This document summarizes a study on inventory management at a leading automobile company in India. The study analyzed the company's inventory management processes, conducted ABC and VED analysis of inventory items, and examined the activities of the purchase and stores departments. It was found that issues with the company's SAP system led to mismatches in parts and excess material purchases, affecting production. The study suggested implementing total quality management and improving control over slow-moving C-class inventory items to reduce costs and finished goods inventory.
This document provides an overview of Indian ports and specifically profiles the Visakhapatnam Port Trust. Key points:
- Seaports play an important role in India's economic growth and foreign trade, handling over 80% of international trade.
- Visakhapatnam Port is one of India's 12 major ports, located in Andhra Pradesh. It has deep waters and is naturally protected.
- The port has grown to serve both commercial and industrial needs. It has specialized facilities like an underground LPG storage cavern.
- Visakhapatnam Port has a long history dating back to the 1800s and was formally established in 1933, making it an important trade hub on the east
This document provides an overview of warehousing. It defines warehousing as the storage of goods and preparation for reshipment. It describes the four main types of historical warehouses and notes that warehousing involves receiving, identifying, holding, assembling, and preparing goods to meet demand. The document outlines the types of warehousing including private, public, bonded, and government warehousing. It discusses factors to consider like ownership, location, size, and products. The functions of warehousing are receiving, record preparation, identification, storage, packing, and delivery. Benefits include consolidation, breaking bulk, processing, and storing goods to reduce costs.
The report on “Liquid Bulk Handling and Storage: Paving the way for India’s Chemical and Energy Needs” is a part of joint endeavour between TATA Strategic Management group (TSMG) ‐ Supply Chain and Logistics Practice and Cerebral Business Research with the objective to highlight key issues faced by bulk liquid storage industry in India and opportunities present in the sector. Bulk liquids can be defined as liquid cargoes which are transported in non‐containerized & nondrum bulk parcels and vessels by sea. Bulk liquids act as a source of raw material or intermediates for a number of end use sectors like automotive, consumer durables, energy and textiles. Changing economic landscape, Government’s thrust on domestic manufacturing, growing population and rise in percapita income is expected to result in growth in end use sectors. This would lead to rise in demand of bulk liquids and create opportunities for storage & handling of larger volumes and wider product portfolio.
This report is being presented in “Indian Bulk Liquid Storage Conference 2015” on the 18th of February 2015. TSMG team is thankful to Cerebral Business Research for providing an opportunity to develop this report.
Warehousing provides storage and consolidation of raw materials, work-in-progress, and finished goods to facilitate supply chain flow. Key functions include transportation consolidation, product mixing, cross-docking, and protecting against contingencies. The economic benefits are reducing overall logistics costs through consolidation and break bulk operations, sorting goods for distribution, seasonal storage, and reverse logistics. Warehouses must consider throughput needs, demand stability, service requirements, and multiple business unit needs in their operations and design.
Warehousing involves storing goods in commercial buildings until they are needed. There are different types of warehouses including private warehouses owned by companies to store their own goods, public warehouses that anyone can store goods in for a fee, and government warehouses. Warehouses must efficiently receive, store, assemble, and ship inventory. Warehouse management systems use technologies like barcodes and RFID to automate operations and provide visibility of inventory. Automating warehouses can reduce costs and improve productivity.
Stores function as buildings for keeping inventories and materials. They are important for ready accessibility of materials, efficient space utilization, and flexibility. Stores receive raw materials, provide storage and preservation, and meet production demands. They aim to minimize obsolescence and surplus through proper codification and stock monitoring. Stores layouts can be fixed, zoned, or random based on supplier, item similarity, size, and frequency of use. Efficiency is measured through stock verification and classification/codification of materials.
1) The document discusses inventory control systems and techniques. It introduces concepts like inventory planning and control, inventory levels, and objectives of inventory management.
2) Key points covered include defining inventories, historical perspectives on inventory management, classification of inventories, and techniques for inventory control like setting control levels and applying relevant methods.
3) The objectives of inventory management are also summarized as maintaining adequate stock levels, minimizing costs, and facilitating production planning.
This document provides an overview of Indian ports and specifically profiles the Visakhapatnam Port Trust. Key points:
- Seaports play an important role in India's economic growth and foreign trade, handling over 80% of international trade.
- Visakhapatnam Port is one of India's 12 major ports, located in Andhra Pradesh. It has deep waters and is naturally protected.
- The port has grown to serve both commercial and industrial needs. It has specialized facilities like an underground LPG storage cavern.
- Visakhapatnam Port has a long history dating back to the 1800s and was formally established in 1933, making it an important trade hub on the east
This document provides an overview of warehousing. It defines warehousing as the storage of goods and preparation for reshipment. It describes the four main types of historical warehouses and notes that warehousing involves receiving, identifying, holding, assembling, and preparing goods to meet demand. The document outlines the types of warehousing including private, public, bonded, and government warehousing. It discusses factors to consider like ownership, location, size, and products. The functions of warehousing are receiving, record preparation, identification, storage, packing, and delivery. Benefits include consolidation, breaking bulk, processing, and storing goods to reduce costs.
The report on “Liquid Bulk Handling and Storage: Paving the way for India’s Chemical and Energy Needs” is a part of joint endeavour between TATA Strategic Management group (TSMG) ‐ Supply Chain and Logistics Practice and Cerebral Business Research with the objective to highlight key issues faced by bulk liquid storage industry in India and opportunities present in the sector. Bulk liquids can be defined as liquid cargoes which are transported in non‐containerized & nondrum bulk parcels and vessels by sea. Bulk liquids act as a source of raw material or intermediates for a number of end use sectors like automotive, consumer durables, energy and textiles. Changing economic landscape, Government’s thrust on domestic manufacturing, growing population and rise in percapita income is expected to result in growth in end use sectors. This would lead to rise in demand of bulk liquids and create opportunities for storage & handling of larger volumes and wider product portfolio.
This report is being presented in “Indian Bulk Liquid Storage Conference 2015” on the 18th of February 2015. TSMG team is thankful to Cerebral Business Research for providing an opportunity to develop this report.
Warehousing provides storage and consolidation of raw materials, work-in-progress, and finished goods to facilitate supply chain flow. Key functions include transportation consolidation, product mixing, cross-docking, and protecting against contingencies. The economic benefits are reducing overall logistics costs through consolidation and break bulk operations, sorting goods for distribution, seasonal storage, and reverse logistics. Warehouses must consider throughput needs, demand stability, service requirements, and multiple business unit needs in their operations and design.
Warehousing involves storing goods in commercial buildings until they are needed. There are different types of warehouses including private warehouses owned by companies to store their own goods, public warehouses that anyone can store goods in for a fee, and government warehouses. Warehouses must efficiently receive, store, assemble, and ship inventory. Warehouse management systems use technologies like barcodes and RFID to automate operations and provide visibility of inventory. Automating warehouses can reduce costs and improve productivity.
Stores function as buildings for keeping inventories and materials. They are important for ready accessibility of materials, efficient space utilization, and flexibility. Stores receive raw materials, provide storage and preservation, and meet production demands. They aim to minimize obsolescence and surplus through proper codification and stock monitoring. Stores layouts can be fixed, zoned, or random based on supplier, item similarity, size, and frequency of use. Efficiency is measured through stock verification and classification/codification of materials.
1) The document discusses inventory control systems and techniques. It introduces concepts like inventory planning and control, inventory levels, and objectives of inventory management.
2) Key points covered include defining inventories, historical perspectives on inventory management, classification of inventories, and techniques for inventory control like setting control levels and applying relevant methods.
3) The objectives of inventory management are also summarized as maintaining adequate stock levels, minimizing costs, and facilitating production planning.
This document discusses warehousing and its role in supply chain management. It provides details on the functions of warehousing such as receiving goods, record preparation, identification, storage, packing, and delivery. It describes the basic storage and movement functions performed by warehouses. The document also discusses the economic and service benefits of warehousing models like consolidation, break bulk, and cross dock warehouses. It covers operating principles of warehouse design and factors to consider in warehouse location selection, including the benefits and drawbacks of centralized and decentralized warehousing approaches.
The document discusses concepts related to Just-in-Time (JIT) and Lean production systems used by Toyota, including minimizing waste. It defines JIT and Lean management, and describes how Toyota focuses on eliminating waste and respecting people. Specific techniques discussed include focused factory networks, group technology cell layout, uniform plant loading, pull-based JIT production, and kanban production control systems.
This document discusses inventory management concepts including reorder point, order quantity, lead time, demand rate, carrying costs, and ordering costs. The optimal order quantity is derived as Qopt = √(2CoD/Cc) where Co is the ordering cost, D is annual demand, and Cc is the annual carrying cost per unit. The reorder point is calculated as R = dL + zσdL where d is the average daily demand, L is the lead time, σd is the standard deviation of daily demand, and z corresponds to the desired service level. Safety stock, which is added to the reorder point, is calculated as zσdL.
An inland container depot (ICD) is a common user facility that handles and temporarily stores import/export containers under customs control. ICDs offer services like receipt/dispatch of cargo, stuffing/stripping containers, customs clearance, and temporary storage. Primary functions of ICDs include customs clearance, transit operations between serving ports and ICD by rail/road, and consolidation/desegregation of less than container load cargo. Benefits of ICDs include acting as concentration points for long-distance cargo, providing customs clearance near production/consumption centers, and issuing through bills of lading. The ICD at Tughlakabad in New Delhi is the largest dry port in South Asia, equipped with modern
The document discusses inventory management concepts including:
1. Types of inventory like raw materials, work in process, and finished goods.
2. Inventory functions like meeting demand, smoothing production, and protecting against stockouts.
3. Effective inventory management requires tracking inventory levels, forecasting demand, and estimating costs of holding, ordering, and shortages.
4. Classification systems help prioritize inventory items for control based on factors like importance, value, or demand pattern.
This document discusses the history and evolution of inventory management. It begins with early merchants keeping handwritten records of products before the Industrial Revolution. Herman Hollerith then invented punch cards in 1889, allowing data to be recorded and read by machines. In the 1930s, Harvard University created a punch card system for businesses to track inventory and orders. However, this was too expensive and slow. In the 1960s, retailers developed barcodes to more efficiently track inventory, which were later standardized in 1974. As computers advanced, inventory management software in warehouses became popular in the 1990s and 2000s. The document then discusses definitions of inventory, types of inventory, purposes for holding inventory, costs associated with inventory, and inventory control and management.
The document discusses logistics and warehouse management. It provides an overview of logistics, lean principles, types of waste, and value stream mapping. It also discusses warehouse selection processes including proposal forms, checklists, negotiations, and automation technologies like conveyor systems, stacker cranes, sorters, and picking systems that can improve warehouse operations. Matrices for measuring transportation and fulfillment performance are also presented.
The document discusses containerization and the potential for India to develop hub and feeder ports. It defines containerization as a system of standardized shipping containers that can be loaded onto ships, trains, and trucks to efficiently transport freight over long distances. It outlines the major players in container shipping globally and some key metrics on India's container traffic and trade volumes. It analyzes the potential for India to establish hub ports at locations like Jawaharlal Nehru Port Trust, Mundra, and Vishakhapatnam that could consolidate container traffic due to their deep drafts and growing hinterland connectivity via rail and road networks. Developing hub and feeder systems in India could reduce transportation costs for exporters
Cross-docking is a supply chain practice that involves unloading goods from inbound vehicles and directly loading them onto outbound vehicles to customers, without storing the goods in a warehouse. This allows goods like food to be transported more quickly and efficiently while reducing costs associated with storage and inventory handling. The key activities in cross-docking are receiving inbound goods, sorting and scanning them by destination, and transferring them via equipment to outbound vehicles. There are two main types: pre-distribution involves pre-decided distribution instructions while post-distribution holds arranging until customers are confirmed. Implementing cross-docking can provide benefits like lower expenses, reduced labor and inventory costs, increased customer satisfaction, and less material handling risks.
This document discusses the key features and importance of sea ports. It outlines that ports are historic commercial hubs that require large investments and provide infrastructure to support national economies. The document describes the evolution of ports from basic cargo facilities to modern integrated hubs. It also outlines different types of ports and approaches to port management, noting the goal of efficiently supporting trade and employment.
Warehousing management System -Shitalinfotech.comShitalinfotech
The document discusses warehousing and warehouse management. It defines a warehouse as where supply chains store goods. It describes different types of warehouses and discusses key warehouse functions like receiving, storage, order picking, and shipping. It also covers important considerations for warehouse operations like facility layout, stock location systems, order picking methods, and the goals of maximizing space utilization and labor efficiency.
An inventory management system was developed for a global manufacturing company to help track parts for products across worldwide suppliers more efficiently. The custom database solution provides a centralized place for multiple buyers to view real-time inventory and delivery status updates. This helps reduce costs and informs decision-making by eliminating the use of spreadsheets and manual tracking processes.
The current state value stream map of a warehouse operation shows material and information flows from suppliers and production to customers. It identifies issues like excess inventory, inaccurate inventory counts, and lack of space that require the warehouse to expand. Applying lean concepts through value stream mapping can help assess the operation, identify waste and improvements, and develop a future state plan to address challenges.
This document provides an overview of the existing systems for incoming raw materials and liquid materials at Henkel Teroson India Ltd. It describes the multi-step process for accepting imported and domestic raw materials which involves unloading, sampling, quality testing, approval and storage. It also outlines the specific process for unloading liquid plasticizers delivered by tankers, which involves physical checks, sampling, quality testing, weighing and storage. The document notes that liquid materials are issued directly to production without store control, representing a potential area for waste.
This document provides an overview of Just-in-Time (JIT) production. It discusses that JIT is a Japanese manufacturing philosophy that aims to produce the right quality and quantity of items, at the right place and time to eliminate waste. The key concepts of JIT are the pull system where items are produced as needed rather than pushed through inventory, and eliminating waste at all stages of production. Kanban cards are also discussed as they signal what and how much to produce to match demand. Benefits of JIT include lower inventory levels, higher quality, and improved productivity. Limitations include the need for reliable suppliers and changes to company policies and procedures.
The document discusses warehouse activities and management. It describes the key functions of warehouses including receiving, identifying, dispatching to storage, holding, picking, marshaling shipments, dispatching shipments, and operating information systems. It also discusses warehouse effectiveness measures like cube utilization, accessibility, stock location, order picking and assembly. The document provides examples and considerations for optimizing warehouse operations.
This document discusses warehouse layout and material flow planning. It provides details on key areas to consider when planning a warehouse layout, including product storage, inbound and outbound operations, value-added processes, and material flow patterns. The goal is to maximize efficiency and space utilization. Key factors discussed include storage requirements, peak vs. average volumes, receiving and shipping needs, picking methods, and value-added services. Common material flow patterns like U-shaped and straight through are also outlined. The overall aim is to design a layout that satisfies the primary warehouse functions in a way that reduces travel time and optimizes operations.
The document discusses inventory control systems and their importance for companies. It analyzes the inventory control system of Capital Land Assets Pvt Ltd. The objectives are to evaluate the effectiveness of their current inventory control system, analyze inventory control methods used, and identify problems in inventory management. The study examines inventory levels, purchase procedures, supplier selection, and identifies benefits of improving the inventory control system such as reduced costs and better resistance to price fluctuations.
Warehouse management and operations. How to increase eirther the performances...Andrea Payaro
An exhaustive presentation about the warehouse process. The model proposed aim to help managers to organize the warehouse in terms of people, material, and infrastructure. This presentation underline some typical mistakes and risk present inside this environment. It is based on the book "Organizare il Magazzino" Ed. Esculapio, at moment available only in Italian.
The document discusses inventory management and control techniques. It defines inventory as including raw materials, work-in-progress, and finished goods. It outlines the objectives of inventory management as ensuring availability of materials when needed while minimizing investment costs. The document also describes different types of inventories and factors that influence inventory levels. It discusses various inventory control techniques used by organizations.
Study on inventory management conducted at reid&taylor(india)ltdProjects Kart
The document provides an introduction and overview of inventory management. It discusses key topics such as:
1) The objectives of inventory management are to specify optimal stock levels to balance product availability with minimizing costs. This involves determining replenishment times and carrying costs.
2) Inventories are typically divided into raw materials, work in process, and finished goods. Effective management of all three is important for production and sales operations.
3) Maintaining inventories involves costs, but they are necessary to facilitate smooth production and meet customer demand given uncertainties in supply and demand. The goal is to determine optimal inventory levels to avoid excess or shortage.
This document discusses warehousing and its role in supply chain management. It provides details on the functions of warehousing such as receiving goods, record preparation, identification, storage, packing, and delivery. It describes the basic storage and movement functions performed by warehouses. The document also discusses the economic and service benefits of warehousing models like consolidation, break bulk, and cross dock warehouses. It covers operating principles of warehouse design and factors to consider in warehouse location selection, including the benefits and drawbacks of centralized and decentralized warehousing approaches.
The document discusses concepts related to Just-in-Time (JIT) and Lean production systems used by Toyota, including minimizing waste. It defines JIT and Lean management, and describes how Toyota focuses on eliminating waste and respecting people. Specific techniques discussed include focused factory networks, group technology cell layout, uniform plant loading, pull-based JIT production, and kanban production control systems.
This document discusses inventory management concepts including reorder point, order quantity, lead time, demand rate, carrying costs, and ordering costs. The optimal order quantity is derived as Qopt = √(2CoD/Cc) where Co is the ordering cost, D is annual demand, and Cc is the annual carrying cost per unit. The reorder point is calculated as R = dL + zσdL where d is the average daily demand, L is the lead time, σd is the standard deviation of daily demand, and z corresponds to the desired service level. Safety stock, which is added to the reorder point, is calculated as zσdL.
An inland container depot (ICD) is a common user facility that handles and temporarily stores import/export containers under customs control. ICDs offer services like receipt/dispatch of cargo, stuffing/stripping containers, customs clearance, and temporary storage. Primary functions of ICDs include customs clearance, transit operations between serving ports and ICD by rail/road, and consolidation/desegregation of less than container load cargo. Benefits of ICDs include acting as concentration points for long-distance cargo, providing customs clearance near production/consumption centers, and issuing through bills of lading. The ICD at Tughlakabad in New Delhi is the largest dry port in South Asia, equipped with modern
The document discusses inventory management concepts including:
1. Types of inventory like raw materials, work in process, and finished goods.
2. Inventory functions like meeting demand, smoothing production, and protecting against stockouts.
3. Effective inventory management requires tracking inventory levels, forecasting demand, and estimating costs of holding, ordering, and shortages.
4. Classification systems help prioritize inventory items for control based on factors like importance, value, or demand pattern.
This document discusses the history and evolution of inventory management. It begins with early merchants keeping handwritten records of products before the Industrial Revolution. Herman Hollerith then invented punch cards in 1889, allowing data to be recorded and read by machines. In the 1930s, Harvard University created a punch card system for businesses to track inventory and orders. However, this was too expensive and slow. In the 1960s, retailers developed barcodes to more efficiently track inventory, which were later standardized in 1974. As computers advanced, inventory management software in warehouses became popular in the 1990s and 2000s. The document then discusses definitions of inventory, types of inventory, purposes for holding inventory, costs associated with inventory, and inventory control and management.
The document discusses logistics and warehouse management. It provides an overview of logistics, lean principles, types of waste, and value stream mapping. It also discusses warehouse selection processes including proposal forms, checklists, negotiations, and automation technologies like conveyor systems, stacker cranes, sorters, and picking systems that can improve warehouse operations. Matrices for measuring transportation and fulfillment performance are also presented.
The document discusses containerization and the potential for India to develop hub and feeder ports. It defines containerization as a system of standardized shipping containers that can be loaded onto ships, trains, and trucks to efficiently transport freight over long distances. It outlines the major players in container shipping globally and some key metrics on India's container traffic and trade volumes. It analyzes the potential for India to establish hub ports at locations like Jawaharlal Nehru Port Trust, Mundra, and Vishakhapatnam that could consolidate container traffic due to their deep drafts and growing hinterland connectivity via rail and road networks. Developing hub and feeder systems in India could reduce transportation costs for exporters
Cross-docking is a supply chain practice that involves unloading goods from inbound vehicles and directly loading them onto outbound vehicles to customers, without storing the goods in a warehouse. This allows goods like food to be transported more quickly and efficiently while reducing costs associated with storage and inventory handling. The key activities in cross-docking are receiving inbound goods, sorting and scanning them by destination, and transferring them via equipment to outbound vehicles. There are two main types: pre-distribution involves pre-decided distribution instructions while post-distribution holds arranging until customers are confirmed. Implementing cross-docking can provide benefits like lower expenses, reduced labor and inventory costs, increased customer satisfaction, and less material handling risks.
This document discusses the key features and importance of sea ports. It outlines that ports are historic commercial hubs that require large investments and provide infrastructure to support national economies. The document describes the evolution of ports from basic cargo facilities to modern integrated hubs. It also outlines different types of ports and approaches to port management, noting the goal of efficiently supporting trade and employment.
Warehousing management System -Shitalinfotech.comShitalinfotech
The document discusses warehousing and warehouse management. It defines a warehouse as where supply chains store goods. It describes different types of warehouses and discusses key warehouse functions like receiving, storage, order picking, and shipping. It also covers important considerations for warehouse operations like facility layout, stock location systems, order picking methods, and the goals of maximizing space utilization and labor efficiency.
An inventory management system was developed for a global manufacturing company to help track parts for products across worldwide suppliers more efficiently. The custom database solution provides a centralized place for multiple buyers to view real-time inventory and delivery status updates. This helps reduce costs and informs decision-making by eliminating the use of spreadsheets and manual tracking processes.
The current state value stream map of a warehouse operation shows material and information flows from suppliers and production to customers. It identifies issues like excess inventory, inaccurate inventory counts, and lack of space that require the warehouse to expand. Applying lean concepts through value stream mapping can help assess the operation, identify waste and improvements, and develop a future state plan to address challenges.
This document provides an overview of the existing systems for incoming raw materials and liquid materials at Henkel Teroson India Ltd. It describes the multi-step process for accepting imported and domestic raw materials which involves unloading, sampling, quality testing, approval and storage. It also outlines the specific process for unloading liquid plasticizers delivered by tankers, which involves physical checks, sampling, quality testing, weighing and storage. The document notes that liquid materials are issued directly to production without store control, representing a potential area for waste.
This document provides an overview of Just-in-Time (JIT) production. It discusses that JIT is a Japanese manufacturing philosophy that aims to produce the right quality and quantity of items, at the right place and time to eliminate waste. The key concepts of JIT are the pull system where items are produced as needed rather than pushed through inventory, and eliminating waste at all stages of production. Kanban cards are also discussed as they signal what and how much to produce to match demand. Benefits of JIT include lower inventory levels, higher quality, and improved productivity. Limitations include the need for reliable suppliers and changes to company policies and procedures.
The document discusses warehouse activities and management. It describes the key functions of warehouses including receiving, identifying, dispatching to storage, holding, picking, marshaling shipments, dispatching shipments, and operating information systems. It also discusses warehouse effectiveness measures like cube utilization, accessibility, stock location, order picking and assembly. The document provides examples and considerations for optimizing warehouse operations.
This document discusses warehouse layout and material flow planning. It provides details on key areas to consider when planning a warehouse layout, including product storage, inbound and outbound operations, value-added processes, and material flow patterns. The goal is to maximize efficiency and space utilization. Key factors discussed include storage requirements, peak vs. average volumes, receiving and shipping needs, picking methods, and value-added services. Common material flow patterns like U-shaped and straight through are also outlined. The overall aim is to design a layout that satisfies the primary warehouse functions in a way that reduces travel time and optimizes operations.
The document discusses inventory control systems and their importance for companies. It analyzes the inventory control system of Capital Land Assets Pvt Ltd. The objectives are to evaluate the effectiveness of their current inventory control system, analyze inventory control methods used, and identify problems in inventory management. The study examines inventory levels, purchase procedures, supplier selection, and identifies benefits of improving the inventory control system such as reduced costs and better resistance to price fluctuations.
Warehouse management and operations. How to increase eirther the performances...Andrea Payaro
An exhaustive presentation about the warehouse process. The model proposed aim to help managers to organize the warehouse in terms of people, material, and infrastructure. This presentation underline some typical mistakes and risk present inside this environment. It is based on the book "Organizare il Magazzino" Ed. Esculapio, at moment available only in Italian.
The document discusses inventory management and control techniques. It defines inventory as including raw materials, work-in-progress, and finished goods. It outlines the objectives of inventory management as ensuring availability of materials when needed while minimizing investment costs. The document also describes different types of inventories and factors that influence inventory levels. It discusses various inventory control techniques used by organizations.
Study on inventory management conducted at reid&taylor(india)ltdProjects Kart
The document provides an introduction and overview of inventory management. It discusses key topics such as:
1) The objectives of inventory management are to specify optimal stock levels to balance product availability with minimizing costs. This involves determining replenishment times and carrying costs.
2) Inventories are typically divided into raw materials, work in process, and finished goods. Effective management of all three is important for production and sales operations.
3) Maintaining inventories involves costs, but they are necessary to facilitate smooth production and meet customer demand given uncertainties in supply and demand. The goal is to determine optimal inventory levels to avoid excess or shortage.
Study on Inventory Management at Reid & Taylor (India) LtdProjects Kart
Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.
This document summarizes a study of inventory management at Spark Fabricators. The objectives of the study were to analyze the composition of inventory, inventory ratios, and inventory management techniques used by the company. The analysis found that inventory is not being managed efficiently and suggested improvements like proper storage of raw materials, market development, maintenance of machines, and development of workers. In conclusion, while Spark Fabricators is successful currently, the study identified areas for improvement to further enhance inventory management practices.
This document summarizes a study of inventory management at Spark Fabricators. The objectives of the study were to analyze the composition of inventory, inventory ratios, and inventory management techniques used by the company. The analysis found that inventory is not being managed efficiently and suggested improvements like proper storage of raw materials, expanding markets, maintaining equipment, and developing workers. In conclusion, while Spark Fabricators is successful currently, the study identified areas for improvement to further enhance inventory management practices.
The Impact of Inventory Management on Manufacuring Industryinventionjournals
Inventory is generally considered to comprise in three main areas which are raw materials, work in progress and finished goods. Where these are held and in what quantities, and how they are managed will vary significantly from one organization to another. The activities of inventory management involves are identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. In order to have clear inventory management, a company should not only focus on logistic management but also on sales and purchase management. Inventory management and control is not only the responsibility of the accounting department and the warehouse, but also the responsibility of the entire organization. Actually, there are many departments involved in the inventory management and control process, such as sales, purchasing, production, logistics and accounting. All these departments must work together in order to achieve effective inventory controls. Inventory includes raw material in progress, finished products, general Suppliers and equipment etc. inventory control may defined as systematic location, storage and Recording of goods in such a way that desired degree of service can be made to the operating shops at minimum ultimate cost. The need for inventory control is to maintain stock of goods and ensure Manufacturing according to the production schedule based on sale requirement and the lowest possible ultimate cost to the customer. Every enterprise needs inventory for smooth running of activities, it serves as link between production and distribution process and there is general time lag between the recognition of a need and its fulfillment. The greater time lag, the higher the requirement for inventory. The unforeseen fluctuation in demand and supply of goods also necessitate the need for inventory as it provides cushion for future price fluctuation. This paper includes the concept of inventory management, nature of inventory management, materials management techniques and inventory accounting
The document discusses production management and operations management. It covers several key topics:
1. Production management involves understanding production systems, identifying dynamics of the management process, using analytical tools, and achieving quality and productivity goals with lower costs.
2. Operations management deals with efficiently planning, scheduling, and controlling manufacturing and service organizations. It aims to optimize processes like material handling and inventory management.
3. Advanced methodologies like CAD, CIM, and order fulfillment systems help improve design, information sharing, throughput, and reduce indirect costs. Operations strategy formulation considers factors like quality, time, flexibility and strategic decision making.
Production and operation management ppt @ bec doms bagalkot Babasab Patil
Production management involves understanding production systems and dynamics to achieve quality, productivity, delivery performance and customer satisfaction at low cost. Advanced methodologies like CAD, CIM, JIT and lean manufacturing help optimize production through integrated information systems. Operations management coordinates production activities like planning, scheduling and quality control to efficiently transform inputs into outputs. Strategic decisions consider strengths, weaknesses and the environment to formulate operations strategies to maximize competitiveness.
This document discusses inventory management and its importance. It defines inventory as unsold goods that businesses hold for sale or raw materials used for manufacturing. Maintaining optimal inventory levels is important for meeting customer demand while minimizing costs associated with excess inventory. Successful inventory management requires balancing inventory levels with costs and benefits. Key aspects of inventory management include counting current stock levels, controlling supply and demand, keeping accurate records, and managing employees involved in the inventory process. The overall goal is to have sufficient inventory available while avoiding issues like overstocking, stockouts, and obsolete goods.
An analysis on inventory management at whirlpool of india limitedjaspreetharpreet
This document is a summer project report submitted by R. Gopal in partial fulfillment of an MBA degree from Sri Manakula Vinayagar Engineering College in Puducherry, India. The report analyzes inventory management practices at Whirlpool of India Limited in Puducherry. It includes an introduction to the topic, a literature review, research methodology, data analysis using inventory management tools like EOQ, safety stock, ABC analysis, and inventory turnover ratio. The report makes recommendations to improve Whirlpool's inventory management.
The document is a project report on customer preferences for smartphones submitted for a master's degree. It discusses several key factors regarding the smartphone industry and customer preferences:
1) The smartphone market is large and growing rapidly as technology advances and prices decrease. Competition is intense as companies try to attract customers.
2) Customers consider factors like price, bundled functions, and new technologies when choosing phones. They also expect improved cameras, downloadable apps, video streaming and internet access.
3) Companies must invest heavily in technology and innovation to remain competitive and attract customers with innovative new phone designs, features and services. Significant capital is required to enter and compete in the smartphone industry.
This document discusses effective inventory management practices and their impact on firm performance. It begins by defining key inventory management terms and outlining the importance of effective inventory practices. It then presents statements of the problem addressed, research questions, and study objectives and hypotheses.
The literature review discusses concepts of inventory management, the need for effective practices, and how inventory levels impact various costs and firm performance measures like return on capital employed and return on investment. The document aims to examine the relationship between inventory management practices and performance for selected consumable goods firms in Nigeria over 10 years.
“Optimization of Inventory regarding Power Tiller”IRJET Journal
This document summarizes an article that proposes using Theory of Constraints (TOC) to optimize inventory management for a power tiller manufacturing plant. It first provides background on inventory management and TOC. It then describes how the study implemented TOC in the supply chain department of a power tiller plant by developing a new concept using Excel sheet buffer management with color coding. This led to better profits and optimization of inventory levels. The literature review discusses previous research on inventory management, including using ABC analysis and demand forecasting to classify inventory importance and how uncertainties can impact inventory levels.
The document discusses inventory management. It defines inventory as goods held for production or sale. Maintaining optimal inventory levels is important for meeting production needs and customer demand while minimizing costs associated with excess inventory. Effective inventory management requires tracking inventory levels, maintaining accurate records, and controlling the supply/demand balance. The goals of inventory management are to have the right level of inventory at the lowest possible cost.
Material management is a scientific technique, concerned with Planning, Organizing & Control of flow of materials, from their initial purchase to destination.
Inventory generally refers to the materials in stock. It is also called the idle resource of an enterprise. Inventories represent those items, which are either stocked for sale or they are in the process of manufacturing or they are in the form of materials, which are yet to be utilized.
7.effectiveness of inventory management in a manufacturing company.docshraddhashukla83
This document provides a project report on the effectiveness of inventory management in a manufacturing company. It includes an introduction outlining the importance of effective inventory management. It also provides background information on the company being studied, GaliaKotwala Technologies Pvt Ltd. The objectives of the study are to examine how ineffective inventory management has impacted productivity, sales, and inventory models used. The report will analyze inventory management practices and provide recommendations.
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This ebook is aimed at helping small and medium businesses in their Purchase Management. The module starts with an introduction to the function, Roles and Responsibilities of executives in the function, Key tools and methodologies, covering ABC Analysis, Various Ordering Techniques like Re-Order Level & Two Bin System and various templates for MIS analysis.
1661351057Unit 5 1057-V1 Material Management.pdfahsansaeed78
This document provides an overview of material management in construction. It describes the scope of material management, including material planning and control, purchasing, and inventory control. It discusses important issues like centralized vs decentralized purchasing and vendor rating. The goal of material management is to coordinate all material flow activities at the lowest possible cost. Effective material management is important for construction company profitability since materials typically account for 60% of total project costs.
Integrated inventory management key to organizational profitability and effic...Alexander Decker
This document discusses integrated inventory management and its importance for organizational profitability and efficient delivery. It defines inventory as stock materials stored for future use in production or sales. Effective inventory management is important for both manufacturers and service organizations to balance costs associated with inventory against needs for production and customer service. The document outlines different types of inventories like raw materials, work-in-progress, spare parts, and finished goods. It also discusses different inventory management strategies like using lot sizes, anticipating seasonal demand changes, and balancing inventory levels with sales and production needs.
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Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.
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LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
2. 16 Nandini Ravichandran
RESEARCH VARIABLES
• To find out the cost involved in the entire inventory management process.
• To ensure that the supply of raw material & finished goods will remain continuous so that production process is
not halted and demands of customers are duly met.
• To minimize carrying cost of inventory.
• To keep investment in inventory at optimum level.
• To reduce the losses of theft, obsolescence & wastage etc.
• To make arrangement for sale of slow moving items.
• To minimize inventory ordering costs.
STATEMENT OF THE PROBLEM
A study of inventory management at leading Automobile Company is undertaken in order to know the inventory
performance and position of the company and to know the strength and weakness and to assess the profitability of the
company. Inventories constitute most significant part of assets of large majority of the companies in India.
Inventory a double edged sword is usually an asset of an organization, if not used properly it will become liability.
It is therefore absolutely very important to manage inventories efficiently and effectively in order to overcome unnecessary
investment. And “To identify the problems/challenges involved in the Inventory Management process at this company.”
OBJECTIVES OF THE RESEARCH
• To analyze the inventory management of this company.
• To conduct ABC and VED Analysis for inventory
• To analyze the entire activities of purchase and stores department
• To suggest the suitable technique to the company to have improved control over the inventory.
LIMITATIONS OF THE RESEARCH
• Time restriction was only 6 weeks for research in the organization.
• The information, which was needed, could not be made public by the organization.
• The study is related to the only one leading Automobile Industry only.
• The finding and suggestion cannot be generalized.
• The study covered a wide concept hence wide collection and coverage of information was not easily possible.
RESEARCH METHODOLOGY
• Primary data- The primary data is collected by personal interviews with officials.
• Secondary data- Files, annual reports, periodicals, manuals and text book. Which have already been passed
through the statistical process are the secondary data used.
3. A Study on Inventory Management with Reference to Leading Automobile Industry 17
• Field work- This was under taken individually to collect information regarding the study by visiting following
sections.
o Stores department- Information regarding stocking of materials receipts and issues to workshops.
Inventory control procedures in various wards inside the department were obtained.
o Accounts department- Remaining all the information was obtained from accounts department through
personal interviews with section officials.
GENERAL PROBLEMS OF INVENTORY
• To maintain a large size inventories for efficient and smooth production and sales operation.
• To maintain only a minimum possible inventory because of inventory holding cost and opportunity cost of funds
invested in inventory.
• Control investment in inventories and keep it at the optimum level.
SCOPE OF THE STUDY
• This study is to find the facts and opinions of inventory management and control at the Automobile plant.
• In accordance with the present trends it aims mainly at finding out the inventory control procedures.
• This study gives the brief information about the inventory management of the
• The study was done by using annual reports, inventory manual…etc.
LITERATURE REVIEW
• According to Lieberman, Marvin B; Demeester, Lieven (1999) in his article titled “Inventory reduction
and productivity growth: Linkages in the Japanese automotive industry” published in Management Science has
said that JIT production suggests a causal link between work-in-progress inventory and manufacturing
productivity. Such a connection has been described in numerous case studies but never tested statistically.
Historical data for 52 Japanese automotive companies are used to evaluate the inventory-productivity relationship.
It is found that firms increased their productivity rank during periods of substantial inventory reduction.
More detailed tests suggest that inventory reductions stimulated gains in productivity.
• Moon, Ilkyeong (2001) The authors Moon & Ilkyeong published their paper in Interfaces titled
“Inventory Management and Production Planning and Scheduling” which is the third version of Decision
Techniques for Stock Control and Manufacturing Preparing released in 1979 and 1985. Bob Pyke became a
coauthor for this version and performed a key part in composing significant up-dates of several sections, such as
those on supply-chain management, multi-echelon stocks, just in time, and ERP (enterprise source planning).
In addition, the writers have included worksheet applications for each section as additional components to
improve the audience and usefulness for learners in business applications, and for experts.
• As per the authors Jackson, Duncan (2004), “TradeBeam and Global eXchange Services Partner to Provide
Collaborative Inventory Management and Interoperability for Automotive Industry”, in Business Wire says that
TradeBeam is a Global Trade Management software and services company providing solutions that streamline
global trading processes for enterprises and their partners. TradeBeam's solutions provide import and export
4. 18 Nandini Ravichandran
compliance, inventory management, shipment tracking, supply chain event management and global trade finance
solutions such as open account and letter of credit management. TradeBeam has over 3000 customers with users
in over 100 countries worldwide.
• Krishna, L Sivarama; Janardhan, G Ranga; Rao, C S P (2009) in their article “Web Integrated Decision Support
System for Machine Scheduling and Inventory Management”, was published in IUP Journal of Operations
Management tells about stock management symbolizes the process of managing stocks of completed products,
semi-finished products and raw elements by a company so as to reduce the total stock cost. The first level contains
the development of a organizing program with make span minimization as the primary objective. The second level
contains the development of the stock management program and creating it with the organizing program.
The third level contains creating the program web permitted, so that it provides the flexibility of assigned creating
choices to your selection makers.
• According to Snehalgavi (2010) in her article titled “It Outsourcing in Indian Automobile Industry”
in Business & Economy says Outsourcing is the act of delegating an organization’s internal activities and to some
extent the right to decisions to the third party (service vendors) as per specified in the contract. Outsourcing is a
tool, in which the vendor is responsible for certain jobs outsourced by a company, in return of a price for the
goods or service provided by it. This option is exercised majorly because to cut operation costs of a company and
focus on its core competencies. It is basically a contract between two companies or concern in which one is
getting its business process outsourced from another company offering such services.
• According to Martin, Benjamin Robert (2010) in his article titled “Findlay Automotive group selects first look for
pre- owned inventory management needs”, in PR Newswire With 15 brands including Toyota, Honda, Chevrolet,
Cadillac, Saturn, Land Rover, Saab and Volkswagen, Findlay will utilize the First Look product suite to guarantee
the right balance between pre-owned inventory and demand, and ensure that trades are given the best appraisals.
In addition to the inventory management tool, and trade analyzer, Findlay will use the First Look Search Engine
to allow its dealers to instantly search more than 30 online marketplaces to identify the best vehicles that meet that
dealerships pre-owned inventory needs.
• As per Koumanakos, Dimitrios P. (2008) in Business Wire titled “Hitachi Automotive Improves Efficiency and
Inventory Control with Geac's System 21” says that Hitachi America, Ltd. has streamlined production,
reduced accounting costs and improved supply chain management using Geac's System21 software solution.
Hitachi Automotive implemented three System21 modules in 1998 - financials, manufacturing, and customer
service and logistics - across its three locations in Kentucky, Detroit and Los Angeles. In September 2002,
the company will renew its maintenance contract with Geac(R) for three years.
• According to Cachon, Gérard P; Olivares, Marcelo (2010), “Drivers of Finished-Goods Inventory in the U.S.
Automobile Industry”, in Management Science says Automobile manufacturers in the U.S. supply chain exhibit
significant differences in their days of supply of finished vehicles. The objective in this research is to measure for
this industry the effect of several factors on inventory holdings. We find that two factors, the number of
dealerships in a manufacturer's distribution network and a manufacturer's production flexibility,
explain essentially all of the difference in finished-goods inventory between Toyota and three other
manufacturers: Chrysler, Ford, and General Motors.
5. A Study on Inventory Management with Reference to Leading Automobile Industry 19
• As per Moozakis, Chuck (2001), “Honda Automates Web Financing -- Network will let dealers apply for funds
online and will eventually support inventory management” in Internet Week says that financing unit of American
Honda Motor Co. next month will begin rolling out its Dealer Financial Information Network (DFIN),
a Web system that will help its 3,000 dealers obtain financing for inventory in real time. Currently,
dealers purchasing inventory from Honda need to apply for financing through American Honda Finance Corp.
or another bank. Typically, approvals take several days.
• According to the aticle “Study of vendor-managed inventory practices in Indian industries” by Borade,
Atul B; Bansod, Satish V. (2010) in Journal of Manufacturing Technology Management says that in the global
economy, vendor-managed inventory (VMI) is gradually becoming an important element of supply
chain management strategy of organizations. Recently, Indian industries, both large and small, have started
adopting VMI for their supply chains. The purpose of this paper is to investigate apparent differences among large
and small industries in terms of objectives, drivers, obstacles and impacts of VMI in Indian context. A survey was
conducted to examine organizational objectives, strategic drivers, obstacles and affected operations pursuant to
VMI adoption.
• According to Matson, Jack E; Matson, Jessica O (2007), in “Just-in-time implementation issues among
automotive suppliers in the southern USA” published in Supply Chain Management speaks that
Purpose - The purpose of this paper is to provide insight into the major supply chain issues of the automotive
manufacturing industry in the southern USA. Design/methodology/approach - This paper is based on the results of
a survey of automotive suppliers in Tennessee and Alabama. The survey focused on supply chain issues and
demographics, specifically on 20 JIT-related problems and 100 company characteristics. Findings - Identifies the
extent of JIT implementation in Tennessee's and Alabama's growing automotive industry and the general
characteristics of the companies that use JIT.
DATA ANALYSIS & DISCUSSIONS
Table 1: Position of Sales and Inventory (in Lakhs)
YEAR Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Average
Sales 1329856 1372081 1215300 787260 666664 1074232.2
Inventory 189602 223063 220890 163824 133001 186076
Source: Secondary Source
Figure 1
6. 20 Nandini Ravichandran
Table 2: Stock Turnover Ratio (in Times) (in Lakhs)
Year
Net
Sales
Average
Inventory
Stock Turnover
Ratio
Mar ' 13 1329856 206332.5 6.45
Mar ' 12 1372081 221976.5 6.18
Mar ' 11 1215300 192357 6.32
Mar ' 10 787260 148412.5 5.30
Mar ' 09 666664 127696 5.22
Source: Secondary Source
Figure 2
Table 3: Stock Holding Ratio (in Days)
Year Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Average
Stock Turnover Ratio (Times) 6.45 6.18 6.32 5.3 5.22 5.894
Stock Holding Ratio (Days) 57 59 58 69 70 62
(Source: Secondary Source)
Figure 3
7. A Study on Inventory Management with Reference to Leading Automobile Industry 21
Table 4: Cost Based Raw Material Turnover Ratio and Holding Days (in Lakhs)
Year
RM
Consumed
Avg. Stock
of RM
Ratio
Holding
Days
Mar ' 13 74,089.20 76538.68 0.97 376
Mar ' 12 78,988.15 86914.8 0.91 401
Mar ' 11 94,841.45 76723.99 1.24 294
Mar ' 10 58,606.54 55931.99 1.05 348
Mar ' 09 53,257.43 47775.16 1.11 329
Source: Secondary Source
Figure 4
Table 5: Work in Progress Turnover and Holding Days
Year
Factory
Cost
Average
Stock of WIP
WIP
Ratio
Holding
Days
Mar ' 13 12,095.13 14662.54 0.82 445
Mar ' 12 17,229.95 21756 0.79 462
Mar ' 11 26,282.03 30469.14 0.86 424
Mar ' 10 34,656.26 22032.25 1.57 232
Mar ' 09 9,408.24 20812.94 0.45 811
Source: Secondary Source
Figure 5
8. 22 Nandini Ravichandran
Table 6: Stores and Spares Turnover Ratio and Holding Days (in Lakhs)
Year Consumed
Average
Stock
Ratio
Holding
Days
Mar ' 13 9143.39 9458.50 0.97 376
Mar ' 12 9773.60 9512.26 1.03 354
Mar ' 11 9250.91 6445.78 1.44 253
Mar ' 10 3640.68 3644.09 1.00 365
Mar ' 09 3647.49 3915.41 0.93 392
Source: Secondary Source
Figure 6
Table 7: Inventory to Sales Ratio
year Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Average
Sales 1329856 1372081 1215300 787260 666664 1074232.2
Inventory 189602 223063 220890 163824 133001 186076
Inventory to Sales Ratio 0.142573331 0.162572764 0.181758 0.2080939 0.1995023 0.17
ISR*100 14.25733312 16.25727636 18.17576 20.8093895 19.9502298 17.32
Source: Secondary Source
Figure 7
Table 8: Operating Cycle Analysis
Year DSI DSO OC
Mar ' 13 57 39 96
Mar ' 12 59 33 92
Mar ' 11 58 35 93
Mar ' 10 69 47 116
Mar ' 09 70 52 122
9. A Study on Inventory Management with Reference to Leading Automobile Industry 23
Source: Primary Source
Figure 8
Table 9: Cash Conversion Cycle Analysis
Year DSI DSO DPO CCC
Mar ' 13 57 39 57 39
Mar ' 12 59 33 70 22
Mar ' 11 58 35 83 10
Mar ' 10 69 47 140 -24
Mar ' 09 70 52 159 -37
Source: Primary Source
Figure 9
According to the firms Policy the ABC analysis includes a D classification also, and the categorization is done as
follows:
Table 10: ABC Analysis
Category Rate (in Rupees)
A >10000
B >2500-9999
C >40-2499
D <40
10. 24 Nandini Ravichandran
Table 11
Material Material Description Val. Stock Val. Stock Rate
Cate
gory
L1050608 3/8"BSFX1" BOLT 14.87 1,487.00 0.01 D
04784433W SHAFT-C 0.01 1 0.01 D
A-U999-G-50111-029 BELT,FLAT,ENDLESS,NYL,540X30X1.5 38 1 38 D
X1101613 MUD SHIELD-FCT 124.8 2 62.4 C
F1241622 DISTANCE PIECE 7,681.35 123 62.45 C
X7477000 ALTERNATOR 218,993.02 97 2,257.66 C
F8320900 POWER STG PUMP - 4018 20,202.56 8 2,525.32 B
F8334000 STARTER MOTOR 3.2KW 2,544.83 1 2,544.83 B
G01GS221002 SPLINE PLUG GAUGE 5,000.00 0.5 10,000.00 B
A9275500 HA4CTI3S -4CTI BS 3 195,191.33 1 195,191.33 A
B7500818 ARTICULATION UNIT COMPLETE 1,809,242.91 9 201,026.99 A
A9800300 FOR EURO4 240kW 6 CYLINDER 8. 2,672,338.16 2 1,336,169.08 A
Source: Primary Source
Figure 10
Table 12: On the Basis of No. of Items
Category No. of Items Value in %
D 5746 28.485029
C 11673 57.867341
B 1864 9.2405314
A 889 4.4070989
20172 100
Source: Primary Source
Figure 9
11. A Study on Inventory Management with Reference to Leading Automobile Industry 25
RESEARCH FINDINGS AND DISCUSSIONS
• During the first four years i.e. in Financial Year 2008-09 to 2011-12. During the above four years the inventory
level increased from 133001 lakhs to 223063 lakhs. It indicates a positive growth rate of 67.71%. But in the
Financial Year 2012-13 inventory level decreased to 189602 lakhs which was about 17.64% of the inventory value
as maintained in the Financial Year 2011-12. The analysis suggests that the company invested more funds in
inventories during the first four years of study period but in the previous year it has invested less i.e.
in year 2012-13.
• The Inventory Turnover Ratio increased from 5.22 to 6.45 with an average of 5.89 this is considered as
unsatisfactory position.
• There has been an increasing trend holding days from 2009- 2011 after which it has again declined and started
increasing from the year 2012.
• The Raw Material Turnover based on Cost ranges from 1.11 to 0.9. The days of Raw Material Inventory Holding
Period gives the time period of holding inventory. It implies high carrying cost. But in the year 2012-2013 the
company has tried to reduce the holding days and it indicates the reduction of carrying cost which proves the
effectiveness of a system of inventory management.
• The Work in Progress Inventory turnover and of inventory holding. We can observe that the firm’s average WIP
turnover ranges from 0.45 to 0.82. The company has to work more on the work in progress as the holding days are
more.
• The firms Stores and Spares Turnover ranges to 0.97 and also the holding days indicate management has to reduce
the holding days to a huge extent.
• Inventory to Sales Ratio: The percentage of inventories the company currently has on hand to support the
current amount of sales. A decreasing Inventory to Sales ratio in the Financial Year 2013 indicates a positive sign.
• Operating Cycle Analysis: It has been decreasing trend in Operating Cycle. There has been a significant
decrease in the operating cycle from 2009 to 2013. The Operating Cycle is same in the year 2011 and 213,
compared to which the financial year 2013 requires a greater working Capital.
• Cash Conversion Cycle Analysis: The firm needs to get goods 57 days before it will actually sell the resulting
goods. The first 57 days of that time, it will not yet have paid its suppliers. But that leaves 0 days (57-57) that it
will have to hold inventory that has already been paid for but that has not yet been sold. Then, after making the
sale it will have to wait for another 39 days before it can collect the cash from its own customers.
The total is 39 days that the company must be able to operate without the cash its operations will eventually
generate.
• ABC Analysis: This firm also has a D Category items apart from AB & C items. It has to buy more of C
Category items rather than AB and D but at the same time it has to keep a close watch on Focused goods that is
high valued goods as it is kept in low volume but a close assistance is given since value of these goods is high.
12. 26 Nandini Ravichandran
RESEARCH RECOMMENDATIONS
• Under the ABC analysis, the management must have more control on C items than that on A & B items, because
C class constitutes more of higher values. There should not be tight control exercised on stock levels, to avoid
deterioration. This is done through maintaining low safety stock levels, continuous check on schedules & ordered
frequently in inventories, in order to avoid over investment of working capital.
• The past data shows increase in inventory the company is expecting more inventories for the future period i.e.
2014. The management is required to maintain the same trend in the forth coming year also.
• The company has to keep the master data that is SAP data timely updated so as there are no unmatched sets and
excess of the unwanted buying of the same time of material parts.
• The inventory turnover ratio indicates whether investment in inventory is within proper limit. It also measures
how quickly inventory is sold. It requires maintaining a high turnover ratio than lower ratio. A high turnover ratio
implies that good inventory management and timely the inventories are being replenished, also reflects efficient
business activities.
• The management of the plant should incorporate TQM (Total Quality Management), particularly in all
departments of production to ensure better sales and reduce the inventory of finished products.
CONCLUSIONS
In this study, a better inventory management will surely be helpful in solving the problems the company is facing
with respect to inventory and will pave way for reducing the huge investment or blocking of money in inventory. Inventory
is the physical asset of a company that can create problem if there is shortage, while in production and also if it’s in excess
even after production. Inventory is constantly changing as quantities are sold and replenished.
Since the Inventory Turnover Ratio shows the increasing trend, there will be more demand for the products in the
future periods. If they could properly implement and follow the norms and techniques of inventory management, they can
enhance the profit with minimum cost. From the study it is predicted that future sales have to be achieved and inventory
level have to be maintained. The company has to periodically review the inventory to avoid production loss. Hence it can
be understood that efficient inventory management can take the company to new heights and inefficient inventory
management can ruin the company.
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