12-10-2012, 05:00 PM
INVENTORY MANAGEMENT IN ULTRATECH
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INTRODUCTION
UltraTech Cement Compressor Company is one of the largest manufactures of hermetic compressor for air conditioning and refrigerators’ products.
In addition to compressor we utilize our design and manufacturing expertise to deliver refrigeration solution to a grad range of industries around the world pursuing a global strategy of mass customization we full fill our customer need with high quality compressors condensing units (compressor and hard side condenser assembled together and complete cooling system utilizing high volume flexible manufacturing system we provide customized value driven solutions unique to our customers).
We manufacture from our containents and over fifteen factors in order to match over delivery with our customers primary needs whether they be products development short leed times low cost of repaid service in order to focus on the right customer solution we are segmented into core geographic operating units that independently serve the local product coordinate to serve the global market.
our products operating and available for R & F (house hold refregirators and freezes), a.c (room air condition mini splits, unitary) and commercial (bottle coolers and restaurents and supermarkets) products a brand range of compressors(reciprocating rotary, scroll ) we can provide the solution that best fits the application.
“NEED FOR INVENTORY”
Any organization, which is involved in economic activity, needs to maintain certain level of inventory
The level of inventory is decided based on:-
1) The type of market and demand for the end product.
2) The type of production-activity.
a) Continuous Production.
b) Intermittent Production.
c) Projects Production.
3) Inventories are bound to be maintained for
a) Precautionary Motive.
b) Speculative Motive.
c) Transactional Motive.
For these Purposes inventories is to be maintained,
Precautionary Motive:- Necessitates holding of the inventories to guard against the risk of unpredictable changes in demand and supply forces and other factors.
Speculative Motive:- Influences the decision to increase or reduce inventory levels to take advantage of price fluctuations.
Transactional Motive: - Emphasis the need to maintain inventories to facilitate smooth production and sales operations.
Scope of the study:-
If we look at inventories from financial management point of view , these are called as Working-Capital Management
Generally, any Organization tends to obtain working capital from Borrowing, namely:-
1) Short term loans from Banks.
2) Financial institute like
a) ICICI
b) HDFC
c) LIC
d) IDBI
3) Debentures
4) Deposits.
The Organization incurs certain amount for getting the above loans, besides the debt servicing charges. In common usage the debt servicing as Interest On Borrowing.
The Working capital so obtained is invested in current Assets in the shape of
a) Inventory:-
1) Raw Materials.
2) Work-in-Progress.
3) Finished goods.
b) Sundry Debtors.
c) Cash.
Generally in any Organization 60% of Working Capital is blocked in Inventories, hence the study of management & Control of Inventory is having significant influence on Contribution and Profitability of the Organization.
a) Raw Materials: Raw material form a major input in the organization. They are required to carry out production activities uninterruptedly. The quantity of raw materials required will be determined by the rate of consumption and the time required for replenishing the supplies. The factors like the availability of raw materials and government regulations, etc. too affect the stock of raw materials.
b) Work-in-Progress: The work-in-progress is that stage of stocks which are in between raw materials and finished goods. The raw materials enter the Process of manufacture but they are yet to attain a final shape of finished goods. Quantum of work-in-progress depends upon the time taken in the manufacturing process. The greater the time taken in manufacturing, the more will be the amount of work in progress.
c) Consumables: These are the materials which are needed to smoothen the process of production. These materials do not directly enter production but they act as catalysts, etc. Consumables are classified according to the consumption and criticality. Generally, consumable stores do not create any supply problem and form a small part of production cost. There can be instances where these materials may account for much value than the raw materials. The fuel oil may form a substantial part of cost.
d) Finished goods: These are the goods which are ready for the consumers. The stock of finished goods provides a buffer between production and market. The purpose of maintaining inventory is to ensure proper supply of goods to customers. In some concerns the production is undertaken or order basis, in these concerns there will not be a need for finished goods. The need for finished goods inventory will be more when production is undertaken in general without waiting for specific orders.