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Slide 1: 

Submitted to Submitted by Prof. Niranjan Shastri Jay Gupta Rahul Goyal Rakesh Kumar Comparative Study between Tata Motors and Maruti for Managing the Inventory

Contents : 

Contents Short intro of companies What is inventory and classification What is inventory management Tools for manage inventory Tools use by companies

Tata Motors : 

Tata Motors Tata Motors is the Part of the Tata Group, Established in 1945 Formerly it was known as “TELCO” It is India's largest company in the automobile and commercial vehicle sector  Company has 70% market share in the domestic commercial vehicle segment. Company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer.

Maruti Suzuki : 

Maruti Suzuki Founded in 1981 as a Maruti udyog limited. Maruti-Suzuki India limited is a joint venture between Maruti Udyog limited and Suzuki Motor Corporation of Japan. It is the largest Automobile Manufacturer in South Asia. Maruti Suzuki is India's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned.

MEANING OF INVENTORY : 

MEANING OF INVENTORY “…Those stocks or items used to support production,…supporting activities,…and customer service…” In accounting language it may include: RAW MATERIAL: They are required to carry out production activities uninterruptedly. WORK-IN- PROGRESS: It is a stage of stocks between raw material & finished goods. CONSUMABLES: These are needed to smoothen the process of production. FINISHED GOODS: These are the goods which are ready for the consumers. SPARES: Form a part of inventory

NEEDS OF INVENTORY MANAGEMENTMANAGEMENT : 

NEEDS OF INVENTORY MANAGEMENTMANAGEMENT To ensure continuous supply of raw material, spares and finished goods. To avoid overstocking and under stocking To maintain investments To minimize losses (wastages & damages)

Slide 7: 

Inventory is a CUSHION between DEMAND & SUPPLY If DEMAND = SUPPLY, Need NO NVENTORY

TECHNIQUES OF INVENTORY MANAGEMENT : 

TECHNIQUES OF INVENTORY MANAGEMENT DETERMINATION OF STOCK LEVEL:- (a) MINIMUM LEVEL=REORDERING LEVEL- (NORMAL CONSUMPTION * NORMAL REORDERING PERIOD) (b) MAXIMUM LEVEL=REORDERING LEVEL+ REORDERING QUANTITY –(MINIMUM CONSUMPTION * MINIMUM REORDERING PERIOD ) (C) DANGER LEVEL=CONSUMPTION *MAXIMUM REORDER PRIOD

Contd… : 

Contd… DETERMINATION SAFETY STOCKS:- Safety stock is a buffer to meet some unanticipated increase in usage. ECONOMIC ORDER QUANTITY:- Economic order quantity is the size of the lot to be purchased which is economically viable. EOQ IS MADE UP OF TWO PART Ordering cost Carrying cost

Contd… : 

Contd… A-B-C ANALYSIS: CATEGORY-A: Under this almost 10% of the items contribute to 70% of value of consumption. CATEGORY-B: Under this category 20% of the items contribute about 20% of value of consumption. CATEGORY-C: Under this category about 70% of items of material contribute only 10% of value of consumption.

Contd… : 

Contd… VED ANALYSIS:- V – Items of vital importance, E – Items of essential importance, D – Items of desirable importance. Vital - Indicating that M/c can’t run without ‘V’ Item. Essential - M/c can run but without parameters as such efficiency, noise reduction etc. Desirable- M/c can run but factor of safety, industrial formalities can’t be satisfied (e.g. - wearing ear protection aid)

Contd… : 

Contd… FIFO:- First in, first out LIFO:- Last in, first out HML(High, medium, low) SDE(Scarce, Difficult and Easy to obtain) G.O.L.F (Govt. Open Market, Local and Foreign Source) F.S.N (Fast moving, slow moving, non moving)

Slide 13: 

S.O.S (Seasonal Off-Seasonal) Just in time VMI (vendor managed inventory) Lean manufacturing Inventory turn over ratio Inventory holding ratio  Kanban System (Kanban is the Japanese word for “card”, “ticket”, or “sign” and is a tool for managing the flow and production of materials in a production system

Tools use by companies : 

Tools use by companies Tata Motors Maruti Suzuki Just in time A-B-C ANALYSIS: SAP ERP Inventory turn over ratio Lean manufacturing Economic order quantity VED ANALYSIS F.S.N (fast moving, slow moving, non moving) DETERMINATION OF STOCK LEVEL VMI SAP ERP Economic order quantity G.O.L.F (Govt. open market, local and Foreign Source) VED ANALYSIS F.S.N (fast moving, slow moving, non moving) DETERMINATION OF STOCK LEVEL