1. A
PRESENTATION
ON
“A comprehensive study of
INVENTORY MANGEMENT SYSTEM AT IFFCO, KALOL”
Submitted to:
(Kalol Institute of Management)
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF
Asst. professor : Ms. AVNI PATEL Presented by:
RAVI SHARMA
Enrolment No.: 117250592103
FARHAN GHANCHI
Enrolment No.:117250592074
Batch : 2011-13
2. Flow of Presentation
Industry Overview
SWOT Analysis
Aims and Objectives
Sources of Data
Sampling Technique And Sample Size
Scope and Methodology
Questionnaire Analysis
Findings and Suggestion
Conclusion
3. INDUSTRY OVERVIEW
Introduction to the Fertilizer Industry of India:
The Indian fertilizer industry is broadly divided into
nitrogenous, phosphatic and potassic segments.
In addition to these, nutrients are combined to produce
several complex fertilizers. To express the nutrient
constitution of fertilizers, the grade of a fertilizer is
expressed as a set of three numbers in the order of
percent of Nitrogen (N), Phosphate (P) and Potash (K).
4. COMPANY PROFILE
The Indian Farmers Fertilizer Co-operative Limited (IFFCO)
is one of the largest producers of fertilizer in India .
The first plant of IFFCO was commissioned at Kalol
in November 1974 to produce Ammonia .
Urea plant was commissioned in January 1975, which began
its commercial production on 1st April 1975. Kalol plant has
a capacity of 300300 tones of ammonia and 396000 tones
Urea per year.
The Kandla plant was commissioned on 26th November
1974
The ammonia plant at Phulpur started its commercial
production on 10th October 1980
The Aonla plant, fourth in the series, started commercial
production in July 1988.
5. SWOT ANALYSIS
STRENGTHS WEAKNESS
1.Largest producer of fertilizers in 1.IFFCO has a bureaucratic
the Country. organisational structure.
2.Organisational setup is very rigid.
2.Five strategically located plants 3.Excessive sub-divisions.
with cutting edge production
technologies.
3.Most plants achieve capacity
utilization in excess of 100% .
4.A large number of co-operative
societies are associated with
IFFCO (38,155 at present).
5.Vast Marketing and distribution
network due to the high number
of co-operatives associated
with IFFCO.
6. SWOT ANALYSIS
OPPORTUNITY THREAT
GROWTH PLAN KRIBHCO
• 1.Installation of Ammonia/Urea Private Companies
plants and also acquisition of
fertilizer units. Govt. Of India influence.
•2.Generation of Power Government policies on Import of
•3.Production and Marketing of fertilizers.
micro-nutrients, seeds, bio-
fertilizers, pesticides etc.
•4.Value addition to agri-products
and marketing
•5.Banking and Financial Services
•6.Information Technology and IT
enabled services
•7.Establishments of Retail Chain in
urban and semi-urban locations
7. RESEARCH METHODOLOGY
OBJECTIVE
To analysis the level of investment in
inventory by IFFCO.
To study and analyze the policies and
practices regarding inventories adopted by
the unit.
To observe the effectiveness of company’s
inventory management system.
To understand the different sections of
company’s inventory management system.
8. RESEARCH METHODOLOGY
◦ DATA COLLECTION
◦ Primary data:
Basic information collected from the company
staff like accountants and officers. Moreover
information gathered through practically
preparing the data for Inventory.
◦ Secondary data:
From the Balance Sheet of the company
From Cost & Management Accountancy report
From Internet
11. MATERIAL HANDLING
Purchase section
Knowledge of the materials
Source of material- Vendors
Reasonable price
Stores section
Main Store.
Cement godown.
Petrol Pump.
Cable yard.
Chemical godown.
Paint godown.
12. Purchase Process
Recognition Of Need
Requisition To Purchase
Record And Numbering
Of Requisitions
Mrp Scrutiny
Sending Of Enquiry /
Invitation To Bid
Receiving Of Offers
13. Purchase Process Cont..
Purchase Order
Receipt Of Materials
Follow Up Done For
Every Order
Payment Against
Purchase
Inspection Of Material
Full Payment / Balance
Payment After Receipt
Of MATERIALS
14. PHYSICAL VERIFICATION OF MATERIALS
Raw material & Packing materials
Stores, Chemicals & Spare parts
Finished Products
15. ABC ANALYSIS FOR PHYSICAL
VERIFICATION OF MATERIALS
CATAGORIES VALUE(Rs.PER QUANTUM OF
UNIT) VERIFICATION
CATEGORY A Above Rs. 50000/- 100%
CATEGORY B 10001 to 50000/- 70%
CATEGORY C Below Rs. 10000/- 25%
16. OBJECTIVE OF INVENTORY CONTROL
To provide the continuous flow of required materials& spares parts
and components for efficient uninterrupted flow of production.
To minimize the investment in inventories stock keeping in view
operating requirements.
To provide for efficient store of materials so that inventories are
protected from losses by fire and threat and handling time and
costs are kept at minimum.
To keep surplus and absolute items to minimize uncertainty..
To maintain inventory against deterioration, obsolescence and
unauthorized use.
To ensure that finished goods are available for delivery to
customers just to fulfill the order.
17. TECHNIQUES OF INVENTORY
CONTROL:USED AT IFFCO
Min-Max plan
Order cycling system
Fixation of various levels
Use of control ratios
Review of slow and non-moving items
The ABC Analysis
18.
19. USE OF CONTROL RATIOS
YEAR 2007-08 2008-09 2009-10 2010-11 2011-12
Total 964.03 977.13 1413.95 1347.7 1264.71
INVENTOR
Y
1500
1000
500
0
2007-08 2008-09 2009-10 2010-11 2011-12
20. Imbalance of raw material
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Raw 595.41 551.27 950.8 823.39 718.66
Materials
1000
800
600
400
200
0
2007-08 2008-09 2009-10 2010-11 2011-12
21. Stores and spare parts at Iffco Kalol
Year 2007-08 2008-09 2009-10 2010-11 2011-12
Stores and 246.74 311.74 336.42 290.21 259.58
Spares
350
300
250
200
150
100
50
0
2007-08 2008-09 2009-10 2010-11 2011-12
31. Findings
(1) Reasons to prefer the plastic bag:
Moisture control
Reused and strong
(2) They are using silos for the storage of finished goods in a
case of uncertainty (strike, machine failure, transportation
problem)
(3) Total income in 2010-11 is highest with 33432.3 crore
even though the production of the 2011-12 is highest. Main
reason for above happening is high sale of fertilizer in 2010-11
and cost of inventory is low.
(4) There is much more inbalance of Power , fuel and Water
consumption because insufficient availability of Power , fuel
and Water.
(5) The inefficient management of inventory because
fluctuating In Inventory Tornover Ratio as mentioned in
graph.
32. CONCLUSION & RECOMMENDATION
More effective exercise should be followed of vigilance
against imbalance of raw material and work in progress
which tends to limit the utility of stocks.
To change in design to maximize use of standards parts
and components, which are available off the shelf.
Items which are in excess of the needed consumption can
be considered as surplus items, such items are lying in
inventory beyond 4 years. For the efficient Inventory
Management the period for this should be Reduced
More efforts should be made to completion of unfinished
production jobs to get them in to sellable condition.
The software holds all the transactions of the stocks. So
software helps much in maintenance of stocks. IFFCO
should use Inventory software to maintain the
transactions of inventories and to manage the Inventory
33. Bibliography
Website
http://www.iffco.nic.in
Books & Other Materials
◦ IFFCO Company’s Annual Reports From 2007-08 to 2010-
2011
◦ Guidelines on identification, Obsolete, Surplus items. IFFCO
Manual
◦ Doler, W. Donald; Lee Jr, Lamer; Burt, N David, Inventory
purchasing& material management system
◦ Pandey I.M – Inventory Management (Vikas Publications)
◦ + Valuation of Inventories AS-2
Indian Accounting Standards and GAPP by Dolphin, D’Souza
(Snow White Publisher)
