Hindalco Industries Ltd Purchase Order
Transcript of Hindalco Industries Ltd Purchase Order
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INTRODUCTION
ADITYA BIRLA GROUP OVERVIEW
GENESIS:
Aditya Birla Group traces its origin back to the tiny village of
Pilani in the Rajasthan desert, where, late Shri Seth Shiv
Narayan Birla started cotton-trading operations in 1857.
Then one visionary the late Shri G.D Birla set up Indias first
integrated aluminium manufacturing unit at Renukoot, in
1962, backed by captive power plant at Renusagar in 1967.
It further evolved under the dynamic leadership of the late
Shri Aditya Vikram Birla a prominent figure in the Indian
industry, under whose stewardship Hindalco attained its
leadership position in aluminium. Today our Group chairman,
Dr. Kumar Manglam Birla has put together the building
blocks to make Indian business a global force.
The Aditya Birla Group is Indias first truly multinational
corporation global in vision, rooted in Indian values, A US $24
billion corporation with a market cap of US $31.5 billion and
in the league of Fortune 500, the Aditya Birla Group is
anchored by an extraordinary force of 100,000 employees,
belonging to 25 different nationalities. In India, the Group
has been adjudged The Best Employer in India and among
the top 20 in Asia by the Hewitt-Economic Times and Wall
Street Journal Study 2007. Over 50 per cent of its revenues
flow from its overseas operations.
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The groups products and services, offer distinctive
consumer solutions. Its 66 state-of-the-art manufacturing
units and sectoral service span throughout the world.
Entry of Syt. Ghanshyam Das Birla
1916 - First taste of industrial management take over
of sick
cotton mill in Delhi.
1918 - First limited company Birla Brothers Limited.
The real industrial thrust in 1919 with Birla
Jute in Calcutta and 1921. Jiyajeerao Cotton
Gwalior
Birla Jute was established in defiance of
Scottish monopoly.
1923 - Purchase of Kesoram Cotton.
1926 - Orient Paper Mills.
1931-33 - Bharat Sugar, Upper Ganges Sugar, New
Swadeshi Sugar,
New Delhi Sugar.
By 1947 - Assets wroth Rs. 25 crores in 20 companies.
Thereafter1954 - Durgapur Iron & Steel
1957 - Gwalior Rayon, Nagda
1962 - Hindalco commencement of production
1966 - Take over of Indian Rayon
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ADITYA BIRLA GROUP
A truly multinational Indian GroupThe Aditya Birla Group was the first in Indian to venture
overseas, by starting a joint venture in Ethiopia. Thereafter,
over the last quarter century, this group has started 20 very
successful and diversified ventures spread through the Asian
region. It has been declared by Euro money that this is the
only truly multinational group of India.
At present, the group has more than 50 manufacturing units,
producing a diverse range of products, financial service,
trading and computer consultancy. It is also expanding its
activities in the field of telecom, oil refinery, power
generation, copper smelter etc.
Globally the Aditya Birla Group is:
A metals powerhouse, among the worlds most cost-
efficient aluminium and copper producers. Hindalco-Novelis
from its fold is a Fortune 500 company. It is the largest
aluminium rolling company. It is one of the three biggest
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producers of primary aluminium in Asia, with the largest
single location copper smelter.
No.1 in viscose staple fibre
The fourth largest producer of insulators
The fourth largest producer of carbon black
The 11th largest cement producer globally
Among the worlds top 15 BPO companies and among
Indias top three
Among the best energy efficient fertilizer plants
In India:
A premier branded garments player
The second largest player in viscose filament yarn
The second largest in the chlor-alkali sector
Among the top five mobile telephony companies
A leading player in life insurance and asset management
Among the top three supermarket chains in the retail
business
Rock solid in fundamentals, the Aditya Birla Group nurtures a
culture where success does not come in the way of the need
to keep learning afresh, to keep experimenting.
Beyond business Reaching Out
A value based, caring corporate citizen the Aditya Birla
Group inherently believes in the trusteeship concept of
management. A part of the groups profits is ploughed back
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in to meaningful welfare driven initiative that make a
qualitative difference to the lives of marginalized people.
These activities are carried out under the aegis of the Aditya
Birla Center for community initiatives and Rural
Development spearheaded by Mrs. Rajashree Birla.
Beyond business the Aditya Birla Group is:
Working in 3,700 villages
Reaching out to seven million people annually through the
Aditya Birla Centre for Community Initiatives and Rural
Development, spearheaded by Mrs. Rajashree Birla
Focusing on: health care, education, sustainable livelihood,
infrastructure and espousing social causes
GROUP PHILOSOPHY
RESTS ON FOUR PILLARS: CUSTOMERIZE
PEOPLE- IZE
STRATEGIZE
INSTITUTIONALIZE
GROUP VALUES
OUR VALUES ARE NON NEGOTIABLE, THEY ARE NEVER TO BE
JETTISONED, FOR US OUR VALUES ARE OUR WELLSPRING.
THESE ARE:
INTEGRITY
COMMITMENT
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PASSION
SEAMLESSNESS
SPEED
GROUP VISSION
TO BECOME A PREMIUM CONGLOMERATE WITH CLEAR
BUSSINESS FOCUS AT EACH CORPORATE LEVEL
GROUP MISSION
TO DELIVER VALUE FOR OUR CUSTOMERS, SHAREHOLDERS,
EMPLOYEES AND SOCIETY AT LARGE
Aditya Birla Management Corporation Ltd.(ABMCL)
In a strategic move to institutionalize its management
process, the Aditya Birla Group has set up Aditya Birla
Management Corporation Limited (ABMCL) It is headed by
Board of Directors with Mr. Kumar Mangalam Birla as a
Chairman.
It is a Groups apex decision making body and provides
strategic direction to group companies.
The Group has following Achievement to its credit
The worlds no.1 in viscose staple fiber.
The third largest producer of insulator.
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The worlds third largest producer of carbon black.
The worlds eighth largest producer of cement and the
largest in a single geography.
Asias largest integrated aluminum producer.
A globally competitive, fast growing copper producer.
Indias premier branded garments player.
Among Indias most energy efficient private sector
fertilizer plants.
Indias second largest producer of viscose filament
yarn.
Indias second largest private sector insurance
company.
Among the worlds top 15 and Indias top three BPO
companies.
The group has also made successful forays into it and IT
sector and has a significant presence in the Financial
Sector and telecommunications sectors in tie-ups with
giants like Sun Life insurance (Canada) and At &T (USA)
respectively.
HINDALCO INDUSTRY LTD
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Hindalco Industries Limited, the metals flagship company of
the Aditya Birla Group, is an industry leader in aluminium
and copper. A metals powerhouse with a consolidated
turnover of Rs.600, 128 million (US$ 15 billion), Hindalco is
the worlds largest aluminium rolling company and one of the
biggest producers of primary aluminium in Asia. Its copper
smelter is the worlds largest custom smelter at a single
location.
Established in 1958, Hindalco commissioned its aluminium
facility at Renukoot in Eastern U.P. in 1962. Later
acquisitions and mergers, with Indal, Birla Copper and the
Nifty and Mt.Gordon copper mines in Australia, strengthened
the companys position in value-added alumina, aluminium
and copper products, with vertical integration through access
to captive copper concentrates.
In 2007, the acquisition of Novelis Inc. a world leader in
aluminium rolling and can recycling marked a significant
milestone in the history of the aluminium industry in India.
With Novelis under its fold Hindalco ranks among the global
top five aluminium majors, as an integrated producer with
low cost alumina and aluminium facilities combined with
high-end rolling capabilities and a global footprint in 12
countries outside India. Its combined turnover of US$ 15
billion, places it in the Fortune 500 league.
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HINDALCO INDUSTRIES LIMITED
COMPANY PROFILE
Hindalco Industries Ltd. is the Flagship Company of Aditya
Birla Group. The Aditya Birla Group is Indias second largest
business house with a turnover of Rs. 280 billion, andAssets
are valued at over Rs. 265 billion. The group has nearly
72000 employees in 18countries.
Hindalco Industries Limited was incorporated in 1958 and
commercial production commenced in 1962. The Company
was set up in technical collaboration with Kaiser Aluminium &
Chemicals Corporation, USA. Hindalco is today one of Indias
premium corporate, contributing significantly to economic
growth, generating employment and setting high standards
in respect of fulfilling of obligations to all stakeholders. The
Company prizes its Human Capital, and employees have
been reciprocating by turning in a sterling performance for
the Company, year after year. Hindalco has an enviable
record of harmonious Industrial Relations, with not a single
man day lost since the past 30 years on account of industrial
strife. Companys principal products comprise of Aluminium
Ingots, Aluminium Billets, Aluminium Wire Rods, Sheet
Products, Extrusions, Aluminium Foils and Aluminium Alloy
Wheels. The Companys by products include Gallium Metal,
Vanadium Sludge and Aluminium Dross.
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Hindalco Industries Limited, one of the major producer of
Aluminium metal and its semis in the country as well as a
premier flagship company of A.V. Birla group in the biggest
industrial enterprise of Uttar Pradesh. It is a public limited
company in the private sector having about 39000
shareholders. It is the largest integrated Aluminium plant in
India with all its production facilities viz. Alumina, Aluminium
& Fabrication located at Renukoot near Rihand Dam in
Sonebhadra (Uttar Pradesh). Hindalcos power division is
situated at Renusagar about 35 km from Renukoot. In
September 1959, an industrial license was granted by the
Government for setting up an integrated Aluminium plant at
Renukoot, with an initial installed capacity of 20000 MT. The
construction work was completed with 18 months, a record
for a major job of this kind.
The dream of the great visionary Syt. G.D. Birla to locate an
Aluminium plant near Rihand power house came true. The
late Prime Minister Pt. Jawaharlal Nehru, formally
inaugurated the plant in January 1963. From the modest
beginning in 1962, Hindalco has now become an industrial
giant with capacity to produce 242000 MT of Aluminium per
annum.
Renukoot a fast growing & thriving industrial township, which
is now humming with activities & providing all the basic
amenities of modern life to the inhabitants. From being one
of the most backward areas of U.P., it has now carved a
place for itself on the industrial map of India as well as
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World. Lying in the foothills of the Vindhya range, Renukoot
is about 165 km from Varanasi and 154 km from Mirzapur.
The expansion programme of plant from the initial capacity
of 242000 MT took place in the stages during the last thirty
five years. Apart from catering to the internal demand of
Aluminium in the country, Hindalco is also exporting
Aluminium semis to various countries including U.S.A.,
Germany, Japan etc. Renusagar power, a divisionof Hindalco
is the major supplier of power to Hindalco. The power
generating capacity of Renusagar power division has
increased to 575 MW since last year. Now Renusagar is able
to meet the full requirement of Hindalco.
Hindalco is an ISO-9002 company since 1994. Recently in
July 1998 it has also received the certification of ISO-14001
for environment maintenance system. The company has
been able to continuously enhance the quality and range of
the product and provide customer satisfaction.
In 1962 when production started, the company had on its roll
about 900 staff and workmen and the present strength of
employees is about 14000. The office and works site is
located at Renukoot and there are zonal offices at Bangalore,
Bombay, Delhi and Calcutta.
The company is managed by a Board of Director and other
Senior Executives.
Management
Syt. Kumar Mangalam Birla - Chairman
Syt. Debu Bhatacharya - Managing Director
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Hindalco today
Hindalco ranks as one of the largest Aluminium producer inIndia and contributes about 35% of the total Aluminiumproduction of the country. The companys fully integratedAluminium operations consist of the mining of Bauxite,conversion of Bauxite into Alumina, production of primaryaluminium from Alumina by electrolysis and production ofproperzi redraw rods, rolled products and extrusions.
Capacities Present
Power 575 MW
Alumina 4,50,000 MT p.a.
Aluminium 2,42,000 MT p.a.
Rolled products 80,000 MT p.a.
Extrusions 15,000 MT p.a.
Wire rods 50,000 MT p.a.Foils 5,000 MT p.a.
COORPOR
ATE
(RATAN
SOMANI)
SMELTER
HEAD(UmakantBabulal
Agarwal)
POWER
HEADS.v.s
Smyanaray
an)
MEHENICAL HEAD
MECANICAL HEAD
TECHNOLOGY
HEAD
CIVILHEAS
ELECTRICAL HEAD
MECHENICAL
HEAD
TECHNOLOGICAL
HEAD
CIVILHEAD
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Co-generation 37 MW
Joint venture companies of Hindalco1. Indo-Gulf Fertilisers & Chemical Corporation Limited2. Bihar Caustic & Chemicals Limited3. Tanfac Industries Limited4. Mangalore Refinery & Petrochemicals Limited (MRPL)5. Birla AT & T Communications Limited6. Bina Power Supply Company Limited7. Birla Global Finance Limited (BGFL)8. Birla Capital International AMC Limited (BCIAMC)
9. Rajshree Polyfil Limited
HINDALCOS VISION
To strengthen our position as a premium aluminium
company, sustaining domestic leadership and global
competitiveness through innovation, quality and value added
growth.
HINDALCOS MISSION
To relentlessly pursue the creation of superior shareholder
value by exceeding customer expectations profitably,
unleashing employee potential and being a responsible
corporate citizen adhering to our values.
.
HINDALCOS STRATEGY
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EFFICIENCY FOCUS: To be one of the lowest cost producersglobally.
EFFECTIVENESS FOCUS: To continue to remain the market
leader domestically.
GROWTH FOCUS: To purchase value adding growth
opportunities in aluminium.
HUMAN RESOURCE (HR)
Human Resources play a vital role in shaping a healthy and
growing organization. Without doubt, human resources
development has hence been aptly described as the soul
of a vibrant and dynamic organization. The increasing
complexity and problems of managing human resources
places heavy demands on ensuring equal emphasis on all
the sub-systems which play a crucial part in ensuring holistic
development of the human resources. Human Resources
Management has gained immense importance in todaysenvironment of global competition to meet future challenges
in the new millennium. In these days of rapid advancement
in Information Technology and Techno-Commercial aspects
of business, it would be eventually the Man behind the
Machine who would determine which way / direction an
organization goes.Human Resources Development systems have an important
task in achieving the required dynamics to enable any
organization to perform at its peak. The right recruitment
and selection to start with, progressive training and
development thereafter, and, a fair performance appraisal
system gives an impetus to professional and proficientmanagement of HR. There is yet another dimension of HRM
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which is directly related to, and falls within the ambit of
organizational development that deserves major attention
because the character & culture of an organization is
formed by HR of the organization and that will finally decide
the future of the organization.
After said all this, it is imperative to consolidate on the
available human potential and check HR wastages to ensure
organizational effectiveness as it has become a key to
sustain excellence and achieve competitive advantage over
others. thus assumes an even greater relevance in the
existing changing business scenario especially so when there
is a paradigm shift in the Organizations approach towards
Human Resources Management in outlining specific roles.
Without defining HR vision, roles & objectives, an
organization would jeopardize its growth and survival
therefore it is all the more necessary to indigenize the HR
sub-systems for ones own benefit after a close microscopic
scrutiny.
.
HINDALCO HR VISION, MISSION & OBJECTIVES
HR VISION
To provide an enabling environment where employee
competencies are nurtured and harnessed towards
sustainable business growth and leadership.
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HR MISSION
To proactively assess and provide for the HR needs of the
business and customer for the attainment of organizational
goals.
HR OBJECTIVES
To collaborate with and support internal customer of HR
in achieving business objectives through HR servicesviz. effective manpower planning , ensuring harmoniousindustrial relation etc.
To review and redesign the structure of the organisation
with the clarity of roles, responsibilities andaccountability for overall organizational effectivenessand speeding response to emerging businesschallenges.
To develop knowledge and skills of the employees and
groom leaders with functional and businesscompetencies to meet future demands of theorganizational (viz. flexibility and change management).
To benchmark best HR practices in order to enhance
human resource effectiveness. To enhance employee productivity through
rationalization of jobs and manpower optimization.
To promote employee involvement in decision-making,
team working, creativity and empowerment.
To institutionalize transparency by framing, updating
and communicating systems and processes.
To maintain good liaison with government/ external
agencies in order to better serve the organizational
cause. To provide a safe and healthy work environment and
continuously benchmark and upgrade the standards ofsafety and hygiene.
To work towards improving the quality of work life of
employees and the lives of their families.
HINDALCO INDUSTRIES LIMITED
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Organisation Chart of HRD Division
Services directly or indirectly end to Customer Satisfaction.
Satisfaction is a emotional response to his or her prior
experience with and expectations with the benefits provided
by the services of service department of the organisation. It
is believed that satisfaction will influence future. Customers
can experience satisfaction with;
Organisations services, overall
Specific performance aspects of organisations services
Organisations conduct of transaction (delivery of
services, repair visits, complaint handling, etc...)
The kind of relations between employees and the
organisation.
V.P. (HR)
Head, HRDHead
Security &Head E.RHead-Safety
School ( allprinciples)
Medical
services
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Services can be explained with the help of a following cycle
SATISFIED
CUSTOMERS
LOWER
CUSTOMER
CHURN
HIGHER
PROFIT
MARGIN
LOWER
EMPLOYEE
TURNOVER
IMPROVEED
EMPLOYEE
SATISFACTION
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Following model presents the interrelation between customersatisfaction and
Loyalty interrelates. This model advises that loyalty to bemore of an emotional bond, while satisfaction deals more
with functional performance.
The management shall review the organisations quality
management system, at planned Intervals, to ensure its
continuing suitability, adequacy and effectiveness .this
review shall include assessing opportunities for improvement
and the need for changes to the quality policies and quality
objectives.
The input of management reviews shall include informationon:
Customer
Loyalty
Product
Satisfaction
Channel
Assets
Brand
awareness
Emotional BondsPerceived
Caring
Brand
Image
Accessibility &responsiveness
Trust & Confidence
Perceived Caring
Perceived Knowledge
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Results of audit
Customer feedback
Process performance
Changes that could affect the quality management
system Recommendations for improvement
The main objective of the measurement of performance of
the Quality Management System. The organisation shall
monitor information relating to customer perception as to
whether on the organisation has met customer
requirements.
Considering Hindalco industries limited, Renukoot,
emphasises on the benefits of customer satisfaction. The
service departments of Hindalco are :
Recruitment/ Personnel
IT
Building Maintenance
Accounts
Town Admin, Security and Camp Office
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INFORMATION TECHNOLOGY
For ensuring Quality, Service and Information Security, IT
Department has established ITMS based on PDCA model and
with the help of integration of ISO9001:2000 (Quality
Management ), BS 15000 (IT Service Management) and ISO
-27001 (Information Security Management). Hindalco IT
Department is Worlds 1st integrated implementation of 3rd
International IT Standards , which is certified by DNV in Dec
2005. Our main objective is to implement the best practices
and continuously improve upon it.
The DR solution setup at Renusagar ensure Businessapplication availability in case of disaster , which is an on-
line true replica of Database server at Renukoot, results to
zero data loss by implementation of State-of-the-art Metro
Mirror Technology.
Information Security Prerequisites
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The deployment and use of information system in the Group
are governed by the Information Security Policy of the Group.
Upon joining Aditya Birla Group, employees are required to
sign Information System Acceptable Use Agreement
before they can access any of the Groups Information
System.
Access to Information System
Employees will be granted access to Information System
based on business needs. Users will be assigned a unique
identification code (User ID) and password to enable them to
gain access to Information System. The IT department
regularly monitors and audits the usage of Information
System.
IT department generally provide services to the employee in
the form of following:
Setup i.e. Change Calls
Bug i.e. Incident Calls
Information i.e. Information Calls
For solving the employees problem/complaint IT Department
has software called Calls Management System (CMS).
The IT Department has signed two agreements:
Service Level Agreement (SLA) Operation Level Agreement (OLA)
SERVICE LEVEL AGREEMENT (SLA) - This agreement is signed
between IT Department and other Departments that the
complaints will be solved within the specified period.
OPERATION LEVEL AGREEMENT (SLA) - This agreement is
signed internally among employees of IT Department that
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the particular complaint will be solved within specified
period.
BUILDING DEPARTMENT
Building Department looks after Colony Maintenance. It
includes more than 8000 quarters. Building department has
the following functions:
Construction
Routine Maintenance Development
CONSTRUCTION
Construction include jobs like
The job of construction does not exactly deal with the
services that are rendered to the employees.
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MAINTENANCE
Accepts the complaint through:
Online
Telephone Writing
DEVELOPMENT WORKS
Major maintenance problems are considered asDevelopment Works.
Their job is being identified into following categories: Painting
Carpentry
Fabrication
Plumbing
Massionary
ACCOUNTS DEPARTMENT
Every organization has some objectives and whether these
are achieved or not is also monitored. It is possible when all
the transaction evaluated in terms of money and is recorded
in a meaningful manner. The process of keeping these
records is called Accounting and the department that does
it is called as Accounts Department.
The main task of the accounts department is to advise
management on the financial matters and maintain accounts
prescribed under the companies act. A necessary part of this
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function is proper accounting of income and expenses and
assets and liabilities. There are many function in the
Accounts department i.e. Accounting, Audit, Taxation, PF,
Banking, Insurance, Fixed Assets, Cash Receipts Payments,
Budgeting etc.
The Accounts Department performs their function in the form
of service to the employees in the following manners:
1. Gratuity2. Super Annuation3. Reimbursement of Bills
4. Insurance5. Provident Fund6. Ex-Gratia Payment
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CONCLUSION
In our project Purchase Order Procedure in Hindalco Co. Ltd.(Mahan Project),
We have finalised the service indicators for all the service
departments of Hindalco Industries limited.
Today is the buyers market. In the world of globalisation, by
ensuring merely the customer satisfaction, the organisation
can survive but it cannot flourish and compete with the
competitors. For that, it is important to move from customer
satisfaction to customer delight and ultimately to customer
obsession, only then
the organisation can rule the market. There are both
external and internal customers whose attitudes, opinions
and behaviour affect the organisations day-to-day success:
External customers- external customers exist outside the
organisation. This type that comes to mind are end-use
customers, the ones who use or consume the product or
services of the organisation for their own purposes or
production.
Internal customers- employees of the organisation for whom
the service departments provide product, services or
servicing.Stakeholders- are those whose interests are linked with the
organisation. It includes employees, stockholders,
community leaders .
If the internal customers are satisfied, then only it is possible
to attract and retain the external customers.
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Service indicators are basically framed to ensure the
satisfaction of internal customers and developing the culture
where the organisation can ensure the best
LIMITATIONS:
Based on certain organisations restrictions, certain
data cannot be revealed to general mass.
Limited time period.
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How to Create a Formal Purchasing Program
Make sure you're purchasing quality supplies at good prices
by formalizing your business's purchasing.
It's easy to neglect the area of purchasing in your business.
Of course you buy goods and services, but you don't always
plan the purchases as well as you could. As a result, you may
spend more money than they need to, buy goods that aren't
of the proper quality for your needs, or choose suppliers that
don't offer the level of customer service you deserve.
If you fail to devote enough attention to your purchasing,
your cost of doing business could rise to an unnecessarily
high level. As operating expenses increase, profit margins
shrink, you would either have to live with lower profits or
raise your prices, and neither of these choices is appealing.
By keeping your costs under control, you'll be able to keepyour prices at competitive levels and maintain a desirable
profit.
Purchasing Policies
To purchase wisely, you need to buy the right quality and
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quantity of materials or products at the best possible price
and at the appropriate time from the best vendor.
The purchasing process is much more streamlined in smallcompanies than in larger businesses, especially when the
businesses are still fairly new. The owner usually decides
what to buy, when to buy, where to buy, and how much to
buy. As the business grows, however, the owner may no
longer be able to handle this task and will have to delegate it
to others. While a small business probably won't need tocreate an entire purchasing department, it will need to have
a purchasing manager. By selecting one person to manage
all of the business's purchasing activities, you will decrease
the risk of duplicating orders for the same materials.
Purchasing need not be the purchasing manager's sole duty;
in fact, your business may not do enough purchasing to
require a full-time purchasing manager. You should select an
employee who can handle purchasing, as well as the other
duties he or she my already have. This individual should be
able to communicate clearly with your business's suppliers.
Although purchasing duties probably won't occupy all of this
individual's time, there is more to purchasing than placing
orders. The purchasing manager will have to gather orders,
make sure they are complete, and stay within any limits the
company may have set on spending, select an appropriate
vendor, order the goods, check their condition upon receipt,
make sure the invoice is correct, and speed payment of the
invoice by forwarding it to the accounting department.
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Before you delegate the purchasing function to another
employee, you should write out a purchasing policy for your
business. You may even want to create such a policy while
you are still responsible for purchasing, as a guide for
yourself.
The purchasing policy, according to the SBA, should answer
the following questions:
Who has the authority to purchase items for the
company? What items can that person purchase? Are
there any spending limitations?
What are the business's requirements for adequate
supplier competition and what criteria will be used to
select possible vendors?
What is the company's position on the acceptance of
gifts?
Which types of contracts can the business enter into
with successful bidders or vendors?
What is the company's position on conflict of interest
and personal loans from suppliers?
What kinds of information does the company consider
confidential?
What is the procedure for dealing with legal questions?
The Ordering System
The steps your employees and purchasing manager will
follow to request, order, receive and pay for goods and
materials make up your ordering system. A good ordering
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system will help maintain satisfactory supplier relations,
improve cash management, aid in inventory control, and
increase the overall profitability of your company.
The Purchase Order
Once the purchasing manager has received a requisition, her
or she will need to select a supplier and check the price of
the items ordered. After agreeing on a price, the purchasing
manager will send a purchase order to the supplier. This
order is a formal request to the supplier to deliver materials
or supplies according to the terms and prices agreed upon.
Purchase orders, like requisition forms, can help small
businesses keep track of their purchasing activities. Firms
can refer to their purchase orders to see if suppliers have
shipped the correct goods in the correct quantity. They can
also see if suppliers are delivering goods on time. Purchase
orders can also serve as support in any legal disputes if they
arise between you and the supplier.
Although you can write out purchase orders by hand, you
would give a better impression if you used standard multi-
part forms that you can purchase at any stationery store.They should include information such as the type of product
or service you are ordering, the quantity desired, price and
delivery terms. The orders should also have an area for any
additional information. Purchase orders should also include
your company name, address, telephone and fax numbers,
and logo. You can simply write in this information, stamp thisinformation on your purchase orders with a rubber stamp, or
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design and print your own purchase order forms. Purchase
orders should have at least three parts: a vendor copy, an
internal file copy, and an accounting copy.
In addition to the standard purchase order, you might choose
to use two other types: blanket purchase orders and annual
contracts. If you routinely order fairly inexpensive items from
a single vendor, you might want to place a blanket order for
those items with the vendor. The blanket order covers
specific items to be delivered over a specific period of time,such as six months or one year. This type of purchase order
lets you take advantage of quantity discounts and saves you
the time and trouble of reordering small items you need
often. You will also receive a monthly invoice covering your
purchases for a given month, instead of several small
invoices covering each individual purchase.
Annual contracts cover the purchase of a specific product
from a vendor over a period of 12 months. An annual
contract will usually let you fix the price for buying a specific
quantity of a given item over a year. You can also arrange to
have goods delivered as needed, either monthly, weekly, or
on another specific schedule.
Receiving Records
A packing list will accompany orders you receive. Make sure
that the items shipped match the items indicated on the
packing list. Inspect all of the items shipped carefully, paying
special attention to items that appear damaged. Initial the
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packing list to verify receipt and file it in a folder until you
receive the invoice for the shipment. In many cases, you
won't have to send payment with your order; your suppliers
will either include an invoice with the shipment or send the
invoice to you separately soon after sending your order.
When the invoice arrives, check it against the packing list
and the purchase order. Write a check for the appropriate
amount, note the check number on a copy of the invoice,
and file the invoice and packing list.
If you receive any damaged items, or if a vendor sends you
items you did not order, let the vendor know as soon as
possible. The vendor will tell you the best way to return the
items and to receive the ones you actually ordered.
Fill out an internal receiving report and distribute it to those
who need to know when shipments come in, such as the
person in charge of inventory control, the buyer, the
employee requisitioning the items, and the person in charge
of accounts payable in accounting.
Although purchasing is certainly an important task and
deserved careful attention, you will not be able to spend thesame amount of time on all of your purchases, nor should
you. More expensive items, for instance, deserve more
careful attention and consideration than less expensive ones.
The following four considerations will help you decide what
items deserve the most attention, according to the SBA:
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1. Unit cost. The SBA recommends that you give more
attention to costly items than to less expensive ones.
The more money you have tied up in a given type of
inventory product, the more attention you need to give
to that product in your purchasing, even if you sell few
of these expensive items.
2. Extended cost. The SBA points out that some items
may have a low cost, but you may buy and sell them in
high volume. In this case, you may need to give a
higher priority to these items, although their unit cost is
fairly low.
3. Lead time. You need to consider the time to allow
between ordering an item and receiving it. If a low-cost
item has a long lead time, for instance, you would need
to make regular checks on its delivery status. In that
case, the SBA says, you may need priority.
4. Shipment rejection. If there is a high possibility you
will reject an item because of technical problems or
deficiencies in quality, the SBA suggests assigning it a
high priority.
The Costs of Buying
In addition to the cost of goods you buy, you also have to
pay and account for the costs of acquiring and carrying
inventory.
Inventory acquisition costs are costs associated with
generating and processing orders, and include the following:
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Portions of employee salaries and operating expenses
directly pertaining to purchasing, inventory control,
receiving, inspection and accounts payable.
Costs of supplies such as forms, envelopes and
stationery.
Costs of placing orders (telephone, fax, postage, etc.)
Inventory carrying costs usually consist of the following
elements:
Interest charged on your financial investment into
inventory.
Cost of insurance covering your inventory.
Property taxes paid on inventory.
Cost of storing inventory.
Obsolescence and deterioration of items in inventory.
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Buy Wisely
Prices for the goods and materials you buy may fluctuate. If
you find that the price for a given item is rising, do not buylarge quantities of this item thinking that the price will rise
even higher if you wait. Instead, the SBA advises that you
buy smaller quantities of this item, but buy them more often.
You can quickly sell off the items you bought at high prices,
instead of tying up money in overpriced inventory. Keep
buying small quantities as prices return to their normal level.You will save money on your purchases, as well as reduce
demand for the item, "encouraging" prices to drop. Once
prices have stabilized at their normal level, you can resume
buying in larger quantities.
Discounts
Suppliers extend a variety of different discounts to their
customers. Many vendors offer quantity discounts: the more
units you buy, the less you pay per unity. These discounts
can apply to individual purchases or to a specific group of
purchases made over time, as you would make under a
blanket order. Suppliers also offer seasonal discounts that
apply to merchandise being sold out of season. The danger
with buying off-season goods is that they may go out of style
or become obsolete, and never go back "in-season." Vendors
also offer cash discounts that you earn by paying the entire
invoice within a specified time period. If you received an
invoice with the notation "1/10, Net 30," it would mean that
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you could take a one-percent discount from the net amount
of the invoice if you paid within ten days. You would
otherwise have to pay for the entire amount of the invoice
within 30 days.
Dealing With Vendors
Once you have compared prices from a group of suppliers,
you can then select your vendors. Before you place an order
with a vendor, you not only need to compare prices, but youalso need to compare credit terms, emphasis on customer
service, standing in the industry, and other related factors.
If you buy a number of different kinds of products, you may
have to use a variety of vendors. If, on the other hand, a
single vendor can meet all of your needs at reasonable
prices, you may want to give that vendor the bulk of your
business. Do not, however, rely solely on this vendor. You
should keep in contact with other vendors, and watch for
new ones. It's a good idea to be on good terms with more
than one supplier. If your primary supplier ever fails to ship
goods on time, suspends operations because of some natural
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disaster, or starts offering poor service, you will have other
sources to use as back-up.
By using a few different sources of supply, furthermore, youwill build more credit than you would if you used only one.
Your primary supplier may also offer you better discounts or
otherwise try to win all of your business.
Evaluating Suppliers
You not only need to evaluate suppliers before you place an
order, but you also need to evaluate their performance
constantly. Consider the following points when you evaluate
a supplier's performance:
Timeliness of deliveries
Completeness of orders shipped
Quality of items shipped
Quality of customer service
Competitiveness of price
Previous performance with similar orders
Strength of financial condition
Ability to meet design specifications
Expertise of sales representatives and technical staff
Locating Suppliers
Before you can approach a supplier, you need to know where
to find them. You need to be aware of where you can find
suppliers both before you begin business and after you have
started. Keep looking for new suppliers. To look for suppliers
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in your area, search online and consult the Business-to-
Business Yellow Pages and your local Chamber of Commerce.
To broaden your search, consult websites, publications and
associations pertaining to your industry; these sources
should be able to give you a number of leads.
Many trade associations and publications publish directories
listing suppliers to their industries. If you require industrial or
mechanical equipment, consult manufacturers' directories
such as the Thomas Register of American Manufacturers.Finally, talk to your employees. They may know of excellent
suppliers you might use..
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HINDALCO BARGAWAN POWER PLANT (ALUMINIUM)
ACKNOWLEDGEMENT
A Summer Training is a combination of views and ideas and suggestions
and contribution of many people. Thus, one of the pleasant parts of the writing.
This report is the opportunity to thanks those who contributed toward its
fulfillment.
I am thankful to MR. SHAILENDRA SIR (HR MANAGER) for his vital
inputs and valuable suggestions and continuous guidance, which have gone a
long way in providing necessary impetus to our efforts in consummating this
report.
My sincere thanks to his for providing with all the relevant information
for completion of my project.
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My interaction with Company was immensely pleasurable and it was an
honor to have been a small part of this training.
Last, but not the least I am thankful to all my co trainees without whom
my time at company would not have been as pleasurable.
AMRITA SHARMAM.B.A. 4TH Sem.
PREFACE
It is well evident that work experience is an indispensable part of every
professional course .In the same manner practical training in any organization is must
for each and every individual who is undergoing management course.
Without the practical exposure one cannot consider himself or herself as a
qualified capable manager. During the training period the student learn through hisown experience, the real situation of the corporate world and to put his theoretical
knowledge into practice. This experience is very valuable for the student and plays a
leading and an important role in the career of the student.
Hence to fulfill this requirement, I had completed my 45 Days in HINDALCO
Ltd.
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Entering in an organization is like a stepping into altogether a new world. At
first everything seems to be strange and unheard but at the same time when the time
passes one understands the concepts and working of the organization and thereby
developed professional relationship.
Initially, it felt as if classroom study was just theory and have no relation in any
concerns working but gradually it is realized that all the basic fundamental concepts
studies are linked in one or the other ways to the organization. But how and what can
be done with fundamentals depend upon the intellectual and applicability of the
individuals. It is just a matter to modify the theory so as to apply it to the given
practical solution.
CERTIFICATE
This is to certify that MS. AMRITA SHARMA (4TH
Sem.) Completed her training and submitted a
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project on Purchase Order Procedure in
Hindalco Co. Ltd." in partial fulfillment of the
requirement for the degree of Master of
Business Administration of Dr. Hari Singh Gour
University Sagar with his truly and honestly
observed inferences during his training..
I wish him bright future in his career.
Internal Examiner External Examiner
Signature of Head of Deptt.
BIBLIOGRAPHY
Website:
1.www.google.com
2.www.hindalco.com
3. en.wikipedia.org/wiki/Renusagar
http://www.google.com/http://www.hindalco.com/http://www.google.com/http://www.hindalco.com/ -
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CONTENTS
PREFACE
ACKNOWLEDGEMENT
CERTIFICATE
TRAINING CERTIFICATE
CHAPTER NAME PAGE
NO
INTRODUCTION ABOUT ADITYA GROUP
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INTRODUCTION OF HINDALCO
HISTORY
VISSION & MISSION
HR OBJECTIVE & VISSION
HINDALCO STRATEGY
INFROMATION TECHNOLOGY
ACCOUNT DEPARTMENT
PURCHASE ORDER
HOW CREATE PURCHASE ORDER
PURCHAING POLICIES
RECEIVING ORDER
BUYING ORDER
SUPPLYING ODER
LIMITION
CONCLUSION
BIBLIOGRAPHY