“A STUDY ON INVENTORY MANAGEMENT AT ABB LTD”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

OF

BACHELOR OF COMMERCE DEGREE COURSE

OF
BANGALORE UNIVERSITY

BY
Mr.Sandeep B.S

REG NO:

19SKC41040

UNDER THE GUIDANCE OF

DR. Ravi V
Program Director

AIMS SCHOOL OF BUSINESS

(AIMS INSTITUTE OF HIGHER

EDUCATION)

PEENYA, BANGALORE-

560058 2021-2022
 DECLARATION

I, Sandeep BS (19SKC41023) hereby declare that dissertation titled “STUDY ON

INVENTORY MANAGEMENT AT ABB LTD” is based on an original study conducted by

me under the guidance of Dr. Ravi V

This project report has not formed a basis for the award of any other Degree/Diploma of any

University or Institution

Place: Bangalore Sandeep BS

Date: 19SKC41040
 CERTIFICATE FROM THE COLLEGE

AIMS SCHOOL OF BUSINESS

(AIMS INSTITUTE OF HIGHER

EDUCATION)

1st Cross, 1st Stage, Peenya Industrial Area Bengaluru – 560058, Karnataka

Certified that this project titled, “STUDY ON INVENTORY MANAGEMENT AT ABB

LTD ”, is based on an original project study conducted by Mr. Sandeep BS under the guidance

of Dr. Ravi V

This project report has not formed a basis for the award of any other Degree/Diploma of any

University or Institution.

Program Director Principal

Place: Bangalore Place: Bangalore

Date: Date:
CERTIFICATE FROM THE COLLEGE
 CERTIFICATE FROM GUIDE

This is to certify that the project report titled “STUDY ON INVENTORY MANAGEMENT

AT ABB LTD ” is an original work of Mr. Sandeep BS bearing university register Number

19SKC41040 is being submitted in partial fulfillment for the award ofthe Bachelor Degree in

Business Administration of Bangalore university.

The report has not been submitted earlier either to this university or to any Institution for the

fulfillment of the requirement of course of study. Mr. Sandeep BS is guided by Dr. Ravi V.

who is the Faculty Guide as per the regulation of Bangalore University.

Place: Bangalore Dr. Ravi V

Date:
 ACKNOWLEDGEMENT

The successful completion of the project would be incomplete without mention of the people who made it

possible. In spite of my commitment and hard work there are some special people who guided me towards

the completion of project. Here I avail this opportunity to thank them.

I express my sincere thanks to the Dr. Kiran Reddy Meka, Founder Principal, AIMS Institutes of

Higher Education and Dr Ravi V , Professor & Director- B..COM for having supported me to

successfully complete this project work.

I would like take opportunity to thank and express my deep sense of gratitude to my guide Dr. Ravi V ,

Professor & Director- B..COM and other faculty members for their valuable guidance at all stages of the

study, their advice, constructive suggestions and continuous encouragement without which it would have

not been possible to complete the project.

I would like to thank my parents, family members, friends for their constant support and encouragement.

Mr. Sandeep BS
19SKC41040
B.Com 6TH Semester
 TABLE OF CONTENTS

CHAPTER PAGE
CONTENTS
NO. NO.

1-8
1. INTRODUCTION

2 INDUSTRY PROFILE 9-28

3. RESEARCH DESIGN 29-32

ANALYSIS ANDINTERPRETATION 33-61

4.

FINDINGS, SUGGESTIONS AND CONCLUSION

62-65
5.

BIBLIOGRAPHY 66
6.
 LIST OF TABLES

Table No. Title Page No.

4.1 Table showing data for the inventory turnover 2018-2021 34
4.2 Table showing data for the raw materials form 2018-2021 36
4.3 Table showing data for the work in process turnover ratio from 2018-2021 38
4.4 Table showing data for Finished Goods Turnover Ratio 40
4.5 Table showing data comparison of turnover ratios from 2018-2021 42
4.6 Table showing data for the inventory holding period from 2015-2018 44
4.7 Table showing data for the raw material holding period for 2018-2021 46
4.8 Table showing data for the work in process holding period from 2018-2021 48
4.9 Table showing data for the finished goods holding period form 2018 -2021 50
4.10 Table showing comparison data for the inventory holding period from 2018-2021 52
4.11 Table showing data for the ABC analysis for 2018 54
4.12 Table showing Data ABC analysis for 2019 56
4.13 Table showing data for ABC Analysis for 2020 58
4.14 Table showing data for the ABC analysis for 2021 60

LIST OF GRAPHS

Table No. Title Page No.

4.1 Graph showing data for the inventory turnover 2018-2021 35
4.2 Graph showing data for the raw materials form 2018-2021 37
4.3 Graph showing data for the work in process turnover ratio from 2018-2021 39
4.4 Graph showing data for Finished Goods Turnover Ratio 41
4.5 Graph showing data comparison of turnover ratios from 2018-2021 43
4.6 Graph showing data for the inventory holding period from 2015-2018 45
4.7 Graph showing data for the raw material holding period for 2018-2021 47
4.8 Graph showing data for the work in process holding period from 2018-2021 49
4.9 Graph showing data for the finished goods holding period form 2018 -2021 51
4.10 Graph showing comparison data for the inventory holding period from 2018-2021 53
4.11 Graph showing data for the ABC analysis for 2018 55
4.12 Graph showing Data ABC analysis for 2019 57
4.13 Graph showing data for ABC Analysis for 2020 59
4.14 Graph showing data for the ABC analysis for 2021 61
 CHAPTER 01
INTRODUCTION

[1]
 INTRODUCTION:

Every enterprise needs inventory for smooth running of its activities. It server as a link
between the production and distribution process. The greater a time lag, the higher the
requirement of inventory the unforeseen fluctuation of inventory demand and supply of
goods, fluctuating inventory prices, necessitate the need for inventory management.

The investment inventory constitutes the most significant part of the current assets
inventory of the under taking. Thus it is very essential to have a proper control and
management of inventory.\

Meaning and nature of inventory

The general meaning of inventory is stock of goods or list of goods inventory. In
accounting language it means stock of finished goods. For inventory manufacturing
concern it includes raw materials, work in progress, consumables finished goods and
spares etc
.

Forms of Inventories

I. Raw materials:

If forms a major input inventory in organization. The quantity of raw materials

required will be determined by the rate of consumption.

II. Work in Progress :

The work in progress is that stage of stocks, which are in between raw materials and finished
goods.

III. Consumables :

These are the material, which are needed to smoothen, the process of production. These
do not directly go into production, but act as catalyst.

[2]
IV. Finished Goods :

These are the goods, which are ready to sale for the consumers. The stock of finished goods
provides as buffer between production and market.

V. Spares:
Spares also from a part of inventory. The stocking policies differ from industry to
industry.

Inventories cost account for nearly 55 percent of the cost of production, as it is clear from
an analysis of financial statements of large number of private and public sector
organizations. So, It essential to establish suitable procedures for proper control of
materials from the time of purchase order placed with supplier until they have been
consumed properly and accounted for.

Definition:

The term inventory refers to assets, which will be sold in future in the normal course of
business operations. The assets, which the firm stores as inventory in anticipation of
need, are raw materials, work-in- progress/process, and finished goods.

Inventory often constitute a major element of a total working capital and hence it has
been correctly observed, 'Good inventory management is good financial management’.

Inventory control is a system, which ensures the provision of the required quantity at the
required time with the minimum amount of capital.
Inventories are the second largest asset category for the manufacturing firms next to plant
and equipment.
Inventory control includes scheduling, the requirements, purchasing, receiving and
inspecting, maintaining stock records and stock control. Inventory control is a matter of
coordination. A proper material control helps in improving the input-output ratio.

[3]
 Objective of inventory management
The main objective of inventory management are operational and financial. The
operational object means availability of materials and spares in sufficient quantities for
undisturbed flow of production. The financial objective means investments in inventories
should not remain idle and minimum working capital should be locked in it.

THE OTHER OBJECTIVES ARE:

1. To study the inventory management technique at abb.
2. To analyze the effectiveness of inventory management techniques and its impact on
profitability.
3. To assess the efficiency inventory management

NEED FOR INVENTORY CONTROL:

If a cost accounting system is to be effective there must be a proper control of inventory
and supplies form the time orders are placed with suppliers until they have been effectively
utilized in production
Materials are equivalent to cash and they make up an important part of the total cost. It is
essential that materials should be properly safeguarded and correctly accounted. Proper
control of material can make a substantial contribution to the efficiency of a business. The
success of a business concern largely depends upon efficient purchasing, storage,
consumption and accounting.
In a large firm the planning and routing department is responsible for arranging how and where
the work is to be done and issue instructions. It sets definite time schedules so that
necessary materials are delivered to the proper department in proper time not too long before
hand neither lest it should interfere with other work nor after they are required as this
result in idle time.
Business firm keep inventories for different purposes. Every firm big or small trading or
manufacturing has to maintain some minimum level of inventories. Based on some motives
the inventories are maintain

1. Transaction motives:
Every firm has to maintain some level of inventory to meet the day-to- day requirements of
sales, production process, customer demand etc. In this finished goods as well as raw material

[4]
are kept as inventories for smooth production process of the firm.

2. Precautionary motive:
A firm should keep some inventory for unforeseen circumstances also like loss due
to natural calamities in a particular area, strikes, lay outs etc so the firm must have
some finished goods as well as raw-materials tc meet circumstances.

3. Speculative motive:
The firm may be made to keep some inventory in order to capitalize an opportunity to
make profit due to price fluctuations.

REASONS AND BENEFITS OF INVENTORY:.

The optimal level of maintaining inventory is a subjective matter and depends upon the
features of a particular firm,

(i) Trading firm:

In case of a trading firm there may be several reasons for holding inventories because of
sales activities that should not be interrupted. More over it is not always possible to
procure the goods whenever there is a sales opportunity as there is always a time gap
required between purchase and sale of goods. Thus trading concern should have some
stock of finished goods in order to under take sales activities independent of the
procurement schedule.
Similarly, a firm may have several incentives being offered in terms of quantity discounts
or lower price etc by the supplier of goods. There is trading concern inventory helps in a de-
inking between sales activity and also to capitalize a profit of opportunity due to purchase
made at a discount will result in lowering the total cost resulting in higher profits for the
firm.

(ii) Manufacturing firm:

A manufacturing firm should have inventory of not only the finished goods, but also of
raw materials and work-in-progress for following reasons.

(a) Uninterrupted production schedule:

Every manufacturing firm must have sufficient stock of raw materials inorder to have the

[5]
regular and uninterrupted production schedule. If there is stock out of raw materials in
order to have the regular and uninterrupted production schedule. If there is stock out of raw
material at any stage of production process then the whole production may cometo a half.
This may result in custom dissatisfaction as the goods cannot be delivered in time more
over the fixed cost will continue to be incurred even ff there is no production.
Further work-in-progress would let the production process run smooth. In most of
manufacturing concerns the work in progress is a natural outcome of the production
schedule and it also helps in fulfilling when some sales orders, even if the supply of raw-
materials have stopped.

(b) Independent sales activity:

Inventory of finished goods is required not only in trading concern but manufacturing
firms should also have sufficient stock of finished goods. The production schedule is a
time consuming process and in most of the cases goods cannot be produced just after
receiving orders. Therefore, every firm has to maintain minimum level of finished goods
in order to deliver the goods as soon as the order is received.

Costs involved in inventory:

Every firms maintains inventory depending upon requirement and other features of firm for
holding such inventory some cost will be incurred there are as follows:
(a) Carrying Cost;
This is the cost incurred in Keeping or maintaining an inventory of one unit of raw
materials, work-in -process or finished goods. Here there are two basic cost involved.

(i) Cost of storage:

It includes cost of storing one unit of raw materials by the firm. This cost may be for the
storage of materials. Like rent of spaces occupied by stock, stock for security, cost of
infrastructure, cost of insurance, and cost of pilferage, warehousing costs, handling
cost etc.

(ii) Cost of financing:

This cost includes the cost of funds invested in the inventories .It includes the required
rate of return on the investments in inventory in addition to storage cost etc. The Carrying
cost include there fore both real cost and opportunity cost associated with the funds invested

[6]
in the inventories.The total carrying cost is entirely variable and rise in directly
proportion to the level of inventories carried.

Total carrying cost = (carrying Cost per unit) x (Average inventory)

(b) Cost of ordering:

The cost of ordering includes the cost of acquisitions of inventories. It is the cost of
preparation and execution of an order including cost of paper work and
Communicating with the supplier.

The total ordering cost is inversely proportion to annual inventory of firm. The ordering
cost may have a fixed component, which is not affected by the order size: and a
variable component, which changes with the order size.

Total Ordering Cost = (No.Of orders) x (cost per

order).

(c) Cost of stock out:

It is also called as Hidden cost. The stock out is the situation when the firm is not
having units of an item in stores but there is a demand for that Item either for the customers
or the production department .The stock out refers to zero level inventory .So there is a
cost of stock out in the sense that the firm face a situation of lost sales or back orders
.The stock outs are quite often expensive. Even the good will of firm also be effected due to
customers dissatisfaction and may lose business in case of finished goods, where as in raw
materials or work in process can cause the production process to stop and it is
expensive because employees will be paid for the time not spend in producing goods.
The carrying cost and the ordering cost are opposite forces and collectively. They
determine the level of inventors in a firm.

Total cost =(cost of items purchased) +(Total Carrying and ordering cos

[7]
Valuation of Inventory:
The methods of valuing inventory are combination of the actual cost and replacement cost plans.
The chief advantage of the cost or net realizable value rule is that it is conservative. Hence the
methods of Valuation of inventory are quite independent of system of mincing.

In balance sheet closing stock is shown under current assets and is also credited to manufacturing
or trading accounts. The inventories are valued on the basis as follows.

 Cost of raw materials in stock may include freight charges and carrying cost. But such cost
should not exceed market price,
 Work -in -process is generally valued at cost, which includes cost of materials, labor. And the
proportionate factory overhead, as it is reasonable according to degree of completion,

 Cost of finished goods wound normally to be total or full cost it includes prime cost plus
appropriate amount of the overhead. Selling and distribution cost is deducted on the other hand
work in progress may be valued at work in progress may be Valued at work cost, marginal cost,
prime cost or, even at direct materials.
The organization is given the chance to get a constant acknowledgment. The venture causes us
comprehend the organization's profile, work process show, organization subtleties, helping me
explore different avenues regarding encounters in the organization and for my investigation to
recognize content. One of the key parts of assembling organizations is stock administration of
InventoryManagement, the examination chose for the investigation, as the organization has a place
with the assembling business.

Stock Management is supervision of non-promoted resources (stock) and stock things. An

organization of store network the executives oversees the Inventory Management stream at the
purpose ofoffer from the Warehouse and from these offices.

8
 CHAPTER 02
INDUSTRY PROFILE

9
INDUSTRY PROFILE

When is it that India will see a day when no company will hold itself back from going in for
the latest automation technologies due to budget constrains?

Indian markets are gradually beginning to feelthe trigger for hardware, controland mechanization.
Today, the way toward bringing issues to light among Indian customers has guaranteed that the
business has the correct blend of innovations that can create improvement openings, and now the
business has been searching for and for quite a while.

Picking the correct computerization structures offers us the chance to incorporate assembling
forms with business frameworks. This is a noteworthy outcome of lessening reliance on
imported merchandise from industrialized nations. In this way, we can deliver the best quality
products inside India and make them accessible to all clients at a progressively moderate cost.

Today, India needs computerization in each industry. Moving factories for nourishment handling,
mining, oil and gas and drinking, including power plants, stones and earth ventures, glass and
earthenware production, iron, steel, non-ferrous metal creation, steel and aluminum sheets,
substance and pharmaceutical, petrochemicals, mash, cardboard and paper, Relating to

water, sewage plants, consuming plants and other ecological assurances The procedure of
mechanical endeavors made under the domain of all, however, every one of these enterprises
comprise of somewhere around one piece of the entire procedure which will require propelled
mechanization, where it is lagging. In India, a sum of 21 percent of power (with the exception of
robbery) is lost in transmission and appropriation. In the event that we utilize mechanical
procedures, we can lessen this misfortune to a base dimension. In the wake of comprehension of
the mechanization prerequisite of the power part, the legislature is in the 2010 Union Budget,
and plans to make and execute elective sources utilizing computerization. Nonetheless, if India
needs to accomplish its objectives completely, component ought to be legitimately actualized
here.
Generation rates will increment and drive will keep on costing more.

10
 COMPANY PROFILE

ABB is a pioneer in power and robotized innovations, improving utility and industry
customers execution and decreasing ecological effect. ABB Group organizations are working
in excess of 100 nations and utilize 130,000 individuals.

ABB activities in India incorporate 12 fabricating offices, 10,355 workers. Clients are serving
more than 23 markets, 8 administration focuses, 3 implementation stockrooms, 2 Power and
Automation Engineering Centers and a wide across the country nearness of 550 channel
accomplices organize. ABB Group is raising Indian tasks for undertakings, items, administrations,
building and R and D.

History
General:
 The organization was joined into The Hindustan Electric Company Limited on 24.12.1949
 On 24.09.1965, the organization's name was changed to Hindustan Brown BowryLimited (HBB).

11
 The name was changed to Ass Brown Bower Limited, which was actualized on13.10.1989,
as per the ASSG's Amgamation plan with HCB on January 1, 1989.
 Effective 16.04.2003, the name was changed to ABB Limited
 Level India Limited was actualized with ABB on 5 October 1995. In 1994-95, joint endeavor ABB
Daimler-Benz Transport AG (Atrange) was established by Germany's ABB Zurich and Daimler-
Benz AG Germany.

Corporate management team

Managing Director Bazmi R. Husain

Chief financial officer AmlanDattaMajumdar

Legal and compliance Stefan Backstrom

Human resources Raja Radhakrishnan

Communication and investor relations Vikram V Kanth

Company secretary B Gururaj

Power systems N Venu

Power products PitamberShivnani

Discrete automation and motion R Narayanan

Process automation Priteesh Mahajan

12
Low voltage products Tommy Andreasson

Countryservice manager MadhavVemuri

Countryoperations manager Tajinder Vohra

Chief technologyofficer GiandomenicoTesti

Business Development, Strategy, Subir Pal

and Marketing

Mission
The Mission of the ABB customers improve their performance improvement: energy
performance, grid reliability while saving and productivity and helps to lower the impact on the
environment. Drive innovation: innovation and quality in our products, the main features of the
system and service provider. To attract talent: attract and ABB dedicated and skilled people and
keep the staff strives to provide a work environment, a global attraction. Act responsibly:
sustainability, environmental impact and offer our market and lower business ethics in our own
are at the coreof the operation.

Vision
ABB is one of the world's leading engineering companies, the vision of our industry to increase
productivity in a sustainable manner the environmental impact of low power use will help our
customers more efficiently. Efficiency and productivity for a better world

Our businesses
ABB is a pioneer in power and mechanized advancements, improving utility and industry
customers execution and lessening ecologicaleffect. The ABB Groupof Companies works in more
than 100 nations and utilize around 145,000 individuals.

13
Power Products :
With wide scope of items and administrations, the division chiefly gives electrical utilities, just as
gas and water utilities and modern and business shoppers to encourage control age, transmission
and dispersion. can control and oversee electrical systems.

Power Systems :
Breakdown offers answers for the power esteem chain. Counting answers for transmission
advances, for example, control age, HVDC and FACTS, conveyance innovations for
correspondence and system the board. The special Turnkey venture go incorporates structure,
framework designing, supplies, establishment, task and testing. We join items from our own
PowerProducts Division and outer providers, including an incentive through space ability,
building, venture the executives and life cycle bolster administrations
Our culture
Good leaders are characterized by competence, ambition and integrity We work with our clients,
our representatives and our responsibilities to the networks and social orders we run, and we work
with the voice corporate qualities.

Business principles
Duty, respect and assurance are imperative for ABB to fabricate esteem, execution and
initiative. Our innovation initiative, our spearheading soul and our capacity to remain in our
home - dependable and acting with poise and assurance can give the possibility to raising the
customary capacities of ABB. That is our inheritance and our future.
The way to progress is that everybody comprehends and applies the business standards -
showing individual, proficient and hierarchical duty, appearing for others' conclusions and needs
and applying our triumphant goals.

Responsibility, respect, determination

Through a progression of workshops, ABB representatives have comprehended business standards
of obligation, respect and assurance.

14
Responsibility
• Taking obligation: Take our expert advancement and ABB procedure truly
• Attach to the Code: Legal risk and consistence to rehearse best in all nations
• Professional Work: Responsibility and 'Strolling Talk'
• Distributing Our Promises: Let's do the ethical duty we can do

Respect
• Celebrating contrasts: opening up to different societies and taking a gander at all
ABB representatives similarly
• Discussion, challenge and hearing: backing and challenge others while staying receptive outlooks
• Integrity: Honestyand genuineness are appeared. Regarding others byregarding others

• Personal Honor to Employees and the Environment

Determination
• Provide champ winning outcomes for all accomplices. Our clients are imaginative,
successful for our association and accomplishing ourselves
• Continuity: Course and adhering to it, with great time and terrible
• Performance Results: Want to win for ABB and our own best execution
• Commitment: taking choices and indicating clear initiative

Sustainability:
For ABB, maintainability adjusts financial achievement, biological system and social advancement
to profit the majority of our accomplices. Incorporates securitycontemplations. Furthermore, the
securityofour workers, temporaryworkers and others influenced by our exercises.

Sustainability Priorities
Environment : Policy and performance, covering sites, products and suppliers. We pass this
aptitude to buyers and providers to lessen the ecological effect of our innovations and items, while
endeavoring to guarantee that our generation forms are earth agreeable and vitality productive. In
our own tasks, ABB encourages the way toward transporting merchandise, decreasing the
utilization of products and materials, lessening the effect of business travel, dispensing with unsafe

15
materials, and improving structure ecologically proficient and recyclable items and providers. Can
be accomplished by sharing a decent propensity.

For instance, water driven shading frameworks created in an industrial facility were presented
in comparative areas around the globe to decrease the discharges of natural solvents.
Improvement of execution likewise incorporates the plan period of new items and procedures.
Configuration engineers get preparing and hardware to complete Life Cycle Assessments to
assess the adequacy of an item situation for the duration of the existence cycle. Four hundred
maintainable specialists, the greater part of whom are in our industrial facilities, execute
gathering and national destinations at around 360 locales and workplaces around the ABB
around the world.
They guarantee that all generation offices are liable to worldwide norms of ISO 14001 and
OHSAS 18001 for the administration of natural and wellbeing and dangers. Shutting
collaboration with outside maintainable associations and colleges will likewise build up
powerful projects for ABB to help its improvement activities

ABB INDIA LTD COMPETATORS

 BHEL

16
 Thermax

 NBCC

17
 Power mech

 BEML

 Rellance infra

18
 Punj Lloyd

Corporate Responsibility: Policies and performance covering human rights, community

engagement and the supply chain.

The organization has numerous arrangements and criteria to join approaches, for example business
strategy and administration, set of accepted rules, and gathering social and human right strategies,
in view ofthose qualities. These are bolstered by inner gathering rules and guidelines.

We likewise have a solid spotlight on creating proficiency and effectiveness for compelling
administration and the board of OHS, improving benchmarks for hazard control, and checking our
offices and activities. At mass dimension we have attempted to extend the scope ofour Leadership
Training Program, giving learning and aptitudes expected to powerful close to home OHS
authority. It additionally empowers dynamic nearby enhancements over our organizations.

One impact of powerful OHS administration is the expanding number of business-drove OHS
programs. These activities bloom the improvement of criteria and convey particular preparing as
per the particular prerequisites and exercises of various specialty units (buns).

In 2011, existing OHS programs, for example, the BU Substations '"Energizing Safety" and BU
Transformers' center and high-voltage exchanges and administration exchanges activities, were
reinforced and extended. Extra projects have been created in the Process Automation segment.

To help and fabricate the abilities of supporting systems that help our organizations, we bolster
our Executive Valuation Assessment Process and OHS Training Programs Eminent

19
achievements were accomplished and programs were executed ABB Worldwide 2011:

20
US distinctions
For instance of the learning and experience on our system, Darrell C was the pioneer of Vice
President of Health and Health, North America and the American Society of Safety Engineers
amid his century year. Fiddle is likewise unfit to help ABB, yet in addition impairs the capacity
to share aptitudes and experience inside a more extensive network.

In the US, there were no wounds that could be recorded in a similar business wellbeing and
wellbeing organization (OSHH) in the fifth sequential year in typical voltage and high voltage
administrations. This is an excellent accomplishment, taking into account that all administrations
are held in the field conditions.
Beforethe finishof2011, around 850 chiefs in everyone ofthe eight zones, practicallythe majority
of the Country Management groups were prepared to manage emergency workshops and
activities.

ABB fortified its contribution with security organizations with a worldwide program propelled
in 2011 to guarantee that every single such organization meet the ABB and International
Standards. The program's work proceeds in 2012.

New mass-level security rules are being made dependent on security and human rights volunteer
standards, which will be concluded in 2012.

SWOT ANALYSIS

Strengths
• A huge set up client base with long haul contracts
• High brand esteem helped in cross deals and resulting deals openings
• ABB has assets everywhere throughout the world and geologically spreads well
• A critical piece of its income originates from rising developing markets requesting foundation
• Production worldwide is outstanding for top notchitems

Weaknesses
• . Management has broad stream history for procurement and cooperative energyon past

21
 issues
• Inthe back of liquidity shortage, edge won't improve for the time being
• . Terrible advances and money related issues for purchasers have expanded the obligation
commitments influencing benefits.

Opportunities
• Government activities at framework space increment the general interest for the power
business
• It is monetarily solid with expansive income, which obtains buys, repurchases andbenefits.

• Requirements for Smart Grids Increase interest for anyproducer, provider or work of keen
matrix framework

• . Extra guideline builds the interest for organizations in the environment business

Threats
• The most exceedingly awful point of view of the economy influences the stream
of income and economy
• Governments are experiencing tension to cut costs, substitution deals may back off and in
general deals can be perilous

Department of company
● Purchase

● Accounts
● Sales
● marketing

● Stores
● Quality checking and control
● Service engineering

Purchase

Purchasing is the process a business or organization uses to acquire goods or services to

22
accomplish its goals. Although there are several organizations that attempt to set standards in the
purchasing process, processes can vary greatly between organizations.

Details of purchase:
Purchasing managers/directors, and procurement managers/directors guide the organization’s
acquisition procedures and standards. Most organizations use a three-way check as the foundation of
their purchasing programs [citation needed]. This involves three departments in the organization
completing separate parts of the acquisition process. The three departments do not all report to the
same senior manager, to prevent unethical practices and lend credibility to the process. These
departments can be purchasing, receiving and accounts payable; or engineering, purchasing and
accounts payable; or a plant manager, purchasing and accounts payable.
Purchasing Department and accounts payable are usually two of the three departments involved the
purchasing department issues the purchase order receipt not required. When an invoice arrives against
the order, the accounts payable department will then go directly to the requestor of the purchase
order to verify that the goods or services were received.

History of purchasing
Historically, the purchasing department issued purchase for supplies, services, equipment, and raw
materials. Then, in an effort to decrease the administrative costs associated with the repetitive
ordering of basic consumable items, "blanket" or "master" agreements were put into place. These
types of agreements typically have a longer duration and increased scope to maximize the quantities
of scale concept. When addition supplies were required, a simple release would be issued to the
supplier to provide the goods or services.
Another method of decreasing administrative costs associated with repetitive contracts for common
material, is the use of company credit cards, also known as "Purchasing Cards" or simply "P-Cards". P-
card programs vary, but all of them have internal checks and audits to ensure appropriate use.
Purchasing managers realized once contracts for the low dollar value consumables are in place,
procurement can take a smaller role in the operation and use of the contracts. There is still oversight
in the forms of audits and monthly statement reviews, but most of their time is now available to
negotiate major purchases and setting up of other long term contracts. These contracts are typically
renewable annually.

23
Purchasing departments were now smaller. There was no need for the army of clerks processing
orders for individual parts as in the past. Another change was the focus on negotiating contracts and
procurement of large capital equipment. Both of these functions permitted purchasing departments to
make the biggest financial contribution to the organization.
In accounting, purchases is the amount of goods a company bought throughout this year. It also
refers to information as to the kind, quality, quantity, and cost of goods bought that should be
maintained.
They are added to inventory. Purchases are offset by purchase discounts and Purchase Returns and
Allowances. When it should be added depends on the Free On Board (FOB) policy of the trade. For
the purchaser, this new inventory is added on shipment if the policy was FOB shipping point, and the
seller remove this item from its inventory.

Stores
A Store Manager is a professional who is responsible for overseeing the daily operations of their store,
making sure it runs smoothly and effectively. Their duties include motivating sales teams with great
customer service as well as developing business strategies that will help them achieve success in a
competitive marketplace.

Responsibilities

● Develop business strategies to raise our customers’ pool, expand store traffic and optimize
profitability.
● Meet sales goals by training, motivating, mentoring and providing feedback to sales staff.
● Ensure high levels of customers satisfaction through excellent service.
● Complete store administration and ensure compliance with policies and procedures.
● Maintain outstanding store condition and visual merchandising standards.
● Report on buying trends, customer needs, profits etc.
● Propose innovative ideas to increase market share.
● Conduct personnel performance appraisals to assess training needs and build career paths.

● Deal with all issues that arise from staff or customers (complaints, grievances etc).
● Be a shining example of well behavior and high performance.

● Additional store manager duties as needed.

24
Requirements and skills
● Proven successful experience as a retail Store Manager.
● Powerful leading skills and business orientation.

● Customer management skills.

● Strong organizational skills.
● Good communication and interpersonal skills.
● BS degree in Business Administration or relevant field

Quality check and control

Quality control (QC) is a process through which a business seeks to ensure that product quality is
maintained or improved. Quality control requires the company to create an environment in which
both management and employees strive for perfection. This is done by training personnel, creating
benchmarks for product quality, and testing products to check for statistically significant variations.
A significant aspect of quality control is the establishment of well-defined controls. These controls
help standardize both production and reactions to quality issues. Limiting room for error by
specifying which production activities are to be completed by which personnel reduces the chance
that employees will be involved in tasks for which they do not have adequate training.

Key takeaway
● Quality control (QC) is a process through which a business seeks to ensure that product
quality is maintained or improved.

● Quality control involves testing units and determining if they are within the specifications for
the final product.
● The quality control used in a business is highly dependent on the product or industry, and
several techniques exist for measuring quality.
● The food industry uses quality control methods to ensure customers do not get sick from their
products.
● Quality control creates safe measures that can be implemented to make suredeficient
or damaged products do not end up with customers.

25
Understanding Quality Control
Quality control involves testing units and determining if they are within the specifications for the final
product. The purpose of the testing is to determine any needs for corrective actions in the
manufacturing process. Good quality control helps companies meet consumer demands for better
products.
Quality testing involves each step of the manufacturing process. Employees often begin with the
testing of raw materials, pull samples from along the manufacturing line, and test the finished
product. Testing at the various stages of manufacturing helps identify where a production problem
is occurring and the remedial steps it requires to prevent it in the future.
The quality control used in a business is highly dependent on the product or industry. In food and
drug manufacturing, quality control includes ensuring the product does not make a consumer sick, so
the company performs chemical and microbiological testing of samples from the production line.
Because the appearance of prepared food affects consumer perception, the manufacturers may prepare
the product according to its package directions for visual inspection.
The quality control used in a business is highly dependent on the product or industry. In food and
drug manufacturing, quality control includes ensuring the product does not make a consumer sick, so
the company performs chemical and microbiological testing of samples from the production line.
Because the appearance of prepared food affects consumer perception, the manufacturers may prepare
the product according to its package directions for visual inspection.

Sales

Sales is the process of selling goods and services. It involves convincing potential customers to buy
from your company. The convincing can be through various means such as explaining your product's
benefits, offering discounts or making your product more attractive than that of your competitors.
Some common sales generation methods include making cold calls, holding one-on-one meeting with
business leads, participating in trade fairs and promotional events and cross selling (selling another
product to an existing customer).
Sales is the starting point of a contract between a business and its customers. A company often
looks to retain its customer-base by nurturing a positive relationship with its customers.

26
Sales goals:
● Increase monthly revenue
● Close sales
● Retain existing customers

● Increase profit margin

● Lower customer acquisition cost.

Sales process:
● Prospecting: Create a list of target customers and perform preliminary research on them.

● Connecting: Connect with your prospects, often through cold emails or phone calls.
● Qualifying: Qualify your leads based on their response, need and readiness to buy a product.

● Approaching: Schedule an appointment and meet the qualified leads.

● Product demonstration: Showcase the product and explain its featuresand benefits.
● Objection handling: Listen to your prospects' objections, understand their perspective and
address their concern.
● Closing a sale: Negotiate the price, create a proposal and close a deal.
● On boarding: Deliver the product and help the customers get started with it.
● Following up: Support customers with after-sales service, retain them and turn them into
repeat buyers.
Sales strategy examples;
● Cold calling: Call up a pool of prospects and pitch your products.

● Door-to-door sales: Sales executives reach out to customers with the product and close deals
on the spot.
● Discount sales: Companies offer a discount on a certain range of products for a limited period.
● Discount coupon: Companies issue discount coupons to certain sections ofcustomers, for
instance, those holding a credit card of a certain bank.
● Trade fairs: Companies exhibit and sell their products in trade fairs.
● Cross-selling: Companies pitch other products to their existing customers.
For example, a bank may sell credit cards to its savings account customers.

27
Marketing

Marketing is the process of making people interested in your product through various strategies
like pricing, packaging, positioning (creating a perception), placement and promotion. Marketing
efforts of a company may or may not focus on generating direct sales leads, but they definitely
intend to make sales easier and increase revenues over a longer period of time.
For example, marketing teams often work on intangible strategies like creating a brand image and
improving public relations. Having a good brand image may not generate direct sales leads, but it
definitely influences customers to make a purchase decision in favour of the company's products.
Thus, marketing mainly focuses on analyzing customers' needs, interests and behaviour in order
to make products more appealing to them.

Marketing goals:
● Research customer needs and interests
● Build a brand

● Improve product awareness

● Increase customer satisfaction
● Maintain customer relationships

● Establish the company as a leader in its industry

● Generate qualified leads
● Launch a new product
● Reposition a brand or a product

Marketing process:
● Research: Study the market and your potential customers.
● Segment: Divide your customers into different segments based on their characteristics.
● Strategy: Build a marketing strategy for each segment you want to target.

● Position: Define the distinguishing features of your product and highlight them in your
marketing campaigns.
● Campaign: Create and run marketing campaigns.

28
 ● Performance: Measure the performance of your marketing campaigns.
● Fine-tune: Modify and fine-tune your marketing campaigns based on their performance.

Marketing strategy examples:

● Product-focused marketing: Companies highlight various aspects of their product, such as
quality, size and packaging.

● Price-focused marketing: Companies make buying attractive by various pricing strategies,

such as low pricing, price matching (offering to beat competitors' price) and premiumpricing
(as a symbol of highquality).
● Status marketing: Companies position their product as a status symbol and reserve the right to
decide who they sell it to. For example, a high-end car manufacturer may choose to sell itself
car only to a select group of high net worth individuals and influential people, giving them a
sense of exclusiveness.
● Online marketing: Companies market their product through search engines, emails and social
media platforms.

29
 CHAPTER 3

RESEARCH DESIGN

30
Title of the Study:
“A study on Inventory control at ABB India Limited”

Statement of the problem

Stock is an antagonistic effect, and every association needs to work for an assortment of
purposes. The best stock administration is the objective of each stock organizer. Because of the
effect of the business under stock or stock over and the business well being and viability of both
business
Most firms store crude materials, consumables and pressing materials and contain crude
materials for stockrooms appended to generation offices that are circulated to the item on JIT. The
purposes behind holding the rundowns can change dependent on the case.

NEED FOR STUDY

ABB's internship program guidelines and a variety of power and automation technologies are
designed to provide practical exposure. Students in the engineering business unit it Center in the
continental-wide research outfits and work on innovative ideas or businesses with researchcenter.

Objectives to study inventory management

Here are the essential goals of the investigation of stock administration
1. To contemplate stock administration dependent on proportions
2. Secure stock impact on position capital.
3.To think about stock administration and its viable power over different techniques.

Indicate ventures to improve stock dimensions.

SCOPE OF THE STUDY

The extent ofrunning a significant use of hypothesis for realusage. Since the investigation centers
around distinguishing the present capability of organization stock techniques and targets, we
perceive the best stock philosophyto improve the organization's arrangement to decide their stock.
This examination gives understanding into high esteem materials and low-esteem materials. This
examination gives a thought of industrial fixation and is proposed for overseeing stock.

31
Research Methodology:
The exploration technique is a precise answer for the examination issue. Speculation Analysis is
gone for research reason at ABB India Limited. For stock examination, we will decide the
accompanying discoveries:
 Raw Material Inventory.
 Process Inventory Jobs
 Complete Goods Inventory.

METHODS OF DATACOLLECTION
In the stock examination of ABB India Limited, we gather information from different sources. We
gather essential and auxiliary information.

Secondary Data
Optional information as of now exists for a particular reason. We utilize auxiliary information
about stock to take a gander at the organization's old records. Day by day data about materials is
appeared day by day narrative archives, different documentaries utilized for the buy register and
research.In stock investigation, the auxiliary information gave isn't sufficient to us to gather the
essential information.

Primary Data
Essential information or crisp information We get from the examination targets recipe with the
assistance of the essential information. Essential information is exact, feasible, solid and
valuable information
 The organization utilized stock controlprocedures.
 Stock Levels.
 Company site.

LIMITATIONS OF THE STUDY

It requires greater investment and needs more expenses. This examination requires more
opportunity to do.
 The examination depends on auxiliary information as it were.

32
 Stock quality examination isn't tantamount.
 Analysis depends on people who are just in interior reports.
 Analysis dependent on four years' report from the Finance Department, which has its
very own farthest point.
 Working Environment does not enable a lot to be gathered.
 For the present investigation, two systems are utilized for stock examination because
of time limitations

33
 CHAPTER 4

ANALYSIS AND INTERPRETATION

34
 TURN OVER RATIOS

INVENTORY TURNOVER:

Inventory Turnover Ratio = Cost of goods sold / Average Inventory

Table 4.1 showing data for the inventory turnover 2018-2021

Period Net Sales Average Inventory Turnover Ratio

2018 3918558196 506460567 7.73

2019 5958016404 746837818 7.97

2020 10833256904 1432524560 7.56

2021 13177230047 1775802189 7.42

35
Graph 4.1 showing for the inventory turnover ratio.

7.97

7.9
7.8 7.73
7.7
7.6 7.56
7.5
7.4 7.42
7.3
7.2
7.1

2018201920202021

INTERPRETATION:
The above table shows that the Inventory Turnover Ratio. It was small changes B/W year to
year 7.73 in the year 2018, 7.97 in the year 2019, 7056 in the year 2020& 7.42 in the year 2021.
So It sales was increased in value but not increase in overall Ratio.

36
Raw material Turnover Ratio:

Raw material Turnover Ratio = Raw material consumed / Average Raw material

Table 4.2 showing data for the raw materials form 2018-2021

Period Raw material Average Raw Turn over

consumed material Ratio

2018 2232086848 145788351 15.31

3937812454 226333146 17.39

2019

2020 7794794675 466270075 16.71

2021 8453055263 475934324 17.76

37
 Graph 4.2 showing for the raw materials turnover ratio

18

17.5

17

16.5

16
17.76
17.39
15.5
16.71
15
15.31
14.5

14
2018 2019 2020 2021

INTERPRETATION:
The above table shows that the Raw material Turnover Ratio. It was 15.31 items in 2018, 17.39
items in 2019, 16.71 in 2020. In the year 2021, The Ratio was more than the norm on that sales
also increased.

38
Work- In-Process Turnover Ratio :

Work In Process Turnover Ratio = Cost of production / Average work in process

Table 4.3 showing data for the work in process turnover ratio from 2018-2021

Average work in
Period Cost of production Turn over ratio
process

2018 2803302510 177728384 15.77

2019 4780617871 253103985 18.89

2020 9236956058 478121242 19.32

2021 9928113854 581208251 17.08

39
 Graph 4.3 showing for the work in process turnover ratio

25

20 18.89 19.32
17.08
15.77
15

10

2018 2019 2020 2021

INTERPRETATION :
The above table shows that the Work-in-progress Turnover Ratio. It was 15.77 in the year
2018,

18.89 in the year 2019, 19.32 in the year 2020& 17.08 items in the year 2021. The Work-in-
progress in the year 2021

40
Finished Goods Turnover Ratio:

Cost of Goods Sold

Finished Goods Turn Over Ratio = ---------------------------------
Average Finished Goods

Table 4.4 showing data for Finished Goods Turnover Ratio :

Average Finished
Period Cost of Goods sold Turnover Ratio
Goods

2018 3918558196 84493680 46.37

5958016404 120859398 49.29

2019

2020 10833256904 277797726 38.99

2021 13177230047 389043563 33.87

41
Graph 4.4 showing for the finished goods turnover ratio:

60

49.29
50 46.37

38.99
40
33.87

30

20

10

2018 2019 2020 2021

INTERPRETATION:
The above table shows that the Finished Goods Turnover Ratio. It was 46.37 in the year 2018,

49.29 in the year 2019, 38.99 in the year 2020 & 33.87 in the year 2021 . It indicates
the Finished Goods is decrease year to year . From 2020 to 2021.

42
Comparison of Turnover Ratio:

Table 4.5 showing data comparison of turnover ratios from 2018-2021

Turnover ratio 2018 2019 2020 2021

Raw materials 15.31 17.39 16.71 17.76

Work in process 15.77 18.89 19.32 17.08

Finished goods 46.37 49.29 38.99 33.87

7.73 7.97 7.56 7.42

Inventory

43
Graph 4.5 showing for comparison of turnover ratio 2018-2021

49.29
50 46.37
45
40 38.99
33.87
35

30
25
20 19.32
17.3198.89 17.76
15.3115.77 16.71 17.08
15
10
7.73 7.97 7.56 7.42

2018 2019 2020 2021

RAW MATERIALS WORK IN PROGRESS FINISHED GOODS INVENTORY

44
HOLDING DS PERIODS

Inventory Holding Period :

No of days in a year
Inventory holding period= ____ _ _ _ _ _

Inventory turnover ratio

Table 4.6 showing data for the inventory holding period from 2015-2018

Inventory Holding
Period No of Days turnover Period

2018 365 7.73 47

2019 365 7.97 46

2020 365 7.56 48

365 7.42 49
2021

45
 Graph 4.6 showing for the inventory holding period
2021

365
2020

365
Holding Period
365 Inventory turnover
d 2018 2019

365
Perio

No of Days

0 1020304050

INTERPRETATION:
The above table shows that the Inventory Holding period. It was 47 in the year 2018, 46 in the year
2019, 48 in the year 2020& 49 in the year 2021. The holding period is low in the year 2019. It was
benefit to thecompany.

46
Raw Materials Holding Period :

No. of Days
Raw Materials Holding Period = ---------------------------------------
Raw Material Turnover Ratio

Table 4.7 showing data for the raw material holding period for 2018-2021

Period No of Days Raw Material Holding Period

Turnover Ratio

2018 365 15.31 24

2019 365 17039 21

2020 365 16.71 22

2021 365 17.76 21

47
Graph 4.7 showing for the raw material holding period

24.5
24
24
23.5
23
22.5
22
21.5 22
21
20.5
20 21 21

19.5
2018 2019 2020 2021

INTERPRETATION:
The above table shows that the Raw material Holding period. It was 24 days in 2018, 21
days in2019, 22 days in 2020& 21 days in 2021. So in the year 2019& 2021 Raw material
Holding period is low, it was beneficial to the company.

48
 Work In Process Holding Period :

No of days in a year
Raw materials holding period =

Work in process turnover ratio

Table 4.8 showing data for the work in process holding period from 2018-2021

Period No of Days Work in Process Holding Period

Turnover Ratio

365 15.77 23
2018

2019 365 18.89 19

2020 365 19.32 18

2021 365 17.08 21

49
 Graph 4.8 showing for the work in process holding period

25 23
21
20 19
18

15

10

2018 2019 2020 2021

INTERPRETATION:
The above table shows that the Work-in-progress Holding period. It was 23 days in 2018, 19 days
in 2019, 18 days in 2020& 21 days in 2021. So the Holding period is very less in the year 2020,
18 days it was benefit to thecompany.

50
Finished Goods Holding Period :

No of days in a year
Finished goods holding period =

Finished goods Turnover Ratio

Table 4. 9 showing data for the finished goods holding period form 2018 -2021

Period No. of days Finished Goods Holding Period

Turnover Ratio

365 46.37 8
2018

2019 365 49.29 7

2020 365 38.99 9

2021 365 33.87 11

51
 Graph 4.9 showing data for the finished goods holding period

12 11

10

2018 2019 2020 2021

INTERPRETATION:
The above table shows that the Finished goods Holding period. It was 8 days in the year 2018,
7 days in the year 2019, 9 days in the year 2020& 11 days in the year 2021. So the year 2018,
holding period is low & turnover is high so company again maintains that level that is benefit to
the company.

52
 Comparison of Inventory Holding Period:

Table 4.10 showing comparison data for the inventory holding period from 2018-2021

Inventory 2018 2019 2020 2021

Raw Materials 24 21 22 21

Work In Process 23 19 18 21

Finished Goods 08 -07 09 11

Inventory 47 46 48 49

53
Graph 4.10 showing for all the inventory holding periods

60

48 49
50 47 46

40
RAW MATERIALS

30 WORKIN PROCESS
24 23
21 22 21 21 FINISHED GOODS
19 18
20 INVENTORY

11
10

2018 2019 2020 2021

INTERPRETATION:

The above table shows that the Finished goods Holding period. It was 8 days in the year 2018, 7
days in the year 2019, 9 days in the year 2020& 11 days in the year 2021. So the year 2018, holding
period is low & turnover is high so company again maintains that level that is benefit to the
company.

54
 ABC CLASSIFICATION

ABC Analysis for 2018

Table 4.11 showing data for the ABC analysis for 2018

% OF
CLASS VALUE CUMMULATIVE% ITEMS
VALUE

A 16803152 54 54 102

B 8785515 29 83 151

5276050 17 100 327

C

30864717

55
Graph 4.11 showing data for abc analysis for 2018

120

100

80

60

40

20

INTERPRETATION:
In the year 2018 there are 102 items which constitutes their value of 54% in the total value
which comes under “A” category.151 items which constitutes 29% in the total value which
comes under “B” category and 327 items which constitutes 17% in the total value which comes
under “C” category.

56
ABC Analysis for 2019

Table 4.12 showing Data ABC analysis for 2019

Class Value % Of value Cumulative % Items

A 67963606 90 90 90

B 6330760 8 98 124

C 1538254 2 100 385

75832620

57
Graph 4.12 showing ABC analysis for 2019

102
100
98
96
94
92
90
88
86
84

INTERPRETATION:

In the year 2019 there are 69 items which constitutes their value of 90% in the total value which
comes under “A” category.124 items which constitutes 8% in the total value which comes under
“B” category and 385 items which constitutes 2% in the total value which comes under “C”
category.

58
Table 4.13 showing data for ABC Analysis for 2020

Class Value % of value Cumulative % Items

A 73880742 91 91 92

B 6858300 8 99 176

C 862667 1 100 310

59
Graph 4.13 showing for the abc analysis for the 2020

102

100

98

96

94

92

90

88

86

INTERPRETATION:
In the year 2020 there are 92 items which constitutes their value of 91% in the total value which
comes under “A” category. 176 items which constitutes 8% in the total value which comes
under “C” category.

60
ABC Analysis for 2021

Table 4.14 showing data for the abc analysis for 2021

Class Value % of value Cumulative % Items

A 375515268 96 96 10

B 12049495 3 99 36

C 3935710 1 100 532

391500473

61
Graph 4.14 showing for the abc analaysis for 2021

101
100
99
98
97
96
95
94

INTERPRETATION:
In the year 2021there are 10 items which constitutes their value of 96% in the total value which
comes under “A” category. 36 items which constitutes 3% in the total value which comes under
“B” category and 532 items which constitutes 1% in the total value which comes under “C”
category.

62
 CHAPTER 5

FINDINGS, SUGGESTIONS AND CONCLUSION

63
Findings:

• Inventory turnover ratio increased by 7.73 times in 2015, decrease in 2017, decrease in sales
in 2019, but decrease in turnover.
• Raw Material Turnover Ratio is 15.31 times in 2015, 17.39 times in 2016, 16.76 in 2017,
17.76 in 2018. This ratio was high in the year 2017 and sales increased during that year.
• In 2015 the processing turnover ratio was 15.77 times in 2015, 18.89 in 2016, 19.32 times in
2018 and 17.08 times in 2018. This ratio decreased in comparison to the previous year in 2018.
• The finished goods turnover ratio is 46.37 times in 2015, 49.29 times in 2016, 38.99 times in
2018 and 33.87 times in 2018. The ratio decreased but the sales of the company increased.

• Inventory Holding Period is a transition period of 47 days, 46 days, 48 days and 49 days from
2015 to 2018, with variations from year to year. The conversion period is low, so it indicates
that the payments of the supplier are faster.

• A, B & C analysis under ABC Analysis shows two methods based on the percentage of total
items and the 'A' items are low but the value of the consumption is high.
• The 'B' and 'C' class items of 2015 will increase by 2018, where the value is higher.
• Finally a 'class' factor decreases as compared to 2015.
• Collecting orders is not subject to the requirement of the received commands, an important
part of the inventory takes place as it moves.
• When taking customer orders, the company does not follow the correct policy order.

64
SUGGESTIONS

The inventory turnover ratio indicates whether inventory investment is the right limit or not.
Quickly measures inventory sales. It is necessary to maintain a turnover ratio greater than
the lower ratio. A good ratio indicates a good inventory system and reflects effective
business activities.
 The company must improve its inventory holdings over all years impacting the
company's sales.

 According to EOQ, the company must comply with the financial size of the company
for adjustable purchases on a regular order on its EOQ basis. This will reduce the
profitability.

 Evaluation of 70% of A-Items to concentrate on these values under ABC Analysis.

 The Company should try to "get the right work to the right place at the right time"

 Company must place inventory items according to risk and opportunity.

 The company must distinguish between affected items and critical items (higher risk,
greater allowance).

65
CONCLUSION

The company will reduce the order cost by following the correct inventory management
technique. Just-in-time (JIT) means that it intends to reduce costs, continuous improvement
philosophy, quality improvement, performance improvement, delivery improvement, flexibility
enhancement, increase innovation, adding and removing activities (or waste).

JIT is not about automation. It eliminates garbage, but helps maintain inventory by
providing an environment that can process and simplify the processes. A collection of techniques
used to improve operations. May be a new manufacturing system used to produce goods and
services. When successful implementation of JIT principles, significant competitive benefits are
achieved, JIT principles can be applied to all parts of the organization: action, purchase, operations,
distribution, sales, accounting, design etc.

JIT generally identifies seven major types of elimination: waiting / waste time waste, transport
waste, inventory waste, processing waste, motion waste, waste of products, waste of products

66
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