Final - A Study On Inventory Management in Chettinad Cement Corporation Limited

A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD CEMENT
CORPORATION LIMITED, KARUR
CHAPTER-I
INRODUCTION
1.1 ABOUT THE STUDY
Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is recurred at different locations within a facility or within
multiple locations of a supply or network to protect the regular and planned course of production
against the random disturbance of running out of materials or goods. The scope of Inventory
management also concerns the fine lines between replenishment lead time, carrying costs of
inventory, asset management, Inventory forecasting, physical inventory, available physical space
for Inventory, quality management, returns and defective goods and demand and forecasting.
TYPES OF INVENTORY
Normally the inventory has divided into two types. These,
 Merchandising inventory,
 Manufacturing inventory.
The manufacturing inventory has been subdivided into three types. These,
 Raw materials,
 Work in process,
 Finished goods.
 Raw materials: Everything the crafter buys to make the product is classified as raw
materials. That includes leather, dyes, snaps and grommets. The raw material inventory
only includes items that have not yet been put into the production process.
 Work in process: This includes all the leather raw materials that are in various stages of
development. For the leather crafting business, it would include leather pieces cut and in
the process of being sewn together and the leather belts and purse etc. that are partially
constructed.
 In addition to the raw materials, the work in process inventory includes the cost of the
labor directly doing the work and manufacturing overhead. Manufacturing overhead is a
catchall phrase for any other expenses the leather crafting business has that indirectly
relate to making the products. A good example is depreciation of leather making fixed
assets.
 Finished goods: When the leather items are completely ready to sell at craft shows or
other venues, they are finished goods. The finished goods inventory also consists of the
cost of raw materials, labor and manufacturing overhead, now for the entire product
1.2 SCOPE OF THE STUDY
 The study helps the management to improve its profitability through a reduction
in non- moving inventory.
 It develops the policies for both continuous review of inventory management
system.
 The study helps to show the level of the inventory in the organization. The
company will make the proper inventory methods from the suggestions of the
study.
1.3 STATEMENT OF THE PROBLEM
There are a number of problems that can cause havoc with inventory management. Some
happen more frequently than others. Here are some of the more common problems with
inventory systems.
Unqualified employees in charge of inventory, Using a measure of performance for their

business that is too narrow, Not identifying shortages ahead of time, Bottlenecks and weak points
can interfere with on-time product delivery, Too much distressed stock in inventory, Excessive
inventory in stock and unable to move it quickly enough, Computer assessment of inventory
items for sale is inaccurate, Computer inventory systems are too complicated, Items in-stock gets
misplaced, Not keeping up with the rising price of raw materials.
1.4 OBJECTIVES OF THE STUDY
 To analyze the inventory those are sufficient to perform production and sales
activities smoothly.
 To study the inventory management followed in chettinad cement.
 To identify the existing inventory management and its effectiveness.
 To calculate analysis for their performance in inventory management.
1.5 RESEARCH METHODOLOGY
RESEARCH DESIGN
The Descriptive type of research has been applied in the study. This research the
researcher has no control over the variables. Only reports what has happened or what is
happening. The research can only discover causes but cannot control the variables.
DATA COLLECTION
This study purely based on secondary sources of information. The necessary data
calculated from annual report, books, journals and websites.
PERIOD OF STUDY
This study covers a period of five years from 2011-2016. The accounting year
commenced from April and ending with March of the next year.
AREA OF STUDY
This study was conducted in CHETTINAD CEMENT CORPORATION LIMITED,

PULIYUR, and KARUR DISTRICT
TOOLS FOR ANALYSIS
The following tools have been applied in the present study. They are listed below
 Ration analysis (inventory) and

 EOQ analysis
RATIO ANALYSIS (INVENTORY)
The percentage of a mutual fund or other investment vehicle's holdings that have
been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its
investment objective and/or the portfolio manager's investing style will play an important role in
determining its turnover ratio.
ECONOMIC ORDER QUANTITY (EOQ)
Economic order quantity is that level of inventory that minimizes the total of inventory
holding cost and ordering cost. The framework used to determine this order quantity is also
known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most
economical quantity of a product that should be purchased at one time. The EOQ is based on all
associated costs for ordering and maintaining the product. EOQ refers to the size of the order
which gives maximum economy in punches of materials.
2 Ao
EOQ = √
C1
Where
A = Annual usage in unit
O = Ordering cost
C1 = Carriying cos
CHAPTER-II
INDUSTRY AND COMPANY PROFILE
2.1 INDUSTRY PROFILE
History of the origin of cement
It is uncertain where it was first discovered that a combination of hydrate non-hydraulic

lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixture was
first used on large scale by roman engineers. They used both natural pozzolans (trass or pumice)
and artificial pozzolans (ground brick or pottery) in the concretes. Many excellent examples of
structures made from these concretes are still standing. Notably the huge monolithic dome of the
pantheon in Rome and the massive Bath of Caracalla. The vast system of roman aqueducts also
made extensive use of hydraulic cement. The use of structural concrete disappeared in medieval
Europe. Although weak pozzolanic concretes continued to be used as a core fills in stone walls
and columns.
Modern cement
Modern hydraulic cement began to be developed from the start of the industrial Revolution
(around 1800) ,driven by three main needs: Hydraulic renders for finishing brick buildings in wet
climates Hydraulic mortars for masonry construction of harbor works etc , in contact with sea
water.
Varieties of the cement
There are some varieties in cement that always find good demand in the market. To
known their characteristics and in which area they are most required, it will be better to take a
look at some of the details given below.
Portland blast furnace slag cement (PBFSC)
The rate of hydration heat is found lower in this cement type in comparison to PPC. It is
most useful in massive construction projects, for example-dams.
Sulphate resisting Portland Cement (SRPC)
This cement is beneficial in the areas where concrete has an exposure to seacoast or sea
water or soil or ground water. Under any such instances, the concrete is vulnerable to sulphates
attack in large amounts and can damage to the structure. Hence, by using this cement one can
reduce the impact of damage to the structure. This cement has high these cement one can reduce
the impact of damage to the structure. This cement has high demand in India.
Rapid hardening Portland Cement (RHPC)
The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC and
possesses immense compressible strength, which makes casting work easy.
Ordinary Portland cement (OPC)
Also referred to as grey cement or OPC, it is of much use in ordinary concrete

construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium (MgO),
Silica (SiO2), and Sulphur, trioxide (SO3) components are used.
Portland Pozolona Cement (PPC)
As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The
rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used in
the production of this category of cement. It can be availed at low cost in comparison to OPC.
Oil Well Cement (OWC)
Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing or
fixing oil wells. This is applied on both the off-shore and on-shore of the wells.
Clinker Cement (CC)
Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is
needed in the construction work of complexes, houses and bridges. The ingredients for this
cement comprise iron, quartz, clay, limestone and bauxite.
A part from these, some of the other types of cement that are available in India can be
classified as:
 Low heat cement,

 High early strength cement,
 Hydrophobic cement,
 High aluminum cement and
 Masonry cement.
2.1.1 Cement Industry in Global
Cement is a basic ingredient for the construction industry. It is estimated there are 1500
integrated cement production plants in the world. Although the players such a Lafarge or
CEMEX, the share of the four largest firms account only for 23% of the overall demand.
Demand
World cement demand was 2,283MT in 2005, with China accounting for 1,064MT (47%
of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase its
demand by 250MT during the period, an increase higher than the total yearly European demand
The Demand of Cement
Demand for cement in MT 2005 2010 Growth rate
North America 170 200 2.9%
Western Europe 208 236 2.2%
Asia/Pacific 1500 1900 5.2%
Other regions 405 500 4.7%
World cement demand 2283 2836 4.7%
Top 25 Cement companies in the world
S.NO Name of the Company Name of the

Country
1. Aditya Birla Group-Grasim India
2. Al-Ghurair Group Dubai
3. Ambuja Cements Limited India
4. Anhui Conch Cement Company China
5. Arabian Cement Company Egypt
6. Ararat Cement Co. South Africa
7. Cement Cruz Ault Cement Co. Armenia
8. CEMEX Co. U.S.A
9. China National Cement Materials Group Corporation China
10. Camper Cement corp. China
11. CompanhiaSiderurgical National S.A Brazil
12. Concrete Casting Cement Company Pacific Alloy
13. CRH plc America
14. Eagle Materials Inc U.S.A
15. Heidelberg Cement Company Germany
16. James Hardie Cements U.S.A
17. Lafarge India
18. Libyan Cement Company Libya
19. Monarch Cement Ltd. U.S.A, California
20. Norcem Germany
21. Pretoria Portland Cement Company South Africa
22. Ready Mix Inc India
23. Rinker Group Australia
24. Semapa Group Europe
25. Smith-Midland Cement Company U.S.A, Milford
CEMENT INDUSTRY IN INDIA
2.1.2 Cement Industry in India
The cement industry in India has undergone a major shift over the last 6 years. The
Indian cement industry is the second largest producer of quality cement. Indian cement industry
is engaged in the production of several varieties of cement such as, ordinary Portland cement
(OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland cement
(PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc,. They are produce
strictly as per the Bureau of Indian standards (BIS) specifications and their quality is comparable
with the best in the world.
The industry occupies an important place in the national economy because of its strong
linkage to other sectors such as, construction, transportation, coal and power. The cement
industry is also one of the major contributors to the exchequer by way of indirect taxes.
S.NO Name of the company Details of the company
Year of establishment 1994

1. ACC Limited Head quarters Maharashtra
Web site www.acclimited.com
2. Ambuja Cements Limited Head quarters Gujarat
Web site www.ambujacement.com
3. Andhra Cements Ltd Head quarters Andhra Pradesh
Web site www.andhracements.com
4. Barak Valley Cements Ltd Head quarters Assam
Web site www.barakcement.com
5. Bema Cements Ltd Head quarters Andhra Pradesh
Web site www.bheemacement.com
6. Binani Cement Ltd Head quarters West Bengal
Web site www.binani.com
7. Birla Corporation Limited Head quarters West Bengal
Web site www.grasim.com
8. Burnpur Cement Ltd Head quarters West Bengal
Web site www.burnpurcement.com
Chettinad Cement Corporation
9. Head quarters Tamil Nadu
Limited
Web site www.chettinadcement.com
Dalmia Cement (Bharat)
10. Head quarters Tamil Nadu
Limited
Web site www.dalmiacement.com
11. Deccan Cements Ltd Head quarters Andhra Pradesh
Web site www.deccancem.com

12. Everest Industries Ltd Head quarters Maharashtra
Web site www.everestind.com

13. Grasim Industries Limited Head quarters Madhya Pradesh
Web site www.grasim.com

14. Gujarat Sidhee Cement Ltd Head quarters Gujarat
Web site www.gujaratsidhee.com

15. Heidelberg Cement India Ltd Head quarters Karnataka
Web site www.mycemco.com

16. Hyderabad Industries Ltd Head quarters Andhra Pradesh
Web site www.hil.in
Indian Hume Pipe Company
17. Head quarters Maharashtra
Ltd
Web site www.indianhumepipe.com
18. J. K. Cement Limited Head quarters Uttar Pradesh
Web site www.jkcement.com
19. JK Lakshmi Cement Ltd Head quarters Rajasthan
Web site www.jklcem.com
20. Kalyanpur Cements Ltd Head quarters West Bengal
Web site www.kalyancemenet.com
21. Katwa Cements Ltd Head quarters Karnataka
Web site www.katwagroup.com
22. Kesoram Industries Ltd Head quarters West Bengal
Web site www.kesocorp.com

23. Madras Cements Limited Head quarters Tamil Nadu
Web site www.madrascements.com

24. Mangalam Cement Ltd Head quarters Rajasthan
Web site www.mangalamcement.com
25. NCL Industries Ltd Head quarters Andhra Pradesh
Web site www.nclind.com
26. Nirman Cements Ltd Head quarters Bihar
Web site www.nirmancements.com
27. OCL India Ltd Head quarters Orissa
Web site www.ocl.in

Panyam Cements & Mineral
28. Head quarters Andhra Pradesh
Inds Ltd
Web site www.panyamcements.com
29. Prism Cement Ltd Head quarters Andhra Pradesh
Web site www.prismcement.com
30. Rose Zinc Ltd Head quarters Rajasthan
Web site www.rosezinc.com
31. Sagar Cements Ltd Head quarters Andhra Pradesh
Web site www.sagarcements.in

32. Sainik Cement Inds. Ltd Head quarters Delhi
Web site www.sainikcem.in

33. Sanghi Industries Ltd Head quarters Andhra Pradesh
Web site www.sanghicement.com
34. Saurashtra Cement Ltd Head quarters Gujarat
Web site www.saurashtra.com

35. Shiva Cement Ltd Head quarters Orissa
Web site www.shivacement.com
Shree Digvijay Cement
36. Head quarters Gujarat
Company Ltd
Web site www.digvijaycement.com

Head quarters Andhra Pradesh
37. Somani Cement Company Ltd
Web site www.anjanicement.com

38. Sri VasaviInds. Ltd Head quarters Andhra Pradesh
Web site www.srivasavi.com

39. Sri Chakra Cements Ltd Head quarters Andhra Pradesh
Web site www.chakracement.com
40. Stresscrete India Ltd Head quarters Maharashtra
Web site www.stresscrete.com
41. The India cements Ltd Head quarters Tamil Nadu
Web site www.ramcocement.in
42. Udaipur Cement Works Ltd Head quarters Rajasthan
Web site www.udaipurcement.com
43. UltraTech Cement Limited Head quarters Maharashtra
Web site www.ultratechcement.com
44. Vinaycements Ltd
Head quarters Assam
Web site www.vinaycements.com

45. Visaka industries Ltd Head quarters Andhra Pradesh
Web site www.visaka.org
46. Zuari cement corporation Ltd Head quarters Andhra Pradesh
Web site www.zuaricement.com
2.1.3 Cement Industry in Tamilnadu
The cement industry of India hopes the most in Tamilnadu. The Tamilnadu is the state
which has produces the quality cement in India.
The Tamilnadu government was formed a company name is “Tamilnadu cement

corporation limited (TANCEM) in the February 1976 as public limited company. The TANCEM
was formed two cement plants in Tamilnadu. These,
1. Alangulam cement works. Alangulam, virudhunagar districts.

2. Ariylur cement works. Ariyalur, perambalur districts.
The following table shows the details of cement companies in districts of Tamilnadu. These,
S.No Name of the company Details
Year of
1962
establishment
Chettinad Cement Corporation Corporate office Chennai

1
Limited
Karur, Dhindukal,
Plant Places
Ariyalur
Brand name Chettinad.
Year of
1946
establishment
Corporate office Chennai.

2 The India cements Ltd
Ramanathapuram,
Plant Places
Sangakiri, Ariyalur.
Sankar cement,
Brand name
Coromandel cement.
Year of
1950
establishment
3 Madras cement Ltd
Corporate office Chennai.

Plant place Ariyalur.
Brand name Ram co cement.
Year of
1979
establishment
Corporate office Chennai (Govt).

Tamilnadu cements corporation
4
Ltd
Plant place Ariyalur.
Brand name Arasu cement
Year of
1976
establishment
Corporate office Madurai.

5 Janathacem industries limited
Plant place Rajapalayam, madurai.
Janatha cement, agsar
Brand name
cement.
2.1.4 Cement Company in Karur District
Chettinad Cement Corporation limited, karur is the one of most popular cement
manufacturer in Tamilnadu. The Chettinad cement work plants other than karur district,
1. Karikalini cement works, Dhindukal district,

2. Ariyalur cement works, Ariyalur district,
The Chettinad cement corporation limited, Karur is the head company in Chettinad cement
companies. They are produced 5,00,000 tons of cement per year. They are used those cement for
their own company use such as,
1. Chettinad builders pvt ltd,
2. Chettinad house pvt ltd,
3. Chettinad group of companies.
2.2 COMPANY PROFILE
HISTORY OF THE COMPANY
The history of the group house of chettinad is linked with the 9 decades old saga. In
1912 took birth the House of Chettinad through a visionary idealist, born entrepreneur Dr. Rajah
Sir Annamalai Chettiar who believed in Social Transformation through business. The founder of
the House of Chettinad envisioned, his companies providing the stimulus for Industrial Growth
and conceived business as a means of improving the living standards of people.
The corporate credo of the House of Chettinad “STRIVE, SAVE AND SERVE” is the
very thought of our founder. IN order to continue fulfilling his dreams and aspirations. To reach
greater heights and the reins were taken over by equally visionary businessmen his son, Dr.
Rajah Sir MuthiahChettiar and grandson Dr. MAM. Ramaswamy. The house of
Chettinadreached new heights with generations of hard work, dedications and remains the stamp
of quality, integrity and reliability under the versatile, pragmatic and visionary leaderships.
Present position of the company
Today, a 8500 million business group has ventured and diversified in varying fields
including manufacturing (Cement, Silica, Quartz, Grits), services (construction Transports, Steel
fabrication, Ship management and stevedoring. Clearing and forwarding) Trading, power
generation, plantation, farms, logistics. Education, sports management, literature, art and music
fields have also been contributed vastly. It is a matter of great pride and satisfaction that the
group finds worldwide patronage and earns precious foreign exchange for the country.
The group aims to broaden its horizons and reach and the zenith in this millennium under
the yond, dynamic, enthusiastic, able leadership of Mr. MAMR Muthiah. The future of the
companies in the house of chettinad is based on the time tested and proved guidelines of total
customer orientation, technology in the service of man and business as an instrument of social
service. To these timeless truths, we remain stead fast forever.
Management of Chettinad Cement Corporation Limited
 Chairman : MR.M.A.M.RAMASWAMY
 MD : SRI.M.A.M.R.MUTHAIAH
 Started : 1962
 Directors : SRI.RAMANATHAN PALANIAPPAN
 SRI.R.KRISHNA MOORTHY
 SRI.SP.S.T.PALANIAPPAN
 SRI.K.GANAPATHY&C.S.PARI
 DR.T.PRABHAKARA RAO, IAS (TIIC
NOMINEE)
 Company secretary : SRI.S.HARIHARAN
 Type : public
 Co-secretary : SRI.S.HARIHARAN
 Auditors : M/S.P.B.VIJAYARAGRAN&CO
 M/S V.SOUNDARARAJAN&CO
 M/S KRISHAAN &CO
 Registered office : chettinad cement corporation ltd,
5thfloor,raniseethaihall,
603annasalai,Chennai-600006.
Telephoneno: +91-44-28292727
fax no : +91-44-28291594
e-mail : chtdmds@vsnl.com
 Production plants : puliyur, karikkali, ariyalore.
 Website : www.chettinad.com
VISION
With almost a century of continuous growth and prosperity behind us we envisage our
future as another opportunity to which greater heights and to perfect the art of perfectionism
upholding the vision of our founder Dr. Rajah sir AnnamalaiChettiar STRIVE, SAVE AND
SERVE. The nature ethics and style of business believe that nothing can supplement the idealism
which motivates the business we fall back on the time tested. Principles of total customer’s
orientation technology in service of man and business as an instrument of social service to this
timeless truth we remind steady fast forever
MISSION
To achieve & sustain cost leadership in the cement market. The harness technology to its
full potential in a safe & clear environment in the entire business cycle & integrate quality with
continuous improvement. To became a vibrant learning organization by building skills and
competitiveness of employees for growth. To be the best and most respectable corporate citizen.
PRODUCT PROFILE OF CHETTINAD CEMENT CORPORATION LTD.
 Pavithram: Unique cement manufactured at Puliyur works having high quality for
special concrete applications.
 Chettinad Grade 53: Superior finely ground cement, suitable for plastering works,
giving a silky finished look. For RCC applications laser controlled manufacturing would
yield best result.
 Chettinad Grade 43: Multipurpose cement, suitable for plastering and binding.
 Chettinad PPC: A finely blended cement, providing very fine result for plastering work,
devoid of hair line cracks and giving excellent appearance to the building.
 Sulphur Resistant Cement: Finds applications in the construction activity in the coastal
areas to save from corrosiveness due to salty environment.
MANUFACTURING DETAILS
 Mines-Puliyur Works
Limestone is sourced from our mines at palayam which is located 40kms from the
factory. The mines are equipped with the latest machinery and technology
including for sequential blasting. The mined limestone is then crushed through
primary and secondary crusher.
 Mines-Karikkali works
Limestone Mines are located at about 3 kms. from the factory. The mines are fully
mechanized and have also a terminator for mechanized breaking of individual
boulders. The Crusher is located at Mines and crushed limestone is transported by
long belt conveyors to factory.
 Stacker and Reclaimer-Puliyur Works
The crushed limestone is then sent through the X-Ray analyzer and approved for
further process only on meeting quality standards backbone of the quality control
 Stacker and Recamier- Karikkali works
The entire quantity of crushed limestone passes through the online cross belt
analyzers’ and is stacked at the pile in the factory. Three numbers of separate
stacker-reclaimed are available with truck tipplers for proper stacking and
Reclaiming of corrective raw materials, fuels and additives. Stacker Recliners help to achieve
high degree of stacking and ensure maximum level of consistency for the input materials to raw
mill, coal mill and cement mill.
Raw Mill-Player Works

The limestone from the reclaimed is mixed with additive of bauxite and Iron ore and
transported to the vertical roller mill through weigh feeders (which control the additive addition).
The operator takes corrective steps on viewing any deviation. The loesche-German make vertical
roller mill is similar in principle to the tilting grinder with gigantic roller and operated by the
hydraulic system, to give fine blended raw material. From the loesche mill the raw material is the
taken to two silos to produce Varity of cement.
Raw Mill- Karikkali works

Pre-stacked limestone of stockpile is ground in the VRM along with corrective materials
with required ratios are made to produce raw meal and that is stored in Blending cum Storage
Silo. There are separate hoppers with weigh feeders for continuous and regulated addition of
each raw material. The mix passes through the cross belt analyzers which analyze the mix
chemistry and solve the mix ratio every minute to have very good consistency in the raw mix.
 Kiln-Puliyur Works
The finely grounded blended raw material is sent to a five stage kiln. Kiln is a key
process in the manufacture of cement where the calcinations & chemical reaction take place.
Coal fired burner (Controlled through latest solid & low feeder) is used to heat the air to 1400°c
and is fed from one end of the kiln. The data accusation and control center meticulously monitor
the entire process including the temperature.
 Kiln- Karikkali works

Raw meal extracted from silo is fed to the kiln where it is sintered at about 1400o C to
clinker. This process is called preprocessing which consists of a five stage suspension heaters
with precalciner, the kiln and the clinker cooler. Clinker cooler with CIS and CFG for maximum
heat recuperation and the cooled clinker is transported to a storage silo.
Cement Mill-Puliyur Works
The clinker is then ground, depending upon the grade, the additive is added. For all
grades of cement 5% gypsum is added to control setting of cement we use Japanese technology
in fine grinding with vertical roller mill from anode Kobe, Japan, laser practical size analyzer
 Cement Mill- Karikkali works

Finally, grinding is done in OK Vertical Roller Mill for optical particle size distribution
and less power consumption with excellent ease of operation for feeding, grinding and
classification. To maintain quality of various types/grades of cement, there are separate hoppers
with weigh feeders for the addition of fly ash, gypsum, etc. Quality of final product is monitored
and controlled every hour by testing samples in the XRF analyzer. Final products are stored in
cement silos.
 Packing House - Puliyur woks

The four automatic packing machines have been installed; together they have the capacity
to deliver 4800 tons per day of packed cement. These packing equipments are very accurate and
any fault can be rectified as each bag is verified before the next is filled. These are also cross-
checked by the Electronic weighing scale used to note the load carried by the Lorries.
 Packing House - Karikkali works

There are 2 nos. of Electronic Rot packer which automatically packs cement in bags, each
with a capacity of 150 tons/hour. Packed cement is loaded into trucks/wagons with automatic
loading machines
ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.
S. No AWARDS YEAR
National Safety Award (for outstanding performance in Industrial 1976
1 Safety in achieving lowest frequency rate in Industry)
Runners up Highest % reduction in frequency rate 1977
2 Merit Awards from Regional Directorate of Workers Education 1972
3 Tamil Nadu Film Arts Association, Chennai Shield 1978
National Productivity Award (Best Productivity Performance in
Cement Industry issued by NPC) 1985
Second Best 1986

4 1995
Best
Best 1996
Second Best 1997
National Safety Award (Mines)-(for lowest injury frequency rate Metal

Mines Mechanized Open Cast).
1986
5 Longest Accident Free Period.
1986
Best performance of the year.
1989
Conservationist of the year (for outstanding progress in the field of

6
Conservation of Energy, Metal Components & Machinery) 1987
NCBM National Awards (Improvement in Energy Performance).
Second Best 1994
7
Best 1995
Best 1998
TNEB Energy Conservation Award - (One among the 15 Energy
8
Efficient H.T. Industries of 2000 KVA) 1998
NCBM National Award
9
Second Best for Energy Efficiency Performance 1998
MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED
Sl. No. MILESTONES YEAR
0.4 MTPA cement production capacity with wet process plant

1 1967
installed at Puliyur.
Modernized into dry process plant to a capacity of 0.8 MTPA with a

2 kiln capacity of 2000 TPD commissioned with modern vertical roller 1989
mills for fuel & limestone grinding.
3 2 Nos. of 5.4 MVA Capacity WARTSILA DG set installed. 1990
66 Nos. of wind electric Generator of total capacity 17.3 Mw installed

4 1994
at PoolavadiUdumapletTaluk.
5 ISO – 9002 Certificate received. 1995
6 Stacker & Re-claimer for Limestone installed. 1996
7 Belt Elevator for Raw mill and Kiln feed installed. 1996
A) Impact Crusher for lime stone crushing at mines installed.

8 1997
B) Bag filter for coal mill grinding system.
Vertical roller mill for cement grinding installed. Additional ESP

9 1998
installed for Kiln/ Raw mill to handle excess process gases.
CIS/CFG Cooler installed. Low pressure cyclone installed.

10 Latest Technology LV-Tech classifier installed in Raw Mill. The 2000
plant capacity increased to 1.2 MTPA cement.
Green field Cement plant with capacity of 0.9 MTPA was

11 2001
commissioned at Karikkali.
12 Rock breaker (Terminator) installed in mines. 2001
13 ISO 14001:2004 is implemented. 2003
14 Environment Management Service Certificate option. 2004
1 No. 15MW Coal based Captive Power Plant commissioned in 12

15 2004
Months at Karikkali.
16 Fly Ash Silo construction work completed at Puliyur and Karikkali. 2005
Roller press with ball mill for cement grinding with capacity 0.7
17
MTPA installed at Karikkali. 2006
Vertical roller mill for cement grinding installed. Additional ESP

18 2006
installed for Kiln/ Raw mill to handle excess process gases.
Karikkali plant capacity increased to 2.0 MTPA by increasing of

19 2007
blended cement production.
Bag House installed in Raw Mill/Kiln Circuit in addition to the

20 2007
existing ESP at Puliyur.
Energy dispersive X-Ray spec to meter was put into service for
21 increasing the output and economical mines operation & conservation 2007
of minerals.
Advance Research laboratories, Switzerland make X-Ray

22 Spectrometer – Sequential type was commissioned for augmenting 2007
clinker production and its quality.
Seethainagar Mines crusher capacity was upgraded for supply of 40%

23 2007
Karikkali plant requirement of limestone.
Coal based 15 MW capacity CPP was commissioned during Feb-

24 2008
2008 at Puliyur Works.
Automation & control sections PLC's OS software up gradation and

25 2008
PLC's capacity.
KHD make Burner Management System for kiln operation to

26 2008
improve quality of clinker and to save thermal energy.
Coal based 2 x 15 MW capacity CPP was commissioned during Sep-

27 2008
2008 at Ariyalur.
Green field Cement plant with capacity 2.75 MTPA was

28 2008
commissioned during Dec-2008 at Ariyalur.
Video conferencing facility was commissioned between Puliyur,
29 Karikkali, Ariyalur and Head Office for more effective and faster 2008
communications and project monitoring.
Brown field Cement plant with capacity 2.75 MTPA

30 2009
was commissioned at Ariyalur during October-2009.
Coal based 1 x 15 MW capacity CPP was commissioned during Jan-

2010 Erection and Commissioning of 2 Cement Plants in World
Record time at ariyalur – 30 months from BhoomiPooja to
31 commissioning highest production capacity for cement in a single 2010
location at Ariyalur Three No. 15 MW coal based captive power
plants commissioned in 18 months at AriyalurChettinad Cement
Technical team rated No1 by FLS Denmark at Ariyalur.
Roller press with ball mill for cement grinding with capacity 0.5
32 2010
million commissioned during February -2010 at Puliyur.
Brown field Cement Plant with capacity of 2.5 MTPA was

33 commissioned at Karikkali in March 2011 along with coal based 2011
30MW captive power plant within the same premises
Work is under progress for a new Green field production line of 2.5
MTPA cement with 1 No. of 30MW Coal based captive power
34 2011
plant in Kallur Village, ChincholiTaluk and GulburgaDist of
Karnataka state and expected to be commissioned in year 2012.
CHAPTER-III
REVIEW OF LITERATURE
REVIEW OF LITERATURE
Bharathipathak 1991 The bulk of the banking business in the country is in the public sector
comprising the state bank of India and its seven associated banks and twenty nationalized
commercial banks till 1991, the Indian banking industry was operating in a highly regulated and
protected regime. But with the acceptance of Norseman committee recommendation, competition
has been injected into the banking industry in two forms.
The study has been found that HDFC Bank emerged as a leader in this financial analysis
of the year ended 2000-01. It closest competitor was ICICI Bank. Financial performance of the
other three, no doubt, lagged behind them, but it by no means, depressing. These Bank
obviously, have to focus more improving parameters like credit quality and cost control for the
emerge as the top performance.
R. Hamsalakshmi-M.Manicham 2000 “The study, it has been found the liquidity position and
working capital positions were favorable and good during period of study. Regarding turnover
ratio, efficiency in management of fixed assets and total assets must be increased. Regarding
return on investment and return on equity was proved that the overall profitability position of the
software companies had been increasing at a moderate way.
DrR.Dharmaraj 2003 ”The study iatrical “positing in Indian management industry ’’ have
concluded that for the last five year, there has been proliferation of international and domestic
providence of mutual funds. He says that this increased growth is due to the increasing cash
flows among innovative young companies through India.
Dr Harish kumar2008 A capital adequacy ratio was constant over a period of time. During the
study period. It was observed that the return on net worth had negative correlation with the debt
equity ratio. Inters income to working funds also had a negative association with interest
coverage ratio and the non performing to net advance was negatively correlated with interest
coverage ratio.
J R Raiyani2009 During the periods of high inflation depending on conventional accounting

wisdom. May results in firm’s financial information losing its meaning and creation of
unrealistic expectation among information users.
Dr.KavithaChavvali 2009 Inventory analysis of gold exchange trade funds. Mathew T.Jones
and Maurice ousted (2007) revised and evaluated pre world war ii current date for countries by
treating gold follows on a continuous basis. The historical data of saving and investment was
taken over a time period of 1850- 1945.
N.Prasanna 2009 Stock performance Aitkin 1997 the external effect foreign direct investment
on export with example of Bangladesh where entry of a koala multinational in garment exports
led establishment of a member of domestic export firms creating the country’s largest export
industry.
Awedh2005 defend that inflator does not have really an effect on the profitability measured by
return on equity of foreign banks exerting in Lebanon. In the same way, the author steers that the
level of inflation affect more than the return on assets of Lebanese bank than foreign banks in
Lebanon.
DrSushilkumar Mehta 2010The financial performance mutual funds schemes. Jayden (1996)
attempted of evaluate the performance of two growth oriented mutual funds on the basis of
monthly return. It was found that master gain performed better according to Jensen and trey nor
measures and basis of sharps ratio.
Monika uppal 2010Financial performance factors a survey of the literature shows that the
foreign bank performance is affected by factors like the economic and financial environment.
Among these factors one can equate the growth rate of gross domestic product, monetary market
rate, inflation rate and foreign exchange rate. (Williams 1998).
CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
TABLE - 4.1.1
LEVEL OF INVENTORY
Qty in thousand tones
S.No Particulars 2011-12 2012-13 2013-14 2014-15 2015-16
Raw materials
Lime stone 3330.80 5169.86 8392.21 11109.76 11265.50
(stacker 60 Per cent)
1 Iron ore
1387.83 2154.11 3496.76 4629.10 4693.96
Clay ash
(stacker 15 Per cent) 832.70 1292.47 2098.05 2777.44 2816.40
TOTAL(clinker) 5551.33 8616.44 13937.02 18516.26 18775.86
2 Work in process 5386.48 8451.74 13822.02 18351.46 18611.09
3 Finished goods 6251.55 9316.59 14522.32 19216.54 19416.11
Total 17189.36 26384.77 42331.36 56084.26 56803.06

INTERPRETATION
The inventory level was found to be increased trend from 2011-2012 to 2015-2016. The
overall inventory level position for the five years is satisfactory.
CHART - 4.1.1
LEVEL OF INVENTORY
100%
90%
80%
70%
60%
50%
40% 2015-16
30%
20%
10% 2014-15
0%
2013-14
Iron ore
Clay ash
TOTAL(clinker)
Raw materials
Work in process
Finished goods
Total
Lime stone
2012-13
2011-12
1 2 3
INVENTORY TURNOVER RARIO
. The inventory turnover ratio measures the number of times a company sells its inventory
during the year.
Costofsales
Inventoryturnoverratio =
Averagestock
Costofsales = sales − Grossprofit
Opening stock + Closing stock

Average stock =
2
TABLE - 4.1.2
INVENTORY TURNOVER RARIO
Cost of goods sold

S.No Year Average stock (in tones) Inventory turnover ratio
(`in lakhs)
1 2011-12 2663028 487428 5.46
2 2012-13 2844494 503184 5.65
3 2013-14 3094850 819401.5 3.78
4 2014-15 4010580 945491.5 4.24
5 2015-16 4521886 822538.5 5.50
Source: Annual reports of Chettinad Cement Corporation Limited

INTERPRETATION
The inventory turnover ratio was high in the year 2012-2013 after that 2013-2014 the
inventory turnover ratio was decreased. The present value of inventory turnover ratio is good.
CHART - 4.1.2
INVENTORY TURNOVER RATIO
6000000
5000000
4000000 Inventory turnover ratio
3000000
Average stock (in tones)
2000000
Cost of goods sold
1000000 (`in lakhs)
0
INVENTORY CONVERSION PERIOD
The inventory conversion period is the time required to obtain materials for a product,
manufactured it, sell it.
No. of days in the year

Inventory conversion period =
Inventory turnover ratio
TABLE – 4.1.3
Inventory conversion
S.No Year No. of days Inventory turnover ratio
period (in days)
1 2011-12 365 5.46 66
2 2012-13 366 5.65 64
3 2013-14 365 3.78 96
4 2014-15 365 4.24 86
5 2015-16 365 5.50 65
Source: Annual reports of Chettinad Cement Corporation Limited
INTERPRETATION
The inventory conversion period is normally indicates the wealth of the company. The
company wants to concentrates with its inventory conversion period.
CHART – 4.1.3
500
450
400
350 Inventory conversion
300 period (in days)
250
Inventory turnover ratio
200
150
No. of days
100
50
0
ANALYSIS PART-2
EOQ ANALYSIS
TABLE-4.2.1
EOQ ANALYSIS FOR THE YEAR 2011-12
Total Total Saving

Annual
Item O C P EOQ investment investment inventory
requirement
with EOQ without EOQ cost
Iron Ore 31500 36 1.5 65 1230 81794 138615 56821
Lime Stones 15000 40 1.25 144 980 142345 145225 2880
Clay Ash 14000 42 2 144 767 111982 135915 23933
34.
Sulphur 13000 1.75 153 716 110801 133927 23136
5
Gypsum 13500 35 1.25 144 869 126223 130688 4465
36.
Bauxite 11500 1.5 150 748 113322 116173 2851
5
Source: Annual report of Chettinad Cement Corporation Limited
INTERPRETATION
The company’s annual requirement for the year 2011-12 is 101000 tons of raw materials. They
using investment with EOQ spent ` 787168. When the same in without investing EOQ is `
882551. So the company saved ` 169432 in the year 2011-12.
CHART-4.2.
900000
800000
700000
600000
500000
400000 Bauxite
Gypsum
300000
Sulphur
200000
Clay Ash
100000 Lime Stones
Iron Ore
0
TABLE-4.2.2
Total
Annual Total
investment Saving
Item requiremen O C P EOQ investment
without inventory cost
t with EOQ
EOQ
Iron Ore 33500 35 1.5 75 1250 95626 169675 74049
Lime Stones 13500 41 2 154 744 116064 140115 24051
Clay Ash 16500 55 1.55 154 1100 171050 171050 0
Sulphur 14000 35 1.5 163 808 132916 153304 20388
Gypsum 12500 36 2 154 671 104676 153304 20388
Bauxite 11000 37 2.5 160 571 92787 118752 25965
INTERPRETATION
The company’s annual requirement for the year 2012-13 is 103700 tons of raw materials.
They using investment with EOQ spent ` 590000. When the same in without investing EOQ is
` 921215. So the company saved ` 195739 in the year 2012-13.
CHART-4.2.3
100%
90%
80%
70%
60%
50%
40% Bauxite
Gypsum
30%
Sulphur
20%
Clay Ash
10%
Lime Stones
0% Iron Ore
TABLE-4.2.3
Total
Annual Total Saving
investment
Item requiremen O C P EOQ investment inventory
without
t with EOQ cost
EOQ
Iron Ore 13500 34 1.5 65 1260 83789 153905 7046
Lime Stones 13500 36 1.5 167 805 135642 151515 15873
Clay Ash 15000 38 1.75 165 807 134567 166445 13878
Sulphur 14000 37 1.75 164 769 127462 154384 26922
Gypsum 15000 35 2.5 165 648 108540 166775 58235
Bauxite 11200 36.5 1.75 170 684 117476 128191 10715
INTERPRETATION
They using investment with EOQ spent ` 68646. When the same in without investing EOQ is `
800543. So the company saved ` 114076 in the year 2013-14.
CHART-4.2.3
1000000
900000
800000
700000
600000
500000 Bauxite
Gypsum
400000
Sulphur
300000 Clay Ash

Lime Stones
200000 Iron Ore
100000
0
TABLE-4.2.4
Total
Total Saving
Annual investment
Item O C P EOQ investment inventory
requirement without
with EOQ cost
EOQ
Iron Ore 34000 36 1.5 95 1271 123231 217605 94374
Lime Stones 12500 37 1.75 174 727 127770 146226 18456
Clay Ash 14000 40 1.5 175 864 152496 164575 12079
Sulphur 16000 38 1.75 174 834 146575 187161 40586
Gypsum 18000 36 2.75 175 686 121938 212190 90252
Bauxite 17000 37 1 180 1122 203082 205062 1980
They using investment with EOQ spent `875092. When the same in without investing EOQ is
`1132819. So the company saved `2577276 in the year 2014-15.
CHART-4.2.4
1200000
1000000
800000
600000 Bauxite
Gypsum
Sulphur
400000
Clay Ash
Lime Stones
Iron Ore
200000
0
TABLE-4.2.5
Annual Total Total Saving

Item requiremen O C P EOQ investment investment inventory
t with EOQ without EOQ cost
Iron Ore 38000 37 1.75 105 1268 135358 268736 133378
Lime Stones 13500 35 1.25 185 869 161852 167588 5736
Clay Ash 12000 38 3 195 551 109099 157770 48671
Sulphur 15000 40 3.25 185 608 114455 187225 72770
Gypsum 17000 40 1.25 194 1043 203646 221110 17464
Bauxite 18000 39 2.75 200 715 144965 242235 97270
They using investment with EOQ spent ` 869375. When the same in without investing EOQ is
` 1244664. So the company saved ` 375289 in the year 2015-16.
CHART-4.2.5
100%
90%
80%
70%
60%
50% Bauxite
Gypsum
40%
Sulphur
30% Clay Ash
Lime Stones
20%
Iron Ore
10%
0%
CHAPTER-V
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION
5.1 FINDINGS
 In inventory level of the company, the in inventory level has been increased year
by yea. There is no problem in the inventory level of the Chettinad Cement
Corporation Limited.
 In inventory turnover ratio the ratios of the year has been finded as low in the
years of 2013-14 and 2014-15. After those periods the inventory turnover ratio
has slightly increased in the year 2015-16. Even though that level is quite low
when compare with 2012-13.
 In inventory conversion period is finded as good level. Even though they wants to
keep the inventory conversion period as low.
EOQ ANALYSIS
 In EOQ analysis for the year 2012-13 to 2015-16 is good. For this year they
followed EOQ with investment for purchase of goods.
 In EOQ analysis for the year 2014-15 to 2015-16 is good. In this year the EOQ
with investment and EOQ without investment are same.
 In EOQ analysis for the year 2010-11 to 2015-16 is good. All years of EOQ is
followed only investment with EOQ.
5.2 SUGGESTION

 In inventory level of the company shows the increase of the raw materials, work-
in-process and finished goods. The inventory level of Chettinad Cement
Corporation Limited is well.
 In inventory turnover ratio finded some problems. They want sell their product to
outside also. Now they use their cement which are produced in Chettinad Cement
Corporation Limited for their own purpose. They want to sell that to others also
then only the ratio will be increased.
 Chettinad Cement Corporation Limited sells the 25 per cent of the cements
produced, remaining they used for own purpose. For sales to others they allowed
more days as credit to their agents.
EOQ ANALYSIS
 In EOQ analysis there is no problems finded in findings for the Chettinad Cement
Corporation Limited. Even though they want to keep that situation in upcoming
years also. Then only they can retain position.
 In EOQ analysis there is no problems fined in findings for the Chettinad Cement
Corporation Limited. The EOQ was finded as same in the concept of EOQ with
investment and EOQ without investment, even though they followed EOQ with
investment.
5.3 CONCLUSION
The study covers the inventory management for effective inventory control. I have used a
technique Economic Order Quantity Analysis named as EOQ Analysis for find out the rate with
EOQ and without EOQ investment for purchasing of good in the manufacturing the cement in
Chettinad Cement Corporation Limited. Hence the inventory management of the organization
quite good. During the year 2011-2016 from this study I concluded that organization would be
effective inventory management. The study will be use for Chettinad Cement Corporation
Limited in various ways.
BIBLIOGRAPHY
BOOKS
 Ashok Banerjee - Financial Accounting – A Managerial Emphasis – Excel Books – 2005
 Collis – Business Accounting – Palgrave Macmillan – 2007
 Khan MY Jain P.K – Management Accounting : Text, problems and cases 4th Edition –
Tata McGraw Hill – 2007
 Pandikumar – Management Accounting – Excel Books – 2007
 Ramachandran N Kakani Kumar Ram – Financial Acccounting For Management – Tata
McGraw Hill – 2006
 Robert N.Anthony David F.Hawkins Kenneth A. Merchant – Accounting Text and Cases
– Tata McGraw Hill – 2007
 S.K Bhattacharyya JhonDearden – Costing for Management – Vikas Publishing – 2002
 S.N Maheswari S.K Maheswari – Accounting for Management – Vikas Publishing –
2006
WEBSITES
 en.wikipedia.com
 Info.shine.com
 www.ask.com
 www.chettinad.com
 www.google.com
 www.indiacatalog.com
 www.inventoryquzz.com
 www.reportjunction.com
 www.scribed.com
 www.yahoo.com

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A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD CEMENT

CORPORATION LIMITED, KARUR

1.1 ABOUT THE STUDY

Normally the inventory has divided into two types. These,

1.2 SCOPE OF THE STUDY

1.3 STATEMENT OF THE PROBLEM

Unqualified employees in charge of inventory, Using a measure of performance for their

1.4 OBJECTIVES OF THE STUDY

1.5 RESEARCH METHODOLOGY

This study was conducted in CHETTINAD CEMENT CORPORATION LIMITED,

TOOLS FOR ANALYSIS

 Ration analysis (inventory) and

ECONOMIC ORDER QUANTITY (EOQ)

INDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILE

History of the origin of cement

It is uncertain where it was first discovered that a combination of hydrate non-hydraulic

Varieties of the cement

Sulphate resisting Portland Cement (SRPC)

Rapid hardening Portland Cement (RHPC)

Ordinary Portland cement (OPC)

Also referred to as grey cement or OPC, it is of much use in ordinary concrete

Portland Pozolona Cement (PPC)

Clinker Cement (CC)

 Low heat cement,

2.1.1 Cement Industry in Global

Demand for cement in MT 2005 2010 Growth rate

North America 170 200 2.9%

Western Europe 208 236 2.2%

Asia/Pacific 1500 1900 5.2%

Other regions 405 500 4.7%

World cement demand 2283 2836 4.7%

Top 25 Cement companies in the world

S.NO Name of the Company Name of the

CEMENT INDUSTRY IN INDIA

2.1.2 Cement Industry in India

S.NO Name of the company Details of the company

Year of establishment 1994

Year of establishment 1934

Year of establishment 1948

Year of establishment 1973

Year of establishment 1958

Year of establishment 1946

Year of establishment 1954

Year of establishment 1976

Year of establishment 1955

Year of establishment 1991

Year of establishment 1985

Year of establishment 1985

Year of establishment 1983

Year of establishment 1985

Year of establishment 1981

Year of establishment 1981

2.1.3 Cement Industry in Tamilnadu

The Tamilnadu government was formed a company name is “Tamilnadu cement

1. Alangulam cement works. Alangulam, virudhunagar districts.

S.No Name of the company Details

Chettinad Cement Corporation Corporate office Chennai

Corporate office Chennai.

Corporate office Chennai.

Brand name Ram co cement.

Corporate office Chennai (Govt).

Brand name Arasu cement