GAJENDRA REPORT.docx

7/27/2019 GAJENDRA REPORT.docx

1/29

RESEARCH PROJECT REPORT

ON

REASONS FOR OCCURANCE OF ABNORMAL TRANSIT LOSS

AT FSD NAINI

Submitted in partial fulfillment of the requirement for the award of degree of

Master of Business Administration

From:

Gautam Buddh Technical University, LucknowSubmitted by:

Gajendra kumar

(Roll no: 1212470048)

MBA (Batch 2012-14),

Under the guidance of:

K. Anbumani

(Associate Professor)

ICCMRT

INSTITUTE OF CO-OPERATIVE & CORPORATE MANAGEMENT RESEARCH AND

TRAINING21/467, RING ROAD, INDIRA NAGAR, LUCKNOW-226016


2/29

CERTIFICATE

This is tocertify that Mr.Gajendra kumar, a student of Master of BusinessAdministration (MBA) Programme (Batch 2012-14) at this institute has conducted

a research project titled REASONS FOR OCCURANCE OFABNORMAL TRANSIT

LOSS AT FSD NAI NIunder my guidance during the 4th

semester.

The report has been prepared towards partial fulfillment for the award of MBAdegree from Gautam Buddh Technical University. The research project report is

the original contribution of the student.

The research project report is hereby recommended and forwarded for

evaluation.

(KANDHAI LAL)

MANAGER S.L&T.L


3/29

DECLARATION

I, Gajendra kumar, a student ofMaster of Business Admin istration (MBA)

Programme from the Institute of Co- operative & Corporate Management

Research and Training, Lucknow hereby declare that all the information, facts and

figures used in this research project titledREASONS FOR OCCURANCE OF

ABNORMAL TRANSIT LOSS AT FSD NAI NI have been collected by me.

I also declare that this project report has been prepared by me and the samehas never been submitted by the undersigned either in part or in full to any other

University or Institute or published earlier.

This information is true to the best of my knowledge and belief.

Date: 15/05/2013 (Gajendra kumar)


4/29

ACKNOWLEDGEMENT

Success is the manifestation of diligence, inspiration, motivation and

innovation

Learning in life with a difference is what my experience has been at the

ICCMRT, Lucknow, where I have under gone my research report i.eREASONS

FOR OCCURANCE OFABNORMAL TRANSIT LOSS AT FSD NAI NI excellent

platform for me to score some experience with the leading manufacturing company

of India. My journey through this training procedure has given me an exposure toreal life incidents of the industry & have helped me in inculcating those traits for

preparing me for the forthcoming endeavors in my life concerning with the ever

expanding Indian industry.

I am highly obliged to my project guideMr. Kandhai lalwithout whose

guidance this research would not have been possible. He has shown great

enthusiasm for my reports & its findings within the specified time limits.

I express my sincere gratitude to my lovely and caring family who have

supported me till the competition of this research period and provide me their

valuable suggestions & encouragement during my research report work.

GAJENDRA KUMAR


5/29

INTRODUCTION


6/29

Introduction

Food Corporation of India ( )was setup on 14th

January 1965 under Food Corporation Act 1964 with authorized capital ofalmost $600 million to implement the national policy for price supportoperations, procurement, storage, preservation, inter-state movement anddistribution operations.

It operates through 5 zonaloffices and 26 regional offices. Each year, theFoodCorporation purchases roughly 15-20 per cent of India's wheat outputand 12-15 percent of its rice output. The losses suffered by FCI arereimbursed by the Uniongovernment, to avoid capital erosion, and thus

declared as a subsidy in the annual budget.

The Food Corporation of India was setup under the Food Corporation Act1964, in order to fulfill following objectives of the Food Policy :-

Effective price support operations for safeguarding the interests of thefarmers.

Distribution of food grains throughout the country for public distributionSystem.

Maintaining satisfactory level of operational and buffer stocks of foodgrains to ensure National Food Security.

In its 49 years of service to the nation, FCI has played a significant role inIndias success in transforming the crisis management oriented foodsecurity into a stable security system.


7/29

Strengths of FCI

Provider of price and market assurance to the farmer.

Ensuring steady food grain supplies to 5 lakhs fair price shops for PDS tocover 141 million APL/67 million card holders.

Ensuring food for all welfare schemes.

Large pool of talent managing worlds largest food grain operation onbehalf of Govt. Of India.

Countrywide network of offices and strategically located food storage

depots.

Operates in mandis/purchase centres located within 10 kms. Proximity offarmers. Undertakes purchases of 30 to 40 million tonnes annually makingit the largest buyer in the world.

Effective market intervention to stabilize prices.

State of the art experience on food grain preservation/ warehousing/transportation management.

Maintains the health of millions of tones of food grain in storage. QualityAcknowledge by International buyers.

Excellent storage management.

Timely movement of food grains from procuring states to consumingstates. Mode of distribution even by head loads and mule loads etc. Toensure food security.

Countrywide network of offices and strategically located Food storageDepots.


8/29

OPERATIONS OF FCI

Procurement

Storage

Movement

Distribution

PROCUREMENTThe Govt. policy of procurement of Food grains has the broad objectives of ensuring

MSP to the farmers and also ensuring availability of food grains to the weaker

sections at affordable prices. It also ensures effective market intervention therebykeeping the prices under check and also adding to the overall food security of the

country

To facilitate procurement of food grains, FCI and various State Agencies in

consultation with the State Govt. establish a large number of purchase centres at

various mandis and key points. The number of centres and their locations are

decided by the State Governments, based on various parameters, so as to maximize

the MSP operations. For instance for procuring Wheat & Rice, more than 14000

procurementcentres

were operated for each crop during 2009-10. Such extensive &effective price support operations have resulted in sustaining the income of farmers

over a period and in providing the required impetus for higher investment in

agriculture sector for improved productivity.

Food grains are grouped as cereals, millet and pulses.

Cereals comprise of Wheat, Rice, Maize and Barley.

Millets include Jowar, Bajra and Ragi etc.

Pulses include Chana,Tur,Urd etcAll cereals other than rice are wheat and rice are grouped as CourseGrains.

Course grains are procured in the State where they are produced.


9/29

STORAGE

FCI stores millions of tones of tones of food garins procured by it from FoodSurplus states. In order to provide easy physical access in deficit, remoteand inaccessible areas, FCI has a network of storage depots strategicallyLocated all over India . These depots include silos , godowns and anindigenous developed by FCI called Cover and Plinth(CAP). FCI has 30.52million tones( owned and hired) storage capacity in over 1820

.

MOVEMENT

Ensuring accessibility of food all over the country is a huge challenge being

faced by the country.FCI proves to be pioneer in this regard and is regularlymoving food grain from surplus States to deficit States. The foodgrainsurplus is mainly confined to Northern States consequently transportationinvolves long distance throughout the country. Stocks procured in themarkets and purchase centres is first collected in the nearest depot andfrom there dispatched to the recipient Sates within a limited time. FCImoves about 300 lakh tones of food grains over an average distance of1500 kms.

DISTRIBUTION

Government uses various schemes to make sure that the food reachesvulnerable section of the society at affordable price despite inclementweather and other odd situations. There are different schemes under whichFCI distributes food grains to different target segments.

Under Public Distribution System (PDS) Government releases a prescribedQuantity of food grains to each state based on the parameters such as

population and food grains situation in the states.


10/29

TPDS:-

Targeted Public Distribution System: Under this scheme special cards areissued to population under Below Poverty Line (BPL) and food grains aresupplied at a subsidized price. The states are also free to increase thecoverage. The TDPS also covers Above Poverty Line (APL) segment whoare not given a subsidized price.

AAY (Antyodaya Anna Yojana) scheme is for the most marginalizedsegment of society.

OWS:-

(OtherWelfare Schemes) such as:

Mid-Day Meal Scheme-every school going child is entitled to 3 kgs ofWheat or rice per month.Wheat Based Nutrition Program

Food for Hostel and Welfare Institutes

Annapurna Scheme

Sampoorna Gramin Rojgar Yojana

National Food For Work Program FCI also provides food grains todefense services and paramilitary forces such as CRPF,BSF, and ITBP.


11/29

MANAGEMENT

Board of Directors:

The Board of Directors of the Corporation consists of the following namely:-

Chairman

- Three Directors to represent respectively the Ministries of the CentralGovernment dealing with: Food, Finance and Cooperation ManagingDirector CWC-ex-Officio

-Managing Director

-Six other Directors

Organizational Structure

The Food Corporation of India coordinates its functions through itsHeadquarter at New Delhi and 5 Zonal Offices, 24 Regional Offices, onePort Office at Kendal and 168 District Offices and 1613 Depots under itscontrol. Each Zone is headed by an Executive Director (Zone), Region by aGeneral Manager(Region) and District Office by an Area Managerrespectively.


12/29


13/29

FOOD SECURITY MANAGEMENT

FCI has a network of storage depots strategically located all over India.These depots include silos,gowdown and an indigenous method developedby FCI, called (CAP). Stocks are stored in scientifically constructedgodowns. However , in case of storage of space and at times ofemergency, stocks of wheat and paddy are stored in openalso in a scientific manner and such storage is known as CAP(Cover andPlinth). CAP storage is a term given to storage of food grain in the openwith adequate precautions such as rat and damp proof plinths, use ofDunnage and covering of stacks with specially fabricated polythene coversetc.

FCI Has 30.52 million tones( owned &hired) of storage capacity in over1820 godowns all over India. Besides its own storage capacity , FCI is alsoutilizing hired capacities from CWC,SWCs, State Government and privateparties.

There are 3 types of Go downs:-

1. Road Fed Go downs: loading and unloading through trucks.

2. Rail Fed Go downs: Railway Good shed3. Railway Siding Go downs: where railway enters the go down from thecentre loading the goods

There are 3 types storage facilities in FCI:

1. CAP system

2. Open Storage (conventional go downs)

3. Silos (Bulk Storage)Standalone SilosModular SilosIntegrated Silos


14/29

Introduction of topic

Transit Losses

The difference between the dispatch weight and receipt weight representsthe transit loss during movement of stocks from one centre to anothercentre either by road or rail. The following are the reasons which contributeto transit losses:

(i)Pilferage and theft enroute

(ii) Dirge of moisture during long transit

(iii) Multiple handling

(iv) Use of hooks by labour

(v) Weak texture of gunnies & bursting of bags

(vi) Spillage through wagon holes /cleavages and flap doors

(vii) Spillage and theft at transshipment points

(viii) Different modes of weigh.

(ix) Qualified said to contain RRs issued by Railways


15/29

LOSS OF TRANSIT

Liability for shortages in the quantity of goods delivered is limited to making upthe shortages. No claim for shortages in quantity will be allowed unless the

customer gives notification of the shortage in writing within 7 days of the deliveryand provides a reasonable opportunity for Trio dent to investigate the claim.

Goods leaving a Trio dent dispatch center are adequately packed. Claims for

damage or loss in transit must be made against the carrier in the prescribedmanner:

1) Prior to acknowledging delivery to the carrier the buyer must ensure that thecomplete consignment as per the carrier's note has been received.

2) Should there be a shortage or visible damage to outer packaging the carrier'snote must be endorsed accordingly.

3) Within 7 days of receipt of consignment the buyer must ensure that all goodsreceived are in good order and condition

4) No claims will be considered after 7 days of receipt of goods. While no liabilityfor goods damaged or lost in transit will be accepted by Trio dent Ltd details ofany claim should be advised to the seller.


16/29

TRANSITS LOSS OCCUR ON THIS FIGURE


17/29


18/29

TYPES OF LOSS

Loss may be considered in terms of either quantity or quality.

Quantitative loss is a physical loss of substance as shown by a reduction

in weight or volume. It is the form of loss that can most readily bemeasured and valued.

Qualitative loss is more difficult to assess and is perhaps best identified

through comparison with well defined standards. Nutritional loss and

loss of seed are both aspects of quality losses.

1. Weight loss 2. Loss in quality

3. Nutritional loss 4. Loss of seed viability

5. Commercial losses

a) Monetary loss

b) Loss of goodwill

c) Loss due to legal action

1. Weight loss

Reduction in weight is obvious but it does not necessarily indicate loss. It may be

due to reduced moisture content and this is recognised by a shrinkage factor.Weight loss results from the feeding of insects, rodents and birds or from spillage,due to improper handling or by the activities of pests.

Moisture changes may lead to an increase in weight and in some cases productionof water by and insect infestation may partly offset the weight loss. In many

instances weight loss may go undetected as the trader sells by volume. Incommercial storage weight is the important factor sometimes leading to

malpractices such as adulteration with water, stones, and earth to make up thedeficiency. Usually some allowance is made for slight changes in moisture andalso standard weight packages may be used.


19/29

2. Loss in quality

Generally quality is assessed and products graded on the basis of appearance,

shape, size, etc., but smell and flavor are sometimes included. Foreign mattercontent and contaminants are factors in loss of quality. Foreign matter may be in

the form of insect fragments, grass, rodent hairs and excrete; weed seeds, parts ofplants, earth, stones, glass, etc. Contaminants that cannot be readily removed,

include soluble excretions of pests, oils, pesticides, pathogenic organisms spreadby rodents, and toxins arising from fungal infections.

Chemical changes may also be important, e.g. in oilseeds. Infestation in

groundnuts may cause an increase in the free fatty acid level leading to rancidity inthe oil, similarly in maize meal.

3. Nutritional loss

This, is the product of both the quantitative and qualitative losses. Weight loss

during storage (not due to a loss of moisture) is a measure of food loss but thelatter may be proportionately larger owing to selective feeding by the pests.

Rodents and moth larvae may preferentially attack the germ of the grain thus

removing a large percentage of the protein and vitamin content, whereas weevilsfeeding mainly on the endosperm will reduce the carbohydrate content. Many pestsmay eat the bran of cereals reducing vitamins such as thiamin. Other storage

factors such as moisture and fungal infection also lead to changes in vitamincontent. In beans in particular, loss of protein is very important where there is

infestation, as up to 25% of the dry matter may be crude protein.

4. Loss of seed viability

This relates to loss in seed germination. Seed grain is usually more carefully storedowing to its greater potential value. Loss may be caused by changes of light,

temperature, moisture, excessive respiration, infestation and, in some cases, the

methods used to control infestation. Insects that selectively attack the germ willcause a greater loss in germination than others.


20/29

5. Commercial losses

Commercial losses may be a consequence of any of the foregoing factors or be the

preventive or remedial actions required, as well as equipment costs. These lossesare generally incurred through a lack of knowledge, experience or managerialability.

a) Monetary loss

Weight loss is an economic loss as is any downgrading of produce due to poorquality. Any control measure that has to be employed to render or keep the

commodity saleable can be counted as an economic loss and is perhaps the mosteasily accountable loss.

Losses in packaging and the costs of repacking due to rodent and handling damage,

repairs and stoppages in machinery, damage to the fabric of the store are alleconomic losses that can be the result of infestation.

b) Loss of goodwill

This is not directly accountable but nonetheless it is very important, especially with

regard to rising quality standards. A control measure that may seem uneconomic atfirst but leads to better custom or at least retains custom, is better than no control

that leads to losing custom. This is particularly so in exports where a reputation forhigh quality produce is valuable to a country's economy.

c) Loss due to legal action

This may include damages awarded due to impairment of health of humans and

animals, expenses incurred by third persons due to infestation traceable to aparticular shipment, and various actions due to contamination.


21/29

FCI's Objectives are:

The Food Corporation of India was setup under the Food Corporation Act

1964, in order to fulfill following objectives of the Food Policy:

Effective price support operations for safeguarding the interests of the farmers.

Distribution of food grains throughout the country for public distribution system

Maintaining satisfactory level of operational and buffer stocks of food grains toensure National Food Security

In its 45 years of service to the nation, FCI has played a significant role in

India's success in transforming the crisis management oriented food security

into a stable security system. FCI's Objectives are:

To provide farmers remunerative prices.

To make food grains available at reasonable prices, particularly tovulnerable, section of the society.

To maintain buffer stocks as measure of Food Security.

To intervene in market for price stabilization.


22/29

QUALITY POLICY

FCI, as the country's nodal organization for implementing the National

Food Policy, is committed to provide credible, customer focused

services, for efficient and effective food security management in the

country.

Our focus shall be:-

Professional excellence in Management of food grain and othercommodities.

-Service quality and stake holder orientation.

-Transparency and accountability in transactions.

-Optimum utilization of resources.

-Continual improvement of systems, processes and resources.


23/29

QUALITY OBJECTIVES

Fulfillment of all the targets set as per Govt. of India Food

Policy from time to time.

Monitoring of Quality in all major transactions, processes

leading to improved customer satisfaction level.

Accountability for efficiency, responsiveness, performance and

minimization of all losses & Wastes.

Need based up gradation of infrastructure and work

environment.

Need based enhancement of available knowledge & skills.

Transparency in decision making, effective communication

leading to harmonious employee relations.

Establishing, maintaining and improving ISO 9001:2000 based

Quality Management Systems covering all areas of activity.


24/29

Quality Control Measures :-

Periodical prophylactic and curative treatment of stocks, as prescribed.

Maintaining priority list for issue of stocks observing the FIFO principle.

Undertaking pre-monsoon fumigation.

Improvement in dunnage material.

Ensuring proper quality checking of foodgrains at the time of procurement

PROBLEMS

1. Damage to food grains caused due to prolonged storage. The more thestorage period the more quality of food garins will be hampered.

2. Due to regional disturbances, FCI is facing problems in North EastZones which affects the movement of food garins from one place toanother . Further , it is amplified that due to limited storage capacity which

gets acute during the monsoons due to breaches in roads , landslides ,cloud brust and washing away of bridges etc , the stock position is not ableto meet the requirements of TPDS (APL, BPL,AAY).

3. FCI should explore the possibility of utilizing the storage capacity forkeeping wheat and rice stock instead of storage dead stocks articles likewooden crates , gunnies , polythene covers , SPL rolls , and chemicals etc.This way loss occurred due to open storage can be minimized.

4. Steps taken by FCI for augmentation of storage capacity are only for ashort term.

5. Loss to FCI on account of theft , pilferage etc must be reduced.


25/29

CONCLUSION

The purpose of this research is to understand the various transit loss happening in

FCI for the development of any organization people are responsibilities for the

work activities.

Liability for shortages in the quantity of goods delivered is limited to makingup the shortages. No claim for shortages in quantity will be allowed unlessthe customer gives notification of the shortage in writing within 7 days of

the delivery and provides a reasonable opportunity to investigate the claim.

Goods leaving a FCI dispatch centre are adequately packed. Claims fordamage or loss in transit must be made against the carrier in theprescribed .

. Penalty should be charged to contractor when more loss will beOccurred to RTL.

Prior to acknowledging delivery to the carrier the buyer must ensurethat the complete consignment as per the carrier's note has been

received.

Should there be a shortage or visible damage to outer packaging the

carrier's note must be endorsed accordingly.


26/29

Within 7 days of receipt of consignment the buyer must ensure that all

goods received are in good order and condition.

No claims will be considered after 7 days of receipt of goods. While no

liability for goods damaged or lost in transit will be accepted by any

organization of any claim should be advised to the seller.

Responsibility should be imposed to contractors concerned as they also

come under the team of FCI.

Proper dunnage material should be placed at the time of dispatching of

rake so that the spillage may collect by receipt end.

Proper security measures must be ensured to avoid theft problem.

Proper infrastructure may be awarded by railway as the matter

concern to national wealth.

Proper training should be provided to the field staff for handling of food

grain from rakes.

Vigilance squad from regional office level should be formed for

surprise inspections.

Proposal of railway siding may initiate At DO Level as the capacity of

depot justified the railway siding and the losses may fall underspecification.


27/29

Do anybody know who is responsible for transit loss the answer is no because no

other to know who is responsible for it only the employees of the organization.

No one take the risk of transit loss. In this organization means FCI, Allahabad is

appointing private builders to build but they are harming the organization

products as well as they are wasting the time. Company should appoint their own

government builders so that they should guide them and an contact time to time

with them, they should be given proper training to utilize the resources and

should know how to use the waste resources also. Transit loss can be of any type

like cash transit.


28/29

SUGGESTIONS:-

PRIVATE LABOURS SHOULD BE APPOINTED FOR BENEFIT OF THE

ORGANISATION.

PENALITY SHOULD BE CHARGED TO CONTRATOR.

PROPER TRAINING SHOULD BE GIVEN.EMPLOYEE SHOULD KNOW HOW TO USE THE RESOURCES.

EMPLOYEES OF THE ORGANISATION SHOULD BE AWARE OF WHAT IS

HAPPENING IN THE ORGANISATION.

IN ORGANISATION ONE SQURT COMMITIES.

PROPER TRAINING SHOULD BE PROVIDING TO BE EMPLOYESS.


29/29

FORMULA HOW TO FIND TRANSIT LOSS

1. TRANSIT LOSS = DISPACH QUANTITY RECEIVED QUANTITY

2. PERCENTAGE OF LOSS = TRANSIT LOSS X 100

DISPATCH WEIGH

3. VALUE OF TRANSIT LOSS= TRANSIT LOSS X RATE

.

GAJENDRA REPORT.docx

Documents