPUR UTTARAKHAND

MISSION--- Zero Accident & Zero Defect

Rudrapur Performance Unit came into existence in March 2000 as a Satellite plant with installed capacity of 9000 tractors per annum (15 tractors per shift on two shift basis) having an idea to be closer to the market in northern part of India so that the requirement of the customers can be met faster. The plant is a part of Farm Equipment Sector of M&M group. In year 2003 due to expected increase in market demand and manufacturing strategy to be a low cost manufacturer, it was decided to expand the Rudrapur plant capacity from 15 Tractors per shift to 47 Tractors per shift with in house assembly facility of Engine, Transmission and Hydraulics aggregates in a phased manner.

PLANT CAPACITY TREND

TRACTOR PER DAY 200 150 100 50 0 F-05 F-06 F-07 F-08 F-09 FISCAL YEAR plant capacity trend

With the introduction of new assembly lines the plant becomes Integrated Assembly Plant in Dec, 04. Assembly process includes engine docking,

pre-painting assembly, pre-treatment of skid. Painting followed by paint ,baking, post painting assembly, tier mounting, roller testing, road testing and PDI, finally stock transferred to the Rudrapur. Transmissions, Engines are received from Kandivli or Nagpur and painted sheet metals from Kandivli. Child parts are procured from Nagpur and directly from suppliers approved by Kandavli. In 2007, the plant started 3rd shift operation for quality and productivity & machine shop for Crankcase and Cylinder head manufacturing. The plant wins the Star of the FES Award in 2007. The Rudrapur plant is the largest producer of Tractors in the entire Sub- continent. The plant is increased its productivity by many folds within recent 2 to 3 yrs. The net productivity of the plant is 183 Tractors per day.

The net market share of M&M Tractors is 30%, out of which Rudrapur plant alone contributes 51%. The credit of such achievement lies in the hands of hundreds of hard working employees of M&M Ltd. who works day and night. The model which is manufacturing in plant is Bhoomiputra and the no. of employees working there is around 1000 including cell members.

The plant is awarded by many national and international standard certificates such as TS 16949, ISO 14001, ISO 18001, QS 9000, & OHSAS etc. for policies relating environment, safety and information security. The Company has won the Deeming Application Prize, the first ever in the

world in tractor segment for its distinctive performance improvements through the application of TQM. TPM is recently implemented there. Following were the assumptions in the initial business case of the plant:

Reduce manufacturing cost by way of Tax benefits like Sales Tax, low manpower and transportation cost.

Fast availability of local demand.

Loyalty of customers for locally manufactured products.

Quicker deliveries.

Integration of manufacturing, marketing and extension services.

To promote and establish Mahindra Brand.

Co location of stockyard to reduce cost, achieve synergy and improve marketing & Distribution in the region.

This plant has kept its constant focus on continuous improvement in assembly processes to improve quality, productivity and reduce cost .Rudrapur Performance Unit has been the main focus of the FES. The plant is designed to follow the single piece flow and minimum handling.

The main responsibility of Rudrapur PU is to make and provide defect free Finished Tractors as per SCPC Domestic marketing requirement.

DIAGRAMATIC REPRESENTATION OF FINANCE & ACCOUNTS, IT DEPARTMENT OF MAHINDRA AND MAHINDRA

MR. AJAY JAIN (Manager)

Mr. V. K. Joshi (Deputy Manager)

Mr. Susheel Kumar Bhatt (Deputy Manager)

Mr. Sumesh Agarwal (Deputy Manager)

Mr. Nitin Saxena (Deputy Manager,IT)

Accounts Executive

Trainee, (Service center)

( Account Assitant, Service center)

IT Assistant

Assistant

PRODUCTS OF RUDRAPUR PLANT

Tractors model as: Bhoomiputra 265BP 265NBP 275BP 475BP SHAAN

Upcoming Model: 275NSTU 575BPE

SWOT Analysis Framework

Environmental Scan

Internal Analysis Analysis

External

Strength

Weakness

Opportunity

Threat

SWOT MATRIX

SWOT MATRIX

Strengths: A firm strengths are its resources and capabilities that can be
used as a basis for developing a competitive advantage. For examplegoodwill reputation among customers.

Weakness: The absence of certain strengths may be viewed as

weakness. For example- high cost structure.

Opportunities: The external environmental analysis may reveal certain

new opportunities for profit and growth. For example- arrival of new technologies.

Threats: Changes in the external environment may also present threats

to the firm. For example- Shifts in customers tastes away from the firms product/services.

SWOT ANALYSIS OF PLANT

S
1.Integrated Plant 2.Youth energy (Average 24 years) 4.Optimum Capacity Utilization (3 Shifts operation) 4.Low manufacturing cost 5.Lean Organization 6. Cell Member Working Pace -5MPH 7.O/P/H maximum across all plants (Effective space utilization)

W
Remote location Inadequate

O
Favorable taxation policies of government. Low manufacturing tractor model within

T
Union formation (strike) Upcoming new industries. Recession

space available cost attracts new the available space. Local supplier development

High attrition rate

Poor local infrastructure (Outside Plant) Talent crunch

Cheap labor

OTHER PROBLEMS OF INDUSTRY

Seasonal business Monsoon Hike in oil prices Price increase in material & utilities Overall F-10 tractor market : small growth expected

MAHINDRA & MAHINDRA (FES) STRATEGY: F10

1. Continued emphasis on Cost Re- engineering. 2. Aggressive growth of adjacencies 3. Synergy with Swaraj entities 4. Exploiting F09 domestic & overseas launches 5. Up gradation / re-launch of key models 6. Launch of Compact series & FS-25 in the US

OBJECTIVE OF THE STUDY

The objective of every research work is to pin point certain recommendations as per the requirement of the study and help the user

as well as the manager in proper decision-making. In the under-taking study an effort has been made together the pertinent facts.

The main objective of this project is to reduce the inward freight cost of the M&M ltd. Lalpur. For the fulfillment of this objective there were may be sub-objective to be consider, some of them are:-

1. Analyzing the whole process of the freight. 2. Judging the operational efficiency of the user. 3. Analyzing the problems faced by the users. 4. Finding out the solution for those problems. 5. Internal control regarding the payment.

PERIOD OF STUDY

This project was executed during summer break after third trimester in Mahindra & Mahindra Ltd., Farm Equipment Sector, Lalpur

(Rudrapur)from 15th may 2009 to 30th June 2009 under the supervision
of Mr. AJAY JAIN (FINANCE & ACCOUNT MANAGER).

RESEARCH METHDOLOGY
To conduct any research a scientific method must be followed. As I studied the process regarding the freight bill passing this is practically

performed in Mahindra & Mahindra ltd. Lalpur (Rudrapur). I got the information from the user knowledge.

SOURCES OF DATA:

The data collected for the project work is based on existing practice and to understand it, staff of the organization had provided me some documents and knowledge, therefore the source is to be calledSecondary source.

The Secondary source data are collected from the person who actually performing that activity and familiar with the practical problems which occurs.

Performers knowledge is more beneficial for understanding actual problem and to control them & cost also related with that.

Research Method Survey)

Random Sampling Method (Transporters bills

SCOPE OF STUDY

My study is confined toMahindra & Mahindra Ltd, Farm

Equipment Sector, Lalpur,, Industrial Estate(SIDCUL), Kichha road,

Rudrapur, Distt.- Nainital, (Uttarakhand)

M&M LTD can take advantage of our study to enhance their business prospects, critically examine the outcomes of this study in respect of their Transportation process, so that they can control the cost of freight and increase their profit, they can also build- up proper internal control over the process..

It has great scope for me also as I can apply this knowledge and experience of 6 weeks in my future career.

Part 2: Theoretical Background

About Logistics Management

Meaning of Transportation Meaning of Freight Cost Benefits of Transportation Importance of Transportation Various Modes of Transport( In Rudrapur Plant) Elements of freight cost Steps for controlling of Freight Cost Transportation network used at Rudrapur plant

ABOUT LOGISTICS MANAGEMENT

Organized movement of material and sometimes the people also is known as Logistics. This term firstly associated with the military but rapidly it cover the business activities. Proper business planning when used to move the material, service, information and capital also for effective management, that process is called Logistics Management. It includes the increasingly complex information, communication and control systems required in todays business environment. Logistics management includes planning, procurement, transportation, maintenance and replacement of personnel & material.

Different firms have their own method regarding logistics management. Like some firms perform these activities under one department, while some perform these under various department. The firm may also go in for other-one method, which is called third-party logistics, which is perform with the help of contract with an outside party to perform specific logistics services.

Freight Management System is the main part of Logistics. Freight Management System is a smaller concept and logistics is the bigger one.

MEANING OF TRANSPORTATION

Transportation means the physical movement of material from one place to another place. It includes activities like moving of raw material to central or local storage, moving finished goods to and from prospective customers.

In others words raw material can be transported from suppliers to the production facilities and finished goods from there to the consumers. Transportation helps in availability of the required product because products are rarely produced and consumed in the same location.

Transportation is the main artery of logistics and Supply Chain Management. It helps Logistics and Supply Chain Management to achieve its objective of availability of right quantity of the right quality goods at the right time and place at least costs.

MEANING OF FREIGHT COST

Freight cost includes the expenses concerned with the delivery and dispatch of finished goods to customers .In other words, it is an expenditure incurred from the time the product is completed until it reaches its destination or prospective customers.

It includes: Cost of packing Cost of time contributed in process of reaching of material from suppliers to customers. Distance cost Volume cost Loading and unloading charges Services provided by transporters etc.

BENEFITS OF TRANSPORTATION

Transportation plays a vital role in Supply Chain Processes. The Indian economy is generally characterized by a wide coverage of the geographical area, extensive coast lines, large population as well as abundance of mines, minerals along with agricultural lands, large population lands. It needs a variety of transport facilities in adequate quantities. There are a lot of transport benefits to an economy, mainly divided in two broad categories: Economic benefits Non-economic benefits

I.

Economic Benefits:It includes Transportation make products available to the final

condemns, i.e. it serves not only existing demands, but also stimulates new demands by extending the variety of goods that can be made available anywhere and everywhere. It facilitates production by moving different means of

production, i.e. raw materials, machines, tools, men, etc. to places of production where these are best suited. Transport also encourages regional specialization for competitive advantages.

It also considered as a key agency for the promotion of

planned development, i.e. regional economic disparities can be removed by way of transport. Transport provides ample opportunity for acceleration of

employment and income, which in turn, create demand for customer goods.

II.

NON-ECONOMIC BENEFITS:-

Non- economic benefits of transport may be judged by its great contribution towards social, political as well as cultural integration of mass population of any country with different moods, languages, castes, creeds and traditions. Transportation brings people of different regions at a common platform with the common social make- up of the community.

IMPORTANCE OF TRANSPORTATION
Transportation is the main artery of logistics and Supply Chain Management. It refers to the movement of goods from one location to another. Transportation plays a significant role in supply chain processes because products are rarely produced and consumed in the same location.

The share of transportation cost is about 40 % of the total logistical costs. Hence, any effort to cut down the logistical costs needs efficient and effective utilization of transportation facilities and its trade-off with other logistical components. Being an internal part of total logistics and supply chain system in India, railways and roadways carry about entire domestic freight cargo, whereas seaways and airways for international freight cargo.

Liberalization, privatization and globalization have further increased the market scope, where the world market is shrinking into a global village. In this situation, movement of goods and products has become more imperative as also wider. Further more, raw materials of one country are processed in the other country and sold out in Third World countries at an economy of scale and competitive advantage in the logistics and supply chain perspective. Transportation has a significant link with various stages of global supply chain.

In the era of rapid innovations in the field of information and communication technologies, there have been phenomenal growths in ecommerce and online selling which need more specific and value-added transportation services in order to meet delivery commitment. Hence, in internet marketing and associated home delivery of products, transportation costs have became even more significant in retailing. Now, transportation plays a vital role in the success of e- commerce supply chains.

Thus, the success of any logistical system and coordinated and efficient supply chain performance, transportation plays a very strategic role because: It ensures speedier and timely physical movement of goods from points of inception to point of consumption. It creates core competency by preventing stock-out and customer annoyance. It provides protective storage during transit. It ensures cost- effective better customer service. It fulfills specific service requirements of the corporate enterprises for improvement of logistical capabilities and harmonious supply chain relationships.

DIFFERENT MODES OF TRANSPORT IN CONTEXT OF THE M&M LTD (Rudrapur plant)

Various modes of transport are used by the companies for specific purpose of movement of various types of goods. The basic modes of transport are: Airways Waterways Roadways Railways Pipelines

In Rudrapur plant the modes of transport which are used are: Airways Roadways Railways

MODES OF TRANSPORT:-

1. ROADWAYS: With the growing popularity of logistics and supply chain management, the roadways have expanded rapidly since the last three decades. Most of the logistical operations of corporate enterprise largely depend on this mode of transport. It ensures flexibility in service for better customer responsiveness. .The reliability and economy of this mode is gradually increasing due to continuous improvement in the quality of motor vehicles and the conditions of roads. These factors facilitate in the achievement of logistical objectives like lower transit time, lower total logistical costs, and improved customer service.

2. RAILWAYS: The major advantage of railways is to efficiently transport large quantities of goods over long distances. Given the high fixed cost and low variable cost of operation, the tariff of railways is low, which encourages large shipments over a longer distance. That is why the bulk shipment of shipment of production like fertilizer, cement, food grains, petroleum products etc. are normally through railways from the production plant to the bulk/central warehouses.

3. AIRWAYS: When goods are transported by air, the mode of transport is called airways. This mode of transport is the newest and least preferred mode, especially for domestic purposes. One of the significant advantages of the air transportation lies in the speed. It needs only a few hours for a shipment from one place to reach another, in contrast to the days required with any other modes.

ELEMENTS OF FREIGHT COST

As freight cost is one of the major constitutes of total logistical costs. Hence, it is essential to have a proper analysis of freight cost, which includes various elements. Some elements behave in a contradictory manner with others. For instance, if firm opt for a more speedier mode of transportation, say airways, the transit time, obsolesce and deterioration costs are less but tariff costs goes up,

Following are the various elements of freight cost:-

1. TARIFF OF TRANSPORT MODE It means charge of various modes of transport to be paid for movement of goods from one location to another. Tariff of airways is highest, followed by roadways, railways, seaways and pipelines. Normally, freight charge increases with the decrease in transit time, i.e. higher the transit time, lower the freight cost. Tariff of transport mode largely depends upon a large number of factors, such as nature of the product, distance to be covered, volume/ quantity to be shipped, density (weight and space) of the product.

2.TRANSIT TIME COST This element is very significant: it deals with the cost of inventory in transit. If the transit time of a particular mode of transport is longer, it means that the product of the company remains in transit for a longer period of time. So, the involvement of working capital is for a longer period of time, resulting into higher transit time costs.

3. OBSELESENCE AND DETERIORATION COSTS These elements involve costs caused due to deterioration and obsolence in the physical attributes of the products during transit. There are certain type of products which are perishable and delicate in nature, whose physical attributes deteriorate aver a period of time, gradually resulting into devaluation of the product.

4. PROTECTIVE PACKAGING COSTS For specific products and modes of transport, there is requirement of specific protective packaging. In comparison to roadways more packaging is required in the railways, so this will also be the important element of freight cost.

5. TRANSIT INSURANCE COST It is the cost of insurance paid to insurance company to cover various type of risks. At the advent of containerization, this cost has been minimized due to lesser chances of damages of goods during transit.

6. MISCELLANEOUS COSTS It includes cost, such as local taxes, octroi, toll taxes, etc. especially when goods are shipped through roadways.

STEPS FOR CONTROLLING OF FREIGHT COST

Due to the prevailing global competitive environmental scenario, corporate enterprises are continuously under pressure to cut down freight cost and improve customer service capabilities. That is why, they need:

Reduction in transit time for minimization of inventory cost Less damages, en-route handling and pilferages for minimum insurance charges.

Curtailment of protective packaging costs. Point-to-point information regarding the status of the shipment.

TRANSPORTATION NETWORK USED IN RUDRAPUR PLANT (Direct shipment via distribution centre)

SUPPLIER

DESTINATION POINT

Plant 1

Customer A

Plant 2

Distribution Centre

Customer B

Plant 3

Customer C

Part 3: FREIGHT BILL PASSING AT M&M LTD.( Rudrapur) Process of order placed Arrival of material Process of freight bill generation Payment of bills

SUMMARY:( FREIGHT BILL PASSING & PAYMENT)

Receiving Production plan by plant from Kandavli(Mumbai, Head Office) Receiving Production plan from Production planning & Control(PPC )Rudrapur Purchase Order issued to the vendor: One copy issued to the transporter. Another copy to Kandavli (Mumbai). Transporter reaches to the supplier and collects the material. Vendor load the material. All the necessary document are being prepared from the Transporters office & dispatch them with the material to the buyer through Transporter. As per the conditions of the contract between transporter & M&M ltd. some responsibility regarding product are being taken by transporter during transport. Receiving of material at gate of RDP Plant. Entry formalities are fulfilled at gate.(Physical cont slip generated) After this goods passed for Goods Receipt generation as goods are being received by the plant and proof of this will handover to the transporter. Quality inspection process of the receiving goods at plant. There transporter handover the document at transporters office.

 Freight bill are being send to the receiver of the material by the transporter. Person of Supply Chain Planning and Control dept. cheque the bill as per the rules and regulation of the contract & information of GR slip and if correct park it into the system (SAP). At account department manager cheque that bill and if ok, then pass it for Payment. Payment of freight bill are made from Kandavli(Mumbai).

COLLECTION

BUYER TRANSPORTER

WAREHOUSE SUPPLY

SUPPLIE RR SCPC

PARTIES INVOLVED IN SUPPLY OF MATERIAL

MATERIAL MANAGEMENT MODULE

It is the most important module of M&M as it manage the vital part called material. First of all the masters will analyze and research the market conditions, on the basis of their survey they make planning of future requirements. Then each plant will make their individual plan according to their master plan. INDENT: all the department of an organization prepare Indent (means their requirement) of material. APPROVAL: this indent (requirement) is to be compared or matched with planning made prior, accordingly approval is passed. QUOTAION INVITATION: The required details of material is to be quoted such as price, quantity, part no., etc. PURCHASE ORDER: then the acquired result through quotation is to be implemented in purchase order, a separate department SCPC is there to prepare purchase order, who make it as per the requirement of all the department, and then place the purchase order with the vendor. This purchase order is checked, signed or sanctioned by an authorized person as a part of internal control.

 MATERIAL RECEIVED: when the order is received and accepted by the vendor, the vendor send the required material to M&M as per the contract held between the buyer (m&m) and the vendor.

Types of material:-

There are generally two types of material purchased by the company, i.e. Direct Material Indirect Material.

Direct Material:- Direct Material are those material which are real tractor parts. Those material which are mainly required for the manufacturing of tractors, are come under direct category such as transmission, engine, VTU, steel body etc.

Indirect Material:- Variety of material which is not considered as a part of the tractors like sterrings, tyres, bolts etc.

FLOW OF MATERIAL:

PCS(physical count slip

GR(Goods receipt)

QUALITY CHECK

UNRESTRICTED USE STOCK

UNDER INSPECTION

BLOCK

PCS GENERATION (Physically Count Slip):

When the material reached at the factory gate, proper recording of material is done through a transaction called Physically Count Slip, the PCS is generated at the gate after which the material is entered for further Processing. PCS generation and all the other transactions are made in a software called SAP. A code or a transaction of SAP to generate PCS is MIGO.

If suppose the goods being transferred through the other plant of M&M, it is called plant to plant transaction handled by IUTN head. In this case the PCS is not generated at the gate but the stamp is punched,&directly GR will be punche and the record is maintained in a register. Now the further handling of IUTN is made inside the plant, regarding the PCS and GR preparation

1. INBOUND DELIVERY:When ASN no. not given by supplier then there is a need to create inbound delivery. ASN no. means that supplier has put that material into the SAP already. So in that case firstly there is a need of creation of material in inbound delivery and then only the PCS will be generated. Transaction Code used for inbound delivery:-

VL31N

The page will open consisting of various details like-

Vendor Purchase order no.

WHEN LOG ON THE SAP the following screen will display:

Send the no. to MIGO Good Receipt Inbound deliver Inbound no.

Click in PCS detail

When select VL31N the below screen will display

We have to enter this PO no. and execute it, then the list of various part no. of material is open select the desired part no. matched with the invoice then enter and save the quantity mentioned in invoice. Hence the inbound no. is generated which is reflected below the screen. Then open a new session in SAP, enter MIGO and fill the necessary requirements regarding PCS. The whole process of PCS punching would be more clear with the procedure given below:

Fill the required information:

Enter Purchase Order no

The following screen will display:-

Then again open

Select from here the MIGO,

The following type screen will display:

Send the no. to MIGO

Good Receipt Inbound deliver Inbound no.

Click in PCS detail

Enter the following detail

Invoice no. Invoice date and time LR no. Octroi receipt/form31 Transporter name Click ok Click check Save Item invoice amount excise amount LR date octroi receipt date vehicle no.

Getting PCS no

2. GOODS RECEIPT:
For this, when ASN no. is given in then Send the no. to MIGO Good Receipt Inbound deliver ASN no.

Click in PCS detail

Then same process will be followed as in inbound delivery.

GR PUNCHING
GR punching is done in MIGO command ZM3A- Use for sort out the list of pending material

MB51-for getting the detail of material by entering the part no. Open MIGO in SAP, select GR blocked from the icon, select material Document from the other icon , then put PCS no. in the box, enter or Execute it, check whether the part no. is of v0 or v1 type if v0 then non Excise option will be selected, when v1 is there then only capture option is to be selected.

Put any no. in excise invoice and click enter, again choose only capture option if v1 is there, click enter, check PCS details, click on item OK, enter and post it, hence GR is generated, note the GR code on the invoice which is reflected on the screen. The procedure of GR generation in both the cases are almost the same except the checking of v0 and v1 code for excise amount which is in the case of IUTN. As the GR is generated certain entries are passed automatically in the system such as :

Purchase Local A/C To Purchase offset A/C

Dr

Inventory A/C To GR/IR A/C

Dr

MIGO( zmcl)

1. IN IUTN TRANSACTION:Goods receipt Outbound delivery

Put PCS no.

Check PCS & other details

Post

See option V0 or V1{V0-no excise, V1- excise}

Put any no. in excise option

Only capture in

Enter (GR no. will be generated). Format of GR Punching Invoice no. Excise invoice date time LR no. Octroi receipt no. Transporter name Counted by Item invoice amount excise amount LR date octroi receipt date vechile no invoice quantity

2. IN OTHER TRANSACTION:MIGO

Release GR

Material documents

Put PCS no.

Enter

Item ok

GR generated This type of screen appeared:

GATE EXIT OF THE TRANSPORTER

1. The unloading of the material will be based upon the contract between transporter & the buyer. 2. After unloading the material the transporter take the one copy of each document with it and exit the factory gate. 3. Then transporter hand over those documents to the employee at transporters office.

4. Transporter make the bill and send to the plant office, but in M&M.Rudrapur transporter send the freight bills to the Mahindra Logistics.

5. Mahindra logistics send those bills to the M&M plant Rudrapur.

QUALITY INSPECTION

QUALITY ASSURANCE DEPT.

SQA
(SUPPLIER QUALITY ASSURANCE)

RQA
(RAW MATERIAL QUALITY ASSURANCE)

IHQA
(IN- HOUSE QUALITY ASSURANCE)

QUALITY CHECK

OK (312) IF OK

BLOCK (350)

STORE (311)

FURTHER CHECK(343)

IF REJECTED (122)

LINE (261)

SUPPLIER

STOCK OUT

QUALITY REJECTION BY SPECIFIED DEPT.

There are specific parameters prescribed by quality department Kandivli, Mumbai on the basis of which inspection process will be carried out. Various departments perform their activities on the basis of these parameters.

Activities performed by various departments are as under.

SQA: 1. Firstly the quality inspector will reach to the supplier place. 2. He will properly analyze the techniques and resources used by the supplier and prepare a report accordingly. 3. This report will be submitted to the head of the department. 4. If the head is not satisfied with the quality of technical aspects of supplier, he advice the supplier to change their techniques. 5. If supplier does not pay any attention, then the further dealings with the supplier will be stopped. 6. And the vendor will be blocked in SAP.

 RQA: 1. Quality inspector take some sample from the material received from supplier. 2. He will prepare the report on the basis of specified parameters, which are specified by the common meeting of the production department, engineering specialist etc. 3. This report will be submitted to the head of the department. 4. If any deviation will be found then that material will blocked and rejected. 5. If rejected material can be improved by supplier then that improved material will be used otherwise send back to the supplier.

Sometimes buyer will make improvement in the defected material supplied by supplier on its own cost in order to continue the production process, and later on debit the supplier account with the same amount. If repeatedly, supplier will supply improper material then also the supplier will be blocked. After the accomplishment of the activities of both the above departments the material will handover to the dock.

 IHQA: 1. of Tractors 2. If the line man will found any defect in the material he is Now the line man will use that material for the production

using, he may inform the head of the quality department regarding the defect. 3. And the material is to be rejected.

Sometimes payment to the vendor has already been made on his account and later on the material he supplied may found defected, in that case paid bill can not be recovered, but the present unpaid bill of that vendor regarding the same part no. will not be paid equal to the amount of that improper material. Except In-House Quality department all other departments can block the vendor. Line rejection Rejection meeting on daily basis After reviewing decision will be taken on supplier rejection, process rejection and transportation rejection Entry of material in rejection file Collection of material which has send back to supplier Booking of material in system Packing the material

BILL PARKING (SCPC department)

Bill parking means the entry of the freight bill into the SAP. Parking person properly check the bill on the basis of terms and condition of the contract. If any change will be made regarding charges, then hard copy of this Alteration should be dispatch & reach to the parking person as early as possible by the head dept. (Kandavli).

PROCESS OF PARKING
Log on SAP

User Id & password

Put transaction code ZFLK

Fill the details

Execute

Parking no. generated

When SAP will be log on & User ID put, Then following screen will display-

Fill the required information : Amount of specific mode of transportation against it. Vendor code. Text code- it helps in processing further steps regarding tax & Cal tax should be tick. After that execute this. The below screen will displayed:_

Document 440792158744 means here the parked no. In this 44 is the company code. This parked no. will put on the bill for reference. This parked bill will be send to the account dept. for passing.

Things which are very important to be considered in parking the bills are:-

1. Invoice no. 2. Mode & type of transport. 3. LR no. & total no. of LR. 4. Freight charges per Kg. 5. Loading & Unloading charges. 6. Any extra charges (in case of collection of material from supplier other than M&M supplier. 7. Lorry charges (Rs. 10 per lorry) 8. Any penalty or detention charges, if applicable.

Some other important things regarding bill parking

transit time.

In road transit dispatch date will be excluded in calculating

 transit time.

In other transit dispatch date will be included in calculating

Service tax will be applicable on airways mode of transport only. For each party there is separate code no. in which payment

regarding that party will be transferred. Less amount bill can be parked in which later on

supplementary bill can be parked, but bill of more amount will not be parked.

Other important terms: For modifying &changing any information- FBV2 Execute

Screen

Put parked no.

Execute

Screen display

Fast data entry

Execute

Make changes

NOTE:- not all the details can be changed, like G/L code & amount can be changed but parked date cannot be changed.

For deleting any parked bill FBV0

In this when this transaction code will be put, it display all information regarding that parked bill, choose delete option and bill will be deleted.

 For checking SE16 will be used

SE16

ZFLRDETAIL

Screen (fill the required information)

Important note:for financial year 1st April to 31st March in M&M Ltd., bill of date after 27th March will not be parked in that year, it will be parked for next year.In this case against invoice no. next year will be put.

T r e n d o f B il l P a r k e d
700 600 500 400 No. of parked bills 300 200 100 0 J u n J u l y A u g S e p tO c t N o v D e c J a n F e b M a r M o n th

This trend shows the increasing efficiency of the parking person and also helpful for finding reasons in case of low no. of parking.

BILL PASSING
Bill passing is the process performed by the account dept. Here the bill which are already parked into the system(SAP) are passed for payment. As we any bill will be made for payment only, when it is passed by the account dept..Account dept with the reference of freight contract check the bill and if OK then passed it for payment. Here account person put the parked document no.into SAP and it will display the information regarding that bill. With help of this transporter account will be credited for payment, which he get from Mahindra Logistics.

PROCESS:SAP Log on

User ID

FBL1N

Parked bill list

Vendor selection

Open item

Put date

Tick parked item

Execute

After execute, a screen will displayed which contains the all information regarding the parked bills i.e.- date, vendor code, amount, tax code etc. After this select the row as per need. Export this to the spreadsheet show, this may help the user. Check the information, and if all is correct then post that bill.

After posting, the entry will be passed:-

Freight A/c- Dr. To transporter a/c

For transferring into Vendor a/c Fbv0 For display all financial document, which has been set-up in the contract Fb03 For display the tax amount FT For clear the account of open vendor F44 With this entry, transporter account will be credited to that amount and Payment for freight charges will be given to ML from Kandivli(Mumbai) & ML paid to transporters.

SOME IMPORTANT DOCUMENT USED IN TRANSPORTForm 16 Lorry receipt Pick-list Form F & C

PAYMENT PROCEDURE

Finally after performing the whole process of Bill Passing, now the time comes for its payment. The bill is ready for payment after it has gone successfully passed. The payment is being made as per its due date,which is mentioned in the invoice.Payment is made to the vendor and for other expenses incurred for running the day-to-day expenses. Separate set of transactions are used for making payment in both the cases.

Below is the chart showing the transactions used in payment to vendors and payment for Expenses.

PAYMENT

General Expenses F-02 Transaction code Expenses a/c - Dr. To Bank a/c Entry MC Document Type Zmck Cheque Printing FCHI Transaction Code for display the list of printed cheque Zf10 Advice

Vendor F-53 Expense a/c Dr. To Vendor a/c ZK Fbz5 FIHI

Automatically with cheque

1.Manual cheque payment:

Put transaction code : F-02(for payment of expenses) The below screen will displayed

Fill document date , Document type ,Company code, currency rate.Posting date,Period Refernce no.- shown in bill First line item- Pstky shows the debit/credit &for debit the general expenses 40 will be used.Account no. shows the no. of receive. First line item entry passed execute document generated &automatically

Expenses a/c Dr. To Bank a/c

Cheque printing:
Transaction code Zmck

In this all information will be displayed: Company code, Fiscal year, House bank, Account Id Fill them and execute Then click on print option & put the on the printer. Cheque issued by Bank to make payment, entry of no. of cheque given to account dept. is maintained by bank in its books. For display the cheque lots Fchi For cheque register Zf53

2.Vendor cheque payment: Put transaction code : f-53

Fill the following information:

Document date, type, company code, Bank data etc. Special G/L item

Process open item {screen will displayed, fill in that assignment (cheque no.), text (party name)

Document

stimulate

After stimulation entry will be generated:

Expense a/c Dr. To vendor a/c

Like this

 For check printing fbz5

After this fihi transaction code will be used to display cheque lots. With the help of this the payment will be made to the specific party In M&M ltd. Rudrapur, payment only for indirect material will be made, other payment are be made from the M&M ltd. Kandivli.

Chapter 4: Freight cost analysis & findings An analysis Findings

FREIGHT COST ANALYSIS

YEAR AMOUNT OF FREIGHT

2007 25 crores

2008 30 crores

Above data shows that the cost of freight has been increased in 2008 in comparison to 2007. Generally it will be treated as a bad signal that cost has been increased, but it not be necessary, and supported by the following reasons:

REASONS FOR INCREASE IN FREIGHT COST Increase in the production volume. Faster mode at time of emergency in order to avoid the situation of less or no production. Sometime increase in the detention charges, which arises on receiver when he will not unload the material at time . Hike in Oil Prices

As the production of the plant has been increased, so rise in freight cost is not a bad signal. On the other hand, it can not be ignored that sometime improper management may also lead to the rise in the cost.

FINDINGS
The freight process applicable in M&M ltd. Rudrapur, is very effective. The processes to be followed are clearly laid down and the authority at every level is well defined. The planning as well as the utilization procedure norms are clearly laid down and are followed to a large extent by all the units concerned.

It greatly helps in cost controlling. The result of this is that last year Account dept. has won the AKRAMAN award for cost saving.

Infact whole process is good, but due to some small loop-holes better results are bared.

Some small problems are:

As we discuss that freight bill passing is a manual process, so it may contain some manual errors like slow speed, incorrect parking due to mistake etc. Cheat by transporter regarding weight & quantity Late receiving of bills. Double invoice by transporter. No document in SAP for unloading of material.

Chapter 5: SUGGESTIONS & PROSPECTIVE PROCESS

Suggestions

Prospective process regarding payment for material

SUGGESTIONS
Dont wait for the best idea, Implement the better one, Still better and the best will follow.

There are certain areas in which the system can undergo improvement. The suggestions will come from the users themselves. But some suggestions according to my research are:

PCS should be generated timely Firstly, try to automate the freight bill passing process. In manual process, random sampling of the bills of the transporter will be done in order bared the fraud. In random basis, GR. Information will matched with bills so that transporter have Some fear, due to this they not try to cheat. The authorized person should rectify the mistakes immediately and inform the vendor about the same, hence the bill passing follows. As we know that freight is a very important part of cost of production, so if this cost can be controlled the overall cost of product can be

minimize, and it results in better profit generation for the company. The image of company will also be increased.

PROSPECTIVE PROCESS

At the time of entrance of material PCS must be generated at gate no. 1.

Gate entry stamp should be placed invoice copy. When material will enter into factory gate the PCS should be generated immediately.

In order to verify goods receipt into store GR should be punched within 24 hours after PCS generation.

It is essential that the invoice must be submitted to the SC within 2 days after generation of GR.

SC person should properly check the received bills and if no error is found then pass the bill for payment within 3 days.

In case of any error like tax condition, rate difference, tax code etc. the bills should be return to the buyer within 24 hours of its receipt with reason.

Chapter 6: CONCLUSION AND LIMITATION OF THE STUDY Conclusion Limitation

CONCLUSION

At last I would like to conclude that there is lot of difference between the Theories and Practices. This Training enables me to understand the aspects of professional life.

On the basis of the above facts and data, it can been concluded that MAHINDRA & MAHINDRA LTD. posses a well- defined bill- passing process, along with increase in the revenues. But it lacks in reducing the freight cost, which is very essential for any firm.

An effective process is followed at MAHINDRA & MAHINDRA LTD. but it would become more valuable and impressive by implementing certain efficient measures.

LIMITATIONS OF STUDY
1. 6 weeks were not enough to understand the Transportation activity of an organization. 2. Some of the information might not be given correct up to an extent, due to confidentially of data by the employees 3. We are unable to measure the quantitative aspects of the company. 4. Inability & unwillingness of the employees to provide information. 5. Taking into consideration the aspect of safety of trainees, they were not taken inside the Assembly area as the noise pollution over there was very high. Due to this we were unable to properly understand the assembling of Tractors.

BIBLIOGRAPHY Books considered:D K AGRAWAL- logistics and Supply Chain Management Ballou Ronald H. Basic Business Logistics Chopra Sunil and Pete Meindli Supply Chain Management Raghuram G. and N.Rangraj Logistics and Supply Chain Management

Mahindra & Mahindra Journals and Magazines. Mahindra & Mahindra Manuals

Website: www.mconnect/pages/default.com www.mahinda.com