a study on inventory at imac india ltd

8/10/2019 A Study on Inventory at Imac India Ltd.

1/63

A study on inventory management INDIA

GOVT. first grade college. vijayanagar Page 1

CHAPTER 1

INTRODUCTION

FINANCE

Finance is the life-blood of business. It is rightly termed as the science of money.At policies activities and decision of every business. Finance is that business

activity which is concerned with the organization and conversation of capital fundsin meeting financial needs and overall objectives of a business enterprise. The fundsare available in the economy from different resource i.e. primary market, secondarymarket, money market and all personnel funds. All these sources are exploitedthrough the issue of long term financial instrument.

FINANCIAL MANAGEMENT

MEANING

Financial management is that managerial activity which is concerned with theplanning and controlling of the firms financial resources. Financial management isa subject which deals with tools and techniques through which a balance sheet isconstructed. It offers ideas to the executive in building items in liabilities and assetsside of balance sheet. It clearly guides the financial manager to select the both longterm and as well as short term funds and its allocation to capital and revenueexpenditure. Hence, ultimately used as a tool to convince the Investors about the

performance of corporate entity.


2/63



DEFINITION OF FINANCIAL MANAGEMENT

Financial management is the operational activity of a business that is

responsible for obtaining and effectively utilizing funds necessary for efficient

operations.

Financial management may be defined as that area or set of administrative

function in an organization which relate arrangement of cash and credit so that the

organization may have the means to carry out its objectives in a satisfactory

manner.

By HOWAED AND ORTON

EVALUATION OF FINANCIAL MANAGEMENT

Financial management is a recent origin. The evaluation can be traced

in1920 and 1930. Its importance was realized in recession of 1930. Corporations

were feeling it difficult to raise required capital from the public. Many firms went

on reconstructing their business in order to manage their financial crisis. Thus

modern phase of the subject started after 1950s during this phase, management

stress on both activities of financial i.e rising of required financial and its

investment.

SCOPE OF FINANCIAL MANAGEMENT:

Based on scope of financial management it has two approaches

Traditional approach


3/63



Modern approach

TRADITIONAL APPROACH

This was relevant to 1950s. it deals with rising & administration of funds

required for investment in long term assets .

In brief the traditional approach stressed on fallowing aspects.

Raising & administration of funds.

Seeking the support of instructions to raise the required funds.

Types of securities to be issued.

Relationship between the firms & sources of funds.

MODERN APPROACH

Popular after 1950 it considers aspects of finance i.e :

Raising of funds.

Investment of those funds.

Modern approach deliberates on 3 major decisions of finance i.e

Investment decision

Financial decision

Dividend policy decision


4/63



OBJECTIVES OF FINANCIAL MANAGEMENT

PROFIT MAXIMISATION

Profit is the only mean through which an efficiency of organization can bemeasured. Firms have various options of business. They select those opportunitiesthat give maximum returns.

WEALTH MAXIMISATION

This objective of financial management is defined from investors point of view

and from the angle equity shareholders. It include those financial policies thatmaximizes the wealth of the firm along with that of equity holders wealth ismeasured in terms of inflows and outflows of cash.

OTHER OBJECTIVES

Balance sheet structure

Liquidity

Judicial planning of funds


5/63



AS OF FINANCIAL MANAGEMENT

Anticipating financial needs

Acquiring financial resources

Allocating funds in firm

Administrating allocation of funds

Analyzing the the performance of finance

Accounting & reporting of management

TOOLS OF FINANCIAL ANALYSIS (METHODS)

A) Financial statement: It deals with the status of investment in the business

& the returns achieved during the period under revenue.

Various financial statements:

Fund Flow Statement

Balance Sheet

Retained Earnings


6/63



Profit & Loss Account

Cash Flow Statement

B) Ratio Analysis: Ratio analysis is widely used tool of financial analysis. A

ratio is defined as the indicated quotient of two mathematical expressions &

the relationship between two or more things. In financial analysis is ratio is

used for evaluating financial position & performance of a firm.

C) Comparative Statement : Comparative statements are the financialstatement of different period of time where the elements of financial status

are put in a comparative from in order to compare the figures of financial

statements like balance sheet & Income statements of two periods .

D) Common size statements : these statements are also known as

components percentage or 100 statements. Where the values of total assets

& total liabilities & total sales are expressed in percentage & the balance

sheet is converted into percentage.

Trend analysis It is an important & useful technique of financial statement

analysis. The calculation of trend ratio involves the ascertainment of

arithmetic relationship which each item of several years to the same item of

the base year. Thus one particular year out of many years is taken as base.

The value of one particular year out of many years is taken as base. The

value of one particular year out of many years is taken as base. The value of

one particular item out of several items shown in financial statements are

converted into ratio or percentage taking of that item in base year as equal to

100.


7/63



THEOROTICAL BACKGROUNG OF INVENTORY MANAGEMENT

INVENTORY MANAGEMENT

In any business or organization, all functions are interlinked and connected toeach other and are often overlapping. Some key aspects like supply chainmanagement, logistics and inventory form the backbone of the business deliveryfunction. Therefore these functions are extremely important to marketing managersas well as finance controllers.

Inventory management is a very important function that determines the health ofthe supply chain as well as impacts the financial health of the balance sheet. Everyorganization constantly strives to maintain optimum inventory to be able to meet itsrequirements and avoid over or under inventory that can impact the financialfigures.

Inventory is always dynamic. Inventory management requires constant and carefulevaluation of external and internal factors and control through planning andreview. Most of the organizations have a separate department or job function calledinventory planners who continuously monitor, control and review inventory andinterface with production, procurement and finance department.

INVENTORY OF AN INDUSTRIAL UNDERTAKING CONSIST OF:

Stock of raw materials to be consumed in the production of goods for sale Work in progress ( i.e. stock of semi-finished goods) in the process

production of finished goods for sale. Stock of finished goods held for sale in the ordinary course of business.


8/63



Maintenance of stores and spares parts or production supplies held forconsumption by machine.

Consumable supplies

DEFINITION OF INVENTORY

The term inventory has been defined by several authors. The most popular ofthem are the term inventory includes raw-materials in process, finished packaging,spares and other stocked in order to meet an unexpected demand or distribution inthe further.

Inventory is an idle stock of physical goods contain economic value, and areheld in various forms by an organization in its custody awaiting packaging,

processing, transformation, use , use or sale in a future point of time.

IMPORTANCE OF INVENTORY

Inventories constitute the largest component of current assets in manyorganizations. Poor management of inventories therefore may result in businessfailures. A stockout creates an unpleasant situation for the organization. In case ofa manufacturing organization, (in stock out ability to supply an item frominventory) could, in extreme cases, bring production process to a half. Conversely,if a firm carries excessive inventories, the added carrying cost may represent thedifference between profit and loss. Efficiency inventory control therefore, cansignificantly contribute to the overall profit- position of the organization.

Managing of working capital is synonymous. Good inventory management is

good finance management. An efficient management of inventory result in the

maximization of the owners wealth the financial manger is actually a kind of a

watch- dog over other function areas. Organizations more often than not have to tie


9/63



up a need for large percentage of capital in raw materials and work-in-progress

then finished goods. The former not only represent two-fold capital investment in

finished goods but also takes linger to covert in to revenue via the medium of sales.

TYPES OF INVENTORY

Raw materials: To hold stocks of raw material. An organization deploys its

primary productions section or process to obtain raw materials from

manufacturing and stackists.

Work-in-progress: The holding of both raw materials and stocks of finished

goods is generally a planned activity. In process stocks however are likely to

exist in any manufacturing organizationwhether they are planned for or not.

Finished goods:The stock of finished goods provides buffer between

consumer and demand and manufactures suppliers.

Flabby inventory:it comprises finished goods raw materials and stores held

because of poor working capital management and inefficient distribution.

Profit-making inventory: it represents stock of raw materials and finished

goods held for realizing stock profit.

Safety inventory:It provides for failures In demand etc.. although there may

be an insurance cover.

Normal inventory:It is based on a production plan, lead time of supplies and

economic ordering levels normal inventories fluctuate primarily with change

in production plan.


10/63



Excessive inventory:Even an efficient management may be compelled to

build up excessive inventory for reasons beyond its control as in the case of

strategic import or as a measure of government price support of a commodity.

Objectives of inventory management:

1. To have stocks available as and when they are required

2. To utilize available storage space but prevent stock levels for exceeding

space availability

3. To meet a high percentage of demand with out creating excels stock

levels in others words neither to over-stocks nor to run out are best

policy.

4. To maintain adequate accountability of inventory assets.

5. To maintain the total volume of replenished work-load with in the

constraints of acceptable personnel complement.

6. To contribute to profitability

7. To contribute to the nations economic well-being.

8.

To decide which items to stock and which items to procure on demand.

9. To bring down the inventory carrying cost this is considerable.

10.To keep all the expenditure with in the budge authorization.

11.To facilitate purchasing economics.


11/63



12.To provide a check against losses of materials through careless of

pilferage.

13.

To permit a better utilization of visible stocks by facilitating

interdepartmental transfer with in a company.

14.To enable the management the management to make costs and

consumption comparisons between operations and periods.

15.To serve as a manse for the location and disposition of inactive and

absolute items of stores.

FACTORS INFLUENCING INVENTORY MANAGEMENT:

Lead time:

Lead time is defined as the period which laps between the

reconnection of a need and its fulfillment. There is a direct relationship

between lead time and inventory during lead time. There is no delivery of

materials and the consuming departments are served from the existing

inventories both lead time and consumption rate can be increased in

inventory control the delays between placing the requires and the time

included in the order on a suppliers and the time at which issues of the items

included. In the order can be made are known as lead time delays.

Cost of holding inventory:

Inventories tie up funds. They also expose a firm to number of risks

and costs. The inventory problem is one of balancing the various costs are


12/63



material cost, cost of ordering or carrying the inventory under stocking cost

and over-stocking cost.

Materials cost:

This is the cost of purchasing goods plus the transpiration and

handling charges.

Order cost:

This is a variable cost of placing an order for goods. Every time a places and order

a particular procedure has to be followed forms must be type approved and

dispatched when goods arrive they must be accepted inspected and counted.

Cost of carrying inventory

The components of those costs are:

a. The cost of capital that is the cost of the money invested in the

inventory

b. The cost of storage that is the cost of the rent and depreciation charges

incurred on space stocks and other equipment used in the storage o

items.

c. The cost of deterioration of items which have a low shelf life.


13/63



d. Salaries and statutory payments of stores personnel this is the

expenditure involved in the storage of goods.

Cost of typing-up of funds

When funds are invested are invested in the inventory. It is obvious

that they are not available for any other use. An inventory may be financialing or

even by the sale of stock.

Cost of under stocking

Excess investment represent additional and unnecessary costs.

Storages of inventory delay of fulfillment of contractual orders. This would

involve loss of profit or some kind of indirect costs, under stocking due to

non-stocking of an inventory.

Cost of over stocking.It is basically opportunity cost arising out the investment in

inventory for a longer period them necessary.

a.

Re-order point:

The re-order point indicates when an order should be placed and

depends up on the consumption rate and the duration of lead time the

simplest method is to place an order when the inventory is depleted to

the lead time consumption level.


14/63



b.

stock:

In inventory control different terms are used such as safety stock

reserve stock buffer stock and soon, the buffer stock provides for

normal consumption during an average lead time the reserve stock

provides for an increases consumption rate. While safety stock for an

increasing lead time the buffer in fact is the multiplication of normal

consumption and average lead time.

c. Variety reduction:

In organization which have to stock innumerable items it is

imperative to reduce the number of items carried in an inventory number

of items particularly the different small items which are sparingly used. In

the case of work-in-progress the increase in varieties may be due to

technical bottlenecks. There are also variety increases in output if an

organizations policy is to have as many varieties as possible.

d.

Materials planning:

Materials planning have to be converted in to material plans so that

the quality and time schedule o frequirements may be defined. A

divorce of material planning from inventory control results in to a

tremendous increase in the size of the working capital materials

planning., to be precise is a mechanism which precious the


15/63



environment for inventory control to have a successful materials

planning.

e. Service level:

The practice the concept of services is more easily handled than the

risk of running out of stock. The degree of service indicates a

percentage of the number of replenishment order which arrive with

out difficulty and make it possible for a firm to render an adequate

service to the customers. The related standards of service are:-

a) Percentage of customer orders which can be delivered

immediately from stock.

b)Percentage of products which can be delivered immediately from

stock.

c) Percentage of the time during which stock is available.

f. Absolute inventory and scrap:

An inventory becomes obsolete because of changes in product design or because of

technological changes obsolesce cannot be controlled with out a proper

identification of inventories which might become absolute from time to time no

manufacturing system can be percent efficient.

g. quantity discounts


16/63



Quantity discounts are offered by the vendor to the purchase. In the order to induce

purchasers suppliers often offer a reduced price for bulk order as a result.

There is a saving percentage are offered by the vendor to the purchase in order to

induce purchasers suppliers often offer a reduced price for bulk orders as a result.

Since the order size is big if discount is taken there are fewer orders per time unit.

There is thus a saving in total procurement cost.

There is a change in carrying costs less inventory investment is required per unit

but large number of order results in the provision of more units in inventory.

ECONOMIC ORDER QUALITY

Economic order quality refers to that level of inventory at which the cost ofinventory is minimum. The total inventory cost comprising ordering and carrying

costs. Shortage costs are executed in adding total costs of inventory due to the

difficulty in computation of shortage cost. EOQ also know as Economic Lot Size.

Assumptions of EOQ Model.

The following assumption are implied in the calculation of EOQ

Demand for the product is constant and uniform throughout the

period.


17/63



Lead time (time from ordering to receipt) is constant.

Price per unit of is constant.

Inventory holding cost is based on average inventory.

Ordering costs are constant and

All demand for the product will be satisfied. (no back orders are

allowed )

EOQ formula

EOQ can be obtained by adopting two methods

A)Trial and error approach and

B)Short cut or simple mathematical formula. Here for calculation of

EOQ we have adopted simple short cut method.

The formula is EOQ=2AO/CC

INVENTORY VALUATION


18/63



Many methods of materials costing and inventory valuation has come into use

among the more common methods of costing materials and valuing inventories are;

First in First Out Method (FIFO)

Here the earliest acquired stock is assumed to be used first. The stock is

assumed to be used first. The stock which is bought 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.

The method is claimed to accurate for the reason that the materials are charged

into production at actual cost in the order of receipt. The closing inventories are

valued at the most recent prices. If the closing inventory balance includes material

at several different prices, the problem of considerable clerical work is involved.

This method assumes that the order in which materials are received in the stores is

the order in which material are issued from the stores.

Hence the materials which is issued first is issued first is priced on the basis of the

cost of material received earliest. Soon and so forth.

Last in first out method (LIFO)

This method is the opposite of the FIFO method. It assumes that the material which

is acquired last is issued first. Hence materials issued are priced on the basis on the

basis of the cost recent purchase.


19/63



Weighted average cost method

Under this method issued are priced at the weighted average

cost of materials in stock (The weights being proportional to quantities).

To get an unto date weights average cost figures, a new weighted average

cost is calculated each times a delivery is received.

Standard price (cost) method:

Under this method a method a standard price is pre-determined

when material are purchased the stock account is debited with the standard price.

The different between the actual price and standard price is carried to a variance

account. Material issued is charges as per the standard price.

5) Current price method

According to this method issues are priced at their replacement or

realizable price at the time of issue.

SIMPLE AVERAGE METHOD


20/63



under this method, material issues are valued at average price. It is calculated

by dividing the total price of the materials in the stock, from which the material

to be priced could drawn by the number of prices used in that total. The issues

price is determined as follows:

Issue price= Unit prices of materials in stock

Number of purchase

Budgetary control system

Through budgets inventory consumption and levels is co-ordination with the

expected usage. The inventory budget is a dynamic planning control that

accomplished the same general purpose as the controls for planning cash position

and debtors, the inventory budget is the controls for planning cash position and

debtors.

The inventory budget is plan for investing funds in stock at regular

intervals via raw materials purchases, goods in process of manufacturing

and finished goods. The budget is also plan for releasing guns from

inventories to liquid assets through sales.

MANAGEMENT OF INVENTORY

Inventories, measured by rupee value constitute the major element in the

working capital of many business undertaking control of inventories which in


21/63



manufacturing concern include raw materials and supplies, goods is often the most

problem in the management of capital.

The problem of managing inventories in manufacturing enterprise is

relativity complex. Once they are understood the basic concept can be applied to

inventory problem in commercial and trading concern.

Advantages of holding inventory:

Quick service: customers desire a prompt fulfillment of order. A film

will have to make the goods available for sale goods available for

sale. In the event of its not being able to offer quick service to

customers.

Discounts:a firm is in a position to take advantages of trade discounts

by placing bulk order with suppliers. A proper proportion will have to

be maintained between the cost of maintaining inventories and the

discounts that is likely to be gained.

Reduction in order costs:each other increased certain costs. If the

number of order is reduced. It is possible to economies on these costs.


22/63



Efficient production runs:inventories help a firm to make

sufficiently long runs and there by achieve efficient production with

an increase in the production with an increase in the production run.

Protection against shortages:adequate inventories protect a firm

against the shortages that would result in production stoppages and

considerable losses.

Effective of holding low stock

No service levels:Often customer demand cannot be satisfied

leading to immediate loss of business.

Increased production control costs:an enterprise may have to

rush special productions runs re-organized schedules an

inordinately high level of chasing etc..

Increased replishment costs :when operating with low stack

levels average replenishment orders would be placed more

frequently.

Effective of holding of holding high stock:


23/63



Increased storage costs

Increased capital investment which reduces the capital

investment. Which reduces the capital available for other

activities and projects.

Increased risk of obsolescence.

Increased opportunities for obtaining purchase discounts by

bulk ordering.

High levels of services.

BENEFITS OF INVENTORY CONTROL

Proper management and control of inventories will result in the following

benefits to an organization.

1) Inventory control ensures an adequate supply of materials, stores etc..

minimizes stock outs and storage, and avoids costly interpretation in

operations.

2) It keeps down investment in investment in inventories, inventory carrying

costs and obsolesce loses to the minimum.

3) If facilitates purchasing economics though the measurement of requirement

on the basis of recorded experience.


24/63



4) It eliminates duplication in ordering or in replenishing stock by centralizing

the source from which purchase requisitions eliminate.

5) It permits a better utilization of available stocks by centralizing the sources

from which purchase requisitions eliminate.

6) It provides a better utilization of available stocks by facilitating inter

department transfer with a company.

7) It facilities cost counting activities by providing a means for allocating

material costs to products, departments or other operating accounts.

8) It enables management to make cost and consumption comparisons between

operations and periods.

Selective collection of inventory:selective control is very simple approach. It is

the avoidance of the penny wise and pound foolish policy for the purpose of

selective control a definite system of classification is attempted.

DIFFERENT CLASSIFICATION METHODS


25/63



ABC classification: This is the one of the widely used techniques to identify

various items of inventory various items of inventory for the purpose of inventory

control. In the other words it is very effective and useful tools for classifying

monitoring control inventories. . The firm should not keep same degree of control

on all the items of inventory. It is based on praetors law. It is also known as

selective inventory control. The turmoil maximum control on those items whose

monetary value is also known as selective inventory control. The firm should put

maximum control on those items whose monetary value is the highest, with thecomparison of the other two items.

VED classification:it applies largely to space parts. The demand for spare parts

depends on the performance of equipment. The vital spares should be stocked may

be stocked adequately essential parts may be stocked rather sparing for some risk

can be taken in stacking such spares.

FSN classification:the FSN classification is mainly attempted on the basis of the

earlier periods of the consumption pattern. It is made on the basis of how material

has moved during the earlier on the value of items in storage

HML classification:this classification is made on the basis of the unit value of

items. Some items may be low-value items may be low-vallue items while others

may be highvalue items.


26/63



SDE classification:the SDE classification is made on the basis of the scarcity of

materials. The materials are classified on the basis of the nature of suppliers. The

quality and continuity of supply.

XYZ classification:this is attempted on the basis of the value of items in storage

the purpose is to classify inventories and there uses at schedule intervals. In

conclusion. It may be said that if is desirable to apply a selective control approach

to the problem.

CHAPTER- 2

RESEARCH DESIGN

RESEARCH DESIGN


27/63



A research design is preliminary design of research work to be carried out and is an

agreement to the condition for collection and analysis of data in a manner that aims

to combine prevalence of research design with respect to work carried on.

An explanatory research is used for the above mentioned objectives. This type

of Research design is identified as applicable for thids study while keeping in

mind.

Title of the study.

The statement of the problem.

Objectives of the study.

The research design for this study includes the research design for this

study period between 2011 TO 2013. That is 3 years. The above

research design was agreed by both the researcher and the company and

this is a house research work and involved extensive analysis of the

company statement and did not involve questionnaires.

PLACE:

#129/1B, industrial area,

mysore road,


28/63



kengeri,

Bangalore-560060

STATEMENT OF PROBLEM

One aspect every company has to bear in mind is that they should try to reduce the

cost to increase their profits.

Every business firm small or big has to maintain inventory and it has been

estimated restaurant constitute a significant portion current assets. Inventories

require a significant investment not only to acquire them but also hold them.

Investment in inventory should be idle. but it is unavoidable in any organization

manufacturing or trading. So inventory cost has become necessary evil.

Thus it would be every interesting to throw light upon the structure of inventory of

the company in of the in order to point out the degree of efficiency with which

funds were utilized in the major component of working capital.

TITLE OF THE STUDY

A study onINVENTORY MANGEMENTconducted at IMAC INDIA

COACH BUILDERS (P) LTD.,


29/63



OBJECTIVES OF THE STUDY

The main objectives of the study are;-

To study the inventory management which exist in IMAC INDIA.

To study the current position of IMAC INDIA.

To equip myself better in the area of inventory management and control.

To study the effectiveness of inventory management over the past few years

by conducting ratio analysis. Inventory performance indication by analyzing

the data using tables, graph, ratio and statistic.

To make comparison between the inventory statements of the three years.

To analyze the functions, procedures in inventory management and control.

To study classification of raw materials.

To study competitive environment.

To study the effectiveness of inventory management in todays world.

suggest some strategies, remedies in various aspects of inventory

management

DURATION OF THE STUDY

The time taken to complete the study is one month.

DATA COLLECTION METHOD


30/63



Both primary and secondary data are used to obtain the required

information.

SOURCES OF DATA CAN BE CLASSIFIED AS

PRIMARY DATA

Primary data is collected through gathering the information from different

department managers and officers of the company to get information about the

company and its activities

SECONDARY DATA

Secondary data is a data collected from different published sources.

Collection of data through company annual reports, company manual and

other relevant documents.

By text books, journals and magazines.

Collection of data through the literature provided by the company.

By websites and internet.

SCOPE OF THE STUDY

The scope of the study is limited to inventory management activities and

techniques followed by IMAC INDIA. It includes only secondary data

collection from various sources like income statement, ledger books,

computer systems, documents, records, account books of the company etc

The study seeks to find the facts and opinion of inventory

management and control at IMAC INDIA.


31/63



It aims mainly at finding out the inventory control procedures at

IMAC INDIA in a accordance with the present trend

Limited to the information that could be gathered from personal and

the records that were made available.

LIMITATIONS OF THE STUDY

Time restriction.

The needed information, could not be made public by the company

Discussion with all related officials was not possible.

The study covered a wide concept hence wide collection and coverage

of information was not easily possible.

IMAC INDIA is a private limited company hence financial reports are

not available to make complete analyses of performance.

Within the above limitations efforts are made to reach realistic

conclusion.

RESEARCH METHODOLOGY

To reach the objectives of the study, only secondary data have been used

The data collected from reports generated on the holding published

information on inventory costs, ledgers, documents, account books,

company brochures, and magazines etc.

Inventory for the last years 2011-13 as taken to calculate the some

important inventory ratios.

PLAN OF ANALYSIS


32/63



CHAPTER SCHEMES

The chapter scheme followed in the preparation of this reports is ;-

Chapter-1.INTRODUCTION

This chapter give a briefly introduction of financial management, financial

statement & introduction of title components of Inventory management,

need of inventory management components of inventory management.

Inventory management & also give about the IMAC INDIA PVT LTD.

CHAPTER-2.RESEARCH DESIGN

This chapter covers title of the study with introduction, statement of the

problem, objectives of the study, methodology, scope of the study, tools for

data collection, & limitations of the study are discussed here.

CHAPTER-3.COMPANY PROFILE

This chapter includes company profile, product profile,& list of machine.

CHAPTER-4.ANALYSIS & INTERPRETATION

This part of the study contains the analysis & interpretations of the financial

reports of the company with the help of charts, graphs & tables.

CHAPTER-5.FINDINGS & SUGGESTIONS

This chapter gives the suggestion & recommendations to the management

which were found by study.

CHAPTER-6.CONCLITIONS

This chapter includes the study of with the major findings

BIBILOGROPHY


33/63



PROFILE OF IMAC INDIA COACH BUILDERS PVT LTD

Corporate IdentificationNumber

U34102KA2010PTC053284

NameIMAC INDIA COACH BUILDERS PRIVATELIMITED

Registered office Kengeri

Registration Number 53284

Company Category Company limited by shares

Company Sub Category Indian Non-Government Company

Class of Company Private CompanyManaging director Ismail shareif

Working hours 9:30 to 6:30

Website Imacindia.com

Whether listed or not Unlisted

Date of Incorporation 19 April 2010

Address 1NO. 129/1B1, NEAR BMTC DEPOT 12,INDUSTRIAL AREA

Address 2 KENGERI, MYSORE ROAD,Blore-60

City BANGALORE

State Karnataka

Country INDIA


34/63



I-MAC is one of the leading companies engaged in bus body manufacturing in

Bangalore doing business with various government bodies and private

organizations across the country. Our contemporary designs, quality products,

market leading prices and prompt timely deliveries have made a big impact on the

Bus Body Building Industry in Bangalore. Since its emergence in Bus Body

Building domain, I-MAC has been successful in fulfilling the growing demands of

several leading Transport Corporations of the southern India.

Bus is the most common mode of transport used by public for both Inter City as

well as for Intra City operations. Until recent days people considered it a luxury if

the bus comes at its stipulated time. The commuter had no option, but to travel in

whatever mode of transport available. But the position has gradually changed


35/63



during the last 5 years. More number of buses are being inducted into the system.

Today the passenger has options in most of the prominent cities and routes.

Accordingly the passenger is attaching more importance to comfort and aesthetics.

Hence there is demand for comfortable aesthetically built attractive buses.

As regards to urban areas, pollution levels in major cities are crossing the limits

due to traffic pollution. The cities are also getting congested due to high

concentration of vehicles. Hence the Governments are motivating the public to use

public transport by offering them comfortable, safe and good looking buses.

I-MAC India Coach Builders Pvt.Ltd.is promoted by Mr. Ismail Shariff, who is

also the founder of KMS coach Builders pvt.Ltd., Bangalore. He has a very

rich experience of more than 20years in the automobile construction field. With

the constant increase in the customer base, the infrastructure of KMS was falling

much shorter to the requirements to cater the customer requirement. Hence the

Board of directors of KMS decided to establish one more industry with modern

infrastructure with higher production capacity. Thus I-MAC India Coach Builders

pvt.ltd came into existence.

Mr. Shar if f i s ably assisted by the fol lowing highly experienced professionals.

Mr. N. Gangadhar - Director-Technical

Mr. G.S.Rangarajan - General Manager

Mr. Abdul Subhan Amjad - Purchase manager

Mr. Kannan - workers Manager

Working hours of the IMAC INDIA

Morning 9:30 to 6:30


36/63



About Imac India Coach Builders Private Limited

Imac India Coach Builders Private Limited is a Private Company incorporated on

19 April 2010. It is classified as Indian Non-Government Company and is

registered at Registrar of Companies, Bangalore. Its authorized share capital is Rs.

10,000,000 and its paid up capital is Rs. 4,900,000.

It is based in Bangalore was established during APRIL 19,2010 with its works

situated at # 129 /1 BIndustrial Area, Kengeri on BangaloreMysore Highway.

We are one of the leading companies engaged in bus body manufacturing and

supplying to various government and private organizations across the country. Our

contemporary designs, quality products, market leading prices and prompt timely

deliveries have made a big impact on the bus body building industries situated in

Bangalore. Since its emergence in this business domain, IMAC has been

successfully fulfilling the growing demands of several leading Transport

Corporations of the India.

BUS BODY BUILDING

IMACis continuously making its mark in bus bodybuilding industry. In a short span of just THREE years,

they have served to several transport giants across southIndia. The company understands the changes our societyis going through and manufactures buses which suit tothese modern times.

it always make sure that passengers should feel
http://img1.tradeget.com/kmscoachbuilders/RDJR0IKQ1bus.jpg


37/63


38/63



Shearing Machine.

Heavy Duty Hydraulic Press Brake.

Modern Painting Booth of State of the Art Technology with separate

booth for Primer, Top Coat and baking oven. The painting booth can

accommodate 14buses at a time, in different stages of painting process.

Centralized Organ gas bunk with underground pipelines

10 Tank Zinc coating unit

In-house Powder Coating unit.

Full- fledged FRP Molding unit.

Jigs and fixtures for structure fabrication.

In-house window frame manufacturing unit.

Canteen for Employees with Modern facility. High Pressure shower Testing facility for Roof Leakage Test.

Diesel Generator to ensure continuous power supply.

A well designed plant layout.

Centralized Screw compressor of adequate power for pneumatic tools

operation

Heavy duty crane for movement of heavy jobs and also for loading and

unloading and unloading operation.

Modern Effluent Treatment Plant. In House Seat Manufacturing Plant: To ensure timely delivery of buses I-

Mac India has established In House a seat manufacturing unit with high

pressure foaming plant. This will also help us in developing passenger

friendly comfortable passenger seats according to the needs of the

customers.

Tube formation Unit: A lot of innovation is going on in the construction of

Bus bodies. Construction needs several new structural profiles which are

not normally available in the market.

Hence to support the R&D unit in development of new designs, we have

established a Tube formation unit in which we could develop any structural

profile at short notice.


39/63



HIGHLY SKILLED LABOUR FORCE:

I-MACis having highly skilled labour force in sufficient numbers. Since most of

the labour force is having over 10 years of experience in the field, the turnout isfast with high precision. Almost all the employees are youngsters and very active

in their work. We have been able to achieve the utmost satisfaction of our valued

customers.

Our Team:

IMAC INDIApossesses a team of experienced, qualified, and innovativeengineers, technicians and other professionals who are experts in their respective

areas. Our workforce makes all out efforts to ensure the delivery of the buses asper the del

Business Type : Manufacturer

Year Established : 2011

nnual Sales : Below US$1 Million (Upto Rs. 4 Crore approx.)

Total Employees : 101 to 500 People

QUALITY

I-MACis certified for ISO 9001/2008 quality standards. We have introduced gate

system for quality monitoring. The job is checked at each stage by competent

quality engineers and only after clearance at each stage, the job is allowed to the

next stage. By continuous monitoring, we are able to inculcate quality awareness

at grass root level.

ECO- CONSTVATION

With a view to conserve the nature, I-MAC has established a modern Effluent

Treatment Plant


40/63


41/63



Bangalore. Some of the worth mentioning customers we are serving are listed as

below:

Karnataka State Road Transport Corporation, Bangalore.

Bangalore Metropolitan Transport Corporation, Bangalore

North Eastern Karnataka Transport Corporation Ltd., Gulbarga.

North Western Karnataka Transport Corporation Ltd., Hubli.

CORONA Bus Manufacturing Co, PUNE, Maharashtra.

IRT- Chennai, TNSTC Ltd.,

Metropolitan Transport Corporation Ltd., Chennai.

SETC Ltd., Chennai (A unit of TNSTC)

Andhra Pradesh state transport corporation, Hyderabadect

Apart, from above listed State Transport Corporations, we are also constructingbuses for the two leading O.E. Manufacturers of India viz.,

Ashok Leyland Ltd., TATA Motors Ltd.,

PRODUCT

I-MAC has constructed the following types of buses for its esteemed clients:

Air-Conditioned Luxury Class Buses.

Rajahamsa Luxury Class Non A/c. buses Moffussil type bus for STUS with tubular structure.

City type double door buses with 2x2 seats.

SUVARNA improvised city type buses withpassenger friendly features.

Suburban type double door buses with 3X2 seats.


42/63



Staff & School Buses for educational institutions.

Composite Bus Bodies suitable for operation in coastal lines.

Semi Low Floor Buses for city operations.

Improvised Semi Low Floor JNNURM buses for BMTC &MTC Chennai.

And many more.

These are the few pictures of buses or product:-
http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')http://pop%28%27img/DSC00706.jpg')http://pop%28%27img/DSC00422.jpg')http://pop%28%27img/big-10.jpg')


43/63



Following are the facilities available at IMACto construct the bus bodiesmatching with international standards:

Modern Painting Booth with baking facility. 10 Tank process zinc plating & Hot Phosphating plant.
http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')http://pop%28%27img/ksrtc-NAL1.jpg')http://pop%28%27img/ksrtc-mof.jpg')http://pop%28%27img/DSC_1816.jpg')http://pop%28%27img/DSC_1545.jpg')http://pop%28%27img/DSC02022.jpg')http://pop%28%27img/DSC00738.jpg')http://pop%28%27img/DSC00724.jpg')


44/63



Machine shop comprising of Heavy duty shearing machine and press braketo fabricate components.

Water Shower Plant for Roof Leakage test.

CO2, Mig- Mag welding equipments. Diesel Generators for uninterrupted power supply. Hydraulically operated Panel Stretching Equipment. Centralised Screw Compressor for operation of pneumatic tools.

Showing organization structure of IMAC INDIA PVT LTD.

MANAGING DIRECTOR

TECHNICAL DIRECTOR COMMERCIAL DIRECTOR

GENERAL MANAGER

MANAGER

ENGINEER

ASSIST ENGINEER

WORKER


45/63



Production

We carry out our bus body production process effectivelyand make sure that no possibility of any flaws remains.The entire production stages are carried out smoothlyunder expert supervision to make sure the clients

requisites are met within the stipulated time-frame. Theproduction goes flawless which assure superior quality,durability and higher performing capability of the output

bus body.

Also, we are backed by constant supply of quality raw material procured fromreliable vendors along with committed team of employs which makes it easier tocomplete the production and deliver the final output within the agreed time-frame.Quality and durability are given extreme importance throughout the productionprocess, which has gained us our clienteles trust and appreciation for our final

output bus bodies.

OBJECTIVES OF PRODUCTION DEPARTMENT

To provide products and services

Process characteristic

Quality control

Effective employee relation

Cost control of labor
http://img1.tradeget.com/kmscoachbuilders/4KHQM25B1production.jpg


46/63



New Product Development

FUNCTIONS OF THE PRODUCTION DEPARTMENT

Avoid wastage of raw materials to extent possible

Carry on production as for the production schedule

To maintain quality and quantity production

To prepare bills of materials stating quality of raw materials.

MANAGEMENT

IMAC INDIACoach Builders Pvt. Ltd.,have excellent management system forcarrying out the entire fabrication and building process. Our superior team ofexperts works dedicatedly for completing their assigned tasks and make sure thatthe output is delivered within the specified time-frame.

The complete processes right from obtaining the material and components untilthe final delivery of the bus body are performed under the vigil eye of the expertsupervisors to ensure superb quality output. Expertise management of overallfunctioning of our organization makes us a leading manufacturer of bus bodies,which are supplied to government as well as private companies. With prompt andsmooth functioning, backed by effective management, we have gained trust andadmiration of our clientele.

INTRODUCTION


47/63


48/63



Physical upkeep

Issuance

Timely distribution

Store accounting

Record keeping and store control

Locating new sources of supply

Vendor development

Variety reduction

Standardization and equality control

Value analysis

Value engineering.

MATERIAL PLANNI NG AND CONTROL

Follow up for progress of MRPS

Liaisons with related department like design, methods for updated

documents

Authorize issue of materials

Liaison with shop engineering for day to day production problems relating to

materials

Inventory control and analysis

Review of slow moving/non-moving stocks and take corrective action

including disposal.

MATERIALS MANAGEMENT


49/63



Integrates all materials functions Purchasing Inventory management,

Production control, inbound traffic, Warehousing and stores Incoming

quality control, Objective: Efficient, low cost operations.

The key to good Materials Management is good communication. This

system should allow us to focus only on the exceptions. Our goal would be

to move our

Manpower away from the day to day processing toward managing the

projects that truly needs our attention to be successful in the future. A

diverse supply base impacts companys growth, customers and the

communities in which it

Qualified potential suppliers will be included in a database accessible to

employees who have influence in the sourcing decisions. Need to manage an

extensive global community of suppliers in order to provide the best quality,

technology, cost, and delivery performance possible to customers.

Continually the company should ensure meeting or exceeding the

needs of its customer base. The expectations outlined below will enable the

company and its supplier community to successfully meet the many needs of

customers

Continuous Improvement:

Work with SUPPLIERS to implement best practices


50/63



Commercial Requi rements:

Annual productivity based on industry demands is expected from all

suppliers

EQUIPMENT AND FACILI TY

G.I COIL

G.I TUBE

H.R.C.R. SHEET

M.S CHANNEL

M.S ANGLE

G.I SHEET

ALUMINIUM COIL

ALUMINIUM SHEET

ALUMINIUM EXTRUSCTION

PLY WOOD


51/63



VINYL MAT

FRONT AND RARE GLASS, SIDE GLASS

PURCHASE DEPARTMENT

Preparation of RFQ and tendering

Receiving quotation opening, commercial, vetting, e valuation of quotes and

compilation of comparative statement

Conveying and coordination of PC/MPC meeting

Arrange for negotiation if any

Arrange for long term business agreement/rate contract if any

Insurance of purchase orders after coordination with finance and approval of

proposal at division/complex/corporate office level as the case may be.

Purchase order progression of ensuring availability of materials in time

Ensure prompt payment to suppliers after receipt of materials

Follow up of replacement/ rectification against any rejections and warranty

claims

Vendor evaluation and directory

Resolve commercial disputes/arbitrations

Preparation of budgets/ foreign exchange budget

OBJECTIVES OF THE PURCHASING FUNCTION:

Value-added function Reduced transaction costs

Increasing participation in all types of purchases

Market intelligence


52/63


53/63



Finished goods inventory

Impacts customer service and economic value-added

Determines transportation costs

Tension between logistics/production/marketing

I NVENTORY COSTS:

Interest or Opportunity Costs

Storage and Handling Costs

Taxes, Insurance, and Shrinkage Costs

Ordering and Setup Costs

Transportation Costs

Indenting of stock items and tool crib items

Receipts, storage, issue of stores

Accounting of stores

Supporting inventory control management

Disposal of surpluses

The activities and the tasks assigned to stores department can be distinctly grouped

as follows:

To programmed and initiates procurement of stock items

To receive, stores account and issue all types of materials.

Operation of tools cribs


54/63



QUALITY ENGINEERING:

- Engineering Specifications, to Design

- Rejection and Complaints, to Production

- Conformance to Specifications, to Inspection.

- Demand for the Product, to Sales

- Usability including visual appeal, to customers.

- All the above at lower cost, to Management

Quality in this context is the best for the money invested.

FINANCE DEPARTMENT

The management of the corporate capital is one of the most vital & critical areas of

corporate management, as money only a medium of exchange and is substituted of

real resource of the economy, it is obvious that financial management or money

management ought to be basically concerned with getting the best out of the

resources developed are men, money, machine, materials and methods. All these

inputs to form which of the firm are derived, are commanded through one single

resource i.e. Money.

At higher level of corporate every decision becomes financial decisions.Decisions taken production, marketing personnel & industrial management, almost

relations have financial implications, which in turn affect the profitability of the

enterprises. Therefore it is essential that executives in companies irrespective of


55/63



their field of specialization should have understanding & appreciation of corporate

finance.

The objective part should in harmony with the objective of for nay functionwithin the business, be it production marketing or personnel without clear defining

the objectives of the corporation as a whole, what is or what ought to be the

objective of modern corporation is highly contra version question.

MISION OF FINANCE DEPARTMENT

To become a globally player in the coach builders industry

Functions of finance department:

Scrutiny & recurrence as per delegation of power of proposal for

Capital expenditure

Revenue expenditure

Purchase of materials store tools & other services

Man power recruitments Incentives

Wavier dues to the company writes of the losses

Cases involving relaxation of rules etc.

Sales lease of alienation of rules etc.

Contract entered into the suppliers/collaborators/subcontractors.

Estimates & awards of contract in respect of:

Civil electrical works/ other works, plant orders.

Project reporters. Fixation of rent & rates of recovery in respect of services/supplies/ disposal

by the company.


56/63



The finance department of I-MAC Coach Buildersis headed by MANAGER and

accounts officers lastly assistant accounts officers. The organization takes care ofall financial matters of organization.

It brings home the significance of money of finance. In the present ultra modern

society finance is at the ever ending demand. Finance is defined as issuance of

distribution of and purchase of liability and equity claims issued for the purpose of

generating of generating revenue role.

OBJECTVES:

Financial decisions

Investment decisions

Minimize risk

Export marketing department

The export marketing department is responsible for obtaining orders from the

customers regarding the purchase of the BUS components and the supply of spare

to the customer.

FUNCTIONS

Preparation of customers, negotiations, execution of contracts.


57/63



Taking orders and manufacturing of producing the items which have been ordered

by the customer of clients in exports.

Services to customers, logistics and technical support as well as training.

Supply of spares, ground handling and ground support equipment.

Supply of items against AGO demands

CUSTOMER SERVICES DEPARTMENT

A customer service is the provision of services to customers before, during and

after a purchase.

FUNCTION OR CUSTOMER SERVICES DEPARTMENT

Logistics supports includes:-

Supply of spares and service equipment

Supply of items against priority demands.

Repairs of buses

Forecasting spares requirement

Fabricated items

Technical support includes:

Maintenance and repairs of Buses

Compliance of modification and technical instructions

Accidents and incident investigations.


58/63



HUMAN RESOURCES MANAGEMENT

Human resources is that field of management which has to do with the planning,

organizing and controlling various operative activities of procuring, developing,

maintaining and utilizing an labor force to attain as effectively and economically as

possible the objectives of the organization and the interest of the labor.

TRAINING & DEVELOPMENT

In order to utilize the human resources, the division arranges, refresher training to

existing manpower in surplus areas to deploy them to different need areas.

Employees & officers and need bodies base of the current projects and advance

technology.

Training need to be providing enhance their knowledge in order to execute the job

effectively and efficiency to achieve the organizational null goals.

I NDUSTRIAL RELATIONS

Industrial relations have played an important role in the origin, growth and

development of company. It mends an art of living together in order to increase

production and achieve human welfare.

It refers to the relationship between the employees and the management or the

union employer relationships.


59/63



Its objective is to improve the economic conditions and work condition of the

workers, provide welfare activities to the worker, maintain discipline, dealing with

trade unions.

MANPOWER PLANNING:

Man processing planning

Managing job requirement

Analyze the skill to determine the nature of manpower

Selecting the adequate sources of requirement

HUMAN RESOURCES AREAS:

Training and development

Organization and development

Organization/job design

HR planning

Selection and staffing

Personnel research and information system

Compensation

Employees assistance

SWOT analysis of the Company

SWOT means, analysis and assessment of comparative strengths and weakness of

a company in a relation with their competitors and environmental opportunities and

threats, which a company may likely to face. SWOT analysis is such a systematic


60/63



study and identification of those aspects and strategies that best suit the individual

company position in a given situation. It should be based on logic and rational

thinking such that a proper strategy improves an organization business strengths

and opportunities and at the same time reduces its weakness and threats. The

SWOT analysis of IMAC INDIA LTD is given below:

Strengths

Availability of skilled man power

Good industrial relation

Availability to raised funds

Spare manufacturing capacity

Direct delivery capacity

Right products, quality and reliability

Over two decades of experience in bus body building

It is self sufficient in bus body building

Necessary infrastructure and additional capacities created to cater to the

marketing requirements

Flexibility in production

Very much preferred company by the customers

OPPORTUNITIES:


61/63



Over 20 years of experience in design is plus point for garnering outsource

project

Cutting cost by making use of new technology

Availability of total quality people helps meet the organization goals and

objective

Increase in market share by expanding business through globally

New specialist applications

The company has the knowledge of entire industry and businesses

conditions prevailing in market. So it can easily can get famous in this sector

THREATS

Self reliance in manufacturing activities

Environment effects would favor larger competitors

Resignation of trained employees

Lack of awareness of knowledge sharing techniques

Delay in implementation of up gradation of technological know-how.


62/63


63/63

a study on inventory at imac india ltd

Documents