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Shakti Industries Existing Inventory Control Practices
Shakti Industries Existing Inventory Control Practices
Shakti Industries Existing Inventory Control Practices
Group 6- Section B
The company employs 30 people in its operation and runs 3 shifts a day. The arc furnace has a capacity of handling 1000 kg metal at a time and the company runs 4 lots of 1000 kg each. The turnover of the company is Rs18 cr. per annum.
Additional material
Catalyst
The company uses different type of catalyst to fasten the process. This is done by bringing down the melting point. Some of the materials used by company for this purpose are :
Lime
SPAR FeMn : Ferro Manganese : Act as a deoxidizer.
Acidic R mass
TATA R mass
Additional material
There are some additional material used by company such as: Bricks K3 Bricks K1 Bricks STR
Tiles
O2 LPG.
Inventory Management
Company keeps an inventory of approximately 35 items. The company uses Q model or continuous inventory system.
The company maintains an inventory record. At the end of the day, the inventory is physically counted and this data is fed into computerized inventory management sheet. This sheet automatically calculates the left over stock which gives an idea when to reorder the particular material. The company orders a fixed amount of a given item every time it places an order. The time of order depends upon the nature of the material, its consumption, transportation cost and volatility of price of the raw material.
Shakti Industries
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Material Lime SPAR FeMn FeSi(chips) FeSi(Lumps) Silicon Mn Fe Cr Powder Gr. Scrap Metcoke Fe. AlScarp Silicate Bentonite Gr. Elect. Acc R. Mass Acidic R. Mass TATA R. Mass Whytheat 'A' Whytheat 'K' Silica Board 20 mm Silica Board 25 mm Bricks K3 Bricks K1 Bricks STR Tiles O2 L.P.G Temp. Tips 100 pcs Reorder Point 2000 kg 200 kg 80 kg 80 kg 80 kg 80 kg 80 kg 100 kg 100 kg 50 kg 50 kg 50 kg 30 pcs Na Na 4000 kg 650 kg 650 kg 520 pcs 520 pcs 150 pcs 150 pcs 50 pcs 50 pcs
Process
Using Crane, Pick the raw materials Weigh the raw materials Put a Mixture of 1000kg of raw Materials in Arc Furnace
Put the molten metal alloy into casing to shape it in form of ingot
Data Analysis
The furnace runs each day for 24 hrs. and works 6 days a week( 1 day for maintenance).
Finished Product
The final product, i.e. ingots is stored in the operating shed itself. For the finished goods inventory, company uses make to stock model. Not much quality measures are taken care of while formation of the ingot because the company is melting the leftovers of other industries, whose composition is known beforehand. After the ingots have been made, the company sends a sample of the product to the laboratory for spectro-chemical analysis. Company then sends a quotation of the price with the results of the spectrochemical analysis, accordingly the clients whose requirements are nearest to the composition of the ingot accept the quotation.
MIS
The Factory, on a daily basis, sends a report to the Corporate office , which is located in the city. This report includes the amount of raw material consumed, the amount of raw material received, the amount of output generated, the amount of electricity used.
melting process.
This is done by passing the thick smoke through water, which in turn dissolves the harmful gases. Thus , the smoke becomes less harmful for the environment which is then released.
Suggested Improvements
1. Inventory storage 2. Workers Safety 3. Limited capacity
Inventory storage
The entire inventory is stored under an open shed which has no safety precautions. The raw material is prone to spoilage during rains. Hence they should build proper inventory
Workers Safety
The working area is not properly laid out. While loading materials in the furnace by crane, if anything falls on the workers, there are no proper safety measures. Hence, the company should install safety measures to avoid any mishap. While adding charge to the arc furnace, the workers are prone
Limited capacity
The Company is operating at its full capacity. Thus, if there is any emergency order, Company cant