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I focused on their main three process and distribution channel. Their main three process of inventory control are: 1. Physical Stock Taking 2.

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Stock Monitoring 3. They take it four times in a year. There are some steps in Physical Stock Taking Process. It works step by steps. In SAP previous balance of inventory, receipt and issuance of inventory are reserved. With these information SAP generate what should be the ending book balance of each segments of inventory.

In the counting they also mentioned which inventory stocks are good sound stock , which stocks are fully damaged and which are used for repackage. For example, a raw material is Calcium Acetate.

Let assume its ending book balance of inventory is kg and in physically counting it is found kg is available as inventory. Therefore, there is a short of 20 kg. Now if the value of 1 kg of Calcium Acetate is Tk then the value of ending book balance of inventory is Tk,, Physical balance is Tk , Therefore, there is a short of Tk Then they match the physically founded sound stock, damaged goods and repackable products with each item. After that they add sound stock, damaged goods and repackable products of each item to generate the physical balance of each item. Then they calculate the closing value of stocks of each depot.

BPBL write off all the damaged stocks of the inventory finished goods. Then the system shows the current inventory balance. If there is any mismatch in any item they checked it again and enter the correct balance in SAP again.

Stock Monitoring Stock monitoring is an important part of inventory control process. By stock monitoring one company can assess whether current plan on inventory controlling process is working properly or it need to be modified or changed. Stock monitoring help the company to take necessary decision immediately, if there is any major change happened in inventory. BPBL usually use two methods to monitor its stocks. This report is generated in SAP, as issuance and usage of each item of raw materials; packaging materials, finished goods and semi finished goods are recorded in SAP.

In this usage report there is information about the quantity and value of inventory is issued during the month and the usage of it. If some item shows no usage for three months or more, they are consider as slow moving and those are highlighted in front of management The management tries to find out why those items are moving slow, is there any problem in inventory planning an d the solution of reducing the slow moving inventory items. Besides, in this report stocks of high coverage days are also shown.

These stocks are also come to the concern of management, as BPBL tries to maintain to minimum inventory balance.

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Separate reports are prepared for the inventory of raw materials, packaging materials, finished goods and semi finished goods. In each report there are some parts. For example, if a usage report is produced for finished goods first there would be a full report which includes both factories and eight sales depots, then it can be segmented by individual report of each factories and sales depots, by material groups, by division of products etc. By segmenting the report it become easier to find out the problem area of high coverage inventory item.

For example, let assume in a full report of the month March, stock A shows high coverage days of 45 days. Then BPBL segment the report by factory and depot wise and find out that in Khulna sales depot the coverage days of stock A is 40 days and in all. By segmenting here BPBL can find out the problem zone which helps management to concentrate easily on the problem zone. Through this process BPBL knows in which process inventory is in. There are many steps in inventory movement in BPBL.

The main processes are described below: 1 First step of inventory movement is goods received from supplier. After goods are received from supplier those are entered in SAP as inventory. This is called reversal of goods receive from supplier.

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That inventory movement stage is called goods received for cost centre. After goods are received the stocks remained blocked.


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Then quality checks of those stocks are held. After being ensured that the stocks pass the required quality test those are labeled as unrestricted and are ready to use. Each stages of inventory movement has an unique code in SAP. In this report it is shown that which batch of stocks are in which movement stage. It helps BPBL in monitoring its inventory.

Inventory analysis is a process which helps to find out the difference between budgeted and actual stock coverage days and take measures if necessary. Then current available stocks are divided by this per day usage to find out the actual coverage days. After that actual coverage days are compared with budgeted coverage days to find out the difference. If the actual coverage days are less than the budgeted coverage, then BPBL can purchase more stocks to meet the forecasted demand.

On the other hand if the actual coverage days are more than the budgeted coverage days, then BPBL can reforecast about the needs of stock and reduce purchasing stocks on following months, as there is already much raw material available to manufacture forecasted amount of goods. Historical basis-last 3 month consumption last 3 month consumption days per day consumption Stock. Forward basis-based on next 3 month consumption next 3 month cons days per day consumption Stock. Here the stock of December, January and February are based on historical consumption and rest of the months required stocks are forecasted.

The budgeted stock coverage days here is 10 days. Which means at any point in time BPBL will try to reserve an amount of stock by which production can run for 10 days.

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Then this per day consumption is divided from the current stock to find out the actual coverage days. Here by historical consumption actual coverage days is 8 days and a budgeted coverage day is 10 days. Therefore here is a short of 2 days. In Forward basis Calculation are similar but it is based on the forecasted following three months March, April and May required stock. In this example by forward basis stock coverage days is 8. Therefore, there is a short of 2 days. Now as BPBL know by this process that they are in a short of stock to cover the demand as forecasted they can instantly buy more stocks to meet the demand.

Here again we how much raw material is needed per month for production of BPBL. Here after calculation of stock by historical basis it is found that actual stock coverage day is 17 days, whereas, in budget it is 10 days. Therefore BPBL has 7 days excess stock. Which means their cost of holding inventory will increase.

Also if they do not have this extra 7 days stock, they could invest this money to some other purpose or they can save it to bank which would give them an interest of Taka for this 7 days. Therefore they lose Taka as an interest cost for holding excess 7 days inventory. Thus BPBL has 8 days excess stock. The interest cost of 8 days excess stock is Taka 45, Thus day can reduce cost of holding extra inventory.

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BPBL use this inventory analysis to find out whether their budgeted and actual stock coverage days are matching with each other. By this analysis it is easy to find out the mismatch and the cost for this mismatch. It helps BPBL to take appropriate measures immediately to control inventory holding and reduce cost. From these two factories Finished Goods are distributed to Sales Depots and then from sales depots it is distributed to the dealers. BPBL has two channel of distribution: channel one and channel two.

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In the two-level channel, some major dealers dominate the paint market in the region where they are located. Small dealers collect paints from the large-scale dealers. Ultimate users buy paints from these small dealers. BPBL has its own vehicle to deliver goods to the dealers. Sometimes BPBL also do personal selling from its sales depots if they get very lucrative buyer. In personal selling they sometime also transport goods to the buyer. To become a registered dealer, a dealer has to do business with BPBL for a certain period of time.