Company profile

• 1. Presented By :
  ParneetKaur
  MBA 2A
  Summer training project report
  

2. COMPANY PROFILE
Company:GlaxoSmithKline Consumer Health Limited.

Head office: Gurgaon(Haryana)
Registered Office:Nabha(Punjab)

Status:Multinational Company (originally U.K. Firm)
Turnover:Rs. 20,251.2 (Millions), 11.5%as compare to
lastyear
Export to: Bangladesh, Myanmar, Sri Lanka, Middle East
Nepal, Hong Kong, Malaysia, & Fiji
3. INTRODUCTION TO GSKCH
GlaxoSmithklineConsumer Healthcare Limited is an Indian associate of GlaxoSmithklinePlc, U.K.
Largest players in the health food drinks industry in India
Manufacturing plants located in Nabha, Rajahmundry & Sonepat has a total workforce of over 2700 people
Flagship product- Horlicks
GSKCH has distribution network in India comprising over 1800 wholesalers & direct coverage of over 4,00,000 retail outlets.
4. MISSION
To improve the quality of human life by enabling people to do more, feel better and live Longer.
5. Historical Background
In 1955 Horlicksmanufactured by Horlicks Ltd. Slough, England was being imported, bottled and sold in India
On May 31, 1958 Pratap Singh laid the foundation stone of the Company at Nabha.
On 24th March 1960, the factory went into production.
In 1969 Horlicks Group disposed off their holding in India and U.K. to BEECHAM GROUP OF INDUSTRIES" which was a multinational
In 1979 Beecham India (Pvt.) Ltd. Mumbai merged with Hindustan Milk foodManufacturers Ltd. and the name was changed to H.M.M. Beecham Group ltd.
6. Cont..
SmithKline U.S.A. merged on September 16, 1991 to form Smith Kline Beecham Consumer Brands, Plc. with its registered office in the U.K. H.M.M. became a part of Smithkline Beecham Consumer Brands
In 1994 the name was changed to Smithkline Consumer Healthcare Ltd.
A merger took place between Smithkline Beecham and Glaxo Welcome and the new company GlaxoSmithkline (GSK) was formed on 27-12-2000 .
In the Indian market GSKCHs journey began with Horlicks

7. Business stations of GSKCH ltd.
Head office:
GURGAON
Packing stations:
MANGALDOI, GAUHATI (ASSAM)
KOMPALLY
BADDI (HIMACHAL PRADESH)
Regional Sales Offices (RSO) :
GHAZIBAD
MUMBAI
KOLKATA
CHENNAI
Factories
RAJAMUNDREY
SONIPAT
NABHA
8. Main Product of GSKCH Ltd.
HORLICKS
MOTHER HORLICKS WITH DHA
JUNIOR HORLICKS WITH DHA
BOOST
BISCUITS
ENO
GOPIKA GHEE (BY PRODUCT)
9. About GSKCH Nabha Plant
It is biggest unit of all the three manufacturing units and it is also the registered office of GSK Consumer Health Care.
The plant at present employs a work force varying from 1500 to 2000 out of which approximately 1100 are permanent. There is a staff and management of about 140 persons
There is a wage agreement for 3 years
10. Cont
The plant runs 24 x 6 and there are 3 shifts from 5.15 a.m. to 1.15 p.m., 1.15 p.m. to 9.15 p.m. & 9.15 p.m. to 5.15 a.m. The office opens for 6 days in a week.
Production Capacity of Nabha plant is about 99500 MT pa

There are 7 Milk Collection Centers (MCCs) aroundNabha, to meet the requirement of 70 tones of Milk per day.
11. 5S AT NABHA
5S is a tool that aims to create and maintain an organized, clean & high performance workplace. This tool has been efficiently utilized by Nabha Unit and it has lead to reduce the records retrieval time drastically.
Sort
Store
Shine
Standardize
Sustain
12. Supply chain process
13. Various departments at GSKCH Ltd
HUMAN RESOURCES AND ADMINISTRRATION DEPARTMENT.
MANUFACTURING DEPARTMENT
MILK PROCUREMENT DEPARTMENT
QUALITY ASSURANCE DEPARTMENT
ENGINEERING DEPARTMENT
FINANCE DEPARTMENT
14. FINANCE DEPARTMENT
VENDOR PAYMENT
DISBURSEMENT OF SALARIES
PAYMENT TO GOVERNMENT BODIES

MILK ACCOUNTING

TREASURY & BANKING
PAYMENT OF SERVICES
CAPITAL BUDGETING
15. SWOT analysis of Nabha plant
Strengths:
They have there own energy conversion projects.
GSK has good brand image in the market.
High production capacity.

Weaknesses
GSK is not using its Working capital properly.
GSK dont recruit the any female staff.

16. Cont.
Opportunities
Rising household incomes, increasing urbanization, changing lifestyles, growth in working womens population should lead to greater demand for processed food products

Threats
Limited use of technology in food processing
High taxes on branded agricultural products

17. INVENTORY
The dictionary meaning of Inventory is a list of goods. In a wider sense, inventory can be defined as an idle resource, which has an economical value.
KINDS OF INVENTORY
Raw materials & parts
Consumables & Spares-
Work-in-progress-
Finished goods-
18. INVENTORY CONTROL
Inventory Control is the art and science of maintaining the stock level of a given group of items. The activities of Inventory control include the following:
Determination of limits of inventories to be held.
Determination of inventory policies.
Setting out of investment pattern and its regulation as per individual and collective requirements.
19. IMPORTANCE OF INVENTORY CONTROL
To minimize the idle time caused by shortage of inventory and non- availability of inventories as per requirements, and

To keep down capital investment in inventories, inventory carrying cost and obsolesces losses.

20. VARIOUS INVENTORY MANAGEMENT TECHNIQUES
Selective Management: In this technique, various items of stores are classified in various classifications
Management by Exception: In this technique, items with certain exceptions are tackled on different points of time.
Rationalization: Techniques of standardization and variety reduction are used.
Value Analysis: Functions performed by the materials are analyzed and alternative raw materials are suggested to achieve the same function at minimum cost.
Computerization: Computer outputs can be used for scientific forecast of demand to solve many inventory models.
21. NATURE OF GENERAL INVENTORY
Inventories are stock of the product a company is manufacturing for sale and components that make up the product. The various forms in which inventories exist in a manufacturing company are: raw materials, work in progress, finished goods & stores and spares.
22. GENERAL STORE INVENTORY IN GSK
General store is that which the part of the production becomes indirectly. Without such inventory no production will be there. This store inventory includes: -
Polythene bags
Consumables like diesel etc.
Cleaning material like nitric acid, caustic soda etc.
Floor cleaning towels
Spare parts of the machines
23. Cont.
Inventory required under GMP (Good Manufacturing Practices) like uniform, hand gloves, mouth covers, safety shoes etc
Under the general store inventory total no. of items are 2254, which have the ABC classification. Their total consumption value is Rs. 1,99,02,268.13 .
24. TITLE
Inventory management and control at GlaxoSmithkline Consumer Healthcare Ltd.
25. OBJECTIVES OF STUDY
To determine overall inventory position of the company.
To study the existing inventory control practices and procedures in the company
To know that how the recategorization of the inventory is done through the ABC analysis.
To know that how other techniques can be better applied on the existing controlling technique.
26. Research Methodology

• Sources of Data:

Primary data
Secondary data

• Size of Population:

Include all the employees presently working either in finance department or procurement department or store department of GlaxoSmithKline Consumer Healthcare Ltd. at Nabha plant.

• Sample size :

Six employees working in Finance department or procurement department or store departmentof GlaxoSmithKline Consumer Healthcare Ltd. at Nabha plant.

27. Cont..
Sample unit:
Any one employee working in Finance department or procurement department or store deparrmentof GlaxoSmithKline Consumer Healthcare Ltd. at Nabha plant.
Research design concepts:
For this research descriptiveresearch designis used .
The period:
The study is supposed to be relating to current year consumption i.e. 2010
28. LIMITATIONS OF THE STUDY:
To maintain secrecy the resource person were not providing information on the ground of maintenance of secrecy (Data being collected through MCA procedures).
A company generally cannot disclose its internal policies to outsiders. In such case, it is very difficult to find out and gather complete and true information in the forms of figures regarding financial matters as an Intern/Trainee
29. ABC ANALYSIS
It is selective approach popularly known Always (A) Better (B) Control (C). The ABC goes by its name it always the best, then better and lastly the good.
Majority of the activity (70 to 80%) is governed by very few (10 to 20) attributes.
15 to 20% of total consumption is represented by another 15 to 20% items that may be classified as B category
Remaining 5 to 10% consumption is represented by a large no. of small consumption value items, which may be classified as C category.
30. Stock physical verification in GSK

For A category items is carried out every six months;
For Bcategory items every year and
Once in two years for C category items.
31. Different criterias for recategorisationfor ABC analysis
Criteria-1
Category Average rate Annual consumption
ARs. 7000 and aboveRs. 70000 and above
BRs,1250 and above Rs,15000 and above
But less then 7000 But less then70000
Cless then Rs.1250 less then Rs. 15000
32. Cont..
Criteria-2
Category Average rateAnnual consumption
ARs. 10000 and above Rs. 100000 and above
BRs,2500 and aboveRs,15000 and above
But less then 10000 But less then 100000
C less then Rs.2500 less then Rs. 25000

33. Requirement for recategorization process
General inventory items.
Their unit value.
There annual consumption
For calculating the unit value any of the following is required
Closing value/Opening value/Consumption valueClosing Qty./ Opening Qty. /consumption Qty.

34. PREPARATION OF PROPOSALS
For preparing the proposals under the different conditions following steps have been taken: -
Firstly check that according to the unit value in which category the item is falling.
See that according to the consumption value which category is best suited to the item.
Then out of the two put the items in the upper category.
35. For example:
According to Unit value it should fall in C category but according to Consumption value it should fall in B category.
Therefore, it will fall in B category.
According to Unit value it should fall in A category but according to Consumption value it should fall in B category.Therefore, it will fall in A category.


36. Existing Criteria: per unit value 7000 and consumption value 70000
According to No. of items

According to consumption value:
37. Proposed criteria: per unit value Rs.10000 and consumption value Rs.100000
According to No. of items
According to consumption value:
38. Comparison between existing and proposed criteria
Comparison of items
Comparison of consumption value
39. FSN Classification
This classification is done on the basis of consumption pattern of the items under analysis.
Fast moving:-Items being issued more than 15 times a year may be placed in F category.
Slow moving:-Items up to a certain limit say 10-15 issues in a year may be classified as S items.
Non-moving:-If there is no issues of a particular item during the past few years, naturally they will be classified as Zero issue items
40. In GSK, criteria for FSN
In GSK items, under FSN categorizing is done on the following criteria :-
Fast moving :-The items which are very frequently moved in one year are included in the fast moving category .
Slow moving :-The items which are moved from stores for a period of one and a half year.
Non-moving:-The items which are not issued from stores for more than three years
41. General Stores Inventory Composition Slow/non/fast moving items
42. LEVEL SETTING
Re-order Level:
Maximum Consumption *Maximum re-order period
Minimum Level:
Re-ordering Level - (Normal Consumption * Normal Re-order Period)
Maximum Level:
Reordering level + Minimum Re-ordering Quantity - (Minimum Consumption * Minimum Re-ordering Level period)
43. Cont..
Danger Level:
(Average Consumption) * (Maximum re-order period for emergency purchases)
Average Stock Level:
Average stock Level = Minimum stock level + of re-order quantity
44. Requirements to set these levels at GSK
First of all consumption of the items by different department or according to production pattern.
On the basis of lead-time involved on purchase of items.

While fixing minimum stock level employees of purchase department in GSK are consider following factors:
Consumption pattern
Seasonality of raw material
Rejection rate in past
Lead time / manufacturing time
Source of material (import or Indian)
Testing time, replenishment time, fumigation time
Vendor response.
45. ECONOMIC ORDER QUANTITY
The quantity to be ordered should be such which minimise the carrying and ordering cost.If the price to be paid is stable, the quantity to be ordered each time can be ascertained by the following formula:-
Economic Order Quantity (EOQ) = 2AO/C
Where,
A = Annual Consumption Quantity
O = Cost of placing one order (ordering cost)
C = Annual inventory carrying cost or holding cost
46. The total cost of material usually consist of:-
Total acquisition cost (Purchase Value) + Total carrying cost (Holding Cost) + Total ordering cost
Acquisition Cost
Holding cost
IN GSK THE RESONABLE ASSESSMENT OF INVENTORY CARRYING COSTS IS ESTIMATED TO 15% PER YEAR OF THE AVERAGE INVENTORY HOLDING
Ordering costs-
IN GSK ORDERING COST PER ORDER COMPUTED IS APPROXIMATELY Rs. 25 PER ORDER.
47. Proposal:

STUDY AND ANALYSIS OF THE INVENTORY OF GSK AS PER THE EOQ MODEL TO KNOW THE DIFFERENCE BETWEEN THE TOTALINVENTORY COSTTO THE ORGANIZATION IN COMPARISON TO THEIR ACTUAL (ROQ METHOD) AND TOTAL SAVINGS, IF ANY, CAN BE MADE FROM THE THREE DIFFERENT.
48. FINDINGS OF THE PROPOSAL
BENEFITS

IF THE ORGANIZATION STARTS PLACING THEIR PURCHASE ORDERS AS PER THE EOQ METHOD THEY CAN SAVE SOME AMOUNT OF MONEY FROM THEIR ACTUAL TOTAL INVENTORY COSTS, AS THIS CAN HELP THEM IN SAVING THEIR WORKING CAPITAL ALSO
49. FINDINGS:
Many items are there in the stores, which although lying in general stores but dont have any category in spite of having consumption value.
Some items have no consumption value but their minimum quantity is more than twice.
Some modern techniques of inventory management likeVED can help in reducing investment in inventory, is absent.
Items, which are written off in the books, are lying in the stores and in any year if again their need arises they are written back in the books.
Capital related spares are placed under D99 category. These are those spares the asset value of which becomes zero but their spares have value.
50. SUGGESTIONS:
All the general store inventory items should be recategorized especially those, which have the consumption value during the year.
Company should have to go for some other controlling techniques like VED
The items, which dont fall under any category, should be treated separately.
The company must treat ROQ & EOQ separately on their individual effects on the inventory costs.
51. Thank you