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A SUMMER INTERNSHIP & MINI PROJECT REPORT ON COMPREHENSIVE STUDY OF INVENTORY MANAGEMENT AT

PEPSICO INDIA HOLDINGS PRIVATE LIMITED SUBMITTED BY: PURVESH J KANSARA GTU ENROLLEMENT NO.: 097710592005

SUBMITTED TO: SHRI M.H. KADAKIA INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES (MBA PROGRAMME), ANKLESHWAR. AFFILIATED TO: GUJARAT TECHNOLOGICAL UNIVERSITY, ABAD GUIDED BY: MS. RASHMI GHAMAWALA, ASSISSTANT PROFESSOR, KIMCOS. FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION BATCH: 2009-2011

EXECUTIVE SUMMARY
In 1983, Caleb Bradham, a young pharmacist from New Bern, North Carolina begins experimenting with many different soft drink concoctions. Like many pharmacists at the turn of century he had a soda fountain in his drugstore where he served his customers refreshing drinks, which he created himself his most popular beverage was something he called Brads Drink made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. PepsiCo India is striding ahead rapidly towards enabling the global vision to be the worlds premier consumer products company focused on convenience foods and beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it provide opportunities of growth and enrichment to its employees, business partners and the communities in which it operates. PepsiCo is one of the multinational company having more than 500 brands in 200 countries. In India PepsiCo having 43 bottling Plants. At Jhagadia Pepsi has started its GRB plant in 1997, PET line in 2001, Aquafina in 2003, and PepsiCo has recently started its Slice line in 2010. In PepsiCo I have visited Human Resource Department, Finance Department, Production Department, Quality Control, and Dispatch and Logistic Departments. The companys Marketing Office is at Ahmedabad. I have selected the topic Comprehensive Study of Inventory Management as my special topic of Finance Department on which I have prepared a mini project including raw material inventories, work-in-process inventories, and finished goods inventories. This project gives the knowledge about inventory management and for that I have use different method like analysis of different techniques of inventory, analysis of inventories management system and control practice, practices of significant material usage, security system. This project gives the idea or knowledge about inventory management system of the organisation how they are keeping inventory, how they are dealing with the system. Ratio analysis of the company shows the financial position of the company of particular years. This way the project gives the theoretical knowledge about the inventory position of the organisation and overall condition of company in the history. Interpretation of various ratios related to inventory and operating cycle of the company are described hereunder in the report.

After going in the depth of the study I found that companys Inventory Management system is good and it enhance the companys overall wealth which fulfil Organization objective. This way the project gives the theoretical knowledge about the inventory position of the organisation and overall condition of company in the history.

TABLE OF CONTENT
PARTICULARS
A. ABOUT THE COMPANY 1) MISSION & VISSION 2) ORGANIZATIONAL VALUE 3) COMPANY HISTORY 4) COMPANY PROFILE IN INDIA 5) COMPANY BRANDS IN INDIA 6) MILESTONES B. DEPARTMENTAL STUDY C. ABOUT THE TOPIC D. MINI PROJECT TOPIC 1) SUBJCET OF THE STUDY 2) OBJECTIVE OF THE STUDY 3) TOOLS OF ANALYSIS 4) SCOPE OF THE STUDY 5) RESEARH METHOD E. FINDINGS & CONCLUSION F. LIMITATIONS G. SUGGESTIONS H. BIBLIOGRAPHY

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01 02 03 05 07 08 10 13 36 38 38 38 39 84 85 86 88 89 90

A. ABOUT THE COMPANY


The Indian FMCG sector is the fourth largest sector in the economy with a total market size in the excess of $15 billion. It has strong translational presence and is characterized by a well established distribution network, intense competition between the organized and unorganized segments and with its low operation costs and presence across the entire value chain gives India a competitive advantage. The FMCG market set to shoot up to $35 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc. In India is low indicating the unexploited market potential. Burgeoning Indian population, particularly the middle class brand frenzy class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer upgrading in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around $28 billion of investment in the food-processing industry. Food and Beverages The size of the Indian food processing industry is around $65.6 billion; including $ 20.6 billion of the value added products. Of this the health beverage industry is valued at $230 million; bread and biscuits at $1.7 billion; chocolates at $73 million and ice cream at $188 million. The three largest consumed categories of the packaged food are packed tea, biscuits and soft drinks. Strong Growth forecast in Soft Drinks The total trade volume of the soft drinks is forecast to grow by compounded average of 11%. Total value growth is expected to track total volume growth closely because intensifying competition in carbonates, which dominates in total volume and value sales, is expected to keep prices per litter under check. However, 100% juice is forecast to experience price per litter.

With increase expected in tourism, distribution and a changing lifestyle, bottled water is the one to watch in near future, with expected CAGR of 15% in trade volume sales growth.

1) MISSION & VISION:


Mission: To be the worlds premier consumer Products Company focused on convenience foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. Vision: To build Indias leading total beverages company, delighting consumer by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people PepsiCo vision is to be best Consumer Product Company in the world & wants to become the market leader in the market. Its main vision is satisfaction of supplier, customers, consumers, employees.

Policy of the Company: Quality Policy: We shall deliver the best product in the: Market place. Highest quality. Biggest testing. Safety Policy:
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We shall design, construct, maintain & safe operate our plant so that they are safe for: The people working in the company. The assets of the company. The environment in & around.

2) ORGANIZATIONAL VALUES:

Our commitment is to deliver sustained growth, through empowered people, acting with responsibility and building trust.

Guiding Principles: This is how we carry out our commitment. We must always strive to: Care for customers, consumers and the world we live in.: We are driven by an intense, competitive spirit in the marketplace, but we direct this spirit towards the solution that achieves a win for each of our constituents as well as a win for the corporation. Our success depends on a thorough understanding of our customers, consumers and communities.
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Caring means going the extra mile. Essentially, this is a spirit of growing rather than taking. Sell only products we can be proud of. : The test of our standards is that we must be able to personally endorse our products without reservation and consume them ourselves. This principle extends to every part of the business, from the purchasing of ingredients to the point where our products reach the consumers hands. Speck with truth and candor. : We speak up, telling the whole picture, not just what is convenient to achieving individual goals. In addition to being clear, honest and accurate, we take responsibility to ensure our communications are understood. Balance short term and long term.: We make decisions that hold both short-term and long-term risks and benefits in balance over time. Without this balance, we cannot achieve the goal of sustainable growth. Win with diversity and inclusion. : We leverage a work environment that embraces people with diverse backgrounds, traits and different ways of thinking. This leads to innovation, the ability to identify new market opportunities, all of which helps develop new products and drives our ability to sustain our commitments to growth through empowered people. Respect others and succeed together. : This company is built on

individual excellence and personal accountability but no one can achieve our goals by acting alone. We need great people who also have the capability of working together, whether in structured teams or informal collaboration. Mutual success is absolutely dependent on treating everyone who touches the business with respect, inside and outside the company. A spirit of fun, our respect for others and the value we put on teamwork make us a company people enjoy being part of, and this enables us to deliver world-class performance.

3) COMPANY HISTORY:
PepsiCo India is striding ahead rapidly towards enabling the global vision to be the worlds premier consumer products company focused on convenience foods and beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it provide opportunities of growth and enrichment to its employees, business partners and the communities in which it operates. Founder Mr. Caleb Bradham Year of foundation 1890 It was originally founded as a cure for Dyspepsia & now, its name PepsiCo soft drink. 1st plant setup in the year 1905 at America. In 1936 company earn $2 billion profit. Today its business is spread in more than 190 countries with 500 brands. In Gujarat PepsiCo has 1 plant. Pepsico India Holdings Pvt. Ltd. Plot No. 27, Gidc Estate Jhagadia, Dist. Bharuch-399110 Phone: (02645) 226139, 226140 Fax: (02645) 226138 1st company of PepsiCo in India was started at Jaipur (Raj.). In Jhagadia PepsiCo started first plant in 1997 with GRB (Glass Refilling Bottle). In 2001 PET (Poly Ethylene Tetracycline) was started. In 2003 AQUAFINA plant was started in Jhagadia. In 2010 SLICE separate plant was started in Jhagadia.

Establishment and Amendment: In 1983, Caleb Bradham, a young pharmacist from New Bern, North
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Carolina begins experimenting with many different soft drink concoctions. Like many pharmacists at the turn of century he had a soda fountain in his drugstore where he served his customers refreshing drinks, which he created himself his most popular beverage was something he called Brads Drink made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. One of Calebs formulations, known as Brads Drink, created in summer of 1893, was later renamed Pepsi Cola after the pepsin and cola nuts used in recipe. In 1898 Caleb Bradham wisely bought the trade name Pep Cola for $100 from a competitor from Newark, New Jersey that had gone broken. The new name was trademarked on June 16th 1903. Bradhams neighbour, an artist designed Pepsi logo and ninety-seven Shares of stock for Bradhams new company were issued. Investment: PepsiCo India and its partners have invested more than USD1 billion since the company was established in the country.

Employment: PepsiCo India provides direct and indirect employment to 150,000 people including suppliers and distributors.

4) COMPANY PROFILE IN INDIA:


PepsiCo entered India in 1989 and has grown to become one of the countrys leading food and beverage companies. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo India and its partners have invested more than U.S. $700 million since the company was established in the country. PepsiCo provides direct employment to 4,000 people and indirect employment to 60,000 people including suppliers and distributors.

PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as AquaFina drinking water, isotonic sports drinks Gatorade, Tropicana100% fruit juices, and juice based drinks Tropicana Nectars, Tropicana Twister and Slice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands.

PepsiCos foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat. It manufactures Lays Potato Chips; Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high fiber breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets.

The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 43 bottling plants in India, of which 15 are company owned and 28 are franchisee owned. In addition to this, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

5) COMPANY BRANDS IN INDIA:


PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats that deliver enjoyment, nutrition, convenience as well as affordability The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 42 bottling plants in India, of which 13 are company owned and 29 are franchisee owned. In addition to this, PepsiCos Frito Lay division has 3 state-of-the-art plants. PepsiCos business is based on its
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sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. Beverages PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Nimbooz, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks Gatorade, Tropicana100% fruit juices, and juice based drinks Tropicana Nectars, Tropicana Twister and Slice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands.

Foods

PepsiCos food division, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of transfat and MSG. It manufactures Lays Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets.

6) MILESTONES:
In the year 1999 it wins Quality Assurance IQ award. In the year 2000 it wins award for 1 million hours without loss time accident. In the year 2000 it wins award for zero loss time accident. In the year 2000 it wins Pepsi Cola International Bronze Quality award. In the year 2001 it wins Pepsi Cola Beverages International Bronze Quality award. In the year 2001 it wins award for zero loss time accident.

Plant Detail: Location Plant Site Nearest City Year of Start up and Expansion Total Area of Plot Total Built up Area Max Coverage Allowed Green Blet Area : : : : : : : : 90 Kms from Baroda GIDC Mega Estate Ankleswar -12km from Plant GRE 1997 PET 2000 AF 2003 75766Sq Mtrs (18.7 Acres) 9570 Sq Mtrs 35336 Sq Mtrs 24529 Sq Mtrs

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Organizational structure:

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Company Head Detail: Mr. Chetan Thakkar (Plant Manager) Mr. Yashpal Jajodia (Finance Manager) Mr. Nilesh Borisa (Purchase Executive) Ms. Yamini Sinha (HR Manager) Mr. Zubair Shaikh (HR Executive) Mr. Chetan Panchal (Quality Head) Mr. Prashant Mujbaile (Manufacturing Manager) Mr. Amit Raina, Manish Fosi (Manufacturing executive) Mr. Anil Satpute (Shipping Head) Mr. Gaurav Rathod (Shipping Executive)

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B. DEPARTMENTAL STUDY
(1) PRODUCTION DEPARTMENT:
Structure of the department:

Manufacture Manager Maintenance Executive Utility Associate Production Executive Production Associate

Production department has to plan the production schedule as per the sales. Implementation of the item. Achieve the production target. Maintain quality with goodwill. Safety of machine. Organize the training programme.

Raw Material Used The used raw-materials are water, Sugar, Preform, Concentrate, CO2, Crown/closures, and Label.

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Product Specification Pepsi Colour Black Mirinda Colour Orange Mountain Dew Colour Off Green 7up Colour Like Water (No Colour) Aquafina Colour Water Slice Colour Mango Lehar Colour Like Water (No Colour)

Types of Material Handling Equipments Used Fork lift truck o 2 for shipping o 2 for production o 2 for sugar godown Chain conveyer (GRB LINE) Belt conveyer (PET LINE) Plastic chain conveyer (PET LINE) Air conveyer (PET LINE) Pumps (WATER TREATMENT) Roller conveyer (GRB & PET LINE)
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BRIEF EXPLANATION OF PRODUCTION PROCESS

1) GRB LINE (GLASS REFILLING BOTTLE)

GRB LINE: Uncaser & Caser Machine:

Function: picking the empty bottles & placing to some other place. Made By: kettner (Germany) Capacity: 39000 bph. Bottle Washer:

Function: bottle washing through 7 stages. Made By: kettner (Germany) Capacity: 39000 bph. Filler (GRB):

Function: picking bottles from conveyer & filling beverages into the bottles & also fitting crowns on bottles. Made By: kettner (Germany) Capacity: 36000 bph.

PROCESS Production process starts from unloading of the empty bottles from the trucks. These bottles are taken by fork lift trucks which send in the plant line. Carats from fork lift are put down on the surface area & than workers put on the roller conveyer.
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carats.

Uncaser Machine

Uncaser Machine keeps the bottle on the automatic conveyer belt from the

At once it pick up the 48 bottles from the 4 carats, on this belt 2 chips neck inspection points are set in order to remove any damage bottle after inspection are do going the further bottle process.

Bottle washer: (max-43000 bph) PreTank Jettin g Det.-1 Det.-2 WW-1 WW-2 CW Fresh

Caustic (%) Pressure (Kg) Temperature Internal Jets (No's) External Jets (No,s) Capacity (liters)

0.2 1.3 40

1.5-2 1.5 60-65

3-3.5 1.8 70-80

1 1.6 60-63

0.5 1.6 45-50

0.1 1.6 45-50

1.7 AMB

1 300

14600

1 21800

2 700

1 700

1 700

1 -

After bottle inspected bottles are goes to bottle washer. Prejeking: At this point the bottle is entering into the washer machine. At this time bottle is inwarded into bottles by the jobs. The dust washed in the prejecting 400 C temperature is maintaining the capacity.

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Detergent 1: In this stage the tank is filled with washer & this water contains detergent. At this stage minor dust or oiliness remove. Detergent 2: Bottles are passed through detergent-1 to detergent-2 tank. The capacity of detergent-2 tank is 21800 liters. Warm Water: The bottles are washed by the warm water at the temperature of 600-630. Here, bottles are sterilized & almost all microbes & bacterias are killed by warm water. Cold water: At this stage bottles are washed with cold water of 300-350 C. At this stage the temperature of the bottles is bought down to normal temperature.

Refilling Bottles:

Empty bottles are refilled, which are passed through bottles. Bottles come from 4 inspection stages, the GRB capacity is 36000 bph. 80 valves in the filling bowl. The capacity of the machine is 36000 bottles per hour. The empty bottles are picked up by the filling bowl & filling automatically. Then bottles forwarded for sealing machine, the bottles are sealed with the crown. After the bottles are sealed & crowned they pass through printing machine. Printing machine print the manufacturing date, time, price after this steps the bottles are ready to final inspection. In inspection identified: o Half fill o Full fill o Dirty bottles o Different crown
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o Different bottles The bottles are forwarded by the conveyer.

Caser Machine:

Caser machine picked up 96 bottles & put into the carats then through conveyer belt; the carats are arranged into the pallets & then are arranged for fork lift truck into the finished goods godown.

2) PET LINE (POLY ETHYLENE THYLATE):

PET LINE: Blow Moludar: Function: converting plastic performs into bottles of different size & shape. Made By: Sidel (France) Capacity: 10400 bph. Unscrambler: Function: picking bottles & placing it on air conveyer in upright position. Made By: Ianfranchi (Italy) Capacity: 500ml. (24000 bph) 1.5ml. (14000 bph) Filler (PET): 52 valves machine. Function: picking bottles from conveyer & filling beverage into it & also fitting crown on bottles. Made By: Krones (Germany)
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Capacity: 500 ml. (18000 bph) 1.5 liters (12000 bph) Labeler: Function: fixing labels bottles according to their size & type of beverage. Made By: Trine (New York) Capacity: 500 ml. (300 bph) 1.5 liters (250 bph) Carton Erector: Function: making cartoon boxes from sheets. Made By: Sermax (France) Capacity: 20 bph.

PROCESS PET line is a line of plastic bottle & its maximum capacity for 500ml. bottle is 18000 bph, for 1.5 litters its capacity is 12000 bph, and for 2 litters it is 9000 bph. The entire machine on PET line is imported & is purchased from the reputed foreign companies like: Sidel (FRANCE) Linker (POLAND) Para mix (GERMANY) Krones (GERMANY)

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Blow Moludar:

In blow moludar machine preforms are converted into PET bottles, capacity of this machine is 10400 bph. This machine is made by the Sidel (France Company) & price of this machine is 7 to 8 crore. Preforms are brought in HOPPER from to Blow Moludar machine through conveyer. The computer controlling the machine automatically and decides the temperature of oven. For controlling the temperature, sensor cameras are installed which measures the temperature. Camera checking is done after every 50 preforms. 8 models are set in blow moludar & converted into expected shape. Bottles are send to unscramble by air conveyer.

Unscrambler:

Main function is to store the bottle from BLOW MOLUDAR. Bottles are stored because it has two reasons: It needs large amount of PET bottles continually; PET bottles are stored in unscrambler machine. Blow moludar is a very high energy consumption machine, so electricity, cooling energy & continually air is required the unscrambler machine arranges the bottle on conveyer. Air conveyer takes the bottles into filling hall. The bottles are washed for one time because some dust is their.

Filler Bowl:

There are 54 valves in Pet filler bowl. Valves pick the bottle automatically. Syrup and CO2 are filled up automatically, stop automatically and after. This crown sealed done on the bottles.

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Warmer:

The bottle comes out from the filling halls which are very cold if these cold bottles are forwarded to the labeler then the label can not be fixed properly. The temperature of bottles is brought up to 200 to 250 C from 40 to 50 C.

Printing Machine & Labeller: capacity

This label is fixed in particular machine label. Machine has automatic of 250 bph for 500 ml. & 200 bph for 1.5 litres & 150 bph for 2.0 litres.

Case Packer Machine:

Different sized pet bottles are packed into different size boxes. 96 valves-500ml 48 valves-1.5litres 27 valves-2litres

Packaging Boxes:

The boxes are forward through conveyer & boxes are going towards boxes sealing station. Here boxes are sealing automatically & arranged into godown by the fork lift truck operator.

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Present Product Mix: Brand Name Pepsi Mirinda(orange) Mirinda(lemon) Slice 7up Lehar Aquafina Mountain dew 200ml. 300ml. 600ml. 1liter 1.5liter 2liter

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(2) SHIPPING DEPARTMENT:


Departmental Structure

Anil Satpute (Head of Department) Dipak Trivedi (Co-ordinator) Guarang Rathod (Executive) Associates (3) Tusar Thakor (Executive) Associates (3)

Functions Performed by the Department:

To regular track on order which had been placed by the BU (Ahmedabad) of company To take daily physical stocks and verified with SAP To make an arrangement of all finished goods when production job would be completed To make arrangement of FG as per SKU (Stock Keeping Units) To Dispatched Finished Goods as per Order

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SALES TARGET PLANNING AOP (Annual Operational Planning)

Sales Chain Of the Company


Unit Manager

Territory

Sales Forecasting

Manager

Customer

Sales Target Given to Each Plant

Executive

Distributors

Sales Target Given to PepsiCo India Holdings Ltd has divided the Gujarat unit into four territories as: North Gujarat Sales Target Given to Distributors Central Gujarat South Gujarat Saurastra

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PRODUCTION PL7ANNING AOP (Annual Operational Planning)

SHIPPING PROCESS
Place Order By Customer Executives

Sales Plan

Given Dispatched Details to Transporter

Production Planning

Loading of FG In the truck

Dispatched of Goods

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(3) STORE DEPARTMENT:


Functions Performed by the Department: Physical stock varification of all Packing and Raw material to be check. To compared physical stock with actual data feed in SAP. To check following things in all invoice of materials (involves gate stamps) which comes from pre-defined vendors Date of invoice PO (Purchase order) No Material qty and price as per PO GRN (General Registered No) Gate stamps Vendors details Favoured party name

To place Material in proper location To giving permission to issue material when its approved through respective departmental Head (through physical invoice) and at a time feed information related that in computer To prepared Gate-pass

INVENTORY CONTROL SYSTEM: For Raw Material & Packing Material: Separate Ware-House for different Material Sugar Concentrate kept in cold storage Sleeve material kept under 28 degree Celsius Separate room for closures, crowns and labels Separate packing material like cartoons and performs kept in RMPM department Dispatched of Material would be done as per FIFO method, especially concentrate and pulp
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For that expired date would be written on each of material Daily physical verification would be done and can be crossed check with SAP

For Engineering Material: If Material which value is more than Rs. 750 than it would be considered to valuated material otherwise non-valuated material Valuated material would be kept in Cup-Board Non-valuated Material would be kept in Rack, different rack no are given to separate Rack, so its easily when it would be issued

Inventory Valuation: There are mainly three methods of valuation of inventory FIFO (First In First Out) Method LIFO (Last In First Out) Method WAV (Weighted Avg. Valuation Method) For valuation of Inventory, WAV method would be used, Proportion of Materials in Warehouse: Material RMPM Engineering Proportion (in %) 10 90

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(4) HUMAN RESOURCE DEPARTMENT: Activities of HR Department: Dealing with employee. Dealing with contractors. Canteen management. Security activities. Welfare. Recruitment. Wages & Salary. Training & development. Statutory compliance. Administration. Transport management. Maintain employee relation. Housekeeping activities. Performance appraisal system.

Time Management: In PepsiCo, Jhagadia, employees are working in 3 shifts, and 1 general shift. Shift timings are given below: 1st shift General shift 2nd shift 3rd shift : : : : 07:00 to 15:00 09:30 to 18:00 15:00 to 23:00 23:00 to 07:00

The bus arrives at the company gate, than after security officer note down the attendance of each & every arriving employees. The attendance records are sends to the HR department through computer.
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And the same process is repeated & security officer note down their out time of each and every employee. If any employee comes late more than half hour the security officer makes the pass so that the head can know about that employee. For the visitors security officer makes the visitors pass and are given an I-card. On that I-card the companys rules and regulations are written which are to be followed.

Details in Employee Personnel File: Bio-data / C.V. Photograph Document of qualification:o o o o o o School living certificate 10th mark sheet 12th mark sheet Graduate (B.SC / B.COM / B.A) Post Graduate (M.SC / M.COM / M.A.) If any additional qualification

Experience & their relevant document Reference letter (should not be blood relative) Medical certificate (recommended doctor of last company) Letter of Intent & Annexure Joining forms P.F. and gratitudy forms Appointment letter

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Human Resource Planning: There are three major methods of HRP 1) Trend Analysis 2) Ratio Analysis 3) Through Software Packages

PepsiCo does the HR planning according to the session wise, if demand is at the boom than company recruits some additional employee on the temporary basis. Generally, company recruits the additional employee at the period of summer vacation. The decision takes by the ER/HR manager as per the situation.

Recruitment: There are two types of Recruitment process are their: 1) Internal Recruitment 2) External Recruitment

1) Internal Recruitment: Internal recruitment is done through Rehiring, Succession Planning, and Job Positioning. 2) External Recruitment: It is done through Internet, Advertising, Employment Agency, Campus Recruitment, Referral etc.

Selection: Company has two types of selection procedure Executive or manager For associate & workers
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For executive level:Agency send the person as per requirement and plant manager takes the interview of that person, if the person is selected by the plant manager than companys committee (department heads) takes the interview of that person, once he/she selected then they are send to Ahemdabad & Mumbai for final interview. If the selected person is agree with the companys terms & conditions then he/she can join the company. For associate level:Companies directly recruit them by the help of private agency. ER/HR manager takes the interview of that person and recruit them.

Performance Appraisal System: Performance appraisal is divided into two parts. Part A focuses on the actual performance of the candidate, while part B focuses on the person. It is important to complete both sections of the forms for objective evaluation of candidate. In part B there is two sections, one focuses on the operative skills and the second section focuses on the maintenance part. Part A Work performance/output Concern safety Responsibility & discipline Team work House keeping Part B Care of machine Maintenance of the machine Know operating very well Keep clean machine & near Environment

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And according this performance appraisal he/she promoted by given rank from his observation and give comment. Remarks: (of performance appraisal programme) Outstanding OT (On Target) AT (Above Target)

Training & Development: Company gives the training to new employee as well as old employee. In training company know the capabilities of the person and now what kind of training he needed in future. Types Of Training Personality development First aid GMP (good mfg. productivity training) Printing training Basic fire training FM (foreign matter training) General safety Days 02 01 -0.5 01 0.5 01

Promotion & Transfer Policy PepsiCo Company gives the promotion on the basis of performance of the employee. Promotion is given in the companys same plant. If the company needs the person in other plant and it will fill through transfer, by the order of plant manager.
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(5) QUALITY CONTROL DEPARTMENT:


Functions of QC Department: Checking of all in-put Raw-material and Packing Material Making syrup of various product Checking of Finished goods product Process control Overall plant food safety

Function Details: Checking of all in-put Raw-material and Packing Material 1) Sugar: There are following things are to be checked in Sugar, Things to be checked are weight of bags, Colour, International Colour Unit Measurement of Sugar Analysis, Foreign material, Flock test. 2) Co2: Also known as A.O.T model. A Appearance O Odour T - Test Purity

3) Concentrate: Its checked following things Manufacturing and expiry date Labels

4) Water: standards are set by PepsiCo Purification of water Coagulation process Filtration

Proper chlorination

Process of checking Water: Hardness of soft water


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Alcholity

5) Micro-Biological Testing Moulds Colyforms

For Packaging of Raw Material: 1) Carton Gramage square mater (10*10) Busting Strength Bear Compressor strength bear Dimension of Box Printing

2) Label: In Lable the Length, Height and Design is checked. 3) Preform 4) Crown Grammage Graphics Linear condition Weight Material Distribution

Checking of Finished Product Brix (% of sugar) CO2 volume (Gas Volume) Foreign Material (F.M) Fill Height Net Content Micro Biological Parameters
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(6) FINANCE DEPARTMENT

Finance department is the most important department of any organization or company. Because it managed all finance resources of the company. It has been done financial activities which are concerned with the planning & controlling of the firms financial resources. Financial management involves selling financial assets or securities such as shares & bonds/ debentures to the financial investors in the capital markets to raise necessary funds. Finance management also raises funds by borrowing from banks, financial institution & other resources. Almost all kinds of business activities, directly or indirectly, involve the acquisition & usage of money. Money occupies a key position in the capitalistic economies of the modern age. One of the most important functions of the top management is to raise finance at a right time and in a right quality also to use it most effectively. Financial management is concerned with the managerial decisions that result in the acquisition and financing of long term and short term credits for the firm as such deals with the situations that require selection of specific assets, the selection of specific liability as well as problem of these decisions are based on the expected inflows and outflows of funds and their effects upon managerial objectives. Financial management does not stop at procuring the required finances. It has also to see that it is effectively utilized in business. It is concerned with maintaining adequate funds on hand to meet the expenses of both revenue and capital nature.

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C. ABOUT THE TOPIC


The term Inventory refers to the stockpile of products. Inventory comprises those assets which will be sold off in the near future and money recovered. Inventory can be in the form of Raw-Material (RM), semi-finished goods (Work-In-Process) or as Finished-goods (FG). To understand the management of inventory at work and to examine how Inventories are managed, I. M. Pandey and Khan & Jain has done their study on the topic Comprehensive study of Inventory Management. Inventory can be managed by using three methods FIFO, LIFO, WAM. Inventory management is done in each aspects of the organization. There should be balance between inventory and other assets in the organization. If balance is not maintain then whole financial system will get disturb in the organization. Inventories are stock of the product a company is manufacturing for sale and components that make up the product. IMPORTANCE: Inventory is useful for the following purposes: Predictability: In order to engage in capacity planning and scheduling, you need to control how much raw-material, parts, and subassemblies you process at a given time. Inventory buffers what you process. Fluctuations in demand: Inventory is assist in estimation of demand. You dont always know that how much stock you required at any given time, but you still need to satisfy your customers demand on time. Unreliability of supply: Inventory kept when there is scarce of resources or very few suppliers are available, Price protection: Buying quantities of inventory at appropriate times helps avoid the impact of cost inflation. When there is chances of price rising in future , better to purchase at presently at reasonable price and avoid price fluctuation cost
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Quantity discount: often bulk discounts are available if you buy in large rather than small quantities Lower ordering cost: if you buy a larger quantity of an item less frequently, the ordering costs are less than buying smaller quantities over and over again.(The costs of holding the item for a longer period of time, however, will be greater)

NATURE: Inventory basically falls into overall categories of raw materials, finished goods and work-in-process. Raw Materials: Used to produce partial products or completed goods. for e.g. sugar, concentrate, performs, labels, closures etc. Finished Product : This is product ready for current customer sales, Work-in-process (WIP): Items are considered to be WIP during the time raw material is being converted into partial product. Other types of inventory: Consumables: Light bulbs, Hand towels, computer and photocopying paper, tape, envelops, cleaning materials, lubricants, and so on. Engineering (Service, repair, replacement and spare) items: These are after-market items used to keep things going. As long as a machine or device of some type is being used and will need service in the future. Buffer/Safety inventory: This type of inventory can serve various purpose, such as: Compensating for demand and supply uncertainties. Holding it to Decouple and separate different parts of your operation so that they can function independently from one another. Transit Inventory: It could be argued that product moving within a facility is transit inventory. It may also define as the goods moving within distribution channel between you and outside to the facility user or provider.
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D. MINI PROJECT TOPIC

(1) SUBJECT OF THE STUDY:


I have selected the topic Comprehensive Study of Inventory Management as my special topic of Finance Department on which I have prepared a mini project including raw material inventories, work-in-process inventories, and finished goods inventories. The subject is related with the analysis of the Inventory Management for the investment of inventories in the PepsiCo India Holdings Pvt. Ltd.

(2) OBJECTIVE OF THE STUDY:


The report includes following main objectives, are as under: To study and analyze the inventory management system and control practices at PepsiCo India Holdings Pvt. Ltd. To find out which types of Materials are available in the company. To find out by which method company verify and classify the materials and codification system of the company. To find out management of projected sale and actual sale of each product. To find out how company apply tight controls to the significant few items. To find out how company sell of outdated or slow moving merchandise. To find out which material company outsourced and rather why not it produces on its not. To find out security system to ensure that No stock is going out the back door. To find out how long it will take for delivery by supplier. To find out operating cycle. To find out inventory related ratios.
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The objectives of the report are concerned with an Ideal Inventory Management. An ideal inventory management give the minimum storage of the different types of the inventories and maximum sales of the product of the company thats why it increases in the wealth of the company.

(3) RESEARCH APPROACH & TOOLS:

To find out by which method company verify and classify the material and codification system.(Obj.) Inventory Valuation System: The objective of the study is to analyse the valuation system undertaken by the PepsiCo India Holdings Pvt. Ltd. to give the value of inventory. In order to assign a cost value to inventory, company must make some assumptions about the inventory on hand. Under the federal income tax law, a company can only make this assumption once per fiscal year. There are some of the valuation methods used by the company described below.

(A) INVENTORY VALUATION SYSTEM There are mainly three methods of valuation of inventory 1. FIFO (First In First Out) Method 2. LIFO (Last In First Out) Method 3. WAV (Weighted Avg. Valuation Method)

PepsiCo India Holdings Pvt. Ltd. use following valuation methods for valuation of Inventory.

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(1) First in First out: At PepsiCo for inventory valuation FIFO method is used. Inventory valuation assume that the first goods purchased are first to be used or sold regardless of the actual timing of their use of sale. This method is mostly use to tied to actual physical flow of goods in inventory at PepsiCo India Holdings Pvt. Ltd.

(2) Weighted Average Method: At PepsiCo this method is use to calculate the value of inventory that identifies the value of the inventory and cost of goods sold by calculating an average unit cost for all goods available for sale during a given period of time. This method assumes that ending in inventory consists of all goods available for sale.

(B) CLASSIFICATION OF INVENTORY: The inventories having huge amount of use in the organization has to be controlled very strictly and low amount of use should be kept low control. There are so many classification systems available amongst which some of classification systems are uses at PepsiCo India Holdings Pvt. Ltd. 1. ABC system. 2. EOQ system. 3. JIT system. 4. Outsourcing.

(1) ABC classification: ABC classification is a basic analytical Management tools which enables top Management to direct their effort where the result will be maximum. Inventory is managed in store department at PepsiCo India Holdings Pvt. Ltd.

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This technique properly knows as ALWAYS BETTER CONTROL has universal application in many areas of human endeavour. ABC Inventory control system: Large no of firms have to maintain several types of inventories. It is not desirable to keep the same degree of control on all the items. The firm should pay maximum attention to those items whose value is the highest. The firm should, therefore, classify inventories to identify which items should receive the most efforts in controlling. The firm should be selective in its approach to control investment in various types of inventories. This analytical approach is called the ABC analysis and tends to measure the significance of each item of inventories in terms of its value.

A items represents the high-value items and would be under the tightest control. B items falls in between above these two categories and require reasonable attention of management. C items represents relatively least value and would be under simple control. The following steps are involved in implementing the ABC analysis: Classify the items of inventories, determining the expected use in units and the price per unit for each item. Determining the total value of each item by multiplying expected units by its unit price. Rank the items in accordance with the total value, giving first rank to the item with highest total value and so on. Compute the ratios (percentage) of number of units of each items to total units of all items and the ratio of total value of each item to total value of all items.

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% Item Units Of Total 1 2 3 4 5 6 7 Total 10,000 5,000 16,000 14,000 30,000 15,000 10,000 1,00,000 10

Cumula tive %

Unit Price (Rs) 30.40

Total Cost (Rs)

% of Total

Cumula tive %

3,04,000 38.00 2,56,000 32.00 88,000 11.00 72,000 51,000 22,500 6,500 8,00,000 9.00 6.38 2.81 0.81 100 10 20 70

15 5 16 30 14 30 15 55 10 100 100 0.65 5.14 1.70 1.50 51.20 5.50

The tabular and graphs presentation indicate that Item A forms a minimum proportion, 15 percentages of total units of all items, but represent the highest value, 70 percentages. Item B occupies middle place and contains 30 percent of total units and represents 20 percent value of total value. Item C represents 55 percentage of total units and only 10 percent of total value. Items A and B jointly represents 45 percent of total units and 90 percent of the investment. More than half of the total units are item C, represents merely 10 percent of total investment. At PepsiCo also this classification method is use to manage inventory. If the material valued more than Rs. 750 is high value material and stored in racks in this company. These materials called value-added material. And if the value of
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the material is less than Rs. 750 then it stored at the open place in isolation and classified by nonvalue-added material. If the value of the material is more than Rs.1000 it is stored in lock and key. Mostly engineering materials are high value and ordered in law quantity which requires more attention, so these materials come under A Item. Mostly raw materials are classified under law value and high stock material, so it comes under B Item. And other operating materials which are use to keep things going on is lowest value and not required high attention comes under C Item. (2) Economic Order Quantity: Order Quantity is defined as the quality or its rupee equivalent for which fresh order of an Inventory items is placed. The decision regarding order quality of various Inventory items is of vital importance in the Management of the Inventory items for which total of two types of cost opposing. Each order will be the minimum at this level, the sum of all cost of one type is exactly equal to the sum of all cost of the other type. Thus quantity is often referred to as economic order quality, for the purchase. Determination of Economic Order Quantity: The Economic Order Quantity can be determined with help of the following formula.

E.O.Q. =
Where,

2 AB CI .

A = Annual usage in units. B = Order (buying) cost per order. C = Unit cost of material. I = Inventory carrying cost.

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(3) Just In Time System: Japanese firms popularized the just-in-time (JIT) system in the world. In a JIT system material or the manufactured components and parts arrives to the manufacturing sited or stores just few hours before they are put to use. The delivery of material is synchronized with the manufacturing cycle and speed. JIT system eliminates the necessity of carrying large inventories, and thus, saves carrying and other related costs to the manufacturer. The system requires perfect understanding and coordination between the manufacturer and suppliers in the timing of delivery and quantity of the material. Poor quality material or components could halt the production. The JIT inventory system complements the total quality management (TQM). The success of the system depends on how well a company manages its suppliers. The system puts tremendous pressure on suppliers. They will have to develop adequate system and procedures to satisfactory meet the needs of manufactures.

(4) Out Sourcing: A few years ago there was a tendency on the parts of many companies to manufacture all components in-house. Now more and more companies are adopting the practice out-sourcing. Out-sourcing is a system of buying parts and components from outside rather than manufacturing them internally. Many companies develop a single source of supply. PepsiCo India Holdings Pvt. Ltd. outsource their raw material if it cant be able to produce it of its own, e.g., PepsiCo give order to manufacture its Empty glass bottle product from outside, PepsiCo also outsourced Briquete, bio-coal for the production of steam, etc.

(C) TECHNIQUES OF INCENTORY MANAGEMENT: The financial Manager should aim at the optimum level of inventory on the basis of trade off between cost and benefit.

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To know the practical use of various Inventory Management Techniques in the PepsiCo India Holdings Pvt. Ltd. Following Inventory Management Techniques were studied and evaluated are:

Codification System: Principal of Material Code: There should be no duplication. One particular type and size should be at one place only. Description should be brief, very accurate, specifications, part numbers, drawing numbers should be quoted, wherever required. Units of Issues and Receipts should be given and followed strictly. Code should be easily understandable by those who have to use it. It should be properly classified for sections, classes and groups. One unique code for each item and each represented by single code.

Codification means assigning a unique code or name, to each item, based on its use, characteristics, importance and other features. It may be of any digits say 1, 2 or up to 9. It may be Numerical, Alphabetical or Alphanumerical. In PepsiCo India Holdings Pvt. Ltd. code of each material is of 11 digits. First digit of each code start with P which indicates the material code is of PepsiCo, because there is other supplier code also written, so for identification company have its own codes for each material. Company gives code to each material machine wise and section wise so that the sparse of different machine will not mix at the time of issue. For different items there different starting codes some of which are described below. Forklift 47 Bearings 41 Filler machine 11
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Censer 30 Electricals 42 General items 99

The code of each material is given randomly for specific material and then after that material is following in that series.

(D) DETERMINATION OF INVENTORY LEVEL: The Inventory level concept considers store keeping as profit intensive service to production. Store keeping should contribute directly to profitability and be concerned with such matter as flow, lead time storage cost, acquisition cost, material handling, preservation, packing and dispatches. In the same way that specification is related to technical needs, so, general level of stock should be related to the sales and production policies of the company. There are various levels of stock, which are established by the PepsiCo India Holdings Pvt. Ltd., is as follows: 1. Minimum Stock Level. 2. Maximum Stock Level. 3. Re-order Stock Level.

(1) Minimum Stock Level: This is the level at which any future demands upon the bill will necessary withdrawals from the reserve stock.

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The minimum stock level is converted to meet exceptional conditions of demand. The minimum stock of raw material is described as follow: Cartons-10000 in each size. Crowns for all glass bottles are approximately 200 boxes. Closures are also approximately 200 boxes.

One months usage of material is taken into consideration by the PepsiCo India Holdings Pvt. Ltd. as a minimum level.

(2) Maximum Stock Level: This is the level above which the stock should not be permitted to rise. Three months consumption of stocks is taken into consideration by the PepsiCo India Holdings Pvt. Ltd. as a maximum stock level. Cartons-30000 in each size. Crowns for all glass bottles are approximately 600 boxes. Closures are also approximately 600 boxes.

(3) Re-Order Level: It is the point at which the order has to be placed. The order level may not always be numerically equal to the economic order quantity. It should be regularly reviewed for paid moving items. For fast factors as change in demand, delivery times or variation in trend.

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To find out which types of Materials are available in the company.(Obj.) Inventory as Money: Why should you care about the financial aspects of inventory? Because inventory is money. Even if you do not have a financial background, it is important to understand and appreciate that inventory information in financial statements can be useful in the operation of your business. A basic understanding of how inventory appears on the balance sheet and its impact on the income statement and cash flow statement will improve your ability to have the right item in the right quantity in the right place at the right time. Most of the inventory fits into one of these general buckets, yet the amount of each category varies greatly depending on the specifics of your industry and business.

STORES INVENTORY Proportion of Material at the warehouse. Material RMPM Engineering Proportion (in %) 90 10

Inventories of the store department: RAW MATERIAL: Raw material inventory consists of those items which are purchased by the firm to be converted into finished goods. Items are disclosed below.

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SUGAR PREFORM DIESEL FO CO2 CROWN CAP CLOSURE CONCENTRATE PUPL CARTON LABLE C&C VALUATED SPARES MAINTENCE SERVICE ORDER RETWNABLE GAT PASS OUTSIDE STORAGE

STORES BOOKS ENG ISSUE SLIP RGP STORE CHECK IN SLIP NRGP OT PEQUREMENT FOR CASUAL PRODUATION ISSUE SLIP LAB ISSUE SLIP
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STOCK INVENTORY: Material Specification, SUGAR: Sugar is the material that is required to make syrup sweet. It is stored in sugar godown. It is ordered to make syrup as per the batch size and batch size is depends on Annual operating Planning (AOP).

BOTTEL CALCULATION PARTICULER CRD CRD PET PET PET AQUAFINA ML 300ML 200ML 2LT 1.5LT 600ML 1LT BOX 40 BOX 48 BOX 27 BOX 36 BOX 48 BOX 40 BOX STACKS 3 STACKS 4 STACKS 6 STACKS 4 STACKS

CARTON LODING STACKS Cartons are empty boxes which are used to pack crowns, closures, and labels. The pack size is predefined and size will not change. The pack size for different products is different which is described below. PET PET AQUAFINA 2 LT 8 STACKS 600 ML 15 STACKS 1 LT 10 STACKS

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CROWN Crown is bottle cap which is used to seal glass bottles. Pack size for all type of bottles are same. There are 300 cash in one box, each cash consists of 24 bottles, it means 7200 pieces in one box. Crowns and closures are managed in the same room in isolation. Crowns are ordered for following brands. Pepsi Mirinda Orange Mirinda Lemon 7-up Mountain Dew Slice 1 BOX =50 GROSS 2 50 GROSS=7200 CROWN 3 1 GROSS=7200/50=144 CROWN

LABLE To manage label is most important thing for the company. Label role is depends on the width of the bottles. It is also stored with crown and closures in isolation. PARTICULER KG PET PET AQUAFINA TAPE BOPP 1. ROLE= 650 METER EX.= 61750/650=95 ROLE VALUE= 15762.08/95= 165 PER ROLE 1 1 1 BOTTEL 145*24 120*24 120 CS CS CS CS

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CORRUGATED BOX IN NUMBERS CALCULATED

CLOSURE Closure is the bottle cap which is used to seal plastic bottles. There are different closures for particular bottles. The closures are stored in particular room and stored in isolation in different racks. Closures are available for the products listed below. Pepsi 7-up Mirinda Orange Mirinda Lemon Mountain Dew Common Aquafina 1. BOX= 3500 CLOSSURE

PREFORM Preform is the plastic test tube, which is used to made plastic bottles to fill up the final syrup to make available it to the final consumer in attractive form in the market. PARTICULER ML BOX 1 BOX 1 BOX 1BOX 1 BOX PCS 700,1056,1300,1344 PCS (25.5 GM 550 PCS (42 GM) 550, 700 PCS (48 GM) 550,700 {48 GM)

CLEAR/GREEN 600 ML CLEAR 1 LT

CLEAR/GREEN 1.5 LT CLEAR/GREEN 2 LT

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CONCENTRATE Concentrate is that material, which used in making syrup to make cold drink. It is stored in concentrate room and in cold storage to keep it safe. Concentrate is liquid material, which required storing in approximately 150 to 200 Celsius temperatures. Concentrate is required in different flavours to make different products as under. PRODUCT 7 UP FLAVOURE PEPSI MIRINDA ORANGE MOUNTAIN DUE MIRINDA LENMON FLAVOURE 1 UNIT 567.8 FLAVOURE 1 UNIT 567.8 SALT SODIUM CITRATE POTASSIAM SORBATE MALIC ACID CITRICT ACID ANHYRAS FLAVOURE 1 UNIT 1703.4 FLAVOURE 1 UNIT 681.3 UNIT 1 UNIT 567.8

FLAVOURE

(A) RAW MATERIAL PACKING MATERIAL FOR RMPM Raw- materials and packing material inventory is made up of goods that will be used in the production of finished products at PepsiCo India Holdings Pvt. Ltd., which is described below. At PepsiCo India Holdings Pvt. Ltd. following raw material and packing materials are used. In PepsiCo India Holdings Pvt. Ltd. all types of raw materials are managed by First in First out (FIFO) method. There is some
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limited time period for the expiry of that material, which is approximately 4 to 6 months. Separate Ware-House for different Material Water is kept in two different tanks. CO2 stored at CO2 plant. Sugar stored at sugar godown. Concentrate kept in cold storage under 150 to 200 Celsius. Sleeve material kept under 280 Celsius. Separate room for closures, crowns and labels. Closures are stored near production plant. Cartons are stored near production plant. Empty bottles are stored at open warehouse.

FOR ENGINEERING MATERIAL If Material which value is more than Rs. 700 than it would be considered to valuated material otherwise non-valuated material Valuated material would be kept in Cup-Board. Non-valuated Material would be kept in Rack, separate numbers are given to each Rack, so it will be easy for storekeeper to note when material would issued. Products Pepsi 7 Up Mountain Dew Mirinda Orange Mirinda Lemon Litter per unit 1703.4 567.8 567.8 567.8 681.3

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The above table indicates that one unit Pepsi is equal to 1703.4 litters. One unit of 7 Up, Mountain Dew, and Mirinda is equal to 567.8 litters. And one unit Mirinda Lemon is equal to 681.3 litters. And following table indicates the Litters for different pack size. Pack Pepsi, Mountain 7 Up, Mirinda Orange Dew,

Mirinda Lemon 200 ml 300 ml 600 ml 1000 ml 1500 ml 2000 ml 0.8 1.2 2.4 3 3 2 0.96 1.44 2.88 3.6 3.6 2.4

(B) WORK IN PROCESS: Work in progress inventory consists of partially complete goods, that is, items currently being used in production process. At PepsiCo India Holdings Pvt. Ltd. more importance is given to raw-materials and finished goods rather work in process, because work in process materials is the material which is required at the time of production. At PepsiCo the process of goods to be converting from raw material to finish goods is short period so it is easy to manage work in process easily.

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(C) FINISHED GOODS: Finished goods stock represent completed products ready to be sold. Finished goods inventory includes completed products waiting to be sold in the market. To maintain finish goods is the major function of any company and it is the major challenge because to manage finish goods is cost in money, because if finish goods is not available at time in the market then it creates wrong image in the mind of the consumer. To manage finished goods is also count in storage cost. Finish goods is managed in following form at PepsiCo India Holdings Pvt. Ltd.

PALLETISE: The finish goods which are made through line is stored in godown to dispatches to the dealers and distributers as per their requirement at PepsiCo India Holdings Pvt. Ltd. One pallet carries 24 boxes. If the pallet is fully loaded then and then only counted under palletise form. NON-PALLETISE: The finished goods which come through production line is stored at godown. If any of the box is carried one less bottle or any pallet carried one less box then its come under non-palletise form. At PepsiCo India Holdings Pvt. Ltd. Finished goods are managed by First in First out (FIFO) method. Company also keeps four to five days stock to fulfil future demand at its godawn at Bharuch. The stock of finished goods is managed by SKU method which is well known method and used in most companies. Daily, weekly, and yearly reporting is done through shipping department at PepsiCo India Holdings Pvt. Ltd. First of all Annual Operation Planning is done at country level. Then it is distributed to the zone wise and then plant wise marketing researcher to find out the demands in the market. Market researcher gives this detail to the distributers and they

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ordered the finish good from the plant through shipping department at the plant. After the order shipping department give detail of order to production department. The stock which is stored at warehouse at the company godown is also managed by SKU method and daily do the daily checking of the stock to keep it maintain for future requirement. The stock of finished goods are stored in isolation at warehouse of the company. (D) Inventory Management of Chemicals and Consumables: There are various types of chemicals starting from bottle washing till the direct use in machinery. These different kinds of the chemicals are to be maintained at good levels so that the functioning of machine can be at place and in some circumstances it can be repaired easily. Some chemicals are not required at all during the run of production but when entire machines stop after the 22 hours production then chemicals may be used to clean the production place. In order to make the surface of the conveyers wet and not too much slippery a type of chemical is used.

(E) Inventory Management of Repairs and maintenance : Repairs may not seem actual part of the organisation but no such department can make the organisation to a standstill, when damage occurs to the machinery or the equipment gets distorted. Repairs could be for both material that is the machinery side or it can be of the service related material that has to be stocked. Repairs can be of the service area as the need may arise for any computer accessory it needs to answered on that only day as any file which has to be mailed may not be able to access from other computer and so it has to be maintained.
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For the Engineering spares, there are more than two-thousand items that are stored at this plant which are too difficult to account for. Since each part has its unique SAP code which makes it identified even when a single unit has been taken. There is equally check of the SAP stored data and the actual one which is physically taken by Stores department on day-on-day basis. Any discrepancy may be immediately investigated.

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To study and analyze the inventory management system and control practices at PepsiCo.(Obj.)

Inventory Control System: Inward Registered Company contains Inward register to control incoming and outgoing materials. The register is described below.

SE N0.

GATE INWARD NO.

DATE

CHALLEN NO.

DESCRIP TION

QTY AS PER CHALLEN

QTY REC.

BILL NO. AND DATE

SAP PO NO. & GRN NO.

DATE

RS.

SAP CODE

REMARK

Physical verification of material would be done on daily basis of RMPM stock with SAP, following details required: PO Description Material Stock- Curr. value INR Valuated Physical Qty UOM Stock Stock Differences Location

If not matched with SAP Physically Re-calculation of material stock would be done. Check whether issue entry would be done as per material issue slip. Check whether receipt entry of material would be done as per store inward register.

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To find out management of projected sales and actual sales of each product.(Obj.)

Management of difference between Projected sales and Actual sales: Each company has its own projected sales and actual sales. To manage the difference between the projected and actual sales is the vital task for each company. Total production mix and production consumption analysis is indicated below.

(1) Production Mix Table for last three year AQUAFINA 2007 2008 2009 PET GRB 941,947

577,211 2,234,199

571,412 1,925,830 1,017,769 744,531 2,706,738 2,524,867

3000000 2500000 2000000 1500000 1000000 500000 0 2007 2008 2009 AQUAFINA PE T GRB

Above graph indicates total production for last three years. In year 2007 total production is Rs.3753357, in 2008 total production is Rs.3515011, and in 2009 total production is Rs.5976136. In 2008 production was decrease approximately 6.35 percentages. And in 2009 it increase by approximately 70 percentages.

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MONTH

Total Prod.

Raw Material

Pack Material

Chemical & Consumabl es

R&M Service

R&M Material

Total Consumpti on

Diff. in Conc. Over prd.

8-Apr 8-May 8-Jun 8-Jul 8-Aug 8-Sep 8-Oct 8-Nov 8-Dec 9-Jan 9-Feb 9-Mar

3,17,065 4,56,058 2,66,066 1,08,198 1,60,502 1,75,401 2,44,054 2,31,824 1,90,090 1,37,627 2,22,200 3,40,445

NA 44 -42 -59 48 9 39 -5 -18 -28 61 52

1,54,33,158 2,05,19,510 1,28,49,543 41,73,365 51,22,328 63,99,168 1,11,22,767 90,57,692 70,53,404 54,42,695 98,56,686 1,68,88,976

1,02,09,746 1,68,68,519 96,94,943 31,70,190 49,94,707 66,60,239 81,91,877 83,97,791 61,19,502 47,14,285 99,39,268 ,41,96,153

537109 668673 520712 231450 274983 317854 490802 437216 807556 341296 319506 548479

105762 1,26,941 53,570 2,75,072 70,435 2,74,943 53,361 1,37,264 2,46,334 52,512 39,014 1,39,256

545629 5,83,337 2,69,691 2,02,888 2,31,314 3,16,593 4,33,519 99,856 5,64,449 20,57,995 5,49,695 7,73,732

2,68,31,404 3,87,66,980 2,33,88,459 80,52,965 1,06,93,767 1,39,68,797 2,02,92,326 1,81,29,819 1,47,91,245 1,26,08,783 2,07,04,169 3,25,46,596

NA 45 40 -66 33 31 45 -11 -18 -15 64 -57 -1 -2 6 16 -21 -6 6 0 -13 3 -5

(2) Production Consumption Analysis for the year of 2008-2009

The above table make us aware of the difference comes in two respective years. Now the major problem in this case is that how company manage this difference to reduce wastage. For this problem company stored excess material at their godown as safety stock to overcome their future demand at the ware house.

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To find out how company apply tight controls to the significant few materials.(Obj.)

Vital Material Management: Some materials are so costly and sometimes it may hazardous also. So to apply tight control on such materials is very vital task for any company. So that overall wealth can be increased and healthy environment can be maintain. There are so many costly and important materials in PepsiCo India Holdings Pvt. Ltd. such as CO2, Oil.

(1) CO2: CO2 is the gas that consists of one Atom of Carbon Dioxide and two Atom of Oxygen, which is used to mix it in the cold drink. CO2 is use to mix up in syrup of different products of the company like Pepsi, Mirinda Orange, Mirinda Lemon, Mountain Dew, and 7 up. The capacity of the CO2 plant is 20 kl (kilo litter), which is ordered from Inox Baroda and Bombay. Automatic cooling plant is use to keep CO2 in liquid form. CO2 is purchased in air form. At present Natural E-Operator is installed which need not to absorb temperature by fans, if CO2 interact with natural temperature it get air form. Before auto cooling plant is use there is plant in which two absorb fans are there to absorb the temperature of the air form CO2 and it is entered in filter machine. This plant is changed because it was very costly. CO2 usage (READING) is checked on daily bases. CO2 sometimes be hazardous so company manage safety precaution to prevent accidents which are mentioned below. Avoid contact with liquid and solid. Provide self-contained breathing in exclusive high CO2 area.
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Wear face cover to protect from liquid and solid. Operate machine at certain degree of compressor.

Usage of CO2 in each packing is described below. Pack Pepsi Mountain Dew 200 ml 300 ml 600 ml 0.03726 0.0540 0.1237 0.03017 0.04525 0.1075 0.05190 0.06949 0.05611 Mirinda Lime 0.0373 Mirinda Orange 0.02277 0.03892 0.08253 0.1325 0.0823 7 Up ES(Soda) Duck Lemon 0.0713 -

0.05402 0.03301 0.05552 0.07430 0.0825 0.1266 0.05190 0.10370

1000 ml 0.05078 1500 ml 0.0768

2000 ml 0.10167

The CO2 is managed by considering above table by the store personnel. Store personnel count CO2 by getting aware of which product will produce by production department. (2) Oil: Company also maintain oil plant to fulfil the requirement of the various activities. Company has a separate oil plant in isolation. Company ordered oil from IOC as per the requirement of the plant. These oil is use to operate various machines at production line, to operate forklift to manage loading and unloading activities.

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To find out how company sale of outdated or slow moving merchandise.(Obj.)

Slow Moving Material Management: Any manufacturing company has specific period of time for the expiry of the material for using purpose. Each and every company try to sale all the finished goods in the market. PepsiCo also tries to produce required material, but in some cases some finished goods remains not sold then company stored these finished goods as safety stock. If the material still not sold for long time then after expiry company sold these materials to those parties who has authority to sold wine, because they provide wine with soda so there is no need to check out the date of expiry. And companys inventory not disturb.

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To find out which material company outsourced and why not it produces on its not.(Obj.)

INVENTORY MANAGED AT UTILITY: It is not possible for any company to produce all the products because it is costly which increase finished goods cost. There are some products which are outsourced at PepsiCo India Holdings Pvt. Ltd. also, e.g., Briquette, empty bottles, water etc. BOILER PLANT: This plant is most important for this company, because at this plant steam is produced which has multi task. The steam is used to wash empty bottles, to dilute syrup, and for sanitation (to use for any cleaning process). The capacity of this boiler machine is 20 kl at its full capacity. But company produce only 16 kl as per the requirement of the plant. Inventory use at this machine is described below. (1) BRIQUETE: Briquette is the solid form inventory which is use as bio-coal to gate hit in the machine. This material consists of wastage of wood, Rice, Wheat, Jute, Grass and so on. This material is ordered from outside of the company. It costs Rs. 4 per kg. And 12 kg steam is produced by 4 kg briquette. Before using briquette material company use oil to get hit which is very costly. By using briquette Inventory Company earns approximately 75 lakhs. Oil is very costly for the company so it replaced by briquette. (2) WATER: Water is managed by the company from it own soft water plant for making syrup. To make steam only soft water is use. This water is comes from G.N.F.C. bharuch. To make water soft company has isolate plant, water passes through 3
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processes. Company has one treated water plant also which is use to make steam for the multipurpose. Compressor: This is pressure machine which compress the temperature in the boiler machine. This compressed air is use for pick up and put the bottles on the production line. REFRIGERATION PLANT: Ammonia and glycol: At refrigeration plant Ammonia gas is used to cool glycol and this glycol cools water and syrup to add CO2 in the syrup. CO2 can be add only in 00 temperature. Air Compressor: This compressor is managed in two form one is High pressure and second is for law pressure. High pressure air compressor is use to operate forklift and to convert perform into plastic bottles at 1200. And law pressure air compressor is use to operate lines requirements of air. Law pressure compressor is known as Numetic system.

(3) EMPTY BOTTLES: To manage empty bottles is very important task for the company, because it is not possible for the company to manufacture new bottles each time due to heavy cost of making glass bottles. There is no need to collect back the plastic bottles from the distributers. To fulfil the requirement of glass bottles company collect the empty bottles from its dealer and manage these empty bottles in companys godown at plant. The production department demand the requirement of empty bottles to the shipping department and shipping department provide the details of the availability of the
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empty bottles. Shipping department manage all these empty bottles by Stock keeping Unit method. If company not found enough stock from the market of the empty bottles and are destroyed then to fulfil the requirement of the production department shipping department ordered and manufacture from the outside. Company stored the old bottles and new bottles in isolation at the plant location. In SKU all the availability and absence detail of the empty bottles is mentioned which document is manage daily, weekly and yearly form at PepsiCo India Holdings Pvt. Ltd.

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To find out security system to ensure that No stock is going out the back door.(Obj.) Security System: It is very essential thing for any company to check that materials are not stolen by internal as well as external persons. To prevent this activity company should take some security steps. There is also security steps are taken by PepsiCo India Holdings Pvt. Ltd. No one can gate access in the store department where the materials are stored without the permission of store person, so that all the responsibility is of the store person. The material whatever issued immediately noted in store records. There is separate issue books are available for each department so that the issued material can be stored under particular department. These records will help the entire department to know the availability of the material in the store department. Various books are as follows, ENG Issue slip (Engineering Material) PRD Issue slip (Production Material) LAB Issue slip LAB Material) Store Check in slip RGP (Return Gate Pass) NRGP (Non Return Gate Pass)

Thus by checking these slips anyone can be able to verify the stock. On the basis of these slips store person do the entry in SAP system by which any one can verify material without checking these slips.

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To find out how long it will take for delivery by the supplier.(Obj.) Delivery Management: Having right material at the right time at the right place is the core function if inventory management. If material is not available at the time of requirement then we can say that inventory control is poor. As inventory Affects Companys balance sheet and cash flow statement to manage it properly is vital thing. PepsiCo ordered their required material to the vendor and vendor sent it within a day if vendor is localised, it will take three to four days if vendor is out of state. After giving order Finance department continuously follow-up of the order. If vendor is continuously fail to provide material on time then Company cancelled suppliers vendor code number and not give them order further. The total inventory of the company is the 38,650 lacks in 2008-09. Total Inventory Rs in Lakh. Particulars Inventory - Stores & Spares - Raw Material - Work-In-Process - Finished Goods Total
20000 15000 Stores & Spares 10000 5000 0 2007 2008 2009 RM WIP FG

Amount 2006-07 14,700.00 5,300.00 3,000.00 3,900.00 26,900.00

Amount 2007-08 19,350.00 5,300.00 600 13,650.00 38,900.00

Amount 2008-09 20,000.00 5,800.00 3,450.00 9,400.00 38,650.00

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The report includes different parts of analysis of the inventory management it also includes as follows. (Obj.) 1. Analysis of the operating cycle of the company. 2. Effect of the various inventories ratios of the company.

(1) ANALYSIS OF OPERATING CYCLE OF PEPSICO INDIA HOLDINGS PVT. LTD. Following terms are found to calculate Operating Cycle. A. Raw Material Conversion Period. B. Work In Process Conversion Period. C. Finished Goods Conversion Period. D. Debtors Collection Period. E. Creditors Collection Period.

Accounts

Cash

Finished Goods

Raw-Material

Work-in-Process

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We can found Operating cycle by using following formula, O=R+W+F+D+C Where, O = Operating Cycle R = Raw Material storage period. W = Work-in-process period F = Finished stock storage period. D = Debtors collection period C = Creditors payment period

The basic tools are required for the Net Operating Cycle is as under: Rs in Lakh Particulars Opening stock of R.M. Closing stock of R.M. R.M. consumption Opening stock of W.I.P. Closing stock of W.I.P. Manufacturing expenses Opening stock of F.G. Closing stock of F.G. Purchase of F.G. Dist. & Other Exps. 2006-07 2800 5300 77300 1800 3000 116000 4800 3900 24700 12900 2007-08 5300 5300 105000 3000 600 149000 3900 13650 40200 15300 2008-09 5300 5800 123000 600 3450 178000 13650 9400 63700 17750

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(A) Raw Material Conversion Period:

Raw Material Conversion Period =

Average Raw Material Inventory 360 Raw Material Consumption per day
Rs in Lakh

Particulars R.M.C.P. Avg. R.M. Inventory R.M. Consumption per day R.M. Conversion Period

2006-07

2007-`08

2008-`09

4050 214.72 18.86

5300 291.67 18.17

5550 341.67 16.23

19 18.5 18 17.5 17 16.5 16 15.5 15 14.5 2007 2008 2009

RM Conversion Period

Interpretation: From the above chart we can see that the year 2008-09 raw material conversion is 16 time. Low raw material conversion period indicates the required of this material is very high. So during the year 2008-09 conversion period is low. These types of material requirements are high and investment of this material is low.

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(B) Work-In-Process Conversion Period:

Work In Process Conversion Period =

Avg. W.I.P Inventory 360 Cost of Production perday


Rs in Lakh

Particulars W.I.P.C.P. Avg. W.I.P. Inventory Cost of Production per day W.I.P. Conversion Period

2006-07

2007-08

2008-09

2400 300 8

1800 400 4.5

4050 460 8.80

10 8 6 4 2 0 2007 2008 2009 WIP Consumption period

Interpretation: Here, in 2008-09 work in process conversion period is 8 times. During the year 2008-09 work-in-process conversion period is high as compared previous years. It is not good because these types of material consumption are very high for the other products production.

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(C) Finished Goods Conversion Period:

Finished Goods Conversion Period =

Avg. F.G. Inventory 360 Cost of Goods Sold per day

Cost of goods sold = Manufacturing exp. + Marketing Administration & other exp. + Personnel exp. + Purchase of finished good. Rs in Lakh Particulars F.G.C.P Avg. F.G. Inventory Cost of goods sold per day F.G. Conversion Period 4350 100 43.5 8775 80 109.69 11525 240 48.02 2006-07 2007-`08 2008-`09

120 100 80 60 40 20 0 2007 2008 2009 FG Conversion period

Interpretation: Here in 2008-09 the finished goods conversion period is 48 times. During the year 2008-09 finished good conversion period is drastically low from the previous year as compared to the year 2007-08. Finished goods conversion period is directly affects the sales of that product. During the year 2008-09 conversion period is low so that time sales of the product is high and storage of that material is low.
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(D) Debtors Collection Period:

Debtors Collection Period =

Debtors 360 Avg. Credit sales per day


Rs in Lakh

Particulars D.C.P Avg. Debtors Avg. Credit Sales per day Debtors Collection Period

2006-07

2007-`08

2008-`09

43,000 2,15,000 72

60,500 2,74,000 79.49

39,000 3,43,000 40.93

80 70 60 50 40 30 20 10 0 2007 2008 2009

DebtorsCollection Period

Interpretation: Here see in year 2008-09 debtors collection period is 40.93 days. The company collect the money for minimum days is very good and here in 2008-09 compare with previous years the collection period is minimum.

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(E) Creditors Collection Period:

Creditors Collection Period =

Creditors 360 Avg. Credit purchase per day


Rs in Lakh

Particulars C.C.P Avg. Creditors Avg. Credit purchase per day Creditors Collection Period

2006-07

2007-`08

2008-`09

5,000 2,00,000 9

4,500 1,70,000 9.52

5,000 1,50,000 12

12 10 8 6 4 2 0 2007 2008 2009 Credit Collection Period

Interpretation: Here in 2008-09 the creditors collection period in 12 days. So, it ascertains that the liquidity of cash will remain in term for long period which gain with higher rate of return on investment.

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Operating Cycle:
Debtors Creditors Operating R.M. W.I.P Finished Stock = Collection = Payment Storage Period = Period = Storage = Cycle Period Period

Creditors Collection Period Rs in Lakh Particulars R.M W.I.P F.G. Debtors Gross O.C. Creditors Net Operating Cycle 2006-07 18.86 8 43.5 72 142.36 9 133.36 2007-`08 18.17 4.5 109.69 79.49 211.85 9.52 202.33 2008-`09 16.23 8.80 48.02 40.93 113.98 12 101.98

250 200 150 100 50 0 2007 2008 2009 OperatingCycle

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Interpretation: In 2008-09 the operating cycle is 101.98 days. So it shows that the operating cycle between the time lag of conversion of Raw material to finished goods is comparatively less than other years. Here we can conclude that the liquidity of the firm is more which assist the firm to pay their creditors within the time limit and receive the debts in proper time.

Effect of the various inventories ratio: The relationship of one item to another expressed in a single mathematical form is known as the ratio. A ratio is a mathematical relationship between two quantities. It engages qualitative measurement and shows precisely how adequate is one key item in relation to another. The various inventories ratios are as follows: A. Inventory to Working Capital Ratio B. Stock (Inventory) Turnover Ratio C. Inventory to Sales Ratio D. Inventory to Current Assets Ratio I have discussed all the ratios which are as follows:

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(A) Inventory to Working Capital ratio: Working Capital = Current Assets Current Liabilities

Inventory Working Capital


Calculate the inventory to working capital ratio, the basic tools are as below: Inventory to Working capital ratio: Rs in Lakh Particulars Inventory Current Assets Current Liabilities 2006-07 26,900 88,000 22,500 2007-08 38,900 1,40,000 54,000 2008-09 38,650 1,20,000 50,000

Inventory to working capital ratio: Particulars Inventory Working Capital Ratio 2006-07 26,900 65,500 0.41 2007-08 38,900 86,000 0.45 2008-09 38,650 70,000 0.55

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0.6 0.5 0.4 0.3 0.2 0.1 0 2007 2008 2009 Inventory to workingcapital ratio

Interpretation: In 2008-09 the ratio is 0.55. This ratio indicates that how many inventories include in the working capital. The ratio indicates the requirement of the inventories, and in 2008-09 the ratio is 0.55, in that time the inventory requirement is high.

(B) Stock (Inventory) Turnover Ratio:

This ratio shows the relationship between inventory at close of the business and the overall turnover. It indicates the number of times the inventory of a firm rotates within an accounting cycle. Total inventory turnover ratio is concerned with the cost of goods sold and average inventory. Stock (Inventory) Turnover Ratio =

Cost of Goods Sold Inventory

Cost of goods sold = Sales Gross profit Calculate the Inventory Turnover Ratio; the basic tools are as follows:

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Particulars Sales Gross Profit

2006-07 2,30000 45,000

2007-08 3,00,000 50,000

2008-09 3,70,000 57,500

Total Inventory Turnover Ratio: Particulars Cost of goods sold Inventory Ratio 2006-07 1,85,000 26,900 6.87 2007-08 2008-09

2,50,000 3,12,500 38,900 6.43 38,650 8.08

10 8 6 4 2 0 2007 2008 2009 S tock Turnover Ratio

Interpretation: It saws that the stock turnover ratio in 2008-09 is 8.08. This ratio indicates how many inventory stocks in the store departments.

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(C) Inventory to Sales Ratio:

Inventory to sales ratio established relationship between the sales with average stock. This ratio measures the velocity of conversion stock into sales. We can find this ratio by using below formula, Inventory to sales Ratio = Particulars Inventory Sales Ratio 2006-07 26,900 2,30,000 0.12

Inventory Sales
2007-08 38,900 3,00,000 0.13 2008-09 38,650 3,70,000 0.10

0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2007 2008 2009 Inventory to S alesRatio

Interpretation: The above table saws that the stock Sales Ratio in the year of 2008-09 is 11%. This ratio indicates how much inventory stock in the store departments.

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(D) Inventory to Current Assets Ratio: Inventory to Current Assets Ratio is concerned with the Inventory and Current Assets. Inventory to Current Assets Ratio is defined the how many inventory available in the Current Asset. Inventory to Current Asset Ratio = Particulars Inventory Current Assets Ratio 2006-07 26,900 88,000 0.31

Inventory Current Assets


2008-09 38,650 1,20,000 0.32

2007-08 38,900 1,40,000 0.28

0.32 0.31 0.3 0.29 0.28 0.27 0.26 2007 2008 2009 Inventory to Current AssetsRatio

Interpretation: Here in 2008-09 includes 32% inventories in the Current Assets, which indicates highest ratio amongst last three years data. And in last 3 years data in 2007-08 has lowest inventories are includes in Current Assets.

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(4) SCOPE OF THE STUDY:


To prepare a project report I had taken the help of PepsiCo India Holdings Pvt. Ltd. as a base. I had taken the data of last 3 years. Analysis of Inventory Management includes the study of the operating cycle, inventory ratios, and different techniques. It will be helpful to understand the theoretical aspects of the topic. The report is also showing companys requirement of the different inventory in the last 3 years, are also closely related to the sales of the company. It will be helpful in analysing past performance of the companys inventory management. The total inventory management of the company is includes the Raw Material Inventory, Work-In-Process Inventory, Finished Goods Inventory.

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(5) RESEARCH METHOD:


There are three types of research Designs Exploratory Research Descriptive Research Causal Research

For Research topic, I have selected exploratory research method which is more suitable for me to find out Inventory Management system at PepsiCo India Holdings Pvt. Ltd., since I have no clear ideas about the study, for this method to apply in the study I adopt personal interview approach, for that I asked following Questions: Which types of Material are available in the Company? How Inventory is managed? How they stored the material? By which method they verify the material? What is the consumption of the company? Production Process.

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E. FINDINGS
The less you rely on human intervention to identify items, input information, and track data, the more timely and accurate your records will be. Company having nice security system as it keep records of all issued materials. And apply ABC classification system. Company manage its difference of projected sales and actual sales as safety stock for future demand at warehouse. Company have separate plant for vital materials like Oil and CO2 and maintain safe and healthy organizational environment. Some times company sell of out dated finished goods to the wine merchants, and sometimes it destroyed the material. Company outsourced Empty bottles and Briquette materials rather to produce it internally to save time and investment. For the verification company use First in First out method for long term and Weighted Average method for short term verification. The management of finished goods material is done tremendously by storing it next to the loading area, which materials are loaded for the sale. From the calculation of the Operating Cycle it is found that companys operating cycle is reduce which is good for the company.

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CONCLUSION
I hereby conclude that my overall experience at PepsiCo India Holdings Pvt. Ltd. was nice during one and half months study. In the academic period we study the theoretical aspects of the inventory management, but here we got practical aspect of the inventory management. We also got general information of various other departments of the organization. From the above information the conclusion is that, the company manage its inventory in proper manner and practice its inventory management successfully. It is necessary to do tight control on A class Inventory. From the above information the conclusion is that, the companys financial position is good.

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F. LIMITATIONS
Since the PepsiCo India Holdings Pvt. Ltd is the multinational company it does not have public shares and it is also not listed in Indian stock market, so it has not provided any financial data. The data required to calculate Operating Cycle are collected from the colloquial conversation while I was undertaking training. The data are collected from various concerned departments. All the data and its interpretations are based on approx figures.

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G. SUGGESTIONS
Company should invest some amount for Research and Development to find out the cheapest techniques to manufacture outsourced materials. Company should also try to calculate the requirement of material by Economic Order Quantity. Company should try to store their raw material at the same place rather different place to save the time and for the optimum use of the space. Operating Cycle of the company is improve as compare to previous year but it is not consistent so company should maintain consistency.

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H. BIBLIOGRAPHY
Financial Management I. M. Pandey Vikas Publishing House Pvt. Ltd. Eighth Edition Financial Management P. K. Jain & M.Y. Khan McGraw-Hill Publishing company limited Fifth Edition Essentials of Inventory Management Max Muller Jaico Publishing house I have also visited the following sights for the study of the Company and to get necessary data related to the company. www.pepsico.com

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