7/30/2019 GNFC&ABC

1/17

Rakesh PanchalBhadra MehtaVinay Savani

Aamir Mansuri

Prepaid By :

7/30/2019 GNFC&ABC

2/17

Inventory management

Meet demand

Keep operation running

Quality discount

Safety/buffer stock

7/30/2019 GNFC&ABC

3/17

About companies

Gujarat Narmada Valley Fertilizers Limited (GNFC) is

an Indian manufacturer of fertilizer. GNFC was founded in 1976 and it is

listed on Mumbai Stock Exchange. The company was jointly promotedby the Government of Gujarat. It was set up in Bharuch Gujarat.

ABC Bearings Limited, is an Indian manufacturer of bearing. ABC

was founded in 1961 and it is listed on Mumbai Stock Exchange. ABCs

Joint Venture company NSK.

7/30/2019 GNFC&ABC

4/17

Type of inventory

GNFC LTD ABC Bearings LTD

Mechanical Mechanical

Electrical Electrical

Catalyst & chemical spares Instrumental

Instrumentation Automotive

Other miscellaneous

7/30/2019 GNFC&ABC

5/17

Inventory management Techniques

GNFC LTD ABC Bearings LTD

ABC Classification ABC Classification

E.O.Q E.O.Q

FSN Classification FSN Classification

HML Classification

Zero Inventories

7/30/2019 GNFC&ABC

6/17

GNFC LTD. [ ABC classification ]

Class A Class B Class C Class

Items value 70% 20% 10%

Number of items 10% 20% 70%

Items value

A Class

B Class

C Class

7/30/2019 GNFC&ABC

7/17

GNFC LTD [ FSN Analysis ]

Fast Moving Items: GNFC Ltd has norms that fast moving items have the following:

It should have more than 7 issue transactions in a year.There should be multi user.

Slow Moving Items: GNFC Ltd has norms that slow moving items have the following;

Items should have transaction between 3 to 7 time in a year There should be multi user.

Non Moving Items: GNFC Ltd has norms that are non moving items have the following:

Items have no issue transaction for last 4 years

Items should have some quantity available in all the past three years.

7/30/2019 GNFC&ABC

8/17

GNFC ltd [ HML Analysis ]

As per the company rules:

The items having value greater than or equal to Rs. 1,00,000 areclassified as high value Items.The items having individual value greater than or equal to Rs. 25,000and below Rs. 1,00,000 is considered to be medium value items.If the value is less than Rs. 25,000 then it is low value items.HML analysis value is done for electrical items, instrumentations andother items.

7/30/2019 GNFC&ABC

9/17

GNFC Ltd [ Zero inventories ]

GNFC Ltd is continuously maintaining the zeroinventories of Raw Material like oil and gas. This is

possible because the company has contracted withsuch suppliers to provide the material on demand ontime

7/30/2019 GNFC&ABC

10/17

ABC Bearings LTD[ ABC Classification ]

Items value A classB classC class

Class A Class B Class C Class

Items value 60% 30% 10%

Number of items 10% 30% 60%

7/30/2019 GNFC&ABC

11/17

ABC Bearing ltd [FSN Analysis]

Fast Moving Items: ABC Ltd has norms that fast moving items have the following:

It should have more than 5 issue transactions in a year.There should be multi user.

Slow Moving Items: ABC Ltd has norms that slow moving items have the following;

Items should have transaction between 1 to 5 time in a year

There should be multi user.

Non Moving Items: ABC Ltd has norms that are non moving items have the following:

Items have no issue transaction for last 3 years

Items should have some quantity available in all the past three years.

7/30/2019 GNFC&ABC

12/17

GNFC/ABC BARRING[INVENTORY LEVEL]

Minimum Level

Maximum Stock Level

Re-order Stock Level

7/30/2019 GNFC&ABC

13/17

COST ARE INCURRED IN CONTEXTOF INVENTORY MANAGMENT

FOR GNFCStorageChemical (some chemical has expiry date )Store manpower

FOR ABCStorageStore manpower Metal corrosion

7/30/2019 GNFC&ABC

14/17

GNFC / ABC bearings - Recordinventory

Using SAP system

7/30/2019 GNFC&ABC

15/17

Purchase process of inventory

GNFC Ltd:

STEP - 1: REQURIEMTNT OF INVENTORYSTEP - 2: VENDOR REGISTATION

STEP - 3: NEGOCIATION WITH VENDORSTEP - 4: CREATE PURCHASE ORDER

ABC Ltd:

STEP - 1: REQURIMENT OF INVENTORYSTEP - 2: CALL TO ELECTED SUPPLIERSSTEP - 3: NEGOCIATION WITH SUPPLIERSSTEP - 4: CREATE PURCHASE ORDER

7/30/2019 GNFC&ABC

16/17

GNFC / ABC bearings PAYMENT

SYSTEM

AFTER RECEIVING INVENTORY, THEY WILL PAYWITHING 30 DAYS

7/30/2019 GNFC&ABC

17/17