Evaluation of purchasing process

EVALUATION OF PURCHASING PROCESS AT MRF LTD.

EXECUTIVE SUMMARY

In today’s world of intense competition and rapid dynamism, all the companies

worldwide are tuning their focuses on the customer. Suddenly, the customer had

succeeded in capturing all the attention of the companies towards him, so much so, that

the once famous maxim, “customer is the god” has become so true and relevant today.

There has been a “paradigm shift” in the thinking of these companies and none

other then the customer has brought this about.

Earlier there was a sellers market, since goods and services were in short supply

and the sellers use to call the shots. But, ever since the advent of the era of globalization,

there has been total transformation in the way the customers being perceived. Today,

marketers are directing their efforts in retaining the customers and customers’ base. Their

focus has shifted towards integrating the three elements people, service and marketing.

The customer’s importance has assumed imponderable proportions in today’s

world, because of the inherent value that the customers command can “make or break” a

company. It is the responsibility of every company to see that all its customers are

equally satisfied with them, for one single dissatisfied customer will tell atleast nine

others about the dissatisfaction and will spark off a chain reaction and spell doom for that

company. In such scenario, retention of the existing customers assumes diabolical

proportion. Research has thrown light on some important aspects of customer’s retention

it has been proved empirically that acquiring new customers can cost five times more

than the cost involved in satisfying the customers.

T. JOHN INSTITUTE OF MANAGEMENT AND SCIENCE, BANGALORE Page 1


INTRODUCTION

Far-reaching changes have been taking place in the Indian economy during the

recent Past, consequent to the opening up of our economy through globalization and

liberalization policies. The flood gates have been thrown open to allow international

competition for manufactured goods as well as services, marketing it a question of

survival of the fittest in any industry.

In the Present highly competitive economy which can be called a buyer’s market,

it is the customer who wields full power. He can make or wreck a company. No wonder

that the collective battle cry from sales and marketing people, retailers, who leasers and

advertising wizards alike is now ‘Serve the customer’, or ‘Delight the customer’. The

customer who was considered the ‘King’ is now treated almost like ‘God’, emulating the

highly successful marketing people of Japan. When consumer expectations become

higher and higher, superior market driven strategies or customer driven strategies and

their execution in the market are important.

Companies have to be fully customer oriented to succeed in the present

competitive scenario and, should think customer ‘live for customer’, ‘Smell Customer’,

and ‘build customer relations’.



ROLE AND SCOPE OF PURCHASING

Every manufacturing process requires materials, supplies and services. Before

men or machines can start turning out products, the materials must be on hand, and there

must be assurance of a continuing supply to meet production needs and schedules. The

quality of materials must be adequate for the intended purpose and suitable for the process

and the equipment used. If the material fails on any of these points, the results can be costly;

expensive delays, inefficient production, inferior products, broken delivery promises and

unhappy customers.

If a company wants to stay competitive and earn satisfactory profits, it must

procure materials at the lowest cost consistent with quality and service requirements. At the

same time, it must keep the administrative cost of buying and the cost of material inventories

at an economic level.

In some manufacturing industries, despite rising wages, the ratio of purchased

materials cost to total product cost is generally rising. This fact is due to in part to increasing

mechanization. It is also due, in great measure to the growing trend towards specialization in

manufacturing.

PURCHASING’S PART IN THE TOTAL SYSTEM

Purchasing is not an end in itself. Materials and supplies are bought because they

are needed. Because the activities of purchasing have the primary purpose of implementing

the work of other departments by procuring these goods, it is sometimes regarded as merely a

service function. Purchasing can be carried on under this concept with partial effectiveness.

The implication, however, is that purchasing considerations and subordinated to the aims,

desires and policies—or even to the preferences and whims—of the departments served.



RESPONSIBILITY FOR PURCHASING

Purchasing responsibility, as with other major management and operating functions, is

generally delegated to a specific person or a special department in the company organization.

In few concerns of any substantial size today do individual departments do their own buying,

of either production materials or operating supplies. In some cases, the specialized

purchasing department comes under the jurisdiction of the production manager. Most

companies set up purchasing, or materials, management as a completely separate department,

with the chief purchasing officer reporting directly to the executive who has the overall

responsibility for profitable operation, that is, the president, executive vice president, general

manager, or plant or divisional manager.

DEFINITION

Management control point where all significant purchases are monitored for the right

authorization of the right item, at the right price, quality, and quantity, from the right supplier

at the right terms, and at the right time.

Its major objectives are to

(1) Maintain the quality and value the firm's products,

(2) Minimize cash tied-up in inventory,

(3) Maintain the flow of inputs to maintain the flow of outputs, and

(4) Strengthen the firm's competitive position.

Purchasing may also involve

(a) Development and review of the product specifications,

(b) Receipt and processing of requisitions,

(e) Award of supply contracts,

(f) Inspection of good received, and

(g) Their appropriate storage and release.



MEANINGPurchasing managers/directors, and procurement managers/directors guide the

organization’s acquisition procedures and standards. Most organizations use a three-way

check as the foundation of their purchasing programs. This involves three departments in

the organization completing separate parts of the acquisition process. The three

departments do not all report to the same senior manager to prevent unethical practices

and lend credibility to the process. These departments can be purchasing, receiving; and

accounts payable or engineering, purchasing and accounts payable; or a plant manager,

purchasing and accounts payable. Combinations can vary significantly, but a purchasing

department and accounts payable are usually two of the three departments involved.

When the receiving department is not involved, it's typically called a two-way check or

two-way purchase order. In this situation, the purchasing department issues the purchase

order receipt not required. When an invoice arrives against the order, the accounts

payable department will then go directly to the requestor of the purchase order to verify

that the goods or services were received. This is typically what is done for goods and

services that will bypass the receiving department. A few examples are software

delivered electronically, NRE work (non reoccurring engineering services), consulting

hours, etc...

Historically, the purchasing department issued Purchase Orders for supplies, services,

equipment, and raw materials. Then, in an effort to decrease the administrative costs

associated with the repetitive ordering of basic consumable items, "Blanket" or "Master"

Agreements were put into place. These types of agreements typically have a longer

duration and increased scope to maximize the Quantities of Scale concept. When

additional supplies are required, a simple release would be issued to the supplier to

provide the goods or services.



RESEARCH METHODOLOGY

1. The research was conducted through personal interaction.

2. The primary data was collected through personal interview and the secondary

data was collected through the website of the company and journals.

SAMPLING DESIGN:

100% coverage was difficult within limited period of time. Hence, personal discussion

and telephonic discussion method was adopted for the purpose of the study.

DATA COLLECTION

Most of the data was collected through discussion, working on the floor with the staff

and gaining inputs from them.

TYPES OF DATA

Primary Data: Questionnaire and personal interviews to higher level managers.

Secondary Data: Company Website, In-house Magazine, Company Journals and Reports.

DESIGN OF THE STUDY

RESEARCH PROBLEM

The topic for the study was “Evaluation of Purchasing Process” at Madras Rubber

Factory Limited, Medak - Hyderabad

PURPOSE OF RESEARCH

The Project helps the Company to evaluate the purchasing process in depth and

understand the purchasing responsibility as with other major management operating

functions. The study also provides a platform to study and evaluate the suppliers of MRF

Ltd. In accordance with the purchasing cycle.



SCOPE OF THE STUDY

1. Useful for academic purpose and further reference.

2. Provides information about the functioning of the tyre industry in India.

3. The project helps to put into practice the theoretical aspects of the study into

reality.

4. It will also serve as a foundation upon which further can be planned.

OBJECTIVES

1. To study in detail the functioning and working of the Purchase Department at

MRF Ltd.

2. To review the existing purchasing cycle at MRF.

3. To study the supplier management at MRF in detail.

4. To evaluate the suppliers management with respect to suppliers evaluation.

5. To provide valuable inputs to the organization with reference to the analysis

made.

LIMITATIONS

1. Due to the time constraint, the Managers could not give more information at

times.

2. Level of accuracy of the results of research is restricted to accuracy level

which the Staff has given their inputs.

3. Market forces can bring changes which are unavoidable.

4. Limited number of employees who were selected for the survey of this study.

5. Some core data could not be collected due to confidentiality policies of the

company.



COMPANY PROFILE

Madras Rubber Factory Limited

Type Public

Founded 1949(chennai)

Founder(s) K M Mammen Pillai

Headquarters Chennai, India

Area served India

IndustryCar tyres, Motorcycle

Tyres, Bus/Truck tyres

FinancialsTotal Income - Rs. 56982 Million ( year ending Sep 2009)

Net Profit - Rs. 2563.2 Million ( year ending Sep 2009)

Website www.mrftyres.com

Key PersonsChairperson – K M Mammen

MD - Arun Mammen


http://www.mrftyres.com/

http://en.wikipedia.org/wiki/Website

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Entrepreneur

http://en.wikipedia.org/wiki/Types_of_business_entity


ABOUT MRF LTD.

MRF (Madras Rubber Factory) is India’s No.1 tyre manufacturing company. It was

started in the year 1946 by K M Mammen Mappillai as a small toy ballon unit. Much

later in November 1960 it ventured in manufacturing of tyres. The company entered a

technical collaboration woth Tire & Rubber company, USA.

In 1964 it established an overseas office at Beirut, Lebanon to tap the export market.

This was amongst India’s very first efforts on tyre exports.

In 1989 the company collaborated with Hasbro International USA, the world’s largest toy

maker and launched Funskool India. In the same year it entered into a pact with

Vapocure of Australia to manufacture polyurethane paint formulations and with Pirelli

for MUSCLEFLEX conveyor and elevator belting.

Currently MRF exports tyres to over 65 countries including America, Europe, Middle

East, Japan, and Pacific region. It presently has overseas offices in Dubai, Vietnam and

Australia.

PRODUCTS

Tyres- It manufactures various tyres for passenger cars, two-wheelers, trucks, buses,

tractors, light commercial vehicles and off the road tyres.

Conveyor belts- It manufactures conveyor belts with wide range of grades. It has a range

of applications in industries like mining, ports, thermal power plants, cement plants,

fertiliser, steel, etc. It exports the products to 15 countries.

MRF Tyres & Services is one stop shop providing range tyres. Currently it operates 90

franchisees across the country



KEY EXECUTIVES

S.No Name Designation

1.K M Mammen Chairman

2. K M Mammen Managing Director

3. Arun Mammen Managing Director

4. Ravi Mannath Company Secretary

5. K C Mammen Director

6. Ashok Jacob Director

7. Salim Joseph Thomas Director

8. K M Philip Whole Time Director

SWOT ANALYSIS

Strengths

1. Established brand names (key in the replacement market)



2. Extensive distribution networks - For example, Apollo Tyres has more than 118

district offices, 12 distribution centre and 4,250 dealers.

3. Good R&D initiatives by top players.

Weaknesses

1. Cost Pressures - The profitability of the industry has high correlation with the

prices of key raw materials such as rubber and crude oil, as they account for more

than 70% of the total costs.

2. Pricing Pressures – The huge raw material costs have resulted in pressure on the

realizations and hence, the players have been vouching to increase the prices.

3. Highly capital intensive - It requires about Rs 4 billion to set up a radial tyre

plant with a capacity of 1.5 million tyres and around Rs 1.5-2 billion, for a cross-

ply tyre plant of a 1.5 million tyre-manufacturing capacity.

Opportunities

1. Growing Economy leads to Growing Automobile Industry leads to Increasing

OEM demand that in turn leads to Subsequent rise in replacement demand

2. Creation of road infrastructure has given, and would increasingly give, a

tremendous fillip to road transportation, in the coming years. The Tyre industry

would play an important role in this changing road transportation dynamics.

Threats

1. Continuous increase in prices of natural rubber, which accounts for nearly one

third of total raw material costs.

2. Cheaper imports of Tyres, especially from China, selling at very low prices, have

been posing a challenge.



INDUSTRY PROFILE

Established in 1946 as a small toy balloon manufacturing unit in a shed at Tiruvottiyur,

Madras (now Chennai), MRF ventured into the manufacture of tread rubber in the year

1952. The quality of the product was so high that by close 1956 MRF had become the

market leader with 50%share of the tread-rubber market in India. In 1961, MRF entered

into tyre manufacturing in collaboration with the Mansfield Tire & Rubber Company of

USA. Since then MRF has come along way towards achieving greater heights in the

automotive tyre industry, with 6manufacturing units in India. It has a huge distribution

network of 2,500 outlets within India and exports to over 65 countries worldwide.

MRF is the leading manufacturer of tyres for almost all segments. Being driven

by technology and product innovation, every tyre that comes out is of the highest

standards and tested to weather the toughest conditions on any road. With more than 85

tyre variants, MRF holds the highest market share of 22% in terms of sales volume in the

tyre industry.

The level of economic activity, performance of domestic automotive industry, and

the fairing of the transport sector directly influence the performance of the tyre industry

in India. The tyre industry is linked to performance of the original equipment

manufacturer in the automotive industry & also the replacement segment. With the

replacement segment dominating the overall tyre demand in India, the industry remains

inherently vulnerable to economic cycles. While adoption of radials as become the norm

in the car segment, in the bus and truck tyre segment, its acceptance is still limited. Bus

and truck radialisation could emerge in the long term as the quality of roads improves

and the restrictions on overloading are better enforced.



OVERVIEW OF THE INDIAN TYRE INDUSTRY

The Rs.20,000 crore Indian Tyre Industry, is highly raw material intensive and

predominantly a Cross Ply (or Bias) tyre manufacturing industry. It is highly

concentrated wherein 10 large manufacturers account for over 95% of the total tonnage

production of 11.35 lakh M.T. It produces all categories of tyres, except Snow Tyres and

Aero Tyre for which there is no demand domestically.

The origin of the Indian Tyre Industry dates back to 1926 when Dunlop Rubber Limited

set up the first tyre company in West Bengal. MRF followed suit in 1946. Since then, the

Indian tyre industry has grown rapidly.

Transportation industry and tyre industry go hand in hand as the two are interdependent.

Transportation industry has experienced 10% growth rate year after year with an absolute

level of 870 billion ton freight. With an extensive road network of 3.2 million km, road

accounts for over 85% of all freight movement in India.

Tyre majors have hiked prices. Moreover, due to shortfall in domestic supply and

increasing gap between domestic and international prices of rubber, the tyre

manufacturers have increased the import of natural rubber. According to estimates by

Automotive Tyre Manufacturers Association (ATMA), tyre producers are likely to

import 50% of their total natural rubber consumption due to tight domestic supply. With

profitability of tyre companies having a strong correlation to raw material prices and as

these companies operate on thin margins, this would remain an area of concern.



Tyres by Type

Indian tyre industry produces the complete range of tyres required by the Indian

automotive industry, except for aero tyres and some specialized tyres. Domestic

manufacturers produce tyres for trucks, buses, passenger cars, jeeps, light trucks, tractors

(front, rear and trailer), animal drawn vehicles, scooters, motorcycles, mopeds, bicycles

and off-the-road vehicles and special defence vehicles.

1. Truck and Bus Tyres

The truck and bus tyre segment accounted for 19% of tyres produced in India in FY2003.

Every truck/bus manufactured generates a demand for seven tyres (six regular and one

spare) as against three in the case of two-wheelers and five for passenger cars. In

addition, the price of a truck tyre is significantly higher than that of a passenger car tyre

(roughly 10 times) or a motorcycle tyre. Thus the demand multiple emanating from the

commercial vehicle segment is highest in value terms.

2. Passenger Car Tyres

The passenger car tyre segment accounted for 17% of all tyres produced in India in

FY2003. With passenger car production witnessing a growth of 12% in FY2003 over the

previous year, OEM demand accounted for about 33% of the total sales that year. The

replacement market accounted for around 63% of the total sales of passenger car tyres in

FY2003. Exports accounted for 4% of the total passenger car tyre demand in FY2003.

With the stock of cars increasing, replacement demand is likely to continue.

3. Motorcycle Tyres

Motorcycles accounted for 76% of two-wheelers sold in the domestic market in FY2003.

Motorcycle tyres constitute the largest segment of the domestic tyre industry (29% of

total tyre demand in FY2003). The replacement market accounted for around 49.8% of

the total motorcycle tyres sold in FY 2003, while OEM demand accounted for around

50%.



MAJOR PLAYERS AND MARKET SHARES

Major players include MRF Ltd. Which is the market leader (22% market Share)

followed closely by Apollo tyres limited (21% market share). The other players are J K

Tyres and Industries Ltd. (18%), Ceat Ltd. (13%), Birla Tyres (10%), Good year (7%)

and Bridgestone (5%).



PRODUCT PROFILERADIAL TYRES

Wanderer ZGT ZCC

ZVT ZVTS ZGP

BIAS PLY TYRE PATTERNS

LEGEND SM – 12 SW - 99

ESTATE BIGROVER TWINTREAD



MOTOR BIKES-FRONT

RIB/RIB PLUS ZAPPER FS ZAPPER FM

MOTOR BIKES-REAR

ZAPPER VYDE MOTO-D ZAPPER-Q

SCOOTER-FRONT

NYLOGRIP SCOOTER NYLOGRIP PLUS FE ZAPPER FG

SCOOTER-REAR

NYLOGRIP 001 NYLOGRIP SCOOTER ZAPPER-D (SCOOTER)



OTHERS

MUSCLEROK MUSCLEROK MUSCLEROK

EARTHMOVERS SMOOTH GRADERS

TRUCKS/BUSES

SUPERLUG-50 M-77 MUSCLEROK-X

STEEL MUSCLE S1R4 STEEL MUSCLE S1L6



AWARDS & ACHIEVEMENTS

NSMRF voted the "Most Trusted" Tyre company in India by TNS 2006 global CSR study.

J D POWER ASIA PACIFICMRF won the award for customer satifaction not once but 6 timesin the last 7 years.

CAPEXILMRF won the award for exports.



THE MRF DESIGN PROCESS

The Design process at MRF starts from the customer - inputs from individual customers

are compiled by marketing and given to Corporate Technical MRF's R&D and Product

Development Division or vehicle specific requirements are received from the OE

customer.

MRF's team of 300 engineers and scientists gives MRF its enormous strength in product

design. Requirements received, a team now works on converting the customer input into

a Design Concept.

MRF uses cutting - edge technologies in predictive testing and design validation before it

leaves the drawing board. These advances have significantly brought down the time to

market for new designs.

Advanced raw materials are tested and approved in our NABL accredited laboratories.

MRF works closely with global suppliers in using the latest developments in materials

across the globe. Our laboratories which have the very latest in testing equipment closely

monitor the quality of the material going into our tyres at the time of approval and

regularly after that.

Tyres are now handed over to the Vehicle Dynamics Group, who now validates the

design on the vehicle. These tests are done at the test track in a series of manoeuvres at

various speeds, pushing the tyres to the limits of its capabilities.

MRF also tests tyres on fleets across the country to ensure that the tyres have endured

successfully all the types of roads on which our customers travel daily. Race Tracks and

Indian Roads are our laboratories.

Only after this do we give any tyres to the customer - all global players manufacturing a

global class of vehicles. MRF has been designing tyres this class of vehicles for more

than a decade now. MRF tyres have met the demanding requirements of these vehicles,

backed by an R&D team which is completely in-house and self reliant.



GENERAL PRACTICES AT MRF

ORGANIZATION CULTURE

MRF exhibits a very free and friendly environment where both friendship and

performance is valued and appreciated. The employees have a strong feeling of

belongingness as well there exists a ruthless focus on goal achievement. The employees

are focused and have a clear vision of the Company’s future.

ORGANIZATIONAL STRUCTURE

At MRF, the jobs are formally divided, grouped and coordinated as per the skills and

capabilities of the individuals. The organization exhibits a decentralized pattern wherein

decisions are at the lower level personnel who are directly dealing with the job or

activity. The organizational structure is a mixture of mechanistic model and organic

model.

The structure is characterized by extensive departmentalization, low level of

formalization, possesses a comprehensive information network and relies on participative

decision-making.

COMMUNICATION NETWORK

Each statement of MRF exhibits SAP which helps Departmental heads to communicate

with each other. It is the most quick and convenience way to share important information.

It also helps to file day to day report to the divisional head.

SPAN OF CONTROL

Span of control is the number of employees a Manager can effectively and efficiently

manage. MRF exhibits a narrow or small span of control. Hence, employees of MRF are

effectively managed by the Manager and they also get enough time to provide the

necessary leadership and support.

BENCH MARKING

At MRF, benchmarking is an important task, which is carried out in every department,

where the company searches for the best practices amongst its competitors and non-

competitors that lead to their superior performance and continuous improvements are

done.



DEPARTMENTAL STUDY

HUMAN RESOURCE DEPARTMENT

INTRODUCTION

Human Resource Department is concerned with the people working in the organization.

This department handles activities like recruitment, identifies and evaluated training

needs of individuals, payroll.

Matters relating to labor welfare and labor disputes are also handled.

OBJECTIVE

To bring in organization culture, this encourages and rewards exceptional

performance.

Fosters team work and supports balance attitude to work and personal life.

FLOW OF AUTHORITY


Sr. Manager Personnel and Administration

Security Guards (17)

Head Security

Security OfficerPersonnel and Admin Executive (2)


FUNCTIONS

RECRUITMENT

Recruitment of Executives and Managers is done at the corporate office in Chennai.

Recruitment of staff and casual employees is done at the unit level.

In MRF, any new employee is appointed for a probation period of six months. After this

period based on the Performance Appraisal administered, he/she may be confirmed in the

company.

MRF believes that once an appropriate candidate is selected, half the job is done.

Sources of Recruitment

Advertisement

Data Bank

References

TRAINING

Training is provided through educational or training activities.

The educational, training and experience requirements for positions which

perform activities affecting quality are identified.

Appropriate training is provided either in-house or externally.

Employee training records are established and maintained.

The effectiveness of training is evaluated and employee training records are

reviewed to determine future training requirements.



Compensation and other Pay Roll practices

Payrolls-

This is the function which enables payment to the employees. An employee payroll will

contain elements as follows:

Payment Deduction Benefits

Basic Provident Fund(PF) Reimbursement Medical

Expenses (RME)

House Rent Allowance Employees State

Insurance(ESI)

Conveyance Allowance

Dearness Allowance Income Tax Deduction Lunch Allowance

Attendance Bonus Any Loans taken

Entertainment Allowance LIC Premium

PEP(Performance

evaluation Payment)

Labor Welfare Fund (LWF)

PIP(Profit Incentive

Payment)

Payrolls are initially managed by the HR department (Preparation of salary data pay

slips) and then handed over to the Finance department for payments. Final payment is

given to the employees through Bank.

Madras Rubber Factory Ltd. employs both Permanent and casual workers. MRF has

stopped recruiting permanent workers. They mostly hire causal workers as per the

requirements. This has helped them in cost cutting.



FINANCE DEPARTMENT

INTRODUTION

This department takes care of all the financial and commercial aspects of the company.

Allocation of funds and proper utilization of funds is the main objective of this

department. All major records and documentation is done by this Department at MRF

Ltd.

OBJECTIVE

Manage cash and funds in an effective and efficient manner

Helps to know the financial status of the company.

Payment of Salary to the employees and other expenses of the company.

FUNCTIONS

Funds availability and Management

PAYMENTS (Accounts Payable) SALES (Accounts Receivables)

RAW MATERIAL (Inventory) MANUFACTURING (Finished Goods)

Preparation and Monitoring Business Plan and Forecasts

In MRF, the financial year begins in March and ends in April. Every year the

company evaluates the business plan for the year and prepares new business plan

for the next year.

Finalization and Audit of Accounts

At the end of the year the Finance Department prepares the Balance Sheet and the

Profit and Loss Account. It is then submitted to the corporate Head Office at

Chennai.



Statutory Payments

The various statutory payments like PF, ESI, Service tax, Label Registration fee,

renewal licenses etc are paid by the department.

Payment of Salary

The salary voucher is passed by the Accounts Department and is sent to the Bank.

For casual labors the payment is done in hand.

Monthly MIS Reports and audits are prepared and sent to the Head Office.

FLOW OF AUTHORITY


Manager (Accounts)

Junior Officer (Cashier) Junior Officer (Commercial)


MAINTENANCE DEPARTMENT

INTRODUCTION

Maintenance department includes the Electrical and Mechanical tem of MRF. The

maintenance department has to see to the proper functioning of machinery at the various

plants of the brewery.

OBJECTIVES

To achieve low down time

To reduce the cost of maintenance

To save electricity, gas and furnace oil.

To reduce the loss of utilities.

To maintain a continuous production process.

FLOW OF AUTHORITY


Plant Engineer

Maintenance Engineer (Mechanical)

Maintenance Engineer (Electrical)

Electricians (3)Welders (2) Fitters (2)


FUNCTIONS

1) Preventive Maintenance- Is done on a weekly, monthly and annual basis.

This is done so as to prevent any sort of breakdown.

2) Predictive Maintenance- Is done when any fault is predicted to occur.

3) Breakdown Maintenance- Is done when there is a breakdown of any

machinery.

TYPES OF MAINTENANCE

1. Preventive Maintenance: “Prevention is better than cure” same thing is applied

here at MRF. Basically this maintenance is to prevent machines from getting

damaged in future. Servicing of machines is done irrespective whether machine is

working or not. Then complaints from workers are entertained. A check list is

prepared of different machines so as to which machine is to service at what

periods i.e. on weekly basis, monthly basis, or yearly basis.

2. Predictive Maintenance: It is a prediction about the requirement of servicing for

any machinery at particular stage or period. This maintenance is based on past

records and experience. This is done to reduce uncertain breakdown of

machinery.

3. Breakdown Maintenance: This maintenance is performed when machinery breaks

down. Here either machinery is repaired or replaced with other. Preventive

maintenance is directly related to breakdown maintenance. More preventive

maintenance means less Breakdown of machinery.



QUALITY ASSURANCE DEPARTMENT

INTRODUCTION

The Quality Assurance (QA) department inspects the quality of raw materials,

intermediate products, packaging materials and finished products. The laboratory has

standard testing techniques and instruments to perform various tests.

OBJECTIVES

To control and assure the quality of raw materials till the final product is

produced.

To carry out 100% inspection of components and finished products.

FLOW OF AUTHORITY

FUNCTIONS

Incoming raw materials inspection

Final Inspection Dispatch

Documentation

Customer Feedback and Research.


Manager (Quality Assurance)

Shift BrewerMicrobiologists(2)


SUPPLY CHAIN DEPARTMENTPURCHASE DEPARTMENT

OBJECTIVE

The main objective of the Purchase Department is the procurement of raw materials in

the least possible lead time and minimum cost.

FLOW OF AUTHORITY

FUNCTIONS

Once it receives the bill of material (B.O.M), it checks with the stores and the non

available materials are ordered.

Follow up with the vendors for the status of delivery of raw material.

Negotiate deals and prices of the purchases with the local vendor.

Communicate the rejection information to the vendor with proper DMR

(Defected Material Report)

Communicate the change in specification to the vendor.

Conduct vendor on site audit.


Stores and Purchase Manager

Stores and PurchaseExecutive

Stores Assistant


STORES DEPARTMENT

OBJECTIVE

Supply material on the production floor on time.

Reduce the inventory cost

Proper flow of materials so that the production process is not hampered.

FUNCTIONS

Receives the material in the inspection area.

Checks the consignment whether it is in good or bad condition and also the

quantity ordered is verified.

Records the number or units handled and moved.

Sorts and stores items according to specification and does the physical

management of goods.

Daily/Weekly inventory updates. Physical inventory check at the end of the

financial year is undertaken by this department.

Issues material on the production floor according to the requirement

Comparative statements of rates are done whenever quotations are received from

two or more vendors.

DISPATCH

OBJECTIVE

Ensures delivery of finished goods.

Dispatch and transportation of finished goods.

FUNCTIONS

Communication the mode of transportation to the distributor.

Arranging transportation and dispatching of finished goods as per packaging slip

and invoice.

Payment confirmation



PURCHASING PROCESS AT MRF LTD.

Operating a purchasing department at MRF to meet these responsibilities involves a

variety of detailed assignments, of both an administrative and a routine nature.

Typical activities of even the simplest purchasing program include:

1. Basic Information

Maintaining purchase records

Maintain price records

Maintaining stock and consumption records

Maintaining vendor records

Maintaining specification files

Maintain catalog files

2. Research

Conducting market studies

Conducting material studies

Conducting cost analysis

Investigating supply sources

Developing supply sources

Developing alternate materials and sources

3. Procurement

Checking requisitions

Securing quotations

Analyzing quotations

Choosing between contract or open-market purchase

Scheduling purchases and deliveries

Negotiating contracts

Issuing purchase orders

Checking legal conditions of contract

Following up for delivery

4. Materials Management



Maintaining minimum stocks

Improving inventory balance

Improving inventory turnover

Transferring materials

Consolidating requirements

Avoiding excess stocks and obsolescence

Standardizing packaging

Making periodic reports of commitments

DOCUMENTS MAINTAINED IN PURCHASE DEPT.

1 a. Advance Files:-

The file which maintains a record of the advance asked for accounts.

The supplier asks some advance for their product before delivery, with purchase order.

The percentage depends on the supplier’s interest.

1. b. Advance Executed:-

The file which maintains a record of the payment sent to the vendor.

The payments done for the supplier as advance for the product with the purchase

order before proforma of invoice.

1. c. Advance Recovered:-

The file which maintains a record of the items received & the

accounts settled.

2. Civil Major Expansion Jobs:-

The file which maintains a record of the civil expansion jobs within

the company environment.

Example- Supply of Chimney

Blow down pipe Trench 55 RMT

Office mezzanine floor shipping expansion.



3. Civil order major jobs:-

The file which maintains a record of the civil orders of the jobs. The

purchase order will be sent to the vendor for the particular civil job.

4. Executed high value purchase order:-

The file that records the executed purchase order of high valued

items.

Example- Boiler Chimney

HV-84 mill bearing- housing assly

DG KT 3067 Cummins engine.

5. a. Executed orders with file note:- (Intimation)

The file that records the executed purchase order with a file note or a

intimation. The intimation is given to the company that some details are either

missing or they are wrong and hence giving an intimation to change them.

5. b. Executed orders with file note:- (Violation)

The files that records the executed purchase order with a file note i.e.

violation note. The purchase order is cancelled due to some reasons by the company.

6. a. Purchase order of raw materials:-

The file that records the purchase order copies of raw materials

which are used for the production of tyres.

Example- Tyre bead wire

High speed diesel

Mineral turpentine.

b. Purchase order of spare parts:-

The file that records the copies of purchase order of spare parts

required for the production purpose.

Example- Floor cleaning liquid

Water pump to inlet manifold hose-P4.

Electronic ballast- opal- ES40S



c. Purchase order of repairs:-

The file that records the copies of purchase order of the repairing done for

the existing machines and equipments of the company.

Example- Repairing of Banbury body lub.

Repairing of B. bearing.

d. Purchase orders:-

The file that records the copies of the purchase order of every material that is

been purchased.

e. Purchase order- Service:-

The file that records the copies of the purchase order of the service taken by

other companies.

Example- Annual maintenance contract for thickness indication system on calendaring

machine.

7. Vendor detail forms:-

These files contains the details about the vendors of the business. It has a

chronological set of vendors from A to Z.



THE PURCHASE CYCLE


Identification of need

Selecting suppliers, issuing

requests for quotations,

receiving and analyzing

quotations, and selecting

the right supplier.

Receiving and

analyzing purchase

requisitions.

Determinin

g the right

price.

Issuing

Purchase

Orders.

Following

up to assure

delivery

dates are

met.

Receiving and

accepting goods.

Approving

supplier's

invoice for

payment.


1. BASIC FORMS AND PROCEDURES

A using department indicates its need for material on a requisition. MRF uses a stores

requisition to obtain materials that are in regular use in the plant and that are carried as

normal stock. This goes directly to the stores department and the requirements are

supplied from there. A purchase requisition is used for materials that have to be ordered

from suppliers. The person who needs the material fills in either type of form with the

material name or code identification, the amount needed, and the desired delivery date.

Before sending the requisition to either stores or purchasing, the person making the

requisition must have it signed by a supervisor authorized to approve the expenditure.

Sometimes purchasing is based directly on a bill of materials, which lists every item in a

company’s end product. When a manufacturing schedule is set by production planning,

purchasing is notified and can set up its purchasing schedule or program to correspond

with production plans. It receives a copy of bill of materials, on which are indicated those

items that are not on hand or ordered. This tabulation serves the same purpose as a whole

series of requisitions.

2. ORDERING

The various processes of negotiation and decision that take place between the time at

which a purchase is authorized and the time at which the order is issued. About the only

routine procedure in the process as part of a purchasing system is the invitation to

suppliers to bid and the evaluation of bids received. In MRF, when such invitations are

issued prior to ordering, the form used is generally called a request for quotation, and no

obligation to buy from the supplier quoting the lowest price is implied.

The purchase order is the instrument by which goods are procured to fill a requirement. It

expresses in specific language the agreement between the buyer and the vendor. Once

accepted, it has the legal force of a binding contract.

The essential information in MRF purchase order includes name and address of

purchasing company, identifying order number, date, name and address of vendor,

general instructions(marking of shipments, number of invoices required, and so forth),

delivery date required, shipping instructions, description of materials ordered and the



quantity, price and discounts, and signature. Terms and conditions are printed on the back

of the form. The purchase order must bear some authorized signature-usually that of a

purchase manager or buyer.

Many companies try to get written acceptance of the order from the vendor. This is

sometimes in the form of an extra copy of the order, known as the acknowledgement

copy.

Simple purchase order systems usually require at least three copies of order.

a. the original, sent to the vendor

b. the acknowledgement copy just mentioned

c. and a purchasing department file copy.

But in MRF they maintain only two copies of purchase order, the original copy goes to

the vendor, and a duplicate copy of that will be filed for the department purpose.

3. CLEARING THE ORDER

Usually, however, the purchasing department is involved in all of these duties, on the

general principle that procurement responsibility ends only when a satisfactory delivery

has been made and materials are actually on hand for use, and when the buyer’s

obligation to the vendor has likewise been satisfied, completing the contract.

4. ROUTINE FOLLOW-UP

Follow-up is selective. The mechanism for follow-up is a file of open orders arranged in

numerical sequence so that those that are longest outstanding are in the front of the file,

giving quick visual indication of the oldest ones. This, of course, is not an accurate

indicator of the delivery dates requested or promised. Some further coding or signaling

device is necessary.



5. CHANGE ORDERS

It sometimes becomes necessary to make changes in the original order- changes in

quantity, scheduling, or specifications; changes authorizing some alternative product; or

any other of the scores of possible correction that may arise with changing design and

changing conditions of business. Many companies accomplish changes by

correspondence. MRF makes use of a form known as the change order or change notice.

6. RECEIVING

The receiving department is usually an adjunct of the stores department, which may or

may not be a part of the purchasing department. Its functions are to receive incoming

goods, signing the delivery notice presented by the carrier or the supplier in connection

with the shipment; to identify and record all incoming materials; to report their receipt to

the purchasing department and to the stores, using, or inspection departments as required;

and to make prompt disposition of the goods to the appropriate department.



SUPPLIER MANAGEMENT

MAKE OR BUY DECISION

DEFINITION

Determination of whether it is more advantageous to make a particular item in-house, or

to buy it from a supplier. The choice involves both qualitative (such as quality control)

and quantitative (such as the relative cost) factors.

MEANING

The make-or-buy decision is the act of making a strategic choice between producing an

item internally (in-house) or buying it externally (from an outside supplier). The buy side

of the decision also is referred to as outsourcing. Make-or-buy decisions usually arise

when a firm that has developed a product or part—or significantly modified a product or

part—is having trouble with current suppliers, or has diminishing capacity or changing

demand.

Make-or-buy analysis is conducted at the strategic and operational level. Obviously, the

strategic level is the more long-range of the two. Variables considered at the strategic

level include analysis of the future, as well as the current environment. Issues like

government regulation, competing firms, and market trends all have a strategic impact on

the make-or-buy decision. Of course, firms should make items that reinforce or are in-

line with their core competencies. These are areas in which the firm is strongest and

which give the firm a competitive advantage.

The increased existence of firms that utilize the concept of lean manufacturing has

prompted an increase in outsourcing. Manufacturers are tending to purchase

subassemblies rather than piece parts, and are outsourcing activities ranging from

logistics to administrative services.

Considerations that favor making a part in-house:

Cost considerations (less expensive to make the part)

Desire to integrate plant operations

Productive use of excess plant capacity to help absorb fixed overhead (using

existing idle capacity)

Need to exert direct control over production and/or quality

Better quality control



Design secrecy is required to protect proprietary technology

Unreliable suppliers

No competent suppliers

Desire to maintain a stable workforce (in periods of declining sales)

Quantity too small to interest a supplier

Control of lead time, transportation, and warehousing costs

Greater assurance of continual supply

Provision of a second source

Political, social or environmental reasons (union pressure)

Factors that may influence firms to buy a part externally include:

Lack of expertise

Suppliers' research and specialized know-how exceeds that of the buyer

cost considerations (less expensive to buy the item)

Small-volume requirements

Limited production facilities or insufficient capacity

Desire to maintain a multiple-source policy

Indirect managerial control considerations

Procurement and inventory considerations

Brand preference

The two most important factors to consider in a make-or-buy decision are cost and the

availability of production capacity. Cost considerations should include all relevant costs

and be long-term in nature. Obviously, the buying firm will compare production and

purchase costs. Elements of the "make" analysis include:

Incremental inventory-carrying costs

Direct labor costs

Incremental factory overhead costs

Delivered purchased material costs

Incremental managerial costs



Any follow-on costs stemming from quality and related problems

Incremental purchasing costs

Incremental capital costs

Cost considerations for the "buy" analysis include:

Purchase price of the part

Transportation costs

Receiving and inspection costs

Incremental purchasing costs

Any follow-on costs related to quality or service

CONSIDERATION IN SUPPLIERS SELECTION

PROFESSIONALISM

What constitutes 'Professionalism' depends on the business environment and may need to

be judged by other people in the same field ('fellow professionals'/domain experts).

FLEXIBILITY & COMMITMENT

How well will they handle schedule upsets, changes to requirements etc? This may be

best judged

in informal discussion and by checks with reference clients.

OPEN/FRIENDLY

•How honest are they about problems faced & overcome?

•Are they suitably discrete about their other clients?

•Do you feel comfortable with them?

•Do they appear to communicate openly and freely internally?

INTEGRITY

•Do they stand by their offerings?

•Are they consistent in what they say:: -

- during trade-off negotiations? (e.g. if budgets are limited)

- about their capabilities?

•Are they happy to be technically/financially audited if necessary?

UNDERSTANDING YOUR BUSINESS GOALS



•Does the supplier really understand why you want to do this project, from a Business

perspective?

PROACTIVE

•Do they offer sensible & appropriate advice on potential solutions?

UNDERSTANDS BUSINESS ENVIRONMENT

•Are they willing to work with other 3rd Party development environments and yours?

•Where relevant, the supplier should understand multilingual requirements for content

delivery and its impact on maintenance complexity.

SUPPLIER EVALUATION

Supplier evaluation is a term used in business and refers to the process of evaluating and

approving potential suppliers by factual and measurable assessment. The purpose of

supplier evaluation is to ensure a portfolio of best in class suppliers is available for use.

Supplier evaluation is also a process applied to current suppliers in order to measure and

monitor their performance for the purposes of reducing costs, mitigating risk and driving

continuous improvement

PROCESS

Supplier evaluation is a continual process within purchasing department and forms part

of the pre-qualification step within the purchasing process, although in many

organizations it includes the participation and input of other departments and

stakeholders.. It often takes the form of either a questionnaire or interview, sometimes

even a site visit, and includes appraisals of various aspects of the supplier's business

including capacity, financials, quality assurance, organizational structure and processes

and performance. Based on the information obtained via the evaluation, a supplier is

scored and either approved or not approved as one from whom to procure materials or

services. In many organizations, there is an approved supplier list (ASL) to which a

qualified supplier is then added. If rejected the supplier is generally not made available to

the assessing company's procurement team. Once approved, a supplier may be

reevaluated on a periodic, often annual, basis. The ongoing process is defined as supplier

performance management.

BENEFITS AND DRAWBACKS



There are various benefits associated with an effective supplier evaluation process such

as mitigation against poor supplier performance or performance failures. The benefits

typically include sourcing from suppliers that provide high standards of product and

service levels whilst offering sufficient capacity and business stability. Supplier

evaluation can help customers and suppliers identify and remove hidden cost drivers in

the supply chain. The process of evaluating performance can motivate suppliers to

improve their performance.

Associated challenges with supplier evaluation include resource and cost commitments in

establishing and maintaining a robust and effective system, challenges with specifying

and gathering meaningful and relevant information, data integrity, scorecards that do not

get at the root causes of supplier problems, and subjective or inconsistent scoring which

may result in inaccurate assessment..Another challenge is making sure that evaluation of

current suppliers goes beyond measurement to actual performance improvement by

providing feedback to suppliers on their performance and working on continuous

improvement opportunities. Thus, management commitment to and support of a supplier

evaluation process is essential.



Analysis and Graphs:

1. Since when you are supplying materials for MRF?

Table 1

Frequency Percent Valid Percent Cumulative Percent

0 to 6 months 7 14.0 14.0 14.0

6 months to 1 year

13 26.0 26.0 40.0

1 year to 2 year 12 24.0 24.0 64.0

More than 2 year 18 36.0 36.0 100.0

Total 50 100.0 100.0

Figure 1

INTERPRETATIONThe data provided in Table 1 and Figure 1 indicates that 36% of the suppliers are

supplying materials for MRF more than 2 years, 26% of suppliers are supplying materials

from 6 months to 1 year, 24% of the suppliers are supplying materials from 1year to 2

year and only a minimum of 14% of the suppliers are supplying materials from 0 to 6

months. A greater percentage of the suppliers of MRF are supplying materials for MRF

from more than 2 years.

2. By what means was the order placed to you?



Table 2


Personally by the purchase manager

21 42.0 42.0 42.0

By an Agent 15 30.0 30.0 72.0

Internet 14 28.0 28.0 100.0

Total 50 100.0 100.0

Figure 2

INTERPRETATION

The data provided in Table 2 and Figure 2 indicates that 42% of the suppliers get orders

personally by the purchase manager, 30% of the suppliers get the orders by an agent, and

28% of the suppliers get the orders through the internet. A greater percentage of the

suppliers get the orders personally by the purchase manager of MRF.

3. Was proper follow up was done after the order was placed?



Table 3Frequency Percent Valid Percent Cumulative Percent

Yes 26 52.0 52.0 52.0

No 24 48.0 48.0 100.0

Total 50 100.0 100.0

Figure 3

INTERPRETATIONThe data provided in Table 3 and Figure 3 indicates that 52% of the suppliers agrees that

proper follow up will be done after the order is placed and 48% of the suppliers disagrees

for the same statement. The greater percentage of suppliers agrees to the statement that

proper follow up will be done after the order is placed.

4. Was your order collected on the agreed date and time?

Table 4




Yes 22 44.0 44.0 44.0

No 28 56.0 56.0 100.0

Total 50 100.0 100.0

Figure 4

INTERPRETATIONThe data presented in figure 4 and table 4 indicates that 56 % of the suppliers say that the

order was not collected on the agreed date and time and 44% of suppliers say that the

order was collected on the agreed date and time. A greater percentage of the suppliers

disagrees to the statement that the orders are not collected on the agreed date and time.



5. If No, what was the period of delay?


2-4hrs 2 7.1 7.1 7.1

4-8hrs 9 32.1 32.1 39.3

8-12hrs 8 28.6 28.6 67.9

More than 12hrs 9 32.1 32.1 100.0

Total 28 100.0 100.0

Figure 5

INTERPRETATIONThe data presented in figure 5 and table 5 indicates that 32.1% of the suppliers say that

there will be a delay of 4-8 hours in collecting the ordered materials, 32.1% of the

suppliers say that there will be a delay of more than 12 hours, 28.6% say that there will

be delay of 8-12 hours and 7.1% say that there will be delay of 2-4 hours. A greater

percentage of the suppliers say that there will be a delay of 4-8 hours and more than 12

hours in collecting the ordered materials on the agreed date and time.



6. Was the order delivered by you on the agreed date and time?


Yes 33 66.0 66.0 66.0

No 17 34.0 34.0 100.0

Total 50 100.0 100.0

Figure 6

INTERPRETATIONThe data presented in figure 6 and table 6 indicates that 66 % of the suppliers agree that

the order will be delivered by them on the agreed date and time and 34% of disagree that

the order will be delivered by them on the agreed date and time. A greater percentage of

suppliers say that there will not be any delay in delivering the order on the agreed date

and time.



7. If No, what was the period of delay?


2-4hrs 7 43.8 43.8 43.8

4-8hrs 3 18.8 18.8 62.5

8-12hrs 5 31.3 31.3 93.8

More than 12 hrs 1 6.3 6.3 100.0

Total 16 100.0 100.0

Figure 7

INTERPRETATIONThe data presented in figure 7 and table 7 indicates that 43.8% of the suppliers say that

there will be a delay of 2-4 hours in delivering the materials on agreed date and time,

31.3% of suppliers say that there will be a delay of 8-12 hours, 18.8% of the suppliers

say that there will be a delay of 4-8 hours and 6.3% of the suppliers say that there will be

a delay of more than 12 hours. A greater percentage of suppliers say that there will be a

delay of 2-4 hours in delivering the order on agreed date and time.



8. What do you prefer the most at MRF Ltd.?


Product quality 15 30.0 30.0 30.0

Price 17 34.0 34.0 64.0

Convenience 8 16.0 16.0 80.0

After Sales Service 10 20.0 20.0 100.0

Total 50 100.0 100.0

Figure 8

INTERPRETATIONThe data presented in figure 8 and table 8 indicates that 34% of the suppliers say that

MRF give more preference to the price of the materials, 30% suppliers say that they

prefer product quality at MRF, 20% suppliers say that they prefer after sales services at

MRF and 16% suppliers say that they prefer convenience at MRF. A greater percentage

of suppliers say that MRF gives more preference to the price of the materials.



9. How would you describe the creditworthiness of MRF Ltd.?

Table 9


Very Good 12 24.0 24.0 24.0

Good 12 24.0 24.0 48.0

Average 10 20.0 20.0 68.0

Poor 12 24.0 24.0 92.0

Very Poor 4 8.0 8.0 100.0

Total 50 100.0 100.0

Figure 9

INTERPRETATIONThe data presented in figure 9 and table 9 indicates that 24% of the suppliers describe

that the creditworthiness of MRF is very good, 24% of the suppliers describe that its

good, 24% of suppliers describe that its poor, 20% of the suppliers describe that its

average and 8% of suppliers describe that the creditworthiness of MRF is very poor.



10. What is the period of credit allowed by you to MRF Ltd.?


0-15 days 21 42.0 42.0 42.0

15-30 days 7 14.0 14.0 56.0

30-45days 18 36.0 36.0 92.0

45-60days 4 8.0 8.0 100.0

Total 50 100.0 100.0

Figure 10

INTERPRETATIONThe data presented in figure 10 and table 10 indicates that 42 % of the suppliers are

allowing a credit period of 0-15 days to MRF, 36% of suppliers get 30-45 days, 14%

suppliers get 15-30 days and 8% of suppliers get 45-60 days. A greater percentage of

suppliers are allowing a credit period of 0 to 15 days to MRF.



11. Immediate payment is done after the delivery of materials?


Strongly agree 11 22.0 22.0 22.0

Agree 12 24.0 24.0 46.0

Neither agree nor disagree

10 20.0 20.0 66.0

Disagree 12 24.0 24.0 90.0

Strongly disagree 5 10.0 10.0 100.0

Total 50 100.0 100.0

Figure 11

INTERPRETATIONThe data presented in figure 11 and table 11 indicates that 24 % of the suppliers agree to

the statement that immediate payment is done after the delivery of the materials, 24% of

suppliers disagree for the statement, 11% of the suppliers strongly agree to this statement,

20% of the suppliers are in neither agree nor disagree state and 10% of the suppliers

strongly disagree to this statement.



FINDINGS

1. 36% of the suppliers supply materials for MRF from more than 2 years, Therefore

the management needs to retain these suppliers who are in business with the

company.

2. 42% of the suppliers get the orders personally by the purchase manager.

Therefore the management needs to concentrate more on placing the orders

personally by the purchase manager.

3. 52% of the suppliers agree that proper follow up is done after the order is been

placed. Therefore the management needs to concentrate more on the follow ups to

be done.

4. 56% of the suppliers are unhappy with the statement that order was collected on

agreed date and time. 32.1% of the suppliers who say no to this statement have

stated that there was a delay of 4-8hrs or more than 12hrs.

5. 66% of the suppliers are delivering the goods on agreed date and time. And in the

remaining suppliers 42.8% have made a delay of 2-4hrs in delivering the material

on agreed date and time.

6. 34% of the suppliers say that they prefer price of the material more at MRF. The

management is giving much of importance to the price of the raw materials while

purchasing.

7. 24% of the suppliers agrees that the creditworthiness of MRF is either very good

or good and at the same time equal amount of the suppliers disagree to this

statement and say the creditworthiness of MRF is poor.

8. 42% of the suppliers are giving a credit period of 0-15 days to MRF, where as

36% of the suppliers are giving 30-45 days of credit period to MRF.

9. 24% of the suppliers are happy with the statement that immediate payment is

done after the delivery of materials and at the same time equal amount of the

suppliers are unhappy with this statement.



SUGGESTIONS

1. ON TIME DELIVERY

The company needs to concentrate more on collection of raw materials on the

agreed date and time so as to minimize the time that is wasted by the loaded

trucks which wait outside the company premises.

2. FOLLOW UP

Meanwhile the purchase department should give appropriate follow up to its

suppliers, in order to avoid late delivery.

3. QUALITY PREFERENCE

The study reveals, that the company gives more preference to the price aspect of

the materials supplied at MRF. Further, the company should give more

preference to the quality of the product in order to increase the efficiency of the

finished product.

4. HEALTHY RELATIONSHIP

The company should maintain a healthy relationship with the suppliers by

interacting more with them, getting the feedback from them which will help to

increase the credit period allowed to MRF by the vendors.

5. FEEDBACK

Last but not the least, every process is incomplete without the feedback. The

company should maintain a feedback board or feedback forms for suppliers to

know their level of satisfaction about the purchase process.



CONCLUSION

1. The suppliers of MRF have an optimistic attitude towards their business with the

company but a few critical areas like delays in the collection of materials and

payment done for the materials.

2. Suppliers are well-bonded with MRF and are sustainable and the company also

maintains healthy relations with the suppliers and retains them.

3. MRF ensures that they maintain personal relations with the suppliers and place

the order personally instead of any third party agents.

4. Strong commitment of employees, positive attitude, loyalty, satisfaction level of

the employees towards their job would take up MRF to No.1 position.

5. Workforce is MRF’s greatest strength which will lead the company to the apex

level of the Tyre Pyramid.



BIBLIOGRAPHY

Company Manuals & Journals

Purchasing Principles & Applications by Stuart F. Heinritz, Paul V. Farrell

WEBSITES

www.mrf.com

www.mrftyres.com


http://www.mrftyres.com/

http://www.mrf.com/


MRF LTD.Evaluation of Purchasing Process

Questionnaire

I Mr. HARI KUMAR K, student of T JOHN INSTITUTE OF MANAGEMENT AND SCIENCE, BANGALORE conducting this research survey as a part of the Project undertaken at MRF Ltd. And will be kept confidential and used for educational purpose only.NAME OF THE SUPPLIER/VENDOR:________________________________________________MATERIAL SUPPLIED:_________________________________________________

1. Since when you are supplying materials for MRF?a. 0 to 6 months b. 6 months to 1 year

c. 1 year to 2 year d. More than 2 years.

2. By what means was the order placed?a. Personally by the purchase managerb. By an agentc. Internet

3. Was proper follow up was done after the order was placed? a. Yes b. No

4. Was your order collected on the agreed date and time? a. Yes b. No

5. If No, what was the period of delay? a. 2-4 hrs b. 4-8 hrs c. 8-12 hrs d. more than 12 hrs

6. Was the order delivered by you on the agreed date and time? a. Yes b. No

7. If No, what was the period of delay? a. 2-4 hrs b. 4-8 hrs c. 8-12 hrs d. More than 12 hrs



8. What do they prefer most at MRF Ltd.? a. Product quality b. Price c. Convenience d. After Sales Service

9. How would you describe the creditworthiness of MRF Ltd. a. Very Good b. Good c. Average d. Poor e. Very Poor

10. What is the period of credit allowed by you to MRF Ltd. a. 0- 15 days b. 15 days- 30 days c. 30 days-45 days d. 45 days- 60 days

11. Immediate payment is done after the delivery of materials. a. Strongly agree b. Agree c. Neither agrees nor disagrees d. Disagree e. Strongly Disagree


Date post:	22-Sep-2014
Category:	Business
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