Inventory management consists of

maintaining for a given financial

investment an adequate of something in
order to meet and accepted pattern of
demand.
Inventory considers control over costs
of inventory on one hand and handle
the size of inventory on other hand.

Controlling investments in inventories

constitute crucial part in current assets.
An efficient inventory controlling
system will decide,
What to purchase , when to purchase , what
price.
Required quantity of availability of raw materials
Minimize the investments in inventories
Maintain reasonable stock levels not
excess or not under stocks.
Inventory can be referred to as sum
of the value of raw materials fuels
and lubricants, spare parts,
maintenance consumables, semi
processed materials and finished
goods, stock at any given point of
time.

In large companies inventory place a

most significant part of the current
assets. The business has about 15 to
30% of inventories in total assets.

Inventory is composed of assets that

will be sold in feature in the normal
course of business operations. The
assets which firms stores as inventory
is anticipation of need are raw
materials, work in progress and
finished goods.
 The Indian auto industry is one of the largest in the world.
The industry accounts for 7.1 per cent of the country's
Gross Domestic Product (GDP). The Two Wheelers
segment with 81 per cent market share is the leader of the
Indian Automobile market owing to a growing middle
class and a young population. Moreover, the growing
interest of the companies in exploring the rural markets
further aided the growth of the sector. The overall
Passenger Vehicle (PV) segment has 13 per cent market
share.
India is also a prominent auto exporter and has strong
export growth expectations for the near future. In April-
March 2016, overall automobile exports grew by 1.91 per
cent. PV, Commercial Vehicles (CV), and Two Wheelers
(2W) registered a growth of 5.24 per cent, 16.97 per cent,
and 0.97 per cent respectively in April-March 2016 over
April- March 2015.* In addition, several initiatives by the
Government of India and the major automobile players in
the Indian market are expected to make India a leader in
the 2W and Four Wheeler (4W) market in the world by
2020.
Market Size
The sales of PVs, CVs and 2Ws grew by 9.17 per cent,
3.03 per cent and 8.29 per cent respectively, during the
period April-January 2017.
Investments
In order to keep up with growing demand, several auto
makers have started investing heavily in various segments
of the industry during the last few months. The industry has
attracted Foreign Direct Investment (FDI).
 Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is
the world's largest manufacturer of two - wheelers, based
in India.
In 2001, the company achieved the coveted position of being
the largest two-wheeler manufacturing company in India and
also, the 'World No.1' two-wheeler company in terms of unit
volume sales in a calendar year. Hero MotoCorp Ltd. continues
to maintain this position till date.
Vision
The story of Hero Honda began with a simple vision - the
vision of a mobile company's new identity, reflects its
commitment towards providing world class mobility solutions
with renewed focus on expanding company's footprint in the
global arena.
Mission
Hero MotoCorp‟s mission is to become a global enterprise
fulfilling its customers' needs and aspirations for mobility,
setting benchmarks in technology, styling and quality so
that it converts its customers into its brand advocates.
Strategy
Hero MotoCorp‟s key strategies are to build a robust
product portfolio across categories, explore growth
opportunities globally, continuously improve its operational
efficiency, aggressively expand its reach to customers,
continue to invest in brand building activities and ensure
customer and shareholder delight.
 NAME OF THTE HERO MOTOR
COMPANY CORP
YEAR OF 19th January 1984,
ESTABLISHMENT 34 years ago
CHAIRMAN PAWAN MUNJAL
TYPE OF BUSINESS PRIVATE
INDUSTRY Automobiles
founder Dr.Brij
mohan lal
(chairman)
Operating income 4,885(US$680
million)
NET INCOME 43,546(US$490
million)
TOTAL ASSETS 5,308(US$740
million)
OPERATIONS :
Hero MotoCorp has five manufacturing
facilities based at Dharuhera, Gurgaon ,
Neemrana , Haridwar and Halol under
Green Field stage. These plants together
have a production capacity of 76 lakh+ 2-
wheelers per year. Hero MotoCorp has a
sales and service network with over 6,000
dealerships and service points across
India. It has a customer loyalty program
since 2000, called the Hero Honda
Passport Program which is now known as
Hero GoodLife Program.

It is reported that Hero MotoCorp has five

joint ventures or associate companies,
Munjal Showa, AG Industries, Sunbeam
Auto, Rockman Industries and Satyam
Auto Components, that supply a majority
of its components.
The company has a stated aim of achieving
revenues of ₹64,000 crore (US$8.9 billion)
and volumes of 10 lakh two-wheelers by
2016–17. This in conjunction with new
countries where they can now market their
two-wheelers following the disengagement
from Honda. Hero MotoCorp hopes to
achieve 10 per cent of their revenues from
international markets, and they expected to
launch sales in Nigeria by end-2011 or
early-2012.
The scope of study is limited to collecting the financial data
published in the annual reports of the company with reference to
the objectives stated above and an analysis of the data with a view
to suggest favorable solutions to the various problems related to
Inventory Control Management.

This particular topic is selected to the Inventory Control

Management is recent years. The study is conducted to
evaluate the performance of the company with reference to
inventory control management. The project is aimed at studying
by means of developing effective „Inventory Control
Management‟
To discuss pattern, levels and trends of inventories in Hero Moto
Corp Ltd.

To understand the various inventory control techniques

followed by studies in Hero Moto Corp Ltd.

To access the performance of inventory management of the

Hero Moto Corp Ltd by selected accounting ratios.

To know the inventory control techniques of Hero Moto

Corp Ltd.
Every industry on average spends 70% on raw
materials (inventory). Therefore there is a need to
know the raw material cost and also there is great
importance to understand the inventory
management system of this industry.

The study helps a log to various departments to

take steps to control the inventory process
Inventory is the stock of goods a company uses as raw materials for the
process of production. So there is no doubt in the fact that purchasing
inventory - the raw materials - is pretty much a certainty for the business
to operate. There are two basic schools of thought governing inventory
purchase. You can purchase a high amount, fewer times over a year,
avail the economies of scale and then store it in your warehouse.
The disadvantage here is that the company will face warehousing costs,
risks of spoilage and wastage and the risk of a fall in projected demand
and therefore a loss. Alternatively, you can buy fewer amounts; reduce
the risk of loss but which means that you have to make your trip to the
market more often. The inventory turnover is the financial management
tool which helps the finance manager establishes the way things stand
presently and if there needs to be a change in the way the company is
going about with its policy.
The study is based on both primary and
secondary data.
The primary data has been collected through
structured questionnaire reflecting inventory
management practices of Hero Motor Corp Ltd. The
collected data is tabulated and suitable interpretation
had been made by considering the data collection
through secondary data like annual reports
purchase registers, storage records of the
organization.
The study is limited only for a period of 5 years i.e., from
2012 – 13 to 2016 – 17.

The study in the organization is 45 days only.

The limitations of ratio analysis can be applicable of the

study.

There may be approximation in calculating ratios and taking the

figures from the annual reports.

This report is not helpful in investing in Hero Moto corp

either through disinvestments or capital market.

The accounting procedure and other accounting principles are

limited by the company changes in them may vary the actual and
budget performance.
Though the production is higher is the year 2009-2010 and the sales were very high i.e., as per
inventory conversion period it took 63.57 days. This shows that there is demand for Automobile and
the funds unnecessarily tied up. So, proper demand forecasting should be done and according to that it
may be manufactured.

The investment on raw material should be made as per the requirement. Unnecessary investment
may block up the funds.

Neither too high nor too low inventory turnover ratios may reduce profit and liquidity position of the
industry. So, proper balance should be made to increase profits and to ensure liquidity.

The raw material should be acquired from the right source at right quality and at right cost.

The process that was being used by Hero Motocorp Ltd with the purchasing department should undergo
changes, so that, it seeks enhance the celerity of the delivery of a product without compromising its
quality by improving the utilization of materials, labour and equipment.

To reduce the work, the purchasing department may enter the purchasing order into database and did not
send a copy to any one. When the merchandise arrived, the receiving clerk would enter the database and
determine whether the order agreed with the electronic purchase order.
Today business scenario inventory management is becoming very crucial part of the organization. The
system of inventory management in Hero Motocorp limited very effective. The organization is basically and
assembling unit and thus inventory place a most significant role in the decision making process. From the
various calculations and figures relating to inventory management it is clear that the inventory
classification of A items are maintain for days, as a result it reduce investment in raw material, reducing the
lead time and also the large quantity discount because the stock are kept for days.

In the classification of ABC items procedure is following in Hero Motocorp Ltd has launched the different type
of card system for class C items.

Class A & B items are consider under the just in time philosophy as the procurement time has
been reduced up to greater extent by the proper co-ordination of buyer and supplier.

There is great improvement in the inventory turnover ratio from 5 years. It is increased from 1257 to 21.57
% this position indicates that the stocks are fast moving and get converted into sales quickly in Hero
Motocorp Ltd,

Finally we conclude that Hero Motocorp Ltd the inventory system is very good with high
techniques.