Shakti Industries Existing Inventory Control Practices

Group 6- Section B

Amritpreet Singh (2011057) Disha Gupta(2011067) Gavaksh Mangla(2011080) Nitish Jadhav(2011092)

Information about the company

Shakti Industries came into existence in the year 2007. The company is a manufacturing unit of alloy steel / Nickel Ingots for re melting. The main industries that buy these ingots operate in the area of:
High Speed Steel Mild Steel Solid Steel Bar Solid Steel Stainless Steel Plates

 The company employs 30 people in its operation and runs 3 shifts a day. The arc furnace has a capacity of handling 1000 kg metal at a time and the company runs 4 lots of 1000 kg each. The turnover of the company is Rs18 cr. per annum.

Raw materials used

The Company uses four types of materials: Basic raw materials Catalyst MRO( Maintenance Repair Operating Supplies)

Additional material

Basic Raw material

The waste material of other industries which is obtained as dust of leth machines.

Ingot is a material, usually metal, that is casted into

a shape suitable for further processing. There are 6 types of dust material used by the company such as steel dust, iron dust, bolt cast outs etc.

Catalyst
The company uses different type of catalyst to fasten the process. This is done by bringing down the melting point. Some of the materials used by company for this purpose are :

Lime
SPAR FeMn : Ferro Manganese : Act as a deoxidizer.

FeSi(chips) : Ferrous Silicate chips : Act as deoxidizer.

FeSi(lumps) : Ferrous Silicate lumps : Act as deoxidizer. Silico-Mn : Sillicomanganese : Act as deoxidizer.

MRO ( Maintenance Repair Operating Supplies)

MRO is held by the company for maintenance and proper working
of the Arc furnace. This is a preventive measure taken by the company to perform

routine activities without any glitches.

The materials used for this purpose are: Acc R mass

Acidic R mass
TATA R mass

Additional material
There are some additional material used by company such as: Bricks K3 Bricks K1 Bricks STR

Tiles
O2 LPG.

Inventory Management
Company keeps an inventory of approximately 35 items. The company uses Q model or continuous inventory system.

 The company maintains an inventory record. At the end of the day, the inventory is physically counted and this data is fed into computerized inventory management sheet. This sheet automatically calculates the left over stock which gives an idea when to reorder the particular material. The company orders a fixed amount of a given item every time it places an order. The time of order depends upon the nature of the material, its consumption, transportation cost and volatility of price of the raw material.

Shakti Industries
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Material Lime SPAR FeMn FeSi(chips) FeSi(Lumps) Silicon Mn Fe Cr Powder Gr. Scrap Metcoke Fe. AlScarp Silicate Bentonite Gr. Elect. Acc R. Mass Acidic R. Mass TATA R. Mass Whytheat 'A' Whytheat 'K' Silica Board 20 mm Silica Board 25 mm Bricks K3 Bricks K1 Bricks STR Tiles O2 L.P.G Temp. Tips 100 pcs Reorder Point 2000 kg 200 kg 80 kg 80 kg 80 kg 80 kg 80 kg 100 kg 100 kg 50 kg 50 kg 50 kg 30 pcs Na Na 4000 kg 650 kg 650 kg 520 pcs 520 pcs 150 pcs 150 pcs 50 pcs 50 pcs

Layout of the facility

Process
Using Crane, Pick the raw materials Weigh the raw materials Put a Mixture of 1000kg of raw Materials in Arc Furnace

Immerse the graphite rods into the Furnace

Put charge into the furnace

Using Thermometer, Measure the temperature at fixed intervals

For steel, as temp. reaches 1500 C, separate out the slag

Put the molten metal alloy into casing to shape it in form of ingot

Send the sample to the lab for Spectro analysis.

Data Analysis
The furnace runs each day for 24 hrs. and works 6 days a week( 1 day for maintenance).

Rated capacity of the Arc Furnace is = 1000*4*7*52 kg =

1456 MT/year. Thus the effective capacity of the Arc Furnace is

=1000*4*6*52 kg = 1248 MT/year.

Therefore, the efficiency of the furnace is = 1248/1456 = 85.72 %.

Finished Product
The final product, i.e. ingots is stored in the operating shed itself. For the finished goods inventory, company uses make to stock model. Not much quality measures are taken care of while formation of the ingot because the company is melting the leftovers of other industries, whose composition is known beforehand. After the ingots have been made, the company sends a sample of the product to the laboratory for spectro-chemical analysis. Company then sends a quotation of the price with the results of the spectrochemical analysis, accordingly the clients whose requirements are nearest to the composition of the ingot accept the quotation.

Maintenance and Repair

Wednesday of each week is reserved for maintaining the Arc furnace which is backbone of all the processes in the plant. Each Wednesday, the lining of Arc furnace is redone so as to ensure that the arc furnace works 24 hours for all the 6 days in the coming week. This lining is done by the operators of the furnace itself. Apart from the lining, there is 1 more item that wears and tears each time the metal is molted. They are the Graphite rods. The electrode has a pipe kind of mechanism in which an additional electrode is fitted below an electrode which has depleted so as to minimize the waste of this resource.

MIS
The Factory, on a daily basis, sends a report to the Corporate office , which is located in the city. This report includes the amount of raw material consumed, the amount of raw material received, the amount of output generated, the amount of electricity used.

Pollution Control System

Company has a Air Pollution Control System. This APC is used to control the flue gases generated during their

melting process.
This is done by passing the thick smoke through water, which in turn dissolves the harmful gases. Thus , the smoke becomes less harmful for the environment which is then released.

Suggested Improvements
1. Inventory storage 2. Workers Safety 3. Limited capacity

Inventory storage
The entire inventory is stored under an open shed which has no safety precautions. The raw material is prone to spoilage during rains. Hence they should build proper inventory

storage room so as to prevent raw materials

from getting spoiled.

Workers Safety
The working area is not properly laid out. While loading materials in the furnace by crane, if anything falls on the workers, there are no proper safety measures. Hence, the company should install safety measures to avoid any mishap. While adding charge to the arc furnace, the workers are prone

to high temperatures which could be fatal in the long run.

Limited capacity
The Company is operating at its full capacity. Thus, if there is any emergency order, Company cant

fulfill its customer requirements.

Hence, there is need for expansion as the competition is increasing. The company is already in process of setting up another furnace.