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Submitted in partial fulfillment of the requirements for the award of the Degree of


Submitted by


Under the guidance of Mr. Romel Stephen

June - July 2011 DC School of Management and Technology

Pullikkanam, Vagamon, Idukki 685503 Tel: 04869 248322, 248323


I hereby declare that the project report titled The efficiency of supply chain management of IT products in Keltron undertaken in Keltron, Thiruvananthapuram submitted to Mahatma Gandhi University is a record of the original work done by me and no part of it has been submitted earlier for any Degree, Post Graduation or similar of any other university or institution.

Place: Pullikkanam Date:

Signature: Name: J JAYAKRISHNAN

Certificate from the Company


First of all, I thank the God Almighty for his blessings to complete my Project successfully. I would like to express my heartiest gratitude to Mrs. Betty John, DGM of keltron TVM, . Kerala State Electronics Development Corporation Limited for giving me an opportunity to associate myself in the organization and to carry out my project in Keltron. I would like to thank our Director Brig. Ashok Kumar for giving me an opportunity to undergo this project. I would also like to extend my gratitude towards my course co-ordinator Mr. Umesh Neelakandan and project guide Mr. ROMEL STEPHEN, Faculty, DCSMAT for his guidance, constant interest and encouragement which has enabled to complete my project successfully. I would also like to express my special thanks to all the department heads that I have visited for their support, information, co-operation, advice to complete my project and would also give my sincere thanks to all the staff and the members of KELTRON ,Trivandrum, In addition, I express my affection to my beloved parents, friends & all my colleagues for providing support throughout the study.


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Title Title of the project Declaration Acknowledgement Executive Summary Industry Profile Company Profile Design Of Study Literature Review Data Analysis and Interpretation Findings and Suggestions Conclusion

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KELTRON: Keltron is Indias first and the largest electronics corporation in the State sector. Keltron has been a catalyst in making electronics work in almost every aspect of our daily life, since 1973. Today, we live in a technology-driven world where speed, flexibility, intellectual capital development, and networks have become the basis of value creation - as connectivity and interactive technologies pervade all business activity. In this technology-driven environment, Keltron finds the assimilation, adoption and integration of technology in creating innovative solutions as the very basis of survival. Keltron's success has been in making technology work rather than inventing it. Keltron has been a catalyst in making electronics work in almost every aspect of our daily life, since 1973. Keltron's strength lies in the stable foundation and experience built over the years, its strong human capital, its nation-wide network and its agility to adapt itself to change. With over a 30-year long track record as a manufacturer of sophisticated electronic devices and systems, Keltron presents itself in the global market as a one-stop-shop for manufacturing, system integration, and after-sales-support in India. Recently, Keltron has added to its repertoire, a set of knowledge services to foster greater global competitiveness for Indian industry as well as to ensure quicker innovation; and an independent division for project consulting to extend the benefits of its large knowledge capital in the form of comprehensive solutions to customers in several market segments worldwide.

HISTORY KELTRONS history is a saga of innovation in electronics. From being a pioneer in 1973, to the role of a trend-setter today, Keltron has been the catalysis for the

development of electronics industry in Kerala. The tag line launching a State-owned electronics enterprise, more than a quarter century ago, read spearheading an electronics revolution in Kerala. It was an experiment by Government of Kerala to transform the laid-back, picturesque Kerala State known for its spices, natural beauty, Kathakali and the Onam boat races, to an arena for industrial and technological development. That was how Keltron was born. Within five years of its inception, Keltron had set up a production centre in every district of the State. More than 5,000 people were engaged directly or indirectly by Keltron for the manufacture of electronic goods. The model of a State-owned electronics corporation was so successful that several other States in India followed suit; launching their own electronics corporations. A quarter century later, Keltron after having contributed substantially to the industrialisation of the State, set about transforming Trivandrum, the capital city of Kerala, into one of the major electronics hubs of the country. Today, the city is home to Technopark, the internationally known technology park where thousands of talented men and women participate in the development of a burgeoning information technology industry. Thus Keltron has in effect triggered a revolution that still keeps churning out its benefits to individuals and institutions in different parts of the world, continuing in its quest to innovate products and processes that would add further value to life and to the industry.ANYTHING is possible. But then, only few things really happen. Keltron has been making things happen since 1973 starting with spearheading an electronics revolution in the country to being the most sustainable electronics corporation in the state sector. A strong infrastructure, enterprising team of people, innovative operational methods, accent on quality and customer-orientation are the core competencies of the organization which has made things happen all these years. Large Pool of Experienced Technical Man power Keltrons expertise in high quality manufacturing is the direct result of the highly skilled, multi-disciplinary team of graduate engineers, project managers and a skilled work force with a proven track record in complex precision manufacturing. Currently,

Keltron employs a work force of 2000 of which 400 are Engineers who possess extensive hands-on experience in technology integration and adoption, high-tech manufacturing operations and in managing turn-key projects. Quality and reliability of KELTRON products have been endorsed over and over by the large customer base and ISO 9000. By forging strategic alliances with world leaders, KELTRON is poised to maintain a global presence and keep itself abreast of current technologies. Man power at Space Electronics section has been specially trained at Indian Space Research Organization (ISRO) in high-reliability soldering, harnessing and QC. Keltron also provides technical manpower to major organisations like ONGC and VSSC, and collaborators like Hitachi, Japan. Country-wide Sales Network Keltron has an All India Sales Network in place with full-fledged Marketing Offices in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad and Trivandrum to provide the quickest possible service to customers. Technology Support At the moment, Keltron has an arrangement with C-DAC, a research and development organization under the Government of India, which is located in the Keltron campus, for technology development and adaptation. An in-house research and department facility along with a full-fledged Knowledge Centre is in the pipeline and will be implemented shortly. Strong Infrastructure and Manufacturing Experience Since its inception in 1973, Keltrons forte has always been high quality manufacturing. During the past 30 years, Keltron has churned out a whole range of electronic products, electro-mechanical and high precision modules and sub assemblies for different industry segments. Over the years, Keltron has built up a strong infrastructure spread over 7,00,000 sq ft of built-up area. Equipped with computer-based facility for system design & engineering, and software development tools for embedded systems, Keltron today is fully geared to offer integrated manufacturing solutions.




The present position of electronics and IT hardware industry has been clearly depicted in the report of the national task force on information technology and software development (Part II). Excerpts from the report: The past and existing

policy frame work brought about a high degree of uncertainty discouraging investments in a frequently changing duty regime; with duty on inputs often more than that on finished goods; with cumbersome and counterproductive import/export procedure which impeded the velocity of business. This predictably led to decline in value addition in the hardware industry and eventually to the closing down of many of the units.

Based on the recommendations of the Task Force the Government of India announced some incentives to this Industry and more investment friendly legislation and duty/tax concessions are expected in due course.

The total electronic equipment production in India will reach US $32 billion in 2011, compared to US $14 billion in 2006, a compound annual growth rate (CAGR) of 18 percent. Semiconductor consumption in India will more than double from US $2.8 billion in 2006 to US $7.2 billion in 2011. The growth in electronic equipment production is being bolstered by the rapidly growing demand for electronics equipments in India. There is wide scope for improving the situation by harnessing and consolidating the resources and creating a very conducive environment for growth in this high tech filed. The government having convinced the necessity of putting the sector under thrust area has initiated steps towards this. objective. Keltron the leading Public sector undertaking with sufficient infrastructure has to play a key role towards this




COMPANY PROFILE KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD. (KELTRON) was incorporated in the year 1972 and started commercial activities in 1973. The organization was set up as the first electronics industry in Kerala with the objective of promoting developments in the electronics field. Manufacturing units were set up in various parts of the State and Marketing Offices throughout India. Subsidiary companies were also started. Main units manufacture electronic equipments and systems, where as subsidiary companies manufacture components.

Corporate office of KELTRON (Keltron House) is situated at Information Technology software & hardware products Vellayambalam in the heart of Trivandrum city. Keltron has got four manufacturing units, one unit exclusively for dealing with Information Technology products& software, five Subsidiary Companies and seven Marketing offices. It is a technology driven enterprise that manufactures and markets electronic components, equipments and system for communication defence, industrial and home appliances. In a state characterized by a shy capital investment culture in the industrial sector, the Company assumed the role of an entrepreneur and setup its own manufacturing units and marketing offices. In its developmental role, it organized setting up of tiny units in the co-operative sector for assembly of consumer electronics products, developed small entrepreneurs in the ancillary sector and promoted joint sector units in the State even with industry majors like Tata Group, Best & Crompton etc. The company established a good brand image for consumer Electronic Products and Professional Equipments. The registered office is Keltron house at Vellayambalam in Thiruvanathapuram. From within the four walls of drawing room to the vast expanse of an international airport, from the deep oceans to the realms of outer space, there is a KELTRON product in the form of an innovative solution.

The corporation has weathered through extreme changes in the economic and commercial environment, from highly restrictive government policies involving tedious and time consuming licensing procedures during its infancy, to the present liberalized policies. Several Corporations even in Private Sector in Consumer Electronics and a number of State Level Electronics Companies like UPTRON closed down in this process of transformation. Even after the span of 25 years of its

existence, Keltron is still the major company in this State in the Electronic sector. Though it is in loss for the last ten years, its surviving slowly with efficient management. But still, miles to go. Today, Keltron products remain as icons of technology brought to benefit the people continuing in its quest to bring benefits of frontier technology to its customers. Keltron has forged strategic alliances with world leaders in trade. Keltron have repositioned itself as a total solutions provider in Electronics. With the synergy of highly skilled manpower and assured access to frontier technology, Keltron braces itself as a provider of innovative solutions meeting the future needs of its customers. More than offering employment opportunities to people, Keltron has trained and nurtured many high caliber managers and technical hands who have in turn enlarged the horizons of a developmental process that it had initiated years ago.

Mission: With nearly 2000 employees working all over India, KELTRON carries the effulgent light of mission to bring the benefit of technology to the common man and thereby contribute to the development of the Society. Policy: KELTRONs policy to establish a set of standards and to provide uncompromised quality in whatever it does, keeps it abreast of current technologies in the Electronics and IT industry.


Vision: Keltron managements CORPORATE VISION as the company enters the 21st century is: To be a world-class, growth-oriented electronics corporation specialised in providing quality, market-focused products, services and cost-effective system solutions to a large clientele.

To attain leadership position in the knowledge industry by training and utilizing the rich knowledge capital available in Kerala, and creating a wide technology horizon for the development of knowledge wares and intelligent systems.

To emerge as a strong and self-reliant business enterprise with customer focus, profit orientation, and professional outlook. To build up Keltron as a model PSU in the Sunrise Technology sector of Electronics & IT. To function as the backbone of electronics industry in the state

To continue to play the role of nodal agency of government for accelerating the growth of development of this core industry in the state.

Manufacturing facilities located in Kerala, India Manufacturing capability: Four fully equipped production facilities of over 500000 sq.ft.area.

ISO 9001:2000 certified. A regular supplier of custom products to the Departments of Defence and Space to Government of India since 1980

Fully fledged Marketing Offices in eight metropolitan cities of the country: Mumbai, Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Ahmadabad and Thiruvananthapuram Customer Support.

Customer support Centers in all the Districts of Kerala State and also in eight metropolitan cities of the country : Mumbai, Delhi, Chennai, Kolkata, Bangalore , Hyderabad, Ahmadabad and Thiruvananthapuram.

Land & Built-up area KSEDC owns around 106 Acres of Land and 67,000 Sq.m. of built-up area at thefollowing locations. Location Keltron H. O. Land(In Acres) 8.1 Built-up Area(In Sq.m) 6500 6900 15300

Keltron IT Business Group, Vellayambalam, Trivandrum In above Keltron Equipment Complex, Karakulam, Trivandrum * 17 Keltron Communication Complex, Kulathur, Trivandrum * 431 Keltron Controls, Aroor, Alleppey * (Near Cochin) 16 Transmission Equipment Unit, Mudadi, Calicut 13.3 Keltron Component Complex , Kalyassery, Kannur* 10.9 Keltron Resistors, Kalyassery, Kannur Inabove

6253 11400 1121 10721 588


Keltron Magnetics, Kalyassery, Kannur 1.35 Keltron Crystals, Kalyassery, Kannur 1.81 Keltron Electro Ceramics, Kuttippuram, Malappuram * 20 ISO 9001: 2000 certified

432 1296 2237

The KELTRON GROUP comprises the holding company, Kerala State Electronics Development Corporation Limited and ten subsidiary and associate companies turning out more than hundred different types of products. These products are marketed through a strong sales and distribution network spanning the entire country. Subsidiaries: Keltron Component Complex Ltd. Keltron Crystals Ltd. Keltron Resistors Ltd. Keltron Automation Systems. Keltron Electro Ceramics Ltd. Keltron Rectifiers Ltd. Keltron Counters Ltd.

Product Range:

Process Automation Systems Communication Products Information Display & Security Systems. Traffic Management Systems. Satellite/ Board Casting Equipment. Office Automation Equipment. Power Electronics Products. Strategic Electronics Products. Electronics Components. Home Electronics Products. Information Technology.

All India Presence through Branches at: Delhi Mumbai Calcutta Ahmadabad Hyderabad Bangalore Chennai Trivandrum



Manufacturing of Electronic Exchange of various capacities with Technical

knowhow from C-DOT. b) Manufacturing Modules for Indian Space Research Organization (ISRO) with

their know-how c) d) Trading of IT products Manufacturing of Electronic systems based on design documents Supplied by customers.


COMMUNICATION PRODUCTS Electronic Private Automatic Branch Exchanges. (EPBAX) Rural Automatic Exchanges. 512 Port SBM RAX KAT 2000 Advanced Terminal for Office Automation Main Automatic Exchange (MAX) up to 40,000 lines

Optical Line Terminating Equipment TRAFFIC MANAGEMENT SYSTEM Pedestrian actuated Traffic Controller Traffic Signal Controller Vehicle Actuated Traffic Controller IT PRODUCTS Computers, Peripherals and accessories Software packages Customized /dedicated software solutions Networking solutions LAN/WAN/Intranet OFFICE AUTOMATION Attendance data management systems (ADAMS) Calculators Fax machines Modems Railway ticketing machine Overhead Projectors Electronic Components

Aluminium Electrolytic Capacitors Motor Start Capacitors Metallised Plastic Film Capacitors Ceramic Disc Capacitors Carbon/Metal Film Resistors Piezo Electric Quartz Crystals N T C Thermistors Power Diodes Electro mechanical & Electromagnetic Counters Printed Circuit Boards

Satellite/Broadcasting Equipment Radio Networking Terminals TV Receive Only Terminals (TVRO) Direct Reception Systems (DRS) TVRO Signal Generators Stereo Consoles


Announcers Consoles Switching Consoles Mixing and Dubbing Consoles Monitoring Amplifiers Equalized Line Amplifiers Graphic Equalizer

Power Electronic Products Uninterruptible Power Supply System (UPS) Rectifiers Battery Chargers High Capacity Voltage Stabilizers AC&DC Distribution Boards Strategic Electronic Products Processor Based Ground Mine Sonobuoys Ship Control Systems Echo Sounder

EM Log Sonar Simulators Navnet Expandable Bathy Thermographs Home Electronic Products Television Receivers Audio Equipment Home Inverters Energy Meters

The focus areas of the company are: Information Technology Keltron is dealing in Computer Hardware, standard Software and associated Peripherals. The Software Group offers customized software solutions to Government departments, Local self Government Institutions, Co-operative banks, and various other Customers. Keltron also offer IT Training, Network Services, Web services etc. Having expertise in all the functional domains (Hardware, Software, Web Services, Networking etc) the Government of Kerala has recognized KELTRON as a Total IT Solution Provider in the year 2002.

Components Keltron Component Complex Limited markets its products under the brand name KELTRONof its parent Company. It has a state of the art manufacturing facility with sophisticated automatic machines from Japan and Europe . It has the capability to produce all types of Aluminium Electrolytic Capacitors which conform to national and international standards. The manufacturing technology is constantly upgraded by R&D Centre of the Company which has the recognition of the Department of Scientific & Industrial Research, Ministry of Science & Technology, Govt. of India. The Company's Quality system has been conferred with the ISO 9001 accreditation by M/s KPMG Knowledge Services Keltron offer some of the most innovative, career-relevant courses through IT Education centers. KELTRON started IT Education Centers all over the State from the point of view of establishing a school of excellence in Information Science and Technology .It is a premier institution which equips students with the cutting edge technology as per the market requirement. KELTRON's IT Education & Training program reflects changes in technology and applications. The carrier programs are designed in such a way as to meet the tremendous demand for the computer professionals in India and abroad. Strategic Electronic Strategic (Defence) Electronic Products as well as Space Electronics Products fall under this category. Special Product Group caters to the requirements of Defence sector mainly Indian Navy. The space electronics section of the unit has a dedicated setup to meet the specialised and sophisticated requirements of ISRO in Electronic assembly and testing for their projects PSLV, GSLV and Satellites INSATs, GSATs, Etc

Surveillance Technology The products under this category are Surveillance Systems, Access Control Systems, Attendance Data Management systems etc and Keltrons Security Systems Group is manufacturing these products.

The group had a vide range of customers from all over India like AIR, Door Darshan, International Airports, TELCO, Hindustan Motors, Ordinance Factories, Parliament House, PMs Residence, ONGC Platforms etc

Control System Solutions using various types of ID Cards (SMART Cards, RFID Cards, Bar Coded Cards etc) for different applications (Voters Identity, Employee Identity, Traders Identity, Beneficiary Identity, Vehicle Detection & Identification, Driving License, Electronic Number Plate for vehicles, Ration Cards tec) are offered by the ID Card Project (IDCP) Group of Keltron. It is the State Level Agency (SLA) for Election Department in Kerala . Power Keltron is in the Power Electronics Sector and manufacturers Battery chargers, Inverters and UPS system with technology developed by in-house R&D as well as with technology outsourced from M/s ABB Switzerland and C-DAC Trivandrum. The Power Electronics Group of KELTRON was the first in the country to design and develop 500KVA & 600 KVA UPS qualifying seismic parameters.

Traffic Systems KELTRON Traffic Controllers are installed all over India in places ranging from Srinagar to Trivandrum and Gandhinagar to Imphal. Some of the major cities covered by KELTRON system besides Delhi are Ahmedabad, Bhopal, Jaipur,

Nagpur, Bangalore, Mangalore, the twin cities of Hyderabad & Secunderabad, Gorakhpur, Kanpur, Chennai and Calcutta. Keltrons LED stacked signal display units are a viable solution to the energy crisis in the form of low power consuming, maintenance free traffic signaling systems. We have successfully developed Solar Powered Road Warning Blinker and Signal System and GPS based controllers.

Control System Keltron is in the Control & Instrumentation sector since 1979. Our C & I package includes System Design, Engineering, Manufacturing, Field Erection & Commissioning and Project Management of Process Control and & Power Plant Automation Systems. They are capable of executing Turnkey projects. KELTRON is also in the business of Pneumatic Actuators using Power Cylinders since 1979. KELTRONs Pneumatic Actuators are in service in almost all the Thermal Power Plants, Captive Power Plants, and Steam Generating Units of various Process Plants etc.

Major projects / Installations Turnkey Analogue Control & Instrumentation Systems for Major Thermal Power Plants in India for customers like Gujarat Electricity Board, Maharashtra State Electricity Board, NTPC, TNEB etc. Computer based Data Acquisition Systems and Digitial Control Systems at various power plants for customers like DVC, TNEB, APSEB, Neyveli Lignite Corporation, UPSEB etc. Automatic Fare Collection and Ticket Issuing System for Metro Tube Railway at Calcutta.

CCTV System with more than 50 CCD Cameras and associated control equipment at Indian Parliament House, New Delhi. Store and Forward Message Switching System (SFMSS) for Indian Telecom Network at major telegraph exchanges in Southern India. Message Switching System for Indian Navy. On-line issue of Voter Identity Cards for the entire electorate of over 20 million voters in the state of Kerala - with immediate issue of cards at their respective booth - using state of the art technology, being done for the first time in the country. Micro processor based Card Attendance Systems in major industrial establishments like TELCO, and also various research institutions. Major Defence Electronics Projects for the Indian Navy.



STATEMENT OF THE STUDY The project work is titled as Efficiency Of SUPPLY CHAIN MANAGEMENT of IT products in Keltron, Trivandrum. It is intended to analyze comprehensively and understand thoroughly the various SUPPLY CHAIN services, working and functions of Keltron, Trivandrum in order to gain more knowledge regarding SCM aspects of business in a manufacturing company.

SCOPE OF STUDY Analyze the supply chain management of IT products in Keltron. To find out the problems in supply chain management and suggest some solutions.


Study the supply chain management in KELTRON Ways to improve the efficiency of supply chain management Analyze the procedures involved in various stages of supply chain Study and analyze operations, suppliers, purchase, inventory and quality management. Is there any possibility for product diversification.

RESEARCH METHODOLOGY Methodology may be a description of process, or may be expanded to include a philosophically coherent collection of theories, concepts or ideas as they relate to a particular discipline or field of inquiry Methodology may refer to nothing more than a simple set of methods or procedures, or it may refer to the rationale and the philosophical assumptions that underlie a particular study relative to the scientific method. For example, scholarly literature often includes a section on the methodology of the researchers. RESEARCH-PERIOD: A period from 1st June, 2011 to 25th July, 2011. RESEARCH-PLACE: Conducted a study on functioning of KELTRON



The collected data and information are from the internal organization report and websites. The two sources of information are:1. Primary data o Face to Face Interview o Direct Observation 2. Secondary data o Brochures and Catalogues of the Company o Official Reports o Website of the Company

LIMITATIONS Any work cannot remain untouched with the limitations. This project work is not an exception and following were the limitations of the study: Time was a limiting factor during the study. Only a percentage of total employees were interviewed.

The workers were very busy in their work and had a little time available for interview or conversation.

Some core data could not be collected due to confidentiality policies of the company.





Definitions of Supply Chain Management

Supply chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in

satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.

Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play in each of them. The pace of change and the uncertainty about how markets will evolve has made it increasingly important for companies to be aware of the supply chains they participate in and to understand the roles that they play. Those companies that learn how to build and participate in strong supply chains will have a substantial competitive advantage in their markets.

The term supply chain management arose in the late 1980s and came into widespread use in the 1990s. Prior to that time, businesses used terms such as logistics and operations management instead. Some definitions of a supply chain are offered below: A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.from Ganeshan and Harrison at Penn State University in their article An Introduction to Supply Chain.


A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. from Chopra and Meindl in their book Supply Chain Management: Strategy, Planning, and Operations.

A supply chain is the alignment of firms that bring products or services to market.from Lambert, Stock, and Ellram in their book Fundamentals of Logistics Management.

Some definitions of supply chain management are as follows:

Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.from Essentials of supply chain management. (John Wiley & Sons) The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.from Mentzer, DeWitt, Deebler, Min, Nix, Smith, and Zacharia in their article Defining Supply Chain Management in the Journal of Business Logistics.

A general overview of Supply Chain


The participants in a supply chain are continuously making decisions that affect how they manage the five supply chain drivers. Each organization tries to maximize its performance in dealing with these drivers through a combination of outsourcing, partnering, and in-house expertise. In the fast-moving markets of our present economy a company usually will focus on what it considers to be its core competencies in supply chain management and outsource the rest. This was not always the case though. In the slower moving mass markets of the industrial age it was common for successful companies to attempt to own much of their supply chain. That was known as vertical integration. The aim of vertical integration was to gain maximum efficiency through economies of scale.

In the first half of the 1900s Ford Motor Company owned much of what it needed to feed its car factories. It owned and operated iron mines that extracted iron ore, steel mills that turned the ore into steel products, plants that made component car parts and assembly plants that turned out finished cars. In addition, they owned farms where they grew flax to make into linen car tops and forests that they logged and sawmills where they cut the timber into lumber for making wooden car parts. Fords famous River Rouge Plant was a monument to vertical integrationiron ore went in at one end and cars came out at the other end. Henry Ford in his 1926 autobiography, Today and Tomorrow, boasted that his company could take in iron ore from the mine and put out a car 81 hours later.

This was a profitable way of doing business in the more predictable, one-sizefits-all industrial economy that existed in the early 1900s. Ford and other businesses churned out mass amounts of basic products. But as the markets grew and customers became more particular about the kind of products they wanted, this model began to

break down. It could not be responsive enough or produce the variety of products that were being demanded. For instance, when Henry Ford was asked about the number of different colors a customer could request, he said, they can have any color they want as long as its black. In the 1920s Fords market share was over 50 percent but by the 1940s it had fallen to below 20 percent. Focusing on efficiency at the expense of being responsive to customer desires was no longer a successful business model.



Globalization, highly competitive markets, and the rapid pace of technological change are now driving the development of supply chains where multiple companies work together, each company focusing on the activities that it does best. Mining companies focus on mining, timber companies focus on logging and making lumber and manufacturing companies focus on different types of manufacturing from making component parts to doing final assembly. This way people in each company can keep up with rapid rates of change and keep learning the new skills needed to compete in their particular business. Where companies once routinely ran their own warehouses or operated their own fleet of trucks, they now have to consider whether those operations are really a core competency or whether it is more cost effective to outsource those operations to other companies that make logistics the center of their business. To achieve high levels of operating efficiency and to keep up with continuing changes in technology, companies need to focus on their core competencies. It requires this kind of focus to stay competitive.

Instead of vertical integration, companies now practice virtual integration. Companies find other companies who they can work with to perform the activities called for in their supply chains. How a company defines its core competencies and how it positions itself in the supply-chains it serves is one of the most important decisions it can make. There is a difference between the concept of supply chain management and the traditional concept of logistics. Logistics typically refers to activities that occur within the boundaries of a single organization and supply chains refer to networks of companies that work together and coordinate their actions to deliver a product to market. Also traditional logistics focuses its attention on activities such as procurement, distribution, maintenance, and inventory management. Supply chain


management acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance, and customer service.

In the wider view of supply chain thinking, these additional activities are now seen as part of the work needed to fulfill customer requests. Supply chain management views the supply chain and the organizations in it as a single entity. It brings a systems approach to understanding and managing the different activities needed to coordinate the flow of products and services to best serve the ultimate customer. This systems approach provides the framework in which to best respond to business requirements that otherwise would seem to be in conflict with each other.

Taken individually, different supply chain requirements often have conflicting needs. For instance, the requirement of maintaining high levels of customer service calls for maintaining high levels of inventory, but then the requirement to operate efficiently calls for reducing inventory levels. It is only when these requirements are seen together as parts of a larger picture that ways can be found to effectively balance their different demands. Effective supply chain management requires simultaneous improvements in both customer service levels and the internal operating efficiencies of the companies in the supply chain. Customer service at its most basic level means consistently high order fill rates, high on-time delivery rates, and a very low rate of products returned by customers for whatever reason. Internal efficiency for organizations in a supply chain means that these organizations get an attractive rate of return on their investments in inventory and other assets and that they find ways to lower their operating and sales expenses. Supply Chain Decisions


We classify the decisions for supply chain management into two broad categories -strategic and operational. As the term implies, strategic decisions are made typically over a longer time horizon. These are closely linked to the corporate strategy and guide supply chain policies from a design perspective. On the other hand, operational decisions are short term, and focus on activities over a day-to-day basis. The effort in these type of decisions is to effectively and efficiently manage the product flow in the "strategically" planned supply chain. There is a basic pattern to the practice of supply chain management. Each supply chain has its own unique set of market demands and operating challenges and yet the issues remain essentially the same in every case. Companies in any supply chain must make decisions individually and collectively regarding their actions in five areas. The five areas of decisions are as follows:

1. Location Decisions The geographic placement of production facilities, stocking points, and sourcing points is the natural first step in creating a supply chain. The location of facilities involves a commitment of resources to a long-term plan. Once the size, number, and location of these are determined, so are the possible paths by which the product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost, and level of service. These decisions should be determined by an optimization routine that considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc. (See Arntzen, Brown, Harrison and Trafton [1995] for a thorough discussion of these aspects.) Although location decisions are primarily strategic, they also have implications on an operational level.

Where should facilities for production and inventory storage be located? Where are the most cost efficient locations for production and for storage of inventory? Should existing facilities be used or new ones built? Once these decisions are made they determine the possible paths available for product to flow through for delivery to the final consumer.

2. Production Decisions The strategic decisions include what products to produce, and which plants to produce them in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before, these decisions have a big impact on the revenues, costs and customer service levels of the firm. These decisions assume the existence of the facilities, but determine the exact path(s) through which a product flows to and from these facilities. Another critical issue is the capacity of the manufacturing facilities-and this largely depends the degree of vertical integration within the firm. Operational decisions focus on detailed production scheduling. These decisions include the construction of the master production schedules, scheduling production on machines, and equipment maintenance. Other considerations include workload balancing, and quality control measures at a production facility. What products does the market want? How much of which products should be produced and by when? This activity includes the creation of master production schedules that take into account plant capacities, workload balancing, quality control, and equipment maintenance.


3. Inventory Decisions These refer to means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw materials, semi-finished or finished goods. They can also be in-process between locations. Their primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supply chain operations. It is strategic in the sense that top management sets goals. However, most researchers have approached the management of inventory from an operational perspective. These include deployment strategies (push versus pull), control policies --- the determination of the optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical, since they are primary determinants of customer service levels. What inventory should be stocked at each stage in a supply chain? How much inventory should be held as raw materials, semi-finished, or finished goods? The primary purpose of inventory is to act as a buffer against uncertainty in the supply chain. However, holding inventory can be expensive, so what are the optimal inventory levels and reorder points?

4.Transportation Decisions


The mode choice aspect of these decisions are the more strategic ones. These are closely linked to the inventory decisions, since the best choice of mode is often found by trading-off the cost of using the particular mode of transport with the indirect cost of inventory associated with that mode. While air shipments may be fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate holding relatively large amounts of inventory to buffer against the inherent uncertainty associated with them. Therefore customer service levels, and geographic location play vital roles in such decisions. Since transportation is more than 30 percent of the logistics costs, operating efficiently makes good economic sense. Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing and scheduling of equipment are key in effective management of the firm's transport strategy.

How should inventory be moved from one supply chain location to another? Air freight and truck delivery are generally fast and reliable but they are expensive. Shipping by sea or rail is much less expensive but usually involves longer transit times and more uncertainty. This uncertainty must be compensated for by stocking higher levels of inventory. When is it better to use which mode of transportation?

5. Information Decisions This involves the decisions regarding:


How much data should be collected and how much information should be shared? Timely and accurate information holds the promise of better coordination and better decision making. With good information, people can make effective decisions about what to produce and how much, about where to locate inventory and how best to transport it.

The sum of these decisions will define the capabilities and effectiveness of a companys supply chain. The things a company can do and the ways that it can compete in its markets are all very much dependent on the effectiveness of its supply chain. If a companys strategy is to serve a mass market and compete on the basis of price, it had better have a supply chain that is optimized for low cost. If a companys strategy is to serve a market segment and compete on the basis of customer service and convenience, it had better have a supply chain optimized for responsiveness. Who a company is and what it can do is shaped by its supply chain and by the markets it serves.

Processes involved in supply chain


Production refers to the capacity of a supply chain to make and store products. The facilities of production are factories and warehouses. The fundamental decision that managers face when making production decisions is how to resolve the trade-off between responsiveness and efficiency. If factories and warehouses are built with a lot of excess capacity, they can be very flexible and respond quickly to wide swings

in product demand. Facilities where all or almost all capacity is being used are not capable of responding easily to fluctuations in demand. On the other hand, capacity costs money and excess capacity is idle capacity not in use and not generating revenue. So the more excess capacity that exists, the less efficient the operation becomes. Factories can be built to accommodate one of two approaches to manufacturing:

1. Product focusA factory that takes a product focus performs the range of different operations required to make a given product line from fabrication of different product parts to assembly of these parts. 2. Functional focusA functional approach concentrates on performing just a few operations such as only making a select group of parts or only doing assembly. These functions can be applied to making many different kinds of products. A product approach tends to result in developing expertise about a given set of products at the expense of expertise about any particular function. A functional approach results in expertise about particular functions instead of expertise in a given product. Companies need to decide which approach or what mix of these two approaches will give them the capability and expertise they need to best respond to customer demands. As with factories, warehouses too can be built to accommodate different approaches. There are three main approaches to use in warehousing:

1. Stock keeping unit (SKU) storageIn this traditional approach, all of a given type of product is stored together. This is an efficient and easy to understand way to store products. 2. Job lot storageIn this approach, all the different products related to the needs of a certain type of customer or related to the needs of a particular job are stored

together. This allows for an efficient picking and packing operation but usually requires more storage space than the traditional SKU storage approach. 3. Cross dockingAn approach that was pioneered by Wal-Mart in its drive to increase efficiencies in its supply chain. In this approach, product is not actually warehoused in the facility. Instead the facility is used to house a process where trucks from suppliers arrive and unload large quantities of different products. These large lots are then broken down into smaller lots. Smaller lots of different products are recombined according to the needs of the day and quickly loaded onto outbound trucks that deliver the products to their final destination.

Inventory Inventory is spread throughout the supply chain and includes everything from raw material to work in process to finished goods that are held by the manufacturers, distributors, and retailers in a supply chain. Again, managers must decide where they want to position themselves in the trade-off between responsiveness and efficiency. Holding large amounts of inventory allows a company or an entire supply chain to be very responsive to fluctuations in customer demand. However, the creation and storage of inventory is a cost and to achieve high levels of efficiency, the cost of inventory should be kept as low as possible. Inventory management is primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to proceed the regular and planned course of production and stock of materials. The scope of inventory management concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical









replenishment, returns and defective goods and demand forecasting.Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets, provide replenishment techniques, report actual and projected inventory status and handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs.

There are three basic decisions to make regarding the creation and holding of inventory: 1. Cycle InventoryThis is the amount of inventory needed to satisfy demand for the product in the period between purchases of the product. Companies tend to produce and to purchase in large lots in order to gain the advantages that economies of scale can bring. However, with large lots also comes with increased carrying costs. Carrying costs come from the cost to store, handle, and insure the inventory. Managers face the trade-off between the reduced cost of ordering and better prices offered by purchasing product in large lots and the increased carrying cost of the cycle inventory that comes with purchasing in large lots.


2. Safety InventoryInventory that is held as a buffer against uncertainty. If demand forecasting could be done with perfect accuracy, then the only inventory that would be needed would be cycle inventory. But since every forecast has some degree of uncertainty in it, we cover that uncertainty to a greater or lesser degree by holding additional inventory in case demand is suddenly greater than anticipated. The tradeoff here is to weigh the costs of carrying extra inventory against the costs of losing sales due to insufficient inventory. 3. Seasonal InventoryThis is inventory that is built up in anticipation of predictable increases in demand that occur at certain times of the year. For example, it is predictable that demand for anti-freeze will increase in the winter. If a company that makes anti-freeze has a fixed production rate that is expensive to change, then it will try to manufacture product at a steady rate all year long and build up inventory during periods of low demand to cover for periods of high demand that will exceed its production rate. The alternative to building up seasonal inventory is to invest in flexible manufacturing facilities that can quickly change their rate of production of different products to respond to increases in demand. In this case, the trade-off is between the cost of carrying seasonal inventory and the cost of having more flexible production capabilities.

Location Location refers to the geographical setting of supply chain facilities. It also includes the decisions related to which activities should be performed in each facility. The responsiveness versus efficiency trade-off here is the decision whether to centralize activities in fewer locations to gain economies of scale and efficiency, or to decentralize activities in many locations close to customers and suppliers in order for operations to be more responsive. When making location decisions, managers need to

consider a range of factors that relate to a given location including the cost of facilities, the cost of labor, skills available in the workforce, infrastructure conditions, taxes and tariffs, and proximity to suppliers and customers. Location decisions tend to be very strategic decisions because they commit large amounts of money to long-term plans. Location decisions have strong impacts on the cost and performance characteristics of a supply chain. Once the size, number, and location of facilities is determined, that also defines the number of possible paths through which products can flow on the way to the final customer. Location decisions reflect a companys basic strategy for building and delivering its products to market. Transportation This refers to the movement of everything from raw material to finished goods between different facilities in a supply chain. In transportation the trade-off between responsiveness and efficiency is manifested in the choice of transport mode. Fast modes of transport such as airplanes are very responsive but also more costly. Slower modes such as ship and rail are very cost efficient but not as responsive. Since transportation costs can be as much as a third of the operating cost of a supply chain, decisions made here are very important. There are six basic modes of transport that a company can choose from:

1. Ship which is very cost efficient but also the slowest mode of transport. It is limited to use between locations that are situated next to navigable waterways and facilities such as harbors and canals. 2. Rail which is also very cost efficient but can be slow. This mode is also restricted to use between locations that are served by rail lines.


3. Pipelines can be very efficient but are restricted to commodities that are liquids or gases such as water, oil, and natural gas. 4. Trucks are a relatively quick and very flexible mode of transport. Trucks can go almost anywhere. The cost of this mode is prone to fluctuations though, as the cost of fuel fluctuates and the condition of roads varies. 5. Airplanes are a very fast mode of transport and are very responsive. This is also the most expensive mode and it is somewhat limited by the availability of appropriate airport facilities. 6. Electronic Transport is the fastest mode of transport and it is very flexible and cost efficient. However, it can only be used for movement of certain types of products such as electric energy, data, and products composed of data such as music, pictures, and text. Someday technology that allows us to convert matter to energy and back to matter again may completely rewrite the theory and practice of supply chain management.

Given these different modes of transportation and the location of the facilities in a supply chain, managers need to design routes and networks for moving products. A route is the path through which products move and networks are composed of the collection of the paths and facilities connected by those paths. As a general rule, the higher the value of a product (such as electronic components or pharmaceuticals), the more its transport network should emphasize responsiveness and the lower the value of a product (such as bulk commodities like grain or lumber), the more its network should emphasize efficiency. Information


Information is the basis upon which to make decisions regarding the other four supply chain drivers. It is the connection between all of the activities and operations in a supply chain. To the extent that this connection is a strong one, (i.e., the data is accurate, timely, and complete), the companies in a supply chain will each be able to make good decisions for their own operations. This will also tend to maximize the profitability of the supply chain as a whole. That is the way that stock markets or other free markets work and supply chains have many of the same dynamics as markets.

1. Coordinating daily activities related to the functioning of the other four supply chain drivers: production; inventory; location; and transportation. The companies in a supply chain use available data on product supply and demand to decide on weekly production schedules, inventory levels, transportation routes, and stocking locations. 2. Forecasting and planning to anticipate and meet future demands. Available information is used to make tactical forecasts to guide the setting of monthly and quarterly production schedules and timetables. Information is also used for strategic forecasts to guide decisions about whether to build new facilities, enter a new market, or exit an existing market.

Within an individual company the trade-off between responsiveness and efficiency involves weighing the benefits that good information can provide against the cost of acquiring that information. Abundant, accurate information can enable very efficient operating decisions and better forecasts but the cost of building and installing systems to deliver this information can be very high. Within the supply chain as a whole, the responsiveness versus efficiency trade-off that companies make is one of deciding how much information to share with the other companies and how

much information to keep private. The more information about product supply, customer demand, market forecasts, and production schedules that companies share with each other, the more responsive everyone can be. Balancing this openness however, are the concerns that each company has about revealing information that could be used against it by a competitor. The potential costs associated with increased competition can hurt the profitability of a company.

Participants in the Supply Chain

In its simplest form, a supply chain is composed of a company and the suppliers and customers of that company. This is the basic group of participants that creates a simple supply chain. Extended supply chains contain three additional types of participants. First there is the suppliers supplier or the ultimate supplier at the beginning of an extended supply chain. Then there is the customers customer or ultimate customer at the end of an extended supply chain. Finally there is a whole category of companies who are service providers to other companies in the supply chain. These are companies who supply services in logistics, finance, marketing, and information technology.

In any given supply chain there is some combination of companies who perform different functions. There are companies that are producers, distributors or wholesalers, retailers, and companies or individuals who are the customers, the final consumers of a product. Supporting these companies there will be other companies that are service providers that provide a range of needed services.


Producers Producers or manufacturers are organizations that make a product. This includes companies that are producers of raw materials and companies that are producers of finished goods. Producers of raw materials are organizations that mine for minerals, drill for oil and gas, and cut timber. It also includes organizations that farm the land, raise animals, or catch seafood. Producers of finished goods use the raw materials and subassemblies made by other producers to create their products.

Producers can create products that are intangible items such as music, entertainment, software, or designs. A product can also be a service such as mowing a lawn, cleaning an office, performing surgery, or teaching a skill. In many instances the producers of tangible, industrial products are moving to areas of the world where labor is less costly. Producers in the developed world of North America, Europe, and parts of Asia are increasingly producers of intangible items and services.

Distributors are companies that take inventory in bulk from producers and deliver a bundle of related product lines to customers. Distributors are also known as wholesalers. They typically sell to other businesses and they sell products in larger quantities than an individual consumer would usually buy. Distributors buffer the producers from fluctuations in product demand by stocking inventory and doing much of the sales work to find and service customers. For the customer, distributors fulfill the Time and Place functionthey deliver products when and where the customer wants them.


A distributor is typically an organization that takes ownership of significant inventories of products that they buy from producers and sell to consumers. In addition to product promotion and sales, other functions the distributor performs are inventory management, warehouse operations, and product transportation as well as customer support and post-sales service. A distributor can also be an organization that only brokers a product between the producer and the customer and never takes ownership of that product. This kind of distributor performs mainly the functions of product promotion and sales. In both these cases, as the needs of customers evolve and the range of available products changes, the distributor is the agent that continually tracks customer needs and matches them with products available.

Retailers stock inventory and sell in smaller quantities to the general public. This organization also closely tracks the preferences and demands of the customers that it sells to. It advertises to its customers and often uses some combination of price, product selection, service, and convenience as the primary draw to attract customers for the products it sells. Discount department stores attract customers using price and wide product selection. Upscale specialty stores offer a unique line of products and high levels of service. Fast food restaurants use convenience and low prices as their draw.

Customers or consumers are any organization that purchases and uses a product. A customer organization may purchase a product in order to incorporate it into another product that they in turn sell to other customers. Or a customer may be the final end user of a product who buys the product in order to consume it.


Service Providers
These are organizations that provide services to producers, distributors, retailers, and customers. Service providers have developed special expertise and skills that focus on a particular activity needed by a supply chain. Because of this, they are able to perform these services more effectively and at a better price than producers, distributors, retailers, or consumers could do on their own. Some common service providers in any supply chain are providers of transportation services and warehousing services. These are trucking companies and public warehouse companies and they are known as logistics providers. Financial service providers deliver services such as making loans, doing credit analysis, and collecting on past due invoices. These are banks, credit rating companies, and collection agencies. Some service providers deliver market research and advertising, while others provide product design, engineering services, legal services, and management advice. Still other service providers offer information technology and data collection services. All these service providers are integrated to a greater or lesser degree into the ongoing operations of the producers, distributors, retailers, and consumers in the supply chain.





DATA ANALYSIS AND INTERPRETATION In order to analyze the problems or issues involved in the supply chain management of it products in Keltron, first let us have a general overview of ITBG and a detailed study of the procedures for various processes involved in it.


About ITBG Information Technology Business Group (ITBG) is one of the major units of Keltron and is situated at Vellayambalam. The unit was established in the year 1999 to cater to the IT hardware requirements of Governments departments of Kerala state. The capabilities were later on expanded to meet any requirements in the area of Information Technology including software development, not only to Government departments of Kerala but also to meet requirements in Government/ private sector anywhere in India. IT business group is the largest division in KELTRON having various business in the information technology domain like sales and support of computer and peripherals, development of software, networking, web internet services, training etc. Each functional unit of ITBG is known as strategic business unit SBU. The different SUBs are IT Products ITP, Web service Group WSG, Software Group SWG, IT training, etc.

Strategic Business Units (SBU) Information Technology Business Group comprises of four Strategic Business Units 1. ITP (Information Technology Products) 2. SWG (Software Group) 3. CSG (Customer Service Group) 4. ITT (Information Technology Training)

Function of SBUs is

1. Sales and marketing


2. Execution of projects 3. Customer support 4. Annual maintenance contract.

1. Information Technology Products (ITP) The strategic Business unit identifies the made of customers in the area of Information Technology, finalizes the configuration, submits suitable proposals to satisfy the needs and delivers the products. Keltron being a Total Solution Provider to the Government of Kerala, ITP deals mainly with Government departments, special project of Government like IT@ School project etc.

Product Range

1. Computers (Desktop, Laptop, Server). 2. Printers (Dot-matrix, line printers, Heavy duty, Inkjet/ Laser) 3. Scanners 4. Projectors 5. Camera 6. Networking products

Major Customers of ITP

1. IT@ School

2. Government Secretariat Department 3. Directorate of Higher Secondary Education 4. Technical Education Directorate 5. Kerala State IT Mission

2. Software Group (SWG) The main objective of setting up this unit is to provide automation solution to the Government of Kerala. The software development team mainly concentrates on open source technologies such as php, postgresql, AJAX, java script etc. Main operations are citizen centric services aiming at poor people.

Product Range 1. Lottery Information System 2. Court cases monitoring solution & Law Information Management System 3. Complete Automation 4. Inventory modules for package management of launch vehicles PSLV, GSLV 5. Laboratory Management and Report Generation Software

Major Customers of Software 1. Lottery Department, Kerala 2. Law Department, Govt. of Kerala

3. Industries Department 4. Kerala Khadi and Village Industries Board, Trivandrum 5. Shops Welfare Board, Govt. of Kerala

3. Customer Service Group (CSG) Installation of the products supplied by ITP and servicing of the same are carried out by this group. The group also enters into Annual Maintenance Contracts with various customers after the expiry of the warranty period. Major Customers 1. Various schools and colleges throughout Kerala 2. Kerala State Electricity Board 3. Kerala Water Authority 4. Power Works Department

4. Information Technology Training (ITT) The Strategic Business Unit was set up in order to provide different types of training to the staff of various government departments, school and college students etc mainly in the latest developments of the IT field. Keltron knowledge centers come under this group and various courses are conducted in these centers also. Organization chart of ITBG








Supply Chain Management in keltron Supply Chain Management (SCM) systems are suites of different supply chain applications. An SCM system could be an integrated suite that contains advanced planning and scheduling, transportation planning, demand planning, and inventory planning applications. SCM systems rely on ERP or relevant legacy systems to provide them with the data to support the analysis and planning that they do. These systems have the analytical capabilities to support strategic level decision making.





To ensure proper planning for the purchase/realization of required products as per the specifications within the target date and execution of Customer Orders pertaining to IT Products (Hardwares- Computers & Peripherals).

Scope All Customer Orders received and executed by ITP.

Procedure Planning of Processes and Products a. Receipt of Customer Order and Release of Purchase Indent.

Based on Customer orders received from ITP (MKTG), Order Acceptance (OA) (R1) is prepared. OA acts as the key document for all the activities for execution of Customer Orders. Based on OA, Purchase Indent (R-2) is issued to Purchase Department for procurement. OA Number holds an over riding priority over the PI No and hence the same is considered as the Reference No for all purposes. OA register (R-3) is maintained which includes order details, execution details and collection details. HOD Planning evaluates criticality of OA based on the priority of customer and total order value. Operational Planning and Control Register (R-4) is maintained as soft copy to monitor the prompt execution of order and payment collection.


Target date mentioned in the Purchase Indent does not act as the realistic date (either date mentioned by the customer or delivery schedule mentioned in the offer is the expected date of purchase) owing to the fact that the same is preponed and indicated for pressurizing suppliers through Purchase Department. b. Follow up for Purchase and Realization of Products Based on the criticality status assigned (R-4), follow up is carried out with the Purchase Department for the timely delivery of products as against the Order Acceptance /Purchase Order. In case of delay, Planning Department evaluates (R-4) the reasons and proposes appropriate corrective action (R-4) based on the severity of the delay with respect to the purchased products in the order execution process. Execution of Orders a. Receipt of Products On receipt of products accepted vide Goods Receipt Cum Inspection Report

(GRCIR) from Stores, Despatch Billing Advice (R-9) and Delivery Challan (R-10) are prepared by Planning and forwarded to Stores, QA and Finance Departments. Based on Despatch Billing Advice, Finance Department prepares Invoice. b. Acceptance of Products with Deviation Those products having minor variations from the stipulated specifications /tolerance limit are accepted with deviation by QA Department based on the Acceptance with Concession Report (R-25) approved by Head (ITBG) after concurrence with Account Executive and Head (ITP). Despatch a. General

Despatch Billing Advice (R-9) and Delivery Challan (R-10) are prepared by Planning and forwarded to Stores, QA and Finance Departments. Products along with copy of the Invoice/ Delivery Challan are delivered to the customer (consignee located at different areas) by Stores and acknowledged copies of Delivery Challan /Invoice received/collected by Stores is forwarded to Planning Department.

b. Direct Despatch to Customer site Heavy products such as Generator, Air Conditioners, High capacity UPS etc./bulk quantity of products will be supplied directly to customer from supplier vide our Delivery Challan issued to the supplier as instructed in the Purchase Order in consultation with Planning. On receipt of the acknowledged copy of the Delivery Challan from the supplier, Despatch Billing Advice will be raised for regularization.

c. Partial Despatch In some other cases, part of the ordered products has to be despatched for meeting the customers immediate requirements. Delivery Challan is generated for the interim despatch and will be regularized by raising Despatch Billing Advice once the supply is completed. In this situation, a Proforma Invoice (R-11) is prepared and forwarded to Stores for transportation purpose. Proforma Invoice is also used for part payment purpose. Installation of Products Planning Department ensures prompt completion of installation by Customer Support Group in co ordination with Stores Department as against Delivery Challan/Invoice.

In case of emergency, Planning Department instructs Customer Support Group for installation through Installation Advice. (R-16) Sales Reversal Any product which is sold but not accepted by the customer due to reasons like order cancellation, Model changes etc is to be returned through Sales Reversal Advice (R12) generated by Planning Department, received by Stores and inspected by QA. Subsequently the same is accounted in the Stores along with GRCIR. Stores forward Sales Reversal Advice and GRCIR to Finance Department through Planning Department for raising Credit Note (FIN/R-1). Credit Advice Adjustments related to difference in the amount indicated in the Invoice are done through Credit Advices (R-13), initiated by Planning Department and accounted through Credit Notes at Finance Department. Receipt of Payment On completion of installation by CSG / ASO/ Supplier, installation certificate (CSG/R-2) evidences for installation will be collected and the same along with Invoice are forwarded to customer through Marketing Department for realization of payment. Payment Realization Cheque/DD/Cash received at Planning Department is recorded in the Collection Register (R-14) and forwarded to Finance Department through Payment Forwarding Advice (R-15). The stamped receipt of the payment received from Finance Department is forwarded to customer. 4. Precautions

a) It is very essential to ensure that sufficient lead-time is available for arranging products to deliver to customer against their delivery schedule as specified in the order. If sufficient time is not available, it is necessary to take up with customer for delivery extension or waiving LD Clause. b) To ensure products are available in Stores before raising Despatch Billing Advice/Delivery Challan. c) To ensure that the despatched products are delivered by courier/our representative to the customer and obtain acknowledgement. d) To ensure installations are completed and installation certificates are collected before submitting Invoice to customer. e) To ensure the specifications of products in the PI are one and the same as that specified in the customer order. On the other hand, deviation in this regard from customer is obtained before effecting despatch. f) Amendments, if any from the original offer are to be identified and intimated to Marketing Department, before raising Purchase Indent. g) To ensure sufficient margin is available on products indented to Purchase. If not, the low/negative margin products may be brought to the notice of Marketing Department for taking up with customer for enhancing the price, as required. h) To ensure all payments are properly and systematically followed up with Marketing Department and simultaneously entered in the debtor statement.

Procedure for operations management (KITBG /PLG/P-2) illustrates the methods to ensure proper planning for the realization of required products and related services are covered in this procedure. Suitable control measures are established &

implemented so that planning can monitor and confirm that products as per specifications are delivered to the customers with in the target date. Receipt of payment after installation of the product supplied, and generation of data sheet for Management information System also form part of planning activities.

2. PROCEDURE FOR PURCHASING KITBG ensures that purchased and product conforms to specified purchase




extent of control applied to the supplier and the

purchased product are dependent upon the effect of the purchased product on subsequent product realization or the final product. The organization evaluates and selects suppliers based on their ability to supply product in accordance with the organizations requirements. Criteria for selection, evaluation and re-evaluation are established. Records of the results of the evaluations and necessary actions arising from the evaluation are maintained. Purchasing Information Purchasing Information describes the product to be purchased, including, where appropriate a. requirements for approval of product, procedures, processes and equipment. b. requirements for qualification of personnel, and c. quality management system requirements KITBG establishes and implements inspection or other activities necessary for ensuring that purchased product meets specified purchase requirements.


Preservation of product
KITBG preserves the product during internal processing and delivery to the intended destination in order to maintain conformity to requirements. As applicable, preservation includes identification, handling, packaging, storage and protection. Preservation also applies to the constituent parts of a product.

3. PROCEDURE FOR MATERIALS (STORES) MANAGEMENT Purpose This procedure addresses the receipt, acceptance, and issue/despatch of products/spares. Scope Products include computers, peripherals, service spares, networking goods, softwares, consumer goods etc. 3. Procedure Inward of Products/Materials a. Receipt of products/ materials Consignments arrived from various suppliers as per our Purchase Orders (PUR/R-5) are received at Stores. Consignments are received at Stores as direct supply, through lorry or by courier (N-1). Consignments are received along with Invoice/Bill, Delivery Challan, Lorry Receipt, Courier docket details etc as applicable (N-1). Verification is carried out with respect to Purchase Order (PUR/R-5) versus the supplier Invoice/Bill/Delivery Challan for

quantity/make. Receipt status is indicated by affixing a sticker having Purchase Order No: and date of receipt on it, in the Inward Section. These stickers are affixed on each individual product/material except for small items for which stickers are affixed on lot basis. A control number in serial order with date is put on each Supplier document as indicated in the Consignment Arrival Note (R-1). Consignment Arrival Note is distributed to Planning, Purchase, Sales and QA as a first Information Report. Control No: provides identification and traceability for receipt status of product/ material. b. Acceptance of Products/Materials After completing the quantity verification as against the Control No, Purchase Order No, Invoice/ Delivery Challan, details are entered in the GRCIR Register (R-2). Simultaneously Goods Receipt cum Inspection Report (R-3) is prepared including Control No, Purchase Order No, Product specification, quantity etc. Shortage / excess if any, specification variation (visual) etc is indicated in the GRCIR (R-3). Then the products along with GRCIR are offered to QA for inspection. The acceptance / rejection status of products/materials are identified through the status indicated by QA in the GRCIR along with product serial number. c. Accounting of Products/Materials The accepted Products/Materials are accounted in the Bin Card (R-6) along with GRCIR No./ Store Credit Note/ Store Return Note and quantity. d. Rejected Product/materials Stores receive rejected products/materials along with GRCIR (R-3) accompanied with rejected tag (QA/R-3-B). Stores enter the details in the Rejection Register (R-4) specifying GRCIR No: and rejected quantity.


The rejected products/materials are put in a rack, which is located separately. The rejected product/material is sent back to the supplier on receipt of rejection return note (PUR/R-13), from Purchase through Delivery Challan/Gate pass (R-5- Gate Pass-part A- Returnable, part B- Non Returnable). e. Sales Reversal In some instances, materials once dispatched and not accepted by the customer are received back at stores due to various reasons; such as order cancellation, Model changes etc. When such materials are received at stores, store will inform planning/sales and Sales Reversal Advice (PLG/R-12) is collected from Planning Department. GRCIR is prepared with reference to the Invoice (PLG/R-11) and sales Reversal Requisition (PLG/R-12) and accounted on completion of inspection.

Issue of Products/ Materials a. Despatch of Products/Materials Despatch Billing Advice (PLG/R-9) acts as the basic document for the despatch of products/materials. Delivery Challan (PLG/R-10) is collected from Planning in case of part supply and finally ratified with the receipt of Despatch Billing Advice (PLG/R-9). Those products requiring integration/Installation of Operating System/Software are carried out accordingly as indicated in the Despatch Billing Advice / Delivery Challan by QA and the same is indicated on the Carton/packing box of products, which are ready for despatch. . The despatch status of products such as Invoice no, date, customer, quantity despatched and identification no: are recorded in the Despatch Register (R-7). b. Direct Supply of Materials

Products are supplied directly by the supplier at the customer premises as per Purchase Order (PUR/R-5) instructions from Planning. Documentary evidence for the acceptance status of the product at customers premises is evidenced through the acknowledgement status indicated by the Planning Department in the copy of suppliers Invoice routed to Stores by Purchase Department. Regularisation of these products/materials are carried out by preparing GRCIR after getting supplier Invoice and corresponding customer acknowledged copy of Delivery Challan received from the Purchase Dept. Simultaneously Bin Card (R-6) is updated. In some cases products are delivered at our CSG Offices located at Kochi, Kozhikkode by the supplier for facilitating urgent delivery to the customer at nearby areas. Such products are regularized as mentioned above after getting supplier Invoice certified by Planning along with our DC copy and acknowledgement letter of CSG Office. c. Issue of Service spares / Miscellaneous Items Service spares / Miscellaneous items are issued based on the requirements specified vide Stores Requisition (CSG/R-9)/ Delivery Challan (PLG/R-10). General Activities a. Identification and traceability After completing Inspection of a particular lot the corresponding GRCIR is collected from QA and kept in Stores with QA Accepted sticker (QA/R-3-A). These products/materials are stocked in such a way that product/materials can be identified with Purchase Order Sticker and with QA sticker (QA/R-3-Aor QA/R-3-B). Keltron PCs are identified with work order number and Sl.No: written on the carton box when it received from Keltron Controls Aroor. For small parts like service spares, cables & chords, connectors etc, stickers are affixed on cartons containing a lot.


Materials received from QA as Store Credit or Store Return Note (SCN/SRN) are also stocked in the same way as in the case of GRCIR. All accept product/materials are identified with QA sticker. b. Stock Updation & Verification After stocking the product/materials, the receipt status is entered in the Bin Card (R6) by posting the accepted quantity of GRCIR/ Store Credit Note (SCN)/ Store Return Note (SRN). Similarly issues are entered in the Bin card by posting issued /dispatched quantity of SR/DC/INV. During the end of each financial year physical verification of entire stock is carried out. c. Material Handling Suitable material handling equipments such as trolley, bailing machine etc, are used depending on the type of material handled. d. Preservation and protection Applicable preservation and protection means for controlling humidity, pests and fire existinguishers are made available in the stores. Procedure for Materials (Stores) Management (KITBG / STR/ P-5) narrates the processes involved in Stores management, starting from the receipt of products/ spares / materials up to dispatch. Offering the products to Quality Assurance Department for inspection and receiving back the same is also covered. Method followed for stock updation and verification is also referred.




Purpose This procedure illustrates the methodology for carrying out evaluation, re-evaluation and inclusion of suppliers in the approved list. Scope All major purchases and services are covered in this procedure Procedure a. Registration of Supplier Purchase department collects supplier registration form (R-14) from all new

suppliers prior to the release of enquiry. Also collects information on the competency of the supplier based on capacity, experience in executing similar orders / after sales support by collecting feedback from their customers and regulatory /statutory registration details. Based on the information furnished in the supplier registration form, Purchase department recommends to Head (ITBG) for releasing enquiry. In case of proprietary products / newspaper advertisements/ recommendations from competent authorities, direct enquiries are floated without collecting registration forms. b. Evaluation of supplier Based on the approval of Head (ITBG) enquiry is floated, order is released in case of L-1, performance is monitored based on the purchase specifications and terms and conditions. On successful compliance of the above, purchase department recommends to Head (ITBG) for including the above supplier in the approved list. (PUR/R-2).


c. Re evaluation of Supplier Those suppliers whose acceptance rate (as per GRCIR)( STR/R-3) falls above 90% / rejection rate falls below 10 % based on quantity are recommended for retaining in the approved supplier list (PUR/R-2).The customer feedback / after sales support details are also considered during reevaluation. Re-evaluation is carried out annually (April). This rating criteria is not applicable forold/ obsolete models for which components/ spares are not readily available.








Purpose The purpose of the procedure is to ensure that inspection and testing of IT and related products, is carried out as described in this procedure. Scope The scope of this procedure is to carryout inspection, testing and reconfiguration of IT Products. Procedure a. Receipt of products from Store Arrival of products at stores is known from the Consignment Arrival Note forwarded by Stores (STR/R-1). Products are received from Stores for inspection along with Goods Receipt Cum Inspection Report (STR/R-3). GRCIR No, Purchase Order No,

Products specification and Quantity received are recorded in the part A of GRCIR cum Inspection Register (R-1). b. Inspection of Products Materials are taken from Stores in batches for inspection, as applicable. Products/Materials are inspected as per the specifications stipulated in the Purchase Order (PUR/R-5)/ Standard specifications (N-1). Inspection Results are entered in the Inspection Status Registers (R-2-A for systems, R-2-B for peripherals, R-2-C for UPS, R-2-D for miscellaneous items). Acceptance/Rejection status and Rejection details with serial Numbers of respective products are recorded in the Part B of GRCIR cum Inspection Register (R-1). i. Acceptance Accepted products are returned to Stores with QA passed stickers (R-3-A). Acceptance status and quantity are intimated to stores through GRCIR (STR/R-3) / Soft copy of GRCIR (STR/R-3) in the computer. ii. Rejection Products/ Materials, which are not meeting the required specifications as per Purchase Order (PUR/R-5)/ standard specification (N-1) or products/ materials with Components failure /Physical damages etc, are treated as rejected. For rejected products/ materials Rejection Report (R-4) is prepared and information is given to Purchase, Planning, and Stores departments for taking immediate corrective action and getting replacement. Rejected product is identified with Rejection tag/sticker (R3-B). No rework is entertained by ITBG. iii. Accepted with concession.


Those products falling below the stipulated specification with minor deviation are accepted with concession report based only on the recommendation from the concerned authority. It is ensured that the above acceptance will not affect the quality of products/configuration in any manner. These products are identified with concession sticker (R-3-D). iv. Monitoring and Analysis of quality performance of Inspected Products Monthly and cumulative performance analysis of quality of inspected products is carried out based on the following with respect to category of products inspected (R8) a. Total Quantity Inspected b. Total Quantity Accepted c. Total Quantity Rejected d. Reasons for Rejection (A to E) e. Percentage of Acceptance and rejection f. Attribute percentage of A to E g. Supplier wise Quality Performance c. Reconfiguration and its Inspection Reconfiguration of the system is carried out as per the requirements specified in the DC (PLG/R-10)/ DBA (PLG/R-9) Configured system is inspected subsequently and status of configuration and inspection is recorded in Reconfiguration cum Inspection Register (R-5). Warranty period of the system is indicated using warranty sticker (R6) on the cabinet. The reconfigured system is handed over to stores with DC/DBA number indicated on the carton.

d. Inspection on sample basis Inspections of the purchased products are carried out as per quality assurance plan (N-2). QAP specifies the population / lot size of products to be considered while selecting the sample. Sample size to be selected and limit of acceptance incase of normal and tightened inspection is stipulated vide QAP. GRCIR number, lot / batch size, serial number of the sample, number of samples accepted / rejected reason for rejection etc in case of normal and tightened inspection is recorded in Quality Inspection Report (R-8). e. Inspection of products at site In certain cases when the quantity is very high/ when customer urgently requires the product, direct despatch to site is effected. In such cases, GRCIR is regularised based on the receipt status indicated in the delivery challan (PLG/R-10) / Invoice (PLG/R11). Inspection is carried out at site during installation by CSG. f. Control of non-conforming products and exercising corrective and preventive actions Those products that failed at customers premises during installation/ with in warranty period are identified from (CSG-R-1 and R-14) and subjected to control by replacement / other appropriate actions. QA analyses the root causes for the failure and takes corrective / preventive action based on the severity of the impact of the nonconformity on the product (CSG-R-1and R-14).

Procedure for Product development (KITBG/SWG/P-34) narrates the methodology adopted for the development activities and stages of various software products. Administrative activities of the project, project planning and project development are described in this procedure.

Procedure for Product Installation (KITBG/ SWG/ P-37) addresses the installation and related support activities of software products. Server co-location procedure and installation activities from both development center and customer premises are mentioned in this procedure.

RESOURCE MANAGEMENT KITBG determines and provides the resources needed to implement and maintain the quality management system and continually improve its effectiveness and to enhance customer satisfaction by meeting customer requirements. KITBG provides and maintains the infrastructure needed to achieve conformity to product requirements. Infrastructure includes, as applicable a. buildings, workspace and associated utilities b. process equipment (both hardware and software), and c. supportive services (such as transport, communication or information systems)

PRODUCT REALIZATION KITBG plans and develops the processes needed for the product realization. Planning of product realization is consistent with the requirements of the other processes of the quality management system. In planning product realization, the organization determines the following, as appropriate: a. quality objectives and requirements for the product


the need to establish processes and documents, and to provide resources

specific to the product. c. required verification, validation, monitoring, measurement, inspection and test activities specific to the product and criteria for product acceptance. d. records needed to provide evidence that the realization processes and resulting product meet requirements e. the output of this planning is in a form suitable for the organization methods of operations.

Procedure for Product development narrates the methodology adopted for the development activities and stages of various software products. Procedure for operations management illustrates the methods to ensure proper planning for the realization of required products and related services are covered in this procedure. Suitable control measures are established & implemented so that planning can monitor and confirm that products as per specifications are delivered to the customers with in the target date. Receipt of payment after installation of the product supplied, and generation of data sheet for Management information System also form part of planning activities.

Customer-related processes Determination of requirements related to the product KITBG determines:


a. requirements specified by the customer, including the requirements for delivery and post-delivery activities. b. requirements not stated by the customer but necessary for specified or intended use, where known, c. statutory and regulatory requirements applicable to the product, and d. any additional requirements considered necessary by the organization.

Review of requirements related to the product KITBG reviews the requirements related to the product. This review is conducted prior to the organizations commitment to supply of products to the customer (e.g. submission of tenders, acceptance of contracts or orders, acceptance of changes of contracts or orders) and ensures that a. product requirements are defined. b. contract or order requirements differing from those previously expressed or

resolved, and c. the organization has the ability to meet the defined requirements Records of the results of the review and actions arising from the review are maintained. Where the customer provides no documented statement of requirements, the customer requirements are confirmed by the organization before acceptance. Where product requirements are changed, the organization ensures that relevant documents are amended and that relevant personnel are made aware of the changed requirements


Customer communication KITBG determines and implements effective arrangements for communicating with customers in relation to a. product intimation b. enquiries, contracts or order handling, including amendments, and c. customer feedback, including customer complaints. Design and development KITBG plans and controls the design and development of product.During the design and development planning, the organization determines a. the design and development stages b. the review, verification and validation that are appropriate to each design and development stages, and c. the responsibilities and authorities to design and development. The organization manages the interfaces between different groups involved in design and development to ensure effective communication and clear assignment of responsibility. Planning output is updated, as appropriate, as the design and development progresses. Design and development inputs Inputs relating to product requirements are determined and records maintained. These inputs include a. functional and performance requirements b. applicable statutory and regulatory requirements

c. where applicable, information derived from previous similar designs, and d. other requirements essential for design and development The inputs are reviewed for adequacy. Requirements are complete, unambiguous and not in conflict with each other. Design and development outputs The outputs of design and development are in a form suitable for verification against the design and development input and are approved prior to release. Design and development outputs a. meet the input requirements for design and development b. provide appropriate information for purchasing, production and service

provision. c. contain or reference product acceptance criteria, and d. specify the characteristics of the product that are essential for its safe and

proper use. Design and development review At suitable stages, systematic reviews of design and development are

performed in accordance with planned arrangements a. to evaluate the ability of the results of design and development to meet

requirements, and b. to identify any problems and propose necessary actions


Participants in such reviews include representatives of functions concerned with the design and development stage(s) being reviewed. Records of the results of the reviews and any necessary actions are maintained.

Design and development verification Verification is performed in accordance with planned arrangements to ensure that the design and development outputs have met the design and development inputs requirements. Records of the results of the verification and any necessary actions are maintained.

Design and development validation Design and development validation are performed in accordance with planned

arrangements to ensure that the resulting product is capable of meeting the requirements for the specified application or intended use where known. Wherever applicable, of validation the is completed prior to the delivery or implementation product. Records of the result of validation and any

necessary actions are maintained.

MEASUREMENT, ANALYSIS AND IMPROVEMENT KITBG plans and implements the monitoring, measurement, analysis and improvement processes needed a. to demonstrate conformity to product requirements,

b. to ensure conformity of the quality management system, and c. to continually improve the effectiveness of the quality management system. This includes determination of applicable methods, including statistical techniques, and the extent of their use Monitoring and measurement Customer satisfaction As one of the measurements of the performance of the quality management system, the organization monitors information relating to customer perception as to whether the organization has met customer requirements. The method for obtaining and using this information is determined.

Internal audit The organization conducts internal audits at planned intervals to determine whether the quality management system a. conforms to the planned arrangements, to the requirements of ISO 9001:2008 Standard and to the quality management system requirements established by KITBG, and b. is effectively implemented and maintained An audit programme is planned, taking into consideration the status and importance of the processes and areas to be audited, as well as the results of previous audits. The audit criteria, scope, frequency and methods are defined. The selection of auditors and conduct of audits ensure objectively and impartially of the audit process. Auditors do not audit their own work. A documented procedure

is established to define the responsibilities

and requirements

for planning and

conducting audits, establishing records and reporting results.

Records of the audits and their result are maintained. The management responsible for the area being audited ensures that any necessary corrections and corrective actions are taken without undue delay to eliminate detected nonconformities and their causes. Follow-up activities include the verification of the actions taken and the reporting of the verification results.

Control of nonconforming product KITBG ensures is that product and which does not conform to product




to prevent its unintended use or

delivery. A documented procedure is established to define the controls and related responsibilities and authorities for dealing with nonconforming product. Where applicable, KITBG deals with nonconforming product by one or more of the following ways: a. by taking action to eliminate the detected nonconformity b. by authorizing its use, release or acceptance under concession by relevant

authority and, where applicable,by the customer. c. by taking action to preclude its original intended use or application d. by taking action appropriate to the effects, or potential effects, of the

nonconformity when nonconforming product is detected after delivery or use has started. When nonconforming product is corrected it is subjected to re87






the requirements. Records of the

nature of nonconformities and any subsequent actions taken, including concessions obtained are maintained.

Analysis of data KITBG determines, collects and analyses appropriate data to demonstrate the suitability and effectiveness of the quality management system and to evaluate where continual improvement of the effectiveness of the quality management system can be made. This includes data generated as a result of monitoring and measurement and from other relevant sources. The analysis of data provides information relating to a. customer satisfaction b. conformity to product requirements

c. characteristics and trends of processes and products, including opportunities for preventive action. d. suppliers

Improvement KITBG continually improves the effectiveness of the quality management system through the use of quality policy, quality objectives, audit results, analysis of data, corrective and preventive actions and management review.


KPI, colour indicators, attribute % etc established vide objectives provide evidences for continual improvement.

Corrective action KITBG takes action to eliminate the cause of nonconformities in order to prevent recurrence. Corrective actions appropriate to the effect of nonconformities encountered are taken. A documented procedure is established to define requirements for a. reviewing nonconformities (including customer complaints) b. determining the cause of nonconformities c. evaluating the need for action to ensure that nonconformities do not recur

d. determining and implementing action needed e. records of the results of actions taken.

Preventive action KITBG determines action to eliminate the causes of potential nonconformities

in order to prevent their occurrence. Preventive actions appropriate to the effects of the potential problems are taken. A documented procedure is established to define requirements for a. determining potential nonconformities and their causes b. evaluating the need for action to prevent occurrence of nonconformities

c. determining and implementing action needed d. records of the results of actions taken, and e. reviewing the effectiveness of the preventive actions taken

Quality manual KITBG has established and is maintaining a quality manual ( Apex Manual) that includes a. the scope of the quality management system, including details of and justification for any exclusions b. the documented procedures established for the quality management system, or reference to them , and c. description of the interaction between the processes of the quality management system. Control of documents Documents required by the quality management system are controlled. Records are a special type of documents and are controlled according to the requirements of the standard. A documented procedure is established to define the controls needed a. to approve documents for adequacy prior to issue. b. to review and update as necessary and re-approve documents c. to ensure the changes and current revision status if documents are identified. d. to ensure that relevant versions of applicable documents are available at points of use

e. to ensure that documents remain legible and readily identifiable. f. to ensure to that be documents necessary of for external origin determined by the


the planning and operation of the quality

management system are identified and their distribution controlled, and g. to prevent the unintended use of obsolete documents and to apply suitable identification to them if they are retained for any purpose.




Keltron produces high quality products but at a comparatively higher price than its competitors.

Keltron has a very good brand image among the public due to the best quality television sets and other consumer products.

The current system is only partially automated.


Though the NWG, ITP, CSG SBU and accounts operations of Finance group is carried out through dedicated discrete software they are not integrated and web based.

The planning purchase, store functions are carried out manually which is tedious task that shows a gap between the process and operations.

The processes performed involving the retrieval of information and identifying the goods status is time consuming.

The KITBG does the market research and receives orders from the customers. Once the orders are received the purchase department purchases the products at an optimum level. Keltron warehouse by the job lot storage approach, where all the different products related to the needs of a certain type of customer or related to the needs of a particular job are stored together. The stock is verified on quarterly basis. At first the order is accepted by the marketing department, planning group raises the purchase indent then the purchase department places order to suppliers who can deliver the goods required by the customer. On the receipt of ordered material the stock department posted into the stock/bin card. The next step is to deliver the material to the customer which also required posting to Bin Card updating stock. The

transportation is mainly done through the roadways and in some cases through rails also. The store has to keep various registers of all the transactions taking place. This demands an excess manpower and requires a lot of time in the completion of the process.

The main problems encountered by Keltron are: The transaction process in material management is very complex and each process consumes a lot of time.

The business process is lengthy and manually done. As a result of this, managing the goods in transit, controlling the stock lacks the cent percentage accuracy.

A lot of time is consumed in transportation since the facilities are located in a remote area like Aroor. There is limited scope for product diversification.

Keltron produces high quality products but at a comparatively higher price than its competitors.

Proper actions and efforts are not made to extend the existing customer base.

There has been shortage of trained personnel thereby affecting the after sales services. Uncontrolled increase in the price of raw materials

Lack of promotional activities. Long procedural delays. Under utilization of men and machinery



The company should try to use its production capacity to the maximum. The company should try to sell its products at competitive price.

Keltron needs to automate its procedures to effectively promote, maintain and satisfy customer requirements promptly. An inhouse developed ERP like software may be implemented to integrate all business activities of Keltron. The setting up of an R & D department would be very helpful for identifying innovative products for the development of the organisation. New marketing strategies have to be done to attract new customers.


Keltron can develop and implement end-to-end solution with in-house capability gaps. The manufacturing facility at Trivandrum can be used to cater to the customers between Trivandrum and Ernakulam and the existing facility at Aroor may be used to meet the customer needs of North Kerala.

wherever possible and with strategic tie up in case of technological

Training has to be given to the service personnels to make after sales service effective.

Skilled workforce must be hired for the organization. The past records have to be clearly and accurately maintained. The goods have to be carefully maintained during their transition to the destination. Funds should be made possible for the technology up gradation.


A nations future and its ability to compute in the global market depend greatly on how it generates new ideas and innovations in science and technology. Keltron has initiated steps to manufacture and promote high quality IT products to its consumers. Keltron being a Public sector undertaking, under the Government of Kerala and being approved as a Total Solution Provider, customers have more confidence on placing orders, even directly on nomination basis without tendering. But, Keltron can be more efficient by adopting various methods as discussed above.

The supply chain management should be dealt with highly skilled labors, thereby making use of its resources most effectively by reducing the time consumed in delivering its products to the consumers as this can in turn bring prosperity to the organisation.


Annual report of Keltron Apex manual, Department files and other records of Keltron