By Abhash Ranjan
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PRESENTATION AGENDA
•ABOUT USHA MARTIN
•PRESENCE
•BUSINESS SEGMENT
•DESIGN OF STUDY
•INVENTORY MANAGEMENT
•ABC ANALYSIS
•INTERPRETATION
•CONCLUSION•SUGGESTION
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ABOUT USHA MARTIN
USHA MARTIN is a unique Rs. 3,600-crore global 17 companies
engaged in mining, manufacture, distribution and service centres
related to the steel industry across 4 continents, 14 countries and
24 global locations. From coal-iron ore mining, captive utility and
auxiliary facilities at one end, to the manufacture of specialitysteel, wires, wire ropes, and other value-added products and end-
use application solutions at the other. UML is also engaged in the
economic empowerment of communities.
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VISION OF USHA MARTIN
To retain market leadership in India and be globally
competitive through customer orientation, excellence in
quality, innovation and technology.
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HISTORY OF USHA MARTIN
1960:The Company was incorporated as Usha Martin Black (Wire
Ropes) Limited having its wire rope plant at Ranchi. The name
was changed to Usha Martin Black Ltd. in 1979 and further
changed to Usha Martin Industries Ltd.(UMIL) in 1983.
1965:
UMIL promoted Usha Ismal Ltd. (UIL) in collaboration with
CCL Systems Ltd of UK for the manufacture of fittings and
accessories, equipment for pre-stressed concrete system, wire
ropes and wire ropes splicing equipment at Ranchi. UIL merged
with UMIL in 1990 and became a division of the company
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1971:
UMIL promoted Usha Alloy Steels Limited (UASL) forthe manufacture of billets at Jamshedpur. UASL merged
with UMIL in 1988.
1975:
UASL acquired an ongoing rolling mill at Agra.
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WIRE AND WIRE ROPE DIVISION
The Usha Martin Ltd. is produce 100,000 MT / annum
manufacturing facilities at Ranchi (Eastern India) is amongst the
top four wire rope producers in the world. Since its inception, the
division has continuously developed and expanded its range of product offerings and is considered a pioneer in certain classes of
products in India. Steel wire ropes manufactured by the division
find wide applications in oil exploration, mining, elevators,
Crane, fishing, construction, load transportation and general
engineering sectors.
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MACHINERY DIVISION This is located at Bangalore was set up in 1974 to
manufacture Wire Drawing and allied machines. Over the
years, the division has added a wide range of Wire, Wire
Rope and Cable machinery to its product range and is now
the leader in this field in India. The division started with
technical collaboration with M/s Marshall Richards Barcro of UK and subsequently has collaborated with internationally
reputed firms like De-Angeli Industries SPA, Italy,
Stolberger Maschinenfabrik, Germany, Hi-Draw Machinery
Ltd, UK and Redaelli Techna Meccanica, Italy. A faciltity in
ranchi has also been created for manufacturing machines
required for Wire Drawing and Stranding Applications.
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PRESENCE
•Headquartered in Kolkata, India;
•
Iron ore mine (Barajamda) and captive coal mines (Daltonganj) in thestate of Jharkhand, India;
•Steel manufacturing facilities located in Jamshedpur and Agra;
•Wire and wire rope manufacturing facilities located in Ranchi
(Jharkhand) and Hoshiarpur (Punjab) in India, Bangkok (Thailand),
Dubai (the UAE) and Nottinghamshire (the UK);
•High – value wire and conveyor cord manufacturing facilities at Ranchi;
•Machinery manufacturing and engineering application centers in
Ranchi and Bangalore;
•Manufacturing units for bright bars in Ranchi and Sriperumbudur(Tamil Nadu); Rigging shops in the Netherlands and the UK.
•Telecommunication cables manufacture at Silvassa (India).
•Wide global network of marketing and distribution warehouses in
Singapore,
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CORPORATE SOCIAL RESPONSIBILITY
Usha Martin has strongly believed in its social responsibility being animportant part of business philosophy. The company has promoted
Krishi Gram Vikas Kendra (KGVK), as its’ social arms to take
appropriate initiative in various areas which affect health, social life
and economic well being of people for a period of over 35 years.Presently, KGVK reaches out to about one lack household of tribal
people and weaker sections of society in over 700 villages across 6
districts in the State of Jharkhand.
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USHA MARTIN AN INTEGRATED COMPANY:
Usha Martin is integrated from iron ore and coal mines at one end
to wire ropes at the other, connected through intermediate captive
power generation and the manufacture of steel and wires.
This is one of the most extensively integrated business modelswithin the wire ropes industry the world over. With new cost
optimisation projects being implemented by the beginning of
2012-13, the deeper integration will strengthen the Company’s
cost – advantage and reduce its already low dependence on external
raw material sources. Moreover, the Company will be better
equipped to manage industry cycles effectively.
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PRODUCTS:
The Company’s product basket comprises wires, strands,
wire ropes, cords, slings, wire rods, straight bars,
construction and structural steel, bright bars, conveyor
cords, specialty wires and telecommunication cables.
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WORLD’S LARGEST ARCH BRIDGE IN DUBAI
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INCHEON BRIDGE NEW SONGDO CITY, KOREA
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SOURCE OF THE RAW MATERIAL
Steel Wire Rod (90% to 96%) : UASD, Jamshedpur
Steel Wire Rod (4% to 10%) : Other Sources (Imported or Local)
Fiber Core : M/S Chhota Nagapur WireRope, Ranchi.
Other Raw Material
Zinc : M/S Hindustan Zinc
Lead, Jute & Lubricants : Imported or Local
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BOARD OF DIRECTORS:
•The Board of Directors of the Company comprises of
One Non-Executive Chairman
•Seven Independent Non-Executive Directors,
•
One Non-Executive Director and•Four Executive Directors.
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BUSINESS SEGMENT:
•STEEL AND MINING BUSINESS
•WIRE ROPES AND SPECIALITY PRODUCTS BUSINESS
•CABLE BUSINESS
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MAJOR OVERSEAS UNITS:
•Usha Martin Singapore Pte Limited [UMSPL]
•Usha Martin Americas Inc. [UMAI]
•Brunton Wolf Wire Ropes FZCo [BWWR]
•Usha Siam Steel Industries Public Company Limited[USSIL]
•Usha Martin International Limited [UMIL]
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INVENTORY MANAGEMENT AN
INTRODUCTION :
Inventory management is an important part of theworking capital management of any organisation.
Practical decisions have to be made as to how inventory
is going to be managed
– Which management system should be used, howmuch inventory should be kept and so on.
DESIGN OF STUDY
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TYPES OF INVENTORY MANAGEMENT
SYSTEMS
•(JIT)
•(EOQ)
•(SS)
•
(LIFO) AND (FIFO)
•ABC METHOD
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THE REASONS FOR INVENTORY
CONTROL
• Helps balance the stock as to value, size, color, style,
and price line in proportion to demand or sales trends.
• Help plan the winners as well as move slow sellers.
• Helps secure the best rate of stock turnover for each
item.
• Helps reduce expenses and markdowns.
• Helps maintain a business reputation for always
having new, fresh merchandise in wanted sizes and
colors.
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TYPE OF INVENTORIES
•Raw materials Inventory
•Work-in-Process Inventory
•Finished Goods Inventory
•
Stores and Spares
RawMaterials
Work inProgress
FinishedGoods
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Usha Martin Limited has classified its inventories into 3
categories namely,
(1) Stores and Spare
(2) Production and
(3) Packing
INVENTORY MANAGEMENT AT USHA MARTIN LTD.
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GRAPHICAL REPRESENTATION OF ABC
METHOD
The items of all inventories are arranged in descending
order according to their book value. Then the
summation of consecutive items from the top is donewhich adds up to 70% of total inventory costs.
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USHA MARTIN USES ABC ANALYSIS SYSTEM FOR
INVENTORY MANAGEMENT:
ABC Analysis is generated according to the book value of the items
stores is custodian every items. Breakup of ABC: - A=70%, B=20%,
C=10%
Category A - Items whose book value constitutes up to 70% of the total
value of the material.
Category B- 20%.
Category C- Remaining 10%.
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CATEGORY % OF TOTAL VALUE % OF TOTAL QUANTITY
A 70 - 80 5 - 10
B 20 – 25 20 – 30
C 5 – 10 60 - 70
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‘A’ ITEMS ‘B’ ITEMS ‘C’ ITEMS
High consumption
value
High control
No safety stock Minimization of waste
material
Frequent ordering
Weekly control
statement
Moderate value
Moderate control
Low safety stock
Control over waste
Ordering 3 times in a
month
Monthly control
Low consumption
value
Low control
High safety stock Annual review of
waste
Bulk ordering once in
a monthQuarterly control
Report
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ITEMS PRICE PER UNIT
RS.
NO. OF UNITS
(TON)
TOTAL COST RS.
Iron 4.30 6886739 296129777
Copper 140.0 83241 11793740
Coke 17.31 24566 42523746
Lubricants 20.81 28394 5908798
Zinc 312.5 82940 25918750
Aluminums 3.08 243456 7498442
Lead 480.29 98682 74395777
Plastic 2.80 428260 1199128
TOTAL 7876278 465368158
(Rs. In Thousand)
INTERPRITATION
STEPS - ICALCULATION OF TOTAL COST OF INVENTORY
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ITEMS TOTAL COST IN
DECLINE ORDER
Rs.
CUMULATIVE
TOTAL COST Rs.
Iron 296129777 296129777Lead 47395777 343525554
Coke 42523746 386049300
Zinc 25918750 411968050
Copper 11793740 423761790Aluminums 7498442 431260232
Lubricants 5908798 437169030
Plastic 1199128 438368158
STEPS - II
CALCULATION OF CUMULATIVE COST
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0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
Iron Lead Coke Zinc Copper Aluminums Lubricants Plastic
TOTAL COST IN DECLINE ORDER Rs.
TOTAL COST IN DECLINE ORDER
Rs.
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0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
500000000
Iron Lead Coke Zinc Copper Aluminums Lubricants Plastic
TOTAL COST IN DECLINE ORDER Rs.
CUMULATIVE TOTAL COST Rs.
CUMULATIVE TOTAL COST Rs.
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Classifying the group as A, B, and C based on total cost.
A = 70% of total cost = 0.70 × 438368158 = 306857710
B = 20% of total cost = 0.20 × 438368158 = 87673631
C = 105 of total cost = 0.10 × 438368158 = 43836815
STEPS III
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UML has achieved phenomenal success with proper
utilization of Inventory Management. Inventory managementis so critical for planning or forecasting for the future needs
and for developing strategic plans to handle the market
situations. It needs a top down approach to structure an
effective way of tackling inventory managing problems.
If UML is to achieve incremental growth and maximize its
market capitalization, it has to give more emphasis on
effective inventory control and use available resources
optimally. UML has to keep itself abreast of new trends in
inventory management and lean manufacturing such as JIT.
CONCLUSION
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•I suggested for ABC analysis and ABC analysis gives
more appropriate results and conclusion.
•I suggested little changes in the inventory managementsystems.
SUGGESTION