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REPORT
It is with profound gratitude that I express my deep indebtedness to all the employees of
shipping department at Varun Beverages Ltd. Without whose support and guidance it would
not have been possible for this training to have materialized and taken a concrete shape. I owe
my personal thanks to Mr. Ashwani Sharma, Mr. Anwer Lateef Sabri and Mr. Vikas Jaiswal
who extended full support and co-operation at every stage of my training period.
I am also indebted to my parents and friends for their constant encouragement and helping in
my endeavour. Last but not the least, I would like to thank everyone who has contributed for
the successful completion of my training.
Vinay Attri
EXECUTIVE SUMMARY: -
Beverage industry is at its boom these days. PepsiCo is one of the leading company in this
market. It is known for its efficient distribution network, wide variety of beverages and quality
of product.
This report contains the work done by me during two months of internship at Varun Beverages
Limited in Supply Chain Management from 18.05.2018 to 20.07.2018 as a requirement of my
MBA program at LM Thapar School of Management. As being fresher and completely new to
the practical knowledge, I got many learning opportunities and a lot of exposure while working
in the Shipping department at Jainpur plant of Varun Beverages Limited. The knowledge I got
will definitely be useful in my future.
This report contains the company information, overview of operations done in the various
departments in the plant and in-depth explanation of operations in Shipping Department i.e.
Supply chain in Varun Beverages Limited.
Varun Beverages Limited is known for its efficient distribution network i.e. Supply Chain. Its
Shipping department has great team of well-organized, talented and hard-working employees
who helped me at every stage of my internship.
Introduction: -
PepsiCo is an American multinational food, snack and beverage corporation. It is
headquartered in Purchase, New York. PepsiCo was formed in 1965 with the merger of Pepsi-
Cola Company and Frito-Lay, Inc. In 1998, it acquired Tropicana Products and Quaker Oats
Company in 2001. In 2017, it generated a revenue of US $63.53 billion and based on its net
revenue, it is the second largest food and beverage company in the world. PepsiCo products
are enjoyed by consumers one billion times a day in more than 200 countries and territories
around the world. Various products under PepsiCo brands are: - Pepsi, Diet Pepsi, Mountain
Dew, Lay’s, Gatorade, Tropicana Products, Aquafina, Doritos, and Cheetos etc.
PepsiCo entered Indian market in 1989 and in a short time span it has grown into one of the
largest MNC in food and beverage sector in the country. PepsiCo has two type of plants in
India FOBO and COBO, FOBO is Franchise Operated Bottling Operation these plants are
operated by some other company whereas COBO is Company Operated Bottling Operation
Plants which are owned by PepsiCo itself.
Varun Beverages Limited (VBL) is a FOBO i.e. Franchise Operated Bottling Operation Plant
of PepsiCo in India. It is given the franchise by PepsiCo for bottling of various Pepsi brands.
It is in partnership with PepsiCo since 1990s. Varun Beverages Limited is a public limited
company in India and is based in Gurugram. It is second largest franchise in the world of
Carbonated Soft Drinks and Non-Carbonated beverages and a key player in the beverage
industry. It has total 20 plants in India (Pathankot, Jainpur (Kanpur), Phillaur, Kosi, Greater
Noida etc.) and 5 manufacturing plants in other countries i.e. Sri Lanka, Nepal, Mozambique,
Zambia and Morocco. As of March, 2018, VBL have been granted franchise for various
PepsiCo Products in 21 states and two union territories which are Punjab, Himachal Pradesh,
Uttar Pradesh, Madhya Pradesh, Rajasthan, Haryana, Assam, Odisha etc.
VBL manufacture and market various PepsiCo products which includes Pepsi, Diet Pepsi,
Seven-up, Mirinda Orange, Mountain Dew, Evervess Soda, Sting, Tropicana Slice, Gatorade
and Aquafina. It is responsible for producing and marketing 51% products of PepsiCo. VBL is
a part of RJ Corp Group, it is a diversified business conglomerate with interest in beverages,
quick-service restaurants, dairy and healthcare.
Figure 3: - PepsiCo Products produced by Varun Beverages Limited
Jainpur Plant: -
Varun Beverages Plant at Jainpur is located in Industrial area of Kanpur. This area comes under
Uttar Pradesh State Industrial Development Corporation (UPSIDC). The plant has total are of
around 150000 sq. meters in which 61000 sq. meter area is covered and rest is uncovered. The
plant has total four filling lines which includes three glass product lines and one PET product
line. Products that are manufactured in this plant are Slice, Mountain Dew, Seven-Up, Pepsi
Cola, Mirinda Orange and Gatorade. This plant serves three regions i.e. Eastern UP (Sathariya
1 and Sathariya 2), Central UP (Kanpur, Sandila, Bareilly, Faizabad), UP-MP (Some areas of
MP).
a) No Breakdowns
b) No small stops or slow running
c) No defects
d) No Accidents
The traditional approach to TPM was developed in 1960s and it consists of 5s as a foundation
and eight supporting pillars.
The 5s Foundations: - The aim of 5s is to create a clean and well organized working
environment. These 5s are: -
Sort: - Sorting involves removing of all the unnecessary items or tools from the working
area and only keeping those which are needed there.
Set in order: - This involves organize the remaining items or tools in the workplace.
Shine: - This means that all the organized tools or items should be cleaned and work
area should be inspected for any problems.
Standardize: - Standardize the whole process throughout the organization and its
branches.
Sustain: - Ensure that standardized processes are applied regularly.
By applied these 5s, work place will be well organized and tools and other work related items
can be found very easily which will result in increasing the efficiency of the work.
The Eight Pillars: - Once 5s are implemented completely in an organization then the
organization can start implementing TPM. The eight pillars of TPM are aimed at proactively
establishing reliability of machines. These eight pillars are explained below: -
1) Focused Improvement: - This means that employees should work in small groups
proactively to achieve regular, incremental improvements in equipment operations.
This results in identification and resolving of reoccurring problems by cross-functional
teams. Another advantage of this is that it combines the collective advantage of a
company to achieve and engine for continuous improvement.
2) Autonomous Maintenance: - This states that operators should be assigned for regular
maintenance of the machines such as cleaning, lubricating, and inspection. This gives
operators more ownership of their equipment and identifies emergent issues before they
become failures.
3) Planned Maintenance: - This means that maintenance tasks should be scheduled on the
basis of predicted or measured failure rates. This enables most maintenance to be
planned for times when equipment is not scheduled for production.
4) Training and Education: - This aims to fill in the knowledge gaps necessary to achieve
the TPM goals. By this operators develop the skills to routinely maintain equipment
and identify emerging problems.
5) Early Management: - This directs practical knowledge and understanding of
manufacturing equipment gained through TPM towards improving the design of new
equipment.
6) Quality Maintenance: - This involves designing error detection and prevention into
production process and applying Root Cause Analysis to eliminate recurring sources of
quality defects.
7) Office TPM: - This means applying TPM techniques to administrative functions. This
extends the TPM benefits beyond the plant floor by addressing waste in administrative
functions and this also supports production through improved administrative processes
e.g. order processing, procurement and Scheduling.
8) Safety, health and Environment: - Its purpose is to maintain a safe and healthy working
environment. This helps in eliminating potential health and safety risks which results
in safer workplace.
Essentials to be applied in plant: -
1. Safety
2. Maintenance
3. Quality
4. Production
5. Distribution
Production Department: -
Main operation is production of cold drinks. They keep track of the demand and plan the
production of the drinks based on the production plan given by shipping department. This is
the biggest and most important department in the plant. This department does the production
of syrup which is further used in the production of cold drinks. Shipping department gives the
production plan to the production department and production of cold drinks is done on the basis
of that plan.
Different areas in Production Department: -
a) Process Area: - In process area, First empty bottles are uncased from PVC shell by
Uncaser Machine and empty bottles are placed on conveyer belts in machine and
belts place the empty bottles in the bottle washer machine which are used to wash
bottles.
b) Filling Area: - In filling area, cleaned bottles from bottle washer is filled with cold
drink using fillers and crowns are attached on it and labelling is done on the bottles.
Speed of fillers on each line are.
300ML 600
300ML 600
250ML 250
1200ML 180
Line 1 to 3 is for GRB products i.e. Glass Returnable Bottles. Line 4 is for PET bottles of
Slice, Gatorade i.e. hot line products.
c) Packaging Area: - In packaging area, Glass Returnable Bottles are cased into PVC
shells by caser machine and pet bottles are packed in cartons by machine
automatically and lot number is given to every pallet when the pallet is full
according to the stock norms and pallets are picked using forklifts and stored in the
warehouse
2) CO2 Flow Process: - CO2 is used to improve the taste, appearance, Sanitary Protection
and greater shelf life as it acts as a preservative. Its flow process is explained below: -
CO2 is received from the supplier which is approved by the PepsiCo. After receiving
CO2 it goes under quality check by quality department. CO2 is checked for 99.9% for
purity. If CO2 is not within as per Pepsi specifications then it is returned back to the
supplier and if it passes all quality tests then it is unloaded in bulk storage tank. After
that liquid CO2 is passed through vaporizer, carbon filter and micron filter and finally
it is supplied to line to be used in the production of cold drink.
3) Bottle Blowing Process: - First of all preforms are loaded into the machine, then
mechanical stretching is done by stretch rod and radial stretching is done by blowing
the pressure with first blow at 6-12 bar and final blow at 30-40 bar. Then air recovery
is done at 12-15 bar to prevent the distortions in the bottle. After that bottles are washed
by bottle washer and air is blown to dry the bottles.
4) GRB (Glass Returnable Bottle) Line Process: - GRB Line Process is explained
below:-
a) First of all glass bottle is uncased from the PVC shell by Uncaser and its pre
inspection for broken bottles is done manually by the workers.
b) After that bottle enters bottle washer compartment for cleaning.
c) After bottles goes through bottle washer its inspection is again done, which includes
light inspection also.
d) Then bottles are passed through fillers which fills the cold drink into the bottles and
its crowing is done by bottle crowner machine. There is mix processor also which
mixes the syrup with water at correct ratios as per guidelines by Pepsi and then it is
carbonated and cooled by the carbonating unit and cooling unit present in the mix
processor.
e) Then bottles are coded with the batch number, expiry date and MRP by the labeler.
f) After that filled bottles are inspected manually for checking the leveling of drinks
in bottles and to check whether the bottles are properly clean or it is crowned
properly.
g) After that bottles are placed into the PVC shells by the caser machine.
5) Bottle Washing Process: - Dirty or unclean empty bottles are washed by the bottle
washer completely. It goes through following processes in the bottle washer: -
i) Pre Soak
ii) Pre heat Rinse
iii) Pre rinse jet
iv) Hot caustic soak with high pressure jetting
v) Warm water jetting
vi) Caustic Carryover water jetting
vii) Warm water soak
viii) Hot Rinse
ix) Pre Final Rinse
x) Final Rinse
6) PET Bottle Line Process: - First of all the preforms are blown open by the Bottle
Blowing Machine and bottles are filled with by fillers and then the bottles are capped
and sealed by the machine. After that filled bottles are passed through warmer and dried
with the help of drier. After that its labelling is done by the labeler and coding is done
by the coder. Carton is made by the machine automatically and bottles are cased in the
cartons. Then cartons are placed on the pallets and pallets are taped with taping
machine. Then the supervisor attach the lot number to the pallet.
Quality Control Department: -
They keep track of the quality of products and makes sure that there should be no
compromise with quality of the product no matter what. There are three main processes: -
Water Treatment
Syrup Formation
Line Process
a) Water Treatment: - If there are any components detected in the ground water then
it must be capable of being consistently treated to meet the PepsiCo treated water
specification. For this historical data of the water supply is obtained and quick
survey is done in that area and potential contaminants are identified. For ex. If the
water is near the agriculture area then one should focus on Nitrite or Nitrite
contaminants from fertilizer use. The whole water treatment process is explained
below: -
First of all ground water from bore-well is stored in an underground storage tank
and then it is passed through pressurized sand filter which helps in removing the
dirt and dust from the water. After that water passed through Activated carbon filter
which removes the chlorine from the water. Then the softening of water is done and
water is stored in soft water tank from there water is send to bottle washers. But
water which is used in making product is processed further and subjected to RO
filtering then it is stored in intermediate storage tank and passed through activated
carbon filter again, then water is passed through 5 micron polishes and after that
UV filtration is done. Then the water is supplied to Line for the production of cold
drinks. This filtration process is for production of cold drinks only. For Aquafina
water goes through double filtration before going to the line.
b) Syrup Formation: - Syrup formation process quality measures that are to be
followed are: -
1) All equipment must be sanitized properly prior to syrup preparation.
2) Completely treated water should only be used in syrup making process.
3) Check the condition of filter papers in filter press.
4) All the ingredients much be added in proper proportions.
c) Line Process: - Various quality measures used during the line process are: -
1) First main quality measure is to ensure that mix process is mixing the contents
in proper proportions i.e. accurately blend finish syrup with water at correct
proportions as mentioned in PepsiCo formulas.
2) Filling should be done at 20 ℃ as at this temperature there is minimum foaming
at the fillers, it also allows systems to run at lower carbonating pressures and
also increases the speed of the operation.
3) Bottles should be properly cleaned and defective and uncleansed bottles should
be removed.
4) Workers working on lines should have hair nets on.
Maintenance Department: -
Maintenance department works in two parts: -
Line Maintenance
Utilities
Costs in plant include fixed and variable costs. Fixed cost examples are salary to
employees, electricity expenses, transportation costs etc. whereas variable costs
includes hiring labours during season and it depends on the production
Various costs and overheads are: -
Direct Material Cost (DMC) it also includes raw materials.
Variable Material Overhead (VMOH): - It depends on production, more production
more VMOH.
Fixed Material Overhead (FMOH): - It includes Repair and maintenance cost and
general administration costs. This cost does not depend on production.
Taxes: - Taxes includes Central Goods and Service Tax (CGST), State Goods and
Service Tax (SGST) and Integrated Goods and Service Tax (IGST).
Sales accounting and distribution includes discounts and allowances, marketing
equipment management and transportation.
Human Resource Department: -
This department looks after staff welfare and is accountable to their grievances. This
department also keeps the record of employee attendance and formulate the salary slip for them.
Health facilities to the staff members are also looked after by HR department and they also
manage the housekeeping.
Shipping Department: -
Main office of VBL in Lucknow i.e. Central Order Processing Cell (COPC) process and place
the orders to Jainpur plant. Sales team get in contact with customer executives of Distributors
to know about their requirement of quantity and which product they need, and they place order
accordingly to the Jainpur plant.
Stock Reconciliation Report is the most important report in the shipping department. It
contains the stock data of all the products under PepsiCo brand.
Sales report is maintained to keep track of daily sales processed in the plant.
Daily Stock Report is maintained to keep track of daily stock, new production and empty
bottles. Daily production is also planned according to this report.
Ageing Report is the very crucial report it contained the physical stock data of all the products
in the plant and arranged according to their manufacturing date. It keeps track of shelf life of
all the products. It helps in maintaining the FEFO (First Expiry First Out). This means that the
product which have the nearest expiry date should be loaded first in the trucks.
Various products with their shelf life are below: -
CSD PET: - 90 days
CSD PET (300ML): - 75 days
NMS RGB + Special Cans: - 120 days
All RGB (Except NMS RGB) + NCB PET (Slice): - 180 days
Cans (Except Special cans) + Water (Aquafina): - 270 days
Beverage in Bag (BIB): - 90 days
For the forklift operators to ensure the FEFO implementation GOBY method is followed.
G: - Green
O: - Orange
B: - Blue
Y: - Yellow
This is the colour of the board that is to be allocated according to different batch dates.
“G” colour products should be loaded first in the vehicles followed by “O”, “B”, and “Y”.
Transit Report contains the data of all the vehicle that are in transit to the plant from other
plant or warehouses.
Y Gate Report has the data of all the vehicle that are sent out for transfer of product to various
locations.
FG Production Report is made to enter the daily production data of the various products
produced in different production shifts.
Inventory Management: -
Finished Goods specifically PET bottles are kept in racks in warehouse which can
accommodate 20-21 pallets per row. And Glass Bottles FG is placed in 2.5 Pallet fashion which
means that 2 pallets placed in contact with each other on the ground and two pallets over that
and one pallet is place over them in the middle to distribute the load equally on both pallets on
ground.
Racks can accommodate inventory of around 1, 20,000 cases approximately whereas area for
glass bottles has capacity more than that of racks.
FG Stock Norms: -
B
3 Slice 200ml 6 60 2.5
4 GR Slice 250ml 5 50 2.5
5 Twister & Nimbooz 250ml 6 60 2
6 Slice 500ml & Gatorade 500ml 6 60 2
7 Slice 1.2 Ltr. & Twister 1.2 Ltr. 4 40 2
8 600ml 5 50 2
9 1.0 Ltr. 4 60 2
T
10 2.0 Ltr. 4 36 2
PE
13 1.0 Ltr. 5 60 2
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T(
14 2.0 Ltr. 4 36 2
PE
15 200ml. 8 184 1
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16 Tropicana 1000ml. 5 75 1
T
20 Aquafina 750ml. 6 60 2
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24 Aquafina 750ml. 6 72 2
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Empty bottles and shells are kept in empty bottles area which is outside warehouse and it has
the capacity of more than 1, 50, 000 cases.
Quarantine area in the warehouse is used to keep the reject products that are kept for
rechecking.
Forklifts are used to move the inventory from one place to other and to load the FGs into trucks.
Pallets on racks are accessed using radio shuttle which is a moving platform which is used to
reach the places on racks where forklift cannot reach.
T-Code for MIGO in SAP is: - migo. MIGO can only be done via SAP id SD06.
EMPTY Punch: -
FG unloading and migo process is the same as explained earlier but leakage and breakage from
FG is entered using other T-Code i.e. /NMB1A
T-Code: - /NMB1A
Migo number is entered in material slip number. Then truck number is entered in doc. Header
text and movement type is selected. Movement type for entering leakage and breakage is 907
and reason for movement is also entered which is 0001 for leakage and 0002 for breakage.
Cost centre is entered that is code of plant. Code of Jainpur plant is 11080001. After the
material code is entered and no. of bottles in leakage and breakage are entered by converting
it into case wise count. Leaked and broken bottles are recorded separately.
FG Dispatch Process: -
When the order is placed by COPC (Central Order Processing Cell) a transporter is selected to
deliver the FGs to the distributor or to other plant/warehouses i.e. STOs as per route allocation
by the shipping in-charge of that plant. Shipping team keep track of the distributor order and
STOs placed by COPC via SAP. STOs are created after instruction from Managers.
Transported representatives provide vehicles as per requirement and issue a slip signed by shift
in-charge to allow vehicle to enter in the plant for loading after getting the vehicle number.
After that the loading slip is generated by the shipping department and loading list is given to
loading checker and he instructs to start loading the vehicle. FEFO and quantity check is
maintained by loading checker and loading supervisor and the date and quantity of the product
is mentioned on the loading slip. After loading is complete, vehicle is again checked, and
recount is again done by the checker and loading slip is submitted in the shipping office after
that. Shipping clerk process the invoice and take the printout of tax invoice, delivery challan,
and proof of delivery and E-way bill. Transporter representative make a loading receipt copy
and attach it with invoice and give it in shipping, then shipping clerk attach a check list with
invoice and shipping in-charge sign the check list and vehicle allowed for gate out. Gate
security recheck and count all the products and tally it with the invoice quantity and put gate
out stamp and entry number and one invoice copy are kept by the gate security and vehicle is
allowed to go.
/NVL02N: - Used to post Goods in SAP by comparing the loaded quantity with batch
number and quantities on the loading slip.
/NVF01: - To generate invoice number
/NVT01N: - To create shipment.
/NZSDF02: - Delivery Challan Printout
/NZGSTINV: - Invoice Printout