mini proj final

8/3/2019 Mini Proj Final

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CHAPTER 1

1.1 INTRODUCTION TO THE STUDY

THE PROJECT

Rubfila International Ltd is the lead manufacturer of Heat Resistant Latex

Rubber Thread. The applications of Heat Resistant Latex Rubber Thread are

surgical hosiery, orthopedic nettings, footwear, socks tops, corsets and

webbings of furniture.

The main raw material for HRLRT is natural rubber latex in centrifuged form.

In addition to rubber certain special chemicals like vulcanizing agents,

activators, accelerators, stabilizer, coagulators, dispersing agents, pigments

and plasticizers are also required in the production process.

Since the raw materials constitute more than 40% of the cost of production,

proper inventory control system would help in cost reduction. An attempt has

been made to formulate stock levels for the company. The variance analysis

ABC, FSN and VED analysis has also been tried.

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1.2 SCOPE OF THE STUDY

In almost every product produced the cost of material ranges between

30%-70% of the cost of production. Hence it becomes imperative for any

organization to control the cost of materials to control the overall cost and

to be competitive. Inventory control is a system which ensures the

provision of required quantity of inventories of the required quality at the

required time with the minimum amount of capital. Efficient inventory

control keeps cost down and helps production run smoothly. In inventory

also 20% of the stock contributes to 80% of the value and these 20% are

crucial as far as companys production is concerned. Realizing this

phenomenon inventory control in its attempt to reduce the cost of

inventory, adopts the policy of selective control.

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1.3 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE

To evaluate the method of inventory control system adopted in theorganization.

SECONDARY OBJECTIVE

To suggest suitable measures for cost effective methods of inventory control

and which helps improve production and is beneficial to the organization.

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1.4 RESEARCH METHODOLOGY

Research DesignThe research design adopted in this study is diagnostic. The study has

been done on the basis of inventory details maintained by the

company.

Selection of the problemThis particular problem was chosen because in Rubfila, the material

costs constitute 40% of the total working capital. The project aims at

studying means of reducing this cost through more efficient inventory

management.

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1.5 SOURCES OF INFORMATION

The inventory details were drawn from secondary sources like BIN

cards, Material Consumption Register, Stock Register and Material

Price List. For collecting data, discussions were held with the

Materials Manager (store). Data was also collected from current

literature on the subject.

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1.6 TOOLS & TECHNIQUES OF

ANALYSIS

TOOLS USED

ABC Analysis

FSN Analysis

VED Analysis

TOOLS USED FOR DATA REPRESENTATION

Pie Chart

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1.7 LIMITATIONS OF THE STUDY

1. The study pertains to raw materials and packaging materials. It does

not include work in progress and finished goods.

2. The percentage rates fixed for categorizing items in various analysis

can vary from organization to organization.

3. The work is subjected to future study,

4. Non availability of some quantitative data for ABC Analysis.

5. Cruciality of materials can vary from organization to organization

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CHAPTER 2

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LITERATURE REVIEW

CHAPTER 2REVIEW OF LITERATURE

Inventories are assets of a business. Generally inventories form about 20-30% of the

total assets of a manufacturing enterprise. Inventories require investment of funds. If

the inventories are too big, they become a strain on the resources. If they are too

small, the firm may lose the sale. Therefore, the firm must have an optimum level of

inventory. For this, an efficient management of inventory is essential. Thus the basic

problem is to determine the proper level of investment in inventories and to decide

how much inventory must be acquired during each period to maintain that level.

DEFINITION OF INVENTORY

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The term inventory has been defined by several authors. The more popular of them

are Inventory includes materials-raw in process, finished goods, packagings, spares

and others stoked in order to meet an unexpected distribution in future.

Another definition of inventory is that it can be used to refer to the Stock in hand at

a particular time of raw materials, goods in process, of manufactured finished

products, merchandise purchased for re sale and like tangible assets which can be

seen measured and counted. In connection with financial statements and accounting

records the reference may be to the amount assigned to the stock of goods owned by

an enterprise at a particular time.

The American Production and Inventory Society states that inventories are stock

keeping items which are held in a stock point and which serve to decouple

successive operations in the process of manufacturing a product and getting it to the

consumer.

TYPES OR FORMS OF INVENTORY

The inventory of a manufacturing concern is classified into the following three types:-

1. Raw materials inventory :- These are material inputs of production process.

These are used to manufacture the final product.

2. Work in progress inventory :- These are semi-finished products. These are

the products that need more work before they become finished products.

3. Finished goods inventory :- These are finished or final products which are

ready for sale. In the case of trading concern, the unsold finished product is

called finished goods inventory.

MEANING OF INVENTORY MANAGEMENT

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Inventory requires large capital investment. If inventory is not properly managed, it

may affect the production, marketing and finance departments. Ultimately this may

affect the existence and growth of the business. If a firm carries too much inventory,

it will run out of cash. Its capital will be unnecessarily tied up in excess inventory.

This is so because inventory is illiquid, it brings no return. Rather it brings certain

disadvantages. In the same time, if a firm carries too little inventory, it may result in

stock outs. The firm may lose sales. It may lose future customers as well because

stock outs result in customer dissatisfaction. So inventories require proper

management and control.

Inventory management simply refers to the management of inventory. It may be

defined as the overall way a company manages its inventory and uses its control

system to manage the benefits of carrying inventory against the cost.

DEFINITION OF INVENTORY MANAGEMENT AND

CONTROL

Inventory management involves the development and administration of policies,

systems and procedures which will minimize total costs relating to inventory

decisions and related functions such as customer service requirements, production

scheduling, purchasing traffic, etc. Viewed in that perspective inventory

management is broad in scope and affects a great number of activities in a

companies organization. Because of these numerous interrelationships, inventory

management stresses the need for integrated information flow and decision making,

as it relates to inventory policies and overall systems.

Inventory control on the other hand is defined in a narrow sense than inventory

management and pertains primarily to the administration of established policies,

systems and procedures.

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OBJECTIVES OF INVENTORY MANAGEMENT

Any firm will like to hold higher levels of inventory. This will enable the firm to be

more flexible in supplying to the customers. Most of the customers may require

immediate delivery. Higher inventories may help meeting their demands. Thus there

is no chance of loss of sale. These are the benefits of carrying higher level of

inventory. As against the benefits, there are certain costs of inventory. The cost

includes capital cost of the stock (investment) and the costs of storing and carrying.

On the other hand holding lower level of stock than required may result in stock

outs. The cost of stock out may be in the form of loss of sales or customers

dissatisfaction. The stock outs may also result in delays or interruption in the

production process. Thus holding too much inventories and too less inventories,

both are undesirable.

So every firm is required to manage the inventories in such a way as to get the best

return out of it. It must weigh the benefits of holding inventory against it costs. Then

only firm can maintain optimum inventory. This is the basic objective of inventory

management. The objectives may be summarized as follows

1. To ensure that adequate inventories are available for smooth operation.

2. To minimize investment of funds in the inventories.

3. To minimize the cost of ordering and carrying inventories.

4. To maximize the wealth of shareholders.

5. To avoid cash crisis.

6. To avoid both over-stocking and under-stocking of inventories.

7. To minimize losses on account of obsolescence, pilferage, wastage, etc

8. To ensure right quality products at reasonable prices.

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The basic objective of inventory management is to determine the optimum level of

inventory i.e. the level at which the interests of all the departments are taken care of.

TECHNIQUES OF INVENTORY MANAGEMENT

In order to keep an optimum level of inventory and minimize the investment in

inventories, management should try to balance out the expected costs and benefits of

maintaining inventories.

Various techniques have been suggested for the efficient management of

inventories. Important techniques of inventory management are as follows.

1. Economic order quantity

2. Classification and codification of inventories

3. Stock levels

4. Safety stock

5. Inventory turnover ratio

6. ABC analysis7. VED analysis

8. FSN analysis

9. Perpetual inventory system

10. JIT inventory system

A brief description of the various inventory techniques.

1. Economic Order Quantity

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The EOQ enables the firm to determine the optimum level of inventory.

EOQ can be defined as the quantity which is most economical to order at a

given time. In other words, it is the ordering quantity which minimizes the

total cost of inventory. The total cost of inventory comprises ordering costs

and carrying costs. Ordering costs are those costs which are relating to

acquisition of materials. These include the cost of placing a purchase order.

Egs are transportation cost, salaries of staff involved in placing order, cost

of stationery, telephone, etc.

Carrying cost refer to cost of holding or carrying the stock in storage. These

include rent and insurance of stores, clerical costs, obsolescence, wastage of

materials, etc. Practically the two costs have inverse relationships. If the

order quantity is larger, the ordering costs will be low. Therefore the

ordering quantity should be fixed at that level where the total cost of

inventory is lowest. This is possible when the ordering cost is equal to

carrying or storage cost.

Thus EOQ is that quantity at which the total inventory cost is minimum i.e

ordering cost and carrying cost are equal. There are 4 methods to determine

EOQ. They are

1. Algebraic method

2. Graphical method

3. Tabular method

4. Cost Comparison method

2. Classification and codification of materials

For efficient storage, proper classification and codification of materials is

necessary. Classification of materials refers to groping of materials

according to their nature in suitable categories. For example, iron,

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aluminium, copper, etc may be classified as metals, items like soap, cotton

waste, lubricating oil, etc may be classified as consumable stores, all forms

of tools including jigs and fixtures may be classified as tools, etc. The

classification of materials facilitates convenience in material handling and

their easy identification.

Having classified the materials, the next step is to codify the materials.

Codification is the process of giving distinct numbers or letters or symbols to

each item of material to facilitate easy identification. Thus the number or

letter or symbol is a code. It is secret and short name of material item.

3. Stock Levels

Inventory management aims at maintaining stock of materials at optimum

level. There should be neither over stocking nor under stocking. In order to

avoid over stocking and under stocking of materials or to minimize the total

cost of inventory, management may fix certain stock levels like maximum

level, minimum level, re order level, average level and danger level.

Maximum level : Maximum stock is the upper level of inventory. It is the

maximum quantity of an item of material that can be held in stock at any

time. This is the level above which stock should be maintained. The main

purpose of this level is to avoid overstocking of materials and unnecessary

blocking of capital inventories. Maximum level is computed as follows :

Maximum level = Re order level + Re order quantity (Minimum

consumption * Minimum Re order Period)

Minimum Level : Minimum stock level is the minimum quantity of stock

that should be held at all times. It is that level below which stock should not

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normally be allowed to fall. The main purpose of this level is to ensure that

production is not stopped due to non-availability of materials. Minimum

stock level is computed by the following formula :

Minimum level = Re order level (Normal consumption * Normal Re order

period)

Normal consumption means average consumption of material. Normal or

average reorder period is computed as follows

(Minimum reorder period + Maximum reorder period)/ 2

Reorder Level (Ordering Level) : This is the level at which order is placed

for further supply of materials. When the stock of materials reduces this

level, the storekeeper should initiate action for the purchase of material.

Reorder level is fixed somewhere between minimum level and maximum

level. It must be fixed in such a way that the stock representing the

difference between reorder level and minimum level should be sufficient to

meet demands of the production till new materials arrive. Reorder level is

computed as follows

Reorder level = Maximum Consumption * Maximum reorder period

Or

Minimum level + (Average Consumption * Average reorder period)

Average Stock Level : This is the average stock held by a concern. It is

calculated by the following formula

Average stock level = Minimum level + Re order quantity

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Or

(Minimum level + Maximum level)/ 2

Danger Level : This is the level of stock below which the stock should be

never be allowed to fall. If the stock level falls below the minimum level, it

is called danger level. When stock reaches danger level, urgent and

emergency action should be taken to replenish the stock so that production is

not stopped. Danger level is rightly described as danger warning level and is

calculated as

Danger level = Average consumption * Maximum reorder period for

emergency purchases

Reorder period : In connection with stock levels, the term reorder period

refers to the time required to obtain new materials. It is the time gap required

between placing an order and the actual receipt of the materials. In short, it is

the time lag in procurement of materials. Sometimes reorder period is called

lead time or delivery period.

4. Safety Stocks

A safety stock is an additional supply of inventory that is carried all the time

to be used when normal stocks run out. It is the minimum additional

inventory to serve as a safety margin or buffer or cushion to meet an

unanticipated increase in usage. If an order is placed when the inventory

reaches 250 units instead of 200 units, the additional 50 units constitute the

safety stock. It protects the firm from stock outs due to unanticipated

demand for an item or slow deliveries.

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Increasing the amount of inventory held as safety stock reduces the chances

of stock outs. Therefore it reduces stock out costs. But the level of

investment is increased by the amount of safety stock.

In determining the optimum quantity of safety stock, the firm has to consider

two types of costs. (1) Opportunity cost of stock out and (2) carrying costs. If

a firm maintains large quantity of safety stock, carrying cost will be larger,

but opportunity cost will be lower. On the other hand, if a firm maintains low

level of safety stock, frequent stock outs will occur. This results in high

opportunity cost. But carrying costs will be low.

Thus the optimum level of safety stock involves a trade off between the cost

of stock outs and the carrying costs of safety stock. The safety stock will be

optimum when the total costs of carrying and stock out costs is at minimum.

5. Inventory turnover ratio

Material turnover ratio is the ratio of cost of material consumed during a

given period to the average stock during that period. It indicates the speedwith which the raw materials have been consumed in production. It gives the

number of times in a year stock is used up and replenished. In short, it shows

the rate of consumption of materials. Stock turnover ratio is also called stock

velocity. It is computed as follows

Stock turnover ratio (times) = Cost of material consumed / Average stock

Cost of material consumed = Opening stock + Purchases Closing stock

Average stock = (Opening stock + Closing stock) / 2

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Material turnover ratio can also be expressed in days as follows

Material turnover ratio (days) = 365 / Material turnover ratio in times

Interpretation of the ratio : A high turnover ratio indicates that materials

are fast moving, lower obsolescence, lower average carrying cost and

material losses, etc. A lower turnover ratio on the other hand, indicates that

materials are slow moving, higher obsolescence, larger average carrying cost

and material losses, excess stock, etc.

Significance of material turnover ratio : Material turnover ratio is useful

to avoid unnecessary investment in those materials whose consumption is

much less. It also helps to avoid obsolescence of stock and incurring of

unnecessary storage costs. Through this ratio it is possible to know whether

the materials are fast moving or slow moving. In other words, this ratio

indicates that for how many days the materials remains in stock. Thus the

stock turnover ratio is an important indicator of efficiency in material

management.

6. ABC AnalysisThe concept of ABC analysis was coined by Pareto, an Italian

philosopher in the 19th century. He illustrated graphically the fact that most

of the wealth in Italy was owned by a small proportion of the population.

Likewise an analysis of material cost in all factories revealed that about 80%

of the total value of issues accounts for 20% of the items.

In the case of large concerns large numbers of items are kept in the stores.

Therefore, it is practically impossible to concentrate on each and every item.

In such situations, ABC analysis is used with a view to exercise better

control over materials. It is one of the best and popular techniques of

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inventory control. Under ABC analysis all materials are classified into three

categories- A, B and C according to value.

Category A includes high value materials (costlier materials). Category B

includes medium or moderate value of materials (less costly materials).

Category C includes lower value materials (least costly materials).

According to this technique a greater or strict control is exercised over

category A materials, a moderate control is exercised over category B

materials and relatively lesser degree of control over category C materials.

Thus ABC analysis is an analytical technique of material control that divides

materials into three categories and uses different degrees of control over each

category. It aims at concentrating efforts in those items where attention is

needed most. Thus it is the management by exception system of inventory

management. The following example helps to understand the concept :

Categor

y

% of total number of

items

% of total material cost

(value)

A 10 70

B 20 25C 70 5

Table 2.1(a) ABC analysis

Category A materials represents 70% of the total material cost (value), but it

constitutes

Only 10% of the items or quantity (high value materials), Category B

materials represent

25% of the total material costs constitute 20% of the material items (middle

value materials). Category C though constitutes 70% of the total items; it

represents only 5% of the total value (low value materials). Thus this method

assumes that smaller number of items in inventory may have larger money

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value, and the larger number of items has smaller money value. ABC

analysis is also called proportional parts value analysis or demand and

supply method or Paretto analysis.

ADVANTAGES OF ABC ANALYSIS

1. It ensures closer and stricter control over costly items of materials in which

large amount of capital is invested.

2. It helps to use working capital in a better way.

3. It leads to reduction in costs.

4. It reduces clerical costs.

5. Investment in materials can be regulated.

6. It helps to maintain high stock turnover ratio.

7. FSN Analysis

Inventory turnover is the basis of exercising material control. Stock

Turnover ratio is calculated as follows:

Cost of materials consumed during the period / Cost of average stock held

during that period

A low ratio is an indicator of slow moving stock. On the other hand a high

ratio is an indicator of fast moving stock. A low ratio leads to overstocking.

If stock turnover ratio is 0 it means that the item has not been used at all and

should be disposed off.

By doing FSN analysis materials can be classified based on their movement

from inventory for a specified period. Items are classified based on

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consumption and average stay in the inventory. Higher the stay of item in the

inventory, the slower would be the movement of the material.

F Fast moving

S Slow moving

N Non moving

Sometimes the term FNS is also being used, where

F Fast moving

N Non moving

S Slow moving

The following are the steps for doing FSN analysis

1. Calculation of average stay and the consumption rate of the material in the

warehouse

2. FSN classification of materials based on average stay in the inventory

3. FSN classification of materials based on consumption rate

4. Finally classifying based on above FSN analysis.

Process

Lets take 10 materials for analysis. Following is the analysis of SKU01.

Period of analysis is 15 days.

Calculation of consumption rate and average stay of the material in the

inventory

Opening Balance : 50

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Table 2.2(a) FSN analysis

Average stay of the material = Cumulative No of Inventory Holding Days/

( Total quantity received + Opening Balance) =1161/115 =10.09 Days

Consumption Rate = Total Issue Qty/Total Period Duration =46/15 =3.06Nos/Day

Now list down the materials with average stay and consumption rate

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Table 2.2(b) Materials with average stay & consumption rate

Now Carry out the FSN analysis on the basis of Average Stay only as below

in MS Excel as below by sorting down in descending order of Average stay.Every company has its policy for defining FSN . Here FSN has been taken as

F--10%, S-20%, and N -70%

Table 2.3(c) FSN classification based on average stay

Now carry out the FSN classification only on the basis of consumption rate

similarly as above

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Table 2.2(d) FSN classification based on consumption rate

Now carry out final classification by combining both as under

Table 2.2(e)Final FSN classification

This is how FSN analysis is done.

This technique of material control is applicable to spare parts, oils, lubricants

and such like. Spare parts are classified into Vital, Essential and Desirable.

Vital spares are those which are very critical for production. If these are out

of stock, it will lead to immediate production stoppage and heavy production

loss. Without Essential spares, production can be done only for few hours or

a day.

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Desirable spares are those which are required for production, but factory van

manage without them for sometime, say a week or even more because they

have substitutes. While exercising control, greater attention should be paid

on vital spares.

8. VED Analysis

This technique of material control is applicable to spare parts, oils,

lubricants and such like. Spare parts are classified into Vital, Essential and

Desirable. Vital spares are those which are very critical for production. If

these are out of stock, it will lead to immediate production stoppage and

heavy production loss. Essential spares are those which are very important.

Without these, production can be done only for few hours or a day. If they

are out of stock for a long period, production will stop.

Desirable spares are those which are required for production, but factory can

manage without them for some time, say, a week or even more because they

have some substitutes. While exercising control, greater attention should be

paid on vital spares.

It can also be said like the spares stock out of which even for a short time

will stop production for quite sometime and where stock out cost is high are

Vital spares and these require maximum control. Desirable items are those

whose absence for a week or so will not lead to production stoppage.

Minimum control is sufficient for desirable items.

The items the absence of which cannot be tolerated for more than a few

hours or a day and the cost of production is high and which are essential for

the production are called essential items. Medium control is required in these

cases.

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9. Perpetual Inventory System

The system of material control on a continuous basis while the material is instorage is called perpetual inventory system. Under this system, the actual

stock is taken continuously and is compared with the stock as shown by the

material records. It is a method of recording stores balance after every

receipt and issue, to facilitate regular checking and to avoid closing down of

factory for stock taking.

Thus it is a method of inventory control which enables to know the stock

position of every item of material at all times. The basic objective of this

system is to make available details regarding quantity and value of stock of

each type of material at any time. This is made possible by verifying

regularly the physical stock with the stock shown by material records.

An essential system of perpetual inventory is continuous physical stock

taking. Continuous stock taking involves physical verification of each item

of stores by counting, measuring or weighing. This is done by independent

internal audit staff. After ascertaining the physical stock, it is compared with

stock as shown by material records. When the stock is incorrect, an enquiry

is made and the discrepancies are adjusted in the records to make them

correspond with the physical balance.

10. Just In Time(JIT) Inventory Technique

JIT is a modern technique of inventory control. It was first used by the

Japanese Motor Company, Toyota. The system aims at minimizing

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inventories of raw material and work-in-progress. It also aims at eliminating

waste from every aspect of manufacturing and its related activities.

The term JIT refers to producing only what is needed, when it is needed and

in just the quantity needed. It is a highly integrated production, sales and

distribution system leading to continuous flow to produce the kinds of units

needed at the time needed and in quantities needed.In the words of Fujio Cho

of Toyota, JIT is anything other than the minimum amount of equipment,

materials, parts, space and workers time, which are absolutely essential to

add value to the product.

There are two aspects of JIT JIT production and JIT purchasing. JIT

production is a system which is driven by demand for finished products,

whereby each component on a production line is produced only when needed

for the next stage. The aim is to produce the required items of high quality

exactly at the time they are required. Under JIT purchasing, a company

makes arrangement with supplier to deliver materials just before they are

needed in the production process.

In our study we are considering only ABC analysis, FSN analysis and VED

analysis.

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CHAPTER 3

THE COMPANY

3.1 THE INDUSTRY

The world rubber industry is demand led and the continued growth is essential for

the future development of the industry in Asia. World rubber demand has grown

continuously since the sixties from 4.4 million tons to 15.9 million tons in the

nineties, an annual average of 3.6%, but the rate has varied considerably with the

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world economic cycles. The tyre industry is estimated to consume somewhere

between 50-60% of world rubber supplies with non tyre automotive products taking

the total to perhaps 70% of the total.

The demand for rubber thus originates essentially from the automotive industry the

driving force for which comes from two sources : the continuous increase in

population and the aspiration of the countries throughout the world for ever higher

levels of economic development.

Population growth is a key factor behind the rise in consumption, and Asia/Pacific

contains three of the worlds top five most populous nations namely China, India

and Indonesia, giving it 64% of the worlds population. While population is the base

of the elastomer demand, it is the economy which dictates the place of its growth.

Growth in elastomer consumption in the Asian region resulted from economic

growth in, first Japan and then later in the Republic of Korea and Taiwan and most

recently, in China and the countries of the Association of South East Asian Nations

(ASEAN). As a result, the Asia/ Pacific region currently consumes 44% of the total

elastomer.

The important question for the Asian rubber industry is the extent to which this

growth in demand will continue not only in the region itself but also in the major

industrialized countries, since steady growth in these economies is important for

rubber consumption in their major trading partners in the Asia/ Pacific region.

Before the recent financial problems the rate of growth of rubber demand for the

Asia / Pacific region was forecast to continue at about 5.5% year. How much current

economic problems will affect the rubber industry in the region is still largely a

matter of conjecture but the Apec meeting has suggested regional growth down to

about 3.5%. The economic rescue packages that have been arranged indicate the

importance of continued economic prosperity in the region to other economies.

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Because of the steps taken by the respective governments in extending financial

support it seems likely that the countries affected will emerge just as strongly in a

year or two.

THE INDIAN RUBBER INDUSTRY

The Indian rubber industry with a phased development has achieved a spectacular

progress since independence in 1947. As a result of this phenomenal growth and

development the Indian rubber industry now occupies the fourth position in the

world, with an annual turnover of about 2.5 billion US dollars. In view of the huge

population and the fast industrial and economic development, the growth of industry

will depend on the availability of natural rubber which is the life blood of rubber

industry.

Therefore it is of utmost importance to review the present status of the natural

rubber industry in India to assess its future development and potential.

NATURAL RUBBER PRODUCTION IN INDIA

The Natural Rubber industry in India has maintained a steady growth all through the

post independence era. An insight into the spectacular progress achieved in NR

production by the industry can be seen from the dramatic increase in area production

and productivity achieved since 1950-51.

The Indian Natural Rubber industry achieved a steady growth since the nineteen

fifties. The growth and development of the NR industry in India is in fact a world

record. Due to this growth the industry has become fourth in production and first in

productivity when compared to other major NR industries in the world. This

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spectacular performance was achieved mainly due to the concerned promotional and

development efforts of the rubber Board of India.

The main measures through which Rubber Board promotes the development of the

industry are the following.

Evolution and release of a new high yielding clone namely RRII-105 suited

to the agro climatic conditions prevailing in South India.

Extensive use of this clone by the farmers in South India in new planting and

re planting.

Adoption of all new innovations in NR production by the rubber growers in

the country due to the persuasion and motivation by the Rubber Board under

the Rubber plantations Development Schemes.

The maintenance of the remunerative prices for NR in the country.

The bullish demand for NR by the rubber consuming industry in India

making rubber a readily saleable product in any form anywhere in the

country.

THE CURRENT PRODUCTION & CONSUMPTION PATTERN OF NR IN

INDIA

The production of natural rubber in India during 1997/1998 was 585000 MT and

productivity touched the level of 1550kg/Ha. The average rate of growth in

production is about 7.5%. The growth rate and productivity of the Indian NR

industry when compared to that of the major NR industries in the world can be

considered as one of the best despite elatively hostile terrain and adverse climatic

conditions.

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The projected tappable area, yield and production are given in the following table.

PROJECTED TAPPABLE AREA PRODUCTION AND PRODUCTIVITY

YEAR TAPPABLE AREA IN

Ha

PRODUCTION IN

TONS

PRODUCTIVITY IN

Kg/Ha

2000-

01

420000 695000 1650

2005-

06

471000 817000 1735

2010-

11

680000 914000 1790

Table 3.2(a)

PROJECTED PRODUCTION AND CONSUMPTION OF NR IN INDIA

YEAR PRODUCTION

(MILLION TONS)

CONSUMPTION

(MILLION TONS)

GAP

(MILLION TONS)

2000-01

2001-02

2002-03

2003-04

2004-05

695

730

745

774

796

746

790

835

882

930

51

60

90

108

134

Table 3.1(b)

It can be seen that consumption is estimated to be more than production throughout

and the gap between consumption and production will increase on a continuous

basis and this would indicate beyond doubt the demand for natural rubber will

remain dearer to India.

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3.2 COMPANY PROFILE

Rubfila International Ltd (RIL) is a Public Ltd Company promoted by Rubpro Sdn.

Bhd, Malaysia and Kerala State Industrial Development Corporation. The Company

which started with manufacturing extruded Round Latex Rubber Thread later

ventured into the manufacture of industrial adhesives used in various applications

like footwear/ leather goods, lamination/ printing, carpet, construction,etc. The state

of the Art infrastructure facility is located at New Industrial Development Area,

Kanjikode, Palakkad and Kerala. Kerala is the heart land of natural rubber in India.

The production facility of RIL is designed to produce Talc Coated RubberThread(TCR) as well as Silicon Coated Thread (SCR) and fine grade of eco-friendly

water based adhesives. The annual production capacity of this world class facility is

6350MT and 20,000MT of adhesives per annum. RIL is the market leader in India

in the business of rubber threads and is also a leading exporter of the product from

India. RIL produces rubber threads for various applications like apparel, food grade,

furniture webbing, bungee jumping, toys, medical netting and diaper.

RIL produces adhesives suitable for various industry segments like leather and

footwear, tyre, re-treading, wood, rexin and foam, automotive, to name a few.

QUALITY POLICY

To supply always quality product to the complete satisfaction of internal and

external customers through continual improvement and by doing right first time and

everytime.

ENVIRONMENTAL POLICY

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RIL is committed to preserving the environment and keeps a continuous vigil on

environmental related matters. As a part of its endeavors in this field, the Company

was certified with ISO-14001 by BVQI

EXPORT RECOGNITION

Ever since its inception RIL has been a trail blazer in the export of rubber thread

from India and has its customers spread over 25 countries around the world. For its

outstanding export performance and foreign exchange earnings, RIL was cited with

Export Awards instituted by CAPEXIL (Chemical and Allied Products Export

Promotion Council of India), AIRIA (All India Rubber Industries Association) and

ICCI (Indian Chamber of Commerce and Industries).

BEST POLLUTION CONTROL MEASURES

RIL is committed to preservation of the environment for the future generation. RIL

has an advanced Effluent Treatment Plant and continuously ensures that the steps

are taken to keep the ecology without damages.

BEST MATERIALS MANAGEMENT PRACTICES

RIL has a team of professionals who has expertise and experience in updated

management practices. The various functions headed by professional managers

follow international trends in management. The practices adopted by RIL have been

cited in several B schools and were recognized by various professional bodies like

Indian Institute of Materials Management.

MARKET NETWORK

DOMESTIC MARKET

Rubfila is the undisputed market leader in India in Rubber Threads. The Indian

customers prefer RILs products over others due to quality and other service

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aspects. RIL has marketing offices at Tirupur, Mumbai and New Delhi for effective

customer support and services.

EXPORT MARKET

RIL has a strong international presence with exports to 25 countries around the

world which include USA, countries in Europe and Asia. RIL has been able to carve

a unique position in the International Market owing to its ability to produce a wide

variety of quality products. RILs quality is acknowledged as one of the best in the

world.

RESEARCH AND DEVELOPMENT

RIL believes in continual product improvement and product innovation and

PRESERVES THE SAME THROUGH A DEDICATED R& D INITIATIVE. The

R & D crew consists of dedicated Polymer Scientists, hand picked by the

Management and trained at the facilities of Rubpro Sdn. Bhd.

In the interest of the industry and the user segments, RIL offers to develop custom

made products of rubber threads for customers to suit specific requirements.

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3.3 PRODUCT PROFILE

Rubfila is here to make the product to suit the customers requirement. RIL presently

manufactures 9 sizes of threads in different colours. The products are manufactured

and sold in ribbons and spools..

TALC COATED RUBBER THREAD (TCR)

RIL offers talc coated rubber thread in sizes ranging from Count 20 to 110. RIL

produces talc coated rubber thread in New Super White, Blue White, Snow White

and Black. RIL has formulations designed to suit specific customer needs like high

elongation, high tenacity, food grade and super heat resistant apart from the regular

variety.

SILICONE COATED RUBBER THREAD (SCR)

RIL is one of the new facilities in the world that offers silicone coated rubber

thread.. Silicone coated rubber thread uses silicon emulsion, specially formulated,

instead of talc powder as an anti-tack agent. Silicon coated rubber thread is eco-

friendly and results in fewer needle breakages and lower machine interruptions.

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Moreover the yield per unit weight is higher compared to that of talc coated rubber

thread. Silicon coated rubber threads are available from Count 11 to Count 50.

FOOD GRADE RUBBER THREAD

Food grade rubber thread is specially formulated to meet the global requirements for

packing food stuff. Food grade is available only in natural shade, light cream, as no

artificial colours are being used. Food grade rubber thread is available in talc coated

version . Food grade order requires higher lead time as specially preserved raw

material are to be used to ensure minimum chemical presence. Food grade rubber

thread also matches the elastic properties of the regular rubber thread. It can

withstand normal cooking temperature upto 140 degree Celsius. Wet heat is not a

problem for the thread, however dry heat will actively degrade the rubber thread.

FURNITURE GRADE RUBBER THREAD

Furniture grade rubber thread is available both in Silicone coated and Talc coated

versions, but majority of the users prefers to use silicone coated. These products are

specially formulated and processed to obtain High Modulus, to make very strong

webbing. Globally the usage of springs in furniture is being fast replaced with

elastic webbings. Elastic webbing gives better and uniform cushion effect.

SUPER HEAT RESISTANT LATEX RUBBER THREAD

Super heat resistant threads were developed to withstand high processing

temperatures. Super heat resistant threads retain atleast 80% of the modulus after

exposure to dry heat of 150 degree Celsius for 2 hours while the normal threads

retain only 50% modulus. This product doesnot have longer shelf life and the

recommended storage is 6 months only.

COLOURED RUBBER THREADS

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RIL is the only company to offer the whole variety of coloured rubber threads. RIL

engineering wing is competent to design any colour suitable for specific

applications. RIL offers toy grade as well as fishing grade coloured rubber threads.

Toy grade has better flammability characteristics while the fishing grade is marked

by colour vibrancy and elongation.

DIAPER THREADS

Rubber Thread is used in diapers to hold it tight to the body. So for superior quality

of diapers, the most significant constituent is the elastomer attached into the diaper.

Good quality threads can give the diaper the anatomical shape which helps better

liquid barrier. Rubfila threads were tested for Class A, Oeko Tex 100

certification for usage next to babies skin. Products suitable for Baby diapers and

Adult diapers are available with RIL.

COVERED RUBBER THREADS

SPOOLING

Single Rubber Threads are wound on Bobbins (Tubes) to satisfy needs. At Rubfila

we have the facility to wind any count from C-38 to C-105 Rubber Thread on

individual tubes (Bobbins). These Bobbins are available from 500gm t0 1000gm

depending on customer requirements.

COVERED RUBBER THREADS

Covered rubber threads refer to individual rubber thread covered with polyester or

nylon yarn which are used in the manufacture of Socks, Gloves, Sweaters, Knee

Guards, Panty hoses, Stockings and for making elastic tapes in needle looms.

Covered rubber threads are usually woven in the form of cones weighing 500gms to

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1kg or in cheese form weighing 200gms to 300gms. They are also wound in bobbins

and cones for use as stitching thread for special applications.

APPLICATION

HOSIERY APPLICATION

Prime use of the rubber thread is in hosiery applications. Latex Rubber threads are

primarily used to manufacture various types of elastic tapes mainly for foundation

garments (briefs, trunks, panties), shorts, pants, skirts, sportswear, sock tops,etc.

They are also used in elastic tapes for diapers, shoe uppers, headbands and

wristband for sportsmen and travel goods.

SPECIAL APPLICATIONS

Rubber threads are also used to make fishing baits and in Pole fishing. Coloured

Rubber threads are used for these applications. Coloured rubber threads are also

used for making toys like koosh balls and doll hair, etc. Medical nettings, braids,

laces, cords, catheter manufacturing and webbing for furniture are other applications

of rubber thread.

QUALITY

At RIL, the buzz words are Quality and Customer delight. RIL ensures consistent

quality products to the customer by a 3 pronged quality approach-control of inputs,

control of process and control of outputs. RIL has a chemical lab installed with

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advanced testing equipments and the lab personnel work round the clock to monitor

and control the quality of inputs to the process.

The process parameters are monitored at frequent intervals to ensure that the process

is within control and thereby assuring a consistent quality to the customer. DCS

systems with SCADA are installed to measure and monitor the process parameters.

The quality of the output is measured and monitored by a physical lab again with a

committed crew that works round the clock. They ensure that the quality of the

output is as per global standards.

3.4 ORGANIZATION CHART

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CHAPTER 4ANALYSIS &

INTERPRETATION

CHAPTER 4

ANALYSIS AND INTERPRETATION

In this study ABC, FSN and VED Analysis have been done. Fast moving items

which either belong to A category or belong to Vital category have been

classified as X category items. Essential or B category items which are slow

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moving have been categorized as Y category items, non moving C category or

desirable items have been categorized as Z category items.

ABC Analysis

ABC ANALYSIS OF MATERIALS GIVEN IN ANNEXURE 1

No PARTICULARS ANNUAL

CONSUMPTION

CUMULATIVE

AMOUNT

% CLASS

1 Latex 332,619,009.64 332,619,009.64 81.67 A

2 Furnace oil 25,597,826.11 358,216,835.75 87.96 A

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3 Acetic acid 12,047,576.70 370,264,412.45 90.92 A

4 Zinc oxide 4,619,715.84 374,884,128.29 92.05 A

5 Ralox/lowinox 5,106,245.55 379,990,373.84 93.30 A

6 Carton 30kg 5,240,229.60 385,230,603.44 94.59 A

7 Pilcure ZMBT 3,667,675.47 388,898,278.91 95.50 B

8 Titaniumdioxide 3,834,716.52 392,732,995.43 96.43 B9 Spray dried powder 1,698,668.73 394,431,664.16 96.85 B

10 Diesel 1,023,718.60 395,455,382.76 97.10 B

11 Pilcure ZDBC 1,060,117.76 396,515,500.52 97.36 B

12 Caustic potash flakes 1,915,232.33 398,430,732.85 97.83 B

13 Bayprin latex 185,631.61 398,616,364.46 97.88 B

14 Soapstone powder 1,066,435.00 399,682,799.46 98.14 B

15 Carton 42kg 28,888.86 399,711,688.32 98.15 B

16 Oleic acid 1,051,935.78 400,763,624.10 98.41 B

17 AHB 406,941.30 401,170,565.40 98.51 B

18 LPG 433,214.69 401,603,780.09 98.61 B

19 ZBEC 50400.00 401,654,180.09 98.62 B20 Microsol Black 772,884.79 402,427,064.88 98.81 B

21 Carton 15kg 28,661.26 402,455,726.14 98.82 B

22 Microcrystal wax 11,757.73 402,467,483.87 98.82 B

23 Sulphur Powder 289,790.52 402,757,274.39 98.89 B

24 Tammolnox 248,375.92 403,005,650.31 98.96 B

25 Filter bag 30M 139,069.46 403,144,719.77 98.99 B

26 Microsol violet 302,377.32 403,447,097.09 99.06 C

27 Hydrated alumina 49,058.99 403,496,156.08 99.08 C

28 Polybag 30kg 440,957.33 403,937,113.41 99.18 C

29 Flex hose 1/8 204,779.19 404,141,892.60 99.23 C

30 Packing strap 12MM 173,631.12 404,315,523.72 99.28 C

31 Adhesive tape 136,312.84 404,451,836.56 99.31 C

32 Common salt 114,110.00 404,565,946.56 99.34 C

33 Silicon E22 188,013.64 404,753,960.20 99.38 C

34 Ammoniumhydroxide 49,856.17 404,803,816.37 99.39 C

35 Casein 234.36 404,804,050.73 99.40 C

36 Microsol blue 84,466.54 404,888,517.27 99.41 C

37 Polybag 42kg 8,486.72 404,897,003.99 99.42 C

38 Dimethylamine 140,623.80 405,037,627.79 99.45 C

39 Paper spool 95,718.10 405,133,345.89 99.48 C

40 Flex hose 3/8 37,847.73 405,171,193.62 99.48 C41 Carton spool 7ply 55,724.16 405,226,917.78 99.50 C

42 Round pad (big) 47,466.06 405,274,383.84 99.51 C

43 Carton (reel packing) 17,607.30 405,291,991.14 99.52 C

44 Bentonite powder 37,319.06 405,329,310.20 99.53 C

45 Polybag 15kg 6,338.44 405,335,648.64 99.53 C

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46 SiliconE22 11,544.70 405,347,193.34 99.53 C

47 Darvan No.7 29,159.68 405,376,353.02 99.54 C

48 PEG 2000 14410.02 405,390,763.04 99.54 C

49 Plastic cap 12,500.00 405,403,263.04 99.54 C

50 Filter cloth 17,298.50 405,420,561.54 99.55 C

51 Round pad (small) 3,848.00 405,424,409.54 99.55 C52 Plastic bush 7,950.00 405,432,359.54 99.55

3

C

53 Sticker begin 9,143.40 405,441,502.94 99.55

4

C

54 Triethanolamine 3300.07 405,444,803.01 99.55

5

C

55 Sticker end 5,467.14 405,450,270.15 99.55

7

C

56 Stearic acid 2,922.20 405,453,192.35 99.55

8

C

57 Polybag spool 10,566.58 405,463,758.93 99.56 C

58 Caustic soda flakes 21,000.00 405,484,758.93 99.56

5

C

59 Preventol 595.26 405,485,354.19 99.56

5

C

60 PEG 4000 798.75 405,486,152.94 99.56

6

C

61 Latex treatment agent 4,014.00 405,490,166.94 99.56

7

C

62 CMC 1238.60 405,491,405.54 99.56

7

C

63 Boiler plus 182,919.00 405,674,324.54 99.61 C

64 Cotton mask 45,299.80 405,719,624.34 99.62 C

65 Emery sheet 2,801.92 405,722,426.26 99.62 C

66 Glass beads 23,595.00 405,746,021.26 99.63 C

67 Chemo gloves 126,949.68 405,872,970.94 99.66 C

68 Shellac 1,270.65 405,874,241.59 99.67 C

69 Hydrated lime 527,133.60 406,401,375.19 99.79 C

70 Hose clip 10,798.08 406,412,173.27 99.79

3

C

71 Scissors 5,570.22 406,417,743.49 99.79

4

C

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72 Forklift spares 502,229.36 406,919,972.85 99.92 C

73 Thermocol 136,798.89 407,056,771.74 99.95

1

C

74 Tape dispencer 12,852.00 407,069,623.74 99.95

5

C

75 Aluminuim sheet 116,333.24 407,185,956.98 99.98

3

C

76 Insulation tape 2,104.96 407,188,061.94 99.98

4

C

77 Industrial hooter 3,667.41 407,191,729.35 99.98

5

C

78 Cyclo hexane 13,712.25 407,205,441.60 99.98

7

C

79 Acetone 24,296.75 407,229,738.35 99.99

3

C

80 Ammonium sulphate 823.68 407,230,562.03 99.99

4

C

81 D.M.Water 21,497.80 407,252,059.83 99.99

9

C

82 P.H.Paper 575.52 407,252,635.35 99.99

9

C

83 Ethanol 1,747.20 407,254,382.55 100.0

0

C

84 TMT 0.00 407,254,382.55 100.0

0

C

85 Hcl 0.00 407,254,382.55 100.0

0

C

86 Polybag 35kg 0.00 407,254,382.55 100.0

0

C

87 Carton 35kg 0.00 407,254,382.55 100.0

0

C

88 Master carton 1*6 0.00 407,254,382.55 100.0

0

C

89 Formaldehyde 0.00 407,254,382.55 100.0

0

C

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90 DAHP 0.00 407,254,382.55 100.0

0

C

.

ABC analysis Table

4.1(a)

Class No. of items % of total value of items

A 6 94.59

B 19 4.4

C 65 1.01

Total 90 100.00

Source: Secondary

Pie Chart

No. of items

A, 6

B, 19

C, 65

A

B

C

Interpretation

1) Six items belong to A category and account for 94.59% of the

consumption value.

2) Nineteen items belong to B category and account for 4.4% of the

consumption value.

3) Sixty five items belong to C category and account for 1.01% of the

consumption value.

FSN Analysis

FSN ANALYSIS OF THE VARIOUS MATERIALS TAKEN

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No PARTICULARS CONSIDERED CATEGORY

ELECTRICAL SPARES

1 H.R.C Fuse 10A N.S. Type F

2 H.R.C. Fuse 32A N.S. Type F

3 H.R.C. Fuse 16A N.S. Type S

4 H.R.C. Fuse 125A N.S. Type N

5 H.B. Fuse 63A F

6 Bakelite Fuse Carrier 63A F

7 Bottle Type Fuse 35A N

8 Relay BCH 3.8-6A N

9 Isolator Switch FN 125 S

10 Relay 6-9.3A BCH S

11 MNX 18 3 Pole Contactor F

12 Contactor 25A GE S

13 Contactor 3TR 35000A 40A N14 MCB 25A 3 Pole F

15 MCB 32A 3 Pole F

16 MCB 63A 4 Pole F

17 MCB 25A 4 Pole S

18 MCB Single pole F

19 MCCB 80A 3Pole S

20 Contactor MNX9 3Pole N

Instrumentation Spares

21 Nozzle 1.8MM F

22 Nozzle 1.45MM F

23 Solenoid coil 230V VAC N24 P.D. Controller S

25 RTD Pt-100 BSP S

26 Electrode Cap S

27 Thermo couple S

28 Temperature Controller PRIMA ISP N

29 Temperature Controller PRIMA 121 S

30 Ignition Electrode 125*8MM N

BEARINGS

31 Bearing 1206 EKTN 9 F

32 Bearing ETN9 S

33 Bearing 2212 F

34 Bearing 6009 F

35 Bearing 6200 S

36 Bearing 6203-2Z F

37 Bearing 6204 F

38 Bearing 6208 F

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39 Bearing 6303 F

40 Bearing 6304 2Z S

41 Bearing 6305 2Z F

42 Bearing 6306 2Z F

43 Bearing 6307 S

44 Bearing 6308 S45 NA 6904 N

46 Bearing 32207 N

47 Bearing 6207 S

48 UC 205 F

49 Bearing 30204 N

50 Bearing 6212 F

GENERAL SPARES

51 Ceramic Guide Y Type F

52 Hose Clip S.S F

53 Hose Clip S.S F

54 Hose Clip 1 S.S F55 Hose Clip 1 1/2 S.S F

56 Hose Clip 2 1/2 S.S F

57 Hose Clip 5 S.S S

58 Love Joy Coupling R110 S

59 Mencrelli Clamp 2 S

60 Mencrelli Washer 2 F

61 NRU Gasket F

62 Scissors F

63 Spider 95 F

64 Spider 100 F

65 Spider 110 F

66 Spring Spooling S

67 Tape Dispencer F

68 V-Belt 27.5 S

69 Round Belt F

70 Diaphram Saunders Valve 100MM S

STORE SPARES

71 Cam Shaft Without Pinion N

72 Friction Ring With Shaft N

73 Seal 31.5*52*7 S

74 Seal 45*72*8 S75 Adjusting Ring No. 70214 N

76 Buffer 54675002 S

77 O Ring F

78 Round Nut 11522 N

79 Washer No. 8511 S

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80 Rubber Ring F

81 Screw 69098 F

82 Oil seal 7347 S

83 O Ring Bowl Disc F

84 Bearing 7310 F

85 Elasto Plate SCONSUMABLES

86 A.P. Grease F

87 Boiler Plus F

88 Bottle Cleaning Brush F

89 Capillary Brush F

90 Emery Sheet F

91 Glass Beads F

92 Gloves F

93 Plunger Packing F

94 Hacksaw Blade F

95 M Seal F96 Stator Delisco Pump S

97 Scotch Brite F

98 Solvent Cement F

99 Shellac F

10

0

S.S Welding Rod 3.15MM F

10

1

S.S Welding Rod 2.55MM F

10

2

Teflon Tape F

10

3

Welding Rod C.I S

10

4

Wing Nut F

10

5

Oil RR 407 F

10

6

Pennar ELF 229 F

10

7

Gear Oil 90 F

10

8

Therminol F

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10

9

Washer Chem-1102 S

11

0

Common Salt F

111

LPG F

11

2

PVC Hose 1/8 F

PACKING

11

3

Adhesive Tape F

11

4

Sticker Begin F

11

5

Carton 15kg F

11

6

Carton 30kg F

11

7

Sticker End F

11

8

Chromo Art Label F

11

9

Paper Spool F

12

0

Polybag Spool F

12

1

Polybag 30kg F

12

2

Polybag 42kg S

12

3

Round pad big F

12

4

Stretch Wrap Film S

12

5

Plastic Cap F

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F- Fast, S- Slow, N- Non Moving items

FSN Analysis Table No. 4.2(a)

No. of items Category

76 F35 S

14 N125 Total

Source: Secondary

Pie Chart

No. of items

F

S

N

F

S

N

Interpretation

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1) Seventy six items which move consecutively over months has been

categorized as fast moving.

2) Thirty five items whose movement lies between 200 and 1000 days

has been categorized as slow moving.

3) Fourteen items whose movement is above 1000days are categorized

as non-moving.

VED Analysis

VED ANALYSIS OF MATERIALS CONSIDERED

No PARTICULARS CATEGORY

1 NRV Gasket V2 Plunger Packing V

3 Stator Telesco Pump V

4 Diaphram for Diaphram Pump V

5 Hose Clip 1 D

6 Bearing 6201 V

7 Bearing 6202 D

8 Bearing 6206 V

9 Bearing 3309 E

10 UC 205 D

11 Bearing 6005 E

12 Bearing 4216 ATN9 D13 Oil Seal 123510 V

14 V Belt B124 V

15 V Belt XPZ 710 V

16 V Belt 420 DL V

17 PVC Hose 1/8 V

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18 PVC Hose 3/8 V

19 Nozzle 1.68MM V

20 Nozzle 2.2MM V

21 Nozzle 2MM V

22 Filter Bag 30M V

23 Filter Cloth V24 Relay MNX R3 3-5 E

25 HRC Fuse 25A E

26 Isolated Switch SP02 E

27 D.M. Water E

28 Diesel V

29 LPG V

30 Furnace Oil V

31 Photocell V

32 Plug & Socket V

33 Burner V

34 Electrode Cap D35 Nozzle 7GPH V

36 Nozzle 7 V

37 Nozzle 9 V

38 Nozzle 12 V

39 Ignition Electrode 125/100 V

40 Fuel Pump V

41 Chain Duplex V

42 Common Salt D

43 End Grip Assembly D

44 Plunger Assembly D

45 Tappered Wall Seat V

46 PID Controller V

47 Spider 95 E

48 Spider 100 E

49 Spider 110 E

50 Bearing 3307 ATN9 V

51 Glass bead V

52 Timer Selectron 240V E

53 RTD Sensor E

V-Vital, E-Essential, D-Desirable

.VED Analysis Table 4.3(a)

No. of items Category

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34 V

11 E

8 D

53 Total

Source: Secondary

Pie Chart

No. of items

V

E

D

V

E

D

Interpretation

1) Thirty four items are classified as vital items based on cruciality without

which production will stop.

2) Eleven items are classified as essential whose absence cannot be tolerated for

more than a few hours or a day.

3) Eight items are classified as desirable whose absence even for a week or so

will not lead to stoppage of production.

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CHAPTER 5

FINDINGS ANDSUGGESTIONS &

CONCLUSIONS

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CHAPTER 5

FINDINGS

It is found that in Rubfila, the 3 analysis considered has been practiced for Inventory

Control and the level of inventory control is satisfactory.

ABC Analysis

1) Six items belong to A category, nineteen items to B category and sixty

five items belong to C category.

2) Since A category contributes to 94.59% of the total consumption, efficientcontrol of these 6 items can help reduce wastage and increase production

3) Adequate attention can be paid to important items.

FSN Analysis

76 items belong to the fast moving category, 35 items belong to slow moving

and 14 items belong to non-moving category.

VED Analysis

1) Out of the 53 items taken, 34 belong to vitals, 11 belong to essentials and

8 belong to the desirable categories.

2) Maximum control is exercised on vital elements, medium control on

essential items and minimum control on desirable items

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SUGGESTIONS

The suggestions are as follows :

1) As per ABC Analysis, a greater or strict control should be exercised over

category A materials, moderate control should be exercised over category B

materials and relatively lesser degree of control over category C materials.

2) Since A category contribute to 94.59% of the total consumption, efficient

control of these 6 items can help reduce wastage and increase production

3) In FSN Analysis, items which have been identified as slow moving should

be speedily disposed off. The speed of movement should be increased.

4) In case of the 14 non-moving items, capital is locked up and cost of carrying

has to be incurred. The management should take effective steps to dispose of

the non-moving items.

5) In VED Analysis, company should undertake proper maintenance of

machinery, inspection of material and avoid pilferage in order to reduce

abnormal wastage and achieve cost reduction

6) For those items which belong to A category and which are fast moving andare vital extra attention should be given and should be properly controlled.

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CONCLUSION

The study concludes that The Inventory Control in Rubfila International

Limited is maintained at a satisfactory level. Rubfila International Ltd

can improve its Inventory Control System by implementing the various

analysis like ABC analysis, FSN analysis and VED analysis. The

company should undertake proper maintenance of machinery, inspection

of material and avoid pilferage in order to reduce abnormal wastage and

achieve cost reduction.

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BIBLIOGRAPHY

BOOKS

1. KOTHARI C.R., Research Methodology, New Delhi, Wishwa Prakashan,

2002. pg. 406 421

2. PANDEY.I.M, Financial Management, New Delhi, Vikas Publishing House

Pvt Ltd, 2005,pg 624-635

3. JAIN.S.P. AND NARANG.K.L. , Cost Accounting, Himalaya Publishing

House, 1995,pg 111-115, 170-172, 191-209

4. LALL NIGAM.B.M. and JAIN.I.C., Cost Accounting, Principles and

Practice, New Delhi, Prentice-Hall of India Private Ltd,2005, pg 107-112.

MAGAZINES

1. A.K.SINHA Future Prospects of Rubber Industry, June-December 1999

OTHER SOURCES

1. www.google.com

2. www.wikipedia.com

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ANNEXURES

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ANNEXURE 1

MATERIALS TAKEN FOR ABC ANALYSIS AND THEIR ANNUAL

CONSUMPTION

No Particulars Annual consumption

1 Latex 332,619,009.64

RAW MATERIAL CHEM

2 Acetic acid 12,047,576.70

3 Zinc oxide 4,619,715.84

4 Ralox 5,106,245.55

5 ZMBT 3,667,675.47

6 Titanium di oxide 3,834,716.52

7 Spray dried powder 1,698,668.73

8 ZDBC 1,060,117.76

9 Caustic potash flakes 1,915,232.33

10 Bayprin latex 185,631.61

11 Soapstone powder 1,066,435.00

12 Oleic acid 1,051,935.78

13 AHB 406,941.30

14 ZBEC 504.00

15 Microsol black 772,884.79

16 Microcrystalline wax 11,757.73

17 Sulphur powder 289,790.52

18 Tammolnox 248,375.92

19 Microsol violet 302,377.3220 Hydrated alumina 49,058.99

21 Common salt 114,110.00

22 Silicon E22 188,013.64

23 Ammonium hydroxide 49,856.17

24 Casein 234.36

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25 Microsol blue 84,466.54

26 Dimethylamine 140,623.80

27 Hcl 0.00

28 Bentonite powder 37,319.06

29 Silicon E22 11,544.70

30 Darwan No.7 29,159.6831 PEG 2000 14410.02

32 DAHP 0.00

33 Triethanolamine 3300.07

34 TMT 0.00

35 Stearic acid 2,922.2

36 Caustic soda flakes 21,000.00

37 Preventol 595.26

38 PEG 4000 798.75

39 Latex treatment plant 4014.00

40 CMC 1238.60

41 Formaldehyde 0.00FUELS

42 Diesel 1,023,718.60

43 Furnace oil 25,597,826.11

44 LPG 433,214.69

PACKING MATERIAL

45 Carton 30kg/ inc plain 5,240,229.60

46 Carton 42kg 28,888.86

47 Carton 15kg 28,661.26

48 Poly bag 30kg 440,957.33

49 Packing strap 12mm 173,631.12

50 Adhesive tape 136,312.84

51 Poly bag 42kg 8,486.72

52 Paper spool 95,718.10

53 Carton spool 7ply 55,724.16

54 Round pad (big) 47,466.06

55 Carton (Reel packing) 17,607.30

56 Poly bag 15kg 6,338.44

57 Plastic cap 12,500.00

58 Round pad (small) 3,848.00

59 Plastic bush 7,950.00

60 Sticker begin 9,143.4061 Sticker end 5,467.14

62 Polybag spool 10,566.58

63 Carton 35kg 0.00

64 Master carton 1*6 0.00

65 Poly bag 35kg 0.00

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CONSUMABLES

66 Filter bag 30M 139,069.46

67 Fllex hose 1/8 204,779.19

68 Flex hose 3/8 37,847.73

69 Filter cloth 17,298.50

70 Boiler plus 182,919.0071 Cotton mask 45,299.80

72 Emery sheet 2,801.92

73 Glass beads 23,595.00

74 Chemo gloves 126,949.68

75 Shellac 1,270.65

76 Hydrated lime 527,133.60

Maintenance Mechanical

77 Hose clip 10,798.08

78 Scissors 5,570.22

79 Forklift spares 502,229.36

80 Thermocol 136,798.8981 Tape Dispencer 12,852.00

82 Aluminium Sheet 116,333.24

MAINTENANCE -ELEC

83 Insulation Tape 2104.96

84 Industrial Hooter 3,667.41

LAB CHEMICALS

85 Cyclo hexane 13,712.25

86 Acetone 24,296.75

87 Ammonium Sulphate 823.68

88 D.M.Water 21,497.80

89 P.H.Paper 575.52

90 Ethanol 1,747.20

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ANNEXURE 2

Materials used for FSN Analysis

No PARTICULARS CONSIDEREDELECTRICAL SPARES

1 H.R.C Fuse 10A N.S. Type

2 H.R.C. Fuse 32A N.S. Type



5 H.B. Fuse 63A

6 Bakelite Fuse Carrier 63A

7 Bottle Type Fuse 35A

8 Relay BCH 3.8-6A

9 Isolator Switch FN 125

10 Relay 6-9.3A BCH11 MNX 18 3 Pole Contactor

12 Contactor 25A GE

13 Contactor 3TR 35000A 40A

14 MCB 25A 3 Pole

15 MCB 32A 3 Pole

16 MCB 63A 4 Pole

17 MCB 25A 4 Pole

18 MCB Single pole

19 MCCB 80A 3Pole

20 Contactor MNX9 3Pole

Instrumentation Spares

21 Nozzle 1.8MM

22 Nozzle 1.45MM

23 Solenoid coil 230V VAC

24 P.D. Controller

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25 RTD Pt-100 BSP

26 Electrode Cap

27 Thermo couple

28 Temperature Controller PRIMA ISP

29 Temperature Controller PRIMA 121

30 Ignition Electrode 125*8MMBEARINGS

31 Bearing 1206 EKTN 9

32 Bearing ETN9

33 Bearing 2212

34 Bearing 6009

35 Bearing 6200

36 Bearing 6203-2Z

37 Bearing 6204

38 Bearing 6208

39 Bearing 6303

40 Bearing 6304 2Z41 Bearing 6305 2Z

42 Bearing 6306 2Z

43 Bearing 6307

44 Bearing 6308

45 NA 6904

46 Bearing 32207

47 Bearing 6207

48 UC 205

49 Bearing 30204

50 Bearing 6212

GENERAL SPARES

51 Ceramic Guide Y Type

52 Hose Clip S.S

53 Hose Clip S.S

54 Hose Clip 1 S.S

55 Hose Clip 1 1/2 S.S

56 Hose Clip 2 1/2 S.S

57 Hose Clip 5 S.S

58 Love Joy Coupling R110

59 Mencrelli Clamp 2

60 Mencrelli Washer 261 NRU Gasket

62 Scissors

63 Spider 95

64 Spider 100

65 Spider 110

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66 Spring Spooling

67 Tape Dispencer

68 V-Belt 27.5

69 Round Belt

70 Diaphram Saunders Valve 100MM

STORE SPARES71 Cam Shaft Without Pinion

72 Friction Ring With Shaft

73 Seal 31.5*52*7

74 Seal 45*72*8

75 Adjusting Ring No. 70214

76 Buffer 54675002

77 O Ring

78 Round Nut 11522

79 Washer No. 8511

80 Rubber Ring

81 Screw 6909882 Oil seal 7347

83 O Ring Bowl Disc

84 Bearing 7310

85 Elasto Plate

CONSUMABLES

86 A.P. Grease

87 Boiler Plus

88 Bottle Cleaning Brush

89 Capillary Brush

90 Emery Sheet

91 Glass Beads

92 Gloves

93 Plunger Packing

94 Hacksaw Blade

95 M Seal

96 Stator Delisco Pump

97 Scotch Brite

98 Solvent Cement

99 Shellac

10

0

S.S Welding Rod 3.15MM

10

1

S.S Welding Rod 2.55MM

10

2

Teflon Tape

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10

3

Welding Rod C.I

10

4

Wing Nut

105

Oil RR 407

10

6

Pennar ELF 229

10

7

Gear Oil 90

10

8

Therminol

10

9

Washer Chem-1102

11

0

Common Salt

11

1

LPG

11

2

PVC Hose 1/8

PACKING

11

3

Adhesive Tape

11

4

Sticker Begin

11

5

Carton 15kg

11

6

Carton 30kg

11

7

Sticker End

11

8

Chromo Art Label

11

9

Paper Spool

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12

0

Polybag Spool

12

1

Polybag 30kg

122

Polybag 42kg

12

3

Round pad big

12

4

Stretch Wrap Film

12

5

Plastic Cap

ANNEXURE 3

Materials used for VED Analysis

No PARTICULARS

1 NRV Gasket

2 Plunger Packing

3 Stator Telesco Pump

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4 Diaphram for Diaphram Pump

5 Hose Clip 1

6 Bearing 6201

7 Bearing 6202

8 Bearing 6206

9 Bearing 330910 UC 205

11 Bearing 6005

12 Bearing 4216 ATN9

13 Oil Seal 123510

14 V Belt B124

15 V Belt XPZ 710

16 V Belt 420 DL

17 PVC Hose 1/8

18 PVC Hose 3/8

19 Nozzle 1.68MM

20 Nozzle 2.2MM21 Nozzle 2MM

22 Filter Bag 30M

23 Filter Cloth

24 Relay MNX R3 3-5

25 HRC Fuse 25A

26 Isolated Switch SP02

27 D.M. Water

28 Diesel

29 LPG

30 Furnace Oil

31 Photocell

32 Plug & Socket

33 Burner

34 Electrode Cap

35 Nozzle 7GPH

36 Nozzle 7

37 Nozzle 9

38 Nozzle 12

39 Ignition Electrode 125/100

40 Fuel Pump

41 Chain Duplex 42 Common Salt

43 End Grip Assembly

44 Plunger Assembly

45 Tappered Wall Seat

46 PID Controller

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47 Spider 95

48 Spider 100

49 Spider 110

50 Bearing 3307 ATN9

51 Glass bead

52 Timer Selectron 240V53 RTD Sensor

mini proj final

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