ABSTRACT

Inventory management and supply chain management had been the key factors for operational efficiency of industrial units across the global area.

The information technology era had augmented the necessity and also had provided a strong foundation for daily improvements in materials management. JIT Zero level inventory, zero defect, six sigma, were the movements that have created huge impact on modern production planning and management. MRP I and MRP II also had contributed to better operational in a factory.

JKM Automotive (A division of dynamatics technologies limited) company is the field of car engine manufacturing.

The company has been performing to the higher standard and the company has big destination to move on.

The company would like to automate the supply chain management and also should automate the supply processes in a most efficient way.

The purpose of this study is to minimize the scrap in the project. The result were interpreted from the table appropriate suggestions were provided for better continuous production . It was suggestion for minimize the scrap we have to follow proper operators and working continuously and the power supply change automatic.

INTRODUCTION

A comprehensive integrated business approach drive sustained exceptional performance of safety, quality, delivery cost and inventory.

The enormous growth in information technology and dense connectivity prevailing over all corners of the world had been creating a new technology revolution in this era. Outsourcing competitive edge and continuous innovation and improvements are the few concepts dominating the industrial sector.

JKM Automotive (A division of dynamatics technologies limited) in company is the field of car engine manufacturing.

The company has been performing to the higher standard and the company has big destination to move on.

The company would like to automate the supply chain management and also should automate the supply processes in a most efficient way.

A details study of the inventory management is being focused in this project.

COMPANY PROFILE

INDUSTRY PROFILE

India is the second-biggest market for small cars after Japan. It account for 60% of the domestic market. The history of automobile industry in India actually began about 4,000 years ago when the first wheel was used for transportation. In the early 15thcentury, the Portuguese arrived in china and the interaction of the two cultures led to a variety of new technologies, including the creation of a wheel that turned under its own power. By the 1600s, small steam- powered engine models were developed, but it was another century before full-sized engine-powered automobile was created.

India’s transport network is developing at a fast pace and the automobile industry is growing too. The automobile industry also provides employments to a large section of the population. Thus the role of automobile industry cannot be overlooked in Indian economy. It includes the manufacture of trucks, buses, passenger cars, defense vehicles, two wheelers etc. the industry can be broadly classified into the car manufacturing, two wheeler manufacturing and heavy vehicle- manufacturing units. The major car manufactures in India are Hindustan motors, Maruti Udyog, Fiat India private limited, Ford India ltd, General motors India pvt.ltd.

FACTS & FIGURES

It seems that India has finally arrived in the big league of Asian car markets. Steady and impressive annual growth rate, presence of international auto makers, relaxation of auto exchange and equity regulations, reduction of tariffs on imports and few others are the components of its booming auto market. The country has now come to be recognized as a potential emerging auto market.

Recent study says that by 2010 India will take over Germany in sales volume and Japan by 2012, India will by every sixth car products in the world. Apart from serving the domestic market, the auto sector has turned as a sourcing base for the global auto majors.

The auto components market is also in its full swing. As per the research The Indian automobile components industry is estimated to triple from USD 63 billion to USD 190 billion within a span of six year by 2012. Total turnover of the Indian automobile industry is expected to grow from USD 34 Billion IN 2006 TO USD 122 billion in 2016.Suzuki Motor Corp, Hyundai Motor Co, and Nissan Motor co are making India a manufacturing hub of mini cars.

The automobile industry designs, develops, manufactures, markets, and sell the world’s motor vehicles. In 2008, more than 70 million motor vehicles, including cars and

commercial vehicles were produced worldwide. Of the major markets, Russia, brazil, India and china saw the most rapid growth.

HISTORY

An embryonic automobile industry emerged in India in the 1940s. Following the independence, in 1953, the government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalization and the license raj which hampered the Indian private sector. After 1970s, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of firms initiated joint ventures with Indian companies.

In the 1980s, a number of Japanese manufacturers launched joint ventures for building motorcycles and light commercial vehicles. It was at this time that the Indian government chose Suzuki for its joint venture to manufacture small cars. Following the economic liberalization in 1991 and the gradual weakening of the license raj, a number of Indian and multinational cars companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands.

AUTOMOTIVE INDUSTRY CRISIS OF 2008-2009

The automotive industry crisis of 2008-2009 was a part of a global financial downturn. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The automotive industry was weakened by a substantial increase in the prices of automobile fuels linked to the 2003-2008 energy crisis which discouraged purchases of automobiles. The popularity and relatively high profit margins of these vehicles had encouraged the American “Big Three” automakers, General Motors, Ford, and Chrysler to make them their primary focus. With few fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned critical as the credit crunch placed pressure on the prices of raw materials.

OVERVIEW

Overview the passenger car market in the country was inching towards cars with higher displacements. The sport utility vehicle (SUV) that was getting crowded everyday would witness intense competition as many SUV’s had been competitively priced. Honda, Suzuki, general motors and Hyundai the global automakers had already launched their premium SUV’s in the market to broaden their portfolio and create product excitements in the segment estimated about 10,000 units annually.

In 2008, Hyundai motors alone exported 240,000 cars made in India. Nissan motors plans to export 250,000 vehicles manufactured in India by 2011. Similarly, general motors announced its plans to export about 50,000 cars manufactured in India by 2011.According to Bloomberg L.P.,in 2009 India surpassed China as Asia’s fourth largest exporter of cars.

JKM AUTOMOTIVE (A Division of Dynamatic Technologies Limited)

A PROFILE

Dynamatic Technologies Limited produces highly engineered products for the following applications:

Automotive Sector

Agricultural Equipment Industry

Aerospace Sector

Construction Equipment Industry

AUTOMOTIVE

JKM Automotive™, a division of Dynamatic Technologies Limited, produces high quality ferrous and non-ferrous critical engine and transmission components for the burgeoning global automobile industry. Located in Chennai, the automotive hub of India, JKM Automotive™ is single source to Global Automotive OEMs for critical engine and transmission components in three product segments: highway, off highway and technology.

JKM Automotive™ has registered stellar growth over the past decade, evolving from a green field venture into a dominant force in the Indian Auto Component Industry. The Division caters to over 40% of the Indian passenger car market including the Hyundai cars - Santro and Accent. JKM Automotives association with internationally renowned, progressive automotive OEMs keeps it constantly geared to anticipate and fulfill the challenges posed by the global automobile industry.

DYNAMETAL

Dynametal, a division of Dynamatic Technologies, produces high quality Non-Ferrous Alloy and Castings for Industrial, Automotive and Aerospace Applications. This foundry is located in Chennai. Dynametal, incorporates use of the latest metallurgical processes and differs radically from other conventional foundries as its heat treatment processes are designed to ensure castings are made with no inclusions, minimal melting loss and with the effective removal of gas from the metal. To achieve raw castings of high quality, Dynamental uses sophisticated machinery like till table gravity die casting machines, holding furnaces, impregnation plant, core

shooters, sand core making facilities, leak testing machines and shot blasting machines. The division is capable of executing Aluminum Gravity Die Cast parts with intricate contours.

HYDRAULICS:

Dynamatic is the market leader in the field of hydraulics. Dynamatic products literally reach every conceivable hydraulic user in India; enjoy very high brand recognition and a large market share. Dynamatic is an ISO 9001(2000 ver) company and its management systems adhere to international quality standards. The Company has a state-of-the-art production facility in Bangalore, Karnataka, which ably employs cutting edge technologies and highly sophisticated machinery to deliver premium quality. This facility is well equipped with excellent CNC machines and sophisticated quality control laboratories. The production process is designed to optimize time, efficiency and productivity while eliminating the non-value adding process. Total mechanization of the production process as well as the expertise of the personnel manning the machines ensures consistency in quality.

Dynamatic has once of the most extensive marketing networks for hydraulic products in India, with 16 branches and scores of distributors and stockists spread across the length and breadth of the country'.

FLUID POWER SYSTEMS:

The Company provide custom tailored solutions for customers. Their products range from simple Hydraulic Pumping Units to sophisticated Marine Power Packs, complex Aircraft Ground Support Systems to turnkey Industrial Installations.

AEROSPACE

Dynamatic Aerospace, a division of Dynamatic Technologies Ltd., a division of Dynamatic Technologies Ltd, is a pioneer and a recognized leader in the Indian Private Sector for the development of complex aero structures. Instituted in 1995, this division is currently headed by Air Cmde. (Retd.) Ravish Malhotra, one of India's two cosmonauts. Dynamatic Aerospace has closely partnered Agencies of national importance like Ministry of Defense, Hindustan Aeronautics Limited, and other defence establishments on key projects including the Lakshya, India's Pilotless Target Aircraft, HJT-36 Intermediate Jet Trainer and Sukhoi MKI 30 Fighter Bomber. Products include the Wing and Rear Fuselage of the LAKSHYA, Ailerons Flaps for the wings for the HJT-36 and Fins, Ventral Fins, Slats, Vertical & Horizontal Stabiliser, Canards and Air Brakes for the Sukhoi 30 MKI fighter bomber.

Dynamatic Aerospace is considered to be one of the most reliable quality vendors to the DRDO and was presented with the 'Creative Partner' Award for the year 1998-99 by DRDO, ADE and ASIEO. The Aircraft Division of HAL in Bangalore also presented this division with the 'HAL Best Vendor Award' for 2002-03. Dynamatic Aerospace has the largest

infrastructure in the Indian Private sector for manufacture of exacting Air Frame Structures and Precision Aerospace Components. This is the first time such capabilities have been built in the Indian Private sector. The Division is now consolidating its position through collaborations with International Aerospace majors on exports initiatives.

RESEARCH & DEVELOPMENT:

Dynamatic has transformed itself into a knowledge-based organization through its sustained R&D efforts. Dynamatic undertakes Research & Development at its state-of-the-art Center as well as through Power metric its CAD/CAM engineering services and training division.

The Research & Development center at Dynamatic Park is completely electronic, and utilises Parametric 3D Design programs and knowledge based expert systems. Recently, Dynamatic implemented a Collaborative Product Commerce (CPC) program incorporating the sophisticated CPC software 'Windchill, which helps in integrating enterprise wide, product life-cycle management systems to enable development of rapid time-to-market product designs.

In 2001, Dynamatic was awarded the status of ' Recognized In-house R&D Unit', by the Department of Scientific and Industrial Research (DSIR), Government of Given our broad business focus, there is enormous bandwidth of knowledge available within the Company. Using this knowledge, Dynamatic has made tremendous achievements in product development by creating various new products and has executed R&D services for many internationally reputed customers like General Electric, Volvo Renault, John Deere, Same Deutz-Fahr and New Holland; as well as for critical national establishments such as, HVF, CVRDE and the Indian Air Force.

DISTRIBUTION:

To leverage on its distribution strengths, Dynamatic has entered into marketing tie-ups with ATOS spa, Italy, and Walvoil spa, Italy, for the national level distribution of the ATOS range of electro-hydraulic products, the Walvoil range of mobile control valves and Oleostar cartridge valves.

MILESTONES

Company established Aug 1997. Start of Production Oct 1998. Certification to QS 9000 May 2001. Major expansion of Plant 1 2001/2002. Start of export Business June 2003. Major expansion of Plant 1 2003/2004. 100 PPM certified by HMIL Oct 2004. Certification to TS 16949 Feb 2005. Inauguration of Plant 2 Sep 2007. Certification to ISO 14000 & OHSAS 18000 Dec 2007. Certified to FORD Q1 Apr 2008.

CUSTOMER PROFILE

DOMESTIC

HYUNDAI

TATA

MAHINDRA

FIAT

GM

CUMMINS

JOHN DEERE

HONEYWELL

GARRETT

FORD

SUPPLIER PROFILE

CASTINGS

ASWINI FLOW WELL CASTING

EXCEL DIE CASTING

PONDY DIE CASTING

SURIYA ENTERPRISES

SUBPARTS

INDO SCHOTTLE AUTO OARTS

ICMPL

SELVAMBIGAIENTERPRISES

SS FABCOM

PRODUCT PROFILE

PRODUCT PROFILE – I10

Case Assy front (Oil pump) Pump Assy water (Water pump) Manifold Assy Inlet Manifold Assy Exhaust Fork Shift 1,2 Fork Shift 3,4 Fork Shift 5,R Rocker Arm ‘A’ Rocker Arm ‘B’ Cam cap thrust Cover Rocker Case oil seal Assy.

PRODUCT PROFILE – ACCENT & GETZ:

Case Assy front (Oil pump) Pump Assy water (Water pump), Manifold Assy, Inlet Manifold Assy Exhaust Fork Shift 1,2 Fork Shift 3,4 Fork Shift 5,R Cam cap Shaft Bearing 1 Cam cap Shaft Bearing 2 Cam cap Shaft Bearing 3 Cam cap Shaft Bearing 4 Cam cap Shaft Bearing 5 Manifold Assy Inlet – Getz.

PRODUCT PROFILE – SANTRO:

Case Assy front (Oil pump) Pump Assy water (Water pump) Manifold Assy Inlet Manifold Assy Exhaust Fork Shift 1,2 Fork Shift 3,4 Fork Shift 5,R Rocker Arm ‘A’ Rocker Arm ‘B’ Cam cap thrust Pulley – water pump Cover Rocker Case oil seal Assy.

INTRODUCTION ABOUT PRODUCTS:

JKM PRODUCTS IN CUMMINS:

QST 30 COVER QST 30 BODY HMP BODY KV SMALL SUPPORT KV BIG SUPPORT SUPPORT ACCESS DRIVE QST 30 IMPELLER HHP IMPELLER HSP 453 HHP IMPELLER HSP 454

JKM PRODUCTS IN FORD:

FORD COVER FORD BODY FORD PULLER FORD CAM CAP 1-4 FORD CA M CAP 1-5

JKM PRODUCTS IN TATA:

TELCO OIL PUMP TELCO WATER PUMP TELCO OIL PUMP COVER TELCO FUEL RAIL E2 TELCO FUEL RAIL E3

JKM PRODUCTS GM SHIFT

GM SHIFT ARM 2ND

GM SHIFT ARM 3RD

JKM PRODUCTS IN JOHN DEERE

JD GEAR CASE JD GEAR BOX LHS JD GEAR BOX RHS

JKM PRODUCTS IN HMIL

PA EXMANI NMXI EXMANI NMXI CASE LCI WATER PUMP

Q UALITY POLICY:

JKM DAETIM AUTOMOTIVE LIMITED is involved in the manufacture of high precision components and assemblies for automotive applications.

It is our policy to provide creative & innovative solutions to delight our customers at cost effective prices on a continuous basis.

By continually delivering superior value to our customers we will build a successful business model for ourselves capable of returning high yields to investors and improving the quality of life of all employees.

All processes will be Eco-friendly and be designed to be eliminate wastage. All employees will strive to constantly expand the boundaries of knowledge through imagination and diligence.

This policy is implemented through our quality system which operators in accordance with ISO/TS 16949:2002 the International Quality Standard.

ISO / TS 16949:2009(QMS)

Quality Management System

ISO 14001:2004(EMS)

Environment Management System

OHSAS 18001:2007

Occupational Health & Safety Assessment Service

Main Customers:

Plant I – Ford, Tata, Nissan, Cummins

Plant II – Hyndai

Customer Vice Sales Breakage In 2008-09

CUSTOMER PERCENTAGE

HMIL 85%CUMMINS 2%FORD 3%MISCELLANOUS 1%HONEY WELL 1%TATA MOTORS 7%JOIN DEERE-NEW PROJECTS 2%OTHERS 0%

PERCENTAGE

HMILCUMMINSFORDMISCELLANOUSHONYWELLTATA MOTERSJOHN DEERE- New ProjectOTHERS

Customer Vice Sales Breakage In 2009-10

CUSTOMER PERCENTAGEHMIL 78%CUMMINS 3%FORD 3%MISCELLANOUS 1%HONYWELL 8%TATA MOTERS 5%JOHN DEERE- New Project 1%OTHERS 1%

PERCENTAGE

HMILCUMMINSFORDMISCELLANOUSHONYWELLTATA MOTERSJOHN DEERE- New ProjectOTHERS

Main Products Customer Volumes:

PRODUCTS TYPES CUSTOMER VOLUME/YEAR

Water pump 5 Hundai Tata Cummins 500000

Oil Pump 6 Ford Cummins Hundai Tata 780000

Intel Main Fold 5 Hundai Tata 450000

Exmain Fold 9 Hundai Tata Mahindra 500000

Compressor Housing 14 Honey Well –thro Honeywell to ford Nissan

1200000

Fuel Rail 4 Tata Mishaubishe 170000

Rocker Arms 4 Hundai Tata 400000

Fork Shift 15 Hundai Gm Getrag Ford 2000000

INVENTORY MANAGEMENT

Inventory management had been the focus of the global industrial competition. The Global trends talk about zero level inventory management. Jit and six sigma concepts and these driving forces had changed the competitiveness on various dimensions. The ordinary dictionary meaning of inventory is complete list of goods.

Inventory is company today inventory is tomorrow’s production.

Inventories are assets held for sale in the ordinary course of business or in the process of production for such sale or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Raw materials work-in-progress(semi-finished goods) and finished goods comprise the main inventory of any firm while stock of raw materials includes tools and spares finished goods are the end products of the whole process and await sales.

Three major components of inventory, inventory of finished goods is the most liquid and has got the potentialities to get converted into cash whereas inventory of raw material need semi-finished goods are away from excitability.

In economies like japan the concept of just in time inventory has done miracles. Companies could perform with zero or near level of inventory. This outlook gives the entire problem of inventory is fully synchronized with the demand for finished goods.

But in an economy like india the factors of fluctuations make the problem altogether and lead us to maintain inventory at different levels of production.

THE PURPOSE OF INVENTORY

Why do we need inventory ? As discussed in just in time manufacturing environment inventory is considered waste. However in environments where an organization suffers from poor cash flow or lacks strong control over.

Electronic information transfer among all departments and all significant suppliers.

Lead times and

Quality of materials received.

Inventory plays important roles. Some of the more important reasons for obtaining and holding inventory are predictability fluctuations in demand unreliability of supply price protection quantity discounts and lower ordering costs.

Purchase production and sale departments are mainly concerned with the management of inventories. Their officials always try to have large stocks of inventories to facilitate production and marketing of product. If requires large amount of investment in inventories and shall increase the cost of product by the amount of interest payable on such investment. It is therefore the prime responsibility of the financial executives to have a proper management and control over the investment in inventories so that it should not be unprofitable for the business. For this example, financial management should take care of the maximum and minimum limits of stock of inventories in the business to have continuity in production process. The inventory management includes the following aspect:

Size of inventory - maximum and minimum level,

Establishing timing schedules procedures and lot of sizes for new orders,

Ascertaining minimum levels safety levels.

Coordinating sales production and inventory policies .

Providing proper storage facilities;

Arranging the receipts disbursements and procurement of materials and developing the forms of recording these transactions.

Assigning responsibilities for carrying out inventory control functions and

Providing the report necessary for supervising the over all activity.

Inventory as a current asset differs from other current asset because only the firm are not involved. Rather all the functional areas i.e finance, marketing, production, and purchasing are involved. The views concerning the appropriate level of inventory would differ among the different functional areas.

TWO BIN SYSTEM

DEFINITION

Inventory control method (used usually or low values items) in which when the first bin is used up an order is made out for replenishment. The second bin contains enough quantity of the item to last until the ordered quantity arrives.

We certainly have managed to make many things overly complicated during recent years. For examples we have invested great sums of money in complex computer systems designed to tell us when to order parts. Often these systems take months to implement do not perform as promised and generate a great deal of frustration throughout the organization.

As an alternative to a complex system I want to remind you of a simple yet effective system for replenishing your inventory. I am talking about the two-bin system of recording parts which often gets overlooked in our zeal to computerize everything. Two bin system works well for ordering everything from certain product inventory items to consumable supplies including office products.

The two bin system is exactly that a system that requires two storage containers. The containers will each hold a predetermined quantity of the same material. The quantities may be the same or one may hold a larger quantity than the other.

Quite Simply The Two Bin System Works As Follows;

Two bins of item are created;

The first bin is stacked on top of or in front of the second bin.

A recorder card is placed on the bottom of each bin.

Material is drawn from the first (or most accessible)bin only.

When the first bin is empty it is exchanged with the second bin.

The recorder card is used to replace items in the first bin. Material is then drawn from the second bin while waiting for receipt of the

material on order.

When the new materials arrives it is placed in the empty bin and the recorder card is returned to its proper place in the bin.

The procedure is continued with material being selected from one bin until it is depleted. The material is then replenished through use of the recording card.

As long as the quantity of the material in each bin is the same you can continue to deplete one bin; place the order for the replenishment amount then deplete the second bin and so forth. However if the second bin has a smaller quantity of material than the first bin (there may be an advantage in doing this if the material is expensive and you do not want to have a high volume of material in stock when issuing are placement order.), then the quantity in the second bin(called the recorder point quantity) must be sufficient to cover the time required to receive the material(ordering lead time).

The two bin system is a simple procedure mainly because we are not relying on a computer to tell us when to order. Instead we are relying on our own eyes. Training is necessary to ensure that warehouse personnel know to recorder material when one bin is empty. Not doing training will likely lead to unanticipated stock outs.

The only analysis required in the two-bin system is the recorder point quantity to be placed in the second bin. Most companies are overly conservative with this quantity because they are fearful of running out stock. As a result they set this recorder point quantity too high so materials arrives before it is actually needed.

The two-bin system is easy to implement and maintain and it is typically just as effective as any complex computer driven system used to recorder parts.

BIN CARD:

Bin card is a record of movement of materials against each kind of stock in respect of daily transactions, which is attached to each bin or shelf or any other form of containers. It shows daily receipts issues and balance quantity on land. The card also shows maximum and minimum re-order level. It is an essential record kept in stores for the following purposes.

Exact position of materials is known as against each receipt and issue.

Information pertaining to stock levels and the quantity balance on land is immediately known.

Code numbers and full description of the materials are given.

It serves as a check on stock ledger and helps in physical verification of stores.

MATERIAL REQUEST (MR):

It is written document whenever materials are required by the production department a document known as material requisition slip is sent to the stores. Stores should verify the following in this connection.

Materials requisition slip must be signed by the authorized person.

The material required should contain all relevant information-code number, description, quantity required etc.

Three copies are prepared the first copy is sent to the issuing authority the second copy is meant for stores record and the third copy for stock accounts.

FIRST IN FIRST OUT (FIFO)

Under inventory management in JKM Automotive (A division of dynamatics technologies limited) the follow FIFO method.

This method operates under the assumptions that the materials which are received first are issued first and therefore the flow of cost materials should also be in the same order. Issues are priced at the same time basis until the first batch received is used up after which the price of the next batch received becomes the issue price. Upon this batch being fully used the price of the next batch is used for pricing and so on.

ADVANTAGES:

This method is realistic in so far as it is assumed that the material are issued to production in the order of the receipts.

The valuation of the closing stock tense to be nearer to current market price as well as at cost.

Being based on cost no unrealized profits enter in to the financial results.

The method is easy to operates is the prices is do not fluctuate very frequently.

DISADVANTAGES:

The issue prices may not reflect current market prices and therefore when price increases the cost of production is unduly low.

The cost of consecutive similar jobs may differ simply because the prior job exhausted the supply of earlier period stock. This renders comparison between different jobs difficult.

The method involve cumbersome calculations if the prices fluctuate quite frequently

ORION SOFTWARE

ORION Enterprise for Manufacturing

ORION Enterprise is a comprehensive ERP solution that defines and streamlines the production process, optimizes capacity, and increases process efficiency in manufacturing organizations. With its robust, flexible architecture and integrated tools suite, this multi-currency, multi-location solution ensures quality, increases plant throughput, contains costs, and improves delivery performance.

It includes the following key modules:

Forecasting

Maintenance

Manufacturing

Purchase and sales

Inventory

Procurement

Quality assurance

Finance

Key business benefits:

Increased plant throughput, improved productivity, and reduced costs via streamlined operations and automation of key processes Efficient financial management with streamlined order-to-cash and procure-to-pay processes Market adaptability with multi-company, multi-location support Enhanced quality management and improved delivery performance with advanced inventory management, batch management, and process management tools Better and swifter decision-making capabilities with ORION powerful integrated information system

PURPOSE OF THE STUDY

The need for the study is to identity how the inventory is being managed in the company and observe the company and observe the activities there by carried on in manufacturing process of the organization.

The main purpose of my work at JKM Automotive (A division of dynamatics technologies limited) is to identified the reason for over scrap and to provide solution to control them.

SCOPE OF THE STUDY

This study will help the company to take investment decision and to develop strategic about investment.

To analyze the movement of materials and policy followed by the company.

This study covers the Financial and Production department of JKM Automotive (A division of dynamatics technologies limited).

It covers one of the branch of JKM, Automotive (A division of dynamatics technologies limited) which is at Chennai.

OBJECTIVE OF MY STUDY

To analyze the movement of raw material of the company.

To suggest ways to betterment of sales of the slow moving goods.

To avoid over scrap and to have check in under scrap.

To ensure optimum inventory that supports continuous production of the industry.

LIMITATIONS OF THE STUDY

There was time constraint to complete the project with in stipulated time frame.

Due to work pressure the officials were not able to provide the full information on time.

Due the lack of time the sample size was forced to reduce.

REVIEW OF LITERATURE

Material resource planning (MRP) has become the centerpiece for all manufacturing systems. The key to successful production and operation management in a manufacturing company is the balancing of requirements and capacities. Since the study of focus on inventory management and materials management the basic concepts in production scheduling capacity planning operational control and inventory management were obtained and gathered from the production and inventory management by W.L Berry and D. Clay why bark production planning and inventory control by D.W.

A main objective of the just in time (JIT) paradigm is to virtually abolish inventories. The efforts made have been more or less successful. It can be defined as the ability to respond to changes in the environment. In the case of a manufacturer flexibility is the ability to change the output in response to changes in the demand. In a supply chain the flexibility of one entity is highly dependent on the flexibility of upstream entities. The overall flexibility of a supply chain will therefore depend on the flexibility of all the entities in a supply chain and their interrelations. The modern developments and technology trends were obtained from readings from elements of sequencing and scheduling by K.R.Baker and operations scheduling with applications in manufacturing services by M.Pinedo and X.Chao.

The analysis of the supply chain prevailing in the company and also inventory system that was practiced were essential and the modern developments in SCM and various models available and the necessary precautions that were considered were derived from the discussed concepts in A Practical approach to production scheduling by S.M.Lee and L.J.moore simulation testing of aggregate production planning models in an implementation methodology by W.B.Lee and B.M.Khumawala and Tutorial on production smoothing and workforce balancing by E.A.Silver.

The basic research framework methodology research design and concepts in a scientific investigation were obtained from Research perspective for material requirements planning systems ‘production and inventory management’.

The data analysis method and calculation methods were adapted from essential methods in business statistics by dubois E.N

Information about the company the products and other information related to the industry were obtained from company’s internal sources and information available in official web site of the company and search through web search service providers.

Orion manual was referred for the application of orion in inventory management.

Production management books named production and operations management by Panner selvam R. and production and materials management by P. Saravanavel and S.sumathi was also referred

Findings :

Everyday nearly 5 to 6 times power will be cut. So it affect the production.

For using new operators man power we have to face some problem in production affect.

For reducing over scrap we have to reduce the loss.

Suggestions:

To reduce the scrap we have to maintain proper manpower and power supply.

RESEARCH METHODOLOGY

Significance Of The Study

Inventory management is very important because of the cost incurred due to holding esp of non utilized or those which occupy more duration in the factory or those which become obsolete. The car engine are significant and the industry is facing competition and unless the inventories are properly managed it would be difficult for the company to reach operational advantage. The study focuses on inventory management and attempt to solve the supply problems for the company.

AIM

The aim of the study was to suggest efficient inventory management system using the ORION concepts.

SOURCES OF DATA COLLECTION:

The study was based on secondary source of data. Secondary data have been mainly obtained from annual reports records and books of JKM Automotive limited in Chennai.

PERIOD OF STUDY

Data of 3 financial years are used for the purpose of study. The 3 years of study ranges from 2009-2011. The study was carried out during August 2011

RESEARCH METHODOLOGY

Research Process

Under 2-bin system choose to be the sample size based on the moving price.

Data was collected from the company historical data.

Using ORION the required calculations were performed.

CLASSIFICATION

Type: Exploratory study

Data type : Original historical data of inventory

Data analysis method : ORION

DATA ANALYSIS AND INTERPRETATIONS

The ORION results were entered and tabulated in Ms.Excel and the result were presented in the form of bar diagram.

RESULTS

Stock Inward Year Raw Material

2008-2009 3.742009-2010 4.762010-2011 5.94

2008-2009 2009-2010 2010-20110

1

2

3

4

5

6

7

3.74 Crores

4.76 Crores

5.94 Crores

Raw Material

Stock Inward

Year Sub Components 2008-2009 3.912009-2010 4.762010-2011 7.21

2008-2009 2009-2010 2010-20110

1

2

3

4

5

6

7

8

3.91 Crores

4.76 Crores

7.21 Crores

Sub Components

SUPPLIER : AVANTI COMPONENTS Purchase Return

Year Value2008-2009 64952.92009-2010 33229.662010-2011 17595.95

2008-2009 2009-2010 2010-20110

10000

20000

30000

40000

50000

60000

7000064952.9

33229.66

17595.95

Purchase Return

SUPPLIER : HI FIT INDUSTRIESPurchase Return

Year Value2008-2009 12831.672009-2010 4151.422010-2011 3264.62

2008-2009 2009-2010 2010-20110

2000

4000

6000

8000

10000

12000

14000

12831.67

4151.42

3264.62

Purchase Return

SUPPLIER : JS AUTO CAST FORMULATINGPurchase Return

Year Value2008-2009 18843160.792009-2010 7370337.362010-2011 2584045.61

2008-2009 2009-2010 2010-20110

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

20000000 18843160.79

7370337.36

2584045.61

Purchase Return

SUPPLIER : SELVAMBIKAI ENTERPRISESPurchase Return

Year Value2008-2009 63360.32009-2010 33981.282010-2011 0

2008-2009 2009-2010 2010-20110

10000

20000

30000

40000

50000

60000

70000 63360.3

33981.28

0

Purchase Return

JKM Net Sales DetailsYear Value

2008-2009 18953644842009-2010 17640803752010-2011 1751026160

2008-2009 2009-2010 2010-20111650000000

1700000000

1750000000

1800000000

1850000000

1900000000

1950000000

189.53 Crores

176.40 Crores175.10 Crores

JKM Net Sales Details

CONCLUSION

Inventory management is very important for any company to achieve its goals

of profit maximization. Through optimum allocation of working capital towards procurement of

raw material we have to reduce the over scrap we reduce the loss.