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PRODUCTION GAP AND ItsPRODUCTION GAP AND ItsIMPACTIMPACT
ONON
INVENTORY MANAGEMENTINVENTORY MANAGEMENTOFOF
HINDUSTAN LEVER LTDHINDUSTAN LEVER LTDOf doomdooma unitOf doomdooma unit
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OBJECTIVE OF THE STUDYOBJECTIVE OF THE STUDY
To earn knowledge about the application of
theories in practical field.
Find out the deviation between production
plans and actual productions.
Analysis the reasons of deviation, which are
related to the inventory issues
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METHODOLOGY USEDMETHODOLOGY USED
I. I got the necessary information and data fromthe concerned peoples or convenient persons.
II. All the data I used are secondary.
III. I have used the interview method to collectinformation.
IV. I have adopted the observation method to
gather information.
V. I have used the analytical approach toanalyze the various data
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NESA PP FACTORY PROFILE:NESA PP FACTORY PROFILE:
NAME OF THE UNIT: NESA PP FACTORY,HINDUSTANLEVER LTD.
DATE OF ESTABLISHMENT:July,2001
TOTAL AREA: 18 Acre
FM OF THE UNIT: Mr. Swapan Bhattacharyya
TOTAL DEPARTMENTS: 8
TOTAL EMPLOYEES: 770.
8 Managers, 1 Asst. manager, 40 Officers, 7Staffs, 714
Employees.
TOTAL PRODUCTION LINES: Total no. of production lines
25.
FAL 8, Sachets 7, Toothpaste 6, Bottle 2, talcum 2.
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FINDINGSFINDINGS
&&SOLUTIONSSOLUTIONS
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In place like Assam it is not easy to operate anIn place like Assam it is not easy to operate anindustry.industry.
One of the biggest challenges for HLL is theOne of the biggest challenges for HLL is the
location. Doomdooma is about 3000 plus Kmlocation. Doomdooma is about 3000 plus Kmaway from the west parts like Mumbai, fromaway from the west parts like Mumbai, from
where most of the raw materials have to come.where most of the raw materials have to come.
So they needed more time for transporting RawSo they needed more time for transporting RawMaterials and finished products. The unit had toMaterials and finished products. The unit had to
incur huge cost on transporting materials.incur huge cost on transporting materials.
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sl particulersU
nits in MTons
1 Total Estimatede Production 16415
2 Ttotal Production 13543
3 Gap in Production 2871
4 Productuion Gap Due to
Inventory matter
1085
5 Production Gap Due to Other
Reasons
1786
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CONTROLLABE FACTORSCONTROLLABE FACTORS
Controllable factors are the factors, which can be
controllable by the company itself. These factors
comprise the following:
Supplier issues
Transporters issues
System related Issues
Plan variation Quality issues.
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SUPPLIE
R RE
LATE
DSUPPLIE
R RE
LATE
D
Capacity of the suppler is limited to a certain
extentThe input of the supplier is also another reason of
this gap.
Some suppler does not use the supplier net
properly.
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RecommendationRecommendationss:: Provide proper schedule to the suppliers followed by up
gradation in SupplierNet so that the suppliers are aware with
the plans and ready to give the feedback.
To educate all suppliers on supplier net, update IT skills of
the suppliers staff that deal with the net and also upgrade
system, hardware capabilities.
The unit should explore the possibility of 100% sourcing ofpackage materials locally after considering due consideration
of costs. Currently 90% of bottles are purchased locally.
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Recommendations:Recommendations:
Monitoring of standard time with actuals and take
necessary steps to reduce the dealy.
Tie up with Assam Government so that HLL foreasier entry into Assam- something like fast trekking
of regular trucks that is available in the west.
Set up stores just nearby the factory with all
modern facilities and the NESA train should come up
to Doomdooma.
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SYSTEM RELATEDSYSTEM RELATED
If there is a problem in structure of the PCP then
the PCP cannot be downloaded by the unit and
cannot be converted into what is called scheduledorders, thus creating a problem where they cannot
take the materials into their stock. So in such cases
even though the unit may have the materials
physically on hand they will not be able to use itfor production as they will not be able to account
the same.
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3P BAN
DIN
G DE
LAY3P BAN
DIN
G DE
LAYDelay in movement of finished goods and packing
materials from factory to 3P.
The facilities and manpower of the 3p.Recommendation:
Availability of inputs in time from factory to 3p
Banding time should be reduced from 48 hours to 24
hours.
The unit should explore the option of banding inside
the factory, which will be cost effective and better
commercial control.
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Recommendation:Recommendation:
Plan variation should be minimizing for this unit due tohigh transit time, around 3 weeks.
Safety stock of critical item should be increased.
Explore the possible opportunities to reduce the transit
time.
Supplier should keep ready stock of regular items to
minimize suppliers lead-time as agreed between the
supplier and the buyers.The lead-time of imported materials is 8 to 10 weeks.
These items should order in advance for procurement of
these items in advance.
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QUALITY ISSU
EQUALITY ISSU
E
The rate of rejection is 11.85% during the
last 5 months from January to May.Basically this problem arises with the
packaging materials. It may occur during
transporting and due to theunconsciousness of the suppliers.
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Recommendations:Recommendations:
The company is committed to extend its qualitystandards to its contract manufacturers, keysuppliers and service providers and by entering into
alliances with them, to jointly improve the qualityof its products and services.
The supplier ratting system should be improved.Try to build some Star Vendors so that they
provide 100% defects free materials. Transit time from Nagpur to NESA is 7days.The outer packaging should be proper for multiplehandling.
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UNCONTROLABLE ISSUESUNCONTROLABLE ISSUES
y
Unique Geographical areay Bandh and Strikes
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Recommendation:Recommendation:
Arrange or build a modern store just nearby
the factory so that they transit the goods to the
factory during the bandh days also. And in that casethe train may come up to Doomdooma which is just
5 Km away from the factory.
The train should come to Doomdooma.
The unit should initiate to reduce the bandhs
with the help of government bodies.
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CONCLUSIONCONCLUSION
The Hll has an effective inventory managementsystem. It manages and maintains the inventory
through suppliers net and the operating system.
These systems are time saving and cost effective
for the company. They give order of materials bysuppliers net. They have been able to effectively
integrate production planning, material planning
and buying and production under one systemic
tool. They however need to further refine it andfine-tune it to get the maximum benefit of this
integration.
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THANKSTHANKS