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Summer Internship Projects summaries 2013
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Department of QT/RM/Operations College of Management & Economic Studies
Dr. Neeraj Anand and Dr. Binod Kumar Singh
UPES SIP CONTEST 2012
CMES SIP EXEUCTIVE SUMMARY
About SIP Contest
The book is the collection of the executive summaries of Summer Internship Projects of the
students enrolled for MBA programme. We have received forty five executives summaries from
the University of Petroleum & Energy Studies, Vinoba Bhave University and ITS, Noida etc.
The book comprises of shortlisted twelve executive summaries. The selected executive
summaries were reviewed by the panel of experts in CMES.
The book is a collection of twelve chapters and these chapters relate to different areas of
management. The chapters cover various aspects of management across the Power, Oil & Gas,
Supply Chain and International Business sectors.
Acknowledgement
We are thankful to our entire panel members for reviewing the executive summaries of the
participants.
We are also grateful to Dean who appreciated this initiative to organize such event at CMES,
Associate Dean and Assistant Dean of College of Management Studies for their kind support and
encouragement. We extend thanks to all the Head of the departments and all course coordinators
for their cooperation. We are also thankful to all non-teaching staffs for their support. We
appreciate the contribution of Dr. H. Roy who edited this book.
Last but not the least, we are thankful to our students of college of Management and Economic
Studies and other students of other institutions who have participated in this event, otherwise, it
would not have seen the light of the day.
Content
S.No. Title Page no 1 The study of corporate finance at Oil India Limited with special focus on
Treasury Management – Investment of Surplus Fund
1-3
2 Motivational analysis of the organization and effect of organiztional climate
at Air India
4-7
3 The Study of Employee Engagement at ICICI PRUDENTIAL 8-11
4 Effective &efficient logistics by way of on time delivery -A study of Birla
Uttam Cement
12-13
5 Impact of distance travelled & lead time on logistics/transportation cost for
domestic milk run operations in Brakes India Limited (BIL)
14-16
6 Financial benefits & carbon reduction potential of fuel change of a boiler at
Vayam Technologies Limited
17-19
7 IT application management & infrastructure monitoring of Maharashtra State
Electricity Distribution Company Limited
20-23
8 Socio-economic impact assessment at Sagar Island in respect of grid
availability
24-27
9 Detailed project report on comparison of standard of performance of
distribution licensee in Gujarat- 3 years comparison
28-31
10 Production planning in Catmoss Retail Private Limited, Noida
32-36
11 Manpower efficiency of a warehouse
37-40
12 Business strategy planning for a multicultural oil & gas joint venture asset: A
case of India-China JV in Colombia
41-43
Chapter-1
The study of corporate finance at Oil India Limited with special focus on treasury
management – investment of surplus fund*
1.1 Introduction
Oil India Limited (OIL) is an Indian public sector oil and gas company in India under the
administrative control of the Ministry of Petroleum and Natural Gas of the Government of India.
The project undertaken at OIL is a study of corporate finance. It includes analysis of the financial
performance of the organization over the years, the working of the treasury department and how
the surplus cash is being utilized, global importance of crude oil and its pricing.
The project starts with a brief introduction about the company and its operations followed by the
objective of the study and the methodology followed. Thereafter, an in-depth Economy Industry
analysis of Oil industry follows which covers the global environment and domestic conditions,
fiscal & monetary policies, trade policies, regulatory issues, competition in the industry, demand
drivers and the success factors. This is followed by an overall analysis of OIL based on its
financial performance over the years, growth plans, share performance, working capital
management, dividend policy and its cost revenue structure and growth plans.
The main project deals with the following:
Oil India Limited being a cash rich company has huge treasury operations and thus treasury
management is one of the very important corporate financial functions. Treasury Management
takes care of cash management, liquidity management, risk management, etc. OIL invests its
short-term surplus funds in different investment avenues throughout the year. Since the surplus
cash of the Company has been earmarked for future expansion plans and acquisition of assets, it
is imperative for the Company to maintain adequate liquidity in its investment portfolio. The
* Komal Virdi, Int. (B.Tech.+ MBA), CMES,UPES.
Company also recognizes that investment management is not its core business function and
accordingly protection of capital is a key driver for investment decisions. This reports talks about
the review of investment policy and different investment avenues. Being a PSE, OIL has to
follow the Department of Public Enterprises (DPE) guidelines to park its idle funds. Thus, an
analysis of the investments of the company and its financial performance over the years has been
done.
1.2 Objective
To get a brief idea of Oil industry in India.
To undertake a detailed study of the financial performance of the company and compare
the same with the industry as well as competitor.
To understand the management of surplus funds of the company on the basis of DPE
guidelines and the company’s investment policies.
1.3 Methodology
Define the
objective
To study how Treasury Department manage funds of the company.
Background
study
Detailed reading of financial reports of OIL. Studied investment
guidelines from the government, board notes and various presentations
for shareholders.
Collection of data Collected the required data from various websites, interaction with the
seniors in the finance department, business development department
and accounting department.
Analysis and
review
Analyzed and interpreted the data using the prepared models followed
by reviewing the output to ensure proper and exhaustive analysis.
Understood the factors which affect the organization favourably.
Preparing the
report
The theoretical framework, findings, analysis, conclusions and
recommendations presented to the organization in the form a project
report to enable proper reporting of the findings.
1.4 Findings, Conclusions & Suggestions/Recommendations
From the study of overall process of investment of short-term surplus of OIL, I can conclude that
it has devised a sound process of investment, which, is purely based on commercial basis. The
Company is following the DPE guidelines to park its surplus funds, which all the PSEs have to
follow. Along with it the Company has its own investment Committee which looks after every
aspect before investing the funds. The Company appoints different agencies from time-to-time to
review its investment process. The Risk based limit structure for banks proposed by ICRA is
quite satisfactory. As the Company is a PSE1, its major concern is the protection of capital and to
maintain adequate liquidity. Thus, the Company does not invest its funds with any instrument for
more than one year to meet any unforeseen contingencies. Similarly, the Company properly
takes care of Default probability of each avenue before investing the funds with it. And hence, do
not invest its funds with those instruments, which have risk associated with them.
The major portion of the Company’s funds is invested with the FDs with the banks i.e. almost
equal to 80%.
Oil India limited is a financially very stable company. The company has consistently given good
dividends to shareholders although the market value of shares has fluctuating nature, but EPS2
has been consistently on an increasing trend.
The competitor of Oil India is ONGC it is a much bigger company as compared to OIL in terms
of assets but Oil India has a better return on total asset ratio OIL-0.1365, ONGC- 0.1317. This
means OIL is better utilizing its assets.
Treasury Management plays a crucial role in the company because it is a cash rich company and
hence the decisions to invest the surplus cash are very important. Department of Public sector
enterprise has given some of the guidelines to the public sector companies. These guidelines
restrict the companies to invest in risky portfolios. This substantially reduces the returns that the
company can get by investing in these portfolios.
OIL is a Navratna Company of India. Oil India Limited (OIL) traces and symbolizes the
development and growth of the Indian petroleum industry. Based on the findings of the project, I
would like to recommend the following for the benefit of the company:-
The company has very less debt ratio (.057 in 2011-10). This shows that company is not able to
take advantage of tax shield.
Debtor‘s turnover ratio or receivables turnover ratio of the company is less than the
industry average. It is suggested to the company to collect its money faster from credit
sales.
1 Public Sector Enterprise
2 Earnings per share
The company has lot of cash in hand 11524.36 crore. This money is invested in term
deposits although it fetches more interest than demand deposits but still this money
should be invested in acquiring more assets in India or abroad.
Company should invest more in research and development department.
One of the most important suggestion to the company is there is no currency hedging
used by the company. Now that company has overseas operations also it is very
important to have currency hedging.
The company can take comparatively a little more risk to maximize gains
The company needs to use hedging techniques (futures, options and swaps) strategically
for greater profitability and risk management.
The company can take comparatively a little more risk to maximize gains
Chapter-2
Motivational analysis of the organization and effect of organiztional climate at Air India*
2.1 Introduction
Four most popular organizational topics are team effectiveness, leadership, organizational
learning and organizational climate. Culture related concepts can be seen as multi- level
concepts. At the first level are the values which give a distinct identity to the group. This is ethos
of the group.
The Second level of the concept is climate. This is the perceived attribute of an organization and
its subsystems. It is reflected in a way it deals with its members, groups and issues. The emphasis
is therefore, on perception as well working of the sub-system. The Third level of concept relates
to the atmosphere which in fact is the resultant effect of this climate. The Fourth level is the
cumulative effect, which is the aggregate of beliefs and values of the organization.
It is based on a belief that motivational aspects of the employees affect the climate of the
organization, which in turn affects the motives of other players of the game. Climate being a
perceived attribute, it is necessary to capture perception of internal stake holders, as it finally
determines the level of motivation in the organization.
2.2 Usage of Instrument
For the purpose of study of motivational analysis of organization climate, MAO-C, a well-
accepted instrument has been used. This instrument has been designed to study organizational
climate with special regard to motivation. Instrument engages 12 dimensions of organization
climate and 6 motives. A Matrix is created between these 12 dimensions and 6 motives by rank
ordering various statements pertaining to these 12 dimensions, as per perception of the
respondents. These 12 dimensions are
1. Orientation
2. Interpersonal relationship
3. Supervision
4. Problem management
5. Management of mistakes
* Bhwana Singh, ITS-Institute of Management,Greater Noida.
6. Conflict of Management
7. Communication
8. Decision making
9. Trust
10. Management of Reward
11. Risk taking
12. Innovation and change
The six motives are:
1. Achievement
2. Expert influence
3. Extension
4. Control
5. Dependency
6. Affiliation
2.3 Organization
Air India was chosen as the target organization and the study was carried out in the months of
April to June, 2012.Present Air India consists of merged entities of two erstwhile monoliths
namely, Indian Airlines and Air India. The Merger has been primarily carried out at the financial
and operating levels and not truly at the human resource level. Air India being a service
organization, such merger of human resources (howsoever difficult) is to be attempted for
cultural merger, leading to creation of a homogeneous organizational climate, absolutely
essential for service organization facing immense completion.
2.4 Sampling
Total number of 40 respondents has been examined based on the MAO-C instrument (slightly
modified). The sampling had been random with 20 respondents from erstwhile Indian Airlines
and equal number from erstwhile Air India.
The examination has been carried out on an assumption that this 20+20 sample represents a
homogeneous mix of newly created entity. This has been so done because the aim of the
researcher was to take stock of the effect of motives in determining climate of the organization,
as exists in this merged entity called Air India.
2.5 Data Analysis
Being a standard instrument, MAO-C has its own benchmark based on the surveys carried out
earlier. Details of these surveys are available in the book: “Training Instrument in HRD and OD”
( Prof. Uday Pareek ,Chapter 96), pertaining to usage of this instrument.
The literature on the subject states that this instrument shows relative strength of the climate with
regard to the motives, the cutoff point- being 50. The study presumes that if the index number for
a particular motive is greater than 50, the climate is relatively strong for that motive and vice-
versa.
This instrument, apart from being used as a measuring stick, can also be used for comparing two
different entities like organizations, departments, varying profiles of respondents etc.
The researcher has travelled beyond the standard usage of the MAO-C and has utilized
demographic data namely age, gender, qualification and marital status, in order to find out
possible co-relation of these motives vis-à-vis demographic characteristics of the respondents.
These have led to formulation of various hypotheses and their acceptance and rejection.
2.6 Application of statistical tools
The MAO-C instrument itself describes keys to the scoring pattern. This converts the preferences
of the statement in the questionnaire into index number which leads to arriving at cumulative
index number determining the effect of six motives on the climate of the organization.
Z- test has been used for comparing these cumulative index number with the cutoff point of 50,
to determine sample consistency.
As regards the extended analysis is concerned, the demographic characteristics of respondents
have been compared with the strength of each motive. Wherever these have been found to be
significant, the data pattern has been verified by skewness, kurtosis, standard and normal
distribution. One way Anova & Z-test have been used in finding co relation of motive &
demographic parameters leading to acceptance & rejection of hypotheses.
2.7 Findings
The instrument treats index figure of 50 as cut off point in determining high and low levels of
motives.
All data which hoover around 50, have been checked whether they match the magic figure and
belong to same sample group.
Out of the six motives, five motives namely achievement, expert influence, extension,
dependency and affiliation have been found to be throwing data leading to the index of 50. This
leads to the conclusion that effect of these 5 motives result into motivation of moderate level in
the merged entity Air India.
Motive of Control differs substantially. The index figures comes to around 68 which is very high
compared to the average figure of 50.
Motive of Control is characterized by a concern for orderliness and a desire to be and stay
informed. This also exhibits a tendency to display personal powers. In all the motives, the index
number hoover around 50. Notwithstanding this, the standard deviation was very high showing
high dispersal of the data. Be that as it may, respondents coming from two different
organizational cultural backgrounds are expected to display dispersed perceptions. What is
surprising and encouraging is the fact that inspite of this wide dispersal, index is at acceptable
level of 50.
The 12 process characteristics which form the matrix are the result of various surveys carried out
at the corporate level. Literature survey will reveal that, the process of reorientation. if dominant,
the climate will be characterized by control. Similarly, processes of inter personal relationship,
if governed by the purpose of protecting the interest of the group members, clique may develop
and a climate of control may result.
These two are indicative of the climate in the merged Air India. Ethnic (erstwhile India Airlines
and Air India) groups are struggling to maintain their individual identify, while they are
simultaneously being forced by financial and operations reasons to work together.
2.8 Hypotheses Testing
Six motives and four demographic characteristics have been intertwined to form twenty four
hypotheses which test co-relation, if any, between demographic characteristics and relationship
with the motives. These twenty four hypotheses have also been tested in the study.
Chapter-3
The study of employee engagement at ICICI PRUDENTIAL*
3.1 Introduction
Employee engagement can be defined as an employee putting forth extra discretionary effort, as
well as the likelihood of the employee being loyal and remaining with the organization over the
long time. Research shows that engaged employees: perform better, put in extra efforts to help
get the job done, show a strong level of commitment to the organization, and are more motivated
and optimistic about their work goals. Employers with engaged employees tend to experience
low employee turnover and more impressive business outcomes. Present research has been
conducted in order to determine the level of engagement of employee at different designations,
12experience and gender among the employees of ICICI PRUDENTIAL. The primary data for
this study was compiled through questionnaire filled on a one-to-one basis by 70 respondents of
the company ICICI PRUDENTIAL in 2012. The results have shown that level of employee
engagement was average and there is no significant difference in the level of engagement of
employees of different gender, designations and experiences in ICICI PRUDENTIAL was low.
The study was faced by certain limitations and those limitations include time constraints and low
response rate of employees in ICICI PRUDENTIAL.
3.2 Company Profile
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's
foremost financial services companies-and prudential plc - a leading international financial
services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 42.72
billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.Company began
operations in December 2000 after receiving approval from Insurance Regulatory Development
Authority (IRDA). Today, our nation-wide team comprises of over 2000 branches (inclusive of
1,095 micro-offices), over 261,000 advisors; and 24 bancassurance partners.
* Preeti Chowdhary, I.T.S- Institute of Management, Greater Noida
The ICICI Prudential edge comes from our commitment to our customers, in all that we do - be it
product development, distribution, the sales process or servicing. Here's a peek into what makes
us leaders.
Products have been developed after a clear and thorough understanding of customers' needs. It is
this research that helps us develop Education plans that offer the ideal way to truly guarantee
your child's education, Retirement solutions that are a hedge against inflation and yet promise a
fixed income after one retire, or Health insurance that arms customer with the funds one might
need to recover from a dreaded disease.
Industry of insurance has its own strengths and challenges.
3.3 Strengths
ICICI Prudential is the no.1 private sector company. As a result of increasing awareness of the
people regarding secure investments, life insurance is the best option which gives the benefit of
insurance & investment
3.4 Challenges
Now a day most of the people are aware of life insurance, still only 8% of the Indians are
secured Difficulty in convincing people as they are still engaged with the traditional LIC
policies. Because of lack of knowledge, policy holders often buy unfavorable policies, in
response to these issues, governments often make detailed regulations which set down minimum
standards for policies and govern how they may be advertised and sold.
3.5 Objectives
To study the engagement level of the employees in the organization.
To study (compare) the employee engagement levels at various positions.
To compare the engagement level of employee based on their years of experience
3.6 Research Methodology
This report is based on primary as well secondary data, however primary data collection was
given more importance since it is overbearing factor in attitude studies. One of the most
important use of research methodology is that it helps in identifying the problem, collecting,
analyzing the required data and providing an alternative solution to the problem .It also helps in
collecting the vital information that is required by the top management to assist them for the
better decision making both day to day decision and critical ones.
Research is totally based on primary data. Secondary data used only for the reference. Mainly
research has been done by primary data collection with the help of questionnaire and also
primary data has been collected by interacting with various people at ICICI PRUDENTIAL. The
secondary data has been collected through various journals and websites. The Primary data was
collected by using an established instrument, namely Utrecht Work Engagement Scale. The
questionnaire has seventeen question excluding demographic details i.e. gender, age,
qualification, designation, experience. A seven point Likert scale was used in the questionnaires
with the options such as almost never, rarely, sometimes, often, very often, always. The
secondary data was collected by using internet, company website, books, magazine.
The sample was selected from those who are the employees of ICICI PRUDENTIAL,
Karkarduma Branch, and Karolbagh Branch irrespective of them being investors or not or
availing the services or not. Data was also collected through personal visits, by formal and
informal talks and through filling up the questionnaire. The data has been analyzed by using MS
Excel and SPSS Statistical Software .The total population of ICICI Prudential is 400 at these two
branches. The questionnaire was distributed to 100 employees.. Out of which only 70 people
had returned the questionnaire. Other 30 people did not return the questionnaire .The sample size
is therefore 70. Data has been presented with the help of SPSS, Pie chart etc.
3.7 Hypothesis
H01: There exists no significant difference in the levels of employee engagement
between the employees of various experiences.
H02: There exists no significant difference in the levels of employee engagement
between the employees of various positions.
3.8 Conclusion
Level of employee engagement level was found to be average . Most of the employee are
engaged in the organization. The employees of the organization are neither satisfied nor
dissatisfied they are at neutral stage. So employee engagement level is neutral. It was also found
that the employees of executive and managerial level do not differ in terms of job satisfaction
level. Employees at both levels are satisfied with their jobs. Also the employees of ICICI
PRUDENTIAL with different experience do not differ in terms job satisfaction level.
3.9 Limitations
The study has taken convenient sample as sampling procedure, where the employees of the
organization. Some other limitations may impact the results and generalizability of the findings
which occurred during the research design phase due to differentiated response rates,
heterogeneity of job responsibilities of respondents. Lack of response and the inability to check
all the responses served as other limitations during the recording and codification process of
responses after the questionnaires administration phase.
Chapter-4
Effective & efficient logistics by way of on time delivery -A study of Birla Uttam Cement*
4. 1 Introduction
Improving efficiency and gaining effectiveness for any business is necessary now-a-days to gain
competitive advantage over the competitors. And improving the efficiency in terms of “On Time
Delivery(OTD)” for any industry is the need of today because now companies are unable to cut
their cost in any other activity and almost every company is incurring 40% of its cost on
logistics. So improving the OTD service for sustain in the market is the requirement in order to
help out their customers and to help in the logistics services and growth of the company.
Supplying material at right place on right time in right quantity, without affecting freight cost is
the most challenging factor in cement industry. So in this report, I have suggested some tools to
improve the OTD service level without deviating from minimum cost strategy.
In today’s scenario to sustain in the market, the company must supply material to the customer,
when they want. Otherwise in this competitive market, the customers won’t wait and they will
switch to other brand without delay.
The Project was done at Mangalam Cement Ltd. is a gap finding project undertaken to study the
importance of On Time Delivery service in Cement industry and how to improve this service to
get customer satisfaction and to sustain in the competitive and dynamic market.
To find various factors which affect the OTD service, I have prepared three questionnaire, one
for Dealers, one for Transporter & one for Responsible parties at Outbound Logistics side.
FILTER approach is used for designing questionnaire (means general to specific). The Sample is
selected on the basis of proportionate stratified sampling approach. Then I conduct a telephonic
& personal survey and try to find out some results. These results have been analyzed to get co-
relation between two factors. I have also done regression analysis to find degree of co-relation
between independent variable (secondary distance) and dependent variable
* Ravinder Dahiya, MBA (LSCM), CMES, UPES.
(respective secondary freight cost). The plant was also visited to find bottlenecks in logistics
system.
I have suggested some changes in composite C&F policy (extra money goes to C&F Agent). To
make logistics effective I have solved a Transportation Problem (Secondary Dispatch Delivery
Optimization) for the destinations comes under Jaipur 1 Depot. The Decentralized Distribution
System (DDS) is also suggested to improve timely delivery service, which will help company to
save huge money from logistics budget. The recommendations suggested to the top management
qualify for executing significant sustainable savings to the tune of approximately 10.5 Million
INR (for Jaipur 1 Depot only) annually if implemented successfully by the company.
The project undertaken still leaves a scope to measure results because of time constraints, since
most of the opportunities identified need some kind of developments and approvals from
different departments in the company, which will take time.
.
Chapter-5
Impact of distance travelled & lead time on logistics/transportation cost for domestic Milk
run operations in Brakes India Limited (BIL)*
5.1 Objective
1. To study the impact of Distance travelled and Lead time on Logistics/Transportation cost.
2. To make a time and motion study into the current operations of Loading and Unloading
activities and suggest improvements to the same.
5.2 Research Methodology
5.2.1 Type of research
The Research is exploratory in nature.
5.3 Need of the Study
With a better understanding of the influence that Distance travelled and Lead time have on
Logistics/Transportation cost, efforts can be made to optimize the process to bring about a
reduction in the cost incurred in Logistics.
Lead time reduction will help
1. Enhance the overall Supply chain operations
2. Enhance the current Logistics practices followed
3. Bring about cost savings, which can be further invested in optimizing the operations.
5.4 Source of data collection
Primary and secondary sources were used to collect the data. Data were collected during various
activities of Loading and Unloading for Milk run routes 3 and 5. Data was collected by tracking
the vehicles as soon as they enter the factory premises till they leave the gate. And if the vehicle
took a long time in moving out company record was referred. Also a visit to suppliers in Milk
run 3 was undertaken to record a Motion study of activities performed en-route.
* Seshadri Kannan, MBA (Logistics & Supply Chain Management), CMES, UPES.
5.5 Scope of the study
1. Interaction with employees in SDI module and in the Manufacturing units.
2. Knowing about Services offered by TVS Logistics, BIL’s service provider.
3. Meeting suppliers on a Milk run route and identifying issues.
4. Analyzing and identifying service gaps.
5. Recommendation on current practices of service offerings.
5.6 Limitation of the study
1. Time Constraint – Due to time constraint, I was unable to focus on all routes.
2. Getting higher officials’ time for discussion.
3. Since timing of Loading and Unloading activities were recorded on a stop clock, the data
recorded is limited to hh:mm only. ‘Seconds’ data was ignored on some cases.
4. Certain data was not available with the company and certain data was not updated, so I
have compiled the corresponding findings up to the updated date.
5.7 Findings
1. BIL is using TVS Logistics as their logistics service provider for all their inward
material movements for manufacturing and is paying with respect to the number of
trips / days the service provider operates for in-warding materials.
2. The current Pricing methodology is arrived between BIL and TVS Logistics in 2
ways:
Distance slab
Time slab
3. Suppliers of BIL are located at different geographical locations and catering to 3
major manufacturing plants which are located 100 to 110 Km apart. Some of these
suppliers are covered by Milk run routes and the remaining suppliers are covered
under long haul routes.
4. In milk run routes, normally the vehicle starts from BIL with empty trays and collects
materials from various suppliers located in and around 50-60 Kms from the Padi
plant. Each trip will be operated for 9 hours daily. If the vehicle operated for more
than 9 hours (Plus some Grace time agreed upon by BIL and TVS Logistics), BIL has
to pay an extra amount of Rs.300. For long routes there will be no time limit as such.
5. Since TVS Logistics does not get any schedule in advance from BIL or from the
supplier, the vehicle needs to cover all the suppliers every day, even when no material
is available at the supplier’s end. In some routes, a single supplier is covered by more
than one vehicle (ie. Muti trips to the same supplier on the same day).
6. For Milk run “ACCURATE” there seems to be a perennial problem of vehicles
always arriving hours later than the scheduled window time.
At the Supplier end maximum time is lost preparing invoice and report. Since suppliers have the
order information available, the material is kept ready for Loading and hence not much time is
spent here.
5.8 Suggestions/recommendations
A correlation study revealed that the correlation between variables price and distance is 0.989547
and the correlation between price and time taken is 0.534927. Based on this I proposed a cost
savings of up to 22% of BIL’s total expenditure on Logistics for the observed period which
comes to Rs. 19,740 (Yearly savings of Rs. 2,36,880) and the existence of scope for a reduction
of 40 to 45 minutes of precious Unloading time. This coupled with a time saving of up to 15
minutes at certain suppliers (like KRP) if the invoice and billing process is quickened, results in
about 1 hour of reduction to Lead Time, for the selected Routes – Milk run routes 3, 5 and
ACCURATE. The time savings can be used as a buffer for unexpected delays at the GATE or
inside BIL premises, which may result in the vehicle being used up by BIL for more than the
window period of 9 hours saving up to Rs. 300 per trip for the delay.
Further I have made several recommendations for process improvement at
1. BIL GATE
2. Loading
3. Unloading
Chapter-6
Financial benefits & carbon reduction potential of fuel change of a boiler at Vayam
Technologies Limited*
6.1 Introduction
A Punjab based company Milkfood Limited used to fulfill its electricity demand from grid
supply and steam demand from coal fired boilers. In the new scenario, the electricity supply from
the grid and the steam generated from coal fired boiler has completely been displaced by the new
rice husk based cogeneration plant.
6.2 Objective
1. To check the financial feasibility of the new fuel (biomass: rice husk) for the boiler.
2. To calculate the reduction in carbon emission due to change in fuel.
3. To find the areas in which this change in fuel will help towards the sustainable
development.
6.3 Research methodology
A standard procedure is used to calculate emissions reduction of a Clean Development
Mechanism (CDM) project.
A. Baseline Emission
(i) For displacement of electricity from a grid
( )
( ) ( )
(ii) For displacement of heat produced using fossil fuels
( )
( )
( )
Where:
η : The efficiency of the plant using fossil fuel that would have been used in the
absence of the project activity
*Shobhit Agarwal & Mohammed Shahid, MBA-Power Management (III Semester), CMES,
UPES.
EF: The CO2 emission factor per unit of the energy of the fuel that would have been used
in the absence of the project activity.
Since the project activity displaces both grid power and steam from coal fired boiler, the
baseline is summation of both (i) and (ii).
B. Leakage Emissions
It refers to any GHG emissions that occur outside the project boundary as a result of the
project. There is no technology transfer in project activity, therefore any leakage
emissions are not expected from project activity. The biomass is available in the 50 kms
of the project site and thus can be neglected.
C. Emission Reduction
ERy = BEy – LEy
Where:
ERy : Emission reductions in year y (t CO2)
BEy : Baseline emissions in year y (t CO2)
LEy : Leakage emissions in year y (t CO2)
6.4 Findings & Conclusions
Parameters Coal Rice Husk Unit
Annual Fuel Requirement 20058 32334 Tonne / Annum
Fuel Cost / Tonne 3200 2500 Rs / Tonne
Total Cost 641.86 808.35 Lacs
Fuel change burden / Year 166.49 Lacs
Amount of Carbon emitted 37407 tCO2 / year
CDM benefits / Tonne 700 Rs / Tonne
Total CDM benefits / Year 261.85 Lacs
Amount of Electricity Generated / Year 7227 MWh
REC benefits / MWh 1500 Rs / MWh
Total REC benefits / Year 108.40 Lacs
Benefit of fuel change / Year 203.76 Lacs
Thus we can see that if the company is not provided with the benefits of CDM and REC, then it
will suffer a big loss of Rs 1.66 crores annually. Hence the project should be supported with
these incentives to motivate the company to show its corporate social responsibility. This project
of changing the technology is not only a financial benefit for the company, but also contributes
towards the sustainable development.
1. Environmental Well Being: Renewable biomass (rice husk) is used as a fuel that will
reduce the GHG emissions. It also helps in conserving coal by avoiding the process steam
generation from coal fired boiler.
2. Social Well Being: The project activity helps in improving the working conditions inside
the plant premises by eradicating the unhygienic coal handling procedure as well as
improving the local environment for people living in proximity.
3. Economic Well Being: The project activity provides business opportunity for all
including biomass suppliers, contractors, local farmers. Also contribute to a small
increase in the local employment by employing skilled and un-skilled personnel for
collection & transportation of the biomass from the vicinity.
6.5 Suggestions/recommendations
India has a tremendous opportunity to capitalize on its natural resources to address the growing
deficit in a sustainable manner. We can’t afford the international coal market fluctuations to
affect the industries the way oil market is doing. The project analysis shows that a small example
like The Milk Foods can be extrapolated and be used in the larger interest of the country. This
can be done with the suitable incentives and support to the industries from the state and to the
states from the Centre. India needs continuous government and private sector support, increased
investment in manufacturing, and more technology sharing to unleash its potential.
Getting monetary help for the high upfront cost of green technology is as important as
implementing it. Since the technologies involved are new to the sector it will be tough for the
banks to release money for the companies. Experts say that in such a situation non-recourse
financing is the way where the lending institutions would provide debt to a special purpose
vehicle set up for the project and would have lien on the projects cash flow.
This report is submitted with the hope that its findings and recommendations can advance
implementation in subsequent phases and promote a comprehensive and strategic approach to
building a robust energy independent nation.
Chapter-7
IT application management & infrastructure monitoring of Maharashtra State Electricity
Distribution Company Limited*
7.1. Objective of the Project
To analyse the Infrastructure of MSEDCL and worked on performance monitoring of the
current Infrastructure to reduce T&D losses in the operating system.
To calculate the financial feasibility of different schemes availed in strengthening &
improving the MSEDCL infrastructure.
To find the best usages of IT in distribution sector for the reduction of human
interference and more revenue collection.
To consolidate the different technical & commercial problems and recommend various
solutions to overcome it. And to explore on issues & challenges in front of Maharashtra
discom for their sustainable growth.
7.2 Specific Objective
Calculate the cost benefit analysis of RAPDRP (Part A & Part B), High Voltage
Distribution System (HVDS), Automated Meter Reading (AMR) and Prepaid Meter.
Financial comparison of above Schemes by calculating NPV, IRR & Payback period on
excels worksheet and imposed it on Bar chart.
Provide different short term & long term measures to reduce AT&C losses and methods
to recover it.
7.3 Research methodology
I worked to find out the different methodology and practices of IT application management &
Infrastructure performance of different areas of Maharashtra like Nasik, Aurangabad &
* Mr. Nitin Chimote, MBA (Power Management), CMES, UPES
Nagpur by visiting their circle, zonal offices & Head office (Mumbai).Interaction with their
employees like chief engineer, Executive engineer, Senior engineer, Junior engineer and others
staff.
While working upon the project, I had gone through different discussion with management and
field visit in Maharashtra which helps me to understand the working of different zones, their
losses, their infrastructure & approaches to evaluate the performance. The project report
mentions the need for efficient utilization of electricity by reducing the AT&C losses,
strengthening of Distribution infrastructure, optimum utilization of IT and working culture of
Organization. I have calculated the financial stability of various schemes covered under
RAPDRP (Part A & Part B), HVDS, AMR and Pre Paid Meter by using the MS- office excel
tool for calculation of Cost Benefit Analysis using project evaluation method i.e. NPV, IRR, &
Payback Period .And concluded the best scheme for Maharashtra discom.
7.4 Significance of the project
The project assumes greater significance as it aims to reduce the AT & C Losses which
ultimately will result in saving of electricity as well as optimal utilization of best practices in
T&D infrastructure. This will help to bridge the gap between existing demand and supply as well
as reduction in subsidy burden on the government. It signifies the beneficiary of projects
implemented in Maharashtra areas by comparing their NPV, IRR & Payback Periods.
7.5 Conclusion & Findings
The Study Project on IT application management & Infrastructure Monitoring of MAHA Discom
for reduction the AT & C losses has helped us to arrive at a conclusion that all the schemes
proposed for the reduction of losses have proved to be financially feasible and have the essence
to be fruitful over a period of time. Out of the five schemes proposed the most Profitable
Schemes (as seen in the financial analysis) can be ranked as under 1) High Voltage Distribution
System 2) Prepaid Meters 3) RAPDRP: Part A 4) RAPDRP: Part B 5) Automated Meter
Reading.
Overhead insulated line or Aerial bunch conductor can also be feasible solution for some
high loss areas. Feeder management system gives the proper energy audit calculation.
Power factor correction can increase the revenue of discom drastically which can be
Improved by static VAR compensation or by capacitive bank.
Preventive action should be taken for reducing the EHV substation outages to increase
the revenue of transmission sector.
Smart Grid application, SCADA, ERP and Optical fiber network are the best ways for
reducing the AT&C losses. IT companies should be aware about the cost of IT disaster
and should understand its application management.
*Indirect Political Intervention, High AT & C Losses, Unrevised Policies, Law and Regulation,
Attitude of Employees, Lack of Transparency in Operation, Government subsidiaries,
Corruption, Un organized management, Poor financial health of discom, Lack of Technology,
Lack of IT application practices, Old Infrastructure, Unskilled employees, Unrevised Tariff are
the main problems in distribution sector.
7.6 Recommendations & Suggestions
Best Practices in Technical Loss reduction
Existing L.V. Distribution System is changed to HVDS by extending HT lines very close
to loads and installing small size transformers, “ LT Less” system is to be achieved
Augmentation of the transformation capacity at the existing 66 or 33/11 kV substations;
Rearranging/reconfiguring the 33/66 kV feeders by using higher size conductors and or
increasing the number of feeders;
Establishing new 33 or 66/11 kV substations nearer to the load centers and redistributing
the loads between existing and new substations;
Feeder strengthening, addition of new 11 kV feeders and Reconductoring of existing
feeders;
Addition of distribution transformers and LT lines; and Adoption of modern
technologies.
7.7 Short-term & Long-term Measures for Technical Loss Reduction
Network Reconfiguration & Reconductoring, Preventing Leakages at Insulators, Employing
AVB (Automatic Voltage Booster), Better Management of Distribution Transformers, Load
Balancing and Load Management, Capacitor Installation (Shunt or Series), Improving Joints
and Connections, Increase in HT: LT Ratio, Adoption of High Voltage Distribution System,
Regular Maintenance of Distribution Network, SCADA Implementation.
7.8 Best Practices in Commercial Loss Reduction
Stopping Theft by direct tapping, Use of Aerial Bunched Cables/ Partial Insulated LT Lines,
Public Relation and Awareness Campaigns by the Utility, Severe penalties may be imposed for
tampering with metering seals and reduction in defective metering
7.9 Measures for Non-technical loss reduction
Installation of new meter, Implementation of RF & IF meter technology, AMR & prepaid meter
technology improvement, Panchayats and Franchisees in billing and collection, Feeder
management system, Development of MIS.
From the above projects, following additional practices should be done by MSEDCL.To reduce
theft, micro-controller based automation system should be used, 33% revenue can be generated
by reactive compensation, Optical Fiber Network should be implemented for communication,
Differentiate the HR and A/C practices, no intervention of engineer or any person & define their
target particularly. Research & Development practices can be majorly helps to our distribution
utilities.
7.11 Issues & Challenges in front of the distribution utilities
One of the major concerned mentioned was delay in meter testing by Central Power Research
Institute (more than month), Cost Implication is the biggest issue for the adoption of smart grid
technologies. There is lot of uncertainty about the benefits of these technologies, lack of practical
experience and historical data. Therefore, investment in smart metering is still risky. Indian
market is not sufficiently equipped with the products or skilled personal.
CHAPTER-8
Socio-economic impact assessment at Sagar Island in respect of grid availability*
8.1 Objective
1. To analyze the present status of the solar and wind-diesel hybrid power plants and
suggest ways to sustain them in future after grid penetration in the island.
2. To study the impact of grid connectivity and local minigrid system on the lifestyle of the
people of Sagar Island through survey.
3. To do an impact assessment study on the business of local distributors/ shopkeepers due
to grid connectivity.
4. To determine whether the source of household electricity is dependent on level of
income.
8.2 Research Methodology
The researcher had administered the primary data analysis, i.e. primary data from the
respondents is collected through structured questionnaires for local people and local
shopkeepers/ distributors. Simple percentage analysis is carried out throughout the project for
drawing inferences. Various statistical tools like Pie-charts, Bar Charts, and Radar Charts has
also been used for drawing inference. Further analysis is carried out through Chi- Square (χ2)
testing to determine the impact of income on household electricity source at 5% level of
significance. The sample size is considered as 90 and time period allocated for conducting the
research is 2 months.
8.3 Findings and Conclusions
1. The first local minigrid system in Sagar Island was installed in 1972 by WBSEDCL with
a customer base of 4. During the course of time, the customer base increased up to 613
till October 2011. All the WBSEDCL consumers have metered connection and the
energy consumed is reflected on the meter. The billing was done on the basis of the rate
* Devjyoti Das, MBA (Power Management), CMES, UPES.
fixed for the rural consumers of West Bengal which is being covered by WBSEDCL. The
generators used to run for 4 hours in the evening (6PM to 10PM on average).
2. Line loss has been negligible as the power being generated locally, doesn’t need to be
transmitted to a long distance (read 34 Km of HT lines and 54 km of LT lines. AT&C
losses were around 7% whereas T&D losses were around 8%. Power theft never took
place before grid connectivity in the island. Revenue collection was around 2-2.5 lakhs
per month and during Ganga Sagar Mela, a Hindu festival celebrated in the month of
January, it increases up to 3.25 lakhs during that month.
3. WBREDA came into existence in 1993 and since then they have been working on
installing solar PV plants in the island. Since 1998, 9 Solar PV plants have been installed
in the island and each plant has been providing electricity to the local people in their
command area for 6 hours a day. Billing is done on the basis of number of
points/connections provided in the household.
4. From the current data analysis, we come to a conclusion that the local people have been
benefitted from both the local minigrid and grid connectivity. Emergency services have
greatly improved after the grid connectivity in the island due to 24 hours supply of
electricity. Impact on business has been positive according to the local
shopkeepers/distributors. On the contrary, sales figures of the solar appliances
distributors have dipped by 70%. People are willing to buy electrical appliances after grid
connectivity, but they prefer to buy it from either Kolkata or Kakdwip, the nearest town
in the mainland.
5. From Chi-square Testing, we found out that there is impact of income on the source of
household electricity connection.
8.4 Recommendations and Suggestions
1. For inaccessibility of the power plants in the island, one can suggest to build a large
power plant (500kWp capacity) so that they can be easily accessed. It is never prescribed
that small power plants of 25-30 kWp capacity to push their total generation to the grid as
for each such plants, substations has to be installed which will eventually increase the
cost of the project and generated power. Surveillance will be easier if all the power plants
are clustered in one place and the cost can be reduced by putting the same PV panels used
presently in the power plants.
2. For the power plants which are stopped due to completion of committed warranty period
of the battery bank, revival of the plants is definitely an option. WBREDA has a social
obligation towards the people of Sagar Island to provide power to them; hence it is their
duty to revive the plant.
3. Even if the grid reaches the areas where solar power plants are already in running
condition, the plant may be stopped in operation but that doesn’t mean the battery banks
and PV panels will be of no use. As suggested above about the construction of the new
high capacity plant, the panels can be shifted there from the present site locations. Hence,
initial investment can be reduced to a huge extent. Power can be directly pushed into the
grid. Battery cost can be saved in that case.
4. For the battery in use, they also have potential market to be utilized. Ghoramara Island,
neighbour of Sagar Island, has been identified as fast shrinking island. Hence, heavy
infrastructure cannot be provided for the grid connectivity, as per Govt. of India. Power
supply is in its initial stage as Home lightning systems are installed in houses. With
approximately 1100 families present, demand is not that high. Hence, a prototype model
of Sagar can be installed with the help of local mini grid system. For initial investment in
battery bank, the unused battery bank in the Sagar Island can be utilized for the same.
After completion of their warranty period, they can be replaced immediately if
WBREDA already start processing for the funds regarding the installation of new battery
bank.
5. Regarding RPO fulfillment, we know that grid connected renewable projects qualify for
this purpose. Hence, with the present situation of the RPO status in this state, this will act
as a major boost in fulfillment of RPO. As WBREDA will push their power in
WBSEDCL grid, their RPO will be met to some extent, if not completely as the
percentage of renewable energy generation in this state is very negligible as compared to
conventional generation.
6. WBREDA should encourage the local people to have a home lightning system as a back-
up power supply with inverter facility to have AC power. Battery to be charged with solar
panels. Hence, the business local distributors of HLS don’t suffer. Subsidies should be
provided to the customers who take up new HLS system. Also, it can be recommended
that those installing HLS-inverter system in their homes will be given subsidies in their
electricity bills. This system is already followed in few states.
Chapter-9
A project on comparison of standard of performance of distribution licensee in Gujarat- 3
years comparison*
9.1 Objective of the project
1. Study the functioning of Gujarat Electricity Regulatory Commission (GERC).
2. Study of overall power scenario of Gujarat.
3. Comparison of Standard of Performance (SoP) of distribution licensee on various factors.
4. Analyse the pre-reform and post-reform of Gujarat Electricity Board.
9.2 Research Methodology
1. Exploratory study based on the secondary data collected from the SoP reports published
by distribution licensee,
2. Analytical tools employed in comparison of distribution licensee.
9.3 Distribution Licensee in Gujarat: Dakshin Gujarat Vij Company Limited (DGVCL),
Paschim Gujarat Vij Company Limited (PGVCL), Madhya Gujarat Vij Company Limited
(MGVCL), Uttar Gujarat Vij Company Limited (UGVCL), Torrent Power Limited (TPL) at
Ahmedabad (A) and Surat (S).
*Pratik Sharma, MBA( Power Management), CMES, UPES.
9.4 Findings
Results obtained by comparing six distribution companies are given below in the table:
Factors Highest Lowest
2009-10 2010-11 2011-12 2009-10 2010-11 2011-12
Number of Accidents PGVCL PGVCL PGVCL TPL-S TPL-S TPL-S
Failure Rate of
Distribution
Transformer
DGVCL PGVCL PGVCL TPL-S TPL-S TPL-S
System losses UGVCL PGVCL PGVCL TPL-S TPL-S TPL-S
% of Meter replaced TPL-A TPL-A TPL-A MGVCL MGVCL MGVCL
ATC losses PGVCL PGVCL PGVCL TPL-S UGVCL TPL-S
SAIFI DGVCL MGVCL DGVCL TPL-S TPL-S TPL-S
SAIDI MGVCL MGVCL MGVCL UGVCL UGVCL TPL-S
MAIFI MGVCL MGVCL MGVCL TPL-S TPL-S TPL-S
9.5 Conclusions
1. Factor responsible for higher or lower Number of Accidents: PGVCL is a distribution
licensee in the State of Gujarat which covers the largest area. Hence, larger the
Distribution Network, more are the chances to prone to the Accidents. In case of
electrical system accidents, poor maintenance can be the reason for that. Where as in the
case of TPL, it has got network in the urban areas. TPL is used the under network. It has
got modern technology in their distribution system.
2. Factor responsible for higher Failure rate of Distribution Transformer: Distribution
transformers are very much exposed to changing weather conditions and more
dangerously to lightning.
3. Factor responsible for higher System Losses at Extra High Transmission (EHT)/11KV or
Below: At these levels the current level in the conductor is higher compare to the
transmission voltage levels. Hence, the copper losses or I2 * R losses are naturally higher
at these levels. In addition to that the theft at these levels is very high which is also
included in the system losses.
4. Factor responsible for higher Aggregate Technical and Commercial losses: The Technical
losses are due to ill maintained equipment and substations, ageing transformers,
overloading of the system elements like transformers, conductors etc. insufficient reactive
compensation and lack of renovation and modernization. The Commercial losses are
mainly due to theft, faulty meter readings, faulty bill distribution, software errors and low
metering efficiency.
SAIFI, SAIDI AND MAIFI: Approximately 75 percent of overhead faults have a
temporary cause such as lightning, animals, trees or debris in the line, or vehicles hitting
poles causing conductors to slap together.
9.6 Suggestion
1. Number of Accidents: Accident cases involving human lives, lack of awareness and
sufficient knowledge to work on the live system can be the case. Use of modern
technology in their distribution system.
2. Failure rate of Distribution Transformer: It has become the practice to connect additional
loads, i.e. overloading, on the basis of maximum demand recorded at some point of time
without reference to seasonal variations and assuming unrealistic diversity factors.
Unauthorized loads result in unforeseen overloading. Periodical checks are not made for
overloading and corrective measures are not taken. Various tests that may be done
include checking of oil levels and impurities, neutral current and load balancing in all
three phases, breather, and lightning and surge arrester, if any.
3. System Losses at Extra High Transmission (EHT)/11KV or Below: To reduce I2
* R
losses are very difficult at distribution level. Very few solutions are available for that and
one of them is to use better conductors with least resistance. But preventing theft at this
level can be very effective solution to prevent the system losses.
4. Aggregate Technical and Commercial losses: Preventive Measures for Technical Losses
includes (a). Preventing leakages at insulators, (b). Better load balancing and
management and (c) Adopting High Voltage Distribution System (HVDS). Preventive
Measure for Commercial Losses: (a). Use of electronic meters with temper and load
survey logging features for all category of consumers. (b). Testing of the metering system
as a whole to ensure accuracy. (c). Installation of CT/PT in sealed box to so that terminal
are not exposed for tempering or bypass.
5. SAIFI, SAIDI AND MAIFI: Outage-cause analysis should influence feeder design and
construction. If lightning is a major outage culprit, shield-wire construction or additional
lighting arresters should be installed, and feeder Basic Insulation Level (BIL) should be
evaluated. To mitigate bird-caused outages, clearances can be increased between
energized conductors by using longer cross-arms, covered jumpers, bird guards/covers
and perch prevention devices.
6. Benchmarking: Due to lack of data released by the licensees in the state and country it’s
difficult to implement statistical tools for Benchmarking of various licensees. Till date no
detailed study on Benchmarking has been carried out for Indian electric Utilities.
Recently, Prayas has done primary study for six private distribution utilities.
Benchmarking in distribution sector assumes higher importance as it has direct interface
with retail consumers and is the last and vital link in the whole value chain of service
delivery in power sector to ensure overall fiscal vibrancy in the sector.
Chapter-10
Production Planning in Catmoss Retail Private Limited*
10.1 Introduction
Established in the year 2004, “Catmoss Retail Limited”, is a highly commended name in the
global readymade garment and fashion apparel industry in kids segment. They are engaged in
manufacturing and exporting of all kinds of readymade garment for kids. After taking decisions
about the type of business, its location, layout etc. the entrepreneur steps into the shoe of
production manager and attempts to apply managerial principles to the production function in an
enterprise. Production is a process whereby raw material is converted into semi-finished products
and thereby adds to the value of utility of products, which can be measured as the difference
between the value of inputs and value of outputs.
Production function encompasses the activities of procurement, allocation and utilization of
resources. The main objective of production function is to produce the goods and services
demanded by the customers in the most efficient and economical way. Therefore efficient
management of the production function is of utmost importance in order to achieve this
objective.
And therefore our project concentrates mainly on the Production Planning Process of Catmoss
Retail Private Limited. We have performed different analysis to get a clear picture about the
planning.
10.2 Objective of the study
To notice the function of different departments like Cutting, Stitching, Printing,
Embroidery etc.
To see how the documents are prepared in production departments.
Visiting the operational floors and understanding the different operations in different
departments.
To check the critical check points while the garment is under production process.
How to maintain Quality, Level of Inventory, Reduction in production cycle time, faster
delivery, lower cost of production.
* Kopal Saxena, Bhumika Tandon, MBA(IBM), CMES, UPES.
To understand how the excess capacity and idle time is minimised and steady flow of
goods is maintained.
To get an insight of how to attain the maximum utilisation of resources.
To understand the concept of how to produce quality products.
To see how to achieve coordination between employees, machines and other supporting
departments.
How to maintain flexibility in operations and how to achieve goals at minimum cost.
10.3 Methodology
Our research methodology requires gathering secondary information from the specified
documents and compiling databases in order to analyze the material and arrive at a more
complete understanding the concept of Production Planning. And also the primary information
was gathered from the interaction and interviews with the company officials.
Main sources to gather data were Primary sources and Secondary Sources.
Primary Sources:
Interaction and Personal Interviews with the Company Mentor and Department Heads.
Interaction and Personal Interviews with the supervisors and the workers.
Secondary Sources:
Journals
Booklets provided by the company mentor
10.4 Findings
Firstly, there was absence of production planning department.
No Time and Action charts were prepared and everything was done on verbal basis.
Labour efficiency and productivity was up to the mark.
A lot of time was spent on material handling and huge WIP was piled up in lines.
There was no proper system of repair control and efficient technology (Eg. Fabric
checking machines).
The main causes of wastage identified are Motion, Delay (Waiting), Over processing,
Correction (defects).
There was communication gap (5-6%) in the warehouse department which, at times,
resulted in delays.
The rejected garments are not dumped, but donated to NGO’s.
Catmoss had taken license of an Italian brand- Mona Lisa for one season and recently it
has taken license of a German brand- Munich Polo.
10.5 Recommendations
A proper production planning and control department should be maintained.
Designate a special person/helper as a repair person and a special rack at each
examination point (in line and final examination).
Use of formats for tracking of defects in accessory and wasting department (For eg- After
and before wash report) for proper tracking of defects.
Time and Action charts should be prepared.
Operation Research techniques should be adopted where PERT (Programme Evaluation
and Review Technique) is considered more accurate for production and planning control
process.
New and improved technologies for fabric checking could be used.
Proper Training and development programme for the new as well as the old employees.
To minimize the communication gap for proper and timely meetings should be
conducted so that each employee is aware of the work he has to perform.
Roles and Responsibilities of each employee should be well defined.
T-Shape –chart (Fig 2) would help each department to understand its duties clearly and
the communication network.
10.6 Production scheduling process (figure 1)
1. Define machine families, Shift hours and manufacturing capacity.
2. Define manufacturing processes, process set up times and production throughput
rates.
3. Detail resources and processes involved for each job, materials required and work
instructions.
4. Forecast and schedule resource requirements and track vs capacity.
5. Re-schedule work and re-allocate resources to meet customer requirements.
6. Prioritise workload and process jobs.
7. Carry any jobs not run as scheduled to next shift and ensure all incomplete jobs
are on the schedule.
8. Automate clerical tasks and enable timely and relevant production scheduling.
T – Angle of the Apparel Supply Chain (Figure: 2)
Yarn
Production
Accessories
Production
Developing Of
Raw-Material
The Suppliers
The Buyer
The Manufacturer
Fabric
Production
Cutting &
Stitching
Dyeing & Washing Finishing/
Packaging and
Dispatch
Samples and
Orders
Retail Apparel Design
10.7 Conclusion
Catmoss is a well-established brand of kids apparels, so a proper planning and a control process
would help it emerge as a numero-uno brand among kids wear, and this can help it establish
itself in other countries too. Thus production planning is the key activity for the organization’s
efficiency, effectiveness, timely delivery, quality product and customer satisfaction. This is just
like the steering wheel of running vehicle, which drives you to destination.
Therefore by following an appropriate marketing strategy, hiring more competent and skilled
employees and following a proper planning schedule, Catmoss can cater to a wider domestic
market as well as international market.
Chapter-11
Manpower efficiency of a warehouse*
11.1 Objectives of the Project
1. To find the Manpower efficiency of the project
2. To make certain reforms in labour utilization.
3. To find the Truck around time of the warehouse.
11.2 Research methodology
1. Root Cause Analysis for issues in the warehouse Fredrick Winslow’s Time Study method
2. Henry Fayol Scientific Management principles
3. Elton Mayo’s Experiments
4. Various Tools such as:
Single Resource Productivity Method
Benchmarking
Regression Analysis
Manning factor Method
Truck Around Time
Inventory control techniques like ABC and FSN Analysis
11.3 Findings & Conclusion
Using the above Methodologies, a series of data was collected for the 45 days of the project
and results were reported.
Using F W Taylor method, time study of the trucks is studied for a period of 45 days and
found that the company is under-performing
The loading capability is 102 and the company is holding only 60 per day.
The unloading capacity is 66 and the company is doing only a no. of 25.
The performance of the labour, working at night, was superior to the labour working in
* Bh. Phanindra Kumar,MBA(LSCM),CMES,UPES.
the day time thereby signifying the Elton Mayo’s experiments where the study is made in
concern to the change in working conditions of the labour in the warehouse.
The use of Henry Fayol’s scientific management principles like change in organizational
structure, review to labors’ working conditions, wage packets, and welfare are observed.
The ABC, FSN analysis was conducted based on the value/ consumption of goods and
movement of goods respectively. Root Cause Analysis is done to identify various issues.
There is no control over the manpower in the warehouse as the warehouse has around 90% of
outsourced/ contractual manpower. This made a huge mis-alignment in understanding the
vision/ mission of the company and hence couldn’t perform well at the required levels.
The company previously had never performed an analysis on its manpower performance and
hence this forms a unique and urgent call for a review of the manpower efficiency.
11.3.1 Operational ability of warehouse
Ideal Operation Data per Shift
Total no. of Docks 10 operational one EMER.
Total Trucks that can be handled at a point of time 21
Total Supervisor required to operate ideally 21
Total labor Required for ideal operation 84
Avg. Labor attending status( 45 days data) 32
Minimum requirement of labor( for 10 Vehicles) 40
Minimum requirement of Supervisor(For no. of docks) 11
This data analysis provides the underperformance of the warehouse manpower due to non
availability of the labour which is a huge loss to the warehouse.
The warehouse daily has around 25-30 vehicles in pending at the end of the shifts. Hence,
this is a huge loss of detention to the company.
By employing a few more labor as explained below, the company can fulfill the requirement
and can save around Rs. 6,00,000 – Rs. 10,50,000.
By Regression Analysis, the relation between the service delivery and the labor required is
found to be Service Delivery (y) = 14.72 + 0.76 (Total Labor) i.e. an increase of labor by
10 would increase the service delivery by 21. Hence, the detention on the pending vehicles
can be enormously decreased and the company can save the detention charges of Rs. 500 per
day.
The Orders per hour is found to be Total orders picked / total labor hours = 1.69 orders/hr.
The Single Resource Productivity resulted to find the efficiency by using any single
resource to generate unit output is :
Total vehicles handled / man-hours = 2.767 vehicles/ man-hours.
By calculating the Manning factor method, the actual number of personnel required to
perform a job can be calculated and this is found to be
Total operating hours per year / Effective working hours per year . people ( 2 .
Manpower Utilization is found by total productive hours / total work hours = 0.85
The Truck Around Time is found to be 73 min whereas the benchmarked value is 45 min.
The vehicle per supervisor is found to be 3 whereas the benchmarked value is 6 per day.
The labor per supervisor is found to be 2.5 whereas the benchmarked value is 4-5.
The labor attendance is found to be 32 and on many days below 30, whereas the value is to
be atleast 40 for fulfilling the minimum requirement.
The warehouse utilization is ideal and found to be around 60% of the warehouse space.
11.4 Suggestions / Recommendations
First of all, to standardize the size of section and labor – this gives a huge advantage to the
performance of the warehouse.
Have a control of manpower even after outsourcing so as to make the warehouse functional.
The best manpower planning software available in market should be employed so as to
reduce the hustles in allocation of labor to various vehicles and supervisors.
Have a control on creeping factor of labor/ supervisor due to non-availability of work – the
supervisors are often found sitting idle due to non-availability of labor for carrying out the
operations which is a huge loss to the company as detention charges increases due to pending
of the vehicles.
Adoption of new techniques like direct loading so as to reduce the TAT for small lot sizes.
A little of mechanization – the warehouse supervisors’ and labors’ are reluctant in taking the
PCP (Personal Care) products due to obvious reasons like weight and huge quantity. Hence,
opting for a single platform truck is beneficial to the operations and also the same labor can
be utilized for other docks. This idea is highly beneficial and saves time and increases
operational and labor efficiency. (Each pallet 120 CFC of 10.5 kg each = 1260 kg) very
difficult for a labor to handle manually. Hence, mechanization in a small scale.
Ideal warehouse space utilization is to be considered because most of time the repacking
material are stored in BRND location and also the goods are not dedicated to storage. This
results in wastage of time for picking.
The adoption of necessary techniques so as to improve the labor size and thereby reducing
the loss of Rs. 6,00,000 – Rs. 10,50,000 in the way of detention.
By adopting at least two of the above recommendations the company which is in the 8th
place
of throughput can move ahead and become a major hub of transfers.
The number of transporters base must be increased as due to non-availability indenting on
some days is delayed.
The least offered solution/ suggestion is for complete mechanization of the warehouse, which
of course is very advantageous but has lots of investment to be kept in, hence, the future
hybrid warehouses are to be looked for in this concern.
Chapter-12
Business strategy planning for a multicultural oil & gas joint venture asset:
A case of India-China JV in Colombia* (Project undertaken at Mansarovar Energy Colombia Ltd, Colombia, South America)
Abstract
As business has gone global over the past few decades, its role in spreading values has gained
importance. Through commerce, trade and investment, and the exchange of ideas and
knowledge, business has become a major actor across cultures and people. Firms enter into joint
venture (JV) agreements in order to create new products and services, enter new and foreign
markets, or potentially both. Joint ventures aid firms in accessing new markets, knowledge,
capabilities, and other resources. Yet they can be challenging to manage, largely because they
are owned by two or more parent companies. These companies may have competing or
incongruent goals, differences in management style, and in the case of international business,
additional complexities associated with differing government policies and business practices.
Mansarovar Energy Colombia Ltd., a JV formed by India's ONGC and China’s Sinopec, is
engaged in the heavy oil exploration, development and production of oil and natural gas in
Colombia. The firm owns interests in 11 fields across Colombia's Middle Magdalena basin,
through association contracts with Colombia's state oil company Ecopetrol.This project details
the business strategies adopted by such parent companies engaged in E&P in a foreign land in
association with the local governments’ participation.
12.1 Objective of the project
Understand a multicultural oil & gas JV business (between two or more countries); its corporate
governance, strategic framework, business modeling, challenges and regulations, anatomy and
performance.
Study and research on the business strategies adopted by Mansarovar Energy Colombia Ltd.
(MECL , a JV between India’s ONGC and China’s SINOPEC based in Colombia, South
America. *(This process was carried out both in office and field)
* Vijai Kumar Baskaran & Kamal Chandra Dani,Int. (BTech +MBA),CMES,UPES.
12.2 Research study
This research on joint venture (JV) performance identifies prominent academic discussions and
implications drawn from our observations on successful JV management, taking into account the
decisions JV partners must make throughout the partnering process, from initial motivations
through partner selection and negotiation of terms to implementation and ongoing management.
12.3 Research methodology
12.4 Designing and strategy of the research work
Our research work was designed to determine and investigate the elements which define the
success for a multicultural JV. These elements, hence found are presented using a graphic below.
12.5 Findings & Analysis
Customer
Segments
Key
Partnerships
Key Resources
Cost Structure
Key
Activities
Value
Propositions
Customer
Relationships
Channels
RevenueStreams
Main trends
Market forces
MacroEconomic
forces
Industry forces
Suppliers and other value
chain actors
Stakeholders
Competition
New entrants
Product and servicies
sustitutes
Technological
Regulatory Cultural
Socio- Economic
Market segments
Needs and demand
Market issues
Switching costs
Market atractiviness
Economic infrastructure
Raw materials and other resourcesCapital markets
Global market conditions
Graphic 2
12.6 Statistical analysis of data
12.7 Conclusions
Key implications of our managerial research in Colombia include the necessity of honesty, trust,
and commitment for the success of the JV, settling disputes by focusing on what is best for the
JV rather than individual partner objectives, and division of managerial responsibilities
according to the functional expertise of each partner.
12.8 Suggestions and recommendations
Though India and China are slowly moving towards greater collaboration, some of the
challenges that the Indian companies face while interacting with Chinese businesses are
on account of language and culture. Attempts must be made to bridge this gap.
Culture and history have an overwhelming impact the traditions followed in the business
operating country (Colombia in this case) and also the beliefs of an individual, which in
turn have a direct bearing on the approach towards a business transaction.
The research process
Deliberate sampling was done during this
research in Colombia. (Sampling design)
The collection of data to project our
findings during this research through the
Radar diagram (graphic 3) was done by
means of observations, personal interviews
with employees and questionnaires.
Graphic 3
