REPORT OF ORGANISATIONAL STUDY CONDUCTED AT
KERAFIBERTEX INTERNATIONAL PVT LTD
KAKKANAD, KOCHI
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (INTERNATIONAL BUSINESS) BY
RAFSHAD MAHAMOOD
Faculty Guide: Prof. (Dr.) P R WILSON
SCHOOL OF MANAGEMENT STUDIES, CUSAT
SCHOOL OF MANAGEMENT STUDIES
COCHIN UNIVERSITY OF SCIENCE AND TECHNOLOGY KOCHI - 22
DECLARATION
I, Rafshad Mahamood, student of School of Management Studies, CUSAT hereby declare that this project entitled “A Report on the Organizational Study conducted at KERAFIBERTEX INTERNATIONAL PVT LTD, KAKKANAD “is based on the organizational study conducted by me at Kerafibertex Pvt. Ltd under the guidance of Prof. Dr. P R Wilson, Member of Faculty, SMS, CUSAT.
I also declare that this project work is original and it has not been
previously submitted by me for the award of any degree or similar at any other university earlier.
Place: Kalamassery
ACKNOWLEDGEMENT
I wish to express my sincere thanks to Prof (Dr.) C A. Francis, Director, School Of Management Studies, Cochin University of Science and Technology for permitting me to do my study in Kerafibertex International Pvt. Ltd, Kerala, and providing me the necessary support.
I wish to place on record, my profound gratitude and indebtedness to
Prof. (Dr.) P R Wilson, Member of Faculty, School of Management Studies,
CUSAT for her guidance and encouragement during the course of the organization study.
I also express my sincere thanks Mrs. Sreekala, H R Manager Kerafibertex International Pvt. Ltd., and all the members of staff for helping me with their valuable support.
I am deeply indebted to my parents, family members, and friends and above all I thank the Almighty for the blessings that has been showered upon me to complete the project successfully.
Contents
Chapter -1 ... 1
INTRODUCTION TO THE ORGANIZATION STUDY ... 1
Chapter – 2 ... 3 INDUSTRIAL PROFILE ... 4 Chapter – 3 ... 9 ORGANIZATION IN DETAIL ... 9 COMPANY PROFILE ... 10 ORGANIZATIONAL CHART ... 13 PRODUCT PROFILE ... 18 DEPARTMENTAL ANALYSIS ... 17
Quality Control Department ... 22
Finance Department ... 23
Human Resource Department ... 26
Export & Documentation Department ... 38
Product Development Department ... 43
Chapter – 4 ... 46 FINANCIAL ANALYSIS ... 47 Chapter – 5 ... 49 SWOT ANALYSIS ... 50 Chapter – 5 ... 52 MY LEARNING EXPERIENCE... 53 Chapter – 6 ... 54 CONCLUSION ... 55
Chapter -1
INTRODUCTION
The Project includes the detail analysis of the different departments of an organization. As the firm is a coir company, more importance is given to production and quality control during analysis. The other departments analyzed in this project are finance, marketing, human resource, logistics. The project was of one month duration. Kerafibertex International Private limited, Kakkanad considered one among the top leaders in coir export industry; it was a great opportunity for me to understand the effort and efficiency through which it had reached such.
A business enterprise may be viewed as an economic institution function in social, political and cultural environment. The management of a business firm carries in guiding and directing its operations towards fulfillment of its objectives. Management is a critical function in business that is responsible of the resources through proper planning, directing and supervision.
The operations of a firm are generally subdivided into production, finance, marketing and personal. If we look up on business as a system, it may be regarded as entity functioning in the social, economical, political and cultural environment of the country.
Chapter – 2
INDUSTRIAL PROFILE
Global Coir Trade
Currently, the global annual production of coir fiber is about 350,000 metric tons (MT). Yet, even in the world’s top two producers , India and Sri Lanka, which account for about 90% of global coir fiber production, combined, this renewable resource is underutilized; local coir mills process only a fraction of the available husks, which accrue more or less year round as a waste during coconut processing.
Traditional uses for the resilient and durable coir fiber include rope and twine, brooms and brushes, doormats, rugs, mattresses and other upholstery, often in the form of rubberized coir pads. Since 1990, rapidly growing domestic demand in India more than doubled global production benefiting exclusively the Indian coir industry. Since 2001, a rising Chinese demand for coir, an expanding market for coir-based erosion control products, and the spread of coir pith as a peat moss substitute in horticulture has further pushed up global production and prices. In turn, other coconut growing countries, including Philippines, Thailand and Vietnam are now expanding their production and export of coir fiber. These changes are also reflected in the international trade in coir. Historically, Sri Lanka had been the world’s largest exporter of various fiber grades, whereas India exports largely value added products – yarn, mats, and rugs.
The challenge for coir industry is to sustainably expand markets for this versatile renewable resource while maintaining its role as employer for the rural poor. This may require producers to innovate production, improve product consistency, and in particular develop novel applications – jointly with their customers in importing countries. Business, public agencies and research institutes are now addressing this challenge in multilateral projects worldwide – setting examples that global trade can be beneficial to all parties involved.
Coir Industry in India
Indian coir industry is an important cottage industry contributing significantly to the economy of the major coconut growing States and Union Territories, i.e., Kerala, Tamil Nadu, Andhra Pradesh, Karnataka,
Maharashtra, Goa, Orissa, Assam, Andaman and Nicobar , Lakshadweep , Pondicherry, etc. About 5.5 lakh persons get employment in this industry. The exports from this industry are around Rs. 70 crores. Coconut husk is the basic raw material for coir products. Around 50 per cent of the available coir husk is used to produce coir products. Hence there is scope for growth of coir industry.
India accounts for more than two-thirds of the world production of coir and coir products. Kerala is the home of Indian coir industry, particularly white fiber, accounting for 61 percent of coconut production and over 85 percent of coir products.
Not more than 50% of the coconut husks is utilized in the coir industry, the remaining used as fuel in rural areas. Production in the corporative fold is not more than 20-25 per cent. The development programs so far undertaken aimed at revitalization of coir cooperatives, improvement in quality and products diversification. Efforts were also made for exploring wider export markets for coir and coir products. Judged from increase in production and employment, the progress has been rather slow and exports in physical terms have remained mere or less static.
Kerala and the Coir Industry
The history of Coir and its association with the state of Kerala dates back to the 19th Century. The name “KERLA” is derived from “KERA” (means coconut in Malayalam and “Alam” means Land). Everything from Kerala’s culture to its dishes is evolved around the Coconut tree.
Alleppey is the nerve centre of Kerala’s famous Coir industry. Here, one can see coconut husks being beaten into fiber for making beautiful mats and other coir products. Both men and women are actively involved in the production of coir. The women are mainly involved in the yarn spinning sector and the men in the product-weaving sector.
Coir Industry enjoys the status as the largest cottage industry in the State of Kerala, giving employment to over a million people. Kerala also has a very fine natural harbor located at Cochin. From the ancient times itself Cochin had found a place in the minds of Europeans as a trading centre because of its port and spices.
COIR
Coir is also known as “Kokos” or “Coco”. The name is derived from the Malayalam word “kayar” or “kayaru”, which means cord to be twisted. Coir is a natural fiber extracted from the husk of the coconut fruit. The husk consists of coir fiber and a corky tissue called pith. The husk is immersed in water for 6-9 months. This process is called retting. Retting removes some of the dirt and natural enzymes present in the fiber giving it a golden color. The fiber is then extracted by beating it manually using a mallet or by a mechanical extractor machine. This leaves the outer skin of the coconut fruit along with the corky pith. Pith finds large scale use in horticulture as a growing medium. The fiber thus extracted is then hand-spun to form the golden coir yarn. This yarn is used to make an ever increasing range of products.
The advantages of coir fibers are: • 100% natural
• Bio-degradable
• Made from infinitely replenishable resources • Natural golden brown color-fits any décor
• Hard and resilient fiber provides excellent scrubbing action-ideal for door/entrance
• High water retention
• Coir matting and rugs: hard- wearing, rustic and elegant • Moth and rot resistant
• Good insulator of heat and sound
Composition of coir
Coir is a lignocelluloses material. It is bio-degradable. Chemical Composition of Coir
Water Soluble 5.25%
Pectin and related compounds 3.00%
Hemi – cellulose 0.25%
Lignin 45.84%
Cellulose 43.44%
Because of the high lignin content coir is more durable when compared to other natural fibers.
Traditional Fiber Extraction
The traditional production of fibers from the husks is a laborious and time consuming process. After separating of the nut, the husks are processed by various retting techniques generally in ponds (for 3 to 6 months) or in back waters or lagoons. This requires 10-12 months of anaerobic (bacterial) fermentation.
By retting, the husks are softening and can be decorticated and the fiber is extracted by beating, which is usually done by hand. After hackling, washing and drying (in the shade) the fibers are loosened manually and cleaned. The remaining residual pith which was previously considered a waste problem has recently found new profitable market as a peat moss suitable for horticultural production.
Traditional practices of this kind yield the highest quality of (white) fiber for spinning and weaving. Retted fibers from green husks are the most suitable fibers for dying and bleaching. For the production of more coarse brown yarns shorter periods of retting may be applied. This fined an increasing outlet in Geo-textile application.
Mechanical Extraction
Alternatively, mechanical processes using either de-fibering or decorticating equipment process the husks after only five days of immersion in water times. Crushing the husks breaker opens the fibers. By using revolving “drums” the coarse long fibers are separated from the short woody parts and the pith. The stronger fiber are washed, cleaned, dried, hackled and combed.
Eco-friendly and natural image of coir
Coir industries in India and Sri Lanka have a strong export orientation with the sale of traditionally made yarn, mat, matting’s, rugs, and carpets. Since the mid of 1970’s export markets have begun to decline because of
severe competition from synthetic fibers. A gradual recovery during the last decade can be ascribed partly to increasing ecological awareness on the part of consumers in the industrial countries. Besides superior performance for durable matting, a strong marketing argument for coir is its eco friendly and natural image.
Exporters of dyed coir products, however, are confronted with banned dyestuffs and legislation in Europe (and Germany) for ecologically safe products. The more advanced private companies have the vision and funds to be able to invest in improved dyeing technology and Wastewater Treatment systems. In order to explore and exploit the larger markets for diversified coir products, environmentally safe technologies need to be developed and implemented by local producing industries.
More efficient method for processing and chemical recovery and waste water treatment are of interest to the scientist and technician, but also essential for industrial application. Eco labeling is one of the important issues for export market promotion, and will require the development of a recognized certifying institute.
Chapter – 3
ORGANIZATION IN DETAIL
Kerafibertex International Private Limited is hundred percent export oriented company, manufacturing natural / coir fiber products. Started in the year 2000, the company is the subsidiary of M/s. Giacomini&Gambarova, Italy.
The company is set up at KINFRA Industrial park, Kakkanad, Cochin. Strategically located nearer to Cochin sea port and Airport.
The company has floor space of 145000 square feet with 144 people working. The company has invested about Rs. 20 crore with all modern machines. The company manufacture product using natural coco fiber polypropylene, rubber and cotton besides Vinyl based products. Jute, Sisal and other allied products are also used to make high quality products.
The product includes wall to wall carpet attractive mats and eco-friendly rugs, besides all types of hand woven products, under the expert guidance of parent company. The company produces high quality innovative product with the finest craftsmanship. The production capacity of the company is 8000 square meter vinyl product per day.
Exports
Kerafibertex with its eco-friendliness is a product of the future with great potential for exports to developed countries. Countries like Canada, France, Germany, New Zealand, Sweden, England and USA are the major importer of Kerafibertex Ltd. Majority of the exports are to USA and Europe.
Indian exports in coir products comprise only 2% of the international market. As coir and coir products are of high demand exports to the other countries are smooth and convenient. Coir is also a product where season does not affect.
Achievement of the company
Within a span of 10 years the company has touched a turnover of crores. Company has installed most modern machines and update techniques for the above achievement. With lean manpower and efficient management the company hopes to achieve further more during the year.
Management
Kerafibertex is a joint venture with an Italian company – Spontex SRL, Hal and Indian counterpart Mr. P.K. Prasad the Managing Director of Kerafibertex, Kakkanad. Majority of the shares has been held by the Italian company.
The Director Board consists of three people – Mr. EpidioGiacoimi, Mrs. GusippinaGiacomin and Mr. P. K Prasad.
Mission
The combination of state of art technology and the real service with the best parameter in profitability, efficiency, system and technology by carrying on the tradition with the commitment to excellence in customers and employee satisfaction.
Vision
“A firm with diverse range of products to serve the customer” “A firm which is alert, vigilant and responsive to changes” “A firm managed, pro-active, popular firm with all India and global
prospective”
Strength of the company
• Skilled labour
• Efficient production • Fair pricing
• Creativity and innovativeness • Relationship with customers • Commitment and reliability • New product development
Planning new business and diversification growth
Kerafibertex is looking for diversification growth opportunity. And they are planning to introduce PVC based plastic items which include household items such as crystal plates and glasses, buckets mugs and furniture items also.
The company is going in for a conglomerate diversification strategy, as they have no relationship with the current products that they are dealing and the technology or the markets. The company is planning to invest another 2 to 3 crores for the new diversification strategy, which they are planning to do.
ORGANIZATIONAL CHART CHAIRMAN EXECUTIVE DIRECTOR MANAGING DIRECTOR ACCOUNTS MANAGER FACTORY MANAGER HR MANAGER FINANCE MANAGER PRODUCT DEVELOPMENT MANAGER EXPORT MANAGER EXECUTIVE
ELECTRICAL QUALITY STORE PACKING MATERIAL STUFFING
EXECUTIVE PURCHASE EXECUTIVE EXPORT EXECUTIVE EXPORT EXECUTIVE
MECHANICAL PRODUCTION TRANSPORTATION
PRODUCT PROFILE
Kerafibertex manufacture all types of coir floor products also specialized in manufacturing of PVC tufted coir rolls and mats with a capacity of 8000 square meter vinyl product per day. All manufacturing polypropylene mats / rolls rubber mats and different allied product of rubber, coir, polypropylene and other synthetic material.
The company has all types of hand woven products developed and designed by skilled craftsman.
Products
Traditional Coir mats
Vinyl backed coir mats Rubber mats
Rubber and coir mats Poly gummer
Coir vinyl on rubber Jute rugs
Cotton rugs Sisal rugs
1. Traditional Coir mats
The companies have all types of hand woven (hand looms) product. Developed and designed by skilled craftsman, they are highly attractive and eco-friendly, good range of thickness and structure, basically for indoor and outdoor application.
2. Vinyl backed coir mats
Vinyl backed coir can be cut to various shapes / size to fit
any requirement. Manufactured using sophisticated machine. It is
also highly desirable and economic.
3. Rubber mats
Rubber mats are 100% natural and eco-friendly. It is highly durable and available in 120 different designs and shapes. Non-slippery with shock absorbing capacity they can be used even in snow.
4. Rubber and coir mats
Coir bristles embedded on natural rubber. Huge varieties of designs and creations are available. Highly durable and 100% natural, non slippery, outdoor application.
5. Poly gummer
Polypropylene embedded on rubber base give an elegant and slim effect. Totally flexible.Different colour and matching border low cost and money interior and outdoor application.
6. Coir vinyl on rubber
Heavy duty mats with coir blocks embedded on rubber for better brushing effect, different shapes and sizes eco-friendly, not slippery. Best used in snow and cold countries.
7. Jute rugs
Eco-friendly product of different design, pattern and wave wall to wall carpets.Printed version 100% fiber product.Internal application only.
8. Cotton rugs
Made out of 100% natural cottons Hand woven made in to any size. Best bathroom, kitchen and spread under the bed. Indoor application only.
9. Sisal rugs
100% natural sisal, eco-friendly product.Special rugs for ancient / oriented furniture. Any color choice. Matching border, size up to 4 meter width.Wall to wall carpet.Internal application.
Raw Materials
Being the product PVC backed coir mats, the raw materials used for the production of coir mats and other are.
1. Coir Yarn 2. Calcium Carbonate 3. Solvin 4. Eve 5. Woom 6. Fassa 7. Black Oxide 8. DNP / DOP
PVC is the mixture of calcium carbonate, solvin, eve, woom, fassa, black oxide and DNP.
PVC tufting
Coir gristles are tufted in to liquid PVC and run through heat and cold chamber to solidify. Coir runner of 2 meter with times 50 meter are rolled cut. The rolls are further cut into sizes as per the requirement of the clients. Highly expensive and most modern techniques are used for the process.
The cut mats are further designed and packed for export. The finished products are then stuffed in to container for shipment.
Suppliers
The raw materials are PVC pounds such as solvin and other solution like DNP / DOP etc, apart from coir yarn.
The raw materials like solvin and DNP /DOP are imported and the main raw material are available in the local villages.
Since the first 2 items use of factory product, the availability is always there. But coir yarn has scarcity of the agricultural crop facts. Nether less the crops is capable of getting all the raw material as per the schedule.
DEPARTMENTAL ANALYSIS
The following are the main departments: • Production Department
• Finance Department
• Human Resource Department
• Export and Documentation Department • Product Development Department • Complaints Department
Employees in each department perform multiple roles which makes them capable of handling multiple tasks in the organization. This applies to the workers in factory or production unit as well as the management staff.
Production Department
The most important department in Kerafibertex is the Production Department. Production or the Factory Manager is in charge of the production department. Production executives and the production supervisors are under the production manager.
Responsibilities of the production manager are:
PRODUCTION (FACTORY) MANAGER
PRODUCTION EXECUTIVES PRODUCTION SUPERVISORS
1. Planning and scheduling day-to-day activities, management and controlling of the activities of supervisors.
2. Arrange vehicles for transportation of raw materials to factory. The main activity of the production department is the conversion of raw materials into finished goods.
Raw materials
Coconut fiber extracted from the husk of the coconut forms is the basic raw materials. Coconut husk when treated in a process for a period of time attains the fibrous form. The two distinctive varieties of fiber are white fiber and brown fiber. Different types of Raw material used for production of coir products are as follows:
1. Coir Yarn 2. Calcium Carbonate 3. Solvin 4. Eve 5. Woom 6. Fassa 7. Black Oxide 8. DNP / DOP
PVC is the mixture of calcium carbonate, solvin, eve, woom, fassa, black oxide and DNP. The major sources of procurement of raw materials are domestic market and from other states.
Different steps in production processing
1. Raw Coir
The company checks the quality of the products. If the raw materials have good quality, the company will accept. If the raw materials are not well, the company will reject.
2. Bleaching
The main purpose of bleaching is to avoid old content & dirt in yarn and to get color, brightness and penetration. For this purpose certain chemicals are used. That is hydrogen peroxide 10% - 15% and sodium silicate 10%. It requires a processing time of 2 hours at a heat of 80 to 100 degree Celsius. For bleaching solution and material ratio maintained is 1: 20. After the processing time alum or ascetic acid and fresh water are added to material for cleaning.
3. Weaving
For the weaving the factories are equipped with the latest yarn preparation and dyeing equipments, imported automatic shaft / jacquard looms and finishing equipments. The company successfully maintained the balance between traditional craftsmanship and latest technology throughout the years.
DESIGNING
CUTTING PRINTING
PACKING
RAW COIR BLEACHING
EXECUTIVES
4. Designing
One of another small unit functioning inside the factory is the designing unit. Rubber moulds are prepared by the external agencies. This is used to create models and designs in stencil format. The attractiveness of the products, the beautiful and modern designs are made by the experts. These designs are printed on the mats based on the size and requirements of the customers. These sections are operated by persons who are experts in designing.
5. Cutting
For the production of mats large piece of matting are cut into required size. The dimensions would be as prescribed by the buyer.
6. Printing
There is a separate section for the printing of designs of the coir products. It is done by a group of experts by using well equipped printing devices.
7. Packing
After completing all the process in production, the products are packed in polythene bags and then in cartons. Each individual packet contains details like.
• Net weight
• Date of manufacture • Lot number
Production Unit
The production unit has all the above functions involved. The team consists of 132 employees – 50 employees in production units, 15 technicians and 4 supervisors commence the production in a single shift. Over 9 machines (looms) work for standardizing the production with demand.
Fifteen technicians are kept separate for the department under the supervisor production. The supervisors along with the employees will be technically qualified for substitution in case of emergencies.
According to the survey conducted by the researcher it was clear that over 8420 square meters of mat was produced daily on an average.
The operations of the production unit are:
After getting the order from the customer, the production department designs the product for the customer with the required specifications. Specification of the mat means the length, width, weight, design etc.
As per the order design chart is prepared or samples of the dimensions specified are prepared and sent for approval to the buyer. Once the design chart is approved by the customer the production starts in order to dispatch the goods within the date specified in the order form.
The designs are of two types. They are in house design and buyer designs. The in house design is developed by product development team at Kerafibertex when no design is provided by the buyer. Mostly buyers provide the designs from their end which is known as buyer designs.
Rubber Moulding Unit
Rubber moulds are prepared by the external agencies as per the dimensions being given to them by the product development team. Rubber moulds is made to stencil form by external agencies and rubber in sheet along with coir mats are pressed with the help of a bench press under extreme heat this in turns help in moulding rubber coating around the mat making it a clear
finishing. The rubber powder mixed with clay is used for moulding purpose. Extreme caution with safety gadgets like specially designed glows heat resistant goggles and dress is used. The moulded mats are made to sharp edged manually by using cutters and delivered.
Waste Disposal Management
Since majority of the raw materials used are naturally occurring ones there are less chances for pollution. Still in order to inculcate quality in waste disposal they have kept water purification plant so as to remove toxicity and reuse water in the process of dyeing.
Material handling
Raw materials being less bulky is handled using trolleys. Carrying and transportation is done depending upon the bulkiness of the quantity demanded with the help of trucks / containers.
Quality Control Department
Under the production manager comes another very important aspect in production which is Quality Control. Quality control is based on AQL (Acceptable Quality Level). Company follows the 1.5 level in which the quality checking is random wise. That is, in 1000 products manufactured, 100 would be checked for the quality.
Kerafibertex has a quality assurance manager who checks the products in 3 stages. The first checking is after finishing 10% of the product. Second inspection at 50%, and third on 100% completion.
European countries, USA etc are very conscious about the quality of the products so quality control department are gaining more importance.
Responsibilities of quality control manager:
• Preparation of records and reports
• Training of employees about quality aspect of the products • Formulating of quality specification standards
• Development of sampling schedule • Checks the 1.5 quality level
Finance Department
Financial management deal with the managerial activity which is concerned with the planning and controlling activity of the firms scarce financial resources. Hence these scarce resources have to be properly allocated to achieve the best of funds available. The subject matter of financial management has been defined in many ways depending upon the study of the subject of that particular period.
There are 3 members in the finance department working in a single shift. Executives in the human resource department also assist in the finance management as they are well qualified in both streams. Budgeting and finance control are the main functions of the finance department.
Sources of funds
MANAGING DIRECTOR
ACCOUNTS MANAGER FINANCE MANAGER
Kerafibertex meet its fund requirements from various sources, mainly they depend on commercial banks for short term and long term loans. That is commercial banks, trade credit etc.
Payments
The organization receives the payment after 30 days on delivery of the goods. Shipment is made on FOB basis (free on board). For local deliveries 40% of the payment is collected in advance and the balance 60% on delivery of the finished goods.
Budget and Budgetary control
The organization will prepare the budget by analyzing the previous year and according to the order they are getting from the parties. They will revise the budget half yearly according to the performance.
IT implication
Kerafibertex uses Airtel for the internal networking. All accounting is done using Tally software package. All the activities in the organization are fully computerized.
The financial objectives or goals of the firm are: • Profit maximization
• Shareholders wealth maximization
The certain amount of profit is transferred to General Reserve. The company follows 3 level approval methods for bill approving.
The accounting year of Kerafibertex is from 1st April to 31st March. The Finance department maintain in pass and out pass register.
The company treats all creditors within 30 days and all debtors within 30 to 60 days.
Working capital
The working capital of Kerafibertex mainly consists of share capital Authorized capital : 160000000
Issued capital : 90000000 Paid Up capital : 90000000
Turnover of Kerafibertex
Financial Year Value of Export(in crore)
2003-2004 31.2 2004-2005 55.8 2005-2006 57.3 2006-2007 64.6 2007-2008 70.4
Responsibilities of Finance Manager
The responsibilities of the finance manager are as follows: • Utilization and control of funds
• Planning the quantum and patter of fund requirement
• Procuring the required amount of funds and allocating the funds • Verification of accounts
• Preparation of budget • Financial planning
Responsibilities of Accountant
The responsibilities of the Accountant are as follows. • Daily data entry
• Maintain the stock register • Maintain the ledger, voucher etc
Responsibilities of Cashier
• Maintain minimum level of cash flow to meet day to day expenses • Record daily transaction of money
• Maintain cash book
Human Resource Department
According to Edwin Flippo, Human Resources Management is “the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and reproduction of human resources to the end that individual, organizational and societal objectives are accomplished”.
MANAGING DIRECTOR
CONSULTANT EXECUTIVES
This department plays a vital role in day - to – day functions in the organization. The main functions of HR department are dividing into 2, it is managerial and operative.
Human Resources department has a manager in charge, takes care of the General Administration in the Kerafibertex. The greatest asset of any organization is the human being. The growth and development of the organization depends on the grooming of the personnel. HR functions include welfare, industrial relation and being a party to the trade union negotiation. Apart from this it is a facilitators and the catalyst for the implementation of new concepts.
In general,
1. Kerafibertex ensures that personal performing work affecting quality is competent based on appropriate training, skills and experience.
2. Competence awareness and training takes place in Kerafibertex regularly. • Determines the necessary competence for personnel performing work
effecting quality at each unit level depending of the nature of work in the unit.
• Provides training or take other actions to satisfy these needs. • Evaluate the effectiveness of action taken.
• Ensures that personal are aware of the relevance and importance of their activities and how they contribute to the achievement of quality objectives.
• Maintain appropriate records of education, training, skills and experience.
Manpower
The most important of all organization is its Manpower. The organizations day-to-day activities are determined by the quality and number of manpower. So every organization is more conscious to deal with its manpower. Because other resources like raw materials, machines are inactive in the absence or in-corporation from manpower. So they have maintained a good HR department to task of handling its manpower belongs to different department in the organization. Kerafibertex International Pvt. Ltd has a good
HR manager and department to deal with the manpower concerns. For regular operations, its manpower includes both technical and non technical personnel. Kerafibertex has maintained a sound self motivated team in the industry.
Director Board – 3
Managing Director – 1 Management staff – 12
Permanent Staff – 144 (including labours)
This includes 50 employees in production unit alone, 15 technicians and 4 supervisors.
The function of HR starts at selection and recruitment goes through induction and training through the whole earner till super agnation.
Recruitment
If the HR department fails to identify the quality and the number of persons to be recruited, also fails to procure the services of persons within the organization required qualification skills and caliber continuously. Ultimately a time may come when all the qualified persons have retired and no qualified person remains.
Sources of recruitment
1. Internal 2. External
The Kerafibertex depends on external sources for recruitment of employees i.e. Advertisement, Employee Referrals etc.
Selection
The primary aim of the employee selection is to choose those persons who are the most likely to perform their jobs with maximum effectiveness and
to remain with the company. The selection procedure of Kerafibertex is as follows.
1. To fill blank application 2. Interview of the candidate 3. Selection of employee
Induction
According to R.P Billimore, induction or orientation is “a technique by which a new employee is rehabilitated into the changed surrounding and introduced to the practices, policies and purposes of the organization”.
Induction of new Labours
A new labour is assigned to work under a jobber. During the first few months he is under no pressure to reach targets as other employees. His work will be monitored by the jobber and all his activities will be under the supervision of the jobber. The employee is given training for the first 6 to 10 months. On-the-job training only is given to new employees. The training given includes how to operate the machine, how to clean the machine, how to use the raw materials etc.
Placement
After selecting a new candidate, he must be placed on a suitable job. Kerafibertex put new recruits on probation for a given period of time (say 6 to 10 months) after which their services are confirmed. If the performance is not satisfactory, the Kerafibertex may extent the probation or ask the candidate to quite the job. However, if the employee’s performance during the probation period is satisfactory, his service will be regularized and he will be placed permanently on the job.
Transfer
A transfer is a change in job assignment. A movement of an employee between equivalent positions at intervals is called transfer. The Kerafibertex promotes both organizational initiated transfer and employee initiated transfer.
Promotion
Promotion means shifting an employee to a higher position in the same hierarchy. This may be due to seniority, merit and suitability of the job etc. For some promotions a test is also done and an interview is also conducted.
Training
Training is essential to help in developing skills and updating knowledge. Especially, in a cut- throat competitive world, an organization must commit resources in employee training and development if it has to maintain a viable and knowledgeable work force. So that Kerafibertex promotes the training program.
Training is the process of improving the skill and knowledge for doing a particular job. It is an organized procedure by which people acquire knowledge and skills for a definite purpose. Kerafibertex International Private Ltd provides training facilities for the employees. It helps to increase their skill and knowledge.
Execution of Training
Training is carried in house or externally as per the training plan. At the end of 9th month from the date of any skilled training the Head of the Department confirm whether the training was effective to meet the requirements.
Personnel Development Plans
Performance Development Plans is a long term educational process and organized procedure that imparts conceptual and theoretical knowledge to managerial personnel. Kerafibertex mainly promotes on-the-job training method. On-the-job method is practical-oriented and it facilitates learning by doing. The worker is imparted training at the work place by the supervisor that is coaching, job rotation etc.
Performance Appraisal
According to Flippo “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job”.
Performance appraisal is done every year at the end of December. Different targets are specified for different level of employees. It is according to the performance of the employees in the past year that the employees are given increment. In the case labours performance is appraised on the basis of reduction of overtime, reduction of absence and other yardsticks.
Customers are asked to appraise the performance of the Kerafibertex and according to the result favorable changes are implemented in the Kerafibertex to increase the efficiency of the firm.
COMPENSATION STRUCTURE
Wage and Salary Administration
Wages of the workmen is fixed based on the long term agreement and is revised from time to time by the management. In the case of management staff, salary is fixed by Managing Director. Plant HR co-ordinates the periodic appraisal of performance which is the basis for salary revision. Salary for the staff is paid on the basis of attendance and this is monitored by time office which is a function of HR. Time office does the function of time keeping, attendance monitoring and up keep of leave records.
The industrial engineering department would compute the manpower requirement at the various work centers. The HR department does the recruitment and selection which is followed by the induction and training. Vacancies are notified as and when they occur in the leading newspapers.
The remuneration provided to the workers depends upon their grade. The qualified and technical person is given more remuneration compared to unskilled person. Employees without any discrimination are given maximum privilege and compensation for their commitment.
Labour Welfare
The number of permanent personnel in the Kerafibertex is 144 including the labours. Out of which 12 are the management staff. Even though there is trade union there is no strikes and other labour problems. Skilled workers are available in abundance in the area. So there is no shortage of labours.
Labour welfare implies providing good working conditions, proper lighting, cleanliness (low noise), and reasonable amenities (e.g. recreation, housing, education). The need for providing such services and facilities arise from the social responsibility of industries, a desire for upholding democratic values and a concern of employees.
Employee welfare is maintained throughout by the organization and is considered to be one of the highest salary issuers for the Blue Collared one.
Labour welfare is the statutory code controlled by the Factories Act for the benefits of the employees within the existing industrial system. Working and living and cultural conditions of the employees beyond that which is required by the law, keeping in par with the custom of the industry and the condition of the market.
The Factories Act1948, under section 42 to 49 contains certain provision for the welfare of the labour working in the factories. The Kerafibertex promotes the following provisions.
The Kerafibertex provides adequate facilities for washing. Separate and suitable facilities should be provided for both male and female workers.
2. Sitting Arrangement (section 44)
Kerafibertex has proper sitting arrangement for the workers who have to work in the standing position.
3. First Aid Applications (section 45)
The first aid applications provided ensure the safety of workers. If any kind of accident may arise the first aid facility thus provided can be used. The first aid boxes are equipped with prescribed contents, and there should be at least one box for every 50 workers.
4. Canteen (section 46)
Kerafibertex provides a canteen facility completely free to all its employees. 5. Shelter, Rest Rooms and Lunch rooms (section 47)
Kerafibertex provides shelter, rest rooms and lunch rooms. The lunch rooms have proper arrangement for drinking water and sitting plan for workers.
6. Uniform Facility
One of the important specialties of Kerafibertex is the uniform facility. Uniform is compulsory for all workers – regardless to labours and management staff. It creates a sense of uniqueness among the workers.
7. House Rent Allowance Facility
Kerafibertex gives HRA to the employees, but it does not provide quarters to its employees.
Employee Safety and Security
The employees are provided with safety gloves when handling harmful chemicals. They are also provided with helmets, ear plugs, face masks and
special slippers while working the machines. There arefirefightingequipments in case of emergencies.
Due to the excessive sound pollution caused by the spinning machine working in the production department usage of ear plugs are made compulsory to the employees as a precautionary and safety measures.
The dust arising from raw materials (jut and coir) employees are well protected by face masks which act as a safety gadget. Proper clothing (uniform) is maintained inside the unit so as to avoid accidents.
1. The Employees State Insurance Act, 1948
It is compulsory and causative scheme for the well-being of the employees. The Kerafibertex should provide medical benefits, such as medical facilities, treatment, drugs and injections to the insured employees having monthly salary up to Rs. 10,000.
• Employee contribution – 1.75% of salary • Employer contribution – 4.75% of salary Medical Facilities
Under this Act, includes Medical facilities. Every employee and his family are covered under some or other health scheme based on the wage package. At the moment if the salary is below Rs. 7500 they will be covered under ESI scheme. If it is above the limit then a special medical insurance scheme is arranged for them covering the expenses in connection with hospitalization and personal accidents.
2. The Employees Providence Fund Act, 1952
It provides retirement benefits to the employees of a company. Retirement benefits include Provident Fund, Family Pension and deposited – linked insurance.
• Employee contribution – 10.00% of salary • Employer contribution – 8.33% of salary • Family Pension – 1.67% of salary
3. Gratuity Act, 1952
Kerafibertex gives gratuity at 15 days of salary 4. Bonus
According to the Coir Industrial Relation Committee (CIRC), the bonus of coir employees is 30% of one year salary.
Group Life Insurance
It is a plan that provides coverage for the risks on the lives of a number of individuals under one contract. The insurance contract is signed between the insurance company and the employer. The premium of the insurance is paid by the employer at 4% of average salary of employees
5. The Industrial Disputes Act, 1952
It is related to the termination and retrenchment of the employees by a company. Causes of management disputes are:
• Union rivalry
• Political interference • Unfair labour practices etc
Kerafibertex has no management disputes
Absenteeism
It means unauthorized absence of the workers from the job or the absence of worker when work is available. There is no specific rule to deal with this problem. For solving this problem the Kerafibertex provides
• Good working conditions for employees • Increasing industrial production
• Application of no work, no pay policy • Proper checking of attendance register
Non Monitory Benefits
Employees are sanctioned for a tour on yearly basis fully paid by the organization as a part of motivation program and employee welfare.
Motivation
According to W.G Scott, “Motivation means a process of stimulating people to accomplish desired goals”. Better working condition, more pay, opportunities for promotion etc. are some of the needs. To motivate the employees the management has to understand their needs, and satisfy by providing financial and non financial incentives.
Labour Turnover
It is the rate of change in the number of employees of a concern during a definite period. Labour Turnover is another problem of organization. The major causes of labour turnover are:
• Performance of the organization • Characteristics of the job
• Unrealistic expectation • Personal factors
The Kerafibertex has a low turnover of the employees. For reducing the labour turnover Kerafibertex provides,
• Increased pay level to meet competition • Better career opportunities
• Good working conditions
It is an association of employees designed primarily to maintain or improve the condition of employment of its members. Trade unions should not only be consent with protecting and improving the wages and conditions of work of their members but should also be concerned about all such matters by which the latter are likely to be effected whether as producers or consumers, or as units of industrial manpower or as citizens. The company has very good cordial industrial relations.
There is a trade union in Kerafibertex but its involvement in day-to-day activities is very minimal.
Discipline
There are strict discipline codes in the Kerafibertex. Working hours are from 9AM to 6PM. The employees have to record the arrival and leaving times in the log book at the gate with security. If there is a late arrival for three consecutive days, half day leave is marked. But if the late arrival does not affect the employee’s sincerity in his work, no action is taken against him.
Activities done by the trainee • Workers personal files • Time records – soft ware • Time records - manual
• Wage register, wage slip copies, overtime records, security records • Fire extinguisher, fire fighting training, fire grill records
• Yellow marketing, blockage, general house keeping • Emergency lights checking, emergency exit board lights • First aid box, medicine checkups etc
Main duties of HR Manager
• Recruitment of employees • Selection of employees
• Training and Development of employees • Evaluating the performance of the employees • Time management etc
Export & Documentation Department
If the organization gets the order from a customer, it is the duty of the export department to prepare all documents for exporting the products. In the leadership of export manager, there are 4 people working in the export department.
1. Consulting the Joined Director General of Foreign Trade (JDGEFT)
For exporting the products, the organization should get the permission for that from JDGEFT.
2. Preparing Invoice
Invoice is the detailed description of the name of the products, numbers, bundles, prize etc.
3. Bill of lading
Bill of Lading is a certificate getting the captain of the ship. That mention they got the product in the ship and it reveals the responsibility of
MANAGING DIRECTOR
EXPORTING EXECUTIVES PURCHASE EXECUTIVES
them for the goods. It is the document where in the shipping company gives its official receipt for the goods shipped in its vessel. It serves for 3 purposes. • As a document of title of the goods
• As a receipt from the shipping company • As a contract for the transportation
It contains the details regarding date and place of shipment, name of the port of shipment and port of discharge of the vessel, description of goods (net weight and gross weight), quantity of goods, invoice number and date of export and number of packages. The bill of landing is a set of 3 originals.
4. Export credit Guarantee Corporation of India (ECGC)
ECGC is insuring each of the exporting items. For that the company should pay the premium for the products. For different country, it varies. Sometimes the buyers don’t credit the money for the organization. In this case organizations can complaint to ECGC. They will give 80% of the cost for the goods.
Exporting Nations
European countries, South East Asian countries (Japan and Korea), Scandinavian countries, American countries (south and North America including USA, Canada), African countries (northern regions).
Documentation Department
Documentation is the final process of about a product. Documentation department prepare the documents about the product before selling or exporting.
Invoice
It covers the value of goods, port of discharge, final
destination, terms of payment etc.
In documentation department there are mainly 3 types of invoices.
• Performa Invoice • Customs Invoice
• Final / Commercial Invoice
Performa Invoice
It includes the price, category of the product, weight of
goods, register the order etc.
Customs Invoice
It is similar to the Performa Invoice. It includes the price of
goods, category of the goods, weight of the goods and also includes
customs duty etc.
Final Invoice
It is prepared for the buyer. It includes the price of the goods,
weight of the goods, customs duty, name of the buyer etc.
Packing List
It covers the packing details of the goods i.e. Number of
cartons, number of pieces packed per carton, net weight, gross
weight, volume etc.
Dispatch of goods
Once the goods are inspected and packed they are ready for dispatch and agreements are made for the same. The goods that are dispatched can be of 2 types
FCL – Full container Load LCL – Low container Load
In both cases, goods can be sent to the forwarder and can be stuffed at the port, but preferentially goods are house stuffed. In case of in house stuffing, the container is bought to the premise of the exporter; goods are loaded and sealed in the presence of an inspector from the Central Excise Department. Also special permission is required for in house stuffing.
Firstly, the company attains an Import and Export license from the Joint Director General of Foreign Trade (JDGEFT). Then register the customs department and shipment of the products according to the order. At the time of shipment, the forwarding agency issues bill of lading. Then the firm submits documents like invoice, packing list, bill of lading etc to the bank.
If the customer is not paying the money, the firm will get the 80% of the total amount from the ECGC (Export Credit Guarantee Corporation of India)
Shipping Department
One of the smallest department but a fully involved department is the shipping department. Since the majority of trade is taking place to foreign countries, the existence of this department is of great importance. Nearly 6 people with manager works under common roof in this department maintain the shipping procedures and qualities suggested by the production manager.
Pre-shipment document
A week prior to the dispatch of goods, documents such as invoice, packing list are forwarded to the exporter’s forwarding agent.
Export Procedure
• Application for Import Export Code Number • Get membership from Export Promotion Council • Registration in Chamber of Commerce
• Obtain membership from Internal Trade Promotion Organization • Registration with Sale Tax Authority
• Make or Create enquiries • Getting offers
• Accept offer or placing the order • Arranging the finance
• Obtain export License if applicable • Production and procurement of goods • Ascertaining the shipping space
• Packaging and marking
• Obtain the Quality Inspection Certificate • Excise Clearance
• Customer’s formalities
• Exchange control formalities • Getting insurance
• Final shipment of goods either by air wise or water wise
Post-shipment document
• Certificate of Origin • Bill of Lading
• Generalized System Preferences
This is the proof for lading of the goods, die sets (3 originals) to be forwarded to the buyer for clearances of goods at the port of discharge. It covers the volume of goods, port of discharge and notifies address.
Activities of Post-shipment
• Handing over the documents to the banker. • Purchasing or negotiation of bills
Generalized System Preferences
Generalized system preferences is a system where by industrialized developed countries are given preferences, it is a grant by which a preferential tariff treatment is given to certain agricultural and industrial
products imported from originating in the developed countries. The objective is to offer preferential market access to exporters from developing countries. So as to give them a competitive advantage in comparison with similar exports from industrialized developing countries.
Shipping Bill
It is the main document on the basis of which customs permission for export is given. This shipping bill contain particulars of goods exported, the name of the vessel, post of destination, exporters name and address, quality of goods, real value of goods , total weight and net weight.
Mate Receipt
Mate receipt issued by commanding officer of ship when the cargo is loaded on the ship. It contains information like name vessel, berth and date of shipment, description of package marks and numbers, condition of cargo at the time of receipt etc. This receipt is issued to be handed over to port authorities, so that all port dues are paid by the exporters. Once the dues are paid, this mate receipt is returned based on which bill of lading is prepared and issued.
Product Development Department
Kerafibertex is an Italian based company. Kerafibertex, Kakkanad mainly focus on production of coir products as per the order taken by the parent company M/s.Giacomini&Gambarova S, R, L … in Italy. Marketing department of the company is in Italy and its customers are mainly the major ones in the international market.
The kind of product that is in demand would be decided mainly by the buyer as per the trend in the international market, based on the design and colors. The buyers mainly provide the design to the Italy office while placing their order. In rare cases when the design is not mentioned then the product development team in Kerafibertex comes to picture.
According to the dimensions, design and color specified by the buyer the production team designs the coir product. The product development department designs the product for the customer with the required specifications. Specification of the mat means the length, width, weight, design etc.
As per the order, design chart is prepared or samples of the dimensions specified are prepared and sent for approval to the buyer. Once the design chart is approved by the customer the production starts in order to dispatch the goods within the date specified in the order form.
This type of designs is also called in-house design. The in-house design is developed by product development team at Kerafibertex when no design is provided by the buyer. Mostly buyers provide the designs from their end which is known as buyer designs.
New products developed are according to the market demand in the countries to which they sell as this is a fully export oriented unit. The foreign buyers send samples of the product that is moving well at a particular point of time. The design department has to then come up with a similar product. Once that is then sent to the foreign buyer and is Okayed the new design is produced commercially according to the order. This is a continuous process as different foreign buyers need different products.
Compliance & Grievance Handling Department
Broadly speaking, grievance is any real or imaginary feeling of dissatisfaction and injustice that an employee has about his employment relationship. Grievances give rise to unhappiness, frustration, discontent. Indifference to work and poor morale and ultimately lead to inefficiency and low productivity.
Grievance handling procedure is a method by which grievances are settled, generally to the satisfaction of the trade union or the employees and the management.
Complaints affecting one or more individual workers in respect of their wage payment, overtime, leave, transfer, promotion, seniority, work assignment and discharge would constitute grievances. The causes of the
grievances include the interpretation of areas like placement, transfer, promotion and so on.
Preconditions for sound grievance handling • Should be acceptable
• Should be clear • Should be simple
The compliance manager handles the grievances of the employees. The HR manager himself takes the role of compliance manager for the organization. Grievances are handled immediately as they are received. If the grievances are not handled in 3 days; the employees can directly approach the Managing Director.
The compliances are mainly of 2 types: 1. Internal compliance
Internal compliance means the compliance of the employees in the organization. The employees have 3 ways for complaining their problems. • Through letter directly
• Through trade union leaders
• Direct compliant to Managing director.
2. External compliance
The external compliance means the compliance from the outsiders. • Society pollution problems
• Lack of quality of products, change in weight of the products received by the customers etc.
These complaints are handled by the compliance department. The compliance department has a major role in organization.
Chapter – 4
Highlights of Kerafibertex International Pvt. Ltd. (Amt. in ` thousands) Particulars 2006 2007 2008 2009 2010
Share Capital 22058 22058 22058 22058 22058
Reserves & Surplus 26168.73 37579.27 42528.41 50854.38 44046.93
Secured Loans 86492.04 112590.04 145648.85 193907.64 182148.91
Unsecured Loans 141908.8 154659.31 142517.98 135143.65 123406.79
Total debt 228400.84 267249.35 288166.83 329051.29 305555.7
Kerafibertex International Pvt. Ltd. has a share capital of ` ADN 22,058,000. Over the years the company’s total debt is slightly increasing except in the year 2009-10. In case of reserves and surplus maintained by the organisation there is an increasing trend. But the company is not able to declare dividends to its shareholders. Therefore, company is not able to maximise its shareholders wealth.
Ratio Analysis
Liquidity ratio 2006 2007 2008 2009 2010
Current assets 134215.4 138255.2 173528.19 212742.24 190851.57
Current Liabilities 39008.65 53602.26 66654.48 61143.17 59557.4
Current ratio 3.44 2.58 2.60 3.48 3.20
Kerafibertex International Pvt. Ltd. on an average has maintained a current ratio of 3:1. It implies that for every Re.1 current liabilities the company is having Rs. 3 of current assets. It is more than the ideal ratio of 2:1. Based on current ratio of the company, it is evident that Company’s liquidity position is favourable. But there exists a mismanagement of assets of the company. Therefore, company should take necessary steps to utilise the current assets optimally so as to improve its overall performance.
0.00 1.00 2.00 3.00 4.00 1 2 3 4 5
Current ratio
Current ratioCurrent assets 134215.4 138255.2 173528.19 212742.24 190851.57
Less: Inventories 107460.29 116959.55 143294.6 151293.58 124947.2
Quick assets 26755.11 21295.65 30233.59 61448.66 65904.37
Current Liabilities 39008.65 53602.26 66654.48 61143.17 59557.4
Quick ratio 0.68587634 0.3972902 0.4535868 1.00499631 1.10656896
Quick ratio of Kerafibertex International Pvt. Ltd. is fluctuating over the years. The
company has a quick ratio of 1.1:1 which implies for every ` 1 of current liabilities the company maintains Re.1 of quick assets. Based on quick ratio it could be said that the company is able to meet its current liabilities from the quick assets maintained.
Thus based on liquidity ratios it is evident that Kerafibertex International Pvt. Ltd. is
having a favourable liquidity position over the years. The management of Kerafibertex
International Pvt. Ltd should take necessary steps to induce efficient management of assets and liabilities in order to achieve a better position.
0 0.2 0.4 0.6 0.8 1 1.2 1 2 3 4 5
Quick ratio
Quick ratioChapter – 5
S.W.O.T Analysis:
The overall evaluation of company’s strength, weakness, opportunities and threats is called SWOT analysis.
STRENGTHS:
• Different products and price ranges for products according to their quality.
• Better relationship between employer and employee. • Highly skilled workforce
• Better administration.
• Through better quality products, Kerafibertex have acquired wide market.
• Better industrial relation and work culture. • Better leadership and coordination.
• Procedures agro based products. • Maintain eco-friendly atmosphere.
• Better raw materials available at cheaper rates. • Better safety and security measures are taken. • Special attention is given to women and children. • Good financial management system.
• Kerafibertex have undertaken better projects.
WEAKNESS:
• Lack of advertisement and other sales promotional activities. • They use indigenous machineries for production.
• Kerafibertex can avail the opportunity for entering international markets.
• Growing market demand.
• The center for research and training development of Kerafibertex opens new opportunities for their products through innovative ideas.
THREATS:
• Increasing competition in the market.
