Warehouse and Inventory Management in

Gold Plus Glass Industry Limited

Summer Internship Project Report

Submitted towards Partial

Fulfillment

Of

Post Graduate Diploma in Management

Academic Session

2018-20

(Approved by AICTE, Govt. of India)

Under the Guidance of

Dr. Ajay Kr. Patel

Associate Professor

Industry Guide Submitted By

Mr. Umanath Shettigar Abhishek Tyagi

(Sr. Manager & HOD- Shipping) Batch- (2018-20)

 DECLARATION

I, undersigned, student of PGDM 4th Trimester at Jaipuria School of Business, hereby

solemnly declare that the project entitled „Warehouse and Inventory Management in Jaipuria
School of Business‟ is the outcome of my summer internship project that is prepared by me.
To the best of my knowledge, any part of this context has not been submitted earlier for any
degree, diploma or certification examination. The basic purpose of this project report was
experiencing and implementing the theoretical knowledge into practical Knowledge. This
Summer Internship Project Report is mandatory towards fulfillment of Post Graduate
Diploma in Management.

Abhishek Tyagi

(2018003)

PGDM 2018-20
 ACKNOWLEDGEMENT

This project is concluded with the support of direct and indirect cooperation of various
people, who have inspired me at every step of my work. It is a matter of pride for me to
acknowledge my profound gratitude to Gold Plus Glass Industry and Jaipuria School of
Business which facilitated me in gaining practical knowledge in the domain of Operations
and Supply Chain.

I would like to express my deep sense of gratitude to the respected guides, Mr. Umanath
Shettigar and Dr. Ajay Kr. Patel for his valuable help and guidance, I am thankful to him for
the encouragement, he has given me in completing the project.

I am also grateful to our Placement Head, Ms. Sweety Singh for giving me the opportunity to
work as an intern in Gold Plus Glass Industry.

I am also thankful to the Director, Dean, faculty & staff members of Jaipuria school of
Business for their kind co-operation and help.

Lastly, I would like to express my deep gratitude towards my classmates, friends and parents
for all support and encouragement in successfully completing the tenure of the internship.
 PREFACE

Warehouse plays a key part in ensuring that a company meets its productivity goals.
Warehouse Management adds efficiency, consistency, and quality control to the process by
helping in moving goods through the warehouse at maximum speed, improving every stage
of the fulfillment process. Proper Warehouse and Inventory Management improves efficiency
of the human resources as they have exactly what they need at the right time.

The right Warehouse and Inventory Management can improve the sales and increase profits
not simply by helping sell more, but by selling faster and more accurately to happier
customers. Furthermore, the existing workforce is able to pick and receive more items in less
time, with fewer errors. This precision reduces customer inquiries and simplifies customer
support.

Proper Warehouse and Inventory Management helps in minimizing the loss incurred because
of the breakage of finished goods. Breakage is the most important especially for an industry
which manufactures fragile items like glass sheets and mirrors. Proper Inventory management
techniques help in storing right amount of inventory at specific places so that
mismanagement can be reduced and efficiency can be increased.

Also when inventory levels increases in the warehouse it becomes really difficult to locate the
required products which affects the efficiency and increases the loading time of the vehicles.
Proper Warehouse layout and Inventory Management helps an organization to locate every
single item precisely even when there is excess inventory stored in the warehouse.

Under this study an attempt has been made to study the existing Warehouse and Inventory
Management practices of the Gold Plus Glass Industry Limited and suggest changes so that
overall operational complexity can be reduced and the above mentioned environment can be
created which would help the organization to grow continuously.
 EXECUTIVE SUMMARY

Gold plus traces back its origins to 1985, when the first group entity started trading activity of
various types of glasses. The company specializes in manufacturing, processing & trading of
glass. Gold Plus Glass is the first 100% Indian owned company to manufacturing float glass
in country. Company has been awarded the ISO 901:2008 certification for its operations.
Existing Product Line of Gold Plus Includes Float Glass, Mirror, Frosted Glass, Clear
Reflective Glass, Architectural processed glass, Auto processed glass and lacquered glass.
Having such a wide range of inventory, Warehousing is the backbone of this industry. This
study depicts to identify the weak areas in the Warehouse Operations and suggest the
corrective measures so that high level of efficiency can be achieved.

This project is related to the descriptive research methodology. Secondary data source
method is used to collect the data from different departments and to analyze the problem
areas within the warehouse and further suggest the corrective measures.

Analyses are based on various models such as ABC and EOQ analysis. Using an ABC
analysis lets you prioritize your inventory management by separating out products that
require a lot of attention from those that don‟t. Do this by going through your product list and
adding each product to one of three categories. Items in category A require regular attention
because their financial impact is significant but sales are unpredictable. Items in category C
require less oversight because they have a smaller financial impact and they're constantly
turning over. Items in category B fall somewhere in-between. On the other hand Economic
Order Quantity technique focuses on taking a decision regarding how much quantity of
inventory should the company keep at any point of time and when should they add more.

The time period was not enough to conduct in depth study on the topic that was the biggest
limitation in the study.
 SUMMARY OF THE REPORT

The report subsumes various chapters that begin from a brief introduction of the report to the
key findings of the analysis of the project. This summary encompasses an overview for the
report which would enable the reader a better understanding and provide a deep yet brief
insight into the report. Following is the brief succinct of the chapters written.

Chapter-1 Introduction

This chapter serves as the introduction part of this research, which addresses the core value of
the research. Here, the overview of the company‟s profile, history of the company, products,
market area, customers and competitors will be discussed in a well manner. This chapter also
covers the meaning and advantages of the glass industry and sales concept in Gold Plus.
Along with a brief introduction the problem statement is included which in simpler words is
the research problem, which would give the reader a better perspective to the problems and
its reciprocating areas. Objective of the study is a necessity to the report as it gives a surface
area for the work done. Scope of the study is further included to enable the readers for any
future probability relating to the title of the study and it also gives an insight into how the
study can be used in the unforeseen.

Chapter-2 Literature Review

This chapter incorporates the various researches and studies on the topic related to online
education, and its relation to job satisfaction and the productivity of the employees. This
chapter would help the reader in developing a deep study into the history of the topic which
would further help him to gain a better perspective to what the research holds. Researches
and studies include topics such as definition of Warehouse and Inventory Management.

Chapter-3 Research Methodology

This chapter illustrates the research methodology explored in the present study. This chapter
also presents the research problem, sampling, sample size, data collection, and statistical
tools. Furthermore, the other section mentions the sources of the research data. It also
describes the data collection methods of the research. Next, sampling, design and technique
that using in the research showed. This project is based on the descriptive research which
explains the different warehousing management techniques.

Chapter-4 Data Analysis

This chapter describes the analysis of the data collected by from the warehouse and results of
various analyses such as ABC analysis and EOQ which will help the organization in efficient
functioning and manage its recourses properly.

Chapter-5 Conclusion

This last chapter depicts the key findings of the research. On the basis of the above chapter,
the results and conclusions have been derived. This chapter also includes the suggestions and
recommendations for the company and also discusses the limitations of the study.
 CHAPTER 1

INTRODUCTION
1. GOLD PLUS GLASS INDUSTRY LIMITED
 Gold plus traces back its origins to 1985, when the first group entity started trading
activity of various types of glasses.
 The company specializes in manufacturing, processing & trading of glass.
 Gold plus Glass is the first 100% Indian owned company to manufacturing float glass
in country.
 Company has been awarded the ISO 901:2008 certification for its operations.

1.2 PLANTS
 Gold Plus Glass has 1 float glass manufacturing unit (capacity 470 MT/Day in Line 1
and 700 MT/Day in Line 2) at Roorkee in Uttarakhand.
 Company also has 2 processing units - One in Sonipat (Haryana) and one in Kala
Amb (Himachal Pradesh)

1.3 PRODUCT LINE

 Existing Product Line of Gold Plus Includes:
 Float Glass,
 Mirror,
 Frosted Glass,
 Clear Reflective Glass,
 Architectural processed glass,
 Auto processed glass and lacquered glass.

1.4 MISSION AND VISION

 We shall achieve this through our continuous efforts to:
 Do our best to meet and exceed our customer‟s expectations.
 Do our best to meet and exceed our customer‟s expectations.
 Provide quality product to our customers on time, every time.
 Adopt latest technologies from around the world to upgrade our quality.
 Make gold plus a learning organization through continuous training.
  Create an environmentally safe and vibrant working culture.
 Increase our profitability through reduction in failure costs.

1.5 MANAGEMENT
1.5.1 MR. SUBHAS TYAGI
 Established the foundation of Gold Plus in 1985.
 Promoter Director of the Company.
 Chief Mentor and is involved in strategic planning/growth.
 Recipient of various awards and recognition from Government for his social
contributions.
 Founder Member of Federation of Safety Glass in India (FOSG).
 Was the President of All India Glass Manufacturers Federation from April 2013 to
March 2014
1.5.2 MR. SURESH TYAGI
 Promoter Director of the Company.
 Actively associated with the Company since incorporation.
 Vast knowledge & experience in execution of projects in various states from land
acquisition to commercial production of the plant.
1.5.3 MR. JIMMY TYAGI
 Completed MBA from SP Jain University (Dubai) – Finance & Marketing
 Joined the Company in 2006.
 Involved in setting-up and running of Float glass plant at Roorkee
1.5.4 MR VIVEK DUBEY
 Done graduation in Electronics from Delhi University and MBA from FMS -
Marketing.
 Associated with the group for the past 16 years.
 Marketing Director – Responsible for driving sales & marketing function across India
& overseas.
1.5.5 MR MAHESWAR SAHU
 Retired as an Additional Chief Secretary to the Government of Gujarat where he was
responsible for overall industrial development of state of Gujarat.
 Had held very significant positions in his career including the Joint Secretary to the
Government of India, Ministry of Communication & IT. He was the Chairman of
Gujarat State Finance Services Limited, Gujarat Industrial Development Corporation,
Gujarat Mineral Development Corporation Limited and Gujarat Industrial Corridor
Development Corporation Limited.
 Has more than 20 years of experience in industrial sector, 10 years in PSU
management and 10 years in service industry as Joint Secretary.
 Presently he is on the Board of GVFL Limited, GVFL Advisory Services Private
Limited and Heubach Colour Private Limited.
1.5.6 NEHA TYAGI
 BE in Electronics from Punjab Technical University and PGDM from IMT.
 Headed the IT Department of the Company.
 Successfully implemented ORACLE A in the Company.
 Inducted as Women Director in the Company.

1.6 PRODUCTION FACILITIES

 381,000 Sq. Metres. Area for Float Glass Manufacturing Plant at Roorkee.
 27,000 Sq. metres. Area in Himachal Pradesh for processing of Toughened,
Laminated & Insulated Glass.
 10,500 Sq. metres. Area in Sonipat for Toughened, Laminated and Insulated Glass.

1.7 Features of Existing Float Glass Manufacturing Plant Roorkee :

 GPGIL has its existing float glass manufacturing plant in a tax-free zone in Roorkee,
Uttarakhand.
 The plant was started in 2009
 The products which are manufactured include: Float Glass (Thickness 2mm to
12mm), Mirror glass, Clear Reflective glass, frosted glass and lacquered glass.
  Plant has a Float Glass Production capacity of 470 MT/Day in Line 1 and 700
MT/Day in Line 2.
 GPGIL also has a mirror Coating line with an installed capacity of 12,000 sq.
Mtrs/Day.

1.8 KEY MILESTONES

1985- Started trading activity in various glasses.

1996- Commission of first vertical automotive glass toughening plant under brand name
“GOLD PLUS”.

1997- Installation and commissioning of insulating glass line with technology from Peter
Lisex, Austria.

1999- Commissioning of fourth vertical automotive glass toughening plant.

2000- Commencement of manufacturing of architect curing and flat automotive toughened

glass with technological assistance from Finland, Austria and Italy.

2003- Installation and Commissioning of laminating line with technological assistance from
China for manufacturing of flat and bend laminating glasses.

2005- Started operations in Himachal Pradesh with technology assistance from China and
Italy.

2009- Installation and commissioning of fully Automatic insulating Line with technology
assistance from Korea for manufacturing of energy proof glass and started production of
Float Glass.

2010- Commissioning of Mirror Coating Line and Float Glass Production Capacity Increased
to 470 MT/Day also started production of Reflective Glass and Frosted Glass.

2012- Launch of Lacquered glass & Colored Safety glass.

1.9 SWOT ANALYSIS
1.9.1 STRENGTHS
 High entry cost to set up a float glass industry prevents large number of players
entering.
 Demand in infrastructure projects and buildings.
 Demand in Automotive Segments (More people having cars).
 Recyclability of the waste up to 90%.
1.9.2 WEAKNESS
 Poor Supply Chain as chances of breakage is high.
 Shipping cost is very high.
 Large number of breakage claims gets received.
 Weak presence over web, print media and social media.
 Weak presence in neighbouring countries.
1.9.3 OPPORTUNITY
 Large untapped markets offer a huge potential.
 Automobile and real estate sector growing very fast would help glass sector to grow.
 Access to financial market to raise money through debt.
1.9.4 THREATS
 Slowdown in Infrastructure and Automotive sectors affects demand.
 Price war among players.
 Tough competition from MNC‟s.
 Cheap imports of glass from outside countries.
1.10 PORTER FIVE FORCES ON GOLD PLUS GLASS INDUSTRY LTD.

Porter Five Forces is a holistic strategy framework that took strategic decision away from just
analyzing the present competition. Porter Five Forces focuses on - how Gold Plus Glass
Industry Ltd. can build a sustainable competitive advantage in Materials industry. Managers
at Gold Plus Glass Industry Ltd. can not only use Porter Five Forces to develop a strategic
position with in Materials industry but also can explore profitable opportunities in whole
Materials sector.

Gold Plus Glass Industry Ltd. Porter Five (5) Forces Analysis for Materials Industry

1.10.1 Threats of New Entrants

New entrants in Materials brings innovation, new ways of doing things and put pressure
on Gold Plus Glass Industry Ltd. through lower pricing strategy, reducing costs, and
providing new value propositions to the customers. Gold Plus Glass Industry Ltd. has to
manage all these challenges and build effective barriers to safeguard its competitive edge.

How Gold Plus Glass Industry Ltd. can tackle the Threats of New Entrants

 By innovating new products and services. New products not only bring new
customers to the fold but also give old customer a reason to buy Gold Plus Glass
Industry Ltd.‟s products.
 By building economies of scale so that it can lower the fixed cost per unit.
 Building capacities and spending money on research and development. New entrants
are less likely to enter a dynamic industry where the established players such as Gold
Plus Glass Industry Ltd. keep defining the standards regularly. It significantly reduces
the window of extraordinary profits for the new firms thus discourage new players in
the industry.
1.10.2 Bargaining Power of Suppliers

All most all the companies in the Materials industry buy their raw material from
numerous suppliers. Suppliers in dominant position can decrease the margins Gold Plus
Glass Industry Ltd. can earn in the market. Powerful suppliers in Materials sector use
their negotiating power to extract higher prices from the firms in Materials field. The
overall impact of higher supplier bargaining power is that it lowers the overall
profitability of Materials.
How Gold Plus Glass Industry Ltd. can tackle Bargaining Power of the Suppliers

 By building efficient supply chain with multiple suppliers.

 By experimenting with product designs using different materials so that if the prices
go up of one raw material then company can shift to another.
 Developing dedicated suppliers whose business depends upon the firm. One of the
lessons Gold Plus Glass Industry Ltd. can learn from Wal-Mart and Nike is how these
companies developed third party manufacturers whose business solely depends on
them thus creating a scenario where these third party manufacturers have significantly
less bargaining power compare to Wal-Mart and Nike.
1.10.3 Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying
the minimum price as possible. This put pressure on Gold Plus Glass Industry Ltd.
profitability in the long run. The smaller and more powerful the customer base is of Gold
Plus Glass Industry Ltd. the higher the bargaining power of the customers and higher
their ability to seek increasing discounts and offers.

How Gold Plus Glass Industry Ltd. can tackle the Bargaining Power of Buyers

 By building a large base of customers. This will be helpful in two ways. It will reduce
the bargaining power of the buyers plus it will provide an opportunity to the firm to
streamline its sales and production process.
 By rapidly innovating new products. Customers often seek discounts and offerings on
established products so if Gold Plus Glass Industry Ltd. keep on coming up with new
products then it can limit the bargaining power of buyers.
 New products will also reduce the defection of existing customers of Gold Plus Glass
Industry Ltd. to its competitors.
1.10.4 Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example services like Dropbox and Google Drive are substitute
to storage hardware drives. The threat of a substitute product or service is high if it offers
a value proposition that is uniquely different from present offerings of the industry.

How Gold Plus Glass Industry Ltd. can tackle the Treat of Substitute Products /
Services
  By being service oriented rather than just product oriented.
 By understanding the core need of the customer rather than what the customer is
buying.
 By increasing the switching cost for the customers.
1.10.5 Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down
prices and decrease the overall profitability of the industry. Gold Plus Glass Industry Ltd.
operates in a very competitive Materials industry. This competition does take toll on the
overall long term profitability of the organization.

How Gold Plus Glass Industry Ltd. can tackle Intense Rivalry among the Existing
Competitors in Materials industry

 By building a sustainable differentiation

 By building scale so that it can compete better
 Collaborating with competitors to increase the market size rather than just
competing for small market.
1.11 MARKETING MIX

Neil Borden in the year 1953 introduced the term Marketing mix, an extension of the work
done by one of his associates James Culliton in 1948.

A mixture of several ideas and plans followed by a marketing representative to promote a

particular product or brand is called marketing mix. Several concepts and ideas combined
together to formulate final strategies helpful in making a brand popular amongst the masses
form marketing mix.

1.11.1 Product
 Goods manufactured by organizations for the end-users are called products.
 Products can be of two types - Tangible Product and Intangible Product (Services)
 An individual can see, touch and feel tangible products as compared to intangible
products.
 A product in a market place is something which a seller sells to the buyers in
exchange of money.
1.11.2 Price
 The money which a buyer pays for a product is called as price of the product. The
price of a product is indirectly proportional to its availability in the market. Lesser its
availability, more would be its price and vice a versa.
 Retail stores which stock unique products (not available at any other store) quote a
higher price from the buyers.
1.11.3 Place
 Place refers to the location where the products are available and can be sold or
purchased. Buyers can purchase products either from physical markets or from
virtual markets. In a physical market, buyers and sellers can physically meet and
interact with each other whereas in a virtual market buyers and sellers meet
through internet.
1.11.4 Promotion
 Promotion refers to the various strategies and ideas implemented by the marketers
to make the end - users aware of their brand. Promotion includes various
techniques employed to promote and make a brand popular amongst the masses.
1.12 ANALYSES OF THE MARKETING MIX OF GOLD PLUS GLASS INDUSTRY

1.12.1 Product

Gold Plus Glass Industry deals in the manufacturing of a wide range of float glasses which
includes Clear Glass, Frosted Glass, Mirror, Reflective Glass, Dusk Grey Glass and
Lacquered Glass.

1.12.2 Place

Gold Plus Glass Industry involves in selling in products with India and has reach in almost
every state. Some of the major states within India are

 UP
 Bihar
 Punjab
 Assam
 Uttarakhand
 Himachal Pradesh
 Tamil Nadu
 Andhra Pradesh
 Maharashtra
 Haryana
 Jammu and Kashmir etc.

Whereas the only country where Gold Plus Glass Industry has its reach outside India is
Nepal.

1.12.3 Price

Generally the company follows a Competitive Based Pricing and Mark-up Pricing. Example
of some SKU of Gold Plus-

 Clear Glass Branded, 2.5mm to 6mm ( Rupees 52 to Rupees 56)

 Clear Glass Unbranded, 2.5mm to 6mm (Rupees 49 to Rupees 53)
 Clear Glass Branded, 8mm to 12mm (Rupees 55 to Rupees 59)
 Clear Glass Unbranded, 8mm to 12mm (Rupees 52 to Rupees 56)
 Mirror Branded, 2.5mm to 5mm (Rupees 87 to Rupees 90)
1.12.4 Promotion

Promotions refer to the entire set of activities, which communicate the product, brand or
service to the user. The idea is to make people aware, attract and induce to buy the product, in
preference over others. Gold Plus Glass industry involves in Direct Selling and Promotional
Strategies that Gold Plus Glass Industry follows are Discounts, Schemes and Incentives for
the Dealers.
1.12 COMPETITORS OF GOLD PLUS GLASS INDUSTRY LIMITED

1.13.1 Asahi India Glass

Established in 1984 by BM Labroo, Asahi India is one of the largest glass companies in India
with a market capitalization of nearly Rs. 3306.02 Crore. Primarily famous for automobile
glass owing to a massive 77% share in the Indian automobile glass market, Asahi is also
popular for its Architectural Glass and Solar Glass variants as well. Set up as a joint venture
between Labroo family and Maruti Suzuki India, Asahi also boasts of India‟s first and largest
automotive repair & replacement network with 49 specialist centers spread across 28 cities in
India.

1.13.2 La Opala RG Limited

Founded by Mr Sushil Jhunjhunwala in the year 1986, La Opala is currently is India‟s

number tableware brand. Headquartered in Kolkata, Bengal, La Opala has become one of the
leading companies in glass manufacturing through its various popular brands like La Opala
RG, La Opala, Diva from La Opala and solitaire and offers an exquisite range of decorative
and handcrafted glasses and plates.

1.13.3 Borosil Glass Works Limited

One of the leading laboratory goods manufacturers in the nation, Borosil was founded by PK
Kheruka in the year 1962 and is based out of Mumbai. With over 50 years of hardcore
experience and presence in the glass industry, they have a market capitalization of Rs 480.96
Crore and are known for their Low Iron Solar Glass, Scientific and Industrial glass variants.

1.13.4 Saint-Gobain Sekurit India Pvt Ltd

With over 350 years of heritage behind Saint-Gobain, this is easily one of the most popular
glass companies across the globe. With a core business comprising mainly of Float Glass,
Automotive glass and Glass containers, this company has a worldwide presence in 67
countries and established it‟s presence in India way back in the year 1996. In 1997 it acquired
a majority stake in Sekurit India Pvt Ltd and is now known as Saint-Gobain Sekurit India Pvt
Ltd.
1.14 PROBLEM STATEMENT

Warehousing and Inventory control is also important to maintaining the right balance of stock
in the warehouses of the company. No company would like to lose a sale because they didn‟t
have enough inventories to fill an order. Constant inventory issues (frequent backorders, etc.)
can drive customers to other suppliers entirely. Complete control over your inventory leads to
provide better customer service. It will also help companies to get a better, more real-time
understanding of what‟s selling and what isn‟t. Excess inventory in the warehouses takes up
unnecessary space. Too much inventory can trigger profit losses whether a product expires,
gets damaged, or goes out of season. Key to proper inventory control is a deeper
understanding of customer demand for the products.

1.15 OBJECTIVES

This study depicts to study the existing Warehouse and Inventory Management system of
Gold Plus Glass Industry Limited and suggest the necessary changes so that the system can
get much more efficient.

 To improve the inventory management within the warehouse and suggest changes.
 To reduce the loading time of the vehicles.
 Reduce the variance between location shown by system and physical location of the
inventory.
 To suggest the measures for the reduction of warehouse and transit breakage.

1.16 SCOPE OF THE STUDY

The direction or method a company chose for inventory and warehouse management will all
depend upon the nature of the business and the essentials that must be fulfilled. The bottom
line is that inventory control is vital to the survival of any business. If one don‟t have a good
handle on your inventory it becomes really hard to have a true account for how business is
doing. It‟s a competitive market out there and inventory excess or shortages become can
become reason of downfall.

As Gold Plus Glass Industry deals in Float Glass Manufacturing proper Warehousing and
Inventory Management becomes crucial because of the nature of finished goods. Under this
study attempts have been made to suggest some corrective measures in Inventory
management using ABC analysis and descriptive statistics.
ABC Analysis is a comprehensive way of segmenting the customers or products to make sure
that one get the most out of its time and your resources when servicing them by breaking the
items down into three easily distinguishable categories. ABC analysis is based on what is
called the Pareto Principle, an economic principle created by the economist Vilfredo Pareto.
Pareto gained notoriety for saying that most economic productivity comes from only a small
part of the economy. Essentially, it shows that there is an unequal relationship between your
input and your output.

ABC analysis is a method of analysis that divides the subject up into three categories: A, B
and C.

Category A represents the most valuable products or customers that a company have. These
are the products that contribute heavily to the overall profit without eating up too much of the
resources. This category will be the smallest category reserved exclusively for the biggest
money makers.

For example, a software company might engineer different pieces of software, but one is a
niche software that can be sold at a significantly higher price than the others. That‟s why it
accounts for about 60% of the overall revenue, although the company sells far less of these
products compared to other software categories. Hence, this specific software is a category A
product.

Category B represents your middle of the road customers or products. Many wrongly
approach this group as those who contribute to the bottom line but aren‟t significant enough
to receive a lot of attention.

Yet, category B is all about potential. The members of this category can, with some
encouragement, be developed into category A items.

Category C is all about the hundreds of tiny transactions that are essential for profit but don‟t
individually contribute much value to the company. This is the category where most of the
products or customers will live. It is also the category where one must try to automate sales as
much as possible to drive down overhead costs.
 CHAPTER-2

LITERATURE REVIEW
2. INTRODUCTION

The present paper focuses on the review of existing literature in the field of Inventory
Management which helps in capturing both conceptual and research based studies. A number
of studies have been conducted to find the determinants of investment in inventories and the
process is still going on. The present study is the summary of critical points of a particular
topic consisting of essential findings as well as theoretical and methodological contributions.
My paper shall discuss conceptual studies of both Indian and other nationals.

2.1 Abramovitz and Modigliani (1957)

They highlighted the relationship between capacity utilization and inventory investment.
Existing stock of inventories was expected to adjust to the desired levels. Thus the variable,
existing stock of inventories, was essential to be negatively related with the desired stock.
The result was that there is positive relation among the ratio of inventory to sales and
inventory investment. High ratio of stocks to sales in the past suggests requirement of high
levels of inventories in the past and promising high investment in inventories in the current
period also.

2.2 Krishna Murthy (1964)

Study was aggregative and dealt with inventories in the private sector of Indian economy as a
whole for the period 1948-61. This study used sales to represent demand for the product and
suggested the importance of accelerator. Shortterm rate of interest had also been found to be
significant.

2.3 R.S. Chadda (1964)

Study had been made on inventory management practices of Indian companies. The analysis
suggested application of modern scientific inventory control techniques like operations
research. These modern scientific techniques furnish opportunities for the companies,
Companies can minimize their investment in inventory but there is continuous flow of
production. He argued that industrially advanced countries, like, USA, were engaged in
developing highly sophisticated mathematical models and techniques for modernizing and
redefining the existing tools of inventory investment.
2.4 National Council of Applied Economic Research (NCAER) (1966)

Conducted a study in 1966 regarding working capital management of three industries namely
cement, fertilizer and sugar. This study mainly devoted to ratio analysis of composition,
utilization and financing of working capital for the period of 1959 to 1963. The study reveals
that inventory constituted a major portion of working capital i.e. 74.06 per cent in the sugar
industry followed by cement industry (63.1%) and fertilizer industry (59.58%). It was
observed that inventory had not managed properly. So far as the utilization of working capital
was concerned, cement and fertilizer industry had better implementation of working capital.
The sugar industry had huge accumulation of stocks so there was inefficient utilization of
working capital heavily.

2.5 Krishnamurty and Sastry (1970)

It is the most comprehensive study on manufacturers‟ inventories. They used the CMI data
and the consolidated balance sheet data of public limited companies published by the RBI, in
order to analyse each of the major components, like the raw materials, goods-in-process and
finished goods, for 21 industries over the period ranging from 1946-62. The study was a time
series one although there were some inter-industry cross-section analyses that were carried
out in the analysis. The Accelerator represented by change in sales, bank finance and short-
term interest rate was found to be an important determinant. The utilisation of productive
capacity and price anticipations was also found to be relevant in the study.

2.6 George (1972)

It was the study on cross section analysis of balance sheet data of 52 public limited
companies for the period of 1967- 70. Accelerator, internal and external finance variables
were considered in the formulation of equations for raw materials including goods-in-process
inventories. However, equations for finished goods inventories conceive only output variable.
Deliberation was given on accelerator and external finance variables.

2.7 Mishra (1975)

It is the study of six major public sector enterprises. He concluded that (i) inventory
constitutes the most important component of working capital of public enterprises (ii)
efficiency of working capital funds employed in receivables is terribly low in the selected
enterprises and (iii) In all units both the current assets and the quick ratios are greater than
their standards. Enterprises need proper control on receivables.

2.8 Lambrix and Singhvi (1979)

Adopted working capital cycle approach in working capital management, also suggested that
investment in working capital can be optimized and cash flows can be improved by reducing
the time frame of physical flow starting from the receipt of raw material to the shipment of
finished goods, i.e. inventory management, and by improving the terms and conditions on
which firm sells goods as well as receipt of cash

2.9 Lal (1981)

He studied Modi Steels Limited as a case study, his study focused on inventory management.
He originated a model which involve price variable in inventory management; earlier price
variable in inventory was not considered in that company. The analysis recommended solid
policies, which would look after internal and external factors, ultimately it would help in
bringing in efficient working capital management.

2.10 Farzaneh (1997)

Presented a mathematical model, to assist the companies in their decision to switch from
EOQ to JIT purchasing policy. He defines JIT as “to produce and deliver finished goods just
in time to be sold, sub-assemblies just in time to be assembled in goods and purchased
material just in time to be transformed into fabricated parts”. He highlights that the EOQ
model focuses on minimizing the inventory costs rather than minimizing the inventory.
Under the ideal condition where all the conditions meet, it is economically better off to
choose the JIT over the EOQ because it results in purchase price, ordering cost.

2.11 Rich Lavely (1998)

Asserts that inventory means “Piles of Money” on the shelf and the profit for the firm.
However, he notices that 30% of the inventory of most retail shops is dead. Therefore, he
argues that the inventory control is facilitate the shop operations by reducing rack time and
thus increases profit. He also elaborates the two types of inventory calculations that
determine the inventory level required for profitability. The two calculations are “cost to
order” and “cost to keep”. Finally, he proposes seven steps to inventory control.
2.12 Dave Piasecki (2001)

He focused on inventory model for calculating the optimal order quantity that used the
Economic Order Quantity method. He points out that many companies are not using EOQ
model because of poor results resulted from inaccurate data input. He says that EOQ is an
accounting formula that determines the point at which the combination of order costs and
inventory costs are the least. He highlights that EOQ method would not conflict with the JIT
approach. He further elaborates the EOQ formula that includes the parameters such as annual
usage in unit, order cost and carrying cost. Finally, he proposes several steps to follow in
implementing the EOQ model. The limitation of this literature is that it does not elaborate
further relationship between EOQ and JIT. It does not associate the inventory turns with the
EOQ formula and fails to mention the profit gain with the quantity is calculated.

2.13 Gaur, Fisher and Raman (2005)

In their study examined firm-level inventory behaviour among retailing companies. They
took a sample of 311 public-listed retail firms for the years 1987–2000 to examine the
relationship of inventory turnover with gross margin, capital intensity and sales surprise.
They observed that inventory turnover for retailing firms was positively related to capital
intensity and sales surprise while inversely associated with gross margins. They also
suggested models that yield an alternative metric of inventory productivity, adjusted
inventory turnover that can be used in study of performance analysis and managerial
decision-making. S. Singh (2006) Analysed the inventory control practices of single fertilizer
company named IFFCO. He statistically examined the inventory system with consumption,
sales and other variables along with growth of these variables and inventory patterns. He
concluded that an increase in components of inventory lead to an increase in the proportion of
inventory in current assets. A special focus was made on stores and spares in order to
calculate excess purchases resulting in loss of profit.

2.14 Pradeep singh (2008)

In his study made an attempt to examine the inventory and working capital management of
Indian Farmers Fertilizer Cooperative Limited (IFFCO) and National Fertilizer Limited
(NFL). He concluded that the overall position of the working capital of IFFCO and NFL is
satisfactory. But there is a need for improvement in inventory in case of IFFCO. However
inventory was not properly utilized and maintained bay IFFCO during study period. The
management of NFL must try to properly utilize the inventory and try to maintain the
inventory as per the requirements. So that liquidity will not interrupt.

2.15 Capkun, Hameri and Weiss (2009)

Statistically analysed the relationship between inventory performance and financial

performance in manufacturing companies using the financial information of a large sample of
US-based manufacturing firms over a 26-year period, that is, 1980 to 2005. They inferred that
a significant relationship existed between inventory performance along with the performance
of its components and profitability. Raw material inventory performance was highly
correlated to gross profit and operating profit. Work in progress inventory was highly
correlated to gross profit measures while finished goods inventory performance was more
correlated with operating profit measures.

2.16 Gaur and Bhattacharya (2011)

Attempted to study the linkage between the performance of the components of inventory such
as raw material, work in progress and finished goods and financial performance of Indian
manufacturing firms. The study revealed that finished goods inventory as inversely associated
with business performance while raw material inventory and work in progress did not have
much effect on same. They emphasized that instead of focusing on total inventory, an attempt
should be made to concentrate on individual components of inventory so as to adequately
manage the same. They concluded that managers not paying heed to inventory performance
may become weak in combating competitors.

2.17 Eneje et al (2012)

Investigated the effects of raw materials inventory management on the profitability of

brewery firms in Nigeria using a cross sectional data from 1989 to 2008 which was gathered
for the analysis from the annual reports of the sampled brewery firms. Measures of
profitability were examined and related to proxies for raw materials inventory management
by brewers. The Ordinary Least Squares (OLS) stated in the form of a multiple regression
model was applied in the analysis. The study revealed that the local variable raw materials
inventory management designed to capture the effect of efficient management of raw material
inventory by a company on its profitability is significantly strong and positive and influences
the profitability of the brewery firms in Nigeria. They concluded that efficient management
of raw material inventory is a major factor to be contained with by Nigerian brewers in
enhancing or boosting their profitability.

2.18 Nyabwanga and Ojera (2012)

They highlighted the association between inventory management practices and business
performance of small-scale enterprises (SSEs), in Kisii Municipality, Kisii County, Kenya.
They used a cross-sectional survey study based on a small sample size of 79 SSEs. The study
inferred that inventory comprised the maximum portion of working capital, and improper
management of working capital was one of the major reasons of SSE failures. The empirical
results disclosed that a positive significant relationship existed between business performance
and inventory management practices with inventory budgeting having the maximum
influence on business performance ensued by shelf-space management. The study suggested
that by following effective inventory management practices business performance can be
enhanced.

2.19 Sahari, Tinggi and Kadri (2012)

Empirically analysed the relationship between inventory management and firm performance
along with capital intensity. For the purpose they took a sample of 82 construction firms in
Malaysia for the period 2006–2010. Using the regression and correlation analysis methods,
they deduced that inventory management is positively correlated with firm performance. In
addition, the results indicate that there is a positive link between inventory management and
capital intensity. Soni (2012) Made an in depth study of practices followed in regard to
inventory management in the engineering goods industry in Punjab. The analysis used a
sample of 11 companies for a period five years, that is, 2004–2009 and was done using panel
data set. The adequate and timely flow of inventory determines the success of an industry.
She concluded that size of inventory enhanced marginally over the period as compared to a
hike in current assets and net working capital. Inventories constituted half of the working
capital which was due to overstocking of inventory as a result of low inventory turnover
especially for finished goods and raw materials. Rise in sales and favourable market
conditions lead to a rise in inventory levels. It was also inferred that sales increased more as
compared to inventory.
2.20 Lwiki et al (2013)

A survey conducted on all the eight (8) sugar manufacturing firms in Kenya established that
there is generally positive correlation between each of inventory management practices.
Specific performance indicators were proved to depend on the level of inventory management
practices. They established that Return on Equity had a strong correlation with lean inventory
system and strategic supplier partnerships. As such, they concluded that the performance of
sugar firms could therefore be stated as being a function of their inventory management
practices. Panigrahi (2013) undertook an in-depth study of inventory management practices
followed by Indian cement companies and its effect on working capital efficiency. The study
also investigated the relationship between profitability and inventory conversion days. The
study, using a sample of the top five cement companies of India over a period of 10 years
from 2001 to 2010, concluded that a considerable inverse linear relationship existed between
inventory conversion period and profitability.

2.21 Madishetti and Kibona (2013)

Found that a well-designed and executed inventory management contributes positively to a

small or medium-sized enterprises (SMEs) profitability. They studied the association between
inventory conversion period and profitability and the impact of inventory management on
SMEs profitability. They took a sample of 26 Tanzanian SMEs, and used the data from
financial statements for the period 2006–2011. Regression analysis was adopted to determine
the impact of inventory conversion period over gross operating profit. The results cleared out
that significant negative linear relationship occurred between inventory conversion period
and profitability.

2.22 Srinivas Rao Kasisomayajula(2014)

An analytical study was conducted on” Inventory Management in Commercial Vehicle

Industry In India”. A sample of five companies‟ was selected for study. The study concluded
that all the units in the commercial vehicle industry have significant relationship between
Inventory and Sales. Proper management of inventory is important to maintain and improve
the health of an organization. Efficient management of inventories will improve the
profitability of the organization. Edwin Sitienei and Florence Memba(2015) Conducted a
study on Effect of Inventory Management on profitability of Cement Manufacturing
Companies in Kenya
 CHAPTER-3

RESEARCH METHODOLOGY
3. INTRODUCTION

Research in fact is about collecting information that tells us about something and it helps us
make informed decisions. In other words, it is a way of gathering data or information which
we then organize in a coherent way, so that we can act or use it. A basic research method is a
more formal way of going about asking questions. We usually begin with something very
specific we want to know. Then we ask the question or questions in a structured way. This
structure is called a methodology. Knowledge of research methodology is useful in terms
being able to apply the proper method to a certain project.

3.1 THE STUDY

A descriptive statistic is a summary statistic that quantitatively describes or summarizes

features of a collection of information. It refers to the usage of graphs, table or numerical
calculations to summarize and present the data in an efficient manner. It is used to analyses
and represents the data that have been previously collected. Descriptive research gives
meaning to the quality and standing of facts. It is something more and beyond data gathering.
It involves collection of data to answer questions concerning the current status of the subject
of the study. Descriptive statistics is used to describe the basic features of the data in this
study. They provide simple summaries about the sample and the measures. Together with
simple graphics analysis, they form the basis of quantitative analysis of data. Descriptive
research seeks to describe the current status of an identified variable. It involves gathering
data which first describes events and then organizes, tabulates, depicts and describe the data
collection. It provides essential facts and understanding which contributes in the
establishment of standard norms of conduct, behavior or performance. It also helps in 37
determining the perception of product characteristics. It also helps in determining the degree
to which marketing variables are associated It also provides basis for decision making.
Descriptive research is qualitative research since it describes characteristics of relevant
groups such as consumers, salespersons, competitors and market areas. It is also a
quantitative research which estimates population parameters and establishes relationship
between variables
3.2 SAMPLE

In statistics and quantitative research methodology, a data sample is a set of data collected
and the world selected from a statistical population by a defined procedure. The elements of a
sample are known as sample points, sampling units or observations.

3.2.1 SAMPLING METHOD

Sampling is a process used in statistical analysis in which a predetermined number of

observations are taken from a larger population. This methodology is used to sample from a
larger population depends on the type of analysis being performed but may include simple
random sampling or systematic sampling in this study. This method is used to get a small
number of items or parts of larger population to make a conclusion about the whole problem.

Random sampling is used in this research. In statistics, a simple random sample is a subset of
individuals (a sample) chosen from a larger set (a population). The principle of simple
random sampling is that every object has the same probability of being chosen. In this
technique, each member of the population has an equal chance of being selected as subject.

Random sampling is the best method of selecting your sample from the population of interest.
It is one of several methods statisticians and researchers use to extract a sample from a larger
population. Two advantages of sampling are that the cost is lower and data collection 36 is
faster than measuring the entire population. Another advantage of a simple random sample
includes its ease of use and its accurate representation of the larger population. Random
sampling eliminates bias by giving all individuals an equal chance to be chosen.

A simple random sampling approach gives each element an equal and independent chance of
being selected. The population of this research is widely open to all the top level, middle
level and lower level management. These people are employees from marketing, financial,
human resources, technical and etc. People who are selected also will be from low-level
position to high-level position.

In a simple random sample (SRS) of a given size, all such subsets of the frame are given an
equal probability. Each element of the frame thus has an equal probability of selection.
Furthermore, any given pair of elements has the same chance of selection as any other such
pair (and similarly for triples, and so on). This minimizes bias and simplifies analysis of
results. In particular, the variance between individual results within the sample is a good
indicator of variance in the overall population, which makes it relatively easy to estimate the
accuracy of results.

3.2.2 SAMPLING UNIT

The term sampling unit refers to a singular value within a sample database. Sampling units
are taken from an entire population, such as a country, customer database or region, and put
into a smaller group to form a research sample. This group of units is then used to research,
analyse and draw conclusions on. As we are taking sales of last six months as sample, Glass
boxes will be taken as sample unit.

3.2.3 SAMPLE SIZE

Sales of last six months is taken as sample size and used for the analysis.

3.3 TOOLS FOR DATA COLLECTION

 Some data has also been collected from departments like Marketing, Shipping and
Warehouse from the integrated ERP used by the company.
 The data has been gathered through interaction and discussions with the executives
and managers working in the division.

3.4 TOOLS FOR DATA ANALYSIS

Collected data have been cleaned, edited, and re-arranged for analysis and drawing a
conclusion. Microsoft Excel has been used for preparing tables; for calculation and for
constructing pie charts and graphs used. Microsoft Word has been used for preparing the
report.
 CHAPTER-4

RESULTS AND INTERPRETATION

4. WAREHOUSING AT GOLD PLUS GLASS INDUSTRY LIMITED

The basic function of a warehouse is to receive customer orders, store or keep goods, retrieve
required items, and finally prepare and ship those items. Warehouse operations are divided
into three parts which is as follows.

4.1 RECEIVING/ IN-WARDING OF FINISHED GOODS

Receiving is the process of unloading, checking quality and quantity, and dissembling or
repacking items for storage. It is the setup operation for all other warehousing activities. It
allows the warehouse to schedule receipt and unloading within the warehouse. Product will
be inspected and any noted exceptions, such as damage, incorrect counts, wrong description,
and so on.

Receive Packed
Material from
Cold End

Ensure
Quality NOT OK?
Quality Standards
Check

OK?

Barcoding of the
Boxes OK? Quality

Check

Initiate Storing in
the Warehouse

End

Flowchart- Existing System for In-warding of Finished Goods

4.1.1 SUGGESTIONS

The In-warding process of finished goods seems perfectly fine and no issues have been
observed. Hence, we can conclude that no such changes are required in the following process.

4.2 PUT-AWAY/ STORING OF FINISHED GOODS

The put-away operation physically moves the items from receiving location to the storage
area of the warehouse, which is also known as the reverse of order picking. The term put
away defines the appropriate location for items and transferring them to the specified storage
location to wait for demand. When product is put-away, the storage location should also be
scanned to record where the product has been placed. This information will subsequently be
used to construct efficient pick-lists to guide the order-pickers in retrieving the product for
customers. Most of the principles which enhance or streamline the picking process work well
for put away.

4.2.1 EXISTING SYSTEM FOR PUT-AWAY/ STORING OF FINISHED GOODS

Receive Barcoded Boxes

Identification of vacant places for

storage by Shift In-charge

Storage at the Identified Location

Location Mapping Using Bar Code

Scanner at the End of Every Month

End

Flowchart- Existing system of storage

4.2.2 PROPOSED SYSTEM FOR PUT-AWAY/ STORING OF FINISHED GOODS

Receive barcoded boxes

Select a Vacant Location Specified

for the Particular SKU

Storage at the Identified Location

Assign Location to the Stored Items

using the Barcode Scanner

End

Flowchart- Existing system of shipping

In the existing system Shift In-charge decides where to store the material and no such areas
are specified for specific SKU‟s. This approach should be avoided and material should only
be stored at the specified places so as to avoid the confusion during pickup.

Earlier the location use to get assigned to the goods at the end of every month. This approach
should be avoided and location should be assigned to the goods as soon as they get stored.
4.3 SHIPPING OF FINISHED GOODS

The final movement process occurs at the shipping operation. Shipping process involves
inspecting, packing, palletizing and loading items into a carrier for further delivery.

4.3.1 EXISTING SYSTEM OF SHIPPING

Selection of truck for loading based on

ease of material availability

Truck arrival at loading point

Pre-staging of material by Forklift

Operator

Half barcodes to be stick on paper for

billing

Truck loading by Loading Operators

Inspection by Shift In-charge

NOT OK? Ensure

Quality
Check Quality Standards

OK?
OK?
Billing Initiation Quality

Check

End

Flowchart- Existing system of storage

4.3.2 PROPOSED SYSTEM OF SHIPPING

Selection of truck on FIFO basis

Truck arrival at loading point

Pre-staging of material by Forklift

Operator

Barcode scanning against particular order

Truck loading by Loading Operators

Ensure
Quality NOT OK?
Quality Standards
Check

OK?

Billing Initiation OK? Quality

Check

End

In the existing system Shift In-charge calls vehicle for loading based on the ease of
availability of material because of which loading of some vehicles get delayed. To avoid this
it has been proposed that vehicle should be called for loading on FIFO basis.

Also rather than sticking barcode on page for billing, a system can be made where Shift In-
charge can scan the tags from the boxes against particular order using a Barcode Scanner.
Barcode scanner should deny if wrong product is getting scanned. This will help in
decreasing the time consumed during billing.
4.4 WAREHOUSE LAYOUT AT GOLD PLUS

Fig- Traditional Grid Layout

4.4.1 TRADITIONAL GRID LAYOUT

Conventional warehouse layouts, both for the storage area and order-picking area, imply a
traditional warehouse layout. This is the layout that can be found today in the majority
of warehouses. The basic form is rectangular, with parallel straight aisles. Gold Plus also
follows the same layout where each rectangular division has multiple racks for the storage of
glass boxes.

4.4.2 SUGGESTION

As such no necessary changes are required in the layout as Grid Layout is considered as one
of the best layouts in terms of efficiency. Also as far as Gold Plus is concerned the warehouse
is spacious and there is enough space available between two grids or the movement of
forklifts. Hence, we can conclude that the layout of the warehouse does not affecting the
efficiency of the warehouse and need not to be changed.
4.3 INVENTORY ARRANGEMENT

Fig- Ideal Inventory Arrangement

No such technique of inventory management is used in Gold Plus Glass Industry Limited.
Earlier as stock was less, particular sections were specified for the particular inventory based
on the thickness. The earlier system of storage got disturbed as inventory started to grow and
new SKU‟s were added. Nowadays, it is quite hard to locate some of the slow moving items
as they don‟t move out too frequently.

4.3.1 SUGGESTION

Inventory Arrangement technique such as ABC Analysis is strongly recommended. Here,

ABC analysis will be done on the sales data of a fixed period. On the basis of the analysis the
inventory will be divided into three parts i.e. Fast, Slow and Nonmoving Inventory.

 A Items: Are of high value with low sales frequency.

 B Items: Are of moderate value with moderate sales frequency.
 C Items: Are of low value with high sales frequency.

In the next section ABC is analysis of the inventory is done based on the sales data of last six
months.
4.4 ABC ANALYSIS

80.00
70.00
60.00
50.00
Percentage

40.00
Item %
30.00
Sales %
20.00
10.00
0.00
A B C
Item & Sales

Fig- ABC analysis of inventory

4.4.1 INTERPRETATION

Out of the total inventory a total of 1530 items were sold in the last six months. The analysis
below was made on the sold items and result of the analysis is as follows –

 11.3% items (173 items out of total 1530 items) comprises 70% of the sales. Hence
these items can be classified as C or Fast Moving Items.
 19.6% items (300 items out of total 1530 items) comprises 20% of the sales. Hence
these items can be classified as B or Moderate Moving Items.
 69.1% items (1057 items out of total 1530 items) comprises 10% of the sales. Hence
these items can be classified as A or Slow Moving Items.

Rest of the inventory can be considered as Non Moving Items.

Hence the Finished Goods in the warehouse can be arranged based on the following analysis,
where C or Fast Moving Items can be placed near loading point. B or Moderate Moving
Items can placed in the middle and A or Slow Moving Items can be placed farther away. List
of the items in all the three categories is given in next pages.
4.5 PICKING SYSTEM OF ORDERS AT GOLD PLUS

Being able to fulfill orders quickly and accurately is an absolute staple of good warehouse
management. After all, it‟s pretty much the entire reason for the warehouse existing in the
first place. Picking may seem like a simple concept at first. And it is when a company has
only few orders to deal with. But this becomes a much different story once its tarts dealing
with hundreds (or even thousands) of multiple item orders each day.

Gold Plus Glass Industry Limited follows Single Order Picking System.

4.5.1 SINGLE ORDER PICKING SYSTEM

This is the most basic picking method typically only used by those just starting out. Quite simply, a
picker will pick one order at a time in its entirety before moving on to the next. This method is
generally used by companies just starting out and aren‟t yet big enough to gain the benefits of
more complex picking methods.

4.5.2 SUGGESTION

Instead of using Single Order Picking System, Gold Plus can adopt Batch Order Picking
System. The picker can be assigned a batch consisting of a number of orders which have
nearly same products, picks them all in one go and then returns to a packing desk. The picker
will then get assigned a new batch to pick. The number of orders allocated to each batch will
be generally between 10 and 30. But this will really depends on the physical size of the
products and average order size.
4.6 OTHER PROBLEMS

4.6.1 HIGH TRUCK LOADING TIME

Truck Loading Time

0-20 Hours 20-40 Hours 40-60 Hours 60-80 Hours 80-100 Hours 100-120 Hours

3% 1% 1%

8%

46%

41%

Fig- Truck Loading Details of month May

4.6.1.1 INTERPRETATION

The above shown chart is based on the data collected of the vehicles dispatched in the month
of May. A total of 1117 trucks were dispatched and the result is as follows-

 Only 46% (516 out of total 1117) were dispatched within 20 hours of their arrival.
 41% (462 out of total 1117) were dispatched within 20-40 hours of their arrival.
 8% (90 out of total 1117) took around 40-60 hours in loading.
 4% (32 out of total 1117) took around 60-80 hours in loading.
 Around 16 vehicles took more than 80 hours in loading.

Ideal loading time is 24 hours as per the company guidelines. Hence we can conclude that a
majority of vehicles got dispatched after 24 hours which is a matter of concern.
4.6.1.2 CAUSES

Based on the observations made in the past two months the following causes has been
identified-

 Variance present in the inventory shown by the system and the physical inventory is
the main cause of the delay. Generally the material is not present at the locations
shown by the system and consumes a lot of time when searched manually.
 Vehicles are not called for loading in a particular order. Generally Shift In-charge
calls only those vehicles which are easy to load and material is easy to find.

4.6.1.3 SUGGESTIONS

 Inventory arrangement using ABC analysis will help the materials to be located
easily. As most of the fast moving items will be arranged near the loading area, they
will be easy to locate which automatically will reduce the loading time.
 Material should be called for loading in FIFO order. The vehicle entered first in the
company premises should be loaded first so that the waiting time of the truck can be
reduced.
 4.6.2 TRANSIT BREAKAGE

Transit Breakage Loss

1.4

1.2

0.8

0.6

0.4

0.2

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Target (In Rs.) Actual Loss Amount (In Lacs)

Fig- Transit Breakage Loss Amount in Month of May

4.6.2.1 INTERPRETATION

As it can be seen in the above graph Gold Plus Glass Industry is incurring a heavy loss
because of the breakage in transit. The Loss target given by the management is Rs. 50,000. In
the month of May out of the 30 instances only 11 times the breakage loss is less than or equal
to the target. Company incurred a total loss of around 19 lacs in the month of May because of
the transit breakage.

4.6.2.2 CAUSES

Based on the observations the following causes has been identified-

 Scarcity of wooden base trucks.

 Improper loading as SOP not followed while loading the materials.
 Improper fitting of the boxes by using steel strips and wooden planks.
 Use of contractual manpower because of the scarcity of human resources.
 Inadequate training of operators and helpers.
 Poor road conditions.
 Inadequate Quality check mechanism by QC team.
4.6.2.3 SUGGESTIONS

 SOP has been prepared by the shipping department for the loading of trucks where
Pre-staging pattern and Loading pattern of the vehicle has been defined clearly. These
SOP‟s need to be strictly followed and department has to ensure that each and every
operator and helper must be aware of all the SOP‟s.
 SOP‟s has also been prepared for the binding of the material inside the truck so as to
avoid the pressure on glass because of the jerks and jolts during the journey. These
SOP‟s needed to be strictly followed so that the material can be tied using wooden
planks and steel strips. This way boxes will not move unnecessary during jerks and
breakage can be avoided.
 Contractual manpower needs to be avoided as loading operations require skilled
manpower. Whereas, contractual manpower changes frequently and has no assurance
if same person will be available for the same job next day. More skilled manpower
should be hired and HR Department should take necessary action in this direction.
 Training sessions can be arranged for the Operators and Helpers so as to enhance their
skills. It will definitely add value to the organisation as well as to the skills of
employees also.
 QC team does not have any specific set of SOP which they can follow during the
quality check. QC tem should have a specific set of Quality check mechanism so that
vehicles can be loaded without any error.

4.7 CONCLUSION

Gold Plus Glass Industry Limited is one of the largest glass manufacturing firms of India and
has competition with various MNC‟s. Currently because of the expansion plans some of the
mismanagement has been observed in the Warehouse and Shipping Operations which is
affecting the efficiency of the operations. In the following study several suggestions have
been provided for Warehouse and Inventory Management after studying the existing system.
These suggestions can be adopted by the organization so that the operations can get much
more efficient.