sip project rpt

7/31/2019 SIP Project Rpt

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STEEL AUTHORITY OF INDIA LTD. IIBR-PUNE

I

A PROJECT REPORT

ON

A STUDY ON MATERIAL MANAGEMENT SYSTEM

AT

STEEL AUTHORITY OF INDIA LIMITED I.S.P-BURNPUR

SUBMITTED BY

SUBHANKAR SINGHA

PGDM - OPERATION MANAGEMENT

ROLL NO - 10332

IN

PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN

MANAGEMENT

SPECIALISATION OPERATIONS MANAGEMENT

INSTITUTE OF INTERNATIONAL BUSINESS & RESEARCH

(2010-2012)


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II

A PROJECT REPORT

ON

A STUDY ON MATERIAL MANAGEMENT SYSTEM

AT

STEEL AUTHORITY OF INDIA LIMITED I.S.P- BURNPUR

SUBMITTED BY

SUBHANKAR SINGHA

UNDER THE GUIDANCE OF

MR. SAGAR BHADANGE MR. Y.S Reddy

ASST. PROFESSOR D.G.M R.M

I.I.B.R - PUNE SAIL-I.S.P (BURNPUR)

A PROJECT REPORT SUBMITTED IN PARTIAL FULFILMENT

OF THE REQUIREMENT OF P.G.D.M

INSTITUTE OF INTERNATIONAL BUSINESS & RESEARCH

(2010-2012)


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III

ABSTRACT

Material control means keeping the overall costs associated with having inventory as

low as possible without creating problems. Inventories are classified into raw

materials, consumables, work in progress and finished goods. When the good is

completed as to manufacturing but not yet sold or distributed to the end-user, it is

called a "finished good".

In this project I have done high valuable items of Canopy. Inventory control, and reduce the

carrying and holding cost of the materials.

And the end of my internship session I have reached the suggestion and conclusion.

SUBHANKAR SINGHA

Roll No. 10332


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IV

PREFECE

Material has always been a source of money generation and acts as central hub behind mostly

all types of production and manufacturing activities in the field of business.

I have undertaken this project as part of my course curriculum. The aim of this project is to

give corporate exposure and an insight to SAIL, I.S.P Steel Plant.

SAIL is Indias largest and one of the leading Steel makers of the world. It has four integrat ed

plants at Durgapur, Bokaro, Bhilai and Rourkela. One subsidiary plant at Burnpur, as well as

four alloy steel plant which together have capacity of 12.5 MT (million tons) of crude steel

and 3, 70,000 tonnes of special and alloy steel annually. Steel Authority Of India Limited

produces a wide range of prime steel products, coal based products and fertilizers.

The secondary products are produced during the production of prime products. Individually

marketing is done for the secondary products level at IISCO STEEL PLANT. Thus I tried my

level best of using my analytical skills to prepare a project on the study of marketing

department of IISCO Steel Plant of Steel Authority Of India Limited as per data collected.


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V

SELF CERTIFICATE

This is certify that SUBHANKAR SINGHA, student of PGDM of

INSTITUTE OF INTERNATIONAL BUSINESS & RESEARCH has successfully

accomplished were SUMMER INTERNSHIP PROJECT from 1st June to 20 th July 2011 in

STEEL AUTHORITY OF INDIA LIMITED IISCO STEEL PLANT under the

supervision of me. His efforts were appreciable during the SUMMER INTERNSHIP

schedule and achieved the target within stipulated time deadlines provided to him. Hope he

gets the best opportunities in future and accomplished all objectives.

THANKING YOU

SUBHANKAR SINGHA

ROLL NO. 10332


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VI

ACKNOWLEDGMENT

It is my great pleasure to have done PROJECT TRAINING IN MATERIAL DEPARTMENTOF SAIL ISP, BURNPUR.During the project works, I got the opportunity to visit almost every department and meet thefollowing executives, who gave personal attention to me while explaining the functioning of the factory & the organization.

As a whole any project is not an outcome of a great experience to learn from them. I wouldlike to express deep gratitude and respect to all for their whole hearted support, without whosehelp my project would not have been completed.

I would like to thanks from the department of my IISCO STEELPLANT:

1. MR. S.K. PRATIHER D.G.M [H.R.D CENTRE]

2. MR. A.K MONDAL A.G.M [H.R.D CENTRE]

3. MR. KANAD CHATERJEE Jr. Manager [H.R.D CENTRE]

I would also like to express my deepest gratitude to respected

1. MR. Y.S Reddy [D.G.M - RAW MATERIAL]

2. MR. S. P.BHADANGE [ASST. PROFESSOR, IIBR PUNE]

For his wholehearted support, without his help this report would not have been completed. Heguided me through the project and helped in this research process.

Last but not least, I would like to thanks Prof. S.B MATHURE [DIRECTOR], I.I.B.R forallowing me to take up my project through this esteemed institute.

THANKING YOU

SUBHANKAR SINGHA


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VII

TABLE OF CONTENTS

Chapter No. TITLE Page No.

I. LIST OF FIGURES 29.

Chapter 1 INTRODUCTION 1.

1.1) COMPANY PROFILE 2.

1.2) SAIL MAJOR UNITS 5.

1.3) CENTRAL UNITS 6.

1.4) ABOUT SAIL I.S.P 7.

1.5) FACILITIES AT I.S.P 9.

1.6) SWOT ANALYSIS OF I.S.P 10.

1.7) SAIL TODAY 12.

1.8) TYPES OF ORGANISATION -

1.9) ACTIVITIES 13.

1.10) MISSION AND VISION OF THEORGANISATION 14.


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VIII

TABLE OF CONTENTS


1.11) BOARD OF DIRECTORS 15.

Chapter 2 OBJECTIVES AND IMPORTANCE 16.

Chapter 3 LIMITATION OF THE STUDY 18.

Chapter 4 RESEARCH METHODOLOGY 20.

1.1) DATA COLLECTION 21.

1.2) METHODS OF DATA ANALYSIS 22.

Chapter 5 REVIEW OF LITERATURE 23.

1.1) INTRODUCTION OF THE STUDY 24.

1.2) AREAS OF CONCENTRATION 26.

1.3) PROMOTING SUSTAINABILITY 27.

1.4) IMPROVING CIRCULATION INFRASTRUCTURE 28.

1.5) MATERIAL MANAGEMENT WEEK -


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TABLE OF CONTENTS


Chapter 6 EMPIRICAL ANALYSIS 29.

1.1) MM MASTER DATA REPORT 32.

1.2) MM PROCUREMENT AND STOCK REPORT 34.

i) LOGISTICS INFORMATION REPORT (STOCK) -

ii) PURCHASING IMFORMATION SYSTEM 35.

iii) PURCHASING REPORT 36.

iv) STOCK REPORT 37.

v) PHYSICAL INVENTORY REPORTS -

vi) MRP REORDER POINT -

1.3) THE BASIC OF RAW MATERIAL 39.

1.4) YEAR WISE MATERIAL PROFIT FIGURE 40.

1.5) YEAR WISE NET MATERIAL PROFIT 41.

1.6) RM ACCOUNTING SYSTEM 42.

i) BY RAILWAY 43.

ii) BY GOODS PECEIPT INSPECTION NOTE 44.


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TABLE OF CONTENTS


1.7 RAW MATERIAL DIVISION 45.

Chapter 7 FINDING AND SUGGESTION 48.

Chapter 8 CONCLUSION 53.

Chapter 9 REFERENCE 54.


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1

Chapter 1

INTRODUCTION


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1.1) ABOUT STEELAUTHORITY OF INDIA

Steel Authority of India Limited (SAIL ) is one of the largest state-owned steel makers

in India. With a turnover of 48,681 crore (US$10.86 billion), the company is among the top

five highest profit earning corporate of the country. It is a public sector undertaking which

trades publicly in the market is largely owned by Government of India and acts like an

operating company. Incorporated on January 24, 1973, SAIL has more than 131,910

employees. The company's current chairman is C.S Verma. With an annual production of 13.5

million metric tons, SAIL is the 16th largest steel producer in the world.

Major plants owned by SAIL are located :

at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur (near Asansol) and Salem. SAIL is a public

sector company, owned and operated by the Government of India. According to a recent

survey, SAIL is one of India' s fastest growing Units. Besides, it has R&D Centre for Iron &

Steel (RDCIS), Centre for Engineering and Technology (CET), Management Training

Institute (MTI) and SAIL Safety Organization (SSO) located at Ranchi capital of Jharkhand.

History:

1959-1973

SAIL traces its origin to the Hindustan Steel Limited (HSL) which was set up on January 19,

1954. HSL was initially designed to manage only one plant that was coming up at Rourkela.

For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel

Ministry. From April 1957, the supervision and control of these two steel plants were also

transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to

Calcutta in July 1956 and ultimately to Ranchi in December 1959.
http://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Bhilaihttp://en.wikipedia.org/wiki/Bokarohttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Rourkelahttp://en.wikipedia.org/wiki/Burnpurhttp://en.wikipedia.org/wiki/Asansolhttp://en.wikipedia.org/wiki/Salem,_Tamil_Naduhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/w/index.php?title=Hindustan_Steel_Limited&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Rourkela_Steel_Plant&action=edit&redlink=1http://en.wikipedia.org/wiki/Bhilai_Steel_Planthttp://en.wikipedia.org/wiki/Durgapur_Steel_Planthttp://en.wikipedia.org/wiki/Ministry_of_Steel_(India)http://en.wikipedia.org/wiki/Ministry_of_Steel_(India)http://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Ministry_of_Steel_(India)http://en.wikipedia.org/wiki/Ministry_of_Steel_(India)http://en.wikipedia.org/wiki/Durgapur_Steel_Planthttp://en.wikipedia.org/wiki/Bhilai_Steel_Planthttp://en.wikipedia.org/w/index.php?title=Rourkela_Steel_Plant&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Hindustan_Steel_Limited&action=edit&redlink=1http://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Salem,_Tamil_Naduhttp://en.wikipedia.org/wiki/Asansolhttp://en.wikipedia.org/wiki/Burnpurhttp://en.wikipedia.org/wiki/Rourkelahttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Bokarohttp://en.wikipedia.org/wiki/Bhilaihttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Steel


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A new steel company, Bokaro Steel Limited (Bokaro Steel Plant) , was incorporated in

January 1964 to construct and operate the steel plant at Bokaro.

Bhilai and Rourkela Steel Plants were completed by the end of December 1961. The 1 MT

phase of Durgapur Steel Plant was completed in January 1962 after commissioning of the

Wheel and Axle plant. The crude steel production of HSL went up from 1.58 MT (1959 60)

to 1.6 MT. The second phase of Bhilai Steel Plant was completed in September 1967 after

commissioning of the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the

Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel

Plant was completed in August 1969 after commissioning of the Furnace in SMS. Thus, with

the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur,

the total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and

subsequently to 4MT in 1972-73.

1973 - Present

The Ministry of Steel and Mines drafted a policy statement to evolve a new model for

managing industry. The policy statement was presented to the Parliament on December 2,

1972. On this basis the concept of creating a holding company to manage inputs and outputs

under one umbrella was mooted. This led to the formation of Steel Authority of India Ltd.

The company, incorporated on January 24, 1973 with an authorized capital of Rs. 2000 crore,

was made responsible for managing five integrated steel plants at Bhilai, Bokaro, Durgapur,

Rourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Plant. In 1978 SAIL was

restructured as an operating company.

Since its inception, SAIL has been instrumental in laying a sound infrastructure for the

industrial development of the country. Besides, it has immensely contributed to the
http://en.wikipedia.org/wiki/Bokaro_Steel_Planthttp://en.wikipedia.org/wiki/Bokaro_Steel_Plant


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development of technical and managerial expertise. It has triggered the secondary and tertiary

waves of economic growth by continuously providing the inputs for the consuming industry.

SAIL today is one of the largest industrial entities in India. Its strength has been the

diversified range of quality steel products catering to the domestic, as well as the export

markets and a large pool of technical and professional expertise.


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1.2) MAJOR UNITS :

SAIL Integrated Steel Plants:

Rourkela Steel Plant (RSP) in Orissa set up with German collaboration (The first

integrated steel plant in the Public Sector in India, 1959)

Bhilai Steel Plant (BSP) in Chhattisgarh set up with Soviet collaboration (1959)

Durgapur Steel Plant (DSP) at Durgapur, West Bengal set up with British collaboration

(1965)

Bokaro Steel Plant (BSL) in Jharkhand (1965) set up with Soviet collaboration (The Plant

is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous

content in terms of equipment, material and know-how)

IISCO Steel Plant (ISP) at Burnpur, West Bengal

Special Steel Plants

Steel Authority of India Limited (SAIL), Kanpur, Uttar Pradesh

Alloy Steels Plants (ASP), Durgapur, West Bengal

Salem Steel Plant (SSP), Tamil Nadu

Visvesvaraya Iron and Steel Limited (VISL), at Bhadravathi, Karnataka

Subsidiaries

Maharashtra Electro-smelt Limited (MEL) in Maharashtra.
http://en.wikipedia.org/w/index.php?title=Rourkela_Steel_Plant&action=edit&redlink=1http://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/wiki/Bhilai_Steel_Planthttp://en.wikipedia.org/wiki/Chhattisgarhhttp://en.wikipedia.org/wiki/Durgapur_Steel_Planthttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Bokaro_Steel_Planthttp://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/wiki/IISCOhttp://en.wikipedia.org/wiki/Burnpurhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Kanpur,_Uttar_Pradeshhttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Visvesvaraya_Iron_and_Steel_Limitedhttp://en.wikipedia.org/wiki/Bhadravathihttp://en.wikipedia.org/wiki/Karnatakahttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Karnatakahttp://en.wikipedia.org/wiki/Bhadravathihttp://en.wikipedia.org/wiki/Visvesvaraya_Iron_and_Steel_Limitedhttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Kanpur,_Uttar_Pradeshhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Burnpurhttp://en.wikipedia.org/wiki/IISCOhttp://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/wiki/Bokaro_Steel_Planthttp://en.wikipedia.org/wiki/Durgapur,_West_Bengalhttp://en.wikipedia.org/wiki/Durgapur_Steel_Planthttp://en.wikipedia.org/wiki/Chhattisgarhhttp://en.wikipedia.org/wiki/Bhilai_Steel_Planthttp://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/w/index.php?title=Rourkela_Steel_Plant&action=edit&redlink=1


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1.3) Central Units

Centre for Engineering and Technology

Research and development centre for iron and steel

Management Training Institute

SAIL safety organization

Raw materials division

Central Marketing Organization

SAIL consultancy organization


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1.4) ABOUT SAIL IISCO STEEL PLANT (ISP):

IISCO Steel Plant (ISP), an integrated steel plant in Burnpur, has the capacity to produce 4.26

lakh tones of saleable steel and 2.54 lakh tones of pig iron annually. ISP, the erstwhile Indian

Iron & Steel Company (IISCO), which was a 100% subsidiary of Steel Authority of India

Limited (SAIL), has been amalgamated with the parent company with effect from 16

February 2006.

ISP produces a large number of steel structural and special sections as well as pig iron. The

plant pioneered the production of center sill Z-section used in the fabrication of wagon and

Z-type sheet piling section used in construction of barrages, bridge foundations and other

projects and colliery arch section used for roof support in collieries. The plant has also

developed slit rolling for small diameter rounds (10 mm and 12 TMT), which are in high

demand in the domestic market.

The plant is set to undergo modernization-cum-capacity expansion though which its hot metal

production capacity will be raised to 2.5 MT by 2011-12.

ISP is accredited with ISO 9001:2000 QMS for its Heavy Structural Mill and Merchant &

Rod Mill. It has also been awarded ISO 14001:2004 EMS for its entire Rolling Mill

Complex.


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LOCATION :

ISP is situated at Burnpur near Asansol in the Burdwan district of West Bengal.

HISTORY:

The origin of ISP can be traced to 1874 when James Erskine founded the Bengal Iron Works

and set up a plant at Kulti (in West Bengal) to produce pig iron. In 1918, the erstwhile IISCO,

promoted by Burn and Company, came into being after changing hands several times. Themanufacture of steel at Burnpur started in 1939. By the middle of the 1960s, the plant, under

the chairmanship of industrialist Sir Biren Mukherjee, was producing one million tons a year.

On July 4, 1972, the company was taken over by the Government of India. In March 1979, it

was made a wholly-owned subsidiary of SAIL.

The erstwhile IISCO was once quoted on the London Stock Exchange, and had the pride of

place on the Calcutta Stock Exchange in the early 1960s.


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1.5) FACILITIES AT ISP

Coke Oven:

Two coke oven batteries each of height 4.5 m and capacity 18.6 t of dry coal

BLAST FURNASE:

Two blast furnaces each of useful volume 1170 cu m.

Steel Melting Shop (SMS):

1 Twin Hearth Furnace of 2110 t capacity.

Rolling Mills:

32 Soaking Pits;

Blooming Mill capacity 0.9 Mtpa

Billet Mill capacity 0.8 Mtpa

Heavy Structural Mill capacity 0.25 Mtpa

Light Structural Mill capacity 0.12 Mtpa

Merchant & Rod Mill capacity 0.15 Mtpa


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1.6) SWOT ANALYSIS OF SAIL IISCO STEEL PLANT (I.S.P)

STRENGTH:

SAIL, ISP was an independent company namely Indian Iron and Steel Company, so it

is the oldest plant in our country. It has capacity to produce 4.26 lakh tonnes of

saleable steel and 2.54 lakh tonnes of pig iron annually. The plant well connected by

the roadways like national highway and railways so the transportation of raw material

and finished goods can move here and there easily. The plant situated beside the river

Damodar so no problem of water to the plant for its production.

WEAKNESS:

IISCO steel plant is an old plant so there is a lack of new technology and mechanism.

Company apply those technologies which is absolute in the market. Company getting

high rate of raw materials like Coal and Iron Ore because of the bad quality of local

Coal, so the company import the coal from Australia, United States and Canada. It

direct effect to the cost of production and it increases accordingly.

OPPORTUNITIES:

It has the great opportunities after the amalgamation with SAIL. Because SAIL is the

leading company in production of steel in India. Prime Minister Man Mohan Singh

inaugurated the work for an Rs.9, 600 crore modernisation programme at Burnpur on

24 December 2006. It is largest investment in West Bengal in the last ten years.


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THREATS:

SAIL has the 5 plant and total 6 plants are very near to each other like 3 plants in West

Bengal, 1 in Jharkhand, 1 in Orissa and last one in Chhattisgarh, so a little mistake

will be a big opportunity for the other plant. A huge competition with each other.

Minimize the cost of production is a big challenge for the management of IISCO

STEEL PLANT.


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1.7) SAIL TODAY

SAIL today is one of the largest industrial entities in India. Its strength has been the

diversified range of quality steel products catering to the domestic, as well as the export

market standa large pool of technical and professional expertise. Today, the accent in SAIL is

to continuously adapt to the competitive business environment and excel as a business

organization, both within and outside India.

1.8) TYPE OF ORGANISATION

Steel Authority of India' - A Government of India Enterprise and one of the largest and

profit making public sector steel products manufacturing company.

SAIL produces for both basic and special steels for construction, engineering, power, railway,

automotive and defense industries and caters to Indian and International markets. SAIL has 6

steel plants, one subsidiary, three special steel plants, multi marketing units at all regions and

nine other specialized units to support growth and development of the Steel Industry in India.

Its produces are Blooms, Billets, Slabs, Crane Rails, Bars, Rods & Re-bars, Wire Rods, Coils,

Sheets, Plates, CR Coils & Sheets, GC Sheets, GP Sheets and Coils, Tinplates , Electrical

Steel, Tubular Products, Pipes, Railway Products, Rails, Wheels, Axles, Wheel Sets.


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1.9) ACTIVITIES

SAIL production lines are -

Hot Rolled Coils, Sheets

Cold Rolled Products.

Bars and Rods.

Semi-Finished Products.

Railway Products.

Specialty Products.

Plates.

Structural.

Alloy and Stainless Products.

Moreover, Steel Authority of India offers technological services in the following domains -

Know-how transfer of technologies developed by its R&D wing.

Consultancy services.

Specialized testing services.

Contract research.

Training


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1.10) MISSION OF THE ORGANISATION:

Sustained growth through internal generation of resources is the hallmark of the

corporate mission.

VISSION OF THE ORGANISATION:

To be respected world class corporation and the leader in Indian Steel business in

Quality, productivity, profitability and customer satisfaction.


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1.11) BOARD OF DIRECTORS

Shri C.S. VERMA - Chairman of SAIL

Managing Director:

1. Shri S.P. Rao - Burnpur

2. Shri P.K. Bajaj - Durgapur (D.S.P)

3. Shri S.N. Singh - Rourkela

4. Shri S.S. Mohanty - Bokaro

5. Shri R. Ramaraju - Bhilai

6. Shri S.P. Patnaik - Durgapur (A.S.P)

FUNCTIONAL DIRECTORS:

Shri Shoeb Ahmed - Commercial

Y.S Reddy - Material Management

Shri G. Ojha - Personnel

Shri K.K. Khanna - Technical


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Chapter 2

OBJECTIVES AND IMPORTANCE


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OBJECTIVES OF THE STUDY

1. To study the difference types of material used for production system.

2. To study the purchasing procedure of purchase departments.

3. To study the documentation procedure used for managing the materials.

4. To find out the difficulties in purchasing.

IMPROTANCE OF THE STUDY

By deciding inventory norms rationally and through control systems.

Inventory Turnover can be maximized which in turn will maximize current

Assets Turnover and ROI

By proper planning and control of Spare parts, capacity utilization can be

increased which will increase the turnover of Fixed Assets and consequently

increase ROI

By developing dependable sources and purchasing quality materials at

competitive prices, materials cost per rupee of sales can be brought down

which will increase Profit Margin and in turn ROI.

By developing proper systems and control on issue of materials, the

consumption can be minimized, resulting in reducing the materials cost,

which will increase the Profit Margin and also ROI.


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Chapter 3

LIMITATION OF THE STUDY


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LIMITATIONS OF THE STUDY

1. The analysis and interpretation are based on secondary data only.

2. To published the annual reports of SAIL for the study period.

3. Only the purchasing is being considered in the Project

4. The analysis is based on figures presented in the internal record only.


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Chapter 4

RESEARCH METHODOLOGY


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RESEARCH METHODOLOGY:

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. So, the research

methodology not only talks about the research methods but also considers the logic behind the

method used in the context of the research study.

RESEARCH DESIGN:

Descriptive research is used in this study because it will ensure the minimization of bias and

maximization of reliability of data collected. The researcher had to use fact and information

already available through statements of earlier years and analysis these to make critical

evaluation of the available material. Hence by making the type of the research conducted to

be both Descriptive and Analytical in nature.

From the study, the type of data to be collected and the procedure to be used for this purpose

were decided.

1.1) DATA COLLECTION:

Data collection can be done in two ways:

1) Primary Data

2) Secondary Data.

1) Primary Data

The Data was collected through the Finance department, Materials department,

Purchase Department and Store department. Interview and Observation is the main

source of collecting primary data.


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2. Secondary Data

The Secondary data has been collected from companys recorded files. The hard copy

gave detailed data of the Material status in the organization. Secondary data is taken by

the researcher from secondary sources, internal or external

2.1) METHODS OF DATA ANALYSIS:

The data collected were edited, classified and tabulated for analysis. The analytical tools used

in this study are:

ANALYTICAL TOOLS APPLIED :

The study the following analytical tools

1. Materials Editor

2. Loading Materials

3. Restoring Default Materials

4. Replace.


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Chapter 5

REVIEW OF LITERATURE


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1.1) INTRODUCTION OF THE STUDY

Materials Management System (MMS) - a real-time fleet-wide inventory and

consumables management system available both at an individual shipboard level andat a cruise lines headquarters, across a fleet of vessels, enabling comple te and

constant central control of all consumables. Materials Management System provides

minute-by-minute tracking of sales and stocks and offers significant opportunities to

raise procurement efficiency.

Features and Functions

Uses weights and volume of individual units to calculate the volume of a package

Multiple quantities of measures of items including catch weight, pallets, bricks, bales,

totes, tank cars

Product attributes searching and matching at order entry

Tracks variations in chemical and physical properties of a product without changing

numbers

Available-to-promise (ATP) reflects the realities of inventory coming out of

inspection and shelf life expiration

Ability to pack multiple items into a single package for sale

Hard and soft allocation

Quality specification matching for order fulfilment

Tolls and exchanges (the chemical industry co-petition practice)


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Issues containerized receipts for the use and return of specialized containers

Pre-assigned lot/serial numbers to items during order creation

Actual cost and receiving date maintenance for lot and serial controlled items

Upward and downward lot/serial traceability (cradle-to-grave)

System handles equivalent products, locations, and packages

Sub-lots with their own unique attributes

Potency units of measure

Converts items from volume, weight, and units, automatically

Creates status codes used to monitor quality, or potency/grade deterioration in lots

Product attribute (for example, pH level) tracking from batch to batch

Converts unit values of a containers, such as barrel, bag, or box to unit volume weight,

of mass

The system caters for proactive, forward, and backward heat traceability

Ability to plan and schedule predictive maintenance

Concurrent materials and capacity, non-iterative finite planning and scheduling

Multiple sources/sites of supply (supply sourcing tables)

Plan and prioritize materials in bulk

System handles flow rates from feedstocks to bulk (rail , cars and barges)

Pipeline versus "on-hand" inventory management

Production wheel--dynamic versus static analysis of production requirements planning

Distribution requirements planning (DRP)-distribution network-wide inventory


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visibility

Distribution network and warehouse locator availability

Transport load planning by weight, volume, and number of containers

In-transit tracking and confirmation

Push surplus perishable raw material supply through the entire supply chain

Materials Management is the branch of logistics that deals with the tangible components of

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

quality control of purchasing and ordering such parts, and the standards involved in ordering,

shipping, and warehousing the said parts.

1.2) Areas of Concentration

Goals:

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

creates truck deliveries and service vehicle routes that reduce conflicts for vehicles and

pedestrians. Delivery sites and loading docks are more effective and reduce redundancy. Cost

is reduced when it comes to solid and hazardous waste removal, storage, and recycling. Utility

infrastructure and service equipment relocation can improve aesthetics.

Quality Assurance:

A large component of materials management is ensuring that parts and materials used in the

supply chain meet minimum requirements by performing quality assurance (QA). While most

of the writing and discussion about materials management is on acquisition and standards,

much of the day to day work conducted in materials management deals with QA issues. Parts


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

are no short or long term issues that would disrupt the supply chain. This aspect of material

management is most important in heavily automated industries, since failure rates due to

faulty parts can slow or even stop production lines, throwing off timetables for production

goals.

Standards:

The other major component of materials management will be gradual movement toward

compliance. There are standards that are followed in supply chain management that are

important to a supply chain's function. For example, a supply chain that uses just-in-time or

lean replenishment requires clarity. In the shipping of parts and material from purchasing

agent to warehouse to place of destination. Systems reliant on vendor-managed inventories.

May begin to acquire up-to-date computerized inventories and begin to explore robust

ordering systems for outlying vendors to place orders on.

1.3) Promoting Sustainability

Many business and institutional campuses have cluttered, noisy, and oftentimes inefficient

service environments. Delivery truck competes with pedestrians, loading docks are in plain

sight, trash dumpsters sprout up, and lobbies, hallways, and stairwells are cluttered with

unplanned storage. With forethought and creativity, these systems can reduce energy use and

carbon emissions, minimize traffic congestion, streamline operational flows, and enhanceesthetics.


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1.4) Improving Circulation Infrastructure

Redundancy can be reduced and effectiveness is increased when service points are clustered

to reduce the amount of redundancy. An effective materials management program can also

resolve island approaches to shipping, receiving, and vehicle movement. Solutions can

include creating a new central loading location, as well consolidating service areas and docks

from separate buildings into one. Developing better campus circulation infrastructure also

means re-evaluating truck delivery and service vehicle routes. Vehicle type, size, and

schedules are studied to make these more compatible with surrounding neighborhoods. This

will reduce truck traffic, creating a safer environment for pedestrians and a more attractive

environment for other uses.

1.5) Materials Management Week

Each year, an entire week is dedicated to celebrating resource and materials management

professionals for their outstanding contributions to healthcare and the overall success of the

supply chain. Sponsored by the Association for Healthcare Resource & Materials

Management (AHRMM), National Healthcare Resource & Materials Management Week

(MM Week) provides an opportunity to recognize the integral role materials management

professionals play in delivering high-quality patient care throughout the health care industry.

In 2010 Material Management Week is October 4-10 October.


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Chapter 6

EMPIRICAL ANALYSIS


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LIST OF FIGURES:

Experiment Requirements Documents (ERD):

Flow Diagram


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Material Procurement System (M.P.S):

Flow Diagram


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1.1) SAIL MATERIAL MANAGEMENT REPORTS

Materials Management: Master Data Reports

Master Data

MM03 Display Material Master

MK03 Display Vendor Purchasing

MK04 Purchasing Vendor Changes

XK03 Display Vendor Central

XK04 Central Vendor Changes

ME1L Info Records by Vendor

ME1M Info Records by Material

ME1P Purchase Order Price History

ME1E Quotation Price History

ME13 Display Info Record

ME14 Display Info Record Changes

ME03 Display Source List

ME04 Display Source List Changes

MEQ3 Display Quota Arrangement

MEQ4 Display Quota Arrangement Changes

MKVZ Display Purchasing Vendor List

MKVG Display Vendor Condition Groups

MSC3N Display Batch


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MEKA Display Purchasing Conditions

Display Message Condition RFQ

MN06 Display Message Condition Purchase Order

MN09 Display Message Condition Scheduling Ag.

MN12 Display Message Condition Delivery Shed.

MM60 Display Materials List


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1.2) Materials Management: Procurement and Stock Reports

i) Logistics InformationReports (STOCK)

MCBA Plant

MCBC Storage Location

MCBE Material

MCBR Batches

MC.9 Material Stock

MC.A Material Receipts / Issues

MC.B Inventory Turnover Material

MC.1 Plant Stock

MC.2 Plant Receipts / Issues

MC.3 Plant Inventory Turnover

MC.5 Stock Storage Location

MC.6 Storage Location Receipts / Issues

MC.7Storage Location InventoryTurnover


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ii) Purchasing InformationSystem

MCE1 Purchase Group Analysis

MCE3 Vendor Analysis

MCE5 Material Groups Analysis

MCE7 Material Analysis

MC$G Material Purchasing Values

MCSI Material Purchasing Quantities

MCSO Material Frequencies

MCS4 Vendor Purchasing Values

MC$6 Vendor Purchasing Quantities

MC$: Vendor FrequenciesMC$0 Purchasing Group Values

MC$2 Purchasing Group Frequencies

MC$< Material Group Purchasing Values

MC$>Material Group PurchasingQuantities

MC$E Material Group Frequencies


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iii) Purchasing Reports

ME80FNGeneral Analysis of PurchasingDocuments

ME81N Analysis of Order Values

ME23N Display Purchase Order

ME53N Display Purchase Requisition

ME5A List Display Of Requisitions

ME33L Display Scheduling Agreement

ME39 Display Delivery Schedule

ME43 Display RFQ

ME4L List RFQ by Vendor

ME4M List RFQ by MaterialME4S List RFQ by Collective Number

ME48 Display Quotation

ME2L Purchasing Documents per Vendor

ME2M Purchasing Documents per Material

ME2K

Purchasing Documents by Account

Assignment

ME2WPurchasing Document by SupplyingPlant

ME2V Expected Goods Receipts

MD13 Display Planned Order Single

MD16 Display Planned Order Collective


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iv) Stock Reports

MMBE Stock Overview

MB51 Material Document List

MB03 Display Material Document

MB54 Vendor consignment stocks

CO09 Material Availability

MB5C Batch Where Used Pick Up List

v) Physical Inventory Reports

MI22Physical Inventory Document material

MI23 Physical Inventory Data material

MIDO Physical Inventory Overview

MI03Display Physical InventoryDocument

MI06 Display Count Document

vi) M.R.P Reorder Point

MD21 Display Planning File Entries

MDREPlanning File Entries ConsistencyReport


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MD04 Stock Requirements List

MD05 MRP List Material Display

MD06 MRP List Collective Display

MD07 Stock Requirements List Collective


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1.3) The Basic Raw Materials

The Various Raw Materials Used in the Production Of steel Are as Follows:

COKING COAL

IRON ORE

MANGANESE ORE

LIM STONE

DOLOMITE

ALLUMINIUM

SULPHURIC ACID

STEEL SCRAP

FERRO MANGANESE.


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1.4) CHART SHOWING SCALE

Chart No.1:

Fig - Year Wise Materials Profit Figures

16233 15502

19207

24178

31805 32280

39189

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2001 2002 2003 2004 2005 2006 2007


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1.5) CHART SHOWING SCALE

Chart No.2:

Fig - Chart Showing Year Wise Net Material Profit

-1707

2512

6817

4013

6202

-304-729

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

7000

8000

2001 2002 2003 2004 2005 2006 2007

years

P r o

f i t i n R s .

C r o r e s


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1.6) RAW MATERIAL ACCOUNTING SYSTEM

Various departments involve in this section are:-

Raw material purchase

Material department

Consumer department

Finance department

Bill Section

The raw materials that are being used are:-

Iron ore

Coal

1. Wash Coal Prime

2. Indian Coal

3. Imported Coal (Australia, U.S, Canada) etc.

Manganese ore

Lime stone : Low and High Silica

Dolomite

Ferro Manganese

Ferrosilicon

Silicon Manganese

Copper


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Aluminium

Dolofet

Petroleum Coke

H2SO4 Acid

Quartzite

Billets

Scraps

The raw material is also done in two ways

1.1) BY RAILWAY

Maximum imported materials are done by railways.

It consists of two parts:-

The actual weight

The chargeable weight.

Fright is not calculated on the actual weight. It is calculated on the chargeable weight.

Chargeable weight is always greater than the actual weight.


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1.2) BY GOODS RECEIPT INSPECTION NOTE

Goods receipt note is prepared by the store and warehouse department for accounting

the receipt of goods. Purchase from suppliers. When receipt is prepared in software,

inventory is updated with quantity and value. It will also update the materials records.


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1.7) RAW MATERIAL DIVISION

SAIL has the second largest mining outfit in the country. The mines of SAIL started their

operations as captive sources of raw materials for its integrated steel plants. Major portion of

its mining activities is managed by Raw Materials Division (RMD). Other mines are the

Bhilai group of mines and the mines of VISL. The Raw Materials Division (RMD) was

formed in 1989 with the avowed purpose of creating synergy of all the SAIL mines in the

eastern sector, to rationalize supply of basic raw materials to the steel plants so as to achieve

self-sufficiency in quality iron ore. Presently RMD, with its headquarters at Kolkata, manages

7 Iron Ore Mines and 3 operating flux mines, salient features of which are given below :

SL. NO MINES STATEYEAR OF

COMMISSIONING

RATEDCAPACITY (

IN MT)

Iron ore

1. KIRIBURU JHARKHAND 1964 4.25

2. MEGHAHATUBURU JHARKHAND 1985 4.30

3. BOLANI ORISSA 1960 4.20

4. BARSUA ORISSA 1960 2.01

5. KALTA ORISSA 1966 1.10

6. GUA JHARKHAND 1919 2.4

7. MANOHARPUR (Chiria) JHARKHAND 1907 0.7

Flux

6. Kuteshwar (Limestone) MADHYA PRADESH 1974 1.10

7. Bhawanathpur (Limestone) JHARKHAND 1979 0.80

8. Tulsidamar (Dolomite) JHARKHAND 1970 0.34


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In tune with the corporate plan 2012 of SAIL, various capacity expansion projects have been

taken up at the RMD mines so as to cope up with the enhanced requirement of iron ore and

limes stone of desired quality. The major projects cover the Expansion of capacity of Bolani

Ore Mines, Development of Central Block at Meghahatuburu Iron Ore Mine, Development of

South Block at Kiriburu Iron Ore Mine, Mechanization and development of Chiria Mines,

Development of Taldih Block, and Opening a new mine at Thakurani. RMD also has a

centralized workshop at Bolani for repair/overhauling of engines & transmission of heavy

earthmoving machinery operating at the mines. Besides the above, RMD has three Customer

Services Offices (CSO) at Rourkela, Durgapur & Bokaro and three Liaison offices at New

Delhi, Bhubaneswar, and Ranchi for liaison and better coordination with various government

agencies as well as different statutory agencies .


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FINDINGS:

1. List of Material Studied As Per P.R :

Iron Ore

Coal

Manganese Ore

Dolomite

Ferro Manganese

Ferro Silicon

Silicon Manganese

Copper

Aluminium

Dolofet

Petroleum Coke

2. Purchasing Procedure Delay & Problems:

It is difficult to find out new suppliers for a non regular item of material.

If the material are not available to regular supplier, then it face difficulties because, it

required finding out the new suppliers and then whole procurement process need to be

followed from the beginning, which takes lots of time and it may hampered the

production process.


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3. Difficulties In Purchasing:

Indent is receiving from the various departments where material is required.

Stamp.

Date of received of indent is recorded.

Indent is check by the H.O.D and it is distributed accordingly to as per the respective job

allocated for purchasing material.

Inquiry Process.

Sending inquiry to the suppliers.

Quotation / Offer are received in the purchase department by the distributer of the material.

The distributer who sending less price offer of this item. They get the order.

Place the order to the supplier reported the lowest price.

The whole process is taken the much more time.


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2. SUGGESTION:

i. Research and development department of SAIL I.S.P should look for the

problem and invent or discover a new process for procuring the Materials. This is

beneficial for the company.

ii. The company should have well prepared plans for procurement, so that any delay

should not hamper the production system.

iii. Procurement process should be compact and more flexible to avoid errors and

delay.

iv. Since SAIL I.S.P is yet to implement SAP and ERP system. They should work

towards the integration of the systems into the Material procurement process.


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Chapter 8

CONCLUSION


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CONCLUSION

Material Management System is the life blood of every business. Without effective Material

Management a company cannot in this competitive world. SAIL assigning the experienced

employee in the production department and they are with the highly instructed to proper

handling of the raw material, so the process take less input for the more output.

There is every possibility that SAIL would establish for itself a permanent and unshakable

position in the industrial map of India and also in the emerging international market for steel .


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Chapter 9

REFERENCE


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REFERENCE

The Books, journals and websites referred are as follows:

1. BOOKS:

a. J.R. Tony Arnold and Stephen N Chapman, Introduction to

Materials Management, Fifth Edition, Himalaya Publication.

b. Pro. L.C. Jhamb, Production planning and Control, Everest publishing house

12th

edition: 2005.

c. J. R. Tony Arnold; Stephen N. Chapman; Lloyd M. Clive

Introduction to Materials Management, Sixth Edition

Publisher: Prentice Hall

Copyright year: 2008


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2. WEBSITES:

a) http://www.sail.co.in

b) http://www.sail.co.in/pnu.php?tag=others_unit_raw_material

c) http://www.sail.co.in/pnu.php?tag=others_unit_RnD_center

d) http://www.sail.co.in/pnu.php?tag=iisco

e) http://en.wikipedia.org/wiki/Materials Management

f) http://en.wikipedia.org/wiki/Production_Material_Management system
http://www.sail.co.in/http://www.sail.co.in/http://www.sail.co.in/pnu.php?tag=others_unit_raw_materialhttp://www.sail.co.in/pnu.php?tag=others_unit_raw_materialhttp://www.sail.co.in/pnu.php?tag=others_unit_RnD_centerhttp://www.sail.co.in/pnu.php?tag=others_unit_RnD_centerhttp://www.sail.co.in/pnu.php?tag=iiscohttp://www.sail.co.in/pnu.php?tag=iiscohttp://en.wikipedia.org/wiki/Materials%20Managementhttp://en.wikipedia.org/wiki/Materials%20Managementhttp://en.wikipedia.org/wiki/Production_Material_Managementhttp://en.wikipedia.org/wiki/Production_Material_Managementhttp://en.wikipedia.org/wiki/Materials%20Managementhttp://www.sail.co.in/pnu.php?tag=iiscohttp://www.sail.co.in/pnu.php?tag=others_unit_RnD_centerhttp://www.sail.co.in/pnu.php?tag=others_unit_raw_materialhttp://www.sail.co.in/


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