Inventory management-Indian Institute of Management; Bangalore.

Abstract

The main objective of the management is to get the product out of the factory at the right time as per the requirements of the customer and with the least cost and minimum investment in inventory. The cost of inventory is totally "non value producing" and is a direct charge on the profits of the company. As a material intensive industry the company's primary concern is to cut down the investment in inventory. VEL Hyderabad manufactures various types of Electric Transformers at their three units. Unit 1 - Distribution Transformers. Unit 2 - Power , Medium Distribution, CRT and Single Phase Transformers. Unit 3 - Amorphous Metal Transformers, Single Phase and distribution. Each type of transformers are further sub divided into various varieties based on the voltage class and customer specified ratings. Thus there are a large number of varieties of transformers to be handled at any given point of time. Unit 2, which is the major part of the organisation and it has a lot of product mix. For this reason, we have chosen Unit 2 for our project. On evaluation of the data we have identified that poor utilization of inventories is the major problem in Unit 2. Hence the objective of the study is to find out the causes for poor utilization of inventory and thereby establishing a foolproof system for better utilization of inventories. The methodology adopted for this project is to analyse the inventories (Age wise, Category wise, Product wise), lead times (Manufacturing, BOM, Procurement), Planning Schedules and Material department functioning or limitations. Finally concerned people are interviewed, wherever the data is not available.