SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Symbiosis Bhavan, 1065‐B Gokhale Cross Road,

Model Colony, Pune‐411016

Website: www.scdl.net

Name of the Program : Post Graduate Diploma in Business Administration

Specialization : OPERATIONS

Name of the Student : Shubham Ajabrao Patil

Registration Number : 201907242

Active Email ID : [email protected]

Mobile Number : +91 88898 80994

Name of Topic : PROJECT REPORT ON “A STUDY ON INVENTORY

MANAGEMENT”
DECLARATION

I Shubham Ajabrao Patil a student of MBA respectively hereby declare that the Research
Project Report on

“A STUDY ON INVENTORY MANAGEMENT” is the outcome of my own work and

the same has not been submitted to any other University/ Institute for the award of any degree
or any Professional diploma.

(Signature of Student)

Date: …………………

Place: ………………..
CERTIFICATE BY THE GUIDE

Certified that the work incorporated in this Project Report “A STUDY ON INVENTORY
MANAGEMENT”

submitted by Shubham Ajabrao Patil is her original work and completed under my
supervision.

Material obtained from other sources has been duly acknowledged in the Project Report.

(Signature of Guide)

Roll Number :- 202007840

Date: …………………

Place: ………………...
PROJECT REPORT ON

“SUPPLY CHAIN MANAGEMENT ON

INTERNATIONAL MARKET”

Submitted to:

SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL) IN

PARTIAL FULFILMENT, OF POST GRADUATE DIPLOMA IN

BUSINESS ADMINISTRATION (PGDBA)

Submitted By: Shubham Ajabrao Patil

PGDBA - SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

ACKNOWLEDGEMENT
ACKNOWLEDGEMENT

We are delighted to present the " OPERATIONS " project study as part of the "Post-
Graduate Diploma in Business Administration" Programme. We'd like to thank all the
people who have given us constant support.

I express my sincere appreciation to the Director and Professor of the Project Guide and to all
those who have directed and supported us indirectly in planning this project.

We also want to extend our appreciation to all College of Management staff and our
colleagues, who gave moral support, a conducting work atmosphere and the much-needed
inspiration to finish the project in time and a special thank you to my parents who are integral
to the project.

Thank you.
TABLE OF CONTENTS

SL. PAGE
CONTENTS
NUMBER NUMBERS

1 Theoretical Background Of The Study 8

2 Industry Profile &Company Profile 21

3 Application Of Theoretical Framework 62

4 Analysis And Interpretation Of Financial Statements And Reports 65

5 Learning Experience- Findings, Suggestions 81

6 Conclusion 83

7 Plagiarism 85
CHAPTER-1

THEORITICAL BACKGROUND
Inventory management refers to the raw materials, work in progress finished goods which are
maintained in the organization to have continuous production and sales.

It is one of the components of working capital more than 60% of the working capital will be
invested in inventory. An efficient inventory management system directly contributes to the
growth of profitability of the business concern. In some companies it may go higher either
having too much or too low inventory will results a lot of problems. The scientific process of
implementing inventory management provides inventory at right time, from right source and at
right price and also involves the steps that are to be taken with regard to storage and supervision
of these materials. The main objective of inventory management is to reduce order placing,
receiving and inventory carrying cost and wastages.

The inadequate supply of raw materials directly disturbs the normal functioning of the business
unit whereas, the excess inventory leas to idle investments high inventory carrying cost and
wastages. Inadequate inventory directly affect on the production process. Therefore scientific
principles and techniques are to be adopted to manage the inventory system. To avoid all these
problems, in Japan, JIT Concept (Just in Time) has been introduced. It refers to the supply of
raw materials to the production department directly by the suppliers. The agreement will
normally made with supplier of materials on such terms. So, that the supply of raw materials
must be made without any interruption to the normal productive activities.

The success of the arrangements mainly depends on the sound infrastructure facility viz.,
communication system, transportation system and availability of raw materials.

Inventory management has defined as the development and administration of policies system
procedures which will result to be cost relative inventory decision and related function.
FACTORS INFLUCENING INVENTORY

Suppliers: Suppliers can have huge influence on inventory control. Successful businesses
requires reliable suppliers in order to plan spending arranging production.

It can be a good idea to ensure you have a reliable back up supplier to prevent product shortages
or delays in the manufacturing process.

Lead Time: It is the time it takes from the moment an item is ordered to the moment it
arrives. Lead time will vary widely depending on the product type and the various
manufacturing process involved and therefore changes in these factors can require changes to
inventory management.

Consumer Demand: Maintaining the right stock levels accordance with the consumer
demand is a key factor directly affect inventory management flow.To always have the items in
the right amount in stocks, the firm can use the data collected from sales to identify user
behaviours and patterns so you can predict future consumer demands.

Financials: Getting your financials is crucial when it comes to inventory management as

every step of the process involves great deal of financial risk. Spending too much on inventory
can cause money problems and spending too little can create unhappy customer reviews online.

Managing tools and technology: Introducing modern technology to your inventory can
save you both time and money while improving the efficiency and effectiveness of inventory
management processes. With the right tools and systems in place.

The smoothness of the Supply chain process: Inventory management is a part of the
supply chain process of a company. Therefore any issue or delay in the supply chain
management process will affect your inventory management.
Material Planning: Production plans have to be converted in to materials plan so that the
quality and items schedule or requirements may be defined to have successful material planning
it would be necessary for an organization to adopt the definite methodology which would take
case of internal.

Quality Discounts: The vendor’s offer quality discount to the purchaser in order to induce
purchaser supplier often offers a price reduction for bulk order.

Cost Holding Inventory: Inventories are tied up funds they also expose a firm to a number
of risks and costs the inventory problem is one of the balancing the various costs so, that the
total cost is minimized. The different costs are: material or holding cost, ordering cost, carrying
cost, stock out cost, over stock cost.

Stock: In inventory control different terms are used such as safety stock, Reserve stock, buffer
stock so on

OBJECTIVE OF INVENTORY MANAGEMENT:-

• To keep inventory at sufficiently high level to perform production and sales activities
smoothly.
• To make arrangement for sale of slow moving items.
• To reduce wastages and to avoid pilferage, breakage and deterioration.
• To exploit opportunities available and reduce of cost of purchase.
• To introduce scientific management system.
• To provide right materials at right time from right source at right place.
• To avoid excess and inadequate storing of materials.
• To protect quality of raw materials.
• To reduce order placing and receiving costs to the minimum.
• To ensure affective utilization of floor space.
• To meet the demands for goods of ultimate consumers on time.
• To maintain a minimum of investment in inventory to maximize profitability.
TOOLS OF INVENTORY MANAGEMENT

1. FIXATION OF LEVELS: It is a tool through which the inventories are

maintained by fixing different levels. Fixing stocks in different levels in order to avoid
over stocking of any materials, at the same time to ensure follow-up sufficient materials
to production process. The main purpose of finding levels is to control investing in
inventories. This tools made by considering different factors i.e., nature of raw
materials, cost availability lead time, storage space and cost etc.,

• Maximum Level: It is a level set for materials beyond which it should not
be stored. If materials stored beyond the maximum level creates several financial and
managerial problems to the firm.
Maximum level = reorder quantity – [minimum consumption x minimum Reorder Period]

• Re-order level: It is a level fixed for the materials to indicate the urgency of
processing them from the market. This level fixed by considering the rate of
consumptions of raw materials, lead time and availability of raw materials. Once the
material reaches this level the store controller place his request to purchase the materials
so that he can maintain storage of such items to maximum levels.
Reorder level = maximum consumption x maximum reorder period

• Minimum level: It is also known as safety stock below which the storing of
materials leads to severe consequences. It is a level at which stores controller takes
immediate action in procuring the materials.
Minimum level = reorder level – average consumption x reorder period

• Danger level: It is a level beyond which storage of materials should not fall.
It also indicates necessity to arrange for quick purchase of materials otherwise business
firms has to sto the products of major plants.
Danger level = minimum consumption x reorder period
• Average stock level: It is a stock level between minimum level and maximum level of
stock. Average stock level = (maximum level + minimum level )/2

2. ABC ANALYSIS : [Always Better Control]:

Under this method the materials are managed by giving importance to its value classification
are being made by grading the materials as ABC.

GRADE A: Materials are costly high in value but less in number and are supervise and
controlled close. It comprises of 15% - 20% (terms of value)

GRADE B: Materials are moderated in value and in moderate number of items are
maintained with moderate control. It could account 60% of total cost of inventory.

GRADE C: Materials are cheap in value but more in quantity and least attention is given in
monitoring there items. It take care large number of items which relatively insignificant value.

2.EOQ ANALYISIS: (Economic Order Quantity):

Economic order quantity is that quantity of materials to be ordered where it will have least or
minimum order placing and carrying cost. It is also called size of materials to be purchased
most economically this technique adopted in order to minimize ordering and causing costs.

EOQ = 2AS/ I

Ordering Cost – are the cost which are associated with the purchasing or ordering of materials.

Carrying Cost – There are the costs for holding the inventory there cost will not be incurred of
inventory are not carried.

4. PERCEPTUAL INVENTORY SYSTEM

It refers to continuous stock checking under this system different registers are maintained for
materials, entries are made and when the materials are received and issued,. Hence it is
identified as a costly technique of inventory control through it is costly technique, but the
benefits enjoyed by management are many.

5. VED ANALYSIS: (Vital Essential Desirable)

It is another tool adopted by inventory management. It is most suitable for automobile

industries specially to maintain spare parts, all parts are classified in to Vital Essential
Desirable.

VITAL: parts for the manufacturing of a product will be closely monitored in adequate
supply of these parts may substantially damage the productive activities.

ESSENTIAL: Essential are the type of the materials these are no doubt that they are
essential but its level of stocks are moderately low.

DESIRABLE: Desirable components may or may not maintained non availability of D type of
spares do not damage the normal functioning of industry.

6. FSN ANALYSIS: (Fast moving – Slow moving – Non moving):

Fast moving: are grouped according to the movement and close watches on the movement of
such items are kept.

Slow moving: items are frequently needed by the production department accordingly the
moderate quantity and moderated supervision will be maintained.

Non moving: items are rarely required for production department hence a small number of a
materials kept in stock and lesser importance is given.
7. PERIODICAL INVENTORY VALUATION:

Under this system inventory valuation with checking will be carried out at different intervals
generally twice/thrice in a year during the period of stock checking normal functioning of the
organization will be closed for one or two days and complete stock verification and valuation
will be done accordingly.

8. BUDGETARY CONTROL SYSTEMS:

It is an important technique of inventory control under this system inventory budgeting are
prepared and then the budgeting figures are compared with actual consumption figures and
necessary corrective steps are taken if there are significant verification between the budgetary
figures and actual inventory consumption figures.

METHODS OF RAISING MATERIAL ISSUES:-

1.FIRST IN FIRST OUT METHOD (FIFO]: Here the earliest acquired stock is
assumed to be used first. The stock, which is bought, first is issued first. In other words the
principle is that the materials are issued in this order and at the price of their original purchase.
This method assumes that the order in which materials are received in the stores in the order in
which material are issued from the stores. Hence the material which is issued first is priced on
the basis of the cost of materials received earliest, soon and so forth.

ADVANTAGES:

• The pricing of material is perhaps consistent with the practice of issuing oldest materal first
followed in many manufacturing organization.

• The value of material in stocks is fairly close to current cost.

DISADVANTAGES:

• The issues of materials at different prices complicates stores accounting.

• Comparisons of job costs become difficultly when similar jobs may be charged with different
prices for the same materials.

• In a period of rising prices the charge of production is low, this tends to inflate reported
profile, increase tax burden and push up dividends as a consequence the firm is sapped
financially.

2.LAST IN FIRST OUT [LIFO]:

This method is opposite of the FIFO METHOD. It assumes that the material, which is acquired,
last is issued first. Hence material issues are prices on the basis of the cost of the recent
purchases.

ADVANTAGES:

• The cost of production reflects the current cost of material better.

• In the period of rising prices, reported profile are depressed is conserved.

DISADVANTAGES:

• The issue of material at different prices complicates sotre account.

• Pricing of material is not consistent with the material first.

• Comparison of job becomes when similar jobs may be for the same material at different price

2.WEIGHTED COST AVERAGE METHOD

Under this method issues are priced at the weighted average cost of material in stock [ the
weight being proportional to quantities]. To get an up to date weighted average cost figures, a
new weighted average cost is calculated each time delivery is received.
ADVANTAGES:

• Leads to smooth out price fluctuations.

• It provides a fairly acceptable figure for stock value.

LIMITATIONS:

The limitation of this method may be medium involved in calculating the weighted average cost
each time a new delivery is obtained.

4. STANDARD PRICE [COST] METHOD:-

Under this method a standard price is predetermined when materials are purchased the stock
account is debited with the standard price. The difference between the actual price and standard
price is carried to a variance account. Material issued is charged as per standard price.

ADVANTAGES

• All material issue price identically. The possibility of jobs using the same material being
charged with different costs, a problem with the FIFO or LIFO method does not exists.

• Stock accounting is fairly amplified. There is no need for specific price attribute to specific
issue of materials.

DISADVANTAGES

• Determining the standard price may be somewhat difficult; particularly when price tend to
increase somewhat unpredictable are characters by wide fluctuation.

• The issue of how variance should be treated may be thorny.

5. CURRENT PRICE METHOD:-

According to this method issue are priced replacements or realizable price at their time of issue
ADVANTAGE

• It is easy to calculate the price at which the issues are to be made.

• A particular purchase at a higher or lower rate does not disturb the price to a great extent
because in the price it is averaged out.

• Simplicity is the greatest advantage of this method.

DISADVANTAGE

• Material cost does not represent actual cost price.

• When prices fluctuate considerably, this method will give very incorrect result.

• This method does not give regard to quantities of material held at each price.

INVENTORY CONTROL HAS CERTAIN OBJECTIVES THEY ARE AS FOLLOWS:

• To ensure adequate maintenance of supplier of raw material, stores, and spares and finished
goods and as to maintain the production level and to meet the varying requirement of
customers.

• To keep the investment in inventory as low as possible.

• To ensure effective utilization of storage capacity of space.

• To have effective control over purchase, storage and use of materials.

• To avoid both overstocking and under stocking of inventory.

• To eliminate duplication in ordering or replacement.

• To avoid losses through deterioration stock.

• To ensure perceptual inventory control so the materials shown in stock ledger should be lying
in the store.
TYPES OF INVENTORY

RAW MATERIALS:

To hold stock of raw materials an organization deploys its primary production section of
processes to obtain raw material from manufacturing and stock list.

WORK IN PROGRESS: The holding of raw material and stock of finished goods is
generally a planned activity in process stocks, however are likely to exist in any manufacturing
organization.

FINISHED GOODS: The stock of finished goods provides a buffer between customers
and denmand and manufacturing suppliers. The purpose of maintaining inventory is to ensure
proper supply of goods to customers.

IMPORTANCE OF HOLDING INVENTORY:

• To protect firm from unexpected changes in customer demand.

• The significance of uncertainly in the quality and quantity of supply, supply cost and delivery
items.

• Economies of scale offered by transportation companies, which encourages firm to transport

large quantity of items offered.

• To enable the firm to avoid scarcity of goods meant for either production/sales.

EFFECTS OF HOLDING LOW INVENTORY:

• No Service: often customer demand cannot satisfied leads to immediate losses to business

• Increases production control cost

• Increases replacement cost

EFFECTS OF HOLDING HIGH INVENTORY:

• High inventory increases capital investment which reduces the capital available for other
activities and project

• Increase the risk of obsolescence

• Increase the storage cost

• It leads to reduction in replenishment order cost

• It leads to high level service

CHAPTER-2

INDUSTRY PROFILE AND COMPANY PROFILE

MANUGACTURING INDUSTRY OVERVIEW

Manufacturing industry refers to those industries which involve in the manufacturing and
processing of items and indulge in either creation of new commodities or in value addition. The
manufacturing industry accounts for a significant share of the industrial sector in developed
countries. The final products can either serves as a finished good for sale to customers or as
intermediate goods used in the production process.

EVOLUTION OF MANUFACTURING INDUSTRY

Manufacturing industries came into being with the occurrence of technological and socio-
economic transformations in the Western countries in the 18th-19th century. This was widely
known as industrial revolution. It began in Britain and replaced the labor intensive textile
production with mechanization and use of fuels.

Working of manufacturing industry:

Manufacturing industries are the chief wealth producing sectors of an economy. These
industries use various technologies and methods widely known as manufacturing process
management. Manufacturing industries are broadly categorized into engineering industries,
construction industries, electronics industries, chemical industries, energy industries, textile
industries, food and beverage industries, metalworking industries, plastic industries, transport
and telecommunication industries.

Manufacturing industries are important for an economy as they employ a huge share of the
labor force and produce materials required by sectors of strategic importance such as national
infrastructure and defense. However, not all manufacturing industries are beneficial to the
nation as some of them generate negative externalities with huge social costs. The cost of
letting such industries flourish may even exceed the benefits generated by them.
ANALYSIS OF MANUFACTURING INDUSTRY

It suggests that the manufacturing industry has served as the pivotal factor in the economic
development of a country. The same applies for the United States Of America, whose economy
has been growing rapidly owing to the successful manufacturing industry. Manufacturing
industry analysis also indicates that the manufacturing industry provides employment to many
thereby contributing to the gross domestic product and per capita income of the country.
Approximately 75% of the engineers as well as the scientists get employed in the
manufacturing industry as recorded by a manufacturing industry analysis. The Census bureau
categorizes a particular manufactured product depending on the primary goods produced by the
manufacturing industry.

BATTERY MANUFACTURING INDUSTRY PROFILE

The Indian storage batteries market is approximately estimated at US$ 500 million with the
automotive batteries segment 60 to 70 percent of the overall market value. In terms of volumes,
the overall consumption of the automotive batteries could be around 6.3 million units with the
40 QE segment comprising around 1.2 to 1.3 million units per annum, Various batteries
(clockwise from bottom left): two 9-volt, two AA, one D, a handheld ham radio battery, a
cordless phone battery, a camcorder battery, one C, and three AAA.

A battery is one or more electrochemical cells, which store chemical energy and make it
available as electric current. There are many types of electrochemical cells, including galvanic
J' cells, electrolytic cells, fuel cells, flow cells, and voltaic cells. Strictly, an electrical "battery"
is two or more cells connected together, but often a single cell is called a battery. A battery's
characteristics may vary due to many factors including internal chemistry, current drain, and
temperature.

There are two types of batteries, primary (disposable) and secondary (rechargeable), both of
which convert chemical energy to electrical energy. Primary batteries can only be used once
because they use up their chemicals in an irreversible reaction. Secondary batteries can be
recharged because the chemical reactions they use are reversible; they are recharged by running
a
charging current through the battery, but in the opposite direction of the discharge current.
Secondary, also called rechargeable batteries can be charged and discharged many times before
wearing out. After weaning out some of the batteries can be recycled.

ABOUT BATTERY

A battery is perhaps the only gift of science where electric is stored by means of elector
chemical potentials guided by electro comical reaction. Chemical reaction initiated by
electricity. Which take place with the means of electron exchange between the reactions, as and
when required the stored energy can be counted back to electro chemical reaction. In certain
cases the electrical chemical reactions guiding the energy transformation is not reversible. Such
batteries are called ordinary cells. Where the electro chemical reaction guiding energy
transformation is reversible hence they can be reused through only after outing a required
amount of electric energy once it gets exhausted. These batteries are called secondary batteries.

BATTERY HISTORY

A battery, which is actually an electric cell, is a device that produces electricity from a chemical
reaction. Strictly speaking, a battery consists of two or more cells connected in series or
parallel, but the term is generally used for a single cell. A cell consists of a negative electrode;
an electrolyte, which conducts ions; a separator, also an ion conductor; and a positive electrode.
COMPANY PROFILE:

INTRODUCTION:

• Incorporated in January 1947.

• EXIDE is Asia’s largest exporter of batteries.
• A veteran with 52 years of experience.
• It has seven manufacturing units in India and five units apart from India.
• It has corporate alumni of chloride group PLC, UK.
• It provides 4.2 million SLI automotive batteries and 3 million industrial batteries with 300Ah
capacity.
• Collaborated with shin- Kobe electric machinery ltd (part of Hitachi group), Japan and
Furukawa batteries, Japan.
• It is a leader of South Africa traction batteries with 25% market shares.
• EXIDE captured international market and got costumers like Hyundai, Mitsubishi, TATA,
Toyota, Hero, Honda, FIAT etc.
• The company has subsidiaries in UK, Singapore and Srilanka.
• It’s export span to eighteen countries across five continents in growing list of overseas
costumers.
• The types of batteries manufactured by EXIDE are:
➢ Automotive Batteries
➢ Industrial Batteries
➢ Submarine batteries
• The two main manufacturing units of EXIDE which are present in all its manufacturing plants
are:
➢ Automotive
➢ VRLA (industrial)
• It has products which has capacity ranging from 2.5Ah to 10,000Ah and more.
• EXIDE also acquired the industrial/ manufacturing units of standard batteries ltd located at
Taloja & kanchurmarg (Maharashtra), Guindy (Tamil Nadu), and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal industries ltd as a going concern.
• The manufacturing plants of EXIDE in India are:

➢ Shamnagar (West Bengal)

➢ Chinchwad (Pune)

➢ Haldia (West Bengal)

➢ Hosur (Tamil Nadu)

➢ Taloja (Maharashtra)

➢ Ahmednagar (Maharashtra)

➢ Bawal (Haryana)

• The company’s Submarine batteries is mainly manufactured in the Pune manufacturing plant

• It is the first company to design battery powered electrical boat and maintenance free
batteries, traction batteries for wheel chairs and flat plate batteries for automated guided
vehicles.

• EXIDE today is a Rs 3606 crores power storage company.

HISTORY:

➢ 1916- Chloride Electric Storage Co. (CESCO) UK sets up trading operations in India as an
import house.

➢ 1946- First factory set up in Shamnagar, West Bengal.

➢ 1947- Incorporated as Associated Battery Makers (Eastern) Limited on 31 January 1947

under the Companies Act.

➢ 1947- Incorporated Chloride International Limited (previously Exide Products Limited) ➢

1969- Second factory at Chinchwad, Pune

➢ 1972- The name of the Company was changed to Chloride India Limited
➢ 1976- R&D Centre established at Calcutta

➢ 1981- Third factory at Haldia, West Bengal

➢ 1988- The name of the Company was changed to Chloride Industries Limited

➢ 1994- Technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a
subsidiary of the Hitachi Group.

➢ 1995- Chloride Industries Limited renamed Exide Industries Limited

➢ 1997- Fourth factory at Hosur, Tamil Nadu

➢ 1998- Acquisition of industrial/ manufacturing units of Standard Batteries Ltd located at

Taloja & Kanjurmarg (Maharashtra), Guindy (Tamil Nadu) and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal Industries Limited as a going concern.

➢ 1999- Acquired 51% Shareholding in Caldyne Automatics Ltd

➢ 2000- Acquisition of 100% stake in Chloride Batteries S E Asia Pvt Ltd., Singapore and
49% stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

➢ 2003- Commissioned plant at Bawal, Haryana

➢ 2003- New joint venture in UK, ESPEX, with 51% holding.

➢ 2004- Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka became a subsidiary
consequent to acquiring further 12.50% Equity holding.

➢ 2005- Investment in 50% shareholding of ING VYSYA Life Insurance Company Limited

➢ 2007- Caldyne Automatics Ltd becomes 100% subsidiary consequent to acquiring the
balance 49% shareholding.

➢ 2007- Investment with 26% shareholding in CEIL Motive Power Pty Ltd. A Joint Venture in
Australia.

➢ 2007- Acquired 100% stake in Tandon Metals Ltd.

➢ 2008- Acquired 51% stake in Lead Age Alloys India Ltd.

➢ 2009- Divestment of shareholding in CEIL Motive Power Pty Ltd.

➢ 2012- Acquisition of Inverter manufacturing facility at Roorkee, Uttarakhand

➢ 2012- Technical Collaboration with East Penn Manufacturing Co., USA

➢ 2012- Acquisition of second Inverter manufacturing facility at Haridwar, Uttarakhand.

➢ 2012- Acquisition of balance 49% shares in ESPEX Batteries Limited, UK.

➢ 2013- Acquisition of remaining 26% shares of ING VYSYA Life Insurance Company
adding a total of 100% stake.

➢ 2014- ING VYSYA renamed as “EXIDE LIFE INSURANCE COMPANY LTD.

PRESENT STATUS

• Largest manufacturers and exporter of batteries in Asia.

• Developed vast range of batteries through research and developments and has number of
patents to its name

• Manufacturing specific batteries for specific applications that tough the daily lives of millions
of people and costumers of India

• Thus justifies the slogan “India moves on EXIDE”

WHY EXIDE INDIA?

1.CLAIM LEADERSHIP

EXIDE is a dominant player in the industrial battery segment. The company exports
batteries which have captured niches in south East Asian and European markets.
2.GLOBAL QUALITY

• Developed and produced accordingly to international standards and ISO9001, 14001 and
ISO/ TS- 16949.

• Longer warranty time.

• Lower total cost of ownership.

3.MANUFACTURING STRENGTH

The only company with multi locational manufacturing units spread across country and
equipped with words largest and most advanced machineries.

4.OFFER WIDE RANGE OF BATTERIES

Products range cowering capacities from 2.5Ah to10,000Ah and more. Using the latest
technological input, we manufacture industrial batteries for the power, telecom,
infrastructure projects computer industries as well as the railways, mining and defense
sectors.

5.SOLUTION PROVIDER

EXIDE offers complete solution regarding equipment selection, battery sizing, optimum
room layout, installation, operation and maintenance. We offer lead acid batteries from
2.5Ah to10,000Ah which no other companies in India offer wide range of capacity.

6.EXPERIENCE

Over 52 years accumulated experience of research and development, manufacturing field

operations

7. R&D CENTER
Our R&D center, set up in 1976, is counted among the premier battery research facilities in
the world and is recognized by the department of scientific and industrial. Research under
ministry of science and technology, government of India.

8. SAFETY CONSCIOUS

Underwriters laboratories Inc. USA certifications for the products and available on request.

MANUFACTURING PLANTS OF EXIDE

MANUFACTURING PLANTS STATE ESTABLISHED YEAR

Shamnagar West Bengal 1946

Chinchwad Pune 1969
Haldia West Bengal 1981
Hosur Tamil Nadu 1997
Taloja Maharashtra 1998
Ahmednagar Maharashtra 1998
Bawal Haryana 2003

FACTORY PROFILE

• Fourth factory

• Established in 20th may, 1996

• It manufactures two type of batteries

➢ Automotive batteries

➢ Industrial batteries (VRLA)

• Manufacturing and operation started on june 1997

• Floor space: 50,000 sq.

• Industrial plant
➢ VRLA plant inauguration- april 1997

➢ VRLA commercial production- june 1997

➢ ISO 9001 certification- October 1998

➢ UL certification- December 2000

• Automotive plant

➢ Auto project commenced- October 1997

➢ Auto plant inauguration- July 1998

➢ Auto new plant project started- February 2000

➢ New plant inauguration- December 2000

NATURE OF BUSINESS CARRIED

Exide HOSUR plant is the fourth factory for Exide industry with a turnover of 6900 crores in
the year 2015-16. It is found in 1997.It has total land area of 74.5 of which 42% is green zone.
HOSUR Exide plant is the more productive unit. It has been the two productive plants like Auto
and VRLA type batteries.

➢ Auto plant batteries are used for car, truck, and tractor.

➢ VRLA plant batteries are used for railways, ship.

Exide uses latest world class manufacturing technology to produce batteries for the above
applications. Its factories have all the modern equipment necessary to manufacture world class
products. It also sources its components from the best battery component in the world. The
various batteries are

• Automotive Batteries

In the domestic market, the Company sells its products under EXIDE, SF, SONIC and Standard
Furukawa Brands. ‘EXIDE’ and ‘SF” are its flagship brands. In the international market the
products are sold mainly under DYNEX, INDEX & SONIC brands. The Company supplies
batteries to almost all the car and two-wheeler manufacturers in the country.

The Company has a distribution network comprising over 4000 dealer outlets. These outlets are
supported by 4 regional offices and 28 branch offices. The Company also exports batteries to
the Middle East, Japan and CIS countries.

The Company has a market share of 72% in case of Automotive OEM and 70% in case of
Organized Retail. The Company also manufactures submarine batteries

• Industrial Batteries

The Company designs and manufacture its industrial batteries in a wide range from 2.5 Ah to
20,600 Ah in conventional flooded and Valve Regulated Lead Acid (VRLA) design. In
domestic market, the Company sell its products mainly under EXIDE, INDEX, SF, CEIL &
POWER SAFE brands and in the international markets mainly under CEIL, CHLORIDE and
INDEX brands. Lead acid and Nickel-Cadmium batteries.

Industrial batteries are of three types, Conventional lead acid batteries, VRLA (Valve regulated
both organized and unorganized players compete in the OEM and retail industrial battery
markets. Industrial batteries cater mostly to the infrastructure sector such as railways, telecom,
power plants, solar cells and other industrial segments such as uninterrupted power supply,
inverters and traction batteries.

Exide’s Inva tubular batteries for Inverter applications were introduced in 2000 and Tele tubular
for Telecom Sector introduced in the year 2007 has created volume growth. The Company also
manufacture industrial batteries for niche segments such as miners’ cap lamp batteries and
submarine batteries.

• Submarine Batteries

The Company also manufactures high-end submarine batteries (Type 1, 2 & 3). The Company
manufactures two to three submarine batteries a year to meet the country’s defense
requirements. The Company is one of the five companies in the World which has the capability
to make submarine batteries for both Russian and German types. With the government’s
permission, in recent years, the Company has exported to Algeria

EXIDE HOSUR- DREAM

To become a formidable global enterprise through manufacturing excellence.

FOCUS OF EXIDE- HOSUR

• Quality

• Productivity

• Cost

• Delivery

• Safety and cleaner environment

• Highly motivated team

• Fast response (before and after sales)

• Long lasting term costumer relationship

VISION

Providing credible value addition to customers, employees and shareholders while

simultaneously being recognized by society as a responsible corporate citizen. In addition,
achieving operational excellence while addressing and taking steps towards environmental
protection.

MISSION

Strive to carefully balance the interest of all stakeholders; to fulfill aspirations of the employees
and to passionately pursue excellence without deviating from our core values.

CORE VALUES
• Customer Orientation

• Personal Integrity and Commitment

• Teamwork and Mutual Support

• Employee Development and Involvement

• Striving for Excellence

• Management by Processes and Facts

• Responsible Corporate Citizenship

OBJECTIVES AND GOALS OF THE COMPANY

➢ To modernize , upgrade and improve facilities or higher production and productivity

➢ To achieve better Quality in Products.

➢ To Strengthen the Marketing Organization to effectively Compete in National and

international markets.

➢ To get ISO certifications

➢ To maintain and developed highly motivated human Resources to achieve Professional

competence and ensure career development of its work force.

➢ To maintain Market Shares in Industry.

AWARDS/ CERTIFICATES AND RECOGNITION

• Exide wins CFO of the year award in automotive and auto-ancillary category from
CNBCTV18

• CII Productivity Award -1ST Prize in category “A” for Significant Improvement in
Productivity
• Company’s Plant at Hosur, Tamilnadu is an ISO-9001, ISO / TS-6949 and ISO-14001
certified by TUV-NORD of Germany.

• Delivery and quality certificate from Toyota in 2002

• Developing and improving quality of batteries by reducing lead time of suppliers from TVS in
2002

• 100 PPM quality commitment award from APC 2003

• 100 PPM award from Hyundai in 2003

•100 PPM award from OEM customer American Power Corporation –January 2003

• Quality award from OEM customer Toyota - April 2003 & April 2004

• Safety award from Government of Tamilnadu - April’03

• 100 PPM award from OEM customer Hyundai - June’03

• Zero PPM Award from OEM customer Toyota – April’04

• Zero PPM award from Toyota in 2004

• Green award from OEM customer Toyota - April’04

• Best Quality supplier award from OEM customer Toyota – April’05

• Zero PPM award from OEM customer Toyota- April’05

• Quality Delivery Award from OEM customer Toyota - April’05

• First Prize in Best Garden Competition (Industrial Category) awarded by Mysore Horticulture
Society – 2005

• Leadership and Excellence Award in Safety , Health & Environment by CII –2006

• Indian Manufacturing Excellence – “Gold” Award –for Automotive Ancillary Category from
Frost & Sullivan in 2006
• CII-EXIM Bank Award for Strong Commitment to Excel by CII in 2006

• Best quality award from Toyota in 2007

• Teri corporate environmental award in 2007(second best)

• CII business excellence award in 2007

• "Exide, Haldia factory gets TPM award for Category A, 2008, from Japan Institute of Plant
Maintenance"

• CII Quality Award – Certificate of Appreciation for Commendable effort in the area of Total
Quality at the CII(ER) Quality Award 2008-09

• At the CII (Eastern Region) awards ceremony in Kolkata for 08-09 Exide won

• Zero PPM & best Kaizen trophy from M/s Toyota in 2009

• Good IR award from ministry of labor, Tamilnadu in 2009

• Best support award from m/s Hyundai and m/s Renault Nissan in 2010

• Safety award from chief inspector of factories, Tamilnadu in 2010

• JIIPM TPM award in 2010 (category A) • Quality circle award from M/s Toyota in 2011-12

• Par- excellence & excellence award from CCQC & NCQC in 2012-13

• 1 st prize in quality Kaizen competition from M/s JCB & M/s M&M in 2013

• Winner of EFY award in the category SMF batteries in 2005-13

• Central Excise award “top tax payer” in 2013-14

• Green tech environment award in 2014

• Quality improvement award from Hyundai in 2004

• CII-ITC Award 2016 for Commendable Achievement in SCM Sustainability

• Golden Peacock Award for Excellence in Corporate Governance 2016

• Manufacturing Today Award 2016

• Greentech Safety Award 2016

WORK FLOW MODEL

PRODUCTION DEPARTMENT
PRINCIPLE

“TO ACHIEVE ZERO DEFECTS”

In production area they are using many process to produce a battery,

some process are grid casting, small parts casting, assembling the parts, acid filling, heat
sealing, pole bearing, air leakage testing & charging and testing.
BRIEF OUTLINE OF THE PROCESS OF MANUFACTURE OF VALUE
REGULATED LEAD ACID BATTERIES AND AUTOMOTIVE
BATTERIES.

The basic raw material for manufacturing a lead acid battery & automotive battery (a captive
rechargeable source of energy) is lead. The essential steps for manufacture are as follows.

1.Alloy Blending

Lead or lead base alloys are mixed in the molten state with controlled amounts of metallic
additives. The blended alloys are used for a variety of components in the battery (at Hosur)
blended alloys are procured from external source and partly from in house.

2.Grid costing & Ageing

Blended alloys of specified composite are machine cost by gravity flow into grids
(structured lattices). These serve as conductive pathway for the current to and from the
active material. There also act as supporting framework. Grids cost are aged before
subsequent processing to reach sufficient hardness levels.

3.Oxide Manufacturing

Lead is partly oxidized to form grey oxide a finely divided admixture of the metal and its
monoxide. This is carried out through attrition in ball mills, super micron mills for industry
and lishan ball mail for auto.

4.Paste Mixing, Pasting and Curing

Grey oxide is mixed with specified quantities of additives, acid and water to form a pliable
paste. Positive and negative plates are made by machine pasting the paste onto the grids.
The pasted plates are quick dried (for better handling) and stored in worm and humid
cubicles to convert the paste largely to tri-basic lead sulphate, which enhances adhesive and
cohesive properties and facilities the next step of formation.
5.Forming

Cured positive and negative plates are arranged alternatively in tanks containing dilute
sulphuric acid and subjected to the passage of a specified duration, When the positive
materials is converted largely to lead dioxide and the negative to spongy lead.

6.Drying

The formed plates are dried at elevated temperature in a stream of hot air.

7.Plate parting and Lug Brushing (Plate Cleaning or Plate Finishing)

Plates, if processed in multiple configuration, are separated into individual ones, their lugs
(top protrusions for connections) are brushed clean.

8.Assembly

The finished plates of each type positive and negative are assembled into groups by fusing
their lugs top a common group bar and vertical strap. This process is carried out manually
using a Jig positive and negative groups are interleaved separated by separators in the form
of glass fiber mats. The elements so formed are inserted in to individual cell boxes or cell
compartment of battery. The cell/battery is finally by the correct sequence of inter cell
connector terminal burning and lid sealing operations.

9.Charging

After lid sealing operation, each battery is filled with dilute sulphuric acid and then battery
charging process is carried out as per the process specification for a specific duration. At the
end of charging schedule only passed batteries go to successive operation.

10.Final Assembly
The passed charged batteries are sent to final assembly after fixing the safety value tests for
internal resistance and high rate discharge and ultrasonic welding process take place. 39 | P
a g e Cosmetics are also checked at the point. After screen printing, all batteries go to
dispatch yard: batteries are packed and shipped to customers.

QUALITY POLICY OF THE COMPANY

• The aim of the company is to always provide satisfaction to customers.

• The company will develop design, produce and market products and services that cater
continuously to the needs and expectation of customer and succeed in gaining/retaining a
competitive edge.

• A quality system meeting international standards will be implemented and maintained.

• Procedures and processes shall be standardized and effective control systems instituted to
eliminate variability due to non-conformance.

• The standards and system shall be continually reviews and up graded audits and
management reviews shall be carried out.

• Human resources will be developed through planned and structured training and
development Programmes to be conducted on a reader basis.

• T P M POLICY

The members of Exide Industrial Limited in our pursuit of excellence and customer
satisfaction are committed to achieve optimum utilization of all available resources by
implementation of total productive maintenance

• AIM OF ORGANIZATION
1. Improve the overall equipment efficiency by eliminating all losses. Strive for zero break
downs, zero defects and zero accidents.

2. Train, involve and empower people.

3. Create a safe and clean working environment.

• ENVIRONMENT POLICY

We, the member of Exide Industries Limited., in the pursuit of core value of responsible
corporate citizenship are committed to the issues addressed in the policy at all our locations
during the marketing, design, manufacture sales and after sales support of lead – acid
batteries.

It is the policy of the company to:

1. Minimize the adverse impact of our activities, products and service by implementing
an environmental management system.

2. Prevent pollution through waste minimization at source, recovery / treatment of

emission and releases conservation of energy, recycling & optimum use of resources.

3. Continuously improve our environmental performance through setting and reviewing

and associate objectives and targets and periodic evaluation.

4. Comply with applicable legal requirements and other requirements related to our
environmental aspects.

5. Communicated all interested practice and all people working for or on behalf of our
organization.

PRODUCTS AND SERVICE PROFILE

Lead acid storage for automobile, motorcycle, genets, trawlers, VLRA, industrial stand by,
motive power, submarines (2.5 Ah to 12600 Ah)

SPECIAL FEATURES
➢ Maintenance free

➢ Easy handling easy installation

➢ Ready to use ➢ Long service life

➢ Excellent charge retention and recovery ability

➢ High reliability

PRODUCT PROFILE

1 Automotive batteries For cars, Jeeps and commercial vehicles,

Passenger cars, two wheelers to tractors
2 Heavy duty batteries For trucks and tractors
3 Light weight batteries For wireless transmission batteries
4 Transaction batteries For material handling equipment
5 Train lighting cells For railway coaches
6 Stationary batteries For telecommunications, telephone, Emergency
lighting
7 Submarine batteries For defense Requirements Company
Manufacturers, two or three submarine batteries a
year, for new generation Submarine to the Indian
navy

AREA OF OPERATION

Exide industrial limited manufacturing and distributing the batteries in globally, It has
National and regional customers where the activities takes place according to the order
given by customers that to the legal right. The distribution net work is as follows

COMPETITORS INFORMATION
The company faces competition on two fronts. It faces competition from new player in the
organized sector who is focusing on advertising and publicity for promoting their brands.
The company also faces competition from low cost products from the unorganized sector.
There are many firms or agencies dealing with batteries. They produces, markets the
product. EXIDE industries ltd facing a huge competition from companies like:

➢ For automotive batteries

• PANASONIC

• AMARON • WIPRO

• MICROTEX

• AMCO-YUASA

• PRESTOLITE

• OKAYA

• VARTA

➢ For industrial batteries

• AMRAJA

• HBL

• STAR

• NED ENERGY SYSTEM

• KIRL OSKAR

• PANASONIC

• BB-CHINA

• ROCKET-KOREA
MAJOR CUSTOMERS

➢ AUTOMOTIVE BATTERIES

• HYUNDAI

• HMT LTD.

• MARUTI

• TATA

• TOYOTA

• BAJAJ AUTO

• FIAT

• HERO

• HONDA

• PIAGGO

• ESCORTS

• MAHINDRA

• ASHOK LEYLAND

• GENERAL MOTORS

• SWARAJ MAZADA

• MITSUBISHI MOTORS

• JOHN DERE • EICHER

• MNC’S

➢ INDUSTRIAL BATTERIES
• MOTOROLA

• ERICSSON

• EMERSON

• SIEMENS

• DUBAS

• BHEL

• BSNL

• VSNL

• BEL

• NTPC

• GAIL

• ABB

• GODREJ

• KPCL

• INDIAL RAILWAYS

• LUCENT TECHNOLOGY

• TVS ELECTRONICS

BRANDS OF EXIDE

• CHLORIDE

• INDEX

• DYNEX
• Standard Furukawa(sf sonic)

• JUPITER

• CONREX

• CHAMPION

• LITTLE CHAMP

• BOSS

INFRASTRECTURAL FACILITIES

The Exide has eight manufacturing plants producing world class products. Exide factories are
located strategically around the country to provide logistic support for its production of over
five million batteries per annum.

Each of these factories is equipped with state of the art equipment sourced from the best battery
making machinery manufacturers in the world. Exide, due to its strong roots with the erstwhile
chloride group has access to the best manufacturing practices in the field of lead Acid Batteries.

A technology tie up with Shin Kobe the makers of world class Hitachi VRLA batteries has
given Exide the technological edge in maintenance free catteries. Other strategic technology
agreement with Furukawa, Japan and Oldham, U, K. has given Exide competitive edge in
proving the most reliable solutions for packaged power.

➢ Environmental policy

➢ Safety measures facilities

➢ Medical facilities

➢ Effluents training

➢ Transportation facilities

➢ Canteen facilities Objectives and Goals of Company

➢ To modernize , upgrade and improve facilities or higher production and productivity
➢ To achieve better Quality in Products.

➢ To Strengthen the Marketing Organization to effectively Compete in National and

international markets.

➢ To get ISO certifications

➢ To maintain and developed highly motivated human Resources to achieve

Professional competence and ensure career development of its work force.

➢ To maintain Market Shares in Industry.

ORGANIZATIONAL STRUCTURE

Accounting procedure:

➢ Maintenance of record as per the accounting standards is maintained.

➢ Ensuring correct & proper material accounting in & out of the factory.

➢ Pay roll accounting.

➢ Creditors bill passing &all payments.

➢ Stock transfer &direct sales invoicing.

➢ Budgeting & budgetary controls.

➢ Fixed assets accounting.

STYLE

➢ Democratic style of industry.

➢ Management style is vertical style.

Democratic style

Here leadership style is democratic because all the heads of departments will have meeting
daily so all takes decision. So it is called as democratic style and suggestion committee takes
suggestions

Management style

TOP LEVEL MANAGEMENT

MIDDLE LEVEL MANAGEMENT

LOW LEVEL MANAGEMENT

STAFF

The people in the enterprise and their socialization into the organization.

Roles & Responsibilities of Employees

➢ It is the responsibility of every employee’s to perform work in safe manner.

➢ Suggestion for improvement.

➢ Suggestion for poke – yoke techniques.

➢ Short & separate hazardous wastes.

SHARED VALUE

Fundamental axioms that organization believes in and people respect and work towards. Core
values also set the tone of the organization culture the core value of our organization are given
bellows:

➢ Customer orientation.

➢ Personal integrity and commitment.

➢ Team work and mutual support.

➢ People development and involvement.

➢ Striving for excellence.

➢ Management by processes and facts.

SKILLS

➢ Technical skill requirement: ITI, Diploma, Mechanical engineers

➢ Nontechnical skill requirement: MBA at top management, BBM & B.com at

operational level

CSR ACTIVITIES OF EXIDE

➢ eradicating hunger, poverty and malnutrition, (promoting health care including

preventive health care) and sanitation including contribution to the Swach Bharat Kosh
set-up by the Central Government for the promotion of sanitation and making available
safe drinking water
➢ promoting education, including special education and employment enhancing
vocation skills especially among children, women, elderly, and the differently abled and
livelihood enhancement projects

➢ promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centers and such other facilities
for senior citizens and measures for reducing inequalities faced by socially and
economically backward groups

➢ enduring environmental sustainability, ecological balance, protection of flora and

fauna, animal, welfare, agro-forestry, conservation of natural resources and maintaining
quality of soil, air and water including contribution to the Clean Ganga Fund setup by
the Central Government for rejuvenation of river Ganga

➢ protection of national heritage, art and culture including restoration of buildings and
sites of historical importance and works of art; setting up public libraries; promotion and
development of traditional arts and handicrafts

➢ Measures for the benefit of armed forces veterans, war widows and their dependants.
➢ Training to promote rural sport, nationally recognized sports, Paralympics sports and
Olympic sports

➢ Contribution to the Prime Minister’ National Relief Fund or any other fund set up by
the Central Government for socio - economic development and relief and welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
➢ Contribution or funds provided to technology incubators located within academic
institutions which are approved by the Central Government

➢ Rural development projects

➢ Any other projects or activities as may be approved by the Central Government

pursuant to section 135 of the Companies Act, 2013, from time to time
SWOT ANALYSIS

S-Strengths:

• EXIDE is a super brand

• It has wide distribution network

• Appropriate infrastructure for condition of training

• Partnership with various technical & management institution for providing a

continuous supply of fresh graduate

• Streamlined system of recruitment

• Providing the necessary welfare facilities for the employees in the comfort zone &
increasing the retention level of the employees

• IR/LR relation very conductive for the smooth functioning of the unit

W-Weakness:

• Difficult to change to an alternative line production with the existing machinery

• High employee turnover

• Lack of clarity and transparency in upward/down ward communication.

• Evaluation of effectiveness of training programmers being imparted.

• No clear job description for various levels resulting in dual reporting relationships.

• Performance appraisal system: its approach, effectiveness acceptability.

• Effectiveness of organization health study.

O-Opportunities:

• Opportunity to expand globally

• To have in-house online dilution plant for sulphuric acid. This will not only reduce the
cost of acid procurement but also will help us to consume the recovered acidic water
from plate washing thereby achieving reduction in effluent generation.

• To convert the accumulated calcium sulphate solid sludge to useful products in

construction industry with the help of IISc Bangalore.

• Further reduction in tank formation by increasing the jar formation of VRLA batteries.
• To start using rain water in process after necessary treatment. At present we are this
only for the green belt development. Storage caexidity of rain water reservoir is
30000KL.

• To extend green belt in additional to hectares.

T-Threats:

• Fast changing consumer’s tastes & preferences

• Liberalization policy of the government of India

• Fast changing market conditions

• High costs price in view of overheads

• Importing components at the low cost from china

• Increasing competition (Nationality & Globally)

• Unfavorable duty structure

• Slow growth rate in profits expected.

INVENTORY MANAGEMENT AT EXIDE

INTRODUCTION

Inventory plays a vital role in any manufacturing concern. A constant and continuous supply of
inventory helps in smooth running of production. As inventories are one of the factors of
production it has to be processed from the best source available in the market while making
purchase on has to plan to buy right quality at right time with the proper description of quantity
to right vendor.

In any industry while making purchases also must consider funds that are available. This means
that the target is within the budged made are not. EXIDE INDUSTRIES Ltd is basically
manufacturing all kinds of batteries required for automotive as well as industries and thus need
for materials for production. The inventory management starts from inviting the quotations
from various vendors and make the purchase the based upon the production schedule. The
company purchases made from different sources and they do not depend upon only one source.

Types of Inventory at EXIDE

• Raw materials

• Work in progress

• Finished goods

Classification of Raw materials

Direct Materials:

These are the materials which are related to particular product design. Cost is that which can be
conveniently identified with and allocated to cost units direct material generally become part of
the finished goods.
Indirect Materials:

These are the materials like stationeries, accessories. Indirect materials are those which cannot
be conveniently identified with individual cost unit the minor importance such as small and
relatively expenses items which may become part of finest product.

Supplies:

Supplies are indirect material used in products which do not become part of finished goods.

Bought out parts:

There are the types of inventory used in the company which are readily available in the market
for other industry used it as a same status.

• Consumables:

• Spares:

• Electrical goods: fuse, electrical switches.

Stores:

The term stores are a very wider term and include raw material, components part, tools,
maintenance and materials.

Work in Progress:

Work in progress are the inventory refers to parts are between to productions operations.

Finished Goods:

All articles for with all production are finished which are ready to be delivered to the customer
as a product in assemble types of production like refrigerator, radio, TV, etc. components part
may be purchased or produced within organization.
PURCHASING PROCESS OF MATERIALS IN EXIDE

• Purchase Requiring (PR): The users department giving purchase requirement letter to the
materials department to process the materials.

• Quotations: The purchase department collection for the said materials purchase requiring
company sends required raw materials quotation to various companies.

• Supplier Quotas: Evaluate the quotation of suppliers and accept the best competitive supplies
after negotiation.

• Purchase Order: After the negotiation purchase order release to the said vendor with specific
information.

• Delivery Challan: It is based on purchase order the vendor supplying materials against
Delivery challan with gate entry.

• Good Received Note (GRN): It contains supplier name, description of goods, quantity
received per invoice, quality received quantity accepted, quantity rejected (if rejected goods
will replace by supplier) against Delivery Challan the stores representatives prepare Good
Received Note.

• Issued to Stores: After entering to the Goods Received note raw material issue to stores
department.

• Material Requisition: The users department giving material requisition to the stores
department.

• Bin card Entry: It contains of supplier name, item name, items code opening stock, received
quantity with date, issued date and balance.

• Production Issue: Through bin card entry materials issued to production department.

• Accounts Check: Accounts check is done by account department after production processes
completeness.
There is a time gap between placing order and receiving material from the suppliers:

For importer materials – 7 days

Local Materials – 2 days

STORES MANAGEMENT

The aim of any business activity is to increase the value of organizational resources which are
risked by the owners in a venture. The aim of the manufacturing operation which is an
important faced of business activity is the timely manufacturing of desired product and
specified quality at least possible cost resulting in the value of resources.

Stores Functions:

• Receipt

• Storage

• Retrieval

• Issue

• Verification

• Co-ordination & Co-operation

1. Inward Entry – Raw material entry

2. Daily Issued note – Goods issued to production department

3. Good received cum inspection – Goods received and aim of scrap materials

4. Request for raw parts

5. Daily tapes the stock register

Product of Purchasing Process:

The purpose of this document is to establish a process for purchasing of products in confining
to specific purchase requirement of the organization and product requirement.

Store Keeping

Store keeping in respect of following types of inventory

RAW MATERIALS:

• Hand to mouth buying is not feasible due to the quantum and frequency use and
distantly located supply of source

• To reap the price advantage available on materials

• Safeguard against the stock out on available raw materials

• Large order placing avails certain economies like cost of order placing

WORK IN PROGRESS

• To balance production flow

• To eliminate the idle capacity of machinery labour

• To even out the imbalance in demand and supply

FINISHED GOODS

• To reap the customer demand

CUSTOMERS OF THE COMPANY:

(Per month)
COMPANY PLACE AMOUNT OF PURCHASING

Hyundai Chennai 60000

Ashok Leyland Hennu / Hosur 18000

Maruti Pune 12000

Toyota Bididhi 4500

Renault Chennai 10000

TVS motors Ltd Chennai 2000

Stores Management

1.General Store – Only to keep spares parts

2.Raw materials stores:
a. Industries Division
b. Automotive Division

RAW MATERIALS AND PRICES

[per ton]

RAW SUPPLIER PLACE AMOUNT OF PRICES

MATERIAL PURCHASING

PPCP Tech comb Australia 350 mt 150000

LEAD Umicore China 4500 mt 400000

ABS Sri Varu Bangalore 350 mt 230000

Enterpricse
SEPARATORS HK China Huge meters 130000

ACID Ozo Chennai Depends upon 300000

vehicle capacity

Other units of EXIDE:

1.Hosur (Four Wheelers)

2.Chunchwada (Two Wheeler Batteries)
3.Taloja (Four Wheelers)
4.Ahmednagar (Four Wheelers)
5.Haldia (Four Wheelers)
6.Shamnagar (Four Wheelers)
7.Bawal (Two Wheelers)

Nature of Inventories:

Raw Materials:

Raw materials are those basic inputs that are converted in to finished products through
the manufacturing process raw materials inventories are there units have been
purchased and stored for future production.

Work In Progress:

Inventories are semi – manufactured products they represents products that need more
work before they become finished products for sale.
Finished Goods:
Inventories are there completely manufactured products which are ready for sale.
CHAPTER-3

RESEARCH METHODOLOGY

TITLE OF THE STUDY:

Report on Inventory management System at EXIDE Industries Ltd.,

STATEMENT OF THE STUDY:

Inventory comprises of raw materials, work in progress, finished goods, maintained in

the organization to have continuous production and sales. It is the aggregate quantity
of material resources and goods that are idle at a given point of time. The resources
may be of any type; for example men, materials, machinery, money, when the
resources involved in materials or goods in any stage of completion, inventory referred
to as stock.

OBJECTIVES OF THE STUDY:

 To Study the inventory management systems of the company

 To evaluate efficiency of the inventory management system
 To study various components of inventory
 To understand the policies and procedures followed by the EXIDE INDUSTRIES LTD.

STUDY METHODOLOGY:

Essential purpose of research methodology is to provide information that will facilitate and
identification of problem and opportunity to ensure the organization in carrying out best
possible decisions. This study is done using the balance sheet and inventory data for three years
has been analyzed.

SOURCES DATA COLLECTION:

1.PRIMARY DATA:Primary data are those which are collected for the first time, and
they are original in nature. Primary data has been collected through personal
interviews with concerned officers of the company like finance department ,finance
manager and staff.

2.SECONDARY DATA

A. Company Balance Sheet

B. Documents, records, files, manual

C. Magazines, journals

Sampling Design:

This study being comprehensive study of inventory management and control system in
EXIDE INDUSTRY Ltd using cases references materials and also used for inventory
management details.

Limitation of the study:

 Study limited at period of 5 years

 Research work is restricted to company only
 Based on data available and believed to be is true as if is provided by
company personnel
 The inventory analysis based on the financial statements published by the
company
Conclusion:
The inventory management should aim at ensuring the required raw materials as and
when the requirement arises in the most economical way. However there is still scope
of improvement in the function.
CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

1.STOCK TURNOVER RATIO/ INVENTORY TURNOVER RATIO:

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is
managed by comparing cost of goods sold with average inventory for a period. This measures
how many times average inventory is "turned" or sold during a period.

YEAR NET SALES AVERAGE STOCK STOCK TURN

OVER RATIO

2014-15 5318.67 1160.71 4.58

2015-16 6365.89 1407.39 4.52

2016-17 8308.85 1302.86 6.38

2017-18 9534.95 1646.36 5.79

2018-19 9479.44 1245.88 7.61

TABLE-1

GRAPH-1

STOCK TURN OVER

8 RATIO
7

4 STOCK TURN OVER RATIO

3

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 stock turnover ratio is 4.58, in the year 2015-16 is 4.52, in the year
2016- 17 is 6.38, in the year 2017-18 is 5.79 and in the year 2018-19 is 7.61.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the stock turnover
ratio has decreased in the year 2015-16 compare to year 2014-15, again increased in
the year 2016-17, again decreased in the year 2017-18 and again increased in the year
2018-19.

2.INVENTORY TO WORKING CAPITAL RATIO:

Inventory to working capital ratio, defined as a method to show what portion of a

company's inventories is financed from its available cash, is essential to businesses
which hold inventory and survive on cash supplies. In general, the lower the ratio, the
higher the liquidity of a company.

TABLE-2

YEAR INVENTORY WORKING INVENTORY TO

CAPITAL WORKING CAPITAL
RATIO

2014-15 1160.71 1355.21 0.86

2015-16 1407.39 1569.89 0.90

2016-17 1302.86 1846.04 0.71

2017-18 1646.36 2001.30 0.82

2018-19 1245.88 2148.91 0.58

GRAPH-2:

INVENTORY TO WORKING CAPITAL

RATIO
0.8

0.6
INVENTORY TO
0.4 WORKING CAPITAL RATIO

0.2

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 inventory to working capital ratio is 0.86, in the year 2015-16 is
0.90, in the year 2016-17 is 0.71, in the year 2017-18 is 0.82 and in the year 2018-19
is 0.58.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the inventory to
working capital ratio has increased in the year 2015-16 compare to year 2014-15, and
decreased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19

3.INVENTORY TO CURRENT ASSET RATIO:

This ratio is calculated by dividing the total of inventory by the amount of

current assets.

TABLE-3

YEAR INVENTORY CURRENT INVENTORY TO

ASSETS CURRENT ASSETS
RATIO

2014-15 1160.71 2430.16 0.48

2015-16 1407.39 3390.17 0.42

2016-17 1302.86 3529.44 0.37

2017-18 1646.36 3720.39 0.44

2018-19 1245.88 4177.26 0.30

GRAPH-3:

INVENTORY TO CURRENT ASSETS

RATIO
0.6
0.5
0.4
0.3
0.2
INVENTORY TO CURRENT
ASSETS RATIO

0.1
0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 inventory to current asset ratio is 0.48, in the year 2015-16 is 0.42,
in the year 2016-17 is 0.37, in the year 2017-18 is 0.44 and in the year 2018-19 is
0.30.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the inventory to
current asset ratio has decreased in the year 2015-16 compare to year 2014-15, again
decreased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.

4.CURRENT ASSET TURNOVER RATIO:

The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets. In other
words, this ratio shows how efficiently a company can use its assets to generate sales.

TABLE-4

YEAR NET SALES CURRENT CURRENT ASSETS

ASSETS TURNOVER
RATIO

2014-15 5318.67 2430.16 2.19

2015-16 6365.89 3390.17 1.88

2016-17 8308.85 3529.44 2.35

2017-18 9534.95 3720.39 2.56

2018-19 9479.44 4177.26 2.27

GRAPH-4:

CURRENT ASSET TURNOVER RATIO

3

2.5

1.5 CURRENT ASSET

TURNOVER RATIO
1

0.5

0
2014-152015-162016-172017-182018-19

ANALYSIS:
In the year 2014-15 current asset turnover ratio is 2.19, in the year 2015-16 is 1.88, in
the year 2016-17 is 2.35, in the year 2017-18 is 2.56 and in the year 2018-19 is 2.27.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the current asset
turnover ratio has decreased in the year 2015-16 compare to year 2014-15, again
increased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.

5.CURRENT RATIO:

The current ratio is a liquidity ratio that measures a company's ability to pay short-
term and long-term obligations. To gauge this ability, the current ratio considers the
current total assets of a company (both liquid and illiquid) relative to that company's
current total liabilities.

TABLE-5

YEAR CURRENT CURRENT CURRENT RATIO

ASSETS(RS) LIABILITIES(RS)

2014-15 2430.16 1074.91 2.26

2015-16 3390.17 1820.28 1.86

2016-17 3529.44 1683.40 2.10

2017-18 3720.39 1719.09 2.16

2018-19 4177.26 2028.35 2.06

GRAPH-5

ANALYSIS:

The current ratio in the year 2014-15 is 2.26, in the year 2015-16 is 1.86, in the year
2016-17 is 2.10, in the year 2017-18 is 2.16 and in the year 2018-19 is 2.06.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the current ratio has
decreased in 2015-16 compared to 2014-15, again increased in the year 2016-17, again
increased in 2017-18 and again decreased in the year 2018-19.

CURRENT RATIO
5
4.5
4
3.5
3
2.5
2

CURRENT RATIO

1.5
1
0.5
0

2014-15 2015-16 2016-17 2017-18 2018-19

6.QUICK / LIQUID RATIO:

The quick ratio is a measure of how well a company can meet its short-term financial
liabilities, also known as the acid-test ratio. It is used to supplement the information given
by the current ratio.
TABLE-6:

YEAR LIQUID ASSETS CURRENT LIABILITIES QUICK

ASSETS

2014-15 488.84 1074.91 0.45

2015-16 812.32 1820.28 0.44

2016-17 945.24 1683.40 0.56

2017-18 897.62 1719.09 0.52

2018-19 1016.15 2028.35 0.50

GRAPH-6:

QUICK ASSETS
0.6

0.5

0.4

0.3

0.2 quick assets

0.1

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:
The quick ratio in the year2014-15 is 0.45, in the year 2015-16 is 0.44, in the year
2016- 17 is 0.56, in the year 2017-18 is 0.52 and in the year 2018-19 is 0.50.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the quick ratio has
decreased in the year 2015-16 compare to year 2014-15, again increased in the year
2016-17, again decreased in the year 2017-18 and again decreased in the year 2018-
19.

7.FIXED ASSET TURNOVER RATIO:

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value
of fixed assets (on the balance sheet). It indicates how well the business is using its
fixed assets to generate sales.

TABLE-7

YEAR NET SALES NET FIXED FIXED ASSET

ASSETS TURNOVER
RATIO

2014-15 5318.67 993.19 5.36

2015-16 6365.89 1053.18 6.04

2016-17 8308.85 1049 7.92

2017-18 9534.95 1190.33 8.01

2018-19 9479.44 1448.79 6.54

GRAPH 7
FIXED ASSET TURNOVER RATIO
10

6
FIXED ASSET TURNOVER
RATIO
4
2

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 fixed asset turnover ratio is 5.36, in the year 2015-16 is 6.04, in
the year 2016-17 is7.92, in the year 2017-18 is 8.01 and in the year 2018-19 is 6.54.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the fixed asset
turnover ratio has increased in the year 2015-16 compare to year 2014-15, again
increased in the year 2016- 17, again increased in the year 2017-18 and again
decreased in the year 2018-19.

8.Return on total assets ratio

The return on total assets (ROTA) is a ratio that measures a company's earnings before
interest and taxes (EBIT) or net profit against its total net assets. The ratio is considered
to be an indicator of how effectively a company is using its assets to generate earnings
before contractual obligations must be paid.
TABLE- 8
YEAR NET PROFIT TOTAL ASSETS RETURN ON TOTA
ASSETS RATIO

2014-15 5107.04 3925.83 130.09

2015-16 6071.37 11308.71 53.69

2016-17 5964.24 12493.88 47.74

2017-18 6974.21 13887.35 50.22

2018-19 6809.18 15325.96 44.43

GRAPH-8

RETURN ON TOTAL ASSETS RATIO

140

120

100

80
RETURN ON TOTAL ASSETS
60 RATIO

40

20

0
2014-152015-162016-172017-182018-19

ANALYSIS:

In the year 2014-15 return on total assets ratio is 130.09, in the year 2015-16 is 53.69,
in the year 2016-17 is 47.74, in the year 2017-18 is 50.22 and in the year 2018-19 is
44.43.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on total
assets ratio has decreased in the year 2015-16 compare to year 2014-15, again
decreased in the year 2016- 17, again increased in the year 2017-18 and again
decreased in the year 2018-19.

9.GROSS PROFIT RATIO

Gross profit margin is a financial metric used to assess a company's financial health and
business model by revealing the proportion of money left over from revenues after
accounting for the cost of goods sold (COGS). Gross profit margin, also known as gross
margin, is calculated by dividing gross profit by revenues.

TABLE- 9
YEAR GROSS PROFIT NET SALES GROSS PROFI
RATIO
2014-15 5668.52 5318.67 106.58
2015-16 6862.21 6365.89 107.80
2016-17 6754.77 9308.85 72.56
2017-18 7655.42 9534.95 80.29
2018-19 7727.35 9479.44 81.52

GRAPH-9

GROSS PROFIT RATIO

120

100
60
GROSS PROFIT RATIO

40

20
ANALYSIS:
0
2014-15 2015-16 2016-17 2017-18 2018-19
In the year 2014-15 gross profit ratio is 106.58, in the year 2015-16 is 107.8, in the
year 2016- 17 is 72.56, in the year 2017-18 is 80.29 and in the year 2018-19 is 81.52.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on gross
profit ratio has increased in the year 2015-16 compare to year 2014-15, decreased in
the year 2016-17, again increased in the year 2017-18 and again increased in the year
2018-19.

10.NET PROFIT RATIO

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized.

TABLE-10

YEAR NET PROFIT NET SALES NET PROFIT RATIO

2014-15 5318.67 5318.67 100

2015-16 6361.13 6365.89 99.93

2016-17 8066.33 9308.85 86.65

2017-18 9160.01 9534.95 96.07

2018-19 9065.59 9479.44 95.63

GRAPH-10
NET PROFIT RATIO
105

100

95

90
NET PROFIT RATIO

85

80

75
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 net profit ratio is 100, in the year 2015-16 is 99.93, in the year
2016-17 is 86.65, in the year 2017-18 is 96.07 and in the year 2018-19 is 95.63.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on net
profit ratio has decreased in the year 2015-16 compare to year 2014-15, again
decreased in the year 2016- 17, again increased in the year 2017-18 and again
decreased in the year 2018-19.
CHAPTER-5
FINDINGS, SUGGESTION AND CONCLUSION

FINDINGS

1-The stock turnover ratio has decreased in the year 2015-16 compare to year 2014-
15, again increased in the year 2016-17, again decreased in the year 2017-18 and
again increased in the year 2018-19.
2-The inventory to working capital ratio has increased in the year 2015-16 compare
to year 2014-15, again increased in the year 2016-17, again increased in the year
2017-18 and again decreased in the year 2018-19.
3-The inventory to current asset ratio has decreased in the year 2015-16 compare to
year 2014- 15, again decreased in the year 2016-17, again increased in the year 2017-
18 and again decreased in the year 2018-19.
4-The current asset turnover ratio has decreased in the year 2015-16 compare to
year 2014-15, again increased in the year 2016-17, again increased in the year 2017-
18 and again decreased in the year 2018-19.
5-The current ratio has decreased in 2015-16 compared to 2014-15, again increased
in the year 2016-17, again increased in 2017-18 and again decreased in the year
2018-19.
6-The quick ratio has decreased in the year 2015-16 compare to year 2014-15, again
increased in the year 2016-17, again decreased in the year 2017-18 and again
decreased in the year 20158-19.
7-The fixed asset turnover ratio has increased in the year 2015-16 compare to year
2014-15, again increased in the year 2016-17, again increased in the year 2017-18
and again decreased in the year 2018-19.
8-The return on total assets ratio has decreased in the year 2015-16 compare to year
2014-15, again decreased in the year 2016-17, again increased in the year 2017-18
and again decreased in the year 2018-19.
9-The return on gross profit ratio has decreased in the year 2015-16 compare to year
2014-15, again decreased in the year 2016-17, again increased in the year 2017-18
and again increased in the year 2018-19.
10-The return on net profit ratio has decreased in the year 2015-16 compare to year

CONCLUSION
The inventory comprises raw materials, work in process ,finished goods , spares and
other stock in order to meet an unexpected demand distribution in the feature .

The study is conducted on inventory management at EXIDE INDUSTRIES ltd to find

out their existing inventory management system and their effectiveness. The main
objective of the study is to determine the efficiency of the inventory management and
to study various components of inventory at EXIDE .

With the help the ratio analysis to analyze the performance of the inventory
management at Exide industries Ltd over the period of five years and to determine the
management of the inventory, account receivables accounts payables ,accruals , and
other means of short term financing, It is found that the inventory turnover ratio of the
company is fluctuating year by year .
The raw materials turnover ratio is also fluctuating year by year . The amount of
inventory to current assets ratio is sufficient and the inventory growth is fluctuating
so that,

The company has to take necessary steps to control and to manage the inventory
efficiency and also to adopt new techniques in order to increase the production
and scales .

SUGGESTION
On the whole, the study reveals that the company is maintaining proper inventory
management system. However with a view to improve the performance and working
result further following suggestions:

 There should be frequent stock rectifications

 The turnover ratio can be improved by less stock accumulated and by higher
sales

 The company can reduce conversion period

 The company has to be careful when selection of vendor that will

result in better quality output and cost

 Timely and correct estimation of raw materials is needs to be ensured

 The company need to improve the liquidity position

 The percentage of the inventory in current assets is good, it is

suggested to the company to maintain the same
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