A STUDY ON INVENTORY CONTROL AT ABB LTD

Submitted in partial fulfillment of the requirement of Bachelor

of Commerce.

By

Ms. Mahalakshmi K
(Reg no. U03AD21C0009)

Under the guidance of

Prof. Siddesh

AIMS Institutes Peenya

Bangalore

2023-2024

1
 CERTIFICATE OF THE COLLEGE

This is to certify that the dissertation titled “A STUDY ON INVENTORY CONTROL AT

ABB LTD” is based on an original study conducted by Mahalakshmi K (U03AD21C009)
VI semester BACHELOR OF COMMERCE, under the guidance of Prof. Siddesh.

This project report has not formed the basis for the award of any degree/diploma by
Bangalore University or institution.

Prabhakar Dr. Kiran Reddy

Program Director Principal

2
 CERTIFICATE OF THE GUIDE

This is to certify that the report titled “A STUDY ON INVENTORY CONTROL AT ABB
LTD” is an original work of Ms. Mahalakshmi K; bearing Bangalore University register
number; U03AD21C009 and is being submitted in partial fulfillment for the award of the
Bachelor’s degree of commerce of Bangalore University. The report has not been submitted
earlier either to this university or any institution for the fulfillment of the requirement of a
course of study. Mr. Mahalakshmi K is guided by. Prof. Siddesh, who is the faculty guide as
per the regulations of Bangalore University.

Signature of faculty guide Signature of Principal

Prof. Siddesh ACHARYA INSTITUTE OF
MANAGEMENT & SCIENCE
(Dr. MEKA KIRAN REDDY)

3
 DECLARATION

Certified that this dissertation titled “A STUDY ON INVENTORY CONTROL AT M/S

Venkatesh & Raghavendra” is based on an original study conducted by Ms. Mahalakshmi K
under my guidance. He has attended the required guidance sessions held. This project report has
not formed a basis for the award of any Degree/Diploma of any university or institution.

4
 ACKNOWLEDGEMENT

I would like to express my special thanks & gratitude to my teacher Prof. Siddesh as well as our
Principal Dr. Kiran Reddy who gave me the golden opportunity to do this project on the topic
“A STUDY ON INVENTORY CONTROL”, which helped me do a lot of research on the topic
and learn a lot along the way.

Secondly, I would also like to thank my parents and friends who helped me a lot in finalizing
this project within the limited time frame.

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 TABLE OF CONTENTS
CHAPTER CONTENTS PAGE
NO. NO.

EXECUTIVE SUMMARY 1

1. INTRODUCTION 1

1.1 ESSENTIALS OF INVENTORY CONTROL 2

1.2 OBJECTIVES OF INVENTORY CONTROL 4

1.3 PURCHASE AND STORES 8-9

1.4 INVENTORY CONTROL IMPORTANCE 9-11

1.5 TYPICAL WAYS TO CONTROL INVENTORY 11-13

INDUSTRY PROFILE 13
2

2.1 COMPANY PROFILE 14

2.2 CORPORATE MANAGEMENT TEAM 16

2.3 MISSION, VISION 17-18

2.4 OUR BUSINESS 18-21

2.5 ABB INDIA LTD COMPETATORS 21-22

23-24
2.6 SWOT ANALSIS

2.7 DEPARMENT OF COMPANY 25-30

2.8 INFRASTRUCTURE FACILITIES 31

3. RESEARCH DESIGN 31

3.1 STATEMENT OF THE PROBLEM 31

 3.2 NEED FOR THE STUDY 32

3.3 OBJECTIVES 32

3.4 SCOPE OF THE STUDY 32

3.5 RESEARCH METHODOLOGY 33

3.6 HYPOTHESES 33

3.7 LIMITATIONS 33-34

4. ANALYSIS ANDINTERPRETATION 34-60

5. FINDINGS,CONCLUSION AND SUGGESTIONS 60-63

BIBLIOGRAPHY 64-65
 CHAPTER 1:

INTRODUCTION

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1.0 INTRODUCTION
The management and control of inventory is a problem common to all organizations
in any sector of the economy. The problems of inventory do not confine themselves to
profitmaking business firms. The same types of problems are encountered by social and
non-profit organizations too. Inventories are common to besides industries – agriculture,
wholesalers, retailers, hospitals, temples churches, prisons, zoos, universities and national,
state and local governments.

Inventory problems have been encountered by every society, but it not until the 20th century
that analytical techniques were developed to study them. The initial impetus for analysis
expectedly came from the manufacturing sector. It was not until after World War II that a
concerted effort on risk and uncertainty aspects of inventory was made. In theory
.<inventory is an area of organizational operation that is well developed.In practice, it is very
backward. This gap will narrow as educational institutions integrated materials management
into their course structures.

The term inventory had been defined by several authors. The more popular of them are: ‘the
term inventory includes materials – raw, in process, finished packaging
,spares and others stocked in order to meetan unexpected demand or distribution in the
future’.

Another definition of inventory is that it ‘can be used to refer to the stockon hand at a
particular time of raw materials, goods-in-process of manufacture, finished products,
merchandise purchased for resale, andthe like, tangible assets which can be seen, measured
and counted. In connection with financial statements and accounting records, the reference
may be to the amount assigned to the stock of goods owned by an enterprise at a particular
time.

A term inventory refers to the stock file of the products a firm is offering for sale and the
components that make up the product. In other words, inventory is composed of assets that
will be showed in future in the normal course of the business operations. The assets which
firms stores inventory in anticipation of need are:

Raw materials Work in process (Semi Finished goods) Finished goods

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inventory control

inventory control also called stock control, is the process of managing a company’s
inventory levels, whether that be in their own warehouse or spread over other locations. It
comprises management of items from the time you have them in stock to their final
destination (ideally to customers) or disposal (not ideal). An inventory control system also
monitors their movement, usage, and storage.

Inventory control means managing your inventory levels to ensure that you are keeping
theoptimal amount of each product. Proper inventory control can keep track of your
purchase orders and keep a functional supply chain. Systems can be put in place to help
with forecasting and allow you to set reorder points, too. Inventory control can include:

1.1 ESSENTIALS OF INVENTORY CONTROL

The important requirements of inventory control are:

 A firm needs inventory control system to effectively manage itsinventory.

 Proper classification of materials with codes, material standardizationand

simplification.

 The operation of a system of internal check to ensure that all transactions

involving material and equipment are checked byproperly authorized and
independent persons.

 The operation of a system of perpetual inventory so that it is possibleto determine at

any time, the amount and value of each kind o material in stock.

 A suitable method of valuation of materials is essential because it affects the cost of

jobs and the value of closing stock of materials.

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1.2 Objectives of Inventory Control

The main objectives of inventory control are:

1. To maintain a large size of inventory for efficient and smooth

production and sales operation.

2. To maintain a minimum investment in inventories to maximize

profitability.

3. To ensure a continuous supply of raw materials to facilities

uninterrupted production.

4. To maintain sufficient stocks of raw materials in periods of short supply

andanticipate price change.

5. Maintain sufficient finished goods inventory for smooth sales

operationand efficient customer services.

6. Minimize the carrying cost and time.

7. Control investment in inventories and keep it at an optimum level

Advantages of Inventory Control

The following are suggested advantages:

1. Eliminates wastages in use of material.

2. It reduces the risk of loss form fraud and theft.

3. It helps in keeping perpetual inventory and other records to facilitate

thepreparation of accurate material reports management.

4. To reduce the capital tied up in inventories.

5. It reduces cost of storage.

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Disadvantages of Inventory Control

Every firm has to maintain optimal level of inventories. It not the following will be theResult in
form of losses.

1. Opportunity cost :
Every firm has to maintain inventory for that some investment is needed it is known as
opportunity cost and handle the investment in inventory are more the funds are blocks
up with inventory.

2. Excessive inventories:
It will lead to firm losses due to excessive carrying costs the risk of liquidity. It is also
referred as danger level.

3. Inadequate Inventory:
It is another danger which results is production help-up and failure tomeet delivery
commitments. In adequate raw materials and work - in
– process inventors will results in frequent production interruptions. Itfinished goods are
not sufficient customers may shifts to competitors.

4. Danger due to physical decoration:

It is one of the reasons with the inventories due to maintaining stocksat high levels they
will be deteriorated due to passage of time, sometimes due to mishandling or improper
storage facilities.

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

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.

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Cost of Storage

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

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 therefore both real cost and opportunity cost associated with the funds invested 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)

Cost of Ordering

The cost of ordering includes the cost of acquisition if 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).

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 is stores but there is a demand for that item either for the customers or the
production department. The stock out refers to zero level inventories. So there is a cost of
stock out in the

6
Sense that the firm faces 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 spine 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 cost)

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 isthat 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 it also credited to
manufacturing or trading accounts. The inventories are valued on the basis as follows:

I) Cost of raw materials in stock may include freight charges and carrying cost.
Butsuch cost should not exceed market price.

II) 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 degrees of completion.

III) Cost of finished goods wound normally to the 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 maybe valued at work in progress may be valued at work cost,
marginal
cost, prime cost or , even at direct materials

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1.3 Purchase & stores procedure

In inventory management the purchase department store department plays a majorrole to

be the effective inventory there must be cooperation of various departmentssuch as
purchase receiving and inspection stores production and stock control departments.

The main functions of each department are as follows:

Purchase Department

It is responsible for purchase of all necessary goods of proper quality to produces, without
interruption to supply the finished goods.

1) It receives purchase requisitions.

2) Invites quotations or tenders from suppliers with desired quality.

3) Issue purchase orders to the selected supplier.

4) Certify the quality and quantity of order received in specified time

5) Approve purchase invoice for payment after checking invoice for

payingafter checking prices and extensions if any needed.

Stores keeping Department

a) Check and accept all materials form the received department.

b) Identity each material received with the stock list, check the code
numberand place in the respective bins.

c) Issue materials and supplies for use upon presentation of authorized

requirement.

d) Record quantities received and issued on bin lards or stock ledger cards
consisting the perpetual inventory records.

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Production Department

Make out materials requirement note i.e. requisition of requisite quantity and quality of
materials at the right moment so the all materials may be available without delay on
production.

1) Check and verify that the materials of requisite quantity and quality have
beenreceived and charged to production.

2) Keep proper records or materials received and their progress through

differentoperations or progress.

3) Prepare materials return note for excess materials.

4) Prepare materials transfer note to cover any transfer of materials.

5) Prepare report on scrap for reporting to management.

Inventory Control Department

In may be a subdivision of the cost accounting department, although in many concerns, it is

a part of the stores keeping department.

A) It keeps perpetual inventory records.

B) Adjust the stock on receipt of the property authorized adjustment notes.

C) Prepare weekly or monthly, statement of receipts, issue, balance and

averageconsumption of materials both in terms of quantity and value

1.4 Inventory Control important

 Quality control
 Organizational control
 Accounting accuracy

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 Quality control
Having an inventory management system allows you to implement greater quality control. If
you can track and manage all aspects of your stock, you better control quality. The longer
you hold inventory, the more likely it is to get damaged. You can avoid that by ensuring that
stock gets rotated through your warehouse.

Inventory control techniques also allow you to track the quality of stock you receive from
suppliers. How often do you have certain products returned? How often are those that are
returned sent back because they break or have other defects? Seeing how products move
through your inventory can point to any problems, and help you eliminate write-offs

 Organizational control
Inventory control means that you have organizational control in your business. A well-
organized stockroom lets you manage your merchandise and make the most of your
investment in physical inventory. This aspect of inventory control is vital for knowing
where your stock is and the expediency with which you can access it.

Inventory control in terms of the organization of your stock is vital for the proper running
of your company. It will ensure that you have enough units to fulfill orders and have
safety stock. Effective inventory control techniques will also help you avoid having any
dead stockor overstock. Safety stock acts as abuffer to reduce the risk of an item being out
of stock. Dead stock is inventory that doesn’t sell. Which explains in a nutshell why
inventory control is required

 Accounting accuracy
Keeping an accurate record of your inventory is vital for managing your assets. It will also
help you in the event of an audit. Knowing what you have in assets allows you to know
youroverall spoilage and understand the value of your company.

10
Financial accounting rules and tax regulations may mandate your company to have a
physical inventory account. All stock should have correct numbers and pricing in your
inventory systems and your accounting software. This will ensure your company can go
through audits without any question to your business’s accounting integrity

1.5 Typical Ways to Control Inventory

You should be able to use your system to track inventory levels, create orders and send out
stock. Some basic systems for tracking inventory include:

1. Manual:
Whether via a ledger or a stock book, manually logging inventory with a pen and paper
is the simplest way to track what comes in and goes out. Small businesses with few
items can get away with using this type of system. This system can be challenging
because it is an actual record that you cannot mine and use for planning purposes.

2. Stock Cards:
A slightly more complex method uses stock cards, also called bin cards. A stock card is
a table that records the running unit price, sale price and inventory count of each
product. Use individual cards for each product in large warehouses or stock rooms. The
system also tracks purchases, sales, returns and other reasons to withdraw stock, such as
promotional withdrawals. You can include additional notes on the stock card, such as
any problems associated with that item.

3. Simple Spreadsheets:
Many companies, especially small businesses, use spreadsheets to track inventory.
Whether they use Microsoft Excel or something similar, spreadsheets are a way to start
automating and electronically capturing product data. With consistent updating and basic
coding, you can ensure that

11
 you have available current stock levels and statistics. Businesses quickly customize
these systems to meet their needs. Since everyone who builds a spreadsheet does so
slightly differently, users will need intimate knowledge of how the sheet works. This
method is also thought of as manual because the only way to automatically update the
spreadsheet system is by adding high-level macros or coding that connects them with
other systems.

4. Basic Inventory Software:

Simple inventory software is usually low cost and targeted to small and medium-sized
businesses. This simple automation is often cloud-based and ties into your point of sale
software, so it can generate real-time, automatic stock updates. You can also
incorporate analytics and reporting and run cost comparisons, create reorders, identify
best and worst-selling products and drill down to order details or customer patterns.
Some simple inventory management software systems can scale to more complex
functionality as your business grows

Inventory Control Methods

Inventory control methods are the ways you use your business’s strengths and relationships,
your expertise, formulas and forecasts to determine how much supply you keep, sell, store
and order. Effective inventory control balances controlling costs and meeting customer
demands.

A company’s days of inventory outstanding (DIO) measures how many days a company
holds stock before selling it. The DIO is an efficiency measure because product stock ties up
funds. The lower the DIO the better, especially fora small business. DIO scores have
increased in the past five years by 8.3%, meaning that companies have poorer inventory
control practices. Additionally, there is a need to increase warehouse space, which means…

12
The Correlation Between DIO and Warehouse Space

CHAPTER 2:

INDUSTRY PROFILE

13
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
Inventory Management, the examination chose forthe 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
purposeof offer from the Warehouse and from these offices.

2.0 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 feel the trigger for hardware, control and
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 thebusiness 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

14
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.

2.1 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:

2.1.1 The organization was joined into The

Hindustan Electric Company Limited on24.12.1949.

2.1.2 On 24.09.1965, the organization's name

was changed to Hindustan Brown Bowry Limited (HBB).

15
 2.1.3 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 January1, 1989.

2.1.4 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.

2.2 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

16
 Process automation Priteesh Mahajan

Low voltage products Tommy Andreasson

Countryservice manager MadhavVemuri

Countryoperations manager Tajinder Vohra

Chief technologyofficer GiandomenicoTesti

Business Development, Strategy, and Subir Pal

Marketing

2.3 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 core ofthe operation

17
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. Efficiencyand productivity for a better world

2.4 Our businesses

ABB is a pioneer in power and mechanized advancements, improving utility and industry
customers execution and lessening ecological effect. The ABB GroupofCompanies works in
more than 100 nations and utilize around 145,000 individuals.

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
Power Products 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.

18
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

ofobligation, respect and assurance.

Responsibility

• Taking obligation: Take our expert advancement and ABB proceduretruly

• Attachto the Code: Legalrisk 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: Honesty and genuineness are appeared. Regarding others by regarding others

19
• 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 security contemplations. Furthermore, the security

four workers, temporary workersand 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 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

20
 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

2.5 ABB INDIA LTD COMPETATORS

 Bhel

 Thermax

 NBCC

 Power mech

 BEML

 Rel Ind infra

 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 of those 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 scopeof our
Leadership Training Program, giving learning and aptitudes expected to powerful close to home
OHS authority. It additionallyempowers dynamic nearbyenhancements over our organizations.

21
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 specialtyunits (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 achievements were accomplished and programs were executed ABB Worldwide 2011:

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 finish of2011, around 850 chiefs in everyone of the 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.

22
2.6 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 notch items

Weaknesses

• . Management has broad streamhistory for procurement and cooperative

energy onpast issues

• In the back of liquidityshortage, edge won't improve for the time being

• . Terrible advances and moneyrelated 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 and benefits.

• Requirements for Smart Grids Increase interest for any producer, provider or
work ofkeen matrix framework

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

23
 Threats

 1. The most exceedingly awful point of view of the economy influences the stream of
income and economy

 2. Governments are experiencing tension to cut costs, substitution deals may back off
and in general deals can be perilous

2.7 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
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.

24
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.

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

25
 ● Develop business strategies to raise our customers’ pool, expand store traffic and
optimize profitability.
● Meet sales goals bytraining, 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.

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 theydo 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.

26
 ● 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 sure deficient
or damaged products do not end up with customers.

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 identifywhere 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, qualitycontrol 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.

27
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 buya product.
● Approaching: Schedule an appointment and meet the qualified leads.
● Product demonstration: Showcase the product and explain its features and 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.
● Onboarding: 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 of customers,
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.

28
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: Studythe 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.
● 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.

29
● Price-focused marketing: Companies make buying attractive by various pricing strategies,
such as low pricing, price matching (offering to beat competitors' price) and premium
pricing (as a symbol of high quality).
● 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.

CHAPTER 3:

RESEARCH AND DESIG

30
Title of the Study:

“A studyon Inventory control at ABB India Limited”

3.1 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.

3.2 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 research
center.

3.3 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.

4. Indicate ventures to improve stock dimensions.

31
3.4 SCOPE OF THE STUDY

The extent of running a significant use of hypothesis for real usage. Since the investigation
centers around distinguishing the present capability of organization stock techniques and targets,
we perceive the best stock philosophy to 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.

3.5 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 DATA COLLECTION

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
32
information.

33
 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 control procedures.

 Stock Levels.

 Company site.

Reference Peirod :

The reference time frame I took for this examination is 5 years ie from 2017 to 2021. I
allude to the organization's fiscal summaryand different sources, for example, organization
diaries and site and monetary related magazines.

3.7 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.

 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
veryown 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

34
 Current investigation symbolism and goals are not material to different gatherings in
ABB India Limited

CHAPTER 4

ANALYSIS AND INTERPRETATION

35
TURN OVER RATIOS

INVENTORY TURNOVER:

Table 4.1 showing data for the inventory turnover 2018-2021

Inventory Turnover Ratio = Cost of goods sold / Average Inventory

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

36
Graph 4.1 showing for the inventory turnover ratio.

Turnover Ratio
7.97

7.9
7.8 7.73
7.7
7.56
7.6
7.5 7.42
7.4
7.3
7.2
7.1
2018 2019 2020 2021

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.

37
Raw material Turnover Ratio:

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

Raw material Average Raw Turn over

Period
consumed material Ratio

2018 2232086848 145788351 15.31

2019 3937812454 226333146 17.39

2020 7794794675 466270075 16.71

2021 8453055263 475934324 17.76

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

38
 Graph 4.2 showing for the raw materials turnover ratio

18

17.5 turn over ratio

17

16.5

16
17.76
17.39
15.5
16.71
15

14.5 15.31

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.

39
Work- In-Process Turnover Ratio :

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

work in process turnover ratio = Cost of production / Average work in process

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

40
 Graph 4.3 showing for the work in process turnover ratio

Work in
25 Process

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

41
Table 4.4 showing data for Finished Goods Turnover Ratio :

Cost of Goods Sold

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

Average Finished Goods

Average Finished
Period Cost of Goods sold Turnover Ratio
Goods

2018 3918558196 84493680 46.37

2019 5958016404 120859398 49.29

2020 10833256904 277797726 38.99

2021 13177230047 389043563 33.87

42
 Graph 4.4 showing for the finishid goods turnover ratio.

turn over 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.

43
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

Inventory 7.73 7.97 7.56 7.42

44
Graph 4.5 showing for comparison of turnover ratio 2018-2021

49.29
50 46.37
45
38.99
40
33.87
35

30
25
19.32
20 17.3198.8 16.71 17.76
17.08
15.3115.77 9
15
10 7.73 7.97 7.56 7.42

2018 2019 2020 2021

RAW MATERIALS INVENTORY

HOLDING DS PERIODS

Inventory Holding Period :

No of days in a year

Inventory holding period =

Inventory turnover ratio

45
Table 4.6 showing data for the inventory holding period from 2015-2018

Inventory Holding
Period No of Days
Period
Turnover Ratio

2018 365 7.73 47

2019 365 7.97 46

2020 365 7.56 48

2021 365 7.42 49

46
 Graph 4.6 showing for the inventory holding period

Inventory
49.5 49
49
48.5 48
48
47.5 47
47
46.5
46
46
45.5
45
44.5
2018 2019 2020 2021

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 the company.

47
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

Raw Material
Period No of Days Holding Period
Turnover
Ratio

2018 365 15.31 24

2019 365 17039 21

2020 365 16.71 22

2021 365 17.76 21

48
Graph 4.7 showing for the raw material holding period

RAW
24.5
24
MATERIALS
24
23.5
23
22.5
22
22
21.5
21 21
21
20.5
20
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.

49
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

Work in
Period No of Days Holding Period
Process
Turnover Ratio

2018 365 15.77 23

2019 365 18.89 19

2020 365 19.32 18

2021 365 17.08 21

50
 Graph 4.8 showing for the work in process holding period

work in
25 23 process
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 the company.

51
Finished Goods Holding Period :

No ofdays 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

Finished Goods
Period No. of days Holding Period
Turnover Ratio

2018 365 46.37 8

2019 365 49.29 7

2020 365 38.99 9

2021 365 33.87 11

52
 Graph 4.9 showing data for the finished goods holding period

Finished Goods
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.

53
 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

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

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

C 5276050 17 100 327

30864717

Graph 4.11 showing data for abc analysis for 2018

Cummulative%
120

100

80

60

40

20

55
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.

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

56
Graph 4.12 showing ABC analysis for 2019

Cummulative %
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.

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

57
Graph 4.13 showing for the abc analysis for the 2020

cummulative %
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.

58
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

Graph 4.14 showing for the abc analaysis for 2021

Cmmulative %
101
100
99
98
97
96
95
94

59
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.

60
 CHAPTER 5

FINDING, CONCLUSION AND SUGGESTIONS

61
Findings:

• Inventory turnover ratio increased by 7.73 times in 2015, decrease in 2017 in 2017 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.

As an order of collecting orders is not subject to the requirement of the received

commands, an important part of the inventorytakes place as it moves.

• When ordering customer orders, the company does not follow the correct policy order.

62
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 tryto "get the right time 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, critical items (higher risk, greater
allowance).

63
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, inventorywaste, processing waste, motion waste, waste of products, waste of products

64
BIBLIOGRAPHY

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