Logistic Management

UNDER STANDING LOGISTICS AT JMD OILS PVT. LTD.

A PROJECT REPORT Submitted by Vikram L. Jain Batch 2008-10 Roll No.08018

To Director (PGDM)

In partial fulfillment of the requirement of Tolani Institute of Management Studies, Adipur for the award of the degree of Post Graduate Diploma in Management

Tolani Institute of Management Studies Adipur – 370 205 JULY 2009

1.1 INTRODUCTION TO OIL INDUSTRY

World Oil Industry Every year on an average 110 million tons of vegetable oil is produced and out of that 70% is contributed by four types of crops that are SOYA, PALM, MUSTARD and SUNFLOWER.

1 - Soya oil: About 50% of soybeans come from the USA, 20% fro Brazil, 11% from Argentina, 9% from China, and 4% from India. More than 55 million hectares are used in the world for its cultivation.

2 - Palm oil: More than 50% of palm oil comes from Malaysia where two thirds of the cultivated land is under oil palm, 28% in Indonesia, 3% in Thailand and in Africa 8% in Nigeria and remaining from other counties.

3 – Mustard oil: EC (26%), China (20.2%), India (11.3%), Canada (9.3%), and Japan (6.6%). 17.7 mt in 200607.

4 - Sunflower oil: About 13% of the world oil production, in EC, Russia and Argentina and rest from other countries.

Background and Size of the Indian Edible Oil Industry in India7 India is world’s third largest edible oil economy, after China and US. India’s annual consumption is around 10 million tones and China’s 14.5 million tones. per capita oil consumption in India is only 10.6 kg/annum which is low compared to 12.5 kg/annum in China, 20.8 kg/annum in Japan, 21.3 kg/annum in Brazil and 48.0 kg/annum in USA. India is also a leading producer of oilseeds, contributing 8-10% of world oilseed production. India is estimated to account for around 6% of the world’s production of edible oils. Though, it has the largest cultivated area under oilseeds in the world. India is the fourth largest oilseed producing country in the world, next only to USA, China and Brazil. Indian share in world production of oilseeds has been around 8-10%. In India, oilseeds are grown in an area of nearly 27 million hectares across the length and breadth of the country. Depending on the period of cultivation, the oilseeds are classified as 'Kharif Crop' and 'Rabi Crop'. The Kharif Crop that is dependent on the Monsoon is harvested around October-November each year. On the other hand, the Rabi Crop is harvested around March-April each year. Edible oil processing consists of three operations: crushing and expelling solvent extraction and oil refining. In many countries, these three separate processing operations are conducted by one vertically integrated plant. In India, however, only a small share of oilseed production undergoes solvent extraction and oil refining. At the beginning of the 20th century the vegetable oils industry was based on some 500,000 bullock-driven ghanis producing about 800,000 tones of oils. Instead, India’s oilseeds processing sector is made up of the three groups. •

Ghanis.

•

Solvent extractors

•

Oil refiners

Technology from 1930 to 1980

This was during 1930 that 1st “VANASPATI” plant was erected and commissioned in India. There after other plants were located in different parts of the country and also refined “GROUND NUT” oil appeared in the market. The entire technology was based on the pattern of the edible oil processing Industry in USA and Europe. The pattern of batch technology continued till 1950 all over the world. It was around 1950 that in the west most of the plants were renovated to continuous process. The production of oil seed increased from 2.5 million tones in the beginning of the century approx to 25 million tones. Now the consumption pattern also changed from 3 kg per capita to 10 kg per capita. During the latter part of the 20th century modernization of edible oil Industry started both for the manufacture of quality product as well as for reducing the cost of product by using continuous energy efficient process. There was a significant growth in Soya bean and Sunflower production in India which necessitated the need for per treatment of oil seed before Solvent Extraction. The other important event that happened during this period is import of Palm oil for which the new technology based on physical refining and fractionation is now established. The small plants of oil seed crushing, refining and deodorization which were based on capacity ranging from 25-200 MT per day were expanded up to 1000 MT per day.

Types of Oils commonly Cultivated in India

India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard, sesame, sunflower, linseed, castor are the major traditionally cultivated oilseeds. Soya bean and Sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow palm oil in Andhra Pradesh, Karnataka, Tamil Nadu in addition to Kerala and Andaman & Nicobar Islands. Among the non-conventional oils and cottonseed oils are the most important.

Consumption Pattern of Edible Oils in India India is a vast country of several of its regions has developed specific preference for certain oils largely depending upon the oils available in the region. For ex: - people in the South and West prefer groundnut oil while those in the East and North use mustard oil. “Vanaspati”, a term used to denote a partially hydrogenated edible oil mixture. Vanaspati has an important role in our edible oil economy. It has around 10% share of the edible oil market.

Table 1: Status of the Vegetable Oil Industry1 (As on April 2008)

Type of Vegetable Oil Industry

No. Of Units

Annual Capacity (Lakhs MT)

Average Capacity Utilisation

1,50,000 (Approx)

425 (In terms of Seeds)

10-30%

Solvent Extraction Units

779

419 (In terms of Oil-bearing Material)

33%

Refineries attached with Vanaspati Units

127

51 (in terms of oil)

45%

Refineries attached with Solvent Units

225

37 (in terms of oil)

29%

Independent Refineries

585

35 (in terms of oil)

36%

Total Refineries

937

123 (in terms of oil)

37%

268

58 (in terms of Vanaspati, Bakery Shortening & Margarine)

19%

Oilseed Crushing Units

Vanaspati Units

Oilseeds crushing units include crushing units in the small-scale sector as also in the organised sector. The capacity utilisation generally ranges from an average of 10% for the ghanis (small scale sector) to around 30% in case of the expellers in the organized sector.

Table 2: MINIMUM SUPPORT PRICE OF OIL SEEDS2 MINIMUM SUPPORT PRICE OF OILSEEDS The minimum Support Price fixed by the government for different oilseeds of fair average quality. S. No.

Name of oilseeds

200102

20023

20034

20045

20056

20067

20078

200809

1

Groundnut In-shell

1340

1335

1400

1500

1520

1520

1550

2100

2

Rapeseed/Mustar d

1300

1330

1600

1700

1715

1715

1800

--

3

Sunflower seed

1185

1195

1250

1340

1500

1500

1510

2215

4

Soybean (Yellow)

885

885

930

1000

1010

1020

1050

1390

5

Soybean (Black)

795

795

840

900

900

900

910

1350

6

Safflower

1300

1300

1500

1550

1565

1565

1650

--

7

Sesame

1400

1450

1485

1500

1550

1560

1580

2750

8

Niger seed

1100

1120

1155

1180

1200

1220

1240

2405

9

Toria

1265

1295

1565

1665

1680

1680

1735

--

10

Copra (Milling)

3300

3300

3320

3500

3570

3590

3620

3660

11

Copra (Ball)

3500

3550

3550

3570

3820

3840

3870

3910

(Prices in Rs. /Per Quintal of fair average quality material).

Table 3: DEMAND SUPPLY OF EDIBLE OILS3 Oil Year(November – October)

Production of oilseeds

Net availability of edible oils from all domestic sources

# Demand of Edible Oils

1997-1998

213.20

60.32

72.98

1998-1999

247.48

69.61

95.83

1999-2000

207.15

60.15

102.11

2000-2001

184.40

54.99

96.76

2001-2002

206.63

61.46

104.68

2002-2003

148.39

46.64

90.29

2003-2004

251.86

71.40

124.30

2004-2005

243.54

72.47

117.89

2005-2006

279.79

83.16

126.04

2006-2007

242.89

73.70

115.87

2007-2008

282.08

84.27

121.91

# Demand has been taken as net availability of edible oils from domestic sources + Import of edible oils.

1.2 INTRODUCTION TO JMD. OILS PVT. LTD.

History of JMD Oils Pvt. Ltd.10 The foundation of JMD group was laid by Late Sh. J R Dhingra, a social activist and a religious and pious person. With his dynamic approach, guidance and vision, the group, which was started with a Grocery shop, has achieved astounding heights. Sh. J R Dhingra passed away in the year 2001 but his teachings, inspirations and values have been well carried by his four sons namely Gulshan Kumar, Krishan Kumar, Naresh Kumar and Sanjay Kumar. They further fragmented the JMD tree, planted by their father and expanded, diversified and consolidated their position by working and living jointly as a close fist. JMD Group started the business of edible oils in the year 1987 as a distribution unit. The promoters put their best efforts, vision and acumen in carrying out the business. Thereafter they kept on adding multinationals and reputed companies/brands who have shown their eagerness to be associated with the group and promote their brand/business e.g. “ Vital”- (SM Dyechem), “Dalda Refined Oil” -(Hindustan Lever Limited), “Sundrop, Crystal” - (Agro Tech Limited), “Sohna”- (Markfed), “Saffola”- (Marico Industries Limited). Meanwhile the group diversified into the business of manufacturing and marketing of Dairy products and took franchise of “INDANA” brand in the year 1997. They took on lease the dairy plant of Foremost Industries (I) Ltd (Owner of Indana brand) situated at Saharanpur. However in view of a high operational cost, being old plant, the promoters discontinued the operation of the said plant and outsourced the manufacturing the dairy operations. Over a period of time, the group established its own market and presence in the business of edible oils and dairy products. It has been making supplies to more than 7000 retail outlets, Canteen Stores Departments (CSD), multinationals, five stars hotels, restaurants, fast food centers, confectioneries manufacturers etc. It had been outsourcing the manufacturing/refining of edible oils and dairy products from outside jobbers. However at

times there been a pressure in regard to the quality and regularity of operations which was dependent upon the whims of the jobbers. As a process of backward integration the group took over a dairy plant in Dist. Ballabhgarh (Haryana) in the year 2003. The said plant had milk processing capacity of lakh later per day. After takeover, the promoters took the first step to reduce operational/running cost and incurred huge capital expenditure. Thereafter they increased the milk processing capacity to 3 lakh liters per day. Meanwhile the company has also leased out its packing facilities for packing of fresh milk under the brand of “Amul” catering to Delhi. The promoters put their best to convert a loss making venture to a profitable enterprise. In the year 2004, the group diversified and set up a plant for packaged drinking water and aerated drinks under the brand name of ‘H2GO’.Over a short period of two years the brand has been well appreciated and well seen in the market. It has acquired a high position in the market. After settling the market and the production of dairy and packaged water, the group conceived an idea to go for backward integration in edible oils. It decided to go for establishing an edible oil refinery. Since more than 50 % of edible oils consumption is met out of imports, the group decided to establish a plant near Sea Port. Hence the group decided to set up a plant in Kandla, Dist Gandhidham, Gujarat. Accordingly it set up a plant with capacity of 800 TPD. The plant has been put to operation in the year 2005. Over a period of time the group has been interacting with a numerous parties/customers comprising of multinationals, five star hotels, restaurants, fast food centers, retailers, wholesale markets and direct consumers etc. Its products being consumer products have a name in the household. Whereas there has been a boom in real estate business. The group decided to operate as per the time and market environment. After making a thorough study and research the group diversified and entered into the business of Real Estate, housing project under the brand name of ‘JTPL’. The integrity and reputation of the promoters have paid rich dividends and housing projects have begun with flying colors.

The wind may blow from any direction, but the direction in which you go depends on how you set the sails…

Company’s Mission To provide continuous value through their products that will add verve to their customers’ life by making goods that are innovative, qualitatively par excellence and capable of providing an amazing level of customer satisfaction. Helping their customers get more out of life!

Company’s Vision They keep their vision targeted at their mission and work with great passion in achieving their prime objective of giving the customer more of life! To achieve their aim, they are dedicated to continuously innovating in technological inputs, service levels, creative marketing, pricing and cost efficiency.

Consumer Centric All innovations and every improvement they undertake keeping in mind the consumer who is the pivot point of their business initiatives. Their moves are consumer-centric and customer driven.

Unwavering Ethics They believe in the highest standards of corporate ethics and uncompromising integrity and dream to build a business that is sustainable, profitable and will create long-term value for their consumers and partners.

Company Profile

Name of the company:

JMD Oils Pvt. Ltd.

Constitution

:

A Closely held Private Limited Company

Name of Directors

:

Sh. Krishan Dhingra Sh. Naresh Dhingra Sh. Ramji Lal Sharma

Nature of Business

:

Manufacturing of edible oils and Ghee

Basic Raw Material

:

Imported Crude Palm Oils and Degummed Soya Oil

Capacity TPD

:

400 TPD Chemical Refinery

:

400 TPD Physical Refinery

:

400 TPD Fractionation

:

200 TPD Vanaspati

:

Palm Oil, Soya Oil, Mustard Oil, Vanaspati Ghee,

Main Product

Groundnut Oil, Cotton Seed Oil and Sunflower oil. By Products

:

Palm Fatty, Acid Oil, Cloth Washing Soap

Distribution Network of JMD OILS PVT.LTD.

Distribution Channel:

Figure 1

Quality control at JMD OILS PVT.LTD.

The quality system is applied at the three major levels. They are as listed below: (1)

RAW MATERIAL INSPECTION

(2)

INTERMEDIATE LEVEL(i.e. at all the three refining processes)

(3)

PRE-PACKAGING

(1).RAW MATERIAL INSPECTION:

At the time of crude oil procurement, once the crude oil is brought into the organization. The quality of the crude oil is checked, verified and after assurance by the quality control department it is brought into the storage tanks for further processing (2).INTERMEDIATE LEVEL: Secondly at the oil refining stage, the oil is checked at various stages viz. neutralizing, bleaching and deodorizing. After it matches with quality standards set by the company at every level, it is sent for further processing. If the quality is not up to the desired level at any stage, the oil is further processed for removing impurities. Unless and until the product matches the quality standards it cannot be sent for further processing.

(3). PRE-PACKAGING: Before sending it for packaging, the finished good viz. oil is again checked on the following parameters. 1.

FFA (Free Fatty acids)

2.

Iodine value

3.

Phosphorus value

4.

Moisture value

5.

Saponification value

6.

Tetra Butyl Hydro Quinine(TBHQ)

7.

Sediments

8.

Unsafe Matter

9.

Refractive Index

10.

Colour

The company has received the ISO 9001:2000 certifications and HACCP (Hazardous Analysis of Critical Control Points)

Organisation Structure

Figure: 2

Product mix JMD oils Pvt. Ltd.

Figure: 3

Refining Process of Crude Oil: Neutralization: Here the predegummed oils or oils with very low phosphatide contents are saponified with Caustic Soda and the Sodium Soap is separated. The oil is initially heated to the optimum process temperature. In order to condition the non-hydratable phosphatides, a small quantity of concentrated phosphoric acid is added and intensively mixed with oil. Following a brief reaction time, diluted caustic soda is added in order to neutralize the free fatty acid and the phosphoric acid. After mixing with the oil, the mixture is either conveyed directly to the

first separator or it passes through a further reaction tank. The latter is recommended only for oils with a relatively high phosphatide content in the neutral oil is still too high for the subsequent process stages, and it must therefore be reduced further by one or two washings. For this purpose hot water is added to the oil, intensively mixed and the soapy wash water is removed in a further separator. In general one wash stage is adequate. A second washing is only necessary if very low residual soap contents are required.

Physical Refining: Remove gums in oil with special degumming method. FFA in oil is removed by steam. Features: •

High oil refining rate, less oil loss

•

No waste water discharged;

•

More FFA distilled out;

•

Especially suitable for oils of high acid value, and low gum content;

Chemical Refining: Neutralize FFA in the oil with alkali. The gum and soap produced are centrifuges. Features: •

Less requirements to crude oils;

•

The finished oil is more consistent in quality;

•

Less bleaching earth used compared with physical refining;

Bleaching: Add bleaching earth into the degummed oil. Under the vacuum state, the oil is continuously mixed with bleaching earth in the continuous Bleacher, where main part of colour bodies as well as oxidizing materials in the oil are absorbed by the bleaching earth. After continuous Bleacher, the oil/clay mixture is passed through Leaf Filters where the spent

earth is removed together with the precipitated materials from degumming. The oil then passes through one of two alternatively working safety filters before entering the next section.

Deodorization: The incoming oil is pre-heated by deodorized oil in the deaerating Economizer before entering the packed column type Deaerator. The dearator oil is further heated by hot deodorized oil in the Deodorizing Economizer and finally by high-pressure steam under vacuum and steam agitation in the vacuum heater. Some of the free fatty acids are flashed off in the heater as the oil temperature increases. The fully heated oil enters the Double Shell Packed Column where it is distributed into thin film layers as it flows down through the structured packing. The oil is intensively agitated by steam rising counter currently from the structured packing. The oil is evaporated and as a result, free fatty acids and other volatile impurities in the oil are evaporated

and

removed with the steam. The stripped oil drains into the Deodorizer where it flows through a series of vertically stacked compartments (trays) agitated by steam. The prolonged thermal action (heat bleaching) breaks down oil’s colour. Also the amount of free fatty acids is reduced to an absolute minimum. The retention time in the Deodorizer is adjustable. The heat-bleached oil is pre-cooled in the Deodorizing Economizer and then mixed with anti oxidant before entering the packed column type Post Deodorizer. Residual flavor altering compounds and water from the anti-oxidant solution are vaporized and removed. The oil is cooled to storage temperature in the deaerating Economizer and Product Cooler and then sent to storage via one of the alternating Product Filters. Fatty acids and other materials evaporated from the oil are condensed by contact with recycled and cooled distillate in the Scrubber and collected in the distillate.

1.3 INTRODUCTION TO PROJECT TOPIC- LOGISTICS: 1. Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involves the integration of information, transportation, and inventory, warehousing, materialhandling, and packaging. Logistics is a channel of the supply chain which adds the value of time and place utility. We can’t imagine any business without logistics. 2. Logistics is the process of strategically managing the procurement, movement and storage of materials, parts through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of orders. 3. Logistic is that part of Supply Chain process that plans, implements and controls the efficient, effective flow of and storage of goods, services and related information from the point of consumption in order to meet the customers, requirement.

4.

In a crux it can be said that logistics aims at seven R's-the Right product, in

Right

quantity, in Right condition, at the Right time and Right place, for the Right customer at the Right cost.

Logistics has two parts: In bound and Out bound

Inbound Logistics: The Business Scenario Map shows the process of planning and executing all inbound transportation which is based on purchase orders. The process starts with the creation of a purchase order. This order represents a transportation need. To secure efficiencies, transportation planning for these orders is done jointly with other processes creating transportation needs, like replenishment processes or regular order based outbound fulfillment.

Outbound Logistics: Movement of material associated with storing, transporting, and distribution a firm's goods to its customers.

Logistics as Backbone for any business 1. The customer in today’s marketplace is more demanding, not just of product but also of services. 2. In today’s marketplace the order winning criteria are more likely to be service based then product based. 3. Logistics Management can provide a multitude of ways to increase efficiency and productivity and hence contribute significantly to reduce unit costs. 4. The scope of logistic spans the organization, from management of raw material through to the delivery of final product.

Logistics Matrix

Figure 4:

Valuea Ad v an n t a g e

Service leader

Commodity market

Service and cost leader

Cost leader

ProductivityAdvantage

Companies which have productivity advantage are known as cost leaders and which have value advantage are known as service leader. Companies which don’t have any advantage fall under commodity market and companies like JMD Oils Pvt. Ltd. which have both productivity as well as value advantage fall under the category of “service and cost leader.

OBJECTIVES In today’s marketplace the order winning criteria are more likely to be service based then product based. And most important in those services is Timely delivery of product, and for that you must have the best logistic management. And for that reason I would like to… ✔ Learn managerial tactics to handle Logistic Management. ✔ Logistics of Liquid Products. ✔ And to understand logistic activities carried out at JMD Oils Pvt. Ltd.

2. METHODOLOGY By observing staff as well as interacting with them and viewing the documents and past records of the company.

LOGISTICS AT JMD OILS PVT.LTD. 3.1 Purchase Procedure at JMD Oils Pvt. Ltd.

Figure : 5

Purchase department receives indent (Requirement note) from the department which needs any material, the indent is signed by Indenter, Store, HOD and GM. After receiving indent purchase department inquire for competitive rates from different supplier of the product, they get competitive quotations from these suppliers, than they make a comparison sheet of that product in which they compare about the rates and delivery time of the suppliers and select the best alternative from the available suppliers, a purchase order is made by department which is given to supplier and accordingly supplier dispatch the consignment, material is recd. by store and GRN is made by store which is forwarded to purchase department, purchase department forward this GRN with bill of the material to accounts department, than account department make the payment according to terms and conditions.

3.2 Transportation Functioning at JMD Oils Pvt. Ltd.

Delhi Super Roadways (DSR) & JMD Road ways In today’s highly competitive business setup where advantages tend to be shoot lined, maintaining a responsive, reliable and cost efficient products and material supply chain is often a decisive success factor. With this in mind, JMD has structured logistics as a distinct business segment, through its company, Delhi super roadways, which offers in house capability in road transportation services and cold store ware housing services. To meet delivery requirements, they manage on extensive overland transportation network of over 100 commercial bulk tankers with a market reach covering northern region like Delhi Haryana, Jammu & Kashmir, Rajasthan and other neighboring sates.

Their success in providing a high service level has increasingly attracted third party customers as well. Customers are also guaranteed optimal service from adequate stocks maintained at their various warehousing locations.

Logistics in JMD is divided in two parts: 1. International Logistics 2. Domestic Logistics

3.3 International Logistics: ➢ In international logistics only import of oils is done at JMD. ➢ A department of logistics is responsible for purchase of crude as well as importing them to India. ➢ International logistic head takes continuously monitors the prices of crude online and purchases crude oil when it is the most beneficial for the company. ➢ The purchase terms company used is CIF. In CIF terms vendor make avail the crude at Kandla port there after the responsibility is of company. Company as given contracts to CHAs for release of crude from port and than crude is stored at Tank farm (Terminals) at Kandla.

3.4 Domestic Logistics:This department is further divided into two parts

A. Loose/Bulk B. Consumer Pack A. Loose/Bulk: Loose/Bulk departments work start when crude oil reaches at port side. There it is stored in tanks and then as per production schedule it is transferred from Kandla tanks to plant side. Here sample is taken out from tankers and sent for quality check and than its unloaded threw pipes in storage tanks and then threw pipe lines it is passed to refining process. Again after refining process as per dispatch schedule if refined oil is to be dispatched loose than this department again is at work and refined oil is loaded in tankers and dispatched to destination.

3.4 (a) Inbound Logistics

Figure : 6

Logistic department receives production schedule from the production department and than prepare a loading schedule accordingly that how much and when to procure the raw material. Than they work as per schedule and send tankers to terminals from there they load the tankers and than the tankers are sealed at Kandla. From Kandla tankers come to plant where a gate inward is made than trucks enter inside plan and is weighted at weighbridge. Than seal is opened and sample of oil is checked at lab. After checking if it is found as per the standards than it is unloaded in tanks or else it is rejected. After unloading MRN is made, tanker is again weighted at weighbridge and than gate outward is made. JMD has enough tankers for transportation but if tankers are not available than tankers are hired from market. They enquire about freight from many transporters and negotiate with them and than as per the need (Days or Freight) they hire tanker and process goes on.

3.4(b) Outbound Logistics for Loose/Bulk Figure : 7

Oil is Refined and than it is stored in finished storage tanks. Than dispatch schedule is recd. From depots and marketing division and accordingly dispatch is planned. Than loading advise is prepared and tankers are loaded from tanks through pipe lines. After that it as weighted at weigh bridge than it is sealed and gate outward of tanker is made. Invoice is prepared at weighbridge and a copy is sent with tanker. Tanker delivers oil at final destination (depots and Distributers).

Consumer Packs: Once the oil is refined and ready for packaging, it is sent to the Packaging Department through pipelines for packing process. The company has in-house production of packing material. There are basically four types of packages used for oil packing. They are:-

1.

100ml Plastic Pouch

2.

500ml LDP Plastic Bottles

3.

1 Liter Plastic pouches.

4.

1 Liter LDP Plastic bottles.

5.

5, 10ltr LDP Cans.

6.

15ltr. Oil tins.

7.

15kg. Oil tins For production of 1ltr pouches, polythene rolls are purchased from outside and

through automated machineries pouches are automatically made and filled with the right amount of oil. The pouches are then automatically sealed off and ready for dispatch. These pouches have a high tensile strength. They can bear an outside pressure of up to 120kgs.

For production of 1ltr LDP bottles, raw material, known as Plastic Capsules, is purchased from outside. These are processed to make bottles inside the plant. These bottles are then put on a conveyer belt, which take the bottles to automatic oil filling machines. Then, the oil is automatically filled to desired level and bottles are seal packed.

Functioning of packaging Department: ✔ Packaging department at JMD Oils is very well designed. Semi autometic packaging machines and fully automatic machines are set in block B and C. ✔ Company it self manufactures Tins, Jars, Pet bottles, Carttons etc. ✔ Packaging department recieves the demand and dispatch schedule and than plans the packaging accordingly. Packaging department look after the inventory of packaged finished goods and also inventory of packaging material. ✔ Dispatch schedule is transferred to logistics department to delever the goods to final destination(i.e Depots and agents of company) ✔ Packaging department generates reports in navision and the copy of reports are mailed to concern departments. ✔ Packaging department is responsible for correct and timely packaging of goods, dispatch and loading of goods and for any errors like overfilling and underfilling, leakage etc.

3.4(c) Outbound Logistics of Consumer Pack (Oil, Salt Soap) through trucks

Figure : 8

Refined oil which was stored in storage tanks is sent for packaging, oil is packed in different sized consumer packs as per orders given by depots and marketing division. A schedule of dispatch is prepared as per orders and sent to packing department as well as production department. After that loading advice is prepared and checked for availability of trucks. If trucks are available than trucks are sent to packaging department otherwise trucks are hired from outside transporters by negotiating with them for fare and selected the best option. Trucks gate inward is made and weighted at weighbridge than Delivery Order is made and truck is sent to packaging department for loading goods(salt, oil, soap), after truck is loaded it is again weighted at weigh bridge and then security check is done and gate outward is made from there truck is sent to final destination (depots and distributor). 3.4(d) Outbound Logistics through Goods Train

Figure : 9

When goods are to be sent through goods train, company make n indent and give it to railway department, railway department gives a waiting no. and according to that waiting no. we are sent the date when we will ba availed wegons according to that date dispatch is planned, if company have to sent loose oil than it is sent through tankers and if consumer packs than goods are sent through trucks, vehicles are loaded with goods and sent to railway terminals, there vehicles are unloaded in goods train and goods are sent to other places through train.

3.5 FUNCTIONING OF STORE AT JMD OILS PVT. LTD. Figure: 10

Stock of all items other than Crude oil and Refined oil is maintained by store, store receives requirement(Issue sleep) from the department which is signed by department head, than it checks in the stock if stock of that material is available than store issue that material to the department and if material is not available than they ask for indent from the department which is verified by store and forwarded to purchase department and receives goods, goods are checked by store and if they are as per specification they keep that in stock, make a GRN and issue to demanding department and if it is not as per specification than reject that material and return to supplier. RGP is made for goods given for repairing and NRGP is made for goods that are returned. For records and inventory management store uses “Navision” software through which they keep records of inventory as well as positioning (where which product is located).

Other production sub-units

Other than production of edible oil, the company also follows Backward Integration. Here the company does not buy the packaging materials from outside like cartons, bottles, plastic cans and tin boxes instead they produce. For production of 1 LITER pouches, polythene rolls are purchased from outside and through automated machineries; pouches are automatically made and filled with right amount of oil. These pouches have high strength and can bear the outside pressure of up to 120 kgs. They have capacity of 18 pouches per minute per machine and they have 12 machines so 18X1X12X60= 12960 pouches per hour. For production of 1 LITER LDP bottles, raw material, known as “Priforms”, are purchased from outside. These are then processed to make bottles inside the plant. These bottles are then put on a conveyer belt, which take the bottles to automatic oil filling machines in which oil is automatically filled to a desired level. Machine has a capacity of 1 bottle in 6 seconds and they have 3 machines of bottle manufacturing so they have capacity to produce 1 bottle in 2 second average.

4. RECOMMENDATIONS ✔ Try to avail the quantity discounts from raw material suppliers by ordering in a lot.

✔ Use of GPS (Global Positioning System) to take a track on trucks and drivers. ✔ Create a warehouse within a warehouse.

On the one hand, you can gain tremendous efficiency by grouping together the 20 percent of your SKUs that complete 80 percent of your orders. This cuts travel time for your pickers. Be sure, however, that the 80-20 area or zone is properly designed to accommodate high-volume activity.

✔ Order pickers spend about 60 percent of their time walking product or moving product around. Consider an automated solution, they can keep the SKUs small stock in front and large stock upside so that it will be time saving.

1. CONCLUSION

After long time study and analyzing the observations it is observed that the practices going in logistics are best to my knowledge. They have followed the best way to control the cost as well as making its customers satisfied and proud to be associated with JMD. Company is fully automated in logistics (Transportation, Packing, Storing etc.) which is worth learning.

2. BIBLIOGRAPHY Book Martin Christopher, Logistics and Supply Management

Internet 1. http://www.cooit.org/subindexdetail.asp?id=1&pid=4 23/5/2009 2. http://www.cooit.org/indexdetail.asp?id=12&pid=12 23/5/2009 3. http://www.cooit.org/subindexdetail.asp?id=14&pid=1323/5/2009 4. http://www.cooit.org/subindexdetail.asp?id=15&pid=1323/5/2009 5. http://www.chempro.in/ 5/6/2009 6. http://www.oilmillplant.com/oil-refining-plant.html? gclid=CNC9t_bVlZsCFc0vpAod9kC1qQ 5/6/2009 7. http://www.oppapers.com/essays/Edible-Oil-Scenerio-India/128439 23/5/2009 8. http://www.shumaonline.com/costreduction_purchase1.html 25/6/2009 9. http://en.wikipedia.org/wiki/Logistics 10/5/2009 10. http://www.jmdoils.com