Nikhil Final Functional.docx

University of Mumbai

A project Report On Study on warehousing practices followed at Future Consumer Ltd. Submitted by

Nikhil Umapathi Joshi In partial fulfillment for the award of the degree of

MASTERS OF MANAGEMENT STUDIES SEMESTER – 4 2018-2019 Under the guidance of

“ Prof. C K Sreedharan”

“MAHATMA EDUCATION SOCIETY’S PILLAI’S INSTITUE OF MANAGEMENT STUDIES AND RESEARCH SECTOR-16, PANVEL-410206” 1

DECLARATION

I hereby declare that the Project Report, prepared by me under the guidance of Prof. CK Sreedharan, is a bona fide work undertaken by me and it is not submitted to any other University or Institution for the award of any degree/ diploma/ certificate or published any time before. I also declare that the report is free of any plagiarism.

Name: Roll No:

Signature of the student

2

Certificate This is to certify that the project titled “Study on warehousing practices followed at Future Consumer Ltd” is successfully completed by Mr. Nikhil Umapathi Joshi during semester IV, in partial fulfillment of the Master’s Degree in Management Studies recognized by the University of Mumbai for the academic year 2017-2019. This project work is original and has not been submitted earlier for the award of any degree/diploma or associateship of any other University/ Institution.

Name: Date:

(Signature of the Guide)

3

ACKNOWLEDGEMENTS No task is single man’s effort. Any job in the world however trivial or tough cannot be accomplished without the assistance of others. An assignment puts the knowledge and experience of an individual to litmus test. There is always a sense in a success. The opportunity to express my indebtness to people who have helped me to accomplish this task. I would like to take this opportunity to acknowledge my gratitude to various people who have helped for successful completion of the project. Their systematic guidance has helped me to complete the project in a smooth manner. I feel highly indebted towards the Director of my institute Dr. Satish K. Nair and my faculty guide Prof. CK Sreedharan for her constant guidance and support which helped me to make this project successful. I extend my gratitude to my college “Pillai Institute Of management Studies and Research” for giving me this opportunity. Last but not least; it would be unfair if I don’t express my indebtness to my parents and all my friends for their active cooperation which was of great help during the course of my training project. Any omission in the brief acknowledgement doesn’t mean lack of gratitude.

4

Executive summary

\ 5

Table of Contents Sr no.

Content

1.

Introduction

1.1

Major activities at Warehouse

Page no.

7-8

6

Chapter 1

1.Introduction This project is to understand the basic warehouse functioning and its procedures. It covers the warehousing activity at all the warehouses across India. Warehouse will be used for receipt, storage and dispatch of material to the Retail Stores, WH, Distributors, C&F, GT/MT Customers through authorized and approved carriers. The scope of activity covers WH responsibility in storing the material in good condition at the warehouse, Order processing as per customer requirement and distribution using own vehicle or handing over to authorized and nominated transporters or vendors. It also covers maintaining proper records of receipts, stocks and dispatches. WH will be responsible to keep and preserve all records pertaining to Receipts and Dispatches.

1.1MAJOR ACTIVITIES AT WAREHOUSES 

Goods Receipts



Goods Storage



Order Execution



Picking and Packing of the Goods



Dispatch process



Perpetual Count & Inventory Audit



House Keeping



Documentation & Book keeping

7

1.2 FUTURE CONSUMER LTD 1.2.1 ABOUT FUTURE CONSUMER LTD. Future Consumer Limited (Formerly known as Future Consumer Enterprise Limited) (FCL), India’s first sourcing-to-supermarket food company by Future Group is built on the virtue of sharing. Starting from the seeding of food at the farm to its consumption from the plate, FCL acts as a catalyst for each of its stakeholders. From sourcing, processing, retailing to final act of consumption – FCL strikes a widespread cord between the lives of the farmer, a factory laborer, a worker on the shop floor and the housewife. Food means sharing in India. It starts at the farms where neighbors, kith and kin join hands in tilling, sowing and harvesting of crops. Women come together to further process and prepare food. Recipes are passed down as heirlooms, shared by friends and neighbors and now on television by celebrity chefs. Under FCL’s spectrum, the company sources best quality commodities from world over, comprises of extensive portfolio of established brands in food and HPC space, builds urban convenience store for key metros and cash-n-carry rural distribution models for other cities across India.(Integrated front end to back end)

1.2.2 PURPOSE OF DOCUMENT

To provide standard operating guidelines for major activities performed at the third party warehouses. The manual is also framed to ensure that the set standard for measuring performance is achieved and uniformity in all the operations is followed across all the Warehouses.

1.2.3 SCOPE OF WORK

Scope covers the warehousing activity at all the FCL warehouses across India. Warehouse will be used for receipt, storage and dispatch of material to the Retail Stores, WH, Distributors, C&F, GT/MT Customers through authorized and approved carriers of FCL. The scope of activity covers WH responsibility in storing the material in good condition at the warehouse, Order processing as per customer requirement and distribution using own vehicle or handing over to authorized and nominated transporters or vendors, as per instructions from FCL.

Scope of work also covers maintaining proper records of receipts, stocks and dispatches. WH will be 8

responsible to keep and preserve all records pertaining to Receipts and Dispatches.

2. Objectives

 To study warehousing and its procedure  To provide standard operating guidelines for major activities performed at the third party warehouses.  To analyze the bottleneck occurring in warehousing procedure and its functioning, provide suggestions to it.

9

Chapter 2 3. GOODS RECEIPTS 3.1. PURPOSE: To ensure uniformity in receipt operations for FCL across all WH locations, fixation of responsibility & accountability and to define authority levels. 3.2. DEFINITION: Material is received in warehouses from Suppliers, Manufacturing Plants, CFAs, Docks and Customers. In case of Stock Transfer from Suppliers it is intimated through Purchase Order (PO). 3.3. SCOPE: All the Goods receipt in the warehouse. 3.4. PROCEDURES /GUIDELINES /ACTIVITIES SEQUENCE: The Receipts are of the following types: S.NO Sending Location 1 Manufacturing Plants / Inter DC

Type of Receipt Stock Transfer (FG)*

2

Vendor / Supplier

Purchase Order (FG)*

3

C&FA

Stock Transfer (FG)*

4

Customer Location

Rejected Stock / Return (FG)*

Receipt Documents Stock Transfer Invoice STN Copy LR Commercial Invoice PO COA LR Stock Transfer Invoice STN copy LR Discrepancy Note / Return Invoice / Customer Mail

*Finished Goods Shelf Life Norm S.NO Sending Location 1 Manufacturing Plants / Inter DC 2 Vendor / Supplier 3

C&FA

4

Customer Location

Remaining Shelf Life >80% Shelf life <80% shelf life

Receive/Rejection Receive COE Approval required

Upto 90% for <6 months prod Upto 85% for >6 months prod <85% Shelf life >80% Shelf life <80% shelf life On Sales and Commercial Approval

Receive Receive COE Approval required Receive COE Approval required Receive

In addition to the above documents, the receipt documents shall include Transporter’s LR (Lorry receipt), Road permits as applicable (Annexure-2). All consignments received into the warehouse shall be checked to ensure the right destination address is mentioned on all receipt documents. 6 10

3.4.1 Procedure for Receipt of Finished Goods a. On truck arrival at the warehouse, Truck Driver shall intimate Security Personnel, who shall update the gate/ inward register. Security shall verify all documents as mentioned above and record the details of vehicle, reporting date and time, LR number and invoice number, Road Permit/ way bill number (if applicable) in inward register(Annexure-14A). Road Permit should be endorsed by check post sales tax authorities b. The truck driver shall be informed about the time of unloading & handed over the token and driver advised to park the vehicle in parking slop. Security should handover the documents to Warehouse Incharge who re-checks the documents. c. The Unloading Supervisor should check and record any damaged, leakage loose and shortage stocks and the total number of cartons received compared to the receipt document. d. Inbound executive shall receive stocks in SAP. While entering the receipt quantity in the SAP, Inbound Executive needs to ensure that received SKUs-Quantity are allocated to right stock location in terms of Finished Goods. e. In case of short qty (absolute Loss qty) Inbound executive book short GRN and raise discrepancy note by informing vendor. f. Incase of excess/cross receipt the same needs to be communicated to vendor / FCL VM Team and to resolve the issue in real time. g. Inbound In-charge shall ensure that Driver’s signature is obtained on LR/POD as an acceptance of Goods delivered as per the condition mentioned on the same. The LR/POD should also be signed and stamped by Authorized person from warehouse and then one copy to be handed over to the driver as a material receipt acknowledgement. h. The material should be put away as per planned location for storage (1015 SLOC). i. The Unloading Supervisor shall ensure that SKU (Stock Keeping Unit) with same batch number and MRP should be stacked at one location. j. Material should be stacked as per the instructions on the carton. k. Leaky, damaged and loose material needs to be stored in a separate designated area (1013 SLOC) in the warehouse.

11

l. The total loss value due to transit is indicated on STN document and as per the insurance claim process, if the loss value is > INR 15000 the WH In-charge needs to fill in Claim Intimation Form, Obtain Spot Panchanama, take photograph of damaged goods and forward the relevant documents to FCL HO Transportation Team for insurance survey. The stocks should be clearly demarcated and kept separately for survey. The relevant documents are to be forwarded to FCL HO Transportation Team post insurance survey (For detailed procedures on insurance refer annexure 5). m. Completed set of Inward document should be filed along with copy of duly acknowledged LR/POD. n. Inbound executive to send valid acknowledged invoice copy with GRN no & short / excess remarks (if any) mentioned on it to HO MIRO team within 48 hours from the receipt of consignment.

3.4.2 Procedure for Receipt of goods from Distributors / Customers a. Finished goods shall only be returned under the following conditions. i. Goods are returned due to product/ pack quality, a complaint must be lodged to concerned sales manager / executive by Customer. i. Products that are tested and confirmed to be contaminated or off spec by Quality / Technical ii. If the CFA / Sales Manager made a mistake when placing or processing order iii. Pack is badly dented, damaged or leaking at time of delivery to customer for no fault of customer and customer refuses to take the delivery. iv. When customer’s address could not be located b. Finished goods shall not be allowed to be returned under the following conditions. i. Finished goods returned are slow or non-moving and claimed as un-saleable by customer. ii. Damage caused by customer handling or leak / contamination due to poor storage. In case there is Business case then such material shall be accepted post mail from Sales & Commercial which should have required approvals. 3.4.3. Procedure of Receipt of Imported goods ( Directly from Dock)

a. All procedure of receipt is same as mentioned in Receipt of Finished Goods except following documents are to be obtained along with the consignment and filed. 12

i. Copy of the Bill of entry ii. Clearing Agent’s Challan iii. Lorry Receipt iv. Packing List v. Invoice vi. PO Copy b. The vehicle should be unloaded only against valid purchase order. c. In case the consignment arrives at the warehouse without valid P.O user should contact the Import co-ordinator for necessary action.

13

4. GOODS STORAGE& HANDLING 4.1 PURPOSE: To ensure uniformity in storage operations for FCL across all locations, fixation of responsibility & accountability and to define authority levels. 4.2 DEFINITION: Material received is stored inside the warehouse for storage and easy retrieval for dispatches. 4.3. SCOPE: Total inventory of FCL & activity sequence mentioned herein below. 4.4. PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: 4.4.1 Guidelines for Making Warehouse layout plan a. Warehouse in-charge would allocate and layout the warehouse area category wise and store the material at respective locations. However the layout should be flexible. b. The layout should be made after considering the category of items viz. Food, Non-Food, Staples, Reserved Stock, Low Shelf life, Damaged and Expired stocks. Fast Moving skus should be stored near dispatch bay Or lower rack level. The total area of warehouse should be divided into visible marked locations. There should be separate staging area allocated in the layout. c. The layout should also have separate area for : i. MHE charging/ HPT parking area ii. Record storage area iii. Staff changing Room iv. Staff Wash Room v. Shop Floor vi. Office d. The warehouse layout should be displayed at a prominent place in the warehouse, well understood by the operating team. e. All packs should be stacked as per the allowable stacking norms mentioned on the pack / carton. f. Aisle& gangways marking should be done as per layout with yellow paint.

14

g. Fire extinguisher locations on the wall / floor should be marked with signage and should be clearly visible.

4.4.2 First Manufactured First Out a. FMFO should be maintained on product lot no. Old MRP products should be dispatched first from the warehouse and new MRP product dispatch must start after the old MRP product stock has been reduced to zero. FMFO for finish goods shall be followed by using a visual system in absence of WMS. Suggested visual management system for the same is as follows; 1. Green flag for stocks which are older manufactured with old MRP and should be dispatched first. 2. Red Flag for stocks which are newer manufactured with new MRP and should be dispatched later. b. It is required to have Bin-card system or WMS (Warehouse Management System) in order to maintain robust inventory management process.(refer Annexure for suggested Bin Card Format ) c. It is mandatory to follow the product/SKU wise stacking norms during storage. Stacking norms should be clearly displayed at various locations in the warehouse to ensure compliance. 4.4.3 Storage of Material in Open Area (Outside Storage) a. Warehouse in-charge must be aware that Outdoor storage can lead to significant deterioration of the packaging and product due to corrosion, fading of labels and artwork, water ingress and thermal effects. It should therefore be completely avoided. b. Where product has to be stored outdoors due to temporary space shortage, preferably material to be kept on wooden pallets and should be stacked as per stacking norms and it should be moved to a storage warehouse as soon as possible. c. External storage areas should be provided with some form of shelter to protect the drums and their contents. This should be a purpose made structure giving protection from heavy rain and direct sun, If not then at least a tarpaulin or similar temporary cover should be provided. 4.4.4 Storage on Racks a. Where personnel access to shelves more than 1.8m (6ft) off the floor is required, walkways, rolling safety ladders, non-slip step stools, or mechanical equipment shall be used. b. All supporting legs of the storage racks system at exposed corners should be protected by a metal pole at least 1.0m (3ft) high anchored firmly onto the ground to guard against impact from moving HPTs, trolleys or other equipment.

15

c. Cartons should be shrink wrapped or banded to resist movement during handling, particularly where they are to be stored at high level (3rd rack layer or above). d. Preferred pallet size 1000 mm x 1200 mm.

4.4.5 Storage of Material in Shared Site 1 The storage area in case of Shared Sites (i.e. Sites with multiple clients) needs to be properly demarcated between the multiple entities utilizing the site. 2 The separate areas need to have proper demarcation by usage of ropes/fencing mechanism. 3 The responsibility of common resources should be clearly laid down to prevent any ambiguity. 4 The Area being utilized should be clearly mentioned in the Warehousing Contract. 4.4.6 HANDLING: Loading/Unloading, Moving & Stacking of cartons Loading / Unloading cartons from truck may be done manually or by forklift (for palletized operations). It is recommended to have pallet trolleys for moving cartons inside the warehouse. Stacking : Stacking has to be as per the instructions mentioned on the carton. The stack height should not exceed the specified stack height mentioned on the carton. The top sections of a stacked block may be secured by tying a strap around it.

4.4.7 Material Handling Equipment (MHE) a. Material handling equipment includes FLTs (Fork Lift Trucks), Reach Trucks, and Stackers. Operators shall be trained in the safe use of all equipment by authorised trainers (e.g. suppliers of the equipment of an approved training body). The equipment shall be operated accordingly. b. A list of qualified operators shall be maintained at all time and be displayed or otherwise available for inspection. c. Material handling equipment shall be maintained in good working condition, with particular attention to the following: Tyres, Brakes-Lights, Safety cage, Hazard warning devices (lights, horn), Seats &Seat belts, Hydraulic ramps and other power systems and components. d. Where forklift and reach trucks are used in a warehouse, there should be no height obstruction through the driveway and aisle. For inter-joining storage racks which have a beam across the aisles or driveways, there should be a warning barrier ahead of the crossbeam. e. Forklift and reach trucks need to be check as per daily checklist before the start of the operation and checklist need to be kept for audit purpose. 16

f. When the MHEs are not in operation, they should be parked in demarcated areas and locked up, or keys removed to prevent unauthorised usage. g. Pallet Management-Pallets shall be regularly inspected to determine whether they need to be repaired or discarded. h. MHE movement area should be visually marked, so that the 3PL personnel can be mindful and careful while venturing in the warehouse area.

17

5. ORDER EXECUTION AND DISPATCH PROCESS 5.1. PURPOSE: To ensure uniformity in Order execution and Dispatch process for FCL across all locations, fixation of responsibility & accountability and to define authority level. 5.2. DEFINITION: Processing the order and Outward movement of warehouse stocks as per guidelines laid down by FCL from time to time. 5.3. SCOPE: Total activity sequence mentioned herein below. 5.4. PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: 5.4.1. Sales Order Processing a. Order Entry in SAP (HANA) : i. Auto Sales orders to be generated for Internal Customers. ii. Manual Sales Orders to be punched in SAP centrally for External Customers. iii. ICPO in case of Inter Company transfers e.g. Nilgir’s, Aadhar etc. b. A batch program is scheduled in SAP for ARS which runs every night and manual Sales orders are generated throughout the day. It also creates a soft allocation against all the available orders. c. Every day morning the Warehouse in-charge should review the availability against the orders in SAP. d. Warehouse in-charge shall refer order execution scenarios as given below as guidelines for planning and execution of orders. Order Execution Control: Scenarios

Activity PO/SO Scrutiny

Actions Suggested i) To check whether all SOs generated 100% against POs raised on schedule day. If not then escalate SO not generated cases to HO MDM team. ii) In case of PO/SO value mismatch the escalation needs to be done with HO MDM

18

Order Execution

Vehicle Planning

Outbound Execution

i)

Pick List / Delivery to be generated for all committed qty’s. ii) Picker to ensure picking as per pick list generated and handover the stocks to Outbound executive. Picker to communicate the changes i.e. batch, MRP, mfg date etc to outbound executive for necessary corrections in delivery. iii) Outbound Executive to place vehicle indent with transporter co-ordinator for next day shipment. i) Basis vehicle indent Transport co-ordinator to do a load analysis and plan vehicle basis load ability. ii) Transport co-ordinator to follow and ensure 100% vehicle placement. iii) Transport co-ordinator to maintain MIS in prescribed format. i) Outbound executive to punch proper details like Transporter code, LR No., Qty, Vehicle type, etc. and generate the invoice through posting the shipment document. ii) Outbound executive to ensure the loading as per Invoice. iii) Outbound executive to ensure to release the outbound vehicle within 2-3 hours from the time of reporting. iv) Security personnel to record the outward in their Security Outward Register. v) The copies of PO, Invoice, Trip sheet, way bill etc. needs to be handed over to driver.

Dispatch Documentation for dispatches from DC is indicated in table S.NO Sending Location 1 Manufacturing Plants / Inter DC

Type of Receipt Stock Transfer (FG)*

2

Internal / External Customers

Sales Order (FG)*

3

C&FA

Stock Transfer (FG)*

*Finished Goods

19

Receipt Documents Stock Transfer Invoice STN Copy LR Way Bill Commercial Invoice PO LR Way Bill Stock Transfer Invoice STN copy LR Way Bill

Shelf Life Norm S.NO Sending Location 1 Manufacturing Plants / Inter DC / CFA 2 Internal FG customers

Remaining Shelf Life >80% Shelf life <80% shelf life

Receive/Rejection Dispatch COE Approval required

>70% Shelf life Norm <70% Shelf life

3

General Trade

>80% Shelf life <80% shelf life

4

Other Modern Trade

>80% Shelf life <80% shelf life

Dispatch FRL ZOPS Approval required Dispatch FCL S&D Manager Approval required Dispatch FCL OMT Manager Approval required

20

e. Warehouse-In charge shall identify the customers for which load needs to be planned. f. In case of Interstate billing, he shall ensure Customer’s Road Permit availability (if applicable) for billing. g. System executive shall check the available credit limit for the particular customer / distributor. If the Credit limit is to be enhanced to execute the Order, Then a mail shall be sent to Credit Control department of FCL for increasing the limit with copy to Sales Manager and in case the credit control department rejects the request then execution for the said customer should not be planned. h. The vehicle availability shall be ensured by calling FCL nominated transport vendors. In case the vehicle availability is issue then FCL SCM should be informed well within time preferable. i. Manual allocation for material received on the same day shall be done to improve truck load ability as well as fill rate.

5.4.2. Stock Transfer Order a. Stock transfer from DC (Distribution Centers) shall be made as per distribution plan or advice from the Distribution Planning Team through email. b. Any Stock transfer advice should be in writing and no stock transfer shall be made on verbal advice. c. Based on advice, DC should check the material availability against the stock transfer order and manual picklist should be prepared. d. In case of Interstate stock transfer, Road Permit availability (if applicable) shall be checked.

21

5.4.3. Picking and Dispatch Process a. Order picking from warehouse is done as per the system generated pick list and any addition done to it is for improving truck load ability. b. Once the pick list is finalized then material should be picked on FMFO (First Manufactured First Out) basis and brought into the staging area. Floor Supervisor shall be responsible for ensuring FMFO. c. Loading Supervisor to ensure that the material picked is physically fit for dispatch to customer. d. The vehicle shall be loaded as per invoice and in presence of Transporter representative /Truck Driver / Assistant who shall verify and acknowledge the physical quantity and the condition of the material on the LR. e. Warehouse in-charge shall ensure that all the dispatch documentation complies with statutory and FCL requirements. Statutory requirements shall include waybills and road permits wherever applicable and Road Permit utilization report should be updated. f. All invoices shall be signed by only the person(s) authorized by FCL g. One set of all dispatch documents shall be filed and stored.

5.4.4. Sales Accounting for Customer Return Goods a. Despite of taking all care if there is wrong Billing, wrong dispatches etc. which leads to Customer complaints and Stock mismatch there is process of passing Credit Note in SAP i.e. reversal of Invoice. b. In case of wrong invoicing (Wrong MRP/batch/quantity/wrong SKU etc) if noticed before the vehicle leaves the premises then it is corrected through reversal and generation of new invoice. c. In case of customer returns due to quality or any other issue then the said qty needs to be taken back in the system through RSO against the valid invoice on which the stocks were dispatched. 22

5.4.5. Parcel/Part Load Movements In case the Order does not justify using a Full Truck Load (LCV, MCV, HCV) the parcel load may be used under intimation and approval from FCL Transport manager sitting at HO. All such transactions must be approved in writing/ emails by FCL Transport manager sitting at HO for records. 5.5. RELEVANT DOCUMENTS: a. All dispatch documents Pick Slip, Invoice, LR, Road Safety Checklist, b. Outward register c. Sales accounting documents. d. Approvals for parcel loads & under loads< 75% (Email copy) e. Utilization report for road permits.

23

6. PERPETUAL COUNT AND INVENTORY AUDITS 6.1 PURPOSE: To ensure periodical inventory check and stock verification. 6.2. DEFINITION: Perpetual Inventory Check: Perpetual Inventory check is the physical counting of stock on a perpetual basis. Physical Verification of Stocks: Physical Verification of stocks is the physical counting of stock at predefined intervals to arrive at correctness or variance in system stock & physical stock. Operations are required to be shut down during a wall-to-wall inventory check. 6.3. SCOPE: Total inventory of FCL including finished goods, Reserved Stock, Low Shelf life, Damaged and Expiry etc.

6.4.PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: 6.4.1. Perpetual Inventory Check a. All The items are classified into a “Cycle Count List” to be counted at regular intervals to ensure that every SKU is counted at least once within a defined period of 90 Days. If counted daily, all the sku’s billed on the day can be selected for counting. b. The warehouse supervisor physically counts the items available in the warehouse LOT, LOCATION, MRP wise and updates the Physical stock qty column. c. The Perpetual count sheet thus filled is handed over to the warehouse in charge. d. Warehouse in charge generates the systems stock list for all those sku’s counted and updates the system qty column. e. The system’s stock quantities and the physical stock quantities are matched in the Variance column to find out variance. f. If both tally, the Cycle Count sheet and Variance Report is signed and filed. g. In case there are any discrepancies (Both Volume as well as Value Discrepancy), a root cause analysis is carried out to find the cause by the warehouse in-charge.

24

h. These variances are sorted out (wrong dispatches, wrong receipts, contra receipts/dispatches, RSO not made for customer return, etc.). i. The Perpetual Count Sheet and Variance sheets are signed off by designated persons and send for SAP upload after seeking FCL CFO Approvals. 6.4.2. Physical Verification of Stocks The physical Inventory check is to be conducted by following FCL Guidelines which are released before every stock count. 1. Preparation required prior to stock count i. Proper Identification and arrangement of stock ii. Segregation of FG, Reserved, obsolete, damaged, Lose, leaky etc. iii. SKUs should be arranged lot number wise. iv. Count all partial packages and mark the quantity. v. Stocks arrangement shall be done in such a manner that it is accessible for counting vi. Inward GITs from inter DC to be cleared before starting the PI. vii. All invoiced material has to be dispatched or kept separately to ensure these are excluded. 2. Following steps to be followed during stock count. i. Assemble the count team and provide a clear counting instructions in terms of which team will count which section of warehouse or category of product. ii. Prepare cycle count sheet and the physical recording should be done on these sheets. iii. It is recommended that each stock count team consists of three persons – counter, recorder and verifier. a. Counter – responsible for counting b. Recorder – responsible for recording the quantity counted c. Verifier – confirm the quantity counted and recorded

25

iv. Recorder and Verifier could be a same person if the stock count team resources are constrained. v. All alterations and cancellations done on the count sheets are to be initialed by the stock counters. The staff responsible for stock keeping and recording must be available during the count. vi. All stocks must be counted i.e. finished goods, raw materials, packing material and equipment’s. vii. The description on a Carton may not always match the goods inside. The verifier should open some carton or packages and match the contents to the label. viii. Every team must sign off on the stock sheets after the count. ix. No goods should be issued while stock count is in progress. x. It is recommended not to receive any goods during the stock count period but incase it has to be received then an area will be designated for receipt of goods during the count and all goods received during the count shall be segregated from the stocks being counted. xi. Mark/Tick off the brightly color paper tag once it is counted. xii. The MRP and LOT number of the stocks should be noted while counting. xiii. The count sheets to be signed by the concerned team member xiv. After the count, the stock sheets must be returned to the stock count coordinator who will arrange for consolidation of the physical count figures. xv. The consolidated physical count figures must be compared against the updated computer stock records. The discrepancy must be mentioned in the variance report. xvi. The reasons for discrepancy should be one of the following and the same should be mentioned at an SKU level.

26

3. Stock count entry in SAP i. Cycle count sheet is prepared on which physical stock should be recorded along with actual MRP & LOT Number. ii. The cycle count sheet data is consolidated in excel and then the team member verifies the excel data with the physical count sheet. iii. The physical record data is compared to the SAP data. Unusual variances are reviewed with the count teams, and if required counted again to ensure the correct physical quantities were entered. iv. Any discrepancies between physical count and book quantities as well as Actual Value and Book Value of the stock (MRP differences) must be investigated and reconciled if possible by recount or otherwise. Product level variances should be analyzed carefully. v. The variance analysis report should also be signed by the FSC, FCL representative, Auditor and the stock verifiers. 4. Documentation for future reference

i. All major physical stock loss/gain should be investigated and explanation should be provided to FCL SCM. The MRP differences are also to be explained and reconciled. The copy of the same to be kept as record. ii. All the signed copies of the cycle count sheets, consolidated excel sheet and variance report shall be retained by FSC and filed for records. A copy of the same set shall be forward to FCL and 3rd party Auditor. Reasons for Stock Variance 1. MRP same, change in LOT NUMBER 2. Change in SAP location from salable to non-saleable or vice versa 3. Contra dispatch / receipt 4. Contra punching 27

5. Volume punching error 6. MRP contra 7. Floor Damage 8. Others- to be explained in detail

6.5 RESPONSIBILITY: Overall process responsibility: Warehouse In-charge 18

28

7. HOUSE KEEPING 7.1. PURPOSE: To advice FSC on basic minimum housekeeping expectations. 7.2. DEFINITION: Up-keep of warehouse and management of stocks in a tidy manner. 7.3. SCOPE: Applicable to all activities in the warehouse. 7.4. PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: a. Entire area is kept visibly neat and clean. b. All aisles and gangways are maintained free of dirt, and obstacles. There is a specified place for keeping MHE, HPTs, Fork Lift & housekeeping items. c. All stocks are kept free of dust. All signboards are kept clean. d. Sufficient manning for Housekeeping and a regular cleaning schedule is maintained. Housekeeping materials are checked regularly and replenished on a monthly basis. e. Pest control / General dis-infestation are carried out on a regular basis or whenever it is demanded by the Company. f. Sufficient space is provided and maintained for movement of materials within the Warehouse. All aisles and floor storage space are demarcated by yellow lines painted on the floor. g. Visible First Manufactured First out (FMFO) system should be followed either through WMS or through the physical usage of color coding from the time of storage itself. h. All documentation should be filed and stored in designated area with proper labels put on them for identification. 7.5.RESPONSIBILITY: Overall process responsibility: Warehouse In-charge

29

8. DOCUMENTATION AND BOOK KEEPING 8.1. PURPOSE: To provide basic guideline to third party managed warehouse management on documentation and book keeping 8.2. DEFINITION: Ensure availability/maintenance of statutory records as per guidelines and minimum requirement. 8.3. SCOPE: Applicable to all activities in the warehouse. 8.4. PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: 1. Sales tax related requirement for Outward movement a. SAP invoice should always be printed before loaded truck leaves warehouse and should accompany the material at all times b. Invoices should be properly signed by Authorized person only c. The transporters consignment Note (CN/LR/GR) and truck number should be mentioned and recorded in SAP while raising Invoice. d. The LR date and the invoice date should generally not vary except under unavoidable circumstances. e. Invoices should be raised and loading of truck should be done as per Invoice only.

2. Sales tax related requirement for Inward movement a. On receipt of consignment supervisor shall verify whether all documents are received viz. original& duplicate invoice, consignment note and endorsed copy of road permit. b. FSC shall not give any acknowledgement to transporter if the endorsed copy of permit is not handed over, and escalate the matter immediately to FCL SCM. c. The endorsed copy of the road permit should be updated in a road permit register (excel) on a daily basis. 30

3. Manner in which documents need to be preserved a. Month-wise invoices (dispatch/receipt) should be separately filed along with copies of C/N, L/R, etc. b. Separate filing should be maintained month-wise for the following : i. Stock transfer IN (receipts) –Invoice and PODs for each receipts ii. Stock transfer OUT (dispatch) - Invoice and LR copy for each dispatch iii. Sales - Invoice and LR for each shipment c. FILE REFERENCING: In order to maintain uniformity and ease of retrieval, each file should be named as per nomenclature briefed below:

31

4 DOCUMENT STORAGE Completed Files should be stored properly preferably in cupboards or in boxes with content label. 5. DATA STORAGE& SECURITY It is recommended that WH take quarterly back u p of mails and other important data stored in computers in storage device.

8.5. RESPONSIBILITY: Overall process responsibility: Warehouse In-charge 8.6 REFERENCE DOCUMENTS: Inward File Outward File Road permit File 21

32

9. COMPLIANCE TO HSSE GUIDELINES AT DC 9.1 PURPOSE: To outline minimum expectations regarding HSSE management at warehouses. 9.2 DEFINITION: HSSE stands for Health, Safety, Security and Environment. 9.3 SCOPE: This document is intended to outline the essential “must-haves” of HSSE guidelines for warehouse operations. For detailed guidelines on road safety refer Road Safety Manual 9.4 PROCEDURES / GUIDELINES /ACTIVITIES SEQUENCE: 1. Safety sign and notice board a. Any warning, conditions of entry, emergency directions or other information intended for persons entering a restricted area shall be displayed on signs and notices at each point of access. b. Such signs and notices shall include but not limited to; DANGER – NO SMOKING, NO NAKED FLAMES WARNING – RESTRICTED AREA, AUTHORISED PERSONNEL ONLY Emergency contact phone numbers Layout diagram showing location of fixed fire protection facilities Emergency exits and walkways Fire alarm Personal protective equipment Forklift warning (if applicable) First-aid kit and eyewash PPE usage Emergency Assembly point Designated MHE movement area 2. Security and legal requirement a. During operating hours, security measures (either appointed guard or internal staff) shall be put in place to control and check vehicle/goods movement in and out of the warehouse. For after office hours and holiday period, security guards should be used to protect the premises. Intruder alarm system should be installed where possible. b. External perimeter lighting around the fence and entrance should be switched on after nightfall to aid security surveillance. c. The warehouse shall be appropriately licensed for all its activities/operations as required by the local authority. 33

3. Cleanliness and housekeeping a. The premise of the warehouse should be kept clean and tidy at all times with regular cleaning and clearing off unwanted items. b. The aisles of the warehouse shall be kept clear c. Stock integrity shall be monitored (old stock, deterioration, leak, etc) d. All packages shall be handled with care to minimize leaks e. Minor spills shall be dealt with promptly f. Packages shall not be placed where they could jeopardize entry and exit g. Specified clearance distances shall be maintained at all times

4. Operational and personal safety The following detail operating procedures shall be implemented and complied: i. Visitors Briefing: All visitors shall be briefed on Safety Rules to be followed inside DC premises & Assembly point. ii. Permit to work: Work Permit shall be issued for any hot work, energy isolation, ground disturbance, entry into confined space and working at heights more than 2m. iii. Management of change : MOC process shall be used for new staff, job transfer, new equipment & modification, and new procedures iv. PPE use (e.g. protective clothing, eye protection, gloves, safety footwear, respirators etc) v. Safety audit shall be conducted at regular intervals and should be shared with FCL SCM and records maintained at the DC. Any action as an outcome of safety audit must be closed out as early as possible.

34

5. Personal Protective Equipments (PPE)

a. All employees, contract workers and contractors onsite shall wear shoes and safety helmets wherever applicable in the warehouse compound. b. Appropriate use of gloves shall also be enforced at specific locations. Appropriate signage should be displayed at entrances and specific areas. c. Additional PPE, commensurate with MSDS( Material Safety Data Sheets), shall be provided for safe handling of hazardous products. d. It is required that spare PPE such as safety shoes, and helmets (in racking area) are made available for visitors.

6 Fire fighting and protection a. All fire extinguishers should be located not more than 30 meters from each other in an area with unhindered access. They should be visible from a distance and must be serviced by competent persons as recommended by manufacturer however it should not exceed one year. The date of such a service must be indicated clearly on the fire extinguishers. b. All fire protection equipment, including fire exits and shutters, should be maintained in perfect working order. c. All the warehouse operation should have; i. A satisfactory plan for dealing with fires and other emergency ii. Satisfactory fire precaution measures in the warehouse iii. A suitable system for the examination and maintenance of automatic and manual fire fighting systems. iv. A system for ensuring that employees are trained to deal with emergencies such as fire. v. Regular mock drills to ensure safe evacuation in case of emergency

35

7. First Aid a. A first aid box should be set up with appropriate medicines to handle all minor and treatable injuries. The replenishment and replacement of these medicines should be done on a regular basis to ensure their currency and effectiveness. b. It is recommended that – i. At least one person on the premises is trained in first aid; and ii. A list of persons trained in and responsible for administering first aid should be displayed on all notice boards on the premises. 8. Emergency Response Plan (ERP) a. Emergency Contact No’s: Fire station, Police Station, Doctor, Ambulance Etc. should be displayed prominently. 9. Safety Triangle The concept of “Safety Triangle” is to reinforce the process of continuous safety engagements at all times and at all levels. The triangle with a wide base and narrow tip emphasizes that through more trainings, SOCs (Safety Observations & Conversations), reporting and sharing near misses (NMs), having safety audits, we can reduce the number of minor incidents, minor & medium spills, DAFWC (Days away from Work) cases and major incidents. DC should have a safety triangle board to capture the warehouse safety initiatives and performance. 10. RESPONSIBILITY: Overall process responsibility: HSSE Coordinator 9.6. REFERENCE DOCUMENTS: Fire extinguishers service records List of Trained First Aiders Work Permit File Management of Change (MOC) File 24

36

10. LICENCES, PERMITS & DOCUMENTS FOR DC OPERATIONS It is important to ensure that the DC has all the licenses & permits required by the law for storage & handling of FMCG products. a. FSSAI License. b. Registration under shops & Establishment Act/ Rules /Trade License / Gram Panchayat Certificate. c. Registration under Contract Labor & Regulation Act / Rules as an Establishment ( If applicable) d. NOC from Fire station / Department (If applicable) e. Lease Agreement / Clear property title of the warehouse premises f. Weights & Measurement (if applicable) The actual requirement may vary from state to state.

37

11.Bottleneck When you run a warehouse, you know that one inefficient process can create a bottleneck that can slow down everything. A warehouse staff is rated on how accurately it can handle orders and how well it can organize product, and there are plenty of issues that come with even routine warehouse management processes.

Transportation During the time of high demand the product movement is at its peak, so the availability of the vehicle plays an important role and if it’s not available on time, it creates a problem of delay in delivery of the product from Warehouse to Retail outlet or directly to the customer.

Product Organization Your supply chain monitoring begins the moment a product is received into the warehouse and put in its proper stocking bin. Maintaining an organized warehouse means putting the most popular products within reach, and having systems in place to find everything you need. Over time, a warehouse can become disheveled and the lack of organization is going to cause problems with your efficiency. There are two solutions required to keep a warehouse organized. The first is to do regular trainings with your warehouse staff on the importance of keeping the warehouse organized, and using the tools in place to keep the inventory system up to date. Keeping the warehouse organized becomes part of the corporate culture when it is the subject of mandatory training sessions. The other solution to maintaining an organized warehouse is to have strong systems in place that employees use to check-in and pick products. If your underlying systems are inefficient, then you will never be able to keep your warehouse organized. You need to stay up to date on the latest technology and be prepared to invest in whatever tools you need to keep your warehouse management process streamlined and efficient.

38

Stocking Stocking is another critical part of receiving that can often get taken for granted. If you take the time to properly receive product but have no comprehensive stocking system in place, then product can get lost and orders will not get filled. Too many warehouse management systems allow products to be subjected to generic stocking procedures that adhere to a loosely-maintained shelf and bin marking system. Without a proper stocking process in place, your warehouse can turn into chaos. The key to efficient stocking is to develop comprehensive marking systems for shelves and bins. Color-coding each part can help to speed up the picking process, but the ultimate solution lies in keeping track of each bin and having a system in place for efficiently stocking products. In a well-managed warehouse, a picker should know exactly where to go to get any product, and the inventory system should give an accurate count as to the number of products available.

Lack of Automation Automating a warehouse with efficient barcode systems and inventory control platforms is expensive, but it pays for itself over and over again. A warehouse without the proper automation is printing several pick tickets for the same order, unable to match purchase orders with packing lists properly, and is spending too much on inventory because it is unable to keep accurate count of what products are being sold at various times of the year. A barcode system eliminates the need for multiple printed pick tickets and an effective inventory control system makes it easy to compare company purchase orders against delivery packing lists. With automation, your warehouse becomes more efficient and cuts down on wasteful and redundant processes. Warehouse management is a complicated process that requires the right tools and experienced people. But when a warehouse is properly managed, it is efficient and lowers its cost burden against the company's bottom line.

39

Chapter 3 12.Learning Outcome Operation planning on each day is important factor for this company. The planning of upcoming task is declared at the start of day. The Inward is performed in such a way that satisfies client’s requirement. The picking and Dispatch activities are decided as per the customers need; and the company always tries to fulfill customer’s requirement. Company more focus on maintaining quality of inventory. While inbound logistics material is handled in appropriate way. Damaged products are kept in separate area which is known as ‘quarantine area’. This report covers all the functions involve in the warehouse. Warehousing is the act of storing the good and distributes them to the customer as per the order. Warehouse involve some functions like Inward this state that the process of goods come in the warehouse for the storing the inventory, Dispatch is the process of goods goes out from the warehouse as per the demand from the customer. Picking is an important act of the warehousing which picks the inventory as per the order. Further this report covers more functions of warehousing when is considered in this industry like Inventory and location management, Packaging etc. On adding to the same this gives a basic idea about the quality control in warehouse and the audit implementation in warehouse. As the warehouse industry is service industry customer satisfaction is most important. There are some factors are to be considered while dealing with the customer. WMS is most important factor in the warehouse industries. WMS can use to establish reports and storing the details of the inventory over the period of time.

40

41