Published on March 4, 2014
“Study of Enabling Organizational Systems Using ERP/IFS Tools For Competitive Quotations At HAL” - Submitted By www.mbaprojectfree.blogspot.com Page 1
ACKNOWLEDGEMENT I would like to take this opportunity to thank all the people who have helped in the completion of this project work. I am grateful to my industry guide Mr. SHIV KUMAR, Sr. Manager (IT), HAL and my faculty guide Prof R.J. MASLAMANI who guided me throughout my internship in HAL with their valuable inputs and suggestions. I would also like to extend my sincere thanks to Mr. M.B. Krishna, Chief Manager (Marketing), HAL; to let me undertake the activity of making the quotation. I would like to express my gratitude towards Mrs. Neeta Shakya, Mr. Chandra Mohan, Mrs. Shasikala and Mr. Govind Raju for helping me in my study of the organizational systems. I am thankful to Mr. Anil Mattoo for his constant interest, involvement and support during the project. Continuing thanks is extended to all the concerned employees and staff members of HAL, who directly or indirectly were involved in the completion of this project work. www.mbaprojectfree.blogspot.com Page 2
EXECUTIVE SUMMARY This summer training, carried out at Hindustan Aeronautics Limited (HAL), Hyderabad; included familiarizing with the various processes involved in the company from the point of receiving of customer orders, the production processes involved; till the final dispatch of the end product to the customers. A first hand exposure to the Industrial Financial Systems (IFS), a module of the company’s larger ERP software platform, was a part of this project work; which enabled better understanding of the cycle time, costing and additional facilities required by the future customers. Apart from this, a quotation for one of the company’s project of communication equipments called 5 KW is made with thrust on competitive costing and delivery time along with the incorporation of technical requirements of customers. The inputs from the IFS systems were used to finalize this quotation under the guidance of the marketing department of HAL. www.mbaprojectfree.blogspot.com Page 3
TABLE OF CONTENTS LIST OF FIGURES iii 1. INTRODUCTION 1 1.1 Company Profile 1 1.2 Marketing Strategies Of HAL 5 1.3 SWOT Analysis 6 1.4 HAL, Hyderabad Division 8 1.4.1 R&D Capabilities 9 1.4.2 Repair and Overhaul Facilities 9 1.4.3 Transfer of Technology (ToT) 9 1.4.4 Key Products in Current Manufacturing Of HAL, Hyd 11 1.4.5 Quality Systems 12 1.4.6 Customer Profile 13 1.4.7 Internal Policies Of HAL 13 2. OBJECTIVE OF THE STUDY 18 3. RESEARCH METHODOLOGY 18 4. INTRODUCTION TO ERP/IFS 19 4.1 Introduction To ERP 19 4.2 IFS – Industrial Financial Systems 20 5. STUDY OF THE ORGANIZATIONAL SYSTEMS USING IFS TOOLS 23 5.1 Production Processes 23 5.2 IMM Process 42 5.3 MRO Process 55 www.mbaprojectfree.blogspot.com Page 4
6. ANALYSIS OF THE MARKETING ACTIVITIES AT HAL 59 6.1 Production Tools Used By HAL 64 7. INTRODUCTION TO 5KW PROJECT 76 8. ANALYSIS OF THE QUOTATION 80 8.1 Working Sheet 83 8.2 Financial Assumptions 83 9. ANNEXURE-1 & 2 84 10. RECOMMENDATIONS 87 11. CONCLUSION 90 APPENDIX 91 REFERENCES www.mbaprojectfree.blogspot.com 135 Page 5
LIST OF FIGURES Fig 1.1: Organizational Growth Of HAL 2 Fig 1.2: Chart Showing The Different Cadres Of Employees 14 Fig 1.3: Payroll Process 16 Fig 4.1: IFS Screen 21 Fig 5.1: Flow Chart Showing The Production Cycle 25 Fig 5.2: Creation Of Inventory Part 26 Fig 5.3: Product Structure Screen 28 Fig 5.4: Routing 29 Fig 5.5: Creating Issue Slip 31 Fig 5.6: Issue Slip – Part Details 32 Fig 5.7: Shop Order Creation 33 Fig 5.8: Shop Order – Material Tab 35 Fig 5.9: Shop Order – Operation Tab 36 Fig 5.10: Shop Order Header – Operation Tools Tab 39 Fig 5.11: Shop Order – Material Review Board 40 Fig 5.12: Disposition Action 41 Fig 5.13: Flow Chart Showing IMM Process 44 Fig 5.14: Preparation Of New Material Purchase Requisition (MPR) 45 Fig 5.15: Details Of Supplier For Purchase Part 46 Fig 5.16: Creation Of A New Supplier 47 Fig 5.17: Preparation Of Tender Enquiry 48 Fig 5.18: Tender - Single Bid Entry 48 Fig 5.19: Tender- Multiple Bids Entry 49 Fig 5.20: Tender To Order (Purchase Order) Conversion 50 Fig 5.21: Creation Of Purchase Order 50 www.mbaprojectfree.blogspot.com Page 6
Fig 5.22: Preparation Of MR Items 51 Fig 5.23: Creation Of IDTO 52 Fig 5.24: Quality Clearance Of Draft Receipt Voucher 53 Fig 5.25: Receipt Of Receipt Voucher (RV) 54 Fig 5.26: MRO Process 56 Fig 5.27: Serial Structure Info 57 Fig 5.28: MRO Shop Order 58 Fig 6.1: Flow Chart Showing Marketing Activities 62 Fig 6.2: Activities After Receiving The RFQ 63 Fig 6.3: New Customer Creation –General Information 64 Fig 6.4: New Customer Creation – Address Info 65 Fig 6.5: Customer Order Creation 66 Fig 6.6: Manual Reservations 67 Fig 6.7: Picklist Creation 69 Fig 6.8: Connecting To The Load List 70 Fig 6.9: Report Picking 70 Fig 6.10: Load List – Actual Qty Loaded 71 Fig 6.11: Q423 Generation 71 Fig 6.12: Customer Order Load List 72 Fig 6.13: DA Preparation 73 Fig 6.14: Releasing Load List 73 Fig 6.15: Inspection Of Load List 74 Fig 6.16: Delivering The Load List 75 Fig 7.1: 5 kW Transmitter ST-5000 77 Fig 7.2: Line Flattener ATU-5000 79 www.mbaprojectfree.blogspot.com Page 7
1. INTRODUCTION 1.1 COMPANY PROFILE Hindustan Aeronautics Limited (HAL) came into existence on 1st October 1964. It was formed by the merger of Hindustan Aircraft Limited with Aeronautics India Limited and Aircraft Manufacturing Depot, Kanpur. The Company traces its roots to the pioneering efforts of an industrialist with extraordinary vision, the late Seth Walchand Hirachand, who set up Hindustan Aircraft Limited at Bangalore in association with the erstwhile princely State of Mysore. Hindustan Aircraft Limited was established as a private company in 1940 for the repair and overhaul of military aircrafts and engines to support the country’s Second World War efforts . It was taken over by government in 1942 and made into a public sector undertaking. The company was later rechristened as Hindustan Aeronautics limited (HAL). Today HAL is a Navratna Company and also the largest Defence Public Sector Undertaking under the Department of the Defence Production. It has 19 production Divisions with 9 co-located Research & Development Centers across 7 locations in the country. The divisions of the company are located at various locations of the country because if the whole of production is undertaken at a single location, the vulnerability to attack by enemies increases, and so most of the countries scatter their production at different places. Over more than six decades in the past, HAL has spread its wings to encompass activities in the areas of Design & Development of fixed and Rotary Wing Aircrafts, Avionics & Accessories as well as Manufacture, Maintenance, Repair and overhaul of: Fighter, trainer & transport aircrafts Helicopters Unmanned Air Vehicles Aero- engines Avionics Accessories www.mbaprojectfree.blogspot.com Page 8
Ground Support equipment. The Fig: 1.1 shows the organizational growth of the company over the years and list beneath shows the various divisions of HAL . Fig 1.1 ORGANIZATIONAL GROWTH OF HAL www.mbaprojectfree.blogspot.com Page 9
Bangalore Complex Aircraft Division Engine Division Industrial & Marine Gas Turbine Division Overhaul Division Aerospace Division Foundry & Forge Division Airport Service center LCA Central Materials and processes Laboratory Helicopter Complex Helicopter Division – Bangalore Helicopter MRO Division – Bangalore Rotary Wing Research & Design Centre – Bangalore Composite Mfg. Division - Bangalore Accessories Complex Transport Aircraft Division – Kanpur Avionics Division – Hyderabad, Korwa Accessories Division – Lucknow MiG Complex Aircraft Mfg. Division – Nasik Overhaul Division – Nasik Engine Division – Koraput Sukhoi Engine Division – Koraput Design Complex www.mbaprojectfree.blogspot.com Page 10
Aircraft R&D Centre – Bangalore Mission & Combat System R&D Center – Bangalore Engine Test Bed R&D Centre – Bangalore Other critical Business areas include: Aircraft Midlife Upgrade Programmes Manufacture of Launch Vehicles & Satellite Structures Development of Software and Simulators for aircrafts HAL has been successful in numerous R & D programs developed for both Defence and Civil Aviation sectors . HAL has made substantial progress in its current projects: • Dhruv, which is Advanced Light Helicopter (ALH) • Tejas - Light Combat Aircraft (LCA) • Intermediate Jet Trainer (IJT) • Jaguar, SU-30, Helicopters like Chetak, Cheetah etc. • Various military and civil upgrades. Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard in March 2002 which was the first year of its production and so, is a unique achievement in itself. HAL has played a significant role for India's space programs by participating in the manufacture of structures for Satellite Launch Vehicles like • PSLV (Polar Satellite Launch Vehicle) • GSLV (Geo-synchronous Satellite Launch Vehicle) • IRS (Indian Remote Satellite) • INSAT (Indian National Satellite) HAL has established a large number of joint venture companies with world’s leading Aeronautics Organizations in several Hi-tech fields. Apart from these, various Coproduction and Joint Ventures with international participation are also under consideration. Some of the latest products from HAL include the well-known Advanced Light Helicopter (ALH), Light Combat Aircraft (LCA), Intermediate Jet trainer (IJT), www.mbaprojectfree.blogspot.com Page 11
Sukhoi-30 and the Advanced Jet Trainer (HAWK). HAL's supplies / services are mainly to Indian Defence Services, Coast Guards and Border Security Forces but transport Aircraft and Helicopters have also been supplied to Airlines as well as State Governments of India. The Company has achieved a foothold in exports to more than 30 countries, having demonstrated its quality and price competitiveness. With a sharp focus on lean Management & novel HR initiatives, HAL is steadily marching towards accomplishment of its mission “to become a globally competitive aerospace industry while working as an instrument for achieving self- reliance in design, manufacture and maintenance of Aerospace Defence Equipment and diversifying to related areas, managing the business on commercial lines in a climate of growing professional competence “and is slated to fly higher and faster in this 21st century. 1.2 MARKETING STRATEGIES OF HAL As part of its marketing strategy, HAL participates in various air shows and exhibitions across the globe to market its products to its prospective customers worldwide. By these events, HAL opens itself to worldwide customers . Aero India - This air show is completely organized and sponsored by HAL. It forms a major part of its marketing budget. Aero-India is held in every 2 years at Bangalore. It is a 5-day event; in which for 3 days; it is open only for business delegates but the remaining 2 days it is opened for public as well. In the first three days, the company holds various lectures and seminars given by the leading people related to this particular field. It is during the Aero-India show that the MoU’s between various business delegations are signed. Many government delegations and highly placed dignitaries attend this show. Singapore Air show – Apart from Aero-India, HAL showcases its products at Singapore Air show which is held in every 2 years at Singapore. www.mbaprojectfree.blogspot.com Page 12
Paris Air Show – Similar to Singapore Air show, HAL demonstrates its products to the world in the Paris Air show. Farmbourgh Air show – HAL also demonstrates its products in this air show and uses the opportunity to attract various customers. Defence Expo – The Defence Expo is held by the Ministry of Defence, in Delhi, every 2 years and here, various defence companies are invited to showcase their products. HAL is also a part of this exhibition. Apart from these air shows, HAL participates in various exhibitions and trade fairs as well. HAL has purchased a permanent stall at Pragati Maidan, New Delhi; where international trade fairs are held. 1.3 SWOT ANALYSIS Strengths: Great production capacity – One of the greatest strengths of HAL is its production capacity; which is the one of the best in the country. It can be assessed from the fact that it has an impressive product track record - 12 types of aircraft manufactured with in-house R & D and 14 types produced under license. HAL has over the years manufactured nearly 3550 aircrafts, 3600 engines and overhauled over 8150 aircrafts and 27300 engines. Infrastructural Advantage – The Company has a good infrastructural support for its operations. There is a department called Plant maintenance in every division which continuously takes care of the infrastructural needs of the divisions. Separate infrastructure is made for the design, R&D and sale support. Protected environment – The Company operates in a protected environment with Government support for funding its operations, dedicated customer base and lesser competition. www.mbaprojectfree.blogspot.com Page 13
Reliable Equipment Maintenance – HAL provides reliable after sales support and maintenance support; even for the oldest projects like MiG 21 which was made in the year 1965 unlike its competitors. This advantage attracts the customers towards the company. Robust Design Facilities – The Company provides the advantage of robust design according to the specifications given by the customer. Accreditations – HAL has got accreditations from world labs like SemiLac, DGQA etc. Commitment To Total Quality - The Company is committed to continuous improvement of all their activities. Its products and services conform to highest standards of design, manufacture, reliability, maintainability and fitness for use as desired by our customers. Weaknesses: Government rules and regulations – The Government rules impose certain problems in the daily operations of the company. The labor unions resorting to strikes, union elections or recent problems related to pay revisions among laborers can cause enormous time delays in the projects. Lesser accountability – The lesser accountability sometimes leads to more overhead costs. Increasing manufacturing cost – The increasing manufacturing cost every year due to fixed labor hours and labor rate which cannot be changed pose problems for the company; as these costs are much higher than the private sector. Opportunities: www.mbaprojectfree.blogspot.com Page 14
Increased number of emerging business markets – The Company initially catered to only its defence customers. But with the new markets related to civil aviation and contracts relating to maintenance of aircrafts coming to HAL; these markets have given immense opportunities to the company. Access to International Markets – As direct entry of other foreign defence companies is not allowed in India due to security reasons; the Joint Ventures and the Transfer of Technology process between HAL and these companies present high growth potential for HAL and also indirectly gives access to these international markets. Threats: Increasing competition – The ever increasing competition from various giant private sector players like LnT, Mahindra and Mahindra etc; can impose a serious threat to the Company; as the company is used to a monopolistic environment over the years. 1.4 HAL, HYDERABAD DIVISION In early sixties, it was strongly felt that our defence services should be more selfreliant in defence related equipment, electronics in particular. This resulted in HAL setting up a full - fledged unit to cater to the aviation electronics (AVIONICS). Thus Avionics Division, Hyderabad was born in the year 1965 primarily for the manufacture of avionic equipments required for the MiG-21 Aircraft manufacture under the collaboration with the erstwhile USSR. To begin with, the Division's dedicated design team took up the task of indigenizing, the following critical avionics. • Identification of Friend or Foe (IFF) • UHF Communication set • V/UHF Communication System • Automatic Direction Finder (ADF) • Radio Altimeter (RAM) www.mbaprojectfree.blogspot.com Page 15
• Precision Approach Radar (PAR) These systems were developed, qualified, flight tested and inducted into the various MiG aircraft manufactured under license in India. Later on, the same equipments were fine tuned to meet the requirements of other aircrafts like Kiran, Jaguar, Dornier, AN-32 and Helicopters. Today the Division has spread its wings further to meet the Communication and Navigation requirements of our defence customers and the Division is fully geared to enter the international market too. HAL Hyderabad has become the country’s premier Avionics organization engaged in Design, Development, Manufacture and Repair & Overhaul of a wide range of Avionics Equipments and is fully geared up to meet the ever developing avionic needs of the customers by providing a complete solution from design to in-site support. With the setting up of the R&D center in the Division, indigenization has resulted in systems development qualification, testing and induction into various Aircrafts. 1.4.1 R&D Capabilities The strategic electronics Research and Design Center of HAL, Hyderabad is the leading R&D organization of avionics in India. More than 200 qualified and experienced engineers, with a large group of technicians & support staff, are engaged in dedicated design and development of high quality products meeting stringent quality requirements. 1.4.2 Repair and Overhaul Facilities Avionics Division, Hyderabad has excellent facilities and procedures for defect investigation, repair and overhaul of Russian, Western and indigenous Air-borne and Ground equipments. The Manpower with vast experience & expertise in ROH caters to warranty support, routine repairs/modifications as well as field repairs. Repair facilities are available from first generation to the fourth generation Avionics equipment. 1.4.3 Transfer of Technology (ToT) The technology used by the Hyderabad Division is either indigenously built or is imported by the process called as transfer of technology from other countries mainly www.mbaprojectfree.blogspot.com Page 16
Russia and other western countries. But, as countries are usually reluctant to share their equipments and technologies with other countries; so, when the defence people identify the need for particular equipment, they give their recommendations to the Government, which takes steps to initiate a deal between the countries for this transfer of technology to take place. This transfer of technology takes place in four phases. Phase 1 – It involves direct buying of the required equipment from the foreign collaborators; using one set as an in-house prototype and supplying the remaining to the customers to gain first hand experience. This phase is also called FF (fully furnished) phase. Phase 2 - It involves buying from foreign collaborators but carrying out of certain quality tests by HAL to gain experience in testing procedures. This phase is also referred to as SKD (semi-knocked kit) phase. Phase 3 – It involves assembling and testing of the materials supplied by the OEM (Original equipment manufacturer) according to the standards and drawings given by OEM along with the materials. This phase can also be called as CKD (completely knocked kit) phase. Phase 4 – Here, the raw materials are procured from open market and the equipments are designed and developed according to the Indian Military Standards. This phase can be referred to as RM (raw material) or IM (indigenous manufacturing) phase. Indigenously developed equipments: Airborne Radar Equipments (RAM, IFF) Communication Equipment (INCOM,COM) Navigation Equipment (VOR/ILS, TACAN) On-board Computers Testers (TJ-640, RT 503) Equipment under Transfer of Technology: www.mbaprojectfree.blogspot.com Page 17
PARP 2080C from Selex Galileo, Italy 1kw & 5kw HF transmitters from Selex, Italy Digital Video recording system from RADA, Israel 9 types of Avionics including RLSU Radar for Su-30 MKI 1.4.4 KEY PRODUCTS IN CURRENT MANUFACTURING OF HAL, HYD S.NO 1 2 3 4 5 6 7 Products IFF Description Identification of friend or foe, automatic replies to INCOM, COM ACS Mission Computer (MC) ground or airborne interrogators. Integrated Radio Communication System Advanced radio communication system Used for Navigation & Guidance; Weapon RAM 1701A 1kW HF Transmitter Aiming- Task management etc. Radio altimeter for height indication over terrain. HF system for use between ship to ship, ships to 5kW HF Transmitter shore, shore to shore communication. A Solid state transmitter operating in the high frequency band and meant for use between shore 8 9 PAR to ship, shore to shore communication. Precision Approach Radar; it provides azimuth, ILS elevation, bearing information to the aircraft. Instrument landing system used for route navigation, runway approach landing. Fully indigenously designed and developed by HAL, 10 DVRS Hyderabad. Digital Video recording system; to record the 11 RSLU Radar video picture and flight data in digital format. Primary sensor for Su-30 to detect and track 12 Voice Warning System airborne, ground and sea targets. Intended for automatic warring of crew members with emergency, preventive and informative 13 Weapon Control System messages. Preparation of aircraft armament to combat applications. www.mbaprojectfree.blogspot.com Page 18
14 Fire alarm System Provides audio and visual alarm indication to the pilot in the event of fire or over heat in the engine 15 Communication compartments. means Ensures two-way telephone communication in complex V/UHF and HF ranges. 1.4.5 QUALITY SYSTEMS Avionics Division, Hyderabad is committed to Quality system focused on customer solutions and driven by customer success. The Division’s quality system together with elements of ISO provides an integrated frame work for consistent quality in business processes. The Division is accredited with ISO 9001 certification for design, development, manufacturing and servicing of airborne, ship-borne and ground based electronic systems. Besides the Division is also accredited with ISO 14001 certification for environmental management system. As a firm, the Division is registered with the directorate of Aeronautics Quality Assurance (DGAQA), Ministry of Defence, Government of India. The indigenously developed products such as IFF, Radio altimeter and communication equipments bear the quality approval from BAE, UK. The Quality Assurance System of the Division ensures product quality right from the design stage. The products are subject to a series of tests to ensure reliability. The Division collects, monitors and analyses data from across the company and users to continually improve the products, processes and overall effectiveness of their Quality Management system. The Division aims to achieve world class standards in manufacturing practices with continual improvements in products/processes/systems to meet market challenges. 1.4.6 CUSTOMER PROFILE Established initially to cater to Indian Air Force, today the list of the customers includes: www.mbaprojectfree.blogspot.com Page 19
Indian Air force Indian Army Indian Navy Coast Guard Civil aviation sector Defence Research & Development Organization Center for Airborne Systems Ship Building Industries GRSE,MDL,GSL,HSL Other sister divisions of HAL Exports to various countries. 1.4.7 Internal Policies of HAL The internal policies that are covered here include the HR policies and the payroll process. HR policies of the company can be categorized into five which consists of Establishment, Promotions and Appraisals, Training, Recruitment and Wages. Establishment A Personnel file of each and every employee is maintained by the company. It contains all the statistical data pertaining to that employee. It can be the caste, physically handicapped nature, X-servicemen, religion, state, date of birth, mother tongue and various other details. There are about 3000 employees at the Hyderabad division. These employees are categorized into two types namely officers and workmen. Officers can be either technical or non-technical. Similarly, workmen can be direct or indirect. This categorization of employees is shown in the form of a chart in fig: 1.2 below. www.mbaprojectfree.blogspot.com Page 20
FIG 1.2: CHART SHOWING THE DIFFERENT CADRES OF EMPLOYEES Promotions and Appraisal There are two schemes for promotion of officers. They are Time Scale promotions and Internal merit scheme (IMS). According to time scale promotions, any officer who has spent 4 years as a particular grade officer is eligible for promotion. Internal merit scheme presents an opportunity to get a promotion within three years; if the merit score given by the respective heads of departments to the officer exceeds 80 percent in all the three years. Similarly, workmen are eligible for promotions every 4 years. Each employee is also given a staff number for identification. The officers have a scale of 10 grades with grade 1 assigned to Assistant Engineer, Grade 2 to Engineer, Grade 3 to Deputy Manager, Grade 4 to Manager, 5 to Senior Manager, 6 to Chief Manager, 7 to Deputy General Manager, 8 to Addl. General Manager, 9 to General Manager and 10 to Managing Director. The work men are given promotions based on scales in increasing order from S1 to S10. S11 is a special scale and a worker in this category is considered equivalent to Grade 1 officer. Other than these, there are contract workers, apprentices and employees belonging to X-servicemen category. www.mbaprojectfree.blogspot.com Page 21
There is an appraisal scheme that is employed for workers called as Mutually Agreed Task Initiative (MATI). According to this, the appraisals are given to the work force based on score obtained by them during their work period. The score includes 40% weightage for innovativeness in jobs and 60% for efficiency in their regular jobs. Also, at the end of the year, the employees are asked to fill an appraisal form to assess their performance during the year. This is called the Personal Appraisal Form (PAR). Training The company realizes the importance of continuous training of its employees and so has incorporated both in house and outside training in its policies. The in-house training is conducted by experts within the company at regular intervals. Outside training is where the employees are sent outside to institutes like HAL Management Academy or any other premier institutes to undertake certain training or courses. The company also has a policy of inducting apprentices every year and their training takes place within the organization. Recruitment The company recruits both externally through media, campuses, employment agencies etc as well as through internal job postings. There are various activities involved in the process of recruitment. Firstly, the man power planning is done for the year by taking inputs from various departments of their personnel requirements. Then, the recruitment process is planned using various methods as mentioned above and the job profiles are made. After that, the job advertisements are given and when, the applications are received, the candidates are evaluated against suitable criteria. The selected candidates are made to undergo an employee induction program. A continuous follow-up of their training is done and are finally, posted to various jobs. The rosters are also taken care of; which means that the number of people to be recruited from the reserved categories like SC, ST etc is decided. Wages The wages of officers consists of components like the Basic amount, Dearness allowance (DA), House Rent Allowance (HRA) and other allowances like canteen, clothing etc. The www.mbaprojectfree.blogspot.com Page 22
DA amount changes every three months due to changes in inflation rate. The HRA is treated as 30% of the basic amount. The wages of workmen consist of basic, additional pay like incentives, bonuses etc, personal pay and service weightage pay (SWP). PAYROLL PROCESS The regular pay to the employees is usually given on 1st of every month. Apart from this, supplementary pays are given three or four times every month usually on 12th, 20th and 25th of the month. The salary amount to be given is decided by the payroll department based on the inputs from various other departments. The inputs include the information about loans taken by the employee from the welfare department, attendance of the employee from time office department, inputs like conveyance, contingency, canteen, medical bills, LTC, traveling allowance (TA) etc. After gathering all the inputs regarding the employees, the DA changes are identified every month and then, the pay slips are distributed to the department heads. The above process can be better understood in the form of a chart as shown in fig 1.3: FIG 1.3: PAYROLL PROCESS www.mbaprojectfree.blogspot.com Page 23
The inputs from various departments are converted into a common format for pay processing. The pay slips are generated with the help of IFS/ERP systems. Sometimes, reports regarding the pay process are required by the departments for different reasons. For this purpose, the reports can be generated in different formats as can be seen from the flow chart for easier use. www.mbaprojectfree.blogspot.com Page 24
2. OBJECTIVE OF THE STUDY The objective of this study is to understand the Organizational systems and processes of Hindustan Aeronautics Limited (HAL), Hyderabad. It is carried out with the help of Industrial Financial System (IFS) tools being employed at the company. These IFS systems help in keeping a track of production cycle of products for the timely delivery of the products and customer specifications. The inputs obtained using these IFS tools were also used in the making of a Quotation for one of the communication projects called 5kW of the company. 3. RESEARCH METHODOLOGY An exploratory research was carried out as for this project to gather all the necessary information required. As a result, all the activities relating to the Marketing, Production, Integrated Material Management, Maintenance Repair & Overhaul etc; were studied in detail to understand the functioning of the company as well as for the making of a Quotation for the 5kW project. www.mbaprojectfree.blogspot.com Page 25
4. INTRODUCTION TO ERP/IFS 4.1 ERP – ENTERPRISE RESOURCE PLANNING ERP (Enterprise Resource Planning) comprises of a commercial software package that promises the seamless integration of all the information flowing through the company – Financial, Manufacturing, Human resources, Supply chain & Customer information. Each of the departments typically has its own computer system optimized for the particular ways that the departments do their work. But ERP combines them all into a single integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other. This single software program serves the needs of all the people that are involved in the business processes. Benefits of ERP system: 1. Integration of business process. 2. On line/ real time information throughout all the functional areas of an organization. 3. Data standardization and accuracy across the enterprise. 4. “Best-practices” included in the applications. 5. The efficiency they force an organization to undertake. 6. Reduces paper work. 7. Reduction of lead time. 8. Improved resource utilization. 9. Homogenizes the organization process. 10. Total transparency and information leads to better external and internal communication. 11. Optimum inventory management. There are several factors that are critical for the success of ERP: 1. Commitment from all levels of management. 2. Participation and dedication of systems future users. www.mbaprojectfree.blogspot.com Page 26
3. ERP brings in a big cultural change – adoption to the changes by all the users including grass root level. 4. Backing support & cooperation of IT personnel. 5. Development of interfaces with current operational systems and with those under development. 6. Spirit and collaboration on part of all. 4.2 IFS – INDUSTRIAL FINANCIAL SYSTEMS IFS System provides a broad range of enterprise, manufacturing, service management and asset management solutions. An integral part of IFS Applications, IFS solutions seamlessly work together enabling companies to employ lean enterprise concepts, control costs, manage projects, increase efficiencies in their supply chain, and measure their performance. IFS basically originated in Sweden and they have presence in market since 1983. BAe system (British Aerospace), UK and IFS Global formed a company called IFS Defence focused on commercial aviation, aerospace and defence. IFS Systems, today, has more than 30 projects executed in 14 countries like South Africa, Netherlands, Middle East and Asia Pacific and 10000+ users license sold only in India. IFS India – International competency center started operation in India in the year 2000 and IFS India independent, a 100% subsidiary of IFS- Sweden became operational since Jan 2003. It had got more than 20 customers within 38 months of operation in INDIA. IFS focuses in commercial aviation, aerospace and defence, automatic, industrial manufacturing, process industry, rail & transport, maritime, energy, telecom, infrastructure, retail. The IFS India office is located at Noida, Mumbai & Bangalore. Its major customers include HAL; AP Transco, Hyd- Power distribution; SC Johnson; GNA Enterprises; Escorts, Delhi- Automotive; Escorts Heart Institute, Delhi; BAe Systems, UK; US Air Force; Pepsi, China; MTN, Nigeria etc. www.mbaprojectfree.blogspot.com Page 27
Using IFS Navigator, transparent visibility and control can be maintained over the projects; as one can get complete visibility into the project. With its easy-to-access and use web portal interface, the company, its partners and IFS can work together or separately to implement IFS Applications. FIG 4.1: IFS SCREEN The image shown in fig: 4.1 is a snapshot of an IFS Screen. The left side of this screen shows an IFS Navigator with links to various applications. The right side of the screen called as an IFS Workspace, is where the data is entered. These links and forms are updated by the concerned departments continuously with time. www.mbaprojectfree.blogspot.com Page 28
The IFS implemented in HAL uses the Oracle 10 G – R.1 database. Centura Language is used at the front end for the IFS development and for the total integration of all the transactions. The IFS provides various executable files for different functions of the company to use. The access to these .exe files is provided by giving a username and password to different departments. Some of the .exe files used by the company are distribution.exe for marketing and IMM functions, Configure&MaketoOrder.exe for production, ManufacturingMRO.exe for MRO, HumanResources.exe for HR functions etc. This role-based view gives everyone access to the information they need to get their job done on time, on budget. www.mbaprojectfree.blogspot.com Page 29
5. STUDY OF THE ORGANIZATIONAL SYSTEMS USING IFS TOOLS 5. 1 PRODUCTION PROCESS AT HAL, HYDERABAD DIVISION There are several departments involved in the production process of the company. After the customer orders are created by the Marketing department and manual reservation of parts for a particular customer order is done, the role of Central Planning department comes into play. Firstly, Central Planning prepares a Project master which gives the details of the products and material required for the project. Following this, a part master is made by the department giving a detailed picture of all the inventory parts required assembly-wise for the production process. Then, a product structure also called the Bill of Material (BOM) is designed. This BOM gives the list of the raw materials, their required quantity and the estimated man hours (SMH) for the operations. Simultaneously; there is the Methods department; a part of the planning department which writes the operations that need to be carried out on the process sheet; also called as the route card to help the workers to execute various operational activities for the manufacture of items. This process of writing the operations using the material part master and the tool part master is known as routing. Once, the process sheet is made, the Management Services department (MSD) gives the time updations like the set up time and the per piece time of the project. Set up time is the time that the machines take for set up purpose and for tuning the people to its use. It is based on the cycle time. Per piece time is the time required for the production of a single unit. The company makes an annual production plan for the allocation of different work orders. This work order defines the type of work, amount of work and activities to be done according to the annual production plan. Based on the BOM and work orders, the shop orders for manufacturing are generated and are given to shop/shop planning to start the production activity. These shop orders are also used for the printing of job tickets of workers. These job tickets report the time spent by each worker every day and are used www.mbaprojectfree.blogspot.com Page 30
by the company for giving them incentives. Basically, there are two kinds of shops - the assembly and the fabrication shops for each project. A fabrication plan is made for these shops which guides through the fabrication and assembling of materials. When the shop order for manufacturing arrives at the fabrication shop, the shop planning arranges for the raw materials that are needed by creating pick lists. The manufacturing shops uses these pick lists for the issue of raw materials from the stores for fabrication of items. The manufacturing shop then sends these fabricated items back to the stores for use by the assembly shop as needed. Now, the assembly shops use the BOM or the product structure for the assembling of the items. The assembly shop planning people now has to get the required items into the shop. If the material is present in the stores which is possible; if the item is fabricated or manufactured in the company itself; then a bulk issue voucher; also called as an issue slip is prepared for the collection and maintenance of material from stores to the assembly shop. The Bulk issue voucher is used for the issue of manufacture and purchase items from the stores. But this issue slip has to be authorized by the Material control Department before going to assembly shop. When the issue slip gets authorized, the material is collected from the stores for assembling. If the material is not there in the stores and has to be bought from outside, then the IMM is notified so that the Purchase department buys such items. After the completion of assembly process, the finished goods are sent to the packing stores and a finished good report (FGR) is made after inspection and quality clearance by the Quality department. A copy of this FGR is sent to all the concerned departments like planning, marketing, finance etc. The marketing department makes a dispatch order (DO) and dispatch advice (DA) for sending the finished goods to the customer. The Quality control (QC) department plays an important role as it inspects the quality of the products at every stage using an inspection memo. The final products are sent to the customers only after the approval of QC department. This above production process flow is explained in the form of a flow chart as shown in the fig: 5.1 www.mbaprojectfree.blogspot.com Page 31
FIG 5.1: FLOW CHART SHOWING THE PRODUCTION CYCLE www.mbaprojectfree.blogspot.com Page 32
The Configure&MakeToOrder.exe is the executable file used by the company for the integration of all the production activities using IFS tools. The first step using IFS tools is the creation of an inventory part which refers to the part that is to be manufactured. This is done using the screen shown in the fig: 5.2 by using the following menu path: Inventory Inventory Part General Tab Screen. This tab window can be used to specify or view general information about the inventory part, such as whether the part is manufactured or purchased, the family to which the product belongs to etc. FIG 5.2: CREATION OF INVENTORY PART www.mbaprojectfree.blogspot.com Page 33
The above screen has many fields which are to be filled like – Part type; in the Part Type field “Purchase” appears by default and so the user should indicate whether the part is manufactured or purchased. Unit of Measure for the part in the U/M field. This is the code value for the unit in which this part is stored in inventory. The ABC code in the ABC Code field. ABC Code classifies the part according to the value of the part and quantity consumed. When the part is created, the system sets to ABC code to ‘A’. The Project Name in the Product Family field. After the creation of the inventory part, the next step is to create a product structure using the below menu path: Inventory Manufacturing Standards Structures Product Structure Screen Firstly, the Inventory Part for which the Product Structure has to be created is selected. This tab window is used to build structures for parts by specifying which components go into a parent part as can be seen from fig: 5.3. The various fields that are to be entered are the Part Number in the Component Part column, the description of the selected part number in the Description column, the strip part number for the selected part number in StripPartNo column, the Unit of Measurement for the selected part defined in the inventory master in the Unit of Measure column, quantity per assembly in Qty per Assembly column, position of part mentioned in the drawing in the Drawing Position column, the operation number in which the selected part is going in the Operation column etc. The State of the structure indicates how the structure information can be used. The ability to change the component records depends upon the state of the alternate structure. The Possible status in the State field is: Tentative: Normally, this is the default value. The Component details can be changed in this state. www.mbaprojectfree.blogspot.com Page 34
Plannable: This status indicates that the structure is available for planning. The Component details can also be changed in this state. Buildable: This status indicates that the structure is available for the uses. This status is used for generating order components and for planning. Canceled: This status indicates that the structure has been canceled and will not be available for use in Manufacturing or Planning. FIG 5.3: PRODUCT STRUCTURE SCREEN www.mbaprojectfree.blogspot.com Page 35
Once the Product Structure is complete, it is changed from “tentative” to “plannable” state and when the product structure is finally checked and the structure is ready for use, the state of Product Structure is changed from ‘Plannable’ to ‘Buildable’. After the product structure, the routing for parts has to be done using the window of fig: 5.4. Routing can include only machine information, only labor information, or both. The menu path to be used for routing is Inventory Manufacturing Standards Routing Routing Screen FIG 5.4: ROUTING www.mbaprojectfree.blogspot.com Page 36
This window can be used to view and maintain operation routing, machine, and labor details for the specified part. The fields to be entered include the operation number in the Operation No column, the operation description in the Operation Desc column, the detail of operation in the Opr Details or Note text column, Department No column displays the ID of the department of corresponding work center, Department Desc column displays the description of the corresponding department. Once the Product Routing is complete, the state is changed from ‘Tentative’ to ‘Plannable’. Now, the MSD department uses the Query option for finding all the routings in the ‘Plannable’ state. The MSD enters the value in Labor Setup Time Column, the labor setup time, in hours, required for the operation. The value for labor setup time must be 0 or greater. Labor Setup Time Hrs, Labor Setup Time Min and Labor Setup Time Sec column displays the time in hours, minutes and seconds. The same value appears in Mach Setup Time, Mach Setup Time Hrs, Mach Setup Time Min and Mach Setup Time Sec Column. MSD also enters the value in Labor Run Factor Column which is the labor run factor for the operation. This, in conjunction with the factor unit, defines how much time is required for labor activity. MSD selects the applicable value in Factor Unit Column (Possible values are Hours, Hours/Unit and Units/Hour). The Definition of the possible values is: Hours/Unit - The number of hours it takes to manufacture a unit Units/Hour – The number of units that can be manufactured in an hour Hours – The number of hours required for manufacturing, regardless of the number of units. Apart from the above, MSD also enters the Crew Size in the Crew Size column. Crew Size is the number of people in the labor crew for this operation and the material transport time in Transport Time Column which is the time it takes to transport material from this operation. The value for transport time must be 0 or greater. www.mbaprojectfree.blogspot.com Page 37
After entering the above details, MSD changes the routing status from ‘Plannable’ to ‘Buildable’. Once the assembling process starts, the required material is retrieved from the stores using an issue slip by using the screen in fig: 5.5 and the below mentioned path Inventory Transport Task Issue Slip FIG 5.5: CREATING ISSUE SLIP The issue slip creation screen consists of the issue number, creation date, destination to be moved, part to be moved, part description, units of measure and ‘from’ location of the part. In the issue slip, the number of items of the stock in the ‘from’ location can be viewed in the current stock column. This can be seen clearly from the fig: 5.6; where the quantity can be requested after checking the levels of current stock. www.mbaprojectfree.blogspot.com Page 38
FIG 5.6: ISSUE SLIP – PART DETAILS The Stores Requisition/ Issue slip that is printed later to enable the movement of material from stores to shop is attached in the Appendix. Shop Order - A shop order is an electronic document that authorizes the manufacture of a specified part. When a shop order number is entered, the system creates material requirements and schedules operations. The system retrieves operations and structures according to the part, alternative, and serial number that are entered. The shop order is created using the screen shown in fig: 5.7 and is opened using the following path: IFS Navigator Shop Orders Shop Order State: This field displays the status code that indicates the progress of the shop order in the manufacturing process. It also controls what the user can do with the shop order. When a new shop order is entered, the system sets its status automatically to either Planned or Released. www.mbaprojectfree.blogspot.com Page 39
The various shop order status codes are: Planned - A Low – status shop order, e.g., an order for a part that user has planned but have not yet made the final decision to manufacture. User cannot reserve material or schedule operations for an order with this status. Parked - A shop order that has been blocked, or must be released before user can process it further. Released - A shop order that has been released for production. Reserved - A shop order that has been reserved. Started - A shop order that has been started. Closed - A shop order that has been closed. FIG 5.7: SHOP ORDER CREATION www.mbaprojectfree.blogspot.com Page 40
The other fields in the above screen that need to be filled are – a) Order No - field displaying the shop order number b) Rel field - displaying the release number of shop order c) Seq field - showing the sequence number of shop order d) Part No - The number identifying the part that will be manufactured. e) Description - The part description in the Description field f) Site field - identifying the site at which the shop order is entered g) Earliest Start Date field - displays the earliest date on which the shop order can start h) Start field - displays the actual date on which the shop order can start i) Lot Size field - displays the desired lot size, i.e., the total quantity to be manufactured j) Need Date field - displays the earliest date by which the shop order must be completed k) Finish field - displays the actual date on which the shop order is completed l) Operations field - displays the status of the operations needed for manufacturing. This field gets updated automatically with reporting of operations, qty completed, set-up time or manufacturing time. The values can be No Report, Partially Reported and Completely Reported. m) Qty Complete field - displays the quantity of the parts completed and received into inventory. User cannot update this field; it is updated automatically when stores receive completed parts in inventory. n) Operation Scrapped field - displays the quantity of the parts scrapped during the manufacturing process. o) The work order number – It follows a coding scheme as follows: For e.g.: - 11/165/1/25 is a work order number; Here, 11 indicates the Site Division, 165 is the Project Code 125(Last 3-digits of the work order) is the Batch code www.mbaprojectfree.blogspot.com Page 41
The Shop Order Header – Material Tab in fig: 5.8 can be used to view component material needed to manufacture the parent part. These can be revised by adding new components, e.g., material that is needed only for this shop order; need not be added to the part structure. The material can even be reserved for a particular shop order. FIG 5.8: SHOP ORDER – MATERIAL TAB This window contains: Line Item No: This column is used to sequentially number the component parts. Component Part: Shows the component part. Part Description: The description of the selected part. Date Required: The date on which the part is required in manufacturing. If no other date is specified, this date is the original start date of the shop order. If user link material to an operation, the date required is the start date of the operation. Qty per Assembly: This column displays the quantity of component parts needed to manufacture one parent part. This information is provided at the time of entering the part structure. Fix Scrap Qty: The fixed scrap quantity. The fixed scrap quantity is the total number of parts that will be scrapped, regardless of the amount manufactured. Scrap Factor: The scrap factor is the percentage value relative to the total amount manufactured. www.mbaprojectfree.blogspot.com Page 42
Qty Required: Qty required column displays the total quantity of component parts needed for the shop order. This information is calculated based on the quantity per parent part and the lot size of the shop order. The quantity required is calculated as shown below: Quantity Required = ((Quantity per Assembly * Lot Size) / (1 – (Scrap Factor / 100))) + Fix Scrap Qty Shop Order Header – Operation Tab in fig: 5.9 is used to view and change information about the machine and the labor operations needed to manufacture the parent part for a shop order. Operations may include machine information, labor information, or both. Labor information requires a labor class, crew size, labor setup time, and manufacturing factor. Both machine and labor information may have associated setup times, manufacturing/labor factors, or both. FIG 5.9: Shop Order – Operation Tab www.mbaprojectfree.blogspot.com Page 43
This window contains: Operation No: This column displays the number of the operation. This information is taken from the operation list of the part that is entered at the time of routing definition. Operation Description: This column displays the description of the selected operation. Oper State: This column displays the status of the operation. User cannot update this column. It is updated automatically according to the actions performed in the operation. Work Center No: This column displays the work center that will perform the operation. This information is entered at the time of product structure creation. Outside Op Item: This column displays the part ID used for the subassembly when handled in outside processing or subcontracting. Qty Complete: This column displays the quantity of the parts completed by the operation. User cannot update this value; it is handled automatically when quantity is reported. Qty Scrapped: This column displays the quantity scrapped by the operation. User cannot update this value; it is handled automatically when scrap is reported. Remaining Qty: This column displays the remaining quantity to manufacture in the operation. User cannot update this column. The quantity is automatically reduced when stores receive into inventory. Outside Qty Shipped: This column displays the quantity of the subassembly shipped to the outside processor or subcontractor. Labor Class No: This column displays the labor class to which the labor operation belongs. Labor Setup Time: This column displays the setup time needed before labor activity for the operation can start. This information is retrieved from the operation list that is entered at the time of routing creation for the ordered part in the Routing window. Labor Factor: This value, together with the factor unit, indicates the time required for labor in this operation. This information is also retrieved from the operation list that is entered at the time of routing creation for the ordered part in the Routing window. Crew Size: This column displays the crew size of the operation. Remaining Labor Hours: This column displays the time remaining for the labor operation. www.mbaprojectfree.blogspot.com Page 44
Factor Unit: This column displays the labor factor unit. The possible values are Hours/Unit, Units/Hour and Hours. Transport Time: This column displays the transport time of the operation, i.e., the time it takes to transport material from this operation to the next. Efficiency: This column displays the efficiency of the labor operation. Sched Direction: This column displays the scheduling direction of the shop order. The possible values are Backward Scheduling, Forward Scheduling and Manual Scheduling. Backward Scheduling is based on the need date. In forward Scheduling, operation is scheduled as soon as possible. In Manual Scheduling, the scheduling begins by entering both the start and finish dates. Op Start Date: This column displays the start date for the operation. Op Finish Date: This column displays the finish date for the operation. Queue Time: This column displays the queue time for the work center, i.e., how long the material must wait before the operation can begin. This information is retrieved from the work center master. Sched Capacity: This field displays the scheduling capacity for the work center. Possible values are Infinite Capacity and Finite Capacity. Work Guideline: This column indicates whether there is a work guideline for this record. Possible values are yes and no. Shop Order Header – Operation Tool Tab in fig: 5.10 is used to view, add and modify information about the tools needed to manufacture, disassemble, repair or assemble the parent part. It can be used to create new operation tool records or revise existing operation tool records. www.mbaprojectfree.blogspot.com Page 45
FIG 5.10: SHOP ORDER HEADER – OPERATION TOOLS TAB Operation Description column displays the description of selected operation. Tool Description column displays the description of selected Tool Id. The quantity of the tool used for this operation is entered in the Tool Quantity column. Shop Order – Check Material Availability (Material Coordination) is used to check the availability, i.e., the demand and planned receipts, of the inventory parts that are included on the shop order. Shop Order – Release Shop Order - Once the order is released, the further processing of the shop order can be carried out. Pick List (Shop Document Generation) A pick list as shown in the Appendix is created based on the shop order and the structure of the part. It shows the inventory locations from where the parts will be picked. The pick list contains all material to be used in manufacturing the shop order. Shop Order – Report Shop Order Operation This activity is used to report the time and quantity for a shop order operation. It can be the time needed to set up an operation before manufacturing begins or the time of the actual manufacturing. As a result of this activity, depending on how the operations are www.mbaprojectfree.blogspot.com Page 46
performed, the system changes the status of the operation to Setup started, Setup complete, Partially reported, or Closed. Operation Reporting: Respective departments are responsible for reporting the shop order Inspection Operation. This is done by Raising MRB Against the Shop Order (Manufacturing). The Inspection Department is authorized for creating the MRB against the shop order. By raising MRB, the Inspector can say whether the components or assemblies are accepted, can be reworked or are rejected. To create this MRB, the various fields like Description which is the Name/ Staff no. of the person inspecting, MRB Code which is ACC or SNAG or PDO etc are to be entered. MRB number is automatically generated. This is shown in fig: 5.11 and 5.12. FIG 5.11: SHOP ORDER – MATERIAL REVIEW BOARD www.mbaprojectfree.blogspot.com Page 47
FIG 5.12: DISPOSITION ACTION BIV is a Bulk Issue Voucher that is printed against Top assemblies or group of assemblies. It is a list of all the materials required from the stores. A sample of this BIV is attached in the Appendix. There are many other manufacturing reports that are used during the operations whose functions are already explained above like the process sheet, pick list etc; which are also attached in the Appendix. www.mbaprojectfree.blogspot.com Page 48
5.2 IMM PROCESS IMM (Integrated Material Management) module consists of three departments namely Material Control, Purchases and Stores. The main task of the Material Control department along with the IT department is to make a material requirement plan (MRP) for the different projects of the division. MRP is a detailed summary of the materials required for different projects based on the inputs given by the shops. In MRP, each item has a rate based on a manual rate estimation or prior purchase experience; which has to be sanctioned by the head of that department and the finance department. MRP is for the purchase of new materials that are required but if the items are already available, then a Material Requisition (MR) is sent from the shop by raising an issue slip for the issue of required material from stores to the shop or shop planning. Also, it is the Material Control department that assigns a material code; which is usually of 8 digits to different materials for identification purposes. From Material Control, the MRP is handed over to the Purchase department to plan for the purchase of materials that are required based on prior consumption pattern. The Purchase Department is responsible for the categorization of the items of the suppliers to know what they can supply. For the selection of these suppliers, a vendor data and vendor rating is maintained by the material control and purchase departments. The vendor rating is given based on their delivery schedule, payment schedules etc; which form the base for placing the purchase order. Firstly, an enquiry sheet is sent to the suppliers by email or courier; along with the terms and conditions and last date for receiving the quotation. A committee consisting of people from purchase, finance and material control departments is then formed to decide on the suppliers. The bids received from the suppliers in a sealed cover are opened on the last date mentioned before. Following this, a comparative statement of suppliers is generated by the system to help in making the final decision. The file goes to the finance department to wet the costs; either increase or decrease in costs. After this, a purchase order (PO) is made. Initially, a draft purchase order is sent and any disagreement that arises with respect to the costs is sorted out. A final purchase order is then sent to the supplier. A sample of this PO is attached in the Appendix. www.mbaprojectfree.blogspot.com Page 49
When the supply is received, the invoice and test certificates are generated. This supply goes to the stores and a draft receipt voucher is made. Inwards Goods Inspection or Quality Control department inspects these inward goods; the goods that are found faulty are rejected and the quantity that is accepted is entered in the system. Then, based on the invoice which also goes to the finance department for approval; the payment is done by reducing the rejected costs. For foreign suppliers, charges vary everyday due to exchange rate fluctuations and so, payment is done based on that day’s exchange rate. After this, a final receipt voucher (RV) is printed and the goods are now sent to the receipt stores. The receipt stores are of two types called indigenous and imported or third country stores. If the suppliers are of foreign country, then the goods are sent to third country stores or else to the indigenous receipt stores. From there, the goods are then moved to the holding stores based on the requirements of the projects. The procedure as explained above is shown in the form of a flow chart below in Fig: 5.13. Hence, the procurement of raw materials and launching of the required material into the shop is the sole responsibility of the IMM departments. www.mbaprojectfree.blogspot.com Page 50
FIG 5.13: FLOW CHART SHOWING IMM PROCESS www.mbaprojectfree.blogspot.com Page 51
The activities of IMM using the IFS tools are briefly described below. The snapshots of the IFS screen are also shown for better understanding of these processes. The distribution.exe is the executable file used by the IMM departments. Firstly, the preparation of MPR by the Material control department is described by using Fig: 5.14. The following menu path is followed for this purpose: Purchasing Purchase Requisition FIG 5.14: PREPARATION OF NEW MATERIAL PURCHASE REQUISITION (MPR) Various details are to be entered in the relevant fields by the IMM people like the Part No. which is the Material Code of the item, Quantity which signifies the Quantity to be requested, Wanted Receipt Date, Tentative Delivery Date, Supplier or the Vendor Code etc. www.mbaprojectfree.blogspot.com Page 52
FIG 5.15: DETAILS OF SUPPLIER FOR PURCHASE PART Once the supplier has been decided, the details regarding the supplier of the purchase part like the supplier name, part description, price, price unit etc; are entered into the systems as shown in the above screen Fig: 5.15. But before this, when the tender is raised, the details of all the suppliers biding for the order should be there in the system. This is done by the creation of new suppliers in the similar way as is done for the customers by using the following menu path: Enterprise Supplier Supplier It consists of fields like the identity which is the supplier code, name of the supplier, default language, country origin of the supplier etc. It also has various other tabs as shown in Fig: 5.16 like the address, communication method, invoice details etc. www.mbaprojectfree.blogspot.com Page 53
FIG 5.16: CREATION OF A NEW SUPPLIER After the above process, a tender enquiry is raised and this enquiry sheet is sent to the vendors for them to enter their bids. The menu path for the tender enquiry screen is as follows: Purchasing Tendering Tender Entry It contains fields like the tender number, bid receiving date, bid closing date, bid opening date, submission date, part number, part description for which the tender is raised, the bidding amount etc. The screen
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