AN ORGANIZATIONAL STUDY AND A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD CEMENT CORPORATION LIMITED, KARUR

INTERNSHIP PROJECT REPORT

Submitted by

L.BOOPATHI Register No: 732211631005

in partial fulfillment for the award of the degree Of

MASTER OF BUSINESS ADMINISTRATION

in DEPARTMENT OF MANAGEMENT STUDIES

NANDHA ENGINEERING COLLEGE ERODE 638052

JULY 2012

BONAFIDE CERTIFICATE NANDHA ENGINEERING COLLEGE ERODE 638052

DEPARTMENT OF MANAGEMENT STUDIES INTERNSHIP PROJECT WORK This is to certify that the project entitled

AN ORGANIZATIONAL STUDY AND A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD CEMENT CORPORATION LIMITED, KARUR

is the bonafide record of project work done by

L.BOOPATHI Register No: 732211631005

of MBA during the year 2011-2013

Project Guide

Head of the Department

Submitted for the Summer Internship Training Viva-Voce examination held on

Internal Examiner

External Examiner

DECLARATION

I affirm that the project work titled AN ORGANIZATIONAL STUDY AND A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD CEMENT CORPORATION LIMITED, KARUR being submitted in partial fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION is the original work carried out by me. It has not formed the part of any other project work submitted for award of any degree or diploma, either in this or any other University.

(Signature of the Candidate) L.BOOPATHI

Register No: 732211631005

I certify that the declaration made above by the candidate is true. (Signature of the Guide) K.NATHIYA, MBA, M.Phil. Assistant professor

ACKNOWLEDGEMENT I would like to express my gratitude to Chairman Thiru.V.SHANMUGAM of NANDHA ENGINEERING COLLEGE, ERODE for giving me an opportunity and facility to complete this project. I wish to place my deep sense of gratitude to principal Dr.V.R.SAMPATH, of NANDHA ENGINEERING COLLEGE, ERODE. I offer my profound gratitude to Mr.N.DEVRAJ, B.E., MBA. Department of Management Studies, NANDHA Head,

ENGINEERING

COLLEGE, ERODE. for his entire support to complete this project report. I owe my boundless gratitude to my faculty guide K.NATHIYA, MBA. MPhil. Assistant Professor of MBA Department, for his guidance and supervise of this project for successful completion. I sincerely thank to Mr.THIRUNAVUKARASU, HUMAN

RESOURCE MANAGER, CHETTINAD CEMENT CORPORATION LIMITED, KARUR. for giving me permission to do this project at their concern. I express my sincere thanks to my beloved parents, friends and the staff member for and those who are encouraged and supported for completion and this project report.

L.BOOPATHI

CONTENTS CHAPTER` DESCRIPTION

ABSTRACT LIST OF TABLES LIST OF CHARTS INTRODUCTION

PAGE NO I II III 1 2 15 25 26 27 27 29 30 32 33 34 35 35 36 37 38 39

1.1 1.1 1.2 1.3 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3

Introduction to the study Industry profile Company profile Organization chart Production Department Store Department Human Resource Department Marketing Department Financial Department Quality Department Scope of the study Limitations of the study

DEPARTMENT PROFILE

MAIN THEME OF THE PROJECT 3.1 Objectives of the study

3.2 Need of the study

3.3 Research Methodology 3.4 Tools for Analysis 3.5 Review Literature 4 5
DATA ANALYSIS & INTERPRETATION SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 Findings 5.2 Suggestions 5.3 Conclusion

BIBILOGRAPHY & ANNEXTURE

56 57 58 59

LIST OF TABLES TABLE NO

4.1.1 4.1.2 4.1.3 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 Level of inventory Inventory turnover Ratio Inventory conversion period EOQ analysis for the year 2006-07 EOQ analysis for the year 2007-08 EOQ analysis for the year 2008-09 EOQ analysis for the year 2009-10 EOQ analysis for the year 2010-11

DESCRIPTION

PAGE NO
40 42 44 46 48 50 52 54

LIST OF CHARTS CHART NO

4.1.1 4.1.2 4.1.3 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 Level of inventory Inventory turnover ratio Inventory conversion period EOQ analysis for the year 2006-07 EOQ analysis for the year 2007-08 EOQ analysis for the year 2008-09 EOQ analysis for the year 2009-10 EOQ analysis for the year 2010-11

DESCRIPTION

PAGE NO
41 43 45 47 49 51 53 55

ABSTRACT
The purpose of inventory management is to ensure availability of raw material in sufficient qualities as and when required and also minimize investment in inventories. There is an essential to manage inventories efficiently and effectively in order to avoid excess investment. It is possible for a company to reduce the level of inventories to a considerable extent without any adverse effect on production and sales by using simple inventory planning and control techniques. The reduction of excessive inventories will create a favorable impact on the company profitability. Inventory turnover ratio, inventory conversion period are very helpful to know how effectively plays and control in the organization EOQ analysis will enables the organization to use of EOQ analysis is very effective and useful tool for classifying, monitoring and control of inventories.

CHAPTER 1
1.1 INTRODUCTION TO THE STUDY The study entitled as A study on Inventory Management of Chettinad Cement Corporation Ltd, Karur. We are going to see the importance of Inventory Management in production and how it will helps to controlling the inventory cost. Controlling the inventory cost which enable to earn more profit. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is recurred at different locations within a facility or within multiple locations of a supply or network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of Inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, Inventory forecasting, physical inventory, available physical space for Inventory, quality management, returns and defective goods and demand and forecasting. Types of inventory Normally the inventory has divided into two types. These, 1. 2. Merchandising inventory, Manufacturing inventory.

The manufacturing inventory has been subdivided into three types. These, 1. 2. 3. Raw materials, Work in process, Finished goods.

1.2 INDUSTRY PROFILE

History of the origin of cement
It is uncertain where it was first discovered that a combination of hydrate nonhydraulic lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixture was first used on large scale by roman engineers. They used both natural pozzolans (trass or pumice) and artificial pozzolans (ground brick or pottery) in the concretes. Many excellent examples of structures made from these concretes are still standing. Notably the huge monolithic dome of the pantheon in Rome and the massive Bath of Caracalla. The vast system of roman aqueducts also made extensive use of hydraulic cement. The use of structural concrete disappeared in medieval Europe. Although weak pozzolanic concretes continued to be used as a core fills in stone walls and columns.

Modern cement
Modern hydraulic cement began to be developed from the start of the industrial Revolution (around 1800) driven by three main needs: Hydraulic renders for finishing brick buildings in wet climates Hydraulic mortars for masonry construction of harbor works etc. in contact with sea water.

Varieties of the cement

There are some varieties in cement that always find good demand in the market. To know their characteristics and in which area they are most required, it will be better to take a look at some of the details given below.

Portland blast furnace slag cement (PBFSC)

The rate of hydration heat is found lower in this cement type in comparison to PPC. It is most useful in massive construction projects, for example-dams.

Sulphate resisting Portland Cement (SRPC)

This cement is beneficial in the areas where concrete has an exposure to seacoast or sea water or soil or ground water. Under any such instances, the concrete is vulnerable to sulphates attack in large amounts and can damage to the structure. Hence, by using this

cement one can reduce the impact of damage to the structure. This cement has high these cement one can reduce the impact of damage to the structure. This cement has high demand in India.

Rapid hardening Portland Cement (RHPC)

The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC and possesses immense compressible strength, which makes casting work easy.

Ordinary Portland Cement (OPC)

Also referred to as grey cement or OPC, it is of much use in ordinary concrete construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium (MgO), Silica (SiO2), and Sulphur, trioxide (SO3) components are used.

Portland Pozolona Cement (PPC)

As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used in the production of this category of cement. It can be availed at low cost in comparison to OPC.

Oil Well Cement (OWC)

Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing or fixing oil wells. This is applied on both the off-shore and on-shore of the wells.

Clinker Cement (CC)

Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is needed in the construction work of complexes, houses and bridges. The ingredients for this cement comprise iron, quartz, clay, limestone and bauxite. A part from these, some of the other types of cement that are available in India can be classified as: Low heat cement,

 High early strength cement, Hydrophobic cement, High aluminum cement and Masonry cement. 1.2.1 CEMENT INDUSTRY IN GLOBAL Cement is a basic ingredient for the construction industry. It is estimated there are 1500 integrated cement production plants in the world. Although the players such a Lafarge or CEMEX, the share of the four largest firms account only for 23% of the overall demand.

Demand
World cement demand was 2,283MT in 2005, with China accounting for 1,064MT (47% of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase its demand by 250MT during the period, an increase higher than the total yearly European demand.

Demand of Cement

Demand for cement in MT

2005

2010

Growth rate

North America

170

200

2.9%

Western Europe

208

236

2.2%

Asia/Pacific

1500

1900

5.2%

Other regions

405

500

4.7%

World cement demand

2283

2836

4.7%

Top 25 Cement companies in the world

S.NO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. Name of the Company Aditya Birla Group-Grasim Al-Ghurair Group Ambuja Cements Limited Anhui Conch Cement Company Arabian Cement Company Ararat Cement Co. Cement Cruz Azul Cement Co. CEMEX Co. China National Cement Materials Group Corporation Cimpor Cement corp. CompanhiaSiderurgical National S.A Concrete Casting Cement Company CRH plc Eagle Materials Inc Heidelberg Cement Company James Hardie Cements Lafarge Libyan Cement Company Monarch Cement Ltd. Norcem Pretoria Portland Cement Company Ready Mix Inc Rinker Group Semapa Group Smith-Midland Cement Company Name of the Country India Dubai India China Egypt South Africa Armenia U.S.A China China Brazil Pacific Alloy America U.S.A Germany U.S.A India Libya U.S.A, California Germany South Africa India Australia Europe U.S.A, Milford

1.2.2 CEMENT INDUSTRY IN INDIA

The cement industry in India has undergone a major shift over the last 6 years. The Indian cement industry is the second largest producer of quality cement. Indian cement industry is engaged in the production of several varieties of cement such as, ordinary Portland cement (OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland cement (PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc., They are produce strictly as per the Bureau of Indian standards (BIS) specifications and their quality is comparable with the best in the world. The industry occupies an important place in the national economy because of its strong linkage to other sectors such as, construction, transportation, coal and power. The cement industry is also one of the major contributors to the exchequer by way of indirect taxes. S.NO Name of the company Details of the company

Year of establishment 1. ACC Limited Head quarters Web site

1994 Maharashtra www.acclimited.com

Year of establishment 2. Ambuja Cements Limited Head quarters Web site

1981 Gujarat www.ambujacement.com

Year of establishment 3. Andhra Cements Ltd Head quarters Web site

1936 Andhra Pradesh www.andhracements.com

Year of establishment 4. Barak Valley Cements Ltd Head quarters Web site

1999 Assam www.barakcement.com

Year of establishment 5. Bheema Cements Ltd Head quarters Web site

1978 Andhra Pradesh www.bheemacement.com

Year of establishment 6. Binani Cement Ltd Head quarters Web site Year of establishment 7. Birla Corporation Limited Head quarters Web site Year of establishment 8. Burnpur Cement Ltd Head quarters Web site Year of establishment 9. Chettinad Cement Corporation Limited Head quarters Web site Year of establishment 10. Dalmia Limited Cement (Bharat) Head quarters Web site 11. Deccan Cements Ltd Year of establishment Head quarters

1996 West Bengal www.binani.com 1919 West Bengal www.grasim.com 1986 West Bengal www.burnpurcement.com 1962 Tamil Nadu www.chettinadcement.com 1951 Tamil Nadu www.dalmiacement.com 1979 Andhra Pradesh

Web site

www.deccancem.com

12.

Everest Industries Ltd

Year of establishment 1934 Head quarters Maharashtra Web site Year of establishment www.everestind.com 1948 Madhya Pradesh www.grasim.com 1973 Gujarat www.gujaratsidhee.com 1958 Karnataka www.mycemco.com 1946 Andhra Pradesh www.hil.in 1962 Maharashtra www.indianhumepipe.com 1994 Uttar Pradesh www.jkcement.com 1938 Rajasthan www.jklcem.com

13.

Grasim Industries Limited

Head quarters Web site Year of establishment

14.

Gujarat Sidhee Cement Ltd

Head quarters Web site Year of establishment

15.

Heidelberg Cement India Ltd

Head quarters Web site Year of establishment

16.

Hyderabad Industries Ltd

Head quarters Web site Year of establishment

17.

Indian Hume Pipe Company Ltd Head quarters Web site Year of establishment

18.

J. K. Cement Limited

Head quarters Web site Year of establishment

19.

JK Lakshmi Cement Ltd

Head quarters Web site

Year of establishment 20. Kalyanpur Cements Ltd Head quarters Web site Year of establishment 21. Katwa Cements Ltd Head quarters Web site Year of establishment 22. Kesoram Industries Ltd Head quarters Web site Year of establishment 23. Madras Cements Limited Head quarters Web site Year of establishment 24. Mangalam Cement Ltd Head quarters Web site Year of establishment 25. NCL Industries Ltd Head quarters Web site Year of establishment 26. Nirman Cements Ltd Head quarters Web site Year of establishment 27. OCL India Ltd Head quarters Web site 28. Panyam Cements & Mineral Year of establishment Inds Ltd Head quarters

1937 West Bengal www.kalyancemenet.com 1993 Karnataka www.katwagroup.com 1919 West Bengal www.kesocorp.com 1954 Tamil Nadu www.madrascements.com 1976 Rajasthan www.mangalamcement.com 1979 Andhra Pradesh www.nclind.com 1983 Bihar www.nirmancements.com 1949 Orissa www.ocl.in 1955 Andhra Pradesh

Web site Year of establishment 29. Prism Cement Ltd Head quarters Web site Year of establishment 30. Rose Zinc Ltd Head quarters Web site Year of establishment 31. Sagar Cements Ltd Head quarters Web site Year of establishment 32. Sainik Cement Inds. Ltd Head quarters Web site Year of establishment 33. Sanghi Industries Ltd Head quarters Web site Year of establishment 34. Saurashtra Cement Ltd Head quarters Web site Year of establishment 35. Shiva Cement Ltd Head quarters Web site

www.panyamcements.com 1992 Andhra Pradesh www.prismcement.com 1990 Rajasthan www.rosezinc.com 1981 Andhra Pradesh www.sagarcements.in 1991 Delhi www.sainikcem.in 1985 Andhra Pradesh www.sanghicement.com 1956 Gujarat www.saurashtra.com 1985 Orissa www.shivacement.com

Year of establishment 36. Shree Digvijay Cement Head quarters Web site Company Ltd

1983 Gujarat www.digvijaycement.com

Year of establishment Head quarters 37. Somani Cement Company Ltd Web site Year of establishment 38. Sri VasaviInds. Ltd Head quarters Web site Year of establishment 39. Sri Chakra Cements Ltd Head quarters Web site Year of establishment 40. Stresscrete India Ltd Head quarters Web site Year of establishment 41. The India cements Ltd Head quarters Web site Year of establishment 42. Udaipur Cement Works Ltd Head quarters Web site

1983 Andhra Pradesh www.anjanicement.com 1985 Andhra Pradesh www.srivasavi.com 1981 Andhra Pradesh www.chakracement.com 1983 Maharashtra www.stresscrete.com 1946 Tamil Nadu www.ramcocement.in 1993 Rajasthan www.udaipurcement.com

Year of establishment 43. UltraTech Cement Limited Head quarters Web site

2000 Maharashtra www.ultratechcement.com

Year of establishment 44. Vinaycements Ltd Head quarters Web site

1986 Assam www.vinaycements.com

Year of establishment 45. Visaka industries Ltd Head quarters Web site Year of establishment 46. Zuari cement corporation Ltd Head quarters Web site

1981 Andhra Pradesh www.visaka.org 1985 Andhra Pradesh www.zuaricement.com

1.2.3 CEMENT INDUSTRY IN TAMILNADU The cement industry of India hopes the most in Tamilnadu. The Tamilnadu is the state which has produces the quality cement in India. The Tamilnadu government was formed a company name is Tamilnadu cement corporation limited (TANCEM) in the February 1976 as public limited company. The TANCEM was formed two cement plants in Tamilnadu. These, 1. Alangulam cement works. Alangulam, virudhunagar districts. 2. Ariylur cement works. Ariyalur, perambalur districts. The following table shows the details of cement companies in districts of Tamilnadu. These,

S.NO

Name of the company

Details
Year of 1962 establishment

Chettinad Limited

Cement

Corporation Corporate office Chennai Plant Places Brand name Karur, Ariyalur Chettinad. Dhindukal,

Year of 1946 establishment Corporate office Chennai. 2 The India cements Ltd Plant Places Ramanathapuram, Sangakiri, Ariyalur. Sankar cement, Coromandel cement.

Brand name

Year of 1950 establishment

Madras cement Ltd

Corporate office Chennai. Plant place Brand name Ariyalur. Ram co cement.

Year of 1979 establishment Corporate office Chennai (Govt).

Tamilnadu cements corporation Ltd

Plant place Brand name

Ariyalur. Arasu cement

Year of 1976 establishment Corporate office Madurai. 5 Janathacem industries limited Plant place Brand name Rajapalayam,madurai. Janatha cement, agsar cement.

Cement Company in Karur District

Chettinad Cement Corporation limited, karur is the one of most popular cement manufacturer in Tamilnadu. The Chettinad cement work plants other than karur district, 1. Karikalini cement works, Dhindukal district, 2. Ariyalur cement works, Ariyalur district, The Chettinad cement corporation limited, Karur is the head company in Chettinad cement companies. They are produced 5,00,000 tons of cement per year. They are used those cement for their own company use such as, 1. Chettinad builders pvt ltd, 2. Chettinad house pvt ltd, 3. Chettinad group of companies.

1.3 COMPANY PROFILE History of the company

The history of the group house of Chettinad is linked with the 9 decades old saga. In 1912 took birth the House of Chettinad through a visionary idealist, born entrepreneur Dr. Rajah Sir Annamalai Chettiar who believed in Social Transformation through business. The founder of the House of Chettinad envisioned, his companies providing the stimulus for Industrial Growth and conceived business as a means of improving the living standards of people. The corporate credo of the House of Chettinad STRIVE, SAVE AND SERVE is the very thought of our founder. IN order to continue fulfilling his dreams and aspirations. To reach greater heights and the reins were taken over by equally visionary businessmen his son, Dr. Rajah Sir Muthiah Chettiar and grandson Dr. MAM. Ramaswamy. The house of Chettinad reached new heights with generations of hard work, dedications and remains the stamp of quality, integrity and reliability under the versatile, pragmatic and visionary leaderships.

Present position of the company

Today, a 8500 million business group has ventured and diversified in varying fields including manufacturing (Cement, Silica, Quartz, Grits), services (construction Transports, Steel fabrication, Ship management and stevedoring. Clearing and forwarding) Trading, power generation, plantation, farms, logistics. Education, sports management, literature, art and music fields have also been contributed vastly. It is a matter of great pride and satisfaction that the group finds worldwide patronage and earns precious foreign exchange for the country. The group aims to broaden its horizons and reach and the zenith in this millennium under the yond, dynamic, enthusiastic, able leadership of Mr. MAMR Muthiah. The future of the companies in the house of Chettinad is based on the time tested and proved guidelines of total customer orientation, technology in the service of man and business as an instrument of social service. To these timeless truths, we remain steadfast forever.

Management of Chettinad Cement Corporation Limited

CHAIRMAN MD STARTED DIRECTORS : : : : MR.M.A.M.RAMASWAMY SRI.M.A.M.R.MUTHAIAH 1962 SRI.RAMANATHAN PALANIAPPAN SRI.R.KRISHNA MOORTHY SRI.SP.S.T.PALANIAPPAN SRI.K.GANAPATHY&C.S.PARI Dr.T.PRABHAKARA NOMINEE) COMPANY SECRETARY : TYPE CO-SECRETARY AUDITORS : : : SRI.S.HARIHARAN PUBLIC SRI.S.HARIHARAN M/S.P.B.VIJAYARAGRAN&CO M/S V.SOUNDARARAJAN&CO M/S KRISHAAN &CO REGISTERED OFFICE : Chettinad 5th 603 Cement Rani Corporation Seethai 600 Ltd, Hall, 006. RAO, IAS (TIIC

Floor, Anna Salai,

Chennai

Telephone Fax No :

No:

+91-44-28292727 +91-44-28291594

e-mail : chtdmds@vsnl.com PRODUCTION PLANTS WEBSITE : : PULIYUR, KARIKKALI, ARIYALORE. www.chettinad.com

VISION
With almost a century of continuous growth and prosperity behind us we envisage our future as another opportunity to which greater heights and to perfect the art of perfectionism upholding the vision of our founder Dr. Rajah sir Annamalai Chettiar STRIVE, SAVE AND SERVE. The nature ethics and style of business believe that nothing can supplement the idealism which motivates the business we fall back on the time tested. Principles of total customers orientation technology in service of man and business as an instrument of social service to this timeless truth we remind steady fast forever.

MISSION
To achieve & sustain cost leadership in the cement market. The harness technology to its full potential in a safe & clear environment in the entire business cycle & integrate quality with continuous improvement. To became a vibrant learning organization by building skills and competitiveness of employees for growth. To be the best and most respectable corporate citizen.

Product profile of Chettinad Cement Corporation Ltd.

Pavithram: Unique cement manufactured at Puliyur works having high quality for special concrete applications. Chettinad Grade 53: Superior finely ground cement, suitable for plastering works, giving a silky finished look. For RCC applications laser controlled manufacturing would yield best result. Chettinad Grade 43: Multipurpose cement, suitable for plastering and binding. Chettinad PPC: A finely blended cement, providing very fine result for plastering work, devoid of hair line cracks and giving excellent appearance to the building. Sulphur Resistant Cement: Finds applications in the construction activity in the coastal areas to save from corrosiveness due to salty environment.

MANUFACTURING DETAILS Mines-Puliyur Works

Limestone is sourced from our mines at palayam which is located 40kms from the factory. The mines are equipped with the latest machinery and technology including for sequential blasting. The mined limestone is then crushed through primary and secondary crusher.

Mines-Karikkali works
Limestone Mines are located at about 3 kms. from the factory. The mines are fully mechanized and have also a terminator for mechanized breaking of individual boulders. The Crusher is located at Mines and crushed limestone is transported by long belt conveyors to factory.

Stacker and Reclaimer-Puliyur Works

The crushed limestone is then sent through the X-Ray analyzer and approved for further process only on meeting quality standards backbone of the quality control.

Stacker and Reclaimer- Karikkali works

The entire quantity of crushed limestone passes through the online cross belt analyzers and is stacked at the pile in the factory. Three numbers of separate stackerreclaimer are available with truck tipplers for proper stacking and Reclaiming of corrective raw materials, fuels and additives. Stacker Declaimers help to achieve high degree of stacking and ensure maximum level of consistency for the input materials to raw mill, coal mill and cement mill.

 Raw Mill-Puliyur Works

The limestone from the reclaimed is mixed with additive of bauxite and Iron ore and transported to the vertical roller mill through weigh feeders (which control the additive addition). The operator takes corrective steps on viewing any deviation. The loesche-German make vertical roller mill is similar in principle to the tilting grinder with gigantic roller and operated by the hydraulic system, to give fine blended raw material. From the loesche mill the raw material is the taken to two silos to produce Varity of cement.

Raw Mill- Karikkali works

Pre-stacked limestone of stockpile is ground in the VRM along with corrective materials with required ratios are made to produce raw meal and that is stored in Blending cum Storage Silo. There are separate hoppers with weigh feeders for continuous and regulated addition of each raw material. The mix passes through the cross belt analyzers which analyze the mix chemistry and solve the mix ratio every minute to have very good consistency in the raw mix.

Kiln-Puliyur Works
The finely grounded blended raw material is sent to a five stage kiln. Kiln is a key process in the manufacture of cement where the calcinations & chemical reaction take place. Coal fired burner (Controlled through latest solid & low feeder) is used to heat the air to 1400c and is fed from one end of the kiln. The data accusation and control center meticulously monitor the entire process including the temperature.

Kiln- Karikkali works

Raw meal extracted from silo is fed to the kiln where it is sintered at about 1400o C to clinker. This process is called preprocessing which consists of a five stage suspension heaters with precalciner, the kiln and the clinker cooler. Clinker cooler with CIS and CFG for maximum heat recuperation and the cooled clinker is transported to a storage silo.

 Cement Mill-Puliyur Works

The clinker is then ground, depending upon the grade, the additive is added. For all grades of cement 5% gypsum is added to control setting of cement we use Japanese technology in fine grinding with vertical roller mill from anode Kobe, Japan, laser practical size analyzer is used to monitor fineness of the cement for yielding very good quality cement.

Cement Mill- Karikkali works

Finally, grinding is done in OK Vertical Roller Mill for optical particle size distribution and less power consumption with excellent ease of operation for feeding, grinding and classification. To maintain quality of various types/grades of cement, there are separate hoppers with weigh feeders for the addition of fly ash, gypsum, etc. Quality of final product is monitored and controlled every hour by testing samples in the XRF analyzer. Final products are stored in cement silos.

Packing House - Puliyur woks

The four automatic packing machines have been installed, together they have the capacity to deliver 4800 tons per day of packed cement. These packing equipments are very accurate and any fault can be rectified as each bag is verified before the next is filled. These are also cross-checked by the Electronic weighing scale used to note the load carried by the Lorries.

Packing House - Karikkali works

There are 2 nos. of Electronic Rot packer which automatically pack cement in bags, each with a capacity of 150 tons/hour. Packed cement is loaded into trucks/wagons with automatic loading machines.

ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.

S.No 1 2 3
achieving lowest

AWARDS
National Safety Award (for outstanding performance in Industrial Safety in frequency rate in Industry)

YEAR
1976 1977 1972 1978 1985 1986 1995 1996 1997

Runners up Highest % reduction in frequency rate Merit Awards from Regional Directorate of Workers Education Tamil Nadu Film Arts Association, Chennai Shield National Productivity Award (Best Productivity Performance in Cement Industry issued by NPC) Second Best

Best Best Second Best National Safety Award (Mines)-(for lowest injury frequency rate Metal Mines Mechanized Open Cast).

1986 1986 1989

Longest Accident Free Period. Best performance of the year. Conservationist of the year (for outstanding progress in the field of

Conservation of Energy, Metal Components & Machinery) NCBM Second National Awards (Improvement in Energy Performance). Best

1987 1994 1995 1998

Best Best TNEB Energy Conservation Award - (One among the 15 Energy Efficient

8 9

H.T. Industries of 2000 KVA) NCBM National Award Second Best for Energy Efficiency Performance

1998

1998

Source: Annual report of Chettinad Cement Corporation Limited

MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED

Sl. No.
1

MILESTONES
0.4 MTPA cement production capacity with wet process plant installed at Puliyur. Modernized into dry process plant to a capacity of 0.8 MTPA with a kiln

YEAR
1967

capacity of 2000 TPD commissioned with modern vertical roller mills for fuel & limestone grinding.

1989

3 4 5 6 7 8

2 Nos. of 5.4 MVA Capacity WARTSILA DG set installed. 66 Nos. of wind electric Generator of total capacity 17.3 Mw installed at PoolavadiUdumapletTaluk. ISO 9002 Certificate received. Stacker & Re-claimer for Limestone installed. Belt Elevator for Raw mill and Kiln feed installed. A) Impact Crusher for lime stone crushing at mines installed. B) Bag filter for coal mill grinding system. Vertical roller mill for cement grinding installed. Additional ESP installed for Kiln/ Raw mill to handle excess process gases. CIS/CFG Cooler installed. Low pressure cyclone installed.

1990 1994 1995 1996 1996 1997

1998

10

Latest

Technology LV-Tech classifier installed in Raw Mill. The plant

2000

capacity increased to 1.2 MTPA cement. 11 12 13 14 15 16 Green field Cement plant with capacity of 0.9 MTPA was commissioned at Karikkali. Rock breaker (Terminator) installed in mines. ISO 14001:2004 is implemented. Environment Management Service Certificate option. 1 No. 15MW Coal based Captive Power Plant commissioned in 12 Months at Karikkali. Fly Ash Silo construction work completed at Puliyur and Karikkali. 2001 2001 2003 2004 2004 2005

17

Roller press with ball mill for cement grinding with capacity 0.7 MTPA installed at Karikkali. 2006

18

Vertical roller mill for cement grinding installed. Additional ESP installed for Kiln/ Raw mill to handle excess process gases. Karikkali plant capacity increased to 2.0 MTPA by increasing of blended cement production. Bag House installed in Raw Mill/Kiln Circuit in addition to the existing ESP at Puliyur. Energy dispersive X-Ray specto meter was put into service for increasing the output and economical mines operation & conservation of minerals. Advance Research laboratories, Switzerland make X-Ray Spectrometer

2006

19

2007

20

2007

21

2007

22

Sequential type was commissioned for augmenting clinker production and its quality.

2007

23

Seethainagar Mines crusher capacity was upgraded for supply of 40% Karikkali plant requirement of limestone. Coal based 15 MW capacity CPP was commissioned during Feb-2008 at Puliyur Works. Automation & control sections PLC's OS software up gradation and PLC's capacity. KHD make Burner Management System for kiln operation to improve quality of clinker and to save thermal energy. Coal based 2 x 15 MW capacity CPP was commissioned during Sep-2008 at Ariyalur. Green field Cement plant with capacity 2.75 MTPA was commissioned during Dec-2008 at Ariyalur. Video conferencing facility was commissioned between Puliyur, Karikkali,

2007

24

2008

25

2008

26

2008

27

2008

28

2008

29

Ariyalur and Head Office for more effective and faster communications and project monitoring. Brown field Cement plant with capacity 2.75 MTPA was commissioned at Ariyalur during October-2009. Coal based 1 x 15 MW capacity CPP was commissioned during Jan-

2008

30

2009

31

2010 Erection and Commissioning of 2 Cement Plants in World Record time at ariyalur 30 months from BhoomiPooja to commissioning highest production capacity for cement in a single location at Ariyalur Three No. 15

2010

MW coal based captive power plants commissioned in 18 months at Ariyalur Chettinad Cement Technical team rated No1 by FLS Denmark at Ariyalur. 32 Roller press with ball mill for cement grinding with capacity 0.5 million commissioned during February -2010 at Puliyur. Brown field Cement Plant with capacity of 2.5 MTPA was commissioned 33 at Karikkali in March 2011 along with coal based 30MW captive power plant within the same premises Work is under progress for a new Green field production line of 2.5 MTPA 34 cement with 1 No. of 30MW Coal based captive power plant in Kallur Village, ChincholiTaluk and GulburgaDist of Karnataka state and expected to be commissioned in year 2012. 2011 2011 2010

1.4 ORGANISATION CHART

Executive Chairman

Chief Operating Manager

MD & CEO

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR CUSTOMER SUPPORT

HEAD PRODUCTION

HEAD PERSONAL

HEAD ADMINISTRATION

HEAD ACCOUNTS

HEAD PURCHASE

HEAD PURCHASE

MANAGER

MANAGER

ASST.MANAGER

ASST.MANAGER

ASST.MANAGER

HEAD CUSTOMER

WORKERS

WORKERS

CHAPTER 2
DEPARTMENT PROFILE 2.1 PRODUCTION DEPARTMENT Chettinad Cement Corporation Ltd., (CCCL) initially the cement was manufactured in the wet processing technology. Due to hike in the fuel price company went for expansion in the year 1989 to produce with the least dry process technology PRODUCTION PROCESS Limestone is the basic raw material for producing cement. Limestone is received from the quarry by tippers. The size of limestone is 1 cubic feet. The lime stones are crushed in the limestone crusher and are brought to a size of 1 inch and below then that. The crushed limestone is conveyed by and inclined belt conveyer to the raw mill hoppers. The active are red mud and blue dust (around 2%) to get the required composition of kiln feed slurry. The crushed lime stone with additives are grade in raw mills along with water to produced slurry with around 30%-40% moisture cement. The slurry is pumped by slurry pumps to the slurry silo. In the silo the compressed is pumped to mix the slurry well. The composition is slurry is checked and pumped to slurry basis, if the composition is ok, if the slurry composition is not ok high grade limestone is crushed ground in raw mills and pumped to the same silo to the correct composition. The sludge is tipped into the wash mill; water is added and availed well to produce sludge slurry. This is pumped to slurry silo as a sweetener. The slurry from the basis is pumped to the kiln through variable speed slurry feeding arrangement of the required rate determined by the kiln operators. The kiln feed slurry enters the kiln, pass through drying, preheating zone. In this zone the kiln feed slurry gets tried and pre heated to 8000 c. Now the material is in powder form and inters claiming zone where the temperature will around 800-9000c. Now the materials enters burning zone where the materials is treated to 1350-14500 c. Here the reaction takes place between Sio2, Cao, AI203, and Fe203 to for di calcium silicate.C2S tri calcium, silicate C3S, tri calcium aluminate, terra calcium, Aluminum Ferrite C4AF. The mixtures of product are called clinker. RAW MATERIALS Limestone Iron ore

 Bauxite Gypsum Fly ash Slag Coal Raw lignite Power 2.2 STORE DEPARTMENT Store plays a vital role in the operations of a company. It is in direct contact with the user department in it is day to day activities. The most important objective of store is to provide uninterrupted supply of material section is located to production with to save material cost in ash in an effective manner. FUNCTIONS OF STORE DEPARTMENT Management of receipts Issue control on materials Documentation received Inspection of materials Computerization of data received from user department. Codification of materials. Physical verification of stores Stores vacation. SECTION IN STORE DEPARTMENT The store is divide d into three section and they are, Receipt section. Issue section. Inventory section. 2.3 HUMAN RESOURCE DEPARTMENT RECRUITMENT In CCCL there is no recruitment policy. Recruitment is made based on the requirement of man power based on the nature of the requirement of man power. The company either goes for advertising in newspaper & considers unsolicited application experience is depends on the job nature.

TRAINING AND DEVELOPMENT In CCCL there is short term process of training for non-managerial to learn the technical. Training program is formulated personal department may unable to execute, the take more care and on internal training program and external training program such as firefighting safety and occupational work etc. PROMOTION Promotion is given for the experienced and qualified person this improves the status skills and earning if the workman SAFETY MEASURES 1. Personal safety 2. Industrial safety 3. Housekeeping safety

SAFETY POLICY The companys SAFETY FIRST DUTY NEXT

TOTAL STRENGTH Workman Staffs Executives Contract Workers TOTAL - 172 - 56 - 107 - 131 = 466

HOURS WORKING IN FACTORY 1 shift 12.00 pm to 8.00 Am 2 shift 8.00 Am to 4.00 pm 3 shift 4.00pm to12.00 pm

WELFARE FACILITIES OF THE COMPANY First aid Uniform and shoes Insurance scheme Drinking water

LOAN FACILITIES Housing loans Society loans. Education loans.

ALLOWANCES Housing rent allowances, Conveyance allowances, Dust impact reduction allowances, Washing out dirt allowances

2.4 MARKETING DEPARTMENT MARKETING AND SALES DEPARTMENT The sales area over in Tamil Nadu, Karnataka and Andhra Pradesh. This section includes zonal manager officers and staff dealers and contractors. The order is for customer through telephone and fax. The order bags dispatch through road and rail the cost includes transport package and tax. The enter in the lorry permit slip. It includes the party name designation serial number distance date and time order number of tones type of product and package code. The order is supplied through goods train to Kerala and Karnataka. The train per vegan capacity is 63 tones product price includes excise duty and sales tax. PACKING AND DISPATCH The cement is extracted from the silo bottom and are place in automatic packers. There are four automatic packers which help to pack the cement in 50kg per bags and are transported to destination by means of trucks.

MARKET VIEW Chettinad is also looking at setting up a new plant and some split location grinding and packing units. By 2012 they hope to reach 15 million tones and, if the market continues to grow, 20 million in 2015. 2.5 FINANCIAL DEPARTMENT Finance is necessary for survival and smooth running of business. The accounts are computerized and maintained in Tally in Chettinad cement Corporation Limited, Puliyur. Every year the company presents its financial performance in the form of an annual report which is sent to the shareholders along with AGM notice. PRORIT AND LOSS ACCOUNT In the annual report the profit and loss account and the balance sheet which is authorized by the auditor would be published in the report. Profit and loss account is prepared to determine the net profit or net loss for a specified period, normally one year. BALANCE SHEET Balance sheet is a statement which shows the financial position of the business at the end of the financial period. The financial position, solvency and liquidity can be evaluated with the help of balance sheet.

LIST OF DOCUMENT AND RECORD MAINTAINED

o VOUCHER

o RECEPIT

o TRANSANCTION ENTRY BOOK

o LEDGER BOOK

o SALES INVOICE

o SUBSIDARY BOOK

o CREDIT BOOK

o DEBIT BOOK

o STOCK REGISTER

o DATABASE OF EMPLOYEE

o JOURNAL ENTRIES

o BALANCESHEET

o ANNUAL REPORT

o PURCHASE ORDER

o SALES INVOICE

o OTHER VALUABLE DOCUMENT

2.6 QUALITY DEPARTMENT

Quality control is process by which entities review the quality of all factors involve in production. This approach places an emphasis on three aspects; Element such as controls, job management, defined, and well managed processes, performance and integrity criteria, and identification of controls. Competence, such as knowledge, skills, experience, and qualifications. Soft elements, such as personnel integrity, confidence, organizational culture, motivation, team spirit, and quality relationship.

2.7 SCOPE OF THE STUDY The study helps the management to improve its profitability through a
reduction in non- moving inventory.

It develops the policies for both continuous review of inventory management

system.

The study helps to show the level of the inventory in the organization. The
company will make the proper inventory methods from the suggestions of the study.

2.8 LIMITATIONS OF THE STUDY

It is difficult to get information from management. The study period covers for five years which restricts to know more about the Inventory management of the company. Only quantitative analysis is possible through the statistical tools are used.

CHAPTER 3
3.1 OBJECTIVES OF THE STUDY
To analyze the inventory to perform production and sales activities smoothly. To identify the existing inventory management and its effectiveness. To study the management of inventories efficiently and effectively in order to avoid excess investment. To analysis the performance of inventory management.

3.2 NEED OF STUDY:

To find out the Inventory level of the company. To increase sale of the product To avoid excess Investment in Inventory.

3.3 RESEARCH METHODOLOGY

Research Design
The Descriptive type of research has been applied in the study. This research the researcher has no control over the variables. Only reports what has happened or what is happening. The research can only discover causes but cannot control the variables.

Data collection Primary data

Primary data relating to the inventory management of Chettinad Cement, Karur have been collected through personal interviews hold with the officials of the selected concern under study.

Secondary data
The necessary data calculated from annual report, books, journals and websites.

Period of study
This study covers a period of five years from 2006 2007 to 2010 2011. The accounting year commenced from April and ending with March of the next year.

Area of study
This study was conducted in Chettinad cement corporation limited, Puliyur, Karur District.

3.4 TOOLS FOR ANALYSIS The following tools have been applied in the present study. They are listed below Ration analysis (inventory) and EOQ analysis

Ratio Analysis (Inventory)

The percentage of a mutual fund or other investment vehicle's holdings that have been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its investment objective and or the portfolio manager's investing style will play an important role in determining its turnover ratio.

Economic Order Quantity (EOQ)

Economic order quantity is that level of inventory that minimizes the total of inventory holding cost and ordering cost. The framework used to determine this order quantity is also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most economical quantity of a product that should be purchased at one time. The EOQ is based on all associated costs for ordering and maintaining the product. EOQ refers to the size of the order which gives maximum economy in punches of materials. EOQ = Where A = Annualusageinunit O = Orderingcost C = Carriyingcost 2AO C

3.5 REVIEW OF LITERATURE Bharathipathak 1991 the bulk of the banking business in the country is in the public sector comprising the state bank of India and its seven associated banks and twenty nationalized commercial banks till 1991, the Indian banking industry was operating in a highly regulated and protected regime. But with the acceptance of Norseman committee recommendation, competition has been injected into the banking industry in two forms. The study has been found that HDFC Bank emerged as a leader in this financial analysis of the year ended 2000-01. It closest competitor was ICICI Bank. Financial performance of the other three, no doubt, lagged behind them, but it by no means, depressing. These Bank obviously, have to focus more improving parameters like credit quality and cost control for emerge as the top performance. R. Hamsalakshmi-M.Manicham 2000 The study, it has been found the liquidity position and working capital positions were favorable and good during period of study. Regarding turnover ratio, efficiency in management of fixed assets and total assets must be increased. Regarding return on investment and return on equity was proved that the overall profitability position of the software companies had been increasing at a moderate way. DrR.Dharmaraj 2003 The study article positing in Indian management industry have concluded that for the last five year, there has been proliferation of international and domestic providence of mutual funds. He says that this increased growth is due to the increasing cash flows among innovative young companies through India. Bharathipathak, Finance India Dec 2003 R. Hamsalakshmi-M.Manicham, Finance India Sep2 2009 DrR.Dharmaraj Indian journal of finance volume4 Allen and Carolinian (2003)

Dr Harish kumar2008 A capital adequacy ratio was constant over a period of time. During the study period it was observed that the return on net worth had negative correlation with the debt equity ratio. Inters income to working funds also had a negative association with interest coverage ratio and the non performing to net advance was negatively correlated with interest coverage ratio.

J R Raiyani2009 During the periods of high inflation depending on conventional accounting wisdom. May results in firms financial information losing its meaning and creation of unrealistic expectation among information users. Dr.KavithaChavvali 2009 Inventory analysis of gold exchange trade funds. Mathew T.Jones and Maurice ousted (2007) revised and evaluated pre-world war ii current date for countries by treating gold follows on a continuous basis. The historical data of saving and investment was taken over a time period of 1850- 1945. N.Prasanna 2009 Stock performance Aitkin 1997 the external effect foreign direct investment on export with example of Bangladesh where entry of a koala multinational in garment exports led establishment of a member of domestic export firms creating the countrys largest export industry. Awedh2005 defend that inflator does not have really an effect on the profitability measured by return on equity of foreign banks exerting in Lebanon. In the same way, the author steers that the level of inflation affect more than the return on assets of Lebanese bank than foreign banks in Lebanon. Dr Harish kumarsingle,Theicfai journal of inventory management (vol vii Feb. 2008) J R Raiyani, The infancys university journal of inventory research (vol viii, No 2 Feb. 2009) Dr.R.B.Bhatasna, Indian journal of inventory (vol 5 No: 2 Feb 2011)

CHAPTER 4
4.1 RATIO ANALYSIS (INVENTORY)

4.1.1- Table shows level of Inventory

Qty in thousand tones
S.No Particulars Raw materials Lime stone (stacker 60 Per cent) 1 Iron ore (stacker 25 Per cent) Clay ash (stacker 15 Per cent) TOTAL(clinker) 2 3 Work in process Finished goods Total 832.70 5551.33 5386.48 6251.55 17189.36 1292.47 8616.44 8451.74 9316.59 26384.77 2098.05 13937.02 13822.02 14522.32 42331.36 2777.44 18516.26 18351.46 19216.54 56084.26 2816.40 18775.86 18611.09 19416.11 56803.06 3330.80 5169.86 8392.21 11109.76 11265.50 2006-07 2007-08 2008-09 2009-10 2010-11

1387.83

2154.11

3496.76

4629.10

4693.96

INFERENCE The inventory level was found to be increased trend from 2006-2007 to 2010-2011. The raw material was increasing from 2007 -2008 to 2010-2011

The inventory level was not increasing subsequently in 2010-2011

4.1.1- Chart shows level of inventory

INVENTORY LEVEL OF THE COMPANY(in thousand tons)

25000

20000

I N 15000 V E N T O 10000 R Y

5000

0 2006-07 Raw materials Work in process Finished goods 2007-08 2008-09 YEAR 2009-10 2010-11

INVENTORY TURNOVER RARIO

The inventory turnover ratio measures the number of times a company sells its

inventory during the year. Costofsales Averagestock

Inventoryturnoverratio =

Costofsales = sales Grossprofit Opening stock + Closing stock 2

Average stock =

4.1.2 Table shows inventory turnover ratio

Cost of goods sold S.No Year (`in lakhs) 2663028 2844494 3094850 4010580 4521886 Average stock (in tones) Inventory turnover ratio

1 2 3 4 5

2006-07 2007-08 2008-09 2009-10 2010-11

487428 503184 819401.5 945491.5 822538.5

5.46 per cent 5.65 per cent 3.78 per cent 4.24 per cent 5.50 per cent

INFERENCE The inventory turnover ratio was high in the year 2006-07 after that 2007-08 the inventory turnover ratio was decreased.

4.1.2- Chart shows inventory turnover ratio

6 5.652989761 I N V 5 E N T O R 4 Y 5.463428445 5.49747641

4.241793818 3.77696404

T U 3 R N O V E 2 R R A 1 T I O 0 2006-07 2007-08 2008-09 YEAR 2009-10 2010-11

INVENTORY CONVERSION PERIOD The inventory conversion period is the time required to obtain materials for a product, manufactured it, sell it. No. of days in the year Inventory turnover ratio

Inventory conversion period =

4.1.3- Table shows inventory conversion period

Inventory conversion period (in days) 66 64 96 86 65

S.No 1 2 3 4 5

Year 2006-07 2007-08 2008-09 2009-10 2010-11

No. of days 365 366 365 365 365

Inventory turnover ratio 5.46 per cent 5.65 per cent 3.78 per cent 4.24 per cent 5.50 per cent

INFERENCE The inventory conversion period is normally indicates the wealth of the company. The company wants to concentrates with its inventory conversion period.

4.1.3 - Chart shows inventory conversion period

120

100 C O N V E R S I O N P E R I O D

96 86

80 66 60

64

65

40

20

0 2006-07 2007-08 2008-09 YEAR 2009-10 2010-11

4.2 EOQ ANALYSIS

4.2.1 Table shows EOQ analysis for the year 2006-2007

Item

Annual requirement

EOQ

Total investment with EOQ

Total investment without EOQ

Saving inventory cost

Iron Ore Lime Stones Clay Ash Sulphur Gypsum Bauxite

31500 15000 14000 13000 13500 11500

36 40 42 34.5 35 36.5

1.5 1.25 2 1.75 1.25 1.5

65 144 144 153 144 150

1230 980 767 716 869 748

81794 142345 111982 110801 126223 113322

138615 145225 135915 133927 130688 116173

56821 2880 23933 23136 4465 2851

INFERENCE The companys annual requirement for the year 2006-07 is 101000 tons of raw materials. They using investment with EOQ spent ` 787168. When the same in without investingEOQis882551. So the company saved ` 169432 in the year 2006-07.

4.2.1 Chart shows EOQ analysis for the year 2006-2007

160000 138615 140000

145225 142345 135915 133927 130688 126223 116173 113322

120000 I N 100000 V E S 80000 T M E 60000 N T 40000

111982

110801

81794

20000

0 Iron Ore Lime Stones Clay Ash Sulphur RAW MATERIALS Gypsum Bauxite

Total investment with EOQ Total investment without EOQ

4.2.2 Table shows EOQ analysis for the year 2007-2008

Item

Annual requirement

EOQ

Total investment with EOQ

Total investment without EOQ

Saving inventory cost

Iron Ore

33500

35

1.5

75

1250

95626

169675

74049

Lime Stones Clay Ash Sulphur Gypsum Bauxite

13500 16500 14000 12500 11000

41 55 35 36 37

2 1.55 1.5 2 2.5

154 154 163 154 160

744 1100 808 671 571

116064 171050 132916 104676 92787

140115 171050 153304 153304 118752

24051 0 20388 20388 25965

INFERENCE

The companys annual requirement for the year 2007-08 is 103700 tons of raw materials. They using investment with EOQ spent ` 590000. When the same in without investing EOQ is
` 921215. So the company saved ` 195739 in the year 2007-08.

4.2.3 Chart shows EOQ analysis for the year 2007-2008

180000

169675

171050

171050 153304 153304

160000 140115 140000 116064

132916 118752 104676

120000 95626

100000

92787

80000

60000

40000

20000

0 Iron Ore Lime Stones Clay Ash Sulphur Gypsum Bauxite

Total investment with EOQ Total investment without EOQ

4.2.3 Table shows EOQ analysis for the year 2008-2009

Item

Annual requirement

EOQ

Total investment with EOQ

Total investment without EOQ

Saving inventory cost

Iron Ore Lime Stones

13500 13500

34 36

1.5 1.5

65 167

1260 805

83789 135642

153905 151515

7046 15873

Clay Ash Sulphur Gypsum Bauxite

15000 14000 15000 11200

38 37 35

1.75 1.75 2.5

165 164 165 170

807 769 648 684

134567 127462 108540 117476

166445 154384 166775 128191

13878 26922 58235 10715

36.5 1.75

INFERENCE The companys annual requirement for the year 2008-09 is 98500 tons of raw materials. They using investment with EOQ spent 68646. When the same in without investing EOQ is 800543. So the company saved 114076 in the year 2008-09.

4.2.3 Chart shows EOQ analysis for the year 2008-2009

180000 160000 140000 I N V E S T M E N T 120000 100000 83789 80000 60000 40000 20000 0 Iron Ore Lime Stones 153905 151515 135642

166445 154384 134567 127462

166775

128191 117476 108540

Clay Ash

Sulphur

Gypsum

Bauxite

RAW MATERIAL Total investment with EOQ Total investment without EOQ

4.2.4 Table shows EOQ analysis for the year 2009-2010

Item

Annual requirement

EOQ

Total investment with EOQ

Total investment without EOQ

Saving inventory cost

Iron Ore

34000

36

1.5

95

1271

123231

217605

94374

Lime Stones

12500

37

1.75 174

727

127770

146226

18456

Clay Ash

14000

40

1.5

175

864

152496

164575

12079

Sulphur Gypsum Bauxite

16000 18000 17000

38 36 37

1.75 174 2.75 175 1 180

834 686 1122

146575 121938 203082

187161 212190 205062

40586 90252 1980

INFERENCE The companys annual requirement for the year 2009-10 is 111500 tons of raw materials. They using investment with EOQ spent `875092. When the same in without investing EOQ is 1132819. So the company saved `2577276 in the year 2009-10.

4.2.4 Chart shows EOQ analysis for the year 2009-2010

250000 217605 200000 I N V E S T M E N T 164575 152496 187161 212190 203082 205062

146226 150000 123231 127770

146575 121938

100000

50000

0 Iron Ore Lime Stones Clay Ash RAW MATERIAL Sulphur Gypsum Bauxite

Total investment with EOQ Total investment without EOQ

4.2.5 Table shows EOQ analysis for the year 2010-2011

Item

Annual requirement

EOQ

Total investment with EOQ

Total investment without EOQ

Saving inventory cost

Iron Ore

38000

37

1.75 105

1268

135358

268736

133378

Lime Stones

13500

35

1.25 185

869

161852

167588

5736

Clay Ash

12000

38

195

551

109099

157770

48671

Sulphur

15000

40

3.25 185

608

114455

187225

72770

Gypsum

17000

40

1.25 194

1043

203646

221110

17464

Bauxite

18000

39

2.75 200

715

144965

242235

97270

INFERENCE The companys annual requirement for the year 2010-11 is 113500 tons of raw materials. They using investment with EOQ spent 869375. When the same in without investing EOQ is 1244664. So the company saved 375289 in the year 2010-11.

4.2.5 Chart shows EOQ analysis for the year 2010-2011

300000 268736 250000 221110 203646 I 200000 N V E S 150000 T M E N T 100000 187225 167588 161852 135358 109099 114455 157770 144965 242235

50000

0 Iron Ore Lime Stones Total investment with EOQ Total investment without EOQ Clay Ash Sulphur RAW MATERIAL Gypsum Bauxite

CHAPTER 5
5.1FINDINGS
In inventory level of the company shows the increase of the raw materials, work-inprocess and finished goods in the year 2006-2009 but not increasing marginally in the year of 2010-2011 In inventory turnover ratio the ratios of the year has been founded as low in the years of 2008-09 and 2009-10. After those periods the inventory turnover ratio has slightly increased in the year 2010-11. Even though that level is quite low when compare with 2007-08. In inventory conversion period is funded as good level. Even though they wants to keep the inventory conversion period as low. The company annual requirements of raw materials was increasing in 2006-2007, 20082009, 2009-2010, 2010-2011. Even though annual requirements is quiet low in 20072008. The inventory level is affected when unqualified employees in charge of inventory it creates impact on production, investment and profit. They have a problem in maintaining the accounts regarding inventory management and 10 percent Computer assessment of inventory items for sale is inaccurate.

5.2 SUGGESTION
Chettinad Cement Corporation Limited sells the 75percent of the cements produced, remaining 25 percent of cement used for own purpose and for sales to others they should allowed more days as credit to their agent. Chettinad Corporation should take steps to increase the level raw materials. To ensure availability of raw material thorough increase the investment with help of EOQ. Appointment of good employees to take in charge of inventory and ensure proper training to employees this helps to make the effective inventory. They should follow proper accounting system for inventory management and computer assessment of inventory item for sale.

5.3 CONCLUSION
Chettinad cement is one of the leading cement manufacturers in Tamilnadu. They produce high quality cement. The study covers the inventory management for effective inventory control. Which helps to control the excess investment on inventory? I have used a technique Economic Order Quantity Analysis named as EOQ Analysis for find out the rate with EOQ and without EOQ investment for purchasing of good in the manufacturing the cement in Chettinad Cement Corporation Limited.

BIBLIOGRAPHY BOOKS
Khan MY Jain P.K Management Accounting : Text, problems and cases 4th Edition Tata McGraw Hill 2007 Pandikumar Management Accounting Excel Books 2007 Ramachandran N Kakani Kumar Ram Financial Acccounting For Management Tata McGraw Hill 2006

S.N Maheswari S.K Maheswari Accounting for Management Vikas

Publishing 2006

WEBSITES www.chettinad.com www.reportjunction.com

ANNEXTURE
PROFIT AND LOSS A/C OF CHETTINAD CORPORATION LTD Particulars INCOME : Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income EXPENDITURE : Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalized Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit Adjst. below Net Profit P & L Balance brought forward Statutory Appropriations Appropriations P & L Balance carried down Dividend Preference Dividend Equity Dividend % Earnings Per Share-Unit Earnings Per Mar-11 Mar-10 Mar-09

(Rs. in Crores)

Mar-08 Mar-07 Mar-06 840.47 115.17 725.30 50.40 -3.02 772.68 110.26 183.28 28.74 77.27 130.31 2.56 0.00 532.42 240.26 18.18 222.08 53.17 168.91 58.32 NA -4.39 114.71 0.00 114.71 0.00 73.97 0.00 39.89 148.79 22.13 0.00 75.00 37.61 37.61 584.17 98.68 485.49 45.03 12.54 543.06 83.79 168.90 19.16 46.97 102.17 2.41 0.00 423.40 119.66 19.42 100.24 36.09 64.15 0.98 NA 22.71 40.06 0.02 40.04 0.00 57.23 0.00 23.32 73.97 14.75 0.00 50.00 12.88 12.88

1,720.31 1,522.68 1,321.48 1,107.20 220.70 166.38 183.81 177.02 1,499.61 1,356.30 1,137.67 930.18 101.53 13.94 6.14 5.80 -6.00 -9.94 25.09 14.94 1,595.14 1,360.30 1,168.90 950.92 209.71 426.82 80.00 100.54 248.09 7.47 0.00 1,072.63 522.51 64.57 457.94 362.87 95.07 19.50 0.00 0.40 75.17 43.03 32.14 0.00 314.24 0.00 30.77 358.64 19.10 0.00 50.00 18.85 18.85 172.17 310.57 64.54 80.45 209.12 10.24 0.00 847.09 513.21 77.91 435.30 308.08 127.22 30.80 0.00 -0.21 96.63 0.00 96.63 11.91 205.70 0.00 0.00 314.24 0.00 0.00 0.00 32.76 32.76 158.90 243.37 37.70 85.58 167.89 3.34 0.00 696.78 472.12 52.26 419.86 429.00 -9.14 51.25 0.60 -56.78 -4.21 0.00 -4.21 1.39 253.04 0.00 44.52 205.70 29.50 0.00 100.00 0.00 0.00 157.66 181.71 41.32 71.53 147.04 3.70 0.00 602.96 347.96 19.62 328.34 81.50 246.84 92.62 0.50 -10.05 163.77 0.00 163.77 0.00 148.79 0.00 59.52 253.04 29.50 0.00 100.00 53.81 53.81

Share(Adj)-Unit Curr Book Value-Unit Curr (Rs in crores)

242.33

289.84

120.39

133.05

89.23

59.13

BALANCE SHEET OF CHETTINAD CORPORATION LTD, KARUR

Particulars SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block Less : Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

Mar-11

Mar-10

Mar-09 Mar-08 Mar-07 Mar-06 29.50 362.99 392.49 37.61 398.58 436.19 828.68 913.20 420.77 0.00 492.43 0.00 353.65 0.58 29.50 233.74 263.24 9.03 222.33 231.36 494.60 824.24 339.27 NA NA 0.00 38.47 0.58 29.50 144.92 174.42 24.04 280.87 304.91 479.33 765.58 286.10 NA NA 0.00 2.80 3.61

38.20 38.20 29.50 887.51 825.52 325.65 925.71 863.72 355.15 406.28 343.89 282.00 489.78 414.98 715.03 896.06 758.87 997.03 1,821.77 1,622.59 1,352.18 2,836.59 2,315.69 1,660.39 1,462.81 1,167.89 850.98 0.00 0.00 1,373.78 1,147.80 0.00 0.00 233.54 95.46 0.58 0.58 0.00 809.41 0.00 313.16 0.58

231.62 106.57 20.73 341.67 700.59

224.09 72.51 73.07 381.76 751.43

214.61 38.70 42.99 329.84 626.14

166.17 14.87 25.85 197.80 404.69

78.27 16.99 28.25 94.38 217.89

100.17 17.44 21.49 40.76 179.86

214.19 264.82 479.01 221.58 0.00

143.24 222.13 365.37 386.06 0.00

146.20 243.39 389.59 236.55 0.00

156.40 201.97 358.37 46.32 0.00 0.73 65.03 -64.30 828.68 16.13

74.57 98.39 172.96 44.93 0.00 1.40 75.75 -74.35 494.60 32.60

77.59 30.09 107.68 72.18 0.00 2.99 81.73 -78.74 479.33 11.06

2.05 1.41 0.84 9.76 8.72 8.36 -7.71 -7.31 -7.52 1,821.77 1,622.59 1,352.18 43.38 12.95 29.68