hindalco industries ltd purchase order

7/29/2019 Hindalco Industries Ltd Purchase Order

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INTRODUCTION

ADITYA BIRLA GROUP OVERVIEW

GENESIS:

Aditya Birla Group traces its origin back to the tiny village of

Pilani in the Rajasthan desert, where, late Shri Seth Shiv

Narayan Birla started cotton-trading operations in 1857.

Then one visionary the late Shri G.D Birla set up Indias first

integrated aluminium manufacturing unit at Renukoot, in

1962, backed by captive power plant at Renusagar in 1967.

It further evolved under the dynamic leadership of the late

Shri Aditya Vikram Birla a prominent figure in the Indian

industry, under whose stewardship Hindalco attained its

leadership position in aluminium. Today our Group chairman,

Dr. Kumar Manglam Birla has put together the building

blocks to make Indian business a global force.

The Aditya Birla Group is Indias first truly multinational

corporation global in vision, rooted in Indian values, A US $24

billion corporation with a market cap of US $31.5 billion and

in the league of Fortune 500, the Aditya Birla Group is

anchored by an extraordinary force of 100,000 employees,

belonging to 25 different nationalities. In India, the Group

has been adjudged The Best Employer in India and among

the top 20 in Asia by the Hewitt-Economic Times and Wall

Street Journal Study 2007. Over 50 per cent of its revenues

flow from its overseas operations.


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The groups products and services, offer distinctive

consumer solutions. Its 66 state-of-the-art manufacturing

units and sectoral service span throughout the world.

Entry of Syt. Ghanshyam Das Birla

1916 - First taste of industrial management take over

of sick

cotton mill in Delhi.

1918 - First limited company Birla Brothers Limited.

The real industrial thrust in 1919 with Birla

Jute in Calcutta and 1921. Jiyajeerao Cotton

Gwalior

Birla Jute was established in defiance of

Scottish monopoly.

1923 - Purchase of Kesoram Cotton.

1926 - Orient Paper Mills.

1931-33 - Bharat Sugar, Upper Ganges Sugar, New

Swadeshi Sugar,

New Delhi Sugar.

By 1947 - Assets wroth Rs. 25 crores in 20 companies.

Thereafter1954 - Durgapur Iron & Steel

1957 - Gwalior Rayon, Nagda

1962 - Hindalco commencement of production

1966 - Take over of Indian Rayon


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ADITYA BIRLA GROUP

A truly multinational Indian GroupThe Aditya Birla Group was the first in Indian to venture

overseas, by starting a joint venture in Ethiopia. Thereafter,

over the last quarter century, this group has started 20 very

successful and diversified ventures spread through the Asian

region. It has been declared by Euro money that this is the

only truly multinational group of India.

At present, the group has more than 50 manufacturing units,

producing a diverse range of products, financial service,

trading and computer consultancy. It is also expanding its

activities in the field of telecom, oil refinery, power

generation, copper smelter etc.

Globally the Aditya Birla Group is:

A metals powerhouse, among the worlds most cost-

efficient aluminium and copper producers. Hindalco-Novelis

from its fold is a Fortune 500 company. It is the largest

aluminium rolling company. It is one of the three biggest


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producers of primary aluminium in Asia, with the largest

single location copper smelter.

No.1 in viscose staple fibre

The fourth largest producer of insulators

The fourth largest producer of carbon black

The 11th largest cement producer globally

Among the worlds top 15 BPO companies and among

Indias top three

Among the best energy efficient fertilizer plants

In India:

A premier branded garments player

The second largest player in viscose filament yarn

The second largest in the chlor-alkali sector

Among the top five mobile telephony companies

A leading player in life insurance and asset management

Among the top three supermarket chains in the retail

business

Rock solid in fundamentals, the Aditya Birla Group nurtures a

culture where success does not come in the way of the need

to keep learning afresh, to keep experimenting.

Beyond business Reaching Out

A value based, caring corporate citizen the Aditya Birla

Group inherently believes in the trusteeship concept of

management. A part of the groups profits is ploughed back


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in to meaningful welfare driven initiative that make a

qualitative difference to the lives of marginalized people.

These activities are carried out under the aegis of the Aditya

Birla Center for community initiatives and Rural

Development spearheaded by Mrs. Rajashree Birla.

Beyond business the Aditya Birla Group is:

Working in 3,700 villages

Reaching out to seven million people annually through the

Aditya Birla Centre for Community Initiatives and Rural

Development, spearheaded by Mrs. Rajashree Birla

Focusing on: health care, education, sustainable livelihood,

infrastructure and espousing social causes

GROUP PHILOSOPHY

RESTS ON FOUR PILLARS: CUSTOMERIZE

PEOPLE- IZE

STRATEGIZE

INSTITUTIONALIZE

GROUP VALUES

OUR VALUES ARE NON NEGOTIABLE, THEY ARE NEVER TO BE

JETTISONED, FOR US OUR VALUES ARE OUR WELLSPRING.

THESE ARE:

INTEGRITY

COMMITMENT


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PASSION

SEAMLESSNESS

SPEED

GROUP VISSION

TO BECOME A PREMIUM CONGLOMERATE WITH CLEAR

BUSSINESS FOCUS AT EACH CORPORATE LEVEL

GROUP MISSION

TO DELIVER VALUE FOR OUR CUSTOMERS, SHAREHOLDERS,

EMPLOYEES AND SOCIETY AT LARGE

Aditya Birla Management Corporation Ltd.(ABMCL)

In a strategic move to institutionalize its management

process, the Aditya Birla Group has set up Aditya Birla

Management Corporation Limited (ABMCL) It is headed by

Board of Directors with Mr. Kumar Mangalam Birla as a

Chairman.

It is a Groups apex decision making body and provides

strategic direction to group companies.

The Group has following Achievement to its credit

The worlds no.1 in viscose staple fiber.

The third largest producer of insulator.


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The worlds third largest producer of carbon black.

The worlds eighth largest producer of cement and the

largest in a single geography.

Asias largest integrated aluminum producer.

A globally competitive, fast growing copper producer.

Indias premier branded garments player.

Among Indias most energy efficient private sector

fertilizer plants.

Indias second largest producer of viscose filament

yarn.

Indias second largest private sector insurance

company.

Among the worlds top 15 and Indias top three BPO

companies.

The group has also made successful forays into it and IT

sector and has a significant presence in the Financial

Sector and telecommunications sectors in tie-ups with

giants like Sun Life insurance (Canada) and At &T (USA)

respectively.

HINDALCO INDUSTRY LTD


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Hindalco Industries Limited, the metals flagship company of

the Aditya Birla Group, is an industry leader in aluminium

and copper. A metals powerhouse with a consolidated

turnover of Rs.600, 128 million (US$ 15 billion), Hindalco is

the worlds largest aluminium rolling company and one of the

biggest producers of primary aluminium in Asia. Its copper

smelter is the worlds largest custom smelter at a single

location.

Established in 1958, Hindalco commissioned its aluminium

facility at Renukoot in Eastern U.P. in 1962. Later

acquisitions and mergers, with Indal, Birla Copper and the

Nifty and Mt.Gordon copper mines in Australia, strengthened

the companys position in value-added alumina, aluminium

and copper products, with vertical integration through access

to captive copper concentrates.

In 2007, the acquisition of Novelis Inc. a world leader in

aluminium rolling and can recycling marked a significant

milestone in the history of the aluminium industry in India.

With Novelis under its fold Hindalco ranks among the global

top five aluminium majors, as an integrated producer with

low cost alumina and aluminium facilities combined with

high-end rolling capabilities and a global footprint in 12

countries outside India. Its combined turnover of US$ 15

billion, places it in the Fortune 500 league.


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HINDALCO INDUSTRIES LIMITED

COMPANY PROFILE

Hindalco Industries Ltd. is the Flagship Company of Aditya

Birla Group. The Aditya Birla Group is Indias second largest

business house with a turnover of Rs. 280 billion, andAssets

are valued at over Rs. 265 billion. The group has nearly

72000 employees in 18countries.

Hindalco Industries Limited was incorporated in 1958 and

commercial production commenced in 1962. The Company

was set up in technical collaboration with Kaiser Aluminium &

Chemicals Corporation, USA. Hindalco is today one of Indias

premium corporate, contributing significantly to economic

growth, generating employment and setting high standards

in respect of fulfilling of obligations to all stakeholders. The

Company prizes its Human Capital, and employees have

been reciprocating by turning in a sterling performance for

the Company, year after year. Hindalco has an enviable

record of harmonious Industrial Relations, with not a single

man day lost since the past 30 years on account of industrial

strife. Companys principal products comprise of Aluminium

Ingots, Aluminium Billets, Aluminium Wire Rods, Sheet

Products, Extrusions, Aluminium Foils and Aluminium Alloy

Wheels. The Companys by products include Gallium Metal,

Vanadium Sludge and Aluminium Dross.


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Hindalco Industries Limited, one of the major producer of

Aluminium metal and its semis in the country as well as a

premier flagship company of A.V. Birla group in the biggest

industrial enterprise of Uttar Pradesh. It is a public limited

company in the private sector having about 39000

shareholders. It is the largest integrated Aluminium plant in

India with all its production facilities viz. Alumina, Aluminium

& Fabrication located at Renukoot near Rihand Dam in

Sonebhadra (Uttar Pradesh). Hindalcos power division is

situated at Renusagar about 35 km from Renukoot. In

September 1959, an industrial license was granted by the

Government for setting up an integrated Aluminium plant at

Renukoot, with an initial installed capacity of 20000 MT. The

construction work was completed with 18 months, a record

for a major job of this kind.

The dream of the great visionary Syt. G.D. Birla to locate an

Aluminium plant near Rihand power house came true. The

late Prime Minister Pt. Jawaharlal Nehru, formally

inaugurated the plant in January 1963. From the modest

beginning in 1962, Hindalco has now become an industrial

giant with capacity to produce 242000 MT of Aluminium per

annum.

Renukoot a fast growing & thriving industrial township, which

is now humming with activities & providing all the basic

amenities of modern life to the inhabitants. From being one

of the most backward areas of U.P., it has now carved a

place for itself on the industrial map of India as well as


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World. Lying in the foothills of the Vindhya range, Renukoot

is about 165 km from Varanasi and 154 km from Mirzapur.

The expansion programme of plant from the initial capacity

of 242000 MT took place in the stages during the last thirty

five years. Apart from catering to the internal demand of

Aluminium in the country, Hindalco is also exporting

Aluminium semis to various countries including U.S.A.,

Germany, Japan etc. Renusagar power, a divisionof Hindalco

is the major supplier of power to Hindalco. The power

generating capacity of Renusagar power division has

increased to 575 MW since last year. Now Renusagar is able

to meet the full requirement of Hindalco.

Hindalco is an ISO-9002 company since 1994. Recently in

July 1998 it has also received the certification of ISO-14001

for environment maintenance system. The company has

been able to continuously enhance the quality and range of

the product and provide customer satisfaction.

In 1962 when production started, the company had on its roll

about 900 staff and workmen and the present strength of

employees is about 14000. The office and works site is

located at Renukoot and there are zonal offices at Bangalore,

Bombay, Delhi and Calcutta.

The company is managed by a Board of Director and other

Senior Executives.

Management

Syt. Kumar Mangalam Birla - Chairman

Syt. Debu Bhatacharya - Managing Director


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Hindalco today

Hindalco ranks as one of the largest Aluminium producer inIndia and contributes about 35% of the total Aluminiumproduction of the country. The companys fully integratedAluminium operations consist of the mining of Bauxite,conversion of Bauxite into Alumina, production of primaryaluminium from Alumina by electrolysis and production ofproperzi redraw rods, rolled products and extrusions.

Capacities Present

Power 575 MW

Alumina 4,50,000 MT p.a.

Aluminium 2,42,000 MT p.a.

Rolled products 80,000 MT p.a.

Extrusions 15,000 MT p.a.

Wire rods 50,000 MT p.a.Foils 5,000 MT p.a.

COORPOR

ATE

(RATAN

SOMANI)

SMELTER

HEAD(UmakantBabulal

Agarwal)

POWER

HEADS.v.s

Smyanaray

an)

MEHENICAL HEAD

MECANICAL HEAD

TECHNOLOGY

HEAD

CIVILHEAS

ELECTRICAL HEAD

MECHENICAL

HEAD

TECHNOLOGICAL

HEAD

CIVILHEAD


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Co-generation 37 MW

Joint venture companies of Hindalco1. Indo-Gulf Fertilisers & Chemical Corporation Limited2. Bihar Caustic & Chemicals Limited3. Tanfac Industries Limited4. Mangalore Refinery & Petrochemicals Limited (MRPL)5. Birla AT & T Communications Limited6. Bina Power Supply Company Limited7. Birla Global Finance Limited (BGFL)8. Birla Capital International AMC Limited (BCIAMC)

9. Rajshree Polyfil Limited

HINDALCOS VISION

To strengthen our position as a premium aluminium

company, sustaining domestic leadership and global

competitiveness through innovation, quality and value added

growth.

HINDALCOS MISSION

To relentlessly pursue the creation of superior shareholder

value by exceeding customer expectations profitably,

unleashing employee potential and being a responsible

corporate citizen adhering to our values.

.

HINDALCOS STRATEGY


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EFFICIENCY FOCUS: To be one of the lowest cost producersglobally.

EFFECTIVENESS FOCUS: To continue to remain the market

leader domestically.

GROWTH FOCUS: To purchase value adding growth

opportunities in aluminium.

HUMAN RESOURCE (HR)

Human Resources play a vital role in shaping a healthy and

growing organization. Without doubt, human resources

development has hence been aptly described as the soul

of a vibrant and dynamic organization. The increasing

complexity and problems of managing human resources

places heavy demands on ensuring equal emphasis on all

the sub-systems which play a crucial part in ensuring holistic

development of the human resources. Human Resources

Management has gained immense importance in todaysenvironment of global competition to meet future challenges

in the new millennium. In these days of rapid advancement

in Information Technology and Techno-Commercial aspects

of business, it would be eventually the Man behind the

Machine who would determine which way / direction an

organization goes.Human Resources Development systems have an important

task in achieving the required dynamics to enable any

organization to perform at its peak. The right recruitment

and selection to start with, progressive training and

development thereafter, and, a fair performance appraisal

system gives an impetus to professional and proficientmanagement of HR. There is yet another dimension of HRM


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which is directly related to, and falls within the ambit of

organizational development that deserves major attention

because the character & culture of an organization is

formed by HR of the organization and that will finally decide

the future of the organization.

After said all this, it is imperative to consolidate on the

available human potential and check HR wastages to ensure

organizational effectiveness as it has become a key to

sustain excellence and achieve competitive advantage over

others. thus assumes an even greater relevance in the

existing changing business scenario especially so when there

is a paradigm shift in the Organizations approach towards

Human Resources Management in outlining specific roles.

Without defining HR vision, roles & objectives, an

organization would jeopardize its growth and survival

therefore it is all the more necessary to indigenize the HR

sub-systems for ones own benefit after a close microscopic

scrutiny.

.

HINDALCO HR VISION, MISSION & OBJECTIVES

HR VISION

To provide an enabling environment where employee

competencies are nurtured and harnessed towards

sustainable business growth and leadership.


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HR MISSION

To proactively assess and provide for the HR needs of the

business and customer for the attainment of organizational

goals.

HR OBJECTIVES

To collaborate with and support internal customer of HR

in achieving business objectives through HR servicesviz. effective manpower planning , ensuring harmoniousindustrial relation etc.

To review and redesign the structure of the organisation

with the clarity of roles, responsibilities andaccountability for overall organizational effectivenessand speeding response to emerging businesschallenges.

To develop knowledge and skills of the employees and

groom leaders with functional and businesscompetencies to meet future demands of theorganizational (viz. flexibility and change management).

To benchmark best HR practices in order to enhance

human resource effectiveness. To enhance employee productivity through

rationalization of jobs and manpower optimization.

To promote employee involvement in decision-making,

team working, creativity and empowerment.

To institutionalize transparency by framing, updating

and communicating systems and processes.

To maintain good liaison with government/ external

agencies in order to better serve the organizational

cause. To provide a safe and healthy work environment and

continuously benchmark and upgrade the standards ofsafety and hygiene.

To work towards improving the quality of work life of

employees and the lives of their families.

HINDALCO INDUSTRIES LIMITED


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Organisation Chart of HRD Division

Services directly or indirectly end to Customer Satisfaction.

Satisfaction is a emotional response to his or her prior

experience with and expectations with the benefits provided

by the services of service department of the organisation. It

is believed that satisfaction will influence future. Customers

can experience satisfaction with;

Organisations services, overall

Specific performance aspects of organisations services

Organisations conduct of transaction (delivery of

services, repair visits, complaint handling, etc...)

The kind of relations between employees and the

organisation.

V.P. (HR)

Head, HRDHead

Security &Head E.RHead-Safety

School ( allprinciples)

Medical

services


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Services can be explained with the help of a following cycle

SATISFIED

CUSTOMERS

LOWER

CUSTOMER

CHURN

HIGHER

PROFIT

MARGIN

LOWER

EMPLOYEE

TURNOVER

IMPROVEED

EMPLOYEE

SATISFACTION


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Following model presents the interrelation between customersatisfaction and

Loyalty interrelates. This model advises that loyalty to bemore of an emotional bond, while satisfaction deals more

with functional performance.

The management shall review the organisations quality

management system, at planned Intervals, to ensure its

continuing suitability, adequacy and effectiveness .this

review shall include assessing opportunities for improvement

and the need for changes to the quality policies and quality

objectives.

The input of management reviews shall include informationon:

Customer

Loyalty

Product

Satisfaction

Channel

Assets

Brand

awareness

Emotional BondsPerceived

Caring

Brand

Image

Accessibility &responsiveness

Trust & Confidence

Perceived Caring

Perceived Knowledge


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Results of audit

Customer feedback

Process performance

Changes that could affect the quality management

system Recommendations for improvement

The main objective of the measurement of performance of

the Quality Management System. The organisation shall

monitor information relating to customer perception as to

whether on the organisation has met customer

requirements.

Considering Hindalco industries limited, Renukoot,

emphasises on the benefits of customer satisfaction. The

service departments of Hindalco are :

Recruitment/ Personnel

IT

Building Maintenance

Accounts

Town Admin, Security and Camp Office


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INFORMATION TECHNOLOGY

For ensuring Quality, Service and Information Security, IT

Department has established ITMS based on PDCA model and

with the help of integration of ISO9001:2000 (Quality

Management ), BS 15000 (IT Service Management) and ISO

-27001 (Information Security Management). Hindalco IT

Department is Worlds 1st integrated implementation of 3rd

International IT Standards , which is certified by DNV in Dec

2005. Our main objective is to implement the best practices

and continuously improve upon it.

The DR solution setup at Renusagar ensure Businessapplication availability in case of disaster , which is an on-

line true replica of Database server at Renukoot, results to

zero data loss by implementation of State-of-the-art Metro

Mirror Technology.

Information Security Prerequisites
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The deployment and use of information system in the Group

are governed by the Information Security Policy of the Group.

Upon joining Aditya Birla Group, employees are required to

sign Information System Acceptable Use Agreement

before they can access any of the Groups Information

System.

Access to Information System

Employees will be granted access to Information System

based on business needs. Users will be assigned a unique

identification code (User ID) and password to enable them to

gain access to Information System. The IT department

regularly monitors and audits the usage of Information

System.

IT department generally provide services to the employee in

the form of following:

Setup i.e. Change Calls

Bug i.e. Incident Calls

Information i.e. Information Calls

For solving the employees problem/complaint IT Department

has software called Calls Management System (CMS).

The IT Department has signed two agreements:

Service Level Agreement (SLA) Operation Level Agreement (OLA)

SERVICE LEVEL AGREEMENT (SLA) - This agreement is signed

between IT Department and other Departments that the

complaints will be solved within the specified period.

OPERATION LEVEL AGREEMENT (SLA) - This agreement is

signed internally among employees of IT Department that


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the particular complaint will be solved within specified

period.

BUILDING DEPARTMENT

Building Department looks after Colony Maintenance. It

includes more than 8000 quarters. Building department has

the following functions:

Construction

Routine Maintenance Development

CONSTRUCTION

Construction include jobs like

The job of construction does not exactly deal with the

services that are rendered to the employees.


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MAINTENANCE

Accepts the complaint through:

Online

Telephone Writing

DEVELOPMENT WORKS

Major maintenance problems are considered asDevelopment Works.

Their job is being identified into following categories: Painting

Carpentry

Fabrication

Plumbing

Massionary

ACCOUNTS DEPARTMENT

Every organization has some objectives and whether these

are achieved or not is also monitored. It is possible when all

the transaction evaluated in terms of money and is recorded

in a meaningful manner. The process of keeping these

records is called Accounting and the department that does

it is called as Accounts Department.

The main task of the accounts department is to advise

management on the financial matters and maintain accounts

prescribed under the companies act. A necessary part of this


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function is proper accounting of income and expenses and

assets and liabilities. There are many function in the

Accounts department i.e. Accounting, Audit, Taxation, PF,

Banking, Insurance, Fixed Assets, Cash Receipts Payments,

Budgeting etc.

The Accounts Department performs their function in the form

of service to the employees in the following manners:

1. Gratuity2. Super Annuation3. Reimbursement of Bills

4. Insurance5. Provident Fund6. Ex-Gratia Payment


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CONCLUSION

In our project Purchase Order Procedure in Hindalco Co. Ltd.(Mahan Project),

We have finalised the service indicators for all the service

departments of Hindalco Industries limited.

Today is the buyers market. In the world of globalisation, by

ensuring merely the customer satisfaction, the organisation

can survive but it cannot flourish and compete with the

competitors. For that, it is important to move from customer

satisfaction to customer delight and ultimately to customer

obsession, only then

the organisation can rule the market. There are both

external and internal customers whose attitudes, opinions

and behaviour affect the organisations day-to-day success:

External customers- external customers exist outside the

organisation. This type that comes to mind are end-use

customers, the ones who use or consume the product or

services of the organisation for their own purposes or

production.

Internal customers- employees of the organisation for whom

the service departments provide product, services or

servicing.Stakeholders- are those whose interests are linked with the

organisation. It includes employees, stockholders,

community leaders .

If the internal customers are satisfied, then only it is possible

to attract and retain the external customers.


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Service indicators are basically framed to ensure the

satisfaction of internal customers and developing the culture

where the organisation can ensure the best

LIMITATIONS:

Based on certain organisations restrictions, certain

data cannot be revealed to general mass.

Limited time period.


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How to Create a Formal Purchasing Program

Make sure you're purchasing quality supplies at good prices

by formalizing your business's purchasing.

It's easy to neglect the area of purchasing in your business.

Of course you buy goods and services, but you don't always

plan the purchases as well as you could. As a result, you may

spend more money than they need to, buy goods that aren't

of the proper quality for your needs, or choose suppliers that

don't offer the level of customer service you deserve.

If you fail to devote enough attention to your purchasing,

your cost of doing business could rise to an unnecessarily

high level. As operating expenses increase, profit margins

shrink, you would either have to live with lower profits or

raise your prices, and neither of these choices is appealing.

By keeping your costs under control, you'll be able to keepyour prices at competitive levels and maintain a desirable

profit.

Purchasing Policies

To purchase wisely, you need to buy the right quality and


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quantity of materials or products at the best possible price

and at the appropriate time from the best vendor.

The purchasing process is much more streamlined in smallcompanies than in larger businesses, especially when the

businesses are still fairly new. The owner usually decides

what to buy, when to buy, where to buy, and how much to

buy. As the business grows, however, the owner may no

longer be able to handle this task and will have to delegate it

to others. While a small business probably won't need tocreate an entire purchasing department, it will need to have

a purchasing manager. By selecting one person to manage

all of the business's purchasing activities, you will decrease

the risk of duplicating orders for the same materials.

Purchasing need not be the purchasing manager's sole duty;

in fact, your business may not do enough purchasing to

require a full-time purchasing manager. You should select an

employee who can handle purchasing, as well as the other

duties he or she my already have. This individual should be

able to communicate clearly with your business's suppliers.

Although purchasing duties probably won't occupy all of this

individual's time, there is more to purchasing than placing

orders. The purchasing manager will have to gather orders,

make sure they are complete, and stay within any limits the

company may have set on spending, select an appropriate

vendor, order the goods, check their condition upon receipt,

make sure the invoice is correct, and speed payment of the

invoice by forwarding it to the accounting department.


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Before you delegate the purchasing function to another

employee, you should write out a purchasing policy for your

business. You may even want to create such a policy while

you are still responsible for purchasing, as a guide for

yourself.

The purchasing policy, according to the SBA, should answer

the following questions:

Who has the authority to purchase items for the

company? What items can that person purchase? Are

there any spending limitations?

What are the business's requirements for adequate

supplier competition and what criteria will be used to

select possible vendors?

What is the company's position on the acceptance of

gifts?

Which types of contracts can the business enter into

with successful bidders or vendors?

What is the company's position on conflict of interest

and personal loans from suppliers?

What kinds of information does the company consider

confidential?

What is the procedure for dealing with legal questions?

The Ordering System

The steps your employees and purchasing manager will

follow to request, order, receive and pay for goods and

materials make up your ordering system. A good ordering


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system will help maintain satisfactory supplier relations,

improve cash management, aid in inventory control, and

increase the overall profitability of your company.

The Purchase Order

Once the purchasing manager has received a requisition, her

or she will need to select a supplier and check the price of

the items ordered. After agreeing on a price, the purchasing

manager will send a purchase order to the supplier. This

order is a formal request to the supplier to deliver materials

or supplies according to the terms and prices agreed upon.

Purchase orders, like requisition forms, can help small

businesses keep track of their purchasing activities. Firms

can refer to their purchase orders to see if suppliers have

shipped the correct goods in the correct quantity. They can

also see if suppliers are delivering goods on time. Purchase

orders can also serve as support in any legal disputes if they

arise between you and the supplier.

Although you can write out purchase orders by hand, you

would give a better impression if you used standard multi-

part forms that you can purchase at any stationery store.They should include information such as the type of product

or service you are ordering, the quantity desired, price and

delivery terms. The orders should also have an area for any

additional information. Purchase orders should also include

your company name, address, telephone and fax numbers,

and logo. You can simply write in this information, stamp thisinformation on your purchase orders with a rubber stamp, or


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design and print your own purchase order forms. Purchase

orders should have at least three parts: a vendor copy, an

internal file copy, and an accounting copy.

In addition to the standard purchase order, you might choose

to use two other types: blanket purchase orders and annual

contracts. If you routinely order fairly inexpensive items from

a single vendor, you might want to place a blanket order for

those items with the vendor. The blanket order covers

specific items to be delivered over a specific period of time,such as six months or one year. This type of purchase order

lets you take advantage of quantity discounts and saves you

the time and trouble of reordering small items you need

often. You will also receive a monthly invoice covering your

purchases for a given month, instead of several small

invoices covering each individual purchase.

Annual contracts cover the purchase of a specific product

from a vendor over a period of 12 months. An annual

contract will usually let you fix the price for buying a specific

quantity of a given item over a year. You can also arrange to

have goods delivered as needed, either monthly, weekly, or

on another specific schedule.

Receiving Records

A packing list will accompany orders you receive. Make sure

that the items shipped match the items indicated on the

packing list. Inspect all of the items shipped carefully, paying

special attention to items that appear damaged. Initial the


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packing list to verify receipt and file it in a folder until you

receive the invoice for the shipment. In many cases, you

won't have to send payment with your order; your suppliers

will either include an invoice with the shipment or send the

invoice to you separately soon after sending your order.

When the invoice arrives, check it against the packing list

and the purchase order. Write a check for the appropriate

amount, note the check number on a copy of the invoice,

and file the invoice and packing list.

If you receive any damaged items, or if a vendor sends you

items you did not order, let the vendor know as soon as

possible. The vendor will tell you the best way to return the

items and to receive the ones you actually ordered.

Fill out an internal receiving report and distribute it to those

who need to know when shipments come in, such as the

person in charge of inventory control, the buyer, the

employee requisitioning the items, and the person in charge

of accounts payable in accounting.

Although purchasing is certainly an important task and

deserved careful attention, you will not be able to spend thesame amount of time on all of your purchases, nor should

you. More expensive items, for instance, deserve more

careful attention and consideration than less expensive ones.

The following four considerations will help you decide what

items deserve the most attention, according to the SBA:


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1. Unit cost. The SBA recommends that you give more

attention to costly items than to less expensive ones.

The more money you have tied up in a given type of

inventory product, the more attention you need to give

to that product in your purchasing, even if you sell few

of these expensive items.

2. Extended cost. The SBA points out that some items

may have a low cost, but you may buy and sell them in

high volume. In this case, you may need to give a

higher priority to these items, although their unit cost is

fairly low.

3. Lead time. You need to consider the time to allow

between ordering an item and receiving it. If a low-cost

item has a long lead time, for instance, you would need

to make regular checks on its delivery status. In that

case, the SBA says, you may need priority.

4. Shipment rejection. If there is a high possibility you

will reject an item because of technical problems or

deficiencies in quality, the SBA suggests assigning it a

high priority.

The Costs of Buying

In addition to the cost of goods you buy, you also have to

pay and account for the costs of acquiring and carrying

inventory.

Inventory acquisition costs are costs associated with

generating and processing orders, and include the following:


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Portions of employee salaries and operating expenses

directly pertaining to purchasing, inventory control,

receiving, inspection and accounts payable.

Costs of supplies such as forms, envelopes and

stationery.

Costs of placing orders (telephone, fax, postage, etc.)

Inventory carrying costs usually consist of the following

elements:

Interest charged on your financial investment into

inventory.

Cost of insurance covering your inventory.

Property taxes paid on inventory.

Cost of storing inventory.

Obsolescence and deterioration of items in inventory.


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Buy Wisely

Prices for the goods and materials you buy may fluctuate. If

you find that the price for a given item is rising, do not buylarge quantities of this item thinking that the price will rise

even higher if you wait. Instead, the SBA advises that you

buy smaller quantities of this item, but buy them more often.

You can quickly sell off the items you bought at high prices,

instead of tying up money in overpriced inventory. Keep

buying small quantities as prices return to their normal level.You will save money on your purchases, as well as reduce

demand for the item, "encouraging" prices to drop. Once

prices have stabilized at their normal level, you can resume

buying in larger quantities.

Discounts

Suppliers extend a variety of different discounts to their

customers. Many vendors offer quantity discounts: the more

units you buy, the less you pay per unity. These discounts

can apply to individual purchases or to a specific group of

purchases made over time, as you would make under a

blanket order. Suppliers also offer seasonal discounts that

apply to merchandise being sold out of season. The danger

with buying off-season goods is that they may go out of style

or become obsolete, and never go back "in-season." Vendors

also offer cash discounts that you earn by paying the entire

invoice within a specified time period. If you received an

invoice with the notation "1/10, Net 30," it would mean that


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you could take a one-percent discount from the net amount

of the invoice if you paid within ten days. You would

otherwise have to pay for the entire amount of the invoice

within 30 days.

Dealing With Vendors

Once you have compared prices from a group of suppliers,

you can then select your vendors. Before you place an order

with a vendor, you not only need to compare prices, but youalso need to compare credit terms, emphasis on customer

service, standing in the industry, and other related factors.

If you buy a number of different kinds of products, you may

have to use a variety of vendors. If, on the other hand, a

single vendor can meet all of your needs at reasonable

prices, you may want to give that vendor the bulk of your

business. Do not, however, rely solely on this vendor. You

should keep in contact with other vendors, and watch for

new ones. It's a good idea to be on good terms with more

than one supplier. If your primary supplier ever fails to ship

goods on time, suspends operations because of some natural


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disaster, or starts offering poor service, you will have other

sources to use as back-up.

By using a few different sources of supply, furthermore, youwill build more credit than you would if you used only one.

Your primary supplier may also offer you better discounts or

otherwise try to win all of your business.

Evaluating Suppliers

You not only need to evaluate suppliers before you place an

order, but you also need to evaluate their performance

constantly. Consider the following points when you evaluate

a supplier's performance:

Timeliness of deliveries

Completeness of orders shipped

Quality of items shipped

Quality of customer service

Competitiveness of price

Previous performance with similar orders

Strength of financial condition

Ability to meet design specifications

Expertise of sales representatives and technical staff

Locating Suppliers

Before you can approach a supplier, you need to know where

to find them. You need to be aware of where you can find

suppliers both before you begin business and after you have

started. Keep looking for new suppliers. To look for suppliers


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in your area, search online and consult the Business-to-

Business Yellow Pages and your local Chamber of Commerce.

To broaden your search, consult websites, publications and

associations pertaining to your industry; these sources

should be able to give you a number of leads.

Many trade associations and publications publish directories

listing suppliers to their industries. If you require industrial or

mechanical equipment, consult manufacturers' directories

such as the Thomas Register of American Manufacturers.Finally, talk to your employees. They may know of excellent

suppliers you might use..


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HINDALCO BARGAWAN POWER PLANT (ALUMINIUM)

ACKNOWLEDGEMENT

A Summer Training is a combination of views and ideas and suggestions

and contribution of many people. Thus, one of the pleasant parts of the writing.

This report is the opportunity to thanks those who contributed toward its

fulfillment.

I am thankful to MR. SHAILENDRA SIR (HR MANAGER) for his vital

inputs and valuable suggestions and continuous guidance, which have gone a

long way in providing necessary impetus to our efforts in consummating this

report.

My sincere thanks to his for providing with all the relevant information

for completion of my project.


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My interaction with Company was immensely pleasurable and it was an

honor to have been a small part of this training.

Last, but not the least I am thankful to all my co trainees without whom

my time at company would not have been as pleasurable.

AMRITA SHARMAM.B.A. 4TH Sem.

PREFACE

It is well evident that work experience is an indispensable part of every

professional course .In the same manner practical training in any organization is must

for each and every individual who is undergoing management course.

Without the practical exposure one cannot consider himself or herself as a

qualified capable manager. During the training period the student learn through hisown experience, the real situation of the corporate world and to put his theoretical

knowledge into practice. This experience is very valuable for the student and plays a

leading and an important role in the career of the student.

Hence to fulfill this requirement, I had completed my 45 Days in HINDALCO

Ltd.


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Entering in an organization is like a stepping into altogether a new world. At

first everything seems to be strange and unheard but at the same time when the time

passes one understands the concepts and working of the organization and thereby

developed professional relationship.

Initially, it felt as if classroom study was just theory and have no relation in any

concerns working but gradually it is realized that all the basic fundamental concepts

studies are linked in one or the other ways to the organization. But how and what can

be done with fundamentals depend upon the intellectual and applicability of the

individuals. It is just a matter to modify the theory so as to apply it to the given

practical solution.

CERTIFICATE

This is to certify that MS. AMRITA SHARMA (4TH

Sem.) Completed her training and submitted a


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project on Purchase Order Procedure in

Hindalco Co. Ltd." in partial fulfillment of the

requirement for the degree of Master of

Business Administration of Dr. Hari Singh Gour

University Sagar with his truly and honestly

observed inferences during his training..

I wish him bright future in his career.

Internal Examiner External Examiner

Signature of Head of Deptt.

BIBLIOGRAPHY

Website:

1.www.google.com

2.www.hindalco.com

3. en.wikipedia.org/wiki/Renusagar
http://www.google.com/http://www.hindalco.com/http://www.google.com/http://www.hindalco.com/


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CONTENTS

PREFACE

ACKNOWLEDGEMENT

CERTIFICATE

TRAINING CERTIFICATE

CHAPTER NAME PAGE

NO

INTRODUCTION ABOUT ADITYA GROUP


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INTRODUCTION OF HINDALCO

HISTORY

VISSION & MISSION

HR OBJECTIVE & VISSION

HINDALCO STRATEGY

INFROMATION TECHNOLOGY

ACCOUNT DEPARTMENT

PURCHASE ORDER

HOW CREATE PURCHASE ORDER

PURCHAING POLICIES

RECEIVING ORDER

BUYING ORDER

SUPPLYING ODER

LIMITION

CONCLUSION

BIBLIOGRAPHY

hindalco industries ltd purchase order

Documents