neeraj jha final projiect

8/14/2019 Neeraj Jha Final Projiect

1/25

AmulThe taste of India

Summer Internship Project Report

Transportation cost and crate management

A Case Study of Amul

Company

Submitted to

D R .V.K.D ESH PANDE ( HO D )

2007-2008

Company Guide: Name of Trainees :

Mr.Jyoti Mukharjee Mr.Neeraj kumar jha

The taste of India

Duration of the project: 55days (Between May to July)Shri Sant Gajanan Maharaj College of Engineering

Department Of Business Administration and Research Shegaon

Pin No : (444203) (M.S)

1
http://en.wikipedia.org/wiki/Image:Amul-logo-2006-01-18.gif


2/25


(Accredited By N.B.A, AICTE New Delhi & ISO 9001:2000)

Website: http://www.ssgmce.org

Gujarat Cooperative Milk Marketing Federation Ltd

IndexSr.No CONTENT Page No

1. Acknowledgement 3

2. Introduction 4

3. Company profile 5 9

4. Objective of project 10

5. Research methodology 11-12

6. Data collection 13 -14

7. Data analysis 15 -19

8. Findings 20

9. Recommendations 21

10. Conclusion 22

11. Bibliography 23

12. Appendix 24

2
http://www.ssgmce.org/http://www.ssgmce.org/


3/25


ACKNOWLEDGEMENT

It is my pleasure to place on record my sincere gratitude towards my guide. Mr.

J. Mukharjee Gujarat co-operative Milk Marketing Federation Ltd New

Delhi ,who spent his precious time providing continuous ideas and expert

guidance to my project work. It was his direction and encouragement at every

moment and step that motivated me to steer the research work confidently and

successfully.

I am also thankful to our respected Auditor , Mr. Somveer singh and

Mr.Goldi Robert, who provided me all the information about crate and

transportation cost that was helpful for my project work.

I am indebted to my respected parents because of whose blessing I havenot been able to carry out this work successfully. I am also thankful to my

friends who directly or indirectly help me a lot.

I would like to thank Mr.Kumud Ranjan

Jha , who has made a great effort and continuous support to provide this

opportunity in such a company like Amul.

Last but not the Lea st, I would like to pray my divine

source of inspiration Shri Sant Gajanan Maharaj whose blessing always back

me.

Mr.Neeraj Kumar Jha

3


4/25


5/25


company profile

India ranked nowhere amongst milk producing countries in the world in 1946.Gradually, the realization dawned on the farmers with inspiration from then nationalistleaders Sardar Vallabhbhai Patel (who later became the first Home Minister of freeIndia) and Morarji Desai (who later become the Prime Minister of India) and localfarmer, freedom fighter and social worker Tribhovandas Patel , that the exploitation

by the trader could be checked only if they marketed their milk themselves. Amul wasthe result of the realization that they could pool up their milk and work as acooperative.

Products : Amul's product range includes milk powders, milk, butter , ghee , cheese ,curd , chocolate , ice cream , cream , shrikhand , paneer , gulab jamuns , basundi,

Nutramul brand and others. In January 2006 , Amul plans to launch India's first sportsdrink Stamina, which will be competing with Coca Cola 's Powerade and PepsiCo 'sGatorade .

THE VARIANTS OF MILK PRODUCED ARE :

Amul Gold 12*1 liters (Full Cream)-G1LT & 24*500ml (Full Cream)-G500.

Amul Taaza 12*1 liters(Full cream) & 24*500ml(Full cream).Amul double toned milk 500ml-T500.

CEO B M Byas

TypeCooperative

Founded 1946Headquarters Anand , India

Key peopleChairman, Gujarat Co-operative Milk Marketing FederationLtd. (GCMMF)

Industry DairyRevenue Template:Revenue $1 billion USD (in 2006-07)Employees 2.41 million milk producersWebsite www.amul.comTotal turnover 5,000 crore plus in end of March 2008.

5
http://en.wikipedia.org/wiki/Tribhovandas_Patelhttp://en.wikipedia.org/wiki/Tribhovandas_Patelhttp://en.wikipedia.org/wiki/List_of_Amul_productshttp://en.wikipedia.org/wiki/List_of_Amul_productshttp://en.wikipedia.org/wiki/Butterhttp://en.wikipedia.org/wiki/Gheehttp://en.wikipedia.org/wiki/Gheehttp://en.wikipedia.org/wiki/Cheesehttp://en.wikipedia.org/wiki/Curdhttp://en.wikipedia.org/wiki/Chocolatehttp://en.wikipedia.org/wiki/Ice_creamhttp://en.wikipedia.org/wiki/Creamhttp://en.wikipedia.org/wiki/Shrikhandhttp://en.wikipedia.org/wiki/Shrikhandhttp://en.wikipedia.org/wiki/Shrikhandhttp://en.wikipedia.org/wiki/Paneerhttp://en.wikipedia.org/wiki/Gulab_jamunhttp://en.wikipedia.org/wiki/Gulab_jamunhttp://en.wikipedia.org/wiki/Gulab_jamunhttp://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/Sports_drinkhttp://en.wikipedia.org/wiki/Sports_drinkhttp://en.wikipedia.org/wiki/Sports_drinkhttp://en.wikipedia.org/wiki/Coca_Colahttp://en.wikipedia.org/wiki/Coca_Colahttp://en.wikipedia.org/wiki/Poweradehttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Gatoradehttp://en.wikipedia.org/wiki/Category:Types_of_companieshttp://en.wikipedia.org/wiki/Cooperativeshttp://en.wikipedia.org/wiki/Anand%2C_Gujarathttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Dairyhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/w/index.php?title=Template:Revenue&action=edit&redlink=1http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Websitehttp://www.amul.com/http://en.wikipedia.org/wiki/Image:Amul-logo-2006-01-18.gifhttp://en.wikipedia.org/wiki/Category:Types_of_companieshttp://en.wikipedia.org/wiki/Cooperativeshttp://en.wikipedia.org/wiki/Anand%2C_Gujarathttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Dairyhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/w/index.php?title=Template:Revenue&action=edit&redlink=1http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Websitehttp://www.amul.com/http://en.wikipedia.org/wiki/Tribhovandas_Patelhttp://en.wikipedia.org/wiki/List_of_Amul_productshttp://en.wikipedia.org/wiki/Butterhttp://en.wikipedia.org/wiki/Gheehttp://en.wikipedia.org/wiki/Cheesehttp://en.wikipedia.org/wiki/Curdhttp://en.wikipedia.org/wiki/Chocolatehttp://en.wikipedia.org/wiki/Ice_creamhttp://en.wikipedia.org/wiki/Creamhttp://en.wikipedia.org/wiki/Shrikhandhttp://en.wikipedia.org/wiki/Paneerhttp://en.wikipedia.org/wiki/Gulab_jamunhttp://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/Sports_drinkhttp://en.wikipedia.org/wiki/Sports_drinkhttp://en.wikipedia.org/wiki/Coca_Colahttp://en.wikipedia.org/wiki/Poweradehttp://en.wikipedia.org/wiki/PepsiCohttp://en.wikipedia.org/wiki/Gatorade


6/25


7/25


The ADAs distribution agents are the co.FSRS (that is field representative staff) whowill be handling these ADAs and will be taking their daily demand , which will bereported to the plants.

The processes that are to be studied are: Raising Invoice, Milk loading factor, RouteMapping, Registration of transportation vehicles, Demand taking process, Banking

processes etc.

The process of milk demand and accounting:

FSRs take the demand of milk from ADAs FSRs report the demand to the demand taking person in the Delhi

MMO office.

The demand taker mails the milk demand of different plants as decided by management depending on zone wise distribution, maximum supplyis from Manesar plant . He also confirms by calling to the plantwhether they have received the mail or not.

Side by side the blank cheques are collected by ADAs duly signed bythem which are further filled by the office employees as per their dueamount of milk supply.

Paying slips are sent to bank. Demand is tallied by the supply made by plant. Invoice printing and invoice distribution , through courier or to parties

directly.Crate Accounting:

Crate accounting is an important task to be accomplished as these crates are to be timely returned to the plants for further supply of milk .So keeping thisthing in mind the process of crate accounting starts from the plant itself andends up tallying with the plant only.

The daily as well as the monthly records are available by the plant here atDelhi MMO office where it is processed (Mr.Goldy Robert).These records arefurther put in the excel sheets for different plants under the heads of partiesname issue of milk/dahi, excess/shortage of crate.

This statement is regularly updated as soon as the shortage or the excess cratesare returned by the parties. After the adjustments only the parties are chargedfor the shortage of crates equivalent to amount of Rs.150/crate (Penaltycharge).

This complete statement goes to the DIC (Depots in Charge) who further informs FSRs to inform them to their respectable distributors or else they will

be fined.

The problem regarding crate:

1. Wrong counting of crate in the plant .2. Some times plant gives the wrong dispatch of the crate number .

7


8/25


3. Some times plant gives the right dispatch of crate but transporter does not returnedthe right number of crate .

4. Some times mistake is happened by the employee .Due to which crate is not tallyand ADAs have to face problem and there is a dispute between company andADAs.

Policy of the company regarding the crate accounting:

The parties are liable to return the crates within 7days of supply or the amountof Rs.150 per crate as a penalty will be deducted from their account withoutany further notice.

The ultimatum is given by the company regarding the crate that you have toreturned the crate which is shortage .Otherwise we will charge penalty and wewill cut the amount from the transportation bill.

Freight processing and registration of vehicles:

The freight bills are maintained on the monthly basis for each transporter cumADAs as told to me by the concerned employee (Mr. Somveer).After the

processes of manufacturing and transportation in the respective month the plantissues the challans, are some that of crate accounting only the information from thechallans is different .The process of freight accounting goes like.

There are three plant in Manesar, Goga and Kwality. These transportationcharges for trucks and vehicles are measured keeping in mind the vehiclecapacity and the distance on which t is supplying milk.

The transportation charges for the vehicles increases according to thedistance from the plants to their destination supply to various distributors.i.e. The first leg transportation.

These first leg transportation cost goes like 0-100 km its .31 paisa .101-125km its .32 paisa and so on. Earlier these rates were .30paise for first 100kmwhich has increased from past 2years.

The next thing in freight bill processing is to keep a check over thecapacity of the vehicles. The various capacities of the vehicles are:

S.No Vehicles type Capacity1. TATA 407 300 crate2. TATA 709 500 crate3. TATA 912 800 crate4. EIC 1109 1000 crate

Usually these capacity vans are used, but these capacities can

sometimes be increase also. These vans are insulated to avoid the milk spoilage, which maintains the temperature of milk.

The important thing to be considered while freight bill processing is the

capacity of crate. So in this case 1 crate =12 liter which earlier was 10

8


9/25


litres.These crates are to be returned next day back to the plantotherwise deduction will be charged.

Taking one example: Suppose an ADA is taking 12 crates so this meanshe is taking 12*12litres=144litres of milk for 125 km so he will becharges Rs.144litres * 32 paisa.

In case of milk the company is providing the leakage support of .02paisa to its transporters on the total bill.

While dispatching the milk the plant issues the challans, which givesthe Details of no. of crates dispatched under which vehicle no. under

which ADA dies that vehicle belongs etc. At the end of the month these are used to make the freight bills. In case

of incomplete challans or in the absence of registration form of thevehicles the freight bill is not processed and the payment is not made tothe party.

All these transactions take place by clearing house function issuing thedebit and the credit notes in the name of the party.

9


10/25


Objective of the project:-

To suggest the cost Reduction strategies for the transportation of milk atDelhi MMO.

To check all the high transportation cost and checking out the loop holes intransportation cost.

To study the present transportation cost.

To reduce the transportation charges.

To study the crate supply and return on daily basis.

To check the shortage of crates.

To know that why crate are not returned.

10


11/25


REASERCH METHEDOLOGY

1. Route of transportation (Location of plant).Distance (in Km) from plant to ADA.

2. Use of vehicles & Capacity of vehicles.Exp-TATA 407,TATA 709,TATA 909 etc.

3. Cost difference in AM as compare to PM.

RESEARCH DESIGN & METHODOLOGY:

Research is an art of scientific investigation. Research is an academic term to be usedin a technical sense, according to the need. Research comprises defining and re-defining problem, formulation hypothesis or suggested solutions, collecting,organizing and evaluating data.

According to REDMAN and MORY Research is the systematical effort to gainknowledge.

METHODOLOGY:

Methodology is a way to systematically solve a research problem. It may beunderstood a science of studying how research is done scientifically?

Market Research

Market research can be defined as the systematic design, collection, analysis andreporting of data and findings relevant to specific marketing situation facing by thecompany.

Philip Kotler.

STEPS IN MARKETING RESEARCH

An effective marketing research involves the following six steps:

1. Define the problem, the decision alternatives and the research objectives:Marketing management must be careful not to define the problem too broadly or toonarrowly for the marketing research. Once the problem is identified then it is tried tofind out the optimum solution.

11


12/25


13/25


14/25


The various methods, which I have used, are:

a. Tabulation

b. Bar Chart

c. Pie Charts

Research Methodology used in this Project

Data sources

Primary data: -I have collected primary data through structured questionnaire, internet & through

other companies websites.

Secondary Data:-

I have collected secondary data from documents available in the company.

DATA INTERPRETATION:-Vehicle type and vehicle capacity:

S.No Vehicles type Capacity1. TATA 407 300 crate2. TATA 709 500 crate3. TATA 912 800 crate4. EIC 1109 1000 crate

(Table No.1)

The highest cost is paying by these ADAs (Top ten).

S.No Name of ADAs / TPTs Cost (Rs)1. Ganga Enterprises 4,45,432.802. Jay Ambey Agency 3,31,416.843. Raj Kumar 2,41,622.884. Mahaverji Ashish 2,34,846.705. Awasthi Milk Supplier 1,62,123.146. Laxami Milk Product 1,31,877.127. Fresh & Fresh 1,29,495.128. Jai Shiv Dairy 1,21,148.16

9. Rana Transport 1,17,246.7210. Jay Ambe Enterprises 1,12,596.48

14


15/25


(Table No.2)

Calculation of transportation cost on the basis of this cost.KM TATA407 TATA709 PER LTR 0-100 1050 1350 0.31101-125 1135 1460 0.32126-150 1220 1570 0.33151-200 1305 1680 0.34201-225 1390 1790 0.35226-250 1475 1900 0.36

(Table No.3)This is the table of transportation cost. By this cost the freight bill is prepared .Thisfreight bill is calculated on Km basis .And in TATA 407 the fixed amount per trip for up to 100km is Rs.1050 and Rs.85 is charged for every 25 km. For TATA709 the fixedamount per trip is Rs.1350 for up to 100km and Rs.110 is charged for every 25km.

Total transportation cost for four month.For the year 2008

Month January February March AprilCost per month(Rs)

52,07,730.22 51,38,332.96 56,59,833.84 58,05,885.16

(Table No.4)

(Figure No.1)

In four month the highest cost which is paid by the Amul is in April and the lowestcost is in February. The cost is increasing since three month .Because of the no of ADA is increasing every month. In the month of February the demand of Milk wasless .Due to which the transportation cost is less.

15

Total Transportation Cost

4800000

5000000

5200000

5400000

5600000

5800000

6000000

January February March April

Month

V a

l u e

i n R s .


16/25


No. of Milk crate dispatch / demand for four month.

For the year 2008Month January February March April

No. of crate 1,60,27,560 1,58,18,388 1,73,63,796 1,80,30,300(Table No.5)

(Figure No.2)

The demand of crate is increasing since three month. The highest demand is in April

month and the lowest demand is in February month. One crate is equal to twelve liter milk. There can be something difference in the demand and dispatch.

16

1450000015000000

15500000160000001650000017000000175000001800000018500000

No. of Crates

January February March April

Months

Dispatch / Demand of Crate

Series1


17/25


Operating cost of transporters for different vehicle (For 100km).FOR TATA 407: (CAPACITY-400 Crate)

(Table No.6)

Operating cost of transporter (100km)

31%

17%9%

3%7%

0%0%4%

13%

1%

9%6%

DISEL

DRIVER

LOADER

INSURANCE

TYRE

RTO TAX FOR FITNESSPOLLUTION & PERMIT

MCD,HARYANA,UP

MOBILE EXP.

POLICE EXP.

(Figure No.3)

The highest cost which is paid by the transporter are Diesel, Driver, & MCD, Haryana,UP .And the lowest cost is Mobile Exp, RTO Tax for fitness pollution & permit, andInsurance. There will be only one loader.

COST HEAD COST PER TRIP(Amount in Rs.)

DISEL 500DRIVER 270LOADER 150INSURANCE 42TYRE 110RTO TAX FOR FITNESS POLLUTION & PERMIT 60MCD,HARYANA,UP 200MOBILE EXP. 20POLICE EXP. 135MAINTENANCE 100TOTAL COST 1587

17


18/25


19/25


FOR TATA 1109: (CAPACITY-1000Crate)COST HEAD COST PER TRIP

(Amount in Rs.)DISEL 900DRIVER 250LOADER 600INSURANCE 100TYRE 275RTO TAX FOR FITNESS POLLUTION & PERMIT 100MCD,HARYANA,UP 300MOBILE EXP. 20POLICE EXP. 250MAINTENANCE 200TOTAL COST 2995

(Table No.8)

Operating cost of Transporters (100KMs.)

31%

8%

20%

3%

9%

0%

0%

3%

10%

1%

8%

7%

DISEL

DRIVER

LOADER

INSURANCE

TYRE

RTO TAX FOR FITNESS POLLUTION &PERMIT

MCD,HARYANA,UP

MOBILE EXP.

POLICE EXP.

MAINTENANCE

(Figure No.5)

This is very heavy vehicle with less mileage but capacity is more than these twovehicle (Tata407, Tata709).Thatswhy the cost of Diesel & Loader is high and thelowest cost is Mobile Exp.

19


20/25


FINDINGS:

The rule & regulation of Amul as compare to mother dairy is very strict.Regarding the crate and check.

Many ADAs are such who gives the fright bill / challan sheet after five days dueto which the problem is faced by the company regarding the tally of demanddispatch of crate and prepared of freight bill.

The highest freight bill is given to the TATA 407 vehicle and the capacity is threehundred crate.

There are three plant (Manesar,Goga,&Kwality) Manesar plant is the highest producer of Milk and Dahi .Which is in Gudgeon.

Now sales is in increasing order and due to which the freight of transport is also

increasing .Because the demand of Milk is increasing and also the (8-10) ADAsare increasing per month.

The main part of transportation cost is Diesel cost, Driver cost, Loader cost andthe tire exp.

Mobile Exp is same in all the vehicle weather vehicle is Tata407,Tata709, or EIC1109.

The freight rate of transport was .29 paisa per liter in November 2003 Due toincrease in diesel prices the rate of freight is increasing year by year and in 2005this was .31 paisa per liter for all the vehicle. In June 2008 the diesel pricesincreased by approx 16% due to which price revision has done by the Amul.Now the proposal of freight for the vehicle Tata 407 & Tata 709 are .32 paisa

per liter and .35 per liter for EIC 1109.We are waiting for approved this proposal.

Regarding the crate there is problem of counting of crate, wrong dispatch of crate from the plant, Some time Transporter give the wrong challan sheet.

There is a very good ADA who is from Narela ( Narendra Singh ) . He has madegoodwill regarding the crate received and return from the plant .There is no

shortage of crate in any month .He has his own vehicle his demand is approx9500 crate per month.

20


21/25


RECOMMENDATION:

Since the operating cost for Tata 407 is higher than other vehicle used by Amul/ADA;s .It has been seen that the transportation cost of EIC 1109 is lower.Thatswhy it can be recommended to use EIC 1109 in comparison of Tata407.

Route planning is necessary to reduce the transportation cost. Thus it can berecommended that the supply should be taken from the nearby the plant.

Capacity planning The capacity of which vehicle is more or less . The demandof which ADA is more or less. If the demand of ADA is 1000 crate. And thevehicle Tata 407 and Tata 709 is going then it is better to supply of milk by EIC1109 vehicle. Which can fulfill the demand of ADAs?

In operating cost there should be control on police exp .due to which per tripcost can be reduce.

There should be appointment of driver, who should be physically strong .Whocan do the work of loader in this case If driver salary is Rs.8000 than there

should be given Rs.2000-2500 as work for loader. Than the cost of loader can besave.

More economic vehicle should be used for the transportation to minimize thefuel cost.

There should be good relationship between ADAs and diver of transport due towhich there will be no any shortage of crate. Driver must be honest andeducated.

There should be a responsible person for dispatch of crate and analytical minded person for the counting and tally the dispatch and returned of crate.

21


22/25


CONCLUSION:

In conclusion I can say that the transportation cost is increasing due to the increasein the price of diesel. In this project I have collect most of the data from thecompany office. I have taken the cost of four month (January to April).In which Ishow that the operating cost of Tata407 is more than the other vehicle.

There are approx 245 ADAs inAmul .Who is ADA as well as TPT. The maximum cost is paid by the Amul in theApril month .The higher cost has been paid by the Amul to the Ganga Enterprises.And also the demand of Ganga Enterprises is more than the other ADAs in four month(January - April).Company has a new proposal of transportation cost is.32paisa per liter for the vehicle Tata407&Tata709 for 100km and .35paisa per litrefor EIC1109for 100km

I have gone through the Research process in this project. Themain problem of company is to manage the crate and how to reduce thetransportation cost .After knowing all the sources of cost I have come to know thatthe extra cost is paying as a police exp.

AS far as concern about the crate. Crate is being shortageevery month. Transporters, plant, driver all are responsible for the shortage of crate.It is the very vast work to manage the crate .If crate is not returned properly thanADA have to give penalty. I have done all the work very sincerely and cleanly andI come to know the proper transportation cost and I have suggest inrecommendation how can be reduced the cost.

22


23/25


BIBLIOGRAPHY

BOOKS:

1.COST ACCOUNTING

By- M.L.AGRAWAL (6 th)

Himalaya Publishing House

2.FINANCIAL MANAGEMENT

By- KHAN AND JAIN (5 th)

Himalaya Publishing House

3. MARKETING MANAGEMENT

By- PHILIP KOTLAR

Tata McGraw-Hill

WEBSITES:

1. www.Amul.com

2. www.google.com

23
http://www.amul.com/http://www.google.com/http://www.amul.com/http://www.google.com/


24/25


APPENDIX:

QUESTIONNAIRE

Dear Sir / Madam,

I am conducting a Market survey on Transportation cost of Milk supply

in Delhi MMO. (A Study of ADAs transportation cost) . It is a part of my project

work being carried under Gujarat co-operative Milk Marketing federation ltd ,

Janakpuri, Delhi MMO . It would be kind of you if you could answer the

following questionnaire and help me in completing my project work successfully.

Neeraj Kumar

Jha

MBA

(Finance)

Name of the distributor:

Area covered:

No of retailers:

Contact No:

Name of the FSR:

Average sales:

1) Which transportation vehicle do you own for Milk supply and what is themaximum capacity the vehicle can hold?

2) How much do you pay to your driver and loader ?3) What is the average of the vehicle you use for milk transportation?4) What are your diesel expenses monthly for the vehicle(s) you use?5) How much does it charge you for the insurance of the vehicle?6) What are the current roads taxes charges, RTO and permit for

transportation charges for your vehicle?7) How much do you spend on the maintenance of the vehicle?8) How much toll tax are you paying for your vehicle?9) Are you paying something to police?10) What are your mobile expenses related to the supply?11) What flows do you see in Amul?

24


25/25


12) Any suggestion for the improvement in Amul services?

neeraj jha final projiect

Documents