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Fortune elastomers pvt. ltd.

  1. 1. FORTUNE ELASTOMERS Pvt. Ltd . An Internship Project Report on FORTUNE ELASTOMERS Pvt. Ltd. Submitted to BANGLORE UNIVERSITY In partial fulfilment of the requirement for the award of MASTER OF BUSINESS ADMINISTRATION By JASEEM.K.V (Reg.No.12DKCMA025) Guide Asst. Prof. JANARDHAN SHETTY SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Yelahanka New Town, Banglore-560 064 2012-2014 SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 1
  2. 2. FORTUNE ELASTOMERS Pvt. Ltd . GUIDE CERTIFICATE This is to certify that Mr.JASEEM.KV bearing university register number 12DKCMA025 has completed this internship project on “FORTUNE ELASTOMERS.Pvt.Ltd.” under my guidance. This project is based on original study conducted by him and the report has not formed a basis of awarding any other Degree/ Diploma/ Certificate by this University or any other University. Place: Bangalore SHETTY Mr. JANARDHAN Date: Professor) SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES (Asst. Page 2
  3. 3. FORTUNE ELASTOMERS Pvt. Ltd . DECLARATION I declare that this internship project report on FORTUNE ELASTOMERS Pvt. Ltd. place is an original and bonafied work carried out by me during the academic year of 2013-2014 under the supervision of Asst.Prof. JANARDHAN SHETTY, Designation of Seshadripuram Institute of Management Studies. This report is submitted in partial fulfillment of the requirement of Master of Business Administration of Bangalore University. I also declare that no part of this representation has been previously published or submitted as a project representation for any Degree or Diploma of Bangalore University. Place: Bangalore Date: 2DKCMA025) JASEEM.KV (Reg.No.l ACKNOWLEDGEMENT SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 3
  4. 4. FORTUNE ELASTOMERS Pvt. Ltd . I would like to express my profound sense of gratitude and sincere thanks to Dr.S.N.VENKATESH (Principle of Sheshadripuram Institute of Management Studies), Dr. D.K.MURTHY(Director), I take this opportunity to thank them with all my heart for their valuable suggestions and sincere cooperation rendered to me during the academic period. I extent my thanks to “ FORTUNE ELASTOMERS Pvt. Ltd.” for having given me an opportunity to undergo placement in partial fulfillment of MBA PG course of Bangalore University. I sincerely thank with immense pleasure to Mr. Janardhan Shetty, Asst Professor, MBA, Seshadripuram Institute of Management Studies, Bangalore for her guidance and encouragement throughout the project work. Finally I extend thanks to all my family members and friends for the encouragement I got from them and also wellwishers for their sustained help and prayers. Place: Bangalore Date: JASEEM.KV (Reg. No. 12DKCMA025) CONTENTS SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 4
  8. 8. FORTUNE ELASTOMERS Pvt. Ltd . ECONONMIC SCENARIO 1.1 Introduction Manufacturing and industrial environments today are becoming increasingly dynamic and competitive. Companies are competing on a global scale in a fast moving world with customers demanding reliable delivery dates and high quality products and services as well as quick response to market changes. Suppliers are expected to deliver on time in increasingly small batches. To respond to these demands, businesses need to increases and productivity efficiency. This can be achieved through lead time and set up time reduction, through the implementation of rapid changeovers and through effective scheduling. In this new environment, cycle time reduction provides a key competitive advantage. Reduced cycle time can translate into increased customer satisfaction. Quick response companies can launch new products earlier, penetrate new markets faster, meet changing demands, and can deliver rapidly and on time. They can also offer their customers lower costs because quick response companies have efficient processes with low inventory and less obsolete stock. According to practical studies, halving the cycle time and doubling the work in progress inventory turns can increase productivity. Moreover, quartering the time for one step typically reduces costs. With reduced cycle times, quality improves too. Faster processes allow lower inventories which, in turn, expose weaknesses and increase the rate of improvement. After eliminating non value added transactions there are fewer opportunities for defects. Fast cycle time organizations experience more rapid feedback throughout the supply chain as downstream customers receive goods closer and closer to the time they were manufactured. On the other hand, businesses that do not pursue cycle time reduction do not merely stand still. They face the opposite of cycles of learning. When a company cannot manufacture quickly enough to respond to customer orders, they must institute forecasts. The longer the cycle time, the further out and less accurate the forecast becomes. Forecast errors because expediting to meet unexpected demand and the SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 8
  9. 9. FORTUNE ELASTOMERS Pvt. Ltd . disruption adds to queuing and missed deliveries. The entire production process becomes asynchronous with high lead time variability and raising safety stock needs. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 9
  10. 10. 1.2 Indian Economy Overview India's economic growth is expected to pick up a faster pace in 2013-14 and record six FORTUNE ELASTOMERS Pvt. Ltd . per cent plus levels of gross domestic product (GDP), according to Mr C Rangarajan, Chairman, and Prime Minister's Economic Advisory Council (PMEAC). India was reported to expand at a better rate as compared to its three BRIC peers China, Russia and Brazil in May 2013, as per a survey by HSBC. India was also ranked amongst the top 20 real estate investment markets globally with investment volume worth Rs 190 billion (US$ 3.05 billion) recorded in 2012, according to Cushman & Wakefield's report ‘International Investment Atlas’. India witnessed an improvement in its business climate on the back of increased foreign direct investment (FDI) and greater revenue receipts by the Government. The ‘BluFin Business Cycle Indicator (BCI)’, which reflects various macroeconomic trends on a monthly basis, stood at 165.3 points in July 2013, 5.3 per cent higher compared to July 2012. Some of the other important economic developments in the country are as follows: • Indian companies have invested Rs 3,497 billion (US$ 57 billion) across Europe during 2003-2012, of which Rs 2,358 billion (US$ 38.44 billion) was through mergers & acquisitions (M&A) deals of 411 companies. A dominant 47 per cent of the Indian greenfield investment and 63 per cent of the employment creation was received by the United Kingdom (UK) • Indian companies have raised about Rs 117 billion (US$ 1.9 billion) through external commercial borrowings (ECB) and foreign currency convertible bonds (FCCB) in June 2013 to fund modernisation, foreign acquisition, importing of capital goods and refinancing of old loans • India registered FDI growth of 24.2 per cent year-on-year (y-o-y) to touch Rs 242.28 billion (US$ 3.95 billion) in April-May 2013, according to data released by the Department of Industrial Policy and Promotion (DIPP) • The cumulative amount of FDI equity inflows into India were worth Rs 12.09 trillion (US$ 197.24 billion) between April 2000 to May 2013, according to the latest data published by Department of Industrial Policy and Promotion (DIPP) • Foreign institutional investors (FIIs) made a net investment (including equity and debt) worth Rs 30.57 billion (US$ 498 million) as on August 7, 2012-13, SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 10 according to data published by Securities and Exchange Board of India (SEBI)
  12. 12. FORTUNE ELASTOMERS Pvt. Ltd . INDUSTRY ANALYSIS 2.1 HISTORY OF FOOTWEARS:Spanish cave drawings from more than 15,000 years ago show humans with animal skins or furs wrapped around their feet. The body of a well-preserved “ice-man” nearly 5,000 years old wore leather foot coverings stuffed with straw. Shoes, in some form or another, have been around for a very long time. The evolution of foot coverings, from the sandal to present-day athletic shoes are marvels of engineering, continues even today as we find new materials with which to cover our feet. Has the shoe really changed that much though? We are, in fact; still wear sandals – the oldest crafted foot covering known to us. Moccasins are still readily available in the form of the loafer. In fact, many of the shoes we wear today can be traced back to another era. The Cuban heel may have been named for the dance craze of the 1920s, but the shape could be seen long before that. Platform soles, which wear one of the most recognizable features of footwear in the 1970s and 1990s, were handed down to us from 16th century chopines. Then, high soles were a necessity to keep the feet off of the dirty streets. Today, they are worn strictly for fashion’s sake. The poulaine, with its ridiculously long toes was not that different from the winkle pickers worn in the 1960s. If one can deduce that basic shoe shapes have evolved only so much, it is necessary to discover why this has happened. It is surely not due to a lack of imagination – the colors and materials of shoes today demonstrate that. Looking at shoes from different parts of the world, one can see undeniable similarities. While the Venetians were wearing the chopine, the Japanese balanced on high-soled wooden shoes called Get. Though the shape was slightly different, the idea remained the same. The Venetians had no contact with the Japanese, so it was not a case of imitation. Even the mystical Chinese practice of foot binding had been copied (though to a lesser extent) in our culture. Some European women and men of the past bound their feet with tape and squashed them into too-tight shoes. In fact, a survey from the early 1990s reported that 88 percent of American women wear shoes that are too small! SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 12
  13. 13. FORTUNE ELASTOMERS Pvt. Ltd . 2.2 INDIAN FOOTWEAR INDUSTRY The footwear sector is a very significant segment of the leather industry in India; rather it is the engine of growth for the entire Indian leather industry. India is the second largest global producer of footwear after China, accounting for 13% of global footwear production of 16 billion pairs. India produces 2065 million pairs of different categories of footwear (leather footwear - 909 million pairs, leather shoe uppers - 100 million pairs and non-leather footwear - 1056 million pairs). India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand. 2.2.1 The major production centers in India are • Chennai, Ranipet, Ambur in Tamil Nadu, • Mumbai in Maharastra, • Kanpur in U.P., • Jalandhar in Punjab, • Agra, • Delhi, • Karnal, • Ludhiana, • Sonepat, • Faridabad, • Pune, • Kolkata, • Calicut • Ernakulam. About 1.10 million are engaged in the footwearmanufacturingindustry. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 13
  14. 14. FORTUNE ELASTOMERS Pvt. Ltd . 2.2.2 Footwear exported from India are  Dress Shoes,  Casuals,  Moccasins,  Sport Shoes,  Horrachies,  Sandals,  Ballerinas,  Boots,  Sandals and Chappals made of rubber, plastic, P.V.C. and other materials. 2.2.3 Brands sourced from India: Footwear Acme,Ann Taylor, Bally, Charter Club, Clarks, Coach,Colehann, Daniel Hector,Deichmann, DKNY, Double H,Ecco, Elefanten, Etienneaigner, Florsheim, Gabor, Geoffrey Beene, Guess,Harrods, Hasley, Hush Puppies, Kenneth Cole, Liz Claiborne, Marks & Spencer,Nautica, Next, Nike, Cole Haan, Nunn Bush, Pierre Cardin, Reebok, Rockport,Salamander, Stacy Adams,Tommy Hilfiger, Tony Lama, Versace, Yves St. Laurent, Zara, Johnston & Murphy, Docksteps, Timberland,Armani, Geox, Diesel, Ted Baker, Lacoste, Kickers, Calvin Klein, Sioux,Brasher, Zegna, Massimu Dutti, Buggatti, Lloyd, Christian Dier, Salamander,Camper, Bata, Espirit, French Connection, Legero, Mercedez, H & M and many more famous brands SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 14
  15. 15. FORTUNE ELASTOMERS Pvt. Ltd . 2.2.4 Besides, major brands are sourced from India, MNC brands are sold in India and Indian brands sold in India. MNC Brands Sold in India Aldo, Bally, Clarks, Ecco, Florshiem, Indian Brands sold in India Red Tape, Bata, Liberty, Ferragammo, Hush Puppies, Lee cooper, Khadims, Lakhani, Metro, Lloyd, Marks & Spencer, Nike, Nine Action West, New Balance, Reebok, Rockport, Stacy Adams, Tod’s, Geox , Louis Vuitton US Retail giant Wal-Mart has also begun sourcing footwear from India since the last two years. The Footwear sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the footwear sector. Conducive Investment climate towards attracting overseas investments and increasing cost competitiveness. The Government of India is setting up dedicated Footwear Complex and Footwear Components Part where footwear clusters are located. There has been active interest in collaborating with Indian Footwear companies from European countries like Italy, Spain and Portugal. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 15
  16. 16. FORTUNE ELASTOMERS Pvt. Ltd . 2.2.5 Footwear Imports Global Trend: Major Importing Countries of Footwear (Leather and Non-Leather) (Value in Million US$) 2008 2012 USA 20039.13 23245.06 Germany 5966.99 8527.62 France 5473.04 6538.01 UK 5281.55 5886.75 Italy 4529.77 5661.77 Japan 3750.04 5062.13 Hong Kong 4881.67 4850.30 Russia 2067.82 3935.95 Netherlands 2297.95 3716.65 Spain 2388.74 3114.08 Belgium 2543.04 2427.09 Canada 1677.05 2089.43 Country Source: International Trade Center , Geneva 2.2.6 Major Exporting Countries of Footwear (Leather and Non-Leather) (Value in Mn $) 2008 2012 China 24181.69 39374.18 Italy 9712.94 10376.18 Hong Kong 5639.64 5317.32 Germany 2999.19 4659.42 Belgium 3375.63 4155.85 Indonesia 1567.05 3227.01 Netherlands 1811.96 3225.10 Spain 2440.47 2823.39 France 1840.51 2420.04 Portugal 1695.88 2088.41 UK 1055.99 1469.57 Romania 1394.32 1393.71 Country 2.2.6 Footwear – Global Scenario and India’s share The global import of Footwear (both leather footwear as well as non-leather footwear) has increased from US$ 81.47 billion in 2007 to US$ 103.38 billion in SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 16
  17. 17. FORTUNE ELASTOMERS Pvt. Ltd . 2011, growing at a CAGR of 6.13%. During 2011, the India’s share in the global import is 1.92%. (In Million US$) 2008 Global import of Footwear India's export of Footwear 2009 2010 2011 2012 81477.88 88822.80 78453.08 91614.94 103385.24 1489.35 1534.32 1507.59 1758.67 2079.14 & Uppers % Share of India 1.82% 1.72% 1.92% 1.91% 2.01% Source: Inter national Trade Center , Geneva & DGCI &S, Kolkata For comparison purpose, Global Footwear import includes leather & non-leather footwear. India’s Footwear includes – Leather, non-leather and leather uppers Footwear is the engine of growth of the leather industry in India. India’s export of Footwear touched US$ 2055.93 million in 2012-13, accounting for a share of 41.14% in India’s total export from the leather sector of US$ 4996.91 MN. India’s Footwear export (leather, uppers & non-leather) is growing at a CAGR of 7.59% in the last five years ending 2012-13 • India’s export of leather footwear had increased from US$ 1174.03 million in 2007-08 to US$ 1684.22 million in 2012-13. • India’s export of footwear components had declined from US$ 269.30 million in 2007-08 to US$ 245.04 million in 2012-13 • India’s export of non-leather footwear has increased from US$ 46.02 million in 2007-08 to US$ 126.67 million in 2012-13 2.2.7 India’s Footwear Export Growth over the last Four Decades Export of footwear from India increased manifold over the last four decades. During 2012-13, India’s footwear export is valued at US$ 2055.93, constituting 41.14% share in total export of leather & leather products. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 17
  18. 18. FORTUNE ELASTOMERS Pvt. Ltd . Footwear exports has increased from US$ 102.37 million in 1982-83 to US$ 2055.93 million in 2012-13 2.2.8 Major Markets: The major markets for Indian Footwear are UK with a share of 19.06%, Germany 13.36%, USA 11.06%, Italy 7.96%, France 7.61%, Spain 4.93%, Netherlands 4.47%, UAE 3.67% and Denmark 1.60%. Nearly 82% of India’s export of footwear goes to European Countries and the USA with exports touching US$ 1456 mn to EU and US$ 227.37 mn to the USA. Future growth of Indian footwear in India will continue to be market driven. The European countries and the US are major consumers for the Indian footwear. 2.2.9 A Statement showing India’s Export of Footwear (leather, non-leather and leather shoe uppers) to different countries: SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 18
  19. 19. FORTUNE ELASTOMERS Pvt. Ltd . (Value in Million $) Country 2005-06 Germany UK Italy USA France Spain Netherlands Portugal UAE Denmark Australia Sweden Canada SouthAfrica Japan Others Total 2006-07 170.97 195.78 134.35 131.07 74.48 63.7 32.96 22.15 25.78 18.37 11.58 6.77 11.95 8.26 3.17 133.9 1045.24 217.23 208.2 186.11 127.15 99.81 64.57 48.57 35.03 34.64 14.65 10.11 7.99 10.91 12.11 3.07 156.76 1236.91 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 % Share 246.84 229.65 224.3 286.7 353.71 274.63 13.36% 241.37 247.06 296.45 339.65 360.52 391.95 19.06% 229.81 221.09 210 219.72 219.61 163.66 7.96% 136.92 163.03 123.6 143.02 183.02 227.37 11.06% 116.03 119.2 144.56 154.95 159.49 156.53 7.61% 76.69 91.86 95.94 112.05 113.85 101.40 4.93% 72.91 76.2 65.13 6.19 101.72 91.82 4.47% 37.34 28.21 22.63 25.69 28.76 21.40 1.04% 39.23 39.4 39.45 41.82 62.14 75.46 3.67% 17.48 14.78 17.01 16.55 24.30 32.88 1.60% 12.52 13.34 15.5 12.82 15.59 22.41 1.09% 12.04 12.64 12.2 12.07 14.08 11.98 0.58% 10.41 8.96 9.3 10.56 15.00 14.86 0.72% 8.52 8.49 9.87 11.33 14.75 13.49 0.66% 4.63 8.23 5.45 7.51 14.63 18.85 0.92% 226.61 252.18 216.2 358.04 397.97 437.24 21.27% 1489.35 1534.32 1507.59 1758.67 2079.14 2055.93 100.00% Future Trends: - Keeping in view its past performance, current trends in global trade, the industry’s inherent strengths and growth prospects, the footwear industry aims to augment production, thereby enhancing its exports from the current level of US$ 2.07 billion. 2.2.10 Indian footwear industry poised for growth India has state-of-the-art manufacturing plants. The footwear sector has matured from the level of the manual footwear manufacturing method to the automated footwear manufacturing systems. Footwear production units are installed with world class machines. Manned by skilled technicians, these machines help to turn any new innovative idea into reality. Support systems created for the sector have indeed served the footwear industry well. India has a well developed footwear component manufacturing industry. The future growth of the footwear industry in India will continue to be market-driven, and oriented towards EU and US markets. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 19
  20. 20. FORTUNE ELASTOMERS Pvt. Ltd . With technology and quality of the footwear improving year after year, Indian Footwear industry is stamping its class and expertise in the global footwear trade. 2.3 FOOTWEAR INDUSTRY IN KERALA: Above 100’s of footwear factories are working in Kerala. ‘Radiant Moulds’ in Nallalam is the first footwear factory in Kerala. Now it’s known as Monaco footwear’s. There are plenty of footwear factories working in Malabar. Malabar is known as the land of footwear industry. In 1990 the Chappals industry entered in Kerala. Then this industry remarkably growing. This particular industry gives employment to a great part of population in Kerala because of this particular reason the state Govt. Is boosting this industry by providing loans and incentives for their growth. The main reasons for the concentrated of these industries in Malabar are the following.  Availability of raw materials.  Easy transportation facility  Good market  Easy availability of fuel and power at Concessional rates.  Labor supply SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 20
  22. 22. FORTUNE ELASTOMERS Pvt. Ltd . COMPANY PROFILE 3.1 VKC GROUP OF COMPANIES “VKC group of companies are the leading footwear manufacture especially in southern region of India. The group established on (August17) 1984 with a nominal capital and few employees. In 1984 the founder of the group Mr. V.K.C. Mammed Koya started a Hawai Sheet manufacturing unit with his two brothers. Later on Hawai straps were also inducted to the production line and in 1986 VKC group launched the first product with its own brand name in the market viz. VKC Hawai with an initial production of 600 pairs per day. By 1989 the production increased to 5000 pairs a day and by 1996 it jumped to 17000 pairs. In between the founder initiated the floating of the first RPVC (Rigid Polyvinyl Chloride) footwear manufacturing unit in the Malabar Area of Kerala state with few of his friends. This product also got very good acceptance in the market. This resulted in a rapid change in the footwear industry itself. Within a few years the number of Rubber and RPVC unit grew to more than 80 in this area. In 1994 the group ventured the first unit in Kerala to manufacture footwear from virgin PVC. This resulted in a drastic change and the multinational brands confronted competitions from the local brands. In 1998 the group started the first Micro Cellular PVC footwear in Kerala with the help of imported plant and machinery. “Quality at low price” made the VKC groups products popular in the market day by day. In 2001 the group started the first Air Injected PVC DIP footwear manufacturing unit in the South India. In 2003 the group missioned the first Injected EVA manufacturing unit in South –Central India. In 2006 the group started backward integration to produce EVA compound for Injection and started the first EVA compounding plant in the South –Central India. During this period new bloods with technical, commercial and practical knowledge were inducted and now the group consists of 25 working Directors and SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 22
  23. 23. FORTUNE ELASTOMERS Pvt. Ltd . 100 share holders spread over 16 various units. And have annual group turnover of Rs.4000 million. More than 4000 employees are working in these units. The company had achieved a prominent position in the footwear market of India. The main markets, which is been focused by the company are Kerala, Tamilnadu Karnataka, Madhya Pradesh, Gujarat, Andra Pradesh. It has now expanded its market in countries such as Saudi Arabia, Dubai, Kuwait, Oman, Bahrain and Qatar. The good quality and variety in models of VKC products help the companies to face the market competition positively. The company has been able to maintain the quality of the products by adopting foreign technologies. The group is now looking for further avenues in the field of footwear to stretch their hands. 3.2 Vision To provide quality products to the customer at an affordable price. 3.3 Mission To meet the market demand and to achieve a prominent position in the Footwear industry. 3.4 Motto “Quality products at Affordable Price” SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 23
  25. 25. FORTUNE ELASTOMERS Pvt. Ltd . 3.5 FORTUNE ELASTOMERS PVT.LTD M/s. Fortune Elastomers Pvt. Ltd. is registered as a private limited company and is one of the largest producers of DIP footwear’s in Kerala. It is one of the associate concerns of renowned VKC Group of Companies. The founder of M/s. Fortune Elastomers Pvt. Ltd. is Mr. V.K.C. MAMMED KOYA. The company is situated at KOLATHARA; KOZHIKODE .The Company has been able to achieve a landmark in the field of footwear through the continuous researches in footwear industry. The company manufactures Pride brand footwear having PU sole with leather and synthetic leather upper. The company was incorporated on 17.02.2000 under the Companies Act 1956 and commenced its production on 24 th September 2001. All affairs and day-to-day business administration of the firm is vested in the hands of Board of Directors. They are in charge of various functions pertaining to Finance, Production, HR, Marketing, Administration and Materials departments. The board is assisted by well qualified staff members. Each department has functional heads, senior and junior executive in order to support and help functional heads. M/s. Fortune Elastomers Pvt. Ltd caters to extend its markets of Kerala, Karnataka, Tamilnadu, Andra Pradesh and certain countries outside India. M/s. Fortune Elastomers exports the footwear’s to countries such as Saudi Arabia, Dubai, Kuwait, Oman, Bahrain and Qatar. Exports have shown a steady growth over the years .The products have a high brand value in the minds of the people of Kerala because of the quality and the affordable price of the product. The management gives high priority to the quality of the product. The company assures the quality of the product through the continuous quality checking in each and every stages of the production process. The quality of the VKC products is unrivalled in the market. The Footwear’s introduced by the company has been growing and evolving with the changing trends over the year. In recent years the customers prefers the DIP Footwear’s than any other Footwear. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 25
  26. 26. FORTUNE ELASTOMERS Pvt. Ltd . As we are manufacturers of footwear, we focus mainly on production process of the organization. The function of the production department is to produce our products on time, to the required quality levels, at the defined product cost. The main advantage of the company is the implementation of Italian technology for the injection moulding process. We have both automated and manual machines for production of footwear’s. The quality of the imported Synthetic leather, imported by us helps from the problem of smelling due to sweatiness and wetness, which is seen in ordinary leathers.The finish, comfort, and elegances are highly superior when compared to the ordinary leather. The production process is line production process whereby materials are put through a refining process to produce end-product through sequential operations. Of major concern to the production manager is monthly output. Production managers have monthly targets which they are expected to strive to meet or exceed. The total production estimated for a year is 51.6 lakh. The production department of M/s. Fortune Elastomers Pvt. Ltd comprises of well experienced staff members starting from functional head, department head, coordinator, supervisors, shift engineers, machine operators, pouring men and workers. Production department also aims at maintaining the quality of products been produced. Every employee is expected to take responsibility for managing quality issues in order to make sure that waste is minimised and quality maximised. Quality checking and assurance is carried out every day on a number of occasions to ensure that the production process is working efficiently and effectively. We use different machines to produce footwear’s. The company purchases footwear moulds from Taiwan, China, and Italy. This will help the company to assure high quality finished product. Most of our machines are imported from abroad. It includes high speed mixer machine, fully automatic air injection moulding machine, air drier & chiller, cooling tower, cementing machine, box strapping machine, clicker machine, generator conveyor, stitching machine. M/s.Fortune Elastomers Pvt.Ltd. has succeeded in withstanding stiff competition from the parallel manufactures because of the superior quality of the products at reasonable price. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 26
  27. 27. FORTUNE ELASTOMERS Pvt. Ltd . Other than production and quality checking, production department performs one more function. That is packing of finished products into cartons. A set of workers are assigned to pack finished products into specified cartons or boxes according to their name and size. Before packing quality is again checked by the workers. After packing all these cartons are sent to stock room for storing so that it can be sent to dealers directly according to the order placed. After production these products are being sold in the market according to the orders taken by marketing department. The marketing department studies the market and the target customers, decides the best way to reach these customers, and works with the rest of the company to help determine the new product needs of the market. We do continuous market research, which helps us in planning and executing marketing strategies for the future course of action. It also helps us in analyzing the buyer habits, popularity of product, and effectiveness of advertising media. It also helps to collect information about marketing problems and opportunities The company executives are directly taking the orders from the wholesalers. The Company has very good system for the supply of the products to the wholesalers. We sent our products through parcel service to various dealers based on their orders to respective places and doesn’t have connection with any retailers. Our product reaches the hand of customers through retailers, who gets it from wholesalers. The company manufactures products on the basis of demographic segmentation. As a result, we produce products aiming youngsters, gents and ladies at affordable price with high quality. We produce footwear under the name VKC Pride. The company slogan is “The Coolest Choice from fortune”. The Company treats the advertising as the main mode of marketing to improve the sales of our products.. Ambassador of our product is Cine Actress Meera Jasmine. VKC’s Advertising covers all activities connected with giving publicity regarding goods and services offered for sale. The main Medias for advertising are: Indoor Media & Outdoor Media Indoor Media includes TV Channels, News papers, Magazines, Catalogues, Danglers, Calendars, & Stickers. Advertisement of the products are given in all the SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 27
  28. 28. FORTUNE ELASTOMERS Pvt. Ltd . major TV channels in Malayalam Outdoor Media includes Name boards, A boards and Hoardings. Marketing and sales goes hand in hand. Sales promotion plays a major role for the success of the VKC products. Sales promotion influences the customers for buying the products and also helps to meet competition and helps in stimulating demands. Sales Promotion is carried out in two ways. Consumer’s promotion and dealer promotion. Consumers promotion consists of providing coupons, contest that we conduct and price offer for our various products. For dealers we conduct sales contest, give gifts, and turnover allowance based on the amount products been purchased from our firm. Company provides scheme called VKC Sammanotsavam for dealers based on their purchase for that particular year. The Company conducts the Wholesalers Meet at least once in a year. By this the company provides an opportunity to the wholesalers to interact with the company and between the dealers. This helps to find problems, sort out differences, and to formulate plans for future improvement in the market. The adequate production, supply, good quality, affordable price of the product, and the various marketing techniques used by the company helps products to be a superior one in the market that satisfies the customer. Human resource department of the organization caters to the need of both employees and workers of the organization, resulting in a good relation between employees and workers. They are well satisfied with the attitude of the management towards them and in the facilities provided to them. So there are no labour strikes, absenteeism and attrition. The company provides excellent training programs for the employees to improve the skills and productivity with in a lesser time. The employees are getting the statutory benefits like Bonus, ESI scheme, Employees Provident Fund, Festival Holiday Allowances from the company. They are often given awareness class related to cleanliness, health and safety. HR department maintain a help desk in order to redress grievance of the workers and answer to their queries. There are total of 232 SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 28
  29. 29. FORTUNE ELASTOMERS Pvt. Ltd . workers in the organization. Te number of male workers is 202 and the female is 30. The company located in total 3.5 acre and the building 1.5 acre. It is a semi-urban area by the company located and single level building. Finance is life blood of every organization. It deals with procurement of funds and their effective utilization in the business. Department has one department head, one senior executive and four junior executive. Their functions mainly include checking daily cash accounts, MIS preparation, bank reconciliation, central excise and export related works, finalization of account statement etc. M/s. Fortune Elastomers Pvt. Ltd doesn’t have any term loan and is financially stable. The annual turnover of the organization for the last financial year 2011-2012 is 52 crores. Materials department of the organization place order according to need of material that’s used for production. Supervisor’s and production in charge gives details of materials needed for production and accordingly materials are purchased by placing order through e-mail. 3.6 TYPE OF THE ORGANIZATION The company was formed under private limited. Mr.Mammed koya is the founder of the unit on 24/09/2001 the company was started their work. The company location is located in semi-urban area. 3.7 NAME OF THE PRODUCT The company is producing costumer oriented product, only single brand is producing in this unit that is” VKC Pride”. Total seven types brand are producing under the VKC, remaining six types are producing another units the products name like, VKC Lite, VKC Stile, VKC Slipons, VKC Junior, VKC Trendz, VKC Smartak. The company producing the product aimed to all type peoples. 3.8 AWARD RECEIVED BY THE ORGANIZATION SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 29
  30. 30. FORTUNE ELASTOMERS Pvt. Ltd . The Chairman of the firm was awarded with Best Entrepreneur of Kozhikode district by Kerala State Small industries Association for the year 2005-2006. And also the company was got ISO certificate 9000-2001. 3.9 SOCIAL WELFARE The VKC group is sponsored by a school at MARADU it is a rural area. The company chairman is giving cash to poor people for medical treatment. Every Year the company is keeping cash for these purposes, it is the one little portion of profit. 3.10 FUTURE PLANNING The one of important future aspect is to be installing in SAP in the all department. The VKC footwear is aimed that this idea will be making ease to doing the work and to be minimizing the errors. It will be making more profit and all works are doing with the help of computers. Now the VKC footwear is trying to spread their market in world. On this basis firstly the company is doing the research programme in North West part of India and Middle East countries. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 30
  31. 31. FORTUNE ELASTOMERS Pvt. Ltd . 3.11 COMPANY PROFILE YEAR OF INCORPORATION: 17/02/2000 (Functions started on 24/09/2001- Company Act1956) FOUNDER: Mr. Mammed koya (chairman cum MD) CEO: Mr. K.M. Hameed Ali 3.11.1 DIRECTORS Mr. V. Mohammed Abdul Kareem Mr. P. Abdul Salam Mr. K. UmmarFarook 3.11.2 MANAGERS PRODUCTION: Mr.Abdul shukoor SALES: Mr.Honey markose HR: Mr.Praveen FINANCE: Mr.Tarun Jagdish MATERI: Mr.Sudheesh 3.11.3 LOCATION SATATE: KERALA DISTRICT: KOZHIKODE (CALICUT NH-17) PLACE: KOLATHARA (SEMI-URBAN AREA) PH NO: 04952482112 WWW.VEEKESY.COM SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 31
  35. 35. FORTUNE ELASTOMERS Pvt. Ltd . 4.1.1 PRODUCTION DEPARTMENT Production management is concerned with the decision making regarding the production of goods and services of a minimum cost according to the demand of the customers through the management process of planning, organizing and controlling Production is the transformation of inputs into outputs. Production means creation of utilities and covers all the activities of procurement, allocation and utilization of resources such as labour, energy, material, equipment, machinery etc. Utilities are goods and services which have want satisfying power. Production is the process by which goods and services are created. Production is heart of all business activities. MANAGER, NO.OF EMPLOYEES AND SALARY Mr.Abdul shukoor is the production manager of the company. The company salary structure of production department is 8000-15000; the unskilled labors salary is starting at 6000. Total employees in the production department are 201.The production process is going on three shift basis; each shift has one shift engineer at the time of one shift. In the company all employees are working on permanent basis, there is no contract employees. TECHNOLOGY USED IN PLANT Mainly Gusbi machines is using in the production process, it is the Italian technology and also using indigenous technology. The company is followed on the breakdown maintenance method. Every three months later the company was arranged in a safety training programme. The standard unit of the production capacity of the company is 21600(10800pairs). The maximum defected product produced per day is . 18%. The management is very carefully to handle the waste materials and defected products. The company is following on semi-automated. The machines are arranged in product layout model. That is similar machines are placed in a single group. SAFETY MANAGEMENT SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 35
  36. 36. FORTUNE ELASTOMERS Pvt. Ltd . The fortune elastomers installed in well advanced technology. The working place accident are happen in the company is very rarely cases. But it cannot be predicted when to happen, so the management is conducted safety training programmes every six months in the company. DEPARTMENT STRUCTURE DEPARTMENT HEAD COORDINATOR SUPERVISOR SHIFT ENGINEERS UNSKILLED WORKERS SKILLED WORKERS CHART NO.2 FUNCTIONS  Make the use of maximum of raw materials  Control of production  Standardization in production  Ensure the flexibility in production  Minimization of cost of production  Ensure quality of products Production is an economic process that uses resources to create a commodity that is suitable for exchange. This includes manufacturing, sorting, shipping and packaging. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 36
  37. 37. FORTUNE ELASTOMERS Pvt. Ltd . Some economists define production broadly as all economic activities other than consumption. They see every commercial activity other than the final purchase as some form of production Production is a process, and as such it occurs through time and space. Because it is a flow concept, production is measured as a “rate of output per period of time”. There are three aspects to production processes; A. The quantity of the commodity produced, B. The form of the goods created, C. The temporal and spatial distribution of the Commodity produced. FACTORS OF PRODUCTION The inputs or resources used in the production process are called factors of production by economists. The myriad of possible inputs are usually grouped into 6 categories these factors are; • Raw materials • Machinery • Labor services • Capital goods • Land • Entrepreneur In the “long run”, all of these factors of production can be adjusted by the management. The “short run”, however, is defined as a period in which at least one of the factors of production is fixed. A fixed factor of production is one whose quantity cannot readily be changed. Examples include major pieces of equipment’s, suitable factory space, and key managerial personnel. A variable factor of production is one whose usage rate can be changed easily. Examples include Electrical Power consumption, Transportation services, and most Raw material inputs. In the short run, a firms “scale of operations” determines the maximum number of outputs that can be produced. In the long run, there are no scale limitations. FOOTWEAR MANUFACTURING SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 37
  38. 38. FORTUNE ELASTOMERS Pvt. Ltd . The footwear manufacturing process is highly Labor intensive, requiring a large number of cutting, screwing and stitching operations. For that reason, manufacturing activities have been transferred to countries that can provide cheap Labor, wholesalers, distributors and retailers of branded, unbranded and private label footwear continuously search for the countries with lower cost manufacturers because production machinery and equipment for making most types of footwear do not require large investments, manufacturing operations can be moved readily from one country to another with little difficulty. The production department of M/s. Fortune Elastomers Pvt. Ltd comprises of well experienced staff members starting from functional head, department head, coordinator, supervisors, shift engineers, machine operators, pouring men and workers. Production department also aims at maintaining the quality of products been produced. Every employee is expected to take responsibility for managing quality issues in order to make sure that waste is minimized and quality maximized. Quality checking and assurance is carried out every day on a number of occasions to ensure that the production process is working efficiently and effectively. Most of our machines are imported from abroad. It includes high speed mixer machine, fully automatic air injection molding machine, air drier & chiller, cooling tower, cementing, box strapping machine, clicker machine, generator conveyor, stitching machine. M/s. Fortune Elastomers Pvt. Ltd. has succeeded in withstanding stiff competition from the parallel manufactures because of the superior quality of the products at reasonable price. Other than production and quality checking, production department performs one more function. That is packing of finished products into cartons. A set of workers are assigned to pack finished products into specified cartons or boxes according to their name and size. Before packing quality is again checked by the workers. After packing all these cartons are sent to stock room for storing so that it can be sent to dealers directly according to the order placed. Eight machines are using the production department, two gusbi machines set (one set include 5 machines). PRODUCTION PROCESS SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 38
  39. 39. FORTUNE ELASTOMERS Pvt. Ltd . STEP-1: The first process is the Synthetic Rexene is cutting on the basis of different models. For this process using in punching machines and dies, different shape of upper part producing within in the help of different dies. In this stage should be producing in the upper part of the footwear. There are classified into two parts one is insole parts and other is upper material. STEP-2: After the cutting process the insole parts are giving for printing and embossing process. This process is done by the printing of company name and the brand name like VKC Pride and also printing the prices of different models. The upper part of the footwear is giving to in the stitching process. For this process the company is using in the outside like in small units. They are stitching in the basis of what models was given by the company. STEP-3: After finished the step two the next process is the printing and embossing the company name and brand name of the product, and fitting riveting above the upper parts. The rivet is giving to some selective models, which are more showed in the ladies model. STEP-4: After the step three the insole parts and upper parts stitching together. This one is collectively called to upper material finished footwear. STEP-5: The next step is to be making bottom part; this process is called to raw material mixing this process mainly used in two raw materials like, polyol and isognate. Programs logic control machines are used in the mixing process. It is an automatic machine; programme software was uploaded in this machine. The polyol firstly mixed in water after that the PLC machine mixed with isognate in 45 min. The mixing quantity is 71.4gm isognate(white) and 62.4gm polyol after mixing water(yellow). STEP-6: The next process is the mixed raw materials are pull to the injection machine. The lower footwear parts are looking in the two colors black and brown, which color is needed that one is given in the 7.5gm to the mixed raw materials(71.4 : 62.4 : 7.5). In this step FRtest(forming ratio) was conducted with the help of PLC system. If any variation was founded the PLC system display will be showed. STEP-7: The step seven is the injection molding process. This raw material is injected to the rotate machine. This machine has in a display for to show the temperature any one. Total 60 dies are in one rotate machine (30 pairs). The pasting SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 39
  40. 40. FORTUNE ELASTOMERS Pvt. Ltd . process is also doing this step; the upper parts are placed into the rotate machine branch it is moving up and down. The rotate machine branches are moving up and down. Then the liquid are injected to the rotate machine dies after that the lift down and rotate within the temperature 40-50 degree Celsius. In single footwear will be taken for the semi-finished products in the rotate machine were 4 min. STEP-8: The next process is trimming; it is the trimming to the waste part of the insole. After that it will send to quality checking. FR test was already and one more test is doing is called cup test. After that the finished goods giving to the packing process with the help of conveyor. Corrugated cartons (2ply) are used in packingprocess. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 40
  41. 41. FORTUNE ELASTOMERS Pvt. Ltd . PRODUCTION PROCESS LAYOUT Production Process Synthetic Rexene Raw Material Mixing Cutting Injection Molding Process SemiFinished Insole Material Printing& Embossing Stitching Process Trimming process SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 41
  42. 42. FORTUNE ELASTOMERS Pvt. Ltd . Packing Process Stitching Process Pasting Process Finished Footwear Upper Heating Process CHART NO.3 PACKING PROCESS Trimming Process Conveyor System Upper & Sole Cleaning Tag Fitting Packing into Small Carton Fixing Size & Price Sticker SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 42
  43. 43. FORTUNE ELASTOMERS Pvt. Ltd . in Small Carton Packing into Master Carton Final Checkup in Pairs, Art No., Size & Price Box Strapping CHART NO.4 SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 43
  44. 44. FORTUNE ELASTOMERS Pvt. Ltd . MACHINES IN PRODUCTION DEPARTMENT The company is the implementation of Italian technology used by them for the injection moulding process. Moulding process is the main activity and the key process of manufacturing of quality footwear. The Company purchases Footwear Mould from Italy, Taiwan and China. This will help the company to ensure high quality with accurate size and good finish to the product INJUCTION MOLDING MECHINE SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 44
  47. 47. FORTUNE ELASTOMERS Pvt. Ltd . Marketing is the function of transferring of products from the point of production to the point of consumption. Marketing include product, price, place and promotion. In VKC price of the product include cost plus percentage of profit. The product is sold only to wholesalers for further sales. The packaging is done in a separate unit on the basis of contract. That is the assembling unit which is far from the production unit. 4.2.1 MANAGER,NO.OF EMPLOYEES AND SALARY STRUCTURE The Fortune Elastomers Mr. Honey markose is the sales manager. The company is following on feedback from the market for the product planning process. The vkc company is covered in 60% areas of Kerala. The vkc group is producing seven types of footwear like, vkc pride, vkc lite, vkc stile, slip-ons, junior, trendz, vkc smartak. The Fortune Elastomers are producing in vkc pride only. Under the sales department 12 employees are working in the fortune elastomers , their salary structure is 8000-15000. The vkc group is categorized on two types Division -1( out of Kerala) and Division-2(Kerala only). The company is followed to selling their products in the wholesaler. The wholesalers selling to the retailers, so that in the channel of distribution is two. Vkc group is separated the territory in 6 zones, each zone has supervisor. The company is providing in TA and the incentives paid on the basis of total sales. Every working days the sales manager should be contacted the zone head in the 2hrs interval. 4.2.2 SALES DEPARTMENT STRUCTURE SALES DEPARTMENT HEAD EXECUTIVE JUNIOR EXECUTIVE CHART NO.5 4.2.3 MARKETING FUNCTION SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 47
  48. 48. FORTUNE ELASTOMERS Pvt. Ltd . The most widely accepted classification of marketing functions is given by clerk and clerk. They have divided various marketing functions into three classes. 1. Functions of exchange. 2. Functions of physical supply. 3. Facilitating function. OF EXCHANGE a) Buying b) Assembling c) Selling FUNCTIONS OF PHYSICAL SUPPLY a) Transportation b) Storage and warehousing FUNCTIONS a) Standardization and Grinding b) Branding c) Packing and packaging d) Pricing e) Marketing information f) Product planning and development g) Financing h) Risk taking i) Promotion SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 48
  49. 49. FORTUNE ELASTOMERS Pvt. Ltd . 4.2.4 PRICE Objectives of pricing ♦ To maximize profit ♦ To maintain or improve the market share ♦ To achieve a desired rate of return on investment ♦ To meet or prevent competition ♦ To stabilize the product prices ♦ To mobilize resources for development and expansion ♦ To build image and enhance goodwill Factors affecting pricing decision or pricing policing Internal factors ♦ Costs ♦ Objectives ♦ Organizational factors ♦ Marketing mix ♦ Product differentiation ♦ Product life cycle External factors ♦ Demand ♦ Competition ♦ Distribution channel ♦ General economic condition ♦ Govt. policy 4.2.5 MARKETING RESEARCH The pricing policy of VKC products is depends upon the material price. The price of VKC footwears is affordable to all customers. The company is following on field research and random sampling survey method is used for research. The sales SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 49
  50. 50. FORTUNE ELASTOMERS Pvt. Ltd . forecasting is based on the dealer’s opinion. Cost leadership strategy was adopted by the company and competitive pricing method. VKC product has to select an appropriate pricing method. It is selected after taking into consideration. The cost customers perception regarding quality and value, competitors price, govt. legislation etc. To decide on the final price, some additional factors like consumer’s psychology. Firms pricing policy impact of the competitors etc. must be taken in to consideration. The pricing policy of VKC products is accomplished with quality, quantity, demand etc in their products. Price is very important to both buyers and sellers. The buyers always want to buy at very low price while the seller always desires to sell at a higher price. So selling price is a complex problem to all organization. VKC sets the price for the product by considering the following factors.  Pricing policy followed by competitors/price of competitive product.  Cost of production and distribution.  Price of different item in the product line  Distribution channels.  Business objectives  Demand for the product. 4.2.6 PRICE ADJUSTMENT STRATEGIES After fixing the price, a manufacturer faces the problems of reduction in the prices quoted. A difference between the price quoted and the net price charged is known as price differential. The price reduction is made in the form of discounts, allowances, rebates etc. VKC brings into use the following discounts  Trade Discount  Cash Discount SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 50
  51. 51. FORTUNE ELASTOMERS Pvt. Ltd . The company follows penetration pricing policy. Penetration pricing policy is the pricing technique of setting a relatively low initial entry price. The expectation is that the initial low price will secure market acceptance by breaking down existing brand loyalties. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than short term profit maximization. 4.2.7 ADVERTISING MEDIA The main advertising media used by the company are leading Newspapers, Banners, T.V, Radio, Stickers, Slide show in Calicut District and company site ( In 2011 January 14th, VKC gave a car for the prize winner of Grand Kerala Shopping Festival. In this year the company was spend to 5 cores rupees for only in advertisement. 4.2.8 DISTRIBUTION CHANNELS Direct Distribution is made to those dealers who pay before the company and direct distribution is done through the companies on their own vehicles. ‘VKC footwear gets from dealer all over the Country. The head of the department is the Marketing Manager. The marketing wing consists of the marketing manager, sales man and sales representatives. The main function of this department is canvassing orders and distribution of goods. Canvassing of order is done through the appointment of sales representatives in each and every place and through advertisement. VKC provided for the different marketing activity. The R&D function is study about the related in footwear industries. 4.2.9 COMPETITION It is a major determinant of marketing success of the company. There are buyers and sellers. The company is facing stiff competitions from Rubco, Premier, Lunar etc. In addition to this, there are hundreds of cottage industries that form a major threat to the company. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 51
  52. 52. FORTUNE ELASTOMERS Pvt. Ltd . 4.3 HUMANRESOURCE DEPARTMENT Human resources management is concerned with the people’s dimension in organizations. An organization consists of number of personnel. Competent personnel are to be appointed at right place at right time. Their activities are to be co-ordinate and properly rewarded. Human resource management is concerned with all the aforesaid activities. So the human resource management has a significant role to play in the overall development of an organization. To put in simple words, human resources management is a management function that helps managers to recruit, select, train and develop members for an organization. According to Edwin B Flippo, Personnel management/human resource management is “the planning, organi zing directing and controlling of the procurement, development, compensation, integration, maintenance and reproduction of human resources, to the end that individual, organizational and societal objectives are established. 4.3.1 HR DEPARTMENT STRUCTURE HUMANRESOURCE DEPARTMENT HEAD EXECUTIVE JUNIOR EXECUTIVE CHART NO.6 SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 52
  53. 53. FORTUNE ELASTOMERS Pvt. Ltd . 4.3.2DUTIES&FUNCTION OF HUMAN RESOURCE MANAGER Human resources is one of the most important and valuable assets in each every modern organization. The success and failure of a business depends on a efficiency of its workers. H R department deals with salary, wages, attendance, overtime, leave and the particulars relating to the contribution to employee’s provident fund, employees state insurance, accident fund. 4.3.3 MANAGER,NO.OFEMPLOYEES, SALARY STRUCTURE Mr.praveen he is the HR manager of the Fortune Elastomers. Under this department total 5 peoples are working. The wage structure is 8000-15000. 4.3.4 METHOD OF RECRUITMENT The company is using newspaper and internet by the recruitment method, mainly the company is choosing Hindu newspaper for the ads and. The company provides canteen facilities, educational facility, medical reimbursement, TA, accommodation facility, maternity and paternity leave, ESI, festival advance, bonus and terminal benefits. The punishment is very rare in the company; the company is looking for the performance of the each employees. If anyone is doing continuously poor performance the management will terminate them. There is no trade union in the company. For this result there is no labor strike. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 53
  54. 54. FORTUNE ELASTOMERS Pvt. Ltd . 4.3.5 The major functions of HR manager as follows 1. Human Resource planning - It is related with the determination of the number of personnel required in an organization. 2. Job analysis and design - Job analysis is a detailed and systematic study of jobs to know the nature and characteristics of the people to be employed in different kinds of jobs. 3. Recruitment and selection - Recruitment is a positive process of searching the required qualified person and stimulates them to apply for jobs in the establishment. In VKC, recruitment is carried out at head office, according the need of workers in any of the units. 4. Training and development -Human Resource department is responsible for giving proper training to employees to acquire new knowledge and skills. 5. Employee & executive remuneration - Every human resource manager is entrusted with the responsibility of establishing equitable wage and salary structure on one hand and maintaining an equitable labor cost on the other. 6. Health and safety - Human Resource manager should take proper measure to protect the workers against industrial accidents. 7. Motivating the workers, to enhance their productivity. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 54
  55. 55. FORTUNE ELASTOMERS Pvt. Ltd . 4.3.6 MPORTANT STEPS USED IN VKC FOR SELECTING CANDIDATES 1. Receipt and scrutiny of application This is the first step used in VKC FOOTWEAR for selecting candidates. The vacancies it will be notified in newspapers, and notice boards etc. After receiving the application from candidate, the personal department makes detailed scrutiny of their applications and select qualified applications. 2. Preliminary interview It is the basic interview conducted by the company. It done through telephonic interview. It help the organization to find out, how much the candidates are fit for the job and the educational qualification, age, sex etc of the candidates. 3. Interview Interview is a face to face talk between employer and applicants. It is an oral, observational appraisal method of evaluating the applicant. 4. Checking reference The candidates are required to write the name of respected and reputed person in that locality. So the employer can conduct enquires about candidates from these references, to know their background, skill, work experience and character. 5. Approval of the supervisor The name and details of the candidate selected is sending to the supervisor for approval. 6. Final selection After completing all the above formalities, the successful candidates are given appointment order. 4.3.7 QUALIFICATION OF THE WORKERS. All the employees working in HR, finance, marketing & materials department are graduates. The workers in production department are qualified and they have special knowledge and experience in footwear manufacturing. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 55
  56. 56. FORTUNE ELASTOMERS Pvt. Ltd . 4.3.7 PROMOTIONS. It is one of the most internal sources of recruitment. The employees will work hard if they know that they will get promotion. It provides motivation and inspiration to all employees. According to Edwin B Flippo, “a promotion involves a change from one job to another that is better in terms of status and responsibilities”. Basis of Promotion There are mainly two basis of promotion namely seniority basis (time) and basis of competence (merit or performance). The company is followed on the performance basis promotion. Every months ending the HR manager was preparing in a report of the all employees. This report is send to the top level management, they are studied the report and taking the decisions. 4.3.8 TRAINING & DEVELOPMENT. Training is the process of increasing the knowledge and skills for doing a particular job. It is an organized procedure by which people learn knowledge and skill for a definite purpose. That is, training is a systematic programme of the organization which aims at increasing the aptitudes, skill and abilities of the workers to perform specific job. By training, the employee can acquire new manipulative skills, technical knowledge, problem solving abilities etc. According to Edwin. B. Flippo, “Training is the act of increasing the knowledge and skill of an employee for doing a particular job”. The main purpose of training is to bridge the gap between job requirements and present competence of an employee. IMPORTANCE OF TRAINING.  It helps to improve workers efficiency and productivity.  It helps to reduce wastage.  Reduce the supervision cost.  Reduction in employee grievances  Reduce accidents and breakdown SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 56
  57. 57. FORTUNE ELASTOMERS Pvt. Ltd .  Reduce labor turnover and absenteeism etc.  Personnel development  Provide a good organizational climate.  Full fill the future requirement.  Leadership and motivation training conducted for management development (the company was selected outsider for this training) TYPES OF TRAINING. VKC footwear gives different type of training to new employees. The following are the important types of training. 1. Orientation training. This type of training is provided to new employees. A new employee is to be introduced in the organization. The information about the location of various departmental offices, cafeteria, and other facilities are to be given. He is also to be introduced to superior and subordinates. He should be given a full description of the job as he is expected to do. He is also informed about the policies, procedures, rules and regulation. All those are achieved through an orientation or induction programme. 2. Job training. VKC footwear provided job training, to increase the knowledge and skills of employees for improving the performance on the job. The workers are able to handle machines, equipments and materials safety and correctly through this type of training. Such type of training helps to reduce accidents, waste and inefficiency. It involves mainly two methods such as on the job training and off the job training. 3. Safety training. Company gives safety training to minimize accidents and damages. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 57
  58. 58. FORTUNE ELASTOMERS Pvt. Ltd . METHODS OF TRAINING. There are various methods for training. The management should select an appropriate method which is suitable to the organizational needs. VKC FOOTWEAR following on the job training method. ON THE JOB TRAINING This is the most effective method of training. Under this method the new worker is placed on a regular job and training is given by his immediate supervisor at the working place. The trainee learns by observing and handling the job. This method of training proved to be a great success. Induction programme are also done the company for the new employees. 4.3.9 COMPENSATION. Salary or wages is one of the most important factors for developing and maintaining good employer-employee relationship. To attract best talented persons, every organization tries to have a good wage structure. The salary of a person determines his status in society. An employee should be compensated equitably for the services rendered to the organization. The compensation is calculated by considering the following facts. 1. Nature of the job undertaken. 2. The relative value of the job. 3. The realistic worth or ability of an employee in performing job. According to Wendell French, “Compensation is a comprehensive term which includes wages, salary, METHODS OF COMPENSATION. The compensation method of the company footwear is; SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 58
  59. 59. FORTUNE ELASTOMERS Pvt. Ltd . 1. Time wage system: - The sole footwear is produced under time wage system. Under this system, worker is paid on the basis of time spent on the job. This method does not give weight age to the quality of goods produced by the workers. Vkc footwear always maintains good employer-employee relationship. Good labor relation ensures the smooth flow of work without any hindrance. If the employees are satisfied with the benefits provided by the company, there is no chance of labor strike, labor absenteeism and labor resignation. In order to make better labor relation VKC FOOTWEAR providing the following benefits. A. MONITORY BENEFITS Monitory benefits are those which can be measured in terms of money.VKC footwear offered the following monitory benefits to employees. a) Basic pay:-VKC footwear gives basic salary to its staff members depends upon the service and efficiency of employees and minimum wage Act. b) Festival Holiday Allowance:-These are the additional payments given to the workers during festival occasions. So that workers can meet additional expenditure arising in these seasons. c) Bonus:-Bonus is the special payment made to the workers in addition to their normal salary. These special payments are given to workers on year ending months or any other special occasions. The amount of bonus will depends up on the amount of company‟s profit. d) Provident fund:-Company contributes to PF the same amount as provided by the employees. The Government rate is (Basic salary +DA+Night allowance)*12% e) Salary advances:-Company allows advance salary to employees without any interest. f) Overtime allowance. g) Travel allowances. B. NON-MONITORY BENEFITS These benefits include all measures adopted to build labor relations other than monitory measures, it includes the following. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 59
  60. 60. FORTUNE ELASTOMERS Pvt. Ltd . Rent free accommodation: -Company provides rent free accommodation to employees if they have not own house near the factory. Moreover the company gives the following perquisites to its workers,  Subsidized food Company provides food to the staff with a subsidiary of 50% on the rate.  Footwear The company provides footwear to all employees, especially in all festival time. Leave granted to the employees a) Weakly off Company offers one day leave for every six days work. b) Annual leave Company allowes15 days leave to the staff with full pay within a year. 4.3.10 EMPLOYEE OR INDUSTRIAL SAFETY. Industrial safety or employee safety refers to the protection of workers from the danger of industrial accidents. Industrial safety is one of the important responsibilities of the management in the modern industrial set up. One of the major problems faced by an industrial worker is accidents. VKC footwear undertaking the following measures to prevent the accidents. a. Proper training and education. b. Control of hazardous conditions. c. Control of unsafe acts. d. Timely repairing of machines and equipments To ensure the safety of Workers Company providing safety goggles, glows, mask, shoes etc. Moreover company providing various facilities to workers. They are,  Proper lighting: - Fluorescent lamp lighting is provided with in the factory.  Ventilation: - It is to ensure the maximum availability of fresh air. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 60
  61. 61. FORTUNE ELASTOMERS Pvt. Ltd .  Cool water Company provided cool water at any time to the employees within the factory.  Seating The company has provided seating facilities, to take relief while they are at work. 4.3.11 SAFETY RULES IN AN INDUSTRY.  Use the right tool for right job.  Use them in good condition.  Do not disturb the fellow workers.  Do not use loose clothes while machining. 4.3.12 COPERATIVE SOCIAL RESPONSIBILITIES The concept of social security is related to the high ideals of human dignity and social justice. It is primarily an instrument of social and economic justice. To ensure the social security of workers VKC footwear contributing the, Employee’s provident fund. In the VKC footwear contributes PF from their employees and employers. The ratio of PF is 12% of basic salary of employees and the employers giving to total 12%, these one is divided into two a). 8.33% for employees’ pension b). 3.67% for employees PF. S I (employees safe/state insurance). The ESI contributed by the employees in 1.75% ratios. Employers are contributed in 4.75% ratio. The concept of ESI is useful for meet to employee’s medical expenses. In the condition is any employee was affected in accident only in the purpose of the company or any dangerous diseases. These cases the company is allowed the ESI amount. After six month the employees were appointed in the company the firm is also considered the employees family for ESI (not in all members). Every day the unit was arranged in a help desk. The aim of this one is to reduce the grievance. If any employee was felt into any working problem the help desk is giving a chance to tell his/her problem and the management giving in better solutions. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 61
  62. 62. FORTUNE ELASTOMERS Pvt. Ltd . Mentoring activities conducting the company for empowerment, development and distress of the workers. 4.4 MARKETING DEPARTMENT SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 62
  63. 63. FORTUNE ELASTOMERS Pvt. Ltd . According to American Marketing association, “marketing is the process of the planning and executing the conception. Pricing promotion and distribution of ideas, foods and survives to create exchange that satisfy individuals and organizational objectives” Marketing consists of all the activities, which create promote and distribute products, services in accordance with presents and potential consumer demand and the firm’s ability to produce. It involves identity, anticipating and satisfying consumer needs and desire. In short, marketing is the process of providing the right products of the right quality in the right quantity in the right places at eh right time. 4.4.1 STRUCTURE OF MARKETING DEPARTMENT Marketing Manager Channel Of Distribution Manager Assistant Manager Sales Promotion Manager Assistant Manager Advertaiemnt Manager Assistant Manager Market Research Manager Assistant Manager Sales Executive CAHART NO. 7 SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 63
  64. 64. FORTUNE ELASTOMERS Pvt. Ltd . To be the best product in the market company is giving importance to the following • BRAND NAME : • QUALITY The brand name used for the product is “VKC PRAID”. : Quality of the products is the main marketing technique that the company used. • ADVERTISING marketing : The Company treats the advertising as the main mode of to improve the sales of their products. But in the case of VKC PRAID, the advertisement is comparatively less. The brand image helps to sell the product in the market. 4.4.2 SCHEMES: One of the main marketing techniques of the company is the different Schemes for their customers and dealers. WHOLSALERS MEET: The Company conducts the Wholesalers Meet at least once in a year. By this the company provides an opportunity to the wholesalers to interact with the company and between the dealers. This helps to identify problems, sort out differences, and to formulate plans for future improvement in the market. ORDER TAKING & COLLECTION: The Company executives are directly taking the orders from the wholesalers. DELIVERY SYSTEM: The Company has very good system for the supply of the products to the wholesalers. The company had provided door delivery system and they are fixed a weekly chart for the supply. 4.4.3 THE MARKETING TECHNIQUES USED ARE: A) CHANNELS OF DISTRIBUTION B) SALES PROMOTION C) ADVERTISING D) MARKET RESEARCH SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 64
  65. 65. FORTUNE ELASTOMERS Pvt. Ltd . A) CHANNELS OF DISTRIBUTION: Channel of distribution is the set of marketing intermediaries through which the goods flow from the producer to consumer. The company had provided the door delivery system to the wholesalers for the distribution of products through their owned vehicles and through the different transporters. The Channel of Distribution followed by the Company is : The company adopts a two level distribution system consisting of Wholesale dealer and Retail dealer. The company is satisfied with the existing arrangements B) SALES PROMOTION: Manufacture Wholesaler Retailers Consumers Sales promotion plays a major role for the success of the VKC products. Sales promotion influences the customers for buying the products and also helps to meet competition. It popularizes the product so as to stimulate demand. Sales promotion tools used are Consumer promotion • Coupons • Demonstration • Contest • Price offer • Dealer promotion • Sales contest • Dealer gift • Turnover allowance SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 65
  66. 66. FORTUNE ELASTOMERS Pvt. Ltd . C) ADVERTISING & SCHEMES: The VKC’s Advertising covers all activities connected with giving of publicity regarding goods and services offered for sale. The main Medias for advertising are: Indoor Media &Outdoor Media INDOOR MEDIA • Tv Channels • News Papers • Magazines • Stickers, Calendars OUTDOOR MEDIA • Name Board • Hoardings TV CHANNELS: Advertisements of the products of the company are given in all the major TV channels in Malayalam. The Brand Ambassadors for the product is Cine Artist and Models “Lakshmi Rathan, Raji, Aaru Nayar, Baby Sooraj and Silpa” SCHEMES: The company is providing different schemes for customers, retailers and wholesalersduring seasons. This helps the company to gets the good results in sales and publicity. Thecompany had already undertaken various schemes and contests lik • VKC SAMMANOTSAVAM D) RESEARCH Market research helps in analysing the buyer’s habits, popularity of a product, and effectiveness of advertising media. It also helps to collect information about marketing problems and opportunities. The continuous marketing research has been SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 66
  67. 67. FORTUNE ELASTOMERS Pvt. Ltd . conducted by the company which helps them in planning and executing marketing strategies for the future course of action 4.4.4 THE PILLARS IN THE PATH OF SUCCESS OF THE FIRM is1. FOREIGN TECHNOLOGIES: The main advantage of the company is the implementation of Italian technology used by them for the injection moulding process. Moulding process is the main activity and the key process of manufacturing of quality footwear. The Company purchases Footwear Mould from Italy, Taiwan and China. This will help the company to ensure high quality with accurate size and good finish to the product. 4.4.5 EMPLOYEES OF THE FIRM: The Company always maintains good employer-employee relationship. The employees are well satisfied with the attitude of the management towards them and in the facilities provided to them. So there were no labour strikes, labour absenteeism and labour resignation. The company provides excellent training programs for the employees to improve the skills and productivity with in a lesser time. The employees are getting the statutory benefits like Bonus, ES scheme, Employees Provident Fund, Festival Holiday Allowances from the company. 4.4.6 QUALITY OF THE PRODUCT: Quality can be viewed as a weapon for competitive advantage, as a means of profitability and a source of value for customers, investment in quality achieves desired business results .Quality derives the productivity machine and leads the firm to prosperity. Quality of product is the combined effort and cooperation of the entire organization. Quality Management of VKC involves quality planning, quality control and quality improvement which are cross functional in nature. The company has to face keen competition in the market since there are numbers of footwear’s manufactures in the country. The main factor, which determines sales, is the quality of the products. The company produces good quality products and hence they are capable of competing with others. VKC FORTUNE ELASTOMERS. PVT. Ltd. Has SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 67
  68. 68. FORTUNE ELASTOMERS Pvt. Ltd . succeeded in withstanding stiff competition from the parallel manufactures because of the superior quality of their products at reasonable price. 4.4.7 ADVERTISING & MARKETING: The advertisement of VKC’s product is of news of information concerning an ideas, services or products to induce action which is suitable with the intent of the advertiser. The advertisement given is based on the new trends in the market and which are highly attractive by the customer. “Marketing is the process of providing the right product of the right quality in the right quantity in the right place at the right time”. 4.4.8 SKILLS The term “skills” includes those characteristics, which people use to describe a company. Organization have strengths in a number of area but their key strengths are dominant skills are few. These are developed over a period of time of the result of the interaction of a number of factors performing certain tasks successfully over a period of time, the kind of people in the organization, the top management style, structure, the management systems, the external environmental influence etc. Hence when organization makes a strategic shift it becomes necessary to consciously build new skills. 4.4.9 Classification of skill at VKC is as follows:1. 1.Top Management Skills: Top management includes board of directors, secretaries and unit chief. Top management skills includes balancing, integrating, setting, priorities, developing standards, conceptualizing, leading, persuasive, and planning process. 2. Supervisory Management Skills: It includes additional general manager, deputy general manager, senior manager and manager. Every superior in the unit should have sound technical knowledge of his field to proper instructions and guidance to operatives, accuracy in work, and communication skill for interaction with the higher management. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 68
  69. 69. FORTUNE ELASTOMERS Pvt. Ltd . 3. Technical and Clerical Skills: Technical skills are required from an individual as per the project requirements. For technical skills employee should be engineer/diploma holder. For clerical work candidates should B.Com/ BBM. Candidates who have passed industrial training institute are engaged scheme under trade apprentices’ for a year. Besides fulfilling the training requirements under the apprentices act. 4.4.10 STYLE The company employees share a common way of thinking and behaving. Leaders establish unity of purpose and direction of the organization. They create and maintain the internal environment in which people became fully involved in achieving the organization policy. down style In VKC management follows the top down decision making at the time of taking any decision relating to management .Board of directors and chief executive of the company give decisions about the management relating problems of the company. The decision taken is flow from top to down, (to Middle Level and Lower Level Management) in VKC they follow the participative leadership in case of recruitment. Participative leadership: The head of the department takes some decisions there may by consulting the other employees. In this type of leadership all the level of management participate in taking decisions. In case recruitment A.M personnel department consult the entire department head to take decision regarding recruitment of new employees. 4.4.11 STAFF: SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 69
  70. 70. FORTUNE ELASTOMERS Pvt. Ltd . It refers to the people working in an organization the company’s people resources and how they are developed, trained and motivated. The process of staffing includes various processes like recruitment and selection procedures, training etc. It refers to how the people are developed, trained, socialized, integrated, motivated and how the employees’ career is shaped in an organization. Technical Staff: these are the staffs they are responsible for the work related to technical aspects in this company the appointing well qualified and experienced persons as technical staff. So these staff will have good knowledge about the working environment. Supervisory Staff: These are the persons who are in charge with supervising the other employees in the organization. In this company they are employing experienced staff as supervisor. so they can observe the fellow workers and guide them as per the companies need. The experienced supervisors are one of the key assets of this company. Clerical staff: Clerical staff required for clerical work, clerical work need for all organization for clerical staff required 4.5 FINANCE DEPARTMENT SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 70
  71. 71. FORTUNE ELASTOMERS Pvt. Ltd . FUNCTIONS Finance is the life blood of business enterprises, no business can function without a proper financial management. The main functions of finance department are,  Investment decision or capital budgeting decision.  Capital structure decision.  Financial forecasting and planning  Record the day to day transactions.  Clearing the account of creditors and suppliers.  Preparation of final accounts.  Analyzing the financial position of the company.  Ensure the liquidity position of the firm to meet the current requirements. NO.OF EMPLOYEES AND SALARY In Fortune Elastomers Pvt.Ltd the accounting and finance functions are performed by the manager with the help of accountant and office staff under the guidelines of managing director. Mr.Trun Jagdish he is the financial manager of Fortune Elastomer Pvt.Ltd. Total 6 employees are working under finance department. The salary structure is 8000-15000. 4.5.1 FINANCE DEPARTMENT STRUCTURE DEPARTMENT HEAD SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 71
  72. 72. FORTUNE ELASTOMERS Pvt. Ltd . ASST MANAGER SENIOR EXECUTIVE JUNIOR EXECUTIVE CHART NO. 8 The firm follows double entry system of accounting to maintain the accounts. All the transactions are done by tally. Source of information for the accounting department includes sales invoice and purchasing invoice etc. Authorized persons from the board will verify all the records and vouchers. Compulsory audit also take place at the end of every financial year. 4.5.2 PAYMENT COLLECTION, CREDIT PERIOD GIVEN TO DEBTORS, MODE OF PAYMENT. Every finance department has following the procedures for payments and collections mechanism. Fortune Elastomers Pvt.Ltd. has get at most 14 days for payment collection period and the company was provided the payment to debtors for credit period at most 1 month. And also these all are dependent on the nature of vendors. The cash budgets are introduced in every month not in annually. Tally accounting software and excel is used for recording various transactions. Now the firm is doing the installing process for SAP in all departments 4,5,3 CAPITAL STUCTURE SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 72
  73. 73. FORTUNE ELASTOMERS Pvt. Ltd . Capital structure implies the preparation of debt and equity in the total capital of the company. The authorized share capital of the company shall consist of Rs 40, 00,000 divided into equity share of Rs 10/ share, with power to increase or divide capital in accordance with provisions of Company Act. Capital structure of Fortune Elastomers Pvt. Ltd include share capital and bank loan. 4.5.4 The main responsibilities of finance department are following. 1. Financial planning. Financial planning is the main responsibility of finance manager. It means to forecast the needs and source of finance and then to plan for them. 2. Raising necessary funds. Financial management is responsible for the supply of adequate funds for the smooth functioning of an organization. Before deciding to raises funds from a particular source a cost benefit analysis of various alternative sources must be made. 3. Controlling the use of funds The financial manager is responsible for the proper utilization of funds. Asset must use effectively so as to earn greater profit. 4. Appropriation of profit Appropriation of profit is one of the main responsibilities of the finance manager. He is to advice the top executive, how much of profit should be retained in the business as a reserve. 4.5.5 REPORTS SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 73
  74. 74. FORTUNE ELASTOMERS Pvt. Ltd . 1. DAILY REPORT  Cash book :- Records firms day-to-day cash transactions  Bank Book :- Records firms transactions with bank  Day Book: - Records firms day-to-day transactions.  Transaction Summary.  Credit note.  Debit note.  Receipt and payment voucher.  Journal Register, etc. 2. PERIODICAL REPORT  Trial Balance.  Bank reconciliation statement.  Bank interest computation. 3. ANNUAL REPORT  Trading and profit and loss account.  Balance sheet.  Cash flow statement. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 74
  75. 75. FORTUNE ELASTOMERS Pvt. Ltd . 4.6 MATERIALS DEPARTMENT Purchase involves determination of requirements, finding the sources of supply, placing the order and receiving goods. The total amount of goods produced by a business concern both for cash and credit and is meant for sale is termed as purchases. The material department employees play a very important role in the company and it has affected in every vital factor concerning the manufacturing of quality goods efficiently and prompts delivery of goods to the customers. Its function is to procure materials, supply services machines and tools at the most favorable terms consistent with maintaining the desired standard of quality. Purchasing is the most important function of material management because an order is placed for the companies finance is committed which effects the cash flow position of the company. 4.6.1 OBJECTIVES OF THE MATERIALS DEPARTMENT ♦ To make continuous availability of material so that there may be uninterrupted flow of material for production ♦ To make purchase competitive and wise at the most economical price. ♦ To make purchase in reasonable quantities to keep investments in material minimum. ♦ To purchase proper quality of material to have minimum possible wastages of material and loss in production. ♦ To develop supplier relationship this will ensue the best terms of supply of materials. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 75
  76. 76. FORTUNE ELASTOMERS Pvt. Ltd . 4.6.2 MATERIALS DEPARTMENT STRUCTURE MATERIALS DEPARTMENT HEAD EXECUTIVE JUNIOR EXECUTIVE CHART NO.8 4.6.3 MANAGER, NO.OF EMPLOYEES AND SALARY STRUCTURE Mr.sudheesh he is manager of materials department. Under this department total 10 employees are working. 5 persons are working in purchasing duties and another 5 persons are working. The salary structure of materials department is 8000-15000. 4.6.4 PROCEDURE FOLLOWED IN PURCHASES 1. Intending for material 2. Exploring of source of supply 3. Purchase order 4. Receiving of inspecting material. 5. Checking and passing bills for payment. When the company plan is like producing in new products some other procedures are in there. The process of raw materials order to finished goods it will take in 1 month. The first 15 days for transportation of raw materials from suppliers to company and the remaining 15 days will take to production process. 4.6.5 FACTORS CONSIDERED WHILE SELECTING SUPPLIERS SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 76
  77. 77. FORTUNE ELASTOMERS Pvt. Ltd . • Manufacturing capacity • Reliability of the supplier • Financial condition of the suppliers • The management of the supply firm • Price quoted and quality • Quantity for which price quoted is applicable • Terms of the payment • Terms of delivery • Specifications to which the products are manufactured 4.6.6 DOCUMENT USED IN PURCHASE The company was used in invoice, quotations for the documentation and the excel also using.The relationship of suppliers and company is the suppliers are giving the payment time to the company is 1 month. The main suppliers of the company are the following. 1. SUPPLIERS OF SYNTHETIC • Mayur • United decorate • Winner • Polynova • Jindal 2. SUPPLIERS OFBUCKLES • Unity • Metalica 3. SUPPLIERS OF TAPES • Albin • Elatto 4. SUPPLIERS OF HOOKS AND LOOPS • Sky SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 77
  78. 78. FORTUNE ELASTOMERS Pvt. Ltd . 4.6.7 MAIN DEALERS OF THE COMPANY • Saleem brothers • AKM agencies • Vicky agencies • AK agencies • Surabhi traders 4.6.8 FUNCTION Material department functions a major role in attaining quality of products. Material department has its own Godown for keeping the raw materials. Raw materials purchasing is mainly alone from permanent suppliers. The main function of purchase process is purchasing quality raw materials at the reasonable rates, at the right time and at the right quantity. 4.6.9 STOCK LEVEL MAINTENANCE The main functions of the stores department are to be maintaining the adequate level of goods for the easy flow on the basis of demand. The store keeping method is first in first out method. The stock level maintenance is depends upon the product basis. If the company was produced in new product the maximum stock level is 250 units. These ones are introduced in the market and the company was conducted in research 1 week to 10 days after that another 250 units produced and what about the result in the research report on that basis the management was decided to it will produce or not. In the case of existing products storing is depends upon the stock level or the demand. Verification of the stock is within the help of barcode system. Fifo techniques are following to the inventory system. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 78
  80. 80. FORTUNE ELASTOMERS Pvt. Ltd . SWOT ANALYSIS Strengths, Weakness, Opportunities, and Threats 1. Strengths (internal) • The company functions at its own land and building. • The company is profit making. • The employee-employer relationship good. • In Kerala company has 60% of market share. • Well advanced machines are installed in the company. • Loyal customers. • Attracts elite class with its elegant as well as classic style. • Strong brand equity. 2. Weakness (internal) • Lack of training. • There are no contract workers. • The sales process is manufacture to wholesalers only. • There is no direct marketing and e-business. 3. Opportunities (external) • Govt. policy to promote footwear industry • Expanding footwear market. • Acquiring more market share in integrating with current entities involved in footwear business. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 80
  81. 81. FORTUNE ELASTOMERS Pvt. Ltd . 4. Threats (external) • The competition is huge in this industry. • The govt. is promoting in small scale units. • The competitors are in doing the e-business. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 81
  83. 83. FORTUNE ELASTOMERS Pvt. Ltd . SUMMARY This company is led by skilled personals. The production department of the company is well functioned and updated as need of market from time to time. The company produces footwear for gents, ladies and kids. Through the efficient departments of the company it can make top most position in marketing field. The human resource department gives proper learning to workers that minimize the error of production. The materials department purchases quality raw materials for better production. The company would attract the market only by the quality and brand reputation. The fortune elastomers are the one unit of VKC group. The firm is running on successfully. The total production estimated for this year is 51.6 lacks. The authorized share capital of the company consists of rupees 4000000 divided into equity share of RS.10/share. The firm has in five departments for their business functions. Each departments is doing their jobs and duties in up-to-date and clearly. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 83
  84. 84. FORTUNE ELASTOMERS Pvt. Ltd . SUGGESTIONS  Latest technology should be introduced in the production process so as to maintain the standard quality and also to manufacture at a reduced cost.  Symbol of the VKC footwear looking like in an old model. So just modified to them in attractively.  The VKC should be adapting to direct marketing and E-business, it will be making more profit and wide market.  Today the demand of PVC footwear is almost decline, therefore to be conduct the innovation for the PVC footwear.  To be introducing franchise business ideas. It will be making more profit and Standard.  The VKC footwear advertisement is not much popular in the north India, so to be increase the media advertising.  The brand name only most popular in the Kerala and south Indian people , therefore more concentrate the marketing strategies in North India and abroad.  VKC shoes is not good market taking new marketing strategies for shoes section.  The quality of Hawaii chapels should be improved so as to enable very good sales and profit; Advertising is required to boost up sales.  Manufacture should provide gifts for the whole sales and retailers so as to achieve the desired target.  Selling price variation should be avoided by the wholesalers and retailers.  It is better to change the assembling unit near to the production unit to avoid unnecessary costs.  Try to achieve more international quality certificates. SESHADRIPURAM INSTITUTE OF MANAGEMENT STUDIES Page 84