Inventory Management -- Driplex Water Eng. Thesis 127p

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A PROJECT REPORT

ONINVENTORY MANAGMENT

DRIPLEX WATER ENG.

A Study ProjectSubmitted in the partial fulfillment of the requirement for the award of the

Degree of Master of Business Administration

2008 – 2010

Submitted by: Under Guidance of:

SONIA MAKKAR MR. R.K MEHTA

Bharati Vidyapeeth University, School of Distance Education,

Academic Study Center: BVIMR, New Delhi2008 – 2010

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STUDENT UNDERTAKING

This is to certify that I have completed the Internship Project titled “INVENTORY

MANAGMENT” under the guidance of “MR R.K MEHTA” in the partial fulfillment

of the requirement for the award of Master of Business Administration of Bharati

Vidyapeeth University, School of Distance Education. This is an original piece of

work & I have not submitted it earlier elsewhere.

Students Signature

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CERTIFICATE

This is to certify that the internship project titled “INVENTORY MANAGMENT” is

an academic work done by “SONIA MAKKAR” submitted in the partial fulfillment

of the requirement for the award of the Degree of “Master of Business

Administration” from “Bharati Vidyapeeth University, School of Distance

Education, New Delhi” under my guidance & direction. To the best of my

knowledge and belief the data & information presented by him/her in the project has

not been submitted earlier.

MR. R.K MEHTA

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CERTIFICATE

This is to certify that the internship project titled “INVENTORY MANAGMENT” is

an academic work done by “SONIA MAKKAR” submitted in the partial fulfillment

of the requirement for the award of the Degree of “Master of Business

Administration” from “Bharati Vidyapeeth University, Pune” school of distance

education.

Dr. Sachin. S. Vernekar

(Director)

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ACKNOWLEDGEMENT

I deem it a time bound privilege and function to dedicate a page of mine to a number

of helping hands for their cooperation and guidance that enabled me to dedicate time

and effort in framing any study into a conceivable analysis

It is my proud privilege to express my sincere gratitude to all those who helped

me directly or indirectly in completion of this project report.

I would like to express my immense thanks to my respectful internal guide Prof. R.K

MEHTA of Bharati Vidyapeeth University Institute of Management And Research

whose invaluable guidance and advice nourished my every step which eventually

leads to the successful completion of the work.

Last but not least I am indebted to those entire people who indirectly contributed and

whom this work should not have been possible.

Endeavour has been made to make the project error free yet I apologies for the

mistakes.

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PREFACE

Inventory Management offers comprehensive reporting capabilities to keep you on

top of inventory status. Centralized inventory management consolidates inventory

information by tracking lot numbers, on-hand levels and expiration dates, making the

re-ordering process more efficient. It also enables simultaneous tracking and

documenting supplies during studies to reduce redundant data entry and increase

workflow efficiency.

Inventory management software helps create invoices, purchase orders, receiving

lists, payment receipts and can print bar coded labels. An inventory management

software system configured to your warehouse, retail or product line will help to

create revenue for your company. The Inventory Management will control operating

costs and provide better understanding. We are your source for inventory management

information, inventory management software and tools.

Inventory is a quantity or store of goods that is held for some purpose or use (the term

may also be used as a verb, meaning to take inventory or to count all goods held in

inventory). Inaccurate inventory counts can cost you sales and delay shipments past

the promise date. Out-of stock items as well as overstocked items in inventory can be

devastating to your business.

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TABLE OF CONTENTS

CHAPTER – 1 INTRODUCTION 10

1.1 overview of industry 11

1.2 profile of organization

1.3 statement about problem 31

1.4 competitors 32

1.5 swot analysis 33

CHAPTER – 2 RESEARCH METHODOLOGY 372.1 objectives 38

2.2 scope of study 38

2.3 managerial usefulness 39

2.4 methodology 40

2.5 limitations 42

CHAPTER – 3 CONCEPTUAL DISCRIPTION3.1 literature review 44

CHAPTER – 4 DATA ANALYSIS 79

CHAPTER – 5 CONCLUSION & SUGGESTIONS

REFERENCES

Questionnaire 98

Books 103

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CHAPTER – 1INTRODUCTION

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INTRODUCTION

1.1 OVERVIEW OF INDUSTRY

WHAT IS INVENTORY

Despite its importance to the supply chain, inventory is not universally well

understood. It is variously characterized, both positively and negatively, as an

economic asset to a non-income-producing use of capital funds. Only when

considered in light of all quality, client service and economic factors—from the

viewpoints of purchasing, manufacturing, sales and finance—does the whole picture

of inventory become clear. No matter the viewpoint, effective inventory management

is essential to supply chain competitiveness.

Inventory is a list for goods and materials, or those goods and materials themselves,

held available in stock by a business. Inventory are held in order to manage and hide

from the customer the fact that manufacture/supply delay is longer than delivery

delay, and also to ease the effect of imperfections in the manufacturing process that

lower production efficiencies if production capacity stands idle for lack of materials.

In other words, Inventory is a quantity or store of goods that is held for some purpose

or use (the term may also be used as a verb, meaning to take inventory or to count all

goods held in inventory). Inventory may be kept "in-house," meaning on the premises

or nearby for immediate use; or it may be held in a distant warehouse or distribution

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center for future use. With the exception of firms utilizing just-in-time methods, more

often than not, the term "inventory" implies a stored quantity of goods that exceeds

what is needed for the firm to function at the current time (e.g., within the next few

hours).

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WHY KEEP INVENTORY?

Why would a firm hold more inventory than is currently necessary to ensure the firm's

operation? The following is a list of reasons for maintaining what would appear to be

"excess" inventory.

What do we have in stock? Where is it located? How much is it worth? You need the

answers to these questions in order to manage your inventory effectively. The OPEN

SYSTEMS® Accounting Software (OSAS®) Inventory application gives you the

timely and accurate information you need to make sound purchasing and sales

decisions. You can track every aspect of your inventory, helping you make a positive

impact on your bottom line. You can closely monitor inventory movements by

tracking detailed inventory history; then, use the Inventory Movement Report to

identify your best products and to understand their purchase/sales cycles. You can

even spot seasonal demand patterns. The Valuation Report summarizes the value of

the items you have on hand and the profit on items sold during the year. You’ll have

information at your fingertips to help you satisfy the customer. You can provide them

with accurate and timely information by accessing on-hand inventory quantities.

Receipts are posted online, so they’re always available to sell. When tracking an

order, you will be able to access detailed descriptions for each item. You’ll know at a

glance the items in use, committed, and on order. You’ll even be able to recommend

alternative item options.

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MEET DEMAND.

In order for a retailer to stay in business, it must have the products that the customer

wants on hand when the customer wants them. If not, the retailer will have to back-

order the product. If the customer can get the good from some other source, he or she

may choose to do so rather than electing to allow the original retailer to meet demand

later (through back-order). Hence, in many instances, if a good is not in inventory, a

sale is lost forever.

KEEP OPERATIONS RUNNING.

A manufacturer must have certain purchased items (raw materials, components, or

subassemblies) in order to manufacture its product. Running out of only one item can

prevent a manufacturer from completing the production of its finished goods.

Inventory between successive dependent operations also serves to decouple the

dependency of the operations. A machine or work center is often dependent upon the

previous operation to provide it with parts to work on. If work ceases at a work center,

then all subsequent centers will shut down for lack of work. If a supply of work-in-

process inventory is kept between each work center, then each machine can maintain

its operations for a limited time, hopefully until operations resume the original center

Inventory of resources is held to achieve sales turnover target. Investment in large

inventories adversely affects the organization's cash flow and working capital as

investment in inventory represents substantial portion of total capital investment in

any business. It is, therefore, essential to balance the advantage of having inventory of

resources and the cost of maintaining it so as to determine an optimal level of

inventory of each resource so that total inventory cost is minimal.

Inventories are assets of the firm, and as such they represent an investment. Because

such investment requires a commitment of funds, managers must ensure that the firm

maintains inventories at the optimum level.

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1.2 PROFILE OF ORGANISATION

Driplex Water Engineering Ltd is a leading turnkey solutions provider of water

treatment plants, especially for the power sector. For the last three decades we have

been synonymous with commitment and integrity in the filed, having to our credit

some of the biggest and prestigious projects.

Driplex, in fact, has the dual distinction of being the largest water treatment plant

provider to the power sector in India and also having the widest range of process and

products for total services in water and ash management

Driplex was formed in 1974 and in this journey of 33 years we have catered to some

of the biggest names in the Indian industry and had the distinction of being one of the

few companies to provide water treatment plants and having its own fabrication

facilities. However, we have also dared to take initiatives – by venturing into research

and development and having the capacity to experiment with design in industrial and

waste management

Today, the company is home to a team of devoted staff of over 350 people,

comprising highly qualified engineers, technicians and draftsmen. We have in-house

capabilities for process design and engineering, with computer-aided design,

fabrication, supply, erection, testing, commissioning, construction of associated civil

works, operation, and training & maintenance of plants particularly on the turn key

basis. Our solutions and systems are regularly updated with state-of-the-art

technology and selection of process equipment through ongoing interaction with

various collaborators/ associates like Best Water Group, Austria and Lanxess

(formally Bayes) Germany Over the years, Driplex has developed and delivered a

host of process & products for power sector, refineries, fertilizer plants, heavy

industrial sectors & public health departments, and has executed over 150 large

turnkey plants from concept to commissioning.

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PRODUCT RANGE:

Portable Water Treatment:

The aim of water treatment is to produce and maintain water that is hygienically safe,

esthetically attractive and palatable, in an economical manner. Water treatment

involves physical, chemical and biological changes that transform raw water into

potable water. The treatment process used in any specific instance depends on the

quality and nature of raw water.

Typical Scheme For Potable Water System

Raw water is pumped to an Aerator, which oxidizes soluble iron in the Raw Water

from Ferrous to Ferric State.

Water flows to the Stilling Chamber to break the Turbulence State.

Water is then taken into the Flash Mixer for intimate mixing of chemicals with the

raw water.

The raw water is dosed with Alum, Lime and Polyelectrolyte to coagulate and

flocculate the suspended / colloidal matter and form floc of higher nuclei thereby

enhancing the efficiency of sedimentation.

Chemically dosed raw water is then fed into the clariflocculator unit wherein

flocculation and clarification of raw water takes place.

The sludge generated in the clariflocculator is bled via Telescopic Bleeds to an

underground Sludge Pit. The sludge collected from the plant is finally pumped

out.

Clarified water is collected in the launder of the clarifier located on the top

periphery from where it flows to the gravity filter for further filtration.

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Chlorine dosing is done for disinfection purpose.

Filtered water is collected in filtered water storage tank from where it is pumped

to various consuming points.

Sewage Treatment Plant

The municipal sewage is mostly treated by conventional activated sludge process. The

treated water meets the standards of municipal and state pollution control board and

can be used for agriculture or horticulture purpose.

Typical Scheme For Sewage Treatment Plant

The raw sewage is pumped to the inlet chamber of treatment plant, from there

it flows to screen chamber where physical separation of floating and

suspended organic and inorganic materials takes place.

The sewage water from screen chamber flows to grit chamber, where coarse

particles of sand, ash and clinkers, egg shells, bone clips and inert materials

are removed.

The sewage water from grit chamber flows to primary clarifier where

sedimentation of settleable solids takes place. Primary clarifier also reduces

the organics load on secondary treatment units.

The sewage water from primary clarifier flows to aeration tank, where the

sewage containing waste organic matter is aerated and micro-organisms

metabolize the soluble and suspended organic matter.

The waste water from aeration tank flows to secondary settling tank, where

separation of biological sludge takes place. The efficient separation of the

biological sludge is necessary for ensuring final effluent quality and also for

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return of adequate sludge to maintain the MLSS level in the aeration tank.

The treated water from secondary clarifier collected in treated water collection

tank is pumped for final disposal.

The excess sludge from secondary clarifier and sludge from primary clarifier

is pumped to sludge thickener for thickening of sludge.

The thickened sludge from sludge thickener is pumped to sludge digester for

anaerobic sludge digestion.

The digester sludge is taken to centrifuge or sludge drying bed for sludge

dewatering.

The filtrate from dewatered sludge is collected in a sump and pumped back in

inlet chamber.

Pre Treatment Plant

The nature and concentration of impurities and objectionable constituents of water

determine the methods to be employed for the treatment of water. Different

techniques are used for removal of mechanical impurities, Clayey turbidities,

Colloidal, dissolved impurities, organic matter, detergents, polycyclic aromatics,

colouring substances, oils and aliphatic hydrocarbons etc. which impart taste or odour,

polyvalent heavy-metal compounds, germs and bacteria.

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Typical Scheme For Pre Treatment Plants Raw water is pumped to an Aerator, which oxidizes soluble iron in the Raw Water

from Ferrous to Ferric State.

Water flows to the Stilling Chamber to break the turbulence.

Water is then taken into the Flash Mixer for intimate mixing of chemicals with the

raw water.

The raw water is dosed with Alum, Lime and Polyelectrolyte to coagulate and

flocculate the suspended / colloidal matter and form floc of higher nuclei thereby

enhancing the efficiency of sedimentation.

Chemically dosed raw water is then fed into the clariflocculator unit wherein

flocculation and clarification of raw water takes place.

The sludge generated in the clariflocculator is bled via Telescopic Bleeds to an

underground Sludge Pit. The sludge collected from the plant is finally pumped

out.

Clarified water is collected in the launder of the clarifier located on the top

periphery from where it flows to the clarified water reservoir.

Water collected in clearified water reservoir is then pumped to various consuming

points.

Demineralisation Plants

Demineralisation is the Process of removing the mineral salts from water by ion-

exchange. Impurities that remains dissolved in water dissociate to form positive and

negative charged particles known as ions. These impurities or compounds are called

electrolytes. Generally, all natural water has electrolytes in varying concentrations.

An ion-exchange vessel holds ion-exchange resin of the required type through which

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water is allowed to pass. The selective ions in the water are exchanged with ions or

radicals loosely held by the resin. In this way, the water is passed through several

vessels or a mixed bed vessel so that both positive and negative ions are removed and

water is demineralised.

Regeneration techniques for DM plants

Parallel flow (co-current) Regeneration Technique The exchange resin is

loaded under down -stream conditions only.

Fixed bed (counter-current) Counter Flow Process The Exchange resin is

loaded under down-stream and regenerated under up-stream conditions with

dynamic back pressure created with water or air.

Floating Bed / counter flow process The regeneration is performed under down-

stream flow, without hydraulic problems. The resin is loaded up-stream flow, so

that the bed is kept floating.

Automatic Regeneration The regeneration procedure (back-wash, regeneration

& rinse) is automatically controlled, implying reduced operating costs. To control

the regeneration cycle either of the following systems can be used: a) Relay

based interlock and operation sequence logic. b) PLC based interlock and

operation sequence logic.

Quality of treated water from a demineralisation plant

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Cation-Anion

Polishing

Mixed Bed

Cation-Anion

Counter-Current

Regeneration

Cation-Anion

Co-Current

Regeneration*

Conductivity 0.1 µS/cm at 25°C0.5 to 1.0 µS/cm at

25°C

5 to 30 µS/cm at 25

C

Sodium 0.01 mg/l 0.05 to 0.1 mg/l 0.5 to 3 mg/l

Reactive silica 0.01 mg/l 0.025 mg/l 0.1 to 0.3 mg/l

Reverse Osmosis Plants

Reverse Osmosis is reversal of natural process of osmosis - a process by which a

dilute solution will pass through a semi-permeable barrier to a more concentrated

solution. In reverse osmosis, a pressure in excess of osmotic pressure is applied to a

concentrated solution, forcing essentially pure water through the semi permeable

membrane, leaving behind the dissolved solids. The result is a pure, essentially

mineral-free stream of water. Driplex customizes its solutions based on the clients

requirements. Usually RO systems are advisable where TDS > 500 ppm. Reverse

Osmosis Systems offer a 96 - 99 % rejection of salts.

The hollow fiber membranes for water purification are resistant to bacterial attack and

degradation caused by acidic and alkaline solutions. They are suitable for use on both

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alkaline pH softened feed waters as well as acidic feed waters. Because of closely

packed hollow fibers, Driplex reverse osmosis modules offer great advantages in

active surface areas. This means greater volume of pure water from a compact, light

weight, easily handled module. The recovery of large RO System is commonly

chosen based on the potential for scale formation. The higher the recoveries, the

greater the concentration of salts will be in the downstream membrane stages, thus the

higher the potential for scale formation.

Applications of Reverse Osmosis Plants

Pre-treatment for the production of

very pure water for semiconductor,

electrical and glass industries

Demineralization of service water for

special uses (hospitals and air-

conditioning and sanitary engineering)

Demineralization of water for

industrial use as process water,

cooling water and boiler feedwater

Removal of organic matter as

preliminary stage of ion-exchange plants

Demineralization and decolourisation

of pretreated effluents for recycling

Concentration of effluents for the

removal of harmful matter

Concentration of watery solutions in

the chemical, pharmaceutical and

food industry

Recovery of metals from concentrated

solutions

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Ultra Filtration Plants

Ultra Filtration is a membrane fractionation process used to separate and concentrate

macro-molecules and colloids from water. Ultra Filtration is most reliable and

economical solution for the removal of impurities such as bacteria, heavy metals and

suspended solids. Substances smaller than the particle size of the membrane are

passed while large solutes or particles are rejected. The typical molecular weight cut

off (M.W.C.O.) of Ultra Filtration membranes ranges from 1,000 to 1,00,000 daltons.

Because of its larger pore size, it does not reject dissolved salts but removes colloidal

solids such as silica, iron and some T. O. C. contaminants.

UF Hollow Fiber Membranes are Hot Water Sterilisable, Chlorine & Acid/Alkali

Tolerant. These Membranes have the unique advantage of being hydrophillic nature,

which results in fouling resistance. UF Membranes also have a wide range of pH and

temperature tolerance and are easily backwash able, to avoid membrane fouling.

Advantages of Ultra Filtration Systems

The pre-treatment by pre-UF needs only 20-30% space as compared to

conventional pre-treatment system

There is no biological growth in the filtration system, because of non - stagnant

fluid flow

Less civil costs and faster installation

Less energy consumption

Reduced waste disposal

Lower operating costs.

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Condensate Polishing Systems

Driplex offers a wide range of condensate polishing solutions, from deep bed

condensate polishers and powdered resin condensate treatment, to special resin grades

and off-site regeneration. Condensate polishing can improve bottom line by reducing

the losses or damages caused by corrosion and deposits; it can significantly reduce

start-up times and the frequency of routine cleaning. This translates into cost savings

and greater operating efficiencies for our customers.

The essential feature of this system is the design and operation of the external

regeneration vessels. The use of conical type units achieves a minimization of the

surface area of the separation zone - on a typical design for a 500 MW set, this can be

of the order of a factor of 10x, when combined with a carefully designed flow system

(when compared with conventional sluicing systems which are inherently turbulent) it

can be readily seen that the efficiency of the resin separation is much higher. This

facility is becoming a standard inclusion in many deionization plants provided to

produce ultra pure make up water for boiler units operating at high pressures.

Condensate treatment is widely used in coal-fired thermal power plants with super-

critical boilers, where high purity must be strictly maintained. Deionization at high

flow rates can present challenges with respect to the design of a suitable internal

distribution system, particularly when one considers the very large ratio that would

exist between the normal high operating flow and the necessary resin regeneration

flow.

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Effluent Treatment Plant

The effluent treatment plant is designed to treat the effluent coming from different

areas of the plant. The treatment of different effluents varies with the type of effluent.

Oily Water Effluent Treatment

Oily water effluent treatment plant is designed to treat effluent mainly containing oily

effluent. The oily water from the Transformer Area, Turbine building, Workshop etc

is collected in common collection sump from where water is pumped through the

Plate Interceptor. Oil separated from Plate Interceptor is collected in drums & clear

water is lead to central monitoring basin through gravity. Sludge generated from the

Plate Interceptor is led to the Sludge Pit for further treatment.

Service Water Effluent Treatment

The system is envisaged for treatment of effluent mainly containing turbidity and

suspended solids. Service water washing effluent from different areas is collected in

common collection pit and then pumped to the flash mixer where chemical mixing

takes place. The effluent is dosed with Alum, Lime and Polyelectrolyte to coagulate

and flocculate the suspended / colloidal matter. Water then flows through the

flocculation tank for flocculation and is finally carried over to tube/lamella settler

through gravity where clarification of water takes place. Clarified water is then led to

common monitoring basin through gravity. Sludge generated in the process shall be

collected and pumped for further treatment.

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Coal Handling Plant & Coal Storage Effluent Treatment

Effluent from the Coal handling plant and Coal storage Area is collected and is led

through the inlet channel to break the turbulence. The Effluent then flow to the Coal

Slurry Settling pond where the discrete particles settle down and the clear water flows

to the coal decanted water sump. Decanted water is then pumped to the central

monitoring basin.

Sludge Handling System

Sludge collected from different clarifiers is pumped through the Sludge Thickener.

Thickened sludge is the further pumped to centrifuge. Sludge cakes generated from

centrifuge are disposed off. Supernatant is recycled back to the main clarifier.

Ash Handling Plant

Material handling solutions

Driplex Water Engineering Limited - an ISO 9000 - 2001 organization with its

expertise in executing turnkey EPC projects have been providing optimized country

specific solutions for Ash Handling System. The criticality of the system in optimized

continuous plant operation is well acknowledged and the expertise of Driplex in

undertaking such contracts have been proven for the years. Presently, in association

with M/s Zhenjiang Power Station Auxiliary Machinery Plant (ZAMP), China, we are

in a position to provide the complete solutions for both the pneumatic and hydraulic

handling of ash and other powder material. Technology advancements, backed by

specially developed methodology has, over the years, given us an edge over the other

similar equipment suppliers. Our approach to the overall system design results in

optimized equipment sizing, drastically reducing the cost of operation.

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One of the critical aspects of designing pneumatic conveying system for ash or

powder material basically relates to the flow technology adopted by designers. Based

on the technology available and provable ness of the same, Driplex can provide both

dense phase and lean phase, as may be required to suit the customers' requirement.

The selection of the velocity and the requirement of volume for conveying is of

particularly important for a stabilized less maintenance of the system, as the

technology used by Driplex uses optimized solid velocity, hence abrasive and friable

materials can be conveyed without major erosion of pipeline/equipment or system

degradation.

CLIENTS

Power Sector:

Andhra Pradesh Power Generation Corp. Ltd.

Assam State Electricity Board

Bharat Heavy Electricals Ltd.

Chhatisgarh State Electiricity Board

Damodar Valley Corp. Ltd.

Essar Power Ltd.

Haryana Power Generation Corp. Ltd.

Karnataka Power Corp. Ltd.

Madhya Pradesh State Electricity Board

Neyveli Lignite Corporation Ltd.

National Thermal Power Corporation Ltd.

Punjab State Electricity Board

Rajasthan Rajya Vidyut Utpadan Nigam Ltd.

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Reliance Energy Ltd.

Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd.

West Bengal Power Distribution Corp. Ltd.

Maharastra Power Generation Company Limited

Infrastructure

Delhi State Industrial Development Corporation

Gujarat Urban Development Company Ltd.

Karnataka Urban Infrastructure Development & Finance Corporation

Rajasthan Urban Infrastructure Development Project

Jabalpur Municipal Corporation

Consultants

Black & Veatch, India

Development Consultants Pvt. Ltd.

Desein India Ltd.

Engineers India Ltd.

Fitchner Consulting Engineers, India

M.N. Dastur Co. Ltd.

Projects & Development India Ltd.

Tata Consultancy Engineers Ltd.

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Steel

Steel Authority of India Ltd.

Rashtriya Ispat Nigam Ltd.

Visakapatnam Ispat Nigam Ltd.

Rourkela Steel Plant

Petroleum & Natural Gas

Hindustan Petroleum Corp. Ltd.

Indian Oil Corporation Ltd.

Oil & Gas Commission

Essar Oil Ltd.

Bharat Oman Refinery (BPCL & Oman Refinery's JV)

Haldia Petrochemical Ltd.

Others

Bharat Aluminium Company Ltd.

Bharat Electronics Ltd.

Hindustan Paper Corporation Ltd.

ITC LTd.

National Aluminium Company Ltd.

Tata Projects Ltd.

Utkal Alumina Ltd. (HINDALCO GROUP)

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International Clients

Kawasaki Heavy Industries, Japan

Mitsubishi Heavy Industries, Japan

Power Machines, Russia

Technopromexport, Russia

InfrastructureDriplex has 3 manufacturing units situated in Greater Noida, which is approximately

50 km from New Delhi. These units have been carrying out equipment fabrication

work for the past 10 years. Some of the equipments, which are being manufactured at

these units, are:

Storage Tanks.

Low and High Pressure Piping.

Service Vessels for Condensate Polishing.

Skids mounted Reverse Osmosis, Ultra Filtration and chemicl handling

systems..

Clarifiers and other equipment for Pre Treatment Plants.

Pressure Vessels.

These equipments are made to suit the clients' requirement and are inspected by some

of the leading agencies in India, such as NTPC, BHEL, EIL, Bureau Veritas, Lloyds,

etc. Driplex has been mainly using Mild Steel and Stainless Steel to manufacture the

above mentioned equipments.

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In order to provide cost-effective for water treatment we have established various

strategically placed service station operation in rest of India. Technical back up

through multistage feed back system. This includes collection of data by resident

executive, processing of data at our R&D center and a comprehensive feed back to

our customers. A well-equipped R&D center is catering to all of our needs of products

& services.

Keeping pace with modern technology all set up is computerized which has helped

enormously in timely provision of backup for customers. We are in the process of

establishing a computerized programmed where solutions can be tailor made as per

need of our customers. We are working continuously to provide more solutions in the

field of water treatment. At Anodyne we are also in the process of formalizing

collaborations with leading water treatment companies around the globe.

The directors of the company are well-experienced technocrats in the field of

industrial application of chemical technology. We have a dedicated team of

professionals responsible for sale & services of our product & services.

1.3 STATEMENT ABOUT THE PROBLEM

The three primary functions that characterize the occupation are management,

coordination, and control of inventory and systems of inventory management.

Management of inventory records and relevant details is an important area of concern

for every organization, whether it is large or small. And also calls for efficient

planning and maintenance. Think of a situation when you have to look into various

registers to find and enter each and every minor mandatory detail. And the situation

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goes worse when you need to manage a number of such registers. Every register need

to be updated to make the records up to date. Obviously, managing number of such

records and registers manually sounds to be truly a laborious job and calls for efficient

and effective planning and implementation of effective skills to get the job done.

But what for, if not all but a maximum part of the job of management can be done

automatically with just the click of a button! Sounds a bit relieving and interesting,

isn’t it!! Here comes the concept of INVENTORY MANAGEMENT SYSTEM.

Whereas M/s Driplex Water Engineering Limited are yet to decide on and implement

the inventory management system and whereas if not all, most of the functions can be

automated, the present study is a humble attempt to understand the need for and

operational feasibility of the Inventory Management System at the M/s Driplex Water

Engineering Limited.

1.4 COMPETITORS

Anodyne water engineering.

New dawn water eng.

Elite water solution.

Flow well India.

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1.5 SWOT ANALYSIS

SWOT Analysis is mainly used to find out the specific areas in the company’s

operations which need more care and attention, by comparing them with that of the

competitor. Here S means Strengths of the company, W means Weaknesses of the

company, O means Opportunities and T means Threats to the company. Both

Strengths and Weaknesses are inherent with the company while Opportunities and

Threats are usually outside factors, which affect the existence of the company at large.

Let us make the SWOT Analysis for all the players mentioned so far, ie., Anodyne

water engineering, new dawn water eng. And driplex water eng. Together so that the

reader will get a comprehensive idea.

Strengths

Driplex water eng. Anodyne water eng. New dawn water eng.

The incomparable

supremacy in the number of

agents

Complete solution to

problems faced.

Total water and wastage

water management.

Portable water treatment

plant.

Complete and timely

provision of backup.

Experience in providing

chemicals to industrial

water.

The early bird advantage Supply of quality product. Diversified into the field of

effluent recycling.

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WeaknessesDriplex water eng. Anodyne water eng. New dawn water eng.

Spatial and temporal

distribution

Solid waste management. Pollution of water.

Storage insufficient to meet

demand.

Improper operation at the

time of crises.

No single algorithm

available to solve WR

problem

No single algorithm


problem

No single algorithm


problem

Opportunities


To operate the reservoirs

optimally


optimally


optimally

Use efficient and effective

inventory management

techniques.



techniques.



techniques.

simultaneous tracking and

documenting supplies





The Government policies

are offering more and more





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rebates. rebates. rebates.

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Threats


More and more companies

are coming into the field

and the existing ones have

to struggle hard to keep the

customers loyal and to get

more customers






more customers






more customers

Now as India is on the brim

of emerging out as an

economic power centre,

stringent laws can be

expected in the coming

future.






future.






future.

Large spatial and temporal

variations

.


variations


variations

Implementation of best

polices.


polices.


polices.

Demand is ever increasing Demand is ever increasing Demand is ever increasing

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CHAPTER – 2RESEARCH METHODOLOGY

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2.1 OBJECTIVES

The present study revolves around the following two broad objectives:

To make a need assessment of an inventory management system with respect to

the specific requirements of M/s Driplex Water Engineering Limited.

To study the utility and operational feasibility of Inventory Management System

in M/s Driplex Water Engineering Limited.

2.2 SCOPE OF STUDY

In order to provide cost-effective for water treatment we have established various

strategically placed service station operation in rest of India. Technical back up

through multistage feed back system. This includes collection of data by resident

executive, processing of data at our R&D center and a comprehensive feed back to

our customers. A well-equipped R&D center is catering to all of our needs of products

& services.

Keeping pace with modern technology all set up is computerized which has helped

enormously in timely provision of backup for customers. We are in the process of

establishing a computerized programmed where solutions can be tailor made as per

need of our customers. We are working continuously to provide more solutions in the

field of water treatment. At Anodyne we are also in the process of formalizing

collaborations with leading water treatment companies around the globe.

The directors of the company are well-experienced technocrats in the field of

industrial application of chemical technology. We have a dedicated team of

professionals responsible for sale & services of our product & services.

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2.3 MANAGERIAL USEFULNESS

Operational Feasibility

It is mainly related to human organizational and political aspects. The points to be

considered are-

What changes will be brought with the system?

What organizational structures are distributed?

What new skills will be required? Do existing staff members have these skills? If

not, can they be trained in due course of time?

It is going to add value to my knowledge.

Generally project will not be rejected simply because of operational infeasibility but

such considerations are likely to critically affect the nature and scope of the eventual

recommendations. This feasibility study is carried out by a small group of people who

are familiar with information system techniques, who understand the parts of the

business that are relevant to the project and are skilled in system analysis and design

process

At the feasibility stage it is desirable that two or three different configurations will be

pursued that satisfy the key technical requirements but which represent different

levels of ambitions and cost. Investigation of these technical alternatives can be aided

by approaching a range of suppliers for preliminary discussions. Out of all types of

feasibility, technical feasibility generally is the most difficult to determine. It may be

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hubmly submitted that the thesis shall be useful further research as well as for the

paint industry for understanding an effective inventory management system

2.4 METHODOLOGY

A Research Methodology defines the purpose of the research, how it proceeds, how to

measure progress and what constitute success with respect to the objectives

determined for carrying out the research study.

The appropriate research design formulated is detailed below.

Exploratory research: this kind of research has the primary objective of

development of insights into the problem. It studies the main area where the problem

lies and also tries to evaluate some appropriate courses of action.

The research methodology for the present study has been adopted to reflect these

realties and help reach the logical conclusion in an objective and scientific manner.

The present study contemplated an exploratory research.

DATA COLLECTION

Sources of data: 1) Primary Data which included the input received from

directly the officials and employees through questionnaire and

interview

2) Secondary data from the books, journals and internet etc.

Method of collecting data: Questionnaire schedule) & Interview method

Sample Size ------------------------------ 40

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(Company Officials inter alia includes Administrators, Executives and Market

Experts)

STATISTICAL TOOL USED

The data have been presented with the help of matrix table and bar diagrams.

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2.5 LIMITATIONS

Water and sewerage authorities face common problems in the need to repair, replace

and extend ageing or inadequate systems. There is no strong evidence that private

companies are any better than public ones at dealing with issues such as leakage,

pollution or drought. Privatized water companies dominate, suggests that private

companies are at least as likely to experience problems.

The dry conditions of 1995 resulted in widespread water shortages.

Leakage rates are high in many parts of the country.

Major pollution incidents in the UK are often actually caused by the actions of the

water companies. Companies are also responsible for allowing serious chemical or

bacterial pollution of their water supply.

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CHAPTER – 3CONCEPTUAL DISCRIPTION

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. 3.1 LITERATURE REVIEW

INVENTORY MANAGEMENT

Inventory Management System deals with the maintenance of equipments. Inventory

Management is a discipline that encompasses the principles, concepts and techniques

for determining what to order, when to order and how much to order. The right

amount of inventory involves the balance between what is required to service your

customers and what is financially practical.

Precise control and safeguarding of inventory is an essential task for a successful,

well-organized company; businesses require timely and accurate information on

inventory location, movement, and valuation. The Inventory Management module for

Sage MAS 90 and Sage MAS 200 ERP systems provides data pertaining to the receipt

of goods, the movement of goods within or between locations, the sale, removal, or

other disposition of goods, kitting capabilities, lot and serial tracking, and the precise

valuation and status of goods remaining in inventory at any point in time. When used

in conjunction with other Sage MAS 90 and 200 modules, Inventory Management is

the cornerstone of an effective manufacturing or distribution solution. Inaccurate

inventory counts can cost you sales and delay shipments past the promise date. Out-of

stock items as well as overstocked items in inventory can be devastating to your

business. Additionally, an overstated or understated inventory valuation can result in

incorrectly reported assets within your financial statements.

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top of inventory status. Generate reports on item pricing, stock status, detailed sales

history, backorder information, reorder points and recommendation, valuation,

turnover, sales analysis, and much more. And adding the Business Alerts module can

keep your staff on top of quantity changes to critical inventory items, to keep stocking

levels precisely where you want them. Properly used, the Inventory Management

module can help bring about the formulation of new or improved purchasing policies,

sales policies, pricing methods, and even enhanced customer service. Inventory

Management could also provide your company with an additional edge over

competitors who are unable to access the same strategic information.

FEATURES OF INVENTORY MANAGEMENT

Extended Pricing –

Equip your sales team to improve customer satisfaction and beat the competition

by creating flexible pricing options and rules for each customer. With extended

pricing you can:

Create standard price schemes such as percentage-off, value-off, and net pricing,

along with personalized pricing options.

Implement powerful date-sensitive functionality for sales and promotions.

Navigate the system using drill-down, zoom, and special menu capabilities that

offer a fast learning curve and easy visibility into your pricing index.

Bill of Materials -

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Increase productivity by providing a superior solution for tracking the components

and subassemblies used in light manufacturing and similar production and

assembly operations. With bill of materials you can:

Define the exact order of your assembly process, up to 10 levels deep.

Attach electronic notes to bills to detail exact component use at every assembly

level.

Track the actual cost for assembled items, plan for future changes, and manage

current and past items.

Schedule transactions into the future without reserving stock.

Cradle-to-Grave Serial/Lot Tracking -

Transform time-consuming searches into quick, efficient processes by identifying all

instances of an item with a single trace. With cradle-to- grave serial/lot tracking you

can:

Increase visibility into serial/lot number lifecycles.

Conduct powerful searches using an item’s serial or lot number.

Complete widespread searches across all transactions, including bills of materials

and customer orders.

Consolidate like lot numbers in all lot number entry windows to gain an accurate

view of inventory for a given lot number—including manufactured date and

expiration date—without juggling multiple records.

Instant Access to Transaction Information -

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Get instant information on all transactions related to any item you define in the

inquiry windows—including lot number, price levels, and item type—and drill down

as needed. Query originating documents, and then drill down for details about Field

Service, Project Accounting or Manufacturing documents.

Stock Count and Discrepancy Alerts –

Maintain an accurate stock count schedule and investigate stock discrepancies quickly

with system alerts that notify you when inventory is due for counting or when

differences occur between an item’s reported status and warehouse presence

CONTROLLING INVENTORY

Inventory management, or inventory control, is an attempt to balance inventory needs

and requirements with the need to minimize costs resulting from obtaining and

holding inventory. There are several schools of thought that view inventory and its

function differently. These will be addressed later, but first we present a foundation to

facilitate the reader's understanding of inventory and its function. Firms that carry

hundreds or even thousands of different part numbers can be faced with the

impossible task of monitoring the inventory levels of each part number. In order to

facilitate this, many firm's use an ABC approach. ABC analysis is based on Pareto

Analysis, also known as the "80/20" rule. The 80/20 comes from Pareto's finding that

20 percent of the populace possessed 80 percent of the wealth. From an inventory

perspective it can restated thusly: approximately 20 percent of all inventory items

represent 80 percent of inventory costs. Therefore, a firm can control 80 percent of its

inventory costs by monitoring and controlling 20 percent of its inventory. But, it has

to be the correct 20 percent.

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The top 20 percent of the firm's most costly items are termed "A" items (this should

approximately represent 80 percent of total inventory costs). Items that are extremely

inexpensive or have low demand are termed "C" items, with "B" items falling in

between A and C items. The percentages may vary with each firm, but B items

usually represent about 30 percent of the total inventory items and 15 percent of the

costs. C items generally constitute 50 percent of all inventory items but only around 5

percent of the costs.

By classifying each inventory item as an A, B or C the firm can determine the

resources (time, effort and money) to dedicate to each item. Usually this means that

the firm monitors A items very closely but can check on B and C items on a periodic

basis (for example, monthly for B items and quarterly for C items).

Another control method related to the ABC concept is cycle counting. Cycle counting

is used instead of the traditional "once-a-year" inventory count where firms shut down

for a short period of time and physically count all inventory assets in an attempt to

reconcile any possible discrepancies in their inventory records. When cycle counting

is used the firm is continually taking a physical count but not of total inventory. A

firm may physically count a certain section of the plant or warehouse, moving on to

other sections upon completion, until the entire facility is counted. Then the process

starts all over again. The firm may also choose to count all the A items, then the B

items, and finally the C items. Certainly, the counting frequency will vary with the

classification of each item. In other words, A item may be counted monthly, B items

quarterly, and C items yearly. In addition the required accuracy of inventory records

may vary according to classification, with items requiring the most accurate record

keeping.

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There are three types of costs that together constitute total inventory costs: holding

costs, set-up costs, and purchasing costs.

HOLDING COSTS.

Holding costs, also called carrying costs, are the costs that result from maintaining the

inventory. Inventory in excess of current demand frequently means that its holder

must provide a place for its storage when not in use. This could range from a small

storage area near the production line to a huge warehouse or distribution center. A

storage facility requires personnel to move the inventory when needed and to keep

track of what is stored and where it is stored. If the inventory is heavy or bulky,

forklifts may be necessary to move it around.

Storage facilities also require heating, cooling, lighting, and water. The firm must pay

taxes on the inventory, and opportunity costs occur from the lost use of the funds that

were spent on the inventory. Also, obsolescence, pilferage (theft), and shrinkage are

problems. All of these things add cost to holding or carrying inventory. If the firm can

determine the cost of holding one unit of inventory for one year (H) it can determine

its annual holding cost by multiplying the cost of holding one unit by the average

inventory held for a one-year period. Average inventory can be computed by dividing

the amount of goods that are ordered every time an order is placed (Q) by two. Thus,

average inventory is expressed as Q/2. Annual holding cost, then, can be expressed as

H(Q/2).

SET-UP COSTS.

Set-up costs are the costs incurred from getting a machine ready to produce the

desired good. In a manufacturing setting this would require the use of a skilled

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technician (a cost) who disassembles the tooling that is currently in use on the

machine. The disassembled tooling is then taken to a tool room or tool shop for

maintenance or possible repair (another cost). The technician then takes the currently

needed tooling from the tool room (where it has been maintained; another cost) and

brings it to the machine in question.

There the technician has to assemble the tooling on the machine in the manner

required for the good to be produced (this is known as a "set-up"). Then the technician

has to calibrate the machine and probably will run a number of parts, that will have to

be scrapped (a cost), in order to get the machine correctly calibrated and running. All

the while the machine has been idle and not producing any parts (opportunity cost).

As one can see, there is considerable cost involved in set-up. If the firm purchases the

part or raw material, then an order cost, rather than a set-up cost, is incurred. Ordering

costs include the purchasing agent's salary and travel/entertainment budget,

administrative and secretarial support, office space, copiers and office supplies, forms

and documents, long-distance telephone bills, and computer systems and support.

Also, some firms include the cost of shipping the purchased goods in the order cost.

If the firm can determine the cost of one set-up (S) or one order, it can determine its

annual setup/order cost by multiplying the cost of one set-up by the number of set-ups

made or orders placed annually. Suppose a firm has an annual demand (D) of 1,000

units. If the firm orders 100 units (Q) every time it places and order, the firm will

obviously place 10 orders per year (D/Q). Hence, annual set-up/order cost can be

expressed as S(D/Q).

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PURCHASING COST.

Purchasing cost is simply the cost of the purchased item itself. If the firm purchases a

part that goes into its finished product, the firm can determine its annual purchasing

cost by multiplying the cost of one purchased unit (P) by the number of finished

products demanded in a year (D). Hence, purchasing cost is expressed as PD.

Now total inventory cost can be expressed as:

Total = Holding cost + Set-up/Order cost + Purchasing cost or Total = H(Q/2) +

S(D/Q) + PD

If holding costs and set-up costs were plotted as lines on a graph, the point at which

they intersect (that is, the point at which they are equal) would indicate the lowest

total inventory cost. Therefore, if we want to minimize total inventory cost, every

time we place an order, we should order the quantity (Q) that corresponds to the point

where the two values are equal. If we set the two costs equal and solve for Q we get:

H(Q/2) = S(D/Q) Q = 2 DS/H

The quantity Q is known as the economic order quantity (EOQ). In order to minimize

total inventory cost, the firm will order Q every time it places an order. For example,

a firm with an annual demand of 12,000 units (at a purchase price of $25 each),

annual holding cost of $10 per unit and an order cost of $150 per order (with orders

placed once a month) could save $800 annually by utilizing the EOQ. First, we

determine the total costs without using the EOQ method:

Q = $10(1000/2) + $150(12,000/1000) + $25(12,000) = $306,800 Then we

calculate EOQ:

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EOQ = 2(12,000)($150)/$10= 600 And we calculate total costs at the EOQ of

600:

Q = $10(600/2) + $150(12,000/600) + $25(12,000) = $306,000 Finally, we

subtract the total cost of Q from Q to determine the savings:

There are a number of assumptions that must be made with the use of the EOQ.

These include:

Only one product is involved.

Deterministic demand (demand is known with certainty).

Constant demand (demand is stable through-out the year).

No quantity discounts.

Constant costs (no price increases or inflation).

While these assumptions would seem to make EOQ irrelevant for use in a realistic

situation, it is relevant for items that have independent demand. This means that the

demand for the item is not derived from the demand for something else (usually a

parent item for which the unit in question is a component). For example, the demand

for steering wheels would be derived from the demand for automobiles (dependent

demand) but the demand for purses is not derived from anything else; purses have

independent demand.

Recent industry reports show that inventory costs as a percent of total logistics costs

are increasing. Despite this rise, many organizations have not taken full advantage of

ways for lowering inventory costs. There are a number of proven strategies that will

provide payoff in the inventory area, both in client service and in financial

terms. Some of these strategies for lowering inventory costs involve having less

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inventory while others involve owning less of the inventory you have. Regardless of

which techniques you employ, proactive inventory management practices will make a

measurable difference in your operations.

.

In-Transit Inventory Transfers

Input a middle site into the transfer process to allow for via tracking to prevent

alespeople from selling material that isn’t currently in the destination warehouse.

Accurate inventory quantities at both from site and to site allow more realistic

promise dates and improve inventory management.

Increased Lot Flexibility

Notify employees when a lot is close to its expiration date, so they can determine the

best course of action.

Inventory Control preferences offer optional password protection, so your people can

control the selection of expired lots.

Detailed Insight into Inventory Usage -

More effectively analyze sales, transfers, and materials used for manufacturing by

drilling down to each transaction that reduces inventory, including those in debited

and credited accounts.

Access supply and demand information using Allocated and On Order drill downs

and view item allocations in existing orders quickly and easily.

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Narrow search results by providing date ranges for item transaction inquiries.

Inventory Management includes the integrated management and control of

assigned items of material. The work involves a number of processes such as:

Requirements Determination - Planning for and determining current and future

supply requirements to meet customer needs;

Material Distribution - Planning and determining the distribution and positioning of

supplies among major supply stations, stock points, or using activities;

Procurement Authorization - Preparing recommendations and directives for the

procurement of material, indicating the types of items, quantities, and at all times, the

sources; and

Funds Management - Analyzing planned or scheduled material requirements.

Benefits

Centralized inventory management consolidates inventory information by tracking lot

numbers, on-hand levels and expiration dates, making the re-ordering process more

efficient. Enables simultaneous tracking and documenting supplies during studies to

reduce redundant data entry and increase workflow efficiency. When multiple

officials are involved in a case, the statistical report accurately correlates the supplies

used with the correct user, eliminating mis-charges and appropriately tracking

resources. Provides stand-alone inventory management system for the institution with

the capacity to integrate with a hospital’s existing inventory system, significantly

reducing go-live times and improving departmental efficiency.

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Optional interface to institution’s/company’s material management system

significantly reduces ongoing inventory maintenance, and ensures accurate pricing

data for case cost reports and auto-decrements supply levels. Comprehensive

inventory reports help automate key administrative responsibilities, such as tracking

inventory item usage by vendor and physician, maintaining in-stock value of

consignment verses non-consignment items, and providing notification of items with

upcoming expirations.

Help reduce purchasing and inventory costs. Connect inventory control, purchasing,

and sales order processing with demand planning and help reduce costs, improve cash

flow, and help ensure that you have the right stock available when you need it. Gain

visibility into inventory processes. Effectively balance availability with demand and

track items and their possible expiration dates throughout the supply chain to help

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minimize on-hand inventory, optimize replenishment, and increase warehouse

efficiency. Improve customer satisfaction. Make more accurate order promises and

intelligent last-minute exceptions with access to up-to-date inventory information.

Respond quickly and knowledgably to customer queries for improved customer

service. Reduce time to market. With integrated order, inventory, and distribution

processes, as well as item tracking capabilities, your business can reduce manual data

entry and get your goods to market fast.

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TECHNIQUES AND SOFTWARE OF INVENTORY

MANAGEMENT

Inventory management is the active control program which allows the management of

sales, purchases and payments. Inventory Management and Inventory Control must be

designed to meet the dictates of the marketplace and support the company's strategic

plan. The many changes in market demand, new opportunities due to worldwide

marketing, global sourcing of materials, and new manufacturing technology, means

many companies need to change their Inventory Management approach and change

the process for Inventory Control. Despite the many changes that companies go

through, the basic principles of Inventory Management and Inventory Control remain

the same. Some of the new approaches and techniques are wrapped in new

terminology, but the underlying principles for accomplishing good Inventory

Management and Inventory activities have not changed.

The Inventory Management system and the Inventory Control Process provides

information to efficiently manage the flow of materials, effectively utilize people and

equipment, coordinate internal activities, and communicate with customers. Inventory

Management and the activities of Inventory Control do not make decisions or manage

operations; they provide the information to Managers who make more accurate and

timely decisions to manage their operations. The basic building blocks for the

Inventory Management system and Inventory Control activities are:

Sales Forecasting or Demand Management Sales and Operations Planning

Production Planning Material Requirements Planning Inventory Reduction


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information, inventory management software and tools. A complete Inventory

Management Control system contains the following components:

Inventory Management Definition

Inventory Management Terms

Inventory Management Purposes

Definition and Objectives for Inventory Management

Organizational Hierarchy of Inventory Management

Inventory Management Planning

Inventory Management Controls for Inventory

Determining Inventory Management Stock Levels

ORACLE INVENTORY MANAGEMENT

With Oracle® Inventory Management you can improve inventory visibility, reduce

inventory levels and control inventory operations. All of your material in each line of

business and stage of the inventory lifecycle can be tracked in a single system.

Increased transparency will reduce the need for local buffer stocks, and inventory will

be located where it previously wasn’t known to exist.

Improve Inventory Visibility

Oracle Inventory Management allows you to consolidate your disparate inventory

tracking and control systems into a single, global inventory management solution

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for material in every stage of the product lifecycle as well as for your different

business types.

Improve Inventory Visibility with End-to-End Inventory Lifecycle Support

Oracle Inventory Management supports efficiently determining whether you have the

inventory you need and where it is - whether it is in-transit, in receiving, in storage,

staged for shipping, or consigned to a customer. Inventory information may be

efficiently managed for a wide range of material including components, ingredients,

finished goods, spare parts, returns, scrap, and rotables. Multi-dimensional inquiries

support inventory analysis by location, product, lot, serial, or material status.

Consolidate Inventory Systems with Multi-Mode Inventory Support

Oracle Inventory Management eliminates the need to run different inventory systems

for your different business types. The requirements of a wide range of business

models are supported including those of distributors, discrete manufacturers,

engineer-to-order manufacturers, process manufacturers, and repair/maintenance

organizations. Your inventory visibility improves greatly when you don’t need

different inventory systems for each of these business types. Material Workbench

supports multi-dimensional analysis of inventory balances

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Reduce Inventory Levels

Oracle Inventory Management gives you a variety of tools to reduce your inventory

levels. The more accurate your inventory levels and efficient your replenishment, the

less safety stock you need to hold. Consigning material from suppliers allows you to

reduce the amount of inventory you need to own. All of these help you reduce your

inventory carrying cost and improve your bottom line. Reduce Inventory Levels with

Flexible Replenishment Management Multiple inventory replenishment methods

allow you to reduce your inventory carrying costs without compromising fill-rates and

customer satisfaction. Oracle Inventory Management will support your transformation

to a lean enterprise including support for pull-based replenishment using kanban

cards. Now you can use kanban replenishment in all of your facilities, not just your

manufacturing plants. Inventory levels may also be replenished using min-max and

re-order point planning. Replenishment counts and PAR replenishment counts allow

you to refill non-quantity tracked stock locations. Flexibly defined sourcing rules

determine whether the material will be purchased from a supplier, produced in

manufacturing, or transferred from another facility.

Reduce Owned Inventory with Supplier Consignment

Consigning inventory from suppliers allows your organization to defer the transfer of

ownership from shipment to use. You purchase only the inventory that you actually

need and reduce the time you carry the cost of the inventory. All aspects of your

consignment process are managed including maintaining consignment agreements on

the Approved Supplier List (ASL), co-mingling storage of consigned and owned

material, sending consumption advices or automatically paying under a self-billing

arrangement. Consumption of consigned material is efficiently managed through

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automatic consumption when issuing to manufacturing, selling to customers, or

transferring internally. Vendor Managed Inventory (VMI) replenishment is frequently

combined with consignment. Your suppliers can easily manage your replenishment by

viewing on-hand balance levels and consumption advices through Oracle iSupplier

Portal.

Increase Inventory Accuracy with Cycle Counting and Physical

Inventoryd

Regular inventory control counts increase your inventory accuracy. Higher inventory

accuracy improves fill-rates and reduces the amount of inventory you need to carry.

You can focus on counting the most important items more frequently through

classifying them based on a variety of criteria, such as value or usage. When

discrepancies are found between the system and the actual quantity, these

discrepancies are routed to supervisors for approval. Hit/miss and exact match KPIs

provide managers with better visibility to the inventory accuracy trends and issues. In

addition to periodic cycle counting capabilities, Oracle Inventory Management also

offers full physical inventory counting functionality for those organizations whose

auditors mandate full warehouse counts for reporting purpose

There are a number of other lot-sizing techniques available in addition to the facts

stated above. These include the fixed-order quantity, fixed-order-interval model, the

single-period model, and part-period balancing.

FIXED-ORDER-QUANTITY MODEL.

EOQ is an example of the fixed-order-quantity model since the same quantity is

ordered every time an order is placed. A firm might also use a fixed-order quantity

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when it is captive to packaging situations. If you were to walk into an office supply

store and ask to buy 22 paper clips, chances are you would walk out with 100 paper

clips. You were captive to the packaging requirements of paper clips, i.e., they come

100 to a box and you cannot purchase a partial box. It works the same way for other

purchasing situations. A supplier may package their goods in certain quantities so that

their customers must buy that quantity or a multiple of that quantity.

FIXED-ORDER-INTERVAL MODEL.

The fixed-order-interval model is used when orders have to be placed at fixed time

intervals such as weekly, biweekly, or monthly. The lot size is dependent upon how

much inventory is needed from the time of order until the next order must be placed

(order cycle). This system requires periodic checks of inventory levels and is used by

many retail firms such as drug stores and small grocery stores.

SINGLE-PERIOD MODEL.

The single-period model is used in ordering perishables, such as food and flowers,

and items with a limited life, such as newspapers. Unsold or unused goods are not

typically carried over from one period to another and there may even be some

disposal costs involved. This model tries to balance the cost of lost customer goodwill

and opportunity cost that is incurred from not having enough inventory, with the cost

of having excess inventory left at the end of a period.

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PART-PERIOD BALANCING.

Part-period balancing attempts to select the number of periods covered by the

inventory order that will make total carrying costs as close as possible to the

set-up/order cost. When a proper lot size has been determined, utilizing one of the

above techniques, the reorder point, or point at which an order should be placed, can

be determined by the rate of demand and the lead time. If safety stock is necessary it

would be added to the reorder point quantity.

Reorder point =Expected demand during lead time + Safety stock

Thus, an inventory item with a demand of 100 per month, a two-month lead time and

a desired safety stock of two weeks would have reorder point of 250. In other words,

an order would be placed whenever the inventory level for that good reached 250

units.

Reorder point = 100/month × 2 months + 2 weeks' safety stock = 250

OTHER SCHOOLS OF THOUGHT IN INVENTORY

MANAGEMENT

There are a number of techniques and philosophies that view inventory management

from different perspectives.

MRP AND MRP II.

MRP and MRP II are computer-based resource management systems designed for

items that have dependent demand. MRP and MRP II look at order quantities period

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by period and, as such, allow discrete ordering (ordering only what is currently

needed). In this way inventory levels can be kept at a very low level; a necessity for a

complex item with dependent demand.

JUST-IN-TIME (JIT).

Just-in-time (JIT) is a philosophy that advocates the lowest possible levels of

inventory. JIT espouses that firms need only keep inventory in the right quantity at the

right time with the right quality. The ideal lot size for JIT is one, even though one

hears the term "zero inventory" used.

THEORY OF CONSTRAINTS (TOC).

Theory of constraints (TOC) is a philosophy which emphasizes that all management

actions should center around the firm's constraints. While it agrees with JIT that

nventory should be at the lowest level possible in most instances, it advocates that

there be some buffer inventory around any capacity constraint (e.g., the slowest

machine) and before finished goods.

Lean Inventory Management

Lean is a philosophy of business that means doing things as simply and cheaply as

possible while providing superior quality and fast service. Overproduction or

verstocking leads to increased inventory and money sitting idle. Inventory means any

goods that are being held for any length of time, inside or outside the factory. In the

Lean system, inventory is regarded as a symptom of a sick factory.

Causes of Inventory

Acceptant of inventory as normal or as a necessary evil

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Poor equipment layout

Long changeover times

Large-lot production or purchasing

Obstructed flow of goods

Stocking on speculation

Defective material

An awareness revolution must occur in everyone if inventory is to be eliminated or

reduced. People must believe in the possibility of zero inventories; inventory covers

up problems; it never solves them. A Lean inventory management system allows a

distributor to meet or exceed customers’ expectations of product availability with the

amount of each item that will maximize the distributor’s net profits. In a Lean system,

inventory is regarded as a sign of a sick factory that is in desperate need of some type

of treatment. The ideal goal for a company should be to have an inventory as close to

zero as possible. Effective inventory management, allows a distributor to meet or beat

their customers’ expectations of product availability while maximizing their profits.

Develop an Approved Stock List

Every distributor makes a commitment to stock an inventory of approved stock for

each location. The commitment does not necessarily mean that some of the items are

always on the shelf but can be supplied in a few days. In most cases, some of the

material in inventory is not on the approved list and here are some ways it finds into a

warehouse shelf:

The customer orders 15 pieces and the buyer must make a minimum order of 30

pieces (15 go in inventory).

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Customer cancellation or return of some items.

A customer stops buying product especially stocked for them.

Left over quantities of discontinued products.

Left over stock items that were ordered on expected sales.

Inventory Replacement/Reordering

Lean inventory implies that in Just-In-Time system there should be little or no

inventory; an ideal situation (sell one, order a replacement). Stock should turn over at

least 4 times a year on special items and at least 12 times on stock items and no more

than one month’s stock be kept in inventory. Generally it is wise to keep a little extra

stock in inventory for unexpected conditions. Be sure to evaluate, for example a

suppliers’ discount of 2% for quantity purchases because it usually costs a company

as much as 3% to carry this inventory for one month.

Steps to Effective Inventory Management

There are two different approaches organizations can make with regard to inventory.

They can assume it is just a necessary evil and start a special inventory reduction

program whenever cash gets tight. Or they can make strategic decisions on the level

to carry, put an inventory management process in place to actively manage inventory

and continually improve the business results.

System Analysis

System Analysis refers into the process of examining a situation with the intent of

improving it through better procedures and methods. System Analysis is the process

of planning a new System to either replace or complement an existing system. But

before any planning is done the old system must be thoroughly understood and the

requirements determined. System Analysis is therefore, the process of gathering and

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interpreting facts, diagnosing problems and using the information to re-comment

improvements in the System. Or in other words, System Analysis means a detailed

explanation or description. Before computerized a system under consideration, it has

to be analyzed. We need to study how it functions currently, what are the problems,

and what are the requirements that the proposed system should meet.

System Analysis is conducted with the following objectives in mind:

Identify the customer’s need.

Evaluate the system concept for feasibility.

Perform economic and technical analysis.

Allocate functions to hardware, software people, database and other system

elements.

Establish cost and schedule constraints.

Create a system definition that forms the foundation for all the subsequent

engineering work.

Requirement Analysis/ SRS of the Component

Problem Definition

To provide the basic services related to the Supply of the material to maintain their

PRE-SO (Supply Order) and POST-SO details. The product will take care of all the

supply orders. Pre-So is maintained from the starting of the financial year. It is

concern to keep the records of each Supply Order, which is received, from firm,

supplying equipments. These equipments are then assigned a unique ISG Number

given by BRO, further they are supplied to different project departments of BRO. The

reference of Last Purchase Price (LPP) of the equipments corresponding to the ISG

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(Initial Stocking Guide) is maintain to form the transaction sheet of the particular

financial year.

Performance Requirements

The following performance characteristics should be taken care of while developing

the system:

User friendliness: The system should be easy to learn and understand so that

new user can also use the system effectively, without any difficulty.

User satisfaction: The system should meet user expectations.

Response time: The response time of all the operations should be low. This

can be made possible by careful programming.

Error handling: Response to user errors and the undesired situations should be

taken care of to ensure that the system operates without halting.

Safety: The system should be able to avoid or tackle catastrophic behavior.

Robustness: The system should recover from undesired events without

human intervention.

System Requirements

SOFTWARE REQUIREMENT

Visual Studio .Net 2003

SQL Server 2000

Windows 2000 Server edition

HARDWARE REQUIREMENT

Pentium III processor

256 MB RAM

20GB HARD DISK

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Acceptance Criteria:-

The following acceptance criteria were established for the evaluation of the new

system:

User friendliness:- The system should meet user needs and should be easy to

learn and use.

Modularity:- The system should have relatively independent and single

function parts .

Maintainability:- The system should be such that future maintenance and

enhancements times and efforts are reduced.

Timeliness:- The system should operate well under normal, peak and recovery

conditions.

The system developed should be accurate and hence reliable i.e. The error rate

should be minimized and the outputs should be consistent and correct.

Both the execution time and response time should be negligibly low.

The system should be efficient i.e. the resources utilization should be optimal.

The system should have scope to forsee modifications and enhancements i.e. it

should be able to cope with the changes in future technology.

FEASIBILITY STUDY

All projects are feasible given unlimited resources and infinite time. Unfortunately the

development of computer-based system in many cases is more likely to be plagued by

scarcity of resources and delivery date. Hence, we have made use the concept of

reusability that is what Object Oriented Programming (OOPS) is all about. The

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feasibility report of the project holds the advantages and flexibility of the project. This

is divided into three sections:

Economical Feasibility

Technical Feasibility

Behavioral Feasibility

Economic FeasibilityEconomic analysis is the most frequently used method for evaluating the effectiveness

of the candidate system. More commonly known as cost/benefit analysis, the

procedure is to be determining the benefits and savings that are expected from a

candidate and compare them with costs. If benefits outweigh costs, then the decision

is made to design and implement the system. A systems financial benefit must exceed

the cost of developing that system. i.e. a new system being developed should be a

good investment for the organization. Economic feasibility considers the following

The cost to conduct a full system investigation.

The cost of hardware and software for the class of application.

The benefits in the form of reduced cost or fewer costly errors.

The cost if nothing changes (i.e. the proposed system is not developed).

Technical Feasibility:

Technical feasibility centers around the existing computer system (Hardware and

Software etc) and to what extend it support the proposed addition. For example, if the

current computer is operating at 80 percent capacity - an arbitrary ceiling - then

running another application could overload the system or require additional

Hardware. This involves financial considerations to accommodate technical

enhancements. If the budgets is a serious constraint, then the project is judged not

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feasible. In this project, all the necessary cautions have been taken care to make it

technically feasible. Using a key the display of text/object is very fast. Also, the tools,

operating system and programming language used in this localization process is

compatible with the existing one.

Behavioral Feasibility:

People are inherently resistant to change, and computers have been known to facilitate

change. An estimate should be made of how strong a reaction the user staff is likely to

have toward the development of a computerized system. Therefore it is

understandable that the introduction of a candidate system requires special efforts to

educate and train the staff. The software that is being developed is user friendly and

easy to learn. In this way, the developed software is truly efficient and can work on

any circumstances, tradition, locales. Behavioral study strives on ensuring that the

equilibrium of the organization and status quo in the organization are nor disturbed

and changes are readily accepted by the users.

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System Design

Designing is the most important phase of software development. It requires a careful

planning and thinking on the part of the system designer. Designing software means

to plan how the various parts of the software are going to achieve the desired goal. It

should be done with utmost care because if the phase contains any error then that will

effect the performance of the system, as a result it may take more processing time,

more response time, extra coding workload etc.

Software design sits at the technical kernel of the software engineering process and is

applied regardless of the software process model that is used. After the software

requirements have been analyzed and specified, software design is the first of the

three technical activities Designing, Coding and Testing that are required to build and

verify the software. Each activity transforms information in such a manner that

ultimately results in validated computer software.

DESIGN GOALS

The following goals were kept in mind while designing the system:

Make system user-friendly. This was necessary so that system could be used

efficiently and system could act as catalyst in achieving objectives.

Make system compatible i.e. It should fit in the total integrated system. Future

maintenance and enhancement must be less.

Make the system compatible so that it could integrate other modules of system

into itself.

Make the system reliable, understandable and cost-effective.

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OPERATIONAL FEASIBILITY OF INVENTORY

MANAGEMENT

Why they should go for Inventory Management:

Tighten inventory management processes help to increase operational efficiency

across your business, improve customer service, and reduce inventory and distribution

costs with Inventory Management. Increased automation and item tracking

capabilities help you improve inventory accuracy and better match the goods you The

importance of working capital in any industry needs no special emphasis. Working

capital is considered to be life-giving force to an economic entity. Management of

working capital is one of the most important functions of corporate management.

Every organization, whether profit oriented or not, irrespective of its size and nature

of business, needs requisite amount of working capital. Capital to keep an entity

working is working capital. The efficient working capital management is the most

crucial factor in maintaining survival, liquidity, solvency and profitability of the

concerned business organisation. It needs sufficient finance to carry out purchase of

raw materials; payment of day-today operational expenses including salaries and

wages, repairs and maintenance expenses etc. and funds to meet these expenses are

collectively known as working capital.

To be more specific, neither under stocking nor overstocking of raw materials, careful

maintenance and trade off between credit receiving period from sundry creditors and

credit allowing period to sundry debtors (generally credit period from sundry creditors

should be more than credit period allowed to sundry debtors and the gulf between

these two periods is technically known as float of comfort), maintenance of requisite

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cash and bank balance including provision for contingency and planning both the

short term and long term investment in appropriate manner without allowing any

cash/bank balance to remain idle in the business are strictly required to be practiced

by management. Practice of judicious and effective system of working capital

management demands hire of yeomen service and expertise of hard-core finance

professionals. Keeping in view the pragmatic importance of working capital

management as a gray area of corporate finance function, an attempt has been made to

examine working capital management practices and the problems faced by the firms

in working capital management process particularly in heavy engineering industries.

Current liabilities in totality are more than gross capital and the excess of current

liabilities over current assets is negative net working capital. Debtors & receivables

and loans & advances represent 60% or more of gross working capital. Percentage of

inventory ranges from 22% to 37% of the gross working capital. From this

circumstance, we may infer that the firm is badly constrained to smoothly run the day-

to-day commercial operation. It may not be out of place to state that the company

simply cannot afford to hold 20 to 40% of gross working capital as inventory and

60% or more debtors & receivable and loans & advances when it is having negative

working capital. Besides, the firm's cash and bank balance comprises 5 to 11 % of

gross working capital and this is not at all a standard practice of a manufacturing firm

belonging to the category of heavy engineering industry. Moreover, the liquidity of

loans & advances and other current assets is a very doubtful case, as it remains more

or less static in the balance sheet through out the entire period of study. Under the

prevailing situation, the company should not lock up inventory to the extent of 40% or

more of gross working capital and Just- In- Time (JIT) Approach of Inventory

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Management is the sole answer to appropriate inventory control for the firm under

study. Major portion of current liabilities includes salaries and wages, sundry

creditors for raw materials, expenses & others, statutory liabilities towards retired

employees, short term loan from holding company, deposits from contractors,

advances on- account - billing against WIP and partial delivery of goods, advances

against orders etc. Components of provisions include dues towards gratuity payment;

leave encashment, cess & cess surcharges, contingency provisions etc.

Thus, there is hardly any scope to generate internal resource for working capital from

commercial operation of the firm. Simply speaking, there has been a vicious circle

like, it cannot generate sales due to lack of working capital and it has no working

capital due lack of sales! The overall business prospect is bleak and the company is

found to be in the state of financial perplexity without any means to break the

aforesaid vicious circle for effective working capital management.

Working Capital Ratios show the financial ability of the firm to meet its current

liabilities as well as its efficiency in managing currents assets for generation of sales.

It needs no mention that cash/bank balance is converted into raw materials, raw

materials is converted into work-in- progress, work-in-progress into finished goods,

finished goods is converted into debtors and receivables through credit sales and

finally debtors to cash/bank and this cash to cash phenomenon is technically known as

operating cycle and shorter the operating cycle, greater the degree of efficiency in

working capital management. The Current Ratio and Quick Ratio of Heavy

Engineering Company Limited reflect that short-term liquidity and solvency is in

danger and it of course doubtful how the short-term financial obligation of the firm

would be met under such unsound financial position. The combined interpretation of

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these two ratios reflects that the interest of short-term creditors is not at all protected

by inadequate solvency and liquidity of near money assets. On the basis of overall

analysis, it is therefore pertinent to state that the company has been suffering from

acute crises of working capital. Short- term liquidity and solvency of the firm is in

alarming position. Interest and financial security of the short-term creditors is at high

risk. Utilization of current assets should have been made in much more effective

manner. Under the prevailing circumstances, average inventory and debtors turnover

should have been in between 6 to 9 times if not 12 times. Current Assets consisting of

"Loans & Advances" and "Other Current Assets" are practically "non- performing

assets". Current Assets under these two Heads include escalation, residual and claim

for extra work, loans and advances to the subsidiary companies of the firm under

study and the subsidiaries of the firm under study have become chronically sick long

ago and they are just about to receive order of winding up from the appropriate

authority. It can thus be inferred that "Loans & Advances" and "Other Current Assets"

have hardly any role to contribute in sales/ business generation of the firm during the

period under study. Last but not the least, working capital is the blood and life-giving

force to the company and negative working capital cannot save the life of the firm in

any way.

Benefits that they are likely to derive:

Help reduce purchasing and inventory costs. Connect inventory control,

purchasing, and sales order processing with demand planning and help reduce

costs, improve cash flow, and help ensure that you have the right stock available

when you need it.

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Gain visibility into inventory processes. Effectively balance availability with

demand and track items and their possible expiration dates throughout the supply

chain to help minimize on-hand inventory, optimize replenishment, and increase

warehouse efficiency.

Improve customer satisfaction. Make more accurate order promises and

intelligent last-minute exceptions with access to up-to-date inventory information.

Respond quickly and knowledgably to customer queries for improved customer

service.

Reduce time to market. With integrated order, inventory, and distribution

processes, as well as item tracking capabilities, your business can reduce manual

data entry and get your goods to market fast.

Maintain and Recall Product using Product Genealogy and Traceability.

Efficient and accurate product genealogy and traceability is important for

companies to mitigate the risk and exposure in product recall situations, in

addition to satisfying the basic controls required by regulators. Oracle Inventory

Management if applied can capture and maintain in a multi-level composition

history which component lots and/or serials were used in each lot or serial-

controlled end product, from supplier receipt through production and customer

shipment. If you identify a quality issue with a specific component lot, you can

efficiently identify the location of all of the end product in which that component

was used

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CHAPTER – 4DATA ANALYSIS

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DATA ANALYSIS

1. Are you aware about Inventory Management

System?

i. Yes ------------------------------------------ 75 per cent

ii. No ------------------------------------------- 17 per cent

iii. Do not know/ Can not say ---------------- 08 per cent

Interpretation:

The awareness level among the company officials regarding the existence,

functioning and applicability of inventory management system is high that is 75 per

cent, as per the result of the study.

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2. Do you know that your company should have an

inventory management system?

(i) Yes ---------------------------------------------- 72 per cent

(ii) No ------------------------------------------------ 20 per cent

(iii) Do not know/ Can not say -------------------- 08 per cent

Interpretation:

The company officials are aware about their company should have an inventory

management system. 72 per cent of the respondents do have this awareness as against

20 per cent+08 per cent of the respondents who are either not aware or not able to

provide any information in this regard.

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3. Do you agree that there should be an inventory

management system in place in any organisation / company?

(i) Agree ------------------------------------------------ 68 per cent

(ii) Disagree --------------------------------------------- 12 per cent

(iii) Do not know/ Can not say ------------------------- 20 per cent

Interpretation:

According to the response to the above question, it appears that every

company/organisation should have a system or mechanism in place for managing

their inventory.

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4. For what reasons do you feel that there should be an

inventory management system?

(i) To smoothen operational requirement --------------------- 27 per cent

(ii) To save time ---------------------------------------------------- 22 per cent

(iii) To maintain accountability and transparency ----------------30 per cent

(iv)Other reasons --------------------------------------------------- 15 per cent

(v) Do not know/ Can not say ------------------------------------ 06 per cent

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Interpretation:

To everyone’s surprise, 30 per cent of the respondents feel that it is for accountability

and transparency purpose that inventory records are maintained and hence the need

for an inventory management system. This is followed by the need for saving time

and the requirement of operational smoothness.

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5. Do you agree that the inventory management system

in your company can fulfill the needs for which it needs to be evolved?

(i) Strongly Agree ------------------------------------ 20 per cent

(ii) Agree ----------------------------------------------- 47 per cent

(iii) Disagree -------------------------------------------- 15 per cent

(iv) Strongly Disagree --------------------------------- 07 per cent

(v) Do not know/ Can not say ----------------------- 11 per cent

Interpretation: From the above response, it appears that the inventory management system needs to

be more or less oriented to achieve its objectives for which it is sought after. This is

evident from the 67 per cent of the respondents’ opinion who have either agreed or

strongly agreed in favour of this proposition. However the response of 22 per cent of

the respondents who think otherwise also speaks something.

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6. What according to you will be the major benefit of

going for an inventory management system by your company?

(i) It can make storage and retrieval of material easier -------- 37 per cent

(ii) Can improve Sales Effectiveness ----------------------------- 26 per cent

(iii) Can Reduced Operational Cost -------------------------------- 18 per cent

(iv) Other Benefits --------------------------------------------------- 10 per cent

(v) Do not know/ Can not say -------------------------------------- 09 per cent

Interpretation: As regards the benefits of having an inventory management system by the company,

the respondents are of the opinion that the major benefit lies in relaxation in terms of

storage and retrieval of material. This is followed by increasing sales effectiveness

and reduction in operational cost. However, all these benefits are interlinked and the

separation between them is more analytical than anything else.

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7. Do you think you have skiled professionals in your

company for inventory management?

(i) Yes ----------------------------------------------- 48 per cent

(ii) No ------------------------------------------------ 30 per cent

(iii) Do not know/ Can not say -------------------- 22 per cent

Interpretation:

Recruitment of skilled professionals well versed with latest inventory management

technology, particularly in engineering industry is a concern for the company as it

appears that it lacks in this domain.

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8. What category of professionals do you need to

manage your company inventory?

(i) Skilled and trained --------------------------------- 32 per cent

(ii) Only skilled but not trained ----------------------- 16 per cent

(iii) Non skilled but trained professionals ------------ 20 per cent

(iv) Non skilled and non trained professionals ------- 25 per cent

(v) Others ------------------------------------------------- 07 per cent

Interpretation:

As already stated above in the earlier question, availability of trained and skilled

professionals for inventory management needs serious attention of the company

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9. Do you agree that your company should give more

emphasis on software than skilled manpower with regard to inventory

management?

(i) Strongly Agree

-------------------------------------- 18 per cent

(ii) Agree

------------------------------------------------- 52 per cent

(iii) Disagree

---------------------------------------------- 15 per cent

(iv) Strongly Disagree

----------------------------------- 07 per cent

(v) Do not know/ Can not say

-------------------------- 08 per cent

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Interpretation:

The above response gives an impression that the company should put greater

emphasis on software than skilled manpower for inventory details management.

10. Do you think that your company can provide

software according to the design and needs of the system?

(i) Yes

-------------------------------------------------- 86 per cent

(ii) No

---------------------------------------------------- 10 per cent

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(iii) Do not know/ Can not say

------------------------- 04 per cent

Interpretation:

The company appears to be in a position to provide the software according to the

system requirement and design and according to the customers’ needs.

11. What is the prime challenge before your company

with regard to inventory management?

(i) Lack of trained professionals

------------------------------ 42 per cent

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(ii) Maintenance cost

-------------------------------------------- 21 per cent

(iii) Changing requirements of customers

--------------------- 27 per cent

(iv) Other problems

----------------------------------------------- 06 per cent

(v) Do not know/ Can not say

---------------------------------- 04 per cent

Interpretation:

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Lack of availability of trained professionals coupled with maintenance cost and

changing needs of the customers are perceived to be the inventory challenges before

the company.

12. Do you agree that it is operationally feasible to have

an inventory management system at the Driplex Water Engineering

Limited?

(i) Agree ----------------------------------------------- 57 per cent

(ii) Strongly Agree ------------------------------------ 34 per cent

(iii) Disagree -------------------------------------------- 07 per cent

(iv) Strongly Disagree --------------------------------- 01 per cent

(v) Do not know/ Can not say ----------------------- 01 per cent

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Interpretation:

From the above response, it appears that to set up an inventory management system at

the Driplex Water Engineering Limited is operationally feasible.

13. What future do you foresee for the inventory

management system in your company?

(i) Can be as a successful mechanism

--------------------- 43 per cent

(ii) Depends on changing time

------------------------------ 33 per cent

(iii) Shall collapse

----------------------------------------------12 per cent

(iv) Do not know/ Can not say

-------------------------------12 per cent

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Interpretation:

The future of inventory management system at Driplex Water Engineering Limited, if

set up, appears to pretty good, going by the response of our study.

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CHAPTER – 5CONCLUSION & SUGGESTION

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CONCLUSION AND SUGGESTIONS

Inventory is a quantity or store of goods that is held for some purpose or use (the term

may also be used as a verb, meaning to take inventory or to count all goods held in

inventory). Inaccurate inventory counts can cost you sales and delay shipments past

the promise date. Out-of stock items as well as overstocked items in inventory can be

devastating to your business. Additionally, an overstated or understated inventory

valuation can result in incorrectly reported assets within your financial statements.


top of inventory status. Centralized inventory management consolidates inventory

information by tracking lot numbers, on-hand levels and expiration dates, making the

re-ordering process more efficient. It also enables simultaneous tracking and

documenting supplies during studies to reduce redundant data entry and increase

workflow efficiency.






information, inventory management software and tools.

SUGGESTIONS

utilization of increasingly sophisticated electronic data processing systems as

integral parts of material control, record, and data communications systems;

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use of scientific or business type decision rules and formulas to make material

control decisions that optimally balance cost and material support effectiveness;

Development and implementation of various material standardization programs;

planning and coordinating material actions to assure properly phased support to

major items of equipment and/or weapon systems in test phases, in production, in

service, and during phaseout periods; and

monitoring the quality of input and output of automated inventory management

systems and recommending system and programming changes to improve

timeliness, accuracy, and utility of inventory information for users.

Inventory Control includes performing one or more of a wide variety of staff or

administrative functions such as:

Initiating, developing, installing, or administering a control program. Providing

guidance on or conducting surveys of supply and inventory management

functions.

Analyzing, evaluating, revising, or developing new inventory management

systems.

Developing long-range material support plans.

Directing, guiding, or reviewing material support programs, functions, and actions

implemented by others; and/or Performing quality assurance and review functions.

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Inventory specialists satisfy these responsibilities by: Controlling and authorizing

funding for material so that the proper kind, quality, and quantity are available at

the correct time and place.

Maintaining records and controls over material in stock, due in, or planned for the

distribution system on a quantitative and monetary basis; and Controlling the

distribution or redistribution of stock within the supply system. Inventory

management work is classified in this series when duties and responsibilities

demonstrate that the preponderance of the work requires performing most of the

preceding functions and, at least three of the following:

Managing items with difficult supply and demand patterns related to seasonal

factors, program changes, changes in end-use applications, and similar elements;

Making supply system decisions which consider more than the status of an individual

item or the problem presented by a particular supply transaction, e.g.,

interchangeability of items among different equipment or systems; Exercising

substantially independent authority to establish and revise reorder frequencies;

establish stock levels for individual items on a selective basis; and manage assigned

items in such a manner as to achieve effective supply support while remaining within

authorized or available funds; Programming requirements for assigned items,

including phasing procurements and deliveries and determining best use of funds

saved through judicious management;

Reviewing planned work programs, schedules, and other planning data. Advising

others regarding major categories of material which will be needed and pointing out

material areas most likely to cause difficulties; Planning and coordinating material

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support for assigned program or project areas including extensive provisioning

conferences and personal contacts to negotiate stock levels, phased production,

changes in work schedules, or other means of alleviating material problems;

Serving as a central point of contact and exchange of information for personnel of

supply, production, maintenance, and other organizations relative to material support

problems affecting an assigned program or project area; Recommending changes in

automated data bases and systems of data storage, formats, and reports; and/or

Participating in planning for new data processing systems in terms of defining the

nature of information required, organizational responsibilities, computer network

requirements, and the nature of output desired from inventory management systems.

APPENDIX

Questionnaire

1. Are you aware about Inventory Management System?

(i) Yes ------------------------------------------

(ii) No -------------------------------------------

(iii) Do not know/ Can not say ----------------

2. Do you know that your company should have an inventory management

system?

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(i) Yes ----------------------------------------------

(ii) No ------------------------------------------------

(iii) Do not know/ Can not say --------------------

3. Do you agree that there should be an inventory management system in place

in any organisation / company?

(i) Agree ------------------------------------------------

(ii) Disagree ---------------------------------------------

(iii) Do not know/ Can not say -------------------------

4. For what reasons do you feel that there should be an inventory management

system?

(i) To smoothen operational requirement ---------------------

(ii) To save time ---------------------------------------------------

(iii) To maintain accountability and transparency -------------

(iv)Other reasons ---------------------------------------------------

(v) Do not know/ Can not say ------------------------------------

5. Do you agree that the inventory management system in your company can

fulfill the needs for which it needs to be evolved?

(i) Strongly Agree ------------------------------------

(ii) Agree -----------------------------------------------

(iii) Disagree --------------------------------------------

(iv)Strongly Disagree ---------------------------------

(v) Do not know/ Can not say -----------------------

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6. What according to you will be the major benefit of going for an inventory

management system by your company?

(i) It can make storage and retrieval of material easier --------

(ii) Can improve Sales Effectiveness -----------------------------

(iii) Can Reduced Operational Cost --------------------------------

(iv)Other Benefits ---------------------------------------------------

(v) Do not know/ Can not say --------------------------------------

7. Do you think you have skiled professionals in your company for inventory

management?

(i) Yes -----------------------------------------------

(ii) No ------------------------------------------------

(iii) Do not know/ Can not say --------------------

8. What category of professionals do you need to manage your company

inventory?

(i) Skilled and trained ---------------------------------

(ii) Only skilled but not trained -----------------------

(iii) Non skilled but trained professionals ------------

(iv)Non skilled and non trained professionals -------

(v) Others -------------------------------------------------

9. Do you agree that your company should give more emphasis on software

than skilled manpower with regard to inventory management?

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(i) Strongly Agree --------------------------------------

(ii) Agree -------------------------------------------------

(iii) Disagree ----------------------------------------------

(iv)Strongly Disagree -----------------------------------

(v) Do not know/ Can not say --------------------------

10. Do you think that your company can provide software according to the

design and needs of the system?

(i) Yes --------------------------------------------------

(ii) No ----------------------------------------------------

(iii) Do not know/ Can not say -------------------------

11. What is the prime challenge before your company with regard to inventory

management?

(i) Lack of trained professionals ------------------------------

(ii) Maintenance cost --------------------------------------------

(iii) Changing requirements of customers ---------------------

(iv)Other problems -----------------------------------------------

(v) Do not know/ Can not say ----------------------------------

12. Do you agree that it is operationally feasible to have an inventory

management system at the Driplex Water Engineering Limited?

(i) Agree -----------------------------------------------

102

I

(ii) Strongly Agree ------------------------------------

(iii) Disagree --------------------------------------------

(iv)Strongly Disagree ---------------------------------

(v) Do not know/ Can not say -----------------------

14. What future do you foresee for the inventory management system in your

company?

(i) Can be as a successful mechanism

---------------------

(ii) Depends on changing time

------------------------------

(iii) Shall collapse

----------------------------------------------

(iv) Do not know/ Can not say

-------------------------------

103

I

BOOKS

(i) Biederman, David. "Reversing Inventory Management." Traffic World (12

December 2004): 1.

(ii) Stevenson, William J. Production Operations Management. Boston, MA:

Irwin/McGraw-Hill, 2005.

(iii) Sucky, Eric. "Inventory Management in Supply Chains: A Bargaining

Problem." International Journal of Production Economics “Microsoft

Learning Vb.Net ”

(iv) “Teach Yourself VB.NET in 21 Days”- Sams Pearson Education [Lowell

Mauer]“Professional ASP.NET 2.0” –Wrox Evajen, Hanselma, Muhammad,

Sivakumar, Rader]

(v) “ASP.NET 2.0 Uleashed”-Sams Pearson Education [Stephen Walther]

(vi) “Software Engineering” [Pankaj Jalote]

(vii) “Software Engineering” [K.K. Aggarwal & Yogesh Sighn]

(viii) Beard, L. and Butler, S. A. (2000). Introducing JIT manufacturing:

it’s easier than you think. Business Horizons, 43, 61-64.

104

Inventory Management -- Driplex Water Eng. Thesis 127p

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