Inventory Management

CONTENTSPAGE

CHAPTER—I

CHAPTER—II

CHAPTER—III

CHAPTER—IV

CHAPTER—V

Introduction to the topic

Conceptual background

Need or significance of the

Objectives of the study

Research design

Industrial profile

Organization profile

Data analysis and

interpretation

Findings

Suggestions

Bibliography

CHAPTER-I

INTRODUCTION

Material is a very important factor of a production. It includes physical

commodities used to manufacture the final product. It is the inventorial and does not get

waste and exhaust with the passage of time as labor is wasted with the passage of time

whether in used or not. The other feature of material is that, is firm, where as other

elements of cost like labor and other services can’t be easily varied once they are

established. From this it can be concluded that material is most flexible on controllable

input. It is the first and most important element of cost. Materials account for nearly

60% of the cost of production which is clear from analysis of financial statements of a

large number of private and public sector organizations.

According to the Indian association of materials management of 64 paisa in a rupee

are spent on materials by Indian industries, 16 paisa on and the rest of 1 rupee of cost is

spent on over heads. Importance of material control lies in the fact that any saving made

in the cost of materials will go a long way in reducing the cost of production and

improving the profitability of the concern. Studies by experts in this field have

highlighted the facts that if an organization can affect 5% saving in material cost, it

would be as good as increasing the production or sales by about 36%. Proper control of

material is necessary from the time orders for purchasers of materials are placed with

suppliers until they have been consumed the object of material control is to attack

material cost on fronts, so that the cost of material may be reduced. In other words,

efforts are to be made to reduce the cost of materials when it is purchase, stored and

Before coming to the discussion of material control, we may clear that purchase of

materials will include both direct and indirect materials. Direct materials and indirect

materials are both treated as stores items, where as stock of finished goods id not treated

as a stores item, direct and indirect materials purchased for stock purpose to be issued to

different jobs, works orders of departments as and when required. On the other hand,

finished goods are treated as stock. We may also refer to the commonly used term

“INVENTORY” which includes the stock not only of raw materials but also stores and

spares, work-in-progress and finished goods. The stock materials are only a part of the

inventory held by a manufacturing unit. Every enterprise needs inventory for smooth

running of its activities. It serves

As a link between production and distribution process. There is generally a time lag

between the recognition of a need and its fulfillment. The greater the time lag, the higher

requirements for inventory. It also provides a question for future price fluctuations.

The investment in inventories constitutes the most significant part of current assets/

Working capital most of the undertaking. Thus, it is very essential to have proper control

and management of inventories.

The purpose of inventory management is to ensure availability of materials in

sufficient quantity as and when required and also to minimize investment in inventories.

MEANING AND NATURE OF INVENTORY

In accounting language, inventory may mean the stock of finished goods only. In

manufacturing concern, it may include raw materials, work-in-process and stores etc.

Inventory includes the following things.

a) Raw Material:

Raw material form a major input into the organization. They are required to carry out

production activities uninterruptedly. The quantity of raw materials required will be

determined by the rate of consumption and the time required for replenishing the

supplies. The factories like the availability of raw materials and government regulations

etc, to affect the stock of raw materials.

b) Work in Progress:

The work in progress is that stage of stocks which are in between raw materials and

finished good. The quantum of work in progress depends up on the time taken in the

manufacturing process. Together the time taken in manufacturing, the more will be the

amount of work in progress.

c) Consumables:

These are the materials which are needed to smoother the process of production. These

materials do not directly enter production but they act as catalysts. Consumables may be

classified according to their consumption and critically.Generally, consumable stores do

not create any supply problem and firm a small part of production cost. There can be

instances where these materials may account for much value than the raw materials. The

fuel oil may form a substantial part of cost.

d) Finished goods:

These are the goods which are ready for he consumers. The stock of finished goods

provides a buffer between production and market. The purpose of maintaining inventory

is to ensure proper supply of goods to customers.

e) Spares:

The stocking policies of spares differ from industry to industry. Some industries like

transport will require more spares than the other concerns. The costly spare parts like

engines, maintenance spares etc are not discarded after use, rather they are kept in ready

position for further use. All decisions about spare are base o the financial cost of

inventory on such spares and the costs that may arise due to their non-availability.

BENEFITS OF HOLDING INVENTORIES

Although holding inventories involves blocking of a firm's funds and the costs

of storage and handling, every business enterprise has to be maintaining certain level of

inventories to facilitate uninterrupted production and smooth running of business.

In the absence of inventories a firm will have to make purchases as soon as it receives

order. It will mean loss of time and delays in execution of orders which sometimes may

causes loss of customers and business. A firm also needs to maintain inventories to

reduce ordering cost and avail quantity discounts etc.

There are three main purposes of holding inventories.

The transaction motive: This facilitates continuous production and timely execution of

sales orders.

The precautionary motive: This necessitates the holding of inventories for meeting the

unpredictable changes in demand and supplies of materials

The speculative motive: This induces to keep inventories for taking advantage of price

fluctuations, saving in re-ordering costs and quantity discounts

RISK AND COSTS OF HOLDING INVENTORIES

The holding of inventories involves blocking of a firm's funds and concurrence of

capital and other costs.

The various costs and risk involved in holding inventories are:

i. Capital Costs: Maintaining of inventories results in blocking of the firms financial

resources. The firm has therefore to arrange for additional funds to meet the cost of

inventories.

The fund may be arranged from own resources of firm outsiders. But in both the case,

the firm incurs a cost. In the former case, there is an opportunity cost of investment

while in the later case; the firm has to pay interest to the outsiders.

ii. Storage and handling costs: Holding of inventories also involves cost on

storage as well as handling of materials. The storage of costs includes the rental of the

go down, insurance charges etc.

iii. Risk of price decline: There is always a risk of reduction in the prices of

inventories by the suppliers in holding inventories. This may be due to increase market

suppliers, competition or general depression in the market.

iv. Risk of obsolescence: The inventories may become obsolete due to improved

technology, change in requirements, change in customer tastes etc.

v. Risk determination in quality: The quality of materials may also deteriorate

while the inventories are kept.

TOOLS AND TECHNIQUES OF INVENTORY MANAGEMENT

A proper inventory control not only helps in solving the actual problem of liquidity but

also increase profits and causes substantial reduction in the working capital of the

concern.

1. Determination of stock levels:

Carrying of too much and too little of inventory is determined to the firm. If the

inventory level is too little, the firm will face frequent stock outs involving heavy

ordering cost and if the inventory level is too high it will be unnecessary tie up of

capital.An efficient inventory management requires should maintain an optimum level of

inventory where inventory costs are the minimum and at the same time there is no stock

out which may result in loss or shortage of production.

a)Minimum stock level:

It represents the quantity below its stock of item should not be allowed to fall.

Lead-time: A purchase firm requires some time to process the order time is also

required by the supplying firm to execute the order. The time taken in processing the

order and then executing it is known as lead time.

Rate of consumption: It is the average consumption of materials in the factory. The

rate of consumption will be decided on the basis of past experience and production

plans.

Nature of material: The nature of material also affects the minimum level if a

material `is required for such material.

Minimum stock level can be calculated with the help of following formula.

Minimum stock level = Re ordering level -

(Normal consumption x normal reorder period.)

b) Re ordering level:

When the quantity of materials reaches at a certain figures then fresh order is sent

to get material again. The order is sent before the materials reach minimum stock

level. Re – ordering level is fixed between minimum level and maximum level.

Re-ordering level = Maximum consumption x Maximum Re- order period.

c) Maximum Level:

It is the quantity of materials beyond which a firm should not exceed its stocks. If

the quantity exceeds minimum level limit then it will be overstocking. Overstocking

will mean blocking of more working capital, more space for storing the materials, more

wastage of materials and more chances of losses from obsolescence.

Maximum Stock Level = Re-ordering Level + Re-order Quantity –

(Minimum consumption x Minimum Re-order period)

d) Danger Stock Level:

It is fixed below minimum stock level. The danger stock level indicates emergence of

stock position and urgency of obtaining, fresh supply at any cost.

Danger stock level = Average Rate of consumption x emergency delivery time

e) Average stock level:

This stock level indicates the average stock held by the concern.

Average stock level = Minimum stock level + ½ x Re-order quantity.

2. Determination of safety stocks:

Safety stock is a buffered to meet some unanticipated increase in usage. The demand

for materials may fluctuate and delivery of inventory may also be delayed and in such a

situation the firm can face a problem of stock out.

In order to protect against the stock out arising out of usage fluctuation, firms usually

maintain some margin of safety stock. Two costs are involved in the determination of

this stock that is opportunity cost of stock outs and the carrying costs.

If a firm maintains low level of safety frequent stock outs will occur resulting into the

larger opportunity costs. On the other hand, the larger quantity of safety stock involves

carrying costs.

ECONOMIC ORDER QUANTITY:

The quantity of material to be ordered at one time knows an economic ordering

quantity. This quantity is fixed in such a manner as to minimize the cost of ordering and

carrying costs.

Total cost off material = Acquisition cost + carrying costs + ordering cost.

Carrying cost:

It is the cost of holding the materials in the store.

Ordering cost:

It is the cost of placing order for the purchase of materials.

EOQ can be calculated with the help of the following formula

EOQ=√2RCO/CH

Where R = Annual Consumption

CO = Ordering Cost

CH = Carrying Cost

4. A-B-C Analysis: (Always better control analysis)

Under ABC analysis, the materials are dividing into 3 categories viz. A, B and C

Almost 10%of the items contribute to 70% of value of consumption and this category is

called 'A' category. About 20% of the items contribute about 20% of value of

consumption and this is known as category 'B' materials.

Category 'C' covers about 70% of items of materials which contribute only 10% of

value of consumption.

5. JIT Analysis (Just in time):

The goal of just in time analysis is manufacturing is not new. The basic desired for

continued reduction material resources requirements is quiet common. The means by

which goal of JIT is now being accomplished is considered to be new. The primary goal

of JIT is to achieve zero inventories with in an organization as well as through out entire

supply chain. JIT the key theme is to work with out buffer stock/with minimal buffer

stock.

6. Inventory Turn over ratio:

Inventory turn over ratios is calculated to indicate whether inventories have been used

efficiently or not. The inventory turnover ratio also knows as stock velocity is normally

calculated as sales/ average inventory of cost of goods sold/average inventory. Inventory

conversion period may also be calculated to find the average time taken for clearing the

stocks. Symbolically

Cost of goods sold

Inventory Turnover Ratio = -------------------------

Average inventory at cost

( Or )

Net sales

= ------------------------

Average inventory

Days in a year

Inventory conversion period = ----------------------------

Inventory Turnover Ratio

7. Classification and codification of Inventories:

The inventories should first be classified and then code numbers should be assigned for

their identification. The identification of short names is useful for inventory

management not only for large concerns but also for small concerns. Lack of proper

classification may also lead to reduction in production.

Generally, materials are classified accordingly to their nature such as construction

materials, consumable stocks, spares, lubricants etc, after classification the materials are

given code numbers. The coding may be done alphabetically or numerically. The later

method is generally used for coding.

The class of materials is assigned two digits and then two or three digits are

assigned to the categories of items divided into 15 groups. Two numbers will be

category of materials in that class. The third distinction is needed for the quality of

goods and decimals are used to note this factor.

8 Valuation of inventories- Methods of valuation:

FIFO method

LIFO method

Base Stock method

Weighted average price method

CRITERIA FOR JUDGING THE INVENTORY SYSTEM

While the overall objective of the inventory system is to minimize the cost to the

firm at the risk level acceptable to management, the more proximate criteria for judging

the inventory system are

Comprehensibility

Adaptability

Timeliness

Areas of improvement:

Inventory management in India can be improved in various ways. Improvements

could be affected through.

Effective Computerization:

Computers should be used merely for accounting purposes but also for improving

decision making. Review of Classification: ABC & FSN classification must be

periodically reviewed.

Improved Co-ordination: Better co-ordination among purchase, production, marketing

and finance department will help in achieving greater efficiency in inventory

management.

Development of Long Term Relationships:

Procedures for disposing obsolete/surplus inventories must be simplified.

Adoption of Challenging Norms:

Companies should set benchmarks with global competitors and use ideas like JIT

to improve inventory management.

Valuation of inventories- methods of determination

Although the prime consideration in the valuation of inventories is cost, there are

a number of generally accepted methods of determining the cost of inventories at the

close of an accounting period. The most commonly used methods are First-in-first-out

(FIFO) average, and Last-in-first-out (LIFO). The selection of the method for

determining cost of inventory valuation is important for it has a direct bearing on the

cost of goods sold and consequently on profit. When a method is selected, it must be

used consistently and cannot be changed from year to year in order to secure the most

favorable profit for each year.

1. The FIFO METHOD (FIRST-IN-FIRST-OUT METHOD):

Under this method it is assumed that the materials or goods first received are the

first to be issued or sold. Thus, according to this method the inventory on a particular

date is presumed to be composed of the items, which were acquired most recently.

Advantages: The FIFO method has the following advantages

It values stock nearer to current market prices since stock is presumed to be

consisting of the most recent purchases.

It is based on cost ad; therefore, no unrealized profit enters into the financial

accounts of the company.

The method is realistic since it takes into

Account the normal procedure of utilizing or selling those materials or goods,

which have been longest in stock.

Disadvantages: The method suffers from the following disadvantages.

It involves complicated calculations and hence increases the possibility

of clerical errors.

Comparison between different jobs using the exhausted the supply of same type

of material becomes some times difficult. A job commenced a few minutes

after another job may have to bear an entirely different charge for materials

because the first job completely exhausted the supply of materials of the

particular lot.

The FIFO method of valuation of inventories is particularly suitable in the following

circumstances:

The materials or goods are of a perishable nature.

The frequency of purchases is not large.

There is only moderate fluctuation in the prices of materials or goods purchased.

Materials are usually identifiable as belonging to a particular purchase lot.

2. THE LIFO METHOD (LAST-IN-FIRST-OUT)

This method is based on the assumption that last time of material or goods

purchased are the first to be issued or sold. Thus, according to this method inventory

consists of items purchased at the earliest cost.

Advantages: This method has the following advantage.

It takes into account the current market conditions while valuing materials

issued to different jobs or calculating the cost of goods sold.

The method is based on cost and therefore no unrealized profit or loss is made

on account of use of this method.

The method is most suitable for materials which are of a bulky and non-

perishable type.

3. BASE STOCK METHOD:

This method is based on the contention that each enterprise maintains at all time a

minimum quantity of materials or finished goods in its stock. This quantity is termed as

base stock. The base stock is deemed to have been creating out of the first lost

purchased; therefore it is always valued at this price and is carried forward as a fixed

asset. Any quantity over and above the base sock is valued in accordance with any other

appropriate method. As this method aims at matching current costs to current sales, the

LIFO method will be most suitable for valuing stock of materials or finished good other

than base stock. The base stock method has the advantage of charging out

materials/goods at actual cost. Its other merits or demerits will depend on the method

which is used for valuing materials other than the base stock.

4. WEIGHTED AVERAGE PRICE METHOD:

This method is based on the presumption that once the materials are put into a

common bin, they lose identity. Hence, the inventory consists of no specific batch of

goods. The inventory is thus priced on the basis of average prices paid for the good,

weighted according to the quantity purchased at each price.

Weighted average price method is very popular on account of its being based on

the total quantity and value of materials purchased besides reducing number of

calculations. As a matter of fact the new average price is to be calculated only when a

fresh purchase of materials is made in place of calculating it very now and then as is the

case with FIFO, LIFO methods. However, in case of this method different prices of

materials are charged from production particularly when the frequency of purchases and

issues/sales is quite large and the concern is following perpetual inventory system.

5. INVENTORIES VALUED AT STANDARD COST:

A very useful method of valuing inventories is at standard cost. With a

standard cost system there is no need for spending a great deal of time and money

tracing unit cost through perpetual inventory record.

ACQUIRING RAW MATERIALS FROM THE STORE ROOM

Recognized

for materials in

production

Stores

requisition Materials are sent to work place

Notifies

storeroom

Clerk of

Requisition is recorded in

1. Requisition summary used to record general

ledger Entry transferring R.M's to WIP.

2. Perpetual inventory records.

3. Job cost sheets used when manufacturing is of a

job Shop variety and costs must be kept by individual

4. Departmental cost records used to accumulate

materials Costs by responsibility centers and to

determine Costs for individual production process.

RECORDING THE STORES REQUISITION – THE GENERAL

LEDGER:

The stores requisition is recorded in the general ledger and in

various subsidiary ledgers. Among the usual subsidiary ledgers are

the perpetual inventory cards, departmental cost records, and job

cost sheets.

INTERNAL INDENT Document No.: ST/F/1506

Revision No. : 02,Dated 01-05-2000

Page No. : 1 of 1

Section: Unit: Date: S.No.

S.No. Computer

Code No.

Description

of the Material

Quantity Purpose

Signature

Indenter Approved Received

In the general ledger, stores requisition are recorded by a transfer

from raw materials inventory (a credit) to work in process (a debit)Each stores

requisition is not the subject of a general ledger entry. The stores requisition for a month

are totaled, and this total is the subject of the above general ledger entry. Ordinarily each

stores requisition is recorded in a requisition summary, which is totaled each month to

determine the dollar amount of the general ledger entry. A requisition summary

shown above provides departmental distinctions as well as distinction between direct

and indirect materials.When the general ledger contains only one work in process

account and one factory overhead account the monthly entry from the requisition

summary would be:

Dr. Work in process (for direct materials)

Dr. Factory overhead (for indirect materials)

Cr. Raw materials inventory.

When the general ledger contains departmental account the monthly entry from the

requisition summary would be:

Dr. Work in process – I

Dr. Factory overhead - I

Dr. Work in process – II

Dr. Factory Overhead – II

Cr. Raw materials inventory

As shown above, there is need only for physical quantities since the inventory

value is the physical quantity multiplied by the standard cost. With the cost and value

columns disposed off, a perpetual inventory card can include additional data such as

quantities on order, quantities reserved, and quantities available. These additional data

are very useful for inventory and production control purposes. On the basis of a few

calculations concerning actual units cost, inventories at standard cost could easily be

converted into inventories on a FIFO, a LIFO or an average cost basis.

Inventory of Obsolescence:

Obsolescent inventories cannot be used or disposed off at values carried on the

books. Frequent reviews should be made of all inventories and when obsolescence is

indicated a request for revaluation should be prepared for approval by management. The

difference between original and obsolete value should be recorded by a charge to an

operating account. Inventory obsolescence, and a credit to inventory. If the material is

scrapped, this will be for the full inventory of the material. If it is anticipated that the

material can be sold at reduced value or used in areas where it will be worthless than its

original value, the entry would be only for the amount of write down. Some companies

carry a salvage inventory and transfer to its materials which may be sold or used at

reduced values.

CHAPTER—II

RESEARCH METHODOLOGY

NEED OF THE STUDY:

For the purpose of the study, Kusalava International Ltd. is selected, as being it is

a monopoly. Sponge iron manufacturing unit in the country at the time when it was

established in 1980 as a public sector unit, specially to meet raw materials requirements

of mini steel plants. It seems that one of the important problems faced by public

enterprises id ineffective control measures especially out dated and unused inventory

control measures. Therefore, it is felt quite appropriate to make a micro study on

inventory control methods and policies of the Kusalava International Ltd. So as to find

out the responsible factors that caused for high inventory cost.

SCOPE AND SIGNIFICANCE OF THE STUDY:

A study on Inventory management was carried out at Kusalava International

Limited for the months of May to June. The study was done for the raw materials and

cylinder liners for the plant situated at Adavinekkalam. The study was conducted in

consultation with plant and head office executives.

Inventory Management is essential for the viability and long run survivalist of business

as it is most important component of Current Assets. Being an outside research the

study will definitely make an impression in term of much useful to the production

department and top level management to review proceedings of inventory management

department. Thereby facilitate the control measures to be taken if any deviations found

in due course.

As an academician the study will enhance an understanding on the practical

aspects of business and inventory management in particular. Even though the study

scope is limited, the findings will help the managers to examine day to day as well the

periodical proceedings.

OBJECTIVES OF THE STUDY:

To understand the importance of Auto component Industry in India.

To study about the tradeoffs between costs and benefits associated with the

level of inventory.

To study the common techniques for managing inventory-ABC system, the

basic economic order quantity model, the reorder point and the safety stock.

To identify the problems if any, and to provide appropriate suggestions for the

improvement of the Inventory management

DATA COLLECTION:

Methodology is a systematic procedure of collecting information in order to analyze

and verify a phenomenon. The collection is done through two principle sources viz.

Primary data

Secondary data

1. Primary Data:

It is the information collected directly without any reference. In this study it was mainly

through interviews with concerned officers and staff, either individually or collectively.

Some of the information had been verified of supplemented conducting personal with

observation.

The data includes:

Interviews with Kusalava International Ltd. employees.

Organization chart has been drawn through observation.

2. Secondary data:

The secondary data was collected from already published source such as Pamphlets,

annual reports, returns and international records.

The data includes:

Methodology under study has been collected from the annual reports of Kusalava

International Ltd., in house magazines, Publications, books, Journals on Management

and Websites.

PERIOD OF THE STUDY:

To analyse the inventory management here we have taken the data

from the companies annual reports during the period 2006-2010.

LIMITATIONS OF THE STUDY:

The study was conducted with the data available and the analysis was made on

the basis of secondary data only.

The time for data collection is only 2 months.

The availability of data pertaining to 5 years is one of the constraints.

As there is more dependency on secondary data realistic conclusion may not be

possible to be made.

The study was conducted within the selected unit of Kusalava International

Limited, Adavinekkalam.

PLAN OF THE STUDY:

First chapter deals with introduction regarding inventory management, objectives

and methodology. Present in chapter-2 and chapter-3 gives a brief profile of

organization , data analysis and interpretation. Present in chapter-4, the 5 and the last

chapter is findings and suggestions .

CHAPTER—III

INDUSTRIAL PROFILE

ORGANISATIONAL PROFILE

INDUSTRY PROFILE

AUTOMOBILE INDUSTRY:

The Indian automotive market managed to stand to the vagaries of the economic melt-

down to show slightly positive growth during fiscal 2008-09. Overall vehicle sales at

97.23 lakh grew 0.71 per cent from 96.54 lakh units in 2007-08.

AUTOMOBILE DOMESTIC SALES TRENDSNo. OF VEHICLES

Category 2007-08 2008-09 DIFF GROWTH %

Passenger

Vehicles

15,49,882 15,51,880 1998 0.13

Commercial

Vehicles

4,90,494 3,84,122 -10637 -21.69

Three Wheelers 3,64,781 3,49,719 -15062 -4.13

Two Wheelers 72,49,278 74,37,670 188392 2.6

Grand Total 9654435 9723391 164691 0.71

COMMERCIAL VEHICLES SEGMENT:

The Indian Automobile sector is presently going through a phase of slow down for the

last two years i.e. 2007-08 and 2008-09. The sector witnessed a net decline in produc-

tion in 2007-08 of (-) 2.29% and in 2008-09 the sector posted a modest growth in pro-

duction at 2.96% over 2007-08. The worst affected segment in the auto sector is the

Commercial Vehicle segment, which has witnessed a production decline by almost 24%

in 2008-09 over the previous year. The medium and Heavy Commercial vehicle cate-

gory has been the hardest hit which has seen a decline in production by 35% in 2008-09.

The exports of CVs have also plummeted. The department of heavy industry has taken

the initiative to ensure that under the Stimulus Package-II announced by the Govern-

ment, the state governments will be allowed to buy transport vehicles (buses) under the

JNNURM programmed. Among commercial vehicle makers, all major players saw sub-

stantial fall in volumes. Market leader Tata Motors with a 60 per cent plus share,

showed 22 per cent drop in numbers at 2.34 lakh units while Ashok Leyland showed 37

per cent drop at 47,632. Eicher’s sales volume fell 37 per cent at 17,341 units and Force

Motors was down 28 per cent at 7,819 units in 2008-09. “The freight movement is un-

likely to improve this fiscal which will impact truck sales.

AUTO COMPONENTS INDUSTRY:

In 2008-09, the automobile industry grew 2.96 % but the components industry outpaced

the vehicle manufacturers with a 6 per cent growth. The total value of auto parts sold is

Rs. 76,300 crore from Rs 72,000 crore. During the year both automotive industry and

the auto-component industry adversely affected by a unprecedented increase in the

prices of major input materials along with the pricing pressures due to the economic

slowdown, put significant pressures on the margins of the automobile manufacturers and

the auto-component manufacturers.

PROSPECTS:

As per SIAM estimates, passenger vehicles are expected to record a sales growth of 3-5

per cent in FY09-10, commercial vehicles at 7-10 per cent (over a low base of the previ-

ous fiscal), two-wheelers at 0-5 per cent and three-wheelers at 5-8 per cent. According to

SIAM in the fiscal 2009-10, passenger vehicles are expected to have sales of 18.9 lakh

to 19.2 lakh units. Commercial vehicles have been forecast to clock sales of 5.2-5.4 lakh

units, while two-wheelers sales have been pegged at 83.4-87.6 lakh units .The Indian

auto components industry has an estimated production of US$ 10 billion. The spiraling

demand from domestic and international auto companies has seen this sector emerging

as one of the fastest growing manufacturing sectors in India and globally.

The Auto components industry is predominantly divided into five segments:

Engine parts

Drive Transmission & Steering Parts

Suspension & Brake Parts

Electrical Parts

Body and chassis

According to the ACMA (Auto Components Manufacturers Association of India), the

sector is set to grow at a CAGR of 15 per cent till fiscal 2012. This sector is now work-

ing towards an open market. A large number of joint ventures with leading global manu-

facturers have already been set up in the auto-components sector. And with India esti-

mated to have the potential to become one of the top five auto component economies by

2025, the pace is expected to pick up even further.

Moreover the automotive components industry is perceived as a lucrative sector with

tremendous potential for foreign direct investments. The year 2006-07 saw the auto

components sector soar with exports touching the US$ 3 billion mark and investments

continuing unabated. The ACMA estimates the global sourcing of components from the

country to double from US$ 2.95 billion to US$ 5.9 billion in 2008-09, and touch US$

20 billion in seven years owing to the huge and growing markets both within India, and

overseas.

Domestic Investments

The market is so large and diverse that a large number of players can be absorbed to ac-

commodate buyer needs. The sector not only has global players looking to invest and

expand but leading domestic component companies are also pumping in huge sums into

expanding operations:

Bharat Forge invested US$ 135 million in its Pune plant for increasing domestic capac-

ity to 240,000 tones.

Amtek Auto is expanding capacity of its castings unit to 70,000 tonnes per an-

num (TPA) from 30,000 TPA.

Sona Koyo plans to have capacity of three million pieces of manual steering

gears, 500,000 units of hydraulic power steering and 250,000 units of electronic

power steering (EPS), apart from doubling the capacity of steering columns from

one million parts.

Rico Auto is investing US$ 23 million to expand capacity.

Apollo Tyres plans to invest US$ 469.58 million in the next three years to in-

crease its production capacity both in India and abroad.

Kesoram Industries is planning to set up three new tyre units in the northern state

of Uttaranchal to take its tyre-making capacity to 734 metric tonnes per day.

With such accelerating interest by both domestic and foreign investors, the Indian auto

component industry is set to growth exponentially.

Foreign Investments

India enjoys a cost advantage with respect to casting and forging as manufacturing costs

in India are 25 to 30 percent lower than their western counterparts. Seeing the growing

popularity of India in the automotive component sector (a whopping US$ 530 million in

terms of foreign direct investment), the Investment Commission has set a target of at-

tracting foreign investment worth US$ 5 billion for the next five years to increase India's

share in the global auto components market from the existing 0.4 per cent to 3-4 per

Chrysler is setting up a local sourcing unit in Chennai and is expected to start

sourcing for its global plant by next year.

Pal finger AG, the Austrian hydraulic lifting, loading and handling systems manu-

facturer, has joined hands with Western Auto LLC, Dubai, the vehicle dealership

arm of ETA Star group, have invested US$ 1.7 million to set base in India.

IFCI Venture Capital Funds Limited is launching a private equity fund in associa-

tion with German consultancy UBF-B worth US$ 144.67 million focused en-

tirely on domestic automotive components industry.

Auto parts maker Robert Bosch of Germany will invest US$ 201.4 million in its

Indian subsidiaries over the next two years.

Japan’s Omron Corporation, the leading manufacturers of automation components

has set up the company's first production base on the subcontinent.

Swiss company Reiter Automotive India aims to increase its production capacity

in India and extend its product range to heat shields

Fiat is setting up a group purchasing office in India as part of its strategy to cut

costs by buying more components from low-cost centers such as India and

China.

Daimler, Hero joint venture will invest US$ 1.1 billion in 5 years to manufacture

light and medium CVs initially, and heavy-duty vehicles by 2012.

Destination India

The ACMA-McKinsey Vision 2015 document forecasts the potential for the Indian auto

component industry to be US$ 40-45 billion by 2015. Investments and exports in this

segment are witnessing continuous growth. Global automobile manufactures see India as

a manufacturing hub for auto components and are rapidly ramping up the value of com-

ponents they source from India due to:

The cost competitiveness in terms of labor and raw material

Its established manufacturing base

Fine quality of components manufactured in India (used as original components

for vehicles made by General Motors, Mercedes, IVECO and Daewoo among

others).

As a result Japanese and British component manufacturers are seeking joint-ventures in

India. Delphi, the auto component division of General Motors is planning to set up

plants in India. Robert Bosch, auto parts maker of Germany has relocated manufacture

of certain products to MICO, India. Crosslink International Wheels, Malaysia's leading

automobile security provider has set up its manufacturing unit at Baddi to make India

the export hub for the SAARC region.

Foreign auto makers, including Ford Motor Co., General Motors Corp., Honda Motor

Co., Toyota Motor Corp., DaimlerChrysler AG and Hyundai Motor Co., are all looking

to increase their presence in India and use it as an export hub.

The Indian automotive export industry has made a global mark. Both the automobile in-

dustry along with the component industry is contributing to India’s overall export effort.

According to ACMA, more than a third (36 per cent) of Indian auto component exports

head for Europe, with North America featuring a close second at 26 per cent.

The Indian automotive industry has grown at a CAGR of 14 percent p.a. over the

last 5 years sales of vehicles reaching around 9 million vehicles in 2005-06. It has the

potential to emerge the largest in the world. Presently, India is:

2nd largest two-wheeler market in the world

4th largest commercial vehicle market in the world

11th largest passenger car in the world and is expected to be the 7 th largest

market.

The industry has emerged as a key contributor to the Indian economy.

AUTO COMPONENT INDUSTRY-STATISTICS

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11(E)

Turnover

Growth rate(%)

Export

Growth rate(%)

Imports

Growth rate(%)

Investment

Growth rate

Imports as % of Turnover 22 21 24 29 37 37 -

Exports as % of Turnover 20 21 18 20 21 13 18

(VALUE IN US $ BILLION)

Automobile Domestic Sales Trends (Number

of Vehicles)

Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Passenger Vehicles 902,096 1,061,5721,143,0761,379,979 1,549,8821,552,7031,949,776

Commercial Vehicles260,114 318,430 351,041 467,765 490,494 384,194 531,395

Three Wheelers 284,078 307,862 359,920 403,910 364,781 349,727 440,368

Two Wheelers 5,364,2496,209,7657,052,3917,872,334 7,249,2787,437,6199,371,231

Grand Total 6,810,5377,897,6298,906,42810,123,9889,654,4359,724,24312,292,770

The developments in the Indian auto component industry can be traced to

trade liberalization during the 1990’s that resulted in an influx of multinational

automotive companies like ford, general motors, Hyundai, Mercedes-Benz, Peugeot and

Volvo into India. The entry of these foreign auto companies during the early 90’s

changed quality standards and impacted the complexity of the parts required by OEMs.

Consumers reacted favorably to the expanded set of offerings and consequently

the demand for cars in India surged. For example, the sale of foreign brand cars grew

from almost nothing before the entry of Hyundai in 1997 to 15% of the car market in the

year 1998-99 to more than 25% of the car market in 2004-05. the auto market,

consisting of passenger vehicles, commercial vehicles, two wheelers, three wheelers and

tractors, expanded from a sales level of 3.3 million vehicles (417,762 passengers

vehicles alone) in the year 1995-96, to nearly 6.8 million vehicles (900,752 passenger

vehicles) during 2003-04. The Indian auto component industry responded to these

challenges by adding capacity and modemizing existing plants. The total sales volume

of auto components has increased from $2.9 billion in the year 1999 to $7 billion in the

year 2004.

Many firms entered into technical collaboration and equity partnership global

tier-one suppliers. Global tier-one suppliers like Delphi and Visteon set manufacturing

units in India. During this period, there was significant growth in multinational

companies ($1 billion in 2003-04, as against $0.27 billion in 1997 exports are still very

compared to annual global auto component sales, which was $730 billion, they are a

significant share of the sales ( approximately 10-12%) components firms.

Before Maruthi, the auto component industry was characterized by low volumes,

high fragmentation, negligible auto machine and consequently poor quality. This was

simply because the automobile industry did not have any volumes worth talking about.

Maruthi challenged all that (in the process, Indian car producers in the first year it self

by making 22,500 vehicles) For the first time the Indian market hand volumes worth

speaking of a product that was exportable and proper systems.

They key of course is the export-worthiness of the Maruthi 800, Zen, something

total alien to the industry before. So as Maruthi grew crossing the 1, 00,000 mark by

1989-90, the component industry boomed in tandem. In the meantime, other Japanese

majors like Honda, Yamaha, Toyota and Mitsubishi also flagged off two-wheelers

and light commercial vehicles production. This paved the way for foreign collaborations

in the component sector, and till date some 95 Japanese alliances have been struck.

Maruthi it self floated 11 joint ventures (JVs) and has as many as 375 vendors.

That was just the first step in the process of Indian component marks producing

globally competitive products. The next best thing to happen to this sector was the

recession of 1992-93. To maintain their viability, ancillary had little choice but to focus

on export markets, and step up quality. This is evident in the spate of ISO 9000-

certifications those component makers began to receive. Of the roughly 350 companies

in this sector, at least 130 have bagged ISO 9000 certification, something no other

industry can boast of.

The step up process has not ended with the Japanese innovation. Gradually

manufacturers from ale parts of the world are making a beeline for India.

Result: Component makers are now exposed to different, more complex and advanced

development processes. Earlier, they were dealing with just one culture, one standard

Japanese. Today we have the Koreans, the Americans, the Europeans and the French

coming with their global suppliers in to the country. Ford, for instance, is flagging off

the ford ACG (Automotive component group) and general motors have brought in

Delhi. Toyota too, is creating a Toyota village around its manufacturing unit in the

south, as is Hyundai, which will house all its ancillary suppliers in an industrial park.

In the south, auto archly has been taken over by US Major Rockwell. Saks

Ancillaries has suffered the same fate

Joint ventures though, are imperative and at last count there were at least 322

collaborations with foreign auto majors.

The Reason: Access to technology to differentiate your product from the scores in the

market. Consider the Ran group, which has hired off its clutch business with luck of

Germany into a 50:50 joint venture. The guiding principle, behind the venture is the

opportunity to bring new technology in to the country. We are not getting the same

satisfaction in the clutch business as we were getting from our other activities. Our

partner is probably number 1 in clutches world. We believe that we will be able to

achieve leadership position in a couple of years, says Ran group Chair Man L. Laxman.

Over the past 3 years the Indian auto component industry has been consistently

exporting at least 20% of its production. In 1996-97 exports were worth a cool $ 300

millions (Rs.1, 170 Crores). In 5 years, overseas sales are expected to more than triple to

all of $ one billion.

ORGANISATION PROFILE

Origin and growth of the organization:

Kusalava International Limited was established in the year 1964. It was earlier

known as Bharat industries where it was started as a small work shop. But later the name

was changed to Kusalava International Limited. To manufactured cylinder liners under

the brand name of “TIGER POWER”. The chairman of Kusalava International Limited

is Mr. Chukkapalli Kusalava.

Kusalava International Limited is one of the largest cylinder liner manufactures

in INDIA.

Today “TIGER POWER” brand is the most dynamic name in the cylinder

liner manufacturing business.

Kusalava International Limited has nearly 38 years of industrial manufacturing

experience in the field. Nearly 50% of the production goes to original equipment.

Kusalava International Limited had geared up to meet the technological changes and

world standards. It also in the stood the competition in the world market which arose

done to the establishment of world trade organization.

Kusalava International Limited has consistently delivered quality automotives

components in line with the specific of automobile majors in India and for the

aftermarket spare parts segments to various countries like U.S, Italy, New Zealand,

Bangladesh, Australia, Malaysia, Thailand, Mauritius, and the Middle East.

QUALITY, ENVIRONMENT AND SAFETY POLICY:

We are committed for the satisfaction of all interested parties by:

Supplying quality products on time.

By providing Clean, Green, Healthy and Safe Work Environment.

Complying with all applicable Legal and Other Requirements

Conservation of Resources & Prevention of Pollution.

Continual Improvement in all the Integrated Management System Process.

TPM POLICY

Kusalava International Ltd commits their selves to maximize ‘Overall plant

Effectiveness’ by achieving:

Zero Breakdowns

Zero Accidents

Zero Defects

A Safe and Clean Environment and eliminate all other losses through Total Em-

ployee Involvement.

Growth of the company:

Kusalava International Limited belongs to Kusalava group of companies. Its

honorable chairman and promoter is Mr. Chukkapalli Ramakrishna Prasad. The group of

companies and their activities.

1). Kusalava Motors (P) Ltd : The company is involved in the activity of trading 2

Wheelers and 4 Wheelers, it is the official dealer for TVS Motors and Hyundai Cars in

the cities of Vijayawada, Guntur, Ongole, Bhimavaram and Gudivada.

2). Kusalava Informatics: Started of as an in-house software arm for developing an

integrated ERP solution, the division has been spun off into a separate company in 2006.

Since then the company has been working on many projects with overseas clients and

has seen unprecedented growth. Please visit www.kusalavainfo.com.

3). Kusalava Finance: The company has been established way back in 1970 and is

engaged in the business of financing automobiles. The company has been able to carve a

niche of itself in the automotive sector by offering clients customized financing options

as per their needs.

4). Kusalava Power: The company is involved in the business of power generation and

has a total generating capacity of 3 MW.

5). Kusalava Realty: The Company is involved in the business of developing housing,

apartments and shopping malls.

6). Bharat Automobiles: The company activities involve trading is automobile spare

and represents a host of reputed manufacturers like Bharat Forge for Crank Shafts,

Timken for Bearing, Maple for Pistons and Kusalava for Liners. The company

operations and network spread across entire south India.

7). Kusalava Inc: The Company is a trading firm located in Houston, Texas, USA and

is involved in the activity of sourcing automotive components from India and China to

OEM's in USA. The company has products stocked in 22 warehouses across USA to

supply to customers on a JIT basis.

8). Sneha Biotech: The Company is research firm, which focuses on development of

products using biotechnology for agriculture, marine industry and humans as well. The

products are used as a substitute to chemicals & fertilizers in agriculture and aqua

industries and are used as substitutes to drugs for humans.

MILESTONES IN ‘TIGER POWER’ MANUFACTURING:

1964: Kusalava International Limited comes into existence as M/S Bharat Industries.

Products: Brake drums

During the inception year itself supplies were started to OEM, Bajaj Tempo.

1972: Started production of grey iron cylinder liners. Started supplies to major road

transport corporations (STU's)

1982: Supplies to replacement market with TIGER POWER-TOUGH PARTS Brand

1986: Installed the first Dual Track Induction Furnace in India.

1987: Became the major source for Defense Vehicle Factory

1990: Exported its first consignment to New Zealand.

1992: Tiger Power became the major supplier of cylinder liners in After Market

1994: Emerged as the Largest cylinder liner manufacturer in India.

1995: Kusalava commissions its first overseas office in Houston, Texas, and USA ISO:

9002 certified.

1996: Sales figures crossed of 1 million USD.

Kusalava becomes a limited company.

1998: QS-9000 certified

1999: Started production of Ductile Iron castings.

2000: ISO/TS 16949 certified.

2002: Turn Over crosses 10 millions USD.

2003: Introduced Six Sigma Process.

Awarded by ACMA for Best Six Sigma Project in 2003

2004: Introduced Lean Manufacturing Practices.

Received the best supplied award from EICHER MOTORS, for outstanding contribution

to supply chain management.

Awarded by ACMA for Best Six Sigma Project in 2004 again.

2005: Entered into an agreement with the Market Leader Darton Sleeves, USA for

supplying High Grade Ductile iron liners to the Drag Racing Market.

2006: Total PM Kick off on July 3rd 2006.

Kusalava commissions new plant at pantnagar, Uttarakhand.

2007: Turn over crosses 20 million USD.

Kusalava commissions new plant at Visakhaptnam, Andhra Pradesh.

ORGANIZATIONAL CHART OF

KUSALAVA INTERNATIONAL LIMITED

Locations:

Kusalava international Ltd is located in Autonagar in the city of Vijayawada

situated in the state of Andhra Pradesh in India. This Industry has two production units.

Unit-1 is situated in Adavinekkalam, which is 25 kms from Vijayawada, where as Unit-

2 is situated in Autonagar of Vijayawada. The main administration is at Adavinekkalam

unit which is in the city of Vijayawada and other branches at Visakhapatnam and

Rudrapur.

A part from these branches, other branches are situated out of our country like

the ones in USA, Middle East. Etc.

There is a wide distribution are network of Kusalava International Ltd at different

places in India at

1) COCHIN

MANAGING DIRECTOR

DirectorPurchase

DirectorMarketing

Director Finance

General Manager

Information & Technology

Manager Internal Audit

General Manager

General Manager Marketing

IT Manag

ManagerAccounts

Sales Officers

Director Production

Manager Product

Development

Vice Preside

ntOperati

Production Manager

Production Engineer

Maintenance ManagerQuality Control

ManagerSupervisor

Quality Control

Engineers

Maintenance Engineers

Product Development Engineers

Operator

Dispatch Supervisor

Exports Manager Exports

Asst. Manager

Dispatch Clerk

Project Manager

Purchase ManagerCustomer

Representative

Stores

ClerkDispatch Superviso

Dispatch Clerk

IT Support Engineers

Vice President

International Business

Accountants

DirectorHuman

Resources

Manager Asst. Manager

Assistant

Director Technical

Internal Auditors

2) BANGALORE

3) HYDERABAD

4) PUNE

5) MUMBAI

6) AHMADABAD

7) INDORE

8) RAIPURE

9) KOLKATA

10) PUNCHI

11) PATNA

12) JAMSHEDPUR

13) KANPUR

14) JAIPUR

15) LUDHIANA

16) CHANDIGHAR

17) DELHI

Nature of Activity: Product Manufactured

1. Cylinder Liners

Cylinder liner is a cylindrical part to be fitted into an engine block to form

a cylinder. It is one of the most important functional parts to make up the interior of an

engine the cylinder liner, serving as the inner wall of a cylinder, forms a sliding surface

for the piston rings while retaining the lubricant within.

The most important function of cylinder liners is the excellent characteristic as sliding

surface and these four necessary points.

High anti-galling properties

Less wear on the cylinder liner itself

Less wear on the partner piston ring

Less consumption of lubricant

The cylinder liner receives combustion heat through the piston and piston rings and

transmits the heat to the coolant.

A cylinder wall in an engine is under high temperature and high pressure, with the piston

and piston rings sliding at high speeds. In particular, since longer service life is required

of engines for trucks and buses, cast iron cylinders that have excellent wear-resistant

properties are only used for cylinder parts.

Also, with the recent trend of lighter engines, materials for engine blocks have been

shifting from cast iron to aluminum alloys. However, as the sliding surface for the inner

cylinder, the direct sliding motion of aluminum alloys has drawbacks in deformation

during operation and wear-resistance. For that reason, cast iron cylinder liners are used

in most cases.

2. Cylinder Liners for Aluminum Blocks

Global warming has started to show its adverse effects on the environment. To improve

the fuel efficiency and adhere to latest Euro norms automobile manufactures are shifting

towards aluminum engines. These engines have as cast cylinder liners with special

surface on the outer diameter commonly referred to as spiny lock or stipple finish. To

improve rigidity and high thermal conductivity properties of engine blocks, Kusalava

has developed different specifications of cylinder liners that have high adherence to

aluminum blocks at the time of die casting by controlling the coarseness of the outer

casting surface with the special coating materials and in-process controls.

3. Grey & Ductile Iron Piston Rings

Kusalava has developed materials with special properties in grey and ductile iron by

centrifugal casting process for critical sealing applications. These rings are being sup-

plied to Automotive, Locomotive, Marine, and Power generation, Aircraft, Aerospace

and Hydrocarbon processing Applications. We also supply rough machined rings to ring

manufactures around the world in ductile and grey iron materials.

4 . Centrifugal Castings

Centrifugal casting method was developed after the turn of the 20th century to meet the

need for higher standards. Spinning molds generate centrifugal force on molten metal to

position the metal within a mold. As the molten metal solidifies from the outside in, a

casting with dense, close grain structure is created. As a result of close grain structure

the centrifugal process offers products with better physical properties than castings made

using the static casting method. Proper mold design, mold coatings, mold spinning

speeds, pouring speeds, cooling rates and metal chemistry results in castings with higher

yields, fewer impurities and greater strength.

Quality

Six Sigma

A method or set of techniques, Six Sigma has also become a movement

focused on business process improvement. It is a quality measurement and improvement

program originally developed by Motorola that focuses on the control of a process to the

point of ± six sigma (standard deviations) from a centerline, or put another way, 3.4

defects per million items. A Six Sigma systematic quality program provides businesses

with the tools to improvethe capability of the business processes.

Kusalava had started implementing these techniques in 2002.The company

had 5 Black belts and 14 Green Belts. And it was awarded twice for its best projects. It

had tangible results in terms of quality and production.

Infrastructure

1. Plants

Location of Plant 1 Adavinekkalam, Vijayawada.

Address Adavinekkalem, Agiripalli Mandalam,

Krishna District, AP – 521212, India

Products Cylinder Liners, Piston Rings, Valve Seats &

centrifugal castings.

Area 14.43 acres

Operations Casting & Machining.

Location of Plant 2 Autonagar, Vijayawada.

Address B-4, Industrial Estate, Vijayawada – 520007,

Products Cylinder Liners, Valve Seats.

Area 2.6 Acres

Operations Machining.

Location of Plant 3Rudrapur, Uttaranchal.

Address Plot No.10, Sector-2,IIE Pant Nagar,Rudrapur,UddamSing

Nagar,Uttaranchal-263 153,India

Products Cylinder Liners

Area 3.35 Acres

Operations Casting & Machining.

Location of Plant 4 Special Economic Zone, Visakhapatnam.

Address Kusalava International Ltd., VSEZ,

Duvvada,Visakhapatnam -530046,India

Products Cylinder Liners

Area 7.16 acres

Operations Machining.

“TIGER POWER” – The Tough Parts

“TIGER POWER” – TOUGH PARTS has dovetailed their process to

give peak performance with best quality at affordable price – a tangible result.

We are proud to say now “TIGER POWER” – TOUGH PARTS is complete Global.

Most of the vehicle manufacture in the Indian domestic market has a tie-up with

international manufactures like Mazda, Hino, Mercedes Benz, Mitsubishi etc.,,

Kusalava International Limited supplies their product to the bellow OEM’s in India who

has international collaboration.

LIST OF DOMESTIC O.E.M. CLIENT:

Product wise market share comparison with competitor.

S.No. COMPANY COLLABIRATION TP SHARE

Ashok Leyland Ltd Hino-Japan & British Leyland 100.00%

TELCO Mercedes Benz 70.00%

Eicher Motors Mitsubishi 100.00%

Bajaj Tempo Ltd Daimler Benz 100.00%

Swaraj Mazda Mazda 100.00%

V.S.T. Tillers Tractors

Mitsubishi 100.00%

And for the international Market, Kusalava international Limited had a start 5 years back

and supplying the products after quality validation for the below customers.

Interestingly, Kusalava has worked in tandem with the above international collaborated

Indian OEM’s to achieve their stringent quality requirement both in Foundry and

Machining. The above OEM’s contribute 30% of Kusalava International Limited

turnover. Technical officers from Kusalava have played a vital role in establishing and

understanding the International specification for the domestic OEM’s and had good

report for working hand in hand to meet the drawing print specifications. And for the

International Market Kusalava International Limited is supplying the products after

quality validation for the below customers.

DOMESTIC AFTER MARKET:

KUSALAVA had started supplying its products to the after market under

the brand name “TIGER POWER” since 1982. It has a dominating presence in the after

market and enjoys the confidence of major engine rebuilders/reborers, OEMs and

mechanics. Currently it possesses a market share of 35% in India and 30% in USA.

Even Exports a major share of its production to various countries across the globe viz.,

Italy, U.K., France, New Zealand, Bangladesh, Australia, Malaysia, Thailand, Mauritius

and the Middle East. It had wide-spread, well established networks in India, USA,

Canada and Europe to serve its clients on 24x7 bases. Tiger Power offers a wide range

of ‘The Tough Parts' like Cylinder Liners/Sleeves, Valve Seat Inserts, Valve Guides,

Tappets, Pistons, Piston Pins, Gaskets, Alfin Nickel Inserts, cast sleeves for aluminum

blocks, cast iron/Ductile Iron Pipes, Inertia Rings.

It caters to Marine, Industrial, Automotive, refrigeration, and compressors, Tractor,

Aeronautical and Truck Business. It also caters to the after market requirements by

indirectly supplying the liners in Bulk to Liner manufacturers.

Company Product:

Kusalava manufacturers Liners/Sleeves in both cast iron and S.G. Iron, Centric

cast valve seat insert and Alfin Piston inserts. As a new development Kusalava has

started manufacturing the engineering items out of its own technology like 3 mts., pipes

for ash disposal for the thermal power plants, sugar crushers’ material, and motor frames

for the heavy electrical motors.

STRENGTHS:

Equipped with the latest technology (in houses) in the industry to manufactur any vari-

ety of Cylinder Liners as per Customer Having a Track record of 45 years

requirements meeting international standards

Highly automated with state of the art technology having the complete manufacturing

facilities in house

Continuous R&D in house to have an edge over the competition

TS 16949 Certified Company

Good brand image

Major supplier to domestic OEM’s like Tata Motors limited, Ashok Leyland Ltd,

Eicher Motors Ltd, Bajaj Tempo Ltd, Swaraj Mazda Ltd, VST Tiller Ltd and Interna-

tional OEM’s as Tier 2

Good Distribution Network all over India in the aftermarket and USA

Wide spread Customer segmentation

Implementation of Lean Manufacturing

Dedicated Manpower

Professional approach to the market Multi-location facilities.

Technology Up gradation:

Kusalava has developed the basic technical requirement for the manufacturing of

their products, and in line to develop the technical strength hires experts from Germany

for upgrading the foundry technology in line to the International practices. Till Kusalava

has taken 3 rounds of experts views to validate their process and to fine tune their

existing process for better productivity. Most significantly, Kusalava deputes their

technical managerial personal for the training in different institutes for betterment of

their knowledge and practices.

Mr. Prasad R.K Chukkapalli, Managing Director of the company has visited Japan

under AOTS programmed for 15days technical training in Quality Systems during the

first week of October ‘02.

ERP Software:

Kusalava has in house software development Center, and presently implementing

self developed ERP System of ‘K Online’ integrating Finance, Manufacturing,

Distribution and HR Activities across INDIA and USA offices.

At KOnline, we understand the strategic role supply management must play in a

corporation today and the significant impact a supply chain management strategy can

have on earnings. Supply chain management solutions help companies transform supply

strategy into a competitive advantage. We combine expertise, technology and

information to help you bring immediate value and profit your company’s bottom line. It

was used by the firm in the past

SAP SOFTWARE: Recently SAP SOFTWARE was introduced in KUSALAVA

INTERNATIONAL LIMITED.

A SIMPLE EXAMPLE OF THE SUPPLY CHAIN LOOP

SALES NET WORK-USA

NETWORK - INDIA

VISION:

“To produce Quality auto component products the matching best available in the

world in terms of innovative design features and endues at competitive cost deliverable

in time and maximize customer satisfaction to ensure constant increase in market share

and global presence for the company.”

MISION:

To constantly strive for automation and technology up gradation of company’s

plant process and product to maximize customer satisfaction and efficient use of

resources at company’s disposal to optimize production and minimize cost.

To trigger higher demand for company’s products both Domestic and

International Market and there by improve market share.

To improve both top line and Bottom Line of the company to ensure

optimureturns for all stake-holders of the company.

To make Kusalava a true global conglomerate through professional

management, corporate governance initiatives and strict adherence to regulatory

compliances.

FUNCTIONS OF DIFFERENT DEPARTMENTS:

Production:

Production department takes the raw materials and melts it down in the electrical

induction furnace. It makes rough casting through centrifugal dice.

In production department production engineer does operations according to all the

liners drawings. These operations will be finished on different machines. It takes 8 – 10

operations. After completion of these operations finished liners will be sent to quality

control department to check the quality of the liner manufactured.

Materials:

Material department purchases the raw material on the parameters like good quality

in time delivery, credit facility and on the right time acquiring the raw materials cost

variability.

Marketing:

Marketing departments sells the products through marketing representatives, sales

offices and distributors. This department gets the orders from the customers through the

representatives, sales officers and distributors. This department sends the senior

engineers to check complaints of the customers. This department provides incentives to

sell the product in the market.

Finance:

This department makes economic plans and helps in decision making through MIS

which are needed in survival and profitability of the organization. This departments

work to the requirements of loans and take necessary steps to acquire them from banks

and other financial institutions. It also prepares and sends yearly expenditure and net

profits to the management.

It took into the matters like fluctuations of profits, change in got policies and sales,

market conditions and orders being placed.

CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

The quantity of material to be ordered at one time knows an economic ordering quantity.

This quantity is fixed in such a manner as to minimize the cost of ordering and carrying

costs.

Economic order quantity is the level of inventory that minimizes the total inventory

holding costs and ordering costs. It is one of the oldest classical production scheduling

models. The framework used to determine this order quantity is also known as Wilson

EOQ Model or Wilson Formula. The model was developed by F. W. Harris in 1913,

but R. H. Wilson.

Economic order quantity (EOQ) is that size of the order which gives maximum economy in

purchasing any material and ultimately contributes towards maintaining the materials at the

optimum level and at the minimum cost. In other words, the economic order quantity (EOQ)

is the amount of inventory to be ordered at one time for purposes of minimizing annual inven-

tory cost.

The quantity to order at a given time must be determined by balancing two factors: (1) the

cost of possessing or carrying materials and (2) the cost of acquiring or ordering materials.

Purchasing larger quantities may decrease the unit cost of acquisition, but this saving may not

be more than offset by the cost of carrying materials in stock for a longer period of time.

Total cost of material = Acquisition cost + carrying costs + ordering cost.

Carrying cost:

It is the cost of holding the materials in the store.Also called Holding cost,

carrying cost is the cost associated with having inventory on hand. It is primarily

made up of the costs associated with the inventory investment and storage cost. For

the purpose of the EOQ calculation, if the cost does not change based upon the

quantity of inventory on hand it should not be included in carrying cost. In the EOQ

formula, carrying cost is represented as the annual cost per average on hand inventory

Ordering cost:

It is the cost of placing order for the purchase of materials.EOQ can be calculated with

the help of the following formula Also known as purchase cost or set up cost, this is the

sum of the fixed costs that are incurred each time an item is ordered. These costs are not

associated with the quantity ordered but primarily with physical activities required to

process the order. For purchased items, these would include the cost to enter the

purchase order and/or requisition, any approval steps, the cost to process the receipt,

incoming inspection, invoice processing and vendor payment, and in some cases a

portion of the inbound freight may also be included in order cost

Underlying Assumptions of Economic Order Quantity:

The ordering cost is constant.

The rate of demand is constant

The lead time is fixed

The purchase price of the item is constant i.e. no discount is available

The replenishment is made instantaneously; the whole batch is delivered at

Benefits:

EOQ calculations are frequently used in business, both by production,

purchasing and inventory managers. This tool provides everything it takes to make

reliable calculations. In addition, it automatically computes the reorder point (= the

amount of inventory at which new orders must be placed) and order cycle time in

days, both if there is a lead time (= period between the placement of an order and its

receipt in inventory) or none. An automatically generated chart based on input data

can be directly exported to any presentation.

EOQ=√2RCO/CH

INVENTORY TURNOVER RATIO:

Inventory turnover ratios is calculated to indicate whether inventories have been used

efficiently or not. The inventory turnover ratio also knows as stock velocity is normally

calculated as sales/ average inventory of cost of goods sold/average inventory. Inventory

conversion period may also be calculated to find the average time taken for clearing the

stocks. Symbolically

Cost of goods sold

Inventory Turnover Ratio = --------------------------------

Average inventory at cost

Net Sales

= ----------------------------

Inventory (Average)

INVENTORY CONVERSION PERIOD:INVENTORY CONVERSION PERIOD:

Days in a year

Inventory conversion period = --------------------------------

Inventory Turnover Ratio

THE PERCENTAGE OF INVENTORY IN CURRENT ASSETS:THE PERCENTAGE OF INVENTORY IN CURRENT ASSETS:

Inventory Inventory

The percentage of inventory in Current Assets = ---------------------The percentage of inventory in Current Assets = ---------------------

Current Assets Current Assets

RE – ORDER LEVELRE – ORDER LEVEL::

When the quantity of materials reaches at a certain figures then fresh order is sent to get

material again. The order is sent before the materials reach minimum stock level.

Re – ordering level is fixed between minimum level and maximum level.

Re-ordering level = Maximum consumption x Maximum Re-order period.

Delivery time: 4-6 weeks.

Normal Usage: 7 weeks.

Re-Order Level=Maximum Usage x Maximum Delivery TimeRe-Order Level=Maximum Usage x Maximum Delivery Time

MINIMUM LEVEL:MINIMUM LEVEL:

Minimum stock level:

It represents the quantity below its stock of item should not be allowed to fall.

Lead-time: A purchase firm requires some time to process the order time is also

required by the supplying firm to execute the order. The time taken in processing the

order and then executing it is known as lead time.

Rate of consumption: It is the average consumption of materials in the factory. The rate

of consumption will be decided on the basis of past experience and production plans.

Nature of material: The nature of material also affects the minimum level. If a material

is required for such material.

Minimum stock level can be calculated with the help of following formula.

Minimum stock level = Re ordering level - (Normal consumption x

normal re order period

MAXIMUM LEVEL:MAXIMUM LEVEL:

It is the quantity of materials beyond which a firm should not exceed its stocks. If the

quantity exceeds minimum level limit then it will be overstocking.

Overstocking will mean blocking of more working capital, more space for storing the

materials, more wastage of materials and more chances of losses from obsolescence.

Maximum Stock Level = Re-ordering Level + Re-order Quantity –

(Minimum

consumption x Minimum Re-order period)

AVERAGE LEVEL:AVERAGE LEVEL:

This stock level indicates the average stock held by the concern.

Average stock level = Minimum stock level + ½ x Re-order quantity

TABLE:1 RAW MATERIAL:

ANNUAL

CONSUMPTION

IN M/T (R)

ORDERING

IN RS. (CO)

CARRYING

IN RS. (CH)

IN M/T

2006 5446 10 216 22.44

2007 6108 10 407 17.30

2008 6905 10 250 23.48

2009 5168 10 555 14.00

2010 7772 10 495 16.00

CHART:-1

INTERPRETATION:

When compared to all the years, the EOQ is high in the year 2007. Because in this year,

the annual demand is higher than the rest years. Due to highly ordering of Raw material,

the carrying cost will be less.

TABLE:2 CYLINDER LINERS:

ANNUAL

CONSUMPTION R

ORDERING

COST CO

CARRYING

COST CH

IN NOS

2006 11785983 10 4.1 3559

2007 24859847 10 7.09 2984

2008 17293582 10 3.67 4808

2009 10203 10 7 3255

2010 189581 10 7.3 3311

CHART:2

INTERPRETATION:

EOQ for cylinder liner was comparatively high in the year 2008, it was 4808 nos. This

was due to the increased demand in the market for the same period. In this year carrying

cost also low.

TABLE:3 INVENTORY TURNOVER RATIO

YEAR SALES INVENTORY

INVENTORY

TURNOVER

2006 370959201 56925237 6.52

2007 484833736 68352276 7.09

2008 500922885 67352546 7.44

2009 670730918 134707864 4.97

2010 805074792 213142088 3.77

CHART:3

INTERPRETATION:INTERPRETATION:

In the year 2008, the Inventory Turnover Ratio was very high than the rest of the years.In the year 2008, the Inventory Turnover Ratio was very high than the rest of the years.

It implies good inventory management. In the year 2010, it was 4.81 it was very lowerIt implies good inventory management. In the year 2010, it was 4.81 it was very lower

than the other years. It means excessive inventory or it may be overinvestment inthan the other years. It means excessive inventory or it may be overinvestment in

inventory. Excessive inventory due to funds locked up, rental of space.inventory. Excessive inventory due to funds locked up, rental of space.

TABLE:4 INVENTORY CONVERSION PERIOD IN DAYS TABLE:4 INVENTORY CONVERSION PERIOD IN DAYS

YEARINVENTORY TURN OVER

INVENTORY CONVER-

SION PERIOD IN DAYS

2006 6.52 56

2007 7.09 51

2008 7.44 49

2009 4.97 74

2010 3.77 97

CHART:4

INTERPRETATION: INTERPRETATION:

Inventory conversion period was decreasing from 2006-2008. It was very good to the Inventory conversion period was decreasing from 2006-2008. It was very good to the

firm. But in the years 2009 and 2010, it was increased. It may be due to the inflation.firm. But in the years 2009 and 2010, it was increased. It may be due to the inflation.

Being the price of the product was increasing and the sales were decreased. So theBeing the price of the product was increasing and the sales were decreased. So the

inventory conversion period increased. But it should be decreased. inventory conversion period increased. But it should be decreased.

TABLE:5 PERCENTAGE OF INVENTORY IN CURRENT ASSETS TABLE:5 PERCENTAGE OF INVENTORY IN CURRENT ASSETS

YEAR INVENTORY CURRENT ASSETS PERCENTAGE

2006 56925237 157939330 36.04

2007 68352276 234814785 29.1

2008 67352546 275344324 24.46

2009 134707864 376047336 35.82

2010 213142088 453569567 46.99

CHART:5

The Kusalava International Limited was giving more importance to inventory in CurrentThe Kusalava International Limited was giving more importance to inventory in Current

Assets. In the earlier year they gave more preference to inventory. This will show theAssets. In the earlier year they gave more preference to inventory. This will show the

percentage of inventory in totals Current Assets. Inventory plays a vital role in the totalpercentage of inventory in totals Current Assets. Inventory plays a vital role in the total

Current Assets. More attention has to be played by the management towards InventoryCurrent Assets. More attention has to be played by the management towards Inventory

as it consists 35% of Current Assets.as it consists 35% of Current Assets.

TABLE:6 RAW MATEIAL:RAW MATEIAL:

YEAR RE-ORDER

IN M/T

2006 5040

2007 5664

2008 6384

2009 4848

2010 6048

CHART:6

In the year 2008, at 6384 M/T of Raw material, the order should be placed. Because theIn the year 2008, at 6384 M/T of Raw material, the order should be placed. Because the

annual demand is high but the Re-order level was decreased. It may be happened due toannual demand is high but the Re-order level was decreased. It may be happened due to

decrease in the demand of final productdecrease in the demand of final product

TABLE:7 CYLINDER LINERS:CYLINDER LINERS:

YEARRE-ORDER LEVEL

IN NOS

20062006 23973122397312

20072007 29137442913744

20082008 39152463915246

20092009 34298403429840

20102010 36931203693120

CHART:7

By comparing the Re-order levels in all the years, it was 3915264 nos in the 2008. AtBy comparing the Re-order levels in all the years, it was 3915264 nos in the 2008. At

the level of 3915264 nos the order was placed. So definitely there should be high annualthe level of 3915264 nos the order was placed. So definitely there should be high annual

demand for the finished product where as in the year 2006 the reorder level wasdemand for the finished product where as in the year 2006 the reorder level was

2397312 nos but it was gradually increased that means annual demand was increasing.2397312 nos but it was gradually increased that means annual demand was increasing.

TABLE:8 RAWRAW

MATERIAL:MATERIAL:

YEARMINIMUM LEVEL

IN M/T

2006 4515

2007 5074

2008 1729

2009 1313

20101638

CHART:8

Minimum level was reduced. Because by reducing the storage cost and to avoid theMinimum level was reduced. Because by reducing the storage cost and to avoid the

obsolete goods.obsolete goods.

TABLE:9 CYLINDERCYLINDER

LINERS:LINERS:

YEAR MINIMUM LEVEL

IN NOS

2006 649272

2007 789139

2008 1060384

2009 927290

2010 1000220

CHART:9

In the year 2006, they maintained only 649272 nos as Minimum level. But it wasIn the year 2006, they maintained only 649272 nos as Minimum level. But it was

gradually increasing. That means the production was increasing. But in 2008, thegradually increasing. That means the production was increasing. But in 2008, the

production is high so they maintained 1060384 nos as minimum level but in 2009 itproduction is high so they maintained 1060384 nos as minimum level but in 2009 it

slightly decreased because annual demand decreased.slightly decreased because annual demand decreased.

TABLE:10 RAW MATERIAL:RAW MATERIAL:

CHART:10

The maximum levels were increased because the sales were increased.The maximum levels were increased because the sales were increased.

TABLE:11 CYLINDER LINERS:TABLE:11 CYLINDER LINERS:

YEAR MAXIMUM LEVEL

IN M/T

2006 2974

2007 3341

2008 3767

2009 2863

2010 3571

CHART:11

Due to increasing of annual demand the maximum level varied. In the year 2009, theDue to increasing of annual demand the maximum level varied. In the year 2009, the

maximum level decreases because the production was decreased due to low sales.maximum level decreases because the production was decreased due to low sales.

TABLE:12 RAW MATERIAL:

YEAR MAXIMUM LEVEL

2006 1415082

2007 1719921

2008 2311096

2009 2021018

2010 279968

YEAR AVERAGE LEVEL

IN M/T

20062006 47424742

20072007 5328.55328.5

20082008 2016.52016.5

20092009 1532.51532.5

20102010 1911.51911.5

CHART:12

Average level for the Raw material was calculated by maximum and minimum levelsAverage level for the Raw material was calculated by maximum and minimum levels

were taking into account.were taking into account.

TABLE:13 CYLINDER LINERS:CYLINDER LINERS:

CHART:13

IINTERPRETATIONNTERPRETATION: :

Generally Kusalava International Limited was maintaining these stock levels per annum.Generally Kusalava International Limited was maintaining these stock levels per annum.

Stock was necessary to run the production. It was gradually decreasingStock was necessary to run the production. It was gradually decreasing

YEAR AVERAGE LEVEL

2006 757485

2007 920663

2008 1237116

2009 1081839

20101166924

CHAPTER-VCHAPTER-V

FINDINGSFINDINGS

SUGGESTIONSSUGGESTIONS

FINDINGSFINDINGS::

The Economic Order Quantity of Raw material in Metric Tones is high in the yearThe Economic Order Quantity of Raw material in Metric Tones is high in the year

2008 it was 23.48. And it was low in the year 2009 it was 14. The total cost was low in2008 it was 23.48. And it was low in the year 2009 it was 14. The total cost was low in

the year 2006 and it was very high in the year 2009. EOQ was better in the year 2006.the year 2006 and it was very high in the year 2009. EOQ was better in the year 2006.

Economic order quantity for cylinder liners in nos is high in the year 2008 it was 4808Economic order quantity for cylinder liners in nos is high in the year 2008 it was 4808

and low in the year 2007 it was 2984and low in the year 2007 it was 2984

Inventory Turnover Ratio was very high in the year 2008. It was 7.44. It wasInventory Turnover Ratio was very high in the year 2008. It was 7.44. It was

gradually decreasing. In the year 2010 it was 4.81. Because of increase in the averagegradually decreasing. In the year 2010 it was 4.81. Because of increase in the average

stock maintained in the company.stock maintained in the company.

Inventory Conversion Period increases from 2008 to 2010 that was 49 to 76 days.Inventory Conversion Period increases from 2008 to 2010 that was 49 to 76 days.

Because of average stock maintained in the company. It was not good practice.Because of average stock maintained in the company. It was not good practice.

The percentage of inventory over current assets increased from 25 in the year 2008 toThe percentage of inventory over current assets increased from 25 in the year 2008 to

35 in the year 2010. The more importance was given to inventory in the current assets.35 in the year 2010. The more importance was given to inventory in the current assets.

Reorder level of Raw material was in the year 2006 it was 5040 Metric Tones. And itReorder level of Raw material was in the year 2006 it was 5040 Metric Tones. And it

was 6384 in the year 2008. That is gradually increasing. And also it was decreasingwas 6384 in the year 2008. That is gradually increasing. And also it was decreasing

from 2008 to 2010. It was decreasing because the orders may be decreased. That meansfrom 2008 to 2010. It was decreasing because the orders may be decreased. That means

sales were decreasing. sales were decreasing.

For Cylinder liners to reorder level in the year 2006 it was 239712 numbers, it was For Cylinder liners to reorder level in the year 2006 it was 239712 numbers, it was

gradually increasing. It increased from 237312 to 3693120 numbers due to high rate ofgradually increasing. It increased from 237312 to 3693120 numbers due to high rate of

stock level should be carried out. stock level should be carried out.

Minimum level of Raw material in the year 2006 it was 4515 Metric Tones. It wasMinimum level of Raw material in the year 2006 it was 4515 Metric Tones. It was

gradually decreasing. In the year 2010 it was 1638. Minimum level was decreasinggradually decreasing. In the year 2010 it was 1638. Minimum level was decreasing

because the sales were increasing. The demand was increasing to the raw material. because the sales were increasing. The demand was increasing to the raw material.

For Cylinder liners, in minimum level in the year 2006 it was 649272 numbers. It For Cylinder liners, in minimum level in the year 2006 it was 649272 numbers. It

was gradually increasing from 649272 to 1000220 numbers. So that the sales werewas gradually increasing from 649272 to 1000220 numbers. So that the sales were

increased and consumption was increased.increased and consumption was increased.

Maximum level of Raw material in the year 2006, it was 2974 M/T. It was increasedMaximum level of Raw material in the year 2006, it was 2974 M/T. It was increased

to 3571 M/T in the year 2010 because of the sales was increasing. to 3571 M/T in the year 2010 because of the sales was increasing.

11. For cylinder liners to maximum level in the year 2006 it was 1415082 numbers.11. For cylinder liners to maximum level in the year 2006 it was 1415082 numbers.

Gradually the level was increased up to 2008. But in 2009 it slightly reduced. Even inGradually the level was increased up to 2008. But in 2009 it slightly reduced. Even in

2010 it was increased due to the high requisition for the product.2010 it was increased due to the high requisition for the product.

12.Average level of raw material in the year 4742 M/T. It was increased to 5328 M/T12.Average level of raw material in the year 4742 M/T. It was increased to 5328 M/T

in the year 2007. It was gradually decreased from 2007 to 2009. In the year 2010 it wasin the year 2007. It was gradually decreased from 2007 to 2009. In the year 2010 it was

1911.5 M/T due to increasing of sales. 1911.5 M/T due to increasing of sales.

13 Average level for cylinder liners from 2006 to 2008; it was gradually increased that13 Average level for cylinder liners from 2006 to 2008; it was gradually increased that

is from 757485 to 1237116 numbers. Where as in the year 2009 it reduced 1081839.is from 757485 to 1237116 numbers. Where as in the year 2009 it reduced 1081839.

But in the year 2010, it increased to 1166924 numbers due to the high need of cylinderBut in the year 2010, it increased to 1166924 numbers due to the high need of cylinder

liners. liners.

SUGESTIONS:SUGESTIONS:

The Economic Order Quantity can be further increased by another 10% byThe Economic Order Quantity can be further increased by another 10% by

reducing the carrying cost.reducing the carrying cost.

As the demand increasing for cylinder liners the Raw material Turn over RatioAs the demand increasing for cylinder liners the Raw material Turn over Ratio

can further increased.can further increased.

In the year 2010, Reorder level was 6048 M/T, this can be increased seeing theIn the year 2010, Reorder level was 6048 M/T, this can be increased seeing the

more demand for the final product.more demand for the final product.

The component of inventory in the Current Assets has been increasing every yearThe component of inventory in the Current Assets has been increasing every year

approximately 40% on the same line for the next year the share of inventory furtherapproximately 40% on the same line for the next year the share of inventory further

increased by 50%.increased by 50%.

As a demand for Cylinder liners in other countries are also increasing, the twoAs a demand for Cylinder liners in other countries are also increasing, the two

levels of inventories that are minimum and maximum have to be increased. For Rawlevels of inventories that are minimum and maximum have to be increased. For Raw

material it can be increased by 50%. Similarly for Cylinder liners also increased bymaterial it can be increased by 50%. Similarly for Cylinder liners also increased by

60%.60%.

Inventory Conversion Period has increased from 70 to 76; there is a chance toInventory Conversion Period has increased from 70 to 76; there is a chance to

improve this period by bringing down approximately to 65 to 70 in the current financialimprove this period by bringing down approximately to 65 to 70 in the current financial

year.year.

More sophisticated techniques can be used in order too has more control overMore sophisticated techniques can be used in order too has more control over

various items under ABC system.various items under ABC system.

BIBLOGRAPHYBIBLOGRAPHY

Financial management: Khan & JainFinancial management: Khan & Jain

Financial Management: Prasanna Chandra Financial Management: Prasanna Chandra

Financial Management: I.M.PANDYFinancial Management: I.M.PANDY

Financial Management: R.K.Sharma & K.GuptaFinancial Management: R.K.Sharma & K.Gupta

Journals:Journals:

Annual Audit Reports of Kusalava International Limited. Annual Audit Reports of Kusalava International Limited.

Web Sites:Web Sites:

www.kusalava.comwww.kusalava.com

www.acma.comwww.acma.com

Inventory Management

cost of materials

stock materials

stock of raw materials

indirect materials

availability of materials

purchase of materials

materials account

purchasers of materials

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