Inventory Management

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  • Topic: Inventory, Steel, Corus Group
  • Pages : 29 (9834 words )
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  • Published : April 1, 2013
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A STUDY ON INVENTORY MANAGEMENT OF VIKI INDUSTRIES PRIVATE LIMITED, CHENNAI

INTRODUCTION
As every business concern irrespective of size, nature and age needs an adequate level of inventory to carry out business operations and survive. Inventory becomes an important and integral part of business inadequate inventories means interruption of production and sales operation whereas excessive inventories means accumulation of idle funds and increase in carrying cost. Therefore, to manage inventories in any sector is challenging job. The project report titled “A study on inventory management of Viki Industries Private Limited” deals with this matter and is based on the final year project at Viki Industries Private Limited pertaining to the requirement for the master of business administration from Easwari engineering college. Inventory, or stock, is defined as the stored accumulation of material resources in a transformation system. For example, a manufacturing company will hold stocks of materials, and an accounting firm will hold stocks of information. The planning and controlling of these inventories is also known as inventory management. It is an important concern for all types of businesses as effective inventory is essential for realizing the full potential of a supply chain. The challenge is not to have as little inventory as possible in hopes of reducing costs or overstocking to satisfy all demands, but to have the right amount to achieve your business' competitive priorities. This type of efficiency can only happen if the right amount of inventory is flowing through the supply chain - through suppliers, the firm, warehouses or distribution centre, and customers. Inventories play a major role in any business and affect everyday operations because they must be counted, paid for, used in operations, used to satisfy customers, and managed. Inventories require an investment of funds and as such, the capital is not available for investment in other things as they represent a drain on the cash flows of an organization. Despite this, the constant availability of products is a key selling point in many markets and even critical in others. As a general guideline, having too much inventory on hand can significantly reduce your business' profitability, while too little on hand creates shortages in the supply chain which ultimately damages your customer's confidence in your product. Inventory is always dynamic. Inventory management requires constant and careful evaluation of external and internal factors and control through planning and review. Most of the organizations have a separate department or job function called inventory planners who continuously monitor, control and review inventory and interface with production, procurement and finance departments. Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet. Every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can impact the financial figures. “An adequate inventory facilitates production activities and help to customer’s satisfaction by providing good service”. Inventory control is one of the key elements of overhead management which is a major factor in the net profit of any business. It serves as a link between production and distribution process. The investment in inventories constitutes management significant part of current asset or working capital in most of the undertakings. Thus it is very essential to have proper control and management of inventories. The purpose of inventory management is to ensure availability of material in sufficient quantity as and when required and also to minimize investment in...
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