CHAPTER I

INTRODUCTION

1.1 INTRODUCTION OF THE STUDY

Logistics is basically managing and controlling the flow or supply of goods,

information, personnel, utilities and other resources from one location to destination to
meet the demands of a customer or the requirement of one department or section of the
organization.

Definitions

The process of planning, implementing, and controlling the efficient, cost

effective flow and storage of raw materials, in-process inventory, finished goods and
related information from point of origin to point of consumption for the purpose of
meeting customer requirements defined by Canadian Association of Logistics
Management.

According to the Council of Logistics Management (CLM) “Logistics is the process of

planning, implementing and controlling the efficient and effective flow of goods, services
and related information from point of origin to point of consumption in order to meet
customer requirements”.

OPERATING OBJECTIVES OF LOGISTICS                                      

1. Rapid Response: Rapid response is concerned with a firm’s ability to satisfy

customer’s requirement in a timely manner. Instead of stocking the goods and
supplying on demand, orders are executed on shipment-to-shipment basis. Here IT
helps to postpone the logistical operations to the latest possible time and then execute
rapid delivery as when needed by customer.
2. Minimum Variance: Variance is any unexpected event that disrupts system.
Logistical operations are disrupted by events like delays in order receipt, disruption in
manufacturing, goods damaged at customer’s location and delivery to an incorrect
location etc. Traditional solution to deal with variance was to keep safety stock or use

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 high cost transportation. Such practices were expensive and risky and thus have been
replaced by information technology to achieve positive logistics control.
3. Minimum Inventory: The objective of minimum inventory involves asset
commitment and inventory turnover. Asset commitment is the financial value of
inventory developed throughout the logical system and inventory turnover is the rate
of inventory usage over time. The objective is to reduce the inventory without
sacrificing customer satisfaction.
4. Movement Consolidation: One of the most significant logistical costs is
transportation. Transportation cost depends on type of product, size of shipment and
distance. Movement consolidation means grouping small shipments together in order
to reduce transportation cost.
5. Quality Improvement: Logistics is a prime part of developing and maintaining
continuous TQM improvement. If the quality of product fails, logistics will have to
ship the product out of customer’s premises and repeat the logistical function again.
This adds to cost and customer dissatisfaction.
6. Life-Cycle Support: Life cycle support is also called cradle-to-cradle logistical
support. It means going beyond reverse logistics and recycling to include the
possibility of after sale services, product recalls and product disposal. This means that
firms must consider how to make a product and its package (cradle) and the how to
remake and reuse them (to cradle). E.g. Cold drink industries use their glass bottle
again and again whereas the cans are reused in making paper dishes.

TYPES OF LOGISTICS

1. Reverse Logistics

Reverse logistics is also known as Product Recall. It may be defined as a process of

moving goods from their place of use, back to their place of manufacture for re-
processing, refilling, repair, and recycling or waste disposal.

Reasons for Reverse Logistics

 Rigid quality standards- it is critical in case of contaminated products, which can

cause environmental hazard.
 Rigid laws prohibiting unscientific disposal of items

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 Rigid laws making recycling mandatory
 Transit damage – e.g. leaking containers containing hazardous material.
 Product expiration.
 Erroneous order processing by supplier
 Exchange of new product for the old ones.
 Return for repair or refill.

Drivers in Reverse Logistics

The success of reverse logistics depends upon the efficiency of following subsystems:

 Product Location: For product recall it is necessary to identify the product location
in the physical distribution system of the firm. It is difficult in case of consumer goods
but easier in case of industrial goods.
 Product Collection System: After the product location is identified, product
collection is to be done through company’s field force or third party.
 Recycling / Disposal Centers: This may be company’s plant, warehouse or any other
location. Called back products must be inspected before recycling or disposal etc.
 Documentation System: Proper documents should be maintained at each level, this
would help in tracing the product location.

2. Inbound Logistics

 All the activities related to the material movement till the dispatch of the products out
of the factory gate are called as inbound logistics activities.
 Creation of value in the products depends upon availability of inputs on time. Making
available these inputs on time at minimum cost is the essence of Inbound Logistics.
 Activities of a procurement performance cycle come under the scope of Inbound
Logistics. They are transportation during procurement operation, storage, handling
and overall management of inventory of inputs.

3. Outbound Logistics

 All the activities in which the value added goods are to be made available in the
market for customers are called as outbound logistics activities.

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  Success of the firm depends upon the supply of products to the customer on time.
Supplying the products of firm at marketplace at minimum cost is the essence of
Outbound Logistics.
 Activities of distribution performance cycle come under the scope of Outbound
Logistics. They are order management, transportation, warehousing, packaging,
handling etc.

4. Third-Party Logistics (3PL)

In order to keep the costs of inbound and outbound logistics activities under control,
an outside agency appointed to perform these logistics functions is called “Third Party
Logistics”.

5. Forth-Party Logistics (4PL)

Forth Party Logistics is a complete outsourcing of manufacturing and logistics

functions including selection of Third Party service provider.

Logistics in Indian Business Environment

 Liberalization opens our door to competition.

 Global business has long supply & distribution lines.
 Changing Indian customer, aware, demanding and less brand loyal
 Competition ensures that product differentiation in terms of quality is difficult.
 Product life cycles are shrinking
 Our markets are shifting from sellers to buyers
 Many consumer products are moving into commodities market
 In India, large distances separate production and consumption centers. Essential
commodities have to travel from Food Corporation Warehouses to consumers through
PDS.
 Still Logistics performance in India has not been impressive – Fruits and vegetables
are grown at various places but do not enjoy access to market.

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LOGISTICS IN THE GLOBALISATION

Logistics functions are same domestically and globally but differ in four D’s i.e.
distance, documents, diversity in culture and demand of customer. In the global logistics
distances are longer, documentation is more extensive, customer demand varies to satisfy
cultural differences within both, countries and regions. Developing strategies to respond to
the 4 D environment is the global challenge for logistics management.

There are some factors that facilitate globalization and necessitate global logistics
and also some barriers that continue to impede global logistics. Logistics management must
balance the cost of overcoming these barriers with the potential benefits of going global.

Forces Driving Globalization of Logistics

1. Economic Growth: After WWII there was a growth in industrial sector of developed
countries and their manufacturing and logistics productivity increased. This forces the
firm to expand their marketing into developing nations. Such expansion requires the
integration of global manufacturing with marketing through logistics.
2. Supply Chain Perspective: Firms traditionally sought logistical control as many
essential activities as possible internally, which resulted in private warehouses and
transportation. Such privatization increased the capital and assets to support logistics
operations resulting in decline of Return on Investment and hence the concept of
outsourcing and supply chain emerged during 1980s.
3. Regionalization: Traditionally trade and transportation across the political borders of
countries requires political formalities, which adds to the logistics cost without any
value addition to the consumer. Regionalization in the form of trade associations such
as EU, NAFTA and SAARC etc. removed such barriers and facilitates global
logistics.
4. Technology: Mass communication and information technology exposed international
consumers to foreign products, thus stimulating convergence of global needs and
preferences. This promotes global marketing and global logistics.
5. Transportation Deregulation: Initially there have been restrictions for international
transportation ownership and operating rights e.g. foreign carriers could not operate
domestically, steamship lines could not own land based transport like motor or rail
carriers etc. but such restrictions have been removed in most of the countries.

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Barriers to Global Logistics

1. Marketing Barriers: This includes (i) entry restrictions by placing legal or physical
barriers on importing (ii) poor information regarding market size, demographics and
competition (iii) pricing fluctuation and tariff barriers.
2. Competition: Different rules in different countries concerning competitive
governance   also serve as global logistics barriers.
3. Financial Barriers: This includes (i) difficulties in forecasting in the global
environment (ii) institutional infrastructure barriers result from differences in services
offered by banks, insurance firms, legal counselors etc.
4. Distribution Channels: Lack of infrastructural standardization such as differences in
transportation and material handling equipment, warehouse and port facilities,
communication system etc. also serves as global logistics barriers.

Logistics fields

Procurement logistics

It is consists of activities such as market research, requirements planning, make-or-

buy decisions, supplier management, ordering, and order controlling. The targets in
procurement logistics might be contradictory: maximizing efficiency by concentrating on
core competences, outsourcing while maintaining the autonomy of the company, or
minimizing procurement costs while maximizing security within the supply process.

Production logistics 

It is connects procurement to distribution logistics. Its main function is to use

available production capacities to produce the products needed in distribution logistics.
Production logistics activities are related to organizational concepts, layout planning,
production planning, and control.

Distribution logistics

  It main tasks the delivery of the finished products to the customer. It consists of order
processing, warehousing, and transportation. Distribution logistics is necessary because the
time, place, and quantity of production differs with the time, place, and quantity of
consumption.

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Disposal logistics

Its main function to reduce logistics cost(s) and enhance service(s) related to the
disposal of waste produced during the operation of a business.

Reverse logistics 

It denotes all those operations related to the reuse of products and materials. The
reverse logistics process includes the management and the sale of surpluses, as well as
products being returned to vendors from buyers. Reverse logistics stands for all operations
related to the reuse of products and materials. It is "the process of planning, implementing,
and controlling the efficient, cost effective flow of raw materials, in-process inventory,
finished goods and related information from the point of consumption to the point of origin
for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is
the process of moving goods from their typical final destination for the purpose of capturing
value, or proper disposal.

Green Logistics 

Describes all attempts to measure and minimize the ecological impact of logistics
activities. This includes all activities of the forward and reverse flows. This can be achieved
through intermodal freight transport, path optimization, vehicle saturation and city logistics.

RAM Logistics 

Combines both business logistics and military logistics since it is concerned with highly

complicated technological systems for which Reliability, Availability and Maintainability are
essential, ex: telecommunication systems and military supercomputers.

Military logistics

In military science, maintaining one's supply lines while disrupting those of the
enemy is a crucial—some would say the most crucial—element of military strategy, since an
armed force without resources and transportation is defenseless. The defeat of the British in
the American War of Independence and the defeat of the Axis in the African theatre of World
War II are attributed to logistical failure. The historical leaders Hannibal Barca, Alexander
the Great, and the Duke of Wellington are considered to have been logistical geniuses.

Militaries have a significant need for logistics solutions and so have developed advanced
implementations. Integrated Logistics Support(ILS) is a discipline used in military industries

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to ensure an easily supportable system with a robust customer service (logistic) concept at the
lowest cost and in line with (often high) reliability, availability, maintainability, and other
requirements, as defined for the project.

Production logistics

The term production logistics describes logistic processes within an industry.

Production logistics aims to ensure that each machine and workstation receives the right
product in the right quantity and quality at the right time. The concern is not the
transportation itself, but to streamline and control the flow through value-adding processes
and to eliminate non–value-adding processes. Production logistics can operate in existing as
well as new plants. Manufacturing in an existing plant is a constantly changing
process.]Machines are exchanged and new ones added, which gives the opportunity to
improve the production logistics system accordingly. Production logistics provides the means
to achieve customer response and capital efficiency.

Production logistics becomes more important with decreasing batch sizes. In many
industries (e.g., mobile phones), the short-term goal is a batch size of one, allowing even a
single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential
part of production logistics due to product safety and reliability issues, is also gaining
importance, especially in the automotive and medical industries.

Indian logistics industry

The Logistics industry includes five broad segments – ocean freight, rail freight,
air freight, trucking and third party Logistics (3PL) services The current size of the Indian
Logistics Industry is estimated around $225bn and is expected to reach around $350bn by
2015 As per industry estimates as provided by the Fitch Rating Agency, there is a positive
future outlook for the Indian Logistics Industry and it is estimated that the industry will grow
at 15-20% over the next few years Several factors helped the growth of logistics industry in
India over the last decade that include changing tax system as well as a rapid growth in
industries such as automobile, pharmaceuticals, FMCG and retail 70% of the total domestic
product is transported through the road network and 15% through the rail network. Domestic
companies are willing to expand their Efficiency to meet rising demand globally according to
a study by industry body.

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Express Logistics
Organized players have a monopoly over the express logistics industry. 65% of
express business is in the hands of organized players, while semi-organized and unorganized
players account for 25% and then the remaining 10% of the market by EMS Speed Post. On
the domestic front, unorganized players hold 41% of the market share based on price
advantage and organized players account for 45% and EMS Speed Post the remaining 14%.
Warehouses
Warehouses have become key growth drivers in the logistics industry. Warehousing
does not only provide conventional storing services, but also provides value-added services
like consolidation and breaking up of cargo, packaging, labeling, bar coding and reverse
logistics etc. Warehousing and related activities account for approximately 20% of total
logistics industry and as per KPMG, an additional 120million square feet of warehousing
space is needed in 2012 to meet demand gap in storage space. Our view is that Warehousing
will see a lot of investment in the coming years. To emphasis the significance of government
initiatives in the logistics industry and to increase the competence in the sector the
government has introduced private sector participation, especially in the port sector The
major initiative in transport infrastructure is an introduction of National Maritime
Development Program (NMDP) with an investment of Rs 568bn. NMDP would be
addressing the challenges of the growing international traffic demand of the country along
with developing the port facilities at par with world class standards In order to liberalize the
railway services, the government opened its doors of container business to private parties The
Government has removed the differential state-level taxes that were causing higher unit and
inventory carrying costs, and introduced uniform Goods and Services Tax (GST) to
reorganize warehousing system in India
Road Transport Industry
A decline in the global road sector’s size is believed to have occurred in 2009 but the
sector is expected to resume growth in 2010 since carriage by truck is often the initial and
final stage of freight transport. The global road sector produced total revenues of US$ 2,308
billion in 2008, with a CAGR of 7.8% between 2004 and 2008. Competition is intense and
entry barriers are low, which can be illustrated by the fragmented nature of logistics with the
top 50 companies having a market share of only 33%.10 Increasing costs due to high oil
prices and new environmental measures adopted, since road transport is the largest
contributor to global warming, negatively impact the margins of the road transport
companies.

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Railroad Transport Industry
After good growth between 2003 and 2007, with a CAGR of 6.3%, the growth of the
railroads sector is forecasted to lose speed. The global railroads sector created US$ 472.1
billion of revenue in 2007.10 Since expansion of the network is so capital-intensive, the rail
sector is mostly constrained to operate with its existing network. However Europe and North
America are working towards improving and renovating existing railway infrastructures.
Air Transport Industry
The global air freight sector created total revenues of US$ 100 billion in 2008, with a
CAGR amounting to 5.6% between 2004 and 2008. After a rapid growth stage between 2004
and 2007 (a CAGR of 7.4%), the air freight sector grew only by 0.1% in terms of value and
contracted by 0.5% in terms of volume in 2008.10 In 2009 some airports reported extreme
decreases in freight volumes due to lower frequency, merged routes and bankruptcies. Also
high oil costs challenge the companies and force them to pass on such costs to customers.
The global airline industry has experienced strong growth since 2003 and that growth
is expected to continue in the future. The global airline industry produced US$ 429.9 billion
of revenue in 2007, with a CAGR of 11.2% between 2003 and 2007.10 Price has been
becoming a dominant factor in competition between airlines, even for the business segment.
The use of on-line booking enables customers to find the lowest priced ticket for their trip.
Even though the intensive capital investment requirement and safety regulations are barriers
to potential new entrants, low-cost competitors have managed to challenge the established
airlines in recent years.
Maritime Transport Industry
The global maritime industry grew very fast, with a CAGR of 34.5% between 2004
and 2006 but revenues then declined by 21.4% in 2007. Further decline is expected to have
occurred in 2009 but a recovery period is forecast to start towards 2013. The maritime
industry earned US$ 749 billion of revenue in 2008. The industry is highly capital intensive
due to the cost of vessels and large cash flows required for funding working capital
requirements. Moreover, expertise and technical know-how are critical factors since the
international shipping regulations related to safety are strict. Competition is price based;
however, companies with younger fleets can charge a premium.

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 1.2 INDUSTRY PROFILE

POULTRY INDUSTRY

Indian poultry sector has been growing at around 8-10% annually over the last decade
with broiler meat volumes growing at more than 10% while table egg at 5-6% driven by
increased domestic consumption. The production capacity has responded with increased
integration and large scale implementation of contract poultry farming. Farmers in India have
moved from rearing country birds in the past to rearing hybrids which ensure faster growth of
chicks, higher eggs per bird, increased hatchability, low mortality rates, excellent feed
conversion and consequently sustainable profits to the poultry farmers. The industry has been
supported by indigenous advancements in genetic capabilities, veterinary health, poultry feed,
poultry equipment, and poultry processing sectors. The productivity gains of poultry industry
are reflected in relatively lower price increases in poultry meat over last five years compared
to other meat products - Poultry WPI (wholesale price index) has grown at 12% y-o-y over
2008-2013 as against 21% for overall meat products basket – providing an affordable
alternative for meeting protein requirements in Indian diet.
India is the fifth largest producer of eggs and ninth largest producer of poultry meat in
the world, producing over 34 billion eggs and about 600,000 tons of poultry meat in 2004. In
the overall market for poultry products, India was positioned 17 in World Poultry Production.
And analysts estimate that the poultry sector in India has been growing at a much faster rate,
along with other industries such as BPO and Securities market. Over the past decade the
poultry industry in India has contributed approximately US $229million, to the Gross
National Product (GNP).
 
Several breakthroughs in poultry science and technology have led to the development
of genetically superior breeds capable of higher production, even under adverse climatic
conditions that offer opportunities for overseas entrepreneurs to expand export and import of
poultry products on a large scale. The average per capita poultry meat consumption is also
estimated to increase from 0.69 to 1.28 kilograms, during the 2000-2004. Overall, analysts
studies that the total egg consumption is estimated to increase from 34 billion in 2000 and to
106 billion in 2020, while poultry meat consumption is predicted to increase from 687
million kilograms to 1,674 million kilograms.

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 Domestic poultry meat production (broiler - carcass weight) is estimated to have
increased from less than 1.0 million tons in 2000 to 3.4 million tons in 2012 with per capita
consumption increasing from 0.8 kg to 2.8 kg p.a during same period. Table egg production
is estimated to have increased from 30 billion eggs in 2000 to 66 billion eggs in 2012 with
per capita egg consumption increasing from 28 to 55 eggs during that period. The healthy
growth in poultry output over last decade makes India one of the fastest growing major world
market in the segment with future growth potential remaining strong on back of wide gap
against global per capital consumption norms and favorable socio economic factors.

CY 2012, particularly second half, was a tough year for the industry on back of
considerable increase in production costs with feed ingredients (Maize and Soymeal)
touching record highs and realizations suffering on back of oversupply in industry. For
instance average production costs for a typical commercial broiler farm which was in the
range of Rs. 45-50/kg in 2011 increased to more than Rs. 62-65/kg in H2CY2012
(moderating slightly since new maize/soya crop arrival) while broiler realization growth
remaining muted. To make things worse, broiler realizations nosedived in last quarter of 2012
on back of oversupply and sporadic instances of ‘bird flu’ in certain geographies. Strong
2010 and 2011 had resulted in sizeable investments in capacity expansion especially in
broiler segment and same resulted in oversupply. This significantly affected profitability of
poultry farms and integrators in 2012 with all the poultry players recording losses in broiler
business in second half of 2012 and shutting down of sizeable number of independent poultry
farms.

The efforts of key integrators in poultry industry to control supply through measures
like ‘hatching holidays’ initiated towards fag end of 2012 has resulted in improved
realizations in 2013 and industry is expected to register much better profitability compared to
last calendar year. The deliberate attempts to control supply will result in lower volumes (in
terms of broiler chick placements) though industry is projected to register healthy growth in
value terms. The continued industry wide co-ordination will be critical to maintain
sustainable margins in the business considering increased production costs and seasonal
volatility associated with the poultry products though long term solution lies in developing
processed chicken industry with value added offerings to protect against regional and
seasonal variations in prices.

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 Large integrators as well as Government bodies are investing and promoting
increased processing of poultry products (in form of frozen/chilled chicken and further
processing in form of ready to cook/eat) given increased acceptability of processed chicken in
domestic market though 92-93% of domestic purchases are still through wet market due to
traditional preferences. Increasing penetration of QSRs (Quick Service Restaurants),
continued increase in proportion of working women, changing lifestyles with preference
towards convenience food and higher purchasing power are expected to provide strong
growth push for processed poultry industry in long term.

ICRA expect domestic broiler meat demand to continue to grow at 8-10% and table
egg demand to grow at 4-5% in long term on back of favorable socio economic factors like
rising purchasing power, changing food habits, and increasing urbanization. Key challenges
faced by industry include high feed costs, inadequate cold chain and transportation
infrastructure, high vulnerability to disease outbreaks and highly volatile realizations
affecting cash flows. Transition from a predominantly live bird/wet market to a chilled/frozen
market is crucial for the future expansion of domestic poultry industry as well as to increase
presence in international trade where India has negligible presence. Developing efficient
distribution system with large investments required in cold chain infrastructure and
increasing market acceptability of frozen chicken are going to be the key industry drivers in
long-term.

Poultry Federation of India

The Poultry Federation of India is the voice of the Indian Poultry Industry, committed
to its growth. Serving producers and processors of turkey, chicken, quail, squab and egg
products, the PFI provides a united voice for the industry with government, media and the
general public. The mission of the PFI is to preserve, promote and protect the activities that
bring value to stake holders of the poultry industry in India.

Federation membership consists of growers, producers, industry employees, allied

industry suppliers and "main street" businesses, which recognize the importance of poultry in
India's economy.

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 PFI officers, directors and committee members represent all segments of the poultry
industry and serve without compensation, giving freely of their time and talents to keep
poultry industry competitive.

Committees, coordinated through the PFI office, carry out most activities. These
committees plan and implement the Federation's activities. In addition to representatives from
all phases of the poultry industry and allied industry, personnel from various organizations
have come together to serve the poultry industry.

Aims & objectives

1. To assist and promote the growth and development of poultry in every way in the
country.
2. The foster and encourage the exchange of information relating to poultry farming
and allied industries.

3. To promote and organize national campaigns for promotion of poultry products

through advertisements, conferences, shows etc.

4. To collect, classify and circulate statistical and other information relation to

poultry.

5. To represents that difficulties of poultry and allied industries to the central and
state governments and other authorities concerned and to obtain redress thereof and to
endeavor to remove all impediments in the growths and development of the poultry.

6. To do all such lawful things as are incidental or conductive to and in consonance

with the attainment of the above objectives.

7. To promote the interests of commercial poultry as a whole.

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 1.3. COMPANY PROFILE

Over a period of 25 years, Suguna has gone from strength to strength and has become
a Rs. 4800 crore company that makes it India’s No. 1 broiler producer. Along the way,
Suguna’s pioneering efforts in contract farming helped create thousands of rural
entrepreneurs who share the growth successfully. "Poultry Integration" introduced and
pioneered by Suguna in the country has energized the livelihoods of farmers in rural India.

Suguna ranks among the top ten poultry companies worldwide. With operations in 16
states across India, it offers a range of poultry products and services. The fully integrated
operations cover broiler and layer farming, hatcheries, feed mills, processing plants, vaccines
and exports. Suguna markets live broiler chicken, value added eggs and frozen chicken. With
the intent to provide consumers with fresh, clean and hygienic packed chicken, Suguna has
set up a chain of modern retail outlets.

Today, the company’s brand Suguna Chicken is a household name in India. With its
Suguna Daily Fresh outlets, Suguna Home Bites, Suguna Anytime processed chicken and
four varieties of specialty Suguna value added eggs, Suguna is the undisputed leader in
poultry products. Suguna Home Bites being the latest in its product range is a new category
of home meal replacements (HMR).

Milestone

The current Managing Director Mr. B.Soundararajan and Joint Managing Director
Mr. G.B. Sundararajan head the group. Suguna currently operates in 11 states working with
15,000 farmers, 25,000 channel partners and 4,800 employees. At the heart of Suguna’s
success lies the vision of energizing rural India. Their business is worth Rs. 4,200 corer. They
got 1st place in poultry farm in India level and 13th place in World level.

Suguna in Broiler Production

Suguna has become the household name in the broiler chicken industry. Suguna
stands first in broiler production in India (and 4th in the world by volume). Suguna Poultry
Farm revolutionized the Indian poultry industry through contract farming. Suguna Chicken is
a highly trusted brand name offering high quality, nutritious, hygienic and affordable broiler
chicken.

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Suguna in Layers industry

Suguna offers day old Layer chicks and pullets to Indian farmers who prefer more
number of saleable eggs and layers that are highly efficient in gram feed per egg, and
adaptable to different environmental conditions with high livability. The chick is a white-egg
layer and as such highly suitable for cages, deep litter, aviary and free-range management.

Suguna any time frozen chicken

Suguna exports frozen chicken products, under the Suguna Anytime brand to Middle
East, where they are well received and have a good presence. Sugie's products are processed
in a modern processing plant near Udumalpet which is HACCP certified and abides the
international standards based on Total Quality Management (TQM) system with strict
compliance to hygiene and inspection requirements and adopting the traditional halal
technique. Suguna Anytime frozen chicken is also available domestically in all metros.

Suguna Daily Fresh

Suguna Daily Fresh is Suguna’s latest venture comprising a chain of high-quality

retail stores which retail fresh hygienic ready to cook chicken and as well as specialty eggs,
mutton and seafood. These stores provide a novel and hygienic buying experience for our
discerning customers. One can get choice portions of fresh chicken and also ready-to-cook
items at these outlets, which incorporate hygienic storage and packing. Plans are on to open
175 stores across India by the coming year.

Suguna Branded eggs

Suguna offers a range of value added eggs fortified with special natural nutrients,
catering to the nutritional and health requirements of various groups of people. Suguna Heart
enriched with Omega 3 fatty acids and Vitamin E has up to 50% lower cholesterol than
ordinary table eggs and helps maintain a healthy heart. Suguna Active, enriched with DHA,
Organic Selenium, and Vitamin E is particularly good for children and teens as DHA assists
in brain development and improving eyesight. Vitamin E is a powerful antioxidant and is
good for the skin and has anti-ageing properties. Omega 3 fatty acids cannot be produced by
the body and must be obtained from the diet. Organic Selenium is good for maintaining
overall health and preventing certain types of diseases and is more efficiently absorbed by the

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body than inorganic sources. Suguna Pro is enriched with protein and vitamins (Lutein and
Zeanxthinin). The high protein in Suguna Pro helps build and repair the cells in muscles and
other body tissues. Vitamin A is helpful for healthy skin and good vision. Additionally Lutein
an important pigment in Suguna pro prevents macular degeneration and cataract of eyes.
Calcium & Phosphorus helps in formation of bones and teeth. Suguna Shakti shares similar
nutrients as Suguna Pro and is of smaller size.
Suguna has enjoyed a strong business growth through its innovative business model
and unstinted efforts at giving high quality products and ensuring value for the customer. The
company is well positioned to service this ever growing demand for poultry products in India
and the world.

Product range

Quick bite with Suguna Home Bites, choicest of chicken portions with Suguna
Anytime, Value Added Eggs catering to the various needs of the health conscious consumer
and Suguna Daily Fresh, a chain of retail outlets that are pleasing in ambience, and are
hygienic and convenient for the contemporary consumer. Of course, there’s always your
favorite Suguna Chicken – Younger, Tender, Better.

Global Partners of Suguna

Suguna partnered with Ross of UK for importing broiler grandparent stock and
Lohmann of Germany for Layer grandparents. Suguna imports day old grandparent and
parent stock chicks from Ross, a subsidiary of Aviagen for broiler. Lohmann is today the
world's Number one Primary Breeding Company for Layers under the umbrella of Erich Wes
Johann Group of Companies headquartered in Cuxhaven, German.

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 CHAPTER -II
REVIEW OF LITERATURE

1.During the early nineties, the Council of Logistics Management started publishing
studies where reverse logistics was recognized as being relevant both for business and society
(Stock, 1992). Other studies followed stressing the opportunities on reuse and recycling
(Kopicki et al., 1993) In the late nineties, Kostecki (1998) discussed the marketing aspects of
reuse and extended product life. Stock (1998) reported in detail how to set up and to carry out
reverse logistics programs. Rogers and Tibben-Lembke (1999) presented a broad collection
of reverse logistics business practices, giving special attention to the US experience (see also
Lund, 2001). Recent reviews and literature compilation either on models to support reverse
logistics or on the business perspective can be found at Fleischmann et al., 1997, Guide et al.,
2000, Guide and van Wassenhove, 2003, and Dekker et al., 2003. Former studies have argued
that the processes, actors, types of reuse and actors are relevant to characterize reverse
logistics (Fleischmann et al., 1997). De Brito and Dekker (2002) provide typologies of the
what, whom and how of reverse logistics.

2. Recently, many articles dedicated to the analysis of the practice of reverse logistics
have appeared, including Canon (Meijer, 1998), Philip Morris (Andriesse, 1999), Kodak
(Toktay et al., 2000) and Nortel Networks (Linton and Johnson, 2000). Meyers (1999) writes
that in a survey of logistics managers, Rogers and Tibben-Lembke (1999) found that four in
ten logistics managers consider reverse logistics relatively unimportant compared to other
company issues. In terms of resource recovery, the most often described option was recycling
and re-use/redistribution (De Koster et al., 2001). Parker (1996) has consolidated the
proceedings of the First Annual International Congress on Reverse Logistics Management
held in 1996 that focused on the important contribution of accounting for environmental
issues. Epstein of Stanford University observed that ABC costing provided an opportunity to
minimize costs and increase profitability. Stinson of the University of Texas, Austin,
commented that environmental accounting spread across many accounting areas and
standards, including financial, managerial, regulatory, tax, and national accounts.

18
 3. In the area of disposition and environmental concerns, Amato (1999) gives
statistics on the amplitude of refuse in the United States. In 1997, more than 430 billion
lbs. of garbage was disposed. That is just the benign municipal solid waste. Each year
American industries emit, pump, and dump more than 2.5 billion lbs. of chemicals such as
lead compounds, chromium, ammonia, and organic solvents into the air, water, and ground.
Amato (1999) also mentions an interesting place in Denmark, that promulgates recycling and
resource sharing. This place is called an "eco-industrial park" that houses a power company, a
pharmaceuticals firm, a wallboard producer, and an oil refinery. All these companies share in
the production and use of steam, gas, and cooling water. The excess heat warms nearby
homes and agricultural greenhouses. One company's waste becomes another's resource. The
power plant sells the sulfur dioxide it scrubs from its smokestacks to the wallboard company,
which uses the compound as a raw material. Dozens of these eco-industrial parks are being
developed all over the world. Linton (1996) points that many of the current "take back"
programs for non-defective used products are recycling programs.

4. The impact of logistics management on CO emissions from freight transport by

2
Pålsson H
In order to secure sustainable development, a growing consensus among scientists
is that global warming should not exceed 2 degrees Celsius compared to the pre-industrial
revolution era. To reach this target, current emissions of greenhouse gases need to be
dramatically reduced. Unfortunately, the current trend for freight transport, particularly for
road transport, points in the opposite direction. The purpose of this paper is to make a syn-
thesis and an analysis of potential medium-term and long-term logistics solutions for Sweden
to meet the EU directive of 75-90% reduction of CO2 emissions from freight transport by
2050. A structured literature review of potential solutions presented in logistics management
literature and official reports is conducted. The review focuses on potential solutions based
on the interaction between logistics and freight transport. A synthesis of the literature
reviewed describes interactions between logistics and freight transport, as well as
configurations and concepts in logistics and their impact on CO2 emissions from freight
transport. The potential opportunities and challenges in logistics management to reduce CO2
emissions from freight transport are put forward and future research opportunities are singled
out. A practical implication of the research is that this paper clarifies the interactions between
logistics and freight transport. This clarification is a step towards understanding one potential

19
source of reducing CO2 emissions from freight transport and thus being able to alter the
unsustainable development of CO2 emissions from freight transport in Sweden. The synthesis
provided in the paper presents a starting point in addressing the 75-90% reduction target for
CO2 emissions from freight transport.

5.1994 Pohlen, TLLa Londe, BJ implementing activity-based costing (ABC) In Logistics

Activity-based costing (ABC) represents a relatively recent phenomenon within

logistics management practice. Many firms have explored ABC as a means to more
accurately trace overhead costs to specific products and customers. Initial ABC systems have
primarily focused on manufacturing, and only a limited number of leading-edge firms have
attempted to implement ABC for assigning logistics costs.

6.(1996) Dick A. van Damme, (Eindhoven University of Technology), Marinus J. Ploos

van Amstel, (Eindhoven University of Technology) Outsourcing Logistics Management
Activities  

Logistics management are steadily growing and account for an increasing

proportion of the gross national product. Logistics costs have become an important part of the
added value of products and logistics management is increasingly regarded as an important
weapon in the international competitive struggle, in particular by large market-oriented
companies. The emphasis in marketing strategies is shifting from product and price to
promotion and place. Rapidly changing customer demands have an increasing effect on
company policies.

7. In the year 2005 by GOURDIN Kent Global Logistics Management

Global Logistics Management the text has been thoroughly revised and updated,
and new examples have been added reflecting recent developments. Helps readers to
understand and appreciate the power of managing logistics for profit and competitive
advantage. Educates readers about the nature of individual logistics activities and how they
can be woven together. The focus throughout is global, and examples are drawn from various
parts of the world. The text has been thoroughly revised and updated throughout to keep it
current. Now includes new examples reflecting recent developments and current
preoccupations, including security and global.

20
8.(1991) John Gattorna, Abby Day, John Hargreaves  Effective Logistics Management  

The logistics mix are described in an effort to create an understanding of the

total logistics concept. Chapters include an introduction to logistics; the strategic role of
logistics, customer service levels, channel relationships, facilities location, transport,
inventory management, materials handling, interface with production, purchasing and
materials management, estimating demand, order processing, systems performance,
leadership and team building, business resource management.

9.1995-12 Daugherty, P Jermaine, R Droge, Predicting EDI Technology Adoption in

Logistics Management: The Influence of Context and Structure

 A survey of manufacturers was undertaken in order to better understand the influence

of select contextual and structural dimensions on one type of technology, electronic data
interchange (EDI). Logistic regression model results indicate a positive relationship between
EDI adoption and three predictor variables: firm size as reflected by the number of factories,
involvement in formal benchmarking, and centralization of the EDI an option decision.

10.1995) Huan Neng Chiu, (National Taiwan Institute of Technology, Taipei, Taiwan,
and Republic of China) the integrated logistics management system: a framework and
case study  

The exploration of each area is enriched with Taiwanese logistics management

practices and experiences. Includes a case study of one prominent food processor and retailer
in Taiwan in order to demonstrate the pragmatic operations of the integrated logistics
management system. Also, a survey of 45 Taiwanese retailers was conducted to investigate
the extent of logistics management in Taiwan. Concludes by suggesting how distribution
companies can overcome noticeable logistics management barriers, build store automation
systems, and follow the key steps to logistics success.

21
 CHAPTER-III

OBJECTIVES & RESEARCH METHODOLOGY

3.1 OBJECTIVES OF THE STUDY

o To study the outbound Logistics system in Suguna foods.

o To minimize investment in outbound logistics.
o To find out better outbound logistics scheduling and forwarding.

o To minimize the cost of logistics of outbound logistics.

3.2 SCOPE OF THE STUDY

This study is to understand the level of effectiveness of the outbound logistics

process in Suguna foods Ltd .This study is undertaken to provide solution to speed up the
delivery of Finished Products. In this study result is to bring forth performance standard for
the company improvement.

3.3 LIMITATIONS OF THE STUDY

1. Due to maximum road transportation vehicle it becomes order to estimate the cost.
2. As the movement of transportation is more aquarist data’s not collect.
3. The study is conducted for a limited period of one month the additional data not able to
fetch.
4. Multiple mode of transport (land as well as sea) involved to reduce the time factors.

22
 3.4 RESEARCH METHODOLOGY

RESEARCH

Systematic investigative process employed to increase or revise current

knowledge by discovering new facts. It is divided into two general categories:

(1)Basic research is inquiry aimed at increasing scientific knowledge and

(2) Applied research is effort aimed at using basic research for solving problems

or developing new process, products , or techniques.

According to Clifford Woody, Research comprises defining and redefining

problems, formulating hypothesis or suggested solutions, collecting, organizing and
evaluating data, making deductions and reaching conclusions and at last carefully testing the
conclusions to determine whether they fit the formulating hypothesis.

RESEARCH METHODOLOGY

The process used to collect information and data for the purpose of making

business decisions. The methodology may include public relations, interviews, surveys and
other research techniques, and could include both present and historical information.

Research methodology is a way to systematically solve the research problem.

The methodology employed for the study was mainly through primary data and secondary
data.

3.4.1 TYPE OF RESEARCH

Descriptive research

The study adopted descriptive research, which includes surveys and facts finding
enquiries of the different kinds. The major purpose of the descriptive research is the
description of the state of affairs as it’s exists at present. The main characteristics of the type
research are the researcher has no control over the variables. It can report what has happened
or what is happening.

23
Research instrument

The research instrument used in the study is the structured questionnaire. Structured
questionnaires are those in this there in which there predetermined questions relating to the
aspect, for which the research collects data. The questions are presented with expertly the
same contents and some order to all respondents

3.4.2 DATA COLLECTION

Data refers to information or facts. It includes numerical figures, non-numerical

figures, descriptive fact and qualitative information. The task of data collection begins after
research problem has been decided.

The nature of the data is both primary and secondary data.

(i) Primary data

The primary data are those that are collected through
questionnaire. The questionnaire was framed in such a manner to obtain
correct information, grade suitability for the study. All the questionnaires
were collected from the respondents.

(ii) Secondary data

Secondary data has been collected from the company websites,
company documents and magazines.

3.4.3 SAMPLING DESIGN

Sampling is a method of selecting a few items from a particular group to be obtaining

relevant data which help in drawing conclusions regarding the entire group population or
universe. Convenient sampling method is used for conducting the study. Under this sampling
design, every item of the universe has an equal chance of inclusion in the sample.

POPULATION – 250 employees.

SAMPLE SIZE – 50 employees

24
3.5 TOOLS FOR DATA COLLLECTION

3.5.1 QUESTIONNAIRE

A questionnaire is research instrument consisting of a series of questions and other

prompts for the purpose of gathering information from respondents. Although they are often
designed for statistical analysis of the response. In this research both open ended and close
ended questions were used.

3.5.2 STATISTICAL TOOLS

The tools used here are

 Percentage test
 Chi square test

PERCENTAGE ANALYSIS

One of the simplest methods of analysis is the percentage method. It is one of the
traditional statistical tools. Through the use of percentage, the data are reduced in the
standard form with the base equal to 100, which facilities comparison.

The formula used to compute Percentage Analysis is:

Number of respondents

Percentage of respondents =_____________________ X 100

Total number of respondents

25
CHI SQUARE ANALYSIS

It is a statistical measure used in the context of sampling analysis for comparing

a variance to a theoretical variance. It is often used to judge the significance at population
variance.
It was introduced by Karl Pearson in 1890.
The following formula was used in the testing of hypothesis.

O= Observed Frequency

E= Expected Frequency

The expected frequency can be calculated as follows:

E= Row Total*Column Total / Grand Total

26
 CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION

4.1 PERCENTAGE ANALYSIS

Table No: 4.1

Table showing the Age of the respondents

Number of
Age Percentage
respondents

Below 30 20 40

30-40 20 40

Above 40 10 20

Total 50 100

INFERANCE

From the table age of 20 percentage of the respondents are above 40.

Below 40 there are 80 percentage of the respondents.

27
 Chart No: 4.1

Chart showing the Age of the respondents

Age of the respondents

Below 30
30-40
Above 40
Total

28
 Table No: 4.2

Table showing the experience of the respondents

Number of
Experience Percentage
respondents

More than 5
25 50
years

5 years 15 30

Less than 5
10 20
years

Total 50 100

INFERANCE

50 percentage of the respondents having more than 5 years of experience in the

company. There 10 respondents having less than 5 years of experience.

Chart No: 4.2

29
Chart showing the Experience of the respondents

Experience of Respondents
More than 5 years 5 years Less than 5 years Total

25%

50%

15%

10%

Table No: 4.3

30
 Table showing the Shift of work of the respondents

Shift of Number of
Percentage
work respondents

Day 15 30

Night 15 30

Both 20 40

Total 50 100

INFERANCE

There are 15 respondents working at day shift only. But 40 percentage of

respondents working at both day shift and night shift.

Chart No: 4.3

31
 Chart showing the Shift of work of the respondents

Shift of work of respondents

120

100

80
Percentage
60

40

20

0
Day Night Both Total

Table No: 4.4

32
 Table showing the Type of product supplied by the respondents

Product Number of
Percentage
Supply respondents

Eggs 10 20

Hens 30 60

Packed
10 20
Chicken

Total 50 100

INFERANCE

Eggs were supplied by the 20 percentage of the respondents. Hens were supplied
by the 60 percentage of respondents. 10 respondents they supplied only packed chicken .

Chart No: 4.4

33
Chart showing the type of product supplied by the respondents

Product supplied
100
90
80
70
60 Percentage
50
40
30
20
10
0
Eggs Hens Packed Total
Chicken

Table No: 4.5

34
 Table showing the delay on delivery of the respondents

Delay on
Number of respondents Percentage
Delivery

Yes 25 50

No 25 50

Total 50 100

INFERANCE

There are same percentage of respondents had a experience in delay on delivery of

products.

35
 Chart No: 4.5

Chart showing the Delay on Delivery of the respondents

Delay on Delivery
120

100

80

Percentage
60

40

20

0
Yes No Total

36
 Table No: 4.6

Table showing Reason for delay on delivery of the respondents

Reason for
Number of respondents Percentage
Delay

Due to traffic 30 60

Mechanical
20 40
problems

Total 50 100

INFERANCE

All the respondents did not had delay on delivery. But 20 respondents said
mechanical problem of vehicle was the reason for delay. Due to traffic the delay of goods
takes place said by the 60 percentage of respondents.

37
 Chart No: 4.6

Chart showing the Reason for Delay on delivery of the respondents

Reason for Delay

100
90
80
70
60 Percentage

50
40
30
20
10
0
Due to traffic Mechanical problems Total

38
 Table No: 4.7

Table showing the same quantity of goods supplied by the respondents

Same
quantity of Number of respondents Percentage
goods supply

Yes 30 60

No 20 40

Total 50 100

INFERANCE

60 percentage of respondents deliver the same quantity of goods and the time
of delivering.

39
 Chart No: 4.7

Chart showing the same quantity of goods supplied by the respondents

Same quantity of goods Supplied

Yes No Total
30%

50%

20%

40
 Table No: 4.8

Table showing the Risk Faced of the respondents

Risk Factors Number of respondents Percentage

Yes 10 20

No 40 80

Total 50 100

INFERANCE

There are no other risk factors said by 20 percentage of the respondents.

41
 Chart No: 4.8

Chart showing the Risk Faced of the respondents

Risk Factors

100
90
80
70
Percentage
60
50
40
30
20
10
0
Yes No Total

42
 Table No: 4.9

Table showing the Retailers per day face by the respondents

Retailers per
Number of respondents Percentage
day

70-100 5 10

50-70 15 30

Less than 50 30 60

Total 50 100

INFERANCE

10 percentage of the respondents face the 70-100 number of retailers. Less than
50 retailers met by the 60 percentage of the respondents.

43
 Chart No: 4.9

Chart showing the Retailers per day face by the respondents

Retailers per day

120

100

80
Percentage
60

40

20

0
70-100 50-70 Less than 50 Total

4.2 CHI - SQUARE TEST

44
 TABLE NO: 4.2.1

TABLE SHOWING THE RELATIONSHIP BETWEEN THE

EXPERIENCE OF RESPONDENTS AND NO.OF RETAILERS
FACED BY THEM PER DAY

No.of retailers
70-100 50-70 Less than Total
Experience 50

More than 5 3 12 10 25
years

5 years 2 1 12 15

Less than 5 0 2 8 10
years

Total 5 15 30 50

NULL HYPOTHESIS (HO):

There is no significant relationship between the experience of respondents and no.of
retailers faced by them per day.

ALTERNATIVE HYPOTHESIS (H1):

There is a significant relationship between the experience of respondents and no.of
retailers faced by them per day.

Observed (O) Expected (E) (O-E) (O-E)2 (O-E)2/E

45
 3 2 1 1 0.5
12 8 4 16 2
10 15 -5 25 1.67
2 2 0 0 0
1 4 -3 9 2.25
12 9 3 9 1
0 1 -1 1 1
2 3 -1 1 0.33
8 6 2 4 0.67
Calculated Value (X2) 9.42

CHI-SQUARE:

X2 = ∑ (O – E) 2 / E

Calculated X2 value = 9.42

Degree of freedom = 4

Table value @ 5% level of significance = 9.488

INFERENCE:
From the analysis of chi-square test it is found that calculated value is less than the
table value at 5% level of significance. So, Null hypothesis (H0) is accepted.

From the above table it is inferred that there is no significant relationship between the
experience of respondents and No.of retailers faced by them per day.

TABLE NO: 4.2.2

TABLE SHOWING THE RELATIONSHIP BETWEEN THE AGE OF

RESPONDENTS AND DELAY OF GOODS

46
 Age of Drivers
Below 30 30-40 Above 40 Total
Delay of
goods Delivery

Yes 12 7 6 25

No 8 13 4 25

Total 20 20 10 50

NULL HYPOTHESIS (HO):

There is no significant relationship between the age of respondents and delay of
goods.

ALTERNATIVE HYPOTHESIS (H1):

There is a significant relationship between the age of respondents and delay of goods.

Observed (O) Expected (E) (O-E) (O-E)2 (O-E)2/E

12 10 2 4 0.4
7 10 -3 9 0.9
6 5 1 1 0.2
8 10 -2 4 0.4

47
 13 10 3 9 0.9
4 5 -1 1 0.2
Calculated Value (X2) 3

CHI-SQUARE:

X2 = ∑ (O – E) 2 / E

Calculated X2 value = 3

Degree of freedom = 2

Table value @ 5% level of significance = 5.991

INFERENCE:
From the analysis of chi-square test it is found that calculated value is less than the
table value at 5% level of significance. So, Null hypothesis (H0) is accepted.

From the above table it is inferred that there no significant relationship between the
age of respondents and delay of goods.

CHAPTER-V

FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 FINDINGS

48
 From the table age of 20 percentage of the respondents are above 40.

 Below 40 there are 80 percentage of the respondents.

 50 percentage of the respondents having more than 5 years of experience in the

company. There 10 respondents having less than 5 years of experience.

 There are 15 respondents working at day shift only. But 40 percentage of respondents
working at both day shift and night shift.

 Eggs were supplied by the 20 percentage of the respondents. Hens were supplied by
the 60 percentage of respondents. 10 respondents they supplied only packed chicken .

 There are same percentage of respondents had a experience in delay on delivery of

products.

 All the respondents did not had delay on delivery. But 20 respondents said mechanical
problem of vehicle was the reason for delay. Due to traffic the delay of goods takes
place said by the 60 percentage of respondents.

 60 percentage of respondents deliver the same quantity of goods and the time of
delivering.

 There are no other risk factors said by 20 percentage of the respondents.

 10 percentage of the respondents face the 70-100 number of retailers. Less than 50
retailers met by the 60 percentage of the respondents.

 From the above table it is inferred that there is no significant relationship between the
experience of respondents and No.of retailers faced by them per day.

49
 From the above table it is inferred that there no significant relationship between the
age of respondents and delay of goods.

 They supply more quantity of hens in Domestic market only.

 The company using road way mode of transportation for outbound activity .

 The prefer road transport because it is easy to reach the customers in time.

 Eicher type of vehicles is used for distribution.

 The company delivers more than 20 deliveries per day. It may vary in weekends.

5.2 SUGGESTIONS

 Packed Chicken Supply can be increased in order to improve the export.

50
 Mechanical problem was one of the reasons for delay of delivery. So the mechanical
problems can be checked and solved before the distribution.

 Some of the respondents are facing risk factors at the time of delivery. So, the
company should find and solution the risk factors in distribution.

 The company can give more opportunities to the experienced drivers in order to
reduce the problems like accidents, damage of goods, etc.

5.3 CONCLUSION

51
 Outbound logistics process of the company was good. So, the company should
maintain the same process.

 Domestic market supply is greater than the international market supply in the
company. The company can concentrate and improve the supply of International
market.

 Cost of Outbound logistics is average. So, it can be maintain at the same level.

52