SUBMITTED TO: SUBMITTED BY:

Mr. N.S UPPAL SUDEEP JANA (80062)

SUBMITTED ON: CHITRANGDA THAKUR (80081)

4TH MAY, 2009 GM-2

 ACKNOWLEDGEMENT

With heartfelt regard, we convey our sincere thanks to Mr. N.S Uppal for helping and
guiding us throughout the preparation of this report and for his knowledge and support
without which the submission could not have been completed.

Thank you

Sudeep Jana (80062)-

Chitrangda Thakur (80081)-

INDEX
S.NO. CONTENT

1 SUPPLY CHAIN INTRODUCTION

2 SUPPLY CHAIN DRIVERS

3 LOGISTICS

4 STORE DEPARTMENT (sourcing)

5 MATERIAL HANDLING

6 MATERIAL STORAGE AND PACKAGING

7 TRANSPORTATION

8 LETTER OF CREDIT

9 BILL OF EXCHANGE

10 ANNEXURES

SUPPLY CHAIN MANAGEMENT

Supply chain management is the management of a network of interconnected
businesses involved in the ultimate provision of product and service packages required
by end customers . Supply Chain Management spans all movement and storage of raw
materials, work-in-process inventory, and finished goods from point-of-origin to point-
of-consumption.

It encompasses the planning and management of all activities involved in sourcing,

procurement, conversion, and logistics management activities. Importantly, it also
includes coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers, and customers. In essence, Supply Chain
Management integrates supply and demand management within and across companies.

Supply chain management (SCM) is the oversight of materials, information, and

finances as they move in a process from supplier to manufacturer to wholesaler to
retailer to consumer. Supply chain management involves coordinating and integrating
these flows both within and among companies. It is said that the ultimate goal of any
effective supply chain management system is to reduce inventory (with the assumption
that products are available when needed).

Supply chain management flows can be divided into three main flows:

• The product flow

• The information flow
 • The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well
as any customer returns or service needs. The information flow involves transmitting
order sand updating the status of delivery. The financial flow consists of credit terms,
payment schedules, and consignment and title ownership arrangements.

SUPPLY CHAIN PRACTICES THAT AN ORGANISATION SHOULD

IMPLEMENT AS IT SEEKS TO IMPROVE ITS PERFORMANCE METRICS:

1. Create a consensus demand plan: An organization can get consensus on market

requirements and business assumptions by incorporating new product introductions,
product retirement, upcoming promotions, financial projections, investor commitments
and sales forecasts into the demand planning process, and creating a consensus plan
around it. Without building consensus, everyone has a different perspective of customer
demand and it becomes difficult to synchronize demand and supply.

2. Ensure supply demand synchronization: By using techniques such as Sales &

Operations Planning (S&OP), as well as creating a supply plan that maps to demand
while also incorporating key constraints, a company can ensure that it will be able to
meet its delivery commitments without incurring expediting costs or higher inventory.
Such capability not only reduces costs, but increases customer loyalty.

3. Streamline supplier interactions: By providing suppliers ongoing visibility into

their forecast and consumption plans, as well as current inventory status and planned
receipts, manufacturers can get their suppliers to improve replenishment lead time and
become more responsive to their changing needs. It also allows them to implement
programs such as Vendor-Managed Inventory (VMI), cut costs through reduction in
inventory and safety stock, reduction in overtimes or expediting costs.

4. Get visibility into supply chain events: Traditional supply chains are evolving into a
worldwide network of suppliers and manufacturing or distribution facilities. Such an
environment requires stakeholders to share any shipment or material information such as
plans, current status or exceptions with each other in a timely manner in order to
improve overall supply chain performance. Without the ability to provide such levels of
visibility to each other, each stakeholder ends up continuously reacting to unplanned
surprises with limited time to act, not to mention carrying extra inventory to compensate
for such surprises. Visibility into shipments and material-related information promotes
faster decision-making within the supply chain and enables each stakeholder to
proactively respond to issues. Supply Chain Event Management (SCEM) addresses
these requirements.

5. Automate trade compliance: As organizations grow in scale through new products

and expanded geographical markets, or setting up plants in other countries, or turning to
offshore suppliers, manual methods of managing the export and import compliance
process become exponentially more complex and time-consuming. Even significant
increases in headcount may not resolve the issues. Streamlining the export and import
management process brings benefits such as significant cost savings, improved
productivity, fewer shipment delays and reduced risk of penalties and fines due to non-
compliance.

6. Rationalize the supply base: By reducing the number of suppliers, procurement

managers can take spending on a category that is currently scattered among multiple
suppliers and award that volume of spending to a smaller number of suppliers to gain
volume discounts. Rationalizing the supply base also reduces complexity associated
with new part introduction and simplifies supply collaboration.

7. Integrate engineering and sourcing into supply chain management: New product
introduction (NPI) and sourcing are key elements of effective supply chain management
(SCM). Without expertly incorporating NPI into the supply chain planning process, a
manufacturer runs the risk of inventory write-offs or shortages of critical components.
Similarly, the sourcing process should incorporate requirements such as ability to
deliver in the right replenishment model, responsiveness and flexibility to react to
sudden changes in business needs.

8. Continuously measure key performance metrics: One best practice is getting

visibility into key supply chain performance metrics on an ongoing basis and using that
information to continuously improve the supply chain. SAP's upcoming supply chain
performance management solution will help close the loop for its customers.

9. Focus on time and inventory: While one can focus on improving multiple aspects of
the supply chain, the greatest impact can be had by focusing on continuously improving
on two fronts: increasing the velocity of process and information flow and focusing on
activities and actions that can reduce inventory within the system.

10. Deploy an integrated solution: When the supply chain capabilities of ERP systems
were not as mature as they are today, best-of-breed solutions were the preferred
approach. However using such systems created information integration issues. Today, I
recommend that companies evaluate supply chain systems from their ERP vendors
before looking at other options.

SUPPLY CHAIN DRIVERS

INVENTORY

Vendor managed inventory, coordinated by an integrated logistics system, allows

inventory to be optimised together with transportation. By knowing the product value as
well as storage capacity at each site, and routinely collecting information on
consumption rate, current inventory levels, forecasted demand and status of shipments,
the system can optimise the right quantities of replenishments to be sent at the right time
to ensure that service levels are maintained while minimising cost of inventory and
transportation.

Inventory refers to all of the raw materials, work in process (WIP), and finished goods
within the supply chain. Inventory policies can dramatically alter a supply chain’s
efficiency and responsiveness. It can increase amount of demand that can be met by
increasing product availability. Inventory can reduce costs by exploiting economies of
scale in production, transportation, and purchasing. It can be used to support a firm’s
competitive strategy. More inventory increases responsiveness, less inventory increases
efficiency (reduces cost).

TRANSPORTATION

Modes and routes for moving inventory throughout the supply chain.
Faster transportation allows a supply chain to be more responsive but generally less
efficient. Less than full truckloads allow a supply chain to be more responsive but
generally less efficient. Transportation can be used to support a firm’s competitive
strategy. Customers may demand and be willing to pay for a high level of
responsiveness.

While supply chain design deals with the flow and stocking of goods, transportation
optimisation examines the shipment (flow) process itself. The typical transportation
optimiser will search for opportunities to aggregate compatible orders or splitting orders
to fit the transportation media (e.g. containers), identify pooling points to consolidate
orders for long haul using larger & hence cheaper media and routing of pick-up and
drop-off orders to increase backhaul. The judicious use of or to optimise shipment plan
has been generating large savings in transportation. 10-35% reduction in freight
expenses had been achieved through optimal aggregation/ consolidation, multi-modal
multi-leg carrier selection, rating and routing of freight orders.
TRANSPORTATION DECISION:
• Mode of transportation is the manner in which a product is moved (air, truck, rail,
ship, pipeline, electronic). Each mode differs with respect to speed, size of
shipments, cost, and flexibility.
• Routes are paths along which a product can be shipped.
• In house or outsource the transportation function. Many companies use third-
party logistics providers (3PL) to perform some or all of their transportation
activities

FACILITIES

Places within the supply chain where inventory is stored, assembled, or fabricated.
Decisions on location, capacity, and flexibility of facilities have a significant impact on
performance. Facilities either store inventory between supply chain stages (warehouses,
distribution centers, retailers) or transform inventory into another state (fabrication or
assembly plants). Centralization of facilities uses economies of scale to increase supply
chain efficiency (fewer locations and less inventory) usually at the expense of
responsiveness (distance from customer).
FACILITY DECISION:
Location. Centralize to gain economies of scale or decentralize to be more responsive.
Other issues include quality and cost of workers, cost of facility, infrastructure, taxes,
quality of life, etc.
Capacity. Excess capacity allows a company to be more responsive to changes in the
level of demand, but at the expense of efficiency.
Manufacturing Methodology. Decisions between a product or functional focus,
between flexible or dedicated capacity.
Warehousing Methodology. Chose between SKU storage (stores all of one type of
product together), Job lot storage (stores different products together to satisfy a
particular customer or job), or cross-docking.

INFORMATION

Data and analysis regarding inventory, transportation, facilities, and customers

throughout the supply chain. It is potentially the biggest driver since it affects all the
other drivers.
• Information connects various supply chain stages and allows them to coordinate
activities.
• Information is crucial to the daily operations of each stage of the supply chain.
• An information system can enable a firm to get a high variety of customized
products to customers rapidly
• An information system can enable a firm to understand changing consumer needs
more quickly

Information Decision Components:

Push versus Pull. Push systems (like MRP) need information on anticipated demand to
create production and purchasing schedules. Pull system (like JIT) need accurate and
quick information on actual demand to move inventory and schedule production in the
chain.
Coordination and Information Sharing. How will the goal of maximizing supply chain
profitability be achieved through the coordination of activities and sharing of
appropriate information.
Forecasting and Aggregate Planning. How will future demand and market conditions
be forecast, and to what extent will collaborative forecasting be used. How will
aggregate planning be used to meet forecasted demand and to what extent will it be
shared throughout the supply chain.
Enabling Technologies. Which information technologies will be used and integrated
throughout the supply chain- electronic data interchange (EDI), the Internet, enterprise
resource planning (ERP) systems, supply chain management (SCM) software.

STORAGE AND WAREHOUSE

The warehouse acts as a supporting function for logistics and play’s a key role in
attaining the overall objectives of the firm’s logistical supply chain system. In today’s
context, the warehouse is used as a switching facility rather than as long a term storage
house. Attention is paid to higher inventory turnover, lower operating cost, and shorter
cycle time. Warehouse performance is judged by its productivity and cost performance,
while trying to achieve the two polemic goals of customer satisfaction and lower cost of
operation. Warehouses are long term investment and must be designed to grow with the
business.

PACKING

Typical system that generates pick list for each vehicle do not necessary know if all
items could fit into the vehicle. The discreteness of items will inevitably result in some
space that cannot be used. Hence, knowing how items should be packed or stuffed so
that capacity is well used is another important cost saver. The load planning software
can be integrated with the routing software to generate an optimal stuffing plan that
considers compatibility, stack ability and unloading sequence. Planners are thus assured
that the routes and loading plans would both work.

LOGISTICS
Logistics is defined as a business planning framework for the management of material,
service, information and capital flows. It includes the increasingly complex information,
communication and control systems required in today's business environment.
It is the process of planning, implementing, and controlling the efficient, effective flow
and storage of goods, services, and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements.
Logistics is the science of planning and implementing the acquisition and use of the
resources necessary to sustain the operation of a system.
The science of planning, design, and support of business operations of procurement,
purchasing, inventory, warehousing, distribution, transportation, customer support,
financial and human resources.

Integrated Logistics Management

The core enabling technology (besides IT) to

bring about integrated logistics is operations
research (OR). OR is the application of
mathematical methods such as linear
programming, game theory, statistical analysis
and simulation to solve real world (complex)
management problems. It always take a total
systems and total cost perspective of the
management problem so that the solution does
not inadvertently create problems in other areas
or that savings in one area does not worsen the
overall company’s performance.

Decision Support Systems (DSSs) are applications embodied with OR technologies to

solve specialised problems. These systems have, time and again, proven to produce
significantly better solutions to structured problems and in a much shorter time than
those produced by the most experienced planner. Coupled with IT applications, it
provide a powerful system to tackle and integrate the many aspects of logistics planning.

STORE DEPARTMENT

Orient craft have a centralized storage, which means there all the fabric trims and other
raw material first comes to there main store then further gets distributed from there.
When any fabric sourcing is done, it first comes to the main store of orient craft group,
then further it distributed to other units as per the requirements. Although there each
units also have their own store, but the main store is in 7P unit.

Raw material comes from various

suppliers

Main store unit 7P

Unit 7D Unit Manesar 9 K unit

80P unit

RAW MATERIAL SOURCING

Orient craft have a very nice and systematic fabric sourcing department. It is a very
important department because fabrics are the costliest thing in a garment. So it is very
important that an export house choose good and reliable supplier, who can deliver the
material on time, at lowest price.

When ever the PO comes according to it the merchandiser make a BOM of that order
and material in house according to it.

BOM contains all the important details of raw material which is sent to various
suppliers. So that they can give their own quotations according to the bill of material and
send it back to the export house.

CRITERIA FOR ASSESSING AND SELECTION OF SUPPLIER

Following factors kept in consideration while selecting a supplier:

 • Price
• Time
• Quality
• Delivery

While selecting a supplier against various quotations which an export house receives is
very important job. And it is done keeping following things in mind, where he is getting
the lowest price, give delivery at shortest lead time, and the best quality.

Various suppliers are as follows:

S.NO. ACCESSORY SUPPLIER

1 FABRIC • Alok mills

• Auro textiles
• SKC
• Tex and wets
• RMP fabric sourcing
• Deepika exports
• Fountain set limited
• Shaoxing couty
• Kin tao textile ltd.
2 THREADS • Vardhman
• Madhura coats
• Pashupati
• Malwa (oswal)
3 ZIPPER • YKK
4 BUTTON • zindal and simex
5 ELASTIC • Surabhi
6 FID • Factory ID Code
7 LABELS AND TAGS • Manohar filament
• Kailash ribbons
• RVF Shore

Accessories purchase department

There are two types of purchase against the following type of order :
• Job orders
• Miscellaneous orders
In the first kind of order, all the requirements related to production department are taken
into consideration. These requirements are forwarded to the accessories department
through ERP system and with the help of ERP accessories department comes to know
that the requirements of the production department and place the order according to the
department.

The codes are generated against each order in ERP and according to these codes
requirements are generated. Purchase department checks the quantity of accessories in
its previous record to see if more balance is there or not. It then orders the remaining
quantity of accessories. At the time of receiving the accessories, the department checks
the quality of the items and if it is in the acceptable limit then they accept the items and
place to specific bins and enter that bin number into the system against the order.

The various trims that can be ordered are:

S.NO. TRIMS

1 Main label

2 Size label

3 Style label

4 Button

5 Thread

6 Zipper

7 Polybag

In the second kind of order all the requirements related to supporting items like
stationary, house keeping, medicine etc. are taken care of. These requirements are
submitted to the accessories department by the different departments once in a month.

The discount available on the purchase are :

• Cash discounts

• Bulk discounts

The documents prepared by the department are:

 • Requisition: For fabric request which is generated by the merchandising
department.
• PO : Purchase order coming from the buyer.
• Lab test report: Accessories are tested are per the requirements of the buyer.
• Inspection report : To keep a track on the defects when 10% inspection is carried
out.

Once when the fabric is in-house it is first taken to the quarainted zone, where, the
security people receive the fabric in the form of rolls or in loose forms and inspect the
quantity of the fabric to see if it matches the quantity mentioned in the supplier’s chalan.
The receipt is then sent to the concerned person. After all the procedures, quality person
continues with the checking process.Outsourced fabric: 100% inspection

After following the procedure, 25-100 cm is cut from the fabric, from each roll and with
these swatches their corresponding rolls are marked. Lots are made by examining these
swatches and the samples are sent to the merchandiser for grouping them under various
shades, these rolls are marked with different colored stickers to identify the various
shades and lots from each other, the process is called Shade Banding.

Role to role variation is checked manually or with a checking instrument called Light
Box, with one fact that the weight and ratio of the fabric of the fabric is noticed same, in
which, the fabric defect system followed is 4- point system.

A report is sent to the merchandiser about defect, lot card, continually card which carries
the details of every lot of no. of rolls are there in it.

Center selvedge (CC) is the measure in which different roll is joined weight wise .i.e. 1-
6, 3-5 etc. through which variation is checked in order to the garments being stitched
from the same side of the fabric. Marker is also set and bowing and skewing are the
defects found out.

Shrinkage check is done by two ways:

• Colourwise

• Shrinkage wise
For shrinkage testing 28/28” panel is cut from the fabric, color coding eg. Lot 1 to lot 20
is done and stickers are pasted on them.
 Closure is sent after approval and rejected sample is debited and sent back, which is
again inspected by the board of checking and rejection. Rejected fabric is used for
making blankets.

Fabric received on gate

Picked up from gate, bill

and gate entry
Checking (yardage,
defect) Inspection:
100%

Swatch card preparation

Lot wise segregation of

rolls

Bin card is prepared and

tagged to the fabric

Approval from the

merchandising

Issue to cutting

TERMS AND CONDITION FOR THE SUPPLIER

• Fabric will be checked on 4 point system from MTL/ ITS lab and inspection and
quality Certificate should be attached with dispatch documents.
 • Fabric should be free from defects. Fabrics should be in maximum of two shade
lots.
• The fabric shall be supplied strictly in keeping with material specifications/
technical parameters specified in the purchase order or Quantity.
• Packing roll length should be above 30 meters.
• Fabric dispatched after due date will automatically result in discount on fabric
price/ air freight.
• Rejected fabric will be replace within 2-3 days of rejection will pick up in the
same from OC.
• Debit-not settlement within in a week
• Fabric should be delivered with the original document not with chalan.
• Commercial invoice delivery address should be as OC purchase order.
• Complete fabric description should be mentioned on invoice.
• Transit insurance for the goods moved under both from the company as well as
from beneficiary of this document is covered by orient craft limited vide policy
no.0830000597 issued by TATA AIG insurance Co.ltd New Delhi.

Receiving fabric from mill to an export house is not the headache of the export house.
Mill is fully responsible for delivering the fabric to the export house in there own
expense and for that they make there own arrangement. An export house does not to
make any arrangement for receiving fabric from mill.

But when fabric arrives in orient craft main unit which is their main store should make
an entry in there ERP system. And after that when they required to move there fabrics in
their other units at that time OC needs to make there own arrangement for moving raw
materials from one unit to another. Normally Orient Craft transfer their raw material in
there own trucks. They have their own trucks like TATA 407 etc. Even they use their
trucks for dispatching finished goods in local airport and sometimes they move there
truck to Mumbai also.

Material Handling Systems

Material Handling refers to activities, equipment, and procedures related to the moving,
storing, protecting and controlling of materials in a system.

One of the basic components of any manufacturing system is its Material Handling
Systems. We shall first study the different types of material handling systems
that are currently in use. Next, we shall pick a common type of MH system, a
 conveyor, and look at some details of how to go about designing a conveyor
system for a factory.

Material handling means providing

• the right amount of

• the right material
• at the right place
• at the right time
• in the right position
• in the right sequence
• for the right cost

Right Amount:

This relates to two fundamental issues: how much inventory we need to maintain for
different parts/components/modules/products. How much WIP must be running through
the system.

Right Material:

It is important for the MH system to deliver the proper material. Typical cause of
problems may be; Look-alikes (e.g. Red T-shirts of "XL" size and Red T-Shirts of
"XXL" size; or M4 screws with slightly different screw head shape etc.)

Right Sequence:

This is an important step in design of manufacturing systems as well as in their

operation. Materials delivered in the wrong sequence will directly result in increased
WIP.

Principles of Material Handling System

• Planning Principle. Plan to meet requirements efficiently, but maintain

flexibility for contingencies.
• Systems Principle. Coordinate and integrate receiving, inspection, storage,
product, asssembly, packaging, warehousing and distribution systems.
 • Unit load Principle. Use large but practical Unit Loads.
• Space Utilization Principle. Effectively use all cubic space.
• Standardization Principle. Use standard equipment and methods if possible.
• Ergonomic Principle. Recognize human limitations in human-mechanical
systems.
• Energy Principle. Consider energy consumption in economic analysis.
• Ecology Principle. Design for environmental friendliness.
• Flexibility Principle. Use methods and equipment that can performa variety of
tasks.
• Simplification Principle. simplify and aliminate handling steps if possible.
• Safety Principle. Provide safe methods and equipment. Follow safety codes.
• Computerization Principle. Consider computerization and automation.
• Cost principle. Compare alternatives in terms of cost per unit handled.
• Maintenance Principle. Use preventive maintenance on equipment.

MATERIAL HANDLING EQUIPMENT AND SYSTEMS.

Classification of the material handling system is based on degree of its sophistication.

The most preferred way of material handling is manual, where volume handling is less
and the investment in handling equipment does not ensure more benefits. In such cases
the idle time of equipments will be more and the equipment is underutilized. Handling
can be classified as follows.

• Manual
• Mechanised
• Semiautomatic
• Automatic
• Information guided

The major criteria for selection of the right system are: unit moved per hour, and the
distance it is moved. Higher volumes over large distances call for more sophisticated
system, which attract higher investment. Sophisticated system enhance the speed of
material handling, ensuring reliability and productivity.
Few of the MH equipments are :

• Fork lifter
• Wheeled trolley
• Conveyers
• Cranes
• Towlines
• Manually

Orient craft have a very systematic material handling system. They follow ERP system
for material handling and material storage system. This helps them keeping each and
ever record in there system for later requirements. By using ERP system they made
there material very easy and in a systematic flow. Because ERP system is such a system
in which work flow is pre-defined, which means you cannot go to next operation till the
time u don’t finish the previous one. So this makes the whole material handling system
in OC a very systematic

When the material comes to the gate, first unloading takes

place, simultaneously gate entry for fabric received is done.
For unloading they use slider which helps in sliding the rolls
of fabric.

Slider is used to
unload the truck
Mostly they use man power to unload the truck.

Orient Crafts fabric store department in 7D is in the basement and quite inside from the
main entry gate. So once the unloading is done they move the fabric to the gate fabric
store which is in ground floor with the help of trolleys.

STORE

GATE

Movement with
trolley

And many times they use man also to move the fabric from main gate to fabric store
department. When the fabrics reaches just outside of the store gate which is in the
ground floor they use man power and small trolleys to further take the raw materials in
the basement where fabric storage is done.

Fabric moving to
store in
basement

MOVEMENT OF FABRIC FROM STORE TO CUTTING

When any requisition comes from the cutting department for fabric to fabric store. The
cutting department sends a requisition slip. Then the store department issues a slip along
with the fabric. Cutting department in Orient Craft is also basement Just aside of fabric
store department. For moving fabric rolls or than from store to cutting department they
use wheel trolleys. And many times fabric rolls are being moved with the help of labour
itself

Trolleys are used to

move the fabrics
 A ladder stand is used to
keep or taking out fabric
from the upper racks
because racks height is
quite high

FABRIC ISSUE CHALLAN

Sales Order No. :

Run Date :
Time :
STYLE Fabric Description:

S. NO. FABRIC ISSUE ROLL ACTUAL ROLL

LINE NO. FIN. QUANTITY
CODE COLOR SIZE WIDTH
IN MTR.
 Line Total ………......

MATERIAL FLOW IN CUTTING DEPARTMENT

As per requirement sent a

requisition slip to fabric
department

Required fabric will be

received from cutting dept
with issuing slip

Fabric will be cut according to the cutting

plan

Bundling

stickering

Fabric
An internal
will bechallan
forwarded
will
to be
sewing
issued
department
to sewing
Within the cutting department fabrics are moved from one section (eg :- bundling,
stickering, cut parts) to another with the help of various trolleys and bins.

Once the fabric is ready it is been passed to the sewing department with the help of
labors and trolleys.

MOVEMENT OF MATERIAL FROM CUTTING TO SEWING

The sewing lab in orient craft &D unit is in first and second floor. So when the materials
are cut and ready for sewing they are moved in small trolleys from cutting to sewing
department. Few pan power is used to do this job for the whole day, they take fabric
according to style wise.

An issuing challan is issued from the cutting department to the sewing department,
against the issued fabric.

MOVEMENT OF MATERIAL FROM SEWING TO FINISHING

DEPARTMENT

Finishing department in Orient Craft is in the production floor itself. Just where sewing
ends finishing department is just aside that. So there are small baskets and helper
themselves moving garments from sewing to finishing department.

In finishing department there are sections:-

• Thread cutting section

• Spotting section
• Ironing section
And all these section are one after another so there is not much is material movement in
finishing department. Everything is done with the helpers here.

MOVEMENT OF MATERIAL FROM FINISHING DESPATH SECTION

Finishing department in Orient Craft is at extremely back side of the 7D Unit. So for
moving finished goods to the dispatch department, they use trolleys and sometimes they
just put the garment in the cartons and use labors to move the garments to the dispatch
department. There dispatch department is quite high at level of the truck so while
shifting the garment in the dispatch department they sometime use slider for moving the
garment into the dispatch department.

Dispatc
h
section

gate

Slider is used to move

the material

DESPATCH DEPARTMENT

In the dispatch department there are long tables where the garments are being kept. And
then they are packed according to the buyers requirements. And cartons polybags,
everything is used according to the buyer.

Packing

Typical system that generates pick list for each vehicle do not necessary know if all
items could fit into the vehicle. The discreteness of items will inevitably result in some
space that cannot be used. Hence, knowing how items should be packed or stuffed so
that capacity is well used is another important cost saver. The load planning software
can be integrated with the routing software to generate an optimal stuffing plan that
considers compatibility, stack ability and unloading sequence. Planners are thus assured
that the routes and loading plans would both work.

Packing is a very important part in garment sector, especially if you are doing exporting.
In that case every thing is done according to the buyers requirements.

Various packing materials are

• Cartons
• Polybags
• Kimbles
• Foam
• Butterfly
• Hangtag

Materials & Equipments

Flip Fold Shirt Folder

This is easy-to-use folding tool folds shirts to a uniform 9" x 12" size quickly

Shirt Folding Board

These economical shirt folding
boards available in both adult and
child sizes allow one to create crisp,
professional folds every time.

MATERIAL STORAGE SYSTEM

When the fabrics comes from the mill it comes in the form of a

• Roll
• Thaan

When the fabric reaches the store it is kept in various racks and pallets

The fabric for every style is kept together irrespective of their lots due to less space. A
board above every stack of fabric gives the information about that particular style. The
following information is conveyed by the boards:

• Buyer name

• Style number

• Fabric type

• Fabric content

• Fabric description

• Lengthwise and width wise elongation

Also, for knowing the status of the fabric stack in the store, the boards are colored to
denote their various status.

When the fabric enters the fabric store, it is weighed and the entries are done for the
following according to the mentioned details on each roll:

• Fabric code

• Color

• Yardage

• No. of bills

• Bin no. (place of storage known as Bin. Bin numbers are used for tracing
generally racks in the case of small things like accessories or small segregated
regions in case of fabric rolls).

• Fabric store –bin card

It tells us about the details of the fabric received by the store, to whom and how much is
left with the store. It consists of the following details:

Fabric count, code, construction, received meter, issued to, store balance
As you can see in the above picture fabric rolls are kept in a systematic manner lot shade
wise. The racks are very properly maintained and fabrics are kept in a very system. The
fabric rolls are first kept in the polyethene, and then further it is kept in the racks. So the
fabric can be identified easily.

Similarly fabrics which come in the

form are also kept in the racks.
They are sometimes kept in style
wise and sometime shade wise.
 As you can see in
the above picture there different color chart attached in front of each racks, these
different color chart have different meaning.

For knowing the status of the fabric stack in the store, the boards are colored to denote
their availability.

PINK - checked fabric

RED - Rejected fabric

YELLOW - inspected and passed

BLUE - unchecked fabric

GREEN - fabric yet to be checked

STORAGE IN CUTTING DEPARTMENT

Patterns of various styles are

kept in this form in cutting
floor
 After cutting fabrics is
stacked, put them in
polybag and then they
are kept in a side on
the table

MATERIAL STORAGE AND PACKING IN DISPATCH DEPARTMENT

Cartons details

Height 23 cm

breadth 37

Length 53
7 ply carton

2 garments are packed

in

Cartons
Packing Instructions

Three types of Purchase orders:

 Bulk with no pre-packs

 Bulk with pre-packs

 Packs by store

All shipping cartons must be in accordance with the following carton size and
weight requirements:

Minimum: Weight 5 pounds, Length: 9“ - Height: 6“ - Width 4“

Maximum: Weight 50 pounds, Length: 36“ - Height: 28“ - Width: 24“

Packing instructions for Bulk Pack Orders (with pre pack):

• A carton can only contain a unique pre-pack size. Cartons can contain as
many of the unique style/color pre-pack size that will fit into a carton without
exceeding carton dimensions.
• Cartons shipped must be marked with the pre-pack detail/breakout printed on
the shipping labels
• Multiple Purchase Orders in the same carton should not be combined
• All sets and coordinates with two items hung on interlaced hangers with one
UPC must be packaged together, top/bottom on same hanger or bundled in a
clear poly bag.
• All related separates ordered as a set, must be sent in the same shipment with
the same Bill of Landing and arrive on the same trailer/container.
• Pre-packs must be packaged in poly-bag and bundled as one unit.

Master Packs:
 Inner cartons/packages must be separate for each style, color, size and/or store
 Each inner carton/package must include an UCC shipping container label.
 Create a carton label with the required information (ship to, ship from, carrier
info, PO#, and dept # and place on the outside of the master-pack)

Additional Packing instructions given by the buyer to Orient Craft

• Cover each garment with a clear, dry cleaning style plastic (1 mm) bag,
to prevent wrinkling or soiling. Bag must be sealed at bottom.
• Merchandise should be packed ’flat’, lengthwise in cartons. If the
merchandise must be folded, use no more than one fold, at the bottom of
the garment.
• Bundle hangers with string, twine or rubber bands to prevent shifting (do
not use metal or tape).
• Place cardboard or tissue between alternating bundles if necessary, to
prevent crushing and reduce shifting of contents.
• Delicate items should be placed on top to prevent crushing.
• If improper carton handling during transportation could cause wrinkling,
use “THIS END UP” labeling on the carton.
• Mark all fragile cartons with a fragile label.

Use corrugated packing materials and a container that will prevent product movement
and breakage.

Under the prevailing Packaged Commodity Act, six declarations are required to be
made on garment packing:
 • Size in centimetres
• Name of the commodity
• Units packed
• Date of manufacturing
• Maximum retail price
• Name and address of the manufacturer.

General Carton Requirements

• Cartons must be made from re-shippable and recyclable corrugated cardboard.

• Accessory cartons weighing more than 40 pounds must have double wall
construction and minimum burst strength of 225 pounds.
• Accessory cartons weighing less than 40 pounds must have double wall
construction and minimum burst strength of 175 pounds.
• Garment cartons regardless of weight must have triple wall construction, and
have a minimum burst strength of 275 lbs.
• Carton sizes must be consistent for each PO – style.
• Cartons cannot be more than 48 inches in length.
• Cartons weighing 30lbs or less cannot be bigger than 84 inches in Length and
girth.
• Cartons weighing less than 49lbs cannot be bigger than 108 inches in Length
and girth.
• Cartons weighing 50 lbs cannot be bigger than 130 inches in Length and girth.
• LENGTH and GIRTH : take the length + circumference of the carton. A carton
that is 32”L x 23”W x 10.5” H. You would take the circumference 23 + 23 +
10.5 + 10.5 = 67” than add the length 32” + 67” = 99”Total length and girth for
carton is 99”.
• Cartons cannot be smaller then 12 inches long, 12 inches wide and 5 inches
high.
• DO NOT place strapping around carton, use staples to close carton, secure
carton with wire, or wrap carton in burlap.

Sample Cartons size to meet length + girth

30lbs or less
L W H Length + girth
12 12 5 46
12 12 12 60
16 16 16 80
20 20 12 84
30 15 12 84
 INVENTORY MANAGEMENT

Vendor managed inventory, coordinated by an integrated logistics system, allows

inventory to be optimised together with transportation. By knowing the product value as
well as storage capacity at each site, and routinely collecting information on
consumption rate, current inventory levels, forecasted demand and status of shipments,
the system can optimise the right quantities of replenishments to be sent at the right time
to ensure that service levels are maintained while minimising cost of inventory and
transportation.

Inventory refers to all of the raw materials, work in process (WIP), and finished goods
within the supply chain. Inventory policies can dramatically alter a supply chain’s
efficiency and responsiveness. It can increase amount of demand that can be met by
increasing product availability. Inventory can reduce costs by exploiting economies of
scale in production, transportation, and purchasing. It can be used to support a firm’s
competitive strategy. More inventory increases responsiveness, less inventory increases
efficiency (reduces cost).

Inventories are held in following general categories:-

• Raw material and components

• Work in progress
• Finished goods
• Maintenance and repairs

INVENTORY RELATED COST

A major portion of the working capital of a firm is blocked in inventory. If the inventory
in excess of the maximum level, more funds will blocked and it cannot be used for other
productive purposes, resulting in opportunity loss. Hence, funds are tied up
unnecessarily. There are other costs related to inventory. The incidence of those costs
will also be more if inventories are in excess of the optimum level.

• Inventory cost
• Carrying cost
 • Ordering cost
• Warehousing cost
• Damage, pilferage, and obsolescence cost
• Exchange rate differentials

I nventory in orient craft is all the time quite high, because of its number of unit and
each unit doing so much of production. So they always require stock of raw
materials, so that there might not be any scarcity of raw materials.

Inventory management is very important department as the whole process depends on

inventory the stock availability. There should a perfect balance between the maximum
and minimum inventory that should be available in the store.

In Orient Craft many styles are going simultaneously so the WIP in the floor is quite
high and every day fabric is coming because every day the are getting new orders. So
the inventory management department needs to be very careful and proactive while
handling the inventory.

Purchase order

Material
receives

Many styles running

together

They have a minimum stock keeping system.

This means after some minimum amount we
need to purchase it again, if the style is
running continuously

Makes a balance in inventory.

That if it is excess it will block the
working capital, and if it is less it
will create scarcity

Most of there fabrics comes from Surat and bhaddi

Orient Craft inventory related cost:-

All the ordering cost are taken care by Orient Craft

Inventory itself is a cost and Orient Craft makes a perfect balance between purchase and
requirements, so that the working capital does not get block. Which means the exporter
might have problem in running the business smoothly, because working capital is very
important in any business, without you cannot run your business. When the raw
materials are imported from outside sometimes due to fluctuation of the rates orient craft
bared some loses also, as deal is done in some other price and suddenly the currency rate
fluctuates. Such a situation is avoided by making all the necessary terms and condition
before the deal is made.

Orient crafts inventory carrying cost goes up if they are buying more inventories.
Because their main store is in 7P once the materials inhouse in 7P then further it is
distributed in other units, which is done by trucks which automatically increases the
inventory carrying cost. Because while carrying inventory one unit to another they need
to give various challans, octroi etc. and sometimes they need to hire the trucks also
which adds on the carrying cost of the inventory.

7D unit

80P unit
Inventory carrying cost

7P (mains
store)
9k Unit

Manesar unit

It cost around (RS 500-1000) in one move of truck from unit to unit.

Even within the unit also inventory carrying cost are there like orient craft have brought
many trolleys and when man power is used it is also add in the carrying cost of the
material from one department to another.
INVENTORY HOLDING COST

Inventory holding cost is also another cost which comes under inventory.

Everyday Orient Craft 7D unit is getting ample of inventory. And these inventories are
kept in racks pallets, trolleys are used for movement of fabric. And Orient Craft needs to
buy these things which increase the inventory holding cost. Rather holding more
inventory blocks a huge chunk of working capital.

After that these racks and trolleys have some maintenance expense also which also adds
in the total inventory cost itself.

ACCESSORY PURCHASE DEPARTMENT

Requirement sent by the

merchandiser

Items counter sourced, option submitted with prices

Items are approved by the merchandiser or

the buyer

Once the order is confirmed, options are

chosen

Sourcing (local or international; international

as per the buyer nominated vendor)

Quality, price, and lead time play an important role in

sourcing

Orient craft follows SAP analysis

As SAP say scarcity, available and plenty orient craft also follow the same procedure for
its inventory purchasing. Material which is in scarcity will be ordered first and so on.
Store status:

Merchandiser add the item which are required ratio wise and given to sourcing
department and make P.O accordingly for update and check quantity and 2 pcs. are
produced by them for calculating thread consumption for the particular piece. These
trims are sourced by import or export. After the process of matching trims, audit report
is prepared for further continuous procedure and trims are then ready to issue.

Marketing sends BOM to store when order is finalized

The entries are fed in ERP

These entries are reflected in purchase

They are managing there inventory with the help of ERP system. Enterprise resource
planning is such a system in which we can track each and every activity one after
another. And all the activities are related to each other in sequins. This means if first
activity is not done we can’t do the second operation and further.

Orient Craft initially tried to implement SAP system in its unit but some how it could
not work and that system was not successful in Orient Craft unit.

Then after that they introduced the ERP system which is working very efficiently in all
its units.

ERP is a centralized planning system which allows the employees of different unit of
Orient Craft to work as a team and each and every individual can check any status at any
time.

ERP system is very user friendly software. All the units of orient craft including the
entire departments are using this software. And ERP system is Quite less Expensive
then SAP system.
 ERP SYSTEM

Literarily, ERP refers to Enterprise Resource Planning software. In general, ERP is an

industry term for the broad set of activities supported by multi-module application
software that help’s a manufacturer or other business, to manage the important parts of
its business, including product planning, parts purchasing, maintaining inventories,
interacting with suppliers, providing customer service, and tracking orders. Typically, an
ERP system uses or is integrated with a relational database system. In practice, ERP
does not live up to its acronym. It does not do much about planning or resource
planning. , ERP refers to Enterprise Resource Planning software. In general, ERP is an
industry term for the broad set of activities supported by multi-module application
software that help a manufacturer or other business manage the important parts of its
business, including product planning, parts purchasing, maintaining inventories,
interacting with suppliers, providing customer service, and tracking orders. Typically, an
ERP system uses or is integrated with a relational database system. In practice, ERP
does not live up to its acronym. It does not do much about planning or resource planning

It attempts to integrate all departments and functions across a company onto a single
computer system that can serve all those departments’ particular needs. The integration
streamlines internal business processes and improves productivity of a company.

USE OF ERP:

It attempts to integrate all departments and functions across a company onto a single
computer system that can serve all those departments’ particular needs. The integration
streamlines internal business processes and improves productivity of a company.

ERP software offers the following benefits:

1. ERP integrates all aspects of the business processes including: manufacturing,

design, customer services, financial, sales and distribution. By integrating business
 processes and people anywhere in a company, one can enjoy more efficient work
flow and improved productivity.
2. Nowadays, retailers and consumers push for lower prices, better quality and quicker
delivery. ERP implementation shows the determination to head for those directions.
3. ERP provides the right information to the right people at the right time anywhere in
the world, enabling one to improve productivity, enhance decision making and
promote communication between co-workers, customers and vendors
4. For better ERP software, it helps to reduce or eliminate duplicate work, and
automates operational tasks and provides easy access to information. ERP, therefore,
can deliver significant time savings.
5. Advanced ERP software has the ability to be customized to the extent that screens
can be remodelled, fields can be edited and the architecture modified through
progressive installation processes. In addition, advanced ERP software can be
operated in a secured, web-based environment. These features provide flexibility and
convenience in implementation and operation.
6. Some multi-lingual ERP software can perform automatic translation enables almost
every style detail to be viewed in several languages including English, Chinese, and
etc. It improves the effectiveness of communication.
7. Manufacturing companies often find that multiple business units across the company
make the same widget using different methods and computer systems. ERP
standardizes the manufacturing processes and improve quality.
8. ERP helps business process flow more smoothly and improves the efficiency of
fulfilment process. It leads to reduced inventory. Eventually, it decreases the overall
business cost.
9. ERP Systems centralize the data in one place. This eliminates the problem of
synchronising changes and can reduce the risk of loss of sensitive data by
consolidating multiple permissions and security models into a single structure
10. Order tracking, from acceptance through fulfillment
11. Managing inter-dependencies of complex processes bill of materials

At its simplest level, ERP provides a way to integrate all your business process. To get
the most from the software, one has to get people inside their company to adopt the
work methods outlined in the software. If the people do not agree with the method and
the system has no flexibility to be customized, ERP projects will be failed. Therefore,
ERP software should be chosen wisely.

Implementation
Businesses have a wide scope of applications and processes throughout their functional
units; producing ERP software systems that are typically complex and usually impose
significant changes on staff work practices. Implementing ERP software is typically too
complex for "in-house" skill, so it is desirable and highly advised to hire outside
consultants who are professionally trained to implement these systems. This is typically
the most cost effective way. There are three types of services that may be employed for -
Consulting, Customization, Support. The length of time to implement an ERP system
depends on the size of the business, the number of modules, the extent of customization,
the scope of the change and the willingness of the customer to take ownership for the
project. ERP systems are modular, so they don't all need be implemented at once. It can
be divided into various stages, or phase-ins. The typical project is about 14 months and
requires around 150 consultants. A small project (e.g., a company of less than 100 staff)
may be planned and delivered within 3-9 months; however, a large, multi-site or multi-
country implementation may take years. The length of the implementations is closely
tied to the amount of customization desired.

The following are steps of a data migration strategy that can help with the success
of an ERP implementation:

1. Identifying the data to be migrated

2. Determining the timing of data migration
3. Generating the data templates
4. Freezing the tools for data migration
5. Deciding on migration related setups
6. Deciding on data archiving

Process preparation

ERP vendors have designed their systems around standard business processes, based
upon best business practices. Different vendor(s) have different types of processes but
they are all of a standard, modular nature. Firms that want to implement ERP systems
are consequently forced to adapt their organizations to standardized processes as
opposed to adapting the ERP package to the existing processes. Neglecting to map
current business processes prior to starting ERP implementation is a main reason for
failure of ERP projects. It is therefore crucial that organizations perform a thorough
business process analysis before selecting an ERP vendor and setting off on the
implementation track. This analysis should map out all present operational processes,
enabling selection of an ERP vendor whose standard modules are most closely aligned
with the established organization. Redesign can then be implemented to achieve further
process congruence. Research indicates that the risk of business process mismatch is
decreased by:

• linking each current organizational process to the organization's strategy;

• analyzing the effectiveness of each process in light of its current related business
capability;
 • understanding the automated solutions currently implemented.

TRANSPORTATION

Modes and routes for moving inventory throughout the supply chain.

Faster transportation allows a supply chain to be more responsive but generally less efficient.
Less than full truckloads allow a supply chain to be more responsive but generally less efficient.
Transportation can be used to support a firm’s competitive strategy. Customers may demand and
be willing to pay for a high level of responsiveness.

While supply chain design deals with the flow and stocking of goods, transportation
optimisation examines the shipment (flow) process itself. The typical transportation optimiser
will search for opportunities to aggregate compatible orders or splitting orders to fit the
transportation media (e.g. containers), identify pooling points to consolidate orders for long haul
using larger & hence cheaper media and routing of pick-up and drop-off orders to increase
backhaul. The judicious use of or to optimise shipment plan has been generating large savings in
transportation. 10-35% reduction in freight expenses had been achieved through optimal
aggregation/ consolidation, multi-modal multi-leg carrier selection, rating and routing of freight
orders.

TRANSPORTATION DECISION:

• Mode of transportation is the manner in which a product is moved (air, truck, rail, ship,
pipeline, electronic). Each mode differs with respect to speed, size of shipments, cost, and
flexibility.
• Routes are paths along which a product can be shipped.
• In house or outsource the transportation function. Many companies use third-party
logistics providers (3PL) to perform some or all of their transportation activities

Orient Craft have option of both there own trucks as well as the transporters truck. They have
their own set up of trucks. They mostly use their own trucks when goods are shifted from one
unit to another, also sending these good to railway station and airports in Delhi itself.

They usually use transporter trucks when the goods go out of Delhi.

Like Orients Crafts most of the export is done from Chennai and Mumbai. So while carrying the
goods from Delhi to Mumbai or Delhi to Chennai Orient Craft use transporter truck.

Truck rate:- for one trip from Delhi to Mumbai the transporter charge them RS 2500/-
 TRANSPORTATION SYSTEM AFTER EX FACTORY
Dispatch
section

Loading on truck

Orient craft exit gate (ex factory)

Transported Transported through

through OC own local transporter
trucks trucks

Local railway Airport

station

Consignment
transported by
train
Final destination Chennai
Reached to Mumbai or Mumbai by road
or Chennai sea port

Forwarder

Do the necessary
documentation

Loading in vessel/ aircraft (ex

country)
 FREIGHT RATE CRITERIA

Sea air

CBM Kg/ volume

Charges CBM Kg/ volume

Freight

Rates changes according to destination wise.

Important dates

• EXPORTER - delivery date

• BUYER - INDC (in ware house date)

SHIPPMENT MODES

SEA AIR COLLECT AIR PREPAID

Buyer pay Buyer pay Exporter pay

Orient craft do their all the shipments from sea either from Mumbai or Chennai.

Where as they do all the airway shipping from Delhi itself.

Transit time
• By road till Mumbai – normal approx 4 days
Express approx 2 days

• By train to Chennai - normal approx 4 days

• By air to Chennai/ Mumbai – less then one day

FEW LOCAL SUPPLIERS WITH WHOM ORIENT DRAFT DEALS

• OM LOGITICS
• UNIVERSAL FREIGHT LOGISTICS
• GRS CARGO
• TIME LOGISTICS
• CARAVAN CARRIERS
• MUDITA MARKETING
• GRS CARGO

SEA FORWARDS WITH WHOM THEY USUALLY DEAL WITH

• APL
• NYK
• EXPEDITORS
• MAELSH

AIR FORWARDS WITH WHOM THEY USUALLY DEAL WITH

• EXPO FREIGHT
• EXPEDITOR
• VAN PARKER
SELECTING OR ASSESSING TRANSPORTER

• Transit time
• Rate
• Services
• Discount
• Extra services

These are some of the criteria according to which Orient Craft select the transporter.
They take quotations from many transporters and then they do a market survey to check
out the actual rates what is current. Then according to it they compare the best prices
rates and etc then select the best out of them which suits them.

RATES OF UNIVERSAL FREIGT LOGISTICS

ROAD CARGO

Rates for small goods per CBM - RS 625/-

Door delivery at Dronagiri (Mumbai) - RS 1000/-

Local cartage/ (below 15 CBM) - RS 600/-

Extra charges for express service(36 hrs,upto 10 CBM) - RS 2500/-

Extra charges for express service(36 hrs,above 10 CBM)- RS 4000/-

RAIL CARGO

Delhi to Mumbai - Rs. 11/- per KG

Delhi to Chennai - Rs. 12/- per KG

Delhi to Bangalore - Rs. 12/- per KG

Door Delivery Dronagiri - Rs. 2500/-

Local charge - Rs. 600 /-

 ‘N’ form charges (if applicable) - Rs. 500 /- per inv.

• Gross or volume weight whichever is high is levied by the Railway shall be

chargeable weight for cargo.
• In addition to this actual cartage from Mumbai central and Chennai central to
port (Dronagiri/ Chennai Cfs port shall be charged.
• Door Delivery will be extra if shipment is less than or up to 1000kg.

AIR CARGO RATES: ( Ex-Delhi)

All cargo shall be connected by air as per the following tariff of the respective Airlines.

Sector Airliqe Mini Normal +45 +100 +250 +500 + 1000

mum Kgs. Kgs. Kgs. Kgs. Kgs

-
Mumbai Jet Airways 300.00 57.05 34.05 28.65 28.65 28.65 28.65

Indigo. 300.00 55.00 35.00 25.00 25.00 25.00 25.00

Blue Dart 220.00 -44.00 33.00 29.70 26.40 22.55 19.80

Kingfisher 300.00 29.00 28.00 26.75 26.65 25.65 26.65

Chennai Jet Airways 300.00 81.60 45.50 37.85 37.85 37.85 37.85

Indigo. 300.00 76.00 . 46.00 37.00 37.00 37.00 37.00

Blue Dart 310.00 62.00 47.30 44.55 34.60 29.70 28.60

Ban2alore Jet Airways 300.00 81.05 49.50 37.80 37.80 37.80 37.80

Indbo. 300.00 72.00 43.00 34.00 34.00 34.00 34.00

Blue Dart 300.00 60.00 47.30 44.45 41.80 35.20 28.60

Kingfisher 300.00 64.30 34.75 26.65 26.65 26.65 26.65

(THESE RATES ARE AS PER AIRLINES NOTIFICATION AS ON 31.07.2008)

ON-BOARD FLIGHT (Mumbai-sector) shall be charged

FIRST-FLIGHT - Rs. 32.50 Rs. 3/- HANDLING CHARGES EXTRA.

 COURIER MODE / NO AIRWAY BILL

For the morning flight following premium rates (Mumbai-sector) shall be charged

Jet Airways 34.00

Indigo 34.00

King Fisher. 26.65

Blue Dart 36.30 (+500Kg.)

Fuel Charges: @ 72.5% on basic Freight in Blue Dart Airlines.

@ 20% on basic freight in Gati Airlines.

@ Rs. 6/- Per Kg on chargable wt. in Jet Airways.

@ _Rs. 5/- Per Kg. on chargable wt. in King Fisher, Indigo

& Service Tax @ 12.36%

Door Delivery Charges:

Mumbai :- its. 4/- Per Kg or subject to minimum Rs.21001- &

II Rs.5001- for 'N' Form'Charges & Rs. 7501- for without checklist

F or release of consignment will be charged per Invoice.

Chennai :- Rs. 5/- per Kg or subject to maximum Rs. 2,0001- per shipment.

Handling charges Rs. 3/- per Kg.

FORWADER are always nominated by the buyer. He always suggests the

forwarder to the buyer.

When the orient craft logistics department contacts with the buyer nominated forwarder,
the forwarder gives the booking number to orient craft and gives all the details of the
vessel etc

Documents required
 • Certificate of origin
• FOB
• Commercial invoice
• One cop of packing list

The process of booking to ex country takes place in 15 days

Example:

11th April 2008 18th April 2008 22nd April (ex

(BOOKING) country)
( goods received
by forwarder)

• The forwarder will give the booking number

• Forwarder gives book allotment number after 1,2 days.
• Give vessel details
• Do the custom clearance
• They accept only quota invoice in ERP rest every thing.

Normal rates in vessel for shipment - 70 to 85 dollar per /kg/cb/mtr

It depends on volume also. The larger the volume lesser the rates
Few of the containers used by orient craft are:-

Hence transportation plays a very important role in the whole supply chain management.
 LETTER OF CREDIT

A standard, commercial letter of credit is a document issued mostly by a financial

institution, used primarily in trade finance, which usually provides an irrevocable
payment undertaking. A letter, usually from a bank, requesting a person or company to
extend credit to a certain person or company and guaranteeing payment. Most
commonly used in the purchase of good from another country. The letter may be
revocable or irrevocable, but most parties insist on the irrevocable.

Letter of credit is a document issued by a bank that guarantees the payment of a

customer's draft; substitutes the bank's credit for the customer's credit. It is a document,
issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a
specified sum of money under specified terms, usually the receipt by the bank of certain
documents within a given time.
A commitment by a bank or other person, made at the request of a customer, that the
issuer will honour drafts or other demands for payment upon full compliance with the
conditions specified in the letter of credit.

Conditional bank commitment issued on behalf of a customer to pay a third party in

accordance with certain terms and conditions. The two primary types are commercial
letters of credit and standby letters of credit.

It is an instrument or document issued by a bank guaranteeing debt holder payment by

enabling the bond trustee to draw from the bank the full amount of principal and interest
due on each debt payment date.
A financial instrument, issued to a company or person by a bank that substitutes the
bank’s credit for the company’s credit.

The LC can also be the source of payment for a transaction, meaning that redeeming the
letter of credit will pay an exporter. Letters of credit are used primarily in international
trade transactions of significant value, for deals between a supplier in one country and a
customer in another. They are also used in the land development process to ensure that
approved public facilities (streets, sidewalks, storm-water ponds, etc.) will be built. The
parties to a letter of credit are usually a beneficiary who is to receive the money, the
issuing bank of whom the applicant is a client, and the advising bank of whom the
beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be
amended or canceled without prior agreement of the beneficiary, the issuing bank and
the confirming bank, if any. Typically, the documents a beneficiary has to present in
order to receive payment include a commercial invoice, bill of lading, and documents
proving the shipment was insured against loss or damage in transit. However, the list
and form of documents is open to imagination and negotiation and might contain
requirements to present documents issued by a neutral third party evidencing the quality
of the goods shipped, or their place of origin.
Orient craft is such a huge export house that it deal with many buyer at the same time.
So different buyers have their different terms and condition for letter of credit. And in
such case Orient Craft needs to pay some attention in the documentation of letter of
credit.

Orient Craft
(exporter)

Exporter Deals with the

buyer

Negotiations for Payment

Payment terms and

conditions

Both the party agree with the terms and

condition in letter of credit

Buyer liability to follow the

deal

Any misconduct exporter can go to court

and sue the buyer

In HSBC letter of credit following things are there :-

• Documentary credit number - I00406005

• Amount - USD 38,025.85

• Issuing bank - BANK OF NEW YORK MELLON

UNITED STATES
HEAD OFFICE NEW YORK

• Applicant - QVC, INC.

The bank debit the account REF NO

• COMMISSION INR 500.00 I00406005

• SERVICE TAX INR 60.00

 • EDUCATION CESS INR 1.00

• TOTAL INR 561.80

In accordance with the version of the CPU RULES ( issued by the ICC) as specified in
the credit, we have advised, having received the following authenticated
teletransmission from the BANK OF NEW YORK MELLON

SEQ OF TOTAL: 1/3

FORM OF DC: IRREVOCABLE TRANSFERABLE
DC NO: I00406005
DATE OF ISSUE: 06JAN09
EXPIRY DATE AND PLACE: 21MAR09 NEGOCIATING BANK
APPLICANT: QVC, INC.
1200 WILSON DRIVE
WEST CHESTER, PA 19380
BENEFICIARY: ORIENT CRAFT LTD
7-D SECTOR 18,
MARUTI INDUSTRIAL COMPLEX
GURGAON, HARAYANA, INDIA
DC AMT: USD38025.85
ADDITIONAL AMTS COVERED: WITH IN 5 VARIENCE
AVAILALE WITH/ BY: ANY BANK BY NEGOTIATION
DRAFTS AT: SIGHT
PARTIAL SHIPMENTS: NOT ALLOWED
TRANSHIPMENT SHIPMENT: NOT ALLOWED
TAKE CHARGES/RECEIPT/DISP FM:
CHENNAI,NHAVA SHEVA,CLCUTTA OR COCHIN, INDIA
FINAL DEST/DELIVERY/TRANSPORT TO:
US PORT DESIGNATED BY FORWARDER
SHIPMENT PERIOD: LATEST SHIPMENT DATE- 09/02/28
CONFIRMATION INSTRUCTION: WITHOUT
GOODS DETAIL
ITEM NO SKU SKN QVC PO QUANTITY UNIT PRICE

ORIENT CRAFT CREDIT LIMITS

30-45 days amount no limit of amount (continuous basis)
Only one time transaction ( 20-30 lakh)

LC TERMS OF PAYMENT

• AT SIGHT

• 60 DAYS

• 90 DAYS

• 120 DAYS

NOTE- NOW DAYS LETTER OF CREDITS ARE NOT IN USE NOW THE BUYER
PAY EITHER T/T TELEX TRANSFER OR OPEN ACCOUNT

All the details of the goods will be there in the letter of credit.

SHIPPING TERMS: FOB CHENNAI, NHAVA SHEVA, CALCUTTA OR

COCHIN, INDIA
DOCUMENTS REQUIRED:

• Commercial invoice including the manufacturers NAMES, ADDRESS

• One copy of packing list with all the size ratio and cartons dimentios.

• One original copy of forwarders cargo receipt issued to QVC.inc.

• One copy of the country of origin declaration.

• One copy of signed or stamped inspection or survey certificate from: any branch
of intertek testing lab.
Original bill of credit is attached as an enclosure.

BILL OF EXCHANGE

A non-interest-bearing written order used primarily in international trade that binds one
party to pay a fixed sum of money to another party at a predetermined future date.

Bills of exchange are similar to checks and promissory notes. They can be drawn by
individuals or banks and are generally transferable by endorsements. The difference
between a promissory note and a bill of exchange is that this product is transferable and
can bind one party to pay a third party that was not involved in its creation. If these bills
are issued by a bank, they can be referred to as bank drafts. If they are issued by
individuals, they can be referred to as trade drafts.

A written order from one person (the payor) to another, signed by the person giving it,
requiring the person to whom it is addressed to pay on demand or at some fixed future
date, a certain sum of money, to either the person identified as payee or to any person
presenting the bill of exchange.

An annexure is attached