A STUDY OnINVENTORY MANAGEMENT,AtKESORAM CEMENTS LTD. ReportSubmitted In PartialFulfillmentoftheRequirementsfor theAwardOf MASTER OF BUSINESS ADMINISTRATIONSUBMITTEDBY CH.TrinathH.T.

NO, 4122 - 0 9 - 6 7 2 - 021 Under The Esteemed Guidance Of Mr .N.R.B.CHARYULU M.B.A FACULTYOFFINANCE. OsmaniaUniversity MADHIRA INSTITUTE OF TECHNOLOGY & SCIENCESKodad, Nalgonda (DiST)OsmaniaUniversity (2009-11)

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A STUDY OnINVENTORY MANAGEMENT,AtKESORAM CEMENTS LTD. ReportSubmitted In Partial FulfillmentoftheRequirements for theAwardOf MASTER OF BUSINESS ADMINISTRATIONSUBMITTEDBY CH.TrinathH.T. NO, 4122 - 0 9 - 6 7 2 - 021 Under The Esteemed Guidance Of Mr .N.R.B.CHARYULU M.B.A FACULTY OF FINANCE. OsmaniaUniversity MADHIRA INSTITUTE OF TECHNOLOGY & SCIENCESKodad, Nalgonda (DiST)OsmaniaUniversity (2009-11)

CERTIFICATE This is to certify that CH.TRINATH bearing Hall TicketNo.4122-09-672-021 is student of our college. Studying MBA Finalyear has successfully completed his project work entitled INVENTORY MANAGEMENT in KESORAM CEMENTS Ltd. , XXXXXXXXX .T h i s p r o j e c t i s s u b m i t t e d i n p a r t i a l f u l f i l l m e n t f o r t h e requirement of the award of the degree of MASTER OFBUSINESS ADMINISTRATION . H E A D O F T H E D E P A R T M E N T P R I N C I P A L EXTERNAL GUIDE DECLARATION I hereby declare that this training undergone in the INVENTORY MANAGEMENT i n t h e f i n a n c e a n d A c c o u n t s Department of KESORAM CEMENTS LTD. Nalgonda. Hadbeen undertaken and presented by me during the year 2010 inthe partial fulfillment of the master degree in BusinessAdministration.I also declare that this report and its content are original work and are based in the information collected by me during thetraining period.DATE:PLACE: CH.TRINATH

ACKNOWLEDGEMENT

The preparation of this project has mauled services of manyexecutives of the company. I whole heart is thank to one and allwho helped me a lot in getting this project work donesuccessfully completed.F i r s t I e x p r e s s m y g r a t i t u d e to the management of KESORAM CEMENTS LTD . , f o r t h e i r c o n s e n t t o u n d er g o m y project work.I also express my sense of gratitude to our project guideMr. N.R.B.CHARYULU Lecturer in MITS College Who helped a lotduring the course of project report.Lastly I should thanks to my friends and family members in getting my project work successfully. CH.TRINATH CONTENTS CHAPTER I Page NosI N T R O D U 1 4 NEED FOR THE STUDY OBJECTIVES SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATIONSC H A R I 5 2 8 INDUSTRY PROFILE& COMPANY PROFLEC H A P I I I 4 6

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THEORTICAL FRAME WORK C H A P I V 6 6 DATA ANALYSIS & INTERPRETATIONC H E R 6 7 6 FINDINGS & SUGGESTIONS BIBILIOGRAPHY

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CHAPTER-ICHAPTER-IINTRODUCTIONINTRODUCTION INTRODUCTION Inventory management is concern with the determination of optimum level of i n v e s t m e n t f o r e a c h c o m p o n e n t s o f i n v e n t o r y a n d t h e e f f i c i e n t u s e o f components and the operation of components and the operation of an effectivec o n t r o l a n d r e v i ew o f m e c h a n i s m . T h e m a i n o b j e c t i v e s m a n a g e m e n t i s operational and financial.T h e o p e r a t i o n a l objective mean the materials and the spares should beavailable in sufficient quantity so that work is not d i s r u p t e d fo r w a n t o f inventory.The financial objectives mean that the material and spares should be availablein sufficient quantity so that work is not disrupted for want of inventory. Theobjective of this project is to learn the importance of Inventory Managementin todays business scenario. MEANING AND NATURE OF INVENTORY:In accounting language, inventory may mean the stock of finished goods only. In a manufacturing concern, it may include raw materials, work-in-progress and stores etc. Definition:Material management is the flow of materials into an organization to the pointwhere those materials are converted into the firms end product(s). Bailey & Farmer.

NEED & IMPORTANCE OF STUDY: T h i s p r o j e c t i s v er y i m p o r t a n t a s w e l l a s i t i s t h e n e e d f o r s t u d y i n g BMS. This project helps us in understanding the basic concepts of how theinventory management plays vital to minimize the costs and maximize thep r o f i t s . I t a l s o g i v e s u s t h e e x p e r i e n c e o f h o w t o m a k e a g o o d p r o j e c t report with collecting all the data and sorting it out. SIGNIFICANCE: This project signifies the importance of the Inventory Management tominimize the costs and maximize the profits. It is the final word or the final report of the study or research done on the Project. Objectives of the study: To examine the organization structure of inventory managementin the stores of KESORAM CEMENTS Ltd. To discuss pattern, levels and trends of inventories in KCL. To understand the various inventory control techniques followedby stores in KCL. To access the performance of inventory management of the KCLby selected accounting ratios. To know the inventory control techniques of KCL.

METHODOLOGY OF THE STUDY Sampling techniques There are two basis alternative approaches to sample selectionnamely. Probability sampling

Non-probability sampling.The executives related to all departments were interviewed onthe basis of judgment and convenience of the interviewer whichh e l p e d t h e i n t e r v i e w e r t o g e t a c c u r a t e a n d u n d e r s t a n d t h e opinion of the officers and executives. Source of Data The methodology Is to study the inventory perception towardsCement company with special reference to Sagar Cement itContains. Primary data Secondary data Primary Data Primary data has been collected with the help of the p e r s o n questionnaires , interviews, enquiry, observations designed and developed for this purpose. The questionnaires has been suppliedto all theOfficers/ executives to edit the required information. Interviewingt e c h n i q u e a n d p e r s o n a l o b s er v a t i o n h a s b e e n u s e d simultaneously to make the study exact and relevant. Secondary Data This data has been collected from previous published records like Annual reports inventory reports, printed statements do thecompany like wed site etc.Limitations Time Period:The study was carried in Kesoram Cements Limited for a period of 45DAYS. Limitations:The study has the following limitations: The study is limited only for a period of 5 years i.e., from 2005-06 to 2009-10. There may be approximations. The study is purely based on secondary data.

 The time span that is 45 days which it has became difficultto collect all the information. From the concern departments. CHAPTER-IICHAPTER-IIINDUSTRY PROFILEINDUSTRY PROFILE&&COMPANY PROFILECOMPANY PROFILE INDUSTRY PROFILE The Cement industry has carried out a niche s i g n i f i c a n t c o n t r i b u t i o n i n t h e industrial map of the country by its spectacular and impressive growth. The cement plays avital role in peoples life. The market condition for cement is more competitive as manynumbers of companies in the private sector is entering into the market It is one of the most i m p o r t a n t c o n s t r u c t i o n m a t e r i a l a n d i t a n e s s e n t i a l p r o d u c t , c r u c i a l t o t h e s e c t o r s o f o u r economy such as agriculture, industries, defense, constructions and households.In 1824, an English bricklayer Joseph aspolin improved upon the verity of cement known as Portland cement. The name Portland cement arises from the fact that it resemblesthe colour of a building stone that comes from Portland England.Cement is used for: Concrete for laying floors, roofs and constructing lintels, beams, weather sheds, stands pillars etc., Construction of important engineering structures such as bridges, culverts, dams, tunnels, lighthouses and docks etc., Construction of water tanks, wells, tennis courts, septic tanks, lamp posts, roads, telephone cables etc., Making joints for drains, pipes etc., Preparation of foundations, watertight floors, footpaths etc., Manufacture of recast pipes, piles garden seats artistically designed urns, flower pots, dustbins, tensing posts etc.,

TYPES OF CEMENT The following are the various types of cements.1. Ordinary Portland cement (33 grade, 43 grade and 53 grade )2 . Portland Pozzolana cement3. Portland Blast Furnace Slag cement4. Rapid hardening cement5. Sulphate Resisting Portland Cement 6 . O i l w e l l C e m e n t 7. Low heat Portland cement 8 . H y d r o p o l i c c e m e n t 9 . W h i t e c e m e n t CEMENT MANUFACTURING ASSOCIATION Is the apex body of cement manufactures in India, e s t a b l i s h e d i n 1 9 6 1 w i t h 1 7 members companies, now is has 57% cement companies as member having 115 cementplants . Both the private and public sector cement units its members. It is registered under t h e s o c i e t y s r e g i s t r a t i o n A c t w i t h i t s r eg i s t e r e d o f f i c e i n N e w D e l h i a n d b r a n c h o f f i c e Mumbai. The following are the main objectives and services of CMA Objectives To promote the growth of the cement interest To promote the customer interest To identify newer application of cement usage

CEMENT INDUSTRY IN INDIA The Cement industry in India has come a long way s i n c e 1 9 1 4 , w h e n t h e f i r s t cement plant was commissioned with a production level of 1000 tons/ annum. The first trueP o r t l a n d c e m e n t w a s m a n u f a c t u r e d i n C a l c u t t a p r e s e n t l y c a l l e d a s K o l k a t a . I n d i a i s t h e second largest cement producer in the world. As cement is a basic construction material with virtually no substitute, it is used worldwide for all construction work. Thus the growthin the construction industry has a direct relation with the production and consumption of cement. India is the second largest cement producer in the world with a production level of

about 99 million tons (about 5% of world production ~ 2000 million tons). The installedcapacity is about 119 million tones and at an expected 10 % growth rate the production is likely to grow to about 158.5 million tons at the end of 20062007.O v e r t h e y e a r s , t h e g r o w t h o f t h e i n d u s t r y h a s been uneven. With traditionallycement deficit regions c o v e r i n g t h e m o s t o f t h e m a j o r g r o w t h c e n t er s o f t h e c o u n t r y . Cement industry in India has made tremendous strides in technological up gradation andassimilation of latest technology. At present ninety three per cent of the total capacity in the industry is based on modern and environment-friendly dry process technology and onlyseven per cent of the capacity is based on old wet and semi-dry process technology. The major players of Indian cement industry are Madras cements, ACC, India cements, GujaratAmbuja , Ultratech , Grasim, JK group, Jaypee group, Century textiles, Birla Corporation, Lafarge.There is tremendous scope for waste heat recovery in cement plants and therebyreduction in emission level. Cement plants in the country have mostly changed from thewet process to the energy efficient dry process. In India, the cement factories are localizedin the states of Tamil Nadu, Madhya Pradesh, Gujarat, Bihar, Rajasthan, Karnataka and Andhra Pradesh. CEMENT INDUSTRY IN ANDHRA PREADESH: Cement industry is the most important the largest expending industry in AndhraPradesh. It plays a vital role in development of state. Andhrapradesh is having a l l t h e necessary natural resources required to produce cement large quantities. The state standsfirst in the country so far as limestone deposits are concerned. Out of approximate 90000about 30000 million tones are available in Andhra Pradesh which account for 34% in the total limestone deposits.A n d h r a P r a d e s h c e m e n t i n d u s t r y s t a r t e d i n y e a r 1 9 3 9 . T h er e w er e t w o c e m e n t p l a n t s o p e n e d o n e w a s a t V i j a y a w a d a a n d a n o t h er w a s a s s o c i a t e d c e m e n t c o m p a n y i n Tadepally , Guntur district in 1939. As on 31

st march2005, there are 8 large scale cement u n i t s w i t h a n d installed capacity of 16 million tones and 24 mini c e m e n t s a n d g r i n d i n g units with an installed capacity of three million tones producing various types of cement in Andhra Pradesh. In these 18 large cement plants, only two cement units under public sector c o r p o r a t i o n I . e . , c e m e n t corporation of India plants situated in Adilabad and Tandur inRangareddy district. The entire Andhra Pradesh cement industry concentrated in thed i s t r i c t s of Adilabad, Nalgonda, and Cuddappah which are h a v i n g t o t a l l i m e s t o n e s reserves . Andhrapradesh is having two lime stones deposits cluster viz., Yerraguntla and Nalgonda. Ten are major and 11 mini cement plants situated in Nalgonda district.A s o n 3 1 st march, 1998 the Andhrapradesh total major cement u n i t s i n s t a l l e d capacity was only 12.60 million tones and this increased to 16million tones at the end of t h i s y e a r because two cement major units L&T, Visakha c e m e n t p l a n t s s t a r t e d t h e i r operations with installed capacities of 2 million tones and 1 million tones and the existent m a r k e t l e a d e r R a a s i c e m e n t l i m i t e d . E x p a n d i n g t h e i r c a p a c i t y w i t h a n o t h e r 2 0 m i l l i o n tones. The mini cement plant sector also having an installed capacity of 2.5 million tones. B y t h e e n d o f t h i s y e a r t h e total Andhrapradesh cement industry installed capacity hasreached to 18.5 million tones. The total p r o d u c t i o n o f e n t i r e A n d h r a p r a d e s h c e m e n t industry is approximate 12 million tones. In this the major cement plants contribution was10.5 million tones where as the mini cement plants only producing the approximate 1.58million tones. The cement consumption of Andhrapradesh is only 6 million tones. In 1997-98 and this figure has increased to 7 million tons by the end of 1998 because of various d e v e l o p m e n t p r o g r a m t a k e n u p b y t h e s t a t e g o v e r n m e n t a n d t h e i n d u s t r y s d y n a m i c promotional activities.The cement configuration in the state has been

observing steady growth. In 1996-97t h e c e m e n t t h e c o n s u m p t i o n w a s o n l y 4. 8 7 m i l l i o n t o n s a n d t h e f u r t h er c o n s u m p t i o n i n c r e a s e d t o 5 . 8 7 m i l l i o n t o n s . As far as production and consumption is c o n c u r r e n t , Andhrapradesh cement industry performance increased its 5.29% and 8% respectively inthe year 199697. This percentage increase is very low when compared to national averagei.e 8.5% because in this no production activity from the newly erected plants as well as the existing plants which are increased their installed capacity. One more reason for this type if low growth rate was number of new plants and the existing plants which were increasingtheir capacities started their production in various parts of our country the cement exportsin the year 1992-93, 36,200 tons exported to Bangladesh and some other countries and thisexport figure increased to 1, 35,000 tons in 1993-94, there is only 10,000 tons of cement e x p o r t e d t o B u r m a from Vishakhapatnam. The following are the major c o n t r i b u t o r s o f cement industry in Andhra Pradesh.1. Madras Cements Limited2. India Cements Limited3. Zuari cements limited Technology Trends: Resin and fiber reinforcement manufacturers are r e f i n i n g t h e i r p r o d u c t s t o a l l o w fabricators to more easily process their raw materials into composites. This will allow the industry to expand composite applications by reducing manufacturing costs.Low shrink thermoset resin formulations are being developed to enable fabricators toabandon some of the arcane production practices needed to compensate for current resin characteristics.With the exception of one or two recent developments, most of the polyester resins usedin the composites industry were developed 20 to 40 years ago. Resin manufacturers nowrecognize the need to invest more fully in product innovations.A l a r g e p e r c e n t a g e o f c u r r e n t o f f - t h e s h e l f r es i n f o r m u l a t i o n s w i l l b e c o m e o b s o l e t e under practices specified in Maximum Allowable Control Technology (MACT).R e s i n s p e c i f i c s t y r e n e s u p p r e s s a n t s a r e b ei n g developed that eliminate secondaryb o n d i n g problems. If the bonding issue can be addressed,

the use of suppressanttechnology will be far more useful to a wider segment of the industry. S t y r e n e suppressant additives are tremendously effective in reducing emissions. A suppressant that works well with a specific resin may not be effective in an orthophthalic resin, or ana d d i t i v e t h a t w o r k s w e l l w i t h a n i s o p h t h a l i c r es i n m a y b e l e s s e f f e c t i v e w i t h a n o t h e r formulation.The next generation of thermoset resins will be low emitting Hazardous Air Particulate (HAP), and have wider handling parameters than current materials. Efforts are underway topull together packages of resins, suppressants, and required handling procedures from a systems perspective for fabricators.E p o x y r e s i n s m a y r e p l a c e t h e c u r r e n t d o m i n a n t r e s i n ( p o l y e s t er ) i n p r o d u c t i o n o p e n molding . Non-atomized flow applicators are perfectly capable of handling many epoxies ,and would solve the problem that epoxies dont spray well. Nanocomposites are expectedto find significant applications in stronger but lighter weight automotive parts, enhancedgas -barrier properties in packaging, and improved flame- retardance . Gel coats are being d e v e l o p e d t h a t a r e m o r e t o l e r a n t o f t h i c k n e s s v a r i a t i o n s o t h a t l o w - t e c h b r u s h o r r o l l e r application could be used in place of atomized spraying.The non-atomized dispensing of gel coat will reduce environmental emissions. G e l c o a t m a n u f a c t u r e r s h a v e m a d e s o m e r e a l p r o g r e s s i n d e v e l o p i n g l o w m o n o m e r products, with specialized formulations available in the 28% -33% range . Low emitting or non-HAP gel coats will play a major role in environmental regulatory compliance.Ciba Specialty Chemicals and Boeing developed a soft-tooling technique for the fastfabrication of close-tolerance composite parts at a cost up to 70% less than conventional mold making methods.Low Cost Tooling for Composites (LCTC) utilizes seamless epoxy patties to build lay-up tools, The epoxy compound is o vencured and can then be quickly CNC machined to p r o d u c e lightweight, extremely accurate, dimensionally stable t o o l s f o r f a b r i c a t i n g prepare prototypes and short-run parts in an autoclave. Equipment manufacturers

aredeveloping better resin spray gun and flow applicators to reduce overspray and lower emissions.C u r r e n t equipment, including the gun, lines and force needed t o p u l l t h e l i n e s , i s t o o heavy . The lines are too stiff to allow the precise gun control required for high quality application. New equipment reduces system weight and makes fluid lines more flexible.C o n t i n u e d d e v e l o p m e n t o f non-atomized fluid tip flow applicators in place of s p r a y technology.Lower environmental emissionsInnovations involving the use of fluid impingement technology, dynamic mechanicalfluid tips, or the use of ultrasonic energy to reduce particle agglomeration characteristic o f m u l t i p l e orifice flow nozzles Oriented Flow Chop c o u l d b e t h e n e x t m a j o r advancement in open mold fabrication. One aspect of flow chopping is t h a t t h e electrostatic charge at the gun seems to be h i g h er , a n d m o r e d i f f i c u l t t o d i s p e r s e , a s compared to traditional spray application.If the chop alignment could be enhanced, it would be possible to apply fiber oriented in one direction.E a c h p l y o f c h o p c o u l d b e o r i e n t e d i n a specific direction, thus providing similar mechanical properties as the fabrics used in hand layu p . B e t t e r p r o c e s s m o n i t o r i n g equipment is being developed to enhance product quality.The integration of accurate flow meters in application equipment, coupled with easily a c c e s s i b l e b a r c o d e t e c h n o l o g y , w i l l a l l o w operators to apply exactly t h e r i g h t o f material to a variety of mold sizes and shapes. There will be a general phasing out of high monomer resins, except in applications where they are absolutely required. Either by regulation, or by waning customer ability to use traditional formulations, manylong time workhorse formulations will go by the wayside by 2003 2005. National Trends: The defense market was the first segment served by the composite industry, providing a p p l i c a t i o n s f o r m i l i t a r y and aerospace parts since the 1960's. Recent cutbacks

i n d e f e n s e s p en d i n g h a v e h a d a s u b s t a n t i a l i m p a c t o n t h e c o m p o s i t e s i n d u s t r y , f o r c i n g suppliers to drive costs down to compete in a variety of industrial applications.The benefits of composite materials have fueled growth of new applications in markets such as transportation, construction, corrosion-resistance, marine, infrastructure,consumer products, electrical, aircraft and aerospace, appliances and businessequipment.The highest growth segment of FRPs is the construction market.Funding for the Federal Transportation Equity Act for the 21st Century (TEA-21) for fiscal years 1998-2004 increased 44% over its predecessor , the Intermodal Transportation. Efficiency Act of 1991 (ISTEA). FRP projects were awarded $16 million in funding. T h i s r e p r e s e n t e d 7 0 % o f a l l available funding for TEA21innovative projects.S e i s m i c r et r o f i t a p p l i c a t i o n s include several hundred bridge upgrades in C a l i f o r n i a alone . Carbon fiber/epoxy wraps around bridge columns and beams meet earthquake resistant standards.T h e r e a r e 2 5 0 c o m p o s i t e b r i d g e s a n d bridge decks in the U.S., and a total of 4 0 0 c o m p o s i t e b r i d g e s w o r l d w i d e. M a n y m a s s t r a n s p o r t a t i o n a n d a u t o m o t i v e c o m p o s i t e applications are being legislated into reality by energy constraints, tougher environmental laws and safety issues. Despite some initial problems with sheet molding c o m p o s i t e s (SMCs) in the automotive industry, usage is increasing at a rate of 5%a n n u a l l y . A p p r o x i m a t e l y 2 5 0 m i l l i o n pounds of SMCs were used in a u t o m o t i v e applications in 1997. Structural components such as fascia supports and grille opening reinforcements account for over 70% of 1997 car and light-truck SMC use.T h e use of composite materials in marine drive shafts and c o u p l i n g s h a s g r a d u a l l y increased in the shipping and boat building industries. Composite shafts offer advantages over traditional steel shafts such as reduced weight, corrosion resistance,elastic flexibility, and ease in handling and installation. Acrylic modified resins such

as Ashland Chemical's Modar product are being developed for fire resistance.Other new inorganic formulations and hybridized formulations will address the needs f o r f i r e r e s i s t a n c e . T h e u s e o f p h en o l i c r e s i n s i n g l a s s a n d c a r b o n f i b e r c o m p o s i t e s i s growing, primarily due to their low flame spread, low smoke generation, and low smoketoxicity properties.A p p l i c a t i o n s i n c l u d e m a s s t r a n s i t , c o n s t r u c t i o n , m a r i n e, m i n e d u c t i n g , a n d o f f s h o r e structures. These areas traditionally used other resins such as polyesters, vinylesters, andepoxies . More stringent fire resistance requirements are driving this market. In Europe,hand lay-up phenolics composites have been used in mass transit since 1988 after a firebroke out at the King Cross Station, which killed thirty-one people and injured several hundred others. Nomex honeycomb with phenolic prepregs are employed tomanufacture lightweight composite panels for aerospace applications. The panels are a l s o u s e d i n C a l i f o r n i a s B a y A r ea R a p i d T r a n s i t ( BA R T ) p r o j e c t . O t h e r p h e n o l i c composites applications include walls, ceilings, and floors of aircraft interiors. Pre-pregs( p a r t i a l l y c u r e d r es i n a n d f i b e r r e i n f o r c e m e n t t o b e f u l l y c u r e d l a t er b y a compositefabricator) are the dominant method of b u y i n g r a w m a t e r i a l s f o r a e r o s p a c e , s p o r t i n g goods, and medical device composites.Pre-p regs are more expensive than buying the resin and reinforcement separately, but offer significant quality advantages, including:Better control over the resin/fiber concentrations.Elimination of storage of wet resin and catalyst.Reduction in the amount of styrene emission.Elimination of the manual roller process.Ability to lay-up the material into some shapes that would be difficult with wet systems.Several new types of pre- pregs have been introduced which have solved many of the problems associated with traditional pre-pregs. Most of the new resins are available on awide variety of reinforcements fabric, unidirectional tape, mat, braid, and tow using fiberglass, carbon fibers, and aramid fibers.A d v a n c e s i n w i n d i n g software control systems have advanced considerably so thatrather exotic parts such as 90 pipe elbows, T pipe sections, paddles, and square

 cross-sections may now be fabricated using filament winding. Market Structure: This industry manufactures composite raw materials and composites that are used by c u s t o m e r s i n a w i d e v a r i e t y of transportation, construction, industrial, and c o n s u m e r markets. Five companies supply more than 90% of the glass fiber reinforcement totalindustry shipments: Owens Corning (45%), PPG (20%), Vetrotex Certainteed (15%), Sangobain (5%) and Johns Manville (5%) resulting in a concentrated oligopoly.T h er e a r e 2 2 e s t a b l i s h m e n t s l i s t e d i n S I C 3 2 2 9 3 ( t e x t i l e g l a s s f i b er ) p r o d u c i n g $ 2 . 0 b i l l i o n i n s a l e s a n n u a l l y w i t h a t o t a l o f 9, 1 3 4 e m p l o y e e s . T h e P l a s t i c s a n d R e s i n s manufacturers (SIC 2821) tend to be very large, capital intensive companies producing products for the composites industry and other plastics users as well.There is not a specific SIC code for manufacturers that produce composites resins only, a n d m a n y o f t h e p l a s t i c s c o m p a n i e s w i t h i n S IC 2 8 2 1 d o n o t s u p p o r t t h e c o m p o s i t e s industry. According to the U.S. Census figures on SIC 2821:2 4 % o f m a n u f a c t u r e r s e m p l o y l e s s t h a n 2 0 p e o p l e. N e a r l y h a l f t h e m a n u f a c t u r e r s employ between 20 and 100 people. 29% of the total employ 100 or more employees.Average employment is 134 people per establishment.Median employment is 50 people per establishment.Market power is more evenly distributed within the plastics and resins manufacturers compared to the glass fiber industry. Competitive Threats: Composite materials are still considered a new technology in many market niches, and therefore require lengthy product approvals. T r a d i t i o n a l m a t e r i a l s s u c h a s s t e e l , a l u m i n u m , a n d c o n c r e t e h a v e a l o n g er h i s t o r y o f m a t e r i a l s t e s t i n g d a t a i n c l u d i n g l i f e c y c l e p er f o r m a n c e. E n g i n e e r s a r e r e l u c t a n t t o specify composites for new applications where there is insufficient test data.Engineers tend to rely on design

specifications rather than performance specifications. Ad e s i g n specification typically spells out the type of material t o b e u s e d , w h e r e a s a performance specification allows the engineer to choose the material to meet a specifiedperformance level. Composites are less likely to be included in design specifications.A lack of qualification criteria and design standards has hindered some engineers from using FRPs.T e c h n o l o g y a d v a n c e s i n l i g h t w e i g h t s t e e l a n d a l u m i n u m , p a r t i c u l a r l y i n t h e h i g h l y competitive automotive sector, compete with composite applications. Material recyclingrequirements by the automobile industry could limit composite applications. Compositesa r e n o t e c o n o m i c a l l y recycled. Technologies for the clean separation of t h e f i b e r r ei n f o r c e m e n t a n d t h e m a t r i x h a v e n o t b e e n f u l l y d e v e l o p e d s o t h a t t h e c o m p o n e n t materials can be reused. Oil price fluctuations are more likely to have an impact on the c o s t o f c o m p o s i t e r a w m a t e r i a l s ( s u c h a s resins) due to their higher petrochemicalcontent. Foreign competition is minimal due to the high ratio of t h e s h i p p i n g c o s t s compared to the product value, which is typically $1/ lb for both the fiber reinforcement and the resin matrix.There is considerable foreign competition in carbon fiber production, where the product v a l u e i s i n t h e r a n g e of $10 to $200/lb. Investment Issues This $3.7 billion a y e a r industry is considered capital intensive compared to other industries in themanufacturing sector. For purposes of further understanding of these investment issues,U.S . Census data from companies producing Plastics Materials and Resins (SIC 2821) a n d P r e s s e d a n d B l o w n G l a s s , n . e. c . ( S I C 3 2 2 9 ) w e r e u s e d . C o m p o s i t e m a t r i x manufacturers are typically found in SIC 2821. M a c h i n e r y a n d e q u i p m e n t a s s e t s f o r S I C 2 8 2 1 r e p r e s e n t n e a r l y 7 0 % o f a n n u a l shipments . Machinery and equipment assets for most manufacturing industries average b e t w e e n 2 5 % a n d 5 0 % o f a n n u a l s h i p m e n t s . T h u s , t h e r e i s $ 1 o f m a c h i n e r y a n d equipment assets in place for every $1.43 in shipments.Buildings and structures assets represent only 1% of shipment value.Approximately 5% of every dollar of shipment value for plastics materials and

resinsm a n u f a c t u r e r s ( S I C 2 8 2 1 ) i s r e i n v e s t e d i n n ew c a p i t a l e x p e n d i t u r e s e a c h y ea r . N e w capital expenditures for textile glass fiber manufacturers (SIC 32293) represented 10%of the value of shipments in 1992, a significant amount and the highest percentage for any pressed and blown glass manufacturers listed in SIC 3229.A total of $130 million was reinvested in new capital expenditures by 18 textile glass fiber establishments with $1.3 billion in shipment value in 1992. COMPANY PROFILEPROFILE OF THE COMPANY One among the industrial gains in the country today serving the n a t i o n o n t h e i n d u s t r i a l f r o n t k e s o r a m i n d u s t r i e s l i m i t e d h a s a t e n u r e d a n d e x t e n t f u l l history dating hock to the twenties when the industrial house of Birlas enquired it. Withonly a Textile mill under its banner in 1924, it grew from strength and spread its activitiesto newer fields like Rayon pulp Transparent Paper. Spun pipes and Refectory Tyers oil mills and refinery Extraction. Looking to the wide gap between the demand and supply of vital commodity c e m e n t w h i c h i t p l a y s o n i m p o r t a n t r o l e in Nation Building, the government Privatee n t r e p r e n e u r s t o a r g u m e n t t h e c e m e n t production Kesoram rose to the occasion a n d decided to set up few cement plants in the country.Kesoram cement is one of the prestigious units in the renowned Kesoramindustries group that is one of Indias leaden industrial conglomerates, under the leadershipof Mr.B.K.Birla, the famous personality of Indian Industry, who owes branches all over India.Kesoram cement Industry is one of the leading manufacturer of cement in India Kesoramcement is a division of Kesoram Industries limited. It is a dry process cement plant. It islocated at Basant Nagar in Karimnagar District of Andhra Pradesh with the plant capacityis 8.26 lakhs tones per annum. It is 8Kms away from the Ramagundam Railway Station Lining Madras to New Delhi. PLANTS SETUP:The first cement point of Kesoram with a capacity of 2.1 lacks tones perannum incorporating

Humboldts suspension preheated system was committedduring the year 1969. The second unit was setup in the year 1971 with capacity of 2.1lacks tons which added to the above plant capacities.The third plant with a capacity of 2.5lacks tons per annum, which went on stream in the year 1978.The coal for this company is obtained by singareni collieries and the power is obtainedfrom APSEB. The power demand capacity for the factory is about 21M.W. Kesoram has got 20G sets of 4MN each installed in the year1987.Kesoram cement belongs to the Birla group Companies one of the industrial giantsin the country. Kesoram cement industries distinguished itself among the cement factoriesin India by bagging the national productivity award for two successive years i.e., in 1985-86 and 87. Kesoram cement also got the FAPCCI award for best family planning effort in the state for the year 1987-88.Kesoram also bagged NCBCNS national award for energy conservation for the year 1 9 8 9 - 9 0 . T h e K e s o r a m i n d u s t r i e s l o o k f o r t h e w e l f a r e o f t h e e m p l o y e e s a n d i t p r o v i d e various facilities which the employees and it provide various facilities which the employeefeels satisfied with in the organization and after the work they fees satisfies the worker and works families by providing various welfare schemes a n d b y p r o v i d i n g r e c r e a t i o n a l facilities of a glace.To keep the ecological balance, company has also undertaken massive tree plantationin and around Basanth Nagar and nearby villages there by eliminating the pollution andthey have been nominated by the government of India for VRUKSHAMITRA AWARDbut effort of an industrial unit in the state for rural development 1994-95 presented by CM in march 1996.BRANDS: Kesoram brands with namely Birla Supreme and Birla supreme gold (53grades) has made a niche with outstanding quality and commands a premium in themarket. The latest offering, Birla Shakthi is also very well received and is the mostsought offer brand now. AWARDS:

National productivity award for 1985-86. National productivity award for 1986-87. National award for energy conservation for 1980-90. National award for mines safely 1985-86, 1986-87. Prestigious state award yajamanya ratna and but management award for theyear 1980. Best FAPCCI award for but family planning effort in the state 1987-88. FAPCCI award for best workers welfare 1995-96. Best industrial productivity award of FAPCCI. Best management award of state government 1993. It has got Vanamitra award from the government of Andhra PradeshKESORAM GROUP OF INDUSTRIES a ) T e x t i l e s K e s o r a m I n d u s t r i e s L t d , 42, Garden Reach RoadCalcutta-700024.

b ) R a y o n K e s o r a m R a y o n T r i e n n i a ( P . O . ) , Dist : Hoogly, West Bengal. c ) S p u n P i p e s K e s o r a m S p u n p i p e s & F o u n d r i e s , bansberia (P.O.), Dist: Hoogly,West Bengal.d)Cement Kesoram Cement,Basantnagar505187,Dist : Karimnagar, Andhra Pradeshe)Cement Vasavadatta Cement,Sedam-585222,Dist : Gulbargah, Karnataka.f) Tyres Birla Tyres,Shivam Chambers,53, Syed Amir Ali Avenue.Calcutta700019.

Product Profile The main brands of cement manufactured are: RAASI GOLD (53 Grade) RAASI SUPER POWER RAASI 43 Grade cement.All the brands are known for its best quality standards. Industrial Relations KIL ,KNR is known for its best Industrial Relations practices in this region and won many awards from Govt. of A.P. and Chamber of Industries. Norms Raw Mill Clinker Cement Lime stone 96% Iron ore 2.5% Laterite 1.5% Raw Mill 1.5 tonnes Coal 20% Clinker97% Gypsum 3% CHAPTER - IIICHAPTER - III THEORITICAL FRAMETHEORITICAL FRAME WORK WORK THEROTICAL FRAME WORK ON INVENTORYMANAGEMENT MEANING: Inventory is a list for goods and materials, or those goods and m a t e r i a l s themselves , held available in stock by a business.

Inventory are held in order to manageand hide from the customer the fact that manufacture/supply delay is longer than deliverydelay , and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials. WHAT IS INVENTORY MANAGEMENT ?

The most important objective or inventory control is to determine and maintain an o p t i m u m l e v e l o f i n v e s t m e n t in the inventory. Most companies have now s u c c e s s f u l l y installed one or the other system of inventory planning and control.I n v e n t o r y M a n a g e m e n t a n d I n v en t o r y Control must be designed to m e e t t h e dictates of the marketplace and support the company's strategic plan . T h e m a n y changes in market demand, new opportunities due to worldwide marketing, global sourcingof materials, and new manufacturing technology, means many companies need to change their Inventory Management approach and change the process for Inventory Control.D e s p i t e t h e m a n y c h a n g e s that companies go through, the basic principles of Inventory Management and Inventory Control r e m a i n t h e s a m e . S o m e o f t h e n e w approaches and techniques are wrapped in new terminology, but the underlying principlesfor accomplishing good Inventory Management and Inventory activities have not changed .T h e I n v en t o r y M a n a g e m e n t s y s t e m a n d t h e I n v e n t o r y C o n t r o l P r o c e s s p r o v i d e s information to efficiently manage the flow of materials , effectively utilize people and equipment, coordinate internal activities, and communicate with customers

. InventoryM a n a g e m e n t a n d t h e a c t i v i t i e s o f I n v e n t o r y C o n t r o l d o n o t m a k e d e c i s i o n s o r m a n a g e o p er a t i o n s ; they provide the information to Managers who make more accurate and timely decisions to manage their operations.T h e b a s i c b u i l d i n g blocks for the Inventory Management system and I n v e n t o r y Control activities are: Sales Forecasting or Demand Management Sales and Operations Planning Production Planning Material Requirements Planning Inventory Reduction The emphases on each area will vary depending on t h e c o m p a n y a n d h o w i t operates , and what requirements are placed on it due to market demands. Each of the areas above will need to be addressed in some form or another to have a successful program of Inventory Management and Inventory Control. IMPORTANCE OF INVENTORY MANAGEMENT: Inventory management refers to the process of m a n a g i n g t h e s t o c k s o f f i n i s h e d products , semi-finished products and raw materials by a firm. Inventory management, if done properly, can bring down costs and increase the revenue of a firm.H o w m u c h o n e s h o u l d invest in inventory management? The answer to t h i s question depends on the volume and value of inventory as a percentage of the total assets o f a f i r m . T h e importance of inventory management varies according t o i n d u s t r i e s . F o r example, an automobile dealer has very high inventories, sometimes as high as 50 per cent of the total assets, whereas in the hotel industry it may be as low as 2 to 5 per cent.T h e p r o c e s s o f i n v e n t o r y m a n a g e m e n t i s a c o n t i n u o u s o n e a n d t h er e a r e v a r i o u s k i n d s o f s o l u t i o n s available. It is advisable to employ specialized staff

f o r i n v e n t o r y management.The inventory management process begins as soon as one has started production and ordered raw materials, semi-finished products or any other thing from a supplier. If youa r e a r e t a i l e r , t h e n t h i s p r o c e s s begins as soon you have placed your first order with t h e wholesaler.Once orders have been placed, there is generally a short period of time available to a f i r m t o p u t an inventory management plan in place before the s u p p l i e s a r e d e l i v e r e d . Inventory management helps a firm to decide in advance where these supplies should bestored . If a firm is getting supplies of small-sized goods, it may not be much of a problemto store them, but in the case of large goods, one has to be careful so that the warehousing space is optimally utilized.F r o m i n v o i c e s t o p u r c h a s e o r d er s , t h e r e i s l o t o f p a p er w o r k a n d documentationinvolved in inventory management. Several software programs are available in m a r k e t , which help in inventory management. Inventory Managementprovides detailed information on Inventory Management , Inventory Management Software, Supply Chain Inventory Management, InventoryManagement Systems and more. Inventory Management is affiliated with E-Procurement Services. TYPES OF INVENTORYFour kinds of inventories may be identified:1. Raw materials Inventory: This consists of basic materials that have not yet b e e n committed to production in a manufacturing firm. Raw materials that are purchased from firms to be used in the firm's production operations range from iron ore awaiting processinginto steel to electronic components to be incorporated into stereo amplifiers. The purpose o f maintaining raw material inventory is to uncouple the p r o d u c t i o n f u n c t i o n f r o m t h e purchasing function so that delays in shipment of raw materials do not cause production delays.2. Stores and Spares: This category includes those products, which are accessories to themain products produced for the purpose of sale. Examples of stores and spares items arebolts , nuts,

clamps, screws etc. These spare parts are usually bought from outside or some times they are manufactured in the company also.3. Work-in-Process Inventory: This category includes those materials that have b e e n committed to the production process but have not been completed. The more complex and l e n g t h y t h e production process, the larger will be the investment i n w o r k - i n - p r o c e s s inventory . Its purpose is to uncouple the various operations in the production process so t h a t machine failures and work stoppages in one o p e r a t i o n w i l l n o t a f f e c t t h e o t h e r operations.4. Finished Goods Inventory: These are completed products awaiting sale. The purpose of finished goods inventory is to uncouple the productions and sales functions so that it no longer is necessary to produce the goods before a sale can occur. Raw materials: The purchased items or extracted materials that are t r a n s f o r m e d i n t o components or products.

Components: Parts or subassemblies used in building the final product. Work-in-process (WIP): Any item that is in some stage of completion in themanufacturing process. Finished goods: Completed products that will be delivered to customers. Distribution inventory: Finished goods and spare parts that are at various p o i n t s i n t h e distribution system. Maintenance, repair, and operational (MRO) inventory (often called supplies): Itemsthat are used in manufacturing but do not become part of the finished product.

COST OF CARRYING INVENTORY Carrying material in inventory is expensive. A number of studies indicated that the annualcost of carrying a production inventory averaged approximately 25% of the value of theinventory . The escalating and volatile cost of money has escalated the annual inventorycarrying cost to a figure between 25% - 35% of the value of the inventory. The following five elements make up this cost: 1) Opportunity cost (12% -20%)2) Insurance cost (2% 4%)3) Property taxes (1% - 3%)4) Storage costs (1%3%)5) Obsolescence and deterioration (4% - 10%)Total carrying cost (20% - 40%)Let us briefly look into these costs:Opportunity cost of invested funds When a firm uses money to buy production material and keeps it in the inventory, it simplyhas this much less cash to spend for other purposes. Money invested in external securitiesor in productive equipment earns a return for the company. Thus it is logical to charge all Reads: 307 Uploaded: 03/18/2011 Category: Uncategorized. Rated:
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