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A
PROJECT REPORT
ON
PURCHASE & PROCUREMENT
Project Report Submitted
To
ASHOK LEYLAND, ALWAR (HINDUJA GROUP)
For the fulfillment of summer training
Submitted by: Under the
Supervision of:
RAHUL UBANA Mr. VINEE!U"A
M.B.A#L.S.$.M% "UR$HASE
U.".E.S& 'EHRA'UN
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EXECUTIVE SUMMARY
My idea with this report is to make everything as simple as possible and somewhere I
had not deal with all the detailed parameters .The report is completed with the best of
all the knowledge gathered during this summer internship period
The report in general brief about the ASHO !"#!A$%& as a company which was
important to know.
'eing one the leading manufacturing company& different philosophies were practiced
which are briefed here.
In addition what different products are being manufactured and no of plant in India.
As far as pro(ect is concerned& procurement department personnel shared their views
and skills to know how ASHO !"#!A$% is doing material planning. )egarding
supply chain they want me to visit their subsidiary in person and to know what they
supply.
At last& there were some findings and suggestions.
I hope in future many discussions will be easier from this and I am really grateful to
everybody who had helped me to understand the whole production and logistics.
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CONTENTS
S.$O TO*I+ *A," $O.
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*")SO$$A! %"*TT
*2)+HAS" %"*TT
-/ MAT")IA! *!A$$I$,
-4 *)" %"!I3")# I$S*"+TIO$
-6 +2STOM") )"T"$TIO$
-7 0A#S TO )"TAI$ +2STOM")
-8 ""%'A+ )OM +2STOM")
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-: MO%2!"
-< ,)O0TH MI!"STO$"
/= *)O%2+T *)OI!"
*ASS"$,")
,OO%S
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/- A$+I!!A)# 2$ITS(JIT)
*)A'HA
SAS A2TO+AM
S2)I$
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/6 I$%I$,S
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SUMMER PROJECT REPORT- RAHUL UBANA MBA- 2011 Page 4
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I N TRODUCTION
Ashok !eyland is a well known automobile manufacturing company in India.
Ashok !e yl an d believes that its historical success and future prospects are
directly related to combination of strengths.
This pro(ect is titled as a study on *urchase department in Ashok !eyland and
tries to find out the different aspects of manufacturing process in the
company. The pro(ect was held at Alwar ?)a(.@& from - May to 4= 5une /==
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AB S TRACT
The report provides a consolidated preview of the *urchase activities of
Ashok !eyland& A l w a r 2nit .The referred unit is a core limb of Ashok!eyland& the nations pioneering automobile manufacturer. The core departments&
their primary functions are described in the report. Other special regulatory
functions like evaluation methods& employee benefit schemes have also been
covered.
The have aided the company in carving an eBcellent niche for itself in the
national and the international uniCue features and policies of the company& which
make it a leader without contention and arena& have also been referred.
OBJECTIVES O F THE STUDY
The ob(ectives of the study areD
To familiariEe with business organiEation.
,etting practical eBperience regarding the organiEational
function. To learn about the policies and functions of the
organiEation.
To understand the culture in the organiEation and its effect on
employees. To get industrial eBposure and eBperience.
To understand the production and marketing methods.
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METHOD O LOGY
This study was undertaken by undergoing a training program at Ashok !eyland
for a b ou t a f o rt ni g ht . The i n fo r ma t io n w as c o ll e ct e d b y
in te ract ing and interviewing with the concerned personnel of various
functional departments.
The methodology used for the study is through the collection of primary and
secondary data. *rimary data is collected through direct observation and live
discussion wit h th e ma nag ers and t he sta ff m ember s. Secondary da ta
is collected through Annual )eports& 'usiness 5ournals& and "Bisting )ecordsand also from the website of the company.
SC O PE O F T H E STUDY
The study is mainly based on the details collected from *urchase department.
It provides a better understanding at functional level of *urchase
department. It provides a better understanding at functional level of these
departments i.e. *urchase& Materials& and *roduction. "ach and every activity
of the company has been studied very carefully with the data available.
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COM P ANY P ROFILE
Ashok !eyland has been a ma(or presence in Indias commercial vehicle industry
since -
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haulage vehicles& from numerous special application vehicles to diesel engines for
Industrial& marine and genset applications& Ashok !eyland offers a wide range of
products.
Ashok !eyland has siB manufacturing plants F
"nnore *lant& +hennai.
Hosur *lants 2nit I& 2nit II and 2nit II A.
Alwa , R a!a"#$a % &
'handara& Maharashtra.
A new plant is to be set to be launched in 2ttaranchal at *ant $agar with a plant
capacity of 6= &=== commercial ve hic les . "arly products of Ashok !eyland
included the !eyland +omet bus chassis sold to many operators including
Hyderabad )oad Transport& Ahmedabad Municipality& Travancore State Transport&
'ombay State Transport and %elhi )oad Transport Authority.
In the popular metro cities& four out of five state transport undertaking buses come
from Ashok !eyland. Some of them like the %ouble %ecker and 3estibule buses
are uniCue models from Ashok !eyland& tailor made highFdensity routes.
Statistics reveal that the company is Indias largest eBporter of medium and heavy
duty trucks. It sells close to :4&=== medium and heavy vehicles each year. The
company has a near
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ORGAN I ' A TION STRUCTURE
In -
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0ith a commanding strength of the about -/&=== employees the company is
looking forwards to enhance the scope of its action. It is aiming at eBpanding its
production operation overseas to make it a more globally accessible company. It is
looking to acCuire a small to medium siEed commercial vehicle manufacturers in
+hina and other developing nations& which have an established product line. An
eBample would be the /==9 acCuisition of the +Eech based Avias truck business
rechristened Avia Ashok !eyland Motors.
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VISION
'e among the top Indian corporations acknowledged nationally and internationallyfor
F "Bcellence in Cuality of its products.
F "Bcellence in customer focus and service.
F
MIS S ION
'e a leader in the business of commercial vehicles& eBcelling in technology& Cuality
and value to customer fully supported by customer service of the highest order and
meeting national and international environmental and safety standards.
GEMBA
,emba is a 5apanese word meaning J)eal *laceK where the real action takes place.
In the manufacturing industry& there are 4 ma(or activities directly related to
earning money& developing& producing and selling products.
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GEMBA KAI'EN
Three ground rules for practicing kaiEen in ,emba.
-. House eeping
/. Muda "limination L0aste "limination
0aste of over production
0aste of inventory
0aste of waiting
0aste of Motion
0aste of transportation
0aste of *roducing )e(ects
0aste of processing
4. StandardiEation.
GEMBA MISSION
$iN-$ew 9 initiatives
-. Increase in the number of ,"M'A
/. 7s LS"I)I& S"ITO$& S"ISO& S"I"TS2& SHITS2"
4. ""I ?"ffort and "rgonomic indeB@
6. +MI ?+ost management initiative@
7. Inventory Initiative
8. +ritical machine uptime
9. >uality
:. Safety
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VENDO R OPPORTUNITIE S
Our 3endors are our valued partners in our business development and we shall
work with them in a spirit of mutual coFoperation to meet our business ob(ectives.
3endor %evelopment and Strategic Sourcing are handled by +orporate Materials
%epartment ?+M%@. +M% identifies the vendors& rates the vendors based on
feedback received from Supplier >uality Assurance +ell& sends drawings
specifications& calls for Cuotes with detailed breakFup of operationFwise costs& and
negotiates the price at which the parts will be supplied.
In addition to +M% at "nnore& and the two 2nits at Hosur& there are Materials
Management %epartments ?MM%s@ for scheduling based on unit production plan.
V%*+ Dl+-.%# +/ S#a#012 S+32"4
Strategic Sourcing is central to the integrated Materials Management function.
Ashok !eylandGs policy is to develop a vendor base committed to continuous
improvement to meet Cuality& cost and delivery standards.
Ashok !eyland considers its vendors as -a#%" 1% -+0"" and believes in
establishing mutually beneficial relationships. Ashok !eyland provides necessary
technical assistance in the form of *ro(ect and *roduction "ngineering& to maintain
Cuality levels. In addition& where reCuired& Ashok !eyland also helps vendors
financially.
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53al1/12a#1+% A%al6 " 1" 7 E823#1"
Ashok !eyland has a tieFup with 'ITS& *ilani for a customFdesigned& offFcampus
/Fyear MS course in "ngineering Management. Aimed at making Managers out of
"ngineers& assignments and pro(ects are central to the learning process thus
bridging the classroom with the engineersG workplace. rom /===& a 'S
programme in Industrial "ngineering and Technology& is offered for diploma
holders& again in collaboration with 'ITS. Apart from updating their knowledge
base& the programme empowers engineers to acCuire multiple skills.
Ashok !eyland is one of the moving forces behind an M.Tech course in
Automobile "ngine Technology (ointly managed by the automobile industry?Indian Society for Automotive Technology& made up of auto manufacturers@& IIT&
Madras and Institute ranPois du *etrol& the rench institute for I+ engines.
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ORGANISATION STRUCTIURE MA$A,I$, %I)"+TO)
"1"+2TI3" %I)"+TO)
S"$IO) %I)"+TO)
,"$")A! MA$A,")
%"*2T# ,"$")A! MA$A,")
ASST. ,"$")A! MA$A,")
%I3ISIO$A! MA$A,")
S"$IO) MA$A,")
MA$A,")
%"*2T# MA$A,")
ASST. MA$A,")
S"$IO) OI+")
OI+")
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D E P A R TMENT F UNC T IONS
The ma(or functional areas of the unit and the ma(or departments which oversee
those areas are catalogued as followsD
-. *ersonnel and Administration %epartment
/. *urchase Q Material *lanning %epartment
4. *roduction %epartment
6. inance %epartment
7. Systems %epartment
8. )esearch Q %evelopment.
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FMT
PERSONN E L 9 ADMINISTR A T ION
D-a#.%#al S#32#3
%,M
%I3ISIO$A
! MA$A,")
I)
Sr.
MA$A
,")
H)
M"%I+A
!
OI+"
)
+HI"
S"+2)IT#
OI+")
FMA$A,")F
%I3ISIO$A!
MA$A,")FASST.
MA$A,")
FOI+")S
FASST.
MA$A,")
FMT
FOI+")
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RECRUITM
ENT
)ecruitment is the process of Rfinding and attracting capableapplicants for employment. The process begins when new recruits are
sought and ends when their applications are submitted. The result is a pool
of applicants from which new employees are selected.
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TRAINING
Training is an onFgoing process aimed at capabilityFbuilding of the employees at
all levels. Training programme is classified into
Skills
nowledge
'ehavior
WORKMEN CAPABILITY BUILDING
Training Q %evelopment for the unioniEed employees at the manufacturing units
is focused on skill development. 'oth internal and eBternal training is given for
associates. ,uest lectures of eBternal faculty and various other industrial visits will
be arranged for associates. In addition to some programmes like engineering
drawing and waste elimination are also conducted.
DEVELOPMENT ACTIVITIES
The following are the developmental activitiesD
T"I Total "mployee Involvement
+, +ross unctional ,roup
>+ >uality +ontrol
SS Suggestion Scheme
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E.-l+6 wl/a "2$."
The following are the welfare schemes available to the employees.
+ a n t e e n facilities
M e d i c a l claims
T r a n s p o r t facilities
A s h o k !eyland School for their children
S c h o la rs h ip schemes
) e c r e a t i o n facilities
PERFORMANCE APPRAISAL
R*erformance appraisal is an ob(ective assessment of an individuals performance
against well defined benchmarks. The performance appraisal method followed is
based on the Superior subordinate relationship& whereby the superiors rate their
subordinates. They are rated on the basis of their performance.
CORPORATE SOCIAL RESPONSIBILITY
% o n a t i o n s
+ a r e e r guidance
A I % S awareness
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PURCHASE 9 M A TERIAL PLANNING
or a manufacturing company to produce end items to meet demand the
availability of sufficient production capacity must be coFordinate with the
availability of raw materials and purchased items from which the end items are to
be produced. The following are the system which is followed to procure materialsD
F5IT
F!+!
FM)*
F3MI
FA$'A$
JIT
It is an approach than seeks to eliminate all source of waste in production
activities by providing the right part at the right place at right time .5IT encompasis
the successful eBecution of all manufacturing activity reCuired to produce a final
product from design to delivery and including all stages of conversion from raw
materials onwards.
PURPOSE OF JIT
Fhave only the reCuired inventory need
Fimprove Cuality to Eero defects
Fto reduce lead time
Fto incrementally revise the operations themselves and to accomplish these
things at minimum cost.
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LOW COST LOGISTICS (LCL)
!+! Includes materials such as bolts nuts etc. these are purchased in bulk and
they are used for production. They dont affect the inventory cost.
MATERIAL RE5UIREMENT PLANNING
Material is a techniCue for determining the Cuantity and timing for the
acCuisition of dependent items needed to satisfy master schedule reCuirements
Manufacturing of the specific
An alternative approach to managing dependent demand items is planned for
*rocurement or components that will be reCuired to produce the reCuired
Cuantities of end production schedule indicated by the master production schedule.
BILL OF MATEIALS
The parts components reCuirements of the final product which is to be
manufactured is usually presented in the form of a product structurebill of
materials. it is a listing of all components that go into an assembled item. It
freCuently includes the part number and Cuantity reCuired per assembly.
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KANBAN
The kanban system is a signal proofing. the firm stores their materials and other
inventory item in a signal use contains that holds a specific amounts of material or
other inventory part that are used to manufacture the product. when the material in
a container is depleted& a A$'A$ that defines reCuirements of inventory items
to continue the production process is kept in the container.
PDI (PRE DELIVERY INSPECTION)
Testing of vehicle on real road conditions
The following are the various tests done to test the vehicleD
-. Speed test
/. Acceleration test
4. 3ibration test
6. TorCue tightening
7. Oil level and water level checking
8. "lectrical components checking
9. Air leakage test
:. ,rease level checking
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CUSTOMER RETENTION4
It represents the activities that produce the necessary customer satisfaction that
creates customer loyalty& which actually improves the bottom line. It moves
+ustomer satisfaction to the neBt level by determining what is truly important
to the customers and making sure that the customer satisfaction system focuses
valuable resources things that really matter to the customer. It is the connection
between customer satisfaction and the bottom line.
WAYS TO RETAIN CUSTOMERS4
The following are the various ways followed here to retain their customers
-. 0arranty eBpenditure measure
/. %ealers conference
4. +ustomer visits
6. Monthly plant Cuality review
FEEDBACK FROM CUSTOMERS4
eedback is collected from the customers regarding Cuality through the
following ways.
o +ustomer visits
o TollFfree telephone number
o +omment card
o )eport card
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IM*!"M"$T
PROBL EM SOLVING ME THOD
I%"$TI# TH" O**2)T2$IT#
*!A$ O) TH"2T2)"
A$A!#S" TH"
*)O+"SS
A+T
*!A$
STA$%A)%I;" TH"
SO!2TIO$
ST2%#%O %"3"!O* TH" O*TIMA!
SO!2TIO$
ST2%#
TH"
)"S2!TS
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MODU L ES USED INSIDE THE COM P AN Y
A+! F Access +ontrol Module
'OM F 'ill of Material
M*! F Material *lanning
S%' F Supplier %atabase
*OS F *urchase Order System
I*S F Inspection *lanning Sheet
I$0 F In warding
5IT F 5ust In Time items
!+! F !ow +ost !ogistics Items
M)M F Sun +ontractor Material Issues
MT$ F Sub +ontractor Material Transfer
3>) F 3endor >uality rating
3%* F 3endor %elivery *erformance
ST F Stock Inventory
+*M F +omprehensive *rocess Master
**! F *roduction *lanning
S+ F Shop loor +ontrol
2*5 F 2nplanned 5obs
2)%+ F Inter 2nits )eceipt Q %ispatch
"1S F "Bcise
*S! F *riced Stored !edger
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0M+ F 0orks Made Items +osting
3+S F 3ehicle +osting System
S+! F Sub +ontract !edger
)M,* )eturnable Material ,ate pass
$)M,* $on )M,*
,+S ,auge +alibration System
+S +hassis inal Specification
!TMS !ean Tool Management System
AMTF automated manual transmission
GROWTH MILES T O N ES OF A SHOK L EYLAND
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-
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PRODUCT PROFILE
Ashok !eyland offers a comprehensive product range with trucks from 9.7 tons
,30 to -/7 tons ,30. rom -< to := seaters a host of special applicationvehicles and diesel engines from industrial gensets and marine application.
*roduct profile can be broadly split into siB categories viE. passenger& goods&
cargo& heavies& special 3ehicles and "ngines.
PASSENGER
I+3 3iking MO3+heetah 3iking Hino 3iking A!)ear "ngine 'us 3estibule 'us *anther+ruiser +$, 'us 3ikingSuper %ouble %ecker
GOODS
Haulage +omet 'ison
Tipper Taurus 816 Tractor+omet /8-6 Tusker 47-8 Multi ABle TuskerCARGO
!+3 Haulage +argo
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S2**!I") O
;&PIPES
2I)M"$TF
;.-7= !OO) A**)O1.
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S2**!I") O
;&ENGINE COWL(INSIDE COVER HOOD)
2I)"M"$TF47= TO 6==
%AI!#F-7 TO -:avg.
Month)y s*hedu)e#)e(d time%
A!AD*2)DSD
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22.06.2010
M>" Sa%*$a
E.a1l A**"" 4 "a%*-&?3.a@"l*l&2+. "-?@"l*l&2+.
Kind Attn: Mr. Sandeep
Our confirm reCuirement for the month of 5uly-= and Tentative reCuirement for the month of
Aug-= is as given below.
S.
No. "(rt No. 'es*ription 6u)y89 Au+89
1 F8254500 SINGLE WIDE MIRROR 1600 1300
2 F8068100
RR VIEW MIRROR-EXPORTS
Rh 3500
Lh - 3500 7000 1600
#ou are reCuested to arrange to dispatch material as per following weekly plan.
S
No "(rt No. 'es*ription
6u)y89
;
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FIND I NGS
-. In this organiEation there is no fleBible manufacturing system.
/. There is no effective utiliEation of Human )esources.
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4. To solve their work related problems >++ ?>uality +ontrol +ircle@ and
cross functiona l team are mad e e ffect ive. 0ork instruct ions&
s tandard operating procedures& inspection reports& >+ chart are effective.
SUGGESTIONS
-. The company should earmark more money for the advertisement and sales
promotion of its products. It helps to increase the brand awareness and
image.
/. The company should concentrate on markets in the international arena where
its competitors are less powerful.
4. +omplaints should be rectified in the shortest possible time. or this a
customer satisfaction cell should be organiEed
.
CONCLU S ION
Ashok !eyland is a well known automobile manufacturing company
in India. In Alwar there is a well planned organiEation structure being
followed. There is a well integration of all the functional departments
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which facilitates the use of software like ")*. )etention of the talented
people is essential as they contribute a lot to success of the organiEation.
The catalogued training programme and the resulted report have beenof great help to me& an aspirant manager& to understand the functioning of a
ma(or establishment like Ashok !eyland. The training programme has
also revealed ma ny unknown facts about the working of a manufacturing
unit.
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BIBLIOGRAPHY
-. !ogistics and supply chain managementF 'y Martin +hristopher
/. +ompany Manual& Ashok !eyland !td.&Alwar
4. Supply Chain ManagementD Strategy& *lanning and operations by Sunil Chopra ,Peter Meindl, D.. Kalrapublished by *earson "ducation&Inc.&/==8
6. www.Ashok !eyland !td.com
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