Summer Internship Project on

“Study of Inventory Management System at Emerson”

Submitted in partial fulfilment for the award of

MASTER OF MANAGEMENT STUDIES

Approved by

University of Mumbai

Submitted by

PRANALI TANU KUKUDKAR

Roll No. A25

Specialization – Operations Management

Under the guidance of

Prof. Ganesh Apte

2024 - 2025

Submitted To

ATHARVA INSTITUTE OF MANAGEMENT STUDIES

Approved by AICTE, DTE Recognized, Affiliated to Mumbai University

(Malad Marve Rd, Malad, Charkop Naka, Asmita Jyoti Housing Society, Malad West,
Mumbai, Maharashtra 400095)

CERTIFICATE
1
This is to certify that project titled Study of Inventory Management System at Emerson

is successfully completed by Ms. Pranali Tanu Kukudkar during the II Semester, in partial
fulfillment of Master of Management Studies

approved by University of Mumbai for the academic year 2023-2025.

(Signature of the Director) (Signature of the Guide)

Place : Mumbai
Date :

CERTIFICATE FROM THE COMPANY

2
DECLARATION

3
I, hereby declare that this Project Report titled Study of Inventory Management System at
Emerson
Submitted by me to Atharva Institute of Management Studies
Is a bonafide work undertaken by me and it is not submitted to any other University or
Institution for the award of any degree diploma / Certificate or published any time before.

Name:- Pranali Kukudkar

Roll No:- A-25 (Signature of the student)

ACKNOWLEDGEMENT

At the beginning of this report, I would like to express my heartfelt gratitude to all those who
have supported me throughout this project. Their guidance, assistance, and encouragement
have been invaluable to my progress.

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I am particularly thankful to my Director, Dr. D. Henry, and my mentor, Prof. Ganesh Apte,
for their unwavering support and insightful guidance, which were crucial to the completion of
this assignment. I also wish to acknowledge the Atharva Institute of Management Studies for
providing me with this opportunity and for their continued support throughout the process.

5
CHAPTER 1: INTRODUCTION

1.1 INDUSTRY OVERVIEW

The process automation industry plays a pivotal role in various sectors, including oil and gas,
chemical, pharmaceutical, energy, and manufacturing. This industry focuses on optimizing
and automating processes to enhance operational efficiency, reduce costs, and ensure safety.
Key trends driving growth in this sector include:

Digital Transformation: Companies are adopting technologies like IoT, AI, and big data to
enhance real time monitoring and process optimization.

Energy Efficiency: With the rising emphasis on sustainable operations, industries are focusing
on energy-efficient process management.

Safety & Compliance: Stringent safety regulations require companies to implement automated
solutions that ensure compliance with international standards.

1.2 COMPANY DETAILS

Emerson Process Management, led by CEO Lal Karsanbhai and incorporated in 1890, is a
global leader in providing advanced automation solutions across various industries. The
company's Powai branch, located in Mumbai, serves as a crucial operational hub in India,
offering a comprehensive range of services and technologies designed to optimize industrial
processes.

Emerson India is known for its expertise in automation, particularly through products like the
DeltaV Distributed Control System (DCS). This system is instrumental in enhancing process
control, minimizing operational risks, and boosting productivity across industries. The branch
plays a key role in helping industries achieve energy efficiency, improve operational safety,
and streamline their workflows.

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Incorporated in the U.S., Emerson Electric co has expanded its footprint globally, as Emerson
Process Management India playing a significant role in the company's growth. The India unit,
through its headquarter in Powai, has become a trusted partner for industries looking to
improve their processes through cutting-edge automation technologies.

In addition to Powai, Emerson operates factories in Koper Khairane and Rabale, further
strengthening its presence in India and supporting its manufacturing capabilities. These
facilities enable the company to meet local and regional demands efficiently.

1.3 BASIC THEORETICAL CONCEPTS AND CONTEXT OF THE

TOPIC:

MEANING AND DEFINITION:

The process of acquiring and managing the goods and resources essential for a business’s
operations is known as purchasing and inventory management. This involves ensuring
product availability while minimizing costs and optimizing efficiency through activities such
as purchasing, receiving, storing, tracking, and controlling inventory levels.

The terms "inventory management" is defined as follows:

Inventory Management: Inventory management encompasses the planning, controlling, and

supervision of a company's stock. It involves various tasks such as tracking inventory levels,
forecasting demand, setting reorder points, managing stock levels, and monitoring inventory
turnover. The primary objective of inventory management is to ensure that the right quantity
of goods is available when needed while minimizing carrying costs, avoiding stockouts, and
maximizing turnover rates. Effective inventory management can lead to reduced excess stock,
improved cash flow, and enhanced customer satisfaction.

In the context of inventory management, financial managers play a crucial role within
corporate organizations. They are responsible for overseeing the financial aspects of various
types of businesses—whether for-profit or nonprofit, financial or non-financial, and across
different sizes and sectors. Their responsibilities include budgeting, financial forecasting, cash
management, credit administration, investment analysis, and, importantly, inventory
management.
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The term "inventory" refers to the complete list of goods a business offers for sale, along with
the raw materials and components used to produce those goods. Essentially, inventory
consists of items that are expected to be sold in the normal course of business operations. The
assets that companies maintain as inventory include:

 Raw materials
 Work in process
 Finished goods

Raw materials consist of items purchased from suppliers that are then transformed into
finished products. These materials play a crucial role in the overall production process. Work
in process inventory includes items currently undergoing production, typically representing
semi-finished goods at various stages of development. Finished goods inventory comprises
completed products that are ready for sale but have not yet been sold.

Unlike other current assets, inventory management involves not just financial managers but
also various functional departments, including purchasing, production, marketing, and
finance. The financial manager's role often involves reconciling differing perspectives from
these departments to align with the overarching goal of maximizing shareholder wealth.
Therefore, effective inventory management should be integrated with the company's overall
objectives, similar to the management of other current assets.
This chapter focuses on the essential elements of inventory management from a financial
management viewpoint. It outlines the objectives of inventory management, explores
techniques for effective management, and highlights fundamental concepts related to
inventory control.
In practice, production management incorporates inventory management strategies. For
financial managers, understanding these strategies is essential for effective planning and
budgeting for inventory needs.

1.3.1 INVENTORY MANAGEMENT INVOLVES:

i. Inventory management serves as a dynamic control system that helps oversee sales,
purchases, and payments.

ii. It includes systems and processes for assessing inventory requirements, setting targets,
providing replenishment strategies, and reporting both current and expected inventory levels.

8
iii. Effective inventory management enhances awareness of inventory status and helps
manage financial expenditures.

iv. By streamlining operations, inventory management reduces operating costs and fosters
better understanding.

1.3.2 MEANING OF INVENTORY

Inventory refers to the collection of products and materials that a business currently holds, as
well as the items themselves. It can also pertain to the cataloging of household items or the
belongings of a deceased individual for estate purposes. In accounting, inventory is classified
as an asset.

1.3.3 CLASSIFICATION OF INVENTORIES

Types of Inventory-

Depending on the nature of the business, inventory can play a crucial role and is typically
classified into three main categories:

i) Raw Materials: These are the essential components and materials that are utilized in the
production of finished products. Raw materials are the basic inputs needed for manufacturing
and are purchased and stored for future use in the production process.

ii) Work in Progress (WIP): This category includes raw materials and components that have
begun the transformation into final products but are not yet complete. WIP items are those
that have incurred labor costs and are currently on the production floor, representing the value
added to the materials as they move toward completion.

iii) Finished Goods: These are fully completed products that are ready for sale. Finished
goods have passed final quality inspections and are now categorized as inventory. At this
stage, they can be sold to retailers, wholesalers, or distribution centers, or held until a
customer order is received. They may also be sold directly to end users.

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1.3.4 BASIC REASONS TO KEEPING AN INVENTORY

Reasons for Maintaining Inventory-

There are three primary reasons for keeping inventory:

Time: Maintaining a certain level of inventory is essential to cover "lead time" delays that
occur throughout the supply chain, from suppliers to end users. This ensures that there is
always stock available when needed.

Uncertainty: Inventory acts as a buffer against fluctuations in demand, supply disruptions, and
variations in the movement of goods. This safety net helps to mitigate risks associated with
unpredictability in the market.

Economies of Scale: The ideal scenario of delivering "one unit at a time, exactly when
needed" can lead to increased logistics costs. By storing and moving inventory in bulk,
businesses can reduce these costs and achieve greater efficiency.

Functions of Inventory Management-

Inventory management encompasses several key functions:

It serves as a dynamic control system that streamlines the management of sales, purchases,
and payments.

It includes the development of systems and processes to assess inventory needs, set
objectives, implement replenishment strategies, and report both current and projected
inventory levels.

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Effective inventory management enhances awareness of inventory status, aiding in the
management of financial expenditures.

By optimizing operations, inventory management helps reduce operating costs and fosters a
clearer understanding of inventory dynamics.

1.3.5 ESSENTIALS OF INVENTORY CONTROL

Key Requirements for Inventory Control

To effectively manage inventory, several key requirements must be met:

1. A robust inventory control system is essential for efficient inventory management.

2. Proper coding, material standardization, and ease of use are critical for smooth operations.

3. An effective internal control system must be in place to ensure that all transactions
involving materials and equipment are reviewed by authorized and impartial personnel.

4. The implementation of a perpetual inventory system is necessary, allowing for real-time

tracking of the quantity and value of materials in stock.

5. An appropriate method of material valuation is vital, as it impacts job costing and the
valuation of closing stock.

Essential Departments and Their Functions

Each department plays a crucial role and relies on one another for effective inventory
management:

1. Receiving and Inspection Department

i. Responsible for receiving all raw materials and supplies from various sources,
verifying quantities by count or weight, and reporting any discrepancies.
ii. Analyzes the quality of materials and supplies received.

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iii. Communicates necessary adjustments to the purchasing and accounting departments
regarding vendor issues.
iv. Codes materials according to their type for easy identification.

2. Stores Keeping Department

i. Checks and accepts all materials from the receiving department.

ii. Identifies and catalogs materials using a stock list and assigns them a code number for
organization.
iii. Supplies materials based on formal requests.
iv. Maintains accurate records of quantities received and dispensed using stock ledger
cards or bin cards that reflect perpetual inventory.

3. Production Department

i. Creates material requirement notes to request the necessary quantity and quality of
resources at the right time to avoid production delays.
ii. Ensures that received materials meet the required specifications and are properly
charged to production.
iii. Keeps detailed records of materials received and their usage in various production
processes.
iv. Issues materials return notes for surplus supplies.
v. Prepares materials transfer notices for any material movements.

4. Inventory Control Department

i. While often part of the stores keeping department, it may also function within the cost
accounting department.
ii. Maintains continuous inventory records.
iii. Adjusts stock levels based on authorized adjustment notes.

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 iv. Prepares statements detailing receipts, issues, balances, and average consumption of
materials, including both quantity and cost, on a weekly or monthly basis.

Reasons for Holding Inventory

1. Transaction Motive: This relates to the need to maintain inventory to ensure efficient
production and sales processes.

2. Precautionary Motive: Holding inventory as a safeguard allows businesses to be protected

against fluctuations in actual activity levels compared to forecasts. This stock is particularly
useful when supply and demand shift unexpectedly.

3. Speculative Motive: This motivation involves adjusting inventory levels in anticipation of

price changes, allowing businesses to capitalize on potential market shifts.

1.3.7 BACKGROUND OF THE STUDY

Inventory management systems research focuses on how firms regulate and optimize their
inventory in order to improve operational efficiency and meet consumer expectations. In a
company environment where customer satisfaction and cost control are critical, inventory
management has grown from a simple stockkeeping function to a complicated, technology
driven process. Effective inventory management ensures that businesses have the proper
amount of merchandise available at the right time, reducing the risk of overstocking or
stockouts. This balance is critical for keeping operations running smoothly and avoiding
excessive costs, such as storage fees or missed revenues owing to unmet orders.

In today's fast paced and competitive corporate world, inventory management is more crucial
than ever. Businesses must respond quickly to shifts in demand, supply chain disruptions, and
market trends. Inventory management has been completely transformed by the use of cutting-
edge technologies such as data analytics tools, automated storage and retrieval systems, and
enterprise resource planning (ERP) systems. These technologies improve demand forecasting
accuracy, streamline the supply chain, and give Realtime visibility into inventory levels.

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In addition, inventory control is essential to raising customer satisfaction. The emergence of
global supply chains and ecommerce has led to clients expecting prompt and precise product
delivery. Businesses can fulfil these expectations by using effective inventory management to
make sure that the correct products are in stock and available at the right times, ready to ship
as soon as an order is placed. This skill offers companies a competitive edge in addition to
increasing client loyalty.

In conclusion, learning about inventory management systems is crucial to comprehending

how strategic inventory control and optimization help contemporary companies retain
operational effectiveness, cut expenses, and improve customer happiness.

1.3.8 NEED FOR THE STUDY

Inventories represent a significant portion of the total cost and are the cash equivalent. It is

crucial that inventory is properly protected and accurately accounted for. An organization's

efficiency can be significantly improved by having effective inventory control. A company's

success is heavily reliant on effective purchase, storage, consumption, and accounting. I

choose

Scientific Controls Pvt Ltd because inventory is important in the study of bulk inventory
management. Having a good inventory management system in place is crucial for small
companies as well as large companies. Keeping track of all your materials and figuring out
the actual costs can be helpful.

Additionally, it can assist in managing abrupt variations in demand without compromising

customer satisfaction or product quality. Inventory management helps businesses decide

which

merchandise to order when and in what quantities. Inventory is tracked from product

acquisition to sale. To guarantee there is always adequate inventory to complete customer

orders and proper notification of a shortage, the practice recognizes trends and reacts to them.

Keeping track of purchases and inventories enables businesses to more effectively deploy

14
resources and control cash flow. It makes sure you have the proper number of items in stock

while preventing you from wasting money and labor. Modern small and medium-sized

enterprises have transformed into competitive rivals to the larger big-box merchants and chain

stores through the use of technology, having gone a long way since the establishment of

conventional mom-and-pop establishments. Businesses must recognize the value of inventory

management given the rise in e-Commerce and omnichannel sales, as well as the increased

number of SKUs and inventory rotations to manage.

Sales, purchasing, and other business areas are impacted by inventory management, and

inventory management is reliant on the efficient operation of these and other business areas,

hence inventory management is crucial to the health of a company. Every single one of these

"pieces" of business is connected to the others. The significance of purchase and inventory

management rests in its capacity to reduce risk, enable data-driven decision-making, enable

forecasting and planning, enhance customer satisfaction, optimise cash flow, streamline the

supply chain, and create a competitive edge. Businesses can improve their overall operational

performance and achieve long-term success by concentrating on the effective management of

purchases and inventory.

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 CHAPTER 2: LITERATURE REVIEW

R et al. (2024): A software application or hardware tool called an inventory management

system (IMS) assists businesses in efficiently managing and tracking their inventory. It
provides a means of addressing (managing) tasks associated with items, including placing
orders, obtaining products, keeping track of products, and selling things.

Flores-Alhaddad and Cabudol (2024): Provide a comparison of manual and barcode

inventory management techniques in retail settings. Taking into account the viewpoints of
staff members with inventory management experience, the main goal is to extract knowledge
that can improve the way that inventory operations are now done. As part of the study’s
methodology, survey questions were painstakingly created and validated by consulting
relevant literature.

Karmarkar et al. (2024): A quality control system for consumer goods transactions requires
an inventory management system for firms handling such transactions. Inadequate inventory
management might result in a large retail establishment running out of a vital commodity.

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Silaen et al. (2024): One of the most popular methods for managing inventory is ABC
analysis, which separates stock into three groups (A, B, and C) according to the Pareto
principle or the total yearly product utilization.

Marklund and Berling (2024): The general challenge of how to effectively manage
inventories and material flows in supply chains while taking into account the environmental
and economic ramifications—which are typically expressed in terms of costs and emissions—
is the focus of green inventory management.

Kakade (2024): This paper outlines the main obstacles, approaches, and best practices related
to pharmaceutical inventory management by an extensive investigation of the body of existing
literature and real-world case studies.

Mohamed (2024): Effective inventory management is essential to the success and

profitability of businesses. Managing inventory levels well improves financial plans and
operational effectiveness. Negligent administration may lead to monetary deficits, inventory
discrepancies, postponed order fulfillment, and disgruntled clientele.

Naidu (2024): Inventory control is essential to supply chain management and plays a major
role in order management. This paper examines the various inventory management strategies
used by various types of organizations, drawing on current literature.

Sasikanth and Krithika (2024): With its advanced solution, the Restaurant Inventory
Management System (RIMS) was created specifically to meet the demands of the food service
business. With RIMS’s real-time inventory tracking features, restaurant employees can
precisely track stock levels, guaranteeing prompt replacement and reducing stockouts.

Pawar et al. (2024): The article addresses the difficulties general store owners encounter
when trying to manage inventory efficiently and suggests a solution-focused strategy to
streamline inventory management procedures.

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 CHAPTER 3: RESEARCH OBJECTIVE AND
METHODOLOGY

3.1 OBJECTIVE OF THE PROJECT:

 Evaluate the current inventory management practices at organization.

 Identify specific challenges, including limited storage space, customer differ to take
the delivery, and the use of ERP JDE.
 Propose actionable recommendations for system enhancement.
 Examine the impact of these challenges on overall efficiency.
 Assess the effectiveness of current supplier management strategies.
 Determine the benefits of adopting new technologies such as oracle in inventory
management.

3.2 METHODOLOGY

Data Collection Methods

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Source and Method of Data Collection To examine Inventory management with ERP JDE, a
descriptive and analytical research design was used. This type of design sets up the
circumstances for data collection and analysis in a way that tries to combine relevance to the
research objective with an economy in the method

Primary data

Personal Interview: Interviews with key stakeholders at the Organization, including

Operations Manager CA Pradosh, Operations Executive Sudhir Ranjan, and Store in Charge
Sujan Sammader.

•Observation method: By observing current inventory management practices at Emerson.

Secondary data

By books, papers, Journals and websites.

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 CHAPTER 4: SIP WORK

4.1 Name, Address, and Location of the Company:

Name: Emerson Process Management Pvt. Ltd.

Address: 601603 Delphi B wing, 6th Floor, Orchard Ave, Hiranandani Gardens, Powai, near
Panchkutir Marg, Mumbai, Maharashtra 400076

Email: [email protected]

4.2 Vision and Mission of the Organization:

VISION - To become the global leader in delivering innovative solutions and technologies
that empower customers to optimize their operations, boost productivity, and achieve their
business objectives.

Mission - To provide exceptional value to our customers through cutting-edge technology,

outstanding service, and dedicated support, while cultivating a culture of continuous
improvement and operational excellence.

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4.3 Historical Background of the Organization:

Emerson Electric Co., founded in 1890 by John Wesley Emerson in St. Louis, Missouri,
began as a manufacturer of electric motors and fans. Over the early 20th century, the company
expanded its product offerings and diversified into electrical equipment and appliances
through strategic acquisitions. After World War II, Emerson continued its growth by entering
new markets, including automotive and industrial sectors, and placing a greater emphasis on
automation and process control technologies. The establishment of Emerson Process
Management in 1990 marked a significant shift towards specializing in these areas. In recent
decades, Emerson has solidified its position as a global leader in automation and process
control, embracing digital transformation and industrial IoT. Today, Emerson Electric Co.
operates in over 150 countries and is renowned for its innovative solutions and commitment
to sustainability, continually advancing to meet the needs of a dynamic and evolving market.

Emerson Electric Co. established its presence in India in the early 1990s, marking the
beginning of a significant expansion into the Indian market. The company set up Emerson
Process Management India Pvt Ltd to cater to the growing demand for advanced automation
and process control solutions in the country Company has factories in Rabale and Kopar
Khairne. This move was part of Emerson’s broader strategy to leverage emerging markets and
provide cutting

edge technology solutions to various industries, including oil and gas, chemicals, power
generation, and water treatment.

Since its inception, Emerson Process Management India has played a crucial role in
implementing and supporting sophisticated process control systems across diverse sectors.
The company has focused on delivering tailored solutions that address the specific needs of
Indian industries, enhancing operational efficiency and productivity.

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4.4 Different product profile of the organization

DCMlink Software ControlInc Network Control

Actuator Controller & Software Products (Fig. 1)

Bettis SCE300 Bettis SCE300 Electric Actuator

Electric

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 Bettis RTS Series Bettis XTE3000 Electric Actuator

Electric Actuators (Fig.2)

ATIS Series ATIS Series

Gear Operators & Gearbox (Fig. 3)

Bettis PressureGuard Hydraulic Shafer™ Emissions Controlled

Wellhead Protection System Actuation Technology (ECAT)

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Bettis EHO ElectroHydraulic Operator

(Standard) Shafer RVSeries Rotary Vane
Actuator
 Bettis RPXSeries Rack and Pinion
Pneumatic Valve Actuator Keystone Figure F89

Pneumatic Actuator (Fig. 5)

AVENTICS™ PRA Pneumatic Cylinders AVENTICS™ Series A

Pneumatic Cylinder (Fig. 6)

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Delta V DCS Ovation DCS

Software (fig 7)

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4.5 Different departments of the organization

Emerson Process Management India has many departments I am mentioning the departments
which are managing a few important departments as follows.

Production
Department

Sales Purchase
Department Department

Departments

Store Logistic
Department Department

Account
Department

Fig. 8

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4.6 Process Flow Chart

Fig. 9

27
4.7 Organizational Chart of the Company

Fig. 10

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4.8 Certificate Of the Company

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4.6 MY LEARNINGS

Job Role – Project Management Trainee

Responsibilities – Identifying Challenges in Inventory Management and Proposing Solutions

My journey with the organization began as a Project Management Trainee, during which I
underwent an intensive 7day training program on DeltaV Distributed Control System (DCS),
one of Emerson’s key products. The initial plan was to have me work on a DeltaV-related
project. However, my deep interest in inventory and supply chain management led me to
request a shift in focus. Understanding my enthusiasm, the company gave me the opportunity
to identify challenges within their inventory management and suggest solutions to overcome
these issues. This role allowed me to channel my skills and passion toward enhancing the
efficiency of Emerson’s inventory operations.

My Learnings from DeltaV Training:

1. Advanced Process Automation Understanding: The training provided me with a strong

grasp of process automation and control systems. I saw firsthand how these systems
streamline complex operations, minimize human error, and optimize efficiency in industries
like oil and gas.

2. Integration of Systems for Efficiency: I learned about how DeltaV integrates multiple
functions—process control, safety, and data management—into one platform. This integration
enables Realtime decision making, ensuring that industrial processes operate smoothly and
safely.

3. Handson Skills in Configuration and Troubleshooting: Through practical exercises, I gained

experience configuring the DeltaV system, monitoring performance, and troubleshooting
issues, which are crucial to maintaining efficient, continuous operations.

4. Operational Efficiency through Automation: The training highlighted how automation, like
DeltaV, plays a critical role in enhancing operational efficiency. By ensuring optimal control
over complex processes, it reduces downtime and boosts productivity.
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5. Industrial Automation Knowledge: My understanding of industrial automation expanded
considerably, especially regarding the role that advanced systems like DeltaV play in ensuring
precision, reliability, and seamless operation in largescale industries.

Learnings from Inventory Management System:

Through interviews with department heads, I gained the following insights:

1. Supplier Management’s Crucial Role: I learned the importance of effectively managing

supplier relationships. Good supplier management ensures on time deliveries and prevents
overstocking, which helps control costs and maintain balanced inventory levels.

2. Optimizing Storage Space: Efficient use of storage space is vital. I discovered that
implementing strategies to maximize available space not only organizes inventory better but
also makes retrieval quicker and easier.

3. Accurate Demand Forecasting: Forecasting demand accurately is essential to avoid

stockouts and ensure that needed inventory is always available. This helps keep operations
running smoothly without interruptions.

4. Maintaining Precise Inventory Records: Accurate recordkeeping is fundamental to

successful inventory management. It ensures that stock levels are reported and managed
without errors or discrepancies.

5. The Impact of Modern Systems: I realized the significant benefits of upgrading to advanced
inventory management systems. These modern systems can greatly improve tracking,
forecasting, and overall efficiency in managing inventory operations.

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 CHAPTER 5: DATA ANALYSIS

5.1 Data Collection Methods

Source and Method of Data Collection

To investigate inventory management using ERP JDE, a descriptive and analytical research design was
employed. This approach establishes the conditions for effective data collection and analysis, aiming
to align closely with the research objectives while maintaining methodological efficiency.

Primary data

 Personal Interview: Interviews with key stakeholders at the Organization, including

Operations Manager CA Pradosh, Operations Executive Sudhir Ranjan, and Store in
Charge Sujan Sammader.
 Observation method: By observing current inventory management practices at
Emerson.

Secondary data

 By books, papers, Journals and websites.

5.2 Tools and Equipment Used

• ERP JDE for generating GRNs.

• Stock statement and inventory reports.

Emerson Process Management (India) Private Limited is an unlisted private company that
was incorporated on March 25, 1981. Based in Mumbai, Maharashtra, it is classified as a

32
private limited company. The company has an authorized share capital of INR 110 crore and a
total paid-up capital of INR 14.34 crore.

For the financial year ending March 31, 2023, Emerson Process Management (India) reported
operating revenues exceeding INR 500 crore. Its EBITDA saw a significant increase of
500.72% compared to the previous year. However, the company’s book net worth experienced
a decline of 1.50%.

Following is the financial Report of Emerson Process Management of year 2023.

5.3 Data Analysis of Inventory Management Challenges Using Interviews

and Observations

To effectively address the challenges in inventory management, I conducted a comprehensive

data analysis based on interviews with key stakeholders and direct observation of current

33
practices. This analysis aimed to identify inefficiencies, measure their impact, and propose
practical solutions to enhance operations.

1. Restricted Storage Space

Interviews revealed that a recurring problem is the lack of sufficient storage, particularly for
project-based inventory. The allocated storage areas and racks are often not enough, leading to
delays in handling and retrieving materials.

Observational Data Collection:

Method: I directly observed warehouse operations, focusing on stock movement and how
space was being utilized.

Metrics Captured:

1. Warehouse space utilization percentage

2. Average retrieval time for materials
3. Incidents of misplaced or delayed items due to limited space

Data Analysis:

1. Space Utilization: The warehouse was operating at 95% capacity, leaving little room
for efficient organization or movement.
2. Retrieval Delays: On average, it took 20% longer to retrieve materials from congested
areas compared to well organized ones.
3. Misplacement Incidents: Over two months, there were 10 instances where items were
misplaced due to inadequate space, delaying projects

Impact:

Operational Inefficiencies: Congested spaces directly contributed to delays in project

timelines.
34
Increased Costs: Labor costs increased as employees spent more time locating materials.
Recommendations:
Space Optimization: Implement flexible shelving systems to improve organization and reduce
retrieval times.
External Storage: Consider using external warehousing for slow moving or nonessential stock
to free up space.

2. Customer Order Delays

Interviews with operations managers and warehouse staff highlighted frequent delays in
customer order pickups after project completion. This extended the holding time for finished
goods, adding to carrying costs.

Observational Data Collection:

Method: I monitored the holding patterns for completed projects.

Metrics Captured:

1. Average holding time for finished goods

2. Increased carrying costs due to delayed pickups

Data Analysis:

1. Holding Time: The average holding time for customer orders was 45 days post
completion, far exceeding the expected 714 days.
2. Carrying Costs: Carrying costs rose by 15%, driven by additional storage needs and
the risk of product obsolescence.

35
Impact:

Storage Strain: Delayed pickups added to storage congestion, creating bottlenecks in

operations.

Increased Costs: Extended holding times raised carrying costs, hurting profitability.

Recommendations:

Proactive Communication: Establish better communication with customers, offering

incentives for early pickups.

Stock Holding Fee: Introduce a holding fee for delayed pickups to minimize financial losses.

3. Insufficient Labor

Warehouse supervisors pointed out a shortage of labor for managing inventory, which was
confirmed through my observations. Routine tasks like sorting, organizing, and processing
inventory were often delayed due to the lack of sufficient staff.

Observational Data Collection:

Method: I observed labor activities and productivity over a month.

Metrics Captured:

1. Time taken to complete inventory related tasks

2. Productivity rates (tasks completed per shift)

36
Data Analysis:

1. Task Delays: Tasks such as sorting and organizing took 30% longer due to staff
shortages.
2. Productivity Rates: Productivity was 15% below the target, causing backlogs in
inventory management.

Impact:

Operational Delays: Labor shortages further exacerbated storage and retrieval issues, creating
operational bottlenecks.

Increased Overtime Costs: To cover the labor shortfall, the company relied on overtime,
driving up costs.

Recommendations:

Labor Scheduling Optimization: Review labor schedules to allocate more resources during
peak periods.

Automation Investment: Invest in automation for repetitive tasks (e.g., barcode scanning) to
reduce the reliance on manual labor.

4. Elevated Stock Levels and Increased Carrying Costs

Operations staff reported that high stock levels were a result of both delayed customer
pickups and inefficiencies in the ERP system (JD Edwards). My observations confirmed that
stock levels were frequently above the planned threshold, contributing to higher carrying
costs.

Observational Data Collection:

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Method: I monitored stock turnover and carrying costs over two months.

Metrics Captured:

1. Stock turnover rate

2. Carrying costs per unit

Data Analysis:

1. Stock Turnover: The turnover rate was 1.8, below the target of 3, indicating excess
inventory.
2. Carrying Costs: Costs were 15% higher than expected, mainly due to increased storage
and the risk of product obsolescence.

Impact:

Financial Strain: Higher carrying costs reduced profitability.

Space Constraints: Excess stock added to storage congestion, compounding operational

inefficiencies.

Recommendations:

Regular Inventory Reviews: Conduct frequent reviews to identify and dispose of slow-
moving stock.

Dynamic Stock Planning: Use advanced planning tools to better align inventory with actual
demand.

5. ERP System Limitations (JD Edwards)

Interviews with the IT team and warehouse personnel identified the limitations of JD Edwards
(JDE) in generating Goods Receipt Notes (GRNs) and tracking project-based inventory.

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Observations further emphasized the rigidity of the system, which hampered recordkeeping
and stock management.

Observational Data Collection:

Method: I monitored the use of the ERP system, focusing on the GRN process.

Metrics Captured:

1. Time spent generating GRNs

2. Error rates in inventory records
3. Time spent on manual adjustments due to system errors

Data Analysis:

1. GRN Delays: It took an average of 20 minutes to generate GRNs, with delays due to
system rigidity.
2. Error Rates: There was a 10% error rate in inventory records, requiring manual
adjustments and leading to further delays.

Impact:

Operational Delays: The limitations of JDE slowed down inventory processing and affected
project timelines.

Increased Labor Costs: Manual adjustments increased labor costs and reduced productivity.

Recommendations:

ERP Upgrade: Consider upgrading to a more flexible ERP system capable of managing
dynamic inventory and project-based tracking.

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Process Automation: Implement automation tools within the ERP to reduce manual tasks and
errors.

CHAPTER 6: FINDING AND INTERPRETATION

6.1 Key Findings

1. Primary Goal Order Fulfillment: The organization's main goal related to inventory
management is to ensure timely and efficient order fulfillment. With a robust system in place,
they achieve an impressive 98% order fulfillment rate. This high success rate reflects the
effectiveness of their policies, which include managing supplier relationships and maintaining
accurate stock levels to avoid delays in delivering customer orders.

2. Supplier Policy No Early Deliveries and Multiple Suppliers: The organization enforces a
strict supplier policy that prohibits early deliveries, ensuring that suppliers cannot deliver
goods ahead of the scheduled time. Gatekeepers at the warehouse strictly monitor this policy,
reducing the risk of overstocking and the associated carrying costs. Additionally, the company
prefers to work with multiple suppliers to ensure they receive the best quality materials at
competitive prices. By diversifying their supplier base, they ensure a steady supply of high-
quality inventory and minimize the risk of disruption in case one supplier faces issues.

3. Specification Racks System: To tackle space constraints and enhance storage efficiency, the
organization is utilizing a specification racks system. This system allows for the
categorization of materials based on specific projects or inventory types, making it easier to
locate and retrieve items when needed. This organized approach maximizes the use of limited
storage space, reduces clutter, and accelerates the material handling process.

4. Oracle Implementation: The organization is in the process of implementing Oracle, a

sophisticated ERP system, to further enhance their inventory management. Oracle offers
advanced features like better stock level tracking, demand forecasting, and flexible reporting,

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which will enable more informed decision making and operational improvements over their
current system (JD Edwards).

5. 80% Accuracy Rate in Inventory Management: The company maintains an 80% accuracy
rate in their inventory records. This means that 80% of the stock records match the actual
physical inventory, reflecting their ability to manage stock effectively. This accuracy level
ensures the smooth operation of their order fulfillment processes and minimizes errors related
to stock discrepancies.

6. Low Stockout Rate (10%): The organization keeps their stockout rate at approximately
10%, meaning only 10% of inventory items experience stockouts. This low stockout rate
demonstrates efficient demand forecasting and inventory replenishment practices, ensuring
that most products are readily available to meet customer needs, which reduces missed sales
and enhances customer satisfaction.

7. Stock Statement and Inventory Report Cardex System: The company uses the Cardex Stock
Statement system to maintain detailed records of inventory movements. This traditional
system tracks stock as it enters and leaves the warehouse, helping the organization monitor
inventory levels and detect discrepancies. Although not as advanced as fully integrated ERP
systems, the Cardex system remains a reliable tool for inventory tracking and reporting.

6.2 Challenges

Restricted Storage Space: The current storage facilities are unable to efficiently handle
project-based inventory, leading to congestion and operational inefficiencies. This challenge
arises as specific space allocation systems, like specification racks, are not always sufficient,
causing delays in managing and retrieving materials on time.

Customer Order Delays: After reviewing the system, it has been observed that customers
often defer accepting their orders immediately after project completion, asking for additional

41
time before taking delivery. This delay results in an extended holding period for inventory,
increasing the associated carrying costs and straining storage resources.

Insufficient Labor: A shortage of labor has created significant challenges in managing and
controlling inventory efficiently. With fewer employees available for stock handling, tasks
such as sorting, organizing, and processing inventory take longer, further contributing to
storage congestion and inefficiencies.

Elevated Stock Levels and Increased Carrying Costs: Due to the delays in order processing
and customer deferrals, stock levels remain higher than planned, which directly raises the
carrying costs for inventory. These costs include expenses related to storage, insurance, and
the risk of obsolescence, all of which could impact the company’s profitability.

ERP System Limitations: The current ERP system, JD Edwards (JDE), used for generating
Goods Receipt Notes (GRNs), lacks the flexibility required to accommodate the evolving
needs of the business. The system’s rigid structure prevents users from adapting it for more
dynamic inventory processes or project-based inventory tracking, leading to inefficiencies in
recordkeeping and stock management.

Challenges in Accurately Forecasting Demand: Since the business is largely driven by

customer needs, accurately predicting demand remains a challenge. With customers often
deferring the acceptance of their orders after project completion, the company finds it difficult
to manage stock levels effectively. This unpredictability in demand complicates inventory
planning, leading to either excess stock or stock shortages, both of which can be costly.

6.3 Overall Interpretation:

The organization has established a solid inventory management system, as evidenced by its
high order fulfilment rate and low stockout rate. However, it faces several operational
challenges, particularly with storage space, labor shortages, and ERP system limitations. The
transition to Oracle is expected to resolve many of these issues, but the company will also

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need to focus on improving labor efficiency, storage optimization, and demand forecasting to

maintain operational excellence and profitability.

CHAPTER 7: CONCLUSION AND

RECOMMENDATION

7.1 Conclusion

1. Strengths in Strategic Supplier Management:

The organization has adopted strong supplier management practices by discouraging early
deliveries and using multiple suppliers to ensure high quality materials. These strategies help
in lowering inventory holding costs while maintaining a stable and efficient supply chain,
contributing to the company's impressive 98% order fulfillment rate.

2. Efforts Toward Space Optimization:

By implementing specialized racks, the organization is addressing storage constraints in a

proactive manner. This initiative, which focuses on project specific material categorization, is
proving effective in making better use of available space, streamlining material retrieval
processes, and reducing storage area congestion.

3. Challenges with Limited Storage Space:

Despite the steps taken to optimize storage, the organization continues to grapple with
significant storage limitations. Current facilities are insufficient to handle project-based
inventories, which hampers the smooth flow of operations. Overcoming these space
challenges is essential for more efficient inventory management.

4. Customer Order Delays and Stock Holding Costs:

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A recurring issue is the delay in customer order pickups after project completion, which leads
to prolonged holding periods for finished goods. This not only increases inventory holding
costs but also intensifies the pressure on available storage space. Aligning inventory
management more closely with customer demand can help alleviate this strain.

5. Outdated ERP Systems:

The existing ERP system, JD Edwards (JDE), lacks the flexibility needed for efficient,
modern inventory management. The ongoing transition to Oracle promises improvements in
areas like tracking, forecasting, and reporting. A successful implementation of Oracle will be
vital to boosting the efficiency of inventory operations.

6. Focus on Inventory Management Accuracy:

The organization currently achieves an 80% accuracy rate in inventory records using the
Cardex Stock Statement system. However, there is room for improvement. The integration of
advanced tracking systems, part of the Oracle upgrade, could significantly improve accuracy
and overall operational efficiency.

In summary, addressing storage space limitations, reducing customer order delays, and
upgrading the ERP system are key to enhancing the organization’s inventory management.
These improvements will help cut costs, streamline operations, and ultimately boost customer
satisfaction.

7.2 Recommendations

1. Optimize Storage Space:

1. Utilize Vertical Storage Solutions:

Action: Implement high rise shelving, mezzanine floors, or automated storage and retrieval
systems (ASRS) to make better use of vertical warehouse space.

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Purpose: This will increase storage capacity without expanding the footprint and allow for
easier access to stored items through efficient vertical racking systems.

2. Regularly Review and Reorganize Inventory:

Action: Conduct periodic audits to identify slow moving or obsolete items. Use ABC analysis
to categorize inventory by usage and importance.

Purpose: This will help ensure that frequently used items are easy to access, while less critical
items are moved to less prime storage areas, optimizing space usage and improving workflow
efficiency.

3. Explore Offsite Storage for Nonessential Items:

Action: Consider moving nonessential or slow-moving items to external storage facilities to

free up space for high priority inventory.

Purpose: This will help declutter the warehouse, making it easier to manage high demand or
project-based stock without overburdening onsite storage.

2. Improve Customer Order Management:

1. Establish Clear Communication with Customers:

Action: Set up customer portals, notifications, and a customer service hotline to provide
Realtime updates on orders, delivery schedules, and any potential delays.

Purpose: Transparent communication helps manage customer expectations, builds trust, and
enables quicker resolution of issues, improving customer relationships.

2. Adopt Flexible Inventory Policies:

Action: Implement inventory strategies like Justin In Time (JIT) and maintain safety stock to
adjust for changes in customer demand or delays.

Purpose: This approach minimizes holding costs and ensures inventory levels align with
actual demand, preventing overstocking and optimizing operations.

3. Introduce Contractual Clauses for Order Delays:

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Action: Collaborate with legal and sales teams to create contracts that include penalties or
extra fees for delayed order pickups. Ensure customers are aware of these terms during
negotiations.

Purpose: By establishing clear consequences for delays, the company can reduce the
likelihood of bottlenecks and mitigate the financial impact of extended holding periods.

3. Implement Advanced Tracking Technologies:

1. Deploy RFID and Barcode Systems:

Action: Use RFID tags and barcodes on all inventory items and set up scanners to track
inventory movement and status in real time.

Purpose: This reduces manual tracking errors and ensures accurate, UpToDate information on
stock levels, improving overall supply chain visibility.

2. Utilize Inventory Management Software:

Action: Implement software that integrates with RFID and barcode systems to manage stock
levels, automate reordering, and optimize space utilization.

Purpose: This software provides Realtime data insights, helping the organization manage
inventory more effectively and reduce excess stock and storage costs.

4. Upgrade ERP System:

1. Modernize ERP System:

Action: Replace the outdated JDE system with a more flexible and advanced ERP, such as
SAP S/4HANA, Oracle ERP Cloud, or Microsoft Dynamics 365, tailored to the organization’s
needs.

Purpose: A modern ERP will offer better data visibility, scalability, and decision-making
capabilities, which will streamline operations and reduce manual effort.
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2. Seamless Integration with Inventory Processes:

Action: Ensure the new ERP system integrates smoothly with existing inventory processes,
allowing for Realtime data flow between departments. Conduct a pilot run to test and resolve
any integration challenges.

Purpose: This will enable better coordination between inventory management and other
operations, reducing errors and improving efficiency.

3. Automate Goods Receipt Notes (GRNs):

Action: Configure the new ERP system to automatically generate GRNs when goods are
received, linking them to purchase orders and invoices for streamlined processing.
Purpose: Automating GRNs reduces manual errors, speeds up receiving processes, and
ensures accurate recordkeeping, improving both inventory accuracy and financial reporting.

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 7.3 Limitations and Scope of the study

7.3.1 Limitations of the Study

1. Geographical Constraints:
Specific Context: The study focuses solely on Emerson Process Management Pvt. Ltd., based
in Mumbai, Maharashtra. The findings may not be directly applicable to organizations
operating in different geographic locations with distinct market conditions, regulatory
environments, or supply chain dynamics. Regional differences in logistics, customer
preferences, or local regulations could significantly influence inventory management
practices, rendering the recommendations less relevant in other contexts.

2. Scope of Data Collection:

Data Limitations: The study's reliance on primary data from interviews and observations,
while valuable, is subject to potential biases or inaccuracies inherent in subjective reporting.
Additionally, secondary data sources like books and journals may not fully capture the latest
developments or specific nuances of the organization's inventory management practices.
These limitations in data accuracy or completeness may affect the reliability and
generalizability of the study's findings and recommendations.

3. Implementation Constraints:
Technological Evolution: The recommendations are based on current inventory management
practices and technologies. Given the rapid pace of technological advancements and changes
in organizational strategies, these recommendations may become outdated or less relevant
over time. Future developments in inventory management technology, such as new ERP
systems or emerging trends, might necessitate adjustments to the proposed solutions.

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4. System Integration Challenges:
Technical Difficulties: Implementing new ERP systems and integrating them with existing
inventory management processes can present significant technical and operational challenges.
Issues such as data migration errors, system compatibility, and user training can affect the
smooth transition and effectiveness of the new system. These challenges may impact the
feasibility and success of the recommendations related to ERP system upgrades.

5. Limited Duration:
Temporal Constraints: The study's findings are based on data collected over a specific period,
which may not account for long-term trends or fluctuations in inventory management
practices. Short-term observations might not capture seasonal variations, evolving market
conditions, or long-term strategic shifts that could affect inventory management and the
effectiveness of the recommendations over time.

6. External Factors:
Market and Economic Conditions: The study's recommendations might be influenced by
external factors beyond the organization's control, such as market fluctuations, economic
downturns, or changes in customer behavior. These external factors can impact inventory
management practices, potentially affecting the applicability and effectiveness of the
proposed solutions. For example, a sudden economic recession or supply chain disruption
could alter the assumptions underlying the recommendations and necessitate adjustments to
the strategies suggested.

7.3.2 Scope of the study

Managing purchases and inventories include controlling the purchase, storage, and use of
supplies and goods inside a company. Its scope includes different facets of inventory
management and the procurement process. The following are some essential components of
purchasing and inventory management:
Procurement Planning: Determining the need for products or resources, finding possible
suppliers, and developing procurement strategies are all parts of procurement planning.
Evaluation and Selection of Suppliers: Evaluating and choosing suppliers based on aspects
including cost, reliability, and delivery capacity. assessing the performance of suppliers and
preserving connections with them.
Purchase Order Management: Creation and management of purchase orders is the first step in
the procurement process. This includes checking the accuracy of orders, contacting suppliers,
and monitoring order status.
Inventory Control: Inventory control involves keeping an eye on and managing inventory
levels to maintain ideal stock levels and reduce holding expenses and stockouts. Demand
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forecasting, reorder point determination, the use of safety stock, and inventory audits are all
required.
Warehouse Management: Management of the physical organization and storage of inventory
in warehouses or distribution hubs. This comprises effective space utilization, stock rotation,
and inventory layout optimization.
Receiving and Inspection: Receiving incoming shipments, checking the items' quality and
quantity, and making sure they adhere to the requirements and purchase orders.
Inventory Tracking and Recordkeeping: Maintaining accurate records of inventory levels,
stock movements, and associated financial transactions is known as inventory tracking and
recordkeeping. This makes inventory analysis and reporting efficient.
Demand Planning: Demand planning is the process of predicting future demand trends and
modifying inventory levels to accommodate demand. Analyzing previous sales data, market
trends, and consumer demand indicators are required for this.
Inventory optimization: Using strategies including Justin in time (JIT) inventory, economic
order quantity (EOQ), and ABC analysis to reduce carrying costs, increase cash flow, and
optimize inventory levels.
Management of disposal and obsolescence: Managing the recycling, return to supplier, or
liquidation of excess, damaged, or obsolete goods. Technology and Systems: Using
enterprise resource planning (ERP) systems or procurement and inventory management
software to automate transactions, expedite procedures, and provide reports.

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 CHAPTER 8: BIBLIOGRAPHY/REFERENCES

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C. S. (2024). Inventory Management System. International Journal of Advanced Research in
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816–825. https://doi.org/10.46729/ijstm.v5i4.1144
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8. Naidu, K. (2024). INVENTORY MANAGEMENT IN FIRM PERFORMANCE. International
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11. https://www.emerson.com/enin/automation/measurementinstrumentation/
tankgaugingsystem/aboutinventorymanagementsoftware
12. https://www.tofler.in/emerson-process-management-india
private%20limited/company/U29196MH1981PTC024115/financials

REPORT ON PLAGIARISM CHECK

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