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CSD: A Brief history

Canteen stores department was established with the name of “Army canteen board” after World War I to cater with the needs of the soldiers. During 1927-28 the Army canteen board was liquidated in favor of “Canteen contractors syndicate ltd.”. The main objective of that organization was, in the event of war this organization would be taken over by the govt. of India lock, stock and barrel. In 1942, it became “Canteen stores department (CSD)”. In 1947, when the assets of India and Pakistan are distributed between both the countries, CSD became Canteen stores department Pakistan under the control of ministry of defense.

Status of CSD

1. Initially ministry of defense was responsible for A/Cs and finance for the entire organization. That practice became unsuited day by day and in 1959, it was decided that this organization should be treated as a “ non-government commercial concern” under the control of ministry of defense for the welfare of armed forces.
2. As CSD is under the army rule so in an appeal in November 1982, Supreme Court exempted the employees of CSD from the operation of independent relations ordinance 1969. 
3. CSD proved to be as an essential service donor in 1965 and 1971 wars. During the emergency the manual of Pakistan military law will apply to all CSD employees.
4. Today CSD is the largest retail chain of Pakistan with their shops in the congested as well as in the remote areas all over the country. 

What is retailing?

Retailing is the business activity of selling goods or services to the final consumers. A retailer is any business establishment that directs its marketing efforts towards the final consumer for the purpose of selling goods or services. 

Retail chain

There are three distinctive features of retail chain.
1. Centralization.
2. Specialization.
3. Standardization.
Centralization is the concentration of policy and decision making in one location either called central head quarter or the home office. A retail chain has a high degree ofspecialization, which incorporates a greater number of functional divisions in its organizational structure. Also a retail chain has a high degree of standardization or similarities between the operating and merchandising operations of the business. 

The Mazur plan

All modern retail management structure came from a plan, which was introduced in 1927 by an investment banker named Paul Mazur. The Mazur plan divides the retail organization into four functional divisions: Finance, Merchandising, Promotion and Operations.

Mission statement

a) To provide entitled customers with standard quality items of daily use, other than those supplied from the govt. or army authorized source at reasonable rates through its retail shops and unit canteens.
b) To form the basis of an efficient canteen organization in the event of peace and war for troops located anywhere in the country and operational areas during war.


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Organizational hierarchy


Field organization


Board of control

Board of control supervises the overall activities of the CSD under the head of ministry of defense. It constitutes as under
1. Chairman (Quarter master general)
On service lt. general
2. Members:
Senior representatives from
i. Ministry of defense
ii. Ministry of finance (military)
iii. Pakistan navy
iv. PAF

Duties of Board of control

1. To define and control policy matters of CSD.
2. To record and define the facilities to be provided by CSD.
3. To control general expenses, disposal of profits and financial policies. 

Duties and responsibilities of MD

1. Reporting the overall activities of CSD to the Board of control.
2. Execute policies and conduct the business.
3. To monitor Budget preparation and its implementation.
4. Take actions to promote and expand the business.
5. Exercise overall control.
6. Render periodical progress report.


Field organization

At field level CSD is classified into three zones according to the geographic regions of Pakistan.

i. South
ii. Center
iii. North
Each zone has zonal depots, internal auditors, zonal shops and petrol pumps under its supervision. 


This division is the heart of CSD, which stimulates all the admn. and personnel activities. This is the busiest division of CSD, which is always flooded with heavy flow of work.


Duties and responsibilities of P & A division

Ø Manpower planning and recruitment.
Ø All matters pertaining to employee’s service and welfare from the time of joining service till retirement.
Ø Maintenance and application of service rules and regulations (SOP’s)
Ø Administering the head office and all outlets.
Ø Planning, procurement of furniture, equipment, stationary, book forms and mechanical transport.
Ø Raising and closing of shops.
Ø Welfare schemes for customers and employees.
Ø Decide agenda of annual board meeting and its arrangement.

Personnel at P & A division

Designation Grade Persons
Director 1
Special grade manager 18 1
Senior grade manager (SGM) 16 1
Junior grade manager (JGM) 15 2
Senior office assistant (SOA) 7,9,11 5
Junior office assistant (JOA) 5 3


Organization hierarchy

For convenience P & A division is divided into three sections.
1. Admn. Section
2. ACR Section
3. Production Cell


Duties and responsibilities of Admn. Section

1. Recruitment
Recruitment for CSD head office and all outlets is the major part of this section’s duties. 


Recruitment procedure

When any vacancy comes before the admn Section, the admn staff first takes a written test from the candidate. Passing marks of that test is 50%. The candidate that passes that test, further nominated for an interview, which has been conducted by a board of the respective division where the vacancy is vacant. M & P division conducts the tests and the interviews of the technical or professional candidates. A candidate who passes all these written and oral tests is appointed on probation. Probation period for the armed forces employees is 3 months while the probation period for a civilian candidate is 1 year.


2. Performance evaluation

After recruitment of any employee this is the prime responsibility of this section to monitor the performance of that employee. During the service of an employee all records pertaining its performance measures is recorded systematically in his service file in this section. A roll order form is attached to his service file every month pertaining any leave, increment, posting or punishment information. 

3. Posting

This section is also responsible for posting of employees and then keeps track of that posting decisions in a specific service file with a unique PF no. (personal file no.).

4. Job termination and pension rights

If any employee gets retired or terminated from his job, this is the duty of this section to clear all the bills of that employs.

5. Furniture and stationary procurement

For the whole organization, this section fulfils the furniture and stationary requirements.

6. Opening and renovation of shops, depots and petrol pumps

All over the country, P & A takes care of all of its depots, stores and offices for their opening, closing and renovation.

7. Defining and implanting policy matters and SOP’s

This is another major responsibility of this section, to define policy matters, “Standard office procedures” etc. and ensuring their implementation. Also, to decide agenda of annual board meeting and its arrangement.

Duties and responsibilities of ACR section

1. Maintaining ACR

An “Annual confidential report” is maintained for each employee after one year in this section. This ACR pertains confidential information about any employee, which is further helpful for his promotion decision. An initiating officer fills each ACR form, which is senior to that particular employee. A specific file “Seniority roll” is maintained pertaining information about current and previous promotions of the employees.


Another major responsibility of this section is to arrange “Transportation and delivery allowances” for all the employees of CSD. 
3. Allowances
Various other allowances such that overtime, bonus etc are sanctioned by this section.


Duties and responsibilities of Production Cell

1. Central registry

Almost all post of the organization is passed through this cell where the post is received and dispatched.

2. Fax received and dispatched

3. Photo state for the entire head office



This section is responsible for stimulating all the financial (i.e. supply & purchase, pay and allowances) and accounting (i.e. cash books & ledger, cheques & payments) activities of CSD.

Duties and responsibilities of F & A division

Ø Payment of pays and allowances to the staff.
Ø Checking and auditing documents of all financial transactions.
Ø Payment of supplier’s bills.
Ø Documentation of shop sale proceeds and accounting thereof. 
Ø Monitoring of bank accounts.
Ø Preparation of financial budgets, quarterly expense reports, annual financial statements etc.
Ø Checking and passing provident fund, cash security and service gratuity claims.
Ø Preparing accounting instructions for issue to depots and shops.
Ø Checking and reimbursement of imprest A/C.

Organization hierarchy


Mainly F & A Division is divided in to five sections.
1. F1
2. F3
3. F2 (a)
4. F2 (b)
5. F4 (Computer section)
F1 and F3 are concerned with finance while F2 (a) and F2 (b) are wholly concern with accounting. F4 is a computer section, which is a central part of the division.


This is a first section of finance division. The major responsibilities of this section are,
1. Processing of pay sheets.
2. Mail received and dispatch for the entire division.
3. Recruitment for the division.
4. Final settlement.
5. Overtime and other allowances.
7. Imprest funds maintenance.
8. Miscellaneous.
1. Processing of pay sheets
 This is the most important work of this section. Following is the major activities of the process.
Ø Various departments and shops send a pay sheets including all the information about the pay and allowances and all the increments and decrements etc. of the employees.
Ø F1 pre audits that pay sheets and then send them to computer section. 
Ø Computer section checks all the pros and cons of that pay sheets and send a printed copy of final voucher to liaison officer.
Ø Liaison officer then dispatches that voucher to F2 (b) for payment.
2. Mail received and dispatch
All mails, DCS (Daily cash statement) etc. of the entire division are arrived and dispatch at this section. One person is for receiving and one for mail dispatch.
3. Recruitment for the division
F1 is also responsible for recruitment of employees for F & A Division as well. This segment of this section keeps track of all of the employees that are appointed for F & A Division by P & A Division.
4. Final settlement
If the job of any employee is terminated due to any reason, this segment of the section assesses the remaining dues that are obligated to pay to that particular employee. The final account is then transferred to F2 (b) for payment.
5. Over time and TADA payments
This segment audits all the claims from all divisions for overtime and TADA and then issues a payment voucher that is further transferred to F2 (b) for payments.
6. Imprest funds maintenance
CSD imposes limit to its each shop holder that they are bound to purchase up to specific amount of money to stimulate the daily operations of business. This limit is called “imprest limit”. If a shop spends more than its imprest funds, a notification is issued to that shop. In a converse situation this section reimburse the fund. All bills are first passed through P & A division and then dispatch to F & A Division. 
7. Miscellaneous
This section of the division also deals with the following sectors.
Ø Advances to CSD shops all over the country for the renovation of fixed assets such as building, automobiles etc.
Ø Procurement of Rent allied bills that are the utility bills (electricity, gas, water etc.) of all shops.
Ø Procurement of service allowances to all officers such as house rent, transportation expenses etc.
Ø Procurement of pool expenses which are the running expenses of vehicles, machines etc. 


This section of F & A Division is concerned with purchase and supply for the outlets of Canteen Stores Department. The prime responsibility of this section is invoicing the suppliers of the Canteen Stores Department. Almost all purchases for CSD outlets take place on the behalf of zonal depots and the head office, so it is prime responsibility of the finance division to pay against that purchases. 
The major activities, which are taking place at this section, are
Ø After the demand has been placed to the concerned shop of CSD, the supplier or the depot send a sales invoice to the shop manager. The shop manager records that transaction in a form called “Receipt voucher (RV)”. The sales invoice along with a receipt voucher (RV) is further send to P & S Division.
Ø P & S Division checks the prices of the product according to the contract with the supplier, informs S & D Division the quantities of the purchased products, attaches a form “Covering purchase letter” with these two forms which constitutes of summary of the transaction and then sends that forms to F3.
Ø Here a last audit of the transaction takes place which constitutes of 
o Names and signs checking.
o Sales tax checking.
o Income tax deductions.
o Conciliating the amounts on sales invoice and covering purchase letter and then puts forward the amount, which is lesser.
These forms are further transferred to computer section. In reply, the computer section issues a “ Paid invoice” in which income tax has been deducted and net amount is noted down. This amount is further posted to “Payment voucher” which is further remitted to F2 (b) for payment.
Ø Often P & S Division makes an agreement with major suppliers of CSD and prepays the amount for the future purchases. P & S informs F & A Division about that agreement via “ Covering purchase order”. This information is recorded in a “ Sub-ledger”. Each time when a purchase takes place, the supplier’s A/C is credited. The final A/C is then posted to “Journal Voucher” which is further sent to F2 (b). All correspondence between the division and the suppliers are recorded in a “Supplier’s Correspondence Files” in the same section as well.


Major suppliers of Canteen Stores Department

Following is a precise list of the major suppliers of Canteen Stores Department.
§ Lever Brothers.
§ Rafhan.
§ Mitchell’s.
§ National Foods.
§ Hameed Sports.
§ Oxford Knitting.
§ Pakistan Beverages.
§ Habib Oil Mills.
§ Medina Industries.
§ Hussain Industries.
§ Diwan Salman.
§ Popular Foods.
§ Majeed Soap.
§ Colgate Palmolive.
§ Kohinoor Textile Mills.


F2 (a)

There are three major responsibilities of this section.
1. To maintain the cash books.
2. To make monthly sales reports.
3. To make profit and loss A/Cs.
1. To maintain the cash books.
 A DCS (Daily cash statement) approaches to this section from each of CSD outlets which constitutes of,
Ø Sales figure for the day. 
Ø Bank receipts. 
Ø Information about local purchase. 
Ø Other utility bills. 
All DCS are recorded in a separate cashbook for each shop. No accrual transactions are recorded in the cashbook. There are three basic forms in each cashbook.
1. Daily sales figure. (All credit) 
2. Remittance slip (bank receipt and deposit information)
3. Bank reconciliation statement.

1. Daily sales figure. (All credit)
Shops deposit their daily sale amount to the CSD A/C. After that send a “Daily cash statement” to F2 (a). This section informs S & D Division about the sales figure and then bookkeeper records that DCS in the cashbook of that particular shop. At the end of the month, all these figures are recorded in a “Journal Voucher JV”, and then posted to general ledger and then to trial balance.
2. To make monthly sales report
Second major responsibility of this section is to prepare monthly sales report of each zone of CSD. These sales reports are further remitted to F2 (b) where it is posted in the trial balance.
3. To maintain the profit and loss accounts
Another major responsibility of this section is to maintain the profit and loss account of all petrol pumps, fruit and vegetable shops on monthly basis and the rest of the CSD shops on quarterly basis. All these accounts are further transferred to F2 (b).

F2 (b)

The major responsibility of this section is to arrange payments for all CSD bills. All JV’s from all of the preceding sections are collected at F2 (b); final cheques are made and then sent to concerned person or division. 
As mentioned earlier, F1 sends all bills related to pay and allowances, F2 (b) sends all bills related to purchase and supply and F3 sends monthly information of all transactions to F2 (b).
Following are some of the major activities taking place here.
1. To maintain general ledger and trial balance.
2. Budget estimation and preparation.
3. Payments.
4. Preparation of average income statement and balance sheets.
1. To maintain general ledger and trial balance.
All JV’s from F2 (a) that constitutes of the records of the monthly transactions of each shop are recorded in the general ledger. Also a trial balance is prepared from this general ledger on monthly basis, which is further helpful in the preparation of the annual balance sheet and income statement.
2. Budget estimation and preparation.
This process constitutes of following steps.
1. In the month of March, a letter is issued to P & A Division and the zonal offices. In this letter an estimation is required that what has to be purchased for each segment of the organization in the next coming year and how it differs from the previous year.
2. On the behalf of that estimation, F2 (b) assesses the volume of the budget and prepares a “Performa budget”, which is further transferred to director finance.
3. In the meeting of board of directors, the final budget is approved and sanctioned. “Quarter master general” of board of control further sanctions this budget.
In CSD, budget is an estimation of the following items.
§ Loan payment.
§ Capital items.
§ Miscellaneous expenditure.
§ Financial charges.
§ Final settlement.
§ Allied services.
§ Repair and maintenance.
§ Establishment charges.
§ Purchases.
§ Other incomes/ receipts.
§ Hire purchase.
§ Sales.
Budget Performa form. 

This year estimate
Next year estimate
Next and next year estimate
% Increase or decrease

3. Payments
As mentioned earlier.
4. Average balance and income statement 
On the basis financial statements of the preceding years, F2 (b) prepares average income statement and the balance sheets of the current year, in order to assess the financial health of the business during the current year. It is also used to assess any positive or negative change in sales, profitability and liquidity etc.

F4 (Computer section)

This is the heart of F & A Division where all documents from all sections of the division are recorded and analyzed. 
There are two major systems working at F4.
1. Payroll system.
2. Purchase order system.
1. Payroll system
The first major system is remuneration to all employees of Canteen Stores Department, which is totally computerized. This system is confined to activities regarding F1 section. All pay sheets from all segments of the organization are recorded and scrutinize in the computer section. After that a final voucher is made which is sent to F1.
2. Purchase order system
The second major system is purchase order system, which is confined to the activities regarding F3. This system accommodates the following privileges.
§ All suppliers’ bills are added to the system.
§ Scrutinizing the supplier’s bills.
§ Aging of bills on weekly basis.
§ Bank payments distribution.
§ Income tax reduction.
§ Income tax reports for the suppliers.
§ Income tax recovery certificate.

Soft ware and network architecture

The soft ware installed at F4 has been made in dbase with “Peer to Peer” network topology.

Financial analysis

The financial analysis of any business organization elicits the financial health of the business and overall efficiency of management of the organization. 
During my visit to the F & A Division, I have conducted a financial analysis of Canteen Stores Department for the year 1999-2000, as it is the last closing year till 31st June 2002 even the year 2001-2002 has been ended on 31st June 2002. This elicits the slow and deadly moving working and inefficient management at the division. However financial analysis for the year 1999-2000 constitutes of the following parts.
1. Ratio analysis.
2. Horizontal analysis.
3. Vertical analysis.
Due to confidential nature of the documents, I cannot publish the actual balance sheet and income statement.
1. Ratio analysis
There are five basis ratios of this analysis.
i. Liquidity ratios.
ii. Activity ratios.
iii. Debt ratios.
iv. Profitability or coverage ratios.
v. Marketability.
1. Liquidity ratios 
The ratios, which assess the ability of a firm to satisfy its short-term obligations as they come due, are liquidity ratios. They constitute of,
a) Current ratio = Current assets / Current liabilities 

Year Ratios
2000 451,547,164 / 220,609,517
= 2.04
1999 503,283,333/263,803,351

b) Acid test ratio = Current ratio – inventory / Current liabilities 

Year Ratios
2000 451,547,164 – 213,453,707 / 220,609,517
= 1.08
1999 503,283,333 – 266,226,231 / 263,803,351
= .89

c) Cash ratio = Cash / Total assets 

Year Ratios
2000 27,831,880 / 514,613,398
= .05
1999 12,087,665 / 538,390,268
= .02

d) Net working capital = Current assets – Current liabilities 

Year Ratios
2000 451,547,164 - 220,609,517
= 230,937,647
1999 503,283,333 - 263,803,351
= 239,479,982

These three figures are encouraging and show that the firm’s ability to satisfy its short-term obligations has been increased during the year. The firm will be in a position to satisfy its short-term obligations even if its current assets are shrunk to half.
2. Activity ratios
These ratios represent the speed with which various accounts are converted into cash or sales. They constitute of,
a) Average collection period (ACP) = A/R / Average cr. Sales/day 

Year Ratios
2000 24,521,780 / 1,085,230,212/360
= 8.24 = 8 days
1999 44,226,198 / 929,231,232
= 17.38 = 17 days

b) A/R turn over = 360 / ACP 

Year Ratios
2000 360 / 8
= 43 times in a year
1999 360 / 17.38
= 20 times in a year

c) Average payment period (APP) = A/P / Avg. cr. Purchase/day 

Year Ratios
2000 157,937,876 / 964,934,508/360
= 60 days
1999 163,317,927 / 925,372,804/360
=64 days

d) A/P turn over = 360 / APP 

Year Ratios
2000 360 / 60
= 6 times in a year
1999 360 / 64
= 5 times in a year

e) Inventory turn over = C.G.S / Average inventory 

Year Ratios
2000 1,022,294,059 / 266,226,231+213,453,707/2
= 4 times in a year
1999 858,471,365 / 193,845,873+266,226,231/2
= 3 times in a year

These five figures are encouraging eliciting the efficient management of cash. Even the sales of Canteen Stores Department have been increased by almost 17% during the year, but its cash collection period has been reduced. Also the inventory turn over has been increased during the year that shows the productivity of current assets has been increased during the year.
3. Debt ratios
These ratios measure the proportion of total assets financed by firm’s creditors. They constitute of,
a) Total debt to total assets = Total debt / Total assets x 100 

Year Ratios
2000 241,284,725 / 514,613,398 x 100
1999 284,830,645 / 538,390,268 x 100
= 53%

b) Debt equity ratio = Long term debt / Stock holder’s equity
As there is no S.H.E, so there is no debt equity ratio.
The claims of outsiders on the assets of the firm have been decreased by 6% during the year. It shows the low level of technically insolvency as well as low level of financial leverage and profitability. 
4. Profitability or Coverage ratios
These ratios assess the overall profitability of the business during the year in various aspects such as gross profit, net profit etc. they constitute of,
a) Time interest earned ratio = EBIT / I 

Year Ratios
2000 30,813,382 / 11,044,332
= 2.78
1999 49,527,421 / 7,894,380
= 6,27

b) Gross profit margin = Gross profit / Total sales x 100 

Year Ratios
2000 62,936,153 / 1,085,230,212 x 100
= 5.78%
1999 70,759,867 / 929,231,232 x 100
= 7.61%

c) Net profit margin = Net profit after taxes / Total sales x 100 

Year Ratios
2000 19,769,050 / 1,085,230,212 x 100
= 1.82%
1999 41,633,041 / 929,231,232 x 100
= 4.48%

d) Sales to Total assets = Sales / Total assets 

Year Ratios
2000 1,085,230,212 / 514,613,398
= 2.1
1999 929,231,232 / 538,390,268
= 1.72

e) Earning power or Return on investment = Net profit after taxes / Total assets x 100 

Year Ratios
2000 19,769,050 / 514,613,398 x 100
= 3.84 %
1999 41,633,041 / 538,398,268 x 100
= 7.73%

All these figures elicit the low level of profitability during the year. Time interest earned ratio, gross profit and net profit margin have been decreased significantly during the year. This may be due to low level of operating and financial leverage that led to the consumption of more expensive long-term resources of the organization. It also may be due to high cost of goods sold during the year and low level of gross profit margin. However Canteen Stores Department should concentrate on this factor in the long term.
Leverage is the use of fixed cost assets or funds to magnify returns to the firm’s owners. 
2. Horizontal analysis 

Accounts 2000 1999 % Change
Current assets 451547164 503283333 -10.27
Current liabilities 220609517 263803351 -16.37
Long term debt 20675208 21027294 -1.67
Total assets 514613398 538390268 -4.41
Total liabilities 241284725 284830645 -15.28
Sales 1085230212 9298231232 +16.78
Cost of goods sold 1022294059 858471365 +19.08
Gross profit 62936153 70759876 -11.05
Operating expenses 98827373 79898356 +23.69
Net profit 19769050 41633041 -52.51
Fixed assets 63066234 35106935 +79.64

Again the horizontal analysis shows a low level of profitability, high level of operating expenses and low level of operating and financial leverages. 
3. Vertical analysis 

Accounts 2000 1999
Total assets
Fixed assets
Current assets
514613398 (100%)
63066234 (12.25%)
451547164 (87.74%)
538390268 (100%)
35106935 (6.52%)
503283333 (93.47%)
Total liabilities
Current liabilities
Long term debt
241284725 (100%)
220609517 (91.43%)
20675208 (8.56%)
284830645 (100%)
263803351 (92.61%)
21027294 (7.38%)
Gross profit
Operating expenses
Net profit
1085230212 (100%)
1022294059 (94.2%)
62936153 (5.79%)
98827373 (9.10%)
19769050 (1.82%)
929231232 (100%)
858471365 (92.38%)
70759867 (7.61%)
79898365 (8.59%)
41633041 (4.48%)



This division is concerned with the following major activities mainly.
1. Purchase and suppliers decision for all Canteen Stores Department outlets.
2. Setting the purchase and sale prices of the commodities.
3. Monitoring the purchase and sale prices via market survey.
4. Billing the purchases.


Duties and responsibilities of P & S Division

1. Compilation / revision of assortment lists.
2. Planning procurement schedules.
3. Maintaining records of suppliers.
4. Negotiating purchase contracts.
5. Maintenance of purchase records.
6. Survey of prices.
7. Fixation of process.
8. Trial of new items.
9. Preparation of quarterly item wise sale progress and sale analysis.
10. Controlling the purchase budget.
11. Planning profits on sales as required by annual budgets.
12. Maintaining records of the sale incentive scheme.
13. Arranging disposal of supplier’s goods.

Organization setup

There are three common responsibilities of each of these groups.
1. Market survey.
2. Pricing.
3. Billing. 
1. Market survey
A product induction committee which constitutes of the director and other liaison officers of the division decides upon that what has to be inducted for sale in Canteen Stores Department outlets. For this purpose, the committee conducts a market survey that is completed under the supervision of various groups. This survey constitutes of the assessment of, 
Ø Product popularity.
Ø Product pricing.
Ø Product branding and packaging.
Ø Product manufacturer and back media support.
Ø Laboratory tests.
A market surveyor that is permanently hired by the division covers all these aspects.

Duties of the market surveyor

Ø To go in to the market and assess the product popularity via its volume of customers and their loyalty towards the product, back media support, local advertisement etc.
Ø To assess the product current, previous, market and Utility Stores Corporation prices. As Utility Stores Corporation (USC) is the main competitor of the Canteen Stores Department so the stress of the management is to compete them with lower prices. 
Ø To assess the product quality and it’s banding and packaging.
If the division wants to check the product quality by itself, it conducts a laboratory test of the product at various stations. Groups send the final report of all these market surveys and laboratory tests to the product induction committee and then this committee decides upon the product to be inducted.
2. Billing
The second most important responsibility of each group of P & S Division is billing. 
Billing process
After the orders have been placed to the recommended Canteen Stores Department outlets, the shop manger sends one copy of sales invoice along with a RV and a form F 902 which has a record of all dates of arrival and dispatch of forms from various divisions, to the P & S Division. Here P & S Division informs the S & D Division of the quantities purchased by the shop. 
The concerned group at P & S Division verifies the purchase and sale prices of the product, ascertains the bill type whether it is regular or payment after sale. 
Regular and payment after sale procedures depends upon the suppliers. Most of the Canteen Stores Department suppliers are regular having a specific credit period of 10, 20 or 30 days or supply is made against advances. Some suppliers are of nature that gets the payment after sale has been made at CSD outlets. This arrangement is called “Payment after sale”. All suppliers are sanctioned and registered by P & S Division. 
Each group at P & S Division attaches a “covering purchase letter” with the rest of the letters and then sends that documents to F & A Division.
“Covering purchase letter” is a specific verification form of the division having necessary information about the actual purchase and sale price, supplier name and its type etc. 
3. Pricing
The third main responsibility of each group at P & S Division is pricing. It means,
Ø Price setting at product induction.
Ø Price revision when prices are changed.
Ø Coordinate with PCL section.
All groups have a close relationship with PCL (Price change list) group, which is primarily responsible for pricing at Canteen Stores Department. All pricing is done after a complete market survey.


Registration process

This division registers all the suppliers and the firms for Canteen Stores Department. With out the permission of the division, no Canteen Stores Department outlet can purchase any good from any person. To register any supplier there is a committee called “Product induction committee” in P & S Division. 
Product induction committee
This is a seven members committee with MD as chairman and all directors as members. This committee decides that what has to be inducted from various national and multinational companies. Various groups of P & S Division collect information about the proposed suppliers and on the basis of that information this committee decides upon a supplier for Canteen Stores Department. 
Also companies send a request letter along with samples of their products to the product induction committee. The committee then investigates that samples through various sources such as market survey, laboratory tests etc. On the basis of information extracted from these various sources the committee sanctions the supplier. Then P & S Division sends a registration form to the company. Initially 5000 registration fees along with 1000 annual security are remitted to the CSD bank account.
After the division has sanctioned a firm, CSD allows its shop managers to do business with that particular firm. 
P & S Division registers the firms in three areas.
1. Regular suppliers.
2. Payment after sale.
3. Local purchase.
1. Regular suppliers
These are the supplies for which payment for the purchases is made in advance or with in a credit period of 10,20 or 30 days. Credit period and the discount on the purchases are inversely proportional to each. Regular suppliers are hired on the basis of their market reputation or on the basis of tender. 
Tender procedure
P & S Division purchases some of the grocery products, which are generic in nature such as rice, pulses, flour, sugar etc., after a tender meeting. There are three essential members of the tender committee. 
1. Director P & S Division.
2. Director F & A Division.
3. Director S & D Division.
Initially all willing parties are intimated through letters. At the scheduled date all parties approach to Director P & S Division where Directors finance and S & D are present. First rates bargaining take place. All samples are allotted a secret code. These samples are tested at S & D and then according to the qualities of the samples, specific code get priority and the tender is sanctioned to that party.
2. Payment after sale
As competition is growing at a very rapid pace in the market, Canteen Stores Department is now registering the firms for which payments for the purchases are made after the sale of the goods from the CSD outlets. With the permission of P & S Division, various firms are allowed to display their products on the shelves of Canteen Stores Department outlets but payment for that purchases is made only when the product is sold out. 
3. Local purchase
Usually these are the items, which are perishable in nature and with the permission of P & S Division, Canteen Stores Department outlets are allowed to buy that products from their local dealers and pay for that purchases themselves. Nestle is the largest local purchase supplier of Canteen Stores Department. 
Items topology
There are three types of items, which are displayed on the shelves of Canteen Stores Department outlets. 
1. Depot delivery (DD items)
2. Shop delivery (SS items)
3. Local purchase.
DD items are centrally procured. It means depot is responsible for the supply of the goods to the shops. SS items are procured at shop level. Shop manger purchases the goods at his own and sends bills to the P & S Division. These are of type “payment after sale” usually. Local purchase items are bought and paid by the shop manger.



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