SNOPSIS REPORT ON

INVENTORY MANAGEMENT
AT

TATA STEEL.

COMPANY PROFILE
Tata Steel has always believed that the principle of mutual benefit - between countries, corporations, customers, employees and communities - is the most effective route to profitable and sustainable growth.

Established in 1907, Tata Steel is among the top ten global steel companies with an annual crude steel capacity of over 28 million tonnes per annum (mtpa). It is now one of the world's most geographically-diversified steel producers, with operations in 26 countries and a commercial presence in over 50 countries. The Tata Steel Group, with a turnover of US$ 24.82 billion in FY 2012- 2013, has over 81,000 employees across five continents and is a Fortune 500 company. Tata Steels vision is to be the worlds steel industry benchmark through the excellence of its people, its innovative approach and overall conduct. Underpinning this vision is a performance culture committed to aspiration targets, safety and social responsibility, continuous improvement, openness and transparency. Tata Steels larger production facilities include those in India, the UK, the Netherlands, Thailand, Singapore, China and Australia. Operating companies within the Group include Tata Steel Limited (India), Tata Steel Europe Limited (formerly Corus), NatSteel, and Tata Steel Thailand (formerly Millennium Steel). Tata Steel is a top ten global steel maker and the worlds second most geographically diversified steel producer.Tata Steel was founded in India in 1907. Since 2004 the Company has expanded globally, acquiring Asian steel producers NatSteel and Millennium Steel (now called Tata Steel Thailand) as well as Europes second largest steel producer Corus (now called Tata Steel Europe Limited). Tata Steel is part of the Tata Group, Indias largest industrial conglomerate. Both Tata and Tata Steel have a long history of charitable donations and social responsibility, with Tata spending approximately 4% of the Companys profit after tax on corporate social responsibility initiatives.Tata Steel endeavours to improve the quality of life in the communities in which the Company operates. Tata Steels charitable projects have touched the lives of over 800,000 people in India.

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by 2015; it is planning for capacity expansion to be balanced roughly 50:50 between greenfield developments and acquisitions Overseas acquisitions have already added an additional 21.4 million tonnes of capacity, including Corus (18.2 million tonnes), NatSteel (2 million tonnes) and Millennium Steel (1.2 million tonnes). Tata plans to add another 29 million tonnes of capacity through acquisitions. Major greenfield steel plant expansion projects planned by Tata Steel include:

A 6 million tonne per annum capacity plant in Kalinganagar, Odisha, India; An expansion of the capacity of its plant in Jharkhand, India from 6.8 to 10 million tonnes per annum

A 5 million tonne per annum capacity plant in Chhattisgarh, India (Tata Steel signed a memorandum of understanding with the Chhattisgarh government in 2005; the plant is facing strong protest from tribal people);

A 3 million tonne per annum capacity plant in Iran; A 2.4 million tonne per annum capacity plant in Bangladesh; A 10.5 million tonne per annum capacity plant in Vietnam (feasibility studies are underway);

A 6 million tonne per annum capacity plant in Haveri, Karnataka.

Tata Steel's major competitors include ArcelorMittal, Essar Steel, JSW Steel, SAIL and VISA Steel

Products

Steel, flat steel products, long steel products, wire products, plates

Vision
Our vision is to be the global steel industry benchmark for value creation and corporate citizenship.

Values
The Tata Group has always been driven by five core values:

Integrity. We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.

Understanding. We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve.

Excellence. We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide.

Unity. We must work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation.

Responsibility. We must be responsible and responsive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over.

INTRODUCTION TO THE TOPIC:

Every business needs adequate liquid resources in order to maintain day-to-day cash flow. It needs enough cash to pay wages and salaries as they fall due and to pay creditors if it is to keep its workforce and ensure its supplies. Maintaining adequate working capital is not just important in the short-term. Sufficient liquidity must be maintained in order to ensure the survival of the business in the longterm as well. Even a profitable business may fail if it does not have adequate cash flow to meet its liabilities as they fall due. Management must ensure that a business has sufficient working capital. Too little will result incash flow problems highlighted by an organization exceeding its agreed overdraft limit, failing topay suppliers on time and being unable to claim discounts for prompt payment. In the long run, abusiness with insufficient working capital will be unable to meet its current obligations and willbe forced to cease trading even if it remains profitable on paper.

On the other hand, if an organization ties up too much of its resources in working capital it willearn a lower than expected rate of return on capital employed. Again this is not a desirable situation.

The three components, which put affects on working capital, are as: 1. Inventory 2. Receivable 3. Cash

Operating cycle
cash

debtors

raw material

sales finished goods

wip

For a manufacturing company like; steel industry; cement industry and many other manufacturing companies, Inventory management is the most crucial part for the organization.

Inventories which may classified as:

1. Raw material 2. Work-in-progress 3. Finished goods

The Inventory Management system and the Inventory Control Process provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities, and communicate with customers. Inventory Management and the activities of

Inventory Control do not make decisions or manage operations; they provide the information to Managers who make more accurate and timely decisions to manage their operations. The basic building blocks for the Inventory Management system and Inventory Control activities are: 1) Sales Forecasting or Demand Management 2) Sales and Operations Planning 3)Production Planning 4)Material Requirements Planning 5)Inventory Reduction

BENEFITS OF INVENTORY MANAGEMENT

Reduced stocking costs resulting from efficient matching of requirements to stock. 1. Re-order recommendations highlight urgent needs. Help prevent Stock-outs. 2. Instant access to 24 month usage pattern aids decision making reveals trends. Old data easily purged. 3. Automatic capture on audit trail of all stock movement details helps resolve. 4. 5. 6. 7. 8. Instant month-end valuation of receipt, issues adjustment etc. Rapid stock and work-in progress evaluation. True multi-location without constraints. Easy monitoring of slow moving stocks. Automation of inventory checking cycles ensures that items are not forgotten. Improves accuracy. 9. Automatic tracking of scrap rates and recalculation of safety levels reduces effort, improves control. 10. ABC analysis system focused attention on high value stock holdings.

OBJECTIVES OF STUDY

1. To study the practical concept of Inventory Management.

2. To study the various kinds of inventory and also the receipt procedure of inventory.

3. To know and analyze the management technique used in managing the inventory.

4. To study the role of management in inventory management and minimization of inventory carrying cost thereby increasing the profit of the organization.

5. To know the product profile as well as study its structure, organization etc.

RESEARCH METHODOLOGY
Methodology is the process of collecting the information and helps to find out the solution to the topic selected by the researcher. Whereas Research helps to study and find out the techniques with the proper process. It is a systematic way of presenting information. The study is based on descriptive and applied research. The efficiency of inventory management model at TATA Steel requires a thorough knowledge of iron making process and expertise in identifying the materials. The accounting is as well as in planning the control of inventory is thoroughly studied by ratio analysis.

Data collection method

Primary source: Primary data are data freshly gathered for a specific purpose. Primary data are those, which are collected afresh and for the first time, and thus happens to be original in character. The various sources of primary data are Direct interview, questionnaire-structured & multiple choice Questions, emails, calls etc.

PRIMARY DATA used in my project will be collected from following sources: Personal interview Finance and Accounts department Purchase department Plant visit

SECONDARY SOURCE: Secondary data are those which already been collected by someone else and which already had been passed through the statistical process. It can be collected from company website, published journals, company annual reports etc. SECONDARY DATA used in my project will be collected from following sources: Concern data Website Annual report Company records Intranet of company

Presentation of data
Data is presented in the form of tables, diagram and trend lines. Data analysis and interpretation. The data analysis has been done using various inventory ratios.

AREA OF RESEARCH:

TATA STEEL, Seraikela (Jharkhand)

Bibliography
Books

Financial management by Prasanna Chandra Fundamental Financial management by Bringham & Houston

Websites www.tisco.com www.sail.co.in www.jindalsteel.com www.essarsteel.com www.wikipedia.com www.steel.nic.in www.economywatch.com

Other references Annual report of TATA STEEL for the year (2007- 2012) Annual report of SAIL, JINDAL, ESSAR steel.