Your SlideShare is downloading. ×
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Inventory strategy for processing independent demand a study on amul
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Inventory strategy for processing independent demand a study on amul

3,724

Published on

this project is about the INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND of Amul done in SILCHAR town of ASSAM

this project is about the INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND of Amul done in SILCHAR town of ASSAM

Published in: Business, Technology
1 Comment
4 Likes
Statistics
Notes
  • sagardwip dey your project is very informative i also elected for summer project in amul plz help me out i want your project soft copy sanket9296@gmail.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
3,724
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
1
Likes
4
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND (A Study on Amul) Dissertation Submitted to Assam University, Silchar for the award of the Degree of Business Administration By SAGARDWIP DEY Under the guidance of DR D. GHOSH DEPARTMENT OF BUSINESS ADMINISTRATION JN SCHOOL OF MANAGEMENT STUDIES ASSAMUNIVERSITY SILCHAR – 788 011, INDIA MAY 2012
  • 2. DEPARTMENT OF BUSINESS ADMINISTRATION ASSAMUNIVERSITY (A CentralUniversity) SILCHAR-788011 (Assam) : 03842-270200, 270847Dr .D.Ghosh CERTIFICATEI certify that the work entitled “INVENTORY STRATEGY FOR PROCESSINGINDEPENDENT DEMAND” written and submitted by Sri Sagardwip Dey in partialfulfillment of the requirement for the Degree of Master of Business Administrationis a work by him. Sri Sagardwip Dey is a very hard working and sincere student.Dated, Silchar (DebomalyaGhosh)The 16th May, 2012 4
  • 3. PrefaceI SAGARDWIP DEY declare that the project report titled “INVENTORY STRATEGYFOR PROCESSING INDEPENDENT DEMAND” in Amul Silchar, carried out by meunder the supervision of Dr.D.Ghosh is the result of the original work done by me.To the best of my knowledge and belief this report would not be submitted to anyother institution apart from Department of Business Administration of AssamUniversity or any other organization for using any purposes.My special thanks are to Mr. Ajay Agarwal& my friends who helped me a lot in datacollection and their encouragement in the successful completion of my work.For the Purpose of the research I have visited Amul’s warehouse, distributor &retailersDated, Silchar (Sagardwip Dey)The 16th May 16, 2012 5
  • 4. INDEXChaptersPage no. INTRODUCTION 6-7 Introduction of study 7 Objectives of study 7 Scope of study 7 CONCEPTUAL & THEORITICAL FRAME 8-19 Meaning & definition of inventory 9 Classification of inventory 9 Risk & cost associated with inventory 9 Understanding inventory management 11 Historical review of inventory management 12 Types of inventory 13 Inventory cost 14 Purpose of inventory management 15 Benefits of inventory management 15 Inventory control techniques 16 ORGANIZATION PROFILE20-50Introduction 21 Organization overview 25 Organization structure 28 Production function 30 Operation analysis 30 Amul supply chain 33 Plant 34 6
  • 5. Amul products 36Amul product history 50RESEARCH METHODOLOGY 51-53Research meaning 52Research design 52Nature of data 52Research type 53Sampling size & technique 53DATA ANALYSIS & INTERPRETATION 54-92Inventory movement data 55Findings 91Suggestions 92Conclusion 92APPENDIX 93-99BIBILOGRAPHY 100-101 7
  • 6. CHAPTER – 1INTRODUCTION 8
  • 7. INTRODUCTION OF THE STUDY This study is about the inventory management of Amul in Silchar town. Everyenterprise needs inventory for smooth running of its activities. It serves as a link betweenthe production and distribution process. The greater a time lag, the higher the requirementof inventory the unforeseen fluctuation of inventory demand and supply of goods,fluctuating inventory prices, necessitate the need for inventory management. The investment inventory constitutes the most significant part of the currentassets inventory of the under taking. Thus it is very essential to have a proper control andmanagement of inventory. Inventories cost account for nearly 55 percent of the cost ofproduction, as it is clear from an analysis of financial statements of large number ofprivate and public sector organizations. So, it essential to establish suitable procedures forproper control of materials from the time of purchase order placed with supplier untilthey have been consumed properly. This study is about how the distributors are managing their inventory, what arethe problems they are facing and what are the inventory techniques they are using tomaintain the inventory level.OBJECTIVE OF THE STYDYTo understand the practical concept of Inventory Management &and analyze themanagement technique used in managing the inventory.To find the problems faced by retailers & distributors in selling and storing.To collect the information about the movement of Inventory in the lower leg.SCOPE OF THE STUDYThe study carried out in Silchar city so its scope is mainly limited to Silchar city.It gives information about the size of the retail network.It gives information about the services given by distributor to their retailerIt will served retailer &consumer in better manner.It provides suggestions to the company to improve their inventory strategy. 9
  • 8. CHAPTER – 2CONCEPTUAL & THEORITICAL FRAME 10
  • 9. MEANING AND DEFINITION OF INVENTORYThe term inventory is originated from the French word Inventaire and the LatinInventariom which implies a list of things found. The term “inventory” has a widermeaning then the term “Materials” or “store”.According to the “Institute of Chartered Accountant of India” inventory means“Tangible Property” held a) For sale in the ordinary course of business. b) In the process of production for sale. c) For rendering of services.The term inventory refers to the stockpile of the products a firm is offering for sales andthe components that make up the product. Inventories are the stocks of the product of acompany, manufacturing for sale and the components that make up the product.The various forms in which inventories exist in manufacturing company are (1) rawmaterial (2) work-in process, (3) finish goods and (4) store and spares. However, incommercial parlance, inventory usually includes store, raw material, work-in process andfinish goods. The term inventory includes – raw material, work-in process, finish goodspackaging, spares and others stocked in order to meet an unexpected demand ordistribution in the future.CLASSIFICATION OF INVENTORIES Classificationof InventoryProduction Work-in Progress Finished goods MRO inventoryInventory1. Production InventoryIn production inventory there are two types of productioninventory that are as follows:a) Material, which are purchases from the market like raw material and readymadeParts & components require for manufacturing of equipment. 11
  • 10. b) Special part or component manufactured in once own company & kept in stock foruses in manufacturing.2. Maintenance RepairOperating supplies (MRO Inventory)There are material purchase from vendor & require for Maintenance or productionprocess.3. Work in progressThere are semi-finished products in various stages of production on the factory floor.4.Finished goods inventoryThese consist of manufactured kept in warehouses or retail outlets & are meet for sale.RISKS & COST ASSOCIATED WITH INVENTORIESHolding of inventories exposes the firm to a number of risks & costs. Risk of holdinginventories can be put as follows:-i) Price decline This may be due to increase in the market supply of the product, introduction ofa new competitive product price-cutting by the competitors etc.ii) Product deterioration This may be due to holding a product for too long a period for too long a periodor improper storages condition.iii) Obsolescence This may be due to change in customer‟s taste, new production techniqueimprovements in the product design, specifications etc.THE COSTS OF HOLDING INVENTORYi) Material costs This includes the cost of purchasing the goods, transportation and handlingcharges less any discount allowed by the supplier of goods.ii) Ordering costs This includes the variable cost associated with placing an order for the goods.The fewer the orders lower will be the ordering costs for the firm.iii) Carrying cost This includes the exposes for storing the goods. It comprises storage costs,insurance costs, spoilage costs, cost of funds tied up in inventory. 12
  • 11. Understanding inventory managementEvery management problem is a decision problem. Decision is an important task that allorganizations have to take. The allocation of resource is a common issue to allorganizations. Organizations have to acquire, allocate and control the factors ofproduction which are necessary for the achievement of the business‟s objectives.Inventory management as one of the key activities of business logistics, has always beena major preoccupation for the company‟s survival and growth.The aim of inventory management is to hold inventories at the lowest possible cost, giventhe objectives to ensure uninterrupted supplies for ongoing operations. When makingdecisions on inventory, management has to find a compromise between the different costcomponents, such as the costs of supplying inventory, inventory-holding costs and costsresulting from insufficient inventoriesAccording to Wild inventory control is the activity which organises the availability ofitems to the customers. It coordinates the purchasing, manufacturing and distributionfunctions to meet the marketing needs. This role includes the supply of current salesitems, new products, consumables; spare parts, obsolescent items and all other supplies.Inventory enables a company to support the customer service, logistic or manufacturingactivities in situations where purchasing or manufacturing of the items is not able tosatisfy the demand. Lack of satisfaction could arise either because of the speed ofpurchasing or manufacturing is too protracted, or because quantities cannot be providedwithout stocks. Clodfelteradds that a good inventory control system offers the followingbenefits: a) The proper relationship between sales and inventory can better be well maintained. Without inventory control procedures in place, the store or department can become overstocked or under stocked. b) Inventory control systems provide a business with information needed to take markdowns by identifying slow-selling merchandise. Discovering such items early in theseason will allow a business to reduce prices or make a change in marketing strategybefore consumer demand completely disappears. c) Merchandise control systems allow buyers to identify best-sellers early enough in theseason so that re-orders can be placed to increase total sales for the store or department. d) Merchandise shortages and shrinkage, can be identified using inventory controlsystems. Excessive shrinkage will indicate that more effective merchandising controlsneed to be implemented to reduce employee theft or shoplifting.Emphasizing the pertinence of the topic, in 2001, Gourdin noted that „inventory is onearea of logistics that has received a great deal of management attention over the pastdecade. Executives now realize that holding excessive stocks is simply too expensive.Therefore, a great deal of effort has been expended to eliminate unnecessary inventorywithout compromising customer service. However, there are numerous situations whereinventory simply must be held, particularly when meeting the needs of global customers. 13
  • 12. Management‟s goal should be to hold only what is necessary to satisfy customerrequirements and manage it effectively‟ (Gourdin 2001:82).Inventory problems preoccupy profit- making organizations and nonprofit institutions aswell. Inventories are common to agriculture, manufacturers, wholesalers, retailers,hospitals, churches, prisons, zoos, universities and national, state and local governments.Indeed, inventories are also relevant to the family unit in relation to clothing,pharmaceutical products, food and so forth. This indicates how inventories are importantand deserve a serious attention in order to achieve organizational objectives.Historical review of inventory managementHistorically, inventory management has often meant too much inventory and too littlemanagement or too little inventory and too much management. There can be severepenalties for excesses in either direction. Inventory problems have proliferated astechnological progress has increased the organization‟s ability to produce goods ingreater quantities, faster and with multiple design variations. The public has compoundedthe problem by its receptiveness to variations and frequent design changes .since the mid-1980s the strategic benefits of inventory management and production planning andscheduling have become obvious. The business press has highlighted thesuccess ofJapanese, European, North American firms in achieving unparalleled effectiveness andefficiency in manufacturing and distribution. In recent years, many of the firms have„raised the bar‟, yet again by coordinating with other firms in their supply chains. Forinstance, instead of responding to unknown and variable demand, they share informationso that the variability of the demand they observe is significantly lowerSilver, Pyke and Peterson continue arguing that in the United States ofAmerica and other Western Countries, productivity improvement was pursued throughreducing the amount of direct manufacturing labour expended per unit of output. Thiswas a valid strategy because of the high labour content in many manufactured products.However, the proportion of unit cost due to labour has been steadily decreasing in recentyears. In fact, the ratio of purchased materials to sales (in dollars) reached 60 percent forU.S. firms in 1985. Even large manufacturing firms, such as the U.S auto assemblers,purchase up to 60 percent of the value of the product. This implies that management ofraw materials inventories is an area that shows great promise for productivityimprovement. Japanese firms received much deserved attention in the mid-to late 1980sbecause of their remarkable performance on quality and inventory management. Thetremendous interest in Just-in-Time manufacturing (JIT) indicates that work-in-processinventory management is also an area ripe for improvement. 14
  • 13. Types of inventoryAccording to Stock and Lambert, inventories can be categorized into six distinct formsthat are: a) Cycle stock. Cycle stock is inventory that results from the replenishment process and is required in order to meet demand under conditions of certainty, that is, when the firm can predict demand and replenishment times (lead times) almost perfectly. For example, if the rate of sales for a constant 20 units per day and the lead time is always 10 days, no inventory beyond the cycle stock would be required. While assumptions of constant demand and lead time remove the complexities involved in inventory management, let‟s look at such an example to clarify the basic inventory principles. b) In-transit inventories. In-transit inventories are items that are en route from one location to another. They may be considered part of cycle stock even though they are not available for sale and /or shipment until after they arrive at the destination. For the calculation of inventory carrying costs, in-transit inventories should be considered as inventory at the place of shipment origin since the items are not available for the buyer, sale, or subsequent reshipment. c) Safety or buffer stock. Safety or buffer stock is held in excess of cycle stock because of uncertainty in demand or lead time. The notion is that a portion of average inventory should be devoted to cover short-range variations in demand and lead time. Average inventory at a stock-keeping location that experiences demand or lead time variability is equal to half the order quantity plus the safety stock. d) Speculation stock. Speculation stock is inventory held for reasons other than satisfying current demand. For example, materials may be purchased in volumes larger than necessary in order to receive quantity discounts, because of a forecasted price increase or materials shortage, or to protect against the possibility of a strike. e) Seasonal stock. Seasonal stock is a form of speculative stock that involves the accumulation of inventory before a season begins in order to maintain a stable labour force and stable production runs or, in the case of agricultural products, inventory accumulated as the result of a growing season that limits availability throughout the year. 15
  • 14. f) Dead stock is inventory that no one wants, at least immediately. The question is why any organization would incur the costs associated with holding these items rather than simply disposing of them. One reason might be that management expects demand to resume at some point in the future. Alternatively, it may cost more to get rid of an item that it does to keep it. But the most compelling reason for maintaining these goods is customer service. Perhaps an important buyer has an occasional need for some of these items, so management keeps them on hand as a goodwill gesture.Inventory costsAccording to Gourdin there are three types of costs that must be considered in settinginventory levels. a) Holding (or carrying) costs are costs such as storage, handling, insurance, taxes, obsolescence, theft and interest on funds financing the goods. These charges increase as inventory levels rise. In order to minimize carrying costs, management makes frequent orders of small quantities. Holding costs are commonly assessed as a percentage of unit value, i.e. 15 percent, 20 percent, rather than attempting to derive a monetary value for each of these costs individually. This practice is a reflection of the difficulty inherent in deriving a specific per-unit cost for, for example, obsolescence or theft. b) Ordering costs are those costs associated with placing an order, including expenses related to personnel in a purchasing department, communications and the handling of the related paperwork. Lowering these costs would be accomplished by placing a small number of orders, each for a large quantity. Unlike carrying costs, ordering costs are generally expressed as a monetary value per order. c) Stock-out costs include sales that are lost, both short and long term. These charges are probably the most difficult to compute, but arguably the most important because they represent the costs incurred by customers (internal or external) when inventory policies falter. Failure to understand these costs can lead management to maintain higher (or lower) inventory levels than customer requirements may justify. 16
  • 15. PURPOSE OF INVENTORY MANAGEMENT1. To maintain independence of operations  Provide “optimal” amount of cushion between work centers  Ensure smooth work flow2. To allow flexibility in production scheduling3. To meet variation in product demand4. To provide a safeguard for variation in raw material or parts delivery time  Protect against supply delivery problems (strikes, weather, natural disasters, war, etc.)5. To take advantage of economic purchase-order sizeBENEFITS OF INVENTORY MANAGEMENT1. Reduced stocking costs resulting from efficient matching of requirements to stock2. Re-order recommendations highlight urgent needs. Help prevent Stock-outs.3. Instant access to 24 month usage pattern aids decision making reveals trends. Olddata easily purged.4. Automatic capture on audit trail of all stock movement details helps resolve5. Instant month-end valuation of receipt, issues adjustment etc.6. Rapid stock and work-in progress evaluation.7. True multi-location without constraints.8. Easy monitoring of slow moving stocks.9. Automation of inventory checking cycles ensures that items are not forgotten.Improves accuracy10. Automatic tracking of scrap rates and recalculation of safety levels reduces effort,improves control11. ABC analysis system focused attention on high value stock holdings. 17
  • 16. INVENTORY CONTROL TECHNIQUESInventory control techniques are employed by the inventory control organization withinthe framework of one of the basic inventory models, viz. Fixed order quantity systemsor fixed order period system. Inventory control techniques represent the operationalaspect of inventory management and help realize the objectives inventory managementand control.Several techniques of inventory control are in use and it depends on theconvenience of the firm to adopt of the techniques. What should be stressed,however, is the need to cover all items of inventory and all stages, i.e. from the stage ofreceipt from supplies to the stage of their use.The techniques are most commonly used are the following, Economic Order Quantity (EOQ) Continuous Review Periodic Review Systems Hybrid systemEconomic Order Quantity (EOQ)How much to order –Major decision area where focus on decision regarding how much Quantity to order at atime is important case of inventory management. Number of techniques has beendeveloped to help managers in this decision. Most widely used technique is “Economicorder Quantity”. This represents the size of an order for which the total cost isminimum economy in purchasing.Total cost for this purpose consist 2 major costs –a) Ordering cost or procurement cost.b) Carrying / Holding cost. Where, These two types of cost are opposed to one another. The ordering cost decreasewhile carrying cost increases with every increase in Qty of purchase order. So themanagement has to take decision that there will be balance between 2 opposing cost tohave EOQ with minimum total cost.How to calculate EOQ:-1) Mathematical approach – calculate by formula. 2 AB EOQ = -------- (in units) C ×SWhere, 18
  • 17. A = Annual usage in units B = Cost of placing an order C = cost per unit S = Carrying cost as a percentage of Aug inventory. If EOQ determined in terms of rupees where annual usage expressed in rupees by formula Annual usage = annual usage unit × unit cost.Continuous Review A continuous review (Q) system, sometimes called a reorder point (ROP) system or fixed order-quantity system, tracks the inventory of an item each time withdrawal is made to determine whether it is time to reorder. In practice, these reviews are done are done frequently and are often continuous. At each review, a decision is made about an item‟s inventory position. If it is judged to be too low, the system triggers a new order. Inventory Position= On-Hand inventory + Scheduled receipt – Backorders IP = OH + SR – BO When demand is certain When demand & lead time are constant. The downward-sloping line represents the on- hand inventory, which is being depleted at a constant rate. When it reaches reorder point, a new order is placed. The on-hand inventory continues to drop throughout lead time until the order is received. At that time, this marks the end of the lead time, on hand inventory jumps up. A new order arrives just when the inventory drops to 0. The time between orders is the same for each cycle. IP IP IP Order received On Q Q Q - ha nd OH inv ent Order ory Placed L L L Time TBO TBO TBO L L L 19
  • 18. When demand is uncertainIn reality demand & lead times are not always predictable. This system operates whendemand is variable and uncertain. We assume that the variability in lead times isnegligible and, therefore, can be treated as constant. The wavy downward-sloping lineindicates the demand varies from day to day. Its slope is steeper in the second cycle,which means the demand rate is higher during this time period. The changing demandrates means the time between order changes, so TBO1≠TBO2≠TBO3. Because ofuncertain demand, sales during lead time are unpredictable, and safety stock is added tohedge against lost sales. This addition is why re-order level is higher in this than the re-order level of certain demand.Periodic review systemAn alternative inventory control system is the periodic review (P) system, sometimescalled a fixed interval recorder system or periodic record system. In this system anitems inventory position is received periodically rather than continuously. 20
  • 19. Hybrid SystemsVarious hybrid inventory control systems merge some but not all features of the P & Qsystems. There are two types Optional Replenishment System Base-stock systemOptional Replenishment SystemIt is used to review the inventory position at fixed time interval and, if the position hasdropped to (or below) a predetermined level, to place a variable size order to coverexpected needs.Base-stock systemIn this system replenishment order is issued each time when withdrawal is made, for thesame amount of withdrawal. 21
  • 20. CHAPTER – 3ORGANIZATION PROFILE 22
  • 21. AMUL means "priceless" in Sanskrit. A quality control expert in Anandsuggested the brand name “Amul,” from the Sanskrit “Amoolya,” Variants, all meaning"priceless", are found in several Indian languages. Amul products have been in use inmillions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray,Amul Cheese, Amul Chocolates, AmulShrikhand, Amul Ice cream, NutrAmul, AmulMilk and Amulya have made Amul a leading food brand in India. Today Amul is asymbol of many things. Of high-quality products sold at reasonable prices, of the genesisof a vast co-operative network, of the triumph of indigenous technology, of the marketingsavvy of a farmers organization and have a proven model for dairy development. Symbol of Amulis a ring of four hands, which are coordinated each other .Theactual meaning of this symbol is coordination of hand of different people by whom thisunion is now at top.First hand is for the farmers (producers), without whomthe organizationwould do not existed. Farmers are theinspiration of the AMUL – the taste ofIndia.Second hand is for the representatives of processors bywhom the raw milkprocessed into different finishedproducts.Third hand is for marketers without whom the productwould have not been able toreach to the customer.Fourth hand is for customers without whom theorganization could not carry onbecause they are thepeople who consume the product. The union ofAmulwould nothave been the second biggest successfulcompany in the world without thecoordination of the above four handThe Birth of AmulMilk, The inspiration behind a revolutionOver six decades ago the life of a farmer in Kaira was very much like that offarmers anywhere else in India. His income was derived almost entirely fromseasonal crops. Many poor farmers faced starvation during off-seasons. Theirincome from milch buffaloes was undependable. The milk marketing systemwas controlled by contractors and middlemen. As milk is perishable, farmerswere compelled to sell their milk for whatever they were offered. Often theyhad to sell cream and ghee at a throwaway price. 23
  • 22. They were in general illiterate. But they could see that the system under which contractors could buy their produce at a low price and arrange to sell it at huge profits was just not fair. This became more noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk had to be transported 427 kilometers, from Anand to Bombay. This could be done only if milk was pasteurized in Anand.After preliminary trials, the Government of Bombay entered into anagreement with Polsons Limited to supply milk from Anand to Bombay on aregular basis. The arrangement was highly satisfactory to all concerned –except the farmers. The Government found it profitable; Polsons kept a goodmargin. Milk contractors took the biggest cut. No one had taken the trouble tofix the price of milk to be paid to the producers. Thus under the BombayMilk Scheme the farmers of Kaira District were no better off ever before.They were still at the mercy of milk contractors. They had to sell their milk ata price the contractors fixed. The discontent of the farmers grew. They wentin deputation to Sardar Patel, who had advocated farmers‟ co-operatives asearly as 1942. Sardar Patel reiterated his advice that they should market their milk through a co-operative society of their own. This co-operative should have its own pasteurization plant. His advice was that the farmers should demand permission to set up such a co-operative. If their demand was rejected, they should refuse to sell their milk to middlemen.Sardar Patel pointed out that in undertaking such a strike there shouldbe some losses to the farmers as they would not be able to sell theirmilk for some time. If they were prepared to put up with the loss, hewas prepared to lead them. The farmers‟ deputation readily acceptedhis proposal. Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk co-operative – and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village on January 4, 1946. It was resolved that milk producers‟ co- operative societies should be organized in each village of Kaira District to collect milk from their member-farmers. All the milk societies would federate into a Union which would own milk processing facilities. The Government should undertake to buy milk from the Union. If this wasn‟t done, the farmers would refuse to sell milk to any milk contractor in Kaira District. 24
  • 23. The Government turned down the demand. The farmers called a „milkstrike‟. It lasted 15 days. Not a drop of milk was sold to the milkmerchants. No milk reached Bombay from Anand, and the BombayMilk Scheme almost collapsed. After 15 days the milk commissionerof Bombay, an Englishman, and his deputy visited Anand, assessedthe situation and accepted the farmers‟ demand.This marked the beginning of the Kaira District Co- operative Milk Producers‟ Union Limited, Anand. It was formally registered on December 14, 1946. Its objective was to provide proper marketing facilities for the milk producers of the district. The Union began pasteurizing milk in June 1948, forthe Bombay Milk Scheme – just a handful of farmers in two villageco-operative societies producing about 250 liters a day.An assured market proved a great incentive to the milk producersin the district. By the end of 1948, 432 farmers had joined villagesocieties, and the quantity of milk handled by the Union hadincreased to 5000 liters a day.In the early stages, rapid growth brought in its wake seriousproblems. Their solution provided the stimulus for further growth.For example, as the co-operative movement spread in the district, itwas found that the Bombay Milk Scheme could not absorb theextra milk collected by the Union in winter, when buffaloesyielded an average of 2.5 times their summer yield. Thus by 1953,the farmer-members had no regular market for the extra milkproduced in winter. They were again forced to sell a large surplusat low rate to middlemen.The only remedy was to set up a plant to process the extra milk into products like butter and milkpowder. The logic of this step was readily accepted by the Government of Bombay and theGovernment of India, except for a few doubting Thomases. The government of India helped theUnion to get financial help from UNICEF and assistance from the Government of New Zealandunder the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 – lakh factory toprocess milk powder and butter was blueprinted. Its foundation stone was laid by the thenPresident of India the late Dr. Rajendra Prasad on November 15, 1954. The project wascompleted by October 31, 1955, on which day the late Pandit Jawaharlal Nehru, the then PrimeMinister of India, declared it open. The new dairy provided a further fillip to the co-operativemovement among milk producers. The union was thus enabled to organize more village co-operative societies and to handle more and more milk each year. This event also brought abreakthrough in dairy technology as the products were made processing buffalo milk for the firsttime in the world. Kaira Union introduced the brand “Amul” for marketing its product range.The word “Amul” is derived from Sanskrit word „Amulya‟ which means „priceless‟ or precious‟.In the subsequent years Amul made cheese and baby food on a large commercial scale againprocessing buffalo milk creating a history in the world. 25
  • 24. 1964 was the turning point in the history of dairy developmentprogram in India. Late ShriLalBahadurShastri, the then PrimeMinister of India who visited Anand on 31s October forinauguration of Amul‟s Cattle Feed Plant, having spent a night withfarmers of Kaira and experiencing the success wished andexpressed to MrKurien, then the General Manager of Amul thatreplicating Amul model throughout our country will bring a greatchange in the socio-economic conditions of the people. In order tobring this dream into reality, 1965 The National Dairy DevelopmentBoard (NDDB) was established at Anand and by 1969-70 NDDBcame out with the dairy development program for India popularlyknown as “Operation Flood” or “White Revolution”. The OperationFlood program, even today, stands to be the largest dairydevelopment program ever drawn in the world. This saw Amul asmodel and this model is often referred in the history of WhiteRevolution as “Anand Pattern”. Replication of “Anand Pattern” hashelped India to emerge as the largest milk producing nation in theworld.The Amul ModelThe Amul Model of dairy development is a three-tieredstructure with the dairy cooperative societies at the villagelevel federated under a milk union at the district level and afederation of Establishment of a direct linkage between milk producers and consumers by eliminating member unions at the state level. Middleman. Milk Producers (farmers) control procurement, processing and marketing 26
  • 25. The Amul model has helped India to emerge as the largest milk producer in the world.More than 13 million milk producers pour their milk in 1, 28,799 dairy cooperativesocieties across the country. Their milk is processed in 176 District Co-operative Unionsand marketed by 22 State Marketing Federations, ensuring a better life for millions.The Organization – An OverviewGCMMF Overview: Gujarat Cooperative Milk Marketing Federation (GCMMF) is Indias largest foodproducts marketing organization. It is a state level apex body of milk cooperatives in Gujaratwhich aims to provide remunerative returns to the farmers and also serve the interest ofconsumers by providing quality products which are good value for money. 27
  • 26. Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largestOrganization in FMCG industry engaged in marketing of milk & milk products under the brandnames of AMUL and SAGAR with an annual turnover exceeding Rs 5000 crores. GCMMF is a unique organization. Its a body created by Farmers, managed bycompetent professionals serving a very competitive and challenging consumer market. It is a truetestimony of synergistic national development through the practice of modern managementmethods.Vision: GCMMF will be an outstanding marketing organization, with specialization inmarketing of food and dairy products both fresh and long life with customer focus and ITintegrated. The network would consist of over 100 offices, 7500 stockiest covering at least everyTaluka. Head quarter servicing nearly 10 lakhs outlets with a turnover of Rs.10, 000 Cr andserving several co-operatives. GCMMF shall also create markets for its products in neighboringcountries.Mission: We at GCMMF endeavor to satisfy the taste and nutritional requirements of thecustomer of the world through excellence in the marketing by our committed team. Through co-operative networking, we are committed to offering quality product that provides best value formoney. 28
  • 27. Number of Producer Members 6,34,675Number of Village Dairy Cooperative Societies 1163Total Milk Handling Capacity 2.4 Million liters per dayMilk Collection (Daily Average 2010-11) 1.5 Million litersMilk Drying Capacity 100 Mts per dayWhey Drying Capacity 60 Mts per dayCattle Feed Manufacturing Capacity 1100 Mts per daySales Turnover Sales Turnover Rs (Million) US $ (in million) 2000-01 5090 113 2001-02 4690 100 2002-03 4880 102 2003-04 5460 116 2004-05 6000 138 2005-06 7090 160 2006-07 8220 202 2007-08 10770 272 2008-09 13780 310 2009-10 16950 360 2010-11 21110 469 29
  • 28. Organization Structure:Organization Structure is divided into two parts: External Organization Structure Internal Organization Structure External Organization StructureExternal Organization Structure is the organization structure that affects the organizationfrom the outside.The following is internal organization chart of Amul. State Level Marketing Federation District Milk Product Union Ltd Village Milk Product Union Ltd Villagers External Organization Structure Chart As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-operative organization. The villagers of more than 10000 villages of Gujarat are the bases ofthis structure. They all make village milk producers union, district level milk producers unionand then a state level marketing federation is established. The structure is line relationship,which provides easy way to operation. It also provides better communication between twostages 30
  • 29. Internal Organization Structure:The following is internal organization chart of Amul: Chairman Managing Director General Manager Asst. General Manager Internal Organization Structure Chart 31
  • 30. Production Function: Expansion of the production technology and changes in technical field is going to bringout revolution in the industry sector which eventually gives stand to study and favors the comebacking subject i.e. production and management. Production and operation management is planning, organizing, staffing, directing andcontrolling of all the production system that portion of organization that converts inputs intoproducts and services. In general production system takes raw material, personnel, machines,buildings and other resources and produce products and services. The core of production system is its conversion subsystem where in workers; rawmaterials are used to convert inputs into products and services. This production department is atheart of the firm, as it is able to produce low cost products and superior quality in timelymanners. Thus, there arises enormous need of giving due importance to this department as awhole and a strong concrete base being foundation pillars of a manufacturing organization, if theintention is to succeed domestically and globally.Operating Analysis- Amul‟s only source of raw material is Village Milk societies. Milk is brought from suchvillage milk societies every morning and evening. This milk is then sent to the dairy plant. In thedairy plant the milk is processed i.e. it is made free from germs.· 32
  • 31. Milk ProcessingThe entire process of milk can be divided into following steps: Milk Processing ChartDistribution Network: Most producers work with marketing intermediaries to bring their products to market.The marketing intermediaries make up a marketing channel also called distribution channel.Distribution channels are sets of interdependent organizations involved in the process of makinga product or service available for use or consumption. The Head Office of GCMMF is located at Anand. The entire market is divided in 5zones. The zonal offices are located at Ahmadabad, Mumbai, New Delhi, Kolkata and Chennai. 33
  • 32. Moreover there are 49 Depots located across the country and GCMMF caters to 13 Exportmarkets. A zero level of channel also called a direct marketing channel consists of a manufacturerselling directly to the final customers. A one level channel; contains one selling intermediarysuch as retailer to the final customers. A two level channel two intermediaries are typicallywholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber inbetween. GCMMF has an excellent distribution. It is its distribution channel, which has made it sopopular. GCMMF‟s products like milk and milk products are perishable. It becomes that muchimportant for them to have a good distribution.Distribution Chart We can see from above figure that GCMMF distribution channel is simple and clear.The products change hands for three times before it reaches to the final consumer. First of all theproducts are stored at the Agents end who are mere facilitators in the network. Then the productsare sold to wholesale dealers who then sell to retailers and then the product finally reaches theconsumers.Distribution Chart 34
  • 33. Amul’s Supply Chain Farmer s Village Village Local Milk Sold to Cooperative Cooperative Restaurants/Other Village & Societies Societies (with Milk related Local Residents (Without Chilling Chilling Units) businesses Units) Network Milk Processing Chilling Services Union & Plants Warehouses * Veterinary Services * Animal Warehouses Husbandry * Animal Feed Factory * Milk Can Wholesalers/C&S Producers * Agriculture University Retailers Home Delivery * Rural Mgmt Contractors Institute * Trucking Facilities CONSUMERS CONSUMERS 35
  • 34. PlantsFirst plant is at ANAND,which engaged in the manufacturing of milk, butter, ghee, milkpowder, flavored milk and buttermilk.Second plant is at MOGAR, which engaged in manufacturing chocolate, nutrAmul,AmulGanthia and Amul lite 36
  • 35. Third plant is at Kanjari, which produces cattle feed.Fourth plant is at Khatraj, which engaged in producing cheese.Today, twelve dairies are producing different products under the brand name Amul. TodayAmul dairy is no. 1 dairy in Asia and no. 2 in the world, which is matter of proud for Gujaratand whole India. 37
  • 36. AMUL PRODUCTS Product Name:Amul Gold Packing:Poly Pack - 500ml, 1000ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) Product Name:Amul Taaza Packing:Poly Pack - 500ml, 1000ml, 200ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) Product Name:Amul Butter Packing:100g, 500g, 50g, 20g, 8.1g Shelf Life: Best before 12 months from packaging Storage condition: At 4°C or below Product Name:Amul Lite Packing:100g, 500g, 200g Shelf Life: Best Before 6 months Storage condition: Under Refrigeration below 10° C 38
  • 37. Product Name:Delicious Table MargarinePacking:100g, 500g, 200g tub & Single serve packShelf Life: 9 months under refrigerationStorage condition: Store Under Refrigeration under 10°CProduct Name:Amul Cooking ButterPacking:100g, 500g, 50g, 20g, 8.1gShelf Life: Best before 6 months from packagingStorage condition: At 4°C or belowProduct Name:Amul Processed CheesePacking:Cheese Block( 200g,400g, 1 kg)Cheese Tins (400g NEOE,EOE),EOE tin has an easy openendCheese Slices (200g,400g,750g), Amul A+ Cheese Slices200gCheese Chiplets (200g, 500g and 1 kg)Shelf Life: 9 Months for Cheese Tins and CheeseChiplets and 6 Months for Cheese Blocks and CheeseSlicesStorage condition: Refrigerated at 4°C or below.Product Name:Amul Emmental CheesePacking:Amul Emmental Cheese is available in a 400 gmpack for the comsumer and a large wheel (5.5 Kg) for theinstitutional segments.Shelf Life: 45 days from date of packagingStorage condition: Refrigeration temperature i.e. 4°Centigrade to 8° Centigrade 39
  • 38. Product Name:Amul Gouda CheesePacking:Amul Gouda Cheese is available in a 250 gmpack for the comsumer and a larger wheel of 1 Kg for theinstitutional segments.Shelf Life: 6 Months from date of packagingStorage condition: Refrigeration temperature i.e. 4°Centigrade to 8° CentigradeProduct Name:Amul Cheese SpreadPacking:Amul Cheese Spread Tub 200g(Plain, Pepper,Garlic,)Shelf Life:Storage condition:Product Name:Amul Pizza Mozarella CheesePacking:1 kg Pack, 200g packShelf Life: 6 Months from date of packagingStorage condition: To be stored in the deep fridgecompartment of the refrigerator. Product Name:Amul Gold Packing:1000 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient 40
  • 39. Product Name:Amul Taaza Packing:1000 ml, 500 ml & 200 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: AmbientProduct Name:Amul Calci+ MilkPacking:1000 ml & 200 mlShelf Life: 120 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Lite MilkPacking:1000 ml, 200 mlShelf Life: 180 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Kool KokoPacking:200 ml Glass Bottle, 250 ml Can & 200 ml TetraShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient 41
  • 40. Product Name:Amul Kool Milk ShaakePacking:Can: 220ml and Tetra: 180mlShelf Life: Best before 180 days from date of packingStorage condition: Needs no refrigeration until openedProduct Name:Nutramul Energy DrinkPacking:Shelf Life: Best before 180 days from date of packingStorage condition: Needs no refrigeration until openedProduct Name:Amul Masti Spiced Butter MilkPacking:200 ml & 1 Litre in TetrapakShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient Product Name:Amul Kool Cafe Packing:200 ml Glass Bottle, 250 ml Can & 200 ml Tetra Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient 42
  • 41. Product Name:Amul KoolLasseePacking:200 ml & 1 Litre in TetrapakShelf Life: 120 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Prolife Probiotic LasseePacking:200 ml GlassShelf Life: Best Before 10 days from PackagingStorage condition: Keep Under Refrigeration below 8° CProduct Name:Amul Prolife ButtermilkPacking:1 Litre Plastic BottleShelf Life: 7 days when stored below 8° CelsiusStorage condition: ChilledProduct Name:Amul StaminaPacking:200 ml Tetra Pack, 250 ml Can( Orange &Lime)Shelf Life: Best before 120 days from packagingStorage condition: Cool and dry place 43
  • 42. Product Name:Amul PROPacking:500g Glass Cube Jar&500g RefillShelf Life: Best before 12 months from the date ofmanufactureStorage condition: AmbientProduct Name:Amul Ice CreamPacking:Cone 120 ml, 100ml, 80 ml & 50 mlCup 125 ml, 100 ml, 80 ml, 90 ml & 40 mlPlastic 1 litre, 750 ml, 500 ml, 125 ml, 100 ml, 80 mlContainer & 60 mlStick 70 ml, 60 ml, 40 ml Bulk / catering packs (5 litre, 4 litre), takeTake home packs (2.2 litre, 1.5 litre, 1.25 litre, 1Home litre), combo packs (750 ml+750ml Free) and family packs (500 ml, 250 ml)Shelf Life: Best before 12 months from the date ofmanufactureStorage condition: -18°C or belowProduct Name:Amul FlaavyoPacking:125 ml, 500 ml cup, 5 ltr Bulk packShelf Life: Best Before 6 months from PackagingStorage condition: Keep Under -18°C 44
  • 43. Product Name: Amul MalaiPaneer Packing:Diced Paneer - 100 g, 200 g & 1 kg ,Block Paneer - 200 g & 1 kg Shelf Life: Best before 6 months Storage condition: Stored Frozen Product Name: Amul MastiDahi Packing:Poly Pack - 200 gm, 400 gm, 1 kg ,PP Cup - 200 gm, 400 gm, 100 gm Shelf Life: Best Poly Pack - 7 Days from the date of packaging PP Cup - 15 Days Storage condition: Under Refrigeration (Below 80C) Product Name:Amul Probiotic Dahi Packing:200g & 400gShelf Life: Best before 6 months Storage condition: Under Refrigeration (Below 8°C) Product Name: Amul Flaavyo Yoghurt Packing:100 g Cup Shelf Life: Best Before 15 days from Packaging Storage condition: Under Refrigeration (Below 8°C) 45
  • 44. Product Name: Amul GheePacking:Pouch: 500 ml & 1 Ltr Tin: 200ml, 280ml,500ml, 1Lrt, 2 Ltr and 5 Ltr Refill: 200ml, 500ml and 1Ltr PET Jar: 200ml & 500 ml Bulk Pack :10 Kg PlasticBucket , 15 Kg TinShelf Life: Pouch Packing: 9 Months Tin Packing : 12Months Refill Packing : 9 Months Jar Packing : 6 MonthsBulk Packing : 12 MonthsStorage condition: Dry and Cool placeProduct Name: Sagar GheePacking: Pouch: 500ml & 1 Ltr& Tin: 1 Ltr, 2Ltr & 5 LtrShelf Life: Pouch Packing: 9 Months & Tin Packing: 12MonthsStorage condition: Dry and Cool placeProduct Name: Amul Cow GheePacking: Pouch: 500 ml &Tin: 1 LtrShelf Life: Pouch Packing: 9 Months &Tin Packing: 12MonthsStorage condition: Dry and Cool placeProduct Name: AmulsprayPacking:1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200gPouch / Refill, Rs 10 Pack, Rs 5 PackShelf Life: 12 monthsStorage condition: Ambient 46
  • 45. Product Name: AmulyaPacking:1 Kg Pouch, 500g Pouch / Refill, 200g Pouch /Refill, Rs 10 Pack, Rs 5 PackShelf Life: 12monthsStorage condition: AmbientProduct Name: Sagar Skimmed Milk PowderPacking:500g PouchShelf Life: 12 monthsStorage condition: AmbientProduct Name: Sagar Tea & Coffee WhitenerPacking: 42 g Pouch pack &10 kg JarShelf Life: 12 monthsStorage condition: AmbientProduct Name: Amul Full Cream Milk PowderPacking:1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200gPouchShelf Life: 12 monthsStorage condition: Ambient 47
  • 46. Product Name: NutramulPacking:500g RefillShelf Life: 12 monthsStorage condition: AmbientProduct Name: Amul ShrikhandPacking:100g, 200g, 500g, 1 Kg, 10 Kg, 20 KgShelf Life: 6 months when stored at 0° CStorage condition: RefrigeratedProduct Name: Amul GulabJamunPacking:1 kg (26 units of GulabJamun), 500 g (13 unitsof GulabJamun)Shelf Life: Best before 9 months from packagingStorage condition: Cool and dry placeProduct Name: Amul BasundiPacking:500 ml Tetrapak, 1 Lit TetrapakShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient 48
  • 47. Product Name: Amul AvsarLadooPacking:Each box contains 15 Ladoos, Net weight 500gShelf Life: 45 DaysStorage condition: Store in a cool and dry placeProduct Name: Amul Mithai MatePacking:400 g Tin: For Household Consumption. , 7.5 kgTin: Bakery and Institutions, 280 kg Barrel : ForIndustrial Use like Biscuit and Chocolate manufacturingetcShelf Life: 400 g Tin : Best before 12 months, 7.5kgTin :Best before 6 months, 280 kg Barrel : Best before 3monthsStorage condition: cool and dry placeProduct Name: Amul Rejoice Assorted Chocolate GiftPacksPacking:Amul Rejoice assorted chocolate 135g, 173g,and 412gShelf Life: 9 monthsStorage condition:15° C, dry placeProduct Name: Amul Cooking ChocolatePacking:500g, 10 kg, 20 kgShelf Life: 12 monthsStorage condition: 15° C, dry place 49
  • 48. Product Name: Amul ChocolatePacking:Milk Chocolate 12g, 22g, 35gFundoo Milk Chocolate 12g, 30gDark Chocolate 35gFruit & Nut 40g, 2x150gAlmondbar 35gShelf Life: 12 monthsStorage condition: 15° C, dry placeProduct Name: Amul ChocozooPacking:ChocozooTub : 500g, Chocomini Tub : 300g,Chocozoo Tin : 232g, Chocozoo Birthday pack : 81g,Chocozoo Elegant Pack : 93g, Chocozoo pack of three :27gShelf Life: 12 monthsStorage condition: 15° C, dry placeProduct Name: Utterly Delicious Chocolate SyrupPacking:Chocolate syrup 650g plastic bottle, Chocolatesyrup 3kg plastic JarShelf Life: 6 monthsStorage condition: Ambient, refrigerate after opening 50
  • 49. Product Name: Amul wafer chocolates Packing:Amul Bindaaz wafer 15g (chocolate flavor). Amul Bindaaz wafer 15g (strawberry flavor). Shelf Life: 9 months Storage condition: 15° C, dry placeProduct Name: Amul Fresh CreamPacking:200 ml : For Household Consumption1 Ltr : For Caterers, Hotels, Restaurants and Institutions.Shelf Life: 200ml : Best before 120 days from packagingwhen stored in a cool and dry place1 Ltr : Best before 120 days from packaging when storedin a cool and dry placeStorage condition: Cool and dry place Product Name: Amul Pouch Butter Milk Packing:Poly Pack - 500ml Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) 51
  • 50. Amul product history Amul 1956 Milk Ice cream Chocolates Shrikhand Fresh Milk Cheese Ghee Power Breadspread 1996 1973 1980 1956 1962 1956 1958 Fat Free Cheese Cow Nutrauamul Gulabjamun UHT Range Amulspray Amul Butter Dessert Spread Ghee 1973 1997 1980/99 1968 1956 2002 1986 2002 Gulabjamun Condensed Softy Mix Eclairs Amul WMP Paneer Amul Lite mix Milk 2001 2001 1960 1997 1994 1999 1996 Amul Shakti Kulfi Mix Buttermilk Amulya pizza Cheese Margarine 2003 2001 1998 1987 1998 2004 Amul IMF Emmental Chocozoo Laddoo fresh Curd 1&2 Cheese 2005 2004 1999 2001 1999 Flavoured Instant Basundi Frozen Pizza Milk FCMP 2005 2002 2001 2002 Khoa Fresh Cream Gouda Cheese 2006 2002 2002 Kool Cafe 2005 52
  • 51. CHAPTER – 4RESEARCH METHODOLOGY 53
  • 52. Research Meaning: A sane inventory management is of great necessity in any business organizations. Thefuture of business organizations depends upon how the top management defines and considersinventory in relationship with the company‟s objectives or service levels.Knowing factors that push to a purchasing behavior and meeting customers‟ needs remain acrucial matter for the growth and survival in nowadays competitive market. Baki et al add thattoday‟s competitive marketing environment forces producers and customers to get closer to eachother. This means organizations should give a great importance to customers‟ needs and listen totheir voices, and suppliers and customers should be closer and closer to each other in order toproduce goods or services based on the customer needs. Therefore, manufacturers and serviceproducers need an effective planning and control system for a powerful coordination in betweenall stages of the organizations (processes, and other). The implementation and the use of aneffective planning and control system in an organization improve productivity and performanceof distribution, while decreasing waiting times. The enterprise resource planning (ERP) systemsare examples of the most strategic tools, which provide robust tools for planning, coordinationand control of the processes in all organizations.Research Design A research design is a plan that specifies the objectives of the study, method to be adopted in the data collection, tools in data analysis and hypothesis to be framed. “A research design is an arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure”.Nature of Data The approach of this study consists of combining research into primary and secondary data. Secondary data, that is, the literature phase of the research has essentially been provided in the previous chapters. The theoretical part or the literature of the study is represented by the debate of various parameters relative to inventory management and customer service management. This is of a vital importance in the sense that it provides a measured explanation concerning inventory management and customer service management in a business logistics environment where globalization, technological innovation and changing societal expectations negatively or positively impact on the growth and survival of business organizations on one side and manufacturing industries logistics on the other. Primary data has also been analyzed in the form of an empirical study. In this phase, manufacturing industries in Gauteng Province (especially in Pretoria and Johannesburg) were included in the study. In light of the above, it has to be indicated that the respondents in this population (manufacturing industries in Gauteng Province) were precisely those dealing with inventory management and customer service management. 54
  • 53. Employees or managers of business organizations that were approached were typicallyin manufacturing industries logistics according to sectors.Research TypeDescriptive research, also known as statistical research, describes data and characteristics aboutthe population or phenomenon being studied. Descriptive research answers the questions who,what, where, when, "why" and how...Although the data description is factual, accurate and systematic, the research cannot describewhat caused a situation. Thus, Descriptive research cannot be used to create a causalrelationship, where one variable affects another. In other words, descriptive research can besaid to have a low requirement for internal validity.The description is used for frequencies, averages and other statistical calculations. Often thebest approach, prior to writing descriptive research, is to conduct a survey investigation.Qualitative research often has the aim of description and researchers may follow-up withexaminations of why the observations exist and what the implications of the findings are.Sampling SizeandtechniqueSize of the sample: It refers to the number of items to be selected from the universe to constitute as asample. In these study 1 warehouse, 1 distributor & 25 retailers of Amul in Silchar hasbeen taken.Sample design: The sampling technique used in this study is simple random sampling method.This method is also called as the method of chance selection. Each and every item ofpopulation has equal chance to be included in the sample.Questionnaire: The questions are arranged logical sequence. The questionnaire consists of avariety of questions presented to the employees for the response. Dichotomousquestions, multiple choice questions, rating scale questions were used in constructingquestionnaire. 55
  • 54. CHAPTER – 4DATA ANALYSIS AND INTERPRETATION 56
  • 55. Inventory Movement Data a) Inventory flow from distributor to retailer Amulya 10 kg jar 15 level of inventory Opening Balance 10 Opening Inwards Outwards Closing Inwards Balance Balance 5 Standard 2.345207 1.602082 1.6329931 Outwards Deviation 0 0 Mean 10.5 0 0.833333 9.6666667 1 2 3 4 5 6 Closing days Balance Amulya 25 Kg bag 40 level of inventory Opening 30 Balance Opening Inwards Outwards Closing Balance Balance 20 Inwards Standard 0.983192 2.345208 3.204163 10 Deviation 0 Outwards 0 Mean 35.8333 0 1.5 34.33333 1 2 3 4 5 6 Closing days Balance Amul A+ Cheese Slice 200 gm 150 Opening Inwards Outwards Closing Opening level of inventory Balance Balance Balance 100 Inwards Standard Deviation 54.02838 0 8.93868 54.13470 50 Mean 64.33333 0 8.5 75.83333 Outwards 0 1 2 3 4 5 6 Closing days Balance 57
  • 56. Cheese Chiplet 200gm 160 140level of inventory 120 Opening Balance Opening Inwards Outward Closing 100 Balance s Balance 80 Inwards 60 Standard 40 Deviation 9.786044 0 4.27395 9.93478 Outwards 20 Mean 0 0 128.16666 3.66666 124.5 Closing 1 2 3 4 5 6 Balance days Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.50714 0 4.89897 7.26636 Mean 61 0 4 57 Opening Inwards Outwards Closing Balance Balance Standard Deviation 5.16397 0 4.08248 5.47722 Mean 11.66666 0 1.66666 10 58
  • 57. Cheese Tin 400gm 70level of inventory 60 Opening 50 Balance Opening Inwards Outwards Closing 40 Balance Balance Inwards 30 20 Standard 10 Outwards Deviation 16.62227 0 7.27782 14.88175 0 Mean 40.5 0 5.83333 34.66666 1 2 3 4 5 6 Closing Balance days Almond bar 35gm 400 350 Opening Inwards Outwards Closing Balance Balancelevel of inventory 300 Opening 250 Balance Standard 200 Inwards Deviation 142.4078 0 135.7743 10.32795 150 Mean 86 0 59 27 100 Outwards 50 0 Closing 1 2 3 4 5 6 Balance days Pizza Cheese 200 gm 50 Opening Inwards Outwards Closing Balance Balancelevel of inventory 40 Opening Balance 30 Standard Inwards Deviation 0 0 0 0 20 Mean 44 0 0 44 10 Outwards 0 1 2 3 4 5 6 Closing Balance days 59
  • 58. Amul milk chocolate 20 gm 600 Openinglevel of inventory 500 Opening Inwards Outwards Closing Balance 400 Balance Balance 300 Inwards Standard 200 100 Deviation 108.9293 0 36.48013 97.07522 Outwards Mean 0 408 0 55 353 1 2 3 4 5 6 Closing days Balance Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.32795 0 8.16496 8.164965 Mean 227 0 3 223 Bindazz Wafers 18gm box 140 120level of inventory Opening 100 Balance Opening Inwards Outwards Closing 80 Balance Balance Inwards 60 Standard 40 Deviation 46.96239 36.7423 19.125 43.01976 20 Outwards Mean 75 15 10 80 0 1 2 3 4 5 6 Closing Balance days 60
  • 59. Bindazz Wafers 18gm jar 500level of inventory 400 Opening Opening Inwards Outwards Closing Balance 300 Balance Balance Inwards 200 Standard 100 Deviation 73.48469 0 73.4846 0 Outwards Mean 0 271 0 30 241 1 2 3 4 5 6 Closing Balance days Choco Zoo 12x300gm Tub Opening Inwards Outwards Closing 120 Balance Balancelevel of inventory 100 Opening 80 Balance Standard 60 Inwards Deviation 27.24273 24.4949 4.84768 26.72576 40 Mean 76 10 6 80 20 Outwards 0 1 2 3 4 5 6 Closing days Balance Choco Zoo 12x500gm Tub 10level of inventory Opening Opening Inwards Outwards Closing 8 Balance Balance Balance 6 Inwards Standard 4 Deviation 0.516397 0 0.408248 0.408248 2 Outwards Mean 0 8 0 0 8 1 2 3 4 5 6 Closing days Balance 61
  • 60. Opening Inwards Outwards Closing Balance BalanceStandardDeviation 160.4992 0 60.22181 112.1903Mean 1430 0 87 1343 Opening Inwards Outwards Closing Balance BalanceStandardDeviation 70.56817 0 55.01151 19.043809Mean 58 0 32 25 Opening Inwards Outwards Closing Balance BalanceStandardDeviation 24.494897 0 24.4949 0Mean 70 0 10 60 62
  • 61. Fruit N NUT 40gm 70level of inventory 60 Opening Opening Inwards Outwards Closing 50 Balance 40 Balance Balance Inwards 30 Standard 20 Deviation 16.32993 0 10.32796 10.32795 10 Outwards 0 Mean 33 0 7 27 1 2 3 4 5 6 Closing days Balance Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.84435 0 9.62808 1.224744 Mean 14 0 5 10 Milk Chocolate 35 gm 600 500 Opening Inwards Outwards Closinglevel of inventory Opening 400 Balance Balance Balance 300 Inwards Standard 200 Deviation 76.9686 0 20.89657 57.94393 Outwards Mean 447 0 37 411 100 0 Closing 1 2 3 4 5 6 Balance days 63
  • 62. Rejoice Assorted 135 gm 6 Opening Inwards Outwards Closinglevel of inventory 5 Opening Balance Balance Balance 4 3 Inwards Standard 2 Deviation 0 0 0 0 1 Outwards Mean 5 0 0 5 0 1 2 3 4 5 6 Closing days Balance Utterly Chocolate Syrup 650 ml Opening Inwards Outwards Closing 8 Opening Balance Balancelevel of inventory 6 Balance Standard 4 Inwards Deviation 0 0 0 0 Mean 6 0 0 6 2 Outwards 0 1 2 3 4 5 6 Closing days Balance Amul Fresh Cream 1ltr 100 80level of inventory Opening Balance Opening Inwards Outwards Closing 60 Balance Balance Inwards 40 Standard Deviation 0 0 0 0 20 Outwards Mean 89 0 0 89 0 Closing 1 2 3 4 5 6 Balance days 64
  • 63. Amul Fresh Cream 200ml Opening Inwards Outwards Closing 10 Balance Balancelevel of inventory 8 Opening Standard Balance 6 Deviation 0 0 0 0 Inwards Mean 4 9 0 0 9 2 Outwards 0 1 2 3 4 5 6 Closing Balance days Amul Butter 100gm 10000 Opening Inwards Outwards Closing 8000level of inventory Opening Balance Balance Balance 6000 Standard Inwards 4000 Deviation 1465.734 1837.117 214.588 1516.305 Mean 7925 750 1091 7799 2000 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amul Butter 500gm 2000 Opening Inwards Outwards Closinglevel of inventory Opening 1500 Balance Balance Balance 1000 Inwards Standard Deviation 402.8237 0 130.259 297.1514 500 Outwards Mean 1038 0 179 859 0 1 2 3 4 5 6 Closing Balance days 65
  • 64. Mithai Mate 4000 3500 Opening Inwards Outwards Closinglevel of inventory 3000 Opening Balance Balance Balance 2500 2000 Inwards Standard 1500 Deviation 728.9761 391.9184 456.8129 665.6646 1000 Mean 2472 160 474 2158 Outwards 500 0 Closing 1 2 3 4 5 6 Balance days Amulspray 1kg Pch 2500 2000 Opening Inwards Outwards Closinglevel of inventory Opening Balance Balance Balance 1500 Standard Inwards 1000 Deviation 687.8120 357.189 121.639 635.32146 Mean 1505 324 188 1699 500 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amulspray 18 gm Pch 10000level of inventory 8000 Opening Balance Opening Inwards Outwards Closing 6000 Balance Balance Inwards 4000 Standard 2000 Outwards Deviation 1054.8994 0 654.343 465.7948 Mean 7556 0 458 7098 0 1 2 3 4 5 6 Closing Balance days 66
  • 65. Amulspray 200 gm Pch 6000level of inventory 5000 Opening Opening Inwards Outwards Closing 4000 Balance Balance Balance 3000 Inwards Standard 2000 Deviation 1101.661 1995.996 297.0056 1053.245 1000 Outwards Mean 3831 1600 843 3922 0 1 2 3 4 5 6 Closing Balance days Amulspray 200gm Refill 3500 3000level of inventory Opening Opening Inwards Outwards Closing 2500 Balance Balance Balance 2000 Inwards Standard 1500 1000 Deviation 766.5331 0 268.842 592.4689 500 Outwards Mean 2126 0 328 1798 0 1 2 3 4 5 6 Closing Balance days Amulspray 20gm pch 6000 5000level of inventory Opening 4000 Opening Inwards Outwards Closing Balance Balance Balance 3000 Inwards Standard 2000 Deviation 0 0 0 0 Outwards 1000 Mean 4950 0 0 4950 0 Closing 1 2 3 4 5 6 Balance days 67
  • 66. Amulspray 36gm pch 30000 25000level of inventory Opening Balance Opening Inwards Outwards Closing 20000 Balance Balance 15000 Inwards Standard 10000 Deviation 3066.791 1290.065 1843.126 1256.769 5000 Outwards Mean 18919 526.6667 2048 17398 0 Closing 1 2 3 4 5 6 Balance days Amulspray 500gm pch 2500 Opening Inwards Outwards Closinglevel of inventory 2000 Opening Balance Balance Balance 1500 Inwards Standard 1000 Deviation 263.951 318.9984 69.2023 258.7292 500 Outwards Mean 1600 200 194 1606 0 1 2 3 4 5 6 Closing Balance days Amulspray 500gm Refill 1400 1200level of inventory 1000 Opening Opening Inwards Outwards Closing Balance Balance Balance 800 Inwards Standard 600 Deviation 143.7330 195.9592 47.07866 143.6328 400 Outwards Mean 1024 80 82 1022 200 0 Closing 1 2 3 4 5 6 Balance days 68
  • 67. Amulspray 500gm tin 1000level of inventory 800 Opening Balance Opening Inwards Outwards Closing 600 Inwards Balance Balance 400 Standard 200 Outwards Deviation 126.580 0 63.01428 145.847 0 Mean 708 0 54 654 1 2 3 4 5 6 Closing Balance days Amulya 18gm Pch 7000 6000level of inventory Opening Opening Inwards Outwards Closing 5000 Balance 4000 Balance Balance Inwards 3000 Standard 2000 Deviation 739.599 0 282.1829 590.748 1000 Outwards Mean 4672 0 370 4302 0 1 2 3 4 5 6 Closing Balance days Amulya 1Kg Pch 1200 1000level of inventory Opening Opening Inwards Outwards Closing 800 Balance Balance Balance 600 Inwards Standard 400 Deviation 208.834 122.4745 76.57785 191.709 Outwards Mean 839 50 151 738 200 0 Closing 1 2 3 4 5 6 Balance days 69
  • 68. Amulya 200gm Pch 1600 1400level of inventory Opening 1200 Opening Inwards Outwards Closing Balance 1000 Balance Balance 800 Inwards 600 Standard 400 Deviation 224.927 0 64.7611 174.200 Outwards 200 Mean 1155 0 111 1044 0 1 2 3 4 5 6 Closing Balance days Amulya 20gm Pch 2500 Opening Inwards Outwards Closinglevel of inventory 2000 Opening Balance Balance Balance 1500 Standard Inwards 1000 Deviation 0 0 0 0 Mean 2016 0 0 2016 500 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amulya 25gm Pch 900 800 Opening Inwards Outwards Closing 700level of inventory Opening Balance Balance 600 Balance 500 Standard Inwards 400 Deviation 0 0 0 0 300 Mean Outwards 856 0 0 856 200 100 0 Closing 1 2 3 4 5 6 Balance days 70
  • 69. Amulya 36gm Pch 50000level of inventory 40000 Opening Opening Inwards Outwards Closing Balance 30000 Balance Balance Inwards 20000 Standard Deviation 16319.245 11757.55 3078.02 15117.81 10000 Outwards Mean 19682 9600 6318 22964 0 1 2 3 4 5 6 Closing Balance days Amulya 475gm Pch 300level of inventory 250 Opening 200 Balance Opening Inwards Outwards Closing 150 Inwards Balance Balance 100 Standard 50 Outwards Deviation 0 0 0 0 0 Mean 281 0 0 281 1 2 3 4 5 6 Closing days Balance Amulya 500gm Pch 3000 Opening Inwards Outwards Closing 2500 Balance Balancelevel of inventory Opening 2000 Balance Standard 1500 Inwards Deviation 893.354 534.864 236.2147 888.296 1000 Mean 1512 472 202 1781 Outwards 500 0 Closing 1 2 3 4 5 6 Balance days 71
  • 70. Amulya 50gm Pch 300 Opening Inwards Outwards Closinglevel of inventory 250 Opening 200 Balance Balance Balance 150 Inwards Standard 100 Deviation 0 0 0 0 50 Outwards Mean 256 0 0 256 0 1 2 3 4 5 6 Closing Balance days Amulya 900gm Pch 1600 1400 Opening Inwards Outwards Closinglevel of inventory 1200 Opening Balance Balance 1000 Balance Standard 800 Inwards Deviation 353.395 296.226 160.7699 325.6878 600 400 Mean 954 225 169 1010 Outwards 200 0 Closing 1 2 3 4 5 6 Balance days Amul Lite 200gm 70 Opening Inwards Outwards Closing 60level of inventory Opening Balance Balance 50 Balance 40 Standard Inwards Deviation 23.001 26.12789 16.32993 22.294 30 20 Mean 29 10.66667 17 23 Outwards 10 0 Closing 1 2 3 4 5 6 Balance days 72
  • 71. Nutramul 500gm Refil 14 12level of inventory Opening Opening Inwards Outwards Closing 10 Balance Balance Balance 8 6 Inwards Standard 4 Deviation 0 0 0 0 2 Outwards Mean 13 0 0 13 0 1 2 3 4 5 6 Closing Balance days Amul Ghee 1Ltr Refill 250 Opening Inwards Outwards Closing 200 Balance Balancelevel of inventory Opening 150 Balance Standard Inwards Deviation 58.718 0 28.556 56.705 100 Mean 149 0 28 122 50 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amul Ghee 1Ltr Tin 140 120 Opening Inwards Outwards Closinglevel of inventory Opening 100 Balance Balance Balance 80 Inwards Standard 60 Deviation 26.044 24.4949 4.806246 22.662 40 Outwards Mean 104 10 6 108 20 0 Closing 1 2 3 4 5 6 Balance days 73
  • 72. Amul Ghee 5Ltr Tin 50level of inventory 40 Opening Opening Inwards Outwards Closing Balance 30 Balance Balance Inwards 20 Standard Deviation 3.829 4.898979 1.974842 3.311 10 Outwards Mean 40 2 2 41 0 1 2 3 4 5 6 Closing Balance days Basundi 25 20level of inventory Opening Opening Inwards Outwards Closing Balance Balance Balance 15 Inwards Standard 10 Deviation 0 0 0 0 5 Outwards Mean 22 0 0 22 0 Closing 1 2 3 4 5 6 Balance days Kool Bottle 200ml 12000 Opening Inwards Outwards Closinglevel of inventory 10000 Opening Balance Balance 8000 Balance Standard 6000 Inwards Deviation 433.439 391.9184 80.95431 434.854 4000 Mean 9921 160 64 10017 2000 Outwards 0 1 2 3 4 5 6 Closing Balance days 74
  • 73. Kool Café Can 250ml 700level of inventory 600 Opening 500 Balance Opening Inwards Outwards Closing 400 Balance Balance Inwards 300 Standard 200 100 Outwards Deviation 0 0 0 0 0 Mean 576 0 0 576 1 2 3 4 5 6 Closing days Balance Kool Koko 250ml 700 600 Opening Inwards Outwards Closinglevel of inventory Opening 500 Balance Balance Balance 400 Standard Inwards 300 Deviation 0 0 0 0 200 Mean Outwards 597 0 0 597 100 0 Closing 1 2 3 4 5 6 Balance days Kool Milk Shaake Can 220ml 1000 Opening Inwards Outwards Closinglevel of inventory 800 Opening Balance Balance Balance 600 Standard Inwards 400 Deviation 0 0 0 0 200 Mean 842 0 0 842 Outwards 0 1 2 3 4 5 6 Closing Balance days 75
  • 74. Amul Calci 1Ltr 60 Opening Inwards Outwards Closinglevel of inventory 50 Opening Balance Balance 40 Balance Standard 30 Inwards Deviation 0 0 14.69694 14.696 20 Mean 48 0 6 42 10 Outwards 0 1 2 3 4 5 6 Closing Balance days Amul Gold 1Ltr 300 250 Opening Inwards Outwards Closinglevel of inventory Opening Balance Balance Balance 200 150 Inwards Standard Deviation 75.227 0 50.30474 58.511 100 Outwards Mean 164 0 25 137 50 0 Closing 1 2 3 4 5 6 Balance days Amul Shakti 1ltr 90 80 70 Opening Inwards Outwards Closinglevel of inventory Opening 60 Balance Balance Balance 50 Standard Inwards 40 Deviation 0 0 0 0 30 20 Outwards Mean 80 0 0 80 10 0 Closing 1 2 3 4 5 6 Balance days 76
  • 75. Amul Taaza 1Ltr 10000level of inventory 8000 Opening Balance Opening Inwards Outwards Closing 6000 Balance Balance Inwards 4000 Standard 2000 Outwards Deviation 1952.172 2201.817 342.070 1745.202 Mean 6011 1400 990 6422 0 1 2 3 4 5 6 Closing Balance days Amul Taaza 200ml 2000 Opening Inwards Outwards Closinglevel of inventory Opening Balance Balance 1500 Balance Standard 1000 Inwards Deviation 0 0 0 0 500 Mean 1525 0 0 1525 Outwards 0 1 2 3 4 5 6 Closing Balance days Amul Taaza 500ml 3500 3000 Opening Inwards Outwards Closinglevel of inventory Opening 2500 Balance Balance Balance 2000 Standard Inwards 1500 Deviation 499.215 293.938 199.0698 591.134 1000 Mean 2144 120 480 1784 Outwards 500 0 Closing 1 2 3 4 5 6 Balance days 77
  • 76. Amul Kool Lassee Opening Inwards Outwards Closing 200ml Balance Balance 200 Standard Openinglevel of inventory 150 Balance Deviation 0 0 0 0 100 Inwards Mean 144 0 0 144 50 Outwards 0 1 2 3 4 5 6 Closing days Balance Gulab Jamun 1kg tin 45 40 Opening Inwards Outwards Closing 35level of inventory Opening Balance Balance 30 Balance 25 Standard Inwards Deviation 5.465 9.797959 5.205766 4.996 20 15 Mean 35 4 4 36 10 Outwards 5 0 Closing 1 2 3 4 5 6 Balance days Gulab Jamun 500gm tin 150 Opening Inwards Outwards Closinglevel of inventory Balance Balance 100 Opening Balance Standard 50 Inwards Deviation 21.522 29.39388 11.183 17.996 Mean 111 12 8 115 0 1 2 3 4 5 6 Outwards days 78
  • 77. Total flow of different inventories 50000 Amulya 10 kg jar 45000 Amulya 25 Kg bag Amul A+ Cheese Slice 200 gm Cheese Chiplet 200gm 40000 Cheese Slice 200gm Cheese Spread 200gm Cheese Tin 400gm 35000 Pizza Cheese 200 gm Almond bar 35gm Amul milk chocolate 20 gm 30000 Amul milk chocolate 22 gm Bindazz Wafers 18gm box Bindazz Wafers 18gm jar 25000 Choco Zoo 12x300gm Tub Choco Zoo 12x500gm Tub 20000 Choco Zoo 3-pack 27gm Choco Zoo 60x81gm Birthday Dark Chocolate 35gm 15000 Fruit N NUT 40gm Fruit N NUT 150gm Milk Chocolate 35 gm 10000 Rejoice Assorted 135 gm Utterly Chocolate Syrup 650 ml Amul Fresh Cream 1ltr 5000 Amul Fresh Cream 200ml Amul Butter 100gm Amul Butter 500gm 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 DAY 6 DAY 7 79
  • 78. b) Inventory flow from retailer to customersAmul has divided Silchar town into 6 bits these are College road, Sonai road, Hailakandiroad, Central road, Tarapur&Malugram. Each bit has pre-determined day of delivery. DAY BIT MONDAY College road TUESDAY Sonai road WEDNESDAY Hailakandi road THURSDAY Central road FRIDAY Tarapur SATURDAY Malugram I. College RoadInformation regarding the flow of inventories of retailers of College Road are givenbelow 1st Retailer 100 90 Almond bar 35gm 80 70 Bindazz Wafers 60 18gm jar Choco Zoo 50 60x81gm Birthday 40 Amul Butter 100gm 30 20 Amul Butter 500gm 10 0 1 2 3 4 5 6 80
  • 79. 2nd Retailer120 Amul Butter100 100gm Amul Butter 80 500gm 60 Amulspray 18 gm Pch 40 Amulspray 1kg Pch 20 Amulspray 200 gm Pch 0 1 2 3 4 5 6 Almond bar 35gm70 3rd Retailer Choco Zoo 3-pack 27gm60 Choco Zoo 60x81gm Birthday50 Dark Chocolate 35gm40 Amul Butter 100gm30 Amul Butter 500gm20 Mithai Mate10 Amulspray 18 gm Pch0 Amul Taaza 1Ltr 1 2 3 4 5 6 4th Retailer Amul Butter140 100gm Mithai Mate120 Amulspray 18 gm100 Pch Amulspray 200 80 gm Pch Amulspray 60 500gm pch 40 Amulya 36gm Pch 20 Amul Taaza 1Ltr 0 Amul Taaza 1 2 3 4 5 6 500ml 81
  • 80. 5th Retailer Almond bar 35gm120 Choco Zoo 3-pack100 27gm Dark Chocolate 35gm 80 Mithai Mate 60 Amulspray 18 gm Pch 40 Amulspray 200 gm Pch 20 Amulya 36gm Pch 0 Amulya 500gm Pch 1 2 3 4 5 6II. Sonai road Information regarding the flow of inventories of retailers of Sonai Road are given below 1st Retailer Amul Butter60 100gm Amul Butter50 500gm Mithai Mate40 Amulspray 1kg Pch30 Amulspray 200 gm Pch20 Amulspray 36gm pch Amulya 36gm10 Pch Amul Taaza 0 1Ltr 1 2 3 4 5 6 82
  • 81. Cheese Slice 200gm 2nd Retailer70 Amul milk chocolate 20 gm60 Choco Zoo 3-pack50 27gm Amul Butter 100gm40 Mithai Mate30 Amulspray 36gm20 pch10 Amulya 18gm Pch 0 Amulya 36gm Pch 1 2 3 4 5 6 3rd Retailer Amulspray 1835 gm Pch30 Amulspray 1kg Pch25 Amulspray 20020 gm Pch Amulspray 36gm15 pch10 Amulya 36gm Pch 5 Amul Taaza 1Ltr 0 1 2 3 4 5 640 4th Retailer Cheese Tin 400gm35 Amul milk30 chocolate 20 gm25 Choco Zoo 3-pack 27gm20 Amul Butter15 100gm10 Amul Taaza 1Ltr 5 Amul Taaza 500ml 0 1 2 3 4 5 6 83
  • 82. 5th Retailer Amul milk chocolate 40 20 gm Choco Zoo 60x81gm 35 Birthday 30 Milk Chocolate 35 gm 25 Amul Butter 100gm 20 Kool Bottle 200ml 15 Amul Gold 1Ltr 10 Amul Taaza 1Ltr 5 0 Gulab Jamun 1kg tin 1 2 3 4 5 6III. Hailakandi road Information regarding the flow of inventories of retailers of HailakandiRoad are given below 1st Retailer 140 Amul Butter 120 100gm Mithai Mate 100 80 Amulspray 200gm Refill 60 Amulya 18gm Pch 40 Amulya 36gm Pch 20 Amul Taaza 500ml 0 1 2 3 4 5 6 84
  • 83. 2nd Retailer Cheese Tin120 400gm100 Amulspray 200gm Refill 80 Amulya 36gm 60 Pch Amul Ghee 1Ltr 40 Refill Amul Taaza 1Ltr 20 Amul Taaza 0 500ml 1 2 3 4 5 640 3rd Retailer35 Amulspray 500gm pch30 Amulya 1Kg Pch2520 Amulya 500gm Pch15 Amulya 900gm10 Pch 5 Amul Ghee 1Ltr Refill 0 1 2 3 4 5 6 4th Retailer Cheese Tin40 400gm Almond bar 35gm3530 Choco Zoo 3-pack 27gm25 Milk Chocolate20 35 gm Amul Butter15 100gm Amul Butter10 500gm Mithai Mate 5 0 Amulspray 36gm 1 2 3 4 5 6 pch 85
  • 84. 5th Retailer Cheese Chiplet 40 200gm 35 Amul Butter 30 100gm 25 Amul Butter 500gm 20 Amulspray 15 36gm pch 10 Amulya 36gm Pch 5 Amul Taaza 0 1Ltr 1 2 3 4 5 6IV. Central road Information regarding the flow of inventories of retailers of HailakandiRoad are given below 1st Retailer Cheese Spread 140 200gm Amul milk 120 chocolate 20 gm Amul Butter 100 100gm Amulspray 36gm 80 pch Amulspray 60 500gm pch Amulspray 40 500gm tin Amulya 36gm 20 Pch Amul Taaza 1Ltr 0 1 2 3 4 5 6 86
  • 85. 2nd Retailer Amul A+ Cheese Slice 200 gm140 Cheese Tin 400gm120 Amul milk chocolate 20 gm100 Choco Zoo 3-pack 27gm 80 Amul Butter 100gm 60 Amul Butter 500gm Mithai Mate 40 Amulspray 36gm pch 20 Amulya 1Kg Pch 0 1 2 3 4 5 6 Amulya 36gm Pch70 3rd Retailer Amulspray 200 gm Pch Amulspray 36gm pch60 Amulspray 500gm pch50 Amulspray 500gm tin40 Amulya 1Kg Pch30 Amulya 36gm Pch20 Amulya 500gm Pch10 Amul Taaza 1Ltr 0 Amul Taaza 500ml 1 2 3 4 5 6 Gulab Jamun 500gm tin80 4th Retailer Amul Butter70 100gm60 Amulspray 1kg50 Pch Amulspray 20040 gm Pch30 Amulspray 36gm20 pch Amulya 1Kg Pch10 0 1 2 3 4 5 6 87
  • 86. Cheese Chiplet 200gm 5th Retailer30 Cheese Tin 400gm Choco Zoo 3-pack 27gm25 Amul Butter 100gm20 Amulspray 1kg Pch15 Amulspray 200 gm Pch Amulspray 200gm Refill10 Amulya 1Kg Pch 5 Amulya 500gm Pch Amul Taaza 1Ltr 0 Amul Taaza 500ml 1 2 3 4 5 6V. TarapurInformation regarding the flow of inventories of retailers of HailakandiRoad are givenbelow160 1st Retailer140120100 80 Amul Butter 100gm Mithai Mate 60 Amulya 36gm Pch 40 20 0 1 2 3 4 5 6 88
  • 87. 60 2nd Retailer5040 Amulspray 1kg Pch30 Amulspray 200 gm Pch Amulspray 36gm pch20 Amulya 36gm Pch10 Amul Taaza 1Ltr0 1 2 3 4 5 660 3rd Retailer50 Amul Butter 100gm40 Amul Butter 500gm30 Mithai Mate20 Amulspray 1kg Pch Amulya 1Kg Pch10 Amul Taaza 1Ltr0 1 2 3 4 5 645 4th Retailer40353025 Mithai Mate20 Amulspray 36gm pch15 Amul Taaza 1Ltr10 Amul Taaza 500ml50 1 2 3 4 5 6 89
  • 88. 30 5th Retailer 25 Amul A+ Cheese Slice 200 gm 20 Amul milk chocolate 20 gm 15 Amul Butter 100gm 10 Amul Butter 500gm 5 Mithai Mate 0 1 2 3 4 5 6VI. Malugram Information regarding the flow of inventories of retailers of MalugramRoad are given below 80 1th Retailer 70 Amul Butter 100gm 60 Amulspray 1kg 50 Pch 40 Amulspray 36gm 30 pch 20 Amulya 1Kg Pch 10 0 1 2 3 4 5 6 90
  • 89. 2nd Retailer30 Cheese Tin 400gm2520 Amul Ghee 1Ltr Refill15 Amul Taaza 1Ltr105 Amul Taaza0 500ml 1 2 3 4 5 6 3th Retailer Almond bar 35gm35 Choco Zoo 3-pack30 27gm25 Dark Chocolate 35gm20 Mithai Mate15 Amulspray 18 gm10 Pch Amulspray 200 gm 5 Pch 0 Amul Taaza 1Ltr 1 2 3 4 5 660 4nd Retailer5040 Amulspray 200 gm Pch30 Amulspray 36gm pch20 Amulya 36gm Pch Amul Taaza 1Ltr10 0 1 2 3 4 5 6 91
  • 90. 5nd Retailer 140 120 100 80 Cheese Tin 400gm 60 40 Amul Butter 100gm 20 Amulspray 36gm pch 0 1 2 3 4 5 6 Amulya 36gm PchSatisfaction level of retailers regarding the distribution of Amul products Are you satisfied with the distribution of amul products? 14 12 10 8 6 4 2 0 Strongly agree Agree Neither agree nor disagree Disagree Strongly Disagree 92
  • 91. Findings 1. Warehouse a) They use Pull System of replenishment process. b) Generally they place order weekly but in case of shortage they place order on due date. c) They use optional replenishment system technique for inventory control. d) The lead time is three days. e) The orders grouped for dispatch is on the basis of location of distributors. f) They measure your warehouse performance on the basis of On-time Dispatch, On-time delivery, Inventory acuracy &Unit handled. g) The rate of obsolesce is less than 10%. 2. Distributor a) They use Pull System of replenishment process. b) They place order three times in a week. c) They use periodic review system technique for inventory control. d) The lead time is 24 hrs. e) The orders grouped for dispatch is on the basis of location of retailers. f) The rate of obsolesce is more than 10%. 3. Retailers a) They use Pull System of replenishment process. b) They place order one time in a week. c) They use periodic review system technique for inventory control. d) The lead time is one week. e) The rate of obsolesce is more than 10%. The Overall findings are as follows:- 1. The retailers are not satisfied with the distribution of Amul products. 2. There is monopoly in the market due to the presence of only one distributor in the Silchar market. 3. Amul warehouse is not providing all the SKU‟s regularly. 93
  • 92. 4. When there is excess of inventory, they use to dump their products in the lower leg (specially Amul Taza). 5. As per Amul officials the obsolesce rate is less than 10%. But as per the distributor & retailers it is more than 10%.Suggestions 1. As the retailers are not satisfied with the distribution of Amul products, the efficiency level of distribution should be increased. And the distribution should be done more than once in a week. 2. Proper forecasting should be done by Amul officials to overcome overstocking & stock out problem. 3. They should provide regularly all those SKU‟s which they have already provided to the consumers. 4. The Amul officials should take feedback from the retailers & consumers to understand their needs & wants. 5. Amul officials should take strict steps to stop this monopoly.ConclusionInventory is a quantity or store of goods that is held for some purpose or use (the termmay also be used as a verb, meaning to take inventory or to count all goods held ininventory). Inaccurate inventory counts can cost you sales and delay shipments past thepromise date. Out-of stock items as well as overstocked items in inventory can bedevastating to your business. Additionally, an overstated or understated inventoryvaluation can result in incorrectly reported assets within your financial statements.Inventory Management offers comprehensive reporting capabilities to keep you on top ofinventory status. Centralized inventory management consolidates inventory informationby tracking lot numbers, on-hand levels and expiration dates, making the re-orderingprocess more efficient. It also enables simultaneous tracking and documenting suppliesduring studies to reduce redundant data entry and increase workflow efficiency.Sothebiggest challenge Amul has to deal with was managing the continuous flow of all SKU‟sin the Silchar market to have competitive edge over the competitors. 94
  • 93. APPENDIX 95
  • 94. (QUESTIONARE) (Warehouse)Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing myproject in operations management on the topic INVENTORY STRATEGY FOR PROCESSINGINDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion&suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that theinformation furnished will be strictly confidential & used for academic purpose only.(Sagardwip Dey) 1. What is the replenishment process? Pull System Push system 2. How frequently you place order in C&F/Plant? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. Different stock keeping units do you currently having in your following products? I. Amul Butter 20g ______ 50g _______ 100g______ 500g____ II. Amul Cheese 400g ______ III. Amul Gold 1L ______ IV. Amul Taza1L _______ 200ml ______ 500ml ______ V. Amul Kool Cafe 200ml glass bottle _______ 250mlcan________ VI. Amul KoolLassee200ml _____ VII. Amul Spray 1kg _____ 200gm_____ 500gm _____ VIII. Amullya1kg _____ 200gm_____ 500gm _____ IX. Amul Mithai Mate 400gTin ____ X. Amul Chocolate a) Milk chocolate 12g _____ b) Fundoo milk chocolate 12g _____ c) Dark chocolate 35g _____ d) Fruit & Nut 40g _____ e) Almond Bar 35g _____ XI. Amul chocolate Syrup 650g plastic bottle ______ XII. Amul Bindaaz wafer 15g _____ XIII. Amul Fresh cream 200 ml ______ 1L _____ 96
  • 95. XIV. Amul Rejoice Associated chocolate 135g _____ 173g _____ 412g _____6. How are orders grouped for dispatch? By location of distributors / stock list / customer On first booked first dispatch basis irrespective of location & item By similar items By route Any other ____________________7. How you measure your warehouse performance On-time Dispatch On-time delivery Inventory acuracy Accuracy of invoice Stock outs Mismatch / error in dispatch Warehouse cycle time Customer complains Unit handled Value handled Do not measure Any other _________8. What is the average replenishment time for the dealers/distributors? 24hrs 48hrs 1 week 15 days Any other ______________9. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50% 97
  • 96. (QUESTIONARE) (Distributor)Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing myproject in operations management on the topic INVENTORY STRATEGY FOR PROCESSINGINDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion&suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that theinformation furnished will be strictly confidential & used for academic purpose only.(Sagardwip Dey) 1. What is the replenishment process? Pull System Push system 2. How frequently you place order ? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. Different stock keeping units do you currently having in your following products? XI. Amul Butter 20g ______ 50g _______ 100g______ 500g____ XII. Amul Cheese 400g ______ XIII. Amul Gold 1L ______ XIV. Amul Taza1L _______ 200ml ______ 500ml ______ XV. Amul Kool Cafe 200ml glass bottle _______ 250mlcan________ XVI. Amul KoolLassee200ml _____ XVII. Amul Spray 1kg _____ 200gm_____ 500gm _____ XVIII. Amullya1kg _____ 200gm_____ 500gm _____ XIX. Amul Mithai Mate 400gTin ____ XX. Amul Chocolate f) Milk chocolate 12g _____ g) Fundoo milk chocolate 12g _____ h) Dark chocolate 35g _____ i) Fruit & Nut 40g _____ j) Almond Bar 35g _____ XV. Amul chocolate Syrup 650g plastic bottle ______ XVI. Amul Bindaaz wafer 15g _____ XVII. Amul Fresh cream 200 ml ______ 1L _____ 98
  • 97. XVIII. Amul Rejoice Associated chocolate 135g _____ 173g _____ 412g _____6. How are orders grouped for dispatch? By location of distributors / stock list / customer On first booked first dispatch basis irrespective of location & item By similar items By route Any other ____________________7. What is the average replenishment time for the retailers? 24hrs 48hrs 1 week 15 days Any other ______________8. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50% 99
  • 98. (QUESTIONARE) (Retailers)Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing myproject in operations management on the topic INVENTORY STRATEGY FOR PROCESSINGINDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion&suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that theinformation furnished will be strictly confidential & used for academic purpose only.(Sagardwip Dey) 1. What is the replenishment process? Pull System Push system 2. How frequently you place order? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50% 6. Product movement Products Day1 Day2 Day3 Day4 Day5 Day6 100
  • 99. 7. Are you satisfied with the distribution of amul products? Strongly agree AgreeNeither agree nor disagree Disagree Strongly Disagree 101
  • 100. BIBILOGRAPHY 102
  • 101. BOOKSChopra, Sunil and Peter Meindl, 2007,Supply Chain Management – Strategy, Planningand Operation, 3rd Edition , Pearson Education.KRAJEWSKI L J & RITZMAN L P, 2007,Operations management. Strategy andAnalysis, 8th edition, ADDISON-WESLEY.Stevenson, William J, 2005, Production Operations Management. Boston, MA:Irwin/McGraw Hill.Bose D, 2006, Inventory Management, 4th Edition, PHI Private Limited.Muller (2003), Essentials of inventory management, [online] Available:http://www.books.coKothari C.R., 2004, Marketing Research, 2nd Edition, New Age international PublisherWEBSITEShttp://www.amul.comhttp://www.scribd.com 103

×