Bharati Vidyapeeths

Institute of Management Studies and Research

A
PROJECT REPORT
ON
System and Process of spare parts inventory

Summer Internship Report Submitted To The
University Of Mumbai
In
Partial Fulfilment For The Award Of Degree Of

MASTER OF MANAGEMENT STUDIES
By
Rupam B Thakar
Roll No 30
2013-2015

For The Summer Internship At
TATA FORTUNE CARS SERVICE CENTER, NERUL






DECLARATION

I, the undersigned, hereby declare that the project report entitled SYSTEM AND PROCESS OF
SPARE PARTS Inventory written and submitted by me to the BVIMSR, NAVI MUMBAI for a doing
of specific project is part of the MMS course under the guidance of BVIMSR my research guide Professor
ASMATARA KHAN is my original work expect the topics on organizational profile and the conclusions
drawn therein are based on the material collected by myself.


Name : Rupam B Thakar
Class : MMS
Roll no : 30
Place : BVIMSR (Belapur)
Date :

__________________
Students Signature







CERTIFICATE

This is to certify that the project report titled System and Process of spare parts Inventory is a
successfully done by Miss RUPAM THAKAR in partial fulfillment of Master Of Management Study
under the Bharati Vidyapeeths during the academic year 2013-2015 through Bharati Vidyapeeths
Institute of Management & Information Technology, Navi Mumbai.





Date:


Mrs. Asmatara Khan Dr. D. Y. Patil
(Project Guide) (Director)






COMPANY CERTIFICATE






















ACKNOWLEDGEMENT


It is a proud privilege on my part to express my sincere and humble gratitude to all those people
who have helped me directly or indirectly in the completion of this project.

I thank venerated Mr. ANIL KUMAR DEHMUKH (), who gave me an opportunity to undergo
my project in TATA FORTUNE CARS SERVICE CENTRE and extend their valuable help and
I also thankful to my corporate guide Mr. N. K. PAL for supporting me and guiding me
throughout the project.

I pay sincere thanks who spent his valuable time and knowledge and gave me whole hearted
support and encouragement in carrying out this project.

I thank all those executives and non executives of TATA FORTUNE CARS SERVICE
CENTER, NERUL who spent their valuable time in interacting and giving their personal time
in interviewing them.

I am thankful to my faculty supervisor Mrs. ASMATARA KHAN Mam for supporting me and
guiding me throughout the project.

I would like to acknowledge all my family members, relatives and friends for their help and
encouragement.




Place: BVIMSR (Navi Mumbai)

Date:
(RUPAM THAKAR)









PROJECT CONTENTS

Chapter 1 Introduction to the project
1.1. Title of the project
1.2. Introduction to the topic
1.3. Objectives of the study
1.4. Scope of the study (literature review-5 articles ppr)
1.5. Limitation of the study

Chapter 2 Introduction to the Industry
2.1. Overview of the industry
2.2. Major Player in the industry
2.3. Project profile of players in the industry
2.4. The Indian market prediction

Chapter 3 Introduction to the organization
3.1. Organisation profile
3.2. Project lines
3.3. Awards won

Chapter 4 Current status of the company (SWOT analysis)
4.1. Research design
4.2. Data collection / Techniques and Tools
4.3. Sample design
4.4. Finding of the survey

Chapter 5 Research Methodology

Chapter6 Data Analysis and Interpretation
6.1. Survey Report and Interpretation
6.2. Survey Interpretation of analysis

Chapter7Conclusion and Suggestions
7.1. Conclusion
7.2. Limitations
7.3. Suggestion to industry overall


ANNEXURES: Include the following details in this section

BIBLIOGRAPHY

QUESTIONNARE



EXECUTIVE SUMMARY

The promise of Tata Motors Service is to bring speedy assistance to customers when in need.
The three Service promises under the brand are:
Responsive
Reliable
Best Value
Responsive Services:
1. Speed-O-Services aims to provide service to customers in the least turnaround
time(around 90 minutes)
2. Quick Repair provides minor repair services and guarantees withdrawal in 30 minutes.
3. Online Services provide a variety of services including appointments, pickups on the
web.
4. Door Step Services (DSS) is a mobile utility vehicle which carries around all service
utilities and can provide service anywhere on the go.
5. 24x7 Road Side Assistance : This is a pan India breakdown and towing assistance
program that is serviced by a dedicated network of over 2,700 authorized service
providers and can be accessed through a toll free helpline which responds in 60 minutes
to 120 minutes.
Reliability of Tata Motors Service Centre ensures that the car in question remains in good health
and quality of service is assured.


Best Value philosophy ensures the following:
1. Best prices with big savings, ensuring peace of mind.
2. Ensuring original parts matching the specs of the vehicle.
3. Extended warranty and benefits to customers.
4. Tending to minor defects like dents and scratches, keeping the vehicle conditioned.








Chapter-1 introduction of the project
1.1 Title of the project:

SYSTEM AND PROCESS OF SPARE PARTS INVENTORY
























1.2 Introduction to the topic:

Effective inventory management is all about knowing what is on hand, where it is in use, and
how much finished product results.
Inventory management is the process of efficiently overseeing the constant flow of units into and
out of an existing inventory. This process usually involves controlling the transfer in of units in
order to prevent the inventory from becoming too high, or dwindling to levels that could put the
operation of the company into jeopardy. Competent inventory management also seeks to control
the costs associated with the inventory, both from the perspective of the total value of the goods
included and the tax burden generated by the cumulative value of the inventory.
Balancing the various tasks of inventory management means paying attention to three key
aspects of any inventory. The first aspect has to do with time. In terms of materials acquired for
inclusion in the total inventory, this means understanding how long it takes for a supplier to
process an order and execute a delivery. Inventory management also demands that a solid
understanding of how long it will take for those materials to transfer out of the inventory be
established. Knowing these two important lead times makes it possible to know when to place an
order and how many units must be ordered to keep production running smoothly.
Calculating what is known as buffer stock is also key to effective inventory management.
Essentially, buffer stock is additional units above and beyond the minimum number required to
maintain production levels. For example, the manager may determine that it would be a good
idea to keep one or two extra units of a given machine part on hand, just in case an emergency
situation arises or one of the units proves to be defective once installed. Creating this cushion or
buffer helps to minimize the chance for production to be interrupted due to a lack of essential
parts in the operation supply inventory.
Inventory management is not limited to documenting the delivery of raw materials and the
movement of those materials into operational process. The movement of those materials as they
go through the various stages of the operation is also important. Typically known as a goods or
work in progress inventory, tracking materials as they are used to create finished goods also
helps to identify the need to adjust ordering amounts before the raw materials inventory gets
dangerously low or is inflated to an unfavorable level.
Finally, inventory management has to do with keeping accurate records of finished goods that
are ready for shipment. This often means posting the production of newly completed goods to the
inventory totals as well as subtracting the most recent shipments of finished goods to buyers.
When the company has a return policy in place, there is usually a sub-category contained in the
finished goods inventory to account for any returned goods that are reclassified as refurbished or
second grade quality. Accurately maintaining figures on the finished goods inventory makes it
possible to quickly convey information to sales personnel as to what is available and ready for
shipment at any given time.


In addition to maintaining control of the volume and movement of various inventories, inventory
management also makes it possible to prepare accurate records that are used for accessing any
taxes due on each inventory type. Without precise data regarding unit volumes within each phase
of the overall operation, the company cannot accurately calculate the tax amounts. This could
lead to underpaying the taxes due and possibly incurring stiff penalties in the event of an
independent audit.

Achieving Best Practice Spare Parts Inventory Management
Superficially, achieving best practice spare parts inventory management looks simple because
spare parts can appear to be just like any other inventory. But the problem is that they
arent. Spare parts inventory is different to other inventory types and this is why best practice (or
even good practice) can be so hard to achieve.
The reality is that spare parts inventory management and optimization brings together the diverse
disciplines of maintenance management, inventory management, storeroom management, supply
chain, procurement and logistics. This adds a layer of complexity that isnt found with other
inventory types.
As a result, most companies managing spare parts inventory end up with too much of some
items, not enough of others. They are overstocked, yet under serviced. They spend more than
they should on working capital while experiencing extended downtime that costs a fortune.
The unique problems faced by the organisation in controlling/managing the spare parts are as
follows. Firstly, there is an element of uncertainty as to when a part is required and also the
quantity of its requirement. This is due to the fact that the failure of a component, either due to
wearing out or due to other reasons, can not be predicted accurately. Secondly, spare parts are
not that easily available in the market as they are not fast moving items. The original equipment
manufacturer has to supply the spares in most of the cases. New models are introduced to
incorporate the design improvements and old models are phased out. Hence the spares for old
models are not readily available.

The objective of spare parts management is to ensure the availability of spares for maintenance
and repairs of the plant and machinery as and when required at an optimum cost. Also, the spares
should be of right quality. There are many actions required to ensure the spare parts management
effective.











There is a need for systematic actions while managing spare parts as given below:

a. Identification of spare parts

b. Forecasting of spare parts requirement

c. Inventory analyses

d. Formulation of selective control policies for various categories

e. Development of inventory control systems

f. Stocking policies for capital & insurance spares

g. Stocking policies for rotable spares or sub- assemblies

f. Spare part inspection





























1.3 Objectives of Fortune cars:

1. To give quality service to the customers.

2. To know the exceptions of the customer and fulfil the exceptions.

3. To maintenance good relationship with customers.

4. To give quality service and reasonable charge.

5. To maintain the healthy environment in the organization.

6. To give full support to the employees and the customers.

7. To provide training and development to the employees to satisfy the customers need to
the maximum extend.

8. The main objective is to find out awareness of the spare parts in workshop and to repair
customer car in given time at same day.

9. To find out the satisfaction level of people.






















1.3 Scope of the study: (Literature Review)

Abstract

Spare parts inventory are needed for maintenance and repair of final products, vehicles,
industrial machines and equipments, frequently requiring high investments and significantly
affecting customer satisfaction. Inventory management is complex due to the large number of
different items and low demands. This article presents a literature review on single location spare
parts inventory control, embracing both demand forecasting techniques and inventory
control decisions on the different life cycle stages. Overall, the literature review identified the
following research opportunities on inventory management: criteria to decide to stock or not an
item, how much to order in the first and the last batch, demand forecasting and inventory control
models integration and case studies on real applications.

1. Introduction
Spare parts inventories are different from other types of inventories incompanies.Cohen
and Lee(1990), Cohen, Zheng and Agrawal (1997), Muckstadt(2004), Kumar (2005) and
Rego (2006) have pointed out some important factors in the management of these
inventories:

o Customers have rising expectations concerning quality of associated products and services.
The occurrence of failure is already a concern and the delay in repairing due to lack of spare
parts worsens clients negative perception

o Some items have high demand (parts with great wearing and those related to preventive
maintenance), but the great majority has intermittent demand and The increasing complexity
of products and the life cycles reduction generate an increase on the Amount of active codes
and risk of obsolescence. Initially, it is important to distinguish disposable parts from
repairable ones. Spare parts are extremely expensive in some segments, and their repair
(instead of discard) is feasible; damaged units can be replaced either by new units or by
repaired ones.

o Another dimension of the inventory control is associated with the existence of a single or
multiple locations inventories (KENNEDY; PATTERSON; FREDENDALL, 2002). This
article focuses on the literature related to the management of spare parts inventory in a single
location.

2. Demand forecasting

Most spare parts present intermittent demand, that is, occur at given moments followed by long
and variable periods without demand. Intermittent demands are particularly difficult to predict
and shortage may result in extremely high costs (HUA et al., 2007). According to Love (1979),
demand forecasts are absolutely necessary for the inventory levels planning. Although forecasts
are subject to errors, the knowledge of these errors enables the definition of the necessary safety
stocks. Makridakis, Wheelwright and Hyndman (1998) constitute a classical reference in demand
forecasting. A review of the past 50 years of the demand forecasting literature on inventory


management can be found in Syntetos, Boylan e Disney (2009). Ghobbar and Friend (2003)
compared 13forecasting techniques to aircraft parts demand and proved the superiority of the
techniques: weighted moving average, double exponential smoothing (Holt),and Crostons
method. Similar results were presented by Regattieri et al. (2005). Eaves and Kingsman (2004)
evaluated spare parts demand forecasting techniques in the case of British air-force
(RAF),including SBA and Crostons method, and demonstrated the superiority of the SBA
method to a certain service level. Willemain, Smart and Schwarz (2004) developed forecasting
models for intermittent demands, using the bootstrapping technique to assess the demand
distribution during lead-time, considering autocorrelation and introducing small demand
variations to the original series.

































Chapter-3 Introduction to the organization


3.1 Organization profile: Company profile of fortune cars

Fortune cars service centre has made deep image in the service car workshop at thane, nerul
and panvel from the house of Tata motors. As a professionally managed car dealer. Fortune cars
service center is committed to excellence in servicing all esteemed customers.

A fortune car has earned a new name & fame since it has become an authorized dealership for
Tata Motors in passenger car world. As an authorized dealer of Tata Motors cars, we bring to
you first rate and leave no stone unturned to provide great service.

The workshop even supports you with the service centre, to assure you quality service. The
fortune car service centre is associated with the various sections to guide our valuable customer
through the entire car service process right from warranty service, cleaning, repairing to helping
hand to our customers.

Fortune cars of Tata Motors proud to say that we have been made an elite delar by Tata
Motors for recognition for outstanding achievements and dedicated dealership enhancement. We
are connectively located at nerul MIDC LP . We have service of Tata motors passenger
vehicles like Tata Indica, Manza, Vista, Indigo, Nano, Sumo, Safari, Sumo Gold and Sumo
grand etc. through our service outlets.

The workshop is large would offer sales service, spare parts and accessories support to its
customers. Service centre is out fitted with the latest equipment and updates with Tata challenges
and standards. Technical team is qualified and trained to analyze and to provide accurate solution
as a service point of view.





Mission and vision
The mission and vision of the organization is ultimately to satisfy the customer requirement and
have a potential customer bases. A potential and prospective customer bases that are satisfied
with the kind of service they are giving to the customers.









Company vision: http://www.asauto.in/profile.html
Fortune car has a vision to add up a value for customer service and provide the
availability of spare parts to the workshop car repairing.
The main vision is customer service motto

Company Mission:
Company main mission is to retain and reinforce out position as a leading service centre
of Tata automotive spare parts and to meet the aspiration


























Roles and Responsibilities:

Encharge executive - Mr. N.K.Pal

As a managing director he will be responsible for the overall functioning and administration of the
company.
The managing director also decides the major changes and adoption of new technology. He provides all
types of support to the management representative in the implementing and maintaining quality system in
the company.
He will be authority for approving the quality manual, quality objection of the company.



Assistant General Manager - Mr. Sanjay shimpi

He will guide the staff to maintain all concerned records
He will be responsible for passenger car service planning
He will be chief authority for service related issue
He will be responsible for the maintains of quality system in the service department


CRM Mrs. Sanjoti Naik

Responsible for taking the customer care when came for car servicing
















Competitor in the market:
Toyota
Ford
Honda
Hyundai
Skoda
Volo
Maruti Suzuki
Mercedes



















Indian Auto mobile industry:
























Chapter-5 RESEARCH METHODOLOGY
The purpose of methodology is to describe the process involved in research work. This includes
the overall research design, data collection method, the field survey and the analysis of data.
SOURCE OF DATA COLLECTION:

PRIMARY:
For my survey primary data have been used as a questionnaire to collect the data.


SECONDARY:
The secondary data has been collected from the following models:

Magazines
Books

Data through internet sources

The main objectives of study:

a. To learn how the company keeps all the data of inventory perfectly.

b. To study how finance department of the company work.

c. To find out the composition of inventory.

d. To study the various inventory ratio.

e. To analyze the inventory management techniques used in the

f. To study the Inventory Control Techniques of the company.


















Data Analysis Techniques:

For the purpose of analysis of the data and the report I have kept in mind the objective and
analyzed each and every data I got at each stage of the report. I have used many tools for
analyzing the data and the different ratios used for it are as follows:

i. Total investment in inventory ratio.

ii. Total inventory to current ratio.

iii. Raw materials turnover ratio.

iv. Work in process turnover ratio

v. Finished goods turnover ratio.