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SUBMITTED TO:
N. R. VEKARIA INSTITUTE OF BUSINESS MANAGEMENT STUDIES
JUNAGADH
ACADAMIC YEAR
2009-2010
PREFACE
Due to making this report we came to know about various aspect of the
company, it is indeed a golden opportunity for us in the study management
and a matter of esteem by itself.
STUDENT DECLARATION
I have collect data from the company from a different departments and
library and also from the internet. It is not a secondary data which is use in
this report. It is a fresh and primary data only. This is my responsibility to
submit this report to concern authority because it is part of our study.
THANKING YOU
ACKNOWLEDGEMENT
Sr. Pg.
no. PARTICULAR no.
GENERAL INFORMATION
1 Executive summary 10
2 Industry information 11
3 Company overview 17
4 Functional Area information 24
DEPARTMENTS
5 PART - A
PRODUCTION / OPERATION DEPARTMENT
1 Introduction 26
2 Organization structure 27
3 Types of production process 28
4 Types of plant layout 45
5 Selection of location 48
6 Types of raw material and procurement 49
7 Material handling system 50
8 Production planning and control system 51
9 Repair and maintenance 52
10 Introduction to material management 52
11 Purchase department 55
12 Inventory control 57
13 Quality assurance 59
6 PART – B
MARKETING DEPARTMENT
1 Introduction 61
2 Organization structure 65
3 Product 65
3.1 Product mix 65
3.2 Product life cycle 69
3.3 New product development 70
3.4 Branding and packaging 72
Pricing – Methods and strategies 73
4 Promotion mix 74
4.1 Advertising 74
4.2 Sales promotion 74
5 Channel management
7 PART – C
FINANCE / ACCOUNTING DEPARTMENT
1 Introduction 77
2 Organization structure 79
3 Capitalization and capital structure 81
4 Leverage analysis 82
5 Capital budgeting 83
6 Sources of finance 85
7 Working capital management 86
8 PART – D
HUMAN RESOURCE DEPARTMENT
1 Introduction 94
2 Organization structure 95
3 Human Resource planning 95
4 Recruitment sources 96
5 Selection methods 97
6 Placement 98
7 Training and development 100
1. ECUTIVE SUMMARY
2. INDUSTRY INFORMATION
INTRODUCTION
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 10
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
The dairy sector in the India has shown remarkable development in the past decade
and India has now become one of the largest producers of milk and value added milk
products in the world. The dairy sector has developed through co-operative in many
parts of the state. During 1997-98, the state had 60 milk processing plants with an
aggregate processing capacity of 5.8 million liters per day. In addition to these
processing plants, 123 government and 33 co-operative milk chilling centers operate
in the state.
Dairy is a place where handling of milk and milk products are done and technology
refers to the application of scientific knowledge for practical purposes. Today, the
dairy industry is focusing on the other products like ice cream, pizza, cheese, milk
powder etc. because of the excess milk available and availability of the potential
market, the Indian dairy industry has broken all the traditional boundaries of
producing only milk.
Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore
to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and
fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the
international dairy processor in India. The Indian dairy industry is rapidly growing,
trying to keep pace with the galloping progress around the world. As he expands his
overseas operations to India many profitable options await him. He may transfer
technology, sign joint ventures or use India as a sourcing center for regional exports.
The liberalization of the Indian economy beckons to MNC's and foreign investors
alike.
India’s dairy sector is expected to triple its production in the next 10 years in view of
expanding potential for export to Europe and the West. Moreover with WTO
regulations expected to come into force in coming years all the developed countries
which are among big exporters today would have to withdraw the support and
subsidy to their domestic milk products sector. Also India today is the lowest cost
producer of per litre of milk in the world, at 27 cents, compared with the U.S' 63
cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest cost of milk
production and increasing production in the country multinational companies are
planning to expand their activities here. Some of these milk producers have already
obtained quality standard certificates from the authorities. This will help them in
marketing their products in foreign countries in processed form.
The urban market for milk products is expected to grow at an accelerated pace of
around 33% per annum to around Rs.43,500 crores by year 2005. This growth is
going to come from the greater emphasis on the processed foods sector and also by
increase in the conversion of milk into milk products. By 2005, the value of Indian
dairy produce is expected to be Rs 10,00,000 million. Presently the market is valued
at around Rs 7,00,000 million.
BACKGROUND
India with 134mn cows and 125mn buffaloes and has the largest population of cattle
in the world. Total cattle population in the country as on October'00 stood at 313mn.
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 11
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
More than fifty percent of the buffaloes and twenty percent of the cattle in the world
are found in India.
Indian dairy sector contributes the large share in agricultural gross domestic products.
Presently there are around 70,000 village dairy cooperatives across the country. The
co-operative societies are federated into 170 district milk producers unions, which is
turn has 22-state cooperative dairy federation. Milk production gives employment to
more than 72mn dairy farmers. In terms of total production, India is the leading
producer of milk in the world followed by USA. The milk production in 1999-00 is
estimated at 78mn MT as compared to 74.5mn MT in the previous year. This
production is expected to increase to 81mn MT by 2000-01. Of this total produce of
78mn cows' milk constitute 36mn MT while rest is from other cattle.
While world milk production declined by 2 per cent in the last three years, according
to FAO estimates, Indian production has increased by 4 per cent. The milk production
in India accounts for more than 13% of the total world output and 57% of total Asia's
production. The top five milk producing nations in the world are India, USA, Russia,
Germany and France.
T= target / expected
(Million MTs)
India 74 71 68
United States 71 71 70
Russian Federation 33 34 36
Pakistan 22 21 20
Brazil 22 21 19
Ukraine 14 15 16
Poland 12 12 11
New Zealand 12 11 10
Australia 10 9 9
India, with her sizable dairy industry growing rapidly and on the path of
modernization, would have a place in the sun of prosperity for many decades to come.
The one index to the statement is the fact that the projected total milk output over the
next 15 years (1995-2010) would exceed 1457.6 million tonnes which is twice the
total production of the past 15 years!
Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT
valued at Rs470bn. The market is currently growing at round 4% pa in volume terms.
The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan,
Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The
manufacturing of milk products is concentrated in these milk surplus States. The top 6
states Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat
together account for 58% of national production.
About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived
to be fresh by most consumers. In reality however, it poses a higher risk of
adulteration and contamination.
The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk & cheese stood at 3.07 lakh MT in 1999. Production of milk
powder including infant milk-food has risen to 2.25 lakh MT in 1999, whereas that of
malted food is at 65000 MT. Cheese and condensed milk production stands at 5000
and 11000 MT respectively in the same year.
MAJOR PLAYERS
The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-
operative Milk Marketing Federation (GCMMF) is the largest player. All other local
dairy cooperatives have their local brands (For e.g. Gokul, Warana in Maharashtra,
Saras in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil
Nadu, etc). Other private players include J K Dairy, Heritage Foods, Indiana Dairy,
Dairy Specialties, etc. Amrut Industries, once a leading player in the sector has turned
bankrupt and is facing liquidation.
FUTURE PROSPECTS
India is the world's highest milk producer and all set to become the world's largest
food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and
Foreign investors to find this country a place for the mammoth investment projects.
Hence in the foreseeable future, in most of developing countries milk and milk
products will not play the same roll in nutrition as in the affluent societies of
developed countries. Effective demand will come mainly from middle and high
income consumers in urban areas.
There are ways to mitigate the effects of unequal distribution of incomes. In Cuba
where the Government attaches high priority to milk in its food and nutrition policy,
all pre-school children receive a daily ration of almost a litre of milk fat the reduced
price. Cheap milk and milk products are made available to certain other vulnerable
groups, by milk products outside the rationing system are sold price which is well
above the cost level. Until recently, most fresh milk in the big cities of China was a
reserved for infants and hospitals, but with the increase in supply, rationing has been
relaxed.
In other countries dairy industries have attempted to reach lower income consumers
by variation of compositional quality or packaging and distribution methods or
blending milk in vegetable ingredients in formula foods for vulnerable groups. For
instance, pricing of products rich in butter fat or in more luxury packaging above cost
level so as to enable sales of high protein milk products at a some what a reduced
price has been widely practiced in developing countries. This policies need to be
brought in Indian Dairy scenario.
OVERVIEW
Gujarat cooperative milk marketing federation is India’s largest food products
marketing organization. It is a state level apex body of milk cooperative in Gujarat
which aims to provide remunerative returns to the farmers and also serve the interest
of consumers by providing quality products which are good value for money.
3. COMPANY OVERVIEW
more than last 40 years. The Union functions under a Co-operative setup wherein
1100 Village Dairy Co-operative societies in Mehsana district are members of
the Union. The Board of Directors, elected from Village Dairy Co-operative
Societies, governs the Union and the Managing Director looks after day-to-day
management of the Union.
The main plant of the union is situated at Mehsana in Gujarat, having processing
capacity of 20 lakh liters milk/day. It also has 5 chilling centers and 2 cattle feed
plants operating at various locations in Mehsana district. Union is also providing
other services such as animal health, artificial insemination, feeds and fodder etc.
to its societies. The current turnover of the union is more than Rs. 1200 crores
per annum. It has employee strength of 1600.
Dudhsagar, in its quest for excellence, wants to streamline and integrate its
processes in the areas of Finance, Sales, Purchasing and Manufacturing. To
achieve this, Dudhsagar has invited TCS to aid them in this business and IT
initiative by providing, installing and configuring Oracle Application 11i. The
proposed Oracle Apps modules for implementation are Oracle Financials, Oracle
Purchasing, Order Management, Oracle Process Manufacturing, and Oracle
Enterprise Asset Management.
The dairy was established on 8th November 1960. The dairy has been registered
under the leadership of shri. Mansihbhai Pruthviraj Patel in April 1961. He was
the founder of the “DUDH SAGR DAIRY”.
A visionary step initiated 50 years ago, against all odds, with only 1125 producer
members to start with, by our founder Chairman Shri. Mansinbhai Pruthviraj
Patel has grown to become Asia’s largest co-operative society, an Institution that
epitomizes the economic & social empowerment of about 5 LACS milk
producing members.
Mehsana largest milk producing district of Gujarat is famous since long for cattle
breeding & animal husbandry practices. Large, small & marginal farmers & landless
labourers are engaged in the practices of animal keeping & milk production. The high
yielding well known “Mehsani” buffalo breed is native of the district & is known for its
potential of economical milk production.
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 18
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
The union makes use of most advanced technologies for manufacture of various milk
products, for providing better animal health care services & for building socio-
economic strength.
AWARDS:
REGISTERED OFFICE:-
Dudhsagar dairy
Mehsana District co-operative milk producers union limited.
Mehsana – 384002
Gujarat state, India.
DATE OF ESTABLISHMENT:-
Dudhsagar dairy was established as on 8th November 1960.
The starting date of union is 2nd April 1961.
MAIN BUSINESS:-
Dudhsagar Dairy is engaged in producing and selling milk product.
RAW MATERIALS:-
Milk is the main raw materials.
PLANT:-
Dudhsagar Dairy is situated at Mehsana is producing market milk, Butter, Ghee,
Milk powder, and sweetened condensed milk.
BANKERS:-
AUDITORS:-
Special auditor(MILK)
Milk audit office
Gujarat
Mehsana
DUDHSAGAR DAIRY has a mission to save the surplus milk and give
employment to village people. DUDHSAGAR DAIRY sells their items at MRP
price and their mission to provide healthy and happy life.
ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
Board Of Directors
1 Shri. Vipulbhai M Chaudhary Chairman
5 PART – A
PRODUCTION / OPERATION DEPARTMENT
1 Introduction
2 Organization structure
3 Types of production process
4 Types of plant layout
5 Selection of location
6 Types of raw material and procurement
7 Material handling system
8 Production planning and control system
9 Repair and maintenance
10 Management of industrial safety
11 Introduction to material management
12 Role of material management
13 Purchase department
14 Inventory control
15 Quality assurance
1. INTRODUCTION
Meaning of PRODUCTION is simply that “To use material which is not in form to
use but through systematically process- it converts into finish products which can be
use. Production Department plays a vital role in the industry. In this department
different kinds of milk products are prepared from their raw material. It is called as
input output process of the product.
A production means creation of utilities and entails the procurement and utilization of
factors of production which includes manpower, material, building and equipments.
“Production management deals with decision making related to production process so
that the resulting goods or service is produced according to specifications in the
amount and by schedule demanded and at minimum cost”
E. S. Buffa
Production must be operated in an economic and efficient manner because cost of
production is vital factors in market competition and in ensuring normal profit or
return on investment.
INPUTS OUTPUTS
Material PRODUCTION Products
Labour PROCESS Services
Capital Information
Energy
2. ORGANIZATION STRUCTURE
PRODUCTION DEPARTMENT
PRODUCTION MANAGER
ASSISTANT MANAGER
SENEOR OFFICER
JUNIOR OFFICER
SUPER VISOR
WORKER
MAIN PRODUCTS
1. Milk:-
► Standardized Milk 4.50 fat/ 8.5 SNF
►Toned Milk 3.0 fat/ 8.5 SNF
►Double Toned Milk 1.5 fat/ 9.0 SNF
►Whole Milk 6.0 fat/ 9.0 SNF
2. Flavoured Milk:-
►Elaichi Flavor
►Kesar Flavor
►Rose Flavor
3. Butter:-
►Table Butter (yellow butter)
►White Butter
4. Ghee:-
►Pure Ghee
5. Powder:-
►Whole Milk Powder
►Infant Milk Powder
►Skimmed Milk Powder
6. SCM:-
►Sweetened Condensed Milk
7. Cattle Feed:-
►Sagardan
►Sagarhypro dan
►Sagar purak dan
Milk Farmers
Chilling Center
Storage
Dispatch Federation
Distribution Channel
Consumer
• Balance Tank
• Pasteurizer
• Bottle Filling Machine
• Milk Preparation Tank
• Cream Separator
• Sour Separator
• Hot Water Pump
• Filter
• Vertical Balance Tank
TYPES OF PRODUCTS
• Pasteurized Milk
• Pasteurized Cream for Butter and Ghee
Pasteurized Milk
Standardization
Pre heating
Sugar addition
Homogenization
Heating
Chilling
Addition of color
Bottling Room
Batch Sterilization
Labeling
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 31
Wrapping
Storage
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
Flavored milk is recognized as beverage product containing milk to which has been
added flavoring materials such as Chocolate, Fruit flavors (Strawberry, Pineapple,
Apple, Banana etc) or Syrups & possibly coloring materials. The milk product is
usually skimmed or partially skimmed milk with a reduced fat content. For longer
shelf life here sterilized flavored milk is manufactured. SFM is marketed under the
brand name of Amul cool & Sagar sfruti.
○ Kesar Flavor
○ Elaichi Flavor
○ Rose Flavor
Kesar flavor
Elaichi flavor
Rose flavor
The specific amount of color & flavor for respective flavored milk is taken into 10 lit
milk 7 mixed. Followed by filtering the mix using cloth & then adding it in the bulk
tank & agitated.
BUTTER SECTION
There are two butter sections in this plant. The butter is produced by continuous
butter making machines and packed semi-automatically. Butter produced is marketed
in Mehsana district by “Mehsana District Co-Operative Milk Producers Union Ltd.”
and outside Mehsana district by “Gujarat Co-Operative Milk Marketing Federation.
“The capacity of butter production is approximately 120 tons per day. Nowadays
approximately 40 tons per day is produced. Contimab process of continuous butter
making is followed in contimab machine. Butter is packed in 100 gms, 500 gms, 500
gms institutional packing, and 9.1 gm chaplets packets. The selling price of 100 gms
is Rs.16, 500 gms is Rs.72, 500 gms & Rs.200 per Kg. for chaplets packing.
Raw Milk
Heated on 82 degree
Celsius
Machine through Raw Milk has
been separated in two different
items
Milk
Raw Cream
Cream use in
Contimab Machine
Packaging
Store on 0 degree
Celsius
Dispatch
EXPLANATION:
First of all milk has heated on 80 to82 degree Celsius and after raw milk separated
from the two different items one is milk other is cream. Cream has use in contimeb
zone. Under contimeb zone cream has been separated and after butter will be ready.
Then butter will go on packing department and hear butter finally packs. Then butter
goes on cold storage below 4 degree Celsius.
Stored 4 hours
Dispatch
EXPLANATION:
First of all milk has heated on 80 to82 degree Celsius and after raw milk separated
from the two different items one is milk other is cream. Cream has use in contimb
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 34
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
zone and added anato color and salt. Under contimb zone cream, anato color and salt
has mixed and yellow butter will be ready. Then yellow butter will go on packing
department and here butter finally packs. Then butter goes on cold storage below 4
degree Celsius.
White Butter:-
Fat 80-84%
Moisture 16% (max)
Curd 1% (max)
Coliform Negative
List of Equipments
5. Butter Analyzer
GHEE SECTION
This is a very important section of the dairy. Here ghee is made by cream butter
method i.e. first cream is converted to white butter through continuous butter making
machine and then butter is melted and heated to make ghee. Buttermilk and serum are
again issued to process section. There is a wide variety of packaging of ghee. Ghee is
sold in 1 litre, 2 litres, 5 litre tin, 15 Kg. tin, 1 litre refill pack, 500 ml and 500 gm
pouch pack. Average ghee production of this dairy is 20 ton per day in two shifts. The
ghee is packed under two brand names Sagar and Amul, but the Sagar is mainly
produced. Ghee is marketed under Gujarat Cooperative Marketing Federation Ltd,
Anand.
Milk
Butter
Butter is passing on
hot exchanger
Butter receives in butter
Malting Vat on 55 degree
Celsius
EXPLANATION:
Ghee is prepared by making white butter from continuous butter making machine.
Cream after ageing of 4 hours is taken for butter making and white butter is made on
BUC-1500 Westfalia Separator Machine. This white butter is worked in machine and
an another worker and then passed through a Spiral flow Heat Exchanger for melting
via a pump. The melted butter is stored in an elevated tank. Serum is separated from
butter by a serum separator and separated melted butter is taken in a butter-melting
vat. Melted butter is pumped to ghee kettle via a pump. In ghee kettle this melted
butter is heated at 108-110 c for two hours or till the end point of ghee is obtained.
The ghee kettle is a simple jacketed kettle in which heating is done by steam at a
pressure 2-3 kg/cm. The butter is held in this kettle for another two hours for settling.
Then ghee is pumped to the storage tank via clarifiers. The ghee is then packed in
different packages via the packaging lines provided for different types of packaging.
There should not be any clash between lines, so this is a critical points in ghee
packaging. The sample is tested from two tanks i.e. two storage together constitute a
single batch of ghee. Tins are seamed by a seamer and then packed in cardboard
boxes. Packaging of ghee takes place at 36-45 C. There are heaters on the packing
pipelines of ghee for keeping ghee hot while packing. The balance tanks of ghee
packing are pneumatically controlled and filling is gravimetric.
LIST OF EQUIPMENTS
CBM :1
Serum Separator :5
Settling Tanks :4
Butter Melting Vats :3
Ghee Kettles : 11
Ghee Storage Tanks : 10
Ghee Clarifiers :2
Electric Embossing Machine :1
Packaging Machine
½ kg pouch filling :2
Rollatainer refill pack :1
Rollatainer tin pack (1 lit) :2
Mether Platt ghee tin pack (5lit) :1
15 kg tin packing machine :1
SPECIFICATION
Type : BUC-1500
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 37
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
Ghee Kettle:-
Type : Rollatainer
Parameter : 1 kg : 2 kg
Speed : 8-13 Tin/min : 7-10 Tin/min
Air pressure : 3.5-6 kg/cm : 3.5-6.0 kg/cm
Ghee Temperature : 36-45 C : 36-45 C
Ghee Weight : 1 + 0.005 kg : 2 + 0.005 kg
POWDER SECTION
Powder is the best way of preserving milk solids. The main objective in processing it
is to achieve good storing stability, low production costs & a product that resembles
as much as possible the original after reconstituting. The production of concentrated
& dried milks has the advantage of processing & storing all market surpluses
especially fluid milks, as well as at by products. Due to the preserving effect of low
water activity, dry milk products are desirable in regions with unfavorable climate
conditions. Even infant formula is designed as a substitute for human milk when
mother can not best feed their babies. Powder section has a paramount importance in
itself, a large proportion of milks are diverts to this section for manufacturing
different types of powder.
Spray drying
Packing
Storage
Dispatch
In Dudhsagar, four powder plants are manufacturing powder. The types of powder
manufactured are Whole milk powder (for army), Skim milk powder, Baby food, and
Dairy whitener. All plants are having two stages drying; two plants are manually
operated while two are automated. The brand names of powder are Amul for whole
milk powder, Amul spray for baby food, Amulya for dairy whitener and Sagar for
skim milk powder.
Dairy Whitener-Amulya
Cattle Feed (Sagar Dan) is manufactured at the Ubhkal and Boriavi Cattle Feed
Plants. The manufacturing process at both the cattle feed plants are the same. The
study was carried out at the Ubhkal cattle feed plant.
CATTLE FEED
• Sagar Dan is the primary product being produced at the Cattle Feed Plant.
• As per Animal Husbandry Department requirements, de-worming doses are
manufactured twice in a year. The medicated pellets are packed in 400 gm
plastic packets.
• Other than Sagar Dan, the following cattle feed are also manufactured at the
Boriavi Plant – Purak Dan, Rahat Dan, Calf Starter and Pashu Poshak.
• The average shelf life of Sagar dan is about 6 months.
• Generally production and dispatch of the production takes place on a day to
day basis.
• The formula for Sagar dan keeps on changing from month to month. It may
also vary within a month. This is because of the variations in the nutritional
values/prices of the raw materials from season to season.
• Production Planning for cattle feed is carried out on the basis of the sales
orders placed for each of the products, the capacity of the plant, the
availability of the plant and the storage capacity of the finished product
store. Production in-charge considers the storage capacity of the finished
products and readiness of the plant during the planning process. Impact of
material non-availability (major ingredients and alternate ingredients) is also
considered during production planning. Other parameters considered for
planning include requirement of raw materials, buffer stock, stock
information, etc.
• SAGAR HY PRO DAN is the best product for animals which is introduced by
dairy in April 2009.
Storage Bins
Batch Hopper
Batch Mixer
Hammer Mills
Pellet Mills
Cooler
Shieve
FG Storage Bins
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 43
(1) Grains:
Jowar
Maize
Millet
Barley
(2) Rice Polish Fine Grade Two
(3) De-oiled Rice Bran
(4) Mustard Rape Seed Extraction
(5) Cotton Seed Extraction
(6) Guwar Meal
(7) Molasses
(8) Vitamins
(9) Minerals
(10) Salt
(11) Ani Feed
(12) Urea
(13) Calcite Powder
(14) Protein
According to F.G. Moore, A good lay out is one which allows materials rapidly and
directly for processing.
Plant layout is also the physical arrangement or appearance of the plant. If the plant
layout is well arranged according to convenient of organization it will be beneficial
by many ways.
1) Product layout
2) Fixed position layout
3) Group layout
4) Process layout
Advantages
Low cost of material handling due to strait and shorter part and animating
Smooth and uninterested operation free from optical
Continuous flow of work
Special purpose equipment can be operated by semi skilled labour
Optimum use of floor
Shorter processing time and quicker output simple and effecting work
High initial capital investment in special purpose machine
Heavy overhead charges and less flexibility of operation
Suitability of product
In this type of lay out the major product been product fixed and a particular locating
equipment labour and components are moved to that particular location. This layout
is applied when materials been process are large very heavy have and difficult to
move ship builds locomotive manufacturing wagon manufacturing and Altar
manufacturing are the products where this layout is apply.
In most industrial establishment plants are rarely laid out. It either pure from and a
combination of product or process layout is apply. It is possible to have both types of
layout in an efficiently combined from if the product manufactured on same what
similar and not complex. This layout is combination of both product and process lay-
out.
In this type of lay-out machines of similar type on located together according to their
function products move between the machinery equipment in order of the operations
require.
Advantages
From the above stated four types of plant layout, DUDHSAGAR DAIRY uses
product layout system.
Formerly, DUDHSAGAR had the old machines were performing the production
operation. This was taking too much time. Therefore DUDHSAGAR adopted
modernization and set up a totally automatic plant. As a result it has developed a new
plant layout at DUDHSAGAR to adjust the automatic equipment and machineries.
5. PLANT LOCATION
Site selection is an important activity, which decides the fate of the business. A good
location may reduce the cost of production and distribution to the considerable extent.
“It is an ideal location where all types of cost of business activities are
minimum.”
- John Shubin
Meaning:
Location is a geographical place or area were plant factory, company, unit firm or
industry is situated or established or located or setup or started or commence or
existed.
Factors determining the location of industry there are two types of factor that
determine the location.
Dudhsagar dairy
The task of purchasing is related to going to open marketing, finding the desired
materials at the lowest possible price and selecting the supplier who offers it at
that price having the quality of the materials in mind. It is indeed, a specialist
activity calling for the commercial rather than the technical training and outlook
In case of Dudhsagar dairy the main product of raw-material is milk & milk get
lowest price from near villages. So, transportation & other raw-material
handling cost is lower.
• Milk Tankers
• Tempos
• Carates
• Cans
• Trolley
• Gravity Roller
• Portable Belt
• Pedestrian-Led-Powered Truck.
Product planning has assumed front rank importance in the modern market oriented
business. In addition product planning invites an intelligent, appropriate and
scientific approach. The case history of the successful companies has proved that
product planning calls for the highest degree of top management ability and effort.
INTRODUCTION
All types of organization whether manufacturing, trading or even net profits are
continuously involved in procurement, storage and stock replacement of
different types of material. At different point of time many of the items are
bought stored and stocked either for immediate or future use.
The task of purchasing is related to going to open marketing, finding the desired
materials at the lowest possible price and selecting the supplier who offers it at
that price having the quality of the materials in mind. It is indeed, a specialist
activity calling for the commercial rather than the technical training and
outlook.
Store Structure
1. General Store
2. Finished Product Store
3. Ghee Store
4. Society Store
5. Veterinary Store
6. Milko tester Store
A) MEHSANA PLANT
Mehsana plant has five stores. General Store and Finish Product
Stores are main store and Society Store, Veterinary Store and Milko
Tester stores are sub store. General Store also receives material for
three sub-stores and material is delivered directly at the sub stores.
Functional overview of each store is detailed as under:
1. General Store
• Packaging Material
• Engineering Material
• Raw Material
• Consumable
• Lab Material
• Power and Fuel
3. Society Store
4. Veterinary Store
Stores Engineering
• Packing Material
• Repair and Maintenance Material
• Laboratory Item
• Power and Fuel
• Consumables
The Cattle Feed Plant production store basically maintains the raw
materials required for the Cattle Feed Production and the Finish
Goods. There are different varieties of raw materials used in cattle
feed production, which includes Jowar, Rapseed, Grains, Oil Seeds,
Rice Bran, etc. Along with the raw materials this store also handles
Finish Goods (Cattle feed), Cromy Dan (De-worming Material
Pouches), Mineral Mixture, Empty Gunny Bags etc.
Shri S.Palit, Sr. Manager (Purchase) is in-charge of Purchase department. The dept. is
functioning through the set defined rules and regulations of the society. The
procurement of cattle feed, engineering goods, raw materials and packing materials and
other general goods are being handled from this department. The raw milk procurement
is being handled by Co-operative Service dept. under MPO department. in-charge. The
purchase dept. negotiates the rates with the supplier, but some times the user dept. also
negotiates especially for the engineering goods. Purchase dept. makes sure for the
timely payment to the supplier as per the terms and conditions decided at the time of
PO. Before making the payment pre-audit inspection is being worked out by the
Internal Audit department. The following number of activities which are performed by
Purchase department of Dudhsagar dairy.
FUNCTIONS
IDENTIFICATION OF SUPPLIER
Suppliers are selected on the basis of their ability to meet the specified requirements
of Dudhsagar Dairy. These suppliers communicate directly with Dudhsagar Dairy.
New suppliers send an introductory letter along with the data on firm (supplier
facility) to Dudhsagar Dairy. The data on firm contains information relating to
supplier’s factory, machinery used, production and turnover. If found necessary, they
are called for a discussion or a person from Dudhsagar Dairy may visit the supplier to
verify the areas mentioned in the data provided on the firm. Based on satisfactory
evaluation and commercial offer, the supplier is asked to supply the samples. On
satisfactory compliance of the sample, the supplier is approved for regular supplies
and is included in approved list of suppliers.
1. Engineering Purchase
2. Cattle Feed Purchase
3. General Purchase
1) ENGINEERING PURCHASE
ACTIVITIES
This section purchase cattle feed ingredients. The items are as follow;
Juwar
Maize
Damage Wheat
Rice Bran Ext.
Sun Flower Ext.
Mango Extract
3) GENERAL PURCHASE
In this department buy common items which are mostly used by all departments like
Sugar, Stationary, Packing material etc. Items are classified as follow:
• ABC :-
ABC Analysis is the basic analytical management tool, which enables top
management to place the efforts, where the results will be greatest. This
technique popularly known as “always better control” has universal application
in many areas of human endeavor. The technique tries to analyze the
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 58
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
• EOQ :-
The other side of the scene is the inventory carrying cost when inventories are
stored, it involves following types of cost.
Invest cost
Cost of storage space
Cost of insurance and tax
EOQ formula:-
Where:-
3) Re order level
4) Value Analysis
6 PART – B
MARKETING DEPARTMENT
1 Introduction
2 Organization structure
3 Product
3.1 Product mix
3.2 Product life cycle
3.3 New product development
3.4 Branding and packaging
4 Promotion mix
4.1 Advertising
4.2 Sales promotion
5 Channel management
1. INTRODUCTION
The marketing is very broad concepts for the business. We can distinguish between
social and a Managerial definition of Marketing. Asocial definition saw the role
Marketing plays in society. One market said that Marketing’s role is to “Deliver a
higher standard of living.” Here is a social definition that serves our purpose
Marketing is a societal process by which individuals and group obtain of what they
need and want through creating, offering and freely exchanging products and services
value with others. For Managerial definition, Marketing has often being described as
“the art of selling products”.
Marketing deals with identifying and meeting human and social needs. One of the
shortest definition or marketing is “Meeting needs profitably”. Marketing is a process
by which individuals and groups obtain what they need and want by creating and
exchanging and values with others.
“A market may be considered as a convenience meeting place where buyers and
sellers gather together for exchange of goods and services”.
Marketing is typically seen as the task of creating, promoting and delivering goods
and services to consumers and businesses. Marketing people are involved in
marketing 10types of entities:
1. Services
2. Experiences
3. Events
4. Persons
5. Places
6. Properties
7. Organizations
8. Information
9. Ideas
Marketing has often been described as “The Art of Selling Products”
Essentials of Marketing
DEFINITION:
“Marketing is a social and managerial process by which individuals and groups
obtain what they need and want by way of exchanging things for mutual
benefits”.
• Sales coordination of liquid milk, Chas & flavored milk within Mehsana milk
shed area.
• Sales coordination of milk products to various GCMMF depots & their bulk
parties
• Sales coordination of milk products to Defense
• Liasioning with Government & legal agencies as & when required
• Liasioning with National Co-operative Dairy Federation of India Ltd
(NCDFI), GCMMF Ltd.
• Complaints redressal.
ACTIVITIES
The liquid milk is sold in pouches, in cans & tankers. The pouch milk will be
supplied as per the requirement of milk distributing agents. The loose milk in
tankers will be supplied to Mother Dairy, Gandhinagar, other member union other
parties & to individual customer as per their requirement. Mother dairy 7 other
member unions are lifting milk as per the monthly milk dispatch program decided
in GCMMF, Anand. Chhash is also sold in pouches & in cans. Flavoured milk is
sold in bottles as per the requirements of GCMMF, milk distributors &approved
parties.
The sales process of dudhsagar dairy invites applications from the parties of
potential areas, who are interested in selling milk, chhash, flavoured milk. The
area may be fixed while appointing the milk-distributing agent, whenever
required.
The demand for ghee, chhash, chilled water etc, within the district is being met by
selling the products to the individual customer or institutional customers. The sale
may be done against cash payment or cheque or DD or credit sales depending
upon the party.
Export orders:
The export dept of GCMMDF Ltd. Anand sends the copy of export order for the
various products to the managing director, production process, QA process,
purchase process & sales process. On the receipt of the same, the order details are
examined. Production planning is done as it done as it is mentioned in production
process. The dispatch of different products is made by dairy against GCMMF
Ltd's Dispatch instruction letter, to its various depots.
Whenever there is demand for products, which is specific & special requirement
from customers, it is received by sales process. Sales process in turn reviews the
requirements with top management & concerned personal. Detail of the reviving
and meeting customers requirement are explained in customer satisfaction sub
process.
SABAR AMUL
BANAS
VASUDHARA
DUDHSAGAR
MADHUR
“GCMMF”
UTTAM
Brand name UTTAM
PANCHRMRUT
DUDHDHARA
SUMUL GOPAL
2. ORGANIZATION STRUCTURE
MARKETING
DEPARTMENT
GENERAL MANAGER
SALES MANAGER
SENIOR MANAGER
JUNIOR MANAGER
OTHERS
3. PRODUCT
Product mix which is also called as product assortment is the set of all product and
items that a particular seller offers for sale. A company’s product mix has certain
width, length, depth and consistency.
PRODUCT
Marketing is a comprehensive term and it includes all resources and a set of activities
necessary to direct and facilities the flow of goods and services from producers to
customers in process of the distribution. Business regards marketing as a management
function to plant promote and delivered product to the clients or customers.
PRODUCT PLANNING
Product is a key element in the market offering. Marketing-mix planning begins with
formulating an offering to meet target customers need and wants. The customer will
judge the offering by three basic elements.
Product feature
Service mix and quality
Price
A product is anything that can be offered to satisfy a want or need. Products that are
marketed include physical goods, services, experience, events, persons, places,
properties, organization, information and ideas.
In planning its market offering, the marketer needs to think through five level of the
product. Each level adds more customer value and the five constitute a customer
value hierarchy. The most fundamental level is the core benefit; the fundamental
services or benefits that the customer is really buying. A patient is buying cure for his
disease not medicines.
PRODUCT CLASSIFICATION
Durability
Tangibility
Use (Customer or Industrial)
PRICE
“Price is the only element in the marketing mix that creates sales
revenue; the other elements are costs.”
- Philip Kotler
• It is the value, usually in monetary terms that sellers ask in-exchange for the
products they are offering.
Cost of Milk
Raw Material Cost
Labour Cost
Processing Cost
Packaging Cost
Advertising Cost
Transportation Cost
Sales Promotion Cost
Taxes etc.
The GCMMF considers all these cost aspects and set them up in pricing
structure to decide the jelling price of milk and milk products.
• DUDHSAGAR decides prices for the product Milk, Butter Milk and Curd.
For that they mainly focus on commission of retailers.
PLACE
DUDHSAGAR dairy is classified into large scale industry. Dairy is producing its
various products like milk, ghee, butter and milk powder etc. it is very necessary to
have strong distribution channel. The DUDHSAGAR dairy has its own sales office
which is organized by DUDHSAGAR dairy him self and Gujarat state milk
marketing federation company distributes 70% products through GCMMF and 20%
through local marketing and remaining 10% to the Army.
DUDHSAGA
R DAIRY
Customer
1) LOCAL SALES
It is the sales made in the boundaries of Mehsana milk shed area consisting of
Mehsana, part of Gandhinagar and part of Patan Districts. The products mainly sold
are Sager Milk, Sager Ghee, Sager Butter Milk, Amul Butter and Amul Milk
Powder. This local sale is done through distributors.
On special occasions like marriage, party big orders are taken directly from party.
Average milk sold locally is 7500 liters, per day.
2) GCMMF SALES
3) ARMY SALES
It is very special selling to Army. There is no intermediate between two. Only Butter,
Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this,
Powder is negotiated by federation and Sweetened condensed Milk by Dairy.
Whole milk powder is given to Army’s supply depot as per their demand. There total
47 Army supply depot in India. Skimmed milk powder is gives to Army’s Military
farm.
Product Life Cycle is an important concept that applies product Items. A company
has to change differentiating & positioning strategy with changes in the product,
market, economic condition & competitors over time.
The Product concept comes from the fact that a product sales volume & amount of
profit. Profit rise & fall at different stages of the product life cycle. Products
required different marketing, Financial, Manufacturing, Purchasing & Human
resource strategies in each of their life cycle.
Introduction
A period of slow growth as the product is introduced in the marker. Here
heavy expenses incurred with product introduction.
Growth
A growth is a period of rapid market acceptance and profit improvement.
Maturity
A maturity is a period of slowdown in sales growth and profit stabilized of
decline because of increase competition.
Decline
A decline is a period when sales show a down ward profits.
Company’s that fail to develop new products are putting themselves at great
risk. Their existing products are vulnerable to changing customer needs &
tastes, new technologies, shortened product life cycles & increased domestic &
foreign competition. New technologies are especially threatening. Market
established company’s focus on incremental innovation. Newer companies
create disruptive technologies that are cheaper & more likely to alter the
competitive space.
Idea generation
Idea screening
Marketing strategy
development
Business analysis
Product development
Market testing
Commercialization
1) Idea Generation:-
The generation of new product idea contains the sources of all ideas relating to the
new product. Whether they can be from employees, R & D, marketing experts,
public, government etc..
2) Screening of Idea :-
The idea will be scrutinized after its collection. All the ideas collected may not be
acceptable. Ideas with product policies & objectives of the film may be dropped
out lightly.
All the ideas that survive the process of screening will be studied in details. They
will be developed into mature product concepts. Concept testing helps the
company to choose the best among the alternative product concepts. A product
idea can be turned into several product concepts.
1) Who will use the product?
2) What primary benefits should this product provides?
3) When will people consume this product?
5) Business Analysis :-
Under this stage, selected ideas are studied in detail manner, determining is
desirable market feasibility & features of the product.
7) Market Testing :-
The segment will be selected to test the product & its sustainability will be
decided from its performance.
8) Commercialization :-
BRANDING
“A name, term, sign, symbol or design or a combination of them intends to identify
the goods or services of one seller or group of sellers and to differentiate them from
those of competitors”. Thus brand identifies the sellers or makers.
The American Marketing Association
There are mainly two names are use for the product and that are AMUL and SAGAR.
These are two brand names which are mainly use for the product.
PACKAGING
Milk:-
Pouch milk – 500 ml
Ghee:-
Pouch packing – 500 ml
Refill packing – 1 litter
Tin packing – 1 litter, 2 litter, 5 litter, 15 kg
White butter:-
Only 15 kg cartoon packing
Yellow butter:-
Packing brand name “Amul Pasteurized butter”
Packing on 500 gram, 100 gram and 10 gram
Butter use name table butter
One chip lets weight 90 gram
One packet 110 chiplets pack and under 1 cartoon 12 packets
Amul spray:-
Tin pack – 500 gram & 1 kg
Refill pack – 200 gram, 500 gram & 1 kg
Polythin – 200 gram & 1 kg
Amulya:-
Tin pack – 500 gram
Refill pack – 200 & 500 gram
Pouch pack – 500 gram & 1 kg
The aim of each and every company is the maximum of profit and customer
satisfaction. The level of profit is generally depending on the pricing policy of the
company. Prices of the product are decided evaluating the return of factors of
production i.e. interest, rent, wage, and profit. Also other such as direct and indirect
taxes etc is also considered while deciding the price.
The factors affecting the pricing are as follow.
Cost of production.
Competition
Quality of product
Payment period
Value pricing
Target return pricing
Mark-up pricing
Group Pricing
Going rate pricing
In DUDHSAGAR DAIRY, prices are not fixed for the products; there are some
regular changes in price of some products, just like milk and ghee. Prices are more
and less depends upon the cost of the raw materials and other expanses. They can also
adjust the price according to the market price and demand of product.
4. PROMOTION MIX
Promotion refers to marketing activities used to communicate positive information
about an organization, its product and activities to directly or indirectly expedite
exchange in a target market.
4.1 ADVERTISEMENT
Sales Promotion consists of short term incentives to encourage Purchase and Sales of
a product or services where as advertising offer reasons to by a product or services,
sales promotion offers reason to buy it. Advertising is joined by two other mass
production tools, sales promotion and public relation. Two tools of the sales
promotion (a) Consumer sales promotion tools and (b) Trade promotion tools. The
main consumer sales promotion tools include:
Samples
Coupons
Cash refund
Price pack
Premium
Advertising specialties
Contents and games
Patronage reward
For the sales promotion, in the Dudhsagar some stapes are taken like in dipavli
festival some discount is given to the customers. For increase the morale of agent
some benefits are given like bonus, increase commission etc.
5. CHANNEL MANAGEMENT
“Dudhsagar Dairy” Mehsana is producing various products like Milk, Butter, Ghee,
Milk powder and Sweetened condensed milk etc. Distribution channel is important
for business.
The Dudhsagar dairy has its own sales office, which is organized by Dudhsagar
dairy itself. It has different sales office in different cities like Kalol, Kadi, Mehsana
and other places.
This Distribution channel decided by Gujarat Coop Milk Marketing Federation Ltd
7 PART – C
FINANCE / ACCOUNTING DEPARTMENT
1 Introduction
2 Organization structure
3 Capitalization and capital structure
4 Leverage analysis
5 Capital budgeting
6 Sources of finance
7 Working capital management
1. INTRODUCTION
Finance Management is the part of the Managerial activity, which is concerned with
planning, and controlling of the firms financial resources. It is an applied branch of
general management it has to plan to organize and control the finance of the
enterprise. Chief duties of financial management are planning and control of
corporate finance. Financial Management is called upon to take three major decisions
viz. Investment decision, financial decision, and dividend decision. Financial
Management involves the implementation of these three major decisions it is an
integral part of overall management rather than merely a staff activity concerned with
fund raising operations without sound management of financial resources, business
can not achieve its objective and may occur heavy losses, Thus financing
management in charge of efficient planning and control of the cycle of flow of funds
inflow and outflow of funds.
Financial decisions are thus very crucial and important, decisions for the firm.
The main function of finance department is to tackle The day to day financial
requirement and other short term and long term expenses, which an organization
incur quite often.
All the other department of the organization strongly depends upon the
finance department to carry on their departmental activity efficiently. Hence it is the
responsibility of the finance manager to manage the finance function with proper
care. Adequate financial availability in time in the organization would lead to
organizational success and the failure to manage finance will thus lead to inefficiency.
Proper finance is the real key to the success of any business enterprise.
Without proper finance a business neither survives nor expands and
modernizes. It is the finance, which works like a lubricant, which keeps the
organization dynamic. Keeps men and machine at work. The following are the
points highlight the importance of finance.
Shri. George Samuel is the in-charge of Internal Audit. Department handles the
internal audit functions in various parameters as Financial, Operational, Special
Assignments & Propriety areas. Internal audit dept. is broadly divided into pre-audit of
payments; post audit of books, post audit stock, continuous physical verification, 100%
purchase procedure, P&L & B/S audit. The internal audit procedure is defined in depth
in Internal Audit Manual. The whole audit programme is well defined in advance and
respective personnel are being responsible for the distributed work area.
Any queries are being seriously vouched and highlighted to the management to take
rigorous steps for the same. After finalizing the internal audit workings, same set of
books are being given to Government auditors for their audit purpose. Government
auditors vouch the books and puts query (if any) for the clarification with the Union’s
management and ask for the explanation of the query. Once the Government auditors
are satisfied with the explanation of the query, the same is being freeze and cleared.
2. ORGANISATION STRUCTURE
The accounting function covering the Mehsana office and plant, the five Chilling
centers at Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at
Boriavi and Ubkhal are performed by the Accounts Department at Mehsana head
office of Dudhsagar dairy. All the purchase and sales for Dudhsagar dairy are
executed from the Mehsana head office centrally. The purpose and scope of Account
process are Management of Financial resource of the union accurate and timely
payment to societies and supplies, maintain proper books of the union and advise
Dudhsagar dairy’s management of the performance of the union based on accounting
records, finance process includes the accounting functions of payables, Receivable,
Cash Management, Asset Management, and General Accounting & Reporting
functions including Budgeting. It also covers Costing activities performed at
Dudhsagar dairy. The Audit Budgeting and Costing process are performed by the
internal Audit department in closeness with Accounts Department.
Chairman
Managing
Directors
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MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
General Manager
Deputy General
Manager
Assistant
General Manager
Senior Manager
Managers
Deputy Manager
Assistant
Manager
Sr. Executive
Executive
Asst. Executive
Jr. Executive
Sr. Assistant
Jr. Assistant
Sr. Clerk
Jr. Clerk
FINANCIAL PLANNING
A firm needs to manage its resource effectively and efficiently to achieve its
objective. The managing of resources in an a effective manner is possible only when
the management work out the future course of action in advance and take decision in
professional manner and rational manner that’s why financial planning is very
important.
Financial planning is a statement estimating the amount of capital and determining its
composition. It includes;
Establishing objective
Financing
CAPITALIZATION
CAPITAL STRUCTURE
Capital is one of the most important factors of production without capital organization
cannot production or other type of the activity. Capital includes share capital reserve
and surplus and long term liabilities. The authorized share capital of the dairy is
2500,000 shares of Rs. 100 each and the capital is 2500, 00,000.
4. LEVERAGE ANALYSIS
Leverage is used for getting higher work don by putting lesser efforts i.e.
mechanical advantages is achieved is achieved. For example, leverage helps us
in log objective, which may not be otherwise possible. Leverage has been
defined as “the mechanical advantages gained by the use of levers.”
• Operating Leverage
• Financial Leverage
• Combined Leverage
• OPERATING LEVERAGE
The operating leverage many are define as firm’s ability to use fixed cost to
magnify the effects of chances in sales on “Earning Before Interest & axes
(EBIT). The operating leverage takes place when a change in sales producer a
greater change in EBIT. A firm will not have operating leverage if its fixed
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 83
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
operating cost is zero. For such firm a given percentages change in same
percentages in the level if sales would lead to the same percentages change in
the level of EBIT.
Contribution
Operating Leverage = ---------------
EBIT
Where, EBIT = Earning Before Tax & Interest
= Contribution - Fixed Cost
Contribution = Sales - Variable Cost
• FINANCIAL LEVERAGE :-
EBIT
Financial Leverage = ---------
EBT
Where,
EBIT = Earning Before Tax & Interest
EBT = Earning Before Tax
• COMBINED LEVERAGE :-
Operating Leverage
Combine Leverage = -----------------------
Financial Leverage
5. CAPITAL BUDGETING
Capital budgeting will show the future expenditure on fixed assets over a period
of years. Capital budgeting represents a scheme for investing resources which
can be analyzed & appraised reasonably independently. The basic characteristic
of a capital expenditure is that it typically involves a current outlay of funds in
the expectation of a stream of benefits extending for into the future.
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MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
Currently the budgeting activities are restricted to annual preparation of budget and
monitoring of budget versus actual cost quarterly. Budget is made annually by
manually obtaining the amount from each department against the several budget head
description in a form. Dudhsagar wants to track and implement budgetary controls
while making expenditure.
Dudhsagar has limited exercise towards allotment and structuring of cost code, sub
code and purpose code according operation classification. As sales are more or less
regulated, a more system orientation is adhered to in drafting cost budgets. The code
allocation practice is on to allot the codes based on direct cost and than to the sub
division or activity the codes are both all allotted to process and product.
In case of finance and accounts, situation is different in case where the tally accounts
and budget codes are same and in circumstance where they are different. In case
where they are different the budget accounting system codes are input against each
account automatic conversation to BAS codes occur where they same.
Budget is tracked against the cost centers and sub centers are defined with the
responsibility center but currently the responsibility centers are not in use the stores
consumption tracked till the cost center and sub center level at the time of
consumption itself for other expenses like repairs and maintenance travel expense and
other office expenses the cost center and sub centers are entered to categories the
expenses after exporting them into an oracle based system from the tally system for
the purpose of tracking. A quarterly budget review report is prepared depicting the
quarterly budget amount actual expense and variance figures along with the
cumulative figures.
Objectives
Knowledge
Education, co-operation
Flexibility
• ACCORDING TO NATURE:
• Operating Budget
• Financing Budget
6. SOURCE OF FINANCE
Where money comes in company is important because this financial facility useful for
company activity. There are two types of source of collecting money in market first
one is short term source and second is long term source long term source of finance is
useful for fixed assets and short term finance source is useful for company day to day
activity.
• Secured loan
• Unsecured loan
•
b) Short term sources of company
• Deposit
• Bank loan
Every business concern irrespective of its, nature and needs of working capital. Funds
are needed to carry out business operations such as purchase of raw materials,
payment of wages and other day-to-day expenses, these funds are known as working
capital the key difference between long term financial management and working
capital management is in terms of the timing of cash. While long-terms financial
decisions like buying capital equipment or issuing debentures invoice cash however
an extended period of time, short-term financial decisions typically involves cash how
within a year or within the operating cycle of the firm. The concept of working capital
has been a matter of great controversy among the financial wizards. There are two
concept of working capital-gross & net.
Gross working capital refers to the funds invested in current assets. Current assets
are the assets, which can be converted into cash within one year and includes stocks,
debtors, cash, short-term securities and bills receivable.
The gross working capital concept focuses on two aspects of current assets
management. How to optimize investment in current assets? How should current
assets financed?
The consideration of the level of the current assets should avoid two danger points -
excessive and inadequate investment in the current assets. Investment in the current
assets should be just adequate to the need of the business firm. Excessive investment
in the current assets should be avoided since it impairs firm's profitability, as idle
funds generate nothing. On the other hand inadequate investment in the current assets
can threaten the solvency of the firm because of its inability to pay the current
obligations. Another aspect of the gross working capital points to the need of
arranging to finance the current assets. Whenever the need for working capital rises
for any reason, financing arrangement should be made quickly. Similarly some
surplus funds arise they should be invested in the short-term securities.
Net working capital refers to the difference between current assets and current
liabilities. Current liabilities are those claims of creditors that are expected to mature
for payment within one year and include creditors, bills payable and outstanding
expenses.
Net working capita; is the qualitative concept. In indicates the liquidity position of the
firm. The good liquidity means maintaining current assets in excess of current
liabilities. A weak liquidity poses a threat to the solvency of the company.
Net working capital also covers the question of judicious mix of long-term and short-
term funds for financing current assets.
The need for the working capital arises due to operating cycle. The operating cycle is
the continuous process so the need for working capital is felt constantly. Thus a
minimum level of the current assets is continuously required by the firm, which is
referred as permanent working capital.
The firm has to maintain extra inventory of finished goods to support the peak periods
of sales activities and investment in receivable may also increase during such period.
On the other hand investment in raw material, work-in-progress and finished goods
will fall if the market slack. Thus the extra working capital need to support the
changing production and sales activities is called temporary working capital. It may
be financed by short terms sources.
In the figure-1 it is shown that working capital is stable over time, while temporary
working capital is fluctuating-sometime increasing and sometime decreasing.
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 88
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
However the permanent working capital line need not be horizontal if the firm's
requirement for the permanent working capital increasing or decreasing over a period
of time.
Need for working capital arises in order to run day-to-day business activities. The
firm should aim to maximize the wealth of the shareholders. In it endeavor to do so, a
firm should earn sufficient return from it operations. Earning steady amount of profit
requires successful sales activity hence firm has to invest enough funds in current
assets for generating funds. Current assets are required because sales do not convert
into cash instantaneously. There is always an operating cycle involved in the
conversion of sales into cash.
OPERATING CYCLE
There is difference between current assets and fixed assets in terms of their liquidity.
A firm requires years to recover the initial investment in fixed assets. On the contrary,
investment in the current assets such as debtors and inventory is realized during the
firm's operating cycle that is usually less than one year.
Operating cycle is the time duration required to convert sales, after the conversion of
resources into inventories into cash. The operating cycle of manufacturing firm
involves three phases: Acquisition of resources such as raw material, labor, power
and fuel etc...
Manufacturing of the product which includes conversion of raw material into work-
in-progress into finished goods. Sales of the product either for cash or on credit.
Credit sales create account receivable for collection.
OPERATING CYCLE
WORKING PROGRESS
RAW-
MATERIAL FINISHED
GOODS
CREDITORS
SALES
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CASH
TRADE
DEBTORS
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
Working capital management usually is concerned with the administration of all the
current assets and current liabilities. Thus it is basically concerned with: -
It is obvious that given a constant level of production higher the amount of working
capital the lower will be the return on investment since capital turnover ratio will be
less. On the other hand lower the amount of working capital the higher would be the
amount of the risk since the company would not have adequate liquidity to meet its
short- term obligation.
The two important aims of the working capital management are: profitability and
solvency. Solvency refers to the firm's continuous ability to meet maturing
obligations. Lenders and creditors expect prompt settlement of their claims as and
when they due. TO ensure solvency, the firm should be very liquid. If the firm
maintains a relatively large investment in the current assets, it will have no difficulty
in paying claims of creditors when they become due and will be able to fill all sales
orders and ensure smooth production. Thus a liquid firm has less risk of insolvency.
However there is a cost associated with maintaining a sound liquidity position. A
considerable amount of the firm's funds will be tied-up in the current assets, and to
the extent this investment is idle, the firm's profitability will suffer. To have higher
profitability, the firm may sacrifice solvency and maintain a relatively low level of
current assets. When the firm does so, its profitability will improve as less funds are
tied-up in the current assets, but its solvency would be threatened and would be
exposed to greater risk of cash shortage and stock-outs.
large nor too small for its requirements. A large amount of working capital would
mean that the company has ideal funds. Since funds have a cost the company has to
pay huge amount as invest on such funds. .
Over capitalization implies that a company has large funds for its requirements,
resulting in a lower rate of return a situation, which implies a less then optimum use
of recourses. A firm has therefore, to be very careful in estimating its working capital
requirements
If the firm has inadequate working capital it is said to be under capitalized, such a
firm runs the risk of insolvency.
Estimate of future working capital based on current assets and current liabilities. The
estimation of future working capital can be made if the amount of current assets and
current liabilities can be estimated as follows:-
The various constituents of current assets and current liabilities have a direct being on
the computation of working capital and the operating cycle. The holding period of
various constituents of operating cycle may either contract or expand the net
operating cycle period; lower will be the requirement of working capital and vice-
versa.
Working capital requirements are always very from industry to industry, firm to firm
etc. The following factors influence the working capital requirement of the firm.
ASSEST
FIXED ASSETS 831957692 898608895 4510945763
CAPITAL WORK IN PROCESS 9695503 10713587 212254155
INVESTMENTS
INVESTMENT IN SHARE 77026920 98191020 98191020
NATIONAL SAVING CERTIFICATE 16000 16000 22000
INVENTORIES 1130026534 1746402925 1900294576
TRADE DEBTOR 628486610 844306783 571369017
LOAN & ADVANCES 278296775 300393847 531448223
CASH & BANK 1515573851 294499251 2346561963
LIABILITIES
AUTHORIZED SHARE CAPITAL 250000000 250000000 250000000
Trading, Profit and Loss Account for the Year ending on 31st March 2009
8 PART – D
HUMAN RESOURCE DEPARTMENT
1 Introduction
2 Organization structure
3 Human Resource planning
4 Recruitment sources
5 Selection methods
6 Placement
7 Training and development
8 Performance appraisal policy
9 Wage and salary administration – job evaluation
10 Promotion and Transfer
11 Role of Human Resource Development
12 Trade union and industrial relation
13 Dispute management
14 Social responsibility
1. INTRODUCTION
“It is basically concerned with two important function is managerial function, under
which planning, organizing, directing, and controlling are included and also
operating function under which procurement development, compensation integration
and separation are included.
Adovin Flippo
Thus in short, it is concerned with the obtaining and maintaining of satisfactory and
satisfied work costs. The main objectives of personnel department are:
Now a day in India, the importance of personnel has been identified and realized and
therefore maximum efforts are being done to develop it and thus DUDHSAGAR has
maintained a separate department having separate nice president.
In DUDHSAGAR DAIRY total member of staff are above 1850, and maximum
member of workers is in powder section & it is 361.
2. ORGANISATION STRUCTURE
H.R. DEPARTMENT
H.R. MANAGER
ASSISTANT MANAGER
SUPER VISOR
CLARK
WORKER
4. RECRUITMENT SOURCES
“Recruitment is a process of searching for prospective employee & stimulating &
encouraging them to apply for jobs in an organization”.
When management official thinks that, in the organization, requirement for the
recruitment & fill up the vacancy, for suitable person for suitable job, to do
recruitment. Company for its better future & earn more profit than earlier, it shall fill
the vacancy & appoint the right person in right place, by advertising on the notice
board, in the magazine, newspaper, & from the past pending application in the
organization.
E.g. the recruiters prepare profiles for each category of works & according
by work and the main specialization, where they should be placed.
RECRUITMENT
INTERNAL EXTRERNAL
1) Internal: -
Internal sources include personnel already available in the company, e.g. its
working force when ever vacancy occur somebody from within the organization is
upgraded transferred promoted & some time demoted.
2) External: -
5. SELECTION METHODS
SELECTION
“It is the process of choosing the prospective candidate who can match best with the
job profile as well as can adjust best with the Organization culture.”
Flippo
After considering the application from the candidate who is given an application for
the job a particular designation, by the selected official creates a selection committee
to select the right candidate. That committee calls the candidate for personal
interview; they select a candidate with his knowledge, practical skill & qualification.
One of the most beneficial points is that candidates have any experience in that type
of work.
Selection is a hard tasks & it is complex in nature. It is also time consuming as well
as costly. In DUDHSAGAR dairy
SELECTION IN DUDHSAGAR
The company has adopted the various methods of selecting the essential workers in
the organization. One of those methods is to call the candidates for personal interview
to know his basic knowledge, attitudes regarding the job and some other basic testing.
For that, company has a selection committee to select a suitable candidate for the job.
Selection for the managerial level post, it’s based on educational qualification as well
as practical knowledge & skill. For workers, it’s based on experience & seniority.
After an employee has been hired, an offer of employment has been extended
and accepted & accepted the final stage in procurement function is to be
concluded namely that of placement of the individual on the new job. Placement
“DUDHSAGAR DAIRY” is also having systematic placement activity i.e. this firm
also checkout all the information of job & job holder before giving him final
placement so that best individual can be fit into the job. In DUDHSAGAR
DAIRY, worker as well as engineers guide to new comers but there are
fewer chances of demotion and transfer.
INDUCTION
“Induction is the process of receiving & welcoming an Employee when he first joins
a company & giving him the basis information he needs to settle down quickly &
happily & start Work.”
Michal Armstrong
Purpose of Induction
Induction in DUDHSAGAR
DUDHSAGAR DAIRY is not having any specific induction procedure i.e. whenever
any new employee is appointed, the information regarding daily work routing & work
rules is given no any other welcome process is carried out in this organization
TRAINING
Training is very important need after selection of the workers for jobs. Training
programme can help to the company in competition period for its quality. Training is
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 101
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
defined as “the act of increasing knowledge and skills of an employee for doing a
particular job”. Training implies activities in that teach employees how to perform
their present job better. In short, training prepares people to perform their present jobs
more efficiently. Training teaches employees required skills, knowledge, attitudes and
helps them improving their performance by improving new skill, new techniques of
doing the work and improving their work habits, and reduces wastage of time or cost.
TRAINING METHODS
This most commonly used & widely accepted method of training is helpful to
the job. On the job training is essentially a process of learning while doing the
job. A variety of on the job training methods may be employed by
organizations, which are discussed below.
In off – the – job training, the training does not form part of actual job activity.
Here, the training is provided first to the new employee either at co classroom or
at training centers owned by organization. When training tests completed,
employee is put one actual job activity. Some of the widely accept off – the –
job training methods are as discussed below.
1) Lectures method
2) Conferences
3) Seminar or group discussion
4) Role play
5) Programmed instructions
6) Case study etc.
The DUDHSAGAR DAIRY is not imparting any training course as far as clerical
staff is concerned. But the supervisors are trained for:
• Gaining knowledge of responsibility
• Cost control and cost effectiveness
• Knowledge of all disciplinary action
• Development of leadership quality
DEVELOPMENT
DUDHSAGAR aims at improving the managerial skills and effectiveness of its every
individual through a planned and deliberate profile and process of learning.
The Human Resource Department of the DUDHSAGAR arranges various
conferences and invites guests and other executives from its different units to audit
the organization and to impart training to the executive. On the contrary, the officers
and managers of this company are also sent to its different units within the country as
well as aboard for the exchange of idea relate to the operation management and also
for the improvement of this technical knowledge.
Flippo
The dairy has a time keeping system. The officers & employees have to mark their
presence in attendance register. There is also card system that is very easy. All the
staff on factory floor is working in the three shifts and each shift is of 8 hours.
It is a universal fact that no one will work without any reward. Thus an employee has
to be properly rewarded for his services rendered to the organization. He should be
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paid reasonable wage or salary. The salary or wage is the remuneration for his service
to the organization.
At DUDHSAGAR, wages and salaries arc paid on monthly basis. A time rate wage
system is followed by the organization. The salary of an employee would include
basic salary plus allowances like house rent, medical allowance, clearness allowances,
performance allowances, festival allowances, travel allowances, education and
development allowances, leave allowances etc,.
A common method is followed for the wage and salary administration. The present
catalogue record received from the time keeping officer is maintained of each
employee in the register, which is known as "Muster Roll".
Timekeeper sends that muster roll to the account department for attendance of each
and every employee. This will analyze and entered in the computer. The report is
scrutinized and statutory and non-statutory deductions are made. After this salary is
calculated for each employee through computer according to that they prepare salary
sleep of employees.
PROMOTION
Promotion is a term which covers a change & calls for greater responsibility
& usually involves higher pay & better terms & condition of service and therefore, a
higher status or rank. Following points are to be considered while promoting
employees:
Seniority
Vacancies
Opinion of Divisional head, past record, behavior
Skill and knowledge
Experience
Loyalty towards organization
TRANSFER
Promotion means an improvement in pay prestige, position and responsibilities of an
employee within his/her organization. A mere shifting of an employee is a different
job which has better working hours better location and pleasant working conditions
does not amount to promotion. The new job is a promotion. The new job is a
promotion for the employee only when it carries increased responsibilities and
enhanced pay. Transfer is a horizontal movement policy. It does not change authority,
salary, status but only place is changed from one organization to another organization.
DUDHSAGAR gives first preference for transfer to those employees who are coming
from local areas. Normally DUDHSAGAR gives transfer to adjust the work force of
one plant to another. There is no any fix transfer policy. Sometime temporary transfer
is also given to employees.
SAFTEY: DUDHSAGAR provides hand gloves, cap, shoes, apron and other
things for the safety purpose of workers.
PERSONAL ACCIDENT POLICY: the amount for this is set up for every
worker category wise. The premium is paid by the organization on behalf of
workers. In case of any accident this policy is very useful for the workers.
Trade unions as we know exist in most organization. Trade unions are the typical
unions made up of employees of that particular organization. Generally the
employees in order to get better working conditions, better pay scales and to protect
themselves from exploitation form Trade Unions. Trade unions perform the basic
activities of discussions and negotiations with the management regarding the issues of
conflict.
At DUDHSAGAR there are tree trade unions in existence. One trade union is for
workers the other is for clerical staff and finally one is for officials. In the initial stage
there were many strikes had for 2 to 3 days of workers. However since then
DUDHSAGAR has been faced harmonious relations with trade unions. Since
DUDHSAGAR is a co-operative organization each member of trade union works as a
family member of DUDHSAGAR
INDUSTRIAL RELATION
Industrial Relation is concerned with the systems, rules and procedures used by union
and employers to determine the reward for effort and other conditions of
employment, to product the interests of the employed and their employers and to
regulate the ways in which employers treat their employees.
• Uniform approach
• Pluralistic approach
• Marxist approach
• RECOMMENDATION
PRODUCTION DEPARTMENT
• SUGGESTION
The operating expenses are very high. Such has a raw material, research &
extension, packaging, processing, power & fuel etc. In this expenses raw
material consumption is most and company can never controlled. Such
expenses. Because DUDHSAGAR is expanding its dairy network year to
year. So plant machinery consumption, operation expanses and other expenses
will be increase in future. So firm should more focus to increase in sales. So
increasing in the selling of milk products is necessary.
Firm should pay its creditor or societies with in few times. Because if payment
became late. The credit of company may be affected.
In the marketing field to increase the market of new products. Firm should use
more and more distribution channels like DUDHSAGAR parlor, retailer, and
direct selling and media like more advertisement in television, news-paper
posters, board and many more.
• FUTURE CHALLENGES
The future of any institution is a subject, which requires constant attention. The future
is perceived as one embroiled with hardship. Hardships may surface in many forms as
global demands and changes, foreign affiliations, competition, liberalization,
changing values, urban shifting etc. are some of them to name which we foresee and
union has to cope with these.
In future union should adopt latest technology. Union should not sit with foremost
quality of product and co-placement with existing product range but think in a more
innovative way. To stay ahead research and development unit has to be strengthened.
Union also thinks of price to sustain leading position in the market. Prices will have
to remain steady and so union should concentrate on reducing maintenance expenses
rather than proposing increasing product price.
In comparison with other countries, which are in leading position in dairy industry,
the milk-producing animals in our country yield 4 times less milk. Hence, it is the
time that union should seriously review enhancement of milk production by adopting
better animal husbandry practices.
10. BIBLIOGRAPHY
BOOKS:
REPORT:
WEB SITES:
◘ www.indiandairy.com
◘ www.intra.sagar.com
◘ www.amul.com
◘ www.sagar.com
◘ www.gcmmf.com
◘ www.dudhsagardairy.co.in