logistics project

A

PROJECT REPORT ON

“INVENTORY, PURCHASE & PRODUCTION MANAGEMENT”

AT

VICTRANS ENGINEERS PVT. LTD.

SUBMITTED TO UNIVERSITY OF PUNE

PGDMLM (2009-2010)

SUBMITTED BY:-

ABHINIT KUMAR VERMA

UNDER THE GUIDANCE OF

PROF. MANGALGOURI DESHMUKH.

SINHGAD INSTITUTE OF MANAGEMENT

PUNE-411041

1

CERTIFICATE

This is to certify that project report title “Inventory, Purchase & Production

Management" at Victrans Engineers Pvt. Ltd. is a bonafied work carried

out by Mr. ABHINIT KUMAR VERMA of Post Graduate Diploma in

Material and Logistics Management, of Singhad Institute of Management

for fulfillment of PGDMLM Diploma of Pune University. He worked under

our guidance and direction.

Dr. Daniel J. Penkar Prof. Mangalgouri Deshmukh.

(Director) (Project Guide)

Place: Pune.

Date:

2

ACKNOWLEDGEMENT

This project bears imprint of all those who have directly or

indirectly helped and extended their kind support in completing

this project. At the time of making this project I express my

sincere gratitude to all of them.

I express my profound gratitude to my project guide Prof.

Mangalgouri Deshmukh, my College Director Dr. Daniel J.

Penkar for their constant guidance and encouragement and my

course Coordinator Ms. Gopa Das for her very kind support and

valuable guidance in completing my project.

I express my deep sense of gratitude, indebtedness and regard to

Mr. Sanjay Mahale, Mr. A.M.Takale & a special thanks to Mr.

S.K.Dutta for their cooperation in this project.

At this moment I also thank almighty, my Parents and God for the

blessings showed upon me and also my Friends for their valuable

suggestions.

ABHINIT KUMAR VERMA

PGDMLM “B”

3

DECLERATION

I, the undersigned, hereby declare that the Project Report entitled

“INVENTORY, PURCHASE & PRODUCTION MANAGEMENT” at

“Victrans Engineers Pvt. Ltd.” written and submitted by me to the

UNIVERSITY OF PUNE, in partial fulfillment of the requirements of

the award of Post Graduate Diploma in Material & Logistics

Management (PGDMLM) under the guidance of Prof. Mangalgouri

Deshmukh is my original work and the conclusion drawn therein

based on the material collected by myself.

Place: Pune Abhinit Kumar Verma

Date: PGDMLM (B)

4

PREFACE

“To manage a business well is to manage its future & to manage the future is to manage

information” an aspect of management education is to undergo winter training in the

corporate world and then make a revolution of it. This training is offered at the completion of

first semester PGDM and prior to commencement of the second semester PGDM the

companies offer the winter trainee’s wide varieties of interesting and challenging project.

Winter training requires that the student attains practical experience in an industrial

organization for a period of four weeks. The winter project investigates some significant

aspect or problem of an organization. It gives students an opportunity to observe the business

organization in operation and sharpen their skills by putting then to use.

Winter training enables the students to undergo research work or an on the job training .This

training enables individuals to make a better informed carrier choice regarding both

functional specializations and type of organization.

Yet it is sufficient for the student to apply the management concept to the real life situations

and at the same time also be it their independent judgments and creativity.

5

CONTENTS

SR.NO. PARTICULARS PAGE

NO.

1. EXECUTIVE SUMMARY 7

2. INTRODUCTION 9

3. RESEARCH METHODOLOGY 12

4. OBJECTIVE OF STUDY 16

5. COMPANY PROFILE 18

6. ANALYSIS & INTERPETATION 26

7. FINDINGS & SUGGESTIONS 50

8. CONCLUSION 53

9. BIBLIOGRAPHY 55

6

CHAPTER -1

EXECUTIVE SUMMARY

7

EXECUTIVE SUMMARY

“VICTRANS ENGINEERS PVT.LTD.” precisely forms a part of “ELECTRICAL

INDUSTRY” where in the customers satisfaction is the most important thing which is to be

taken into consideration. This company works on the basis of “First in First out” (FIFO)

principle, but due to the various technical and working parameters as well.

During the project with “VICTRANS ENGINEERS PVT.LTD.”, I got an opportunity to

understand the purchase of raw material, its storage and the production part of the company.

The main problem regarding the matter of production is that, the raw material flow is slow, so

the company has to keep stock of raw material in good numbers. This is the ideal strategy

adopted by the manufacturing companies.

Now considering all these difficulties there was a need to develop a perfect inventory

management system.

The project also constitutes the study of documentation procedures that are followed in the

industry, like preparation of job order, generation of delivery challan cum invoice,

reconciliation of quantity, settlement of claims, etc.

The work that has been done in this project has given some important clues to the

management about the areas which thought were doing good and not only this it has also tried

to throw some light on the possible changes that can be made in order to achieve more and

more efficiency.

The main purpose of selecting this project is to study the aspects involved in purchase,

production & inventory management and the several documentation processes that are

involved in the working of the company.

8

[

CHAPTER -2

INTRODUCTION

9

Production can be defined as the manufacturing of goods and services, in production

management different things should be kept in mind which is determination of production

requirement, manufacturing process, order priority &right quality.

Inventories are the stock of raw materials of any kind that are stored for future use, mainly in

production process. Inventory management is the forecasting of analysis and modeling,

inventory stimulation. Inventories are materials or resources of any kind having some

economic value and management of these are called inventory management. There are

different types of inventories which are as follows:-

Raw material inventory.

In process inventory.

M R O inventory.

Finished goods inventory.

In transit inventories.

Lot sized inventories.

These are the types of inventories which are to be managed which are called Inventory

management.

Purchase management consists of management of all purchasing or procuring activity of the

organization in terms of raw material and semi finished material for further production

activity.

10

Purchasing management done by different organizations through using different methods

which are as follows:-

According to requirement buying.

Schedule buying.

Forward buying.

Speculative buying.

Contract buying.

Blanket orders.

Tender buying.

There is a vital need for integration so that customers can achieve their transportation

requirements while maximizing the value of money spent in getting their goods to market.

They require better use of existing assets and industry cooperation, and greater competition.

Companies aiming to be an integrated solutions provider have to tackle this by extending

their supply chain capabilities.

11

CHAPTER -3

RESEARCH METHODOLOGY

12

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. Why a research study

has been undertaken, how the research problem has been defined, in what way and why the

hypothesis has been formulated, and what data have been collected and what particular

method has been adopted, why particular technique of analyzing data has been used and a

host of similar other questions are usually answered when we talk of research methodology

concerning a research problem or study.

Research design:-

A research design serves as a bridge between what has been established (the research

objectives ) and what is to be done , in the conduct of the study. In this project the research

done is of conclusive nature. Conclusive research provides information that helps in making a

rational decision.

Descriptive design was choose to measure the satisfaction level of production on the basis of

different parameters such as working of machines, quality, skilled workers, Technology,

Intensive to workers etc. This design ensured complete clarity and accuracy it also insured

minimum bias in collection of data and reduced error in data interpretation. Statistical method

was followed in this research because the data was descriptive nature and is also enabled

accurate generalization.

13

SOURCES OF DATA

Primary Data

Prime data are those which are collected a fresh and for the first time, and thus happen to be

original in character it was collected through following ways

1) Interview

2) Observation.

Secondary Data

Secondary data are those which have already been collected by someone else and which have

already been passed through the statically process the data were collected in the form in

company profile and produce profile through following ways

1) Internet

2) Newspapers

3) Journals

14

RESEARCH INSTRUMENTS:

Industrial visit were used as it helped to prepare this project. Collecting data through

questionnaire was very time saving and personal observations was very time saving and cost

factor was also reduced. The respective departments and the net was also helpful in collecting

data.

SAMPLE DESCRIPTION:

SAMPLE DESIGN

The universe: - This consist the workers, employees and the production department.

SAMPLE METHOD

The sampling method used for the selection of the workers and employees is expert

judgmental sampling.

SAMPLE SIZE

The number of respondents interviewed 20.

METHOD OF COLLECTION:-

Data was collected through questionnaire, industrial visit and from departments. Questions

were of both types open ended and close ended. In these Questionnaire were not self

administered, I asked questions from various people in the logistic unit and then I noted all

the answers of questions.

15

CHAPTER-4

OBJECTIVE OF STUDY

16

OBJECTIVES OF THE STUDY

This being a part of the Electrical and Technology sector so the most important thing in this

sector is the quality product & prompt delivery of the materials. In this regard the production,

purchase & inventory department of any organization plays the most important role.

Therefore, the main objective of the study is to know how purchase, production &storage of

products and the information related to the product takes place in the company.

The Objectives, behind the study are as under:-

1. To study the existing production strategy, adopted by Victrans Engineers Pvt. Ltd.

2. To examine the strength and weakness of existing strategies.

3. To understand the effectiveness of logistics strategic in the market.

4. To suggest the measures to overcome the weakness from the existing strategies.

17

CHAPTER-5

COMPANY PROFILE

18

COMPANY PROFILE

Victrans Engineers Pvt. Ltd. was founded in1989 by Mr. S. K. Dutta in Nagpur with an

objective of making instrument transformers. Victrans Engineers Pvt. Ltd. produces current

transformers and potential transformers. It not only produces these products but also provides

services for these products. Victrans Engineers Pvt. Ltd. is located in an industrial area of

Nagpur called Hingna, MIDC, which is 14 kms from zero mile, Nagpur. The product ranges

of the company are as follows:

33kv Single Phase outdoor type current transformers.





33kv Single Phase outdoor type potential transformers.





19

INTRODUCTION OF VICTRANS ENGINEERS PVT. LTD.

Victrans Engineers Pvt. Ltd. manufactures current and potential transformers and also

provides services for these products. It manufactures these products in the required

specifications and standards. VEPL produces transformers which are used in different public

and private sector organizations like Maharashtra State Electricity Transmission Co. Ltd.,

Delhi Transmission Co. Ltd., Kirloskar Brothers Ltd., Suzlon Infrastructure Services Ltd.,

Larson & Tourbo Ltd. (ECC division).

The transformers are of superior quality and extremely durable. VEPL pays revenues to the

government and also provides employment to a lot of people.

20

MISSION OF VEPL

ENRICHES LIVES

We will do our best to provide quality products and services, which will improve the life

style of the users.

QUALITY POLICY

We aim for maximum customer satisfaction by way of continual improvement of the

process & quality system of the organization and targeted quality objective.

OUR WORD IS OUR BOND

Our dealers are our partners to practice this golden rule in our relations with others.

INTEGRITY IS OUR COMMITMENT

The conduct of our companies’ affairs must be pursued in a manner that command respect

for honesty and integrity.

21

AUTHORITY STRUCTURE

MANAGING PARTNER

PARTNER

Dy.G. M. F&A MANAGER G.M.

WORKS MANAGER

22

TECHNICAL MANAGER

TEST/INSPECT

MARKETING MANAGER

STORES

PRODUCTION

FEBRICATION

ADMINISTRATION

HUMAN RESOURCE

PURCHASE

I.S.O

CUSTOMERS OF VEPL

Maharashtra State Electricity Transmission Corporation Ltd.

Gujrat Energy Transmission Corporation Ltd.

Karnataka Power Transmission Corporation Ltd.

Punjab State Electricity Board.

West Bengal State Electricity Transmission Corporation Ltd.

Haryana Vidyut Prasaran Nigam Ltd.

Tamil Nadu Electricity Board.

Chattishgarh State Electricity Board.

Madhya Pradesh Power Transmission Corporation Ltd.

Orrisa Power Transmission Corporation Ltd.

Jharkhand State Electricity Board.

U.P. Power Transmission Corporation Ltd.

Bihar State Electricity Board.

Andhra Pradesh Transmission Corporation Ltd.

Delhi Transmission Corporation Ltd.

National Thermal Power Corporation Ltd.

Damodar Valley Corporation Ltd.

Kirloskar Bros. Ltd.

ABB Power System Distribution System.

AREVAT&D Industries Ltd.

23

Shreem Capacitors Private Ltd.

Bhansali Engineers Polymers Ltd.

M/S Shamanar Sugar Ltd.

Eri-Tech Ltd.

Ashtavinayaka Constructions.

Techno Electricity & Engineering Company.

Integrated Powers Supply.

SKS ISPAT & Power Ltd.

The High-Tech Electricals.

Mavin Switchgears & control.

AGM-Power

V R Patil & Associates.

M/S Jaymas Trade Links.

ABG Electrical Consultants.

Vandana Global Ltd.

Vestas Wind Systems.

Emco Ltd.

Larson & Tourbo Ltd, ECC Division.

Suzlon Infrastructure Services Ltd.

Subhash Projects & Marketing Ltd.

High-Tech Electrical Pvt. Ltd.

24

Simms Engineering’s.

Shree Renuka Sugars.

Bharat Bijlee Ltd.

Technical Associates.

Sterling & Wilson Pvt. Ltd.

Kintech Synergy Pvt.Ltd.

Shyam Steel Industries.

Costal Projects Pvt. Ltd.

Prinz Engineers India.

Traders Electricals.

Bright Power Project Pvt. Ltd.

Shalaka Infro-tech.

Continental Industries.

Techno Electrical & Engineering.

Raychem RGP Ltd.

Bharat Bijlee Ltd.

25

CHAPTER-6

ANALYSIS & INTERPETATION OF DATA

26

PURCHASE PROCEDURE

1. Vendors & subcontractors as on 14/09/2003 are included in the approved lot of

vendors based on the past performance.

2. In case of vendors or subcontractors, on finding prospective vendor/subcontractors,

vendor information format number QMSP-03-F-01 is sent to the vendor to get

desired information on obtaining the desired information in detail, it is reviewed by

executive, production & then put up to the director for approval on approval, the trial

order is placed. If in two consecutive trial orders, no rejection are found then the

vendor is included in the approved list of vendors.

3. Vendors rating for critical materials is carried out once in six months & based on the

rating, they are either included or deleted from the approved list.

27

VENDOR RATING PROCEDURE

Vendor supplies are evaluated for each lot supplied, as per vendor rating system & values are

entered in a format.

Vendor Rating is done on following parameters:

PARAMET

RES

MARKS

RATIN

G

QUALIT

Y

70

Lot accepted-Full

Partial rejection-20%

Full rejection-Nil

QUAN

TITY(AGAINST

PURCHASE ORDER)

20

Up to (+ -)2%-Full marks

Up to 10%- 10 marks

DELI

VERY

10

Within 10 days- Full

15days & above- 5marks

28

If any marks on six months rating is found to be >85, the vendor Continues to be in

the approved list. If the rating is <70-85, vendor is informed about the deficiency by a

letter & if the rating is <50,or failing the quality any of the parameters order

placement is discontinued & vendor is informed to submit fresh samples for approval.

Purchase Orders are released by after reviewing the rating. The purchase orders

contain the purchase data such as clear product description, product specification,

acceptance criteria, delivery periods and inspection criteria along with commercial

data details as per the format records of such are maintained. In case of amendments,

purchase orders are reviewed for and approved by partners of the company. Purchase

orders are prepared for items having values above Rs. 10000/-

Purchased products inspection is carried out to ensure the specification given &

products reviewed are matching.

29

New Vendor Information Sheet

This information sheet is filled by new vendor so that the company can know about the

vendor.

VENDOR NAME:

PROPRIETORS NAME:

LEGAL STATUS:

CONTACT NO. :

FAX NO. :

EMAIL ADD:

Are you ISO 9000 certified? If yes please furnish Xerox copy of certificate.

Have you been approved to any customer? If yes, please furnish copy of certificate.

Any other product time approved obtained? if yes, furnish copy of certificate.

Minimum lead time required to supply the material.

Please give details of available infrastructure.

30

CONSUMABLE CRITICAL ITEMS

SR.NO. DESCRIPTION SIZEAVAIL.

QTY.

1. COPPER BASE 16 SWG xxx

2. COPPER SE 16 SWG xxx

3. COPPER SE 17.5SWG xxx



6. COPPER ROD 20MM xxx

7. COPPER ROD 22MM Xxx




11. PAPER TAPE 25MM Xxx

31

12. CRAPE PAPER TAPE 30MM xxx

13. CRAPE PAPER TAPE 40MM

[

xxx


[


[

16. PRESS BOARD 1MM xxx

17.

[

PRESS BOARD

[

3MM xxx

18. CORK SHEET 3MM xxx

19.

[

CORK SHEET

[

6MM xxx

20. ALLUMINIUM FOIL xxx xxx

21. SECONDARY TERMINAL 6MM

[

xxx

22.

[

SECONDARY TERMINAL

[[

8MM xxx

32

23. PRESURE RELEASE VAULVE xxx

xxx

24. OIL GUAGE xxx

[

xxx

25.

[

N2 VAULVE xxx xxx

26. EPOXY ZINC RICH PAINT xxx xxx

27. EPOXY THINER xxx xxx

28. FEVICOL xxx xxx

29. BRAZING ROD SILVER xxx xxx

30. BRAZING ROD COPPER xxx xxx

31. SILICON WASHER ROLLAR TYPE xxx xxx

32. SILICON WASHER PLAIN xxx xxx

33

Inventory Control

34

33. NYLON PART MALE FEMALE

[

xxx xxx

[

34. WELDING ROD xxx xxx

35.

[[

WELDING ROD M16 xxx xxx

36.

[

GI NUT BOLT xxx xxx

37. M.S. NUT BOLT xxx xxx

38. CO2 GAS xxx xxx

39. OXY GAS xxx xxx

40. LPG GAS xxx xxx

41. TAG xxx xxx

42. TAG xxx

[

xxx

Successful, well organized businesses rely heavily on inventory management system to make

certain that adequate inventory levels are on hand to satisfy their customers demand. The

inventory control module for the business accounting system provides this level of control by

offering high end features normally reserved for large companies including manufacturing

capabilities, serial number tracking and multi-ware house support. Inventory control even

features and image library that allows you to assign a picture to each part. Improved customer

service leads to increased profitability. And when integrated with the accounts receivables

and order entry modules, inventory control can significantly boost your service level while

operating as the cornerstone of an effective manufacturing or distribution solution. For more

complex project management, inventory control can be coupled with the job cost module to

help track all inventory related expenses for a project. Inventory tracking is enhanced even

more when integrated with the custom office module, which creates detailed spread sheet to

provide further analysis of inventory performance. The inventory control system offers

comprehensive reporting capabilities to top of inventory status. It can help to bring about the

creation of improved purchasing policies, pricing methods, even enhanced customer service.

ISSUE OF RAW MATERIAL

STEP 1:

35

The process of issue begins with the issue sheet prepared and sent by the planning department

to the material control department or as per the requirement.

THE SHEET CONTINS FOLLOWING INFORMATON

Date of issue of sheets from planning department.

Number of material to be issued.

Size of the material.

Weight of the material.

STEP 2:

The supervisor at the material control receive the receipts, check the requirement and they

look for the availability of raw materials. If the total requirement is already in the stock it is

separated and issued. In case of none availability either order is being placed for the material

for the planning is informed regarding the scene. Material control identifies the required

material from a huge stock of variety of the material by multipurpose tag attach to each lot of

raw material.

A tag contains of vital following information

Source from where the material is brought or purchased.

Batch number of material.

Size of the material.

Grade of the material.

STEP 3:

36

Raw material are issued basically to three division or units they are here indigenous material

is washed and cleaned and made ready further processing.

STEP 4:

After issue of raw material the material control supervisor prepares a manual record of what

he issued using issue sheet. The basic content of the sheet are as follows: Department of issue

grade which is issued. Lot number issued Size of material issued Number of bush issued

Total number of quantity issued Signed by concerned issuing authority or supervisor.

STEP 5:

Through the requirement and issue are always in contrast with each other but sometimes

uncertainties occur and this result is the situation of left over which is rare in nature.The sheet

is divided into two parts that is excess supply and unusable material.

Basic contents are as follows:

Size of material left

Grade of material left

Quantity left

Required quantity as mentioned

Quantity actually supplied

Date when supply was made

Department from where issue to place

Reason for left over occurrence

Decision on what to do of left over that is whether it is put to some other job or removed and

stocked.

STEP 6:

After the left over reaches the yard its specific features are compared with the one being sent

and then it is stocked at specific place until it comes to some use.37

RAW MATERIAL INFORMATION FLOW

MIS SYSTEM

MIS stands for management information system and is a form of generating information

regarding the various ongoing process in the organization with the help of digital or

electronic media it is very much vital it is very much vital for the proper functioning and

smooth running of the each and every organization.

MODULE OF MIS:

STORE ISSUE SLIP

38

WARE HOUSE

MARKETING

QUALITY ASSURANCE DEPARTMENT

FINANCE & ADMINISTRATION

PURCHASE

DISTRIBUTION SYSTEM

ERP SYSTEM

SL.NO.

DESCRIPTION QUANTITY

REQUIRED

PUR- POSE

QTY

ISSUED

RECEIVED BY

ANALYSIS OF MONTHLY DISPATCH OF CT & PT

39

SR. NO. Month Current Year

(2008-2009)

Qty. in no’s

Previous Year

(2007-2008)

Qty. in no’s

1 April(08) 1500 1200

2 May(08) 1600 1350

3 June(08) 1900 1600

4 July(08) 1700 1400

5 August(08) 1600 1550

6 September08) 1800 1710

7 October(08) 2090 1800

8 November(08) 1500 1230

9 December(08) 1870 1560

10 January(09) 2000 1700

11 February(09) 1800 1400

12 March(09) 2000 1500

Total 21360 18000

40

Dispatch Figures

Current Year 2008 - 2009

Previous Year 2007 - 2008

41

ROUTINE TEST

JOB SL. NO.

I R VALUE

TAN DELTA & CAPACITANCE

HVPF TEST

P.D. TEST

HVPF TEST ON SECONDARY WING

OVER VOLTAGE

MEASUREMENT OF RESIS

VK & SLV TEST

TRE TEST

ACCURACY TEST

ISF TEST

42

STORAGE HANDLING

In times of severe competition, many retailers recognize the importance of controlling cost.

Cost knowledge is thus a foundation for improving supply chain relationship with known

supply chain relation costs, the information’s needed to most effectively structure the supply

chain can be provided. Moreover, different opportunities needed to most simultaneously

reduce cost and increase performance can be identified. The logistic cost made in the part of

the supply chain that include the warehouse and the store are presented. It can be seen that the

majority of operational costs are handling costs. In another empirical study by saghir and

jonson the same trend was observed : they found that 75% of the handling time in the retail

chain occur in the store. In their paper efficiency improvement through the integration and

development of new packing system are described. In this article, the potential to improve

handling efficiency is discussed by identifying the drivers for stores handling (i.e. given the

packages and the inventory replenishment rules). Handling costs in the stores in the two retail

chains investigated in this paper are equal to around 50 million euro per year, indicating that

efficiency gains lead to substantial euro saving as well.

43

ACTIVITY OF ORGANIZATION

44

SUPPLIERS

SOURCING RAW MATERIAL

PRODUCTIONPRODUCT STOCK

PHYSICAL DISTRIBUTION

CUSTOMER

SWOT ANALYSIS

The overall evaluation of strength, weakness, opportunity and threat is called swot analysis.

STRENGTH

Market share is strong.

Large distribution network.

Dealers, Branch office is concerned with interest in all over India.

Its products are best and are tested by several authorities.

It has a very good infrastructure and work force.

Healthy financial position.

Raw material available.

It uses Enterprise resource planning.

WEAKNESS

VEPL has semi-automatic plant.

Highly bureaucrat.

Over looked small customers.

Inadequate expenditure of R&D.

Non effective advertising image.

High production cost.

Demand has increased because of infrastructure development.

45

OPPORTUNITY

Developing cities.

Electrification in villages.

Development in villages & set up of industries.

Can increase profits by direct advertisement.

Competitors are not much strong.

Good pool of customers.

Govt. providing work.

THREAT

Low price of rival products are one of the threats.

High cost of production.

Government always changes policies.

Workers efficiency is low.

Other similar companies.

High lead time.

46

QUESTIONNAIRE

Do you use material requirement planning technique?

Ans: Yes No

Which software do you use SAP/ORACLE?

Ans: ORACLE SAP

47

15 5

18 02

For how many days you maintain the inventory of raw

materials?

Ans: 30days 60 days

Do you use ERP?

Ans: Yes No

48

4 16

7 13

Do you prefer single or multiple vendor for purchasing raw

materials?

Ans: Single Multiple

Do you audit regularly?

Ans: Yes No

49

2 18

15 5

CHAPTER-7

FINDINGS & SUGGESTIONS

FINDINGS:-50

During the one month training in VICTRANS ENGINEERS PVT.LTD. we find number of

things and if the company pay attention in these findings it can become the top most company

in the sector here are some of the findings which we find during that one month duration of

training:-

In the company, the Material Handling is done with the help of the Systematic

Material Handling Techniques such as use of Material Handling Equipments.

The major portion of the company is operated through the Oracle Software

which is used as the internal Enterprise Recourse Planning Tool.

The minimum inventory level for 60 Days is maintained in the stores so as to

balance the fluctuation between the supplies of the raw material.

The ERP technique is used in the company to co-ordinate between different

departments of the company.

Usually, multiple vendor system is preferred over the single vendor system.

This system enables company to overcome the problem of delayed supply of

the raw material.

The Audit is carried on the regular basis, in the interval of 6 months.

The testing of the raw material and the finished goods is carried out at both

factory stores as well as the supplier/customers facility.

51

SUGGESTIONS:-

As the production storage & purchase is very important in VEPL and it has prove it to their

best also but there are some drawbacks and if they fulfill it they might become the top

Company in the sector.

Though the material handling techniques are used, there is a significant scope to

improve the handling process. The better material handling tools should be used to

reduce the accidents.

The regular maintenance of the material handling equipments should be carried out.

The audit should be carried out in the intervals of 3 months so as to calculate the

inventory status which will help in the inventory control.

The working hours should be increased by 2 hours at the most so as to increase the

productivity.

The single vendor system should be used on trail basis. This will help the company to

reduce the regular 60 days inventory level.

In the company, they use both Oracle and SAP software for ERP. Instead of using two

different software, they should use only one software as main ERP System Tool.

52

CHAPTER – 8

CONCLUSION

53

CONCLUSION

How Inventory Increases?

Rejection:

Rejections due to poor quality of raw material or process rejections at every stage due

to quality checks.

Even implementation of Sample Inspection has resulted in faulty batches to pass by &

found as defective in the final stages of production, resulting in losses.

Cancellation of Orders:

Due to economic slowdown, many a times there is cancellation of huge orders which

leads to excessive inventory of finished goods.

Producing extra to tackle unidentified loss of files & to avoid shortage to complete

orders. This result in excess files produced in every batch of production for orders.

And these files keep on adding up to inventory until the next order for the same file

type is placed.

Scrap accounted at every stage of production which accumulates to almost more than

8%.

Obsolete Raw Material – outdated raw material kept in the warehouse. Not being rid

off as it will account for this year losses and it is carried forward, adding up to

unnecessary utilization of space.

Issues regarding Production & Inventory Control

Poor Maintenance: Machines not maintained properly so breakdown occurs & affects

output. But still machines are run as it is, which results in low quality of goods.

Break-down in Line Layout Undesirable, as it reduces the production capacity.

Weighing Machines need to be kept in every department to avoid unnecessary

material handling & thus save time and thus avoid workers from unnecessarily

wandering on pretext of work and wasting time.

Reduction in Manpower, so workers don’t work whole-heartedly.

Stagnant Inventory

Check on implementation & worker effectiveness

Trained labor needed for doing a particular job – training required for Job Rotation.

54

BIBLIOGRAPHY

Materials and logistics management by L.C.Jhamb, Nirali Prakashan

Purchasing and material management by Gopalkrishnan

Material Management by Dutta

A text book of Purchase management by L.C.Jhamb, Nirali Prakashan

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logistics project

Documents

Transcript of logistics project