DEEPU PTR

MADE BY: DALEEP KUMAR : 

MADE BY: DALEEP KUMAR SUMMER INTERNSHIP TRAINING REPORT

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DR. REDDY’S LABORATORIES LTD. BADDI DISTT. SOLAN (HP)

INTRODUCTION TO DR. REDDY’S LABORATORIES LTD. : 

INTRODUCTION TO DR. REDDY’S LABORATORIES LTD. Dr. Reddy's Laboratories Ltd., trading as Dr. Reddy's, founded by Dr. K. Anji Reddy. as a Private Limited Company on February 24, 1984 It has become India's second biggest pharmaceutical company. Later it was converted to a Public Limited Company on December 6,1985 and listed on the Indian Stock Exchanges in August 1986 Dr. Reddy‘s Headquarter is in Hyderabad.

INTRODUCTION (CONTD.) : 

INTRODUCTION (CONTD.) The Company's principal areas of operation are pharmaceutical services and active ingredients. The Company's principal research and development facilities are located in Andhra Pradesh, The basic research program of Dr. Reddy's focuses on cancer, diabetes, bacterial infections and pain management.

COMPANY PROFILE : 

COMPANY PROFILE Company Dr Reddy's Laboratories Ltd.Type Public Industry Pharmaceuticals Founded 1984 Headquarters Hyderabad Key people Anji Reddy, Chairman GV Prasad, CEO Website http://www.drreddys.com/

COMPANY MISSION : 

COMPANY MISSION Dr. Reddy’s Laboratories is an emerging global pharmaceutical company. As a fully integrated pharmaceutical company, the purpose of the company is to provide affordable and innovative medicines through its core businesses.

ABOUT BADDI PLANT : 

ABOUT BADDI PLANT Baddi plant is a huge manufacturing unit. Dr. Reddy’s Laboratories Ltd. Is located at Village khol, Nalagarh Road, Baddi -173205, Distt. Solan (H.P) The plant at present employs a work force varying from 1500 to 2000 out of which approximately 1100 are permanent.. The plant runs 365 days a years in 3 shifts daily which work from 6.00 a.m. to 2.00 p.m., 2.00 p.m. to 10.00 p.m. & 10.00 p.m. to 6.00a.m..

PROJECT OBJECTIVE : 

PROJECT OBJECTIVE To know how a company apply the controlling technique on the inventory. How the recategorisation of the inventory is done through the ABC analysis. How the purchase orders have an impact on inventory and simplifies the complexity. How a company actually get the benefit of controlling technique. To study the trends in size of inventory for last four years.

INVENTORY : 

INVENTORY Dictionary meaning of Inventory is ‘a list of goods’ A stock of items held to meet future demand

TYPES OF INVENTORY : 

TYPES OF INVENTORY Raw materials- include all raw materials, components used in the manufacture of a product. Spares- These may include materials required for maintenance. Work-in-progress- These are items under stages of production not yet converted as finished goods. Finished goods- These are the goods that are not yet sold or put into use.

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Work in process Work in process Work in process Finished goods Raw Materials Customer Vendors

INVENTORY COSTS : 

INVENTORY COSTS Carrying cost: Cost of holding an item in inventory Ordering cost: Cost of replenishing inventory Shortage cost: Temporary or permanent loss of sales when demand cannot be met.

INVENTORY MANAGEMENT : 

INVENTORY MANAGEMENT It involves the development and administration of policies ,systems and procedures which will minimize total costs relative to inventory decisions and related functions such as customer service requirements, production scheduling and purchasing.

REASONS TO HOLD INVENTORY : 

REASONS TO HOLD INVENTORY Meet variations in customer demand: Meet unexpected demand Smooth seasonal or cyclical demand Pricing related: Temporary price discounts Hedge against price increases Take advantage of quantity discounts Process & supply surprises Internal – upsets in parts of or our own processes External – delays in incoming goods

INVENTORY MANAGEMENT TECHNIQUES : 

INVENTORY MANAGEMENT TECHNIQUES ABC Classification Economic Order Quantity (EOQ) FSN Classification

ABC Analysis : 

ABC Analysis selective approach Always (A) Better (B) Control (C) always the best, then better and lastly the good. Smaller % of items may represent large% of consumption value& large % may represent smaller % of consumption value.

ABC ANALYSIS (CONTD.) : 

ABC ANALYSIS (CONTD.) It has been observed that in an industrial unit only 10% of items have 70% of the annual inventory consumption, 20% of the items have 20% of annual inventory consumption, and 70% of the items have only 10% of the annual inventory consumption. Since 70% of the annual consumption of inventory is covered by only 10% of the items in the inventory, these items deserve highest attention and are classified as ‘A’ items. Similarly 20% of the items covering 20 % of the inventory investment are B class items Balance 70% of the inventory items are termed as C class items

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ABC Analysis Example

Economic Order Quantity : 

Economic Order Quantity The quantity to be ordered should be such which minimize the carrying and ordering cost. The same time it should not be too large to incur heavy a payment . The order for the material to be purchased should be large enough to earn more trade discount and to take advantage of bulk transport

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Economic Order Quantity (EOQ) = √ 2AO/C Where, A = Annual Consumption Quantity O = Cost of placing one order (ordering cost) C = Annual inventory carrying cost or holding

EOQ MODEL : 

EOQ MODEL

FSN Classification : 

FSN Classification movement of items in the storehouse where the items are classified as fast moving (F),slow moving(S) non-moving(N)items . Fast moving:-Items being issued more than 15 times a year Slow moving:-Items up to a certain limit say 10-15 issues in a year Non-moving:-If there is no issues of a particular item during the past few years

RESEARCH METHODOLOGY : 

RESEARCH METHODOLOGY RESEARCH DESIGN: I have adopted exploratory research design for my project Research methodology is a careful investigation or inquiry in a systematic manner and finding solution to the problem in a research. It includes of defining and redefining problems formulating hypothesis or researching conclusions to determine whether they fit the formulating hypothesis.

DATA COLLECTION METHOD : 

DATA COLLECTION METHOD Primary Data:Direct personal interviewsSecondary Data:BooksInternetSample Plan:The universe of the study was Dr. Reddy’s Laboratories Ltd. Baddi. Duration: Total duration of the project was 45 days.

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DATA ANALYSIS AND INTERPRETATION

TABLE: 1 inventories : 

TABLE: 1 inventories As on March31

INTERPRETATION : 

INTERPRETATION During the year ended March 31 2007 and 2008 the company recorded an inventory write down of 650868 resulting from decline in market value of certain finished goods and write down of certain raw materials.

TABLE :2 inventories : 

TABLE :2 inventories As on March 31(in Rs. millions)

INTERPRETATION : 

INTERPRETATION It is clear from the above table that during the year ended March 31 2010 the company recorded an inventory write up of Rs.1623 millions resulting from increase in market value of certain finished goods and write up of certain raw materials.

INVENTORY CLASSIFICATION : 

INVENTORY CLASSIFICATION

Proposed criteria: According to No. of Items : 

Proposed criteria: According to No. of Items

According to Consumption Value : 

According to Consumption Value

Existing criteria: According to No. of items : 

Existing criteria: According to No. of items

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According to Consumption Value

COMPARISON : 

COMPARISON Comparison of items Comparison of consumption value

FINDINGS : 

FINDINGS Many items are there in the stores, which lying in general stores but don’t have any category in spite of having consumption value. Some modern techniques like JIT, VED etc., which can help in reducing investment in inventory, is absent.

CONCLUSION : 

CONCLUSION From the thorough assessment of my study on “INVENTORY MANAGEMENT” I Concluded that Controlling techniques relating to the general inventory in DRL Ltd. are developed with the objective of ensuring that the inventory will be controlled in an effective manner, without having any loss to the inventory. This study reveals that through the ABC analysis, effective control can be exercised on the inventory. I

COnCLUSION (CONTD.) : 

COnCLUSION (CONTD.) At last I would like to say that there is proper control of inventory in the organization. Inventory management is done at par. Proper accounts & records are maintained of each and every item, better techniques are applied. 5S technique is implemented fully in Dr.Reddy’s Laboratories Ltd.

SUGGESTION : 

SUGGESTION All the general store inventory items should be recategorized especially those, which have the consumption value during the year. Company should have to go for some other controlling techniques like VED, JIT etc. The items, which don’t fall under any category, should be treated separately.

LIMITATION : 

LIMITATION Dr.Reddy’s Laboratories Ltd. Baddi is a huge plant so that in 6 weeks it is not possible to study deeply. Components of inventories are huge in number and are materials wise, so, it is not again possible to study deep into each of those inventories. In some cases actual figure is not available. Calculation is confusing in some cases. Due to their own work , the concerns officers were not available at the time

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THANK YOU