SYNOPSIS REPORTON

Inventory management system

CONDUCTED AT:

FEDERAL MOGUL GOETZE (INDIA) LIMITED, BAHADURGARH, PATIALA

INTRODUCTION: FEDERAL MOGUL GOETZE

Established in 1954, Goetz (India) Limited (GIL) is joint Venture between the Anil Nanda group and Federal Mogul, a Global supplier of quality products and solutions to automotive Industry. Goetz (India) Limited was established in 1954 as a joint venture with Goetze-Werke of Germany.

Goetze-Werke of Germany is now owned by Federal- Mogul Corporation, a $6.3 billion global company and One of the leading manufacturers of automotive Components in the world.

Federal-Mogul Goetz (India) Limited is the largest.Manufacturer of pistons and piston rings in India.

Federal-Mogul has been creating value through innovation and leading technology for More than 100 years. Today, the company is a key player in the global marketplace, Serving industries that range from automotive and commercial vehicles to railroad and Aerospace. Customers know they can rely on Federal-Mogul’s quality excellence in Products, trusted brands and creative solutions.This company started with a bold idea and over time grew into a FORTUNE 500

Company with a global workforce thousands strong. The Federal-Mogul team has Celebrated countless victories and worked hard to overcome the inevitable challenges. The products basket besides pistons and piston rings also includes cylinder liners, Light alloy castings and other sintered products. The company has its plants located at Bangalore (pistons, piston rings and pins), Bhiwadi (sintered products) .The company Has set up its first unit at Patiala (piston, rings, cylinder liners and castings). and Started commercial production in 1957.

GIL has installed production capacity of 11 million pistons and 53 million piston Rings.

Certifications Achieved

The Patiala and Bangalore Plant are both ISO 9001 I QS 9000 certified and under ISO ITS

16949 and ISO 14001 certification. Bhiwadi Plant is also having the certification of ISO /TS

— 16949/ISO 14000 certified.

IMPORTANT PRODUCTS

Pistons

For their original equipment, FEDERAL MOGUL Pistons is the first choice of every discerning manufacturer like Telco, John Deere, Hindustan Motors, Mitsubishi Lancer, Tata Cummins, Ashok Leyland, Mahindra, Escorts, Either, Maruti, Bajaj Auto, Fiat, Bajaj Tempo, TVS, Yamaha motors, Swaraj Mazda etc.

GOETZE has state of the art test bed facilities, Design facilities for products, dies and tooling with CAD — PRO—E and test bed facilities.

Production Capacity: 10 million Pistons per annum

Production Range: 30 mm to 300 mm Dia

Application

Bi-Wheelers, Cars,Jeeps, Tractors,Light Commercial Vehicles, Heavy Commercial vehicles,High out put locomotive diesel engines

Stationary Engine Industrial

Products suitable for

4 Stroke Engines 2 Stroke Engines Gasoline Engines • Diesel Engines CNG Engines

Features

AutothermicAutothermaticRing Carrier / Alfin Double C.I. Grooves ForgedSteel cap pistonsPistons with cooling coilThin Walled Pistons for Car

Thin Groove pistons

Cylinder Liners

GOETZE manufactures wet and dry types of cylinder liners with honing, and sleeves for bi-

wheeler applications for our quality conscious customers.

ApplicationBi-wheelers Cars TractorsLight Commercial Vehicles Heavy Commercial Vehicles Stationary Engines

Range Production Capacity: 50 mm to 120 mm Internal DiaProduction Capacity: 0.5 million liners per annum

Features

Thin wailedPlateau bonedWith and without flanges

Light Metal Casting

Goetze (India) Ltd. is making a wide variety of Light Metal Castings. These include Cylinder

Blocks, Cylinder Heads, Aluminum tube castings and Aluminum crown handles for single

cylinder engines.

Sintered Metals Products

Goetze India Limited (Sintered Products Division), produces a wide range of sintered metal

products for varied automotive applications such as valve, trains, transmission and oil pumps

with technical assistance from manufacturing facilities and R&D centers of Federal mogul

sintered products in U.K., France and USA.

Goetze (India) Limited (Sintered Product Division) are suppliers to most of the O.EMs in India

and abroad. Some of these are:-

Maruti Udyog Limited

Tata Motors

Bajaj Auto Limited

Tvs

Eicher Motors

Mahindra &

Mahindra

Escorts

Swaraj

Mazda

Ashok

Leyland

Hero

Honda

Valve Train Parts

Valve seat inserts and valve guides are a special category of sintered components for new

generation engines. Goetze India limited (Sintered Product Division) uses latest

technology / processes along with specially sourced powder Little wonder that auto majors

manufacturing engines for varied applications such as two/three wheelers, passenger cars,

LCV MCV’s, HCV and tractors prefer GIL Sintered Products.

Synchronizer Hubs

Sintered Synchronizer Hubs offer a very cost effective alternative to conventional hubs

and at the same time, meet the ever-increasing performance requirement of automotive

designers.

Oil Pump Rotor & Gears

Sintered Oil pump rotor & gears are one of the widest used sintered application in an

automotive industries. Goetze India Limited (Sintered Products Division) with support

from Federal Mogul Sintered Products’ R&D centers has developed its own capabilities to

design and manufacture oil pump motors.

INTRODUCTION TO INVENTORY MANAGEMENT

Inventory management refers to the process of managing the stocks of finished products, Semi-

finished products and raw materials by a firm. Inventory management, if done Properly, can bring

down costs and increase the revenue of a firm. How much one should Invest in inventory

management? The answer to this question depends on the volume and Value of inventory as a

percentage of the total assets of a firm.

Inventory Management involves the control of assets being produced for the purposes of sale in

the normal course of the company's operations. The goal of effective inventory management is to

minimize the total costs - direct and indirect - that are associated with holding inventories.

However, the importance of inventory management to the company depends upon the extent of

investment in inventory.

The basic building blocks for the Inventory Management system and Inventory Control activities are:

Sales Forecasting or Demand Management

Sales and Operations Planning

Production Planning

Material Requirements Planning

Inventory Reduction

TYPES OF INVENTORY

Four kinds of inventories may be identified:

1. Raw materials Inventory: This consists of basic materials that have not yet been Committed to production in a manufacturing firm. Raw materials that are purchased from firms to be used in the firm's production operations range from iron ore awaiting processing

into steel to electronic components to be incorporated into stereo amplifiers. The purpose of maintaining raw material inventory is to uncouple the production function from the purchasing function so that delays in shipment of raw materials do not cause production delays.

2. Stores and Spares: This category includes those products, which are accessories to the main products produced for the purpose of sale. Examples of stores and spares items are bolts, nuts, clamps, screws etc. These spare parts are usually bought from outside or some times they are manufactured in the company also.

3. Work-in-Process Inventory: This category includes those materials that have been committed to the production process but have not been completed. The more complex and lengthy the production process, the larger will be the investment in work-in-process inventory. Its purpose is to uncouple the various operations in the production process so that machine failures and work stoppages in one operation will not affect the other operations.

4. Finished Goods Inventory: These are completed products awaiting sale. The purpose of finished goods inventory is to uncouple the productions and sales functions so that it no

longer is necessary to produce the goods before a sale can occur.

The following methods can be adopted to value the raw material:

• First-In-First-Out (FIFO): When a firm adopts the FIFO method to price its raw material, theissue of material from the stores will be in the order which it was received. Thus the pricing will be based on the cost of material that was obtained first.

• Last-In-First-Out (LIFO): In the LIFO method, the material issued will be priced based on the material that has been purchased recently.

• Weighted Average Cost Method: The pricing of materials will be alone on weighted average basis (weights will be given based on the quantity).

• Standard Price Method: Material is priced based on a standard cost, which is predetermined. When the material is purchased the stock account will be debited with the standard price. The difference between the purchase price and the standard price will be carried into a variance account.

Replacement / Current Price Method: In this method material is priced at the value that is realizable at the time of the issue.

RESEARCH METHODOLOGY

This part of the report i.e. Research Methodology is intended to give the details of the conecptual

framework within which the study has been carried out. This section cover the following aspects:

A. Objectives of the Study

B. Research Methodology

A: Objectives of the study

1. To know the functioning of the inventories and understand the system of procurement of

material, its receipt , inspection and its issuing.

2. To study the accounting and valuation of raw material, work-in- progress and finished goods.

3. To study the inventory control techniques used by company and their techniques.

4. To study the performance of the company in relation to inventories and thus provide suggestions

if any on the basis of analysis and interpretation of the data.

B : Research Methodology

The methodology used for the collection of data will be secondary type.

SECONDARY DATA

It will be mainly based upon annual reports, magazines, office reports and various published documents

of FEDERAL MOGUL GOETZE INDIA LTD Patiala.

Data will be collected for five years (i.e. financial year 2007-2012) , then it will be compiled and

thereafter statistical analysis of the information will be done, thereafter various ratios relating to the

inventories will be calculated and tables showing variation in the inventories for five years will be

made.

BIBLIOGRAPHY

INTERNET WEBSITES:

Foundational work

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Comprehensive overview

h tt p :// www . s age MA S_90_200_ i nven t ory_ s pec.pdf / 22586.pdf h tt p :// www . s ba.gov /li b r ary / pub s /m p_22pdf h tt p :// www .S KU f l o w .co m/ reffer a l s .a s p h tt p :// www .az i n v en t ory management.com/working_capital.html h tt p :// www .az i n v en t ory m a n age m en t .co m / p l an n i ng.h t m l h tt p :// www .az i n v en t ory m a n age m en t .co m / bu s i ne ss _page s .h t m l h tt p :// www .an sw er s .co m/ s t ock keep i ng un it s / refere n ce. j s p

Questionnaire( filling by organization employees to know about inventory management)

Name : Age:

Designation: Department:

1-which techniques used by your organization to control the inventory?

………………………………………………………………………………………………

2-which methods are used by your organization for inventory management?

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3 who prepared the MIS report of inventory in your organization and which basis it prepared?

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4-inventory turnover ration of your organization?

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5-level of inventory you kept your organization?

…………………………………………………………………………………………………..

6-which categories the inventory of your organization classified?

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7 Is your organization adopt EOQ model for inventory management or control?

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8 how your organization maintain the level of inventory?

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9-conversion period of inventory?

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10-which is most appropriate method used by your organization for manage the inventory………………………………………………………………………………………………………………………………………………………………………………….

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Thank you.