1I undersigned NIDHI VADODARIYA SATISHBHAI a student of Second Year Bachelor of Business Administration, hereby declare that the project work presented in this report is my own work and has been carried out under the supervision of Ms. Darshita Ganatra of Christ College Rajkot. This work has not been previously submitted to another university for any examinations. Date:Place:Signature (Nidhi Vadodariya Satishbhai) 2 Practical studies are important in almost all aspects of human life. Keeping this in view, the Saurashtra University has included the subject of practical studies in Bachelor of Business Administration. In S.Y. B.B.A. the objective of industrial training is to give a picture of the organization and its functioning in an industrial unit. It is quite interesting to know practically the aspects of the working of a manufacturing unit. The unit I selected was SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD (RAJKOT BRANCH) a leading manufacturer of papad. After the training program, I have learnt a lot and have carefully collected the information, which is presented here in the best possible manner and to the best of my ability. I am sure this would enhance my knowledge about business practice and management in various fields of business administration. 3 It is my great pleasure to present this report before you. I sincerely thank all the officers and staff of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD for their cooperation during the training and for providing me the essential details of the working of the company. I am also thankful to Madam Darshita Ganatra , Madam Charmi Badani, and Madam Vinita Agrawal for their valuable guidance and suggestions throughout the preparation of this report. I would also like to thank our principal, my parents, my classmates and my friends for their encouragement and support during the work. I have tried my level best to present the available information in the best possible manner. Sr. No. Particulars Page No. 4 1 2 3 4 5 Sr. 6 no. 1 7 8 General Information Production Department Personnel Department Marketing Department Finance Department Particular S W O T Analysis Future Plans Introduction Suggestions Conclusion History & Development Bibliography Company profile Organization structure Page no. 29 10 3 4 5 SHRI MAHILA GRIH UDYOG LIJJAT PAPAD is a women’s organization manufacturing various products like papad, Khakhra, Appalam, Masala, Vadi, Gehu atta, Bakery products, Chapati & detergents. The organization is wide spread with it’s central office at Mumbai and it’s 67 branches and 35 division in different states all over India. 6 The organization started of with a sum of Rs.80 and has achieved sales turnover of Rs.300 crores with exports itself exceeding Rs.12 crores. Membership has also expanded from an initial number of 7 sisters from one building to over 40,000 sisters throughout India. There were tenements by ‘’LOHANA’’ trust situated in Girgaun in south Mumbai. It was difficult for the middleclass women to get jobs at their doorsteps. In search of job they developed an idea of making papad. Also this job was well known by all the women so they tried to implement it. One sunny day, 7 of those women organized a meeting on the terrace followed by rolling out 4 packets of papad and decision of making papad in future. This was a small beginning of ‘’SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD’’ dated 15th March 1959. The institute made a beginning under the blessings of Shri Chhaganlal Karmshi Parekh popularly known as ‘Pujya 7 Chhaganbapa’ who is considered the ‘ Pitamah’ of the institute. He was a member of the Servants of Indian Society & a social worker. He was a very noble man. In the early stages, the path was too difficult. The institute started with a borrowed sum of Rs.80 under the condition to return Rs.200 under a stipulated period of time. The institute has opted the principle of self-reliance from the very beginning. Thus no monetary help was accepted from any side. Even voluntarily offered donations were not to be accepted. So the work started on commercial footing as a small scale venture. The turning point came when the then chairman of Khadi & Village Industries Commission, Shri Dhebarbhai visited the institute and got it recognized by the Khadi & Village Industries Commission. 8 Name of the unit: SHRI MAHILA GRIH UDYOG LIJJAT PAPAD Form of organization: Year of establishment: Registered office: Co-operative society 1950 Oracle Point, 3rd floor, Next to Sahakar Bazar, Opp. Railway station, Bandra (West), Mumbai-400 050 Post box no. : 9817 Telephone no.: Fax: Web site: Branch office: (022)26427282 (022)26420688 www.lijjat.com Opp. Swaminarayan Gurukul-Post office, Gondal road, Rajkot-360 004 Phone no; (0281)2362657 9 Fax: 0281-2362671 President: Vice-president: Secretaries: Smt. Jyoti J. Naik Smt. Kamal D. Dhandore Smt. Sunanda R. Belnekar Smt. Gangavati H. Naik Treasures: Smt. Kshama M. Sutar Smt. Priyanka G. Redkar Bankers: Bank of India Bank of Baroda Auditor: Products: Sanghavi & Associates Papad, Khakhra, Masala, Vadi, Gehu atta, Bakery products, Chapati & detergents. Brand Name: Lijjat papad SASA detergents No. of employees: Branches in India: Branches in Gujarat: Branches in Rajkot: 40,000 67 14 2 10 MANAGING COMMITTEE OF 21 MEMBERS 6 OFFICE BEARERS PRESIDENT VICE-PRSIDENT 2 SECRETARIES 2 TREASURERS Sr. No. 1 2 Introduction Particulars Page No. Organization structure 6 OFFICE BEARER 11 3 4 5 6 7 8 9 10 11 12 13 14 Production Planning & control Raw Material Production Process Machine capacity & maintenance Plant Location Plant Layout Inventory management Quality Control Scrape and Waste Management Store Keeping Material Handling Industrial engineering Production department is one of the most important departments of any industrial unit. Without this department all the other departments are of no use to the company. Production 12 means the conversation of raw materials into finished products with the help of certain processes. The aim of any production system is to produce desired goods effectively and efficiently. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is a manufacturing unit and hence production department is of due importance for the institute. I have visited its RAJKOT branch, which carries on the manufacturing of only papad. In this branch the production department is handled by the head manager (whom they call SANCHALIKA) of the branch, Smt. Jayshreeben Bhatt. The organization structure is very important in the production department. It clarifies the position of every member and the members come to know what they are expected to do at 13 different levels. Following is the organization chart of this unit:- Branch Manager Production head Quality Control Head Production supervisor Sisters The planning and control of production is one of the important tasks of production management. It is essential that 14 production work is carried out in the best manner in the lowest cost, and the goods are of best quality and are produced at the proper time. This can be ensured only through proper planning of production. Production control is concerned with direction and guiding production along the lines set up by the planning department. It evaluates the actual performance in the light of plans formulated by the planners. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, this function is carried out by the production head in accordance with the demand in the market. Thus the production planning and its control are done by the production head with the help of supervisor, although the ultimate authority is held in the hands of the branch manager( Sanchalika). Raw material means the materials which are used in the production process. Raw material includes the materials obtained 15 from land, forest, sea, etc. It also includes semi-finished goods used in the manufacturing process of any product. Following are various raw materials used for production purpose in SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD:- Udad ( for udad papad) Mung ( for mung papad) Chili Garlic Black pepper Hing Water Salt Soda Production process is the process of conversion of various raw materials into finished products to satisfy the needs of the customers. The difference between the value of inputs and outputs represents the contribution of production process. It 16 converts the raw materials into finished goods and there by increases it’s utility. The production process of papad at SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is as follows:1) In the first phase, water is made Luke warm after adding salt and cooking soda. 2) After that, Udad is grinded in a machine . This process of transforming raw udad to udad flour is called pulverization. Approximately 250 tins (each containing 11 kg of flour) is made every day. 3) Then after, grinded spices are added manually in each tin after weighing them. Every tin is added with 300 grams of spices. 4) In the 4th stage, water is added to this mixture to make it 17 kg of lot. 5) This lot is then transferred in a big iron plate and mixed manually to make it soft. 6) Finally, it goes to the weighing machine and is distributed to the member sisters for rolling purpose at morning 5 a.m. 7) Sisters bring rolled & dried papad from their home ,the next day. 17 8) This rolled-dried papad is again weighed and checked before packing. 9) Then this papad are packed in plastic bags and sealed with the help of sealing machines. 10) Finally, the packets are moved to the storage area for store keeping. 18 The machine capacity is the average units a machine is able to produce. These machines are needed to be checked and maintained regularly for a smooth production process to continue. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, there are mainly two machines used for production process, namely milling machine and grinding machine. Generally, they can be used for any number of hours. For the maintenance of these machines, VALLABHBHAI is appointed, who looks after machine maintenance. Also, mechanic NATUBHAI attends these machineries every week for regular check up. 19 The chief objective of an industrial concern is to maximize the profit through the minimization of cost of production. This is possible when the firm is of the right size and is located at the right place. It must be clearly understood that an optimum location is very much helpful for the smooth functioning of the unit. The factors which usually determine the location of industrial unit may be described as under:- Availability of raw material Markets Transport facilities Availability of labour Power supply 20 This branch of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is located at Gondal road opp. Swaminarayan Gurukul post office. The unit selected this location because the backward class females can easily be reached in this area. Also the unit secured this piece of land at a cheaper rate from the corporation at request. 21 Plant layout refers to the arrangement of the facilities including production centre for the manufacturing of a product. In thinking of work improvement techniques, the relationship among work-centers is one of the most important item. The plant layout of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is as follows:- 22 All the goods between the receipt of raw materials and the dispatch of finished products to consumers are known as inventory. Inventory includes raw materials, component parts, semi-finished and finished products. Inventory control means control over materials lying in store. Inventory control keeps continuous track of inventories. Inventories control aims at the following objectives:1) Never run out of anything (out of stock). 2) Never build up a very large inventory. 3) Never send too many small costly orders for more. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD has different stores department in which there is a systematic storage of inventories i.e. raw material, semi-finished and finished goods such has hing store, pepper sore, etc. 23 Quality control is the control of quality during the manufacturing process. Quality control detects the causes of variations in the characteristics of products, and indicates the necessary adjustments by which these variations can be controlled. Thus, “Quality control is the systematic control of those variations which affects the excellence (prescribed norms) of the final product”. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, there is no separate department for quality control but the production process is checked at various stages to ensure a standardized and qualitative output. Like for example, all those broken rolled papad, which comes after drying in the sun, are not accepted and sent back to the roller of the papad. Also each and every unit of papad is checked before packing so that they can supply super quality papads to their customers. 24 The unnecessary accumulation of absolute, surplus and scrap items is said to be waste and enough capital is blocked in it. The increase in all such items will increase the product cost which in turn will reduce the profits. Therefore efforts should be made to manage such scrape and waste materials The firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD has a very nominal scrape in the name of bits of plastic bags used for packing. These are thrown in the RMC dustbins. Thus, as such there is no special effort which is required to be made for scrape & waste management in the firm. 25 Store keeping is that aspect of material control concerned directly with the physical storage of goods. The principle function of store keeping is to act as a clearing house for goods i.e. receipt of goods bought and issue of need materials in the plants as per orders. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD maintains a computer online system for the purpose of stores management. They make entries for each and every purchase, sales, or transfer of goods or materials. Thus records of every materials starting from purchase to final production and finally to sales is maintained in this system. The function of store keeping is performed by Rashidaben Shama while raw materials are handled by Zarinaben Sumra. 26 Material handling involves the movement of materials from one place to another for processing. They are moved either manually or technically with the help of different types of material handling equipments. In the firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, no material handling tools, or equipments are used, as it is not required. Everything is carried manually as they are light in weight. 27 Industrial engineering activity is concerned with operational analysis, study of worker’s movements, work simplification, methods and improvements in the place of work and all those activities intended at improving efficiency, reducing labour cost and improving the productivity. The firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, adopts standardization policies for the purpose of industrial engineering. 28 Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Particulars Introduction Organization structure No. of sisters Recruitment & Selection Induction & Placement Training & Development Promotion & Transfer Performance Appraisal Wages & Salary Administration Personnel Records Time Keeping Industrial Relations Grievance Handling System Personnel Benefit Services Collective Bargaining Job Analysis Working Conditions Page No. The personnel function is concerned with the procurement, development, integration, and maintenance of the personnel of an organization for the purpose of contribution towards the accomplishment of its major goals and objectives. 29 Personnel management is very important in the smooth functioning of any kind of organization. Whether it is a manufacturing firm, a government organization or a non-profit making trust or club, man is an active factor of production which controls and co-ordinates all other factors. Personnel department holds the supreme position in the firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD. The organization believes that all the women in the organization are its owners and all women are equal whether it’s the head manager or the supervisor or the woman rolling papad. Thus the organization works as a family for the benefit of its members. 30 An organization structure indicates relationship between the employees of an industrial undertaking. It indicates a clear relationship between authority and responsibility for the employers. The organization structure of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is as under:- Branch manager Personnel manager Member sisters 31 The no. of sisters (as they call to every woman in the firm) means the total sisters working in the firm for all the shifts. There are in all 40,000 sisters working in this institute all over India with 1000 in its Rajkot branch. There are also few male workers serving the unit at administration level. No. of skilled sisters No. of semi-skilled sisters No. of unskilled sisters - 10 100 890 32 RECRUITMENT:“Recruitment is the process of development and maintenance of adequate manpower resources. It is the positive process of employment.” The success of any organization depends upon the skill of its employees. Thus, a proper recruitment procedure is very much necessary for the benefit of the firm. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, for the recruitment of managerial staff first the internal sources are given importance. This means the educated daughters of the sisters working in the unit are given a chance first. And if a desired candidate is not available from internal source then advertisement is given in the newspapers for recruitment purpose. SELECTION:- 33 “Selection is the process in which candidates for employment are divided into two classes, those who are to be altered employment, and those who are not”. The selection procedure of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is very simple. A planned interview is conducted for the candidates applying for the job. Questions relating to the task to be performed are asked and if the interviewer is satisfied with her answers, she is selected. The task of interviewing and selecting the candidate is performed by the branch manager (i.e. sanchalika), Smt. Jayshreeben Bhatt. 34 Induction programs are meant to induct a new employee into a new social setting of his work. The employee is introduced to his job situation and is informed about the rules and regulation, working conditions, privileges and activities, particulars pertaining to the company, etc. Placement means placing the right person on a right job on the basis of his knowledge, skills, expertise and experience. Generally, this is done by the top management. In the firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, the induction of any new sister is done by the supervisors and the sisters already performing that job. Placement of any sister is done by the branch manager herself. 35 TRAINING:“Training is the act of increasing the knowledge and skills of an employee for doing a particular job”. It is a systematic program of the organization, which aims at increasing the aptitude, ability, and skills of the workers to perform their specific jobs. By training, the employee will acquire the new skills, technical knowledge, problem solving ability, etc. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, training is given when a new sister joins the organization. Here she is given on job training. Ways to work on machinery or efficient performance of the task are explained by the supervisors in this training. Then she is closely supervised until she becomes efficient in performing that job. No additional training to the present personnel is given as it is not required. 36 DEVELOPMENT:Development is a process related to training. Training a person for a bigger and higher job is development. It not only improve the job performance, but also brings an overall growth and development of personality. No such development programs have yet been conducted for the sisters in the firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD. 37 PROMOTION:- “The term promotion refers to the upward shifting of a personnel where his salary status, responsibilities and authorities will be higher than before”. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, there is no as such a fixed promotion policy, but if any vacancy occurs for a higher post then promotion is given on the basis of a person’s experience and merit. No demotions or lay offs have occurred in its Rajkot branch till date. TRANSFER:- “Transfer refers to the horizontal shifting of an employee without any change in the salary, status, responsibilities, and authorities of the employee.” In case of transfer policy, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD does not feel the need to have one. A 38 member is not transferred under general circumstances but in some cases like if a skilled member is needed at one branch of a region, then the required skilled member is provided from other place to satisfy the branch’s need. 39 “The performance Appraisal system is the process of evaluation of an employee’s performance on the job in terms of its requirements.” At SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, the performance of the sisters is measured from time to time taking into accounts her work during the year, her period of service, her behavior with other sisters, her time discipline, etc. The process of performance appraisal is beneficial both from the point of view of the firm to maintain discipline among the sisters and from the point of view of the sisters for their self-development. 40 “The compensation rendered to the employees of an organization in return for the kind of job done or service rendered is known as wage or salary.” At SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, the male workers i.e. accountants are paid salaries as follows:Mr. Jayantibhai Mr. Gautambhai Rs. 8000 Rs. 8000 The sisters get their piece wage based on their vanai (as per the firm, vanai means reward of the sisters working in the organization”). The vanai or rolling is Rs.14 per kilogram at present in the firm. All members i.e. sisters get vanai for different kgs as per their work. The sister rolling papad get vanai as the kgs they are able to roll papad. While the clerical level sisters get vanai for 12 kgs. And the branch manager get vanai for 25 kgs. All these are on daily basis. 41 The personnel department of the unit is assigned the task to maintain up-to-date records of the employees of the organization. At SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, records of all the sisters are maintained by Vibhaben Kotak. For this a register is kept detailing necessary information about all sisters working with the organization. This information is kept for 10 years after a member leaves from the firm. 42 The time discipline is well maintained in the firm. The sisters of the firm work in different shifts:Morning shift Afternoon shift Night shift 9a.m. to 12 a.m. 4 p.m. to 6 p.m. 3 a.m. to 9 a.m. The firm does not a time keeping system like punch card or so, because compensation is paid to the sisters on daily basis only. So the member who comes, gets a compensation for her work on daily basis. 43 The term “Industrial Relations” is used to refer to the relations between the parties concerned with industry. The two parties, which come into direct contract with each other, are the workers and the management representing the employees. Both the parties have a common interest in industry and yet there various occasions when there is difference of opinion among them. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, there is an environment of peace and harmony among the workers and employees. Here all the sisters are considered the owners of the firm the firm is considered as one big family. Thus, there are no trade unions as all are equal in this unit. 44 Grievance, as defined by the international labour organization is “A complaint of one or more workers in respect of wages, allowances, conditions of work and interpretation of service stipulations, covering such areas as over time, transfer, promotion, seniority, job assignment, and termination of service.” The management of an organization put in their best efforts in the formulation and implementation of policies, programs and procedures which would best enable them to handle employee’s grievances. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD of Rajkot branch, Smt. Jayshreeben Bhatt (branch manager) herself handles all the grievances of this unit. There is a face-to-face communication between her and the person having a complaint. She solves the grievance as per the company’s policy. 45 SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is a voluntary organization that works for the benefit of its member sisters. “Symbol of woman’s strength” is the punch line of the firm and thus women are given supreme importance in the firm. They are provided loans at very low rate of interest and no one can ask the reason for the loan. Also, women working with the organization get a job security as no one can ask any sister to leave their jobs. This is as per the norms of the organization. In addition to this, every sister has the right to fire any male employee working on salary basis. Apart from all these, sisters are given facilities like bonus, staff saving schemes, medical facilities, higher education facilities for the daughters of member sisters, etc. 46 Job analysis is a procedure by which pertinent (important) information is obtained about a job. This means it is a detailed & systematic study of information relating to the operations and responsibilities of a specific job. It includes job description and job specification. Job description is a written record of the duties responsibilities and requirements of a particular job. It is concerned with the job to be performed . Job specification is a description of the qualities required in the personnel who will be performing the job. It defines the required qualification, technical knowledge, work experience, and other qualities in the personnel. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, job analysis is done by the branch manager for the male employees or the clerical staff employees. It is not done for sisters working with the firm because they are to be considered as the members or owners of the firm. 47 This helps the firm to get better employees who can take the firm to new hights. 48 In the firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, working conditions are very pleasant. The firm provides facilities like fresh rooms, free transportation facilities, watercoolers, sick room, guest room, etc. 49 Sr. No. 1 2 3 4 5 6 7 8 9 10 11 Particulars Introduction Organization structure Product lifecycle Market Segmentation Market research Branding, packaging & labeling Pricing Policies Promotion Mix Advertising Channels of Distribution Exports Competitors Page No. 50 Marketing occupies an important position in the organization of a business unit. As traditionally defined, “Marketing consists of those efforts which affects transfers in ownership of goods and care for their physical distribution.” The above definition of marketing is a description of the physical activities involved in the process of distribution of goods. However, marketing is more than a mere physical process or a set of activities. The purpose of a business is to create customers. “Marketing is the function of business concerned with the creation of a customer.” Thus, the modern concept of marketing focuses on the “consumer” and the satisfaction of his needs. 51 The organization structure of marketing department is very simple with final authority with the branch manager. This is shown in the chart below:- BRANCH MANAGER (sanchalika) Marketing manager Sales men 52 The firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, produces a number of products like papad, khakhra, Appalam, masala, vadi, Gehu atta, chapatti, Bakery products, detergents, etc. But the RAJKOT branch I visited undertakes the manufacturing of only papad. 53 The product lifecycle concept derives from the fact that a product’s sales volume and sales revenue follows a typical pattern of five phase cycle. The length and duration of product lifecycle depends upon the products. According to Philip Kotler, a product lifecycle has 5 stages as: Introduction stage Growth stage Maturity stage Saturation stage Decline stage The product papad of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD has no such lifecycle as it is a lifetime product and cannot be replaced by any other substitute. 54 “Market segmentation is the process of taking the total homogeneous market for a product and dividing it into several segments”. The process of market segmentation can be carried out on the basis of geographical area, age, sex, religion, lifestyle, income, personality, etc. Market segmentation in SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is not done on the basis of geographical area. They are :• Local Market • Regional Market • National Market • International Market 55 “Marketing Research is the systematic recording and analyzing the data relating to the marketing of goods and services”. Marketing research is the branch of marketing information system. The term market refers to the actual and potential consumers. In the firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD market research is not done as they do not find a need for it. 56 BRANDING:Branding includes giving a brand name to the products of the company. By branding the product, the brand name cannot be utilized by any other firm. All the products of the company viz. papad, khakhra, vadi, spices, bakery products, chapatti, appalam, etc. are sold in the market under the brand name LIJJAT. PACKAGING:Packing is often remarked as “Silent Salesman” because of it’s advertising appeal and identifying powers. The main purpose of packing is to protect its content in transit, storage & use. It gives protection to the product against humidity, dust, moisture, insects & exposure to sunlight. It even prevents goods from damages. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, packing is done in a very systematic manner. First, the rolled papad are checked before allowing its entry in the packing 57 department. Then they are weighed in the weighing machine & send for filling in the plastic bags. After this, the bags are sealed with the help of sealing machine. Packets of Lijjat papad are available in various size such as 100 grams, 200 grams, 250 grams, 500 grams or 1 kg. LABELING:Labeling is the most important area of concern after packing. Labeling consists of the printed material which provides important information about the product to the consumer. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, provides the following information on its packet of papad:• Brand name & logo • Instruction for usage • Vegetarian mark • Registered office address • Flavours • Ingredients • Net weight • Packing date • Batch number 58 • Branch • Maximum Retail Price • Expiry date Thus it gives complete information of the product. 59 An important function closely allied to selling is that of determining a price policy to be followed by a concern. In the firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, the pricing decisions are taken by the top level management operating at the main branch. The firm does not adopt any specific pricing policy but it keeps in mind the following factors while pricing the products: Cost of production Normal profit Cost of advertising Cost of transfer and distribution Taxation Dealer’s margin 60 Price list of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD:- Items Udad Udad with Udad Moog Udad with Garlic & with Red (50% Udad Special Pepper Chilies Chilies & 50% Moog) 14.50 14.50 14.50 14.50 15.50 Moog Special(50% Udad & 50% Moog) 15.50 Punjabi Masala Special Small Size 100 gms 15.50 mini size 29.00 200 gms 29.00 29.00 29.00 31.00 31.00 31.00 small size 200 gms Big size 250 gms 29.00 29.00 29.00 29.00 31.00 31.00 31.00 35.50 35.50 35.50 35.50 39.00 39.00 39.00 Small / Big size 500 gms 68.00 68.00 68.00 68.00 75.50 75.50 75.50 Small / 134.00 Big size 1 kg. Small / 328.00 Big Size 2.5 kg. 134.00 134.00 134.00 149.00 149.00 149.00 328.00 328.00 328.00 365.00 365.00 365.00 61 PROMOTION:“Promotion consists of a diverse collection of effective tools, mostly short term, designed to stimulate quicker and/or greater purchase of a particular product.” SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD sponsors certain events such as consumer oriented programs and also puts up their stalls in fairs like CONSUMELA & FESTIVEX for the purpose of sales promotion. But they do not opt for any discounts or schemes for this propose. ADVERTISING:Advertising is a non-personal communication. It may be made through newspapers, pamphlets, T.V., radios, etc. Advertising is one channel of information for consumers. They get to know about new products, product improvements, price changes, packing innovations, special credit terms and so on from advertising. 62 SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD advertises their products through medias like T.V., radio, newspapers, magazines, etc. They also opt for direct mail advertising like sending pricelist, catalogue, booklets, etc. to the dealer or retailers. 63 The term channels of distribution is used to refer the various alternative link roads which connects the producer with the consumer. The possible paths by which products may be channelised to the consumer are varied in number and character. The firm SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD follows a simple channel of distribution as under:- Manufacturer Agents (Dealers) Retailers Consumers Thus, the product is sent to the 4 main agents ,then to the retailer and finally consumers. Generally, the firm follows this channel of distribution. But they also have retail store of 64 their own in the manufacturing building, which makes direct selling to the final consumer possible. The 4 main agents uses the road ways for the purpose of distribution in the rural area. They use delivery vans for transporting the products of the firm and trucks for transporting goods to distant areas. 65 The product of a company when sold in the markets of foreign countries are known as exports. It helps in increasing the foreign exchange of a country. Thus, the export activities plays a significant role in the economic upliftment of a nation. The firm, SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD exports its products almost in every country of the world. The firm have their export agents who performs the export activities on behalf of the firm. At present the firm’s sales value has reached up to 12 crores ( total export). 66 The competitors play an important role in the functioning of the unit and prices of the products. As such there is no competition for the papad of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD except the household vendors of local category. Thus, the firm enjoys a monopoly as far as production of papad is concerned, yet the prices are kept reasonable. 67 Sr. No. 1 2 3 4 5 6 7 8 9 10 11 Particulars Introduction Organization Structure Financial Planning Capitalization Capital Structure Fixed capital management Working Capital management Receivables management Ratio Analysis Liverage Profit & Profitability Page No. 68 “Financial Management is concerned mainly with such matters as how a business unit raises its finance and how it makes use of it efficiently”. In simple words, it means raising of adequate funds to the minimum cost and using them effectively in business. It is mainly concerned with the financial problems of the business. The finance department has to cover a long range of functions such as maintaining adequate funds on hand to meet expenses of both revenue and capital nature. Smooth availability of finance for running the enterprise and easy availability of finance for the expansion of the business , determines the success of the financial management. 69 The organization structure of finance department of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD (Rajkot Branch) is given as follows:- Branch manager Accountant Cashier Clerical staff 70 Finance is undoubtedly the life-blood of the business. The ambitious plans of a businessman would remain mere dreams unless adequate money is available to convert them into reality. One of the most important function of the finance manager is that of planning. “Financial Planning is mainly concerned with the economical procurement and profitable use of funds which is characterized by realistic investment decisions”. The unit SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD gives weitage to financial planning to facilitate the availability of funds at the right time to meet their demand for capital both fixed as well as working. This function of financial planning is performed by the top level managers operating at the main branch and not by the administrative staff of the sub branch. 71 “Capitalization comprises of a company’s ownership capital which includes capital stock and surplus in whatever form it may appear and borrowed capital which consists of bonds or similar evidences of long term debts”. If capitalization of a company is just equal to its requirements it is considered to be properly capitalized. If it is more than required, it is considered to be over capitalized. Similarly, if the capital is less than the required amount , it is said to be under capitalized. The capitalization of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD consists of General Funds and Surplus amounting to Rs. 4,70,57,035 72 “Capital Structure of a company refers to the make-up of its capitalization”. However, in a broader sense, capital structure includes all the long-term capital including loans, debentures, bonds, share issues, reserves, etc. and the components of the total capital. In simple words, capital structure refers to the composition of capital in an organization. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD has acquired their capital by General funds and loans:- General Funds Reserves and Surplus Loans 4,38,22,252 32,34,783 30,00,000 73 Charles Prather says that “Fixed Assets are those which are of a somewhat fixed or permanent in nature and are used by the business in its normal operations, they do not include items offered for sales”. Fixed Assets (capital) management is the most important task which a management has to face in its day to day situations. Fixed assets includes land machineries, office building, vehicles, and other equipments used by the enterprise. The fixed assets of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD ( Rajkot branch) are:- Particulars Land Building Furniture and fixture Net block 3,01,178 7,24,556 22,75,299 Grand Total 33,01,033 74 In accounting language, Working Capital is the difference between the inflow and outflow of funds. It is defined as the excess of current assets over current liabilities and provisions”. Thus, it can be said that, Net working Capital = Current Assets – Current Liabilities Following table shows the Net Working Capital of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD:- Particulars Current Assets:Inventories Other receivables Cash & Bank balances Loans & Advances Amount 41,25,620 3,32,242 34,83,276 1,00,621 2,34,379 78,07,380 Less: Current liabilities Net Working Capital 75 Receivables are the assets which are created as a result of the sale of goods or services on credit in the ordinary course of business. These are known as accounts receivables, trade receivables or customer receivables. The following is the amount of receivables in SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD;• Sundry Debtors = 19,180 • Other Receivables = 3,32,242 76 A Ratio is a figure showing the logical relationship between any two items taken from financial statement. A number of ratios are used by financial analysts. Ratio analysis of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD are as follows; 1) Current ratio = Current Assets Current Liabilities For 04-05 = 74,42,060 1,52,810 For 05-06 = 78,07,380 2,34,379 The decreased ratio shows a decreased liquid position of the firm. = 33:1 = 48:1 2) Debt- equity ratio = Debt . Equity share capital & Reserves & surplus The debt equity ratio cannot be found in this firm because it is a co-operative unit and does not issue any equity . 77 3) Debtors turnover ratio = Credit sales Average debtors The firm has a policy of not having any transactions in credit . Hence there is no credit sales or debtors . Hence, this ratio also cannot be found. 4) Net profit ratio = Net Profit * 100 Sales For 04 – 05 = 53,97,737 9,14,08,615 For 05 – 06 = 32,34,783 11,38,41,829 The decrease in net profit ratio shows decreased profitability of the firm. * 100 = 2.85% * 100 = 5.90% 78 There are two main types of leverages namely Operating leverage and Financial Leverage. The operating leverage may be defined as “the firm’s ability to use fixed operating costs to magnify the effects of changes in sales on its Earnings Before Interest & Tax (EBIT). The operating leverage of SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is as follows:- Degree of operating leverage = % Change in EBIT % Change in Sales = 40% 24.5% = 1.63 Financial Leverage results from the presence of fixed financial charge in the firm’s income statement. It is concerned with the effects of change in EBIT on earnings available to equity Share holders:Degree of financial leverage = % Change in EPS % Change in EBIT 79 As the firm does not issue any kind of shares, its financial leverage cannot be obtained. 80 The main purpose of any business unit is to earn profit. Profit is the motivating force for business. It is a yard stick of efficiency in business. Profit is earned by selling a product at a higher price than is cost price. In the absence of profit the closure of business is imminent. In SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD, besides other motives such as fulfilling social responsibility, providing employment, growth in the economy, etc.; profit making is also one of the important objectives .Following are the profit figures of the firm for last 3 years:- Financial year 2003-2004 2004-2005 2005-2006 Net profit 75,93,891 53,97,737 32,34,783 81 SWOT Analysis means the analysis of the Strength, Weakness, Opportunities and Threats of the firm. The SWOT analysis for SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD is as under:- STRENGHT: The firm has a fine brand name and goodwill in the market. The firm is known for its top quality and standardized taste. The firm is also equally popular abroad. The manpower of the firm is very strong as all sisters work as a family in the firm. The firm does not have any competition for its product papad. WEAKNESS: The firm does not do enough marketing. Most part of the production process is performed manually which makes the process slow and boring. 82 The branch managers do not get enough authority to perform functions independently. OPPORTUNITIES: The firm has a possibility to expand in the foreign market. The sales volume can increase due to absence of competition. THREATS: If new competitors emerge with better technology, then LIJJAT may have to face a decline in sale. The firm could not create its name in other products except papad. 83 The future plans of SHRI MAHILA GRIAH UDYOG LIJJAT PAPAD is as under:- The prime goal/plan of the firm is to make women selfreliant & self confident and for this the firm gives them a platform for improving their status in the society, which is their justified right. The firm is going to open a new branch in Rajkot at 150 ring road for manufacturing of papad. The firm is also intending to have more branches at places like Sapar-Veraval for expansion purpose. 84 The unit has an excellent administration set up and does not require any suggestions. However here are few suggestions from my side to make it more efficient:- The firm must advertise its products broadly to increase its sales. The firm should allow credit sales to increase their sales volume. The firm should think of diversifying their product lines. 85 I had a great learning experience after visiting the firm SHRI MAHILA GRIAH UDYOG LIJJAT PAPAD. It has an all together different outlook towards the society. The level of efficient administration and maintenance sets a good example for other co-operative units. The firm promises itself a bright future by hard work and integrity. The sisters are the owners of the firm and they get many benefits from the firm. They work as one big family in the organization. One more important thing is that the firm focuses more on the welfare of their member sisters and society rather than profit. 86 Modern Business Organization& Management - S.A. Sherlekar -V.A. Sherlekar Organization and Management -Dr. C. B. Gupta Financial Management -P. V. Kulkarni -B. G. Satyaprasad.