A Project Report On “INVENTORY MANAGEMENT OF INDIAN OIL LTD” Submitted in the partial fulfillment for the Award of degree

of Master of Business Administration

Session: 2011-13

Submitted by: Vineet Soni MBA Sem. IV

Submitted to: Dr. Rthym Jain

SUBODH INSTITUTE OF MANAGEMENT AND CAREER STUDIES, JAIPUR B.R.SHAH MBA BLOCK

NEAR RAMBAGH CIRCLE, JAIPUR

CERTIFICATE FROM THE GUIDE

This is to certify that the project work done on “INVENTORY MANAGEMENT AT IOCL ,BARAUNI”, submitted to RTU UNIVERSITY KOTA by VINEET SONI partial fulfilment of the requirement for the award of degree of PG Diploma in Management, is a bonafide work carried out by her under my supervision and guidance.

Mr Mukesh Kumar Date: Accounts officer IOCL, Chaksu Senior

student of SUBHOD INSTITUTE OF MANAGEMENT & CARRER STUDIES JAIPUR here by solemnly declare that the project titled “INVENTORY MANAGEMNT AT IOCL is my original work and all the information. .DECLARATION I . facts and figures in this report are based on my own experience and study during my summer training procedures. VINEET SONI .

Yet I must record my immense gratitude to the brains and hands that worked overtime to support my efforts in making a near comprehensive report on a topic as broad as “INVENTORY MANAGEMENT AT IOCL ”. .Date: Place: VINEET SONI ACKNOWLEDGEMENT My indebtedness and gratitude to the individuals who have helped to shape this report in its present form cannot be adequately conveyed in just a few sentences.

Next in line I thank all the faculty members of Subhod Institute of Managment & Career Studies for apprising me of their specific requirements and the nuances of the system and helping me immensely with their phenomenal and participative responses during the interviews I had with them.I am highly obliged to Mr Mukesh Kumar (SACO) for giving me this opportunity to work on this challenging project and lending me their learning over the months and his continuous guidance in his capacity as my project guide. Iam also grateful to Mr Himanshu Shekhar (Accounts Officer). My Parents for their immense support and cooperation throughout. IOCL for his extraordinary support and guidance. Vineet Soni PREFACE . Last but not the least I am thankful to Almighty God.

It was a tremendous feeling to observe the working of Finance Department. Barauni. During my training I realized that in order to be a successful manager one needs to possess a sound theoretical base along with the acumen for effective practical application of the theory. It was overwhelming for us to notice how such a big refinery is being managed with proper co-ordination to obtain desired results. I was fortunate that I was provided with an opportunity of undergoing summer internship at INDIAN OIL CORPORATION Ltd. I hope that this summer internship will serve as a stepping-stone for me and will help me in being successful in future.. one of the leading refineries in India. Table of Contents .Summer Internship plays a vital role in the development of future managers. Thus. it also bridges the gap between theory and practical knowledge. The experience gained during this short period was fascinating to say the least. Not only does it provide insights about the organisation concerned.

Conclusion……………………………………………………..... 3.. Introduction of Industry…………………………………… 2......2 Duration of the Project………………………………. 3.. Appendix ...... 3. 4. 8. 3.... SWOT Analysis……………………………………………….... 3.... Data Analysis and Interpretation…………………………..... Introduction of Organization……………………………....... Research Methodology. 6. Facts and Findings…………………………………………..6 Scope of Study………………………………………… 3..1 Title of the Study……………………………………….3 Objectives of Study………………………………….7 Limitation of Study…………………………………….... 9. 7. Recommendations and Suggestions…………………….........1..5 Sample Size and method……………………………... 3. 5.... 3.......4 Type of Research used……………………………….

to the Far East. 1959: IndianOil Company is founded as a statutory body to supply oil products to government enterprises 1964: IndianRefineries andIndianOil Company merge to form the IndianOil Corporation 1965: „Indane' brand LPG launched for the first time in the country at Kolkata 1967: Haldia Barauni product pipeline commissioned. 1999-2000 turnover crossed Rs. Maiden export of petroleum products. . 1958: The government forms its own oil refining company. Bitumen and marine bunkering businesses commenced. the only Indian company to feature in the Fortune Global 500 list. it isranked 30th in term of sales and profits among the world's petroleum companies. 2001:IOCL also has the largest marketing network in the country 2002: The Indian Oil Corporation launched the country's first high-octane petrol and superior quality diesel 'IOC Premium' and 'SuperiorDiesel'.INTRODUCTION OF THE ORGANISATION Milestones 1948: Indian government passes the industrial policy resolution. IndianRefineries Limited. l. 1975: The world‟s highest altitude retail outlet commissioned at Leh in Ladakh 1995: Listing of equity shares on Bombay Stock Exchange 1998: Indian Oil is the largest commercial organization in India.000 crore – first corporate in India to do so. 00. which states that itsoil industry should be state owned and operated.

First LPG pipeline commissioned from Pan pat to Jalandhar 2011: Indian Oil breaks into Top 100 of Fortune Global listing.2005: Mathura Refinery becomes first Indian refinery to produce Euro-III compliant diesel 2008: Indian Oil Chairman elected as President of World LP Gas Association. ranked 98th HISTORIC MOMENTS 30th June 1959 the commencement of the golden journey .

1st September 1964 Indian Oil Company Limited renamed as Indian Oil Corporation Ltd. .

HISTORY Beginning of Petroleum Refining in India In 1881. Assam Railway & Trading co. They used . began laying of tracks in Assam.

crude oil distillate at Margherita. "Betch-still" used in Margherita RefineryUnit COMPANY HISTORY Beginning in 1959 as IndianOil Company Limited. one of the elephants wandered away. to come back with its feet smeared by slimy oil. Fig. 1958) . Backtracking led to the discovery of oil in Borbil near present day Digboi. One day. 16 Km away from Digboi. in cast iron pans. Digboi became the birth place of India‟s oil industry In 1890s.Digboi refinery is one of the oldest refineries in the world that is still working.elephants in place of cranes. IndianOil Corporation Limited was formed in 1964 with the merger of Indian Refineries Limited (Estd. called „Stills‟Digboi Refinery of Assam Oil Company (AOC) commissioned at its present location in 1901 with 500 bbl.A Canadian driller./day capacity AOC nationalised and its Refining and Marketing functions merged with IOC in October. Oil was struck and the name „Digboi‟ stuck. Willey Leove hollered at native boys. 1981. “Dig boy dig”.

In 1959. The government‟s 1948 industrial policy resolution declared the oil industry to be an area of the economy that should be reserved for state ownership and control. theIndianOil Company was founded as a statutory body.Wartime rationing lasted until 1950. stipulating that all new units should be government owned unless specifically authorized.Indian oil owes its origin to the Indian government‟s conflict with foreign oil companies in the period immediately following India‟s independence in 1947.the leaders of the newly independent state found that much of the country‟s oil in dustry was effectively in the hands of a private monopoly led by a combination of British owned oil companies Burmah and Shell and U. and a shortage of oil products continued until well after independence. it emerged as the nation‟s major marketing body for the export and import of oil and gas. After a 1961 price war with the foreign companies. . itsobjective was to supply oil products to Indian state enterprises .S At first.Then it was made responsible for the sale of the products of state refineries.

one of the most important of these trade pacts allowed Indian Oil to import oil from the USSR and Romania at price lower than those prevailing in world markets and to pay in local currency. India‟soil consumption continued to grow at 8% per year. greases. despite close links they remained separate A policy of state control was reinforced byIndia‟s closer economic and political links with the Soviet Union and its isolation from the mainstream of the western multinational capitalism. The refineries and the pipelines division had six refineries located at Guwahati. India‟s oldest. and transported petroleum products throughout India. The foreign companies were the ultimate losers because the government was persuaded. andIndian Oil expanded its capacity to about 150 million barrels of crude per annum.it was organized into three divisions. Mathura and Digboi. By the end of the 1980s. Bothcompanies grew vastly in size and sales volume but. lubricants. India and the USSR entered into a number of trade deals. It was widely expected that Indian Oil and India‟sOil and Natural Gas Commission(ONGC) would eventually be merged into a single state monopoly company. The division also laid and managed oil pipelines . thesix represented 45% of the country‟s refining capacity. In September 1964.Gujarat. base oil.Barauni.The oil companies undercut IndianOil‟s prices and left it with storage proble ms. Indian Refineries Limited and the Indian Oil Company were merged to form the Indian Oil Corporation .The government announced that all future refinery partnership would be required to sell their products through Indian Oil. Haldia. The government decided to nationalize the country‟s remaining refineries. and other petroleum products . formula products. Indian Oil then offered even lower prices. Together.in1989. rather than dollars or other convertible currencies. produced. IndianOil refined. Indian Oil announced plans to build a new refinery Para deep and modernize the Digboi refinery. Indian Oil produced crude oil. By the early 1990s.

Indian Oil management believed that the deregulation would bring lucrative opportunities to the company and would eventually allow it to become one of the top 100 companies on the Fortune 500. Nevertheless. IndianOil's vision is driven by a group of dynamic leaders who have made it a name to reckon with. In early 2002.the marketing division was responsible for storage and distribution and controlled about 60% of the total oil industry sales . 7445.the Assam oil division controlled the marketing and distribution of the formally British . 7. InApril of that year.25 billion. Indian Oil acquired IBP.744 crore and profit of Rs. India‟s flagship energy corporate. Indian Oil.48 crore for the year 2010-11. is India's largest company by sales with a turnover of Rs. ranked at the 98th position.During the first 45 days of deregulation. . a signal that the India‟s largest oil refinery would indeed face challenges as a result of the changes. a state owned petroleum marketing company.and in 2001 the company was ranked 209 and since then Indian Oil has maintained its position in the list with ever improving performance.As a result. COMPANY PROFILE Indian Oil Corporation Ltd. continued to lead the set of Indian companies in the prestigious Fortune Global 500 listing of the world‟s largest companies by sales for the year 2011 with an overall ranking of 98.owned company.Indian Oil‟s monopoly over crude imports ended as deregulation of the petroleum industry came into effect . The firm also purchased a 26 per cent stake in financially troubled Haldia Petrochemicals Ltd. 28. the company faced increased competition from large international firms as well as new domestic entrants to the market . Indian Oil lost Rs.. IndianOil is the highest ranked Indian company in the latest Fortune „Global 500‟ listings. 3.

. The company‟s operations arestrategically structured along business verticals . Having set upsubsidiaries in Sri Lanka. Mauritius and the United Arab Emirates (UAE). Marketing.Refineries. besidesglobalisation of its downstream operations. R&D and Business Development. Pipelines. To achieve the next level of growth. IndianOil and its subsidiaries have a dominant share of thepetroleum products market share. IndianOil is currently forgingahead on a well laid-out road map through vertical integration – upstream into oil exploration & production (E&P) anddownstream into petrochemicals and diversification intonatural gas marketing and alternative energy. With over a 34. IndianOil is simultaneously scouting for newbusiness opportunities in the energy markets of Asia and Africa. national refining capacityand the downstream sector pipelines capacity in India. IndianOil has been meeting India‟s energydemands for over five decades.000 -strong workforce.IndianOil is India‟s flagship national oil company. withbusiness interests straddling the entire hydrocarbonvalue chain and the highest ranked Indian corporate in theprestigious Fortune „Global 500‟ listing.

. In Exploration & Production. The IndianOil Group of companies owns and operates 10 ofIndia‟s 20 refineries and the largest network of crude oil andprofile product pipelinesin the country. IndianOil has entered into franchise agreements with severalCity Gas Distribution (CGD) players to market CompressedNatural Gas through its retail outlets. IndianOil iscurrently investing Rs. IndianOil has forayedinto alternative energy options such as wind. LPGas. backed for supplies by bulk storage terminalsand depots. successfullyservicing the needs of domestic and international flag carriers. pipeline transportation andalternative fuels.000 crore in a host of projects foraugmentation of refining and pipelines capacities. XTRAMILEdiesel. It conducts pioneering work in lubricantsformulation.private airlines and the Indian Defence Services. XTRAPREMIUM petrol. Iran.IndianOil‟s ISO 9002 certified Aviation Service commands adominant market share in aviation fuel business. SERVO lubricants. refinery processes. etc.With asteady aim of maintaining its position as a market leader andproviding best quality products and services. Gabon. IndianOil has beenawarded Project -1 in the Carabobo heavy oil region ofVenezuela. IndianOil‟s domestic portfolioincludes nine oil & gas blocks and two Coal Bed Methaneblocks while the overseas portfolio consist of nine blocksspread across Libya. as part of a consortium. 47. In addition.economical andenvironmentfriendlymanner. Timor-Leste andYemen. and is also the nodal agency of the Indianhydrocarbon sector for ushering in a Hydrogen fuel economyin the country. Nigeria. expansionof marketing infrastructure and product quality up gradation. It has a portfolio ofpowerful and much-loved energy brands that includes Indane. aviation fuel stations and LPGas bottling plants.meeting the vitalenergy needs ofthe consumers inan efficient. IndianOil has a sprawling world-class R&D Centre that isperhaps Asia‟s finest. IndianOil has a keen customer focus and a formidable networkof customer touch-points dotting the landscape across urbanand rural India.

Indian Oil has one of the largest captive plantations underway for bio-fuel production in Chhattisgarh and Madhya Pradesh. The Corporation is already on the way to becoming a major player in petrochemicals by integrating its core refining business with petrochemical activities. besides making large investments in E&P and import/marketing ventures for oil and gas in India and abroad NAME BUSINESS Chennai Petroleum Corporation Limited Refining of petroleum products . meeting the energy needs of millions of people every day across the length and breadth of the country. A wind power project is currently operationalin the Kutch district of Gujarat while a solar power initiative is being spearheaded on a pilot basis in Orissa. The Corporation takes pride units continuous investments in innovative technologies and solutions for a sustainable energy flow and economic growth and in developing technoeconomically viable and environment-friendly products & services for the benefit of its consumers GROUP COMPANIES Indian Oil is currently metamorphosing from a pure sectorial company with dominance in downstream in India to a vertically integrated.solar. As a leading public sector enterprise of India. traversing a diversity of cultures. difficult terrains and harsh climatic conditions. transnational energy behemoth. Indian Oil has successfully combined its corporate social responsibility agenda with its business offerings. Karnataka and the Northeast. bio-fuelsand nuclear power.

Retailing & Aviation refuelling Lanka IOC PLC.CREDA Biofuels Limited Plantation of Atrophy and extraction of oil for Bio-diesel . Terminal ling. Retailing. Terminal ling& Bunkering IOC Middle East FZE Lube blending & marketing of petroleum products Indian Oil .OBJECTIVES Indian Oil (Mauritius) Ltd.

product formulations.  To enhance the country's self-sufficiency in crude oil refining and build expertise in lying of crude oil and petroleum product pipelines.  To create a strong research & development base in refinery processes. transportation and marketing activities and to provide appropriate assistance to consumers to conserve and use petroleum products efficiently. To serve the national interests in oil and related sectors in accordance and consistent with Government policies.  To optimise utilisation of refining capacity and maximize distillate yield and gross refining margin.  To further enhance marketing infrastructure and reseller network for providing assured service to customers throughout the country.  To maximise utilisation of the existing facilities for improving efficiency and increasing productivity. pipeline transportation and alternative fuels with a view to minimizing/eliminating imports and to have next generation products.  To minimise fuel consumption and hydrocarbon loss in refineries .  To ensure maintenance of continuous and smooth supplies of petroleum products by way of crude oil refining.

 To inculcate strong „core values‟ among the employees and continuously update skill sets for full exploitation of the new business opportunities. integration and diversification by harnessing new business opportunities in oil exploration & production. acquisitions.  To earn a reasonable rate of return on investment.and stock loss in marketing operations to effect energy conservation.  To avail of all viable opportunities.  To develop operational synergies with subsidiaries and joint ventures and continuously engage across the hydrocarbon value chain for the benefit of society at large. both national and global. arising out of the Government of India‟s policy of liberalisation and reforms.  To achieve higher growth through mergers. . petrochemicals. natural gas and downstream opportunities overseas.

To have fair dealings with recognised representatives of employees in pursuance of healthy industrial relations practices and sound personnel policies. Towards community: . courteous and efficient service and quality products at competitive prices.To ensure prompt dealings with integrity.To develop their capabilities and facilitate their advancement through appropriate training and career planning.To develop techno-economically viable .OBLIGATIONS Towards customers and dealers: . Towards suppliers: . Towards employees: .To provide prompt. impartiality and courtesy and help promote ancillary industries.

To ensure maximum economy in expenditure. To maintain the highest standards in respect of safety. Towards Defence Services:.and environment-friendly products. without budgetary support.To maintain adequate supplies to Defence and other Para-military services during normal as well as emergency situations FINANCIAL OBJECTIVES To ensure adequate return on the capital employed and maintain a reasonable annual dividend on equity capital. To develop long-term corporate plans to provide for adequate growth of the Corporation‟s business. To reduce the cost of production of petroleum products by means of systematic cost control measures and thereby sustain market . To manage and operate all facilities in an efficient manner so as to generate adequate internal resources to meet revenue cost and requirements for project investment. environment protection and occupational health at all production units.

Panipat Refinery Panipat -132 140 (Haryana) . G-9. Mumbai -400 051 Corporate Office Pipelines Division Head Office Northern Region A-1 Udyog Marg.leadership through cost competitiveness. Bandra (East). Ali Yavar Jung Marg. Noida-201301(Uttar Pradesh) P. To complete all planned projects within the scheduled time and approved cost IndianOil Major Units Registered Office Registered Office IndianOil Bhavan.O. Sector-1.

Nungambakkam High Road Chennai . Begusarai -861 114 (Bihar) P. Jawahar Nagar. Vadodara -391 320(Gujarat) P. Lodhi Road New Delhi -110003 P.O. Haldia Dist.Bedipara. Barauni Refinery. Lee Road.O. Dist. Institutional Area. Midnapur-721 (West Bengal) Noonmati.Western Region Southern Region Eastern Region P. Barauni Refinery Gujarat Refinery Guwahati Refinery Haldia Refinery Refinery 606 . Core-2 7. Guwahati-781020 (Assam) P. Box 1007.O. Morvi Road. Dist. Kolkata-700020 Refineries Division Head Office SCOPE Complex. Rajkot-360 003 (Gujarat) 139.600034 14.O.O.Gauridad.

Kolkata -700 068 Bhavan. Dhaligaon. -281 005 Panipat Refinery Bongaigaon Refinery P.Mathura Refinery P.783 385 Marketing Division Head Office IndianOil G-9. Northern Region Bhavan. Annie Besant Worli Colony. Yusuf Sarai Eastern Region South Bhavan. Mumbai -400 030 IndianOil 139.O. Mumbai -400 051 IndianOil 1. Dist. Mathura (Uttar Pradesh) Mathura Refinery.O. Panipat Panipat-132140(Haryana) Refinery. Marg.O. Assam . Aurobindo Marg. Bhavan Road . Ali Yavar Jung Bandra (East). Nungambakkam Chennai -600034 High Road. Chirang. New Delhi -110016 IndianOil 2. Dr. Gariahat Road. P. (Dhakuria) Western Region Southern Region 254-C.

West Tower.R&D Centre R&D Centre Sector 13 Faridabad -121 007 (Haryana) Assam Oil Division Assam Oil Division IBP Division IBP Division 34-A. Teynampet. P. Jebel Ali Free Zone. P. Sri Lanka.12 114.01. LOB. (Assam) Digboi -768 171 Group Companies Chennai Petroleum Corporation536. Mer Port Mauritius Rouge Louis Lanka IOC PLC Lanka IOC Head Office Level 20.600 018 IndianOil (Mauritius) Ltd. World Trade Centre.Box: 261338 IOC Middle East FZE .O. Ltd. Echelon Square.O. Nirmal Kolkata .700 013 Chandra Street. Chennai . Colombo . Anna Salai.

Crude Oil . 9. 4. 13. 10. 2. 11. 6. Indane Gas Auto Gas some major products are as follows Natural Gas Petrol/Gasoline Diesel/Gas oil ATF/Jet Fuel SERVO lubricants & greases Marine Fuels & Lubricants Kerosene Bulk/Industrial Fuels Bitumen Petrochemicals Special Products such as carbon black feedstock sulphur. 1. 7. etc. 5. 8. 12.IndianOil Limited - CREDA Biofuels MAJOR PRODUCTS Indian Oil Corporation Limited is responsible manufacturing many products. 3. 14.

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