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CHAPTER 1 INTRODUCTION 1.1 INTRODUCTION TO THE STUDY Logistics is the process of planning, implementing, and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer requirements. India has become the prime destination for logistics service providers all over the world. The demand for logistics services in India has been largely driven by the remarkable growth of the economy. Many large multinationals from the retail industry are planning to set up operation in India and large local retailers are also planning to expand their operations. But with the infrastructure largely under-developed and incapable of catering to a growing economy, logistics management in India becomes too complex. India is emerging as one of the world’s leading consumer market with the raise of middle income group. The logistics industry is also hampered by low rates of technology adoption and poor skill levels. On the technology front the industry now seems to be paying serious attention with use of RFID, vehicle tracking technologies, warehouse management systems etc. Also logistics industry is still not looked at as the industry of choice for young graduates thereby making hiring of quality professional manpower challenging. On the ground level too there are challenges. A recent study has found that a variety of skills are required in the sector. This project gives an overview of logistics industry in India. The poor condition of infrastructure directly translates to higher turnover, pushing up the operating costs and reducing efficiency. Logistics is a high-cost, low-margin business. The problem of organized players is compounded by unfair competition with unorganized players. There is lack of trust and awareness among Indian shippers with regard to outsourcing logistics. The future of the logistics sector depends not only on the continued development of infrastructure but also on the capability of the service providers in adapting themselves and making optimal utilization of technology.

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These include technology skills, driving skills including safety procedures, industry understanding and multi operations skills. The present state of affairs is illustrated by example of truck driver in India, who is a critical point of contact for the logistics company with its customers where the truck drivers today find it difficult to accurately record delivery records, understand delivery documents, negotiate for return business, handle queries etc. Logistics has huge impact on the domestic and capithan exports economy of any country. As such, the role and importance of logistics has been elevated in many business environments. India’s spend on logistics activities - equivalent to 13 percent of its GDP is higher than that of the developed nations. The key reason for this is the relatively higher level of inefficiencies in the system, with lower average trucking speeds, higher turnaround time at ports and high cost of administrative delays being just a few of the examples. Transportation is a key element in a logistics infrastructure. In India, about 40% of the logistics cost is due to transportation alone. The major infrastructure required for moving goods in India involve the active roles of roads, railways, ports and shipping, and airports all of which are either managed or regulated by the government. Logistics is about moving materials, information and funds from one business to another business or from a business to the consumer. Logistics is an important part of the business economic system and is a major capithan exports economic activity. It encompasses activities like freight transportation, warehousing, material handling, protective packaging, inventory control, order processing, marketing forecasting and customer service. The present form of logistics industry in India is still in its infancy and is highly fragmented There are thousands of logistics companies, ranging from the international giants to the highly localized small players in the country. As the logistics industry in India is in nascent stage, there are a lot of logistics issues to be improved. Meaning of Material Handling Defines “Material handling embraces the basic operations in connection with the movement of bulk, packaged and individual products in a semi-solid or solid state by means of gravity manually or power-actuated equipment and within the limits of individual producing, fabricating, processing or service establishment”. Material handling does not add 2

any value to the product but adds to the cost of the product and hence it will cost the customer more. So the handling should be kept at minimum. Material handling in Indian industries accounts for nearly 40% of the cost of production. Out of the total time spent for manufacturing a product, 20% of the time is utilised for actual processing on them while the remaining 80% of the time

is spent in moving from one place to another, waiting for the

processing. Poor material handling may result in delays leading to idling of equipment. Materials handling can be also defined as ‘the function dealing with the preparation, placing and positioning of materials to facilitate their movement or storage’. Material handling is the art and science involving the movement, handling and storage of materials during different stages of manufacturing. Thus the function includes every consideration of the product except the actual processing operation. In many cases, the handling is also included as an integral part of the process. Through scientific material handling considerable reduction in the cost as well as in the production cycle time can be achieved

Objectives of Material Handling Following are the objectives of material handling:  Minimise cost of material handling.  Minimise delays and interruptions by making available the materials at the point of

use at right quantity and at right time.  Increase the productive capacity of the production facilities by effective utilisation

of capacity and enhancing productivity.  Safety in material handling through improvement in working condition.  Maximum utilisation of material handling equipment.  Prevention of damages to materials.  Lower investment in process inventory

Principles of Material Handling Following are the principles of material handling:  Planning principle: All handling activities should be planned.  Systems principle: Plan a system integrating as many handling activities as

possible and co-ordinating the full scope of operations (receiving, storage, production, inspection, packing, warehousing, supply and transportation).  Space utilisation principle: Make optimum use of cubic space. 3

 Unit load principle: Increase quantity, size, weight of load handled.  Gravity principle: Utilise gravity to move a material wherever practicable.  Material flow principle: Plan an operation sequence and equipment arrangement

to optimise material flow.  Simplification principle: Reduce combine or eliminate unnecessary movement

and/or equipment.  Safety principle: Provide for safe handling methods and equipment.  Mechanisation principle: Use mechanical or automated material handling

equipment.  Standardisation principle: Standardise method, types, size of material handling

equipment.  Flexibility principle: Use methods and equipment that can perform a variety of

task and applications.  Equipment selection principle: Consider all aspect of material, move and method

to

be utilised.

 Dead weight principle: Reduce the ratio of dead weight to pay load in mobile

equipment.  Motion principle: Equipment designed to transport material should be kept in

motion.  Idle time principle: Reduce idle time/unproductive time of both MH equipment

and man power.  Maintenance principle: Plan for preventive maintenance or scheduled repair of all

handling equipment  Obsolescence principle: Replace obsolete handling methods/equipment when

more efficient method/equipment will improve operation.  Capacity principle: Use handling equipment to help achieve its full capacity.  Control principle: Use material handling equipment to improve production

control, inventory control and other handling.  Performance principle: Determine efficiency of handling performance in terms of

cost per unit handled which is the primary criterion.

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Selection of Material Handling Selection of Material Handling equipment is an important decision as it affects both cost and efficiency of handling system. The following factors are to be taken into account while selecting material handling equipment.  PROPERTIES OF THE MATERIAL Whether it is solid, liquid or gas, and in what size, shape and weight it is to be moved, are important considerations and can already lead to a preliminary elimination from the range of available equipment under review. Similarly, if a material is fragile, corrosive or toxic this will imply that certain handling methods and containers will be preferable to others.  LAYOUT AND CHARACTERISTICS OF THE BUILDING Another restricting factor is the availability of space for handling. Low-level ceiling may preclude the use of hoists or cranes, and the presence of supporting columns in awkward places can limit the size of the material-handling equipment. If the building is multi-storeyed, chutes or ramps for industrial trucks may be used. Layout itself will indicate the type of production operation (continuous, intermittent, fixed position or group) and can indicate some items of equipment that will be more suitable than others. Floor capacity also helps in selecting the best material handling equipment.  PRODUCTION FLOW If the flow is fairly constant between two fixed positions that are not likely to change, fixed equipment such as conveyors or chutes can be successfully used. If, on the other hand, the

flow is not constant and the direction changes occasionally

from one point to another because several products are being produced simultaneously, moving equipment such as trucks would

be preferable.

 COST CONSIDERATIONS This is one of the most important considerations. The above factors can help to narrow the range of suitable equipment, while costing can help in taking a final decision. Several cost elements need to be taken into consideration when comparisons are made between various items of equipment that are all capable of handling the same load. Initial investment and operating and maintenance costs are the major cost to be considered. By calculating and comparing the total cost for each of the items of equipment under consideration, a more rational decision can be reached on the most appropriate choice. 5

 NATURE OF OPERATIONS Selection of equipment also depends on nature of operations like whether handling is temporary or permanent, whether the flow is continuous or intermittent and material flow pattern-vertical or horizontal.  ENGINEERING FACTORS Selection of equipment also depends on engineering factors like door and ceiling dimensions, floor space, floor conditions and structural strength.  EQUIPMENT RELIABILITY Reliability of the equipment and supplier reputation and the after sale service also plays an important role in selecting material handling equipments

Evalution of Material Handling System The cost factors include investment cost, labour cost, and anticipated service hours per year, utilization, and unit load carrying ability, loading and unloading characteristics, operating costs and the size requirements are the factors for evolution of material handling equipment. Other factors to be considered are source of power, conditions where the equipment has to operate and such other technical aspects. Therefore, choices of equipments in organisation will improve the material handling system through work study techniques. They usually result in improving the ratio of operating time to loading time through palletizing, avoiding duplicative movements, etc. Obsolete handling systems can be replaced with more efficient equipments.

The effectiveness of the material handling system can be measured in terms of the ratio of the time spent in the handling to the total time spent in production. This will cover the time element. The cost effectiveness can be measured by the expenses incurred per unit weight handled. It can be safely said that very few organisations try to collate the expenses and time

in this manner so as to objectively view the performance and to take remedial

measures. Some of the other indices which can be used for evaluating the performance of handling systems are listed below:

Equipment Utilisation Ratio Equipment utilisation ratio is an important indicator for judging the materials handling system. This ratio can be computed and compared with similar firms or in the same over a period of time. 6

In order to know the total effort needed for moving materials, it may be necessary to compute Materials Handling Labour (MHL) ratio. This ratio is calculated as under: MHL =

Personnel assigned to materials handling Total operating work force

In order to ascertain whether is the handling system delivers materials work centres with maximum efficiency, it is desirable to compute direct labour handling loss ratio. The ratio is: DLHL =

Materials handling time lost of labour Total direct labour time

The movement’s operations ratio which is calculated after dividing total number of moves by total number of productive operations indicates whether the workers are going through too many motions because of poor routing.

It should, however, be emphasized that the efficiency of materials handling mainly depends on the following factors: (i)

efficiency of handling methods employed for handling a unit weight through a unit distance,

(ii)

efficiency of the layout which determines the distance through which the materials have to be handled,

(iii)

(iii) utilisation of the handling facilities, and

(iv)

(iv) efficiency of the speed of handling.

In conclusion, it can be said that an effective material handling system depends upon tailoring the layout and equipments to suit specific requirements. When a large volume has to be moved from a limited number of sources to a limited number of destinations the fixed path equipments like rollers, belt conveyors, overhead conveyors and gauntry cranes are preferred. For increased flexibility varied path equipments are preferred.

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1.2 NEED OF THE STUDY The Indian logistics industry is played vital role in domestic and international market. The study attempts to analyze and understand the freight handling scenario of transport sector in India (Road, Railway, Seaports, Airports).The study works out the growth and services in Indian logistics sectors for the period 2013-2017.

1.3 PERIOD OF THE STUDY In this research study, the data collected from the respondents who are directly associated with the problem have been analysed during the period from May 2017 to June 2017.

1.4 OBJECTIVES OF THE STUDY 1. To study the freight material handling scenario of transport sector in Capithan Exports. 2. To study the logistics material Handling Management in .Capithan Exports 3. To study the outsourcing of procurement of materials 4. To overall distribution planning used to survive in the competitive market

1.5 LIMITATIONS OF THE STUDY  The study has been conducted using secondary data.  The study does not over the limitation of Logistics Industries  Thus the study is limited to a glance of Indian logistics industry.

1.6 SCOPE OF THE STUDY This project gives an overview of logistics industry in India. The poor condition of infrastructure directly translates to higher turnover, pushing up the operating costs and reducing efficiency. Logistics is a high-cost, low-margin business. The problem of organized players is compounded by unfair competition with unorganized players. There is lack of trust and awareness among Indian shippers with regard to outsourcing logistics. The future of the logistics sector depends not only on the continued development of infrastructure but also on the capability of the service providers in adapting themselves and making optimal utilization of technology.

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1.7 INDUSTRY PROFILE In years gone by, the traditional warehousing and logistics facility was located by railroad tracks, a water port, and/or freeways, usually in the least desirable parts of cities or large towns. The Indian logistics industry has come a long way from being a labour intensive during 60’s to the present technology oriented system that provides wide range of logistics services. The concept of 3PL is a recent past culture in India. Traditionally, manufacturing companies in India managed their own logistics requirements in-house. The country then gradually evolved from the stage where the Indian organizations outsourced their labour requirement in order to avoid labour related problems. Subsequently, basic services such as transportation and warehousing were outsourced to different service providers known as the (Second-Party Logistics) 2PL service providers. With the increasing demand, the service providers started providing integrated services together with other value added services, while the organizations focus on the core competencies and streamline their supply chain. In terms of infrastructure, road is the dominant mode of transport which accounts for 68% of freight movement in India. Trucks are the most widely used mode of transportation in India. The primary objective of logistics management is to effectively and efficiently move the supply chain so as to extend the desired level of customer service at the least cost. Thus, logistics management starts with ascertaining customers’ needs till their fulfilment through product supplies. However, there are some definite objectives to be achieved through a proper logistics system. At present, around 1.5 million trucks operate on the Indian roads and the number of trucks increases around 10% a year. Railways are considered a relatively cheaper mode of transport and are used mainly for transporting bulk materials over long distances. About 89% of its freight traffic is contributed by major commodities such as coal, fertilizers, cement, petroleum products, food grain, finished steel, iron ore and raw material to steel plants. The balance 11% is other commodities moving in bulk and containers.

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The World Bank, in a recent survey Connecting to Compete: Trade Logistics in the capithan exports Economy, has developed a Logistics Performance Index (capithan exports) that can serve as a benchmarking tool for measuring performance of businesses along a country’s logistics supply chain. The Bank study asserts that countries that are able to connect to the capithan exports logistics web would not only have access to vast new markets but also remain a part of the capithan exports trade growth. It also warns that those countries whose links with the capithan exports logistics chain are weak are bound to face large and growing costs of exclusion from international trade. India trails behind China on important indices such as customs procedures, overall infrastructure quality, international shipment, logistics competence and tracking of shipments, but is ahead of the latter on the domestic logistics efficiency front. The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, east-west and north-south corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (capithan exports) with 100% Foreign Direct Investment (FDI) limit and public-private partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sector. In India, 100% FDI is allowed in logistics whereas in China, until recently, foreign investment was not allowed in domestic logistics. Almost all large capithan exports logistics companies have their presence in India, mainly involved in freight forwarding. For domestic transportation and warehousing, they have tie-ups with Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route.

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MODES OF TRANSPORTATION & WAREHOUSING: ROAD: The road freight industry in India is worth about INR 1.42 trillion and is growing at about 6-8 percent year on year Manpower spends amount to only about 4 percent of sales as against the overall sector average of 8-10 percent. The industry has traditionally been extremely fragmented - almost 75 percent of the trucking 'companies' are single truck operators and almost 90 percent of trucking companies have a turnover of less than INR 10 million A majority of players in this industry have been small entrepreneurs running family owned businesses. Given their small scale and limited investment capability, most of their investments have been focused on short term gains - direct and immediate impact on the top line / bottom line of the business being the key decision criterion. While industry players have been incapable of investing in manpower development, the government has also not focused sufficiently on the same. The result has been that in the current scenario, there exist gaps in core technical skills of the existing set of personnel. For example, the backbone of the trucking industry truck drivers lack knowledge of good driving practices and areas associated with driving like understanding of VAT. Taking a level-wise view of the skill issues, it is seen that in the road sector, skill issues are widespread across the board with the situation being most severe at the operational level Advantages:  Road network of 3.3 million km is the second largest capithan exports  60% of total freight movement is via roadways  Roads offer wide reach and easy accessibility to even small markets Disadvantages:  High cost of transportation  National Highways account for only 2% of the total network but carries 40% of total freight

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Key Developments:  National Highway Development Project to upgrade and modernise highways  24,000 km of National Highways are to be upgraded to four/six lanes. Connectivity to ports is also being improved

RAILWAY Introduced in 1853, Indian Railways (IR) which is a government monopoly is the world's second largest rail network spread over 81,500 km and covering around 7000 stations. Rail freight traffic revenues stood at around 1038 Million tonnes in 2013 having grown at around 8 percent in the recent past with the growth in the last couple of years being around 10 percent. Manpower spends amount to about 45 percent of revenues as against the overall sector average of 8-10 percent. Also, non-salary expenditure comprises 36 percent of overall manpower expenditure compared to the sector average of 13-14 percent. India has high stakes in rail infrastructure and freight. Of all the freight moved through IR, it is estimated that over 70% of them are produced or marketed by government-owned agencies. The containerized freight movement by rail in India is provided by Container Corporation of India Ltd (CONCOR). Incorporated in 1998 CONCOR provides multi-modal logistics support for the country’s domestic trade and commerce, with 44 out of 51 of the CONCOR terminals are linked by rail network. Railways are considered a relatively cheaper mode of transport and are used mainly for transporting bulk traffics over long distances. About 89% of its freight traffic is contributed by major commodities such as coal, fertilizers, cement, petroleum products, food grain, finished steel, iron ore and raw material to steel plants. The balance 11% is other commodities moving in bulk and containers. Advantages:  Spread over 81,500 km, railways carries 25% of total freight movement  Low transportation cost as compared to roads

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Disadvantages:  Bulk commodities account for 90% of total freight revenues  Inflexibility to reach deep interiors

SEAPORTS India, with a vast coastline of 7,517 kms handles 95% of India’s foreign trade through its seaports. It has 12 major ports (Figure 2.2) and 184 other (minor and intermediate) ports. Among the minor ports are located in Gujarat, Maharashtra, Goa, Karnataka, Daman & Dui, Karnataka, Kerala, Lakshadweep, and Andra Pradesh. The major ports are governed by the Major Port Trust under the control of Central Government, while the minor ports are under the jurisdiction of their respective state governments. The main commodities handled at major ports in India are petroleum products, coal, iron, ore, containerized cargo, fertilizer and raw material. Over 75% of the container throughput in India of 2.88 million TEUs is handled by the JNPT, Madras and Bombay ports. The growth in shipping has been even higher than that of the railways driven by strong growth in foreign trade both in bulk and containerized cargo. Manpower spends amount to about 8-10 percent; non-salary expenditure varies greatly between companies ranging from 320 percent of overall man power expenditure. The nature of liner shipping services to and from India has undergone a sea change in the last few years as a result of the growth in break-bulk and conventional cargoes. With the nature of goods being shipped changing, the potential and opportunities for container transport and logistics companies are enormous. Over the past few years the size and the number of vessels that are being deployed by India has increased. Thus, in the core shipping industry, while the manpower situation in terms of quality fares much better than the other segments of logistics, the issue here is that of quantity with an increasing number of qualified people being attracted towards working on foreign vessels as they offer better salaries and perks. However, if one were to look at the ports side, there is an increasing lack of trained manpower for pilotage functions and equipment operators 13

Advantages:  Cheapest mode of transportation Disadvantages:  Poor state of inland waterways in the country  High turnover time Key Developments:  Cargo handling capacity of ports to be increased from 600 million tonnes in 2007 to 1500 million tonnes by 2015

AIR: Airports in India are managed by Airport Authority of India (AAI), under the central government. The country has six international airports- Delhi, Bombay, Calcutta, Madras, Trivandrum and the newly upgraded Bangalore airport. The air cargo carried by airways usually constitutes high value goods such as computers, microprocessors, electronics and optical equipment, precision instruments and perishable foodstuffs. The air cargo service was also the first to be liberalized. The increased participation of private operators, air express and other cargo movers, and the need for efficient and timely delivery of door-to-door cargo have further fuelled the aviation sector in India. Delhi and Bombay are the two main airports in India and each is well connected with the rest of the country in a regional hub. With the increasing movement of goods through air, there is a continued need for the upgrading and modernization of air traffic services in India. Currently, the quality of Indian airport is rated 40th among 59 countries. Existing domestic airports requires critical infrastructure improvements, namely in the areas such as air traffic control, communication, navigation, ground handling and air terminal. It is also estimated that the present infrastructure can support the rise of only 10% growth in cargo, indicating a possible saturation of Indian airports.

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In order to improve current situation, airports need to be upgraded to the level of world-class international airports, with state-of-the-art air traffic control systems to increase the runway capacity, and to minimize interruptions to air traffic during bad weather. Advantages:  Fastest mode of transportation Disadvantages:  Low freight movement  87% of total freight traffic being handled by airports in metro cities Key Developments:  Modernisation of 37 operational airports and development of new airports will increase air cargo handling capacity

WAREHOUSE: The warehousing segment consists of storage warehousing related to distribution whether inbound or outbound trans shipment warehouses or 'terminals' used for bulking / de-bulking, stuffing / de-stuffing cross docking and temporary storage (including CFS and ICD) The warehousing segment is perhaps where the greatest growth potential exists. Like road transportation, this segment has traditionally been extremely fragmented, small scale and scattered geographically. A key reason for this has been India's indirect tax structure, with tax paid on cross border (state border) sales not being fully set off against local tax liabilities. As a result, most players resorted to setting up small warehouses across different states, rather than large, centralized set-ups. This has led to the prevalence of small scale, fragmented warehouses, with corresponding inefficiencies.

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LOGISTICS COMPANIES OF INDIA TNT Express: This company is a key leader in the international market in the sector of CAPITHAN EXPORTS express services. The company ensures safe and on time delivery of your documents, freight and parcels. The company offers time and day definite delivery in about 200 nations across the world. It operates 47 jet freighter aircraft and 26,000 road vehicles and has a network of 2,300 companies. AFL: One among the acknowledged leaders among the logistics companies in India is AFL. Through its domain of logistics services, the company has delivered world class service in India. In 1979, the company introduced the first ever courier service by forming an alliance with DHL World Wide Express. The company offers services like Logistics and warehousing, Courier Company and Custom Consultant. DHL: This company is one among the major logistics companies in India. It is a market leader CAPITHAN EXPORTSly in overland transport, air freight and international express. The company ranks No.1 in the world in contract logistics and ocean freight. The biggest logistics and express network in the world has a network in about 220 territories and countries, 72,000 vehicles, 350 Aircrafts, 36 hubs and 4,700 bases. Blue Dart: This logistics company is South Asia's top integrated express package Distribution and Courier Company. The domestic network of the company covers about 21,340 locations and provides service to 220 countries by the company's sales alliance with DHL. It provides the best service like Free Pick up from your location, Regulatory Clearances, Real Time Tracking, Free Computerized Proof of Delivery etc.

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Gati: The company is a key leader in the arena of express cargo delivery and a significant one in the supply chain management solutions and distribution in India since the year 1989.The company provides services like the Ware Housing, Express Cargo etc. Logistics Solutions of the company are Warehousing, Supply chain Management. The Distribution Solutions of the company are Gati Surface Express, Gati coast to coast and Gati Air Express etc. Safexpress: It is one of the largest express companies in India. The company offers the best and integrated logistics solutions. In 2002 the Limca Book of Records declared the company as the Largest Logistics service Provider in India. The company has a network over 550 locations in 28 states and 7 countries. It has 3000 weather proof ISO-9002 vehicles. Ashok Leyland: The leading provider of logistic vehicles for the India Army is this company. It is a key leader in the tractor-tailers and multi axle trucks. The company manufactures buses, trucks, engines and special application vehicles in India. It is promoting a new company called Ashley Transport Services Ltd. for exchange of information and integrated services related to logistics in order to tackle the business of freight contractors. Agarwal Packers and Movers: This popular Indian logistics company provides logistic services like the home shifting, car packing etc. across India. The company believes in keeping technology and people and of course heart and soul in the movement of the individuals respective items. The company offers quality service in transportation and packing. DTDC: The biggest Domestic Delivery Network Company is DTDC. The company offers high class delivery service in about 3700 Indian locations and 240 international places. The company dispatches about 10 million parcels in a month. It also offers low cost for bigger parcels to US, UK, India, Nepal, Dubai and other places across the world.

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First Flight: This logistics company in India specializes in courier services worldwide. The multi-tracking programs of the company are Domestic, International, First Wheels, First Wings and many others. The overseas offices of the company are in Malaysia, Singapore, UK, US, UAE, Qatar, Oman. Many large Indian corporate such as Tata and Reliance Industries have been attracted by the potential of this sector and have established logistics divisions. They started providing inhouse logistics services, and soon sensing the growth of the market, have started providing services to other corporate as well. Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business. The Indian economy is growing for the last couple of years which implies more outputs and more demand for specialized logistics services.

1.8 COMPANY PROFILE Capithan is a globally renowned company, having more than three decades of experience in supplying the finest Indian seafood worldwide. Under the able leadership of Mr. Alphonse Joseph, Managing Director, what initially began as a small freezing plant in the state of Kerala, India, has today transformed into one of India’s largest and most modernized seafood companies. It has a wide array of products and caters to almost all the major palettes of the world.

Capithan was established in 1974. It was one among the eight seafood-processing plants that were initially granted approval for export to the EU after the successful implementation of HACCP. Today the group has two EU approved seafood-processing plants – Capithan Exporting Company and Veronica Marine Exports Pvt. Ltd.

The company attributes its success to a number of external and internal factors. External Factors The topographical advantages of having easy access to both the Indian Ocean and the Arabian Sea. Access to a diverse and plentiful reserve of marine products and some exotic species 18

which are found nowhere else in the world. The company is strategically located near two of the biggest landing centers in India, namely - Sakthikulangara & Neendakara harbor. The company is having easy access to both the Cochin and Tuticorin ports. The company has access to a huge manpower pool skilled in the marine field.

Internal Factors State-of-the-art processing units. Own fleet of refrigerated and insulated vehicles. Fully equipped in-house laboratories. Experienced quality control personnel who strictly monitor and ensure quality standards. Skilled managerial talent who have added professionalism to the company’s operations. Time tested processes and techniques in purchase, production and marketing.

Products

Our catch of seafood products are the finest in the world. Being the front runner in the country we provide a wide range of products namely shrimps, lobsters, crabs, cuttlefishes, shell fishes, squids & octopus. Capithan ensures that its customers get the opportunity to treat themselves to a wide array of seafood. We have the following products on our side.

Select a category from the above given choices to view our product details.

Our Products Cephalopods

Cuttle Fish, Squid, Octopus

Fin fishes

Reef cod, Emperor, White Snapper, Ribbon Fish, Pomfrets

Crustaceans

Shrimps, Crabs, Lobsters

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Shell Fishes

Baigai, Clams

Cooked/Blanched

Squid Rings, Squid Tentacles, Cut Octopus, Cuttle Fish Strips, Shrimps – PUD, PDT/On

Brand Our brand ‘Captain’ is a testament of our commitment to procure, process and distribute quality seafood worldwide. Today at Capithan we enjoy a high level of market penetration and Brand recall because we constantly strive towards ensuring complete customer satisfaction. Our continuous efforts to provide the finest products has earned us the befitting tag -“The Captain of Indian Sea Food”

Facilities The company makes continuous effort to not only process quality seafood products but also to deliver these goods within the specified time bounds. This objective has been the driving force behind various technical and infrastructural initiatives of the company. The company has a fleet of refrigerated and well insulated trucks which protect and guarantee freshness and quality till it reaches the consumer.

Facility Integrated

Capithan Exporting Co. Pre-processing

Veronica Marine Exports Pvt. Ltd.

Capacity of 40 MT per day

Capacity of 45 MT per day

Integrated Flake Ice Machine

Capacity of 15 MT per day

Capacity of 15 MT per day

Ice Block Factory

Capacity of 40 MT per day

Capacity of 50 MT per day

Chilled storage

Capacity of 2 MT each

Capacity of 2 MT each

Depurations

A total capacity of 30 MT per day for both units together

Center

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Veronica Marine Exports Pvt.

Freezing Facilities

Capithan Exporting Co.

Plate Freezers

2 Nos. – 20 MT/day

3 Nos. – 27 MT/day

Blast Freezers

3 Nos. – 25 MT/day

3 Nos. – 27 MT/day

Cooking & Freezing Machine 1 No. - 400 Kg/Hour

Ltd.

-

Cold Storage

Capithan Exporting Co.

Cold store

1000 MT

Veronica Marine Exports Pvt. Ltd. 800 MT

Quality Capithan is proud to state that it is one among the eight seafood processing plants which were initially given approvals for export to the EU after the successful implementation of HACCP. The Group has, over the years perfected processes and techniques in purchase, processing and distribution which preserve and augment the quality of the product. To achieve this goal, Capithan

has

invested

heavily

in

both

infrastructure

and

human

capital.

Capithan has two state of the art in-house laboratories and experienced quality assurance personnel who keep vigil from the point of procurement to the final product. Efficacy of ‘inprocess controls’ are validated by micro biological tests on a regular basis.

"At Capithan quality is not just a catch word but a commitment to our customers, a commitment steeped in trust, because we believe that in Quality there is trust."

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CHAPTER II 2.1. REVIEW OF LITERATURE A literature review[1] is a body of text that determines the aims to review the critical points of current knowledge including substantive findings as well as theoretical and methodological contributions to a particular topic. The review of relevant literature is nearly always a standard chapter of a thesis or dissertation. The review forms an important chapter in a thesis where its purpose is to provide the background to and justification for the research undertaken Bruce (2017)[2], who has published widely on the topic of the literature review, has identified six elements of a literature review. These elements comprise a list; a search; a survey; a vehicle for learning; a research facilitator; and a report.

According to Cooper (2017) [3] ‘a literature review uses as its database reports of primary or original scholarship, and does not report new primary scholarship itself. The primary reports used in the literature may be verbal, but in the vast majority of cases reports are written documents. The types of scholarship may be empirical, theoretical, critical/analytic, or methodological in nature. Second, a literature review. seeks to describe, summarize, evaluate, clarify and/or integrate the content of primary reports

Stoke (2016)

[4]

stores management

the basic responsibilities of stores are to act as

custodian and controlling agent for parts, supplies, and materials, and to provide service to users to those goods. Typically and at times essentially, a store has to follow certain activities that are managed through use of various resources and are thus called stores management. The objective is to efficiently and economically provide the right materials at the time when it is required and in the condition in which it is required.

Study by Edwanjala (2015)

[5]

implies that there is some conflict between the need for

efficient and effective services and the need to economize in stockholdings. On one hand, the more stock held, the easier it is to have items available on demand. On the other hand, larger the stock held, greater the cost, though of course ordering very frequently in order that 22

holding cost may be kept low can itself lead to high cost. It is, therefore, necessary to seek, find and operate a satisfactory compromise between the various opposing costs, i.e. optimizing stock holding in such a way that both operating and financial objectives are attained. At no point of the time, work should suffer for want of critically required materials and at the same time unnecessary funds (working capital) are not blocked in stocks, especially inactive/slow moving items. In addition, the stores department itself should be economically operated with other functions to achieve saving in material and other costs wherever practical. Cost of transportation shall be lowest possible by selecting right mode of transportation and an effective carrier for the given materials.

Namukasa(2014)[6] observed that as companies continue to strive at achieving their objectives, management is required to focus more on the area of operations management. One main reason for failure to achieve/realize company objectives (especially the financial) is unfavorable cost structures, which compromise on performance (e.g. profitability) levels. With the increasing need for effective operations management, Business organizations now requires that costs and cost centres be well managed and controlled. Consequently stores, as cost centres must be well managed. In practice, firms spend an inordinate amount of resources i.e. time and money managing and directing their suppliers to ensure that critical inventory/stock control levels are maintained and the vital flow of products needs for operation continue. In contemporary business operating environments, significant developments have emerged in stores and inventory management aspect. Stores and inventory management is now appreciated as a value adding activity able to make a contribution to the profitability performance of an organization if managed in a more effective and efficient manner. Therefore, companies must find ways for ensuring such effectiveness and efficiency. The use of advanced technology demands that companies go for automation

According to S. Roychowdhury(2014) [7], every manufacturing and commercial enterprise has as part of its operations, the need of store materials and products for customer, maintenance and repair parts for production plants, or office supplies for the administration and operation of the firm. The Inventory and Stores Manager thus plays an important part in satisfying the needs of the customers of any enterprise. Adequate stocks of material must 23

be kept, proper control over the locations of goods must be maintained, and as customers order their goods from the warehouse, the store must have a good selection and adequate shipping procedures. The Inventory and Stores Manager performs managerial tasks and in addition he/she is normally responsible for tasks such as, deciding an optimum layout for stores; keeping a record of incoming items and notifying the purchasing department of items that need to be reordered. The Stores Manager may also control internal transport, undertake quality control inspection of incoming goods, arrange for the sale of obsolete, used or damaged goods and negotiate with employee representatives.

Christos Genekos(2014)

[8]

and others has pointed out, “there is a vast literature on the

theory and measurement of management practices. There is a wide spread of opinions over the definition, scope, and impact of different practices and even a debate whether the ‘best practices’ exist or whether every management practice is contingent.” The researcher is attempting to study various practices in stores management in electronic goods manufacturing companies. Salawati Sahari, Michael Tinggi and Norlina Kadri(2014)[9] empirically examines the relationship between inventory management and firm performance and capital intensity on a sample of financial data for 82 construction firms in Malaysia for the period 2006–2010. By employing regression and correlation techniques, it was found that inventory management is positively correlated with firm performance. In addition, the results indicate that there is a positive relationship between inventory management and capital intensity. The study of inventory management certainly implies the operational issues involved in store management. The nature of products may differ from organization to organization, but the function of store remains same. The contribution of stores efforts thus can leave strong impacts on the inventory management.

Shahadat Khan and Robert Mark Bosgraaf(2013)

[10]

addresses two inventory management

systems that are evident in the high technology industry being inventory postponement and inventory speculation. Moreover the paper investigates a high technology organization with respect to inventory management decisions, and identifies factors that lead the high technology organization to adopt inventory postponement over inventory speculation. This

24

paper examines the relative importance of the inventory management decisions made by the high technology organization, and the implications these decisions have on the third party logistics provider and the impact this has on the consumer.

A. L. Adeyemi and A. O. Salami(2013)

[11]

suggests that the materials management unit

should pay attention to sales growth over the years and thus take into consideration, the apparent relevance of sales and production cost in making decision with regards to inventory.

Jaroslav Kral(2013)

[12]

titled ‘review on the Harris’s Economic Order Quantity (EOQ)

model in inventory management’ reviews the oldest inventory model introduced by F. W. Harris. Harris´s formula, computing EOQ and discussed here, is usually a part of decision support systems or advanced planning modules of

an enterprise resource planning.

Inventory plays a key role in the logistics behavior of manufacturing systems, but inventory modeling is a very poor field of enterprise practices. Dimitrios P. Koumanakos(2012)[13] investigated the results with the help of crosssection linear regression, that the higher the level of inventories preserved (departing from lean operations) by a firm, the lower its rate of returns. Moreover this study sheds more light to the issue by employing more sophisticated statistical tests applied to a large and recent sample of Greek manufacturers across different industries. Even if the paper does not directly deal with the stores management, it implies that the higher level of inventories preserved could be putting the firm into additional costs. Store performance can help in reducing the cost so incurred by its efficient and vigilant acts. Scott Grant Eckert(2012)[14] examines inventory management and the role it plays in improving customer satisfaction. It looks at how companies have been under pressure to streamline their inventory systems, and the consequences of such actions. It also examines how many organizations are trying to implement a “perfect order” system and how suppliers are constantly under pressure to meet the demands. Many companies are, therefore, looking at various inventory management systems as they belief this will have a positive effect on the satisfaction of their customers.

25

Geoff Relph, Witek Brzeski and Gail Bradbear(2012) [15] tilted ‘the first steps to inventory management’ reveals that good inventory management is essential to achieving business objectives and building competitive advantage. Yet the traditional techniques most often used to manage inventory do not always provide optimal solutions. Driven by a greater emphasis on customer service and cost control and the advent of new technologies, inventory management is rapidly moving to a higher level of sophistication. The research paper thus emphasizes on the new technologies which prove to be beneficial in managing inventory and hence is also applicable in case of managing the stores. Gerald O. Ondlek(2011)[16] analyzed the attention and recognition the Kenyan manufacturing firms are giving to the materials management. The motivation of the study was based on the fact that long-term success and survival of any Organization depends entirely on how well organization are managing their costs. The conclusion drawn from the research was that Kenyan firms were not practicing professionalism in materials management and that materials management was more suited for large firms. M. Caridi and R. Cigolini(2011)[17] provides a literature review in the field of uncertainty dampening methods for manufacturing systems, and proposes a new model to improve materials management effectiveness in materials requirements planning environments. The literature review gives rise to a classification framework of the models along nine structural dimensions that refer to the safety buffer treatment, the environmental characteristics and the type of approach. Benni ‘materials management(2010)

[17]’

reveals that efficient materials management

not only keeps the business running smoothly but also helps companies maintain improved relationships with the members of their supply chains, cut down on their costs, and satisfy the demands of their customers. All of which have become increasingly important because of the competitive market most organizations are faced with today. These benefits are not optional; they have become mandatory for companies that have been successful in their fields.

Jyothic(2009)[18] labeled as ‘materials management’ stated that materials management helps in reduction of materials cost, preventing a large amount of capital being locked up 26

for a longer period and improving the capital turnover ratio. Materials management today is a distinct area of industrial management and plays a vital role in production and productivity. This concept aims at cost reduction, as a result of integrated approach towards the management of materials at all stages viz., planning, purchasing, receiving, stocking and disposal. Materials management is concerned with the planning and programming of materials and equipments, market research for purchase, pre-design value analysis, procurement of all materials including capital goods, raw materials, components and assemblies, finished material, packaging and packing of material, inventory control etc.

Materials Management(2008)

[19]

has always been an area of scrutiny for organizations.

This has become a central focal point as trends from the supply chain arena have indicated that substantial operating cash can be freed with leaner and more efficient handling of inventory. It’s clear that top management and materials management personnel focus their attention sharply on material costs and there is no doubt that reliable long term supply of materials is an increasingly important material. G. Anand, Rambabu Kodali and B. Santosh Kumar(2018) [20] stated in the research paper titled ‘development of analytic network process for the selection of material handling systems in the design of flexible manufacturing systems (FMS)’ that conveyor is a better alternative for the FMS under the given case situation. Furthermore, this study also revealed the computational complexity of the Analytic Network Process (ANP), though it is successful implementation of dependency/relationships between the factors within the decision-making process.

27

CHAPTER III RESEARCH METHODOLOGY 3.1 RESEARCH DESIGN A research design is an arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It is the conceptual structure within which research is conducted and it constitutes the blue print for the collection, measurement and analysis of data. The research design may be specific representation of the various steps in the process of research. Descriptive design was taken for the study focuses on phenomena, group and situation.

3.2 SAMPLING A Finite subset of population selected from it with the objective of investigating its properties called sample. A sample is a representative part of the population. A sample of 80 respondents in total has been randomly selected, the response to various element under each questions were totalled for the purpose of various statistical testing.

3.3 SOURCE OF DATA Primary data Primary data are the first hand information collected by the research for immediate purpose of the study. For the present study structured questionnaire and personnel interview was used to response from the respondents because of simplicity and reliability

Secondary data Secondary data was collected from company, library, company records, magazines, internet etc.A secondary questionnaire was used to elicit the primary data. The questionnaire contains closed ended questions with two points, four points and five points technique.  Journals and magazines  Websites  Reports

3.4 SAMPLE SIZE Representative sample of total 44 respondents were drawn for the study. 28

3.5 TOOLS OF DATA COLLECTION  Questionnaire  Interview  Observation

3.6 PLAN OF ANALYSIS The following tools were applied for analysing the data collected from for the purpose of the study  Tabulation of data  Interpretation of data  Graphical representation of data through bar diagram, pie charts  percentage

3.7 TOOLS OF ANALYSIS 

Simple Percentage Method

Simple Percentage Analysis The data collected from the respondents were converted into readable format for process, classification arguments. The data was tabulated and analyzed using statistical method of simple percentage. No. of Respondents Percentage =

x 100 Sample Size

Bar Chart A bar chart or bar graph is a chart or graph that presents categorical data with rectangular bars with heights or lengths proportional to the values that they represent. The bars can be plotted vertically or horizontally. A vertical bar chart is sometimes called a line graph.

Line chart It is similar to a scatter plot except that the measurement points are ordered (typically by their x-axis value) and joined with straight line segments. A line chart is often used to visualize a trend in data over intervals of time – a time series – thus the line is often drawn chronologically 29

CHAPTER IV DATA ANALYSIS & INTERPRETATION TABLE NO:1 INITIAL INVESTMENT OF THE RESPONDENTS Particulars

Frequency

Percentage

0-10 lakhs

11

25

10-30 lakhs

10

23

30 lakhs & above

23

52

Total

44

100

30

CHART NO:1 INITIAL INVESTMENT OF THE RESPONDENTS 60 50

52

40 30 25

20

23

10 0 0-10 lakhs

10-30 lakhs

30 lakhs & above

INTERPRETATION It is observed that 52% of the firm’s investment is more than 30 lakhs, 23% firm’s investment is between 10 & 30 lakhs and 25% firm’s investment is not more than 10 lakhs.

31

TABLE NO:2 NUMBER OF EMPLOYEES OF THE RESPONDENTS

Particulars

Frequency

Percentage

0-20

31

71

20-40

8

18

40 & above

5

11

Total

44

100

32

CHART NO:2 NUMBER OF EMPLOYEES OF THE RESPONDENTS

80 70

71

60 50

40 30 20 18

10

11

0 0-20

20-40

40 & above

INTERPRETATION It is observed that 71% of firms under study have manpower less than 20, 18% have manpower between 20 to 40 workers and 11% firms have their manpower more than 40 which indicate that the majority of the firms requires less manpower. The functioning of the business is relatively less complex.

33

TABLE NO:3 NUMBER OF WORKING SHIFTS OF THE RESPONDENTS

Particulars

Frequency

Percentage

Ist shift

33

75

Ist & IInd shift

10

23

Ist, IInd & IIIrd shift

1

2

Total

44

100

34

CHART NO:3 NUMBER OF WORKING SHIFTS OF THE RESPONDENTS

80 75 70 60 50 40 30 23

20 10

2

0 Ist shift

Ist & IInd shift

Ist, IInd & IIIrd shift

INTERPRETATION From the data it is observed that 75% of the firms run only Ist shift, 23% firms run Ist & IInd shift whereas only 2% of the firms run all the three shifts. Small scale manufacturing units are engaged mostly in job work which is part of intermittent production process and where they are not required to run all the three shifts.

35

TABLE NO:4 ANNUAL TURNOVER

Particulars

Frequency

Percentage

0-10 lakhs

3

7

10-30 lakhs

13

29

30 lakhs & above

28

64

Total

44

100

36

CHART NO:4 ANNUAL TURNOVER

70 60

64

50 40 30 29

20 10 7 0 0-10 lakhs

10-30 lakhs

30 lakhs & above

INTERPRETATION 64% of the respondent units have turnover between 30 lakhs and above, 29% of the respondent units have turnover between 10 and 30 lakhs whereas only 7% of the units understudy have turnover between 0 to 10 lakhs.

37

TABLE NO:5 PRODUCT CATEGORY

Particulars

Frequency

Percentage

Engineering

11

25

Manufacturing

7

16

Maintenance/Packaging

6

14

Agri Products

4

9

12

27

Chemical

4

9

Total

44

100

Casting/Fabrication

38

CHART NO:5 PRODUCT CATEGORY

30 25

27

25

20 15

16

14

10

9

9

5

0

INTERPRETATION 27% of the total sample constitutes Casting/Fabrication units, 25% of the sample constitutes Engineering units, percentage of other manufacturing units is 16, percentage of Maintenance/Packaging units is 14, Agri Product units is 9% and Chemical units are 9%.

39

TABLE NO:6 BUSINESS OBJECTIVES

Particulars

Frequency

Percentage

Maximise customer

2

4

Maximise profit

36

82

Increase return on investment

3

7

Increase turnover (sales)

3

7

Total

44

100

satisfaction

40

CHART NO:6 BUSINESS OBJECTIVES

90 80

82

70 60 50 40 30 20 10

4

7

7

0 Maximise customer Maximise profit satisfaction

Increase return on Increase turnover investment (sales)

INTERPRETATION 82% small scale manufacturing units under study indicates that profit maximization is the business objective, 7% indicates objective is to increase return on investment, 7% units have objective as increase in turn over (sales) and rest 4% has objective of maximize customer satisfaction.

41

TABLE NO: 7 PARTICIPATION BY MANAGEMENT LEVEL

Particulars

Frequency

Percentage

Director

37

84

General Manager

4

7

Senior Manager

3

9

Manager

0

0

44

100

Total

42

CHART NO: 7 PARTICIPATION BY MANAGEMENT LEVEL

90 84

80 70 60 50 40 30 20 10

9

7

0 Director

General Manager

Senior Manager

0 Manager

INTERPRETATION 84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior Managers and 7% were General Managers.

43

TABLE NO: 8 WHERE IS YOUR RAW MATERIAL STORES SITUATED?

Particulars

Frequency

Percentage

Director

37

84

General Manager

4

7

Senior Manager

3

9

Manager

0

0

44

100

Total

44

CHART NO: 8 WHERE IS YOUR RAW MATERIAL STORES SITUATED?

90 80

84

70 60 50 40 30 20 10

7

9

0

General Manager

Senior Manager

Manager

0 Director

INTERPRETATION 84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior Managers and 7% were General Managers.

45

TABLE NO:9 WHERE IS YOUR RAW MATERIAL STORES SITUATED?

Particulars

Frequency

Percentage

Near main entrance

21

48

Far from entrance gate

6

14

Middle of production plant

17

38

0

0

44

100

In isolation Total

46

CHART NO:9 WHERE IS YOUR RAW MATERIAL STORES SITUATED?

60 50 48 40 38 30 20

14

10

0 0

Near main entrance

Far from entrance Middle of gate production plant

In isolation

INTERPRETATION 48% respondent firms have their store department near to main entrance, 38% have their stores middle of production plant and rest 14% has the stores department far from the entrance gate. During the visit to these units researcher observed that the space utilisation was poor and materials were placed in an improper manner in the stores. Location of stores is proper but they lack in store management.

47

TABLE NO:10 WHERE ARE YOUR FINISHED GOODS STORES SITUATED?

Particulars

Frequency

Percentage

Near main entrance

34

77

Far from entrance gate

4

9

Middle of production plant

6

14

0

0

44

100

In isolation Total

48

CHART NO:10 WHERE ARE YOUR FINISHED GOODS STORES SITUATED?

90 80 77

70 60 50 40 30 20

10

14

9

0

0

Near main entrance

Far from entrance Middle of gate production plant

In isolation

INTERPRETATION From the data it is clear that 77% of the respondent firms have warehouses near to the main entrance, 14% have placed warehouse in the middle of the production plant where as rest 9% respondent firms have placed it far from entrance gate. Finished goods stores location is proper and in place.

49

TABLE NO: 11 WHICH PRINCIPLE YOU USE TO SELECT MATERIAL HANDLING EQUIPMENT?

Particulars

Frequency

Percentage

Planning principle

12

27

Operating principle

13

30

Equipment principle

12

27

7

16

44

100

Costing principle Total

50

CHART NO: 11 WHICH PRINCIPLE YOU USE TO SELECT MATERIAL HANDLING EQUIPMENT?

35 30

30 27

25

27

20 16

15 10 5 0 Planning principle Operating principle

Equipment principle

Costing principle

INTERPRETATION 30% of the respondent firms consider operating principle while selecting material handling equipments, 27% firms consider planning principle as important factor, 27% uses equipment principle and rest 16% considers costing principle as important factor in selecting material handling equipment. According to the researcher priority, the use of costing principle is not observed here where as over all use of principles are in place.

51

TABLE NO: 12 WHICH GROUP OF MATERIAL HANDLING EQUIPMENT YOU USE?

Particulars

Frequency

Percentage

Floor operated group

35

80

Vertical handling group

1

2

Overhead handling group

8

18

Allied equipments

0

0

Total

44

100

52

CHART NO: 12 WHICH GROUP OF MATERIAL HANDLING EQUIPMENT YOU USE?

90 80

80

70 60 50 40 30 20

18

10 2

0

Floor operated group

0 Vertical handling Overhead handling Allied equipments group group

INTERPRETATION Almost 80% of the respondent uses floor operated material handling equipment, 18% uses overhead handling group, and only 2% firm uses vertical handling group. It can be observed that none of the firms uses allied equipments.

53

TABLE NO:13 WHAT IN YOUR OPINION ARE THE FACTORS AFFECTING MATERIAL HANDLING SYSTEM?

Particulars

Frequency

Percentage

Production system

19

43

Product to be handled

24

55

Cost of material handling

0

0

Type of building in which

1

2

44

100

material is to be handled Total

54

CHART NO:13 WHAT IN YOUR OPINION ARE THE FACTORS AFFECTING MATERIAL HANDLING SYSTEM?

60 55

50 40

43

30

20 10 0

2

0 Production system

Product to be handled

Cost of material Type of building in handling which material is to be handled

INTERPRETATION Nearly 55% of the respondent firms are of the opinion that material handling system is affected by product to be handled, 43% of the respondent firms say its production system which affects the material handling where as only 2% are of the opinion that type of the building affects material handling. Product and production system are the major factors affecting material handling since the units under study manufactures different products.

55

TABLE NO: 14 WHAT CRITERIA YOU THINK IS IMPORTANT WHILE SELECTING MATERIAL HANDLING EQUIPMENT?

Particulars

Frequency

Percentage

Reduced cost of

4

9

Efficient services

7

16

Safety

25

57

Flexibility

8

18

Total

44

100

transportation

56

CHART NO: 14 WHAT CRITERIA YOU THINK IS IMPORTANT WHILE SELECTING MATERIAL HANDLING EQUIPMENT?

60 57

50 40 30 20

18

16

10 9 0 Reduced cost of transportation

Efficient services

Safety

Flexibility

INTERPRETATION Out of 44 small scale manufacturing firms, 57% i.e. 25 units considers safety as important aspect to choose material handling equipment, 18% chooses flexibility criteria, 16% chooses efficient services as important and 9% considers cost of transportation as the important factor. Units under study are well aware of safety issues while selecting the material handling issues.

57

TABLE NO: 15 WHICH IS THE PROBLEM AREA WITH RESPECT TO MATERIAL HANDLING, IN YOUR ORGANISATION?

Particulars

Frequency

Percentage

In receipts & stores

2

4

In production areas

12

27

In dispatch department

2

5

No problem

28

64

Total

44

100

58

CHART NO: 15 WHICH IS THE PROBLEM AREA WITH RESPECT TO MATERIAL HANDLING, IN YOUR ORGANISATION?

70 60

64

50 40 30

27

20 10 4

5

0 In receipts & stores In production areas

In dispatch department

No problem

INTERPRETATION 27% of the firms under study faces problem of material handling in production areas, 5% faces problem in dispatch department, 4% faces problem in receipts & stores and 64% respondent firms say they didn’t face any problem of material handling. This indicates that 16 firms i.e. 36% units under study out of 44 are still in need of improvement in material handling.

59

CHAPTER V FINDINGS, SUGGESTIONS & CONCLUSIONS 5.1 FINDINGS  52% of the firm’s investment is more than 30 lakhs, 23% firm’s investment is between 10 & 30 lakhs and 25% firm’s investment is not more than 10 lakhs.  71% of firms under study have manpower less than 20, 18% have manpower between 20 to 40 workers and 11% firms have their manpower more than 40 which indicate that the majority of the firms requires less manpower. The functioning of the business is relatively less complex.  75% of the firms run only Ist shift, 23% firms run Ist & IInd shift whereas only 2% of the firms run all the three shifts. Small scale manufacturing units are engaged mostly in job work which is part of intermittent production process and where they are not required to run all the three shifts.  64% of the respondent units have turnover between 30 lakhs and above, 29% of the respondent units have turnover between 10 and 30 lakhs whereas only 7% of the units understudy have turnover between 0 to 10 lakhs.  27% of the total sample constitutes Casting/Fabrication units, 25% of the sample constitutes Engineering units, percentage of other manufacturing units is 16, percentage of Maintenance/Packaging units is 14, Agri Product units is 9% and Chemical units are 9%.  82% small scale manufacturing units under study indicates that profit maximization is the business objective, 7% indicates objective is to increase return on investment, 7% units have objective as increase in turn over (sales) and rest 4% has objective of maximize customer satisfaction.  84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior Managers and 7% were General Managers.

60

 84% of the respondents were Directors of the small scale manufacturer units, 9% were Senior Managers and 7% were General Managers.  48% respondent firms have their store department near to main entrance, 38% have their stores middle of production plant and rest 14% has the stores department far from the entrance gate. During the visit to these units researcher observed that the space utilisation was poor and materials were placed in an improper manner in the stores. Location of stores is proper but they lack in store management.  77% of the respondent firms have warehouses near to the main entrance, 14% have placed warehouse in the middle of the production plant where as rest 9% respondent firms have placed it far from entrance gate. Finished goods stores location is proper and in place.  30% of the respondent firms consider operating principle while selecting material handling equipments, 27% firms consider planning principle as important factor, 27% uses equipment principle and rest 16% considers costing principle as important factor in selecting material handling equipment. According to the researcher priority, the use of costing principle is not observed here where as over all use of principles are in place.  80% of the respondent uses floor operated material handling equipment, 18% uses overhead handling group, and only 2% firm uses vertical handling group. It can be observed that none of the firms uses allied equipments.  55% of the respondent firms are of the opinion that material handling system is affected by product to be handled, 43% of the respondent firms say its production system which affects the material handling where as only 2% are of the opinion that type of the building affects material handling. Product and production system are the major factors affecting material handling since the units under study manufactures different products.

61

 57% i.e. 25 units considers safety as important aspect to choose material handling equipment, 18% chooses flexibility criteria, 16% chooses efficient services as important and 9% considers cost of transportation as the important factor. Units under study are well aware of safety issues while selecting the material handling issues.

 27% of the firms under study faces problem of material handling in production areas, 5% faces problem in dispatch department, 4% faces problem in receipts & stores and 64% respondent firms say they didn’t face any problem of material handling. This indicates that 16 firms i.e. 36% units under study out of 44 are still in need of improvement in material handling.

62

5.2 SUGGESTIONS  Scheduling of service time point of arrival and departure of rails, ships and plane has great scope for improvement. They never run on time and require national discipline.

 The official are trained as ever in manage development. There should be time to bound programme of simplify procedure and format.

 With the increasing trend of all modes of transportations more facilities should be implemented maximum services to customers.

 Logistics development is absolutely necessary. In the absence of flow less and latest logistics, the MNCs shy away from doing business in India. There is need to increase FDI in logistics sphere and relaxing of norms relating to entry, taxation, import of material handling and movement of equipment etc.

63

5.3. CONCLUSION Indian Logistics industry is continuously improving its performance in the capithan exports logistics industry by improvement of customs, trade-related infrastructure, inland transit, logistics services, information systems, and port efficiency help to provide trade goods and services on time and at low cost. The World Bank's 2007 the capithan exports Logistics Report ranks India 46 amongst 150 countries in terms of logistics performance during the year as well as its future potential. However, as India’s logistics outsourcing and investments to improve logistics efficiencies are still at a nascent stage, these future trends will take place, but it will take longer time to materialize. The resources needed for wholesale development will also take enormous amounts of time and resources. However, India should recognize the extraordinary role logistics plays in economic development and in enhancing the competitiveness of all sectors of the economy. As such, India should move forward for an integrated strategy towards developing a world-class logistics industry.

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QUESTIONNAIRE A STUDY ON MATERIAL HANDLING MANAGEMENT OF CAPITHAN EXPORTS LOGISTICS PRIVATE LIMITED, KOLLAM, KERALA

I] Organisation profile:1. Initial investment: [ ] 0-10 lakhs [ ] 10-30 lakhs [ ] 30 lakhs & above 2. Number of employees: [ ] 0-20 [ ] 20-40 [ ] 40 & above 3. Number of working shifts: [ ] Ist shift [ ] Ist & IInd shift [ ] Ist, IInd & IIIrd shift 4. Annual Turnover: [ ] 0-10 lakhs [ ] 10-30 lakhs [ ] 30 lakhs & above 5. Product catagory: [ ] Engineering [ ] Manufacturing [ ] Maintenance/Packaging [ ] Agri Products [ ] Casting/Fabrication [ ] Chemical

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6. Business objectives: [ ] Maximise customer satisfaction [ ] Maximise profit [ ] Increase return on investment [ ] Increase turnover (sales)

7. Participation by management level [ ] Director [ ] General Manager [ ] Senior Manager [ ] Manager

ii. Material Handling Management 8. Where is your raw material stores situated? [ ] Near main entrance [ ] Far from entrance gate [ ] Middle of production plant [ ] In isolation

9. Where are your finished goods stores situated? [ ] Near main entrance [ ] Far from entrance gate [ ] Middle of production plant [ ] In isolation

10. Which principle you use to select material handling equipment? [ ] Planning principle [ ] Operating principle [ ] Equipment principle [ ] Costing principle

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11. Which group of material handling equipment you use? [ ] Floor operated group [ ] Vertical handling group [ ] Overhead handling group [ ] Allied equipments 12. What in your opinion are the factors affecting material handling system? [ ] Production system [ ] Product to be handled [ ] Cost of material handling device [ ] Type of building in which material is to be handled

13. What criteria you think is important while selecting material handling equipment? [ ] Reduced cost of transportation [ ] Efficient services [ ] Safety [ ] Flexibility

14. Which is the problem area with respect to material handling, in your organisation? [ ] In receipts & stores [ ] In production areas [ ] In dispatch department [ ] No problem

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