A

Project Report
On

INVENTORY CONTROL MANAGEMENT

AT

(INTERIORS & PLANSTICS DIVISION)

TALEGAON PUNE

Submitted By:

PANDURANG S. MORE

Under the Guidance of

(NAME OF THE RESPECTIVE GUIDE)

MBA Supply Chain Management 2016-18

Submitted to

SAVITRIBAI PHULE PUNE UNIVERSITY

In Partial Fulfilment of Degree of Master of Business Administration (MBA)

1
 Certificate from the Institute
This is to certify that Mr. /Ms. Pandurang Sopan More have successfully
completed his/her Summer Internship project titled Inventor Control
management.

For the partial fulfilment of the course MBA of Savitribai Phule Pune
University during the academic year 2016-18

He / She has worked under our guidance and satisfactorily completed his/her
project work.

Place: Talegaon
Date:

Name & Designation of

Official

2
 Format of certificate from company/organization
This is to certify that Mr Pandurang Sopan More, student of Akemi Business
School, Pune has successfully completed Summer Project Report titled
INVENTORY CONTROL MANAGEMENT.

From 15th June 2017 to 15th Sept. 2017 with us. In partial fulfilment of Master
of Business Administration.

While completing the assignment, we found him to be very sincere and

hardworking. We wish him / her success in his / her future endeavours.

Place: Signature of Official Seal of

Company

Date: Name & Designation of Official

3
 Declaration

It is hereby declared that all the facts and figures included in the
Dissertation is a result of my own research and investigations
including formal analysis of the entire project work and the same have
not been previously submitted to any examination of this University
or any other University.

This declaration will hold good and in my wise belief with full
Consciousness.

Date:

Place:

Name & Signature of the Student

4
 ACKNOWLEDGEMENT

I, undersigned express my sincere, gratitude to following persons who

helped me in completing the project work.

Director:

Project Guide: Mr. Nilesh Wankhade

Manager / supervisor of the Industrial Unit: Mr. Sunil Kulkarni , Mr.

Chakaraj Joshi

Other officers / persons: Mr. Rohit Patkhar

Date:
Place:

Signature of the Candidate

5
 INDEX

SR.NO
CONTENT
. PAGE NO.

1 INTRODUCTION

2 OBJECTIVE

3 METHODOLOGY

4 COMPANY PROFILE

5 INVENTORY CONTROL

6 OBJECTIVE OF INVENTORY CONTROL

7 FROMS OF INVETORIES

8 TECHNIQUES OF INVENTORY MANAGEMENT

9 INVENTORY EXPLANATION

10 SUGGESTIONS

11 CONCLUSION

12 BIBLIOGRAPHY

6
INTRODUCTION

Inventory control has been attracting their attention of managers in

India for a long time for control purpose it is very essential to study
the inventory in detail – raw material, production components in
progress & finished goods and the cause for their size are different.

The size of inventory is dependent upon the factors such as internal

lead time for purpose supplier lead time, vendor relation availability
of raw material, government import policy in the case of imported
material, the annual consumption of the material.(ABC classification)
and the relative critically and the material(VED classification) the
size of inventory depends upon the production cycle time, the
percentage of machine utilization, the make / buy decoupling the
various stages of manufacturing.

The finished goods inventory in maintained to assure a free flowing

supply to the customers and for this the marketing department insists
on substantial finished goods inventory. The size also depends on the
company’s ability to stick the delivery scheduled of the client the
shelf life and the warehousing capacity.

Two factors which influence the inventories of all the types as, the
accuracy and detail of the final forecast- all the inventories are the
accuracy and details of cost all the inventories.

Geared for future requirement and are there for sensitive to this factor
and available storage space the logical sequence to these the shelf of
the items stores a factor consideration the case of perishable goods.

7
Here I concentrated on mainly B & C class items the procedure which
is discussed in later gave, how we control the ordering quality and
stock level.

How we can calculate in the inventory of any item of above class by

putting the values of future consumption lead time and necessary
costs.

In calculation part I take the number of machines consumed per

month from observation in the company and from the assumption and
there wasps and down in consumption for understanding how the
safety stock used the items like spring purchased part and gear
manufactured part taken for a sample of calculation.

8
OBJECTIVES

The inventory control is essential for every organization because 70 to

80% of capital has been used in inventory. So its control and to stop
pillferation and deterioration. We selected the TATA Auto comp. System
ltd. Because it can be the best for the study for the inventory control in raw
materials, finish goods and paint & BOP. Whenever one organization
invests his capital 70 to 80 % so every employee should be careful about
the rejection, scrap and about deterioration and fillferation. All employee
focus to zero PPM. Proper issue and receipt (proper counting of materials),
scientific store keeping and accounting. To get more profit we have to
account properly every rupees invested in inventory. My root cause to
make this project that how can construct this profit of this company from
inventory control. We have to stop the wastage of inventory. Find out the
sub contact details. Inventory usage in every area where inventory can
make control.

Industrialization has given rise to many problems, one of which is problem

of cost reduction and cost control. As the cost of materials accounts for
nearly 2/3 rds. Of the total cost, efficient materials management through
inventory control has become necessary. Increase in size and activities of
industrial organizations calls for more economics operations, so as to
achieve savings, and enjoy advantages of large scale production, which is
possible through inventory control. To overcome from above my project
objective is this.

TATA Auto comp. System Ltd. (TAPS-IPD DIVISION) practically

adopted the inventory control method i.e. FIFO & LIFO method.

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METHODOLOGY

This project is done in inventory control. The project carried out through
the full method

1. Working to TATA AUTOCOM SYSTEM LTD (IPD),

TALEGAON, PUNE
2. Introduction with the concern person and got the information from
them about industrial project.

3. Primary data collected from organizations different department like

raw material stores, finance, purchase and CSG. Bellow table show the
primary data collection report.

Dept. Question Answer

1) How many raw usage in a day?
Stores

Finance

Purchase

Customer
Service
group

4. Secondary data collection from the Am phenol Interconnect India

Pvt. Ltd. For FIFO & LIFO method inventory control which is practically
done in that firm.

10
COMPANY PROFILE:

ABOUT TATA AUTOCOMP SYSTEMS LTD.

Tata Auto Comp Systems Limited, promoted by the Tata Group, provides
products and services in the automotive industry to Indian and global
customers, including Ashok Leyland, DaimlerChrysler, Fiat, Ford, General
Motors, Honda, Hyundai, John Deere, Mahindra and Mahindra, Piaggio,
Tata Motors, Toyota and VW. Tata Auto Comp Systems has own
capabilities in automotive interiors and plastics, PV suspension systems,
engineering, mobility tracking solutions, tooling and supply chain
management. Tata Auto Comp Systems operates through offices in India,
Germany, China, Japan and the US. The Company also has 15 joint
ventures in partnership with leading companies from the global auto
component industry. With 30 manufacturing facilities and six engineering
centers, Tata Auto Comp Systems is rapidly growing its business in India
and overseas.

11
ABOUT TACO-IPD:

Build technology, business process capabilities and leadership; to become

global supplier in chosen areas of business, by 2015.
TATA AUTOCOM SYSTEM LTD (INTERIOR AND PLASTIC
DIVISION) is an ISO 9001 & QS 9000 and ISO 14001 and TS certified
company having branches & customer all over Globe. TACO-IPD one of
the leading injection molding company in India having turnover 850 cores.
Who is subsidiary to TATA MOTORS – PCBU/CVBU, PUNE units,
Pantanagar, Uttaranchal Units, and Sanand, Gujarat Units for Nano Small
car? Major supplier TML (TATA MOTORS LTD), General Motors Ltd.
(Halol, Gujarat and Talegaon, Pune), Mahindra Renault Pvt. Ltd.,
Mahindra & Mahindra, Nasik, Fait India automobiles Pvt. Ltd.

Company manufactures plastic interior & exterior components for

passenger vehicles comprising of Dashboard panels, Bumpers, Door
panels, Consoles, Pillar, Package tray, & etc.

MISSION:

Differentiation through Safety, Quality and Constant Innovation.

VISION:

Tata Autocomp will be amongst the Top Five Indian Auto-Component

Companies, Delivering value to all Stakeholders

12
VALUES:

Integrity:
- We must conduct our business fairly, with honesty and transparency.
Everything we do must stand of public scrutiny

Understanding:
- We must be caring, show respect, compassion and humanity for our
colleagues and customers around the world, and always work for the
benefit of the communities we serve.

Excellence:
- We must constantly strive to achieve the highest possible standards
in our day -to-day work and in the quality of the goods and services
we provide.

Unity:
- We must work cohesively with our colleagues across the group and
with our customers and partners around the world, building strong
relationships based on tolerance, understanding and mutual
cooperation.

Responsibility:
- We must continue to be responsible, sensitive to the countries,
communities and environments in which we work, always ensuring
that what comes from the people goes back to the people many
times over.

13
INVENTORY CONTROL

Introduction:

Inventory control is function of planning and maintaining the

right quality of material at right time. The stocking of large inventories
does not guarantee necessarily.
Inventory control aim at maintaining the optimum stock of goods at
minimum cost to the company.

As investment in inventory represent in many cases are one of the

largest item of business assets hence, the proper management and control
of the capital invested in
the inventory is most desirable.

It is the prime responsibilities of the financial executive to have a

proper management and control over the amount of investment in the
inventories so that it should not be unprofitable for the business.

14
Inventory control has the following aspects:

1. Size of inventory maximum & minimum level.

2. Establishing timing schedules procedures and lot of size for new order.

3. Ascertaining minimum safety level.

4. Coordinating sales, production & inventory policies.

5. Providing proper storage facilities.

15
OBJECTIVES OF INVETORY CONTROL

A] OPERATING OBJECTIVES
B] FINANCIAL OBJECTIVES

A] OPERATING OBJECTIVES

1. Availability of material:

This first and the foremost of inventory control is to make all types
of material available at all time whenever they are needed by the
production department, so that the production many not be held up for
want of material.

2. Minimizing the wastage:

Inventory control is essential to minimize the wastage at all levels

i.e. during its storage in the Warehouses or at work in the factory, normal
wastage in other words uncontrollable should strictly be controlled.

3. Promotion of manufacturing efficiency:

The manufacturing efficiency of the enterprises increase if right type

of raw material is made available to the production department at right
time

4. Better service to customer:

In order to meet the demand of the customer it is the responsibility

of the concern to produce sufficient stock of finished goods to executive
the order received.

16
5. Control of production level:

The concern many decided to decrease the production level in

favorable time and the inventory many be controlled accordingly.

B] FINANCIAL OBJECTIVES

1. Economy in purchasing:

Proper inventory control brings certain advantage and economics in

purchasing

the raw material.

2. Optimum investment and efficient use of capital:

The financial objective is to have an optimum level of investment in

inventories. There should neither be any deficiency of stock of raw
material so as to hold up the production process not should there by ant
excessive investment in the inventories so as to block the capital.

3. Reasonable price:-

Management should insure he supply of raw material at the reasonable the

low price without sacrifice the quality of it.

17
FORMS OF INVETORIES

1) Raw material:-

These represent inputs purchased and stored to be converted in to

finished product in future by certain manufacturing process on the same.

2) Work in process:-

These represents semi-manufactured product which need further

processing before they can be treated as finished products.

3) Finished Goods:-

These represent the finished product ready for sale in the market.

4) Stored and supplies:-

These represent that part of the inventory which does not become a
part of the final product but are required for production process.

18
Techniques of Inventory Management

Economic Order Quantity (EOQ)

It indicates that quantity which it fixes in such a way that the total variable
cost of managing the inventory can be minimized. Such cost basically
consists of two parts.

A) Ordering cost:

This in turns consists of the cost associated with the administrative efforts
connected with preparation of purchase requisition, purchase enquiries,
comparative statement and handling of more number of bills and receipts

B) Carrying Cost:-

These refer to cost of carrying or holding the inventory; it is possible to fix

the economic order quantity with the help of mathematical formula.

19
Fixation of Inventory Level

Fixation of various inventory levels facilities in initiating proper

action in respect of the movement of various materials in time.

The various levels which can be fixed are as below:

A) Maximum Level:

It indicates the level above which the actual stock should not exceed.
If it exceeds. It may involve unnecessary blocking of funds in inventory.

B) Minimum Level:

It indicates the level below which the actual stock should not reduce.
If it reduces, it may involve the risk of non-availability of material
whenever it is required.

C) Reorder Level:

It indicated that level of material stock at which it is necessary to take the

steps for procurement of further lots of material. This is the level falling in
between the two existences of maximum and minimum level.

D) Danger Level:

This is the level fixed below minimum level. If the stock reaches this
level, it indicates the need to take urgent action in respect of getting the
supply.

20
Calculation of various levels

1. Recorder Level:

Maximum Lead Time X Maximum Uses.

2. Maximum Level:

Recorder Level + Recorder Quantity – 9 (Minimum Uses X

Minimum Lead Time)

3. Minimum Level:

Recorder – (Normal uses X Normal Lead Time)

4. Average Level:

Maximum level + Minimum Level

5. Danger Level:

Normal Uses X Lead time for Emergency Purchases.

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Inventory Turn Over

Inventory turnover indicates the ratio of materials consumed to the average

Inventory

Held. It is calculated bellow:

Value of material consumed:

Average Inventory Used.

Value of material Consumed:

Value of material consumed can be calculated as below.

Opening stock + Purchases – Closing stock

Average Inventory Held:

Average inventory held can be calculated as below.

Opening Stock + Closing Stock

2

22
ALWAYS BETTER CONTROL (ABC Analysis)

This technique assumes the basic principal if “Vital Few Trivial Many
“while considering the inventory structure of any organization and is
popularly known as “Always Better control”. It is an analytical method of
inventory control which is aim at concentrating efforts in those areas
where
Attention is required most. It is usually observed that in practice only a
few number of items of inventory or value of consumption while a very
large number of items of inventory account for a very large number of
items of inventory account of investment in inventory of value of
consumption.
This technique classifies various inventory items according to their
importance e.g.
1. A Class consists of only a very small percentage of total number of
items handled
But important in nature.

2. B Class items include relatively less important items.

3. C Class items consist of very large number of items which are less
important.

The importance of various items may be decided on the basis of

following factors.

I Amount of investment.
II Value of material consumption.
III Critical nature of inventory items.

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 For Example:

% of Total Value/
No of % of Total Value
Class no. of Consumption Rs.
Items Consumption.
Items
A 300 6 5,60,000 70

B 1,500 30 1,60,000 20
C
3,200 64 80,000 10

TOTAL 5000 100 8,00,000 100

24
For Example: BETTER CONTROL (ABC Analysis) at TATA AUTOCOMP.

Category Black Red Yellow Green Blue Total

(A+B category Parts) 4 21 3 2 3 33
Total 4 21 3 2 3 33 17.06 Lac 26.59 Lac
12% 64% 9% 6% 9% 100% 1705874.62 2659124.5

Stock in
SUPPLIER MM 60 Oct 17 Net Sept Per Day Lead time Opening NET %Penetra Call up to Inventory ABC
Project SAP CODE DESCRIPTION No. of Norm Value Color
NAME Rate MRP MRP Req in days stk SHORT tion M/s SAPL value Category
days

MCM N2063062 SAPL MCM APPLIQUE-FRT S/D T/PNL LIQ PLTNM LH 210.19 4200 4620 231 1 3 291323.34 854 532 62% Yellow 532 179502.26 A

MCM N2063064 SAPL MCM APPLIQUE-FRT S/D T/PNL LIQ PLTNM RH 210.19 4200 4620 231 1 3 291323.34 620 766 45% Red 766 130317.80 A

MCM N2063067 SAPL MCM APPLIQUE-FRT S/D T/PNL HERB BEIGE LH 198.86 2800 3080 154 1 3 183746.64 168 756 18% Red 756 33408.48 A

MCM N2063068 SAPL MCM APPLIQUE-FRT S/D T/PNL HERB BEIGE RH 198.86 2800 3080 154 1 3 183746.64 70 854 8% Black 854 13920.20 A

MCM D0701463 Avesta MCM NB RR DR WEATHER STRIP LH 1 LIP 70.00 1500 1650 83 2 3 115500.00 300 1350 18% Red 1350 21000.00 A

MCM D0701347 Trimoorty FRONT DOOR CRUSH PAD LH 33.22 10000 11000 550 1 3 73084.00 1620 580 74% Green 580 53816.40 B

MCM F2062002 Mayur M300 BOOT ASM-PARK BRK LVR 53.17 10000 11000 550 1 3 116974.00 220 1980 10% Black 1980 11697.40 B

MCM F2061126 Maan plant MCM FRT S/D MAP POCKET RH (L) JETBLACK 95.12 8700 9570 479 1 3 136544.76 317 1119 22% Red 1119 30153.04 B

MCM F2061125 Maan plant MCM FRT S/D MAP POCKET LH (L) JETBLACK 95.12 8700 9570 479 1 3 136544.76 543 893 38% Red 893 51650.16 B

MCM D0701538G GMI MCM SWITCH BEZEL(L) FR LH 4PIN+DL(S) JB 0.10 2000 2200 110 2 3 55.00 555 -5 101% Blue -5 55.50 C

MCM D0701539G GMI MCM SWITCH BEZEL (L) FR RH 1 PIN(S) JB 0.10 2000 2200 110 2 3 55.00 1120 -570 204% Blue -570 112.00 C

MCM D0701546G GMI MCM SWITCH BEZEL (L) FR LH 1 PIN(S) JB 0.10 60 66 3 2 3 1.65 16 1 97% Green 1 1.60 C

MCM D0701547G GMI MCM SWITCH BEZEL(L) FR RH 4PIN+DL(S) JB 0.10 60 66 3 2 3 1.65 12 5 73% Green 5 1.20 C

25
Policies of control for A,B and C categories

1. Degree of Control.

A items as discussed earlier account for bulk of the annual uses value and
hence must attract our almost attention up to date and accurate records
should be maintained for these items. The inventory should be kept at
minimum by placing open orders.

B items should be brought under normal control made possible by good

record keeping and periodic attention. Little control is required for C
items.

2. Stock Records:

Detail records for good ordered, received, issued and goods on hand
should be maintained for ‘A ‘category items. Tight control and accurate
records are also required for scrap, loss and rejection of such items. No
such detailed records are necessary. Any routine method that ensures good
and accurate record is enough for B category of items.

3. Safety stock:

Safety stock should be less for a items. The responsibility of stock outs can
considerable be cut down by closer forecasting ,frequent reviewing and
more progressing items on the contrary, should have sufficient safety stock
to eliminate progressing and to reduce the probability of stock out.

26
Advantages of ABC Analysis.

A. A close and strict control is facilitated. On the most important

items which constitute a major portion of overall inventory
valuation or over all material consumption and due to this cost
associated with inventories may be reduced.

B. The investment in inventory can be regulated in a proper manner

and utilization of the available funds can be assured.

C. Help to maintain accurate stock record.

Steps in ABC Analysis:

1) Calculate use by value (Uses value = unit price X use volume)

2) Shorting the list into item by order of value descending.

3) Calculate percentage that each item contributes to total value.

4) Drive a cumulative percentage of value.

5) Evaluate cumulative list and identify appropriate break points.

27
Economic Lot Size:

Investment in inventories largely depends upon the quantities in which

they are ordered for replenishment order in larger lots infrequently reduces
administrative works but makes investment in stock large. Ordering small
lots frequently keeps investment low but increases – administrative work
the reasons are obvious. Small lots imply high order frequency more
purchase requisitions need to be raised, more frequently materials require
receiving and inspected, more frequently materials require to received and
inspected, more progressing to be done, more posting needs to be done,
more bills require to be handled. All these increase activities call for more
staff and higher administrative costs. A rational approaches, therefore is
needed to fix the ordered quantities of the items Inventory models under
the quantitative techniques mainly deals with this economics lot size
aspect of inventory control.

Economic Lot Size of an item Depends on following:

I Possibilities of placing repeat orders.

II Nature of Demand.

III Availability of discounts at different order quantities.

28
Lead Time Analysis

Lead time is the time that elapses between the realizations of the need
for the item until the fulfillment of the need. It is, therefore, total time
necessary to replenish stock of an item.

Elements of Lead Time

1. Time required by indenting department to convey requirements to

purchase.

Materials may be required as routine replenishments or for a specific use.

Purchase indents for regular items are generally raised by the stores as
soon as they are stock falls to bellow a pre-fixed level. Purchase indents
for non-stock items are generally initiated by the user department. The
duration of this element depends on the channel through which a
purchased indent is made to pass. Purchased indents of C items may be
initiated and sent directly to purchase department by the storekeeper.

2. Time required by purchase department to convert a purchase

indent into a purchase order.

When indent is received, the purchase department invites quotations. The

request for quotations, which is in various form and shapes is mailed to
certain selected vendors, samples are tested to a certain quality and terms
of delivery are locked into, such procedure enables the purchase
department to select a supplier, who can supply to goods of right quality,
at the right price, at the right time.

29
3. Transit time for goods to reach buyers works:

The transit time which depends on two major factors, (a) The distance and
(b) Mode of transports has the greatest bearing on the lead time of them.
Transportation time is less if the vendor is located nearby. Transit time
includes time required by buyer’s traffic department to collect goods form
transport’s good owns whenever necessary.

4. Time required by the receiving department to inward good.

Incoming goods are received and verified for quantity by the receiving
department. The department verifies the making of the packages before
accepting the delivery, unpacks and quantity actually received trolley
before inspection and prepares Goods Receipt Report(GRR).This may be
different in different organization Like GIN(Goods Inward
Note),GRIR(Goods Receipt and Inspection Report),GRN(Goods receipt
Note) like that.

5. Time required by stores department to take goods into stock and

update stock records.

The time of these elements includes time to:

a) Verify the quantity received against Goods Receipt Report.
b) Verify receipt quantity on stock card and work out the balance.
c) Arrange for storage of materials in to the respective bins or
trolley.

30
Major Part of Lead Time

Lead –time of an item can be divided into two parts: Internally lead-time
and External lead-time.

Internal Lead Time:

Also called buyers lead time, is the sum of surviving time and receiving
time. The servicing time includes time required by the buyer to call
quotations, compare quotations visit vendors, negotiate terms, obtain
sanction and receiving time is made up of the time required to increate and
inspect goods, move them between stores, deposit them into appropriate
stores and make entries stock cards.

External Lead time:

Also called as processing time or suppliers lead-time is made up of
administrative and manufacturing and delivery times required by the
supplier. External lead-time therefore is the time required to get the items
from selected supplier.

Control Lead Time:

Lead time of an item has a major influence on investment in Inventories.
The longer the Lead Time, Higher is the working as well as the Safety
Stock. Therefore the management must take a deliberate & determined
effort to reduce Lead time both External & Internal.

Internal Lead Time of an item can be reduced by the Following actions of

management.
 A selectively delegating power.
 B Better paper work procedures.
 C Fixed target for individual activities of Lead-time.

31
External Lead time of an item can be reduced by Following actions of
management:-

 A Developing local supplier.

 B Negotiating annual contracts with staged Deliveries.
 C Making suppliers carry Inventory at their Plants.

How Lead time information is utilized for Inventory Control?

Under ideal situation the fresh supply shall be received as soon as possible
the stock of an item reaches to zero. This is possible only if,

I The replenishment action at the right time.

II There is no increase in demand during the Lead time.
III There is no delay getting the suppliers.

A trigger point called recorder level satisfies the first condition. Trigger
is that level of stock at which the store-keeper is authorized to raise an
indent for replenishment of an item. Re-order Level under ideal situation
therefore equals “Lead-time” consumption.

32
Replenishment System

A replenishment system is means to decide “ when to order” &

“how much to order” The Former represents time of ordering & the latter
represents quantity to order the time of ordering can either be according to
“ Stock Level “ It can be according to Prefixed scale”

Fixed Order Quantity System

Fixed Oder system is also called fixed order system. Characteristics of the
system are:-

I Re-order quantity is always the same, which is usually Economic Order

Quantity.
II Replenishment action is initiated when the stock on hand sufficient to
meet demand during the Lead-time.
III Reorder level equals Safety Stock plus average consumption during
Lead-time.

Operation System.

The system is very simple & easy to operate. The Daily issue of item
posted on each Stock Register & stock balance is worked out & which is
compared with its Re-order Level.

Essentials of this System:-

A Incoming materials & material return from shops must been posted for
good inward Note & material Return Notes.
B Gate-Entry of the challans.
C Item should be received In correct quantities.

33
D Material offered to Q A Dept. for Inspection.
E OK material is kept on Respective locations.
F The balance on the stock cards should be periodically tallied with the
Physical Stock.
G Entries must be made on correct card.
H Individual issues & receipts should be posted.

Disadvantage of Fixed Order Quantity System.

A replenishment orders always at irregular which may be inconvenient to

order supplier.
B In case of item with the long Lead time. More the one order pending
with the supplier & there is every possibility of that they may be feel
of pending order at one time.

Two Bin Systems.

Two bins System which operators on the principal of re-order level

physically segregates on the entire stocks of any Item into bins. The
second bin contain stocks equivalent to Re-order level & is demand to be
sufficient to satisfy probable demand during the period necessary for
replenishment.

The first bins contain enough stock to satisfy the demand between material
& the placing next Order.

To start with stock from the first bin is consumed. The Empty of first bin
indicate that stock has a reach the order level & the same is to be
replenished stock is in the seconds bins then utilized until receipt of next
supply.

34
FIRST IN FIRST OUT

(FIFO METHOD)

First in first out method is adopted in the TATA Auto comp System Ltd
(Interiors & Plastic Division) for inventory control. It means first material
purchases are preferred for first take for production. Plastic Molding,
Assembly & painting is the nature of the business of Taco –IPD Ltd. As all
raw materials are received in batches & 80% raw materials are having
shelf life the best suitable method can be used is FIFO.

35
SUGGESTIONS:

Over viewing the whole inventory control system of a firm, following

suggestion can be made for better inventory control

The overall situation is that the firm has adopted F I F O (First In

First Out) method for inventory. I would like to suggest that they might
continue with the adaptation of F I F O method only because they are
dealing with the items with expiry dates. In addition to that they can go for
batch management.

Raising working capital they manage the working capital between

debtors & creditors by giving stipulated period of credit. I would like to
suggest raising the working capital finance. They may raise the working
capital finance; by bank credit / overdraft facility. This will helpful for the
development of the firm.

36
CONCLUSION:

The overall performance of the organization seems to be satisfactory. The

entire department related with material are very co-operative and help full.
In this period whatever data is required they have given me for
successfully completion of my project. Inventory control is the most
productive area to rebuild the company’s profit. The firm has adopted the
inventory control method i.e. F I F O. It is one of the best methods
followed in most of the organizations. By this method they can control the
inventories & purchases of raw material. This method also followed in FG
stores and seriously followed in paint & Bop stores. Paint and chemical
has shelf life so FIFO is the necessity to be maintained here.

For rising of working capital they manage between debtors & creditors.
This method is also good but the bank overdraft and etc. methods of rising
of working capital also better helpful in future.

37
BIBLIOGRAPHY:

- www.google.co.in

- www.inventory-management-system.com

- www.inventorybase.com

- Inventory Control & management

- Distribution & Logistics Management – Mr. Madhup Gandhi

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