A PROJECT REPORT

ON
Major Lab Second
Operations and Supply Chain Management (M-318)

Submitted by
SHIV KUMAR
(21MAIXX649)

Submitted to
RAJASTHAN TECHNICAL UNIVERSITY
In partial fulfilment for the award of the degree of
Master’s in Business Administration (MBA)
Session 2021-2023
Under the guidance of
MISS SANDHIKA KOTHARI

Department of Management

Arya COLLEGE OF ENGINEERING , JAIPUR

SP-40 RIICO INDUSTRIAL AREA, KUKAS, JAIPUR
 Table of Contents

S. No Particulars Page No

1 Activity- 1
Prepare formats of different documents used in stores, like
bin card, Material issue note, material return note, and item
inspection report & item warrantee record.

2 Activity- 2
Study and prepare a chart for Vendor selection procedure
for any retail company(like Reliance Fresh) for supply of
FMCG items

3 Hands on Practice
On
Enterprise WMS

4 Book Review
On
Kiran, D. R. (2019). Production planning and control: A
comprehensive approach. Butterworth-Heinemann.
 Activity- 1
Prepare formats of different documents used in stores, like bin card, Material
issue note, material return note, and item inspection report & item warrantee
record.
 Bin Card

What is Bin Card?

Bin Card can be understood as a form of quantitative record maintained in a perpetual inventory
system, by the company’s stores department. It indicates the particulars of materials kept in the
bin. For each item, separate bin cards are maintained and placed in a specific place i.e. bins.
Basically, a bin card is a card attached to each bin or drawer which contains materials to show
the stack position of the bin.

The main objective of the bin card is to give a continuous record of the movement of material
and the balance in hand. Entries in bin card are made on the basis of the following source
document:

A. Material Received Notes

B. Material Requisition Slips
C. Material Returned Notes

With every receipt of stock, the card is debited, whereas it is credited with every issue and the
balance is noted down after each receipt or issue. And so the balance quantity of any item can be
ascertained easily at any point in time.

It works on the principle of ‘prior to touching the item, bin card should be touched‘. It is a part of
internal control system that verifies the misappropriation of materials if any. The result of
physical verification of the stock is entered on the bin card using red ink, right below the balance
and the date of verification is mentioned with the same.

It indicates the quantities of material received, issued, and remained in stock, after the receipt
and issue in chronological order, and up to the minute, balance is displayed after each movement.
It is also termed as stock card and bin tag.
The information related to general stock items is presented in tabular form under the heads item
name, brand name, bin number, ordering quantity, minimum quantity, maximum quantity, stores
ledger folio, identification code, etc. This facilitates the storekeeper to timely send purchase
requisition of material.

Format of Bin Card

Company Name
Bin Card
Bin No. ………………….. Minimum Level ………………
Description ………………. Reorder Level …………………
Code No. ………………… Reorder Quantity ……………...
Stores Ledger Folio ……...
Date Receipts Issue Balance Stock Verification
Ref No. Quantity Ref. No. Quantity Quantity Date Initials

It must be noted that the physical count and stock quantity reported as per the bin card must
match, else the company’s internal audit department might investigate the reason for any
discrepancy.

What is Bin?
When the materials reach stores after getting approved by the inspection department, they are
stored in separate bins. Bin refers to the place designed for physical storing or keeping of
materials, which can be a rack, shelf, cupboard, containers, receptacles, or any space, where
stores are kept. These bins are usually numbered.
Generally, the stores are fitted with bins that are serially numbered and indexed for easy
identification. Also, each bin is meant for a specific type of material only. A card is attached
outside the bin and every time inflow or outflow of stock takes place, then notation is made on
that card, which is nothing but bin card.

Salient Features of Bin Card

 Records the status of goods held in stock.
 Prepared by the storekeeper, i.e. the storekeeper enters every in and out of stock from the
stores.
 Kept in the stores department.
 Captures only material quantity and not value
 Updated as and when the receipts and issues are made.

How entries are made in the bin cards?

The main columns of a bin card are related to Date, References, Receipt, Issue, and Balance. In
the reference column, the number and nature of the document are entered, i.e. store received note
for receipt and material requisition for issues. It is obvious that if the quantity is entered in the
Received column, it will be reflected in the balance column, as it will increase. Oppositely, the
balance column will reflect a reduction when entry is made in the issued column.
Now, columns under order indicate how much quantity of a certain material is still on order. On
receiving the copy of the order placed on a supplier, the storekeeper records the number and date
of the order in the first column and the quantity in the second. However, the third column is left
blank until the goods are received in reality. Hence, it shows that the goods are still receivable.

In addition, the columns under reserved display the quantity which is reserved for a specific job.
Here one must note that reservations of material are made for vital jobs only, under the authority
of a pre-designated officer who is generally the Superintendent of the department.

For instance, if 150 units are reserved for the job no. 266 while the real balance is 210 units. The
record of the reserved column facilitates the storekeeper to ascertain that only 60 units are issued
for other jobs.

Moreover, on drawing the material for the job for which it was reserved, the date is entered in the
third column indicating that the reservation not any more operates.

Double Bin System

There are a number of organizations that divide the bin into two parts i.e. a smaller one and a
larger one. The first part, which is the smaller one store’s quantity equal to minimum quantity or
ordering level, whereas the larger one contains the remaining quantity, which is the main or
regular bin. The store staff is directed not to use quantity in the smaller section until the stock in
the main section exists.
As and when the quantity present in the main section is finished and it is pertinent to use the
quantity of the smaller section, fresh order needs to be placed. And on receiving the fresh order,
the minimum quantity is again segregated with due care. It is also called a two-bin system.

The key idea behind the maintenance of two bin-system is to supply accurate and genuine
information as to when the minimum quantity has been reached.

Advantages of Bin Card

 Provides the latest record of material received, issued, returned, and remained.
 Location code helps in efficient storekeeping
 Quick and easy physical identification of each item.
 Decreases chances of mistakes, as entries are made at the same time when there is any
movement, by the person handling the materials.
 Helps in detecting frauds and misappropriation.
 Stock-out situations can be prevented to a great extent.
 Prevents the situation of under/overstocking
 Ascertains the right time to place the fresh order, when the balance falls to reorder level
 An on-the-spot comparison can be made.

Disadvantages of Bin Card

 Records of bins are dispersed over a large area.
 The card may get smeared due to dirt or oil while handling the materials

Wrap Up
Bin Card is a record-keeping document that acts as a summary of the movement of stock to or
from the stores. It provides a ready reference of stock. It also assists the storekeeper in
controlling the stock as they provide a proper record of stock on each bin. Also, the various
levels updated in the bin card facilitate the task of preparation of purchase requisition, whenever
needed. Further, quantity on order and quantity reserved are indicated separately.
 Material Issue Note
Issue of Materials Basic Requirement
Since large sums of money remain blocked in materials, it is essential for the custodian of
materials to ensure that the issue of materials are made only under proper authorization.

In fact, authorization of stores is very vital.

Moreover, for efficient operation, the following points to be considered:

A. Authorization of issues
B. Identification of requirements
C. Timing of issues.

A. Authorization of Issues:
Since materials represents money, for the issue of materials there must be some authorization by
responsible officers nominated by the management. Such authorization should be given clearly
in the form of a directive circular.

The object is to avoid misunderstanding and unpleasantness that may arise due to the refusal by
the storekeeper to issue materials. In many industries, the designation of the person authorized to
draw materials along with their specimen signature are sent to the stores for verification.

The request for issue of materials is invariably made in written form or documents for proper
authorization. It is the primary responsibility of the storekeeper to verify all such documents for
proper authorization before the materials are issued.

Even though certain persons are authorized to draw goods from the stores, management normally
imposes a few restrictions for drawl of the goods beyond a certain level of consumption. In all
such cases, a clear directive must be given to the stores department.
B. Identification of Requirement:
Largely due to ignorance, in several cases the correct description of the items is not given by the
user department. Often the code number given may not tally with the description of the goods,
and vice versa. Hence an experienced store-keeper should use his intelligence to identify the
mistake and suggest to the indenter the correct item.

Details about materials requirements such as part number, code number, etc. ensure that it is
supplied without delay and unnecessary correspondence

C. Timing of Issue:
The store’s manager should ensure that the indenting departments are fully aware of the timing
of issues. However, there may be sudden rush during the peak hours. This may put undue
pressure on the stores department and may lead to sudden stoppage of production, in case of
undue delay.

So our intelligent store-keeper should study carefully the requirements of various departments
and stagger (spread) the timings in such a way that each department can draw their requirements
without loss of time.

Issue of Materials Methods:

Issues from stores must be efficiently organised so that the requirements of the
production/operations department can be met.

A. Issue on request:
This is the most orthodox way of issue wherein the indenting department normally sends a
man and collects the materials from stores.

B. Issue per schedule: In a batch production unit sometime, the requisition for issue of stores is
sent well ahead indicating when, i.e., the time and date it is required. The stores department
will collect all the materials and keep them ready.
Then it will intimate the indenting department about this. Depending on the prevailing practice
of the industry either they are collected from stores or delivered at the shop floor. This is
desirable in order to prevent any loss of man-hour caused by sudden absenteeism of a worker in
the production department.

C. Imprest issues:
In this system a list of certain items especially for tools and components and in specified
quantities is approved. The list is then held in a sub-store or tool kit near the shop floor.

D. Replacement issue:
In most engineering industries a large number of workshop machines are used. So there will be
considerable requirements of tools and gauges. When a fresh issue has to be made the machine
shop operator may be asked to return the old ones to the stores and obtain new one for
replacement. This is done without issue notes and the storekeeper has to maintain proper records
of such replacement.

E. Loan issues:
The issue of stores on loan should, as far as possible, be discouraged. Situations often arise
where some amount of spares; electrical fitting, etc. are required on emergency basis due to some
breakdowns. In such cases the materials are to be issued on a loan basis. However, the
storekeeper is to maintain a separate record and ensure that they are returned before year-ending
when annual stock-taking begins.

F. Stock record
In a store-house where thousands of transactions take place some amount of records are to
maintained. This makes it possible for the storekeeper to make an entry of all transactions.
Issue of Materials: Requisition Slip and Bill of Materials (With Specimen)
The storekeeper must not issue stores or materials unless a properly authorized Requisition Slip
or Material Requisition. (A document which authorizes and records the issue of materials for
use) is presented below. Generally, it is signed by the foreman but in case of important materials
higher authority would probably be necessary.

Format of Material Issue Note

MATERIAL REQUIZITIONS
No. ……………….. Department …………….. Date .………....
Job No. ………………….
Quantity Description Symbol Bin Stores Rate Remarks Amount
Card Ledger
No. Folio

Authorized By …………………. Received By ………………………

Storekeeper’s Signature ……..... Calculations Checked By ………..
Materials Abstract By …………...

Since a large number of people will be authorizing the issue of materials, it is not advisable that
the number should be already printed. The storekeeper should number the Materials Requisitions
as and when he receives them. Quantity, description of materials and the symbols will be already
entered and he should issue the materials, if they are available and are not reserved for some
other job, against signature of the receiver. To minimize damage, it is essential that issues should
be made out of the earliest consignment on hand.

If later receipts are issued out first, there is the possibility that earlier receipts may lie for a long
time and may get damaged due to rust, dirt or moisture, etc. On issue he should sign the
Requisition Slip himself and on the basis of it enter the ‘issue’ column of the Bin Card. At and
end of the day or the next morning, he should send all the requisition slips to the stores ledger
section where the columns for amounts will be filled.
 Material Return Note
Usually, the materials that are obtained for a specific job are not fully consumed or they are
drawn in excess of requirements. The excess quantity is returned to the stores, together with a
material return note.

The storekeeper should place the returned materials in the appropriate bin. In turn, a record of the
materials should also be entered into the "In" or "Received" column of the bin card.

Format of Material Return Note

Material Return Note

ABC Co. Ltd
Department…………….. Serial No. ……………….
Job No. ………………... Date……………………...
Qty. Code No. Description Rate Amount

Signature of Storekeeper……………… Signature of Foreman ……………….

Material Return Note: Explanation

Two copies of the material return note are prepared. One copy is retained by the department that
returned the materials and the other is kept by the storekeeper, who receives the note along with
the materials returned.

Notably, a material return note is similar to material requisition. To avoid confusion, material
return notes may be issued in red ink or printed on different-colored paper.
The material return note is forwarded to the costing office, where the rate and amount are
entered. Additionally, the necessary credit for the value of the materials returned is allocated to
the particular job.
 Item/ Material Inspection Report
A material inspection report form is used by material controllers to properly document the
acceptance or rejection of purchased materials through defined characteristics such as
nondestructive examination, functional test, and verification of source inspection result. Easily
gather the digital signatures of the manufacturing engineer and supplier representative with this
paperless material inspection report form and automatically share the report to the quality
manager the moment a material inspection is completed.

Format of Item/ Material Inspection Report

Item Name
Quantity
Purchase Order No,
Supplier
Origin Address
Condition of Protection Accept Reject N/A
Packing and Sealing
Conformity/nonconformity between Accept Reject N/A
purchase requirements and the quality
record received
Filling up condition of inert gas and Accept Reject N/A
antiseptic
Functional test Accept Reject N/A
Identification and mark of the material Accept Reject N/A
Nondestructive examination Accept Reject N/A
Painting condition Accept Reject N/A
Verification of source inspection result Accept Reject N/A
Whether the purchase order and the Accept Reject N/A
material are matched or not
Whether there it chemical/physical Accept Reject N/A
damage or not
Material Controller Name & Signature
Material Controller Name & Signature
Manufacturing Engineer Name &
Supplier Representative Name & Signature
Signature
Supplier Representative Name &
Supplier Representative Name & Signature
Signature
Item Warranty Record
An item warranty record is a document that records the warranty details of a product. It typically
includes information about the product, such as the brand, model number, and serial number, as
well as details about the warranty, such as the duration of the warranty, the conditions for
making a claim, and any exclusions or limitations.

A warranty is a guarantee from the manufacturer or seller of a product that it will be free from
defects for a certain period of time. The warranty record serves as proof of the warranty and can
be used by the customer to make a claim if the product fails to meet the warranty requirements.

In some cases, the warranty record may also include information about any repairs or
replacements that have been made under the warranty. This can help both the customer and the
manufacturer keep track of the product's history and ensure that any issues are resolved in a
timely and efficient manner.

Item warranty records are important for several reasons:

A. Proof of Ownership: Warranty records serve as proof of ownership for the item. This can be
important in case the item is lost or stolen, or if you need to provide proof of ownership for
insurance purposes.

B. Repair and Replacement: Warranty records provide information about the warranty terms
and conditions. In case the item needs repair or replacement, the warranty records will help
you to determine whether the item is still under warranty, and what steps you need to take to
get it repaired or replaced.

C. Record Keeping: Keeping warranty records helps you keep track of your purchases and
expenses. This can be useful for budgeting, tax purposes, or in case you need to return the
item for any reason.
D. Resale Value: Warranty records can increase the resale value of the item. Potential buyers
may be more willing to purchase an item that has a warranty, as it provides them with some
protection in case the item malfunctions.

Overall, keeping item warranty records is important for maintaining accurate records, protecting
your investment, and ensuring that you can access repair or replacement services if needed.
Format of Item Warranty Record
Item Warranty Card
Product/ Item Information
Name of the product/item
Manufacturer/ Brand
Model/Serial number
Purchase Date
Purchase Price
Vendor/Retailer information
Warranty Information
Type of warranty (e.g., manufacturer's
warranty, extended warranty, etc.)
Warranty start date
Warranty end date
Terms and conditions of the warranty
Contact information for the warranty provider
Repair and Replacement History
Date of repair/replacement
Description of problem or issue
Action taken (e.g., repair, replacement, refund)
Cost of repair/replacement/refund
Notes
Any additional notes or comments about the
product/item or warranty
By keeping a record of your item/material warranty, you can easily track any repairs or
replacements made, as well as ensure that you are aware of when your warranty is set to expire.
This can be especially useful for high-value items or electronics where the cost of repair or
replacement can be significant.
 Activity- 2
Study and prepare a chart for Vendor selection procedure for any retail
company (like Reliance Fresh) for supply of FMCG items

What is a Vendor?
In a retail company, a vendor refers to a supplier or manufacturer of products that are sold by the
retailer. Vendors provide the products that a retailer sells to its customers. They can be
individuals or businesses that specialize in producing specific types of products.

Vendors are important to a retail company because they supply the products that the retailer sells.
They can negotiate prices and terms with the retailer, and may offer discounts or other incentives
to encourage the retailer to buy from them. Retailers may work with multiple vendors to ensure
they have a variety of products to offer their customers.

Vendors may also provide support to retailers, such as helping with product displays, providing
product information and training to retail employees, and helping to promote products through
advertising and marketing efforts.

What is the Vendor Selection Process?

The vendor selection process is the process of evaluating and selecting suppliers or vendors who
can provide the goods or services required by a business. This process involves identifying
potential vendors, assessing their capabilities and suitability, and selecting the vendor that best
meets the business's needs.
The vendor selection process typically involves several steps including

Identifying business requirements:

Searching for potential vendors:

Pre-qualification:

RFP/RFQ:

Evaluation and selection:

Contract negotiation:

Ongoing evaluation:
1. Identifying business requirements: The first step is to identify the goods or services that
the business requires from a vendor.

2. Searching for potential vendors: The business then searches for potential vendors through
various sources such as online directories, referrals, and trade shows.

3. Pre-qualification: The business evaluates the vendors to determine whether they meet the
basic requirements such as capacity, experience, and financial stability.

4. RFP/RFQ: The business then sends out requests for proposals (RFPs) or requests for quotes
(RFQs) to the shortlisted vendors.

5. Evaluation and selection: The business evaluates the proposals received from vendors
based on criteria such as quality, price, delivery time, reliability, and after-sales support, and
selects the vendor that best meets its needs.

6. Contract negotiation: Once the vendor is selected, the business negotiates a contract with
the vendor that specifies the terms and conditions of the relationship.

7. Ongoing evaluation: The business continues to evaluate the vendor's performance on an

ongoing basis to ensure that the vendor continues to meet its requirements and expectations.

Who Uses the Vendor Selection Process?

The vendor selection process is typically used by organizations or businesses that need to
purchase goods or services from an external supplier. This can include businesses of all sizes,
government agencies, non-profit organizations, and other types of institutions that require
external vendors to provide products or services.

The vendor selection process is especially important for organizations that rely heavily on their
vendors, such as manufacturers who rely on raw material suppliers or retailers who rely on
distributors to supply their inventory. By using a thorough vendor selection process,
organizations can ensure that they are choosing the best possible vendor to meet their needs in
terms of quality, cost, reliability, and other factors.

How to Implement Vendor Selection Process

Implementing a vendor selection process involves several steps. Below are the general steps to
follow:

 Identify the need for a vendor: Determine what products or services your organization
needs from a vendor.

 Establish selection criteria: Develop a list of criteria to evaluate potential vendors, such as
price, quality, delivery time, customer service, reputation, and experience.

 Identify potential vendors: Research and identify potential vendors that meet your criteria.
Consider reaching out to industry associations or using online directories to find vendors.

 Evaluate potential vendors: Evaluate potential vendors using the selection criteria
established in step 2. This may involve reviewing their website, asking for references, or
conducting a site visit.

 Shortlist vendors: Based on your evaluation, create a shortlist of the vendors that best meet
your needs and criteria.

 Request proposals: Contact the shortlisted vendors and request proposals outlining their
proposed products or services, pricing, delivery times, and other relevant information.

 Evaluate proposals: Evaluate the proposals submitted by each vendor and compare them
against your criteria.

 Select a vendor: Based on your evaluation, select the vendor that best meets your needs and
criteria.
 Negotiate terms: Once you have selected a vendor, negotiate the terms of the agreement,
including price, delivery times, and other relevant factors.

 Finalize the agreement: Finalize the agreement with the vendor and communicate any
relevant details to relevant stakeholders within your organization.

 Monitor vendor performance: Monitor the vendor's performance and ensure that they are
meeting the terms of the agreement.

Vendor Selection Criteria

Vendor selection criteria are the factors or attributes that an organization considers when
selecting a vendor or supplier for a product or service. The following are some common vendor
selection criteria:

 Quality: The quality of the vendor's product or service should meet or exceed the
organization's standards.

 Price: The vendor's price should be competitive and within the organization’s budget.

 Delivery time: The vendor should be able to deliver the product or service within the agreed-
upon timeframe.

 Reliability: The vendor should be reliable and able to meet the organization's needs
consistently.

 Customer service: The vendor should have excellent customer service and be responsive to
the organization's needs.

 Financial stability: The vendor should be financially stable and have a good reputation in
the industry.
 Technical expertise: The vendor should have the technical expertise to provide the required
product or service.

 Location: The vendor's location should be accessible and convenient for the organization.

 Flexibility: The vendor should be flexible and able to adapt to the organization's changing
needs.

 Environmental and social responsibility: The vendor should be environmentally and

socially responsible, and adhere to ethical business practices.

Expert Tips for Choosing Vendors

Choosing a vendor can be a critical decision for a business, and it's important to make an
informed choice. Here are some expert tips for choosing a vendor:

 Define your requirements: Before you start looking for vendors, it's essential to define your
requirements clearly. This will help you narrow down your search to vendors who can meet
your needs.

 Conduct research: Research potential vendors thoroughly. Look for information about their
reputation, their experience, their financial stability, and their track record of delivering
quality products or services.

 Check references: Always check vendor references. Ask for references from clients who
have worked with them in the past and follow up with those references to get an idea of the
vendor's performance and reliability.

 Evaluate pricing: Don't choose a vendor solely based on the price. Look for vendors who
offer fair pricing and who provide good value for their products or services.
 Consider vendor location: Consider the vendor's location and whether it will be practical to
work with them. This may include factors such as time zones, language barriers, and the cost
of travel.

 Look for a good cultural fit: Consider the vendor's culture and whether it aligns with your
business values. A vendor who shares your values is more likely to provide quality service
and work well with your team.

 Check for scalability: Choose a vendor who can scale with your business as it grows. This
means looking for vendors who have the resources and capacity to handle larger orders and
higher volumes.

 Evaluate communication: Choose a vendor who communicates well and responds promptly
to your questions and concerns. Good communication is essential for a successful vendor
relationship.

 Consider vendor support: Look for vendors who offer good customer support and who are
available to address issues and provide assistance when needed.

By following these tips, you can make an informed decision when choosing a vendor and ensure
that your business is working with a reliable and trustworthy partner.

Vendor Selection as Part of the Procurement Process

Vendor selection is a crucial part of the procurement process. It involves evaluating and
choosing the most suitable supplier or vendor to provide the goods or services that an
organization needs.
The following are some steps to consider when selecting a vendor as part of the procurement
process:

 Identify the need: Determine the goods or services required and create a clear scope of work
or requirements document.

 Identify potential vendors: Search for potential vendors through various sources such as
referrals, directories, online searches, and trade shows.

 Evaluate the vendors: Evaluate potential vendors based on their experience, capability,
financial stability, reputation, compliance with laws and regulations, and other relevant
factors.

 Issue request for proposal (RFP) or request for quotation (RFQ): Send RFPs or RFQs to
the vendors that meet the evaluation criteria.

 Analyze proposals and quotes: Evaluate the proposals or quotes received from vendors,
considering factors such as price, quality, delivery time, warranties, and support.

 Negotiate: Negotiate terms and conditions with the selected vendor, including price, delivery
schedules, warranties, and other key terms.

 Award the contract: Choose the vendor that best meets the evaluation criteria and finalize
the contract.

 Monitor performance: Monitor the vendor's performance to ensure they deliver on their
promises and meet the expectations outlined in the contract.

Overall, the vendor selection process requires careful planning, evaluation, and negotiation to
ensure that the selected vendor can meet the organization's needs effectively and efficiently.
Importance of the Vendor Selection Process
Vendor selection is a critical process for any organization that needs to purchase goods or
services from external suppliers. The vendor selection process is important because it can have a
significant impact on the success or failure of a project or initiative. Here are some reasons why
the vendor selection process is crucial:

 Quality of goods or services: The vendor selection process allows organizations to evaluate
the quality of goods or services that potential suppliers offer. By carefully selecting vendors,
organizations can ensure that they are receiving high-quality products or services that meet
their needs.

 Cost savings: By selecting the right vendor, organizations can negotiate better pricing and
payment terms. This can result in significant cost savings, which can benefit the organization
in the long run.

 Risk management: The vendor selection process allows organizations to evaluate potential
suppliers' risk factors, including financial stability, track record, and compliance with
regulations. This can help mitigate any potential risks associated with the purchase of goods
or services.

 Time savings: By selecting the right vendor, organizations can save time by reducing the
need for extensive research and evaluation of multiple vendors. This can help streamline the
procurement process and allow the organization to focus on other important tasks.

 Relationship building: A successful vendor selection process can lead to the development of
strong relationships between the organization and its suppliers. This can lead to more
favorable terms, better communication, and improved collaboration.

Overall, the vendor selection process is crucial for organizations looking to purchase goods or
services from external suppliers. By carefully selecting vendors, organizations can ensure that
they receive high-quality products or services at a fair price while mitigating potential risks
associated with the procurement process.

The vendor selection process of an FMCG (Fast Moving Consumer Goods) company
typically involves the following steps:

 Identify the need for a new vendor: The company must first identify the need for a new
vendor. This may be because of various reasons such as cost-cutting, quality issues, or a need
to diversify its vendor base.

 Define selection criteria: The company must define the selection criteria based on which
vendors will be evaluated. The criteria may include factors such as quality, price, delivery
time, payment terms, sustainability practices, and other relevant factors.

 Search for potential vendors: The company should search for potential vendors who meet
the defined selection criteria. This can be done by researching online, attending trade shows,
asking for recommendations from other industry professionals, or inviting vendors to submit
proposals.

 Evaluate vendor proposals: The company should evaluate the proposals submitted by
potential vendors based on the selection criteria defined earlier. This may involve site visits,
testing samples, reviewing vendor references, and conducting interviews.

 Negotiate terms and conditions: Once the company has selected a vendor, it should
negotiate the terms and conditions of the contract. This may include price, payment terms,
delivery schedules, and other relevant details.

 Monitor vendor performance: The company should regularly monitor the vendor's
performance to ensure that it meets the agreed-upon terms and quality standards. This may
involve conducting regular audits, performance reviews, and addressing any issues that arise.
 Continuously review vendor relationships: The company should continuously review its
vendor relationships to ensure that they are meeting its needs and goals. This may involve
renegotiating terms and conditions, terminating contracts, or finding new vendors that better
meet its needs.

By following these steps, an FMCG company can select and maintain a strong vendor base that
meets its needs and helps it to remain competitive in the marketplace.
Hands On Practice
On
Enterprise WMS
 Warehouse Management System

WMS stands for Warehouse Management System. It is a software solution that helps businesses
manage their warehouse operations efficiently.

A typical WMS software includes features such as inventory management, order tracking,
picking and packing, shipping management, receiving, and stock location tracking. The software
can automate many of the processes involved in warehouse management, such as inventory
tracking, stock replenishment, and order picking.

WMS software can be used in a variety of industries, including retail, manufacturing,

distribution, and logistics. The benefits of using WMS software include improved inventory
accuracy, reduced labor costs, increased productivity, better customer service, and faster order
fulfillment.

There are many different WMS software solutions available on the market, ranging from basic to
advanced systems. Some popular WMS software options include SAP Extended Warehouse
Management, Oracle Warehouse Management, Manhattan Associates Warehouse Management,
and JDA Warehouse Management.
What are some lessons learned from implementing Warehouse Management Systems?
Implementing a Warehouse Management System (WMS) is a complex process that involves
numerous steps and considerations. Some of the lessons learned from implementing a WMS
include:

 Clear understanding of business requirements: Before implementing a WMS, it is

important to have a clear understanding of the business requirements. This includes
understanding the current processes, pain points, and future growth plans.

 Proper planning and preparation: Proper planning and preparation is crucial for a
successful WMS implementation. This involves developing a detailed project plan,
establishing realistic timelines, identifying resource requirements, and allocating budget.

 Cross-functional team involvement: A successful WMS implementation requires

involvement from various functions such as IT, operations, finance, and procurement.
Ensuring effective collaboration among these functions is important to ensure the system
meets the needs of the business.

 Data accuracy and consistency: Data accuracy and consistency are critical for the success
of a WMS implementation. It is important to establish data quality standards and ensure data
is entered correctly and consistently.

 Training and education: Training and education are crucial to ensure that all stakeholders
understand the WMS and are able to use it effectively. This includes training for end-users,
managers, and support staff.

 Continuous improvement: Implementing a WMS is not a one-time event, but rather a

continuous process. It is important to establish a process for ongoing improvement and
optimization of the system to ensure it continues to meet the changing needs of the business.
 Change management: Implementing a WMS can bring significant changes to the way the
organization operates. Effective change management is important to ensure that the changes
are accepted and adopted by all stakeholders. This includes clear communication, stakeholder
involvement, and addressing resistance to change.

 System scalability: As the business grows, the WMS should be able to scale to
accommodate the increased volume and complexity. It is important to consider scalability
when selecting a WMS and to ensure that the system can be easily expanded and customized
as needed.

Main capabilities of Warehouse Management Systems?

Warehouse Management Systems (WMS) are software solutions that automate and optimize
warehouse operations, from inventory management to order fulfillment. Some of the main
capabilities of WMS include:

 Inventory Management: WMS provides real-time visibility of inventory levels, locations,

and movements throughout the warehouse. This allows for more accurate stock control,
efficient space utilization, and better inventory forecasting.

 Order Management: WMS enables efficient order management by automating order

processing, picking, packing, and shipping. It also helps to reduce errors and improve order
accuracy.

 Warehouse Control: WMS provides real-time control over all warehouse activities,
including labor management, equipment utilization, and task assignment. This ensures that
all warehouse processes are optimized for maximum efficiency.

 Reporting and Analytics: WMS provides real-time data and analytics on warehouse
performance, such as inventory accuracy, order processing times, and labor productivity.
This helps warehouse managers to identify areas for improvement and make data-driven
decisions.
 Integration with other systems: WMS can be integrated with other systems such as ERP,
Transportation Management Systems (TMS), and other supply chain management software.
This enables better coordination and visibility across the entire supply chain.

 Barcode and RFID technology: WMS uses barcode and RFID technology to automate data
collection and streamline warehouse operations. This reduces errors and improves accuracy
in inventory management, order processing, and other warehouse tasks.

Types of vendors are there available in the Warehouse Management Systems market?
There are several types of vendors available in the Warehouse Management Systems (WMS)
market, including:

 Standalone WMS vendors: These vendors specialize solely in the development and sale of
WMS software.

 Enterprise Resource Planning (ERP) vendors: ERP vendors offer a suite of business
management applications that may include WMS functionality.

 Supply Chain Management (SCM) vendors: SCM vendors offer a broader suite of supply
chain applications that may include WMS functionality.

 Third-party logistics (3PL) providers: These vendors offer logistics services that may
include the use of their own proprietary WMS software.

 Cloud-based WMS vendors: These vendors offer WMS software that is hosted on the
cloud, allowing for easier deployment and maintenance.

 Open-source WMS vendors: These vendors offer WMS software that is developed and
distributed under an open-source license, allowing for greater customization and flexibility.
 Industry-specific WMS vendors: These vendors specialize in providing WMS solutions
tailored to specific industries, such as retail, healthcare, or manufacturing.

The type of vendor that is most suitable for a particular business depends on various factors such
as the size and complexity of the operation, the industry vertical, and the level of customization
and integration required.

How do WMS offerings differ from each other?

WMS offerings continue to differ in areas like usability, adaptability, decision support,
scalability, and life cycle costs. Focus on the breadth and depth of WMS offerings remains valid
for the most sophisticated operations while other factors like simplicity, usability, and cost of
ownership are more important factors in less complex environments.

What factors should be considered while choosing a warehouse management system?

Supply chain or IT leaders responsible for the selection of warehouse management solutions
should:
 Determine the people, process, organizational, data, and technology needs of each warehouse
operation and focus WMS evaluations on the appropriate use cases.
 Target the solutions best suited to their distinctive WMS use cases by developing a right-fit
shortlist of vendors and solutions.
 Embrace the importance of soft needs and benefits by reconciling the competing interests of
functionality versus intangible characteristics such as usability, adaptability, implementation
support, and simplicity.

How does WMS technology work?

WMS (Warehouse Management System) technology is a software solution designed to manage
and optimize the day-to-day operations of a warehouse. WMS technology typically integrates
with other software solutions and hardware, such as barcode scanners and RFID tags, to provide
real-time tracking and visibility into inventory levels and movement.
The core functions of a WMS typically include:

Receiving: WMS technology helps in the efficient handling of inbound shipments by providing
automated notifications and tracking of received goods.

Inventory Management: WMS technology provides real-time tracking and visibility into
inventory levels, including locations, quantities, and status.

Order Management: WMS technology automates order picking and dispatch processes,
reducing picking errors and improving delivery times.

Shipping: WMS technology streamlines shipping processes, automating the creation of shipping
labels, tracking numbers, and carrier selection.

Reporting: WMS technology provides detailed reports on inventory levels, order status, and
other key metrics to help warehouse managers make informed decisions.

WMS technology typically operates on a centralized database, which ensures that all inventory
data is consistent and up-to-date across the warehouse. The system is also highly configurable,
allowing warehouse managers to customize workflows and rules to suit their specific needs.

Overall, WMS technology plays a critical role in the efficient management of warehouses,
helping to reduce costs, improve accuracy, and optimize processes.
 Book Review
On
Kiran, D. R. (2019). Production planning and control: A comprehensive
approach. Butterworth-Heinemann.
 Book Review On
Kiran, D. R. (2019). Production planning and control: A comprehensive
approach. Butterworth-Heinemann.

Description
Production Planning and Control draws on practitioner experiences on the shop floor, covering
everything a manufacturing or industrial engineer needs to know on the topic. It provides basic
knowledge on production functions that are essential for the effective use of PP&C techniques
and tools. It is written in an approachable style, thus making it ideal for readers with limited
knowledge of production planning. Comprehensive coverage includes quality management, lean
management, factory planning, and how they relate to PP&C. End of chapter questions help
readers ensure they have grasped the most important concepts. With its focus on actionable
knowledge and broad coverage of essential reference material, this is the ideal PP&C resource to
accompany work, research or study.

Key Features
 Uses practical examples from the industry to clearly illustrate the concepts presented
 Provides a basic overview of statistics to accompany the introduction to forecasting
 Covers the relevance of PP&C to key emerging themes in manufacturing technology,
including the Industrial Internet of Things and Industry

Table of Contents
1. Elements of Production Planning and Control
2. Factory Planning
3. Factors for Production
4. Production system
5. The Concept of Productivity
6. Organization for Production Planning and Control
7. Terminology Used in Japanese Management Practices
8. Fundamentals of Statistics for PP&C
9. Correlation and Probability Theory
10. Forecasting
11. Trend Analysis in Forecasting
12. Decision Theory
13. Types of Production Situations
14. Break-even Analysis
15. Cost of Production
16. Plant Location
17. Plant Layout
18. Systematic Layout Planning
19. Product and Process Planning
20. Capacity Planning
21. Aggregate Planning
22. Routing, Scheduling and Loading
23. Master Production Schedules
24. Sequencing and Line Balancing
25. Dispatching and Expediting
26. Just in Time and Kanban
27. Systems, Procedures and Formats in PP&C
28. Theory of Constraints
29. Scientific Inventory Control
30. Material Requirement Planning (MRP-I)
31. Manufacturing Resource Planning - MRP-II
32. Critical Path Method
33. CIPMS- Computer Integrated Production Management System
34. Industry 4.0
35. Internet of Things

Product Details
No. of pages: 582
Language: English
Copyright: © Butterworth-Heinemann 2019
Published: June 1, 2019
Imprint: Butterworth-Heinemann
eBook ISBN: 9780128189375
Paperback ISBN: 9780128183649
About the Author
D.R Kiran has forty years of experience in both industry and academia. He has held a range of
management positions including Planning Manager of Rallifan (CF division), World Bank
Adviser/Instructor for Transport Managers in Tanzania, and the Principal of PMR Institute of
Technology, Chennai. In Universities he has taught subjects including Total Quality
Management, Professional Ethics and Maintenance Engineering Management. He is the author
of 2 books, and numerous journal articles, and was presented with the coveted Bharat Excellence
Award and Gold Medal for Excellence in Education in New Delhi in 2006.

Preface
Production planning and control (PP&C) is a key industrial engineering function for the
manufacturing company whatever may be the fields of operation, embodying techniques and
tools each of which could form a topic by itself. To comprehend these techniques and topics, it is
essential to have basic knowledge of the production functions and their scope. This book is
prepared in such a manner that even those who do not have much exposure to the function of
production planning would be able to comprehend them as they are related to industrial
engineering.

PP&C function is a cross function, coordinating several specialized sub- jects related to
manufacture. While all aspects of PP&C function are dis- cussed in this book, it would be
beneficial to the students if they refer to related subjects like quality management, operations
management, maintenance engineering, operations research, etc.

As the planning manager at Rallifan, heading the PP&C department, the author had the
opportunity to introduce several PP&C systems and formats, and with that experience, he was
responsible for introducing similar systems and formats at Tanzania's National Bicycle Company
right from its project stage. This experience has been fully utilized in this book on the basics of
production planning. With all the case studies, this book is expected to be of immense help not
only to the engineering students but also to practicing engineers who want to develop their career
on production management.
Though several books on PP&C or operations management are available, there are very few that
deal with all related aspects of PP&C, both in practice as well as prescribed in university syllabi
worldwide. In view of this syllabi of several Indian and foreign universities on the subjects of
PP&C and operations management were referred to, and almost all the topics specified in these
syllabi are included in this book, giving detailed explanations. All these syllabi are cited as an
appendix in this book.
Special importance is given to the fundamentals of statistics, so that the reader is fully equipped
to understand better the vital topic of forecasting, which has a high bearing in statistics. Besides,
exclusive chapters are devoted on related topics like plant layout, scientific inventory control,
critical path method, theory of constraints, etc. A unique feature of this book is that two chapters
are devoted to explain the fundamentals of Industry 4.0 and the Internet of things, which are the
latest buzzwords reflecting advancement in manufacturing technology. This book is thus aptly
titled Production Planning and Control: A Comprehensive Approach.

Another feature of this book is that besides the syllabi, the university questions from several
Indian and foreign universities are compiled, classified chapter-wise, and given at the end of
each chapter as criteria questions, indicating the relevant paragraph number as a clue. This is
expected to make the book highly examination oriented for the student besides being practical
oriented to the PPC engineer.

D.R. Kiran
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