Telco JSR

Execution of Export Orders from TELCO, JSR
EXECUTIVE SUMMARY
The Exports & Spare Parts Division of Telco, Jamshedpur deals with the Procurement, Packing & Despatching of goods that include Complete uilt !nits "C !#, Completel$ %nocked Down &ehicles "C%D# and Spare Parts' The Export (rders are sent to the Telco, Jamshedpur plant from the Telco )um*ai, +ead office ',t is the Telco )um*ai office that receives orders, negotiates and determines the place and terms of transport with the customers and also sets the annual forecasting demand for the units' This is then sent to the office at Jamshedpur for actual processing of the order & despatch of goods' ,t is here that the goods are either manufactured or purchased from suppliers and then after proper inspection and packing the goods are sent to )um*ai or Calcutta office from where the$ are then shipped to the re-uired destination' This report *rings to light the different activit$ that includes the procurement, packing and despatch of goods' ,t also shows the different t$pe of forms like the .etter of Credit, ,nvoice, /0'1 & /0'2 forms and other documents' That goes into the actual da$3to3da$ dealing within the department and also *etween the different departments for the Execution of the Export (rders'
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TATA ENGINEERING AND LOCOMOTIVE COMPANY LTD. (JAMSHEDPUR)

Situated in the cit$ of Jamshedpur in South ihar, *est raddling over 567 acres of land is the mother of the Tata Engineering & .ocomotive Compan$, the /utomo*ile 8ront runner in ,ndia Toda$' The Compan$9s +ead (ffice is at )um*ai while its works operator at three locations: Jamshedpur, Pune "where operation commenced in 4;<5# and .ucknow "where production started in 4;;=#' Telco manufactures and markets the widest range of commercial vehicles in ,ndia, extending from +eav$ Commercial &ehicles to .ight Commercial &ehicles' Toda$, with passenger vehicles added to its range, Telco is the most comprehensive /utomo*ile manufacturer in the countr$' ,n ,ndia, Telco9s vehicles are sold and serviced through a network of ;1 Dealers and >; ranch Dealers' /ltogether 2;6 strategicall$ located service centers exclusivel$ for commercial vehicles and 41> service centers exclusivel$ for passenger vehicles meant for the re-uirements of the whole range of Tata vehicles' ,n addition to the service the personnel are located at 27 service centers, countr$wide' ,t is this extensive service network catering to the after sales needs of customers that ensures enduring lo$alt$ for Tata vehicles and sets us wa$ a*ove competitors on the export front, when competing with ma?or glo*al pla$ers, Telco has developed a si@ea*le customer *ase in <7 countries, including sophisticated European market' The fact that Telco vehicles are the popular choice in certain segments of the ,nternational )arket under scores the Aualit$, Dura*ilit$ and 0uggedness of Tata &ehicles'
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ALL YOU WOULD LIKE TO KNOW ABOUT TELCO

,n 4;11, Tata Sort S .td, decided to take over a new compan$ to manufacture steam .ocomotives, .ocomotive *oilers and other Engineering products' Bith this in view the East ,ndian 0ailwa$s Tatanagar shops were ac-uired on 4st June 4;15 & Tata .ocomotive & Engineering Compan$ .td' as it was called then, took shape' Colla*oration with %rauss )affei of )unich, Best Cerman$ in 4;57, saw the introduction of Steam .ocomotive in 4;5=' ,n 4;51, Production of Diesel commercial vehicles commenced under an agreement with )Ds' Daimler Tata )ercedes en@' /C of Stuttgart, Best Cerman$ and
en@truck out' / colla*oration with !siness Emmile
+enricot of elgium "4;5<# and Daimler en@ "4;56# helped in esta*lishing the Steel & /llo$ ,ron foundr$' The 8orge came up after an advisor$ colla*oration with Carringtons "!'%#' Telco also took up manufacture of Paper & Pulp machineries *etween 4;<4 to 4;<; %arlstaad )eekanlska of Sweden & Diesel shunters were also produce *etween 4;<1 E>=' ,n 4;<4 E Telco diversified into the manufacture of earth moving e-uipments in technical colla*oration with Paul &+arnischfeger Crop' "!S/# and Tata P & + Excavator9s production commenced'
,n 4;<5ETelco extended its operations to Pune with plants in Pimpri & Chinchwad E where a new manufacturing plant and a machine tool division came up respectivel$' The >79s saw Telco9s "after the colla*oration with en@ ended in 4;<;#
indigenousl$ designed and developed E semi forward control vehicles roll out & Direct ,n?ection Engines *eing introduced' ,n the 679s Telco Bent in for large3scale !pgradation of Technolog$ &its various products' The new high3pressure )oulding line in 8oundr$ & the 8orge (uter Complex "new# are instances of the endeavour to enrich the technolog$ *ase of the compan$' ,n colla*oration with )essrs' +itachi of Japan E Telco in for the manufacture of +$draulic Excavators' Telco has also indigenousl$ designed, developed and marketed the Tata Bheel .oader, TB. 272< and Tata /rticulated Crane T/C =7 add to its range of construction E-uipments' The Pune plant diversified into making of .'C&9s like 17>,<76 and then Tata )o*ile =7< and later on the Tata Sierra, Tata Estate & Tata Sumo' / new plant in .ucknow has also come up3there*$ increasing the installed production capacit$ of Telco' /t present the .ucknow set up is limited to assem*l$ of vehicles *ut will soon *e gearing up for increasing its manufacturing capa*ilities' /t present Telco is operating under two *usiness units as /utomo*ile usiness unit and Construction E-uipment usiness unit and crossed over
>=77 crores turnover during the financial $ear 4;;53;<'

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TRUCK DIVISION
The Truck division is where the final chassis of the automo*ile gets assem*led' This Division is *eing fed *$ division like the Engine and /xle division, which aggregates of engines, axles, steering gear *ox and also the 8orge Division, which supplies the spring leaves for mounting axles on the chassis' The 8rame or the load carr$ing structure is made in the frame shop located in this division and the cowl "S8C & .P# t$pes is provided *$ the cowl shop which uses modern Car*on dioxide and spot welding techni-ues for the fa*rication of the cowls' To cater to all press component re-uirements for the cowl or the frame, is a press shop where mechanical and h$draulic presses ranging from 47 tons to 5777 tons, produce stampings like the long mem*er, cross mem*er, engine hood, oil sump, clutch housing cover, doors and roofs of ca* ?ust to name a few' The 5777 tons press which is produce long mem*er though operation on a set of *lanking and *ending dies weighing over 17 tons 'The operation of this press is an interesting feature of Truck Division /d?acent to the cowl shop, is a sophisticated FCentrali@ed Paint shopG "(ut up recentl$ in colla*oration with +aden EDr$ssis !'%#'This provides a ver$ high class of finish to the cowls *$ the user of electrophoretic paint technolog$ 'The walking *eam line for cowl fa*rication and the cowl conve$orised fitment line are new addition to this division in a *id to improve the productivit$ of cowl manufacturing '
The assem*l$ line, which can produce 427 chassisDda$, has now *een supplemented *$ new assem*l$ line E made on modern material handling principles and e-uipped to produce special vehicles also' /mong the other facilities of Truck Division, are: 3 a# Tool room for repair of press tools' *# Car*on dioxide , arc & resistance welding e-uipments' c# Pre3Treatment, Painting facilities like washing machines, process conve$ors, dip & spra$ painting *ooths, *anking ovens etc' d# 0oad testing facilities like the Test Track for rigorous testing of the chassis after assem*l$'
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ENGINE DIVISION
Engine Division, as the name suggests, is involved in manufacture of Engine and Cear ox' 0aw materials to this division comes in the form of casting
like c$linder head, *lock, clutch housing, oil pump oil cooler and gear *ox casting or forging like crankshaft, camshaft and connecting rod, rough and precision finish machining operations are done on them to produce components with close tolerances essential for engine assem*l$' /ll the gear are manufactured in this Division *$ a variet$ of gear manufacturing g operation like gear shaping, gear ho**ing gear shaving operation is also done here some t$pical, precision operation done in this division are: 4# Crank Pin, milling, grinding' =# Cam Crinding 2# +oning of C$linder *lock *ores' 1# roaching of con3 rod cap'
/ll the manufactured components are routed to either the engine assem*le or gear *ox assem*l$' The gear*ox, after assem*l$, finds its wa$ to engine assem*l$ where ultimatel$, the engine is assem*led on /'C'&'S "/utomatic guided vehicles# and then sent for' Testing on mechanical or electronic test *eds, where the engine is checked for load performances speed & smoke emission' The various manufacturing operations can *e divided into the following shop:
>
4' Engine shop E /ll engine components like crankshaft, camshaft, c$linder *lock, c$linder head, con rod & engine assem*l$ and testing' =' Cear shop E /ll gear components of gear*ox and C S3 17' 2' Tool room with ?ig *oring facilit$' 1' +eat treatment including Hew +eat Treatment shop for continuos car*oni@ing of Cear components' /mong the man$ facilities availa*le in Engine division are: 3 a# CHCDHC machines for crankshaft, gear, c$linder *lock like .andis, Haxos3 !nion, uderus, C8)' *# Transfer lines like +enschel 4 &44 for c$linder head & SP)S for lock & crankshafts' c# Sophisticated testing e-uipments for checking gear parameters and surface finish, pneumatic gauging e-uipments for checking dimensions for *ores, and computeri@ed e-uipments for testing of Engine performance'
AXLE DIVISION
The /xle Division is located partiall$ in the inner and partiall$ in the outer complex' The manufacturing activities of the front and the rear axle,the propeller shaft and the steering gear *ox ,king pin,*oring and pad hole drilling are critical operations performed on the front axle,precision machining operations are also carried out on stu* axle, another critical component of the 8ront /xle' Perhaps the most critical component *eing manufacturing in this division is the steering gear *ox assem*l$' The machining operations on the steering worm and nut re-uires a ver$ high class of finish through operations like grinding' The rear axle housing which comes as a casting from 8oundr$ is also finished machined here on transfer lines like the +eller 4 and +eller =' /mong the critical operations is the *oring of the rear axle inner *earing spaces' The CHC Hissin does a series of machining operations including *urnishing on the rare axle tu*es that are press fitted into the housing to make up the rear axle' The propeller shaft which is a seamless tu*e procured from Tata Tu*es, needs to *e d$namicall$ *alanced on the sophisticated SC+EH% *alancing machine which also, is a ver$ interesting operation to note' The front axle and rear axle are assem*led here on /'C'&'S or /utomatic Cuided &ehicles *efore the$ are sent over to Truck Division for assem*l$ on the chassis'
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FORGE DIVISION
The sprawling fore division *egan as a small plant *ought over from the ,ndian 0ailwa$s with ?ust a few steam hammers and *elt drop hammers' /fter entering in a colla*oration with )essrs'Carringtons 8orge "!'%'#, Telco procured mechanical forging presses and pneumatic hammers to take up production of variet$ of forging' The present forge is divided *etween an inner and a new "outer# complex' / variet$ of forging like the Camshaft, Crankshaft, 8ront /xle, Stu* /xle, Con 0od, Pitman /rm, evel Cears ,Crown Bheel lank ?ust to name a few ,are *eing produced in this division' The 8orge outer complex produces the front axle and the crankshaft on full$ automated %urimoto and Hissei lines respectivel$' /n ela*orated material handling s$stem right from feeding in the raw material in to the furnace "*$ means of a walking *eam conve$or#to transfer from one mDc 'to the other *$ manipulators ,makes this a ver$ high productive shop and is a treat to watch when in operation' Some t$pical mDc s' /re DC317+ hammer, =777 ton %urimoto Press, 677 ton *anning press, 477 ton anning press in a new forge complex' The
<7773ton )axi press in the inner complex is the press with the highest tonnage capacit$ in Telco' The spring shop in this division produces the spring leaves "a*out 427 sets per da$# which are sent over to the Truck Division for mounting the axleIs on the frames'
(il fired, rotar$ hearth furnaces are used for heating the *illets to forging temperatures' / heat treatment shop with annealing furnaces, help in producing forging with improved machina*ilit$ characteristics for su*se-uent machining operations'
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FOUNDRY DIVISION
The 8oundr$ Division caters to the re-uirement of *oth the /utomo*ile & Excavator casting from the thin walled to the heavil$ cored casting, the foundr$ of Telco can *oast to *e one of the most advanced captive foundr$, producing casting *$ Creen Sand moulding process' The castings are of allo$ed & unallo$ed castDCre$ ,ron, spheroidal graphite and low car*on & allo$ steels' The manufacturing facilities include the high pressure )oulding line from %unkel Bagner for manufacturing of high -ualit$, high integrit$ castings with e-uipments like &acupress moulding machine with a production rate of ;7 mouldsDhour 'The entirel$ automated line has an automatic sprue E cutter, vent driller, core setting device & pouring machine with metal stream inoculator, sand preparation unit with sand mullor of 477 TonsDhr'J complete with compati*ilit$ controller, /uto3water addition and a sand cooler' There are other moulding lines & and a semi3automatic moulding line E the C&3<8 for S'C' ,ron castings as a rate of =7 mouldsDhr, and the 23part moulding line for c$linder head castings and other conventional moulding lines with ?olt s-uee@e moulding machines' /rc furnaces & induction furnaces of various capacities, for melting and the C8 converter for converting C',' to S'C' ,ron' Shell cold *ox, (il sand, car*on dioxide and no3*ake processes in core making machine like Shalco Core lowerD0oper Berke core shooter and cold *ox *$ Tata3=77 core
4=
*lowers make cores'

There is also the 0ear /xle tu*e plant for swaging of 0ear /xle after induction heating of tu*es' The pattern shop of 8oundr$ produces the complicated patterns made of wood, metal and areldite' To ensure proper metallurgical control of castings there are testing e-uipments like rinellD0ockwellD&ickers Testers for hardness, high
magnification metallurgical microscope' &acuum spectrometer, ultrasonic Camma ra$ & HDT test e-uipments & )axila* for metal composition control' Excavator Division had started making of mechanical Excavators and Cranes in colla*oration with )Ds' +arischfeger corp' "!'S'/'#' The 1 models manufactured were 245D2=7, <55 , ;55/ & 4755 ' The P & + colla*oration ended in 4;;>' Telco has made =777 mechanical Excavators and Cranes of these models so far' Telco went in for colla*oration with )Ds +itachi Construction )achiner$ Co' .td' "Japan# for manufacturing of Tata +itachi +$draulic Excavator in 4;61' The !+ series of Excavators, !+3762 "=7 ton shove D *ackhoe#, !+ 464 "17 tons# !+3 =<4 "<7 ton#, !+3 574 ";7 tons# and %+3577 "477 Tons cranes# were produced in Telco for the next 5 $ears' Since 4;;73 the division started manufacturing a new of EK3series of Tata +itachi machines *$ 4;;= < models of EK 3<7 "< ton # EK3 477 "47 Ton ShovelD *ackhoe# EK3=77 "=7 Ton Shovel EK3177 " 17 Ton Shovel ackhoe #, Ex E277 " 27 Ton ,
ackhoe # EK3477 "47 Ton# had *een introduced '

42
(ver the last four $ears, the division has further diversified with the introduction of indigenousl$ designed & developed Tata Bheel loader "TB. E 272<#, / Tata /rticulated Crane "T/C E=7# & Tata 8riction Crane T8C3=67' The division has *een renamed, as Construction E-uipment usiness !nit of Telco' The other products on the anvil are the T ., T)K &T). models' The manufacturing facilities include 8a*rication, Cutting, .ight machine shops and +eav$ machine shop, Cear shop, +DT' 8a*rication facilities t$picall$ Car*on dioxide are used for welding' 0o*ots are availa*le for fa*rication of the frame, car3*od$, *oom etc' of the Excavator' The cutting of plates are done in one %oike3 Sanso CHC3(x$ flame and cutting machine & is a ver$ interesting operation to note' The light machine shop caters to the re-uirement of the gear *ox components, pumps ass$, swing ass$, 8ront idler ass$, Centre ?oint ass$' There are a num*er of CHC machines like the Higata machining center, Pfauter gear +o**er, )urata Barner Swase$ for tunings, *oring and renaming operation, & S CHC355'
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CAPITAL EQUIPMENT MANUFACTURING PLANT ENGINEERING/ GROWTH/MB/CTR

Crowth & )Dc' uilding Division as name suggests, takes care of the
infrastructural growth oriented facilities from making of ?igs and fixtures, press tools to new machines, cranes, washing machines, cove$ors etc' all come under the purview of C& ) ' To help the division in this diverse range of activities, the departments are Central Tool 0oom, Crowth & E-uipment Design, Jig & Tool Design' )Dc' uilding & reconditioning' /mong the achievements of this division is manufacture of /'C'&'S, "/utomated Cuided &ehicles#' Bhich are now *eing used extensivel$ *$ man$ of the assem*l$ lines in transporting enginesD axles etc' from one workstation to the other' This division also *oasts of a sophisticated CHC )/C+,HE S+(P where machines like the (erlikon " 13 axes CHC#, Higata )achining Centre " 5 a3 xes #, S,P3Jig oring,Cart Leiss Coordinate measuring mDc, S317 Studer E CHC grinding mDc , and the Scheisis Hassovia ED) mDc help in the manufacture of precision components re-uired for dies & other tooling' The )Ds uilding & reconditioning section caters to the various machine
and reconditioning re-uirements of the production shops of Telco'
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PLANT ENGINEERING BASICALLY CONSISTS OF THE FOLLOWING THREE AREAS

4# (verhauling and !pgradation of +eav$ plant and e-uipment' =# 0esisting & installation of old and new machiner$ like CHCDSP)' 2# 8a*rication and pro?ects and change in la$outs' 1# ,mplementation of pro?ects and change in la$outs' Ov !"#$%&'() +eav$ plants like <777 T )axipress, 17,777 )3%g +ammers, Shot *lasting machines & furnaces meant for 8orging & +eat Treatment applications are regularl$ overhauled & updated to cater to the needs of improved productivit$ & availa*ilit$ of plants' E(T Crane9s upto 17 tones capacit$ are regularl$ overhauled & updated throughout Telco' R *&*+&'( , I'*+#%%#+&-') The group is engaged in installing and commissioning of new CHCDSP) machines mostl$ in /uto Division areas '/part from this, the group caters the need of resisting of plants for various change in pro?ect la$out ' F#.!&/#+&-') +eav$ fa*rication of 8orging furnaces and similar e-uipments are done in Ehouse in two 8a*rication shops' /part from this the group caters to the entire need of Telco Jamshedpur for standard fa*ricated items & e-uipments re-uired as production aids & for material handling' The group activel$ participates in modification & installation of various structural ?o*s'
4<
ENGINEERING SERVICES DIVISION

The support services to all manufacturing shops in terms of providing electricit$, compressed air', air conditioning industrial gases etc' is the function of the Engineering Services Division ' =3Stage Dou*le /ction Compressors of Consolidated Pneumatic and %irloskar Pneumatic and located a various points of Telco, provide compressed air to the plants at 477 p's'i pressure for a variet$ of uses in )DcIs' for control and actuation' The DC Station provides stand *$ support for electrical power re-uirement *$ means of 8u?i Diesel sets "6 nos' of 1ms each#' /nd the recentl$ installed Bartsila Diesel sets "from Sweden E 2 nos' 'of 1ms each#' /part from these, the various other departments under Engineering Services are the: 3 4# Central Electrical 0epair shop, which caters to all repair and winding work on electrical motors, used all over the plant' =# Thermal engineering which looks after the re-uirement of industrial gases and air conditioning' 2# Telephones E responsi*le for all telecommunications' 1# Town Electrical and Pro?ects 5# Power Suppl$ Department, which receives and distri*utes power from SE and D&C to the various divisions'
4>
OTHER AREAS
Production EngineeringEProvides support services to production
departments in the form of tools planning & procurement, Transport Production planning & control' Technical Services like standardi@ation' Aualit$ /ssuranceDTA)EThis function is an integral part of our manufacturing activit$' Ever$ department concerned with manufacturing some componentDtooling etc' has to *e responsi*le for Auantit$ and Aualit$ /ssurance is the division that monitors -ualit$ in all the divisions' Total -ualit$ )anagement Division has *eet set up to implement -ualit$ standard in all divisions conforming to ,S(3;777' This has ena*led Telco to get ,S(3;777 certification' P./HH,HC E /ll planning activities of the manufacturing divisions come under the Central Planning' This Division undertakes facilit$ & infrastructure planning, la$out, material handling, planning & procurement of e-uipment, machine, makes E M)ake of u$9 decisions & prepares ill of )aterials &
estimateDprocess sheets for various manufacturing departments' OTHER IMPORTANT AREAS ARE THE Engineering /udit E which is responsi*le for Energ$ conservation & condition maintenance on a works wide *asis' udget control E /ssessing D 8inali@ing udgetar$ re-uirements for various procurements done *$ the compan$'
P'S'D "Central D Divisional# E carries out ( & ) studies, method improvement' Time stud$, )ethods stud$, )anpower planning & wage settlement, Efficienc$ & onus calculations & Productivit$ improvement
activities for the various Divisions'
4;
TELCO0S PRODUCT RANGE 123 T" MCV #'4 HCV PRODUCT RANGE'
MODEL T/T/ 4547' T/T/ 4=47' T/T/ =14<' T/T/ =54<'
TYPES OF VEHICLE T0!C%' T0!C%' T0!C%' T0!C%' T/H%E0'
T/T/ 4=47 .P' T/T/ 4547 .P(' T/T/ 4242 .P('
!S' !S' !S' LCV PRODUCT RANGE)
MODEL T/T/ 17> T/T/ <76 T/T/ <7;
TYPE OF VEHICLE &/HS' &/HS' &/HS'

=7
CONSTRUCTION EQUIPMENT RANGE +$draulic excavator' +$draulic crane' )echanical crane' /rticulated crane' Bheel loader' JSR <47 4=47 4547 4<4= 4<4= =54< Tata Sumo' PUNE Tata )o*ile Tata Sierra Tata Estate LUCKNOW 4547 4<4= Tata Sumo
=4
FUNCTIONS OF SPARE5 PARTS DEPARTMENT

Service division was esta*lished in 4;51 at Telco keeping in view the growing demand for genuine spare parts a separate Spare PartsD Export department was esta*lished in 4;>79s' Spare parts department comprises of: Sales Technical Barehouse Despatch Excise /nd the activities in the spare parts department starts when the order from a customer is received at Tata ,nternational )um*ai and the order registered at Export JS0' Sales section' (rder received from customer ma$ *e of different t$pes: Casual (rder: These are placed as and when re-uired *$ customers' )ode of despatch is either Sea D /ir freight ' /nnual Demand Schedule: The order is placed each $ear on 4 st of (cto*er'
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ORDER TYPES
VEHICLES OFF THE ROAD (VOR)) )aximum of > da$s time to *e taken for export of spare parts after order is made *ut usuall$ this doesn9t take place' Hormall$ it takes 4734= da$s to reach SP to final part of destination' Barrant$ Time: Compan$ to *ear all the cost of damage to the vehicles for = $ears' 0egular (rder: %eep extra alwa$s for the time in need' ,n this t$pe of order Pune will suppl$ spare parts for Pune vehicles and JS0 will suppl$ for JS0 vehicles and Thane for Thane vehicles' NO CP= paid#P' Scheduling /greement' 0ush (rders "computer will create Challan then & there#' Su*se-uent 8ree Deliver$: Stock will not get return' Challan will *e produced' Ho invoice will *e given' Credit 0e-uest' 8ree 0eplacement "Barrant$ D Coodwill# etc' '( items "dut$ paid#' O /01 Shop made items "non3dut$
=2
0elease an order if there is an$ discrepanc$ in the order sent earlier to the customer in order to rectif$ the mistake' 8or eas$ reference of spare parts, a part num*ering s$stem is followed' The order received is fed into the computer s$stem and it checks whether the part demanded is the master date' ,f the item is not present in the master date it is referred to the Technical section to feed the items in the computer' The master date is checked to see whether the part demanded is in stock or is not is stockQ then the Procurement division is informed' +ere the items ma$ *e shop made items or *ought out items' 8or shop made items excise dut$ is not paid as the part is manufactured in Telco, Jamshedpur itself' 8or *ought out items case is ?ust reverse , dut$ is paid' There is a 473 digits , 443 digits or 4=3 digits part num*ering s$stem is followed' The 473digit s$stem is used on earlier model and has *arrel of 2,2,=,=' The 4=3digit s$stem is similar to 473digit s$stem except the first two *arrels are of 1 digits' The 443digit part num*er is meant for standards' The items are stored in warehouse' There is different warehouse for dut$ paid and non3dut$ paid items' This is to distinguish *etween the two items at the time of despatch' Packaging is done in the warehouse and the packed items are *rought to the despatch point, which is the gate of warehouse' illing takes over from this
point and num*er of documents is generated and the goods reach their final destination'
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TELCO SPAREPARTS JAMSHEDPUR
Divisional )anager
Sales
Procurement Section
Technical Section
Excise Section
Barehouse
CDS
/D0C
Claim DP "BD+# HDP "BD+#
Shop ,tems
'(' ,tems
CDS /D0C C./,)
3CEHE0/. S/.ES' 3 /0)R D0/TE C(HT0/CT' 3 C./,)'
S+(P ,TE)S3 S+(P )/DE ,TE)S' '(' ,TE)S 3 0(!C+T (!T ,TE)S' DP "BD+# HDP "BD+# 3 D!TR P/,D B/0E+(!SE' 3 H(H3D!TR P/,D B/0E+(!SE'
=5
EXPORT ORDER PROCESSING FLOW CHART'

Sales D Service team a*road place an order to T/T/
,HTE0H/T,(H/., )!) /,' /t Tata ,nternational )um*ai three steps are followed' 4' 0egister the order' =' Split the order' a# Thane' *# Dighi "Pune#' c# Jamshedpur "through Tata net# Then if the spare parts are availa*le at Jamshedpur onl$ then rest of the procedure follows:
(0DE0 0ECE,&ED R SP/0EP/0TS DEPTT, TE.C( /&/,./ ,.,TR (8 SP/0EP/0TS /T B/0E+(!SE
C+/../HS P0EP/0ED T+EH C+/../H B,T+ T+E T/C ,S SEHT T( B/0E+(!SE' )/TE0,/. SEHT T( DE/.E0S T+0(!C+ T0/HSP(0TE0S D 0/,.B/RS 4' =' 2' 1' )aterial picked from the warehouse' )aterial given for inspection & packing along with challan & tag' ,nspection done *$ Aualit$ /ssurance people' Aualit$ /ssurance certificate given after inspection people sign the challan & put their stamp' )aterials will *e given preservatives and wrapped in plastic pouches'
(0DE0 P./CED R P0(C!0E)EHT SECT,(H'
)/TE0,/. 0ECE,&ED /T B/0E+(!SE' <' >' 6' ;' Cartooni@ed' These cartoons will *e put in wooden *oxes' Case num*er and cases marked' Beight and dimensions to *e specified *oth on challan & cartoons'
5'
47' This information is fed in computer of warehouse' 44' Computer will generate invoices and excise document "non3dut$ paid# if re-uired' 4=' Packed materials to *e dispatched either to Calcutta or )um*ai port'
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6. ORDERING PROCEDURE OF SPARE PARTS' The customer places an order at TE.C(, Bhich is scrutini@ed thoroughl$ *efore entering it in the s$stem' (nce the order generated in the s$stem, it is a /C% (0DE0' The material at the warehouse is alwa$s updated in the
s$stem' This *ack order data is matched against the data of stock availa*le at the warehouse' /t Telco SPD the allocation of material to various customers is done according to the logic fed in to the computer s$stem' This is necessar$, as the demand of material is alwa$s greater than the suppl$' The priorit$ of an order is made according to how long the order has *een withstanding with the compan$' The order ma$ *e prioriti@ed according to the -uantit$ demanded' (nce the allocation is done a challan is generated' Challan is a document, which has following description: Customer9s name' Customer9s code' Destination' Part num*er' Description' Aualit$ to *e sent' Price' Transporters name'
Fortune Institute of International Business, New el!i =>
The challan ma$ *e of 1 t$pes: 4' Dut$ paid for small items' =' Dut$ paid for *ulk items' 2' Hon3dut$ paid for small items' 1' Hon3dut$ paid for *ulk items' / *ulk item here refers to heav$ or *ulk$ items' The challan is sent to the warehouse where the material as stated in the challan are picked up and packed' S7#! * P#!+* O!4 !&'( P!-/ 4$! A+ S7#! P#!+ D&v. JSR. (nce the packing of material is done, a dispatch note is prepared in the warehouse' The dispatch note has the following details: Customer9s name' Customer9s code' Destination' Case Hum*er' Challan Hum*er' Ho' of cases' ox si@es and weight'
=6
The despatch note is an essential document to move the goods from the point of packing to the point of despatch' /s soon as the goods reaches for despatch ,,nvoice3 cum 3Excise gate pass is prepared in the warehouse, 2 copies of the document are prepared which is sent to the Transfer ,8inance department, and to the Spare Parts department ' This ,nvoice3cum3excise gate pass has the following details: Customer9s name Customer9s code' Part no' Description' Price' Aualit$' Excise Dut$' Discount paid "if an$# The ,nvoice3cum3Excise gate pass is the most essential document for moving the goods outside TE.C(, Jamshedpur' The transporter who is taking the consignment prepares one more note called the goods consignment note' The document is sent in two wa$s either through directl$ to the regional office'
Fortune Institute of International Business, New el!i =;
,n first case through *ank the ,nvoice3Cum3Consignment note is sent to the accounts department to TE.C( *ank contacts the customer' The customer pa$s and the document' ,n second case, the ,nvoice3Cum3Consignment note is sent to the nearest regional office' The 0egional office initials the customer' The customer pa$s and takes the document'
27
SPARE PART EXPORT

SPARE PARTS EXPORT (IN LAKHS) ;53;< ;<3;> ;>3;6 ;63;; ;;3=777 ;=5'>6 ;2='7= 4756'<< 642'65 <;7'6>
1200 1000 800 600 400 200 0
95-96
96-97
97-98
98-99
99-2000
24
DOMESTIC EXPORT IN SPARE PARTS DIVISION "Performance over last 2 $ears#' S$.8 /+ DSP despatches 4# Direct Sales =# SPCD0S( despatch 2# Barrant$ despatch Pune despatch Export Spare parts & Despatches Sumo *od$ despatches .uck now despatch &8J E C%D9s Hos Export C%SDS%D Despatch U'&+* "0s'in Cr# G G G G G Hos' &eh'Sets H/ Hos' 9:593 >5'<> 1='67 =>'6; 1';6 H/ ;'2= =>'26 4;7';4 =71'77 =5'5< 9359; 427'74 55'5= >='>< 4'>2 46'77 47'5; 27'<1 >2'<; 4>64'77 2=1'77 =>='77 9;599 ;4'61 15'72 17'4< <'<5 41'26 6'41 212'77 >5'<<
* (VFJ VEHICLE FACTORY JABALPUR )
2=
EXPORT PROCEDURES
The procedural aspects of TE.C(9s export operations are -uite formida*le and for that matter even we were overwhelmed *$ the magnitude of procedural re-uirements at ever$ stage of export execution right from the time an export order is o*tained until the reali@ation of export proceeds and the *enefits there of' ,n this connection, it is necessar$ to emphasis here that we should concentrate on the purpose and the principles *ehind the various procedural formalities and also give due importance to the names and details of the various forms, applications etc' +ere we will discuss the treatment of procedures right from the receipt of a confirmed order until the reali@ation of export proceeds and export *enefits' / discussion of the relevant procedures involved in the export operations of Tata &ehicles NTrucksP has *een dealt with reference to various phases of export' These phases are: 4'(ffer and receipt of confirmed orders' ='Production and clearance of vehicles for export' 2'Shipment' 1'Hegotiation of documents and reali@ation of export proceeds' 5'(*taining various Export incentives'
22
OFFER AND RECEIPT OF CONFIRMED ORDERS

OFFER /n offer is a proposal su*mitted *$ an exported, it might *e in the form of a letter or a -uotation' The offer when accepted *$ the foreign *u$er, *ecomes an order' Telco, Exports )um*ai makes an offer in the form of a Performa ,nvoice' Technicall$, this is ?ust a document indicating the exporter intention to sell, and is usuall$ addressed to the prospective *u$er' The contents of the Performa ,nvoices includes the following: i# T" /-'*&(' -! +" .$< !)
The Performa ,nvoice gives the complete name and address of the *u$er' ii# D */!&7+&-' -= (--4*) The Performa ,nvoice carries a *rief description of the vehicle, indicating important technical specification and ph$sical feature' 8or detailed technical specification separate sheets giving these are appended as a part of the Performa ,nvoice' iii# P!&/ ) The Performa ,nvoice indicates the price or mutuall$ agreed currenc$' ,t also indicates the total -uantit$ of the products offered' The maximum -uantit$ to which the invoice is applica*le is also made clear' The *asis of price indicated in the Performa should *e 3
21
3 3 3
8( "free on *oard# C & 8 "Cost & 8reight# C,8 "Cost ,nsurance 8reight# (r an$ other ,nternationall$ accepted term' The *asis should *e accepta*le to the *u$er'
iv# C-'4&+&-'* -= S#% ) The Performa ,nvoice su*mitted entitles legal o*ligations on the part of Telco to suppl$ the product to the *u$er in the event of the invoice *eing accepted *$ him' +ence it is necessar$ that the conditions of sale and other factors should *e clearl$ spelt out' Some of the important conditions are: a# &alidit$ E The Performa ,nvoice su*mitted indicates the period for which it is valid for acceptance' The *u$er the right to accept the Performa ,nvoice an$ time within the validit$ period and the exporter has to fulfill his o*ligations' ,n this case Telco evaluate the various pro*lems which ma$ arise such as increase in the price of its products, internal transportation, shipping charges, freight and other such varia*les and *e reasona*l$ confident that it will *e a*le to fulfill its o*ligations' a# Deliver$ Schedule E The deliver period given in the Performa invoice should *e realistic' ,n cases where C','8' -uotations are given, the legal o*ligations are on the part of Telco to make the goods availa*le at the port of destination as per the indicated deliver$ schedule'
,t should *e noted that in view of the vagaries in shipping, man$ of the exporters take the precaution of indicating clearl$ in the Performa ,nvoice the clause, FSu*?ect to the /vaila*ilit$ of Shipping SpaceS' *# ,nspection E Bhen the inspection of goods is done, it is necessar$ to specif$ in the Performa ,nvoice the authorit$ which would conduct the inspection and also mention the nature of inspection' Hormall$ , export goods are offered for inspection *efore shipment and hence the terms of reference of inspection is made clear in the offer itself' c# Pa$ment Terms3 The mode of pa$ment, such as letter of credit and the various clauses which are re-uired *$ the exporter have to *e clearl$ stated' d# (ther (*ligations3 There are certain other o*ligations agreed to *$ the exporter in the Performa ,nvoice' These are as follows:3 i# The assistance that would *e rendered to the *u$er in the form of after3sales service *$ the exporter or his agent' ii# /greeing to make availa*le spare parts for sale for the e-uipment for a certain period of time, especiall$ in cases where the products can go out of production due to the introduction of new and improved products' iii# Barrant$ for the e-uipment supplied, taking full responsi*ilit$ for an$ manufacturing defect of the e-uipment or part and there free replacement during the specified warrant$ period
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CONFIRMED ORDER Bhen the *u$er accepts the Performa ,nvoice, it *ecomes a confirmed order' Hormall$, the duplicate cop$ of the Performa ,nvoice is dul$ signed *$ the *u$er, accepting the conditions there in and returning it to the exporter who insists on the esta*lishment of the documentar$ .etter of Credit, so that the *u$er9s commitment is confirmed' Telco treats an export order as confirmed onl$ when the .etter of Credit is esta*lished' The Performa ,nvoice and confirmed order are ver$ important and *asic documents in the execution of an export order' LETTER OF CREDIT .etter of Credit is a written document D instrument issued *$ the *u$er9s *ank, authori@ing the seller to draw in accordance with certain terms, and stipulating in a legal form that all such *e honored' .etters of Credit are the most important single factor in Telco9s export trade and it gives securit$ to *oth *u$er and seller' +ere the .etters of Credit are much more than a means of arranging pa$ment *etween the two parties to a transaction, the$ also set out the wa$s in which the contract *etween the two parties is to *e performed' There are various t$pes of .etters of Credit used in export trade *ut irrevoca*le .etter of Credit is used for the export of vehicles of Telco'
2>
,rrevoca*le .etters of Credit are of two t$pes: 3 Confirmed .etter of Credit and !nconfirmed .etter of Credit' / Confirmed .etter of Credit is one which is the irrevoca*le engagement of the issuing *ank and which has *een guaranteed to the *eneficiar$ *$ another *ank' The ,ndian *ank gives its undertaking that drafts drawn in accordance with the terms of the .etter of Credit, the confirming *ank charges a commission, for that reason confirmation is usuall$ avoided unless it is necessar$ or desired' "/ sample of .etter of credit is shown in /nnexure for a *etter understanding#' /ccording to the attached .etter of credit the four parties for negotiation are: 4' u$er "applicant#: )Ds' H,T/ & Compan$ .td', Suite 4>72, Senakal$an ha*an 4;5, )oti?heel, Dhaka' Tata Exports .td' Telco Division, )um*ai' State ank of ,ndia =1 E =5, Dilkusha Commercial /rea Dhaka 3 4777, angladesh'
='
Seller "*eneficiar$#:
2' Compan$ or ,ssuing *ank:
1' Hegotiation or /dvising *ank: State ank of ,ndia ,nternational Service ranch )um*ai, ,ndia'
The other particulars of .etter of Credit are: 4' =' Date: ,rrevoca*le .etter of Credit Ho' :
26
2' 1' 5' <' >' 6' ;' 47'
/ccountee
"/ddress of the importer#:
.ast date of shipment: Expir$ date for negotiation: /mount in dollars "in figure and words#: Particulars of the goods: Hame of the documents attached with the .etter of Credit: Shipment from and to: Signatures of the authori@ed persons of /dvising ank and ,ssuing ank
INDENT ,ndent is a document signif$ing a part$Is indent to purchase' ,n case of exports the importer places on the exporter this indent' This document gives particulars of the item *eing purchased its -uantit$, price in commercial terms, conditions, mode of shipment, date of deliver$, .DC, negotiation date and apart from details like indenting 0egistration num*er, ank permission num*er' "/ sample indent is shown in /nnexure#' PRODUCING THE GOODS
The next phase in the processing of an export order is to make arrangements for the items to *e produced at the factor$ of the exporter or to *e o*tained from a
Fortune Institute of International Business, New el!i 2;
supplier' /ll the operations from that time an indent for production is placed till it reaches the export warehouse are normall$ covered *$ this phase' Bhen )um*ai Export receives an order from a customer it gives an E0 Ho' "Export 0e-uisition Ho'# to that particular order' This E0 Ho' serves as a control num*er' ,t has to *e noted that the whole export is *ased on the E0 Ho' and all in-uiries regarding an order are made onl$ *$ mentioning the E0 Ho' This E0' Ho' differs from order to order'The various E0Is are put in a production call up also known as Corporate or /PC schedule "/uto Production Cell#' Then this is collectivel$ incorporated in a )onthl$ Production plan and released *$ /PC )um*ai' The copies of this is forwarded to: Executive Director "Corporate /ffairs# Telco, Pune Telco, Jamshedpur E0C Telco, Pune Corporate (ffice Telco Exports Telco )um*ai Telco )um*ai Telco, )um*ai
Telco Sales
Telco )um*ai
17
Chairman9s (ffice 0egional )anager
)um*ai +ouse Telco Sales
The Production calls up /PP & C, Jamshedpur "/uto Production Planning and Control#, receives the Production Schedule "see annexure#' /
Production Call up is a summar$ regarding all the vehicles to *e produced' / Production call up is made ever$ month and features the following: 4' =' 2' 1' 5' <' >' 6' ;' 47' 44' The name of the countr$ : Drive E right hand drive "0+D# or .eft hand drive ".+D# : E0 H(' 3 Export 0e-uisition Ho' : )odel : &ehicle T$pe : Existing ES Ho' "Export Specification Ho'# : Hew E0Is Ho': Auantit$: Destination E either to od$ uilder or port : Colour of the &ehicle : 0emarks :
14
/uto Production Export, )um*ai sends a Confirmed &ehicle Production Plan "See /nnexure# for the month and also a Tentative &ehicle Production Plan "See /nnexure# for the next month, along with production call up' / Confirmed &ehicle Production plan is divided according to the *ranches "Pune, JamshedpurD.ucknow and Dharwad# where the vehicles will *e produced' / Confirmed or 8irm &ehicle Production plan distinctl$ shows the num*er of vehicles to *e produced for domestic sales and the num*er of vehicles to *e produced for exports' The vehicles are also segregated according to the models' This helps in finding out how man$ trucks, *uses, tippers, light commercial vehicles etc', are to *e produced' ,f an$ information is left out regarding the manufacture of the vehicles then it is included at the *ottom of the firm &ehicle Production Plan' / tentative &ehicle Production Plan is prepared for the following month' The tentative &ehicle Production Plan is not a confirmed schedule, certain changes can *e done as when circumstances arise' ,t is made on the same pattern as that of the firm &ehicle Production Plan' /fter receiving the cop$ of the Production Call up, /PP & C works out the *acklog of production and includes the fresh re-uirements to get the total re-uirement' /fter estimating the total re-uirement an anal$sis is made for the critical items "urgentl$ re-uired items *ut not immediatel$ availa*le# re-uired for production' ased on this anal$sis a plan for the next month is drawn up *$ /PP & C' Exports )um*ai on the availa*ilit$ of ship or the load on gives priorit$'
Fortune Institute of International Business, New el!i 1=
od$
uilders
ased on this, /PP & C Jamshedpur works out a weekl$ production plan and intimates )um*ai (ffice a*out it' The status of production and despatches is also conve$ed to Export )um*ai through )'S' )ail' There are a num*er of certain things, which /PP & C has to keep in mind *efore working out the production plan' /PP & C make sure whether the re-uirements mentioned in the Export Specification " E S # are well defined or not' ,f it finds that certain clarifications are to *e made clear then /PP & C )um*ai is once again consulted regarding the specifications' /PP & C access the critical items re-uired for manufacture' ,t sees to it that these critical items are availa*le with them or not' ,f it is not availa*le the /PC )um*ai ma$ *e contacted for making the critical items availa*le or for negotiating with the customer regarding that item' /PP & C ma$ also make sure if this item can *e produced in the plant itself or not' The capacit$ to manufacture the re-uired vehicle is also accessed *$ /PP & C' EXPORT SPECIFICATION Export specification is a document released *$ )um*ai Exports to the related works "Jamshedpur#' Export specification gives the manufacturing unit the complete specification of the vehicles to *e manufactured for exports' The specifications regarding the vehicle are approved *$ the E0C "Engineering 0esearch Center#' The ES is divided into 2 parts mainl$:
12
asic re-uirements: Spells out the model no', t$pe of face re-uired, -uantit$, countr$, drive, name of od$ uilder, Production and Port of Shipment' asic Specification: asic specification Ho' and TP. " Technical part list # version'
Special 0e-uirement: )entions the re-uirements asked *$ the customer if an$ or else the standard TP. is followed' / sample of ES is shown in /nnexure' MONTHLY MANUFACTURING PROGRAMME The scheduling section of /PP & C to standards' ,n this is detailed information regarding the vehicles to *e produced sends )onthl$ )anufacturing Programme "))P#' Copies of ))P are sent to: 3 Planning' 3 3 3 3 i# )aterials' /uto cost' Aualit$ /ssurance' /ncillar$ Development Department'
The Planning Department provides necessar$ facilities to the production for the manufacture of a particular component or item'
11
ii#
)aterial Department receives a cop$ of the ))P' ,t is the dut$ of materials department to procure the re-uired material from suppliers'
15
COMPONENTS Shop )ade or Engine Div' /xle Div' 8orge Div' Truck Div' /ncillar$ ought out
The$ manufacture and suppl$ for production /uto Cost esta*lishes the cost price for each and ever$ item like material cost, la*our cost, wastage, profit etc' iii# W#! "-$* #=+ ! &'*7 /+&-':
Each item is again re3inspected in the warehouse *$ Aualit$ /ssurance staff to ensure that right -ualit$ of materials are packed and despatched' 0e?ected materials are returned to their respective sources' 8or some items minor rectification is needed such as rust cleaning, painting, touch up etc', which is done in the warehouse' iv# A'/&%%#!< D 7#!+> '+': Contents of ))P :3 4' )'(' S0. E This is the monthl$ order serial no' Each order is given a serial num*er'
1<
=' Chassis DExecution )odel Ho' E Execution model no' is given for distinguishing one vehicle from another on the *asis of rear overhang, wheel, face configuration etc' 2' Sales Designation Ho' of the vehicle E Each vehicle is given a sales designation no' 8or example: SE 42421=7>2' SE E indicates the t$pe of the vehicle' 4242 E &ehicle )odel 1= 3 Bheel *ase' 7>2 E indicates code no' or classification of the particular vehicle' 1' Chassis t$pe E The chassis t$pe is identified *$ < digits e'g' 2<57>4 2<57<7 5' Auantit$ E The no' of vehicle re-uired are mentioned' <' Customer E The name of the customer is given'
>' 0'(' details E Bhen domestic orders are accepted a release order no' is given to the customer9s order'
" E S # Export Specification Ho' is also mentioned' This helps in further consultation if there are an$ pro*lems'
1>
6' Expir$ date E The expir$ date is usuall$ not mentioned' ,f the vehicle is not delivered within 2 month from the date of order then the order ma$ lapse' )um*ai (ffice negotiates this date with the customer' "/ sample )onthl$ )anufacturing Programme is shown in /nnexure#' /t this stage the for procedures *ifurcate into = directions, one is for Complete uilt !nits "C !Is# and other for Completel$ %nock Down
"C%DIs#' The stages, which are different for these two t$pes, are taken up separatel$ as *elow: FOR COMPLETELY BUILT IN UNITS V "&/% * M#'$=#/+$!&'( S7 /&=&/#+&-' (VMS) /fter the ))P, &ehicles )anufacturing Specification "&)S# is prepared *$ the standards 4 of the /PP & C' The &)S is meant for providing
information regarding model specification for production and -ualit$ assurance' ,t also names the customer "countr$#' The Technical part list "TP.# is referred to making the &)S' / summar$ of the description of the aggregates is featured in the *eginning and is dealt in detail in the following pages of the &)S' Each component of the vehicle is classified one *$ one along with its Technical part .ist Ho' / description of componentDaggregate is also given in detail' The parts, which are used in the making of an aggregate, have a num*er to itself' This part no' is also mentioned in a column' /nd if there
16
are an$ remarks to *e made regarding a particular aggregate then this is also made clear' /fter the production of the vehicles is complete vehicle storage receives a despatch details for all the vehicles, from /PP & C department' This
Despatch Destination of Export Chassis that is made and sent to vehicle storage pertains to one particular month' / similar schedule is also sent to the Export (ffice )um*ai for confirmation' The various particulars of this schedule are: i' Hame of the countr$' ii' Drive ".+D or 0+D# i' ii' 3 3 3 iii' E0 H(' 0e-uirements as on a date the name of the model no' of vehicles in storage 0e-uirement' )um*ai Export mentions Port of shipment E The name of the place of shipment' iv' Hame of the od$ uilder E The guideline regarding the name of the od$ uilder and the num*er of vehicles to *e sent to a
particular od$ uilder is mentioned in this schedule' v' Hame of the place where the vehicles are to *e despatched'
1;
vi'
od$ uilder or direct shipment E This is also made clear whether the vehicles will *e sent through shipment' od$ uilder or *$ direct
Simultaneousl$ /PP & C department sends a production schedule to the Production Department regarding vehicles for Export' !pon production of the vehicles that are meant for export are sent to the ,nspection Department for final checking and testing of the vehicles' /fter the vehicles are dul$ inspected and ok' The ,nspection Department forwards the vehicle to vehicle storage along with the ,nspection Slip "See /nnexure# for export vehicles indicating there in 3 3 3 3 3 3 3 3 3 3 3 3 Chassis num*er )odel num*er )entions the date of production' Engine num*er &ehicle specification Tentative destination / short description regarding: Cear ox t$pe Engine t$pe T$re information atter$
/nd lastl$ the manager of 8inal ,nspection gives his signature'
57
Bhen the ,nspection Department sends the vehicles to &ehicles storage then a Deliver$ Challan "See /nnexure# is prepared for the vehicles meant for export and attached with the ,nspection Slip' The Challan is made *$ the vehicle storage itself for documentation *$ computer personnel The Challan or Deliver$ ,nstruction consists of E 3 3 3 3 3 3 3 3 3 date &DS consignment no' "&SDC(H H('# Hame of the countr$' )odel Chassis serial no' Engine no' )ake and si@e of t$res Ho' of wheels 0emarks'
/lso the name of the od$ uilder and the name of the Transport Contractor is mentioned' esides, a .edger is also maintained and is meant for the ooking of
vehicles which come from the ,nspection Department' This .edger is known as the FChassis ooking and Deliver$ .edgerG' This .edger is maintained
for *oth domestic sales and for Export vehicles' To differentiate *etween
domestic
ooking and Export
ooking, the particulars regarding Domestic
sales is written in lue and for Export it is written in red' CHASSIS BOOKING AND DELIVERY LEDGER Dt Ho' ooked 0'(' Cont' Ho' &SDC(H Dest' Part$ Trans' Dt' At$' Del' 0emarks )odel
,n detail, particulars are as follows: 3 Date of *ooking "i'e' the date in which the vehicle is *ooked from inspection department to vehicle storage#' 3 3 3 3 3 3 0'(' Ho' "onl$ for domestic vehicles and not for export#' Part$ "i'e' the customer, name of the countr$#' Auantit$ "no' of vehicles #' )odel &SC(H no' "Consignment no'# Transport contractor the Transport contract who will *e taking the vehicles to the od$ uilder or directl$ to the port#' 3 3 3 Destination " od$ uilder or port# Deliver$ date 0emark
INVOICE OR DESPATCH MEMO

Fortune Institute of International Business, New el!i 5=
The ,nvoice or Despatch memo gives all the information regarding the vehicles for export' This is also known as the despatch document for Export under *ond without pa$ment of dut$ under 0ule 456 and 465' This is a commercial document and the contents are prescri*ed *$ Central Excise, Covt' of ,ndia' ased on this document, the price of the vehicle,
chassis Ho' and Engine Ho' with deliver$ point etc', are recorded at all the points of the compan$ as well as at Central Excise and customs' This document is authenticated and the serial num*er is controlled *$ Central Excise' ased on the value of Despatch )emo is de*ited in the
*ond' This document is followed *$ either /0 1 or /02/ as the case ma$ *e' The Despatch )emo is made *$ vehicle storage and is made in a set of 1 copies 4st cop$ goes with the transport contractor' =nd cop$ goes with the transport contractor' 2rd cop$ is sent to Central Excise Department' 1th cop$ remains with vehicle storage' "/ sample Despatch )emo is shown in /nnexure#' The Despatch )emo is divided into > sections, highlighting all the relevant information regarding the vehicle meant for export'
52
4' The 4st section mentions the 3 0elease (rder Ho' To identif$ the document whether it is domestic or for exports' 3 0elease order dated' 3 &SDC(H Ho' " &ehicle stock consignment no#' 3 &SDC(H dated' 3 D) H(' Despatch memo serial num*er printed *$ the s$stem "Controlled num*er# 3 D) dated' 3 /02/D/01/' 3 Date' =' The =nd section highlights 3 3 3 3 3 3 The chassis no' Engine no' Sales designation no' "the model no'# 8ull description of motor vehicle' T$re and *atter$ description' Temporar$ registration no'
51
Date and time of removal of vehicle from the works'
2' The 2rd section gives complete details a*out the price and the excise dut$ levied on the total value of the vehicle' 1' The 1th section shows 3 3 3 3 3 The ,nsurance Cover Hote no' The ,nsurance Cover Hote date Total -uantit$ Customer (rder Ho' and .astl$ the *ond no' to which the excise dut$ has *een de*ited'
5' The 5th section gives details regarding the transporter who will drive the vehicle to its destination' 3 3 )ode of transport , road or shipment' TransporterIs name and code'
The transporter gives a confirmation of taking the deliver$ of the chassis from Telco works to the place of destination' <' Telco, (ke$Is the vehicle for release and certifies that the removal of the vehicle does not constitute sale *ut deliver$ to od$ uilder or port of
shipment and the other particulars mentioned are correct' >' /cknowledgement cum Deficienc$ )emo'
55
This is a memo, which the transporter *rings *ack with him after making the delivering of the vehicle to its destination' The deficienc$ memo mentioned a*ove shows if there are an$ deficientl$ in the vehicle and needs to *e rectified' INSURANCE OF THE VEHICLE The compan$ ensures vehicles, which are sent *$ road to the od$ uilder or to the port of shipment' Telco has engaged the IThe Hew ,ndia /ssurance Compan$ .imitedI, for the insurance of its vehicles in transit' There are 1 copies of the ,nsurance cover note' The 4st cop$ goes with the vehicle and the =nd, and the 1th cop$ remains in the insurance compan$9s office' The schedule of the insurance cop$ "See /nnexure# spells out the: 3 3 3 3 3 3 Chassis no' Engine no' )onth and $ear of manufacture of the vehicle' 0egistration no' of the vehicle' &alue of the vehicle' Premium paid on the value of the vehicle'
The ,nsurance cover note clears the date of the commencement of insurance and the date of expir$ of the insurance'
5<
The insurance cover note mentions the limitation of the insurance, in other words it does not cover : 4' !se for hire or reward' =' !se for racing, peacemaking, relia*ilit$ trial or speed testing' 2' !se whilst drawing a trailer except the towing of an$ one disa*led mechanicall$ propelled vehicle' .astl$ the insurer certifies that the cover note is issued in accordance with the provisions of chapter K and K, of the )otor &ehicle /ct, 4;66' /ccording to the /ct the vehicle on road should *e insured' This is necessar$ *ecause if there is an accident during the transit of the vehicle' Bithout insurance taking out the vehicle is *e$ond the law and it is a legal *inding' The next step is the preparation of /01 and /02/' These are the = categories under which the vehicles are released' AR ?A ,t is an application for removal of excisa*le goods from a factor$ or a warehouse to another warehouse' The /'0'2/ is a Central Excise document and is prepared in sets of seven' The 4st 2 copies of /' 0' 2/ are sent along with the vehicle' The =nd cop$ remains with vehicle storage' The 2rd cop$ is sent to the excise cell of the finance department'
Fortune Institute of International Business, New el!i 5>
Production planning and control gets one cop$' .astl$ one cop$ is sent to Central Excise' The /' 0' 2/ form carries the following particulars: 4' Description of the goods regarding the chassis, its t$res, rims, fuels tank, ?ack, standard tools etc' =' 2' 1' 5' <' >' 6' ;' 47' 44' Ho' and description of the packages' Chassis Ho' Engine Ho' Auantit$ of Coods' Date of Barehousing' &alue Excise Dut$' Ho' and date of vehicle despatch memo no', for removal of goods' )anner of the transport to the od$ uilder' 0emarks if an$
The /ssessee signs the document and in this case the divisional manager of vehicle sales signs it' /' 0' 2/ is under the self3removal scheme and is sent to the uilder mentioned *$ )um*ai Export' od$
/ sample /'0'2/ is shown in /nnexure'
56
AR.@ FORM The /'0'1 is an application for the removal of excisa*le goods for export *$ sea, air or land' ,n this kind of removal of goods the condition of the goods is not changed 'e' it is not sent to an$ *od$ *uilder' ,t is also a central excise document and deals with the direct shipment of goods' ,t is an application sent to the superintendent of central excise' The vehicles under /'0'1 are cleared under ph$sical control *$ the central excise officer ',t contains the following details: The postal address of the assistant collector of excise is given with whom the *ond is executed' Destination and mode of transport and other information like num*er and description of packages, gross weight of the packages, markings on the packages, value and dut$ paid, amount of re*ate claimed' Coods mentioned in the /'0'1 are with or without availing the facilities of )odvat credit' / declaration is also made that the export is in discharge of the export o*ligation under claim of dut$ draw*ack' ,t also includes a declaration *$ the owner that the mentioned particulars are true and correctl$ stated'
5;
INVOICE OR DESPATCH MEMO

The &ehicle Storage department prepares the Despatch )emo or ,nvoice, and it gives all information regarding the goods that are meant for export' This is also known as the despatch document under *ond without the pa$ment of dut$' This is a commercial document and the contents are prescri*ed *$ the central government of ,ndia' The Despatch )emo consists of > sections' The$ are: The first section mentions the release order no', vehicle stock consignment no', Despatch )emo serial no' The second section highlights the various specifications of the vehicles under export' The third section deals with the details a*out the price, and excise levied' The fourth section states the insurance cover note, total -uantit$, customer order no', and the *ond no' The next section specifies the transporterIs name and the code, and the mode of transport' The next section shows the certificate that the removal of goods does not constitute sale *ut the deliver$ of the goods to the port for shipment' .astl$ is the memo which the transporter *rings *ack after deliver$ of the goods'
<7
BOND
This is *asicall$ an excise procedure where in the compan$ enters into a *ond with central excise' The *ond entered ma$ *e of an$ amount '8or the execution of the *ond, sales maintains a running *ond which is supposed to *e maintained *$ the exporter of the excisa*le goods' The *ond register shows the serial no', of the *ond in the central excise and also the amount of the *ond and the name and address of the suret$' This *ond register is released *$ the assistant collector excise Jamshedpur' The *asic dut$ is reduced from the *ond *$ de*iting it from the amount of the dut$ and thus showing the *ond *alance' This is done in case of all the vehicles sent under /'0'1 'The goods ought to *e sol within three months else a fine ma$ *e changed ',n case of failure to all the compan$ ma$ appl$ for an extension in the time period'
<4
EXCISE PROCEDURE FOR EXPORT

4' 0ule 4=, 42 and 4;4' pertaining to export' 0ule 4= deals with export under claims for re*ate' 0ule 42 deals with export under ond and 0ule 4;4' deals with export after further manufacture in of Central Excise 0ules, governs the provisions
*ond' The important provisions are as under' R$% 61 EA7-!+ /% #!#'/ /#' . #== /+ 4 under rule 4= i'e' on pa$ment of excise dut$ under claim for re*ate' The procedures are similar to 0ule 42 and an export refund of dut$ is claimed' R$% 6? i' Prior to excising out a *ond has to *e executed with the ?urisdictional /ssistant Collector to cover the dut$ lia*ilit$' There are currentl$ a num*er of *onds to facilitate clearance via The concerned DivisionDDept' shall su*mit the /'0'T document to Excise Supdt' =5 hrs' in advance prior to despatch' (nce CP= is made and countersigned *$ Excise ,nspector it shall *e ensured *$ DivisionDDept' )um*ai Port, Calcutta Port or *$ land *order' /s of now no *ank guarantee is re-uired to *e furnished in support of the *ond, as Telco is a 0egistered Exporter' ii' 8or the consignment meant for export, /'0'1 document as to *e su*mitted =1 hrs' in advance to Excise /uthorities'
Fortune Institute of International Business, New el!i <=
iii'
The excise /uthorities are expected in the /'0'1 tall$ with the materials packed and countersign the /'0'1, the CP= as also in the 0unning ond /DC' onl$ after the signature of Excise /uthorities on CP=D/'0'1 can ph$sical despatch take place'
iv'
The goods are to *e the proof of Export in ph$sical exported within < respect of the consignment months of despatch from the sent through )um*ai are factor$ and on actual export, received from Export Dept' The Customers /uthorities are re-uired to certif$ the export on the face of the /'0'1' This Certification called proof of Export is to *e su*mitted to the /ssistant Collector concerned "i'e' the office where the *ond executed# and *ased on the proof of Export Telco is allowed to take credit in the relevant *ond account'
v'
,n case export does not take place within < months, extension of validit$ of the /' 0' 1 has to *e o*tained prior to expir$ of < months period and under the Excise 0ules, no extension is granted after = $ears of initials despatch'
vi'
,n case of cancellation of export order, permission from the /ssistant Collector is to *e o*tained to divert )um*ai' 8or despatches through Calcutta port, Calcutta (ffice sends to /ccounts Excise Cell the proof of Export' ased on the proof of export, credit is taken in the
ond /ccounts and a cop$ of the proof of export is filled with the Supdt' (f Central Excise' ,f the export is likel$ to *e dela$ed at the port of Calcutta of )um*ai permission for extension has to *e taken *$ the goods for home market and on o*taining the permission, the dut$ is to *e paid and certificate confirming correctness of dut$ has to
Fortune Institute of International Business, New el!i <2
*e o*tained from 0ange (ffice and su*mitted to /ssistant Collector for allowing credit in the ond /ccount' R$% 696 5 B Telco is following the procedure prescri*ed under 0ule 4;4 E to clear
chassis meant for export without pa$ment of dut$ to *od$ *uilders' The procedure is as under: i' Telco has executed a separate *ond under 0ule 4;43 for facilitating clearance of chassis to specified *od$ *uilders' Prior to receiving Calcutta (ffice or Export )um*ai depending on the port of shipment' ,f the export is through land order for which the ond is executed at Jamshedpur, Calcutta (ffice should intimate Export Department or /ccounts Excise Cell sufficientl$ in advance "prior to expir$ of < month# so that extension could *e o*tained' &ehicle storage section is to maintain the 0unning ond 0egister , n respect of each *od$ *uilder' 0e3warehousing certificates chassis, the *od$ *uilder have to o*tain registration under 0ule 4;43 to receive the chassis in *ond' ii' Each chassis would *e excised preparing an individual /'0'2/' /s per the 0ule, dou*le the dut$ is to *e de*ited in the *ond /DC iii' 0e3warehousing certificate has to *e received from od$ uilder
within ;7 da$s and in case it is not received, then Telco is lia*le to pa$ excise dut$'
<1
iv'
(n completion of *od$ Telco, )um*ai prepares *uilding an /'0'1 and the procedure is as per 0ule 42' Telco gets credit in the *ond operated under rule 4;43 onl$ after acceptance of proof of Export'
Clearances can *e effected to Hepal under *ond as also on and proof of Export is to *e received directl$ from Export Department )um*ai' / fortnightl$ statement is prepared and sent *$ vehicle storage to Export Department' )um*ai in respect of pending /'0'2/ for which re3 warehousing certificate are to *e received' 8ollow up is also done *$ /ccount Excise Cell with Exports )um*ai' Pa$ment of dut$ ,n the later situation, the re*ate is claimed *$ the Covernment of Hepal and not *$ the manufacturer' ,nstead of an /'0'1 for export, a Hepal invoice is prepared and the procedure for export is similar as that of 0ule 42' Clearances under *ond to Hepal are permitted onl$ in case the customer opens an irrevoca*le .etter of credit in specified freel$ converti*le foreign exchange' ased on the .etter of Credit permission is to *e o*tained to excise under *ond under a different /'0'1 and the procedures are similar to the export procedure' (n export, over and a*ove the proof of export certificate from the *anker confirming receipt of foreign exchange is also re-uired to *e su*mitted '
<5
/fter the chassis is cleared for Export from the works, without pa$ment of Excise Dut$ i'e' under *ond ma$ go to the od$ uilder for *uilding the
*od$ or if the *od$ is not re-uired to *e *uilt the same reach directl$ to the port of Export' ,f during the transit period the chassis on the *uilt up vehicle meets with an accident and is declared as a total loss *$ the ,nsurance Compan$ the dut$ on the vehicle shall *e paid *$ the works "in case of chassis# or Export )um*ai "in case of *uilt up vehicle # *ased on the price and rate of dut$ prevailing at the time of pa$ment' (nce a vehicle is declared as a total loss, a the Exports Division )um*ai, shall intimate the works with regard to the accident so that either the works or the$ themselves could discharge the dut$ lia*ilit$' /fter the dut$ is discharged credit in the *ond /ccount shall *e taken after certification of pa$ment of dut$ from the 0ange Superintendent' 8ormal re-uest is re-uired to *e made to /sst' Collector for diversion of the vehicle and permission o*tained *efore discharging the dut$ lia*ilit$' REGISTRATION OF THE VEHICLE 8or an$ )otor vehicle it is mandator$ to have registration with District Transport /uthorit$ "a Covt' Dept'# as per Central )otor &ehicle 0ules' Telco *eing large manufacturer of /utomo*iles, has got the opportunit$ to avail the facilities for registering their vehicles under Self 0egistration Procedure under 0ule 4= /' The Covernor of ihar has *een pleased to
grant permission and authorit$ to some of the concerned emplo$ees "officers# who have *een recommended *$ Telco time to time for doing such registration'
Fortune Institute of International Business, New el!i <<
The allocation of Temporar$ 0egistration Hum*er are controlled and allotted automaticall$ *$ the computer s$stem at the time of *ooking of vehicles to customer' /ccordingl$ the identification num*er plate is affixed on the vehicle *efore sent on the road' FORM CR. TEMP. This is a temporar$ certificate of registration' This temporar$ registration is necessar$ under 0ule =; " # of the ihar )otor &ehicle 0ule 4;17' The certificate features the: 3 3 3 3 3 Chassis no' Engine no' 0egistration no' Hame and address of owner' Destination'
The various description regarding the vehicles like: 3 3 3 3 3 class if vehicle maker9s name t$pe of *od$ seating capacit$ colour of the vehicle'
<>
/fter checking all the details the registering authorit$ certifies that under section =5 of the )otor &ehicle /ct, 4;2;, the vehicle descri*ed has *een temporaril$ registered' Two copies of C'0' Temporar$ are made' 4' 4st cop$ goes with the vehicle =' =nd cop$ is an office cop$' TEMPORARY TAX TOKEN This token is a temporar$ tax token issued *$ Telco "Temp# 0egistering /uthorit$, Jamshedpur on prepaid tax amount to the DT( /DC' The Temporar$ tax token gives: 3 3 3 3 The engine no' Chassis no' 0egistration no' Expir$ date of tax'
The temporar$ tax token is handed over to the Transport Contractor who carries it with him during the transit of the vehicle "/ sample of TTT is shown in the /nnexure#'
<6
VEHICLE CHIT OR EXCISE SLIP &ehicle chit is stuck on the *od$ of the vehicle at &ehicle Storage' This chit signifies that the Excise dut$ has *een paid' ,t consists particular such as : 3 3 3 3 3 3 )odel no' Excise Cate Pass no' Chassis no' Engine no' Temporar$ 0egistration num*er' ,nsurance Cover Hote no' and date'
EXPORT PROCEDURES) FOR CKDS ,n addition to export of vehicles the compan$ +as made chassis assem*l$ plants through ?oint ventures' ,n countries like )ala$sia, angladesh,
Lam*ia, Srilanka, Hami*ia etc' as apart of technolog$ transfer, &ehicle parts in complete knock down "C%D# kits are Exporters to these countries' ,n C%D all components of a vehicle are packed and despatched in loose condition' This gives an opportunit$ of manpower, emplo$ment as well as to ac-uire technical know3how to importing' 8irst C%D export from here was made on =4 st June 4;<1 to Srilanka' During last financial $ear "4;;<3;># =55= C%D units were exported against =25= C%D units of the previous $ear "4;;53;<#'
Fortune Institute of International Business, New el!i <;
angladesh is most potential overseas customer and 4661 C%D9s were exported to this countr$ during 4;;<3;>' Chassis models .Pl7;D2<, .P454=D1=, .P4547D1= and .P(D424<D55 are currentl$ ver$ popular here' Hita Compan$ .imited E a ?oint venture in angladesh is engaged in
assem*l$ of vehicles, achieved sales of 4,6>5 units amounting to angladesh T% 4,4<2 million "approximatel$ 0s ;4 crores# for the $ears which was significantl$ lower than plan due to the tur*ulent political situation which prevailed here for man$ months of the $ear' Pragoti ,ndustries is a new customer in angladesh and pilot suppl$ of 4= C%D units of .P(424<D55
model are exported in the current $ear' )ala$sia is next important overseas customer and <>= C%D units were shipped to this countr$ during 4;;<3;>' &ehicle models S4242D1<, s4242D5=, .P( Scott and English ")ala$sia# E a ?oint venture is engaged in assem*l$ of chassis' Telco gives thrust n export front and export office an )um*ai looks after marketing, converting customers re-uest in to export order, securing contract from designated markets, sales promotion, scheduling situation and competitions providing guidance to distri*utors for market development' Calcutta office arranges for shipmentDdespatch on receipt of the C%DDS%D consignments from Jamshedpur and arranges to hand over necessar$ documents to the clearing and forwarding agent for custom passing, loading on ship'
>7
Production Planning and Control Department prepares a monthl$ C%DDS%D despatch schedule in consultation with Export )um*ai' Production starts, materials to the Export department, packing slipsDtags are accordingl$ released through computers and for an$ changeDcorrection in packing slips then help of standards , department is sought ' TECHNICAL PACKING LIST /s mentioned earlier in case of C !9s, &)S is prepared after )onthl$ )anufacturing Programme' ,n the case of C%D9s it is Technical Packing list is prepared after )onthl$ )anufacturing Programme' Packing list is a detailed list of all those items or components which go into making a complete product' "/ sample of packing list is shown in /nnexure#' 8or making a packing list or /udit 0eport "Tech' Hame# the Technical Part .ist and drawings "Design deptt' !nder E0C# are referred, keeping in view the re-uirement and the facilities availa*le with the overseas customer' /ll this is mentioned in Customer9s 0e-uest' Technical Part .ist is the complete exposure of the parts for a particular model' ,t contains all the items aggregate wise re-uired for the assem*l$ of the vehicles' )odified or new parts are introduced in the Technical Part .ist either through D+. "design modification list# or *$ DD. "design deviation list# where here is actual deviation from existing part' Technical Part .ist is made *$ E0C "Engg' 0esearch Centre# and is updated *$ ill of )aterials'
Fortune Institute of International Business, New el!i >4
The Packing .ist mentions : The name of the model' Destination ' Export specification Ho '"Es Ho'# Case, whether the list is for Engine or Cear ox etc' Serial Ho' Part Ho' ever$ part of the case is given a no' DescriptionQ the part of the case is given a no' /lternate partQ if a particular part is not availa*le them the alternate part is given' Total Auantit$Q the -uantit$ of the material is also given in *rackets" # then this means that , the particular part is fitted to the case "engine etc'# The packing list is prepared *$ standard ,, a section of /PPC "Jamshedpuir#' 5 copies of the packing list are prepared i' ii' iii' Std' , "C%D# Section' ExportQ one cop$ is sent to Exports' Plant ,Q "Plant 4, makes cowl, ca*in, fitments in the ca*in etc'#
>=
iv'
Plant ,,Q one cop$ is sent to Plant ,, where the engine is made and assem*led'
v'
Plant ,,,Q the last cop$ is sent to Plant ,,, which makes the sheet metal for ca*in, cowl etc'
COLLECTION REPORT Collection 0eport is a detailed list of all the parts and their store location where the$ are availa*le and can *e collected' The collection 0eport is made from3 3 3 3 TP. "Technical part list# C0 TP. "Customer9s 0e-uest# )aterial S$stem 8iles' Collection 0eport
Part wise
Store wise
+elps to anal$se an$ discrepanc$
8acilitates collection of all items availa*le at a part store simultaneousl$' The parts are listed according to store location to facilitate the collection staff in collecting all the items from one location at a time'
>2
etween TP. and shop practice
8eatures of Collection 0eport 4' C%D model no' =' Destination 2' C%D packing list no' 1' Date 5' Serial no' <' Part no: ,t ma$ *e that part num*er ma$ differ, this is *ecause of different makes of different suppliers' >' /lternate part: part that ma$ *e used as a su*stitute' 6' Part description ;' Store location 47' Case code : the case code num*er of the various cases are mentioned in which the parts are to *e packed' The case code num*er helps the packing and dispatch team' This helps them to know in which case a particular part goes' 44' Se-uence no' : it is the ar*itrar$ line num*er fed in the s$stem' 4=' Auantit$ of units'
>1
42' 0emarks'
>5
"/ sample collection 0eport is shown in /nnexure#' The collection section of C%D collects materials from: 4' /uto )aterials 3 3 3 3 3 3 ,,' 3 3 3 3 8PS , "finished parts store# 8PS ,, 8PS ,,, 8PS ,& (ff load stores &ehicle stores' Production shops Engine division Truck division /xle division 8orge division
EXPORT INSPECTION (QUALITY ASSURANCE) ,nspection works as a separate section which is responsi*le for total -ualit$ control for C%D checking in the warehouse' +ighl$ trained inspection personnel9s are provided with necessar$ inspection facilities' Components are checked on the *asis of drawings, technical specifications etc'
Fortune Institute of International Business, New el!i ><
/dditional pre dropping inspection has *een provided for Export customers to ensure 477 U correct material is despatched to the Export customer' /ll the aggregates like Engine, Cear*ox, 8ront /xle 0ear /xle, Cowl, Bheel 0im, 8rame etc', related small components are checked thoroughl$ to meet the international standard' Even the packing materials like wooden *oxes, crates, pol$thene sheets, carton *ags are checked' CKD WAREHOUSE /ll the aggregates and parts collected *$ the Collection Staff of the C%D section are *rought to the warehouse' The collection staff ensures that all the parts as per packing list and schedule are collected and handed to A'/' for re3inspection' ,n case of minor rectification such as painting, cleaning, touch up etc' The re?ected items are returned to their respective sources' Telco9s C%D warehouse is well e-uipped with modern material handling e-uipments' )aterial handling is an important activit$ in the warehouse starting from the time material enters and goes out in the form of packed cases "finished products#' )aterial handling involves the movement of materials manuall$ or mechanicall$ in *atches or one item at a time in the warehouse' The movement is hori@ontal, vertical and com*ination of the hori@ontal and vertical' ulk items and aggregates are kept at their specified locations in respective pallets where as small items is stored in *ins or stores' Export packing *oxes are made of pinewood, which is lighter in weight and has the capacit$ to a*sor* moisture' 0ecentl$ pl$wood *oxes were tried due to non3availa*ilit$ of pinewood in the market' Pol$thene *agDsheets are used
Fortune Institute of International Business, New el!i >>
for wrapping of the items' Small items are packed in shipping cartons "Corrugated *ox#' Bhile packing Aualit$ /ssurance ensures that onl$ accepted items in right -uantities are packed in packing cases as per packing slips' ,n order to ensure that consignments are delivered to the consignee in factor$ fresh condition and to protect from atmospheric ha@ards during vo$age' Top most priorit$ is given on packaging design and packaging materials used' ,t was noticed sometime *ack that a great deal of wood, alongwith other packaging materials was *eing consumed for packing of C%D9s' 8urther *ecause of the wooden *oxes space re-uired for each C%D kit was -uite considera*le' Entire packaging method for some of the ma?or items was modified *$ switching from *oxes to pallets e'g' 0ear axle, Spring assem*l$, t$res and whenever possi*le packing of < units in place of 1 units is done' The result of the new process is ama@ing and not onl$ wood *ut other packaging materials like pol$sheets, steel angles, nails etc', is reduced' Jamshedpur cost per unit has also declined' 8or example cost saving on account of reduced wood for 4= units of rear axles alone was 0s' <15<' (ther *enefits included improved productivit$, *etter house keeping, less consumption of space per unit of C%D9s packed, customer satisfaction as well as ?o* satisfaction' Superior export packaging well designed shipping cartonsDunit cartons, wrapped in pol$thene *agDsheet and packed in pine wood *oxes find no packaging peer in the automo*ile industr$ and have won several prestigious awards from the ,ndian ,nstitute of packaging for excellence in packaging'
Fortune Institute of International Business, New el!i >6
PACKING OF CKD FOR BANGLADESH CONSIGNMENT

D */!&7+&-' -= G--4* EHC,HE CKD P#/B#(&'( 1 engines are packed in one *ox along with .oose components which are properl$ covered /nd put in cartons and once again covered with Pol$thene sheets and dropped in the *ox, containing the engines' 1 axles are packed in one *ox and small rear axles are installed on the pallets and covered *$ +assian and laminated with pol$thene "this is done for cost reduction#' 4= Springs are packed in 4 pallet' ,t is covered *$ +assain' 4 *ox consists of 4 cowl with associated parts like fuel' Tank radiator, eas$ ride seat, *umper, air tank, spare Bheel carrier etc' /t these parts are either packed in cartons or wrapped in pol$thene as re-uired' Small components of frame, "fastener, nut *olts, screws etc'# are wrapped in pol$thenes and then dropped in *oxes' 4= !nits are packed in 4 *ox along with loose components' 4= !nits pipes are wrapped in pol$thene and dropped in *oxes' < frames are fixed to a pallet' There are = pallets for 4= units' > t$res along with t$re tu*e and flap are strapped together with an iron hoop' 1 units of front axle are packed in one *ox' / structure is fitted inside the *ox into which the front axle is nailed'
0E/0 /K.E
SP0,HC /SSE) .R C(B. P/C%,HC (0 /CC0EC/TE (K
),SCE..EHE(!S ,
),SCE..EHE(!S ,, CE/0 (K P,PE P/C%,HC 80/)E P/C%,HC B+EE. 0,) TR0E T! E /HD 8./P 80(HT /K.E
Packing tags are affixed to the items, which are packed' The Packing tags give a complete detail a*out the items and also *ears the A'/' stamp'
>;
8or packing of the items the following materials are used *$ the Barehouse staff: 3 3 3 3 3 Booden *oxesDpallets' Shipping cartons "corrugated *oxes, made of craft paper#' Pol$thene sheetsD*ags' ituminised +ESS/,H Cloth' )iscellaneous packing items like hoop iron, nails, iron rods, moulded plastic protective' The cases which are read$ for dispatch contains the respective packing list and spells out: 3 3 3 3 3 The name and address of the importer Case no' Dimension of the case' Het weight' Cross weight'
W &("+ #'4 D&> '*&-' S" + /$> E'(&' C"#**&* N-. This is a ver$ important document' ,t contains the weight and dimension of the cases meant for export' The weight and dimension of the *oxes are o*tained form the dispatch section and the Engine Chassis no'is o*tained from the ,nspection Department'
The weight dimension sheet pla$s a vital role in preparing the /'0'1' ,t has to *e noted that C%D9s are dispatched in *atches of twelve units " for econom$ and case in shipment D transport#' The features of weight dimension sheet are : 4' Specifies the no' of C%D9s to *e exported "usuall$ 4= units# =' The )odel no' 2' DriveQ whether it is a 0+D or .+D' 1' Hame and address of *u$er or importer' 5' /'0'1 no' and date' <' SD) no' and date "stock dispatch memo# >' Description of CoodsQ like Engine, Cear*ox, 8ront /xle etc' 6' Case no' and case marketing e'g' ;677>D4 to ;677;D4 for engine ' This means that there are 2 *oxes of engines each containing 1 engine' ,st Case Case marketing Ho' of engines ;677>D4 1 V 4= engines' D4 is the identification for engine in the same wa$ D= is meant for gear *ox, 2 is for front axle and so on =nd Case ;6776D4 1 2rd Case ;677;D4 1
64
;' Het weight of each caseQ this is the weight of the case excluding the item "engine, gear *ox etc#' 47' Cross Beight of each caseQ this is the total weight of the *ox along with the item' 44' Total net weightQ net weight of each case K no' of cases' =477 %g K 2 cases V <277 %g' 4=' Total Cross BeightQ Cross Beight of each case x Ho' of case =1<7 %g K 2 V >267 %g' 42' Dimension of the cases measured in centimeters "l x * x h# 41' Ho of cases' This document also shows which engine no' is packed in which case and also mentioned the chassis no' This is more clearl$ shown in the specimen cop$ attached' 45' Case marking is also read out' 4<' The name of the seller Q "T/T/ E ,HD,/# The authori@ed person of the export department finall$ signs the document' "Sample of Beight dimension sheets are shown in the annexure#'
6=
A.R.@(=-! ! >-v#% -= CKD =-! A7-!+) /s mentioned alread$ in C !Is /'0'1 is used for to removal of goods, *ut unlike C !Is the description of the goods var$ *ecause separate cases are sent containing the aggregates' D *7#+/" N-+ C$> I'v-&/ Stock Despatch )emo "SD)# or Despatch )emo com*ines the ,nvoice itself' Stock despatch memo is prepared on the date despatch' The SD) is *ased on the /'0'1 and weight dimension sheet' This memo also serves as a Cate Pass for further transit of goods' The various features highlighted in the SD) are: 4' Hame and address of the consignor =' .icense no' of factor$' 2' Time of preparation and date' 1' Place, date and time of removal' 5' 0ate of excise dut$' <' Su* heading no' >' Hotification no' 6' Hame of excisa*le commodit$, motor vehicle in C%D condition' ;' /'0'1 no'
62
47' T$pe of vehicle' 44' Ho' of units' 4=' &alue of the Commodit$' The invoice also gives the description of the items of C%D, additional deliver$ rate, -uantit$ of items and value of each item' The invoice includes the packing and forwarding costs' The value of each unit is shown and also the total assessa*le value i'e' for 4= units is featured' The total excise dut$ of 45U is drawn on the total assessa*le value' The Despatch memo shows: 3 3 3 3 3 3 The chassis no' Case no' Total cases loaded of consignee' )ode of transportQ whether it is *$ road or sea' Hame of the Transport Compan$' )otor vehicle registration no'
1 copies of SD) are made and distri*uted accordingl$' 3 3 3 (riginal cop$ goes to *u$er' =nd cop$ goes with the transporter as excise Cate Passes' 2rd cop$ goes with the transporter as Excise Cate Pass'
61
1th cop$ is retained as an assessee cop$'
"/ sample Despatch note 3cum3 ,nvoice is shown in /nnexure#' B-'4) ,t is the same as alread$ descri*ed is C !Is' Bhen the despatch date of the goods is confirmed, a letter to the Superintendent "Central Excise# verification' The /'0'1s with ,nvoices attached along with the covering note "in duplicate# is sent to Supdt' "Central Excise# and an acknowledgement are o*tained from him' The warehouse is informed to keep the *oxes read$ for verification as per the list "sent to warehouse in advances#' ,nvoices are confirmed *efore going to Excise office that all *oxes are ties up with lead seals and stacked destination wise for eas$ identification' /fter =13hoursDnext da$ Central Excise personnel is called for ph$sical verification of the availa*ilit$ is confirmed' ,t is the description of the Excise personnel to open all *oxes or a percentage' The *oxes are to *e opened as re-uired *$ the Excise (fficers and each *ox is verified "(pen or Close# with reference to /'0'1 ,nvoice, case nos', no' of cases and destination' Permission is given after this to seal the *oxes and load them'
65
P! 5*"&7> '+ &'*7 /+&-' -= EA7-!+ C#!(The government of ,ndia has introduced compulsor$ pre3shipment inspection of selected items of export to ensure that the products confirm to high -ualit$ standards' 8or this the Export ,nspection Council "E,C# issues a certificate if the export product -ualifies to the desired standards' The application must *e su*mitted well in advance of the expected date of shipment' /fter processing the application the "ET/# Export ,nspection /genc$ fixes a date for inspection and the inspection is carried out on a sampling *asis' Telco does not have to go through all these formalities so a self certificate procedure is adopted' Telco is authori@ed to issue its own -ualit$ certificate *$ the Covernment of ,ndia and is responsi*le for the same' SHIPMENT The next stage is shipment of goods, shipping is the more popular method of despatching goods to an export *u$er than *$ air as the freight charges for shipping a cargo are ver$ much less than that of air freight' )oreover sometimes the ph$sical si@e of goods *eing shipped *ecomes a constraint for it to *e air freighted as in case of Telco, where the vehicles are exported' +ence, shipping is the main method of despatching goods for export from Telco' +owever, for some of the neigh*ouring countries like goods are despatched through road transport' angladesh,
6<
The shipping procedures cover various aspects from the time the goods leave the export warehouse till it is loaded on *oard the ship and the relevant documents for such loading are collected from the shipping compan$' Telco9s clearing and forwarding agents perform the ?o*s involved' TelcoIs Calcutta (ffice which arranges for shipment of goods on receipt of goods from Jamshedpur arranges to hand over necessar$ documents to the clearing and forwarding agents' Telco9s Calcutta office which arranges for shipment of goods on receipt of goods from Jamshedpur arranges to hand over
necessar$ documents to the clearing and forwarding agent' S"&77&'( D-/$> '+* /s soon as the export goods reach the warehouse, complete sets of shipping documents are passed on to the forwarding export' The documents comprises of:3 3 Despatch memo or invoice in case of C !9s and stock Despatch )emo is case of C%D9s' 3 3 Packing list "insurance claims can *e endorsed onl$ on packing list#' .etters of Credit covering the export order together with order confirmation or indent in original' 3 3 3 Certificate of ,nspection' C0 from "Cuaranteed 0eceipt form issued *$ 0 ,# in triplicate' /'0' 1 from in original and duplicate'
6>
Shipping draw*ack'
ills or
ill of export of goods under claim for dut$
(ut of the a*ove documents , except C0 form and shipping *ills all the other documents have *een descri*ed earlier' These two documents are explained *elow' GR F-!> /s per the exchange control regulations an exporter has to release the proceeds of the goods he has exported within 467 da$s from the date of shipment' 0 , to ensure this has introduced the C0 procedure' The mem*er in the right hand top corner and the date identifies the C0 form' ,t should indicate the exact -uantit$ and description of the item to *e exported and the value thereof in line with the confirmed order' Some of the other details that are furnished in the C0 form are the name of the exporter, the countr$ of destination the currenc$ in which pa$ment is to *e received and a declaration of the commission pa$a*le' The C0 form is su*mitted to the customs in triplicate along with other shipment documents to o*tain the necessar$ permission to ship the goods' The Custom department, after scrutini@ing, retains the original cop$ and forwards it to the 0 ,' The duplicate and triplicate copies are returned *ack for su*mission to the 0 ,, through the negotiating *ank'
S"&77&'( B&%% -! B&%% -= EA7-!+ -= G--4* $'4 ! /%#&> =-! 4$+< 4!#C.#/B
The Shipping ill is the main document re-uired *$ the customs authorities for granting permission for shipment' ,t contains the name of the exporter "or shipper#, his address, description, -uantit$ and value of the goods, no' of packages and the markings on them the amount of draw*ack claimed, the port of destination, the name of the ship and the name of the agent' 5 copies of shipping *ill or made, namel$ the customs and statistical cop$, the port trust cop$, the draw*ack cop$ and the export promotion cop$' The export promotion cop$ is utili@ed for the purpose of claiming incentives like Cash Compensator$ support and ,mport 0eplenishment licenses'
THE SHIPPING PROCEDURES (6) R * !v#+&-' -= *"&77&'( *7#/ The first step for the shipment procedure *$ sea is that of reservation of shipping space' The process of cargo shipment commences with reservation of shipping space in a vessel sailing to a desired destination on or *efore the contracted date of deliver$ reservation should however *e got done soon after the receipt and confirmation of export order' P!-/ 4$! =-! R * !v#+&-' -= S"&77&'( S7#/ "a# Exporter approaches the shipping compan$ through its agents or freight *rokers for reservation of shipping space' 0eservation is generall$ done six to eight weeks *efore the ship calls at the port of despatch'
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"*# 0eservation is done through
ooking )emo9sD notes for which there is
no particular format' ooking )emo9s contain the following details: "i# "ii# "iii# Hame and address of the shipper' T$pes and details of cargo' Port of loading and despatches'
Cenerall$ the shipment of vehicles from Telco is as general cargo in containers for shipments of C%D9s where C !9s are exported, a special t$pe of ship is used vi@' 0(D0( ships or 0oll on and 0oll of ships' The specialt$ of these ships is that the vehicles can drive itself up in the hold of the ship' (1) S"&77&'( O!4 ! Depending upon the availa*ilit$, the shipping compan$ or agent will *ook the desired shipping space and issue a shipping order, its original is sent to the exporter and duplicate cop$ endorsed to the Commanding officer of the ship for receiving on *oard the ship, the cargo specified therein' (?) T!#'*7-!+#+&-' +- P-!+ /fter reservation of shipping space the goods are re-uired to *e transported from the factor$ or warehouse to the port either *$ road transport or rail which ever is -uicker'
;7
(@) C$*+->* C% #!#'/ /ccording to prevailing customs regulations, no cargo meant for export can *e loaded on a ship unless the customs authorities at the port accord their approval' /n officer of the customs department of the rank of an appraiser called ICustom /ppraiserI scrutini@es the complete set of shipping documents for determining whether: The description, -uantit$, and value indicated in the shipping *ill for which permission is sought for export correspond with those mentioned in the contract entered into with the *u$er and whether the$ are authenticated in the letter of credit received from the *u$er' The prices are correct' The formalities relating to exchange control, -ualit$ control, and inspection and licensing have *een complied with wherever applica*le' The customs department also checks the C0 form and Shipping various details as mentioned earlier' (D) C#!+&'( O!4 ! The next stage is to move the export cargo l$ing in the warehouse inside the port area for loading on *oard the assigned ship' The forwarding agent o*tains the permission to ph$sicall$ move the goods inside the port area from the Port Trust /uthorities' The permission called the IC/0T,HC (0DE0I is issued *$ the Shed Superintendent after ills for
;4
verif$ing the endorsement of the steamer agent on the port trust cop$ of the shipping *ill as also the endorsement of the customs on its duplicate cop$' (:) C$*+->* EA#>&'#+&-' -= C#!(- -= D-/B* The remaining copies of the shipping documents are presented to the customs appraiser for examining at the docks whether the goods packed and kept read$ for shipment are the same as mentioned in the shipping documents' /fter the endorsement of the Customs /ppraiser on the duplicate cop$, the goods are out of charge of the customs' ,n Telco, normall$ the goods come sealed from the factor$ premises *earing the excise seal and hence are not ph$sicall$ inspected *$ the Customs /ppraiser' (3) L + S"&7 O!4 ! The Preventive (fficer of the Customs Department who supervises the loading of the cargo on *oard the ship issues this' The clearing and forwarding agent o*tains this permission to load goods on the ship *efore the loading from the preventive officer' This is given as an endorsement on the duplicate cop$ of the shipping *ill after which it is handed over to the shipping compan$ agent, who on the *asis of this arranges for the loading of the cargo' The I.et Ship (rderI thus constitutes an authori@ation *$ the customs to the shipping compan$ to accept the cargo on *oard the ship'
Fortune Institute of International Business, New el!i ;=
(;) M#+ R / &7+ /s soon as the goods are loaded on the ship, the captain of the ship issues the I)ate 0eceiptI which is an acknowledgement of the receipt of goods on the ship' The )ate 0eceipt which is furnished to the Port Superintendent incharge also contains other details like, *rief description of the goods, num*er of packages, the shipping marks, name of the ship, date of issue etc' The captain of the ship also gives a comment in the )ate 0eceipt on the condition of the cargo at the time of receipt on *oard the ship' Such comments are usuall$ given for damages in packing or improper packing are ultimatel$ reflected in the *u$er' +ence it is generall$ tried to o*tain a clean I)ate 0eceiptI without an$ adverse comments' (9) P-!+ T!$*+ D$ * The clearing and forwarding agent collects the )ate 0eceipt surrendered *$ the captain of the ship to the Port /uthorities after pa$ing the port charges' The )ate 0eceipt is then furnished to the Preventive officer who records the certificate of shipment on the duplicate and export promotion copies of shipping *ill, as also on the original and duplicate copies of /'0'1 forms and returns them to the clearing and 8orwarding agent' ill of .ading and m$ not *e accepta*le to the
;2
(62) B&%% -= L#4&'( The clearing and forwarding agent collects the copies of the ills of .ading from the shipping compan$ agent after surrendering the )ate 0eceipt' ,t is one of the most important shipping documents, as it is a negotia*le document for it carries with it the legal title of the goods shipped on *oard the vessel' / ill of .ading has the following particulars: "i# "ii# "iii# "iv# "v# The goods that have *een loaded' Auantit$ of the goods and the total num*er of packages' The port of shipment and the port of discharge' The name of the ship and the amount of freight paid' The date of the ill of .ading' The date is important *ecause the date on *ill of lading is taken as the date of shipment and should *e within the validit$ period as per the Documentar$ .etter of Credit' /fter the end of the entire process the forwarding agent returns the following documents: "i# "ii# "iii# "iv# Cop$ of the invoice dul$ attested *$ the customs' Export promotion cop$ of the Shipping ill' 8ull set of clean on *oard ill of .ading' (riginal .etter of Credit and the customerIs order or contract'
;1
"v#
Duplicate of the /'0' 1 form
/ll the relevant documents are then su*mitted to the *ank for negotiations as per the .etter of Credit' EA7-!+ +"!-$(" %#'4 /$*+->* .-!4 ! /s alread$ mentioned earlier Telco is also despatching goods to neigh*ouring countries like angladesh through road transport' ,n all such cases the procedural aspects are identical to those in case of shipping explained a*ove except for the fact that instead of a *ill of lading, a 0oad Deliver$ Challan is issued' The contents of the 0oad Deliver$ Challan and the *ill of lading are more or less the same and serve the same purpose'
NEGOTIATION
OF
DOCUMENTS
AND
REALISATION
OF
EXPORT PROCEEDS (ne the goods have *een ph$sicall$ loaded on *oard the ship, the arrangements are made to o*tain the pa$ment *$ su*mission of relevant documents to the *ank' The process of o*taining pa$ment is called SHegotiating the documentsS through the *ank' / complete set of documents called IHegotia*le set of documentsI are su*mitted for the purpose of negotiation, consisting of the following: "i# "ii# Commercial ,nvoice together with the packing slip and the draft' Duplicate and triplicate copies of C0 8orm'
;5
"iii# "iv# "v#
)arine ,nsurance polic$ in duplicate' .etter of Credit in original 2 negotia*le copies and as man$ non3negotia*le copies, as re-uired, of the ills of .ading'
/ complete set of negotia*le documents is presented to the negotiating *ank through whom the .etter of Credit has *een advised' The .etter of Credit opened *$ the *u$er through the *ank "opening *ank# authori@es drawing a ill of Exchange against which pa$ment will *e made *$ the opening *ank on *ehalf of the *u$er provided the terms and conditions of the letter of credit have *een complied with' / ill of Exchange is a draft drawn *$ the negotiating *ank on the opening *ank, and is an instrument of pa$ment, which is negotia*le' The *ill of exchange drawn should correspond to the conditions stipulated in the .etter of Credit' The .etter of Credit further specifies the details of the despatch of documents' The process of negotiation is complete with the despatch of documents' /s soon as negotiations are completed the *ank sends the duplicate cop$ of the C0 form to the 0 , after due checks' The triplicate cop$ is retained until the *ank ph$sicall$ receives the pa$ment' (nl$ after the receipt of the pa$ment it is forwarded to the 0 , for its record'
;<
OBTAINING VARIOUS EXPORT INCENTIVES

Commercial ,nvoice attested *$ the *ank is re-uired for the use in claiming incentives 'The *ank attests the extra copies of the commercial invoice supplied and returns them' / certificate known as *ank certificate is re-uired to claim incentives' This certificate descri*es the products exported, its value, the details of the ,nvoice, the ill of .ading, the rate of conversation for the exchange used etc' The various export incentives are as follows: Cash compensator$ export ,mport replenishment license Dut$ draw*ack and Excise dut$ refund CASH COMPENSATORY SUPPORT The scheme of cash compensator$ support has *een extended *$ the government of ,ndia for certain selected products to ena*le exporters to withstand competitive conditions in the export market' The -uantum of cash compensator$ support is usuall$ calculated as a percentage of net 8( values which arrives after all the outgoing in the account of overseas *u$er' The percentage of assistance applica*le to various products is made known through the Export Promotion Council'
;>
IMPORT REPLENISHMENT SCHEME The -uantum of the import replenishment is also calculated as a percentage of net 8( value of exports' ,mport license are issued for the raw materials, components, consuma*les stores and packing materials in accordance with the relevant provisions of the import polic$ of registered exporters' The application of the cash assistance and the import replenishment *esides the usual application forms is accompanied *$ the following document: Export promotion cop$ of the shipping *ill dul$ stamped and endorsed on the reverse and signed *$ the customs authorities' Commercial invoice dul$ certified *$ the negotiating *ank' ank certificate in original'
Statement of exports for the period, which cash compensator$ support, is claimed' DUTY DRAWBACK Dut$ draw*ack ma$ *e defined as a refund given *$ the government of ,ndia on all custom dut$ paid on all raw materials, components and consuma*les utili@ed in the manufacture of final product for export' The dut$ draw*ack is allowed as per the Customs /ct 4;<=, which the customs authorities have laid down, also known as Customs and Excise dut$ draw*ack rules'
;6
EXCISE DUTY REFUND /gainst exports the refund of the dut$ can *e either *$ the wa$ of: Pa$ing the dut$ and recovering it after exports, known as re*ate of excise dut$' Enter into a *ond with the excise authorities so that the goods can *e cleared from the factor$ without pa$ment of dut$, otherwise known as export under *ond' The documents involved are: Hon duplicate cop$ if the /'0'1 dul$ certified *$ the customs' Hegotia*le cop$ of ill of .ading' (riginal cop$ of Cate Pass'
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COMPANYES PERFORMANCE 5(699D 5699:)

PRODUCTION A ND SALES OF COMMERCIAL AND PASSENGER VEHICLES) The *uo$anc$ in the market for the commercial vehicles continued through the $ear and the demand for the compan$Is vehicles exceeded expectations' During the $ear, sales reached an all time high of 4,64,=77 vehicles 3 a 24U increase over the previous $ear 'The three manufacturing plants did an outstanding ?o* in achieving record level of production to keep pace with the market demand' Domestic sales of medium D heav$ commercial vehicles ")D+C&# and .ight Commercial &ehicle ".C&# increased *$ =>'>U and 45'4U respectivel$ 'The compan$ increased itIs domestic market share from >4'6U to >='>U in the )D+C& segment and from 56'6U to <='1U in the .C& segment' ,n the multi3utilit$ segment, the Tata Sumo, which was introduced last $ear, continued to *e a runawa$ success' During the $ear it achieved a market share of =='1U in its product segment 'To meet the continued high demand for the Sumo and in view of the su*stantial order *acklog, a conscious decision was taken during the $ear to utili@e much of the availa*le capacit$ ear3 marked for the Sierra and the Estate &ehicles 'The availa*ilit$ of these two products these two products therefore was reduced and conse-uentl$ their market share in the luxur$ car segment declined to 6'6U'
477
EXPORTS: The Compan$ exported 4<,564 vehicles ='6U increase in -uantit$ over the previous Rear' The level of export sales was *elow expectations' /mongst the various contri*uting factors were the political distur*ances in angladesh 'The total value of TelcoIs export was
0s<12crores for 4;;53;<, which includes 0s'<'=crores of commercial vehicles aggregates exported to ,ndonesian &enture of )ercedes 3 en@' The compan$ also continues to suppl$ casting to the +itachi Construction )achiner$ trading compan$ in Japan'
474
COMPANYES PERFOFMANCE5 (699:56993)

SALES AND PRODUCTION OF COMMERCIAL AND PASSENGER VEHICLES) Tighter credit , a drop in the freight rates on the road transport and a slow3 down in the economic growth towards the latter parts of the $ear all
contri*uted to a slackening in the off take of the Compan$Is &ehicles in the second half' Despite these conditions the compan$ was a*le to achieve itIs highest level of sales volumes' Sales at =45, =<4 vehicles were 4;U higher than the previous $ear' This performance was possi*le through the close co3ordination *etween the marketing and sales functions and the three manufacturing plants which reacted swiftl$ in altering product mix to meet the changes in market demand' Domestic sales of )edium D+eav$ commercial vehicles crossed the 477,777 mark during the $ear' The sales of 47=,;<7 )D+C&Is in the $ear were =7U higher than the previous $ear and the Compan$ )aintained its dominance in this segment with a market share of >=U 'The $ear saw the introduction of )D+C&Is powered *$ Cummins engines manufactured *$ Tata Cummins .td'The initial market response and initial market response and customer feed*ack for the engines had *een encouraging and the Compan$ proposed to progressivel$ increase production of vehicles with Cummins engines'
47=
The Sumo, which was introduced in the market in 4;;1, was an overwhelming success and notched up a market share of 24'=U in the )ulti3 utilit$ &ehicle ")!&# segment up from =='2U in the previous $ear' To ena*le the Compan$ consolidates its position in this segment, production capacit$ earmarked for the Sierra and Estate models was allocated to the Sumo' This has resulted in a sharp decline in a sharp decline in the availa*ilit$ of the Sierra and Estate and the Compan$Is market share in the high 3end car segment has conse-uentl$ dropped to <'1U from 6'6U' EXPORTS: The compan$ exported 4<,775 vehicles during the $ear' This was 2U less than the 4<,564 vehicles shipped last $ear' Bhile this performance was *elow expectations automo*ile exports from the countr$, in general, showed a decline' The total num*er of automo*iles "excluding passenger cars# exported from ,ndia declined 4<U from the previous $ear' The total value of the compan$Is exports during the $ear increased 5U of 0s<<1'61crores'The Compan$Is range of lighter vehicles of the =7> famil$ gained acceptance in the export markets and a accounted for nearl$ half of the volumes exported in the $ear' / third of the exports were to the European continent' The compan$ started exporting vehicles to /ustralia and increased its presence in the enelux countries' Hew product variants in the form of crew ca* picked up and the .P(3424< *us were offered to overseas customers and the =7> famil$ of vehicles fitted with tur*o charged engine were introduced on a limited *asis in the European market' The initial market response for all these vehicles were encouraging'
472
COMPANYES PERFORMANCE 5(6993 5699;)

PRODUCTION AND SALES OF COMMERCIAL AND PASSENGER VEHICLES: (ff3take of the compan$Is vehicles was affected throughout the $ear' Bhile all the efforts were made to maximi@e sales in a severel$ depressed market, the compan$ overall sales at 45=,;=6 vehicles was =;U lower in the previous $ear' The )ediumD+eav$ commercial vehicles ")D+C&# segment was the worst affected' /gainst a 2;U drop in industr$ sales of )D+C&I the compan$ sales at 5;,21> vehicles were 1=U lower than in the previous $ear' Conse-uentl$ the companies market share in this segment declined from >=U to <6U' ,n the light commercial &ehicles ".C&# segment, industr$ sales declined *$ =>U over the previous $ear' The compan$ sold 216>4 .C&Is, which was 2=U lower than the previous $ear' The companies market share in the segment was <1U as compared to <>U achieved in the previous $ear' The Sumo continued to do well in the multi3utilit$ segment with an increased market share of 2=U from the 24U achieved last $ear' ,n the process, it *ecame the first vehicle from the compan$ to record sales of over 477,777 in ?ust three $ears since its introduction' The Tata Safari was launched in the last -uarter of the $ear' This was the first Sports !tilit$ &ehicle "S!&# to *e introduced in ,ndia and the initial response was encouraging' /vaila*le in *oth 1 x = and 1 x 1 version the
471
compan$ sold more than 4777 vehicles in three months since its introduction' EXPORTS: The compan$ exported 41,224 vehicles during the $ear that was 47U less than in 4;;<3;>' The total value of exports also decreased *$ 47U to 0s<77'>6crores' The South East /sian Crisis and the slow down in angladesh severel$ affected exports to these regions' ,t is heartening to note that Europe accounts for 17U of the compan$Is export within ?ust five $ear since the commencement of exports to this sophisticated market' The =7> famil$ of the vehicle was then well accepted in most countries and accounted for <1U of the volume exported' The Telcoline 1 x 1 version was also tested in /ustralia and the initial response was enthusiastic' The model ena*led the compan$ to address the large /ustralian pickup &an market'
475
COMPANYES PERFORMANCE 5(699; 56999)

PRODUCTION AND SALES OF COMMERCIAL AND PASSENGER VEHICLES) Bith a view to controlling an inventor$ *uilt up, the compan$ consciousl$ curtailed production significantl$ in the first half of the $ear' Correspondingl$ sales to dealer inventories at lower levels and with a *etter *alance *etween suppl$ and demand, the compan$ was a*le to register higher sales in the second half of the $ear' The overall demand however continued to remain depressed and the sales were 4<U lower in num*ers as compared to the previous $ear' /s a conse-uence of its dealer inventor$ reduction strateg$, the compan$9s sales of mediumDheav$ commercial vehicles ")D+C&Is# during the first half declined *$ 1;U over the same period in the previous $ear resulting in a 44U loss of market share in the half' The compan$ however increased itIs sales in the second half of the $ear and achieved an increase of 1U in market share, ending with a $ear3end market share of <<U' ,n the .ight Commercial &ehicle ".C&# segment, industr$ $ear 3on3$ear sales in num*ers declined *$ >U' /lthough the compan$ registered 2U lower .C& sales than in the previous $ear, the compan$ increased itIs dominance in this segment and increased its market share to <>U as compared to <1U achieved in 4;;>3;6'The )ulti3!tilit$ &ehicle ")!&# segment was the most affected during the $ear with industr$ sales falling *$ 4<'5U over the previous $ear, the steepest decline among all '
47<
the segments of the four wheeler automo*ile market' The Compan$ under performed in this segment and its market share in this segment declined *$ 5U to =6U as compared to 4;;>3;6' The Compan$ expected to regain its share in this highl$ competitive segment 'The Tata Safari, which was launched during the last financial $ear, recorded sales of over 1,=77 units in 4;;63;;'This model was ad?udged the S M-*+ A77 #%&'( M$%+&5U+&%&+< V "&/% S *$ J' D' Power and /ssociates in their 4;;6 /utomotive
Performance Execution and .a$out "/PE/.# stud$ing the ,ndian )!& market ' SMALL CAR The compan$Is small car, the Tata ,ndica was officiall$ launched on Decem*er 27,4;;6, evoking an overwhelming response in the ,ndian market with initial orders with full pa$ments for over 4,45,777 Cars' / total of =,4<< cars were sold as at the end of the $ear 'The automated assem*l$ line achieved commercial operations in earl$ )arch 4;;; 'The automated feeder plants like the Engine shop, Press shopQ )aterial handling e-uipment etc' did not, *$ the $ear end achieve commercial operations and while *eing cali*rated and set to esta*lish overall integration of the total production facilit$ were *eing operated manuall$' This was *eing esta*lished and the compan$ was in position to meet the market demand in the current financial $ear' The compan$ had setup an independent retailing network for the car and the other multi3utilit$ Dpassenger vehicles' This would permit a fresh approach in addressing this segment whose needs and expectations are different from that of *u$ers of commercial vehicles' The dealership strength for cars and
Fortune Institute of International Business, New el!i 47>
passengers vehicles including multi3utilit$ vehicles then standing at 446' Existing commercial vehicles dealerships have shown an interest in addressing the passenger vehicle *usiness, would *e su*?ected to a rigorous selection procedure and the dealerships for commercial vehicles and passenger vehicles would *e separate, thus providing ade-uate focus in each line of *usiness in keeping with different customers needs' EXPORTS During the $ear, the compan$Is exports of commercial and utilit$ vehicles dropped =;U in num*er over 4;;>3;6' The total value of the compan$Is export decreased *$ 4<U to 0S'575'52 Cr' 'The depreciation in various /sian currencies made some of the vehicles manufactured in /sia extremel$ competitive and this has *een one of the contri*utors to the lower level of export activit$ *$ the compan$' The highl$ competitive and sophisticated markets including Europe and /ustralia accounted for 5>U of the compan$Is total export' /fter the T/T/ SafariIs international at the Ceneva motor show in )arch ;6 two SafariIs successfull$ completed 46777%)s' .ondon to CapeTown 1K1 adventure rall$ in which a num*er of leading internationall$ renowned vehicles also participated 'The Safari has recentl$ *een launched ,tal$, Spain and )alta and has received an encouraging response' The companies renowned export trust in Sri .anka and angladesh showed positive results and ena*led the compan$ to achieve its targeted *usiness in these countries' The compan$ is currentl$ engaged in a ma?or effort to increase sales of commercial vehicles powered *$ Cummins engines in overseas markets' The initial offering of these vehicles have shown encouraging results, especiall$ in its traditional markets'
476
JOINT VENTURES
T#+# C$>>&'* L&>&+ 4 (TCL# During the $ear TC. supplied <,=7> engines to the compan$' Turnover for the 46 month period ended )arch 24, 4;;; was 0S'=66'1> Cr' "Previous $ear ended Septem*er 27,4;;> 0S'=22'5> Cr'#' The compan$ proposes eventuall$ to switch over from its existing range of engines for )D+C&Is to those manufactured *$ TC. in colla*oration with Cummins Engine Co',nc !S/' M !/ 4 * B 'F I'4&# %&>&+ 4 (MBIL) Bith the further increase in the capital of ) ,. from 0S' 157 Crores to <77 Crores, the compan$Is holding in ) ,. has *een diluted to 41U ' This is in keeping with decision not to invest an$ amounts over its initial investment of 0S' 61 Crores in ) ,. sales during 4;;63;; were 4,77< SES class cars, which included exports of 57= units' Turnover during the $ear was 0S' =4='< Crores "Previous $ear3 0s'2='> Crores'#' T#+# 5H-%* + %&>&+ 4 (THL) ,n the $ear 4;;63;;,T+. produced <,5=5 tur*ochargers and sold <,666 tur*ochargers' Het sales turnover for the $ear was 0S 6'4> Crores "Previous $ear 0S 2'42 Crores#' T+., which supplies the tur*ochargers to TC. for fitment on its engines, would also see a marked improvement in performance once the volumes for TC. *uild up'
47;
C-'/-!4 M-+-!* L&>&+ 4 (CML) C). was appointed as the compan$Is dealerIs for passenger vehicles in Delhi, )um*ai, angalore, +$dera*ad, Chennai, .ucknow and .udhiana ',t has also ac-uired the dealership of )ercedes3 en@ ,ndia .td' )um*ai' During the $ear, C). sold 4,;21 cars and achieved an overall turnover of 0S 4=<'6= Crores for the $ear 4;;63;;' Bith sales of the Tata3,ndica expected to *e much higher in the current $ear C). should *e a*le to consolidate its position in the car retailing market' JOINT VENTURES ABROAD 8or the $ear ended Decem*er 24,4;;6, Tata Precision ,ndustries "TP,#, Singapore, achieved a turnover of Singapore T='1 million "4;;>3Singapore T5'7 million#' This was mainl$ due to the fact that *usiness in general was influenced *$ the economic crises that *efell almost all countries in the /SE/H region' TP,Is *usiness was particularl$ affected due to the drop in customer demand for electronic items' Due to the loss of Singapore T='=7 million "4;;>3loss of Singapore T 7'25 million#, no dividend was paid for the $ear' Bith present indications of improved *usiness, including su*stantial orders from a new customer, TP, expects to wipe out its losses over the next two $ears' Hita Compan$ .imited, the Compan$Is ?oint venture in angladesh which assem*les T/T/ vehicles for the angladesh market, sold 664 vehicles to $ield a turnover of T% <77'> million "approximatel$ 0S 1;'4 Crores# for the $ear 4;;>3;6 and declared a dividend W45U' The dividend amount of !ST 11,211 was paid to the Compan$ in )arch 4;;;' Sales in 4;;63;; were lower at 567 num*ers'
Bith the /utomo*ile market in angladesh showing signs of recover$, the performance during the current $ear was expected to *e *etter' FINANCIAL RESULTS (R*. I' C!-! *)
699D59: i# Turnover ii# Profit for the $ear *efore tax iii# Tax for the $ear a# Bealth tax *# ,ncome tax iv# Profit after tax v# .eave provision earlier $ears for 7'2> =27'22 527'7= "41'>6# X 47'67 4'47 =2>'77 ><='2< 3 3 6'=5 4'41 22'77 =;1'<< 3 3 3 ;>'1< 3 7'2; 3 ;'>7 >664'76 ><7'>= 699:593 474=6'1= 4777'1< 699359; >2<='>; 2=6'67 699;599 <<2>'75 47>'4<
vi# Tax provision for earlier $ears vii# ,nvestment allowance "!tili@ed# 0eserve Britten *ack
viii# De*enture 0edemption 0eserve ix# alance *rought forward from previous $ear /mount /vaila*le appropriation for "5='77# <<'>1 "477'77# 66'2< "57'77# 426'27 3 4=6'4=
524'2<
>56';>
26=';>
==5';>
444
APPROPRITION i# Ceneral 0eserve ii# Proposal dividend iii# Tax on Proposed dividend iv# alance Carried to 66'2< 426'27 4=6'4= 427'>> 277'77 412'77 3 177'77 =77'<4 =7'7< 477'77 417'>< 41'76 47'77 ><'>< 6'11
alance sheet 524'2< >56';> 26=';< ==5';>
44=
TURNOVERS (R*. &' /!-! *)
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1992 1993 1994 1995 1996 1997 1998 1999
"Rear Ending )arch# EXPORTS (R*. &' C!-! *)
700 600 500 400 300 200 100 0

1992 1993 1994 1995 1996 1997 1998 1999
442
VEHICLES SOLD (&' +"-$*#'4)
250 200 150 100 50 0
Domestic Exports
1992
1993
1994
1995
1996
1997
1998
1999
441
G EA7-!+ (CKD0* H S7#! 7#!+* HCBU0*) "in Crores#
4777 ;77 677 >77 <77 577 177 277 =77 477
4;;5
4;;<
4;;>
4;;6
4;;;
445
EXPORT OF CHASIS 2500 2000 1500 1000 500 0 1996-97 1997-98 1998-99 1999-00 1020 2115 2187 1412 EXPORT OF CHASIS
44<
YEAR
BDESH
EGYPT
MALAYSIA
KENYA
IAMBIA
NAMBIA
NIGERIA
S.L
TOTAL
;73;4 ;43;= ;=3;2 ;23;1 ;13;5 ;53;< ;<3;> ;>3;6 ;63;; ;;3 =777
=1 ==6 217 >65 =7=1 4;<6 4661 =5= 466 <1= 16 >=
47>= 54= <7 =5= 6 267 <>= =1 4= 1 6 2= 1 1 1 47
47;< >17 117 4754 =72< =25= =55< 2=1 =>= <5=
PRODUCTION AND DESPATCH OF CKDH CBUHSPAREPARTS IN LAST FEW YEARS 699951222 Total Prod Total Despatch 15765 11;51 699;56999 22;>5 2151= 69935699; 25;76 2<=7= 699:56993 577<5 1;>25
44>
CONCLUSION
The Export Department of Telco has a ver$ efficient and well3coordinated team of emplo$ees' The Compan$9s Export turnover has grown *$ =7 per cent to 0s' <7; crores from 0s 57< crores in the previous $ear' Telco in its -uest to increase -ualit$ and efficienc$ of the various departments has introduced the S<*+ >* A77%&/#+&-' =-! P!-4$/+* "S/P# s$stem' The entire functioning of the various departments shall have a new dimension with the introduction of S/P, which has *een recentl$ introduced' Bith the implementation of S/P s$stem the compan$ is to *enefit from the fast and effective transactions to execute the Export (rders and ensure Customer Satisfaction' Telco with its exports of Completel$ uilt !nits, Completel$ knocked
Down &ehicles and Spare parts to more than a 477 countries has proved its name in the /utomo*ile industr$' Bith the increase in competition and li*erali@ation of the econom$ Telco has to maintain world standards and has to increase its product -ualit$ efficienc$ and innovation and maintain world class standards if it wants to survive in the world market' Telco should also emphasi@e on exploring those market which are still untapped ,for ex: the European )arket 'European market are re-uired to *e explored as it is one of the most competitive market at present and will *e in the next centur$ i'e'=4st Centur$' 8urther improvement in the field of packing and service
will strengthen Telco9s performance in export of its commercial vehicles'
446
BIBLIOGRAPHY
ANNUAL REPORT 4;;53;< 4;;<3;> 4;;>3;6 4;;63;;
WEB SITE
www'telecoindia'com www'tata3telco'com www'tata'comYtelco'
MAGAIINES /uto ,ndia )otoring usiness Borld usiness ,ndia
44;
TELCO QUALITY POLICY

Telco is committed to maximi@ing customer satisfaction and strives to achieve the goal of excellence through on going developments' )anufacture and sale of R %&#.% J S#= J C-*+ == /+&v -ualit$ products and services of ,nternational Standards, using environmentall$ sustaina*le technologies for improving levels of efficienc$ and productivit$ within its Plants and /ncillaries' Telco also has a commitment towards improving the -ualit$ of its emplo$ees *oth within and outside its plants and offices, through improved work practices and social welfare schemes'
4=7
ACKNOWLEDGEMENT , express m$ gratitude to the management of TATA ENGINEERING AND LOCOMOTIVE COMPANY LIMITED for allowing me to do a Pro?ect on KEXECUTION OF EXPORT ORDERSK in Telco, Jamshedpur as part of m$ management stud$, providing me with all the facilities and co3 operation during m$ Pro?ect Bork' , am extremel$ grateful to M!. S$4"#'*"$ M&*"!# "Sr' )anager, Export &Spare parts Division# for his valua*le guidance and inputs throughout m$ pro?ect work' , also extend m$ sincere thanks to M*. P#4>#%#+# and M!. E8#F A"> 4 for their invalua*le guidance and encouragement' , shall never forget the valua*le contri*ution and co3operation provided *$ the staff of the various divisions of Telco i'e' The Export & Spare parts Division, /PP&C, &ehicle Storage and )TC'
4=4
CERTIFIC"TE
This is to certif$ that the Pro?ect 0eport entitled LEXECUTION OF EXPORT ORDERS &' T %/-J JamshedpurG is the original work done *$ )iss' Shu*hara Cupta for fulfillment of the re-uirements of )aster of usiness /dministration, 8ortune ,nstitute of ,nternational Delhi' usiness, Hew
)r' Sudhanshu )ishra' Senior )anager' Export &Spare parts Division' Tata Engineering & .ocomotive Compan$ Jamshedpur'
.td'
4==
#ONE $%ST FOREE&ER STRI&E FOR E'CELLENCE, OR E&EN (ERFECTION, IN T"S) *O+E&ER S$"LL, "N E&ER BE S"TISFIE +IT* T*E SECON BEST#,
J.R.D.
4=2

Telco JSR

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Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

TATA ENGINEERING AND LOCOMOTIVE COMPANY LTD. (JAMSHEDPUR)

Execution of Export Orders from TELCO, JSR

ALL YOU WOULD LIKE TO KNOW ABOUT TELCO

en@truck out' / colla*oration with !siness Emmile

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

>=77 crores turnover during the financial $ear 4;;53;<'

Execution of Export Orders from TELCO, JSR

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Execution of Export Orders from TELCO, JSR

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

*lowers make cores'

Execution of Export Orders from TELCO, JSR

ackhoe # EK3477 "47 Ton# had *een introduced '

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

CAPITAL EQUIPMENT MANUFACTURING PLANT ENGINEERING/ GROWTH/MB/CTR

and reconditioning re-uirements of the production shops of Telco'

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

PLANT ENGINEERING BASICALLY CONSISTS OF THE FOLLOWING THREE AREAS

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

ENGINEERING SERVICES DIVISION

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Execution of Export Orders from TELCO, JSR

activities for the various Divisions'

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

MODEL T/T/ 4547' T/T/ 4=47' T/T/ =14<' T/T/ =54<'

TYPES OF VEHICLE T0!C%' T0!C%' T0!C%' T0!C%' T/H%E0'

T/T/ 4=47 .P' T/T/ 4547 .P(' T/T/ 4242 .P('

!S' !S' !S' LCV PRODUCT RANGE)

MODEL T/T/ 17> T/T/ <76 T/T/ <7;

TYPE OF VEHICLE &/HS' &/HS' &/HS'

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

FUNCTIONS OF SPARE5 PARTS DEPARTMENT

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

Fortune Institute of International Business, New el!i

Execution of Export Orders from TELCO, JSR

TELCO SPAREPARTS JAMSHEDPUR

Claim DP "BD+# HDP "BD+#

CDS /D0C C./,)