Material Management

(1)

A

Project report

On

MATERIALS MANAGEMENT

AT

BHILAI STEEL PLANT

Submitted in the partial fulfillment for the Award of Degree of

BACHELOR OF BUSINESS ADMINISTRATION

FROM ST.THOMAS COLLEGE RUABANDHA BHILAI

AFFILIATED TO

AFFILIATED TO PT.RAVISHA

PT.RAVISHANKAR UNIVERSITY,

NKAR UNIVERSITY,

RAIPUR

G

GUIDED

UIDED BY

BY

SUBMITED

SUBMITED BY

BY

NAMDEO

NAMDEO BARANGE

BARANGE

SONAM

SALGOTRA

(TRAINING COORDINATOR

BBA 6

THTH

_SEMESTER

_HRD,

_{HRD, BSP)}

_BSP)

ST

(2)

(3)

A

Project report

On

MATERIALS MANAGEMENT

AT

BHILAI STEEL PLANT

Submitted in the partial fulfillment for the Award of Degree of

BACHELOR OF BUSINESS ADMINISTRATION

FROM ST.THOMAS COLLEGE RUABANDHA BHILAI

AFFILIATED TO

AFFILIATED TO PT.RAVISHA

PT.RAVISHANKAR UNIVERSITY,

NKAR UNIVERSITY,

RAIPUR

G

GUIDED

UIDED BY

BY

SUBMITED

SUBMITED BY

BY

MR.ANIL

MR.ANIL MALIK

MALIK

SONAM

SALGOTRA

(SENIOR

(SENIOR MANAGER

MANAGER

6

THTH

_SEM

MATERIALS

MATERIALS MGT

MGT.,BS

.,BSP)

P)

ST

ST.THO

.THOMAS

MAS

COLLEGE

(4)

A

Project report

On

MATERIALS

MATERIALS MANAGEMENT

MANAGEMENT WITH

WITH

REFERENCE TO BSP

Submitted in the partial fulfillment for the Award of

Submitted in the partial fulfillment for the Award of Degree of

Degree of

BACHELOR OF BUSINESS ADMINISTRATION

From

PT. RAVISHANKAR SHUKLA UNIVERSITY RAIPUR (C.G.)

Session

2007-08

(Guided

(Guided by)

by)

(Submitted

(Submitted by)

by)

Mr.

Mr. MANOJ

MANOJ VERGHESE

VERGHESE

SONAM

SONAM SALGOTRA

SALGOTRA

St. Thomas College, Bhilai

Affiliated to Pt. Ravi Shankar Shukla University

Raipur (C.G.)

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COMPANY CERTIFICATE

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CERTIFICATE

This is to certify that the project on “MATERIALS

MANAGEMENT WITH REFERENCE TO BSP” submitted in

the partial fulfillment for the award of degree of BBA in St.

Thomas College affiliated to Pt. Ravi Shankar Shukla University,

Raipur is a genuine work done by Miss. SONAM SALGOTRA

under my supervision.

Mr. Manoj Verghese

Mrs. Mariam Jacob

Project Guide

H.O.D.

Management department

Dr. Reny George

Principal

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DECLARATION

I, the undersigned hereby solemnly declare that this

project entitled MATERIALS MANAGEMENT OF BSP

is a genuine profound work done by me under the auspice of my

project guide & other concerned executives. All the information

collected is authentic & to the best of my knowledge.

(---)

SONAM SALGOTRA

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ACKNOWLEDGEMENT

I would like to acknowledge my deep sense of gratitude to MR. S.N.SINGH GM(HRD) , MR. ANIL SHARMA D.G.M(HRD) ,MR. ANIL MALIK SR.MANAGER (MM) , MR. NAMDEO BARANGE , TRAINING COORDINATOR HRD BSP AND MR. MANOJ VERGHESE ( FACULTY OF COLLEGE, ST.THOMAS BHILAI) . It is outcomes of constant encouragement an d in valuable guidance of my project guide.

Lastly, I would like to express my deep sense of gratitude to all who have shared their in valuable time & helped me directly & indirectly in the preparation of this project.

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CONTENT

Chapter -1

1.1-

Introduction of Materials Management

* Function & Importance.

1.2- About the company

* Introduction of company

* History of BSP

* Feature of BSP

Chapter – 2

2.1- Statement of objective

2.2- Statement of limitation

Chapter – 3

3:1 – Justification of study

3:2 - Research Methodology

Chapter – 4

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Chapter – 5

5.1- Materials Management of BSP

5:1:1- Material Planning & programming,

5:1:2- Objective and purchase

5:1:3 – Material budget

5:1:4 - Stock verification

5:1:5 - Issue of stores

5:1:6-Security and Fire Prevention

5:1:7 - Disposal procedure

5:1:8 – Standardization

5:1:9 - Classification

5:1:10 - Codification

5:1:11 – Inventory Control

5:1:12 - Inspection of stores

5:1:13 - Store keeping

Chapter – 6

6.1 FINDINGS

6.2 SUGGESTIONS

6.3 CONCLUSIONS

Chapter – 7

7.1 Bibliography

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Chapter -1

1.1-

Introduction of Material

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1.1 INTRODUCTION OF MATERIAL MANAGEMENT

Materials Management

Meaning

In recent years the concept of materials management is being widely accepted by industrially advanced countries for more effective coordination and control over material because materials costs (including investment in materials, handling cost, transportation and storage costs, insurance, wastage and obsolescence costs etc.) constitute

“Material Management is a term used to connote controlling the kind, amount, location, movement and timing of the various commodities used in and produced by the industrial enterprise”.

“Materials Management is essentially an activity of an enterprise for the procurement and use of materials distinctly separate from the process of procurement and the use of human skills and labour for the ultimate deployment to attain some predetermined objectives”.

“Materials Management is the function responsible for the co-ordination of planning, sourcing, purchasing, moving, storing, and controlling. Materials in an optimum manner so as to provide a pre-decided service to the customer at a minimum cost”.

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1)

Materials Planning and programming :

Material planning and programming is the main function of

Materials management. It facilitates the procurement of material at Proper time for manufacturing purpose.

2)

Purchasing of raw material and capital goods :

Management’s next function is to purchase materials such as quantity, quality, cost effectiveness.

3)

Inventory control :

It ensures the provision of the required quantity of inventories of Required quality at the required time with the minimum amount of Capital investment.

4)

Receiving storekeeping and warehousing :

The next function of materials management is to receive materials to keep in stores and ware house.

5)

Value engineering and value analysis :

Value analysis is a study of character – wise cost of an item such as Quality, design, methods of manufacture consumption aspect etc.

6)

Transportation – internal and external :

Transport and traffic department in a big manufacturing concern Plays a significant role in the movement of materials to the best advantage of the concern transportation.

7) Disposal of scrap and surplus a) Obsolete

b) Surplus c) Scrap

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1)

Lowering cost content :

If effective materials management is done the cost content may be kept at the lowest level.

2)

Direct and Indirect method :

The cost of materials and indirect cost remain within control limit.

3)

Minimum inventory loss :

Though an efficient materials management we can reduce the risk of loss from fraud and theft.

4)

Full utilization of tools and equipments :

Tools and equipments are effectively utilized provided there is an execution of good materials management.

5)

Cost records of material are made feasible :

By materials management, cost of materials used in different department or job may be determined very easily.

6)

Perpetual inventory system :

Preparation of accurate reports meant for management can only Be possible through perpetual inventory system and availability of other inventory records.

7)

Ensuring receipt of right materials :

Material department duty is to see what is being supplied against his orders and to ensure that he receives the correct material for the money paid.

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8)

Good seller and buyer relationship :

Good buyer and seller relationship is very essential in an effective material management.

9)

Selection of suppliers :

In selecting suppliers, consideration should be given not only to price but also to quality and delivery time.

10)

Negotiation:

Negotiation work is effectively done by material management.

11)

Reduction length of manufacturing cycle:

Effective use of men, material and machine reduces the length of Manufacturing cycle.

12)

Quality control is maintained:

Quality control is a technique of scientific management which has the object of improving industrial efficiency by concentrating on better standards of quality.

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1.2- About the company

* Company profile

* Introduction of company

* History of BSP

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COMPANY PROFILE

Seven - time winner of Prime Minister’s Trophy for best Integrated

Steel Plant in the country, Bhilai Steel Plant (BSP) is India’s sole

producer of rails and heavy steel plates and major producer of

structural. The plant is the sole supplier of the country's longest rail

tracks of 260 meters. With an annual production capacity of 3.153 MT

of saleable steel, the plant also specializes in other products such as

wire rods and merchant products. Since BSP is accredited with ISO

9001:2000 Quality Management System Standard, all saleable

products of Bhilai Steel Plant come under the ISO umbrella.

At Bhilai IS0:14001 has been awarded for Environment Management

System in the Plant, Township and Dali Mines and it is the only steel

plant to get certification in all these areas. The Plant is accredited

with SA: 8000 certification for social accountability and the

OHSAS-18001 certification for Occupational health and safety. These

internationally recognized certifications adds value to Bhilai’s

products and helps create a place among the best organizations in

the steel industry

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COMPANY INTODUCTION

The Bhilai Steel Plant - a public sector undertaking run by the

Steel Authority of India - was built with Soviet co-operation and

technology, and began production in 1959. It was deliberately

located in what was then regarded as a remote and "backward"

rural area, profits being secondary to employment in the planning

priorities of the time. BSP currently has nearly 55,000 permanent

workers on its direct pay-roll, of whom approximately three-fifths

work inside the 17 square kilometer plant and the remainder for its

associated mines and quarries, and for the purpose-built BSP

township. This compares with a regular workforce of 63,400 in

1987. In addition, on any one day there are at present something in

the region of 8,000 contract workers employed by the plant and the

township, and a further 3,500 - 4,000 employed by the mines.

Though a handful of managers, and a significant proportion of the

contract labour force, are women, all of the regular BSP workers

assigned to duties inside the plant are men.

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Source of Raw Materials:

1. Iron Ore

….

Dalli, Rajahara

Mines

2. Lime Stone

….

Nandini Mines

3. Manganese

….

Balaghat Mines

4. Sinter

….

Sintering Plants

(SP-2, SP-3)

5. Coke

….

Coke Ovens

(Coke sorting plants)

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Requirements for producing of one ton of Hot

Metal

(Specific Consumption)

Iron Ore

….

459 Kg

Lime Stone

….

850 Kg(Depending on Sinter Usage)

Manganese

….

800 Kg(50% in

burden)

Sinter

….

35 Kg

Coke

….

08 Kg

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S.N

o

Department

Unit

Capacity

1 Coke oven

8 Batteries of 65

ovens & 4.3 M high

2 Batteries of 67

ovens & 7.0 M high

3.3 million

ton of BF

coke

2 Sinter Plant

3 Machines of 50 Sq M

hearth area

3 Machines of 70 Sq M

hearth area

1 machines of320 Sq

M hearth area

8.3 MT of

sinter

3 Blast Furnace

3 furnace of 1033 cum

1 furnace of 1033 cum

4.71 MT of

Hot

metal

4 SMS-1

4 twin hearth furnace

2.5 MT of

steel

5 SMS-2

3 BOF of100/130 T

1.425 MT of

steel

6 Contt casting

3 single strand & 1

continuous caster

1.425 MT of

steel

7 Blooming &

Billet Mills

1150 MM blooming

Mill

1000/700/500 mm cc

mill

2.15 of

blooms

8 Rail &

Structural

Mill

950/800 2 high

reversing mill

75 MT

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MAJOR LANDMARKS OF BSP

Signing agreement for setting up the plant --- Feb 2, 1955

Commencement of work at site

--- May 6,1956

Commissioning of blast furnace

--- Feb 4,1956

Commissioning of power plant

--- June 4,1959

Commissioning of S.M.S no.1

--- Oct 1, 1959

Commissioning of Blooming mill

--- Nov

12,1959

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Commissioning of Billet mill

--- Dec

24,1959

Commissioning of Rail & structural mill --- Oct 27,1960

Commissioning of Merchant mill

--- Feb 2,1961

Commissioning of Sintering plant no.1

--- July3,1961

Commissioning of wire rod mill

--- Sep 1,1967

Commissioning of converter no.1

--- July

29,1981

Commissioning of continuous casting

shop---July24,1984

Commissioning of 1

st

twin heart

---Sep12,1986

Commissioning of Blast furnace no.7

---Aug30,1987

Commissioning of coke oven battery no.9 --- Mar31,1988

Commissioning of second twin hearth

--- Jan1,1990

Commissioning of third twin hearth

--- June

29,1992

Major suppliers

Apollo industrial corporation --- (Mumbai)

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Bhel --- (Bhopal, Mumbai)

Bharat petroleum gas ltd. - (Nagpur)

Birla corporation ltd. --- (Kolkata)

Cimmco Birla ltd. -- (New Delhi)

Dunlop India ltd. --- (Kolkata)

Siemens ltd. --- (Mumbai)

Simplex castings ltd. --- (Raipur)

H.m.t ltd. --- (Ranchi)

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2.1- Statement of objective

2.2- Statement of limitation

2.1- Statement of objective

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2) To know about the inventory control methods.

3) To study about the store-keeping procedure of BSP.

4) To know about the codification process used in BSP.

5) To study about the quality used in standardization of materials.

6)To make comparison of data of stock and spares

2.2- Statement of limitation

1) Due to lack of time the researcher were unable to study aspects in detail of purchase deptt of BSP.

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2) Limitation time also restricted the extend of the survey.

3) Managers were reluctant to disclose facts & data of BSP.

4) BSP is situated in vast area. The researcher was unable to visit Each & every seasons of materials Department.

5) Then was high security avengement in BSP as it is a public sector

6) The attitude of employees was not good towards the researchers. They were lacking of subject knowledge so they were reluctant to Give date to the researcher.

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Chapter – 3

3:1 – Justification of study

3:2 - Research Methodology

3:1 – Justification of study

The project work which is done by me on the topic Material Management of BSP is the record of the original work done by me & matter/ data which are collected by me is the full of real ideas &, real thinking & the real perception of company that the what is the Material

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function in their company justify my project. I have used companies statement & their Material management document for getting true & real information through going there & asking from the manager. The Material function is the real justification of my study i.e. the project work is done by me is the genuine & sincere work & the matters enclosed has not been submitted for the award of any other degree or diploma in the university.

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•

INTRODUCTION

•

DEFINING THE RESEARCH PROBLEM

•

RESEARCH PROCESS

•

RESEARCH DESIGNS

•

DATA COLLECTION

•

RESEARCH HYPOTHESIS

•

PREPARATION OF THE RESEARCH

REPORT

INTRODUCTION

Today is changing dynamic field to functional area of management of increasingly important as compared to other fields. Information in life is important as any research report, which keeps the

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management in minimizing the risk & uncertainty through systematic decision-making.

“Research is a systematic & objectives for analysis of information relevant to the identification & solution of any problem in any field.”

Research comprises defining & redefining problems, formulating hypothesis or suggested solutions, collecting, organizing & evaluating data, making deduction & reaching conclusions to determine whether they the formulating the hypothesis.

Research seeks answers to certain questions which have not been answered so far & which depend upon human efforts. It seeks to only those questions of which the answer can be given based on this data.

Research is devoted to find the condition under which a certain phenomena occur & the conditions under which it dose not occur in similar circumstances. The term research contains of two words Re+ Search. “Re” means again & “Search” means to find out something new. Thus, research is the process of which a person observes the phenomena again & again collects the data & based on data he draws conclusion. This is clear by the

following:-OBSERVES

COLLECTION OF DATA

PERSON

PHENOMENA

CONCLUSION

AGAIN & AGAIN

ANALYSIS OF DATA

Thus, research means to observes the phenomena again & again from different dimensions. For example, one finds many theories of learning due to the observation from different dimensions.

DEFINITION

1) “Research is a point of view, an attitude of inquiry or frame of mind”. R.RAOK 2) “Research is and be honest, exhaustive, intelligent searching for facts and their meanings or implication with reference to a given problem. The product or findings of a given pieces of research should be as authentic, verifiable & contribution to knowledge in the field studies.”

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OBJECTIVES OF RESEARCH METHODOLOGY

The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet.

i) To gain familiarity with a phenomenon or to achieve new insights into it.

ii) To portray accurately the characteristics of a particular individual, situation or a group.

iii) To determine the frequency with which something occurs or with which it is associated with something else.

iv) To test a hypothesis of a causal relationship between variables.

TYPES OF RESEARCH

1) DESCRIPTIVE RESEARCH

Descriptive research design is also called explanatory design. The descriptive study is typically concerned with determining frequency with which something occurs or how two variables vary together. It describes the characteristic of certain groups, e.g. users of a product with different age, sex, education, etc. It estimates the proportion of people in a specified population. Descriptive research includes survey & facts finding enquires of different kinds. The major purpose of descriptive research is descriptive of the state of affairs as it exits at present. It is rigid & formal. Two basic types of research design used in descriptive research are.

a)

Case research design

It can be carried out in the areas such as a survey consumer attitude toward a new product concept or it may be conducted in a library by the survey of available secondary data. But it is generally used for collecting cases

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b)

Statistical design

The statistical method involves study of a few factors in a larger number of cases.

2) EXPLORATORY RESEARCH

In this research, the major emphasis is on the discovery of ideas & insights. It is helpful in breaking broad & vague problem into smaller. The exploratory study may also be used to clarify concept. It is formulating a problem for more precise, establishing priorities, gathering information, increasing the analyst’s familiarity with the problem. Exploratory study is characterized by flexibility & by flexibility & informality.

Three basic types of research design used in exploratory research

are-a) Literature surveys

One of the most economical & quickest ways to discover hypothesis is the work of others through a literature search. More useful sources of such information are books, newspapers, government documents, trade journals, professional journals & so on.

b)

Experience surveys

Individuals with expertise, knowledge, & ideas about research subject may be questioned. Such people include top executives, sales mangers, other relevant people of the company in question & companies making similar products salesman, wholesalers, retailers etc. It reflects an attempt to get all available information from the people who have some particular knowledge of subject under investigation.

c) Analysis of selected cases

The arbitrary selection of a few extreme examples and through analyses of these. In some instances, detailed & intensive case analysis of a few Selected individual or organization may particularly be helpful in

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by intensive study.

3) QUALITATIVE RESEARCH

Qualitative research is concerned with qualitative phenomena i.e. phenomena relating to or involving quality or kind. This research is important in the behavioral sciences where the aim is to discover the underlying emotions of human behavior.

4) APPLIED RESEARCH

Applied research aims at finding a solution for an immediate problem facing a society & industrial/ business organization.

5) EMPIRICAL RESEARCH

Empirical research relies on experience or observation alone, often without due regard for system & theory. Empirical research

is appropriate when program is sought that certain variable affects other variables in some ways.

RESEARCH METHODS VERSES METHODOLOGY

It seems appropriate at this juncture to explain the different between research methods and research methodology. Research methods may be understood as all those methods/techniques that are used for conduction of research. All those methods which are used by the researcher during the course of studying his research problem are termed as research methods. Since the object of research, particularly the applied research, is to arrive at a solution for a given problem, the available data and the unknown aspects of the problem have to be related to each other to make a solution possible. Keeping this in view, research methods can be put into the following three groups:

i) In the first group we include those methods which are concerned with the collection of data. These methods will be used where the

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data already available are not sufficient to arrive at the required solution.

ii) The second group consists of those statistical techniques which are used for establishing relationships between the data and the unknowns.

iii) The third group consists of those methods which are used to evaluate the accuracy of the results obtained.

Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology.

For e.g. : an architect, who designs a building, has to consciously evaluate the basis of his decisions, i.e., he has to evaluate why and on what basis he selects particular size, number and location of doors, windows and ventilators, uses particular materials and not others and the like. He has to specify very clearly and precisely what decisions he selects and why he selects them so that they can be evaluated by others also.

Thus, when we talk of research methodology we not only talk of the research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are not using others so that research results are capable of being evaluated either by the researcher himself or by others.

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IMPORTANCE OF KNOWING HOW METHODOLOGY OF RESEARCH IS DONE?

Importance of knowing the methodology of research or how research is done stems from the following considerations:

i) The knowledge of methodology provides good training especially to the new research worker and enables him to do better research.

ii) The knowledge of research methodology is helpful in various fields such as government or business administration, community development and social work where persons are increasingly called upon to evaluate and use research results for action.

iii) The knowledge of Research Methodology provides tools to look at things in life objectively.

iv) The knowledge of Research Methodology helps the consumer of research results to evaluate them and enables him to take rational decisions.

DEFINING THE RESEARCH PROBLEM

In research process, the first & foremost step happens to be that of selecting & properly defining a research problem. A researcher must find the problem & formulate it so that it becomes susceptible to research.

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Problem of researcher’s project is to know the material planning, Problem relating to design & specification, problem relating to procurement of materials, & problems of material function.

RESEARCH PROCESS

In the research, cycle there is atypical truncation & integration between the company & the customer

(a) The customer is interviewed about the truncation (b) The interviewed is processed

(c) Than passed to a researcher

(d) He reports the findings to the client researcher

(e) From there the information is passed to through the management team (f) To the line managers &

(g) Then to the front line who takes the necessary action

(h) The front line can include those responsible for the communication, product design, customer service or sales.

Information from the customer passes directly to the front line in the first instance. (a) The front line can then acts & modify behavior can based on their specific information. Line managers can collect & collate the information from the front line to the identify trends & exceptions to assist & ensure that corrective action is taken. (b), the senior management team can then take an overview of the data collected to determine strategic response to be addressed across the company as a whole (c), there are four major benefits to this approach for the general research. They are as follows:

Research process consists of series actions or step necessary to effectively carryout research & the designed sequencing of these steps. The previous chart shown about research process consists of a number of closely related activities as shown through I to VII. However, the following order concerning various steps provides as useful procedural guidelines regarding the research process.

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• Extensive literature survey. • Determining sample design. • Preparing the research design. • Collecting the data.

• Execution of the project. • Analysis of the data. • Hypothesis testing. • Interpretation.

• Preparation of the research. • Prevention of the Results.

1) Formulating the Research problem

There are two types of research problem, those which relate to states of nature & those which relate to relationship between the variables. At every outset the research must sign out the problem he wants to study i.e. he must decide the general are of interest or aspect of a two steps are involved in formulating the research, understanding the problem thoroughly & rephrasing the same in to meaningful terms in analytical point of view.

2) Extensive Literature Survey

Once the problem is formulated, a brief summary of it should be written down. At the function of research should undeclared executive literature survey connected with the problem.

3) Development Of Working Hypothesis

After extensive literature survey, research should state in clear them the working hypothesis or hypothesis. In development of working plays on important role. Hypothesis should be very specific & limited to the piece of research in hand because it has to be listed.

4) Preparing The Research Design

The research problem having been formulated in clear-cut terms, the research will be liquated to prepare design i.e. he will have to state conceptual structure with in research would be conducted. The preparation of such a design facilities research to be as efficient as possible yielding maximal information.

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5) DETERMINIG SAMPLE DESIGN

All the items under consideration in any field of inquiry constitute a universe or population. A complete enumeration of all the items in the population is known as a census inquiry. It can be presented that in such on inquiry when all the items are covered no elements of chance is left & highest accuracy is obtained. But in practice this may not be true. Some of the important Sampling design

is- SIMPLE RANDOM SAMPLING

 CONVENIENCE SAMPLING  JUDGEMENT SAMPLING  SYSTEMATIC SAMPLING  STRATIFED SAMPLING  QUOTA SAMPLING  CLUSTER SAMPLING  AREA SAMPLING  MULTISTAGE SAMPLING  SEQUENTIAL SAMPLING

The researchers used sampling method in his project as follows

6) COLLECTING THE DATA

In dealing with any real life problem, it is often found that data at hand are inadequate. There are ways of collecting appropriate data, which differ considerably in contest of many costs, time & other resources at the disposals of the researcher. But in the case of survey any one or more of the following ways can collect data.

• By observations

• Through personal interview • Through telephone interview • By mailing of questionnaire • Through schedule

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After the data have been collected, the researcher turn to the task of

analyzing them. The analysis of data required no closely related operation such as establishment of categories, the application of these categories to raw data through coding, tabulating & then drawing statistical inferences

RESAEARCH DESIGN

Introduction of Research Design :

Decisions regarding what, where, when, how much, by what means concerning an inquiry or a research study constitute a research design. A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The research design is the conceptual structure within which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data. As such the design includes an outline of what the researcher will do from writing the hypothesis and its operational implications to the final analysis of data.

Research design is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions and to control variance.

The research design consists of three important

terms:-i) Plan, iterms:-i) Structure & iiterms:-i) Strategy

(i) The plan is an outline of the research scheme on which the researcher is to work.

(ii) The structure of the research is a more specific outline or the scheme.

(iii) The Strategy shows how the research.

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According to Green and Tull,

“A research design is the specification of methods and procedures for acquiring the information needed.”

According to Bernard Phillips

“The blueprint for the collection, measurement and analysis of data.”

FEATURES OF RESEARCH DESIGN

i) Identifying the management problem ii) Translating the problem

iii) Collecting information iv) Reporting information v) Analyzing information vi) Specification of procedure

vii) Information has a value accuracy of information viii) Generation of information

ix) Data collection method x) Measurement approach xi) Object to be measured xii) Data to be analyzed

xiii) Supportive decision making

Importance of research design:

i) Dependent and independent variables ii) Extraneous variable

iii) Control

iv) Confounded relationship v) Research hypothesis

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vi) Experimental and non-experimental hypothesis testing research vii) Experimental and control groups

viii) Treatments ix) Experiment

x) Experimental units.

COLLECTION OF DATA

The task of data collection begins after a research problem has been defined & research designs process. The researcher should keep in mind two types of data collection are

used:-PRIMARY DATA

These data are those data which are collected for the first time, & thus happen to be original in character. There are several methods for collecting primary data. Primary data are the actual information, which are received by the researcher for social purpose from the actual field of study & for the first time.

SECONDARY DATA

Secondary data are those which have already been collected by someone else & which have already been passed through the statistical process. Secondary data may either be published data. Usually published data are available in books, magazines, reports & publication.

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SOURCE OF PRIMARY DATA

•

Direct Observation

This method requires that the researcher should personally & directly observe the conditions & incidents of his field of study. Direct observation is the reliable method for gathering informative concerning the life, status, conduct, behavior, language, festivals, customs & traditions etc. In this observation, the observer should be absolutely detached & objective in gathering facts.

•

Questionnaire

Under this method, information is gathered through questionnaire, which includes questions concerning different aspects of the subject of study, which is to be filled by the respondents.

•

Schedule

These are particular type of questionnaire, which is replied by the researcher himself by questions asked to the informers.

•

Interview

In an interview, the researchers meet people & discuss his social problems, with them & this course of discussion is gathered fact.

The researchers used sample size in his project as follows

The researcher has not used the primary data.

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•

Published sources

International publication U.N.O. publishes a number of journal & periodic, which are the best source of secondary data.

•

Government publication

The state govt. publishes data for their use that are very much accurate & reliable.

•

Reports of communities & committees

Various communities & committees of enquiry collect data that can be use by these who are investigating on the related subjects.

•

Semi govt. publication

Many semi- govt. publications like municipal corporation board etc. publish data pertaining to birth rate, death rate, literacy rate etc. that can be used for investigation.

•

Commercial research, educational institutions,

universe, organizations etc.

These institutions also conduct enquiry & publishes their report through which data can be used for investigation.

•

Newspaper, magazines& letter to editors

Newspapers & magazines also provides data for investigation, letters to the editor (of newspaper & magazines both) are published that can be used.

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Personals rewards like bibliography, diaries, letters, memories etc. form an important source of valid information in social research as a personal document.

•

Official records

Most of the organization maintains records of important information, which are important source of data collection for researcher.

•

Other sources

Many other sources like film, radio, television, public speeches etc. are some of the important source of information.

According I have define my project as

follows-As secondary data, the researcher has used magazines & officials records

Of “BSP”.

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1)The flow of production used in BSP in to purchase material at a right quality & at a comparative lower prize.

2) EOQ method is used for controlling the inventory.

3) LIFO, FIFO method is used for store-keeping.

4) KODAK digit codification process is used in BSP

5) The best quality control process is used for materials.

6) Procurement of materials used by tender basis.

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Finally, the researcher has to prepare the report of what has been done by him. Writing of report must be done with great care keeping in view the

following:-The layout of the report should be as follows

a) PRELIMINARY PAGES

In this, the report should carry title & data followed by acknowledgement. Then there should be a table of contents followed by a list of tables & a list of graphs & if any, given in the report.

b) MAIN TEXT OF THE REPORT

•

INTRODUCTION

It should contain a clear statement of the objectives of the research & an explanation of the methodology adopted in accomplishing the research.

•

SUMMARY OF FINDINGS

After introduction there would appear a statement of findings & recommendations in non- technical language.

•

MAIN REPORT

The report should be presented in logical sequence & broken down into readily identifiable section.

CONCLUSION

Towards the end of the main text, researcher should again put down the results of his research clearly & precisely.

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Appendix should be prepared in respect of all the technical data. Bibliography i.e. list of books, journals, reports etc. consulted, should be given in the

end:-1) Index should also be given specially in a published research report.

2) Report should be in a concise, specific style & simple language.

3) Charts & illustration in the main report should be used only if they present the information more clearly & forcibly.

4) Calculated confidence limits must be mentioned & the various constraints experienced in concluding research report operations may as well as stated.

d) REPORT WRITING

After analysis & interpretation, the data is presented in a systematically typed or printed form.

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Chapter – 4

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This is the comparative study of stores & spares for the four financial

years .

Table 1

PARTICULARS

2004-2005

RS.IN CRORES

2005-2006

RS.IN CRORES

2006-2007

RS.IN CRORES

2007-2008

RS.IN CRORES

A.STORES&

SPARES

315.75

395.07

426.32

455.24 B.NO. OF

MONTHS OF

CONSUMPTION

4.84

5.29

5.12

5.13

315.75 395.07426.32 455.46 0 50 100 150 200 250 300 350 400 450 500 RS.IN CR 2 0 0 4 - 2 0 0 5 2 0 0 5 - 2 0 0 6 2 0 0 6 - 2 0 0 7 2 0 0 7 - 2 0 0 8 STORES& SPARES

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CHAPTER-5

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5.1.1. Material Planning, Programming,

& Indenting

Material Planning:

Material planning is the scientific way of determining the requirements of raw material, components spares and other items that go into meeting the production needs within economic investment policies.

General:

In order to ensure that optimum inventory levels are maintained at all times, it is necessary to plan and regulate the inflow of materials. For this purpose forecasting of future requirements has to be as accurate as possible, the indents are to be correctly prepared taking into consideration the stock and dues in and the deliveries from suppliers are to be so regulated that both excessive holding of stock and stock outs of material are avoided.

System of Material Planning:

A) Plant machinery and other items for capital works

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C) Pipes

D) Coal tubs

E) Winding and guide ropes

F) Power/trailing cables

G) Cement and ac sheets

Material Programming:

The system to be followed for planning the procurement of different types of stores as explained above, incorporate time schedules for actions by various users and purchase department. The time schedules constitute programmers of action to ensure the following.

(a) Even distribution of procurement work throughout the year for all concerned.

(b) Adequate time for purchase department to arrange commencement of supply.

(c) Effective control on material costs.

(d) Proper timing of purchase of different types of stores to obtain maximum benefits.

(e) Adequate time for general manages and controlling offers of various stores.

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(f) Even load of receipts spread over the whole year to enable proper checking, inspection and timely issues by stores depots.

(g) Correct assessment of amount required for purchase well in advance to enable accounts department to make available required funds in time.

Material Indenting :

While material budgets dully concurred by financial authorities act as authority for purchase action, actual purchase action will be taken only on receipt of two copies of formal indents on indent form as shown in

annexure 54 by the purchasing agency from the indenters.

Types of Indents

a) Normal Indents: It is to be forwarded to purchase department for

capital items & centralized/deferred revenue items and to purchase cell of respective area for decentralized and rate contract items.

b) Emergent Indents: Emergent indents will be submitted on pink coloured indent forms only in those cases where procurement under normal circumstances cannot be awaited due to an emergency/

breakdown.

c) Local Purchase Indents: indents for procurement by local purchase will be submitted on yellow coloured indent forms where the

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requirement for a particular centrally procured item could not be anticipated and its purchase becomes urgent or inescapable.

CONCLUSION:

M aterial planning, programming & indenting are integrated functions of material management involving most of the departments of the subsidiaries and CIL headquarters. Unless every officer/section/department carries out their respective functions in time and with company objectives in mind, problems of overstocking and stock-outs cannot be tackled successfully. Timely actions by all concerned & co-ordination at different levels will ensure optimum utilization of inputs, resulting in reduction in costs and efficiency all round.

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5.1.2Objective and purchase

 The primary objective is to procure plant and equipment , spares and other stores and material required by indenters with a view to:

(a) Helping and maintaining continuity of production by correct supplies as per user’s requirement, in time.

(b) Ensuring that items purchased are most economical, taking into account their quality, durability, efficiency etc.

(c) Developing effective and on-going vendor relationships to ensure fair play and equity.

The Materials Obtained Shall Be

:

(a) Of right quality:

(b) In right quantity:

(c) At the right time:

(d) At right prices:

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(A) Tender

Tender is the process of ascertaining the availability & prices of material in sealed covers which are opened & scrutinized at a predetermined time by a tender committee. It is implied that the materials covered by the tender should give scope for competition.

Types of Tender:

1) Single Tender 2) Limited Tender

3) Open Or Advertised Tender 4) Global Tender

Tender Box:

Separate tender box are kept for different groups of tenders. They will be marked x, y, z & are distinguished by different colors. The boxes are kept locked & all the tenders received are deposited in the appropriate tender boxes by the tenders themselves if delivered by hand or the purchased section if received through post.

Tender Committee:

1) Those decided directly by the head of the purchasing department.

2) Those decided by a tender committee, which may consist of the head of the purchase department, a representative from the accounts &

department head against whose purchase requisition, materials are being procured.

3) Those which will be decided by the management or jointly by the tender committee and the management.

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(B) Registration of Suppliers:

In order to have dependable sources of supply of stores, spares and equipment of right quality at the appropriate time, suppliers will be registered after ascertaining certain basic facilities available with them. Performance of such registered suppliers shall be reviewed from time to time.

The list of registered suppliers shall be kept up-to-date by each company by including any additions in the list or removing names of such firms whose performance are not found up to the mark. Each company will maintain the following two lists:

(1) Suppliers priority list indicating the items

(2) Items priority list indicating the name (s) of suppliers

Each subsidiary company will circulate the up-to-date list of registered suppliers together with the list of items for which they are registered to all other subsidiary companies and coal India limited for their information and guidance. This list should be circulated once in a year in the month of April. The name of suppliers added/deleted to/from lists should be circulated to all the subsidiary companies.

Procedure for Registration:

(a) Indigenous manufactures who own factory/workshop of their own and Are, in the opinion of the inspecting officers, capable of producing

Materials of the required standard shall be registered.

(b) Sole agent/distributors in the case of imported stores and stockiest in case Of imported stores and stockiest in case there are no agents/ distributors In the country for any particular type or class of goods shall also be Registered.

(c) For indigenous items, where the manufactures do not directly

market their products, distributors, authorized dealers or sole agents can be considered for registration under special circumstances like for vehicle spares.

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(C) Payment to the Suppliers:

Payment against the supply orders placed either by the subsidiary company or by CIL shall be arranged by the subsidiary companies, if not specified otherwise. Wherever order is placed by CIL on any foreign supplier involving requirement of more than one subsidiary company, payment shall be arranged by CIL normally through letter of credit.

Payment for agency commission, if any, involved, may be considered in case of necessity, subject to compliance of the government of India guidelines issued from time to time. The name of the Indian agent with their full address and the quantum of agent commission.

Payment from CIL, may also be considered, if felt necessary, by the CIL management, even though order is placed against the requirements of one subsidiary company by CIL (h.q.).

Payment Should Be Made:

- Payment authorities.

- Payment against supply of equipment.

- Payment against trail orders.

- Payment for spare parts & other consumable items.

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5.1.3 – Material Budget

Budget is an expression of a firms plan in the financial form for a period of time in future. In other words, it is a statement in numerical/ quantitative term expressing the plans, policies and goals of an enterprise for a definite period in the future.

“Budget is an estimate of future needs arranged according to an orderly basis, covering some or all of the activities of an enterprise for definite period of time”.

The Purpose of Material Budget:

(a) To plan the purchase

(b) To determine the financial need for the budgeted purchases.

(c) To establish control on the consumption of the materials.

(d) To establish control on purchase

(e) To make arrangement of finance as per requirements.

(f) To develop plan for the consumption of materials by different departments.

(g) To detect the deviations, trace the defect and apply correctives.

(h) To consider production schedule at the time of preparing planning and controlling the consumption of materials.

(i) To suggest ways and means for improvement in the next period budget.



Factors Governing a Material Budget.

1) The past rate of consumption and , its ratio with production

2) The financial burden and investment pattern.

3) The cost of materials.

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5.1.4 Stock Verification

.

General:

Stock verification is the process of physically counting/ weighing/ measuring all items of stores held in the stores depots and colliery stores and to compare the physical balances with stores recorded in the stock cards/ numerical ledgers. The discrepancies detected if any, will be investigated promptly and adjustment action taken at the earliest.

Object of Stock Verification:

A) Stores and materials held tally with the descriptions and Specifications.

B) The actual balances agree with the balances recorded in the stock cards / Ledgers.

C) The discrepancies noticed are investigated and adjusted.

D) Proper arrangements exist for the safe custody, proper storage, accountable proper issue of stores.

Types of Stores to Be Verified:

All items of plant & machinery, general and consumable stores, medicines and medical stores, spare parts for mining and earth moving machinery and drilling equipment and all charged off stores held in colliery/consumers units.

Responsibility:

Accounts department (internal audit) will be responsible for stock verification of stores, material, plant and machinery. It will be carried out departmentally under instructions from the chief materials manager by the stores personal of the stores depots / units independently.

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-

Duties :

A) To ensure that before commencement of the financial Year, adequate staff is positioned in all the areas and other places for stock verification.

B) To prepare 3 copies of annual stock verification Programmed.

C) To obtain progress report on stock verification periodically.

D) To carry out test check in the items verified by the stock verifiers.

E) To ensure that the reconciliation of discrepancies is carried out within a specified period.

Stock Verifier:

1) To carry out routine verification of stock comprising of any of the following:

a) Stores in the custody of stores depots/units.

b) Plant and machinery in stores ; and

c) Plant and machinery deployed in projects.

2) To carry out surprise verification of stocks wherever ordered by higher Authorities.

3) To test check the postings on the receipt and Issue side in the bin cards for The items verified by him to ensure that the receipt and issue side

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5.1.5 - Issue of Materials

The term issue hereby means supply of materials from stores to the various workshops or departments of an organization.

Generally, tools are issued to workers at the stores counter. Materials such as cotton waste, emery paper, soap, etc, are collected from the stores either by workmen or foremen. Raw material and finished components are delivered to work point either by the progress department or stores.

While Issuing Material Following Points Should Be Kept In Mind:

1) Planning of material requirement:

All requirements of material should be thoroughly planned. The bill of Material gives estimates of different items of stores required.

2)

Requisition of material:

Based on the quantities mentioned in the bill of Materials should not be issued in excess of standards. If necessary, an additional bill of material Can be issued by competent authority

3)

Internal audit of issues:

All issues should be audited. Any excess/shortfall in issues should be Explained and accounted for.

4)

Control of waste:

Actual wastage should not exceed the standard Wastage fixed. Wastages Should be examined and any variance should be reported.

5) Issue of sundry items:

Certain stores are required in various departments. Either the

Requirements can be budgeted or orders can be Placed strictly on the basis of requirements.

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5.1.6- Security And Fire Prevention..

Routine Steps for Security:

a)

Security of stores is ensured by the security department through their vigilance.

b)

The depot officer and other personnel will ensure that necessary precautions are taken to prevent loss by theft / fraud.

c)

Every day, while opening the store, the depot officer will ensure that the seals on locks are in order.

Some Important Points In Security Of Stores Is:

a) Responsibility & functions of assistant / security officer.

b) Store gate passes.

c) In and out register.

d) Visitors.

e) Opening and closing of sheds.

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Fire Prevention:

Fire is a great destructive natural force. Majority of fires which effect materials, equipment and property are attributable to carelessness, ignorance and lack of discipline and failure to observe regulations . The prevention of fire is of vital importance and must be the concern of all. Most fires can be prevented by common sense and good discipline and it is vitally important that the highest possible standard of fire prevention is achieved and maintained so that losses by fire may be reduced to minimum..

Some Important Points to Prevent Fire:

a) Smoking

b) Inflammable Materials c) Grass and undergrowth d) Stacking

e) Spontaneous Combustion

f) Storage Of Petroleum Oil and Lubricants g) Storage of gas cylinders

h) Storage of rubber

i) Electricity fire fighting equipment j) Fire practice

k) Water supply

Conclusion:

All fires have small beginning and can be effectively tackled at this stage. Fire fighting equipment is readily available. Suitability, serviceability and most important the training in the use of this equipment are equally important for effective control of fires in their initial stages. The persons selected to man fire fighting organizations should be carefully selected and properly trained in the use and maintenance of the fire fighting equipments.

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5.1.7Disposal of Stores

Disposal is a function of liquidating unnecessary Holdings in return for a price. It releases valuable storage space and locked up investment. It is

Therefore, necessary to resort to disposal of unwanted holdings, with due regard to economy and administrative convenience.

Unwanted Holdings:

a) Surplus serviceable equipment, stores and spare parts. b) Old and unserviceable plant , machinery and equipment. c) Second hand empties

d) Scrap

Some Important Points of Disposal Of Stores:

a) Surplus equipment

b) Surplus stores

c) Moveable and dead surplus

d) Surplus second hand empties

e) Unserviceable and scrap

f) Declaration of surpluses and unserviceable equipment and stores for disposal.

g) Survey committee

h) Survey report

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5.1.8 Standardization

Standardization is a process of systematization of stores, based on reduction of Varieties to a controlled workable minimum, leading to economy and efficiency. Standardization is rationalized store keeping and it has great importance in Inventory control as it leads directly to lower holdings and thereby secure a reduction in material cost, without a corresponding reduction in stock cover.

Aims of Standardization:

a) To achieve economy in terms of cost, human effort and conservation of essential & scarce material.

b) To ensure maximum convenience by simplification Rationalization to Increase productivity

c) To adopt best possible solutions to recurring problems consistent with economy & convenience.

d) To define requisite levels of quality so that practical Evaluation of quality and its attainment are made conveniently and economically.

Advantage of Standardization:

a) Standardizations lead to simplifications.

b) Standardizations lead to specifications and variety reduction.

c) Standardizations go a long way in ascertaining the best possible use of material.

d) Standardizations facilitate the inter-changeability of parts and components.

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f) Standardizations lead to easier, cheaper and quality procurement of materials.

5.1.9. Classification Of Materials

It is essential for the employees of the material department to know about the important materials being put to use in the organization. The operating Staff, particularly the storekeeper is required to make a close study of the Material during the process of storage, since he is responsible for their safe custody , meticulous handling and storing without exposing them any risk of damage , fire or pilferage.

The person in charge of materials department is also responsible for

classifying the material before they are sent for inspection , entered into the stock ledger and kept in different bins. Therefore there is a essential

requirement to make the broad classification of material , according to their nature use & service , so that easy handling of inventory may be possible. Several items carried into a store are generally divided into the following major types.

1) Raw material :

These are the raw materials and other supplies, parts and Sub-assembles which the company purchases from outside sources, Namely suppliers, dealers or manufactures . These items are to be purchased and kept in stock before and during production of goods.

2)

Purchased components :

These materials, other than above, purchased from the market and or used in completing a manufacturing process are called components.

3) Work-in-progress :

An inventory not finally produced but still to go to manufacturing process is called Work in progress or semi-finished goods.

4) Finished goods inventories :

These are complete finished products ready for sale. These products Have been manufactured or assembled from production and in

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process inventories.

5)

MRO Inventories

:

Maintenance, repairs and operating supplies which are consumed During the production process and generally do not form part of The product itself are known as MRO inventories.

6) Spares :

These are also called feed stocks .These are important inventories. The spares are governed by special policies and their problems are of special nature.

7) Inflammables :

Those items which are highly susceptible to fire, such as petrol diesel , kerosene , films , paints , paper etc. fall under this category.

8) Packing materials :

These includes all types of packing materials such as paper wood carvings , saw dust , straw etc.

9) Chemical :

Items like carbide, acids, etc can be classified under this category.

10) General Stores:

This category contains all those materials / items which do not Fall under any of the categories of stores.

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5.1.10 CODIFICATION

Any business organization stores a large number of items, often running into thousands or lakhs. Therefore, there should be some means of identifying them. Several departments use the same item by different names and store them in different places.

Codification is the process of representing each item by a number or alphabet. The digits of which indicate the group, the subordinate, the type and the dimension of the item. Sometimes the location and suppliers name are also included in the codification process.

Many organizations in the government, public and private sectors, have developed their own system of codification.

Thus, codification is a process of representing each item by a number, the digit of which indicates the group, the sub-group, the type, and the dimension of the item.

 Code for equipment

 Code for spare

 Code for check digit

 Major class code of general consumables

 Code for minor class and detail class of general consumables.

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Advantage Of Codification :

1) Facilities in avoiding long and unwieldy description.

2) Helps in providing accurate and logical identification.

3) Prevents duplication.

4) Makes standardizations of items.

5) Reduces the varieties.

6) Makes purchasing department more efficient.

7) Helps in making efficient recording and accounting.

8) Facilitates the mechanical recording.

9) Facilitates the pricing and costing.

10) Assured production as planned and as required.

Codification Methodology and Systems:

1) Alphabetical system of codification.

2) Numerical system of codification.

3) Decimal system of codification.

4) Combined alphabetical & numerical system.

5) Kodak system of codification.

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5.1.11 - Inventory Control:

Inventory control is a system which ensures the provision of the required quantity of inventories of required quality at the required time with the minimum amount of capital investment. Thus, the functions of inventory control are to obtain the maximum inventory turnover with sufficient stock to meet all requirements.

“Inventory control is, then, concerned with the control of the quantities or Monetary values of these items at predetermined level or within Safe limit”.

Essentials Of A Good Inventory Control System :

1)

Classification & identification of inventories:

The inventory includes stock of raw materials, semi-finished goods, Finished goods and components etc.

2)

Standardizations & simplification of inventory:

For proper inventory control standardizations of material products as well as simplification of the production is necessary.

3)

Adequate storage facilities:

Adequate and well organized warehouse facilities with well equipped Proper handling facilities must be there.

4) Setting different levels & reorder points:

Just to avoid the chances of over and under investment as well as running short of an item during the course of production.

5) Fixing economic reorder quantity:

In determining the economic order quantity (EOQ), the two opportunity costs, ordering costs and carrying costs should be balanced.