Inventory Management System

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Project Report
On

SPARE PARTS INVENTORY MANAGEMENT SYSTEM
Undertaken At

COLGATE PALMOLIVE INDIA LIMITED

EXECUTIVE SUMMARY
The main problem faced by the production & stores is the poor availability of spare parts of various machines. The non-availability often leads to loss in production time.

The objective of the current project is to design a user friendly inventory management system that would minimize stock outs and at the same time help in maintaining optimum inventory levels according to the criticality of the material.

For the identified electrical spares, classification has been done on the basis of criticality. For this, three parameters have been considered viz., lead time, cost and effect on operations. For A category items line wise data has been collected to know the actual installed quantity of each item.

All A category items would be identified with a 10 digit material code (e-code). Also, the manufacturer‟s catalogue number has been mentioned for every item. This catalogue number has been hyperlinked with a soft copy of the specification sheet of the item. This specification sheet has been taken from the website of the manufacturer.

After identifying a preferred make with the item, the discount rates have been negotiated with 13 vendors. The negotiation happened in two stages and the discount rate at the end of second stage has been confirmed. For B & C category items for which e-code is not created a catalogue format has been prepared that is compatible with eBuy.

The consumption for the spares for a period of ten months (Jan 2009 to Oct 2009) has been determined. The inventory policy has been decided on the basis of classification of the material and at the same time due importance was given to the demand and installed quantity of the item. For A & B category items EOQ, (S-1,S) policies have been applied. For C category items the Reorder Quantity is selected in such a way that it would satisfy atleast 6 months demand.

To monitor the A category items closely a Microsoft Excel based reordering tool has been designed that would help in monitoring the A category items inventory levels.

A brief outline of the methodology adopted in the project is:        Study of the previous work done on spare parts management Data collection on spare consumption pattern Cataloguing of regularly procured spares Collection & Negotiation of rates with the vendors Inclusion of rates in the catalogue Designing an appropriate inventory policy Designing a system that would generate a report on spares to be procured

Key Benefits of the project are:      Visual control of inventory levels. Providing comprehensive information about the spares. Location wise tracking of critical spares. Weekly / bi-weekly updates on spares to be controlled. Reduced risk of stock outs

Table of Contents
1. COLGATE PALMOLIVE INDIA Ltd. ............................................................................................. 1 1.1 ABOUT THE PLANT ..................................................................................................................... 1 1.2 PLANT LAYOUT ........................................................................................................................... 2 1.3 PLANT PROCESS LAYOUT .......................................................................................................... 2 1.4 PRODUCT PORTFOLIO OF COLGATE PALMOLIVE (I) LIMITED.............................................. 3 2. PROBLEM DEFINITION ................................................................................................................... 5 2.1 OBJECTIVE ................................................................................................................................... 5 2.2 SCOPE OF THE PROJECT ............................................................................................................. 5 2.3 NEED FOR THE PROJECT...
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