Real Project Nidhifinal (1) (Repaired)

8/18/2019 Real Project Nidhifinal (1) (Repaired)

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A report submitted to

Dibrugarh University, Dibrugarh

IN THE PARTIAL FULFILLENT !F THE PAPER

PR!"E#T REP!RT !N$%

%A Case Study on the Inventory ManagementSystem of Numaligarh Renery Limited”

!F THE &'#! (A##!UNTIN) * FINAN#E+ #!URE

U&ITTED &- :NIDHI A)AR.ALRo// no0Registration no0

)o/aghat #ommer1e #o//ege2343$2344

UNDER THE )UIDAN#E !F0DR' PRAN"AL PRATI DUTTA'#!', Ph'D'

Asstt' Deptt' !5 A11ountan1y)o/aghat #ommer1e #o//ege


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A

PR!"E#T REP!RT TITLED

“A Case Study on the Inventory Management System of

Numaligarh Refinery Limited”

U&ITTED T! DI&RU)ARH UNI6ERIT- F!R PARTIAL

FULFILLENT !F &'#! PE#IALIT- #!URE

(A##!UNTIN) * FINAN#E+

NAE !F )UIDE0 U&ITTED &-0

Dr' PRAN"AL PRATI DUTTA NIDHI A)AR.AL

'#!', Ph'D' Ro// No'0

Asstt'Pro5essor, Deptt'o5 A11ountan1y Registration No'0

)o/aghat #ommer1e #o//ege Date o5 ubmition0


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Dr. Pranal Pratim Dutta! M.Com.! Ph.D "el.Nos.

#$%%&'(&)(*# +R,

Asstt.Professor! De-tt.of Aountany

/0'/&$*#*$$%# +M,

1olaghat Commere College 2'

mail3 -rnl4dtta5redi6mail.o

1olaghat '%7*)(0 +Assam,

Ref………… Date………

CERI!ICAE "! #E $%IDE

This is to certify that Miss Nidhi Agarwal, student of Golaghat Commerce College has successfully

completed her project entitled % A Case Study on the Inventory Management System of Numaligarh

Refinery Limited” under my guidance and supervision.

he has fulfilled all the re!uirements of the project wor" under #i$rugarh %niversity.

The project is the result of her own investigation.

(DR' PRAN"AL PRATI DUTTA+

mailto:[email protected]:[email protected]


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DECLARAI"N

I miss Nidhi Agar7a/, student o5 )o/aghat #ommer1e #o//ege, do hereby de1/are that the pro8e1treport entit/ed, % A CASE S%D& "N #E IN'EN"R& MANA$EMEN S&SEM "! N%MALI$AR# RE!INER& LIMIED”( that has been submitted by me as a re9uirement o5 &'#om Fina/ year #ourse given under Dibrugarh University'

I hereby de1/are that this pro8e1t report is an out1ome o5 my individua/ e55ort and no parto5 it has been e:tra1ted 5rom any other pub/ished resear1h or 8ourna/s, arti1/es or ne7s/etterse:1ept those spe1i5ied in re5eren1es'

NID#I A$AR)AL

*+Com+,rd year


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-RE!ACE

;no7/edge has t7o aspe1ts $ theoreti1a/ and pra1ti1a/ and no theoreti1a/ 1on1ept is

1omp/ete 7ithout having


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AC.N")LED$EMEN

Every mature individua/ in pro5essiona/ /i5e is


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IN'EN"R& MANA$EMEN Analysis is a post mortem of the organi)ation*s inventory system. +t

measures the a$ility of the organi)ation to meet its material re!uirement efficiently or not. +ts helps in

calculating the appropriate amount of money should invest in the inventory without ma"e it o$solete,timely consume and replace $y new inventory.

+n this project, + analy)ed the different aspects of inventory at Numaligarh 'efinery. My prime o$jective

is to interpret the policies and procedures adopted in maintaining the proper inventory.

+n this study, + had used #escriptive 'esearch #esign. This research design is a$out the characteristics of

particular things. The engraved data is collected from various we$sites, manuals, monthly periodicals

and different time periods. My analysis of the study underta"en is !uite satisfactory which shows that

refinery has good system of maintaining inventory. The report includes the inventory turnover ratio of

five years and analysis of moving and non moving inventory items, along with the data of raw materialin stoc" as in stores and in transit.

PR!"E#T TITLE0 - A CASE STUDY ON THE INVENTORY MANAGEMENT SYSTEM OF NUMALIGARH REFINERY LIMITED.”

INTITUTI!NAL )UIDE0 $ #r.ranjal ratim #utta.

L!#ATI!N0 $ Golaghat

DURATI!N0 $ /0/112/2 to /2312//

TATEENT !F THE PR!&LE0 $ This project enables me to know variousaspects of Inventory Management System of NR! an" its importance an" steps

taken by NR in the few recent years# My project is $asically to assess and analy)e the

inventory in N'(.

THE !&"E#TI6E!F - TUD- ARE A F!LL!.0$

• To e4amine whether there was any norm for maintaining stoc" of raw materials.

• To see the performance and development of inventory control system.

• To see whether the implementation of A is $eing done $y N'(.

• To study how sufficient large si)e of inventory is maintained in Numaligarh 'efinery to meet the

demand of finished goods 5 to meet the demand of raw material.


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• To suggest measures6recommendations for the proper implementations of the inventory control

system.

REEAR#H ETH!D!L!)-0$

'esearch can $e defined as a scientific and systematic search for pertinent information on a specific

topic. 'esearch is an art of scientific investigation.

-'esearch comprises of defining and redefining pro$lems, formulating hypothesis or suggested

solutions, collecting organi)ing and evaluating data, ma"ing deductions and reaching conclusion and at

last carefully testing the conclusion to determine whether they fit the formulated hypothesis.

REEAR#H DEI)N0$

-'esearch #esign is the plan and structure of investigation so conceived as to o$tain answers to research!uestions.7

NATURE !F REEAR#H0$

#escriptive 'esearch design is used for study.

#escriptive research as the name suggests is designed to descri$e something 8 for e4ample the

characteristics of users of a given product 9 the degree to which product use varies with income, age, se4or other characteristics9 or the num$er who saw a specific television commercial. To $e of ma4imum

$enefit, a descriptive study must only collect data for a definite purpose. our o$jective andunderstanding should $e clear and specific. +t is a "ind of survey method. This project study is relatedwith the inventory management so the data is collected in this 'egard only.

APLIN) ETH!D3'

ampling method use in this research is imp/e random samp/ing and 1onvenien1e, which also "nownas nonpro$a$ility sampling.

APLE IBE :

The sample si)es for survey are the e4isting EE#UTI6E * HEAD !F THE DEPARTENT of Numaligarh refinery limited.

T-PE !F APLE DEI)N0$


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+n this study, information will $e collected from the different department of Numaligarh refinery limited.

Thus, it is a sample investigation. ;ere, N#A' #ATA.

DATA !UR#E0$'esponding to this survey is mandatory. #ata are collected directly from survey respondents ande4tracted from administrative files. The !uestionnaires used in the survey have $een designed to

minimi)e different interpretations. The survey forms were field tested with respondents to ensure the

!uestions, concepts and terminology were appropriate.

ignificant effort is spent trying to minimi)e nonresponse during collection. Methods used, amongothers, are interviewer techni!ues such as pro$ing and persuasion, repeated rescheduling and call$ac"s

to o$tain the information, and procedures dealing with how to handle noncompliant ?refusal@

respondents. +f data are unavaila$le at the time of collection, a respondents $est estimates are also

accepted.

NEED !F - TUD-0$

The need of my study is to fill the gap $etween different aspects of theoretical and practical "nowledge

of financial management and to develop the re!uired s"ill to ta"e decision on sight for the $est use of

my theoretical "nowledge. To study how sufficient large si)e of inventory is maintained in Numaligarh

'efinery to meet the demand of finished goods 5 to meet the demand of raw material.

RE6IE. !F LITERATURE0$ The previous important literature of the relate" stu"y is reviewe" that are abstract!

an" signi$cant writings of authorities in the area un"er the stu"y are reviewe"# It

provi"es a backgroun" for the "evelopment of the present an" brings the rea"er

upto "ate#

H-P!THEI !F THE TUD-0$


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• +nventory system of N'( has more or less achieved its o$jectives and has fulfilled the needs.

• N'( constitutes of highly s"illed and trained professionals in their refinery.

• BC( holds the important place in the sales pattern.

LIITATI!N !F THE TUD-0$

As with any e4ploratory research the findings of this study are to $e accepted with several limitations.

ince limitations of the study can $e viewed as directions for future research in the field, it is pertinent to

list limitations and futures research opportunities simultaneously.

;ere following are some limitations under researches had to wor":

/. The time duration for e4ecuting the research study was limited. o, it was difficult to cover theoverall depth of the study a$out the whole organi)ation. o, some shortfall might $e present.

1. ome of the in5ormation a$out the respective department was not disclosed $y the e4ecutives asthey don*t possess any ideas regarding those issues.

3. oney availa$le with the researchers also imposed a limitation on the comprehensive of thisresearch.

. Certain data was provided $y the officers from the memories, so certain omission and1ommissions might $e there.

0. The di55eren1e in per1eption of the e4ecutives can $e a major constrains.

C' !rganiationa/ Restri1tions0 There were restrictions on the supervisor and on the respondents

to very much clear all the policy and process. No organi)ation discloses all the recruitment and

selection policy to the outsides. No$ody in the organi)ation is authori)ed to disclose all the

policies it is $ecause of some certain principles made $y the top management of the organi)ation.

;ence, finding due to an evaluation study have its limitations.

Contents


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C#A-ERS INDE4 -age+ No

-RE!ACE

AC.N")LED$EMEN

E4EC%I'E S%MMAR& • LIS "! A*LES

5 INR"D%CI"N

5+5 Company profil

5+6 Rfinry !onfi"#ra$ion

5+, %ro!$ 'i( !r#& #$ili)a$ion pa$$rn

5+7 F#$#r plan(

6 IN'EN"R& MANA$EMEN 8 I9S

"*:ECI'ES

, IN'EN"R& MANA$EMEN "! NRL

,+5 In*n$ory mana"mn$ (y($m a$ NRL

,+6 Ma$rial( plannin" + In*n$ory !on$rol

mana"mn$

,+, Implmn$a$ion of SA% a$ NRL

,+7 Ma$rial( p#r!,a(in"

,+; %,y(i!al prforman! of $, Rfinry

7 ANAL&SIS AND INER-REAI"N 7+5 Da$a Analy(i( $,ro#", %rimary Da$a

7+6 Da$a Analy(i( $,ro#", S!on&ary Da$a

7+, Analy(i( of Hypo$,(i(

7+7 S-OT Analy(i(

; !INDIN$S(

S%$$ESI"N(REC"MMENDAI"NS 8

C"NCL%SI"N

•

•

*I*LI"$RA-#&

ANNE4%RE<

=%ESI"NNAIRE


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List of ta2les

a2le Num2ers Details -age num2er

Ta$le/ hysical performance of N'(

Ta$le1 Current ratio

Ta$le3 +T'

Ta$le +nventories of N'(

Ta$le0 +ncrease and decrease of

inventory

Ta$leD ale of products

Ta$leE 'aw materials

consumed

Ta$leF Consumption of stores ,spares

and raw materialsTa$le roduction wise sales pattern

of N'(

Ta$le/2 arty wise sales pattern of

N'(


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C8AP"2R' 0

IN"R9D:C"I9N

IN"R9D:C"I9N

C9MPAN; PR9


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4'4 #!PAN- PR!FILE !F NRL0$ Numaligarh 'efinery has $een set up in /3 in the district of Golaghat, Assam in fulfillment of the

commitment made $y the Govt. of +ndia in the historic Assam Accord for providing the thrust towards

industrial and economic development of North=ast. Numaligarh 'efinery, opularly "nown as H

Assam Accord 'efineryH has $een set up a grass root refinery at Numaligarh in the district of Golaghat

?Assam@ in fulfillment of the commitment made $y Government of +ndia in the historic H Assam AccordH

, signed on /0F/F0 for provi"ing a thrust towar"s in"ustrial an" economic terminalwere complete" within the approve" cost of Rs#%&%'crore#

Numaligarh 'efinery (imited ?N'(@ was incorporated on 11/3. resently Bharat etroleum

Corporation (imited holds 0/I of the companys e!uity. The other e!uity holders are Government of

Assam, >il +ndustry #evelopment Board and >il +ndia (imited with e!uity participation of /2I each.


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The $alance /I e!uity is earmar"ed for a u$lic +ssue. The refining capacity of this refinery is 3.2

MMTA.

N'( has $een a$le to display credita$le performance since commencement of commercial production

in >cto$er, 1222. Jith its concern, commitment and contri$ution to socioeconomic development of thestate com$ined with a trac" record of continuous growth, N'( has $een conferred the status of Mini

'atna %.

The present authori)ed capital of the company is 's. /222crores and paid up capital is

's.E30.D3crores. The shareholding pattern as on 3/23122D is given $elow:

(harat )etroleum *orporation imite" :: +,#+.

/ovt# of 0ssam :: ,%#1.

2il In"ia imite" :: %+#33.

"otal :: 0##=


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+%.,%.

%+.

Shareholders Pattern

>harat Petroleum

Cor-oration Limited

1ovt. of Assam

9il India Limited

Produ1t Range0 N'( product range includes (G, Naphtha, Motor pirit ?M@, Aviation Tur$ineKuel ?ATK@ uperior Lerosene >il ?L>@ ;igh peed #iesel ?;#@, 'aw etroleum Co"e ?'C@

Calcined etroleum Co"e ?CC@ 5 ulphur.

Retai/ egment 0 trategic decision was ta"en to enter into the 'etail #istri$ution segment.

ermission was received from Govt. of +ndia to mar"et M5 ;# through a chain of 0/2 'etail >utletsin a phased manner. ;itherto, scores of retail outlets, aptly christened =nergy tations have already

$een commissioned in the North =ast and other parts of +ndia and the process continues.


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L!#ATI!N0$

00 Numaligarh 'efinery and its township are well connected $y air, road and rail.

00 The nearest airport is


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6II!N0$

To $e a vi$rant, growth oriented energy company of national standing and glo$al reputation having

core competencies in refining and mar"eting of petroleum products committed to attain sustained

e4cellence in performance, safety standards, customer care and environment management and to provide

a fillip to the development of the region.

II!N0$

To developed core competencies in refining and mar"eting of petroleum products with a focus

on achieving international standards on safety, !uality and cost.

To ma4imi)e wealth creation for meeting e4pectations of shareholders

To create a pool of "nowledgea$le and inspired employees and ensure their professional and

personal growth.

• To contri$ute towards development of the region.

!&"E#TI6E0$

To e4cel in its performance, N'( would strive to:

+@ Ma4imi)e refinery capacity utili)ation and optimi)e product attern $y efficient refinery operation.

ii@ =nsure smooth and timely evacuation of products9 create a ound customer $ase and necessary

mar"eting infrastructure.

iii@ Achieve highest standards in product !uality, safety, health and =nvironment protection.

+@ Manage and operate the facilities in an efficient and cost effective manner for generation of ade!uate

internal resources.

@ lan for production and mar"eting of low volume, high value products.


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4'2 REFINER- #!NFI)URATI!N0$

The configuration of N'( is adopted to meet the o$jective of ma4imi)ing middle distillates li"e

"erosene and diesel. This will help in reducing the overall supply deficit middle distillates in the countryand upgrade the heavier ends to the e4tent possi$le. The fully commissioned refinery yield pattern

annually is shown $elow.

/. #RUDE AND 6A#UU DITILLATI!N: +t was deigned $y =+( and has the C#% and #%capacity of 3.2 MMTA respectively and was commenced on April /.

2' DELA-ED #!!LER UNIT0 +t was designed =+(,has the capacity of 2.32D MTA and it wascommenced on eptem$er /

' H-DR!)EN UNIT: +t was licensed from ;A(#>'T>>= #enmar" and it has thecapacity of 3F222 TA, commenced on Ke$ruary 1222'

' H-DR!#RA#;ER UNIT: The licensor is C;='>N, %A having capacity of /./ MMTAand was commenced on


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4' PR!DU#T .IE #RUDE UTILIBATI!N PATTERN

PRODUCT QUANTITY (IN MT) %ON CRUDE

*R456 1333333 ,33#33

)/ 71+33 %#&8

N0)9T90 %3333 7#11

T-5ISTI0T6S 111+33 ,,#,%

0T 7333 %#71

S;2 ,,3%333 1+#&1

9S5 ,38333 1+#3

M5-5ISTI0T6 %%7%333 &+#3&

2 3 3#33

R)* 73173 %#+7

*)* 3 3#33

S4)94R '333 3#,1

960


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Mar"eting of major products from the refinery, namely, Naphtha, M, L> and ;# is $eing done

through BC(.

N'( is also mar"eting small !uantity Ms and ;# through retail networ" the =N='G

TAT+>N.

N'( is also mar"eting some !uantity of Naphtha to domestic customer and through e4port.

(G and ATK are $eing mar"eted through % >il Mar"eting companies, li"e BC(, +>C(, and

;C(.

The specialty products, namely, 'C, CC and ulphur are $eing mar"eted directly $y N'(.

M and ;# are also supplied to '+( and =>(.A pipeline $etween Numaligarh to iliguri has $een

set up and was monitor $y oil +ndia (imited. Also major portion of oil is dispatch through this pipe

line.

4' FUTURE PLAN0$

The Company has identified following major projects6schemes to $e underta"en for feasi$ility

study6implementation in a phased manner.

.a: Pro8e1t0 N'( has identified the Ja4 roject for production of high value paraffin andmicrocrystalline wa4 utili)ing inherent properties of Assam Crude. A draft #etailed

Keasi$ility roject ?#K'@ has $een prepared through M6s =ngineers +ndia (imited and a

financial appraisal of the project as well as mar"et survey has recently $een carried out. The proposal for implementing the project is $eing put up for necessary approval.

Naphtha p/itter Unit0 +n order to supply /D2 TMTA of petrochemical grade Naphtha tothe proposed Assam Gas Crac"er roject as feed stoc", the process pac"age for a Naphtha

plitter %nit within the 'efinery has $een prepared. M6s =ngineers +ndia (imited has $een

engaged for preparation of the Basic =ngineering and #esign ac"age ?B=#@ and the

process of selection of the project management consultant ?MC@ has $een initiated.

Euro$I6 Produ1tion0 tudies have $een carried out inhouse at N'( and through process licensor of the Motor pirit lant, M6s A4ens of Krance for production of =uro+

M in Numaligarh 'efinery.

Euro$I6 HD Produ1tion0 To cater to future need of high !uality environment friendlydiesel, a study is $eing carried out $y N'( as well as $y engaging consultants to e4plore the

feasi$ility of producing =uro+ ;# at /22I capacity utili)ation of the refinery.


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C8AP"2R' ( IN?2N"9R; MANA12M2N"

@

I"S 9>2C"I?2S


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IN6ENT!R- ANA)EENT0 $

+nventory is tangi$le property held for sale in the ordinary course of $usiness, or in the process of

production for such sale, or for consumption in the production of goods or services for sale, including

maintenance supplies and consuma$le stores and spare parts meant for replacement in the normal

course. +nventory normally comprises of raw materials, wor"inprocess, finished goods including $y

products, stores and spare parts and loose tools. +nventory constitutes a major element of wor"ing capital

which needs efficient management. +nventory management covers fi4ation of minimum and ma4imum

levels, determining the si)e of inventory to $e carried, deciding a$out the issues, receipts and inspection

procedures, determining the economic order !uantity, proper storage facilities, "eeping chec" over

o$solescence and ensuring control over movement of inventories. Thus, it is important that inventory is properly controlled.

Management of inventory consisting of raw materials, stores and spares and finished goods is a

vital area of concern for any pu$lic enterprise, especially in the case >f manufacturing industries.

=4cess inventory holding leads to e4cessive carrying cost on account of interest, storage and handling

charges, insurance, record "eeping, inspection and ris" of deterioration in !uality and thus adversely

affects the profita$ility of the organi)ation. =ven though the optimum level of inventory varies from

industry to industry, it is generally considered that the value of inventory as a percentage of annual

consumption should not e4ceed 33 per cent and the value of finished goods to net sales should $e a$out

one month*s sale ?i.e., F.33 per cent@.

.H! H!ULD ATTEND

Kactory and inventory control professionals, manufacturing and production control managers, industrial

engineers, plant managers, material and purchasing managers, factory superintendents and

customer6technical service managers who can $enefit from enhancing their inventory management

techni!ue.

.HAT .ILL #!6ER

The strategic role of inventory management techni!ues.


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=sta$lish the optimal inventory level.

+nventory planning and replenishment.

#istri$ution center and warehousing operations.

+nventory accuracy and audits.

+nventory management, measurement and reporting.

+nventory forecasting and demand management.

!&TE#TI6E !F IN6ENT!R- ANA)EENT0+nventory of finished goods should $e maintained at sufficient high level so that the demand of

customers may $e fully satisfied .imilarly, inventory of raw materials should also $e sufficient so that

manufacturing process can $e run smoothly. +n case of inade!uate inventory of finished goods, there is

always ris" of $eing out of stoc" and in case of inade!uate inventory of raw materials9 there is always a

ris" of manufacturing process $eing halted. Therefore the major responsi$ility of inventory management

is to determine the sufficient level of inventory re!uired in $usiness. ince inventory is a major asset and

it involves a lot of funds, inventory level should not $e e4cessive. =4cessive inventory increases costs

$ecause e4tra funds are involved in it. Therefore, inventory management also tries to minimi)e the

sufficient level of inventory. Thus, $oth inade!uate 5 e4cessive !uality of inventory is undesira$le in the

$usiness.

The Term inventory management in1/udes t7o 1on5/i1ting tas


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'is" of price decline.

'is" of deterioration of goods.

'is" of o$solescence.

RI; !F INADEJUATE IN6ENT!R-

'is" of $rea" down in manufacturing process.

'is" of not meeting demand of customers.

#!T !F IN6ENT!RIE

'elevant inventory costs which change with the level of inventory are listed $elow:

!rdering #ost0 $ The cost of ordering includes:

• aper wor" costs , typing 5 dispatching

• >rder inspection cost , chec"ing 5 handling

#arrying #ost0 $ Carrying cost involves:

• Capital Cost.

• torage 5 handling cost.

• +nsurance.

• Ta4es.

• The cost of funds invested in inventory.

to1< out 1ost0 $ to1< out 1ost invo/ves0

• =4penses of placing special orders

• =4pediting income orders.

• Cost of production delays.

TE#HNIJUE !F IN6ENT!R- ANA)EENT0

4 + Determination o5 sto1< Leve/0$?A@ Minimum (evel 'eordering (evel O ?Normal Consumption P Normal 'eordering eriod@

?B@ Ma4imum level 'eordering (evel Q 'eordering Ruantity O ?Minimum Consumption PMinimum

'eordering eriod@


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?C@ #anger (evel Consumption P Ma4imum 'eorder eriod

2+ Inventory Turnover Ratio 0$+nventory Turnover 'atio Cost of good sold 6 Average inventory at cost

+ E1onomi1 !rder Juantity 0$=conomic >rder Ruantity is the !uantity where ordering cost is e!ual to non ordering cost.

=>R is made up of two parts:

a+ !rdering #ost $ these costs are associated with the purchasing or ordering of materials. This costof ordering includes:

• aper wor" cost , typing 5 dispatching

• >rder inspection cost, chec"ing 5 handling.

b+ Non $ !rdering #ost $ These are the costs for holding the inventories. This cost involves:• Capital Cost.

• torage 5 handling cost.• +nsurance.

• Ta4es.

• The cost of funds invested in inventory


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C8AP"2R' $

Inventory Management

System at NRL

'4 IN6ENT!R- ANA)EENT -TE AT NRL0$

'aw materials and +ntermediates are valued at cost or net reali)a$le value, whichever is lower.

Cost is determined as follows:

• 'aw materials on weighted average cost.

• +ntermediate toc"s at raw material cost plus cost of conversion.


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Kinished products are valued at weighted average cost or net reali)a$le value inclusive of North

=ast =4cise duty $enefit, whichever is lower.

• Annual 'eport 122/2

• /23

tores and spares are valued at weighted average cost. >$solete, slow moving6non moving

stores for 3 years and a$ove and other materials including project materials in the field assurplus are provided for in full so as to value them at 's. Nil.

The refinery produces different petroleum products, especially domestic and automo$ile fuels such as

(G, Naphtha, ATK, L>, B++ Grade ;#, =uro+++ Grade ;#, 'C and elemental sulphur as

$yproduct. The main e4isting units of N'( are as under:

UNIT #APA#IT-

Crude #istillation %nit ?C#%@ 3.22 MMTA

acuum #istillation %nit ?#%@ /.31 MMTA

#elayed Co"e %nit ?#C%@ 2.32D MMTA

;ydro Crac"er %nit ?;C%@ /./2 MMTA

;ydrogen Generation %nit ?;1%@ 3F222 TA

Motor spirit %nit ?M%@ 110 TA

Co"e Calcination %nit ?CC%@ 2./2 MMTA

ulphur 'ecovery %nit ?'%@ 222 TA


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PR!DU#T !F NRL0$

Products TMT % Wt. on Feed

Light Distillates

LPG 96 3.2

NAPHTHA 32 1.1

MS 185 6.2

313 10.4

Middle Distillates

ATF 132 4.4

SKO 270 9.0

HSD 1856 61.9

2258 75.3

Heavy Ends

RPC 50 1.7

CPC 44 1.5

SULPHUR 4 0.1

99 3.3

F&L 330 11

TT!L 3000 100


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'2 ateria/s P/anning and Inventory #ontro/ anagement

The materials department of N'( is mainly classified into parts. These parts are:

Materials planning are the scientific way of determining the re!uirement of

consuma$les, spares, accessories etc to $e procured or stoc"ed for uninterrupted operations of the

company'

#/assi5i1ation o5 ateria/sThe materials of N'( are $roadly classified into 3 categories. These are:

/. #irect Charge +tem

1. toc" +tem

3. Non toc" item.

4' Dire1t #harge Item

+tems li"e consuma$les, spares, and accessories etc which are not regularly re!uired are termed

as direct charge items. Also all capital nature items fall under this category, re!uirement of direct charge

items are generally decide $y the various departments depending on their need.


31/79

S"9C

B

SC82D:

L2

R2?

I2

R21:LAR

INS:RA

NC2

RR

2' to1< item

There are a large num$er of items comprising of consuma$les, spares, and accessories etc

which are regularly consumed $y various departments for daytoday activities of the company. +n order

to maintain uninterrupted supply of these items for fey to day activities these items are stoc"ed in the

godowns of N'( depending upon the demand and lead time of procurement. These items are termed as

stoc" items. The re!uirement, procurement, and warehousing of stoc" items is monitored $y materials

department. ome of the e4amples of stoc" items at N'( are casings, tu$ing, roc" $its,

drilling6production consuma$les, chemicals, cement, spares, stationeries, nut$olts, $earings, $elts etc.

the stoc" of all the stoc" items in terms of value constitutes the inventory of the company.

Classifi/ation of sto/1 items

The stoc" items can $e classified into the following categories:


32/79

1hedu/e items

'e!uirement of these items is dependent upon the well policy and onward drilling programmed.

+tems li"e casings, tu$ing, roc" $its, drilling and production consuma$les, etc. are covered under this

category. The re!uirement estimates are made on the $asis of programmed for type of wells to $e drilled

?e.g. development6e4ploratory, deviated6straight hole, etc.@ and the well design policies during the year.

These are generally very high value items and hence proper monitoring is necessary in view of their

vital nature and high value. =4cess stoc" of these items may results in very high inventories.

Revie7 Items

'e!uirement of these items are projected $y the user departments depending on the future project jo$s, operations envisaged $y them. rocurement is planned in consultation with the past consumption

trend as well as projection given $y the department. =4amples of review items are (ine ipe, Chemicals

etc.

Regu/ar Items

This category includes regular consuma$les and spares having more or less set pattern of

consumption. The re!uirements of these items are $ased on past consumption.

Insuran1e Items

These items are normally very high value items and do not follow any set pattern of

consumption, hence re!uirement cannot $e predicted. These are functional parts of a machine with highdegree of relia$ility and low pro$a$ility of failure. Nonavaila$ility may lead to costly shutdown. The

loss due to the shutdown may $e enormous compared to the cost of the item. Therefore, minimum stoc"

is maintained as suggested $y the user. =4amples of such items are Cran"shaft of gas engine, spares of

gas tur$ine etc.


33/79

NF! Items

These items are called as No Kurther >rder items. These items arises out of various reasons li"escrapping of main e!uipment, certain items are identified for which replenishment is not re!uired. uch

items are deleted from stoc" range when stoc" gets e4hausted.

RR Items

These items are called as reorder on re!uest items. These items do not follow any set pattern of consumption, $ut are either re!uired for project jo$s or any planned activities. 'e!uirement of these

items are $ased on the advice of user department and procurement is $ased on their projected

re!uirement. This include items e.g. electrical6telephone ca$les, etc.

' Non$to1< Items

Non stoc" items are other than those stoc" items. These items do not have regular

consumption. 'eplenishment of purchaser re!uisition of these items is ta"en $y user department. The

planning of nonstoc" items is done $y the users themselves. These items are not stored $y materials

department. The e4ample of nonstoc" items can $e calendar, diary etc.

ateria/ #ode0

All materials held in stoc" $y N'( have $een codified and classified in order to facilitate easyidentification 5 monitoring. +n total N'( has appro4 of 0022 codes.

1heme o5 ateria/ #ode0

+tem Code No. ?+TC Code@0 243

roduct #escription: P E T R ! L E U P R ! D U # T

An eight digit material code is allotted for each stoc" item 8

a@ The first two digits represent the main group e.g. S2/* 8 Casing and Attachments9 S11* 8 Gas

Compressor pares, etc.


34/79

$@ The third and the fourth digits represent the su$group e.g. -112F7 Gas Compressor pares

Chicago neumatic Model /20 5 022.

c@ The fifth, si4th, seventh and eighth digits represent the serial num$er of the item within the su$group.

ateria/ #ode &ooil Company in +ndia to implement full suite of

=' application in /F.

A is used $y out of top /2 Kortune 022 >il and Gas Companies. A is a suite of $usiness

applications which is used to optimi)e the upply Chain processes. Apart from usage in mar"eting

endeavors, the implementation is e4pected to $ring in major $enefits to the organi)ation in the various

areas of operations $esides ensuring optimum utili)ation of resources. An important feature of

implementation is that N'( has utili)ed group companies* consultants $esides A consultants there$y

optimi)ing the implementation cost.


35/79

JUALIT- P!LI#-0

They strongly $elieve that !uality performance is an integral part of our $usiness and are accordingly

committed to attain sustained e4cellence in all our activities connected with refining, storage, dispatch

and mar"eting of petroleum products.

+n pursuance of the a$ove olicy, they shall:

' ateria/s Pur1hasing 0

The flow wor" for purchase section is mentioned $elow:

+. The planning section Creates purchase re!uisitions for stoc" items 5 send to the purchase section for

re!uirement of material.

Ensure that the 9ua/ity o5 our petro/eumprodu1ts 1onsistent/y meets the stipu/atedspe1i5i1ations and the environmenta/re9uirements'

Adhere to the re9uirement o5 Jua/ity anagement ystems 1on5orming to I!

K33402333 in a// the re/evant a1tivities throughout the organiation'

Revie7 our po/i1y 5or 1ontinua/ improvement o5 the e55e1tiveness o5 Jua/ityanagement ystems'

Revie7 the per5orman1e o5 re/evant pro1esses 5or e55e1tiveness and e55i1ien1y and striveto improve upon them 1ontinua//y through setting o5 ob8e1tives'

Aim 5or minimiation o5 /osses and 1ontinua/ improvement o5 p/ant per5orman1e and1ompeten1y o5 the emp/oyees'

aintain 5o1used attention on #ustomer atis5a1tion'


36/79

++. lanning ection receives purchase re!uisition for Nontoc" items created $y various departments

duly signed 5 released in the system $y the authori)ed signatories 5 forward to the respective purchase

section. The concerned purchase section of Materials #ept prepares the N+T ?Notice +nviting Tender@.

+++. crutiny of application and approval of short listed parties $y the Materials #epartment

+. 'eceives the !uotation from vendors.

. The !uotations are sent to the intending #ept for the technical evaluation.

+. After getting the evaluation and approval of short listed parties, the !uotations are ta$ulated to find

the lowest !uotation.

++. Based on the ta$ulations, recommendation is made on the lowest technical $idder .+n some cases

the lowest $idder may $e rejected due to technical faults

+++. The material department prepares purchase proposal $ased on lowest $idder.

+. This urchase roposal is sent to urchase ection of K5A department for its verification.

. The section after scrutiny of the urchase roposal ma"es urchase >rder.

The pro1ess o5 raising an indent or ma


37/79

'A++NG

=TT+NG %.>K

T=N#='+NG

MAT='+A(=NT= '=#+

G'

N

+%=T> T;='=.=CT+= #=.A'TM=NT

-%RC#ASES

The purchases made $y N'( can $e divided into two parts:

/. +ndigenous urchase

1. Koreign urchase

The total purchase during the current year was around 02022crores.

S/ra? Dis?osal

N'(*s inventory consists of crap Materials. A Technical Committee after e4amining the items not in

use declares the same as crap and o$tains Management Approval for the same. %pon declaration of the

items as crap, the said items are placed under the disposal of M6s MTC ?Material crap Trading

Corporation (td.@ through Materials #epartment. #isposal of scrap is done $y competitive $idding process conducted $y M6s. MTC (td. Total 's./02.3la"hs ?appro4@ worth of scraps were disposed

during the year 122/2 as compared to 's. /1D.EDla"hs ?appro4.@ during the previous year.

R6T4RN I

N2T

)0=M6NT

M056 T2


38/79

S"RA$E AND )ARE#"%SIN$

There are many godowns at N'( for the purpose of storage of item.

List of $odo0ns

1

General items like engineering an ele!tri!al

"

#a$et Items

&

Pr'!ti'ns Items an ms

(e*g* !'mress'rs)

+Drilling an C,emi!al Items

-

Ci.il Items

/ At'm'0iles

Petr'l Pms

Issuing o5 ateria/s 0$

The materials department of N'( is $asically $ased on centrali)ed purchasing as it is not possi$le to

ma"e record of the re!uirements of various departments. Thus each department ma"es it necessary

purchases of their own materials. These materials are properly maintained and stored and issue of these

items is made to various departments as per their re!uirement.

#URRENT IN6ENT!R- P!ITI!N0$

The current inventory position of N'( is very good. The reduction in inventory can $e improved

through proper inventory planning and close monitoring.


39/79

!un/tion of Materials -lanning and Inventory Control Se/tions

Kollowing are the main functions of materials planning and inventory control management:

/. Codification of stoc" items, G+ no allotment and amendment of G+ voca$ulary

1. 'eview of stoc" items and indenting and follow up

3. Monitoring of critical item

. Action for write off6disposal of surplus item

0. crutiny or consolidation of direct charge indents

D. %pdating of speciali)ed and standardi)ed item list

Inventory #ontro/ .ing0

The main o$jective of the +C Jing is to control the inventory of stoc" items in accordance with the

inventory norms.

Inventory Norms0

The main o$jective of inventory control system is to control the inventory of stoc" items in accordancewith the inventory norms which are mentioned $elow:

ABC Analysis ?Based on #onsumption 6alue@

;M( Analysis ?Based on Unit 6alue@

KN Analysis ?Based on ovement@

U Analysis ?Based on toc" 6alue@

Jith the help of a$ove tools A, ;, K, category items are identified which are smaller in

num$er and constitutes a$out F0I of the inventory value and are closely monitored to avoid e4cess

inventory. (ist of slow and nonmoving items are prepared and circulated to various departments.


40/79

)as pipe/ine0 The commissioning of the first phase of the #uliajanNumaligarh gas pipe line is awelcome development that would open that would open up new possi$ilities in the state*s energy sector.

The /3"mlong highpressure pipe line implemented at a cost of 's3F2crore will now ena$le

Numaligarh 'efinery (imited ?N'(@ to receive one million standard cu$ic metre natural gas per day

from >il +ndia (imited, which could $e use as a su$stitute for costly Naphtha. The Naphtha thus saved

would feed the upcoming Assam gas crac"er project. The recent steep hi"e in natural gas prices poses

the ris" of rendering the gas $ased power stations economically unvia$le. Circumstances, therefore,

warrant a role $ac" of the hi"e that was !uite steep at /12 percent.

'G PH-I#AL PERF!RAN#E !F THE REFINER-0

#uring the year 122/2, the refinery processed crude throughput of 1.D/ MMT as against 1.10/ MMT

in the previous year. This is the highest ever crude throughput achieved $y the refinery since itscommissioning in the year 1222. The capacity utili)ation of the refinery is primarily governed $y the

crude receipt from >+(6>NGC. The crude receipt during the year was 1.0D2 MMT. The capacity%tili)ation of the crude distillation unit stood at FE.3I. #istillate yield during year was recorded at

F0.31I against the previous year*s figure of F.E1I.

#uring the year, the refinery produced /.132MMT of Bharat tage ++ grade ;# and 2.20MMTof =uro +++ grade ;#. roduction also included 2.20E MMT of (i!uefied etroleum Gas ?(G@, 2.32

MMT of Motor pirit ?M@ conforming to B++ with 2.20E MMT of =uro8+++ e!uivalent and 2.23

MMT of Aviation Tur$ine Kuel ?ATK@. Apart from this, Company produced 2.220 MMT of =uro+ Mduring the year. Total Calcined petroleum co"e produced during the year was 2.23 MMT. Total

products evacuated from the refinery NRL !on$ri#$( $o C,if Mini($r/( Rlif F#n&0 A((am during the

year was 1.3 MMT against the production of 1.3DMMT which is highest since commissioning of therefinery.


41/79

C8AP"2R' &

Analysis

@

Inter-retation

'4 Fo//o7ing are the data 1o//e1ted through primary sour1es0


42/79

/. Are you a7are o5 about inventory management system

= F2 percent

N> /E percent

#o not "now 6 cant say 23 percent

7#=

0%=

1.

;2S

N9

Dont EnoFGant say

Interpretation0 The a7areness among the 1ompany o55i1ia/s regarding the e:isten1e, 5un1tioningand app/i1abi/ity o5 inventory management system is high that is M3, as per the resu/t o5 thestudy'

2' Do you


43/79

= EF percent

N> /F percent

#o not "now 6 cant say 2 percent

;2S N9 Do not EnoFG ant say3.

,3.

%3.

13.

'3.

-3.

+3.

&3.

73.

,7.

'.

Interpretation0 The 1ompany o55i1ia/s are a7are about their 1ompany having an inventorymanagement system, M o5 the respondents do have this a7areness as against 4M O 3 o5 therespondents 7ho are either not a7are or not ab/e to provide any in5ormation in this regard'

' Do you agree that there shou/d be an inventory management system in p/a1e inany organiation1ompany


44/79

Agree E1 percent

#isagree /0 percent

#o not "now6 cant say /3 percent

Agree Disagree Do not EnoFGant say

#=

0#=

(#=

$#=

=

*#=

)#=

%#=

7#= &%.

,-. ,1.

Interpretation0 A11ording to the response to the above 9uestion, it appears that every1ompanyorganiation shou/d have a system or me1hanism in p/a1e 5or managing their inventory'


45/79

' For 7hat reasons do you 5ee/ that there?s shou/d be an inventory managementsystem

To smoothen operational re!uirement 32 percent

To save time /1 percent

To maintain accounta$ility and transparency 2 percent

>ther reasons /2 percent

#o not "now6cant say 2F percent

,#=

*=

0#=

0*=

(#=

(*=

$#=

$*=

=

$#=

0(=

=

0#=7=

"o smoothen o-erational

reHuirement

"o save time

"o maintain aountaility

and trans-areny

9ther reasons

Do not EnoFGant say

Interpretation: To everyone?s surprise, 3 o5 the respondents 5ee/ that is 5or a11ountabi/ityand transparen1y purpose that inventory re1ords are maintained and hen1e the need 5or aninventory management system' This is 5o//o7ed by the need 5or saving time and the re9uirement

5or operationa/ smoothness.


46/79

G' Do you agree that the inventory management system in your 1ompany has5u/5i//ed the needs 5or 7hi1h it 7as evo/ved

trongly agree 11 percent

Agree 02 percent

#isagree /0 percent

trongly disagree 20 percent

#o not "now6cant say 2F percent

%%.

-3.

,-.-. 7.

Strongly agree

Agree

Disagree

Strongly disagree

Do not EnoFGant say

Interpretation0 From the above response, it appears that the inventory management system hasmore or /ess a1hieved its ob8e1tives 5or 7hi1h it 7as in p/a1e' This is evident 5rom the o5 therespondents 7ho either agreed or strong/y agreed in 5avour o5 this proposition' Ho7ever, theresponse o5 2 o5 the respondents 7ho thin< other7ise a/so spea


47/79

C' .hat a11ording to you is the ma8or bene5it o5 going 5or an inventory managementsystem by your 1ompany

+t has made storage and retrieval of material easier 30 percent

+mproved ales =ffectiveness 1E percent

'educed >perational Cost 12 percent >ther Benefits /1 percent

#o not "now 6Cant say 2F percent

3.

.

,3.

,.

%3.

%.

13.

1.

'3.

$*=

(%=

(#=

0(=

7=

It has ma"e storage an"retrieval of material easieR

Improve" Sales

6>ectiveness

Re"uce" 2perational *ost

2ther (ene$ts

5o not know ?*ant say

Interpretation0 As regards the bene5its o5 having an inventory system by the 1ompany, therespondents are o5 the opinion that the ma8or bene5its /ies in re/a:ation in terms o5 storage andretrieva/ o5 materia/s' This is 5o//o7ed by in1reasing sa/es e55e1tiveness and redu1tion inoperationa/ 1ost' Ho7ever, a// these bene5its are inter/in


48/79

' Do you have s 32 percent

#o not "now6 cant say 12 percent

=6S N2 5o not know? cant say3.

-.

,3.

,-.

%3.

%-.

13.

1-.

'3.

'-.

-3.

$#=

(#=

Interpretation0 Re9uirement o5 s


49/79

M' .hat 1ategory o5 pro5essiona/s is managing the inventory system o5 your1ompany

"illed and trained 30 percent

>nly s"illed $ut not trained /E percent

Non s"illed $ut trained professionals 12 percent

Non s"illed and non trained professionals 10 percent

Non s"illed and non trained professionals 23 percent

,#=

*=

0#=

0*=

(#=

(*=

$#=

$*=

,&.

%3.

%.

1.

SEilled and trained

9nly sEilled ut not

trained

Non sEilled ut

trained -rofessionals

Non sEilled and nontrained -rofessionals

Non sEilled and non

trained -rofessionals

Interpretation0 As a/ready stated avai/abi/ity o5 trained and s


50/79

K' Do you agree that your 1ompany gives more emphasis on so5t7are than s


51/79

43' Do you thin< that the so5t7are used by the 1ompany is a11ording to the designand needs o5 the system

= F0 percent

N> /1 percent

#o not "now6cant say 23 percent

7*=

0(=

$=

;2S

N9

Do not EnoFGant say

Interpretation0 The #ompany appears to be using the so5t7are a11ording to the systemre9uirement and design and a11ording to the 1ustomer?s needs'


52/79

44' .hat is the prime 1ha//enge be5ore your 1ompany 7ith regard to inventory

management

(ac" of trained professionals 0 percent

Maintenance Cost /E percent

Changing 'e!uirements of Customers 1F percent

>ther pro$lems 2D percent

#o not "now6cant say 2 percent

L a . E

o f t r a i n e

d - r o f e s s i o n a

l s

r e H

u i r e m e n

t s o f . u

s t o m

e r s

D o n o

t E n

o F G . a n

t s a

y3.

.,3.

,.

%3.

%.

13.

1.

'3.

'.

'.

,&.

%7.

+.'.


53/79

Interpretation0 La1< o5 avai/abi/ity o5 trained pro5essiona/s 1oup/ed 7ith maintenan1e 1ost and1hanging needs o5 the 1ustomers are per1eived to be the inventory 1ha//enges be5ore the 1ompany'

42' .hat is the 5uture o5 inventory management system in your 1ompany

Jill continue as a successful mechanism D2 percent

May change according to time 32 percent

hall collapse 2E percent

#o not "now 6cant say 23 percent

)#=$#=

%=$= ill ontinue as asuessful mehanism

May hange aording to

time

Shall olla-seDo not EnoF Gant say

Interpretation0 The 5uture o5 inventory system o5 Numa/igarh re5inery appears to pretty good,as by the response it 7i// 1ontinue as a su11ess5u/ me1hanism'


54/79

'2 Fo//o7ing are the data 1o//e1ted through se1ondary sour1es0

TA&LE 4$ Physi1a/ per5orman1e o5 NRL during the year 233G to 2343

@In M

!inan/ial

&ear

Crude

hrough?ut

Light distillates Middle Distillates #eavy Ends

=uantity @B =uantity @B 3uantity @B 3uantity @B

;>F 65,6F6F G5 6GF,6 57+5 5;GH557 H+F 5,G5 ;+,

F>G 6;,H7H H, ,,,F6G 57+G 5H6F H+G 57F, 7+F

G>H 6;FHF;6 HF ,75H 5;+6 5H;5,F H+7 55,7 7+7

H> 66;577F G; ,55F7 5;+; 5F57F H+, H7FH7 7+6

>5 6F5H6 HG ,GF56 5;+G 5H5;5, H+ 5,;6 7+7

N!TE0$(+ indicates I capacity utili)ation on design capacity of 3222 TMT.(+ V indicates I on actual crude throughput.

Ana/ysis0 A$ove ta$le reveals that the physical performance of N'( which has $een in a good position from year to year .


55/79

&ar diagram sho7ing the per1entage o5 the physi1a/ per5orman1e o5 NRL in the /astG years'

%33-%33+ %33+-%33& %33&-%337 %337-%338 %338-%3,3

#.##=

0#.##=

(#.##=

$#.##=

.##=

*#.##=

)#.##=

%#.##=

7#.##=

%. %. %. %. %.'#&'.

,,#33.

,7#33. ,!. ,7#33.

8. 8. 7. 8. &.

&,.+8.

+&. +&.&3.

. '.%. %. %.

P,si!al Per$'rman!e '$ NR2

)/

MS

S;2

9S5

0T


56/79

our1es0 Annua/ report 3G$43 o5 Numa/igarh Re5inery Limited'

TA&LE 2$ #urrent ratio o5 NRL during the year 233G$2343

!inan/ial &ear ;>F F>G G>H H> >5

Current Ratio 5+7; 5+75 5+6; 5+77 5+;

-er/entage 65B 66B 5HB 6B 65B

Note0 Current 'atio ?C'@ Current Assets ?CA@6Current (ia$ilities ?C(@

Ana/ysis0 Analysis of current ratio of N'( shows fluctuating scenario during the last five years since1220 to 12/2. Ta$le 1 shows the year wise current ratio position of N'(. Krom the figure it appears that

during the financial years 1220122D and 122D122E and 122E122F, the current ratios are gradually

decreased from /.0 to /.10. This indicates poor li!uidity position of the company. ;owever, in thefinancial year 122F122 and 12212/2 significant improvements have $een made compared to 2E2F.

This indicates that the li!uidity position of N'( is fluctuating and even thought it is in improving trend $ut the capacity to meet the shortterm financial o$ligations is still $elow the optimum level.


57/79

Diagram sho7ing the 1urrent ratio o5 NRL in the /ast G years

(0=

(#=

07=

(#=

(0=

C(rrent Rati'

#*'#)

#)'#%

#%'#7

#7'#/

#/'0#

our1es 0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited


58/79

TA&LE $ Inventory turn$ over ratio (ITR+ o5 NRL during 233G$2343

!inan/ial year ;>F F>G G>H H> >5

IR @Days ,;+65 ,,+GF 6+G7 66+,5 ;5+H

-er/entage 65B 6B 5,B 57B ,6B

Note0 +nventory turn over ratio ?+T'@ Cost of goods sold6Average finished goods stoc"

Cost of goods sold ales revenue 8 Gross profit

Ana/ysis0

As inventory turnover ratio indicates how fats inventory is sold. A high ratio is good from the view point

of the li!uidity and vice versa. A low inventory turnover ratio signifies that inventory does not sell fast

and stays on the shelf or warehouse for a long time.

As the refinery having a high turnover ratio which signifies that inventory is not staying in a shelf or

warehouse for a long time they can $e easily sold after manufacturing so it means company have a good

sales in comparison to the average inventory of the refinery. Ta$le 3 shows the year wise +T' of N'(.

Krom the figure it appears that during the financial year 1220122D and 122D122E and 122E122F and

122F122, the company was having low inventory turn over ratio. ;owever, in the financial year 122

12/2 significant improvements have $een made compared to 2F2. Thus the product demand in the

mar"et is improving this year.


59/79

Pie$diagram sho7ing the ITR o5 NRL in the /ast G years

(0=

(0=

0$=

0&=

$(=

ITR (Das)

(##*'(##)

(##)'(##%

(##%'(##7

(##7'(##/

(##/'(#0#

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited'


60/79

TA&LE $ Inventories o5 NRL during 233G$2343

@In Crore


Inventories GH+ H65+7 65+,H GH+;, 5;;+5F

-er/entage 5FB 5FB 5HB 5B ,5B

Ana/ysis0 A$ove ta$le reveals the inventories of N'( in the last five years. +t has $een increasing year after year.

Pie$diagram sho7ing the inventories o5 NRL o5 /ast 5ive years


61/79

,+.

,+.

,7.,8.

1,.

In.ent'ries

%33-%33+

%33+-%33&

%33&-%337

%337-%338

%338-%3,3

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited'

TA&LE G$ In1rease and (De1rease+ o5 Inventory at NRL in 233G$2343

@In /rore!inan/ial &ear ;>F F>G G>H H> >5

In/rease@De/rease ,+HG @F7+;5 G7+6 5;+F F6;+7

-er/entage 55B @GB HB 6B G6B

Note0+ncrease and ?#ecrease@ of inventory value of closing stoc" of finished goods and stoc" in process 8

value of opening stoc" of finished goods and stoc" in process.

The va/ue in the bra1


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Pie$diagram sho7ing in1rease and de1rease o5 inventory in /ast G years'

00=

%=

7=

(=

%(=

In!rease(De!rease)

(##*'(##)

(##)'(##%

(##%'(##7

(##7'(##/

(##/'(#0#

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited'TA&LE C$ a/e o5 Produ1ts o5 NRL in 233G$2343


Sale of -rodu/ts ;H6+,G G,+,6 HGF7+5F HH;,+,; GHG7+

-er/entage 5;B 6B 66B 6,B 6B

Ana/ysis0 A$ove ta$le reveals the sale of products of N'( during 122012/2. Krom the figure it*sclear that the sale of products of N'( was in increasing trend in 1220122D and 122D122E and 122E122F and 122F122, $ut in 12212/2 it got decrease as compared to 122F122.

Pie$diagram sho7ing the sa/e o5 produ1ts in the /ast G years'


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0*=

(#=

((=

($=

(#=

#ale '$ Pr'(!ts

(##*'(##)

(##)'(##%

(##%'(##7

(##7'(##/

(##/'(#0#

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited

TA&LE $ Ra7 materia/s 1onsumed at NRL during 3G$43'

@In

Crore


Ra0 material

/onsumed

76F5+5 ;G5,+,H FH6+5, G76+ F;5+77

-er/entage 57B 5B 66B 6,B 66B

Note0 'aw material consumed >pening stoc" Q urchase 8 Closing stoc"

Ana/ysis0 A$ove ta$le reveals the consumption of 'aw materials in the last 0 years. The consumptionwas increasing year after year till 122F122, $ut in the year 12212/2 the consumption got reduced $y/I as compared to previous year.

Pie$diagram sho7ing the Ra7 materia/s 1onsumed in the /ast G years.


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0&=

0/=

((=

($=

(0=

Ra3 material !'nsme

(##*'(##)

(##)'(##%

(##%'(##7

(##7'(##/

(##/'(#0#

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery Limited

TA&LE M$#onsumptions o5 tores, pares and Ra7 materia/s in 233G$2343'


Stores( s?ares and materials 6;+, +,5 55+5, ,G+;; 5,+6

-er/entage 6GB B 55B ,B 57B

Ana/ysis0 The a$ove ta$le reveals the consumption of stores, spares and raw materials in the last fiveyears. Krom the figure it appears that during the financial year 2D2E and 2E2F the consumption got

highly reduced as compared to 202D. ;owever, the company made significant improvement in 2F2 as

compared to 2E2F. But the company again faced a downfall in 2/2. +t shows that the consumption of

the company is showing fluctuating scenario in the last five years.


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Pie$diagram sho7ing the 1onsumption o5 tores, pares and Ra7 materia/s during3G$43 '

(%=

0#=

00=

$/=

0&=

#t'res4 #ares an Materials

(##*'(##)

(##)'(##%

(##%'(##7

(##7'(##/(##/'(#0#

our1es0 Annua/ report o5 3G$43 o5 Numa/igarh Re5inery /imited.

Tab/e K$ Produ1tion 7ise sa/es pattern o5 NRL 5or the year 3G$43'

!inan/ial &ear -rodu/tion 0ise sales ?attern in ?er/entage

L-$ MS S." #SD A! R-C C-C 6;>6F 6+5;B 7+G7B H+FB G+GFB 7+FGB +GGB +G

B

6F>6G 6B 55B B FB 7B 5B 5B


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6G>6H 6B 5HB HB FGB 6B 5B 5B

6H>6 6B 5GB B FGB 6B 5B 5B

6>65 6B 5HB GB GB 6B 5B 5B

Ana/ysis0 The a$ove ta$le reveals that the sales of products is showing fluctuating scenario in the lastfive years. The sales product of M, ;#,'C and CC have $een in increasing position whereas theother products li"e (G,L>, ATK has shown fluctuating sales throughout the five year. ;owever, it*s

in an improving position

&ar$graph sho7ing the produ1t 7ise sa/es pattern o5 NRL'


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(##*'(##) (##)'(##% (##%'(##7 (##7'(##/ (##/'(#0#

#.##=

0#.##=

(#.##=

$#.##=

.##=

*#.##=

)#.##=

%#.##=

7#.##=

%. %. %. %. %.'#&'.

,,#33.

,7#33. ,!. ,7#33.

8. 8. 7. 8. &.

&,. +8.+&. +&.

&3.

. '. %. %. %.

,.,. ,. ,. ,.

,.,. ,. ,. ,.

Pr'(!ti'n 3ise sales )attern

LP1

MS

SB9

8SD

A"<

RPC

CPC


Tab/e 43$ Party 7ise sa/es pattern o5 NRL 5or the year 233G$2343'


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!inan/ial

&ear *-CL I"CL #-CL Essar( Relian/e

8 Shell

Retail Dire/t

6;>6F H,B ,B HB 5B 6B 5B

6F>6G HB HB 5B 5B ;B ;B

6G>6H HB FB 5B 5B GB ;B

6H>6 GB ;B 5B 5B 5B 7B

6>65 GGB ;B 5B 6B 5B ;B

Ana/ysis0 The a$ove ta$le reveals that the sales pattern in BC( was F3I in 202D, which got reducedand finally holds only EEI. The sales pattern of +>C( has $een in a fluctuating scenario from 202D.

Jhereas, ;C( shows a great downfall in the sales pattern after 202D. ;owever =ssar, 'eliance

5hell increased the sales pattern during 2/2. The sales pattern of 'etail and #irect is in increasingtrend throughout the year .

&ar$graph sho7ing the party 7ise sa/es pattern o5 NRL in /ast G years


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%33-%33+ %33+-%33& %33&-%337 %337-%338 %338-%3,33.

,3.

%3.

13.

'3.

3.

+3.

&3.

73.

83.71. 73. 73. &8.

&&.

1.

7. +. . .7.

,. ,. ,. ,.,. ,. ,. ,. %.%..

&.,3. ,3.

,.. . '. .

Part 3ise #ales attern

()*

I2*

9)*

6SS0R @ S966

R6T0I

5IR6*T


' Ana/ysis o5 Hypothesis0


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+"2Je/tive


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' .!T Ana/ysis0

The S9" Astrength! weakness! opportunities an" threatsB analysis has been a

useful basic rame work for strategic planning an" organiCational performance

management# This stu"y "iscusses the analysis un"er below:

S"R2N1"8S3 The strengths of Numaligarh Re$nery imite" are as follows-

• trong li!uidity position

• Kinancial results

• Good manufacturing and testing facilities.

2ABN2SS2S3 The weaknesses inherent in the Numaligarh Re$nery

imite" are as follows-

• 5eclining market share in sector#

• Non autonomy

• 5istribution "epen"ence

9PP9R":NI"I2S3 The Re$nery has the following opportunities-

• 6Dpansion of retail business

• 0ssam /as *racker )roject

• 9igh potential for market growth in In"ia

"8R2A"S3 The Re$nery is surroun"e" by the following threats-

• 'ising capital cost in the refining sector

• Kluctuations in the oil and gas prices

• Competitors are giants


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C8AP"2R' *


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. +n organi)ation store assistants have no proper "nowledge a$out engineering goods 5 raw

materials.

0. The company puts greater emphasis on software than s"illed manpower for inventory details

management.

D. The inventory management system of N'( has more or less achieved its o$jectives for which it

was in place.

E. +T' shows that the product demand in the mar"et has $een improving this year.

uggestions0

2n the basis of the analysis certain suggestion are reEuire" to make for the future

course of action# rom the survey I foun" some "rawbacks# So I suggest some

suggestion which help in long run in improving the companyFs overall growth an"

services in future# The suggestions are as follows:

4' +n store department items should placed their proper se!uence 5 ac"nowledgement.

1. There should $e proper record of wastage. +t is good for the company.

3. tore manager should give the proper "nowledge a$out engineering 5 raw materials.

. >rgani)ation should have proper staff in ;'6ersonnel department.

0. ersonnel manager should listen grievances of the employee*s personnel.

D. The organi)ation should give proper "nowledge 5 training for uns"illed employees a$out theirwor".

Re1ommendations0

There are some points may $e given as recommendation constructed for inventory

monitoring and controlling, which consists some following elements:


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The +nventory Turnover 'atio may $e improved if the management ta"es actions to investigate

the causes of differences6 shortages of tores and spares and thus remove the losses from the

accounts, if any.

The management of the plant should incorporate TRM ?Total !uality management@, particularly

in all departments of production to ensure $etter sales and reduce the inventory of finished

products.

roper storage facilities are recommended to prevent loss of inventory due to the lac" of it or

faulty methods of storage.

To maintain the special pricing to dispose off unusually slow moving items.

More effective e4ercise should $e followed of vigilance against im$alance of raw material and

wor" in progress which tends to limit the utility of stoc"s.

The time to updating of issuing and receiving is to $e done.

The inventories should not $e mi4ed or scattered.

craps should not stored with the inventory in the store, which occupies the space of inventory

and increases the tas" of managing the inventory

#on1/usion0


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The result of my studies and surveys conducted, revealed that all the o$jectives of the project

have $een fulfilled. The analysis of the data collected has shown that the overall performance in respect

to utili)ation of inventories is satisfactory during the study period. After studying the inventory

management of Numaligarh refinery and $y seeing the last five year*s performance and records it hasresulted that refinery has sufficient inventory system due to which they have a good wor"ing status.

The study has its own importance in its own way. Jith the help of this study one can "now a$out

the e4istence and survival and success of N'( and efforts! an" relate" to the topic i#e#

IN


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Pandey I 0 Finan!ial Mana"mn$1Nin$, E&i$ion0 Vi2a( %#li(,in" Ho#(03445

• ;othari, #'R .: R(ar!, M$,o&olo"y1 M$,o& an& T!,ni6#(0 S!on& E&i$ion0 Jishwa

ra"ashan, New #elhi, 1221

• "ain P ;0 Mana"mn$ A!!o#n$in" , Ta$a M!Gra'1Hill %#li(,in" Company Limi$&03443

• Piase1


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=%ESI"NNAIRE

#ear ir6Madam,

+n partial fulfillment of the re!uirement of the B.Com 3rdyear course from Golaghat Commerce College,

under #i$rugarh %niversity, the project titled


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' Do you agree that there shou/d be an Inventory anagement ystem in p/a1e in any

organiation1ompanya@ Agree $@ #isagree c@ #o not "now6cant say

' For 7hat reasons do you 5ee/ that there shou/d be an Inventory anagement ystema@ To smoothen operational re!uirement

$@ To save time

c@ To maintain accounta$ility and transparencyd@ >ther reasons

e@ #o not "now6cant say

G' Do you agree that the inventory management system in your 1ompany has 5u/5i//ed the

needs 5or 7hi1h it 7as evo/veda@ trongly agree

$@ Agreec@ #isagree

d@ trongly disagreee@ #o not "now6cant say

C' .hat a11ording to you is the ma8or bene5it o5 going 5or an Inventory anagement systemby your 1ompany

a@ +t has made storage and retrieval of material easier $@ +mproved ales =ffectiveness

c@ 'educed >perational Cost

d@ >ther Benefitse@ #o not "now6cant say

' Do you have s c@ #o not "now6cant say

M' .hat 1ategories o5 pro5essiona/s are managing the inventory system o5 your 1ompany

a@ "illed and trained

$@ >nly s"illed $ut not trained

c@ Non s"illed $ut trained professionalsd@ Non s"illed and non trained professionals

e@ >thers

K' Do you agree that your 1ompany gives more emphasis on so5t7are than s


79/79

$@ Agree

c@ #isagree

d@ trongly disagreee@ #o not "now6cant say

43' Do you thin< that the so5t7are used by your 1ompany is a11ording to the needs or designo5 the system

a@ = $@ N> c@ #o not "now6cant say

44' .hat is the prime 1ha//enge be5ore your 1ompany 7ith regard to inventory management

a@ (ac" of trained professionals

$@ Maintenance cost

c@ Changing re!uirements of customers

d@

>ther pro$lemse@ #o not "now6cant say

42' .hat is the 5uture o5 inventory management system in your 1ompany

a@ Jill continue as a successful mechanism $@ May change according to time

c@ hall collapse

d@ #o not "now6cant say

DATE''' I)NATURE

Documents

Real Project Nidhifinal (1) (Repaired)