1.

1 INTRODUCTION
Inventories are goods held for eventual sale by a firm. It is one of the major
elements of working capital. The cost of stocks is a sensitive area in the management
of working capital. Inventory requires large capital investment. If inventory is not
properly managed, it may affect the production, marketing and finance departments.
Ultimately this may affect the existence and growth of the business. If a firm carries
too much inventory, it will run out of cash. Its capital will be unnecessarily tied up in
excess inventory. This is so because inventory is illiquid. It brings no return. In the
same time, if a firm carries too little inventory, it may result in stock outs. The firm
may lose sales. So every organization must have a clear cut policy for controlling the
stocks failing which the profits of the firm would erode. The management of
inventories becomes a pivotal issue in cost minimization and profit maximization.
Inventories include raw materials, stores and spares, semi finished goods, finished
goods and other inventory. Spares form an important class of inventories by
themselves. The use of spare parts differs from industry to industry. Industries like
transport, fertilizers, mining and other processing plants are highly spares incentives.
The management of spare parts inventory is crucial in any organization. Spare parts
management plays a vital role in achieving the desired plant availability at an optimum
cost. Thus the MCL must analyze the inventory management of spare parts to ensure
the effectiveness of spare parts. Spare parts management is essential in every stage of
cement production.

1.2 ABOUT THE TOPIC

1.2.1MEANING OF INVENTORIES
The term inventory simply refers to stock. Inventories are the stocks of the
product a company is manufacturing for sale and the components that make up the
product. These are the assets that will be sold off in future in the normal course of
business operation.
1.2.2FORMS OF INVENTORY
 Raw materials – Basic inputs that are converted in to finished product through
the manufacturing process.

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  In-process inventory – It includes semi-finished materials and work-in-process.
It needs some more work before they become finished goods for sale.
 Finished goods – Completely manufactured products ready for sale.
 Indirect inventory – It includes spare parts, component parts and tools.

Though the company would enjoy the benefits like avoiding stock out situation,
reducing ordering cost and achieving efficient production runs by holding inventories, it
is also exposed to the risks like price decline in raw materials, product deterioration,
ordering cost and carrying cost. Because of these factors that the management of
inventories becomes pivotal issue in cost minimization and profit maximization.

1.2.3 MEANING OF INVENTORY MANAGEMENT

Inventory management simply refers to management of inventory. Inventory
management may be defined as the overall way a company manages its inventory and
uses its control system to manage the benefits of carrying inventory against the cost.
Although the finance department does not itself manage the firm’s inventory, it has a
responsibility to ensure that the inventory is being managed effectively and efficiently.

1.2.4 OBJECTIVES OF INVENTORY MANAGEMENT

Every firm is required to manage the inventories in such a way as to get the best
return out of it. It must weigh the benefits of holding inventory against its costs. Then
only the firm can maintain optimum inventory. This is the basic objective of inventory
management. The objectives of inventory management may be summarized as follows:
 To ensure that the adequate inventories are available for smooth operation
 To minimize investment of funds in the inventories
 To minimize the costs of ordering and carrying inventories
 To maximize wealth of the shareholders.
 To avoid cash crisis
 To avoid both over-stocking and under-stocking of inventories
 To minimize losses on account of obsolescence, pilferage, wastage, etc.
 To ensure right quality products at reasonable prices.

The basic objective of inventory management is to determine the optimum level

of inventory, i.e. the level at which the interests of all the departments are taken care of.

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1.2.5 NEED OF INVENTORIES FOR BUSINESS UNITS

 To enjoy economies in buying – It is impossible to buy and manufacture on the

day to day basis. So firm orders beyond its immediate needs. It gives a benefit
of discount.
 To move in tune with the changing shades of market conditions – There is
uncertainty about the future. So firm has to purchase in bulk quantities of stock
for the future.
 To meet the demand during the period of replenishment – There is always a
time gap between placing order and receiving goods. So company can make the
inventories for smooth running of business.
 To carry buffer stocks to do away with danger of stock-outs – There is a danger
of stock outs so company can maintain some safety stock to eliminate the
danger.
 To stabilize the production and production process – Hardly a company has
continuous orders they are subject to the fluctuations in case of seasonable
goods but company can produce it on a uniform basis.
 To curb loss of sale – Inventories are maintained to curb the loss of sale and the
goods are available to customers when needed.

1.2.6 RAW MATERIALS

A material or substance used in the primary production or manufacturing of a good.
Raw materials are often natural resources such as oil, iron and wood. Before being used
in the manufacturing process raw materials often are altered to be used in different
processes. Raw materials are often referred to as commodities, which are bought and
sold on commodities exchanges around the world.

Raw materials are sold in what is called the factor market. This is because raw materials
are factors of production along with labor and capital. Raw materials are so important to
the production process that the success of a country's economy can be determined by
the amount of natural resources the country has within its own borders. A country that
has abundant natural resources does not need to import as many raw materials, and has
an opportunity to export the materials to other countries.

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1.2.7 NEED FOR INVENTORY MANAGEMENT - WHY DO COMPANIES
HOLD INVENTORIES?
Inventory is a necessary evil that every organization would have to maintain for
various purposes. Optimum inventory management is the goal of every inventory
planner. Over inventory or under inventory both cause financial impact and health of
the business as well as effect business opportunities.

Inventory holding is resorted to by organizations as hedge against various external and

internal factors, as precaution, as opportunity, as a need and for speculative purposes.

1.2.8 REASONS WHY ORGANIZATIONS MAINTAIN RAW MATERIAL

INVENTORY
Most of the organizations have raw material inventory warehouses attached to the
production facilities where raw materials, consumables and packing materials are stored
and issue for production on JIT basis. The reasons for holding inventories can vary
from case to case basis.
1. Meet variation in Production Demand
Production plan changes in response to the sales, estimates, orders and stocking
patterns. Accordingly the demand for raw material supply for production varies with the
product plan in terms of specific SKU as well as batch quantities.
Holding inventories at a nearby warehouse helps issue the required quantity and
item to production just in time.
2. Cater to Cyclical and Seasonal Demand
Market demand and supplies are seasonal depending upon various factors like
seasons; festivals etc and past sales data help companies to anticipate a huge surge of
demand in the market well in advance. Accordingly they stock up raw materials and
hold inventories to be able to increase production and rush supplies to the market to
meet the increased demand.
3. Economies of Scale in Procurement
Buying raw materials in larger lot and holding inventory is found to be cheaper for
the company than buying frequent small lots. In such cases one buys in bulk and holds
inventories at the plant warehouse.
4. Take advantage of Price Increase and Quantity Discounts
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 If there is a price increase expected few months down the line due to changes in
demand and supply in the national or international market, impact of taxes and budgets
etc, the company’s tend to buy raw materials in advance and hold stocks as a hedge
against increased costs.
Companies resort to buying in bulk and holding raw material inventories to take
advantage of the quantity discounts offered by the supplier. In such cases the savings on
account of the discount enjoyed would be substantially higher that of inventory carrying
cost.
5. Reduce Transit Cost and Transit Times
In case of raw materials being imported from a foreign country or from a far away
vendor within the country, one can save a lot in terms of transportation cost buy buying
in bulk and transporting as a container load or a full truck load. Part shipments can be
costlier.
In terms of transit time too, transit time for full container shipment or a full truck
load is direct and faster unlike part shipment load where the freight forwarder waits for
other loads to fill the container which can take several weeks.
There could be a lot of factors resulting in shipping delays and transportation too,
which can hamper the supply chain forcing companies to hold safety stock of raw
material inventories.
6. Long Lead and High demand items need to be held in Inventory
Often raw material supplies from vendors have long lead running into several
months. Coupled with this if the particular item is in high demand and short supply one
can expect disruption of supplies. In such cases it is safer to hold inventories and have
control.
1.2.9 FACTORS AFFECTING INVENTORY OPERATIONS
Inventory management operations are increasingly being outsourced to third
party service providers, thereby ensuring that the investments and costs in managing the
inventories are reduced. This is a welcome trend provided the company’s focus on
overseeing and reviewing both inventory management as well as inventory operations
periodically to ensure proper controls are maintained and processes followed.
Inventory management entails study of data on movement of inventory, its
demand pattern, supply cycles, sales cycles etc. Active management calls for
continuous analysis and management of inventory items to target at lean m inventory
Management.

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Inventory Management function is carried out by the inventory planners in the company
in close co ordination with procurement, supply chain logistics and finance, besides
marketing departments.
The efficiencies of inventory management are largely dependent upon the skills
and knowledge of the inventory planners, the focus and involvement of management
and the management policies coupled with the inventory management system.
However inventory operations management is not under the control of the
inventory management team but rests with the third party service providers. In this
section of the article we aim to uncover few of the critical areas and action points on the
part of operations that can impact the inventory of the company.
1. Unskilled Labor and Staff: Inventory operations management is a process-
oriented operation. Every task and action required to be carried out by the operatives
will impact the inventory as well as the delivery lead times and other parameters.
Therefore knowledge of what one is required to do and the effect of the action should
be known to the operatives who are on the shop floor. For Example: If an operative is
given a put away task, he should know how and where he should put away the pallet,
how to scan the pallet ID and confirm it back to the system. Besides he should also
know the impact of not completing any of these actions or doing some thing wrong. The
impact his action will have on the system as well as physical inventory should be clear
to the operative.
Secondly different inventory items would have to be handled differently. Operatives
who are carrying out the task should know why and what is required to be done. They
should also know the consequences of not following the process. A pallet might have to
be scanned for the pallet id and put away on a floor location, while a carton might have
to be opened and scanned for individual boxes inside and put away into a bin. The
operatives should be trained on the entire process and understand why and what he is
doing.
The WMS systems are quite operational and task intensive. Where the warehouses are
being managed on RF based systems, the operatives should be able to manage the RF
readers, understand how to access and complete transactions through the RF Guns.
Often it is noticed that when the warehouse operations are being managed by a third
party service provider and the principle customer is not present at the location, the
quality of staff and operatives is compromised and people are not given adequate

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training before being allocated their responsibility. Such situations can lead to inventory
discrepancies.
2. In adequate SOP, Training and emphasis on processes compliance: When a
inventory management project kicks off at a third party warehouse location, both the
principle customer as well as the third party service provider work on the project and
setup basic processes, document them in Standard Operating Procedures and conduct
training as a part of the project management methodology.
However over a period of time, the nature of business requirements changes,
resulting in change in the operating processes. These do not get documented in terms of
amendments and the SOPs become outdated. Thereafter one finds that the new comers
who are introduced on the shop floor are required to learn the processes by working
along with others where as no training or SOP document is provided to him for
reference. With the result they often have half-baked knowledge of the processes and
carry on tasks not knowing why they are doing and what they are required to do.
This situation is very dangerous for the health of the inventory and it shows slackness in
the attitude of the third party service provider. Continuation of such a situation will lead
to bad housekeeping, inventory mismatches, discrepancies and also affect the service
delivery. If left unchecked can lead to theft, pilferage and misuse of inventory.
In any third party owned inventory operations warehouse, the principle client should
ensure that periodic review and training is conducted for all staff. Inventory operations
should be periodically reviewed and inventory counts and audits carried out regularly.

1.4 SCOPE OF THE STUDY

This report covers the functioning of the inventory management of raw
materials of HLL Lifecare ltd, Thiruvananthapuram. This study helps to understand the
brief profile of the company including its organizational structure and its efficient
functioning of inventory management of its raw materials. This study is mainly
concentrating only on the company and not the industry. It is confined to the financial
aspect of the company. Particularly it focused on the inventory management of raw
materials of the company.
This report helps the company to take decisions regarding raw materials
management by looking up on the suggestions given by the researcher and can increase
efficiency on that part. This report can be used as a model for the other researchers

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 while conducting their research study in the field of raw materials management.
Efficient inventory management ensures reasonable utilization of equipment and labour
.and the industry would be able to build up reputation and better relationship with
customers.

 To analyze the consumption pattern of the raw materials and to control its
purchases.
 To assess the unit value of spare parts and to ensure its efficient utilization.
 To compare inventory control techniques as ABC,VED, HML, XYZ, FSN using
a compressive analysis.
 To find out ratio of production and inventory and also sales and inventory.
 To suggest few inventory control techniques to the organization.

1.5 OBJECTIVES OF THE STUDY

1.5.1 PRIMARY OBJECTIVE
The prime objective of the study is to examine how the HLL Lifecare Limited (HLL),
Thiruvananthapuram has performed in managing the raw materials inventories in this
competitive environment for the past three years.
1.5.2 SECONDARY OBJECTIVES
 To analyze the consumption pattern of the raw materials and to control its
purchases.
 To assess the unit value of spare parts and to ensure its efficient utilization.
 To compare inventory control techniques as ABC,VED, HML, XYZ, FSN using
a compressive analysis.
 To find out ratio of production and inventory and also sales and inventory.
 To suggest few inventory control techniques to the organization.
1.6 NEED FOR THE STUDY
This report covers the functioning of the inventory management of raw
materials of HLL Lifecare ltd, Thiruvananthapuram. This study helps to
understand the brief profile of the company including its organizational structure
and its efficient functioning of inventory management of its raw materials. This
study is mainly concentrating only on the company and not the industry. It is
confined to the financial aspect of the company. Particularly it focused on the
inventory management of raw materials of the company.

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1.7 LIMITATIONS OF THE STUDY
 Analysis and interpretation of the study largely depends on secondary sources of
data, which may not provide the scope to understand the current inventory
management practices of the company.
 As the consumption pattern of the raw material is irregular, the outcome of this
report cannot be directly applied for inventory control every year.
 The vital item consumed this year may not be consumed in the next year/s.
 The study is limited to 3 years of actual operating and financial performance of
the company.
 The study is confined to selective inventory items of general stores only.
 Difficulty in obtaining certain confidential information pored as a major
limitation for the study.

1.7 INDUSTRY PROFILE

1.7.1 Health Care Industry

The health care industry, or medical industry, is a sector within the economic system
that provides goods and services to treat patients with Curative, preventive,
rehabilitative, palliative, or, at times, unnecessary care. The modern health care sector
is divided into many sub-sectors, and depends on interdisciplinary teams of trained
professionals and paraprofessionals to meet health needs of individuals and populations.

The health care industry is one of the world's largest and fastest-growing
industries. Consuming over 10 percent of gross domestic product (GDP) of most
developed nations, health care can form an enormous part of a country's economy.

For purposes of finance and management, the health care industry is typically divided
into several areas. As a basic framework for defining the sector, the United
Nations International Standard Industrial Classification (ISIC) categorizes the health
care industry as generally consisting of:

1. Hospital activities;
2. Medical and dental practice activities;
3. "Other human health activities".

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This third class involves activities of, or under the supervision of, nurses, midwives,
physiotherapists, scientific or diagnostic laboratories, pathology clinics, residential
health facilities, or other allied health professions, e.g. in the field of optometry,
hydrotherapy, medical massage, yoga therapy, music therapy, occupational therapy,
speech therapy, chiropody, homeopathy, chiropractics, acupuncture, etc.

The Global Industry Classification Standard and the Industry Classification

Benchmark further distinguish the industry as two main groups:

1. Health care equipment and services; and

2. Pharmaceuticals, biotechnology and related life sciences.

Health care equipment and services comprise companies and entities that provide
medical equipment, medical supplies, and health care services, such as hospitals, home
health care providers, and nursing homes. The second industry group comprises sectors
companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific
services.

Other approaches to defining the scope of the health care industry tend to adopt a
broader definition, also including other key actions related to health, such as education
and training of health professionals, regulation and management of health services
delivery, provision of traditional and complementary medicines, and administration
of health insurance.

1.6.2 INDUSTRY CATEGORY AND PRODUCTS

 Blood Bags
 Blood Bank Equipments
 Condoms
 Contraceptive Pills
 Female Condoms
 Hydrocephalus Shunts
 Intra Uterine Devices
 Needle Destroyers
 Tissue Expanders
 Women’s Health Care Products

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1.6.3 GROWTH PROSPECTS FOR HEALTHCARE INDUSTRY

The Healthcare Industry is witnessing a sudden paradigm shift in last five year. Though
this change was inevitable and the Industry has been working towards it for a decade
now, this has been visible only in last two years.

All sectors in India are undergoing a change from unorganized to an organized structure
and so is also seen in healthcare. Till few years ago healthcare delivery was sole
responsibility of Private practitioners and Doctor owned and run hospitals. Since it was
also considered only as a social sector so almost all the large hospitals were either
Government or charitable hospitals.

A US$ 36 billion industry today and growing at 15% CAGR, the Indian healthcare
industry will be a US$ 280 billion by 2022.

FIGURE 1.6.1 GROWTH PROSPECTS FOR HEALTHCARE INDUSTRY

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1.7 COMPANY PROFILE:

HLL Lifecare Limited (HLL) commenced its journey to serve the Nation in the area of
healthcare, on 1st March 1966, with its incorporation as a corporate entity under the
Ministry of Health and Family Welfare, Government of India. HLL was set up in the
natural rubber rich state of Kerala, for the production of male contraceptive sheaths for
the National Family Welfare Programme. HLL commenced commercial operation on
5th April 1969 at Peroorkada in Thiruvananthapuram. The Plant was established in
technical collaboration with M/s Okamoto Industries Inc. Japan.

HLL has grown today into a multi-product, multi-unit organization addressing various
public health challenges facing humanity. HLL is today a Mini Ratna Company and
upgraded as a Schedule B Central Public Sector Enterprise. HLL Lifecare Limited is
the only company in the world manufacturing and marketing the widest range of
Contraceptives.

HLL’s Health care product range include : Blood Collection Bags, Surgical Sutures,
Auto Disable Syringes, Vaccines, In – Vitro Diagnostic Test Kits, Pharma products for
Women, natural products, Hydrocephalus Shunt, Tissue Expanders, Surgical and
Examination Gloves, Blood Banking equipment, Neonatal equipment, Blood
Transfusion and Intravenous sets, vending Machines, Iron and Folic Acid Tablets,
Sanitary Napkins, Oral Rehydration Salts and Medicated Plasters.

1.7.1 MANUFACTURING FACILITIES

HLL has today six state of the art manufacturing facilities. HLL commenced it
commercial operation on April 5, 1969 at Peroorkada in Thiruvananthapuram in the
state of Kerala. Together with the manufacturing facility at Peroorkada HLL today has
five state-of-the-art manufacturing facilities at : Kanagala near Belgaum (1985) – for
contraceptives and pharmaceutical products; Akkulam in Thiruvananthapuram (1994)
– for hospital products; Kakkanad in the Cochin Special Economic Zone (2004) – for
female condoms and male condoms for export: and Manesar in Gurgaon (2007) – for
rapid in-vitro diagnostic test kits. All these units have ISO 9001, ISO 14001 – quality
and environmental management system certifications. HLL’s Peroorkada, Akkulam
and Kanagala Plants have OHSAS 18001 Certification for efficient occupational health

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 and safety management system. The testing laboratory for finished products at
Peroorkada factory has NABL accreditation under ISO/EC 17025.

 Peroorkada Facility, Thiruvananthapuram (PFT): The manufacturing unit at

Peroorkada was set up in 1969 in technical collaboration with M/s Okamoto Industries
Inc. Japan. The plant has since undergone continuous modernization over the years
and has an annual production capacity of 1066 million pieces of condoms. The facility
is equipped with modern machines and equipment for production, inspection and
quality testing, conforming to GMP and meets international standards. The unit
produces many variants of condoms with different flavours and textures. Condoms
manufactured in this facility have product certifications such as, CE, KITE, SABS, NF
Mark, and meet a range of international quality specification and standards such as :
WHO 2003, ISO 4074:2002, SANS ISO 4074, ASTM D 3492, and GOST – 4645-81.
The facility has certifications under ISO 9001, ISO 13485, WHO GMP, OHSAS and
ISO 14001.

 Akkulam Facility, Thiruvananthapuram (AFT) : AFT is a modern state-of-the-art

facility for manufacture of Blood Bags and other medical devices namely IUDs (Intra
Uterine Devices), Surgical Sutures, Hydrocephalus Shunts, Tissue Expanders and Tubal
Rings.
The manufacturing facility is centrally air – conditioned and has class 10000 and class
100 clean areas. The facility is certified for conformity with ISO 9001, WHO GMP,
ISO 13485, OHSAS 18001 AND ISO 14001.

The annual production from this unit is : Blood Bags – 11.5 million pieces, Copper IUD
– 5.5 million pieces, Shunts – 5,000 pieces, Tissue Expander–2000 pieces, Surgical
sutures – 1,25,000 dozens and Tubal Ring – 2.5 million pairs. The products from this
unit carry the CE Marks.
1.7.2 Motto

Innovating for Healthy Generations.

1.7.3Vision

HLL will establish itself as the Leader in its core activities, through a process of
continuous innovation and participatory approach in order to –

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  Provide best value to the customer.
 Be an employer of choice.
 Promote the cause of family health in general, and women’s health in
particular.
1.7.4 Mission
To accomplish the Corporate Vision, HLL has outlined a Mission to be a World class
Health Care Company by the year 2011, with focus on five key areas, namely.
Business Leadership
 Attain rapid growth and global levels of operation with cost competitiveness.
 Be among the top three players in each main product category.
 Become the organization to be benchmarked with.
 Become an acknowledged and admired leader at industry forums.
Customer Focus
Focus on quality and customer delight at all time.
Innovation
 Establish core competence through a process of learning and innovation.
 Create a culture of continuous innovation resulting in at leat 10% of turnover
from Research and Development initiative.
Employee Satisfaction
 Strive to be the employer of choice in India with employee satisfaction levels
of over 90%.
Social Sector Initiatives
 Be recognized as the leading social organization in the field of Reproductive
and Women’s Health, with a commitment to the society – a partner of choice
for implementing all government and multi-lateral initiatives in these segments.
1.7.5 Objectives
 Building an enduring manufacturing base for contraceptives and Health care
products.
 Logistics planning and Management for ensuring the accessibility of HLL
brands “at the arm’s length of desire”.

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  Effective practice of Social Marketing Programmer aimed at addressing the
needs of the society and providing impressive return on investment to Government
of India.
 Conceptualize and implementation of social projects.
 Encouraging innovation and technology updating.
 Training and improving work force.
 To maximize cost reduction.

1.7.6 MILESTONES

To trace briefly, HLL’s 'Milestone' om the 44th year since its formation:

 01 March 1966

 Incorporated as a company under the Ministry of Health and Family Welfare of

the Government of India.

 05 April 1966

 Commences commercial production of Condoms at its Peroorkada Factory

Thiruvananthapuram (PFT). Production capacity – 144 million pieces a year.

 1976

 Production capacity doubled to 288 million pieces a year with the addition of two
more lines in the moldings section.

 1985

 Addition of a new plant at Thiruvananthapuram with the latest state-of-art

Japanese Technology. Commencement of new condom plant at Kanagala,
Belgaum (KFB). Raises HLL’s total Condom production capacity to 800
million pieces a year.

 1991

 HLL recognized as a MOU signing CPSU by the Government of India.

 HLL granted the 510(k) Registration by the Food and Drug Administration
(FDA) US, for its Male Condoms.

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 1992

 Adds manufacture of Medigard Surgical & Examination Gloves at PFT.

 Commences formulation and tableting of Saheli (Centchroman) once-a-week non-

steriodal pill at the Kanagala plant near Belgaum (KFB).

 1993

 Plant for formulation and tabletting of Mala-D Oral pills, commissioned at KFB.

 1994

 Commences production of copper-T Intra-Uterine Device (IUD) at its Aakkulam

Factory, Thiruvananthapuram (AFT).

 Commences commercial production of Ceredrain Hydrocephalus Shunts.

 1995

 Introduces Surgical, Synthetic and Catgut Sutures

 Commences manufacture of HL-Haemopack blood transfusion bags at AFT.
 HLL awarded NF mark.

 1996

 HLL awarded ISO 9002 certification – for PFT (Condom manufacture) and AFT
(manufacture of blood bag, copper-T and hydrocephalus shunt.

 1997

HLL, the first company from India selected by the World Health Organisation
(WHO) for sourcing of Condoms.

 1998

 HLL Peroorkada plant (PFT) awarded CE mark.

 HLL’s Akkulam plant (AFT) awarded the CE mark. granted

 Hindustan Latex Family Planning Promotion Trust (HLFPPT) a not-for-

profit organization of HLL commences several social marketing projects and
services in different parts of the country.
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 2000

 Receives MOU award and Certificate of merit from the Vice President of India,
for achievement of MOU targets.

 AFT awarded ISO 14001 certification.

 2002

 PFT and KFB awarded ISO 14001 certification

 KFB awarded the CE mark for Condoms.

 Introduces HL HAEMOSAFE Instant Needle and Syringe Destroyer, for

destroying used needles.

 2003

 Receives MOU Award from the President of India, for excellence in the
achievement of MOU targets for 2001-2002, on 5th April 2003.

 Achieves a turnover of Rs. 150 Crores.

 Introduces ‘Preventol’ Emergency Contraceptive Pills.

 Introduces for Blood Bank automation, HiCare Blood Collection Monitor and
HiCare Tube Sealer for sealing Blood Bags.

 HLL commences manufacture of Tissue Expanders at AFT.

 HLL exports touched Rs. 13 Crores, to over 60 countries around the world.

 HLL emerges as the nation’s top social marketing organization in the area of
contraceptives.
 Commercial production of Surgical Sutures launched at AFT by the Union
Minister for Health and Family Welfare on 27th September.

 2004

 Launches Moods condoms in the Middle East on 22nd January.

 HLL’s Female Condom launched by the Secretary, Dept. of Family Welfare at

New Delhi on February 13.

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  Launches Sanitary Napkins “Sakhi” at Indore on 29th February.

 Cochin Special Economics Zone (CSEZ) unit inaugurated on 4th March.

 Records a turnover of Rs. 162.54 crores.

 Receives Government of India’s MOU Award from the Prime Minister of

India, on being adjudged amongst the top ten Of the Central Public Sector Units
on the basis of MOU targets achieved, on 4th September.
 Launched ‘Autolok’ Auto destructive syringes, at New Delhi on 16th December.

 2005
 Contributes Rs. 20 lakhs to the Prime Ministers Relief Fund.
 Condom Vending Machines installed in Kerala by HLFPPT on 29th July.
 HLL launches Moods variant – Sprial Condoms, at Hyderabad on 7th August.
 Receives the National Safety Innovation Award from the Ministry of Labour
Goernment of India, on 17th September.
 PFT awarded the OHSAS 18001 Certification on 25th September
 Receives from the Union Finance Minister Capexil’s Export Award for
outstanding export performance on 28th November.
 The first LifeSpring Hospital at Moula Ali, a suburb near Hyderabad,
inaugurated by the Union Secretary for Health and Family Welfare, on 10th
December.

 2006

 Women’s Health Care Pharma Products launched by the Union Secretary for
Health & Family welfare at Thiruvananthapuram on 13th January.

 HLL receives National Award for Excellence in Cost Management instituted by

ICWAI at New Delhi on 25th January.

 Launches MOODS Get Closer Pack on 19th March at Chennai.

 HLL upgraded as a Schedule ‘B’ PSU by the Government of India o0n 24th
April.

 Launches a new contraceptive concept – the confidom Passion Rings – a woman

initiated barrier method made of polyurethane at Bangalore on May 6.

18
  Launches break after use syringe – ‘Bsure’ at a Mumbai on 11th June.

 HLL declared a MINI RATNA PSE by the Government of India on 31st August.

 TYPEX & HIVAC-B Vaccines launched by Union Secretary, Health % Family

Welfare at New Delhi on 30th October.

 HLL ties up with SUPPLYCO in Kerala for the distribution of its products on
9th November.

 HLL receives the Kite Mark (UK) Certification for its Condoms on 16th
November.

 KFB receives the National Energy Conservation Award in the Drugs and
Pharmaceuticals sector on 14th December.

 2007

 HLL renovates and opens the Kowdiar Park at Thiruvananthapuram for the
citizens of Kerala’s Capital city on 17th January.
 HLL forms Infrastructure Development Division in February.
 HLL organized its first ever inter Unit/Department Expo – Latexpo 2007 at PFT
from 22-24th February.
 Launches Aastha Pan Flavoured Condom for Family Health International, at
Mumbai on 16th July.
 Merrygold Health Service Network launched by HLFPPT along with SIFPSA
and USAID in UP on 23rd August.
 New Condom Plant at Peroorkada inaugurated by the Union Minister for H &
FW on 24th November. With this PFT’s capacity increases to voer one billion
(1000 million) condoms – one of the world’s largest.
 HLL commenced work on the Super Speciality Block of the Trivandrum
Medial College on 24th November.
 HLL’s ‘Corporate Song’ released on 24th November.
 HLL’s in – Vitro Diagnostic Test Kits manufacturing facility at Manesar,
Gurgaon inaugurated by the Union Secretary, H & FW on 29th November.
 HLL’s ‘Smrithivanam’ Social Forestry Programme inaugurate by Sri. T.K.A
Nair, Principal Secretary to the Prime Minister on 25th December.

19
 2008
 The Union Ministry of H & FW decides on setting up an Integrated Vaccine
Complex (IVC) and a Medical Equipment and device manufacturing park
(MediPark) at Chengalpet in Tamil Nadu.

 HindLabs Diagnostic Centre inaugurated by the Union Minister for health and
Family Welfare at the CGHS Dispensary at R.K. Puram, New Delhi on 9th
February.

 Formation of LifeSring Hospitals (Pvt.) Ltd. – a joint venture between HLL and
Acumen Fund, USA, formed on 18th March.

 Second LifeSpring Hospital, at Mallappur near Hyderabad inaugurated on 16th

June and the third Hospital at Nellore on 20th June, the fourth at Vijayawada on
14th August and the fifth at Vanasthalipuram near Hyderabad on 24th August.

 Sri. O.B. Parissh, President, Female Health Company, US inaugurate the Female
Condom manufacturing facility at Kakkanad, Kochi (KFC), on 3rd September.

 MOU signed with the Rajiv Gandhi Centre for Biotechnology,

Thiruvananthapuram, for setting up of Technology Business Incubation
Centre, on 4th September.

 Receives National Rajbasha Award from the President of India for outstanding
implementation of Official Language in the Southern Region, on 14th September.
 HLL registed its first Pharma product outside India in Peru in South America.
HLL signs an MOU with the Government of Kerala for the setting up of three
MRI Scan Centres at Thrissur, Alapuzha and Kottayam Medical Colleges on 1st
November.
 HLL ties up with Arya Vaidya Sala (AVS), Kottakkal for introducing Women
Health Care, Health Generics, and Neutraceutical products, on 5th December.
 Receives Capexil’s Export Award for outstanding export performance for
2007-08, on 10th Decmber.

 2009
 Hindustan Latex – HLL – took a new name HLL Lifecare Limited – on 1st
January – as an organization whose activities encompass complete health care for

20
 all. Changes were also brought to its existing Logo by adding a touch of pink –
which serves as the messenger of good health.
 Launches at Jaipur, Lactohil – a health tonic to improve the health of lactating
mothers, a product from AVS, Kottakkal, on 5th January.
 HLL opened MOODS Planet retail outlet at Thiruvananthapuram (Kerala) to
directly reach its range of contraceptives to consumers, on 16th March.
 HLL introduces M-CARE CU 250, a superior version of CuT on 01st August.
 HLL launchyed Herbs and Berries Chyavanules on 19th August 2009 at Kochi.
 The Hindlabs MRI Scan Centre at the Thrissur Medical Cllege inaugurated by
Kerala’s Health Minister Snmt. P.K. Srimathy teacher, on 29th August 2009,
 HLL ties up the College of Engineering – Trivandrum (CET) to carry out
programmes for promoting industry – academic interaction, on 10 December.
 The prestigious ‘Superband’ status was conferred on HLL’s premium condom
brand MOODS on 17 December.

 2010
 HLL’s second MRI Scan Centre set up by HINDLABS at the Alappuzha
Medical College inaugurated by Kerala Chief Minister Shri. VS. Achuthananthan
on 12th January.
 HLL’s new office complex in the National Capital Region (NCR) in Noida, New
Delhi inaugurated by Shri. Ghulam Nabi Azad, Union Minister for Health and
Family Welfare on 14t h January.
 Launched Moods condoms in Australia in association with M/s. Indo Pacific
Enterprises Pvt. Ltd. NSW, on 06th February.
 Foundation stone laid for HLL’s corporate R & D Centre at Akkulam on 19th
February.
 Launched ERP (Enterprise Resource Planning) implementation project on 23rd
March.
 HLL officers sign Value Charter founded on three core values – Trust
Transparency and Teamwork on 24th March.
 Pharma production facility set up at Indore for production of Tables, Capsules
and ORS on 28th April.

21
  HLL’s third Hindlabs MRI Scan Centre at Govt. medical College Kottayam
inaugurated by Kerala Health Minister Smt. P.K. Sreemathy Teacher, on 17th
May.
 HLL completes the construction of Super Speciality Block in the Trivandrum
Medical College Hospital set up under the Pradhan Mantri Swasthya Suraksha
Yojana (PMSSY) on 28th May.
 Signs MOU with National Institute of Research in Reproductive Health (NIRRH)
Mumbai for developing and up scaling technologies in the area of contraceptive
and reproductive health and subsequent commercialization of products on 01st
June.
 Foundation stone laid for HLL’s world class hormonal/steroidal formulation
plant-UNIPILL Block-with an investment of Rs. 40 Crore at HLL’s Kanagala
Factory on 12th September.
 HLL bags prestigious Indira Gandhi Official language Award first prize among C
region (non-Hindi speaking states) on 14th September.
 HLL Scientist Dr. Abi S. Aprem was awarded a grant of $ 100,000 (Rupees Forty
Five Lakhs) by Bill and Melinda Gates Foundation for his project on improving
the efficacy and acceptability of Copper T, on 10 November.

 2011

 Shri. Ghulam Nabi Azad, Union Miniser for Health and Family Welfare
inaugurated and second Blood Bag Plant – DONATO BLOCK – at Akkulam
Factory, on 05th January 2011.

 HLL launched two professional distance education programs on clinical

engineering and management in association with Indira Gandhi National Open
University (IGNOU), on 05th January 2011.
 The Union Minister for Health and Family Welfare, Sri Ghulam Nabi Azad
inaugurated on 5th January 2011, the Super Secialty Block of the Trivandrum
Medical College built by HLL’s Infrastructure Development Division. This was
the first hospital upgradation project to be completed under the PMSSY.
 Smt. Sonia Gandhi, UPA Chairperson inaugurates the HLL-HLFPPPT Health
Mela at Rae Bareilly on 05th February 2011.

22
 HLL was awarded CSR Award 2010 by Kerala Management Association on 03
February 2011.
 HLL receives Capexil Special Export Award 2009-10.
 HLL;s second contraceptive outlet “Moods Planet” opened at Technopark,
Thiruvananthapuram.
 HLL’s Peroorkada Factory won first prize for Industrial safety in the large size
industries by National Safety C ouncil (Kerala Chapter).
 Foundation stone laid for the multi storey building at Kakkanad Factory Cochin
(KFC) as part of the Capacity Expansion Project on 09th May 2011.
 HLL receives Performance Excellence Award – 2010 from Indian Institute of
Industrial Engineering on 16th May 2011.
 HLL launched STAR (Sugar Testing and Review), a mobile checkup van to
spread awareness about diabetes and help people check blood glucose on 01st
Jund 2011.
 HLL becomes the first PSU in the Kerala to sign MOU with Petronet LNG Ltd.
(PLL) for long-term procurement of LNG for its factories on 07th Jund 2011.
 HLL launched largest SMS campaign on blood donation in Kerala, in association
with BSNL on 14th June 2011.
 HLL bagged Kerala State Pollution Control Board Award for 2010-2011.
 HLL was awarded Best CSR Project Award 2010 by Project Mangement Institute
(PM).
 HLL launches “I’m not shy”, a Nation-wide confidence building campaign on
condom purchase on the World Population Day on 11th July 2011.
 HLL enters into a technology transfer agreement with Indian Council of
Medical Research (ICMR) for manufacture of Urine based Fertlity Test Kit on 02
August 2011.
 HLL hosts Sarga Sangamam 2011, the cultural extravaganza of industrial Kerala,
on 12th August 2011.
 Receives National Rajbasha Award (second prize) from the President of India for
outstanding implementation of Official Language in the Southern region, on 12th
September 2011.

23
1.7.7 Quality Systems
Building a company with a world class quality

At HLL, delivering value to our customers is our primary objective. Our customers count
on us to deliver quality products on time, every time. We believe that by utilizing our
quality processes, we will provide added value to the product, which our customers
require and deserve. We achieve this goal by focusing on our Quality Policy and
unending commitment to our customers.

1.7.8 QUALITY POLICY

HLL is committed to :
 Provide products and services, conforming to international standards in healthcare,
enabling people lead healthy and happy lives.
 Achieve organizational excellence through continual improvement by adoption of
best technologies and practices in all areas.
 Market products and services globally delivering highest value for customers through
focus on innovation, qulity, R & D, cost management and customer relationship
management.
 Be an organisation meeting highest standards in Corporate Governance and
Corporate Social Responsibility.

Commitment to Quality Systems

HLL underlines its commitment to quality by mandating that all our manufacturing
facilities are certified to a quality system standard.
Their manufacturing facilities conform to requirements of ISO 9001:2000, ISO 13485
and various international product certification marks, thus offering best value to their
customers in conformance with international standards.

1.7.9 Safety, Health and Environment (SHE) Policy

HLL is committed to protect environment, eliminate occupational hazards and ensure

safety of employees & subcontractors through :

24
  Monitoring and control of the impact of its activities, products and services on a
continual basis;
 Compliance of applicable legal and other requirements;
 Adopting appropriate operatin practices;
 Facilitating employee training and their involvement;
 Pollution mitigation through adoption of best practices;
 Conserving materials, energy and reducing waste at source, and / encouraging usage
of renewable energy sources;
 Periodic review of safety, health and environment management system.

1.7.9.1 SHE Management System Certifications

At HLL, they believe that preserving natural resources and protecting the environment is
their responsibility to their employees, their customers and the communities in which they
operate. They are also committed to health and safety of their employees and as part of this
responsibility they have developed and are maintaining excellent environmental, health, and
safety management systems that meet the requirements of ISO 14001 & OHSAS 18001.

1.7.10 TECHNOLOGY AND INNOVATIONS

Since inception, HLL has been constantly innovating to create novel products with the help
of modern technology, so that the benefits of modern healthcare can transform everyday live
of the common man. Over the years, every product of HLL, created through constant
Research and Development has aimed at making world-class healthcare available to the
society at large.

HLL has successfully commercialized indigenous technologies developed by premier

research institutions such as Sree Chitra Tirunal Institute of Medical sciences and
Technology, Thiruvananthapuram and the Central Drug esearch Institute, Lucknow. This
ability to assimilate innovative technology has enabled HLL to produce cost-effective and
high quality medical devices, drugs and contraceptives. Through several collaboration with
world leaders in technology, HLL now has state-of-the-art facilities to manufacture world-
class healthcare products and make them available to millions worldwide.

25
1.7.11 CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility policy of HLL is to “Be a socially responsible
corporate entity with thrust on three Pillars of sustainable development – Social,
Environmental and Economical”.

The objectives of our CSR initiatives are :

(a) Participate in the developmental, educational, social, cultural, sports and health care
activities in the society, to encourage creativity and support such activities for the
youth, the elderly, the weaker and underprivileged sections and the physically
challenged.

(b) Encourage employees to participate in community development initiatives.

The Corporate Social Responsibility activities undertaken by HLL over the past three
years are:-

 The Company initiated a massive cleanliness drive in various parts of the city along
with the Corporation of Trivandrum and Habitat to face the challenge posed by the
spread of vector borne diseases in the city and neighborhood.
 HLL is also assisting in the modernization of the Peroorkada General Hospital that
serves a vast segment of the city’s population.
 HLL has been organizing every year free medical camp by renowned doctors for
the people living near the Akkulam factory, a few kms from the Trivandrum
Medical College. During 2009 a cardiology camp was organized for the people
here by doctors of the KIMS hospital, Trivandrum.
 To ensure proper sanitation and cleanliness at the Anganwadi opposite to the
Akkulam Factory, the company constructed and donated toilets for them.
 During March 2010 a General Medical Camp was organized at the Aakkulam Plant
for he people of the surrounding locality in association with KIMS Hospital, one of
the leading hospitals in the city. A team of three Specialists in the area of General
Mdicine and Cardiology conducted the Camp.
 Since setting up the Hindlabs Diagnostic Centres at the MedicalColleges at
Thrissur, Alapuzha, and Kottayam, HLL has been providing free MRI Scan
services to 10% of the patients from BPL families.

26
  HLL has been taking the lead in organizing Blood donation Camps throughout the
State with the support of various donor motivators such as HLFPPT, NSS, NCC,
Corporate organizations, service clubs and Residents Associations etc. and leading
blood banks across Kerala.
 On 11th September 2010 HLL constructed and handed over to the Headload
workers – an external body that does the loading and unloading work at Aakkulam
Plant, a Rest block at the Plant’s entrance at a cost of nearly Rs. 1.75 lakhs.


Educational, Cultural, Sports initiatives

The company has been extending financial assistance to various educational, cultural,
social and spors organization for their various activities all over the state. In this area
priority has been accorded to activities of students of the state’s school and colleges for
organizing their various educational events/seminars, cultural and sports activities.

 The company has been providing assistance for poor students in Govt. run schools
for obtaining uniforms, note books etc.
 HLL has also been assisting the children of economically weaker terminally ill
patients at the RCC, Trivandrum, for their education in various courses, at the
commencement of each academic year.

Infrastructure Development :

 As a corporation responsibility, HLL has renovated the Kowdiar Park – a major

Park in the heart of the city, in front of the Kowdiar Palace at Thiruvananthapuram.
The company also added recreational facilities for children at the Children’s Park,
adjoining this Park. The park is today a major attraction for the citizens of the city
who converge here in vast numbers.
 HLL has also taken over the maintenance of the Bhagat Singh Park at Poojappura
Junction near the Corporate and Head Office, a Park of historical importance. The
Park and the Children’s Park within it attract a vast number of people every day.

Internal Corporation Social Responsibility

Several Employees related activities are being undertaken at the Plant and in the offices
aimed at emotional, motivational, skill development and empowerment of employees.
Some of these activities were :

27
  Counseling for personal as well as emotional problems affecting work.
 Visiting the Family of absentee employees to understand their problems and
counseling them.
 Employees are given all assistance including financial support to acquire higher
qualifications, an area of empowerment which would enable them to go up the
ladder in the company as well improve their knowledge and confidence levels.
 Extending career guidance to employees children and organizing summer camps
for their personality development and other skills.
 Have set up Yoga and Meditation Centre for the employees to handle their stress
related problems and also a well-equipped Health Centre.
 Initiated a social forestry programme – for tree plantation in the factory premises by
retiring employees.

The focus is towards restorative, preventive as well as promoting, holistic health of their
employees. For the above-mentioned activities they have collaborated with various Non-
Government Organizations, to deliver best services for the employees and their family
members.

In the aea of CSR the thrust of the company in the coming years will be on three key
initiatives for the betterment of our society.
 Empowerment of women in the nearby villages of manufacturing units, by providing
income-generating job.
 Improve the infrastructure in the Hospitals and Schools in the neighborhood of our
Units/Offices.
 Promoting voluntary blood donation camp by donor motivation and liaison with
blood banks.
 Providing Health Checks for Children in schools for underprivileged children and
providing education in life skills in Private, Aided and Govt. Schools.

At HLL, Corporate Social Responsibility means caring for the society, for the people
around us and contributing in every way possible to add value and improving their
quality of life.

28
 Other Initiatives

 The Company accorded assistance of over 3 lakhs to two children Benson and
Bensy, affected by AIDS who lost their parents, for their medicines and care. In
continuation, since 2009 HLL is providing assistance for the Children to the extent
of Rs. 75000 every year towards an Ayah to support them, Nutritious food
supplements and travels every month to the Medical College, Trivandrum and
elsewhere for their medical checkups.
 Hindustan Latex Family Planning Promotion Trust (HLFPPT) – a not for profit
organization, an associate organization promoted by HLL has been supporting
implementation of population stabilization and HIV AIDS prevention and care
programme in partnership with international development agencies, state
governments and MOHFW. HLFPPT has been pioneering implementation of
social marketing programmes for enhancing the access and demand for condoms,
oral contraceptive pills and other health products.
 HLL teamed up with Acumen Fund, a nonprofit venture philanthropy fund, to set
up LifeSpring Hospitals (Pvt.) Limited – a joint venture intended to create a chain
of small hospitals (20-25 beds) focused on providing the underserved in the country
with widespread access to maternal and child health care service at an affordable
cost.

1.7.12 MARKETING
Over the past two decades, HLL has steadily set up a strong and sound infrastructure for
direct marketing. HLL has put in place a vast distribution network covering the length
and breadth of the country. HLL’s products today reach over 200000 retail outlets,
covering 3500 hospitals, reaching over 30000 medical professionals, with over 2800 stock
points, has over 700 frontline team members placed in every town, with offices in all
metros and mini metros, and reaching over one lakh villages in the remotest corners of the
nation.
It is the leading social marketing organization in the country in the area of contraceptives –
with a market share of over 65 percent in the rural and semi urban markets, including in the
highly populated states of UP, Madhya Pradesh, Bihar etc.
HLL has made vast inroads in the commercial segment too, with the growth in its market
share from 0.1 percent in the nineties to 15 percent at present. HLL’s products are today
exported to over 115 countries.

29
1.7.13 Research and Development Department
From Blood Transfusion Bags to Hydrocephalus Shunts, to once-a-week Non-Steroidal
Oral Contraceptive Pill, to several variants of condoms, every product from HLL is a result
of innovation. The last four decades have seen HLL tie up with various scientific and
academic institutions of excellence, for developing new and novel healthcare products.
Today R & D Centre of HLL has several projects in hand, both in-house and collaborative,
with premier academic and research institutions in the country and abroad, viz:- Indian
Institute of Technology (IIT), Kanpur; Central drug Research Institute (CDRI), Lucknow;
Sree Chitra Tirunal Institute of Medical Sciences & Technology (SCTIMST),
Thiruvananthapuram; Regional Cancer Centre (RCC), Thiruvananthapuram and Population
Council, USA. These projects cover a wide area of research ranging from development of
novel techniques for drug delivery to blood filters to novel contraceptives and cancer care
devices. Based on its technological competency, the R & D centre is implementing
sponsored projects from organization.
With the objective of developing new and novel healthcare products, HLL aims to translate
the laboratory scale technologies available at premier research institutes, to a commercial
scale. As a first step towards this, HLL has set up a Technology Business Incubation
Centre (TBIC) at Rajiv Gandhi centre for Biotechnology (RGCB), Thiruvananthapuram. The
immediate goal of the TBIC would be to develop novel, fast and easy to use diagnostic
methodologies for various infectious diseases. This would further be extended to the
development of new healthcare products.

HLL is in the process of setting up a full-fledged world-class R&D Centre in

Thiruvananthapuram, to develop innovative products in the area of Reproductive and
Contraceptive Research, Devices and Immunobiologicals.

1.7.14 HLL’S Partners

In its search for becoming a truly world-class provider of healthcare products and services,
HLL has been seeking to adapt knowledge from its partners. HLL has over the years been
networking with various corporate organizations, development agencies and NGOs by
combining strengths and capabilities of several world leaders. Some of them are listed below:
 Okamoto Industries Inc. for male condoms.
 Female Health Company (FHC) for manufacture of female condoms and its
promotion in Asia.
 Finishing Enterprises, USA for copper TIUD.

30
  Helm, Germany for distribution of DMPA (Depot Medroxyprogesterone Acetate) in
India.
 Arya Vaidya Sala (AVS), Kottakkal, Kerala, for Ayurvedic products.
 Bharat Biotech International Ltd. For Hepatitis B and Typhoid vaccines.
 Chengdu Institute of Biological products for supply of JE Vaccines to Government
of India.
 Cheng Da Biotechnology (CDBIO) for marketing of Human Anti-Rabies Vaccine in
India.
 Cycle Technologies Inc., USA for manufacture and distribution of cycle Beads in
India and abroad.

1.7.15 INDIAN COMPETITORS

 TERUMO PENPOL, TVPM.
 Johnson and Johnson sutures
 Corporate Channels India Limited
 Pregna International
 SPP Enterprises, Madurai
 Panchsheel Organics Limited, Mumbai
 Lew(Laboratory Equipment World), Noida
 Pharma squire, Mumbai
 Chenna Poly Medicure Ltd., Faridhabad

1.7.16 WORLD COMPETITORS

 High hope International Trading Co. (China)
 Fosun Medical system Co.Ltd. (China)
 Paraguard (UK based company)
 Mirenna (UK based company)
 Phermasi Instrument Co.Ltd. (China)
 KY Medical Instrument Co.Ltd. (China)

1.7.17 PRODUCT PROFILE

The Company offers the widest range of products for contraceptive and healthcare
segments, which possibly no other organization in the world can provide.

31
Product profile of Akkulam Factory is :-

 Blood bags

 Surgical Sutures

 Copper-T

 Hydrocephalus Shunt

1.7.17.1 BLOOD BAGS

During the yester years, blood bags were imported. But HLL Lifecare Limited started
manufacturing of blood bags from 1995, with the technical knowledge from Sri Chitra
Thirunal Institute of Medical Science and Technology, Thiruvananthapuram. A
manufacturing facility with a capacity of 2 million per annum is set up at Akkulam in
Thiruvananthapuram. The state of art manufacturing facility guarantees HL
Haemopack Blood Bag system to be distinct & the best. The facility is equipped with
Class 10,000 Clean Rooms and critical operations are performed in Class 100 Laminar
Air flow benches. HLL offers a wide range of Blood Bag system which includes
Single, Double, Triple, Quadruple bags in varying capacities ranging from 100ml to
500ml. Variants like Bags with Leukodepletion filters, Sampling port, Diversion bag,
Needle injury protector, Top and bottom outlet bag and Autologous Blood bags also forms
part of the product range.

The HL Haemopack Blood Bag System is manufactured from superior grade Poly
Vinyl Chloride (PVC) based material which makes it flexible, strong and able to
withstand rough handling during use. The HL Haemopack Blood bag is designed for
efficient and safe collection, identification, storage and separation of blood
components in a closed system and infusion of contents. The device has adequate
provision for suspension from all sides, which does not interfere in use. HL
Haemopack offers minimum risk from contamination, air embolism and interaction
between containers and contents. By virtue of state of the art production facilities and
latest quality control systems HL Haemopack is distinct, different and best choice to
meet advanced transfusion service requirements.

32
 1.7.17.2 SURGICAL SUTURES

HLL Lifecare Limited has developed single use absorbable (catgut) and non-
absorbable (synthetic sutures) for specialist and general surgeries. Its needle
specifications include reverse, conventional cutting, fine line straight cutting needles
and round bodies taper needles. Threads are of side range from plain and chromic
catgut, black braided silk, polyester and nylon. Sutures are sealed individually in a foil
pack, carrying illustration and color coding for easy identification. The raw materials
are obtained from select sources approved by the Government of India. The
manufacturing and quality standards ensure that the sutures are of uniform diameter
throughout the length, which ensures secure knotting and predictable absorption
characteristics.
1.7.17.3 COPPER T
It is an intra - uterine contraceptive device especially for female. Commercial
production of Copper - T has started in the year at Aakkulam factory and has an annual
installed capacity of 17 million pieces. It is produced in two brands T CARE Copper T
Tcu 380 A and T CARE Copper T 200B. The technology for the production of Copper
T was received from M/s Finishing Enterprise Incorporated USA. b. The manufacturing
unit which is equipped with a class 10,000 clean room facilities, is also ISO 9002
certified by NQA - QSR, UK and ISO 14000 from TUV Germany.

The Copper T intrauterine device is one of the most effective, long and acting
reversible contraceptive available. It is a small, flexible plastic device that is inserted
into the uterus by the physician to prevent pregnancy. The Copper T probably works by
preventing a fertilized egg from implanting and growing in the wall of the uterus. It
may also slow down sperm and prevent them from reaching an egg. HLL supply
Copper - T either in bulk packing or with individual packaging. The Brand T care is
being exported to several countries. The trail production commenced was in the year
1993. Cu - T was emanated as one of the most economical forms of contraception, with
a cover of three and half of five year.

33
1.7.17.4 HYDROCEPHALUS SHUNTS

Hydrocephalus is one of the most dreaded diseases and the surgical correction of this
condition is by implantation of a shunt. Hydrocephalus in India and many parts of the
world was being treated using expensive imported shunts or indigenously
manufactured ones without consistent quality and were not available in predetermined
pressure ranges. CEREDRAIN HYDROCEPHALUS SYSTEM is made in class
10,000 clean room with dedicated workstations of class 100. Each shunt is
individually tested for pressure characteristics (low, medium, high) on computerized
automatic quality assurance system, to ensure the functional reliability of Ceredrain.
Ceredrain’s Burr hole design enhances easy surgical placement and there is no
interference with CT Scan. Reliable opening / closing characteristics ensured by:-
(1) Diaphragm type control valve.
(2) Valve seating interface of dissimilar Polymers to minimize sticking.

The excellent quality materials used in ceredrain ensures minimal rejection of implanted
shunt. Predetermined pressure ranges-low, medium and high. Available as Adult &
Pediatric, VP & VA Shunts.

34
1.7.18 HLL LIFECARE LIMITED (HLL) PORTFOLIO OF PRODUCTS
FIGURE 1.7.1

35
ORAGNIZATIONAL STRUCTURE AT HLL LIFECARE LIMITED

FIGURE 1.7.2

36
2.1 REVIEW OF LITERATURE

Inventories are goods held for eventual sale by a firm. It is one of the major
elements of working capital. The cost of stocks is a sensitive area in the management
of working capital. Inventory requires large capital investment. If inventory is not
properly managed, it may affect the production, marketing and finance departments.
Ultimately this may affect the existence and growth of the business. If a firm carries
too much inventory, it will run out of cash. Its capital will be unnecessarily tied up in
excess inventory. This is so because inventory is illiquid. It brings no return. In the
same time, if a firm carries too little inventory, it may result in stock outs. The firm
may lose sales. So every organization must have a clear cut policy for controlling the
stocks failing which the profits of the firm would erode. The management of
inventories becomes a pivotal issue in cost minimization and profit maximization.
Inventories include raw materials, stores and spares, semi finished goods, finished
goods and other inventory. Spares form an important class of inventories by
themselves. The use of spare parts differs from industry to industry. Industries like
transport, fertilizers, mining and other processing plants are highly spares incentives.
The management of spare parts inventory is crucial in any organization. Spare parts
management plays a vital role in achieving the desired plant availability at an optimum
cost. Thus the MCL must analyze the inventory management of spare parts to ensure
the effectiveness of spare parts. Spare parts management is essential in every stage of
cement production.

2.2 MEANING OF INVENTORIES

The term inventory simply refers to stock. Inventories are the stocks of the
product a company is manufacturing for sale and the components that make up the
product. These are the assets that will be sold off in future in the normal course of
business operation.

W. Bruggeman and P. Vandendaele (1983) concluded in his study that many small
companies are running their businesses with strongly unbalanced inventories. Since
micro-computers have become cheaper these companies now have the opportunity to
manage their inventories more efficiently. The authors discusses about the various

37
functions of easy-to-use inventory management software for micro-computers.
According to the author’s perception, for implementing these systems in manufacturing
companies, wholesale companies, retail companies and spare-part warehouses it should
report on the link between the inventory management system and the accounting
system; how operations research and inventory models can be applied; when statistical
forecasting is useful and when it is not useful; and the behaviour and the reaction of the
software user. The authors also described a simple approach to assess the potential
ordering, stockholding and stock out cost savings and the service improvement due to
scientific inventory control.
Seyed-Mahmoud and Aghazadeh (2001) concluded in his study that a just-in-time
inventory management model and a quantity discount model were used to determine the
appropriateness of each model for the retail outlet. Based on the calculations performed,
it was determined that utilizing a retail just-in-time (JIT) policy is unrealistic. Customer
demands constantly change, and shortages due to stock-outs can cause huge losses in
profits, especially when customers are lost to competitors. Additionally, the quantity
discount model provides the lowest total cost for a retail outlet. Not only are the prices
cheaper when inventory is bought in large quantities, but shortages or stock-outs are
rare. The optimal solution for a retail store is implementing the quantity discount
method.

Massimo Bertolini and Antonio Rizzi (2002) had developed a simulative model,
designed and developed to optimally manage an integrated finished goods inventory
system, and suitable for adoption in a wide range of make to stock manufacturing firms.
The goal of the model is to manage optimally finished goods inventory levels, in order
to minimize costs deriving from holding inventory and from adjustment to the master
production schedule (MPS) to prevent stock-outs. A trade off is sought between these
costs components. The input variables of the model are: safety stock levels, assessed
through coefficients k1, K2 and k3, and the stochastic distribution functions of products
demand. The model performances are assessed considering the annual total cost for the
inventory management. The model is then tested by a numerical application. The case
considered refers to a major firm operating in the zoo technical feeds production
industry.

Matteo Kalchschmidt et al (2003) in their study revealed that in many industrial

sectors, firms are dealing with a demand which are more and more uncertain often due

38
to the supply chain structure. One of the most critical effects of demand uncertainty is
the simultaneous increase of inventories and decrease of customer service. It describes
an integrated system for managing inventories in a multi-echelon spare parts supply
chain, in which customers of different size lay at the same level of the supply chain.
The differences in size generate demand peaks and thus a very variable and lumpy
demand pattern. The analysis presented in the paper stems from a case study in the field
of durable goods spare parts. The paper contributes in three ways: on the one hand, it
shows that consistency between managerial solutions and supply chain structure enables
to enhance operative performances. On the other hand, it provides a new solution to a
problem that characterizes several different industrial contexts. Eventually, it highlights
that the exploitation of a larger and more reliable set of information dramatically
improves performance.

A. Regattieri et al. (2005) proposed effective forecasting methods for typically

lumpy demand for spare parts inventory, and analyzes the behaviour of forecasting
techniques when dealing with lumpy demand. Twenty forecasting techniques are
considered and tested and historical data from Alitalia are used to analyze and compare
their performance. The results demonstrate that item lumpiness is the dominant
parameter and showed that demand forecasting for lumpy items is a complex problem;
results from previous studies are not very accurate. The best approaches are found to be
weighted moving averages, the Croston method, and exponentially weighted moving
average models.

S. G. Li and X. Kuo (2008) revealed in its study that the conventional approaches
cannot achieve the optimal performance because of the complex structure of spare parts
supply chain. It had developed an enhanced fuzzy neural network (EFNN) based
decision support system for managing spare parts inventory in a central warehouse and
can be utilized for forecasting the demand for spare parts. The proposed system had
made improvements in assigning connection weights based on the fuzzy analytic
hierarchy process (AHP) method without painstakingly turning them. It also made
improvements in providing comprehensive and accurate activation functions and fit a
wider range of nonlinear models. Last, but not least, an adaptive input variable had

39
introduced to decrease the impact of the bullwhip effect on the forecasting accuracy.
The proposed system is evaluated with the real word data and experimental results
indicate that the EFNN outperforms other five models in fill rate and stock cost
measures.

Mahendra Pratap and Harwinder Singh (2008) had explained that an efficient
management of the inventory plays a vital role in success of any organization. The
objective of inventory management was to maintain optimum level of inventory, so that
the cost of production can be reduced. The author points out that to survive in this
competitive world, a proper inventory of raw material is to be maintained in all
organizations. As per the proposed model, the shortage cost of materials is eliminated
with introduction of buffer stock. Based on this proposed model, the total inventory cost
determined by an economic selection is less than the existing inventory cost.

Brent D. Willians and Travis Tokar (2008) concluded in their study that there are two
major themes to emerge from logistics research focused on inventory management.
First, logistics researchers have focused considerable attention on integrating traditional
logistics decisions, such as transportation and warehousing, with inventory management
decisions, using traditional inventory control models. Second, logistics researchers have
more recently focused on examining inventory management through collaborative
models.

N. Pasupathi and G. Suresh (2010) concluded in his study that as inventories occupy a
dominant position, its efficient management will play a vital role in any organization.
As it constitutes the highest part of total current assets, its prudent management is of
paramount importance in working capital management. The study reveals that of total
inventory, raw materials constituted the highest part followed by finished goods, stores
and spares, semi finished goods and other inventory.

40
3.1 RESEARCH METHODOLOGY
Business research is defined as a systematic inquiry whose objective is to provide
information to solve managerial problems. Thus this chapter is important in the sense
that from here onwards the problem under consideration is defined, analyzed and
interpreted in a very systematic and scientific way.
It includes the following;
 The types of data collected
 Sources of data
 Analysis adopted to arrive conclusion
 Research design

3.1.1 The types of data collected

The types of data collected includes the consumption of raw material for the
financial years 2009, 2010, and 2011 based on yearly consumption, mobility, value and
criticality. Stock value and unit price of spare parts also collected.
3.1.2 Sources of data
In order to meet the objectives of the study, data were collected from secondary
sources. The financial reports of the firm have been collected from the annual reports
of the respective firm i.e. from secondary sources. The consumption pattern of the raw
material, stock value and unit price are collected from the stores ledger and the price list
of bought out items in the purchase department.
3.1.3 Analysis adopted to arrive at conclusion
Analysis adopted includes ABC, XYZ, FSN, VED, HML, EOQ,
COMPRESSIVE ANALYSIS, PRODUCTION & INVENTORY and TREND OF
INVENTORY & SALES.

3.2 RESEARCH DESIGN

The researcher has adopted analytical research study. The research design is
framed based on the conventional model, starting with data collection and proceeds
with screening, analysis and interpretation of data. The problem is clearly under stood
based on data collection, analysis and interpretation utilized to obtain a conclusion. It is
by and large a desktop analysis, and it involves scanning and absorbing tools and ideas

41
from the standard texts, journals, website and other related materials to get a hold on the
theories of financial control.
3.3 PERIOD OF THE STUDY
The period of the study is limited to 4 months. This report covers the study of
inventory management of raw materials of HLL Lifecare Limited (HLL),
Thiruvananthapuram for three years i.e. from 2009-2011.

3.4 LIMITATIONS OF THE STUDY

 Analysis and interpretation of the study largely depends on secondary sources of
data, which may not provide the scope to understand the current inventory
management practices of the company.
 As the consumption pattern of the spare parts is irregular, the outcome of this
report cannot be directly applied for inventory control every year.
 The vital item consumed this year may not be consumed in the next year/s.
 The study is limited to 3 years of actual operating and financial performance of
the company.
 The study is Confined to selective inventory items (78) of general stores
 Difficulty in obtaining certain confidential information pored as a major
limitation for the study.

3.5 TOOLS AND TECHNIQUES USED FOR ANALYSIS:

3.5.1EOQ ANALYSIS

EOQ applies only when demand for a product is constant over the year and each
new order is delivered in full when inventory reaches zero. There is a fixed cost for
each order placed, regardless of the number of units ordered. There is also a cost for
each unit held in storage, sometimes expressed as a percentage of the purchase cost of
the item.

We want to determine the optimal number of units to order so that we minimize the
total cost associated with the purchase, delivery and storage of the product.

42
 The required parameters to the solution are the total demand for the year, the
purchase cost for each item, the fixed cost to place the order and the storage cost for
each item per year. Note that the number of times an order is placed will also affect the
total cost, though this number can be determined from the other parameters.

3.5.2ABC CLASSIFICATION

It is popularly known as Always Better Control or Pareto analysis. ABC

Analysis helps in the classification of the items on the basis of their consumption values
in a given period. This analysis in inventory can be done for specified financial
period/s or for a range of dates as specified by the user. ABC Analysis can be applied
to almost all aspects of materials management such as purchasing, receiving, inspection,
store keeping and issue of stores, verification of bills, inventory control, value analysis,
etc.
It is based on the concept ‘thick on the best and thin on the rest’. Every
organization has to stock and keep track of large number of items of different kinds.
These can be service parts of product no longer available, supplies of raw materials for
general use, maintenance items and items for various other purposes. The investment in
such items is substantial and record keeping is expensive.
In practice, it is experienced that bulk of the items in an inventory has low usage
value.
Annual usage value = Annual requirement * per unit cost
Thus for better and more economic control of items in inventory the items
should be classified according to their significance or priority for reordering. The
production manager should recognize the unequal contribution of different items in the
inventory and the fact that equal efforts should not be spent on improving the inventory
policy of the items. On the other hand, inventory should not run out of items whose
usage value is low but which are of great importance in the production process.

The following steps are used to perform an ABC analysis.

 Identify the objective and the analysis criterion

43
  Collect data about the analyzed population
 Sort out the list by decreasing impact
 Calculate the accumulated impact and the percentage
 Identify the classes
 Analyze the classes and take appropriate decisions.

In ABC Analysis, the items are categorized in to three main categories on the
basis of their usage value.
(1) More costly and valuable items are classified as Class A. These are large
investment items but not much in number. These items need more closer and careful
control.
The requirement for ‘A’ class items should be ascertained ahead of time
according to the period of use and their production or purchase should be scheduled
such that these arrive just before needed. These items should be ordered frequently but
in similar size. A periodic review policy should be followed to minimize the stock out
percentage of such items and top inventory staff should control these items.
(2) Average usage value items are classified as B. About 15% of these items in
an inventory account for 15% of the total investment. These items are less important
than ‘A’ class items but are costly enough to have more attention in their use. These
items cannot be over looked but need lesser degree of control than those in class A.
Statistical sampling is generally applied in their control.
(3) Low usage items are put in class C. About 75% of the inventory items
account for only 10% of the inventory capital. These items can be stored at an
operative place where people can help themselves without any requisition formally.
These can be charged to an overhead account. No doubt, loose control of “C” items
will increase their investment cost and expenditure on shelf wear, obsolescence and
wasteful use but this will not be so much to offset the savings in recording costs.

ABC Analysis focuses the attention of management where it is needed in due

proportion. The items in A, B and C can be compared in the following tabular form:

44
TABLE 3.1 COMPARISON OF A, B AND C ITEMS
Sl.No. A B C
Maintains moderate
01 Maintains close control Maintains loose control
control
Size of order based on Size of order based on Size of order based on
02
calculated requirement usage the level of inventory
Procured from two or Procured from two
03 Procured from sources
three sources sources
Keeps records of receipts Keeps records of receipt
04 No records are kept
and use and use
More efforts to reduce
05 Moderate effort Minimum effort
lead time
Close checks on Broad checks on schedule Hardly any check
06
schedules and revision revision required
07 Frequent ordering Less frequent ordering Bulk ordering
Expediting for
08 Continual expediting No expediting
prospective shortages
09 Accurate forecasts Less accurate forecasts Approximate forecasts
No safety stock for less Large safety stock up to 2 Large safety stock for
10
than 2 weeks to 3 months more than 3 months
Average consumption
11 High consumption value Low consumption value
value

Purchasing policy and procedure should be so formulated that, for ‘A’ items, maximum
attention is devoted to pre-design and pre-purchase value analysis, market research,
sources development and follow-up. Placing of orders for stores items should be based
on the ABC principle. Generally A items are ordered frequently and in small quantities,
while C items are ordered just once or twice a year to obtain the entire year’s
requirement.

3.5.3 XYZ CLASSIFICATION

The XYZ classification is based on the value of inventory stored. It helps to

control obsolescence and tells how values are distinguished amongst materials in stores.

45
If the values are high, special efforts should be made to reduce them. This exercise can
be done once a year.
X items are those items whose value is high while Z items are those items
whose values are low. The Y items fall in between the two. This classification helps in
identifying the items which are being extensively stocked.

3.5.4FSN CLASSIFICATION

This classification takes in to account the pattern of issues from the stores. The
classification is based on the mobility of items in the stores and are classified as fast
moving, slow moving and non-moving items. This classification is very much useful to
control obsolescence. Items classified as S and N especially N items require very great
attention. There may be several reasons why an item has got in to the N category.
There may have been a change in technology or change in the specification of particular
spare part or the item may no longer be in use. When an FSN classification is made, all
such information stands out prominently, enabling managers to act on it in the best
interests of the organization.
 Fast Moving items

Items which have moved at least once in a six months are classified as fast
moving. The items which are required for preventive maintenance fall in this category.

 Slow Moving items

Items which have moved at least once in a period one to three years are slow
moving. Spares for machineries / equipments fall in this category.
 Non-moving items

The items which have not moved even once in three to five years are classified
as non-moving.

3.5.5 VED CLASSIFICATION

VED stands for vital, essential and desirable. This type of classification is mostly
applicable in the case of spare parts. The peculiarity about the spare parts is that it does
not follow a predictable demand pattern as in the case of raw materials. The result is

46
that I f we follow the usual methods we get in to difficulties as the demand changes. In
this, items are classified based on criticality. If it is very vital, then it is given as V
classification. If it is not so important, then it is given as D classification. How much
important the item is decided by the experience and is done with the assistance of
maintenance department.
The criteria for declaring a spare part as vital, essential or desirable is as
follows:
 Vital

Vital raw materials are those which may cause the stoppage of the plant and
service. Risk in operations is vital. The down time cost for want of these spares will be
very high. For example, in thermal power station control valves, speed governor, drum
level gauge, etc., are vital spares.

 Essential

In the absence of such raw materials, plant can run but perhaps at substandard
performance level. For example, ID fan, coal mill, etc., in power generation unit.
 Desirable
These are the spares, whose non-availability may not adversely affect the plant
performance but increases the maintenance time. For example, electrodes, soot blower,
spares, etc.

This classification is very useful to capital intensive processing industries.

3.5.6 HML CLASSIFICATION

The HML classification is similar to the ABC classification, except for the fact that
instead of consumption values of items, their unit values are considered. Items are
classified on the basis of their unit value. The items should be listed out in descending
order of the unit value and the management may fix limits for deciding the three
categories.
H - High value items
M - Medium value items
L - Low value items

47
ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION TO ANALYSIS AND INTERPRETATION

Analysis is a critical examination of financial transactions effected during a

definite period of time. Interpretation means explaining financial statements
on the basis of the analysis. Analysis and interpretation are inter-related.
Interpretation is not possible without analysis and without interpretation
analysis has no value.
4.2 ABC ANALYSIS

It is popularly known as Always Better Control or Pareto analysis. ABC

Analysis helps in the classification of the items on the basis of their consumption values
in a given period. This analysis in inventory can be done for specified financial
period/s or for a range of dates as specified by the user. ABC Analysis can be applied
to almost all aspects of materials management such as purchasing, receiving, inspection,
store keeping and issue of stores, verification of bills, inventory control, value analysis,
etc.
It is based on the concept ‘thick on the best and thin on the rest’. Every
organization has to stock and keep track of large number of items of different kinds.
These can be service parts of product no longer available, supplies of raw materials for
general use, maintenance items and items for various other purposes. The investment in
such items is substantial and record keeping is expensive.

In ABC analysis items are classified as 'A' category, B category and

C category. ABC analysis is done on the basis of annual consumption value. ABC
Analysis gives more emphasis on % value of consumption.

48
TABLE 4.1 TABLE SHOWING ABC ANALYSIS OF MATERIALS IN HLL LIFE CARE LIMITED, THIRUVANANTHAPURAM

Item Code Material Description Uom Rate Consn. Consn. % Cum. Class
Qty Value %

1500000050 Mannitol Reference Standard Us Gm 65663.95 285 18714225.75 25.61 25.61 A

1311010131 Pvc Pellets For Sheet Extrusio Kg 93.597 196625 18403510.13 25.18 50.79 A
1320030150 Pvc Sheet - For Blood Bag Kgs 180.259 64300 11590653.7 15.86 66.65 A
1311010121 Pvc Pellets For Tube Extrusion Kg 92.685 81625 7565413.125 10.35 77 B
1320030001 Needle Cannulas 16 G 46mm Nos 1.447 4982500 7209677.5 9.86 86.86 B
Impo
1320010050 Loctrte 3339 -Uv Adhesieve -Co Ltr 27587 42 1158654 1.59 88.45 B
1110001000 Alatheon - (Tee Blend) Lbs 304.42 3500 1065470 1.46 89.91 B
1110004000 Polypropylene .Purell Hp 371 P Kg 177.525 5000 887625 1.21 91.12 C
1210001240 Silicone Rubber Tubing For Tub Ft 24.201 35000 847035 1.16 92.28 C
1331100060 Tri Sodium Citrate Ip/Usp Kg 97.096 8400 815606.4 1.12 93.4 C
1100000000 Wire-Copper 99.99 % Pure & 0.2 Kg 949.548 823.285 781748.6252 1.07 94.47 C
1331100030 Dextrose Ip/Usp Kg 74.377 9770 726663.29 0.99 95.46 C
1320030230 Recappable Cover Nos 1.224 501500 613836 0.84 96.3 C
1320030060 Transfusion Port (Twist Off) Nos 0.135 3088000 416880 0.57 96.87 C
1210001360 Silicone Tubing-Codman Ft 46.731 5500 257020.5 0.35 97.22 C
1210001020 Silicone Rubber Tubing Mtr 41.668 5000 208340 0.29 97.51 C
1000102020 Isopropyl Alcohol, Lr Grade (C Ltr 90.003 2225 200256.675 0.27 97.78 C
1210001380 Reservoir Backing-Codman Nos 101.684 1790 182014.36 0.25 98.03 C

49
1210001120 Adhesive A Silastic Type Nos 1706.74 100 170674 0.23 98.26 C
1333100010 Mannitol Usp\B.P\Lp Kg 351.85 460 161851 0.22 98.48 C
1331100050 Sodium Dihydrogen Ortho Phosph Kg 166.643 800 133314.4 0.18 98.66 C
1311010190 Abs Pellets For Spike Kgs 163.54 700 114478 0.16 98.82 C
1331100020 Citric Acid Ip/Usp Kg 99.52 1075 106984 0.15 98.97 C
1210001340 Tantalum Powder For Codman Shu Gm 64.08 1362 87276.96 0.12 99.09 C
1320020050 Metal Finishing Compound-Sa50n Kg 1230.1 63 77496.3 0.11 99.2 C
1720100000 Loctite 4014 Gm 85.098 840 71482.32 0.1 99.3 C
1000101010 Hydrochloric Acid. Hclfw36. Ltr 48.19 1200 57828 0.08 99.38 C
1210001000 Silicone Rubber Kg 2856 20 57120 0.08 99.46 C
1110006010 Pellets - Hi Density Poly Ethe Kg 100.57 495 49782.15 0.07 99.53 C
1320020010 Cyclo Hexanone Ar Ltr 171.8 275 47245 0.06 99.59 C
1100000040 Copper Wire Diameter 0.40 Mm. Kg 2025.137 21.025 42578.50543 0.06 99.65 C
1333100000 Sodium Chloride Usp \ Ip \ Bp Kg 50.68 750 38010 0.05 99.7 C
1600101010 Indion Nip Resin F Dm Water Pl Ltr 170.855 160 27336.8 0.04 99.74 C
1000100020 Acetone, Extra Pure Lr Grade C Ltr 103.7 200 20740 0.03 99.77 C
1000302000 Caustic Soda Commercial 98 % Kg 40.573 500 20286.5 0.03 99.8 C
1001302010 Methylene Dl Chloride - Lr Gra Ltr 128.849 150 19327.35 0.03 99.83 C
1001300050 Methyl - Ethyl Ketone Ltr 108.634 175 19010.95 0.03 99.86 C
1600101000 Indion 225 H Resin [Dm Water P Ltr 64.734 200 12946.8 0.02 99.88 C
1110005000 Titanium Dioxide (Rutile) Gra Kg 128.385 100 12838.5 0.02 99.9 C
1110000020 Concentrates Blue Colour Epvc Kg 371.117 25 9277.925 0.01 99.91 C

50
1600101020 Indion Ffir Resin [ Dm Water P Ltr 152.814 60 9168.84 0.01 99.92 C
1001623010 Potassium Sodium Tartrate Ar Kg 1022.715 8 8181.72 0.01 99.93 C
1720000000 Acetone-Hplc Grade Ltr 484.4 13.5 6539.4 0.01 99.94 C
1000103000 Ammonium Molybdate, Ar Grade ( Kg 6397 1 6397 0.01 99.95 C
1001900020 Soyabean Casein Digest Medium Kg 1340.333 4.5 6031.4985 0.01 99.96 C
1510010010 Water Hplc Grade Ltr 177.045 34 6019.53 0.01 99.97 C
1000610000 Fluid Thioglycollate Media H Kg 1329 4.5 5980.5 0.01 99.98 C
1000500000 Extran - E - Merk Ma 02 Ltr 114.612 50 5730.6 0.01 99.99 C
1210001010 Curing Agent Kg 5100 1 5100 0.01 100 C
1500900000 Ncidur Ltr 998.8 5 4994 0.01 100 C
1311030010 Pol Ypropyl E Ne-Grade-Am Kgs 72 50 3600 0 100 C
120n.Mfd
1510010040 Medisol/Spiritol/Surgicol/Unis Ltr 99.9 30 2997 0 100 C
1001921010 Common Salt Kg 4.65 525 2441.25 0 100 C
1001902000 Silic Gel Blue Kg 91.48 25 2287 0 100 C
1100000020 Nylon Suture For Copper-T Kg 828.035 2.302 1906.13657 0 100 C
1001900080 Sooyabean Casein Digest Agar Kg 2800 0.5 1400 0 100 C
1001924000 Sodium Hydroxide Pellets, Ar G Kg 230.333 4 921.332 0 100 C
1000305010 Cupric Sulphate, Ar Grade Cuso Kg 494.19 1.5 741.285 0 100 C
1001925010 Sodium Sulphite. Ar Grade Na2s Kg 343.333 2 686.666 0 100 C
1510100010 Mac Conkey Agar For Microbiolo Gm 3.218 200 643.6 0 100 C
1510010020 Methanol Specially Dried Lr (K Lit 374.5 1 374.5 0 100 C

51
1502600000 Zinc Grannular (No:20 Mesh) Kg 1476 0.25 369 0 100 C
1001920000 Sodium Chloride. Ar Grade Nacl Kg 132 1.5 198 0 100 C
1000101040 Acid Sulphuric Ar Ltr 155.314 0.5 77.657 0 100 C
1001305000 Methyl Red Solution, Lr Grade Ltr 381.36 0.125 47.67 0 100 C
1001300040 Magnesium Sulphate Ar Kg 338 0 0 100 C
1100000010 Suture Kg 525.302 0 0 100 C
1100000030 Copper Wire Diameter 0.32mm (M Kg 2025.137 0 0 0 100 C
1110001010 Masterbatch -Plunger Kgs 0 75 0 0 100 C
1320000001 Foil Stamping Imported Rol 726.354 0 0 100 C
1320010060 Dymax Md - Uv Cure Adhesive 11 Ltr 15327.685 0 0 100 C
1320010070 Odymax Md - Uv Cure Adhesive 1 Ltr 14800.315 0 0 100 C
1320030290 Needle Cover (Blood Bag) Nos 0 3830640 0 0 100 C
1320030310 Connector - Pvc No 0 2974000 0 0 100 C
1320030320 Recapable Needle Assembly Nos 2.276 0 0 100 C
1320030330 Transfusion Port - [4 Ur Nos 0 0 0 100 C
1320030350 Bov Sleeve (4 Up) Nos 0 0 0 0 100 C
1331100010 Adenine Lp \ Usp Kg 4817.75 0 0 100 C
Total 73085349.7 100

52
 TABLE 4.2 TABLE SHOWING ABC CLASSIFICATIONS

CLASS NO OF MATERIAL CUMULATIVE VALUE

CONTRIBUTION
A 3 66.65%
B 4 89.91%
C 71 100%

INTERPRETATION
From the above analysis it is clear that the first 3 items account for 66.65% of the
VALUE OF INVENTORY. Therefore, these items are classified as class 'A’ items. Another
4 items account for 77-89.91% of the raw materials. Therefore, these spares are classified as
class ‘B’ items. The remaining raw materials account for 91.12-100% of the raw materials.
Therefore, these are classified as class ‘C’ items.

It is seen that by exercising control over only 3 items, as much as 70% of the raw materials
value would be controlled.

FIGURE 4.1 ABC CLASSIFICATIONS

ABC ANALYSIS
C
91.12-100%

B
77-89.91%
A
0-66.67%

53
4.3 ECONOMIC ORDER QUANTITY ANALYSIS (EOQ)

EOQ applies only when demand for a product is constant over the year and each new
order is delivered in full when inventory reaches zero. There is a fixed cost for each
order placed, regardless of the number of units ordered. There is also a cost for each
unit held in storage, sometimes expressed as a percentage of the purchase cost of the
item.

We want to determine the optimal number of units to order so that we minimize the
total cost associated with the purchase, delivery and storage of the product.

The required parameters to the solution are the total demand for the year, the purchase
cost for each item, the fixed cost to place the order and the storage cost for each item
per year. Note that the number of times an order is placed will also affect the total cost,
though this number can be determined from the other parameters.

54
 TABLE 4.3: TABLE SHOWING ECONOMIC ORDER QUANTITY ANALYSIS (EOQ)

ITEM MATERIAL DESCRIPTION UOM CONSN. ORDERING % RATE EOQ

CODE QTY COST
1320030001 NEEDLE CANNULAS 16 G 46MM IMPO NOS 4982500 1500 0.04 1.447 735340.6
1320030290 NEEDLE COVER (BLOOD BAG) NOS 3830640 1500 0.04 1 536001.9
1320030060 TRANSFUSION PORT (TWIST OFF) NOS 3088000 1500 0.04 0.135 176822
1320030310 CONNECTOR – PVC NO 2974000 1500 0.04 0.26 240817.4
1320030230 RECAPPABLE COVER NOS 501500 1500 0.04 1.224 1876277
1311010131 PVC PELLETS FOR SHEET EXTRUSIO KG 196625 1500 0.04 93.597 1174846
1311010121 PVC PELLETS FOR TUBE EXTRUSION KG 81625 1500 0.04 92.685 753263.6
1320030150 PVC SHEET - FOR BLOOD BAG KGS 64300 1500 0.04 180.259 932362.1
1210001240 SILICONE RUBBER TUBING FOR TUB FT 35000 1500 0.04 24.201 252046.9
1331100030 DEXTROSE IP/USP KG 9770 1500 0.04 74.377 233451.8

INTERPRETATION
The above table shows the economic ordering quantity of important 10 raw materials. Here these materials arranged in descending order on the
basis of consumption quantity. Economic order quantity of these raw materials order can be placed on the basis of table, then it will be more
economical for the organization.

55
4.4 HML CLASSIFICATION

The HML classification is similar to the ABC classification, except for the fact that
instead of consumption values of items, their units values are considered. Items are
classified on the basis of their unit value into:

H= High value items

M= Medium value items
L= Low value items

56
 TABLE 4.4: TABLE SHOWING HIGH MEDIAM LOW ANALYSIS
Item Code Material Description UOM Rate Consn. Consn. Class
Qty Value
1500000050 Mannitol Reference Standard Us Gm 65663.95 285 18714226 H
1320010050 Loctrte 3339 -Uv Adhesieve –Co Ltr 27587 42 1158654 H
1320010060 Dymax Md - Uv Cure Adhesive 11 Ltr 15327.685 0 H
1320010070 Odymax Md - Uv Cure Adhesive 1 Ltr 14800.315 0 H
1000103000 Ammonium Molybdate, Ar Grade ( Kg 6397 1 6397 M
1210001010 Curing Agent Kg 5100 1 5100 M
1331100010 Adenine Lp \ Usp Kg 4817.75 0 M
1210001000 Silicone Rubber Kg 2856 20 57120 M
1001900080 Sooyabean Casein Digest Agar Kg 2800 0.5 1400 M
1100000040 Copper Wire Diameter 0.40 Mm. Kg 2025.137 21.025 42578.51 M
1100000030 Copper Wire Diameter 0.32mm (M Kg 2025.137 0 0 M
1210001120 Adhesive A Silastic Type Nos 1706.74 100 170674 M
1502600000 Zinc Grannular (No:20 Mesh) Kg 1476 0.25 369 M
1001900020 Soyabean Casein Digest Medium Kg 1340.333 4.5 6031.5 M
1000610000 Fluid Thioglycollate Media H Kg 1329 4.5 5980.5 M
1320020050 Metal Finishing Compound-Sa50n Kg 1230.1 63 77496.3 M
1001623010 Potassium Sodium Tartrate Ar Kg 1022.715 8 8181.72 M
1500900000 Ncidur Ltr 998.8 5 4994 L

57
1100000000 Wire-Copper 99.99 % Pure & 0.2 Kg 949.548 823.285 781748.63 L
1100000020 Nylon Suture For Copper-T Kg 828.035 2.302 1906.14 L
1320000001 Foil Stamping Imported Rol 726.354 0 L
1100000010 Suture Kg 525.302 0 L
1000305010 Cupric Sulphate, Ar Grade Cuso Kg 494.19 1.5 741.29 L
1720000000 Acetone-Hplc Grade Ltr 484.4 13.5 6539.4 L
1001305000 Methyl Red Solution, Lr Grade Ltr 381.36 0.125 47.67 L
1.5e+09 Methanol Specially Dried Lr (K Lit 374.5 1 374.5 L
1110000020 Concentrates Blue Colour Epvc Kg 371.117 25 9277.93 L
1333100010 Mannitol Usp\B.P\Lp Kg 351.85 460 161851 L
1001925010 Sodium Sulphite. Ar Grade Na2s Kg 343.333 2 686.67 L
1001300040 Magnesium Sulphate Ar Kg 338 0 L
1110001000 Alatheon - (Tee Blend) Lbs 304.42 3500 1065470 L
1001924000 Sodium Hydroxide Pellets, Ar G Kg 230.333 4 921.33 L
1320030150 Pvc Sheet - For Blood Bag Kgs 180.259 64300 11590654 L
1110004000 Polypropylene .Purell Hp 371 P Kg 177.525 5000 887625 L
1510010010 Water Hplc Grade Ltr 177.045 34 6019.53 L
1320020010 Cyclo Hexanone Ar Ltr 171.8 275 47245 L
1600101010 Indi0on Nip Resin F Dm Water Pl Ltr 170.855 160 27336.8 L
1331100050 Sodium Dihydrogen Ortho Phosph Kg 166.643 800 133314.4 L
1311010190 Abs Pellets For Spike Kgs 163.54 700 114478 L

58
1000101040 Acid Sulphuric Ar Ltr 155.314 0.5 77.66 L
1600101020 Indion Ffir Resin [ Dm Water P Ltr 152.814 60 9168.84 L
1001920000 Sodium Chloride. Ar Grade Nacl Kg 132 1.5 198 L
1001302010 Methylene Dl Chloride - Lr Gra Ltr 128.849 150 19327.35 L
1110005000 Titanium Dioxide (Rutile) Gra Kg 128.385 100 12838.5 L
1000500000 Extran - E - Merk Ma 02 Ltr 114.612 50 5730.6 L
1001300050 Methyl - Ethyl Ketone Ltr 108.634 175 19010.95 L
1000100020 Acetone, Extra Pure Lr Grade C Ltr 103.7 200 20740 L
1210001380 Reservoir Backing-Codman Nos 101.684 1790 182014.36 L
1110006010 Pellets - Hi Density Poly Ethe Kg 100.57 495 49782.15 L
1510010040 Medisol/Spiritol/Surgicol/Unis Ltr 99.9 30 2997 L
1331100020 Citric Acid Ip/Usp Kg 99.52 1075 106984 L
1331100060 Tri Sodium Citrate Ip/Usp Kg 97.096 8400 815606.4 L
1311010131 Pvc Pellets For Sheet Extrusio Kg 93.597 196625 18403510 L
1311010121 Pvc Pellets For Tube Extrusion Kg 92.685 81625 7565413.1 L
1001902000 Silic Gel Blue Kg 91.48 25 2287 L
1000102020 Isopropyl Alcohol, Lr Grade (C Ltr 90.003 2225 200256.68 L
1720100000 Loctite 4014 Gm 85.098 840 71482.32 L
1331100030 Dextrose Ip/Usp Kg 74.377 9770 726663.29 L
1311030010 Pol Ypropyl E Ne-Grade-Am 120n.Mfd Kgs 72 50 3600 L
1600101000 Indion 225 H Resin [Dm Water P Ltr 64.734 200 12946.8 L

59
1210001340 Tantalum Powder For Codman Shu Gm 64.08 1362 87276.96 L
1333100000 Sodium Chloride Usp \ Ip \ Bp Kg 50.68 750 38010 L
1000101010 Hydrochloric Acid. Hclfw36. Ltr 48.19 1200 57828 L
1210001360 Silicone Tubing-Codman Ft 46.731 5500 257020.5 L
1210001020 Silicone Rubber Tubing Mtr 41.668 5000 208340 L
1000302000 Caustic Soda Commercial 98 % Kg 40.573 500 20286.5 L
1210001240 Silicone Rubber Tubing For Tub Ft 24.201 35000 847035 L
1001921010 Common Salt Kg 4.65 525 2441.25 L
1510100010 Mac Conkey Agar For Microbiolo Gm 3.218 200 643.6 L
1320030320 Recapable Needle Assembly Nos 2.276 0 L
1320030001 Needle Cannulas 16 G 46mm Impo Nos 1.447 4982500 7209677.5 L
1320030230 Recappable Cover Nos 1.224 501500 613836 L
1320030060 Transfusion Port (Twist Off) Nos 0.135 3088000 416880 L
1110001010 Masterbatch -Plunger Kgs 0 75 0 L
1320030290 Needle Cover (Blood Bag) Nos 0 3830640 0 L
1320030310 Connector – Pvc No 0 2974000 0 L
1320030330 Transfusion Port - [4 Ur Nos 0 0 L
1320030350 Bov Sleeve (4 Up) Nos 0 0 0 L
Total 168930 73085350

60
 TABLE 4.5: TABLE SHOWING HIGH MEDIAM LOW ANALYSIS AND
CLASSIFICATIONS

RATE PER NO OF % OF ITEM CLASS

UNIT (Rs.) MATERIAL
> 10,000 4 5.13 H
1,000 - 10,000 13 16.67 M
< 1,000 61 78.21 L
TOTAL 78 100

INTERPERTATION

From the above analysis it is clear that the first 4 items rate greater than Rs.10,000
account for 5.13% of these items are classified as class 'H’ value . Another 13 items
are between Rs.1,000-10,000 account for 16.67% of the items are classified as class
‘M’ value. The remaining raw materials is less than Rs.1,000 account for 78.21% of
the items are classified as class ‘L’ value.

FIGURE 4.2: HIGH MEDIUM LOW ANALYSIS AND CLASSIFICATION

HML ANALYSIS
> 10,000 1,000 - 1,00,000 < 1,000

5.13%

16.67%

78.21%

61
 4.5 FSN ANALYSIS
This classification takes in to account the pattern of issues from the stores. The
classification is based on the mobility of items in the stores and are classified as fast
moving, slow moving and non-moving items. This classification is very much useful to
control obsolescence. Items classified as S and N especially N items require very great
attention. There may be several reasons why an item has got in to the N category.
There may have been a change in technology or change in the specification of particular
spare part or the item may no longer be in use. When an FSN classification is made, all
such information stands out prominently, enabling managers to act on it in the best
interests of the organization.

This classification takes in to account the patterns of issue from the stores. The three
letters stands for:
F= Fast moving
S= Slow moving
N= Nonmoving

62
TABLE 4.6: TABLE SHOWING FAST, SLOW & NON-MOVING (FSN) ANALYSIS

tem Code Material Description Uom Rate Consn. Qty Consn. Value % Cum. % Class
1500000050 Mannitol Reference Standard Us Gm 65663.95 285 18714225.75 25.61 25.61 F
1311010131 Pvc Pellets For Sheet Extrusio Kg 93.597 196625 18403510.13 25.18 50.79 F
1320030150 Pvc Sheet - For Blood Bag Kgs 180.259 64300 11590653.7 15.86 66.65 F
1311010121 Pvc Pellets For Tube Extrusion Kg 92.685 81625 7565413.125 10.35 77 S
1320030001 Needle Cannulas 16 G 46mm Impo Nos 1.447 4982500 7209677.5 9.86 86.86 S
1320010050 Loctrte 3339 -Uv Adhesieve -Co Ltr 27587 42 1158654 1.59 88.45 S
1110001000 Alatheon - (Tee Blend) Lbs 304.42 3500 1065470 1.46 89.91 S
1110004000 Polypropylene .Purell Hp 371 P Kg 177.525 5000 887625 1.21 91.12 N
1210001240 Silicone Rubber Tubing For Tub Ft 24.201 35000 847035 1.16 92.28 N
1331100060 Tri Sodium Citrate Ip/Usp Kg 97.096 8400 815606.4 1.12 93.4 N
1100000000 Wire-Copper 99.99 % Pure & 0.2 Kg 949.548 823.285 781748.6252 1.07 94.47 N
1331100030 Dextrose Ip/Usp Kg 74.377 9770 726663.29 0.99 95.46 N
1320030230 Recappable Cover Nos 1.224 501500 613836 0.84 96.3 N
1320030060 Transfusion Port (Twist Off) Nos 0.135 3088000 416880 0.57 96.87 N
1210001360 Silicone Tubing-Codman Ft 46.731 5500 257020.5 0.35 97.22 N
1210001020 Silicone Rubber Tubing Mtr 41.668 5000 208340 0.29 97.51 N
1000102020 Isopropyl Alcohol, Lr Grade (C Ltr 90.003 2225 200256.675 0.27 97.78 N
1210001380 Reservoir Backing-Codman Nos 101.684 1790 182014.36 0.25 98.03 N

63
1210001120 Adhesive A Silastic Type Nos 1706.74 100 170674 0.23 98.26 N
1333100010 Mannitol Usp\B.P\Lp Kg 351.85 460 161851 0.22 98.48 N
1331100050 Sodium Dihydrogen Ortho Phosph Kg 166.643 800 133314.4 0.18 98.66 N
1311010190 Abs Pellets For Spike Kgs 163.54 700 114478 0.16 98.82 N
1331100020 Citric Acid Ip/Usp Kg 99.52 1075 106984 0.15 98.97 N
1210001340 Tantalum Powder For Codman Shu Gm 64.08 1362 87276.96 0.12 99.09 N
1320020050 Metal Finishing Compound-Sa50n Kg 1230.1 63 77496.3 0.11 99.2 N
1720100000 Loctite 4014 Gm 85.098 840 71482.32 0.1 99.3 N
1000101010 Hydrochloric Acid. Hclfw36. Ltr 48.19 1200 57828 0.08 99.38 N
1210001000 Silicone Rubber Kg 2856 20 57120 0.08 99.46 N
1110006010 Pellets - Hi Density Poly Ethe Kg 100.57 495 49782.15 0.07 99.53 N
1320020010 Cyclo Hexanone Ar Ltr 171.8 275 47245 0.06 99.59 N
1100000040 Copper Wire Diameter 0.40 Mm. Kg 2025.137 21.025 42578.50543 0.06 99.65 N
1333100000 Sodium Chloride Usp \ Ip \ Bp Kg 50.68 750 38010 0.05 99.7 N
1600101010 Indion Nip Resin F Dm Water Pl Ltr 170.855 160 27336.8 0.04 99.74 N
1000100020 Acetone, Extra Pure Lr Grade C Ltr 103.7 200 20740 0.03 99.77 N
1000302000 Caustic Soda Commercial 98 % Kg 40.573 500 20286.5 0.03 99.8 N
1001302010 Methylene Dl Chloride - Lr Gra Ltr 128.849 150 19327.35 0.03 99.83 N
1001300050 Methyl - Ethyl Ketone Ltr 108.634 175 19010.95 0.03 99.86 N
1600101000 Indion 225 H Resin [Dm Water P Ltr 64.734 200 12946.8 0.02 99.88 N
1110005000 Titanium Dioxide (Rutile) Gra Kg 128.385 100 12838.5 0.02 99.9 N

64
1110000020 Concentrates Blue Colour Epvc Kg 371.117 25 9277.925 0.01 99.91 N
1600101020 Indion Ffir Resin [ Dm Water P Ltr 152.814 60 9168.84 0.01 99.92 N
1001623010 Potassium Sodium Tartrate Ar Kg 1022.715 8 8181.72 0.01 99.93 N
1720000000 Acetone-Hplc Grade Ltr 484.4 13.5 6539.4 0.01 99.94 N
1000103000 Ammonium Molybdate, Ar Grade ( Kg 6397 1 6397 0.01 99.95 N
1001900020 Soyabean Casein Digest Medium Kg 1340.333 4.5 6031.4985 0.01 99.96 N
1510010010 Water Hplc Grade Ltr 177.045 34 6019.53 0.01 99.97 N
1000610000 Fluid Thioglycollate Media H Kg 1329 4.5 5980.5 0.01 99.98 N
1000500000 Extran - E - Merk Ma 02 Ltr 114.612 50 5730.6 0.01 99.99 N
1210001010 Curing Agent Kg 5100 1 5100 0.01 100 N
1500900000 Ncidur Ltr 998.8 5 4994 0.01 100.01 N
1311030010 Pol Ypropyl E Ne-Grade-Am Kgs 72 50 3600 0 100.01 N
120n.Mfd
1510010040 Medisol/Spiritol/Surgicol/Unis Ltr 99.9 30 2997 0 100.01 N
1001921010 Common Salt Kg 4.65 525 2441.25 0 100.01 N
1001902000 Silic Gel Blue Kg 91.48 25 2287 0 100.01 N
1100000020 Nylon Suture For Copper-T Kg 828.035 2.302 1906.13657 0 100.01 N
1001900080 Sooyabean Casein Digest Agar Kg 2800 0.5 1400 0 100.01 N
1001924000 Sodium Hydroxide Pellets, Ar G Kg 230.333 4 921.332 0 100.01 N
1000305010 Cupric Sulphate, Ar Grade Cuso Kg 494.19 1.5 741.285 0 100.01 N
1001925010 Sodium Sulphite. Ar Grade Na2s Kg 343.333 2 686.666 0 100.01 N

65
1510100010 Mac Conkey Agar For Microbiolo Gm 3.218 200 643.6 0 100.01 N
1510010020 Methanol Specially Dried Lr (K Lit 374.5 1 374.5 0 100.01 N
1502600000 Zinc Grannular (No:20 Mesh) Kg 1476 0.25 369 0 100.01 N
1001920000 Sodium Chloride. Ar Grade Nacl Kg 132 1.5 198 0 100.01 N
1000101040 Acid Sulphuric Ar Ltr 155.314 0.5 77.657 0 100.01 N
1001305000 Methyl Red Solution, Lr Grade Ltr 381.36 0.125 47.67 0 100.01 N
1001300040 Magnesium Sulphate Ar Kg 338 0 0 N
1100000010 Suture Kg 525.302 0 0 N
1100000030 Copper Wire Diameter 0.32mm (M Kg 2025.137 0 0 0 N
1110001010 Masterbatch –Plunger Kgs 0 75 0 0 N
1320000001 Foil Stamping Imported Rol 726.354 0 0 N
1320010060 Dymax Md - Uv Cure Adhesive 11 Ltr 15327.69 0 0 N
1320010070 Odymax Md - Uv Cure Adhesive 1 Ltr 14800.32 0 0 N
1320030290 Needle Cover (Blood Bag) Nos 0 3830640 0 0 N
1320030310 Connector – Pvc No 0 2974000 0 0 N
1320030320 Recapable Needle Assembly Nos 2.276 0 0 N
1320030330 Transfusion Port - [4 Ur Nos 0 0 0 N
1320030350 Bov Sleeve (4 Up) Nos 0 0 0 0 0 N
1331100010 Adenine Lp \ Usp Kg 4817.75 0 0 0 N
Total 73085350 100

66
 TABLE 4.7: TABLE SHOWING FAST, SLOW & NON-MOVING ANALYSIS AND
ITS CLASSIFICATIONS

CONSN. VALUE NO OF % OF ITEM CLASS

MATERIAL
> 1,00,00,000 3 3.84 F
10,00,000 - 1,00,00,000 4 5.13 S
< 10,00,000 71 91.03 N
TOTAL 78 100

INTERPRETATION
The above table indicates that about 3.84% of the items belong to fast moving
category its consumption value will be greater than Rs.1,00,00,000, 5.13% of the items
belong to slow moving category and its consumption value will be between Rs.10,00,000 -
1,00,00,000 and about 91.03% of the items belong to non moving category and its
consumption value will be less than Rs.10,00,000.
FIGURE 4.3: FAST, SLOW & NON-MOVING (FSN) ANALYSIS AND ITS
CLASSIFICATION

FSN ANALYSIS
80
70
71
60
50
40
30 NO OF MATERIAL

20
10
3 4
0
> 1,00,00,000 10,00,000 - < 10,00,000
1,00,00,000

INTERPRETATION

F category includes 3 items, S category includes 4 items and N category includes 71

items.

67
4.6 VED ANALYSIS

VED- vital, essential & desirable- analysis is used primarily for control of raw material. The
spare parts can be divided into 3 categories- 1-Vital 2-Essential 3-Desirable Depending upon
their criticality for production.

The raw material, the stock-out of which even for a short time will stop productions for quite
some time are vital spares. The spares, the absence of which cannot be tolerated for more
than few hours or a day & which are essential for the production to continue, are essential
spares. The desirable spares are those spares which are needed but their absence for even a
week or so will not lead to stoppage of production.

68
 TABLE 4.8: TABLE SHOWING VITAL ESSENTIAL AND DESIRABLE (VED) ANALYSIS
Item Code Material Description Uom Rate Consn. Consn. Class
Qty Value
1500000050 Mannitol Reference Standard Us Gm 65663.95 285 18714225.75 V
1311010131 Pvc Pellets For Sheet Extrusio Kg 93.597 196625 18403510.13 V
1320030150 Pvc Sheet - For Blood Bag Kgs 180.259 64300 11590653.7 V
1311010121 Pvc Pellets For Tube Extrusion Kg 92.685 81625 7565413.13 V
1320030001 Needle Cannulas 16 G 46mm Impo Nos 1.447 4982500 7209677.5 V
1320010050 Loctrte 3339 -UV Adhesieve –Co LTR 27587 42 1158654 V
1110001000 Alatheon - (Tee Blend) Lbs 304.42 3500 1065470 V
1110004000 Polypropylene .Purell Hp 371 P Kg 177.525 5000 887625 V
1210001240 Silicone Rubber Tubing For Tub Ft 24.201 35000 847035 V
1331100060 Tri Sodium Citrate Ip/Usp Kg 97.096 8400 815606.4 E
1100000000 Wire-Copper 99.99 % Pure & 0.2 Kg 949.548 823.285 781748.63 E
1331100030 Dextrose Ip/Usp Kg 74.377 9770 726663.29 E
1320030230 Recappable Cover Nos 1.224 501500 613836 E
1320030060 Transfusion Port (Twist Off) Nos 0.135 3088000 416880 E
1210001360 Silicone Tubing-Codman Ft 46.731 5500 257020.5 E
1210001020 Silicone Rubber Tubing Mtr 41.668 5000 208340 E
1000102020 Isopropyl Alcohol, Lr Grade (C Ltr 90.003 2225 200256.68 E
1210001380 Reservoir Backing-Codman Nos 101.684 1790 182014.36 E

69
1210001120 Adhesive A Silastic Type Nos 1706.74 100 170674 E
1333100010 Mannitol Usp\B.P\Lp Kg 351.85 460 161851 E
1331100050 Sodium Dihydrogen Ortho Phosph Kg 166.643 800 133314.4 E
1311010190 Abs Pellets For Spike Kgs 163.54 700 114478 E
1331100020 Citric Acid Ip/Usp Kg 99.52 1075 106984 E
1210001340 Tantalum Powder For Codman Shu Gm 64.08 1362 87276.96 D
1320020050 Metal Finishing Compound-Sa50n Kg 1230.1 63 77496.3 D
1720100000 Loctite 4014 Gm 85.098 840 71482.32 D
1000101010 Hydrochloric Acid. Hclfw36. Ltr 48.19 1200 57828 D
1210001000 Silicone Rubber Kg 2856 20 57120 D
1110006010 Pellets - Hi Density Poly Ethe Kg 100.57 495 49782.15 D
1320020010 Cyclo Hexanone Ar Ltr 171.8 275 47245 D
1100000040 Copper Wire Diameter 0.40 Mm. Kg 2025.137 21.025 42578.51 D
1333100000 Sodium Chloride Usp \ Ip \ Bp Kg 50.68 750 38010 D
1600101010 INDION NIP RESIN F DM WATER PL LTR 170.855 160 27336.8 D
1000100020 Acetone, Extra Pure Lr Grade C Ltr 103.7 200 20740 D
1000302000 Caustic Soda Commercial 98 % Kg 40.573 500 20286.5 D
1001302010 Methylene Dl Chloride - Lr Gra Ltr 128.849 150 19327.35 D
1001300050 Methyl - Ethyl Ketone Ltr 108.634 175 19010.95 D
1600101000 Indion 225 H Resin [Dm Water P Ltr 64.734 200 12946.8 D
1110005000 Titanium Dioxide (Rutile) Gra Kg 128.385 100 12838.5 D

70
1110000020 Concentrates Blue Colour Epvc Kg 371.117 25 9277.93 D
1600101020 Indion Ffir Resin [ Dm Water P Ltr 152.814 60 9168.84 D
1001623010 Potassium Sodium Tartrate Ar Kg 1022.715 8 8181.72 D
1720000000 Acetone-Hplc Grade Ltr 484.4 13.5 6539.4 D
1000103000 Ammonium Molybdate, Ar Grade ( Kg 6397 1 6397 D
1001900020 Soyabean Casein Digest Medium Kg 1340.333 4.5 6031.5 D
1510010010 Water Hplc Grade Ltr 177.045 34 6019.53 D
1000610000 Fluid Thioglycollate Media H Kg 1329 4.5 5980.5 D
1000500000 Extran - E - Merk Ma 02 Ltr 114.612 50 5730.6 D
1210001010 Curing Agent Kg 5100 1 5100 D
1500900000 Ncidur Ltr 998.8 5 4994 D
1311030010 Pol Ypropyl E Ne-Grade-Am 120n.Mfd Kgs 72 50 3600 D
1510010040 Medisol/Spiritol/Surgicol/Unis Ltr 99.9 30 2997 D
1001921010 Common Salt Kg 4.65 525 2441.25 D
1001902000 Silic Gel Blue Kg 91.48 25 2287 D
1100000020 Nylon Suture For Copper-T Kg 828.035 2.302 1906.14 D
1001900080 Sooyabean Casein Digest Agar Kg 2800 0.5 1400 D
1001924000 Sodium Hydroxide Pellets, Ar G Kg 230.333 4 921.33 D
1000305010 Cupric Sulphate, Ar Grade Cuso Kg 494.19 1.5 741.29 D
1001925010 Sodium Sulphite. Ar Grade Na2s Kg 343.333 2 686.67 D
1510100010 Mac Conkey Agar For Microbiolo Gm 3.218 200 643.6 D

71
 1.5E+09 Methanol Specially Dried Lr (K Lit 374.5 1 374.5 D
1502600000 Zinc Grannular (No:20 Mesh) Kg 1476 0.25 369 D
1001920000 Sodium Chloride. Ar Grade Nacl Kg 132 1.5 198 D
1000101040 Acid Sulphuric Ar Ltr 155.314 0.5 77.66 D
1001305000 Methyl Red Solution, Lr Grade Ltr 381.36 0.125 47.67 D
1001300040 Magnesium Sulphate Ar Kg 338 0 D
1100000010 Suture Kg 525.302 0 D
1100000030 Copper Wire Diameter 0.32mm (M Kg 2025.137 0 0 D
1110001010 Masterbatch -Plunger Kgs 0 75 0 D
1320000001 Foil Stamping Imported Rol 726.354 0 D
1320010060 Dymax Md - Uv Cure Adhesive 11 Ltr 15327.69 0 D
1320010070 Odymax Md - Uv Cure Adhesive 1 Ltr 14800.32 0 D
1320030290 Needle Cover (Blood Bag) Nos 0 3830640 0 D
1320030310 Connector - Pvc No 0 2974000 0 D
1320030320 Recapable Needle Assembly Nos 2.276 0 D
1320030330 Transfusion Port - [4 Ur Nos 0 0 D
1320030350 Bov Sleeve (4 Up) Nos 0 0 0 D
1331100010 Adenine Lp \ Usp Kg 4817.75 0 D
TOTAL 73085350

72
TABLE 4.9: TABLE SHOWING VED ANALYSIS AND CLASSIFICATION

CLASS NO OF MATERIAL % OF
ITEMS
V 9 11.53
E 13 16.66
D 56 71.79
TOTAL 78 100

FIGURE 4.4: VED ANALYSIS AND CLASSIFICATION

80
71.79%
70
60
50
40
30
20 16.66%
11.53%
10
0
V E D

% OF ITEMS

INTERPRETATION

From the above analysis it is clear that the first 9 items account for Vital and it shows
11.53% of total items. Vital raw materials are those which may cause the stoppage of the
plant and service. Risk in operations is vital. The down time cost for want of these spares
will be very high. Therefore, these items are classified as class 'V’ items.
Another 13 items account for Essential and it shows 16.66% of total items. In the
absence of such materials, plant can run but perhaps at substandard performance level.
Therefore, these materials are classified as class ‘E’ items.
The remaining raw materials account for 71.79% that is 56 items. These are the raw
materials, whose non-availability may not adversely affect the plant performance but
increases the maintenance time. Therefore, these are classified as class ‘D’ items.

73
4.7 XYZ ANALYSIS

The XYZ classification is based on the value of inventory stored. It helps to control
obsolescence and tells how values are distinguished amongst materials in stores. If the values
are high, special efforts should be made to reduce them. This exercise can be done once a
year.
XYZ Analysis is always done for the current stock in inventory and aims at
classifying the items in to three classes on the basis of their inventory values.

It is used for reviewing the inventories, their uses, etc., at scheduled intervals.

74
 TABLE 4.10: TABLE SHOWING XYZ ANALYSIS
Item code Material description Uom Current Rate Stock value % Cum. Class
stock %
1320030001 Needle Cannulas 16 G 46mm Impo NOS 2546750 1.447 3685147.25 37.44 37.44 X
1311010131 Pvc Pellets For Sheet Extrusio KG 13914.52 93.597 1302357.328 13.23 50.67 X
1210001240 Silicone Rubber Tubing For Tub FT 30600 24.201 740550.6 7.52 58.19 X
1320030150 Pvc Sheet - For Blood Bag KGS 3160 180.259 569618.44 5.79 63.98 X
1311010121 Pvc Pellets For Tube Extrusion KG 6104 92.685 565749.24 5.75 69.73 X
1110004000 Polypropylene .Purell Hp 371 P KG 2685 177.525 476654.625 4.84 74.57 Y
1320010050 Loctrte 3339 -UV Adhesieve –Co LTR 14 27587 386218 3.92 78.49 Y
1331100010 Adenine Lp \ Usp KG 49.8 4817.75 239923.95 2.44 80.93 Y
1210001360 Silicone Tubing-Codman FT 5000 46.731 233655 2.37 83.3 Y
1320030230 Recappable Cover NOS 153700 1.224 188128.8 1.91 85.21 Y
1210001380 Reservoir Backing-Codman NOS 1750 101.684 177947 1.81 87.02 Y
1320030060 Transfusion Port (Twist Off) NOS 960000 0.135 129600 1.32 88.34 Y
1110001000 Alatheon - (Tee Blend) LBS 425 304.42 129378.5 1.31 89.65 Y
1210001020 Silicone Rubber Tubing MTR 3000 41.668 125004 1.27 90.92 Z
1100000000 Wire-Copper 99.99 % Pure & 0.2 KG 98 949.548 93055.704 0.95 91.87 Z
1331100060 Tri Sodium Citrate Ip/Usp KG 954 97.096 92629.584 0.94 92.81 Z
1320000001 Foil Stamping Imported ROL 120 726.354 87162.48 0.89 93.7 Z
1331100030 Dextrose Ip/Usp KG 918 74.377 68278.086 0.69 94.39 Z

75
1210001120 Adhesive A Silastic Type NOS 30 1706.74 51202.2 0.52 94.91 Z
1110000020 Concentrates Blue Colour Epvc KG 110.9 371.117 41156.8753 0.42 95.33 Z
1311010190 Abs Pellets For Spike KGS 200 163.54 32708 0.33 95.66 Z
1100000020 Nylon Suture For Copper-T KG 39.5 828.035 32707.3825 0.33 95.99 Z
1720100000 Loctite 4014 GM 340 85.098 28933.32 0.29 96.28 Z
1331100050 Sodium Dihydrogen Ortho Phosph KG 160 166.643 26662.88 0.27 96.55 Z
1001302010 Methylene Dl Chloride - Lr Gra LTR 175 128.849 22548.575 0.23 96.78 Z
1100000010 Suture KG 40 525.302 21012.08 0.21 96.99 Z
1100000030 Copper Wire Diameter 0.32mm (M KG 10.065 2025.137 20383.00391 0.21 97.2 Z
1210001340 Tantalum Powder For Codman Shu GM 300 64.08 19224 0.2 97.4 Z
1110006010 Pellets - Hi Density Poly Ethe KG 180.92 100.57 18195.1244 0.18 97.58 Z
1600101010 INDION NIP RESIN F DM WATER PL LTR 100 170.855 17085.5 0.17 97.75 Z
1320010060 Dymax Md - Uv Cure Adhesive 11 LTR 1 15327.69 15327.685 0.16 97.91 Z
1320010070 Odymax Md - Uv Cure Adhesive 1 LTR 1 14800.32 14800.315 0.15 98.06 Z
1001300050 Methyl - Ethyl Ketone LTR 125 108.634 13579.25 0.14 98.2 Z
1500000050 Mannitol Reference Standard Us GM 0.2 65663.95 13132.79 0.13 98.33 Z
1320030320 Recapable Needle Assembly NOS 4850 2.276 11038.6 0.11 98.44 Z
1100000040 Copper Wire Diameter 0.40 Mm. KG 5 2025.137 10125.685 0.1 98.54 Z
1320020010 Cyclo Hexanone Ar LTR 55 171.8 9449 0.1 98.64 Z
1331100020 Citric Acid Ip/Usp KG 92 99.52 9155.84 0.09 98.73 Z
1333100010 Mannitol Usp\B.P\Lp KG 25.5 351.85 8972.175 0.09 98.82 Z

76
1000302000 Caustic Soda Commercial 98 % KG 200 40.573 8114.6 0.08 98.9 Z
1000100020 Acetone, Extra Pure Lr Grade C LTR 75 103.7 7777.5 0.08 98.98 Z
1600101020 Indion Ffir Resin [ Dm Water P LTR 50 152.814 7640.7 0.08 99.06 Z
1001902000 Silic Gel Blue KG 75 91.48 6861 0.07 99.13 Z
1320020050 Metal Finishing Compound-Sa50n KG 5.5 1230.1 6765.55 0.07 99.2 Z
1000102020 Isopropyl Alcohol, Lr Grade (C LTR 75 90.003 6750.225 0.07 99.27 Z
1600101000 Indion 225 H Resin [Dm Water P LTR 100 64.734 6473.4 0.07 99.34 Z
1000103000 Ammonium Molybdate, Ar Grade ( KG 1 6397 6397 0.06 99.4 Z
1001900080 Sooyabean Casein Digest Agar KG 2 2800 5600 0.06 99.46 Z
1500900000 Incidur LTR 5 998.8 4994 0.05 99.51 Z
1000101010 Hydrochloric Acid. Hclfw36. LTR 100 48.19 4819 0.05 99.56 Z
1510010010 Water Hplc Grade LTR 25 177.045 4426.125 0.04 99.6 Z
1210001000 Silicone Rubber KG 1.5 2856 4284 0.04 99.64 Z
1001623010 Potassium Sodium Tartrate Ar KG 4 1022.715 4090.86 0.04 99.68 Z
1210001010 Curing Agent KG 0.8 5100 4080 0.04 99.72 Z
1000610000 Fluid Thioglycollate Media H KG 3 1329 3987 0.04 99.76 Z
1311030010 Pol Ypropyl E Ne-Grade-Am 120n.Mfd KGS 50 72 3600 0.04 99.8 Z
1333100000 Sodium Chloride Usp \ Ip \ Bp KG 61.52 50.68 3117.8336 0.03 99.83 Z
1001900020 Soyabean Casein Digest Medium KG 2 1340.333 2680.666 0.03 99.86 Z
1110005000 Titanium Dioxide (Rutile) Gra KG 20 128.385 2567.7 0.03 99.89 Z
1000500000 Extran - E - Merk Ma 02 LTR 15 114.612 1719.18 0.02 99.91 Z

77
1510010040 Medisol/Spiritol/Surgicol/Unis LTR 15 99.9 1498.5 0.02 99.93 Z
1000305010 Cupric Sulphate, Ar Grade Cuso KG 2.5 494.19 1235.475 0.01 99.94 Z
1000101040 Acid Sulphuric Ar LTR 7 155.314 1087.198 0.01 99.95 Z
2E+09 Methanol Specially Dried Lr (K LIT 2 374.5 749 0.01 99.96 Z
1001921010 Common Salt KG 150 4.65 697.5 0.01 99.97 Z
1720000000 Acetone-Hplc Grade LTR 1 484.4 484.4 0 99.97 Z
1502600000 Zinc Grannular (No:20 Mesh) KG 0.25 1476 369 0 99.97 Z
1510100010 Mac Conkey Agar For Microbiolo GM 100 3.218 321.8 0 99.97 Z
1001925010 Sodium Sulphite. Ar Grade Na2s KG 0.5 343.333 171.6665 0 99.97 Z
1001300040 Magnesium Sulphate Ar KG 0.5 338 169 0 99.97 Z
1001924000 Sodium Hydroxide Pellets, Ar G KG 0.5 230.333 115.1665 0 99.97 Z
1001920000 Sodium Chloride. Ar Grade Nacl KG 0.5 132 66 0 99.97 Z
1001305000 Methyl Red Solution, Lr Grade LTR 0.125 381.36 47.67 0 99.97 Z
1110001010 Masterbatch –Plunger KGS 20.8 0 0 0 99.97 Z
1320030290 Needle Cover (Blood Bag) NOS 329000 0 0 0 99.97 Z
1320030310 Connector – Pvc NO 1791517 0 0 0 99.97 Z
1320030330 Transfusion Port - [4 Up] NOS 696561 0 0 0 99.97 Z
1320030350 Bov Sleeve (4 Up) NOS 1074500 0 0 0 99.97 Z
TOTAL 9842218 100

78
 TABLE 4.11: TABLE SHOWING XYZ ANALYSIS AND ITS CLASSIFICATIONS

CLASS NO OF MATERIAL VALUES

X -High Stock 5 70
Y- Moderate Stock 8 20
Z-Low Stock 64 10

INTERPERTATION

From the above analysis it is understood that the first 5 items account for 70% of the total
inventory value which corresponds to X class and they are high stock, the next 8 items
account for 20% of inventory value are of Y class and they are moderate stock and the last
10% of the value corresponds to the Z class.

FIGURE 4.5: XYZ ANALYSIS AND ITS CLASSIFICATION

XYZ ANALYSIS
70

60

50

40

NO OF MATERIAL
30

20

10

0
X Y Z

79
 4.8 COMPREHENSIVE ANALYSIS OF RAW MATERIALS IN HLL LIFE CARE LIMITED
TABLE 4.12: TABLE SHOWING COMPREHENSIVE ANALYSIS OF RAW MATERIALS IN HLL LIFE CARE LIMITED
Item Code Material Description UOM RATE ABC VED XYZ FSN HML CLASS
1500000050 Mannitol Reference Standard Us Gm 65664 A V Z F H VH
1311010131 Pvc Pellets For Sheet Extrusio Kg 93.597 A V X F L VH
1320030150 Pvc Sheet - For Blood Bag Kgs 180.259 A V X F L VH
1311010121 Pvc Pellets For Tube Extrusion Kg 92.685 B V X S L H
1320030001 Needle Cannulas 16 G 46mm Impo Nos 1.447 B V Z S L M
1320010050 Loctrte 3339 -Uv Adhesieve -Co Ltr 27587 B V Y S H H
1110001000 Alatheon - (Tee Blend) Lbs 304.42 B V Y S L M
1110004000 Polypropylene .Purell Hp 371 P Kg 177.525 C V Y N L M
1210001240 Silicone Rubber Tubing For Tub Ft 24.201 C V X N L H
1331100060 Tri Sodium Citrate Ip/Usp Kg 97.096 C E Z N L L
1100000000 Wire-Copper 99.99 % Pure & 0.2 Kg 949.548 C E Z N L L
1331100030 Dextrose Ip/Usp Kg 74.377 C E Z N L L
1320030230 Recappable Cover Nos 1.224 C E Z N L L
1320030060 Transfusion Port (Twist Off) Nos 0.135 C E Y N L M
1210001360 Silicone Tubing-Codman Ft 46.731 C E Y N L M
1210001020 Silicone Rubber Tubing Mtr 41.668 C E Z N L VL
1000102020 Isopropyl Alcohol, Lr Grade (C Ltr 90.003 C E Z N L L
1210001380 Reservoir Backing-Codman Nos 101.684 C E Y N L M
1210001120 Adhesive A Silastic Type Nos 1706.74 C E Z N M M
1333100010 Mannitol Usp\B.P\Lp Kg 351.85 C E Z N L VL
1331100050 Sodium Dihydrogen Ortho Phosph Kg 166.643 C E Z N L VL
1311010190 Abs Pellets For Spike Kgs 163.54 C E Z N L VL
1331100020 Citric Acid Ip/Usp Kg 99.52 C E Z N L VL
1210001340 Tantalum Powder For Codman Shu Gm 64.08 C D Z N L VL
1320020050 Metal Finishing Compound-Sa50n Kg 1230.1 C D Z N M L
80
1720100000 Loctite 4014 Gm 85.098 C D Z N L VL
1000101010 Hydrochloric Acid. Hclfw36. Ltr 48.19 C D Z N L VL
1210001000 Silicone Rubber Kg 2856 C D Z N M L
1110006010 Pellets - Hi Density Poly Ethe Kg 100.57 C D Z N L VL
1320020010 Cyclo Hexanone Ar Ltr 171.8 C D Z N L VL
1100000040 Copper Wire Diameter 0.40 Mm. Kg 2025.14 C D Z N M L
1333100000 Sodium Chloride Usp \ Ip \ Bp Kg 50.68 C D Z N L VL
1600101010 Indion Nip Resin F Dm Water Pl Ltr 170.855 C D Z N L VL
1000100020 Acetone, Extra Pure Lr Grade C Ltr 103.7 C D Z N L VL
1000302000 Caustic Soda Commercial 98 % Kg 40.573 C D Z N L VL
1001302010 Methylene Dl Chloride - Lr Gra Ltr 128.849 C D Z N L VL
1001300050 Methyl - Ethyl Ketone Ltr 108.634 C D Z N L VL
1600101000 Indion 225 H Resin [Dm Water P Ltr 64.734 C D Z N L VL
1110005000 Titanium Dioxide (Rutile) Gra Kg 128.385 C D Z N L VL
1110000020 Concentrates Blue Colour Epvc Kg 371.117 C D Z N L VL
1600101020 Indion Ffir Resin [ Dm Water P Ltr 152.814 C D Z N L VL
1001623010 Potassium Sodium Tartrate Ar Kg 1022.72 C D Z N M L
1720000000 Acetone-Hplc Grade Ltr 484.4 C D Z N L VL
1000103000 Ammonium Molybdate, Ar Grade ( Kg 6397 C D Z N M L
1001900020 Soyabean Casein Digest Medium Kg 1340.33 C D Z N M L
1510010010 Water Hplc Grade Ltr 177.045 C D Z N L VL
1000610000 Fluid Thioglycollate Media H Kg 1329 C D Z N M L
1000500000 Extran - E - Merk Ma 02 Ltr 114.612 C D Z N L VL
1210001010 Curing Agent Kg 5100 C D Z N M L
1500900000 Ncidur Ltr 998.8 C D Z N L VL
1311030010 Pol Ypropyl E Ne-Grade-Am 120n.Mfd Kgs 72 C D Z N L VL
1510010040 Medisol/Spiritol/Surgicol/Unis Ltr 99.9 C D Z N L VL

81
1001921010 Common Salt Kg 4.65 C D Z N L VL
1001902000 Silic Gel Blue Kg 91.48 C D Z N L VL
1100000020 Nylon Suture For Copper-T Kg 828.035 C D Z N L VL
1001900080 Sooyabean Casein Digest Agar Kg 2800 C D Z N L VL
1001924000 Sodium Hydroxide Pellets, Ar G Kg 230.333 C D Z N L VL
1000305010 Cupric Sulphate, Ar Grade Cuso Kg 494.19 C D Z N L VL
1001925010 Sodium Sulphite. Ar Grade Na2s Kg 343.333 C D Z N L VL
1510100010 Mac Conkey Agar For Microbiolo Gm 3.218 C D Z N L VL
1510010020 Methanol Specially Dried Lr (K Lit 374.5 C D Z N L VL
1502600000 Zinc Grannular (No:20 Mesh) Kg 1476 C D Z N M L
1001920000 Sodium Chloride. Ar Grade Nacl Kg 132 C D Z N L VL
1000101040 Acid Sulphuric Ar Ltr 155.314 C D Z N L VL
1001305000 Methyl Red Solution, Lr Grade Ltr 381.36 C D Z N L VL
1001300040 Magnesium Sulphate Ar Kg 338 C D Z N L VL
1100000010 Suture Kg 525.302 C D Z N L VL
1100000030 Copper Wire Diameter 0.32mm (M Kg 2025.14 C D Z N M L
1110001010 Masterbatch –Plunger Kgs 0 C D Z N L VL
1320000001 Foil Stamping Imported Rol 726.354 C D Z N L VL
1320010060 Dymax Md - Uv Cure Adhesive 11 Ltr 15327.7 C D Z N H VL
1320010070 Odymax Md - Uv Cure Adhesive 1 Ltr 14800.3 C D Z N H VL
1320030290 Needle Cover (Blood Bag) Nos 0 C D Z N L VL
1320030310 Connector - Pvc No 0 C D Z N L VL
1320030320 Recapable Needle Assembly Nos 2.276 C D Z N L VL
1320030330 Transfusion Port - [4 Ur Nos 0 C D Z N L VL
1320030350 BOV SLEEVE (4 UP) NOS 0 C D Z N L VL

82
 TABLE 4.13: TABLE SHOWING COMPREHENSIVE ANALYSIS

CLASS NO OF MATERIAL % OF MATERIAL

VH-Very High Importance 3 3.84
H-High Importance 2 2.56
M-Moderate Importance 7 8.97
L-Low Importance 15 19.23
VL-Very Low Importance 51 65.38
TOTAL 78 100

INTERPERTATION
From the above comprehensive analysis table , it is understood that the first 3 items
account for 3.84% of the total inventory value which corresponds to VH ( Very High
Importance Items) class(Mannitol Reference Standard Us, Pvc Pellets For Sheet Extrusio,
Pvc Sheet - For Blood Bag ) and these items can revised frequently, and also having two or
more suppliers. There are 2 raw materials that is 2.56% of the total items which comes in H
class (High Importance Items), and these items must be revised once in a month and price
negotiations also need to be carried out.
Then there are M class (Moderate Importance Items) which consist of 7 materials
with a percentage of 8.97 items. Then there are 15 raw materials which comes under L
class(Low Importance Items) it consisting of 19.23% of items. Then the balance 51 raw
materials comes under VL class(Very Low Importance Items) it consisting of 65.38% of the
total raw material.

FIGURE 4.6: COMPREHNSSIVE ANALYSIS

% OF MATERIAL
VH H M L VL

4% 3%

9%

19%

65%

83
4.9 ANALYSIS OF PRODUCTION & INVENTORY

TABLE 4.14: TABLE SHOWING ANALYSIS OF PRODUCTION & INVENTORY

NAME PRODUCTION INVENTORY (INV/PROD)*100

2011 2010 2009 2011 2010 2009 2011 2010 2009
Copper T Million 4.51 4.05 3.77 0.08 0.04 0.01 1.77 0.99 0.27
Pcs
Tubal Ring Million 1.25 1.51 1.5 0.01 0.01 0 0.8 0.66 0
Pcs
Blood Bag Million 6.42 8.21 6.85 1.12 0.79 0.22 17.45 9.62 3.21
Pcs
Tissue Pieces 0 2 16 0 0 95 0 0 593.8
Expander
Suture Dozens 81964 70,715 74251 44,341 37,818.00 35,118 54.1 53.48 47.3
Hydrocephalus Pieces 6208 7,199 5984 1,640 936 1,404 26.42 13 23.46
Shunt

INTERPERTATION

From the above analysis it is understood that the ratio of inventory and production in 2011
of all 6 materials are higher while compare to last two years. But the tissue expander
production has been stopped in the year 2011,but ratio shows that copper T is 1.77,tubal
ring as 0.8 and the blood bag shows 17.45,suture shows 54.1 and Hydrocephalus Shunt
shows 26.42. In 2011 higher the proportion goes to suture that is 54.1. from the ratio of
production and inventory in 2010 all the material is less than 2011’s ratio. The main
variation can be identified on Hydrocephalus Shunt 13 to 26.42 ratio on 2010 and2011
respectively. In the year 2009 Hydrocephalus Shunt shows 23.46 and there is a high decline
in the year 2010. For the Tissue Expander ratio shows 593.8 then in 2009, then later years it
shows 0 in the later years.

84
FIGURE 4.7: FIGURES SHOWING TREND OF INVENTORY AND PRODUCTION
FOR THREE YEARS

2011
Copper T Tubal Ring Blood Bag
Tissue Expander Suture Hydrocephalus Shunt
1.77% .8%
26.42% 17.45%
0%

54.1%

2010
Copper T Tubal Ring Blood Bag
Tissue Expander Suture Hydrocephalus Shunt
.99% .66% 9.62%
0%
13%

53.48%

0% 2009 0%

Copper T Tubal Ring Blood Bag

Tissue Expander Suture Hydrocephalus Shunt
7% 4% 0%

89%

85
 4.12 ANALYSIS OF THE TREND OF INVENTORY WITH SALES
TABLE 4.15: TABLE SHOWING ANALYSIS OF THE TREND OF INVENTORY
WITH SALES
YEAR INVENTORY TREND YEAR SALES TREND
2008 6,95,00,039.37 100 2008 35,65,84,582.15 100
2009 8,98,74,327.58 129.31 2009 41,91,37,981.61 117.54
2010 11,31,50,718.55 162.80 2010 40,81,94,301.05 114.47
2011 11,86,12138.65 170.66 2011 39,13,42,371.52 109.74

INTERPERTATION

From the above analysis it is understood that the trend of inventory & sales, in year 2008 both
sales & inventory is assumed a value of 100 for calculation of trend. In the next year the
inventory trend is shown as 129.31 and that of sales is 117.54. but in 2009-2010 there is a
33.49 increase in the inventory and It reaches 162.8, but in the same year there is a slight
decrease in the sales and it reaches 114.47. in 2011 there is a slight increase in the inventory
and touches 170.66, but at the same time sales dips 4.73 like the previous year.

FIGURE 4.8: ANALYSIS OF THE TREND OF INVENTORY WITH SALES

180
160
140
120
100
INVENTORYTREND
80
SALES TREND
60
40
20
0
2008 2009 2010 2011

86
5.1 FINDINGS:

 From the ABC analysis it is clear that the first 3 items account for 66.65% of the raw
material. Therefore, these items are classified as class 'A’ items.
 Another 4 items account for 77-89.91% of the raw material. Therefore, these raw
materials are classified as class ‘B’ items.
 The remaining raw materials account for 91.12-100% of the raw material. Therefore,
these are classified as class ‘C’ items.
 Though 9% increase in sales the inventory has been increased by 70%, so inventory
has be reduced for the 3 items(Mannitol Reference Standard Us, Pvc Pellets For Sheet
Extrusio, Pvc Sheet - For Blood Bag).
 From the EOQ table showing the economic ordering quantity of important 10 raw
materials. Here these materials arranged in descending order on the basis of
consumption quantity. Economic order quantity of these raw materials order can be
placed on the basis of table, then it will be more economical for the organization.
 From the HML analysis it is clear that the first 4 items rate greater than Rs.10,000
account for 5.13% of these items are classified as class 'H’ value .
 Another 13 items are between Rs.1,000-10,000 account for 16.67% of the items are
classified as class ‘M’ value.
 The remaining raw materials is less than Rs.1,000 account for 78.21% of the items are
classified as class ‘L’ value.
 The FSN analysis indicates that about 3.84% of the items belong to F=fast moving
category its consumption value will be greater than Rs.1,00,00,000.
 5.13% of the items belong to S= slow moving category and its consumption value
will be between Rs.10,00,000 - 1,00,00,000 and about 91.03% of the items belong to
N= non moving category and its consumption value will be less than Rs.10,00,000.
 From the VED analysis it is clear that the first 9 items account for Vital and it shows
11.53% of total items. Vital raw materials are those which may cause the stoppage of
the plant and service. Risk in operations is vital. The down time cost for want of
these spares will be very high. Therefore, these items are classified as class 'V’
items.
 Another 13 items in VED analysis account for Essential and it shows 16.66% of total
items. In the absence of such materials, plant can run but perhaps at substandard
performance level. Therefore, these materials are classified as class ‘E’ items.

87
 The remaining raw materials in VED analysis account for 71.79% that is 56 items.
These are the raw materials, whose non-availability may not adversely affect the plant
performance but increases the maintenance time. Therefore, these are classified as
class ‘D’ items.
 From the XYZ analysis it is understood that the first 5 items account for 70% of the
total inventory value which corresponds to X class and they are high stock, the next 8
items account for 20% of inventory value are of Y class and they are moderate stock
and the last 10% of the value corresponds to the Z class.
 From the Comprehensive Analysis table it is understood that the first 3 items account
for 3.84% of the total inventory value which corresponds to VH ( Very High
Importance Items) class(Mannitol Reference Standard Us, Pvc Pellets For Sheet
Extrusio, Pvc Sheet - For Blood Bag ) and these items can revised frequently, and
also having two or more suppliers.
 There are 2 raw materials that is 2.56% of the total items which comes in H class
(High Importance Items), and these items must be revised once in a month and price
negotiations also need to be carried out.
 In the comprehensive analysis table shows that there are M class( Moderate
Importance Items) which consist of 7 materials with a percentage of 8.97 items.
 Then there are 15 raw materials which comes under L class(Low Importance Items) it
consisting of 19.23% of items.
 Then the balance 51 raw materials comes under VL class(Very Low Importance
Items) it consisting of 65.38% of the total raw material in the comprehensive analysis.
 From the Ratio of Inventory and Production in 2011 of all 6 materials are higher
while compare to last two years.
 But the tissue expander production has been stopped in the year 2011,but ratio shows
that copper T is 1.77,tubal ring as 0.8 and the blood bag shows 17.45,suture shows
54.1 and Hydrocephalus Shunt shows 26.42.
 In 2011 higher the proportion goes to suture that is 54.1. From the ratio of production
and inventory in 2010 all the material is less than 2011’s ratio.
 The main variation can be identified on Hydrocephalus Shunt 13 - 26.42 ratio on 2010
and2011 respectively. In the year 2009 Hydrocephalus Shunt shows 23.46 and there is
a high decline in the year 2010. For the Tissue Expander ratio shows 593.8 then in
2009, then later years it shows 0 in the later years.

88
 From the Ratio of Inventory & Sales analysis, it is understood that the trend of
inventory & sales in year 2008 both sales & inventory shows 100 as their trend.
 In the next year the inventory trend is shown as 129.31 and that of sales is 117.54. But
in 2009-2010 there is a 33.49 increase in the inventory and It reaches 162.8, but in the
same year there is a slight decrease in the sales and it reaches 114.47.
 In 2011 there is a slight increase in the inventory and touches 170.66, but at the same
time sales dips 4.73 like the previous year.
 From the Comprehensive Analysis table it is understood that the first 3 items account
for 3.84% of the total inventory value which corresponds to VH ( Very High
Importance Items) class and these items can revised frequently, and also need two or
more suppliers. For these 3 items need a frequent check and also ensure its
availability.
 There are no productions for Tissue Expander in the year 2011, so find the reason
behind the stoppage of that material.

89
5.2 RECOMMENDATIONS

 The management should give due attention to ABC techniques of inventory

classification. ABC analysis should be periodically reviewed so that changes in prices
and consumption are taken into account.
 Focus should be on A Class items (3) because total value is 66.65% of the annual
consumption.
 The company should follow selective inventory control techniques.

 Inventory has be reduced for the 3 items such as Mannitol Reference Standard Us,
Pvc Pellets For Sheet Extrusio, Pvc Sheet - For Blood Bag.

 From the analyzed data through HML, company has to give more attention on high
value and medium value item
 It is recommended that the Stores department may make use of computers for
recording store transactions, since it will be more accurate easy retrieval system and
reduction of manpower.

 New software should be developed to meet the entire requirements of the inventory
department

 The company should give training to the persons in the context of SAP soft ware and
inventory management.

 By exercising control over only 3 items (Mannitol Reference Standard Us, Pvc Pellets
For Sheet Extrusio, Pvc Sheet - For Blood Bag), as much as 66.65% of the value
would be controlled.

 The FSN analysis should be done every year. Non moving samples and obsolete
inventory items constitute a sizeable value; it should be disposed off immediately.
 For high value items(Mannitol Reference Standard Us, Loctrte 3339 -Uv Adhesieve –
Co, Dymax Md - Uv Cure Adhesive 11, Odymax Md - Uv Cure Adhesive 1) price
negotiation must be done carefully, these items can be chose from HML analysis
table.
 For V (vital)( Mannitol Reference Standard Us, Pvc Pellets For Sheet Extrusio, Pvc
Sheet - For Blood Bag, Pvc Pellets For Tube Extrusion, Needle Cannulas 16 G 46mm

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 Impo, Loctrte 3339 -UV Adhesieve –Co, Alatheon - (Tee Blend), Polypropylene
.Purell Hp 371 P and Silicone Rubber Tubing For Tub) items, a critical check should
be made and also ensure that V items are available in stock, otherwise it may affect
the entire production.
 The company must make necessary arrangements for decreasing the percentage of
raw materials and spare parts to inventory.
 From the Comprehensive Analysis table it is understood that the first 3 items account
for 3.84% of the total inventory value which corresponds to VH ( Very High
Importance Items) class and these items can revised frequently, and also need two or
more suppliers. For these 3 items need a frequent check and also ensure its
availability.
.

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5.3 CONCLUSION

Inventories occupy a dominant position in every organization and it must be

efficiently managed. Raw materials constitute a large portion of inventories. Its efficient
management is compulsory in achieving the desired plant availability at an optimum cost. An
efficient management of the inventory plays a vital role in success of any organization. The
objective of inventory management was to maintain optimum level of inventory, so that the
cost of production can be reduced. Inventory makes a significant contribution to the
operational efficiency and profitability of the enterprises. And so, it is very essential to
reduce the amount of capital locked-up in inventories. Operating efficiency of the raw
materials inventory can be optimized if raw materials inventories are handled properly and
effectively. Here, the company’s inventory management position of raw materials is
favorable. But the company now only implemented SAP software in the entire organization
it will help inventory management techniques on raw materials. The study is concluded that
the existing system of inventory management is only in satisfactory level and needs
improvement in all dimensions.

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