A summer internship project reportON”INVENTORY MANAGEMENT OF SPRL, PATHREDI UNIT”At{SP-1/892 & 893, RIICO Industrial Area, District Alwar, Pathredi, Rajasthan 301018}(A project report submitted in a partial fulfillment of the requirement of the degree of)”MASTER OF BUSINESS ADMINISTRATION at SMS, MUST” Submitted by: Submitted to:BHARTI GUPTA Dr. MANISH DIDWANIAENROLMENT NO:-17062 SMS, MUST School of management studiesMody University of Science & Technology Lakshmangarh (Raj.)- 332311BONAFIDE & FORWARDING CERTIFICATEThis is to certify that the BHARTI GUPTA D/O MR. JAI PRAKASH GUPTA is a bonafide student of this institute with enrolment number 170627. Based on the written consent of the faculty guide to Dr. MANISH DIDWANIA, we are forwarding her project report titled “INVENTORY MANAGEMENT OF SPRL PATHREDI UNIT” for further evaluation to the controller of examinations Mody University, Laxshmangarh Rajasthan.Dr.
D K Agarwal (Dean, Mody University School of management studies), Certified that this dissertation is approved in quality and formChairmanExternal Examiner Committee School of management studiesMody University of Science & Technology Lakshmangarh (Raj.)- 332311Faculty Guides CertificateThis is to certify that the dissertation titled “INVENTORY MANAGEMENT OF SPRL PATHREDI UNIT” is a bonafide work done by BHARTI GUPTA D/O MR. JAI PRAKASH GUPTA under my guidance in partial fulfillment of Master of Business Administration program of Mody University, Lakshmangarh (Rajasthan). This report has been checked by me on the basis of the rough draft submitted and the views expressed in the report are only that of the researcher, and not of the institute. Dr. MANISH DIDWANIAMody University School of management studiesLakshmangarh (Raj.)TO WHOM SO IT MAY CONCERNThis is to certify that the project titled “INVENTORY MANAGEMENT OF SPRL PATHREDI UNIT” carried out by MS.BHARTI GUPTA has been accomplished under my guidance and supervision as a duly registered MASTER OF BUSINESS ADMINISTRATION student of MODY University.
This project is being submitted by her in the partial fulfilment of the requirement for the award of the MASTER OF BUSINESS ADMINISTRATION (MBA) IN FINANCE AND MARKETING FROM MODY University, Lakshmangarh (Raj.) Her dissertation represents her original work and is worthy of consideration for the award of the degree of MASTER OF BUSINESS ADMINISTRATION.STUDENT DECLARATIONI do hereby declare that the dissertation title “INVENTORY MANAGEMENT OF SPRL PATHREDI UNIT” is a record of bonafide work done by me under the guidance of Dr.
MANISH DIDWANIA, Mody University of Science & Technology LAKSHMANGARH (Raj.) (School of management studies) and submitted to Mody University, Rajasthan in partial fulfillment of the requirement for the award of degree of Masters of Business Administration. BHARTI GUPTAMBA 2ND YEARAKNOWLEDGEMENTEvery work involves efforts and inputs of various kinds and people.Firstly I would like to thank the head of the organization DR.
A.K. JAIN & entire finance department of SHRIRAM PISTONS & RINGS LIMITED PATHREDI UNIT and I sincerely acknowledge with deep sense of gratitude to my project mentor Mr. SANJEEV AGGARWAL (Deputy Manager, accounts) and project guide Mr. OMPRAKASH DHANETIA (Senior executive), for enhancing my understanding of the project topics and enabling me to appreciate finer nuances of the subject and helping me in successful accomplishment of the project entitled “INVENTORY MANAGEMENT OF SPRL, PATHREDI UNIT”. I would like to express my immense gratitude towards our institution Mody University of science & Technology, which created a great platform to attain Profound practical skills in the field of MBA, thereby fulfilling our most cherished goal.
I would also like to express my deepest gratitude to Dr. DK Agarwal (Dean, Mody University COBMEC), Dr. MANISH DIDWANIA (Mody Univeristy) , Mr. VIVEK SHAKYA (HR Executive of SPRL, PATHREDI unit) and the entire account Department staff of SPRL, Pathredi unit for their help and guidance, without which the completion of this project would have been extremely difficult.
Lastly, I would like to thank Mr. Sanjeev Aggarwal (Deputy Manager, accounts) and Mr. Vivek shakya (HR Executive) as he found me credible enough to work for SPRL and selected me for challenging project.BHARTI GUPTAMBA in Finance & HRMody University, Lakshmangarh (Distt.Sikar)PREFACETraining is a prominent part of the studies. Training assists for the improvement of the standard of knowledge. This field of business professional study is deficient without the practical Knowledge. That’s why; summer training programme is designed as a Glimpse of real work environment of a firm.
This real life scenario distinguishes from the encouraging exercise in all artificial environments. The project has been used in simple words to describe the competition in real life scenarios. I expect that this work will be helpful for managers of Shriram pistons ; rings limited of pathredi unitFor this purpose, I got an opportunity to undergo training at Shriram pistons ; rings limited RIICO Industrial Area, Pathredi (Rajasthan)ABSTRACTIn this I have emphasized on inventory management process and it’s techniques in a manufacturing company of PATHREDI unit. Inventory management has emerged as most of the important tools to improve operational efficiency over the last 30-40 years across the whole world. The manufacturing industry boost it for profit maximization in order to solve unemployment problem, it manifest new technologies through this saving of money, time and manpower.
The aim of inventory administration is to hold inventory at the lowest potential charge.TABLE OF CONTENTSSR.NO.
SUBJECT COVERED PAGE.NO. Executive summary 10-111. Introduction 12-132. Company profile 14-323. Organization structure of SPRL Company 33-354. Balance sheet 36-375.
Objective 386. Research methodology 39-407. Theoretical framework 41-638. Inventory management process at SPRL 64-669. Findings 6710.
Suggestion 6811. Limitation 6912. Conclusion 7013. Bibliography 7114. Executive Summary• This project was undertaken at the Shriram piston and rings limited pathredi unit, at the account Department. During the Summer Training I have tried to cover the glimpse of overall working of the organization.
• This report talks about the company first, and then further it talks about the financial aspects of the company.• Afterward it proceeds towards the theoretical aspects of the project report and about various research methods used for the data collection.• Further is discussed about the various aspects and techniques used in inventory management.• Every organization needs inventory for smooth running of its activities.
It serves as a connection between production and distribution processes. The investment in inventories composed the most significant part of raw material, spare parts etc. Therefore, it is very necessary to have proper control and management of inventories. The motive of inventory management is to safeguard availability of materials in sufficient quantity as and when required and also to linger down investment in inventories. Raw materials, goods in process and finished goods all represent various forms of inventory. It is therefore absolutely indispensable to manage inventories efficiently and effectively in order to avoid unnecessary investments. The reduction in excessive inventories carries a favorable impact on the company’s profitability.
• The study starts with an introduction to inventory management, Company’s profile, its Vision & Mission, Achievements, milestones, code of conduct, organization structure and also the need for study, review of literature and objectives are set out for the study. Research methodology, Data analysis & Interpretation, Findings and Suggestions of the study follow. • One of the main areas of the project is the analysis part, where the data are analyzed & interpreted, to find out how the inventories were managed. Some of the tools used in inventory are regarding to:? Safety Stock? FIFO analysis? ABC analysis? FSN analysis• And then conclusions, limitations & scope for further study were discussed.CHAPTER: 1INTRODUCTIONFinancial Management is related with the responsibilities of the financial manager in the business firm. Financial managers actively manage the financial aspects of any type of business, which are categorized as financial and non-financial, large and small ,private and public, profit seeking and non-profit.They execute such diverse task such that budgeting, forecasting of financial affairs, management of cash, and administration of credit facilities, analysis of investment, funds management and inventory management.
A term inventory refers to the stock file of the goods or products that any firm is contributing for sale and the components which make the product. In other words, inventory is composed of assets that will be showed in future period in the normal course of the business operations. Inventory control is crucially very necessary almost in every type of business, whether product or service. Inventory control adjoins almost every aspect of operations. A proper equilibrium must be afflicted to maintain proper inventory with the least financial impact on the customer. Inventory control is the activity which maintains stock keeping items at desired levels. In manufacturing since the emphasis is on physical product, inventory control emphasis on material control.
“Inventory” means physical stock of goods, which is kept in hands for smooth and efficient running of future affairs of an organization at the minimum cost of funds blocked in inventories. The elementary reason for carrying inventory is physically impossible and economically impractical for every stock item to materialize exactly where it is required and exactly when it is required. Inventory management is the aggregated functioning of an organization which deals with the supply of materials and associated activities in order to attain the maximum co-ordination and optimum expenditure on materials. Inventory control is the most prominent function of inventory management and it forms the nerve center (assurance) in any inventory management organization. An Inventory Management System is a necessary element in an organization. It is composed of a series of processes or procedure, which offers an evaluation of the organization’s inventory. The assets which firms store as inventory in anticipation of need in SHRIRAM PISTONS AND RINGS LIMITED along with their sub categories are:• Raw materials• Stores spare items• Work in process (Semi Finished goods)• Finished goods CHAPTER: 2 COMPANY PROFILEI. OVERVIEW From a modest emergence in 1972 to one of the leading India’s largest integrated manufacturers of different products such that; Pistons, Pins, Rings and Engine Valves which is all the history of SPRL- a story of courage and determination.
It has exceptional ancestry of SHRIRAM group which is said to be one of INDIA’S oldest and most reputed industrial houses. It is a story of positioning customer first, long-term partnerships with globalized technology leaders, continuous investment in modern manufacturing application, constant pursuit of quality and investment in the development of people. SPRL employs 4000+ skilled employees.
It has an annual turnover of approx. US$176 million and has recently placed as a second and most modern new Plant at PATHREDI which lies next to BHIWADI in Industrial Area (Rajasthan) wherein the distance is about 60 KMS from Delhi, to enlarge capacity and to provide the latest technological products to all its customers in India and internationally abroad. . SHRIRAM Pistons ; Rings Limited manufactures sale out automotive components in India and abroad. The company also provides pistons, piston pins, piston rings, and engine valves. It serves OEMs of passenger vehicles, two/three wheelers, commercial vehicles, tractors, and industrial engines. The company was incorporated in 1963 and its headquartered is in New Delhi, India.II.
GENERAL INFORMATIONName: SHRIRAM PISTON ; RINGS LIMITEDNature of business: Manufacturing sectorScale: Large – scale organizationAdditional business: Wholesaler along with supplierYear of establishment: 1972Website: www.shrirampistons.comIII. CLIENTELE: • Ford motors• General motors• Honda SIEL• Mahindra ; Mahindra• Maruti Suzuki• Nissan motors • Suzuki powertrain• Tata motorsIV. BOARD OF DIRECTORS: The minds behind the exceptional products that we offerNAME DESIGNATIONShri Pradeep Dinodia ChairmanShri A.
K. Taneja Managing Director ; CEOShri R. Srinivasan Joint Managing DirectorShri Luv D. Shriram Wholetime DirectorDr. Peter Neu Non-Executive DirectorShri N.
Okano Alternate Director to Shri M. SekimotoShri Hari S. Bhartia Alternate Director to Dr. Peter NeuSmt. Meenakshi Dass Alternate Director to Dr. Peter NeuShri Ravinder Narain Alternate Director to Dr.
Peter NeuShri C.Y. Pal Alternate Director to Dr. Peter NeuMr. Ralf Buschbeck Alternate Director to Dr. Peter NeuShri M. Sekimoto Independent DirectorShri Inderdeep Singh Independent DirectorMr.Kiyoto Tone Independent DirectorV.
HEAD OFFICES: • GHAZIABAD• PATHREDIVI. REGIONAL SALES OFFICES (RSO): • Delhi- head office• Jalandhar• Pune• Banglore• Kolkata VII. GODOWNS:• Bangalore• Pune• Chennai• Hyderabad• Ahemdabad• Kolkata• Patna• Indore • Jaipur• Gurgaon • Sahibabad• Ghaziabad• Jalandhar• New delhiVIII. SALES OFFICE:• Indore• chennaiIX. BANKERS: • UCO bank• CITI bank• Corporation bank- A premier public sector bank• HDFC bank• State bank of Hyderabad• HSBC bank• IDBI bankX. AUDITORS: M/S DELLOITE Hanskins ; Sell, Gurgaon, HaryanaXI.
MAJOR COMPETITORS: • Federal mughal• IPL: Indian piston limited• SAM- Krg piston limited• Sunbean auto limitedXII. MANAGEMENT TEAM: PRINCIPAL EXECUTIVESNAME DESIGNATIONShri A.K TANEJA Managing director ; CEOShri R . Srinivasan Joint managing drector and company secretaryShri V.
K. Jayaswal Executive DirectorShri Davendra Mishra Executive DirectorShri Jenendra Anand Executive DirectorShri Naveen Agarwal Executive DirectorShri Arun Shukla Dy. Executive DirectorShri Vinod Raheja Dy. Executive Director ; CFOShri rajan Nanda Dy. Executive DirectorShri Sandeep Kalia Dy. Executive DirectorSmt. Poonam Bharti Dy.
Executive DirectorXIII. AWARDS AND ACHIEVEMENTS:? Awards from Yamaha:SPRL has received the Excellence Award for Quality 2017 from Yamaha.? Awards from Maruti Suzuki:________________________________________Maruti Suzuki has awarded SPRL its Certificate of Appreciation in light of our superior performance in Design and Development in 2016-17.? Awards from Cummins Category Partner:In Appreciation of superior performance with a commitment to deliver value, Cummins is pleased to award the status of Category Partner to Shriram Pistons ; Rings Ltd? Awards from Government of IndiaRecognition by DSIR (Department of Scientific ; Industrial Research- Government of India) for “IN HOUSE R & D”, “BEST FOUNDRY AWARD” from Institute of Indian Foundry Men ; World Foundry Men Organization. Awards from Engineering Export Promotion Council of India – “Star Performer – Engine Parts”• Award for Export Excellence – Northern Region (EEPC INDIA)• Certificate of Excellence – Star Performer (EEPC INDIA)• Award for Star Performer (EEPC INDIA)? Awards from Industry AssociationsSPR has received following awards from Automotive Component Manufacturers Association of India (ACMA), Excellence in Technology, and Excellence in Exports, Manufacturing Excellence, Quality, and Productivity? Awards from JIPM (JAPAN)Total Productive Maintenance (TPM) Excellence and Special Awards• TPM Special Award for Achievement (JIPM)• TPM Award for Excellence (JIPM)? Awards from OEMSPR supplies products to almost all the OEMs within India.
The company has received many awards from various OEMs for Technology, Quality, Best Vendor, Development support etc. (Awards received from Ashok Leyland, Bajaj Auto, Cummins, Honda Motor Cycles ; Scooters, Honda SIEL Cars, Kirloskar, Maruti Suzuki, Tata Cummins, Tata Motors, WABCO etc.)? Award for Cost Competitiveness (Honda Motorcycle ; Scooter) • Award for Best Supplier – Engine Proprietary (Swaraj Mazda) • Silver Award for Quality (Bajaj Auto) • Gold Award for Quality (Honda)• Award 2016 for Innovation• Bronze Award for Quality (Bajaj Auto)• Winner – Quality Co-Creation Competition(Mahindra ; Mahindra)• Award for Vendor Performance (Suzuki Motorcycle)• Derisking Award (Maruti Suzuki)• 1st Runner Up – Quality Co-Creation Competition (Mahindra ; Mahindra)• Bronze Award for Quality (Bajaj Auto)• Award for participation -VendorConference (Maruti Suzuki)• Annual Commodity Award for Engine Proprietary – Farm Division (Mahindra ; Mahindra)• Award for Vendor Performance (Suzuki Motorcycle)• Silver Award for Overall Performance (MARUTI SUZUKI)• Award for Best Initiative on Sustainability (Cummins)• Award for Super Performance (Maruti Suzuki)• Award for participation -VendorConference (Maruti Suzuki)• Annual Commodity Award for Engine Proprietary – Farm Division (Mahindra ; Mahindra)• Silver Award for Overall Performance (Maruti Suzuki)• Award for Best Initiative on Sustainability (Cummins)• Award for Super Performance (Maruti Suzuki)• Grand Award for QCDDM (Honda Motorcycle ; Scooter)• Award for Human Resource Initiatives (Maruti Suzuki)• Award for Vendor Performance – Quality (Suzuki Motorcycle)• Award for Outstanding QCLDM Performance• Engine Proprietary (Ashok Leyland)• Award for Outstanding Contribution – Supply Chain Management (VE Commercial Vehicles)• Award for Overall Contribution – Supply (Renault Nissan)• Award for Performance (Honda)• Award for Good Quality Performance (Wabco)• Award for Outstanding Performance (Mahindra ; Mahindra)• Award for Commendable Performance – Green Vendor Development Program (Hero MotoCorp)XIV. MISSION of SPRL:• Sales ; profit growth/leadership• Strong relationship with collaborations• Preferred OE supplier• Employee development• Superior returns to stakeholders• Care for environment and safetyXV.
VISION of SPRL:• World Class Company, preferred by world class customers• Motivated, dedicated and system oriented employees• Safe and healthy workplaceXVI. PRODUCTS• Plain Compression Ring• Inside Stepped Ring• Inside Beveled Ring• Taper Napier Ring• Reverse Torsion Ring• Key Stone Ring• Half Keystone Ring• Taper Rings• Rikvent Ring• Rikvent Ring• CNC Seat Grinder With Feedback• Flame Hardening Machine• Pistons• Pin Bore Shapes• Cooling Gallery Piston• Twin Ring Carrier Piston• Liteks Design• High Tension Conformable Chrome (Htcr)• Mono-Metallic Engine Valves• Bi- Metallic Engine Valves• Forged Finished Engine Valves• Profile Hardened Engine Valves• Chip Welded Engine Valves• Chip Welded Engine Valves• Seat Stellited Engine Valves• Seat Hardened Engine Valves• Chrome Plating• Tufftriding (Nitro Carborising)• Ring Carrier Piston (Rcp)XVII. HISTORY ; MILESTONES:Shriram Pistons has been bringing the best to the industry since 1972. By joining hands with the Industry’s biggest and experienced, we created a firm that promised reliability and strength with every product. We strive for quality that’s unmatched by any other!? 1972:Year of IncorporationSales Turnover – Rs. 3 MillionTechnical Collaborations with – KS KolBenschmidt GmbH, Germany? 1978:Technical Collaboration with Riken Corporation, Japan? 1989:Technical Collaboration with Honda Foundry Co. Ltd.
, Japan? 1993:Sales Turnover of Rs. 500 MillionTechnical Collaboration with- Fuji Oozx Inc., JapanCommencement of Engine Valves Manufacturing? 1994:Received ISO 9001 Certificate from TUV, Germany? 1995:Start of Manufacturing – Steel Rings? 1996:Sales Turnover of Rs. 1000 Million? 1999:Received QS 9000 Certificate from TUV, Germany? 2001:Received ISO 14001 Certificate from DNV, NetherlandAchieved production of 2 Million Rings per month – Dec 2000Sales Turnover of Rs. 2000 Million? 2004:Received TPM Excellence Award from JIPM, Japan (First in its category to achieve this award)Sales Turnover of Rs.
3000 Million? 2006:Established three new piston machining lines to meet the requirement from Global OEMs (Ford, Renault etc)Achieved production of 1 Million Engine Valves – September 2005? 2007:Received TPM Special Award from JIPM (First in its category to achieve this award)Sales Turnover of Rs. 5000 Million? 2008:Received Q1 Certification from Ford MotorsRecognition of In-house R;D Centre by DSIR (Dept. of Scientific ; Industrial Research), Govt.
of IndiaStart of Manufacturing – IP Rings (Ion Plated)Achieved production of 1 Million Pistons per month – Jan 2008Achieved production of 5 Million Rings per month – Feb 2008? 2009:Start of manufacturing large dia Engine Valves for Railways and off-road vehicles? 2010:Sales Turnover of Rs. 7500 MillionSPR becomes the largest manufacturer of Piston Rings in IndiaStart of manufacturing – CPC Rings (Composite Plating of Chrome)Achieved production of 2 Million Engine Valves per month – July 2009? 2011:Start of production at Pathredi Plant? 2014:SPR inaugurates Tech Centre on 4 th February, 2014SPR opens a new sales office in Chennai on 28 th October, 2014? 2015:Became OEM supplier to JLR? 2016:Achieved a milestone turnover of 14100 million RupeesXVIII. CODE OF CONDUCT• This Code of Conduct contemplates the standards and values of the SHRIRAM culture and also safeguards compliance with Clause 49 of the Listing Agreement with the Stock Exchange.
• The Code of Conduct for Shriram Pistons and Rings Ltd. is to safeguard ethical conduct in the business. The matters covered in the Code are prominent part for the Company, all the Board members, Senior Management, its shareholders/stakeholders and business partners, for conducting their business.
• All Board members and Senior Management personnel shall mention and execute the code of Conduct in their official day to day activities.• The Board shall ascertain the appropriate action to be taken in the event of violation of this Code.• Doing the right thing even when it’s hard is what forges our strength to succeed.Certain code of conducts applicable in SPRLEthical ConductAll Senior Management personnel and Board members of the Company shall contract on behalf of the Company with honesty, professionalism and integrity, as well as high moral and ethical standards.
Such type of code of conduct shall be fair and transparent and be perceived to be by third parties.Regulatory ComplianceAll Board members and Senior Management personnel shall conduct in his or her business by complying with all applicable laws, norms and regulations in the form of both in letter as well as in spirit form in all the territories in which he or she operates. If the ethical and professional values below that of the code are set out in the applicable laws and norms then the standards of the Code shall prevail.Financial Reporting and RecordsThe Company shall prepare and maintain its accounts fairly and accurately in accordance with the accounting and financial reporting values which generally indicate the accepted guidelines, principles, standards, laws and regulations of India.
Internal accounting and audit procedures shall fairly and accurately reflect all of the company’s business transactions and nature of assets. All necessary needed information shall be attainable to Company auditors and other authorized parties and government agencies.There shall be no willful omissions of any Company transactions from the books and records, no advance income recognition, and no hidden bank account and funds.Conflicts of InterestThe responsibility of all Board members and Senior Management personnel towards the Company demands that he or she avoids and discloses actual and potential conflicts of interest wherein the conflict of interest exists, where the interests or benefits of one person or entity conflict with the interests or benefits of the Company. Some of the Examples include:-A. Employment / Outside EmploymentIn reflection of employment with the Company’s perspective, Senior Management personnel are expected to dedicate their full observation to the business interests of the Company. They are strictly prohibited from engaging in any activity that obstruct with their performance or responsibilities to the Company, or is otherwise in conflict with or damage to the Company.Senior Management personnel are strictly prohibited from accepting simultaneous employment with suppliers, customers, developers or competitors of the Company, or from taking part in any activity that enhances or supports a competitor’s position.
In addition to all Board members and Senior Management personnel must communicate to the Company’s audit committee and if they have any kind of interest then they may conflict with the business of the Company.B. Outside directorshipsIt is a conflict of interest to serve as a director of any other company that could be injurious to or in conflict with the interests of the Company.C.
Business interestsIf a Board member or Senior Management personnel is considering investing in any customer, supplier, developer or competitor of the Company then he or she must first concerned and should keep in mind to ensure that these investments do not compromise on their duties or responsibilities to the Company. The Company’s guideline requires that information to Company’s audit committee should be given while making this kind of investment. Many more of the factors should be examined in order to ensure whether a conflict exists which includes the size and nature of the investment; their access to confidential information of the Company or of the other Company and the nature of the relationship between Company and the other Company.D.
Related partiesAs a general norm, Board members and Senior Management personnel should avoid conducting Company business with a relative, or with a business in which a relative is associated in any prominent role. These Relatives include spouse, siblings, children, parents, grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, step relationships, and in-laws. The Company discourages the employment of relatives of employees/Directors in positions or assignments within the company. Further, the Company constrains the employment of such individuals in positions that have a financial dependence or influence (e.g.
an auditing or control relationship, or a supervisor/subordinate relationship).Notwithstanding that such or other instances of conflict of interest exist due to any historical reasons, adequate and full disclosure by the interested Board members and Senior Management personnel should be made to the Company’s management. It is also mandatory for every employee to make a full disclosure of any interest which the employee or the employee’s immediate family, which would include parents, spouse and children, may have in a Company or firm which is a supplier, customer, distributor of or has other business dealings with his or her Company.E. Corporate OpportunitiesAll Board members and Senior Management personnel may not utilize for their own personnel gain, any new business opportunity to the Company’s area of business viz., auto components, unless the proposal is informed in writing to the CMG, and the Company in the CMG declines to pursue such an opportunity. The Company will fetch its decision within three months of receiving the written proposal.F.
Other situationsBecause other conflicts of interest may arise then it would be impractical to attempt to list all possible circumstances. If a proposed transaction or circumstances raises any questions or doubts then all Board members and Senior Management personnel must ask the Company’s audit committee.Quality of Products and ServicesThe Company shall be perpetrating to supply goods and services which have highest quality valuable standards, backed by efficient after-sales service consistent with the requirements of the customers to ensure their total satisfaction.Health, Safety and EnvironmentThe Company must endeavor to offer a safely and healthy working environment and observe the code of conduct of its business aspects, with all rules and regulations which are related to the preservation of the environment of the country.Equal-opportunities employerThe Company along with all Board members and Senior Management personnel should provide equal chances to all of its employees and all qualified applicants for employment irrespective to their race, caste, religion, color, ancestry, marital status, sex, age, nationality and disability. Employees of the Company shall be treated with dignity in accordance with maintaining a work environment which shall be free of sexual harassment whether it might be physical, verbal or psychological.Gifts and DonationsNo Board member or Senior Management personnel shall (directly or indirectly) accept or receive any gift, entertainment, trip, discount, service, or other benefit from any organization or person doing business or competing with the Company (other than modest gifts/ benefits of nominal value or entertainment as part of normal business courtesy and hospitality) which would or reasonably appear to be capable of impacting such person to behave in a manner which is against the interest of the Company.Political Non-AlignmentThe Company shall not support, directly or indirectly, any specific political party or candidate for political office.
The Company shall not offer or give any Company funds or property as donations, directly or indirectly, to any political party, candidate or campaign.Corporate CitizenshipThe Company, all Board members and Senior Management personnel shall be committed to be a good corporate citizen, not only in compliance with all relevant laws and regulations, but also by actively assisting in the improvement of the quality of life of the people in the communities in which it operates, with the objective of making them self-reliant. Such social responsibility would comprise: initiating and supporting initiatives in the field of community health and family welfare, vocational training, education and literacy, providing employment to physically challenged people and encouraging the application of modern scientific and managerial techniques and expertise.XIX.
CULTURE? Fair & Transparent? Performance Driven? Passion & Energy? Fun Place to work? Collaborative? LearningXX. COLLABORATIONS:? (KS) Kolbensichmidt Germany – diesel piston? Honda foundary Japan – petrol/gasoline piston ? Riken corporation Japan- steel rings? Fujioox Japan- engine wallCHAPTER: 3ORGANIZATION STRUCTURE OF SPRL COMPANYBoard of directorManaging director and CEOJoint managing directorExecutive director (ED)Deputy Executive directorExecutive director Executive director Executive director Business development Project Ghaziabad ED ED ED CFO Marketing O&P PATHREDI Senior General Manager General Manager Deputy General Manager Assistant General Manager Senior Deputy Manager (Senior Plant Manager) Deputy Manager (Senior Plant Manager) Manager one Manager two Deputy Manager Assistant Manager HOD (Head of Department) HOD HOD HOD HOD HOD HOD HOD Piston Engine Ring Quality Maintenance Industrial SafetyGroup Valls & PAW (Power relation HOD HOD Air & water) HOD Accounts Supply Chain Management O & PSenior engineer/ Senior OfficerEngineer/ OfficerAssistant Engineer/ Assistant OfficerSenior AssociateSenior engineer oneSenior engineer twoSenior engineer threeAssociate engineer threeAssociate engineer twoAssociate engineer oneDET (Diploma Engineer Trainee)Associate (Labour)CHAPTER: 4BALANCE SHEET AS ON 31ST MARCH 2018 (Amount in Lakhs Rs)PARTICULARSStandaloneAs atMarch 31, 2018 March 31, 2017 Audited Audited ConsolidatedAs atMarch 31, 2018 March 31, 2017 Audited Audited ASSETS Non – current assets a) Property, plant and equipment b) Capital work-in-progressc) Intangible assetsd) Financial assets (i) Investments(ii) Other financial assets) e) Other non-current assetsCurrent assetsa) Inventoriesb) Financial assets(i) Investments(ii) Trade receivables(iii) Cash and cash equivalents(iv) Other bank balances(v) Other financial assetsc) Current tax assets (net)d) Other current assets 55119 57350 1123 935 420 324 5 51039 14477152 632528104 240382003 80132110 23781232 20617881 153031239 16330 442667 3253 55119 573501123 935420 324- -1039 14477152 632528104 240382003 80132110 23781232 20617881 153031239 16330 442667 3253 TOTAL ASSETS 149094 135445 149094 135445EQUITY AND LIABILITIES Equity a) Equity share capitalb) Other equityLiabilities Non – Current liabilities a) Financial liabilities (i) Borrowingsb) Provisionsc) Deferred tax liabilities (Net)d) Other non-current liabilitiesCurrent liabilities a) Financial liabilities (i) Borrowings(ii) Trade Payables(iii) Other financial liabilitiesb) Other Current Liabilitiesc) Provisions d) Current Tax Liabilities (net)TOTAL EQUITY AND LIABILITIES 2237 223789089 772016580 12054 3151 30853239 340323 194149 348526296 209329105 84984111 3680891 851223 0149094 135445 2237 223789089 772016580 120543151 30853239 340323 194149 348526296 209329105 84984111 3680891 851223 0149094 135445CHAPTER: 5OBJECTIVESOBJECTIVE OF THE STUDYPRIMARY OBJECTIVE• To analyze the efficiency of Inventory Management of SHRIRAM PSTON AND RINGS LIMITED, PATHREDI UNIT.SECONDARY OBJECTIVE• To reduce investment in inventory and increase the profitability of company.• To classify the various components based on its value and movements.• To analyses changes in the stock of RM, store spare, WIP, FG• To analyse its inventory management techniques used in SPRL.
• To analyse inventory consumption process and method • To find out the composition of inventory.• To evaluate the inventory management practices of SHRIRAM PISTONS AND RINGS LIMITED• To offer suitable suggestions for the improvement of inventory management practices.• To learn how SPRL keeps all the data of inventory perfectly. • To study how finance department of SPRL works.CHAPTER: 6REASEARCH METHODOLOGYNature of the studyThe research design that has been used for this research is descriptive and analytical research.
As in this study researcher had analyzed individual characteristics of the respondent and in this research, researcher found about the inventory procurement process and techniques used at SPRL Company also to find out the norms of the company which they are keeping in order to manage and effectively maintaining the inventory. Researcher had used facts or information which are already available, and analyze these to make a critical evaluation of the performance.SCOPE OF THE STUDYInventory management is a simple concept which neither have too much of stock nor have too little. Since there can be a considerable costs involved in staying both above and below the optimal range where the careful inventory management can create a enormous difference in the right balance which can be quite a complex as well as time consuming task without the usage of right technology. Inventory management sanctions the business to meet or surpass expectations of the customers by making the products readily available.The scope of the study includes the ABC & FSN Analysis of Raw Materials, work in progress and finished goods for four financial years.Data collection techniquesThe project consists of two parts primary data and secondary data.
Primary data? Data are collected through personal interviews and discussion with Finance Executive.? Data are collected through discussion with Material Planning (Accounts Deputy Manager)? The sources of primary data are actual work experience in the SPRL Company, PATHREDI UNIT discussion with the senior finance manager, deputy finance manager and senior officers and studying company profile, quarterly reports of SPRL Company.Secondary data? The data are collected from the annual reports maintained by the company for the current months of march, April, and may 2018? Data are collected from the company’s website.? Books pertaining to the topic.? Data are collected from the newspaper, magazines etc.CHAPTER: 7THEORETICAL FRAMEWORK OF INVENTORYINVENTORYInventory means stock or warehousing as it is a valuable and essential asset of SPRL Company, PATHREDI unit. It states that it is a process of ordering storing and using SPRL inventory which is an aggregation of raw material, component and finished good.
It is management of inventory and stock which are those goods and materials that a business holds for the ultimate goal of resale.Technique of inventory management is to cut losses, identify responsible person, setting up of re-order level.It is also an ongoing process of moving parts and products into and out of the SPRL company location. SPRL manage their inventory on monthly basis, as they place new order for the product and ship order out to customer.PROCUREMENTProcurement is simply a purchase agreement with vendors. It asserts the process of buying materials and obtaining service from vendors and it should be done in such a way that it is ordered in appropriate quantity at proper time with exact and proper value. It is basically a purchasing process which controls the quality, quantity, sourcing and delivery timing into the process of production in order to make sure best possible total cost of ownership.
It is a process of selecting vendors to construct payment terms and conditions, strategic evaluation, selection, negotiating the contract and the purchasing of goods. It states a process of procuring (acquiring) all the goods, services and the task which is essential for the organization. It is an umbrella term (phrase that cover wide range of concept of a common category) where the term purchasing is found.TYPES OF INVENTORIESInventories play a vital role in a business or depending on nature of the businesses. The inventories may be classified as:-(I) Raw MaterialsThese are those materials and components which are required for the use in making up a product. The basic inputs for this are required for the converting into finished products through manufacturing process. Raw materials are those inventories, which have been obtained and reserved for future production.
(II) Work in processWIP postulates those Materials and components that have begun their conversion into finished goods. Materials which are furnished to the shop floor and which have yet not converted into finished products are referred as value added materials to the magnitude of labor cost sustained.(III) Finished GoodsFinished goods are absolute part which is ready for the ultimate purpose of sale as the customer is ordering. These goods have been checked and then have been sent for final examination so that they can be relinquishing out to work-in-process and into finished goods. From this point, finished goods can be sold to end user, can be sent to distribution centers, can be sold to retailers, can be sold to wholesalers, or held in expectation as per the customer order.
The raw material inventory carry those item that are acquired by the firm from other and are converted into finished goods through the manufacturing (production) process. They are important ingredients of the final product. The working process of inventory composed of items currently being used in the production process.They are normally said to be as semi-finished goods that are at various stages of production in a multi stage production process. Finished goods is the one which represents final or completed products which are available for the ultimate goal of sale .
The inventory of such goods constitutes of items that have been produced but are yet to be sold.Inventory is a current asset which distinguishes from other current assets because only financial managers are the only people who are not involved. Rather than all the functional areas, finance, marketing, production, and purchasing are involved. The views regarding the appropriate level of inventory would differentiate among the different functional areas.The job of the financial manager is to reconcile the conflicting view points of the various functional areas regarding the maximization of the owner’s wealth.
Thus, inventory management, like the management of other current assets, should be concerned with the overall objective of the firm. It is in this context that the present aspects are devoted to the main elements of inventory management from the view point of financial management.Attention is focused here to basic concepts which are relevant to the management and control of inventory.NEED TO HOLD INVENTORIES• TRANSACTION MOTIVE:This is related to the necessity of maintaining inventory to facilitate smooth production and sales operations. Each and Every firm has to conserve some level of inventory so that every individual can meet out its day-to-day transaction of sales, production process, customer demand etc.
The finished goods as well as raw material are kept as materials for smooth production process in the firm.• PRECAUTIONARY MOTIVE:Precautionary motive for holding inventory is to offer a protection when then actual level of activity is distinguished with others. This kind of inventory is offered when there is an unpredictable change in the demand and supply forces.
A firm should keep some of the inventory for unforeseeable situation like huge amount of loss incurred due to natural calamities in a specific area, strikes; lay outs etc. that may occur so, the firm should have some of the finished goods as well as raw-materials to meet the some kind of situations.• SPECULATIVE MOTIVE:This motive influences the decision to increase or decrease the levels of inventory in order to attain the advantages in the fluctuation of prices. The firm may keep some inventory in order to exploit an opportunity to create huge profit due to price fluctuations.ESSENTIALS OF INVENTORY CONTROL• The essential for inventory control are specified below:- • There should be Proper classification of materials including codification, material standardization and simplification.• The operation of a system of internal check should be there to safeguard that all transactions related with material and equipment are checked or not by properly authorized and independent persons.
The operation of a system of imperishable inventory is done so that it is possible to determine at any time, the amount and value of each kind of material in stock.• An appropriate method for evaluation of materials is necessary because it will influence the cost of jobs and the value of closing stock of materials.Costs involved in InventoryEach and Every firm tries to assist their inventory depending upon the necessity and the other features for holding such inventory so that some cost can be incurred there which are as follows:Carrying CostThis is the cost incurred in keeping or sustaining an inventory per unit of raw materials, WIP or finished goods. Here there are two basic costs Involved.Total carrying cost = (carrying cost per unit) X (Average inventory)A) Cost of StorageIt incorporate cost of storing per unit of raw materials by the firm.
This cost also encompass the storage of materials like spaces for rent occupied by stock, security of stock, cost of infrastructure, cost of insurance, warehousing costs, handling cost etc.B) Cost of FinancingThese costs incorporate the cost of funds that is invested in the inventories. It includes a firm which necessitates inventory control system to successfully manage its inventory. The required rate of return for the investments in inventory also encompasses the storage cost.
The carrying cost includes both real cost as well as opportunity cost where both are related to the funds. The total carrying cost is entirely inconstant and upsurge indirectly proportional to the level of inventories carried.Cost of OrderingThe cost of ordering incorporates the cost of asset i.e.
inventories. It is the cost of producing and executing of an order encompassing cost for paper work and contacting with the supplier.The ordering cost is opposite proportional to annual inventory of a firm. The ordering cost might have a fixed constituent, which is not affected by the order size and inconstant elements which changes according to the order size.Total Ordering Cost = (No of orders) X (cost per order).
Cost of Stock outIt is also known as hidden cost. The stock out is the circumstance where the firm is not having any kind of units of items in store but still there is a demand for that item either by the customers or by the production department. The stock out inaugurate to zero level inventories so, there is a cost of stock out that the firm faces for a circumstance of lost sales or back orders. The stock outs are quite often expensive.
In case of finished goods, even the goodwill of the firm can be affected due to customer’s dissatisfaction where they might have lose business also as in raw materials or work in process the production process can be ended because it is expensive as employees will be paid for the time they haven’t worked in producing goods.The carrying cost and the ordering cost are opposite forces so they establish the level of inventors in a firm.Total Cost = (Cost of items purchased) + (Total Carrying and ordering cost)FRAMEWORK OF INVENTORY MANAGEMENT AT SPRLInventory is managed at SPRL through analyzing sales data and deciding how much ordered stock should be kept then after ordering having an eye on how quickly item is being delivered.For managing the inventory we need to know when to re-order. For effective and efficient management and control of inventory SPRL hires inventory control specialist to manage all the merchandise items and returns.SPRL includes the type of inventories:1. Raw material- It includes:• Aluminium/ alloy• PIN bar / tube • Steel ring wire- imported• Valve steel• Stellite powder• Metco powder • Others like: silicon, copper, Nickle, RCP inserts etc.
2. Store spare items- It includes:• Specific stores• Spares• Tools• Packing material• Oils• Chemicals• Consumables• Other (B. out material)These are called costing and are calculated on the basis of moving average price. Like:EXAMPLE:Process of calculation of moving average price:• Suppose on 01/05/18 in SPRL, quantity ordered and purchased of 100 at Rs.10 price so it will total cost 1000 (100*10).• Similarly, on 04/05/18 in SPRL, quantity ordered of 100 at Rs.11 price so it will total cost 1100 (100*11).• So total weighted average price will be 200 quantity (100+100) and total cost will be2100 (1000+1100).
• Now we get the new weighted average price; 200 quantity will be now purchased at 10.5 (which is a new price on which items will be purchased) which costs 2100 (200*10.5) which is our weighted average cost.• Now we purchased 100 quantity at Rs. 10.
5 price which cost 1050 (100*10.5).• Then on 08/05/18 in SPRL new quantity of 100 will be purchased at price of Rs. 12 which will cost 1200 (100*12).• So total moving average price or the balance will be 11.25 (1050+1200)*100/200.
3. Work in progress- In his standard price is consider and we consider product inventory in this.4. Finished goods- In his standard price is consider and we consider product inventory in this.Inventory consumption1.
First and foremost step for inventory consumption is that material will be issued from store department for the consumption.2. After that material will go to machine and will be consumed.
3. Then, it will become one piston. As there are some inventories which are measured in unit of measurement (quantity) like consumable store in No, raw material in Kg, store spares in Kg, chemicals in Kg etc. these are the example of inventories of SPRL as when these are measured in units of measurement then one piston is made in No. 4. Then operation will be done like costing of that material.
INVENTORY OF SPRL WITH NORMS:ParticularsNORMSQ4- 2015NO. of days STOCK L/RRaw material/ bought out component Aluminium / alloy Pin bar/ tube – INDIANIMPORTED PIN total Steel ring wire Valve steel – INDIANIMPORTED Valve steel total Stellite powder C.I.
ring Bought out component Others Silicon Copper Nickle RCP inserts Other TOTAL • RAW MATERIAL:As per the norms of inventory of all the raw material used in SPRL the graph shows the norms of inventory of raw materials of quarter 4 (Q4) of 2015 which are denoted by the number of days, inventory or stock as on 31.05.2018 and the excess over norms. ParticularsNORMSQ4- 2015NO. of days STOCK L/RPACKING/OILS,LUBS & GASES OILS/LUBRICANTS/GASES PACKING MATERIAL CHEMICALS SPECIFIC STORES TOOLS CONSUMABLES • STORE SPARESAs per the norms of inventory of all the store spare items used in SPRL the graph shows the norms of inventory of store spare items of quarter 4 (Q4) of 2015 which are denoted by the number of days, inventory or stock as on 31.05.2018 and the excess over norms.
DATA of May 2018 of SCRAP sales: INVENTORY- MATERIALS TYPES AS ON 31.05.2018 OF SPRLMaterial Type Sum of Value ROH SPRL Raw materials 13,41,66,126.
12 ERSA SPRL Spare Parts 4,46,76,6877.36 ZCEM SPRL Chemicals 41,71,156.68 ZSSP SPRL Specific Store Mat. 78,15,364.25 ZOGL SPRL oils, Lubes & Gases 12,31,468.
23 ZBOC SPRL Bought Out Materials 1,69,11,014.56 VERP SPRL Packaging Materials 45,22,112.14 ZCON SPRL Consumable Materials 2,21,61,341.397 FHMI SPRL Prod. Resource/Tool 2,48,36,353.72 Grand Total 662681814.5Material Consumption for the Month May’ 2018 Group 18-Mar 18-Apr 18-MayRaw Mat 1352.6 1465.
2 1563.7Direct 215.6 185.6 174Indirect 155.4 128.5 110.9Packing 215 93.
3 115.4B.Out 84.6 110.3 148.5Rep ;Maint 90.6 48.
4 65.8Rep ;Maint PM 0.5 0.9 0.2Grand Total 2114.3 2032.2 2178.
5 • Tools used to manage and control the inventory of SPRL:? ABC Analysis ? FSN Analysis? FIFO Analysis? Safety StockABC ANALYSISMEANINGThe ABC system is a widely used classification technique to identify various items of inventory for purposes of inventory control. On the basis of unit cost involved, the various items are classified into 3 categories: A, consisting of items with the large investment,C, with relatively small investments but fairly large number of items B, which connotes about mid-way between category A ; C. Category A needs the most rigorous control, C requires minimum attention and B deserves less attention than A but more than C.A Class (High Value)CERAMIC FIBRE BLANKET THICK-25 MMROTARY ACTUATOR RAPS 1-90CONNECTING ROD OF STRAIGHTNING M/CNEW SOFT LAP 5365ZZ KIT FOR HG30 L.M.
GUIDE, MAKE-HIWINL.M. BLOCK, TYPE-HGH30CAZAP,MAKE- HIWINL.M.
RAIL-HGR30R600P ,E=20MM, MAKE-HIWINGEARBOX FOR ELECTRIC MOTOR MODEL 5GN5KMEASURING TAPE 15METER LENGTH,WIDE-10MMBEARING P210J YAR2102FS.S.HOSE CLAMP-30 TO 38 MMEQUAL TEE HF-ET-15L.EQUAL ELBOW HF-EE-35LHYD HOSE PIPE WITH SS FITTING 1/4″PISTON SEALRUBBER ‘O’ RING 08 * 2.0 MMSUCTION STRAINER MODEL 30LADJUSTABLE WRENCH (SCREW WRENCH)BEARING SLEEVE FOR 75MM DIA.B.S.SQUARE BAR SIZE 6MM.
B.S.SQUARE BAR SIZE 4MM.
BALL BEARING WITH BRACKET F211JCAM FOLLOWER BEARING MCYR-12ANG.CONT. BALL BEARING 7012CD/P4A DGAANGULAR CONTACT BALL BEARINGTHRUST BALL BEARING-51202BALL BEARING-62102RS1 MAKE-SKFNEEDLE BEARING HK2012BARREL PUMP,ROTARY-TYPECHAIN LOCK SIZE-3/4″ (DIAMOND)B Class (Moderate Value)DOUBLE ROW ANG.CONT.BALL BEARING—3207HACKSAW FRAME-MAKE-JOLLY-SIZE-12″HOSE CLIPS(CLAMP)-WORM DRIVE-S.
S.HOSE CLIPS(CLAMP)WORM DRIVE-S.S.HOSE CLIPS(CLAMP)-WORM DRIVE-S.S.HOSE-CLIPS(CLAMP)-WORM DRIVE-S.
S.TIMING BELT 240H,WIDTH=24 MMTIMING BELT L-322 WIDTH 12.5MMTIMING BELT 1520-8YU-179JTIMING BELT-L-345-WIDTH-25mmV-BELT, 3V-250.V-BELT,B-132POLY V BELT,400J8(1016) TBAWIRE BRAIDED HOSE PIPES.S.HOSE CLAMP-RANGE-11 TO 16mmSIN.
ROW RADIAL BALL BEARING-6013MAKE-SKFSIN.DIRECTION THRUST BALL BEARING-51104ACCELATOR – AMCB TRIPPLE POLE 4 AMPBEARING DOUB.R.CYLINDR.
ROL.NN3009KTN/SPC Class (Low Value)DUPLEX CHAIN-SIZE-5/8″-MAKE-DIAMONDHOSE NIPPLE (BRASS) -SIZE-1/2″L-SWIVEL ELBOW FESTO LCK-1/4-PK-4L-SWIVEL ELBOW-LCK-1/4-PK-6THRUST BEARING 51113TIMING BELT-270L.TIMING BELT,L-322 WIDTH-30MMGLASS FUSE 3 AMP 30.5*6.
4mmCONTACTOR RELAY 24VDC 3TH 2022-OBB4ANGULAR CONTACT BALL BEARINGABC ANALYSISCategories Total No. Items in Classes PercentageA 30 50B 20 33C 10 17Total 60 100ANALYSIS&INTERPRETATION:The above table shows the classification of various components as A, B & C classes using ABC analysis techniques based on unit value. From the classification A classes are those whose unit value is more than Rs.80 and constitutes 50% of total components.
B classes are those whose unit value is between Rs.30-80 constitutes 33% of total components and C classes are those whose unit value is less than Rs.30 constitutes 17% of total components. It is good that the company maintains its inventories based on its value using controlling techniques. FSN ANALYSISMEANINGAll the items in the inventory are not required at the same frequency. Some are required regularly, some occasionally and some very rarely.FSN classifies items into Fast moving, Slow moving and Non-moving.FAST MOVING ITEMSBEARING P210J YAR2102FS.
S.HOSE CLAMP-30 TO 38 MMEQUAL TEE HF-ET-15L.EQUAL ELBOW HF-EE-35LHYD HOSE PIPE WITH SS FITTING 1/4″PISTON SEALRUBBER ‘O’ RING 08 * 2.
0 MMSUCTION STRAINER MODEL 30LADJUSTABLE WRENCH (SCREW WRENCH)BEARING SLEEVE FOR 75MM DIA.B.S.SQUARE BAR SIZE 6MM.CHAIN LOCK SIZE-3/4″ (DIAMOND)DOUBLE ROW ANG.CONT.BALL BEARING–3207HACKSAW FRAME-MAKE-JOLLY-SIZE-12″HOSE CLIPS(CLAMP)-WORM DRIVE-S.
S.HOSE CLIPS(CLAMP)WORM DRIVE-S.S.HOSE CLIPS(CLAMP)-WORM DRIVE-S.S.HOSE-CLIPS(CLAMP)-WORM DRIVE-S.S.
TIMING BELT 240H,WIDTH=24 MMTIMING BELT L-322 WIDTH 12.5MMTIMING BELT 1520-8YU-179JSLOW MOVING ITEMSCERAMIC FIBRE BLANKET THICK-25 MMROTARY ACTUATOR RAPS 1-90CONNECTING ROD OF STRAIGHTNING M/CNEW SOFT LAP 5365ZZ KIT FOR HG30 L.M. GUIDE, MAKE-HIWINL.M. BLOCK, TYPE-HGH30CAZAP,MAKE- HIWINL.M.
RAIL-HGR30R600P ,E=20MM, MAKE-HIWINGEARBOX FOR ELECTRIC MOTOR MODEL 5GN5KMEASURING TAPE 15METER LENGTH,WIDE-10MMB.S.SQUARE BAR SIZE 4MM.BALL BEARING WITH BRACKET F211JCAM FOLLOWER BEARING MCYR-12ANG.CONT. BALL BEARING 7012CD/P4A DGAANGULAR CONTACT BALL BEARINGTHRUST BALL BEARING-51202BALL BEARING-62102RS1 MAKE-SKFNEEDLE BEARING HK2012BARREL PUMP,ROTARY-TYPETIMING BELT-L-345-WIDTH-25mmV-BELT, 3V-250.
V-BELT,B-132POLY V BELT,400J8(1016) TBAWIRE BRAIDED HOSE PIPES.S.HOSE CLAMP-RANGE-11 TO 16mmSIN.ROW RADIAL BALL BEARING-6013MAKE-SKFSIN.
DIRECTION THRUST BALL BEARING-51104ACCELATOR – AMCB TRIPPLE POLE 4 AMPBEARING DOUB.R.CYLINDR. ROL.NN3009KTN/SPDUPLEX CHAIN-SIZE-5/8″-MAKE-DIAMONDHOSE NIPPLE (BRASS) -SIZE-1/2″L-SWIVEL ELBOW FESTO LCK-1/4-PK-4L-SWIVEL ELBOW-LCK-1/4-PK-6THRUST BEARING 51113TIMING BELT-270L.TIMING BELT,L-322 WIDTH-30MMGLASS FUSE 3 AMP 30.5*6.4mmCONTACTOR RELAY 24VDC 3TH 2022-OBB4ANGULAR CONTACT BALL BEARINGFSN ANALYSISCategories Total No.
items in Classes PercentageF 21 35S 39 65N 0 0Total 60 100ANALYSIS;INTERPRETATION:In the above table shows the classification of various components as FSN items using FSN analysis techniques based on movements. From the classification F items are those which moves fastly and constitutes 35% of total components. S items are those which moves slowly constitutes 65% of total components and N items are those which doesn’t move (Non-moving items).
According to data given, there is no Non-moving items. It is not good as the company maintains low percentage in moving items. FIFOFIFO (first in, first out) is an inventory accounting method that says the first items in your inventory are the first ones that leave – meaning you get rid of your oldest inventory first.In warehousing, this describes the method of rotating inventory to use the oldest product first.
For example, a bakery produces 200 loaves of bread on Tuesday at a cost of $1 each and 200 more on Wednesday at $1.25 each. FIFO costing states that if the bakery sold 200 loaves on Thursday, the Cost of Goods Sold (COGS) is $1 per loaf because that was the cost of each of the first loaves into the inventory system. The $1.
25 COGS loaves are still in inventory and would be queued up next to go.CHAPTER: 8INVENTORY MANAGEMENT PROCESS AT SPRLINVENTORY PROCUREMENT PROCESS OF SPRL1. Procurement process begins when there is requirement of some product and user raise demand. Requisition slip come from plant or the company and then user will give indent to purchase or procurement department, where indent is also said to be demand. As soon as demand comes in procurement department then procurement department work (process) starts.2. After that purchase department will consult to the vendor (party) and will ask for ask for the quotation and minimum requirement is quotation of three vendors.3.
Then, these quotation will be reviewed and will be compare quotations of three vendors also quality assurance will be done at the end in which material inspection will be done regarding that whether the quality of that particular material is ok or not. 4. After taking quotations from the vendors it will entered into comparative statement (in which we will mention supplier price) and from which we will get to know that any one of the vendor s on lower side5. Then PO (purchase order will be issued to the vendor who is at the lowest side and then material is sent to the vendor. 6. And after this procurement process is done at the gate entry of the material purchased which includes three types as follows:• Material is purchased through requisition or the user put the indent/ requirement in order to purchase material, where the document is generated which includes the PO(purchase order) number.• By checking the material at minimum order level (MOL). Example raw material purchased at minimum order level for 100 Kg.• Monthly ordering is being done of the material purchased.7. Then, Procurement process takes place in SPRL when three types of material purchased is coming at the gate8. After that material inward process or the gate entry of three types of material purchased is being done with reference to PO (purchase order) quantity which postulates that firstly, purchased material come at the gate is scrutinized whether original copy of bill is there or not and then gatekeeper inspect the quantity that if material is coming in Kg then through weight it will be checked but the material will not be checked if it will come in pieces, where PO (Purchase order is used when the material is purchased from the two parties that is buyer or seller. It asserts the pricing of material, specifications and terms and conditions of the product or service and any additional obligations).9. After the scrutinizing of material at the gate supplier will supply that in store department against that issued PO or if the supplier/ vendor will supply the item of issued PO in procurement department then it will be forwarded to store department and store department will issue GRN (goods receive note) which act as a evidence that goods are received in store department where, MIGO (movement in goods out) is being done n which material is physically checked like how much material has come and how much had yet didn’t came. At store department inventory of the material will be checked in quantity or the unit of measurement (Kg, No, Lt.) etc.10. Then MIGO is opened on the basis of purchase order example purchase order is of Rs.1000me into the company s of 1100 but the quantity came so in this case MIGO will not be opened then they will ask another PO no. On the basis of which again MIGO will be open if they will get another PO no. 11. MIGO is being done for the storing and verification of material and at the time of MIGO financial documents are generated. MIGO are the goods receipt (GR) which is differentiated from MIRO yet it is inter-related which in short is said to be invoice receipt (IR).12. At the time of MIGO. Inventory is debited (DR.) and GR/IR (goods receipt/invoice receipt) is credited (CR).13. After this quality assurance will be done again in which material inspection will be done regarding that whether the quality of that particular material is ok or not.14. After the completion of quality assurance it will go again in store department and from the store department it will come in account department for the verification of bill by account department is done.15. Then passing of the bill come in account department and MIRO (movement in receipt out) will be done.16. MIRO is a way of passing the bill. It is also known as invoice receipt (IR). MIRO is done in order to show amount in party account. At the time of MIRO CGST (central goods and service tax), SGST (state goods and service tax), and GR/IR are debited to the account whereas party will be credited. MIRO is basically used for invoice credit memo and further transaction. It is booked by finance department. In this case liability is credited against vendor. 17. After coming into account department payment is being done to vendor, where finance or account department will do payment to vendor.18. Now this payment process s completed. Reconciliation of invoice and PO is accomplished, and finally vendor is paid.CHAPTER: 9FINDINGS? As per the SPRL inventory norms, from the calculation of inventory norms of raw material it was found that valve steel Indian raw material is excess over norms by 55 days, valve steel imported raw material is excess over norms by 84 days and bought out component raw material is excess over norms by 10 days.? From the calculation of inventory norms of store spares items it was found that oils/lubricants/gases is excess over norms by 3 days, packing material store spares items is excess over norms by 6 days, specific stores items is excess over norms by 4 days and consumables store spares items is excess over norms by 22 days.? From safety stock, we can able to determine how much the company can hold the inventory in reserve stock per annum through norms of inventory.? From the calculation of data of scrap sales of may 2018, it was analyzed that average sale of current year is 40.32 lacs and average sale of last year is 48.97 lacs.CHAPTER: 10SUGGESTIONS• The company is required to maintain safety stock for its components in order to avoid stock-out conditions ; help in continuous production flow.• Under management of tools of inventory of ABC analysis, the management must have more control on A than B;C, because A class constitutes more(50%) of higher values. There should be tight control exercised on stock levels, to avoid deterioration. This is done through maintaining norms of safety stock, continuous check on schedules ; ordered frequently in inventories, in order to avoid excess investment of working capital.• The company is required to maintain safety stock for its components in order to avoid its excess over norms, stock-out conditions ; help in continuous production flow.• The company must not go to the Non-moving items, because there will be unnecessary blocking of working capital. This would obstruct the other activities of the organization.CHAPTER: 11LIMITATION OF THE STUDY• Time restriction was only 45 days for research in organization• Information which was needed could not be made public by organization• Study is related to only one leading manufacturing industry only• Findings and suggestions cannot be made generalised • This study covers wide concept hence wide collection and coverage of information was not easily possible.• The entire analysis applies only to SHRIRAM PISTONS only.• The study takes into account only the quantitative data and the qualitative aspects were not taken into account.• ABC analysis is not one time exercise and items are to be reviewed and re- categorised periodically.• Detail study about all the material was not possible because of time limit.• Some of the information was kept confidential by the stories department.• Study was confined only to the selected components in the stores department• The conceptual framework and research questions have bound the study, keeping it focused, yet simultaneously limiting the method and topic of the research• The number of participants, their location, and the quantity and amount of time spent in getting the schedules filled were constraints balance by the quality of the data gathered.CHAPTER: 12CONCLUSIONIn any business, make it big or small, we must understand that taking good care of our inventory is very important. If we as managers do not understand the concept of good inventory management, we must learn to be familiar with it and its applications. One of the reasons for the failure of a business is its inventory management. There are many ways to fight failure, and we can do is start from here. There are new technologies that can help us maintain and supervise our inventory. What we can do is learn, implement and evaluate our business. And you can start with your INVENTORY.SPRL, Pathredi unit has truly changed the face of manufacturing and transformed the global economy. SPRL, Pathredi unit is both a philosophy and collection of management methods and techniques used to eliminate waste (particularly inventory)The company’s Inventory management is effective; company should make a classification of its inventory in minimum categories. CHAPTER: 14BIBLIOGRAPHY• http://www.google.com• www.shrirampistons.com• http://www.slideshare.net• www.inventorymanagementreview.org/inventory_basics/index
