MANAGEMENT

ACCOUNTING
PRESENTED BY :
AYUSHA
VIKAS
PRANSHU
KARISHMA
YASHOVARDHAN
INDUSTRY of
Automobiles

Maruti Suzuki
Tata Motors
Hyundai
Ford
Toyota
 INVENTORY
MANAGEMENT
• Inventory management refers to keeping track
of a company’s stocked goods. It monitors
their weight, dimensions, amounts and
location.
• Effective inventory management is essential
for ensuring a business has enough stock on
hand to meet customer demand.
• Inventory management helps business stay
organized, reduce cost, keep the business
profitable.
 Techniques Of Inventory
Management
 First In First Out (FIFO)
 Just In Time
 Real Time Inventory
 Days Sales Inventory
 Last In First Out (LIFO)
 Economic Order Quantity (EOQ)
 Toyota Motor Corporation, is a
Japanese multinational
automotive manufacturer
headquartered in Toyota,
Aichi, Japan.
 Toyota is the world's second-
largest automotive manufacturer.
 Toyota was the world's first
automobile manufacturer to
produce more than 10 million
vehicles per year.
 JUST IN
TIME
 The inventory strategy adopted by Toyota is
Just in Time.
 Parts or raw materials are ordered as and
when they are needed in the production
process Just in time is a strategy to
increase efficiency and decrease waste by
receiving goods only as they are needed in
the production process.
 This helps the company in maintaining low
inventory levels as well as it lowers the
company carrying costs.
• Production runs short and quick move to
new product.
• Less warehouse expense.
• Frees cash flows.
• Small amount of money spent on raw
material.
Benefits To Company
 Maruti Udyog Ltd, is a joint venture
between Suzuki Motors of Japan and
the Indian government.
 Maruti is the leader in India's
automobile market.
 Maruti has the widest product range
among Indian car manufacturers.
 Now Maruti has realised the
importance of getting closer to its
customers.
 Maruti has improved its operational
efficiency by increasing productivity,
cutting costs and launching new
products.
 Vendor Management (VMI)

 Vendor management became an important method of inventory management

as Maruti attempted to improve operational efficiency.
 By this Maruti procured components worth about Rs.5,000 crores every year.
 Vendor Managed Inventory (VMI) is a business model where the buyer of a
product provides information to a vendor of that product and the
vendor takes full responsibility for maintaining an agreed inventory of the
material, usually at the buyer's consumption location.
 BENEFITS TO COMPANY
 More Control.
 VMI gives vendors more control so they can
accurately forecast demand.
 Strengthen Customer-Vendor Relationships.
 Reduced Inventory Costs.
 Reduced Inventory Overstocks and Stock
Shortages.
 Increases Sales to inventory ratio
 Hyundai Motor India Limited (HMIL) is a wholly
owned subsidiary of Hyundai Motor Company,
South Korea and is the second largest car
manufacturer and the largest passenger car
exporter from India.
 It is the third largest vehicle manufacturer in
the world. Hyundai operates the world's
largest integrated automobile manufacturing
facility.
 Real Time Inventory
 The inventory method used by Hyundai is real time inventory.
 Real time inventory management is the process of recording sales and
purchases of inventory immediately through the use of a software so that
company gains a complete picture of what's occurring with inventory.
 BENEFITS TO COMPANY
 Ithelps organization to react quicker to
supply chain needs.
 Improve decision making
 Increase productivity
Tata Motors Limited headquartered in Mumbai, is an Indian multinational automotive
manufacturing company and a member of the Tata Group.
Tata Motors Cars is a division of Tata Motors which produces passenger cars under the Tata
Motors marque.
 Tata Motors is among the top four passenger vehicle brands in India with products in the
compact, midsize car, and utility vehicle segments.
 It has the third-largest sales and service network after Maruti Suzuki and Hyundai.
Days sale inventory(DSI)
Days sale inventory is the technique adopted by tata
motors for inventory management. Days sale inventory is
an efficiency ratio that measures the average number of
days the company holds. It indicates the number of days
of goods in sales that a company has in the inventory.
 Benefits To Company
 Protection against unexpected spikes in
demand
 Prevention of stockouts
 Compensation for inaccurate market forecasts
 And a buffer for longer-than-expected lead
times
 Ford Motor Company is an American
multinational automaker
headquartered in Dearborn, Michigan, a
suburb of Detroit.
 The company sells automobiles and
commercial vehicles under the Ford
brand and most luxury cars under the
Lincoln brand.
 Ford is the second-largest U.S.-based
automaker and the fifth-largest in the
world.
 The two techniques EOQ and Just
In Time are one of the oldest
Economic
inventory methods.

OrderQuantity
 It reduces the holding cost as well
as carrying cost.
And
 With the help of these techniques
Ford Motor Company and its
Just In Time
suppliers are able to deliver just
the right amount of product or
inventory at a given time.
 These technique considers the
amount of time needed to
generate an order, to process,
manufacture, organize and
deliver on time.
 Benefits To Company

 Close working relationship between

all the parties.
 Keep the cost of inventory as low as
possible.
 Company’s growth