project report on dhanhar exim by sunny gandhi and sunil ambolikar

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project report on dhanhar exim by sunny gandhi and sunil ambolikar

  1. 1. 1 A Report On Summer Training at “Dhanhar Exim Pvt Ltd” From: 29th April, 2009 to 15th June,2009 In The Partial Fulfillment Of BBA Program. Submitted By: 36-Sani Gandhi 7- Sunil Ambolikar S.Y. BBA DIV – I Submitted To : BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT Academic Year-2012-13 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  2. 2. 2 Declaration We hereby declare that the project report Entitled A Study on “Dhanhar Exim Pvt Ltd.” is result of our own training work carried out during AprilJune 2013 and has not been previously submitted to any other university or institution for any other examination and for any other purpose by any other person. We will not use this project report in future to use a submission to any other university or institution or any publisher without written permission of our guide. We also promise not to allow any other person to Copy or publish any part of this report in any form. If We are found/caught as defaulter of above declaration, I Know that my present or future submission may become in valid and college has the right to this thesis. Name of Student Sani B Gandhi Sunil R Ambolikar Date Place BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  3. 3. 3 ACKNOWLEDGEMENT We would like to thanks to Veer Narmad South Gujarat University to include this summer training in the curricular of B.B.A. program that made us gain the practical knowledge in the corporate business world. We are honored to Mr.Jayesh Desai, the director of B.R.C.M. college of Business administration and our all faculty members who always offered us useful suggestions on the project. On the completion of our project, we would like to express my sincere thanks to all those who have guided, advised & supported us during my project work at Dhanhar Exim Pvt ltd. We take this opportunity to depict our sincere and hearty indebtedness to the management of Dhanhar Exim Pvt Ltd. for giving us an opportunity to serve in esteem organization. We thankful to Mr. Hitesh Vankawala & Mr. Sandip Vankawala(Head of Marketing Department and Finance department), Mr. Jignesh Vankawala and Mr. Nilesh Vankawala (Head of production and quality control department), Mr. Dhansukh Vankawala & mr. Jagdish Vankawala(Head of HR Department) for giving us the precious opportunity to work at Dhanhar Exim Pvt ltd. And for our project guide. They gave us the detailed information about their system and spend their valuable time for us. At last, we thank all our friends and members of Dhanhar Exim Pvt Ltd for their co-operation and passion and encouraged us to carry out the project and try our best. Your Sincerely Sani B. Gandhi Sunil R. Ambolikar Date Place BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  4. 4. 4 No. Chapter Page No. 1 Introduction 08 2 Marketing & Sales functions 15 3 Production Management 49 4 Finance & Accounts 78 5 Human Resource Management 101 6 Experience and Conclusions 140 7 Bibliography 141 8 Annexure 142 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  5. 5. 5 CHAPTER 1: INTRODUCTION 1) Industry Details 2) Company Details 3) History of organization 4) Location of offices, branches and factories 5) Detail of promoters & owners 6) Performance highlight of Dhanhar Exim Pvt ltd 7) Organization structure of the company 8) Future plans of organization CHAPTER 2: MARKETING & SALES FUNCTION 1) Detailed organization structure of marketing department 2) Types and classification of products & their sales volume 3) Details of competitors 4) Unique feature of various products of company 5) Customer segmentation & targets markets 6) Distribution net-work 7) Sales procedure 8) Study of how customer orders are processed 9) Documents related with sales 10) Comparison of 4Ps of various products of organization With competitors 11) Study of generic level competition 12) Pricing polices 13) Promotional and advertising polices 14) Taxes applicable on sale activity 15) Study of control system & reporting system designed for Sales employees working in field 16) Different reports generated in Marketing Management BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  6. 6. 6 CHAPTER 3: PRODUCTION MANAGEMENT 1) Detailed organization structure of production department 2) How production plan is prepared from sales plan 3) How production plan is converted in material requirement Plan & ultimately in purchase plan 4) Analysis of plant location considering various factors 5) Plant lay-out of entire factory showing positions of various departments buildings 6) Internal plant lay-out of main production departments 7) Types & classes of material handling equipments 8) Inventory control system 9) Inventory valuation method 10) study of material codification system 11) Different records kept in store 12) Material receipt procedure 13) Material issue procedure 14) Documents related with material issue & receipt 15) Purchase procedure 16) Documents of purchasing 17) Maintenance planning system 18) Records related to production operations at different Machines & with different department 19) Quality control system 20) Quality control guidelines of raw materials & finished Products 21) In process quality control guidelines 22) Documents related to quality control 23) Different reports generated in production department BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  7. 7. 7 CHAPTER 4: FINANCIAL MANAGEMENT & ACCOUNTS 1. Revenue budgeting 2. Capital budgeting 3. Costing method 4. Cost structure 5. Costing sheets & classification of costs in different Categories 6. Working capital management 7. Preparation & analysis of funds flow statement 8. Internal audit polices financial control system 9. Accounting polices 10. Methods to calculate depreciation 11. P&L account & balance sheet by ratio analysis, Common sized statement CHAPTER 5: HUMAN RESOURCE MANAGEMENT 1) Study of organization structure to decide what type of Organization structure is designed for company 2) Study of basis departmentation in each department 3) Human Resource planning process 4) Recruitment 5) Selection process 6) Documents related to recruitment & selection 7) Sources of recruitment 8) Job description & job specification for various positions 9) Performance appraisal process and documents 10) Promotion, demotion & increment policy 11) Different welfare activities 12) Employment records kept 13) Training & development 14) Induction training 15) How training needs are identified for existing employees? 16) Lab our relation & activities of trade union 17) Wage & salary administration &Incentive & motivation system BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  8. 8. 8 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  9. 9. 9 Industry details History of Masala industry  From time immemorial, India has been considered as the “spice bowl of the world”. The history of Indian spices is almost as old as the “human civilization of spices”  We all have read in school history books that voyagers from around the world have travelled to India in search for the spices. But the history of our spices more than what is recorded, more than 7000 years old. Even before Greece and Rome were discovered, the sea voyagers were sailing with Indian spices, perfumes and textiles to their homelands.  Ancient cultures and dynasties were spending major portion of their treasury on Indian spices, silks, brocades, Dhaka Muslin and cloth of gold, etc. It is believed that the Parthian wars were being fought by Rome largely to keep open the trade route to India.  Vasco Da Gama set sail southwards with four ships from Port of Lisbon in Portugal at the start of 14th century. His aim was to search for a new route to India and rest of Asia. The journey that lasted 2 long years, took Da Gama and his crew on 39000 kilometers round trip, around the continent of Africa to India and then back to Lisbon. Only 2 out of the 4 ships made it back home, but they brought a cargo of spices and other products worth 60 times the cost of the said voyage.  It is also said that Indian spices and her renowned products were the main temptations for crusades and expeditions to the East. The cost of the spices today is menial, but this was not always the story. Indian spices were once a royal luxury and that men were willing to risk their lives in quest of them. Though it were the Dark Ages, but there were rich people who had gold to exchange for pepper and cinnamon.  The spices of the East were valuable in those times, during these Middle Ages, a pound of ginger was worth a sheep, a pound of mace worth three sheep or half a cow. Pepper, the most valuable spice of all, was counted out in individual peppercorns, and a sack of pepper was said to be worth a man`s life.  By the year 1000 A.D. Arabians had conquered the Indus valley, what is now India. They brought the cumin and coriander that mixed with Indian pepper, ginger and turmeric make up the base of so many South Asian dishes. In India, Arabian traders got the rare and exotic spices of the Far East from local spice merchants. India had spent the previous BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  10. 10. 10 two millennia spreading its culture to the Spice Islands of the east. Such was the importance of spices those days.  Broadly, there are two main subdivisions of spices one being the major spices and the other is minor spices. For example the spices like pepper, cardamom, ginger, turmeric, chilies etc., comes under major category. The important minor spices grown in India are ajwain, aniseed, caraway, celery, coriander, cumin, dill seed, fennel, fenugreek, garlic, onion, saffron, vanilla etc. Company details  DHANHAR MASALA BHANDAR Pvt. Ltd. introduces itself as a leading manufacturer and exporter of Indian particularly Masala‟s, Hing‟s and others. Established on 1966, the company has always followed the philosophy of providing quality products and services to our ever increasing clientele. Today DHANHAR has become a name synonymous to Indian spices, its tastes and aroma; and has become a name of repute in spices and hing industry.  The name “DHANAHAR” itself connotes “MASALA”  DHANHAR MASALA starting in the home place and its first product is “hing”. Meaning of the Dhanhar name: DHAN means “LAXMI” HAR means “MAHADEV”  DHANHAR name comes of the two dynamic people, first is DHANSUKHLAL and second is HARKISHANLAL.  DHAN comes of the DHANSUKHLAL &  HAR comes of the HARKISHNLAL History of the organization – an Overview  Thirty Eight year back, two dynamic entrepreneurs, Mr. Dhansukh Chhabildas Vankawala and Mr. Jagdishchandra Harkishandas Vankawala; pioneers in spices / hing industry and connoisseurs of Indian tastes, joined hands together to start Dhanhar Masala; supported by Mr. Bipinchand Chhabildas Vankawala; a mechanical engineer by BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  11. 11. 11 profession. The firm started as a gruh udyog, manufacturing hing, graduated in terms of size and volume; obviously due to healthy response from the market. In the 1972, a manufacturing plant was established in Surat. The company started manufacturing spices in 1976 with a single product “Dal Shak Masala” and has consistently climbed up the growth ladder since. The company at present is manufacturing more than 30 different spices. For bulk orders, we can customize the products according to your requirements.  In 1990, a major milestone was achieved when the company got “AGMARK” certification for its Hing. In 1995, same certification was accorded to Spices. When Company started, it goes in the loss, but after some time loss converted in the big and big profit. In the 1977 the price of the “Dal Shak” masala was just 7 RS. In 5 Kilo. So, it‟s very chipper. In the 1988 Hing‟s packaging stared and published name of the “BHANDHANI HING” and also developed the brand name of Dhanhar Masala. All the production by manually, no machine work of this time. On this time means, 1988; the staff was just 10 people in Dhanhar Masala and now the staff is about 62 people in Dhanhar Masala. Manually work‟s time period is 1988 to 1996, means about 8 year. Location of its office, branch and factories Location of manufacturing unit 167,Ashwinikumar road, Nr, shamshan bhumi ,Fulpada, Surat, Gujarat, India Location of its administrative office 5/354 Dhanhar house, Bhajiwadi pole, Bhagal char rasta, Bhagal, Surat – 395003 Gujarat, India. Details of promoters and owners:  Under the able guidance of the promoters, the company has reached to a position, par excellence. Mr. Hitesh Vankawala (B.Com. L.L.B.) And Mr. Jignesh Vankawala (B.Com), able sons of Mr. Dhansukhbhai joined business in 1992 and 1998 respectively. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  12. 12. 12 Also the able sons of Mr. Jagdishchandra, Mr. Sandip Vankawala (B.Com.) joined the company in 1992 and 1998 respectively. Mr. Hitesh and Mr. Sandip are looking after Sales Department whereas Mr. Jignesh and Mr. Nilesh are looking after Production and Quality Control Departments.  The new entrants are following their fathers‟ footsteps and have the enough dynamism and acumen to lead the company to new heights.  The company boasts of modern machinery and high technology to attain the quality without losing the traditional aroma of Indian spices. Our products are well known for their high purity.  The reliability, flexibility, competitive pricing and prompt service have been the pillars of the company‟s reputation and success. Performance highlight of Dhanhar Exim Pvt ltd:  Company has more success in Masala industries and has won many awards in this field.  The awards are listed as following Name of the award Year of winning 1. UDHYOG 2000 2. VYAPAR 2002 3. UDHYOG 2003 4. MERA BRAND 2004 5. GRAHAK SURAKSHA SAMITI CERTIFICATE  The company has created the image of a good supplier of Masala in south Gujarat market.  Dhanhar Masala is also known for its “chip rate and best quality. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  13. 13. 13 Organizational structure of Dhanhar Dhanhar Exim Pvt Ltd. General manager Head of marketing department Head of production department Head of finance department Head of human resourcces department Mr. Jignesh Mr. Hitesh Mr. Hitesh Mr.Sandip production manager Agent Accountant assistant Assistant clerk cashier peon workers Peon clerk BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  14. 14. 14 Organizational profile of Dhanhar Exim Pvt ltd Year of establishment 1964 Legal status of the firm Private Ltd. Registered under Indian companies act 1956 Income tax registration no. AADCD2614D Central sales tax no. 24720601590C Value added tax registration no. 24220601590V Import Export code 5210003132 Nature of Business Manufacturer, exporter, and wholesaler Major markets Indian subcontinent Turnover of finished goods 4 times/ year Future plans of the Dhanhar Exim Pvt ltd.  To establish a strong market place in the whole Gujarat market. To make reputation in market.  They are thinking to expand product line of flour which is including water chestnut flour and now thinking to make a flour for locha and khaman flour.  They are planning for installing new machines for packaging which will help them in cheaper packaging and faster.  They are about to make more Masala for example bikaneri papad Masala, chicken gravy Masala, Mamada Masala(non vegetarian category) BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  15. 15. 15 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  16. 16. 16 1. Organization Structure of marketing department Marketing Department Mr. Hitesh (Head 1) Mr. Sandeep (Head 2) Agent clerk peon o Here at Dhanhar marketing department is being managed by two heads Mr. Hitesh and Mr. sandeep respectively o Agent and sales person works under two heads o Clerk is at 3rd level in the hierarchy o Peon is working under the head of a clerk. 2. Types and classification of Products of Dhanhar o There are many Masala product of DHANHAR MASALA industry. o Here at Dhanhar they have mainly Three product line Which are below here: 1. Spices 2. Flour 3. Chick peaces o All the product categories are shown in the following table. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  17. 17. 17 Products A. Spices Basic spices Value added spices 1. Asafetida Powder 2. Punjabi Gravy Masala 3. Kashmiri Chilli Powder 4. Pomegranate Powder 5. Black Pepper Powder 6. Rajwadi Garam Masala 7. White Pepper Powder 8. Biryani Pulav Masala 9. Coriander Powder 10. Sandwich Masala 11. Chili Powder 12. Tandoori Chicken Masala 13. Chiwada Masala 14. Tea Masala 15. Dry Ginger Powder 16. Chicken Masala 17. Dry Mango Powder 18. Undhiyu Masala 19. Red Chili Powder 20. Vada Pav Masala 21. Turmeric Powder 22. Pickle Masala 23. Ginger Powder 24. Patra Masala 25. Jeera Powder 26. Kesar Milk Masala 27. Hing Powder 28. Jaljira Powder 29. Kashmiri Chilli Masala 30. Kasuri Methi 31. Kitchen King Masala Value added spices 32. Chhole Chana Masala 33. Meat Masala 34. Dabeli Masala 35. Mutton Masala 36. Garam Masala Powder 37. Nimbu Soda Masala 38. Egg Curry Masala 39. Panipuri Masala 40. Fish Masala 41. Pav Bhaji Masala 42. Butter Milk Masala 43. Fruit Chaat Masala B. Water Chestnut flour C. Chick peas D. Mahendi Powders  Here company do not have sales volume for individual products BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  18. 18. 18 3. Details of Major competitors of Dhanhar Exim Pvt ltd: 1. Ramdev Masala  India, the Queen of Spices, has always attracted the world with her exotic masalas. In fact, the connection goes back many centuries. Ramdev has preserved the Indian values in all its products ever since it started as a small unit in 1965, in Ahmadabad, India. A small step became a giant leap in no time. But there was a binding force, a commitment that helped Ramdev keep its promise of purity and freshness in its products for all these years. Ramdev‟s immense belief in the philosophy of „reaching a customer‟s heart through quality‟ has enabled it to spread the rich Indian heritage to millions of homes all over the globe. 2. M.D.H Masala  Mahashian Di Hatti Limited is an Indian manufacturer, distributor and exporter of ground spices and spice mixtures under the brand name MDH. It specializes in several unique traditional blends of spices suitable for different recipes. The company was founded in BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  19. 19. 19 1919 by Mahashay Chuni Lal as a small shop in Sialkot. It has since grown in popularity all over India, and exports its products to several countries. It is associated with Mahashay Chuni Lal Charitable Trust. The MDH brand name is very well known throughout India 3. Everest Masala  Everest Spices is an Indian manufacturer, distributor and exporter of ground spices and spice mixtures under the brand name Everest. It is India‟s largest spices brand based in Mumbai. More than 20 million households use Everest spices regularly. The brand is stocked by 400,000 outlets in more than 1000 towns across India. Everest is a major exporter to the US, the Middle East, Singapore, Australia, New Zealand, East Africa and other countries. More than 3.705 billion packs of Everest sold each year. There more than 42 blends under the Everest brand name. 4. Catch Masala  Catch Spices is India‟s foremost spices brand known for its matchless product quality and innovative approach. Catch spices are ground using the unique state-of-the-art Low Temperature Grinding (LTG) technology, which prevents the evaporation of volatile & BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  20. 20. 20 delicate oils from spices. Catch Spices thus retain the original aroma and wholesome flavor of authentic spices. The complete assortment comprises of a variety of salt and pepper sprinklers and a diverse range of whole, ground and blended spices. Catch Spices are packed in food grade metal-lined cartons, flexible laminates and convenient composite cans available in a variety of pack sizes 5. S.k. Masala  Founder Mrs. Kulusumben K. Panjwani has started the business 45 years ago in Surat city, Gujarat. Her elder son Mr. S. K. Panjwani having very good tasting skills has shouldered her responsibility on product development & came up with best blends. Few famous spices from the house of S.K. Masala are " Kashmiri Chilli powder “, " Garam Masala " , " Chicken Masala " , " Milk Masala " & " Pav Bhaji Masala ".Younger son Mr. B. K. Panjwani who is a Chairman of Retail Trade in Chamber of Commerce in South Gujarat from last 7 years & Member of Productivity Council of India got into retailing & expanded the business across Gujarat & Saurastra .Third generation is also emerging as back born of S. K. Masala. They have started atomization process at plant & expanded the business internationally in markets like UK & SA. 6. Nilon’s Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  21. 21. 21  Nilon‟s Enterprises Private Limited was founded way back in 1962 by Shri Suresh B. Sanghavi as a cottage industry. From a humble beginning, Nilon‟s has today become the largest producer of Pickles, Tooty-Fruity and Roasted Vermicelli in India. Managed by a professional and dynamic team, Nilon‟s is now among the fastest growing processed food company in India. 7. Badshah Masala  In the span of 4 decades, Jhaveri Industries has garnered international acceptance and its own brand equity in the world spice arena. Under its brand name Badshah, Jhaveri Industries has been formulating new flavours and aromas through its innovative research techniques.  Today, Badshah is synonymous with aromatic fervor and genuine quality. Winner of many prestigious awards, including the "Mera Brand Award", Badshah is the first choice of households across the Indian subcontinent and is fast emerging as a global player. With a third of our sales accounting in exports, Badshah has carved a niche of its own in the international spice market.  The manufacturing unit located at Umergaon, Gujarat has been mandibly supported by our administration office in Mumbai. Our unique research methodology helps us understand the latest food and spice preferences, keeping in mind the geographical location, religion and traditional cuisines of any particular region. 8. Gajanand Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  22. 22. 22  Gajanand Foods Pvt. Ltd., Ahmedabad, was founded and established by Shree Natvarbhai K. Patel, in the year 1982, with a small unit. At present our company has grown almost five times than we started with, that is only due to our quality, proper customer care and our efforts to reach the smallest customer in our city Ahmedabad, our State Gujarat, our Country India and now in across the globe! Our aim to reach millions of kitchen can be achieved through customer's love, trust and proper feedback for our products.  Taking forward the vision of their father, Mr. Jayesh Patel and Mr. Samir Patel have implemented new ideas and expanded the product range by introducing more and more innovative products. With the uncompromised motto of customer satisfaction, the company has defined its business ethics and has crafted its quality policies. This has eventually made the company a front-runner and a reliable source of quality in the national as well as global market. 9. Other : Gondal Masala, Vijay Masala, Suhana spices and other local Masala makers. 4. Unique feature of various products 1. Water Chestnut Flour  Dhanhar is the one of the most celebrated Water Chestnut Flour (Singoda Atta & Rajgara Atta) Manufacturers and Suppliers from Gujarat. Their Water Chestnut Flour is widely used to prepare different Indian dishes. The hygienic processing and tamper-proof packing of their Water Chestnut Flour has made it ultimate hit among our clients. The wide demand of their Water Chestnut Flour testifies our claims of being the prime Water Chestnut Flour manufacturers and suppliers from Surat, Gujarat. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  23. 23. 23 Special feature  Made from natural ingredients  Made as per traditional standards which offer premium taste  Offers prefect flavor  Amazing aroma  Freshness assurance 2. Mahendi Powder o Mehendi Powder, manufactured by Dhanhar, is of the best quality that is used for hand decoration, for hair coloring and in various ceremonies. their Mehendi Powder is of the finest quality and has also gained appreciation in other countries. We manufacture pure Mehendi Powder without chemical and it is instantly used for hair coloring and conditioning. Uses  For body & hand decoration  For hair color &conditioning  For hand & body design use Special Features  100% pure form contains no herbs or chemical  Can be used for hair conditioning & hair color  Perfect choice for marriage and other festive occasion  Colour will last for several days 3. Chickpeas o The company is chiefly engaged in the manufacturing and supplying of Chickpeas all across the country. The Chickpeas, provided by them, are known for their excellent taste and high quality. Cleaned and processed by using the latest techniques, Dhanhar Chickpeas are highly demanded amidst the widespread clients. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  24. 24. 24 Special features  Perfect flavor  Amazing aroma  Freshness assurance  Properly cleaned 4. All other spices o The company is a prime Spices Manufacturer and Supplier in India and Spices are provided in a wide variety, which is processed by using the premium ingredients. The assortment of Spices comprises of Asafetida Powder, Biryani Pulav Masala, Butter Milk Masala, Chhole Chana Masala, Chicken Masala, Chili Powder, Chiwada Masala, Coriander Powder, Dabeli Masala, Dry Ginger Powder, Dry Mango Powder, Egg Curry Masala and other 31 spices. Special features  available in many packaging like 50gm, 100gm, 200gm,500gm, 1 kg, Bulk Packing starting from 5 rupees.  Freshness is being assurance and properly cleaned.  Made from natural ingredients  Tamper proof packing  Hygienic processing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  25. 25. 25 All other spices are being presented in the following with their special features Asafetida Biryani pulav Masala Special features Special features  Good taste  Unmatched Taste  Hygienic processing  100% natural ingredients  Tamperproof packaging  Hygienic processing  Pure natural ingredients  Tamper proof packagings  Good scent Butter milk Masala Praised For  Give health benefits  Appetizing taste  Made from safe and natural products  Tamper proof packing Chiwda Masala Benefits Fish Masala Acknowledged For Praised For :    Add flavor to food  Helps in digestion  Natural relief from gas  Stomach upset problem  Lower the cholesterol  Different sizes level  Tamper proof packing standards which offer  Hygienic processing premium taste Widely used in preparation of chivda Chili powder ingredients  Made as per traditional  Coriander powder Special features  Made from natural Made from handpicked Praised For Offers prefect flavor  Amazing aroma  Freshness assurance Fruit chaat Masala excellent quality chilies  Hygienically processed  Perfectly grinded  Matchless freshness  Made from natural Special feature ingredients Made as per traditional  Mouth watering taste standards which offer   Made from natural  Special feature ingredients premium taste Dry mango powder Offers prefect flavor   Amazing aroma Tamperproof packing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  26. 26. 26  Freshness assurance  Completely fresh o slightly sour and tangy taste being used as an Garam Masala acid flavoring agent not loosing color and flavor for longtime bring used Ginger Masala Acknowledged For : Known For o for cooking and medical purposes Made as per the traditional art of spices  o o rich source of vitamin a,e and selenium protect Long shelf life o Safe and nutritious o Completely natural sponge puddings to give a ingredients warm sweet flavor against heart disease and other ailments high in iron high in cooking   Kashmiri chilly Masala carbohydrates helpful in Features decreasing acidity and   Have an Aromatic odor  Used in tandoori and other barbecue marinades Adds flavor to food  Long shelf life  Known For Essential ingredient in  Good soothing agent  Used in pickles Benefits  Ginger may also decrease joint pain from arthritis  Prevent against diarrhea  Prevent against nausea Folk remedy for cough and cold  Lower cholesterol Used in preparing ayurvedic medicines  Rich source of vitamin E Kesari milk Masala Rich source of vitamin A  Considered as stimulant your tea Prevent from rheumatic disorders  Medicinal Uses Add ginger powder to  Benefits  all mixed spices  Free from additive Taste enhancer Prepare a delightful with seasonal fruits Natural and fresh  Jeera powder   poor digestion. Add to cake, biscuits and ginger punch blending it antioxidant low in  Use the ginger powder in Special feature BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  27. 27. 27  As Carminative  Stomach astringent  Hing Masala Useful in diarrhea and  Mainly used in  Hygienic processing  Tamper proof packaging ingredients in its 100% natural ingredients  natural products used as Unmatched Taste veterinary medicines preparation tamper proof packing  Meat Masala for skin. Kitchen king Masala made from natural ingredients made as per Nimbu soda Masala traditional standards Acknowledged For : premium taste offers prefect flavor amazing aroma freshness assurance  Unmatched taste  Praised For : completely fresh perfectly grinded Made from natural and rare herbs Made from natural Pomegranate Powder ingredients Made as per traditional standards which offer premium taste  Offers prefect flavor  Amazing aroma  Freshness assurance mesmerizing taste made from 100% natural spices health problems    Eases stomach related Mutton Masala  Special features Many medicinal qualities   Act as a coolant helps in improving appetite good Specialties  giving health benefits appetizing taste safe and Special feature dyspepsia problems   Benefits Pani puri Masala Appreciated For :  Mouth watering taste  Made from natural ingredients  High in vitamin C  High in potassium  Tamperproof packing  Good source of the B  Completely fresh vitamin  Contains pantothenic BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  28. 28. 28 acid,potassium and Appreciated For :   Unmatched freshness  Tamper proof packing  Premium quality  Rich source of fiber and Reducing heart disease  Purity Assurance  Hygienic tamper proof packing risk factors   Perseverance of natural essence of turmeric Known For  Samnhar Masala Made from natural Made from complete natural ingredients pomegranate seeds Special features   Special features low in calories Mesmerizing taste  Turmeric powders antioxidant polyphones Rajwadi Masala Made as per traditional Tea Masala Acknowledged For : Made from natural standards which offer ingredients premium taste  Purity Assurance  Hygienic tamper proof Made as per traditional  Offers prefect flavor standards which offer  Amazing aroma premium taste   Freshness assurance  Amazing aroma  Freshness assurance  Offers prefect flavor  packing essence of turmeric White paper powder Vada pav Masala  Made from natural white pepper  Made from complete natural ingredients Known for  Appreciated For : Perseverance of natural Made as per traditional Undhiyu Masala Praised For :  Mouth watering taste standards which offer  Made from natural premium taste  Give health benefits ingredients  Offers perfect flavor  Appetizing taste  Tamperproof packing  Amazing aroma  Made from safe and  Completely fresh  Freshness assurance natural products  Tamper proof packing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  29. 29. 29 5. Customer segmentation and target market Segments and respective target market 1. Vegetarian and non vegetarian food eaters  In this segment vegetarian and non vegetarian both segment are targeted.  For Non vegetarian , company needs fish Masala ,chicken Masala, Mutton Masala, Egg curry Masala, Meat Masala.  For Vegetarian they make near about 30 Masala which are Garam Masala ,kitchen king Masala, tea Masala,etc. Segment Target market Vegetarian Vegetarian Non vegetarian Non vegetarian 2. Segment based on income ( very poor, poor, average, higher middleclass and rich)  In this segment 3 segments are targeted which are poor , average, higher middleclass groups.  For poor and average customers they make small packages starting from 5 Rs onwards  For High Income middle class Groups they make Packages of big size and they also target high quality Basmati Rice Segment Target market  Very Poor  Poor Products offered  Poor Packages start from 5 to 10 Rs  Average  Average Packages of 50 grm,100 grm,200 gram, 500 gram and 1 kg  Higher Middle Class  Higher Middle All Masala Class  Rich BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  30. 30. 30 3. Segment based on type of market a. Customer market ( direct customers) b. Industrial market ( hotels , restaurants, tea stoles. Food selling vendors)  Here Both segments are targeted  For customer market they target wholesalers, retailers, and Agents.  For Industrial Markets they target mainly Hotels, restaurants and food vendors because these customers are selling addible items which require large no. of Masala and company can gain a huge profit. 4. Segment based on habit of eating/ test and preferences in which spicy food eaters and people love to have Masala in drinks etc. 6. Channel of distribution for Dhanhar Meaning of Channels of distribution:  According to American Marketing Association, “A channel of distribution, or marketing channel, is the structure of intra – company organization units and extra – company agents and dealers, wholesale and retail through which a commodity, product or service is marketed.”  Marketing channel may be defined as, “A pathway composed of intermediaries, who perform such function as needed to ensure smooth flow of goods and services from the manufacturing ends to the consuming ends in order to achieve marketing of the produce of a company.” Channel of distribution in Dhanhar Masala  The producer and the final customer are part of every channel. We will use the number of intermediate levels to designate the length of channel. There are many type of distribution channel in industry. There are following: 1. Zero-level channel BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  31. 31. 31 2. One level channel 3. Two level channel 4. Three level channel A. Three level of distribution channel (full distribution channel) Manufacturer (Dhanhar masala) CNF (Super Stockiest) Wholesaler/ Agent Retailer( small shops, departmental stores and hotels) Consumer  Dhanhar Masala Pvt. Ltd. Use three level of distribution channel in general cases where they sale from their outlet to the super stockiest which in turn sales products to the agents and agent sale it to the big and small wholesalers or retailers and it goes further to retailer and finally to the customers. B. Zero level of distribution channel (full distribution channel) Dhanhar masala's outlay at Bhagal customer purchasing directly BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  32. 32. 32  Dhanhar Masala Pvt. Ltd. use to zero level channels in rare case here if known customer is asking for a small purchase then only they sale directly to the direct customer. C. One level of distribution channel (full distribution channel) retailer (small shops, departmental stores or some hotels) Dhanhar masala's outlay at Bhagal  customer purchasing directly Dhanhar Masala Pvt. Ltd. use to one level channels in case where the retailer or small shopkeeper or many department store in near around area or many hotels purchases Masala from Bhagal outlay and in turn retailers sale it to regular customers. D. Two level of distribution channel (full distribution channel)  In two level distribution channel company sales products to the super stockiest or wholesaler and they sale it to retailers like super store or departmental store and they sale it directly to the final customer.  This distribution channel can be shown as following. Manufacturer (Dhanhar) super stockiest (CNF) Retailer (small shops, departmental stores or some hotels) Final customer wholesaler Retailer (small shops, departmental stores or some hotels) Final customer BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  33. 33. 33 7. Sales procedure & 8. study of how customers are processed  Sales procedure in Dhanhar Exim Pvt. Ltd. is a very systematic and easily processed. As soon as an inquiry by customer is received, whether through verbal, telephonic or written, or from the website and then the quotation with price and type of product is sent to the respected customer. If the customer will be satisfied, he will send reply for terms and condition and that time marketing manager or assistant of the company will go for finalization of the terms and conditions at the customer place and if customer satisfied will give order for product. Order given by the customer to the marketing manager will be issued to production planning department. After the delivery schedules, production planning done. It consists of Bill of Material and material requirement planning.  After preparing production planning, execution of production plan is done and when raw material is converted into finished good final quality checking is done and accepted products are dispatched to respective customers.  This process can be explained as following: inquiery from the customer (through verblely, written letters or telephonic or inquiry from website "Dhanharmasalas.com quatation including price and type of the product is sent to the customer order from the customer ( if customer is satisfied) Material requirnment planning and bill of material Production dispatch of order and sent to the customer BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  34. 34. 34 9. Documents related with sales At Dhanhar Exim Pvt Ltd , Sales-related business transactions are recorded in the system as sales documents. There are as following  Sales queries: inquiries and quotations  Sales orders  Outline agreements, such as contracts and scheduling agreements  Customer problems and complaints, such as free of charge deliveries and credit memo requests  Cash memo 10.(a.) Composition of product, price, place and promotion for Dhanhar : Market mix At Dhanhar Product  Product ranging from spices( 41 item) for all people ( vegetarian , non vegetarian, spicy food eaters or people love to have some spice in their drinks like tea Masala or buttermilk Masala etc) and they make water chestnut flour and Basmati rice and chick peas in all available packaging.  Price So at Dhanhar they do have a good product mix.  Here Dhanhar set their price according to the competitors price so they follow the going rate pricing method but they use mark up pricing also for deciding the price for their product.  So here Dhanhar generally go with market price of other companies and they have the mark up for 50 to 70 % and hence they can satisfy intermediaries and customers both. Place  Here Dhanhar have good Distribution channel ranging from Zero, One, two and full levels of Distribution channel .  Here the company have a benefit that company can reach to every area of south Gujarat and middle Gujarat and hence BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  35. 35. 35 company can get the benefit of a good and small and hence speedy distribution channel. Promotion  Company have promotion policy of giving a hand bag on the purchase of Rs.1000 and more and a travelling bag on the purchase of more than of Rs 2000.  Company do have an appropriate advertisement policy .  Here they will decide the advertisement budget according to overall budget prepared by finance department.  Here their budget is generally between 5, 00,000 to 8, 00,000 rupees.  They mainly give advertisement in Guajarati newspapers and on FM and they use Hoardings for advertisement purposes.  So we can say that company has an appropriate policy regarding promotion and advertisement. 10 (b.) Comparison of 4p’s of Dhanhar with competitors A. Product :  While comparing Dhanhar products with competitors , Dhanhar is quite ahead as Ramdev has 43 Masala varieties while Other competitors like Everest has 43 Masala and S.K and Gajanand and nilon etc company have products ranging from 30 to 40 products while Dhanhar has 47 Masala with lots of varieties targeting both Non vegetarian and vegetarian food eaters. B. Price:  On comparing pricing policy with competitors Dhanhar has always kept its price lower than competitors. For example 50 grm hing is available at Dhanhar in 18 rs and in 24 rs while other hing like Ramdev hing and others are available in 28 to 33 rs. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  36. 36. 36 C. Place:  Dhanhar has all zero level, one level, two level and three level of channels. And on other side comparing to Ramdev, Everest and S.k Masala Dhanhar have poor distribution channel because Ramdev, everest, Catch Masala etc have distribution channel all over in India and generally these Masala are found in every general store or departmental store. So Dhanhar have all level of distribution channel but due to less number of distributors,other companies found to be superior than Dhanhar. D. Promotion:  As far as promotion or advertisement part is concerned Dhanhar do have an appropriate policy but Ramdev and everest have advertisements all over India and they do have good sales promotion schemes for intermediaries and customers and at local level S.K Masala and gajanand Masala also have good advertisements in newspapers and many hordings are found at many places but Dhanhar‟s target market is south Gujarat and they are able to attract the customers. 11. Study of generic level of competition  In the Masala industry in Gujarat region, mainly in south Gujarat, Dhanhar has to face a tough competition mainly with Ramdev Masala and Everest Masala and S.K Masala and Gajanand Masala also are good marketer in Masala industry but Dhanhar is able to survive in the competition due to following two reasons 1. providing natural products with very less usage of chemicals 2. Giving more commission to the intermediaries (minimum 20%)  So in this way Dhanhar is able to survive in tough Masala competition  While in Water chestnut flour market, Dhanhar has to face a little competition with small Atta maker flour mills who make Singoda flour on small scale basis.  Though in water chestnut flour competition Dhanhar is market leader due to following reasons 1. made from fresh singoda and no added chemicals 2. more commission to retailers BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  37. 37. 37 3. 170 Rs per kilogram, and available in small packet of 100 gram also and hence cheaper also.  So it can be said that Dhanhar with good composition of marketing and products running their organization at a good pace. 12. Forecasting and sales plan preparation  Dhanhar systematically do forecasting and prepare sales plan on base of forecasting.  The sales forecast establishes the level of activity used in all the other forecasts and budgets for the business. If your sales forecast varies wildly from your actual results, your cash flow and profitability forecasts will similarly be inaccurate. Regularly updating forecasts ensures current market intelligence, buying signals from clients and the efforts behind the marketing strategy can be taken into account for the next forecast.  In Dhanhar Exim Pvt Ltd company use following sources to forecast to sale for future. 1. Sales Forecasting through Past sales method 2. Sales Forecasting through performance of Distributor 3. Sales Forecasting through Review the market Sales Forecasting through Past sales method  In this method Dhanhar Exim pvt Ltd use previous year sales for sale forecasting. Generally company takes last year sales as a base and adds some percentage to last year sales.  They here generally use trend percentage method for estimating future sales.  This can be seen as following……. Product Sales in Sales in Trend percentage Sales estimation 2011 2012 Garam Masala 300000 320000 106.6666667 341333.333 Tea Masala 150000 107000 71.33333333 76326.6667 Red chili powder 400000 470000 117.5 552250 water chestnut powder 700000 820000 117.1428571 960571.429 for 2013 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  38. 38. 38 Sales Forecasting through Distributor  Company also use each Distributor‟s sales of last a year as a base for sales forecasting and give them target with adding some percentage in to sales, here they consider the average sales of past three year and add some percentage to average sales, and they accumulated sales of all Distributor. In that company accumulate sale of all distributor and give them target via adding some percentage in to accumulated sale or average sale of all distributor. This is only possible when company can forecast demand of each distributor.  Here if average performance is higher than last year sales then they give only 2% growth and if average performance is less than last year sales then they give 5% growth. Distributor’s Sales in Sales name 2010 in Sales in Average 2011 2012 Percentage Sales performance growth to estimation average for 2013 sales Distributor 1 8,92,000 10,00,875 11,00,000 9,97,625 5% 10,47,506 Distributor 2 4,00,000 2,30,000 1,70,000 2,66,667 2% 2,72,000 Distributor 3 5,00,000 4,00,000 4,70,000 4,66,667 5% 4,79,500 Distributor 4 5,60,000 7,00,000 8,20,000 6,93,333 5% 7,28,000 Sales Forecasting through Review the market  Through Review the market via industry experience and intelligence, company to know what is happening with the competition, and company can also look at their financial strength through Companies House filings. Are they growing or contracting? What are they doing with their pricing? Is this a sign of an aggressive sales strategy? What your competitors do will inevitably affect your sales. So that answering to these questions, it helps to sales forecasting. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  39. 39. 39 13. Pricing policy  It is easy to decide the % of the profit, which are added to cost?  It is easy to set price according to the competition. So now we will see how Dhanhar Exim Pvt. Ltd. set their product price.  Price which the customers are required to pay for the goods. It should meet the expectation of customers and make customers satisfied which will ultimately increase the royalty towards the company.  Pricing is done by considering various factors such as pre-received value by customers, competitor‟s price, government policy, firm‟s objectives, etc.  Now we will see what pricing policy by Dhanhar Exim Pvt. Ltd its product considering various costs, which they have, incurred such as fixed cost, variable cost. Price = (fixed + variable+ overhead ) costs + % of profit  They will always keep a keen eye on the price of the raw material as almost 50% to 60% cost of product cost is covered by raw material cost.  They will also consider the price in the market. But here one should know that Dhanhar Exim Pvt. Ltd never compromised on the quality of product.  Here company have adopted going rate pricing where the Dhanhar Exim Pvt. Ltd charge the price on the bases on prices of Everest, Ramdev, M.D.H, and Gajanand Masala.  Here company follows going rate pricing but they also have some mark up on their cost for profit.  Here company does not set price by its competitors, here they set the mark up on the cost and then they decide the price.  For example if a Dhanhar water chestnut powder of 1kg packet has following cost structure then, Variable cost per unit= 45 rs, Fixed cost 42, 00,000 rs for all products Expected unit sales is 12, 00,000 units of all products aggregate sales BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  40. 40. 40 Then unit cost= variable cost + (fixed cost/unit sales) =45 + (120, 00,000/16, 00,000) =61+ 7.5 =68.5 So here unit cost of water chestnut powder is 47.5 rs per 1kg And if company have mark up of 60% then Mark up price= unit cost/ (1-desired return on sales) = 68.5/ 0.40 =171 rs So according to mark up price, water chestnut powder can sale 1 kg packet at 170 rs. Pricelist of Dhanhar Exim Pvt Ltd Product RAJWADI GARAM MASALA weight 25 gm 50 gm 100 gm 200 gm 500 gm AGMARK HING 50 gm 17.50 100 gm 200 gm 500 gm 34.00 67.00 165.00 weight 15.g 50.g 100.g 200.g jar 500.g ar Price 5.00 22.00 40.00 75.00 155.00 50 gm 100 gm 200gm 500 gm 1kg 8 15 29 70 140 5.00 TEA 8.00 MASALA 15.00 29.00 70.00 15.g 50.g 100.gm 500 gm 500.g Jar 5 25 48 205 175.00 50.g 100.g 200.g 500.g 1.kg SUPER GARAM MASALA 12.00 PUN. 18.00 GREVI 34.00 MASALA 83.00 155.00 15.g 50.g 100.g 200.g 500.g 5.00 18.00 35.00 68.00 130.00 50.g 17.00 CHHOLE 15.g 5.00 15 gm 50 gm 100 gm 200 gm 500 gm NO.300 HING SUPER HING(DABBI) price 5.00 12.00 23.00 46.00 110.00 Product PAVBHAJI MASALA Special Garam Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  41. 41. 41 100.g DELUX HING (DABBI) 50.g 100.g 33.00 CHANA MASALA 35.00 65.00 KASHMIRI CHILLI POWDER 100.g 200.g 500.g 27.00 IDLE 50.00 SABHAR 120.00 MASALA CHILLI POWDER 50.g 100.g 200.g 500.g 1.kg 5.kg 5.kg 7.50 14.00 27.00 BIRIYANI 65.00 MASALA 125.00 525.00 600.00 RAJGARA LOT 50.g 100.g 200.g 500.g 1.kg 5.kg 7.50 14.00 27.00 65.00 KICKEN 125.00 KING 600.00 MASALA 50.g 100.g 200.g 500.g 1.kg 7.00 12.50 24.00 CHAT 57.00 MASALA 105.00 50.g 100.g 200.g 500.g 100.g 1.kg 8.00 15.00 28.00 PANIPURI 65.00 MASALA 20.00 190.00 FINE CLASSIC Turmeric powder Classic CORIANDER POWDER CORINDER CUMIN POWDER SHINGODA LOT ROCK SALT MILK MASALA TEA MASALA 40.g 100.g 20.g 50.g 100.g 50.g 2.00 5.00 JIRU POWDER 55.00 LILO MARKO HING 135.00 275.00 KALO MARKO HING 18.00 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT 50.g 100.g 200.g 500.g 18.00 35.00 68.00 130.00 15.g 50.g 100.g 200.g 500.g 5.00 18.00 35.00 68.00 130.00 15.g 50.g 100.g 5.00 17.00 33.00 100.g 200.g 500.g 16.00 32.00 80.00 15.g 50.g 100.g 200.g 500.g 5.00 17.00 33.00 65.00 135.00 15.g 50.g 100.g 200.g 500.g 5.00 13.00 24.00 45.00 110.00 15.g 50.g 100.g 200.g 500.g 5.00 13.00 24.00 45.00 110.00 1.kg 210.00 1.kg 370.00 1.kg 250.00
  42. 42. 42 LAL MARKO HING 190.00 50.g 500.g 7.00 65.00 50.g 500.g 8.00 75.00 50.g 7.00 SP.G.MASALA 1.kg 175.00 SPECIAL GINGER POWDER 1.kg 1.kg CHEVDA MASALA SURTI MASALA 1 kg 210.00 200.g 500.g 29.00 70.00 200.g 500.g 34.00 80.00 105.00 LIMBU-SODA DELUX MASALA 500.g 140.00 SP.TEA MASALA 1.kg 214.00 CHHAS MASALA JINGER POWDER 1.kg 180.00 DALSHAKMASALA 250 g 70.00 MARI POWDER 500.g 204.00 FISH MASALA 50.g 100.g 200.gjar 500.gjar 100.g 200.g 500.g AACHAR MASALA 20.00 38.00 GUNDAKERI 74.00 MASALA 150.00 GOL-KERI 15.00 MASALA 29.00 70.00 14. Promotional and advertisement policies at Dhanhar Masala Meaning of promotion:  Promotion means a set of efforts made by the company for stimulating the demand for its product or products without making any alteration in product mix, price and channels of distribution. What is done for promotion?  Dhanhar Exim generally follows following promotional activity. o Customer purchasing Masala item above Rs 1000 to 1999, Dhanhar Masala gives one Shopping Beg having printed their name Dhanhar and address. o Customer purchasing Masala item above Rs 2000 up Dhanhar Masala gives one Traveling Beg, having printed their name Dhanhar and address. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  43. 43. 43 o And special bags are given to regular customers at the time of Diwali. o Sometimes they carry the scheme on certain products like 20% extra on the packaging of 1 kg. Advertising policies  Here company does have an advertisement in newspapers but on the small scales.  Here they will first decide the communication and advertisement budget for the whole year and they will plan during which season they are going to give promote their product.  Here they will decide the advertisement budget according to overall budget prepared by finance department.  Here their budget is generally between 5, 00,000 to 8, 00,000 rupees.  They mainly give advertisement in Guajarati newspapers and on FM and they use Hoardings for advertisement purposes.  Advertisement photo in Gujarat Samachar newspaper is as following.  Here in advertisement they are mainly focusing on seasonal products for example in June and July they have advertisement regarding pickle Masala because it is the season of BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  44. 44. 44 mango while in the month of august they have advertisement regarding Water chestnut flour as it is the month of many festivals.  Here they use various hoardings also which are given to distributors for the publicity purposes which can be shown as following.  Here for advertisement purposes they give advertisement in a magazine called yellow page which is a business magazine having details of suppliers, manufacturer and distributors.  Dhanhar is giving advertisement which can be seen as following.  Here dhanhar‟s Masala administrative and store department phone numbers can be seen.  Here this advertisement is given in Surat addition of Yellow pages magazine. 15. Taxes applicable on sales activity  In India, there are two types of taxes on sale of goods – one levied by the Central Government and the other levied by the State Governments. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  45. 45. 45  What Dhanhar Exim has to pay is discussed as following. 1. Taxes applicable on sales activity within the Gujarat state (Intra-state Sale)  Sale or purchase of goods within a particular state is called Intra-state Sale. According to Gujarat Sales Tax Act (GST), 1969. Prescribed in the act, Dhanhar Exim Pvt Ltd charge 3% sales tax on their customer within Gujarat. According to Gujarat value added tax (GVAT), 2003 Dhanhar Exim Pvt Ltd charge extra 1% Vat Tax under section 7(1) is a charging section which is levied on sales of goods, listed in schedule II and schedule III after charging sales tax. 2. Tax on sales activity in inter-state Sale  A sale or purchase of goods between two states is called inter-state sale, is governed by the Central Sales Tax Act, 1956 (CST Act). According to Central Sales Tax Act (CST), 1956, prescribed in the act Dhanhar Exim Pvt Ltd charge 5% sales tax on their interstate customer on sale of goods. According to State VAT legislation Dhanhar Exim Pvt Ltd charge extra 2% Vat Tax after charging sales tax. So taxes applicable on sales activity can be viewed as following Sales Act Tax applicable Sales within Gujarat Sales Tax Act (GST) 3% + 1% according Vat Tax under Gujarat & Gujarat value added tax section 7(1) = total 4 % tax (GVAT) Sales outside Central Sales Tax Act (CST), 5% tax according CST + 2% additional Gujarat 1956 Tax = total 7%S 16. study of control system & reporting system for employees working in marketing department 1. Control regarding Dispatch of goods  The controlling system is very necessary for sales employees. At Dhanhar controlling system is very clear. No one can take the lot outside the factory before the signature of dispatching manager. Dispatching manager issues the bill for the goods which is send out BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  46. 46. 46 of the factory. This bill would be collected by the security manager, and then they allowed any one to let the goods outside the factory. This system is also applicable for the purchased goods. No one can take the goods inside the factory, first security manager check the goods and then allowed to enter into the factory. 2. Control regarding target achievement for distributors  The controlling system regarding sales distributor is in terms of the sales target they have to achieve given by the marketing manager.  Company also use each Distributor‟s sales of last a year as a base for sales forecasting and give them target with adding some percentage in to sales, here they consider the average sales of past three year and add some percentage to average sales. Here if average performance is higher than last year sales then they give only 2% growth and if average performance is less than last year sales then they give 5% growth.  If a distributor is able to achieve his goal, he will be rewarded with extra % of sales commission mainly 2 %TO 3 % of his total sales.  If a distributor is failed to attain his goal for continuously for 3 times, he will be removed from their distribution channel. 17. Document Report generated in marketing department  The different reports generated in marketing department are as follows: 1. Customer feedback report 2. Customer complain report 3. Sales report 4. Profitability chart for various distributors 5. Conversion of samples into orders 6. Sample making time 7. Number of samples to be made to confirm an order BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  47. 47. 47 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  48. 48. 48 A. Structure of production department in Dhanhar Masala Mr.Jignesh (head 1) Production department production manager assistant workers Mr.Nilesh (head 2) o Here at Dhanhar production department is being managed by two heads Mr. Jignesh and Mr. Nilesh respectively. o Production manager works under two heads. o assistant is at 3rd level in the hierarchy o Workers are working under the head of a assistant. Meaning of Production:  “Production is the process of converting the raw material and for the other input the product for further production of the finished goods or services so that utility of input is created or enhanced and the need of customer are satisfied.” Example: - Consumer goods, Industrial goods, Services of transport, Medical treatment, Education, Insurance, Banking etc. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  49. 49. 49 Definition of Management:  “Management means creating and maintaining an environment in which individual working together in group willingly contribute there best to achieve the predetermined goal and objective timely though the effective utilization of sources such as money, material, technology etc.” Production Management:  “Production Management means creating and maintaining environment in which individual working together in group willingly contribute their best to produce to satisfy the goods and services by optimum utilization of raw material and other input so as to timely satisfy the need of customers” B. How production plan is prepared from sales plan Sales plan prepared by Marketing Department and Sales order sequencing the activity ( important order or order having earlier delivery date are given prirority) deciding production planning quantity through checking quantity of current stock of finished goods , work in progress and expacted closing stock production plan quantity 1. First of all, Marketing Manager will forecast demand of customer and prepare sales plan according to their requirement or also estimate sales for future period on the BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  50. 50. 50 basis of Market situation. Then marketing department gets sales order from customer. At Dhanhar Exim Pvt Ltd, one customer can order via online and direct communication through telephone or letter or personal talk. 2. Here in the second step marketing manager will send the demand data about each product of Dhanhar to the production department where they will sequence the activity of production where important products or products whose delivery date is earlier is given the priority by production department and upcoming season‟s product quantities are also managed, for eg in august month many Hindu festivals comes and many people have fast on such festivals and in fast people eat products made from water chestnut flour , so production department have to make water chestnut flour in the month of July so that it is available to marketing department in august. 3. In the third step they will do production planning so that they can have exact quantity. Here they will first check the current stock of finished product and if production is in progress then that quantity is also considered and they will subtract both current stock and WIP quantity from total marketing forecast and they will add expected closing stock at the end of planning period. Here Dhanhar considers the stock , they have to send to their selling outlet at Bhagal for sale in current period . So, production planning quantity = marketing sales forecast- current stockcurrent Work in progress (if any) + requirement of Finished product for sales in current period + expected closing stock Current period = July Planning period = August Production plan quantity for water chestnut flour for the month of August = Market forecast (2700 kg) - Current stock (715 kg) – current WIP (00) + current expected sales (280 kg) + closing stock Expected (600 kg) = 2865 kg So, Dhanhar have to make 2865 kg of Water chestnut flour in the month of August. 4. In such way production plan quantity for all products at Dhanhar. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  51. 51. 51 C. How the production plan is converted in Material Requirement Plan & ultimately in purchase Plan production plan quantity Bill of Material for various products showing quantities of raw material Determining net quantity for Raw material through checking current stock of RM , pending order quantity, closing stock and safety stock of RM and current periods requirnment placing orders to the supplirs 1) First the production department gets an order from the buyers. After getting the confirm order production manager prepares production plan. They send this production plan to raw material and stock manager of the factory. 2) In the second step they will prepare Bill of Material for each product, BOM is the statement showing quantity of raw material and other inputs required to produce that product. 3) Here in the 3rd step production department have details of all raw material required to produce one product and from total quantity required, they will subtract current stock of raw material and quantity required to produce quantity for orders which are pending and they will add quantity they want as closing stock and as safety stock at the end of planning period. Net material requirement quantity = quantity needed for production - current stock of raw material – quantity needed to produce pending orders(if any) + requirement in current period + expected closing stock and safety stock BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  52. 52. 52 Material requirement planning for Water chestnut Flour (from above production plan, we can see that production forecast is for water chest flour is 2865 kg) Current period = July Planning period = August Raw material singoda required for making water chestnut for the month of August = production plan quantity (2865 kg) - Current stock of singoda (630 kg) – quantity needed for pending orders (00) + closing stock Expected and for safety stock (600 kg) = 2835 kg So here Dhanhar Exim Pvt Ltd has to order for 2835 kg of Singoda for making 2865 kg of water chestnut. 4) The merchandiser place the order to the supplier of raw material as per the requirement. By this way they prepare purchase plan.  They do not believe in maintaining stock. So they have to prepare purchase plan every time. Normally they purchased raw material from Surat and Mumbai. D. Plant location of Dhanhar Exim Pvt ltd  Plant location is mainly selection on these areas where the business should well establish for maximum utilize of economy and effectiveness. It is an important decision in long term.  Location of plant is most important factor in a private sector. There are many factors are affected e.g. if the place was outside the city then they are free from paying octroi for their product, various taxes, labour transmission facilities, living home to the labour or employee like houses, cottages etc., for the raw material storage facility to the certain extent to run production smoothly. When plant or site is located in near or in the city they have no expense to rent for the employee or labour houses, available good infrastructure in compare to the far from the city area, less transportation cost, easy distribution of goods in less time. Dhanhar Masala Pvt. Ltd. plant is located at no far from the city BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  53. 53. 53 and not near to the city. It is located in industrial zone of fulpada in this area they get benefits from the government and electricity, water, roads, communication channels. Production house Plant location of Dhanhar administrative office  Survey no. 167,Ashwini kumar road, Nr, shamshan bhumi,Fulpada, Surat,(Gujarat) India. Dhanhar house,Bhajiwadi pole,bhagal char rasta,Surat – 395003(Gujarat) India. Dhanhar Masala Pvt. Ltd. Chooses this area because there are available enough raw material with proper quality & quantity. Easy distribution of their product & profitable to the industry. They not thinking for the changing the site. They want to buy or take on the lease new site near the old plant.  The population is increasing day by day and residential area will come near to the industrial area so that Dhanhar Masala Pvt. Ltd. more concentrate on environment not harmful to the their citizen. The company will think to establish new plant far from to the residential area. Factors affected the selection of Dhanhar Exim pvt ltd locations and Benefits (evaluation) of plant location  Various factors which affected plant site selection and benefits from that location are as following. 1. Proximity ( nearer) to market 2. Proximity ( nearer) to raw material sources BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  54. 54. 54 3. Type of business 4. Availability of manpower 5. Availability of infrastructure and other factors of production 6. Law & order 7. Political system and economical system of the country 8. Ideology of ruling political party and opposite parties 9. Cost of land and real estate 10. Other support system 11. Climate factors 12. Mindset of local society 13. Topography of soil 14. Nature of business 15. Tax incentives and other 16. Personal factors They are as following…….. 1. Proximity (nearer) to market  Dhanhar Exim Pvt. Ltd. is located in the prime area of surat. The benefit of this location is that they can serve to whole south Gujarat market where they have more number of customers compared to other parts means they can serve to places like Navsari, Valsad or vapi which are in southern part and to Bharuch, Ankleshwer and Narmada which in Northen part of Surat and hence surat is a central location and hence company can reach to the customers in easy way. 2. Proximity (nearer) to raw material sources  Adequate raw material is available for Dhanhar Masala Pvt. Ltd. The main reason for Choosing this area because there are available enough raw material with proper quality & quantity  Regular supply is possible as Surat is very near to N.H. 8. So transportation facilities are available all the time. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  55. 55. 55 3. Other support system  There are various banks available around to the company like HDFC bank and sutex bank and Bank of Baroda etc.  As in some industry continuous supply of power is important factor. And here Torent Electricity Board provides continuous supply of power. 4. Availability of manpower  Important input of Unskilled or blue color workers is available at economical cost.  Regular & cheap supply employee is available in the area of Ashwini kumar.  Manpower availability with required skills. 5. Availability of infrastructure and other factors of production  Dhanhar Exim Pvt ltd has its own state of art infrastructure at manufacturing plant in Gujarat, India. Aimed with capable of producing more Masala per month.  Company does have separate buildings for administrative work and production work at Bhagal and at Ashwinikumar respectively. 6. Topography of soil  The soil of Ashwinikumar area is harder so that manufacturing process can be carried on without any further problems. And here company doesn‟t have very heavy manufacturing so production can be carried easily. 7. Type of business & Nature of business  The Dhanhar Exim Pvt ltd is running the business concerning with manufacturing of Masala and other edible products which can be manufactured in any area and also in prime area of city or village and hence Dhanhar Exim Pvt ltd have no requirement to be away from Surat city and hence Ashwinikumar is a proper place for them. 8. Political system and economical system of the country  Here as this company is only concerned with Manufacturing of Masala no political system affects the working and management of the company. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  56. 56. 56 9. Ideology of ruling political party and opposite parties  Here the ruling party which is B.J.P have always supported industrialization and always promoted business against agriculture which always been an issue to the opposite party. But Ideology of ruling party is always positive that‟s why they are still in Masala industry since 1965. 10. Cost of land and real estate  The Dhanhar Exim Pvt ltd was established in 1965 and at that time surat was a developing area Surat district and they got the Ashwinikumar area‟s land at some economical cost but at that time Bhagal was the main area of Surat city and hence they have to pay slightly more at that time. 11. Climate factors  As Dhanhar Exim Pvt ltd is of manufacturing company of Masala and hence do not require having a specific climate. For e.g. a pharmaceutical company requires clean air in their premises but for Masala making nothing more is required. 12. Mindset of local society  Here the local ladies are getting the job and as it is only a Masala making firm local people have no point for opposing the company manufacturing. 13. Law and order  As company‟s both working places are in prime area of surat city they don‟t have to pay after security of working place compared to rural area and hence Dhanhar got benefited. E. Plant layout of entire factory  Here different plant layout for each deprtment is not there because Dhanhar has its production unit at Ashwinikumar and administrative office is located at Bhagal BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  57. 57. 57 where marketing and finance department works. While there storage department is near Bhagal Vegetable market.  Thus internal plant layout for each department is not possible.  This is Dhanhar‟s administrative area where marketing and finance department is located.  While their storage department named Dhanhar Masala Bhandar is located near Bhagal Vegetable Market. Which can be seen in following map. Dhanhar Exim Pvt ltd, Bhagal, suart. F. Internal plant layout of main production department  Plant of Production Department at Ground Floor area  Here According to production process of cleaning, grinding, Mixing, packing and labeling, various departments are made. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  58. 58. 58  While Storage department for finished products are made on the 1st flour. G. Types and classes of Material Handling Equipment 1. Trolley:  Trolley is being used mostly in the material department for the movement of small article from one rack to another and also used in the movements‟ equipment and man oriented equipment. Trolley can be as following. . 2. Hand carts: hand cart has the same utility as Trolley but it is used outside of the plant for movement of shipping packages of finished products. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  59. 59. 59 3. Convey belts:  Dhanhar uses conveyor to transport materials on conveying system. Conveyor utilizes a moving belt that slides along a flat steel bed with pulleys at both ends.  Here Dhanhar mainly uses it for movement of raw materials. 4. Elevators:  Elevators are used for the vertical movement at Dhanhar between two floors and for moving finished products from production department to underground flour which is the storage area. Elevators uses electricity for vertical upward movement while use gravity while downward movement. Lifts transport goods vertically to multiple heights (from the ground to a mezzanine for example) or horizontally for increased order picking throughput. 5. Crates and boxes:  Dhanhar provides the baskets, bins, boxes, pallets and other containers that are durable enough to handle the day-to-day rigors of your operations. 6. Pipelines  Pipeline is used for liquid form inventory movement and of water and wastage materials. 7. wooden pallets:  Wooden pallets are the most common type of pallet, which are also made of metal, plastic and paper. Flat transport support structures, wooden pallets give forklifts the ability to easily lift and place products and materials on pallet rack.  Wooden pallet cab be seen as below BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  60. 60. 60 Classification of material Handling Equipments A. Classification on the Basis of Form of the Material 1. For solid Material  Hand Carts  Conveyer Belts  Elevators  Crates and Boxes 2. For Liquid material  Pipes  Canals(For waste material) B. Classification as per path of movement  Elevators  Pipeline  Conveyor belt  Hand cart C. Classification as per Direction of movements o Handling is required between two departments, between two locations within a department and also at one work-station or machine  Elevator and pipeline for vertical Movements BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  61. 61. 61  Handcart and conveyor belt for horizontal movements D. Classification as per starting point and destination point  Crates and boxes for intra department Material handling  Handcart and trolley for Inter department Material Handling E. Classification as per sources of power 1. Manually powered: Handcart, trolley, crates and boxes 2. Online electronic Power Source: Elevators H. Inventory control system  Here at Dhanhar Masala, they have ABC inventory control system in which they record the transactions of inventory in computer and arrange them in descending order in the form of their monetary value.  Here benefit from this system is” It is able to record multiple units of measure, as they purchase in “bags, jars, kg, etc.”  In this system name of RM its batch and material code and Barcode is inserted.  The installation of Stockroom has improved their inventory accuracy, reduced rush orders, reduced over buying and in general streamlined the purchasing and inventory process for this small business. Format of ABC system at Dhanhar Raw material name RM code Money value cumulative % of total Class of RM consumption value (A, B, C) I. inventory valuation method o Materials are issued to the different jobs, works, and orders from the „store‟. The cost of finished product largely depends upon the price changed for raw-material issued to the BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  62. 62. 62 jobs. Various methods are used for inventory valuation, which will solute with industry condition. The methods of inventory valuation are as follows: 1. FIFO method (first in first out) 2. LIFO method (last in first out) 3. HIFO method (highest in first out) 4. Average cost method 5. Market price method 6. Standard cost method 7. Base stock method o Dhanhar Exim Pvt Ltd is using FIFO (first in First out Method) for valuation of inventories, in this method Guidelines for inventory valuation method Raw material o Stock different ingredients are values as per the price of purchasing. So if dry water chestnuts are being purchased at 6 rupee per kilogram and suppose 25 paisa is inspection cost then 6.25 is the value of water chestnut. Work in progress o Top management has decided that Work in progress is valued as per the half cost of manufacturing multiply by quantity of WIP. Finished goods o Final Masala product is being valued as per manufacturing cost multiply by total stock of polished raw material. Tools and equipments BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  63. 63. 63 o There is stock register of how many tools and equipments are used. According to this register tools or equipments used multiplied by cost or price of that tools and equipment. J. Classification of inventories according to ABC & VED analysis ABC analysis o Abc analysis is analysis according to the value of items. In Dhanhar, the inventory consists of hundreds of items and many employees are controlling them. In order to affect economy in controlling such large inventory Dhanhar uses a system known as ABC (Always Better Control) analysis. o It has been found from the experience that all items included in inventory are not of equal importance. A few items in the inventory represent a large proportion of total value of inventory. Hence, more attention must be devoted to the control of such items. All the items are divided into three categories. 1. A – Category  It includes those items which are very important and of high value but forms only a small proportion of total quantity of inventory.  At Dhanhar, there are 40 items which are comes in category A and they represents as much as 54% of value of inventories. Strict control over receipt, storage and issue should be exercised over these items such as Black Pepper, whole cardamom, red chili, turmeric, dry singoda, Cotton Seeds Oil, Nutmeg, Coriander, Ginger, Plastic Bag( for packing), Rajgara etc. 2. B – Category  Items included in category B are not as important as those in category A interms of money, but are important enough for its proper records to be maintained. They constitute 65 items of total number of items, but represent 28% of total value.  Here such items are Ajwain, Mint Leaves, Black Salt, Rock Salt , Cinnamon Leaves etc 3. C – Category  The remaining items must be placed in category C. they are not so important form the view point of maintaining control over the receipt and consumption such items constitute 50% of the total number of items but they represent 18% of total value. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  64. 64. 64 ABC analysis of Dhanhar Category No. of items(in % of total Value of items ( in % of total number of items) value of inventory) A 40 items (21.05) 54 B 55 items(28.95) 28 C 95 items (50%) 18 This ABC analysis can be shown as following 100 80 60 40 20 0 0 21.05 50 100 VED analysis  The possible consequences of material stock outs when demand arises from the basis of VED analysis. The cost of shortage depends upon the seriousness of the situation. Items are grouped as V(Vital), E(Essential) and D(Desirable).  This classification of inventory is based on importance and application of different items in production process. According to this classification there are three categories of item VED.  Vital items are those items without which production will instantly stock all main raw materials are obviously vital items. Similarly, there can be some another low value items which are absolutely necessary for production process. As explained above, BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  65. 65. 65 spar parts of machines like power generator or Quality control liquid becomes vital items. For example for making water chestnut flour dry singoda is vital product.  Essential items are those items without which efficiency of production process will reduce. Absence of these items may not cause total stoppage of production but rate of production may go down or wastage of material may increase.  For Example at Dhanhar elevator is most important because it is helpful for multi level movement of material and if it is not working then it will affect the efficiency.  Desirable items are those items, without which it will be inconvenient to do production operation. Without these items, production is not going to stop or slow down.  Example: weight measuring instruments, staplers small tool of safety devises are such desirable items. In Dhanhar, there is no system like VED analysis but by doing VED analysis those who are responsible for availability of various raw material and items may know which items are important for production process. K. Study of material codification system  Material codification system is a system in which each parts is given different codes for identifying particular product by giving alphanumeric codes. Alphanumeric codes, which are given to different parts, are unique so that computer will able to keep accurate information in it. Now we are going to study alphanumeric codes. 1. RM045: Here RM means material related items. For example red chillis, dry ginger may be given the code 0454 and 0567. 2. FG012: Here FG means finished goods which made in factory. For example Tea Masala may be given a code FG180 3. JB022: Here JB means job repairing items. Items which are used for repairing and maintenance. For example nuts, bolts, various machines spare parts etc. 4. C12: Here C means consumables items. Greece, oil etc. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  66. 66. 66 L. Records keep in store: 1. Material Receipt Register 2. Material Issue Register 3. Stock Register 4. Store Register of Assort Department 5. Wastage goods Register 6. Reject goods Register 7. Finished goods Register M. (a) Material receipt procedure  At Dhanhar, there is systematic process for material receipt as follows. 1) The first step is purchase order given by company to suppliers. 2) When material comes it is not directly sent to store department but it is given for quality checking. In Dhanhar, there is one laboratory to check the quality of materials. They are checking the quality of goods and compare with quality of sample which is given by suppliers. 3) If there is any discrepancy, it should be immediately reported to the purchase department and that goods are sent to rejected goods department. 4) Rejected goods department take necessary action for the return of goods to suppliers. 5) If the goods are of quality, receiving section will prepare a “goods receive note”. Four copies of the note are prepared and three copies are sent to the store keeper along with the goods received and they attach green color “accept card” with materials. 6) Received material is store in various containers by store department and issue when they get order. (b)Material issue procedure As we done previously, we will see material procedure step wise. 1. Suppose the sales department gets the order of 100kg Pavbhaji Masala. Then purchase department will see current availability of stock and store department and by watching condition they are taking decisions. 2. After the store department is given required stock, production department approach the store department for getting required material for producing 100kg Pavbhaji BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  67. 67. 67 Masala, so that the store department will send accurate and adequate material to production department, which will reduce the wastage cost. 3. Now store department will approach to material requirement department which will give them the bill of material report of 100kg Pavbhaji Masala.  One thing should be noticed that consumable items, workers have to approach the store department with requirement slip for getting the required material. N. Documents related to material issue and receipt 1) Material receipt register 2) Material issue register 3) Stock register Material Receipt Register Date Name of Dealer Challan no. Item Quantity Remark Material issue register Date Name of Dept Material Issue Form Item Quantity Remark Balance Remark No. Stock Register Date Receipt Of Quantity Price Date of Issue Issue Quantity Receipt BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  68. 68. 68 O. Purchase procedure 1. First requirement for raw material is felt after making raw material purchase plan, so here which product in how much quantity to purchase etc are determined. 2. After that search for the supplier is done in which they write the letters for quotations from the suppliers. And here supplier sends the quotation for the specified material. 3. In the third step company selects the suppliers who are providing good quality of material at the reasonable rate. 4. Fourth step is about communication and negotiation between company and supplier regarding quantity to be sent and by what way payment is needed to be done and about the payment terms and condition and credit period. 5. In this step final price is decided 6. This step is about placing the order with certain quantity and delivery date. 7. Receipt of material is the last step of purchase procedure. requirenment of raw material is felt Inquiery about suppliers ( quatation) selecting one supplier which satisfies more Negotiation ( communication) Decide the final price Place the purchase order Receipt of material BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  69. 69. 69 Documents related with purchasing a. Inquiry letter:  This is the letter which is send by the purchase manager to suppliers. If communication is written then the purchase manager can have the proof. But if the means of communication is telephonic then there can be no proof. And if the communication is done by e-mail then there will be definite proof. b. Response letter:  This letter is given by the supplier to purchase manager. This is the letter in response to the inquiry letter. This letter is in the form of quotation. Which contain the price of the goods that manager have asked and also other information. c. Comparison Statement:  This is the statement which is prepared by the purchase manager. After receiving the quotation from the supplier the manager will prepare this kind of comparison statement. This statement contains the comparison between all suppliers. And on the basis of this they will decide whether to select the particular supplier or not. Comparison statements Dhanhar Exim Pvt Ltd Bhagal, Surat Comparative statement of quotations Tender no……… Opened on………… Name of material……… Serial Name of no supplier Entered by………. quantity Price Duties and Terms of taxes Remarks delivery Checked by………. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  70. 70. 70 Purchase order Dhanhar house, Bhajiwadi pole, bhagal char rasta, Surat – 395003 Phone no: (0261)225121224 PURCHASE ORDER Purchase Order No: Supplier Quotation: TO: No. & Date: Please supply the following items on the terms and condition mentioned below. Sl No Description Material size Qty. Price Amount Delivery code date Terms of delivery…….. For Dhanhar Exim Purchase Manager P. Maintenance planning system  Maintenance planning for various machines used production department necessary for continuous production. At time, break down of one machine can hamper whole process of the production and also leads to delay delivery. To avoid all this things, there is one master key and that is compulsory periodically maintenance.  At Dhanhar, maintenance of consumable machine is done on a fixed period and definitely at the time of breakdown of the machinery point. After breakdown experts for bigger faults immediately repair machinery. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  71. 71. 71  At Dhanhar maintenance of different machines is done on the based on the limits given to each machines and also keep records for each machines with no. of breakdown in whole month and even for year. If any machinery shows more than expected breakdowns than it is inform by service man to top management for the replacement of machinery Q. Quality control system at Dhanhar Exim Pvt ltd Quality:  Quality refers to the sum of attributes or properties that describe a product. These are generally expressed in terms of specific product characteristics such as length, width, colour, etc. These characteristics must be quantitatively expressed in terms that can be objectively measured or observed. Quality Control: Quality Control refers to those activities used to refer to a specific organization within the Industrial enterprise which is assigned responsibility for many of the activities necessary to achieve quality objectives. Methods of Quality Control, which are uses in the Dhanhar Masala Pvt. Ltd There are three method uses, which are given below:1. Inspection: inspection is done by the worker on the job and improving the quality wherever he finds any fault. 2. Quality Circles: at Dhanhar group of many person are given various products for production and one with best individual performance is elected as a group leader and all group leaders meet frequently for quality improvement. 3. Statistical Quality Control (SQC): this method is followed by laboratory scientist for checking the quality of raw material and finished products.  Most of use Inspection and Statistical Quality Control by Dhanhar Masala Pvt. Ltd. in the Factory. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  72. 72. 72 Quality control: Quality is the key thing the business of exports. Dhanhar is also paying more attention to the quality control. In this company there is quality control department directly under the quality control manager and production head.  The structure of the quality control department is as follows: production manager quality control manager line quality controller (for basmati rice , for spices) checkers General guidelines for quality control  They have to use hand gloves while production during grinding, mixing, and cleaning.  In every 5 hours the floor is cleaned by the house keeping members.  They use wet & dry dustbin to throw waste and to keep environment hygienic and eco-friendly. Plastic bag used in a dustbin are change twice in a day.  They use fresh herbs and ground nut spices and cleaned before grinding.  They never use expire product before getting it from general store they always check the manufacturing or expire date.  And they always clean the cleaning, mixing and grinding machine after making each spice. For example after making tea Masala they will clean each machine. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  73. 73. 73 R. Quality control guidelines for raw material and finished products For raw material  For raw material quality control, first the company checks the quantity in which the order was being placed and is the product as per the order or not? And check list is being made.  In the 2nd stage company sends the raw material to the laboratory for the checking of quality.  At Dhanhar raw material samples are tested for multiple times, at every point of the supply chain to ensure the highest quality and product consistency. The Dhanhar Quality Assurance program consists of a fully-integrated QC lab which is complete with testing capabilities on chemical, micro/ macro-sanitary & microbiology parameters as well as Inspection standard.  Here Raw material is tested that if it of good quality or not and for how much time it is consumable. For finished goods  Before checking the quality of finished product it is checked that whether the weight of packging is proper or not.  Then after it is checked that for how much time product is consumable for example if Tea masala is consumable within 12 months of packaging and if the product made has expiry date before given then that production lot may be rejacted.  While checking the quality of Finished products, quality of packaging is also checked, here durability of packing and Labeling is checked. S. In process quality control guidelines  At Dhanhar in process quality control is checked in 3 steps which are as following 1. Quality control at cleaning stage: here in this stage company checks that whether raw material is properly cleaned or not. After Removing Dust & Stone it is checked that whether raw material is properly cleaned or not. Here this part is more important for ground nut spices. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  74. 74. 74 2. Quality control at grinding stage: here in this stage company checks that whether raw material is properly grinded or not. For example red chili powder is to be made then in this stage it is checked whether it is perfectly grinded and is in completely powder form and here it is also checked whether chili seeds are not there in the powder. 3. Quality control at Mixing stage: here in this stage company checks that whether raw material is properly mixed or not. for example in Shambhar Masala rock salt, cumin seed, ginger, dry mango, ajwian, chili, black salt, dry mango ,mint leaves, compounded asafetida, Citric Acid is mixed in proper quantity or not and it is checked through chemical process in the laboratory. T. Documents related to quality control 1. Finished product report 2. Raw material report 3. Packing material report 4. In process report 5. Re-test report 6. R.M. order sample record 7. Suggestion record 8. Complain record ( outside) 9. Release order record 10. Date stock registered. U. Different reports generated in production department 1. Material issue and receipt record 2. Stock register 3. Maintenance record 4. Machinery hour records 5. Quality control reports 6. Purchase and inquiry report BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  75. 75. 75 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  76. 76. 76 1. Detailed organization structure of finance department General Manager Head of Finance department Accountant Clerk Cashier o Here at Dhanhar finance department is being managed by head Mr. Hitesh o Accountant has to work under Mr. Hitesh o Clerk is at 3rd level in the hierarchy o Cashier is working under the head of a clerk. 2. Revenue Budgeting o Revenue budgeting plays an important role in every financial procedure. o In this company also, revenue budgets are prepared on the requirement basis. o In the first stage, sales plan are prepared from the entire marketing process. o From sales plan, production plans are prepared as to fulfill the customer requirement. o In the next stage, with the help of production plan, raw materials requirement are planned i.e. how much raw-materials are to be purchased from different dealers. o Estimation of labour hours is also done and estimated working days are considered and hence total employment cost are determined. o Lastly revenue budgets are prepared to estimate the entire financial flow of the company. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  77. 77. 77  The calculation of revenue budget is very easy to understand and calculate. We can simply calculate the revenue budget by deducting all the expenses of the company by all the incomes. If the revenues exceeds the expenses, that means company is in profit criteria and if the expenses exceeds the revenues, that means company is in loss criteria. The revenue budgeting process can be explained as following. sales plan by marketing department total expanses are estimeted total income is determined production plan estimeted cost of labour Incomeexpanses material requirnment planning purchase of raw material profit or loss 3. Costing methods  The methods to be used for the ascertainment of cost of production differ from industry to industry. It primarily depends upon the manufacturing process and also on the methods of measuring the departmental and finished products.  There are various methods of costing are as follows: 1. Unit costing 2. Job costing 3. Contract costing 4. Batch costing 5. Process costing 6. operation costing 7. Operating Costing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT

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