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PS1

INVENTORY MANAGEMENT
Nishant Khandelwal 2017B3A11434H
 Inventory management is the supervision of non-capitalized
INTRODUCTI assets (inventory) and stock items. A component of supply
chain management, inventory management supervises the flow
ON of goods from manufacturers to warehouses and from these
facilities to point of sale.
 To ensure continuous supply of materials spares and finished
goods so that production should not suffer at any time and the
customer’s demand should also be met.
 To avoid both overstocking and under-stocking of inventory.
Objectives  To maintain investment in inventories at the optimum level as
required by the operational and sales activities.
 To eliminate duplication in ordering or replenishing stocks. This is
possible with the help of centralizing purchases.
 Hedge against uncertain demand
Benefits of  Hedge against uncertain supply
Holding  Economize on ordering costs

Inventory  Smoothing
 Inventory costs are all costs associated with ordering, holding
Inventory and managing the inventory or stock of an operation or business.
These inventory costs include Ordering costs, holding costs, and
Costs shortage costs.
 This cost covers the risk that items might fall in value over the
Inventory Risk period they are stored or that they become
obsolescent. Risks first include shrinkage, which basically is the
Cost loss of products between the recorded inventory and the actual
inventory.
• ABC Analysis
• Economic Ordering Quantity (EOQ)
• Order Point Problem
• Two Bin Technique
Inventory • VED Classification
Control • HML Classification
• SDE Classification
• FSN Classification
• Order Cycling System
• Just In Time (JIT)
General Ultratech

Forms of  Raw materials  Insurance


Inventory  Work in process  Specified
 Finished goods  Maximum/Minimum
 Stores & Spares  Essentials
 All the capital goods and purchases related to the same are
Rajshree accounted under CAPX account.

Cement  Inventory value declined from 100cr IN 2012 to 60cr IN 2017


 Use of SAP(Ultratech Cement) for running various business
processes.
 Each Item in Inventory of Ultratech cements is being specified a
Codification unique 12 digit code.
 Document generated by a user department or storeroom-
personnel to notify the purchasing department of items it needs
PR to order, their quantity, and the timeframe. It may also contain the
authorization to proceed with the purchase.
 Flags were introduced for the procurement of PRs
G Flags  There are about 10 flags from G1 to G10 each categorizing
inventory so it is easier for a PR to pass.
 This flag is put upon a code when it have multiple duplicate entry
for the same item in the database.
G04 Flag  This mark shows duplicate code made for the corresponding item
and ceases the other codes to make item code unique.
 To identify duplicates and use G04 flag through a dataset of
16,000 entries.
 To identify the entries of item which shows close resemblance or
Project have nearly the same material description.
 Use of the G04 flag on the findings after verifying with the sir
throughout the dataset provided.
Plan for the  Sir will be allotting a new project in few days and we will be
working on the same in the following month.
next month
 An insight of how bigger inventories like Ultratech cements which
is spread across India is being maintained.
Learning  Importance of Inventory Management and various procedures
followed for the supervision of inventory.
Experience
 A new concept of Common Inventory which is adopted by
Ultratech recently.
Thank YOU