Investigation of inventory management technique lucky cement and cement industries for

effective supply chain management

A project proposal submitted

By

Aqib

To

Department of Business Administration

In partial fulfillment of

The requirement for the

Degree of

MASTER OF BUSINESS ADMINISTRATION

In

Supply Chain Management

This Project has been

Accepted by the faculty

FACULTY OF BUSINESS ADMINISTRATION

Mr. Kashif Shafiq (Advisor)

Table of content Page

1. Introduction ………………………………………… 03

1.1. Background……………………………………. 03

1.2. Project research problem………………………. 03

1.3. Purpose of the research Project………………… 04

1.4. Research questions……………………………… 05

1.5. Significance of the project ……………………… 05

2. Projected related literature summary………………… 06

3. Planned research methodology………………………… 11

3.1. Method…………………………………………… 11

3.2 Approach................................................................... 12

3.3 Data Collection……………………………………… 12

3.4 Ethical consideration………………………………… 14

3.5 Schedule for completion…………………………… 14

References……………………………………………… 15
 Introduction

1.1Background:

Aqib due to unavailability of light so that I could not change the introdusction of company

kindly serach on google introduction of lucky cement pakisatn and past on this paragraph

and remove abbot lab……

Abbott Laboratories (Pakistan) Limited (the Company) is a public limited Company incorporated

in Pakistan on July 02, 1948, and its shares are quoted on Pakistan Stock Exchange. The address

of its registered office is opposite Radio Pakistan Transmission Centre, Hyderabad Road,

Landhi, Karachi. The Company is principally engaged in the manufacture, import and marketing

of research based pharmaceutical, nutritional, diagnostic, diabetic care, hospital and consumer

products.

1.2 Project research problem:

As business progresses distinct issues emerges which require diverse arrangements that should

be settled at time for dependability of the organization and for future development. The stock

starts to turn out to be a lot of a bunch. The organization is facing uncertainty in regard of

shortfall and overflow of completed great items stock since manual requesting of stock from

branch-end and no legitimate man-made reasoning framework has been incorporated so far that

outcomes in deficiencies at branch level and even at back-end level. Clearly there isn't just a

single direction exchange of stock from the back-end however there happens inside exchange

between the branches that makes the procedure excessively complex with no mechanized
framework. Inventory management is a famous piece of any business element on the grounds

that Ineffective stock framework prompts client misfortune and lessening in deals.. Attempted to

study the linkage between the performance of the components of inventory such as raw material,

work in progress and finished goods and financial performance of Indian manufacturing firms.

The study revealed that finished goods inventory as inversely associated with business

performance while raw material inventory and work in progress did not have much effect on

same. They emphasized that instead of focusing on total inventory, an attempt should be made to

concentrate on individual components of inventory so as to adequately manage the same. They

concluded that managers not paying heed to inventory performance may become weak in

combating competitors. Undertook an in-depth study of inventory management practices

followed by Indian cement companies and its affect on working capital efficiency. The study

also investigated the relationship between profitability and inventory conversion days. The study,

using a sample of the top five cement companies of India over a period of 10 years from 2001 to

2010, concluded that a considerable inverse linear relationship existed between inventory

conversion period and profitability. Many researcher has studied and researched on the cement

industries in the world wide but no one has still researched on the inventory management

techniques in cement industries so that there is research gap so that there is also need to

investigate the research on this topic. Lucky cement and cement industries wanted to rely on

academic research on this behalf but it could not because there is a literature gap in this regard.
Lucky cement and cement industries understands this literature gap and wants to support my

research which will not only fill the literature gap to an extent but also useful for the company.

1.3 Purpose of research project:

The Purpose of the research is to:

To investigate the inventory management techniques related risks of lucky cement and cement

industries analysis the issues in such manner and provide the suitable recommendations to the

Organization for better inventory management techniques.

1.4 Research questions:

1. What are the current practices and policies in relation with an inventory management in lucky

cement and cement industries?

2. What are the Strengths and weaknesses of managing an inventory management in Lucky

cement and cement industries?

3. What are the opportunities and threats for Lucky cement and cement industries with respect to

management of an inventory management?

4. Can Lucky cement improve its inventory management system?

1.5 Significance of the Project:

Study contains of various component of inventory management system which controls inflow

and out flow of inventory so as to reduce uncertainty. This investigation will give an exhaustive

data of all the constituent that is important to expand the productivity of the organization with the

objective that may obtain essential stock of items and make it simpler for the general population

include in move in or exchange out of the inventory. Capital put resources into inventory to be at

ideal dimension it should neither one of the uncontrolled or lacking. The target of Inventory the

executive is keeping up the inventory at ideal dimension. If company invests more in inventory

that results in increase in cost of funds and in this way, it shrinks the profitability of the

company. Inventories might be use in improper manner, robbery and builds the expense as far as

interest in inventory and increment in the warehousing cost. The best possible administration of

the inventory will exclude the stock-out problem that a company otherwise would experience in

inappropriate inventory management.

2- Project Related Literature Summary

The background of my degree is supply chain management. Inventory management techniques

are very important for effective supply chain management (Yin, 2013). Hence, my research is

very strongly related to degree studies.

Asserts that inventory means “Piles of Money” on the shelf and the profit for the firm. However,

he notices that 30% of the inventory of most retail shops is dead. Therefore, he argues that the

inventory control is facilitate the shop operations by reducing rack time and thus increases profit.
He also elaborates the two types of inventory calculations that determine the inventory level

required for profitability. The two calculations are “cost to order” and “cost to keep”. Finally, he

proposes seven steps to inventory control.

The economic order quantity (EOQ) approach can be regarded as the conventional method for

purchasing materials. EOQ is the quantity of material within an order that minimizes the total

costs that are required to order and hold inventory (Harris, 1915; Peterson and Silver, 1979;

Fazel, 1997). This approach leads to placing of large-sized and infrequent orders (Schonberger,

1982). This approach was originally conceptualized by Harris (1915) in 1915. Fazel et al. (1998)

suggested that Harris’ (1915) model can be modified to incorporate different price discount

schemes to better reflect the industry practice. The EOQ approach has been a fundamental

technique for inventory management decisions and continues to be the starting point in the

development of many subsequent inventory purchasing models (Ray and Chaudhuri, 1997;

Charabarty et al., 1998). Materials can also be purchased in a just-in-time (JIT) fashion (Low and

Chan, 1997; Monden, 1998), which advocates smaller-sized and more frequent orders. This

approach was originally explored by Kanzler as a method for reducing inventory levels at the

Fordson Tractor Plant in the 1920s (Peterson, 2002). The JIT purchasing method is an important

technique of the JIT philosophy, which is regarded as one of the most important productivity

enhancement management innovations of the twentieth century in the manufacturing industry

(Schonberger, 1982). The JIT approach provides the right materials, in the right quantities and
quality, just in time for production (Vokurka and Davis, 1996). Although it was originally

introduced in the manufacturing industry, the implementation of the JIT purchasing approach has

been extended beyond that. Its successful implementation in many industries prompted many

companies that are still using the EOQ approach to ponder whether they should switch to the JIT

purchasing approach for managing their inventories.

Sustainable operations also cover the innovative distribution strategies with maximum economic

returns (Upton et al., 2001; Anderson and Weitz, 1992). The products and processes as a result of

sustainable manufacturing have no hazardous impact on human health and society (Sangwan et

al., 2018; Preuss, 2000). Sustainable manufacturing also maximize the new opportunities for the

firm in terms of new product development and new market development (Brones et al., 2014).

The sustainable products are able to fulfill the need of their functionality at consumer end

(Mancini et al., 2017; Joshi and Rahman, 2015). The sustainable manufacturing at focal firm is

dependent on many stakeholders. One of the major stakeholders is the suppliers of raw material.

Therefore, the sustainable manufacturing requirement expands to supplier level operations also

(Frostenson and Prenkert, 2015; Seuring, 2010). Sustainable supply chain management leads to

the improvement and management of the processes at every node including manufacturing

(Gualandris et al., 2015; Kumar et al., 2011). Sustainable manufacturing help the firms to operate

profitably and improve their productivity (Hillis and Duvall, 2012). Sustainable operations at

shop-floor ensure the reliability of products produced (Zackrisson et al., 2017). Sustainable
operations act as a system which converts the resources into value for consumers (Evans et al.,

2017). The environmental hazards like greenhouse gases emission, generation of pollutants and

residue to fill the land can be avoided with sustainable manufacturing operations (Duflou et al.,

2012). Minimization of waste during production process and minimum use of inputs such as

water, air are integral considerations in sustainable manufacturing operations (Abdul-Rashid et

al., 2017; Yusuf et al., 2013 ; Bracho, 2000). The processes are designed in such a way that it

helps in conservation of energy, water and land. The sustainable manufacturing operations help

firms to survive in recent problems and challenges. Inventory facility is defined as a physical

plant space where raw materials, goods or merchandise are stored. In the RMC industry, an

inventory facility can be a storehouse, a warehouse, an aggregates depot, a sand yard or a cement

terminal. Second, these models also ignored some important cost components of the inventory

purchasing systems. These costs included, but not limited to, the impact of the inventory

purchasing policy on product quality, production flexibility and organizational competitiveness

(Zhu et al., 1994; Cheng and Podolsky, 1996) and out-of-stock costs (Johnson and Stice, 1993;

Low EOQ and JIT purchasing and Chong, 2001; Singh, 2003;). Because of these two limitations,

these models cannot clearly explain the inventory purchasing approaches adopted in the RMC

industry
The cement industry is the one which uses natural raw materials such as fossil fuels and energy

intensively. The industry is a key source of many pollutants (Amrina and Vilsi, 2015). Therefore,

it is important to evaluate the practices towards sustainable cement industry

3. Planned Research Methodology

3.1 Single case study:

A case study methodology will be used for this project. In this context, Abbott and medicine

industries uses a case study as a comprehensive analysis. The focus is on the study of inventory

management techniques in Abbott and medicine industries. The study will highlight the

initiatives, the company's implementation policy and concerns about inventory management

techniques. Careful analysis of the literature, and my previous practical experience in the food

industry will identify potential problems through qualitative research.

3.2 Approach:

An inductive approach has been decided for this research in which investigate inventory

management techniques in Abbott and medicine industries will be examined. And compared

with the industry and the academic literature.

3.3 Data collection:

Exploratory is use to find the problem which are not clearly identified and help in to improve the

final research design. I will use exploratory research and qualitative research for finding the

issues about research. Interviews will be conducted with respondents to explore their view and

gathered data on a particular research.

3.3.1 Primary Data Collection Method:

Primary data will be taken with help of semi structured interviews. I will conduct semi structured

interviews with inventory management organizations, inventory management specialists,

advisors and academic researchers

3.3.2 Secondary Data:

Since I am collecting primary data only, no secondary data is required.

3.3.3 Non-Probability sample:

The non-probabilistic sample is important because the selection of the sample of personnel in the

administration team is based on certain criteria and not on a random basis (Mason, 2013). An

inventory management technique reduces the risks of the supply chain, supervises or controls the

supply chain and helps to develop various strategies to improve the system (Hallikas, 2012). In

the case of a qualitative case study, it is recommended to use 5-11 interviews until the data is

inundated (Eisenhart, 1989).

Following participants will be selected

a) Employees in the top-middle and low levels of lucky cement and cement industries who are

currently working in the organization.           

b) Suppliers of the company.

c) Customers of the company.

d) Representatives from Supply Chain, Inventory management experts, Inventory management

consultants, researchers, retailers, institutions working for cement industry.

3.4 Ethical considerations:

Each part of moral thought will be followed in the research. Critical information is relied upon to

be achieved by this research. It will be ensured that this information got is utilized for the

research in hand only. Each exertion will be made to ensure that this information is kept secret.

All security will be kept up all through the research. Taking authorization of the respondent is

critical. A special consent form will be given to the interviewees so that their permission can be

taken. The respondent will almost certainly pull back from the meeting at any stage. Sympathy

level of the respondents will be kept up.

3.5 Schedule for completion:

The time allocated to every milestone of the research has been defined in the figure below:

Tasks Date
Approval of Project Proposal received 22.04.2019
Literature review commences 10.09.2019
Data collection commences 15.09.2019
Data collection concludes 30.09.2019
Literature review concludes 10.10.2019
Writing of first draft commences 15.10.2019
 Submission of drafted project research 05.12.2019
Submission of project report (Final) 10.12.2019

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