Inventory Management Project Asma

A Study on Inventory Management and Control Techniques
Construction Equipment Manufacturing Industry:

The construction equipment sector comprises of four major segments:1) 2) Earth moving equipments (excavators, backhoes, loaders, bulldozers etc) Construction equipments (road rollers, concrete mixer, hot mix plants, road making machines, stone crushers) 3) 4) Construction vehicles (dumpers, tippers, tankers and trailers) Inventory handling equipments (mobile crane, gantry crane, hoists and forklifts)
Excavator is a self propelled crawler or wheel mounted machine, with an upper structure capable of a minimum of 3600 rotation, which excavates, elevates, swings and discharges Inventory, by the action of a bucket fitted to the boom and arm or telescopic boom, without moving the chassis or under-carriage during any part of the working cycle, of the machine. Hydraulic excavator is a multipurpose earthmoving machine, which can perform many duties, in the field such as digging earth, mining, loading, quarrying etc. apart from other activities like well-digging, Inventory handling. The excavator is the only earth moving machine, capable of working in three dimensions and in all directions.
Exporters of construction machineries too are riding the boom wave with many bigger orders from west Asian African countries. Most of them have managed to get huge profile with many registering as high as a threefold increase.
The boom has started a ripping effect touching various other spheres of activity that are not directly related to construction. Manufacturers of ancillary products such as ropes, cables, pulleys and buckets too are benefited from the boom. Indian constructing majors working on overseas projects have opened the world for this Industry. They are getting hefty orders from these companies to source their project. Companies have also begun getting enquiries from real estates contractors and construction companies of these countries. They are working overtime to meet their demand deadlines.
While domestic requirement is driving the growth rates in the construction equipment Industry, exports today are relatively low. Indias construction equipment sector has a market size of 1.49
EWIT/MNN/ANS
Page 1
A Study on Inventory Management and Control Techniques billion, a fraction of the global market of over 56.17 billion. The global Industry is growing at a 5% rate, while Indian construction equipments sector is growing at the rate of 30% annually. The Indian capital equipment Industry has: The advantage of high technical talent base. Established component vendor base. Low labor rates. All ingredients for a competitive product.
Excavator market in Asia and Latin America are rising at a fast rate. It is estimated that in next five years, the domestic excavator market will remain in stable development trend. Domestic excavator manufacturer should make use of this opportunity and seek for these agents and attend large scale exhibition to explore international market.
Indian Scenario:
The appreciable increase in real estate construction activities has resulted in a surge of demand for transit concrete mixers, bar bending and cutting machines, excavator and backhoes and earth rammers. The construction equipment in India is growing at a blistering 30%of annually-driven by huge investment by both government and private sector in infrastructure and construction development. The 9,000 crore worth construction machinery Industry in the country is undergoing a steady transformation by moving from low volume intensive use of equipments structure to high volume.
The rapid growth in economy has accentuated the need for improving infrastructure. State Government development authorities and even companies have begun investing in infrastructure development projects. Before the opening up of the Indian economy, and the entry of the international majors, much of infrastructure development and construction in the real estate sector was done manually. But with the infrastructure sectors undergoing changes with 60-storeyed sky scrapers being built in cities like Mumbai and thousands of km of expressways and highways being laid across the subcontinent. Builders and contractors are acquiring sophisticated equipments to execute the multi-million dollar projects.
EWIT/MNN/ANS
Page 2
A Study on Inventory Management and Control Techniques For the construction equipment sector, which has adapted rapidly to the changed scenario, this is indeed good news, as it paves the way for an exciting future. The opening of the Indian economy and the booming infrastructure and real estate sectors attracted international giants including Telco, JCB, VOLVO, TEREX, CATERPILLAR and HITACHI.
Present market condition is very competitive and there are five global players for excavators in India. Only those companies, which can supply quality machines at lowest price, can be successful. This requires substantial improvement in productivity levels by more effective utilization of fixed assets of the company. The success depends upon the companys ability to meet the challenges of price, increasing value to customers & investors and retaining the powerful brand image of L&T-Komatsu.
EWIT/MNN/ANS
Page 3
2.1. Background and Inception of L&T-Komatsu: About Larsen & Toubro:

The evolution of Larsen & Toubro Ltd (L&T) into the countrys largest engineering and construction organization is among the remarkable success stories old Indian Industry. L&T, a partnership firm founded in 1938 by two Danish Engineers, Henning Holck-Larsen and Soren Kristian Toubro. Both of who were strongly committed to developing Indias engineering talent and enabling it to meet the demands of Industry. Beginning with the import of machinery from Europe, L&T rapidly took on Engineering and Construction assignments of increasing sophistication. Today, the company sets engineering benchmarks in terms of scale & complexity.
Henning Holck-Larsen (4/7/1907 27/7/2003)
Soren Kristian Toubro (27/02/1906-04/03/1982)
In 1938, the two friends decided to forgo the comforts of working in Europe, and started their own operation in India. All they had was a dream. Their first office in Mumbai (Bombay) was so small that only one of the partners could use the office at a time.
In the early years, they represented Danish manufacturers of dairy equipment for a modest retainer. But with the start of the Second World War in 1939, imports were restricted, compelling them to start a small work-shop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. This crisis forced the partners to stand on their own feet and innovate. They started manufacturing dairy
EWIT/MNN/ANS
Page 4
A Study on Inventory Management and Control Techniques equipment indigenously. These products proved to be a success, and L&T came to be recognized as a reliable fabricator with high standards.
The war-time need to repair and refit ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd., to handle these operations. L&T also started two repair and fabrication shops - the Company had begun to expand.
Larsen & Toubro group started in 1975 to manufacture Hydraulic Excavators. L&T is a technology driven engineering and construction organization, and one of the largest companies in Indias private sector.
A strong, customer-focused approach and the constant quest for quality have enables the company to attain & sustain leadership in its major lines of business across seven decades in infrastructure segment.
With factories and office located across seven the country, further supplemented by a wide marketing and distribution network, L&Ts image and equity extends to virtually every district of India. L&T believes that progress must necessarily be achieved in harmony with the environment. A commitment to community welfare and environmental protection constitute an integral part of the corporate vision. L&T embraces corporate sustainability reporting as per GRI 2006 (G3) guidelines. L&Ts registered office and the first manufacturing unit are located in Mumbai. Because of constraints place, power, transport etc and to create employment opportunities to all sections of the society at different locations, company started one of its manufacturing units at Bangalore in 1974. On 1st Feb 1998 it entered into a Joint Venture with 50:50 equity participation from L&T and Komatsu Asia Pacific Pvt. Ltd. Singapore, a wholly owned subsidiary of Komatsu Limited, Japan. LTK-BW is the largest manufacturer of Hydraulic Excavators and high-pressure Hydraulic systems and components.
EWIT/MNN/ANS
Page 5
About Komatsu:
Komatsu Limited, Japan is a world leader in construction equipment business with additional interests in industrial machinery and electronic. Established in 1917, Komatsu has grown to become the second largest construction equipment manufacturer worldwide and the largest hydraulic excavator manufacturer. Strong focus on quality, innovative products and concern for the environment are core qualities of this organization.
Komatsu had its origins in 1894 when the Takeuchi Mining Company was founded. A major expansion occurred in 1917, during World War I, when the Komatsu ironworks was established to manufacture mining equipment and machine tools to expand the mining operations. The name Komatsu came into existence in 1921 when the ironworks separated from the mining company to become Komatsu Ltd.
International activities increased in 1955 when both construction equipment and presses were shipped outside the country. In 1958 operations began in India with an agreement between the firm and the Indian government to manufacture tractors. Three years later, another license agreement was signed with a U.S. manufacturer, Cummins Engine Company, to make and sell diesel engines.
Komatsu Ltd. is the world's second largest manufacturer of construction and mining equipment, after Caterpillar Inc. More than 70 percent of the company's revenues are generated from the sale of construction and mining equipment, including bulldozers, dump trucks, hydraulic excavators, mobile debris crushers, motor graders, rough-terrain cranes, tunnel-boring machines, and wheel loaders. Komatsu also has a major division devoted to the production of electronics. This business, responsible for about 7 percent of revenues, is involved in the production of electronic Material, including silicon wafers and polycrystalline silicon, both of which are used to make semiconductors; semiconductor manufacturing equipment; factory and office automation equipment; and local area network-related peripheral equipment. The desire to capture a greater share of the increasing market for construction machinery in Southeast Asia led Komatsu in mid-1996 to create Komatsu Asia & Pacific Pvt. Ltd. in Singapore to coordinate and expand its operations in the region. That year the company also began manufacturing construction equipment in Thailand, giving it two production bases in Asia, the other being in EWIT/MNN/ANS Page 6
A Study on Inventory Management and Control Techniques Indonesia. In early 1998 Komatsu joined with Larsen & Toubro Ltd. of India to form Bangalorebased L&T-Komatsu Limited, which would make Komatsu hydraulic excavators and sell them in India and bordering countries Ummins Inc. in 2001.
About L&T Komatsu Ltd:

L&T Komatsu Limited was established in Feb. 1998 as an equal participation (50;50) joint venture between Larsen & Toubro limited and Komatsu Asia Pacific Pvt. Limited, Singapore, a wholly owned subsidiary of Komatsu Limited, Japan. The JV was formed to bring together the manufacturing expertise, marketing and service reach of Larsen & Toubro Ltd with superior product design and engineering capability of Komatsu Limited for the manufacture of hydraulic excavators in India. L&T markets & provides service support for hydraulic excavators manufactured by L&T-K.
L&T Bangalore works pioneered in manufacture of Hydraulic Excavators in the country in 1975 in collaboration with Poclain, SA of France with the opening up of the Indian economy, it has become imperative that the company become globally competitive so that it can efficiently tackle International competition and provide best quality products at competitive prices and establish the leadership in the Indian market and export its products to other countries. Hence M/s Asia Pacific Pte Limited (KAP), the Worlds no one Excavator manufacturer with the widest range and reach and L&T formed a joint venture company and its Bangalore Works is now known and called as L&T-KOMATSU LIMITED, BANGALORE WORKS, and effective from 1/2/1998.
Highlights of L&T-Komatsu:
The Plant is located on national highway NH7 connecting Bangalore and Hyderabad It is spread on an area of 65.7 acres. The estate is lush green with well laid lawns and about 3750 trees. The Plant has captive power generation of 2760 KVA capacity. Currently L & T Komatsu, Bangalore works Ltd is in the first place in manufacturing excavators and Caterpillar holds the second place. It holds a market share of 43%. EWIT/MNN/ANS Page 7
2.2. Nature of the Business Carried:

L&T-Komatsu's manufacturing facility - Bangalore works - comprises two manufacturing divisions they are the Machinery Works and the Hydraulics Works. The Machinery Works manufactures various Hydraulic Equipments required for the manufacture of Hydraulic Excavators by the Hydraulic Works. They also supply customized Hydraulic Systems to Komatsu Ltd. Japan.
The various products of Hydraulic works are Hydraulic Motors, Pumps, Turning Joints, Hydraulic Cylinders, Hoses, Valve bank, Power packs of different varieties.
1. Engineering & Construction Projects Petrochemical Projects Oil & Gas for special projects Nuclear Power & Allied Business Building Factories, Parks, Hotels, Public Buildings Transportation Roads & Expressways, Bridges, Stations, Underpass Civil Infrastructure Ports, Harbors
2. Construction
3. Minerals & Metals Electrical, Instrumentation and Communication Electrification works in power, steel, metallurgical, glass, fertilizer Transmission Lines and Electrification
4. Heavy Engineering Heat Transfer Equipment Refinery & Cracker Plant equipment Equipment & Systems for power plant
5. Electrical & Electronics Control Power Grade Projects Motor Starters Energy Meters
EWIT/MNN/ANS
Page 8
2.3. Vision, Mission and Quality policy: Vision:

We shall be a world-class company with high standards of governance, dedicated to excellence in Produce, Processes and People. We shall be a company delighting customers by delivering on time highly reliable producers, which enable them to succeed. We shall be a company with very high safety standards, caring for safety of people, committed to social responsibility and environment protection. Our people shall have the passion to continual learning and engage themselves to the highest level of involvements. We shall embrace an inclusive culture that incorporates a strong and well-articulated set of values and behavioral expectation.
Mission:

We shall manufacture a premium range of globally competitive Hydraulic Excavators and Hydraulic Systems for the domestic market. Our focus is to attain Market Leadership through sustained growth, quality through product reliability and on- time delivery of our products to our customers. We shall be committed to provide safe working environment, provide team working and improve employee engagement. We shall embrace the lean manufacturing philosophy in our operations and improve our operating profit margins.
Quality Policy:
Provide resources to maintain & continually improve the quality management system with a view to deliver quality products and services.
EWIT/MNN/ANS
Page 9
A Study on Inventory Management and Control Techniques Train and build awesome among our entire employee to enhance, customer satisfaction on a continuous basis. ISO 9001 certified Quality Management System backed up by inspection facilities that include: Non Destructive testing laboratory approved by Bhabha Atomic Research Centre, Mumbai. Equipment and qualified inspectors to carry X-Ray, gamma ray and ultrasonic tests to ensure internal soundness and castings. Modern metrology laboratory for inspection of precision components and calibration of equipment.
2.4. Products or Services Profile:
EWIT/MNN/ANS
Page 10
Product type
Horsepower
Weight
Bucket size
Attachments
PC 71 23 Lakhs Crawler mounted PC 130-7 34 Lakhs Crawler mounted PC 72CK 30 Lakhs Crawler mounted
54
7.05T
0.09-0.03cu.m
Backhoe, rock breaker, dozer blade
88
12.6T
0.64cu.m
Backhoe
97
13.6T
0.6-0.7cu.m
Backhoe, Rock breaker, wood grab, Elevated Cabin, Short Boom for tunnel excavation, Auger.
90 CK-3 39 Lakhs Crawler mounted
120
20T
0.9-1.2cu.m
Backhoe, Rock breaker, wood grab, Elevated Cabin, Auger, clamshell, Multiline grapple, Trenching long mount, ditch cleaning.
90 CK-3 39 Lakhs Crawler mounted
128
17.5T
0.9cu.m
Rock breaker, wood grab, Elevated Cabin, Auger, clamshell, Multiline grapple, Dozer blade.
EWIT/MNN/ANS
Page 11
2.5. Area of Operation Global / National / Regional:

L&T has a global presence. A thrust on International Business over the years has seen overseas revenues growing steadily. The company has manufacturing facilities in India, China, Oman and Saudi Arabia. It has a global supply network with offices in 10 locations worldwide, including Houston, London, Milan, Shanghai, and Seoul. Customers include global majors in over 30 countries.
2.6. Ownership Pattern:

Ownership Pattern of L&T-Komatsu Limited is 50-50 Joint Venture. In which 60 crores is invested by L&T and 60 crores by Komatsu Limited.
Shareholders Larsen & Toubro Komatsu Asia Pacific Pvt. Ltd. Total
Number of shares 60,00,00,000 60,00,00,000 120,00,00,000
Holding percentage 50% 50% 100%
2.7. Competitors Information:

L&T- Komatsu Limited has the following competitors:
EWIT/MNN/ANS
Page 12
A Study on Inventory Management and Control Techniques Market Share held by the competitors:
20% 45% 35%
2.7.1. TELCON
TELCON Construction Equipment Co. Ltd, the Leader in Construction Equipment in India, enhances the operational performance of its customers, leading to improving their profitability and competitiveness by offering constructive solutions. TELCON is a subsidiary company of TATA motors, which holds 60% share, and Hitachi Construction Machinery Co. Ltd, Japan holding the balance 40%. The company commenced manufacturing of construction equipment in 1961, as a division of TELCON. In 1984, it entered into a technical collaboration with HCM, Japan for manufacturing state of the art hydraulic excavators. TELCON is the largest manufacturer of construction equipment and has two manufacturing plants - at Jamshedpur in Jharkhand and at Dharwad in Karnataka.
2.7.2. CATERPILLAR
Caterpillar Inc is a United States-based Corporation headquartered in Peoria, Illinois. It is "one of the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines." Famous for their products featuring caterpillar tracks and a distinctive yellow paint scheme, Caterpillar produces a wide range of engineering vehicles, including the range of Caterpillar bulldozers.
EWIT/MNN/ANS
Page 13
A Study on Inventory Management and Control Techniques 2.7.3. JCB
JCB India is a part of the world renowned and legendary company J. C. Bamford Excavators Limited (JCB), one of the prominent players in the construction equipment Industry and amongst the 3 largest players in the world, producing over 275 different models, which are sold in over 150 countries. JCB India is growing at an enviable pace and surging ahead with ambitious development and expansion plans through launching revolutionary products and adherence to world class JCB corporate identity norms. Today in India, JCB has a park of over 65,000 machines and one out of every two Construction machines sold in India is a JCB.
2.7.4. INGERSOLL RAND
In recent years, Ingersoll Rand has transformed itself into a multi-brand commercial products manufacturer serving customers in diverse global markets, and away from the capitalintense, heavy-machinery profile of its past. Today, we are a global diversified industrial firm providing products, services and solutions to enhance the quality and comfort in homes and buildings, transport and protect food and perishables, secure homes and commercial properties, and enhance industrial productivity and efficiency. Our customers count on the reliability of our family of industrial and commercial brands, such as Club Car golf cars, Hussmann refrigeration units, Ingersoll Rand industrial equipment, Schlage locks, Thermo King transport refrigeration units and Trane heating ventilation and air conditioning systems and services. Through these brands we enable companies and their customers to create progress.
2.7.5. BEML
Bharat Earth Movers Limited was established in May 1964 as a Public Sector Undertaking for manufacture of Rail Coaches & Spare Parts and Mining Equipment at its Bangalore Complex. The Company ha s partially disinvested and presently Government of India owns 54 percent of total equity and rest 46 percent is held by Public, Financial institutions, Foreign Institutional Investors, Banks and Employees. BEML operates on three major business verticals for associated equipment manufacturing: EWIT/MNN/ANS Page 14
A Study on Inventory Management and Control Techniques 1. Mining & construction 2. Defense 3. Rail & Metro
2.8. Infrastructural Facilities:

Design facility supported by CAD-CAM (PRO-E) Finite Element Analysis software (FEM) for Stress measurement and endurance testing Facility. Robotic Welding, CNC machines, State of art Metrology and Metallurgy Labs Modern facility for Polyurethane painting Computer center with Digital Alpha dual servers for perpetual uptime effluent treatment Plant.
2.8.1. Fabrication Technology:

1. CNC high-speed gas cutting process for consistent quality with good surface finish. 2. Axis welding robots for reliable welding and high strength point. 3. CNC machines for precision machining of huge structures of high quality.
2.8.2. Assembly Operations:

1. Assembly line operating on the concept of single piece unidirectional flow with equal start-time. 2. Modern assembling tools, jigs, fixtures at each workstation enable foolproof assembly processes. 3. Painting in modern paint booth using polyurethane painting process ensures superior wear resistant surface with good gloss luster and finish.
EWIT/MNN/ANS
Page 15
2.9. Awards and Achievements: Awards:

LTK has been certified under ISO 9001 since 1994 and ISO 14001 in 1999. Domestically, LTK was awarded Golden Peacock National Quality award in 1997, Rajeev Gandhi National Quality Award in 1999. Commendation certificate for CII-Exim business excellence in 2000. Bangalore works won Rajeev Gandhi National Quality Award 1997 instituted by BIS in best of all categories. Machinery works has a modern manufacturing facility with ISO 9001 accreditation for design, manufacture and servicing of earthmoving equipment. Hydraulic works with precision machine shop manufactures the complete range of high-pressure hydraulic components and systems. ISO 9001 certified for hydraulic pumps, motors, cylinders, turning joints. Hose assemblies, value blocks, hydraulic systems and power drives as well as allied gear boxes. ISO 14001 certification for environmental management system in the year 1999. Won CII-EXIM commendation certificate for Business excellence in the year 2000.
Achievements:
Year
Achievement Bangalore work established L&T pioneered the concept of
1975
Hydraulic excavator in India by manufacturing LC 80 / LY 80 models. (In Collaboration with Poclain, France)
1977 1978
Introduced 90 CK model Introduced 300CK model
EWIT/MNN/ANS
Page 16
1979
Introduced 90 CK-E, 300CK-E, TT 900 Vibratory Soil Compactor introduced Hydraulic Cylinders, Pumps, Turning Joints, were manufactured. Introduction of 300CK model 2 Hydraulic Motors, Valve blocks, hoses were manufactured 90CK (Model 2) with 80 indigenous content manufactured 170CK model introduced
1981
1984 1985
1987
1989 1992
Recognized as R&D house by GOI Indigenous design & development of 72CK Excavator (first time in India by any manufacturer). Development of Hydraulic drives for shunting loco, Sugar mill drives, Paddle feeders for coal handling equipment 90CK Model - 3 introduced. ISO 9001 certification for construction equipment. Transit mixer developed. Assembly of 85 ton Dump truck.
1993
1994
1995
1997
Won Golden peacock National Quality Award from Institute Of Directors. PC200 Excavator introduced.
1998
Won Rajeev Gandhi National Quality Award, BEST OF ALL category from BIS. ISO 14001 Certification for Environmental Management System.
1999
2000 2002 EWIT/MNN/ANS
Won CII-EXIM Commendation Certificate for Business Excellence. PC71 Excavator introduced. Travel & Swing Gear Carriers were manufactured. Page 17
A Study on Inventory Management and Control Techniques High Speed Travel & Swing Motors were Manufactured. OHSAS 18001:1999. ISO 14001:2004 Certification Green tech Gold Category Safety 2005 Award. Integrated Management System for EHS. Certificate for integrated management system of ISO 14001:2004 & OHSAS 18001:1999 (EHS).
2003
2006 2007
2.10. Work Flow Model (End to End):

STEEL PLATES
CUTTING AND WELDING
SHOT BLASTING
PAINTING ASSEMBLING
PRODUCT TESTING
2.11. Future Growth and Prospectus:

L&T-Komatsu, Bangalore Works plans for obtaining improved Reliability and Cost Reduction for this year. Following would facilitate achieving this:
1.
Resource management: a) Implement TPM and number of equipment under TPM : >30 Cycle time (through put time) reduction b) Inventory discrepancy Inventory adjustment c) DOC/DOP/FG shall be less than : 25% from present : zero : <1% :70/15/20 days
2.
Control Direct Inventory Cost and Overhead expenses: 3% & 5% respectively less
than budgeted level.
EWIT/MNN/ANS
Page 18
A Study on Inventory Management and Control Techniques 3. Improve capacity utilization: Try for excavator exports, excavator new applications. Increase hydraulic component exports to Komatsu/PH and sales to OEMs/new applications.
4.
Improve quality / reliability levels: First pass yield MTBF MTTR : 100% (start six sigma projects) : >900 hrs (no machine less than 500 hrs) : < 2 days
5.
Introduce new products
6.
Total employee involvement: Kaizen SGA Housekeeping Develop new models Develop new attachments The company plans to reduce the variable overhead cost, by offering VRS to excess personnel and by adopting in house manufacturing. MTBF: Mean Time Between Failures MTTR: Mean Time to Response : one person per month : 10 numbers in each PU/departments : at least level 4
EWIT/MNN/ANS
Page 19
3. Mc Kenseys 7s frame work with special reference to organization under study:

The model starts on the premise that an organization is not just Structure, but consists of seven elements:
Structure Strategy Shared Values Skills Staff Style Systems
Those seven elements are distinguished in so called hard Ss and soft Ss. The hard elements (green circles) are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documentations. The four soft Ss however, are hardly feasible. They are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. Therefore it is much more difficult to plan or to influence the characteristics of the soft elements. Although the soft factors are below the surface, they can have a great impact of the hard Structures, Strategies and Systems of the organization.
1. Structure:
Organization has clearly been segmented into different business sectors and the structure is clearly demarcated for empowerment with regard to each product and/or sector of economy which is managed by independent Strategic Business Unit as independent profit / growth centers.
EWIT/MNN/ANS
Page 20
Organization Structure:
2. Strategy:
The company has a rolling plan called Strategic Plan which spans a period of 10 years. The strategic plans are dove-tailed to the companys Mission and Vision statements. The plans are reviewed annually and changes / course-corrections carried out in regard to additions of new products to its portfolio, in line with the changing business, economic environment both domestic and international. Strategic plan for 2010-2011 is as follows.
EWIT/MNN/ANS
Page 21
Supply
chain
To work very closely with suppliers as partners to enable them deliver value in the supply chain based on total cost approach and also to be cost competitive with volume flexibility.
New
To introduce identified new products working closely with marketing to serve customers better with increased product range.
products
Together strive to consistantly improve our profitability with focus on reduction on material cost improving ROCE managing the working capital Profitability effectively and improving company's cash to cash cycle
People
To create an inclusive culturebthat fully engages current and new employees in a safe and enjoyable working environment, enable them to embrace team L&T Komatsu. Employees will work together without boundaries creating synergy to enable them scale new hights.
Quality
Employees will significantly accelerate the pace of quality improvements for current and new products. Employeees will strive to achieve this by driving passion for quality and organization wide focus on improving new product introduction process and product improvement process.
Scale & Speed
company will focus on increasing production capacity to enable to meet the customers needs by investing in core manufacturing processes. to work closely with major dedicated suppliers in their manufacturing and quality processes to ensure timely supplies maintaining quality.
3. Systems:
Being a professionally-managed organization since 1938, there are separate Divisional Boards to oversee/supervise the operations of each Operating Division. Further, there are sector wise business meetings to take stock of the business parameters and take corrective action wherever required. L&T has a very strong communication network for propagating companys plans, policies and procedures in order to keep everybody informed. In L&T Komatsu, a number of software applications for different functions are provided by Oracle. They are as follows Inventory, Bills of Inventory, Costing, Purchasing, Receiving. MPS/MRP Planning, Lead Times, Order Management, Invoicing. Page 22
EWIT/MNN/ANS
A Study on Inventory Management and Control Techniques Attendance Recording system, Physical Attributes, Service, GroupWise LAN One of the screenshot representing the software used for ABC analysis is represented.
Skills:
L&T has a very strong people-oriented process. For assessing the performance of employees they have assessment process. For assessing the availability of future leaders, they have leadership programs. There are a host of training programs (both internal and external) covering performance-oriented development programs, technical competence, personality development etc. which cover the entire gamut of skills required for running the organization effectively and profitably and also develop the individual as well. SKILL MATRIX
DESCRIPTION MANAGER- ANALYTIAL SKILLS ICAL SKILLS PEOPLE COMMUNITECHNICAL SKILLS MOTIVATIONAL SKILLS TEAM WORKING SKILLS
ORIENTED CATION SKILLS SKILLS
MANAGERS SUPERVISORS EXECUTIVES
TECHNICIANS
Style/Culture: Organization culture:

It is a set of some shared values, norms and belief systems that controls organization operations and interaction with the members both inside & outside of the company. L&T Komatsu follows a very distinct and insular culture throughout the company. The company incorporates various activities, which help in the betterment of four factors that account for cultural differences among the organization: Organizational ethics, Organization structure. The property right system used by the organization. Page 23
EWIT/MNN/ANS
A Study on Inventory Management and Control Techniques The characteristics of people working in the organization. In L&T Komatsu Ltd Company, every employee needs to portray officer like qualities which makes them different from their competitors. A unique characteristic of each employee is that they contribute towards production and share the information to each other as when required. The top managers are right to use organization resources. The work force may be given rights to participate in decision making through various forums so that they can help in achieving the goals of an organization of higher productivity, good quality and cost reduction. The shareholders of the company are given the strongest property rights as they own the resources of the employee and shares from profit.
Management Style:
Its all about the fundamental responsibility of employees in interacting with each department:
INFORMATION AND DATA MANAGEMENT
TRAINING PLANT & RESOURCE PLANNING AND MANAGEMENT EQUIPMENT MAINTENANCE
CUSTOMER
MARKETING / SALES
PRODUCTION PLANNING
PRODUCT REALISA TION
CUSTOMER CUSTOMER
DESIGN & DEVELOPMENT PLANNING PURCHASING PRODUCT SERVICE
QUALITY ASSURANCE
EWIT/MNN/ANS
Page 24
Shared Values:
Integrity: Aligning actions with words and consistently deliver what they promise. Building and strenghtening reputation through trust. To be respectful and behave in an open and honest manner. Beleiving in ethical performance.
Excellence: Being passionate about their people, process and products. Quality of their products reflect what their processes are and how committed their
employees are. They believe in continuous improvements and also significantly focus on customer needs and dedication.
Team work: They share their talents and knowledge with whom they were and take decisions on time
to strenghthen team work.
They respect and value people with different opinion experience and background. They shall always thrive to understand the big picture and work together for consistently
improving their performance.
Staff:
Unionized category T technical category A administrative category S skilled category
Management category B superior category E executive category CA chartered accountant, C covenant category MK Japanese representative
EWIT/MNN/ANS
Page 25
No of employees in each cadre are represented:
S, T, AND A CADRE B CADRE- SUPERVISORY E CADRE- EXECUTIVE M CADRE- MANAGERIAL SUPERVISORY TRAINEES TOTAL
416 082 048 100 010 656
EWIT/MNN/ANS
Page 26
Strengths:

Professionally managed company, Maximum resource utilization. Importing certain prime components, Recognition of performance Network of dealership helping in better customer servicing. Construction equipment division measures customer satisfaction by the means of customer satisfaction index and to measure performance. Quality, technology upgrading in regular intervals, TQM, Effective supervision. 90% of the components are made in house of key hydraulic components like Cylinders, Motors, Pumps, Swivel joint, Tubes and Hoses which offers the following advantages.
Corrective and preventive action (CPA), Extensive testing facility. ISO 9001, 14000, 18000 Certifications, High productivity. High capability of product development which has been proved by the development of 12 ton excavator and upgrading 20,30,60 ton class to improve reliability and productivity.
Weaknesses:
Time is consumed in introduction of new products/models. More formalities are involved in the process of introduction of new product. Growth or the promotion is time bound, Under utilization of knowledge. Limited scope for growth, Business uncertainty.
Opportunities:
Government projects like river linking, road linking, laying of optical fibers, etc. Mining, Market, Introduction of new model. E.g.; PC200 is modified with the introduction of new attachment like microprocessor control, which reduces vibration and enhances operator comfort. EWIT/MNN/ANS Page 27
Threats:
Business uncertainty. Market uncertainty because of sudden government policies. Increasing steel prices, Attrition rate (5%). Limited scope for exporting, Increased competition.
EWIT/MNN/ANS
Page 28
BALANCE SHEET OF THE PAST THREE YEARS IS AS FOLLOWS:

AS AT 31.03.2011 RUPEES AS AT 31.03.2010 RUPEES AS AT 31.03.2009 RUPEES
Particulars
SOURCES OF FUND SHARE HOLDERS FUNDS: Share capital Reserves and surplus 1,20,00,00,000 1,93,66,58,056 3,13,66,58,056 1,20,00,00,000 1,63,64,78,497 2,83,64,78,497 1,20,00,00,000 1,31,68,66,025 2,51,68,66,025
LOAN FUNDS: Secured loans DEFFERD TAX LIABILITY 3,27,09,86,651 TOTAL 6,56,75,000 6,86,53,595 13,13,50,000 6,96,34,876 3,03,74,63,373 1,93,94,23,106 6,65,87,644 4,52,28,76,775
APPLICATION OF FUNDS: FIXED ASSETS: Gross block Less depreciation: Net block Capital work in progress 97,83,45,235 94,46,934 98,77,92,169 DEFFERD TAX ASSET 22,67,182 LOANS & 96,87,92,729 6,13,28,931 1,03,01,21,660 31,22,055 2,13,58,88,222 1,15,75,42,987 2,05,45,77,601 1,08,57,84,872 2,01,33,11,599 1,01,63,66,831 99,69,44,768 6,43,07,464
1,06,12,52,232 1,48,10,271
CURENT
ASSETS,
ADVANCES: Inventories Sundry debtors 2,15,65,95,888 2,52,39,46,226 2,45,02,96,814 1,83,99,87,365 2,89,85,41,865 1,27,31,72,989 Page 29
EWIT/MNN/ANS
A Study on Inventory Management and Control Techniques Cash and bank balances Loans and advances Other current assets 25,40,98,311 81,78,41,559 23,671 31,31,10,868 68,04,73,016 _ 15,12,611 62,18,68,352 _
5,75,25,05,655 Less: CURRENT LIABILITIES & PROVITIONS: Liabilities Provisions NET CURRENT ASSETS 2,79,12,72,425 68,03,05,930 TOTAL 2,28,09,27,300
5,28,38,68,063
4,79,50,95,817
2,55,79,02,132 72,17,46,273 2,00,42,19,658
1,09,95,37,196 24,87,44,349 3,44,68,14,272
3,27,09,86,651 Source:
3,03,74,63,373
4,52,28,76,772
EWIT/MNN/ANS
Page 30
PROFIT AND LOSS ACCOUNT OF THE PAST THREE YEARS IS AS FOLLOWS:

PARTICULAR AS AT 31.03.2011 RUPEES INCOME Sales Less: Excise duty & education cess on sales 13,51,63,81,565 Other income 5,27,68,754 13,56,91,50,319 EXPENDITURE Manufacturing, operating expenses Staff expenses Sales & administration Interest Depreciation & obsolescence 10,35,62,92,369 43,17,59,739 1,75,71,48,724 2,72,80,252 7,56,51,643 12,64,81,32,727 8,30,74,11,285 36,71,01,217 1,37,81,57,368 9,93,63,991 7,41,42,971 10,22,61,76,832 7,64,93,41,363 37,85,72,646 2,27,32,57,615 10,55,42,409 7,95,77,071 10,48,62,91,104 11,10,14,13,594 13,90,18,347 11,24,04,31,941 10,73,99,67,456 4,76,08,741 10,78,75,76,197 14,90,72,79,126 1,39,08,97,561 11,99,81,65,921 89,67,52,327 12,11,01,80,588 1,37,02,13,132 AS AT 31.03.2010 RUPEES AS AT 31.03.2009 RUPEES
EWIT/MNN/ANS
Page 31
A Study on Inventory Management and Control Techniques Profit before tax Provision for current tax Provision for differed tax Provision for fringe benefit tax Taxes in respect of earlier years Income tax Fringe benefit tax 92,10,17,592 30,83,92,421 (1,26,408) _ _ 57,44,620 _ 1,01,42,55,109 33,90,31,131 1,47,35,448 _ _ 51,94,166 (1,51,308) 30,12,85,093 9,97,21,169 33,93,752 32,77,555 _ 49,05,507 1,07,167
Profit after tax
60,70,06,959
65,54,45,672
18,98,79,943
Balance brought forward from previous year
1,36,24,30,647
1,10,83,62,742
1,01,67,58,599
Profit available for appropriation 1,96,94,37,606 Less: Transferred to general Reserve Profit available for distribution Interim dividend Proposed dividend Additional tax on dividend Balance carried to balance sheet Earnings per share-Basic Face value per share 5.06 10.00 6,07,00,696 1,90,87,36,910 _ 26,40,00,000 4,28,27,400 1,60,19,09,510
1,76,38,08,414
1,20,66,38,542
6,55,44,567 1,69,82,63,847 _ 28,80,00,000 4,78,33,200 1,36,24,30,647 5.46 10.00
_ 1,20,66,38,542 _ 8,40,00,000 1,42,75,800 1,10,83,62,742 1.58 10.00
EWIT/MNN/ANS
Page 32
Learning Experience:
It was good experience in L&T-Komatsu, we were sent to management service department and met Mr. M. UPENDRA BHIDE, Assistant General Manager of HR who explained about the functional activities which they are carrying. It provides all necessary data like quality factor of incentives payment & analysis of shop grievances & problems. It reviews the suggestions schemes & development of standard time data. Who in turn explained about purchase & procurements of raw material for production, He gave the information about all their dealings (& purchases the aluminum sheets Reverts, Nuts, bolts, drilling machines and tools other material from nation and international suppliers like American Exim Corporation (USA), looper tools (FRANCE) power tools distribution). Stores in charge person told us about the stores department supporting to the various department by providing required raw material & tools for the production purpose. They follow inventory management system in the issue and purchasing of raw material from outside. They adopt bin card system giving number to the material for easy identification of material and maintain the records of raw material like hand tools, hard tools, Cutting tools, chemicals, clothing, steel & alloyed aluminum sheets.
We visited Finance department, finance Senior Manager, Mr. S Prakash explained about the financial functions what they do in the department. They maintain journals & ledger main assets ledger, department/location assets register, miscellaneous equipment register, fixed assets disposal register control account advices register. All the financial transactions are done through cheque only; it receives finance from corporate office and also from ISRO. EWIT/MNN/ANS Page 33
A Study on Inventory Management and Control Techniques The department they told us about whenever new project plan is prepared by engineering department, the concerned planner continuously follows up & updates the process if required. They also explained about maintaining quality system documentation & assisting management review implement including quality audits. We analyzed shop wise rejections & report to management.
Senior Manager, There I noted some functions like preparation of annual production schedule for the division. Planning Inventory requirements & positioning the Inventory for different projects & capacity planning, for sub contacting with the outsider.
EWIT/MNN/ANS
Page 34
1a. General Introduction

Every enterprise needs inventory for smooth running of its activities & to achieve production. It also serves as a link between production and distribution processes. There is generally a time lag between the recognition of a need and its fulfillment. The greater time lag, the higher the requirements for inventory. The unforeseen fluctuations in demand and supply of goods also necessitate the need for inventory. It also provides a cushion for future price fluctuations.
The investment in inventories constitutes the most significant part of current assets/working capital in most of the undertakings. Thus, it is very essential to have proper control and management of inventories. The purpose of inventory management is to ensure availability of materials in sufficient quantity as and when required and also to minimize investment in inventories.
History of Inventory:
The word inventory was first recorded in 1601. The French term inventaire or detailed list of Goods dates back to 1415.
Meaning of Inventory:
The term inventory is used to cover the stock of raw materials, components, work-in-progress, and finished goods. It has been defined by Accounting Principles Board as:The aggregate of those items of tangible personal property which are -
(1) (2) (3)
Held for sale in the ordinary course of business, In the process of production for such sales, or To be currently consumed in the production of goods or services to be available for sale.
EWIT/MNN/ANS
Page 35
Reasons to Keep Inventory:

(1) TIME the time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amount of inventory to use in this lead time. (2) UNCERTAINITY Inventories are maintained as buffers to meet uncertainties in demand, supply and movement of goods. (3) ECONOMIES OF SCALE Ideal condition of one unit at a time at a place where user needs it, when he needs it principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory.
Types of Inventory:
There are five types of inventory, namely: 1) 2) 3) 4) 5) Transportation inventories Buffer inventories Anticipation inventories De-coupling inventories Lot-size inventories
Transportation inventories this arises due to the transportation of inventory items to various distribution centers and customers from the various production centers. The amount of transportation inventory depends on the time consumed in transportation and the nature of the demand. Buffer inventories these are maintained to meet the uncertainty of demand and supply. Anticipation inventories these are built in advance by anticipating or foreseeing the future demand. Ex: production of crackers before the Diwali festival, electric fans, or coolers before the on-set of summer season. EWIT/MNN/ANS Page 36
A Study on Inventory Management and Control Techniques De-coupling inventories the inventories are used to reduce the interdependence of various stages of production system are known as de-coupling inventories. Lot-size inventories generally the rate of consumption is different from the rate of production or purchasing. Therefore, items are produced in larger quantities which result in lot-size, also called as cycle inventories.
Inventory costs:
There are four categories of inventory costs associated with keeping inventories of items. They are: 1) 2) 3) 4) Item (or production or purchase) cost Ordering or set-up cost Carrying or holding cost Shortage or stock out cost
Item cost it refers to the cost associated with an item whether it is manufactured or purchased. The purchase price will be considered when discounts are allowed for any purchase above a certain quantity. Set-up cost these costs include the fixed cost associated with obtaining the goods through placing of an order or purchasing or manufacturing or setting-up machinery before starting the production. They include a cost of purchase, requisition, follow up, receiving the goods, quality control etc. These are also called as order costs or replenishment costs usually denoted by C3 per production run (cycle). They are assumed to be independent of the quantity ordered or produced. Carrying or Holding cost the cost associated with carrying or holding the goods in stock is known as holding or carrying cost which is denoted by C1 per unit of goods for a unit of time. Holding cost is assumed to vary directly with the size of inventory as well as the time the item held in stock.
EWIT/MNN/ANS
Page 37
A Study on Inventory Management and Control Techniques If P is the purchase price of an item, 1 is the stock holding cost per unit time as a fraction of stock value then the holding cost is C1=1P Shortage cost or stock out cost (C2) the penalty costs that are incurred as a result of running out of stock (i.e. Shortage) are known as shortage or stock out costs. These are denoted by C2 per unit of goods for a specified period.
Inventory Management:
The investment in inventory is very high in most of the undertakings engaged in manufacturing, wholesale and retail trade. In India, a study of major industries has revealed that the average cost of materials is 64paise and the cost of labour and overheads is 36paise in a rupee. About 90% part of working capital is invested in inventories. It is necessary for every management to give proper attention towards inventory management. A proper planning of purchasing, handling, storing and accounting should form a part of inventory management. An effective system of inventory management will determine: What to purchase How much to purchase From where to purchase Where to store, etc
There is a conflicting interest of different departmental heads over the issue of inventory. The finance manager will try to invest less in inventory because for him it is an idle investment, whereas production managers will emphasis to acquire more and more inventory, as he does not want any interruption in production due to shortage of inventory. The purpose of inventory management is to keep such that neither there is overstocking nor under sticking. The overstocking will mean a reduction of liquidity and starving of other production processed, under stocking on other hand will result in stoppage of work. The investment in inventory should be kept in reasonable limits.
Inventory as such can be classified as under, namely: 1) 2) Raw materials Work in progress (WIP) Page 38
EWIT/MNN/ANS
A Study on Inventory Management and Control Techniques 3) Finished goods
Raw materials are basic form of materials (which generally is produced by an industry from outside). Components are inputs in making the final product. Work in progress are also called stock in progress, refers to goods in the intermediate stages of production. Finished goods consist of final products that are ready for sale. While manufacturing firm generally hold all types of inventories, distribution firms hold mostly finished goods. Inventories represent the second largest asset category for manufacturing companies, next only to plant and equipment. The proportion of inventories to total assets generally varies between 15 to 30 percent. Given substantial investment in inventories, the importance of inventory management cannot be overemphasized.
Decisions relating inventories are, taken primarily by executives in production, purchasing and marketing departments. Usually, raw material policies are shaped by both purchasing and production executives, work in progress inventory is influenced by the decisions of production executives, and finished goods inventory policy is evolved by production and marketing executives. Yet, as inventory management has important financial implications, the financial manager has the responsibility to ensure that inventories are properly monitored and controlled. He has to emphasize the financial point of view and initiate programs with the participation and involvement of others for effective management of inventories.
Scope of Inventory Management:

To achieve the fine lines between replenishment lead times, carrying cost of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, continued inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.
Objectives of Inventory Management:

The main objectives of inventory management are operational and financial.
EWIT/MNN/ANS
Page 39
A Study on Inventory Management and Control Techniques The operational objectives mean that the materials and spares should be available in sufficient quantity so that work is not disrupted for want of inventory. The financial objective mean that investments in inventories should remain idle and minimum working capital should be locked in it. The following are the objectives of inventory management:
1)
To ensure continuous supply of materials spares and finished goods so that the production also be met. process should not suffer at any time and the customers demand should
2) 3)
To avoid both overstocking and under stocking of inventory. To maintain investments in inventories at the optimum level as required by the operational and sales activities.
4)
To keep material cost under control so that they contribute in reducing cost of production and overall costs.
5)
To eliminate duplication in ordering or replenishing stocks. This is possible with the help of centralizing purchases.
6) 7)
To minimize losses through deterioration, pilferage, wastages and damages. To design proper organization for inventory management. Clear cut accountability should be at various levels of the organization.
8)
To ensure perpetual inventory control so that materials shown in the stock ledgers should be actually lying in the stores.
9)
To ensure right quality of goods at reasonable prices. Suitable quality standards will ensure proper quality of stocks. The price analysis will ensure payment of proper prices.
10)
To facilitate furnishing of data for short term and long term planning and control of inventory.
Factors influencing Inventory Management and Control:

Several factors influence inventory management and control. The principal effects of these are reflected most strongly in the levels of inventory and degree of control, planned in the inventory control system. The factors include:
EWIT/MNN/ANS
Page 40
a. Type of product:
Among the factors influencing inventory management and control, the type of product is fundamental. If the materials used in the manufacture of the product have a high unit value when purchased, a much closer is in order. If the material used in the product is in short supply or is rationed by the government, this may influence the purchase of such material and thereby will have an influence on stock maintained from time to time. The manufacture of the standard products by any industry (as compared to custom made product business), will have significant influence in their inventories.
b. Type of manufacture:
Besides the type of product, the type of manufacture also influences inventory management and control. Where continuous manufacture is employed, the rate of production becomes the key factor. Here, inventory control is of major importance and in reality controls the production of the product. The economic advantage of this type of manufacture is the uninterrupted operation of the machines and assembly lines in the plant (which permits greater flexibility in the material control). It is a major offence on the part of inventory personnel to have plant shut down for the lack of material; or force intermittent manufacture due to delayed supplies.
c. Volume:
The volume of product to be made as represented by the rate of production may have little effect on the complexity of the inventory problem. Literally, millions of brass bases for light bulbs are manufactured each month involving control of only two principal items of raw material inventory. On the other hand, the manufacture of a large locomotive involves the planning and control of thousands of items of inventory. Both inventory problem and difficulty of controlling production increase in number of component parts of the product and not with the quantity of products to be made.
EWIT/MNN/ANS
Page 41
d. The other factors are:
The objective of the company as they relate to inventories and the level of service to be
provided to the customers. The qualification of the staff personnel who will design and co-ordinate the
implementation of the system. The capabilities of the personnel who will be responsible for managing the system on a
continuous basis. The nature and size of inventories and their relationship to other function in the company,
such as manufacturing, finance and marketing. The capability of present and future data processing equipment. The potential saving that may be anticipated from improved control inventories. The current or potential, availability of data, which can be used in controlling inventories. The present method for controlling inventories and for making other inventory decisions. The degree of commitment by management personnel to the development of a more
effective inventory management system and the results they anticipate from such a system.
Criteria for judging the inventory system:

While the overall objective of the inventory system is to minimize the cost of the firm at the risk level acceptable to management, the more approximate criteria for judging the inventory system are: Comprehensibility Adaptability Timeliness
Comprehensibility: Inventory systems range from the utterly simple to widely complex. Irrespective of how the simple or complex the system is, regardless of whether it is automated or manual, it should be clearly understood by all the affected parties. The system must be properly explained to all the EWIT/MNN/ANS Page 42
A Study on Inventory Management and Control Techniques concerned so that its purpose, logic and rationale are transparent. This generates enthusiasm for the system and enhances its credibility. Otherwise it is likely to perceive as a mysterious black box of dubious value.
Adaptability:
The questions raised in this context are: Is the system responsive to change? Can new products, new situations, and new requirements to be handles by the system? A certain degree of flexibility and adaptability must be designed into the system to make it versatile. Of course this cannot be and should not be carried too far. The system must not provide every possible and imaginable contingency. If it is developed with this ideal, it is likely to be complex monstrosity. Remember the caveat that the design of any system should ordinarily take care of about 90% of the cases, leaving the balance 10%to be handled by hand.
Timeliness:
Inventories may suffer low in value on account of a variety of factors. The more common Sources of value decline are: Obsolescence caused by changes in technology and shifts in consumer tastes. Physical deterioration with the passage of time. Price fluctuations because of inherent volatility of certain commodities.
Process of Inventory Management and Control:

Inventory management and control refers to the planning for optimum quantities of materials at all stages in the production cycle and evolving techniques which would ensure the availability of planned inventories. Four steps involved in the processes are:
(1) Determination of optimum inventory levels and procedures of their review and adjustment. (2) Determination of the degree of control that is required for best results. (3) Planning and design of inventory control system. (4) Planning of the inventory control organization. EWIT/MNN/ANS Page 43
Benefits of Inventory Management and Control:

Proper management and control and of inventories will result in following benefits to an organization: (1) Inventory control ensures an adequate supply of materials and store minimizes stock out
and shortages and avoids costly interruptions in operations. (2) It keeps down investments in inventories, inventory carrying costs and obsolescence
losses to minimum. (3) It facilitates purchasing economies through the measurement of requirements on the
basis of recorded experience. (4) It eliminates the duplication in ordering or in replenishment stocks, by centralizing the
source from which purchase requisitions emanate. (5) It permits a better utilization of available stocks by facilitating inter department transfers
within a company. (6) (7) It provides a check against the loss of materials through carelessness or pilferage. It facilities cost accounting activities by providing a means for allocating material costs
to products, departments or other operating accounts. (8) It enables the management to make cost and consumption comparisons between
operation and periods. (9) stores. (10) Perpetual inventory values provide a consistent and reliable basis for preparing financial It serves as a means for the location and disposition of inactive and obsolete items of
statements.
Tools and Techniques of Inventory Management:

Effective inventory management requires an effective control system inventories. A proper inventory control not only helps in solving the acute problems of liquidity but also increases profits and causes substantial reduction in working capital of the concern. The following are the important tools of inventory control:
(1)
Determination of stock levels Page 44
EWIT/MNN/ANS
A Study on Inventory Management and Control Techniques (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Determination of safety stock Determination of Economic Order Quantity A B C analysis V E D analysis Inventory turnover ratios Aging schedule of inventories Classification and codification of inventories Perpetual inventory system Just In Time (JIT) Inventory control system Two-Bin Technique Material Requisition Process (MRP) KIT system
There are some important tools of inventory control they are as follows:
ABC Analysis:
A.B.C analysis is a basic analytical management tool, which enables tip management to place the effort where the result will be greatest. This technique, popularly known as Always Better Control or alphabetical approach has universal application in many areas needing selective control, such as inventory, critically of items, absolute stocks, purchasing orders, receipts of material, inspection, store keeping and verification of bills. The annual consumption analysis of any organization would indicate that a handful of top high value items- less than 10% of the total number will account for a substantial portion of about 75% of the total consumption value and these few items are called A items which need careful attention of Inventory manage. Similarly a large number of bottom items over 70% of the total number called the trivial many account for about 10 percent of the consumption value and one known as the C class. The item that between the top and bottom are called the B Category items. In LTK the technique using for controlling inventory is ABC analysis, color coding can be used to identify A, B & C categories in stores. Usually red is used for A item, pink for B items and blue for C items. EWIT/MNN/ANS Page 45
VED Analysis:
It is fully stretched, as vital, essential and desirable analysis VED classification is also in the nature of ABC classification thorough it is largely applicable to spare parts. Spare parts are classified as vital, essential and desirable according to their requirements. Vital spares are those, which may cause havoc and may amount to stoppage work in the organist ion if they are not available in time. Vital items are very important in running manufacturing process continuously. E essential items are those items without which temporary losses or dislocation or production occurs. D desire items are those, which are not required immediately for production purpose. Desire items are necessary for the productive but not directly.
XYZ Analysis:
It is based on differentials of items according to the value of inventory stocked. As compared to ABC analysis, this is based on the value of consumption and VED analysis, which is based on performance. It is based on value of inventory in stock. XYZ analysis usually is restored to at the time of stock taking at the end of a period. X items are those inventory value is high. Y items are those inventory value is low. Z Items fall between these two extremes.
FSN Analysis:
FSN analysis is based on movement of items in the storehouse the items are classified as fast moving items (F) slow moving items (S) and non moving items (N). This analysis is useful in case of absolute items. Previous issue is guiding factors for FSN analysis. It is also useful in preventing obsolescence and facilitates timely control.
HML Analysis:
EWIT/MNN/ANS
Page 46
A Study on Inventory Management and Control Techniques H.M.L analysis is based on the cost of the items. The items are classified on high cost items (H), medium cost items (M) and low cost items (L). this analysis will helpful to store the items on the basis of their cost this analysis helps in better control of high cost items over medium cost items.
SDE Analysis: SDE analysis is based on the items purchasing outside the factory the way in
which the items can procure. Here S stands for scares items the items are those which are very difficult to procure? Especially imported items and those items which are very short supply. D stands for difficult items. These items are not immediately available in the market. It is difficult to get but can be had with affect. E stands for easy means the items are early available in the local market. We should not put more efforts to buy the items; any how we should have the optimum and full control over the scares and difficult items.
EWIT/MNN/ANS
Page 47
Inventory Process at L&T Komatsu:
Demand estimation
Material requisite planning
Purchase request
Purchase order
Procurement process
Preparation of GRN
Recording the materials
Issue materials to shop floor
Work in progress
Finished goods
Sales
EWIT/MNN/ANS
Page 48
Demand estimation
This is the first step in the process of manufacture of a product in L&T komatsu. Demand estimation is carried out by the marketing department of the company which is handled by the parent company L&T. In this step the possible demand is projected on the basis of the current market demand.
Material requisite planning (MRP)
Planning department handles MRP. In this step the amount, the kind, the rate of the raw materials required is to be analyzed and a list is prepared. Care is to be taken to maintain the lead time and EOQ (economic order quantity).
Purchase request (PR)
A purchase request is made to procure the materials mentioned in the MRP. This request is made by the planning department. Before the request is made the suppliers is selected. It is selected on the basis of quality, rate, and time. This is handled by the planning department.
Purchase order (PO)
After the supplier is selected purchase order is sent to the suppliers. The purchase order consists of the quantity, quality, rate of the material & the time period given for him to supply is mentioned. Purchase department
Procurement process
The process carried out to obtain the raw materials is termed as procurement process. In this step the materials are obtained physically from the suppliers. EWIT/MNN/ANS Page 49
Goods received note (GRN)
The goods received note is prepared by the stores manager. It acts as a confirmation for the actual receiving of the goods in correct number and in correct state.
Recording of the materials
On acceptance of GRN quantity will be increased in the inventory module.
Issue of materials to shop floor
The materials are sent to the manufacturing department according to their requests and on the basis of bill of materials and assembly plan.
Work in progress
In this step the raw materials are in the process of converting it into finished goods i.e. machineries.
Finished goods
The machines are completely finished and are ready for sales.
Sales
Here the finished machines are sold to the customers after procuring their payment or in some cases the machines are sold on the basis of credit. The credit allowed to the customer is on the basis of their credibility.
EWIT/MNN/ANS
Page 50
DESIGN OF THE STUDY
RESEARCH METHODOLOGY:
Research methodology is a systematic way for solving any research problem. It is a science of analyzing how research is done scientifically. It studies the various steps that are generally adopted by researcher in studying the research problem.
The scientific method is a way of collecting, processing and communicating information based on activities designed to increase information. The proposal study on inventory management has been specifically taken up on view of increasing attention being given to inventory.
STATEMENT OF THE PROBLEM:

A manufacturing firm needs inventory for smooth running of production adequacy of inventory would determine the efficiency with which the production would be affected. A large amount of inventory would mean that the company has idle funds blocked up. Since funds have a cost, the company has to pay huge amount as interest on such funds, results in low rate of returns. On the other hand inadequacy inventory or lower inventory will affect the smooth running of production, which will result in loss of sales (stock out) due to not meeting the customers need in time. Therefore, main problem is to estimate and maintain optimum level of inventory taking into consideration lead for procurement of raw materials, raw material conversion period, stock out factor and also the availability of materials in the market as well as discount factor from point of low cost. The title of the study is A Study on Inventory Management and Control Techniques with reference to L&T-Komatsu Limited, Bangalore Works.
NEED FOR THE STUDY:
EWIT/MNN/ANS
Page 51
A Study on Inventory Management and Control Techniques This particular topic is chosen for the study since inventory occupies a major portion of working capital and control. Any sub optimum method may lead to problems like unnecessary looking up of funds in inventory or out of stock situation, high inventory costs etc, therefore it is important to manage the inventory carefully by using scientific techniques. There are various techniques used for efficient inventory management.
SCOPE OF THE STUDY:

The study covers a period of three years i.e., 2008-09, 2009-10 and 2010-11. 1. The study seeks to find out facts and opinions of inventory management and control through various techniques. 2. It mainly aims in finding the inventory in L&T-Komatsu Ltd in accordance with the present trend. 3. Limited to the information that could be gathered from personnel and record that were made available.
OBJECTIVES OF THE STUDY:

The main objectives of the study are: 1. To understand its competitive environment. 2. To understand the various techniques of inventory management and its control. 3. To study the effectiveness of inventory management through various techniques. 4. To analyze the function, procedures in inventory management. 5. To study the control measures in inventory management. 6. To make a comparative study of inventory management of past three years using ratio analysis techniques.
SOURCES OF DATA:
There are two sources of data namely: Primary data was collected through discussion with concerned officers.
EWIT/MNN/ANS
Page 52
A Study on Inventory Management and Control Techniques Secondary data was collected from financial statements of the company and directors reports, auditors notes and other schedules.
STATISTICAL TOOLS USED FOR ANALYSIS:

Simple mathematical calculations, Averages and Percentage analysis is used to analyze the data collected from the primary source. Column charts are used to show the graphical representation.
LIMITATIONS OF THE STUDY:

1. The calculations are purely made on the information obtained from concerned personnel. 2. Certain critical information required could not be made public by the organization. 3. A thorough discussion with all related officials in a structured manner was not possible due to their busy schedules. 4. Suitable assumptions are made whenever necessary. 5. The conclusions applicable to L&T-Komatsu Ltd may not be applicable to the industry at large.
EWIT/MNN/ANS
Page 53
Inventory Ratios:
(1) Inventory Turnover Ratio: This ratio indicates the speed at which inventory is converted into sales, which in turn contributes to the profits of the organization. Higher the ratio better will be the efficiency.
TABLE SHOWING INVENTORY TURNOVER RATIO:
Particulars Sales Average Inventory Inventory Ratio
2008-2009 12,11,01,80,588 2,89,85,41,865
2009-2010 11,99,81,65,921 2,45,02,96,814 4.89
2010-2011 14,90,72,79,126 2,15,65,95,888 6.91
Turnover 4.18
ANALYSIS: From the above table it can be analyzed that inventory turnover ratio has increased by 6.91 in 2010 as compared to 4.18 and 4.89 in 2008 and 2009 respectively.
GRAPH SHOWING INVENTORY TURNOVER RATIO:
EWIT/MNN/ANS
Page 54

8 7 6 5 4 3 2 1 0 2008-09 2009-10 2010-11
INTERPRETATION: It can be inferred that inventory turnover ratio varies every year and doesnt remain constant for every annual year.
(2)
Inventory Conversion Period: This ratio indicates the number of days taken to convert the inventory. This ratio is
very useful in deciding the organizations efficiency. This also helps the organization in knowing its own efficiency to improve and also to show financing institutions about its capacity and its utilization, to obtain finance from the institutions mainly from banks.
TABLE SHOWING INVENTORY CONVERSION PERIOD IN NUMBER OF DAYS:
Particulars Inventory Turnover Ratio No. of Days Inventory Conversion Period
2008-09 4.18 365 87
2009-10 4.89 365 50
2010-11 6.91 365 53
ANALYSIS:
EWIT/MNN/ANS
Page 55
A Study on Inventory Management and Control Techniques The above table shows the inventory conversion period. Year 2008-09 is taken as the base year, 87 days in 2008-09 there is decrease in succeeding year, 50 days in 2009-10 and it increased in the year 2010-11 to 53 days.
GRAPH SHOWING INVENTORY CONVERSION PERIOD IN NUMBER OF DAYS:

100 90 80 70 60 50 40 30 20 10 0 2008-09 2009-10 2010-11
INTERPRETATION:
The inventory conversion period shows the decreasing trend which means the duration taken for conversion of inventory has been reduced.
(3)
Raw Materials and Components to Total Inventories: It shows what percentage of raw materials and components are there in the
closing value of inventory. It is expressed as a percentage over total closing inventory.
TABLE SHOWING RAW MATERIALS AND COMPONENTS: EWIT/MNN/ANS Page 56
Particulars Raw materials Closing inventory Ratio
2008-09 1,77,07,24,110 2,48,49,94,671 71
2009-10 1,69,95,50,925 2,45,02,96,814 69
2010-11 1,62,83,77,739 2,15,65,95,888 76
ANALYSIS: The above table shows the raw materials and components ratio to total inventories. There is an increase in the year 2010-11 as compared to the previous years.
GRAPHS SHOWING THE RAW MATERIAL AND COMPONENTS RATIO FOR THE PERIOD OF 2008-2010:
78 76 74 72 70 68 66 64 2008-09 2009-10 2010-11
INTERPRETATION:
It is inferred that the raw materials and components ratio varies every year.
(4)
Work-in-progress to Total Inventories: It shows what percentage of work-in-progress is there in the closing value of
inventory. It is expressed as a percentage over total closing inventory.
EWIT/MNN/ANS
Page 57
TABLE SHOWING WORK-IN-PROGRESS TO TOTAL INVENTORIES:
Particulars Work-in-progress Closing inventory Ratio
2008-09 52,46,16,447 2,48,49,94,671 21
2009-10 4,09,97,31,223 2,45,02,96,814 17
2010-11 29,53,29,798 2,15,65,95,888 14
ANALYSIS:
GRAPHS SHOWING THE WORK IN PROGRESS RATIO FOR THE PERIOD OF 2008-2010:
25 20 15 10 5 0 2008-09 2009-10 2010-11
INTERPRETATION:
EWIT/MNN/ANS
Page 58
A Study on Inventory Management and Control Techniques (5) Finished goods to Total Inventories: It shows what percentage of finished goods is there in the closing value of inventory. It expressed as a percentage over total closing inventory.
TABLE SHOWING FINISHED GOODS TO TOTAL INVENTORIES:
Particulars Finished goods Closing inventory Ratio
2008-09 17,47,55,060 2,48,49,94,671 7
2009-10 19,81,82,947 2,45,02,96,814 8
2010-11 22,16,10,834 2,15,65,95,888 10
ANALYSIS:
GRAPHS SHOWING THE FINISHED GOODS RATIO FOR THE PERIOD OF 20082010:
12 10 8 6 4 2 0 2008-09 2009-10 2010-11
EWIT/MNN/ANS
Page 59
A Study on Inventory Management and Control Techniques INTERPRETATION:
(6)
Spares and stores to total inventories: It shows what percentage of spares and stores are there in the closing value of
inventory. It is expressed as a percentage over total closing inventory.
TABLE SHOWING SPARES AND STORES TO TOTAL INVENTORIES:
Particulars Spares and stores Closing inventory Ratio
2008-09 1,48,99,054 2,48,49,94,671 0.60
2009-10 1,30,88,286 2,45,02,96,814 0.53
2010-11 1,12,77,517 2,15,65,95,888 0.52
ANALYSIS:
GRAPHS SHOWING THE STORES AND SPARES RATIO FOR THE PERIOD OF 2008-2010:
0.62 0.6 0.58 0.56 0.54 0.52 0.5 0.48 2008-09 2009-10 2010-11
INTERPRETATION:
EWIT/MNN/ANS
Page 60
A Study on Inventory Management and Control Techniques (7) Raw material Turnover Ratio: Raw material turnover ratio is the velocity at which the raw materials are converted into work in progress. If the raw materials turnover ratio is high for the company then the company is efficiently converting the raw materials into finished goods.
TABLE SHOWING RAW MATERIAL TURNOVER RATIO : Particulars Raw materials Average materials Ratio 12 11 10 stock of 2008-09 17,57,09,132 raw 1,39,34,95,889 2009-10 17,44,53,159 1,56,07,85,485 2010-11 17,31,97,186 1,72,81,35,080
ANALYSIS:
GRAPHS SHOWING THE RAW MATERIALS TURNOVER RATIO FOR THE PERIOD OF 2008-2010:
12.5 12 11.5 11 10.5 10 9.5 9 2008-09 2009-10 2010-11
INTERPRETATION: EWIT/MNN/ANS Page 61
A Study on Inventory Management and Control Techniques (8) Work-in-progress Turnover ratio: Work-in-progress turnover ratio is the velocity at which the work-in-progress is converted into finished goods. If the work-in-progress turnover ratio is high for the company then the company is efficiently converting the work-in-progress into finished goods.
TABLE SHOWING WORK IN PROGRESS TURNOVER RATIO:
Particulars Factory cost
2008-09 52,33,57,804
2009-10 52,60,66,997 39,42,77,686
2010-11 52,87,76,190 33,26,14,888
Average stock of work in 45,59,40,483 progress Ratio 1.15
1.33
1.59
ANALYSIS:
GRAPHS SHOWING THE WORK IN PROGRESS TURNOVER RATIO FOR THE PERIOD OF 2008-2010:
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2008-09 2009-10 2010-11
EWIT/MNN/ANS
Page 62
A Study on Inventory Management and Control Techniques INTERPRETATION:
(9)
Finished goods turnover ratio: Finished goods turnover ratio is the velocity at which the financial goods are
converted into sales. If the finished goods turnover ratio is high for the company then the company is efficiently the finished goods into sales.
TABLE SHOWING FINISHED GOODS TURNOVER RATIO:
Particulars Cost of goods sold
2008-09 12,11,01,80,588
2009-10 17,99,81,65,921 18,03,13,191
2010-11 14,90,72,79,126 24,26,96,384
Average stock of finished 11,79,29,998 goods Ratio 102
99
61
ANALYSIS:
GRAPHS SHOWING THE FINISHED GOODS TURNOVER RATIO FOR THE PERIOD OF 2008-2010:
120 100 80 60 40 20 0 2008-09 2009-10 2010-11
EWIT/MNN/ANS
Page 63
INTERPRETATION:
(10)
Inventory to current assets ratio: Inventory to current assets ratio indicates the relationship between the inventory
and current assets. It shows the percentage of inventory to current assets, which helps the organization in deciding the current assets policy which also affect the liquidity position of the organization.
TABLE SHOWING INVENTORY TO CURRENT ASSETS RATIO:
Particulars Closing inventory Current assets Ratio
2008-09 2,48,49,94,671 10,21,59,877 24
2009-10 2,45,02,96,814 17,81,29,094 14
2010-11 2,15,65,95,888 25,40,98,311 8
ANALYSIS:
GRAPHS SHOWING THE INVENTORY TO CURRENT ASSETS RATIO FOR THE PERIOD OF 2008-2010:
EWIT/MNN/ANS
Page 64

30 25 20 15 10 5 0 2008-09 2009-10 2010-11
INTERPRETATION:
(11)
Inventory to Total Assets: Inventory to total assets indicates the relationship between the inventory and total
assets. The significance of this ratio is it reflects the portion of inventory as a percentage of the total assets, which helps the management in deciding the utilization of remaining resources profitably. Since inventory will look up the huge funds and reduces the profitability of the organization.
TABLE SHOWING INVENTORY TO TOTAL ASSETS RATIO:
Particulars Closing inventory Total assets Ratio
2008-09 2,48,49,94,671 6,00,17,14,052 0.41
2009-10 2,45,02,96,814 3,28,71,09,854 0.75
2010-11 2,15,65,95,888 5,75,25,05,655 0.37
ANALYSIS: The portion of inventory as a percentage of total assets is 0.37 in the year 2010-11 which is low when compared with 2008-09 and 2009-10. EWIT/MNN/ANS Page 65
GRAPHS SHOWING THE INVENTORY TO TOTAL ASSETS RATIO FOR THE PERIOD OF 2008-2010:
0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2008-09 2009-10 2010-11
INTERPRETATION:
(12)
Duration of Raw material stage:
Duration of raw material means that the number of days taken for the production unit to convert the raw materials into work-in-progress. It indicates the efficiency of the organization in converting the raw materials into work-in-progress. It helps in fixing the credit period from the creditors.
TABLE SHOWING DURATION OF RAW MATERIAL RATIO:
Particulars No. of days
2008-09 365
2009-10 365 11 33.18
2010-11 365 10 36.50
Raw material turnover ratio 12 Ratio 30.41
EWIT/MNN/ANS
Page 66
A Study on Inventory Management and Control Techniques ANALYSIS:
The duration of raw material conversion period is 36.50 in the year 2010-11 which is high when compared to 2008-09 and 2009-10 i.e., 30.41 days and 33.18 days.
GRAPHS SHOWING THE DURATION OF RAW MATERIAL RATIO FOR THE PERIOD OF 2008-2010:
40 35 30 25 20 15 10 5 0 2008-09 2009-10 2010-11
INTERPRETATION:
ANALYSIS/DESIGN, INTERPRETATION OF RESULTS:

The data collected through primary and secondary sources were processed and presented in the chapter data analysis by various table and explanations. These tables thus obtained were analyzed by calculating averages, percentages, ratios and they are followed by graphs in respect of stock of raw materials, spares, work-in-progress, sales, inventory control procedures and thus to draw conclusion from the analysis done.
EWIT/MNN/ANS
Page 67
SUMMARY OF FINDINGS AND CONCLUSIONS:

This topic is undertaken for study, since inventory forms a part of any firm or organization and is of utmost focus as far as profitability is concerned. Therefore efficient management of inventory will play a major role in any manufacturing organization.
Inventory management is an art of controlling the optimum level of stocks in any organization, such that production process is not affected due to inadequate inventory. And high level of inventory will result in high carrying cost, as well as block up of funds resulting in reduced profitability of the organization.
The study is concerned with L&T-Komatsu Limited, Bangalore. The Bangalore plant was set up in 1976 to manufacture hydraulic excavators, earthmovers and to manufacture other related components. L&T markets and provides service support for hydraulic excavators manufactured by L&T-Komatsu Limited, a joint venture with Komatsu Asia & Pacific Pte Limited Singapore, a wholly owned subsidiary of Komatsu Limited, Japan.
Since L&T-Komatsu Ltd is also a manufacturing concern and therefore efficient management and an effective control over the inventory is very much essential. As inventory forms the major part of working capital and it also influences the profitability of the firm.
Findings:
By the study in company we found out that company produces the products after analyzing the market conditions and prepares the budget and places the orders accordingly.
EWIT/MNN/ANS
Page 68
A Study on Inventory Management and Control Techniques Company follows ABC analysis and VED analysis it differs from products and Material usage. It also follows just in time system for few of the Material. Company places 45% of its purchases in local areas and 55% percent it will imports its products and 85% of its imports are made from Japan remaining 15% of its imports from Germany and other countries. Company places its order in local area it will store them for 2 weeks and imported items for 1month. Company produces different types of products like PC 71, PC 72CK, PC 200, PC 300CK and so on in this PC 200 constitutes 75% of its productions and this product has much demand. Company also introduced many safety measures they introduced robotic welding and CNC machines and there by reduced man power and also risk. They also train the people before letting them into the work there by this reduced Inventory wastage to certain extent. They placed the stores department in such way that it is in middle of all types of production department (production department of PC 200, production department of PC 71 and 300CK, and hydraulic department) and reduced the risk. Company will prepare budgets for purchase of Material about 3 to 5 % less than its actual purchases. They have planted about 3750 trees around the company there by they took care of environment and provided best canteen facilities to employees and also employees have high satisfaction about their job profiles and work.
Suggestions:
Company can try to have further plans as far as production and business activities are concerned and also to forecast further requirements of working capital so that it can increase its sales and profitability.
Better coordination among purchase, production, marketing and finance departments will help in achieving greater efficiency of profitability and improving decision making.
EWIT/MNN/ANS
Page 69
A Study on Inventory Management and Control Techniques The company set benchmark with global competitors and use ideas like JIT to improve inventory management that helps to reduce Material cost. Company should maintain long-term relationship with vendors; this would help in improving in quality and delivery. ABC and FSN classification must be periodically reviewed. A periodic review and control report, Industry average of monthly, is highly desirable.
Conclusions:
As far as ratios are concerned there is a constant increase in the Inventory Turnover and decrease in Raw materials Turnover ratio. There has been a wider fluctuation in the ratios and percentages due to the recession in the year 2007-08.
Material maintenance by the L&T-K is good when compared with that of the other manufacturing companies. As the company may increase its production the imported items would be costly with the depreciation of the rupee value. The company should also look after its competitors performance as it has a competition from TELCON, HITACHI, and JCB. Since the company is a joint venture company it could also plan in getting the raw Inventory through the fastest modes so that the transit time will be reduced.
EWIT/MNN/ANS
Page 70
BIBLIOGRAPHY:
Books: 1. Financial management M.Y. Khan and P.K. Jain
Author name Book name edition,date publisher,place Naaz finance 7th 2010 himayala,bangalore
Reports 1 2 3
Websites: 1. www.scribd.com Annexure
EWIT/MNN/ANS
Page 71
EWIT/MNN/ANS
Page 72

Inventory Management Project Asma

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Inventory Management Project Asma

Hochgeladen von

Copyright:

Verfügbare Formate

A Study on Inventory Management and Control Techniques

Construction Equipment Manufacturing Industry:

A Study on Inventory Management and Control Techniques

2.1. Background and Inception of L&T-Komatsu: About Larsen & Toubro:

Henning Holck-Larsen (4/7/1907 27/7/2003)

Soren Kristian Toubro (27/02/1906-04/03/1982)

A Study on Inventory Management and Control Techniques

About L&T Komatsu Ltd:

A Study on Inventory Management and Control Techniques

2.2. Nature of the Business Carried:

A Study on Inventory Management and Control Techniques

2.3. Vision, Mission and Quality policy: Vision:

2.4. Products or Services Profile:

A Study on Inventory Management and Control Techniques

Backhoe, rock breaker, dozer blade

90 CK-3 39 Lakhs Crawler mounted

90 CK-3 39 Lakhs Crawler mounted

A Study on Inventory Management and Control Techniques

2.5. Area of Operation Global / National / Regional:

2.6. Ownership Pattern:

Number of shares 60,00,00,000 60,00,00,000 120,00,00,000

Holding percentage 50% 50% 100%

2.7. Competitors Information:

20% 45% 35%

A Study on Inventory Management and Control Techniques 2.7.3. JCB

2.7.4. INGERSOLL RAND

2.8. Infrastructural Facilities:

2.8.1. Fabrication Technology:

2.8.2. Assembly Operations:

A Study on Inventory Management and Control Techniques

2.9. Awards and Achievements: Awards:

Achievement Bangalore work established L&T pioneered the concept of

Introduced 90 CK model Introduced 300CK model

A Study on Inventory Management and Control Techniques

2000 2002 EWIT/MNN/ANS

2.10. Work Flow Model (End to End):

2.11. Future Growth and Prospectus:

than budgeted level.

Introduce new products

A Study on Inventory Management and Control Techniques

3. Mc Kenseys 7s frame work with special reference to organization under study:

A Study on Inventory Management and Control Techniques

A Study on Inventory Management and Control Techniques

Scale & Speed

ORIENTED CATION SKILLS SKILLS

MANAGERS SUPERVISORS EXECUTIVES

Style/Culture: Organization culture:

INFORMATION AND DATA MANAGEMENT

TRAINING PLANT & RESOURCE PLANNING AND MANAGEMENT EQUIPMENT MAINTENANCE

PRODUCT REALISA TION

DESIGN & DEVELOPMENT PLANNING PURCHASING PRODUCT SERVICE

A Study on Inventory Management and Control Techniques

Unionized category T technical category A administrative category S skilled category

A Study on Inventory Management and Control Techniques

No of employees in each cadre are represented:

416 082 048 100 010 656

A Study on Inventory Management and Control Techniques

A Study on Inventory Management and Control Techniques

A Study on Inventory Management and Control Techniques

BALANCE SHEET OF THE PAST THREE YEARS IS AS FOLLOWS:

2,55,79,02,132 72,17,46,273 2,00,42,19,658

1,09,95,37,196 24,87,44,349 3,44,68,14,272

A Study on Inventory Management and Control Techniques