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A PROJECT REPORT

ON
INVENTORY MANAGMENT
DRIPLEX WATER ENG.

A Study Project
Submitted in the partial fulfillment of the requirement for the award of the
Degree of Master of Business Administration

2008 2010

Submitted by:

Under Guidance of:

SONIA MAKKAR

MR. R.K MEHTA

Bharati Vidyapeeth University, School of Distance Education,


Academic Study Center: BVIMR, New Delhi
2008 2010
1

STUDENT UNDERTAKING
This is to certify that I have completed the Internship Project titled INVENTORY
MANAGMENT under the guidance of MR R.K MEHTA in the partial fulfillment
of the requirement for the award of Master of Business Administration of Bharati
Vidyapeeth University, School of Distance Education. This is an original piece of
work & I have not submitted it earlier elsewhere.

Students Signature

CERTIFICATE
This is to certify that the internship project titled INVENTORY MANAGMENT is
an academic work done by SONIA MAKKAR submitted in the partial fulfillment
of the requirement for the award of the Degree of Master of Business
Administration from Bharati Vidyapeeth University, School of Distance
Education, New Delhi under my guidance & direction.

To the best of my

knowledge and belief the data & information presented by him/her in the project has
not been submitted earlier.

MR. R.K MEHTA

CERTIFICATE
This is to certify that the internship project titled INVENTORY MANAGMENT is
an academic work done by SONIA MAKKAR submitted in the partial fulfillment
of the requirement for the award of the Degree of Master of Business
Administration from Bharati Vidyapeeth University, Pune school of distance
education.

Dr. Sachin. S. Vernekar


(Director)

ACKNOWLEDGEMENT
I deem it a time bound privilege and function to dedicate a page of mine to a number
of helping hands for their cooperation and guidance that enabled me to dedicate time
and effort in framing any study into a conceivable analysis

It is my proud privilege to express my sincere gratitude to all those who helped


me directly or indirectly in completion of this project report.
I would like to express my immense thanks to my respectful internal guide Prof. R.K
MEHTA of Bharati Vidyapeeth University Institute of Management And Research
whose invaluable guidance and advice nourished my every step which eventually
leads to the successful completion of the work.
Last but not least I am indebted to those entire people who indirectly contributed and
whom this work should not have been possible.
Endeavour has been made to make the project error free yet I apologies for the
mistakes.

PREFACE
Inventory Management offers comprehensive reporting capabilities to keep you on
top of inventory status. Centralized inventory management consolidates inventory
information by tracking lot numbers, on-hand levels and expiration dates, making the
re-ordering process more efficient. It also enables simultaneous tracking and
documenting supplies during studies to reduce redundant data entry and increase
workflow efficiency.
Inventory management software helps create invoices, purchase orders, receiving
lists, payment receipts and can print bar coded labels. An inventory management
software system configured to your warehouse, retail or product line will help to
create revenue for your company. The Inventory Management will control operating
costs and provide better understanding. We are your source for inventory management
information, inventory management software and tools.
Inventory is a quantity or store of goods that is held for some purpose or use (the term
may also be used as a verb, meaning to take inventory or to count all goods held in
inventory). Inaccurate inventory counts can cost you sales and delay shipments past
the promise date. Out-of stock items as well as overstocked items in inventory can be
devastating to your business.

TABLE OF CONTENTS
CHAPTER 1

INTRODUCTION

10

1.1

overview of industry

11

1.2

profile of organization

1.3

statement about problem

31

1.4

competitors

32

1.5

swot analysis

33

RESEARCH METHODOLOGY

37

2.1

objectives

38

2.2

scope of study

38

2.3

managerial usefulness

39

2.4

methodology

40

2.5

limitations

42

CHAPTER 2

CHAPTER 3
3.1

CONCEPTUAL DISCRIPTION
literature review

44

CHAPTER 4

DATA ANALYSIS

79

CHAPTER 5

CONCLUSION & SUGGESTIONS


REFERENCES
Questionnaire

98

Books

103

CHAPTER 1
INTRODUCTION

INTRODUCTION

1.1 OVERVIEW OF INDUSTRY

WHAT IS INVENTORY
Despite its importance to the supply chain, inventory is not universally well
understood. It is variously characterized, both positively and negatively, as an
economic asset to a non-income-producing use of capital funds. Only when
considered in light of all quality, client service and economic factorsfrom the
viewpoints of purchasing, manufacturing, sales and financedoes the whole picture
of inventory become clear. No matter the viewpoint, effective inventory management
is essential to supply chain competitiveness.
Inventory is a list for goods and materials, or those goods and materials themselves,
held available in stock by a business. Inventory are held in order to manage and hide
from the customer the fact that manufacture/supply delay is longer than delivery
delay, and also to ease the effect of imperfections in the manufacturing process that
lower production efficiencies if production capacity stands idle for lack of materials.
In other words, Inventory is a quantity or store of goods that is held for some purpose
or use (the term may also be used as a verb, meaning to take inventory or to count all
goods held in inventory). Inventory may be kept "in-house," meaning on the premises
or nearby for immediate use; or it may be held in a distant warehouse or distribution

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center for future use. With the exception of firms utilizing just-in-time methods, more
often than not, the term "inventory" implies a stored quantity of goods that exceeds
what is needed for the firm to function at the current time (e.g., within the next few
hours).

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WHY KEEP INVENTORY?


Why would a firm hold more inventory than is currently necessary to ensure the firm's
operation? The following is a list of reasons for maintaining what would appear to be
"excess" inventory.
What do we have in stock? Where is it located? How much is it worth? You need the
answers to these questions in order to manage your inventory effectively. The OPEN
SYSTEMS Accounting Software (OSAS) Inventory application gives you the
timely and accurate information you need to make sound purchasing and sales
decisions. You can track every aspect of your inventory, helping you make a positive
impact on your bottom line. You can closely monitor inventory movements by
tracking detailed inventory history; then, use the Inventory Movement Report to
identify your best products and to understand their purchase/sales cycles. You can
even spot seasonal demand patterns. The Valuation Report summarizes the value of
the items you have on hand and the profit on items sold during the year. Youll have
information at your fingertips to help you satisfy the customer. You can provide them
with accurate and timely information by accessing on-hand inventory quantities.
Receipts are posted online, so theyre always available to sell. When tracking an
order, you will be able to access detailed descriptions for each item. Youll know at a
glance the items in use, committed, and on order. Youll even be able to recommend
alternative item options.

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MEET DEMAND.
In order for a retailer to stay in business, it must have the products that the customer
wants on hand when the customer wants them. If not, the retailer will have to backorder the product. If the customer can get the good from some other source, he or she
may choose to do so rather than electing to allow the original retailer to meet demand
later (through back-order). Hence, in many instances, if a good is not in inventory, a
sale is lost forever.

KEEP OPERATIONS RUNNING.


A manufacturer must have certain purchased items (raw materials, components, or
subassemblies) in order to manufacture its product. Running out of only one item can
prevent a manufacturer from completing the production of its finished goods.
Inventory between successive dependent operations also serves to decouple the
dependency of the operations. A machine or work center is often dependent upon the
previous operation to provide it with parts to work on. If work ceases at a work center,
then all subsequent centers will shut down for lack of work. If a supply of work-inprocess inventory is kept between each work center, then each machine can maintain
its operations for a limited time, hopefully until operations resume the original center
Inventory of resources is held to achieve sales turnover target. Investment in large
inventories adversely affects the organization's cash flow and working capital as
investment in inventory represents substantial portion of total capital investment in
any business. It is, therefore, essential to balance the advantage of having inventory of
resources and the cost of maintaining it so as to determine an optimal level of
inventory of each resource so that total inventory cost is minimal.
Inventories are assets of the firm, and as such they represent an investment. Because
such investment requires a commitment of funds, managers must ensure that the firm
maintains inventories at the optimum level.

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1.2 PROFILE OF ORGANISATION


Driplex Water Engineering Ltd is a leading turnkey solutions provider of water
treatment plants, especially for the power sector. For the last three decades we have
been synonymous with commitment and integrity in the filed, having to our credit
some of the biggest and prestigious projects.
Driplex, in fact, has the dual distinction of being the largest water treatment plant
provider to the power sector in India and also having the widest range of process and
products for total services in water and ash management
Driplex was formed in 1974 and in this journey of 33 years we have catered to some
of the biggest names in the Indian industry and had the distinction of being one of the
few companies to provide water treatment plants and having its own fabrication
facilities. However, we have also dared to take initiatives by venturing into research
and development and having the capacity to experiment with design in industrial and
waste management
Today, the company is home to a team of devoted staff of over 350 people,
comprising highly qualified engineers, technicians and draftsmen. We have in-house
capabilities for process design and engineering, with computer-aided design,
fabrication, supply, erection, testing, commissioning, construction of associated civil
works, operation, and training & maintenance of plants particularly on the turn key
basis. Our solutions and systems are regularly updated with state-of-the-art
technology and selection of process equipment through ongoing interaction with
various collaborators/ associates like Best Water Group, Austria and Lanxess
(formally Bayes) Germany Over the years, Driplex has developed and delivered a
host of process & products for power sector, refineries, fertilizer plants, heavy
industrial sectors & public health departments, and has executed over 150 large
turnkey plants from concept to commissioning.

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PRODUCT RANGE:
Portable Water Treatment:
The aim of water treatment is to produce and maintain water that is hygienically safe,
esthetically attractive and palatable, in an economical manner. Water treatment
involves physical, chemical and biological changes that transform raw water into
potable water. The treatment process used in any specific instance depends on the
quality and nature of raw water.

Typical Scheme For Potable Water System


Raw water is pumped to an Aerator, which oxidizes soluble iron in the Raw Water
from Ferrous to Ferric State.
Water flows to the Stilling Chamber to break the Turbulence State.
Water is then taken into the Flash Mixer for intimate mixing of chemicals with the
raw water.
The raw water is dosed with Alum, Lime and Polyelectrolyte to coagulate and
flocculate the suspended / colloidal matter and form floc of higher nuclei thereby
enhancing the efficiency of sedimentation.
Chemically dosed raw water is then fed into the clariflocculator unit wherein
flocculation and clarification of raw water takes place.
The sludge generated in the clariflocculator is bled via Telescopic Bleeds to an
underground Sludge Pit. The sludge collected from the plant is finally pumped
out.
Clarified water is collected in the launder of the clarifier located on the top
periphery from where it flows to the gravity filter for further filtration.
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Chlorine dosing is done for disinfection purpose.


Filtered water is collected in filtered water storage tank from where it is pumped
to various consuming points.

Sewage Treatment Plant


The municipal sewage is mostly treated by conventional activated sludge process. The
treated water meets the standards of municipal and state pollution control board and
can be used for agriculture or horticulture purpose.

Typical Scheme For Sewage Treatment Plant


The raw sewage is pumped to the inlet chamber of treatment plant, from there
it flows to screen chamber where physical separation of floating and
suspended organic and inorganic materials takes place.
The sewage water from screen chamber flows to grit chamber, where coarse
particles of sand, ash and clinkers, egg shells, bone clips and inert materials
are removed.
The sewage water from grit chamber flows to primary clarifier where
sedimentation of settleable solids takes place. Primary clarifier also reduces
the organics load on secondary treatment units.
The sewage water from primary clarifier flows to aeration tank, where the
sewage containing waste organic matter is aerated and micro-organisms
metabolize the soluble and suspended organic matter.
The waste water from aeration tank flows to secondary settling tank, where
separation of biological sludge takes place. The efficient separation of the
biological sludge is necessary for ensuring final effluent quality and also for
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return of adequate sludge to maintain the MLSS level in the aeration tank.
The treated water from secondary clarifier collected in treated water collection
tank is pumped for final disposal.
The excess sludge from secondary clarifier and sludge from primary clarifier
is pumped to sludge thickener for thickening of sludge.
The thickened sludge from sludge thickener is pumped to sludge digester for
anaerobic sludge digestion.
The digester sludge is taken to centrifuge or sludge drying bed for sludge
dewatering.
The filtrate from dewatered sludge is collected in a sump and pumped back in
inlet chamber.

Pre Treatment Plant


The nature and concentration of impurities and objectionable constituents of water
determine the methods to be employed for the treatment of water. Different techniques
are used for removal of mechanical impurities, Clayey turbidities, Colloidal, dissolved
impurities, organic matter, detergents, polycyclic aromatics, colouring substances, oils
and aliphatic hydrocarbons etc. which impart taste or odour, polyvalent heavy-metal
compounds, germs and bacteria.

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Typical Scheme For Pre Treatment Plants


Raw water is pumped to an Aerator, which oxidizes soluble iron in the Raw Water
from Ferrous to Ferric State.
Water flows to the Stilling Chamber to break the turbulence.
Water is then taken into the Flash Mixer for intimate mixing of chemicals with the
raw water.
The raw water is dosed with Alum, Lime and Polyelectrolyte to coagulate and
flocculate the suspended / colloidal matter and form floc of higher nuclei thereby
enhancing the efficiency of sedimentation.
Chemically dosed raw water is then fed into the clariflocculator unit wherein
flocculation and clarification of raw water takes place.
The sludge generated in the clariflocculator is bled via Telescopic Bleeds to an
underground Sludge Pit. The sludge collected from the plant is finally pumped
out.
Clarified water is collected in the launder of the clarifier located on the top
periphery from where it flows to the clarified water reservoir.
Water collected in clearified water reservoir is then pumped to various consuming
points.

Demineralisation Plants
Demineralisation is the Process of removing the mineral salts from water by ionexchange. Impurities that remains dissolved in water dissociate to form positive and
negative charged particles known as ions. These impurities or compounds are called
electrolytes. Generally, all natural water has electrolytes in varying concentrations. An

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ion-exchange vessel holds ion-exchange resin of the required type through which
water is allowed to pass. The selective ions in the water are exchanged with ions or
radicals loosely held by the resin. In this way, the water is passed through several
vessels or a mixed bed vessel so that both positive and negative ions are removed and
water is demineralised.
Regeneration techniques for DM plants
Parallel flow (co-current) Regeneration Technique The exchange resin is
loaded under down -stream conditions only.
Fixed bed (counter-current) Counter Flow Process The Exchange resin is
loaded under down-stream and regenerated under up-stream conditions with
dynamic back pressure created with water or air.
Floating Bed / counter flow process The regeneration is performed under downstream flow, without hydraulic problems. The resin is loaded up-stream flow, so
that the bed is kept floating.
Automatic Regeneration The regeneration procedure (back-wash, regeneration
& rinse) is automatically controlled, implying reduced operating costs. To control
the regeneration cycle either of the following systems can be used: a) Relay
based interlock and operation sequence logic. b) PLC based interlock and
operation sequence logic.

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Quality of treated water from a demineralisation plant


Cation-Anion

Cation-Anion

Cation-Anion

Polishing

Counter-Current

Co-Current

Mixed Bed

Regeneration

Regeneration*

0.5 to 1.0 S/cm at5 to 30 S/cm at 25


Conductivity

Sodium

0.1 S/cm at 25C

0.01 mg/l

Reactive silica 0.01 mg/l

25C

0.05 to 0.1 mg/l

0.5 to 3 mg/l

0.025 mg/l

0.1 to 0.3 mg/l

Reverse Osmosis Plants


Reverse Osmosis is reversal of natural process of osmosis - a process by which a
dilute solution will pass through a semi-permeable barrier to a more concentrated
solution. In reverse osmosis, a pressure in excess of osmotic pressure is applied to a
concentrated solution, forcing essentially pure water through the semi permeable
membrane, leaving behind the dissolved solids. The result is a pure, essentially
mineral-free stream of water. Driplex customizes its solutions based on the clients
requirements. Usually RO systems are advisable where TDS > 500 ppm. Reverse
Osmosis Systems offer a 96 - 99 % rejection of salts.
The hollow fiber membranes for water purification are resistant to bacterial attack and
degradation caused by acidic and alkaline solutions. They are suitable for use on both
alkaline pH softened feed waters as well as acidic feed waters. Because of closely
packed hollow fibers, Driplex reverse osmosis modules offer great advantages in
active surface areas. This means greater volume of pure water from a compact, light
weight, easily handled module. The recovery of large RO System is commonly

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chosen based on the potential for scale formation. The higher the recoveries, the
greater the concentration of salts will be in the downstream membrane stages, thus the
higher the potential for scale formation.
Applications of Reverse Osmosis Plants
Pre-treatment for the production of

Demineralization of service water for

very pure water for semiconductor,

special

electrical and glass industries

Demineralization

of

use

as

water

process

(hospitals

and

air-

conditioning and sanitary engineering)

for
Removal

industrial

uses

of

organic

matter

as

water,
preliminary stage of ion-exchange plants

cooling water and boiler feedwater

Demineralization and decolourisation

Concentration

of

effluents

of pretreated effluents for recycling

removal of harmful matter

for

the

Recovery of metals from concentrated

Concentration of watery solutions in

solutions

the chemical, pharmaceutical and food


industry

Ultra Filtration Plants


Ultra Filtration is a membrane fractionation process used to separate and concentrate
macro-molecules and colloids from water. Ultra Filtration is most reliable and
economical solution for the removal of impurities such as bacteria, heavy metals and
suspended solids. Substances smaller than the particle size of the membrane are
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passed while large solutes or particles are rejected. The typical molecular weight cut
off (M.W.C.O.) of Ultra Filtration membranes ranges from 1,000 to 1,00,000 daltons.
Because of its larger pore size, it does not reject dissolved salts but removes colloidal
solids such as silica, iron and some T. O. C. contaminants.
UF Hollow Fiber Membranes are Hot Water Sterilisable, Chlorine & Acid/Alkali
Tolerant. These Membranes have the unique advantage of being hydrophillic nature,
which results in fouling resistance. UF Membranes also have a wide range of pH and
temperature tolerance and are easily backwash able, to avoid membrane fouling.
Advantages of Ultra Filtration Systems
The pre-treatment by pre-UF needs only 20-30% space as compared to
conventional pre-treatment system
There is no biological growth in the filtration system, because of non - stagnant
fluid flow
Less civil costs and faster installation
Less energy consumption
Reduced waste disposal
Lower operating costs.

Condensate Polishing Systems


Driplex offers a wide range of condensate polishing solutions, from deep bed
condensate polishers and powdered resin condensate treatment, to special resin grades
and off-site regeneration. Condensate polishing can improve bottom line by reducing
the losses or damages caused by corrosion and deposits; it can significantly reduce
start-up times and the frequency of routine cleaning. This translates into cost savings
and greater operating efficiencies for our customers.

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The essential feature of this system is the design and operation of the external
regeneration vessels. The use of conical type units achieves a minimization of the
surface area of the separation zone - on a typical design for a 500 MW set, this can be
of the order of a factor of 10x, when combined with a carefully designed flow system
(when compared with conventional sluicing systems which are inherently turbulent) it
can be readily seen that the efficiency of the resin separation is much higher. This
facility is becoming a standard inclusion in many deionization plants provided to
produce ultra pure make up water for boiler units operating at high pressures.
Condensate treatment is widely used in coal-fired thermal power plants with supercritical boilers, where high purity must be strictly maintained. Deionization at high
flow rates can present challenges with respect to the design of a suitable internal
distribution system, particularly when one considers the very large ratio that would
exist between the normal high operating flow and the necessary resin regeneration
flow.

Effluent Treatment Plant


The effluent treatment plant is designed to treat the effluent coming from different
areas of the plant. The treatment of different effluents varies with the type of effluent.

Oily Water Effluent Treatment


Oily water effluent treatment plant is designed to treat effluent mainly containing oily
effluent. The oily water from the Transformer Area, Turbine building, Workshop etc is

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collected in common collection sump from where water is pumped through the Plate
Interceptor. Oil separated from Plate Interceptor is collected in drums & clear water is
lead to central monitoring basin through gravity. Sludge generated from the Plate
Interceptor is led to the Sludge Pit for further treatment.

Service Water Effluent Treatment


The system is envisaged for treatment of effluent mainly containing turbidity and
suspended solids. Service water washing effluent from different areas is collected in
common collection pit and then pumped to the flash mixer where chemical mixing
takes place. The effluent is dosed with Alum, Lime and Polyelectrolyte to coagulate
and flocculate the suspended / colloidal matter. Water then flows through the
flocculation tank for flocculation and is finally carried over to tube/lamella settler
through gravity where clarification of water takes place. Clarified water is then led to
common monitoring basin through gravity. Sludge generated in the process shall be
collected and pumped for further treatment.

Coal Handling Plant & Coal Storage Effluent Treatment


Effluent from the Coal handling plant and Coal storage Area is collected and is led
through the inlet channel to break the turbulence. The Effluent then flow to the Coal
Slurry Settling pond where the discrete particles settle down and the clear water flows
to the coal decanted water sump. Decanted water is then pumped to the central
monitoring basin.

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Sludge Handling System


Sludge collected from different clarifiers is pumped through the Sludge Thickener.
Thickened sludge is the further pumped to centrifuge. Sludge cakes generated from
centrifuge are disposed off. Supernatant is recycled back to the main clarifier.

Ash Handling Plant


Material handling solutions
Driplex Water Engineering Limited - an ISO 9000 - 2001 organization with its
expertise in executing turnkey EPC projects have been providing optimized country
specific solutions for Ash Handling System. The criticality of the system in optimized
continuous plant operation is well acknowledged and the expertise of Driplex in
undertaking such contracts have been proven for the years. Presently, in association
with M/s Zhenjiang Power Station Auxiliary Machinery Plant (ZAMP), China, we are
in a position to provide the complete solutions for both the pneumatic and hydraulic
handling of ash and other powder material. Technology advancements, backed by
specially developed methodology has, over the years, given us an edge over the other
similar equipment suppliers. Our approach to the overall system design results in
optimized equipment sizing, drastically reducing the cost of operation.
One of the critical aspects of designing pneumatic conveying system for ash or
powder material basically relates to the flow technology adopted by designers. Based
on the technology available and provable ness of the same, Driplex can provide both
dense phase and lean phase, as may be required to suit the customers' requirement.
The selection of the velocity and the requirement of volume for conveying is of
particularly important for a stabilized less maintenance of the system, as the

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technology used by Driplex uses optimized solid velocity, hence abrasive and friable
materials can be conveyed without major erosion of pipeline/equipment or system
degradation.

CLIENTS
Power Sector:
Andhra Pradesh Power Generation Corp. Ltd.
Assam State Electricity Board
Bharat Heavy Electricals Ltd.
Chhatisgarh State Electiricity Board
Damodar Valley Corp. Ltd.
Essar Power Ltd.
Haryana Power Generation Corp. Ltd.
Karnataka Power Corp. Ltd.
Madhya Pradesh State Electricity Board
Neyveli Lignite Corporation Ltd.
National Thermal Power Corporation Ltd.
Punjab State Electricity Board
Rajasthan Rajya Vidyut Utpadan Nigam Ltd.
Reliance Energy Ltd.
Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd.
West Bengal Power Distribution Corp. Ltd.
Maharastra Power Generation Company Limited

Infrastructure
Delhi State Industrial Development Corporation
Gujarat Urban Development Company Ltd.
Karnataka Urban Infrastructure Development & Finance Corporation
Rajasthan Urban Infrastructure Development Project
Jabalpur Municipal Corporation

Consultants
Black & Veatch, India
Development Consultants Pvt. Ltd.
Desein India Ltd.
Engineers India Ltd.
Fitchner Consulting Engineers, India
M.N. Dastur Co. Ltd.

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Projects & Development India Ltd.


Tata Consultancy Engineers Ltd.

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Steel
Steel Authority of India Ltd.
Rashtriya Ispat Nigam Ltd.
Visakapatnam Ispat Nigam Ltd.
Rourkela Steel Plant

Petroleum & Natural Gas


Hindustan Petroleum Corp. Ltd.
Indian Oil Corporation Ltd.
Oil & Gas Commission
Essar Oil Ltd.
Bharat Oman Refinery (BPCL & Oman Refinery's JV)
Haldia Petrochemical Ltd.

Others
Bharat Aluminium Company Ltd.
Bharat Electronics Ltd.
Hindustan Paper Corporation Ltd.
ITC LTd.
National Aluminium Company Ltd.
Tata Projects Ltd.
Utkal Alumina Ltd. (HINDALCO GROUP)

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International Clients
Kawasaki Heavy Industries, Japan
Mitsubishi Heavy Industries, Japan
Power Machines, Russia
Technopromexport, Russia

Infrastructure
Driplex has 3 manufacturing units situated in Greater Noida, which is approximately
50 km from New Delhi. These units have been carrying out equipment fabrication
work for the past 10 years. Some of the equipments, which are being manufactured at
these units, are:
Storage Tanks.
Low and High Pressure Piping.
Service Vessels for Condensate Polishing.
Skids mounted Reverse Osmosis, Ultra Filtration and chemicl handling
systems..
Clarifiers and other equipment for Pre Treatment Plants.
Pressure Vessels.
These equipments are made to suit the clients' requirement and are inspected by some
of the leading agencies in India, such as NTPC, BHEL, EIL, Bureau Veritas, Lloyds,
etc. Driplex has been mainly using Mild Steel and Stainless Steel to manufacture the
above mentioned equipments.

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In order to provide cost-effective for water treatment we have established various


strategically placed service station operation in rest of India. Technical back up
through multistage feed back system. This includes collection of data by resident
executive, processing of data at our R&D center and a comprehensive feed back to
our customers. A well-equipped R&D center is catering to all of our needs of products
& services.
Keeping pace with modern technology all set up is computerized which has helped
enormously in timely provision of backup for customers. We are in the process of
establishing a computerized programmed where solutions can be tailor made as per
need of our customers. We are working continuously to provide more solutions in the
field of water treatment. At Anodyne we are also in the process of formalizing
collaborations with leading water treatment companies around the globe.
The directors of the company are well-experienced technocrats in the field of
industrial application of chemical technology. We have a dedicated team of
professionals responsible for sale & services of our product & services.

1.3 STATEMENT ABOUT THE PROBLEM

The three primary functions that characterize the occupation are management,
coordination, and control of inventory and systems of inventory management.
Management of inventory records and relevant details is an important area of concern
for every organization, whether it is large or small. And also calls for efficient
planning and maintenance. Think of a situation when you have to look into various
registers to find and enter each and every minor mandatory detail. And the situation
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goes worse when you need to manage a number of such registers. Every register need
to be updated to make the records up to date. Obviously, managing number of such
records and registers manually sounds to be truly a laborious job and calls for efficient
and effective planning and implementation of effective skills to get the job done.
But what for, if not all but a maximum part of the job of management can be done
automatically with just the click of a button! Sounds a bit relieving and interesting,
isnt it!! Here comes the concept of INVENTORY MANAGEMENT SYSTEM.
Whereas M/s Driplex Water Engineering Limited are yet to decide on and implement
the inventory management system and whereas if not all, most of the functions can be
automated, the present study is a humble attempt to understand the need for and
operational feasibility of the Inventory Management System at the M/s Driplex Water
Engineering Limited.

1.4 COMPETITORS
Anodyne water engineering.
New dawn water eng.
Elite water solution.
Flow well India.

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1.5 SWOT ANALYSIS


SWOT Analysis is mainly used to find out the specific areas in the companys
operations which need more care and attention, by comparing them with that of the
competitor. Here S means Strengths of the company, W means Weaknesses of the
company, O means Opportunities and T means Threats to the company. Both
Strengths and Weaknesses are inherent with the company while Opportunities and
Threats are usually outside factors, which affect the existence of the company at large.
Let us make the SWOT Analysis for all the players mentioned so far, ie., Anodyne
water engineering, new dawn water eng. And driplex water eng. Together so that the
reader will get a comprehensive idea.

Strengths
Driplex water eng.
Anodyne water eng.
The
incomparable Complete
solution
supremacy in the number of problems faced.
agents
Portable

water

treatment Complete

and

New dawn water eng.


to Total water and wastage
water management.

timely Experience

in

providing

to

industrial

plant.

provision of backup.

chemicals

The early bird advantage

Supply of quality product.

water.
Diversified into the field of
effluent recycling.

Weaknesses
Driplex water eng.

Anodyne water eng.

32

New dawn water eng.

Spatial

and

temporal Solid waste management.

Pollution of water.

distribution
Storage insufficient to meet Improper operation at the
demand.
No
single
available

to

time of crises.
algorithm No
single
solve

problem

WR available

to

problem

algorithm No
solve

single

WR available

to

algorithm
solve

WR

problem

Opportunities
Driplex water eng.
Anodyne water eng.
New dawn water eng.
To operate the reservoirs To operate the reservoirs To operate the reservoirs
optimally

optimally

optimally

Use efficient and effective Use efficient and effective Use efficient and effective
inventory

management inventory

management inventory

management

techniques.
techniques.
techniques.
simultaneous tracking and simultaneous tracking and simultaneous tracking and
documenting supplies
documenting supplies
documenting supplies
The Government policies The Government policies The Government policies
are offering more and more are offering more and more are offering more and more
rebates.

rebates.

rebates.

33

Threats
Driplex water eng.
Anodyne water eng.
New dawn water eng.
More and more companies More and more companies More and more companies
are coming into the field are coming into the field are coming into the field
and the existing ones have and the existing ones have and the existing ones have
to struggle hard to keep the to struggle hard to keep the to struggle hard to keep the
customers loyal and to get customers loyal and to get customers loyal and to get
more customers
more customers
more customers
Now as India is on the brim Now as India is on the brim Now as India is on the brim
of emerging out as an of emerging out as an of emerging out as an
economic
stringent

power
laws

centre, economic
can

be stringent

power
laws

centre, economic
can

be stringent

power
laws

centre,
can

be

expected in the coming expected in the coming expected in the coming


future.
future.
future.
Large spatial and temporal Large spatial and temporal Large spatial and temporal
variations
.
Implementation

variations
of

variations

best Implementation

polices.
Demand is ever increasing

of

best Implementation

polices.
Demand is ever increasing

34

of

best

polices.
Demand is ever increasing

CHAPTER 2
RESEARCH METHODOLOGY

35

2.1 OBJECTIVES
The present study revolves around the following two broad objectives:
To make a need assessment of an inventory management system with respect to
the specific requirements of M/s Driplex Water Engineering Limited.
To study the utility and operational feasibility of Inventory Management System
in M/s Driplex Water Engineering Limited.

2.2 SCOPE OF STUDY


In order to provide cost-effective for water treatment we have established various
strategically placed service station operation in rest of India. Technical back up
through multistage feed back system. This includes collection of data by resident
executive, processing of data at our R&D center and a comprehensive feed back to
our customers. A well-equipped R&D center is catering to all of our needs of products
& services.
Keeping pace with modern technology all set up is computerized which has helped
enormously in timely provision of backup for customers. We are in the process of
establishing a computerized programmed where solutions can be tailor made as per
need of our customers. We are working continuously to provide more solutions in the
field of water treatment. At Anodyne we are also in the process of formalizing
collaborations with leading water treatment companies around the globe.
The directors of the company are well-experienced technocrats in the field of
industrial application of chemical technology. We have a dedicated team of
professionals responsible for sale & services of our product & services.

36

2.3 MANAGERIAL USEFULNESS


Operational Feasibility
It is mainly related to human organizational and political aspects. The points to be
considered are What changes will be brought with the system?
What organizational structures are distributed?
What new skills will be required? Do existing staff members have these skills? If
not, can they be trained in due course of time?
It is going to add value to my knowledge.
Generally project will not be rejected simply because of operational infeasibility but
such considerations are likely to critically affect the nature and scope of the eventual
recommendations. This feasibility study is carried out by a small group of people who
are familiar with information system techniques, who understand the parts of the
business that are relevant to the project and are skilled in system analysis and design
process
At the feasibility stage it is desirable that two or three different configurations will be
pursued that satisfy the key technical requirements but which represent different
levels of ambitions and cost. Investigation of these technical alternatives can be aided
by approaching a range of suppliers for preliminary discussions. Out of all types of
feasibility, technical feasibility generally is the most difficult to determine. It may be

37

hubmly submitted that the thesis shall be useful further research as well as for the
paint industry for understanding an effective inventory management system

2.4 METHODOLOGY
A Research Methodology defines the purpose of the research, how it proceeds, how to
measure progress and what constitute success with respect to the objectives
determined for carrying out the research study.
The appropriate research design formulated is detailed below.
Exploratory research: this kind of research has the primary objective of
development of insights into the problem. It studies the main area where the problem
lies and also tries to evaluate some appropriate courses of action.
The research methodology for the present study has been adopted to reflect these
realties and help reach the logical conclusion in an objective and scientific manner.
The present study contemplated an exploratory research.

DATA COLLECTION
Sources of data:

1) Primary Data which included the input received from


directly the officials and employees through questionnaire and
interview
2) Secondary data from the books, journals and internet etc.

Method of collecting data: Questionnaire schedule) & Interview method


Sample Size ------------------------------ 40

38

(Company Officials inter alia includes Administrators, Executives and Market


Experts)

STATISTICAL TOOL USED


The data have been presented with the help of matrix table and bar diagrams.

39

2.5 LIMITATIONS
Water and sewerage authorities face common problems in the need to repair, replace
and extend ageing or inadequate systems. There is no strong evidence that private
companies are any better than public ones at dealing with issues such as leakage,
pollution or drought. Privatized water companies dominate, suggests that private
companies are at least as likely to experience problems.
The dry conditions of 1995 resulted in widespread water shortages.
Leakage rates are high in many parts of the country.
Major pollution incidents in the UK are often actually caused by the actions of the
water companies. Companies are also responsible for allowing serious chemical or
bacterial pollution of their water supply.

40

CHAPTER 3
CONCEPTUAL DISCRIPTION

41

. 3.1 LITERATURE REVIEW

INVENTORY MANAGEMENT
Inventory Management System deals with the maintenance of equipments. Inventory
Management is a discipline that encompasses the principles, concepts and techniques
for determining what to order, when to order and how much to order. The right
amount of inventory involves the balance between what is required to service your
customers and what is financially practical.
Precise control and safeguarding of inventory is an essential task for a successful,
well-organized company; businesses require timely and accurate information on
inventory location, movement, and valuation. The Inventory Management module for
Sage MAS 90 and Sage MAS 200 ERP systems provides data pertaining to the receipt
of goods, the movement of goods within or between locations, the sale, removal, or
other disposition of goods, kitting capabilities, lot and serial tracking, and the precise
valuation and status of goods remaining in inventory at any point in time. When used
in conjunction with other Sage MAS 90 and 200 modules, Inventory Management is
the cornerstone of an effective manufacturing or distribution solution. Inaccurate
inventory counts can cost you sales and delay shipments past the promise date. Out-of
stock items as well as overstocked items in inventory can be devastating to your
business. Additionally, an overstated or understated inventory valuation can result in
incorrectly reported assets within your financial statements.

42

Inventory Management offers comprehensive reporting capabilities to keep you on


top of inventory status. Generate reports on item pricing, stock status, detailed sales
history, backorder information, reorder points and recommendation, valuation,
turnover, sales analysis, and much more. And adding the Business Alerts module can
keep your staff on top of quantity changes to critical inventory items, to keep stocking
levels precisely where you want them. Properly used, the Inventory Management
module can help bring about the formulation of new or improved purchasing policies,
sales policies, pricing methods, and even enhanced customer service. Inventory
Management could also provide your company with an additional edge over
competitors who are unable to access the same strategic information.

FEATURES OF INVENTORY MANAGEMENT


Extended Pricing

Equip your sales team to improve customer satisfaction and beat the competition
by creating flexible pricing options and rules for each customer. With extended
pricing you can:

Create standard price schemes such as percentage-off, value-off, and net pricing,
along with personalized pricing options.

Implement powerful date-sensitive functionality for sales and promotions.

Navigate the system using drill-down, zoom, and special menu capabilities that
offer a fast learning curve and easy visibility into your pricing index.

Bill of Materials -

43

Increase productivity by providing a superior solution for tracking the components


and subassemblies used in light manufacturing and similar production and
assembly operations. With bill of materials you can:

Define the exact order of your assembly process, up to 10 levels deep.

Attach electronic notes to bills to detail exact component use at every assembly
level.

Track the actual cost for assembled items, plan for future changes, and manage
current and past items.

Schedule transactions into the future without reserving stock.

Cradle-to-Grave Serial/Lot Tracking Transform time-consuming searches into quick, efficient processes by identifying all
instances of an item with a single trace. With cradle-to- grave serial/lot tracking you
can:

Increase visibility into serial/lot number lifecycles.

Conduct powerful searches using an items serial or lot number.

Complete widespread searches across all transactions, including bills of materials


and customer orders.

Consolidate like lot numbers in all lot number entry windows to gain an accurate
view of inventory for a given lot numberincluding manufactured date and
expiration datewithout juggling multiple records.

44

Instant Access to Transaction Information Get instant information on all transactions related to any item you define in the
inquiry windowsincluding lot number, price levels, and item typeand drill down
as needed. Query originating documents, and then drill down for details about Field
Service, Project Accounting or Manufacturing documents.
Stock Count and Discrepancy Alerts
Maintain an accurate stock count schedule and investigate stock discrepancies quickly
with system alerts that notify you when inventory is due for counting or when
differences occur between an items reported status and warehouse presence

CONTROLLING INVENTORY
Inventory management, or inventory control, is an attempt to balance inventory needs
and requirements with the need to minimize costs resulting from obtaining and
holding inventory. There are several schools of thought that view inventory and its
function differently. These will be addressed later, but first we present a foundation to
facilitate the reader's understanding of inventory and its function. Firms that carry
hundreds or even thousands of different part numbers can be faced with the
impossible task of monitoring the inventory levels of each part number. In order to
facilitate this, many firm's use an ABC approach. ABC analysis is based on Pareto
Analysis, also known as the "80/20" rule. The 80/20 comes from Pareto's finding that
20 percent of the populace possessed 80 percent of the wealth. From an inventory
perspective it can restated thusly: approximately 20 percent of all inventory items
represent 80 percent of inventory costs. Therefore, a firm can control 80 percent of its

45

inventory costs by monitoring and controlling 20 percent of its inventory. But, it has
to be the correct 20 percent.
The top 20 percent of the firm's most costly items are termed "A" items (this should
approximately represent 80 percent of total inventory costs). Items that are extremely
inexpensive or have low demand are termed "C" items, with "B" items falling in
between A and C items. The percentages may vary with each firm, but B items usually
represent about 30 percent of the total inventory items and 15 percent of the costs. C
items generally constitute 50 percent of all inventory items but only around 5 percent
of the costs.
By classifying each inventory item as an A, B or C the firm can determine the
resources (time, effort and money) to dedicate to each item. Usually this means that
the firm monitors A items very closely but can check on B and C items on a periodic
basis (for example, monthly for B items and quarterly for C items).
Another control method related to the ABC concept is cycle counting. Cycle counting
is used instead of the traditional "once-a-year" inventory count where firms shut down
for a short period of time and physically count all inventory assets in an attempt to
reconcile any possible discrepancies in their inventory records. When cycle counting
is used the firm is continually taking a physical count but not of total inventory. A
firm may physically count a certain section of the plant or warehouse, moving on to
other sections upon completion, until the entire facility is counted. Then the process
starts all over again. The firm may also choose to count all the A items, then the B
items, and finally the C items. Certainly, the counting frequency will vary with the
classification of each item. In other words, A item may be counted monthly, B items

46

quarterly, and C items yearly. In addition the required accuracy of inventory records
may vary according to classification, with items requiring the most accurate record
keeping.
There are three types of costs that together constitute total inventory costs: holding
costs, set-up costs, and purchasing costs.

HOLDING COSTS.
Holding costs, also called carrying costs, are the costs that result from maintaining the
inventory. Inventory in excess of current demand frequently means that its holder
must provide a place for its storage when not in use. This could range from a small
storage area near the production line to a huge warehouse or distribution center. A
storage facility requires personnel to move the inventory when needed and to keep
track of what is stored and where it is stored. If the inventory is heavy or bulky,
forklifts may be necessary to move it around.
Storage facilities also require heating, cooling, lighting, and water. The firm must pay
taxes on the inventory, and opportunity costs occur from the lost use of the funds that
were spent on the inventory. Also, obsolescence, pilferage (theft), and shrinkage are
problems. All of these things add cost to holding or carrying inventory. If the firm can
determine the cost of holding one unit of inventory for one year (H) it can determine
its annual holding cost by multiplying the cost of holding one unit by the average
inventory held for a one-year period. Average inventory can be computed by dividing
the amount of goods that are ordered every time an order is placed (Q) by two. Thus,
average inventory is expressed as Q/2. Annual holding cost, then, can be expressed as
H(Q/2).

47

SET-UP COSTS.
Set-up costs are the costs incurred from getting a machine ready to produce the
desired good. In a manufacturing setting this would require the use of a skilled
technician (a cost) who disassembles the tooling that is currently in use on the
machine. The disassembled tooling is then taken to a tool room or tool shop for
maintenance or possible repair (another cost). The technician then takes the currently
needed tooling from the tool room (where it has been maintained; another cost) and
brings it to the machine in question.
There the technician has to assemble the tooling on the machine in the manner
required for the good to be produced (this is known as a "set-up"). Then the technician
has to calibrate the machine and probably will run a number of parts, that will have to
be scrapped (a cost), in order to get the machine correctly calibrated and running. All
the while the machine has been idle and not producing any parts (opportunity cost).
As one can see, there is considerable cost involved in set-up. If the firm purchases the
part or raw material, then an order cost, rather than a set-up cost, is incurred. Ordering
costs include the purchasing agent's salary and travel/entertainment budget,
administrative and secretarial support, office space, copiers and office supplies, forms
and documents, long-distance telephone bills, and computer systems and support.
Also, some firms include the cost of shipping the purchased goods in the order cost.
If the firm can determine the cost of one set-up (S) or one order, it can determine its
annual setup/order cost by multiplying the cost of one set-up by the number of set-ups
made or orders placed annually. Suppose a firm has an annual demand (D) of 1,000
units. If the firm orders 100 units (Q) every time it places and order, the firm will

48

obviously place 10 orders per year (D/Q). Hence, annual set-up/order cost can be
expressed as S(D/Q).

49

PURCHASING COST.
Purchasing cost is simply the cost of the purchased item itself. If the firm purchases a
part that goes into its finished product, the firm can determine its annual purchasing
cost by multiplying the cost of one purchased unit (P) by the number of finished
products demanded in a year (D). Hence, purchasing cost is expressed as PD.
Now total inventory cost can be expressed as:
Total = Holding cost + Set-up/Order cost + Purchasing cost or Total = H(Q/2) +
S(D/Q) + PD
If holding costs and set-up costs were plotted as lines on a graph, the point at which
they intersect (that is, the point at which they are equal) would indicate the lowest
total inventory cost. Therefore, if we want to minimize total inventory cost, every
time we place an order, we should order the quantity (Q) that corresponds to the point
where the two values are equal. If we set the two costs equal and solve for Q we get:
H(Q/2) = S(D/Q) Q = 2 DS/H
The quantity Q is known as the economic order quantity (EOQ). In order to minimize
total inventory cost, the firm will order Q every time it places an order. For example, a
firm with an annual demand of 12,000 units (at a purchase price of $25 each), annual
holding cost of $10 per unit and an order cost of $150 per order (with orders placed
once a month) could save $800 annually by utilizing the EOQ. First, we determine the
total costs without using the EOQ method:
Q = $10(1000/2) + $150(12,000/1000) + $25(12,000) = $306,800 Then we
calculate EOQ:

50

EOQ = 2(12,000)($150)/$10= 600 And we calculate total costs at the EOQ of 600:
Q = $10(600/2) + $150(12,000/600) + $25(12,000) = $306,000 Finally, we
subtract the total cost of Q from Q to determine the savings:
There are a number of assumptions that must be made with the use of the EOQ.
These include:
Only one product is involved.
Deterministic demand (demand is known with certainty).
Constant demand (demand is stable through-out the year).
No quantity discounts.
Constant costs (no price increases or inflation).
While these assumptions would seem to make EOQ irrelevant for use in a realistic
situation, it is relevant for items that have independent demand. This means that the
demand for the item is not derived from the demand for something else (usually a
parent item for which the unit in question is a component). For example, the demand
for steering wheels would be derived from the demand for automobiles (dependent
demand) but the demand for purses is not derived from anything else; purses have
independent demand.
Recent industry reports show that inventory costs as a percent of total logistics costs
are increasing. Despite this rise, many organizations have not taken full advantage of
ways for lowering inventory costs. There are a number of proven strategies that will
provide payoff in the inventory area, both in client service and in financial
terms. Some of these strategies for lowering inventory costs involve having less
51

inventory while others involve owning less of the inventory you have. Regardless of
which techniques you employ, proactive inventory management practices will make a
measurable difference in your operations.

In-Transit Inventory Transfers


Input a middle site into the transfer process to allow for via tracking to prevent
alespeople from selling material that isnt currently in the destination warehouse.
Accurate inventory quantities at both from site and to site allow more realistic
promise dates and improve inventory management.

Increased Lot Flexibility


Notify employees when a lot is close to its expiration date, so they can determine the
best course of action.
Inventory Control preferences offer optional password protection, so your people can
control the selection of expired lots.

Detailed Insight into Inventory Usage More effectively analyze sales, transfers, and materials used for manufacturing by
drilling down to each transaction that reduces inventory, including those in debited
and credited accounts.
Access supply and demand information using Allocated and On Order drill downs
and view item allocations in existing orders quickly and easily.
52

Narrow search results by providing date ranges for item transaction inquiries.
Inventory Management includes the integrated management and control of
assigned items of material. The work involves a number of processes such as:
Requirements Determination - Planning for and determining current and future
supply requirements to meet customer needs;
Material Distribution - Planning and determining the distribution and positioning of
supplies among major supply stations, stock points, or using activities;
Procurement Authorization - Preparing recommendations and directives for the
procurement of material, indicating the types of items, quantities, and at all times, the
sources; and
Funds Management - Analyzing planned or scheduled material requirements.

Benefits
Centralized inventory management consolidates inventory information by tracking lot
numbers, on-hand levels and expiration dates, making the re-ordering process more
efficient. Enables simultaneous tracking and documenting supplies during studies to
reduce redundant data entry and increase workflow efficiency. When multiple
officials are involved in a case, the statistical report accurately correlates the supplies
used with the correct user, eliminating mis-charges and appropriately tracking
resources. Provides stand-alone inventory management system for the institution with
the capacity to integrate with a hospitals existing inventory system, significantly
reducing go-live times and improving departmental efficiency.

53

Optional interface to institutions/companys material management system


significantly reduces ongoing inventory maintenance, and ensures accurate pricing
data for case cost reports and auto-decrements supply levels. Comprehensive
inventory reports help automate key administrative responsibilities, such as tracking
inventory item usage by vendor and physician, maintaining in-stock value of
consignment verses non-consignment items, and providing notification of items with
upcoming expirations.

Help reduce purchasing and inventory costs. Connect inventory control, purchasing,
and sales order processing with demand planning and help reduce costs, improve cash
flow, and help ensure that you have the right stock available when you need it. Gain
visibility into inventory processes. Effectively balance availability with demand and
track items and their possible expiration dates throughout the supply chain to help

54

minimize on-hand inventory, optimize replenishment, and increase warehouse


efficiency. Improve customer satisfaction. Make more accurate order promises and
intelligent last-minute exceptions with access to up-to-date inventory information.
Respond quickly and knowledgably to customer queries for improved customer
service. Reduce time to market. With integrated order, inventory, and distribution
processes, as well as item tracking capabilities, your business can reduce manual data
entry and get your goods to market fast.

55

TECHNIQUES

AND

SOFTWARE

OF

INVENTORY

MANAGEMENT
Inventory management is the active control program which allows the management of
sales, purchases and payments. Inventory Management and Inventory Control must be
designed to meet the dictates of the marketplace and support the company's strategic
plan. The many changes in market demand, new opportunities due to worldwide
marketing, global sourcing of materials, and new manufacturing technology, means
many companies need to change their Inventory Management approach and change
the process for Inventory Control. Despite the many changes that companies go
through, the basic principles of Inventory Management and Inventory Control remain
the same. Some of the new approaches and techniques are wrapped in new
terminology, but the underlying principles for accomplishing good Inventory
Management and Inventory activities have not changed.
The Inventory Management system and the Inventory Control Process provides
information to efficiently manage the flow of materials, effectively utilize people and
equipment, coordinate internal activities, and communicate with customers. Inventory
Management and the activities of Inventory Control do not make decisions or manage
operations; they provide the information to Managers who make more accurate and
timely decisions to manage their operations. The basic building blocks for the
Inventory Management system and Inventory Control activities are:
Sales Forecasting or Demand Management Sales and Operations Planning
Production

Planning Material

Requirements

Planning Inventory

Reduction

Inventory management software helps create invoices, purchase orders, receiving

56

lists, payment receipts and can print bar coded labels. An inventory management
software system configured to your warehouse, retail or product line will help to
create revenue for your company. The Inventory Management will control operating
costs and provide better understanding. We are your source for inventory management
information, inventory management software and tools. A complete Inventory
Management Control system contains the following components:
Inventory Management Definition
Inventory Management Terms
Inventory Management Purposes
Definition and Objectives for Inventory Management
Organizational Hierarchy of Inventory Management
Inventory Management Planning
Inventory Management Controls for Inventory
Determining Inventory Management Stock Levels

ORACLE INVENTORY MANAGEMENT


With Oracle Inventory Management you can improve inventory visibility, reduce
inventory levels and control inventory operations. All of your material in each line of
business and stage of the inventory lifecycle can be tracked in a single system.
Increased transparency will reduce the need for local buffer stocks, and inventory will
be located where it previously wasnt known to exist.

Improve Inventory Visibility


Oracle Inventory Management allows you to consolidate your disparate inventory
tracking and control systems into a single, global inventory management solution

57

for material in every stage of the product lifecycle as well as for your different
business types.
Improve Inventory Visibility with End-to-End Inventory Lifecycle Support
Oracle Inventory Management supports efficiently determining whether you have the
inventory you need and where it is - whether it is in-transit, in receiving, in storage,
staged for shipping, or consigned to a customer. Inventory information may be
efficiently managed for a wide range of material including components, ingredients,
finished goods, spare parts, returns, scrap, and rotables. Multi-dimensional inquiries
support inventory analysis by location, product, lot, serial, or material status.

Consolidate Inventory Systems with Multi-Mode Inventory Support


Oracle Inventory Management eliminates the need to run different inventory systems
for your different business types. The requirements of a wide range of business
models are supported including those of distributors, discrete manufacturers,
engineer-to-order manufacturers, process manufacturers, and repair/maintenance
organizations. Your inventory visibility improves greatly when you dont need
different inventory systems for each of these business types. Material Workbench
supports multi-dimensional analysis of inventory balances

58

59

Reduce Inventory Levels


Oracle Inventory Management gives you a variety of tools to reduce your inventory
levels. The more accurate your inventory levels and efficient your replenishment, the
less safety stock you need to hold. Consigning material from suppliers allows you to
reduce the amount of inventory you need to own. All of these help you reduce your
inventory carrying cost and improve your bottom line. Reduce Inventory Levels with
Flexible Replenishment Management Multiple inventory replenishment methods
allow you to reduce your inventory carrying costs without compromising fill-rates and
customer satisfaction. Oracle Inventory Management will support your transformation
to a lean enterprise including support for pull-based replenishment using kanban
cards. Now you can use kanban replenishment in all of your facilities, not just your
manufacturing plants. Inventory levels may also be replenished using min-max and
re-order point planning. Replenishment counts and PAR replenishment counts allow
you to refill non-quantity tracked stock locations. Flexibly defined sourcing rules
determine whether the material will be purchased from a supplier, produced in
manufacturing, or transferred from another facility.

Reduce Owned Inventory with Supplier Consignment


Consigning inventory from suppliers allows your organization to defer the transfer of
ownership from shipment to use. You purchase only the inventory that you actually
need and reduce the time you carry the cost of the inventory. All aspects of your
consignment process are managed including maintaining consignment agreements on
the Approved Supplier List (ASL), co-mingling storage of consigned and owned
material, sending consumption advices or automatically paying under a self-billing
arrangement. Consumption of consigned material is efficiently managed through

60

automatic consumption when issuing to manufacturing, selling to customers, or


transferring internally. Vendor Managed Inventory (VMI) replenishment is frequently
combined with consignment. Your suppliers can easily manage your replenishment by
viewing on-hand balance levels and consumption advices through Oracle iSupplier
Portal.

Increase Inventory Accuracy with Cycle Counting and Physical


Inventoryd
Regular inventory control counts increase your inventory accuracy. Higher inventory
accuracy improves fill-rates and reduces the amount of inventory you need to carry.
You can focus on counting the most important items more frequently through
classifying them based on a variety of criteria, such as value or usage. When
discrepancies are found between the system and the actual quantity, these
discrepancies are routed to supervisors for approval. Hit/miss and exact match KPIs
provide managers with better visibility to the inventory accuracy trends and issues. In
addition to periodic cycle counting capabilities, Oracle Inventory Management also
offers full physical inventory counting functionality for those organizations whose
auditors mandate full warehouse counts for reporting purpose
There are a number of other lot-sizing techniques available in addition to the facts
stated above. These include the fixed-order quantity, fixed-order-interval model, the
single-period model, and part-period balancing.

FIXED-ORDER-QUANTITY MODEL.
EOQ is an example of the fixed-order-quantity model since the same quantity is
ordered every time an order is placed. A firm might also use a fixed-order quantity
61

when it is captive to packaging situations. If you were to walk into an office supply
store and ask to buy 22 paper clips, chances are you would walk out with 100 paper
clips. You were captive to the packaging requirements of paper clips, i.e., they come
100 to a box and you cannot purchase a partial box. It works the same way for other
purchasing situations. A supplier may package their goods in certain quantities so that
their customers must buy that quantity or a multiple of that quantity.

FIXED-ORDER-INTERVAL MODEL.
The fixed-order-interval model is used when orders have to be placed at fixed time
intervals such as weekly, biweekly, or monthly. The lot size is dependent upon how
much inventory is needed from the time of order until the next order must be placed
(order cycle). This system requires periodic checks of inventory levels and is used by
many retail firms such as drug stores and small grocery stores.

SINGLE-PERIOD MODEL.
The single-period model is used in ordering perishables, such as food and flowers,
and items with a limited life, such as newspapers. Unsold or unused goods are not
typically carried over from one period to another and there may even be some
disposal costs involved. This model tries to balance the cost of lost customer goodwill
and opportunity cost that is incurred from not having enough inventory, with the cost
of having excess inventory left at the end of a period.

62

PART-PERIOD BALANCING.
Part-period balancing attempts to select the number of periods covered by the
inventory order that will make total carrying costs as close as possible to the setup/order cost. When a proper lot size has been determined, utilizing one of the above
techniques, the reorder point, or point at which an order should be placed, can be
determined by the rate of demand and the lead time. If safety stock is necessary it
would be added to the reorder point quantity.
Reorder point =Expected demand during lead time + Safety stock
Thus, an inventory item with a demand of 100 per month, a two-month lead time and
a desired safety stock of two weeks would have reorder point of 250. In other words,
an order would be placed whenever the inventory level for that good reached 250
units.
Reorder point = 100/month 2 months + 2 weeks' safety stock = 250

OTHER SCHOOLS OF THOUGHT IN INVENTORY


MANAGEMENT
There are a number of techniques and philosophies that view inventory management
from different perspectives.

MRP AND MRP II.


MRP and MRP II are computer-based resource management systems designed for
items that have dependent demand. MRP and MRP II look at order quantities period

63

by period and, as such, allow discrete ordering (ordering only what is currently
needed). In this way inventory levels can be kept at a very low level; a necessity for a
complex item with dependent demand.

JUST-IN-TIME (JIT).
Just-in-time (JIT) is a philosophy that advocates the lowest possible levels of
inventory. JIT espouses that firms need only keep inventory in the right quantity at the
right time with the right quality. The ideal lot size for JIT is one, even though one
hears the term "zero inventory" used.

THEORY OF CONSTRAINTS (TOC).


Theory of constraints (TOC) is a philosophy which emphasizes that all management
actions should center around the firm's constraints. While it agrees with JIT that
nventory should be at the lowest level possible in most instances, it advocates that
there be some buffer inventory around any capacity constraint (e.g., the slowest
machine) and before finished goods.

Lean Inventory Management


Lean is a philosophy of business that means doing things as simply and cheaply as
possible while providing superior quality and fast service. Overproduction or
verstocking leads to increased inventory and money sitting idle. Inventory means any
goods that are being held for any length of time, inside or outside the factory. In the
Lean system, inventory is regarded as a symptom of a sick factory.
Causes of Inventory

64

Acceptant of inventory as normal or as a necessary evil


Poor equipment layout
Long changeover times
Large-lot production or purchasing
Obstructed flow of goods
Stocking on speculation
Defective material
An awareness revolution must occur in everyone if inventory is to be eliminated or
reduced. People must believe in the possibility of zero inventories; inventory covers
up problems; it never solves them. A Lean inventory management system allows a
distributor to meet or exceed customers expectations of product availability with the
amount of each item that will maximize the distributors net profits. In a Lean system,
inventory is regarded as a sign of a sick factory that is in desperate need of some type
of treatment. The ideal goal for a company should be to have an inventory as close to
zero as possible. Effective inventory management, allows a distributor to meet or beat
their customers expectations of product availability while maximizing their profits.

Develop an Approved Stock List


Every distributor makes a commitment to stock an inventory of approved stock for
each location. The commitment does not necessarily mean that some of the items are
always on the shelf but can be supplied in a few days. In most cases, some of the
material in inventory is not on the approved list and here are some ways it finds into a
warehouse shelf:

65

The customer orders 15 pieces and the buyer must make a minimum order of 30
pieces (15 go in inventory).
Customer cancellation or return of some items.
A customer stops buying product especially stocked for them.
Left over quantities of discontinued products.
Left over stock items that were ordered on expected sales.
Inventory Replacement/Reordering
Lean inventory implies that in Just-In-Time system there should be little or no
inventory; an ideal situation (sell one, order a replacement). Stock should turn over at
least 4 times a year on special items and at least 12 times on stock items and no more
than one months stock be kept in inventory. Generally it is wise to keep a little extra
stock in inventory for unexpected conditions. Be sure to evaluate, for example a
suppliers discount of 2% for quantity purchases because it usually costs a company as
much as 3% to carry this inventory for one month.

Steps to Effective Inventory Management


There are two different approaches organizations can make with regard to inventory.
They can assume it is just a necessary evil and start a special inventory reduction
program whenever cash gets tight. Or they can make strategic decisions on the level
to carry, put an inventory management process in place to actively manage inventory
and continually improve the business results.

System Analysis
System Analysis refers into the process of examining a situation with the intent of
improving it through better procedures and methods. System Analysis is the process
66

of planning a new System to either replace or complement an existing system. But


before any planning is done the old system must be thoroughly understood and the
requirements determined. System Analysis is therefore, the process of gathering and
interpreting facts, diagnosing problems and using the information to re-comment
improvements in the System. Or in other words, System Analysis means a detailed
explanation or description. Before computerized a system under consideration, it has
to be analyzed. We need to study how it functions currently, what are the problems,
and what are the requirements that the proposed system should meet.
System Analysis is conducted with the following objectives in mind:

Identify the customers need.


Evaluate the system concept for feasibility.
Perform economic and technical analysis.
Allocate functions to hardware, software people, database and other system
elements.
Establish cost and schedule constraints.
Create a system definition that forms the foundation for all the subsequent
engineering

work.

Requirement Analysis/ SRS of the Component


Problem Definition
To provide the basic services related to the Supply of the material to maintain their
PRE-SO (Supply Order) and POST-SO details. The product will take care of all the
supply orders. Pre-So is maintained from the starting of the financial year. It is
concern to keep the records of each Supply Order, which is received, from firm,

67

supplying equipments. These equipments are then assigned a unique ISG Number
given by BRO, further they are supplied to different project departments of BRO. The
reference of Last Purchase Price (LPP) of the equipments corresponding to the ISG
(Initial Stocking Guide) is maintain to form the transaction sheet of the particular
financial year.

Performance Requirements
The following performance characteristics should be taken care of while developing
the system:
User friendliness: The system should be easy to learn and understand so

that

new user can also use the system effectively, without any difficulty.
User satisfaction: The system should meet user expectations.
Response time: The response time of all the operations should be low. This
can be made possible by careful programming.
Error handling: Response to user errors and the undesired situations should be
taken care of to ensure that the system operates without halting.
Safety: The system should be able to avoid or tackle catastrophic behavior.
Robustness: The system should recover from undesired
human intervention.
System Requirements

SOFTWARE REQUIREMENT
Visual Studio .Net 2003
SQL Server 2000
Windows 2000 Server edition

68

events without

HARDWARE REQUIREMENT
Pentium III processor
256 MB RAM
20GB HARD DISK

Acceptance Criteria:The following acceptance criteria were established for the evaluation of the new
system:
User friendliness:- The system should meet user needs and should be easy to
learn and use.
Modularity:- The system should have relatively

independent and single

function parts .
Maintainability:- The system should be such that future maintenance and
enhancements times and efforts are reduced.
Timeliness:- The system should operate well under normal, peak and recovery
conditions.
The system developed should be accurate and hence reliable i.e. The error rate
should be minimized and the outputs should be consistent and correct.
Both the execution time and response time should be negligibly low.
The system should be efficient i.e. the resources utilization should be optimal.
The system should have scope to forsee modifications and enhancements i.e. it
should be able to cope with the changes in future technology.

FEASIBILITY STUDY

69

All projects are feasible given unlimited resources and infinite time. Unfortunately the
development of computer-based system in many cases is more likely to be plagued by
scarcity of resources and delivery date. Hence, we have made use the concept of
reusability that is what Object Oriented Programming (OOPS) is all about. The
feasibility report of the project holds the advantages and flexibility of the project. This
is divided into three sections:
Economical Feasibility
Technical Feasibility
Behavioral Feasibility

Economic Feasibility
Economic analysis is the most frequently used method for evaluating the effectiveness
of the candidate system. More commonly known as cost/benefit analysis, the
procedure is to be determining the benefits and savings that are expected from a
candidate and compare them with costs. If benefits outweigh costs, then the decision
is made to design and implement the system. A systems financial benefit must exceed
the cost of developing that system. i.e. a new system being developed should be a
good investment for the organization. Economic feasibility considers the following
The cost to conduct a full system investigation.
The cost of hardware and software for the class of application.
The benefits in the form of reduced cost or fewer costly errors.
The cost if nothing changes (i.e. the proposed system is not developed).

Technical Feasibility:
Technical feasibility centers around the existing computer system (Hardware and
Software etc) and to what extend it support the proposed addition. For example, if the
70

current computer is operating at 80 percent capacity - an arbitrary ceiling - then


running another application could overload the system or require additional
Hardware. This involves financial considerations to accommodate technical
enhancements. If the budgets is a serious constraint, then the project is judged not
feasible. In this project, all the necessary cautions have been taken care to make it
technically feasible. Using a key the display of text/object is very fast. Also, the tools,
operating system and programming language used in this localization process is
compatible with the existing one.

Behavioral Feasibility:
People are inherently resistant to change, and computers have been known to facilitate
change. An estimate should be made of how strong a reaction the user staff is likely to
have toward the development of a computerized system. Therefore it is
understandable that the introduction of a candidate system requires special efforts to
educate and train the staff. The software that is being developed is user friendly and
easy to learn. In this way, the developed software is truly efficient and can work on
any circumstances, tradition, locales. Behavioral study strives on ensuring that the
equilibrium of the organization and status quo in the organization are nor disturbed
and changes are readily accepted by the users.

71

System Design
Designing is the most important phase of software development. It requires a careful
planning and thinking on the part of the system designer. Designing software means to
plan how the various parts of the software are going to achieve the desired goal. It
should be done with utmost care because if the phase contains any error then that will
effect the performance of the system, as a result it may take more processing time,
more response time, extra coding workload etc.
Software design sits at the technical kernel of the software engineering process and is
applied regardless of the software process model that is used. After the software
requirements have been analyzed and specified, software design is the first of the
three technical activities Designing, Coding and Testing that are required to build and
verify the software. Each activity transforms information in such a manner that
ultimately results in validated computer software.

DESIGN GOALS
The following goals were kept in mind while designing the system:
Make system user-friendly. This was necessary so that system could be used
efficiently and system could act as catalyst in achieving objectives.
Make system compatible i.e. It should fit in the total integrated system. Future
maintenance and enhancement must be less.
Make the system compatible so that it could integrate other modules of system
into itself.
Make the system reliable, understandable and cost-effective.

72

OPERATIONAL FEASIBILITY OF INVENTORY


MANAGEMENT
Why they should go for Inventory Management:
Tighten inventory management processes help to increase operational efficiency
across your business, improve customer service, and reduce inventory and distribution
costs with Inventory Management. Increased automation and item tracking
capabilities help you improve inventory accuracy and better match the goods you The
importance of working capital in any industry needs no special emphasis. Working
capital is considered to be life-giving force to an economic entity. Management of
working capital is one of the most important functions of corporate management.
Every organization, whether profit oriented or not, irrespective of its size and nature
of business, needs requisite amount of working capital. Capital to keep an entity
working is working capital. The efficient working capital management is the most
crucial factor in maintaining survival, liquidity, solvency and profitability of the
concerned business organisation. It needs sufficient finance to carry out purchase of
raw materials; payment of day-to- day operational expenses including salaries and
wages, repairs and maintenance expenses etc. and funds to meet these expenses are
collectively known as working capital.
To be more specific, neither under stocking nor overstocking of raw materials, careful
maintenance and trade off between credit receiving period from sundry creditors and
credit allowing period to sundry debtors (generally credit period from sundry creditors
should be more than credit period allowed to sundry debtors and the gulf between
these two periods is technically known as float of comfort), maintenance of requisite

73

cash and bank balance including provision for contingency and planning both the
short term and long term investment in appropriate manner without allowing any
cash/bank balance to remain idle in the business are strictly required to be practiced
by management. Practice of judicious and effective system of working capital
management demands hire of yeomen service and expertise of hard-core finance
professionals. Keeping in view the pragmatic importance of working capital
management as a gray area of corporate finance function, an attempt has been made to
examine working capital management practices and the problems faced by the firms
in working capital management process particularly in heavy engineering industries.
Current liabilities in totality are more than gross capital and the excess of current
liabilities over current assets is negative net working capital. Debtors & receivables
and loans & advances represent 60% or more of gross working capital. Percentage of
inventory ranges from 22% to 37% of the gross working capital. From this
circumstance, we may infer that the firm is badly constrained to smoothly run the dayto-day commercial operation. It may not be out of place to state that the company
simply cannot afford to hold 20 to 40% of gross working capital as inventory and
60% or more debtors & receivable and loans & advances when it is having negative
working capital. Besides, the firm's cash and bank balance comprises 5 to 11 % of
gross working capital and this is not at all a standard practice of a manufacturing firm
belonging to the category of heavy engineering industry. Moreover, the liquidity of
loans & advances and other current assets is a very doubtful case, as it remains more
or less static in the balance sheet through out the entire period of study. Under the
prevailing situation, the company should not lock up inventory to the extent of 40% or
more of gross working capital and Just- In- Time (JIT) Approach of Inventory

74

Management is the sole answer to appropriate inventory control for the firm under
study. Major portion of current liabilities includes salaries and wages, sundry creditors
for raw materials, expenses & others, statutory liabilities towards retired employees,
short term loan from holding company, deposits from contractors, advances onaccount - billing against WIP and partial delivery of goods, advances against orders
etc. Components of provisions include dues towards gratuity payment; leave
encashment, cess & cess surcharges, contingency provisions etc.
Thus, there is hardly any scope to generate internal resource for working capital from
commercial operation of the firm. Simply speaking, there has been a vicious circle
like, it cannot generate sales due to lack of working capital and it has no working
capital due lack of sales! The overall business prospect is bleak and the company is
found to be in the state of financial perplexity without any means to break the
aforesaid vicious circle for effective working capital management.
Working Capital Ratios show the financial ability of the firm to meet its current
liabilities as well as its efficiency in managing currents assets for generation of sales.
It needs no mention that cash/bank balance is converted into raw materials, raw
materials is converted into work-in- progress, work-in-progress into finished goods,
finished goods is converted into debtors and receivables through credit sales and
finally debtors to cash/bank and this cash to cash phenomenon is technically known as
operating cycle and shorter the operating cycle, greater the degree of efficiency in
working capital management. The Current Ratio and Quick Ratio of Heavy
Engineering Company Limited reflect that short-term liquidity and solvency is in
danger and it of course doubtful how the short-term financial obligation of the firm
would be met under such unsound financial position. The combined interpretation of
75

these two ratios reflects that the interest of short-term creditors is not at all protected
by inadequate solvency and liquidity of near money assets. On the basis of overall
analysis, it is therefore pertinent to state that the company has been suffering from
acute crises of working capital. Short- term liquidity and solvency of the firm is in
alarming position. Interest and financial security of the short-term creditors is at high
risk. Utilization of current assets should have been made in much more effective
manner. Under the prevailing circumstances, average inventory and debtors turnover
should have been in between 6 to 9 times if not 12 times. Current Assets consisting of
"Loans & Advances" and "Other Current Assets" are practically "non- performing
assets". Current Assets under these two Heads include escalation, residual and claim
for extra work, loans and advances to the subsidiary companies of the firm under
study and the subsidiaries of the firm under study have become chronically sick long
ago and they are just about to receive order of winding up from the appropriate
authority. It can thus be inferred that "Loans & Advances" and "Other Current Assets"
have hardly any role to contribute in sales/ business generation of the firm during the
period under study. Last but not the least, working capital is the blood and life-giving
force to the company and negative working capital cannot save the life of the firm in
any way.

Benefits that they are likely to derive:


Help reduce purchasing and inventory costs. Connect inventory control,
purchasing, and sales order processing with demand planning and help reduce
costs, improve cash flow, and help ensure that you have the right stock available
when you need it.

76

Gain visibility into inventory processes. Effectively balance availability with


demand and track items and their possible expiration dates throughout the supply
chain to help minimize on-hand inventory, optimize replenishment, and increase
warehouse efficiency.
Improve customer satisfaction. Make more accurate order promises and
intelligent last-minute exceptions with access to up-to-date inventory information.
Respond quickly and knowledgably to customer queries for improved customer
service.
Reduce time to market. With integrated order, inventory, and distribution
processes, as well as item tracking capabilities, your business can reduce manual
data entry and get your goods to market fast.
Maintain and Recall Product using Product Genealogy and Traceability.
Efficient and accurate product genealogy and traceability is important for
companies to mitigate the risk and exposure in product recall situations, in
addition to satisfying the basic controls required by regulators. Oracle Inventory
Management if applied can capture and maintain in a multi-level composition
history which component lots and/or serials were used in each lot or serialcontrolled end product, from supplier receipt through production and customer
shipment. If you identify a quality issue with a specific component lot, you can
efficiently identify the location of all of the end product in which that component
was used

77

CHAPTER 4
DATA ANALYSIS

78

DATA ANALYSIS
1.

Are you aware about Inventory Management

System?
i. Yes ------------------------------------------ 75 per cent
ii. No ------------------------------------------- 17 per cent
iii. Do not know/ Can not say ---------------- 08 per cent

Interpretation:
The awareness level among the company officials regarding the existence, functioning
and applicability of inventory management system is high that is 75 per cent, as per
the result of the study.

79

2.

Do you know that your company should have an


inventory management system?
(i)

Yes ---------------------------------------------- 72 per cent

(ii)

No ------------------------------------------------ 20 per cent

(iii)

Do not know/ Can not say -------------------- 08 per cent

Interpretation:
The company officials are aware about their company should have an inventory
management system. 72 per cent of the respondents do have this awareness as against
20 per cent+08 per cent of the respondents who are either not aware or not able to
provide any information in this regard.

80

3.

Do you agree that there should be an inventory


management system in place in any organisation / company?
(i)

Agree ------------------------------------------------ 68 per cent

(ii)

Disagree --------------------------------------------- 12 per cent

(iii)

Do not know/ Can not say ------------------------- 20 per cent

Interpretation:
According to the response to the above question, it appears that every
company/organisation should have a system or mechanism in place for managing
their inventory.

81

4.

For what reasons do you feel that there should be an


inventory management system?
(i) To smoothen operational requirement --------------------- 27 per cent
(ii) To save time ---------------------------------------------------- 22 per cent
(iii)

To maintain accountability and transparency ----------------30 per cent

(iv)Other reasons --------------------------------------------------- 15 per cent


(v) Do not know/ Can not say ------------------------------------ 06 per cent

82

Interpretation:
To everyones surprise, 30 per cent of the respondents feel that it is for accountability
and transparency purpose that inventory records are maintained and hence the need
for an inventory management system. This is followed by the need for saving time
and the requirement of operational smoothness.

83

5.

Do you agree that the inventory management system


in your company can fulfill the needs for which it needs to be evolved?
(i)

Strongly Agree ------------------------------------

20 per cent

(ii)

Agree -----------------------------------------------

47 per cent

(iii)

Disagree --------------------------------------------

15 per cent

(iv)

Strongly Disagree ---------------------------------

07 per cent

(v)

Do not know/ Can not say -----------------------

11 per cent

Interpretation:
From the above response, it appears that the inventory management system needs to
be more or less oriented to achieve its objectives for which it is sought after. This is
evident from the 67 per cent of the respondents opinion who have either agreed or
strongly agreed in favour of this proposition. However the response of 22 per cent of
the respondents who think otherwise also speaks something.

84

6.

What according to you will be the major benefit of


going for an inventory management system by your company?
(i)

It can make storage and retrieval of material easier -------- 37 per cent

(ii)

Can improve Sales Effectiveness ----------------------------- 26 per cent

(iii)

Can Reduced Operational Cost -------------------------------- 18 per cent

(iv)

Other Benefits --------------------------------------------------- 10 per cent

(v)

Do not know/ Can not say -------------------------------------- 09 per cent

Interpretation:
As regards the benefits of having an inventory management system by the company,
the respondents are of the opinion that the major benefit lies in relaxation in terms of
storage and retrieval of material. This is followed by increasing sales effectiveness
and reduction in operational cost. However, all these benefits are interlinked and the
separation between them is more analytical than anything else.

85

7.

Do you think you have skiled professionals in your


company for inventory management?
(i) Yes -----------------------------------------------

48 per cent

(ii) No ------------------------------------------------

30 per cent

(iii)

Do not know/ Can not say -------------------- 22 per cent

Interpretation:
Recruitment of skilled professionals well versed with latest inventory management
technology, particularly in engineering industry is a concern for the company as it
appears that it lacks in this domain.

86

8.

What category of professionals do you need to


manage your company inventory?
(i)

Skilled and trained ---------------------------------

32 per cent

(ii)

Only skilled but not trained -----------------------

16 per cent

(iii)

Non skilled but trained professionals ------------

20 per cent

(iv)

Non skilled and non trained professionals -------

25 per cent

(v)

Others -------------------------------------------------

07 per cent

Interpretation:
As already stated above in the earlier question, availability of trained and skilled
professionals for inventory management needs serious attention of the company

87

9.

Do you agree that your company should give more


emphasis on software than skilled manpower with regard to inventory
management?
(i)

Strongly

Agree

-------------------------------------- 18 per cent


(ii)

Agree

------------------------------------------------(iii)

52 per cent

Disagree

----------------------------------------------

15 per cent

(iv)

Strongly

-----------------------------------

07 per cent

(v)

Do

--------------------------

08 per cent

88

not

Disagree

know/

Can

not

say

Interpretation:
The above response gives an impression that the company should put greater
emphasis on software than skilled manpower for inventory details management.
10.

Do you think that your company can provide


software according to the design and needs of the system?
(i)

Yes

-------------------------------------------------- 86 per cent


(ii)

No

---------------------------------------------------- 10 per cent

89

(iii)

Do

not

know/

Can

not

say

------------------------- 04 per cent

Interpretation:
The company appears to be in a position to provide the software according to the
system requirement and design and according to the customers needs.
11.

What is the prime challenge before your company


with regard to inventory management?
(i)

Lack

------------------------------

42 per cent

90

of

trained

professionals

(ii)

Maintenance

cost

-------------------------------------------- 21 per cent


(iii)

Changing

---------------------

27 per cent

(iv)

Other

customers

06 per cent

(v)

Do

----------------------------------

04 per cent

91

of

problems

-----------------------------------------------

Interpretation:

requirements

not

know/

Can

not

say

Lack of availability of trained professionals coupled with maintenance cost and


changing needs of the customers are perceived to be the inventory challenges before
the company.
12.

Do you agree that it is operationally feasible to have


an inventory management system at the Driplex Water Engineering
Limited?
(i)

Agree -----------------------------------------------

57 per cent

(ii)

Strongly Agree ------------------------------------

34 per cent

(iii)

Disagree --------------------------------------------

07 per cent

(iv)

Strongly Disagree ---------------------------------

01 per cent

(v)

Do not know/ Can not say -----------------------

01 per cent

92

Interpretation:
From the above response, it appears that to set up an inventory management system at
the Driplex Water Engineering Limited is operationally feasible.

13.

What future do you foresee for the inventory


management system in your company?
(i)

Can

be

---------------------

43 per cent

(ii)

Depends

------------------------------

33 per cent

(iii)

Shall

as

successful

on

mechanism

changing

time

collapse

----------------------------------------------12 per cent


(iv)

Do

-------------------------------12 per cent

93

not

know/

Can

not

say

Interpretation:
The future of inventory management system at Driplex Water Engineering Limited, if
set up, appears to pretty good, going by the response of our study.

94

CHAPTER 5
CONCLUSION &
SUGGESTION

95

CONCLUSION AND SUGGESTIONS


Inventory is a quantity or store of goods that is held for some purpose or use (the term
may also be used as a verb, meaning to take inventory or to count all goods held in
inventory). Inaccurate inventory counts can cost you sales and delay shipments past
the promise date. Out-of stock items as well as overstocked items in inventory can be
devastating to your business. Additionally, an overstated or understated inventory
valuation can result in incorrectly reported assets within your financial statements.
Inventory Management offers comprehensive reporting capabilities to keep you on
top of inventory status. Centralized inventory management consolidates inventory
information by tracking lot numbers, on-hand levels and expiration dates, making the
re-ordering process more efficient. It also enables simultaneous tracking and
documenting supplies during studies to reduce redundant data entry and increase
workflow efficiency.
Inventory management software helps create invoices, purchase orders, receiving
lists, payment receipts and can print bar coded labels. An inventory management
software system configured to your warehouse, retail or product line will help to
create revenue for your company. The Inventory Management will control operating
costs and provide better understanding. We are your source for inventory management
information, inventory management software and tools.
SUGGESTIONS
utilization of increasingly sophisticated electronic data processing systems as
integral parts of material control, record, and data communications systems;

96

use of scientific or business type decision rules and formulas to make material
control decisions that optimally balance cost and material support effectiveness;
Development and implementation of various material standardization programs;
planning and coordinating material actions to assure properly phased support to
major items of equipment and/or weapon systems in test phases, in production, in
service, and during phaseout periods; and
monitoring the quality of input and output of automated inventory management
systems and recommending system and programming changes to improve
timeliness, accuracy, and utility of inventory information for users.
Inventory Control includes performing one or more of a wide variety of staff or
administrative functions such as:
Initiating, developing, installing, or administering a control program. Providing
guidance on or conducting surveys of supply and inventory management
functions.
Analyzing, evaluating, revising, or developing new inventory management
systems.
Developing long-range material support plans.
Directing, guiding, or reviewing material support programs, functions, and actions
implemented by others; and/or Performing quality assurance and review functions.

97

Inventory specialists satisfy these responsibilities by: Controlling and authorizing


funding for material so that the proper kind, quality, and quantity are available at
the correct time and place.
Maintaining records and controls over material in stock, due in, or planned for the
distribution system on a quantitative and monetary basis; and Controlling the
distribution or redistribution of stock within the supply system. Inventory
management work is classified in this series when duties and responsibilities
demonstrate that the preponderance of the work requires performing most of the
preceding functions and, at least three of the following:
Managing items with difficult supply and demand patterns related to seasonal
factors, program changes, changes in end-use applications, and similar elements;
Making supply system decisions which consider more than the status of an individual
item or the problem presented by a particular supply transaction, e.g.,
interchangeability of items among different equipment or systems; Exercising
substantially independent authority to establish and revise reorder frequencies;
establish stock levels for individual items on a selective basis; and manage assigned
items in such a manner as to achieve effective supply support while remaining within
authorized or available funds; Programming requirements for assigned items,
including phasing procurements and deliveries and determining best use of funds
saved through judicious management;
Reviewing planned work programs, schedules, and other planning data. Advising
others regarding major categories of material which will be needed and pointing out
material areas most likely to cause difficulties; Planning and coordinating material

98

support for assigned program or project areas including extensive provisioning


conferences and personal contacts to negotiate stock levels, phased production,
changes in work schedules, or other means of alleviating material problems;
Serving as a central point of contact and exchange of information for personnel of
supply, production, maintenance, and other organizations relative to material support
problems affecting an assigned program or project area; Recommending changes in
automated data bases and systems of data storage, formats, and reports; and/or
Participating in planning for new data processing systems in terms of defining the
nature of information required, organizational responsibilities, computer network
requirements, and the nature of output desired from inventory management systems.

APPENDIX
Questionnaire
1. Are you aware about Inventory Management System?
(i) Yes -----------------------------------------(ii) No ------------------------------------------(iii)

Do not know/ Can not say ----------------

2. Do you know that your company should have an inventory management


system?
99

(i) Yes ---------------------------------------------(ii) No -----------------------------------------------(iii)

Do not know/ Can not say --------------------

3. Do you agree that there should be an inventory management system in place


in any organisation / company?
(i) Agree -----------------------------------------------(ii) Disagree --------------------------------------------(iii)

Do not know/ Can not say -------------------------

4. For what reasons do you feel that there should be an inventory management
system?
(i) To smoothen operational requirement --------------------(ii) To save time --------------------------------------------------(iii)

To maintain accountability and transparency -------------

(iv)Other reasons --------------------------------------------------(v) Do not know/ Can not say -----------------------------------5. Do you agree that the inventory management system in your company can
fulfill the needs for which it needs to be evolved?
(i) Strongly Agree -----------------------------------(ii) Agree ----------------------------------------------(iii)

Disagree --------------------------------------------

(iv)Strongly Disagree --------------------------------(v) Do not know/ Can not say -----------------------

100

6. What according to you will be the major benefit of going for an inventory
management system by your company?
(i) It can make storage and retrieval of material easier -------(ii) Can improve Sales Effectiveness ----------------------------(iii)

Can Reduced Operational Cost --------------------------------

(iv)Other Benefits --------------------------------------------------(v) Do not know/ Can not say -------------------------------------7. Do you think you have skiled professionals in your company for inventory
management?
(i) Yes ----------------------------------------------(ii) No -----------------------------------------------(iii)

Do not know/ Can not say --------------------

8. What category of professionals do you need to manage your company


inventory?
(i) Skilled and trained --------------------------------(ii) Only skilled but not trained ----------------------(iii)

Non skilled but trained professionals ------------

(iv)Non skilled and non trained professionals ------(v) Others ------------------------------------------------9. Do you agree that your company should give more emphasis on software than
skilled manpower with regard to inventory management?
101

(i) Strongly Agree -------------------------------------(ii) Agree ------------------------------------------------(iii)

Disagree ----------------------------------------------

(iv)Strongly Disagree ----------------------------------(v) Do not know/ Can not say -------------------------10. Do you think that your company can provide software according to the
design and needs of the system?
(i) Yes -------------------------------------------------(ii) No ---------------------------------------------------(iii)

Do not know/ Can not say -------------------------

11. What is the prime challenge before your company with regard to inventory
management?
(i) Lack of trained professionals -----------------------------(ii) Maintenance cost -------------------------------------------(iii)

Changing requirements of customers ---------------------

(iv)Other problems ----------------------------------------------(v) Do not know/ Can not say ----------------------------------

12. Do you agree that it is operationally feasible to have an inventory


management system at the Driplex Water Engineering Limited?
(i) Agree ----------------------------------------------102

(ii) Strongly Agree -----------------------------------(iii)

Disagree --------------------------------------------

(iv)Strongly Disagree --------------------------------(v) Do not know/ Can not say -----------------------

14. What future do you foresee for the inventory management system in your
company?
(i)

Can

be

as

successful

mechanism

--------------------(ii)

Depends

on

changing

time

-----------------------------(iii)

Shall

collapse

---------------------------------------------(iv)

Do

-------------------------------

103

not

know/

Can

not

say

BOOKS
(i)

Biederman, David. "Reversing Inventory Management." Traffic World (12


December 2004): 1.

(ii)

Stevenson, William J. Production Operations Management. Boston, MA:


Irwin/McGraw-Hill, 2005.

(iii)

Sucky, Eric. "Inventory Management in Supply Chains: A Bargaining


Problem." International Journal of Production Economics Microsoft
Learning Vb.Net

(iv)

Teach Yourself VB.NET in 21 Days- Sams Pearson Education [Lowell


Mauer]Professional ASP.NET 2.0 Wrox Evajen, Hanselma, Muhammad,
Sivakumar, Rader]

(v)

ASP.NET 2.0 Uleashed-Sams Pearson Education [Stephen Walther]

(vi)

Software Engineering [Pankaj Jalote]

(vii)

Software Engineering [K.K. Aggarwal & Yogesh Sighn]

(viii) Beard, L. and Butler, S. A. (2000). Introducing JIT manufacturing:


its easier than you think. Business Horizons, 43, 61-64.

104