Data collection and Data Analysis

The data was taken three times during the pre-analysis duration of 1 month. It was found that in

all there are 4000-4500 types of material which includes in-house and purchase materials. But at

any given time only 2200-2400 types are present in H2 stores which may vary depending on the

customer requirement. So there were around 2400 bins in which about 2250 bins were fixed and

150 bins were variable types for types which come rarely. The fixed bin location was decided by

factors like weight, volume, quantity, value, movement, etc.

A write off list which was submitted prior to my project was approved by the management which

was only 6% of total nonmoving it was physically moved to other location out of H2 stores so

that space of about 2 Sq.m. was freed and the bins were utilized by other material. Parts were

removed from stores but it did not have much impact on space of H2 stores. I analyzed the effect

of write-off on H2 stores.

Within the project, I also studied the write-off procedure and its effect on the physical stock. The

write-off list had a few nonmoving parts but it was not that much useful.

Also the problem was if in future the write-off material comes in the stores then it may be

accepted and stored as total material types were 2300 and it is difficult to check whether the

material is scraped or not. The solution to this was to block the material through SAP so that if

the material comes in the stores then it will not be taken in the stores. So it also required co-

ordination with SAP personnel who could block the scraped material.

So many more was to be done to solve the problem of H2 stores. So I made other data analysis of

materials after write-off. The analysis helped them to target on slow moving and nonmoving

material for making space.

The list of material was taken on 08.07.2009 and was used for analysis. The list was analyzed

and the summary is as below-

SUMMARY OF H2 STORES (As on 08.07.2009-After write-off)

Usage
Types Quantity Value in %
quantity/day
WTGP (In-house produced)
Component 242 291463 2.85 13486
Nozzle 508 64364 8.01 20739
Nozzle Holder 62 13187 1.69 1951
TOTAL WTGP 812 369014 12.54 36176

H2GP (Purchase items)

Component 1059 6924329 56.21 122464
Nozzle 174 61108 17.06 600
Nozzle Holder 151 45922 14.09 753
Needle 3 15033 0.11 3340
TOTAL H2GP 1387 7046392 87.46 127157

TOTAL WTGP+H2GP 2199 7415406 100 163333

The charts gave us details about the value distribution in H2 stores and the total number of types

in H2 stores. The material was also classified according to the space requirement.
 The consumption per day of material was done as follows:

Types
Usage W
H2GP
quantity/Day TGP
0 715 266
1 to 5 362 226
6 to 10 58 64
11 to 25 81 89
26 to 50 58 53
51 to 100 32 47
101 to 200 18 30
201 to 500 21 16
500 to 1000 10 14
1001 to 2000 17 7
2001 to 5000 9 0
5000 to 10000 4 0
>10000 2 0
TOTAL 1387 812

The observation from this chart was usage quantity of material per day goes on decreasing for

many parts. But this chart did not provide a clear picture as small material like washer is used in

thousand quantity and high value or high volume material is used in a very less quantity. Also

usage/day is over a period of 6 months so it was an average value and not an absolute value.

So age analysis of materials, i.e. for how many days the material is in store or the difference

between last issue date and last receipt date of material, was carried out to be clearer.

WTGP H2GP
Nozzl Nozzl
Componen Nozzl e Componen Nozzl e Needl Total Value
Days not moved
ts e Holde ts e Holde e Types in %
r r
>2 years 27 11 11 91 18 26 0 184 6.14
1-2 years 32 23 5 45 15 21 0 141 4.57
6 months- 12
months
28 45 7 211 18 20 0 329 13.92
3 months- 6
months
35 38 13 215 19 25 0 345 15.40
1 month- 3 months 34 93 10 164 48 24 0 373 16.53
0-1 month 86 298 16 333 56 35 3 827 43.43
Total 242 508 62 1059 174 151 3 2199 100
So this age analysis table helped to find nonmoving material value for more than one year in H2

stores.

If the material was nonmoving for more than 1 year then various things had to be considered

like-

• Which department had the requirement?

• Does the material is required in the future?

• What is the value of the material?

• Does the material can be processed so that it can be used in other department?

• Can the material be sold to any supplier or customer?

• If not then can the material be write-off or scraped?

• Lastly taking lessons so that this material will not procured or manufactured in future?

For all this there is big procedure and it needs approval from high level management. So a list of

such material was prepared that can be write-off from H2 stores.

So another list of nonmoving material was given which consisted of nonmoving material after

write-off and a meetings were held with concerned material head and major stakeholders so as to

take decision on these materials.

This was an important meeting as the target of 25% was to be achieved for this year. It was a

Continuous Improvement Process (CIP) meeting was called as per BPS rules so as to delegate

every one there responsibility to reduce inventory.