A study of Inventory Management

PART-A
1.

INDUSTRY PROFILE

History of Textile or cloths can be drawn back to the dawn of civilization as understandable. Textile word comes from Latin “textiles” which means women. The term comes from verb texture “to weave” in textile since, however a textile is freely defined as any product any product made from fiber. People no longer buy cloths to keep their body warm and cozy. They buy them because of the way fabric makes them feel masculine, feminine, young, glamorous, different etc. buying cloths has become an emotional experience. Business of textiles market now is selling excitement rather than clothing. It is well known that textile industry is one of the oldest and the largest industry in the world. From ancient eras until the eighteenth century, all fabrics were constructed and decorated by hand weaving which was organized at home or in small workshops. Some artist weavers of those centuries achieved great skills and many surpassed such beautiful examples as oriental carpets and rags, huge tapestries, porting intricate scenes and early Coptic textile, now hang in museum all over the world as measured exhibits. Textile industry represents the rich culture, tradition, heritage and economic well-being of country with diversified range and versatility. At the same time industry is competitive enough to fulfill different demand patterns of domestic and global markets.

Textile Industry in India
India Textile Industry is one of the leading textile industries in the world. Though was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of GSSSIETW, Dept of MBA ,MYSORE Page 1

A study of Inventory Management economy gave the much-needed thrust to the Indian textile industry, which has now successfully become one of the largest in the world. Textile industry in India provides great contribution for the development of economy. It is the second largest industry in the world after china. It provides ample employment opportunities to people belonging to all classes. After agriculture this provides employment to maximum number of people in India employing 35 million people. India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. India textile industry currently generates employment to more than 35 million people. It is also estimated that, the industry will generate 12 million new jobs by the year 2012. India textile industry is one of the leading in the world. Currently it is estimated to be around US$ 52 billion and is also projected to be around US$ 115 billion by the year 2012. The current domestic market of textile in India is expected to be increased to US$ 60 billion by 2012 from the current US$ 34.6 billion. The textile export of the country was around US$ 19.14 billion in 2006-07, which saw a stiff rise to reach US$ 22.13 in 2008-09. The share of exports is also expected to increase from 4% to 7% within 2012. Following are area, production and productivity of cotton in India during the last six decades. “If there is any industry, which is truly representative on India in all its hues, contracts unity, conflicts, history and enterprise hard work”- it is the textiles. The very first textile mill was started in India in 1854 with the establishment of Bombay spinning and weaving mills. Till 1920 the total extension of textile industry was concentrated around Mumbai but gradually it spread all over India. A major role is being GSSSIETW, Dept of MBA ,MYSORE Page 2

A study of Inventory Management played by textile industry constitutes around 9% of GNP, and the export of textile constitutes 35% of the total export earnings. Looking at the ancient history from the economies, social or simply physical angles and comparing it to the way it operates, elsewhere in the world one cannot fail to how in this country. Be it in the Vedic, mogul, British or the current democratic era, our textile industry has not only drawn rich lessons from each of them extensively, but also has even kept pace with the changing times. Presently the Indian textile has grown at phenomenal pace and today it accounts for 25% of the total exports from the country. Similarly, the RMG export sector is the thrust area of export contribution, up to 8% of total export from India. Today when the nation is facing financial crisis, the role of the textile industries become more important in increasing export from the country and earns valuable foreign exchange. More than one core of persons are connected with textile industry and earns their livelihood. It constitutes 25% to country’s industrial production.

Current Facts on Indian Textile Industry
• • • • • • India retained its position as world’s second highest cotton producer. Acreage under cotton reduced about 1% during 2008-09. The productivity of cotton which was growing up over the years has decreased in 2008-09. Substantial increase of Minimum Support Prices (MSPs). Cotton exports couldn't pick up owing to disparity in domestic and international cotton prices. Imports of cotton were limited to shortage in supply of Extra Long staple cottons.

GSSSIETW, Dept of MBA ,MYSORE

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an enterprising Scottish gentleman. The discerning consumers in India now can experience international-quality garments in their own cities and towns. they set up a nationwide distribution network in the 1960’s. GSSSIETW. Kumar’s brand. As the clientele and reputation grew. Reid & Taylor is the first brand in India to offer both fabrics and apparel under one label. a first textile companies to have ushered in the widespread use of polyester and polyester blends in the country. which today is better known as Reid & Taylor. jeans. Abhaya Kumar. Thus. COMPANY PROFILE 2. Reid & Taylor has emerged as a leading brand in the worsted suiting segment. The group established the S. Reid & Taylor continues the journey to create the finest fabric passionately and has thus carved out a distinguished name for itself in the industry. S.1 BACKGROUND AND INCEPTION OF THE COMPANY The S. Shambhukumar S. jackets. trousers. shirts ties and accessories along with a wide selection of T-shirts. he was joined by financer Joseph Taylor.A study of Inventory Management 2. Today. embarking on a journey to make his vision a reality. Dept of MBA . is a subsidiary of SKNL. It has been a forerunner in the industry for the last five decades and is regarded as one of the most reputed business houses in the country. began the enduring partnership of creating finest cloths in the world. Reid & Taylor has been styling the world's elite for over 170 years. Using locally available Cheviot wool he created Cheviot cloth that soon caught on the fancy of the landed gentry. Reid & Taylor (India) Ltd.Kumar’s Group was set up in 1948 by shri. It all began in the 1830's with Alexander Reid. Reid & Taylor was launched by SKNL in India in 1998 with the inauguration of a state-ofthe-art fabric plant at Mysore. The apparel range includes formal and casual daywear suits. Synonymous with British tradition. The fine quality of garments and sharp styling has created a space for itself in the customer’s mind. Kaslival and shri. and other weekend wear.MYSORE Page 4 . kaliwal.

discharge maintains Greenbelt spread over 1. 48 19 Pioneered the use of the S Kumar’s brand name in the textile trade 60 19 Established a nation wide distribution network. & Taylor 19 Commissioned a state –of – the – art worsted computer near Mysore – One of the best in the 99 world.MYSORE Page 5 . Environment Policy 1.K. 19 Technology and Marketing collaboration with Reid & Taylor of Scotland. Dept of MBA . ISO 14001 Certified Environmental system Management. 80 19 Consolidated the Group’s textile business by establishing S Kumar’s Synfabs ltd as the 90 flagship company for textile business. Rain water harvesting in use. 95 19 Acquired a stake in Reid & Taylor of U. Adhering to all State Pollution control Board norms. Quality Policy GSSSIETW. 19 Textile business founded. 15. 5. 70 19 Established textile manufacturing facilities at various locations.000 square meters. Substantial water conservation through reuse of 300 KL/day (out of total requirement of 750 KL/day) 4. comprising over 2000 trees.A study of Inventory Management Produced by Reid & Taylor at a dedicated facility in Bangalore. 2. Use of eco. Integrated Effluent Treatment Plant.friendly dyes and chemicals. thereby acquiring usage of the Reid 96 brand name for the worsted fabrics range. 200 Setting up the most modern computer for high value fine cotton fabrics launching “Ready to 0 wear” apparels. the apparel range upholds the finest tradition of quality and cuts in outfitting. 6. 3.

A study of Inventory Management 1.MYSORE Page 6 . experienced team led by technocrats with average industry experience of 30 years. Dept of MBA . Team Reid & Taylor is respected across industry for innovation and productivity. They are committed to comply with ISO 9001 and for continual improvement of the Quality Management System (QMS). Human Resources  Competent. The Reid and Taylor product range is synonymous with hi-fashion premium clothing and superlative fabrics in the segment and the company is widely recognized as a world leader in fabrics for menswear. 2. 51 junior officers and 30 trainees. Right mix of youth and experience. 3. providing opportunity to employees and associates to realize their potential to the fullest extent.2 NATURE OF THE BUSINESS CARRIED Reid and Taylor Industry belong to the allied group of the United Kingdom and have a heritage of over 150 years of excellence in the fabrics business. They are committed to be a world-class company by consistently designing and manufacturing suitings to the highest standards and customer expectations. 2. They shall operate in a just and ethical manner.   a) 14 team leaders with 92 second – line managers    Team trained in house for greater productivity. Cordial employee relations and adequate training provided to enhance skills sets. GSSSIETW. Work force of over 1100 persons b) c) 96 officers. 808 workmen.

40:55:45 and 100% wool. Dept of MBA ..MYSORE Page 7 .K. best equipped and completely world-class fabric manufacturing facility. Through this focus. a powerful multimedia blitz and had firmly established Reid and Taylor as the brand for people with class and style. The Reid and Taylor is the brand focused towards the premium segment associated this brand with the icon of James Bond. Maintaining.960 spindles and a captive power generating capacity of 7MW. Reid and Taylor had successfully promoted itself in the Indian sub.continent. Japan and U. The Reid and Taylor started its commercial production in the month of December 1998 with a production capacity of 50 lakhs meters per annum. The company has provided employment opportunity to 1. GSSSIETW.E. etc. The workmen are employed as company apprentice or training period of 2 years and over 95% of the workmen are recruited from in and around Nanjangudu and adjoining villages. All the machineries are imported from Germany. The range of products varies from medium to higher range. As alliance. France.245. Over 1500 (approximately) design both export and domestics are being offered with blends of polyester wool 65:35. Reid and Taylor project is an Rs. S. middle-east.A. Negotiation etc. envisaged as India’s most modern.71 crores project.200 workmen including staff and indirect employment to about 200 persons.A study of Inventory Management With a plan for a major thrust in global textile markets. the company continuously initiates new brand management strategies with the aim of maintaining brand dynamism in a competitive market scenario. Switzerland and England. Italy. Kumars forged a strategic tieup with Reid and Taylor.. synergy across brands and their markets is the centralized brand management department. The 25% of its production is exported to foreign country like U. The plant has 12. In their effluent treatment plant 100% of industry effluent is treated and after the treatment the treated effluent is used for gardening... Kumars has made available to the Indian market a range of the world’s highest quality fabrics confirming to Reid and Taylor specifications. Effluent treatment plant in textile industry for the usage of water per day of various processing. S. The plant in fact is a zero discharge plant.

The company continues to pursue growth both organically and inorganically to contribute to the development of the Indian Economy. the need to offer best products and services to its consumers. To provide every opportunity to our business associates and employees to realize their potential to their fuller extent. thereby creating value for its stake holders. SKNL will continue to operate in all product categories catering to different segments of the market. employees and customers to maximize shareholders value.3 MISSION STATEMENT SKNL aims to be a model company incorporating the best work ethics and corporate governance. Instilling in its employees. To continue and expand the position in uniforms and workday materials. It benchmarks achievements against international quality standards and every milestone achieved as the stepping. To expand exports to 20% of group activity.MYSORE . The company’s mission is to grow extensively without compromising on quality. Page 8 GSSSIETW. To pursue our goals in just and ethical manner. Dept of MBA . It aims to be amongst the top 3 players in every area of operations. SKNL has created a world class enterprise managed by seasoned professionals. To consolidate and expand the position in shirting’s and pants.A study of Inventory Management 2. Business Objectives      To be India’s leading textile group and a world class entity. SKNL believes in fair play. • • • • To blend modern technology with traditional values in our endeavor to be a word class Indian Company global. To ensure the consumer remains the focal point of all our activities by offering him high value for money.stone to the reach zenith. To enter made-ups and value added products.

In fact the deliberation phase.shire cheviot.4 PRODUCTS/ SERVICE PROFILE In 1830’s Alexander Reid an enterprising Scottish gentlemen had a vision. is equally popular with both the masses as well as the elite and has a personally befitting the brand. was discussed but none was found to be as appropriate. The challenge required a brand ambassador. other names. That meant going beyond metros without losing the premium ness associated with the brand. too. Dept of MBA . creating an enduring partnership that is known as Reid and Taylor.and always only on order. who is a style icon for Indians. Using locally available cheviot wool.MYSORE Page 9 .C. In million years of homes across the country. The choice of Amitabh Bachchan as the new brand ambassador was unanimous.A study of Inventory Management To enter relating of apparent and soft goods country wide in a big way. lambs bale. Chinese Kashmir and most recently the incredible New Zelandbred Escorial. To become a global player in textile. However. post the initial success there was some stagnation in the growth of the brand.   2. And the reason was Bond. GSSSIETW. the rare blue Ross. The Escorial wool today is so rare that Reid and Taylor make only 200 meters of this fabric. it was India’s textile market that had caught the fever. Amitabh Bachchan clearly fits this role. After more than 20 years there was a new player in the worsted market. it was Reid and Taylor that eye from the many ads that were being aired. It was and is in this pursuit of developing some of the finest cloth in the world that the Reid and Taylor have carved a very distinguished name for itself. The mill won accolades and gold medals for its quality of fabric. Neilson was that the brand needed to reach a wider audience in India. he created cheviot cloth that soon was favored so much that he invited financier Joseph Taylor to join him. In June 1999 while the cricket world cup was on. “James Bond”. The conclusion of brand research by A. Reid and Taylor exquisite clothes are made from the best wool in the world including Australian merino.

This meant that international quality was now available customized for Indian conditions. based in Langholm) launched its Indian chapter in 1998 by setting up the state-of-the art plant at Mysore.MYSORE Page 10 . While no retail audit has been conducted so far. Virtually crease proof.1998. ‘Mistral’. Today with a sales turnover of Rs. ‘pearl’. 80 billion of the total PV market the branded segment account for Rs. At the top end the worsted (polywool) segment is estimated Rs. Products GSSSIETW. and ‘Vogue’. This is because custom tailoring in India significantly cheaper than in developed countries and the ready-to-wear segment is still not fully geared up.Reid and Taylor are growing at 25% per annum. Dept of MBA .A study of Inventory Management While it is too early to quantify the result the new campaign. 12 billion while the total polyviscose market is projected at Rs. unlike most developed countries. it aims at increased convenience and includes quality such as ‘Zephyr’.60 billion. The launch of Reid and Taylor is considered an important landmark in the Indian fabric industry.20 billion while the unbranded is worth approximately Rs. business associates including the trade are extremely excited about Amitabh Bachchan’s another example of product innovation is the Reid and Taylor polyviscose range. Reid and Taylor has emerged as a clear number two in the worsted segment with an 18% market share.2200 million. This new initiates brought about renewed excitement in the worsted industry that was stagnating pre. industry estimates project the market in three main segments. Typically in India. Market The fabric market for menswear in India primarily comprises of polyviscose (PV) and polywool ‘suiting’ fabric. fabric is retailed across the counter. Reid and Taylor (a Scottish brand.

attractive selvedge and competitive pricing. 100s. Primary amongst these was the need to combat the misconception that worsted suiting is suitable only for winter. fabrics in wool / linen and wool / silk. The brand has been able to get some of the world’s leading houses as clients – an outstanding testimony to its policies of design and customization. and superior shape of retention. cashmere-cotton. machine washable all wool fabrics and 100% cashmere suitings and jacketing fabrics.A study of Inventory Management Each bold of Reid and Taylor cloth is still made with the same painstaking attention to detail and minutiae that was established by its founders over 170 years ago. Dept of MBA . The range includes pure wool super fine fabrics made from fine merino fleece in high counts like 90s. The advantages that it enjoys today are the availability and the innovative use of technology as well as state-of-art production processes. GSSSIETW. With a clear understanding of major user segments and usage environments. cotton-wool(70:30) easy care all wool-high twist and machine washable. The brand has recently launched high quality fine fabrics that include the super 230s. Keeping certain factors in mind Reid and Taylor has developed a wide range of fabrics. Reid and Taylor press them all into service. & 130s. Reid & Taylor has also introduced blended fabrics like wool-silk.MYSORE Page 11 . ease of maintenance. for special occasion. Reid and Taylor’s research and product development demonstrate that every meter of fabric produced by it can be worn and maintained with ease in any climate. the product offering has been created to exceed customer expectations. A)Fabrics Reid & Taylor fabrics are acclaimed for their high wear ability. bamboowool (70:30). wool/ silk/ polyester and other blends. rewriting the rules with dynamic colors.

A study of Inventory Management The rare Escorial fabric is the world’s finest naturally grown wool and has been selected from the finest fleece measuring 16 micron or finer. Reid and Taylor manufacturers a wide range of worsted and premium suitings including: • • • • • • • • • All wool super fine Poly wool blends Wool cashmere blends Wool linen and wool silk polyester blends Polyester Viscose blends Polyester Viscose – worsted Value added polyester viscose blends Wrinkle resistant suitings ECOFRESH suitings B) Apparel In the ready to wear segment. The Reid and Taylor leisure comprises. Dept of MBA . Launching a worsted suiting brand in the middle of the Indian summer was considered ‘inappropriate’.MYSORE Page 12 . Promotion Flying in the face of conversion is a habit with Reid and Taylor. • • • • • Linen suits Cotton trousers Shirts T-shirts Golfing etc. trousers and shirts under the label of Reid and Taylor legends. Just GSSSIETW. making the fabric wonderfully light. Reid & Taylor has launched suits. Its natural spiral shape traps air and lends a remarkable elasticity. naturally flexible and stunningly erase resistant. a range of fine formal clothing aimed at the premium segment. jackets.

The launch strategy and strategic association with James Bond. Each component was designed to ensure optimum utility. After they have determined their objectives the next question before them was how to advertise. They choose four main media to advertise the product that are as follows. The advertising aspect i. Advertisements were making to promote the sales of their product. regarding the advertising of Reid and Taylor is under taken by the parent company itself.A study of Inventory Management before the start of the Cricket World Cup in 1999 Reid and Taylor did exactly that. including a media strategy that used television as the thrust medium with press playing a secondary role.. Reid and Taylor collaborated with S. Kumar’s launched their fabric in May 1999. Most of the people were not aware of the product. Main objectives of Reid & Taylor behind advertisement are as follows      To create awareness Positioning the product in the market To separate in to the market To create completion To overcome the existing completion. The role out was planned to perfection – the media strategy and its reach. Customers immediately connected with the brand position of ‘Bond with the Best’. Dept of MBA . As the company is a recently established on there is no separate advertising department in the company. • • Television Print media Page 13 GSSSIETW. The truth is that even today. the advertising support and the radical trade promotion were all synchronized like a good military campaign.MYSORE .e. Advertising The advertising campaign had many firsts. Shorter duration commercials ensured branding and clearly differentiated it from the other players in the market. after all these years the James Bond blitz is remembered.

but also in other regional – channels so that people can be aware of the product. and further company put word luxury to put in the image for the product in upper middle and upper classes people. as they say “Reid & Taylor” “Bond with best”. As most of the people are not in the habit of watching TV. which is already enjoying elite status expect India. Print media Print media is also one of the media. The problems before them was to select the celebrity or non-celebrity and finally they shoes “Amitabh Bachchan” as there icon or model they choose this person because of his class and attitude as. they awaited for the right opportunity to advertise their product. It was an important brand. The advertisement was not only shown in channels like DO and Star Plus. Reid & Taylor is a fabric of class. Newspapers and other forms of print media acts as their close supplement. As television acts as an important media through which the promotion of product is done.MYSORE Page 14 . In the earlier stages. Dept of MBA . The next question arises was who will be the brand ambassador? To make the image of high value product they search for the right icon. which helps in reaching the target audience. • • Advertising through Television After selecting the right icon. GSSSIETW. Reid and Taylor first advertise their product on television to create awareness among maximum number of people. In this regard. Reid & Taylor selected a few of the popular dailies having wide circulation to put up their advertisements.A study of Inventory Management Hoardings Sales promotion After deciding the media in order to create awareness there next aim was to penetrate in to the market and positioning the product in the market. Frequent advertisement were put in the television to capture the audience in large more and more people come to know about the product.

MYSORE Page 15 . GSSSIETW. “Frontline” and others. 1.A study of Inventory Management they preferred full-page advertisements were put-up at the regular intervals. Outdoor Advertising Hoardings are structures erected to carry advertisements. Dept of MBA . The hoardings exhibited by Reid & Taylor’s are bright and colorful. Glow signboard 2. This is one the promotion strategy of Reid & Taylor to eliminate completion and gain popularity. Large sized hoardings in prime locations provide better publicity to the product. “A and M”. The Posters used by Reid & Taylor are comparatively costlier when compared to those used by other textile industries. Posters are large printed pictures displayed at prominent places inside the shops. They are the most effective forms of advertisements as they influence the customers at the point of purchases. they are usually hanging boards. The glow signboards used by Reid & Taylor. As the advertisement gained popularity the size of the advertisement was reduced to half a page. The shop boards used by Reid & Taylor are of two types. Hoardings are cheaper forms of advertising when compared to TV and print media. It carries the company’s logo along with the slogan “Bond with the Best” Visual Merchandising Shop boards are another prominent form of advertising shop boards are large placards kept at prominent places in front of the shops. Posters The glow signboards use by Reid & Taylor are attractive and colorful. India Today”. The advertisement were also exhibited in magazines like “The Week”. Their advertisement was also up in specialized paper like “Economic Time” and Financial Express”. Reid & Taylor have displayed attractive and reasonable larger size hoardings in prime locations in order to gain the attention of people passing by. This is also one of the prominent forms of advertisements.

In five years so far. Reid and Taylor have been uniquely positioned as a ‘luxury suiting’. it is available in more than 3.40% to 50% on EX mill + duty 10% A company sponsored study revealed that Reid and Taylor enjoyed a high recall (80%) immediately after the 1999 Cricket World Cup. In fact. ‘Live like Bond’ – a nationwide consumer promotion – was held in association with Reid and Taylor. Dept of MBA . apart from this the company also appoints direct retailers it also has exclusive showrooms. The percentage offered is as follows: Agents W/S . the Reid and Taylor range has the width and depth to meet the growing demand of a mobile India. agents and retailers have often found customers asking for the ‘Amitabh-Wala suiting’.25% on e mill + duty 10% Direct Retailer.MYSORE Page 16 . Today.A study of Inventory Management Distribution The company adopts a three tied traditional form of distribution channel. differentiating it from the other so – called ‘premium’ suiting brands than available.3 ½ percent on the net sales value .000 outlets and through twelve exclusive stores. Blending with the promise of ‘Bond with the Best’ this positioning has created a unique brand and even today remains distinct and unchanged. it primarily comprises of agents wholesalers and Tag Retailers. Management GSSSIETW.

The essence of the group’s management stance. equally. 2. planning. Mumbai and Mysore wide distribution network. Thereby planning the seeds of what is today. Kumars finds itself among top few textiles companies in India. monitoring operations and overseeing other key functions. it is also an exporter of many variety of fabrics and will soon emerge as a garment manufacture. farming policies setting goals.S. Kaslival and his elder brother Mr. They provide entrepreneurial dynamism. consists of a sagacious combination of east and west: a harmonious blend of technology and tradition. It has textile manufacturing units in Dewas. today’s imperatives balanced by yesterday’s values. who founded it over fifty years ago. S. Progress is sacrosanct. it has a sharply defined management structure with the team of seasoned professional is their own right constitutes supervisory board. GSSSIETW. with a product mix which embraces virtually every kind of fabric.. Kumar and company in Mumbai to trade in textiles. Mr.5 AREA OF OPERATION – GLOBAL / NATIONAL/ REGIONAL It all began with a small trading company. quite simply. unified by a business. easily the biggest and organized in India. In 1948. vision and professional governance to the group. Dept of MBA . age-old virtues are scared.S Kaslival set up S. from polyester blended suitings and cotton suitings to home linen and wool suitings. Ghaziabad. More than 50 years it was founded S. Kumars group is managed and direct by two generations of Kasliwal family. strategy. S.A study of Inventory Management The S. And is responsible for identifying growth areas.MYSORE Page 17 . A. Indore. Kumars synfabs Ltd Today India…………… Tomorrow the world…………. a large business group with a portfolio of activities ranging from textiles and power to leisure and information Tech services a diverse conglomerate.

Perhaps. Asia’s most modern textile facility.6 OWNERSHIP PATTERN BOARD OF DIRECTORS SHRI ANEES FAZALBHOY CHAIRMAN MANAGING DIRECTOR GSSSIETW. simply and successfully as S. chiefly to Europe and the Middle East. Kumars globalization objectives. with an annual production capacity of 5 million miters. setup in association with Reid and Taylor. infrastructure development and Tyres. Growing global The last few years have seen a high degree of growth and diversification at S. thereby buttressing S. 2. Kumars and one of the major thrust areas has been globalization.MYSORE Page 18 . Scotland makers of the world’s most luxurious cloths for men’s accessories as also open boutique in the U. Information Tech services. corporate transparence and professionalism led by two generations of the Kasliwal family and professionally managed the group is a global player in textiles. makers of the world’s most preferred wool worsted suiting. Kumar. in pipeline are wool worsted and polyester/wool as a part of its effort to become world players in textiles. relating. ecommerce.A study of Inventory Management Philosophy that lays particulars emphasis on fair play. including home lines. the CIS and U.S. a small beginning was made with acquisition of strategic take in Reid and Taylor. with a growing presence in energy and power. Scotland. Kumars began exporting fabrics from India as far back as 1967 on today export a variety of fabrics. garments.S and Latin America. and is known popularly all over India. leisure. Dept of MBA . in addition the group has plans to make several strategic investments in textiles in Europe. S.

CHOUDHARY M. RAJE YOTHI N. Dept of MBA .MYSORE Page 19 . 2. HARIBHAKTI & CO.KASLIWAL DIRECTORS AUDITORS M/S.7 COMPETITORS INFORMATION To understand India’s position among the textile producing countries.KULKARNI DIRECTOR (NOMINEE OF IDBI) ANISH MODI DENYS FIRTH DIRECTOR (NOMINEE OF INDIA DEBT MANAGEMENT PRIVATE LIMITED) VIJAY KALANTRI MARTIN HENRY DARA D.H.K.S.. India’s share in global exports is only 3% (China GSSSIETW. Although the textile industry contributes 9% of GDP & 35% of foreign exchange earnings.K. it is necessary to look at its export rates in detail. KASLIWAL ANIL CHANNA DEPUTY MANAGING DIRECTOR A. AVARI COL.A study of Inventory Management NITHIN S.

India’s exports value $10billion. Raymond. While India is still concerned with its ‘fine tuning’ policy.1 Market Share of Different Domestic Companies in 2010 Percentage (In %) 51 21 9 5 5 2 7 100 Brands Raymond Reid & Taylor Digjam OCM Dinesh Grasim Others (BSL. It is believed that China is vacating the ‘commodity’ end comprising yarn & gray fabric. Domestic competitors with their fast moving brands 1. India is still in the phase of upgrading at the commodity end.) Total GSSSIETW. Indeed.A study of Inventory Management 13. an Indian textile delegation has scheduled a visit to China in March 2002 to scout for business opportunities in lower value intermediates.MYSORE Page 20 . OCM 4.75%). etc. Dept of MBA . Dig jam 3. China seems to have its sights on a more strategic dimension. with sizeable investments in value added processes. Meanwhile. J.. 2.Hamstede. in sharp contrast to China’s $77 billion. Expressed in US dollars. Grasim Table 1. Dinesh 5. & moving into high value processed fabrics.

A study of Inventory Management Table 1. 9. 4. Fly. Bobby Jones Tehama Cutter & Buck Tommy Bahama Eagle Dry Goods Tricots St Raphael Colonel Littleton American Alligator The Presidential collection Armani 10.MYSORE Page 21 . 2. Peards Gourmet 13. 8. 6. City Scarves 11. has been increasing from year to year. Enro 12. Grasim. 7. 3. GSSSIETW. 5. It has increased from 21% to 25% from the year International Competitors 1. Digjim) Total 2010 to 2011. Dinesh. Dept of MBA .2 Market Share of Different Domestic Companies in 2011 Percentage (In %) 60 25 15 100 The market share of Reid and Taylor brand Brands Raymond Reid & Taylor Others (OCM.

The man power recruitment for the plant is about 900 workers and 300 staff. 1. of 2.5.8 INFRASTRUCTURE FACILITIES About 40 acres of land purchased for the purpose of setting up a factory. covering an area of about 4 acres. Dept of MBA . 2. through a strategic association with James Bond. The total area covered for DG sets and Boilers about 3. Thanks to instant customer response and trade support the brand established itself as a leading player in the field. The GSSSIETW. The company is guarded 24 hours by 4 security supervisors and 32 guards.0 MW capacity. It was in this delicately poised environment that Reid and Taylor was launched.5 acres. Nielson). In 2002. The guards are supplied by a security agency from Mysore. The steam to be supplied by two oil fired boilers. The launch.T. Recent Developments Reid & Taylor manufactures suit lengths in 100s super fine merino fleece and superfine polyester.5.C. executive wears in 70s wool and polyester and other popular blends.C. rekindled excitement in the market. a study conducted by A. The worsted industry was then going through a phase of stagnation and was loaded with a number of established players. 2. The supply of electrical power from own DG house wherein 4 generator sets. 1. The effluent and the polluted water form out of the process to be treated in E. Nielson revealed that Reid and Taylor enjoyed a high recall (84%)and was in the top three with an ad recall of 52% (source A.A study of Inventory Management 2.MYSORE Page 22 . The production Block is occupying about 10 acres of the area. MW totaling 7.P.9 ACHIEVEMENTS/ AWARDS Reid and Taylor were launched in Indian in 1998.

VCDs and other gifts. Reid and Taylor become the second most remembered brand in unaided recall. is more adventurous. who was finally selected as the brand’s ambassador. Amitabh Bachchan. GSSSIETW. Also in certain non-metros the ‘sophistication’ parameter had led to Reid and Taylor being seen as an expressive suiting. ‘relevance’ and ‘empathy’ were lower than desired. Nielson to do a national study. However certain issues crept up.5. Specially developed for ceremonial wear is ‘Silk Ovation’. the company commissioned A. A best windows Display contest on the Bond theme was also held for retailers.A study of Inventory Management composition. While ‘aspiration’ scores were consistently high. The winners visited the locations of the film and lived in places where bond stayed. Within a year of launch. Immediately after the research. Leading fashion trends are ‘Crespo’ and ‘Jet set’ which are both high twist fabric qualities. had achieved a brand fit score 9. high – profile Indian personality.MYSORE Page 23 . Making the entire process more involving at the consumer level various promotions were held where buyers of Reid and Taylor received movie tickets. Dept of MBA . ‘Linen Kraft’ is a unique combination of linen with 10%polyester for the unruffled look. the company developed alternative solutions. To identify and address these.C. The James Bond film “the world is not enough”. These have been developed especially to cater to the vast number who wants a clean silhouette and shapely drape. too. Given the brand’s success in the past with James Bond it was felt that the brand needed a suitable.a 100% silk fabric. The winners went to Thailand for a holiday including a visit to James Bond Island.

But in fiber dyeing the fibers is make it is dyed in yarn dyeing the yarn is dyed in GSSSIETW.MYSORE Page 24 . There are 3 years of dyeing that is: • • • Top dyeing Fiber dyeing Yarn dyeing In top dyeing the raw material that is polyester and wool are dyed separately and then blended.10 WORK FLOW MODEL Dying Spinning Weaving Mending Finishing A) Dying The raw material what is got is usually white this has to be converted into different shades dyeing is the process by which the fibers will be dyed in different shades.A study of Inventory Management 2. Dept of MBA .

1/38. polyester and wool are blended in different percentage as required. Fabric is just interring placement of yarn or thread in called WARP or ends and transverse threads are called WEFT or picks. as soon as the wrap sheet opens one rapier brings weft in the center and the other rapier takes up the weft to the other end. One set of wrap is lifted and the other is kept down. B) Spinning Spinning is a process where raw materials (polyester and wool) are converted into yarn. The yarn are said to be twisted into ‘S’ or ‘Z’ twist depending upon the direction.A study of Inventory Management required color. 1/48. Clockwise direction of twist is ‘S’ twist and anti-clockwise of twist is Z twist. comprises of 3 different motions on the loom Primary motion GSSSIETW. The weaving process Shedding Opening of the wrap sheet. 1/32. which have to be separated individually and for this each thread is drawn through healed eye of the healed and all the healed together mounted on a shaft and there healed shafts can be mounted on loon where fabric is made. etc. 40/60 i. 1/80. 1/70.55/45. The spinning process comprises of three-sub process • • • Re-combining Spinning preparatory Spinning C) Weaving Fabric is the final main product and weaving is the process of converting yarn into fabric. The threads. Fibers are dyed in respective shades keeping in mind the required blend of fabric i. 1/60. There are different count spun like 1/24. the wrap sheets have to be lifted as per the weave to insert the weft. Dept of MBA .MYSORE Page 25 .e.e. Picking In section of weft through open sheet. 1/56. 65/35.

A study of Inventory Management

Beat-up Beating weft to the fall of the fabric as soon as the second rapier reaches and of the fabric, the reed pushes the weft in the direction of the previous weft and insures the weave of the required thickness. Secondly Motion Let off: release of wrap in a fabric the weft should be arranged uniformly they should not be too tight or loose. After picking the wrap should advance to accommodate the next pick. Take up: take a fabric on the roller. This motion corresponds to the wrap has to have the required tension on the loom. So when the let off motion takes place the fabric is taken up on the roller. Auxiliary Motion Wrap stop Motion When any of the ends break the machine stops the drop wire on the wrap drops and completes a circuit tripping the machine. Weft stops Motion The mended fabrics are sent finishing. This is the process by which the fabric attains its own handle; aesthetic feel comforts etc. for this different chemical heat treatment are given. First of all the fabrics will have protruding fibers. A process called SINGEING removes these. Then the fabric has to be washed to remove dust, stains, and tint and to make it clean. When the weft breaks the machine stops in case of ample the yarn is wrapped on a Suzuki machine. After the completion of wrapping, the beam is taken to the weaving section where it is drawn manually, it is then fixed on the loom and the sample fabric is woven.

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A study of Inventory Management

D) Mending
The purpose of the marketing department is to identify and mend the faults/defects encountered in the fabric after weaving. The fabric is inspected in detail on the tables by the menders and the fault if mendable is mended after this one more check is done on the fabric, on the grey perch to check for any mendable fault. From here the fabric is given to the finishing department.

E) Finishing
The mended fabrics are sent finishing. This is the process by which the fabric attains its own handle; aesthetic feel comforts etc. for this different chemical heat treatment are given. First of all the fabrics will have protruding fibers. A process called SINGEING removes these. Then the fabric has to be washed to remove dust, stains, and tint and to make it clean.

2.11 FUTURE GROWTH AND PROSPECTS
A bird’s eye view into distant horizons The future plans includes expansions of home linen and terry towel production jointly with an oversees company and the including of Denim, industrial fabrics knit wear in the groups products range, as well as garments and fine cotton fabrics. A special facility to produce fine cotton is planned to build near New Delhi.

3. McKENSY’S 7s FRAME WORK
The 7S framework has first appeared in the book “The Art of Japanese Management” by Richard Pascal and Antony Athos in 1981. The two authors were looking at how Japanese industry had been so successful, at around the same time Tom Peter and Robert waterman were exploring what made a company excellent. The 7S Model was born at a meeting of the four authors in 1978. It then appeared in the book “In search of Excellence” by Peters and Waterman in 1982. Subsequently, it was taken up as a basic tool by the Global Management Consultancy Company Mc Kinsey to diagnose the cause of GSSSIETW, Dept of MBA ,MYSORE Page 27

A study of Inventory Management organizational problems and to formulate programs for improvement, then on it became famous as Mc Kinsey 7S Model. The 7-S-Model is better known as McKinsey’s 7’S. This is because the two person who developed this model. TOM peter & Robert waterman have been consultants at McKinsey’s & Co at that time. They published their Books “The Art of Japanese management” and “In search of the difficulties of organization changes”. The model shows that the organizational immune systems and many interconnected variables involved makes change Complex and therefore an effective change effort must address many of these issues simultaneously.

What is 7-S-Model?
The seven-S are a framework for analyzing organization and their effectiveness. It looks at the seven key elements that make the organizations successful, or not. i.e., Structure, Skills, Style, Strategy, Systems, Staff & Shared values.

Work for Analyzing and improving organizations
“Seven-S” formula- A comprehensive guide is to analyze the Culture and Behavior of Corporations. Those seven elements are distinguished in so called hard S’s and soft S’s. The hard elements (green circles) are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documentations. The four soft S’s however, are hardly feasible. They are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. Therefore it is much more difficult to plan or to influence the characteristics of the soft elements. Although the soft factors are below the surface, they can have a great impact of the hard Structures, Strategies and Systems of the organization.

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the company is not really organized even if its structure looks right. They can be found in strategy statements. organizational charts and other documentation. so that the organization’s problems may be diagnosed and a strategy may be developed and implemented. corporate plans. The hard elements are feasible and easy to identity. The McKinsey 7-S frame work should be through of as a set of seven compasses. When they are not. When the needled are aligned.MYSORE Page 29 . Dept of MBA . Those seven elements are distinguished in so called hard S’s and soft S’s. the company is “Organized”.A study of Inventory Management A Systematic approach to improving organization: The 7-S Model is a tool for managerial analysis and action that provides a structure with which to consider a company as a whole. GSSSIETW.

MYSORE Page 30 . finishing. GSSSIETW. Mission. Purchasing departments are created separately which works independently. Customer oriented  Attracting and retaining customers  Uses non-traditional marketing strategy  Behavioral psychology  Used young population as strategic blessings  Movie centric promotions  Two time offers are provided in a year  More organized floors Employee oriented  Consider biggest assets  Employee welfare  Employee growth /training programs  The employee suggestion plan  Standardization of staff room  up gradation for education 2. For Reid & Taylor. Some of the strategies of Reid and Taylor as follow. Strategy: Strategies are the actions a company plans in response to or anticipation of changes in its external environment. Objectives. spinning. mending. For management Finance. Human Resource. Marketing. the divisions are dying. It also includes purposes. Dept of MBA . Style: The leadership style of Reid & Taylor is flat in nature. Goals and major action plans and polices.A study of Inventory Management 1. weaving.

A study of Inventory Management 3. divisional structure. matrix structure and network. The four basic structural forms are the functional form. Some of the structures of various departments of Reid and Taylor are as follows. Dept of MBA . Structure of Finance Department: Unit Head Head Commercial Commercial Manager I [Capital Equipment] Commercial Manager II [Coordination & License] Finance Manager [Accounts] Finance Manager [MIIS] Finance Manager [Costing] Finance Manager [Bank & Treasury] Finance Manager [Bill Passing] Finance Manager [Imports & Exports] GSSSIETW. Structure: In general structure is referred as the framework in which the activities of the organization’s members are coordinated.MYSORE Page 31 .

In order to maintain better quality there will be two sessions for continues improvement for the skill up gradation. Training and Development – it ensures people known how to work and stay update with the latest techniques.MYSORE Page 32 .A study of Inventory Management Quality Assurance Department: QA . Certain standard skills are required in employees in order to perform or carry out the company strategy. Main intension is continues improvement in products and processes. Following are the different skills. which the employee should possess at different levels of Organization: GSSSIETW. Skills: Skills refer to the fact that employees have the skills needed to carry out the company’s strategy.HEAD QQA Manager 3 EMS (Environmental Management Services) QMS Manager 4. Dept of MBA . Skills can be acquired by Experience. Reid & Taylor gives more stress on quality of the brands.

Cutting machine Setting. Technical Skills: Developed capacities used to Design. safety. Critical thinking. basic hydraulic. operation Monitoring and Analysis. Speaking. Programming. Selection. Persuasion. Regeneration process. supplier development. GSSSIETW. Trouble shooting and Technology Design. System Skills: Developed capacities used to understand. real-world settings for the purpose of Complex problem solving. Social Skills: Developed capacities used to Work with people to achieve Goals for the purpose of Coordination. Resource Management Skills: Developed capacities used to allocate resource efficiently for the purpose of Management of Financial. tank chemicals and its safely. Installation. set-up. Complex Problem solving Skills: Developed capacities used to solve illdefined problems in complex. Milling. ISO internal auditors course. monitor and improve socio-technical system for the purpose of Judgment and decision making. ISO documentation. housekeeping. service orientation and social perceptiveness. System analysis and Evaluation. Instructing. Heater Operation. Repairing. writing.MYSORE Page 33 . OFF THE JOB TRAINING: For Effective communication. safety about chemical. Dept of MBA . Personal and Material Resources and Time Management. Turning. handling storage and preservation. o o o o o Training: According to Flippo “Training is as act of increasing the knowledge and skills of an employee for doing a particular Job” ON THE JOB TRAINING: For Fire Fighting. operate and correct malfunctions involving Equipment Maintenance. Listening. Negotiation. Crane Operation. Grinding.A study of Inventory Management o Basic Skills: Developed capacities that facilitate learning and rapid acquisition of Knowledge for the purpose of Active learning. manufacturing strategy and communication skill.

compensation systems. management information systems and Capital allocation systems that govern everyday activity. performance evaluation systems. That the company has hired able people trained them well and assigned them to the right jobs. Dept of MBA . Systems: In general systems refer to “The formal and informal procedure. training & development systems. Shared values are also the identity by which an organization is known throughout its business areas. consisting of management information system. 6.MYSORE . Reward and Recognition. Training. Shared Values: Shared values are what engender Trust and link an organization together. cost accounting procedures. regulations and procedures both format and informal that complement the organization structure. and are classified by giving grades on the basis of the seniority and superiority in the company. 7. Staff: A STAFF MEANS a group or team formed to carry out a particular function or a task. some of the values that are shared by both the employees and the management at big bazaar are as follows • Product and service quality Page 34 GSSSIETW. This is done by the process of Selection. It includes all the processes and information flows that link the organization together. Motivation and assigning to appropriate work are all key issues. Thus. Here in the Reid & Taylor there are ‘’’’’’ permanent employees and ‘’’’’ temporary employees.A study of Inventory Management 5. planning & budgeting systems. including innovation systems. Systems in the 7S framework refer to all the rules. production planning and control systems. capital budgeting systems recruitment. Retention.

Dept of MBA . This reflects an important issue facing strategic managers should we invest more in our Strength’s to make them even stronger or should we invest in our weakness to make them competitive. Strengths         Vast textile production capacity Large pool of skilled and cheap work force Entrepreneurial skills Efficient multi-fiber raw material manufacturing capacity Large domestic market Enormous export potential Very low import content Flexible textile manufacturing systems Weaknesses GSSSIETW. Weakness. the particular capabilities and resources that a firm possesses and the superior way in which they are used.MYSORE Page 35 . SWOT analysis not only result in the identification of a corporation’s distinctive competencies. But also in the identification of opportunities. SWOT ANALYSIS SWOT analysis is the technique. Opportunity and threats.A study of Inventory Management • • • • • Productive efficiency Team work concept Customer satisfaction TPM (Total Productive Management) TQM (Total Quality Management) 4. the firm is not currently able to take advantage due to a lack of appropriate proven to be the most enduring analytical technique used in strategic management. which is used for identifying the company Strength.

 End-users respond to new ideas. Threats      Legislation could impact.  Profit margins will be good.  Could extend to overseas. GSSSIETW. Market demand very seasonal.A study of Inventory Management Increased global competition in the post 2005 trade regime under WTO Imports of cheap textiles from other Asian neighbors Use of outdated manufacturing technology Poor supply chain management Huge unorganized and decentralized sector High production cost with respect to other Asian competitors       Opportunities  Could develop new products.  Local competitors have poor products.MYSORE Page 36 . Environmental effects would favors larger competitors. Existing core business distribution risk. Dept of MBA . Retention of key staff critical.

094.69 6.A study of Inventory Management 5.47 94.34 122.212.242. Dept of MBA .12 31.2011 5.03.48 30.30 Sundry Debtors 48.869.04 11.646.51 173.26 2.038.436.863.65 31.69 NET CURRENT ASSETS (I)-(II) Total 107.472.279.14 14.503.33 INVESTMENTS E CURRENTS ASSETS.216.950. In Lakhs Particulars SOURCES OF FUNDS SHAREHOLDERS FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans DEFERRED TAX LIABILITIES(NET) Total APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation/Amortization Net Block Add: capital work in progress(including capital advances) DEFERRED TAX ASSETS(NET) Schedule A B C 5.56 21.242.848.33 100.65 122.366.88 Less: CURRENT LIABILITIES & G PROVISIONS Current Liabilities 6.013.46 .01 42.940.19 68.338.541.006.10 0. LOANS & F ADVANCES Inventories 28.10 15.99 0.258.15 119.826.392.087.240.31 3.030.37 Total (I) 163.402.383.49 GSSSIETW.822.191. ANALYSIS OF FINANCIAL STATEMENT BALANCE SHEET AS AT 31 MARCH 2011 ST Rs.46 6.75 8.594.2011 131.20 Provisions 13.45 Page 37 12.53 29.951.866.58 5.499.280.68 9.81 152.18 Cash and Bank Balance 7.03.91 143.46 D 11.203.869.MYSORE Total (II) 20.12 22.56 5.72 10.324.03 Loans and Advances 79.480.19 173.89 125.

260.15 71.123.02 83.98 109.MYSORE Page 38 .178.333.895.84 WEALTH TAX DEFERRED TAX ASSETS/(LIABILITIES) TAXATION FOR EARLIER YEARS PROFIT AVAILABLE FOR APPROPRIATION APPROPRIATIONS BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR BALANCE CARRIED OVER TO BALANCE SHEET 17.315.81) (1.885.707.84 GSSSIETW.628.34 3.98) (6.47 4.94 31.69 (11.212.64 37.841.78 5.25 856.11) (163.03.2011 31.89 1.40 49.02 1.49 10.20 ADMINISTRATIVE EXPENSES SELLING AND DISTRIBUTION EXPENSES RESTRUCTURED FINANCIAL COSTS AMORTISED J K L M N D TOTAL INTEREST AND FINANCIAL CHARGES DÉPRÉCATION / AMORTISATION PROFIT / (LOSS) BEFORE TAX PRIOR PERIOD (EXPENSES)/ INCOME PROVISION FOR TAX CURRENT TAX FRINGE BENEFIT TAX 60.887.171.192.377.293.73 21.35) (1.48 2.13 2.123.961.30 3.50) (67.338.593.746.05 219.63 65.77 38. Dept of MBA .442.A study of Inventory Management PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2011 AS AT 31 MARCH 2011 ST Rs.04 30.417.493.44 17.70) 14.68 2.29) (37.242.05) (51.88 2.712.36 115.020.898.87) (65.585.77 31.67 1. In Lakhs Particulars INCOME SALES AND SERVICES CHARGES OTHER INCOME Schedule 31.76 5.03.294.44 (21.817.70 7.43) 20.42 7.2010 H I T OTAL INCREASE / (DECREASE) IN STOCK EXPENDITURE RAW MATERIALS CONSUMED / FABRIC PURCHASE MANUFACTURING EXPENSES PERSONAL EXPENSES 98.144.73 4.64 EARNING PER SHARE BASIC DILUTED 38.17 29.112.

The standard of quick ratio is 1:1 considered as the fair indication and liquidity position of the business firm.50 : 1 0. The quick ratio of the company for the year 2010 is 8.A study of Inventory Management Ratio Analysis and interpretation Ratio Analysis is a technique of interpretation of financial statements of the company. Key Ratios Ratios Current Ratio Quick Ratio Debt Equity Ratio Fixed assets to Net worth Ratio Solvency Ratio 2011 8. Quick ratio indicates the ability of the firm to settle all its current obligations. In short current assets are asset which are converted in to cash within a year.16 : 1 6.06 : 1 0. The current ratio of the company for the year 2010 is 9. It expresses the relationship quick assets & current liabilities.MYSORE Page 39 .09 : 1 0.12 : 1 0. Current liabilities refer to all short term obligations which are required to be repaid with a period of 1 year. Current Ratio Ratio is the ratios which expresses the relationship between current assets – current liabilities.50:1 and for 2011 it is 6.047 : 1 0.16:1. Quick Ratio It affords the real test of the liquidity of the enterprise.12 : 1 2010 9. GSSSIETW.79 : 1 8.74:1. Dept of MBA .74 : 1 0.79:1 and for 2011 it is 8. 2. The analysis of the financial statement in the form of ratio indicates the financial strength and weakness of the company.09 : 1 1.

MYSORE Page 40 .12:1. staffing. Fixed Assets to Net worth Ratio This ratio is used to measure the efficiency of utilizing fixed assets. GSSSIETW. • I got to know how centralized structure is doing through others and with others work and things. The Management concepts were difficult to analyze. Dept of MBA . The debt equity ratio of the company for the year 2010 is 0. It is an index of the degree of production of creditors has the ratio less than the standard which indicates that there is a smaller claim of creditors.09:1 and for 2011 it is 0.047:1. • I came to know the importance of different management functions such as planning. The fixed assets turnover ratio of the company for the year 2010 is 0. This sensory impression guide in production units theoretical concepts. But. 6. 5. Solvency Ratio This ratio indicates the relationship between the total liabilities to outsiders to total assets of the firm. organizing. directing and controlling which guide the organization in facing stiff competition from competitors.09:1 and for 2011 it is 0. The solvency ratio of the company for the year 2010 is 0. 4.A study of Inventory Management 3. Debt Equity Ratio The debt equity ratio reflects the relative contributions of creditors and owners of business in its financing. LEARNING EXPERIENCE Project training created a sensory impression in my mind putting across what actually is an organization and how it operates to serve the public along with the fulfillment of their objectives.06:1. after plant training me felt empowered with confidence and understood different management concepts in pragmatic manner.12:1 and for 2011 it is 0.

the workflow model helps in organizing work by determining authority and responsibility for staff. I feel that in plant training has shaped my personal skill. talents.MYSORE Page 41 . At last. and how they are being utilized in optimum manner in achieving organization goals.A study of Inventory Management I understood the way in which. attitude etc. Also importance of human relations was known which help in getting things done through others. talent. • • The In-plant training helped me in knowing the importance of group effort when compared to individual effort in organization. • I also learned that how quality control and assurance guide the entire organization in providing quality brands to customer. • Through this training I was able to understand company is having sufficient number of employee/ workers with different skills. • I manage to know how information technology and various systems have reduced the time of an activity and documentation also. • I came across the importance of time management. which helps the entire organization in meeting delivery dates of customers. • I came to know how individual should be dynamic in corporate sector which guides in career planning and development. thereby improving loyalty from customer side. • I learnt the importance of leadership traits which guide in achieving personal as well as organization goals. PART-B GSSSIETW. abilities. attitudes etc. • The marketing department bridges the gap between organization and customer by various promotion tools as well as regular feedback from customers. that guide me in contributing to organization as well as nation by working efficiently and effectively. Dept of MBA . ability.

A firm may run without profits for some time but with no liquidity.L. they become problems if the organization is not able to manage inventory properly.MYSORE Page 42 . the problem of effective inventory control is now viewed as the most critical problem with changes in social climate.A study of Inventory Management GENERAL INTRODUCTION The necessity of effective inventory management is being increasingly realized in industrial and non-industrial organization both in India and abroad. While these can be great assets to the organization. inventory management directly assists in efficient functioning of the company. Liquidity and profitability are the two vital aspect of corporate business. the tree will take care of itself”. prompt maintenance of registrars. Severe contests GSSSIETW. IMPORTANCE OF THE STUDY Today. Idle materials are of a financial burden to the organization. Goel says “Take care of the forest. various methods and techniques can be adopted to control the inventory like. and fixation of various control levels and application of inventory control techniques and bin card system etc. In inventory management. This realization has come about because of increasing complexity of the task of managers and administrators. growth and continued existence of business are largely depends on competitive advantage. The proper inventory control system leads to an optimum utilization of Resources. In most organization. The risk of competitive advantage inside an increasingly global market place has forced firms to consider habits of improving the modern practices. proper raw material arrangement. Thus proper. Dept of MBA . which are relevant for inventory control in stores department. S. it should be the main motto of an inventory controller. the firm cannot run their business. That is why management of inventory is an integral part of corporate planning in business life. Any business cannot run without these two.

The effectiveness of the prevailed inventory system is analyzing simultaneously. customer expectations and technological advancement. The unforeseen fluctuation in demand and supply of goods also necessitates the need for inventory. In almost all the organizations the substantial part of capital is invested in inventories.A study of Inventory Management make it necessary to endlessly bring in new products and new design of products and this will lead to significant shorter existence series. The problem of competition is increasing in global market place. The purpose of inventory management is to ensure availability of materials in sufficient quality and quantity as and when required and also to minimize investment in inventories. Usually. Because of that every company will maintain a flexible manufacturing and distinction system. management of inventory becomes crucial to the successful management of overall working capital of a business enterprise. It will depend on how the company will respond to the fast changing market needs. The inventory ensures operational smoothness. Every enterprise needs inventory for smooth running of its activities. Thus it is very essential to have proper control and management of inventory. It also provides a cushion for future price fluctuations. STATEMENT OF THE PROBLEM: The problem selected to the analysis is “to study the effectiveness of inventory control system” at Reid and Taylor. Inventories play a vital role in operation of manufacturing industry. The literary meaning of the word “Inventory” is stock of goods. It has forced the firm to consider ways of improving the manufacturing practices. It serves as a link between production and distribution process. GSSSIETW. The variation of the prices of raw materials are also analyzing with their effects on the over all working of the unit. Hence. inventories constitute a major portion. Now a day every company will face the competition.MYSORE Page 43 . about 60% of total current assets. Dept of MBA . Inventory refers to stock of products a firm is having for manufacturing or for sale and also the components that make up the product.

MYSORE Page 44 . which often falls within financial area. Finally the study also tries to find out the correlation between Inventory Turnover Ratio and Return on Investment. The more popular of them are. obsolescence. saving in material cost. This objective of the project is to analysis existing practice of the inventory management. The project study is aimed to evaluate the inventory control system of Reid and Taylor Company. finished packaging. The financial manager is playing an important role in determining the nature performance of inventories. increased production and large profits. OBJECTIVES OF THE STUDY: I. wastage of materials. work-in progress. III. the term inventory includes Raw materials. II. OBJECTIVE 1: TO EVALUATE THE INVENTORY CONTROL SYSTEM OF REID AND TAYLOR COMPANY. deterioration. INVENTORY MANAGEMENT SYSTEM Meaning and Definition: Several authors have defined the term inventory. Dept of MBA .A study of Inventory Management The management of inventory is necessary for prevention of leakage. spoilage. It aims at improving material handling. to ascertain the inventory control methods adopted by the company and to identify the problems in managing inventory. with respect to ABC Inventory system that company follows. GSSSIETW. The inventory management is a part of planning budget. To know the efficiency of Inventory Management in Reid and Taylor Company. spares and others in order to meet an unexpected demand or distribution in the future.

Listed below are some of the main objectives of inventory management. the reference may be the stock of goods owned by an enterprise at a particular time. OBJECTIVES INVENTORY MANAGEMENT: The main objectives of inventory management are operational and financial.  To bring down the inventory carrying cost.  To maintain adequate accounting and understanding of inventory.  To avoid duplication in ordering or replenishing stocks. purchased for relate and others like tangible assets measured and counted in connection with financial records and accounting records. Dept of MBA .  To minimize losses through deterioration. goods in process of manufacturing.  To ensure right quality goods at reasonable price. pilferage. Inventory control techniques represent the operational aspect of inventory management and help realize the objectives of inventory management & control several techniques of inventory control are in use and it depends on the convenience of the firm to adopt any of the techniques.  To facilitate furnishing of data for short term and long term planning and control of inventory. merchandise.  To design proper organization for inventory management.A study of Inventory Management It can be used to refer to the stock of raw materials unhand at particulars. finished products. What should be stressed however is the need to cover all items of inventory GSSSIETW.MYSORE Page 45 .  To decide which item to stock and which item to procure on demand? TECHNIQUES OF INVENTORY CONTROL Inventory control techniques are employed by the inventory control organization.  To have stock available as and when required.  To facilitate purchasing economies.  To avoid both overstocking and under stocking of inventory. wastes and damages.

Economic order quantity (EOQ) 7. (SIM) GSSSIETW. thus with the ‘C’ group we may maintain some what. control (ABC) classification. Vital essential and designable (VED) classification. Dept of MBA . Fast-moving. 2. High. slow moving and non-moving (FSN) 6. Just in time. ABC analysis is often called the selective inventory control.MYSORE Page 46 . because of the low amounts in this area. Maximum minimum system. Always better. 8. frequent ordering expenditure etc. higher safety sticks order more months of supply except lower levels of customer service. 4. It is for this selective approach. Two-bin system. Logically we expect to maintain strong controls over the ‘H’ items taking whatever special actions needed to maintain availability of these items hold stocks at the lowest possible levels consistent with meeting demands. (JIT) ABC (Always better control) classification One of the widely used techniques for control of inventories is ABC always better control and analysis the objectives of ABC analysis is to very the expenses associated with maintaining appropriate control to the potential savings associated with a proper level of such control. 9. 3. Scarce difficult and easy to obtain (SDE) 5.A study of Inventory Management & all stages from the stage of receipt from suppliers to the stage of their use the techniques most commonly used are the following: 1. Materials requirements planning (MRP) 10. medium and low (HTML) classification..

The HML analysis is useful for keeping control over consumptions at department levels. VED (Vital Essential and Desirable) classification While in ABC classification. Hence ABC analysis is one of the best techniques of inventory control.  Quality. criticality of inventories is the basis for VED categorization.  Wastage. medium and low classification follow the same procedures as ‘1’ adopted in ABC classification only difference is that in HML classification unit value is the criterion and not the annual consumptions value the items of inventory should be listed in descending order of unit value and it is up to the management to fix limits for the three categories.  Scrap.  Price variance. Dept of MBA .  Inventory turnover etc. unit value is the basis. The VED analysis is done to determine the criticality of an item and GSSSIETW. HML CLASSIFICATIONS The high.. for deciding frequency of physical verification and for controlling purchases.  Usage variance.A study of Inventory Management ABC analysis enables to exercise selective control when the materials manager is confirmed with a large number of items.MYSORE Page 47 . The significance of this analysis is that it spot light attention to be given in respect of the areas like:  Loss. It also helps to determine safety stocks frequently of ordering preparing of control statements sources from which material is to be procured etc. inventories are classified on the basis of their consumption value and in HML analysis.

the Maruti Udyog Ltd. while for ‘D’ items. Rate of consumption during lead time. then it is given ‘D’ classification.A study of Inventory Management its effect on production and other services. There is no warehouse for the parts. If a Part is vital. virtually no inventories are held at any stage of production and the exact numbers of units are brought to each successive stages of production at the right time. Japan. ‘Zero inventories’. then it is given ‘E’ classification and if it is not so essential. The concept JIT was started in the ‘Motto Machi’ plant of Toyota Corporation. has adopted JIT. Just-In-Time (JIT): The concept JIT means that. Fixing the minimum and maximum limits of inventory In order to have proper check on the investment in inventory. For ‘V’ items. if it is essential.MYSORE Page 48 . it is necessary to fix the minimum and maximum limits of inventory so that there should be no over stocking of materials nor shortage of raw materials. As soon as one truck comes out from one end of the plant. It is specially used for classification of spare parts.. a. Dept of MBA . The plant has a long line of Trucks waiting outside with full load of automobile parts for the assembly line. a large stock of inventory is generally maintained. where the system has been perfected and results achieved. In India. It is also called. it is given ‘V’ classification. b. another truck gets inside. time. minimum stock is enough.e. Time lag between indenting and receiving of the raw materials i. the following two factors should be kept in mind. lead GSSSIETW. in fixing the levels of inventories.

an order of sufficient size is placed when a minimum point in inventory to the maximum point. The cost of ordering is considered to be independent of the order-size (but increases with the number of orders). Re-ordering level or ordering level It is a point [if material reaches at this point] where orders for fresh suppliers are placed with suppliers. This works out approximately to 20% of the unit price. 125/. 75/. Dept of MBA . The present ordering cost as followed at Reid & Taylor works out to be between Rs. the point is fixed somewhere in between the maximum and minimum point in such a way that the quantity available between the minimum level and this Point is sufficient to meet requirement of production upon the time fresh suppliers are received.per order.A study of Inventory Management Under this system. Cost of Inventory Carrying: This cost is measured as a percentage of the unit cost of the item. EOQ = √2 (Annual usage in units) (Order Cost)/ (Annual Carrying cost per unit) GSSSIETW. This measure therefore gives a basis for estimating what it actually costs a firm to carry stock. It is a quantity of inventory which can reasonably by ordered economically at a time.and Rs. in determining this point ordering cost and carrying costs are taken into consideration. The annual expenditure of the purchasing department of a company can be considered to be on the purchase orders it places during a year. past experience may help the fixing of minimum and maximum points in inventories. Re-ordering level = minimum level + [time in acquiring material * rate of Consumption] Economic order quantity EOQ is an important factor in controlling the inventory.MYSORE Page 49 .

EOQ for a Chalk Piece in Weaving Department √2*600*12/10 =122 Box 5.128 = 1922 Kg.4 =250 Numbers. EOQ for Nylon Bump Press Cord in Spinning Department GSSSIETW.006 = 154919 Numbers 4. Dept of MBA . EOQ for a Transfer Label in Packing Department √2*57600*125/. 7. 6. EOQ for Cello Tape in Packing Department √2*600*125/2.A study of Inventory Management 1. EOQ for Grease in Weaving Department is calculated as below: =√2*60*125/1 = 122 Kg 2. EOQ for a chemical known as HYSPIN EP 15 in Spinning Department = √2*2520*125/8 = 280 Liters 3.MYSORE Page 50 . EOQ for a ALUM in Utl Department √2*18000*125/1.

GSSSIETW. Two bin system Under this system all inventory items are grouped under two categories. Statistical inventory control system Statistical modes are used by some firms to find out their widely distribution system with the help of computers. a safety stock is maintained to meet the requirement of inventory times when sock in the first bin is exhausted and re-ordering occurs. lower cost non-critical item may require longer review cycle. a review of each item of inventory is made from time to time depending upon the critically of the item to have the predetermined level of inventories critical item may required a short review cycle and on the other hand. In the second group or bin.A study of Inventory Management √2*1200*125/56 = 73 Kg. at each review date. in the first group a sufficient supply is kept to meet the current requirement over a designed period of time. 8. it helps the management in taking the inventory management decisions. Dept of MBA . EOQ for Washing Powder in Spinning Department √ 2*240*125/3.5 = 131 Kg.MYSORE Page 51 . a required quantity of inventory is ordered to bring it to the pre-determined level. But this system is valid only in the sufficient information for cost comparison is available and the data has accurately been complied otherwise it is otherwise to find out the alternatives. Order cycling system In this system.

a. Minimum stock level is: Re –order level – [Normal consumption * Normal re-orders period. b. Various levels of materials: 1. The inventory budget is a plan for inventing funds in stock at regular intervals via raw materials. it serves the purpose of controlling cash and debtors. Minimum time required for delivery. These extra efforts have to be taken to expedite the supply. Danger level. 1. work in progress and finished stocks.A study of Inventory Management Budgetary control system Under this system. 3. 2. stock level is normally not allowed facing below this level. Nature of items of materials. Minimum stock level.MYSORE . Page 52 GSSSIETW.] The following factors are to be considered in fixing the minimum level. Fall 1 stock level below minimum level will indicate potential danger to this business. Dept of MBA . 4. Though budgets. Re-ordering level. inventory consumption and leaves are co-ordinates with the expected usage. This level of stock is buffer stock for use during emergencies. Maximum stock level. Minimum stock level: This represents the minimum quantity of stock that should be held at all times. inventory budgets are prepared and then compared with the actual consumptions figures.

Stock-out costs which include loss of contribution margin. Maximum Stock Level: Maximum level indicates maximum quantity of an item of material. Economic order quantity also affects the maximum level.A study of Inventory Management c. It is this level above which stocks are not allowed to rise. Re-order Level: It refers to the quantity to be purchased in a single purchase order. d. maximum level is calculated as: Re-order level + Re-order quantity * minimum consumption *minimum re-order period. Storage space available. It is nothing but economic order quantity. etc. Dept of MBA . Price advantage arising out of bulk purchase. In fixing minimum stock level the factors to the consider are: • • • • • • • Maximum requirement of the stock for production at any point of time. Available of funds.MYSORE Page 53 . Storage and insurance costs. 3. GSSSIETW. loss of goodwill 2. Rate of consumption of materials.

It facilitates cost allotting activities by producing a means for allocating material It enables management to make cost and consumption comparison between It serves as a means for identifying and disposal of inactive and obsolete items of stock-out and shortages and avoids costly interruptions in the operations.MYSORE . Major Dangers of Over-Investments in Inventory: ♦ ♦ Block of firm’s funds in Inventory. inventory carrying costs and obsolescence It facilitates economical purchasing through the measurement of requirement on the It eliminates duplication in ordering or in replenishing stocks by centralizing the It permits a better utilization of avoidable stocks by facilitating inter-department It provides a check against the loss of materials through carelessness or pilferage. sources from which purchase requisitions emanate. transfers within a company. Excessive carrying costs. GSSSIETW. losses to the minimum. Benefits of Inventory Management and Control: Proper management and control of inventories will result in the following benefits for the organization:♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ stores.A study of Inventory Management 4. Dept of MBA . operations and consumption comparison between operations and periods. Danger level: This level is fixed usually below the minimum level emergent purchase actions are initiated if stock below danger level.. basis of recorded experience. cost to production department or other operating accounts. ♦ Perpetual inventory values provide consistent and reliable basis for preparing financial statements. minimizes It keeps down investment in inventories. stores. etc. Page 54 Inventory control ensures an adequate supply of materials.

05 79217 54942 53296.56 6498.8 1493.8 13547. handling.84 Page 55 Amount 244799.2 12784.17 2747.2 111450 1131.29 8592.63 51552.6 GSSSIETW.54 14073 13582.34 18624.1 END NYLON BUMP PRESS CORD VALVE GUIDE 6050-19H 29 CONNECTING ROD BRG60601-15H TAPER BRUSH REED 21 DPI X 172 CM PINNING DEVICE COMP. The carrying cost such as the cost of storage.8 6 3 100 3 1 2 1 660 7 2 44 4 5 1150 Rate / Unit 10. recording and inspection also increases in proportion to the volume of inventory. The excessive level of inventories consumes the funds of the firm and cannot be used for any other purpose.55 3174.04 12784. Excessive inventories carried for a long period brings down the liquidity of the firm.58 1935. insurance.75 51864.07 15756.02 290.56 14262 14105.52 12996.SET NON RETURN VALVE 40 NB CONOCITY GERAR BOX WITH GUARD APRON 95X42X1.MYSORE .68 2290 9. OBJECTIVE 2: TO KNOW THE EFFICIENCY OF INVENTORY MANAGEMENT IN REID AND TAYLOR COMPANY.52 14262 7052.77 14073 20. WITH RESPECT TO ABC INVENTORY SYSTEM THAT COMPANY FOLLOWS.11 792.42 47270.95 258.1 14.401. Dept of MBA .55 38000 14569.85 380 4856.A study of Inventory Management ♦ ♦ Risk of Liquidity.1 SKI CYLINDER CDU6-30D CONVEYOR BELT 18450X110 DUMMY ROLLER WITH BUSH OB STACLE SENSOR DELIVERY HOSE 63 MM DIA SEPARATOR U/M NO NO NO NO NO NO KG NO NO NO NO SET NO NO NO NO NO NO NO NO NO Annual Consumption 23675 5 55 100 20 3565 200.5 93124 82121. ABC CLASSIFICATION OF R & T's Materials Name of the Item SUESSEN RING FRAME TUBE OPTIC ELECTRONIC SENSOR CONTACT ROLLER ASSLY SUESSEN ALUMINIUM LATERAL SUPPORT FINE FILTERS APRON 79.

88 5060.36 963248. Dept of MBA .55 Page 56 10561.6 5929.9 5310 5188.04 5054.99 Amount 10052.3 83.4 5131.97 490 441.47 4995.5 2669.68 2527.97 4900 4854.6 16.5 129.36 600 765 4527.53 117.47 30.78 4186.06 9313.78 42.46 4390.77 12.6 9381.13 5729.57 280 37.57 Total amount of "A" Items U/M NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO MTR MR NO NO MTR NO NO NO NO NO NO NO Annual Consumption 250 60 6 864 200 2 100 480 60 96 470 50 1 12 6 2 12 40 13.2 1686.5 9486.65 458.6 8360 8136 7815.1 END RING AS 0032-11 NON RETURN VALVE 25NB BEARING 627 NIZ APRON 79X36X1.51 10.27 100 101.05 898.65 5496.92 588.55 4995.11 1563.1 5856.6 10196 10107.96 4800 4590 4527.96 48 210.MYSORE .92 8556 8372.A study of Inventory Management CONVEYOR BELT 4505X150 PULLEY CORD WITH CLIP BEARING UN 3213 O-RING-60501 19H17 NO NO NO NO 1 10561.21 158.1 SKI CASTOR WHL RGBV/F/CT/125/R/TG BEAM BEARING BOLT HARNESS MAIL SLAY COATING-430478 INDG SAFETY START UP VALVE MS SUCTION BEND 919 PADESTAL PS 1910 THRUST PIECE(PIN) 6080109H-24 ALUMINIUM PULLEY WELDING CABLE 400A LIFTING TAP WITH STEEL WIRE 15 EMPTYES TUBE CONVEYOR SOLENOID VALVE PU TUBE 6MM X 4MM TOOTHED BBELT 16T5X2050 DB BEARING RSTO 6 MAGNET COIL 36 VOLT SAVIO DOFFER BRACKET VOLT METER O RING 61440-02H 04 RUBBER RING FOR TURBO PUMP GSSSIETW.95 130.46 1463.71 369.94 5027.9 3 2 165 1 10 11 8 6 1 3 Rate/Unit 40.5 5729.26 61.57 10435.65 Name of the Item PULLEY FOR PULLEY BLOCK CASTOR WHL RGBV/PT/CT/125/R/TG WEFT SCISSORY-3701 APRON 79X36X1.45 442.6 5391 5338.

25 3354.07 1779.42 14.36 4238.56 3618.3 216 532.A study of Inventory Management WEFT FEEDER SYMMETRICAL TUCK IN SCISSOR RHS FLANGE SUPPORT ALUMINIUM LIFTING TAPE 1300 x 20 x 2 TOOTHED 25 t 10 x 2500 FLEXIBLE HOSE 2" TUCKING NEEDLE RH GASKET 61202 29H 31 TEFLON STRIP 20X4X17L BEARING 6308 2ZR BURNER NOZZLE TOOTHED BELT 16T5X4250 OIL FILTER TUCK IN SCISSOR LHS LOCKING ELEMENT 328321 INDG TOOTHED BELT 32 AT 10X1360 BEARING 3306 2RS FRC LEVER ROTARY SHAFT SEAL 6150403H 16 O RING 540.64 1809.53 4000 3963.81 4000 3963.69 1163.25 1677.52 825 Amount 3210 3100 1790 1765.016 SPIRAL FLEXIBLE HOSE 4" SILICON CORD 16MM DIA SOLENOID VALVE VK 31205DO-M5 GILLBOX BRUSH NO ST NO NO NO MR NO NO NO NO ST NO NO NO NO NO NO NO NO NO NO NO NO NO 6 2 30 2 1 30 15 6 45 13 1 1 4 2 86 2 3 6 1 2 15.48 565. Dept of MBA .72 4238.11 1727.76 3618.4 4238.15 4128.1 728 2180.75 3450 3369.25 140 275.61 668.02 3559.48 1696.MYSORE Page 57 .5 6.65 3210 275214 1 3235.65 6 535 Total amount of "B" Items Annual Consumption 200 10 5 1 1 3 2 Name of the Item NYLON DUMMY RING WITH DERLIN B PVC HOSE 5" FLOW CONTROL SNF00025 CARBON RING 72X55X16 VS BELT 40X1325 COTS 55X75X245 WORM WHEEL U/M NO MR NO NO NO NO ST Rate/Unit 16.78 4050 4014.66 973.13 90 308.38 42.02 3235.38 3489.05 310 358 1765.25 575 3369.6 3348 3250.79 4368 4360 4244.11 1727.25 4200 4134.56 1650 GSSSIETW.66 3894.48 2119.

26 704.53 297. Dept of MBA .96 GSSSIETW.63 264.5 1641.28 975.39 1389.07 50.36 1500 1437.2 1616.89 1322 1300 1296.06 1191.92 462.4 650 432.A study of Inventory Management TENSION SPRING PNEUMATIC SLENOID VALVE BLOWER BUSH SAW BLADE VS BELT 40X1300 V BELT SPZ 1737 COVER-ALU BEARING 627 Z BEARING 6203 2RS O RING 61203-20H 29 GEAR SPINDLE TAPE 2440X 11MM METALIC GASKET 2MM STY 20 V BELT A-105 BEARING 6309 2ZR TUCK-IN NEEDLE LHS SAVIO ROLLER BEARING 6309 SPIRAL HOSE SPRING WITH NYLON KNOB CPL ECCENTRIC COVER WITH PIN WEFT RELEASER-BIG BEARING 3203 BEARING 6308 MINIATURE CYLINDER DOUBLE ACTI ROUND NUT-SUZUKI ALLEN SCREW M8X30 SPACER RING SETP NO.74 1641.7 1602.18 933.88 933.92 924.14 912.72 Page 58 1643.9 975 946.86 67.5 990.67 39.4 6 3 5 2 3 1 7 1 1 2 4 1 42 250 2 2 27 25 1 1 16 1 2 2 65.94 994.93 1189.45 1290 1260 1258.39 1359.72 1189.34 1389.17 15.03 498.82 704.75 1601.5 997.06 375 71.066 BEARING 6310 2ZR C3 TOOTHED BELT 16T 10X1010 NO NO NO NO NO NO NO NO NO NO NO KG NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO 25 1 10 75 1 6 4 20 21 2 2 87 9.25 36.91 253.91 1518.29 1248 1217.22 1408.52 1408.504 MS FLANGE 4" SLIDING PIECE-TEFLON YARN TENSIONER AS 0241-13 FILTER REGULARTOR WITHOUT GAUGE GEAR 43 T SUESSEN TEFLON STRIP 17X4XFT SHIFTING SEGMENT 03.29 1248 608.97 147.57 441.5 24 4.67 21.15 1290 180 1258.97 497.MYSORE .8 226.5 1008 1007.9 975 59.37 1601.42 1324.2 1424.2 161.09 982 975.

44 693.88 300 49.MYSORE .92 57.56 625 621 611.77 799.03 392.16 2.35 430.94 693.39 6.92 28.26 156.5X3 PLATE AS4250/12 BEARING 6311 BEARING 6210ZZ RUBBER DIAPHARM SS BALL VALVE 1/2" SEALING RING 61504-03H 29 BEARING 6302 2ZR COTS 55X75X295 V BELT B108 FRONT GUIDE GN 13750AP ALLEN BOLT M 6X30MM HEX BOLT M 6X30MM REAR GUIDE GN 13746 AM CAM LH GN 13609 AJ CAMRH GN 13610 AA FRONT BRAKE GN 13751 BEARING PULLER BEARING 6202 2ZR ROLLER LOCK PIECE-ALU BOLT &NUT NYLON BRAIDED HOSE PIPE 1/2" SPROCKET VALVE SEAT SPARE-100NB ROLLER CHAIN BEARING 6200 2ZR GEAR 24T SUESSEN VALVE SEAT SPARE -65NB SPIDER L-150 WIRE ROPE SEALING RING 61504-03H 28 DOWEL PIN NYLON SHEARING PIN 6MM TOOTHED BELT 6T 5X340 BEARING 6305 2RS NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO 18 7 164 23 1 2 3 2 3 1 3 2 8 1 2 4 100 300 4 4 4 4 2 12 78 200 20 1 1 10 10 1 1 9 1 2 31 200 5 3 129.78 743 243.07 152. Dept of MBA .98 152.44 693.44 314.44 628.94 525 521.18 86.82 7.92 603.96 749.6 575 574.36 703.11 550 549.92 450 446.88 450 223.47 GSSSIETW.5 2.18 87.25 14.52 693.96 436 434.5 438.5 752.5 255.52 600 597.5 376.49 Page 59 908.A study of Inventory Management GASKET 61202-29H 30 BEARING 6305 2ZR HYLAM PIECE 7X10X15 WASHER TOOTHED BELT 25T 10X1210 CARBON PLATE 44 X68.52 625.03 785 766.25 2.34 743 730.92 611.92 520.71 799.11 55 54.84 585 584 578.5 34.8 5.98 150.99 152.87 143.6 902 799.5 355.96 611.5 710.93 575 574.48 249.4 525 521.

34 175.31 353.3 38.82 420.43 Page 60 430.51 2.5 39.46 422.03 419 418.96 286.52 3. Dept of MBA .27 96.34 246.MYSORE .88 380 380 375 364.54 175.21 95.46 86.47 381.3 249.88 55.19 418.48 387.4 425 424.2 285.16 360 357.04 316 300 293.74 82.54 350.34 350 350 57.28 291.18 158.67 4.97 3.A study of Inventory Management V BELT B-78 SUESSEN BRACKET OIL SEAL 25X52X7 KEY KEY ROD HEX BOLT M M6X25 ENTRY GUDIE BEARING 6005 2RS NYLON BEARING CENTRING DISC 59-650-34 BEARING 6000 2RS BEARING 6201 2RS BEARING 6303 ZZ SS BALL VALVE 1" WATER FILTER ASSY SUESSEN EYE BOLT V BELT B59 CRC SPRING WORM GEAR GUN METAL GRINDING WHEEL 4" SPRING PB 14164 AJ REAR BRAKE LH GN 13748 AL REAR BRAKE RH GN 13749 AY TRAVERSE UNIT-SPOOL WINDING M/ TROLLEY PIN BEARING 6202 2RSR FALLER RING GC-15 OVER LOCK GODA PRESSURE GAUGE KGS/SQ.66 143.82 346 345 343 318 317.58 GSSSIETW.1 102.CM ALLEN SCREW M5X25 BEARING 6206 ZZ ALLEN SCREW M6X25 GUIDE BUSH ALLEN SCREW M5X40-243 O RING 2223406-33 BEARING 6205-ZZ DESOL WIK STRIPS ROUND BELT 723006 WASHER GN-2037 AN NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO 2 1 19 9 9 100 1 4 4 24 4 7 4 2 1 25 2 2 1 9 1 2 2 1 1 6 100 4 1 100 2 100 2 48 6 2 30 91 3 6 215.34 46.25 343 3.11 48.1 9.47 190 380 15 182.5 353.9 230.16 150 6.68 350.1 410.98 46.52 386.79 353.68 350 350 347.88 400 390.2 425 22.08 180 357.72 100 16.

7 151.88 125.94 62.84 0.05 197.MYSORE .07 198.82 1.3 135 135 125.6 165.38 190 189.04 150 150 150 148.01 26.06 222 213.34 187.6 135.1 213.93 Page 61 228.9 37.5 187.2 171.6 82. Dept of MBA .42 198.05 197.64 157.5 100 33.01 212.6 171.57 48.8 ACTUATING LEVER 218-610 SS WASHER M8 MS ELBOW 40 NB BEARING DL 4020 NO ML PCS NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO 6 20 1 8 2 4 2 6 1 1 2 1 1 5 750 2 2 1 1 2 83 4 4 4 15 1 6 1 3 1 1 3 2 2 1 1 1 30 3 1 38.25 168.5 98 190.76 10 150 25 148.24 212 210 200 198.01 11.38 190 37.8 135.84 37.25 168.2 187.57 145.36 151.67 93.84 37.A study of Inventory Management WOODEN STICK FOR BUMPRESS JOINT ADHESIVE R10 ENDLESS BELT 1050X12MM O RING 60801-09H 04 PIN GREASE GUN ADOPTER FRC CLUTCH LINER VOLKOLENE THRUST PAD ABS PULLEY 300X 40 X 45MM WELDING HOLDER 600 A OILSEAL 50 X 35 X10 BEARING 6208 Z WHEEL O RING 223406-36 WASHER M6 BEARING 624 ZZ BEARING DL 2516 RETAINING RING 61504-03H LONG DAMPER GN 16102AV BEARING 6004 ZZ HEX BOLT 6X16 O RING 223406-28 O RING 223406-29 O RING 223408-08 ALUMINIUM ADAPTOR DISTANCE BAR-INDO HANDLE BALL-STEEL V BELT B 49 TUBE CLEANING BRUSH 1 ¾ V BELT B 40 BEARING NA 4901 CLAMPING PIECE –AL CAM AS 0351-7 GUN METAL BUSH HYDRAULIC PIPE TEFLON WASHER 40X 25 X 3.3 66 65.5 196 190.25 93.57 125 75 71.14 125 75 71.3 135 45 62.93 GSSSIETW.53 106 52.21 22 65.76 2.76 66.36 151.

Dept of MBA .00 137607. In order to analyze the financial position of a company there are various tools and techniques. It is powerful tool of financial analysis used to diagnose the financial health of the firm.00 1376069.00 270.A study of Inventory Management OIL SEAL 22 X 40 X 7 SAND PAPER SHEET NO NO 2 2 Total of "C" Items 32.86 64 137607 Table 1. position and weakness of an enterprise and helps in concluding the exact financial position of concern.00 % of Items 10 20 70 100 Amount 963248. Ratio analysis is one of the techniques of analysis and interpretation of financial statement. Inventory Turnover ratio at Reid and Taylor Table 1.3 ABC Items of Reid and Taylor Classification A B C Total No.00 20. of Items 27. These are point or indicators of financial strength.00 10. one of the most popular way of analysis and interpretation of financial statement is “Ratio analysis”.99 % of Amount 70. soundness.43 32 64.00 189. Among them.MYSORE Page 62 .4 Inventory Turnover Ratios (Rs in Lakhs) Years Sales Average Inventory Ratio GSSSIETW.00 54.00 100 OBJECTIVE 3: TO FIND OUT THE CORRELATION BETWEEN INVENTORY TURNOVER RATIO AND RETURN ON INVESTMENT.99 275214.

Karnataka.145. The mode of selecting of the vendors.64 Times 9.99 7.199.435.01 Times SCOPE OF THE STUDY The scope of the study is extended to materials department in particular and purchases and stores department in general further the study confiner to the Reid and Taylor Company. So the study of purchase has vital roll to understand the efficient system of the company.34 98.98 Times 9. This study was mainly concentrated on inventory management adopted by the company.458.260.65 6.250.00 55.181.980.A study of Inventory Management 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 46.10 5.345.06 Times 12.72 5.493. Sources of Data The methodology followed for collecting information is based on GSSSIETW.74 10.62 Times 10.194. METHODOLOGY Location of the study The study has been conducted in Reid and Taylor a textile company located in Thandavapura Industrial Area.19 8.960.211. Nanjanagud Taluk.306.76 Times 9. managing the orders and further actions for satisfying the requirement are analyzed.MYSORE Page 63 . Mysore District. The company’s purchase procedure will influence more on the level of inventory of the company.25 57.60 Times 12.38 60.25 50. Dept of MBA .80 65.78 4.31 4.

stores department and other departments. is “personal Interview and Survey”. record of stock maintenance. So for information is collected through exploratory research design. sales and purchase records were analyzed to gather information. Annual reports of company 3. direct personal interview and discussion was made with different personnel of purchase departments. inventory records.A study of Inventory Management 1) Primary data 2) Secondary data Primary Data: The method which. There is no formal design or structured questionnaire is used in the study. In order to collect the information. Information needed to achieve the objective Different records in purchase department like. Different accounting records of the company 2. was adopted to collect the primary data.MYSORE Page 64 . it is bound to have certain limitations. Textbooks. Dept of MBA . The most prominent among them are  It was not possible to make a competitive analysis due to inability in getting information and data relating to other companies in textile Industry GSSSIETW. Internets and other case studies. Secondary Data: For gathering secondary data various other sources were used. LIMITATION OF THE STUDY The study has encountered following limitations as this is a study undertaken to fulfill the academic requirements. They are: 1.

tapes. The Inspection methods followed in the company. The procedure for processing the purchase order. Procedure for issuing Returnable and Non Returnable Gate Passes.  Physically goods are verified using weighbridges. Storing of old materials. Value Engineering.  As the study is purely for academic purpose the inexperience of the author make the analysis less processed when compared with the professional analysis. which are submitted to the Tax Offices. which helps to communicate the arrival of goods to the various departments. Preparing statutory forms. indicating quantity and delivery date.MYSORE Page 65 . measuring devices. and accounting. Generating reports on inventory. etc. How the materials are issued to each department. Arranging the purchase order in a chronological sequence. damaged materials.  A copy of Purchase order is sent to the stores. Determining Re-Ordering Level and Economic Order Quantity. Manager will prepare GRN. . Dept of MBA . SUMMARY OF FINDINGS  The Company is following a stores manual with which the stores manager-is being guided.  The stores manual contains: • • • • • • • • • • • The procedure for receiving materials. GSSSIETW. in order to maintain the confidentiality of certain aspects a few alterations have been made without hampering the authenticity of the data.A study of Inventory Management  Further. obsolete materials and scrap. Receiving the advice note from the supplier. How to classify the materials under ABC Classification.

GSSSIETW. Rest all 70 per cent of the items to cover just 10 per cent of the inventory may be classified as class C.000 types of materials in the stores. And maintaining Bin card. have been taken. Dept of MBA . HML Classifications.  The EOQ is calculated for almost all the materials used by the company for further production.  Inspecting the materials at the time of receiving.A study of Inventory Management  Damage / Discrepancy Note will be prepared if the goods are received in bad or damaged condition.  The company is following the FIFO method of stores accounting. which is 10 per cent of the total inventory sample selected for ABC Classification.  The ordering Cost for the materials is Rs. And the rest i. The ABC Classification is done in the following basis. 54 items covering 20 per cent of the total amount is classified as B items. Listing out 10 per cent of the items which covers 70 per cent of inventory and classify them as class A.  189 items are classified as C items.  For calculations purpose taken 270 items.  They are generating around Rs. out of which 27 items covering 70 per cent of the total amount is classified as 'A' items.  Company is using Tally software for keeping inventory record The Company has more than 8.e.  Manager has a responsibility of checking-of quantity of materials and ensures that the materials are received in time. According to the stores manager "stretch your hand at every point of time.125/ item. at any place and justify for your salary".  Issue of MIRN to control the outgoing of materials to various departments. And it will be sent back to the supplier.  For storing the materials under FSN. choosing appropriate sample.  The company has adopted periodic and continuous verification.  The ABC Classification is used in the company for control of inventory costs. ABC. Listing out remaining 20 per cent of the items to cover 20 per cent of the inventory value and call it as class B.5 Lakhs per month from sale of scrap.MYSORE Page 66 ..  The carrying cost is calculated at 20 per cent of the materials price.

the respective department heads whose materials are received will do the inspection for quality.A study of Inventory Management CONCLUSION AND RECOMMENDATION: CONCLUSION According to findings. The efficiency of stores manager is also depicted in the verification process followed by him. RECOMMENDATIONS  The company has calculated the EOQ three years ago. The inspection method followed by the store’s manager is effective because.e. It gives each and every information about receiving materials. And the rest i.5lakhs per month from the sale of scrap. storing them at the places nearer to their use. processing the purchase order. handling them. and for the quantity inspection the store’s manager is in charge. It is easy to manage things in stores for anyone using stores manual. The company is generating revenue around Rs. It is around 35 per cent of the gross working capital of the firm. which is 10 per cent of the total inventory sample selected. Ordering cost and carrying cost should be recalculated and then EOQ should be determined. Which will GSSSIETW. 189 items are classified as G items.MYSORE Page 67 . 54 items covering 20 per cent of the total amount is classify as B items. The plant has more than 8. damaged. 70% of the total amount is classified as 'A' items. So the store’s manager has got to have an eye accounting of scrap. shows the efficiency of the store’s manager. Inspection methods. stores manual plays a very important role in the organization. Stores should ensure availability of right materials in right place as per stock ledger during inventory checking by the statutory auditors. storing of old. obsolete and scrap materials in the plant.000 types of materials as inventory. Dept of MBA . The company's procedure for receiving materials.. ABC analysis for the company is as follows: out of 270 items selected out of which 27 items covering.

 The company is using Tally 6.3 as their inventory software package.000 types of materials.1 GSSSIETW. So the company may think of switching the software package for some indigenously built software. Tally is not a compatible software package for such a huge inventory. Improper coding of parts may result in incomplete investigations of more expensive parts. 1.  A review of the ABC Codes for the parts1 in stores should occur quarterly.MYSORE Page 68 . poor decisions on obsolescence and scrap. Dept of MBA . The plant is having around 8.1 Market share in 2010 Source: Table 1.A study of Inventory Management obviously help the stores manager in determining the order quantity and reorder level? This will help in reducing the cost of inventory handling in the stores. and fess than adequate lot size Graph no. improper storage.

A study of Inventory Management Graph no. 1.2 GSSSIETW. Dept of MBA .MYSORE Page 69 .2 Market share in 2011 Source : Table 1.

MYSORE Page 70 .A study of Inventory Management Chart 1.3 ABC Classification of Inventory system Source : Table 1. Dept of MBA .3 GSSSIETW.

A study of Inventory Management Chart 1.MYSORE Page 71 . Dept of MBA .4 GSSSIETW.4 Inventory Turnover Ratios Source :Table 1.

reidntaylors.google. www.com 4.com/…/ Reid and Taylor…/ 2. http://WWW.A study of Inventory Management BIBLIOGRAPHY Company Manual Company Annual Report Effective Inventory and Stores Management-Senior Officier in the Field WEBSITE: 1.com GSSSIETW.bondwiththebest.MYSORE Page 72 . www.com 3.Indiainfoline. Dept of MBA . www.

A study of Inventory Management GSSSIETW.MYSORE Page 73 . Dept of MBA .

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