14-09-2012, 11:43 AM
Inventory Management in Roots Industries India Limited
Inventory Management.ppt (Size: 201 KB / Downloads: 66)
INTRODUCTION TO THE COMPANY
Roots Industries Ltd. is a leading manufacturer of HORNS in India and the 11th largest Horn Manufacturing Company in the world. Headquartered in Coimbatore - India, Roots has been a dominant player in the manufacture of Horns and other products like Castings and Industrial Cleaning Machines. Since its establishment in 1970, Roots has a vision and commitment to produce and deliver quality products adhering to International Standards.
The company’s turnover for the year 2008-2009 was Rs. 9609.18 lakhs as compared to Rs 8934.04 lakhs for the previous year 2007-2008
The profitability was Rs. 1067.49 lakhs against Rs. 528.81 lakhs in the last year. This represents a record growth of 101.87%
The export turnover was Rs. 4133.00 lakhs in 2008-2009 as compared to Rs. 3690.04 lakhs in 2007-2008. The export after market turnover contributed to a large extent to achieve the growth of 12% in export segment
Management
ROOTS Industries Ltd., is managed by an excellent team of path-breakers, chief among them being the Chairman, Mr. K. RAMASAMY, a Master's Degree Holder in Automobile Engineering from Lincoln Technical Institute, USA.
He is supported by technical and administrative people, experts in their own field, who together strive to maintain the highest quality quotient in all of ROOTS' products.
INTRODUCTION TO THE TOPIC
Inventory management refers to the process of managing the stocks of finished products, semi-finished products and raw materials by a firm.
The process of inventory management is a continuous one.
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.
Inventory Management is very important for the business. It enables the business to meet or exceed expectations of the customer by making the product readily available.
Inventory management is one of the areas covered by the whole process of management.
OBJECTIVES OF INVENTORY MANAGEMENT
To reduce financial investments in inventories
To facilitate production operations
To avoid losses from inventory obsolescence
To ensure continuous supply of materials, spares and finished goods so that production should not suffer at any time
To avoid both overstocking and understocking of inventory
Review of Literature
Ashok Kumar wahi (1980) in the topic “Inventory Management in Manufacturing Organization” distinguished between manufacturing and distribution inventories. He emphasized that the traditional approaches to inventory management are not applicable to manufacturing industries. This is due to their incorrect assumptions about the function and demands for individual items consisting of the manufacturing inventory
Findings
The inventory audit is done at regular interval in addition to the annual audit
Current ratio is decreasing from 2005 to 2009.It is lower in the year 2009 (1.61%).Low current ratio represents that the liquidity position of the firm is not satisfactory
Net profit ratio is increasing from 2005 to 2009.It is higher in the year 2009 ( 6.92%). Higher the ratio, better is the profitability
The inventory turnover ratio indicates that the company has proper inventory management measures and efficient inventory management
The company was able to turnover its inventory for an average of 5.95 times and takes an average of 185 days to convert inventory into sales.
Debtors turnover ratio shows a decreasing trend from 2005 to 2009 and shows an average of 5.38%
Average collection period is increasing and shows an average of 69 days
Conclusion
According to this study, Inventory management of the company is in the better position. The variables chosen for the study helped in determining the position of the concern consequently for the period of 5 years
To conclude by considering the inventory and its position in the financial condition, the company Roots Industries Limited, is in pinnacle stage. In order to sustain the same position, the proper inventory management should be carried on and this will definitely help the company in meeting the fluctuating demands in turn build the reputation of the company