A Project Study Report On

Comprehensive study of Inventory Management

Training Undertaken At

SHREE JAGDAMBE PAPER MILLS LTD.

Submitted in partial fulfillment for the Award of degree of Bachelor of Business Administration In lieu of paper 306

2010-11

Submitted by: Shubhangini Rathore B.B.A III yr.

Under the supervision of: Dr. Pawan Kumar Patodia Asstt. Prof.

BIYANI GIRLS COLLEGE, JAIPUR

UNIVERSITY OF RAJASTHAN

CERTIFICATE
This is to certify that MS. Shubhangini Rathore student of B.B.A 3rd yr of Biyani girls college, Jaipur has prepared this project entitled Comprehensive study of Inventory Management under my supervision. She has prepared this project on the basis of training received at SHREE JAGDAMBE PAPER MILLS LTD. For a period of 45 days to the best of my knowledge this is an original piece of work.

DATE:

Dr. Pawan Kumar Patodia Asstt. Prof.

DECLARATION
I hereby declare that the project entitled Comprehensive study of Inventory Management is my work carried out under the guidance of Dr. Pawan Kumar Patodia Asstt prof. Biyani Girls College, Jaipur.

I Shubhangini Rathore further declare that all facts and figures furnished in this project are the outcome of my own intensive research and finding.

Shubhangini Rathore

ACKNOWLEDGEMENT
Summer training is successful not only by single efforts of trainee alone but there are several people who are helpful in making training a complete job done for a precise purpose. It is a matter of great privilege and immense contentment to be associated with an esteemed organization like SHREE JAGDAMBE PAPER MILLS LIMITED. Also acknowledging the work and help of all those who have guide me for the completion the project on time indeed a duty of our knowledge the facts that no words can measure their guidance to any extent. Likewise, in completion of my summer training, I would like to thank my authorities and personalities of whose guidance and sincere cooperation has helped me largely. First, I would like to pay my earnest and sincere regard to Mr. Rakesh Goyal for their support and supervision during the course of completion of my project. Secondly, I also bestow my warm thanks to all team members and my colleagues who did not let me down rather inspired me all the time performing the best. I would also like to thank my project guide Dr. P.K. Patodia who encouraged me to take this project in future for my carrier.

Shubhangini Rathore
BIYANI GIRLS COLLEGE

PREFACE
The summer training project of management courses plays an important role for a management student to develop into a well groomed professional. It provides the theoretical concepts and practical exposure in the field of application. Summer training project also provides idea of dynamic and versatile professional world as well as an exposure to the details and complexities of the corporate world. During my BBA curriculum I studied many subjects, which if not applied properly are simply waste of time. At SHREE JAGDAMBE PAPER MILLS Ltd. I got a chance to apply management theories to the latest competitive and marketing oriented environment. In my project study I tried to know about the real aspects of Inventory management. My project study covers the different aspects of inventory, introduction of paper industry, inventory control information about SHREE JAGDAMBE PAPER MILLS, and their inventory management system and so on.

EXECUTIVE SUMMARY
In order to correlate theoretical aspect of management studies with the practical aspect of real business world, the student of management are required to undergo to do a project work on a particular sector and study its various players. In fact the project can be treated as telescope through which we, tomorrows managers can peep into the world and can observe the activities of real business world before crossing the Door that loads us to the wonder world of real business management. In doing, so we get the choice of doing project in such a reputed company, which is not only famous for the leadership in its field but had also utilized its marketing section in its best possible manner. As we know that ultimate aim of every enterprise is to create the new demand for his product. In order to do so, we had tried to find out the various inventory management tools and technique adopted by the famous players in this industry. We had tried to find out the companys strategy towards inventory keeping and what are the main reasons behind the success of SHREE JAGDAMBE PAPER MILLS Ltd., its name and hoe the company for making marketing strategy in future can further analyze this position and to check the satisfaction level of dealers and retailers with respect to different parameters company.

INDEX
Chapter 1- Introduction Chapter 2- Company Profile Chapter 3- Data Analysis & Interpretation Chapter 4- Inventory Management Chapter 5- SWOT Analysis Chapter 6-Recommendation & suggestion ANNEXURE: Questionnaire. Bibliography 8-29 30-52 53-55 56-79 88-89 90-92

INTRODUCTION OF THE INDUSTRY

Indian Paper Industry an introduction

The new millennium is going to be the millennium of the knowledge. So demand for paper would go on increasing in times to come. In outlook of paper industrys strategic role for the society and also for the overall industrial expansion it is required that the paper industry performs well. Government has totally deli-censed the paper industry with effect from 17th July, 1997. The entrepreneurs are now mandatory to file an Industrial Entrepreneur Memorandum with the secretariat for Industrial Assistance for setting up a new paper mill or substantial expansion of the existing mill in permitted locations. The Paper industry is a main concern sector for foreign alliance and foreign equity participation up to 100% receives automatic approval by Reserve Bank of India. Several fiscal incentives have also been provided to the paper industry, particularly to those mills which are based on non-conventional raw material.

Capacity, Production, Raw material and Import There are, at current, about 515 units engaged in the manufacture of paper and paperboards and newsprint in India. The country is almost self-sufficient in manufacture of most varieties of paper and paperboards. Import, though, is limited only to certain specialty papers. To meet part of its raw material requirements the industry has to rely on imported wood pulp and waste paper. Production of paper & paperboard during the year 2002-03(up to December, 2002) is 24.52 lakh tonnes. At present about 60.8% of the total production is based on non-wood raw material and 39.2% based on wood. Performance of the industry has been constrained due to elevated cost of manufacture caused by insufficient availability and high cost of raw materials, power cost and concentration of mills in one particular region.

Several policy actions have been initiated in recent years to eliminate the bottlenecks of availability of raw materials and infrastructure progress. To bridge the gap of short supply of raw materials, duty on pulp and waste paper and wood logs/chips have been reduced. The capacity employment of the industry is low at 60%. About 194 paper mills, mostly small mills, are sick and or lying closed. Several policy actions have been initiated in recent years. Imports of paper and paper products are on the rise over the years. Though, it has augmented during 2003-05 after a fall in 2002-03. About 140,000 tonnes of paper was exported in 2002-03 mostly to the adjacent countries. India's per capita consumption of paper is around 4.00 kg, which is one of the lowest in the world. With the anticipated boost in literacy rate and growth of the economy, an increase in the per capita consumption of paper is probable.

WTO impact

WTO as discussed the implications of Indian paper and newsprint industry as a part of its negotiations and implications. The Indian paper industry has important place in the industrial landscape the paper industry has a strong backward linkage with forest and environment on one hand and consumers of variety products on the other hand. The manufacturing of paper through pulp of wood or of other fibrous cellulosic material has been discussed at length. However, recovery of waste or scrap for paper & paperboard manufacturing has been looked at from different angle in the classification of products of Indian paper industry. In fact the paper industries which are eco friendly imports lots of waste paper to the country in the manufacturing of paper and paper board. Generally WTO implications are applicable to all the industries. However, in respect to paper industry where waste paper is raw material & which is eco friendly, the impact is not harsh. SJPML is into manufacturing of paper out of the waste paper and is an eco friendly project.

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Outlook The demand for upstream market of paper products, like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is growing up. These developments are expected to give boost to the industry. Indian paper industry needs the following for being worldwide more competitive. i. Persistent availability of good quality of raw materials (forest based) and enormous import of waste paper to increase the availability of raw materials. Abundant modernization of the manufacturing assets. Advancement of the infrastructure. Quality improvement and cut in cost of production Import policy favorable for import of material, equipment, instruments, raw materials & technologies which are bearing of the quality and environment.

ii. iii. iv. v.

Based on the recommendation made in the Report and in expert with the industry Associations, action strategy are being finalized in discussion with other Ministries/Departments concerned. The Main Action Points projected are as under: Infrastructure Improvement of key ports, roads and railways and communication services which will help the whole industrial sector as well as pulp & paper industry.

Raw Material (i) For wood Based industry Re-evaluation of forest policy so that plantation can rise by industry/cooperatives of farmers/state Government. Ruined forest land to be made obtainable to the industry for raising plantations.

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(ii) For waste paper Industry Import of waste paper at minimum import duty. Introduction of ecolabeling system where in products made from recycled finer is rated higher than the products made from virgin fiber. Introduction of up to date and effective collection and grading system. (iii) For Agro Based Industry Funds to be made accessible for technology upgradation for handling & processing of agro residue fiber, in small & medium scale industries. Government Policies Accelerate reduction to partially diminish high capital investment. Allow duty free imports of new & second hand machinery/equipment for Technology Up gradation. Energy Policy Improved availability & quality of coal. More consistent Energy Policy by States

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OVERVIEW OF PAPER INDUSTRY Brief Background: The paper and pulp industry has a significant role to play in the Indian economy. The overall paper utilization in India is about 5 million tons. The mounting demand for paper puts strain on supply of papermaking fibers, including resourceful recovery of recycled paper, use of non-Wood raw materials and the need to develop and expand sustainable use of wood. At the same time competition in global pulp and paper markets is escalating. Indian pulp and paper industry consists of around 500 paper mills, mainly small and medium sized companies with production capacity ranging from less than 1,000 TPA. to over 100,000 TPA. There is an increasing need for upgrading and introduction of energy efficient and clean technologies for enhancing competitiveness and yield. The whole paper manufacturing procedure can be broadly classified into two distinct operations 1. Pulp making, Paper making 2. Utilities and effluent treatment.

Pulp making is the heart of any integrated paper mill and is the most energy and resource intensive operation. An integrated paper units product quality as well as yield is largely dependent on the efficiency of its pulping operations.

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GLOBAL PAPER INDUSTRY Industry structure: The global industry is configured for quantity driven operations with separate pulp manufacturers (which is basically commodity trade) and paper makers (differentiated brand driven industry). Europe and Canada lead the pulping industry while North America (specifically US), Western Europe and parts of Asia dominate paper manufacturing. The world paper industry can broadly be classified into:

Paper & Paperboard d\paperboard

Newsprint

Printing & writing

Packaging

Tissue & sanitary

The global paper consumption in FY 2000 was roughly 325 mn. tonnes. Writing & Printing segment accounted for 32% of the worldwide paper consumption while Packaging, Tissue & Sanitary and Newsprint accounted for 50%, 6% and 12% respectively.

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Demand- Supply Scenario: Geographically, Asia accounts for around 32% of the worldwide paper consumption while North America and Europe account for 31% and 28% respectively. Asian countries have experienced higher growth in demand due to greater economic growth, ranging from 7% to 10% per annum. As of 2000, the aggregate worldwide capacity of paper and paper boards Stood at 364 mn TPA. resulting in excess supply to the extent of 40mn TPA. though, due to geographical capacity inequality (particularly capacity shortage in Asia which is the fastest growing region), global prices have remained stable. (Source: Cris Infac) Global paper & board demand is improving due to recovery in demand in US and robust demand growth in China along other Asian economies.

The growth in world paper demand and Consumption sample for the last 5 years is indicated in the chart. As per global industry estimates, paper and paper boards demand is predictable to grow at a CAGR of 2% p.a. and is expected to touch 370 mn TPA. by 2009 (Source: Cris Infac)
Mn tpa FY2008E FY2009P FY2010 P

Effective capacity

6.3

6.4

6.6

Capacity

85%

86%

89%

Production Demand Surplus

5.3 5.4 -0.1

5.5 5.8 -0.3

5.8 6.1 -0.3

E- Expected, P- Projected. DOMESTIC INDUSTRY Industry structure: In contrast to international industry, Indian paper industry, much like Asia, has progressed as an integrated paper producing industry, i.e. nearly all mills have pulp and paper producing capacities. But related to the global trends most of the players function either in the paper and paperboards
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industry or newsprint industry. The Indian Paper Industry is extremely fragmented. This growth was a consequence of the Government licensing system in the 70s when a lot of small paper mills were set up as SSI units. On the past few years, the smaller mills are being rendered unviable due to elimination of excise concession for small units, reduction of basic import duty to 20% and stricter environmental conformity. These mills will now have to develop to an economic size or consolidate with larger mills or close down.

Domestic demand-supply scenario: The following table depicts the past and anticipated domestic demand-supply scenario for paper and paperboards:
Mn tpa FY2008E FY2009P FY2010 P

Effective capacity Capacity Production Demand Surplus

6.3

6.4

6.6

85% 5.3 5.4 -0.1

86% 5.5 5.8 -0.3

89% 5.8 6.1 -0.3

E- Expected, P- Projected. Demand Scenario: even though being the 15th largest paper manufacturer in the world, India is highly below penetrated from the consumption outlook, which makes it a large and hidden at the same time. A major portion of the consumption is attributable to the Western and Southern regions of the country, which account for nearly 65% of the countrys total paper consumption. This skew in paper consumption in India has also been in line with the literacy levels and industrialization in these areas of the country. The following table depicts the per capita consumption of paper in various countries.

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Per capita consumption(kg)

India Sri lanka Philippines Indonesia china Thailand Malaysia Other ASEAN Countries Over all (WORLD)

India-5 Sri Lanka-6 Philippines-11 Indonesia-22 China-28 Thailand-34 Malaysia-101 Other ASEAN Countries-20 Over all (WORLD)-54

On the whole low per capita consumption in India has been on account of the low literacy level in the country. On the other hand, with rising literacy levels and continuous economic growth, domestic demand for paper is anticipated to rise. As per Cris Infac estimates, the overall demand for paper and paper boards is anticipated to touch 6.1 mn TPA. by 2006. Domestic paper and paperboard demand rose up in 2007-08 and is anticipated to speed up due to improvement in exports and industrial activity. Supply Scenario: Effective paper & paperboard capacity was around 6.2 mn TPA. for FY 2008 The average utilization level of the industry was at 82% resulting in manufacture of 5.1 TPA in FY2008. As per the Indian paper
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Manufacturers Association, the Indian paper industry is probable to report a 510% development in production and sales during the coming years. This increasing demand is not estimated to be met by a corresponding rise in capacity due to high capital costs and environmental constraints. As the domestic paper industry has low duty protection levels, the domestic prices have been in line with international prices. This has resulted in less import of paper, which is now largely confined to waste paper pulp especially coated and specialty paper. Thus, while international pricing impact domestic pricing thus impacting profitability, but the paper imports constitutes less than 10% of the total paper & paperboard supply. Recent Scenario & Outlook: After a prolonged down cycle, the domestic paper industry started to firm up in the last year. At the time in the past 6-9 months has witnessed sharp rise in working costs as inputs like caustic soda and chlorine have risen about 40 per cent over the past year, while wood prices have risen around 30 per cent over the past 6-8 months. Added, paper companies have to install chemical revival plants to meet with tighter environmental standard. Even though the paper prices have been recently hiked by Rs 750 1000 per tone and prices in the high end segment are about 10 per cent higher, but for smaller players the stress on operating margin has become strong. Budget has proven to be a mixed bag for the industry. On the optimistic side the increased focus on education as well as overall economic development will increase the demand for the paper. While the proposal to lessen customs duty across the board to 15 per cent could force domestic paper companies to cut prices if imported paper became cheaper than Indian grades & by this means hollow the profitability. Going ahead an average growth rate of 6% p.a. in demand is forecasted for the next 3 years where as the supply during the same period is anticipated to grow at an average of 4% pa.The forecast in the capacity extension during the same period is estimated to be much lower resulting in a gap between demand and supply within the country. In view of the above, the overall industry outlook is projected to be positive with relatively low per capita consumption, rising demand, slow capacity additions and rise in price trends.

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Problems of the Industry-Inventory Aspect. Shortage of raw materials: The most important problem the industry has to face at present is the chronic shortage of raw materials. An s compared with the growing needs of the industry, production of cotton has increased rather slowly. Power Shortage: The adverse effects are on production. The problem has not so far eased and the situation is likely to affect the industry. Power shortage will inevitably hamper full utilization of capacity and expansion of the industry. As such, it cannot but affect the inventory. Paper Products Some of the paper products are sheet paper, paper boxes, tissues, paper bags, stationery, envelopes, and printed-paper products such as books, periodicals, and newspapers. Specialty papers like sandpaper, blueprint paper, carbon paper are not a part of paper products industry. The stationery category includes greeting cards, printing and writing papers, school and office papers, etc. The toiletry products include paper towels, tissue paper, and bath tissue.

PAPER BAGS Made from paper, the paper bags are durable in quality. These paper bags are available in various sizes and colors to match the choices of various clients. These paper bags have gained popularity in the market for carrying different types of items from grocery, books to garments. Government has banned plastic bags in some cities so; these bags are used as substitute these days.

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Paper cups

Paper cups are made from food grade paper capable of holding both hot and cold liquid for longer time, these paper cups are of superior quality. These types of cups are mostly used by:

Railways BPO Multiplex Cinema Airport

Corns centre Ice Cream Parlour. Etc.

CARTOON BOXES.

These are also made up of kind of a paper also known as corrugated paper. Threats Internet threatens the paper products industry, as it has become the new market channel (such as,) for many companies Email marketing campaigns and online banner ads have decreased the demand for traditional print advertising. Print advertising now includes newspaper and magazine production only. Newsletters, articles, books are now available online and that that has reduced

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the use of print services. Apart from Internet, cell phones can also be used to access news, and other information, which Pose another threat to the paper products industry. Outlook The challenges faced by the paper products industry are: Boost in production and distribution i.e. increase in transportation cost. Decline in demand i.e. competition from other media. These factors are likely to carry on in future and will soon draw away investors, customers, and advertising money from the paper products industry. Mergers and Acquisitions Competition from electronic media has affected the share value of many publishing companies. With their slashed share prices, these publishing companies have now become the target of private equity buyers.

Paper Industry Trends

A brief introduction to paper Industry Trends: Paper Industry trends show that the paper manufacturing companies are adopting a strategy which is directed toward globalization. These companies will get advantage immensely in the next few years to come. In an era of the World Wide Web, e-filing, email, podcast etc. poses a big threat to the paper industry. According to the law of natural selection, the strongest will survive and lead. However, as per paper industry trends increase, the consumption of paper related articles is predicted to shoot up. Paper Industry Trends: There are numerous companies in the paper market industry aiming at a particular group of people, having a particular type of lifestyle. Particular segments of people are being targeted. Great stress has being laid on the believability and companies with healthy brand reputation in the paper market. The paper industry trends also show that the companies which were able to
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adopt themselves promptly to the need of any situation thrived in the long run. Efficient administrative policies for tackling situations are the order of the day. Points to ponder over: There are several points to think over and those which determine the paper industry trends. Environment friendly articles are given more significance these days. The use of recycled paper is on the go. Better services of customer support and other value added services in gaining significance. Efforts to provide better quality service to the customer and enhanced interaction between suppliers and consumer is on the rise. For a better tomorrow: Paper industry trends also show that a number of strategies are being adopted to develop the paper industry. In this context, efforts are being made to improve the paper industry by adopting the following measures. Pressure is being laid on excelling in operation related spheres and also from the business outlook. The paper industry have to rethink, re plan, rework on strategies depending on the needs of the time. Policies should be adopted to handle competition and changes necessary from the commercial outlook. A brief introduction to Paper Industry Research Industry research work is conducted in various spheres depending on the requirements of the paper industry. Different data relating to paper industry trends, market surveys on paper industry, paper products is available in Paper industry research programs are undertaken to improve the functioning of the paper industry. Paper the Paper industry research reports. The paper industry report also consists of overviews in the context of findings or discoveries, market statistical data, takeovers or mergers etc., in addition to the steps required to be taken for improving the paper industry. Areas of Paper Industry Research: Research and development carried out in the paper industry helps to review the condition of the current paper industry. Research work encompasses means to
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make out and use sources of fibers other than the fibers used conventionally. It also includes guiding principle to safeguard these resources. Latest technologies pertaining to chemical usage, pulping, improving quality at the same time maintaining the environmental equilibrium is looked into. Paper Industry research is conducted extensively in the following points:

Making the paper industry environment friendly Research conducted on processing raw materials Steps to improve the quality of raw materials Research carried out in resourcefully managing energy. Research work pertaining to chemical recovery. Preparing stocks, coating and manufacturing paper areas are also attended to in research reports. Biotechnology applications in paper industry Research work is also carried out in areas related to bleaching processes and pulping processes.

Paper Industry research is conducted extensively in the following points: Making the paper industry environment friendly

Research conducted on processing raw materials Steps to improve the quality of raw materials Research carried out in efficiently managing energy. Research work pertaining to chemical recovery. Preparing stocks, coating and manufacturing paper areas are also attended to in research reports. Biotechnology applications in paper industry Research work is also carried out in areas related to bleaching processes and pulping processes.

Paper industry research is conducted keeping in mind the following:

The prevailing conditions of the market Effect of changes in demography

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Market competition with regard to household paper products. Statistics related to the usage of the different household paper products like towels made of paper, tissues, cups, plates, towels made of paper and all paper related products.

Research in areas related to retail market environment, industrial and commercial market is also taken into consideration.

Future prospects of paper industry. Indian paper and newsprint industry has an enormous potentials and prospects in coming future. In our, country, demand for paper and newspaper is speedily increasing. There are vast demands in the area of tea bags, filer paper, tissue paper, medical-grade coated paper; etc Indian paper industry is one of the underestimated industries, because India's per capita consumption of paper is just about 5 kg. While it is 337 kg in North America, 110 kg. In Europe and 30 kg. In China. Compare to this scenario India' par capita consumption is one of the lowest in the world. The Rs. 22000-crore paper industry in India, rated 15th largest in world engaged about 1.5 million people with the help of Rs. 2500 crore Government subsidy. Government has given paper industry as one of the 35 high-priority lists. There are about 515 manufacturing units engaged in production of paper, newsprint and paperboards in India with have the annual capacity of 8.3 million tones, which likely to be 16 million tonnes by 2014. There are few state owned and private players in the emerging paper industry like Hindustan Newsprint Ltd (HNL), Tamil Nadu Newsprint and Papers Ltd (TNPL), Ballarpur Industries Ltd (BUILT), Seshasayee Paper & Board Ltd. (SPBL), ITC paper. Indian Government has completely deli-censed the paper industry under the Industries (Development & Regulation) Act with effect from17th July, 1997. The interested entrepreneurs or existing players now require to file an Industrial Entrepreneur' Memorandum (IEM) with the Secretariat for Industrial Assistance(SIA) for setting up a new paper mill or substantial expansion of the existing mill in permissible locations. The foreign direct investment is allowed

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up to 100% in paper industry except those who require industrial license with prior approval from Reserve Bank of India. The biggest stumbling blocks in Indian paper industry: i. Remove the bottlenecks of good quality of raw materials (forest based wood pulp) and bulk import of waste paper to bridge the gap of short supply of raw materials. ii. High cost of raw materials and lack of modernization of the manufacturing units. iii. Rising power and shipping logistics cost and concentration of mills in one particular area. iv. Quality improvements and reduction. v. No rehabilitations packages for near about 194 small-scale paper manufacturing units, which are sick or lying sick. vi. Import duty on pulp and waste paper, wood raw materials & technologies etc. Few promising players in the paper production: Ballarpur Industries Ltd (BILT), part of the US$ 3 bn. Avantha Group, is India's largest manufacturer of writing and printing paper. More than 50% of India's coated wood-free grades roll out of BILT's state-of-the-art plants and machineries. BILT has an impressive 85% share of the bond paper market in India. Not only is that BILT the only Indian paper company to feature in the global top 100 list. Its recent acquisition of Malaysia's Sabah Forest Industries are expected to start operations by 2009-December, end. Seshasayee Paper & Board Ltd., one of the South Indian based company have been producing Fine Paper since 1960. Now they are commissioning its new pulp production units with an additional investment of Rs. 3,000 million. They are expected to see in-house pulp production going up to 440-tonnes a day from 240-tonnes a day. They have the customers over the 20 countries with extensive range of product cater the various customers.

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Tamil Nadu Newsprint and Papers Limited (TNPL) owned by the Government of Tami Nadu started early eighties to produce Newsprint and Printing & Writing Paper. The TNPL has initial capacity of 90,000 tonnes per annum. Gradually company has increased its production to 2, 45,000 tonnes per annum. Company has emerged as the largest bagasse based Paper Mill in the world consuming about one million tonnes of bagasse every year. In their forthcoming ambitious project, company has plan to invest Rs. 1000 crore for expanding of production capacity 4, 00,000 lakh tonnes from present 2, 45,000 tonnes per annum. ITC Paperboards & Specialty Papers Division is India's largest and most technologically advanced paper and paperboards business. ITC has the wide spectrum products like packaging, graphic, writing, printing and specialty paper through its four world-class mills in India. Company is already pioneered in many specialty applications like cigarette tissues, packaging boards, aseptic cartons and gypsum liners. In their Bhadrachalam plant, it has capacity to produce 4, 00,000 tonnes of paper boards. ITC already made public announcement to invest Rs. 25,000-million by 2009 to boost its production capacity to 2 lakh tonnes.

Expectation of the industry from the Government. The Government has taken several steps to make availability of raw materials and infrastructure development to overcome the shortage of raw materials. Duty on pulp waste paper, wood logs/chips has been reduced. The Indian Paper Mills' Association (IPMA) has suggested to setting up of a Rs. 20,000 crore 'paper fund'. IPMA also, suggested to setting up existing technology upgradation fund (TUF) for improvement of energy conversation, quality upgradation and product improvements. The Indian paper industry is growing at 8 per cent per annum. It is also, expected to grow by 10 per cent by the year 2010. IPMA also, urged the Government to reduce the excise duty from 12 per cent to 8 per cent for all type of paper mills as they are looking to upgradation of 25 per cent of their capacity.

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Indian paper industry has direct linkage with educational sector, manufacturing sector, as a result near about 20 per cent direct and indirect taxation on paper industry including 12% VAT, octroi, etc. Reduction of direct and indirect taxation can make more competitive player in the world. The following measures can be taken to make Indian Industry more competitive: Raw Material: (i) For Wood based industry: The Indian paper and newsprint industry already urges the Government to amend the laws for immediate revision of forest policy so that plantation to make use of the degraded land for raising plantations for better quality of pulp. But, the Government does not permit forests to be used for sourcing woods by the corporate sector, nor does it allow industrial plantation on degraded forestlands. (ii) For Waste Paper based Industry: Less export duty on Import of waste paper. Introduction of "Ecolabeling" system where in products made from recycled fiber is rated higher than the products made from virgin fiber. Introduction of modern and effective collection and grading system. (iii) For Agro based industry: Funds to be made available for technology modernization and processing of agro residue fiber, particularly for small & medium scale paper industry. Infrastructure Improvements of communication e.g. rail, road, port which will help the entire industrial sector. Technology Upgradation There is a wide gap between the technologies of the domestic paper industry in India compared to that of the foreign countries. Most of the paper mills are using old technologies, which is serious cause of resultant in low productivity with high costs of production.

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Government Policies (i) Social forestry scheme should be introduced to small and marginal farmers to promote sapling and know-how for raising plantations of fast growing trees with an assurance of a buy back at a remunerative price. (ii) The industry is also seeking permit duty free imports of new & second hand machinery/equipment for Technology upgradation. (iii) Right now, an estimated 55-million bagasse is available, but currently we are using only 8%. Bagasse can be introduced in replace of using bamboo, rice or white straw. Power Policy More uniform cost effective Power Policy for paper production units/mills. Newsprint prices with unprintable tag: Virtually paper industry is decontrolled and there is no price control on finished product. As a result entire cost has shifted upon the end-users. Newsprint prices increase sharply by 24% in a short span of three months to touch a high of $760 per tonnes, an increase of $145 since December 2007. India also, imports bulk of newsprint from foreign countries. From North America we have imported 18.9 lakh tonnes in 2004 to 26.45 lakh tonnes in 2007, a CAGR of 11.9%. Domestic consumption move up by 6.40 lakh tonnes to 9.70 lakh tonnes, a CAGR 14.9%, while import went up by 12.50 lakh tonnes to 16.75 lakh tonnes, a CAGR of 10.3%. It has been estimated that domestic demand will touch 35.54 lakh tonnes in year 2009. In a recent development, US-East Coast prices increased; as a result the ex-mill rates, ready for shipment, risen from $608 to $710 per tonnes, an increase of $ 102 in just three months, it may galloped to $77o by the end of Q3 2008. Last year, India had purchased imported newsprint at very economical rates. It has several reasons. i) Mass production by International Paper Manufacturer. ii) Declining demand from UK part of the Europe forced paper products to sell at economical rates in India. iii) China was another fear factor.

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Trends have reversed in North America. They went for changing product mix, cutting excess capabilities and consolidation through buyouts. At the beginning of 2007, they supply 40.5 million tonnes, which exceeded demand of 38.3 million tonnes. At the early 2008, two million tonnes of production had fallen; as a result prices rose up. In China, old newsprint, which is one of the raw materials for paper industry, nearly double to $270 per tonnes in span of just 5 to 6 months? Rising Crude price also, affect on freight rates. Recently, crude prices breached the mark $140, as a result pulp prices increase from $575 to $750 per tonnes. Despite the growing demand for paper industry, there should be new policies/projects to overcome the acute shortage of raw materials and infrastructure development. As global industry is not flourishing, with the help of implementation of setting up institutional mechanism for funding technology upgradation, relax environmental laws to encourage captive plantations for raw materials, we expect that in near future India may become market leader in paper industry. OBJECTIVE OF THE STUDY My objective of study is as follow 1. To know about the inventory management. 2. To know about the paper industry. 3. Try to use all the theoretical knowledge into the practical aspect. 4. Try to understand that how these types of firms managing their inventory in very well manner. 5. To know about the Indias share in the world level production of paper and where we stand in comparison to the other country. 6. To know about the safety norms and pollution control techniques applied by paper industries. 7. How well company is maintaining his human resources.

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COMPANY PROFILE

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SHREE JAGDAMBE PAPER MILLS LTD

CORPORATE PROFILE M/S Shree Jagdambe Paper Mills Ltd. (SJPML) incorporated in July 1980 as a pvt. Ltd. Company commenced its commercial production of semi Kraft paper on single product line in M arch 1982 with an installed capacity of 950M.T. p.a. based on agro residue. In the year 1985-86 the capacity was increased to 3000 M.T. p.a. & later in 1987-88 to 5000 M.T. p.a. by adding certain balancing equipment. In 1990, SJPML added another product line and increased capacity to 10000M.T. p.a. In 1993-94 the plant has been operated at 95% capacity utilization to give a production of 9587M.T. p.a. SJPML has been converted into limited company on 28.12.94 & also enhanced its production capacity from 10000M.T.p.a. at present to 20000M.T.p.a. through modernization cum expansion scheme. Suriender kumar Goyal (chairman), Anil kumar Goyal (Executive Director). During the year 1994-1995 other sister unit of SJPML for manufacturing of Kraft paper was incorporated as Shree Sita Ram Paper Mills Ltd. At village Nanasanja Taluka Jagadia, District Baruch (Gujarat) with installed capacity of 2000M.T. p.a. As product of the company is well accepted in open market but due to government policies of liberalized international trade, Import duty on Kraft paper was reduced resulting dumping of paper in India by multinational company and same also becoming a reason for down in production for the year 2001-2003. Similarly Excise duty was also increased between 1994-95 to 200001 from 0% to 5% & then to 8% & 16% 2002-2003.

BRIEF PARTICULARS OF THE COMPANY The company was incorporated under the name & style of M/S Jagdambe Paper industries (p) Ltd. Vide certificate of increase NOH-10725 dated 31.07.1980, with register of company Delhi & H.R. (New Delhi). The name of the company was changed to Shree Jagdambe Paper Mills (p) Ltd. On 10.02.1994. Now cos constitution has been changed to Ltd. Company on 28.12.94. The company has registered itself with Directorate General of Technology Development, Delhi Ministry of Industry. Government of India for manufacturing of paper & paper Board vide Reg. No. 1020) (89) DLR dated 17.11.1989 for 10000M.T. and
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memorandum for expansion of capacity to 20000M.T. has been filled with SIA as per acknowledgement dated 23.08.94.

BRIEF PARTICULARS ABOUT THE PROMOTERS OF THE COMPANY The project was promoted by Shree Ramesh Kumar Goyal. Shree Murlidhar Jhuthram retired as Director in 1982. After then promoters were Shree Man Mohan Kumar Goyal, The Chief manager of the Board of directors, Shree Ramesh Kumar Goyal, Managing director, Shree Suriender kumar Goyal, Director (sales), Shree Anil Kumar Goyal, Director (Production), Shree Praveen Kumar Goyal, Director (personnel). Shree Man Mohan Kumar Goyal started his carrier, at the age of 17years by joining his fathers Brick kiln business. Being eldest son of the late. Shree Ram saran dass Goyal he was involved in planning & managing all business activities of the family. He hands of experience in running Brick kilns, manufacturing of steel utensils, ice, managing agency, business of cement & match boxes, petrol filling station & all properties. In 1980, he came into the manufacturing of paper & now he is an established industrialist with a 14years of experience in paper manufacturing. Shree Manmohan Kumar Goyal resigned from directorship of the company w.e.f. 15.12.2001 & shifted to Gujarat to look after day to day affairs of sister company Shree Sita Ram Mills Ltd. Shree Suriender Kumar Goyal. B.A. started his carrier by joining family business. Later he was instrumental in setting up of M/S Aggrawal Ice factory in 1982, hes joined the captioned company as a Director (Sales) and now he is working as chairman of the company. He has been instrumental in developing network of dealers agents and monitoring sales. Shree Anil Kumar Goyal CA started his carrier by joining SJPML in the year 1984. Being n accountant by profession he could read analyze & plan the business to make the operation co effective and at present he is Executive director of the company. Shree Praveen Kumar Goyal, B.A. started his career in 1981 at the age of 18 years and joined SJPML, due to his strong human relation traits he was also given the responsibility of handling personnel functions and induced as Director. In 1984 Shree Praveen Kumar Goyal resigned from directorship of the
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company w.e.f. 15.12.2001 & shifted to Gujarat to look after the day to day activities of sister company M/S Shree Sita Ram paper mills ltd. Bharuch. Today he is not working in the organization.

HEIRARCHY OF DIRECTORS

Sh. Suriender kumar Goyal (executive director)

Sh.Anil kumar Goyal executive director (finance)

Sh.Rakesh kumar Goyal (director)

Sh.Manoj kumar Goyal(director)

Mr.Sameer Goyal ( director)

Ms. Manju Goyal (director)

LOCATION OF MANUFACTURING PLANT & ITS BRANCHES SJPML has free hold on land measuring 126 kanal 13 Marla, situated at Begu Road, Sirsa site is on the mettled road about 2 kms. From Sirsa city in the municipal limits nearest railway station 3 kms. At Sirsa. Works sector: Begu Road, Sirsa (Haryana). Sector: Medium Scale Industry. Registration office: 161, Deepali, Pitampura, Punjabi Bagh, Delhi. Branch: Shree Jagdambe paper Mills Ltd., 11, Jeet Building, Phase 1st, Delhi.

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NAME OF THE SISTER CONCERN a) Shree Sita Ram paper Mills Ltd. Taluka Jagadia, Village Nanasanja, District Bharuch (Gujarat) Shree Sita Ram Paper Mills Ltd., incorporated in the year 1995 is sister company of Shree Jagdambe paper Mill Ltd. Involved in manufacturing of multi linear craft paper having production capacity of 20000MT. p.a. b) Shree Amba Paper (p) Ltd. 73/4, Village, Ghavera, Delhi. c) Ahmadabad chemical trading (p) ltd. 44, Ekjot apartment, Madhuban chowk, New Delhi. Both of the two companies are the sister company of Shree Jagdambe paper Mills Ltd. Based at Delhi involved in trading for various type of paper 7 paper board. OUR CUSTOMER A loyal customer base is SJPML biggest quality endorsement. The institutional customer comprise brand enhancing names like Action shoes, Microtech, Lakhani shoes Ltd., among others. CUSTOMER SERVICE The SJPML takes the holistic approach in the business of making paper & customer relationship enjoys a priority in this. The SJPML customer service stands for dependable quality, every possible choice and anytime product availability. Convenience; Provide customers the benefit of staggered delivery so that they do not need to keep a large inventory at their end; this maximizes working capital efficiency. Customer service; we weave the marketing and manufacturing functions together. Quick & potential delivery has added to customer convenience.
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Procurement of Raw material; Main raw material for the company is corrugates bases/ waste paper which are purchased through local suppliers. Company has adopted inventory control system for purchase of raw material. Decision for making purchase is taken by the executive Director (purchase) after considering the incidents of requirement of raw material received from the production department. Director (purchase) is assisted by team of purchases, who calls quotations from different supplies of raw materials. Raw material Management. Director ( purchase) after considering lowest quotation along with sample of raw material place order or supply of raw material. CORRUGATED PAPER Corrugated paper comes in two forms, lined and unlined. Lined corrugated paper is rigid layered paper that encloses a fluted layer between one or two smooth liner layers. The fluted layer provides added strength. Paper we know as cardboard is actually lined corrugated paper.

Unlined corrugated paper consists of the fluted layer only and is flexible. Corrugated paper products are lightweight, versatile and durable. Lined corrugated paper is used in a variety of applications, most notably for making boxes used to ship and store materials. Lined corrugated paper may also be used for product displays in stores, childrens toys such as blocks and playhouses, and even for contemporary furniture. Unlined corrugated paper is usually used for protecting delicate materials during shipping or for decoration. Unlined corrugated paper was the first type of corrugated paper invented in the late 1800s for use in shipping hurricane lamps. Decorative unlined corrugated paper comes in many bright colors and is most commonly found bordering the bulletin boards of institutions like schools and hospitals. Lined corrugated paper boxes come in different strengths and are rated by the amount of weight they can withstand. If you look on the bottom of a corrugated paper box, you will see its edge crush test rating the amount of weight a
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given box can withstand before its edges will buckle. Most lined corrugated boxes are single wall, or comprised of only one layer of corrugated paper. Added layers of lined corrugated paper result in stronger boxes or other products. Lined corrugated paper can be printed with bright graphics and colors and is commonly used to make sturdy, temporary product displays for stores. It is also used to make furniture, such as stools for seating, coffee tables, or storage boxes of various types. The clean look of lined corrugated paper can fit well with a modern, industrial aesthetic. Corrugated paper products are also easily recycled when no longer needed or wanted. In fact, most corrugated paper is made, at least in part, of recycled paper. The fibers used to make lined and unlined corrugated paper originally come from wood pulp. Most corrugated paper used in North America is manufactured in the United States and Canada.

Corrugated Paper The clean look of lined corrugated paper can fit well with modern, industrial aesthetic. Corrugated paper products are also recycled when no longer needed or wanted. In fact most corrugated paper is made, at least in part, of recycled paper. One of the most common crimped designs is corrugated, but paper crimps do not just make corrugated paper. They can be used to emboss any pattern.

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CORRUGATED BOX

CORRUGATED CARTOON BOXES.

Corrugated cartoon boxes. Our corrugated boxes are manufactured from paper that has been treated to acquire the requisite thickness and strength to withstand the stress during
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transport and handling. They are available in many sizes and can also be manufactured as per clients requirements. We offer a wide range of Corrugated Boxes mainly used in industries including food, cosmetic, medicine and electronic. Depending upon techno-commercial values, these boxes are manufactured using card boards and delicate sheets of paper. These are available in varied thickness and are useful in packing groceries, glass, earthen ware, small consumer goods and many more. Besides, they are helpful in transferring goods too. We also manufacture cartons as per the clients requirement. Kraft Paper Kraft paper is used to manufacture corrugated boxes owing to their thickness, durability and endurance that enable them to sustain weight. Virgin craft paper

Virgin Kraft paper is made from 90% long fiber unbleached pulp and has a Busting factor (BF) of 35. It is best suited in making paper bags and corrugated boxes.

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Semi craft paper

Variety of semi craft paper are produced ranging from 16 BF to 22 BF in different reel sizes

MEDIA CRAFT PAPER

It is secondary quality Kraft paper used for wrapping and making corrugated boxes, the BF of this paper ranges between 12 to 14 BF

The Kraft corrugated boxes exported by us are widely demanded in the market owing to their durability, quality and flawlessness. Designed to perfection, these
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Kraft corrugated boxes are manufactured as per the requirements and specifications of our esteemed clients. Further, these are available in various different sizes, shapes and colors and offered in market leading prices.

MANUFACTURING PROCESS Paper is manufactured using corrugated cartoons/ waste paper, chemicals and water. The manufacturing process can be bifurcated into 4 stages. A. PULPING. Corrugated boxes/ waste paper after cutting & dusting feed in to the pulpers for pulping. The waste paper can be directly be beaten and washed in the beaters for pulping.

B.PREPARATORY TREATMENT OF STOCK. Pulp, as it, is not fit for being converted into paper and must undergo some prepatory treatment depending on the end product. Before going to the paper machine, the stock must be prepared uniformly with a fixed thickness 7 be screened & refined by crushing so that it may be reduced into fixed thickness with uniform properties in a uniform speed. The treatment is carried on in apparatus called refiner & sizing agents like alum, dyes, loading materials are added in the process to develop its strength. The main flow of pulp which is freed from tailings in the vibrating screen & fine pulp sieved out from the ailing are put together & sent to the centre cleaners which work quite efficiently in removing fine dust. C.PAPER MAKING. Prior to going into the paper making machine the stock which has gone? Through necessary treatments is diluted in the mixing box down to the required consistency with the use of back water generated in the paper making process. Similarly speaking, the paper making machine performs its function in this way. In the pulp stock which goes over travelling wire the fiber is separated fromwater & sheets of paper is formed. The wet sheet is pressed dries and smoothened by going through several sets of roll machines. To get MG Kraft paper, the sheet is then passed through M.G dryer who imparts glaze to the
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paper. Paper is finally wound up by means of pop reel machines. The output of a paper machine is determined by the trimmed with of paper, the speed of machine and gram mage of paper.

D.FINSHING OF PAPER Paper and board intended for sale in reels and cut sheets is rewound & cut to certain fixed measurements. Defective paper & board sheets are removed. The rejected produced is returned to pulping section & mixed into the main flow of pulp stocks.

DISPATCHES Reels so prepared is then wrapped by plastic cloth and dipped with the help of plastic strips supervisor on duty mark a serial no., size & gram mage on each reel for the purpose of identification. Wrapped reels are then weighted through electronic weighing scale. Weight as shown on display is written on the reel by the supervisor. Supervisors also maintain the register in which he entered weight of each reel along with serial no. of the reel. Reel is then shifted in finished goods godown from where it is dispatched as per orders received. Complete record of reels manufacturing & reels dispatched are forwarded to account office.

QUALITY CONTROL SJPML has got a well equipped lab with all the latest equipments for test core value, Tear factor, Burst factor, consistency, degree SR gram mage etc.

NETWORKS OF SALES SJPML has a wide network of dealers spread all over India, which carries mostly all the states of India.

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CLIENTS

SJPML keeps stringent control over quality for consistent quality which has helped it have clients like:

a. b. c. d. e. f. g. h. i. j. k. l.

Microtek, Parwanoo Action shoes, Delhi H.P cotton textile Mill Ltd. Hissar. Baldeo Mange Lal, Ujjain Patel paper box, Udaipur Perfect pack Ltd. Faridabad Lakshmi Group of Industries, Faridabad Ravi sons, Chandhigarh Kamal boxes, Jalandhar. Jay Ambe overseas, Surat Industrial Packers, Daman Meiyappa papers, Daman

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SHREE JAGDAMBE PAPER MILLS LTD. SIRSA PROCESS FLOW DIAGRAM

Waste paper Along with 12% Normal moisture Stapple pins & Adhesives
VACCUM BOXES CONVEYOR PRESS NO.1

L PULPER

WIRE PART

PRESS NO.2

SAND TRAP

HEAD BOX

DRYER

DUMPING CHEST CENTI CLEANER

M.G. DRUM

HIGH DENSITY CLEANER FLOW BOX

TURBO

MACHINE CHEST REWINDER MIXING CHEST NO.2 FINISH PRODUCT REFINER

THICKNER

Solid waste to boiler/ET

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BOARD OF DIRECTORS. 1. 2. 3. 4. Manoj kumar Goyal. Rakesh kumar Goyal. Sameer Goyal. Ms. Manju Goyal.

DETAILS OF DIFFERENT DEPARTMENTS

FINANCE/ ADMINISTRATION Department Mr. Anil Goyal Executive Director is a CA has a distinguished carrier in the area of corporate Finance & brings with him a unique combination of skills from Accounting, Costing, Secretarial services & Finance. He started his carrier in 1985 & added to his profile significant skills in the areas of Taxation, Costing, Insurance, Working capital management, project funding by way of debt from multinational agencies raising equity etc. over since he joined SJPML has been instrumental in bringing in the financial discipline & analysis that helped the management to take various cost effective decisions. He has made significant contribution in identifying the financial institutions for sourcing the funds for the mill development plan.

ACCOUNTS DEPARTMENT Accounts department has been supervised by Shree Anil kumar Goyal Executive Director under assistance of account manager & account assistances. Under his supervision and new ideas company has modern and high technology accounting software & well established computer lab.

PURCHASE DEPARTMENT Purchase of raw material is supervision by Shree Manoj Goyal, Director Purchase, and Director Purchase is assisted by purchase manager & raw material quality management.

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PRODUCTION DEPARTMENT Production is supervisioned by Shree Rakesh Goyal, Director Production. He is assisted by the production manager and plant supervisors. He is the key contributor to the process of developing the quality assurance and research and development functions in the organization. His contribution in customer development and customized product development has been unparalleled. Later on with his ability in technical and administration skills took over the role of managing the production operations. He is specialized in the areas of technical sales, customer service and product development. He is the critical In-house resource for various learning events being conducted in various technical areas.

DISPATCH DEPARTMENT Dispatch department has also been supervised by Shree Rakesh Goyal. He is assisted by supervisors & dispatch clerks.

HUMAN RESORCE DEPARTMENT SJPMLS H.R. processes are routed in business priorities, market realities and long- term oriented inherent in them are the qualities like innovation, continuous learning & improvement in the work processes, talent identification and nurturing. SJPML through its concerted efforts aims at becoming the most preferred employer in the industry and create one of the best places to work in the manufacturing sector. Our HR processes stem from the faith in human potential and its creative power. Our work cultures that enable its HR enjoy professional freedom. Our learning events take places as a part of the process of institutionalization of continuous learning. The compensation package of the SJPML matches with the industry standards with the qualities of flexibility valuing talent and encouraging carrier growth. Our performance management system encourages its HR to add value & increases their contribution to the growth of the organization on a continuous basis thereby guarantees timely reward & recognition.

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MAINTAINANCE DEPARTMENT Extensive monitoring analysis and control would optimize mechanical/ electrical systems, manage energy usage, pinpoint problem resources and avoid unnecessary downtime. For electrical maintenance SJPML has flexible solution with comprehensive energy consumption logs and immediate access to a large range of electrical parameters, presenting information remotely via the companys existing computer network. Power management offered the sight set of capabilities with its energy management software installed on distributed workstations and a network of intelligent power meters. The system proved to be a valuable aid in the design and operation of electrical installations. Further operational savings are being realized, especially related to fast alarm response and the systems modular architecture facilities affordable growth of all energy management applications.

ENERGY CONSERVATION SJPML has always been concerned and committed to improve the mill energy performance levels continuously. Basically because it realizes that natural energy resources available are finite with no way of replenishing the quantum consumed and also heavy investment are required for energy sector for meeting the demands and these resources are to be consumed with prudence to consume with prudence to conserve the energy. For SJPML, conservation of energy has become a way of life. It reflects and manifests itself in the entire Endeavours. SJPML realizes that this not only is a means to improve, competitiveness, enhance profitability but also is a source of moral responsibility. To achieve the above objective of energy performance SJPML has constituted an independent energy conservation department and engaged reputed proven energy audit 1990-1991 to2008-2009 for detailed energy audit with mass & energy balance and in 2007 for energy audit. These studies are conducted for identification & implementation of energy saving proposals, reduction in energy cost & wastage with improved housekeeping and monitoring practices. The department is bestowed with the functions of bringing awareness of importance of energy to the employees by conducting in-house training programmed by organizing energy conservation week celebrations, energy conferences etc.
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The energy conservation department prepares and monitors daily energy performance reporting system. SJPML has installed energy meters & measurement device for all energy inputs like power, water, steam, fuels, compressed air & condensate return. The energy performance report indicates the figure of figures of today and till date against best achieved norms for immediate comparison & for identification of variance on total & specific energy consumption figures of various sections of the mill for all the above energy inputs. These daily reports are put for specific discussions on energy performance in daily production meetings for taking effective corrective actions. The detailed monthly energy performs report are also presented in monthly executive performance review meeting for identifying areas of improvement & for making, necessary exclusive decisions.

ENERGY CONSUMPTION SJPML, being an integrated pulp and paper mill, consumers steam & power for the production steam is generated not only for the process, but also captive power generation. The fuel for steam generation is husk; the solid waste dust generated in the process is also used as fuel. The mills has operating T.G. sets for co-generation, Double- Extractioncondensing type of 12MW capacity & full condensing set of 5MW. Capacity. The 12MW & 5MW steam turbo generator sets are operated continuously. In the year 2006-2007 the fuel consumed in the boilers for process team requirements & the power generation is a total of 1927274 tons out of which 108579 tons is used for process steam 88695 tons for pure generation. Energy conservation is an ongoing process. Realizing the need for energy conservation .SJPML puts its efforts for improving the energy performance on continuous basis. Description of energy conservation scheme Installation of energy efficient booster water pump in paper machines. Mill water header pressure is maintained at 2.6kg/cm2. The pressure could not be reduced to 2.2kg/cm2 due to bleach plants pressure requirement at 2.5kg/cm2
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pressure are installed in bleach plant& mill water pressure is reduced to 2.2kg/cm2 investment is Rs.6.5 lakh, savings Rs.4.43 lakh p.a. & simple payback period is 8 months. Conversion of non-lubricating type compressor into lubricating type and installation in paper machines. Compressors are utilized in power block area. The removed compressor is converted to non-lubricating type installed in paper machines there by utilizing four numbers of compressors in that area. Installation of energy efficient vacuum pumps in paper machines Paper machines commissioned in 1966 have old version vacuum pumps of N14Emodel. Two pumps are replaced with Nash make energy efficient pumps of 904M2 Model.

SAFETY AND ACCIDENT PREVENTION 1. The safety and accident prevention activate at SJPML are monitored by a safety committee with equal no. of members from management & workmen. This committee is in existence since 1976. There are three department level safety subs committees, which look into local level safety & al prevention activities in collaboration with committee and safety department. The safety department is named by qualified safety officers & other administration assistance. 2. Accident reporting and investigation; All the accidents and near miss accidents are reported & investigated & reviewed by the safety committee. The accident data is analyzed & safety perform is measured monthly, quarterly & yearly & communicated to concerned departments & higher authorities. 3. Identification of Hazards; Frequent inspections are being carried out by using checklists. The safety committee & sub-committees also inspect the plants regularly.

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4. Safety systems: Safety work permit system and danger tag system are in use for carrying out repair & maintenance work, hot works in fire prone areas, entry into confined space, work on roof, excavation, etc. 5. Safety Training: General& need based training is given regularly to all employees including continuous workmen. 6. Motivation: National safety day is celebrated every year. Many competitors like slogans, Stories, posters, essays, etc. are organized on the occasion of National safety day celebration every year. An accident reduction contest is organized. 7. Publicity; Posters, slogans, Bulletins, etc. are displayed throughout plant safety magazine is published. 8. Personal protective equipments; Shoes are provided once in a year to all employees including contract workmen. Helmets are provided to all employees all other personal protective equipments is issued based on the need some equipment like self contained breathing apparatus, canister masks, PVC suits etc. are kept in the departments for use whenever & wherever those are needed. 9. Emergency planning and preparedness & response emergency plan is made & copies distributed to all concerned personnel periodic mock drills are being organized. Emergency control centers established. Active role is being played in preparation of offsite emergency plan being made by district emergency authority. 10.Occupational Health; Occupational health is established1 doctor and 2 nurses are working in occupational health centre. It is operated round the clock periodical medical exams are being carried out for the identified personnel. This includes xrays, lung function test, audio metric stool examination, eye examination as per the requirement under FACTORY ACT 1948.

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ENVIRONMENTAL CELL AT SJPML SJPML has established a separate dedicated ENVIRONMENT CELL for water & air pollution abandonment which indicates the commitment of the industry in controlling pollution. ENVIRONMENT LABOARATORY Environment cell is having an exclusive environment lab equipped with modern monitoring/ testing facilities. Testing facilities available at environment lab. Water and waste water testing. AOX testing. Stack monitoring facilities. Ambient air quality monitoring. Meteorological station with automatic data logger.

The environmental issues are reviewed in the daily coordination meeting chaired by Vice President (operations).

WATER POLLUTANTS AND TREATMENT MEASURE WASTE

WATER TREATMENT The main pollutants in the effluent discharged are suspended solids, B.O.D. and C.O.D. etc. The waste water from the mills is treated In Effluent treatment plant consisting of primary treatment to remove the suspended solids and secondary treatment (Activated sludge process). to remove B.O.D &C.O.D. & then treated by land treatment process to remove even the color of the effluents SJPML is the only mill discharging effluents upstream & drawing water from downstream.

PRIMARY TREATMENT Waste water is passed through bar screens & perforated screens to remove any foreign material & pumped to primary clarifiers (2NOS) of each 7500 M 3T the

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settle able solids are removed from the bottom and clarified effluent from the top of the clarifier is taken to secondary treatment.

SECONDARY TREATMENT (ACTIVATED SLUDGE PROCESS); The effluent from the primary treatment is taken to an aeration tank 25000 M volume. There are 11 NOS of mechanical surface aerators, each of 75 HP nutrients like urea & SSP (single super phosphate) are closed into the aeration tank as food to the bacteria. From the aeration tank the effluent is taken to the secondary clarifiers (2NOS) of 6000 M3 each. The effluent after secondary treatment is pumped to land treatment.

LAND TREATMENT: It is well recognized fact that top layer of the soil maintains a micro environment within which soil Flora & Fauna decompose verities of organic matter. Thus, top layer of soil can be utilized for the treatment of biodegradable organic waste water. Several conventional (natural, physical, biological) treatment processes occurs in land treatment. Considering such capability of land for treating wastewater land treatment is well recognized as living filter all over the world. As wastewater is discharged on land for treatment part of it in filtrates downwards & part evaporates & part gets transpirated by plants. The remaining portion gets utilized under the influence of land as living filter. The removals of constituents from waste water by filtering and straining action of soil are excellent in RI system B.O.D. T.S.S. & fecal coli forms are almost completely removed. It is also observed that the effluent after percolation through land is void of color. The soil seems to be working as color removal media which is otherwise prohibitively expensive treatment. This is an additional benefit achieved through land treatment.

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AIR POLLUTION CONTROL MEASURES In paper manufacturing process steam is required at various stages. For generating the steam the mill has installed 5 coal fired boilers & 3 recovery boilers where in the black liquor is fired in the furnance to recover & refuse the chemical in the process. The mill also installed 1 rotary lime kiln where the lime sludge (caco3) IS BURNT TO GET BURNT LIME (cao) to reuse in the caustisizing process.

ELECTROSTATIC PRECIPITATORS The emission from the boilers contain dust particles (suspended particulate matter SPM) & contains gases like sulphur dioxide & hydrogen sulphide etc. In order to control the dust particles & gases from the boilers the mills has installed most modern sophisticated Electro static precipitators as pollution control equipment to the entire 9 stack

INCINARATION SYSTEM: The company has taken altogether different approach to eliminate odour completely and installed. Non condensable gases handling system consisting of collection, transportation & incineration of NCG. The system is (first of its kind) in pulp and paper industry in India to control odour problem. Thus the mill is fully conscious of its social obligations towards pollution control measures & striving hard and putting all its sincere efforts for minimizing the pollutions from this.

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ANALYSIS AND INTERPRETATION

Inventory management at Shree Jagdambe paper mills Analysis of the process Method adopted Company works on FIFO method i.e. first in first out. The material which comes first will go first in the process. If there is any shortage of raw material than company will use LIFO method i.e. last in first out. Main raw material for the company is corrugates bases/ waste paper which are purchased through local suppliers. Company has adopted inventory control system for purchase of raw material. Decision for making purchase is taken by the executive Director (purchase) after considering the incidents of requirement of raw material received from the production department. Director (purchase) is assisted by team of purchases, who calls quotations from different supplies of raw materials.

TESTING / CHECKING OF RAW MATERIAL After receipt, consignment of raw material is weighted at companys own weighing bridge. Weight at companys own weighing bridge is tallied it the weighing slip as produced by the supplier of raw material. Bill of the material is also collected by the gate office of their necessary inward material entries. Weight of raw material is tallied with the weighing slip / bill of the supplier. If the weight is not tallied with the weighing slip/ bill due to short, it is immediately informed to supplier driver. A written consent on the back side of the bill is taken for information of shortage to supplier. Vehicle is then allowed to go to raw material go down for unloading with prior intimation to quality checking supervisors. Raw material quality supervisors got unloaded the material in his presence. Sample from different bundles of raw material is taken for checking of quality/ moisture etc. If, moisture is found in any bundle, sample of same is handed over to laboratory technician who tested the percentage of moisture in the material. A report is being prepared by lab technician for moisture another prohibitive
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content like plastic strips, kaccha material, reel core material etc. present in the lot of raw material. Report is also signed by lab in charge as well as a supplier of material weight of moisture/ other prohibited contents present in the material is deducted from total weight of material. Lab report so prepared is forwarded to Director (purchase) for his information and signature purpose. Copy of the report is then given to supplier for raw material. If, the supplier does not accept weight of moisture/ prohibited contents hes allowed to take his material back. Copy of the report is attached with bill of supplier & handed over to gate department for entries in their inward receipt registration of different type of raw material are as under: 1. 2. 3. 4. Corrugated cartoons ( fresh ) Rs.8000/- PMT Corrugated cartoons ( used ) Rs.7000/- PMT Corrugated cuttings ( fresh ) Rs. 6800/-PMT Corrugated cuttings ( old ) Rs.6500/-PMT

ABC analysis at Shree Jagdambe paper mills ABC Analysis

According to this analysis, there are three categories of inventory items A, B, and C type. Depending upon their percentage of consumption. The significance of this analysis is that a very close control is exercised over the items of A group which account for high percentage of costs. Less rigorous control is adequate for category B. Very little control would be sufficient for category C.

Criteria Quantity Annual usage Control Ordering Safety Stock

A Type 10% 75% Very strict Daily/Weekly Less

B Type 20% 15% Moderate Monthly Moderate

C Type 70% 10% Less Yearly High

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Policies of A group items 1. They should be ordered more frequently to reduce capital lock up at a time in inventories as 15% of items cost 65% of total value. 2. The purchasing department should make the maximum efforts to expedite and delivery of these items are to be stored as few in number as possible. 3. The purchase of these items should. Be with top officials to ensure prompt services from the supplier. 4. The stock report of A items should. Be sent more frequently, say that at least once in 15 days. Policies for B group items 1. These account for 20% of total quantity and 20% of the total value. 2. Order quantities, re-order stocks and safety stock should be fixed and revised for B items at least one in every 4 to 6 months. 3. B items should be ordered less frequently than A items. Policies for C group items 1. C group of items account for65% of quantity and hardly 15% of value. 2. Larger quantities can be brought at a time, as total investment will be lest. 3. Large quantities can be reduced considerably if orders are placed once or twice a year. 4. The source of supply can be one or two based on their reliability.

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INVENTORY MANAGEMENT AN INTRODUCTION

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Comprehensive study of inventory management

INTRODUCTION Industrialization has highlighted a number of problems one of which is the problem of cost reduction and cost control. Since inventory accounts for 30-70 per cent of the total investments in the manufacturing industries, it becomes necessary to manage and control inventory efficiently for cost reduction and cost control purpose as well as for greater production and smooth running of the industry. In India it has become more important to control inventory because of the scarcity of capital resources. Inventory is the lifeblood of the manufacturing industries. But an excess or shortage of inventory is harmful to the smooth running of a concern. Today the efficiency and state of industrialization of a country is known by the method of inventory control because poor or mismanagement of inventory is harmful not only to the industry, but to the country as well as a whole as it effects the economic, social, and political environment of the country. About a decade ago, in general, those responsible for administration and management in public and private sectors hardly realized the importance of Inventory control. To-day perhaps there is not a single manager in an industry who does not realize the necessity of scientific control of inventories for greater efficiency, cost reduction and productivity. In much organization maximum importance and greater attention are being given to inventory control. The increasing specialization in industries, the ever widening range of equipments, changing tastes, temperaments and highly sophisticated attitude of purchasing public have focused the importance of the management of inventory in modern times . Now it has been recognized that inventory is a major factor contributing it has been recognized that inventory is a major factor contributing to fluctuations in business activity and is by far the largest element of cost in most industries. It is one of the areas in which considerable economies can be affected.

Inventory means stock i.e. stock of goods in which business regularly deals with. For a trading organization finished goods are kept in stock for manufacturing organization raw inventory and finished goods are kept in godown as stock.

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The dictionary meaning of the word inventory is stock of goods. But, inventory means such type of asset which will be disposed of in future in the ordinary course of business. According to Bolten S.E. Inventory refers to the stock- pile of the product a firm is offering for sale and the component that make up the product. In other words, the inventory is used to represent the aggregate of those items of intangible assets which are: i. ii. iii. Held for sale in ordinary course of business. in the production for such sale To be currently consumed in the production of goods or services to be available for sale.

Inventory plays an important role in the cost of production of any item. Inventory management means framing rules and regularizing the various activities regarding receipt, storing and use of inventory in such a way that a continuous flow of inventory is maintained in the process of production. Origin of the word inventory The word inventory was first recorded in 1961. The French term Inventaire, or detailed list of goods, dates back to 1415. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of supply network to protect the regular and planned course of production against the random disturbance of running out of inventories or good.

What is Inventory? In a merchandising firm, either wholesale or retail, inventory is composed of the items that have been purchased in order to be resold. In a manufacturing company, there are three different types of inventory. Raw materials: Raw materials are goods acquired in a relatively undeveloped state that will eventually compose a major part of the finished product. For a computer assembler, raw materials inventory is composed of plastic, wires, Intel chips etc.
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Work in progress: Work in progress consists of partly finished products. When you take a tour of a manufacturing plant, you are seeing work in progress inventory. Finished goods: Finished goods are the completed products waiting for sale. A completed car rolling of the automobile assembly line is part of finished inventory.

SUPPLIER

SUPPLIER
Raw materials Purchased Parts and materials
WORK IN PROGRESS

SUPPLIER

FINISHED GOODS

WAREHOUSE CUSTOMER DEMAND

WAREHOUSE CUSTOMER DEMAND

WAREHOUSE CUSTOMER DEMAND

Why inventory control necessary? Inventory form an important part of the cost of the product and, therefore, proper control over inventory is necessary from the time orders are placed with the suppliers till they are actually consumed in plant and office operation, or have been sold as merchandise. An efficient system of materials control will lead to a significant reduction in production cost. Control over materials is also necessary to assure a steady supply of each item of inventory.

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TYPES OF INVENTORIES

MRO Inventories

In-process Inventories Transaction Inventory

Speculative Inventory Precautionary Inventory

production inventories Nature of inventories

Finished goods inventories

Use of Materials

Need for Inventory Inventory is required to be maintained due to following reasons: 1) Gestation period: Generally there is time gap between the period we place order and the period when we receive the goods, due to which inventory is required to be maintained. This gap may be either due to transportation period and processing period. 2) Fluctuation of demand: In order to meet the market demand it is necessary to have some goods in stock as in market demand or supply rarely match. 3) For smooth production process: In order to have uninterrupted production process it is necessary to have sufficient inventory of raw material. 4) Lower prices: Raw materials, spares and other components may be purchased in bulk to take the advantage of a special offer at lower prices or a temporary recession in prices.

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OBJECTIVE OF INVENTORY MANAGEMENT A firm wishing to maximize profit will have following objectives: . Maximum customer service. . Low -cost plant operation. . Minimum inventory investment.

REASONS FOR KEEPING INVENTORY

MEETING CHANGING DEMAND WITH FLAT CAPACITY

DEMAND CAPACITY --------------------------------------------------------------------------------STOCK BUILD PULL FORWARD

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Demand forecast error Unpredictable or late deliveries from suppliers Minimum supplier order quantity Supplier delivery interval Stocking methodology Reorder interval & quantity Strategic stocking Purchase price advantage Lead-times offered to customers are shorter than supplier lead-times consignment stocking Minimizations of delivery costs

ELEMENTS OF INVENTORY COSTS 1. PROCUREMENT COST. 2. CARRYING COST. 3. STOCK-OUT COST.

INVENTORY PROCUREMENT COST INCLUDES: .Cost of order processing i.e. use of stationary and services cost of staff etc. . Cost of transmission of an order i.e. cost of postage & follow-up messages through telephone, fax, etc. . Cost of transportation i.e. freight, transit insurance, protective packaging, etc. . Cost of invoice pricing i.e. checking, approval, book entries & payment procedures.

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. Cost of goods receiving, handling, inspecting and entry in the stock register/computer. . Cost of final feeding of data in Logistics information system.

INVENTORY CARRYING COST Includes: Space rent for the storage of goods. Cost of working capital locked in the inventory. Cost of insurance goods. Cost of spoilage in the quality of goods in storage, breakages in handling. Cost of obsolescence of goods or depreciation.

STOCK-OUT COST Internal shortage due to Lost production. Delay in completion date.

SUPPLY AND DEMAND PATTERNS If supply met demand exactly, there would be little need for inventory. Goods could be made at the same rate as demand, and no inventory would build up. For this situation to exist, demand must be predictable, stable, and relatively constant over a long time period. Demand for most products is neither sufficient nor constant enough to warrant setting up a line-flow system, and these products are usually made in lots or batches.

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INVENTORY COSTS The following cost is used for inventory management decisions: . Item costs. . Carrying costs. . Ordering costs. . Stock out costs. . Capacity associated costs.

Capital costs

Storage costs

Risk costs

Money investedin inventory is not availablefor other uses and as such represents a lost opportunity cost.

Storing inventory requires space, workers and equipments. As inventory increases, so do these costs.

The risks in carrying inventory are: Obsolescence. Damage. Deterioration.

ITEM COSTS Item cost is the price paid for a purchased item, which consists of the cost of the item and any other direct costs associated in getting the item into the plant. These could include such things as transportation, custom duties, and insurance.

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CARRYING COSTS Carrying costs include all expenses incurred by firm because of the volume of inventory carried. As inventory increases, so do these costs. They can be divided in to three categories ORDERING COSTS. Ordering costs are those associated with placing an order either with the factory or a supplier. The cost of placing an order does not depend upon the quantity ordered. STOCKOUT COSTS If demand during the lead time exceeds forecast, we can expect a stock out. A stock out can potentially be expensive because of back-order costs, lost sales, and possibly lost customers. Stock outs can be reduced by carrying extra inventory to protect against those times when the demand during lead time is greater than forecast. CAPACITY-ASSOCIATED COSTS When output levels must be changed, there may be costs for overtime, hiring, training, extra shifts, and layoffs. These capacity-associated costs can be avoided by leveling production, i.e., by producing items in slack periods for sale in peak periods. However, this built inventory in the slack periods.

The nine groups in which inventory items are classified by D.N. Sarkar are as follows: 1. Raw Materials- Materials primarily required for manufacturing finished products obtained through (a) purchases from suppliers/outside parties, (b) produced by other manufacturing units of the same concern taken into stock crediting to full value to other units. Raw materials of one industry are/ may be finished goods of another. 2. Packing Materials- Materials required for packing the finished products in accordance with the nature and quantity and the ways and means of the distribution of the finished products after packing.

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3. Consumable Stores- Materials primarily used for producing and/ or packing purposes which are not direct components of the finished products but necessary to manufacture or to pack, the required finished products in the required saleable condition and manager. This item is referred to as indirect material. 4. Loose-Tools Materials used for the purpose of manufacturing the finished products and/or for the machine used for manufacturing purpose where the material has a separate entitlement and is not a component part of the plant or machinery. This item in some industries is referred to as Spare parts or simply Tools 5. Fuel Stock The fuel stock may be defined in the same line with consumable stock as the fuel stock is primarily used for oven etc. and as such, it is the necessary material to run manufacturing processes but does not in any way constitute a part of the finished product. 6. Finished Stock Where all sorts of manufacturing processes including packing up to saleable condition in accordance with the concerns own packing specification, condition and manner completed in respect of the stock waiting for dispatch to the distribution department, sale depots, agents/ or customers. 7. Partly finished Stock The stock where some manufacturing process/operation has been made in it, but which is not to be sold as complete or finished product of the concern. It constitutes partly the necessary parts/elements of the product held up in accordance with the production planning/order or for some other reasons or routines It is interesting to note that where a concern purchases only the partly finished products and manufacturers the finished products with them or out of them, the materials thus purchased are not in the category of partly finished stock but are to be called as raw materials. Partly finished stock in some cases may be called as semi-finished stock or productive stock etc. 8. Work in-progress Where the materials having a certain percentage of manufacturing process/ operation, are lying in such a position in the production shop that the quantity of the materials may be gauged/weighed separately and in total, but they cannot be separated exactly in accordance with their respective specifications and manufacture as issued from stores department in original through requisition.
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9. Unused Stock Where the materials are not in a position/condition to be used either in the manufacture of finished products or in any other way, the stock being called as wastages, unused, scrap or defective, may be sold or destroyed. It is not to be considered as Stock.

FUNCTIONS OR IMPORTANCE OF INVENTORY MANAGEMENT 1) 2) 3) 4) 5) 6) 7) Effective use of financial resources. Economy in purchasing. Uninterrupted production. Protection against material losses. Ascertainment of results. Eliminates redundant inventory. Provides information.

DANGERS OF EXCESS INVENTORY Excessive inventory and under inventory both are harmful to the economic life and health of the concern. Therefore, the purpose of the inventory management is to keep the stock in such a neither way that neither there is over-stocking nor under-stocking. In case, under-stocking or shortage of inventory, the firm will be deprived of the above mentioned advantages and will face difficulties. If, there is over-stocking or excessive inventory, the firm will suffer from the following losses: . Unnecessary investment of funds and reduction in profits. . Increase in holding costs which include interest on capital, rent of warehouse, insurance etc. . Loss of liquidity because inventory is the most liquid asset. . Deterioration in the quality and quantity of inventories due to mishandling or lack of proper storage facilities.

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PURPOSE OF INVENTORY MANAGEMENT INVENTORY MANAGEMENT must tie together the following objectives, to ensure that there is continuity between functions: Companys Strategic Goals Sales Forecasting Sales & operations planning Production & materials Requirement planning.

Inventory Management must be designed t meet the demand of market place and support the companys strategic plan. The many changes in the market demand, new opportunities due to worldwide marketing, global sourcing of materials and new manufacturing. Inventory Management system provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities and communicate with customer: they provide the information to managers who make more accurate and timely decisions to manage their operations. INVENTORY is defined as the blocked working capital of an organization in the form of material. As this is the blocked working capital of organization, ideally it should be zero. But we are maintaining inventory. This inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasing price tendency of commodities or rebate in bulk buying. Traditional supply chain solutions such as Materials Requirement Planning, Inventory control, typically focuses on implementing more rapid and efficient systems to reduce the cost of communicating information between and across the inventory links in the SCM. Customer Oriented market focuses in optimizing the total investment of materials cost and workload for every inventory item throughout the chain from procurement of raw materials to finished goods inventory. Optimization means providing a balance of supply to meet the demand at minimum total cost, inventory level and workload to meet customer service goal for each items in the link of inventory chain. Keeping in view all concerns, the latest concept of vendor managed inventory is used to optimize the inventory. We are entering into vendor managed inventory.
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Annual Rate contracts with manufacturers or their authorized dealers, who maintain inventory on our behalf and supply the items as and when required. VMI reduces stock-outs and optimize inventory in supply chain. Some features of VMI include: Shortening of supply chain Centralized Forecasting Frequent communication of inventory, stock-outstand planned promotions Trucks are filled in prioritized order, e.g. items that are expected to stock out have top priority then items that are furthest below targeted stock levels then advance shipments of promotional items. Despite the many changes that companies go through, the basic principles of inventory Management and Inventory control remain the same. Some of the new approaches and techniques are wrapped in new terminology, but the underlying principles for accomplishing good inventory Management and inventory activities have not changed. The Inventory Management system and the inventory control process provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities, and communicate with customers. Inventory Management and the activities of inventory control do not make decisions or manage operations; they provide the information to managers who make more accurate and timely decisions to manage their operations. The basic building blocks for the inventory management system and inventory control activities are: Sales Forecasting or Demand Management Sales and Operating planning Production Planning Material Requirements planning Inventory Reduction

The emphasis on each area will vary depending on the company and how it operates, and what requirements are placed on it due to market demands. Each

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of the areas above will not be addressed in some form or another to have a successful programme of inventory management and inventory control. Inventory is usually a distributors largest asset. But many distributors arent satisfied with the contribution inventory makes towards the overall success of their business: The wrong quantities of wrong items are often found on warehouse shelves. Even though there may be a lot of surplus inventory and dead stock in their warehouse, backorders and customer lost sales are common. The material a distributor has committed to stock isnt available when customers request it. Computer inventory records are not accurate. Inventory balance information in the distributors expensive computer system does not accurately reflect what is available for sale in the warehouse. The return on investment is not satisfactory. The companys profits, considering its substantial investment, are far less than what could be earned if the money were invested elsewhere.

WHY CHECK INVENTORY??

Too much Inventory Carrying/ holding charges i.e. taxes, Insurance, storage facility, obsolescence, Deprecation, working capital etc.

To little Inventory Too frequent ordering, loss of quantity discount, higher transportation charges
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INVENTORY CONTROL PLANS Inventory control and planning are also of much importance to all the functional areas in the organization, sales; production and finance, where the executives of these areas view inventory requirements from various points of view particularly suiting to their own requirements. A Sales Manager is concerned with maintaining the sales volume and hence, views inventory of finished goods primarily as means to an end while the production manager is more cost conscious and, therefore, wants that the inventory policy should provide sufficient inventories to keep the industry running without any stop or hindrance. Thus, there exists an apparent conflict of interests among the several functional area managers. Under such circumstances, inventory control helps in establishing coordination between them as the primary function of inventory control is to achieve a balance between the economies of holding large inventories and those of holding small inventories.

Pre Requisites of an Efficient Inventory Control system Inventory control is a control on the money invested in the inventory requiring efficient, effective and economic use of the invested money without any hindrance and obstruction to its production and supply operations and, therefore, to achieve this goal, certain definite pre-requisites, a mentioned below 1. An adequate enclosed and well-arranged store room with a definite location for materials. 2. Proper and definite identification of materials. 3. Proper checking on receipts of materials. 4. Adequate and accurate records indicating the amount ordered, apportioned, available, and so on. 5. Periodic physical inventory check. 6. Provision for eliminating slow-moving and obsolete items. 7. Check to ascertain enforcement of routine. 8. Centralization of authority and responsibility with an adequate staff to maintain the function, particularly an experienced store-keeper well acquainted with inventory items.

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Methods of Evaluating Inventory There are four methods accounting uses to cost inventory. Each has implications or the value placed on inventory. If there is little change in the price of an item, any of the four ways will produce about the same results. However, in rising or falling prices, there can be pronounced difference. There is no relationship with the actual physical movement of actual items in any of the methods. Whatever method is used is only to account for usage. First in First out (FIFO).This method assumes that the oldest (first) item in stock is sold first. In rising prices, replacement is at a higher price than the assumed cost. This method does not reflect current prices and replacement will be understated. The reverse is true in a falling price market. Last in First out (LIFO). This method assumes the newest (last) item in stock is the first sold. In rising prices, Replacement is at the current price. The reverse is true in a falling price market. However, the company is left with an inventory hat me be grossly understated in value. Average Cost. This method assumes an average of all prices paid for the price paid for the article. The problem with this method is changing prices (rising or falling) is that the cost used id not related to the actual cost. Standard cost. This method uses cost determined before production begins. The cost includes direct material, direct labor, and overhead. Any difference between the standard cost and actual cost is stated as a variance. TECHNIQUES OF INVENTORY CONTROL Inventory control signifies a planned approach of ascertaining when to indent, what to indent, how much to indent and how much to stock so that cost involve buying and storing are optimally minimum without interrupting production or affecting sales. To solve these problems of inventory management various techniques have been evolved by business firms. These techniques are divided into two categories: I. Modern techniques. II. Traditional techniques.

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TECHNIQUES OF INVENTORY CONTROL

Modern techniques

Traditional technique

Economic order Quantity (EOQ)

Re-order point (ROP)

Fixing Stock levels

Selective Inventory control

ABC Analysis

VED Analysis

SDE Analysis

FSN Analysis

Inventory control Ratios

Two-Bin system

Perpetual Inventory system

Periodic Order System

MODERN TECHNIQUES

ECONOMIC ORDER QUANTITY (EOQ) The optimal size of an order for replenishment of an item of inventory is called economic order quantity. If a firm orders for its total annual necessity of material in one lot and keeps it in stock, its ordering cost will be low but
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carrying cost will rise. On the other hand, in case the firm orders small quantities at different times in more than one order, its carrying cost would be low but ordering cost will increase. Thus, there is an inverse relationship between carrying cost and ordering cost of inventory. In the words of J. Hampton the economic order quantity means the size of an order that will result in the lowest total of order cost and carrying cost for an item of inventory. It is calculated by three methods: Trial and Error Method. Formula Method. Graphic Method. RE-ORDER POINT After determining the optimum quantity of purchase order, the next setback regarding purchase of goods is to know the point of time when the order should be placed so that the firm does, not face a circumstance of stock out. This problem is solved by determining the re-order point or re-order level. It is that point or level of inventory when fresh order should be placed with the supplier for procuring supplementary inventory equal to the economic order quantity so that new supplier for procuring supplementary inventory equal to the economic order quantity so that new supplier will receive just before the stock in hand is out. In other words, re-order level is that level of inventory at which an order should be placed for replenishing the current stock of inventory.

For computing re-order point the following data and information are required: 1. Lead Time 2. Usages Rate 3. Safety Stock Lead Time refers to the time between ordering a replenishment of an item of inventory and actually receiving the item into store. Usage Rate is the rate per day at which the item is consumed in production or sold to customers.
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Safety Stock is defined as the minimum quantity of inventory which a firm decides to keep always protecting itself against the risks and losses of stoppage in production and sales due to non availability of inventory.

FIXING STOCK LEVELS A stock level is a level or quantitative limit which is something standard that does not permit to exceed the limits. Stock levels for each item of inventory are fixed. These levels serve as basis for initiating actions in time so that quantity of each item of inventory is restricted. The experts have recognized basically three levels viz. minimum, maximum and re-order. Maximum level indicates the maximum quantity of an item of inventory which can be held in store at any time. Minimum level indicates the quantitative balance of an item of inventory which must be maintained in hand at all times. Re-order level is that level where the stock level reaches a stage indicating the replenishment of the stock as there is always a gap between placing an order and actually getting the stock.

DANGER LEVEL: This is the level fixed below minimum level. If the stock reaches this level, it indicated the need to take critical action in respect of getting the supply. At this stage, the company may not be able to make the purchases in the organized manner but may have to make rush purchases which may involve higher purchase cost.

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SELECTIVE INVENTORY CONTROL ABC ANALYSIS ABC analysis (Always Better Control) is an application of the principle of Management by Exception to the field of inventory control. Under this technique all the items of inventory are classified in the following three categories i.e. A, B and C on the basis of usage rate, rupee value and critically of the item: i. A category items are of high value and maximum usage rate. Such items constitute 70% to 80% of inventory value, but only 5% to 10% of the total quantity of inventory and require strict control. B category items are of moderate value and usage rate. Such items constitute 20% to 25% of inventory value but only 20% to 30% of the total quantity of inventory and require lesser control. C category items are of low or negligible value and usage rate. The rest of the items representing 5% to 10% of inventory value but 60% to 70% of the total quantity of inventory fall in this category and require general control.
% of total value % of total value quantity

ii.

iii.

0 Category A

0 Category B

0 Category C

Category A B C

% of Total value 70-80 20-25 5-10

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% of Total quantity 5-10 20-30 60-70

It is clear from the above table that ABC analysis classifies various inventory items into three sets or groups of priority and allocates management efforts in proportion to their priority. The most important items are classified as a class A those of intermediate importance are classified as class B and the remaining as class C items. Process of ABC Analysis: For implementation of ABC analysis technique in a firm, the following steps are to be taken1) Classification: On the basis of exception use, the items of inventory are category-wise classified and per unit price of each item is determined. 2) Ascertainment of the total cost: Total cost of each item is determined by multiplying the expected units to be used by its per unit price. 3) Rank determination: Cost-wise ranks assigned to each item of inventory. First rank is assigned to the item with the highest total cost and so on. 4) Computation of ratio or percentage: Ratios or percentage of number of units of each item to total units of all items and total cost of each item to the total cost of all items. 5) Determining of ABC category: Lastly, ABC categories are formed by combining the items on the basis of their relative values.

VED ANALYSIS VED (Vital, Essential, and Desirable) analysis is a technique used for spare parts of inventory. It is most suitable method for automobile industries specially to maintain spare parts. According to this analysis, the inventory items are grouped into Vital, essential and desirable. 1) Vital (v) Items constitute such items of inventory whose adequate supply may noticeably damage the productive activities i.e. without which the production would come to halt. Vital parts for the production of a product will be closely monitored.
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2) Essential (E) items are the items whose non-availability cannot be tolerated for few hours or one day and the cost of production lost is high. Though such items are essential but its level of stocks is moderately low. 3) Desirable (D) items do not have any straight away impact on the production, thus these may or may not be maintained.

Thus, VED analysis does not consider the utility of the inventory items on the basis of value but on their impact on the production.

SDE ANALYSIS SDE (Scarce, Difficult and Easy) analysis evaluate the importance of the inventory items on the basis of its availability. Therefore, SDE analysis groups inventory items into the following categories1) Scarce (S) items are those items which are in short supply and mostly such items constitute important items. 2) Difficult (D) items refer to such items which cannot be procured easily. 3) Easy (E) items are the items which are easily available in the market. FSN ANALYSIS Under this method, inventory items are grouped according to the movement into the following categories(1) Fast moving (F) items are stored in large quantities and a close watch on the movement of such items is kept. (2) Slow moving (S) Items are not frequently required by the production department. Therefore, moderate quantities with moderate supervision will be maintained. (3) Non-moving (N) Items are rarely required by the production department. Consequently, a smaller number of items are kept in stores and less important is given in inventory management.

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TRADITIONAL TECHNIQUES INVENTORY CONTROL RATIOS The use of ratio analysis can give assistance in planning and controlling the inventories. A ratio acts as a signal for the management to investigate the causes for poor performance and provides useful and pertinent information for taking remedial actions. TWO BIN SYSTEM Under this inventory system, all inventory items are stored in two separate bins. In first bin, an adequate supply is kept to meet the current requirements over a designated time period. In, the second bin a safety stock is maintained for use during lead time. The material in second bin is then consumed to meet stock needs until the new order is received. On receipt of new order, second bin is restored and the balance is put in the first bin. Therefore, depilation of first bin provides an automatic signal to re-order.

PERPETUAL INVENTORY SYSTEM Perpetual inventory system is defined as the method of recording stores balance after each receipt and issue to make easy regular checking and prevent closing down for stock taking. The basic objective of the system is to make available details about the quantity and the value of stock of each item at all times. Although this is costly technique, the benefits enjoyed by the management are many. Under this system, statement of materials, follow-up actions, monitoring etc. can be smoothly carried out. As a result of this benefit, many trading as well as manufacturing concerns are adopting this technique of inventory management.

PERPETUAL ORDER SYSTEM Under this system, all stock levels are received after every fixed time intervals. Like weekly, monthly, quarterly etc. depending upon the vitally of the item. Critical items may require a short review cycle and on the other hand, lower cost and non-moving items may require long-review cycle. At the time of review, orders are placed for further stocking up to preset level.
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FACTS AND FINDINGS

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Facts and findings

1. a) The company has maintained proper record showing full particulars including quantitative details & situation of Fixed Assets.. b) In my opinion, the company has not disposed off substantial part of fixed assets during the year and therefore, do not affect, the going concern assumption. 2. a) Inventories (except stock with the third party and in transit) have been physically verified by the Management to the extent practicable at reasonable intervals during the year or at the end at all locations of the company. b) Procedures for physical verification of the inventories followed by the Management are reasonable and adequate in relation to the size of the company and nature of its business. c) In our opinion the company is maintaining proper records of inventory. The discrepancies noticed on such verification as compared to the book records were not material having regard to the size and nature of the operations of the company and have been properly adjusted in the books of account. 3.a) The company has regularly deposited during the year statutory due including provident fund, Income-tax, wealth-tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with appropriate authorities. b) According to the information and explanations given to us, and as per books of records examined by us, there are no dues of income-tax, custom duty, wealth-tax and cess, which have not been deposited on account of any dispute. 4. There are no accumulated, losses of the company at the end of the financial year and in the immediately financial year. 5. According to the explanations given to us and as per books of records examined by us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. 6. According to information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
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7. In our opinion, the company does not fall within the category of chit fund, mutual benefit fund society and hence the related reported requirements are not applicable. 8. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements are not applicable. 9. The company has not raised any money by way of issue of debentures. 10. The company has not raised any money by way of public issue during the year.
Annual Report

Accounts of the company for the period from 1st April, 2008 to 31st March, 2009.

ACCOUNTS: The Gross Profit of the company for the period amounts to out of which are deducted. Depreciation Interest Leaving Surplus/Deficit Income tax/ Wealth Tax Deferred Tax F.B.T. Deposited Add: Carry forward loss/profit of previous year Making total surplus available APPROPRIATIONS Balance of profit/loss carried to balance sheet

2008 (Rupees) 9350958

2009 (Rupees) 11869178

6351883 2550219 (+) 448856 (-) 599423 (+) 331790 (-) 59800 7001095

7072849 2480862 (+) 2315467 (-) 265022 (+) 1057963 (-) 77469 3970156

(+) 7122518

(+) 7001095

(+) 7122518

(+) 7001095

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WORKING RESULTS The company had produced 8072 M.T. Packing paper during the year under review as against. 8403 M.T. of Packing paper in the previous year. FUTURE PROSPECTS Due to severe competition from mills operating in radius of Delhi and there is o margin in the manufacture of Kraft paper, the company has taken over other activities such as handling and commission agency business. By taking these activities company is able to reduce the losses. FINANCE Company places on record their heartiest, thanks to the Management of Indian overseas Bank, Sirsa for providing various loan facilities. DEPOSITS The company accepted deposits only from its Directors and companies as and when funds were required. EMPLOYEES The relation between the company and the workers remain co-cordial. The Directors are pleased to place on record their appreciation for efficient and loyal services rendered by the officers, technical staff, office staff and workers of the company.

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BALANCE SHEET OF SHREE JAGDAMBE PAPER MILLS LTD Particulars Sources of fund Total share capital Equity share capital Share application money Preference share capital Reserves Revaluation results Net worth Secured loans Unsecured loans Total debt Total liabilities Application of funds Gross Block Less: Accum. depreciation Net Block Capital work in progress Investments Inventories Sundry debtors Cash &bank balance Total current assets Loans and Advances Fixed Deposits March.06 12 months 3.00 3.00 0.00 0.00 2.64 0.00 5.64 2.72 0.01 2.73 8.37 March.07 12 months 3.00 3.00 0.00 0.00 2.94 0.00 5.94 2.16 0.00 2.16 8.10 March.08 12 months 3.00 2.95 5.95 2.22 2.95 2.24 8.19 2.22 0.02 2.24 8.19

13.89 8.51 5.38 0.00 0.00 1.27 2.12 0.89 4.28 0.41 0.00

13.98 9.13 4.85 0.00 0.00 1.02 2.62 0.99 4.63 0.46 0.00 5.09

14.05 9.74 4.31 0.00 0.00 1.00 2.79 1.33 5.12 0.55 0.00 5.67

Total CA, Loans 4.69 &Advances

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Deferred credit

0.00

0.00 1.80 0.04 1.84 3.25 0.00 8.10 0.00 19.79

0.00 1.78 0.02 1.80 3.87 0.00 8.18 0.00 19.83

Current liabilities 1.65 Provisions Total CL Provisions Net Assets 0.05 & 1.70

current 2.99 0.00 8.37 0.00 18.78

Miscellaneous Expenses Total assets8.62 Contingent liabilities Book Value

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RECOMMENDATIONS OR SUGGESTIONS During my training in SJPML exposure of so many things related to this field. I am very grateful to SJPML to offer me such an opportunity feel that it is my responsibility to recommend some suggestion to these will ultimately for the benefit of the company. Some of important recommendations or suggestions are as under: 1. The SJPML should check its supply & distribution channels; presently company is selling their product through commission agents network. If company sells its production through agencies/.dealers Company could get better realization. 2. SJPML mostly deals in cash payments/ advance payment transactions. If the company allows some credit period to the consigner, sales realization & marketing position of they will automatically improve. 3. Paper manufacturing by the company is mainly used by the corrugated boxes used for packaging presently improved global market demands corrugation in different colors & different patterns. If the company install such equipments through which they can manufacture packing paper in different colors, market position of the company will improve globally. 4. Presently company does not accept any order which is less than 10M.T. There are many consumers with small corrugated units in surrounding areas. But due to the policy of company they are not able to purchase product of the company so, it is necessary company should change its policy to enhance its infrastructure. 5. Presently company does not have any sales in south region company should advertise its product in south region to achieve better orders. 6. Companys officer should held regular visits to their clients end user with this they are able to find out any problem prevailing in market. 7. The company should improve its packing section. Presently reels of paper manufactured are packed in Hessian cloth (jute). It is better for the company I they start using plastic cloth for packing of reels which is much cheaper and strong than Hessian cloth.

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LIMITATIONS The extent to which study is reliable, it is important to note the limitation under which the study has been conducted. These limitations area as follows:1. Due to shortage of time it was not possible to cover all the network of the company. 2. It being my 1st attempt to undertake such a study, thus inexperience is also an obstacle to accomplish the project in proper way. 3. It is also difficult for me to get information about some other confidential clients of the company.

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SWOT ANALYSIS

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SWOT ANALYSIS STRENGTH 1. Strong name in the market. 2. Strong R&D department. 3. Leading position in the market. 4. Employee satisfaction. 5. Plant capacity in terms of production. 6. Better inventory management. 7. Good at CSR.

WEAKNESS 1. Pollution control problem. 2. Internal conflict between managers of different department 3. Lack of co-ordination.

OPPORTUNITIES 1. Covering of local market. 2. Product expansion. 3. Improvement in the process. 4. Use of latest technology. 5. Reduce in the cost.

THREATS 1. Threat of other companies. 2. Cutthroat competition. 3. Pollution control. 4. Government rules and regulations.
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RECOMMENDATION & SUGGESTION

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CONCLUSION 1. The paper industry is very big and vast. 2. There are a lot of opportunities in this industry. 3. Managing inventory is the key of the success of the business. 4. For the smooth running of the production an organization has to keep the inventory system up to date. 5. They have to keep in the mind the public welfare. 6. The company is managing the inventory in a very effective manner. 7. Able to supply goods on time. 8. Maintaining the quality of the product. 9. Fulfilling the corporate social responsibility. 11. its necessary to fulfill the CSR for every organization. 12. Proper inventory management system should be followed by every organization for smooth running of the process.

RECOMMENDATION AND SUGGESTIONS

Recommendation
Awareness should be increased among the workers about the companys rules, regulations, targets, goals etc. Proper steps to be taken to improve the: -Housing facility. -Entertainment facility. -Hygiene both at the workplace& the canteen. Workers should be rewarded for their better performance. Few workers are not satisfied by the special advance facility provided to them. Therefore, pro per steps should be taken regarding the same. Proper training should be provided to the workers as and when needed. Time to time review of the inventory system.
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 Proper care of store. Plantation around the campus for reducing the pollution. Proper arrangement of scrap wastage and garbage.

Suggestions
More emphasis should be pondered on: General climate of openness and mutuality. Empathetic attitude of the management. Focus on work oriented behavior and work related problems.

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Questionnaire

1. Name of the applicant-.. 2. Date of the birth- 3. Nationality: - Indian ( ) Others ( ) 4. Status (Please tick () on the correct option)

Resident individual ( ) Non-resident individual ( ) 5. Telephone no: - Resident. Office

1. From how much time you are working in this organization? A. from est. of the org. C. from last 5 yrs. B. from last 10 yrs. C. recently joined.

2. Are you satisfied with the working process? A. Yes B. No

3. The behavior pattern management towards employee isA. better C. worst 4. Are you comfortable with used technology? A. yes C. moderate. B. no B. good

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5. Do you think that for proper utilization of material inventory management is must? A. exactly B. may be

6. Are you satisfied with the safety norms adopted by the company? A. yes B. no

7. Do you need more grace period in the delivery schedule? A. yes B. no

8. Complaint from customer regarding delay in the delivery schedule? A. Once in a year. C. once in a month 9. Do you think that proper inventory management can reduce the level of wastage? A. yes B. no B. twice a year

10. Are you happy with the management practices and salary structure? A. yes B. no.

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BIBLIOGRAPHY Websites
1. www.scribd .com. 2. www.indiainfoline.com 3. www.moneycontrol.com

BOOKS
1. Anil b. Roy Choudhary: Analysis and interpretation of financial statements through financial ratios. 2. John n. Mayer: Financial statements, analysis, principles and techniques. 3. S.K. Das, Ratio Analysis In Financial Statements Analyses 4. Khan, M.Y. And P.K. Jain, Financial Management (New Delhi, Tata Mc Grew Hill), 1992. 5. Page, J.R. And H.P. Hopper, Accounting And Information System (Reston, Reston Publishing Company),1979 6. Chakrabory, S.K Et Al Financial Management and Control New Delhi Macmillan 1981. 7. Mathur. B.L. Financial management in public enterprises, R.B.S.A. Publishers, Jaipur, 1988 8. Prasad, G. & Rao. K.V. Financial management in public sector enterprise, Ashish Publishing house, New Delhi, 1989 9. Financial management principles & practice: Aggrawal, M.R.

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