A STUDY ON INVENTORY MANAGEMENT IN NEXTEER AUTOMOTIVE INDIA PVT.

LTD
Submitted in partial fulfillment of the Requirement for the award of the Degree in Master of Business Administration VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELGAUM.

Submitted By: ARUN KUMAR.A (1SB09MBA01)

Internal guide Mrs. M. REVATY VISHAL HOD, MBA DEPARTMENT SSEC

External guide Mr. ANANTHA DESAI PC&L ASSISTANT MANAGER

SHIRDI SAI ENGINEERING COLLEGE Anekal, Bangalore-562106 (2010-2011)

CERTIFICATE
This is to certify that Mr. ARUN KUMAR A (1SB09MBA01) is a student of MBA final year in our Institution has prepared project report entitled INVENTORY MANAGEMENT at NEXTEER AUTOMOTIVE PRIVATE LIMITED Bangalore, in partial fulfillment of the degree of Master of Business Administration as prescribed by the Visvesvaraya Technological University, Belgaum for the academic year 2010-2011 under my supervision and guidance.

Further it is certified that this project or part thereof has not been previously submitted to any other university for the award of the degree.

Place: Bangalore Date:

Internal guide

DECLARATION

I hereby declare that this project entitled A STUDY ON INVENTORY MANAGEMENT AT NEXTEER AUTOMOTIVE INDIA PRIVATE

LIMITED, BANGALORE has been prepared by me during the academic year 2010-2011 under the guidance of Mrs. M. REVATY VISHAL Department of MBA SSEC , Anekal ,Bangalore . I also declare that this project entitled has not been submitted to any other university or institution for the award of any degree diploma, associate ship or fellowship.

Date: Place: Bangalore

ARUN KUMAR.A USN :- (1SB09MBA01)

ACKNOWLEDGEMENT
At the outset, I would like to express my deep sense of gratitude and sincere thanks to Our principal Dr. T V. Govindaraju, Shirdi Sai Engineering College, Bangalore for providing an opportunity to discover the corporate world, from a close prospective.

I am greatly indebted to Mrs. M.Revaty vishal Head of MBA Department, Shirdi Sai Engineering College, Bangalore, who had been my guiding light throughout the project. Without her immense help and unfailing support; this would not have been possible.

I also express my heart full gratitude to Mr.PUTTANNA (HRD) & ANANTHA DESAI (PC&L) and finally to of NEXTEER AUTOMOTIVE INDIA PVT.LTD. for granting me permission to carry out this project research work in their organization for the help they rendered me throughout the study.

My heart full wishes to NEXTEER AUTOMOTIVE INDIA PVT.LTD. for making these ten weeks for stepping stone to my career. I convey my gratitude to all the staff members of the company for their kind co-operation throughout my project.

Place: Bangalore Date:

ARUN KUMAR.A USN: 1SB09MBA01

CONTENTS PART A 1. INDUSTRY PROFILE 2. COMPANY PROFILE a) b) c) d) e) f) g) h) i) j) Background and inception of the company Nature of the business carried Vision, Mission and Quality Policy Products/services profile Area of Operation Ownership Pattern Competitors Information Infrastructural Facilities Achievements / Rewards Work flow model (end to end) PAGE NO. 01-02 03-04 06 07 08-09 10-13 14 15 16 17 18 19 20 21-26 27-29 30 31

k) Future growth and prospects 3. Mckensys 7S Frame Work 4. SWOT analysis 5. Analysis of Financial statement 6. Learning experience

CONTENTS PART-B PAGE NO 32-34 1. General Introduction a) Statement of the problem b) Objectives of the study c) Scope of the study d) Methodology e) Limitations of the study 35 36 37 38 39

2. Data Analysis

40-78

3. Findings

79

4. Suggestion

80

5. Conclusion

81

6. Bibliography

82

7. Annexure

83-89

LIST OF TABLES
TABLE NO PARTICULERS PAGE NO

PART- A
1

Table Showing Current ratio and quick ratio

30

PART- B
1 2 3 4 5 6 7 8 9 10 11 12

Table showing % of items and category of ABC The table showing the economic order quantity Table showing current ratio
Table showing inventory holding period Table showing % of inventory in current assets

51 56 63 65 67 69 71 73 75 77 83-86 87-89

Tale showing Inventory Turnover Ratio Table showing Work-in-progress turnover ratio Table showing turnover of the Stores and Spares Inventory Table showing turnover of the finished goods Inventory Table showing Inventory Conversion in number of days The balance sheet of Nexteer Automotive Pvt. ltd The P & L a/c of Nexteer Automotive Pvt. ltd

LIST OF GRAPHS
FIGURE NO PARTICULERS PART A
1 2 3 4 5

PAGE NO

Quality policy
Steering and driveline capabilities

09 13 19 21 22

Work flow model Mckensys 7S Frame Work Model Structure of organization PART B

1 2 3 4 5 6 7 8 9 10

The Chart Showing The ABC Analysis The Chart Showing The EOQ Analysis Graph showing current ratio
Graph showing inventory holding period Graph showing % of inventory in current assets Graph showing Inventory Turnover Ratio

52 62 64 66 68 70 72 74 76 78

Graph showing Work-in-progress turnover ratio Graph showing turnover of the Stores and Spares Inventory (%) Graph showing turnover of the finished goods Inventory (%) Graph showing Inventory Conversion in number of days

EXECUTIVE SUMMARY:
The present study is conducted with specific reference to the Nexteer Automotive Pvt Ltd,Bangalore. The study entitled INVENTORY MANAGEMENT a study thus tries to know the organization structure and workings structure of the company. The study aims to know the different departments working in the organization and how they co-ordinate each other to achieve the organization goals. The company is one of the leading manufacturers of steering columns, steering pumps, brake drums. Related customized electric equipments especially for industrial need, with distribution network all over the nation and also overseas. The purpose of the project is to understand and analyze the present inventory management system practiced in the company. And also to find new strategy tools to control inventory that have evolved over time. Inventory refers to the stockpile of the products that firm would sell in future in the normal course of business and the components that makes up the product. Inventory includes raw materials, work-in process and finished goods. As a manufacturing firm Nexteer Automotive Pvt Ltd, carries a definite portion of its asset in the form of Inventory. Just like any investment in business, inventory needs to serve the purpose of maximizing profit. However inventory has turned into a major cash flow constraint thus making it necessary to optimize inventory using analytical and statistical methods in an integrated approach. The management of inventory is different from the management of other current assets in that virtually all the functional areas are involved. The job of a purchase manager is to reconcile the conflicting viewpoints of the various functional areas regarding the appropriate inventory level. One of the biggest challenges in optimizing inventory is the fact that it is merely an output of many inter-organizational processes. All too often organizations attempt to lower inventory using non-analytical approaches which lower service levels. Although counterintuitive, it in fact is possible to reduce inventory while improving service levels simultaneously using proper inventory management methodology.