CHAPTER -1

INTRODUCTION

1
 INDUSTRY OVERVIEW

[A] INTRODUCTION :-

Since last more than 100 years cotton is the main cash crop in the agriculture and
especially in Gujarat state and Maharashtra state cotton is on the top among other cash
crop like groundnut, castor, cumin etc. Also, the quality of cotton produced in Gujarat
region is very good. India is the second largest producer of cotton and next to china.
The global net cotton production has come down substantially in the recent past in china
& US.

The Indian Textile industry has a significant presence in the economy as ill as in the
international textile economy. Its contribution to the Indian economy is manifested in
terms of its contribution to the industrial production, employment generation and
foreign exchange earnings. It contributes 20 percent of industrial production, 9 percent
of excise collections, and 18 percent of employment in the industrial sector, nearly 20
percent to the country’s total export earnings and 4 percent to the gross domestic
product.

In the textile mill sector spinning is the most important segment. out of these 1957
units belonged to large spinning units. In composite mills, spinning, weaving and dying
activities are integrated. Their number is relatively very less as compared to spinning
units. The total number of spindles installed is estimated at 48.25 million in these
spinning and composite mills apart from 0.771 million rotors. Apart from these
medium and large spinning units, there exist several marginal and small spinning units
, mainly confined to medium and large units belonging to spinning, weaving, composite
and garment units.

Before implementation of five year plans agriculture was rather sector of the economy
thus the area under cotton crop was very low as the water resources ire unexploited and
farmers ire dependent on natural rainfall. More ever, cotton being cash crop needs more
water, fertilizers, pesticides, labor etc. Involving huge finance stake as compared to
other cash crop, thus it was being produced by only big and ill to do farmers.

However, after implementation of 2nd and 3rd agriculture received special focus for the
growth and development of Indian economy as a result Irrigation and fertilizer projects

2
came up which boost up the cotton crop and side by side agriculture research work also
contributed to the great extent. IN Gujarat textile industries has its unique position as
a self-reliant industry, from the production of raw material to fabric and garment and
has a major contribution to the economy. Gujarat is a larger producer of cotton ,
constitute over 35% share of the countries production. It is observed that beside the
quality production of cotton, Gujarat is quite strong in ginning both in terms of
technology & productivity.

[B] WHAT IS TEXTILE AND SPINNING :-

One of the oldest industries in India is the cotton textile Industry. The word “textile” is
derived from the Latin word “Texere” meaning to weave and originally applied only to
woven fabrics. Then it expanded to mean fibres, and fabrics produced by interlacing or
any other construction method. Thus, threads, cords, ropes braids, lace embroidery, nets
and fabrics made by weaving, knitting, bonding, felting, or Tuffing are included in
Textiles. An organized cotton textile industry is one of the oldest and most firmly
established major large scale industries in the world.

However, the modern textile industry took birth in India in the early nineteenth century
when the first textile mill in the country was established at fort gloster near Calcutta in
1818. The cotton textile industry, however, made its real beginning in Bombay, in
1850s. The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton
merchant then engaged in overseas and internal trade.

The first cotton mill in Ahmedabad, which was eventually to emerge as a rival centre
to Bombay, was established in 1861. The spread of the textile industry to Ahmedabad
was largely due to the Gujarati trading class.

Spinning is the process of converting cotton or manmade fiber into yarn to be used for
weaving and knitting. Largely due to deregulation beginning in the mid-1980s, spinning
is the most consolidated and technically efficient sector in India’s textile industry.

3
[C] OVERVIEW OF TEXTILE INDUSTRY :-

The Global Textile Industry has become very organized and impressive industry in
modern times. High production of Wool, cotton , and silk in all over the world has given
boost to the textile industry in recent years. According to statistics, the global textile
market possesses a worth of more than $400 billion presently. In a more globalize
environment ,the industry has faced high competition as ill as opportunities.

The textile industry in UK, USA and EUROPE is organized and ill planned since last
few decades and is now in its sunset phase. The Asian countries have taken effective
steps for the growth of textile industry as they have realized the importance of the
industry. Today china is the largest producer of polyester Yarn accounting for 60% of
world’s total production.

The global textile industry has shown excellent growth since 2005 after elimination of
quota. This has created many opportunities for all the countries in global market
allowing countries like srilanka , Bangladesh , Vietnam ,Cambodia and turkey to garner
some market share. The global textile and apparel trade increased at an average annual
growth rate of 7.4% per year.

World all fiber per capital consumption in 2011 is estimated at 11 kg of which cotton
is about 3.5 kg representing about 32% of the total consumption. Per capital
consumption of north America is about 31 kg. ist Europe is about 22 kg. china is at 17
kg and India is 7.5 kg. The growth in per capital consumption of cotton fiber is more or
less stagnant.

4
[D] WHY SPINNNG IN GUJARAT ? :-

Gujarat is the largest producer of cotton in the country. It produces almost 35% of the
total production of cotton in the country.

Currently in Gujarat, there are 144 composite mills including those for spinning, 897
cotton ginning and processing units, 22 surgical cotton units, 2,362 units for processing
of readymade garments, 362 units for technical textiles, 513 power processing units and
1,146 hand processing units, of which 95% are located in Rajkot. Additionally, Gujarat
also currently has 60 home textile units and 5,053 preparatory units for weaving.

Gujarat, which has been a hub for the textile industry since the 19th century, has been
very active in availing Technology Upgradation Fund Scheme (TUFS) as compared to
other states. According to records maintained by the regional office here, of 5,136
applications made for 15% of capital subsidy scheme, nearly 87% originated from
Gujarat. Of the Rs 230.11 crore subsidy disbursed, 75% was to units and entrepreneurs
in Gujarat.

The capital subsidy scheme also allows for 20% and 30% subsidy exclusively for
weaving units. For the former, nearly 28% of 4,267 applications ire from Gujarat while
25% of Rs 382.02 crore subsidy was disbursed to units in Gujarat. Under the 30%
subsidy scheme, about 46% of 441 applications hailed from Gujarat and nearly 50% of
the Rs 178.03 crore was also disbursed in Gujarat.

The new policy — that mentions that Gujarat has more than 30 sanctioned textile parks,
the second highest among states — also offers incentives for establishing more textile
parks in the state, which includes financial assistance of 25 per cent of capital
expenditure for common facilities up to a maximum of Rs 15 crore. The developer of
such parks will also be eligible for a reimbursement of 100 per cent stamp duty paid on
purchase of land required for the new park. “In the last couple of years, i have not seen
that from textile parks. The intention to set up parks was good, but it has not been
fulfilled,” Roy said.

5
[E] ROLE OF TEXTILE IN ECONOMY :-

The textile industry of India gives great contribution to the GDP. This industry is
providing second largest employment after agriculture sector. And thus, development
of this industry directly affect to the Indian Economy. The export of textile of India is
targeted to touch US$ 185 billion by the year 2024-25.

In INR 2.55 lac crores in against Rs. 2.48 lac crores in the previous year. The growth
in specific area was considerable as such handicrafts, carpets and readymade garments
17%, 15%, 12% respectively. The share of Indian textile across the world is 5%.

There are many contribution to economic which are listed below:-

• Employment Generation
• Export promotion
• Increase standard of living
• Development of employee
• Infrastructure development
• Balance religion
• GDP and GNP contribution

6
 • Pay taxes
• Provide qualitative products

Other many contribution and benefits which is gives to economic and help to
development of country like donation, training and development programme, running
or donate to charitable or trust and awareness programme.

[G] MARKET SIZE :-

The Indian textiles industry, currently estimated at around US$ 120 billion, is expected
to reach US$ 230 billion by 2020. The Indian Textile Industry contributes
approximately 2 per cent to India’s Gross Domestic Product (GDP), 10 per cent of
manufacturing production and 14 per cent to overall Index of Industrial Production
(IIP).

In 2016-17 indian khadi products sales increased by 33 per cent year-on-year to Rs

2,005 crore (US$ 311.31 million), as per the Khadi and Village Industries Commission
(KVIC).The total area under cultivation of cotton in India is increase by 7 per cent to
11.3 million hectares in 2017-18.

Indian exports of locally made retail and lifestyle products grew at a compound annual
growth rate (CAGR) of 10 per cent from 2013 to 2016, mainly led by bedding bath and
home decor products and textiles.
[H] INVESTMENT :-

The textiles sector has witnessed a spurt in investment during the last five years. The
industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth
US$ 2.55 billion during April 2000 to June 2017.

Some of the major investments in the Indian textiles industry are as follows:

• Future Group is planning to open 80 new stores under its affordable fashion
format, Fashion at Big Bazaar (FBB), and is targeting sales of 230 million units
of garments by March 2018, which is expected to grow to 800 million units by
2021.
7
• Raymond has partnered with Khadi and Village Industries Commission (KVIC)
to sell Khadi-marked readymade garments and fabric in KVIC and Raymond
outlets across India.
• Max Fashion, a part of Dubai based Landmark Group, plans to expand its sales
network to 400 stores in 120 cities by investing Rs 400 crore (US$ 60 million)
in the next 4 years.

Compound Annual Growth Rate(CAGR)

8
[I] TOP 10 TEXTILE SPINNING MIILS IN INDIA CONSIDER TO
PRODUCTION:-

1. RAYMOND LTD.

Incorporated in 1925, Raymond Group is one of India’s largest branded

fabric and fashion retailers. It is one of the leading, integrated
producers of suiting fabric in the world, with a capacity of producing
31 million meters of wool & wool-blended fabrics.
2. THE LAKSHAMI MILLS COMPANY LTD

Lakshmi Mills was established in the year 1910 by the visionary and
pioneer late G. Kuppuswamy Naidu.
The history of Lakshmi Mills is in many ways the history of the Textile
Industry in Coimbatore.
3. VARDHMAN TEXTILE LTD.

Vardhman Group is a leading textile conglomerate in India having a

turnover of $700 Mn. Spanning over 24 manufacturing facilities in five
states across India
4. BOMBAY DYEING AND MANUFACTURING COMPANY LTD.

Established by Now rosjee Wadia in 1879 as a small operation of

Indian spun cotton yarn dip dyed by hand, Bombay Dyeing has now
grown to be one of the most respected and trusted brands in the country.
5. ARVIND LTD.

Arvind Limited started with a share capital of Rs 2,525,000 ($55,000)

in the year 1931. With the aim of manufacturing the high-end superfine
fabrics Arvind invested in very sophisticated technology.
6. MYSORE SILK INDUSTRIES CORPORATIO LTD

The silk weaving factory in Mysore, presently owned by KSIC, was

established in the year 1912 by the Maharaja of Mysore province.
Initially the silk fabrics were manufactured & supplied to meet the

9
 requirements of the royal family and ornamental fabrics to
their armed forces.

7. GRASIM INDUSTRIES(ADITYA BIRLA GROUP)

The company is a subsidiary of Aditya Birla Group, which operates

over 40 companies in 12 countries on 4 continents.
8. RELIANCE TEXTILE

The company was co-founded by Dhirubhai Ambani and his cousin

Champaklal Damani in 1960s as Reliance Commercial Corporation. In
1965, the partnership was ended and Dhirubhai continued the polyester
business of the firm.In1966, Reliance Textiles Industries Pvt Ltd was
incorporated in Maharashtra.
9. FABINDIA OVERSEAS PVT. LTD.

Fabindia links over 80,000 craft based rural producers to modern urban
markets, thereby creating a base for skilled, sustainable rural
employment, and preserving India’s traditional handicrafts in the
process
10. JCT LTD.

one of the leading manufacturer of textiles and filament yarn, is the

flagship company of Thapar Group. With operations in two distinct
businesses – cotton, synthetic & blended textiles and nylon filament
yarn – JCT Limited is a market driven company fuelled by good work
ethic, values and a high standard of performance.

10
 COMPANY INFORMATION

HISTORY OF COMPANY:-

Visualizing the potential and rapid growth in cotton industry and textile industries
during last many years, promoters of the proposed project has decides to set up spinning
unit at aliudepur, Lathi, District:-Amreli, Gujarat.

The proposed industry is established by considering the present policies of the central
and state government and to avail benefits under various laws.

The promoters of the projects have formed a private limited company in the name and
style of M/s. PHENIX SPINNING PVT.LTD from February 18,2014 and get it
register of companies, Ahmedabad, Gujarat.

Phenix spinning mill private limited company was established in 18th February 2014.
In view of the inadequate of its initial assets the company adopted for the short term a
strategy of engaging in the business that requires minimum resources both in cash and
in kind. It merely stated as distribution of imparted and locally manufactured textile
products, as ill as an exporter of agricultural commodities.

Simultaneously, it sought to promote its business connections and diversify its

operations to improve its financial and human resources. After two years in the
business, the company was able to register a definite sign of growth. It lease land
completely furnished a ten room office space, employed two qualified secretary and two
salesmen and other 20 people education staff like supervisor, production manager and
150 worker. The company principles are credo, charter, vision and mission is based on
long- lasting core values and clear strategic framework. The company strategy builds
up on this strong foundation with a focus on continued successful development of the
company.

All these principles set district standards of behavior and provide a high degree of
transparency, therefore giving life to the “spirit of private limited company. The
company vision aspire to see the Phenix spinning mill private limited company attained
a significant position in the regional and international trading house, in supplying and
rendering a wide range of commodities and services respectively, and there by, gain a
strong presence in the world wide business area. I will earn my customers’ enthusiasm
through continues improvement driven by the integrity, team work and innovation of
Phenix spinning mill private limited company people.

11
The mission of the company is together with my customers, i develop, manufacture,
supply and render commodities and services which acquire, transmit, control and
record process information enabling my customer to operate and manage processes in
a safe reliable economical profitable and environmentally responsible manner. The
company mainly purchase its raw materials from the marketing yard or directly from
the farmer and other brokers and sell in trading items for its textile factories from ill-
known customers in Korea, Indonesia, and China. The management and organizational
structure of Phenix spinning mill private limited company has been characterized by
several district trends in terms of its organizational evaluation.

As most of the private business companies Phenix spinning mill private limited
company used to be managed by the far-signed and visionary director Mr.Vajubhai Gol.
But due to the increase in the volume of business transaction and the size of workable,
the need to compete with huge local and foreign multinational business company it
came to believe that it is necessary to have ill-organized and staffed organizational
structure.

12
 Company Profile

Name Phenix Spinning Private Limited

Date of 18th February 2014

incorporation

Constitution Private Limited Company

CIN No. U17122GJ2014PTC078791

Sector Textiles-Cotton yarn spinning

Registered Office c/o flexi plast india,plot no 91,GIDC udhyog

nagar,amreli-365601

Prior experience of
promoters in this
line of activity
YES

Phenix spinning private limited company, incorporated on 18th February 2014 with the
objective of being in the cotton yarn spinning business. It has proposed to set up a
cotton yarn manufacturing facility of 16320 spindles in Amreli, Gujarat.

13
Name Phenix spinning private limited

Date of 18th February 2014

incorporation

Constitution Private limited company

Industry Textiles

Nature of activity Cotton, Yarn spinning

Registered office c/o flexi plast india,plot no 91,GIDC udhyog

nagar,amreli-365601

Promoters 1.Mr. Tejasbhai Vajubhai Gol

2.Mr. Dharmeshbhai Valjibhai Hirpara

3.Mr.Jigneshkumar Parshotambhai Rupala

4.Mr.Himanshubhai Jagubhai Patel

5.Mr.Mehulbhai Maganbhai Patel

Brief details of the The company is proposing to set up a 30 count

project cotton yarn manufacturing facility by installing a
total of 16320 spindles in ring frame, in village
Aliudepur,District Amreli, Gujarat

Estimated project INR 61.53 crores

cost

Proposed D/E 1.06:1

Ration
• Equity-INR16.00 Crores
• Unsecured Loan-INR 13.84 Crores

14
 • LT Debt-INR 31.69 Crores

Site Location R.S. no. 141 p1p3 and 141,Village:-Aliudeipur,

Taluka:-Lathi, District:-Amreli, Gujarat

Total land area 7.80 Acres(Equivalent 31262 sq.m.)

Current Asset According to the site visit and information

provided, the company has acquired the land, and
civil work is in progress. Purchase orders for
major plant and machinery have been issued and
temporary power has been availed. As per CA
certificate provided, approx. INR 8.55 Crores has
been incurred on the project till 11.12.2014

Techno-Economic YES
Viability

Category of Large Scale Unit

Industry

Line of activity Manufacturing of combed/carded cotton yarn and

cotton bales/cotton seeds.

Income tax AAHCP5955D

registration

Electric 1700 KVA

Connection

15
• Promoters:-
The promoter of the company are Mr. Tejasbhai Vajubhai Gol,Mr.
Jignesh Kumar Parshotambhai Rupala,Mr. Mehulbhai Maganbhai Patel,
Mr. Dharmeshbhai Valjibhai Hirpara and Mr. Himanshubhai Jagubhai
Patel.They also hold directorship in the company.

• Board of Director:-
The affairs of the company are managed by nine directors. Out of these,
five are promoters ill Mr. Tejasbhai Vajubhai Gol,Mr. Jignesh Kumar
Parshotambhai Rupala,Mr. Mehulbhai Maganbhai Patel,
Mr. Dharmeshbhai Valjibhai Hirpara and
Mr. Himanshubhai Jagubhai Patel. Others directors are Mr.
Mr.Dhavalbhai Vajubhai Gol and Mr.Vajubhai Ranchodbhai Gol.
• Project Implementation:-
The company has already acquired land for proposed project and have
received certificate for industrial usage of the said land. Building and
civil work is in progress. The company has issued purchase orders for
major plant and machinery. Based on the observation on site visit, the
project is expected to achieve commercial operations by 1st September
2015.
• Project Cost:-
The overall project cost has been estimated at INR 61.53 Crores, and is
summarized below-

16
 KEY PERSON:-

Person Designation

Mr.Tejasbhai Vajubhai Gol Managing director

Mr. Jignesh Kumar Parshotambhai Rupala Managing director

Mr. Mehulbhai Maganbhai Patel Director

Mr. Dharmeshbhai Valjibhai Hirpara Director

Mr.Dhavalbhai Vajubhai Gol Director

Mr.Vajubhai Ranchodbhai Gol Director

Mr. Himanshubhai Jagubhai Patel Director

17
VISION AND MISSION :-

• To manufacture a high quality yarn thereby withstanding high level of

competitiveness.
• Developing a long term relationship with customer and suppliers.
• To use latest technological strategies during production thereby forming an
innovative approach.
• To provide a safe, fulfilling and rewarding work environment for his employee.
• To produce highest medium and fine count cotton yarn.
• To ensure consumer rate my yarn as first with regards to loom efficiency,
warping performance and fabric appearance.
• To provide jobs to rural skilful employee.
• To obtain maximum growth with getting government schemes and minimum
investment.
• To earn foreign currency with maximum export.

Objective :-

The main objective of company as stated in its memorandum of association is as

follow:-

To carry on the business of trading, manufacturing, producing, processing, iaving,

sizing, ginning, pressing, baling, packing, spinning, doubling, blending, combing,
crimping, stretching, bleaching, dyeing, knitting, printing, buying, selling, importing,
exporting and storing of cotton, silk, wool, rayon, jute, polyester, chiffon, acrylic, wool,
shoddy, hemp, other natural synthetic, man-made fibers substitute of all kinds and other
fibers yarn, fabrics or textile products not specified above and to act as manufacturer,
trader, broker, dealer, stockiest, C&F agent, distributor, job worker, exporter, importer,
agent or otherwise deal in textile raw material, intermediate products, by product,
residue, finished products of all type of textile goods, yarn and fabrics.

The company proposes to launch a project for manufacturing of all type of cotton yarn
and thread by installing a state of art modern textile spinning unit with 16320 spindles.
After giving due consideration of following aspects, the promoter have selected
proposed factory location at Ta:-Lathi, Di:- Amreli S.No-141 p1p3 hec 2:15:52 Smt.

18
• Suitability of geographical and location factor.
• Economic and manufacturing feasibility of the project.
• Availability of requisite skilled, semi-skilled and unskilled labour from local
area.
• Infra-structural facilities
• Administrative convenience due to nearness of other units of the same group.

19
FUNCTIONAL
DEPARTMENT

❖ HUMAN RESMYCES
DEPARTMENT
❖ PRODUCTION
DEPARTMENT
❖ MARKETING DEPARTMENT
❖ FINANCE DEPARTMENT

20
 HUMAN
RESOURCES
DEPARTMENT

21
 INTRODUCTION

Human resource is the most important resource in any small or large business.
Nowadays without human not work properly .handle and manage the machine by the
human. Company gives the incentives and salary to human. Human also work with its
experience and its knowledge so new experience and technique establish. Proper
management of human resource in any organization makes the run of work smooth and
regular.

1) Not Allowed Child labor at phenix spinning pvt. Ltd

2) 3 Shift of 8 hours
3) Salary & wages given to the employee as per govt. rules
4) Anti-Harassment

Facilities provided to the employees

• Good working situation

• Pure drinking water
• Refreshment area
• Hygienic working area

Incentives

• Bonus
• Insurance
• Housing Allowance

22
Facilities provided to the employees to phenix spinning mill private
limited:-

• Good working situation

• Pure drinking water
• Refreshment area
• Hygienic working area
• House allowances
• Insurance provide
• Bonus
• As per experience give the promotion
• Take record
• Time by time give training
• Security
• Medical expenses
• First aid box
• Half price meal provide
• Hygienic foods provide

23
Production
Department

24
Introduction

The objectives of an operations department rotate around High quality effective

operations. If your process is fulfilling its objectives , your customers will be happy,
and your business will be gainful.

The production department is responsible to check the raw material and produce the
qualitative and high quantity goods and service. The production manager is also
responsible to provide high qualitative goods and service. The production manager is
check the new technology information and time to time update about new technology
and also provide his experience to low cost production.

The production department is responsible for converting inputs into outputs through the
stages of production processes.

The production manager is responsible for making sure that raw material are provided
and made into finished goods effectively.

In the phenix spinning mill private limited

Phenix spinning mill private limited have :-

• Best quality of raw material is being used in production.

• They saws buyers satisfaction while production process.
• Maintenance properly managed in the production department.
• Economical work has been done in the production department.
• Reduce the waste while doing the production process.
• Effective plant lay-out.
• Totally automated plant.
• More concentrate on product quality

25
Blow-room cleaning & Mixing

Carding Section

Drawing Section

Combing Process

Roving Section

Ring Spinning

Automatic Winding

Yarn Conditioning

Inspection & Packing

Post Spinning

Finished Product arrangement

Consumables & Packing

26
Marketing
Department

27
Introduction

A marketing department promotes your trade and drives sales of its products of
services. The marketing department has overall responsibility for rising revenue,
increasing market share and contributing to company’s growth and success.

Marketing is the main function because without the market the goods cannot be sold out. But in the
field of textile the role of the marketing department is not much necessary, because the entire produced
good are not the finished goods and it should take away for the further process. In Than gam textile they
are marketing the two varieties of yarn as 40and 30 based on their thickness. The 40 is used for making
shirts and 60 are used for making pants. In Than gam textile the manager directly deals with the other
nearby buyers. So the marketing department is not done in full effort.

The marketing department have responsible to promotion to goods and service.

Marketing department has provide to advertisement in very different ways.

Works of marketing department at phenix spinning pvt. Ltd.

1) Supply grocer
2) Sampling
3) PO , sales order providing
4) International Marketing
5) Finished goods material
6) Quality maintain of the product
7) Customers helpline
8) Check the quality on regular basis

28
 • 4P’S OF MARKETING

◼ Product: Company’s main product is cotton yarn. The yarn is a long

continuous length of interlocked fibers, suitable for use in the production
of textile, sewing, crocheting, knitting, weaving, embroidery and rope
making. The company produces the superior quality range of yarn in
100% cotton. In the yarn producing a different kind of cotton yarn like
a:

1. Combed cotton yarn.

◼ Price

Now Price of combed yarn is Rs.160

The pricing decision of the company is affected by internal and

external factors

INTERNAL FACTORS EXTERNAL FACTORS

Cost of the products Nature of market of demand of product

Marketing objectives Competitors cost or price of product

Marketing mix strategy Other environmental factors like: economy,

government policies etc.

(1.3.9 C Pricing Factors)

29
◼ Place:
Place and distribution stand for the matching arrangements for the
smooth flow of goods and services from the producers to consumer.
Currently company directly selling of cotton and yarn to the merchant.
Where in the company not a role of middle man. Mostly yarn will export
in a foreign country like a China, Bangladesh, Korea, Turkey & Egypt.

30
Finance Department

31
Introduction

The finance department is the art of the organization that manages its wealth. The trade
function of a finance department classically include planning, organizing, auditing,
accounting, and controlling the company’s finance. The finance department also
regularly produces the company’s financial statement.

The rate of implementation of FM practices in textile units are discussed under fifteen
practices namely business analysis & control, financial accounting, reporting and
analysing, financial planning and control, investment analysis, capital acquisition,
profitability analysis, debt management, capital management, investment management,
cash management, inventory management, credit management, working capital
management, fixed assets management and dividend management practices.

Study the liquidity, leverage, profitability and turnover ratio of the company.

Works in Finance department in phenix spinning pvt. Ltd.

1) Calculation of raw material & finished goods

2) Spin Plan Calculation
3) Maintenance cost
4) Sales & purchase entry
5) Labor & staff cost
6) Electric cost
7) Maintenance cost
8) Plan and machinery cost
9) Inventory cost
10) Facility cost like life-insurance, medical-insurance, etc.

32
 ➢ In the company no borrowed capital, all the capital is owned capital
and company issuing equity shares so not fix amount for paying a
dividend.
➢ Company’s investment is 33.13 Cr.
➢ In the financial year 2017-18 profit is near about four cr.
➢ Net current assets of the year are 27.90 cr. & estimated 32.80 Cr.

• In phenix spinning mill private limited term loan is 29 crore and CC (Cash
credit) is 7 crore in the company.
• Total Project cost of phenix spinning mill private limited is 64 crore.
• Raw material cost has variable cost because its demand and supply and
environment climate changed depend of raw material.
• Labor charge 20 lakh per month.(included supervisor cost)
• 3000 bales = 4.80 crore
• Electric cost 60 lakh per month.

33
PRODUCTS OF THE PHENIX SPINING PVT.LTD

1. Combed
1) Combed Cotton

34
SWOT :-

Strengths :-

• New and high tech machinery

• High tech working environment
• In big area for structure.
• Good skilled textiles engineer.
• Good skilled employee.
• Good relationship with worker.
• Easy access to row material and manpower.
• Good storage capacity.

Opportunities:-

The company may be eligible to avail benefits through Export Promotion Capital
Goods(EPCG) scheme.

• Booming market of the textile industry.

• Technological up gradation
• Government schemes
• EPCG schemes

Weakness :-

• The new material for product depends on climate condition.

• Low investment in R&D department.

Threats:-

• Threats of new entrants.

• Threat of substitute product.
• Global market.

35
 CHAPTER -2

INTRODUCTION TO
THE STUDY

36
• LITERATURE REVIEW :-

1) EFFECT OF PROPER INVENTORY MANAGEMENT ON

BUSINESS PERFORMANCE, Dr. Mohammad Shafi(2014):-
The Main objectives of this study was To make an in-depth research and
literature review of inventory management systems with special reference to
Textile Industry. To a large extent, the success and failure of a business depends
upon its inventory management performance. The basic objective of inventory
management is to optimize the size of inventory in a firm so that smooth
performance of production and sales function may be possible at minimum cost.
In this study find that the Studying inventory management becomes all the more
important in view of the fact that it is the largest employer with a total workforce
of 35 million. Moreover, the share of textiles in total exports was 11.04 % during
2010. India is the world’s 2nd largest producer of textiles and garments after
China.

2) INVESTMENT IN THE INVENTORY

MANAGEMENT,V.VIJAYA LAKSHAMI(2016):-Find the
determinants of investment in inventories. Find the determinants of investment
in inventories. The result was that there is positive relation among the ratio of
inventory to sales and inventory investment. An efficient inventory
management ensures continuous production by maintaining inventory at a
satisfactory level. It also minimizes capital investment and cost of inventory by
avoiding stock-pile of product. Efficient and Effective Inventory Management
goes a long way in successful running and survival of business firm.

3) RELATION BETWEEN INVENTORY MANAGEMENT AND

COMPNAY PERFORMANCE,ABDUL NASIR SYED(2016):-It
specifically examined the relationship between inventory management and
company’s performance. Inventory management issue. Interviews with the
company management ire conducted to identify the inventory management
issues and system used by the company. The research found that company X
had a few inventory problems such as unorganized inventory arrangement, large
amount of inventory days / no cycle counting and no accurate records balance
due to unskilled workers. The study also proved that there was a significant
relationship between return on asset (ROA) and inventory days.

37
4) IMPORTANCE OF INVENTORY MANAGEMENT FOR
AGILE MODELING,DR.K.ASHOKKUMAR(2018):-The main
objectives of this study was to find out the optimum level of inventory to be
ordered at a point of time. Inventory management system is software which is
helpful for the businesses operate hardware stores, where storeowner keeps the
records of sales and purchase. This study utilized primary data. The researcher
collected data by using the interview method. The study established that
manufacturing companies use information technology, lean inventory system
and strategic supplier partnership as inventory management approaches. The
study established that manufacturing companies use information technology,
lean inventory system and strategic supplier partnership as inventory
management approaches.

5) INVENTORY MANAGEMENT APPROCHES AND

PERFORMANCE OF TEXTILE INDUSTRY,DAVID
SOBERA(2016):-The broad objective of this research was to establish the
role of inventory management approaches on the performance of textile firms.
To find the relationship between inventory management and firms performance.
This study utilized primary data. Data was obtained using questionnaires
developed by the researcher. The questionnaire contains questions and
statements based on the research objectives. Data was prepared for analysis
through editing, coding and data entry. The study established that
manufacturing companies use information technology, lean inventory system
and strategic supplier partnership as inventory management approaches. The
study also concludes that there was a strong positive correlation between the
inventory management practices and operational performance of the textile
manufacturing firms.

6) A Study Relationship between Inventory Management and

company Performance : A Case Study of Textile Chain Store,
Nurul Nadia Suraidi ,(July 2016):-The main objectives of this study to
explore the problem in inventory management. To identify the system used by
company in managing their inventory management. The qualitative research
was conducted to understand the problem in inventory management by
conducting a structured interview. Researcher picked one branch for interview
method. The researcher used both primary and secondary data to complete this
study. Findings indicates that to explore the problems in inventory management
at company. It conclude that the researcher believe that the recommendation are
applied by the company and it should be able to improve the inventory
management practice and lead to better performance in terms of profits.

38
7) A LITERATURE REVIEW ON MODELS OF INVENTORY
MANAGEMENT UNDER UNCERTAINT:-Serhii
Ziukov(2015):-Inventories are raw materials, work-in-process goods and
completely finished goods that are considered to be the portion of business’s
assets that are ready or will be ready for sale. The main objective is to
Formulating a suitable inventory model is one of the major concerns for an
industry. The qualitative research was conducted to understand the problem in
inventory management by conducting a structured interview. Researcher picked
one branch for interview method. The researcher used both primary and
secondary data to complete this study. Findings indicates that to explore the
problems in inventory management at company. It conclude that the In the past
years, the efficiency of inventory management has become an area of major
concern in business. New inventory models for managing the inventory levels
are now available. Tis paper has presented a literature survey of models of
inventory control under uncertainty.

8) MANAGEMENT OF INVENTORY IN A COMPANY,

Eleonora Kontuš(December 5, 2014):-The main objective is how the
firm manage their inventory in the company. This paper presents results from
the empirical research undertaken on a representative sample of Croatian
companies with the aim of exploring their inventory levels along with
dependence between the companies’ inventory levels and profitability. I
randomly selected an initial sample of 130 companies.it conclude that The
optimal management of companies’ inventories is a fundamental problem and
its solution would have a direct influence on the efficiency of business and the
position of a company in a market. The fundamental aim of solving this problem
is a continuous and complete satisfying of demand on the one hand, with
minimum opportunity costs of carrying inventory and holding costs on the
other.

9) Empirical evidence from micro and small enterprises to stable

in competitive market, Daniel Atnafuland Assefa Balda(23 July
2018):-This study aimed to empirically examine the impact of inventory
management practice on firms’ competitiveness and organizational
performance. Data for the study ire collected from 188 micro and small
enterprises (MSEs).The study fall under quantitative survey approach; this
approach enables to quantify and describe the existing practice, as ill as to
measure the impact of the actual inventory management practice on
competitiveness and organizational performance of firms. The findings of this
research indicate the presence of an intermediate measure of competitive
advantage between inventory management practices and organizational
performance. The findings of this research also indicate the presence of an
intermediate measure of competitive advantage between inventory management
practices and organizational performance. This paper provides empirical
justification for a framework that identifies five key dimensions of inventory
management practices and describes the relationship among inventory
management practices, competitive advantage, and organizational performance.

39
 BACKGROUND OF STUDY
The word inventory has been defined in many ways. Generally three definitions have
been chosen which to be more appropriate to the topic developed in this study.
Inventory are stock of raw materials, work in process and finished good.

Inventory consists of the most important element of any system dealing with the supply,
manufacture and distribution of goods and service. The concept of inventory
management is very old but it came in light when harrie F.W,published his work on
classical order size model and the work was extended by raymond F.F (1991) and
Wilson R.M (1934). But only after the second world war with the development of
operational research and computer technology that the theoretical concepts got a
practical application.

Holding inventory is often interpreted as carrying an asset, but also means carrying risk
in terms of obsolescence deterioration axed quality faults in financial terms inventory
impacts the balance sheet, cash flow, profit and loss account. Operationally inventory
affects production efficiency and on time delivery (coldratte, 1999) identifies inventory
a key component for measuring business performance in manufacturing environment.
Thus good management of inventory, essential to achieving business objective and
building competitive advantage. Inventory management refers to the events or activities
that affect inventory during the process of transferring in put resources and material to
put goods. Achieving inventory management war with the development of operational
research and computer technology that the theoretical concepts got a practical
application. Holding inventory is often interpreted as carrying an asset, but also means
carrying risk in terms of obsolescence deterioration axed quality faults in financial
terms inventory impacts the balance sheet, cash flow, profit and loss account.
Operationally inventory affects production efficiency and on time delivery identifies
inventory a key component for measuring business performance in manufacturing
environment. Thus good management of inventory, essential to achieving business
objective and building competitive advantage.

Inventory management refers to the events or activities that affect inventory during the
process of transferring in put resources and material to put goods. Achieving inventory
management is a precursor to inventory management which is concerned with the
means used to balance inflicting organizational objectives on the overall level of stock
held to determine optimum inventory level for each.

40
 • Nature of inventory:-

Inventories consists of good held for sale to customers, semi-finished goods, and
material and supplies to be used in production. Inventory items are acquired and sold
continuing by a directly from the farmer, broker or marketing yard , and sold by a
manufacturing enterprise which is in out of country. The sale of merchandise or finished
products is the primary source of revenue for most non service business enterprises.

• Why phenix spinning mill private limited hold the inventory ?

The reason for hold inventories are discussed in three part which is in the following
paragraphs.

First, inventory helps to project against stock outs, delayed delivers and expected
increase in the risk of shortages lays can occurs because of weather conditions, supplies
stock outs, delivers of wrong materials, quality problem and soon. The risk of shortage
can be reduce by holding safety stock which are stocks in excess of average demand to
compensate for variability in demand and lead time.

Second, historically manufacturing firms have used inventories as buffers between

successive operation to maintain continuity of production that would otherwise
distributed by events such as breakdown of equipment and accidents that cause
apportion at operation to shutdown of temporarily. The problem is resolved, firms have
used buffers from supplies and finished goods inventory to buffer sale operation from
manufacturing descriptions more recently, company have taken a closer book at buffer
inventories recognizing the cost and spaces they require and realizing that finding and
eliminating sources of description can greatly decreased the need for decoupling
operations.

Third, it also helps to smooth product requirements in a firm may experience seasonal
patterns in demand often build up inventories during at seasonal periods to meets very
high requirement during certain period.

41
Rationale statement
As the researcher browse the website related to inventory management, hold the
following facts that necessitate for this study to be conducted which has are search topic
of assessment of inventory management in textile industry, particularly Phenix spinning
mill private limited. In the first place inventory management is the process of tracking
product orders keeping adequate amount of products on hand and organizing products
in warehouse. And also inventory management is the active control program which
allows the management of sales, purchases and payments with good inventory
management, companies are able to monitor what shipments they have coming in and
going out to customer, allowing them to keep just enough inventory in stock to meet
demand. Then inventory management lets companies enjoy many benefits which
include achieving inventory balance, using resource wisely, cutting costs, saving time
and becoming more efficient and planning a head for seasonal changes in demand.
According to these evidence this study is emphasize on how Phenix Spinning Mill
Private Limited performs the activity to come up with a good result along with attaining
the main objective of the industry.

The problem statement for the current study becomes “A study to analyze inventory
management practiced by the Phenix spinning mill private limited”

Significance of study

The researcher has an expectation, the study will provide a clear picture about the value
or importance of inventory management in Phenix spinning mill private limited and to
identify problem concerning inventory management. It is believed that the study would
clearly reflect, what to see any opportunities to utilize, to give relevant
recommendation, suggestion and solution that help top management as ill as the
organization to make good decision concerning about inventory management and help
in designing a better systematic form for inventory management system.

➢ STUDENTS:

This analysis is useful to the code for his/her study side. The Student will get a
reference from this sort of analysis report. This study provides data for his
her any study and getting a practical knowledge from market or knowing about in which
way is working in the company. The researcher will use this kind of report for

42
 his any study of analysis. From the report getting idea that product quality and services
is more valuable or not and how to effective inventory management compare to now. In
particular area of quality and services getting perfect data about respond of merchants
in numerical form and graphically presentation of that giving perfect idea so that
researcher gets sensible data.

➢ COMPANY:

Through this report company getting perfect idea of their product quality clients and
in which aspect clients face problem solve their problem. Or if any mistake in product
quality slightly change in that quality. Getting opinion from their clients.

Limitation of study

The research face a problem of time to collect all necessary data from employees or
directors of the industry and some respondents are involuntary to give available
information. In addition, the employer is involuntary to tell the real information
regarding the inventory management of the organization.

➢ RESEARCH ERROR

• Where doing research at that time chances of giving wrong

information given by respondent of company so there is not
getting a proper idea about the research.
• May chances for wrong information from employee because of
misunderstanding in question.
• When doing research regarding inventory and that time less
chances for languages but employee have fear to lick their
information so may be chances of getting a wrong information.

43
 • Some time chance to be what I ask question to the employee but
that question is not related to his department and knowledge
about the other department so chances to be give the wrong
answer.

Types of inventory :-
Regarding types of inventory different literatures provide different description of
inventory type based on their own task objective. In this study cycle stock is inventory
that results from the replenishment process and is required in order to meet demand
under condition of certainty that is when the firm can predict demand and rends times
almost perfectly.

Inventories in transit are items that are in routs from one location to other. They may
be considered parts of cycle stock even though they are not shipment until after they
arrive at the destination. Also company can take the order before one month.

Safety or buffer stock is held in excess of cycle stock because of uncertainty in demand
or lead time. The notation is that a portion inventory should be devoted to cover short
range variation in demand and lend time. In this safety stock of raw material is store of
one month raw material stock is 3000 bales can store this stock is also uses for one
month.

Dead stock is inventories that no one want at least immediately. The question is why
any organization would incur the costs associated with holding these item rather than
simply disposing of them. One reason might be that management expected demand to
resume at some point in the future. In penix spinning mill private limited no any dead
stock hold because the stock order can take before one month so any dead stock problem
not face by company till now.

44
Inventory management techniques
Different literatures provide different description of inventory management techniques
based on their own task objective. In this study describe few types which is describe
following :-

ABC:-
ABC technique stand of Always Better Cost. In this technique company can check the
cost of the material which is held and its holding cost like electric, supervising, labor,
environmental cost, etc.

In the phenix spinning mill private limited also use this technique. Firstly when raw
material is arrive at that time count the cost like buying price of cotton, transportation
rate , labor cost, supervising cost , holding cost like electric cost, environmental cost,
etc.

All the cost to be calculated and the compare the existing raw material cost and use the
low cost raw material and do production.

In this technique company satisfied with the per unit cost of production and all other
technique cost to be more than this technique. So I can say that this is the best technique
use the company.

Ex:- First buy the 10 Rs raw material of 1KG and after second time buy the 09 Rs raw
material 1Kg so use the secondly buy material and first raw material is hold in
warehouse.

45
Objective of the study

• Primary Objective

The main objective of the study is to assess the inventory management of Phenix
spinning mill private limited.

• Secondary Objectives

To examine the industry inventory management in appropriate way. -To compare and
contrast the actual practice of Phenix Spinning Mill Private Limited inventory
management with the theoretical aspects of inventory management. -To determine the
industry strength and weaknesses with regarding to inventory management . -To give
some constructive suggestions and recommendation based on the fact of the study.

In shorts, the secondary objectives are:-

• Finding importance of product quality in business world.

• Service given by company is affected to their clients
• Which factors affected to retain merchants?
• Finding a way to maintain more loyal clients in business.
• Getting idea about what kind of product and services needed for
merchants.

46
 CHAPTER -3

RESEARCH
METHODOLOGY

47
 RESEARCH METHODOLOGY
Research is an art of scientific survey research is the systematic & concentrated study
directed towards a more complete knowledge of subject study and if start due to some
specific query or difficulty.
“Research is essentially an investigation a recording & analysis of evidence for the
purpose of gaining knowledge.”
Generally, the research methodology is the process of collecting the data with the
proper finding from different areas of the company as well as the data available
externally, which helps the researcher to make an analysis. As the researcher when
collects the data would have to decide which short of a data are required for preparing
the study, accordingly the method used should be with the necessary effective
measures. Generally the data were collected by asking questions to the customers.

RESEARCH DESIGN
The researcher should specify the approach be intends to use with respect to the
proposed study largely speaking can be groped in to three categories.

Research
Design

Exploratory Descriptive Causal Research

Research Design Research Design Design

48
The research design is a plan of action indicating the specific steps that are necessary
to provide answers to those questions, test the hypotheses and thereby achieve the
research purpose that help choose among the decision alternatives to solve the
management problem or capitalize on the market opportunity.

A research design is the set of methods and procedures used in collecting and analysing
measures of the variables specified in the problem research.

Market research is a function which link customer and public to marketer though
information used to identity and define to market opportunity and problems; generate
define evaluate, marketing action monitor marketing performance and improve
understanding marketing as a process.

The researcher should specify the approach be intends to use with respect to the
proposed study largely speaking can be groped in to three categories.

1. Exploratory research design

2. Descriptive research design
3. Causal research design

1. Exploratory research

A marketing research study may be either exploratory or full scale. Exploratory

research is conducted when the research does not know how and why certain
phenomenon occurs. Here, the hypothetical solution or action are explored and
evaluated by the decision-maker, e.g. evaluation of quality of service of a
bank/hotel/airline. Here, the quality cannot be accessed directly as tangible
features are not available.

2. Descriptive research

Descriptive research is undertaken when the research desires to know the

characteristics of certain groups such as age, sex, occupation, income or
education. The objective research is to answer the “who, what, when, where and
how” of the subject under study/investigation.
The major objective of descriptive research is to describe something – usually
market characteristics or function. A major difference between exploratory and

49
 descriptive research is that descriptive research is characterized by the prior
formulation of the hypotheses. Thus, the information needed is clearly defined.
As a result, descriptive research is pre-planned and structures. It is typically
based on large representative samples a formal research design specifies the
methods for selecting these sources of information and for collecting market
information from those sources.

3. Casual research

Casual research design is the third type of research design. As the name
indicates, casual design investigates the cause and effect relationship between
two or more variables. This design measures the extent of relationship between
two or more variables.
Casual research is useful to show the impact of one variable on the other. For
example, price and market demand relationship or relationship between market
competition and sales performance. Even the positive/negative effect of
advertising on sales can be studied through casual research. In addition, the
variables which create effect other variables can be studied in depth through
casual research. Market information for casual research can be collected
through field survey with the help of a questionnaire or by conducting
laboratory experiments/controlled experiments. Laboratory experiments are
possible in the case of testing of new products or package design.

❖ This project is a descriptive research program.

POPULATION
❖ Population means the research are where all things like people and other item
to be counted in specific area.
In this research the population is only one which is PHENIX SPINNING
MILL PRIVATE LIMITED.

50
 SAMPLING METHOD
Sampling is the process of selecting a small number of element from large defined
target group of element such that the information gathered small group will allow
judgment to be made about the larger group.

There are two sampling methods

1. Probability sampling
2. Non probability sampling
In this research use non-probability sampling

SAMPLING FRAME
In statistics, a sampling frame is the source material or device from which a sample is
drawn. It is a list of all those within a population who can be sampled, and may include
individuals, households or institutions.

Sampling Method Non-Probability

Sampling type Census Sampling

Data Collection method Observation & Interview

Data Collection Instrument Oral interview

Type Of Data Primary Data

Research Type Descriptive Research(Qualitative)

TABLE 3. 1 Sampling Frame

51
 SOURCES OF DATA
❖ There are two types of data:
1. Primary Data
2. Secondary Data

1. Primary Data: Primary data are the data that has been collected for the first
time and been used exclusively.
i. Observation method
ii. Interview method
iii. Questionnaire method

2. Secondary Data: Secondary data are the data that has been already collected
by someone and/or has been published earlier.
i. Reference Book
ii. Articles, Newspaper
iii. Websites

In this research I have used primary data as a source of data for the study.

Primary Data:
I have taken interview and do observation as a data collection tool in my marketing
research.

52
 DATA COLLECTION METHOD

Data collection is process of collecting of data from surveys, or from independent or

location via data capture, data entry or data logging. This is a term used to described a
process of preparing or collecting data as part of process improvement or similar
project. The purpose of data collection is to obtain information to keep on record, to
make decision about important issues to pass information to others. Primarily data are
collected to provide information regarding a specific topic.

A survey is research method for collecting information from a selected group of

people using standardized questionnaires or interviews.

In this research Personal survey has been used to collect the data through a interview
and observation.

DATA COLLECTION INSTRUMENT

Structured questionnaire was used as an instrument for data collection.

53
DATA ANALYSIS
AND
INTERPRETATION

54
 DATA ANALYSIS (INTRO):-
Data analysis is the process of systematically applying statistical and/or logical
technique to describe and illustration , condense and recap and evaluate data. According
to Shamoo and Resnik (2003) various analytic procedures “provide a way of drawing
inductive inferences from data and distinguishing the signal (the phenomenon of
interest) from noise (fluctuation) present in the table.

While data analysis in qualitative research can include statistical procedures, many time
analysis becomes an ongoing iterative process where data is continuously collected and
analysed almost simultaneously. Indeed, researchers generally analyse for pattern in
observation through the entire data collection phase. The form of the analysis is
determined by the specific qualitative approach taken and the form of the data.

An essential component of ensuring data integrity is the accurate and appropriate

analysis of research finding, mislead casual readers and may negatively influence the
public perception of research. Integrity issues are just as relevant to analysis of non-
statistical data as well.

Structure question:-
1) Does company take order in advance ?
A:- Yes, Phenix spinning mill private limited does take an order in advance and
that also before 1 month.

2) How many bales are used in production per day ?

A:-Average 70 bales per day are used to take in working per day.

3) How many tons are used as raw materials in production per day ?
A:-Average 60 tons of raw material were used in the production per day.

4) How many types of cost of inventory are paid by the company ?

A:-To store the inventory like raw material, semi-finished goods and finished
goods many expense are to be pay by company to handle the inventory like
electric cost, loading cost, unloading cost, human cost, carrying cost etc.

5) How many bales are purchased each month ?

A:-Phenix spinning mill private limited purchases 3000 bales per month.

6) Which techniques are used to purchase ?

Phenix spinning private limited uses ABC(Always Better Cost) purchase system
to purchase.

55
7) How much production per day is done ?
A:-Every day 12 ton production is done per day.

8) How much tons contains in container ?

A:- 20 tons is contained in container.

9) How many containers are sold every month ?

A:-Average 18 container are sold every month.

10) How many safety stock do you keep in warehouse ?

A:-Phenix spinning mill private limited has 1 month safety stock average 2100
bales in warehouse.

11) How many additional stock do you keep in warehouse?

A:- Additional stock of one month is available like 3000 bales.

12) Does the mill take an advance Payment from the customer?
A:-Yes, the mill take an advance payment from the customer.

13) Does supplier give the raw material on credit ?

A:-Yes, the supplier gives 15 days advance raw material on credit.

14) Who pays the carrying cost of purchase and sell ?

A:-While selling the cost is paid by the by the customers and while purchasing
the cost is paid by the company.

15) What is the amount of daily turnover ?

A:-Average Daily turnover is Rs:-21,33,333/-

16) What is the process done on the wastage?

A:-In this company wastages are to sold out.

56
Regarding requirements for effective inventory management different literatures
describe in different ways based on their own task objective. In this study requirements
for effective inventory management into four distinct mechanisms that are:-

1) Inventory count (keep track) the inventory

In Phenix spinning mill private limited use mechanisms to control the inventory,
automatic(machine like computer) count has to be conducted. This count enables to the
manager to determine the quantity on hand. Then the manager estimate how much will
be demand period prior to the next delivery periods and bases of the counts to take
decision to put order with prior time. To these count manager know that how much
goods, raw material, semi-finished goods to be store in warehouse.

2) Demand forecast and lead time information

Inventories are used to satisfy demand requirement. So, it is essential to have reliable
estimate of the amount and timing of demand. Similarly, In phenix spinning mill private
limited essential to know how long it will take for order to be diverse. In addition,
manager need to know the extend-to which demand and lead time (the time between
submitting and order & receiving it) might vary the greater the potential variability the
great or the need for additional stock to reduce the risk of shortage between delivers.
Thus, there is critical link between forecasting and inventory management. Manager
also know that the how much demand and nowadays how much risk to be take and try
to reduce the lead time.

3) Cost information holding inventories

Invites three basic cost holding transaction ordering and shortage costs holding or
carrying costs relates to physically having items in shortage costs and many other cost
like electrical cost, human being cost, maintenance cost, etc.

• Ordering cost

Ordering costs are the cost of ordering and receiving inventory they are the cost that
vary with the actual placement on order. These includes determining how much is
needed, preparing invoices, shipping costs, inspecting goods up on arrival for
quality and quantity.

In phenix spinning mill private limited ordering cost pay by them. To put the order
to purchase the raw material that’s material payment and that take to the warehouse
that transportation cost to be pay by the company and other labor charges. Before
the purchase the raw material check the quality and quantity that’s cost also consider
as a ordering cost. Transportation gst/tax pay by the company.

57
 • Holding cost

Holding costs are those costs which pay by company for hold the stock in
warehouse like electrical cost, supervisor cost, maintenance cost , etc. Holding cost
is benefits to the company because the company pay the attention on the demand
easily and speedy so it is benefits for the company and its sometime very expensive
because all cost are pay and per good price is increase so sometime good price is
more than other firm price and the firm would be not earn profit.

In phenix spinning mill private limited has a big warehouse where store the raw
material (3000 bales). Very efficient environment provide to the raw material and
finished goods. Phenix spinning mill private limited also facilitate to storage proper
facility, electric cost, supervisor cost, storage cost, maintenance cost, etc.

• Carrying cost

Carrying costs are those cost which is pay when goods are receive and send to other
party like transportation cost and labor cost etc.

In phenix spinning mill private limited when raw material purchase from direct the
farmer, broker and market yard at that time transportation rate and labor charge pay by
the company and when finished goods send to the party at that time customer pay the
rent and labor charge.

58
INTERPRETATION

• Average 70 bales per day use to take working in machine

• Average Every day 12 ton production
• 20 tons container.
• In average 1 month safety stock is stored in warehouse.
• In average 20 container cotton yarn to be exported.
• From the supplier give the 15 days credit period for purchase goods.
• From customer take advance payment for their order.
• Selling time carrying cost pay by customer. Purchased time carrying cost pay
by company.
• In company 90 labour and 40 employee are working.
• Company monthly average turnover is 6,40,00,000.
• To store the inventory like raw material, semi-finished goods and finished
goods many expense are to be pay by company to handle the inventory like
electric cost, loading cost, unloading cost, human cost, carrying cost etc.
• In this company wastage are sold out.
• This company pay the electronic cost Rs 60,00,000/- monthly.
• This company pay the labour cost Rs 20,00,000/- monthly

Contribute and learning:-

1. My purpose of Summer Internship Project was to experience the situation. Only
books knowledge is not enough for in our life. Also I have known management
learning practical most impotence in professional life.
2. Without practical experience, will not performance in future life. I had learning
how to co-ordination between employee. Also learn organization structure,
Financial department, HR department, Marketing department.
3. When I say my senior people doing each and every kind of work I come to know
how much important is each and every work.
4. It have really a good knowledge to learn in an academic field. Till now, I just had
acquired theoretical knowledge, but by this I came across huge exposure to various
realistic knowledge. Also, the staffs of phenix spinning mill private ltd were very
liberal with me & helped me in each & every phase of my training of 45 days.
5. This research helped me in learning how to management of inventory management.
I have learned a lot about how inventory and value chain as a whole functions.

59
FINDING
• Phenix spinning mill private limited buys the cotton from the yard, ginning
mill and also directly from the farmer.
• Phenix spinning mill private limited buys a qualitative cotton at any price.
• Phenix spinning mill private limited sells the wastage instead of reuse.
• Phenix spinning mill private limited also use all latest technology machinery
and plant equipment’s.
• Phenix spinning mill private limited check the quality manually and by
machine.
• Phenix spinning mill private limited has low investment in research and
development department.
• Phenix spinning mill private limited works 24 hours and if any machine stops
than other machine starts so the work would not stop.
• Totally international business.
• Phenix spinning mill private limited gets the credit from suppliers of 15 days
and takes advance payment from the customers.
• Phenix spinning mill private limited has 3000 bales safety stocks so they can
meet the demand.

SUGGESTION
• Low investment in R&D department so high investment and research and
apply new techniques.
• Not known in global market so doing ads, promotion tools to knowing in the
global market.
• Lead time should be decreased so image of the company remains good in the
customer minds.
• New product should be established as per market requirement.

60
LIMITATIONS
• Understanding and interpreting qualitative data is difficult and it may generate
error which may lead to error full research.
• Respondents may not have sufficient information or may not be willing to
provide adequate amount of data that may affect the productivity of the study.
• Lack of the knowledge of research.
• As a student I may not have skills or experience of such qualitative research
which can research into in proper and insufficient data collection.
• As the data collected in the form of qualitative data its become difficult to
express it in verbal form.

61
CONCLUSION
As a part of our MBA circular I conducted research on “a study to analyse the inventory
management.” In which I would like to conclude that consumer are aware about the
inventory management of phenix spinning mill private ltd.
This company have good storage capacity for both raw material and final goods. In this
company the product quality is very good, give the good service to their customer.

Regarding to purchased inventory, the industry purchased the right item at right time
and right quantities through which they help in minimize wastage of inventory. At the
right time and place to purchased minimize the production cost.
Finally the company used the daily cheeking the inventory system that control huge
quantities and low unit price of inventory.

62
ABBREVIATION

Ta :- Taluka

Di:- District

Etc:- Et cetera

Pvt:- Private

Ltd:- Limited

Rs:- Rupees

Fm:- Financial management

TUFS:-Technology Upgradation Fund Scheme

ECPGs:-Export Promotion Capital Goods scheme.

R&D:-Research and Development

Sr. – No. – Serial number

P. No. – Page number
MBA – Master of Business Administration

63
 BIBLIOGRAPHYS

Bibliography
Atnafu, D. (18 JULY 2018). Empirical evidence from micro and small enterprises to stable in
competitive market. Cogent Business & Management, 1-16.

Dr. K.Ashokkumar, P. (2018). IMPORTANCE OF INVENTORY MANAGEMENT FOR AGILE

MODELING,. International Journal of Pure and Applied Mathematics,Volume-119 No
15, 1-6.

HITEN MEHTA, D. M. (2018). RESEARCH METHODOLOGY. GANDHINAGAR: HIMALYA

PULISHING HOUSE.

Kontus, E. (5 DEC 2014). MANAGEMENT OF INVENTORY IN A COMPANY. Econviewa, 1-12.

LAKSHAMI, V. (2016). INVESTMENT IN THE INVENTORY MANAGEMENT. Inventory

Management- A Review of Relevant Literature, 1-4.

Ontita, D. S. (201). INVENTORY MANAGEMENT APPROCHES AND PERFORMANCE OF TEXTILE

INDUSTRY. INVENTORY MANAGEMENT APPROACHES ANDPERFORMANCE OF
TEXTILE MANUFACTURING FIRMS IN KENYA, 1-56.

Shafi, D. (2014). EFFECT OF PROPER INVENTORY MANAGEMENT ON BUSINESS

PERFORMANCE. MANAGEMENT OF INVENTORIES IN TEXTILE INDUSTRY: A CROSS
COUNTRY RESEARCH REVIEW, 1-6.

Syed, A. N. (July 2106). RELATION BETIEN INVENTORY MANAGEMENT AND COMPNAY

PERFORMANCE. Advance Management Science vol 4, No 4, 1-6.

Ziukov, S. (2015). A LITERATURE REVIEW ON MODELS OF INVENTORY. Economic Business

System and Economic,Volume 5 (1), 1-10.

Website Referee
https://www.ibef.org/archives/detail/b3ZlcnZpZXcmMzc3NDEmMTEy

http://www.allnationaljmynal.com/download/131/3-3-27-887.pdf

https://www.ibef.org/archives/detail/b3ZlcnZpZXcmMzc3NDEmMTEy

https://ambadipba.wordpress.com/2013/11/30/top-ten-textile-companies-in-india/

64
Book

Research Methodology, Himalaya publication, Dr. Hitesh Parmar, Dr.

Dhaval Maheta, Dr. Harichandrasingh Rathod (2018).

65
 ANNEXURE
QUESTIONNAIRE
Taking an personal Interview of company director to know how to manage inventory
those question is describe below:-

1) Is company taking order in advance ?

2) How many bales used in production per day ?
3) How many tons use raw materials in production per day ?
4) Which is cost of inventory management ?
5) How many bales purchased each month ?
6) Which techniques use to purchase ?
7) How much per day turnover ?
8) How much tons contain in container ?
9) How many containers are sold every month ?
10) How many safety stock do you keep in warehouse ?
11) How many additional stock do you keep in warehouse?
12) From the customer take advance payment or credit ?
13) Can supplier can give the raw material on credit ?
14) Who paid the carrying cost at the time of purchase and sell ?
15) How much daily turnover in Rs ?
16) What to do of wastage ?

Thank You.

66