bvc 1-3 chapter

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CHAPTER-I

COST CONTROL AND COST REDUCTION IN LOGISTICS SECTOR

INTRODUCTION-

Logistics management is that part of the spp!" chain #hich p!ans$ imp!ements an%

contro!s the efficient$ effecti&e for#ar% an% re&erse f!o# an% storage of goo%s$ ser&ices

an% information 'et#een the point of origin an% the point of consmption in or%er to meet

cstomers( re)irements* To ha&e a thorogh n%erstan%ing of ho# !ogistics in%stries

#or+* To +no# #hether the cstomers are satisfie% #ith the e,isting range of ser&ice

pattern** Logistics in&o!&e the integration of information$ transportation$ an% in&entor"$

#arehosing$ materia!-han%!ing an% pac+aging* To e,amine the economic one%e&e!opment for Logistics in%str"* To st%" the ro!e of g!o'a! .PL ser&ice pro&i%ers in

In%ia *A professiona! #or+ing in the fie!% of !ogistics management is ca!!e% a !ogistician*

Meaning of Logistics:

The term /!ogistics/ originates from the ancient Gree+ /01234/ 5/!ogos/6/ratio$ #or%$

ca!c!ation$ reason$ speech$ oration/7* In ancient Gree+$ Roman an% 8"antine empires$ there

#ere mi!itar" officers #ith the tit!e 9Logisti+as: #ho #ere responsi'!e for financia!management an% %istri'tion of spp!ies*

Definition of Logistics:

The process of p!anning$ imp!ementing$ an% contro!!ing the efficient$ cost effecti&e f!o# an%

storage of ra# materia!s$ in-process in&entor"$ finishe% goo%s an% re!ate% information from

point of origin to point of consmption for the prpose of meeting cstomer re)irements*

OVERVIEW OF LOGISTICS INDUSTRY:

Logistics$ as a 'siness concept$ e&o!&e% on!" in the ;s* This #as main!" %e to the

increasing comp!e,it" of spp!"ing one(s 'siness #ith materia!s$ an% shipping ot pro%cts

in an increasing!" g!o'a!ie% spp!" chain$ ca!!ing for e,perts in the fie!% #ho are ca!!e%

Spp!" Chain Logisticians* This can 'e %efine% as ha&ing the right item in the right )antit"


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at the right time at the right p!ace for the right price an% to the right target cstomers

5consmer7? an% it is the science of process ha&ing its presence in a!! sectors of the in%str"*

The goa! of !ogistics #or+ is to manage the frition of pro@ect !ife c"c!es$ spp!" chains an%

res!tant efficiencies* Logistics is concerne% #ith getting 5or transmitting7 the pro%cts an%

ser&ices #here the" are nee%e% or #hen the" are %esire%* It is %iffic!t to accomp!ish an"

mar+eting or manfactring #ithot !ogistica! spport*

Obecti!e of Logistics Manage"ent:

The primar" o'@ecti&e of !ogistics management is to effecti&e!" an% efficient!" mo&e the

spp!" chain so as to e,ten% the %esire% !e&e! of cstomer ser&ice at the !east cost* Spp!ies*

These can 'e %escri'e% as fo!!o#s

#$ I"%&o!ing c'sto"e& se&!ice:

An important o'@ecti&e of a!! mar+eting efforts$ inc!%ing the ph"sica! %istri'tion acti&ities$

is to impro&e the cstomer ser&ice*

($ Ra%i) Res%onse:Rapi% response is concerne% #ith a firm(s a'i!it" to satisf" cstomer ser&ice re)irements in a

time!" manner* Information techno!og" has increase% the capa'i!it" to postpone !ogistica!

operations to the !atest possi'!e time an% then accomp!ish rapi% %e!i&er" of re)ire%

in&entor"*

*$ Re)'ce tota+ )ist&ib'tion costs:

The cost of ph"sica! %istri'tion consists of &arios e!ements sch as transportation$

#arehosing an% in&entor" maintenance$ an% an" re%ction in the cost of one e!ement ma"

res!t in an increase in the cost of the other e!ements**

,$ Gene&ating a))itiona+ sa+es:

A firm can attract a%%itiona! cstomers '" offering 'etter ser&ices at !o#est prices* Bor

e,amp!e$ '" %ecentra!iing its #arehosing operations or '" sing economic an% efficient

mo%es of transportation$ a firm can achie&e !arger mar+et share*


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Significant of +ogistics in)'st&3:

To%a":s organiations #or!%#i%e nee% !ogistics management more than e&er 'ecase of fo!!o#ing

;7 Competiti&e pressre F7 information techno!og" .7 channe! po#er an% 7 profit

!e&erage*

#5 Co"%etiti!e %&ess'&e %ring the ;s* Logistics recei&e% more attention as a ma@or

cost %ri&er to offset the effects of rising interest rates an% increasing energ" costs* In a%%ition

the !ogistics cost 'ecame more critica! for man" m!tinationa! companies 'ecase of

g!o'a!iation of their 'siness* These %e&e!opments affecte% !ogistics primari!" in t#o #a"s

I* The gro#th of #or!% c!ass competitors #hich has pressrie% organiation to %ifferentiate

themse!&es an% their pro%ct offerings* Logistics ena'!e %omestic firms to pro&i%e more

re!ia'!e an% responsi&e ser&ices to cstomers in the !oca! mar+ets than o&erseas competitors*

II*As firms increasing!" '" an% se!! off-shore$ the spp!" chain 'et#een the manfactring

firm an% its spp!ier an% cstomer firms 'ecome !onger$ cost!ier an% more comp!e,* Hence

in sch sitation$ e,ce!!ent !ogistics is necessar" to ta+e a%&antage of g!o'a! opportnities*

(5 INFORM6TION TEC7NOLOGY: #ith the e,p!osion of information techno!og"$

organiation gaine% the a'i!it" to 'etter monitor transaction intensi&e acti&ities sch as

or%ering$ transportation an% storage of goo%s an% materia!s* Compterie% )antitati&e

mo%e!s a!ong #ith techno!og" increase% the a'i!it" to manage materia! f!o#s an% optimie

in&entor" !e&e!s an% mo&ements* Bor e,amp!e$ s"stems sch as materia! re)irement

p!anning 5RP ;7$ %istri'tion resorces p!anning 5DRP7 an% @st-in-time 5IT7 a!!o#e%

firms to !in+ man" acti&ities sch as or%er processing$ in&entor" management$ forecasting

an% pro%ction sche%!ing*

*5 C76NNEL /OWER: the channe! po#er shifte% from manfactrers to #ho!esa!ers$

%istri'tors an% retai!ers* This has ha% a great impact on !ogistics* In ma@or consmer goo%s

in%stries$ #hen competition increases$ man" spp!iers an% manfactrers are force% ot of

competition an% a fe# !ea%ing? competitors remain in the mar+et* In the &ie#s of consmers$

a!! of the !ea%ing 'ran%s are s'stitte for each other an% !o#er 'ran% !o"a!t" %ecreases the


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manfactrer:s po#er* U!timate!" sa!es of consmer pro%cts are %etermine% '" #hat is in

stoc+$ an% not '" #hat partic!ar 'ran% offere% to the cstomers*

4) /ROFIT LEVER6GE: An" amont of mone" sa&e% in !ogistics costs has greater

impact on the organiations profita'i!it" than a simi!ar increase in sa!es re&ene consi%era'!"

'ecase profit earne% throgh sa!es is on!" a sma!! percent of sa!es re&ene* Hence$ a rpee

sa&e% in !ogistics is a rpee increase in the compan":s profit*

Growth and development of Indian logistics:

ith the gro#th of the in%stries there #as the 'oom in the !ogistics sector Open mar+et a!so

open the opportnit" for !ogistics in%stries to gro# an% 'oom itse!f* Logistics ca!! for an

n%erstan%ing of the tota! spp!" chain$ the e!ements of #hich inc!%e in&entories$ pac+ing$

for#ar%ing$ freight$ storage an% han%!ing* Logistics is responsi'!e for a!! the mo&ement that

ta+es p!ace #ithin the organiation #hether it is in'on% !ogistics of incoming$ ra# materia!s

or mo&ement #ithin the compan" or the ph"sica! %istri'tion of finishe% goo%s$ !ogistics

encompasses a!! of these*

T"pica! !ogistics frame#or+ main!" consists of Ph"sica! Spp!"$ Interna! Operations an%

Ph"sica! Distri'tion of Goo%s an% Ser&ices* To pt it more simp!"$ the materia! spp!"

!ogistics starts from the 'ase !e&e! of Jgeneration of the %eman%K$ throgh the Jprocess of

prchaseK an% Jspp!" of materia! from the &en%orK right throgh to Jfina! acceptanceK an%

Jpa"ments to the spp!ierK an% Jisse to the in%enterK an% has to 'e consi%ere% as a Jone

#ho!e acti&it"K #ith each stage ha&ing an impact on pricecost of materia! spp!"$ Logistics

is$ in itse!f$ a s"stem? it is a net#or+ of re!ate% acti&ities #ith the prpose of managing the

or%er!" f!o# of materia! an% personne! #ithin the !ogistics channe!*

FUTURE C76LLENGES 6ND TRENDS OF LOGISTICS INDUSTRY:-

RECENT TRENDS IN INDI6N LOGISTICS INDUSTRY:


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hen comparing US !ogistics #ith the g!o'a! !ogistics it acconts USM> 'i!!ion

#hich is &a!e% F= of tota! g!o'a! !ogistics .*=USM tri!!ion* hereas In%ia is

estimate% to 'e aron% ;. of its GDP$ #hich is &a!e% aron% USM*F of the GDP +eeping the prices constant

5; #here as

internationa! cargo traffic has 'een mo&ing at ;.* Accor%ing to the p!anning

commission$ contr":s cargo mo&ement #o!% gro# a'ot CAGR of ;;*= from

F>>-> to F>;.-;* arine sector contri'tes o&er >*F of the GDP at a constant prices5;


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Unfair competitions

Unorganise% p!a"ers get a#a" #ithot pa"ing

ta,es* Don:t fo!!o# the operating norms stip!ate%

in the motor &ehic!e act sch as )a!it" of

%ri&ers$ &ehic!e$ an% &o!me an% #eight

restriction*

So!tion opportnit"

Imp!ies that a trc+ !oa% !oss of goo%s is

a!#a"s ron% the corner* Organie%

p!a"ers can cash in '" pro&i%ing there)isites !e&e! of safet" an% insrance

co&er for goo%s*

Diseconomies of sca!e

Differentia! sa!es ta, strctre in %ifferent

states*

Apart from non- niform LSPS 5!ogisticser&ice pro&i%er7 ha&e to pa" other +in%s of

ta,es !i+e octrois* Go&ernments fai!re in imp!ementation of

QAT since ; Apri! F>>=*

So!tion opportnit"

Proposa! for imp!ementation of GST*

ith niform ta,ation across a!! states

companies co!% focs on spp!" chainefficienc" rather ta, a&oi%ance

optimiations*

Bace m!tip!e chec+ post

This %e!a"s the process of %e!i&er"*

Comp!iance #ith &ar"ing %ocmentation

re)irements of %ifferent states is certain!" a%iffic!t"*

So!tion opportnit"

Integration of IT into the process !i+e EDI

co!% great!" spee% p the #ho!e process

an% 'ring in the re)ire% efficienc"*

Lo# IT penetrations

Lac+ of commnication infrastrctre*

Lac+ of &isi'i!it"*

Lac+ of rea! time trac+ing a'i!it"*

So!tion opportnit"

Penetration of .PL p!a"ers an% high !e&e!

of in&estments into techno!og" !i+e GPRS

#o!% change the scenario*

High!" fragmente% sectors LSP:s stic+ to their 'asic ser&ices*

So!tion opportnit" Qa!e a%%e% ser&ices pro&i%e a great

opportnit" to increase the margins*

INTRODUCTION:


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Acconting is the 9:recor%ing an% reporting of transaction::* It recor%s the %a" to %a" e&ents

re!ating to 'siness in terms of mone" in &arios 'oo+s of acconts a%%itiona!!"* It

commnicates the res!ts of 'siness operation to management$ shareho!%er$ cre%itors$ 'an+s$

an% financia! instittions etc* as a !angage of 'siness acconting ser&es as an important

means of commnication 'et#een the 'siness an% its constitent part* The princip!es of

o'@ecti&es of acconting are to pro&i%e information to ser to ma+e re!e&ant %ecisions an%

forms @%gments*

DEFINITION 6ND ME6NING OF 6COUNTING

THE AERICAN INSTITUTE OB CERTIBIED PU8LIC ACCOUNTS 9:has %efine%

acconting as the art of recor%ing$ c!assif"ing$ an% smmarising* In a significant manner an%

in terms of mone"$ transactions an% e&ents #hich are in part at !east of a financia! character

an% interpreting the res!ts there of*::

In short acconting is i%entif"ing$ measring$ recor%ing$ c!assif"ing smmarising 'siness

transactions ana!"sing an% interpreting the res!ts there of$ an% commnicating the res!ts of

the interpretation to the en% sers for %ecision ma+ing*

Obecti!e of 6cco'nting:

O'@ecti&e of acconting ma" %iffer from 'siness to 'siness %epen%ing pon

Their specific re)irements* Ho#e&er$ the fo!!o#ing are the genera! o'@ecti&es of

Acconting*

i7 To 9ee%ing s3ste"atic &eco&) It is &er" %iffic!t to remem'er a!! the 'siness

transactions that ta+e p!ace* Acconting ser&es this prpose of recor% +eeping '"

prompt!" recor%ing a!! the 'siness transactions in the 'oo+s of accont*

ii7 To asce&tain t8e &es'+ts of t8e o%e&ation Acconting he!ps in ascertaining res!ts

i*e*$ profit earne% or !oss sffere% in 'siness %ring a partic!ar Perio%* Bor this

prpose$ a 'siness entit" prepares either a Tra%ing an% Profit an% Loss accont or

an Income an% E,pen%itre accont #hich sho#s the profit or !oss of the 'siness

'" matching the items of re&ene an% e,pen%itre of the same perio%*

iii7 To asce&tain t8e financia+ %osition of t8e b'siness In a%%ition to profit a 'sinessman mst +no# his financia! position i*e*$ a&ai!a'i!it" of cash$ position of Assets an%


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!ia'i!ities etc* This he!ps the 'sinessman to +no# his financia! strength* Binancia! statements

are 'arometers of hea!th of a 'siness entit"*

i&7 To %o&t&a3 t8e +i'i)it3 %osition: Binancia! reporting sho!% pro&i%e Information a'ot

ho# an enterprise o'tains an% spen%s cash$ a'ot its 'orro#ing an% Repa"ment of 'orro#ing$

a'ot its capita! transactions$ cash %i&i%en%s an% other Distri'tions of resorces '" the

enterprise to o#ners an% a'ot other factors that ma" Affect an enterprise:s !i)i%it" an%

so!&enc"*

&5 To %&otect b'siness %&o%e&ties: Acconting pro&i%es p to %ate Information a'ot the

&arios assets that the firm possesses an% the !ia'i!ities the firm O#es$ so that no'o%" can

c!aim a pa"ment #hich is not %e to him*

&i5 To faci+itate &ationa+ )ecision ma+ing: Acconting recor%s an% financia! statements

pro&i%e financia! information #hich he!ps the 'siness in ma+ing Rationa! %ecisions a'ot

the steps to 'e ta+en in respect of &arios aspects of 'siness*

&ii7 To satisf3 t8e &e'i&e"ents of +a;: Entities sch as companies$ societies$

P'!ic trsts are comp!sori!" re)ire% to maintain acconts as per the !a# go&erning

Their operations sch as the Companies Act$ Societies Act$ an% P'!ic Trst Act etc*

aintenance of acconts is a!so comp!sor" n%er the Sa!es Ta, Act an% Income Ta,

Act*

I"%o&tance of 6cco'nting:

i7 O;ne&s The o#ners pro&i%e fn%s or capita! for the organiation* The" Possess criosit"

in +no#ing #hether the 'siness is 'eing con%cte% on son% !ines or not an% #hether the

capita! is 'eing emp!o"e% proper!" or not* O#ners$ 'eing 8sinessmen$ a!#a"s +eep an e"e

on the retrns from the in&estment* Comparing the Acconts of &arios "ears he!ps in getting

goo% pieces of information*

ii7 Manage"ent: The management of the 'siness is great!" intereste% in +no#ing the

position of the firm* The acconts are the 'asis$ the management can St%" the merits an%

%emerits of the 'siness acti&it"* Ths$ the management is Intereste% in financia! acconting

to fin% #hether the 'siness carrie% on is profita'!e or not* The financia! acconting is the


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Je"es an% ears of management an% faci!itates in %ra#ing ftre corse of action$ frther

e,pansion etc*K

iii7 C&e)ito&s: Cre%itors are the persons #ho spp!" goo%s on cre%it$ or 8an+ers or

!en%ers of mone"* It is sa! that these grops are intereste% to +no# the financia!

son%ness 'efore granting cre%it* The progress an% prosperit" of the firm$ t#o #hich

cre%its are e,ten%e%$ are !arge!" #atche% '" cre%itors from the point of Qie# of

secrit" an% frther cre%it* Profit an% Loss Accont an% 8a!ance Sheet are Ner&e

centres to +no# the son%ness of the firm*

i&5 E"%+o3ees: Pa"ment of 'ons %epen%s pon the sie of profit earne% '" the firm* The

more important point is that the #or+ers e,pect reg!ar income for the 8rea%* The %eman%

for #age rise$ 'ons$ 'etter #or+ing con%itions etc* %epen% pon the profita'i!it" of the firm

an% in trn %epen%s pon financia! position* Bor these Reasons$ this grop is intereste% in

acconting*

&7 In!esto&s: The prospecti&e in&estors$ #ho #ant to in&est their mone" in a Birm$ of corse

#ish to see the progress an% prosperit" of the firm$ 'efore in&esting their amont$ '" going

throgh the financia! statements of the firm* This is to safegar% the in&estment* Bor this$ this

grop is eager to go throgh the acconting this ena'!es them to +no# the safet" of

in&estment*

&i5 Go!e&n"ent: Go&ernment +eeps a c!ose #atch on the firms #hich "ie!% Goo% amont of

profits* The state an% centra! Go&ernments are intereste% in the financia! statements to +no#

the earnings for the prpose of ta,ation* To compi!e Nationa! acconting is essentia!*

&ii5 Cons'"e&s: These grops are intereste% in getting the goo%s at re%ce% Price* Therefore$

the" #ish to +no# the esta'!ishment of a proper acconting contro!$ #hich in trn #i!! re%ce

to cost of pro%ction$ in trn fe#er prices to 'e pai% '" the Consmers* Researchers are a!so

intereste% in acconting for interpretation*

&iii7 Resea&c8 Sc8o+a&s Acconting information$ 'eing a mirror of the financia!

performance of a 'siness organiation$ is of immense &a!e to the research Scho!ar #ho

#ants to ma+e a st%" into the financia! operations of a partic!ar firm* To ma+e a st%" into


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the financia! operations of a partic!ar firm$ the research scho!ar nee%s %etai!e% acconting

information re!ating to prchases$ sa!es$ e,penses$ cost of ateria!s se%$ crrent assets$

crrent !ia'i!ities$ fi,e% assets$ !ong-term !ia'i!ities an% Share-ho!%ers fn%s #hich is

a&ai!a'!e in the acconting recor% maintaine% '" the Birm*

F'nctions of 6cco'nting

i7 Reco&)


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ii7 It gi&es information a'ot the profit or !oss ma%e '" the 'siness at the C!ose of a "ear an%

its financia! con%itions* The 'asic fnction of Acconting is to spp!" meaningf!

information a'ot the financia! Acti&ities of the 'siness to the o#ners an% the managers*

iii7 It pro&i%es sef! information from ma+ing economic %ecisions*

&7 It faci!itates comparati&e st%" of crrent "ear:s profit$ sa!es$ e,pense etc*$ #ith

those of the pre&ios "ears*

&7 It spp!ies information sef! in @%ging the management:s a'i!it" to ti!ise enterprise

resorces effecti&e!" in achie&ing primar" enterprise goa!s*

&i7 It pro&i%es sers #ith facta! an% interpreti&e information a'ot Transactions an% other

e&ents #hich are sef! for pre%icting$ comparing an% e&a!ation the enterprise:s earning

po#er*

&ii7 It he!ps in comp!"ing #ith certain !ega! forma!ities !i+e fi!ing of income ta, an% sa!es-ta,

retrns* If the acconts are proper!" maintaine%$ the Assessment of ta,es is great!" faci!itate%*

Li"itations of 6cco'nting:

i7 Acconting is historica! in natre It %oes not ref!ect the crrent financia! position of the

firm or the 'siness*

ii7 Transactions of non-monetar" matre %o not fin% p!ace in acconting* Acconting is

!imite% to monetar" transactions on!"* It e,c!%es a!itati&e e!ements !i+e management$

reptation$ emp!o"ee mora!e$ La'or stri+e etc*

iii7 Bacts recor%e% in financia! statements are great!" inf!ence% '" Acconting con&entions

an% persona! @%gements of the Accontant or anagement* Qa!ation of in&entor"$ pro&ision

for %o'tf! %e'ts an% Assmption a'ot sef! !ife of an asset ma"$ therefore$ %iffer from

one 8siness hose to another*


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i&7 Acconting princip!es are not static or nchanging-a!ternati&e Acconting proce%res are

often e)a!!" accepta'!e* Therefore$ Acconting statements %o not a!#a"s present compara'!e

%ata*

&7 Cost concept is fon% in acconting* Price changes are not consi%ere%* one" &a!e is

'on% to change often from time to time*

&i7 Acconting statements %o not sho# the impact of inf!ation*

&ii7 The acconting statements %o not ref!ect those increases in net asset Qa!es that are not

consi%ere% rea!ie%*

=R6NC7ES OF 6CCOUNTING:

8roa%!" spea+ing there are three 'ranches of acconting*

i7 Binancia! acconting

ii7 Cost acconting

iii7 anagement acconting

Financia+ 6cco'nting

Binancia! acconting is the acconting for re&ene e,penses$ assets an% !ia'i!ities that is

common!"$ carrie% on in the genera! office of a 'siness* It is the recor%ing of 'siness

transaction in the prpose of presenting res!ts to 'oar% of %irectors$ shareho!%ers etc*

Cost 6cco'nting:

Cost acconting is %efine% as the Jprocess of acconting for cost from the point at #hich

e,penses in incrre% or committe% to the esta'!ishment of its !timate re!ationship #ith cost

centres an% cost nit*K

Manage"ent 6cco'nting:

anagement acconting presents acconting information in sch a #a" as to assist

management in the creation of po!ic" an% in the %a" to %a" operations of an n%erta+ing*


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anagement acconting is that portion of acconting #hich attempts to spp!" management

#ith )antitati&e information as 'asis for %ecisions*

Cost:

It is the sm of the tota! of a!! the e,pen%itre in pro%cing an% se!!ing a pro%ct i*e* ca!!e%

cost*

The American acconting association as Jthe foregoing in monetar" terms$ incrre% or

potentia!!" to 'e incrrent in the rea!iation of the o'@ecti&e of management #hich ma"

manfactring of a cost or ren%ering of a ser&icesK*

Costing: The costing termino!og" of C*I**A*$ Lon%on %efines costing as the Jthe techni)es

an% processes of ascertaining costsK*

Cost acco'ntanc3

Cost acconting is %efine% as the app!ication of costing an% cost acconting princip!e$

metho%s an% techni)es to the sciences art an% practice of cost contro! an% the ascertainmentof profita'i!it"*

Obecti!es of Cost 6cco'nting

The main o'@ecti&es of cost acconting can 'e smmarie% as fo!!o#s*

;* To st%"$ ana!"e an% c!assif" a!! e,pen%itre #ith reference to the cost of pro%cts an%

Operations*

F* To ascertain the tota! an% nit cost per nit cost of commo%it" pro%ce%$ #or+ performe%

an% ser&ice ren%ere%*

.* To ascertain the profita'i!it" of %ifferent pro%cts$ @o's or #or+ or%ers*

* To pro&i%e %ata for perio%ica! profit an% !oss acconts an% 'a!ance sheets at sch inter&a!s$


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E*g* #ee+!"$ month!" or )arter!" as ma" 'e %esire% '" the management %ring the financia!

"ear$ not on!" for the #ho!e 'siness 't a!so '" %epartments or in%i&i%a! pro%cts*

=* To e,ercise effecti&e contro! o&er #astage an% !oss of materia!s %ring pro%ction*

* To pro&i%e acta! figres of costs for comparison #ith estimates an% to ser&e as a gi%e for

Btre estimates or )otations an% to assist the management in their price fi,ing po!ic"*

* The pro&i%e means to measre the efficienc" of !a'or*

* To e,ercise effecti&e contro! on the i%!e time of #or+ers an% machine*

6)!antages of cost acco'nting:

5a7 =enefits to t8e Manage"ent: The information re&ea!e% '" cost acconting aims at

main!" assisting the management in %ecision ma+ing an% optimiing profits* 8esi%es this

there are certain a%&antages of cost acconting to the management i*e* it he!ps in price

fi,ation$ in re&ea!ing profita'!e an% nprofita'!e acti&ities$ i%!e capacit"$ in contro!!ing cost

an% a!so he!ps in in&entor" contro!*

5'5 =enefits to t8e E"%+o3ees Cost acconting intro%ces #age scheme$ 'ons to the

efficient sincere emp!o"ees #hich in trn increasing pro%cti&it"$ profita'i!it" an%

!o#ering cost*

5c7 =enefits to C&e)ito&s: The 'etter management of finance throgh cost acconting !ea%s

to time!" De't ser&icing '" compan" in the form of repa"ment of !oan an% pa"ment of

interest* To sta" an% gro# in competition an% for @%ging son%ness of present an%

perspecti&e 'orro#er an% cost reports gi&e 'etter pictre of efficienc" profit prospects an%

capacit"*

5%7 =enefits to t8e Go!e&n"ent Cost acconting ena'!es the Go&t* to prepare p!ans for

economic De&e!opment of the contr"$ to ma+e po!icies regar%ing ta,ation$ e,cise %t"$

e,port$ price$ cei!ing$ granting s'si%" etc*


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5e7 =enefits to Cons'"e&s>/'b+ic Cost acconting he!ps consmers in getting goo%s of

'etter )a!it" at reasona'!e price*

Disa)!antage of cost acco'nting:

Cost acconting has certain !imitations*

8ase% on estimates in%irect costs are not charge% f!!" to a pro%ct or process* It is

charge% to a!! the pro%cts an% processes on the 'asis of estimate*

Lac+ of niformit" proce%res of acconting fo!!o#e% '" %ifferent organiation are

%ifferent pro%cts* There is no niformit"* There is a!so possi'i!it" of %ifference in

pricing materia! isses for pro%ction* A!! these !ea% to %ifferent cost res!ts for the

same operation*

E,pensi&e cost acconting is e,pensi&e* It in&o!&es !ots of c!erica! #on for

maintaining &arios costing recor%s for %ifferent prposes*

Not an e,act science !i+e other acconting s"stem$ it is not an e,act science 't an art

has %e&e!ope% throgh theories an% practices*

Does not inc!%e a!! items of e,pense s an% income Items are pre!" financia! natre

sch as interest$ financia! charges$ %iscont an% !oss on isse of shares an% %e'entre$

etc*are not ta+en into consi%eration in cost acconting*

INTRODUCTION OF COST CONTROL-

Cost contro! o'@ecti&e refers to the process of pre&enting costs from the amont p!anne%* The

charte% institte of management accontants Lon%on %efine it as the gi%ance an% reg!ation

'" e,ecti&e action of the costs of operating an n%erta+ing$ partic!ar!" #here sch action is

gi%e% '" cost acconting* It is ths an attempt at +eeping costs n%er a specifie% cei!ing or at

the !o#est possi'!e !e&e! consistent #ith the performance of a specifie% tas+*

8t in a%%ition$ cost contro! proce%res mst a!so ensre the proper athoriation of

e,pen%itre in respect of the engagement of emp!o"ees$ the prchasing of materia!s an% the

se of ser&ices*


17/62

It #o!% appear$ therefore$ that the o'@ecti&e of cost contro! is the performance of the same

@o' at a !o#er cost or a 'etter performance for the same cost* It %oes: not set a ot a !imit p

to #hich cost sho!% 'e 'roght %o#n? e!se it gi&es a ca!! to continos!" effects

impro&ements in them* It is a process of #atching cost figres an% ta+ing action to trim them*

The management sho!% ne&er 'e satisfie% that a point has reache% 'e"on% #hich no frther

impro&ement is possi'!e* Cost contro! in&o!&es appraising management of the fact that

Costs ha&e change%

The %irection of changes$

The reason for change

The +no#!e%ge that change is occrring ma" prompt management to a!ter 'asic operating

po!icies-to ta+e p ne# pro%cts or %rop o!% !ines$ to rep!ace an emp!o"ee$ to emphasis

%ifferent mar+eting areas$ or to se s'stitte ra# materia!s*

Definition OF COST CONTROL:-

A proce%re$ #here fi,e% cost an% &aria'!e cost are ta+en an% accor%ing!" action ta+en to

re%ce the cost incrre% at %ifferent areas$ there '" a&oi% #astage of n#ante% e,penses$ i*e*

ca!!e% cost contro!*

Cost contro! is %efine% as Jthe gi%ance an% reg!ation '" e,ecti&e action of the cost of

operating an% n%erta+ingK* The !timate aim of cost acconting is cost contro!*

Essentia+ Feat'&es of Cost cont&o+

Cost acconting the compan" sho!% ha&e an effecti&e cost acconting s"stem* This

#i!! instrct the necessar" information to contro! in the organiation*

Cost p!anning the compan" sho!% to achie&e cost targets* That is the compan"

sho!% ha&e the proper p!anning an% '%getar" s"stem* The targets are sets after

ta+ing into consi%eration of re!e&ant factors*

Cost reporting no compan" can fnction n!ess there is a perfect monitoring* Costs

can 'e contro!!e% on!" #hen there is proper management reporting s"stem*


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6)!antages of cost cont&o+:

The main a%&antages of cost contro!$

• It he!ps the firm to impro&e its profita'i!it" an% competiti&eness*

• It he!ps the firm in re%cing its costs an% ths re%ces its prices*

• It is in%ispensa'!e for achie&ing greater pro%cti&it"*

• Optimm !e&e! of pro%cti&it" an% )a!it"*

• Increase% cre%it #orthiness*

• Increase% e,ports more foreign earnings*

• If the price of the pro%ct is sta'!e an% reasona'!e$ it can maintain higher sa!es an% ths

emp!o"ment of #or+ force*

•

Reasona'!e price for the cstomer*• 8etter an% economic se of men$ machines an% mone"*

Disa)!antages of cost cont&o+:

The main %isa%&antages of cost contro! are$

Not an e?act science in the a'sence of it &arios %ecisions are s'@ect to certain

@%gement* No so+'tion to %&ob+e" it on!" pro&i%es a 'asic for ta+ing right %ecision 't %oes not

pro&i%e so!tion* No 'nifo&"it3 it is e,pensi&e an% can 'e a%opte% on!" 'ig companies an% not

sita'!e concerns* No stan)a&)s %etermine of stan%ar%s sch as !a'or hose materia! costs*

Diffe&ent t3%es of costs are re)ire% for %ifferent prposes*

E+e"ents of cost cont&o+:

The fo!!o#ing are the e!ements of cost contro!

• Set a stan%ar% or target*

• Se!ect a "ar%stic+ for measring #ith target or stan%ar%*

• Ascertain the acta! performance '" app!"ing the "ar%stic+ #hich #as se%

for measring the stan%ar% or target*

• Compare the acta! performance #ith the stan%ar%s or target an% compte the

&ariance*

• Perio%ica!!" re&ie# the stan%ar%s or targets an% re&ise the stan%ar% or targets

an% re&ise them in the !ight of change% circmstances*


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Facto&s 8a"%e&ing cost cont&o+ in In)ia:

• Cost of ra# materia!s an% other interme%iate pro%cts is high*

• High foreign commo%it" prices$ partic!ar!" oi!*• Po#er shortages an% n%erti!iation of capacit"*• De!a" in the isse of !icenses*• High rates of ta,es ten% to raise the o&era!! costs of pro%ction in In%ia*

Ste%s of cost cont&o+

Organiing a s"stem of cost contro! an% ma+ing it #or+s sccessf!!" re)ires the

fo!!o#ing = steps*

Set p the targets* easre the acta!*

Compare the acta! #ith targets*

Loca!ie the case for the &ariation 'et#een the targets an% the acta!*

Ta+e sch actions as necessar" to e!iminate these &ariations*

Cost cont&o+ %&ocess

The steps in&o!&e% in %esigning process of cost contro! s"stem are as fo!!o#s*

Esta'!ishment norms

• To e,ercise cost contro! it is essentia! to esta'!ish norms$ targets or parameters #hich

ma" ser&e as "ar%stic+ to achie&e the !timate o'@ecti&e*

• Appraisa! the acta! res!ts are compare% #ith the set norms to ascertain the %egree of

ti!iation of men$ machine an% materia!s*

• Correcti&e measres the &arios are re&ie#e% an% measres or re&ision of targets$ norms$

stan%ar%s$ etc*

Met8o)s an) tec8ni'es of cost cont&o+

an" management techni)es are in se to faci!itate the #or+ of cost contro!* Some are

informa! techni)es an% re)ire on!" a!ert o'ser&ation of ph"sica! con%itions %ring %ai!"

operations* The importance techni)es in this connection are

• 8%getar" contro!

• Stan%ar% costing


21/62

• Cost contro! ratio

• Qa!e ana!"sis

8%getar" contro! - The '%get is the fn%amenta! acconting mo%e! for cost contro!$ '"

setting goa!s in a%&ance? it ho!%s the operating managers to those goa!s* The acta!

performance then is continos!" compare% #ith compare% #ith the '%gete% p!an or the

targets e,presse%$ in mone" terms* If the firm sccee%s in a%opting the concept of f!e,i'!e or

&aria'!e '%geting$ the contro! mechanism is ma%e a!! the more effecti&e*

Stan%ar% costing this consists in %e&e!oping stan%ar%s #ith regar% to the three main e!ements

of cost materia!s$ %irect !a'or$ o&erhea%s an% then compting &ariances '" measring the

acta! performances against pre%etermine% stan%ar%s* The core of stan%ar% costing is

measrement an% ana!"sis of &ariances*

Cost contro! ratios ratios ha&e a!#a"s 'een an important means if e,ercising operationa! an%

cost contro!* E,pressing the re!ationship 'et#een t#o or more &aria'!es$ the" c!ear!" 'ring

ot the o&era!! hea!th of an organiation* The inter%epen%ence or !in+ 'et#een the acti&it"$

capacit" an% efficienc" is #e!! high!ighte%* One ratio '" itse!f #i!! not re&ea! mch for

monitoring an% contro!? the three together she% enogh !ight on pro%ction &o!me$ capacit"

ti!isation$ an% pro%cti&it"* As sa! these ratios are state% in percentage terms sch that the

)otient of factors is m!tip!ie% '" ;>>*

Qa!e ana!"sis an% engineering The &a!e ana!"sis metho%o!og" ha% its forma! 'eginning

'" engineer at GEC %ring or!% ar II #hen materia! an% !a'or #ere in short spp!"* It

#as teste% an% pro&e% to 'e effecti&e after man" "ears of research* The techni)e #as retit!e

as &a!e engineering an% %e&e!ope% an% imp!emente% #i%e!" in in%str" as a cost sa&ing too!*

Qa!e engineering %efinition-A s"stematic ana!"sis an% e&a!ation of the techni)es an%

fnctions in the &arios spheres of an organiation #ith a &ie# to e,p!oring channe!s of

performance impro&ement so that the &a!e in a partic!ar pro%ct can 'e 'ettere%*::

=enefits of !a+'e ana+3sis:

It ena'!es to i%entif" an% pinpoint area that nee%s attention an% impro&ement*

It ensres an% maintains the %esire )a!it" pro%cts an% sggests the manfactre of most

sita'!e pro%cts* It pro&i%es a metho% of generating i%eas an% a!ternati&es for possi'!e so!tions to a

concern*


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It is an effecti&e too! for cost re%ction*

It concentrates on cstomer satisfaction #hich !ea%s to profita'i!it" of the organiation*

8" a contining search for impro&ement$ it creates an atmosphere for increase of

efficienc"*

It ma+es possi'!e optimm se of a!! resorces* It promotes inno&ation an% creati&it"*

Cost cont&o+ in in)i!i)'a+ cost e+e"ent

The" are fi&e cost contro! aspect in in%i&i%a! cost e!ement*

Ra# materia! - the inefficient se of materia!s in one of the prime case of increase% costs*

astage throgh poor an% %esign has risen to sch an e,tent that #aste reco&er" is no# a

ma@or in%str"* ateria!s are #aste% in a nm'er of #a"s

a7 Off cts$ '7 'rea+age$ c7 inefficient$ %7 poor #or+manship$ e7 !o# )a!it" f7

O'so!escence$ g7 pi!fering*

ages cost contro! %ea!s #ith in this fie!% ot the %e&iation arising 'ecase of man-

hors%a"s as pro@ecte% an% acta! man- hors %a" #or+e%* La'or cost rise in three #a"s

a7 Higher pa"$ '7 shorter #or+ing hor$ c7 re%ce% otpt*

Po#er an% fe! - the process e&a!ates the consmption of po#er an% fe! in )antitati&e as

#e!! as in &a!e terms #ith the stan%ar% consmption*

Stores an% spare parts-the tota! cost$ stores cost a!so a ma@or component In the cost of

pro%ction* Some too!s are &er" cost!" an% the n%er ti!isation on!" contri'tes the increase%

cost of pro%ction*

O&erhea%s: this process ma+es the comparison of acta! o&erhea%s #ith set norms for

o&erhea% to fin% the &ariance an% its ana!"sis thereof* The main aim of cost contro! is to

ma,imie the !imite% a&ai!a'!e resorces of pro%ction an% to impro&e the ti!isation of

critica! inpts*

Ma9ing t8e cost cont&o+ as s'ccess

Proper fi,ation The target sho!% a!#a"s 'e fi,e% p in cons!tation #ith the

in%i&i%a!s responsi'!e for achie&ing the target into consi%eration an% a!! practice


23/62

aspects go&erning the pro%ction e,penses* Brther targets sho!% attaina'!e an% not

i%ea!* Perio%ica! re&ie# of target The target once fi,e% sho!% not 'e re&ise% first 'ecase

there are not atten%e% it sho!% ho#e&er 'e note% the targets '" themse!&es sho!% not

'e consi%ere% permanent* Time!" presentation of comparison the comparison 'et#een the targets an% acta! is

presente% sfficient!" in time for necessar" action to 'e ta+en* 8e!ate% presentation

#i!! on!" 'e statistica! information cannot 'e he!pf! in increasing in a %epartment %e

to %efecti&e se!!ing p the machine casing higher #astage the ear!ier it is 'roght to

the notice of the %epartment concerne% the )ic+er #i!! 'e the recertification %one

presenting this information sa"s after a month #i!! on!" res!ts in the increase% cost to

contine nnotice%*

Cost contro! in effecti&eness The management of e&er" mo%ern enterprise re)ire% a !ot of

cost information an% it re)ires perio%ica! information not on!" a'ot tota! cost of pro%ction

an% se!!ing 't a!so a'ot cost of its pro%cts of %ifferent process or stages of pro%ction an%

intro%ction a'ot the &arios e!ements of cost sch as materia!s cost*

La'or cost o&erhea%s #hich consists the cost of pro%ction an% sa!e it sho!% ha&e

information to +no# #hether !osses an% #aste occr in an" !ine of acti&ities so that correcti&esteps ma" 'e ta+en to minimie them* hi!e the #or+ in progress cost acconting

information pro&i%es +no#!e%ge to ta+e effecti&e an% efficient %ecision for cost contro!

ascertainment of profita'i!it" an% interna! an% e,terna! reporting in the present era of ct

throat competition management are facing the pro'!em of sr&i&a! on!" those organiation

can meet the competition effecti&e!" an% ha&e a ho!% on the #or+ers #hich are in the position

to +eep their cost minimm*

INTRODUCTION OF COST REDUCTION:-

In the present in%stria! scenario increasing competition s)eees margins an% management

of 'siness enterprises pa" more attention to cost re%ction as a #a" of preser&ing or

impro&ing profita'i!it"* Re%ction of cost sta" cosmetic as a compan" maintains smooth

!i)i%it"* Pro'!ems raise g!" hea% #ith mar+et )a+es #hich 'egin strang!ing !i)i%it"*


24/62

Cost re%ction is not a specia! e,ercise carrie% ot each time '" management notice% that the

profit margin has fa!!en* It sho!% not 'e a fire-fighting e,ercise* It is or sho!% 'e a rotine

acti&it" carrie% ot consistent!" throghot the #ho!e organiation$ !oo+ing at e&er" acti&it"

at a!! !e&e!s* Sch a ser&ices is 'ase% on commitment to change that #i!! ensre that the

organiation at !east +eep pace #ith techno!ogica! %e&e!opments an% ma" e&en ta+e the !ea%

in pro%cing ne# approaches to o!% pro'!ems* Cost re%ction is the +e" #or% for sccess into

%a":s g!o'a! competiti&e mar+et scenario*

An" cost Re%ction ser&ice mst 'e on a f!! +no#!e%ge of thee organiations s of

its resorces* The profita'i!it" of a pro%ct can 'e impro&e% '" a!! or an" of the

fo!!o#ing #a"s* 8" impro&ing fnction cost remaining constant

8" impro&ing fnction as #e!! re%cing cost

8" re%cing cost$ fnctions remaining constant*

Here #e are concerne% #ith the !ast t#o t"pes of programme* Cost re%ction is an approach

rather than a techni)e* It %epen%s &er" mch on in%i&i%a! ta!ent cop!e% #ith a comp!ete

n%erstan%ing of the 'siness process from %esign to %e!i&er"* It is achie&e% on!" throgh a

process of the pro%ct is concei&e% to the mo&ement cstomer ses it* Cost ctting is no

!onger thee so!tion to sstaina'!e profita'i!it" the +e" to sccess is fin%ing creati&e #a"s to

pre&ent cost*

Definition of cost &e)'ction-

It is a s"stematic effort to impro&e profit margins '" e!iminating a!! forms of #aste an%

nnecessar" e,penses #ithot$ at the same time$ impairing the generation of re&ene*

In other #or%s$ the process of i%entif"ing an% e!iminating nnecessar" costs to impro&e the

profita'i!it" of a 'siness is +no#n as cost re%ction*

Feat'&es of Cost &e)'ction:

• Cost re%ction is not concerne% #ith setting targets an% stan%ar%s* Cost re%ction is

the fina! res!t in the cost contro! process*

• Cost re%ction aims at impro&ing the stan%ar%s*

• It is continos$ %"namic an% inno&ati&e in natre$ !oo+ing a!#a"s for measres an%

a!ternati&e to re%ce costs*


25/62

• It is a correcti&e fnction*

• This is app!ica'!e to e&er" acti&it" of the 'siness*

• It a%%s thin+ing an% ana!"sis to action at a!! !e&e!s of management*

• The re%ction mst 'e rea!* It mst arise #ithin the organiation as res!ts of

impro&e% efficienc"*

• The re%ction mst 'e permanent*

• The %e%ction sho!% not 'e at the e,penses )a!it" of pro%cts*

/RINCI/LES OF COST REDUCTION:

The programme mst 'e 'ase% on a management c"c!e*

It mst 'e 'ase% on a son% management organiation*

It mst 'e a s"stematic @o'$ cop!e% #ith e&er" other compan" acti&it"*

It is an acconting !ine responsi'i!it"$ for #hich e&er" emp!o"ee mst 'e he!%

consistent!" acconta'!e* Responsi'i!it" for cost contro! mst 'e %e!egate% an% accompanie% '" correspon%ing

athorit"* The programme mst 'e e&a!ate%$ re%esigne%$ an% re-e&a!ate% in a continos

process of fo!!o# p*

I"%o&tance of cost &e)'ction-

a7 Impro&es the competiti&e capa'i!ities an% ensres sr&i&a!$ gro#th an% prosperit"

'7 Optimm ti!iation of the resorces

c7 Pro&i%es reasona'!e prices to consmers

%7 Preser&ation of the nations scarce resorces

e7 eeps the price n%er contro! charges to consmer

f7 He!ps go&t* in contro!!ing inf!ation*

g7 It impro&es the image of compan" for !ong term in&estment*

h7 It impro&es the rate of retrn on in&estment*

i7 To prepare for meeting a ftre position*

@7 To e!iminate nnecessar" e,penses or #astef! spen%ing*

6)!antages of cost &e)'ction:

The main a%&antages of cost re%ction are$


26/62

;7 To a partic!ar concern- Impro&es profits

Impro&es financia! position

Impro&es competiti&e capa'i!ities

Ser&es as an in%e, of efficienc"*

F7 To the in%str" One compan" ser&e as a tren% 'etter for the other companies*

.7 To the nation Efficient ti!iation of scarce resorces

High ta,es can 'e !e&ie% '" go&ernment

Retaining the mar+ets an% gaining ne# '"ers

Com'ating inf!ation*

Disa)!antages of cost &e)'ction:

The main %isa%&antages of cost re%ction are$

a!it" ma" 'e sacrifice% at the cost of re%ction in cost*

In the 'eginning cost re%ction programme ma" not 'e !i+e% '" the emp!o"ees an%

%anger ma" 'e poste% to the programme 'ecase %epen%s pon the #i!!ing

cooperation an% acti&e participation of emp!o"ees* There ma" 'e a conf!ict 'et#een in%i&i%a! o'@ecti&e an% organiationa! o'@ecti&es*

Obecti!es of cost &e)'ction:

The prposes of cost re%ction are$

Create cash reser&e for rein&estment in research an% %e&e!opment*

Re%ce cost as non profit so a'!e to ser&e more peop!e*

To 'ecome more efficient*

To pre&ent emp!o"ee !a"offs*

Re%ce% manfactring costs to sta" competiti&e*

Lo#er costs of ser&ices in or%er to pro&i%e a%%itiona! ser&ices*

To pre&ent re%ction in emp!o"ee 'enefits*

Di"ension of cost &e)'ction:

Interna!!" %ri&en

• eep impro&ing processes• Emp!o"ee sggestion programs

E,terna!!" %ri&en

• Top of the techno!og" an% process*


27/62

Competitor %ri&en

• 8ench mar+ing against competitors*• Rea! time %ata

6&ea of cost &e)'ction:-

ateria!s

• Design

• Prchasing• Storage

• Transport• Pro%ction

La'or

o&erhea%s

• Increasing the pro%ction &o!me*• E,tension of mar+et an% price %ifferentia!s• Sie of 'siness nits

Otsorcing

Sa!es an% mar+eting

Energ"

Pro%ction

Cost &e)'ction %&ocess:

The achie&ement of rea! an% permanent re%ction in the nit cost of goo%s manfactre% or

ser&ices ren%ere% #ithot impairing their sita'i!it" for se inten%e%* Re%ction in the cost of

pro%ct mst 'e 'roght a'ot '" the e!iminating of #astef! an% nnecessar" resorces

emp!o"e% in its %esign$ manfactre$ sa!e an% %istri'tion* Re%ction in )a!it" of a pro%ct

or the range of its ses cannot 'e regar%e% as fitting cost re%ctions*

Cost re%ction process contains the fo!!o#ing se)ences of steps

Ana!"sis-E&er" acti&it"$ #hether in the office$ factor"$ or #arehose$ can 'e ana!"e% in to

nm'er of separate steps* This is %one '" as+ing )estions an% gathering an% recor%ing

ans#ers gi&en* Brom this process of %ata co!!ection$ it is possi'!e to %ra# a pictre of the

acti&it" #hich ena'!es it to 'e e,amine% an% impro&ements %e&e!ope%*

E,amination - each acti&it" is no# e,amine% in some %etai!s to esta'!ish #hether it is


28/62

5a7 Qita! 5'7 secon%ar" 5c7 nnecessar"*

Qita! acti&ities are those #hich %irect!" !ea% to achie&ing the o'@ecti&es pre&ios!"

esta'!ishe%* The" 'ecome fn%amenta! to s'se)ent impro&ement* Secon%ar" acti&ities

%on:t contri'te %irect!" to achie&e the o'@ecti&es 't are necessit" to spport an% ser&e that

&ita! acti&it"* The remain%er acti&ities concerne% are a!most a!#a"s nnecessar"* The greatest

sa&ings often arise from e!imination of nnecessar" acti&ities an% components$ an% this

sho!% a!#a"s 'e the first !ine of attract in spite of the pro'!ems inc!%e%* Consi%era'!e

impro&ements can 'e achie&e% '" com'ining acti&ities*

De&e!oping so!tions - %etai!e% ana!"sis an% e,amination sho!% !ea% to the %e&e!opment of

a nm'er of possi'!e so!tions* No so!tion sho!% 'e o&er- !oo+e% for ignore% 'ecase it

%oes not seem practica!*

Se!ecting a so!tion - the choice 'et#een se&era! so!tions #i!! %epen% on nmeros factors

inc!%ing compan" po!icies$ persona! preferences$ aestheticappe% an% other s'@ecti&e

criteria* This is this stage #ere ana!"st as to ma+e sho# that e&er"one f!!" n%erstan% the

a%&antages an% %isa%&antages of &arios so!tions so that a rationa! choice can 'e ma%e*

O'taining agreement-in the e&a!ation stage$ one of the )estions as+e% #as J#i!! it 'e

accepta'!e to cstomer$ emp!o"ee an% management JThe ans#er to this mst ha&e 'een "es?

other#ise the so!tion #o!% not ha&e passe% the e&a!ation test*

7o; to &e)'ce cost-

E!imination of #aste

Impro&ing operations

Increasing pro%cti&it"

Cheaper materia!s

Impro&e stan%ar%s of )a!it"*

Too+s an) tec8ni'es of cost &e)'ctions:-

Qa!e ana!"sis


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or+ st%"

o' e&a!ation an% merit rating

a!it" contro!

Economic or%er )a!it"

Stan%ar%iation

Impro&ement in the %esign of a %esign

In&entor" management an% contro!*

Sco%e of cost &e)'ction ca"%aign:

A cost re%ction campaign sho!% co&er 'oth !ong term aim as #e!! as short term

o'@ecti&es*

In a short term on!"$ &aria'!e costs are sscepti'!e to cost re%ction efforts* an"

fi,e% costs items$ 5i*e* %epreciation$ rent etc*7 are na&oi%a'!e*

Some fi,e% costs are a!so a&oi%a'!e in short term$ i*e*$ a%&ertising an% sa!es

promotion e,penses* These are ca!!e% J%iscretionar" fi,e costs*K

In the !ong rn$ most costs can 'e either re%ce% a&oi%e%* This inc!%es fi,e% costs as

#e!! as &aria'!e costs items*

/+anning fo& cost &e)'ction

There are t#o 'asic approaches to cost re%ction$

Crash programme%

P!anne% programme%

a7 Crash programmes to ct spen%ing !e&e!s

anagement might %eci%e on an imme%iate programme to re%ce spen%ing to a minimm*

Some crrent pro@ects might 'e a'an%one%$ capita! e,pen%itres %eferre%$ emp!o"ees ma%e

re%n%ant$ an% so on* The a'sence of caref! p!anning might ma+e sch crash programmes

!oo+ !i+e panic measres* hat:s more$ the" might 'e too !itt!e an% too !ate$ or mis%irecte%*


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Bor e,amp!e? %ecisions '" a compan" to re%ce the sie of its interna! a%it section might ct

staff costs in the short term 't increase costs in the !onger term*

'7 P!anne% programme% to re%ce costs

an" companies ten% to intro%ce% crash programme for cost of re%ction in times of crisis

an% ignore the pro'!em comp!ete!" in times of prosperit"* A far 'etter approach is to ha&e

contina! assessment of the organiations pro%cts pro%ction metho%s$ interna!

a%ministration s"stems$ an% so on*

O&gani0ation fo& cost &e)'ction

The organiation for form!ating a cost re%ction programme %iffers from concern* This is

'ecase of sch %i&ergences as natre of the 'siness sie of the n%erta+ing an% in%i&i%a!

re)irements* This committee comprises the hea%s in charges of &arios 'siness fnctions* It

is the fnction of this committee to form!ate an% a%minister the cost re%ction programmes*

The %etai!e% fnctions of the committee ma" 'e smmarie% as n%er*

a7 To p!an an integrate% cost re%ction programmes$ co&ering the &arios centre:s or points

#here costs are incrre%*

'7 To see+$ if necessar" the assistance of e,perts from otsi%e the entit" to p!an the

programme*

C7 To %efine c!ear!" the cost re%ction programmes an% assigns responsi'i!it" amongst the

e,ecti&e*

%7 To set targets of cost re%ction programmes an% %etermines priorities*

e7 To %iscss pro'!ems arising in the corse of e,ection of the scheme*

f7 To re&ie# the progress ma%e from time to time*

g7 To moti&ate emp!o"ees to achie&e the targets*

T8e i"%o&tant cost &e)'ction a&eas as fo++o;s

/&o)'ct i"%&o!e"ent


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Pro%ct impro&ement cost the !e&e! of efficienc" %etermines the costs incrre%*

Important factors in pro%ct impro&ements are$

• a!it" of the pro%ct*

• Unnecessar" #eight$ materia!s content$ machine or !a'or operation*• Proper %esigning of the pro%ct*

/&o)'ction %+anning an) cont&o+

The area of pro%ction metho%s an% organiation is important for the prpose of re%ction*

There are man" &ita! acti&ities re!ating to pro%ction an% pro%ction p!anning #here a cost

re%ction programme ma" 'e app!ie%*

Ma&9eting a&eas In mar+eting$ the fo!!o#ing are the cost re%ction areas

Channe! of %istri'tion? sa!es promotion schemes$ mar+eting research p!an$ territoria!

responsi'i!ities$ metho%s of remnerating sa!esman$ a%&ertising metho%s$ after sa!e ser&ice

costs$ pac+ing metho%s$ materia!s han%!ing$ transport arrangement etc*

/e&sonne+ "anage"ent:

The cost re%ction programme sho!% e,p!ore the fo!!o#ing$

• Re%ction !a'or content of pro%ction '" sita'!e #or+ st%" techni)es an%

intro%ction of son% incenti&e scheme*• Re%ction in !a'or cost '" impro&ing !a'or re!ation #e!fare measres an%

'etter #or+ing con%itions*

Mate&ia+ cont&o+:

Some of the aspects that ma" 'e !oo+e% into are$

Effecti&e an% economica! prchase of materia!s*

A%herence to EO*

eeping !o# in&entor"- !ess in&estment in stoc+*

6)"inist&ation a&eas:

A%ministration fnctions inc!%e personne!$ prchase an% genera!

a%ministration* The goa! of cost re%ctions re)ires efficienc" a%ministrations$ effecti&e

prchasing proce%res an% a fair personne! po!ic" an% schemes*


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Uti+it3 se&!ice

Uti!it" ser&ices inc!%e po#er$ #ater$ steam$ repair$ an% maintenances transport an%

c!erica! ser&ices$ etc* the fo!!o#ing points sho!% 'e consi%ere%*

• Spp!" of ti!ities at economic costs or scope for an" frther increase in

ti!iation*• Proper s"stem for pre&enti&e an% crati&e maintenance*

Finance:

etho%s of fn%ing capita! e,pen%itre to 'e cost effecti&e*

Procring capita! at economica! costs*

Emp!o"ing capita! in a manner so as to gi&en the ma,imm retrn*

The fo!!o#ing chec+ !ist can gi%e in starting a

Goo) cost &et'&n %&og&a""e

De&e!opment of a programme chec+!ist This in&o!&es i%entification an%

c!assification of costs* It a!so in&o!&es proce%re to se sch as setting$ o'@ecti&es$

responsi'i!it"$ targets$ recor%s$ an% measrements or e&a!ations po!icies*

Brom committees in or%er to i%entif" responsi'i!ities It is necessar" that an"

contri'tions '" emp!o"ee 'e recognie% an% compensate%*

aintaining recor%s of programmes

Cop!e% #ith i%entif"ing responsi'i!it" in specific programme$ +eeping %etai!s of

acti&ities$ stats an% accomp!ishment is e)a!!" important*

I%entification of cost re%ction i%eas sorces

I%eas are the &er" heart of an" cost re%ction programmes* ithot these$ an"

programme #o!% fi!e sooner or !ater* I%eas ma" come from &arios sorces* Bor e,amp!e emp!o"ee sggestions p'!ications in%str" associations$ professiona!$

cons!tants$ seminars$ among others for proper imp!ementations*

Commnication is the most critica!

Portion of imp!ementing a cost re%ction programme for the simp!e reasons that

emp!o"ees nee% to 'e informe% of the programme itse!f* The proce%res$ responsi'i!ities

an% p%ates$ cost re%ction can operate 'est #hen its o'@ecti&es are f!!" %isc!ose%*


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Stages of cost &e)'ction:

Stages -#:- cost c'tting• Cost ctting in&o!&es cost in spen%ing 'ase% on ar'itrar" criteria*

• Costs are %i&i%e% into committe% an% %iscretionar" categories*

• Cts targets %iscretionar" 'etter committe%$ !arge 'efore sma!!$ e,pe%ient 'efore

sensiti&e*

• Performance measre% against historica! stan%ar%s*

Stage-(:-cost "anage"ent:

• Cost management in&o!&es a s"stematic approach to cost re%ction that in&o!&es an

n%erstan%ing of re!e&ant cost %ri&ers*

• Re%ction are achie&e% '" e!iminating nse% capacit"$ no &a!e a%%e%$ acti&it"

c"c!e times*

• Performance measre% against !ong term stan%ar%s*

• Cost are organie% '" resorces$ acti&ities an% cost o'@ects*

Stage-*:- cost )esign

Cost positioning

Cost )esign

Cost "anage"ent

Cost c'tting


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• Cost %esign in&o!&es an e&a!ation an% re%esign of the interna! chain* It see+s to

impro&e the re!ationship among resorce re)ire% #or+ performe% to satisf" cstomer

re)irements*

• Re%ctions achie&e% '" e!iminating re%n%anc" an% confirming to operation as

strateg"*

• Costs are organie% '" process an% s' process*

• Performance measre% against 'est in c!ass stan%ar%s of performance*

Stage-,:- cost %ositioning:

• Costs are organie% '" !in+s in the &a!e chain*

• Re%ctions achie&e% '" conso!i%ation of !in+s$ sharing information$ 'etter

coor%ination an% e,p!oiting s"nergies among spp!" chain mem'ers*

• Performance measre% against strategic o'@ecti&es sch as mar+et share an% price

target

Diffe&ence bet;een cost &e)'ction an) cost cont&o+

SI NO COST CONTROL COST REDUCTION

;* The process of cost contro! is to set

target$ ascertain acta! performance$ an%

compare it #ith the target$ in&estigate the

&ariances an% contract them*

It is not concerne% #ith maintenance of

performance accor%ing to stan%ar%s* It

cha!!enges stan%ar%s*

F* Emphasis is on present an% past* Emphasis is on present an% ftre*

.* It ten%s to set p a conser&ati&e

proce%re an% !ac+s %"namic approach*

It is a continos process searching for

a!ternati&es a!! the times an% is inno&ati&e in

natre*

* Usa!!" !imite% to items #hich ha&e

stan%ar%s*

App!ie% to e&er" section of the 'siness*

=* It is pre&enting fnction? costs are

optimie% 'efore the" are incrre%*

It is a contracti&e fnction an% %oes operate

e&en #hen a cost contro! s"stem e,ists*

* See+s to attain !o#est cost possi'!e n%er

e,isting con%itions*

Recognie% no con%itions as permanent$ since

a change #i!! res!t in a !o#er cost*


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* It is management '" %irecti&e %ictating

ho# to %o a thing*

It a%%s thin+ing to %oing at a!! !e&e!s of

management*

* It represents efforts ma%e to#ar%s

achie&ing a targetgoa!*

It represents achie&ement in re%ction of costs

in a!! efforts to reach the goa!*

CHAPTER-II

RESEARCH DESIGN

The research %esign is the concepta! strctre #hich research is con%cte% *Research %esign

is the arrangement of con%itions for co!!ection an% ana!"sis of %ata in a manner that aims to

com'ine re!e&ance to the research prpose #ith econom" in proce%re* It is the frame#or+$

#hich specifies the t"pe of information to co!!ect the sorces of %ata co!!ection proce%re

%ata #as co!!ecte% from primar" an% secon%ar" sorces*

DEBINITION OB RESEARCH

Accor%ing to er !inger %efines research 9:as a s"stematic$ contro!!e% empirica! an% critica!

in&estigation of h"pothetica! preposition a'ot the presme% re!ations among natra!

phenomena*::

OR

9:A frame#or+ or '!e print for con%cting the research pro@ects$ it specifies the %etai!s of the

proce%re necessar" for o'taining the information nee%e% to strctre an% or so!&e research

pro@ects::*


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EANING OB RESEARCH DESIGN

The tit!e of the research pro'!em$ the o'@ecti&e of the st%"$ the in&estigati&e )estions an%

the h"potheses consists of concept? those concepts sho!% 'e precise!" %efine%*

RESEARCH DESIGN OB THE STUDV

Research %esign is pre!" the frame#or+ of p!an for a st%" gi%es the co!!ection an%

ana!"sis of %ata*

TITLE OB THE STUDV-

The st%" is con%cte% at 9:THE 8ANGALORE 8QC LOGISTICS PQT LTD::* The tit!e of

the st%" is:: A st%" on cost contro! an% cost re%ction::* THE 8ANGALORE 8QC

LOGISTICS PQT LTD*

STATEENT OB THE PRO8LE-

In a high!" competiti&e mar+et$ cost contro! an% cost re%ction is the on!" #a" to ma,imise

earnings* This is 'ecase in a competiti&e en&ironment* A firm #i!! ha&e !itt!e concerne%

contro! o&er the prices of its pro%ct or ser&ices$ so #hen the compan" fi,es the prices of its

pro%cts or ser&ices$ the firm has to contro! its cost an% +eep them as !o# as possi'!e 'e!o#

the price in or%er to earn profit* Here the cost contro! an% cost re%ction p!a"s a +e" ro!e* The

o'@ecti&es of the compan" is to p!an at %ifferent !e&e!$ maintain effecti&e contro! an% proper

%ecision ma+ing to sa&e cost an% access the performance of the cost re%ction is a cha!!enge

to pre%etermine% stan%ar%s*

Cost re%ction is to $ see #hether there is an" possi'i!it" is 'ring a'ot sa&ing in the costs

incrre% in p!ant an% a%ministration o&erhea% of inpts come %o#n* So to meet the cha!!enge

of the cost re%ction !ogistics at 8QC cost ana!"sis is necessar"*

To ma,imie profits throgh cost re%ction an% cost contro! it is imperati&e to ana!"e

&arios in 8QC Logistics Compan"*


37/62

O'@ecti&es of the st%"

The main o'@ecti&es of the st%" are-

• To st%" the cost management s"stem an% contro! techni)e of the compan"*

• To st%" the metho%s of cost contro! a%opte% '" the compan"*

• To fin% the reasons for e,cess of cost o&er p!anne% estimate% cost*

• To ana!"sis the effecti&eness of the cost re%ction an% contro! s"stem

imp!emente% '" the compan"*

• To i%entif" cost that sho# an increasing tren% an% %ecreasing tren%*

• To i%entif" an% sggest the sita'!e metho%s for cost contro! an% re%ction*

• To impro&es the images of compan" for !ong term 'enefits*

• To recommen% an" impro&ement if re)ire%*

REQIE OB LITERATURE-

As a mar+ of pre&ios !iteratre se&era! &isits #ere offere% to RC co!!ege !i'rar"$

8anga!ore Uni&ersit"$ the compan" !i'rar" 5JTHE 8QC LOGISTICS PQT LTDK7 an%

it #as notice% that none of them ha% specifica!!" %one a report on cost contro! an%

cost re%ction for in%i&i%a!s* The reports$ pro@ects$ an% 'oo+s referre% to a!so ga&e a

!ot of insight into the st%"*

SCOPE OB THE STUDV-A st%" #as con%cte% on cost contro! an% cost re%ction at J8QC LOGISTICS PQT

LTD:: to ana!"sis the cost re%ction an% cost contro! techni)es in %etai!*

aintaining optimm cost it is %iffic!t tas+ for the organiation* It is to 'e

maintaine% in sch a #a" that )a!it" of the pro%ct sho!% not get affecte% an% act as

a moti&ation force for the emp!o"ees to increase !a'or pro%cti&it"* This st%"

high!ights pro'!em in imp!ementing cost contro! an% cost re%ction measres*

PLAN OB ANALVSIS-The st%" is 'ase% on &arios sorces of information* The %ata co!!ecte% is primar"

%ata an% secon%ar" %ata an% its comp!ie%$ c!assifie% ta'!ate% an% then ana!"e% sing

costing techni)es an% statistica! too!s graphs an% charts are se% to high!ight the

statics*


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S"stematic samp!ing techni)e has 'een a%opte% for this st%" se!ection of the st%"

perio% is F>;>-;;$ F>;;-;F$ F>;F-;. an% F>;.-; in the compan"*

ETHODOLOGV OB THE STUDV-This st%" is 'ase% on face to face inter&ie# #ith the manager acconts an% staff of

the compan" an% a!so 'ase% on the a&ai!a'i!it" of &arios %ata throgh anna! report$

cost sheet* Prospects pro&i%e% '" the compan" an% aca%emics 'oo+s$ artic!es an%

#e'sites*

SOURCES OB DATA- Primar" sorce - are those %ata co!!ecte% for the first time #hich is for

specific prpose$ primar" %ata origina! in natre* The st%" is co!!ecte%

throgh the recor%s maintaine% '" compan" throgh face to face inter&ie#

#ith staff of officia! of 8QC*

Secon%ar" sorces-the ma@or %ata #as co!!ecte% from a!! a&ai!a'!e secon%ar"

sorces* List anna! reports$ cost sheet$ re&ie# of 'oo+s$ magaines$ @orna!s$

te,t 'oo+s$ internet an% #e'sites of the J8QC LOGISTICS PQT LTD as #e!!

as others*K

LIITATIONS OB THE STUDV-

The !imitations of the st%" are as n%er-

• The st%" is confine% on!" to J8QC LOGISTICS PQT LTDK*

• The ma@or !imitation of this is practica! %iffic!t"*

• The st%" is !imite% to a perio% of . "ears on!"*

• The st%" is restricte% on!" to 8QC LOGISTICS$ 8anga!ore? it is not

compare% #ith an" other*

• Access to the information is !imite% on!" to 8QC LOGISTICS*

•

Time #as ma@or constraints so research st%" co!% not 'e ma%e in %epth*• The st%" is pre!" on the %ata ma%e a&ai!a'!e an% inferences #ere %ra#n on

theoretica!*

• The conc!sions ha&e 'een %ra#n #ith not mch comprehensi&e an% practica!

+no#!e%ge a'ot the compan"*

CHAPTER SCHEE

CHAPTER-;

INTRODUCTION


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This chapter is a'ot the intro%ction to the cost acconting$ cost contro! an% cost

re%ction* It inc!%es meaning$ %efinition$ an% o'@ecti&es$ fnction$ an% merits %emerits of

cost acconting* An% meaning$ importance:s process$ o'@ecti&e a%&antages an% %isa%&antages

of cost contro! an% cost re%ction* Too!s an% techni)e of cost acconting cost contro! an%

cost re%ction*

CHAPTER-F

RESEARCH AND DESIGN

This chapter %ea!s a'ot the research %esign of the pro@ect st%"* It consist a'ot the

statement of the pro'!em$ scope of the st%"$ o'@ecti&e of the st%"$ p!an of ana!"sis$

metho%o!og" $sorces of %ata an% !imitations of the st%"*

CHAPTER-.

COPANV PROBILE AND INDUSTRV PROBILE

This chapter %ea!s #ith the profi!e of the 8QC LOGISTICS$ mission$ &ision$ o'@ecti&e

a#ar%s an% achie&ements$ socia! responsi'i!it"$ ne# techno!ogies* Btre pro@ects$ an% p!ans

of the organiation strctre*

CHAPTER-

DATA ANALVSIS AND INTERPRETATION

This chapter inc!%es the main #or+ of the research #or+* This chapter %ea!s #ith a

ro!e of cost contro! an% cost re%ction techni)es of c"c!e e,p!aine% #ith ta'!es an% graphs*

CHAPTER-=

BINDINGS$ SUGGESTION AND CONCLUSION

This chapter consist of the fin%ings from the research st%"$ the sggestions gi&en to

the compan" an% it inc!%es the o&era!! conc!sion fon% from the research st%"* hich

gi&es o&era!! cost sheet profits an% !oss acconts$ 'a!ance sheet$ fin%ings$ sggestion an%

conc!sion in %ra#n from the o'ser&ations*

CHAPTER-

8I8LIOGRAPHV


40/62

CHAPTER-

ANNEWURE

CHAPTER-III

COPANV PROBILE

GENESIS OB THE COPANV-

O&er the past => "ears$ 8QC has pioneere% Spp!" Chain So!tions in critica! offerings sch

as Cstom C!earance$ Logistics Transportation$ In&a!a'!e Cargo anagement an% man"

more* The Grop has car&e% a niche #ithin the Gems an% e#e!!er" in%str" an%

ac+no#!e%ge% as a sta!#art in 9In&a!a'!e Asset o&ement So!tions:* 8QC Grop to%a"

'oasts of g!o'a! connecti&it" an% is perhaps amongst the &er" fe# In%ian Logistic Hoses to

'e associate% #ith ega 8ran%s across nmeros contries*

8QC Logistics is to%a" a !ea%ing m!tinationa! compan" pro&i%ing Integrate% Logistics

So!tions '" %i&ersif"ing its reach across !timo%a! Transport Operations$ Ocean Breight$

Air Breight$ Contract Logistics an% Pro@ect Logistics* 8enchmar+e% )a!it" stan%ar%s$

stan%ar%ie% processes an% operation e,ce!!ence across a!! the ser&ices an% faci!ities$ ha&e

ena'!e% 8QC Logistics to emerge as the mar+et !ea%er in a!! these segments*

e pri%e orse!&es as a Tota! Spp!" Chain So!tions Compan" offering En% to En%$ 8est of

8ree% capa'i!it" in Domestic an% Internationa! Transportation an% arehosing cstomers

across &arie% &ertica!s in In%ia an% A'roa%*

We )e+i!e& Meas'&ab+e an) Tangib+e So+'tions ac&oss o'& se&!ice offe&ings

8QC Logistics has a Pan In%ia presence #ith foot print across In%ia cortes" its strategic tie

p #ith Carrier Netra! Ser&ice Pro&i%ers* 8eing a TRUE PL Compan" 5Offering

arehosing So!tions as a .PL an% Transportation So!tions as a PL7 #e ha&e tie% p Niche p!a"ers to gi&e 8est of 8ree% De!i&era'!es to or Corporate cstomers 8QC


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Qentres is the ho!%ing compan" of the 8QC grop of companies #ith teams ha&ing %eca%es

of e,perience$ a strong g!o'a! net#or+ an% strategic in%str" partnerships an% re!ationships*

The ethos of 8QC Qentres is entrenche% on a re!ent!ess prsit for creating &a!e for

sta+eho!%ers an% creating 'enchmar+s of gro#th rates in its in%stries*

Esta'!ishe% in ;$ the fi&e %eca%e o!% grop has pioneere% mo&ements an% ser&ices in

!ogistics$ secrit" an% torism an% techno!og"* The Grop has sstaine% #ithin niche sectors$

'ecoming a mar+et !ea%er in specia!ie% offering*

8QC Qentres is e,pan%ing as a cong!omerate #ith @oint &entres$ ai%ing start-ps to gro#*

The 8QC Qentres team specia!ies in offering state of the art resorces to start-ps an%

he!ping it gain traction to 'ecome mar+et !ea%ers* A strong focs is %e&ote% to %e&e!oping

&a!e for sta+eho!%ers an% fin%ing effecti&e$ sca!a'!e so!tions to cha!!enges persisting to%a"*

8QC is a mar+et !ea%er in secre% !ogistics ser&ices operating for o&er ha!f a centr"

pro&i%ing integrate% m!timo%a! transport operations* 8QC has car&e% a niche #ithin high

&a!e goo%s !ogistics an% is ac+no#!e%ge% as a sta!#art in &a!a'!e asset mo&ement

so!tions*

8QC has esta'!ishe% )a!it" stan%ar%s$ stan%ar%ie% processes an% operation e,ce!!ence

across a!! the ser&ices an% faci!ities* Integrit" is the +e" constitent of 8QC Logistics* 8QC

Logistics 'oasts of g!o'a! connecti&it" an% is amongst the &er" fe# In%ian Logistic Hoses to

'e associate% #ith ma@or g!o'a! 'ran%s* Bor frther information$ p!ease

Vision @ Mission

Vision

To create a socia! %ifference throgh %isrpti&e 'sinesses across in%stries as a !ea%ing

cong!omerate*

Mission

To set 'enchmar+s in ser&ice )a!it"$ sta+eho!%er satisfaction an% gro#th rates in the in%str"*

Va+'e


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Qa!es are #hat 'in% s together to mo&e to#ar%s or &ision*

Di!e&sit3

Di&ersit" is %eep!" engraine% in or c!tre* e stri&e to #or+ #ith ta!ente% in%i&i%a!s from

man" %ifferent 'ac+gron%s an% &arie% &ie#points* This %i&ersit" enriches or creati&e

so!tions an% ensres &a!e for or c!ients( 'sinesses* A rea!iation that %i&erse thoght from

man" sorces %irect!" contri'tes to 'siness sccess represents itse!f in inno&ation$ pro'!em

so!&ing$ an% 'siness management*

2'a+it3

Attention to %etai! an% attri'tes of 'a!ance% perfection can 'e rea!ie% from a!it"* a!it"

is a genine concern for comp!eting #or+ #e!! an% is gaine% throgh e%cation$ training$ an%

e,perience* e$ at 8QC Logistics$ !a" strong emphasis on training or emp!o"ees$ as #e

'e!ie&e that the highest !e&e!s of cstomer satisfaction an% operationa! e,ce!!ence are

achie&e% on!" #ith this &a!e*

Res%ect

8siness practice cannot 'e e,ercise% o&er time #ithot patience an% sensiti&it"* Open-

min%e% an% fair 'siness %ea!ings start #ith respecting the nee%s an% concerns of others* An%$

it goes 'e"on% c!asses$ races$ gen%ers an% ages* e are pro% to sa"$ e&er" sta+eho!%er

mem'er of 8QC Logistics appreciates this &a!e*

Desi&e to Se&!e

Se!f-commitment an% se!f-respect pro&i%e the path#a" for this &a!e to sho# p in 'siness*

Enthsiasm for %a"-to-%a" acti&ities an% 'eing min%f! of the nee%s of one another an%

cstomers res!t in 'siness efficiencies* An honest proacti&e %esire to ser&e Commnication

Effecti&e commnication is the +e" for sstaine% 'siness re!ationships* At 8QC Logistics$

#e 'e!ie&e that commnication 'ase% on effecti&e !istening$ n%erstan%ing other(s

perspecti&es$ an% appropriate %iscretion #o!% !ea% to strong teams an% partnerships*

Integ&it3


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Integrit" is a!! a'ot consistenc" of actions$ &a!es$ metho%s$ measres$ princip!es$

e,pectations an% otcomes* e$ at 8QC Logistics$ !a" the fon%ation of trst$ 'ase% on a'o&e

&irtes$ to 'i!% respecta'!e an% sstaina'!e 'siness re!ationships$ #hich faci!itates 'siness

interaction #ith honest" an% confi%entia!it"*

Socia+ Res%onsibi+ities an) cont&ib'tion:

At 8QC Logistics$ #e n%erstan% or responsi'i!it" to#ar%s the societ" an% the anima!s an%

are committe% for the 'etterment of societ" an% anima!s aron% s*

8QC strong!" 'e!ie&es in corporate socia! responsi'i!it" an% contri'ting to the %e&e!opment

of the societ"* 8QC #or+s c!ose!" #ith &arios charita'!e organiations to he!p impro&e the

stan%ar% of !i&ing throgh pro&i%ing e%cationa! an% hea!thcare 'enefits to the

n%erpri&i!ege% an% ai% in anima! #e!fare* The !ong term &ision of the fon%ation is to create

a s'stantia! %ifference in the )a!it" of e%cation an% hea!thcare in areas nee%ing tmost

attention*

C8a&itab+e O&gani0ations:

The 8QC Bon%ation a!ong #ith 8QC Charita'!e Origination reg!ar!" %onates !arge

amonts to assists &arios fon%ations !i+e*** Giants Grop$ SC an% Sri nthnath ain

Bon%ation the 8QC Bon%ation sponsors ;= in%i&i%a!s at the m'ai arathon an%

procee%s are %onate% to Unite% a" of m'ai to spport e%cation an% hea!thcare cases*

The 8QC team is raising a#areness of the NGO to a!!o# more corporate to %onate to the

NGO$ e&enta!!" !ea%ing to a !arger %ifference*

Sch %onations contine to he!p impro&e the stan%ar% of !i&ing of the n%erpri&i!ege% in the

societ"*

7ea+t8ca&e:

8QC Bon%ation has %onate% m!tip!e %ia!"sis machines to hospita!s an% hn%re%s of

patients are treate% at %isconte% rates* Or goa! is to contine #ith sch %onations that #i!!

he!p patients for "ears to come* 8QC fon%ation has a!so %onate% an am'!ance #hich is

crrent!" 'eing se% in a &i!!age in aharashtra*


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E)'cation:

8QC Bon%ation recognies that he!ping to e%cate the n%erpri&i!ege% "oth of In%ia #i!!

res!t in a 'etter )a!it" of !ife for a!!* Since ;> 'oo+s anna!!"$

in a%%ition to sponsoring the "ear!" aca%emics of se&era! chi!%ren in remote areas*

Or focs #i!! contine to remain on ma+ing e%cation a&ai!a'!e to the n%erpri&i!ege% an%

on impro&ing the )a!it" of aca%emics for ta!ente% promising st%ents*

Customers of BVC:


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Se&!ices Offe&ings A Cont&act Logistics Di!ision

e offer the fo!!o#ing 'o)et of Ser&ices-

Srface o%e Door to Door E,press Ser&ice

Train o%e

Air o%e

!ti o%a!

B!! Trc+ Loa% 5 BTL7

arehosing an% Distri'tion

Pro@ect Cargo Logistics

Re&erse Logistics

Binishe% Goo%s Distri'tion 5BG7

Ser&ice Parts Logistics 5SPL7

E Com 8FC So!tions

Cstom C!earance

Tors an% Tra&e!s

8QC E,press

Ot8e& Di!isions:

Internationa! Breight Bor#ar%ing 5 Ocean Air E,ports Imports Cstoms

8ro+erage7


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L,r" Goo%s

Precios ems an% e#e!!er" 5Domestic7

Precios ems an% e#e!!er" - Internationa!

Pro@ect Logistics

BTX

Dangeros Goo%s

Net;o&9:

Throgh or strategic tie p #ith !tip!e Carrier Netra! Ser&ice Pro&i%ers operating a f!eet

of Containerie% &ehic!es p!"ing the Trn+$ Bee%er as #e!! as the Birst an% Last i!es* The

&ehic!es are a com'ination of .F Beet$ F Beet$ F> Beet$ an% ; Beet c!ose% containers* The

Trn+ rotes spans from De!hi 8anga!ore De!hi$ De!hi H"%era'a% Chennai an% the

Bee%er rotes span across an% #ithin &arios States in In%ia* The &ehic!es are monte% #ith

GPS e +eep trac+ of or &ehic!es an% in emergenc" sitations$ #e seam!ess!" ensre that

the ser&ices are nhin%ere%*

Or Srface net#or+ is agmente% #ith BTL Rai! Air Net#or+* e operate SLR an% QPUon the De!hi 8anga!ore an% the De!hi Chennai Rotes*


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Do&etai!e% #ith no#!e%ge Capita! IT Infrastrctre p!a"s a %ominating ro!e in shaping

=VC Logistics sccess* e are an IT sa&&" compan" an% ha&e in&este% hea&i!" on the IT

infrastrctre* Or IT 'ac+'one is or centra!!" hoste% ERP S"stem #hich is 'ase% on

ASP*Net an% icrosoft SL Operations$ 8i!!ing$ A%ministration$ Acconts$ Binance an%

Sa!es Borce Or%er anagement o%!es fnction seam!ess!" on!ine in Rea!-time* e ha&e a

Repositor" #herein scanne% PODs are store% for %ration of . "ears* e can integrate or IT

seam!ess!" into cstomers CR for rea! time response* GPRS ta!+s to or ERP s"stem for

greater &isi'i!it"* Or Trac+ an% Trace is rea! time*

Co"%+iances an) Sec'&it3:

e fo!!o# the R!e of the La# of the Lan%* e are ;>> comp!iant$ Stattor" an% Secrit" -

#ise an% #e ta+e pri%e in %iscoraging improper pa"ments $ i!!ega! transactions$ ensre that

a!! stattor" o'!igations are strict!" a%here% to$ con%ct 'ac+gron% chec+s$ primari!" to

ensre that #e hire peop!e #ith high Integrit" an% safegar% or cstomer:s precios cargo*

Or Net#or+ an% the B!eet are comp!ete!" secre%* Or #arehoses are as per internationa!

stan%ar%s


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Contro! To#er Spp!" Chain anagement So!tions

8oar% of %irectors


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;* U%a" Chinai Chairman anaging Director

r* Chinai is a strong 'e!ie&er in

he!ping the societ"* He has spporte% e%cation$

hea!thcare an% anima! #e!fare

rights* He is c!ose!" associate% #ith

se&era! NGO:s an% is acti&e in

socia! e&ents*

F* 8ha&i+ Chinai Director

8ha&i+ Chinai @oine% as %irector of

the compan" in F>;F*

He(s responsi'!e for imp!ementing

the compan"(s strategic &ision$

%e&e!oping 'siness a!!iances an%

'i!%ing strong teams*

8ha&i+ is acti&e in ma+ing a socia!

%ifference an% is the presi%ent of an

NGO of the Giants Grop*

8ha&i+ Chinai has prior e,perience

of #or+ing #ith se&era! companies

in e&ent management$ &entre

capita!$ pri&ate e)it" an% spp!"

chain management*

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.* Ra@esh Nee!a+anta Executive Director & CEO

Ra@esh Nee!a+anta has o&er F. "ears

of e,perience in Sa!es ar+eting$

Operations anagement$ ProfitCentre anagement$ Peop!e

anagement$ Cstomer Re!ations

anagement an% a host of other

organisation 'i!%ing en%ea&ors$

across the Logistics %omain*

He has #or+e% in mar)ee

organisations !i+e HCL Lt%

Reprographics Di&ision$ Rea! Qa!e

App!iances Lt%$ ABL Limite%$ UPS

et air Logistics$ Lee irhea%

P&t Lt% an% Arshi"a Internationa!

Lt%$ 'efore coming on 'oar% at

8QC Grop*

* Vogesh 8anso%e President - Marketing & Operations

Vogesh 8anso%e 'rings near!" F>

"ears of strategic spp!" chain

management e,perience an% ser&es

as Presi%ent of 8QC Logistics*

He starte% his career in Genera!

Cargo #ith G!o'a! Airfreight an% in

F>>. he ma%e inroa% to the Qa!a'!e

Cargo Logistics* In F>> he got on'oar% #ith 8QC

Logistics an% since then he has 'een

sccessf!!" 'een han%!ing the

Operations an% ar+eting of

Qa!a'!e Cargo*

http://bvclogistics.com/management_team.aspx#inline_content_3http://bvclogistics.com/management_team.aspx#inline_content_4http://bvclogistics.com/management_team.aspx#inline_content_3http://bvclogistics.com/management_team.aspx#inline_content_4


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=* rishnanan% 8asti+ar Qice Presi%ent - Internationa! ar+eting

He has @oine% 8QC Logistics in

F>>F as a Sa!es anager$ an% since

his association #ith the !ogistics ofGems e#e!!er" has 'een for ;

"ears$ the e,perience has 'een a +e"

for him to gro# in 8QC Logistics*

His e,perience spans across the

fo!!o#ing-• Preparing the sa!es

mar+eting '%get for the "ear*

• Target ne# cstomers$ %iscss

&o!mes$ o&erseas !ocation*• Co-or%inating #ith the tra%e

agencies for the !ogistics*• Co-or%inating #ith the

o&erseas conterparts for the

!ogistics*

* Paresh Das

Paresh has #or+e% in the sa!es mar+eting ro!e for o&er F "ears in

the %i&erse in%stries sch as

Engineering$ Gems e#e!!er" an%

Logistics*

Crrent!" he is #or+ing #ith 8QC

Logistics P&t Lt% hea%ing their

%omestic 'siness #hich is astrategic com'ination of 'oth the

Logistics an% G in%str"*

This profi!e is 'oth cha!!enging an%

gratif"ing ha&ing to #or+ not on!"

as a cons frien% of the in%str"$

e,p!aining the ease an% importance

of sing a Trste% Secre Logistics

Pro&i%er of o&er fi&e %eca%es #hich

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promotes the forma! mo%e of

Qa!a'!e Cargo Transportation*

a,im in !ife Jor+ Har%$ P!a"

erci!ess!"K

* 8harat 8a%ani Qice Presi%ent CHA

He has @oine% 8QC Logistics in

;


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of his career* His e,tensi&e

e,perience spans across the

fo!!o#ing-

• Binancia! contro! of the Grop -

Optimm anagement of

Bn%s$ Re%cing Interest

'r%en$ Loo+ing for areas of

Cost contro! etc$• To gi&e time!" IS reports to

the management #hich sha!!

gi&e them information to ta+e

strategic %ecisions regar%ing

the compan"


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;>* Nira& ogani Independent Director

He is the Chairman of the G tas+

force of CII an% in&o!&e% in man"

in%str" initiati&es sch as the

G@arat Hira 8orse$ Srat Rogh

Diamon% Sorcing an% Srat

Con&ention Center apart from

ser&icing of man" G$ 'an+ing

financia! an% other c!ients*

Cont&o+ to;e& o%e&ations


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Bnction of contro! to#er


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A#ar% an% achie&ements

8QC LOGISTICS 'ags the a#ar% for 9Transport an% Logistics 8siness of the Vear:

at the Branchise Sma!! 8siness A#ar%s F>;*

8QC 8rin+s Lanche% its Ne# Logo the Q Ce!e'rate% Comp!etion of ;

Sccessf! onths in No&em'er F>;*

8QC Logistics A#ar%e% 8est Logistics Compan" of F>;. at In%ia Internationa!

8!!ion Smmit 5II8S7*

8QC Logistics Recei&es 8est Logistics Compan" A#ar% at GTCI E,ce!!ence A#ar%s

in anar" F>;*

8QC Bon%ation(s Anna! Stationer" Donation in !" F>;.*

8QC Logistics !anche% Je#e!!er" EWI Han%'oo+K in Octo'er F>;F*

8QC Logistics Officia! Breight Bor#ar%er for IIS F>;;*

http://bvclogistics.com/news.aspxhttp://bvclogistics.com/news.aspxhttp://bvclogistics.com/news.aspxhttp://bvclogistics.com/news.aspxhttp://bvclogistics.com/news.aspxhttp://bvclogistics.com/news.aspx


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