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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