INVENTORY MANAGEMENT IN PRACTISE: Inventory management in Dulux paints:Inventory is most important and most critical part of supply chain management.As we know there are 3 types of inventory via Raw material, work in progress andfinished good. To explain inventory management in detail we visited ICI (Dulux) paintsto study its inventory management. ICI paints India has 5 plants all over Indiamanufacturing 2 types of paints via water based and solvent based. The company has 1centralized office which takes decision for all the 5 plants like vendor selection, totaldemand forecasting, total output for each plant, etc. Its Koperkhairane plantmanufacture only water based paint which is used to paint our houses. The companyhas installed SAP program which helps the management of the company to plan itsproduction. The plant manufactures base color (i.e.) white color and also manufacturestwo more color i.e. Red and Yellow. Various colors what we get in market is done bydealers. Dealers have tinting machine from which they can come up with various colors.The water based paints require 150 various types of raw material some inpowder form and some in liquid form. To get all the raw materials in time, company hasmaintained a good relationship with 28 vendors. Since the total production planning isdone monthly, it is already decided what will be the daily output. Centre head officedecides the monthly output and the plant divides the total monthly output by 30 to getdaily output. According to daily output plan the optimal raw material is ordered. Special26raw material which needs to be imported is ordered in bulk and kept in warehousewhere as other raw materials are ordered regularly or once in 2 days depending on therequirement. Just in time management is practiced in case of raw material inventory.Delivery of raw material is done by vendors and vendors cost. Packing is done in plant itself but packaging material is outsourced. Packaging material is delivered regularly bythe vendors. Safety stock is always maintained by the company so that productiondoesn’t stop at any time. After installing SAP and planning strategies to reduceinventory company has managed to reduce the inventory from 28 days to 13 days.Total time required to manufacture varies between 7-24hrs depending on thetype of goods. At one particular time only one size of product is manufactured. Currentlycompany has 150 kl Work In Progress (WIP). Company has capacity of 200kl WIP.Since demand for paints in Indian market is very seasonal, company has to keephuge finished goods inventory to satisfy festive season demand at the same timecompany has to keep same production level trough out the year. Keeping hugeinventory will increase the cost of final product, therefore company keep all finishedgood inventory in its own warehouse. Company has a great distribution channel with180 Depos all over India. All Depos have storage capacity to maintain supply andsatisfy the demand. On an average thane plant keeps 3 crore finished goods inventory.Finished goods are transported to depots. Transport is outsourced and paid on per kmper kl basis. 60 days credit period is given to transporters and 21 days credit period isgiven to distributors.At site level company holds 4.35 crore of inventory (both raw material andfinished good) per month. 5.5 Crore inventory per month turnover vise. Globallycompany has reported 90 crore inventory till 2007, now it has been reduced to 48 crore.