A

PROJECT REPORT
ON

LOGISTICS MANAGEMENT IN BOMBAY DYEING

MFG. LTD
A detailed study done in
OPERATION

Submitted in partial fulfillment of the requirement for the award of degree of

Master of Management Studies (MMS) under the university of Mumbai
Submitted by
MITHUN LODHA
ROLL NO: 54
BATCH: MMS 2014-2016
Under the guidance of
PROF VEENA CHAVAN

Bharati Vidyapeeths
Institute of Management Studies& Research
Navi Mumbai

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ACKNOWLEDGEMENT
I would like to express my gratitude to all those who gave me the possibility to complete this
project.
I would like to thank my guide PROF. VEENA CHAVAN for her continuous guidance.
I would like to thank my guide PROF SHRIKANT MOKAL for her guidance in company
I am thankful to our DIRECTOR DR D.Y.PATIL for providing me a platform and
supporting me towards the successful completion of this project. I also want to thank my
class mates who have helped me in getting acquainted with various aspects during the
project.
In the end, I express my gratitude to my family who inspired me in doing this work. Without
their inspirations the completion of this work was almost impossible.

MITHUN LODHA

SIGNATURE OF THE STUDENT

(ii)
PLEASE PASTE HERE THE CERTIFICATE FROM THE COMPANY

(iii)
PLEASE PASTE HERE THE CERTIFICATE FROM THE INSTITUTE

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EXECUTIVE SUMMARY
As we know that Bombay Dyeingand Manufacturing Co. Ltd. is a production unit. Whenever
production term comes then first thing comes in our mind that is inventory. Because
inventory is base for any production unit so, when we control and manage the inventory
properly then the company is benefited (By reducing holding and carrying cost of inventory).
Bombay Dyeingand Manufacturing Co. Ltd. has two plant locations in Patalganga and
Ranjangaon, Patalganga unit is for PSF production and Ranjangaon is for Textile Processing.
The project work is done for Patalganga branch. This branch is certified for ISO 9001-2000,
ISO 14001-2004, and OHSAS 18001-1999. TheBombay Dryings PSF material have earned
goodwill and trust of customers and the Bombay Dryings PSF material has come to be
recognized as a powerful symbol of quality.
Raw material for PSF is PTA (PrifiedTeraphthalate Acid) and MEG (Mono Ethylene Glycol)
which is mostly imported from South Korea and Saudi Arab. Here 160 type of PSF is
produced. The type is depending on denier of material viz. 0.8-15 denier with various cut
length, with main four grades: CQ, SS, ST, and OI. Then this raw material goes through
various process (process are detailed in production line overview) and finally PSF is to be
manufactured. The finished PSF is packaged in bale using packing machines. And waste of
PSF is packaged manually. The bale weight is around 400 kg for white material and 250-300
kg for black material.Specific coding stickers are used for convince of Logistic department
like red colour for CQ, blue colour for SS, green colour for ST, no colour for OI.
For this study of inventory management regards to Bombay Dyeingand Manufacturing Co.
Ltd. various techniques such as EOQ, ABC Analysis, FSN Analysis, HML Analysis, XYZ
Analysis, VED Analysis is to be studied. Management minimizes investment in inventory
and meet a demand for the product by efficiently organizing the production and sales
operations. The firm should minimize investment in inventory which involves costs i.e.
ordering cost and carrying cost, so that smaller the inventory, the lower is the cost to the
firm.

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TABLE OF CONTENTS
PARTICULARS

PAGE NO:

Acknowledgement

(i)

Certificates

(ii)

Executive Summary

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Table of Contents

(v)

Chapter 1: Introduction of the Project

1.1: Concept & Significance of the Study

1.2: Objective of the Study

1.3: Scope and Limitations

1.4: Literature Review

Chapter 2: Introduction to Industry

2.1: Introduction to Industry

2.2: Introduction to Company

13

2.3: Organization Structure

23

2.4:Awards& Recognition

24

2.5: Research Methodology

26

Chapter 3: Research Methodology

3.1: Research Design

26

3.2: Data Collection techniques

27

Chapter 4: Data Analysis and Interpretation

28

Chapter 5: Conclusion and Suggestions

5.1: Recommodation

57

5.2: Conclusion

58

Chapter 6: Learning Experience from the summer project

6.1: Learning Experience
6.2 Biblography

60
61

CHAPTER-1
Introduction Of The Project

1.1 Concept & Significance of study

The title of the project is Logistics management at Bombay Dyeing and Mfg. Co. Ltd.
Logistics has been performed since the beginning of civilization. Logistics involves the
integration of various processes like transportation, inventory, warehousing, material
handling, information and packaging. Implementing best practice of logistics has become
one of the most exciting and challenging operational areas of business and public sector

management. One of the several competencies required to create customer value is efficient
logistics. Cost reduction in transportation plays a major role in the current competitive
market.
Logistics is becoming an important factor of gaining and sustaining competitive advantages.
It has gained recognition in business organizations as one of theimportant business
functions and a tool for developing competitiveness. The public distribution systemin the
country needs logistical support for delivering goods at the right place on time and at the
lowest cost. This in turn benefits on saving the transportation cost and time, cost of inventory
and warehousing.As far as the society is concerned, this will also lead to optimum utilization
of scarce resources of fueland reduced cost of transportation expenses.

1.2 Objectives
1. To Study and understand various operations in companys logistics.
2. To study, analyze and improve the inventory management of the company.
3. To analyze inventory techniques implemented at company and understand their impact.

4. To Study the warehousing operationin the company.

5. To identify returns process of the company.

1.3 Scope& Limitations :

Logistics involve the integration of transportation, inventory, warehousing, information,
material handling and packaging of an organization. The operating responsibility of logistics
is the geographical positioning of raw materials, work-in-process, and finished inventories
where required at the lowest cost possible. The study is concentrated with above Logistics
activities of the BOMBAY DYEING &MFG. CO. LTD

Limitations:
- TAKT time (gap between two production processes)
- Fluctuation in demand of FG.
- Outside transportation facility & transporter responsibility.

1.4 Literature Review

Literature portrays logistics and SCM practices from a variety of different perspectives with
a common goal of ultimately improving performance and competitiveness.
Based on literature, we find that the important supply chain practices concerns are mainly
related to:
1. Supply Chain Collaboration and Partnership with various stakeholders such as the product
developers, suppliers, channel partners and end-users.
2. Supply Chain Structure including facilities network design taking into account related
transportation and logistics.
3. Forecasting and Demand Management to cope with supply chain complexity in a costeffective and delivery-efficient way.
4. Use of Information and Communication Technologies (ICT) to facilitate the above.
While there is plenty of published literature that explains or espouses SCM, there is a dearth
of empirical studies examining logistics and SCM practices. Galt and Dale (1991) study ten

organizations in the UK and find that they are working to reduce their supplier base and to
improve their communications with the suppliers. Fernie (1995) carries out an international
comparison of SCM in the grocery retailing industry. He finds significant differences in
inventory held in the supply chain by the US and European grocery retailers, which could be
explained by difference in degrees of their SCM adoption. Tan and Wisner (2000) compare
SCM in the US and Europe. Tan (2002) relates SCM practices and concerns to firms
performance based on data from US companies. He lists nine important supply chain
concerns such as lack of sophisticated ICT infra-structure, insufficient integration due to lack
of trust and collaboration among the supply chain stakeholders and thereby lack of supply
chain effectiveness and efficiencies. Basnet et al. (2003) report the current status of SCM in
New Zealand, while Sahay et al. (2003) discuss supply chain strategies and structures in
India. These surveys rank the perceived importance of some SCM activities, types of
hindrances and management tools on the success of SCM using representative samples
mostly from manufacturing. Quayle (2003) surveys supply chain management practice in
UK industrial SMEs (Small Manufacturing Enterprises) while Kemppainen and Vepsalainen
(2003) probe current SCM practices in Finnish industrial supply chains through interviews of
managers in six supply chains. They analyze the change of SCM both in terms of operational
practices and organizational capabilities. Chin et al. (2004) conduct a survey that examines
the success factors in developing and implementing supply chain management strategies for
Hong Kong manufacturers. Moberg et al. (2002) state that there is little literature on
information exchange. Feldmann and Muller (2003) examine the problem of how to establish
an incentive scheme to furnish reliable and truthful information in supply chains.
There is little literature on logistics and SCM practices in India. Available literature focuses
either on the best practices (Joshi and Chopra, 2004) or on re-engineering of internal
operations of the firms (Deshmukh and Mohanty, 2004, Kankal and Pund, 2004). In context
of ICT, Saxena and Sahay (2000) compare the manufacturing intent to be an agile
manufacturer and their Information Technology (IT) infrastructure in terms of scope of use,
extent of use and integration of IT-based systems. The more recent studies are mainly based
on questionnaire surveys and secondary data sources (Sahay and Mohan, 2003,
www.etintelligence.com, Sahay et al., 2006). Vrat (2004) discusses some issues and

challenges as well as the potential of SCM in India. All these studies find Indian firms
generally lagging behind their counterparts in the developed countries.

CHAPTER-2

Introduction TO Industry

2.1INTRODUCTION TO INDUSTRY
The Indian textile industry is one of the largest in the world with a massive raw material and
textiles manufacturing base. Our economy is largely dependent on the textile manufacturing
and trade in addition to other major industries. About 27% of the foreign exchange earnings
are on account of export of textiles and clothing alone. The textiles and clothing sector
contributes about 14% to the industrial production and 3% to the gross domestic product of
the country. Around 8% of the total excise revenue collection is contributed by the textile
industry. So much so, the textile industry accounts for as large as 21% of the total
employment generated in the economy. Around 35 million people are directly employed in
the textile manufacturing activities. Indirect employment including the manpower engaged in
agricultural based raw-material production like cotton and related trade and handling could
be stated to be around another 60 million.
A textile is the largest single industry in India (and amongst the biggest in the world),
accounting for about 20% of the total industrial production. It provides direct employment to
around 20 million people. Textile and clothing exports account for one-third of the total
value of exports from the country. There are 1,227 textile mills with a spinning capacity of
about 29 million spindles. While yarn is mostly produced in the mills, fabrics are produced

in the powerloom and handloom sectors as well. The Indian textile industry continues to be
predominantly based on cotton, with about 65% of raw materials consumed being cotton.
The yearly output of cotton cloth was about 12.8 billion m (about 42 billion ft). The
manufacture of jute products (1.1 million metric tons) ranks next in importance to cotton
weaving. Textile is one of Indias oldest industries and has a formidable presence in the
national economy inasmuch as it contributes to about 14 per cent of manufacturing valueaddition, accounts for around one-third of our gross export earnings and provides gainful
employment to millions of people. They include cotton and jute growers, artisans and
weavers who are engaged in the organised as well as decentralised and household sectors
spread across the entire country.
INDIAN TEXTILE INDUSTRY STRUCTURE AND GROWTH
Indias textile industry is one of the economys largest. In 2000/01, the textile and garment
industries accounted for about 4 percent of GDP, 14 percent of industrial output, 18 percent
of industrial employment, and 27 percent of export earnings (Hashim). Indias textile
industry is also significant in a global context, ranking second to China in the production of
both cotton yarn and fabric and fifth in the production of synthetic fibers and yarns.
In contrast to other major textile-producing countries, mostly mostly small-scale,
nonintegrated spinning, weaving, cloth finishing, and apparel enterprises, many of which use
outdated technology, characterize Indias textile sector. Some, mostly larger, firms operate in
the organized sector where firms must comply with numerous government labor and tax
regulations. Most firms, however, operate in the small-scale unorganized sector where
regulations are less stringent and more easily evaded.
The unique structure of the Indian textile industry is due to the legacy of tax, labor, and other
regulatory policies that have favored small-scale, labor-intensive enterprises, while
discriminating against larger scale, more capital-intensive operations. The structure is also
due to the historical orientation towards meeting the needs of Indias predominately lowincome domestic consumers, rather than the world market. Policy reforms, which began in
the 1980s and continued into the 1990s, have led to significant gains in technical efficiency
and international competitiveness, particularly in the spinning sector. However, broad scope
remains for additional reforms that could enhance the efficiency and competitiveness of
Indias weaving, fabric finishing, and apparel sectors.
Structure Of Indias Textile Industry
Unlike other major textile-producing countries, Indias textile industry is comprised mostly
of small-scale, nonintegrated spinning, weaving, finishing, and apparel-making enterprises.
This unique industry structure is primarily a legacy of government policies that have
promoted labor-intensive, small-scale operations and discriminated against larger scale

firms:
Composite Mills. Relatively large-scale mills that integrate spinning, weaving and,
sometimes, fabric finishing are common in other major textile-producing countries. In India,
however, these types of mills now account for about only 3 percent of output in the textile
sector. About 276 composite mills are now operating in India, most owned by the public
sector and many deemed financially sick.
Spinning. Spinning is the process of converting cotton or manmade fiber into yarn to be
used for weaving and knitting. Largely due to deregulation beginning in the mid-1980s,
spinning is the most consolidated and technically efficient sector in Indias textile industry.
Average plant size remains small, however, and technology outdated, relative to other major
producers. In 2002/03, Indias spinning sector consisted of about 1,146 small-scale
independent firms and 1,599 larger scale independent units.
Weaving and Knitting. Weaving and knitting converts cotton, manmade, or blended yarns
into woven or knitted fabrics. Indias weaving and knitting sector remains highly fragmented,
small-scale, and labor-intensive. This sector consists of about 3.9 million handlooms,
380,000 powerloom enterprises that operate about 1.7 million looms, and just 137,000
looms in the various composite mills. Powerlooms are small firms, with an average loom
capacity of four to five owned by independent entrepreneurs or weavers. Modern shuttleless
looms account for less than 1 percent of loom capacity.
Fabric Finishing. Fabric finishing (also referred to as processing), which includes dyeing,
printing, and other cloth preparation prior to the manufacture of clothing, is also dominated
by a large number of independent, small scale enterprises. Overall, about 2,300 processors
are operating in India, including about 2,100 independent units and 200 units that are
integrated with spinning, weaving, or knitting units.
Clothing. Apparel is produced by about 77,000 small-scale units classified as domestic
manufacturers, manufacturer exporters, and fabricators (subcontractors).
Growth of Textile Industry
India has already completed more than 50 years of its independence. The analysis of the
growth pattern of different segment of the industry during the last five decades of post
independence era reveals that the growth of the industry during the first two decades after the
independence had been gradual, though lower and growth had been considerably slower
during the third decade. The growth thereafter picked up significantly during the fourth
decade in each and every segment of the industry. The peak level of its growth has however
been reached during the fifth decade i.e., the last ten years and more particularly in the 90s.
The Textile Policy of 1985 and Economic Policy of 1991 focussing in the direction of

liberalisation of economy and trade had in fact accelerated the growth in 1990s. The spinning
spearheaded the growth during this period and man-made fibre industry in the organised
sector and decentralised weaving sector.
ROLE OF INDIAN TEXTILE INDUSTRY IN THE ECONOMY
Textile industry plays a significant role in the economy. The Indian textile industry is one of
the largest and most important sectors in the economy in terms of output, foreign exchange
earnings and employment in India. It contributes 20 per cent of industrial production, 9 per
cent of excise collections, 18 per cent of employment in industrial sector, nearly 20 per cent
to the countrys total export earnings and 4 per cent ton the GDP. The sector employs nearly
35 million people and is the second highest employer in the country. The textile sector also
has a direct link with the rural economy and performance of major fibre crops and crafts such
as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and
crafts persons in rural and semi-urban areas. It has been estimated that one out of every six
households in the country depends directly or indirectly on this sector.
India has several advantages in the textile sector, including abundant availability of raw
material and labour. It is the second largest player in the world cotton trade. It has the largest
cotton acreage, of about nine million hectares and is the third largest producer of cotton fibre
in the world. It ranks fourth in terms of staple fibre production and fourth in polyester yarn
production. The textile industry is also labour intensive, thus India has an advantage.
The key advantages of the Indian industry are:
India is the third largest producer of cotton with the largest area under cotton cultivation in
the world. It has an edge in low cost cotton sourcing compared to other countries.
Average wage rates in India are 50-60 per cent lower than that in developed countries, thus
enabling India to benefit from global outsourcing trends in labour intensive businesses such
as garments and home textiles.
Design and fashion capabilities are key strengths that will enable Indian players to
strengthen their relationships with global retailers and score over their Chinese competitors.
Production facilities are available across the textile value chain, from spinning to garments
manufacturing. The industry is investing in technology and increasing its capacities which
should prove a major asset in the years to come.
Large Indian players such as Arvind Mills, Welspun India, Alok Industries and Raymonds
have established themselves as 'quality producers' in the global market. This recognition
would further enable India to leverage its position among global retailers.
India has gathered experience in terms of working with global brands and this should
benefit Indian vendors.
GOVERNMENT INITIATIVES

With a view to raise India's share in the global textiles trade to 10 per cent by 2015 (from the
current 3 per cent), the Ministry of Textiles proposes 50 new textile parks. Out of the 50, 30
have been already sanctioned by the government (with a cost of US$ 710 million). Set up
under the Scheme for Integrated Textile Parks (SITP), this initiative will not only make the
industry cost competitive, but will also enhance manufacturing capacity in the sector.

INDIAN TEXTILE INDUSTRY SWOT ANALYSIS

Strength
India has rich resources of raw materials of textile industry. It is one of the largest
producers of cotton in the world and is also rich in resources of fibres like polyester, silk,
viscose etc.
India is rich in highly trained manpower. The country has a huge advantage due to lower
wage rates. Because of low labor rates the manufacturing cost in textile automatically comes
down to very reasonable rates.
India is highly competitive in spinning sector and has presence in almost all processes of
the value chain.
Indian garment industry is very diverse in size, manufacturing facility, type of apparel
produced, quantity and quality of output, cost, and requirement for fabric etc. It comprises
suppliers of ready-made garments for both, domestic or exports markets.
Weakness
Knitted garments manufacturing has remained as an extremely fragmented industry. Global
players would prefer to source their entire requirement from two or three vendors and the
Indian garment units find it difficult to meet the capacity requirements.
Industry still plagued with some historical regulations such as knitted garments still
remaining as a SSI domain.
Labour force giving low productivity as compared to other competing countries.
Technology obsolescence despite measures such as TUFS.
Low bargaining power in a customer-ruled market.
India seriously lacks in trade pact memberships, which leads to restricted access to the
other major markets.
Indian labour laws are relatively unfavorable to the trades and there is an urgent need for
labour reforms in India.
Opportunity

 Low per-capita domestic consumption of textile indicating significant potential growth.

Domestic market extremely sensitive to fashion fads and this has resulted in the
development of a responsive garment industry.
India's global share is just 3% while China controls about 15%. In post-2005, China is
expected to capture 43% of global textile trade.
Companies need to concentrate on new product developments.
Increased use of CAD to develop designing capabilities and for developing greater options.
Threats
Competition in post-2005 is not just in exports, but is also likely within the country due to
cheaper imports of goods of higher quality at lower costs.
Standards such as SA-8000 or WARP have resulted in increased pressure on companies for
improvement of their working practices.
Alternative competitive advantages would continue to be a barrier.

2.4INTRODUCTION OF COMPANY
Profile of the company
Name of the industry:

BOMBAY DYEING & MANUFACTURING CO. LTD.

Name of the owner:

THE WADIA GROUP.

Type of industry:

PROCESSING INDUSTRY PSF Plant.

Address:

A-1, PATALGANGA INDUSTRIAL AREA, P.O. BOX NO.5 DIST-RAIGAD

MAHARASTRA (410220)

Bombay Dyeing is the part of the Wadia group, which is more than 130 years old. Wadia
group initially ventured into the area of ship building, and more than 355 ships were
designed and built by the group. As the industrialization grew in the 19 th century, so did the
trading and new opportunities for the business. In the late 19th century Bombay was next only
to New Orleans as the worlds largest cotton port. NowrosjeeWadia sensed an opportunity in
Indias mushrooming textile industry and on august 23,1879,Bombay dyeing was founded in
a humble red brick shed with beginning of a small operation where cotton yarns spun in
India was dip dyed in hand in three colors-turkey red, green and orange and laid out in the
sun to dry. The company started with grey yarns in 1895 and soon after had surplus
production, which it exported to china since then Bombay Dyeing has grown into one of the
India's largest producer of textiles.

Company Results and Dividends

The Companys turnover increased by 22% and by Rs.1732crore during the current year as
compared to Rs.1418crores in the previous year. The Textile division recorded decline in
turnover from Rs.334crores last year to Rs.294crores in the current year. The PSF division
recorded a turnover of Rs.867crores for the current year compared to Rs.811crores last year.
The revenue from the Real Estate division during the current year was Rs.562crores as
compared to Rs.273crores last year. The profit after tax for the current year was

Rs.18.42crores compared to a loss of Rs.194.62crores in the previous year. The financial

performance of the Company has improved compared to the last year. The demand for textile
products remained stagnant in the domestic market. The export market declined due to low
demand in USA and Europe. The performance of the PSF division was adversely impacted
due to non-availability of raw material and over-supply situation in the market.
The Real Estate Division showed marked improvement due to sale of residential units at a
better realization per flat. The Division also sold the remaining space in the commercial
building at Worli. The Companys results were also impacted due to increase in finance costs
arising from higher borrowings required for the operations. Your Directors recommend a
dividend of Rs.2.50 per share for the year ended 31st March, 2010 to be paid, if declared by
the members at the ensuing Annual General Meeting, as compared to dividend of Re. 1 per
share in the previous year.

Textile Division
The overall turnover declined by 12% from Rs.334crores to Rs.294crores, mainly on account
of lower exports at Rs.50crores compared to Rs.80crores in the previous year. Domestic
retail sales witnessed the effect of economic slow-down in the beginning of the year, but
recovered during the latter part of the year under review. Retail sales at Rs.158crores during
the year were at the same level as last year. The profitability of the Division suffered from
the effects of falling exports, competition in the domestic market and sharp rise in raw
material cost. Several steps have been initiated to improve the performance of the Division

such as increased capacity utilization, reduction of factory cost through improved efficiency,
lower wastages, reduction in selling & distribution expenses and administrative overheads
etc. Inventory and receivables have been reduced considerably resulting in lower burden of
interest on working capital. The Division is striving to improve the sales volume by better
marketing in domestic as well as exports market. The international and domestic demand has
started looking up with the improved global economic environment.
Polyester Division
PSF industry in the country continued to face excess capacity. Despite the adverse conditions
the Company could increase sales volume of PSF by 42% as compared to the previous year.
The Company achieved average capacity utilization at 77% for the year which is comparable
with the industry standards. In March quarter, the capacity utilization rose to 88%. Division
profitability suffered on account of low realization due to severe competition coupled with
higher raw material prices. Although export markets expanded, the margins remained under
pressure. Switch over from liquid fuel to Natural Gas in second half helped to reduce the
energy cost. The company is pursuing a strategy to increase capacity utilization, confine to
focused profitable product range, reduce cost in areas of operations including import of raw
material on long term contract basis and expand the share in the domestic market to improve
overall sales realization.

Real Estate Division

The revenue from the Real Estate Division was Rs.562crores during the current year
compared to Rs.273crores in the previous year. During the year the Company sold the
remaining part of the commercial building under construction at Worli and also some flats in
the building under construction at Spring Mills, Dadar. The Company has also leased out
surplus space in the existing properties, income from which has started accruing from March
quarter 2010. The construction of the residential tower at Spring Mills and the commercial

building at Textile Mills is nearing completion. The demand for residential property has
picked up and prices of the same have also witnessed a steady rise in the past few quarters.
Your Company will be progressing the next phase of development with a view to leverage
the market trends.
Fixed Deposits
Company has discontinued acceptance of fixed deposits from June 2009. Deposits of
Rs.81.14crore were outstanding as at 31st March, 2010. No deposits have matured as at 31 st
March, 2010.

Polyester Division Details

Industry Structure and Developments Amongst the three major PSF producers in the
country, your Company recorded highest volume growth at 40 % as compared to the industry
growth of 16 %. The growth momentum is expected to continue during the current year. The
exports are also expected to be maintained at current levels, thereby enabling the company to
further improve the capacity utilization in the coming year.
Opportunities and Threats Steady rate of growth in PSF demand and increasing prices of
cotton, viscose and acrylic fibers make way for higher capacity utilization of the PSF plant as
well as improved realization. Strategy to rely more on contracted import of raw materials
will help to avoid raw material availability constraint. Use of Natural Gas helps in curtailing
the conversion cost. However, wide fluctuation in crude oil prices and exchange rate have
ma cascading impact on raw material and finished goods prices and consequently, the
margins may be adversely affected. Irrational competitive actions may also result in lower
profitability.
Outlooks Continued healthy GDP growth is expected to boost the demand for PSF,
especially in a scenario where other fibers are witnessing sharp price escalation. The advent
of Technical Textiles is also gaining momentum, and will offer opportunities for growth in
high margin niche areas. The raw material availability is expected to ease with new
capacities both in India and neighboring countries.

Risks and concerns Wide fluctuation in crude oil prices, exchange rate and any political
uncertainties in West Asia will affect the prices and availability of key raw materials.
Although we have taken adequate measures to ensure availability of raw materials from
various sources, nevertheless, the price instability arising out of such consequences may
affect our business prospects.

Analysis of the Annual Report 2011

Analysis of Profit & Loss Account for the year ended as on 31st March 2011

Gross Sales has increased by 35% as compared to the previous year 2010-11 which in
turn has boosted the total income of the company.

Total income shows increase of Rs.274.57crore which is a favorable sign for

company and also for forecasting the next quarter digits of accounts.

As the working capital increases to meet the market demand of the product, the
expenditure and the cost of sales and production also increase and here for this year
ended as on 31st March 2011, expenditure has shown a 14% increase with
Rs.275crore.

Since there is an increase of 24% in profit before tax its good sign for the company
for next quarter.

Analysis of Balance Sheet as on 31st March 2011

Reserves and Surplus in the balance sheet as on 31 st March 2011, has increased by
Rs.917.84Crore as compared to previous years which is good sign for company in
coming quarters.

Loan funds i.e., loans availed are decreased by Rs.537.81Crore, it is favorable

position for the company but the working capital of the company is negatively
affected due to this condition.

Depreciation on fixed assets has 21% of increase as compared to previous year 2010.

Inventory management cost has shown a high increase of Rs.887.48Crore which is a

matter of concern, since it affects Net working capital of the company negatively.

Net current liabilities has shown increase of 4% increase, and if these are decreased
in coming quarter then there can be a most favorable situation.

Analysis of Cash flow statements for the year ended as on 31st March 2011

Cash and Cash equivalents inflow from operating activities is Rs.551.97Crore which
has increased by 86% as compared to previous year.

The above cash has been used for investing activities and for the year it is
Rs.31.51Crore which has decreased by 63% and hence the effect on net income
forecasted for next few years may prove to be negative.

Cash and cash equivalents used for financing activities is Rs.597.37Crore. This
outflow of cash has increased by 74% as compared to previous year.

The total cash decrease for the year is Rs.13.89Crore which has been increased by
35% as compared to previous year. Hence total amount of cash decrease is
Rs.13.89Crore which is a major concern, but if this cash and cash equivalents
decrease is due to net working capital or inventory management, then it is not a
problem for company since, work in progress and the finished goods sales can
generate cash in next quarters. For the next analysis we have,

Particulars
a. Closing Stock
Work in progress
Finished goods
Office Premises

Amount in Crore Rupees

24.89
101.46
0.30

b. Opening stock
Work in progress
Finished goods
Office premises

18.34
60.52
0.30

c. Total(b-a)

(47.49)

Since we get that the working capital investment is Rs.47.49Crore which has caused the
increase in cash usage and hence cash and cash equivalents has decreased.

Vision
We will offer differentiated PSF specialty products and services in a most economical way
and create value for the customers and nation.

Mission
We will discommodities our PSF business and pursue niche market to have competitive
advantage.

LOGO OF BOMBAY DYEING-WEIGHING BALANCE

The logo states the following figuresOne side -

Money given by the customer

Other side -

Fabric bale

On the weighing balance the vessel which contains fabric bale is always heavier than the
vessel containing money.
The logo expresses to its customers that the quality of the fabric is always greater than the
money placed on the other side.
Bombay Dyeing at present is the largest exporter of sophisticated made-up items and also of
products made of cotton and poly cotton. Bombay Dyeing has created a sizable market in the
production of a wide range of fabrics and ready-mades. This includes both formal and casual
wear. The consumer section of Bombay Dyeing comprise of bed linen, towels, furnishings,
suiting and shirting fabrics, and cotton and polyester blended dresses and saris.

Patalganga Unit

BDMC (Polyester division), Patalganga the new PSF plant is of around 452 crores. Total
area of plant is 41 acres. Total no. of employees in 3 shifts is 464.The Patalganga unit of
BDMCL has a maximum throughput capacity of 540 tonnes per day. The normal daily
production however varies depending upon market requirements. It usually operates around
320 tonnes per day. At patalganga polyester plant, a final product called POLYESTER
STAPLE FIBRE, abbreviated as PSF is produced.
The process is comprised of one major reaction namely continuous polymerization PTA
(purified terephthalic acid) and MEG are polymerized in three steps to produce the polymer.
The polymer is then fed to spinning unit where it converts into spun fibre. From spinning
unit, it is fed to fibre draw line, where it is drawn.
Polyester Plant is situated at Patalganga, 70 Km. away from Mumbai & 35 Km. from JNPT,
Maharashtra.
1) It maintains high standards of Safety, concern for Environment and Energy Conservation
measures.
2) It is certified against ISO 9001-2000, ISO 14001-2004, and OHSAS 18001-1999.
3) It has received 5 Star Safety Statuses with Sword of Honor by British Safety Council.
4) It is the earliest signatory to Responsible Care initiative of the ICMA.

Products:

PSF (Polyester Staple fibre)

Polyester chips

Finished PSF:

160varieties, 0.8-15 denier with various cut length

Main four grades:

CQ, SS, ST, OI

2.5 Organigram:

Awards & Recognition

1. Home and life style retailer of the year 2005 awards instituted by ICICI bank
payment solution and ksatechnopak

2. Images fashion awards 2006 as best brand in the home fashion category.

3. Super brand 2006-2007 in recognition of its commitment to constantly providing

value to the customer.

4. Largest domestic brand in made ups and home textile at the textile conclave 2013Brand India.

5. Brand leadership award in retail sector ( Merit) 2013- For the brand that has
established and maintained its leadership in the retail sector.

CHAPTER-3
RESEARCHMETHODOLOGY

3.1 Research Methodology

REDMEN & MORY defines, Research as a systematized effort to gain knowledge.
It is a careful investigation for search of new facts in any branch of knowledge. The purpose
of research methodology section is to describe the procedure for conduction the study. It
includes research design, sample size, data collection and procedure of analysis of research
instrument.
Research always starts with a question or a problem. Its purpose is to find answers to
questions through the application of the scientific method. It is a systematic and Intensive
study directed towards a more complete knowledge of the subject studied.

RESEARCH DESIGN :
Acc. to Kerlinger, Research design is the plan structure & strategy ofinvestigation
conceived so as to obtain answers to research questions and to controlvariance.
Acc. to Green and Tull, A research design is the specification of methodsand procedures
for acquiring the information needed. It is the overall operationalpattern or framework of the
project that stipulates what information is to be collected from which sources by what
procedures.
Its found that research design is purely and simply the framework for a study thatguides the
collection and analysis of required data.
Research design is broadly classified to :
Descriptive research design
Exploratory research design
This research is aExploratory research. The major purpose of this research isdescription of
state of affairs as it exists at present.

3.2 Data Collection

1. Primary data
The researcher used qualitative research data collection method, in which the following
-

specific methods are used.

Observation
interview

2. Secondary data
The researcher used internal and external sources (methods) of data collection.
- Internal source is fully processed viz. company manuals
- External sources are published viz. books and journals, & electronic database viz. internet

CHAPTER-4
Data Analysis
AndInterpretation

4.3 LOGISTICS
4.3.1 Definition

Logistics is the management of the flow of goods, information and other resources, including
energy and people, between the point of origin and the point of consumption in order to meet
the requirements of consumers. Logistics involve the integration of information,
transportation, inventory, warehousing, material-handling.
Logistics as a business concept evolved only in the 1950s. This was mainly due to the
increasing complexity of supplying one's business with materials and shipping out products
in an increasingly globalize supply chain, calling for experts in the field who are called
Supply Chain Logisticians. This can be defined as having the right item in the right quantity
at the right time at the right place for the right price and is the science of process and
incorporates all industry sectors. The goal of logistics work is to manage the fruition of
project life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus
(outbound logistics). Inbound logistics is one of the primary processes and it concentrates on
purchasing and arranging inbound movement of materials, parts and/or finished inventory
from suppliers to manufacturing or assembly plants, warehouses or retail stores and
Outbound logistics is the process related to the storage and movement of the final product
and the related information flows from the end of the production line to the end user.
The main functions of a qualified logistician include inventory management, purchasing,
transportation, warehousing, consultationand the organizing and planning of these activities.
Logisticians combine a professional knowledge of each of these functions so that there is a
coordination of resources in an organization. There are two fundamentally different forms of
logistics. One optimizes a steady flow of material through a network of transport links and
storage nodes. The other coordinates a sequence of resources to carry out some project.

4.3.2 Responsibility and authority

Sr. MANAGER-LOGISTICS

RESPOSIBILITY
a) Implementation and maintenance of quality system in logistics department and review its
effectiveness.
b) Improvement project to release objectives of business and quality plan in logistics
c)
d)
e)
f)
g)
h)
i)

department.
Establishing and administration on effective cost control in logistics department.
Overview dispatch logistics of finished goods and coordination of PTA receipts.
Monitoring performance of all transporters and rating them.
Contract management of all outsourcing directly handled by the department.
Submit monthly MIS report to JMD through Divisional Manager.
Monitor resources requirement and replenish as necessary.
Monitoring export consignment.
AUTHORITY

a) Adjudicate grievances disputes/ claims of contractors, directly handled by logistics

department.
b) All authority of Dy. Manager-Logistics/ Asst. Manager-Logistics.
c) Signing in transporters/logistics bill.
Dy. MANAGER- LOGISTICS
RESPOSIBILITY
a) Receive sales order from marketing/regional sales offices duly approved by VP/JMD
b) Contact various transporter and to arrange for trucks for various destinations as per sales
c)
d)
e)
f)
g)

order.
Ensure that requisite number of trucks report at gate in time.
Minimize the turnaround time of transportation.
Ensure that the trucks supplied by the transporter are in good condition.
Generate report for MIS
Timely release of agencys bill.

AUTHORITY
a)
b)
c)
d)

Signing of purchase requisition.

Signing of RGP, MIVs, MRVs, and GRNs
Signing material rejection/shortage excess advice, delivery challan cum gate pass.
Identify the training needs for the department and organize training as appropriate

consultation with training department.

e) Generate report for MIS with appropriate authority.
f) Implementing and maintaining the quality policy and system.
g) Transfer activities (truck movement)

Asst. MANAGER
RESPOSIBILITY
a) Ensure that the functions of factory warehouse, buffer zone and offsite W/H including
b)
c)
d)
e)

despatch activities are carried out smoothly.

Meet all the statutory requirements to carry out above operations.
Oversee the administration and safety of the warehouse.
Utilize resources available with the department to the optimum level.
Co-ordinate and correspond with all the other departments including QC and statutory

authorities.
f) Ensuring safety of warehouse, material handling equipment and manpower.
AUTHORITY
a)
b)
c)
d)

Signing of material requisition.

Signing of RGP, MIVs, MRVs, and GRNs
Signing material rejection/shortage excess advice, delivery challan cum gate pass.
Generate report for MIS in absence of Dy. Manager.
LOGISTICS ASSISTANT
RSPOSIBILITY

a) Prepare daily dispatch report and stock report.

b) Take note if sales orders from SAP and check availability of material. Arrange trucks for
c)
d)
e)
f)
g)
h)

dispatches and keep follow up for it.

Register truck entry and give SO no. to transporter representative on LR for truck gate in.
Co-ordinate for dispatches with regional offices.
Unloading of imported PTA containers.
To ensure PSF waste bagging is done timely to keep waste area free .
Loading of PSF, CHIPS and waste.
Prepare returnable gate pass for logistics activity.
AUTHORITY

a) To book trucks for dispatches.

b) To instruct shop floor people for smooth operation of logistic department.
4.3.3 Recourse management
a) Financial resources:
To meet the expenses for the entire financial year, an annual budget is prepared considering
the previous years actual expenditure, current years continuity of similar expenditure and
the scale of current year activity / plans. The annual budget copy is submitted to DGMmaterials & logistics for compilation and eventual authorization as per procedure laid out in
Apex manual.

b) Capital budget approval:

Whenever the need arises for additional equipment, tool, material handling equipment, for
warehouse, a request letter highlighting details of the item required, specification, quantity,

justification for the item requisitioned is made to the Sr. Manager-Materials & Logistics.
After reviewing, DGM-Materials & Logistics takes the approval from VP.
Works contract/ plan change approval:
When the resource requirement is for plant change/ service oriented, requisition is raised for
works contract. It is sent to DGM-Materials & Logistics /VP (commercial). On receipt of
approval, the work is issued by the engineering services department on specific party for
executing the work.

c) Manpower resources:
Any additional manpower requirement arising out of necessity/ vacancies is informed to
Personnel & Administration (P&A) department by Dy. Manager Logistics through DGM

Materials & Logistics/ VP.

Temporary contract labour as and when required to cope with the extra workload is
mobilized by putting up a requisition to the Chief Operating Officer(PSF) justifying
requirement. Once his approval is received, the letter is forwarded to Personnel &
Administration-Department for arranging the manpower required.
4.3.4 Storage and preservation

The entire layout of buffer zone, warehouse is laid out and identified.
Storage of all products is done as per the location provided.
The storage of products is planned in such a way that safety of items and personnel during

handling is ensured.
Normally the bales are stacked in tier of maximum 6 layers.
Storage area are examined periodically so that deterioration, if any are detected promptly at

the early stage and dealt with suitably.

The packed PSF is delivered to the customer as per detailed.
In case of any emergent situation when product is kept outside the covered area of ware
house, it is properly secured, kept over tarpaulin and covered with polythene sheets.

4.3.5 Stock verification

Periodic assessment of stock:

Stocks in warehouses are assessed on a periodic basis to detect deterioration and also to
verify quantity. During assessment, if damage or deterioration is apparent, such product will
be assessed by appropriate internal functions and a follow-up action is taken. The disposition

of items will be based on such assessment.

This stock verification is done once in a month.
Perpetual audit:
Logistic Assistant/ Sr. Executive checks the actual stock in comparison with book stock and
any deviation noticed are rectified and repot Asst. /Dy. Manager-Logistics.
4.3.6 Receipt and storage of packed PSF bales

After the production is declared by production department and the quality is checked and
declared by QC lab. The Logistics Assistant physically checks this and arranges for shifting
the QC lab cleared bales from baler area with the help of Forklift operator to in-plant
warehouse. For shifting to offsite warehouse dedicated trucks are used. Shifting from baler
area is 24*7 continuous jobs to create space to accommodate fresh production of bales. The
bales are normally weighting 400 kgs and from one line same merge no is produced but these

may be of different degrees e.g OI,II ST, SS CQ.

From SAP, location of the same merge no. and grade, if previously produced, is identified.
Specific area for particular Denier no. is designated. If space is not available, in that
designated area, then the available vacant rows are identified and this row no. is allotted for

the bales.
If full row is not available for keeping the new merge no production, then rearrangement of

bales is done to get a clear row and shifting of material is done accordingly.
Bales are loaded from buffer area into flat bottom trucks and transit transport is done to the
identified warehouse location. This movement is done on the strength of Excise invoice on
payment of duty. Similarly loading and in-transit operation is done in 1 st and 2nd shift only.

Operation in 3rd shift is done only in exceptional condition.

Morning shift Logistics Asst. takes over 2nd shift production from PSF production
department, identify location from SAP, enter row no. in SAP and then start transporting to
identify warehouse. If direct loading from buffer area is required then after taking over

production from production department and entering into SAP, dispatch is done.
One forklift in each shift operates for shifting from buffer zone to loading into trucks. One
Logistics Asst. in each shift takes charge in buffer zone. When plant will run at full capacity,

then two forklifts will be required for shifting and loading into trucks.
Both the loading bays will be used for transit operation all the time.

Warehouse assistant receives bales in flat bottom trucks. Bales are first unloaded and kept for
inspection. The driver handovers the list of bales that was received from buffer zone
Logistic-Asst. to the warehouse Logistics Asst. warehouse Asst. inspect the bales, confirm
the allocation available and put the bales in designed row.
4.3.7 Dispatch

Sales order by Marketing to Logistics based on product code, customer code, shipping point

and weight.
Entry into system by Logistics.
Transport is arranged by Logistics.
Transporter report at gate with LR copies and sales order number. 3 copies of loading advice

is given to transporter by offsite weighbridge/ gate.

The trucks are surveyed for availability of tarpaulin on the floor and the dryness of the

tarpaulin.
Logistics generate picks list from the system.
Based on pree dispatch list bales are shifted by forklift operator to loading point. Logistics

checks the bales as per pree list & give clearance to load.
Entry of bale no. in done into system as per material loaded in truck, all three loading advice

will be filled up with details of bales one loading advice will be kept at warehouse.
Care is taken that bales are handled properly without any physical damage. In case they are

damaged/ torn, it is replaced.

Stock register will get updated from system.
Dispatch details are entered in daily report register kept at warehouse.
Checklist is filled by concerned Logistics Asst.

4.3.8 Dispatch procedures

A) Dispatch procedure Logistic Domestic
1. Mrkt. to punch Contract, Sales orders for dispatches.
2. Mrkt. to arrange trucks for dispatches.
3. Logistic to sign LR to allow truck inside for loading by checking SO, material availability,
prorate if any given.
4. Security Dept. makes Gate Entry of truck as per LR given.
5. Accounts Weighing Bridge make weighment& give loading slip to truck driver.
6. Logistic checker/supervisor/SAP operator received loading slip & LR from driver.

7. SAP operator check LR, loading slip in totality, e.g. customer name, order qty., etc. if all is
compiling, prints material list & handed over to logistic supervisor/checker.
8. Checker traces material from given material list.
9. Forklift operator load material in truck under the control of supervisor/checker.
10. Supervisor hand over list of loaded material to SAP operator.
11. SAP operator generate excise invoice & handover document such as excise invoice copy,
LR copy, packing list etc. to driver.
12. Weighing Bridge make weighment of loaded truck.
13. Securities Dept. finally release truck by checking correction for net wt. as per SAP &
weighing slip.

B) Dispatch procedure Logistics Export

1. Mrkt. to mail export DO
2. Logistics to generate contract in SAP.
3. After GM & JMD approval logistic to generate SO & PO in SAP.
4. Commercial Dept./Mrkt. to arrange containers for dispatches.
5. Logistic to mail PO to Security Dept. for allowing containers for export loading.
6. Security Dept. makes Gate Entry of containers as per PO mailed by logistic & LR given
by transporter.
7. Accounts Weighing Bridge make weighment& give loading slip to truck driver.
6. SAP operator received loading slip & LR from driver.
8. SAP operator check LR, loading slip in totality. e.g. customer name, order qty., etc. if all is
compiling, prints material list & handed over to logistic supervisor/checker.
9. Checker traces material from given material list.
10. Forklift operator load material in container under the control of supervisor/checker.
11. Supervisor hand over list of loaded material to SAP operator.
12. SAP operator generate billing document, packing list & mail it to Accounts Dept. for
further processing.
13. Accounts Dept. to generate excise invoice, ARE Form, commercial invoice, packing list
etc.
14. Accounts to get clearance from excise.

15. Excise to punch led seal, excise seal, shipping line seal (account Dept).
16. Account to handover document to container driver.
17. Weighing Bridge make weighment of loaded container.
18. Security Dept. finally releases containers by checking correction for net wt. as per SAP
& weighing slip.
C) Dispatch procedure Logistics NEPAL Export
1. Mrkt. to mail Nepal export DO.
2. Accounts Dept. to generate contract, SO in SAP.
4. Customer/ Mrkt. to arrange containers for dispatches.
5. Logistics to mail SO to Security Dept. for allowing trucks for Nepal export loading.
6. Security Dept. makes Gate Entry of trucks as per SO mailed by logistics & LR details
given by transporter.
7. Accounts Weighing Bridge make weighment& give loading slip to truck driver.
8. SAP operator received loading slip.
9. SAP operator checks Gate entry, SO, loading slip in totality. e.g. customer name, order
qty., etc. if all is compiling, prints material list & handed over to logistic supervisor/checker.
10. Checker traces material from given material list.
11. Forklift operator load material in truck under the control of supervisor/checker.
12. Supervisor hand over list of loaded material to SAP operator.
13. SAP operator generate billing document, packing list & mail it to Accounts Dept. for
further processing.
14. Accounts Dept. to generate excise invoice, Nepal invoice, ARE Form, commercial
invoice, packing list etc.
15. Accounts to get clearance from excise.
16. Excise to punch led seal.
17. Account to handover document to transporter.
18. Transporter to prepare LR.
19. Logistics to check correctness of LR prepared by transporter.
20. Weighing Bridge make weighment of loaded truck.
21. Security Dept. finally releases truck by checking correction for net wt. as per SAP &
weighing slip.

4.3.9 Process flow chart of dispach activity

A) Buffer zone to Customer

B) OFFSITE TO CUSTOMER

4.3.10 Returns

Products are returned by the customer through duly paying documents under cover of letter

citing reason for return.

A returned product is shifted to assigned location.

RETURN OF MATERIAL

4.3.11 Transportation

Region wise transporters are assigned contractually by Marketing Department.

As per sales order, the concerned transporter is contacted, addressing shipping point, quantity

and delivery date.

Number of trucks to report with date and time will be confirmed.
Intimation though mail & telephone will be given.
Follow up will be done with the transporter.
Vehicles will reach plant for loading along with L.R copies & sales order no.
Transportation companies

1) Surat Goods Transport Pvt. Ltd

2) Sudhir Roadways Corporation
3) West Coast Logistics
4.3.12Handling of PSF wastes

PSF waste is considered as finished product for all commercial dealing & sales contract is

finalized by Marketing Department.

Detailed instruction about DOs and DONTs while handling/ loading are explained to

customer by Logistics Department.

The waste material is duly segregated by user at source and is dumped in designated area.
a) The waste material is decontaminated from the process material by user Dept. before it is
shifted to the designated area.
b) The contractor his personnel and also concerned personnel from BDMC are trained in

handling and transportation of wastes.

The material safety data sheet for the PSF waste and handled by Logistics personnel.
As per sales order PSF waste loaded in customer truck with the help of forklift, weighment
done & Invoice generated.

4.4 INVENTORY CONTROL OF FINISHED GOODS (BALES)

4.4.1 Introduction

The term inventory means the value or amount of materials or resource on hand. It
includes raw material, work-in-process, finished goods & stores & spares.

Inventory Control is the process by which inventory is measured and regulated

according to predetermined norms such as economic lot size for order or production, safety
stock, minimum level, maximum level, order level etc.

Inventory control pertains primarily to the administration of established policies,

systems & procedures in order to reduce the inventory cost.
4.4.2 Objectives of Inventory Control

To meet unforeseen future demand due to variation in forecast figures and actual
figures.

To average out demand fluctuations due to seasonal or cyclic variations.

To meet the customer requirement timely, effectively, efficiently, smoothly and

satisfactorily.

To smoothen the production process.

To facilitate intermittent production of several products on the same facility.

To gain economy of production or purchase in lots.

To reduce loss due to changes in prices of inventory items.

To meet the time lag for transportation of goods.

To meet the technological constraints of production/process.

To balance various costs of inventory such as order cost or set up cost and inventory
carrying cost.

To minimize losses due to deterioration, obsolescence, damage, pilferage etc.

To balance the stock out cost/opportunity cost due to loss of sales against the costs of
inventory.

To stabilize employment and improve lab our relations by inventory of human

resources and machine efforts.
4.4.3 Benefits of Inventory Control

Ensures an adequate supply of materials.

Minimizes inventory costs.

Facilitates purchasing economies.

Eliminates duplication in ordering.

Better utilization of available stocks.

Provides a check against the loss of materials.

Facilitates cost accounting activities.

Enables management in cost comparison.

Locates & disposes inactive & obsolete store items.

Consistent & reliable basis for financial statements.

4.4.4 Factors Affecting Inventory Control

Type of product

Type of manufacture

Volume of production

Finances

Availability of material

4.4.5 Technique of inventory control analysis:

A) ABC Analysis
What is ABC Analysis?
ABC analysis is a type of analysis of material dividing in three groups called A-group items,
B-Group items and C-group items For the purpose of exercising control over materials.
Manufacturing concerns find it useful to divide materials into three categories.An analysis of
the annual consumption of materials of any organisation would indicate that a handful to top
high value items (less than 10 per cent of the total number) will account for a substantial
portion of about 70 per cent of total consumption value.
Remember: 10% of total number of items carries 70% of value. - "A" group items. Similarly,
a large number bottom items (over 70 per cent of the total number of items) account for only
about 10 percent of the consumption value.
Remember: 70% of total number of items accounts for only about 10% of consumption value
- "C"-group items. Between these two extremes will fall those items the percentage number
of which is more or less equal to their consumption value.
Remember: 20% of total number of items account for only about 20% consumption value "B" group items. Items in the top category are treated as "A" items, items in the bottom
category are called as "C" category items and the items that lie between the top and the
bottom are called "B" category items. Such an analysis of materials is known as ABC
analysisorProportional parts value analysis.
Classification of items into A, B and C categories:
The logic behind this kind of analysis is that the management should study each item of
stock in terms of its usage, lead time, technical or other problems and its relative money
value in the total investment in inventories. Critical items i.e., high value items deserve very
close attention and low value items need to be devoted minimum expense and effort in the
task of controlling inventories.
The Material Manager by concentrating on "A" class items is able to control inventories and
show visible results in a short span of time. By controlling "A" items and doing a proper
inventory analysis, obsolete stocks are automatically pinpointed.
The following steps will explain to you the classification of items into A, B and C categories.
1. Find out the unit cost and and the usage of each material over a given period.
2. Multiply the unit cost by the estimated annual usage to obtain the net value.

3. List out all the items and arrange them in the descending value. (Annual Value)
4. Accumulate value and add up number of items and calculate percentage on total
inventory in value and in number.
5. Draw a curve of percentage items and percentage value.
6. Mark off from the curve the rational limits of A, B and C categories.
A category product is semi dul
B category product is opal white
C category product is black
B) FSN Analysis
By doing FSN analysis materials can be classified based on their movement from inventory
for a specified period. Items are classified based on consumption and average stay in the
inventory. Higher the stay of item in the inventory, the slower would be the movement of the
material.

F Fast Moving
S- Slow Moving
N- Non moving
Sometimes the terms FNS is also being used, where

F Fast Moving
N- Normal Moving
S- Slow Moving
There following steps in doing the FSN analysis:

Calculation of average stay and the consumption rate of the material in warehouse.
FSN Classification of materials based on average stay in the inventory.
FSN Classification of the material based on consumption rate.
Finally classifying based on above FSNanalysi

Inventory control analysis technique used:

FNS analysis technique is used for inventory control. In this past data are extraplorated as
per trend (demand) seen in the history. The company BOMBAY DYEING is manufactures

PSF (polyester staple fibre) which is used for producing spun yarns (blends), so the demand
of PSF is totally depend on downstream industries which are in spun yarn making business.
According to the customer requirement company produce PSF of required denier and
cutlengths. The company produces 0.8 to 15 denier PSF fibre. But the demand for all
material is not same.
According to past record:
F - FAST MOVING MATERIALS

0.8D, 1.2D, 1.4D, 2D

N NORMAL MOVING MATERIALS

4D, 6D, 7D

S SLOW MOVING MATERIALS

ALL OTHERS

Sometimes demand varies according to season like, some months before of winter the
demand of high denier and black fibre is more because normally people wears dark colour
cloths in winter season.
Fast moving goods keep larger stock
Normal moving goods keep medium stock
Slow moving goods keep less stock

4.2STORE AND WAREHOUSE

4.2.1Responsibility and authority
MANAGER-MATERIALS:
Responsibility:
a) Ensure that the functions of store and warehouse including dispatch activities are carried out
b)
c)
d)
e)
f)
g)

smoothly.
Meet all the statutory requirement to carry out above operations.
Oversee the administration and safety of the stores and warehouse department.
Utilize resources available with the department to the optimum level.
Co-ordinate and correspond with all the other departments and statutory authorities.
Ensuring safety of plant and equipment and man power.
Purchase responsibilities are covered in purchase procedure manual.
Authority:

a) Signing of RGP/NRGP
b) Signing of material rejection memo/ delivery challan.
c) Prepares/signs amendments to procedures, checklists, formats of quality manual prior to the
approval by manager-Materials.
d) Purchase authorities are covered in purchase procedure manual.

Dy. MANAGER MATERIALS

Responsibility:
a)
b)
c)
d)
e)
f)

Exercise inventory control of stock items.

Oversee the day-to-day transactions.
Ensure that there is adequate co-ordination with other departments.
Take all steps necessary to ensure safety, security and housekeeping.
Generate/send periodical reports to all concerned.
Co-ordinate with internal auditors, statutory auditors.
Authority:

a) Signing of RGO/NRGP and material rejection memo/delivery challan.

b) Issuing of materials against authorized/correct MIV.
c) Exercise authorities of DGM Materials & Logistics during his absence.
Sr. EXECUTIVE-MATERIALS / EXECUTIVE-MATERIALS
Responsibility:
a)
b)
c)
d)

Oversee the day-to-day stores activity.

Ensure that there is adequate co-ordination with other departments.
Scrap disposal.
Ensuring safety of plant.
Authority:

a) Signing of RGO/NRGP and material rejection memo/delivery challan.

b) Issuing of materials against authorized/correct MIV.
c) Receipt and issue of materials.

MATERIALS ASSISTANT
Responsibility:
a) Receive the challan from the transporter / head office and enter the details in control register.
b) Arrange to unload the goods from the trailer/truck and store in the receiving bay as designed
and acknowledge.
c) Verification of goods and the quantity as per challan to inform short receipt / excess and
d)
e)
f)
g)
h)

arrange for inspection.

Prepare GR based on challan and inspection remarks and distribute to concerned.
Keep all records, duly filed.
Collect the goods from transporters godown and transfer to plant.
Arrange for housekeeping in their respective area.
Ensure that all details are entered in computerized system and reports are taken as per report

requirement.
i) Accept the material returned to store and take into stock.

j) Ensure that materials are properly preserved.

Authority:
a) To issue material against authorized/correct reservation.
b) To receive the materials and give acknowledgment.
c) To open and close stores during the beginning and ending of office hours.
OPERATOR-FORKLIFT
Responsibility:
a) Make sure that the vehicle is in good running conditions with fuel and other requisite things.
b) Shifting the loaded pallets of chemicals/oil/packing material from stores to C.P. area and
Baler area, Shifting of empty pallets, drum from various locations to stores area.
c) Load, unload, shift, the items as requisitioned by stores personnel
Authority:

To drive the forklift/crane.

RECEIPT OF MATERIAL

CHECKING OF CHALLANS

OPENING OF PACKAGES

CHECKING OF RECEIPTS

GR GANERATION

TAGGING OF MATERIALS

INSPECTION OF ITEM

ACCEPTED
BINNING

REJECTION

MATERIAL REJECTION

INFORMATION TO SUPPLIER
INFORMATION TO PURCHA
AUTHORISATION OF RGP/DC/GP

RETURING OF Mtl TO SUPPLIER

RETURING OF Mtl TO SUPPLIER

REPLACEMENT ACTION BY SUPPLIER

RECEIPT FLOW CHART

4.2.3 Any new item requires codification; the details of item with are received from user.
They are codified entered in system.
4.2.4 Issue
a) Material issues are carried out through authorized reservation in SAP system by users. The
checklist of all issues transactions are taken at next day morning.
b) In case system is off/not working due to ant other reason, material issue is done through
hardcopy of reservation and is subsequently fed into system on getting computerized
reservation.
c) The reservation as appearing in the system is checked for code, material description, cost
Centre, quantity indented, authorization and that all columns are filled with.
d) During silent hours shift engineer issues material to users on behalf of store personal through
hardcopy of reservation. On next working day this reservation is regularized in computer
system by concerned department personal and copy is destroyed.

4.2.5 Returns
a) Materials are returned by the user through an authorized receipt reservation, in computer
system mentioning the code number, description, quantity, cost centre, reason for returning.
b) As far as possible, the items are returned in the same conditions as it was during the time of
issue so that it can be taken into stock.
c) All the material are duly identified by a tag and kept at assigned location.
4.2.6 Stock verification
Stock verification refers to the process of physically checking the quantities of different
items of material available in stock in a store or warehouse and tallying these physically
available quantities with the quantities shown in stores stock records.
Stock verification is done not only for spare parts, but for all types of material that may be
stocked.
a) Periodic assessment of stock:
Stocks in stores are assessed on a periodic basis to detect deterioration and to verify quantity.
During assessment, if damage or deteriotion is apparent, such items will be assessed by
appropriate internal functions and a follow-up action is taken.

b) Inventory summary ledger is printed for specific group or sub-group. During perpetual audit
physical stock is verified and if deviation is noticed is marked on inventory summery ledger.

c)
d)

In addition following activities are also done:

Proper tagging and making on items,
Preservation,
Ensuring correct location,
Damage /leakage.
Details of deviation are entered in computer system by concerned material assistant.
List of items with deviation is taken by assistant officer. These items are checked for location
description whenever required help from user is obtained to locate item. Item found during

this process are deleted from system.

e) Stock verification and perpetual audit status is reported in monthly MIS.

4.2.7 Inventory control

a) The inventory control exercise is limited to the stock items only.
b) The stock of item when comes down below the predetermined reorder level, the material
requisition is raised to replenish the stock.
c) The stock of chemicals/catalyst used in main plant/utility and items used in packout era
reviewed in the beginning of the week and action is taken as needed.
d) The non-moving items are listed and stock reviewed within the department and again with
user department to monitor the movement once in year.
4.2.8 Analysis of data
Following data is collected on regular basis:
a) Stock of bale covers, pet straps
b) No. of complaints about store services

- Weekly.
- Monthly.

Warehouse Management System (WMS)

A 'warehouse management system' (WMS) is a key part of the supply chain and primarily
aims to control the movement and storage of materials within a warehouse and process the
associated transactions, including shipping, receiving, putaway and picking. The systems
also direct and optimize stock putaway based on real-time information about the status of bin

utilization. A WMS monitors the progress of products through the warehouse. It involves the
physical warehouse infrastructure, tracking systems, and communication between product
stations.
More precisely, warehouse management involves the receipt, storage and movement of
goods, (normally finished goods), to intermediate storage locations or to a final customer. In
the multi-echelon model for distribution, there may be multiple levels of warehouses. This
includes a central warehouse, a regional warehouses (serviced by the central warehouse) and
potentially retail warehouses (serviced by the regional warehouses).
Warehouse

management

systems

often

utilize automatic

identification

and

data

capture technology, such as barcode scanners, mobile computers, wireless LANs and
potentiallyradio-frequency identification (RFID) to efficiently monitor the flow of products.
Once data has been collected, there is either a batch synchronization with, or a real-time
wireless transmission to a central database. The database can then provide useful reports
about the status of goods in the warehouse.
Warehouse design and process design within the warehouse (e.g. wave picking) is also part
of warehouse management. Warehouse management is an aspect of logistics andsupply chain
management.
Benefits of WMS

A comprehensive warehouse management system helps streamline multiple functions of your

enterprise:

Receiving Gain insights into shipments that have been delivered, but that are not yet at

their final location. Make sure items at low stock levels are staged and put away first, reducing
the impact of out-of-stocks and inefficient fulfillment processes.
Put-Away Know the location of all inventory on your shelves. Route your workers to the

right location, set up their picks in the proper order to minimize travel time, and increase the
number of orders they can pick each day.
Picking Improve error-proofing and productivity in the picking process. Workers receive

their picks on a mobile device that routes them to the proper location. Scanning items when you
pick them verifies that the right item at the right quantity is picked.
Packing Ensure the accuracy of each order that is picked and reduce material costs by

determining the right sized shipping carton.

Shipping See that each order is properly packaged and shipped to the right destination
and delivered on the right date.

ROI in WMS
Although installing a full-scale warehouse management system can be a costly investment, you will
quickly recognize its value. After a warehouse management system has been up and running for only
a few months, many of our customers say that they cannot envision their operations without it. From
achieving real-time visibility into inventory and orders, to decreasing the time it takes to invoice and
receive customer payments, a warehouse management system package extends mobility to each
worker in your warehouse and prepares you to scale your business.

Relying on paper trails and manual data entry to manage your warehouse compromises worker
productivity and inventory accuracy. Once received via printer, orders are picked, packed and
shipped, with a paper trail tracking every step of the process. That information is then manually
entered it into the system and filed. Should a discrepancy appear in a customer's order or invoice,
pinpointing the problem requires cross referencing the data in both the system and file cabinets.
Problem solved with WMS
As a result, your organization can avoid experiencing:

Delayed access to information in the system if has been entered days, or weeks late.
Inaccurate information in the system
Mis-shipments
Late invoices
Difficulty locating items as they are moved within the warehouse

CHAPTER-5
Conclusion And Suggestions

5.1 OBSERVATIONS AND FINDINGS

The space utilization is good. Total 160 types of product handling and storing is a
challenging work but company employees are expert in managing this entire thing. And the
control on the responsible manpower i.e. contractor, transporters is outstanding. Logistics

Dept. is using Optimum Transportation Policies which are beneficial for company, and has
good maintained relations with transporters.
Problems

Tracing of bales.
Mistakes in sending material or bale by checker.
First In First Out sometimes not possible.
Proper allocation of materials.

5.2 RECOMMENDATION
1) Implementation of barcode/RFID technique
Use of barcodes and radio-frequency identification (RFID) tags to provide automatic
identification of bales (inventory objects). RFID reduces chances of Out of Stocks; helps in

tracing the location of specific type of material. For recording an inventory transaction, the
system uses a barcode scanner or RFID reader to automatically identify the inventory object,
and then collects additional information from the operators via fixed terminals
(workstations), or mobile computers.
(Real-time inventory control systems may use wireless, mobile terminals to record inventory
transactions at the moment they occur. A wireless LAN transmits the transaction information
to a central database.)
2) Use proper demand forecasting tools to avoid unnecessary stock.

5.3 CONCLSION
The Logistics Dept. is one of the key Dept. of the Bombay Dyeing and Mfg. Co. Ltd. It has
deep forward and backward linkages with the rest of the Dept. and has a strong multiplier
effect resulting in smooth operation of the company. In todays world cost management and
cost reduction has become a priority for most businesses. Most companies are compelled to

explore and exploit all possible cost reduction and productivity enhancement techniques.
Knowing where and how to save money is what we are all about! In the present study, it has
been established that if the company implement scientific, technological tools for their
Logistic Management, then it ultimately boosts the manpower work efficiency, due to this
company profit will be increased.

CHAPTER-6
Learning Experience From
The SUMMER PROJECT

6.1 Learning Experience

Codification

All the stock items/non stock items are codification plan.

Codification plan:
a) First three digit indicates main group.
b) Fourth, fifth, sixth, seventh, and eight digit indicates items individual code number, size
wise, alphabetically, range wise etc. in ascending order.
c) Valuation category:
CCZER indicates items with zero value.
CCSIMP indicates imported.
CCSLOC indicates Indigenous.
d) The specification of each and every item is held in the computer system.
2

1
2
Main group

2
9
5
items individual serial no.

SAP (SYSTEM APPICATIONS PRODUCT)

As a product will not give profit unless we properly implement and effectively execute.
Through SAP, an integrated system will help us in faster and effective decision making
which results in cost cutting & profit improvement.
5.2 Benefits
a

Based on actual & updated data, actual margin is available online on real time basis to help

b
c

analyze & correct product wise/ order wise profitability.

Helps to enable timely cost and process corrections to achieved budgeted margin.
Availability of online stocks is lead to reduction in inventory & control on lead times. Also
better control on ageing of stocks. This helps in better working capital management &

d
e
f

reduction of costs.
Helping in better planning & provide alerts to avoid losses due to stocks out.
Order booking & billing is online enabling On Time In Full (OTIF) measure.
Manual data collection is avoided eliminating use of data entry operations.

BIBLIOGRAPHY

BOOKS
Pitman publishing Ltd, Second edition 1979, A guide to stock control, A Battersby
Prentice hall of India, Fifth edition 1990, Inventory control (theory & practice),
Martin K. Stirr& David W. Miller
Tata McGraw-Hill publishing, T M H edition 1978, Cost reduction from A to Z,
Higgins &Stidger

From Internet

 http://www.bombaydyeing.com/

http://iamsam.hubpages.com/hub/ABC-Analysis-Technique-of-Inventory-Control
http://www.managementparadise.com/forums/elements-logistics-logs/200330-hmlanalysis-xyz-analysis.html
http://www.materialsmanagement.info/inventory/xyz-analysis-of-inventory.htm

http://knowscm.blogspot.in/2008/04/how-to-do-fsn-analysis.html