ABSTRACT

This is an attempt to understands the relationships and trends to determine whether or not financial power of the industries and is personal efficiency have been sat isfactory the concept of inventory management is typically devoted to evaluate past current and prosecuted performance of the industry firm generally it is the analysis.

The study period was annual one month is the finance department of the industries. The main sources of the industries data were some industries wit h execut ives and other several any data like periodically, company magazines, annual reports. Data was mainly collected from general accounts sector of the financial departments.

Inventory Management is mainly carried out tools like ratio analysis ABC analysis and co mparat ive balance sheet working capital of the previous year i n f e r e nc e a r e m a d e o f t he s e t o o l s a nd b a s e d o n t h e s e i n f e r e nc e f i n d i n g a nd recommendation are recommended.

1.1INTRODUCTION ABOUT THE STUDY The term inventory refers to the stock pile of the products a firm offering for s a l e a nd t h e c o m p o n e nt s t ha t ma k e s u p t h e p r o d u c t . I n o t h e r w o r d s i n v e nt o r y i s c o m p o s e d o f a s s e t s t h a t w i l l b e s o l d i n f u t u r e i n t h e n o r m a l c o u r s e o f b u s i n e s s operations. The assets which turns store as inventory in anticipation of need are raw-materials, work-in-progress and finished products. The raw material inventory removed dependency between suppliers and plants. The work in progress inventory removes dependency between various machines of a product line. The finished goods inventory removes between plants and its customers or market.

Inventory, as a current asset, differs from other current assets because only financial manager are not involved. Rather, all the functional areas, finance, marketing, production and purchasing are involved. The views concerning the appropriate level of inventory would differ among the different funct ional areas .The job of the finance m a n a g e r i s t o r e c o nc i l e t he c o n f l i c t i n g v i e w p o i nt s o f t he v a r io u s f u nc t io n a l a r e a s regarding the appropriate inventory levels in order to fulfill the overall object ive of maximizing the owners wealt h. An optimum level o f inventory should be determined on the basis of the trade-off between costs and benefit s associated with the level of inventory.

Today the efficiency and state of Industrialization of a country is known by the method of inventory management because poor or mismanagement of inventory is h a r m f u l n o t o n l y t o t h e i n d u s t r y , b u t t o t h e c o u n t r y a s a w h o l e a s i t a f f e c t s t h e economic, social and political environment of the country .Inventory is stock of goods required by an organization for its successful operation. Inventory is classically defined as an idle resource of any kind having an economic value. Inventory makes a significant contribution to the operational efficiency and profitability of the enterprises, and so, it is very essential to reduce the amount of capital locked up in inventories .

MAXIMUM STOCK

Maximum stock is the stock level at which maximum quant it y of an item of m a t e r i a l c a n b e he l d i n a t a n y t i m e . S t o c k s ho u ld no t e xc e e d m a x i m u m l e v e l, i f it exceeds this level; it blocks the working capital of the business. Maximum stock can be calculated as follows-Re-ordering level + Reordering quant it y (minimum consumpt ion x minimum re-order period).

MINIMUM STOCK

Minimum stock level represents the stock level below which, inventory of any i t e m s ho u ld no t be a llo w ed t o fa ll. I f it go es be lo w t h is le ve l, it w i l l a f f e c t t h e production. This level is fixed so that production may not be stopped due to shortage of materials. Minimum level can be calculated as follows: Reordering level (normal consumption x normal reorder period).

RE-ORDER LEVEL

It is the point at which material are ordered for replenishment of stock. It is the key point and is the quant it y where replenishment of stock is done. Reorder level is fixed between minimum stock level and maximum stock level, in order to avo id time lag between the materials ordered and receipt. Reorder level = maximum consumption x maximum reorder period.

ORDERING COST

T he cat ego r y o f co st is a sso c ia t ed w it h t he a cqu is it io n o f o r o r d e r i n g o f inventory. Firms have to place orders with suppliers to replenish inventory of raw materials. The expenses involved are referred to as

ordering cost. The ordering cost includes preparing a purchasing order or requisition form and receiving inspecting and recording the goods received to ensure both quantity and quality. The cost of acquiring material consists of clerical cost and cost of stationary. It is therefore, called set-up cost. They are generally fixed per order placed, irrespective of the amount of order.

ECONOMIC ORDER QUANTITY.

The quantity of materials to be ordered at one time is known as economic order quantity (EOQ). This quantity is fixed in such a manner as to minimize the cost of ordering and carrying the stock. Economic order quantity is a tool of store control on the part of material purchased. It refers to the size which gives maximum economy in purchasing any material. This is also known as optimum ordering quantity or standard ordering quantity. EOQ is based on ordering cost and carrying cost. EOQ is the point where in a single purchase or number of unit should be manufactured in a single process, so that the total cost i.e., ordering cost or set-up cost and inventory carrying cost are the minimum level.EOQ = 2 x A X O / C Where, A = Annual usage. O = Ordering cost C = Carrying cost

1.2 INTRODUCTION ABOUT CEMENT INDUSTRY

Cement is one of the basic important and powerful raw material used in the constructions of variety of structure like dams, rocks, bridges, storage tanks, flyovers towards, multistoried building ect., it has a variety of applications like hallow bricks, precuts door and frames, pipes, asbestos, cement sheets, concerting, plastering and other per-cast and other per-cast and prestressed elements ect., it is greenish gray powder, which contains the following compounds.

MEANING AND DEFINTION OF CEMENT

The word cement denoted any kind of adhesive in building and civil engineering. It denoted substance, which can be used to bind together sand and broken stone, or other from of aggregated into a solid mass. The common reference to cement is the Portland cement, has become almost an international nomenclature.

Technically, Portland cement is a greenish Gray chemically active, impalpable power made by burning to a high temperature in a rotary in a rotary in a rotary kill in a pulverized mixture containing definite proportions of oxides of calcium silicon, aluminum and iron and grinding proportions of clinker. Tow to six percent of gypsum by weight is added with cement during grinding of clinker to control seating time.

In American heritage dictionary the term cement, is defined as a building material made by grinding calcite limestone and clay to a fine powder, which can be fixed with water and poured to set as a solid mass or used an ingredient in making mortar or concrete.

COMPONENTS OF CEMENT

1. CS tricalcium silicate 50% 2. C2 S Declaim Silicate25% 3 C3 A Tricalcium Aluminates10% 4 C4 AF Tetra calcium Alumina Farite10% 5 Gypsum2 5%

INDUSTRY PROFILE INTRODUCTION Cement industry is a core sector industry and forms the backbone of infrastructural development of the country. Cement is a essential construction material and Cement consumption has been as vital parameter. In a countrys economic growth of 7% to 8%in the last ten years. The Cement industry gives direct and indirect downstream employment.

GROWTH OF CEMENT INDUSTRY IN INDIA

The Landmark of the growth of the cement industry in this country is Chronologically listed below:

1914 Foundation of a Cement industry. First Cement plant established at porbander,Gujarat.

1936 11 Cement companies merged to form the Associated Cement Corporation Limited.

1936 1945Cement was declared as essential commodities under the defense of India Rules and the same was brought under the government control.

1951 19565 years Cement units produced 4.6 million tones of Cements.

1956Cement control order promulgated. System on fright pooling introduced for equitable distribution of Cements at a uniform price throughout the country.14

1961Cement manufacture was established

1962Chettinad cements Corporation Limited was established 1969Uniform retention price Rs 100 per tone allowed to cement producers replacing3 hire pricing.

1977Three tier pricing formula announced for low. Medium Cement producing units. Levy quotas for sick and new weight are fixed 50%

1982On the recommendation of gross committee, partial decontrol was announced on February 28, and manufacturers were allowed to sell one third of output in open market.

1989Cement Completed decontrolled on March 1.

1992-1999Cement Capacity was 70.19 million tones and production was 54.08 million tones.

1996Cement industry has registered Whooping growth 11.4% as compared to 9.9%during the same period previous year. Single tired retention price was fixed at Rs. 320/- tones per port land puzzling cement and Rs.335/- tones ordinary Portland cement. The task force report that the per capital consumption was only about hundred Kegs. By2002 and possible reach a level of 150 Kg by the year 2010, if the present GDP Growth trend resists.

1.3 COMPANY PROFILE

Chettinad Cement Corporation Ltd

Founder

Dr.Rajah Sri M.A.Muthiah Chettiars urge to contribute to the nation building cause combined with his business acumen culminated in establishment of ChettinadCement Corporation ltd in 1962 to cater to the growing demands of cements in the country.

The history of the house of chettinad is linked with the 9 decades old saga. In1912 took birth the house of chettinad thought a visionary idea - list and born entrepreneur Dr.Rajah Sri Annamalai Chettiar who believed in social transformation through business. The founder of the house of Chettinad envisaged his company his companies providing the stimulus for industrial growth and conceived business as a means of improving the living standards of people.

Establishing company:

Following the footsteps of father Dr,Rajah Sri Annamalai Chettiar. Dr.Rajah Sri M.A. Muthiah Chettiar continued to combined his business acumen to establish the company Chettinad Cement Corporation Limited in 1962 to cater to growing demand of cement in the country. The companies first manufacturing unallocated at Puliyur, Karur District. in Tamil Nadu common production in April 1968today the group is being steered under versatile. dynamic and pragmatic leadership of Dr.M.A. Ramasamy and his son Sri M.A.M.R. Muthiah based on the footsteps of Dr.Rajah Sri M.A.Muthiah Chettiar.

Apart from cement. The Chttinad house in today engaged in activities as diverse as granite. engineering. silica. Garnet information technology, plantations, shipping transportation. stevedoring. clearing and forwarding and logistics having a combined turnover of about Rs.8,500 million. From a modes beginning of 2 lack tones capacity per annum. it has gradually increased to 15 lak tones today. presently the plant employs the modern dry process technology. it has the most advanced. Sophisticated computer controlled state-the-art loaches mill for grinding raw meal. Loaches lignite16

mill for grinding raw meal. Loaches lignite mill (first of its king in India) a few stage preheated kiln & electronic packing plant. Equipped with centralized control room

for process control the advanced instrumentation and elaborate display screens give up tothe minute information on the production process so corrected.

The company, which has always been striving for total quality. Possesses international certificates an ISO 9002 and ISO 14001 and takes pride in being acclaimed as one of the major player in a highly competitive cement industry in India the company added another features to in cap by installing and commissioning a giant sophisticated. High-tech and power efficient O&K cement mill resulting in a quantum leap in production to touch one million tones mark.

The company has achieved many laurels through award for best performance in the cement industry issued by national productivity council besides it has been customers to receive national safety awards. Chettinad cements have attached great importance to social responsibility and environmental values. This is manifest in the installation of the latest pollution control equipment in the plant.

The company, new state of the art green field cement plant inKarikal Village. Din ducal district, Tamil Nadu commenced commercial production intact 2001 with a capacity of 0.9 million tones per annum. It is equipped with abbslatest knowledge based solution package right form the treatment of raw material to the packing of cement. making it one of the Indias most modern and efficient plants. With the large infrastructure projects of the governments for concretizing the National Highways and rural roads. Like the golden quadrilated and the pms grams SADAK YOJANA. In the pipeline the cement industry as well as your company looks forward to bright future and hopes to achieve more, milestones in the years to come.

COMPANY PROFILE Name of the company : Chettinad cement corporation

Ltd.Type : Public.

Founded : 1962Managing

Director : M.A.M.R.Muthiah.

Chairman : M.A.M.Ramaswamy.

Head quarters : T.Nagar.Chennai.

Production plant : Puliyur. Karikkali.

Revenue:4.5(corers)

Employees: Above 1000.

Turnover:Granite.Garnet.Engineering.Silica.

Information Technology,Plantations,Shippin,Transpiration,Stevedoring,Associated

companies Website :WWW.Chttinad.com

HISTORY OF THE CHETTINAD CEMENT CORPORATION LIMITED

Dr. Rajah Sir. M.A. Muthiah chettiar of chettinad promoted the ChettinadCement Corporation Limited. It commenced production in April 1968. The factory is located at kumarajah muthiah Nagar in the Puiliyur village of Karur taluk in Karur district, Tamil nadu and is about 10 km away from Karur. The factory compoundoccupies an area of limestone quarry of the factory is located near Palayam at thedistance of 28 km away from Karur. It is one of the best developed and mechanized mines in the country.

The dynamic and dedicated services of the promoter to the Chettinad Cement Corporation Limited as the chairman of the factory are continued till 1984. Then the elected chairman Dr.S. Narayana Swamy successfully led the company from 1985 to1990. Today the company continuous to uphold its illustration tradition under the dynamic leadership of Dr.M.A.M.R. Muthiah, the chairman and managing director.

A part from cement, the Chettinad house is engaged in activities as diverse as granite engineering, silica, garnet, information technology steel and textile trading, horse breeding, plantation, shipping, transportation, stevedoring, clearing and forwarding and logistics having a combined turnover of Rs.8,500 Million.

PRODUCTS:

Chettinad Royal Grade 53

Chettinad Grade 43Chettinad Super Grade

Sulphate Resistant Portland cement

Portland slag cement

Chettinad super steel

PRODUCTION CAPACITY:

The cement plant is designed for a normal capacity is 6 lakhs tones of cement p.a. it achieves higher capacity every year. Last year it has achieved the target of 2335605metric tones of cement. From a modest beginning of 2 lakhs tones capacity p.a.it was gradually increased production capacity to 15 lakhs tones today.

Presently, the plant employees the modern Dry process technology. It has the most advanced sophisticated, computer controlled state of the art loesche mill for grinding raw meal. Loesche lignite mill (First of its kind in India). A five stage preheated kiln and electronic packing plant.

Equipped with centralized control room for process control, the advanced instrumentation and elaborate display screens give up to the minute information on the production process. So that any deviation can be promptly corrected.

The company added another feather to its capacity by installing and commissioning a giant, sophisticated, high-technology and power efficient cement mill resulting in a quantum leap in production to touch one million tones mark. Chettinadcement has attached great importance to social responsibility and environmental values. This is manifest in the installation of the latest pollution control equipment in the plant.

PROGRESS OF NEW CEMENT PLANT:

The companys state of the Art Green field cement plant in Karikkali village,Dindigul District, Tamilnadu commenced commercial production in October 2001

with the capacity of 0.9 million tones p.a. it from the treatment of Raw material to the packing of cement, making it one of Indias most modern and efficient plant.

The companies commissioned a 15mw captive thermal power plant at its unitkarikkali in October 2004 to cater to the entire power requirement of the karikkali plantthere by reduce the power cost. The company is also in the process of installing a newcement grinding unit at karrikkalik with a capacity of 0.5 million tones.

State Bank of Patiala BANKERS Canara Bank State Bank of Mysore and Indian Bank.

PROGRESS OF READY MIX CONCRETS PLANT

The company has proposed to install a Ready Mix concrete plant (RMC) with a capacity of 30 culms per hour at Coimbatore to cater the needs of consumers in areas of southern parts of Coimbatore, Pallakad and Pollachi. The approximate cost of the cost of RMC installation would be around Rs.275 Lakhs which will be met out of the internal accruals of the company. Now it is giving profit to the company.

OPPORTUNITIES:

The fact that India being second Largest cement producer in the world and still having the lowest per capital consumption of cement itself speaks for the vast potential for growth available in this sector.

TOTAL STRENGTH:

Work men-112

Staff-56

Executive-106

Contract workers-131

Total-405

LIST OF AWARDS RECEIVED BY THE CHETTINAD CEMENTCORPORTATION LIMITEDBest1995-1996

Best (Manufacturer of Blendedcement)1998-1999Best (Manufacturer of Blendedcement)1999-2000Best (Manufacturer of Blendedcement)2000-20018.TNBM Energy conservation Award1998-19999. NCBM National Awards( improvement in Electrical energy performance) second best1989-199910. NCBM National Awards( improvement in Electrical energy performance)2000-200111.Ministry of Energy (National Energyconservation Award)2000-2001(National Energy conservation Awardfor the cement sector)200212.Tamil Nadu Government awards statesafety awards Ist and 3 rd prize1998

WELFARE FACILITIES IN THE COMPANY

STATUTORY WELFARE MEASURES: Canteen Facilities: (Ref.sec.46, Factories act 1948)The workers are provided with facility of canteen. This is functioning on co-operative basis. The company has provided utensils, furniture, electric fans, lights,water and other facilities. Modernized electrical and other equipments have also beeninstalled for the preparation of food stuff. Full meals, refreshments, coffee and tea aresupplied from the canteen to the employees. Rest rooms: ( Ref. sec. 43, Factories act 1948) Rest rooms and Lunch rooms with electric lights, fan and water taps are provided for the benefit of the working community. First aid facilities: (Ref. sec. 45, Factories Act 1948)In all departments first aid boxes are provided at various work spot for the benefit of workers. After the month they used to replace the box with new medicines. Uniform and shoes : (Ref. sec. 43, Factories Act 1948)The uniforms and shoes are given in the company are same to all in the companyit shows there is no differentiation between the employees in the organization. Gratuity: Every employee in the organization has gratuity as a retirement benefit. Insurance scheme: Every employee in the organization must have personal accident policy. It isadopting compulsory one of the Organization. Death relief fund: The employee has death relief fund in the organization to the benefit of theemployee family. NON-STATUTORY WELFARE MEASURES: Housing: Housing facilities are provided to employees for the workers who dont find place in the housing colony certain amount is paid as housing rent allowances. Recreation: Employees are also provided with temples and parks for their children inside thehousing colony. A cable T.V. Network is there for housing colony, people which showsvarious channels Education: The Chettinad Cement Corporation limited educational society running higher secondary schools where education facilities with concession as per Tamilnadueducational rules are being provided to the children of the employees. Community Centre: There is a community centre which has the facilities to conduct marriage andother such programmes. Water facilities, vessels, electricity, etc., also provided by thecompany. All the employees are eligible to get this by remitting a nominal amount asrent. Other facilities:

They are also having co-operative stores, ICICI limited, post office facilities for the employees. Vehicle stand: For the benefit of workers the management has provided a vehicle stand to park their vehicles. Hospital: The hospital which provided for the benefit of employees is common for Chettinad Cement Corporation. It contains medical treatment including supply of specialist medicines are given to the employees and to their families. E.C.G facilitiesare also provided to the employees. The expenditure costs shared by the management. Rest shed: (Ref. sec. 47, Factories Act, 1948)Rest shed and Tiffin rooms with electric light, fan and water taps are providedfor the benefit of the working community. Sanitary Flush out: (Ref. Sec. 19, Factories Act, 1948)Lavatory, wash basin and spittoon are provided inside the factory for the use of workers. Drinking Water : (Ref. Sec. 18, Factories Act, 1948 Drinking water facility is also provided to the workers with in their working spotitself First Aid facilities: (Ref. Sec. 45 Factories Act 1945)In all departments first aid boxes are provided at various work spot for the benefit of workers. After the month they used to replace the ox with new medicines. LEAVE HOLIDAY Chettinad Cement Corporation Limited allows the following holidaysuch as National Holidays, festival Holidays National Holidays The company provides some of the important national holidays they are asfollows:Republic Day May Day Independence DayGandhi Jayanthi Festival holidays The company provides holidays to the employees for important festivals likePongalTamil New Year Ayudha PoojaChristmasDeepavali NUMBER OF LEAVE PERMITTED PER YEAR SL.NO.CATEGORYOFEMPLOYEECASUALLEAVE(CL)SICK LEAVE(SL)EARN OR PRILVILEGELEAVE (EL/PL)MAXIMUMACCUMULATION1.Workers712182.Staff7123026

3.Executive 712304.Contractworkers71218Time office is controlled by accounting department. The duty of the time officeis to maintain the attendance and leave record of all the employees. They follow punching card system in Chettinad Cement Corporation limited. The company giveseach employee an attendance card. The employees while entering or exit the office haveto insert their attendance card into a computerized machine which makes the entry permission for late coming (hour) will be allowed to all the employee of reasonableaspect.Apart from this time office gives details regardingLOPC (loss on payment) NSA (Night shift allowance)OT (Over time)HW (Holiday work) RECORDS MAINTAINED BY TIME OFFICE The importance records maintained by the office are as follows:Attendance Register Leave RecordAbsenteeismLoss on paymentGate passOn Duty RecordShift change regi HEALTH AND SAFETY DEPARTMENTS: In Chettinad Cement Corporation Limited safety is watch word and it has given prime importance and a safety committee is also constituted monitor the safetymeasures.Safety is a statutory procedure. The following are the members of safetycommittee. Organization chart (linked to Health and Safety departments) 28 ster leave register Overtime slips. ORGANISATION STRUCTURE OF CHETTINAD CEMENT CORPORATION LIMITED . Organization structure is the pattern in which various part or components areinterrelate or inter connected. It prescribes the relationship among various positions andactivities.According to March and Simon Organization structure consists simply of those aspects or pattern of behavior in the Organization that is relatively stable andchange only slowlyIn a large and complex Organization, structure is set forth initially by thedesign of the major components or sub systems and then establishment of relationshipsamong these sub systems. It is the patterning of these relationships among these subsystem. It is the patterning of these relationships with some degree of permanency isreferred top as Organization structure. The Organization structure is frame

work with inwhich an enterprise grows and develops.The role of sound organization structure can be assessed by one statement of Andrew Carnegie, a great industrialist of U.S.A, Take our factories, our Trade. Our avenues of transportation our money but leave me without organs and in four years Iwill have re-established myself. This speaks of the Organization.Lounsbury Fish, while emphasizing the role of good Organization structureLansbury out that, Organization is more than a chart. It is the mechanism throughwhich management directs co-ordinates controls the business. If the organization plan isill-designed, if it is merely makes shift arrangement. Then management is rendereddifficult and intellective. In short, the sound Organization facilities management processencourages growth and diversification provides for optimum use of technologicalimprovements and encourages human use of human being and stimulated creativity.The Organization administration of Chettinad Cement Corporation Limited,have strong foundations. The company is now being managed by a Board consisting of thirteen Directors, of these three or two whole time Directors. In this composition of Board, one Director is the General Manager is the Chief Executive of the unit. Themanagement structure has been classified as Executive Directors, Managers, Staff,Workers and Contract workers. ADMINISTRATION SET UP: The Chettinad Cement Corporation Limited is administered by a whole timeDirector. He led the company through the managing Director. The managing director with the help of Chief General Manager. The chief General Manager manages thedepartments through Managers and Executives. Under the departments such asEngineering, Technical, Marketing, Civil, Personnel, Accounts etc. the GeneralManager (Engineering) controls the Deputy and Assistant manager (Mech.). TheGeneral Manager (Accounts) control all Accountants, The General Manager (Technical)controls Electrical and Instrumentation Department. The personnel manager controls theTime Keepers, Canteen, Clerks, Executive Assistants and security Department. CHAPTER-2 2.1 OBJECTIVES OF THE STUDY To study and identify the inventory level exiting in the company. To identify the Total Inventory and Inventory Turnover Ratio. To identify the Growth of Inventory and Net sales. To identify the Material Consumption and Raw Material Turnover Ratio. To minimize idling of men and machine this may arise due to shortage of raw materials, suppliers and spares and, To provide efficient and smooth service to the customers. To keep to minimum

Capital (cash) lock up or investment on inventories and Inventory carrying cost, i.e., expenses involved in storing and handlinginventories. 2.2 SCOPE OF THE STUDY ORG 31 ANISATION CHART

32

The inventory manager must anticipate the companys need at every stage of production. Inventories protect the inventory manager against unforeseen failures insupply or a sudden increase demand. Materials are transported thousands of miles before the arrive at a plant, and while in transit they are someones inventory the legalowner of that material. Even a flat tire on the carriers truck could interrupt themanufacturing process with a late delivery.For these reasons every manufacturing enterprise carries a certain minimumamount of inventory. In practice, almost every manufacturer carries an inventory that issubstantially greater than the minimum amount because: The marketing, sales, and production departments all find it moreconvenient to have a supply on hand that it more than ample. The market indicates a rise in price of the raw material andtherefore increases the inventory levels. There is a lack of skills necessary to control inventory levels,and / or top management is unwilling to pay for LIMITATIONS OF THE STUDY 1. The study period covers only for four years which restricts to know moreabout the Inventory management of the company.2. Only quantitative analysis is possible through the statistical tools are used controls and is willing tocarry extra inventory