INTERNSHIP REPORT ON

OPTIMIZING INVENTORY MANAGEMENT AT PHP: SIMPLIFIED STARTEGIES FOR

EFFICIENCY
In the partial fulfillment of the requirement for the Degree in Bachelor of Engineering in
Mechanical

Submitted To

SAVITRIBAI PHULE PUNE UNIVERSITY

Submitted By

Mr. Shaikh Mustafa A. (72254976J)

Under The Guidance of

Prof. Sachin Mande

DEPARTMENT OF MECHANICAL ENGINEERING

H.S.B.P.V.T. PARIKRAMA COLLEGE OF ENGINEERING, KASHTI, TAL- Shrigonda, DIST-

Ahmednagar, INDIA-414701 ( 2021—2022 )

1
 Acknowledgement

The Project undertaken by me during the period of this summer training was related to the
“OPTIMIZING INVENTORY MANAGEMENT AT PHP: SIMPLIFIED STARTEGIES FOR EFFICIENCY” and it
warranted a lucid data analysis of the same for successful accomplishment. I had been helped, in
this context to a great extent by my project guide Mr. Sachin Mande, Indirect Purchase Manager. I
am grateful to him for guiding me to successfully complete the project.

I wish to offer my gratitude to the all managers of the Indirect Purchase department
whose valuable guidance and attention to the project eased the way for its completion.

Last but not the least I would like to express my sincere gratitude to Mrs. Anjali Mali (PHP-HR), who
gave me an opportunity to come face to face with real life working challenges and helped me to
develop a deep insight of the current industry practices.

I am overwhelmed with the support I have received here at INDIRECT PURCHASE. All of them made
my stay at PHP an enriching learning experience.

2
 DECLARATION

I do hereby declare that the project report titled “OPTIMIZING INVENTORY MANAGEMENT AT
PHP: SIMPLIFIED STARTEGIES FOR EFFICIENCY” Submitted by me, in partial fulfilment of the
Graduation from Parikrama College Of Engineering, Kashti is exclusively prepared and
conceptualized by me and is not been submitted to any other institution or published anywhere
before.

Signature NAME: MUSTAFA SHAIKH

Date: (72254976J)

3
 CERTIFICATE
To whom it may concern

This is to certify that the project entitled ‘OPTIMIZING INVENTORY MANAGEMENT AT PHP:
SIMPLIFIED STARTEGIES FOR EFFICIENCY’ submitted by MUSTAFA SHAIKH in fulfilment of the
requirements for summer Internship for PARIKRAMA INSTITUTE OF ENGINEERING ,KASHTI during
the academic year 2023-2024 in Project under embodies the work done by them under my
supervision from 01-11-23 To 30-05-24.

-------------------------- ----------------------------

Mrs. Sushree Mishra Mrs. Anjali Mali

Indirect purchase manager PHP HR Tata Cummins Ltd

4
 PROJECT

 Studying the parts description to identify and removing duplicity of the parts in Tata
Cummins Ltd.-1, 2 & 3.

 Segregating all the parts with more than one part numbers.

 Removing the duplicate part numbers from the system.

 Defining the nomenclature of the part description and educate the Buyers for the creation
of part.

 Designing the nomenclature of the part description to prevent duplicity parts.

 Defining the Min – Max Qty for the C-class category items.

5
 TABLE OF CONTENTS

CHAPTER DETAILS PAGES

1. INTRODUCTION TO PHP 7

2. SAFETY MEASURES FOLLOWED 12

IN PHP

3. COMPONENTS BEING PRODUCED 13

IN PHP

4. INTRODUCTION OF INDIRECT PURCHASE IN PHP 15

4.1. BRIEF DESCRIPTION OF THE PROJECT 16

PART CREATION
4.2. P PART CREATION PROCESS IN PHP 18

4.3. RESEARCH & METHODOLOGY 32

4.4. RECOMMENDATION BY CREATING NOMENCLATURE OF 37

PART DESCRIPTION.

4.5. MIN-MAX QUANTITY FOR CCLASS CATEGORY ITEMS 42

5 CONCLUSION 42

6 REFERENCES 43

6
1. INTRODUCTION TO TATA CUMMINS LTD :-
Cummins Engine Company Inc. was founded in Columbus, Indiana in 1919 when successful
banker/investor W G Irwin supplied the capital for a local self-taught mechanic and inventor
Clessie Cummins to begin manufacturing diesel engines. Working out of an old cereal mill in
Columbus, the first engine made by Cummins was a Dutch designed, six horsepower, farm type
diesel. By 1925, the company had begun producing its own design with enough success that
operations were relocated to a new larger site where the Columbus Engine Plant is now located.
It was here that Cummins created the breakthroughs that solved critical problems of injection
timing and introduced a successful marine engine, originally installed in shrimp boats. The engine
proved so economical that its popularity soon spread to other applications, including generator
sets, drills, power shovels and air compressors.

Fig-Assembly line in PHP

Cummins has been associated with the Indian subcontinent for five decades. The stage was set
way back in 1962, when a partnership between Kirloskar and Cummins crystallized into a 100-acre
manufacturing campus in Pune. Within a span of three years from commencing operations, the
business venture started to generate profits. There on, the partnership continued to flourish, up
till 1997, when the Kirloskar’s sold their ownership; resulting in Cummins Inc. increasing its stake
to 51% and the rest being traded on the Bombay Stock Exchange. This led to the formation of
Cummins India Limited, a consolidated subsidiary of Cummins Inc.

Tata Cummins is a joint venture between these two world leaders. The agreement was signed in
July 1993 with plant construction starting in the industrial township of Jharkhand Phaltan in April
1994 and commercial production commenced on January 1 1996. The entire organization has
been set up from scratch at a Greenfield site. The Rs 300 crore project widely acknowledged to
be the fastest implementation of its size and nature (within budget) in the industry and within

7
Cummins family worldwide. The Company has installed capacity to manufacture 1,20,000
Engines.

Today Cummins in India has expanded its businesses across markets and geographies, spanning
200 locations in the country. The Group has also commenced production at its 300-acre Megasite
project in Phaltan ,Maharashtra that will allow all future projects to operate from a single location.
Employing close to 14,000 individuals, the Group has reported combined sales of approximately
Rs.10,500 crores in 2011.

Tata Cummins Limited is a 50:50 joint venture between Tata Motors Limited, India's largest
automobile manufacturer and Cummins Inc., USA, world leaders in design and manufacture of
diesel engines. Manufacturing plants have been set up each at Phaltan and Phaltan in Maharashtra
for manufacturing diesel engines to power commercial vehicles of Tata Motors Limited. The plant
at Phaltan manufactures 1,20,000 engines per annum. The second plant that was commissioned in
January 2011 at the Cummins Megasite at Phaltan has a capacity of 60,000 engines per annum with
plans to increase to1,20,000 in future.

Our other partner Tata Motors is the largest manufacturer of commercial vehicles in India. Tata
Motors was established in Phaltan in 1945, with the agenda of manufacturing steam locomotives.
In 1954, the company expanded into automobile manufacturing, through collaboration with
Daimler-Benz of Germany. By the end of the collaboration in 1969, Tata Motors had fully
developed the capacity of designing and manufacturing Medium Commercial Vehicles– taking the
first step towards indigenization. Tata Motors manufactures an entire range of Heavy, Medium
and Light Commercial Vehicles, Multi-Utility Vehicles and Passenger cars.
The relationship that Tata Cummins has with Tata Motors needs a mention. Tata Motors is parent
to Tata Cummins; it is a supplier, a customer and also its competitor. This unique relationship is
studied at Harvard University. With the advent of Euro-III norms in some city of India; Tata
Cummins has now started producing Euro-III engines. The engines produced by other automobile
companies are semi electronic but Cummins came up with fully mechanical version of the engine.
The fully mechanical version of engine is now the USP of Tata Cummins.

Tata Cummins is ISO 9001, ISO 14001 and TS 16949 certified.

• Cummins in India is a Group of complementary businesses that design, manufacture,

distribute and service engines, generators and related technologies.

• Its technology and pioneering initiatives bring innovative solutions and dependable services
at the best possible value to users across the country.

• With values of integrity, innovation, delivering superior results, corporate responsibility,

diversity and global involvement ingrained across the organization, the Vision and Mission are the
solid foundation that define who we are and what we do.

8
PRODUCT OFFERING:-

The business’s expertise in offering end to end solutions to the truck and bus market
segments, lies in its ability to knit together diesel and gas engines with related technologies
including filtration, exhaust, turbo, fuel, lube oil and coolant systems.

For its on highway applications, the Automotive Business markets the B series, ISLe and ISBe
engines under the diesel range, and C series, Stoic and L series engines as part of its lean burn
natural Gas portfolio.

B
series : The most promising model from the Company’s product portfolio , the B 5.9 mechanical
engine is designed for providing lower acquisition and operating cost solutions to customers for
meeting BSIII and BSIV emission standards. Available in a range of 130 to 180 HP, the engines power
rigid trucks , specialty vehicles and buses.

ISLe : A premium electronic product range from 280 to 375 HP, is equipped with waste gate
turbocharger. Also available are highly flexible power choices with less weight, compact size and
fuel efficient 8.9 litre configuration fitted with high pressure common rail system. Global design
engines are available that meet Euro 3, Euro 4 and Euro 5 emissions.

C series : Available in 250 and 280 HP, the series with low ultra emission is an ideal choice for
the heavy duty segment. Plus technology in C gas and Waste gate turbocharged engine capable of
operating on CNG, LNG, renewable natural gas or landfill gas, finds suitable application in the bus
segment.
B Gas : The six cylinder, lean-burn-spark-ignited natural gas engine provides excellent
torque, high fuel efficiency and reliability. Available from 195 to 230 HP range, the engines come
with added features like ultra low emission and plus technology.

9
LOCATION:-

The Company is located at Phaltan & Presently the Green Field project has started up at Pune
(Phaltan, Satara District).

MANUFACTURING SYSTEM:-

The world class manufacturing systems of Tata Cummins are benchmarked against the best
internationally and comprise facilities for machining 5 major engine components and facilities for
Assembly, Test and Paint of engines.
Assembly of engines is performed on a state-of-the-art Automated Electrified Monorail System,
which is roof, mounted for clean floor assembly. The system is fully PLC (Pneumatic Logic Control)
controlled and linked to a computerized Assembly Management System. It incorporates Falsifying
at each station and In-Process-Verification Systems at critical points for defect free assembly. Laser
Pulse Tools, Pneumatic Manipulators and Ergonomically designed workstations and facilities are
provided to reduce operator fatigue.
Dedicated Machining lines are commissioned for each of the 5 components which are
manufactured in-house viz. cylinder block, cylinder head, crankshaft, camshaft and connecting
rods. Equipment has been sourced from leading suppliers in India and overseas to ensure very high
levels of capability and reliability. This includes latest gauges, three Coordinate Measuring
Machines and sophisticated equipment such as CMM machines and Marpos & Baker Gauges for
cylinder bore measurement.

10
Cummins Vision:-

 Making people better by unleashing the power of Cummins.

Cummins Mission:-

• Motivating people to act like owners working together.

• Exceeding customer expectations by always being first to

• market with the best products.

• Partnering with customers to make sure they succeed.

• Demanding that everything we do leads to a cleaner, healthier, safer environment.

• Creating wealth for all stakeholders.

What do we value?

• Integrity: Strive to do what is right and do what we say we will do.

• Innovation: Apply the creative ingenuity necessary to make us better, faster, first.

• Delivering Superior Results: Exceed expectations consistently.

• Corporate Responsibility: Serve and improve the communities in which we live.

• Diversity: Embrace the diverse perspectives of all people and honour with both dignity and
respect.

• Global involvement: Seek a world view and act without boundaries.

11
 2. SAFETY MEASURES FOLLOWED IN PHP:-

• An area marketed by black lines throughout the corridor serves the footpath for people
walking. This marking is to allow safe movement of persons as company owns 11 ‘Forklifts’
which are almost continuous at work throughout the day.
• Use of convex mirrors at blind curves to make people aware of any moving body coming
from another side (forklifts in the worst case).
• Use of warning signboards at regular places directing how to be safe in the plant.
• Safety shoes are the must to be worn inside the plant while working or moving.
• Since very less of overhead work is done in the plant, hence helmets are not required.
• Use of safety gloves is necessary while working on the machines or coming in physical touch
with the machines.
• Safety glasses are a must to be worn by people working or roaming through the plant, as
dust particles can easily enter eyes, since blowers are in repetitive use.
• Signboards with arrows on them indicate the direction to
take to ‘exit’ in case of any emergency which take place in the plant.

• Use of ‘LOTO’ i.e. Lock Out Tag Out which means to lock out the machines during
maintenance or other job different from everyday use, either electrically or pneumatically
was an important rule followed strictly by each and every personnel.

12
 3. Components being produced in PHP:-

Shop Operations is the core function of the company which manages the complete operations in
the shop. It holds almost 70% of total company’s manpower.

Shop Operations consists of:-

• Assembly, Test and paint BU (ATPBU)
• Cylinder Block BU (CBBU)
• Cylinder Head BU (CHBU)
• Crank Shaft BU (CRBU)
• Connecting Rod and Cam shaft BU (RCBU)

 Assembly, Testing & Painting Business Unit (ATP BU):

The Assembly, Testing and Painting Business Unit at PHP houses one of the most sophisticated
assembling and testing facilities among the Indian industries. It is at this unit that the various Made
in Works (MIW) components and the Bought Out Finished (BOF) components are assembled to
produce the engine, which then undergoes through the processes of testing and painting before
being delivered to the customer. This unit is the biggest BU in PHP in terms of manpower employed
and is broadly divided into three loops as per the operations performed. ATPBU has several unique
features which are not found in most assembling units, which include the use of Automated Electric
Monorails (AEM), Automated Guided Vehicles (AGV), InProcess Verifications (IPV), Assembly
Management System (AMS) etc. The whole layout is essentially line-type and all the loops are
further subdivided into stations and each team is assigned the responsibility of a particular group
of stations.

 Cylinder Block Business Unit (CBHU):

This is the largest business unit in the Tata Cummins limited. Cylinders blocks are manufactured in
this unit which are then send to assembly line. The raw material used is cast iron, which is bought
from Tata Motors Phaltan. Due to heavy chip removal intense dust formation is the problem with
this line. Most of the operations performed on the block are without using coolant

 Cylinder Head Business Unit (CHBU):

In this business unit cylinder heads are manufactured which send to assembly line. CHBU is a fully
automated line having least number of associates in PHP. The raw material is Cast Iron casting and

13
it comes from Tata Motors, Phaltan. The entire line is divided into different cells depending on
similarity of the operations performed on the machines.

 Crankshaft Business Unit:

Crankshaft Business Unit (CRBU) of Tata Cummins Limited produces the crankshaft, which is then
sent to the assembly for fitting into the engine. Like the connecting rod, the raw material here is
also obtained from Bharat Forge, Pune in the form of a forging. A number of crucial and intricate
operations on the crankshaft finally give the finished product. The machining operations in CRBU
are carried out across 35 machines, which are divided into two lines:
• Soft Line
• Hard Line

14
 4. INTRODUCTION OF INDIRECT PURCHASE IN PHP

• As we can see in the above flowchart that the request for indirect materials whether it’s for
spares, tools or consumable items comes from Business unit (BU) or Functional unit (FU).

• We have to check whether the issue date is mentioned in the request for the materials or
items requested from FU or BU, if no then it will be returned back to that same department
from where it was being generated.

• If yes, then there will be a check whether the required quantity or any substitute is available
for that item or not, if yes then required items will be supplied to that department.

• If the quantity required or the substitute item is unavailable then the request is being
diverted to the buyer who will be buying the item, after getting at least two different quotes
from the supplier for price comparison accordingly the material will be purchased.

• If the material cost is more than the specific amount then there is approval required from
Deputy general manager (DGM) and General manager (GM) of Indirect purchase and if the
price is less than the specific amount then their is a approval required from Business unit
leader (BUL) from Indirect purchase.

• After the approvals being done the purchase request (PR) is being raised for the items.

• After the purchased request is being made it is forwarded to DGM or BUL of Indirect
purchase for approval according to the price of the item.

• Once the PR is being approved then purchase order(PO) is being made for approval

• If there is a price hike of 5% from last purchase price and that too within a year then PO will
be transferred to Managing Director (MD) for approval.

• After the approval of Purchase order it will be moved to supplier then material will be
received and quality check will be done of those materials and finally it will be supplied to
the store inventory.

15
 4.1. Brief description of the project

I have done my project in Indirect Purchase. In my project work I have to segregate all the duplicate
part numbers with same part description which are still being used i.e. in active status from Tata
Cummins 1, 2 and 3 and deactivate it from the system. As the part numbers with description are
being created manually in PHP so there are chances of duplicity and due to this duplicity their
problem raises of

a) Stock keeping – as there will different part numbers of the same item hence it will increase
the inventory.

b) Pricing – due to different part numbers of the same item there will be a problem of
identifying that which part has been bought at what price which will also raise difficulties in
comparing the prices from the different price quotes which will create problem in repurchasing the
correct item with right price.

c) Inventory – Inventory will always show as high due to this duplicity because of the same
item with be entered in the Inventory data with different part numbers.

These above were the few major disadvantages of the duplicity of the part numbers.

Along with this my project work I have to define the nomenclature of the part description and
educate the buyers for the creation of the part, designing the nomenclature of the part
description to prevent duplicity parts for future & defining the Min – Max Qty for the C-class
category items.

4.2. PART CREATION PROCESS IN PHP

• The requirements of the indirect items are being given from BU (Business Unit) and FU
(Functional Unit).

• The requirements of the indirect items are being checked in the system.

• If those items are available then we can get it from the store and if it is not available then
we have to check whether that particular number exists or not.

• If that part number already exists then fill the item creation request form and send it to
indirect purchase to check for its substitute available, if the substitute is available then
inform it to the user and if it is unavailable then arrange for the item

16
As the unique part numbers with part descriptions are being created manually in PHP hence there
are possibilities for duplicity or errors which may occur during the part number creation.

For example:-

Part number Part description

0115612588 [Link] SLEEVE ..MT3- MT2..

0115612598 [Link] SLEEVES ..MT3-MT2.-.-

In the above example it shows that the part description are different for the same item for the two
different part numbers, this is the duplicity of the part which need to be identified and deactivated
from the system.

Below figure will show how the part numbers with part description are being created in PHP.

Fig- Part number & part description creation tool in PHP

17
 4.3. RESEARCH & METHODOLOGY

• At the beginning I have collected all the data required in the excel format from ITR tool of
PHP 1, 2 & 3.

• For extracting the data we have put a request through ITR tool mentioning the
requirements & why these information’s are required which are as below:-

• Organization name – to identify which part is being used in PHP 1, 2, & 3.

• Creation date - to check when the part number has been created.

• Part number – to identify the duplicity of the part numbers.

• Purchase category – to find out in which particular category it lies i.e. in consumable, spares,
or tool.

• Purchase sub-category – to identify the type of part

i.e. gauges, machine, maintenance etc.

• Part description – to find out the duplicity of the part numbers by studying the descriptions.

• Status – to check whether the particular part number is (active, inactive & non- purchase),
as I have to only work on the active part numbers to identify the duplicity.

18
Fig – Dump data collected from ITR tool

Total

5807

21258

CONSUMABLE
SPARE
TOOLS

37934

19
 Fig - Pie chart of the total data received
Total 65000 data or part number received from the dump in sheet 1, same in sheet 2 and
sheet 3.

• The data which is being received in excel is in arbitrary manner. For example, if we find a
duplicate part number in row one then another will be in row 23000.

• Hence I have to arrange the part descriptions in a way that if there is any duplicate part
description with different part numbers then it should lie in the next row so that we can
manually search the duplicate parts with less time consuming and less error.

• As noticed that in all the part descriptions there are unique numbers, so I have run a
command in excel so that all the numbers from the part description gets aligned in the
ascending manner.

• Below steps will show how the sorting and arranging of the part descriptions are being
done.

OPEN THE DATA

CONTAINED EXCEL SHEET

20
 ALT + F8

MACRO NAME

PUT ANY NAME INSIDE

THE MACRO NAME BOX

CLICK ON CREATE

CREATE THE FUNCTION

A
21
Function onlyDigits(s As String) As String

' Variables needed (remember to use "option explicit"). '

Dim retval As String ' This is the return string. '

Dim i As Integer ' Counter for character position. '

' Initialise return string to empty '

retval = ""

' For every character in input string, copy digits to '

' return string. '

For i = 1 To Len(s)

If Mid(s, i, 1)>= "0" And Mid(s, i, 1) <= "9" Then

retval = retval + Mid(s, i, 1)

End If

Next

' Then return the return string. '

onlyDigits = retval

End Function

CLOSE AND EXIT FROM

FILE TAB

=onlydigits(select the 22
row)
• As per the flowchart first we have to open the excel file containing the dump or data with
the part description and all the other details.

• After opening the excel sheet we have to press alt+f8 which will a small box which is called
macro.

• There it will ask to enter a macro name so any name can be selected and then click on
create.

• Then it will open a blank page where we have to put the string.

• The string which we have to put is:-

Function onlyDigits(s As String) As String

' Variables needed (remember to use "option explicit"). '
Dim retval As String ' This is the return string. '
Dim i As Integer ' Counter for character position. '

' Initialise return string to empty ' retval = ""

' For every character in input string, copy digits to '

' return string. '
For i = 1 To Len(s)
If Mid(s, i, 1) >= "0" And Mid(s, i, 1) <= "9" Then
retval = retval + Mid(s, i, 1)
End If
Next

' Then return the return string. '

onlyDigits = retval
End Function

• After entering this string we have go to the file tab which is on the top left corner
and the select close and exit.

• Then we have to put formula in the main data file which is =onlydigits and select
the row (=onlydigits(f1))

23
• Select the data tab at the top and select the sort tab and then select part
description.

• This above steps will arrange the part descriptions in ascending order hence if there
is any duplicate part description it will be next row.

• Then we have remove the same part numbers with same part description by
selecting remove duplicate from the data tab and selecting only the part numbers
as I have to identify and remove only the duplicate part number with the same
part descriptions.

• Finally we have to put filter and select only the active parts so that the parts which
have been already deactivated or a non purchase item it will removed as I have to
only work in active parts.

24
Fig – Putting string function in macros

25
Fig – Sorting of part description after putting string

Fig – Removing duplicate part numbers

26
Fig – Removing the inactive and non purchase parts

After sorting out the duplicate part numbers with same

description total data remaining 54029 out of [Link]
pie chart will show the difference after shorting done.

CONSUMABLE,
5746

TOOLS, 10532

SPARE, 37751

27
 Fig - Pie chart will show the difference after shorting parts The remaining 58386 parts will be
of only one plant, i.e. of PHP 1 from where we have to manually remove the duplicate parts. The
above methods we have to use in the other 2 sheets of PHP 2 & 3.

Fig – Duplicate part description with different part numbers

• Below Pie chart will show the duplicate parts from total data of PHP 1

Total 58386
Duplicate 205
Unique 58181

28
 Duplicate
Unique

Below Pie chart will show the duplicate parts from total data
of PHP 2
Total 44961
Duplicate 125
Unique 44836

Duplicate
Unique

29
• Below Pie chart will show the duplicate parts from total data of PHP 2

Total 54030
Duplicate 117
Unique 53913

Duplicate
Unique

Below pie chart will show only the duplicate parts from PHP
1,2 & 3

Total
CONSUMABLE
18 %

TOOLS
25 %

SPARE
57 %

30
 Fig – Duplicate parts in PHP 1

Total
CONSUMABLE
19 %

TOOLS
23 %

SPARE
58 %

Fig – Duplicate parts in PHP 2

Total
TOOLS
11 %
CONSUMABLE
33 %

SPARE
56 %

Fig – Duplicate parts in PHP 3

After Identifying and segregating the duplicate parts from

PHP 1, 2 & 3 called a meeting with all the buyers from PHP 1 to discuss and deactivate the
duplicate parts from the system.

31
4.4. Recommendation By Creating Nomenclature of Part Description:-

While Identifying and removing the duplicate part numbers from the system its being noticed that
the duplicity of the part description majorly occurs because the correct format or nomenclature
is not being followed while creating the part description.

An Example of Duplicate part description:-

1. [Link] CHAIN
[Link].250 [Link] PATH.5M

2. [Link]. DEMAG CHAIN HOIST. SWL 250 KG HOOK. PATH 5M.

As we can see in the above example that both the part descriptions are same except the letters
CHAINS and MISC, due to these two letters this duplicate part is being mistakenly created.

Hence took Voice of Buyers from PHP 1 & 2 and discussed about how to remove this type of error
in future because these duplicate part are being created because there is no proper format or
nomenclature being followed while creating the part description. Post discussion we all moved
into the conclusion that a proper nomenclature should be created to remove part duplicity.

The following question being asked by me and discussed from the buyers of PHP 1 & 2 before
creating nomenclature are as below:-

1) Is there any fault in part description?

For Tool For spares For consumable

Item type Item category Item name

Item category Item type Part description

Item name Item sub-category Company make

Hence I have to define a Nomenclature of Part description so that this type of error can be avoided
which will result in creating part descriptions without any duplicity.

As there are three different parts in Business unit which are Consumable, Spares and Tool so I have
to define three different nomenclatures because in different Business unit’s different types of parts
are being used.

32
In order to define nomenclature firstly I have to study all the unique part descriptions from
Tool, Spares and Consumable in order to understand what are the important inputs required
for a part description.

After studying all the part description of Tooling items, it is being concluded that there should be a
sequence which need to be follow which part creation process.

For Tooling the below mentioned process needs to be followed for part creation process:-
Item category
A

Item name
Or
Drawing number

Item specification

Supplier code
Or
Company code
(If available
)

Company Make/Name (if

available)

Where the required

part will be used in the
organization

33
For Example :- [Link] [Link].H/F -S/F MILLING
[Link]

For Consumable the below mentioned process needs to be

followed for part creation process:-

Consumable
category

Item name

Item specification
(If applicable)

Part description

34
 Company make/Name
(If available)

Where the required

part will be used in the
organization

For Example: -
[Link] [Link]

[Link] FILTER SET FGPIN0PREFILSET1 FOR

GODREJ CONTROL .

For Spares the below mentioned process needs to be

followed for part creation process:-

Item category

Item type (Electrical,

Mechanical, Electronic)

35
A
 Item Sub- Category
(Bearing, Bolts, Cylinders,
Etc.)

Item Specifications

Company Make/Name
(If available)

Where the required

Part will be used in the
organization

For Example: - [Link] HEX BOLT 1/2"X 2" WITH WASHER S.S-UTILITY.

The above process describes the nomenclature of the part description for Consumable, Spares &
Tool.

36
 4.5. Min-Max quantity for c-class category items

The Min – Max quantity of c class items will define the minimum and maximum quantity of items
that can be stored. The Min–Max is one of the automated Inventory replenishment methods to
be used in an organization dedicated to Inventory management. The primary benefit of this
method is its extreme simplicity of implementation.

This method tracks the current total stock level, which is typically the sum of the stock – on – hand
plus the stock – on – order for every single stock keeping unit. When the total stock reaches the
Economic order quantity, reorder is triggered. The reorder quantity targets the Maximum value for
new total stock level, hence the reorder quantity is the difference between Max and Min (i.e. Max
minus Min).Since we are planning the Inventory level of machinery spares and consumption
pattern is not fixed, hence reordering or ROL is calculated as below:-

ROL / Ordering point = (Max - Min) + Yearly consumption / 12.

The “Min” value represents a stock level that triggers when the total stock reaches the Economic
order quantity, reorder is triggered and the “Max” value represents a new targeted stock level
following the reorder. The difference between the Max and the Min is frequently interpreted as
the EOQ (Economic Order Quantity).

Under this topic I have to find the Min-Max of the C- class category items as it is very
important to identify the stock and reordering level from time to time to avoid any stock
out or excessive of stock which will affect the inventory. As I will be defining the Min – Max
and ROL of the items it will help in optimising the inventory level.
The below steps will show the process of finding the Min – Max and ROL:-

• At the beginning I have collected all the data required of 2013-14.

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• For collecting the data we have put a request through ITR tool mentioning the requirements
& why these information’s are required which are as below:-

• Part numbers:- To find out which parts are being used and in which departments.

• Description:- To find out what type of items are being used.

• Issue Date:- To find out when the part or item is being issued.

• Segment:- To check in which particular department this part or item is being used.

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Unit cost:- To know the cost of the product so that cost
efficiency can be checked accordingly.

Quantity:- To find out how many quantity of that part or

items is being issued in that particular duration. It will help
to show the usage status as how frequently this part is being
used and where the consumption is very high.

Fig – Total Raw data received

• As the Raw data collected was in the arbitrary manner hence I have to arrange the
data in an order so that it shows which Department it has used what type of parts
and how many times in that duration.

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 Fig– Data after arranging

 After the department’s column’s it will show the yearly consumptions of the parts or items.

 Then User BU (i.e. how many times that particular part or item is being used in that
particular department). To find this out the formulae which I have used according to the
excel data sheet is:- (=COUNT(C2:CP2))

 Then I have to find out the unit price of the item to know the cost of the product. In order
to find this out I have used the formulae according to the excel data sheet which is
(=VLOOKUP(A2,'<default '!A2:E21409,5,0))

 In order to find out Min I have to first assume the Minimum percentage below which the
stock should not be less. Hence I have assumed it to be 30%.

 The next column will be for Min quantity for the item for which I have used the formulae
which is (=CEILING(CQ2*0.3,5)) according to the excel data sheet and 30% min of yearly
consumption.

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 In order to find out Max I have to first assume the Maximum percentage of stock level.
Hence I have assumed it to be 70%.

 The next column will be for Max quantity for the item for which I have used the formulae
which is (=CEILING(CQ2*0.7,10)) according to the excel data sheet and 70% min of yearly
consumption.

Finally in order to calculate ROL (i.e. Reorder level)

the formulae need to be used is (max -min)+yearly
consumption/number of months in a year. Which
according to the excel data sheet is ( =CEILING((CU2-
CT2)+CQ2/12,10).

Fig – MIN-MAX AND ROL

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 5. CONCLUSION:-

The project on “Inventory optimization by bifurcating the unique parts and creating the
nomenclature of the part creation process and Defining Min-Max category items at PHP” has
helped me to gain the insight about the complete process of Indirect purchase department in
PHP.

During this project, I identified the loopholes due to which the duplicate parts are being created
which affect the optimum level of stock Inventory and suggested recommendations by creating
the nomenclature of the part description to avoid this type of error in future. Along with this I
have also defined the Min-Max quantity and Reorder level (ROL) of the C class item which will
help in Inventory Optimization.

From this research I acquired a good amount of knowledge and experience about Microsoft Excel
for analyzing the data and also learned to calculate the Min-Max & ROL which will in optimizing
the Inventory level.

Finally Tata Cummins Pvt. Ltd. (Phaltan) helped me a lot to learn practical knowledge about the
operations and the process of Inventory optimization.

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 6. BIBLOGRAPHY-

1) [Link]
l

2) [Link]
d-
e
[Link]

3) [Link]
[Link]

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