K.M.L has grown from a cotton export house into the premier business group of Pakistan with 5 listed companies, concentrating on 3 core businesses; Textiles, Cement and Power Generation. Today, K.M.L is considered to be at par with multinationals operating locally in terms of its quality products and management skills.
I recently have done my internship in Kohinoor Mills Limited, in which I got training from its H.R Department. The internship basically revolved around the employee relation with the organization. The system, the style of working & the commitment of the employees in KML is really an example. The difference between the success & failure is doing things right and doing things nearly right, & KML has always tried for success & that is why it is known to be one of the leading organizations in Pakistan. Irrespective of all these positive points of Kohinoor Mills Limited, I have noticed a few areas where the improvement can really increase the efficiency of KML. I also mentioned about the Textile industry in Pakistan and vision of its industry. Then I have done a detailed PEST analysis as well as SWOT Analysis. Then I have discussed about my learning in the whole internship that is all about the Textile Terminologies and process of the human behavior. I have made it possible to write each and every thing that I have learnt there. I have all my practical efforts in the form of this manuscript that’s the asset for my future career. I have also given the scenario of the whole divisions and also gave the detailed processes that are been running in my internship division (Hosiery including all the departments that are working under Hosiery). I have also mentioned the exporting country’s names to which K.M.L is exporting their products. I have also mentioned the procedures to make salary slips, how to maintain transportation data, colony data etc. I have also given the analysis of the organization according to the ratio, horizontal and vertical analysis and findings on the basis of this analysis. Finally I have also made my findings and suggestions and if I were the manager of the organization then what would be my decision.
INTRODUCTION OF TEXTILE SECTOR
THE PAKISTAN TEXTILE INDUSTRY
According to the Pakistan Ministry of Textiles, an export target of 13 billion USD has been fixed for the year 2007-08. Hence, the textile units in Pakistan have an opportunity to expand the scope.
The textile industry of Pakistan has a total established spinning capacity of 1550 million kgs of yarn, weaving capacity of 4368 million square meters of fabric and finishing capacity of 4000 million square meters. The industry has a production capacity of 670 million units of garments, 400 million units of knitwear and 53 million kgs of towels. The industry has a total of 1221 units engaged in ginning and 442 units engaged in spinning. There are around 124 large units that undertake weaving and 425 small units. There are around 20600 power looms in operation in the industry. The industry also houses around 10 large finishing units and 625 small units.
Pakistan’s textile industry has about 50 large and 2500 small garment manufacturing units. Moreover, it also houses around 600 knitwear-producing units and 400 towel-producing units.
CONTRIBUTION TO EXPORTS
According to recent figures, the Pakistan textile industry contributes more than 60% to the country’s total exports, which amounts to around 5.2 billion US dollars. The industry contributes around 46% to the total output produced in the country. In Asia, Pakistan is the 8th largest exporter of textile products.
CONTRIBUTION TO GDP AND EMPLOYMENT
The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of the work force in the country, which amounts to a figure of 15 million. However, the proportion of skilled labor is very less as compared to that of unskilled labor.
FINISHING LOOK AND CONTROL COMPONENTS
The products manufactured locally, when displayed against foreign goods - offer a poor look – primarily because of the unsightly finishing of welding seams, electroplating, painting and other surface treatments. In addition, the adoption of wrong design parameters, or the attempt to reduce the cost of production, lead to the incorporation of under-sized electrical motors and electric / electronic control panels.
NEED FOR TRAINING INSTITUTIONS
Diploma Level Courses on the pattern of Pak-Swiss Training Centre in Karachi should also be opened in the Textile Institutions in Faisalabad and Karachi and more such courses should be introduced in the Polytechnics in areas like Multan, Hyderabad, Lahore and Gujranwala.
Most of these small workshops are shy or afraid of getting registered or displaying their products, mainly from the fear of the revenue collection, labor controlling and other government regulating agencies. This fear keeps them away from the mainstream Industry. This also leads to the lack of interaction among the small scale, medium scale and higher level industry for a purposeful vendor development.
National Exhibitions held annually can be very helpful in bringing out the skills, the range of products and opportunities of group collaboration. It will help the planners and large scale engineering industry in defining the way for developing skills in order to make this sector strong and viable.
The interaction between the foreign textile manufacturing industries could also be enhanced by facilitating the indigenous Textile Engineering Industry to participate in the specialized Exhibitions and fairs being held in those countries.
INTRODUCTION OF ORGANIZATION
The Kohinoor Maple Leaf Group was born from the trifurcation of the Saigol group of companies and is a reputable and leading manufacturer of textiles and cement. KTMG comprises of Kohinoor Textile Mills limited (KTML) and Maple Leaf Cement factory limited (MLCF). Both companies are incorporated in Pakistan and are listed on three stock exchanges of the country.
Maple Leaf Cement is the third largest cement factory in Pakistan. It was set up in 1956 as a joint collaboration between the West Pakistan Industrial Development Corporation and the government of Canada. It is strategically located at Daudkhel (District Mianwali) in Northern Pakistan, which is an area rich in raw materials required for the production of cement. Kohinoor acquired the ownership and management of Maple Leaf Cement under the privatization policy of the government of Pakistan in 1992. Presently Kohinoor Mills Ltd is the holding company for Maple Leaf cement...
KML was incorporated in 1987 at Mangamandi and is one of the oldest companies of Pakistan with over 50 years experience in textile manufacturing. It was initially set up as a weaving project with 256 looms. However, after decades of aggressive expansion and modernization KML has emerged into a fully vertically integrated home textiles company with state of the art capabilities for Weaving, Dyeing, Hosiery, Genertek, and Hometex. The company has a diverse customer base with sales in both the local and export markets. The main international markets include Asia, Europe, USA and Australia.
Kohinoor Mills Limited was incorporated as a Public limited Company on December 21st, 1987 and is located at 8th K.M., Manga Raiwind Road, and District Kasur. The Company produces greige cloth from cotton, blended and synthetic yarns.
The project was initially established with 48 Sulzer Ruti shuttles-less looms of 153" width from Switzerland with modern ancillary machinery to produce high quality fabric for export markets. Further expansions saw the installation of an additional 96 Tsudakoma air jet looms from Japan in 1990 and a third shed comprising 60 state of the art Picanol Omni 340 cm wide looms was installed in July 1998, twelve with batching motions. Another twelve Picanol Omni 340 cm wide looms were installed in 1999.
In 2000-2001 old 48 Sulzer Ruti looms were replaced by 48 lated Picanol Omni Plus 380cm looms. In addition to that latest Picanol Omni plus Jacquard Looms were also added as well as a yarn conditioning machine from Zorella was also installed.
The entire manufacturing process from warping to fabric inspection is monitored through an on-line process control system from Barco. The marketing strategy is to explore new markets both in quota and non-quota countries.
BOARD OF DIRECROTS
Mr. Aamir Fayyaz Sheikh Chief Executive/ Chairman
Mr. Asad Fayyaz Sheikh
Mr. Ali Fayyaz Sheikh
Mr. Rashid Ahmad
Mr. Aamir Ameen NIT Nominee
Mr. Salman Akram Raja
Mr. Syed Mohsin Raza Naqvi
Mr. Rashid Ahmad Chairman
Mr. Aamir Fayyaz Sheikh Member
Mr. Ali Fayyaz Sheikh Member
CHIEF FINANCIAL OFFICERS:-
Mr. Syed Mohsin Raza Naqvi
HEAD OF INTERNAL AUDIT
Mr. Zeeshan Khurram
Mr. Muhammad Rizwan Khan
M/S Riaz Ahmad & Company
AL BARAKA ISLAMIC BANK B.S.C (E.C)
ALLIED BANK LIMITED
ASKARI BANK LIMITED
BANK AL-FALAH LIMITED
HIERARCHY OF HOSIERY DIVISION
To transform the company into a modern and dynamic yarn, cloth and processed cloth and finished product manufacturing company with highly professionals and fully equipped to play a meaningful role on sustain able basis in the economy of Pakistan.
To transform the company into a modern and dynamic power generating company with highly professionals and fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan.
To provide quality products to customers and explore new markets to promote/expand sales of the company through good governance and foster a sound and dynamic team, so as to achieve optimum prices of products of the company for sustainable and equitable growth and prosperity of the company.
DIVISIONS OF K.M.L
Kohinoor mills has five divisions
KOHINOOR WEAVING DIVISION
KOHINOOR HOSIERY DIVISION
KOHINOOR DYING DIVISION
KOHINOOR GENERTEK DIVISION
KOHINOOR APPAREL DIVISIO
Banana Republic GAP
Liz Claiborne Hagger
K-Mart White Stag
C&A British Home Store
Rose By French Connection
Farah UK Tema
Yakka King Gee
Charles Parsons Farah
H. R Department
MAJOR FUNCTIONAL AREAS WHERE INTERNSHIP CARRIED OUT
HUMAN RESOURCE DEPARTMENT
The H.R Department is the key strength of any organization in motivating employees, managing HRMIS system, dealing external affairs, handling with each department’s performance, making promotions etc…..so my major area was Human Resource Department.
1st THREE DAYS
My start was from manual work as I have been given the task to sort out resigned employee’s files which were almost 8,000 and to rearrange the present employees list in the drawers. I completed my work with in 3 days and got appreciation from my boss. I got my internship letter from the first day of my joining.
After my manual completion I have been given the chance to use their system and they assigned me a task to enter the record of employees who are using vehicles of K.M.L.
And it was oracle based program in which the software was already installed of H.R related activities. This was H.R.I.S, it included
And I enter the data of transportation of almost 400 employees in a day. This data included
• Employee I.D
• Vehicle Number
On 10th of June I did some more data entry of transportation along with some handling of documents in files and arrange the files in drawer. This work is all about the activities which we have read in our semester but there is a difference in the practical work and bookish knowledge.
SUMMARY OF TRANSPORTATION
After entering data related to transportation, I had to sort out the members of other functions like weaving, dyeing, apparel(Home Tax), Genertek, Q- Mart, Pool, because we are dealing with hosiery function so we got to make data related to the concerned function.
REIGNED EMPLOYEE’S FINAL SETTLEMENT
That day was the big day for me because I was given the chance to do the main work of Hosiery’s H.R. There were 59 people who resigned from their job and they had their final settlements. There were following major things that we had to look…….
First I had to rearrange the files according to their department in Hosiery like linking, boarding, boarding hall#1, 2, 3, engineering, knitting team A, B, Quality Assurance, W.I.P.C.
The employee’s details was based on
• Employee I.D
• Employee Name
• Father Name
• Date of Joining
• Date of Leaving
Then I had to enter the presents in the month of April, May and June in the system and calculate in the system.
BREAK UP OF SALARIES
The break up of salaries was based on the basic and the allowances, there were categories of 6,000, 8000, 8100, 21000, 28000 and the basic was 55% of the gross pay and I had to calculate the settlement according to the days presents of the employees in the month.
The G.P.Fund also had to pay back to the resigned employees and that’s been added by 10% of the basic in the sum of G.P.Fund and it added doubled each month. For example if the amount of G.P.Fund is 500 for the month, then it will be added 500+500. And 500 once deducted from the basic salary.
The deductions included
• Advance salary
• Zakat (applied on 16,228 or above of G.P.Fund)
• Advance G.P.Fund
• Interest on G.P.Fund
• Canteen Expense
If the data is not available in the system then we had to calculate the settlement by manually.
If the data is available in the system according to the employee I.D. Then we simply had to give the print option and got the settlement slips.
ACCOMMODATION FACILITY FOR EMPLOYEES
Employees are also facilitated with accommodation facility
Executives are been given hostel facility with respect to the flats which included.
• Luxurious Bed Rooms
• Attached Bath
• Guest Room
Families of employees are also been facilitated in hostel.
WORKERS ACCOMMODATION FACILITY
Workers in the mill are also facilitated with residence facility with some necessary needs of lower level employees.
Entry of Employees in Colony.
There are following three Blocks in the colony and each has held a lot space. And I have entered their data according to their Block and Room Number in the oracle……
• Block -A (90 Rooms)
• Block –B (53 Rooms)
• Supervisory-Block (49 Rooms)
HEALTH & SAFETY MEASURES
Each company has its own health and safety measures according to the compliances regulated by the regulatory bodies. So, K.M.L also has the safety measures so they have to inspect their safety measures morning and evening and it inspects in different areas like…
• Yarn Godown
And the things to inspect are
1. PASSAGE 2. FIRE EXITS
3. HOUSE KEEPING 4. SMOKE DETECTORS
5. FIRST AID BOX 6. FIRE HYDRANTS
7. CONTROL PANEL 8. FIRE EXTINGUISHER
The external audit team came today in the Hosiery function and they checked the whole scenario regarding to the activities been doing in K.M.L documentation in other departments as well as our department H.R. they have asked for the following matters to be disclose for their report, these are………………
• Health & Safety
• List of All Employees
• Salary Slips (Randomly selected I.D’s from a list of employees)
• Employees Personal Files (Randomly Selected from a List of Employees)
OVER TIME DATA
The time that the employees have worked extra hours in the mill.
This need to be entered in the system for the month of May & June regarding to their………
I.D’s Shift (A,B,C,G)
Over Time Hours Double Shift
STAFF PAY ROLL SLIPS
The salary slips of staff of different departments had to be executed in hard copy and that was almost of every concerned department.
NEW EMPLOYEE’S DATA
K.M.L hires new employees from time to time and these employees have to make their personal files it includes…..
• Appointment Letter
• I.D Card
• Academic Documents
• K.M.L Form
So all the detail related to the employee need to be entered in the oracle system it includes……
Division Code (Hosiery 5) Department Code (Including sub departments)
Shift (A,B,C,G) Designated Code
Employee I. D Joining Date
Name of employee Father Name
Card Number Salary Break Up
Date of Birth Status
Address I.D Number
Over Time G.P.Fund
To grant different kinds of leave to its employees in order to facilitate them to attend, to their domestic and social responsibilities.
TYPES OF LEAVE
The types of leave available to employees are………………
1) Causal leave
2) Sick leave
3) Earned leave
4) Leave without pay
5) Maternity leave
1. CAUSAL LEAVE
Every employee will be eligible for ten days causal leave in each calendar year.
1) Causal leave can be granted on pro-rata basis, proportionate to the length of service.
2) Un-availed causal leaves shall lapse automatically at the end of every calendar year.
3) Causal leave cannot be combined with any other type of leaves except sick leave.
4) Causal leave can be availed for a maximum period of 3 days at one time.
2. SICK LEAVE
Every employee will be eligible for eight days sick leave in each calendar year.
1. Sick leave will be granted on pro-rata basis, proportionate to the length of service.
2. Sick leave exceeding 2 days must be supported by a medical certificate from a registered medical practitioner.
3. Sick leave may be Accumulated up to a maximum of 16 days
3. EARNED LEAVES
Every employee will be eligible for earned leave as follows
1. Earned leave will be due only after completion of one year’s continuous service with the company from the date of joining.
2. Earned leave shell be credited to the employee account at the end of each year of service
3. It is incumbent for management staff in grade M-12 and above to avail a minimum of 15 days earned leave in a calendar year.
4. Earned leave lying to the credit of an employee will be encashed at the time of separation for the company for employee up to Grade-12.
4. LEAVE WITHOUT PAY
There is no provision of leave without pay in Law. How ever extra-ordinary leave without pay may be granted at the discretion of the competent authority in special circumstances involving absence from duty.
5. MATERNITY LEAVE
1) Female married employees who have been employed for more than one year will be granted maternity leave.
2) Maternity leave of 12 weeks, 6 weeks each before and after the delivery will be granted on production of medical certificate from a registered medical practitioner.
Company Maintained Car will be provided to the following categories of employees, as indicated against each.
Grade Designation Type of Vehicle
M-19 Director 1600 C.C (Honda VTI) or equivalent
M-18 General Manager 1500 C.C (Honda Civic EXI) or equivalent
M-17 Sr. Manager 1300 C.C (Corolla XE-Honda City EX) or Equivalent
M-15 Manager & Deputy Manager 1000 C.C
The Human Resource Department will issue allotment letter to the eligible official at the time of handing over the car.
The cost of token, comprehensive insurance policy, registration charges, radio charges, radio license fee etc, will be borne by the company.
The limit of petrol/Diesel is as follows:-
Grade Monthly Yearly
M-19 300 Litres 3600 Litres
M-18 250 Litres 3000 Litres
M-17 175 Litres 2100 Litres
M-16 150 Litres 1800 Litters
M-15 125 Litres 1500 Litres
1) The bills with detail of the expenditure incurred on the repairs of the car will be submitted to HR department.
2) Vehicle maintenance card shall be maintained for each vehicle by H.R department.
3) The bill will be forward to finance department for re-reimbursement after making necessary entry in the maintenance card.
4) In case of any damage/accident the allottee will forward “Vehicle Accident Report” to finance department who will arrange repairs/maintenance through comprehensive insurance policy.
5) For other employees company provide the facility of air conditioner buses and vans.
6) The vehicle may be sold to the allottee, after the expiry of the stipulated replacement period on market rates.
Time office does the following activities
• Keep the daily attendance of employees.
• Make the settlement of the resigned employees to be further proceeded to the H.R Department.
• Gives the half leaves or temporary leave for about 1 to 2 hours.
Training room does the following activities…..
• It makes the training arrangements of the newly employed persons and the related department supervisor delivers the training.
• It also prepares employee’s personal file and allot the employee number.
• It makes the employee card with scanned picture.
• It also finds the people who are involved in unhealthy activities in the organization.
Completion of monthly standard working hours is a must to become eligible for full monthly salary, and attendance allowance. Only piece rate employee get attendance allowance.
Kohinoor mills limited set criteria for attendance allowance.
3000 rupees company pay as attendance allowance.
• One absence =3000-500=2500
• Two absence=3000-1000=2000
• Three absence=3000-2000=1000
• Four absence=3000-3000=0
Employee old age benefit institution is as follows for employees who will be given this amount when they will reach to age of 60 for male and 55 for females.
• Paid by company = 5% of minimum Wage i.e. Rs. 300
• Paid by Employee = 1% of minimum wage i.e. Rs. 60
Total Contribution = 6% of minimum wage i.e. Rs. 360
Employees who have salary limit up to Rs. 10,000 are covered under Punjab Employees Social Security Institution.
• Rs 360 i.e. 6% of minimum wage paid by company every month.
• Employees and their dependants are covered under this institution.
• Employees are eligible for benefits (medical facility) under this fund.
• HR department generate reports every month and after verification send to finance department.
• Finance department prepare Cheques for social security.
• Prepare this report under the HR Officer.
Employees having salary more than Rs: 10000 are covered under Adam jee Health Insurance.
Same as social security employees who have salary limit up to Rs. 10,000 are covered under Punjab Employees Social Security Institution.
ADAM JEE POLICY
Insured person’s stay in hospital for a minimum period of 24 hours for either necessary medical treatment of any disease, sickness or accidental bodily injury or treatment admissible in terms of this policy.
Following benefits are covered under Adam jee...
• Daily room and board charges
• Intensive care unit (ICU) charges
• Physician’s visit charges
• Surgical charges
• Miscellaneous hospital expenses
• Day care surgery charges
• Local ambulance cover
• Emergency accidental outpatient cover
• Emergency accidental dental treatment
EFU LIFE INSURANCE
All employees are covered under EFU life insurance. Under this policy all employees are eligible for benefit of life insurance. Sum assured under this policy is equal to minimum Rs.500, 000 and 36 gross salaries of employee.
The resignation is the major problem of most of the organizations, this turnover increases day by day as the policies and conditions been changed with time. So, the employees who have left the organization due to their own problems, terminations, S.O.S need to settle their final dues that company has to pay. There are following rules that need to be followed by the company in order to settle the accounts of resigned employees.
It is the period to which the employees have to inform the organization about his resignation. There are two ways to intimate the organization.
• One Month Notice Period
• 24-Hour Notice Period
1-ONE MONTH NOTICE PERIOD
In one month notice period the employee must inform the company one month before his resignation, for this he has to give the notice to the company that he will leave the organization one month after the intimation is given.
The basic pay which is almost 56% of the net pay will not be deducted from employee’s account.
2-24-HOUR NOTICE PERIOD
In 24-hour intimation from employee, will loose the basic pay of 56% of the net pay. And this could happen in an emergency decision from employee, when he has an emergency or he has settled the things with another organization.
In the termination process the employee has been terminated due to his unhealthy activities in the organization or lack of interest in working. In termination the employee has been given the basic pay and its not been deducted in notice period deduction.
Provident fund also been given in the final settlement of employee and it was been deducted each month by 10% of the basic pay. Zakat is been deducted 2.5% of the net P-fund and its been applied on Rs: 16,228.
Employee’s salary break-ups has the following steps
The basic pay is the 55% of the grand/net pay.
Following are the allowances that are been added in the basic.
• House Rent
• Other Benefits
Following deductions are been made
• Income Tax (Not Refundable)
• E.O.B.I-% of Gross (Employee Old Age Benefit Institution)
It’s been given at the age of 60. Its % depends upon the gross variation.
• P-Fund-(Provident Fund)
P-Fund is deducted each month by 10% of the basic pay and refundable.
• Advance Salary
• Interest on Advance Salary- 60%
• Advance P-Fund
• Interest on Advance P-Fund- 5%
TRANSFER OF EMPLOYEES
As K.M.L has five Divisions, so in accordance to the employees is concerned, transfers been done if require between these divisions, so it is also the responsibility of H.R to update the transfer record in the oracle system. They also got to change their employee I.D’s, because the I.D in which they were working will be changed in accordance to the other division’s requirement.
For example, an employee who had employee I.D in weaving was 149 and he is been transferred in hosiery division in the same designation but with different I.D like 9464.
PIECE RATE SYSTEM
As we know very well that the organizations uses different modes of employment, one of them is the piece rate system, so K.M.L has changed its two of the department’s mode of employment to the piece rate. The Following departments are….
Linking is the department in which the socks need to be linked from the palms. Total 50 employees have been converted to piece rate. So, they got to give the resignation to start their piece rate job for this they got to give their final settlements and make their new files, because the piece rate registration form is different from their permanent employment.
The rate for per dozen pieces is Rs: 1.75/- for linking employees.
In the boarding the socks need to be flexible with the help of the sizes been attached on machines. And 128 employees have been converted to the piece rate system. So their process of mode is same as linking.
The rate for per dozen pieces is Rs: 2.50/- for boarding employees. Their pay will not be as fixed as of the permanent employees and the new employees don’t have the facility of social security for the 1st 3 months but the employees who has been transferred from permanent to piece rate has the facility of social security. There is no system of provident fund in piece rate.
In every organization marketing department plays a vital role for prevailing the organization in the marketing. In Kohinoor the marketing department is also performing his responsibility for the best of the organization. It is engaged in getting orders from customer and fulfills the order according to the requirements of the customer by the follow up of the entire departments.
ACTIVITIES PERFORMED BY THE MARKETING DEPARTMEN
Following procedure is been used
Marketing department send the samples to the customer after getting his requirements by three ways.
• Actual sample
• And by weight
Then the customer sends back the sample by some changing required in that sample, the marketing department again generates the sample and send to the customer.
GETTING THE ORDER
If the customer accepts the second sample then he sends the order for production. The order includes, rate per dozen and the number of dozen to be purchased by him, with the final specification, which includes the following things:
1. Sock Size 2. Shoe Size
3. Welt Length 4. Welt width
5. Top length 6. Top Width
7. Boot Length 8. Foot Length
9. Foot Width 10. Weight
11. Drawing of Sock
SETTING OF PRICE
When the sample is accepted by the customer then marketing department set the price with customer after discussing with general manager. The profit in price is generally set in the range of 30-40k.
MANUFACTURING OF ORDER
Then the order is send to the planning department for running in the production department and the packing requirement is also send by marketing department which is followed by the packing department.
SHIPMENT OF GOODS
When the production is ready for the shipment, the marketing sends the request to the shipping department which makes the shipment of that order.
It works under marketing department and engages in the production of the sampling of marketing department.
WORKING PROCEDURE OF SAMPLING
It gets the requirements from the marketing department and makes the production according to the specification of the customer and sends it to the Q.A department after passing from the related manager of sampling.
WORKING OF Q.A
Q.A precedes the samples by knitting, linking, dyeing and boards it according to the requirement given to them and checks it step by step at each place and at the end it reached to the marketing department which sends it to the customer.
PRODUCTION PLANNING & CONTROL (P.P.C)
P.P.C is the main and the most involving department because it manages the other department’s activities, as the order been placed and been approved by the customer through the marketing department so, it has to mange the order with in the time as it manages the Knitting, Linking, Bleaching (Dyeing), Drying, Boarding, Packing to the end customer.
They have to plan all these activities about how much yarn is required, packing accessories management, and the planning about the fulfillment of the customer requirement.
The commercial department is the bone of every manufacturing concern. It plays a vital role in the manufacturing of the products such as purchase of the raw material and sold of the scrap in the market at the best prices.
MAIN ACTIVITIES DONE BY THE COMMERCIAL DEPARTMENT
The following activities performed by the commercial department. These are
SENDING THE PURCHASE ORDER
The commercial department sends the order for purchasing the yarn from the market. At the best price and the quantity required for the production as well as the quality of the yarn required. The yarn is purchase on the request of the planning department for the specific job and style.
RECEIVING OF THE YARN
Then the godown office receives the yarn as per the quantity ordered and stores it in the yarn store. According to the IGP number and the supplier. Only that yarn is received whose IGP is generated at the gate and which is order by the commercial department.
ISSUING OF THE YARN
Then the yarn is issued as per the demand of the production department. The yarn issued is recorded in the computer. As the record purpose and to find out the balance of the yarn.
RETURNING OF YARN
The excess or the rejected yarn is received back by the commercial department. And recorded it in the record to increase the stock.
SENDING OF THE REJECTED YARN
The rejected yarn is send to the supplier to get the new yarn. And the record is made for the yarn return to the supplier.
MAKING OF THE INDENT
The indent is created from the demand of the yarn on the daily basis and is used to create the oracle record. It shows the issuance and the ending balance of the yarn.
RECEIVING OF THE SCRAPE
The scrape is received from the WIPC department after the weight of every thing and make it inventory in the store. The scrape is arranged according to the quality and the identification.
SALE OF SCRAPE
The scrape is sold to the customer after the bidding of each product the customer who give the higher bid get the contract and lode the scrape in the conveyance, then weight it and made the payment in the form of pay order.
PAYMENT TO THE TRANSPORTER
It is the duty of the godown office people to pay the rent of the transporter after receiving it from the finance department. The payment is made to those who bring the yarn for the factory from the supplier.
GENERATION OF THE REPORT
The godown office generate the different reports required for the different purpose
These reports are.
• Daily issuing report of yarn
• Scrape received report from the WIPC department.
• Report of the sold of scrape
• Report of the balances of the yarn and the scrape
• IGP report
• Yarn indent report
• Bleach report
• Report of the received of the yarn
• Lab test report
• And the at the end of month the all related reports
GENERATION OF THE OUT WARD GATE PASS
The generation of the out ward gate pass is also responsibility of the commercial department; it is generated when the scrape is sold or the rejected yarn send back to the supplier.
The commercial department is also engage in the public dealing in the market for the purpose of making the different contract about the purchase of yarn and sold of the scrape.
SENDING REPORTS TO THE FINANCE DEPARTMENT
It is also responsibility of the commercial department to send the report of the daily consumption and the wastage of the production to the finance department for the purpose of generates different reports for the finance department.
SENDING DETAIL OF THE PAYMENT TO THE SUPPLIER OF YARN
It is the responsibility of the commercial department to send the detail of the payments made to the supplier of the yarn to the factory and then the finance department made the payment on the specify date.
LOCATION OF THE STORE
The material is located in the store IGP vise and then issued it according to the requirement of the job, from the WIPC department.
The finance department is the main department which deal all the transaction related to the finance such as the current transaction of cash, future forecasting of cash, and preparing of the books of account for the daily purpose as well as for the audit purpose. So we can say that for audit purpose it is the main department.
FINANCIAL STATEMENTS INCLUDES
Balance sheet Profit & loss account
Cash flow Statement of equity
Notes to the financial statement
TYPES OF ASSETS
Non Current Assets Current Assets
Comprise those assets which have the future benefit more than one year. There are two types of Non Current Assets:-
Tangible Assets E.g. equipment, building.
Non Tangible Assets E.g. good will, patient, trade mark etc…..
comprise those assets which have the future benefit of one year. E.g. prepaid expense, account receivable, etc ……
TYPES OF LIABILITIES
Current Liabilities Non Current Liabilities
Which have to pay within one year. It includes trade creditors, interest notes payable accounts payable current portion of long term liabilities.
Which have to pay more than one year .it includes long term financing long term deposits security deferred taxation.
PROCESS OF PURCHASES STOCK
Purchaser Purchase order
Supplier Inward Gate passes
EXPLORING THE STORE ADMINISTRATION WORK
• GENERAL STORES
• RAW MATERIALS STORES
In Kohinoor Mills Limited store operations controlled by Store Manager. The function of store is to issue and receive items needed by different departments. So we can subdivided these functions into following categories.
1. GENERAL STORE
PROCEDURE OF RECEIVING GENERAL STORE GOODS
In this regard, production department sends demands of various items to General Manager and he checks the demands that whether it is required by the production department or not. After this he signs on these demands. Then these demands are written on a duplicate book. One copy of these demands is being kept in his record and one copy is being sent to the store in charge. If demanded items are present in the store, then the store keeper issues the same.
If the demanded items are not held in the store, then the store in charge writes required items on a slip called "Indent Slip" and then this slip is presented to the General Manager, who signs the slip and send to the head office. Then head office purchases samples of demanded items and sends to the mills. At the mills, store in charge informs the production department that the required or samples of demanded items have come from head office. The section that requires these items checks these samples as to whether these are according to their requirements or not. Then, the order is given by the General Manager.
The head office sends these demanded items along with their bills and then these items are recorded by store in charge on Store Receipts Note. It is also recorded on store received ledger. From store received ledger these items are also recorded on the Bin-Card, while these Bin-Cards are attached with every type of item. Due to this Bin-Card it is very easy to check each item.
The demanded items which are available in the local market are purchased by the Assistant Manager. While Store In charge checks all these items and then records on Store Receipt Register.
PROCEDURE FOR ISSUE OF GOODS
There is a book of requisition slip in every section of the production department which contains requisition slip in triplicate. If any section of production department requires anything, they have to fill requisition slip on which the signature of the head of the department is essential. Then the store keeper issues the items required after recording it in Daily Issue Register.
REPORTS OF GENERAL STORES
The following two reports are prepared by the Store In charge.
DAILY STORE ISSUE REPORT
This report is maintained daily and kept in a file. In this report issuance of demanded items to every department and balance of items are given. This report is presented daily to Assistant Manager and General Manager.
This report is prepared monthly. In this report the value of all items in the store is recorded at the end of every month. After preparation, report is presented to Assistant Manager who checks it and then sends to the head office.
Production department is concern with the production of the products. Here in the Kohinoor the product is only socks, so it is engaged in the production of the socks of all the styles.
There are two types of machines in Kohinoor with 84, 108,132 needless and with three types sinker on the machines. These are small tyre medium tyre and large tyre. There are four feeders on every machine which supply the yarn according to the requirement.
It includes the following different department, such as
1. Knitting department
2. Linking department
3. Bleaching department
4. Boarding department
5. Packing department
The knitting department is the main department of the production which is used to knit the socks according to the requirement and send to the WIPC department.
ACTIVITIES OF THE KNITTING DEPARTMENT
The knitting department is engaged in the following activities
MAKE THE STYLE WISE PROGRAM
It is the first activity performed by the knitting department to make the program for the production according to the specification of the marketing department which is actually given by the customer.
LOUD THE PROGRAM
When the style is conformed, then the knitting master loud the program with the help of floppy drive on each machine engaged in that style.
SPECIFICATION OF YARN
The yarn running on the machines for every style is specific, so the people in the knitting department check the specification of the yarn.
The production department gets the yarn and makes the production according to the requirement and specification given by the planning department.
CHECKING OF THE QUALITY
The production operator checks the quality of the socks one by one and makes the difference in the form of A and B pair’s according to the quality.
MAINTENANCE OF THE MACHINES
If a machine is stopped or giving the bad quality production then the operator check the machine and set them accordingly.
USAGE OF PARTS OF MACHINES
If an operator under the foremen is using more quantity of spare parts as compared to the standard, then he is answerable for that material.
CHECKING THE EFFICIENCY
The efficiency of each foreman is checked by the knitting manager from the Performa giving by each foreman at the end of the day.
SENDING THE PRODUCTION TO WIPC
The production of the knitting department is send to the WIPC which deal all the procedure of the production.
After the production is send to the WIPC it received by the linking department and start its working according to the specification of the planning department.
ACTIVITIES OF THE LINKING DEPARTMENT
The linking department performs the following activities. These are
RECEIVED THE PRODUCTION
It received the production of the knitting department every day and links it in three shifts.
LINKING OF SOCKS
The socks are linked on 39 automatic machines. One operator links the 280 dozen in a day, which is the standard for every operator but more dozen are given to every operator.
The socks are turned by two ways. First one is by machines and second one by the manually, those which can not be turned by machines are due quality to quality problems.
TRANSFER PRODUCTION TO WIPC
After the socks are linked those are send to WIPC for further processing.
REPORTS OF LINKING DEPARTMENT
Following reports are generating by the linking department. These are
• Daily linking department
• Turning report
• Efficiency report
• Needles report
• Monthly reports
• Yarn consumption report
BLEACHING AND DYING
Bleaching and dying department gets the production from WIPC department, bleach and dye it according to the requirement of the customer. The tunnel is used for the purpose of bleaching of socks. Which bleach a lot after 6 minutes with computerized system.
REPORTS OF BLEACHING DEPARTMENT
This department generates different report. Such as
• Daily production report
• Comical consumption report
• Efficiency report of machine
The procedure of bleaching includes the following steps. The worker lode the socks on the conveyer of specific quantity which is 45kg and machine automatically get the socks; bleach it according to the specification given to it by the operator of the machine.
The boarding department is engaged in the activities of pressing the socks after bleaching and online packing of socks in the department.
ACTIVITIES PERFORMED IN THE BOARDING DEPARTMENT
The boarding department is engaged in the following activities.
RECEIVING OF SOCKS FROM THE BLEACHING DEPARTMENT
The boarding department received a quality socks from WIPC.
SETTING OF THE MACHINES
The machines are set according to the requirement of the customer and the type of the socks. Some socks needs a steam and some with out of it. Specific temperature is set according to the requirement.
CHECKING OF THE QUALITY
The quality of the socks is check after the press if there is any quality problem then the socks are rejected by the quality people.
The problem includes.
• The length of sock
• Any whole in sock
• Pressing problem
• Any knitting problem not explore first.
• Packing problem(related packing material)
• Setting of pairs.
GENERATION OF REPORTS
The boarding department generates different reports. These are
The reports related to the packing and the units board is generated for record purpose and for the daily efficiency of the worker.
The compensation report is also generating by the boarding department. It is needed if the worker made work more then the standard. Then the fixed amount of compensation related to per dozen, is given to the related worker. It is good way to motivate the employee.
GETTING THE PACKING MATERIAL
The boarding department gets the packing material from the sub-store called Packing store, when the socks are in the process of boarding. Only that person gets the material which is specified by the in charge.
RETURNING OF REJECTED PRODUCTION
The socks which are rejected by the quality people are sending to WIPC department.
SOLVE THE QUALITY PROBLEMS
The quality problems which can be set by the setting of the machines are set by the shift in charge of the boarding department.
There are two method of packing, first one is on line packing and second one is off line packing. The off line packing is made by the girls hire by the company and on line packing is made in the boarding department when the socks are pressed.
This department is basically deals with the shipment of goods to the customers.
DOCUMENTS USED BY SHIPPING DEPARTMENT FOR EXPORTS
Packing list is detail of goods packed according to complete specification of product.
Issued by the exporter for the full realizable amount of goods as per trade term.
CERTIFICATE OF ORIGIN
It is required to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract.
It shows the details of goods contained in each parcel / shipment.
CERTIFICATE OF INSPECTION
This document describes the condition of goods and confirming that their quality & quantity is according to order.
BILL OF LADING
Bill of Lading is of different types but Kohinoor mills mainly using two types of transportation sources i-e Sea and air cargo.
When company sends through sea then use shipping documents.
When company use air cargo then airway bill of consignment.
E-form issued by bank. It is the requirement of state bank of Pakistan to fill E-form and submit to state bank for record and any subsidy.
BILL OF EXCHANGE
An unconditional order issued by Kohinoor Mills which directs the recipient to pay a fixed sum of money of their consignment to their bank at future date. The future date may be either fixed or negotiable.
CERTIFICATE OF SHIPMENT
It signifies that a certain lot of goods have been shipped.
Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.
CART/ LORRY TICKET
It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc.
SHUT OUT ADVICE
It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter.
The accounts of any company either a manufacturing concern, trading concern or a banking company are amongst the most easily accessible collections data concerning their performance. However, if they are to be thought of as data they should convey some genuine information about how the firm is doing. That is to say, there must be some useful meanings that can be extracted from the figures in the accounts.
Well-known technique for extracting such information from accounts is known as financial statement analysis. Financial Statements of any concern which are frequently used for financial analysis purpose are:
A summary of financial position on a given date is called Balance Sheet.
A summary of firm’s revenues and expenses over a specified period is called income statement.
TYPES OF FINANCIAL ANALYSIS
Most practiced types of financial analysis include the following
COMMON SIZE ANALYSIS (VERTICAL ANALYSIS)
INDEX ANALYSIS (HORIZONTAL ANALYSIS)
2006 2007 2008
sales 100 100 100
Cost of sales 87.56 85.22 86.92
Gross profit 12.44 14.77 13.07
Distribution cost 4.63 4.38 5.65
Administrative expenses .18 1.92 3.27
Other operating expenses .15 .42 1.67
Other operating income .63 .61 1.27
Profit from operation 6.49 8.66 3.75
Finance cost 6.39 6.39 8.15
Profit(loss)before taxation .09 2.27 (4.40)
Provision for taxation .93 .77 .79
Profit(loss)after taxation (.83) 1.50 (5.18)
2006 2007 2008
Non current assets
Fixed assts 52.46 47.15 44.73
Long term investment .15 .02 2.72
Long term security .039 .04 .02
Stores, spares and tools 3.33 3.56 .42
Stock in trade 17.30 13.76 17.60
Trade debts 13.28 11.57 8.53
Loans and advances 2.94 3.10 6.21
Trade deposits .03 .08 .02
Other receivable 2.47 2.78 2.12
Sales tax recoverable 2.30 1.55 1.26
Short term investment 3.37 14.14 11.95
Cash and bank balance 2.32 1.54 .59
Equity and liability
2006 2007 2008
Share capital and reserves
Authorized share capital 14.06 12.88 12.11
Issued, subscribed and paid up share capital 4.225 4.26 5061
Reserves 17.56 24.99 19.04
Non current liabilities
Redeemable capital 1.53 .46 -
Long term financing 16.85 10.31 9.94
Deferred tax 18.39 2.97 2.76
Trade and other payables 10.54 7.20 9.66
Accrued mark up 1.34 1.27 1.25
Short term borrowing 39.55 40.01 45.44
Current portion of long term liabilities 7.03 7.66 5.83
Provision for taxation 1.37 .85 .45
Total equity and liabilities 100 100 100
2006 2007 2008
Sales 100 119.09 94.99
Cost of good sold 100 115.91 94.31
Gross profit 100 141.43 99.80
Distribution cost 100 112.57 115.79
Administrative expenses 100 127.55 173.31
Other operating expenses 100 289.34 1045.57
Other operating income 100 116.31 192.39
Profit from operations 100 159.98 54.92
Finance cost 100 120.00 121.09
Profit before taxation 100 2860.66 (4415.37)
Provision for taxation 100 98.97 80.54
Profit after taxation 100 (215.24) 592.07
2006 2007 2008
Fixed assets 100 98.09 98.97
Long term investment 100 12 2070.59
Long term security 100 100.99 58.34
Store, spare and tools 100 116.81 147.25
Stock in trade 100 86.78 118.07
Trade debts 100 95.12 74.60
Loans and advances 100 114.90 245.35
Trade deposits 100 264.15 95.82
Other receivables 100 122.64 99.70
Sales tax recoverable 100 73.73 63.94
Shore term investment 100 458.02 411.68
Cash and bank balance 100 72.67 29.53
Total assets 100 109.16 116.09
Equities and liabilities
Authorized share capital 100 100 100
Issued, subscribed and paid up share capital 100 109.99 153.99
Reserves 100 155.32 125.88
Non current liabilities 100
Redeemable capital 100 33.33 -
Long term financing 100 66.76 68.45
Trade and other payables 100 74.62 106.42
Accrued mark up 100 105.88 111.06
Short term borrowing 100 110.41 133.36
Current portion of long term liability 100 118.77 96.16
Provision for taxation 100 68.14 56.41
Total equities and liabilities 100 109.16 116.09
Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance.
CATEGORIES OF FINANCIAL RATIOS
Financial ratios can be divided for convenience into five basic categories
A firm’s ability to satisfy its short-term obligations as they come due is called liquidity. Liquidity refers to the solvency of the firm’s overall financial position the ease with which it can pay its bill. These ratios are viewed as a good indicator of cash flow problems. The two basic measures of liquidity are:
A measure of liquidity calculated by dividing the firm’s current assets by its current liabilities. It measures the firm’s ability to meet its short term obligations. It is expressed as follow:
` Current assets
Current ratio =
Years 2006 2007 2008
Current ratio .79 .93 .84
As our current ratio is less than 1 so it is not the favorable situation for the company.
QUICK (ACID TEST) RATIO
The quick ratio measures the liquidity and is calculated by dividing the firm’s current assets minus inventory by its current liabilities. It is calculating as follow:
Current assets – Inventory
Quick ratio =
years 2006 2007 2008
Quick ratio .45 .61 .49
As quick ratio of 1.0 or greater is occasionally recommended but in 3 years data quick ratio is less than 1 its mean firm is not in better measure of overall liquidity.
It measures the speed with which various accounts are converted into sales or cash inflows or outflows.
A number of ratios are available for measuring the activity of the most important current accounts which includes inventory, account receivable, and account payable.
It includes following ratios:
Average Collection period
Average Payment period
It commonly measures the activity, or liquidity, of a firm’s inventory. It is calculated as follows.
Cost of goods sold
Inventory turnover =
Years 2006 2007 2008
Inventory turnover 4.86 5.14 3.80
Inventory turnover is meaning full when it is compared with other firm in the same industry.
TOTAL ASSETS TURNOVER
It indicates the efficiency with which the firm uses its assets to generate sales. It is calculated as follows:
Total assets turnover =
Years 2006 2007 2008
Assets turnover .82 .89 .67
Higher a firms total assets turnover more efficiently its assets has been used. Company uses its assets more efficiently in year 2006 and 2007 rather than 2008.
The debt position of a firm indicates the amount of others people’s money being used to generate profits. The more debts a firm use in relation to its total assets, the greater its financial leverage.
The magnification of risk and return introduced through the use of fixed cost financing, such as that debt and preferred stock.
There are two types of measuring debt ratio of a firm.
Degree of indebtedness (debt ratio)
Ability to service debts (time interest earned ratio)
It measures the proportion of total assets financed by the firm’s creditors. The higher this ratio, the greater the amount of other people’s money being used to generate profits. It is calculated as follows:
Debt ratio = Total assets
TIME INTEREST EARNED RATIO
It is also called interest coverage ratio, measures the firm’s ability to make contractual interest payments it is calculated as follows.
Earning before interest and taxes
Time interest earned ratio =
There are many measures of profitability. As a group, these measures enable the analyst to evaluate the firm’s profit s with respect to a given level of sales, a certain level of assets, or the owners’ investment.
It includes the following ratios
• Gross profit margin
• Operating profit margin
• Net profit margin
• Earning per share
• Return on total assets (ROA)
• Return on equity (ROE)
GROSS PROFIT MARGIN
It measures the percentage of sales dollar remaining after the firm has paid for its goods. It is calculating as follow:
Sale – CGS
Gross profit margin =
Years 2006 2007 2008
Gross profit margin 12.44 14.78 13.07
The higher the gross profit margin the lower the cost of merchandize sold. Its mean in 2007 gross profit margin is greater in 2007 rather than in 2006 and 2008.
OPERATING PROFIT MARGIN
It measures the percentage of each sales dollar remaining after all costs and expenses other than interest, taxes, and preferred stock dividend is deducted.
It is also called pure profit earned on each sales dollar. It is calculating as follow:
Operating profit margin =
Years 2006 2007 2008
Operating profit margin 0.09 2.27 (4.40)
Operating profit margin represents pure profits earned on each rupee. Higher operating profit margin is preferred in 2007 it is higher so company earned more profits in 2007.
NET PROFIT MARGIN
It measures the percentage of each sales dollar remaining after all costs, expenses, including interest and taxes have been deducted.
It is calculating as follow…
Net profit margin =
Years 2006 2007 2008
Net profit margin (.83) 1.50 (5.19)
Higher net profit margin is preferred which is greater in 2007.
EARNINGS PER SHARE
EPS represents the number of dollars earned during the period on behalf of each outstanding share of common stock. It is calculating as follow:
Earning available for common stockholders
No. of shares common stock outstanding
Years 2006 2007 2008
Earning per share (1.29) 2.78 (6.34)
It represents the rupees amount earned on behalf of each share. Company earned much more rupees in 2007 rather than 2006 and 2008.
RETURN ON TOTAL ASSETS
It is also called the return on investment measures the overall effectiveness of management in generating profit with its available assets. The higher the firms return on total assets the better the firm is.
Earning available for common stockholders
Years 2006 2007 2008
Return on assets (1.29) 2.84 (7.30)
Return on assets indicates that how much firm earned on each rupee of asset investment.
RETURN ON EQUITY (ROE)
The return on common equity measures the return earned on common stockholders investment in the firm. It is calculating as follow.
Earning available for common stockholders
Common stock equity
years 2006 2007 2008
Return on equity (3.12) 4.58 (14.06)
It represents that how much company earned on each rupee of common stock equity.
It measures the amount that investors are willing to pay for each dollar of the firm’s earning. The higher the price earning ratio the greater is investors’ confidence.
Market price per share of common stock
P/E ratio =
Years 2006 2007 2008
Price/earning ratio (16.48) 9.37 (3.43)
It indicates that investors were paying 9.37 in 2007 for each rupee.
It provides an assessment of how investor views the firm’s performance. Firm expected to earn high return relative to their risk typically sells at higher market/book multiples.
Common stock equity
Book value per share of common stock =
Number of shares of common stock outstanding
years 2006 2007 2008
Market/book ratio .51 .43 .50
It indicates that investors are currently paying for each rupee.
HAVING OWN ELECTRICITY PLANT
KML having own electricity power plant which is producing not only for the KWML but also providing electricity to other companies and to govt. at subsidy rate.
ERP (Enterprise Resource Planning) has been installed in KML that’s why company is saving all records in systems and having huge database.
KML has purchased latest power looms Toyota Air Jet Power Looms. That’s why they have reduced the production cost and have increased the quality and efficiency of their textile products.
CROSS CULTURAL COMMUNICATION
In KML there are near about 4500 employees who are from different environments and having different cultures but fortunately there is no cross cultural communication.
KML is one of the major Mills in Pakistan that’s why they have little bit reputation in local market and having trust from investors.
EMPLOYEE’S MOTIVATIONAL LEVEL
The one weakness of KML is that their employees are not motivated that’s why they are getting off and putting their resigns in front of managers and executives. This is the responsibility of HR department to find out at to see at the time of hiring them that what the thing is that their employees can be motivated.
EVERY BOOKED ORDER IS DELIVERED LATELY
The delivery of each contract is always not done on time. The customer has to wait for 4 to 5 weeks to get his/her desired product. The main reason is that late purchasing of raw material. Raw material just like Yarn and Sizing material is not available on time and some time it happens that there is shortage of raw material during the running contract that’s why production department has to wait for the raw material.
There are high overhead charges through out the year particularly administrative expenditures. Management whether it is lower management or upper management, the expenditures are same but company is getting equally profit from them that’s why expenditures are increasing.
RELIABILITY ON FOREIGN CUSTOMERS
Always organization has to rely on foreign customers and it would become risk especially in financial matters and possibility of fraud would be there. KWML is too much depending upon their foreign customers. They have limited number of foreign customers but these are also losing by lacking of quality and little bit high cost.
Commercial department of KML is showing its little bit bad performance. Means always the yarn is purchased late and on credit and payments are done by the department always very late. There is no proper or pre-plan for the month or for couple of weeks so that amount should be received to pay the suppliers. Each time purchasing of yarn is done belatedly so that looms not run and hence per day cost increased and depreciation also.
There is no proper placing for final products to place them safely and at the time of their dispatch there is possibility of mistake.
It’s good that KML has ERP software in their systems. But there are number of errors that are occurred much time. For example, during the dispatch of product, you have to click all the rolls manually. There is no option to select them all and other problem is to calculate the weight of packed rolls. You have to do all these things manually.
There are a little bit gaps in communication between the departments. May be these confirm each and every thing from each other but still they make mistakes and blame each others to safe them.
A major problem is team building. There is almost no concept of team. Each person is doing individually and performing his/her activities.
The attitude among the employees is very casual. No one following the rules and regulations of the company. Some implementation is done among the executives but not at managerial level.
HR Department is almost useless and only performing two activities. These activities are making salaries and attendance of the employees and workers. They are not working to train the employees and making appraisals to evaluate them.
MARKETING OF TEXTILE PRODUCTS
KML has no proper planning for the Marketing. They advertise about their selves only from newspapers. That’s why limited number of people knows about them.
As we all know that the political situations of Pakistan are one of the worst situations of the whole world. Each new government establishes its new rules and regulations which impact the industries badly. Now a day there are many major issues which are affecting the textile industry as well as other countries just like Musharaf’s impeachment, PM Shaukat Aziz Fraud, New elections for Provisional and national assemblies and the major issue was the murder of BB Benazir Bhutto. Now the new government of Pakistan has implemented some new rules for the textile industry which are almost of them are not in fever of the industrialists. These are
• 31% increment in the prices of Gas
• Near about 10 rupees per liter increment in price of petroleum
• Bann to export the raw cotton
• No subsidy for the research and developments in the textile industry
Against these rules and implications, All Faisalabad Textile Mills boycott in July 2008 by shutting down their Mills and factories. Now the government has provided them some subsidy in gas field.
HIGH CONSUMPTION OF PETROLEUM
The high consumption of the petroleum is also the major issues because in international market, their prices are going up and touching sky, due to which the freight costs are increasing day by day and hence the cost of production, is also increasing rapidly which is becoming the reason of losing foreign customers of Pakistan.
SHORTAGE OF ELECTRICITY
The government of Pakistan still unable to provide the required quantity of electricity, the usage of electricity has been increased. The companies who have their own electricity plants are save but those who don’t have are facing a major problem of shortage of electricity.
Kohinoor Mills limited is facing a major problem of their employees because they getting off from KML. They think that they are not getting reasonable and valuable salaries and incentives from the company. The major reason is also that company is losing its value and reputation in the local market as well as in international market, that’s why they are getting off from the company to secure their future and present as well.
POOR RESEARCH & DEVELOPMENTS
KML has not been working for better Research and Development Department for some years. They are not focusing to improve their technology and expand their market share. They just keep focus on their current systems which are producing not too much good quality products that’s why some of foreign customers are dissatisfied from them and shifted towards other suppliers.
INCREMENT IN FREIGHT CHARGES
The prices of petroleum have been increased and still increasing rapidly. That’s why the freight charges have been increased and the cost of productions has also been increased by the huge amount. Due to these increments, the sale price has also been increased but customers are not ready to pay more for a good quality instead of better quality. And transport companies are demanding more increments to use their transportation services.
INTERNATIONAL AND LOCAL COMPETITORS
One of the major threats at international level which KML and textile industry of Pakistan has to face, is international competition which is growing up and competitors are capturing the market share rapidly that’s why Pakistan’s market share in foreign market is cutting down gradually due to high cost but poor quality of their textile products.
In local market, there are many companies in Pakistan who are improving their quality of textile products by acquiring new technologies. The big giants of Pakistan textile industry are
NISHAT TEXTILE SAPHIRE TEXTILE
KTM TEXTILE COLONY TEXTILE
YUNIS TEXTILE AMTEX
CHENAB TEXTILE AL-KARAM TEXTILE
GULISTAN TEXTILE FAZAL TEXTILE
LOWEST PRICE OF FABRIC IN WORLD FOR USA & UK COUNTRIES
This would surprise for all of us that Pakistan is offering lowest prices the UK and USA market. But sorry to say that these prices are coming down gradually due to losing the quality in their products and services as well. In USA the price per meter is $0.91 which is the lowest price in compare with other international and especially Asian Suppliers.
The technology has been improved for the textile industry and these technologies are being acquired by the international competitors as well as by local competitors so they are producing good quality textile products and increasing the efficiency as well as decreasing the cost of production. KWML has the opportunity to invest for the new technology. By acquiring the latest technology, they can increase the production quality, efficiency and can decrease the cost of production.
MOTIVATING THE EMPLOYEES
HR department can prove and show them they are here for employees by motivating the employees performing their best. They can find the motivation level of their employees and give them incentives to motivate them.
PROJECTS FOR THE LOCAL MARKET
KWML has the opportunity to capture the market share locally by launching new projects just like they have launched “Dhanak “in August 2008. They can start new projects in garments, Apparel or Home Tax, Dyeing, Hosiery.
KML has the opportunity to advertise about their selves to promote their textile products.
• They can advertise in international magazines about themselves
• KML can publish its own local business magazine to promote themselves
• Can also be advertised over the internet (electronic Marketing)
KML’S OWN SHOPS
KML can open its own shops in local market where they can display their garments products (socks, Trousers) and Apparels as well as curtains.
ONLINE SHOPPING STORE
KML can open its online store where they can show their garments variety and apparels. The advantage of this step would be
• Online Marketing
• Capturing the market over internet internationally
• Capturing the market over internet locally
• The material which you put on your fair price shop can be sold out at online shop
Uneven political conditions, deteriorating law and order situation and instability in gas and electricity prices are adversely affecting the textile sector, while government has hardly taken any step to give some relief or incentives to the mill owners. Textile mill owners and exporter have strongly denounced the recent 31 percent increase in the gasoline prices and demanded from the government to withdraw the recent increase and take serious steps to help textile industry survive through difficult times According to the sources, if prices continue to increase at current rate, the textile industry would find it difficult to survive as the recent increase has already proven deadly and many mills have started to shutdown in the wake huge price increase. It was also witnessed that due to prices increase in gas has not only adversely affected the productivity of the textile industry but has also caused sudden increase in the production cost and has badly affected the economy of the country. On the other hand, textile and the other exporters also facing a lot of challenges due to increase in the production cost of the specific export goods, while such hurdles badly affected the Pakistani exporters to meet the challenges and compete in the local and international markets. Exporters are demanding that government should give them facilities to cope with the existing challenges and not get involved in favoritism.
The main political factors which are attracting the industries and as well as for the whole world are
• Musharaf’s Seat
• Arrested Judiciary
• Benazir Bhutto murdered
The murder of Benazir Bhutto was infuriated matter. Number of people came out with a great anger and numbers of textile companies were burnt by them, just like in Karachi happened. The other issue was neat & clean elections of 2008. No doubt those elections were being held neat and clean but the opposition did not accept the results and new government is still try to control the factors which are creating disturbance. As it is mentioned above that the govt. of Pakistan increased the prices of Gasoline and petroleum, which are the basic needs for the textile industries. In July 2008, the textile companies in Faisalabad shutdown their companies against the 31% increments in prices of Gasoline, also increased the prices petroleum by 10 rupees. Still no satisfied procedure has not been implemented by the Govt. of Pakistan.
Tight monetary policy also creates a lot of hurdles for textile sector and exporters, and rapidly growing interest rates of the banks is causing the shut down the power looms, and it also crushing down the textile industry and exporters, added sources. The industrialists rejected the imposition of 10 percent withholding tax on electricity bills, small and medium industries, and power looms, while they demanded withdrawals of 10 percent withholding tax immediately for the survival of the industrial sector of Pakistan. Then again, the government is failed to decrease the every day increasing trade deficit. Textile sector of Pakistan contributes huge amount in the economy of the country serious measures are needed for its revival.
Economical factors are also disturbing the all industries of Pakistan as well as the textile industry. From 1999 to 2008 the inflation rate has been increased by 100%. The last and current Government has been failed to control the economy. As the prices have been increased, the suppliers try to get and save more profit from their investments. That’s why prices are decided and put with a high return in terms of profit.
Before 2008, textile industry was getting number of incentives from the government just like R&D (Research & Developments) and subsidies on the utilities. But some companies misused these opportunities and unfortunately Govt. pulled back these types of incentives.
The main problem with the textile industry is shortage of electricity, gasoline and petroleum, due to which Textile industry is bearing too much cost that why they have to increase their prices to earn profit or for break-even. There are some companies which have their own electricity plants but they have to spend a lot of money to run them.
Other problems which are facing by the textile industry of Pakistan are
• Not availability of skilled labors.
• Labors cost is increasing rapidly
• Loosing quality of its products in both markets domestically and internationally
• Poor monitory and Fiscal policies of the Govt. of Pakistan
• Uneducated people
• Investors are pulling out their capital from the market quickly
• Foreign Investments are not coming towards Textile industry
These are the factors which are disturbing the textile industry strongly economically.
Textile industry affecting the society and environment in number of ways, some of them are mentioned below.
• Polluting the air by pushing out ruins of chemicals. Different gases in air react with these ruins which become dangerous for human beings.
• No proper system to throw out the useless materials and chemicals.
• Most of the useless materials and acids are thrown into the fields which are react or disturb the agricultural products seriously.
• Since the cost of the production and labor cost are increasing day by day. That’s why the final product cost is also increasing that’s why people are buying low quality products and not spending too much to purchase.
• Textile companies are firing the labors and employees as well because of high production cost and salaries that’s why the unemployment rate is increasing day by day which is not good for the industry as well as for the country.
The technology has been improved and updated in the textile industry of Pakistan and some of the companies in textile industry are acquiring these technologies. By using new technology not only they improve their quality and efficiency but also improve their production as well as reducing the cost of production.
CLASS ROOM APPLICATION IN THE ORGANIZATION
These are the activities been performed in the organization that we have studied in our course. So, basically I was doing internship in H.R Department so following activities been done in the organization in H.R Department according to the topics been studied in the class….
Two ways been performed
In this employees who are working for quite a while and the workers been judged on the basis of their performance been given the chance to fill the vacancy higher than their post and they could also give references to their relatives.
Ads been placed by the H.R Department in the news paper (Jung) with the job description and job specification and attractive salaries are also mentioned.
For the selection process different steps are been conducted
• Interviews been conducted for the respective seat.
• The managers or the supervisors conduct the interviews of the concerned department to whom the call for job been placed.
• Tests been taken regarding to their skills is been concerned.
• Scoring is been done according to their performance in the interview, test results and their academic achievements.
• After the process of selection the selected employees been given the orientation About organization culture and values; rules and regulations; salary details.
• They have also been asked about their probation period
For staff it is of six months.
For workers it is of three months.
• Lay offs and terminations and resignations are also been done during this period.
• All other incentives are also been noticed to employees like social security, E.O.B.I, transportation and residence.
Training is also being a part of job. So, K.M.L also does the training in the following ways….
• Training given in the training room where different presentations been presented to the new employees.
• Training is also been given on spot where the actual work is being done.
WHAT I HAVE LEARNT IN THE ORGANIZATION
I have learned the things which I could never been able to learn at university level that I have learnt in the first step of professional life……
In the professional life, you got to be punctual at any step whether you are in the house or in office, because it is the demand of the working line where you must obey time, as I learned to be punctual in office but was a bit slippery in university. My sleep time, my wake up time and my task accomplishment time was all about to be punctual.
2. OBEY YOUR BOSS
It’s been the responsibility of an employee to always obey your boss every time whether you are in angry mood or in jolly mood and same as to your boss.
3. RESPECT EVERY INDIVIDUAL
The major success in life is to always be happy with each individual even though he is in low status, because if you are kind to every one they will remember you till death, as my behavior was so pleasant to every one, now I have had their admirance and in their good books and have a chance to get job after completion of M.B.A.
4. HARD WORK
The main thing that I have learned from K.M.L that every individual is so hard working and committed to their work that it forced me to do the same thing. So, I tried my best to have hard work and I got good remarks from my supervisors.
SUGGESTIONS & RECOMMENDATIONS
1. They can advertise in international magazines about their selves
2. KWML can publish its own local business magazine to promote their selves
3. Can be advertised over the internet (electronic Marketing)
4. By holding the seminars on textile industry and offer to attend the seminars to their customers
5. International business seminars in multiple countries and offer their products to already existence and new customers.
6. Make a documentary as a business story about KWML and offer it to show out through such channels which can accept this offer for example National Geographic Channel which shows such programs on different companies in the world.
7. Monthly Budget, by making monthly budgets for each department especially for the commercial department, the late shipments and late purchasing of yarn can be vanished.
8. Organize fashion shows in foreign countries as well as in local markets.
9. The H.R Department should be advanced with every respect not only in making salary slips but also for the other related issues to be occupied to make efficiency.
IF I WERE A MANAGER IN ORGANIZATION
If I were been the manager of H.R Department I would prefer to have some of the innovations that could really be needed by the company such as……….
1. JOB SECURITY
Job security is been the major push up in the growth of any organization, as it could lead towards the satisfaction of security in employment. If an employee has the security that he would never loose his/her job he would prefer to work harder to have good position in the company. But due to the insecurity of job the employees are been afraid to loose their jobs at any time, because the management have not had so much interest in retaining the employees and ultimately the employees have not had interest in working hard. So my first preference is to give job security to the employees.
Motivation is the key success in the long run of the organization. So I would like to motivate the employees by giving them bonuses, promotions and increments according to their brilliant performance. This element is also been lacking in K.M.L.
3. CUTTING DOWN TOP MANAGEMENT’S EXPENSES
The main problem is the extra expenses that’s been done by the top management is to reduced at a high level, because the H.R Department is responsible to show their interest in having the expenses in their limit.
4. HIRING THE LABOR FROM NEAREST TOWN
The hiring process needs to be done from the nearest towns, as it cuts the transport expense that the company is bearing for the employees who belong from the far towns.
Detail From the Concerned Departments
Mr. Zubair Masud (H.R Manager) 03334998852
Mr. Waseem (H.R Officer) 0301-7564161
Mr. Mian Asif (Assistant) 0300-8048832
Miss. Gulnaz (Assistant Manager) 0334-4762102