KERALA MINERALS & METALS LIMITED, CHAVARA

5.1 FINDINGS OF THE STUDY

 The study’s principal findings are listed below:
 They follow a strict procurement policy when it comes to raw materials. They use
particular criteria to choose vendors who offer raw materials to the KMML.
 They will not compromise on the quality of raw material. For the procurement of raw
materials, they spend their own funds.
 They have a distinct department for purchasing raw materials and consumables, which
is led by a purchase manager.
 The inventory turnover ratio of the organization is satisfactory. It is according to its
standard ratio. The ratio in first year was 2.74 which rose to 3.62 in the second year
and 3.69 in the third year. Increasing trend in inventory turnover ratio denotes positive
sign for the organization because its sales are also increasing.
 In material analysis, various types of materials like raw material, WIP and closing
stock are studied. Through this analysis one got to know about the company’s
inventory value for past five years. The inventory of the company has increased in
every year.
 The overall performance of the organization is satisfactory because of its prominent
increase in sales. The sales have increased every year.
 From the ABC analysis of major raw materials of KMML in the year 2021-22 is
found that 17.24% of the materials constitute 84% of the consumption value and are
classified as A items. 34.48% of the materials constitute 15% of the consumption
value and are classified as B items. 48.27% of the materials constitute 1% of the
consumption value and are classified as C items. Data taken for analysis is of the year
2021-22. The annual consumption value is 3817 lakhs, total number of materials is
29.
 From the FSN analysis of materials consumption it is found that 56% of the items
constitute 75% of the consumption value and are classified as F items.30% of the
items constitute 17% of consumption value and are classified as S items. 14% of the
materials constitute 8% of the consumption value and are classified as N items. Data
taken for the analysis is of 01/01/2022 to 31/06/2022. Total consumption value is
551.24 lakhs,

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KERALA MINERALS & METALS LIMITED, CHAVARA

5.2 SUGGESTIONS

 The following suggestions are proposing in front of the company after having a
detailed study of the inventory management of the company.
 The company has to implemented more effective inventory control tools so that
efficiency in operations can be improved
 Since the company is now using ABC Analysis as a major tool in inventory control
system this study suggest that FSN Analysis can be also used as an effective tool for
better inventory control.
 As a suggestion from ABC Analysis, A class items needs more cost control to
improve production efficiency this can be attained by having more tight control in
process, the requirements over items should be exact, postings/ recording of items
should be individually/ completely done, check of revision should be close and the
quality control and expediting should be exact and regular.
 Suggestion from FSN Analysis. This classification helps items management in
establishing most suitable stores layout by locating all the fasting moving items near
the production unit to reduce the handling efforts also the non-moving items needs
more discussion by the management as whether they required in future, or they can be
planned to be liquidated. Action for disposal can be taken based on value of each of
items.

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KERALA MINERALS & METALS LIMITED, CHAVARA

5.3 CONCLUSIONS

This study was conducted in order to analyses the effective management of inventory in
Kerala Minerals & Metals Limited Chavara, effective tools such as ABC, FSN was applied in
the analysis. In inventory management, differences between physical and record inventories
continuously plague industry. Methods for reducing these variations contribute to reduce a
risk of stock out, spoilage and excessive inventory.

The data collection of this study is done through observation conducted in production units
and central store department of the company. The other information available for this study
was the company's records and manuals. This study gives an insight to the company's
inventory management and helps to design an improved cost effective inventory control
system.

Application of ABC and FSN Analysis simultaneously would help the management of the
company to manage and control the inventory requirements and thus ensures regular and
uninterrupted productions.

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