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Inventory management is one of the most critical components of working capital management because inventory constitutes a significant portion of current assets in manufacturing organizations. Efficient inventory management ensures uninterrupted production, minimizes investment in stock, reduces carrying costs, and improves profitability. Maruti Suzuki India Limited (MSIL), India's leading automobile manufacturer, has developed an advanced inventory management system that integrates modern production techniques, information technology, supplier partnerships, and lean manufacturing principles. The case of Inventory Management in Maruti Suzuki India Limited demonstrates how an effective inventory system contributes to operational efficiency, customer satisfaction, and better working capital utilization. MSIL follows the Just-in-Time (JIT) inventory system as one of its major inventory management practices. Under this system, raw materials and components are procured only when they are required in the production process. This minimizes the need to maintain large inventories and significantly reduces storage and carrying costs. Since inventory represents blocked working capital, reducing inventory levels improves liquidity and enables the company to utilize its funds for other productive purposes. The company maintains strong relationships with a large network of suppliers. Most suppliers are located close to the manufacturing plants, allowing components to be delivered several times a day according to production schedules. This proximity reduces transportation time, ensures timely availability of materials, and lowers _______ ____ __________ _________ __________ ______ ____ ____ ______ ________.
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