Interniship Report

7/27/2019 Interniship Report

1/52

Daffodil International University

Internship ReportOn

Inventory Control System Of Quality FeedsLimited

Prepared By

S.M.Hosne ZamanID: 072-11-1840

Department of Business AdministrationFaculty of Business & Economics


- 1 -


2/52

Inventory Control System Of Quality FeedsLimited"

Submitted To

Mr. Shibli ShahriarAssistant Professor

Department of Business AdministrationFaculty of Business & EconomicsDaffodil International University

Submitted ByS.M.Hosne Zaman

ID: 072-11-1840

Department of Business AdministrationFaculty of Business & Economics


Date of SubmissionSeptember , 2012

Daffodil International University102, Sukrabad, Mirpur Road, Dhanmondi,

Dhaka 1207

- 2 -


3/52

LETTER OF TRANSMITTAL

February , 2012

Md. Shibli Shahriar Assistant Professor Faculty of Business & EconomicsDaffodil International UniversityDhaka.

Subject: Submission of Internship Report

Dear Sir,

It is indeed a great pleasure to have the opportunity to submit the report of my Internship. I have prepared this report in accordance with the instruction given by your highness. The topic of myInternship is Inventory Control System of Quality Feeds Limited (QFL)

This report is trying to describe my observations, learning and recommendations based onexperience during the internship period in the organization. I have made sincere efforts toconduct this study in reviewing related materials, and examining relevant records for preparationof this report.

I am glad to have this opportunity to conduct this type of practical study, which provided me

learning opportunity and compare theoretical knowledge with practical situation and standard.

I hope you will be kind enough to accept my report and bless me.

Yours truly,

______________

S. M. Hosne ZamanID # 072-11-1840

Sec: B, Batch: 17thBachelor Of Business And AdministrationDaffodil International University

- 3 -


4/52

DISCLAIMER

I S.M. Hosne Zaman, am hereby declare that the presented report of internship

titled Inventory Control System of Quality Feeds Limited is uniquely prepared by me

after completion of three months work in Quality Feeds Limited.

I also confirm that, the report prepared only for my academic requirement not for

any other purpose. It might not be used with the interest of opposite party of the

organization.

S.M. Hosne ZamanBBA, ProgramDepartment of Business AdministrationFaculty of Business & EconomicsDaffodil International University

- 4 -


5/52

Certificate of Approval

I am pleased to certify that the Internship report on Inventory Control System of Quality Feeds

Limited conducting by S.M. Hosne Zaman is bearing ID No: 072-11-1840 of the

Department of Business Administration has been approved for presentation and defiance/viva-voce. Under my supervision Mr S.M. Hosne Zaman worked with QFL as an intern. He

completed the work during the spring, 2011 semester.

Mr. S.M. Hosne Zaman bears a strong moral character and a very pleasing personality. It hasindeed been a great pleasure working with him. I wish him all success in life.

Supervisor

Md. Shibli Shahriar

Assistant Professor

Department of Business Administration

Faculty of Business & Economics


- 5 -


6/52

ACKNOWLEDGEMENT

By the grace of the Almighty, I would like to say that the submission of the study report titled

Inventory Control System of Quality Feeds Limited (QFL) is a delighting moment for me.

Completion of this report has made me grateful to a number of persons. First, I must express my

gratitude to my Sir, Md. Shibli Shahriar,Assistant Professor Faculty of Business and Economics.

I am indebted for his valuable instructions and suggestions on every aspect of this useful

assignment. It is my honest confession that without his valuable guidance and suggestions, it

would never have been possible to complete this study successfully. I would be always grateful

to him.

I am deeply grateful to the respected Chairman, Vice Chairman and the Managing Director tokindly provide me the chance to undergo Internship in their esteemed organization.

I am also grateful to all the employees of QFL, specially to to Mr. Tarequr Rahman

Administrtive Manager of QFL & Mr.Subrata Kumar Khaskel Officer of Credit control

department, who provided valuable necessary information about the organization and who was

very much cooperative during of my internship period.

- 6 -


7/52

Executive Summary

The report has been prepared by me as a requirement of the Internship program for BBA

(Finance) study. I have prepared my report with special emphasis on Inventory Control

System of Quality Feeds Limited (QFL), a well-known Poultry Feed Manufacturing Company

in Bangladesh.

Quality feeds Limited was incorporated as a private limited company on 4 December

1995. The company was established mainly to carry out business of manufacturing and

marketing of poultry feed, fish feeds and all kinds of feeds and meals for consumption byfish and animals. The company was incorporated with an authorized capital of Tk 60

million (599,000 ordinary shares of Tk 100 each and 1,000 preference shares of Tk 100

each). Issued subscribed and paid up share capital of the company at 30 June 2004 was

Tk 13,638,000.

Managing Director and three other Directors manage the company under the overall

guidance of the Chairman. The Company has monthly reporting system to the Board of

Directors on purchase, production, sales and financial assets (i.e, cash and bank balances).

QFL is currently enjoying 30% of the market share. Sales are made mainly in cash

Raw materials are procured locally as well as imported from India, China, Canada and

Australia. Some of the items like rice polish, wheat bran, atta etc are purchased locally.

Methods of production are very much scientific.

Compared with other companies in poultry industry Bangladesh, QFL is more efficient, better organized and continuously progressing to lead the market in and outside the

country.

- 7 -


8/52

Table Of Contents

INTERNSHIP REPORT...............................................................................................................1

ON....................................................................................................................................................1

Prepared By.............................................................................................................................1Submitted By............................................................................................................................2

1.0 INTRODUCTION..................................................................................................................11

1.1R ATIONALE OF THE STUDY ...........................................................................................111.2 O BJECTIVES OF THE STUDY .......................................................................................12

1.3 M ETHODOLOGY ............................................................................................................12

1.3.1 Data Type ....................................................................................................................121.3.2 Data Collection............................................................................................................131.3.3 Sources of Primary Data .............................................................................................131.3.4 Sources of Secondary Data .........................................................................................13

1.4 L IMITATIONS OF THE STUDY : .....................................................................................13

2.0 DESCRIPTION OF THE COMPANY ...............................................................................14

2.1 B ACKGROUND OF THE COMPANY : ..............................................................................14

2.2 S TRUCTURE OF THE C OMPANY :..................................................................................14

2.2.1 Financing.....................................................................................................................142.2.2 Management................................................................................................................142.2.3 Markets........................................................................................................................152.2.4 Management information.............................................................................................152.2.5 Employee arrangements...............................................................................................152.2.6 Hierarchical Position of QFL......................................................................................15

2.3 C OMPONENTS OF THE BUSINESS ..................................................................................15

2.3.1 Raw Materials..............................................................................................................152.3.2 Products........................................................................................................................16 2.3.3 Sources of supply.........................................................................................................16

2.4C OMPETITION ................................................................................................................16

2.4.1 Major Poultry Feed Manufacturing Company in Bangladesh:..................................16 2.5 D ISTRIBUTION CHANNEL ..............................................................................................17

2.6 F ACTORY TECHNOLOGY ..............................................................................................18

- 8 -


9/52

2.6.1 Machineries :................................................................................................................182.6.2Brief Description feed Machines...................................................................................182.6.3 Power Consumption ...................................................................................................21

2.7 T OTAL Q UALITY M ANAGEMENT (TQM) P ROCESS OF FEED PRODUCTION :............21

2.8 S ALES OPERATION P ROCEDURE OF QFL :..................................................................30

2.8.1 Procedures of Credit sales to dealers through depots.................................................302.8.2 Procedures of Retail sales............................................................................................312.8.3 Procedures of Export sales...........................................................................................32

2.9 O RGANIZATION S SALES POINT :..................................................................................32

2.9.1 When order is received by Head Office :.....................................................................322.9.2 When sales center is Gazipur Plant, Bogra Plant or Depot :......................................33

3.0 ANALYSIS OF INVENTORY CONTROL MANAGEMENT ........................................33

3.1 P LANNING :....................................................................................................................33

3.2 F UNCTIONS AND PROCEDURES OF STORES DEPARTMENT .........................................34

3.2.1 Introduction..................................................................................................................343.2.2 Functions of Stores Department...................................................................................343.2.3 Receiving and Inspection of Inventories.......................................................................353.2.4 Procedures for Raw Materials and Stores Requisition/Issue/Consumption................36 3.2.5 Gate Pass System .........................................................................................................37

3.3 S TORES INVENTORY AND R ECONCILIATION ...............................................................37

3.3.1 Physical Verification of Stores....................................................................................37 3.3.2 Treatment of Discrepancies .........................................................................................38

3.4 P URPOSE OF INVENTORY C ONTROL IN QFL:.............................................................38

3.5 S TOCK L EVELS AND O RDER P OINT OF QFL :............................................................393.5.1 Procedures of Local purchase......................................................................................413.5.2 Procedures of Foreign purchase .................................................................................42

3.6 M ANUAL SYSTEMS OF DEPOT FOR INVENTORY CONTROL :.......................................43

3.7 V ALUATION OF INVENTORIES ......................................................................................45

4.0 MARKET AND INDUSTRY ANALYSIS ..........................................................................46

4.1 M ARKET ANALYSIS .....................................................................................................46

4.2 I NDUSTRY ANALYSIS .....................................................................................................46

FINDINGS:...................................................................................................................................47

FINDINGS:...................................................................................................................................49

REFERENCES:...........................................................................................................................51

APPENDIX...................................................................................................................................52

- 9 -


10/52

- 10 -


11/52

Quality Feeds Limited

1.0 INTRODUCTION

Poultry Industry plays a vital role in Bangladesh and involves significant portion of rural

people. In Bangladesh BRAC developed a Rural Poultry Model in 1983.In early nineties

-Government declared poultry as a thrust sector and classified as an agro based industry.

Government has liberalized its policies by introducing easier loan procedure, lower interest

rate, tax holiday etc. A good number of Poultry Feed Manufacturing Industries have been

established in 1990 with financial Bank support.

Quality Feeds Limited (QFL) has been incorporated in Bangladesh on 4 December 1995 as a private limited company for the purpose of carrying out business of manufacturing poultry

feeds and fish feeds.

1.1 Rationale of the Study

At the beginning of the twenty-first century, Bangladesh has a population of more than 140

Million people. The purchasing power of the middle class is growing and food habits are also

changing. The Bangladesh economy is growing at the rate of 5 to 8 percent per annum. The

livestock industry in Bangladesh is the second largest contributor to gross domestic product

(GDP), after agriculture, and accounts for 9 percent of the total.

In view of the expected rise in per capita consumption of chicken meat, eggs and fish,

livestock production and productivity will grow. The poultry industry is developing towards

vertical integration and a few multinational companies have already entered in the

Bangladesh poultry business. In this context the study about Poultry Feed Industry has a

great importance. This report will help to understand the current market position and futureof poultry feed industry.

This report will also help how Quality Feeds Limited operates their business with efficiency

since last 15 years, and this study will also provide various guidelines to this sector.

- 11 -


12/52

1.2 Objectives of the Study

General Objective:

The general objective of the report is to introduce the Quality Feeds Limited and defining thestrategies how the company take steps to avoid competitive failure and sustain competitive

advantage over time

Specific Objectives:

The specific objectives of the report are:

Give an overview and information of the QFL.

Studying how the company control inventory and manage total quality of the product.

Analyze the existing and potential markets of the product of the company.

Studying how the companys management process operates its business efficiently.

Find out the strength, weaknesses, opportunities and threats of the company.

Conduct a comparative market analysis.

Highlight the Inventory Control Management and Management process of QFL.

Find out the problems related to the company and the market and provide

recommendations.

1.3 Methodology

Information and Data related to QFL was collected from the head office, Uttara and Factory,

Gazipur. Data includes the financial reports, information related to the functions of different

departments.

1.3.1 Data Type

Both the primary and secondary data of QFL were collected for the research.

- 12 -


13/52


14/52

Some of the information were written only on the observation, because the in depthinformation was confidential to the outsiders, also to interns.

2.0 DESCRIPTION OF THE COMPANY

2.1 Background of the company:

Quality feeds Limited was incorporated as a private limited company on 4 December 1995. The

company was established mainly to carry out business of manufacturing and marketing of

poultry feed, fish feeds and all kinds of feeds and meals for consumption by fish and animals.

For the purpose of the business, the company established its factory on 2.09 acres of land located

at Bagheer Bazar, Gazipur. The company has acquired further 9 decimals of lands at the same

place during the years 2000-2001 and 2001-2002 for expansion of its business.

The Company has also acquired 5.19 acres of land at Jamunna, Bogra during the year 2003-2004for Bogra unit, which has gone into commercial production from October 2004.

2.2 Structure of the Company:

The company was incorporated with an authorized capital of Tk 60 million (599,000 ordinary

shares of Tk 100 each and 1,000 preference shares of Tk 100 each). Issued subscribed and paid

up share capital of the company at 30 June 2004 was Tk 13,638,000

2.2.1 Financing

The companys working capital is being met usually by local sales and by secured loans andoverdrafts from bank.

The loans and overdrafts are secured by-

Directors personal guarantee

Stock of the co.

Fixed and floating assets of the company

2.2.2 Management

One experienced MD and three other Directors manage the company. Although there is a

Hierarchical structural position in the organization but most of the time democratic managerial

decision makes the management process more democratic.

- 14 -


15/52

2.2.3 Markets

QFL manufactures poultry and fish feeds, which is sold by the distributors and stockiest

throughout the country. The company has well developed market in the field of poultry and fish

feeds. They are currently enjoying 30% market share.

Raw materials:

2.2.4 Management information

The company has monthly reporting system to report financial information to the Board of

Directors. BOD takes necessary action on this basis.

2.2.5 Employee arrangements

There are 40 employees in head office, 20 employees in Bogra office and 150 employees in

factory. Besides the employees, there are 04 directors in the Head office. Also there are casual

workers in the factory. The number of casual workers varies from 300 to 350 time to time.

2.2.6 Hierarchical Position of QFL

Although the organization seems to be a tall line of supervision but there is a close interaction

between top-level management and lower level management. Chairman is at the top of the

position of the organization and according to power, responsibilities, functionality etc

hierarchical position goes downward (Appendix- A/1).

2.3 Components of the business

2.3.1 Raw Materials

More than 70 types of raw materials use in QFL, (Appendix-A/2) :

- 15 -


16/52


17/52

01. Quality Feed LimitedH#14, R# 7, Sector# 4Uttara, Dhaka-1230

Quality Feed

02. Aftab Bahumukhi Farms Limited

Islam Chamber, 125/A, MotijheelC/A(8 th floor), Dhaka-1000

Aftab Poultry Feed &

Aftab Fish Feed

03. BRAC Poultry Project75, Mohakhali C/A, Dhaka-1212

Surma Feed

04. Kazi Farms LtdH# 84/B, R# 7/A, Satmosjid Road, Dhanmondi,Dhaka-1207

Kazi

05. Nourish Poultry & Hatchery LtdH# 405, R# 27(Old), 16 (New)

Dhanmondi R/A,Dhaka-1209

Nourish Poultry Feed

06. Paragon Pourty LtdParagon House( Sports Zone Building)5, Mohakhali C/A, (7 th floor),Dhaka-1212

Paragon Feed

07. National Feed Mills Ltd.H#102, R#03, Block-F, Banani,Dhaka-1213

National Feed

08. Proshika Integrated Agriculture Farm1/1/Ga, Section-2, Mirpur Dhaka-1216

Proshika Feed

09. C.P. Bangladesh Company Ltd.H# 9, R# 4, Sector-1Uttara,Dhaka-1230

Hi-Pro-Vite PoultryFeed, Hi-Grow

10. Pocha Poultry & Feed Mill40 Moulbi Bazar,

Dhaka-1000

Pocha Poultry Feed

2.5 Distribution channel

The company has a strong marketing channel through which sales are made all over the country

to the customers. Most of the sales are made on payment basis.

- 17 -

QFL Factory

Gazipur Warehouse Bogra Warehouse

District Distributor

Retailers Retailers

District Distributor

Customers


18/52

2.6 Factory technology

2.6.1 Machineries :

The following machineries are required for a complete poultry feed plant

GRINDMIX H series

Half sieve hammer mills/ Full sieve hammer mills

Ribbon Blender

Screw conveyors

Belt conveyors

Pellet mills

Pellet coolers

Pellet crumbles

Hammer mill

Maize Grinding Plant

2.6.2 Brief Description feed Machines

- 18 -


19/52

a) Grind mix H series

H- Series is a batch type machine in which grinding & mixing is performed

simultaneously. Mixer is of paddle type which ensures 100 % mixing. Strong & rigid steel

construction.

b) Full Sieve / Half Sieve Hammer Mills

Hammer mills are used for grinding almost all types of free flowing materials. Hammer mills

operate on the principle that most of materials will grind or crush upon the impact of swinging

hammers.

c) Pellet Mill

Palletizing is a process to compact finely pulverized material into firm mass of a required shape

and size by extruding it through a metallic ring die. Finely ground material is fed into the Pellet

Mill through a feeder and then pressed into a rotating ring die with the help of two press rolls

free to rotate on their respective shafts. The resulting pressure compresses the material and

extrudes it through the holes in the die.

d) Ribbon Blenders

Ribbon Blender is a very fast and 100% efficient mixer to blend practically any dry powders,

from food products to chemicals. Even liquids in small amount can be mixed in a very efficient

way.

e) Pellet Crumbler

- 19 -


20/52

It is used for crumbling long and broader pellets into required smaller size. Crumbler feed is

required to feed poultry birds in chick stage, as they cannot eat the bigger pellets.

It consists of a set of two rollers rotating in opposing directions. One roller is fixed while the

other one can be adjusted.

f) Pellet Cooler

The Pellet cooler is used to reduce the temperature of hot pellets from pellet mill to ambient

temperature. If hot and moist pellets are not cooled, they may brake in to powder again.

The cooler works on the principal of blowing air through columns of hot & moist pellets, which

results in evaporation of moisture from the pellets. For moisture evaporation, heat is taken from

the pellets leading to cooling of pellets.

G) Screw Conveyor

Screw conveyors are used to convey material from one place to another place by means rotating

screw type auger. Material can be carried either horizontally or vertically or at required angle.

h) Maize Grinding Plant

- 20 -


21/52

These plants are used for manufacturing maize powder These plants can be also used for

grinding any type of cereals. In these type of plant raw material is feed to grinder or hammer

manually. The ground material is sucked by the blower which is conveyed to the cyclone

pneumatically. Cyclone separates material from air. Material can be bagged through feeder.

2.6.3 Power Consumption

For production of feeds Gazipur Plant needs 450 Kv power and it has full backup by Generator if power failure

2.7 Total Quality Management (TQM) Process of feed production:

Two types of finished feed produce in the Factory

1) Cereals or finished feed in mash form

2) Finished feed in pellet form.

Every poultry product has quality requirements limit, which has indicated at BSTI standards. The

range of quality requirements limit for both Mash and Pletted form are given below :

- 21 -


22/52

BSTI standards, poultry feed requirements

Characteristic Broiler starter feed

Broiler finisher feed

Chick feed Growingchicken feed

Layingchickenfeed

Breeder layer feed

Moisture (maximum%)

11 11 11 11 11 11

Crude protein (N x6.25) (maximum %)

23 20 20 16 18 18

Crude fibre(maximum %)

6 6 7 8 8 8

Acid-insoluble ash(maximum %)

3.0 3.0 4.0 4.0 4.0 4.0

Salt (as NaCl)(maximum %)

0.6 0.6 0.6 0.6 0.6 0.6

Source: Poultry feeds Directory 2004-05.

In order to maintain above mention limit range the QFL maintaining Quality Pressure Pointsin the factory. Once quality personnel, machines and procedures have been established, control

can best be maintained by applying effort at the quality pressure points in the mill. These

pressure points are:

i) Ingredient inventories.

Inventory programs provide manufacturers with a means of checking to see that the correct

amount of ingredient has been used in a given time period, It has been pointed out that good

ingredient inventory systems meet the following criteria:

They are simple and understood by all;

They include physical inventories;

They are accurate;

- 22 -


23/52

They consider history and forecasts;

They are used;

ii) Bin cleaning.

If bins are not periodically cleaned, ingredients or feeds can build up on the sides, encouraging

mold growth and cross contamination. Thus, finished feed and ingredients storage bins are

inspected at least once each month and cleaned as needed. Consequently, prior to entering any

bin for cleaning the following precautions are taken:

Verify that the bin is suitable for entry (e.g., is it too hot? Are there detectable chemical

fumes?)

Verify that the lock out program has been activated and notify other operators that are

entering the bin

Be certain that a responsible, trained individual will remain with the person for the

duration of his/her stay in the bin

Verify that lighting, hoisting, safety and respiration equipment functions properly, and

Verify that first aid equipment is well supplied and ready for use

During cleaning, a minimum amount of water is applied to bins, since excess moisture can

require time to evaporate, possibly encouraging mold growth and corrosion of metal bins.

iii) Verification of equipment cleanliness and condition:

While maintenance procedures are ensure that equipment is periodically examined, certain

critical points and equipment pieces are examined more frequently. Discharge gates and elevator boots are cleaned and inspected for wear or leakage once each week. Elevator head pulleys are

checked for correct alignment, heat and wear once each shift. Turnheads are also examined for

correct position and wear on a weekly basis. Scalpers or ingredient cleaning equipment are

checked once each week

- 23 -


24/52

iv) Grinding:

If the hammermill and/or other grinding equipment does not operate correctly, then mixing,

pelleting and animal performance may suffer. Thus, hammer condition and wear are checked

daily. Magnets are cleaned and checked for correct operation daily or at the shift change. Grind

consistency are checked once each shift using a U.S. # 8 sieve.

v) Batch system validation:

While there is considerable opposition to the Food & Drug Administrations proposal to legallyrequire batching and mixer validation, batch system validation can provide feed manufacturers

with information that may not be attainable in any other way. Batch system validation is done on

a semi-annual basis. If weight differences are more than 1%, begin by checking the following in

the batching system

Batch and micro-scale accuracy;

Conveyor integrity (Is there a leak?);

Bin integrity (Is there a hole in the bin wall);

Turnhead position and maintenance (Does some feed get diverted to another bin?), and

Mixer and batch scale slide gate operation (Does one batch leak into another?).

vi) Mixing:

Mixing is probably the most critical step within any feed manufacturing situation. The

attributed mixing inefficiency to

Insufficient mix time

Operation of mixers beyond designed capacity, and

Worn altered or broken mixing equipment

While equipment manufacturers have made great strides in providing their customers with

durable mixers that rapidly and efficiently mix feeds, it is obvious from these data that many

- 24 -


25/52


26/52

n many situations, feeds are used rapidly following manufacture and animals consume the feeds

before any assays can be performed. However, finished-feed assays are necessary and important

because they provide the mill with a final report card.

2.7.1 Sales Operations Maintained:

Quality Feeds Limited (QFL) Maintained his sales center by the zone wise and depot wise. QFLdivide all over Bangladesh by 6 zone and each zone have few Depot. The Six zone are :

Burigonga Zone: Norsingdi DepotBrahmaputra Zone: Trishal Depot

Shombugonj Depot Ghatail Depot Kalihati Depot Modhupor Depot

Karnophuli Zone: Lalmai Depot Chaktai Depot Chandina Depot Chittagong Depot

Rupsha Zone: Jessore Depot Takerhat Depot Barishal Depot Khulna Depot Faridpur Depot

Jamuna Zone: Rangpur Depot Pabna Depot

Jhenaidah Depot Rajshahi Depot

Surma Zone: B.Baria Depot

2.7.2 Closing Balance Of all depots on August 2011:

BURIGONGA ZONE:

Sl No.

Depot Name

Broiler (Taka)

Layer (Taka)

Fish(Taka)

Shrimp(Taka)

Total

- 26 -


27/52

1. Norsingdi 2026935 1958968 2228318 6214221

BRAMHAPUTRA ZONE:

Sl

No.

Depot Name Broiler

(Taka)

Layer

(Taka)

Fish

(Taka)

Shrimp

(Taka)

Total

(Taka)1 Trishal 49765 15226318 15276083

2. Shombugonj 1172964 162194 2423841 3758999

3. Ghatail 656429 1100009 1756438

4. Kalihati 238742 150250 388992

KARNOPHULI ZONE :

Sl No.

Depot Name Broiler (Taka)

Layer (Taka)

Fish(Taka)

Shrimp(Taka)

Total(Taka)

1. Lalmai 2070313 554669 6303402 8928384

2. Chaktai 2623683 1413666 597793 4635142

3. Chandina 2970066 1229639 4567831 8767536

4. Chittagong 2324630 730480 321421 3376261

RUPSHA ZONE:

Sl Depot Name Broiler Layer Fish Shrimp Total

- 27 -


28/52

No. (Taka) (Taka) (Taka) (Taka) (Taka)

1. Jessore 484796 290290 1888727 3098610 5762423

2. Takerhat 813628 318317 40010 1300180 2472135

3. Barishal 887604 1072444 199498 2159546

4. Khulna 982169 922972 741569 5402229 8048939

5. Faridpur 608489 691280 1299769

JAMUNA ZONE:

Sl No.

Depot Name Broiler (Taka)

Layer (Taka)

Fish(Taka)

Shrimp(Taka)

Total(Taka)

1. Rangpur 2269506 4409344 40 6678890

2. Pabna 1476565 789841 1196935 2000 3465341

3. Jhenaidah 2593625 1471676 1270811 5336112

4. Rajshahi 161416 1691904 659840 2513160

SURMA ZONE:

Sl No.

Depot Name

Broiler (Taka)

Layer (Taka)

Fish(Taka)

Shrimp(Taka)

Total

1. B. Baria 702758 1141231 1777878 3621867

- 28 -


29/52

Quality Manager Ask the lab to recheck the assay and continue to examine the problem

How was the sample taken? Was the sample representative? You may want to resample it

if the material is still available.

Is only one nutrient level out of control or are several? This could be clue as to whether a

certain ingredient was left out of the formula.

Was the regular crew operating the mill when the feed was produced.

Check inventory records for any discrepancies between the actual and predicted

inventory records.

Check the scales and metering devices for correct adjustment.

Check ingredient and finished-feed bins at the feed mill for hang-ups or bridging

problems.

Recheck the mixing time to be certain it is correct for the ration involved.

Check the ingredient assay values to see if they indicate a deficient load was received. If

a deficient load was received, contact you ingredient supplier immediately.

Check the formula matrix to be certain that ingredient assay values are correct and reflect

the values presently being received.

- 29 -


30/52

After going through these 10 steps, it is possible that the organization may still not know what

caused the problem. Laboratory personnel, the mill crew, the office staff, the nutritionist and

several other persons have all become aware of the companys dedication to the production of

high-quality feeds. If problems are consistently addressed as they occur. QFL always try to

follow all these steps to maintain the Total Quality of the management as well as the product.

2.8 Sales operation Procedure of QFL :

As per instruction of Internal Audit Manager this report contain the sales procedure at a gleans.

For preparing the report the whole sales procedure from clients order to delivery is considered.

Details of sales procedures are describe in Appendix A/6

2.8.1 Procedures of Credit sales to dealers through depots

Process ControlsDeliverymen from depots collect purchase orders from dealers

under the depot. Dealers can directly make order after observing

materials

Order confirmation

Depot managers checks orders and compares the available credit

limit and repayment status, if anyPrepares supply invoices and supplies goods in case of regular

repayments and the outstanding is within credit limit and records

sale in dealers subsidiary

Depot manager signs invoices

and submits one copy to

wholesale departmentPrepares credit position summary of the dealers if credit limit

exceeds or agreed repayments are not made and forwards the

summary to wholesale manager for decisionWholesale manager places summary statement of depots in

weekly credit review with MD

Wholesale manager and MD

sign the summary statementWholesale manager issues instruction on the non-performing

dealers revising the summary indicating delivery to be stopped

or to be made on increase of credit limit or rescheduling of

MD approve the instruction

issued by wholesale manager

- 30 -


31/52

repayment based on credit review with MDDepot manager accordingly either supplies goods raising supply

invoices or ceases supply and updates the dealer subsidiary

Depot manager signs invoices

and submits one copy to

wholesale department

Accounts department receives from respective depot fortnightlystock and cash accounting statement and books the sales and

collections in the system

Sales officer checks thefortnightly statement and

prepares booking summary

2.8.2 Procedures of Retail sales

Process ControlsStores stock position analyses by merchandising

dept. and provides requirement for supply of goods

to RIMS (Retail Integrated Merchandising System)

Supply requirement reviews by

Merchandising Manager in respect of

categories of stores jointly with retail

marketing departmentRIMS prepare invoices as per supply requirement

and send to CDC (Central Distribution Centre) for

supply

Head of RIMS department

(Superintendent) compares invoices with

supply requirement from Merchandising

dept.CDC prepares packing list as per invoices with a

delivery statement

CDC in charge signs packing list and

delivery statementCDC delivers goods through carrying contractor Any unusual incidents on way to stores

are ensured by insurance policyStore Manager receives goods as per invoices and

packing listRetail stores send sales proceeds by DD to Area

Head Office daily and Area Head Office forwards

the same to Accounts Dept.Accounts department deposits the DD to collecting

bank and books the same in 1016 account with

corresponding sales accountStores send stock and cash accounting statement

fortnightly to accounts department

500 department checks fortnightly stock

and cash accounting statements with daily

sales mirror.

- 31 -


32/52

Booking of fortnightly sales reviewed by

Chief AccountantAccounts department adjusts 1016 account on

receipt of bank statement

2.8.3 Procedures of Export sales

Process ControlsExport department receives confirmed LC/purchase order

from customers

Export Manager authorises the

shipmentExport department send acceptance letter to customer Contract/LC/TT receives from buyer in case of direct

order

Prepares commercial invoice and packing list andcollects EXP Form

Export Manager and Chief FinancialOfficer signs commercial invoice

Communication with C&F agentC&F agent sends back to Export Dept. all documents

after shipmentInforms to banker and submits export documents for

negotiation with bank Receives bank advice on collection of proceeds CFO reviews daily bank statementAccounts department books the sales in the system on the

basis of invoices and on the basis bank statement

2.9 Organizations sales point:

2.9.1 When order is received by Head Office :

First time QFL receives delivery order from party with details break up of goods through party

appearance or over telephone. In this time party complied his payment by cash, D.D or T.T.

When the party payment made by T.T than accounts officer contract with respective bank and

confirmed T.T amount over telephone. Then cash is transferred to main cash and DD depositedin companies bank account. After confirming payment a money receipt copy is given to party.

Then the delivery order is transferred to factory sales department throw fax or over telephone.

Then computer print delivery order issue as per head office delivery order by sales officer. Than

the order transfer to factory store department and store department issued a challan & sales

- 32 -


33/52

invoice. A sales invoice has three copies, as party copy; as store copy and accounts copy which

is transferred to head office accounts department.

2.9.2 When sales center is Gazipur Plant, Bogra Plant or Depot :

First time we receive delivery order from party with details break up of goods through party

appearance or over telephone. In this time party complied his payment by cash* and D.D . Then

D.D transfer to head office and amount of cash** transferred to factory cash. After confirming

payment a money receipt copy is given to party. Then the delivery order is transferred to factory

sales department throw fax or over telephone. Then computer print delivery order issue as per

head office delivery order by sales officer. Than the order transfer to factory store department

and store department issued a challan & sales invoice. A sales invoice has three copies, as partycopy; as store copy and accounts copy which is transferred to head office accounts department.

3.0 Analysis of Inventory Control Management

Inventory control management of QFL is noted as under:

3.1 Planning:

The planning and control of inventory from product design to final delivery are considerable

strategic significance to the management of QFL. Inventories serving as a cushion between the

production and consumption of goods exists in various forms in the factory:

Raw materials awaiting processing

Inventories for partially completed products;

Finished goods at the factory, in transit, in warehouse distribution center;

The manufacturing control division examines the production in terms of existing and

contemplated production schedules. The store department, planning department and

manufacturing department combine analyze the following activities;

i. Forecast demand for the next quarter ;

- 33 -


34/52

ii. Determine acquisition lead time.

iii. Plan usage during the lead time.

iv. Establish quantity on hand ;

v. Place units on order;

vi. Determine reserve or safety stock requirements.

Using these six steps, the Feed Mill Manager tracks and stores information One step forward

and one step backward in the process.

Ingredient information, including vendor and lot numbers, are tracked from purchase through

manufacturing. Finished feed information, including customer and lot numbers, are tracked from

feed order through manufacturing to delivery to a specific group.

3.2 Functions and Procedures of Stores Department

3.2.1 Introduction

Detailed procedures and necessary documentations for receiving of raw materials stores,

storing, consumption and accounting are contained in Inventory Management Procedure

Manual. Under the set-up the main operation relating to inventory is performed through

Stores Department having separate stores for each type of inventory i.e. Raw Material,

Finished Goods and Stores etc.

3.2.2 Functions of Stores Department

Functions of Stores Department are broadly as under:

To receive and issue Inventory items and to maintain records of Inventory receiving,issuing and balancing in both quantity and value

To keep Inventories in proper condition

To carry out periodical physical verification of Inventories and reconcile with the book

balances

- 34 -


35/52

To ensure proper segregation of high value items

To carry out such other activity as would be necessary for proper management of

Inventories

3.2.3 Receiving and Inspection of Inventories

Receipts and Inspection Section performs the functions of initial receiving and inspection

of goods, which are procured through Procurement Unit. This Section receives Purchase

Order in advance from the Procurement Unit against which they are responsible to take

delivery from the suppliers.

The suppliers deliver the goods through 'Delivery Challan' in four copies, one copy of which is given back to the supplier as a token of acknowledgement of receipt of the

goods and the others are retained. Receipts and Inspection Section, on receiving the

goods:

Record the deliveries in Goods Received Register

Check the Purchase Order with the supplier's Delivery Challan

Make sure that the quantity and description correspond with the PurchaseOrder and sign the Delivery Challan with comments, if any

Write to the supplier regarding shortage, damage, replacement/rejection, if

any

Finally hand over the goods and the Delivery Challans to the Stores

Department by obtaining acknowledgement in the Goods Received Register.

The Stores Department raise the Goods Received Note in 4 copies and distributed asunder:

1 One to Receiving & Inspection Department

2 One to Procurement Department along with the Delivery Challan

3 One to Finance/Accounts Department along with Delivery Challan

- 35 -


36/52

4 One to be retained at the Stores Department along with the Delivery Challan

3.2.4 Procedures for Raw Materials and Stores Requisition/Issue/Consumption

When the Production/Consuming Unit requires raw materials/stores, they make threecopies of Requisition . All the copies are signed by authorised person.

Storekeepers have full details of the name, designation and specimen signature of the

persons empowered to approve Requisition/Issue maintained by the stores for this

purpose.

On receiving the copies of Requisition/Issue Note, Storekeeper/Store Assistant makes

entry of the same in the Goods/Stores Requisition Register (G/SRR) and in Bin Card

and Stores Ledger upon issue of the stores.

- 36 -


37/52

The distribution of the copies of G/SRR are made as under:

First copy is retained in the Store as evidence of having made the issue.

Second copy is sent to Accounts along with the GSRN

Third copy is sent to Production/Consuming/Requisitioning Unit as

evidence of the receipt of demand.

Details Flowchart for Purchasing, Receiving, Recording and Paying Materials is Shown in

Appendix (A/6)

3.2.5 Gate Pass System

Goods/Stores issued to from Store is accompanied by Gate Pass which is prepared in

three copies, two copies of which is handed over to the recipient of the goods/store who

leaves one copy to Gate Keeper .

The Gate Keeper will check all the goods passing out of the Store with reference to the

entries in the Gate Pass and the copy of Store Requisition /Issue Note accompanying the

goods. If the goods agree with the Gate Pass, he uses the stamp "PASSED" on the Gate

Pass with signature and date and then allows the goods to go to the requisitioning person

retaining the Gate Pass. The Gate Pass is then sent to the issuing authority after recording

the same in 'Stores Gate Pass Register.

3.3 Stores Inventory and Reconciliation

3.3.1 Physical Verification of Stores

To ensure accuracy of quantitative book balances, physical verification of inventories is

carried out.

Before commencing the physical verification of inventories, the following preliminary

works are done:

(i) Stores Inventory Sheet is prepared at every Storing point in order to track and

location giving the name, classification, code number, etc.

(ii) All Storing Points ensure that the stores are so arranged that they can be checked in

- 37 -


38/52

the shortest possible time.

(iii) Both Storing Points and Stores Accounting Section ensure that stock records are up

to date.

(iv) Programme is prepared by the Audit Department for stock taking, allocating theexact duties to the staff members. Specific person are also deputed from the Storing

Points.

3.3.2 Treatment of Discrepancies

Verification of stores often reveals discrepancies in actual quantities as compared to their

book balances. Such discrepancies, small or big are adjusted. But before making

adjustment each discrepancy is carefully investigated and the results reported to the

Authority. If any adjustment is called for, it is done suitably only with the prior approval

of the appropriate authority. After an adjustment has been approved, the same is noted in

the Stores Ledger, and Bin Cards.

3.4 Purpose of Inventory Control in QFL:

Purpose of inventory control is to:

1) Manage inventories at predetermined levels to stabilize investments in inventories.

2) Provide the best type of service to customer

3) Produce at maximum efficiency,

The following tools are used for feed manufacturers to control the inventory of the

organization.

Materials (feed ingredients, fuel, power, etc);

Machinery (formulation equipment, feed delivery systems, feed storage

equipment, feed milling equipment, etc.);

People, and

Procedures.

- 38 -


39/52

Feed Quantity and Quality control programs blend these tools to deliver feeds that

consistently contain the formulated nutrients in an available form and contain minimal

levels of toxic substances. All actions directed towards ensuring the product meets the

specifications established by the manufacturer.

Inventory Control System and techniques is based on these fundamental principles:

Maximize profit within specified time and resource allocations;

To minimize total cost;

Obtaining maximum use of inventory investment

Minimizing surplus stock and absolute materials;

Normal distribution of demand and supply forecast errors;

Ability to meet delivery at proper time to the consumer

3.5 Stock Levels and Order Point of QFL :

Maximum and minimum stock level is determined as per management guideline and stoked. The

Minimum limit of raw materials has been describe to the Factory Manager. He is responsible to

maintain that limit. Some Limit of Raw Materials Both For Gazipur Plat and Bogra plant are as

under.

Raw Materials Gazipur Plant(MT)

Bogra Plant (MT) Total

MAIZE 1500 400 1900SOD 1125 250 1375S. FULL FAT 500 125 625MEAT BEAN 1500 400 1900RICE POLISH 500 125 625MASTER OIL 1500 400 1900FISH MEAL 100 25 125LIME STONE 100 25 125MEDICINE 25 5 30PUM OIL 20 5 25

To maintain the minimum limit the factory manager is authorized to submit requisitions request

to the purchase department.

- 39 -


40/52

Order points and/or reorder points are based on usage during the time necessary to requisition,

order, and receive delivery of materials plus an allowance for protection against stock-out. The

order point is reached when inventory on hand and quantities due in are equal to the lead time

usage quantity plus the safety stock quantity.

The formula of Order Point is :

I + QD = LTD + SSQ,

When;

I = Inventory

QD = Quantities due in from orders previously placed, materials transfers,

and return on stock;

LTD = Lead time quantity equals average lead time in months, weeks, or

days multiplied by average months, weeks, or days use

SSQ = Safety stock quantity;

Although this formula is used for reorder the material, but QFL sometime use fixed format and

historical data to determine the reorder points. The safety stock quantity is varied from local

purchase and foreign purchase. For local purchase the safety stock of the quantity must be stored

for at least 15 days. For Foreign purchase the safety stock of the quantity must be stored for at

least three months;

Reorder point is triggered when a materials ledger cards shows that the balance on hand has

dropped to the order points. The materials control department reviews materials items, forecasts

usage and lead-time. The store management department examines the production in terms of

existing and contemplated production schedules.

After inspections, examinations and internal audit the purchase requisition application send

directly to the top management of QFL. If management agree the requisitions orders , it send to

the purchase department. Purchase department are responsible for both Local and Foreign

purchase;

The purchase department makes two types of purchase:

- 40 -


41/52

Local Purchase: Purchases are occur without tender, it based of daily price survey.

Foreign Purchase : Under Letter of Credit by Commercial Department.

3.5.1 Procedures of Local purchase

Process Controls

Purchase department raises purchase order in four copiesand places to Managing Director for approvalOne copy (white) is for supplier, one copy (pink) for controlling dept., one copy (blue) for acceptancemaintained in concerned department and another copy(yellow) for filing.

Purchase Manager and ManagingDirector approves the purchase order

Verification by the controlling officer Controlling Manager verifies purchaseorder Purchase department receives back and send two copies of

purchase order to supplier Supplier retained one copy (white) and send back bluecopy of purchase order to purchase department i.e.acceptance copySupplier delivers goods to factory premises Verification of delivered goods by

security and controlling departmentControlling Officer fills up upper part of Receiving Noteand unloaded at receiving room for Quality test

Controlling Officer checks and putGoods In seal to documents.

Stock Keeper takes actual count in presence of controllingsupervisor. After satisfactory quality certification, Stock Keeper enters necessary information on lower part of Receiving Note and receives goods at stock room andenters in Stock Card

Stock Keeper takes actual count. Labtest and certification of quality byChemist

All documents are send back to Purchase Department for goods controlling i.e. standard price and variance and

places to Account Department

Accounts department deducts tax and VAT at source and booked in accountsMakes payment to supplier

- 41 -


42/52

3.5.2 Procedures of Foreign purchase

Process Controls

Purchase department raises requisition order with theconcern of Purchase Manager and presents to ManagingDirector

Purchase Manager and Managing Director approves the requisition order

Correspondence made for quotation with supplier

Based on quotation issues six copies of purchase order:Two copies for supplier One copy to bank for L/C openingOne copy to customs for clearanceOne copy retained as office copy

MD approves purchase order

Collecting Proforma invoice from supplier Opening L/C Request letter to bank for opening L/C

under dual signatureShipment of raw material on supplier and informing to Bataabout the shipmentSubmission of original shipping documents by exporter through negotiating bank Receiving original shipping documents from L/C opening

bank and bank advice for paymentC&F agent to release the goods and conducting joint survey

by customs and release the goods from customsCorrespondence with C&F agent signed

by Purchasing Manager Clearing the goods after payments of customs duty, VAT,AIT by C&F agent

Payment advice issued to bank jointlysigned by MD/CFO along with other signatory

Controlling officer fills up upper part of Receiving Note andunloaded at receiving room for quality test

Controlling officer checks and put GoodsIn seal to documents

Stock keeper takes actual count in presence of controllingsupervisor. After satisfactory quality certification, stock keeper enters necessary information on lower part of receiving note and receives goods at stock room and entersin stock card

Stock keeper takes actual count. Labtestand certification of quality by chemist

All documents are send back to purchase department for

goods controlling i.e. standard price and variance

- 42 -


43/52

3.6 Manual Systems of Depot for inventory control:

Quality Feeds Limited is a leading company in manufacturing and marketing of poultry feed,

always wants to provide better service to the customers. In order to make companys product

available in the market and survive to the agent /sub-agent as per make available when need,delivery is made through several depot. To ensure best performance from depot personnel, this

manual is used as a guideline.

a) General

1. Location of depot is determined considering convenience of local agents.

2. Necessary steps are taken to provide security of the store and office equipments andgoods.

3. DD/PO, Money receipts book, Delivery order book, and Challan book are kept under proper custody.

b) Function of depot

1. Storage of product as per demand of local agent and sub agent and as per managementguideline.

2. Delivery goods to the local agent and sub-agent.

3. Maintain proper Books and records of sales and stock position.

c) Storage of Feed:

Maximum and minimum stock level is determined as per management guideline and stokedaccordingly.

Necessary steps are taken to uphold quality of product.

Product is kept in proper manner.

Non- Stock items (like damaged, torn and returned) are kept separately from stock.

Stock over one month is returned to factory store.

Necessary steps are taken to protect product from damage by rats, insects, rainwater or damp floor and wall.

- 43 -


44/52

d) Delivery:

FIFO (first in first out) method is strictly followed to deliver product.

Delivery to the agent and sub agent against DD/PO (issued in companys name) only.

Delivery is made as per approved maximum limit by Head office only.

Delivery against credit limit is made as per approved credit limit only. On emergency,

delivery can be made against vocal / over telephone conduct from an authorized person

like sales in-charge.

Delivery against contract growing is made as per approved limit of Contract growing and

sales officer must follow up if dues are adjusted in due time and he will issue warning

letter(s) to the failure party with CC to proper authority.

Money Receipt (Accounts Copy), Delivery Order and Challan copies are sent to Head

Office promptly.

If any delivery made against any kind of adjustment or compensation as per instruction

from proper authority proper documentation are confirmed in this regard.

e) Books & Records

The following books / ledgers will be maintained by officers specified below:

Store ledger is maintained for finished product.

Bin Card is maintained for each and every item.

Party ledger is maintained. (Delivery against credit limit and contract growing should bemarked up)

Fixed asset register is maintained.

Daily and Monthly stock and sales statement is prepared.

- 44 -


45/52

Monthly party wise sales statement is prepared.

Attendance and Leave Register is maintained.

Vehicle Register is maintained.

Overtime register is maintained.

Logbook should is maintained.

f. Return of Goods:

Initially agent / subagent will submit an application to RIC against objectionable product.

Physical verification will be confirmed by RIC and inform to DGM (Marketing)/Manager Sales.

If application of the agent is accepted only then return goods can be accepted.Returned goods will be sent to factory store immediately.

3.7 Valuation of Inventories

Inventories in hand are valued as follows :

a) Raw materials : Raw materials are valued under FIFO method at purchase cost

which includes invoice price, duties, transportation charges and cost incurred in

bringing the inventory to its present location. b) Finished goods: Cost of Goods includes the followings :

i) Raw materials consumed

ii) Other direct materials consumed

iii) Utilities (gas, electricity and diesel) consumed

iv) Production overheads.

- 45 -


46/52

4.0 Market and Industry Analysis

4.1 Market Analysis

The Graph of market analysis (Appendix:A/9) shows although there are many

competitions in feed market but QFLs Position in this field is very strong. In fish

feed field QFL is highest ranked and enjoying 20% of total market share, In Poultry

feed field QFL is ranked 5 th and enjoying 9% of total market share, In Shrimp feed

field QFL is ranked 3 th and enjoying 13% of total market share so we can say that

QFL has a sustainable position in all three feed.

4.2 Industry Analysis

From above analysis and observation I have tried to find out the Strength, Weakness,

Opportunities and Threat of the Company through SWOT analysis

From above analysis, I have tried to discover Strength, Weakness, Opportunities and threat of

QFL through SWOT analysis :

Strength Opportunities

1) Quality Product

2) Strong Commitment

3) Goodwill

4) Strong Management

1) Broad Market

2) Mounting demand for new product

innovation

3) Favorable environment

4) Encouraging government policyWeakness Threats

1) Lower capacity to fulfill the demand

2) Insufficient EDI systems.

3) Lack of computerized facilities

4) Low Margin of Profit

5) Complex marketing Channel

1) Competitors

2) Market fluctuation3) Diseases

4) Increasing Transport Cost

- 46 -


47/52


48/52

5.0 Recommendation

Quality Feeds Limited although holds a strong position among the competitors in the

Poultry Feed Manufacturing Industry of Bangladesh, still it has many scope to increase

the efficiency to carry out and expand the business. There are some recommendations for the company,

The company Quality Feed Limited (QFL) should take little more risk in innovative

product.

QFL should increase the production capacity, because recent demand for Poultry Feed is

increasing day by day.

QFL also should increase its number of employees. Few employees have to handle a

large number of customers and suppliers.

QFL can go for business diversification, such as agriculture and fisheries project

Management Information System should be improved.

There is no human resource department in the company, so the company should open this

department to increase the efficiency of the employees.

QFL should open more Depot, and increase its agents so that it can reach the ultimate

customer more closely.

- 48 -


49/52

Findings:

Increases chicks price and medicine price is the main threats of poultry business.

Day by Day increased poultry feed there are another main reason losses of poultrysectors.

In Competitors market Fish Feed Field QFL is highest position in Bangladesh.

Quality Feeds Limited is a leading company in manufacturing and marketing of poultryfeed, always wants to provide better service to the customers.

Quality Feeds Limited Inventory Control System and techniques is based on to minimizethe cost and obtaining maximum use of inventory investment.

QFL has a strong marketing channel through which sales are made all over the country tothe customers.

- 49 -


50/52

6.0 Conclusion:

The next decade will see significant changes in restructuring, mergers, acquisitions,

amalgamations, joint ventures, diversification, integration and efficient service chains, e-

commerce and use of the latest information technology in global tenders, trading, export/import

and other commercial activities in Feed Manufacturing Industry. At the root of all these

developments there will be scientific development of feed manufacturing technology. The

Bangladesh feed industry should adopt technology and scientific formulations, for production of

animal feeds.

Compared with other companies in poultry feed industry in Bangladesh, QFL is most efficiently

managed organization rapidly progressing and very much keen to adopt new technologies for its growth. The management of the company always welcomes suggestions from the line and

staff managers, customers, and suppliers for improvements. The mentioned recommendations

will help the company to grow rapidly to lead the market in and outside the country.

- 50 -


51/52


52/52

Documents

Interniship Report