SS SL NO. PARTICULAR PAGE NO.

ACKNOWEGEMENT
DECLARATION

CHAPTER-1

PREFACE

EXECUTIVE SUMMARY

INTRODUCTION
OBJECTIVES
CHAPTER-2
FUNCTIONAL DEPARTMENTS
RESEARCH METHODOLOGY
COMPANY PROFILE
 THEORIES OF INVENTORY
MANAGEMENT
CHAPTER-3
DATA INTERPRETATION AND
ANALYSIS
LIMITATIONS OF STUDY
CHAPTER-4
FINDINGS
CONCLUSIONS
BIBLIOGRAPHY

PREFACE
Experience is the best teacher.This saying plays a guiding line
in our lives and also in project reports that are an integral part of
the MBA in BPUT.

Todays age is an age of management. Management is the

backbone of any organization or any activity done. The real
success of management lies in applying the professional
management techniques an all managerial activities.

Hence, to attain this objective and to have the outlook of all

intricacies of corporate world I have undertaken the Summer
Training at JINDAL STAINLESS LIMITED, JAJPUR ROADIts all
about INVENTORY & SUPPLY CHAIN MANAGEMENT
 ACKNOWLEDGEME
NT
Training is the phase of the activity during my study in which I am
expected to expand my creative thinking ability and to get the
training of how to work in the JINDAL STAINLESS LTD. and how
all works are undertaken in the company. It is a matter of great
satisfaction and pleasure to present this report on Purchase
Department of JINDAL STAINLESS LTD.I take this opportunity to
owe my thanks to all those involved in my training.

Firstly I would like to thank JINDAL STAINLESS LTD.JAJPUR ROAD,

for giving the opportunity to complete my project in the
organization. I put on record my sincere thanks to my college,
IPSAR, CUTTACK for giving me such an opportunity. I am
extremely grateful to Mr. SAYED IZHARUL HASNAIN for the
encouragement, discussions and critical assessment of the
project.

It was a good experience for me to work with JINDAL STAINLESS

LTD. I am greatly obliged to Mr.Vajeeuddin khan, GM(I & SM),
my company guide, who have shared his expertise and
knowledge with me without which the completion of project would
not have been possible.

I express my gratitude towards staff of JINDAL STAINLESS LTD,

those who have helped me directly or indirectly in completing the
training.
 DECLARATION
I, the undersigned SHAKTI DAS hereby declare that the project
written and submitted by me under the guidance SAYED
IZHARUL HASNAIN is my original work. The empirical findings
and data collected by me are to the best of my knowledge. I have
not copied it from any report submitted to any of the university /
institutions.

I understand that any coping is liable to be punishable by the

authorities.

Place :
Date : / /
 EXECUTIVE SUMMARY
During the Summer Training at JINDAL STAINLESS LTD,JAJPUR
ROAD I have tried to cover the glimpse of overall working of the
organization.

This report talks about the Service first, and then further it
talks about the marketing aspects of the company.

Afterward it proceeds towards the theoretical aspects of the

project report and about various research methods used for
the data collection.

Further is discusses about the various aspects and

techniques used in inventory management.

Further it talks about various data analysis and

interpretation of various inventories ratio.
 INTRODUCTION
Inventory control is vitally important to almost every type of
business, whether product or service oriented. Inventory
control touches almost every facets if operations. A proper
balance must be struck to maintain proper inventory with
the minimum financial impact on the customer. Inventory
control is the activities that maintain stock keeping items at
desired levels. In servicing since the focus is on physical
product, inventory control focus on material control.

Inventory means physical stock of goods, which is kept in

hands for smooth and efficient running of future affairs of an
organization at the minimum cost of funds blocked in
inventories. The fundamental reason for carrying inventory
is that it is physically impossible and economically
impractical for each stock item to arrive exactly where it is
needed, exactly when it is needed.

Inventory management is the integrated functioning of an

organization dealing with supply of materials and allied
activities in order to achieve the maximum co-ordination and
optimum expenditure on materials. Inventory control is the
most important function of inventory management and it
forms the nerve center in any inventory management
organization. An Inventory Management System is an
essential element in an organization. It is comprised of a
series of processes, which provide an assessment of the
organizations inventory.
 OBJECTIVE
The project report is prepared considering the following
objective:-

1. To study the Inventory Management of JINDAL STAINLESS

LTD
2. To know the stock of the company.
3. To know the status of the company.
4. To make comparative study with other month performance.
5. To know the process of payment of different parties.
6. To know the managerial capacity.
7. To know the profitability of the company in the form of ratios.
8. To know the purchasing capacity of the Purchase
Department.
9. Preparation of Store Receiving Report (SRR) for 95% material
within 48 hours after tare weighment of material.
10. Complete 95% issue cycle within 12 hours.
11. Unloading of 95% of Container other than scrap-
container within 24 hours of receipt.
12. Ensure 80% availability of Stores Controlled Item at any
given point of time.
13. To know Disposal of Saleable Scrap/Waste within 30
days from the date of receipt.
14. To know Providing Safety (departmental) as per Training
Calendar.
RESPONSIBILITY, ACCOUNTABILITY & AUTHORITY

HOD (I&SM)

Overall In charge of Inventory & Supply Management &

administrative controller of the division.
Implementation and monitoring of Integrated Management
System.
Monitor and control improvement of projects as well as Cost
Control Method.
Overall responsible for implementing the systems and
procedures by defining responsibility & authority of
individuals.
Optimization of manpower & resources.
Guiding and shaping subordinates.
Maintains the safety awareness.
Approving HIRA & Aspect evaluation and determination of
control
Identification of legal requirement and maintaining record
thereof. (Relating to EMS & OHSMS)
Identification of emergency situation (EMS / OHSAS) and
implementation of emergency preparedness plan
Establishing and reviewing objectives and targets for QMS,
EMS and OHSMS.
Establishing and reviewing management programmes for
EMS / OHSMS.
Identification of training needs, conducting training,
evaluation of training effectiveness for QMS/ EMS / OHSMS.
Controlling departmental documentation relating to
Integrated Management System (QMS / EMS / OHSMS).
Capturing non-conformity (QMS / EMS / OHSMS), correction,
root cause analysis (RCA), corrective action and preventive
action.
Participation in audit (Internal / External) and compliance to
audit findings.
Providing suggestion for improvements of IMS in Management
Review Meeting (MRM).
 Compliance to Management Review Meeting (MRM) decision
(if any).
Overall responsible for receiving, storing, handling &
disposal/sale of hazardous and non-hazardous waste as per
controlled procedure and/or regulations.
Accountable for all OHSAS related activities.

In Charge (Stores)

In charge for MRO & Raw materials-Phase-I

Ensure timely Receipt & Issue of materials.
Ensure proper handling and preservation of all materials.
Monitoring all activities as per Integrated Management
System procedures.
Monitoring and control of inventory of MRO & Raw materials.
Ensure proper utilization of manpower & Machinery.
Planning for system improvement & implementation.
Analyze and take corrective action on audit findings of Stores-
I.
Co-ordinate with internal & external customers as and when
required.
Shaping and guiding subordinates.
Conducting HIRA & Aspect evaluation and determining
significant impact
Ensuring participation of workers by
o Involving in HIRA
o Involving in incident investigation

In-Charge (Waste Management)

In-charge for sale or disposal of waste/scrap (saleable).

Monitoring and controlling of saleable waste/scrap.
Collection of saleable waste/scrap from generation point and
shifting to scrap yard.
 Ensure safety and environment legal compliances while
shifting and storing of hazardous waste.
Floating of enquiry, Comparative Statement preparation, and
negotiation with customer & getting approval for final sale
order for sale of scrap/waste.
Loading arrangement/supervision of scrap / waste for sale.
Preparation of loading advice for vehicle deployed by external
customers for scrap purchase.
Ensure safety and environment legal compliances while
dispatching hazardous waste.
Responsible for all Environmental related issues.
Participation in testing of emergency preparedness plan.
Participation in
o HIRA
o Incident investigation
Accountable for ensuring OHSAS compliance in their scope of
activity.
In Charge (Receipt section)

Responsible for all incoming materials received in the section.

Ensure proper handling & unloading of material.
Co-ordination with user department for timely unloading of
incoming material (if received at site).
Information to user department for timely inspection of GRN.
Controlling & disposal of all rejected & excess material.
Organize & releasing of material from transporters go-down.
Participation in testing of emergency preparedness plan.
Participation in
o HIRA
o Incident investigation

Accountable for ensuring OHSAS compliance in their scope of

activity.

In Charge (Issue Section)

Responsible for preservation and issue of materials in

inventory.
Responsible for proper identification / traceability and storing
of materials.
 Timely issue of materials.
Periodical Physical verification of Materials.
Preparation of Gate passes of both returnable & non-
returnable.
Co-ordination with user department for timely return of
materials sent against returnable gate pass.
Controlling of shelf life items..
Participation in testing of emergency preparedness plan.
Participation in
o HIRA
o Incident investigation

Accountable for ensuring OHSAS compliance in their scope of

activity.
Supervisor (Receipt Section)

Receipt of material against online entry.

Co-ordination for smooth unloading of material
Unpacking & Identification of receipted material
Processing of Goods Receipt Note of accounted material.
Handover of accepted materials to inventory.
Identification, monitoring & proper handling of Hazardous
materials.
Participation in testing of emergency preparedness plan.
Maintain file & formats as per IMS standard.
Participation in
o HIRA
o Incident investigation

Accountable for ensuring OHSAS compliance in their scope of

activity.

Supervisor (Issue Section)

Issue of material from inventory.

Proper storing & safe keeping of material as per their nature.
Codification of material as per users requirement.
Verification & releasing of Purchase Requisition.
Identification, monitoring & proper handling of Hazardous
materials.
 Participation in testing of emergency preparedness plan.
Participation in
o HIRA
o Incident investigation
Assistants

Assist supervisors for proper handling of material.

Proper storing & safe keeping of material in the specified
location.
Coordination for improving housekeeping.
Assist internal customers / authorized persons for easy
tracing of material.
Monitoring stores inbound logistics/outsourced jobs.
Monitoring & proper handling of Hazardous materials.
Participation in testing of emergency preparedness plan.
Participation in

o HIRA
o Incident investigation
 RESEARCH
METHODOLOGY
1. Study or Research Objectives:-
The main objectives of study:-
a. To learn how the company manage various levels of
inventory within the company.
b. To analyze changes in the stock of RM, WIP, FG.
c. To study the various inventory ratio.
d. To analyze the inventory management techniques
used in the company.
e. To study the Inventory Control Techniques of the
company.

2. Methods of Data Collection:-The data is collected from

the Purchase department of the company.
 a) Primary data:- The sources of primary data are actual
work experience in the JINDAL STAINLESS LTD.
discussion with the Director General Manager studying
company profile, monthly reports of JINDAL STAINLESS
LTD. JAJPUR ROAD,
b) Secondary Data:-The sources of collecting secondary
data are Monthly reports company web site.
3. Data Analysis Techniques:-
For the purpose of analysis of the data and the report I
have kept in mind the objective and analyzed each and
every data I got at each stage of the report. I have used
many tools for analyzing.
The ABC Analysis is a business term used to define an
inventory categorization technique often used in material
management. It is also known as Selective Inventory Control.
Policies based on ABC analysis.
A.Items: Very tight control and accurate records
B. Items: Less tightly controlled and good records.

C. Items: Simplest controls possible and minimal

records

About Jindal Stainless Ltd.

Jindal Stainless Limited is setting up words largest Location
Fully Integrated Stainless Steel Plant at jajpur, Odisha. It is a leading
producer of Stainless Steel and ferro alloys. Manufacturing unit of JSL,
is the only fully integrated stainless steel plant in the country
encompassing compete integration including ferro-alloy production,
steel making ,refining, hot rolling, annealing pickling and finishing
facilities along with coke oven battery and captive power plant.
 Production of ferrochrome, Ferro-manganese and Silico-
manganese is carried out in submerged arc-furnaces, and ultra high
powered electric is carried out in argon oxygen de-carburization
convertor and slabs are casts in vertical-bending continuous casting
unit.

Conditioning of slabs is done in grinding machine followed by

hot rolling of slabs in an ultra modern hot strip mill comprising of
walking beam reheating furnace, reversible roughing stand with
hydraulic gauge and width control, coil box, six stand finishing mill with
hydraulic gauge control, smart crown with contoured work roll and
horizontal roll shifting for profile control, positive and negative work roll
bending & excellent laminar cooling facilities.

Annealing-pickling of hot rolled black coils is conducted in a

continuous hot rolled annealing-pickling line endowed with in-line
rolling, scalbreaker, short blasting unit, electrolytic sulphuric & mixed
acid tanks. Annealing-pickling Coil are cold rolled, annealed and pickled
in a continuous cold rolled Annealing pickling line with three stand in-
line rolling, neutral electrolytic nitric acid and mixed acid tanks. There
is provision of on-line skin pass and tension leveller in this line to
produce world class lustrous products with high degree of flatness. The
plant is also endowed with state of the art bell furnaces, skin pass mill
as well as slitting and shearing lines for finishing.

The 1.6 mt per annum Green filed project envisage complete

integration from mining to cold rolling, along with 500 mw captive
power plant. The project is being commissioned in phases. PhasesIof
the project whichincluded ferro alloy shops and thermal power plant
has already become operational in 2007-08. With complete
commissioning. The odisha plant would reach capacity of 1.6 million
tones and these leading global stainless steel producers in the world.
Jindal organization. The company ISO: 14001company is the flagship
company of the jindal organization. The company today has come a
long way from a single factory establishment, started in 1970. As the
numerouno it has taken on the task of, making stainless steel a part of
everybodys life by taking a 360 degree approach from production of
row materials to supply of architecture and lifestyle related products
Beside a cold rolling in vasind (maharastra) in order to streamline JSL
and its operation to concentrate on its ss business the company
mooted a scheme of restructuring that envisaged the sale and spin off
of certain division of its historical business the first was the hiving off
sponge iron along with power and engineering all located in Madhya
Pradstructuringmove, this that to be sold to group company jindal iron
and steel company (JISCO) for Rs. 65 crore. An all cash deal cash deal
which was subsequently converted into 40 per cent cash and 60 per
cent to be paid in the next three years though the shareholders and
creditor duly approved the move and jisco was ready to by cr facilities
banker SBI who had given jisco working capital loans had reservation
about the timing of the move hence it could not be sold we then
planned a fresh scheme of restructuring and hived off vasind units as a
subsidiary of JSL says Ratan.

Following the divestment of the Madhya Pradesh units JSL at present

comprises the SS facilities at Hisar. The ferro chrome ( a key
component used in manufacture odss) unit at Visakapatnam and the
mould cold rolling facilities at Vasind. With this the company is the
largest integrated producers of stainless steel (SS) in india, and boasts
of a capacity of 2.5 lakh tones per annum in terms of volume of molten
stainless steel , 3 lakh tpa of blade steel in india and one of four
producers of this grade in the world.

Ever since JSL focus on stainless steel gathered momentum the

financial health of the last three years to march 2000 JSL sales figure
logged a compounded average growth rate of 30% to Rs. 1064.10
crore by increasing value addition and other cost cutting measures JSL
enjoyed a good operating margin which for the same period grew at
CAGR of 46 % to Rs. 222.5 crore. Against this the top line CAGR for the
steel industry during 10% .while the operating profit was the same
period while the operating profit was a negative figure.

THE GROUP:-
Shri.Om Prakash Jindal. Founder Chairman of JINDAL group was born on
August 7, 1930, to a farmer in Nalwa village of Hisar district in
Haryana. Having interest in technology from a young age he started
hid industrial career with a humble bucket manufacturing unit in Hisar
in 1952, in 1964 he commissioned a pipe unit JINDAL India Limited
followed by large factory in 1969 under the name of JINDAL Strips
Limited.

Shri. Jindal envisioned a self reliant India in every sector of industry. To

fructify this vision, he gathered the latest technical knowhow from
around the world and strengthened his industrial establishment. Shri.
O.P Jindal was conferred the Prestigious Life time Achievement Award
by the Bengal chamber of commerce & industry in November 2004.

The Jindal Group is a US$18 Billion conglomerate, which over the last
three decades has emerged as one of indias most visionary Shri O.P.
JIndal a first generation entrepreneur who started an indigenous single
unit steel plant Hisar,Haryana.he also severed as the minister of power
Govt. Of Haryana. His multifarious career was tragically cut short with
his accidental death on March 31,2005.

The group strength lies in dynamic and aggressive approach of the

leaders of the group. These leaders are none other than the four sons
of Shri. O.P Jindal the group has already announced its intention to set
up Greenfield steel plant and power plants in the state of west Bengal,
Jharkhand, Chhattisgarh, Odisha, Rajasthan, Maharashtra and
Karnataka. The group is continuously on the lookout for acquiring
various iron ore and coal mines, critical inputs for steel making.

Plant Location and accessibility

The site of the stainless plant is located in jajpur of odisha. The plant
area is bounded by east-coats railways line connecting jakhapura and
daitari station on the east and jajpur-talcher state highway on the
north. The nearest station is jakhapura, on howrah-khargapur-
Bhubaneswar- Vishakhapatnam line. Which is about 10km towards
SE.the express way connecting daitari mines to paradip port is about
8m W from the site. The another nearest national Highway is NH-6,
which is about 20km E of the plant at its nearest point. The nearest
cilivilian airport is Bhubaneswar, which is more than 110km away, the
proposed project area falls within duburi village the river Brahmani
flows from west to east on the souther side of the plant side

The total area is about 526.09 ha under village Duburi. The land
consist of agricultural land and follow land. There is no forest land
involved

Board of Director
Chair person:- Savitri DeviDirector :- jamesAlistair Kirkland
Jindal Cochrane
Vice chairman and Chief Executive officer:-
managing Director:- RatanUday Kumar Chaturvedi
Jindal
Director :- Naveen Jindal Director :- Rajeev Bakshi
Nominee Director Director :- Sumanjyotikhaitan
state bank of india:-
GautamKanjilal
Director:- Tara SankarExecutive Director(finance):-
Bhattacharya Jitendar Pal Verma
Director Joint managing director &
corporate affairs:- N.C Mathur chief operating officer:- R.G Garg

HISTORY OF JINDAL STAINLESS

LIMITED
A restructured JSL Stainless Ltd. Placed its bets on stainless steel the
focus has now paid off At 39, Ratan Jindal, Managing director, JSL
Stainless Ltd. Ltd(JSL) has seen the company complete a full circle from
stainless steel to other segment of the steel industry and back to
stainless steel JSL history in steel had begun with the manufacturing of
mild steel hot rolled plates and coil in 1971. On account of rising scrap
prices in the late 70s the company shifted into stainless steel as the
market opened up, it further diversified around the mid-1980s to
1990s jsl moved into cold rolled stainless steel a commodity that was
then imported into the country and mild steel hot rolled coils and even
to sponge iron says Ratan but now we are back with a clear focus on
stainless steel.

Ratan who is the third of the four sons of O.P Jindal, founder of the
group is determined that jindalstaels a march over other producers of
stainless steel in country based on focus on stainless steel the
company has undergone a restructuring exercise all the other division
are hived off as either subsidiaries or as separate companies says
Ratan.

Jsls genesis has a strong bearing on the situation today as flagship

company of the Rs. 6000 croreO.P Jindal group Jal ventured into making
ss in hisar in 1977. At the time steel was all imported from japan and
was very expensive item recall Ratan till the early 1980s JSL then the
only producer of stainless steel utensils but the mind 80s when smaller
unit got in to the cold rolling of stainless steel strips the going got
taught for jsl seeing cold rolled mild steel used for making galvanised
sheet and barrels

THEORIES OF INVENTORY
MANAGEMENT
1. Inventory Management

What do you mean by inventory?

The raw materials, work-in-progress goods and completely

finished goods that are considered to be the portion of a
businesss assets that is ready or will be ready for sale.
Inventory represents one of the most important assets that
turnover of inventory represent one of the primary sources
of revenue generation and subsequent earnings for the
companys shareholders/ owners.
 Management of Inventories is with the primary objective of
determining, controlling stock levels within the physical
distribution function to balance the need for product
availability against the need for minimizing stock holding
and handling costs.

A subsidiary ledger which is usually used to record the

details of individual items of stock.
Inventories can also be used to hold the details of other
assets of a business. There are three types of inventory:- (1)
Raw materials,(2) work in process and (3) finished goods.
(1)Raw materials are materials and components that are
inputs in making final products.
(2)Work in process also called stock in process refers to
goods in the intermediate stages of production.
(3)Finished goods consist of final products that are ready for
sale .

Inventories is a list of goods available in stock at warehouses

.it is also use for a list of contains of a household and for a
list of testamentary purpose of the possession of someone
who has died in accounting inventory consists as assets.
2. Nature of Inventories
Inventories are classified according to uses and point of entry in
the alteration is as follows:-
Raw material,
Work in process goods,
Finished goods &
Raw Materials.
Raw Materials:-Raw materials are those units
that are converted into finished production
through manufacturing process. Raw material
inventories are those units which have been
purchased and stored for future.

Work in Process goods:-It is also called stock

in process. It refers to goods in the intermediate
stage of production. These inventories are semi-
 finished products. It presents the products that
need more work before they become finished
product for sale.

Finished goods:-Finished goods consist of final

products that are ready for sale. Finished goods
are those completely manufacturing products
which are ready for sale. Stock of material and
work in process facilitate production, while stock
of finished goods is required for smooth
marketing operation. Thus inventories serves as
a link between production and consumption of
goods.

3. Objective of the Inventory Management

The basic responsibility of the financial is to make sure the firms
cash flows are managed efficiently. Efficient management of
inventory should ultimately result in the maximization of the
owners wealth. It was indicated that in order to minimizes cash
requirements, inventory should be turned over as quickly as
possible, avoiding stock-outs that might result in closing down the
production line or lead to a loss of sales.
The main objective of inventory management consists of two
parts.
a. To minimize investment in inventory.
b. To meet demand for the product by efficiently organizing the
production and sales operations.
The firm should minimize investment in inventory implies that
maintaining inventory involves costs, such that the smaller the
inventory, the lower is the cost to the firm. But inventory also
provide benefits to the extent that facilitate the smooth
functioning of the firms.

4. Why Inventory Management?

An increased emphasis on liquidity has lead businessman to hold
cash and securities in performance to inventories. Inventories are
now often referred to as the grave yard of the business.
The surplus of the stock has been a principal guide of failure thus
lead to change their view regarding holding of inventories and
adopt scientific way of inventory holding.

Following are factor that are following the view of scientific

inventory control.
a) Size of Business:-The increased size of
business establishment has played an
important role in modern large scale
enterprise. Often it operates with small profit
margin which can be eliminated by scientific
inventories control method.
b) Wide variety and complexity:-The wide
variety and complexity in modern technology
requires conscious inventory management.
The larger the range of requirement, the
greater the number of problem of
investment, procurement, storage, holding,
accounting, shortage and stock out
deterioration etc.
c) Urgency in material requirements:-The
need and importance of inventories varies in
different production with the ideal time, cost
of men, machinery and urgency of
requirement. But it is highly uneconomical to
keep a secure and a rapid capital turnover
and the most effective means of achieving
these objectives is to control stores.

5. Factors Influencing Inventory Management Decision

There two types of factors. They are external and internal factor
which influence decision making for inventory in an organization.
The external factor arises from market conditions, credit
availability and government regulation. The external factors are
not controllable easily while internal factor are controllable with
effective inventory management.

Following are the factors influence the inventory decision of an

organization:-
a) Lead Time: - Lead time can be defined as the period
that elapses between the reorganization of a need and
its fulfillment. Inventories have to take care of normal
consumption during lead time because it increases the
inventories and it will have to be increased
correspondingly.
b) Relevant Cost: - The inventory problem is one of the
balancing costs, so that total cost is minimized. Their
costs are:-

i. Cost of Ordering:-The activities that are carried out

for fulfilling the need for material, which consume
executive time, stationary and communication charges,
these are the cost of ordering.
ii. Cost of Carrying out Inventories:-The moving factor
to control inventory is the cost incurred by holding. It is
the cost that is expressed as percentage of the average
investment i.e. capital investment, spoilage insurance
cost.

6. Material Control Techniques

The concept of material control techniques signifies the efficiency
of any organization. The contingent upon having the right
material of right quality at right quantity at the right time in
following three areas: -
a) Purchase Control
b) Storage Control
c) Warehouse Accounting

A. Purchase Control: - This is one of the basic functions of

inventory management and forms a major part of it. It needs
considerable expertise not only negotiating but also in the
techniques of competitors and studying of economic trends
 in respect of materials to be purchased in large quantity to
increase the profit.
Objectives of Purchasing:-
a. To maintain continuity of production,
b. To contribute to the competitiveness of the
product,
c. To contribute towards higher productivity,
d. To increase profit,
e. To contribute towards standardization, variety
reduction, value analysis.

B. Storage Control:-The control of materials when it is in

storage is affected through what is known as the perpetual
inventory. Thus two main functions of the perpetual
inventory system have been studied which are:-
1. Receipt and Issue System,
2. Maintenance of Store Records.

C. Warehousing System and Procedure :-The procedure

comes into operation immediately on receipt of dispatched
documents or dispatched intimation in the stores and covers
on the activities i.e. clearance, delivery, inspection, stock
charging and preservation, issue and return of materials by
the ends after striking out balance from the stock card and
delivery of the account department.

7. Material Control Techniques in Apollo Hospital

To know the practical use of various inventory control techniques
in Apollo Hospital following inventory control techniques were
studied and evaluated which are:-
A. Codification System,
B. Classification of Inventory,
C. Determination of Inventories Level,
D. Importance Substitution.
E. Supply Chain Management & Inventory Control.

(A) Codification
System:-Codification system means
 assigning a unique code or name to
each item based on its use,
characteristics, importance and other
features. It is the process of allocating a
code after logical grouping and sub
grouping considering material type and
application.
Principles of Material Code:-
a) There should be adequate provision for future
expansion and there should be no duplication.
b) One particular size and type should be at one place
only.
c) Description should be brief, very accurate,
specification, part number; drawing number should be
quoted whenever required.
d) Unit of issue and receipts should be given and followed
strictly.
e) Code should be understandable by those who have to
use it.
f) It should be properly classified for section, classed and
group.
g) One unique code for each item represented by single
code.
Advantages:-
a) It enable systematic grouping of similar items
together.
b) It helps in avoiding duplication of items.
c) Rationalized codification result in variety of
reductions. Many firms have successfully reduced the
number of items stock by them.
d) It avoids confusion caused by the long and unwieldy
description and accurately logically and logically
identifies all items.
e) It is the starting point for standardization
f) It lays the foundation for an efficient purchase
organization by helping to from specialized
commodity base purchase section. Since items are
 identified by source of supply, it is possible to bulk
them together to take advantages of bulk discount
(B) Classification of Inventory:-The Inventories having huge
amount of use in the organization has to be controlled very
strictly and low amount of use should be kept low control. The
main classification of Inventory is as under:-
(a) ABC classification
(b) Economics Ordering Quantity
(c) FSN classification
(d) Zero Inventories
(e) Setting up of various stock levels.
(f) Preparations of inventory budgets.
(g) Maintaining perpetual inventory system.
(h) Establishing proper purchase procedures.
(i) Inventory turnover ratios.

(a) ABC Classification:-In most of the inventories a small

proportion of items account for a very substantial usage and large
proportion of items accounts for a very small usage. ABC analysis,
based on this empirical reality, advocates in essence a selective
approach to inventory control which calls for a greater
concentration of efforts on inventory items accounting for the
bulk of usage value.

ABC classification is a basic analytical management tools which

enable top management to direct their efforts where the result
will be maximum. This technique properly knows as ALWAYS
BETTER CONTROL has universal application in many areas of
human endeavour. The techniques tires to analyze the distribution
of any characteristic by money value of importance in order to
determine its priority.
Class A Class B Class C Class
Items value 70% 20% 10%
Number of items 10% 20% 70%
(b) Economic Order Quantity:-Order quantity is defined as the
quantity or its rupee equivalent for which fresh order of as
inventory item is placed. The decision regarding order quantity of
various inventory items is of vital importance in the management
of the inventory item of which total of two types of cost opposing
each other will be the minimum at this level, the sum of all cost of
on type is exactly equal to the sum of all the cost of the other
type. Thus quantity is often referred to as economic order
quantity, for the purchase. Purchase item and economic lot size
for production item.

Determination of EOQ:-
The economic order quantity can be determined with the help of
the following formula:-
Formula

Q = 2AS/I

where Q stands for quantity per order ;A stands for annual

requirements of an item in terms of rupees; S stands for cost of
placement of an order in rupees; and I stand for inventory
carrying cost per unit per year in rupees.

(c) FSN Analysis:-In Apollo Hospital FSN analysis carried for

consumable items, which are used by multi users, FSN means fast
moving (F), slow moving (S), non-moving (N) items analysis. The
norms established by Apollo Hospital for each items are as
follows:-
1. Fast Moving Items:-Apollo Hospital has norms that fast
moving items have the following:-
1. It should have more than 5 issue transactions in
a year.
2. There should be multi user.
2. Slow Moving Items:-Apollo Hospital has norms that slow
moving items have the following;-
1. Items should have transaction between 1 to
5 times in a year
 2. There should be multi user.
3. Non Moving Items:-Apollo Hospital has norms that are
non-moving items have the following:-
1. Items have no issue transaction for last 3 years
2. Items should have some quantity available in all the
past three years.

(d) Zero inventories:-Apollo Hospital is continuously

maintaining the Just in time zero inventories of Raw Material like
gas. This is possible because the company has contracted with
such suppliers to provide the material on demand on time.

(e) Setting up of various stock levels:- To avoid over-stocking

and under stocking of materials, the management has to decide
about the maximum level, minimum level, re-order level, danger
level and average level of materials to be kept in the store. These
terms are explained below:-

(a) Re-ordering level:-It is also known as ordering level

or ordering point or ordering limit. It is a point at which
order for supply of material should be made. This level is
fixed somewhere between the maximum level and the
minimum level in such a way that the quantity of materials
represented by the difference between the re-ordering level
and the minimum level will be sufficient to meet the
demands of production till such time as the materials are
replenished. Reorder level depends mainly on the maximum
rate of consumption and order lead time. When this level is
reached, the store keeper will initiate the purchase
requisition.

Reordering level is calculated with the following formula:-

Re-order level =Maximum Rate of consumption x maximum lead

time.

(b) Maximum Level:-Maximum level is the level above

which stock should never reach. It is also known as
maximum limit or maximum stock. The function of
 maximum level is essential to avoid unnecessary blocking up
of capital in inventories, losses on account of deterioration
and obsolescence of materials, extra overheads and
temptation to thefts etc.

This level can be determined with the following formula:-

Maximum Stock level = Reordering level + Reordering quantity

(Minimum Consumption x Minimum re-ordering period).

(c) Minimum Level:-It represents the lowest quantity of a

particular material below which stock should not be allowed
to fall. This level must be maintained at every time so that
production is not held up due to shortage of any material. It
is that level of inventories of which a fresh order must be
placed to replenish the stock.

This level is usually determined through the following formula:-

Minimum Level = Re-ordering level (Normal rate of

consumption x Normal delivery period).

(d) Average Stock Level:-Average stock level is

determined by averaging the minimum and maximum level
of stock.

The formula for determination of the level is as follows:-

Average level =1/2 (Minimum stock level + Maximum stock

level).This may also be expressed by minimum level + 1/2 of Re-
ordering Quantity.

(e) Danger Level:-Danger level is that level below which

the stock should under no circumstances be allowed to fall.
Danger level is slightly below the minimum level and
therefore the purchases manager should make special
efforts to acquire required materials and stores.
This level can be calculated with the help of following
formula:-

Danger Level =Average rate of consumption x Emergency supply

time.

(f) Preparation of Inventory Budgets:-Organizations having

huge material requirement normally prepare purchase budgets.
The purchase budget should be prepared well in advance. The
budget for production and consumable material and for capital
and maintenance material should be separately prepared. Sales
budget generally provide the basis for preparation of production
plans. Therefore, the first step in the preparation of a purchase
budget is the establishment of sales budget. As per the
production plan, material schedule is prepared depending upon
the amount and return contained in the plan. To determine the
net quantities to be procured, necessary adjustments for the
stock already held is to be made. They are valued as standard
rate or current market. In this way, material procurement budget
is prepared. The budget so prepared should be communicated to
all departments concerned so that the actual purchase
commitments can be regulated as per budgets. At periodical
intervals actual are compared with the budgeted figures and
reported to management which provides a suitable basis for
controlling the purchase of materials.

(g)Maintaining Perpetual Inventory System:-This is another

technique to exercise control over inventory. It is also known as
automatic inventory system. The basic objective of this system is
to make available details about the quantity and value of stock of
each item at all times. Thus, this system provides a rigid control
over stock of materials as physical stock can be regularly verified
with the stock records kept in the stores and the cost office.
(h)Establishing Proper Purchase Procedures:-A proper
purchase procedure has to be established and adopted to ensure
necessary inventory control. The following steps are involved:-
(b) Purchase Requisition:-It is the requisition
made by the various departmental heads or
storekeeper for their various material
requirements. The initiation of purchase begins
with the receipts of a purchase requisition by the
purchase department.
(c) Inviting Quotations:-The purchase
department will invite quotations for supply of
goods on the receipt of purchase requisition.
(d) Schedule of Quotations:-The schedule of
quotations will be prepared by the purchase
department on the basis of quotations received.
(e) Approving the supplier:-The schedule of
quotations is put before the purchase committee
who selects the supplier by considering factors
like price, quality of materials, terms of payment,
delivery schedule etc.
(f) Purchase Order:-It is the last step and the
purchase order is prepared by the purchase
department. It is a written authorization to the
supplier to supply a specified quality and
quantity of material at the specified time and
place mentioned at the stipulated terms.

(i) Inventory Turnover Ratio:-

These are calculated to minimize the inventory by the use of the
following formula: Inventory Turnover Ratio= Cost of goods
consumed/sold during the period/Average inventory held during
the period

The ratio indicates how quickly the inventory is used for

production. Higher the ratio, shorter will be the duration of
inventory at the factory. It is the index of efficiency of material
management. The comparison of various inventory turnover
ratios at different items with those of previous years may reveal
the following four types of inventories:

(a) Slow moving Inventories:-These inventories

have a very low turnover ratio. Management should
take all possible steps to keep such inventories at the
lowest levels.
(b) Dormant Inventories:-These inventories have
no demand. The finance manager has to take a
decision whether such inventories should be retained
or scrapped based upon the current market price,
conditions etc.
(c) Obsolete Inventories:-These inventories are no
longer in demand due to their becoming out of
demand. Such inventories should be immediately
scrapped.
(d) Fast moving inventories:-These inventories are
in hot demand. Proper and special care should be
taken in respect of these inventories so that the
manufacturing process does not suffer due to
shortage of such inventories.

Perpetual inventory control system:-In a large b essential to

have information about continuous availability of different types
of materials and stores purchased, issued and their balance in
hand. The perpetual inventory control system enables the
manufacturer to know about the availability of these materials
and stores without undergoing the cumbersome process of
physical stock taking. Under this method, proper information
relating to receipt, issue and materials in hand is kept. The main
objective of this system is to have accurate information about the
stock level of every item at any time. Perpetual inventory control
system cannot-be successful unless and until it is accompanied by
a system of continuous stock taking i.e., checking the total stock
of the concern 3/4 times a year by picking 10/15 items daily (as
against physical stock taking which takes place once a year).The
items are taken in rotation. In order to have more effective
control, the process of continuous stock taking is usually
undertaken by a person other than the storekeeper. This will
check the functioning of storekeeper also. The items may be
selected at random to have a surprise check. The success of the
system of perpetual inventory control depends upon the proper
implementation of the system of continuous stock taking.

(3) Determination of Inventory Level:-The inventory level

concept consider store keeping as profit intensive service to
production store keeping should contribute directly to profitability
and be concerned with matter as flow, packing and dispatch.

There are various levels of stock which are established by the

Apollo Hospital are as follows:-
(1) Minimum Level
(2) Maximum Stock Level
(3) Average Stock Level
(4) Re-order Stock Level

(1) Minimum Level:-This is the level at which any future

demands upon the bill will necessary withdrawals from the
reserve stock.
The Minimum stock level is converted to meet exceptional
conditions of Demand. Two months usage of material taken into
considerations by the Apollo Hospital As a minimum stock level
Formula
Minimum Level of Inventory = OAL
Here, O= Order Point, A= Average Usage Rate, L= Average
Lead Time
(2) Maximum Stock Level:-This is the Level above which the
stock should not be permitted to rise. Eighteen months
consumption of stocks taken into considerations by Apollo
Hospital As a Maximum stock level.
Formula
Maximum Level= Re-order level or ordering point Minimum
usage Minimum re-order period + Economic order quantity
(3) Average Stock Level:-Average inventory is used to estimate
the amount of inventory that a business typically has on hand
over a longer time period than just the last month
Formula
Average stock level= (Beginning inventory + Ending
inventory) / 2

(4) Re-order Stock Level:-The Point of which the order has to

be placed. The Re-order level may not always be numerically
equal to the Economic Order Quantity. It should be regularly
reviewed for paid moving items. For fast factors as change in
demand, delivery times or variation in trend.
Formula
Reorder Level= Lead Time in Days Daily Average Usage +
Safety Stock

(4) Importance Substitution:-

Procedure Followed:-
a. Items are selected
b. It is checked for dimension as well as for
material of construction. It is also if
required check it with the help of metal
analyzer to know exact material of
construction. Drawings are developed
c. Local indigenous parties are developed to
get it manufactured locally.
d. Trials are taken after success it is stopped
procuring from abroad
(5) Supply Chain Management & Inventory Control:-Supply
chain management solve the purchasing problem by foregoing
the short term benefit of competitive bidding in order to develop
special long term relationship. In exchange the vendor coincides
his production schedule and quantity standards to plant needs
thus reducing uncertainty and hence the need for excess
inventories. The release and scheduling process with the supplier
consist of four steps:-
a. Make a long term purchase commitment to supplier.
b. Give supplier a monthly forecast for a rolling period of six
month of production.
c. Establishment with a supplier a monthly form release for
the next month of production.
d. Make an arrangement of supplier on the policy for
changing delivery dates.

Inventory Management and

Inventory Control Practice
In all the company they have all types of inventories. But the
main important thing is when and how many times control of
the inventories of all the companies is required. So in Apollo
Hospital control of all the inventories is mentioned as under:-
a) The Hospital regularly held the meeting with an
agenda of inventory controls. Meeting are held
quarterly, semi quarterly or annually as per the need.
The purpose is to see the loopholes and try to remove
it.
b) Brainstorming is to make control the problem of
excess inventory. By arranges such meeting, all the
concerned department are informed. The inventory
level is maintained with storing department. These
meeting are held as a part of constant performance
review.
 DATA

INTERPRETATION AND ITS

ANALYSIS
Jindal Stainless Steel Industry
Highlight
1. Globally, Stainless Steel production in 6 months of 2015 is
2.14 million mt, increase of about 4% From the previous 6
month
 2. Due to falling commodity prices the global sentiment
were low and prices under pressure

Stainless Steel Domestic Market

Growth
Y-O-Y Growth
Particula
2011-12 2012-13 2013-14 2014-15 2015-16
r
JSL 13% 20% 11% 10% 12%
Import 9% 24% -1% 37% 4%
Others 5% -16% -8% 26% -17%
Total 10% 14% 4% 20% 5%
Stainless Steel- Domestic Market
Share

100%

90%

80%

70%

60%
Other
50%
Import
40% JSL

30%

20%

10%

0%
2011-12 2012-13 2103-14 2014-15 2015-16

Jindal Stainless Limited Overview

Estimated Slab melting
Capacity(mt)
Company Region 2014 2015
Tsingshan China 4.4 4.3
Tisco China 4.2 4.2
Outokumpu Finland 4.0 3.6
Posco South 3.9 3.9
korea
Baosteel china 3.6 3.6
Yusco Taiwan 2.9 2.8
Jindal India 1.6 1.6
Stainless

Jindal Stainless Limited-Capacity

Jindal Stainless Limited- Sales

Trend(qty)
Financial Performance- JSL
 (Figures in
Crore)
Januar Februa March April May June
Particula y ry 2016 2016 2016 2016
r 2016 2016
Closing 46.24 48.57 44.45 39.23 50.34 45.55
Value
Receipt 68598 54883 74457 39063 41862 43487
Quantity 2 1 8 8 8 2
Receipt 15.20 14.45 17.34 14.45 14.34 13.56
Value
Total 61.44 63.02 61.79 53.58 64.68 59.11
Stock
Value
Total Stock Value =Closing Value+Receipt Value
363.62 (Crore) = 274.38(Crore) +89.34(Crore)
Work in Progress/Net Sales = (Opening Value+Receipt Value)-
Closing Value
3427(Crore) = (194.57+89.34)- 274.34

Closing Balance/Consumption = Total Inventory Closing Value

4656(Crore)= 363.73-274.34

Average stock level= (Beginning inventory + Ending inventory) /

2
246.59 = (150.34+240.23)/2
LIMITATION OF STUDY
1. Time period of 50 days in such big Company like
Jindal Stainless Limited is very small to carry out a
bigger project like inventory management.
2. The conceptual framework and research questions
have bound the study, keeping it focused, yet
simultaneously limiting the method and topic of the
research.
3. The recognized limitation of this study deal with the
topic, the material, and the lack of existing
management.
4. The number of departments, their items, and the
quantity and value of time spent in getting the
schedules filled were constraints balance by the
quality of the data gathered.

FINDINGS
In review this internship has been an excellent and
rewarding experience. I have been able to meet and network
with so many Inventory & supply chain management
Department Incharge that I am sure will be able to help me
with opportunity in the future.
ONLINE GATE ENTRY IN SAP:-

Security Handover the Documents

Document check (All the document are been provide d by
the vendor)
Type T-code Zmm31 (Online Entry)
Gate Entry No.
Create Entry
Security Gate Entry No.
Purchase Order
Execute
Show Gate Entry Screen
 Execute
Print

Material Receipts:-
Counter:-
Check Document on which plant
Store-1:- Starts from 61- 65(import)
Verification of Gate entry from unloading verification
Test Certificate, Guarantee Certificate, way bill, excise, non-
excise, lory receipts.
As per invoice requirement
Register maintain as per plant wise and entry in SAP
Daily Store Receipts report maintain in SAP
Work in SAP:-
T- Code Zmm19- Gate entry report
Type Gate entry No.
Gate entry report
Type Bill of Leading No.
Unloading Point
Store location

On Cases of Weighment:-
T- Code Zmm314- Gate entry unloading Status
Gate entry No.
Execute
Physical Verification:-
Proper checking of Documents
Material with Quality
If Storage or Excess ( intimate to supplier)
If any distorpancy intimate to section incharge
Process of Goods Receipt Note(GRN):-
T-Code Zmm34
Gate entry no.
Plant
Click on gate entry no.
Click auto MIGO(f9)
Enter till showing delivery or Bill of leading
 Check invoice no. Or in case not available invoice enter
Challan no.
Click bill of leading (JSL-129)
Enter till showing Qty.
Store Location
Goods Receipts
Unloading points enter location no.
Posting
For Purchase Order No.

T-Code- Me23n
Enter Po no
If store location not available
Click on Purchase Requisioner no.
Click Contact Person
Copy of Requisioner
Find copy PO no.
Showing
For GRN Cancel:-
Enter MIGO
Enter Material document no
Tab Where
Text click item ok click on

Material Issue:-
Material issue note- deposited in counter
For Checking T-Code (mmbe) SAP
Type Material code
Click execute
For material posting from inventory to various department
Mb1b Transport posting (mvt type 311)
Mb1a issue posting (mvt type 201,m61,221)
To reservation
Type enter adope details- Environment- Stock overview
Store material (Save)
CONCLUSION
In any business, make it big or small, we must understand that
taking good care of our inventory is very important. If we as
managers do not understand the concept of good inventory
management, we must learn to be familiar with it and its
applications. One of the reasons for the failure of a business is its
inventory management. There are many ways to fight failure, and
we can do is start from here. There are new technologies that can
help us maintain and supervise our inventory. What we can do is
learn, implement and evaluate our business. And you can start
with your INVENTORY.

Jindal Stainless Limited has truly changed the face of

servicing the global economy. Jindal Stainless Limited is
both a service and collection of management methods and
techniques used to eliminate waste (particularly inventory)
The JSL Inventory management is effective; JSL should make
a classification of its inventory in minimum categories.

BIBLIOGRAPHY
Websites

http://www.jindalstainless.com
http://www.google.com
http://www.slideshare.net
http://www.wikipedia.com