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A

Project report
On
MATERIALS MANAGEMENT
AT
BHILAI STEEL PLANT

Submitted in the partial fulfillment for the Award of Degree of

BACHELOR OF BUSINESS ADMINISTRATION

FROM ST.THOMAS COLLEGE RUABANDHA BHILAI


AFFILIATED TO PT.RAVISHANKAR UNIVERSITY,
RAIPUR

GUIDED BY SUBMITED BY

NAMDEO BARANGE SONAM


SALGOTRA (TRAINING COORDINATOR
BBA 6TH SEMESTER HRD, BSP)
ST.THOMAS COLLEGE
A
Project report
On
MATERIALS MANAGEMENT
AT
BHILAI STEEL PLANT

Submitted in the partial fulfillment for the Award of Degree of

BACHELOR OF BUSINESS ADMINISTRATION

FROM ST.THOMAS COLLEGE RUABANDHA BHILAI


AFFILIATED TO PT.RAVISHANKAR UNIVERSITY,
RAIPUR

GUIDED BY SUBMITED BY

MR.ANIL MALIK SONAM


SALGOTRA
(SENIOR MANAGER 6TH SEM

MATERIALS MGT.,BSP) ST.THOMAS


COLLEGE
A
Project report
On

MATERIALS MANAGEMENT WITH


REFERENCE TO BSP

Submitted in the partial fulfillment for the Award of Degree of

BACHELOR OF BUSINESS ADMINISTRATION


From

PT. RAVISHANKAR SHUKLA UNIVERSITY RAIPUR (C.G.)

Session
2007-08

(Guided by) (Submitted by)


Mr. MANOJ VERGHESE SONAM SALGOTRA

St. Thomas College, Bhilai


Affiliated to Pt. Ravi Shankar Shukla University
Raipur (C.G.)
COMPANY CERTIFICATE
CERTIFICATE

This is to certify that the project on “MATERIALS


MANAGEMENT WITH REFERENCE TO BSP” submitted in
the partial fulfillment for the award of degree of BBA in St.
Thomas College affiliated to Pt. Ravi Shankar Shukla University,
Raipur is a genuine work done by Miss. SONAM SALGOTRA
under my supervision.

Mr. Manoj Verghese Mrs. Mariam Jacob


Project Guide H.O.D.
Management department

Dr. Reny George


Principal
(St. Thomas College Bhilai)
DECLARATION

I, the undersigned hereby solemnly declare that this

project entitled MATERIALS MANAGEMENT OF BSP

is a genuine profound work done by me under the auspice of my

project guide & other concerned executives. All the information

collected is authentic & to the best of my knowledge.

(----------------------)

SONAM SALGOTRA
ACKNOWLEDGEMENT

I would like to acknowledge my deep sense of gratitude to MR. S.N.SINGH


GM(HRD) , MR. ANIL SHARMA D.G.M(HRD) ,MR. ANIL MALIK
SR.MANAGER (MM) , MR. NAMDEO BARANGE , TRAINING
COORDINATOR HRD BSP AND MR. MANOJ VERGHESE ( FACULTY
OF COLLEGE, ST.THOMAS BHILAI) . It is outcomes of constant
encouragement an d in valuable guidance of my project guide.

Lastly, I would like to express my deep sense of gratitude to all who have
shared their in valuable time & helped me directly & indirectly in the
preparation of this project.

(SONAM SALGOTRA)
CONTENT

Chapter -1

1.1- Introduction of Materials Management

* Function & Importance.

1.2- About the company

* Introduction of company

* History of BSP

* Feature of BSP

Chapter – 2

2.1- Statement of objective

2.2- Statement of limitation

Chapter – 3

3:1 – Justification of study

3:2 - Research Methodology

Chapter – 4

4:1 Data analysis and interpretation


Chapter – 5

5.1- Materials Management of BSP

5:1:1- Material Planning & programming,

5:1:2- Objective and purchase

5:1:3 – Material budget

5:1:4 - Stock verification

5:1:5 - Issue of stores

5:1:6-Security and Fire Prevention

5:1:7 - Disposal procedure

5:1:8 – Standardization

5:1:9 - Classification

5:1:10 - Codification

5:1:11 – Inventory Control

5:1:12 - Inspection of stores

5:1:13 - Store keeping


Chapter – 6
6.1 FINDINGS

6.2 SUGGESTIONS

6.3 CONCLUSIONS
Chapter – 7

7.1 Bibliography
Chapter -1

1.1- Introduction of Material


Management.
1.1 INTRODUCTION OF MATERIAL MANAGEMENT

Materials Management

Meaning

In recent years the concept of materials management is being widely accepted


by industrially advanced countries for more effective coordination and
control over material because materials costs (including investment in
materials, handling cost, transportation and storage costs, insurance, wastage
and obsolescence costs etc.) constitute

“Material Management is a term used to connote controlling the kind,


amount, location, movement and timing of the various commodities used in
and produced by the industrial enterprise”.

“Materials Management is essentially an activity of an enterprise for the


procurement and use of materials distinctly separate from the process of
procurement and the use of human skills and labour for the ultimate
deployment to attain some predetermined objectives”.

“Materials Management is the function responsible for the co-ordination


of planning, sourcing, purchasing, moving, storing, and controlling.
Materials in an optimum manner so as to provide a pre-decided service
to the customer at a minimum cost”.

Functions of Materials Management


1) Materials Planning and programming :

Material planning and programming is the main function of


Materials management. It facilitates the procurement of material at
Proper time for manufacturing purpose.

2) Purchasing of raw material and capital goods :

Management’s next function is to purchase materials such as


quantity, quality, cost effectiveness.

3) Inventory control :

It ensures the provision of the required quantity of inventories of


Required quality at the required time with the minimum amount of
Capital investment.

4) Receiving storekeeping and warehousing :

The next function of materials management is to receive materials to


keep in stores and ware house.

5) Value engineering and value analysis :

Value analysis is a study of character – wise cost of an item such as


Quality, design, methods of manufacture consumption aspect etc.

6) Transportation – internal and external :

Transport and traffic department in a big manufacturing concern


Plays a significant role in the movement of materials to the best
advantage of the concern transportation.

7) Disposal of scrap and surplus


a) Obsolete
b) Surplus
c) Scrap
Importance of Material Management
1) Lowering cost content :

If effective materials management is done the cost content may be


kept at the lowest level.

2) Direct and Indirect method :

The cost of materials and indirect cost remain within control limit.

3) Minimum inventory loss:

Though an efficient materials management we can reduce the risk of


loss from fraud and theft.

4) Full utilization of tools and equipments :

Tools and equipments are effectively utilized provided there is


an execution of good materials management.

5) Cost records of material are made feasible :

By materials management, cost of materials used in different


department or job may be determined very easily.

6) Perpetual inventory system :

Preparation of accurate reports meant for management can only


Be possible through perpetual inventory system and availability
of other inventory records.

7) Ensuring receipt of right materials :

Material department duty is to see what is being supplied against his


orders and to ensure that he receives the correct material for the
money paid.
8) Good seller and buyer relationship:

Good buyer and seller relationship is very essential in an effective


material management.

9) Selection of suppliers:

In selecting suppliers, consideration should be given not only to


price but also to quality and delivery time.

10) Negotiation:
Negotiation work is effectively done by material management.

11) Reduction length of manufacturing cycle:

Effective use of men, material and machine reduces the length of


Manufacturing cycle.

12) Quality control is maintained:

Quality control is a technique of scientific management which has the


object of improving industrial efficiency by concentrating on better
standards of quality.
1.2- About the company

* Company profile
* Introduction of company
* History of BSP
* FACILITY
COMPANY PROFILE

Seven - time winner of Prime Minister’s Trophy for best Integrated


Steel Plant in the country, Bhilai Steel Plant (BSP) is India’s sole
producer of rails and heavy steel plates and major producer of
structural. The plant is the sole supplier of the country's longest rail
tracks of 260 meters. With an annual production capacity of 3.153 MT
of saleable steel, the plant also specializes in other products such as
wire rods and merchant products. Since BSP is accredited with ISO
9001:2000 Quality Management System Standard, all saleable
products of Bhilai Steel Plant come under the ISO umbrella.

At Bhilai IS0:14001 has been awarded for Environment Management


System in the Plant, Township and Dali Mines and it is the only steel
plant to get certification in all these areas. The Plant is accredited
with SA: 8000 certification for social accountability and the OHSAS-
18001 certification for Occupational health and safety. These
internationally recognized certifications adds value to Bhilai’s
products and helps create a place among the best organizations in
the steel industry
COMPANY INTODUCTION

The Bhilai Steel Plant - a public sector undertaking run by the


Steel Authority of India - was built with Soviet co-operation and
technology, and began production in 1959. It was deliberately
located in what was then regarded as a remote and "backward"
rural area, profits being secondary to employment in the planning
priorities of the time. BSP currently has nearly 55,000 permanent
workers on its direct pay-roll, of whom approximately three-fifths
work inside the 17 square kilometer plant and the remainder for its
associated mines and quarries, and for the purpose-built BSP
township. This compares with a regular workforce of 63,400 in
1987. In addition, on any one day there are at present something in
the region of 8,000 contract workers employed by the plant and the
township, and a further 3,500 - 4,000 employed by the mines.
Though a handful of managers, and a significant proportion of the
contract labour force, are women, all of the regular BSP workers
assigned to duties inside the plant are men.
Source of Raw Materials:

1. Iron Ore …. Dalli, Rajahara


Mines

2. Lime Stone …. Nandini Mines

3. Manganese …. Balaghat Mines

4. Sinter …. Sintering Plants


(SP-2, SP-3)

5. Coke …. Coke Ovens


(Coke sorting plants)

6. Converter Slag …. SMS – l l


Requirements for producing of one ton of Hot
Metal
(Specific Consumption)

Iron Ore …. 459 Kg

Lime Stone …. 850


Kg(Depending on Sinter Usage)

Manganese …. 800 Kg(50% in


burden)

Sinter …. 35 Kg

Coke …. 08 Kg

Converter Slag …. 30kg


Facilities
S.N Department Unit Capacity
o

1 Coke oven 8 Batteries of 65 3.3 million


ovens & 4.3 M high ton of BF
coke
2 Batteries of 67
ovens & 7.0 M high

2 Sinter Plant 3 Machines of 50 Sq M 8.3 MT of


hearth area sinter
3 Machines of 70 Sq M
hearth area
1 machines of320 Sq
M hearth area

3 Blast Furnace 3 furnace of 1033 cum 4.71 MT of


Hot
3 furnace of 1033 cum metal
1 furnace of 1033 cum

4 SMS-1 4 twin hearth furnace 2.5 MT of


steel

5 SMS-2 3 BOF of100/130 T 1.425 MT of


steel

6 Contt casting 3 single strand & 1 1.425 MT of


continuous caster steel

7 Blooming & 1150 MM blooming 2.15 of


Billet Mills Mill blooms
1000/700/500 mm cc
mill

8 Rail & 950/800 2 high 75 MT


Structural reversing mill
Mill
MAJOR LANDMARKS OF BSP
 Signing agreement for setting up the plant --------------------- Feb 2, 1955

 Commencement of work at site --------------------- May 6,1956

 Commissioning of blast furnace --------------------- Feb 4,1956

 Commissioning of power plant --------------------- June 4,1959

 Commissioning of S.M.S no.1 --------------------- Oct 1, 1959

 Commissioning of Blooming mill --------------------- Nov


12,1959
 Commissioning of Billet mill --------------------- Dec
24,1959

 Commissioning of Rail & structural mill --------------------- Oct 27,1960

 Commissioning of Merchant mill --------------------- Feb 2,1961

 Commissioning of Sintering plant no.1 --------------------- July3,1961

 Commissioning of wire rod mill --------------------- Sep 1,1967

 Commissioning of converter no.1 --------------------- July


29,1981

 Commissioning of continuous casting shop---------------------


July24,1984

 Commissioning of 1st twin heart ---------------------


Sep12,1986

 Commissioning of Blast furnace no.7 ---------------------


Aug30,1987

 Commissioning of coke oven battery no.9 --------------------- Mar31,1988

 Commissioning of second twin hearth --------------------- Jan1,1990

 Commissioning of third twin hearth --------------------- June


29,1992

Major suppliers

Apollo industrial corporation --- (Mumbai)

Ashok Leyland --- (Chennai state – in.)


Bhel --- (Bhopal, Mumbai)

Bharat petroleum gas ltd. - (Nagpur)

Birla corporation ltd. --- (Kolkata)

Cimmco Birla ltd. -- (New Delhi)

Dunlop India ltd. --- (Kolkata)

Siemens ltd. --- (Mumbai)

Simplex castings ltd. --- (Raipur)

H.m.t ltd. --- (Ranchi)

Chapter – 2
2.1- Statement of objective

2.2- Statement of limitation

2.1- Statement of objective

1) To study about procurement of materials in BSP


2) To know about the inventory control methods.

3) To study about the store-keeping procedure of BSP.

4) To know about the codification process used in BSP.

5) To study about the quality used in standardization of materials.

6)To make comparison of data of stock and spares

2.2- Statement of limitation

1) Due to lack of time the researcher were unable to study aspects in


detail of purchase deptt of BSP.
2) Limitation time also restricted the extend of the survey.

3) Managers were reluctant to disclose facts & data of BSP.

4) BSP is situated in vast area. The researcher was unable to visit


Each & every seasons of materials Department.

5) Then was high security avengement in BSP as it is a public sector

6) The attitude of employees was not good towards the researchers.


They were lacking of subject knowledge so they were reluctant to
Give date to the researcher.
Chapter – 3

3:1 – Justification of study

3:2 - Research Methodology

3:1 – Justification of study

The project work which is done by me on the topic


Material Management of BSP is the record of the original work done by me
& matter/ data which are collected by me is the full of real ideas &, real
thinking & the real perception of company that the what is the Material
function in their company justify my project. I have used companies
statement & their Material management document for getting true & real
information through going there & asking from the manager. The Material
function is the real justification of my study i.e. the project work is done by
me is the genuine & sincere work & the matters enclosed has not been
submitted for the award of any other degree or diploma in the university.

RESEARCH METHODOLOGY
• INTRODUCTION

• DEFINING THE RESEARCH PROBLEM

• RESEARCH PROCESS

• RESEARCH DESIGNS

• DATA COLLECTION

• RESEARCH HYPOTHESIS

• PREPARATION OF THE RESEARCH


REPORT

INTRODUCTION
Today is changing dynamic field to functional area of
management of increasingly important as compared to other fields.
Information in life is important as any research report, which keeps the
management in minimizing the risk & uncertainty through systematic
decision-making.

“Research is a systematic & objectives for analysis of


information relevant to the identification & solution of any problem in any
field.”

Research comprises defining & redefining problems,


formulating hypothesis or suggested solutions, collecting, organizing &
evaluating data, making deduction & reaching conclusions to determine
whether they the formulating the hypothesis.

Research seeks answers to certain questions which


have not been answered so far & which depend upon human efforts. It seeks
to only those questions of which the answer can be given based on this data.

Research is devoted to find the condition under


which a certain phenomena occur & the conditions under which it dose not
occur in similar circumstances. The term research contains of two words Re+
Search. “Re” means again & “Search” means to find out something new.
Thus, research is the process of which a person observes the phenomena
again & again collects the data & based on data he draws conclusion. This is
clear by the following:-

OBSERVES COLLECTION OF DATA


PERSON PHENOMENA CONCLUSION
AGAIN & AGAIN ANALYSIS OF DATA

Thus, research means to observes the phenomena again &


again from different dimensions. For example, one finds many theories of
learning due to the observation from different dimensions.

DEFINITION

1) “Research is a point of view, an attitude of inquiry or frame of mind”.


R.RAOK
2) “Research is and be honest, exhaustive, intelligent searching for facts
and their meanings or implication with reference to a given problem.
The product or findings of a given pieces of research should be as
authentic, verifiable & contribution to knowledge in the field studies.”

P.M. COOK
OBJECTIVES OF RESEARCH METHODOLOGY
The purpose of research is to discover answers to questions through the
application of scientific procedures. The main aim of research is to find out
the truth which is hidden and which has not been discovered as yet.

i) To gain familiarity with a phenomenon or to achieve new insights into it.

ii) To portray accurately the characteristics of a particular individual,


situation or a group.

iii) To determine the frequency with which something occurs or with which
it is associated with something else.

iv) To test a hypothesis of a causal relationship between variables.

TYPES OF RESEARCH

1) DESCRIPTIVE RESEARCH

Descriptive research design is also called


explanatory design. The descriptive study is typically concerned with
determining frequency with which something occurs or how two variables
vary together. It describes the characteristic of certain groups, e.g. users of
a product with different age, sex, education, etc. It estimates the
proportion of people in a specified population. Descriptive research
includes survey & facts finding enquires of different kinds. The major
purpose of descriptive research is descriptive of the state of affairs as it
exits at present. It is rigid & formal. Two basic types of research design
used in descriptive research are.

a) Case research design

It can be carried out in the areas such as a survey consumer attitude


toward a new product concept or it may be conducted in a library by the
survey of available secondary data. But it is generally used for collecting
cases
b) Statistical design

The statistical method involves study of a few factors in a larger number


of cases.

2) EXPLORATORY RESEARCH

In this research, the major emphasis is on the discovery of ideas &


insights. It is helpful in breaking broad & vague problem into smaller. The
exploratory study may also be used to clarify concept. It is formulating a
problem for more precise, establishing priorities, gathering information,
increasing the analyst’s familiarity with the problem. Exploratory study is
characterized by flexibility & by flexibility & informality.

Three basic types of research design used in exploratory research are-

a) Literature surveys

One of the most economical & quickest ways to discover hypothesis is


the work of others through a literature search. More useful sources of
such information are books, newspapers, government documents, trade
journals, professional journals & so on.

b) Experience surveys

Individuals with expertise, knowledge, & ideas about research subject


may be questioned. Such people include top executives, sales mangers,
other relevant people of the company in question & companies making
similar products salesman, wholesalers, retailers etc. It reflects an attempt
to get all available information from the people who have some particular
knowledge of subject under investigation.

c) Analysis of selected cases

The arbitrary selection of a few extreme examples and through analyses


of these. In some instances, detailed & intensive case analysis of a few
Selected individual or organization may particularly be helpful in
gaining ideas about possible relationship. A case study is characterized
by intensive study.

3) QUALITATIVE RESEARCH

Qualitative research is concerned with qualitative phenomena i.e.


phenomena relating to or involving quality or kind. This research is
important in the behavioral sciences where the aim is to discover the
underlying emotions of human behavior.

4) APPLIED RESEARCH

Applied research aims at finding a solution for an immediate problem


facing a society & industrial/ business organization.

5) EMPIRICAL RESEARCH

Empirical research relies on experience or observation alone, often


without due regard for system & theory. Empirical research
is appropriate when program is sought that certain variable affects
other variables in some ways.

RESEARCH METHODS VERSES METHODOLOGY

It seems appropriate at this juncture to explain the different between


research methods and research methodology. Research methods may be
understood as all those methods/techniques that are used for conduction of
research. All those methods which are used by the researcher during the
course of studying his research problem are termed as research methods.
Since the object of research, particularly the applied research, is to arrive at a
solution for a given problem, the available data and the unknown aspects of
the problem have to be related to each other to make a solution possible.
Keeping this in view, research methods can be put into the following three
groups:

i) In the first group we include those methods which are concerned


with the collection of data. These methods will be used where the
data already available are not sufficient to arrive at the required
solution.

ii) The second group consists of those statistical techniques which are
used for establishing relationships between the data and the
unknowns.

iii) The third group consists of those methods which are used to evaluate
the accuracy of the results obtained.

Research Methodology is a way to systematically solve the research


problem. It may be understood as a science of studying how research is done
scientifically. In it we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind them.
It is necessary for the researcher to know not only the research
methods/techniques but also the methodology.

For e.g. : an architect, who designs a building, has to consciously


evaluate the basis of his decisions, i.e., he has to evaluate why and on what
basis he selects particular size, number and location of doors, windows and
ventilators, uses particular materials and not others and the like. He has to
specify very clearly and precisely what decisions he selects and why he selects
them so that they can be evaluated by others also.

Thus, when we talk of research methodology we not only talk of the


research methods but also consider the logic behind the methods we use in the
context of our research study and explain why we are not using others so that
research results are capable of being evaluated either by the researcher
himself or by others.
IMPORTANCE OF KNOWING HOW METHODOLOGY OF
RESEARCH IS DONE?

Importance of knowing the methodology of research or how research


is done stems from the following considerations:

i) The knowledge of methodology provides good training especially to


the new research worker and enables him to do better research.

ii) The knowledge of research methodology is helpful in various fields


such as government or business administration, community
development and social work where persons are increasingly called
upon to evaluate and use research results for action.

iii) The knowledge of Research Methodology provides tools to look at


things in life objectively.

iv) The knowledge of Research Methodology helps the consumer of


research results to evaluate them and enables him to take rational
decisions.

DEFINING THE RESEARCH PROBLEM


In research process, the first & foremost step happens to be that of selecting
& properly defining a research problem. A researcher must find the problem
& formulate it so that it becomes susceptible to research.

The researcher’s problems in her project as follows


Problem of researcher’s project is to know the material planning, Problem
relating to design & specification, problem relating to procurement of
materials, & problems of material function.
RESEARCH PROCESS

In the research, cycle there is atypical truncation & integration between


the company & the customer

(a) The customer is interviewed about the truncation


(b) The interviewed is processed
(c) Than passed to a researcher
(d) He reports the findings to the client researcher
(e) From there the information is passed to through the management team
(f) To the line managers &
(g) Then to the front line who takes the necessary action
(h) The front line can include those responsible for the communication,
product design, customer service or sales.

Information from the customer passes directly to the front line


in the first instance. (a) The front line can then acts & modify behavior can
based on their specific information. Line managers can collect & collate the
information from the front line to the identify trends & exceptions to assist &
ensure that corrective action is taken. (b), the senior management team can
then take an overview of the data collected to determine strategic response to
be addressed across the company as a whole (c), there are four major benefits
to this approach for the general research. They are as follows:

Research process consists of series actions or step necessary to


effectively carryout research & the designed sequencing of these steps. The
previous chart shown about research process consists of a number of closely
related activities as shown through I to VII. However, the following order
concerning various steps provides as useful procedural guidelines regarding
the research process.

• Formulating the research problem.


• Extensive literature survey.
• Determining sample design.
• Preparing the research design.
• Collecting the data.
• Execution of the project.
• Analysis of the data.
• Hypothesis testing.
• Interpretation.
• Preparation of the research.
• Prevention of the Results.

1) Formulating the Research problem

There are two types of research problem, those which relate to states of
nature & those which relate to relationship between the variables. At every
outset the research must sign out the problem he wants to study i.e. he must
decide the general are of interest or aspect of a two steps are involved in
formulating the research, understanding the problem thoroughly &
rephrasing the same in to meaningful terms in analytical point of view.

2) Extensive Literature Survey

Once the problem is formulated, a brief summary of it should be written


down. At the function of research should undeclared executive literature
survey connected with the problem.

3) Development Of Working Hypothesis

After extensive literature survey, research should state in clear them the
working hypothesis or hypothesis. In development of working plays on
important role. Hypothesis should be very specific & limited to the piece of
research in hand because it has to be listed.

4) Preparing The Research Design

The research problem having been formulated in clear-cut terms, the


research will be liquated to prepare design i.e. he will have to state
conceptual structure with in research would be conducted. The preparation
of such a design facilities research to be as efficient as possible yielding
maximal information.
5) DETERMINIG SAMPLE DESIGN

All the items under consideration in any field of inquiry constitute a


universe or population. A complete enumeration of all the items in the
population is known as a census inquiry. It can be presented that in such on
inquiry when all the items are covered no elements of chance is left &
highest accuracy is obtained. But in practice this may not be true. Some of
the important Sampling design is-

 SIMPLE RANDOM SAMPLING


 CONVENIENCE SAMPLING
 JUDGEMENT SAMPLING
 SYSTEMATIC SAMPLING
 STRATIFED SAMPLING
 QUOTA SAMPLING
 CLUSTER SAMPLING
 AREA SAMPLING
 MULTISTAGE SAMPLING
 SEQUENTIAL SAMPLING

The researchers used sampling method in his project as follows

6) COLLECTING THE DATA

In dealing with any real life problem, it is often found that data at hand
are inadequate. There are ways of collecting appropriate data, which differ
considerably in contest of many costs, time & other resources at the
disposals of the researcher. But in the case of survey any one or more of the
following ways can collect data.

• By observations
• Through personal interview
• Through telephone interview
• By mailing of questionnaire
• Through schedule

7) ANALYSING DATA
After the data have been collected, the researcher turn to the task of
analyzing them. The analysis of data required no closely related operation
such as establishment of categories, the application of these categories to
raw data through coding, tabulating & then drawing statistical inferences

RESAEARCH DESIGN

Introduction of Research Design :

Decisions regarding what, where, when, how much, by what means


concerning an inquiry or a research study constitute a research design. A
research design is the arrangement of conditions for collection and analysis of
data in a manner that aims to combine relevance to the research purpose with
economy in procedure. The research design is the conceptual structure
within which research is conducted; it constitutes the blueprint for the
collection, measurement and analysis of data. As such the design includes an
outline of what the researcher will do from writing the hypothesis and its
operational implications to the final analysis of data.

Research design is the plan, structure, and strategy of investigation


conceived so as to obtain answers to research questions and to control
variance.

The research design consists of three important terms:-

i) Plan, ii) Structure & iii) Strategy

(i) The plan is an outline of the research scheme on which the


researcher is to work.

(ii) The structure of the research is a more specific outline or the scheme.

(iii) The Strategy shows how the research.

DEFINITIONS:
According to Green and Tull,

“A research design is the specification of methods and procedures for


acquiring the information needed.”

According to Bernard Phillips

“The blueprint for the collection, measurement and analysis of data.”

FEATURES OF RESEARCH DESIGN

i) Identifying the management problem


ii) Translating the problem
iii) Collecting information
iv) Reporting information
v) Analyzing information
vi) Specification of procedure
vii) Information has a value accuracy of information
viii) Generation of information
ix) Data collection method
x) Measurement approach
xi) Object to be measured
xii) Data to be analyzed
xiii) Supportive decision making

Importance of research design:

i) Dependent and independent variables


ii) Extraneous variable
iii) Control
iv) Confounded relationship
v) Research hypothesis
vi) Experimental and non-experimental hypothesis testing research
vii) Experimental and control groups
viii) Treatments
ix) Experiment
x) Experimental units.

COLLECTION OF DATA
The task of data collection begins after a research problem has been
defined & research designs process. The researcher should keep in mind
two types of data collection are used:-

PRIMARY DATA

These data are those data which are collected for the first time, & thus
happen to be original in character. There are several methods for collecting
primary data. Primary data are the actual information, which are received
by the researcher for social purpose from the actual field of study & for the
first time.

SECONDARY DATA

Secondary data are those which have already been collected by someone
else & which have already been passed through the statistical process.
Secondary data may either be published data. Usually published data are
available in books, magazines, reports & publication.

SOURCES OF DATA
SOURCE OF PRIMARY DATA

• Direct Observation

This method requires that the researcher should personally & directly
observe the conditions & incidents of his field of study. Direct observation is
the reliable method for gathering informative concerning the life, status,
conduct, behavior, language, festivals, customs & traditions etc. In this
observation, the observer should be absolutely detached & objective in
gathering facts.

• Questionnaire

Under this method, information is gathered through questionnaire, which


includes questions concerning different aspects of the subject of study, which
is to be filled by the respondents.

• Schedule

These are particular type of questionnaire, which is replied by the researcher


himself by questions asked to the informers.

• Interview

In an interview, the researchers meet people & discuss his social problems,
with them & this course of discussion is gathered fact.

The researchers used sample size in his project as follows

The researcher has not used the primary data.

SOURCE OF SECONDARY DATA


• Published sources

International publication U.N.O. publishes a number of journal & periodic,


which are the best source of secondary data.

• Government publication

The state govt. publishes data for their use that are very much
accurate & reliable.

• Reports of communities & committees

Various communities & committees of enquiry collect data that can


be use by these who are investigating on the related subjects.

• Semi govt. publication

Many semi- govt. publications like municipal corporation board


etc. publish data pertaining to birth rate, death rate, literacy rate
etc. that can be used for investigation.

• Commercial research, educational institutions,


universe, organizations etc.

These institutions also conduct enquiry & publishes their report


through which data can be used for investigation.

• Newspaper, magazines& letter to editors

Newspapers & magazines also provides data for investigation,


letters to the editor (of newspaper & magazines both) are published
that can be used.

• Unpublished sources
Personals rewards like bibliography, diaries, letters, memories etc.
form an important source of valid information in social research as
a personal document.

• Official records

Most of the organization maintains records of important


information, which are important source of data collection for
researcher.

• Other sources

Many other sources like film, radio, television, public speeches etc.
are some of the important source of information.

According I have define my project as follows-

As secondary data, the researcher has used magazines & officials


records
Of “BSP”.

Research hypothesis
1) The flow of production used in BSP in to purchase material at a right
quality & at a comparative lower prize.

2) EOQ method is used for controlling the inventory.

3) LIFO, FIFO method is used for store-keeping.

4) KODAK digit codification process is used in BSP

5) The best quality control process is used for materials.

6) Procurement of materials used by tender basis.

PREPARATION OF THE REPORT


Finally, the researcher has to prepare the report of what has been done by
him. Writing of report must be done with great care keeping in view the
following:-

The layout of the report should be as follows

a) PRELIMINARY PAGES

In this, the report should carry title & data followed by


acknowledgement. Then there should be a table of contents followed by a
list of tables & a list of graphs & if any, given in the report.

b) MAIN TEXT OF THE REPORT

• INTRODUCTION

It should contain a clear statement of the objectives of the


research & an explanation of the methodology adopted in
accomplishing the research.

• SUMMARY OF FINDINGS

After introduction there would appear a statement of findings &


recommendations in non- technical language.

• MAIN REPORT

The report should be presented in logical sequence & broken down


into readily identifiable section.

CONCLUSION

Towards the end of the main text, researcher should again put down the
results of his research clearly & precisely.

c) AT THE END OF THE REPORT


Appendix should be prepared in
respect of all the technical data. Bibliography i.e. list of books, journals,
reports etc. consulted, should be given in the end:-

1) Index should also be given specially in a published


research report.
2) Report should be in a concise, specific style & simple
language.
3) Charts & illustration in the main report should be used
only if they present the information more clearly &
forcibly.
4) Calculated confidence limits must be mentioned & the
various constraints experienced in concluding research
report operations may as well as stated.

d) REPORT WRITING

After analysis & interpretation, the data is presented


in a systematically typed or printed form.
Chapter – 4

4.1 Data analysis and Interpretation


This is the comparative study of stores & spares for the four financial
years .

Table 1

PARTICULARS 2004-2005 2005-2006 2006-2007 2007-2008


RS.IN CRORES RS.IN CRORES RS.IN CRORES RS.IN CRORES

A.STORES& 315.75 395.07 426.32 455.24


SPARES
B.NO. OF 4.84 5.29 5.12 5.13
MONTHS OF
CONSUMPTION

500
450 455.46
426.32
400 395.07
350
315.75
300
RS.INCR 250
200
150 STORES&SPARES
100
50
2004-2005

2005-2006

2006-2007

2007-2008

0
CHAPTER-5

5.1 MATERIALS MANAGEMENT OF BSP


5.1.1. Material Planning, Programming,
& Indenting

Material Planning:

Material planning is the scientific way of determining the requirements of


raw material, components spares and other items that go into meeting the
production needs within economic investment policies.

General:

In order to ensure that optimum inventory levels are maintained at all times,
it is necessary to plan and regulate the inflow of materials. For this purpose
forecasting of future requirements has to be as accurate as possible, the
indents are to be correctly prepared taking into consideration the stock and
dues in and the deliveries from suppliers are to be so regulated that both
excessive holding of stock and stock outs of material are avoided.

System of Material Planning:

A) Plant machinery and other items for capital works

b) Iron and steel


C) Pipes

D) Coal tubs

E) Winding and guide ropes

F) Power/trailing cables

G) Cement and ac sheets

Material Programming:

The system to be followed for planning the procurement of different types of


stores as explained above, incorporate time schedules for actions by various
users and purchase department. The time schedules constitute programmers
of action to ensure the following.

(a) Even distribution of procurement work throughout the year for all
concerned.

(b) Adequate time for purchase department to arrange commencement of


supply.

(c) Effective control on material costs.

(d) Proper timing of purchase of different types of stores to obtain


maximum benefits.

(e) Adequate time for general manages and controlling offers of various
stores.
(f) Even load of receipts spread over the whole year to enable proper
checking, inspection and timely issues by stores depots.

(g) Correct assessment of amount required for purchase well in advance


to enable accounts department to make available required funds in
time.

Material Indenting :

While material budgets dully concurred by financial authorities act as


authority for purchase action, actual purchase action will be taken only on
receipt of two copies of formal indents on indent form as shown in
annexure 54 by the purchasing agency from the indenters.

Types of Indents

a) Normal Indents: It is to be forwarded to purchase department for


capital items & centralized/deferred revenue items and to purchase cell
of respective area for decentralized and rate contract items.

b) Emergent Indents: Emergent indents will be submitted on pink


coloured indent forms only in those cases where procurement under
normal circumstances cannot be awaited due to an emergency/
breakdown.

c) Local Purchase Indents: indents for procurement by local purchase


will be submitted on yellow coloured indent forms where the
requirement for a particular centrally procured item could not be
anticipated and its purchase becomes urgent or inescapable.

CONCLUSION:
M
aterial planning, programming & indenting are integrated functions of
material management involving most of the departments of the
subsidiaries and CIL headquarters. Unless every
officer/section/department carries out their respective functions in time
and with company objectives in mind, problems of overstocking and stock-
outs cannot be tackled successfully. Timely actions by all concerned & co-
ordination at different levels will ensure optimum utilization of inputs,
resulting in reduction in costs and efficiency all round.

Flowchart of B S P
5.1.2Objective and purchase

 The primary objective is to procure plant and equipment , spares


and other stores and material required by indenters with a view
to:

(a) Helping and maintaining continuity of production by correct


supplies as per user’s requirement, in time.

(b) Ensuring that items purchased are most economical, taking into
account their quality, durability, efficiency etc.

(c) Developing effective and on-going vendor relationships to ensure


fair play and equity.

The Materials Obtained Shall Be:

(a) Of right quality:

(b) In right quantity:

(c) At the right time:

(d) At right prices:

(e) From right sources:


(A) Tender

Tender is the process of ascertaining the availability & prices of material in


sealed covers which are opened & scrutinized at a predetermined time by a
tender committee. It is implied that the materials covered by the tender
should give scope for competition.

Types of Tender:

1) Single Tender
2) Limited Tender
3) Open Or Advertised Tender
4) Global Tender

Tender Box:

Separate tender box are kept for different groups of tenders. They will be
marked x, y, z & are distinguished by different colors. The boxes are kept
locked & all the tenders received are deposited in the appropriate tender
boxes by the tenders themselves if delivered by hand or the purchased section
if received through post.

Tender Committee:

1) Those decided directly by the head of the purchasing department.

2) Those decided by a tender committee, which may consist of the head of


the purchase department, a representative from the accounts &
department head against whose purchase requisition, materials are
being procured.

3) Those which will be decided by the management or jointly by the


tender committee and the management.
(B) Registration of Suppliers:

In order to have dependable sources of supply of stores, spares and


equipment of right quality at the appropriate time, suppliers will be
registered after ascertaining certain basic facilities available with them.
Performance of such registered suppliers shall be reviewed from time to time.

The list of registered suppliers shall be kept up-to-date by each company by


including any additions in the list or removing names of such firms whose
performance are not found up to the mark. Each company will maintain the
following two lists:

(1) Suppliers priority list indicating the items

(2) Items priority list indicating the name (s) of suppliers

Each subsidiary company will circulate the up-to-date list of registered


suppliers together with the list of items for which they are registered to all
other subsidiary companies and coal India limited for their information and
guidance. This list should be circulated once in a year in the month of April.
The name of suppliers added/deleted to/from lists should be circulated to all
the subsidiary companies.

Procedure for Registration:

(a) Indigenous manufactures who own factory/workshop of their own and


Are, in the opinion of the inspecting officers, capable of producing
Materials of the required standard shall be registered.

(b) Sole agent/distributors in the case of imported stores and stockiest in case
Of imported stores and stockiest in case there are no agents/ distributors
In the country for any particular type or class of goods shall also be
Registered.

(c) For indigenous items, where the manufactures do not directly


market their products, distributors, authorized dealers or sole agents can
be considered for registration under special circumstances like for vehicle
spares.
(C) Payment to the Suppliers:

Payment against the supply orders placed either by the subsidiary company
or by CIL shall be arranged by the subsidiary companies, if not specified
otherwise. Wherever order is placed by CIL on any foreign supplier involving
requirement of more than one subsidiary company, payment shall be
arranged by CIL normally through letter of credit.

Payment for agency commission, if any, involved, may be considered in case


of necessity, subject to compliance of the government of India guidelines
issued from time to time. The name of the Indian agent with their full address
and the quantum of agent commission.

Payment from CIL, may also be considered, if felt necessary, by the CIL
management, even though order is placed against the requirements of one
subsidiary company by CIL (h.q.).

Payment Should Be Made:

- Payment authorities.

- Payment against supply of equipment.

- Payment against trail orders.

- Payment for spare parts & other consumable items.

- Payment through bank.


5.1.3 – Material Budget
Budget is an expression of a firms plan in the financial form for a period of
time in future. In other words, it is a statement in numerical/ quantitative
term expressing the plans, policies and goals of an enterprise for a definite
period in the future.

“Budget is an estimate of future needs arranged according to an orderly


basis, covering some or all of the activities of an enterprise for definite period
of time”.

The Purpose of Material Budget:

(a) To plan the purchase

(b) To determine the financial need for the budgeted purchases.

(c) To establish control on the consumption of the materials.

(d) To establish control on purchase

(e) To make arrangement of finance as per requirements.

(f) To develop plan for the consumption of materials by different


departments.

(g) To detect the deviations, trace the defect and apply correctives.

(h) To consider production schedule at the time of preparing planning and


controlling the consumption of materials.

(i) To suggest ways and means for improvement in the next period budget.

 Factors Governing a Material Budget.

1) The past rate of consumption and , its ratio with production

2) The financial burden and investment pattern.

3) The cost of materials.

4) The demand and supply curve.


5.1.4 Stock Verification.

General:

Stock verification is the process of physically counting/ weighing/ measuring


all items of stores held in the stores depots and colliery stores and to compare
the physical balances with stores recorded in the stock cards/ numerical
ledgers. The discrepancies detected if any, will be investigated promptly and
adjustment action taken at the earliest.

Object of Stock Verification:

A) Stores and materials held tally with the descriptions and Specifications.

B) The actual balances agree with the balances recorded in the stock cards /
Ledgers.

C) The discrepancies noticed are investigated and adjusted.

D) Proper arrangements exist for the safe custody, proper storage,


accountable proper issue of stores.

Types of Stores to Be Verified:

All items of plant & machinery, general and consumable stores, medicines
and medical stores, spare parts for mining and earth moving machinery and
drilling equipment and all charged off stores held in colliery/consumers units.

Responsibility:

Accounts department (internal audit) will be responsible for stock


verification of stores, material, plant and machinery. It will be carried out
departmentally under instructions from the chief materials manager by the
stores personal of the stores depots / units independently.
- Duties :

A) To ensure that before commencement of the financial Year, adequate


staff is positioned in all the areas and other places for stock verification.

B) To prepare 3 copies of annual stock verification Programmed.

C) To obtain progress report on stock verification periodically.

D) To carry out test check in the items verified by the stock verifiers.

E) To ensure that the reconciliation of discrepancies is carried out within


a specified period.

Stock Verifier:
1) To carry out routine verification of stock comprising of any of the
following:

a) Stores in the custody of stores depots/units.

b) Plant and machinery in stores ; and

c) Plant and machinery deployed in projects.

2) To carry out surprise verification of stocks wherever ordered by higher


Authorities.

3) To test check the postings on the receipt and Issue side in the bin cards for
The items verified by him to ensure that the receipt and issue side
Postings are genuine.
5.1.5 - Issue of Materials

The term issue hereby means supply of materials from stores to the various
workshops or departments of an organization.

Generally, tools are issued to workers at the stores counter. Materials such as
cotton waste, emery paper, soap, etc, are collected from the stores either by
workmen or foremen. Raw material and finished components are delivered to
work point either by the progress department or stores.

While Issuing Material Following Points Should Be Kept In Mind:

1) Planning of material requirement:

All requirements of material should be thoroughly planned. The bill of


Material gives estimates of different items of stores required.

2) Requisition of material:

Based on the quantities mentioned in the bill of Materials should not be


issued in excess of standards. If necessary, an additional bill of material
Can be issued by competent authority

3) Internal audit of issues:

All issues should be audited. Any excess/shortfall in issues should be


Explained and accounted for.

4) Control of waste:

Actual wastage should not exceed the standard Wastage fixed. Wastages
Should be examined and any variance should be reported.

5) Issue of sundry items:

Certain stores are required in various departments. Either the


Requirements can be budgeted or orders can be Placed strictly on the
basis of requirements.
5.1.6- Security And Fire Prevention..

Routine Steps for Security:

a) Security of stores is ensured by the security department through their


vigilance.

b) The depot officer and other personnel will ensure that necessary
precautions are taken to prevent loss by theft / fraud.

c) Every day, while opening the store, the depot officer will ensure that
the seals on locks are in order.

Some Important Points In Security Of Stores Is:

a) Responsibility & functions of assistant / security


officer.

b) Store gate passes.

c) In and out register.

d) Visitors.

e) Opening and closing of sheds.

f) General precautions.
Fire Prevention:

Fire is a great destructive natural force. Majority of fires which effect


materials, equipment and property are attributable to carelessness,
ignorance and lack of discipline and failure to observe regulations . The
prevention of fire is of vital importance and must be the concern of all.
Most fires can be prevented by common sense and good discipline and it is
vitally important that the highest possible standard of fire prevention is
achieved and maintained so that losses by fire may be reduced to
minimum..

Some Important Points to Prevent Fire:

a) Smoking
b) Inflammable Materials
c) Grass and undergrowth
d) Stacking
e) Spontaneous Combustion
f) Storage Of Petroleum Oil and Lubricants
g) Storage of gas cylinders
h) Storage of rubber
i) Electricity fire fighting equipment
j) Fire practice
k) Water supply

Conclusion:

All fires have small beginning and can be effectively tackled at this stage.
Fire fighting equipment is readily available. Suitability, serviceability and
most important the training in the use of this equipment are equally
important for effective control of fires in their initial stages. The persons
selected to man fire fighting organizations should be carefully selected and
properly trained in the use and maintenance of the fire fighting
equipments.
5.1.7Disposal of Stores

Disposal is a function of liquidating unnecessary Holdings in return for a


price. It releases valuable storage space and locked up investment. It is
Therefore, necessary to resort to disposal of unwanted holdings, with due
regard to economy and administrative convenience.

Unwanted Holdings:

a) Surplus serviceable equipment, stores and spare parts.


b) Old and unserviceable plant , machinery and equipment.
c) Second hand empties
d) Scrap

Some Important Points of Disposal Of Stores:

a) Surplus equipment

b) Surplus stores

c) Moveable and dead surplus

d) Surplus second hand empties

e) Unserviceable and scrap

f) Declaration of surpluses and unserviceable equipment and stores for


disposal.

g) Survey committee

h) Survey report

i) Formation of lots
5.1.8 Standardization

Standardization is a process of systematization of stores, based on reduction


of Varieties to a controlled workable minimum, leading to economy and
efficiency. Standardization is rationalized store keeping and it has great
importance in Inventory control as it leads directly to lower holdings and
thereby secure a reduction in material cost, without a corresponding
reduction in stock cover.

Aims of Standardization:

a) To achieve economy in terms of cost, human effort and conservation of


essential & scarce material.

b) To ensure maximum convenience by simplification Rationalization to


Increase productivity

c) To adopt best possible solutions to recurring problems consistent with


economy & convenience.

d) To define requisite levels of quality so that practical Evaluation of quality


and its attainment are made conveniently and economically.

Advantage of Standardization:

a) Standardizations lead to simplifications.

b) Standardizations lead to specifications and variety reduction.

c) Standardizations go a long way in ascertaining the best possible use of


material.

d) Standardizations facilitate the inter-changeability of parts and


components.

e) Standardizations facilitate performance evaluation.


f) Standardizations lead to easier, cheaper and quality procurement of
materials.
5.1.9. Classification Of Materials

It is essential for the employees of the material department to know about


the important materials being put to use in the organization. The operating
Staff, particularly the storekeeper is required to make a close study of the
Material during the process of storage, since he is responsible for their
safe custody , meticulous handling and storing without exposing them any
risk of damage , fire or pilferage.

The person in charge of materials department is also responsible for


classifying the material before they are sent for inspection , entered into the
stock ledger and kept in different bins. Therefore there is a essential
requirement to make the broad classification of material , according to their
nature use & service , so that easy handling of inventory may be possible.
Several items carried into a store are generally divided into the following
major types.

1) Raw material :

These are the raw materials and other supplies, parts and Sub-
assembles which the company purchases from outside sources,
Namely suppliers, dealers or manufactures . These items are to be
purchased and kept in stock before and during production of goods.

2) Purchased components :

These materials, other than above, purchased from the market and or
used in completing a manufacturing process are called components.

3) Work-in-progress :

An inventory not finally produced but still to go to manufacturing


process is called Work in progress or semi-finished goods.

4) Finished goods inventories :

These are complete finished products ready for sale. These products
Have been manufactured or assembled from production and in
process inventories.

5) MRO Inventories :

Maintenance, repairs and operating supplies which are consumed


During the production process and generally do not form part of
The product itself are known as MRO inventories.

6) Spares :

These are also called feed stocks .These are important inventories.
The spares are governed by special policies and their problems are of
special nature.

7) Inflammables :

Those items which are highly susceptible to fire, such as petrol


diesel , kerosene , films , paints , paper etc. fall under this category.

8) Packing materials :

These includes all types of packing materials such as paper wood


carvings , saw dust , straw etc.

9) Chemical :

Items like carbide, acids, etc can be classified under this category.

10) General Stores:

This category contains all those materials / items which do not


Fall under any of the categories of stores.
5.1.10 CODIFICATION

Any business organization stores a large number of items, often running into
thousands or lakhs. Therefore, there should be some means of identifying
them. Several departments use the same item by different names and store
them in different places.

Codification is the process of representing each item by a number or


alphabet. The digits of which indicate the group, the subordinate, the type
and the dimension of the item. Sometimes the location and suppliers name are
also included in the codification process.

Many organizations in the government, public and private sectors, have


developed their own system of codification.

Thus, codification is a process of representing each item by a number, the


digit of which indicates the group, the sub-group, the type, and the dimension
of the item.

 Code for equipment

 Code for spare

 Code for check digit

 Major class code of general consumables

 Code for minor class and detail class of general consumables.

 Code for SL.no of the items of general consumables.


Advantage Of Codification :

1) Facilities in avoiding long and unwieldy description.

2) Helps in providing accurate and logical identification.

3) Prevents duplication.

4) Makes standardizations of items.

5) Reduces the varieties.

6) Makes purchasing department more efficient.

7) Helps in making efficient recording and accounting.

8) Facilitates the mechanical recording.

9) Facilitates the pricing and costing.

10) Assured production as planned and as required.

Codification Methodology and Systems:

1) Alphabetical system of codification.

2) Numerical system of codification.

3) Decimal system of codification.

4) Combined alphabetical & numerical system.

5) Kodak system of codification.

6) Brisch system of codification.


5.1.11 - Inventory Control:

Inventory control is a system which ensures the provision of the required


quantity of inventories of required quality at the required time with the
minimum amount of capital investment. Thus, the functions of inventory
control are to obtain the maximum inventory turnover with sufficient stock to
meet all requirements.

“Inventory control is, then, concerned with the control of the quantities or
Monetary values of these items at predetermined level or within Safe limit”.

Essentials Of A Good Inventory Control System :

1) Classification & identification of inventories:

The inventory includes stock of raw materials, semi-finished goods,


Finished goods and components etc.

2) Standardizations & simplification of inventory:

For proper inventory control standardizations of material products as well


as simplification of the production is necessary.

3) Adequate storage facilities:

Adequate and well organized warehouse facilities with well equipped


Proper handling facilities must be there.

4) Setting different levels & reorder points:

Just to avoid the chances of over and under investment as well as running
short of an item during the course of production.

5) Fixing economic reorder quantity:

In determining the economic order quantity (EOQ), the two opportunity


costs, ordering costs and carrying costs should be balanced.
6) Adequate inventory records & reports:

Information about quantity in hand or in transit or on plants location,


E.O.Q, reordering points, safety level etc. should designed in such a way
that the clerical cost of maintaining these records must be kept at minimum.

7) Experienced personnel:

The last but not the least important requirement of a successful inventory
Control system is the appointment of intelligent and experienced personnel
in purchasing , production , and sales department.

Objectives of Inventory Control:

1) To minimize the financial investment in inventories:

The main objective of a system of inventory control is to minimize the


capital blocked in the inventories.

2) To ensure that the value of material consumed is minimum :

The inventory control has to ensure provision of the required quantity of


Material of the required quality at the required time with the minimum
amount of capital.

3) To meet demand fluctuations:

Flucations in demand are a rule rather than an exception in real life


Situation.

4) To allow flexibility in production scheduling :

The maintenance of higher level of finished goods inventory relieves


the pressure on production system and gives them scheduling flexibility.
5) To reduce surplus stock:

Reduction of surplus stock is one of the essential requirements of effective


inventory control.

6) To maintain the stock within the desired limit:

Inventory control facilitates in maintaining timely records of inventories


of all items.

7) To protect from various types of losses:

Inventory control protects the inventories from pilferage, theft, waste


loss, damages and unauthorized use .

8) To provide scientific base:

Inventory control provide scientific base for short-term and large-range


planning of inventory requirements.

9) To standardize information on stock level:

Inventory control standardizes and centralists and centralizes


information on stock levels & progress of stock issue.

Reasons of Carrying Inventories:

1) Smooth production.

2) Product availability.

3) Advantage of production of buying in large quantity.

4) Hedge against long or uncertain lead time


5.1.12. Inspection Of Stores

Inspection is an essential tool of quality control of all goods and materials


Purchased and received in the stores. Where there is no separate inspection
Department or where that department deals only with a limited number of
items of stores , the storekeeper may be required to undertake the
Examination of goods for quality as well as sum total of the number of
related characteristics or properties. A qualitative product should have the
following:

 Shape

 Colour

 Dimension and weight

 Composition

 Strength

 Workmanship of finish, etc.

Objectives of Inspection:

1) To get the materials and stores of right quality.

2) To procure the right quantity of materials.

3) To make the suppliers careful while supplying the materials to the stores
Department.

4) To use the money fruitfully

5) To keep the purchase and store staff always Watchful in order to avoid
Irregularity.
Advantages of Inspection:

1) Use of quality goods / materials:

Through inspection, the use of quality materials is ensure this facilitates


manufacture of quality products.

2) Increase of goodwill:

The goodwill of the business concern is enhanced due to high quality


production .

3) Cuts down repair and renewal costs:

Supplying production department with standardized items reduces the


cost of depreciation and cuts down repairs & cost.

4) Production of standardization goods:

An industrial concern which uses inspection of raw material becomes


capable to manufacture standardized goods .

5) Achievements of various savings:

Various Savings are bought because of lower cost curve.

6) Increase in profitability and employment:

Inspection of materials raises profitability and increases production which


leads to greater opportunities of employment.
5.1.13 Store Keeping
Storekeeping means to make safe custody of all the items of material stocked
in the storehouse the person looks after the storekeeping is know as the
storekeeper. He acts as a trustee of store house. Materials is kept in
storehouse in such a manner so that , the possibility of their being stolen or
damaged due to fire or any other cause is reduced and material can be easily
located.

Objectives of Storekeeping:

1) Minimizing cost of production :

The main objective of store keeping function is to minimize the costs


involved. Cost include storage cost, cost of capital, handling storage.

2) Providing efficient services to various department :

Receiving stores from the purchase department and checking with


The proper document and bring them on charge.

3) Establishing coordination :

The stores department is required to establish very good co-ordination


with the materials control department .

4) Advising the management :

The advice of stores manager relating with physical verification,


inspection, replenishment , obsolescence , disposal of scraps, etc.

5) Preservation of stores :

In order to preserve the materials and goods, there should be bright,


Airy, fire- proof and cross – ventilated storeroom in which materials
could be kept in safe custody .
6) Regular review of stores :

It is important to carry out a regular review of the physical existence


of stores in hand.

7) Complete record :

The storekeeper duty is to maintain proper records of material


received and issued to production department.

Functions of Storekeeping:

1) Receipt of material :

The receipt of the materials and making necessary entries in the


material receipt book and daily receipt voucher , the storekeeper
proceeds to check the quantity of materials.

2) Storage and preservation of material :

The store keeper is responsible for placing the materials in their


appropriate places inside to store and for ensuring that they are
maintained in good condition .

3) Maintaining stores record :

Proper maintenance of records assists the management in minimizing


the cost of storage.

4) Issuing material :

The last function of storekeeping is to issue correct materials against


demand under proper authority .
Chapter – 6

6.1 Findings

6.2 SUGGESTIONS

6.3 CONCLUSIONS
6.1 Findings

As the main objective of this project is to know about the material


management and its functions in BSP through effective material management
the organization may achieve their target.

I have find out in this project that the effective inventory control minimize the
financial investment in inventories because the capital requires carrying
inventories cost money & holding assets in the form of inventories results in
decreased liquidity through inventory control to meet its demand.

I have find out that the efficient store keeping minimize cost of production,
providing efficient services to various departments, establishing co-ordination
& advising the management.

The BSP has used the KODAK system for codification which is very useful
for the identifying the materials.

In BSP the material is purchased from the different vendors. The company
give notice & issue the tender & the who supplier fulfill the terms &
condition of the tender given to them. Tender issue in 1 to 5 bid option
acoording to requirement.
6.2 Suggestion

On the basis of my survey. I discovered few points that if considered will add
up to its profit & goodwill. Following are some suggestion with the best of my
knowledge.

1) As we know BSP use inspection at the time of production only, I suggest


they should provide inspection after production also

2 To maintain the flow of production, the BSP should purchase materials


at a right quality, in a right quantity, at a comparative lower price &
to ensure a uniform flow of materials.

3) The BSP should adopt the best method of inspection & the inspection
Officer or inspector must be qualified & honest person for maintaining
the quality.

4) The company should store their materials in a proper manner. The


possibility of their being stolen or damaged due to fire or any other cause
is reduced & materials can be easily located & issued as when required by
production department.

Material Management is a service function & having a great


importance to other section. By material management the company gets
many benefits like lowering cost content, to classified the materials, to
codification of materials etc. and to adopt this material management
function the company will achieve their target.
CONCLUSION
Material management as name suggest management of materials. As we know
the cost of materials for any of the industry in the world is approximately
64% to 65 % if the cost of material is reduce for the industry then any of
company in the world can make unbelievable profit. The main motive of this
sentence is to elaborate the value of material at the industry like Bhilai steel
plant. Where almost 1 lakh to 1.5 lakh materials are required to run plant,
everyday.If these are used properly without miss use and with proper
management then definitely can be maximized.

Bhilai steel plant is a fully integrated plant, they have good purchasing
facility,they have well store system and also good inventory control. In Bhilai
steel plant all the functionality of material management is integrated system
like purchasing, store, inspection, inventory control and also finance. MMIS
is the department which is working for integrating of plant.

Material management increases the profit, since the best quality of product
can be made at lowest possible cost. It makes good buyers & seller by
providing qualitative produce at reasonable price. Tools and equipments are
effectively provided there is an execution of good material management.
In an industrial organization the materials manager is required to keep the
wheel of the industry moving. However lot of crises is arising before the
materials managers now days are being pushed to tight corner.

Many problems are faced by the materials management like material


planning. Design & specification, procurement & obsolescence are the main
problem in material management.

Chapter – 7

7.1 Bibliography
1) VARMA, M.M., (EDS.) (1984)
‘MATERIAL MANAGEMENT’. NEW DELHI:
SULTAN CHAND & SONS EDUCATIONAL PUBLISHERS.

2) SHARMA, P.C.,
‘WHAT IS MATERIAL MANAGEMENT’. NEW
DELHI: KITAB MAHAL PUBLISHERS.

3) AGARWAL, C.B.,
‘MATERIAL MANAGEMENT’. NEW DELHI:
FORWARD BOOK DEPOT EDUCATIONAL PUBLISHERS.

4) INTERNET:

a) WWW. GOOGLE.COM
b) WWW.SAIL.CO.INWWW.SAIL.NET
c) WWW.WIKIPEDIA.COM