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“Inventory Management through SAP”

I, …………….of PGDBM-I, the bonafide student of G D Goenka World Institute, declare that the report is my ori inal !ork prepared as part of the institutional trainin of Master"s de ree under the uidance of ……………

Date # $% &u ust '($) PGDBM-I


I e*press my sincere ratitude to Mr. +andeep Mathur, General Mana er for rantin me the permission to do the +ummer Internship Pro,ect in this most prime and presti ious or ani-ation of the country. My heartfelt and sincere thanks to the Ms .isha /aank !ho uided me in each step of the pro,ect by pro0idin ade1uate data and 0aluable su estions in spite of their busy schedule. I"m also e*tremely thankful to the other officers of &ccounts Departments !ho ha0e pro0ided appropriate uidance and support !hich enabled me to complete the pro,ect successfully. I"m rateful to all the people and staff of the 2r ani-ation !ho directly or indirectly contributed to the successful completion of the pro,ect.


 3ompany profile • &bout 3ompany • 4a0ells India 5td. • 4a0ells +ahibabad Plant  &im and 2b,ecti0e  Introduction /o /opic# In0entory Mana ement throu h +&P  Introduction to +&P  Inte rated In0entory mana ement system  +&P 67) +ystem  5o istic procedure  Detailed +&P understandin  3onclusion  5earnin "s  Biblio raphy

A(out the company )R$ Group, a billion-dollar-plus roup, !hich ranks on top electric product in the !orlds and is a ma,or domestic and lobal player in the production and sales of an impressi0e ran e of electrical products. /his roup comprises of % companies • 4a0ells India 5td 8the fla ship company !ith 4a0ells and 3rabtree Brands9, • +tandard :lectricals 5td, 4a0ells-+yl0ania and • ;6G 4ealthcare. /his roup has achie0ed a rapid success in the past fe! years, !ith establishment of $< state-of-the-art manufacturin plants, <$ branch offices and a stron backin of o0er =((( professionals across the lobe. 4a0ells, the fla ship company, is ackno!led ed as a manufacturer > supplier of the !idest ran e of lo! 0olta e electrical e1uipment and has become a name synonymous !ith e*cellence and e*pertise in the electronic industry. Dri0en by a philosophy of dreamin bi , empo!erin team members, a culture based on transparency, honesty, a hi h focus on ethical 0alues and entrepreneurship at e0ery le0el, the ;6G Group of today is literally a dream come true-a !orld class company !hich is one of the most admired or ani-ations in India. With a number of strate ic alliances in place, ;6G Group has sho!n phenomenal ro!th rate !ith the help of 0arious ,oint 0entures, ac1uisitions, mer ers and takeo0ers. /he roup, caterin to the needs of residential and industrial market lobally, has $( manufacturin units in India.

HA*E!!S INDIA !TD In $<=), 4a0ells India !as incorporated. It is a billion-dollar company !hich is one of the lar est > India"s fastest ro!in electrical and po!er distribution e1uipment manufacturer. Its products ran es from Industrial > Domestic 3ircuit Protection +!itch ear, 3ables > Wires, Motors, Water 4eaters, ?ans, Po!er 3apacitors, 3?5 5amps, 5uminaires for Domestic, 3ommercial > Industrial applications and Modular +!itches that co0ers the entire amut of household, commercial and industrial electrical needs. 4a0ells o!ns most of the presti ious lobal brands like 3rabtree, +yl0ania, 3oncord, 5umiance > 5inolite. With <% branches 7 representati0e offices and o0er @((( professionals in o0er @( countries across the lobe, the roup has achie0ed rapid success in the past fe! years. It has $' state-of-the-art manufacturin units in India located at 4arid!ar, Baddi, .oida, ?aridabad, &l!ar, .eemrana, and A state-of-the-art manufacturin plants located across :urope, 5atin &merica > &frica churn out lobally acclaimed products. Presently, 4a0ells is a name synonymous !ith e*cellence and e*pertise in the electrical industry. Its '(,((( stron lobal distribution net!ork is prompt to ser0ice customers. /he essence of 4a0ells success lies in the e*pertise of its fine team of professionals, stron relationships !ith associates and the ability to adapt 1uickly and efficiently, !ith the 0ision to al!ays think ahead. *+,+on/o be a lobally reco ni-ed corporation that pro0ides best electrical > li htin solutions, deli0ered by best-in-class people. M+,,+on/o achie0e our 0ision throu h fairness, business ethics, lobal reach, technolo ical e*pertise, buildin lon term relationships !ith all our

associates, customers, partners, and employees *a.ue,3ustomer Deli ht# & commitment to surpassin our customer e*pectation. 5eadership by e*ample. & commitment to set standards in our business and transactions based on mutual trust. Inte rity and /ransparency# & commitment to be ethical, sincere and open in our dealin s. Pursuit of :*cellence # & commitment to stri0e relentlessly, to constantly impro0e oursel0es, our teams, our ser0ices and products so as to become the best in class

HA*E!!S SAHI%A%AD P!ANT In $<<(, 4a0ells India e*panded its s!itch ear manufacturin operations by settin up an additional plant at +ahibabad, so as to cater both domestic and international markets. Presently, this plant is one of the lar est manufacturin industrial s!itch ear plant in north India !ith all comprehensi0e in-house toolin and testin facilities. It is also one of the most modern Industrial manufacturin plant in country today !hich is spread o0er $(.@( acre area. /he main product portfolio in 4a0ells +ahibabad products are# • &ir 3ircuit Breaker 8&3B9, • Moulded 3ase 3ircuit Breaker 8M33B9, • 3ontrol ear 6an e • 3apacitor • 5oad bank

HA*E!!S Pro/uct, +n mar0et
• Building Circuit Protection o Miniature Circuit Breaker (MCB) o Isolator o Changeover Switch o Residual Current Circuit Breaker (RCCB) o RCBO o Distribution Board (DB) o Indicator Light • Industrial Circuit Protection o ir Circuit Breaker o MCCB o !anel Board s"ste# o Changeover Switch o B"$%ass Changeover Switch o Load Changeover Switch o uto#atic &rans'er Switch o Switch Disconnector o Control (ear o Switch Disconnector )use o )use Switch and Switch )use o Cha#ber S"ste# o )use *older o +"lon )use Base o )use Link and )use Base • Motors o )oot Mounting o )lange Motor o )oot Cu# )lange o Inverter Dut" Motors with )orced Cooling o Crane Dut" Motors o Brake Motors • Capacitors o +or#al Dut" o *eav" Dut" o Su%er *eav" Dut" o griculture Dut" o Motor Run Ca%acitors • Modular Plate Switches o *avells Modular Switches o Crabtree Modular Switches • Lighting o L,D Lighting o Consu#er Lighting o Co##ercial Lighting o Down Lighter o Landsca%e - Bunker Lighting o Industrial Lighting o rea Lighting o Road Lighting o S%ecialt" La#%s o ccessories o ura Lighting • CFL o Retro'it o +on Retro'it o *igher Range o Lili%ut o )!L • Water Heater o Instantaneous .ater *eater o ,lectric Storage .ater *eater • Fans o Ceiling )ans o &able )ans o .all Mounting )ans o !edestal )ans o ir Circulator )ans o /entilating )ans • Cables and Wires o !ower Cables - lu#inu# o Control Cables - Co%%er o Co%%er )le0ible Cables •Domestic Appliances • Digital Dimming • Manu acturing !nits

With these basic ob,ecti0es in mind I started my internship at 4&B:55+ C a leadin :lectronics company in I.DI& on pro,ect topic DIn0entory mana ement throu h +&PE $9 /o et familiar !ith the corporate structure and e*perience the onfield problems !hich may include problems related to finance, manufacturin problems, and lo istics and in0entory issues. '9 /o apply the kno!led e I ained in the past one year to sol0e the company"s daily problems and pro0e to be of 0alue. )9 /o understand ho! bi companies like 4a0ells !ork and operate, and !hat thin s they need to do daily in order to make e0erythin streamlined makin no chance for delay or resource !aste. %9 /o understand lo istics of the company from the point of manufacturin to the sales. @9 /o kno! about the in0entory mana ement daily operations and the tools 8soft!are-+&P9 they used to make the !hole process efficient. A9 /o kno! !hat a company does for the satisfaction and retention of its employees !hich may include pro0idin them 0arious employee benefits, o0ertime salary, the cut off in salary for issues like lea0es and late attendance, ho! they deal !ith it and make sure that such thin s not repeat in future. &lso ho! they create a company culture and moti0ate e0eryone to i0e them their best. F9 /o also et a!are about the other departments of the company and ho! do they co-ordinate !ith each other and !ork as a team. =9 /o understand ho! a company like 4a0ells maintains standards related to manufacturin and 0arious other departments includin human resources recruitment to maintain their 0alue and brand name in the market. <9 /o kno! !hat a company does to remain ahead of their competition, !hat techni1ues or backup plans do they apply in cases of emer ency or crisis. $(9 /o kno! !hat marketin options do a company like 4a0ells applies to make customer a!are of their product and also sho!case their product better than their competitions.

“Inventory Management” Inventory management or +nventory contro. /ea., 2+th the company +nventory re3u+rement, an/ nee/, +n or/er to m+n+m+4e the co,t re,u.t+ng 5rom ho./+ng or o(ta+n+ng +nventory6 What is in0entoryG In0entory refers to list of oods or materials that is a0ailable in stock to a company. It can be classified in different !ays like# ra! material, oods in transit, finished ood, spares or maintenance, repair and operation supplies. & companyHs in0entory is one of its ma,or assets and it also represents company"s in0estment !hich is locked up until the product is sold in the market or used in the production of the product !hich is bein sold. 4u e costs are in0ol0ed in storin , trackin and insurin of in0entory. /herefore, it is necessary for e0ery mana ement to ha0e proper in0entory mana ement in its system, !ith due attention. In0entory Mana ement includes proper plannin of purchasin , storin , handlin , and accountin of in0entory. It is an effecti0e system that determines !hat to purchase, ho! to purchase, from !here to purchase, !here to store etc. Manly times there are conflicts bet!een departmental heads like finance department and production department o0er the issue of in0entory. &nd any mismana ement of in0entory can create a ma,or financial problem to the company. +o there is a need to ha0e an inte rated in0entory mana ement system !ithin e0ery company to ha0e a proper record and mana ement of in0entories. In0entory mana ement helps in ensurin the supply of material, so that the production does not suffer and customer demand could be met. It a0oids under stockin or o0er stockin of in0entory. It minimi-es in0entory in0estment by keepin check on operational and sales acti0ities. /hus, in0entory mana ement system facilitates proper plannin and control of in0entory. ?or a bi manufacturin 3ompanies like 4a0ells, it becomes 0ery complicated to manually mana e and efficiently utili-e its ood and material. 6eali-in this +&P :nterprise 6esource Plannin soft!are is introduced in company lo istic system that centrali-es the mana ement of stock. &ll the acti0ities of lo istic are handled throu h +&P +oft!are in 4a0ells, !hich is discussed further.

+&P is :nterprise 6esource Plannin soft!are de0eloped for lar e manufacturin companies that handles e0erythin from people oriented task to material oriented task. /his soft!are !as introduced in the market in $<F' for all industry sectors. 5ater in $<F<, +&P released its mainframe product called 67' and in $<<' it came up !ith 67) !ith !hich +&P became the old standard of :6P soft!are. Presently it is the third lar est soft!are supplier in the !orld. With +&P soft!are, process like ◦ 3ustomer 6elationship Mana ement ◦ +upply 3hain Mana ement ◦ Product 5ifestyle Mana ement and ◦ +upplier 6elationship Mana ement are easily mana ed. It i0es solution to its costumers !hich enable them to further ad0ance and impro0e industry practices. It pro0ides competiti0e ad0anta e to companies in dynamic market conditions. In +&P there are many lo istics function components !hich help in mana in key lo istics acti0ities such as# • Production Plannin 8PP9 C this component helps in mana in companyHs production process. Its function is plannin company production, material re1uirement plannin 8M6P9, and preparin master production schedule 8MP+9. • Materials Mana ement 8MM9 C this component is the basic foundation for lo istics, it includes all information about the material used in the company. It includes in0entory mo0ements, purchasin , material file and accounts payable. • +ales and Distribution 8+D9 C this component function includes pricin , packin , and shippin . It co0ers the !hole process from recei0in an order from costumer to its deli0ery. • ;uality Mana ement 8;M9 C this component function is to look after the 1uality of purchased and finished ood. It ensures proper inspection of the 1uality of companyHs product. • Plant Maintenance 8PM9 C this component function is to focuses on plannin and maintenance of all tools and e1uipment that are used in production process of the companyHs finished product. • 3ustomer +er0ice 83+9 C this component looks after the ser0ices !hich are pro0ided to the customers like for repairs and !arranties. &ny

finished product sold !ith !arranties, and then this +&P component !ill help in repair of product !ith full efficiency. • Warehouse Mana ement 8WM9 C this component aims to ma*imi-e the stora e capacity in such a !ay that there is no !asta e of time in placin and remo0in items from the !arehouse by su estin the most efficient !ay of handlin material.

4&B:55+ I./:G6&/:D I.B:./26I M&.&GM:./ +I+/:M
Mana in in0entory is an inte rated function, so it is not possible for a sin le department to !ork on it. It in0ol0es team !ork of different department like purchase department, store department !arehouse department etc. /he system follo!ed by 4a0ells is all the ra! material is initially procured from e*ternal or internal sources as per there re1uirement !hich is determined by material re1uirement plannin . /hen its deli0ery is entered in the system soft!are +&P as a ood receipt. /his deli0ered material is stored in the store department until its is used !ithin the company or deli0ered to its costumer

4a0ells undertakes +&P 67) +ystem that represents the enterprise structure.

/his dia ram sho!s the or ani-ation of an enterprise throu h +&P co0erin follo!in or ani-ation le0els# 3lient# It is at the top most hierarchy le0el, !hich has its o!n data, set of table and master records. It represents the corporate roup. 3ompany code# It is the subsidiary company or a corporate member that has an independent accountin !ith the client and has its o!n balance sheet and profit and loss statement. Plant# It is the manufacturin concern that handles lo istic, production, plant maintenance, procurement, and material plannin . :ach plant is assi ned to company code and to a purchase or ani-ation. +tora e location# It refers to the !arehouse that stores the companyHs in0entory. Purchase or ani-ation# It is an or ani-ational unit !hich is responsible for procurin material from different plants and ne otiatin !ith 0endors for price and deli0ery term. It assumes le al responsibility for all the e*ternal transaction that takes place.

!og+,t+c, Proce/ure follo!ed by 4a0ells manufacturin plant in +ahibabad controllin lo istic system#
!urchase re1uisition !urchase Order

(oods received in store

Deliver" ( gate entr")

MI(O ((oods received) S ! entries MIRO (Invoice Received)

I' Ok3 in store Ins%ection 2ualit" Check !urchase return

Issue 'or %roduction


)inished goods to store

Send according to order Re1uisitions4

Start+ng 2or0+ng +n SAP
?or in0entory mana ement, in +&P 67) system Material Master record is maintained !hich is the main source of companyHs material. /his is a material database !hich has all material description. &ll material !hich is used in production or process is i0en a material code. By usin these material codes all the entries are done in +&P. STEP 7- Purcha,e re3u+,+t+on In company, the process be ins !ith sendin of purchase order re1uest to purchase department !hich is called purchase re1uisition. Which is enerated in +&P throu h &P2 that is automate production order by recei0in notification from different department on items re1uirement for production. In this description and 1uantity of oods needed is i0en. It is passed on to accountin department !hich look after the amount of money, that purchase department is authori-es to spend. &fter recei0in technical recommendation from all the departments in0ol0ed purchase order is made. Purchase re1uisition !indo!#

STEP 8- Purcha,e or/er &fter purchase re1uisitions are done, purchase order is initiated by the purchasin department. In +&P automatic mails are send to 0endors re ardin purchase order !hich states the description, 1uantity, date of deli0ery, price and terms and condition of deli0ery. 3ompany issues ?orm )=8application of road permit9 to the 0endors. $(( permits per day is restricted by the company. +o all the 0endors located outside the border uses form )= to supply oods to the company. Purcha,e Or/er #+n/o2-

Step 9- $oo/ rece+pt Good 6eceipt is the recei0ed from 0endor as it deli0ers oods to the company. &s soon as oods are recei0ed, it is entered into daily receipt book and i0en a 26B .o in re ister !hich includes the detail like .umber of bo*es, /ransporters .ame, Bill, Date of Deli0ery, and Purchase 2rder .o. Material is checked !ith respect of 1uantity and is inspected then it is sent to store. /his 6eceipt of the oods is entered in In0entory Mana ement 8IM9 component in +&P to confirm that the mo0ement of oods has taken place !hich is carried out automatically by the system. STEP :- MI$O ;goo/, rece+pt entry< • ?or purchase order I. +&P 67) system, MIG2 transaction entry is made, !hich sho!s oods recei0ed from 0endor, and placed in store !ith reference to Purchase order enerated. /hrou h this all the departments in the or ani-ation are updated !ith the ood recei0ed info. MIG2 Windo!# In +ystem# +&P menuJ lo isticsJ material mana ementJIM oods mo0ementJ ood receiptJ for purchase orderJ Purchase order details are enteredJ and sa0ed.

Different modules are inte rated in +&P, so ' entries are passed. 2ne in MM module 8MIG29 and other one in ?I module. /his is done automatically. Material &73.........Dr /o G67I6 &73 • ?or reser0ation MIG2 of Good receipt for reser0ation is made. 6eser0ation is kind of re1uest made to !arehouse to keep material ready for issue in future. &s 0arious departments can demand for oods issue at later date as per there re1uirement. +o this reser0ation ensures that material is ready and a0ailable in store !hen needed. 6eser0ation entry in +&P is made to create the reser0ation document, !hich is a proof of re1uest. It simplifies the further process of oods issue. &lso, in M6P 8Material 6e1uirement Plannin 9 !hen material is out of stock they take reser0ation into consideration as it sho!s the information that is rele0ant for oods issue.

STEP- = MIRO ;+nvo+ce rece+pt< MI62 is handled by the accounts department of the company. ?or all the purchase order made to 0endors, in0oice is recei0ed that is payment is re1uired to be made. In +&P, firstly all in0oice details is entered usin the transaction code DMI62E. /hen the system itself matches the details of in0oice !ith ood receipt information and purchase order information. If in0oice details matches, automatically payment is made to the 0endor from companyHs account. &nd in case, in0oice details does not match then in0esti ation is made usin /-code M6B6. /his code blocks in0oice for payment until it matches. MI62 !indo!#

In system# +&P menu Jlo istics J Material Master J lo istic in0oice 0erificationJdocument entry J MI62 4ere also t!o entries are made automatically, first in MM module and second in ?I module.

2n recei0in receipt from 0endors# G76 &7c.......Dr /o Bendor &7c Payment to Bendor 8automatic payment is made by Dautomatic payment pro ramE9# Bendor &7c.....Dr /o Bank &7c &fter the process of MIG2 and MI62, material recei0ed from 0endors is send for inspection ;uality check. Were, a team checks the 1uality of material. &s ra! material is important for company !hich is used in further production and assembly process. If these materials are of ood in 1uality then it is issued for further production process. &nd If not then material is returned to 0endors and ood return entry is made in +&P.

STEP >- goo/, +,,ue Once the material is received from vendors, there payments are made and quality is checked, material is ready for consumption. Now Good issue entries are made, which refer to movement of goods that can to for material which is used in production process issued within the company to different departments or as finished good that is issued to costumer. It leads to reduction in the warehouse stock. In SA !"# system, $aterial to %e issued code is typed and all details like quantity are entered. &hen it finds out its reference document 'reservation or purchase order( e)ists in the system or not. &hen According to the reference document, goods are issued. *ith the good withdrawal, system automatically updates the

reference document and reduces the reservation quantity. In system+ SA menu ,logistics,$$,inventory management,goods movement, goods issue. -ach goods movement type has a separate coding like, if the good are moved to production centre, code ./0 is typed. All the other information like quantity, storage location, reason for issue, consumption centre'plant 1 or plant .( are entered. In the same manner reservation entry as earlier is done. STEP ? - $oo/, Return When the material recei0ed from the 0endors are of poor 1uality or dama ed, that is returned to the 0endor by makin and oods return entry in +&P. &ll the information like Material document no, 0endor no, reason of return, 1uantity to be returned, mo0ement type is entered. /hen the system automatically sends email to 0endor initially and then reduces the stock. /hen 0endor sends the substitute deli0ery, !hich is referenced !ith the return deli0ery. STEP @- A,,em(.y &fter all entries in +&P of in0entory mana ement, the main process of manufacturin starts !ere all ood and material re1uired by 0arious departments in company are processed and brou ht to ether to assemble to constitute one product !hich is kno!n as finished product. Kno! these finished oods are placed in stores and a ain the entries are made in +&P. STEP 7A- &+n+,he/ goo/, to cu,tomer &ll the finished oods in store are send to the respecti0e customer, from !ere the purchase order is recei0ed. &nd to ether process keep on repeatin itself

a ain and a ain as customer demand ne0er dies.

An Internship is an opportunity for student to learn and develop his character, views and perspective. It gives us the first hand e)perience of working in corporate world. $y summer internship in 2avells has %een a tremendous learning e)perience for me. • It showed me how to use classroom knowledge in practical world. • Got to know the supply chain management process of %ig companies. • 3nderstood how SA connects whole organi4ation, and provide up5to5date information to the entire department and maintain supplier5customer relationship. • I learn how to done entries in SA in system 6 also learnt entries of form no #7. • I learned to %e patient and developed organi4ational and management skill. • I developed communication skills. 8uring my internship period I interact with management people, with the senior managers in the company, who e)plained me there working system and gave knowledge of vendor dealings. • I got to know a%out the company9s work culture, which

involves effective upward and downward communication, discipline, quick learning of the :o%s assigned, performing out %est of ones ai%ility, time importance, maintaining work discipline, working in the prescri%ed manner and taking initiative, sincerity and dedication towards the work.

/o any company 52GI+/I3+ is the heart of the company, and I bein deployed in the &ccounts department !ere all accounts related to lo istics is handled, I sa! from 0ery close ho! company mana es its in0entory and obser0ed the minute thin s and accuracies the employees need to deli0er in order to make the company run smoothly. Without such an efficient lo istics mana ement system and the use of technolo y to communicate and shorten the time ap it"s nearly impossible to run such a hu e company so efficiently. /o any company its employees are its main resources and I at 4a0ells ot the opportunity to see the employee culture and commitment to!ards their !ork. It"s the duty of the company to understand the problems of his employee and make sure that the employee irrespecti0e of its social conditions feel at a second home in the company and deli0er his best. I ot to understand the 0arious corporate rules that an employee needs to obey to maintain am ima e of the company in the market. /hese small thin s may 0ary from the look and uniform of the employee to the employee reetin any potential client or customer. &ll employees in the company are not $((L dedicated and loyal to the company and may be in search of a better opportunity else!here. It"s the 46 department task to find out such employees understand their problems and needs and pro0ide a WI.-WI. situation. &lso !ith re ards to such employees the company needs to formulate some mandatory policies for e0eryone to follo! includin the boss. Discipline is a must and must for any company to achie0e their tar ets on time.

I reali-ed the importance of bein in touch !ith the other departments constantly and ho! any fail in communication can make the !hole process o do!n for hours and also I learnt ho! they sum up the losses incurred durin this process. &s for the lo istics department is the department that connects the in0entory to the market a lot of communications happens on stop throu hout the day and their maybe possibility of communication ap occurrin at some time or another and so they take 0arious measures for information 1uality assurance as this information is the only thin that should not chan e throu hout. +oft!are and technolo y has helped people a lot and it !ill continue to help a lot in future. We should adapt to the chan in en0ironment and adopt some soft!are"s practices if they reduce our !ork to half. +&P is such soft!are that has taken o0er the tension of the bi companies and is helpin them to mana e their 0arious pieces of information at one sin le place and !ith one sin le click can et access to any latest information. I cannot think about the runnin of such hu e company !ithout the use of such reat soft!are. &ll the departments !ere in touch !ith other throu h the use of this soft!are as it pro0ided the latest updates, demands to meet, the e*ternal materials to order, the product count and e0ery small information that any one !ants to see. In my internship period !orkin on +&P, a0e me the full 0ie! of in0entory mana ement process. .o! I can more readily understand and learn its theories and concepts. &pparently, I ha0e ained a ood e*posure in the field of lo istics and supply chain mana ement.

!!!.;6G $roup6com http#77!!!.ha0ells.com7 http#77lo istics.about.com7od7supplychainsoft!are7a7+ap-In0entory-Mana ement.htm