Professional Documents
Culture Documents
Inventory Management of JUSCO
Inventory Management of JUSCO
INVENTORY MANAGEMENT
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Jamshedpur Utilities and Services
Company
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ABOUT JUSCO
The Jamshedpur Utilities & Services Company (JUSCO) provides water and
sanitation services in Jamshedpur, a major industrial center in east India that is
home to Tata steel. Until 2004, a division of TATA steel provided water to the
city’s residents which was further converted into an independent utilities providing
company named JUSCO.
Jamshedpur Utilities & Services Company is today India’s only comprehensive
urban infrastructure service provider. A Tata enterprise, its services focus on the
Tata group purpose “to improve the quality of life of the communities we serve”.
Its services include water, power, infrastructure, public health and horticulture
services. Jusco works alongside civic bodies, large and small industries, local
government bodies, communities and individuals to deliver value through
sustainable solutions.
JUSCO intends to rise to the challenge of meeting India’s need for infrastructure
development in a sustainable manner by anticipating and addressing the country’s
growth needs such that the ability of future generations to meet their own needs is
not compromised.
It has also incorporated a modern system to track & resolve customer complaints
called JUSCO SAHYOG KENDRA (JSK) with the single focus of reducing time
required for resolution of customer complaints and improving the quality of
services provided.
As a result of JUSCO’s dedication, efficiency and service quality improved
substantially over the following years.
JUSCO’s vision is to be preferred provider of water supply and other urban
services throughout India.
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FUNCTIONS OF JUSCO
Ensuring planned development of the city taking into consideration requisite
infrastructure and future growth.
Providing and maintaining high quality of service level in respect of water.
Areas of business
Engineering procurement and construction: Planning, development
and maintenance of township infrastructure.
Power services division: Operation and maintenance of power
infrastructure and distribution of power.
Integrated township management: Providing civic and municipal
services in an integrated manner in a full-fledged municipal area.
Water Supply
ACHIEVEMENTS OF JUSCO
JUSCO, India’s first and only private sector comprehensive urban infrastructure
services provider, is winning contracts all over India, and awards and accolades
from around the world.
JUSCO was awarded the national urban water Award 2009 in the “citizen
services & governance” category by honorable president of India.
JUSCO was honored with “Award for TPM Excellence, category A 2008” by
Japan institute of planned maintenance (JIPM).
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5th Asia Water Management Excellence Award at Kuala Lumpur for its
contribution towards the water sector in the Indian subcontinent and Asia.
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INVENTORY MANAGEMENT
Meaning
Inventory or stock is the goods and materials that a business holds for the ultimate
goal of resale or repair. Inventory management is a discipline primarily about
specifying the shape and placement of stocked goods.
Types of Inventory
Inventory is generally categorized as raw materials, work-in-progress, and finished
goods.
RAW MATERIALS
Raw materials are inventory items that are used in the manufacturer's conversion
process to produce components or finished products. These are unprocessed
materials used to produce a good. Examples of raw materials include aluminum
and steel for the manufacture of cars, flour for bakeries production of bread, and
crude oil held by refineries.
WORK-IN-PROCESS
Work-in-progress inventory is the partially finished goods waiting for completion
and resale; work-in-progress inventory is otherwise known as inventory on the
production floor. For example, a half-assembled airliner or a partially completed
yacht would be work-in-process.
FINISHED GOODS
Finished goods are products that have completed production and are ready for sale.
Therefore, finished goods inventory is the stock of completed products. These
goods have been inspected and have passed final inspection requirements so that
they can be transferred out of work-in-process and into finished goods inventory.
Retailers typically refer to this inventory as "merchandise". Common examples of
merchandise include electronics, clothes, and cars held by retailers.
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Inventory management techniques
1) Identify responsible person
Identify a dedicated person who can take up the role of an inventory manager. This
will ensure you that someone has a clear overview of your inventory and can give
quick answers about the stock in hand. You might end up with a big mess if there
is no one responsible and several people are performing separate tasks.
4) JIT
The just-in-time inventory system is a management strategy that aligns raw-
material orders from suppliers directly with production schedules. Companies use
this inventory strategy to increase efficiency and decrease waste by receiving
goods only as they need them for the production process, which reduces inventory
costs.
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5) FIFO
FIFO stands for ‘First-in, first-out’. It’s an important concept of inventory
management. It simply means that your oldest stock (that was first entered in the
system) gets sold first (first-out), not your newest stock. This is particularly
important for perishable products so you don’t end up with unsellable expired
items.
7) Forecasting
One of the most important functions of good inventory management is accurately
predicting demand. But it’s not as simple as it sounds; perhaps this is the hardest to
do. There are so many variables involved and things can get quite unpredictable.
Here are a few things that can help you project sales numbers better:
Previous year’s sales during the same week/month
Current year’s weekly/monthly/quarterly growth rate
Confirmed sales from contracts and subscriptions
Seasonality and holidays
Planned promotions
Current trends in the market
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Inventory valuation methods
Inventory valuation is a key aspect of your inventory management toolkit, because
it allows you to evaluate your Cost of Goods Sold (COGS) and, ultimately, your
profitability. Different inventory valuation methods – such as FIFO, LIFO, and
WAC – can affect your bottom line in different ways, so it’s important to choose
the right method for your business.
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PROCESS OF INVENTORY MANAGEMENT IN
JUSCO
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1. Purchase Requisition
A purchase requisition form is a document used by a department to request that the
purchasing department order materials or merchandise. In other words, this form is
used by departments to notify the purchasing department that raw materials are
needed for production or merchandise is needed for the sales floor.
1. A need is identified
2. The necessary information is collected
3. A decision on the purchase is made
4. The purchase requisition is compared to the invoice and issued
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Purchase Requisition includes following criteria:
Material
Quantity
Unit of Measure
Expected Value
Delivery
Material
Quantity and Quality requirements – approval of sample required, volume
required monthly/yearly, personnel skills and competencies, quality
requirements and certifications, warranties and guarantees
Specification- description or part number, quality requirements
Payment terms
Delivery
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3. Quotation
Quotations refer to the most recent sale price a stock, bond, or any other asset
traded. In addition, most assets classes also quote the bid and ask price that
determines the final sale price.
Material
Quantity
Specification
Delivery
Rate per unit
Payment Term/ Methods
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4. Negotiation
Negotiation in the purchasing process which covers the period from which the first
communication is made between the buyer and the supplier until the final signing
of the contract.
A purchasing professional must aim to be successful in
their negotiations with suppliers to obtain the best price with the best conditions for
every item that is purchased.
Negotiation Objectives:
Purchasing staff should enter all negotiations with clearly defined objectives.
Without having objectives the possibility for the purchasing professional to
concede on price, quality or service is significantly raised. The negotiator should
enter into discussions with the vendor with precise objectives that they wish to
achieve for their company.
The objective should not be absolute and should allow for some flexibility. For
example, a negotiator may have worked with the vendor on their objectives on
price and service, but not quality. When the vendor starts to discuss quality, the
negotiator should refrain from any agreement where they are without a set
objective.
5. Purchase Order
When there is a confirmation by the supplier about the prices and availability if the
products then purchase order occurs.
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6. Goods Receipt Note (GRN)
Record of goods received at the point of receipt. This record is used to confirm all
goods have been received and often compared to a purchase order before payment
is issued.
Purchase order
Challan or Invoice
Storage Location
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7. Reservation
This means that a request has been made to the warehouse to keep materials ready
for withdrawal at a later date and for a certain purpose. This simplifies and
accelerates the goods receipt process.
A reservation for goods issue can be requested by various departments for various
account assignment objects (such as cost center, order, asset, etc.)
The purpose of a reservation is to ensure that a material will be available when it
is needed. It also serves to simplify and accelerate the goods issue process and
prepare the tasks at the point of goods issue.
It is also important that reservations are taken into account by Material
Requirements Planning (MRP), which means that required materials are procured
in time if they are out of stock.
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above said slow-moving materials, these materials are offered to all the other
departments. If a potential user is identified, these materials are transferred
to the storage location of the potential user.
The Remaining materials are then declared as “Obsolete”.
10. Write-Off
The Write-off sanction is taken from CFO based on proper identification and
authentication of obsolete materials which are then written-off from the accounts
books. These obsolete materials are then auctioned, identifying the best buyer of
these obsolete materials. It does not go as materials, they are sold as scrap.
Damaged/ broken materials shall be disposed off after obtaining approval from
CFO.
Folders
Authorization Letters
Material Reservation
Risk register document
Stock Verification report (Auditor)
Weekly stock verification Report
Good Receipt invoice
Registers
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PROPOSED STORES PROCESS
GOODS RECEIPT
(Suppliers logistics route , customers as
free issued, lease).
KJJJJJJJM
Identification and
traceability
Issue of materials
(Issue through SAP, Tally, other
sources)
Documentation at stores
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Difference between old procedure and modified
procedure of inventory management
In the old method the distribution channel was a concern of only the
inventory management department, which originated from the head of
department and ended with the store supervisor. Contradicting to this in the
modified procedure the distribution channel is a concern of all the sectional
heads, heads of department, financial analyst, stores in charge as well the
finance & accounts.
Records were maintained through the use of sap and excel in the old
procedure, where as in the new one data is maintained through sap or tally
and excel.
In the modified method weighment is done in order to record the tare weight
to assess the net weight.
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