MICON Engineering

A study on the inventory management with special
reference to MICON ENGINEERS (HUBLI) PVT LTD

INTRODUCTION OF COMPANY
The latest state of the art, new emerging, powerful and cost effective technologies have
been the main reason to set up different kind of industries like, Engineers, Textile, Mining, Food
processing, Cement, Constructions, Chemical, Drugs & Pharmaceutical, Petrochemical, Marine,
Effluent treatment, left irrigation projects, Power plants, solvent plants, off-shore plants, Sugar,
Steel, Automation & Automobile etc.
In each and every of the above said industries one device plays a crucial role. This device
is called as a VALVE a valve is a device that controls the flow rate of fluid, charges the direction
of flow, allows a fluid to flow in only one direction, allows an user to take samples, increase the
velocity of the fluid, controls the pressure drop in pipe and for many other application.
Thus there would be a tremendous requirement for valve both in domestic and global
market. Looking at the global market, it can be realized that 40% of the global valve
manufacturers are based in India. Among this 40%, 15-20%is based at Hubli city, which is well
connected to all metropolitan cities of India by Road, rail & airways.
Hubli city has got a history of valve manufacturing industries. Valves & pumps
manufacturing giants like MIRCOFINISH VALVES; BDK VALVES &AKAY INDUSTRIES
have made their base at hubli since last 35 year.
The main reason for selecting Hubli city for the above activity is, availability of raw
materials, finished goods, bought out items, well equipped machine shops, testing facilities, and
more over cheap labor with high quality consciousness. All these features have made Hubli an
ideal city for valve manufacturing.
Thus it is concluded that a valve & gearbox is considered as heart of any type of process
industry, thereby making an industry to run smoothly without creating any type of accidents and
hazardous environments.
Micon Engineers (Hubli) pvt.Ltd. A sister concern of Tec flow valves (India) pvt.Ltd.
Started its operations at Hubli with a set of committed engineers and workmen focusing on

supplying of Aquaria series valves such as, butterfly valves, dual plate check valves, air
release valves, etc, to the Global valves exporter based at Mumbai.
Innovation, Reinvention and Diversification are a continuous process at MICON
ENGINEERS Be it a new product development or enhancement of older product, we at
MICON ENGINEERS are constantly striving to give the customers maximum value for their
investment, widest product range and most complete solute

COMPANY PROFILE
Business Type
Exporter , Manufacturer
Import Percentage
25%
Primary Competitive Advantage
Impeccable quality, prompt delivery,

competitive prices and customized
designs, hands-on technical assistance to
customers
Sales Volume
Rs. 5 core
No of Staff
200
Year of Establishment
2002
No of Production Lines
Export Markets
Asian continent
Investment
Equipment
on
Manufacturing Rs. 50 lakh
OEM Service Provided
Yes
No of Engineers
18
Monthly Production Capacity
10,000 pieces
Product Range
Forged steel gate valves
Forged steel globe valves
Forged steel lift check valves
Cast steel gate valves
Cast steel globe valves
Cast steel swing check valves
Cast steel 2pc. ball valves
Cast steel 3Pc. ball valves
Bar stock ball valves
Custom designed ball valves
2pc. Investment cast ball valves

BRIEF COMPANY HISTORY:
1990
The formidable MR. M.A. Naikwadi & Sons lays the foundation of an industrial success
and Perfect Engineering Works takes shape as a manufacturing sub-contractor for supplying of
spare parts for valves and valve accessories.
1995
Started Manufacturing of needle valves in the in the name of M/s Tech Flow valves
(India). Pvt. Ltd. And taking a positive step ahead for manufacturing and supplying forged steel
gate, Globe and lift check valves to one of the leading industrial valves manufacturer at Mumbai.
2003
Establishment of one more Engineering firm Micon Engineers (Hubli) Pvt Ltd. At Hubli
with a set of committed engineers and workmen focusing on supplying of Aquaria series valves
such as butterfly valves, dual plate check valves air release valves etc., to one of the leading
valve exporter located at Mumbai. Achieved a big challenge of manufacturing 1200MM offset
disc butterfly valve with electrical actuation supplied to one of the leading steel plants in India
through a leading valve exporter from India.
2006
The Micon Engineering (Hubli) Pvt Ltd had established the quality benchmark and
achieved the prestigious ISO 9000-2000 certification through BUREU VERITAS-UKAS
International certification authority. The Sleeping giant i.e., India awakes and Micon Engineering
rises to the challenging of developing ball valves, cast steel gate, Global and swing check valves
to the huge needs of process, Petro Chemical, Power and Oil & Gas Industries.

2009&2010
Owing to the fact of demanding need of customers in global level, Micon Engineering
took a step ahead of the plant expansion of Hubli. Now we have been performing in 20000
square feet wide area, with the state of the art manufacturing facilities and enhancing the
manufacturing capacity up to the 24 size with an EOT crane of 5 TON.
We have also been re-certified with ISO 9001:2008 in this year. We have been regularly
exporting to middle-east countries since 2008.
This year became an unforgettable year for us, as we have achieved enlistment in and other
prestigious OEMs thereby enhancing our credentials and quality bench marks. EIL, JACOBE,
BHEL, L&T, TATA PROJECTS,PDIL, NPCIL, DAE.
2012&2013
This year we have got the approval for API monogram license API 600 & API 6D.
2013&2014
This year we have a plan for (Unit II) expansion of about 40000 sq ft area for
manufacturing higher size and rating valves.
VISION
To achive100%customer satisfaction, by year 2012 with 15%annual improvement.

To be increase sales by 25%each year by improving marketing process.
To reduce recurring customer complaints to zero by strengthening corrective action
process.
To reduce rejection level 0.3to 20%with annual improvement of annual over previous
year rejection level.

To enhance productivity by every year.
To achive improvement of supplies quality and deliver performance consistence with
minimum out of staff situation.
MISSION

To, design, manufacture and market quality products that meet the customer requirements
and achieve total customer satisfaction through continual improvements.
QUALITY POLICY
We the management and all involved in the Micon Engineers (Hubli) Pvt. Ltd. Are
committed to design, develop, manufacture, supply and service Industrial Valves and Allied
Products meant for global applications including oil and gas, by:
Continually improving our systems

Incorporating requirement for API monogram program.
Fulfilling quality, quantity and deliver requirement so the customer.
Keeping the price reasonable
INTRODUCTION OF THE MICON ENGINEERS

Micon Engineering is one of the dynamic growth oriented engineering and ISO
9001:2008 Certified Company engaged in manufacturing and marketing industrial Valves. These
valves are designed and manufactured to confirm strictly to ASTM, ANSI, API, BS, EN & IS
other internationally recognized standards to meet the most stringent, requirements for industrial
valves.
Owing to growing need of industry, MICON ENGINEERS (HUBLI) PVT. LTD was
established in 2004. The companys headquarters and manufacturing facilities are located at
Hubli, Karnataka State (INDIA).
We are extremely glad to inform that, Micon has certified approvals and registration with
TDC (Technical Development Committee for Indigenous Materials), ISO 9001-2008, EIL, IBR,
DNV/TUV/EIL FIRE SAFE, NPCL, UHDE, TOYO INDIA, APGENCO, TATA PROJECT LTD,
PDIL, BHEL, L&T, & ECONOSTO MIDEAST, DAE ETC.
MICONs strength is to produce quality products at affordable prices, prompt delivery
and the unflinching commitment to excellence. Our product range includes FORGED STEEL
GATE, GLOBE CHECK VALVES available in range from 15mm to 50mm and pressure class
rating 800, 1500, & 2500 with IBR certification.
With seven years of short time frame, Micon Engineers (Hubli) Private Limited has
become one of the well-acclaimed Manufacturers, Exporters and Suppliers of precise industrial
valves, based in hubli, Karnataka (India). We have been offering a large array of products that
includes Steel Gate Valves, Cast Steel Gate Valves, Steel Globe Valves, Butterfly Valves, Dual
Plate Check Valves and Air Release Valves. Using high quality raw materials such as carbon
steel, stainless steel, alloy steel, & duplex, etc., we have been designing the best products. Our
products are designed as per the API, EN, BS, ASTM, ANSI and varied other international
standards to match up with the expectations of the clientele.
Supported with more than 200 talented employees, we have been setting benchmarks of quality
and excellence. Commitment towards work and providing client satisfaction has always been our
priority. The latest CNC & Conventional machinery is used in the production to enhance
production capacity up to 16000 Valves per Month. Moreover, our fully fledged R&D and

quality testing facilities make us the trusted player in this domain. We are an ISO 9001: 2008
certified firm adhering to the strict quality policies. The advanced CAD and CAM amenities are
installed in our unit to design custom built products as per the needs of the clients.
ORGANISATION CHART
M.D

Purchase manager
Technical
Design Asst
Design Asst
Planning work
manager
Account ASST
Productio
n
HOD
Supervis
or
G M Quality H O D
Design
manager
Store keeper
Finance director
Maintenance
supervisor
IMI Quality
inspection
Final
Quality
inspection
Accounting G M
In process
Sales
coordinator
Account ASST
Marketing
executive
Workers
DEPARTMENTS
MARKETING
Marketing G M

SALES CO-ORDINATION
DESIGN DEVELOPMENT
PURCHASE DEVELOPMENT
STORES (INWARD MATERIAL INSPECTION)
PRODUCTION PLANNING AND CONTROL
QUALITY CONTROL
MACHINE SHOP
ASSEMBLY & TESTING
INSPECTION
DESPATCH
MARKETING & SALES DEPARTMENT:

This department is a helping hand to market all the products of MICON group of
company as well as its sister concerns, it is playing a vital role in realm of marketing the products
in a delighting manner, it provides pleasant services for their overall satisfaction.

MARKETING DEPARTMENT CHART:
HEAD MARKETING
SALES CO-ORDINATION
ASSISTANT MARKETING
MARKETING OBJECTIVE
To design develop the quality products which are reliable and economically.
To continuous improvement of products quality.
Cleared products are sent to dispatch section.

MARKETING STRATEGY:
Direct marketing
Magazines
System selling
Relationship marketing
Website
FINANCE DEPARTMENT
Company is a needed reputed manufacturing industry in India. It is largely responsible for
economic development of the country. It is actively practicing country's economic goal, and it
has given its contribution in solving many of the prevailing problems.
FINANCE DEPARTMENT
G M FINANCE

OFFICE ACCOUNTANT
ASSISTANT A/C
ASSISTANT A/C
OBJECTIVES:
1. To provide accurate & complete systematic information of financial Activities
2.
To maintain all the books of accounts & other financial documents.
3. To prepare periodic financial statement of the Company like profit and loss account &
balance sheet etc.
FUNCTIONS:
1.
To Preparation of daily Cash books, General ledger& Bank books.
2.
To prepare all Receipts & Payments accounts.
3.
Maintenance of all Sales Ledgers & Purchase Ledgers.
1.
Preparation of Sales Tax Returns & Excise Duty Returns & Income Tax
Returns
QUALITY ASSURANCE DEPARMENT

The main function of the QA department is to check whether the raw materials
purchased and goods manufactured are better quality or not.
IT OPERATES WHEN THE MATERIALS

In process.
IMI (invert material inspection).
FI & T (final inspection & testing).
Inspection of production planning.
QUALITY ASSURANCE DEPARMENT CHART
GM-QUALITY ASSURANCE
HOD-QUALITY ASSURANCE

ENGIENEER I.M.I
INSPECTOR QA
INSPECTOR
INSPECTOR (F.I
&T)
INSPECTOR QA
DESIGN DEPARTMENT
It is a core section of any manufacturing company. It is section where the design and
development of product is carried out. The MICON has a full pledged design and development
department.
DESIGN DEPARTMENT:

DIRECTOR
S.R ENGINEER
ENGINEER DESIGN
ENGINEER DESIGN
DRAFT MAN
OBJECTIVES
To design and develop the quality products which are reliable, economical predictable
and meets the customer requirement.
To continuously improve the quality of all products structure.
Requisition to store for assembly material assembling of material is done at this stage.
PURCHASE DEPARTMENT
It is also one of the important departments in the Company. To control the materials the
Company using First in First out Method. & ERP techniques and suppliers are-paid 30 days,
days, and 90 days depend upon the nature of materials & they will be paid on installment bases
also.
PURCHASE DEPARTMENT CHART

PURCHASE MANAGER
PURCHASE OFFICER
PURCHASE OFFICER
PURCHASE OFFICER
PURCHASE ASSITANT
PURCHASE ASSITANT
PRODUCTION DEPARTMENT:
WORKS MANAGER
PLANNING DEPARTMENT
MACHINE
ASSEMBLY SHOP

ASSEMBLY
PLANNING
MACHINE
R/M
SUPERVISOR
PLANNING
PLANNING
SUPERVISOR
SUPERVISOR
SUPERVISOR
PLANNING
RESEARCH AND DEVELOPMENT
Machinery/Equipment used in R&D Department
Make & Type of Machinery used in our R&D Department

SL.
No.
Type of Machinery
Capacity/ Configuration
Make
17" Monitor Personal
2.66 G Hz. Hard Disc. Pentium-
HCL
Qty. Remarks
3

Computer
4 CPU
17" LCD Monitor Personal

Computer
2.66 G Hz. Hard Disc. Pentium4 CPU
HCL
Print & Copy Type Printer
15, 000 Prints/ Sarridge
TOSHIBA
Inkjet Printer
30 PPM
HP
LaserJet Printer
Standard
HP
WORKING METHODS
The company's mission is to design, manufacture and market quality products that meet
the customer requirements and achieve total customer satisfaction through continual
improvements. To achieve this, the company has established a well defined quality system and
has employed a team of committed engineers, who have been performing to their level of
excellence keeping themselves upgraded with the latest innovations, Engineers excellence,
precision manufacturing, assuring 100% quality and hands-on technical assistance to the
customer.
MICON's strength is quality products at affordable prices, prompt delivery and the
unflinching commitment to excel. The Group's products have been enjoying a sustained presence
in the national markets for over two decades in chemical & and process industries. Innovation,
Reinvention and Diversification are a continuous process at MICON ENGINNERS

PRODUCT PROFILE
NATURE OF PRODUCT UNITS

i.
Types of valves
a. Gate globe check valve
b. Ball valves
c. Butterfly valves
THESE VALVES ARE CLASSIFIED AS FOLLOWS:

A)
GATE GLOBE CHECK VALVES
Forged steel
I. Gate globe check valves
Cost steel
I. Gate valves

II. Gate lift valve check
III. Globe valve check
B)
II. Global valves

III. swing check valves
BALL VALVES
Forged steel
Cost steel
1. Forgedsteel ball valves
1. Cast steel ball valves
2. Forged steel glob valves
2. Cast steel glob valves
C)
Flanged type valves
BUTTERFLY VALVES
Wafer type valves

PRODUCT PROFILE
Butterfly Valves, Ball Valves, Gate Valves, Globe Valves, Check Valves, Forged Steel Valves
Contact Details
Address
Plot No. : C-255, M. T. Sagar Industrial Estate, Gokul Road, Hubli,

Karnataka - 580030
Telephone No. :
91 - 836 - 2332900
RECENTLY UPDATED PRODUCTS

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PRODUCT PROFILE
BALL VALVES
Ball valves come in two basic designs: Floating Ball and Trunnion Mounted, with three
basic construction variants: Three piece, End Entry and Top Entry with options of either full or
reduced bore designs. Principally designed as an on/off isolation valve for a very wide range of
temperatures and pressures they have inherent quick opening flow characteristics. Specially

designed ball valves however, may offer good flow control capabilities at High Pressure. All ball
valves offer compact actuation due to their rotary quarter-turn operation. Fire safe versions are
available for use in the oil and petrochemical industries
BUTTERFLY VALVES
One of the most compact & light-weight valves available are used for a wide range of
applications, the choice of seat, lining and disc options has increased significantly over recent
years making the valve a popular choice. A wide range of materials, sizes and pressure ratings
gives reliable positive isolation and moderate flow control capability over a wide range of
applications throughout the industry. The metal seated valve is well established in petrochemical
and oil industries being lightweight, fire safe and suitable for actuation.
Butterfly valves offer a number of advantages when used for the proper application. They
may be used in a wide variety of chemical services, they are available with small dimensions
allowing for use in areas where space is limited, and they allow a high coefficient of flow

CHECK VALVES
A check valve is a mechanical device, a valve, that normally allows a fluid to flow
through it in only one direction. Check valves are two-port valves, meaning they have two
openings in the body, one for fluid to enter and the other for fluid to leave. There are various
types of check valves used in a wide variety of applications. Although they are available in a
wide range of sizes and costs, many check valves are very small, simple, and / or cheap. Check
valves work automatically and most are not controlled by a person or any external control;
accordingly, most do not have any valve handle or stem. The bodies (external shells) of most
check valves are made of metal
DIAPHRAGM VALVES

Diaphragm Valves are mainly used in water treatment plants, fertilizer & petrochemicals
industries, chemical industries, refineries, thermal power stations, and other process industries.
Equally suited to on and off, or flow control applications, a diaphragm valve will handle positive
pressures or high vacuum. Due to the wide range of material options it will handle almost all
applications within its temperature and pressure ranges (175C max. and 16 bar max.) and as
such is used in almost every industry on both corrosive and abrasive applications. All working
parts are isolated from the line media which enhances its reliability. Maintenance is a simple task
with the body remaining in the pipe, the valve thus being field serviceable. It has linear flow
characteristics which makes it well suited to throttling or modulating duties. On/off and control
automation is possible with the use of modern compact actuators and accessories
GATE VALVES
This is the most common and traditional type of valve. The valves are large to
accommodate the yoke and stem mechanism, but fully open the full bore design provides an
uninterrupted flow path. Generally either used fully open or closed, for on/off isolation, and not

used for modulating flow control duties. Variants include Solid and Flexible Wedge Gates,
Double Disc Gates, Through Conduit Valves, Parallel Slide Valves and Knife Gate Valves.
GLOBE VALVES
Globe valves are designed for flow control or on/off isolation of fluids. They are
manufactured in straight patterns, angle patterns, oblique patterns and needle designs with a large
variety of internal seat construction variants to handle High Pressure flow control duties. A wide
choice of metal body options and trims means Globe valves are widely used throughout industry.

OUR PRODUCTS
Over the last few years we have been introducing new products on a regular basis, such as
air release valves, cast steel gate valves, globe valves, swing check valves, dual plate check
valves to name a few. We are on the constant look for innovative products that complement our
world class product range. With our well-established network of sales offices and leading
industry clientele, we have been able to successfully branch out and gain product acceptance for
various ancillary products. Our wide and comprehensive range of products includes:
1.
Forged steel globe valves
2.
Forged steel lift check valves
3.
Cast steel gate valves
4.
Cast steel globe valves
5.
Cast steel swing check valves
6.
Cast steel 2pc. ball valves
7.
Cast steel 3pc. valves
8.
Custom designed ball valves
9.
10.

MAIN COMPETITORS OF MICON ENGINEERS
AkayIndustries.
Audo Industries
Cresent Industries.
KSB Industries
Weir BDK
Niton
Micro finish
Procep.

INTRODUCTION TO THE INVENTORY MANAGEMENT

Adequate inventories facilitates production activities and help to customers satisfaction by
providing good service.
The basic financial aim of an enterprise is maximization of its value. At the same time, a
large both theoretical and practical meaning has the research for determinants increasing the firm
value. Most financial literature contains information about numerous factors influencing the
value. Among those factors is the net working capital and elements creating it, such as the level
of cash tied in accounts receivable, inventories and operational cash balances. A large majority of
classic financial models proposals, relating to the optimum current assets management, were
constructed with net profit maximization in view. In order to make these models more suitable
for firms, which want to maximize their value, some of them must be reconstructed. In the
sphere of inventory management, the estimation of the influence of changes in a firms decisions
is a compromise between limiting risk by having greater inventory and limiting the costs of
inventory. It is the essential problem of the corporate financial management.
The basic financial inventory management aim is holding the inventory to a minimally
acceptable level in relation to its costs. Holding inventory means using capital to finance
inventory and links with inventory storage, insurance, transport, obsolescence, wasting and
spoilage costs. However, maintaining a low inventory level can, in turn, lead to other problems
with regard to meeting supply demands. The inventory management policy decisions, create the
new inventory level in a firm. It has the influence on the firm value. It is the result of opportunity
costs of money tied in with inventory and generally of costs of inventory managing. Both the
first and the second involve modification of future free cash flows, and in consequence the firm
value changes.

Inventory changes (resulting from changes in inventory management policy of the firm)
affect the net working capital level and the level of operating costs of inventory management in a
firm as well. These operating costs are result of storage, insurance, transport, obsolescence,
wasting and spoilage of inventory.
Maximization of the owners wealth is the basic financial goal in enterprise management.
Inventory management techniques must contribute to this goal. The modifications to both the
value-based EOQ model and value-based POQ model may be seen in this article. Inventory
management decisions are complex. Excess cash tied up in inventory burdens the enterprise with
high costs of inventory service and opportunity costs. By contrast, higher inventory stock helps
increase income from sales because customers have greater flexibility in making purchasing
decisions and the firm decrease risk of unplanned break of production. Although problems
connected with optimal economic order quantity and production order quantity remain, we
conclude that value-based modifications implied by these two models will help managers make
better value-creating decisions in inventory management.
INTRODUCTION OF INVENTORY
Inventories constitute the most significant part of current assets of a large majority of
companies in India. On an average, inventories are approximately 60% of current assets in public
limited companies in India. Because of the large size of inventories maintained by firms, a
considerable amount of feuds is required to be committed to them. It is therefore, absolutely
imperative to manage inventories efficiently and efficiently in order to avoid unnecessary
investment. A firm neglecting the management of inventories will be jeopardizing its long run
profitability and may fail ultimately. It is possible for fore a company to reduce its levels of
inventories to a considerable degree e.g. 10 to 20 percent, without any adverse effect on
production and sales, by using simple inventory planning and control techniques. The reduction
in excessive inventory carries a favorable impact on a companys profitability
MEANING OF INVENTORY

Inventory is the physical stoke of goods maintained in an organization for its smooth
sunning. In accounting language it may mean stock of finished goods only. In a manufacturing
concern, it may include raw materials, work-in-progress and stores etc. in the form of materials
or supplies to be consumed in the production process or in the rendering of services. In brief,
Inventory is unconsumed or unsold goods purchased or manufactured.
NATURE OF INVENTORIES
Inventories are stock of the product a company is manufacturing for sale and components
that make up the product. The various forms in which inventory exist in a manufacturing
company are raw materials, work in progress and finished goods.
RAW MATERIALS
Raw materials are those inputs that are converted into finished product though the
manufacturing process. Raw materials inventories are those units which have been purchased
and stored for future productions.
WORK IN PROGRESS
These inventories are semi manufactured products. They represent products that need
more work before they become finished products for sales.
PACKAGING MATERIAL
Packaging material includes those items which are used for packaging of perfumery
product i.e. cap of the bottle, pump, collar, liver, box etc.
FINISHED GOODS
Finished goods inventories are those completely manufactured products which are ready
for sale. Stock of raw materials and work in progress facilitate production. While stock of
finished goods is required for smooth marketing operation. Thus, inventories serve as a link
between the production and consumption of goods.

The levels of four kinds of inventories for a firm depend on the nature of its
business. A manufacturing firm will have substantially high levels of all three kinds of
inventories, while a retail or wholesale firm will have a very high and no raw material and work
in progress inventories. Within manufacturing firms, there will be differences. Large heavy
engineering companies produce long production cycle products, therefore they carry large
inventories. On the other hand, inventories of a consumer product company will not be large,
because of short production cycle and fast turn over.
INVENTORY MANAGEMENT
As the cost of logistics increases the manufacturers are looking to inventory management
as a way to control costs. Inventory is a term used to describe unsold goods held for sale or raw
materials awaiting manufacture. These items may be on the shelves of a store, in the backroom
or in a warehouse mile away from the point of sale. In the case of manufacturing, they are
typically kept at the factory. Any goods needed to keep things running beyond the next few hours
are considered inventory.
"Inventory" to many small business owners is one of the more visible and tangible
aspects of doing business. Raw materials, goods in process and finished goods all represent
various forms of inventory. Each type represents money tied up until the inventory leaves the
company as purchased products. Likewise, merchandise stocks in a retail store contribute to
profits only when their sale puts money into the cash register.
In a literal sense, inventory refers to stocks of anything necessary to do business. These
stocks represent a large portion of the business investment and must be well managed in order to
maximize profits. In fact, many small businesses cannot absorb the types of losses arising from
poor inventory management. Unless inventories are controlled, they are unreliable, inefficient
and costly.
Inventory management simply means the methods you use to organize, store and replace
inventory, to keep an adequate supply of goods while minimizing costs. Each location where
goods are kept will require differen t methods of inventory management. Keeping an inventory,
or stock of goods, is a necessity in retail. Customers often prefer to physically touch what they

are considering purchasing, so you must have items on hand. In addition, most customers prefer
to have it now, rather than wait for something to be ordered from a distributor. Every minute that
is spent down because the supply of raw materials was interrupted costs the company unplanned
expenses
DEFINITIONS OF INVENTORY MANAGEMENT

1.
Policies, procedure and techniques employed in maintaining the optimum number or
amount of each inventory item.

2.
Systems and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and projected inventory status.

3.
Handles all functions related to the tracking and management of material. This would
include the monitoring of material moved into and out of stockroom locations and the
reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle
counting support etc.
DEFINITIONS OF INVENTORY
1. Inventory: - goods that businesses intend to sell to their customers or raw materials or in
process items that will be converted into salable goods.
2. Inventory is the stock of idle resources which has economic value and is maintained to
fulfill the present and the future needs of an organization.
3. In manufacturing organization: Inventory can be as raw materials, spare parts,
components and finished goods etc
4. In Service Organization: Inventory of any banks can be broachers, forms, pamphlets, and
also can be currency notes and coins. Hospitals can have inventory as syringes, glucose
bottles, medicines etc.
IMPORTANCE OF INVENTORY

Inventory represents one of the most important assets that most businesses possess,
because the turnover of inventory represents one of the primary sources of revenue generation
and subsequent earnings for the company's shareholders/owners.
The word 'inventory' can refer to both the total amount of goods and the act of counting
them. Many companies take an inventory of their supplies on a regular basis in order to avoid
running out of popular items. Others take an inventory to insure the number of items ordered
matches the actual number of items counted physically. Shortages or overages after an inventory
can indicate a problem with theft or inaccurate accounting practices.
Possessing a high amount of inventory for long periods of time is not usually
good for a business because of inventory storage, obsolescence and spoilage costs. However,
possessing too little inventory isn't good either, because the business runs the risk of losing out
on potential sales and potential market share as well.
OBJECTIVES OF INVENTORY MANAGEMENT
The basic managerial objectives of inventory control are two-fold; first, the avoidance
over-investment or under-investment in inventories; and second, to provide the right quantity of
standard raw material to the production department at the right time. In brief, the objectives of
inventory control may be summarized as follows:
A.
OPERATING OBJECTIVES:
(1) Ensuring Availability of Materials: There should be a continuous availability of all types of
raw materials in the factory so that the production may not be help up wants of any material. A
minimum quantity of each material should be held in store to permit production to move on
schedule.
(2) Avoidance of Abnormal Wastage: There should be minimum possible wastage of materials
while these are being stored in the godowns or used in the factory by the workers. Wastage

should be allowed up to a certain level known as normal wastage. To avoid any abnormal
wastage, strict control over the inventory should be exercised. Leakage, theft, embezzlements of
raw material and spoilage of material due to rust, bust should be avoided.
(3) Promotion of Manufacturing Efficiency: If the right type of raw material is available to the
manufacturing departments at the right time, their manufacturing efficiency is also increased.
Their motivation level rises and morale is improved.
(4) Avoidance of Out of Stock Danger: Information about availability of materials should be
made continuously available to the management so that they can do planning for procurement of
raw material. It maintains the inventories at the optimum level keeping in view the operational
requirements. It also avoids the out of stock danger.
(5) Better Service to Customers: Sufficient stock of finished goods must be maintained to
match reasonable demand of the customers for prompt execution of their orders.
(6) Highlighting slow moving and obsolete items of materials.
(7) Designing poorer organization for inventory management: Clear cut accountability
should be fixed at various levels of organization.
B. FINANCIAL OBJECTIVES:
(1) Economy in purchasing: A proper inventory control brings certain advantages and
economies in purchasing also. Every attempt has to make to effect economy in purchasing
through quantity and taking advantage to favorable markets.
(2) Reasonable Price: While purchasing materials, it is to be seen that right quality of material
is purchased at reasonably low price. Quality is not to be sacrificed at the cost of lower price.
The material purchased should be of the quality alone which is needed.
(3)Optimum Investing and Efficient Use of capital: The basic aim of inventory control from
the financial point of view is the optimum level of investment in inventories. There should be no

excessive investment in stock, etc. Investment in inventories must not tie up funds that could be
used in other activities. The determination of maximum and minimum level of stock attempt in
this direction
IMPORTANCE OF INVENTORY MANAGEMENT
1. COUNTING CURRENT STOCK

All businesses must know what they have on hand and evaluate stock levels with respect to
current and forecasted demands. You must know what you have in stock to ensure you can meet
the demands of customers and production and to be sure you are ordering enough stock in the
future. Counting is also important because it is the only way you will know if there is a problem
with theft occurring at some point in the supply chain. When you become aware of such
problems you can take steps to eliminate them.
2. CONTROLLING SUPPLY AND DEMAND
Whenever possible, obtain a commitment from a customer for a purchase. In this way, you
ensure that the items you order will not take space in your inventory for long. When this is not
possible, you may be able to share responsibility for the cost of carrying goods with the
salesperson, to ensure that an order placed actually results in a sale. You can also keep a list of
goods that can easily be sold to another party, should a customer cancel. Such goods can be
ordered without prior approval.
Approval procedures should be arranged around several factors. You should set minimum and
maximum quantities which your buyers can order without prior approval. This ensures that you
are maximizing any volume discounts available through your vendors and preventing overordering of stock. It is also important to require pre-approval on goods with a high carrying cost.

3 . KEEPING ACCURATE RECORDS
Any time items arrive at or leave a warehouse, accurate paperwork should be kept, itemizing the
goods. When inventory arrives, this is when you will find breakage or loss on the goods you
ordered. Inventory leaving your warehouse must be counted to prevent loss between the
warehouse and the point of sale. Even samples should be recorded, making the salesperson
responsible for the goods until they are returned to the storage facility. Records should be
processed quickly, at least in the same day that the withdrawal of stock occurred.
4 . MANAGING EMPLOYEES
Buyers are the employees who make stock purchases for your company. Reward systems
should be set in place that encourage high levels of customer service and return on investment
for the product lines the buyer manages.
Warehouse employees should be educated on the costs of improper inventory
management. Be sure they understand that the lower your profit margin, the more sales must be
generated to make up for the lost goods. Incentive programs can help employees keep this in
perspective. When they see a difference in their paychecks from poor inventory management,
they are more likely to take precautions to prevent shrinkage.
Each stock item in your warehouse or back room should have its own procedures for
replenishing the supply. Find the best suppliers and storage location for each and record this
information in official procedures that can easily be accessed by your employees.
Inventory management should be a part of your overall strategic business plan. As the
business climate evolves towards a green economy, businesses are looking for ways to leverage
this trend as part of the big picture. This can mean re-evaluating your supply chain and
choosing products that are environmentally sound. It can also mean putting in place recycling
procedures for packaging or other materials. In this way, inventory management is more than a
means to control costs; it becomes a way to promote your business.
SUCCESSFUL INVENTORY MANAGEMENT

Successful inventory management involves balancing the costs of inventory with the benefits of
inventory. Many small business owners fail to appreciate fully the true costs of carrying
inventory, which include not only direct costs of storage, insurance and taxes, but also the cost of
money tied up in inventory. This fine line between keeping too much inventory and not enough is
not the manager's only concern. Others include:
Maintaining a wide assortment of stock -- but not spreading the rapidly moving ones too
thin;
Increasing inventory turnover -- but not sacrificing the service level;
Keeping stock low -- but not sacrificing service or performance.
Obtaining lower prices by making volume purchases -- but not ending up with slow
moving inventory; and
Having an adequate inventory on hand -- but not getting caught with obsolete items.
The degree of success in addressing these concerns is easier to gauge for some than for
others. For example, computing
A BOUT INVENTORY CONTROL

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A study on the inventory management with special

reference to MICON ENGINEERS (HUBLI) PVT LTD

A study on the inventory management with special

A study on the inventory management with special

Primary Competitive Advantage

Impeccable quality, prompt delivery,

Manufacturing Rs. 50 lakh

OEM Service Provided

Monthly Production Capacity

Forged steel gate valves

Forged steel globe valves

Forged steel lift check valves

Cast steel gate valves

Cast steel globe valves

Cast steel swing check valves

Cast steel 2pc. ball valves

Cast steel 3Pc. ball valves

Bar stock ball valves

Custom designed ball valves

2pc. Investment cast ball valves

3pc. Investment cast ball valves

A study on the inventory management with special

A study on the inventory management with special

To achive100%customer satisfaction, by year 2012 with 15%annual improvement.

year rejection level.

A study on the inventory management with special

Continually improving our systems

INTRODUCTION OF THE MICON ENGINEERS

A study on the inventory management with special

A study on the inventory management with special

A study on the inventory management with special

A study on the inventory management with special

MARKETING & SALES DEPARTMENT:

A study on the inventory management with special

A study on the inventory management with special

A study on the inventory management with special

To maintain all the books of accounts & other financial documents.

To Preparation of daily Cash books, General ledger& Bank books.

To prepare all Receipts & Payments accounts.

Maintenance of all Sales Ledgers & Purchase Ledgers.

QUALITY ASSURANCE DEPARMENT

IT OPERATES WHEN THE MATERIALS

A study on the inventory management with special

QUALITY ASSURANCE DEPARMENT CHART

A study on the inventory management with special

A study on the inventory management with special

PURCHASE DEPARTMENT CHART

A study on the inventory management with special

A study on the inventory management with special

RESEARCH AND DEVELOPMENT

Machinery/Equipment used in R&D Department

Make & Type of Machinery used in our R&D Department

17" Monitor Personal

2.66 G Hz. Hard Disc. Pentium-

A study on the inventory management with special

17" LCD Monitor Personal

2.66 G Hz. Hard Disc. Pentium4 CPU

Print & Copy Type Printer

15, 000 Prints/ Sarridge

A study on the inventory management with special

NATURE OF PRODUCT UNITS

THESE VALVES ARE CLASSIFIED AS FOLLOWS:

GATE GLOBE CHECK VALVES