Inventories are indispensable to run the plant efficiently. It helps to maintain both material inputs and the manufactured output at an optimum level of requirement. While inventories are necessary to absorb input and demand variations, a balance is needed between blocked capital in the inventories and impact on production. The materials management department is expected to provide operational convenience with a minimum possible investment in inventories. In this paper I would discuss the Inventory Management system followed in a Large Mining Organization owned by Government of India. This study addresses the overall inventory management system followed at one of the units of this organization. The study focuses on understanding and analyzing current inventory system being practiced in the organization. Further, a set of recommendations to improve the system are also made.