Material management of TATA Steel wire division

Material Management

CHAPTER - 01

INTRODUCTION

Materials Management Meaning:

Material management involves Planning Programming, Organizing directing,

controlling and coordination the various activities concerning the material.

Materials management is the branch of logistics that deals with the tangible

components of a supply chain. Specifically, this covers the acquisition of spare parts and

replacements, quality control of purchasing and ordering such parts, and the standards

involved in ordering, shipping, and warehousing the said parts.

Material Management is concerned with control of materials in such a manner

which ensures maximum return on working control material management is concerned

with the location & purchase of needed their storage & movement. It also arranges to

keep on account for them .it is also responsible for planning their movement through

manufacturing processes, store rooms and distribution channels.

Planning and control of the functions supporting the complete cycle (flow) of

materials, and the associated flow of information. These functions include (1)

Identification, (2) Cataloguing, (3) Standardization, (4) Need determination, (5)

Scheduling, (6) Procurement, (7) Inspection, (8) Quality control, (9) Packaging, (10)

Storage,(11) Inventory control, (12) Distribution, and (13) Disposal also called materials

planning.

Definition:

According to Bailey and Farmer defines the term materials management as

"Management of the flow' of material into on organization to the point when those

materials one converted into the firm's end product are finished product,” Material

management is "an organizational concept in which a single manager has authority and

responsibility for all activities, principally concerned with the flow of material into an

organization, It includes purchasing production planning and scheduling, incoming traffic

inventory control, receiving and store”.

Dept. Of M.Com Reva University Page 1

Material Management

Areas of Concentration

Goals:-

The goal of materials management is to consolidate and efficiently handle core

services. It creates truck deliveries and service vehicle routes that reduce conflicts for

vehicles and pedestrians Delivery sites and loading docks are more effective and reduce

redundancy. Cost is reduced when it comes to solid and hazardous waste removal,

storage and recycling. Utility infrastructure and service equipment relocation can

improve aesthetics.

Quality Assurance:- A large component of materials management is ensuring that

parts and materials used in the supply chain meet minimum requirements by performing

Quality assurance (QA).While most of the writing and discussion about materials

management is on acquisition and standards much of the day to day work conducted in

materials management deals with QA issues.

Parts and material are tested, both before purchase orders are placed and during use, to

ensure there are no short or long terms issues that would disrupt the supply chain. This

aspect of material management is most important in heavily automated industries, since

failure rates due to faulty parts can slow or even stop production lines, throwing off times

tables for production goals.

A. Importance of Material Management:

The importance of materials in organizational performance has been ever

increasing materials one any commodities used directly or indirectly in producing a

product or service. Such as raw materials component parts assemblies and supplies.

In the manufacturing organization, the important inputs one referred to as 5Ms i.e.

Men (Labour), Machines, Money, Materials and Methods. The relative importance

among these five Ms have shifted from time to time Materials alone account for about

60% to 70% of the units cost of the many of the products. Materials management is an

integral part of production management.


Material Management

B. Reasons for significance of Material Management in an

Organization:

The amount of money spent on materials is higher than other inputs put together

(i.e., Machinery, labour, energy etc.)

Materials offer considerable scope for reducing costs and improving profits.

Since materials is treated as a major part of current Assets.

Materials add value to the product.

Quality of finished product depends on the quality of materials uses to produce

them.

Material management encompasses areas such as purchasing, storing, Inventory

control, materials handling, transportation, and shipping etc.

Thane is need for procurement and preservation of scarce materials for future use.

There is increasing demand for ensuring safety of environment by using

biodegradable and less toxic materials which do not cause any Health hazard.

The efficiency of a firm depends upon the availability of right Materials.

Materials one life blood of development of humanity.

C. Functions of Material Management:

Materials handling.

Materials planning and programming.

Raw material purchasing

Receiving, store keeping and ware housing.

Issue of material


Material Management

Inventory control.

Value engineering and value analysis.

Transportation of materials and handling of materials.

Material accounting

Vendor development, vendor evaluation and vendor rating.

Disposal of scrap and surplus.

Traffic management

Logistics management

Supply chain management

D. Objectives of Material Management:

The objectives can grouped as,

1. Primary objectives

2. Secondary objectives

1. Primary Objective of materials management:-

Primary objectives that contributes to the achievement of overall company objectives.

These are concerned with achieving.

1. Buying best items at lowest prices

2. High inventory turnover maintaining the flow and products

3. Low cost, acquisition and possession & elimination of material wastage

4. Continuity of supply


Material Management

5. Consistency of quality

6. Low payroll cost and increasing profit margin of firm

7. Cordial relations with suppliers

8. Development of personal and enhance the competitiveness of firms

9. Maintenance of good record

2. Secondary objectives of Materials management:

Secondary objectives that contributes to the achievement over all company objectives

but indirectly.

1. Reciprocity

2. New materials and products.

3. Economic make or buy decision

4. Promotion of standardization

5. Product improvement

E. Advantages or Benefits of Material Management:

Material cost can be lowered.

Controlling of the indirect cost.

Risk of inventory loss minimizing.

Better utilization of equipment.

Reduction in loss of time of direct labour.


Material Management

Cost of material used in different departments ascertained.

Control of manufacturing cycle.

Materials congestion in storage places avoided

Improvement in delivery of the product.

F. Material Management Concept:

Production Planning &

Control

Material Control Material handling Inventory control

Supplier A Customer X

Supplier B Customer Y

WIP= Work in Progress

Material management in an industry can be stated in general terms as management,

flow of materials in a production or manufacturing unit. The material management

functions included among other controlling or regulating the flow of material in relation

to changes in variable like demand, price availability, delivery schedules etc. In actual

practice this boils down to how much when from whom and how to order and to store.

G. Materials Flow in a Manufacturing Company:


WIP

Finished Product

Raw Material

WIP

Material Management

Vendors receive the orders from purchasing department, which in turn Supplies materials

to the concern. The receiving department of the concern checks the quality quantity of the

materials in laboratory by the quality control officers. The next step is to weight the

loaded vehicle through weighted machine after Unload the raw materials. In each bag

take sample of material. This will tested by the laboratory (in quality assurance

department). There is anything problem arises, the material stored in the store room and if

any problem rejection is made to Suppliers. The suppliers should returns the actual

needed goods within 15 days from date of the materials received. The material moves

sequentially from machine To machine and there may be in process storage in between.

The finished product finally goes to finished part stores. Where it will be stored from

there it will be moved to a shipping department, ultimately, the product goes to the

customers.

H. Activities that relate to the flow of the materials:

Purchasing

Receiving

Inventory control

Production control

Ware housing

Inbound traffic

Outbound traffic

In plant storage

Material handling

Distribution

I. Organization chart for the material management functional unit:


Material Management

Chief material manager is the function head. The chief material manager Reports to the

head of the commercial group.

The four main departments of material management are:-

1. Material planning

2. Stores

3. Purchase

4. Inventory control

J. Organization chart for Materials Management:

Other Chief Managers

Manager Manager Inventory Mgr.

1 2 3 4 5 6 7 8 9 10

1. Plant and machinery

2. Project material/ Sub contracting

3. Market survey/ Vendor development

4. Budget sales

5. Transit

6. Commercial


General Manager

Chief Manager

Manager

Material Management

7. Salvage

8. Project store

9. Inventory analysis

10. Stock control

K. Challenges of material management:

Share capital for investing in material management.

a) Difficulty in forecasting demand accurately

b) Increasing cost of land and storage space.

c) Selection of appropriate vendors.

d) Optimizing purchasing quality of materials.

e) Diversification of product lines.

f) Optimizing time and quality of demand for products.

g) Managing information.

L. Scope of Material Management:

Thomas F. Wallace and John R. Dougherty defines Material management as "The

grouping of management functions supporting the complete cycle of Material flow, from

the purchase and internal control of production material to the planning and control of

work in process to the ware housing shipping and distribution of finished product".


Material Management

M. The Sequence in A Material Management Function is as Under:

Finished Goods

Materials Handling

Meaning:

Material handling is an important activity not only stores, but also in production. It

includes all movement of materials in manufacturing situation.

Definition:

Material handling is defined as, "Handling of material it is system or combination

of methods, facilities, labour and equipment for moving, packing and storing the

materials to meet specific objectives".

According to Raymond of Klwice:-

Material handling division of American society of mechanical engineers has

approved the following definition, "Materials handling is the art and science involving,

packing and storing of substance in any from”.

1. Importance of Materials Handling:


Purchasing Receiving Inspect Raw Material Stores Issue

Material Planning

Production Department

Finished Component Stores ShippingDistribution

Customer

Material Management

Efficient materials handling is important in industry .It is as important as efficient

transportation in the location of manufacturing facilities. Materials are to be loaded,

unloaded at various points, moved through inspection and production operation to storage

areas and finally to the shipping department. These movements do not add value to the

product but they do add to the cost. Some manufacturing spend between 20 to 30 % of

their factory on materials cannot be Avoided as it is one of the major functions in

materials management.

2. Objectives of Materials Handling:

Capacity Increases

Customer services improvement

Working conditions improvement

Higher productivity

Better space utilization

Reduce congestion that impedes the movement of materials.

Reduce e hazards to personnel.

Reduce workers fatigue

Increase efficiency of shipping and receiving.

Improve personnel comfort.

Decrease damages in handling and shipping.

3. Principle of Materials Handling:


Material Management

Planning Mechanization Control/Principle

Systems Automation Principle Capacity Principle

Materials flow Equipment Principle Performance Principle

Simplification Flexibility Principle

Gravity Dead Weight Principle

Space utilization Motion Principle

Safety Principle Idle time Principle

Obsolescence Principle

4. Relevance of Materials handling to Material Management

Function:

Packing carried out at suppliers premises.

Loading transportation by suppliers.

Unloading at buyer's premises.

Inspections of incoming materials.

Warehousing and Binnig in stores.


Related to planning Related to Equipment Related to operation

Principles of materials

handling

Material Management

Issue of material to manufacturing.

IN- Process handling at various steps of production.

Handling materials at various stages of inspection.

Packing finished goods.

Warehousing the finished goods.

Loading on transport carries.

5. Problems in Materials Handling:

Frequent stoppage of production.

Waste of labour skills.

Damage causes to materials by negligence or use of improper handling box and

equipment's.

Accumulation of materials.

Congestion of floor space near machine and work centers and near the gang Ways

or aisles.

Congestion of space at receiving store

Materials are kept waiting for a long period.

Material Planning

Meaning:


Material Management

Material planning is the scientific way of determining the requirements of raw

materials, components, spans and other items that go into meeting the production need

with in economic investment policies.

Material planning is a subset of the overall production planning and control system

which has broad prospective. A material budgeting is an estimate of expenses to be

incurred in the procurement. Of materials and it helps effective execution and control of

material plans.

1. Significance of Material planning:

Lack of proper materials planning and co-ordination leads to over ordering or

under ordering of materials.

Poor planning for materials may leads to unwarranted emergency.

Material planning activity raises the level of the buyer from a mere order placer to

a purchase executive.

Material planning is aims at motivating people and saves as on effective control

device.

Efficiency material management function cannot be visualized without a sensible

or efficient materials planning function.

2. Benefits of Materials planning:

Material planning both and quantity and value in terms of rupees each item and

overall.

Material planning helps to get things done efficiently by better forecasting of

future material needs.

A well designed material planning system precedes steps for effectively materials

budgeting follow up of suppliers.

Purchase planning is based on material planning.


Material Management

3. Factors influencing Material planning:

The various factors influencing the material planning process are classified as,

Macro factors which affect material planning are price trends business cycle,

import policy of the government, credit policy.

Micro factors affecting material planning include corporate objectives working

capital, seasonality, delegation of powers and communication system used by the firms.

4. Guidelines to be used for effective and reliable material planning:

The planning horizon should cover the longest lead rimes anticipated.

If the demand fluctuated or shows a seasonal variation, their effect on

the planning must be taken care of.

For short planning horizons, if more planning periods are considered with in the

year, materials plans will be more reliable. However, quarterly plans are more popular

than monthly or weekly plans.

Computerization of material planning process is advisable because computer are

helpful to handle changes caused by fluctuation in demand and work out new or revised

materials plans.

Computerization of material planning results in saving in time and effort apart

from obtaining accurate functions.

Materials Budgeting:

Meaning:

Once the material requirements have been established and worked out, the Material

budget is prepared taking into account inventory on order and inventory in transit also

known as pipeline inventory.


Material Management

A. The process of preparing material Budgets:

Material Control

Meaning:-

Material control is the regulator of the function of organization relations to the

procurements storages and usage of material in such a way as to maintain on even flow of

production without excessive investment in material stock.

Definition:

The American production and inventory control society defines Material Control

as "The function of maintaining constantly available supply of raw materials Purchased

parts and supplies that are required for the manufacture of the product”.

Stores and Inventory control:

This involves physical control preservation of stores minimization of Obsolescence

and damage through timely disposal and efficient handling. For Physical verification of

stocks and reconciling them with book figure.

A. Material control in Tata Steel limited:

The material control in Tata Steel limited was in 3 stages, they are as follows under:

I. Purchase Material


Required Material Inventory Material on hand

Amount of material to be purchased

Inventory norms Target

Forecast of Prices and Rates

Purchase Budget or Material Budget

Actual Purchase

Variance Report for Control

Material Management

II. Receipt Material

III. Issues Material

B. Objectives of Material Control

1. Ensure Continuity in Supply

2. Purchase Requisite Qty Of Material

3. Eliminate Wastage in Losses

4. Avoid Over Stacking

5. Avoid Under stocking

6. Purchase In Reasonable Price

7. Information about source of supply

C. Techniques of Material Control

1. ABC Analysis [Always Better Control]:

A --------- High Value, Low Qty,

B -------- Medium Value, Medium Qty

C -------- Low Value, High Qty

2. EOQ: - Economic Order Quantity

EOQ: Total Cost= Actual cost + Carrying costing + Order costing

(The Total cost of materials consists of Actual Acquisition cost + carrying cost +Ordering

Cost.)

Carrying cost: It is the cost of holding the Materials in the stores

Ex:-


Material Management

Cost of Storage Space

Cost of Bins Racks

Cost of the Marinating the materials to Maintain the Qty

Amount of interest payable on the money lacked up on the materials

Cost of spoilage in stores and handling

Cost of Obseleance same of the materials

Insurance cost

Clerical Cost

Ordering cost:-It is the cost of placing order for the purchase of Materials.

D. Essentials of Materials Control

There should be proper scheduling of materials.

A good method of classification and codification of material should be followed.

There should be proper inspection of materials when they are received by the

receiving department.

Standard forms for requisitions, order, and issue, transfer of material from one job

to the other and transfer of material from the job to the stores should be used.

The storage of materials should be well- planned to avoid losses from theft,

Carelessness, damage , deterioration , evaporation and pilferage,

A system of internal check should be introduced to ensure .that all transactions

involving materials are checked by properly authorized and independent persons.

Ordering quantity for each type of material should also be fixed to reduce the

ordering costs and. carrying costs of materials.


Material Management

Adequate records to control materials during production should be maintained to

ensure that there is minimum possible wastage.

E. Advantages of Material Control

The advantages of material control are as under:

To effect purchases of materials of the right quantity consistent with standards

prescribed in respect of the finished product.

To process materials with acceptable commercial terms with a view to effecting

maximum economy in the cost of buying;

To make available on assured supply of materials, so as to keep the cycles of

production going without any interruption.

To ensure effective utilization of materials.

To prevent overstocking of materials and the consequent locking of working

Capital.

CHAPTER - 02

COMPANY PROFILE

Conceptual Frame Work of Tata Steel Ltd-Wire Division


Material Management

INTRODUCTION AND HISTORY OF TATA STEEL LIMITED

TATA STEEL LIMITED is the leader producer and exporter of high quality steel

wires. It is a B.I.S. & I.S.O. – 9002 certified company. Asia's first and India's largest

integrated private sector steel company, Tata Steel in the new millennium aims to become

a supplier of choice by delighting its customers with services and products. The quest for

excellence at Tata Steel is not just a process, but also a way of life. The determination to

move up the value chain in processes, products and performance has resulted in Tata steel

being acknowledged for its excellence. The numerous awards conferred on Tata Steel

stand testimony to this.

The company was incorporated in the year 1958 as a private limited company for the

manufacture of wires and got into the business of making umbrella & rib wires. The plant

was set up at Borivali, Mumbai. The company went to public in 1961 and subsequently

took up manufacturing of many other wires, which were being imported at that time. The

company set up another wire plant at Tarapur in Maharashtra for production of Motor

Tyre Bead wire in 1976.

Company has five plants (T.W.P. - 1, T.W.P. - 2, S.S.P, W.R.M & DWP) at Tarapur,

Maharashtra and other plants at Navasari, Sisodra & Banglore, and Gujarat. Company’s

corporate office is located at Borivali, Mumbai. In addition, there are regional sales

offices at Delhi, Chennai & Calcutta and sales offices at Ludhiana, Faridabad, Hyderabad

and Bangalore.

Tata steel was established in 1907, as Asia's first and India’s largest integrated private

sector steel company. With its captive iron ore and coal mines and one of the world's

most modern steel making and finishing facilities at Jamshedpur in eastern India, which

includes a state of the art cold rolling mill complex. Tata steel limited is among the

lowest cost producer of steel in the world.


Pioneers of TATA Group

Material Management

The 4 million tonne Jamshedpur plant, which produces both flat and long product, is

undergoing a million tonne capacity expansion to be completed by September 2005. The

company intends to raise its capacity to l5 million tonnes per annum by 2012 organic

growth and acquisition.

The Jamshedpur capacity will produce 74 million tonnes and the balance capacity will be

put up or acquired elsewhere in India and overseas.

Tata steel recently announced its first major overseas investments in NAT STEEL,

Singapore and CORUS in UK, which will give it a manufacturing foot print in six

countries in the Asia pacific region, Europe.

Tata steel is also exploring opportunities in the Ferro-chrome and Titanion business in the

South Africa and the southern Indian state of Tamilnadu and other India's respectively.

Tata steel's relentless guest for excellence through initiatives like ASPIRE, which

combines TPM, Six sigma, Total operational performance, suggestion management and

quality circles, has reaped rich benefits.

The company has been conferred the Prime Minister Trophy for the best integrated steel

plant five times from the Indian Ministry of steel. It was the first Tata Company to win

the JRD quality value award, categorizing its operation as "World class" under the Tata

business Excellence model. It has been ranked among the top four world class steel

company lies by world steel dynamics, USA, for the past 4 years.

It also awarded Asia's most admired knowledge enterprise award -2003 by Teleos, an

independent knowledge management company of South Korea.

LOCATION:

The main head office was at Mumbai, that is:

The register address was as follows:

Bombay house, 24 Homi mody Street

Fort Mumbai - 400001,

Maharashtra, India


Material Management

The Tata Steel limited [wire division] is situated in

Plot no 28/C KIADB Industrial area,

Doddaballapura, 561203

Bangalore rural district.

The premises have got natural control with effluent treatment and disposal of effluents

conforming to the standards specified by pollution board.

ORGANIZATIONAL STRUCTURE OF THE TATA STEEL

LIMTTED [WIRE DIVISION]:

The organization gives the brief description of various types of management. It starts

from executive in charge he control all over the management. After that the work is

divided between head like project management! Supply chain etc. then chief under him

the work is business development operation & maintenance etc. under president Tisco

mazdoor union, secretaries under TISCO mazdoor union. Like this way the management

is divided into top level.


HEAD OF EPA BUSINESS

Sr. Mgr. Operations- Mr Sanjeev Kumar Singh

Manager Maintenance

Sriniwas K Shenoy

General Manager

PIPL-Anil Kumar

Manager Operations

Rajan Ranganathan

Material Management

4.3 OBJECTIVES OF THE TATA STETL LIMITED- WIRE

DIVISION

The objectives of the Tata Steel limited are as follows:-

Monthly production -1038 MT.

First compliance -88%.

Gross yield -97.15%.

Cost (plant cost) - 11,265RS/ton.

OEE of MTB LINE -75 %

MAT Saving -1480 Lakh


Manager Production

Krishnadvypayana H.N

Purchase & Store

Prakash Kharvi G

Dispatch Officer

Anil Kumar

Maintenance Officer

Venugopal Iyer, Arun Raj

Manager HR/Admin

Rajendra N

Accts Officer

Raju N

Fitters/Electricians/Helpers

Assistant Officer/Staff Assistant Officer/StaffShift Officer

Operators/Fitters/Electricians

Chemist (QA)

Shiv Kumar C H

Assistant Officer/Staff

Assistant Officer/Staff

Material Management

LTIF -0

Severity index -2.50

Grade FY11ABP

FY12

Apr-

14

May-

14

Jun-

14

Jul -

14

Aug-

14

Sep-

14

Oct-

14

Nov-

14

Dec-

14

Jan-

15

Feb-

15

Mar-

15Total

MTB 544 665 544 508 572 562 491 516 371 537 573 553 557 503 6287

HB 153 175 196 210 192 278 180 159 235 153 146 181 163 145 2239

HCD 21.5 30 0 31 28 15 16 17 30 32 34 33 49 37 321

RSW 89 59 103 120 102 115 192 138 158 144 139 167 93 0 1470

CRIMP 55 109 101 38 63 34 57 49 47 32 32 38 31 18 540

Total 863 1038 944 907 957 1004 936 878 842 898 924 972 893 703 10857

Process flow- Operations

GENERAL INFORMATION ABOUT TATA STEEL LIMITED [WIRE

DIVISI0N]:

NAME OF THE COMPANY TATA STEEL LIMITED


PRODUCTION

Material Management

[WIRE DIVISION]

LOCATION OR ADDRESS PLOT NO.28/C, KIADB

INDUSTRTAL ESTATE,

DODDABALLAPUR,

BANGALORE RURAL DITRICT

COMPANY OWNERSHIP LIMITED COMPANY

YEAR OF ESTABLISHED 2005

PRODUCTS MANUFATURED

AND PRODUCTION

CAPACITY

MTB Wire -665 MT/ Per Month

SRING STEEL -168 MT/Per Month

HC SPOKE -30 MT/Per Month

HB -175 MT/Per Month

NO. OF EMPLOYEES 150

COMPANY CERTIFICATION ISO-TS 9001:2000

OPERATIONS DURING YEAR

A. WORKING DAYS PER YEAR

B. WORKTING PER WEEK

C. NUMBER OF WORKING SHIFTS

353 DAYS

7 DAYS

THREE SHIFTS ( Round the Clock )

KSPCB APPROVALS CONSENT FOR EXPANSION

UNDER AIR ACT


Material Management

CORE VALUES OF TATA STEEL LIMITED [WIRE DIVISION]

ENERGY POLICY OF TATA STEEL LIMITED [WIRE DIVISION]

Tata steel real firms its commitment to be a part of a national mission for mitigating

climate change issues by efficient use of energy and shall endeavors to Comply with

national and international regulations

Adopt the best available technology to enhance energy efficiency

Implement world class operating practices so as to conserve energy and natural

resources

Conduct regular energy audit for continued improvement.

Promote energy conservation through mass awareness.

QUALITY POLICY

The Quality Policy of the Tata Steel limited [wire division] was:

“Consistent with the group purpose Tata Steel constantly strives to improve the

quality of life of the communities it serves through excellence in all facets of its

activities.


Trusteeship

Integrity

Respect the IndivigualCredibility

Excellence

Core Values

Material Management

We are committed to create value for all our customers and key stakeholders by

continually standardizing, improving and innovating our offerings, systems and process

involving all our employees.

This policy shall form the basis of establishing and reviewing the business

objectives and strategies and shall be communicated across the organization. The policy

will be reviewed to align with business direction and to comply with all the requirements

of TQM Principles.”

SAFETY PRINCIPLES & OCCUPATIONAL HEALTH POLICY

The safety principle of Tata Steel limited [wire division] was:

Tata Steel’s safety and occupational health responsibilities are driven by our commitment

to ensure zero harm to people we work with and society at large and are integral to the

way we do business.

Safety Principles

Safety is a line management responsibility.

All injuries can be prevented.

Felt concern and care for the employee on “24 Hours Safety” shall be

demonstrated by leaders.

Employees shall be trained to work safety.

Working safety shall be condition of employment.

Every job shall be assessed for the risk involved and shall be carried out as per

authorized procedures/checklist/necessary work permit and using necessary personal

protective equipment.

We are committed to continual improvement in our S & OH performance.

We shall set obejective-targets,develop,implement and maintain management

standards and systems,and go beyond compliance of the relevant industry standards,legal

and other Requirements.


Material Management

ENVIRONMENTAL POLICY TATA STEEL LTD [WIRE DIVISION]

The Environmental Policy of Tata Steel limited [wire division] was:

Tata Steel’s environmental responsibilities are driven by our commitment to preserve the

environment and are integral to the way we do business.

1. We are committed to deal proactively with climate change issue by efficient use

of natural resources & energy; reducing and preventing pollution: promoting waste

avoidance and recycling measures: and product stewardship.

We shall identify, assess and manage our environment impact

We shall regularly monitor, review and report publicly our environment

performance.

We shall develop & rehabilitate abandoned sites through afforestation and

landscaping and shall protect and preserve the biodiversity in the areas of our operations.

We shall enhance awareness, skill and competence of our employees and

contractors so as to enable them to demonstrate their involvement, responsibility and

accountability for sound environment performance

2. We are committed to continual improvement in our environmental performance.

We shall set objective-targets, develop, implement and maintain management

standards and systems, and go beyond compliance of the relevant industry standards,

legal and other requirements

We will truly succeed when we sustain our environmental achievement and are

valued by the communities in which we work.

MISSION AND VISION OF TATA STEEL LIMITED [WIRE DIVISION]

The mission and vision of Tata Steel limited was as follows:-

We aspire to be the global steel industry benchmark for value creation and

corporate citizenship.


Material Management

We make the difference through:

OUR PEOPLE, by fostering team work, nurturing talent, enhancing leadership

capability and acting with pace, pride and passion

OUR OFFER by becomes the supplier of choice delivering premium products and

services and creative value with our customer.

OUR INNOVATIVE APPROACH, by developing leading edge solutions in

technology, process and products.

OUR CONDUCT, by providing a safe working, place respecting the environment,

caring for our communities and demonstrating high ethical standards.

ASPIRATION STATEMENT OF TATA STEEL LIMITED : [WIRE DIVISION] :

The Aspiration statement of Tata Steel limited [wire division] was:

Sustain Leadership position

in Steel Wires in India

GOAL OF'TATA STEEL [WIRE DIVISIONI LIMITED:

The main goal of Tata steel limited was:-

Value Creation: consistently achieve ROIC of 22%

Safety: Reduce LTIF to 0.1

Environment: Reduce CO2 emissions to 380 kg/ ton of finished wire

Employer of choice: Across all industries – top quartile

CORE COMPETANCY OF TATA STEEL LIMITED [WIRE DIVISION] :

The core competency of Tata Steel Limited was:-

Ability to Enhance


Material Management

Trusted Customer Relationship

5 Cs of BRAND PROMISE OF THE TATA STEEL LTD [WIRE DIVISION]

The 5 Cs Brand Promise of the Tata Steel Limited was:-

SWOT ANALYSIS OF THE TATA STEEL LIMITED [ WIRE DIVISION ]

The term SWOT stands for Strength, weakness, opportunity, and Threats". The SWOT

analysis of Tata Steel limited [wire division] was as follows:

STRENGTH:

Raw material

IT in integration


Material Management

HR focus

Market dominance

WEAKNESS:

Slow pace of decision with respect to investment

OPPORTUNITY:

New products like tyrecord.

Low per capital consumption steel in India as compare other developed nations.

THREAT:

Small unorganized players.

D.W.P: AN OVERVIEW

TYPES OF WIRES APPLICATIONS CUSTOMERS


Material Management

M.T.B.

(Motor Tyre Bead wire)

MRF

CEAT

APPOLO TYRES

JK TYRES

TVS

GOOD YEAR

The company has a comprehensive range of products and it covers almost all

types of steel wires in the size range of 0.20mm to 27.00mm in diameter.

The Total production per year for D.W.P. was 10857 MT for the year 2013 –

2014.

PRODUCT PROFILE:

The products produced by the Tata Steel Limited [Wire division] are:

Motor Tire Bead Wire/ MTB wire

Spring Steel/SS Wire

HB wire/Hard and bright wire


Figure1.3: Motor Tyre Section

MOTOR TYRE BEAD (MTB) WIREUsed in motor tyres for providing necessary strength and grip onto the tyres rim

SPRING STEEL WIREUsed for manufacturing springs for various applications, especially shock absorbers in two-

wheelers

WIRES – PRODUCTS AND APPLICATIONS

Material Management

MOTOR TYRE BEAD WIRE:

Tyre bead wire is a copper/ bronze coated wire which is used for the reinforcement of

virtually all types of pneumatic tyres such as trucks, buses, cars, motorcycles etc. The

main function of the tyre bead wire is to act as reinforcement and it helps to get a proper

grip of the tyre on the rim. The type of tyre and structure of bead rings used, determine

the size of bead wire.

Properties of M.T.B:

1. Uniform winding.

2. Uniform surface finish.

3. Adhesion characteristic of wire to rubber.


Spring Steel Wire –Motor Cycle

Material Management

4. Close combination of high strength & ductility.

M.T.B. – MANUFACTURING PROCESS

Figure1.6: M.T.B. - Manufacturing Process


Material Management

Figure1.7: Manufacturing Process Flow Chart

One of the major product lines at Bangalore wire plant is Cupper coated high tensile steel

wire used in automobile tyres. Bead wire typically constitutes 5% of the tyre weight

(approx. 1.6kg in a car tyre & 5.6kg in a truck tyre). Tyre bead wires are used for the

manufacture of virtually all types of pneumatics tyres such as Trucks, Buses, Cars, Jeeps,

Motorcycles, Scooters, etc. The main function of tyre bead wire is to act as reinforcement

and help to get a proper grip of tyre on the rim.

The size of the wire varies depending on the application. Tata steel ltd. is in a position to

meet the entire size range of wire from 0.78mm to 1.16mm required by the tyre

industries.

The manufacture of tyre bead wire starts with the selection of wire rods free from piping

segregation and other defects for the wire drawing. Different types of packing are given

as per specific requirement of domestic and international markets.


Material Management

The approximately linear density that is weight per unit length of the wire is 5.5gm/m.

The breaking load necessary to the nature of the wire specimen is not less than 132kg.

The test is conducted on a tensile testing machine at a specified speed.

PRE – DRAWING

Figure1.8: Pre-Drawing M/C Pay Off

The requirement of finish wire size diameter of different customers is normally 0.965mm.

The raw material available with us after pickling is of size 5.5mm in diameter. But we

cannot draw wire directly from 5.5mm to 0.965mm because during drawing operation

high stresses are induced in the wire which leads to wire breakage. Hence the drawing is

performed in two stages with intermediate patenting process to relieve those stresses.

In Doddaballapura Wire Plant there are One m/c’s 701 in the pre – drawing section to

reduce the wire diameter from 5.5mm to an intermediate diameter of 3.1mm in 7 passes.

The reduction through the dies should not be more than 18 to 24%. The wire coils after

pickling are loaded onto the pay – off’s of 701 m/c’s from where they are carried onto the

drums.

There are six drums and six dies in a row while the final die is R.D.H. (Rotary Drum

Horizontal). The drum or block is generally used for cooling the wire as it gets heated up


Material Management

during the drawing operation. The drum is given internal cooling with the help of water

jet. At the base, the drum is provided with a special profile, which avoids over lapping of

wire during the operation. But sometimes due to grove formation overlapping still occurs.

Hence the drum is made such that the drum diameter gets reduced as we move upwards,

to avoid overlapping as the wires slip on the drum. The max speed of the drum in 701

m/c is 7.5 m/s.

PATENTING

Figure1.9: Patenting Furnace

The cages filled with wires from Pre - drawing m/c’s are loaded onto the pay – off’s with

the help of overhead cranes from where the wires start uncoiling & are first heated to a

temperature just above the critical temperature i.e. 1080C in the furnace and then

quenched in the lead bath maintained in the temperature range of 595 to 615C. The

furnace is divided into 4 zones & the lead bath into two zones. The lead is in the form of

liquid and can easily form its oxide i.e. Lead oxide (Pb2O3), which is red in colour, so to

avoid its formation the surface of lead is covered with coke.


Material Management

Now the wires are quenched in cold water to remove the residual lead. The wires are next

passed through Hydrochloric acid (HCL) with concentration 170 to 195gms/lit, which

will remove oxide layers and scales, if any present, without attaching to the material

surface. Then wires are washed with high pressurized water to remove any excessive acid

carried with the wires followed by passing them in hot water tank maintained at 75 to

85C.

Next wires are passed through the borax tank maintained at min 95C & concentration

175 to 205gms/lit which acts as a lubricant carrier. After borax coating the wires are

passed through the drying oven with temp of about 200 to 250C to get the wires free

from water particles. The finished wires are then taken to AOB take - up units where they

are filled in cages.

FINISH WIRE DRAWING

Figure 2.0: Finish Wire Drawing M/C

The cages loaded with the wires of diameters 2.5mm to 3.3mm from AOB take up - units

are transferred for further finish wire drawing operation to the 12wire drawing m/c’s

wherein the size of wires is reduced to the range of 1.14mm to 0.78mm in diameter

depending upon the requirement of the customers. The cast required is of 600mm

whereas rise & helix should be close to zero.

In D.W.P. there are four finish wires drawing m/c’s namely 711 to 714 consisting of ten

dies and ten drums or blocks. The blocks are divided into two parts the upper block and

the lower block. The lower deck rotates in anticlockwise direction winding the wire

which is coming from the die and subsequently transfers it to the upper deck. The decks


Material Management

should not be eccentric in motion. Soap powder used for lubrication helps in easy

drawing of the wires & is generally Na and Ca based. Wire must be fully submerged in

the soap powder & the powder should be mixed on a regular basis to avoid jamming. The

powder should also be free from contaminants for effective results.

The main difference between Pre - drawing and finish wire drawing is that the final

finished wire is collected in spools rather than in the cages. Weight of spools is Max

470kg for 711 to 714 m/c’s & 470kg.Winding (max) speed of m/c does vary from 18m/s

to 20m/s.

PLATING LINE

Figure 2.1: Copper Plating

In this process stress is relieved and cooper coating is provided on the wires according to

the requirement. The weight of copper coating on the wire is 0.45 to 0.55gms/kg of wire.

The whole line has got many intermediate vipers (air, rubber, bristle, cotton, etc.) &

pressurized rinsing tanks for cleaning purposes. The wires are first unwound and passed

to the molten lead bath for relieving internal stresses in the wire and to burn the lubricant

coating on the wire. The temperature of the lead bath is maintained in the range of 400 to

450C. After passing through the lead bath the wires are passed through the alkaline bath

to clean the wires from residual lead. Wires are then passed through HCl tank for better

cleaning.


Material Management

These wires are then passed through the Cooper Sulphate (CuSO4) tanks, which are

maintained at selected concentration as per the requirement of the coating on wires. The

wires are then cleaned in cold water followed by in hot water. The hot water is having

temperature of about 95C. Then the wires are dried in drying oven maintained at a

temperature of 180 to 200C to get the wires free from water particles. The dried wire is

then given a thin coating of Cumbers and Resin to protect its surface from corrosion.

REWINDING

Figure 2.2: Rewinding M/C

The main purpose of the rewinding section is to give the wires straight killing which is

the requirement of the customers. The rewinding process is done in the dehumidified area

only; so as to protect the material from dampness and also this area restricts formation of

copper oxide on the material. The take - up units of rewinding section can take 34 wires

at a time after which the loaded spools from it are taken to the rewinding m/c for straight

killing purpose. In these m/c’s the wire is passed through a set of horizontal and vertical

killing rollers to make the wires straight, as it is the requirement of the customers. After

killing process of the wires, they are passed for winding them on the collapsible spools

for further packing.

During the operation the tension of the wire is maintained constant with the help of the

dancer arm. The tension is in between 3kgs to 5kgs.The wire gets wound on the spool

with the help of pneumatic arrangement. If there is breakage of wire due to any reason,


Material Management

then with the help of brake both the spools are stopped automatically. The speed of the

rewinding m/c is 12m/sec.

PACKING, STORAGE & DISPATCH

Figure 2.3: Storage & Dispatch Section

Before passing any finished product for the customer; inspection is done by Quality

Control Department & only after this inspection step procedure of packing is started. The

weight of the spools with coil loaded on it is about 0.5MT. Then on the spool stamping

station the spool no, weight, etc. is labeled onto it. Then they are taken to the tilting

platform. Here the flange of the spool is removed with the help of pneumatic spanner to

save the time of packing.

A wooden pallet is placed on the conveyer with a corrugated sheet and plastic bags. The

coils are placed into the plastic bags by a lifter. The second coil is placed on the first coil

with a wax paper in between them to avoid rubbing. This wax paper is used for corrosion

resistance. Again the wax paper is placed on the upper coil and then it is packed with the

cello tape.

A small bag of silica gel is placed inside the coils to absorb the moisture. The CRCA

sheet is rounded around the coils and it is strapped at two points. A plywood top is placed


Material Management

on the coils and then it is strapped at three points. The wooden corners are fixed to the

pallets restricting any movement of the coils. Finally it is labelled with coil no, size,

weight and customers name. Then they are passed to dispatch section and then

transported.

INTRODUCTION:

Tata Steel Limited was formerly TISCO Limited and IRON and STEEL Company

Limited is a multinational steel company head quartered in Mumbai, Indian and

subsidiary of TATA Group. It is the 10th it is the largest steel producing .in the world,

with an annual crude steel capacity of 23.5 million tonnes, and the largest private-sector

steel company in India measured by domestic production.

Tata Steel is also India's second largest and second-most profitable, private sector

Company, with consolidated revenues of $46 billion and net profit of over $3.9 billion in

the year ended March 31, 2014. Tata Steel is the eighth most valuable Indian brand

according to an annual survey conducted by Brand Finance and the Economic Times in

2012. It is currently ranked 410th in the Fortune Global 500. It has also been listed as

"World's most ethical companies, by Forbes.

Tata Steel's largest plant is located in Jamshedpur, Jharkhand, with it is recent

acquisitions, and the company has become a multinational with operations in various

countries. The registered office of Tata Steel is in Mumbai.

The company was also recognized as the world's best steel producer by World Steel

Dynamics in 2005. The company is listed on Bombay Stock Exchange and National

Stock Exchange of India, and employs about 80,000 people.

In August 2007 Tata Steel won the bid to acquire the UK-based steel maker Corus in

what was, to date, the largest international acquisition by an Indian company. It made the

Tata Group the world's fifth largest steel maker, and catapulted them to the global league.

HISTORY OF TATA STEEL LIMITED:

TISCO was established by JAMSETJI TATA in year 1907.In year of 1939, it had largest

steel plant in the British Empire. A modernization and expansion program was launched


Material Management

in year 1951. Later, the program was upgraded to 2 MTPA project in 1990, it started

expansion plan and established it is subsidiary Tata Inc. in New York.

"The company changed its name TISCO to TATA STEEL in year 2005.”

Since its inception, 1958 as Special Steels, to the establishment of the Company as a

subsidiary of Tata Steel, to the formation of the journey of Tata Steel Wire Division has

been replete with innovations recognitions and break-through achievements.

Milestones achieved by the Company since incorporation is mentioned below;

1910 Tata Steel obtains its first colliery.

1912

i. First ingot rolls out.

ii. Bar mills commence operations.

iii. Introduction of 8 hour working day.

1938

Introduction of electric process for making steel which was employed for production of

high grade iron and steel casting.

1972-1973

Coal fine washeries were set up for the first time in Jamadoba and West Bokaro.

1980-1996

Modernisation programme of the Jamshedpur steel works was initiated in four phases

during this period.

2000

i. Cold rolling mill set up at Jamshedpur. The mill was completed in a record time

of 26 months.

ii. Creation of B2B portal called metaljunction.com in collaboration with SAIL and

Kalyani Steel.


Material Management

2001

World Steel Dynamics ranks Tata Steel as India's only World-class steel maker.

2003

i. The Company launches its first branded cold rolled steel product called Tata

Steelium

ii. The Company celebrates 75 years of industrial harmony.

2004

i. The Company's biggest blast furnace completes production of 14million tones of

hot metal which is the highest production achieved by a blast furnace in ‘India in its first

campaign.

ii. The Company files a corporate sustainability report where the Company was rated

as India's Top Reporter by United Nations Environment program and Standard and

Poor's.

2005

i. The Company acquires NatSteel Asia in Singapore.

ii. The company launches steel Junction which is India's first organized retail store

for steel products.

iii. The Company is ranked as the World's Best Steel Maker by World Steel

Dynamics.

2006-2007

i. The Company's steel works at Jamshedpur crosses 5 million tonne mark in crude.

Steel production.

ii. The Company is ranked again as the world’s best steel maker by world steel

Dynamics


Material Management

iii. The Company acquires Corus, which makes the company the sixth largest steel

maker in terms actual crude steel production.

2008-2009

i. 1.8 Mtpa capacity expansion at Jamshedpur becomes operational, bringing total

crude steel production capacity to 6.8 Mtpa.

ii. Prime Minister Dr. Man Mohan Singh unveiled the centenary postage stamp to

commemorate the Company’s centenary year.

iii. The company was conferred the Best Establishment Award by the President of

India.

iv. The Company was awarded the Demining Application Prize

v. The Company was awarded the TERI Corporate Award of. It is HIV / AIDS

initiative...

2009-2010

i. The Company issued Global Depository Receipts worth US$ 500 million.

ii. The Company was awarded the CSR Excellence Award 2010 by the Associated

Chambers of Commerce and Industry.

iii. The Company was awarded the FE-EVI Green Business Leadership Award in the

iron and steel category.

iv. The Company was awarded Asia's Best Employer Brand Awards, 2010 for talent

management, Best human resource strategy in line with business, excellence in training,

CEO with human resource orientation and human resource leadership.

v. The Company was awarded the Rashtriya Khel Protsahan Puruskar award for

outstanding contribution in the field of sports in the category of 'Financial Support for

Sports Excellence'.

Finally, Tata Steel's Global Wires Business has manufacturing facilities spread across the

geographies of India, China, Thailand and Sri Lanka- The products, are manufactured in

fully integrated manufacturing cycles, from sourcing of raw materials to in-house steel


Material Management

making and wire rod rolling facilities. All the units of operation adhere to strict quality

parameters and are ISO certified.

In 2009-2010, the Wire Division in India restructured itself by relocating its operations

from Mumbai to Tarapur and to Indian Steel & Wire products Co. Jamshedpur. The

Division was the first to brand its galvanized wires for the retail segment under the

TATA Wiron brand.

The Wire Division has been the sole supplier of pre-stressed concrete strands used in the

construction of precast segments for the 4.7 Kms, 8-lane- catrle-stayed Bandra-Worli Sea

Link at Mumbai, India.

AUDITOR OF TATA STEEL LIMITED:

The auditor of Tata steel Limited is "DION GLOBAL SOLUTION LIMITED”.

LOCATION OF'TATA STEEL LIMITED:

The headquarters or main head office is located in Mumbai.

The register address was as follows:

Bombay house, 24 Homi Mody Street, Fort,

Mumbai - 400001, Maharashtra -India

Phone Num-66658282,

Fax Numb: 66657724, 66657725.

Email: [email protected]

PRODUCTS OF TATA STEEL LTMITED:

The products of the Tata steel are as follows:

Aluminium ingots

Asbestos Tapes.

Carbon Electrode paste.


Material Management

Cast & Forged machining parts.

Ceramic plates,

Coating Machines.

Engraving Machines.

Magnesia Carbon

Rare Earth Magnet.

Stainless Steel Wire.

Straightening Machines.

Zinc ingots.

Other Copper.

Other ingots.

Other Square Billets.

TOP BRANDS OF TATA STEEL LIMITED:

The Tata Steel Group's Brand building endeavours have always been directed at building

assurance, reliability and superior product quality in segment. Outstanding performance

by the Company's different divisions have surpassed their own brand standards and

created higher quality parameters for each other.

In an attempt to 'discommodities' steel, the Company has introduced several branded steel

products to meet growing market demands. Some of the Brands produced and marketed

by the different Divisions and Business Units of Tata Steel are:

GalvanorTM

Tata Agrico

Tata Bearings

Tata Pipes

Tata Shaktee


Material Management

Tata Steelium

Tata Structura

Tata Tiscon

Tata Wiron

OVERSEAS ACQUISITION OF TATA STEEL LIMITED:

Corus

On 20 October 2006, TISCO signed a deal with Anglo-Dutch company, Corus

On 19 November 2006, the Brazilian steel company Companhia Siderurgica

Nacional (CSN) launched a counter offer for Corus at 475 pence per share, valuing it at

£4.9 billion

On 11 December 2006, Tata pre-emptively upped the offer to 500 pence, which

was within hours trumped by CSN's offer of 515 pence per share, valuing the deal at £4.9

billion. The Corus board promptly recommended both the revised offers to its

shareholders.

OTHER ACQUSITION:

In August 2004, Tata Steel entered into definitive agreements with Singapore

based NatSteel Ltd to acquire its steel business for Singapore. $486.4 million

(approximately Rs 1,313 core) in an all cash transaction.

In 2005, Tata Steel acquired 40% Stake in Millennium Steel in Thailand for $130

million (approx. Rs 600 core)

In 2007 Tata Steel through its wholly owned Singapore subsidiary, NatSteel Asia

Pvt Ltd acquired controlling stake in two rolling mills: SSE Steel Ltd, Vinau steel Ltd

located in Vietnam.

COMPETITORS OF TATA STEEL LIMITED

Arcelor Mittal,


Material Management

Essar steel

JSW steel

SAIL VIZAG steel etc.

Jindal steel.

TMT steel.

CONTROVERSIS:

The company is facing increasing criticism. That the drive for growth and profits is

completely overshadowing it’s once famed philanthropy, and causing lasting social and

environmental damage at various locations. In response, Tata cites its programs for

environment and resource conservation, including reduction in greenhouse emission, raw

materials and water consumption. The company has increased waste re-use and re-

cycling, and reclaims land at its captive mines and collieries through forestation. Tata

Steel's chief environment and occupational health, says, "Our capital investment in

pollution-abatement solutions was in the Vicinity of 4 billion in 2003-04"

TRADE MARKS OF TATA STEEL LTMITED:


http://www.tatasteelindia.com/vst

Material Management

CAPTUTION OF TATA STEEL LIMITED:

Some of the Capitation of Tata steel limited and its brands Capitation are as follows:

BRAND CAPTUTION CAPTUTION

LOGO OF COMPANY LEADERSHIP WITH TRUST

VALUE STRONGER THAN STEEL

BUILDING TRUST BINDING RELATIONS

TATA AGRTGO BOND WITH TRUST

TATA PIPES FOR NOW, FOR YEARS

TATA SHAKTEE LASTS LONGEST

TATA TISCON TRUSTEED STEEL FOR YOUR HOME

TATA WIRON BANNDHE RISHTON KE TAAR


Material Management

ACHIEVEMENTS AND AWARDS OF TATA STEEL LIMITED:

Some of the key achievements/awards received in Financial Year 2010 are as follows:

1. The Company was awarded the 'Economic Times Company of the Year Award'.

2. The Company was conferred the Indian Most Admired Knowledge Enterprise

award for sustained excellence in field of knowledge management.

3. In 2010, one of the Company's employees was awarded the Prime Minister's

Shram awards for years 2005 to 2007.

4. Tubes Division of the Company won the 16th JRD QV Award.

5. Corporate Social Responsibility Excellence Award to the Company by Associated

Chambers of Commerce & Industry of India.

GENERAL INFORMATION ABOUT TATA STEEL LIMITED:

LOGO TATA STEEL

Type Public

Traded as BSE: 500470

BSE SENSEX Constituent

Industry Steel

Founded 1907

Founder (S) Dorabji Tata

Head Quarters Mumbai, Maharashtra State India

Area served World wide

Key people B Muthuraman

Vice Chairman


Material Management

Hermant M. Nerurkar (MD)

Products Steel, Flat Steel Products, Long steel

Products, Wire Products, Plates

Revenue Rs.1,810,681,627. (2015)

Profit Rs.391,520,693. (2015)

Total Assets Rs.793, 248,19. (2015)

Total equity 709,741,693 (2015)

Employees 81,251 (2015)

ParentTata Group

Subsidiaries Tata Steel Europe

Website www.tatasteel.com

CHAPTER 3

SECOND, THE REVIEW OF THE RELEVANT LITERATURE

Introduction A number of studies animate the production, operation and management of

materials and other fields. Management of the material is an important stage in the

manufacturing process, the supply of products and services offered. It is also the joy of

service and quality of consumer key role. In Chapter 1, back drop, investigators

focused on a review of the relevant literature and materials management presented

briefly in Chapter 2 Literature Review Early studies led the researchers to design

research methods and details are also included in this chapter. literature review


Material Management

Indigenous literature is not adequate in the research projects in materials

management both at the macro and micro levels of the region is still visible in India.

However, recently, it is considered to increasing its importance, a number of studies

have been China's major colleges and universities in order to emphasize the face of some

selected central and state public sector undertakings problems. In addition to the

research work, India, Hyderabad, administrative staff and individual INSTITUTE OF

some research focused on existing policies, procedures, materials management and

industrial organization issues concerned. In addition to the study, many times from the

government commission to submit report on inventory management, particularly in

India. Bansal (1) In his study of materials management: Bharat Heavy Electricals

Limited, Bhopal shares under (BHEL) case studies to assess the existing system of

inventory management. He stressed said. You need to learn the ABC analysis and inventory control EOQ technique

used in the commitment to offer automatic replenishment system. He also noted that

the accumulation of surplus and non-sports shop in the organization, and suggested that it no longer needs the extra and should definitely shop at the best price to dispose of as

soon as possible. In addition, he recommended that the monthly inventory report

category wise to introduce effective control they store ledger account ledger reconciliation system and to avoid misappropriation stores preparation, and spare parts

production and management are higher than their actual level of consumption. In general

stock caught doing these daily needs. Requirements equivalent to two to three stores

and spares holdings should be considered redundant. Sambasiva Rao. K (2) Heavy His Materials Management and Assessment in the

public sector ship. Materials management and performance identifies a number of


Material Management

issues facing the heavy machinery industry, raw material management. Written evidence

and expert opinion survey method include investigation. His assessment involved in the

procurement of materials and delivery times existing procurement system and suggested

a long time should be shortened. His research indicates that in excess inventory

calculation in all engineering unit production cost of the number of months. He also

stressed their own material existence and disposal of surplus and non-moving items, and some of the excess lead time material management issues excessive dependence on

imports, such as customer delays. Introduction According to him, the company's

management and procurement lead times are due to the special nature of the higher end

of the industry. He suggested open purchase procedures, increase the financial power of

the people, countries opened liaison offices in order to reduce delivery time. Phaniswara Raju (3) Already in 2006 in his study he conducted a study

Andhra Pradesh Road Transport Company (APSRTC) for materials management, he

studied various parameters, such as on the basis of material consumption in APSRTC

materials management practices and procurement systems per vehicle, per kilometer

consumption, vehicle inventory, inventory consumption and a few months, he

emphasized the purchase of materials some major issues. The study is mainly based on

secondary data from APSRTC performance report published Annual Report, MIS

record, the CIRT, sodium and other S & P business of the National Highway Traffic

collected, in addition to personal discussions held with officials of the company. The

study reveals APSRTC material consumption level continues to increase. Because

compared to other undertakings. The study pointed out that since no value as APSRTC

of procurement systems analysis and network technology, an important analytical

technique.


Material Management

In a critical review APSRTC inventory control system on the pattern of stock, reorder, and review policies, delivery patterns, stock and other aspects of proposed re-

classification stems basis of his shop on the key, reorder level and the number of

refixation rearrange. The study also shows that the stem causing unnecessary

maintenance-related inventory records is a waste not to use it. Swami Hari R. (4) In the public welfare industry, his work, materials

management to assess the performance Viz in central Rajasthan, public sector

management material things, Instrument Co., Kota unit, HMT, A Jiemei Seoul unit,

Hindustan Zinc Ltd., Debari unit, Hindustan Copper Limited, Khetri units and

restrictions Sang Poer salt. The study covers all aspects of these companies from 1977-

78 to 1981-82 was funded management. The method of investigation, including

questionnaires, site visits and paperwork skills, it was observed that the cost of materials

accounts for more than 50% of the production of selected research unit of the total cost.

Suitable importance of materials management has not been fully in Rajasthan and

utilities to achieve so far little attention has been paid by the various scientific and

technical material management application, task control inventory investment.

Researchers expressed Materials Management should include checking, will view an

autonomous and independent cells in tissue created for this purpose. The study showed

that in selected public enterprises is quite a long time to prepare, and by accelerating the

Acquisition proposed reducing administrative lead times. The study also showed that the

selected public companies stock has accumulated due to a wrong purchase, refuse heavy,

very long time, cohesive organization, material management and inventory control of

flawed scientific, modern technology nonadoption. He believes that the stock

holdings may be integrated materials management system, the designated qualified and well-trained inventory management, shorter delivery times, setting and adjusting the consumption of raw materials and other goods and stocking norms, Applied Materials Modern Management technology and reduction of non-recognition and slow moving


Material Management

items. His conclusion is that public enterprises have been due to poor management of

materials suffered losses or to obtain a low profit level. Some people, companies follow

the standard techniques of materials management, they will have sufficient resources to

increase their lead to expansion and yield more profits. In addition to the research, proof of the growing awareness of the subject, some

research materials and inventory management are also carried out in the region focus

existing policies, procedures and issues. There are also some books namely:

Reasonable advance the Materials Management (5), Materials Management

IMPORTANT: Text and Cases (6), Materials Management: the program text and boxes

(7), Materials Management (8), Materials Management (9) , Materials Management: an

integrated approach (10), an integrated material. Management 11, Materials Management (12), The concept of integrated

materials management (13). These books are mainly functional needs, procedures and

issues in the dead of materials management area and cater to students, researchers and

professionals dealing with this issue. However, in some textbooks, some typical case

studies and useful discussion for the benefit of readers in length. Some also have a special textbook on inventory management, such as India

(14), Indian Inventory Management , Manufacturing industry inventories in India (15),

Inventory Management (16), Procurement and inventory management (17), Stock held by

manufacturers and the United States (18), Turnaround planning and control (19), Problems

week turn (20) and Turnaround management (21). In all the books, their respective authors try to explain the concept of research

and some of the cases, the importance of tools and techniques and inventory


Material Management

management. For example, Krishnamurthy Sastry research and 21 industries,

including industry production and 91% of the Group through manufacturing reasons

covered 96% of the stock of inventory behavior. Only factory stock ownership, and

analyzed in terms of price relates to the prevalence during the study period. Similarly, IFMRâ € ™ survey, "summed up the inventory management of its

inventory management practices of the industry in India. Indian industry from Jamnalal

bar Guji faculty were four important control measures of the survey summary results of

management research the Mumbai university concluded that most companies still by the

experience and intuition of the rule, funding decisions Gold guide to stock investing.

224 companies approached, 36 responded to the making, of which only 13 use

inventory control report, only six of the 13 companies considered to control inventory

account inventory costs. Administrative Staff College of India inventory management approach, focusing

on the relevant stock standard research faculty Tandon committee recommendations

suggest that industry has been found to carry, and a large, multi-materials stocks, including the proposed project is not imported spare parts and the Committee of

specification. It shows that, in addition to work within the management specification

engineering industry and textile industry, the scope of the ongoing inventory. The IFMR carried out in the public sector undertakings private sector and

public limited liability company in 1979, an empirical study of inventory management

practices, highlighting inventory management scope of the problem and appreciate the

situation in India, in order to solve these technical and practical value issues adopted .

While it is intended to cover two hundred organizations from most of the response it is

actually just the height of 48 organizations pay attention to inventory management


Material Management

praise. It also shows a decrease in the inventory of spare parts and engineering process

industry considerable range, there is a general lack of benefits from the integrated

materials management to bring appreciation. Most of the respondents Data Processing

data management functions, except for a few who give the service center which has the

status of a profit center. In most cases, there is to improve the materials management

functions, and giving it a higher status with senior management scrutiny under a very

strong case. In addition to this, a number of reports submitted to the Government from time

to time. For example, in its 40th report Public welfare industry committee (22), He

pointed out the lack of management commitment was funding the public sector in

India. The BPE (23) Materials management guidelines released to the public sector and

the introduction of modern enterprise to improve their materials management functions.

Administrative Reform Commission (24) Reduce inventory levels have put

forward a number of recommendations. Appointed to the framework guidelines, and to

lay down applicable to all classes of industrial borrowers (commonly known as the

Tandon Committee report) bank credit RBI norms Study Group (25) Through the

Bureau of Public Enterprises (BPE), appointed in 1972 , Classified as prescription

Stock Listing fifteen regulate the industry. Inventory control (26) Commission Having

considered the three public sector enterprises inventory namely, Hindustan Shipyard

Limited (HSL), Hindustan Cables Limited (HCL), the National Mining Development


Material Management

Co., Ltd. (NMDCL). The Committee will HSL inventory levels, and put forward some

concrete proposals to reduce inventory levels in all three divisions.

CHAPTER -4

RESEARCH DESIGN

4.1 Title Of The Study :

A Study on Material management in Tata Steel Ltd-Wire Division.

4.2 Introductions to the study:-


Material Management

The investment in Material is very high it most of the undertaking engaged

in manufacturing, whole and retail trade. The amount of investment sometime

more in Material than the other assets. In India, a study of 29 major industries

revealed that average cost of material is 68percentage and cost of labor and

overheads is 34percentage into rupee. About 90percentage as working capital is

invested in inventories. It is necessary for every management to give proper

attention to Material management. A proper planning of purchasing, holding,

storing and accounting should form a part of Material management.

A proper Material control not only helps in solving the accurate problem

of liquidity that also increase profits and causes substantial reduction in working

capital of the concern. If Material policies actively and generally formulated it

will speed up maximum return on investment and ultimately results in

maximization of owner’s wealth.

4.3 Statement of problem:-

Material consist of 60percentage of working capital of a business concern

the success of industry, which caries this, could be achieved by observing or

following good Material management system in this context the study initiated in

med farm to out their existing Material system of previous 4 years and fine out the

problem it any and performance of the company with help to turn over ratio. In

this context the study initiated in med farm, to find out the existing Material

system.

4.4 Objective of the study:-

1. To study the Material management system in the company.

4. To analyses the Material management performance through turn over

ratio.

3. To make suggestions if there are any problems with regard to Material

management.

4. To identify the critical arias of Material management in the company.

5. To analyses the defects in Material management.


Material Management

6. To identify the defects in Material management.

7. To know the Material techniques in Material management.

8. To introduce the modern methods in Material management.


10. To identify the modern Material system.

11. To identify the existing Material system.

4.5 Methodologies:-

Main purpose of research methodology is to provide the information that

will facilitate the identification of the problem and to assist to the organization in

carrying out best possible decision.

The articles obtained from magazines like Management Review, The Smart

Manager, books like strategic Management contributed to the information

required for the completion of the dissertation.

4.6 Sampling design:-

For the purpose of the study being comprehensives study of Material

control to metaphor is mainly uses reference material and casual interview as it

main source of information.

4.7 Data analysis:-

For the purpose of this project both primary and secondary data being use.

Primary data:

Face to face Material

Observation

Secondary data:

1. Official records

2. Documents and employees handbooks

3. Manuals and files of the company


Material Management

4. company magazines and newspapers

4.8 Limitation of the study:-

Study is limited to period of four years (based on the available data in the

period)

The research work was confined only desk work.

The study considers only raw material, work in progress, and finished

goods.

4.9 Scope of the study:-

The study is helps to analyses the Material managements in Tata Steel

Ltd-Wire Division and the main objective is to reallocate the any defects made by

the firm helps to utilization.

Plan of analysis:

In the study helps to future planning of the management.

4.10 Reference period.

The reference period is to the study one month.

4.12 Chapter Scheme

Chapter 1: introduction

Chapter 2: company profile

Chapter 3: Review Literature

Chapter 4: research design

Chapter 5: data analysis and interpretation


Material Management

Chapter 6: summary of findings

Chapter 7: Suggestions and conclusion

Appendices and annexure

Bibliography

CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

INTRODUCTION:-Analysis and Interpretation is the process of identifying strength and weakness of a firm

by properly establishing relationship between two items. It is useful for decision making


Material Management

and there are number of methods & techniques which are generally used in analysis of

financial services.

The analysis and interpretation of data is the most skilled task in the research process.

Meaning of Analysis:-Analysis is the process by which the whole body of gathered data facts, figures and ideas

is converted into meaningful and useable information. The data is placed on its

appropriate setting and consistent relationship drawing general inferences.

Following is the procedure involved in the integrated operations of analysis of data:

1. Classification of data.

2. Tabulation of data.

3. Statistical analysis of data.

Meaning of Interpretation:-Interpretation refers to the relationship with the collected data. It’s the mechanism

through which the factor that appears to explain what has been observed by researcher

during the course of a research.

TABLE NO: 5.1

TABLE SHOWING INVENTORY TO NET SALES

INVENTORY TO NET SALES = InventoryNet Sales∗100


Material Management

Rs. In Lakhs

ANALYSIS:

From the above table it can be analyzed that there is a increasing level in

the rate of inventory to net sales is 44.895% during the year 2011-2012. Where as

there it has been increased to 46.36% in the year 2012-2013. In the year 2013-

2014 it increased to 52.28%, however there is increase in the year 2014-2015 with

the52.56%.


YEAR

INVENTORY (RS) NET SALES PERCENTAGE

(%)

2011-2012 2,460.77 5,482.11 44.89%

2012-2013 2,673.80 5,767.64 46.36%

2013-2014 3,191.29 6,103.82 52.28%

2014-2015 3,298.71 6,275.52 52.56%

Material Management

GRAPH NO : 5.1

GRAPH SHOWING INVENTORY TO NET SALES

2011-2012 2012-2013 2013-2014 2014-201540.00%

42.00%

44.00%

46.00%

48.00%

50.00%

52.00%

54.00%

44.89%

46.36%

52.28% 52.56%

INTERPRETATION:

From the above graph it can be inferred that due to the increase in the demand for Wire

products their has been slight increase in the level of inventory to sales in the year 2014-

2015 when compared to previous years.


Material Management

TABLE NO: 5.2

TABLE SHOWING INVENTORY TO CURRENT ASSETS RATIO

INVENTORY RATIO = Inventory

Current Asset∗100

Rs. in Lakhs

ANALYSIS:-

From the above table we can observe that in the year 2012-2013 there is a

increase in the current asset value when compare to other years , but in the other years

also there is a increase in the current asset and inventory.


YEAR INVENTORY(Rs)

CURRENT ASSET(RS)

PERCENTAGE(%)

2011-2012 2460.77 6292.29 39.11

2012-2013 2673.8 12133.27 22.03

2013-2014 3191.29 11828.45 26.97

2014-2015 3298.71 11991.62 27.5

Material Management

GRAPH NO : 5.2

GRAPH SHOWING INVENTORY TO CURRENT ASSETS RATIO

2011-2012 2012-2013 2013-2014 2014-201545

46

47

48

49

50

51

49.18

47.43

50.47

46.92

INTERPRETATION:-

From the above graph it can be inferred that there is a more increase in the value of raw

materials due to more purchases during the year 2014-2015. So why there is more

increase in the values of current assets and inventory during the year 2014-2015 when

compared to other years.


Material Management

TABLE NO:5.3

TABLE SHOWING INVENTORY TO TOTAL ASSETS RATIO

INVENTORY TO TOTAL ASSETS RATIO = InventoryTotal Inventory

∗100

Rs.in Lakhs

ANALYSIS:-

The above table shows that there is increase in the total assets due to increase in

the current assets. In the year 2011-2012 the total assets were less when

compared to 2014-2015, and the percentage has been decreased in the year 2014-

2015.

GRAPH NO:5.3


YEAR INVENTORY(RS)

TOTAL ASSETS(RS)

PERCENTAGE(%)

2011-2012 2460.77 5003 49.18

2012-2013 2673.8 5636.96 47.43

2013-2014 3191.29 6322.86 50.47

2014-2015 3298.71 7029.85 46.92

Material Management

GRAPH SHOWING INVENTORY TO TOTAL ASSETS RATIO

2011-2012 2012-2013 2013-2014 2014-201545

46

47

48

49

50

51

49.18

47.43

50.47

46.92

INTERPRETATION:-

From the above graph it can be inferred that there is increase in both

inventory and the total assets during the year 2014-2015 and percentage wise it is

decreased when compared to previous years, because there is increase in both the

inventory and the total assets during the year 2014-2015.

TABLE NO:5.4


Material Management

TABLE SHOWING INVENTORY TO WORKING CAPITAL

INVENTORY TO WORKING CAPITAL RATIO = InventoryWorkingCapital

∗100

Rs. In Lakhs

YEAR INVENTORY(RS)

WORKING CAPITAL

PERCENTAGE(%)

2011-2012 2460.77 -1347.23 -1.83

2012-2013 2673.8 3500.6 0.76

2013-2014 3191.29 4421.35 0.72

2014-2015 3298.71 5093.68 0.65

ANALYSIS:-

From the above table it is clear that there is a negative value in the working

capital ratio during the year 2011-2012 due to the increase in the current

liabilities=Rs 7639.52Lakhs and the current assets =6292.29Lakhs. So why the

working capital is having the negative value.

GRAPH NO:5.4


Material Management

GRAPH SHOWING INVENTORY TO WORKING CAPITAL.

2011-2012 2012-2013 2013-2014 2014-2015

-2

-1.5

-1

-0.5

0

0.5

1

-1.83

0.76 0.72 0.65

INTERPRETATION:

From the above graph it can be inferred that due to increase in the current

liabilities value, due to this slight changes in the level of inventory of a

company during the year 2014-2015, so why there is a slight variations in the

working capital.

TABLE NO:5.5


Material Management

TABLE SHOWING ANNUAL CONSUMPTION OF RAW

MATERIALS

Rs.in Lakhs

ANALYSIS:-

From the above table it is clear that the annual consumption of raw

material has been increased in the year 2013-2014 when compared to other previous

years, but there is a decrease in the values of annual consumption of raw materials during

the year 2014-2015.

GRAPH NO:5.5

GRAPH SHOWING CONSUMPTION OF RAW MATERIAL


YEARANNUAL

CONSUMPTION OF R/M(IN LAKHS)

2011-2012 2123.08

2012-2013 3072.8

2013-2014 3824.67

2014-2015 3139.53

Material Management

.

2011-2012 2012-2013 2013-2014 2014-20150

500

1000

1500

2000

2500

3000

3500

4000

4500

2123.08

3072.8

3824.67

3139.53

INTERPRETATION:-

From the above graph it can be inferred that there is more annual

consumption of raw materials in the year 2013-2014, may be due to a more production

and more demand to a product, and there is a increase in the consumption of raw

materials year by year.

TABLE NO:5.6

TABLE SHOWING THE STOCK OF WORK IN PROGRESS.


Material Management

ANALYSIS:-

The above table indicates the stock of work in progress, the stock has been

increased in the WIP from the year on year, there is a more increase in the year 2014-

2015, i.e.. Rs. 196.86 Lakhs.

GRAPH NO:5.6

GRAPH SHOWING STOCK OF WORK IN PROGRESS


YEARWORK IN PROGERSS(IN

LAKHS)

2011-2012 58.99

2012-2013 113.56

2013-2014 161.42

2014-2015 196.86

Material Management

2011-2012 2012-2013 2013-2014 2014-20150

50

100

150

200

250

58.99

113.56

161.42

196.86

INTERPRETATION:-

From the above graph it can be inferred that during the year 2014-

2015 there is more increase in the value, because the orders during this year is more when

compared to other years.

TABLE NO: 5.7

TABLE SHOWING INVENTORY CONVERSION PERIOD.


Material Management

Inventory conversion period = Noof days∈a yearStock turnover ratio .

.

ANALYSIS:-

From the above table it is clear that the stock turnover ratio has been

decreased from 2014-2015, when compared to other years, but there is a increase in the

inventory conversion period during the year 2014-2015.

GRAPH NO: 5.7

GRAPH SHOWING INVENTORY CONVERSION PERIOD.


YEAR NO OF DAYS IN A YEAR

STOCK TURNOVER

RATIO

INVENTORY CONVERSION

PERIOD (DAYS)

2011-2012 365 2.19 167

2012-2013 365 2.25 162

2013-2014 365 2.08 175

2014-2015 365 1.93 189

Material Management

2011-2012 2012-2013 2013-2014 2014-20151.7

1.8

1.9

2

2.1

2.2

2.3

2.19

2.25

2.08

1.93

INTERPRETATION:-

From the above graph it can be inferred that there is a

decrease in the stock turnover ratio due to increase in the average stock and the cost of

goods sold during the year 2014-2015, There is a increase in the inventory conversion

period due to decrease in the stock turnover ratio during the year 2014-2015.

TABLE NO:5.8

TABLE SHOWING AVERAGE STOCK OF RAW MATERIAL.


Material Management

Average stock of raw material =

OpeningStock of Rawmaterial+Closing Stock of Rawmaterial2

Rs.in Lakhs

YEAR O/S OF RAW MATERIAL

C/S OF RAW

MATERIAL

AVERAGE STOCK OF

RAW MATERIAL

2011-2012 3024.54 3135.77 3080.15

2012-2013 3135.77 3669.03 3402.4

2013-2014 3669.03 4084.93 3876.98

2014-2015 3583.56 3583.56 3583.56

ANALYSIS:-

From the above table it can be analyzed that the average stock of raw

material in the year 2011-2012 was 3080.15, 2012-2013 was 3402.4, 2013-2014 was

3876.98 and in the year 2014-2015 was 3583.56.This shows the increasing trend of

average stock of raw material.

GRAPH NO:5.8

GRAPH SHOWING AVERAGE STOCK OF RAW MATERIAL


Material Management

2011-2012 2012-2013 2013-2014 2014-20150

500

1000

1500

2000

2500

3000

3500

4000

4500

3080.153402.4

3876.983583.56

INTERPRETATION:

From the above graph it can inferred that there is no drastic changes in the average stock

when compare to previous year 2013-2014. The company has maintained consistency in

purchase of raw material during the year 2014-2015.

TABLE NO: 5.9

TABLE SHOWING CURRENT RATIO


Material Management

Rs. In Lakhs

YEAR CURRENT ASSETS

CURRENT LIABILITIES

CURRENT RATIO

2011-2012 6,292.29 7,639.52 0.82

2012-2013 12,133.31 8,632.67 1.4

2013-2014 11,828.45 7,407.10 1.59

2014-2015 11,991.62 6,897.94 1.74

ANALYSIS:

From the above table it is clear that the current assets are more when compare to current

liabilities except in the year 2011-2012, but there is a increase in the current assets and

current liabilities, and also the current ratio during the year 2014-2015.

GRAPH NO:5.9

GRAPH SHOWING CURRENT RATIO


Material Management

2011-2012 2012-2013 2013-2014 2014-20150

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

0.82

1.4

1.591.74

INTERPRETATION:

From the above graph it can be inferred that there is a slight increase in the year 2014-

2015, which indicates good liquidity position of the business in the year 2014-2015.

TABLE NO:5.10

TABLE SHOWING DEBTOR’S TURNOVER RATIO


Material Management

Dr’s turnover ratio= Net annual salesAverage Debtors

Average Dr’s = O peningDebtors+Closing Debtors2

Rs. In Lakhs

YEARNET

ANNUAL SALES

AVERAGE DR’S

DR’S TURNOVER

RATIO

2011-2012 5,482.11 2535.8 2.16

2012-2013 5,767.64 2,795.10 2.06

2013-2014 6,103.82 3010.81 2.02

2014-2015 6,275.52 3731.6 1.68

ANALYSIS:

From the above table it can be analyzed that there is a increase in the year on year and

also the average Dr’s has been increased in the year 2014-2015, but the Dr’s turnover

ratio has been decreased in the year 2014-2015.

GRAPH NO:5.10

GRAPH SHOWING DR’S TURNOVER RATIO


Material Management

2011-2012 2012-2013 2013-2014 2014-20150

0.5

1

1.5

2

2.5

2.162.06 2.02

1.68

INTERPRETATION:

From the above graph it can be inferred that due to lower ratio in the year 2014-2015, the

management has to give more interest towards the collection of the money in a better

way.

TABLE NO:5.11

TABLE SHOWING STOCK TURNOVER RATIO


Material Management

Stock turnover ratio = Sales

Average inventory

Average inventory =Openinginventory+Closinginventory

2

Rs. in Lakhs

YEAR SALES AVERAGE INVENTORY

STOCK TURNOVER

RATIO

2011-2012 5,482.11 2,498.83 2.19

2012-2013 5,767.64 2,567.28 2.25

2013-2014 6,103.82 2,932.54 2.08

2014-2015 6,275.52 3,245 1.93

ANALYSIS:

From the above table it is observed that there is a increase in the Average inventory and

the Sales during the year 2014-2015, when compared to other previous years, but the

stock turnover ratio has been decreased in the year 2014-2015.

GRAPH NO : 5.11


Material Management

GRAPH SHOWING STOCK TURNOVER RATIO

2011-2012 2012-2013 2013-2014 2014-20151.7

1.8

1.9

2

2.1

2.2

2.3

2.19

2.25

2.08

1.93

INTERPRETATION:

From the above graph it can be inferred that the company has more inventory by the

anticipation of the sales which have not occurred in the year 2014-2015, so the stock

turnover ratio has been decreased during these year.

TABLE NO:5.12

TABLE SHOWING CURRENT ASSET TURNOVER RATIO


Material Management

Rs. In Lakhs

YEAR SALESCURRENT

ASSETS

CURRENT ASSET

TURNOVER

RATIO

2011-2012 5,482.11 6,292.29 0.87

2012-2013 5,767.64 2,133.27 0.47

2013-2014 6,103.82 11,828.45 0.52

2014-2015 6,275.52 11,991.62 0.52

ANALYSIS:

From the above table it is clear that there is a decrease in the current assets during the

year 2011-2012 due to the cash & bank balances & the capital work in progress values,

in the year 2012-2013 due to the gradual increase in the current assets the Current asset

turnover ratio has been decreased.

GRAPH NO :5.12

TABLE SHOWING CURRENT ASSET TURNOVER RATIO


Material Management

2011-2012 2012-2013 2013-2014 2014-20150

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0.87

0.470.52 0.52

INTERPRETATION:

From the above graph it can be inferred that there is no much impact on the business ,

because the ratio is constant during the year 2013-2014, 2014-2015 which implies the

company has made more product sales with minimum investments in the current assets

during these years.

TABLE NO : 5.13

TABLE SHOWING AVERAGE COLLECTION PERIOD


Material Management

Average period=Noof working days∈a yearDebtors turnover ratio

YEARNO OF

WORKING DAYS

DR’S TURNOVER

RATIO

AVERAGE COLLECTION

PERIOD

2011-2012 365 2.16 169

2012-2013 365 2.06 177

2013-2014 365 2.02 181

2014-2015 365 1.68 217

ANALYSIS:

The above table depicts the average collection period due to changes in the debtor

turnover ratio the collection period has been increased. The Dr,s turnover ratio has been

decreased year by year due to increase in the net annual sales and the average Dr’s.

GRAPH NO : 5.13

GRAPH SHOWING AVERAGE COLLECTION PERIOD


Material Management

2011-2012 2012-2013 2013-2014 2014-20150

50

100

150

200

250

2.16 2.06 2.02 1.68

169 177 181

217

INTERPRETATION:

From the above graph it can be inferred that the company has not followed the stringent

collection procedure so the collection period has been increased in the year 2014-2015.

TABLE NO:5.14


Material Management

TABLE SHOWING INVENTORY TURNOVER RATIO

INVENTORY TURNOVER RATIO ¿ Cost of goods soldAverage inventory

YEAR COST OF GOODS SOLD

AVERAGE INVENTORY

INVENTORY TURNOVER

RATIO

2011-2012 3144.67 2498.83 1.26

2012-2013 3579.09 2567.28 1.39

2013-2014 3806.93 2932.54 1.29

2014-2015 3630.89 3245 1.12

ANALYSIS:

From the above table it is clear that there is a fluctuations in the values during the year

2013-2014 and in the year 2014-2015 when compare other previous years.

GRAPH NO: 5.14


Material Management

GRAPH SHOWING INVENTORY TURNOVER RATIO

2011-2012 2012-2013 2013-2014 2014-20150

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.261.39

1.29

1.12

INTERPRETATION:

From the above graph it is inferred that there is a decrease in the ratio due to reduction in

the demand and also the high inventory in the year 2014-2015.

TABLE NO : 5.15


Material Management

TABLE SHOWING STOCK TURNOVER IN DAYS

STOCK TURNOVER IN DAYS = AVERAGE STOCK* 365 DAYS/

COST OF GOODS SOLD

Rs. In Lakhs

YEAR AVERAGE STOCK * 365 DAYS

COST OF GOODS SOLD

STOCK TURNOVER IN

DAYS

2011-2012 2498.83*365 3144.67 290

2012-2013 2567.28*365 3579.09 262

2013-2014 2932.54*365 3806.93 281

2014-2015 3245*365 3630.89 326

ANALYSIS:

From the above table it shows that the average stock of the company has been increased

due to the increase in the production of the products and the addition of some of the

products during the year 2014-2015.

GRAPH NO:5.15


Material Management

GRAPH SHOWING STOCK TURNOVER IN DAYS

2011-2012 2012-2013 2013-2014 2014-20150

500

1000

1500

2000

2500

3000

3500

4000

3144.67

3579.093806.93

3630.89

290 262 281 326

COST OF GOODS SOLDSTOCK TURNOVER IN DAYS

INTERPRETATION:

From the above graph it can be inferred that the company holds the inventory for 326

days during the year 2014-2015, because of the decrease in the sales or demand to the

products during this year.

CHAPTER- 6


Material Management

FINDINGS

Objective of the study:-


4. To analyses the Material management performance through turn over

ratio.

3. To make suggestions if there are any problems with regard to Material

management.

4. To identify the critical arias of Material management in the company.

5. To analyses the defects in Material management.

6. To identify the defects in Material management.

7. To know the Material techniques in Material management.

8. To introduce the modern methods in Material management.


10. To identify the modern Material system.

11. To identify the existing Material system.

Scope of the study:-

The study is helps to analyses the Material managements in Tata Steel

Ltd-Wire Division and the main objective is to reallocate the any defects made by

the firm helps to utilization.

FINDINGS


Material Management

The percentage of the Inventory to Net sales has been increased in the year 2014-

2015 when compared to other years.

Due to increase in the Inventory and the Current assets the inventory to current

ratio has been increased in the year 2014-2015.

The percentage o the working capital has been increased from -1.83 to , 65 during

the year 2014- 2015.

The net sales of the company as increased in the year 2014 – 2015, as a result of

this inventory to net sales as increased to 52.56%.

The increase in the total assets in the year 2014-2015 the percentage of the

inventory to total assets has been decreased to 46.92% in the year 2014-2015.

The annual consumption of the raw materials has been increased to Rs. 3,324.67

Lakhs in the year 2013-2014.

The average collection period have been increased by 217 days in the year 2014-

2015.

The turnover ratio have been decreased by 1.93 in the year 2014-2015.

The current asset turnover ratio have been decreased in the year 2014-2015.

CHAPTER- 7


Material Management

SUGGESTIONS AND CONCLUSION

SUGGESTIONS

By going through all the procedures followed in Tata Steel Ltd-Wire Division we can say

that the management of the inventories play a major role in the success of the

organization. As a whole the firm is following a good purchase procedure over different

materials, the company will be purchasing only certain materials from the outside of the

company for the production purposes. But there are certain content in the existing

Material Management system. Hence on the basis of the study the following suggestions

can be given. I hope that suggestions will be taken by the organization in a right spirit and

implemented.

It is found that in every production units there are A, B and C item

It is suggested to keep the materials A class items in some units, B class items in some

units, and C class items in some units so that it is very easy to identify the items in a

order wise and they can give attention towards each and every unit according to their

importance.

Method of Analysis

It is found that the company is using the ABC analysis to a large extent, hence

it is suggested to follow the different methods for classification such as

Classification Basis

VED To know the importance of critically Vital,

Essential, Desirables.

FSN To know the place at which materials

Moves (fast

Moving, slow moving, none moving)

HML To know the unit price of materials


Material Management

( high, medium, low)

SDE To know the difficulties in procurement

(Scare, difficult, easy to obtain)

Reduction in Lead time

The company must try to minimize the lead time at the time of production, so that

the company can reduce the production time so the company can meet the

customers expectations. It is suggested that the company should be adopt some

new management systems in order to communicate vendors in a short span of

time their by reducing the lead time. Hence the organization can compete at the

International market and have a better future.

CONCLUSION


Material Management

Material Management is one of the basic important functions of every business. An

average manufacturing organization in India has more than 60% of its current asset

invested in inventories. Therefore, by following proper efficient Material Management

principles, the company can certainly reduce the cost of inventory and can improve its

bottom line and thereby, becoming competitive, which in turn will improve its market

share.

The research topic Material Management has a greater implications on Indian industry,

from the analysis of Material Management in Tata Steel Ltd-Wire Division, it is very

clear that, it has achieved greater importance in production control to a large extent. It is

also enhances the arising need of the organization, in respect of Material Management.

The Material Management in Tata Steel Ltd-Wire Division, the inventories of the

company other than disposable scrap are valued at lower of cost or net realizable value.

The cost of materials is ascertained by using the weighted average cost formula.

Adequate provision is made for inventory which is more than five years old which may

not be required for further use.

Therefore Material Management acts as the “Pulse” of any organization, and will have

impact on all other activities in the organization. Though Material Management

comprises huge investment, it gives good results, when good inventory control

techniques are adopted, and thus enhances the smooth functioning in production.

This study has helped me a lot in obtaining good knowledge of Material Management in

Tata Steel Ltd-Wire Division. Hereby Material Management is an essential element in

any organization, provide it is maintained tactfully by adopting latest techniques and

utilizing best resulting from computerization.

Finally I conclude that the company is maintaining the good Material Management in

order to meet the future demands.


Material Management

BIBLIOGRAPHY

1. K.Ashwathappa and K.Shridar Bhat - Production and Operations

Management, Himalaya Publishing House.

2. TATA STEEL LTD-WIRE DIVISION Booklets.

3. Dr. Monshi and Dr. Gayithri Reddy - Research Methodology,

Himalaya Publications.

4. Broachers.

5. Company Website.

WWW.tatasteelltd.com

ANNEXURE


http://WWW.tatasteelltd.com/

Material Management

Financial Statement of TATA STEEL LTD-WIRE DIVISION.

Particulars Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of FundsTotal Share Capital 80 80 80 80 80Equity Share Capital 80 80 80 80 80Preference Share Capital 0 0 0 0 0Reserves 6,937.24 6,223.69 5,542.21 4,922.57 4,265.68Revaluation Reserves 0 0 0 0 0Net worth 7,017.24 6,303.69 5,622.21 5,002.57 4,345.68Secured Loans 12.61 19.17 14.76 0.41 0.73Unsecured Loans 0 0 0 0 0Total Debt 12.61 19.17 14.76 0.41 0.73Total Liabilities 7,029.85 6,322.86 5,636.97 5,002.98 4,346.41Application Of FundsGross Block 2,206.77 2,054.07 1,885.03 1,789.00 1,702.17Less: Accum. Depreciation 1,555.83 1,478.62 1,374.87 1,305.29 1,212.21Net Block 650.94 575.45 510.16 483.71 489.96Capital Work in Progress 196.86 161.42 113.56 58.99 31.43Investments 11.98 11.98 11.98 11.98 11.98Inventories 3,298.71 3,191.29 2,673.80 2,460.77 2,536.90Sundry Debtors 4,128.54 3,334.67 2,686.95 2,903.25 2,168.36Cash and Bank Balance 4,564.37 5,302.49 6,772.52 928.27 596.74Total Current Assets 11,991.62 11,828.45 12,133.27 6,292.29 5,302.00Loans and Advances 1,675.88 1,868.83 2,089.38 778.06 1,700.44Fixed Deposits 0 0 0 5,591.09 2,981.67Total CA, Loans & Advances 13,667.50 13,667.50 14,222.65 12,661.44 9,984.11Current Liabilities 6,897.94 7,407.10 8,632.67 7,639.52 4,476.20Provisions 599.49 716.17 588.72 573.6 1,694.88Total CL & Provisions 7,497.43 8,123.27 9,221.39 8,213.12 6,171.08Net Current Assets 6,170.07 5,574.01 5,001.26 4,448.32 3,813.03Miscellaneous Expenses 0 0 0 0 0Total Assets 7,029.85 6,322.86 5,636.96 5,003.00 4,346.40Contingent Liabilities Book Value(Rs) 773.64 787.36 1,119.72 266.69 205.77

Profit and Loss Account of TATA STEEL LTD-WIRE

DIVISION.

Particulars Mar '14 Mar '13 Mar '12 Mar '11 Mar '10


Material Management

12mths 12 mths 12 mths 12 mths 12 MthsINCOME

Sales Turnover 6,275.52 6,103.82 5,767.64 5,540.68 5,237.51Excise Duty 0 0 0 58.57 41.88

Net Sales 6,275.52 6,103.82 5,767.64 5,482.11 5,195.63Other Income 428.47 609.98 585.49 326.11 243.54

Stock Adjustments -47.33 278 89.95 5.58 28.11Total Income 6,656.66 6,991.80 6,443.08 5,813.80 5,467.28

ExpenditureRaw Materials 3,583.56 4,084.93 3,669.03 3,135.77 3,024.54

Power & Fuel Cost 37.37 34.13 26.9 30.45 27.22Employee Cost 1,030.43 1,110.79 1,081.23 1,041.86 1,009.58

Other Manufacturing Expenses 0 0 0 17.05 15.87Selling and Admin Expenses 0 0 0 260.84 240.75

Miscellaneous Expenses 685.72 509.49 465.82 61.23 62.43Preoperative Exp Capitalised 0 0 0 -0.19 -0.36

Total Expenses 5,337.08 5,739.34 5,242.98 4,547.01 4,380.03Operating Profit 891.11 642.48 614.61 940.68 843.71

PBDIT 1,319.58 1,252.46 1,200.10 1,266.79 1,087.25Interest 3.4 0.78 0.6 10.79 9.37PBDT 1,316.18 1,251.68 1,199.50 1,256.00 1,077.88

Depreciation 142.1 130.71 120.8 122.04 115.94Profit Before Tax 1,174.08 1,120.97 1,078.70 1,133.96 961.94

Extra-ordinary items 0.65 -6.37 -3.86 22.64 84.06PBT (Post Extra-ord Items) 1,174.73 1,114.60 1,074.84 1,156.60 1,046.00

Tax 243.12 224.76 244.95 295.09 324.88Reported Net Profit 931.62 889.83 829.9 861.47 720.87

Total Value Addition 1,753.51 1,654.41 1,573.94 1,411.24 1,355.50Preference Dividend 0 0 0 0 0

Equity Dividend 186.4 178.4 166.4 172.8 153.6Corporate Dividend Tax 31.68 29.95 26.99 28.22 25.7

Per share data (annualised)Shares in issue (lakhs) 800 800 800 800 800Earning Per Share (Rs) 116.45 111.23 103.74 107.68 90.11Equity Dividend (%) 233 223 208 216 192

Book Value (Rs) 877.15 787.96 702.78 625.32 543.21


Education

Material management of TATA Steel wire division