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    Overall and Spares Inventory Over Last Five Years (Whole NTPC)

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    Sam
    The document provides information on NTPC's overall and spares inventory over the last 5 years, including installed capacity, closing stock values, and constituents of overall inventory. It also discusses spares consumption versus procurements from 1999-2007, showing consumption generally exceeded procurement. Further, it outlines inventory holding norms for construction and O&M stores, sources of spares inventory build-up, and the economic order quantity formula used to determine the best order quantity.

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    Attribution Non-Commercial (BY-NC)
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    Overall and Spares Inventory Over Last Five Years (Whole NTPC)

    Uploaded by

    Sam
    120 views16 pages
    The document provides information on NTPC's overall and spares inventory over the last 5 years, including installed capacity, closing stock values, and constituents of overall inventory. It also discusses spares consumption versus procurements from 1999-2007, showing consumption generally exceeded procurement. Further, it outlines inventory holding norms for construction and O&M stores, sources of spares inventory build-up, and the economic order quantity formula used to determine the best order quantity.

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    The document provides information on NTPC's overall and spares inventory over the last 5 years, including installed capacity, closing stock values, and constituents of overall inventory. It also discusses spares consumption versus procurements from 1999-2007, showing consumption generally exceeded procurement. Further, it outlines inventory holding norms for construction and O&M stores, sources of spares inventory build-up, and the economic order quantity formula used to determine the best order quantity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    120 views16 pages

    Overall and Spares Inventory Over Last Five Years (Whole NTPC)

    Uploaded by

    Sam
    The document provides information on NTPC's overall and spares inventory over the last 5 years, including installed capacity, closing stock values, and constituents of overall inventory. It also discusses spares consumption versus procurements from 1999-2007, showing consumption generally exceeded procurement. Further, it outlines inventory holding norms for construction and O&M stores, sources of spares inventory build-up, and the economic order quantity formula used to determine the best order quantity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    OVERALL AND SPARES INVENTORY OVER LAST FIVE YEARS (WHOLE NTPC)

    S.N. FIN.YEAR

    INST ALLED CAPACIT Y (M W)


    COAL

    GAS

    T OT AL

    CLOSING ST OCK OF
    OVERALL
    INVENT ORY
    (RS.CR.)
    1505.32

    CONST RUCT ION


    O&M INVENT ORY
    INVENT ORY (RS.CR.)S PARES
    INV. OT HERS
    (RS.CR.)
    (RS.CR.)
    189.09
    1220.56
    87.33

    96-97

    14610

    3175

    17785

    97-98

    14610

    3175

    17785

    1504.82

    158.39

    1243.43

    95.67

    98-99

    14610

    3275

    17885

    1503.95

    113.65

    1288.4

    101.9

    99-2000

    16015

    3955

    19970

    1515.66

    137.85

    1276.57

    101.24

    2000-01

    16015

    3955

    19970

    1402.55

    117.59

    1115.68

    106.38

    CONSTITUENTS OF OVERALL INVENTORY


    13%

    6%

    81%

    SPARES CONSUMPTION VIS-A-VIS PROCUREMENTS


    FOR LAST 8 YEARS (TOTAL NTPC)
    YEAR
    99-00
    00-01
    01-02
    02-03
    03-04
    04-05
    05-06
    06-07

    PROCUREMENT
    321.3
    369.71
    366
    391
    466
    438
    395
    577

    (RS.CR.)
    CONS. IN % OF
    101.3%
    140.56%
    77.30%
    120.70%
    96.80%
    91.10%
    95.70%
    85.60%

    CONSUMPTION
    325.4
    519.66
    283
    472
    451
    399
    378
    494

    SPARES CONSUMPTION VIS-A-VIS PROCUREMENT (TOTAL NTPC FOR


    LAST 8 YEARS)

    700

    PROCUREMENT

    600
    500
    400
    300

    472

    519.66
    325.4

    369.71

    466

    366

    451
    391

    321.3

    577
    438

    395
    399

    494

    378

    283

    200

    SPARES

    100
    0
    99-00

    00-01

    01-02

    02-03

    03-04
    FIN.YEAR

    04-05

    05-06

    06-07

    INVENTORY HOLDING NORMS

    CONSTRUCTIONSTORES

    A.

    INVENTORYNORMSINDAY/
    MONTHSCONSUMPTION

    1.

    CEMENT

    2.

    STEEL

    i.TORSTEEL/REINFORCEMENTSTEEL

    3MONTHS

    ii.STRUCTURALSTEEL

    6MONTHS

    3.

    OTHERS(VIZ.PIPE,PIPEFITTINGS,CABLESETC.)

    9MONTHS

    B.

    O&MSTORES

    1.

    COAL

    i.FORPITHEADSTATIONS

    15DAYS

    ii.FORNONPITHEADSTATIONS

    30DAYS

    2.

    FUEL(EXCLUDINGCOAL)FURNACEOIL

    3.

    SPARES(EXCLUDINGINS.SPARES

    i.INDIGENOUS

    18MONTHS

    ii.IMPORTED

    18MONTHS

    4.

    LOOSETOOLS

    6MONTHS

    5.

    CHEMICALS,GASESANDEXPLOSIVES

    3MONTHS

    6.

    OIL&LUBRICANTS

    1MONTH

    7.

    STORESOTHERTHANSPARES(CONSUMABLEGENERALSTORES)

    3MONTHS

    8.

    SCRAP

    1-2MONTHS

    2MONTHS

    4MONTHSARISING
    (3DISPOSALSINAYEAR)

    SOURCESOFSPARESINVENTORYBUILD-UP

    -MANDATORYSPARES
    SPECIFIED&PROCUREDWITH
    INITIALPLANT&EQUIPMENTS

    -RECOMMENDEDSPARESASPERRECOMMENDATIONSOF
    VENDORRECEIVEDALONGWITH
    THEPLANT&EQUIPMENT
    OFFER,SCRUTINISED&
    PROCUREDINTHEINITIAL
    PERIODOFCONTRACT

    -SITEORDEREDSPARES ORDERSPLACEDBYSITESTO
    MEETOPERATIONAL
    REQUIREMENTS.

    INVENTORYCARRYINGCOST

    ITALSOVARIESWITHQUANTITYORDERED,BASEONAVERAGE
    INVENTORYANDCONSISTSOFTHEFOLLOWINGCOSTS.

    COSTOFCAPITALINVESTMENT

    COSTOFSTORAGE

    COSTOFINSURANCE

    COSTOFPRESERVATION

    COSTOFOBSOLESCENCE

    ADMINISTRATIVECOST

    -INVENTORYCARRYINGCOSTISAPPROXIMATELY20TO25%OFCOSTOF
    INVENTORY.

    ECONOMICORDERQUANTITY(E.O.Q.)

    -Itisthatorderquantitywhichpermitslowestcostperunitandmost

    advantageous.

    -Itdependsupontwotypesofcosts

    i)InventoryProcurementCost

    ii)InventoryCarryingCost

    INVENTORYPROCUREMENTCOST

    Itconsistsofexpenditureconnectedwiththefollowingandvarieswiththeorder
    quantity.

    ReceivingQuotations
    ProcessingforPurchaseOrders
    Follow-upandexpeditingpurchaseorder
    ReceivingMaterialsandtheninspectingit
    ProcessingSellersInvoice

    Economic Order Quantity :

    TO DETERMINE THE BEST OR PROFITABLE ORDER QUANTITY , IT IS


    NECESSARY TO WEIGH THE ORDER COSTS AGAINST THE INVENTORY
    CARRYING COSTS , BECAUSE THESE TWO COSTS ARE CONFLICTING IN
    NATURE .

    INVENTORY CARRYING COSTS :

    IN AN IDEAL CONDITION THERE SHOULD BE NO STOCK .

    EVERY ITEM SHOULD ARIVE JUST BEFORE USE IN JUST ENOUGH


    QUANTITY FOR A DAY OR SO .
    BUT IT IS NOT PRACTICAL FOR THE TWO REASONS :
    SUPPLIERS AND PRODUCTION PROGRAMMES ARE NOT SO CERTAIN

    TOTALCOST

    T
    O
    T
    A
    L
    C
    O
    S
    T

    INVENTORYCARRYINGCOST

    ORDERINGCOST

    TOTALQUANTITY

    ECONOMICORDERQUANTITYCANBEEXPRESSEDINTHEFOLLOWING
    FORMULA:

    2AS
    OQ

    ==CI

    HERE:
    S =COSTPERORDERPERRs.
    A =ANNUALCONSUMPTIONINUNITS.
    C =COSTOFONEITEMINRs.
    I =INVENTORYCARRYINGCOST/YEAR/ITEMINONEUNIT.
    ASICPRINCIPLESTOBEREMEMBERED:
    ORDERQUANTITYSHOULDBEEXPRESSEDINTHESAMEUNITINWHICH
    CONSUMPTIONISTAKEN.
    CONSUMPTIONRATEANDINVENTORYCARRYINGCOSTSSHOULDBEOF
    SAME

    STRATEGYANDACTIONSTAKENFORCONTROLOFINVENTORY

    STRATEGY :
    REGULATINGTHEPROCUREMENTSOFINITIALANDO&MSPARES

    OPTIMUMSTOCKINGI.E.STOCKSCOMPARABLETOCONSUMPTION

    INTERUNITTRANSFEROFMATERIALS.

    DISPOSALOFSCRAP.

    ACTIONSTAKEN:
    STRINGENTCONTROLOFPROCUREMENTOFINITIALSPARES.

    STRINGENTCONTROLONPROCUREMENTCONTROLOFINDENTS.
    REVIEWOFINDENTSOFSPARES.

    ABOVE RS. 5.0 LAKHS BY HOD(MATERIALS), HOD(F) AND HOD (INDENTING


    DEPARTMENT)

    ABOVERS.2.0LAKHSBYCOMMITTEEOFMANAGER/SR.MANAGERS

    INVENTORYMONITORINGTHROUGHORTS&MANAGEMENTCOMMITTEES.

    COMMONCODIFICATIONOFINTERCHANGEABLESPARES.

    DIVERSIONOFSURPLUSITEMSTONEEDYPROJECTS.

    REGULARDISPOSALOFSCRAP

    LEADTIMEANALYSIS

    LEADTIME

    IT IS THE ESTIMATED TIME LAG BETWEEN THE DATE, THE


    INDENT IS ACCEPTED AND REGISTERED IN PURCHASE SECTION
    TOTHEDATEOFPHYSICALRECEIPTOFMATERIALSATSTORES.

    IT IS PRE-KNOWN OR ESTIMATED BY THE MATERIALS


    MANAGERS DEPENDING UPON TYPE OF MATERIALS AND BASED
    ONPASTEXPERIENCE.

    ITCANBESUBDIVIDEDINTOFOLLOWINGCOMPONENTS:

    I)ADMINISTRATIVELEADTIME.

    II)SUPPLIERSLEADTIME

    III)TRANSPORTERSLEADTIME

    ROCUREMENTSYSTEMS
    RECOUPWHENDUESYSTEM(WDS)

    MEANTFORAUTOMATICRECOUPMENT(AR)ITEMS.

    PERIODICALREVIEWSYSTEM(PRS)
    MEANTFORNONARITEMS

    OTHTHEABOVESYSTEMSCALLFORDETERMINATIONOFLIMITSTOGUIDE
    DECISIONSONWHENANDHOWMUCHTORECOUP.
    UNDERWDS,ORDERSAREPLACEDWHENTHESTOCKREACHESA

    INVENTORY MANAGEMENT
    INVENTORY HOLDING NORMS FOR SPARES
    It is estimated that about 60% of the maintenance cost of plant and
    equipment is on account of spares alone. For making 100% availability of spares,
    a huge inventory of spares has to be maintained requiring large working capital.
    Optimum inventory holding is aimed to strike a balance between the working
    capital requirement and providing high plant availability.
    Inventory holding norm for spares have been fixed on the basis of experience
    obtained during the past years in respect of consumption of spares, procurement
    lead time, nature of spares (viz. Vital essential, desirable etc.), The Inventory
    Norm fixed for spares is 18 months consumption (excluding insurance spares).
    spares inventory
    The inventory holding is computedClosing
    at thebalance
    end ofoffinancial
    years in atterms of
    Inventory
    Ratio:
    inventory
    turnoverTurnover
    ratio which
    is defined as under:
    Consumption
    the
    end of F.Yearduring F.Year.

    OPTIMAL STOCKING AND


    PROCUREMENT OF SPARES
    NTPC being a multi unit organisation, to avoid stocking
    of huge quantities of spares at each unit resulting in
    locking of
    large working capital, a policy on
    indentification of interchangeable spares with allotment
    of codes for the purpose of pooling of spares is
    envisaged. Common code wherever feasible has already
    been adopted for the purpose of pooling amongst the
    stations as far as possible.
    The policy is formulated with the objective of ensuring
    ready availability of such spares at the time of
    requirement as also optimisation of capital investment.

    SELECTIVEINVENTORY
    CONTROLOFSPARESTHROUGHDIFFERENTANALYSIS

    To achieve the goal of optimum inventory, various


    TYPE OF
    OBJECTIVE
    types
    of analysis and BASIS
    classifications are carried
    out as
    ANALYSIS
    below:
    ABC

    Annual value of usage.

    Selective
    control
    through
    analysis of Annual Usage
    Value.
    To regulate co-efficient on
    confidence
    levels
    in
    providing safety stock.

    VED

    Criticality of the spares i.e. Vital,


    Essential & Desirable

    XYZ

    Itemwise stock holding value

    To effect selective control.

    ICU

    Nature of use i.e. Insurance,


    Consumable and Unit Replacement.

    To regulate procurement policy


    and stock holding.

    FSN

    Pattern of movement i.e. Fast, Slow


    and Non-Moving

    To identify pattern of movement


    and earmark non-moving spares.

    SDE

    MarketAvailability

    To formulate methodologies of
    procurement depending upon
    market availability.

    THANKYOU

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