UTILITY AND OPERATIONAL FEASIBILITY OF INVENTORY MANAGEMENT
SYSTEM WITH SPECIFIC REFERENCE TO M/s DRIPLEX WATER ENGINEERING
LIMITED
I
A Project Report
On
inventory 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 2010Submitted by: Under Guidance of:
SONIA MAKKAR
MR. R.K MEHTA Bharati Vidyapeeth University, School of Distance
Education,Academic Study Center: BVIMR, New Delhi
2008 2010
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
CERTIFICATEThis 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
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)
ACKNOWLEDGEMENTI 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.PREFACEInventory 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.TABLE OF CONTENTS
CHAPTER 1INTRODUCTION
10
1.1overview of industry
11
1.2profile of organization
1.3statement about problem
31
1.4competitors
32
1.5swot analysis
33CHAPTER 2RESEARCH METHODOLOGY
37
2.1objectives
38
2.2scope of study
38
2.3managerial usefulness
39
2.4methodology
40
2.5limitations
42
CHAPTER 3CONCEPTUAL DISCRIPTION
3.1literature review
44CHAPTER 4DATA ANALYSIS
79CHAPTER 5CONCLUSION & SUGGESTIONS
REFERENCES Questionnaire
98
Books
103
CHAPTER 1
INTRODUCTION
INTRODUCTION
1.1 OVERVIEW OF INDUSTRYWHAT 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 factorsfrom the
viewpoints of purchasing, manufacturing, sales and financedoes 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 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).
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. Youll 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 theyre always available to sell. When tracking an
order, you will be able to access detailed descriptions for each
item. Youll know at a glance the items in use, committed, and on
order. Youll even be able to recommend alternative item
options.
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 centerInventory 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.
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 managementDriplex 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.
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.
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
PlantThe 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 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.
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 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
Cation-AnionPolishing Mixed BedCation-AnionCounter-Current
RegenerationCation-AnionCo-Current Regeneration*
Conductivity0.1 S/cm at 25C0.5 to 1.0 S/cm at 25C5 to 30 S/cm at
25 C
Sodium0.01 mg/l0.05 to 0.1 mg/l0.5 to 3 mg/l
Reactive silica0.01 mg/l0.025 mg/l0.1 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 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 industriesDemineralization 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 feedwaterRemoval of organic matter as
preliminary stage of ion-exchange plants
Demineralization and decolourisation of pretreated effluents for
recyclingConcentration of effluents for the removal of harmful
matter
Concentration of watery solutions in the chemical,
pharmaceutical and food industryRecovery of metals from
concentrated solutions
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.
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.
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
TreatmentThe 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.
Coal Handling Plant & Coal Storage Effluent
TreatmentEffluent 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 SystemSludge 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.
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.
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.
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)
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.
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 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, isnt 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.
1.5 SWOT ANALYSISSWOT Analysis is mainly used to find out the
specific areas in the companys 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 agentsComplete
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 advantageSupply of quality product.Diversified
into the field of effluent recycling.
Weaknesses
Driplex 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 problemNo single
algorithm available to solve WR problemNo single algorithm
available to solve WR problem
Opportunities
Driplex water eng.Anodyne water eng.New dawn water eng.
To operate the reservoirs optimally
To operate the reservoirs optimally
To operate the reservoirs optimally
Use efficient and effective inventory management techniques.Use
efficient and effective inventory management techniques.Use
efficient and effective inventory management techniques.
simultaneous tracking and documenting suppliessimultaneous
tracking and documenting suppliessimultaneous tracking and
documenting supplies
The Government policies are offering more and more rebates. The
Government policies are offering more and more rebates. The
Government policies are offering more and more rebates.
Threats
Driplex water eng.Anodyne water eng.New dawn water eng.
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 customersMore 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 customersMore 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
Now as India is on the brim of emerging out as an economic power
centre, stringent laws can be expected in the coming future.Now as
India is on the brim of emerging out as an economic power centre,
stringent laws can be expected in the coming future.Now as India is
on the brim of emerging out as an economic power centre, stringent
laws can be expected in the coming future.
Large spatial and temporal variations
.Large spatial and temporal variations
Large spatial and temporal variations
Implementation of best polices.Implementation of best
polices.Implementation of best polices.
Demand is ever increasing
Demand is ever increasing
Demand is ever increasing
CHAPTER 2RESEARCH METHODOLOGY2.1 OBJECTIVESThe 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 STUDYIn 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.
2.3 MANAGERIAL USEFULNESSOperational 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 hubmly
submitted that the thesis shall be useful further research as well
as for the paint industry for understanding an effective inventory
management system2.4 METHODOLOGYA 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
(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.
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.
CHAPTER 3
CONCEPTUAL DISCRIPTION. 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.
Inventory Management offers comprehensive reporting capabilities
to keep you on 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 -
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 items 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 numberincluding
manufactured date and expiration datewithout juggling multiple
records.
Instant Access to Transaction Information -
Get instant information on all transactions related to any item
you define in the inquiry windowsincluding lot number, price
levels, and item typeand 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
items 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.
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.
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 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).
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: 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 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 isnt
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.
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 hospitals
existing inventory system, significantly reducing go-live times and
improving departmental efficiency.
Optional interface to institutions/companys 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 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.
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 ManagementSales and Operations
PlanningProduction PlanningMaterial Requirements PlanningInventory
Reduction 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. 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 wasnt
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 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 dont need different inventory systems for
each of these business types. Material Workbench supports
multi-dimensional analysis of inventory balances
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 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 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.
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
MANAGEMENTThere 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 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
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 distributors 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).
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 months 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 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 customers 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 (Initial Stocking Guide) is maintain to form the transaction
sheet of the particular financial year.
Performance RequirementsThe 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
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 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 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.
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.
OPERATIONAL FEASIBILITY OF INVENTORY MANAGEMENTWhy 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-to- day 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 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 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
Heav