Mahesh 5 Sem - Copy

8/17/2019 Mahesh 5 Sem - Copy

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Inventory Management Karnataka OEM SparesPvt.Ltd, Gadag

CHAPTER I

E!EC"TI#E

S"MMAR$

A.S.S%s Co&&ege o' ()s*ness Adm*n*strat*on, Gadag.Page 1


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CHAPTER - I

EXECUTIVE SUMMARY

M|s Karnataka OEM &Spares Pvt. Ltd was established in 2005 Gadag as a s!all

S"ale ind#str$ %r !an#%a"t#ring % 'ensile and (igh 'ensile )asteners re*#ired b$

(iten )asteners Private Ltd. 'his is the !ther "n"ern. +nd ,SO -00/2000 "erti%ied

"!pan$.

'he "!pan$ !an#%a"t#res a wide range % tensile & (igh 'ensile )asteners as

per atinal and ,nternatinal Standards and als "aters t the spe"i%i" re*#ire!ent %

#r 1#st!ers as per their spe"i%i"atin.

Keeping % gds is als a t$pe % !anage!ent. 3henever re*#ire!ents "!es

%r! the prd#"tin depart!ent prviding % thse re*#ired !aterials in a prper

!anner & prviding thse at the spe"i%ied perid is the !ain !tt % ph$si"al

inventr$ !anage!ent.

PROJECT TITLE

+ St#d$ n ,nventr$ Manage!ent n Karnataka OEM& Spares Pvt. Ltd Gadag.

NEED FOR THE STUDY

'he pr4e"t wrk is "!p#lsr$ !ade b$ Karnataka niversit$ 6harwad %r the

77+ st#dents %r the %#l%il!ent % the re*#ire!ent % 77+ degree as part % #r

"#rri"#l#!.

+nd als t be"!e a s#nd persn and get the pra"ti"al knwledge ab#t the

ind#str$ st#d$ n inventr$ !anage!ent "arried in the rgani8atin.



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OBJECTIVES OF THE STUDY

' knw the rgani8atinal hierar"h$ and respnsibilit$ ties with their

designatin.

' knw the wrking "nditin % the rgani8atin.

' set e9psed t the steel ind#str$ & their glbal trends.

' knw the servi"es rendered b$ the rgani8atin.

' st#d$ the ad!inistrative set#p % the rgani8atin.

' st#d$ the inventr$ !anage!ent based n the ratis.

' st#d$ the di%%erent aspe"ts % ,nventr$ Manage!ent. ' st#d$ the inventr$ !anage!ent and its e%%e"tive "ntrl thr#gh vari#s

te"hni*#es.

' s#ggest the !eas#res %r i!prving the inventr$ level.

SCOPE OF THE STUDY

,nventr$ !anage!ent being a ver$ i!prtant "n"ept in all the "!panies

having a vid "verage %ten "alls %r the !anagerial attentin. ,n the !dern ti!es

inventr$ !anage!ent has be"!e the integral part % the all "!panies. S all the

%ir!s give spe"ial i!prtan"e %r inventr$ !anage!ent. 'he !a4r b4e"tive % the

st#d$ is t e9a!ine the e%%e"tiveness % inventr$ !anage!ent s$ste! adpted b$ an

ind#str$: the st#d$ !ainl$ %"#ses n the te"hni*#es #sed b$ the "!pan$ t "ntrl the

inventr$.

METHODOLOGY

Primary Data

. ,ntera"tin with persnnel % the "!pan$

2. 6ire"t Observatin % ,nventr$

Se!"#ary Data

. '#rnver State!ents

2. Mnthl$ ,nventr$ State!ents



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;. 1!pan$


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CHAPTER + II

I-"STR$ PROILE



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CHAPTER - II

INDUSTRY PROFILE

+n ind#strial %astener "!prises a ver$ wide range % ite!s like n#ts and blts

washers st#ds nails et". #ts and blts "nsist a !a4r link in the %a!il$ % ind#strial

%asteners and are #sed b$ ever$ ind#str$. 7lt is a pie"e % !etal rd whse ne end is

#nsettled and ther end is threaded. #t is the ite! whi"h rlls n these threads. #t

and blts are available in vari#s shapes designs and si8es.

#ts and blts are #sed %r %astening p#rpse in ind#stries where the repla"e!ent %

pie"es and the parts is ne"essar$. 'here are !an$ ind#stries prd#"ing these n#ts and

blts % vari#s si8es b#t the de!and t is in"reasing as well as the raw !aterial %r

the prd#"t is easil$ and indigen#sl$ available. 'he !ain raw !aterial is !ild steel

wire "il@rd % re*#ired dia!eter. 'he "!psitin % !aterials "ntrls the *#alit$ %

the blts and n#ts.

'he re"!!ended "!psitin %r n#ts and blts raw !aterial is given as #nder/

1arbn 0.22 t 0.2;A

Phsphr#s 0.B0A

Manganese 0.;- t 0.C0A

S#lph#r 0.50A

#ts and blts are "lassi%ied b$ tw wa$s/ iD 'heir #ses iiD Shape % head.

,n ter!s % #se n#ts and blts are % several t$pes/

Larger dia blts !a"hine blts stand blts 4int blts %#ndatin blts and n#ts et". in

ter!s % shape blt and n#ts are "lassi%ied b$ head shape like he9agnal head s*#are

head r#nd head pan head tr#ss head et".



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Mar%et P!te"tia&

'he de!and % n#ts and blts is in%l#en"ed b$ the %llwing %a"trs/

aD 'ransprtatin ind#stries


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3hile !an#%a"t#ring n#ts the he9agnal rd % desired si8e is pr"#red and the

n#ts are "#t n the a#t!ati" n#tF"#tting !a"hine. 1#tted n#ts blanks are drilled and

tapped n the n#tFtapping !a"hine. )inall$ these are deb#rred in the plishing barrel.

*)a&ity C!"tr!& a"# Sta"#ar#'

'he 7#rea# % ,ndian Standards has laid dwn the %llwing *#alit$ standards %r M.S.

and (igh tensile %asteners s#"h as 7lts and #ts/

,S ;C; / --2

,S ;C / --B

,S B20C / -

Prd#"tin 1apa"it$/

H#antit$ Ial#e J,n


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Pr!e'' F&!+ C,art M.S. B!&t'/Mild steel rd

7lt "#tting

(ead !aking

(ead tri!!ing

'hread rlling

Plishing

Stre@dispat"h

Pr!e'' F&!+ C,art H.T. B!&t'/Mild steel rd

3ire drawing

7lt "#tting

)rging

'ri!!ing

'hreading

(eat treat!ent J001 -001D

'e!pering JB001 5001D

Plating@1ating

Stre@despat"h C



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CHAPTER + IIICOMPA$ PROILE



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CHAPTER - III

COMPANY PROFILE

INTRODUCTION

M|s Karnataka OEM &Spares Pvt. Ltd was established in 2005 Gadag as a s!all

S"ale ind#str$ %r !an#%a"t#ring % 'ensile and (igh 'ensile )asteners re*#ired b$

(iten )asteres Private Ltd. 'his is the !ther "n"ern. +nd ,SO -00/2000 "erti%ied

"!pan$.

'he "!pan$ !an#%a"t#res a wide range % tensile & (igh 'ensile )asteners as

per atinal and ,nternatinal Standards and als "aters t the spe"i%i" re*#ire!ent %

#r 1#st!ers as per their spe"i%i"atin.

O#r !an#%a"t#ring nit at Plt n CB has all the !an#%a"t#ring %a"ilities t

!an#%a"t#re #ts.

O#r Man#%a"t#ring nit at Plt n - & 20 has all the !an#%a"t#ring %a"ilities

t !an#%a"t#re e9ter nall$ threaded %asteners. 1!pan$ has established and !aintaining

H#alit$ Manage!ent s$ste! in lines with ,SO -00/2000 standard.

Ever$ !e!ber % the rgani8atin is "!!itted t %llw the pr"ess appra"h

and i!prve #pn the *#alit$ !anage!ent s$ste! and enhan"e "#st!er satis%a"tin.

1!pan$ e!pl$s !re than 00 n#!bers % peple wh are *#ali%ied & trained in

their a"tivities. 1!pan$ has e9"ellent tra"k re"rd with the %inan"ial instit#tins &

7anks %r the i!ple!entatin % an$ new pr4e"ts & e9pansin. S#pplier? S#ppliers %

!aterials 1!pnents and Servi"e t Karnataka OEM & Spares Pvt. Ltd. 1#st!er/

(iten )asteners Private Ltd. S#ppliers % tensile and high tensile %asteners. +ll

rgani8atins re*#iring tensile and high tensile %asteners and %%ering lab#r rders.

THE COMPANY

K+


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S#ppliers t Karnataka OEM Spares private li!ited


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NATURE OF THE BUSSINESS CARRIED

PROJECT

'he pr4e"t is %r e9pansin % !an#%a"t#ring a"tivit$ %r +n"hr 7lts & 'F7lts %r enhan"ed re*#ire!ent % di%%erent Metr


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VISION1 MISSION 2 *UALITY POLICY

VISION$

' a"hieve & dispat"h % ne la"k +n"hr 7lt with #t & One la"k 'Fhead 7ltwith #t & washer per Mnth.

MISSION$

Missin is t !an#%a"t#re *#alit$ #t 7lt prd#"ts %r the pr"ess ind#str$

wrldwide. 3e e!bra"e the "n"ept % ttal *#alit$ and peple invlve!ent t enhan"e

'tal 1#st!er Satis%a"tin and "!!it t !aintain this standard % e9"ellen"e

thr#gh "ntin#al i!prve!ents and #se % *#alit$ !anage!ent s$ste!.

*UALITY POLICY$

,t is ens#red that the *#alit$ pli"$ is apprpriate t the p#rpse % the

rgani8atin Jb#siness b4e"tivesD and in"l#des a "!!it!ent t "!pl$ with

re*#ire!ents and "ntin#all$ i!prve e%%e"tiveness % HMS. 'he "ntin#ing s#itabilit$

% *#alit$ pli"$ and establishing *#alit$ b4e"tives and its review are "arried #t in a

!anage!ent review !eeting % senir e9e"#tives.

3e are "!!itted t !an#%a"t#re and s#ppl$ tensile and high tensile %asteners as

per "#st!er re*#ire!ents b$ #tili8ing the rgani8atinal and h#!an res#r"es

e%%e"tivel$ and e%%i"ientl$.



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O3NERSHIP PATTERN$

PROMOTERS$

'he #nit was %r!ed as Private Li!ited 1!pan$ and its pr!ters arete"hni"all$ *#ali%ied alng with a gd e9perien"e % being ass"iated with vari#s

ther "!panies. 'he %#nder 6ire"tr Mr. 7. Saik#!ar was e!pl$ed at M@s. Larsen &

'#rb and was handling p#r"hase %#n"tin and respnsibilit$ in Karnataka. (e has als

been instr#!ental in establishing the "#st!er netwrk %r the "!pan$ with his ri"h

"!!er"ial ba"kgr#nd.

7ard % 6ire"trs/

Ø Mr.7. Saik#!ar

Ø Mr. I.


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THE PRODUCT PROFILE

(igh 'ensile %asteners are the !a4r re*#ire!ents in an$ engineering ind#str$

and have a wide range % appli"atins. 3ith in"reasing stress n "st reliabilit$ and

h#!an sa%et$ there is a trans%r!atin %r! #se % !ild steel %asteners t high tensile

%asteners. 'he per!#tatin and "!binatin in the prd#"t prvide a ver$ large !arket

%r s!all ind#stries that are e*#ipped t prd#"e large varieties in s!all *#antities.

3ith in"rease in prd#"tin % a#t!biles the high %asteners ind#str$ is likel$

t e9pand !#lti %ld and the de!and %r *#alit$ %asteners is alwa$s n in"rease. 'he

"!pan$ has established all the re*#ired !an#%a"t#ring and testing %a"ilities ver a

perid % ti!e and it is in a psitin t !an#%a"t#re high tensile %asteners %r! dia!eter M #p t M00 as per vari#s natinal & ,nternatinal spe"i%i"atins.

'he "!pan$ als spe"iali8es in !an#%a"t#ring spe"ial %asteners "#st! b#ilt t

the "#st!er spe"i%i"atin. 'he "!pan$ prpses t e9pand its !an#%a"t#ring a"tivities

t prd#"e %asteners %r high 'e!perat#re appli"atins n#"lear appli"atin Metr

pr4e"ts and 3ind Mill pr4e"ts and als %r 'her!al pwer plants.



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PRODUCT RANGE

E'E


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E9tr#sin

(eat 'reat!ent

I"'5eti!" a"# Te'ti"4 Fai&itie'

T,e (!&&!+i"4 are '!me !( t,e im5!rta"t (ai&itie' a6ai&a7&e$

,n additin t the "nventinal !an#%a"t#ring %a"ilities % t#rning Milling

Grinding 'hread


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U

U

U

U

U

U

U

U

U

DEPARTMENTAL STUDY

PRODUCTION AND ASSEMBLY DEPARTMENT

PRODUCTION

'he prd#"tin dept ens#res that prd#"tin pr"ess is identi%ied planned and "arried

#t #nder "ntrlled "nditins in a""rdan"e with !nthl$ !an#%a"t#ring plan. 'he


1#tting

1ha!pering

)rging

Grit blasting

E9"#rsins

Grinding


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b4e"tive % this dept is t i!prve the prd#"tivit$ t red#"e the "st % prd#"tin

with#t an$ "!pr!ise n *#alit$ and t !an#%a"t#re nn de%e"tive *#alit$ prd#"ts

b$ training the peple.

OBJECTIVES

Prd#"tivit$ i!prve!ent.

' red#"e the "st with#t "!pr!ise n *#alit$.

' !an#%a"t#re nn de%e"tive prd#"t b$ training the peple.

PRODUCTION PROCESS

'he prd#"tin pr"ess is "arried #t in the %llwing ; steps

• 1ntrl % "#st!ers s#pplied prd#"t.

• Pr"ess "ntrl.

Pr!#)ti!" 5&a""i"4 a"# 5r!e''

S"pe/ 'his pr"ed#re des"ribes hw the prd#"ts !an#%a"t#red.

P#rpse/ ' ens#re that Prd#"ts are !an#%a"t#red in "ntrlled "nditin as per the

spe"i%i"atin


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C. Start the peratins as per the 3rk ,nstr#"tins.

. O%%er the %irst Pie"e %r ,nspe"tin.

. +%ter 1learan"e %r! the inspe"tin start the Prd#"tin.

-. ,n between petrlling inspe"tin is "arried #t b$ H+ depart!ent.

0.


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FUNCTIONS OF ADMINIDTRATION DEPARTMENT H.R/

• 'raining

•


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Merit rati"4 'y'tem$

O7:eti6e'$

' ens#re the per%r!an"e % the s#pplier with regards t H#alit$6eliver$ & Servi"e.

S!5e

'hese ratings are appli"able t all the S#ppliers like s#bF"ntra"trs vendrs traders &

s#ppliers.

Re'5!"'i7i&ity

Planning & P#r"hase ,n "harge@Planning +ssistant is respnsible rating t s#pplier.

Planning & P#r"hase ,n "harge is respnsible t "arr$ #t the s#pplier rating withassistan"e % planning assistant.

De&i6ery rati"4

6


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Ø H+ depart!ent wrk instr#"tin.

STAFF

#!ber and t$pes % persnnel within the rgani8atin.

#!ber % e!pl$ees/+bve 50.

'he "!pan$ "nsiders the e!pl$ees as ne % the !a4r res#r"e.the skills %

the e!pl$ees are "nstantl$ i!prved thr#gh vari#s training prgra!!es.

'he "!pan$ rgani8es reg#lar 6epart!ental !eetings M< !eeting with the

!e!bers wherein the s#ggestins and %eedba"k % the !e!bers are dis"#ssed.

SHARED VALUE

G#iding "n"epts %#nda!ental ideas ar#nd whi"h a b#siness is b#ilt it is generall$

si!ple #s#all$ stated at abstra"t levelhave great !eaning inside the rgani8atin even

th#gh #tsiders !a$ nt see r #nderstand the!

S0ILL

Skills re%er t the %a"t that e!pl$ees have the skills needed t "arr$ #t the "!pan$?s

strateg$. 'raining and 6evelp!ent ens#ring peple knw hw t d their 4bs and

sta$ #p t date with the latest te"hni*#es.

ACCOUNTS DEPARTMENT

+ll transa"tins related t


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bD Preparatin % ann#al b#dgets % )#nd %lw State!ents.r ever$ !nth & s#b!itting

the vari#s anal$sis reprts.

"D Preparatin % 1ash %lw

Re'5!"'i7i&itie'

Ø )inali8atin and a#dit % a""#nts

Ø 1!plian"e % ta9 laws

Ø Plan and arrange %#nds %r shrtFter! and lng ter!

Ø ,!ple!entatin and "!plian"e % ind#strial and lab#r stat#tr$ and

reg#latr$ laws "n"erned t the b#siness.

Ø 1nd#"ting bard !eetings

Ø Prepare and s#b!it reprts t dire"trs

Ø ' ens#re n de%a#lts ""#r #nder an$ laws

Ø 1all bard and sharehlders !eetings.

SALES 2 PLANNING DEPARTMENT

Marketing is a s"ial pr"ess b$ whi"h individ#als and gr#ps btain what the$ need

and want thr#gh "reating %%ering and %reel$ e9"hanging prd#"ts and servi"es %

val#e with thers.

R!&e !( mar%eti"4 ma"a4er

. ' "lle"t in%r!atin %r sale %re"asting.

2. Pri"ing the prd#"ts as per the de!and.

;. ' appint new dealers and distrib#trs



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F)"ti!"' !( 'a&e' #e5artme"t

. Sales %%i"er is respnsible %r selling the prd#"ts.

2. ' lk a%ter dispat"h % the rdered prd#"ts.

;. Se"ndar$ sales are taken prperl$.

s"ial t keep ne respnsible persn wh handle the !arketing % the prd#"ts

na!ed as !arketing !anager wh %llw the instr#"tins % the !anage!ent. +s we

knw the ind#str$ is prd#"ing prd#"ts whi"h are selling int the !arket s the

"!pan$.

'he sales and planning depart!ent in"l#des !ainl$ tw s#b depart!ents the$ are/F

Pa"king and 6ispat"h ,n "harge

Stres ,n "harge

PAC0ING AND DISPATCH DEPARTMENT



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O7:eti6e' - T,e mai" !7:eti6e !( t,e 5a%i"4 i' t! arry t,e 5r!5er 5a%i"4

7e(!re #i'5at,.

S!5e F S"pe % pa"king is pa"king % valves & valve spares seawrth$ appli"able.

Re'5!"'i7i&ity

Sales & planning %%i"er will st#d$ the pa"king slip thr#gh with respe"t t wrk rder.

Sales &planning %%i"er de"ided the si8e % the b9 depending n *#antit$. Sales &

planning %%i"er will "lle"t the prd#"ts n#!bers %r! *#alit$ ass#ran"e depart!ent

against pa"king slip. prd#"ts will be segregating as per pa"king slip and sales &

planning %%i"er will ens#re that all prd#"ts have #ndergne %inal inspe"tin be%re

pa"king the$ are prperl$ identi%$ with respe"t t p#r"hase rder. 3hile "he"king the

pa"king the %llwing details are taken "are.

. Pa"king b9 !arkings.

2. 6estinatin b9 !arkings.

;. Esti!atin % address.

B. a!e % the transprter

5. ,denti%i"atin n#!bers Jinvi"e n#!berD.

C. S#pplier n#!ber.

. #!ber % b9es.

STORES DEPARTMENT



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I"tr!#)ti!"$

Stres depart!ent hlds the entire inventr$ re*#ired in the Organi8atin.

F)"ti!"'


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PRODUCTION DEPARTMENT

Prd#"tin !anage!ent re%ers t the appli"atin % !anage!ent prin"iples t the prd#"tin

%#n"tin in a %a"tr$. ,n ther wrds prd#"tin !anage!ent invlves appli"atin % planning

rgani8atin dire"ting and "ntrlling the prd#"tin pr"ess.

+ wellFrgani8ed prd#"tin %#n"tins "an %%er "!petitive advantage t a %ir! in the

%llwing area.

Ø (igher *#alit$.

Ø Mre inventr$ t#rns

Ø Shrter new prd#"tins lead ti!e.

Ø Greater %le9ibilit$

Ø Shrter !an#%a"t#ring lead ti!e

Ø 7etter "#st!er satis%a"tin

Ø


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PURCHASE DEPARTMENT

I"tr!#)ti!"

P#r"hase depart!ent?s heads p#r"hasing are dividing int tw. One %r p#r"hase %

"apital assets and anther is reg#lar p#r"hase.

'his is als ne % the i!prtant depart!ents in this depart!ent the$ p#r"hase the

!aterials whi"h re*#ire %r prd#"tin and als %r the %%i"e wrk. ,ts !ain %#n"tin is

p#r"hasing the !aterials. ,t re"eives the re*#isitin letter %r! the stre depart!ent t

knw what t$pe % !aterials is re*#ired. +%ter re"eiving this letter the$ !ake en*#ir$

and then pla"e the rder.

P#r"hasing re%ers t the a"t % b#$ing an ite! b$ pri"e. P#r"hasing !eans

pr"#re!ent % gds and servi"es %r! s!e #tside agen"ies the b4e"t % p#r"hasing

is t s#ppl$ !aterials se!i %inished gds et". t the prd#"tin depart!ent

O7:eti6e

' eval#ate & sele"t S#bF1ntra"trs n the basis % their liabilit$ t !eet spe"i%ied

re*#ire!ent t !aintain re"rds % apprved S#b 1ntra"trs and "ntrl t ens#re

*#alit$ re*#ire!ent are %#l%illed "nsistentl$.

Pr!e#)re

Ø Sele"tin % S#bF1ntra"trs r *#tatin.

Ø


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?. Re&ea'e !( P)r,a'e !r#er

)r releasing rder the p#r"hase depart!ent gets the %eedba"k %r! the

planning depart!ent. s#all$ the there !nths % st"k is !entined in the stres

depart!ent.

*UALITY ASSURANCE DEPARTMENT

'he !ain %#n"tin % the H+ depart!ent is t "he"k whether the raw !aterials

p#r"hased and gds !an#%a"t#red are better *#alit$ r nt.

(ere *#alit$ !eans the ttalit$ % the %eat#res and "hara"teristi"s % a prd#"ts r

servi"es the *#alit$ pli"$ % this depart!ent is t be wrld "lass leader in

designing and !an#%a"t#ring *#alit$ val#e % prd#"ts %r the pr"ess ind#str$

wrldwide.

CONSULTANTS 8 INSPECTION AGENCIES

7#r#ea# Ieritas

Engineers ,ndia Li!ited

#"lear Pwer 1rpratin % ,ndia Li!ited

Pr4e"ts and 6evelp!ent ,ndia Li!ited

'ata 1ns#lting Engineers

'I ,ndia Private Li!ited.



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S3OT ANALYSIS

STRENGTHS

'he "!pan$ has e9"ellent netwrk whi"h prvide gd *#alit$ prd#"t with

!ini!#! ti!e.

,SO standard helps t !arketing in ,nternatinal level.

'he gd (< s$ste! is their like Mtivatin 'raining t new e!pl$ee et".

)eedFba"k in%r!atin is prvided t all e!pl$ees.

7ene%its prvided b$ gvern!ent t 00A EO nit. 'he "!pan$ has #nit$ % tea! wrkgd salar$ t wrkers.


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CHAPTER I#

THEORTICAL

REAME/ORK



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CHAPTER @ IV

THEORTICAL FREAME3OR0

INVENTORY MANAGEMENT

P,y'ia& I"6e"t!ry Ma"a4eme"t

Mea"i"4$Keeping % gds is als a t$pe % !anage!ent. 3henever re*#ire!ents "!es

%r! the prd#"tin depart!ent prviding % thse re*#ired !aterials in a prper

!anner & prviding thse at the spe"i%ied perid is the !ain !tt % ph$si"al

inventr$ !anage!ent.

Be"e(it' (!r H!i"4 I"6e"t!ry

7ene%its in P#r"hasingØ 7ene%its in Prd#"tin

Ø 7ene%its in 3rkFinFpr"ess

Ø 7ene%its in Sales

O7:eti6e' !( I"6e"t!ry Ma"a4eme"ts#all$ the "!pan$ is %a"ed with the %llwing "n%li"ting b4e"tives in the

area % inventr$ !anage!ent/

. ' "arr$ !a9i!#! inventr$ in rder t %a"ilitate e%%i"ient and s!th

prd#"tin and sales peratins.

2. ' !ini!i8e invest!ent in inventr$ %r !a9i!i8e the pr%itabilit$.

7th verFinvest!ent and #nder invest!ent is #ndesirable as bth invlve the

"nse*#en"es.

T,e !6er i"6e'tme"t i"6!&6e' t,e !"'e>)e"e' &i%ei. nne"essar$ bl"king % %#nds in inventr$ and hen"e lss % pr%it.

ii. E9"essive strage and ins#ran"e "st.

iii.


36/56


i. ,% s#%%i"ient st"k % raw !aterials and wrk in pr"ess is nt available it !a$

res#lt int %re*#ent interr#ptins in prd#"tin.

ii. ,% s#%%i"ient st"k % %inished gds is nt available it !a$ nt be pssible %r the

"!pan$ t serve the "#st!ers prperl$ and the$ !a$ shi%t t the "!petitrs.

'h#s it "an be said the b4e"tive % inventr$ !anage!ent is t !ini!i8e

the invest!ent in inventr$ with#t a%%e"ting prd#"tin r sales peratins.

,nventr$ as a "#rrent asset di%%ers %r! the ther "#rrent assets be"a#se

nl$ %inan"ial !anagers are nt invlved.


37/56


inventries at the "lse % the a""#nting perid. 'he sele"tin % a s#itable !ethd

ass#!es signi%i"an"e in view % the %a"t that it has a dire"t bearing n the "st % gds

sld and "nse*#entl$ n pr%it. 'here%re the !ethd sh#ld be sele"ted in the light %

prbable e%%e"ts n pr%it ver a perid % $ears.N!te$ ,t !a$ nt be #t % pla"e t !entin that n"e a !ethd is sele"ted it !#st be #sed

"nsistentl$ and "annt be "hanged %r! $ear t $ear.

'he dis"#ssin here % the !ethds t val#e inventr$ sh#ld there%re be

viewed in this perspe"tive.

Fir't i" Fir't O)t FIFO/ Met,!#$'he ),)O !ethd % val#atin % inventr$ is based n the ass#!ptin that

the inventr$ is "ns#!ed in "hrnlgi"al rder that is thse re"eived %irst are

iss#ed @"ns#!ed %irst and val#e %i9ed a""rdingl$. 'he !erit % ),)O Methd is

that the ph$si"al %lw % !aterials the %lw % "st.

La't I" Fir't O)t LIFO/ Met,!#$

nder the L,)O !ethd the "st % gds sld and the val#e % "lsing

inventr$ "an be deter!ined nl$ a%ter the %inal lt % the $ear has been re"eived. 'his

is be"a#se % the ass#!ptin #nderl$ing the val#atin % inventr$ a""rding t

this !ethd. +s na!e L,)O s#ggests the #se % inventr$ is val#ed n the basis % the

inverse se*#en"e % re"eipts. Sin"e the L,)O !ethd ass#!es that the latest selling

pri"e@"#rrent reven#es. 'he !at"hing % "#rrent "st with "#rrent reven#es is essen"e %

the L,)O !ethd.

A6era4e C!'t Met,!#$

+""rding t average "st !ethd ea"h p#r"hase is added t inventr$ and an

average "st deter!ined. Materials are "harged int "st % sales at this average

#ntil anther lt is re"eived when a new average #nit inventr$ "st is "al"#lated.

te/ 'here are s !an$ ther than these abve !ethds b#t !st wide #se%#ll$

!ethds are these three s here we dis"#ssed thse three !ethds nl$.

=/ Ba'e# !" C!'t A"a&y'i'$

C!'t !( H!i"4 I"6e"t!ry$

One perating b4e"tive % inventr$ !anage!ent is t !ini!i8e "st.

E9"l#ding the "st % !er"handise the "sts ass"iated with inventr$ %all int tw

basi" "ategries/ JiD rdering r a"*#isitin r setF#p "sts and JiiD "arr$ing "sts these



38/56


"sts are i!prtant ele!ents % the pti!#! level % inventr$ de"isins.

=/ Or#eri"4 !'t$

,t is the %i9ed "st % pla"ing & re"eiving an inventr$ rder. Like JaD preparing a

p#r"hase rder r re*#isitin %r! & JbD re"eiving inspe"ting & rerdering gds

re"eived t ens#re bth *#antit$ & *#alit$. ,t is als "alled as set#p "st.

?/ Carryi"4 !'t$'he se"nd brad "ategr$ % "sts ass"iated with inventr$ is the

"arr$ing "sts. 'he$ are invlved in !aintaining r "arr$ing inventr$. 'he "st %

hlding inventr$ !a$ be divided int tw "ategries.

=. T,!'e t,at ari'e #)e t! t,e 't!ri"4 !( i"6e"t!ry/ 'he !ain

"!pnents % this "ategr$ % "arr$ing "sts are JiD strage "st that is

depre"iatin ins#ran"e !aintenan"e % the b#ilding and #tilities JiiD ins#ran"e

% inventr$ against %ire and the%t: JiiiD deteriratin in inventr$ be"a#se %

pil%erage %ire te"hni"al bsles"en"e st$le bsles"en"e and pri"e

de"line: JivD serving "sts s#"h as labr %r handling inventr$ "leri"al and

a""#nting "sts.?. T,e !55!rt)"ity !'t !( ()"#'$ 'his "nsists % e9penses in raising %#nds

Jinterest n "apitalD t %inan"e the a"*#isitin % inventr$. ,% %#nds were nt

l"ked #p in inventr$ the$ w#ld have earned a ret#rn. 'his is the pprt#nit$

"st % %#nds r the %inan"ial "st "!pnent % the "st.

Li"%i"4 !( C!'t' 7a'e# a"# P,y'ia& 7a'e# I"6e"t!ry Ma"a4eme"t

'he "arr$ing "sts and the inventr$ si8e are psitivel$ related and !ve in the

sa!e dire"tin. ,% the level % inventr$ in"reases the "arr$ing "sts als in"rease and

vi"eFversa.

T!ta& C!'t$

'he s#! % inventr$ in"reases the "arr$ing "sts represent the ttal "st %

inventr$. 'his "!pared with the bene%its arising #t % inventr$ t deter!ine the

pti!#! level % inventr$.



39/56


E!"!mi Or#er *)a"tity EO*/$

(w !#"h inventr$ sh#ld be b#ght in a lt] Sh#ld the *#antit$ t be p#r"hased

be large r s!all] Sh#ld the re*#ire!ent % !aterials d#ring a given perid Jsa$ C !nths

r $earD be a"*#ired in ne lt r sh#ld it be re*#ired in install!ents r in several s!all

lts] S#"h inventr$ prble!s are "alled rder *#antit$ prble!s.

'here%re EOH is that level % inventr$ at whi"h ttal "st % inventr$ "!prising

rdering "st & "arr$ing "sts in the !ini!#!.

F!rm)&ae (!r a&)&ati"4 E!"!mi Or#er *)a"tity$

2+

EOH X

1

3here

+X+nn#al *#antit$

OX Ordering "st

1X 1arr$ing "st

A'')m5ti!"'$. 'he %ir! knws with "ertaint$ the ann#l #sage J"ns#!ptinD % a

parti"#lar ite! % inventr$.

2. 'he rate at whi"h the %ir! #ses inventr$ is stead$ ver a ti!e.

;. 'he rder pla"ed t replenish inventr$ st"ks are re"eived at e9a"tl$ that pint

in ti!e when inventries rea"h 8er.

Or#er P!i"t'his is the pint at whi"h rder has t be dne.

Re!r#er P!i"t$



40/56


'his is the pint at whi"h t rder inventr$Fe9pressed e*#atinFall$ as/

Lead 'i!e in da$s Y dail$ #sage.

Lea# Time$

,t is the ti!e nr!all$ taken in re"eiving deliver$ a%ter pla"ing rder with

s#ppliers.

Sa(ety St!%$

,t i!plies e9tra inventries that "an be drawn dwn when a"t#al leadFti!e and@r

#sage rates are greater than e9pe"ted.

L!4i'ti' I"6e"t!ry Ma"a4eme"t

Mea"i"4 !( L!4i'ti'$

Lgisti"s is the rgani8atin % servi"es and s#pplies. ,n ther wrds

lgisti"s is !aking and taking the per!issin %r sell@e9prting the "!pan$=s prd#"ts

in %reign "#ntries.

,n %#ll$ e9prtFriented b#siness this is ne % the !ain depart!ents where

this depart!ent gets an apprval t sell their gds in %reign "#ntries. +nd als their

!ain intentin is t !aintain all d"#!ents % thse related t the e9prting % their

prd#"ts.

L!4i'ti' I"6e"t!ry Ma"a4eme"t$

Nes alread$ we have bserved ab#t the !eaning % inventr$

!anage!ent in the rgani8atin. 7#t in %#ll$ e9prt riented b#siness: inventr$

!anage!ent is a ver$ i!prtant "n"ept. 7e"a#se ever$ e9prter r i!prter the$

d nt knw ab#t ea"h ther wh are sta$ing in ther "#ntries.

Be"e(it' !( H!i"4 I"6e"t!rie'$

'he se"nd ele!ent in the pti!#! inventr$ de"isins deals with the bene%its

ass"iated with hlding inventr=. 'he !a4r bene%its % hlding inventr$ are

the basi" %#n"tins % inventr$. ,n ther wrds inventries per%r! "ertain basi"

%#n"tins whi"h are % "r#"ial i!prtan"e in the %ir!=s prd#"tin and !arketing

strategies.'he basi" %#n"tin % inventries is t a"t as a b#%%er t de"#ple r



41/56


#n"#ple the

Iari#s a"tivities % a %ir! s that all d nt have t be p#rs#ed at e9a"tl$ the

sa!e rate. 'he ke$ a"tivities are

JD P#r"hasingJ2D Prd#"tin

J;D Selling

Be"e(it' i" P)r,a'i"4$

,% the p#r"hasing % raw !aterials and ther gds is nt t ied t

prd#"tin@ sales that is a %ir! "an p#r"hase independentl$ t ens#re the !st e%%i"ient p#r"hase several advantages w#ld be"!e available. ,n the %irst pla"e a %ir! "an

p#r"hase larger *#antities than is warranted b$ #sages in prd#"tin r sales level.

'his will enable it t avail % dis"#nts that are available n b#lk p#r"hases. Mrever it

will lwer the rdering "st as %ewer a"*#isitins w#ld be !ade. 'here will th#s be a

signi%i"ant saving in the "sts. Se"nd %ir!s "an p#r"hase gds be%re anti"ipated r

ann#n"ed pri"e in"reases. 'his will lead t de"line in the "sts % prd#"tin.

,nventr$ th#s serves as a hedged against pri"e in"reases as well as shrtage % raw

!aterials. 'his is a highl$ desirable inventr$ strateg$.

Be"e(it' i" 5r!#)ti!"$

)inished gds inventr$ serves t #n"#ple prd#"tin and sales. 'his enables

prd#"tin at a rate di%%erent %r! that % sales. 'hat is prd#"tin "an be "arried n at a

rate higher r lwer than the sales rate. 'his w#ld be % spe"ial advantage t %ir!s with

seasnal sales pattern. ,n their "ase the sales rate will be higher than the prd#"tin

rating d#ring a part % a $ear and lwer d#ring the %%Fseasn. 'he "hi"e be%re the

%ir! is either t prd#"e at a level t !eet the a"t#al de!and that is higher

prd#"tin d#ring peak seasn and lwer prd#"tin d#ring %% seasn r t

prd#"e "ntin##sl$ thr#gh#t the $ear and b#ild #p inventr$ whi"h will be sld

d#ring the perid % seasnal de!and.

'he %r!er invlves dis"ntin#it$ in the prd#"tin s"hed#le while the latter

ens#res level prd#"tin. 'he level prd#"tin is !re e"n!i"al as it allws the

%ir! t red#"e the "st % dis"ntin#ities in the prd#"tin pr"ess. 'his is pssible

be"a#se e9"ess prd#"tin is kept as inventr$ t !eet %#t#re de!ands. Sin"e inventr$ per!its least "st prd#"tin s"hed#ling prd#"tin "an be "arried n !re e%%i"ientl$.



42/56


Be"e(it' i" 3!r% I" Pr!4re''$

'he inventr$ % wrk in prgress tw %#n"tins ,n the %irst pla"e it is ne"essar$

be"a#se prd#"tin pr"esses are nt instantane#s. 'he a!#nt % s#"h inventr$

depends #pn te"hnlg$ and the e%%i"ien"$ % prd#"tin. 'he larger the steps invlved

in the prd#"tin pr"ess the larger wrk in prgress inventr$ and vi"e versa.

7$ shrtening the prd#"tin ti!e e%%i"ien"$ % the prd#"tin pr"ess "an be

i!prved the si8e % this t$pe % inventr$ red#"ed. ,n a !#lti stage prd#"tin pr"ess

the wrk in prgress inventr$ serves a se"nd p#rpse als. ,t #n"#ples the vari#s

stages % prd#"tin s that all % the! d have t be per%r!ed at the sa!e rate. 'he

stages invlving higher set #p "sts !a$ be !st e%%i"ientl$ per%r!ed in bat"hes with a

wrk in pr"ess inventr$ a""#!#lated d#ring a prd#"tin r#n.

Be"e(it' i" Sa&e'$

'he !aintenan"e % inventr$ als helps a %ir! t enhan"e its sales e%%rts. )r

ne thing i% there are n inventries % %inished gds the level % sales will depend

#pn the level % "#rrent prd#"tin. + will be nt able t !eet de!and instantane#sl$.

'here will be a lag depending #pn the prd#"tin pr"ess. ,% the %ir! has

inventr$ a"t#al sales will nt have t depend n length$ !an#%a"t#ring

pr"esses. 'h#s inventr$ se r ves t bridge the gap between "#rrent prd#"tin and

a"t#al sales. + related aspe"t is that inventr$ serves as "!petitive !arketing tl t

!eet "#st!ers= de!ands.

IMPLIMENTATION OF INVENTORY MANAGEMENT

E%%i"ient pr"essing and peratins !anage!ent starts with an integrated

appra"h that links all %a"ets % s$ste! !anage!ent tgether. ,nventr$

!anage!ent is 4#st ne % the dis"iplines. Ea"h arg#!ents the ther and

prvides the abilit$ t e%%e"tivel$ !anage a large s$ste!s envirn!ent.

+""#rate inventr$ data is vital. + la"k % s#"h data a%%e"ts the ther

s$ste!s !anage!ent dis"iplines abilit$ t %#n"tin. 'he a#t!ated ele!ents %

inventr$ !anage!ent !nitr the enterpriseFwide data netwrk pr"essing

envirn!ent %r "hange while the s$ste! envirn!ent relies n the "hange

pr"ess Jwhi"h !a$ r !a$ nt be %#ll$ a#t!atedD %r a""#rate inp#t.



43/56


VARIOUS STOC0 LEVELS OF 0ARNATA0A OEM PVT.LTD

Maim)m Le6e&,n K+


44/56


red#"tin in transprtatin "sts and red#"tin in rdering "sts that is the "sts % inviting

tenders se"tin % *#tatin=s pla"ing % rders re"eiving and inspe"tin % !aterials

and a""#nting and pa$!ents %r !aterials.

CHAPTER #-ATA AAL$SIS A-

ITERPRETATIO

CHAPTER @ V

DATA ANALYSIS AND INTERPRETATION

FINANCIAL RATIOS

'he vari#s ratis that are "al"#lated %r the p#rpse % t knw the e%%i"ien"$ %

the "!pan$ the$ are as interpreted as %llws/

A/ LI*UIDITY RATIO



45/56


'hese ratis are !eas#res the shrtFter! slven"$ r %inan"ial psitin % a %ir!.

'he !ain li*#idit$ ratis are/

CURRENT RATIO 1#rrent assets

1#rrent rati X XXXXXXXXXXXXXXXXX

1#rrent liabilities

1#rrent assets 202F; X C 05 55 00 \ 2; ;C 2 0; \ C 55 0

X ;5 - 5; 00-

1#rrent liabilities 202F; X 25 22 - ;2;

X ;5 - 5;00- @25 22 -;2;

CR =.$ =

1#rrent assets 20;FB X 5 5 -5B \ ;2 -5 -; 5C5 \ ; ;; - 0;;

X 5 0 00-

1#rrent liabilities 20;FB ;2 C2 5 ;

X 5 0 00-@;2 C2 5 ;

CR =.$=

1#rrent assets 20BF5 X 5 B; 52 -0B\;5 22 \ ;; 2 -;

X 5 -- 5- C0

1#rrent liabilities 20BF5 X 2 20 ; BB

X 5 -- 5- C0@ 2 20 ; BB CR ?.=$ =

Ta7&e - =

Year C)rre"t

A''et'

C)rre"t

Lia7i&itie'

C)rre"t Rati!

202F; ;5-5;00- 2522-;2; .B;

20;FB 5000- ;2C25; .5-

20BF5 5--5-C0 220;BB 2.;

Gra5, - =



46/56


2012-13 2013-14 2014-150

0.5

1

1.5

2

2.5

C)rrent Rat*o

A0*s T*t&e

ANALYSIS AND INTERPRETATION$

'able . indi"ates that "#rrent rati is in"reasing %r! $ear t $ear i.e. in

202F;it is .B;/ while in the $ear 20;FB it is .5 / . ,n the $ear 20BF5"#rrent

rati has in"reased as "!pared t previ#s tw $ears i.e. 2.;/ . ,t !eans %ir!s "#rrent

assets in "ash and bank balan"e are in"reased the s#ndr$ debtrs are in"reased and

inventries and de"reased and i!prving $ear b$ $ear.

ACID TEST RATIO+"id 'est


47/56


202F; 2- - --0- 25 22 -;2; .-

20;FB C2-25- ;2C25; .

20BF5 B25C0C0B 220;BB .5C

Gra5, @ ?

2012-13 2013-14 2014-150

0.2

0.4

0.6

0.81

1.2

1.4

1.6

A1*d Test Rat*o

A0*s T*t&e

ANALYSIS AND INTERPRETATION$'he abve "hart shws the generall$ +"id test rati is / is "nsidered t represent a

satis%a"tr$ "#rrent %inan"ial "nditin. ,n the $ear 202F; a"id test rati was .- and

de"reased in the $ear 20;FB t . and then in"reased in the $ear 20BF5 t .5C.

PROFITABILITY RATIO

GROSS PROFIT RATIOGrss Pr%it


48/56


2012-13 2013-14 2014-150%

2%

4%

6%

8%

10%

12%

14%

16%

18%20%

Gross Pro2t Rat*o

A0*s T*t&e

ANALYSIS AND INTERPRETATION$

'he abve "hart shws that Grss Pr%it


49/56


2012-13 2013-14 2014-150.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%20.00%

et Pro2t Rat*o

A0*s T*t&e

ANALYSIS AND INTERPRETATION$'he abve table indi"ates that net pr%it rati has in"reasing trend i.e .A in 202F;

;.B-A in 20;FB and -.-A in 20BF5. ,t !eans %ir!s net pr%it rati is in"reasing

$ear b$ $ear and net pr%it rati i% e%%e"tive and i!prving $ear t $ear.

INVENTORY TURN OVER RATIOI"6e"t!ry T)r" O6er Rati! Net Sa&e' 8 I"6e"t!ry

202F; B-B @ C055500

I"6e"t!ry T)r" O6er Rati! =?.= time'20;FB ;22B; @ 55-5B

I"6e"t!ry T)r" O6er Rati! . time'

20BF5 C250; @ 5B;52-0B

I"6e"t!ry T)r" O6er Rati! =K. time'

Ta7&e -

Year I"6e"t!ry T)r" O6er

Rati!

202F; 2.- ti!es20;FB . ti!es

20BF5 0.; ti!es

Gra5, -



50/56


2012-13 2013-14 2014-150

2

4

6

8

10

12

14

Inventory T)rn Over Rat*o

A0*s T*t&e

ANALYSIS AND INTERPRETATION'he abve "hart indi"ates that in the $ear 202F; inventr$ t#rnver rati is 2.-

ti!es and then it is de"reased t . ti!es in 20;FB and in"reased t 0.; ti!es in

20BF5. ,t !eans %ir!?s inventr$ !anage!ent is nt e%%e"tive and it has t "n"entrate

!re n inventr$ t#rnver.

INVENTORY CONVERSION PERIODI"6e"t!ry C!"6er'i!" Peri!# N)m7er !( Day' 8 I"6e"t!ry T)r"!6er Rati!

202F; X ;C5 @ .;-

I"6e"t!ry C!"6er'i!" Peri!# ? #ay'20;FB X ;C5 @ .0;

I"6e"t!ry C!"6er'i!" Peri!# #ay'

20BF5 X ;C5 @ -.C

I"6e"t!ry C!"6er'i!" Peri!# K #ay'

Ta7&e -

Year I"6e"t!ry !"6er'i!"

Peri!#

202F; ;2 da$s20;FB ;; da$s

20BF5 B0 da$s

Gra5, -



51/56


2012-13 2013-14 2014-150

5

10

15

20

25

30

3540

Inventory 1onvers*on Per*od

A0*s T*t&e

ANALYSIS AND INTERPRETATION'he abve table reveals that ,nventr$ 1nversin Perid is in"reasing %r! ;2 da$s in

202F; t ;; da$s in 20;FB and in the $ear 20BF5 is in"reased t B0 da$s. 'he %ir!

has t take ne"essar$ steps t "ntrl the inventr$ "nversin perid %r st"k int

sales.

Ba&a"e S,eet a' !" ='t Mar, !( t,e t,ree year'

Parti)&ar ?K=?-= ?K=-= ?K=-=

S!)re' !( F)"#'$Share 1apital B;000 ;C50 ;C50


52/56


1#rrent +ssets Lans& +dvan"es

,nventries C055500 55-5B 5B;52-0

B

S#ndr$ 6ebtrs 2;;C20;

;5-5-;5C

5

;522

1ash& 7ank 7alan"es C550 ;;;-0;; ;;2-;

Lans and +dvan"es ;-CC 0BBB; 2CBC;-

-

=

?=?

?

=

Le''$ C)rre"t Lia7i&itie' a"#

Pr!6i'i!"'

2522-;2

;

;2C25

;

520;B

B

1#rrent Liabilities and Prvisins ;;BB-02;

C5;0- C50C2

???

K??

?

K

5-BBC

0

2-C55C0

0

B05C-0

2

et 1#rrent +ssets F ;2- C2B;B

Mis"ellane#s E9p

T!ta& KKKK

?=KK

Pr!(it a"# L!'' A8 (!r year e"#i"4 ='t Mar,

Parti)&ar ?K=?-= ?K=-= ?K=-=

I"!me$

Sales B-B

;22;5B

;

C22050

;

Pr%it n sale % )i9ed +sset 2BB;;5 F ;;2C0

Other ,n"!es ;B05 BB-C5 202C5T!ta& ?

=K

=?K=

E5e"#it)re'

Man#%a"t#ring and ther E9penses C;;B0B0;

C

-2BC; B20C-22

B

,nterest and )inan"e "harges F 2-B02B; 2B0-5C2

Lss n sale % )i9ed +ssets - BB2 -

6epre"iatin C50 ;C5 ;5C;B0

T!ta&

=?=

=KK=



53/56


Pr!(it 7e(!re Ta ==

?

=K= ?K=K

Pr!6i'i!" (!r I"!me Ta

1#rrent 'a9 5-B--02 B- B;;0;

6e%%ered 'a9 ;BB20B2 2B5;2 KKK)ringe 7ene%it 'a9 B-000 00- 22;;

T!ta& ==K ?= ???=

Pr!(it a(ter Ta ??= ?K =K=

Less/ ,n"!e 'a9 relating earlier $ears 2B-2 CB F

7alan"e br#ght %r! previ#s $ear 550B -5552C5 C52C;-

7nalan"e tran"e%ered t 7alan"e Sheet =? =? ?K==

Earing per Share

Ba'i -.C5 B. 5.;

6il#ted -.C5 B. 5.;

3eighted +verage n % shares #sed in1!p#ting EPS B;00 C2;B ;C5

CHAPTER+ #II-IGS, RECOMME-ATIOS

A- COCL"SIO



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CHAPTER- VI

FINDINGS1 RECOMMENDATIONS AND CONCLUSIONFINDINGS$

'he anal$sis % the %inan"ial re"rds % the K+


55/56


K+


56/56


)inan"ial Manage!ent b$ Khan and ain

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