A PROJECT REPORT ON INVENTORY, PURCHASE & PRODUCTION MANAGEMENT by Sanjay Gupta

A PROJECT REPORT ON “INVENTORY, PURCHASE & PRODUCTION MANAGEMENT” AT VICTRANS ENGINEERS PVT. LTD.

CERTIFICATE This is to certify that project report title “Inventory, Purchase & Production Management" at Victrans Engineers Pvt. Ltd. is a bonafied work carried out by Mr. XYZ of Post Graduate Diploma in Material and Logistics Management, of XYZ Management for fulfillment of MBA of XYZ University. He worked under our guidance and direction.

Dr. XYZ

Prof. XYZ.

(Director)

(Project Guide)

Place: XYZ. Date:

ACKNOWLEDGEMENT

This project bears imprint of all those who have directly or indirectly helped and extended their kind support in completing this project. At the time of making this project I express my sincere gratitude to all of them.

I express my profound gratitude to my project guide Prof. XYZ, my College Director Dr. XYZ for their constant guidance and encouragement and my course Coordinator Ms. XYZ for her very kind support and valuable guidance in completing my project. I express my deep sense of gratitude, indebtedness and regard to Mr. XYZ & a special thanks to Mr. XYZ for their cooperation in this project.

At this moment I also thank almighty, my Parents and God for the blessings showed upon me and also my Friends for their valuable suggestions.

XYZ 3

MBA

DECLERATION

I, the undersigned, hereby declare that the Project Report entitled “INVENTORY,

PURCHASE

PRODUCTION

MANAGEMENT”

“Victrans Engineers Pvt. Ltd.” written and submitted by me to the UNIVERSITY OF XYZ, in partial fulfillment of the requirements of the award of MBA under the guidance of Prof. XYZ is my original work and the conclusion drawn therein based on the material collected by myself.

Place: XYZ

XYZ

Date:

PGDMLM (B)

PREFACE

“To manage a business well is to manage its future & to manage the future is to manage information” an aspect of management education is to undergo winter training in the corporate world and then make a revolution of it. This training is offered at the completion of first semester PGDM and prior to commencement of the second semester PGDM the companies offer the winter trainee’s wide varieties of interesting and challenging project. Winter training requires that the student attains practical experience in an industrial organization for a period of four weeks. The winter project investigates some significant aspect or problem of an organization. It gives students an opportunity to observe the business organization in operation and sharpen their skills by putting then to use. Winter training enables the students to undergo research work or an on the job training .This training enables individuals to make a better informed carrier choice regarding both functional specializations and type of organization. Yet it is sufficient for the student to apply the management concept to the real life situations and at the same time also be it their independent judgments and creativity.

CONTENTS

SR.NO.

PARTICULARS

PAGE NO.

EXECUTIVE SUMMARY

INTRODUCTION

RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

COMPANY PROFILE

ANALYSIS & INTERPETATION

FINDINGS & SUGGESTIONS

CONCLUSION

BIBLIOGRAPHY

CHAPTER -1

EXECUTIVE SUMMARY

“VICTRANS ENGINEERS PVT.LTD.” precisely forms a part of “ELECTRICAL INDUSTRY” where in the customers satisfaction is the most important thing which is to be taken into consideration. This company works on the basis of “First in First out” (FIFO) principle, but due to the various technical and working parameters as well. During the project with “VICTRANS ENGINEERS PVT.LTD.”, I got an opportunity to understand the purchase of raw material, its storage and the production part of the company. The main problem regarding the matter of production is that, the raw material flow is slow, so the company has to keep stock of raw material in good numbers. This is the ideal strategy adopted by the manufacturing companies. Now considering all these difficulties there was a need to develop a perfect inventory management system. The project also constitutes the study of documentation procedures that are followed in the industry, like preparation of job order, generation of delivery challan cum invoice, reconciliation of quantity, settlement of claims, etc. The work that has been done in this project has given some important clues to the management about the areas which thought were doing good and not only this it has also tried to throw some light on the possible changes that can be made in order to achieve more and more efficiency. The main purpose of selecting this project is to study the aspects involved in purchase, production & inventory management and the several documentation processes that are involved in the working of the company.

[

CHAPTER -2

INTRODUCTION

Production can be defined as the manufacturing of goods and services, in production management different things should be kept in mind which is determination of production requirement, manufacturing process, order priority &right quality. Inventories are the stock of raw materials of any kind that are stored for future use, mainly in production process. Inventory management is the forecasting of analysis and modeling, inventory stimulation. Inventories are materials or resources of any kind having some economic value and management of these are called inventory management. There are different types of inventories which are as follows:•

Raw material inventory.

•

In process inventory.

•

M R O inventory.

•

Finished goods inventory.

•

In transit inventories.

•

Lot sized inventories.

These are the types of inventories which are to be managed which are called Inventory management. Purchase management consists of management of all purchasing or procuring activity of the organization in terms of raw material and semi finished material for further production activity.

Purchasing management done by different organizations through using different methods which are as follows:•

According to requirement buying.

•

Schedule buying.

•

Forward buying.

•

Speculative buying.

•

Contract buying.

•

Blanket orders.

•

Tender buying.

There is a vital need for integration so that customers can achieve their transportation requirements while maximizing the value of money spent in getting their goods to market. They require better use of existing assets and industry cooperation, and greater competition. Companies aiming to be an integrated solutions provider have to tackle this by extending their supply chain capabilities.

CHAPTER -3

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. Why a research study has been undertaken, how the research problem has been defined, in what way and why the hypothesis has been formulated, and what data have been collected and what particular method has been adopted, why particular technique of analyzing data has been used and a host of similar other questions are usually answered when we talk of research methodology concerning a research problem or study.

Research design:A research design serves as a bridge between what has been established (the research objectives ) and what is to be done , in the conduct of the study. In this project the research done is of conclusive nature. Conclusive research provides information that helps in making a rational decision. Descriptive design was choose to measure the satisfaction level of production on the basis of different parameters such as working of machines, quality, skilled workers, Technology, Intensive to workers etc. This design ensured complete clarity and accuracy it also insured minimum bias in collection of data and reduced error in data interpretation. Statistical method was followed in this research because the data was descriptive nature and is also enabled accurate generalization.

SOURCES OF DATA

Primary Data Prime data are those which are collected a fresh and for the first time, and thus happen to be original in character it was collected through following ways 1) Interview 2) Observation.

Secondary Data Secondary data are those which have already been collected by someone else and which have already been passed through the statically process the data were collected in the form in company profile and produce profile through following ways 1)

Internet

Newspapers

Journals

RESEARCH INSTRUMENTS: Industrial visit were used as it helped to prepare this project. Collecting data through questionnaire was very time saving and personal observations was very time saving and cost factor was also reduced. The respective departments and the net was also helpful in collecting data.

SAMPLE DESCRIPTION: SAMPLE DESIGN The universe: - This consist the workers, employees and the production department. SAMPLE METHOD The sampling method used for the selection of the workers and employees is expert judgmental sampling. SAMPLE SIZE The number of respondents interviewed 20. METHOD OF COLLECTION:Data was collected through questionnaire, industrial visit and from departments. Questions were of both types open ended and close ended. In these Questionnaire were not self administered, I asked questions from various people in the logistic unit and then I noted all the answers of questions.

CHAPTER-4

OBJECTIVE OF STUDY

OBJECTIVES OF THE STUDY This being a part of the Electrical and Technology sector so the most important thing in this sector is the quality product & prompt delivery of the materials. In this regard the production, purchase & inventory department of any organization plays the most important role. Therefore, the main objective of the study is to know how purchase, production &storage of products and the information related to the product takes place in the company. The Objectives, behind the study are as under:1. To study the existing production strategy, adopted by Victrans Engineers Pvt. Ltd. 2. To examine the strength and weakness of existing strategies. 3. To understand the effectiveness of logistics strategic in the market. 4. To suggest the measures to overcome the weakness from the existing strategies.

CHAPTER-5

COMPANY PROFILE

Victrans Engineers Pvt. Ltd. was founded in1989 by Mr. S. K. Dutta in Nagpur with an objective of making instrument transformers. Victrans Engineers Pvt. Ltd. produces current transformers and potential transformers. It not only produces these products but also provides services for these products. Victrans Engineers Pvt. Ltd. is located in an industrial area of Nagpur called Hingna, MIDC, which is 14 kms from zero mile, Nagpur. The product ranges of the company are as follows: •

33kv Single Phase outdoor type current transformers.

•

66kv Single Phase outdoor type current transformers.

•

110kv Single Phase outdoor type current transformers.

•

132kv Single Phase outdoor type current transformers.

•

220kv Single Phase outdoor type current transformers.

•

33kv Single Phase outdoor type potential transformers.

•

66kv Single Phase outdoor type potential transformers.

•

110kv Single Phase outdoor type potential transformers.

•

132kv Single Phase outdoor type potential transformers.

•

220kv Single Phase outdoor type potential transformers.

INTRODUCTION OF VICTRANS ENGINEERS PVT. LTD.

Victrans Engineers Pvt. Ltd. manufactures current and potential transformers and also provides services for these products. It manufactures these products in the required specifications and standards. VEPL produces transformers which are used in different public and private sector organizations like Maharashtra State Electricity Transmission Co. Ltd., Delhi Transmission Co. Ltd., Kirloskar Brothers Ltd., Suzlon Infrastructure Services Ltd., Larson & Tourbo Ltd. (ECC division). The transformers are of superior quality and extremely durable. VEPL pays revenues to the government and also provides employment to a lot of people.

MISSION OF VEPL

• ENRICHES LIVES We will do our best to provide quality products and services, which will improve the life style of the users.

• QUALITY POLICY We aim for maximum customer satisfaction by way of continual improvement of the process & quality system of the organization and targeted quality objective.

• OUR WORD IS OUR BOND Our dealers are our partners to practice this golden rule in our relations with others.

• INTEGRITY IS OUR COMMITMENT The conduct of our companies’ affairs must be pursued in a manner that command respect for honesty and integrity.

AUTHORITY STRUCTURE MANAGING PARTNER PARTNER

Dy.G. M. G.M.

F&A MANAGER

TECHNICAL MANAGER ADMINISTRATION

WORKS MANAGER TEST/INSPE CT

HUMAN RESOURCE

STORES

MARKETING MANAGER

PURCHASE

PRODUCTION I.S.O

FEBRICATION

CUSTOMERS OF VEPL

Maharashtra State Electricity Transmission Corporation Ltd. Gujrat Energy Transmission Corporation Ltd. Karnataka Power Transmission Corporation Ltd. Punjab State Electricity Board. West Bengal State Electricity Transmission Corporation Ltd. Haryana Vidyut Prasaran Nigam Ltd. Tamil Nadu Electricity Board. Chattishgarh State Electricity Board. Madhya Pradesh Power Transmission Corporation Ltd. Orrisa Power Transmission Corporation Ltd. Jharkhand State Electricity Board. U.P. Power Transmission Corporation Ltd. Bihar State Electricity Board. Andhra Pradesh Transmission Corporation Ltd. Delhi Transmission Corporation Ltd. National Thermal Power Corporation Ltd. Damodar Valley Corporation Ltd. Kirloskar Bros. Ltd. ABB Power System Distribution System. 24

AREVAT&D Industries Ltd. Shreem Capacitors Private Ltd. Bhansali Engineers Polymers Ltd. M/S Shamanar Sugar Ltd. Eri-Tech Ltd. Ashtavinayaka Constructions. Techno Electricity & Engineering Company. Integrated Powers Supply. SKS ISPAT & Power Ltd. The High-Tech Electricals. Mavin Switchgears & control. AGM-Power V R Patil & Associates. M/S Jaymas Trade Links. ABG Electrical Consultants. Vandana Global Ltd. Vestas Wind Systems. Emco Ltd. Larson & Tourbo Ltd, ECC Division. Suzlon Infrastructure Services Ltd. Subhash Projects & Marketing Ltd. High-Tech Electrical Pvt. Ltd. 25

Simms Engineering’s. Shree Renuka Sugars. Bharat Bijlee Ltd. Technical Associates. Sterling & Wilson Pvt. Ltd. Kintech Synergy Pvt.Ltd. Shyam Steel Industries. Costal Projects Pvt. Ltd. Prinz Engineers India. Traders Electricals. Bright Power Project Pvt. Ltd. Shalaka Infro-tech. Continental Industries. Techno Electrical & Engineering. Raychem RGP Ltd. Bharat Bijlee Ltd.

CHAPTER-6

ANALYSIS & INTERPETATION OF DATA

PURCHASE PROCEDURE

1. Vendors & subcontractors as on 14/09/2003 are included in the approved lot of vendors based on the past performance. 2. In case of vendors or subcontractors, on finding prospective vendor/subcontractors, vendor information format number QMSP-03-F-01 is sent to the vendor to get desired information on obtaining the desired information in detail, it is reviewed by executive, production & then put up to the director for approval on approval, the trial order is placed. If in two consecutive trial orders, no rejection are found then the vendor is included in the approved list of vendors. 3. Vendors rating for critical materials is carried out once in six months & based on the rating, they are either included or deleted from the approved list.

VENDOR RATING PROCEDURE

Vendor supplies are evaluated for each lot supplied, as per vendor rating system & values are entered in a format.

Vendor Rating is done on following parameters:

PARAMET RES

RATIN MARKS

QUALIT Y

Lot accepted-Full 70

Partial rejection-20% Full rejection-Nil

QUAN TITY(AGAINST

Up to (+ -)2%-Full marks 20

Up to 10%- 10 marks

PURCHASE ORDER) DELI VERY

Within 10 days- Full 10

15days & above- 5marks

 If any marks on six months rating is found to be >85, the vendor Continues to be in the approved list. If the rating is <70-85, vendor is informed about the deficiency by a letter & if the rating is <50,or failing the quality any of the parameters order placement is discontinued & vendor is informed to submit fresh samples for approval.  Purchase Orders are released by after reviewing the rating. The purchase orders contain the purchase data such as clear product description, product specification, acceptance criteria, delivery periods and inspection criteria along with commercial data details as per the format records of such are maintained. In case of amendments, purchase orders are reviewed for and approved by partners of the company. Purchase orders are prepared for items having values above Rs. 10000/ Purchased products inspection is carried out to ensure the specification given & products reviewed are matching.

New Vendor Information Sheet

This information sheet is filled by new vendor so that the company can know about the vendor. VENDOR NAME: PROPRIETORS NAME: LEGAL STATUS: CONTACT NO. : FAX NO. : EMAIL ADD: Are you ISO 9000 certified? If yes please furnish Xerox copy of certificate. Have you been approved to any customer? If yes, please furnish copy of certificate. Any other product time approved obtained? if yes, furnish copy of certificate. Minimum lead time required to supply the material. Please give details of available infrastructure.

CONSUMABLE CRITICAL ITEMS

SR.NO.

DESCRIPTION

SIZE

AVAIL. QTY.

COPPER BASE

16 SWG

xxx

COPPER SE

16 SWG

xxx

COPPER SE

17.5SWG xxx

COPPER SE

18 SWG

xxx

COPPER SE

19 SWG

xxx

COPPER ROD

20MM

xxx

COPPER ROD

22MM

Xxx

COPPER ROD

30MM

Xxx

COPPER ROD

35MM

Xxx

10.

COPPER ROD

52MM

Xxx

11.

PAPER TAPE

25MM

Xxx

12.

CRAPE PAPER TAPE

30MM

xxx [

13.

CRAPE PAPER TAPE

40MM

xxx

14.

CRAPE PAPER TAPE

50MM

xxx

CRAPE PAPER TAPE

70MM

xxx

PRESS BOARD

1MM

xxx

[

17.

PRESS BOARD

3MM

xxx

18.

CORK SHEET

3MM

xxx

[

19.

CORK SHEET

6MM

xxx

20.

ALLUMINIUM FOIL

xxx

[

15. [

16.

[

21.

22.

SECONDARY TERMINAL

6MM

[

[[

SECONDARY TERMINAL

8MM

xxx

23.

PRESURE RELEASE VAULVE

xxx xxx [

24.

OIL GUAGE

xxx

[

25.

N2 VAULVE

xxx

26.

EPOXY ZINC RICH PAINT

xxx

27.

EPOXY THINER

xxx

28.

FEVICOL

xxx

29.

BRAZING ROD SILVER

xxx

30.

BRAZING ROD COPPER

xxx

31.

SILICON WASHER ROLLAR TYPE

xxx

32.

SILICON WASHER PLAIN

xxx

[

33.

NYLON PART MALE FEMALE

xxx

WELDING ROD

xxx

[

34.

[[

35.

WELDING ROD M16 [

36.

GI NUT BOLT

xxx

37.

M.S. NUT BOLT

xxx

38.

CO2 GAS

xxx

39.

OXY GAS

xxx

40.

LPG GAS

xxx

41.

TAG

xxx

xxx [

42.

TAG

xxx

Inventory Control

Successful, well organized businesses rely heavily on inventory management system to make certain that adequate inventory levels are on hand to satisfy their customers demand. The inventory control module for the business accounting system provides this level of control by offering high end features normally reserved for large companies including manufacturing capabilities, serial number tracking and multi-ware house support. Inventory control even features and image library that allows you to assign a picture to each part. Improved customer service leads to increased profitability. And when integrated with the accounts receivables and order entry modules, inventory control can significantly boost your service level while operating as the cornerstone of an effective manufacturing or distribution solution. For more complex project management, inventory control can be coupled with the job cost module to help track all inventory related expenses for a project. Inventory tracking is enhanced even more when integrated with the custom office module, which creates detailed spread sheet to provide further analysis of inventory performance. The inventory control system offers comprehensive reporting capabilities to top of inventory status. It can help to bring about the creation of improved purchasing policies, pricing methods, even enhanced customer service.

ISSUE OF RAW MATERIAL STEP 1: The process of issue begins with the issue sheet prepared and sent by the planning department to the material control department or as per the requirement. THE SHEET CONTINS FOLLOWING INFORMATON •

Date of issue of sheets from planning department.

•

Number of material to be issued.

•

Size of the material.

•

Weight of the material.

STEP 2: The supervisor at the material control receive the receipts, check the requirement and they look for the availability of raw materials. If the total requirement is already in the stock it is separated and issued. In case of none availability either order is being placed for the material for the planning is informed regarding the scene. Material control identifies the required material from a huge stock of variety of the material by multipurpose tag attach to each lot of raw material. A tag contains of vital following information •

Source from where the material is brought or purchased.

•

Batch number of material.

•

Size of the material.

•

Grade of the material.

STEP 3: Raw material are issued basically to three division or units they are here indigenous material is washed and cleaned and made ready further processing. STEP 4: After issue of raw material the material control supervisor prepares a manual record of what he issued using issue sheet. The basic content of the sheet are as follows: Department of issue grade which is issued. Lot number issued Size of material issued Number of bush issued Total number of quantity issued Signed by concerned issuing authority or supervisor. STEP 5: Through the requirement and issue are always in contrast with each other but sometimes uncertainties occur and this result is the situation of left over which is rare in nature.The sheet is divided into two parts that is excess supply and unusable material. Basic contents are as follows: Size of material left Grade of material left Quantity left Required quantity as mentioned Quantity actually supplied Date when supply was made Department from where issue to place Reason for left over occurrence 38

Decision on what to do of left over that is whether it is put to some other job or removed and stocked. STEP 6: After the left over reaches the yard its specific features are compared with the one being sent and then it is stocked at specific place until it comes to some use.

RAW MATERIAL INFORMATION FLOW MIS SYSTEM MIS stands for management information system and is a form of generating information regarding the various ongoing process in the organization with the help of digital or electronic media it is very much vital it is very much vital for the proper functioning and smooth running of the each and every organization. MODULE OF MIS: QUALITY ASSURANCE DEPARTMENT

FINANCE & ADMINISTRAT ION

MARKETING

PURCHASE

DISTRIBUTION SYSTEM

WARE HOUSE

ERP SYSTEM

STORE ISSUE SLIP

SL. NO.

DESCRIPTION

QUANTITY REQUIRED

PUR- QTY RECEIVED POSE BY ISSUED

ANALYSIS OF MONTHLY DISPATCH OF CT & PT SR. NO.

Month

Current Year

Previous Year

(2008-2009)

(2007-2008)

Qty. in no’s

April(08)

1500

1200

May(08)

1600

1350

June(08)

1900

1600

July(08)

1700

1400

August(08)

1600

1550

September08)

1800

1710

October(08)

2090

1800

November(08)

1500

1230

December(08)

1870

1560

January(09)

2000

1700

February(09)

1800

1400

March(09)

2000

1500

Total

21360

18000

Dispatch Figures

Current Year 2008 - 2009 Previous Year 2007 - 2008

ROUTINE TEST JOB SL. NO. I R VALUE TAN DELTA & CAPACITANCE HVPF TEST P.D. TEST HVPF TEST ON SECONDARY WING OVER VOLTAGE MEASUREMENT OF RESIS VK & SLV TEST TRE TEST ACCURACY TEST ISF TEST

STORAGE HANDLING

In times of severe competition, many retailers recognize the importance of controlling cost. Cost knowledge is thus a foundation for improving supply chain relationship with known supply chain relation costs, the information’s needed to most effectively structure the supply chain can be provided. Moreover, different opportunities needed to most simultaneously reduce cost and increase performance can be identified. The logistic cost made in the part of the supply chain that include the warehouse and the store are presented. It can be seen that the majority of operational costs are handling costs. In another empirical study by saghir and jonson the same trend was observed : they found that 75% of the handling time in the retail chain occur in the store. In their paper efficiency improvement through the integration and development of new packing system are described. In this article, the potential to improve handling efficiency is discussed by identifying the drivers for stores handling (i.e. given the packages and the inventory replenishment rules). Handling costs in the stores in the two retail chains investigated in this paper are equal to around 50 million euro per year, indicating that efficiency gains lead to substantial euro saving as well.

ACTIVITY OF ORGANIZATION

SUPPLIERS

RAW MATERIAL

SOURCING

PRODUCT STOCK

PRODUCTION

PHYSICAL DISTRIBUTION

CUSTOMER

SWOT ANALYSIS The overall evaluation of strength, weakness, opportunity and threat is called swot analysis.

STRENGTH • Market share is strong. • Large distribution network. • Dealers, Branch office is concerned with interest in all over India. • Its products are best and are tested by several authorities. • It has a very good infrastructure and work force. • Healthy financial position. • Raw material available. • It uses Enterprise resource planning.

WEAKNESS •

VEPL has semi-automatic plant.

•

Highly bureaucrat.

•

Over looked small customers.

•

Inadequate expenditure of R&D.

•

Non effective advertising image.

•

High production cost.

•

Demand has increased because of infrastructure development.

OPPORTUNITY •

Developing cities.

•

Electrification in villages.

•

Development in villages & set up of industries.

•

Can increase profits by direct advertisement.

•

Competitors are not much strong.

•

Good pool of customers.

•

Govt. providing work.

THREAT •

Low price of rival products are one of the threats.

•

High cost of production.

•

Government always changes policies.

•

Workers efficiency is low.

•

Other similar companies.

•

High lead time.

QUESTIONNAIRE • Do you use material requirement planning technique? Ans: Yes

Yes No

• Which software do you use SAP/ORACLE? Ans: ORACLE

SAP

Oracle SAP

• For how many days you maintain the inventory of raw materials? Ans: 30days

60 days

30 Days 60 Days

• Do you use ERP? Ans: Yes

Yes No

• Do you prefer single or multiple vendor for purchasing raw materials? Ans: Single

Multiple

Single Multiple

• Do you audit regularly? Ans: Yes

YES NO

CHAPTER-7

FINDINGS & SUGGESTIONS

FINDINGS:During the one month training in VICTRANS ENGINEERS PVT.LTD. we find number of things and if the company pay attention in these findings it can become the top most company in the sector here are some of the findings which we find during that one month duration of training:•

In the company, the Material Handling is done with the help of the Systematic Material Handling Techniques such as use of Material Handling Equipments.

•

The major portion of the company is operated through the Oracle Software which is used as the internal Enterprise Recourse Planning Tool.

•

The minimum inventory level for 60 Days is maintained in the stores so as to balance the fluctuation between the supplies of the raw material.

•

The ERP technique is used in the company to co-ordinate between different departments of the company.

•

Usually, multiple vendor system is preferred over the single vendor system. This system enables company to overcome the problem of delayed supply of the raw material.

•

The Audit is carried on the regular basis, in the interval of 6 months.

•

The testing of the raw material and the finished goods is carried out at both factory stores as well as the supplier/customers facility.

SUGGESTIONS:As the production storage & purchase is very important in VEPL and it has prove it to their best also but there are some drawbacks and if they fulfill it they might become the top Company in the sector. •

Though the material handling techniques are used, there is a significant scope to improve the handling process. The better material handling tools should be used to reduce the accidents.

•

The regular maintenance of the material handling equipments should be carried out.

•

The audit should be carried out in the intervals of 3 months so as to calculate the inventory status which will help in the inventory control.

•

The working hours should be increased by 2 hours at the most so as to increase the productivity.

•

The single vendor system should be used on trail basis. This will help the company to reduce the regular 60 days inventory level.

•

In the company, they use both Oracle and SAP software for ERP. Instead of using two different software, they should use only one software as main ERP System Tool.

CHAPTER – 8

CONCLUSION

CONCLUSION How Inventory Increases?  Rejection: Rejections due to poor quality of raw material or process rejections at every stage due to quality checks. Even implementation of Sample Inspection has resulted in faulty batches to pass by & found as defective in the final stages of production, resulting in losses.  Cancellation of Orders: Due to economic slowdown, many a times there is cancellation of huge orders which leads to excessive inventory of finished goods.  Producing extra to tackle unidentified loss of files & to avoid shortage to complete orders. This result in excess files produced in every batch of production for orders. And these files keep on adding up to inventory until the next order for the same file type is placed.  Scrap accounted at every stage of production which accumulates to almost more than 8%.  Obsolete Raw Material – outdated raw material kept in the warehouse. Not being rid off as it will account for this year losses and it is carried forward, adding up to unnecessary utilization of space. Issues regarding Production & Inventory Control  Poor Maintenance: Machines not maintained properly so breakdown occurs & affects output. But still machines are run as it is, which results in low quality of goods.  Break-down in Line Layout Undesirable, as it reduces the production capacity.  Weighing Machines need to be kept in every department to avoid unnecessary material handling & thus save time and thus avoid workers from unnecessarily wandering on pretext of work and wasting time.  Reduction in Manpower, so workers don’t work whole-heartedly.  Stagnant Inventory  Check on implementation & worker effectiveness •

Trained labor needed for doing a particular job – training required for Job Rotation.

BIBLIOGRAPHY

 Materials and logistics management by L.C.Jhamb, Nirali Prakashan  Purchasing and material management by Gopalkrishnan  Material Management by Dutta  A text book of Purchase management by L.C.Jhamb, Nirali Prakashan  www.victransengineers.com