1

SUMMER INTERNSHIP REPORT

Submitted to:-

Mr. Sanjay Basu

Key Account Manager

Sigma Supply Chain Solutions PVT. LTD.

Submitted by:-

Yogesh Chandra

For completion of

MBA (Logistics & Supply Chain Management) – 2009 – 2011

University of Petroleum & Energy Studies, Dehradun

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TABLE OF CONTENTS

Acknowledgement

Certificate from Guide

Certificate of originality

CHAPTERS Page

Introduction………………………………………………………. 6-12 Company profile…………………………………………………... 13-16 Warehouse management………………………………………….. 17-32 Key performance indicators……………………………………… 33-43 Findings & Recommendations …………………………………… 44-45 Bibliography………………………………………………………. 46-47

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ACKNOWLEDGEMENT

Behind every study there stands myriad of people whose help and contribution make it successful.

It has been a remarkable experience of satisfaction and pleasure for us to work out our project under the supervision of the Key account manager, Mr. Sanjay Basu. We are really thankful to him for his valuable guidance and co-operation during the project work.

We have also benefited from discussions and would also take the opportunity to thank the persons of the company for their valuable support and assistance whenever and wherever needed. A cordial and encouraging environment made it very easier for us to complete the project.

So this project is a humble attempt to earnestly thank them and all those who were directly or indirectly involved in preparation of this project.

Yogesh chandra

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CERTIFICATE FROM THE GUIDE

This is to certify that Yogesh chandra has undertaken the project titled “Analysis of KPI” for their summer internship and have successfully completed their project under my guidance and supervision. They have made their best efforts to complete this project.

Further I would like to declare that this project is original work and has been prepared solely for academic purpose.

This project has not been presented in any seminar or submitted elsewhere for the award of any degree or diploma.

I wish them best of luck for their future.

Date: Sanjay Basu

Key account manager

Sigma supply chain solution PVT LTD

C-75,1st floor, sector-4

Noida-201301

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CERTIFICATE OF ORIGINALITY

This is to certify that the project titled “Analysis of KPI” is a work of the students and is being submitted in the partial fulfillment for the award of the Master Degree in Business Administration from “Sigma supply chain solution PVT LTD.” for the fulfillment of the requirement of course of study. This report has not been submitted earlier in Sigma supply chain solution PVT LTD or any other organization for the requirement of a course of study.

1.

Yogesh Chandra

Sanjay Basu

Key account manager

Sigma supply chain solution PVT LTD

C-75,1st floor, sector-4

Noida-201301

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CHAPTER-1

INTRODUCTION

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Introduction to Supply Chain Management

A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply   Chain   Management  spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).A simple supply chain is made up of several elements that are linked by the movement of products along it. The supply   chain  starts and ends with the customer.

Activities in a Supply Chain Management

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

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

Strategic network optimization, including the number, location, and size of warehousing, distribution centers, and facilities.

Strategic partnerships with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.

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Product life cycle management so that new and existing products can be optimally integrated into the supply chain and capacity management activities.

Information technology infrastructure to support supply chain operations. Where-to-make and what-to-make-or-buy decisions. Aligning overall organizational strategy with supply strategy.

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

Sourcing contracts and other purchasing decisions. Production decisions, including contracting, scheduling, and planning process

definition. Inventory decisions, including quantity, location, and quality of inventory. Transportation strategy, including frequency, routes, and contracting. Benchmarking of all operations against competitors and implementation of best

practices throughout the enterprise. Milestone payments. Focus on customer demand.

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

Daily production and distribution planning, including all nodes in the supply chain.

Production scheduling for each manufacturing facility in the supply chain (minute by minute).

Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.

Inbound operations, including transportation from suppliers and receiving inventory.

Production operations, including the consumption of materials and flow of finished goods.

Outbound operations, including all fulfillment activities, warehousing and transportation to customers.

Introduction to logistics

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Logistics is the art and science of managing and controlling the flow of goods, energy and information.

The term logistics have evolved from military's need of spare part supply, but is now widely accepted to include activities like purchasing, transport, warehousing, organizing and planning of these activities.

In business, logistics may have either internal focus, or external focus covering the flow from originating supplier to end-user, see supply chain management.

In military, logistics experts manage how and when to move resources to the places they are needed. In military science, maintaining ones supply lines while disrupting those of the enemy is a crucial, and some would say the most crucial element, of military strategy.

There are two fundamentally different forms of logistics. One optimizes a steady flow of material through a network of transportation links and storage nodes. The other coordinates a sequence of resources to carry out some project.

Origins and definition

The term logistics comes from the Greek logos (λόγος), meaning "speech, reason, ratio, rationality, language, phrase", and more specifically from the Greek word logistiki (λογιστική), meaning accounting and financial organization.

Logistics is considered to have originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, military officers with the title Logistikas were responsible for financial and supply distribution matters.

Logistics management as a part of supply chain management

Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements. A professional working in the field of logistics management is called a logistician.

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The Chartered Institute of Logistics & Transport (CILT) was established in the United Kingdom in 1919 and was granted a Royal Charter in 1926. The Chartered Institute is one of the professional bodies or institutions, for the logistics and transport sectors, that offers professional qualifications or degrees in logistics management.

Third-party logistics

Third-party logistics involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, third-party logistics includes any form of outsourcing of logistics activities previously performed in-house. If, for example, a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. Logistics is an emerging business area in many countries.

Fourth-party logistics

The concept of Fourth-Party Logistics (4PL) provider was first defined by Andersen Consulting (Now Accenture) as an integrator that assembles the resources, capabilities and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third party logistics (3PL) service provider targets a function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor who manages other 3PLs, truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer.

Supply Chain Practices in India

Today, business giants from all over the world are heading towards India because they see it as a potential emerging market with a very large population and rapidly developing standard of living. But still they find it very difficult to manage their supply chain efficiently and effectively because the concept is still fresh for the country and many of the supporting activities are not developed to the international level. This is why companies are very concerned about each & every supply chain decision and are making their best efforts to design a supply chain that can cope with the business environment of India with minimum costs & maximum profits. To

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explain this further, we can take the example of some foreign as well as Indian companies that designed a totally different supply chain model for India and are running successfully.

Dell computers

Dell is one of the largest selling computer brands around the world and excellent supply chain model plays a major role in making it successful. Different from other computer brands, Dell gives its customers to customize computers according to their requirements on its website, i.e. dell.com and they are home delivered with the same, apart from this Dell has integrated its suppliers with itself so that they can see each and every customer demand by accessing to the same website and deliver necessary raw material as fast as possible, this means Dell has removed the distributors and retailers from its supply chain resulting into cost reduction and customer satisfaction. But in India, Dell along with applying this supply chain model has also applied the distributor – retailer model because it is aware about the Indian consumers who are not that comfortable making online purchases, they would not buy a product like computer without actually having a look at it and checking it, whichever may be the brand.

Asian paints

It is one of the biggest paint brands in India and has a long success story of becoming the customers’ favorite. Its plants are geographically widespread over the country. Such widespreadproduction network enables Asian paints to reach maximum number of dealer’s which in turnleads to high market penetration. The Company also has a short and efficient chain of distribution. The overview of APL’s supply chain is as follows:-

Now, Asian paints is in a position to try new and innovative supply chain practices because it holds a major market share. Some of the best examples of Asian paints’ innovative supply chain model are: -

Color world- In this, the customer can make a color of his choice at the Asian paints store near him and get the desired quantity delivered to him at the same time. Actually what happens is that the store is supplied with adequate amount of the basic mix used in paints and large variety of colors separately, when a customer makes a color of his choice the store staff mixes it with the base and prepares the desired quantity.

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Home solution – Along with selling paints in colors of your choice the company also gives you an option of getting your house painted by its well trained staff, the cost might be high but the level of satisfaction is higher.

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CHAPTER-2

COMPANY PROFILE

INTRODUCTION

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Sigma Supply Chain Solutions is a brand name in the field of logistics and its activities cover the whole spectrum of air, sea and land services. The major activities of the organization cover various disciplines of cargo handling including freight forwarding, customs clearance, transportation and material handling, warehousing and inventory management

Expertise is playing an increasingly important role in global logistics - knowing what and how to do at each point in the logistics chain. Over the years, given our association with various companies, we have build up an expertise in handling logistics for time sensitive cargo. This has also enabled us to have an overview of any logistics problem enabling us to plan ahead and formulate solution best suited for the client’s requirement.

Sigma Supply Chain Solutions is a logistics service provider company for various clients both in India and abroad and its activities cover the whole spectrum of Air, Sea and land services. The major activities of the organization cover various discipline of cargo handling including, warehousing and warehousing management.

Expertise is playing an increasingly important role in global logistics-knowing what and how to do at each point in the logistics for sensitivities as well as heavy cargo.

In providing service, the aim is to develop an efficient professional approach in meeting requirements lay before the company and formulate a service package that would be ideal to the customer’s interest, specification and budget.

Mission Statement

1. Excel in logistics domain.2. Provide cost efficient supply chain solution for better capex and opex management.3. Customer delight by providing excellent service.

Areas of Interest

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The company is proud to claim that they are using right mix of experienced team’s knowledge with the appropriate technology to make sure the job is done right at the first time. The company can provide true seamless start-to-finish outsourcing.

Infrastructure

SIGMA has its offices at various locations. The offices are spacious, clean and hygienic. The offices are equipped with the state of art facilities for communication. The warehouses are spacious and are also equipped with computer and communication facilities including fax, internet etc to facilitate instant, efficient and reliable interoffice communication.

Manpower

Trained young and dynamic core team of professional staff ensure fulfillment of high services standards in line with the requirements of the client. Solidly supporting this frontline is a group of experienced office coordinators who efficiently do the ground works with documentation, interpretation, planning of movements, communication and pre and post shipment procedures including generation of regular MIS reports. The top management is always available and in full command of the day to day operations and are accessible to provide support as and when required.

Services Offered

Services offered by the company are as follows:-

1. Custom clearance:- Well trained and approved custom clearing staff enables precision and efficient clearance of goods through custom enabling consignee to receive goods in shortest possible duration.

2. Completion of all post shipment formalities and endorsement enabling clients to complete their commercial transaction without hindrance.

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3. Duty drawbacks/refund and other export benefits.

4. Transportation: - The size of transportation fleet and range of transport services enables the required goods to reach right place on time- always, irrespective of the package and the nature of goods.

5. Planning and controlling transport including intermediate storage backed by a competent staff with high level of expertise.

6. Manpower supply- The Company is able to supply competent and well trained staff to handle customer own equipment like cranes, forklift, trucks etc.

7. Overseeing and undertaking turkey logistics for industrial projects including feasibility studies, route surveys, movement surveys, movement permission, packing, supervision of shipping operation, loading, unloading on site deliveries as well as updates on projects implementation and appraisal are other activities carried out by sigma.

8. Warehousing:- A well developed system and procedure for planning and controlling storage means the customers have more control over their goods without actually worrying about how to do it and at the same time allows them to minimize their inventories cost. The warehouse services provided by the company includes transportation, pick and pack operations, labeling, packaging, inventory control, just-in-time inventory management, pallet exchange services, local trucking and local drayage, stretch and shrink wrapping, quality control, lot number control, import and export handling, containerization and pool distribution.

9. Projects: - Whilst fundamental services is the same for general and project forwarding, there considerable call on the professional forwarders in the roles of forward planning, coordination, reporting, advice and recommendation.

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CHAPTER-3

WAREHOUSE MANAGEMENT

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WAREHOUSE

What we understand from the warehouse is that it is one of the strongest links that helps in providing products to the customer ensuring on time delivery. Warehouse is that part of the Logistics management that not only performs the function of storing goods, but also provides safety to goods avoiding any sort of damages. It’s the warehouse that eliminates the gap between demand and supply, by ensuring proper level of inventory of finished goods.

Objectives of Warehouse

The major objective of a warehouse is to give the storage support to the goods flowing from manufacturer end to the customer end, or from customer end to manufacturer end in case of return of goods. This storage of finished goods ensures the safety of goods, so that the goods can be delivered to the customer in the right situation. Other then storage, today’s warehouses are performing some value added functions like: -

Providing proper packaging to the product, for the purpose of providing safety to the in transit goods.

Assembling the goods so that small parts can be clubbed and can be delivered as a single product that ultimately saves the distribution cost.

Layout of Warehouse

Designing the layout of the warehouse is the most crucial factor, but it is that factor that makes any warehouse efficient enough to carry out its operations. Today in such a competitive era layout of the warehouse should be designed keeping the following factors in mind: -

Smooth movement of the goods Flexibility in terms of storage of the goods, which can lead to the reduction in the cost of

investment in the facilities Propere illumination should be taken into consideration

Material Handling Equipments

Material Handling Equipments often called as MHE’s are used in the warehouses for the purpose of lifting, storing and moving goods from one place to another within the premise of the warehouse. These MHE’s can be Manual, Automatic or Semi-Automatic. These MHE’s can also be in the form of mini-trucks used for lifting and moving of the heavy items. Today robotics

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MHE’s has created revolution in the field of moving goods in the warehouses. They are programmed in such a manner that they can work without any human involvement, that ultimately saves time, energy, and cost. Some of the MHE’s are:

(a) Forklift(b) Cranes.

Sigma supply chain solution Pvt. Ltd. Provides warehousing services to following clients:-

1. Indus towers: - Indus Towers Limited provides “Shared Telecom Infrastructure” services to all telecom operators in the wireless space and other wireless service providers such as broadcasters and broadband service providers. Our commitment towards continuous innovation endeavors, optimization of future tower rollouts, enhanced operational efficiencies –leading to substantial cost savings for its customers.

Guidelines for Warehouse Management by Indus towers: -

Objective

To lay down the procedure & guidelines for Warehouse Management this includes the

following details

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1. General Guidelines Building & Floors Storage & Stacks Material Handling Equipment House Keeping & general

2. Electrical Safety Guidelines 3. Fire Safety 4. Warehouse Selection5. Warehouse Evaluation6. Warehouse Key Performance Indicators7. Warehouse lease deed - Sample

Applicability

All Indus Warehouses across India.

General guidelines

Buildings & Floors

Ground Floor storage WH to be taken and distance between any two Facing Warehouses not to be less than 15m.

The storage building height not to exceed 15m in height and ceiling height may not exceed 7.5m and should not be less than 3.5m.

No seepage of water from ceiling or walls.

The warehouse to be suitably painted /white washed from outside/inside.

Proper Drainage Facility to be provided along the side of each building.

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Adequate ventilation of building to be provided. Windows, if any, not to be obstructed. Adequate illumination to be provided in storage area. Use of natural lighting to be made to the extent possible.

The floors to be of adequate strength and suitable for the operations of the material handling equipment (Cranes/Hydra etc), preferably industrial flooring to be used and without any slipping & tripping hazards, maintained in good condition.

Open Area of the Warehouse to be suitably fenced on all wall & corners to prevent any pilferage / theft with a total height not less than 10 ft.

Risk assessment for unauthorized entry and sabotage to be carried out and actions to be implemented.(Especially relevant to warehouses in isolated / individual locations )

Storage & Stacks

Suitable and safe arrangements to be provided for loading/unloading of material from truck/container. Fall arrestor, safety harness to be provided where employees are required to work at a height.

Suitable aluminum/steel ladders to be provided for Stacking/de stacking Operations (wooden/bamboo ladders not acceptable).

Movement passages in closed area to be uniformly demarcated by yellow painted lines.

A clear gap of min. 1ft. to be kept between walls and storage area and between two stacks.

Suitable gap to be there for the removal or transfer of materials

Materials to be stacked such that o These are not projecting out from stackso Stacks are stable, bonded and stack height does not exceed the Stacking

Norms provided to the WH Team.o Internal spread of fire, if any is minimal and they are easily accessible for

fire fighting and salvage operations.o Demarcation of area to be done – Item wise / Category wise (SRN /

Damaged / Insurance, etc)

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Material Handling Equipment –

Drivers of material handling equipment to hold valid driving license or authorization to operate the equipment.

Vehicles not to be allowed to stand inside building with engine running in idle condition.

Housekeeping & General

Good housekeeping to be maintained at all times.

The warehouse and compounds to be swept clean everyday

Metallic scrap bins with covers or concrete pit on ground to be made at a finished place to collect all the waste materials like empty packing boxes, waste material etc.

Potable drinking water facilities and hygienic toilet/urinal facilities to be available for employees and these are to be maintained in hygienic condition at all times

Following should be displayed :

o Outside the WH : Name of the Co. with Proper ST No and Regd No. alongwith c/o (Service Provider’s name and address) : In English and Local Language

o “No smoking in Warehouse”.o Proper Signage inside the Warehouse for each item and categoryo Fire Escape / Exit path o Crisis Management Board indicating Main Contact Phone Nos. like Circle SCM

rep, Police, Fire, Ambulance, Service Provider (WH Incharge), etc.o Warehouse Layout Board near the Entrance & Notice Board outside the

Officeo First Aid Box to be maintained under custody of Warehouse Team

Every warehouse to be thoroughly inspected before it is finally closed for the day and office area and Warehouse closed area should be sealed by the authorized warehouse representative with signatures. Before opening the Warehouse next day, seal to be checked by the Security and Warehouse representative and time of opening and closing of the Warehouse to be entered in the Security Register.

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Adequate exhaust fans to be provided

Electrical & Safety Guidelines for Warehouses

Safest warehouses are the ones which use minimum electrical fittings inside the Warehouse with all control panels / distribution boards etc. kept out of the warehouse.

Maximum use to be made of natural lighting and ventilation. If electrical lighting is still required, the light fittings to be of enclosed type and bare lamps, incandescent, fluorescent or metal vapor not to be used.

Light fittings to be located only on the walls or directly above, in aisles / walkways centers where any failure would not affect stored goods.

All wiring to be enclosed in metallic conduits. The panels and all lighting control switches to be located outside the warehouse. All wires to be along walls or on ceiling above aisles / walkways and not over storage areas.

All installation work to be carried out only by valid Electrical contractors.

Detailed Checklist covering at least the following to be available.o Continuity checkso Earth pit resistance measurementso Checking for tightness, excessive heating and corrosion of all terminations in

panels and light fittings, switches

Competent electrical contractor to carry out these checks at least once a year. These checks to be documented and values recorded.

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Fire Safety

Comprehensive Emergency plan to deal with incidents of fire etc, to be displayed at prominent locations. Emergency plan should cover the following information :o Actions to be taken by the staff in the event of emergency during working

hours, and during night or non working hourso Chain of command during the emergencyo Important telephone numbers o Floor plans indicating locations of fire extinguishers, escape routes, etc

Adequately trained security team to be available in the premises at all times, to prevent pilferage, thefts, vandalism, violation of fire protection rules, use of alcohol and / or drugs etc. both by employees and outsiders.

Each Warehouse to have adequate flood lighting (during night) and adequate control over entry, exit of people, material and vehicles at all times.

All employees, security staff and contractors’ workmen to be given adequate training in Fire precautionary measures, fire hazards in the unit, actions to be taken in case of fire and similar emergency, use of fire extinguishers, escape routes, raising alarm, fire alarm codes, assembly points, evacuation procedures etc. and records to be kept.

Regular fire drills (at least once in six months) to be conducted and records should be maintained.

Each Warehouse must be provided with adequate nos. of portable fire extinguishers. All extinguishers to bear ISI certification mark and should be checked at regular intervals so that the expiry date is not elapsed.

All Fire equipment to be located at easily accessible & conspicuous places, visible from distance and kept free of obstructions

Fire equipment (except trolley mounted) to be placed on walls or platforms or in cabinets

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All fire points background to be painted with red and black strips. Symbolic signs to be used for identification of fire point locations. Location indicator arrows should be provided along with the symbols wherever the fire points are not directly visible from distance.

Floor below& in front of fire points to be clearly demarcated by yellow and black hatched lines. (In parking areas a physical barrier to be considered)

All extinguishers to be given a serial number by which it shall be referred to in records. The following details should be available on the body of each equipment

Serial Number Date of last refilling Date of last inspection.

All fire extinguishing equipment to be subjected to regular, inspection, maintenance and testing, and be maintained in good condition. Records of maintenance to be available

Maintenance and testing to be carried out by a competent agency

Warehouse Selection

The description given below explains the process to be followed for Warehouse Selection:

S No. Description Responsibility Timeline

Start Point: Receipt of Request from Circle SCM team

End Point: Selection of Vendor/ Service Provider

Updating Vendor Master

Handover of vendor details to the Circle SCM team

1.

Based on the annual planning of Circle Deployment/O&M team, Warehouse area requirement is Finalized by Circle SCM Head

Circle SCM HeadAs and when required

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in consultation with Corporate Warehouse & Logistics team.

2.

Based on the approved requirement Circle SCM head shares Warehouse RFP to shortlisted vendors after initial discussion, Visit to the Warehouse locations.

Circle SCM HeadAs and when required

3

Based on the RFQ response(minimum 3), Circle SCM Head shall prepare the Docket which includes the following items – 1.Comparative Analysis

2.Cost benefit analysis

3.Space Calculator

4.Warehouse photographs (to the extent possible) for all WH which are to be analyzed to be taken and sent to Corporate Warehouse & Logistics Head(wherever WH are built)

Circle SCM Head

Within 10 days after the closure of the response date

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Based on the data provided by Circle SCM Team, Corporate Warehouse & Logistics team analyze the request,

In case request is rejected and closed, then communication is sent to circle SCM team along with reasons of rejection. In case of rejection but for further consideration, the request may be generated again.

In case request is accepted then communication is sent to circle SCM team for site visit schedule along with Circle SCM Head

Corporate Warehouse & Logistics team

Within 4 days after the request is received

4 After Warehouse visit, Corporate Warehouse & Logistics team & Circle SCM Head complete the details as per annexure (\\10.240.10.15 scm…. Warehousing & Logistics…..Warehousing General

Corporate Warehouse & Logistics Head / Circle SCM Head

Within 5 days after the Warehouse visit

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Guidelines…..Warehouse Selection Criteria), finalize the commercials & jointly sign off.

5

NFA(Note For Approval) is made along with Requisition of Letter of Intent and the same is enclosed along with Comparative Statement and quotations in the WFM for approval from all concerned

Circle Logistics Head

Within 3 days after Finalization of L1 vendor

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NFA is approved from Circle SCM Head, Circle Finance Head, Circle Head, Corporate Warehouse & Logistics Head, GM-SCM, Chief-SCM, DGM-Corporate Finance, CFO, CEO(if required)

Circle SCM Head

Within 10 days of raising of NFA

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Legal agreement to be made as per Standard Agreement in coordination with Legal team and vendor and possession to be taken followed by shifting of material. Based on notice period, overlapping of not more than 1 month to take place for two Warehouses (Present vs. Proposed). Also, a Bank guarantee of at least 50 Lakhs to be taken for the stocks from each Third Party

Circle SCM Head

Based on terms and conditions of present Warehouse

Note: For Temporary WH till a period / renewal of 12 months, no site visit from Corporate required for Finalization of Warehouse. In case of renewal of lease of temporary Warehouse, approval from Corporate to be taken for renewal before the term expires. In case the renewal is beyond 12 months, fresh RFP to be floated and the entire process to be once again analyzed to look into the market conditions.

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Warehouse Evaluation

Procedure – Circle Logistics Head shall perform the evaluation of Warehouse on monthly basis, which includes Inventory, Infrastructure & transport related as per the attached annexure below (soft copy uploaded in SCM link - \\10.240.10.15 /scm). This activity must be carried out along with the physical verification process on a monthly basis. After duly signoff by the TPL representative (warehouse Associate),Circle Logistics & SCM Head ,scanned copy to be sent to Corporate Warehouse & Logistics team by 5th of every month.

Annexure 1

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CIRCLE : Date :

Weightage as per

points out of 100

Points Secured out of 100 based

on Weightage and Rating

Given by Auditor /

Self Rating

Weightage Points Secured Rating (0-5)

1TAT of Unloading of consignment (within 1 day of recpt) (% Service Level as per KPI to be seen for determining rating)

5 3

2TAT of Dispatch of consignment from the time of receipt of executable MRF(%Service Level as per KPI to be seen for determining rating)

5 0

3No Unexplained Stock Variance-Monthly Audit (Resolution before next audit, if any variance,otherwise no points)

3 0

4 Updation of all entries in Oracle (Recpts/Issues) 3 0

5 FIFO System Implementation / Material Handling 3 0

6Reports of daily "Stock" and other reports being updated in system given by HO (random check) and other periodic KPI reports

3 0

7Agreements pertaining to WH-(Rental,Service Provider), Secondary Transportation avaialble with WH and Manpower, others as per Agreement available

2 0

8 Defective Stock Ratio 3 0

9 Inititaive for liquidation of Non/Slow Moving/Ageing Stocks 3 0

10Stock Transfer (Random checking of process - Filing of Mails recd from Circle etc)

3 0

11Documentation to be maintained to confirm time taken for receipt/dispatch/delivery

3 0

36 0 0

S.no Activity

Weights

EVALUATION CRITERIA FOR RATING INDUS TOWERS CIRCLE WH LOCATIONS

PLS PUT RATINGS FROM 0-5 WITH 0 BEING THE LOWEST AND 5 BEING THE HIGHEST

Inventory Related / Documentation

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CIRCLE : Date :

a) WH Location 4 0

b) Adequacy of space (Covered+Open) 3 0

c) WH Infrastructure 0

RCC/Asbestos 2 0Height 2 0Drainage / Seepage 2 0Ventilation / Security inside WH Premises 3 0Surface of WH above Ground Level 3 0Approach Road to WH / Vehicle Parking 2 0d) Cleanliness & Tidiness 4 0e) Proper stacking & clear moving bay 4 0f) Clear demarcation between material / Saleable / Non Saleable / Site Return

3 0

h) Presence of Crisis Management Board, Notice Board, WH Layout Board, WH Address Board, First Aid Box, Signages inside WH

3 0

13Ageing Analysis Escalation on a fortnightly basis to Circle SCM Team (Ratio of Over 60 days stocks to total Saleable stocks)

3 0

14 Authorization List availability at the WH 2 0

15Documentation (Stock ledger, Inward/Outward,Excise related report,Security Register, Time taken for retrieval, etc)

3 0

16Infrastructure availability (Cranes/Hydra/Computer / Printer / Exhaust fans / Lighting / Water Dispenser in order)

3 0

17Maint.and training of Fire extuingishers and Security arrangements for the Warehouse

3 0

18Awareness / Attitude of W/H Incharge(Service Provider) and the WH Team & Co-ordination with Circle

5 0

19 Time taken to resolve querries / issues recd from users 3 0

57 0 0

20a) Secondary Transportation Arrangements / Management(Optimization of Transportation thru Route Planning / Proper Agreements)

4 0

b) No entry restrictions 3 0

7 0 0

100 0

Signature:

Name :(Indus Representative) (WH Representative)

Infrastrcture / WH Related

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Transportation Related

TOTAL

EVALUATION CRITERIA FOR RATING INDUS TOWERS CIRCLE WH LOCATIONS

PLS PUT RATINGS FROM 0-5 WITH 0 BEING THE LOWEST AND 5 BEING THE HIGHEST

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Warehouse Key Performance Indicators

Procedure – Circle Logistics Head shall provide KPI performance document after verification on monthly basis to Corporate Warehouse & Logistics team by 30 th of every month through Email with copy marked to Circle SCM Head & Circle Head.

S. No. Performance AttributeOperational Definition

TargetActual Performance for a month

1TAT for unloading of material (%)

LR unloaded within SLA /Total LR received during the month

8 Working Hrs

2TAT for receipt of material (GRN) (%)

GRN Update in Oracle within SLA (after unloading) /Total GRN update in Oracle during the month

2 Hrs

3 TAT for dispatch (%)No. of MRF executed within SLA /No. of MRF received during the month

24 working Hrs

4On hand Inventory - No of days

Present on hand inventory*30/planned inventory for next month (excluding O&M stock for both, for New Site, average cost to be taken as 7.5lacs and for Upgrade as 3.5lacs)

20 Days

5Stock Variance between Oracle & Physical (Nos)

Stock (units) as per physical audit /Stock (units) as per Oracle

0

6CIP Reconciliation Amount (in Cr.)

No CIP >90 days as per report existing in link 0

7Inventory slow/non moving (in Cr.)

Total on hand inventory cost which is greater than 90 day old as per oracle

0

8No of Receipts w/o Approved / amended PO for which GRN not possible

Consignment accept in warehouse without Purchase order

0

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Warehouse Performance Evaluation Procedure – Based on:

1. Evaluation Criteria,

2. KPI Report, Corporate Logistic team shall rate every warehouse on monthly basis under four heads- Inventory management , Infrastructure , Transport & Operations of warehouse. This rating shall be shared with Circle Head, Circle SCM & Logistics Head & Chief of SCM by 10 th of every month.

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CHAPTER-4

KEY PERFORMANCE

INDICOTORS

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Performance Indicators

A performance indicator or key performance indicator (KPI) is a simply another name for a performance measurement Measure of Performance. Performance measures are commonly used by an organization to evaluate how successful it, or an activity it is carrying out, is. Sometimes success is defined in terms of making progress towards strategic goals, but often success is simply the repeated achievement of some level of operational goal (zero defects, 10/10 customer satisfaction etc.). Accordingly, choosing the right performance measures is reliant upon having a good understanding of what is important to the organization; 'what is important' also depends on where within the organization the performance is being monitored - the KPIs useful to a Finance Team will be quite different to the KPIs assigned to the sales force, for example. Because of this need to develop a good understanding of what is important, Performance Measure selection is often closely associated with the use of various techniques to assess the present state of the business, and its key activities. These assessments often lead to the identification of potential improvements, as a consequence performance measures are routinely associated with 'performance improvement' initiatives. A very common method for choosing KPIs is to apply a management framework such as the Balanced Scorecard.

Some Important Aspects

Key performance indicators (KPIs) are measures by which the performances of organizations, business units, and their division, departments and employees are periodically assessed. Accordingly KPIs should be defined in a way that is acceptable, understood, meaningful and measurable. They should not be defined in such a way that their fulfillment would be hampered by factors seen as non-controllable by the organizations or individuals responsible. Such KPIs would tend not to be accepted.

To be able to be evaluated, performance measures / KPIs etc. need to be linked to target values - so the value of the measure can be assessed as meeting expectations or not.

Problems

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In practice, overseeing Key Performance Indicators can prove expensive or difficult for organizations. Some such as staff morale may be impossible to quantify.

Another serious issue in practice is that once a measure is created, it becomes difficult to adjust to changing needs as historical comparisons will be lost. Conversely a dubious measure is often created because history does exist.

Furthermore if a measure is based only on in-house practices it may be difficult for an organization to compare with similar organizations yet often, business with a similar background are used as a benchmark for such measures.

Analyst must be aware that a measure may be a rough guide rather than a precise benchmark.

Identifying Indicators of Organization

Indicators differ from business drivers & aims (or goals). A school might consider the failure rate of its students as a Key Performance Indicator which might help the school understand its position in the educational community, whereas a business might consider the percentage of income from return customers as a potential KPI.

But it is necessary for an organization to at least identify its KPIs. The key environments for identifying KPIs are:

Having a pre-defined business process (BP). Requirements for the business processes. Having a quantitative/qualitative measurement of the results and comparison with

set goals. Investigating variances and tweaking processes or resources to achieve short-term

goals.

A KPI can follow the SMART criteria. This means the measure has a specific purpose for the business, it is measurable to really get a value of the KPI, the defined norms have to be achievable, the KPI has to be relevant to measure (and thereby to manage) and it must be time phased, which means the value or outcomes are shown for a predefined and relevant period.

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Marketing KPIs

Some examples are:

1. New customers acquired2. Demographic analysis of individuals (potential customers) applying to become

customers, and the levels of approval, rejections, and pending numbers.3. Status of existing customers4. Customer attrition5. Turnover (i.e., Revenue) generated by segments of the customer population.6. Outstanding balances held by segments of customers and terms of payment.7. Collection of bad debts within customer relationships.8. Profitability of customers by demographic segments and segmentation of customers

by profitability.

Many of these customer KPIs are developed and managed with customer relationship management (CRM) software.

Faster availability of data is a competitive issue for most organizations. For example, businesses which have higher operational/credit risk (involving for example credit cards or wealth management) may want weekly or even daily availability of KPI analysis, facilitated by appropriate IT systems and tools.

KPIs for Manufacturing

Overall equipment effectiveness, or OEE, is a set of broadly accepted non-financial metrics which reflect manufacturing success.

Cycle Time

Cycle time is the total time from the beginning to the end of your process, as defined by you and your customer. Cycle time includes process time, during which a unit is acted upon to bring

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it closer to an output, and delay time, during which a unit of work is spent waiting to take the next action.

Cycle Time Ratio

CTR = StandardCycleTime / RealCycleTime

Utilization

Rejection rate

KPIs for IT

Availability Mean Time Between Failure Mean Time to Repair Unplanned Availability

KPIs for Supply Chain Management

Businesses can utilize KPIs to establish and monitor progress toward a variety of goals, including lean manufacturing objectives, MBE (Minority Business Enterprise) and diversity spending, environmental "green" initiatives, cost avoidance (CA) programs and low-cost country sourcing (LCCS) targets.

Any business, regardless of size, can better manage supplier performance with the help of KPIs robust capabilities, which include:

Automated entry and approval functions On-demand, real-time scorecard measures Single data repository to eliminate inefficiencies and maintain consistency Advanced workflow approval process to ensure consistent procedures Flexible data-input modes and real-time graphical performance displays

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Customized cost savings documentation (CSD) Simplified setup procedures to eliminate dependence upon IT resources.

Main SCM KPIs will detail the following processes:

sales forecasts inventory procurement and suppliers warehousing transportation reverse logistics

Suppliers can implement KPIs to gain an advantage over the competition. Suppliers have instant access to a user-friendly portal for submitting standardized cost savings templates. Suppliers and their customers exchange vital supply chain performance data while gaining visibility to the exact status of cost improvement projects and cost savings documentation (CSD).

Categorization of indicators

Key Performance Indicators define a set of values used to measure against. These raw sets of values fed to systems to summarize information against are called indicators. Indicators identifiable as possible candidates for KPIs can be summarized into the following sub-categories:

Quantitative indicators which can be presented as a number. Practical indicators that interface with existing company processes. Directional indicators specifying whether an organization is getting better or not. Actionable indicators are sufficiently in an organization's control to effect change. Financial indicators used in performance measurement and when looking at an

operating index

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Key Performance Indicators in practical terms and strategy development means are objectives to be targeted that will add the value to the business most (most = KEY INDICATORS OF SUCCESS).

K.P.I report for June 2010: -

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Dash board

41

42

Summary of Secondary Transportation - As per Circle

Team mails recd:-

Summary of KPI report:-

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44

CHAPTER-5

FINDINGS &RECOMMENDATIONS

FINDINGS:-

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Warehousing: - In the warehouse stock is allotted a particular space on the basis of FSN analysis, i.e. Fast

moving, Slow moving & Non/Normal moving. Monthly stock audit is done at the warehouses. Manually operated MHEs are used in the warehouses. FIFO is applied in the warehouses.

Distribution: - Delivery vehicles spend a lot of idle time waiting for the Redistribution Stockists to get

free from their own daily supply operations. LIFO is applied in the delivery vehicles.

IT: -.

No application of vehicle tracking devices is done.

RECOMMENDATIONS:-

Delivery planning & scheduling: - While dispatching stock for delivery to RS, preference must be given to the time suitable to them so that no idle time is spent waiting for him to be free

Demarcation: - Occasionally the labor is found searching a particular SKU in the warehouse for a longer time, this can be avoided by using better demarcation.

Careful handling: - Labor should be given strict instructions about careful handling of products.

MHEs: - The Company should move towards the use more automatic Material Handling Equipments in order to save time and improve the efficiency of warehousing.

Tracking:- should implement systems for tracking of its vehicles and in-transit stock to improve its supply chain efficiency with the use of technology like GPS, RFID etc.

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CHAPTER-6

BIBLIOGRAPHY

Internet Sites: -

http://www.sigmasupplychain.com

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http://www.pearsonedindia.com/web/books/9788131715178_Supply- Chain-Management_Janat-Shah.aspx

http://www.managementsupport.com/comments.htm http://mpstateagro.nic.in/Project%20Reports%20pdf/Cold%20Chain.pdf http://www.merinews.com/article/ice-creams-cost-more-in-delhi/

132556.shtml http://www.managementsupportonline.com.au/