Académique Documents
Professionnel Documents
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Submitted to Prof .Satish nair (Course Chairman) In partial fulfillment of POST GRADUATE PROGRAMME IN MBA FB & E (2007-2009) Submitted by Ketan maheshwari
Student Name:
Roll Number: Institute:
Ketan maheshwari
074128 Institute of Management, Nirma University, Sarkhej-Gandhinagar Highway, Ahmedabad. 382481
Company
Name: Address:
Gopi synthetics private limited Narol vatwa road, Narol, Ahmedabad 382405 Tel: 079-25732981-86 Fax: 079-25732972/74 e-mail: narol@omkargroup.com 212, new cloth market, ahmedabad - 380002
Regd. Office:
Project Guide
Name:
Project Details Date of Joining: Date of Completion: April 15, 2008 June 14, 2008
ACKNOWLEDGEMENT
The time that I have spent at Gopi Synthetics pvt Ltd, has been very fruitful and I have heartily enjoyed my stay. My successful completion of the project is indebted to the support of all the departments involved directly or indirectly. I would like to extend my thanks to Mr Champalalji Agarwal, the director of the company, who accepted my stay for training purpose in his company, Gopi synthetics pvt limited. He made this project possible by untiring encouragement, advice and guidance. I would like to express my thanks to Mr. Mr M.K.Bihani, sales officer under whom I was trained,who gave me the opportunity to take up the project of my choice and provided the most conscientious and valuable mentoring possible. He directed me and coached me, and thus contributed invaluably to the successful completion of my project. Moreover I would also like to thank the staff at Gopi synthetics at each level as I worked and touched almost all the departments excluding the finance department. I received good support and encouragement from all of them which led me to the conclusion of my project. I am deeply indebted to Professor Harismita trivedi, who provided valuable guidance to me throughout the entire course of completion of my project.
Executive summary
INDUSTRY AS A WHOLE
The Indian textile industry is one of the largest and most important sectors in the economy in terms of output, foreign exchange earnings and employment in India. It contributes 20 percent of industrial production, 9 per cent of excise collections, 18 per cent of employment in industrial sector, nearly 20 per cent to the countrys total export earnings and 4 per cent to the GDP. The sector employs nearly 35 million people and is the second highest employer in the country. The textile sector also has a direct link with the rural economy and performance of major fibre crops and crafts such as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and crafts persons in rural and semi-urban areas. It has been estimated that one out of every six households in the country depend directly or indirectly on this sector. India has several advantages in the textile sector, including abundant availability Of raw material and labour. It is the second largest player in the world cotton trade. It has the largest cotton acreage, of about nine million hectares and is the third largest producer of cotton fibre in the world. It ranks fourth in terms of staple fibre production and fourth in polyester yarn production. The textile industry is also labour intensive, thus India has an advantage.
Manufacturing flexibility The fragmented industry structure and small average scale of operation in Indias textile industry has created the capability for enhanced flexibility in production. Indian firms are used to handling small-runs, and have skilled manpower with the ability and willingness to work on complex designs. Therefore India has the ability to produce not only large orders but also smaller and complex orders. In contrast, the textile industry in other countries like China are more industrialised, and production lines are mostly geared to handle relatively simple designs that can be easily broken down and mass-produced. The flexibility offered by Indias textile industry can be a significant advantage for the fashion industry, which typically demands small lots of complex designs. India also offers flexibility in its ability to handle different materials such as cotton, wool, silk and jute, with equal skill. These advantages also enable the Indian industry to produce high value customised apparel that is increasingly finding demand in several exports markets.
Textile machinery
The Indian textile engineering industry, which began as an offshoot of the textile industry, is today reckoned as the largest segment in the country. Indian textile machinery manufacturers are able to produce at competitive prices sophisticated machines of higher speed and production capability.The textile industry also gets significant support from the well developed IT capabilities of Indian firms.
Conclusion
Indias textile industry is an attractive sector that is poised for higher growth. The industry enjoys significant advantages, aided by Indias key strengths in availability of raw materials, labour, domestic market and supportive government policies. While the domestic market has been growing consistently and offers attractive growth potential, exports are poised for a quantum increase after the removal of quotas under MFA.
Current scenario:
Thereafter company has also expanded its business by setting a dyeing and printing department. Now at present company has two flatbeds on which printing on grey cloth is done. After the grey cloth once reaches the factory premises the process is carried like after checking of grey a report is been prepared and one copy of the report is handed over to the customer and other copy remains with the factory staff. Then after seeing the meters of cloth the customer gives programmed whether the process of dying or printing is to be done on the cloth to the masters. Then after masters ( Technical staff ) is the one who decides when and in which machine the cloth should be allotted. After the
dying and printing of the cloth then the cloth is been turned for its finishing. Finishing process is been carried on as per the requirement of the customer. The finishing is done as per the samples given by the customers. After the process of finishing the cloth is transferred to packaging department. The processing unit does dying and printing on various types of fabrics differs from different weights to different weights. The main production of the unit is of the grey named P.C ( Polyester * Cotton ) . Though the demand for such kind of fabric remains throughout the year. Unit also is into the process of grey cloth 100% cotton fabric. The weight of such kind of cloth is from 20 kgs to 50 kgs. Though the dying process for such kind of fabric is very high but even the unit charges much higher job rate as compared to the other fabrics. The company is able to get the raw-materials from the local suppliers of the market i.e. dyes and chemicals. Varieties of dyes is used by the unit at present weather it Disperse, Pigment, Vat or Reactive dyes. Most of the machines work with the input of steam which is generated in a huge boiler which requires pet-coke as fuel. Pet-coke is residue left after petroleum is being refined from natural oil. It is used immensely on everyday basis, which even goes to few tons per day.
The directors have power at any time and from time to time to appoint any other person as director as an addition to the board so that total number of directors shall not at any time exceed the maximum number twelve in this case, and any person so appointed as an additional director shall retain his office only until the next annual general meeting , but shall then be eligible for re-appointment. The board may from time to time appoint any director to be the chairman of the board. Mr. Champalal agarwal is the existing chairman of the board.
1. Structure
The structure of organization is a functional form. Mr.Champalal agarwal along with his son Mr. Sumit agarwal are the owner-manager. Company is mainly in job work for other parties but is also indulged in self production which is in the ratio of 80:20 respectively. During peak seasons where there is good demand
the company raises this ratio sometimes to 50:50. Company heavily invests in technology and keeps on changing its product line as per market demand. In its every unit there is a manager who is in charge for production, accounting, personnel and engineering. There is separate R&D department in the firm for new products development.
2. Strategy
Over the past few years company has heavily invested in R&D department as it is on its maturity stage. But now after the recent split between the two companies i.e. Gopi synthetics and Omkar industries, the company is investing heavily to increase its production capacity and to get back on the track with a upward shift in the cycle. Gopi synthetics-Key Strategies Factor
3. System
Company is using systems and interconnectivity is fine but still there lies more scope for systems penetration as there are various departments which are not helped with systems, where if they are introduced it will certainly help. Although the company is now introducing new systems and planning for more in the near future. Many departments are there where still manual entry is done and whole reports are prepared manually making it a monotonous and cumbersome job. These systems will help changing the organization without disruptive restructuring and the organization is devoted to educate its employees about these new software and make familiar the non-IT staff of the company.
4. Style
The style in the organization is very informal and there is an air of cooperativeness and team work among the employees of the organization. The managers and sub-ordinates works with complete faith and togetherness with one another.
5. Staff
Out of the total strength 70% staff is marwadi cast and generally from rajasthan. Mr. Champalal agarwal has a tendency to promote rajasthani, marwadi people as he originally belongs to rajasthan. Most of the staff is uneducated and is below its senior secondary level. It somehow does reflects on the efficiency of the organization. So far less professionalism is there and the work culture is also somewhat conventional and time consuming. The following were the observations made about the staff at Gopi synthetics. In recruiting new employees regionalism is the biggest factor, even if the employee is not educated or competable for the job he is employed.
The staff working here is not promoted for years or there is very less increment in the salary per year which is a demoralizing fact for many employees. They work here with full loyalty for years but they gain nothing in return.
Its a marwadi conventional atmosphere in the business where boss is always right and even qualified personnel have very less say about anything.
6. Skills
Only grey department is labor intensive rest all are capital intensive where labor need not to be skilled as the work is easily adaptable and monotonous.
Optimum utilization of the machinery is done which increases production of the company. It is very well characterized company and always believes in doing what it is best at.
7. Super-ordinate goals
These goals at Gopi synthetics are in complete line with its mission statement and company is dedicated to work to provide best quality fabrics at cheaper rate and without any defects. And everyone in the organization regard these superordinate goals to be; Focus. Clear Line Responsibility. Growth and service oriented approach. Best quality fabrics at cheaper rate.
Competitive Framework)
Position
in
the
Industry
(Using
Porters
Porters Framework; to analyze the nature and intensity of competition in a given industry, a renowned management expert, Michael E. Porter, developed the five competitive forces model. These five competitive forces are; rivalry, bargaining power of customers, bargaining power of suppliers, threat of new entrants, and threat of substitute products and services. The long-term profitability or return on investment of a firm in a particular industry is directly
Rivalry: The competition is immense in this business. There are mainly two types of markets, one which is producing high quality products. Other one which do not produce quality product and they sell it at lesser price. The sales of the fabrics depend on the demand of the market. Here the key is bulk production with continuous and good efficiency of the machinery i.e. optimum utilization of the resources since the market is highly competitive with many existing and established players are there with threat of new entrants constantly. The rates of the finished product are fluctuating as per the market scenario. Its a price taking industry. The bargaining power of customers: The quality fabrics and proper supply is been done by the firm. As a result of it the customer are ready to pay the marginal price which is charged by the firm. Unless the same kind of product is been manufactured by other manufacturer then firm will have to sell at competitive price. The bargaining power of suppliers: This is the extent to which suppliers can threaten either to increase the price or reduce the quality of their goods and services. Suppliers tend to be powerful when there are only a few players in the industry, when there are no substitutes for their products or services, or when their products or services are critical to the buyers business. In the industry concerned the main raw material is grey which has a highly competitive market, so there is no major fight by suppliers. The grey from south India is of good quality with very competitive prices. The profit potential of the businesses operating in an industry is reduced if the
The threat of new entrants: This refers to the ease with which new competitors can enter the market. New entrants may have substantial resources and bring in additional production capacity. This can trigger price wars and increase the cost of doing business for existing businesses due to the higher expenditures they will have to incur (for a larger sales force, advertising, better service, etc.) to retain their market position. The threat of new entrants depends on how difficult it is to enter the relevant market. The barriers to entry are high when; (i) a firm needs large capital investment to start a business (ii) established competitors have loyal customers who consider the products or services offered by these companies to be unique and are reluctant to buy products or services offered by other companies. The company manufactured the best quality fabrics and having production capacity quite high. The threat of the new entrants currently for the company is not there.
1. INTRODUCTION:
Processes in the Gopi Synthetics:
1) Pre-processing stage: - The raw cotton is brought in and piled up in a
stack. A suction machine sucks up the cotton through graters and intermeshing screws so as to avoid the impurities to enter in the system. It is sent to a trubulent container where the cotton is subjected to a stormy vortex. This helps in seggregating the cotton from impurities such as dust and metal particles. This is then sent to a pressurized container where the cotton is subjected to a narrow opening. The pressurized cotton comes out in form of colluded thick thread. This is wounded inside a hollow container which would be subsequently sent to the spinning machine. The cotton thread may either go through several processes strengthening the yarn at every stage and intertwining them so as to make stronger threads. The number of intertwining depends upon the requirement by the customer.
2) Spinning: - Spinning is the process of creating yarn (or thread, rope, cable) from various raw fiber materials. In spinning, separate fibers are twisted together to bind them into a long, stronger yarn. Characteristics of the yarn vary based on the material used, fiber length and alignment, quantity of fiber used and degree of twist.
The above picture represents a single stage where the colluded thread wrapped in a hollow container and is being sent through a spinning unit, where it is thinned and threads are intertwined with each other. The thread is then wound around onto the drums. 3) Various such drums called yarns are mounted onto a bigger spinning machine where 6 to 12 threads are then spun in such a way so as to be intertwined with each other and the final output is wound around onto a bigger drum. This bigger drum is then sent to the weaving unit.
4) Dyeing: - Dyeing is the process of imparting colour to a textile material in loose fibre, yarn, cloth or garment form by treatment with a dye. Firstly the raw yarn is wound on spring tube to achieve package suitable for dye penetration. Then, these packages are loaded on a dyeing carrier's spindle one on the other. Then, the packages are pressed up to a desired
height to achieve suitable density of package. Then, the carrier is loaded on dyeing machine and yarn is dyed. After dyeing, the packages are unloaded from the carrier in to a trolley. Then, all the packages are hydro extracted to remove maximum amount of water. Then, all the packages are dried to achieve the final dyed package. At last the dyed yarn packages are packed and delivered. In order to remove natural or unwanted colour from material, the opposite process of bleaching is carried out. If things go wrong in the dyeing process the dyer may be forced to remove the dye already applied by a process that normally known as stripping. This normally means destroying the dye with powerful reducing agents (sodium hydrosulphite) or oxidising agents (Hydrogen peroxide or sodium hypochlorite). The process often risks damaging the substrate (fibre), where possible it is often less risky to dye the material a darker shade, black is often the easiest or last option.
5) Weaving: - In general, weaving involves the interlacing of two sets of threads at right angles to each other: the warp and the weft. The warps are held in parallel order. The loom is warped with the warp threads and the weft thread is wound onto spools called bobbins. The raising / lowering sequence of warp threads gives rise to many possible weave structures from the simplest plain weave (also called tabby), through twills and satins to complex computer-generated interlacings.
Both warp and weft can be visible in the final product. By spacing the warp more closely, it can completely cover the weft that binds it, giving a warp-faced textile. Conversely, if the warp is spread out, the weft can slide down and completely cover the warp, giving a weft-faced textile. There are a variety of loom styles for hand weaving and tapestry. In tapestry, the image is created by placing weft only in certain warp areas, rather than acro
ss the entire warp width. In Gopi synthetics I was given the option to choose a project of my choice and I opted for the learning and understanding the business as a whole. The reason for it was that this company produces finished textiles which is used for various purposes and the base of my family business is also textiles as we are into handy-craft exports. As per my project selection they agreed to shuffle me in various departments with a duration of almost ten days in each. The various departments and the learning offered by the same are:
Grey department (Worked and understood this department for 14-16 days under the supervison of Mr. devilalji.) Grey means raw unprocessed cloth which could be cotton, polyester, viscose etc. This department forms the base for the industry as in this industry grey is used as raw material. This department is concerned with
the purchase of grey material from the suppliers. After its purchases it is cleaned and polished so that it can be easily used in other sophisticated processes. Cleaning and polishing is done with the help of processes called sharing, peeching and crushing. Each is done with a specific and different output. These are done on the demand of the parties i.e. parties generally customize what they want in the final outcome. In this department regular inspection is being done by measuring the read, peak of the grey i.e. yarns are counted whether the cloth supplied is authentic or not. If the grey is not upto the mark it is a defaulter and it is either sent back to the supplier or respective amount is deducted from the payment to be made. A specialist is appointed for this particular inspection who does it for many other parallel firms.
Stores and Spares
(worked and understood this department for 12-14 days under the supervisor Mr. Kamlesh swami) This department is concerned with the allotment of spare parts for various machines. Every machine or a group of similar machines has a master or supervisor on it who takes care of it and ask for any spares or parts for the respective machine. This is done with the concern of the engineer Mr. Patil who is full time employed in the company. Every part allotted is being recorded manually in the register. One thing lacking in this department is a software or a system which shows the exact picture of the available parts and the spares that are to be ordered through purchases department. This manual entry is prone to errors in count and other aspects aswell. Reconciliation department
(worked for 14-16 days under the guidance of Mr. Sandeep who works as reconciliation officer) This is an important department in a process house like this. In this industry at various stages and processes cloth shrinks or expands which may result in net shrinkage or expansion in the final finished goods. This department is concerned with keeping track of shrinkages or expansion of cloth at various processes by taking daily reports from machine supervisors and then calculating the net deficit or surplus in the finished product. Generally there is deficit of 3-4% of the raw material i.e. grey cloth , in the form of wastage at different stages. Wastages are bound to be there but there are certain percentages set for different types of grey cloth. For cotton it is 2-4%, polyester 1-3% , even expansion takes place in fabric like liacra from 2-5% depending on the quality.
Purchases department (worked and understood how purchases department worked for 12-14 days under Mr. M.K.Bihani who were my guide as well during the tenure of my training.) This department analyzes the reports of grey department, colors & chemical stores and spares & stores department, which includes the requirement in the near future according to the program and the work load. The purchases officer takes quotation from few suppliers and compares them and orders from the best supplier which is providing at the most competitive prices. There are few fixed suppliers and few are flexible i.e. according to the requirement and quantity needed.
2. METHODOLOGY:
Company image from inside: When I joined the company there were too many rumors about splitting up of the company between the two brothers and this went true when the two companies Gopi synthetics and Omkar industry split up. Earlier the working used to be in the same premises with common resources being used but after that premises were almost separated and everything was divided between the two companies whether it is man power or machines or other resources. Companys image is not too sound from inside considering few factors such as: Many employees were highly dissatisfied with the promotion policy and salary increments. It was highly uncertain about promotion and increments.
Company did not had a sound creditability in the market which was due to some failures in the payment to the suppliers. Labor contractors were not on the happy side as according to them they put in a lot of efforts but they were not paid well accordingly and on time as well. The lack of professionalism was depleting companies performance. Thumb rule boss is always right many times worked against favor of the company.
Self image of employees and employee satisfaction: Most of the employees as they were undereducated they preferred to complete the job in hard working and time consuming way. They worked with hard work but not smart work which decreased their efficiency and companys efficiency as a whole. Employees were not too satisfied with the promotion policy and salary increments.
Effectiveness of instruments for motivating employees: As such there were no special measures taken in the company to motivate the work-force except diwali bonus. It seems that few members of the staff who were close to boss were given various perks and monetary support , rest of the staff was never given such
support. There was a clear atmosphere of partiality in the organization which resulted in back biting and negative aroma in the company.
Power equations and hierarchy: The company worked on the conventional and desi principles where thumb rule no.1 is boss is always right and rule no.2 is that after boss his favorites are always right. Here powers were generally at the top management with direct delegation of work to lower management and department managers. Hierarchy was simple to comprehend which is shown in the next page.
Work culture- co operation, creativity, openness and transparency: The work culture is fine after the recent division between the two companies. Earlier it used to be fussy with less transparency as two companies shared same resources but now everything is being divided. Employees are now working in more co operative way as they know they are the only one with whom they have to work. Since there is lack of openness as the same rule applies and junior level managers and officers have a very less say for the betterment of the organization. Company is planning to expand its production and there are few creative heads being recruited for the same and there are certain existing employees who have a good say in the top management and are good at their creative skills which is bringing positive synergy in the company for their expansion plans.
Sources of conflict: The biggest source of conflict arises at the top level between the members of the family who are in the business. This hinders companys performance in a great deal as rest of the employees are diverted towards this fuss and rumors in the organization dilute the efficiency in a great deal. The recent division of the two companies is an example of conflict between two brothers. From the day of conflict to the day of division, rumor market was always on in the company and employees were diverted off their work. Now that everything has happened the work force is back on track and there seems to be positive synergy flowing in the organization. Other conflicts in the organization are between the employees which arise due to back biting and misunderstandings which are small and short timed conflicts which are generally resolved by supervisors. There are few conflicts between the company and the suppliers due to non-payment of due amounts on time or the quality aspect which results in change of suppliers and entry of new ones in the business.
Raymond Ltd. Incorporated in 1925, the Raymond Group is a US$ 300 million plus conglomerate having businesses in textiles, readymade garments, engineering files & tools, prophylactics and toiletries. The group is the leader in textiles, apparel, files and tools in India and enjoys a pronounced position in the international market. Raymond Textile produces pure wool, wool blended and polyester viscose fabrics and blankets along with furnishing fabrics. The denim division produces high quality ring denims. Raymond believes in excellence, quality and leadership.
Alok Industries Established in 1986 as a private limited company, Alok Textiles began as fabric traders and suppliers to the garment industry.Beginning with texturising of yarn, the company steadily expanded into weaving, knitting, processing, home textiles and readymade garments. In 1993, it became a public limited company. In less than two decades, it has grown to become a diversified manufacturer of world-class apparel fabrics selling directly to garment manufacturers and exporters.
Vardhman Spinning & General Mills Ltd. The Vardhman Group, established in 1965, under the entrepreneurship of Late Lala Rattan Chand Oswal has today blossomed into one of the largest textile business houses in India. At its inception, Vardhman had an installed capacity of 14,000 spindles. Today its capacity has increased multifold to over 550,000 spindles. Today Vardhman Threads is the second largest producer of sewing thread in India. The grey fabric
weaving unit at Baddi (HP), commissioned in 1990 with a capacity of 20,000 metres per day, has already made its mark as a quality producer of grey poplin/sheeting/shirting in the domestic as well as foreign market. This was followed by entry into fabric processing by setting up Auro Textiles at Baddi, which currently has a processing capacity of 100 thousand metres/day.
Welspun India Beginning with a small texturising unit in 1985, the group has significantly expanded and diversified its business. It now has interests in terry towels, LSAW pipes, pipe coating, cotton yarns, PFY, bathrobes and buttons. The group has ties with 12 out of top 20 retailers in the world namely WalMart, K-Mart, JC Penny and Target to name a few. LSAW pipe clientele includes names such as Shell, Gazprom, ExxonMobil, etc.
Bombay Dyeing Bombay Dyeing is one of Indias largest producers of textiles. The company is one of the largest and oldest textile companies in the country. It manufactures cotton and blended textiles. Product mix comprises suitings, shirtings, sarees, towels and bed linen. It manufactures Vivaldi brand of mens clothing. It is also a manufacturer of DMT. The company was formed on 23 August 1879 by Nowrosjee Wadia, a dye works near Mahim. This was the mill, which first started dyeing of yarn in India. Textile Mfg. Co. Ltd. was set up in 1895. Nowrosjee Wadia & Sons become the managing agents in 1898.
Century Textiles Century Textiles & Industries was incorporated in 1897. Till 1951, it had only one industrial unitCotton Textile Mills. It has Asias largest composite 100 per cent cotton textile mill. Century has diversified into other businesses as well. At present, Century is not only the trend setter in cotton textiles, but also a presence in yarn, denim, viscose filament rayon yarn, tyrecords, caustic soda, sulfuric acid, salt, cement and pulp & paper.
Himatsingka Seide Ltd. The company commenced its operations on 15 February 1985. It was promoted by. It manufactures natural silk fabrics under a 100 per cent export oriented unit scheme. The company undertook to set up a composite silk mill with an annual capacity of 7,50,000 square metres for producing natural silk fabrics. It produces a wide range of regular and fancy 100 per cent silk and silk blended yarns. Its weaving division - Himatsingka Seide, offers yarn dyed decorative, bridal and fashion fabrics. The entire operation of winding, doubling, twisting, dyeing, weaving and finishing is integrated under one roof.
process of producing finished textiles needs to be kept under check at various stages so that the cloth doesnt gets damaged or the quality does not hinders. It is certain that some percentage of wastage inevery lot will be there, still it should always be under inspection that it does not exceeds standards.
Inventory Control :- The problem in inventories in the company is that
the records are not entered in systems through software and they are recorded manually through reports of different departments. It results in frequent mismatch of inventories.
Allocation of Resources :- Till the recent times before the two companies
got split up, allocation of resources was very confusing and haphazard, but now it is getting back on track with clear cut allocations of resources to both the companies.
Improper Assembly line :- The biggest problem I find in the company is
that they dont have proper assembly line. After grey is put into production , it must take 3-4 days (standard) to get the final product. But right now it takes 6-7 days at an average and sometimes it does stretches to 12-15 days. It happens because the semi-finished goods are lying in the warehouse with no further program i.e. Time management Proper utilization of energy