Analysis of Financial Statements -- Al karam & Gul Ahmad
INTERNSHIP REPORT COMPLETE
1. Internship Report
(Shahkam industries (pvt) limited)
BBA Program
Summer 2016
Submitted to:
Asad Hassan Butt
Submitted by:
DANISH MUNEER L1S13BBAM0062
Contact number 0334-0008955,
Danishmuneer77@yahoo.com
2. Table of Content
EXECUTIVE SUMMARY .........................................................................................................1
HISTORY ...................................................................................................................................2
HISTORY TEXTILE INDUSTRY OF PAKISTAN................................................................3
INTRODUCTION OF SHAHKAM ........................................................................................4
INTRODUCTION5.......................................................................................................................5
OBJECTIVES ..................................................................................................................5
VISION & MISSION
………………………………………………………………………………………………………
….…………..5
CERTIFICATIONS AND
AWARDS………………………………..………………………………………………6
BUSINESS PROCESS………………………………………………………………………….7
ORGANIZATION POLICY…………………………………………………………………….…..9
STANDARDS OF
CONDUCT………………………………………………………………………………….10
WAGE AND SALARY POLICIES……….……………………………………….12-13
BENEFITS AND
SERVICES………………………………………………………………………….14-17
4. EXECUTIVE SUMMARY
This internship report is required for the completion of the BBA in finance at University of
central Punjab. I have done my internship in SHAHKAM industries. Shahkam Industries is a
knitwear manufacturing company situated in Lahore, Pakistan. In 1992 it was established and
has been exporting garments to the world’s leading brands in North America and the European
Union since then. Shahkam has not only developed its list of international buyers but also
expanded its manufacturing capabilities and capacities over a period of 20 years. In compliance
with the international laws, regulations, and standards Shahkam has achieved ISO 9001, ISO
14001, SA 8000, and WRAP Certifications. A list of other awards from buyers and institutions
are also part of its profile. Moreover, they help to develop the well-being and progress of its
employees through various employees’ welfare programs and schemes. The main products of
SHAHKAM are polo t-shirt, polo hoody, jeans etc.
This report included the intro of the industry and company, company rules and regulations,
employee benefits and facilitation that they provided, organization structure and management
hierarchy. They have a lot of big and small departments but the main departments of the
company are HR, merchandising, ppc and finance. They do not have separate marketing
department so they do not involve in any promotional activities like advertisement or exhibition.
Marketing mix also known as 4P’S which include product, price, place and promotion. These
4P’S are the parameters that the marketing manager can control; subject to internal and external
constraints of the marketing environment but there merchandisers control the 4p’s. I also discuss
this 4p’s on this report. They develop t-shirts & jeans for young people, girls and also for
children. Basically they manufacture products according to their customer order, whatever they
tell them they produced. They use cost plus pricing strategy because they are just a manufacturer
not retailers. They do not have their own brand.
According to SWOT analysis shahkam strengths are its superior quality and adequate financial
resources. Its weakness is Centralized management system and high cost because of customer
policy requirements. shahkam can avail opportunity through its potential and its international
5. standards. They can lounge their own brand. Entry of new competitors, Political instability can
be their threats.
TEXTILE INDUSTRY OF PAKISTAN
In 1947, at the time of independence Pakistan Textile Industry was like a feeble child with only
three cotton mills, a small woolen spinning, whereas weaving, hosiery and knitwear were
features of cottage industry. Now when we have entered into new millennium, Pakistan’s Textile
Industry has become a stalwart fellow, which has grown in all sections. Now we are not only
self-sufficient but are also exporting surplus products. Today we have over 8.358 million
installed spindles, 166,000 installed rotors 20,000 shuttle less looms, 200,000 power looms,
8,000 terry towel looms, 7620 canvas looms, 157,000 woolen/worsted installed spindles, 15,000
woolen looms, 12,000 knitting machines, over 600 processing units and over 2500 garments
units.
Textile industry today is the backbone of economy of Pakistan and provides the largest number
i.e. about 40% of total industrial jobs and very vast industrial service opportunities. It has always
been the pillar of Pakistan’s economy contributing substantially to Govt. revenues. It also has a
dual linkage. As a major consumer of domestic cotton.
Import and Export of Textile Industry
Pakistan Textile Industry is the largest manufacturing industry in Pakistan, contributing 8.5% to
the GDP. It is a major contributor to the national economy in terms of exports and employment.
Pakistan holds the distinction of being the 4th largest producer of cotton worldwide, with the
third largest spinning capacity in Asia.
The Textile Industry is dominated by Punjab. Punjab has a significant share in the textile and
garment sector as it is the largest cotton production region in Pakistan and its finished cotton
garments are exported globally. Cotton is one of the most important cash crops in the Punjab and
contributes substantially to the national exchequer.
6. Exports
During the first nine months of the current 2014 — July, 2013 to March 2014 — textile exports
were up at $10.38 billion which is eight per cent higher than the like period of 2013. Pakistan’s
top five textile destinations now are: United States, United Kingdom, China, Germany and
Bangladesh.
The exports of textiles, including apparel, grew by 6.5 percent year-on-year to US$ 11.437
billion in the first ten months of fiscal year 2013-14.
The textile exports from the country increased by 0.47 percent during the first eight months of
current fiscal year against the exports of same period of last year.
The overall textile exports during July-February (2014-15) were recorded at $9.179 billion
against the exports of $9.136 billion during July-February (2013-14), according to Pakistan
Bureau of Statistics (PBSS)
Imports
The value of textile machinery imports made by Pakistan during the period under review surged
up by 59.72 percent year-on-year to $489.865 million, which shows that enterprises have started
investing in new machinery, especially after the country attained European Union’s Generalized
System of Preferences Plus (GSP Plus) status. In fact, textile machinery imports in April 2014
skyrocketed by 130.07 percent to $66.374 million.
Totalno. of producers
Total number of textile firms in Pakistan are 600 plus.
MajorPlayers of the industry
• Crescent Textiles pvt.ltd
• Chenab Textiles pvt.ltd
• Sitara Textiles pvt.ltd
• Kohinoor Textiles pvt.ltd
• Masood Textiles pvt.ltd
• US Apparel pvt.ltd
7. But main competitors of Shahkam Industries are
• Kohinoor Textile Pvt Ltd
• Masood Textilt Pvt Ltd
• US Apparel pvt.ltd
The Introduction of Organization
Shahkam Industries (Pvt.) Limited was founded in 1992 as a small, family oriented knitwear
Factory with 200 employees and a production capacity of 2000 garments a day. Over the
years the owners and Management have actively participated in the day to day operations and
functioning of the Company. Heavy levels of re-investment and expansion have taken place in a
series of years. In 1996 yarn dyeing was added, in 1998 stripers were brought, in 2002 stitching
was expanded, in 2006 finishing, stitching was expanded and new stripers, solid knitting
machines and Flat knitting machines were added, in 2011 dyeing machines, LPG plant and new
2016/07/28
8. stitching lines were added and in 2012 we added a new solid fuel boiler, Printing & Embroidery
sections.
Today in 2015 Shahkam is Pakistan’s biggest composite, vertical knitwear facility. It has a
capacity for 84,000 dozens / month and all the subsidiary departments are within the four walls
of the factory. The total land mass is 11, 74,500 Square Feet and total building mass is
701,481Square Feet.
Corporate Objectives
• To increase market share
• To achieve customer satisfaction.
• Making arrangements towards achieving total quality standards.
• To get growth through professional management.
• To growth through professional up to minimum level.
• To control the atmosphere by installation of latest machinery.
• To continue to improve/ surpass past achievement.
• To lead the local manufactures.
• To attain a good word of mouth and to make company image.
• Stronger in the international market
Vision & Mission
Vision
To compete with the International Market with the Execution of Highest Standards in
• Quality (Product & Service)
• Productivity
• Cost Effectiveness and efficient
• Employees Well Being
9. • In order to achieve Customers and Stake Holders satisfaction.
MissionStatement
Our mission is to be a dynamic, profitable and growth oriented company by providing
quality products to its customers, a secured and friendly environment place of work to its
employees and to project Pakistan’s image in the international market.
Certifications and Awards
10. (TECH PACK SHEET)
BUYER
SHAHKAM
MERCHANDISING
(COMPLETE PAPER WORK)
PAP
S
T
E
P
#
1
1
SAMPLINGStep #2
STEP # 03
Samplesenttobuyer
Ste
p#6
6
STAKEHOLDERS OF MERCHANDISING &
PPC DEPPT.
(GIVES THE NAMETOW/O)
OK FROM BUYER FOR PROD
STEP # 7
PRODUCTION
DEPPT
COMPLETE QUALITY GARMENT
Yarn
purchase
CUTTING
STEP # 8
DYEING
ST
EP
#
9
KNITTING STEP#10
ROTARY
PRINTING
PRINTING
STITCHING
STEP#11
12
STEP# 12
S
T
E
P
#
1
3
STEP #
13
STEP# 14 QUALITY
PRESSING
PACKINGSHIPMENT
STEP# 15
STEP # 16
STEP# 17
STEP#3
STEP#4&5
STEP#9
11. BUSINESS PROCESS:
The whole business process of shahkam consists of 17 processes. The main process of the
shahkam is merchandizing that contacts with the customer and take order for production that is
the first step. They conduct meeting with their customers, show their sample to them or to get
tech pack sheet from customers that show the all requirements of production include item size,
color style each and every detail of product. The second step in which merchandisers send a tech
sheet for sampling. Sampling department develop a sample according to the given details.
Merchandiser makes proper check and balance in sampling (3rd step). When the sample
complete, the 4th and 5th step in which merchandiser send the sample to their customers, if any
changes require they tell them otherwise they take order how much quantity they want.
Now in 6th step ppc make plan for the production, they plan how much yarn require for this
production, in how much time the whole order will complete, what cutting plan would be
efficient etc. everything is planned by ppc. And they also give the name to work order like they
give number 20166-06. Now everyone follow this number for producing that specific order.
This plan gives to the production manager that is known to as 7th step. Now production/garment
manager are responsible for complete production. In 8th & 9th step they order for a yarn and give
it to the dyeing manager or to the kntting manager that is decided according to the plan structure.
If it first goes to the knitting then after completing knitting process the cloth send to the dyeing
area (step 10).
In step 11th the cloth give to the unit manager those cut cloth with cutter according to the plan
format and write down each bundle number in register that is known as bundling. Then they
bring that register in ERP department (where I am currently working). We entered all data in
WMS, printed barcode and give to them. This help to make payment of stitching. Now the
cutting men attach each barcode with each bundle and send it to the printing area or stitching
according to the ppc plan (step 12&13). After complete stitching of the shirts or jeans quality
supervisor and his/her worker finishing each product and send it to for pressing (step 14&15).
Then in 16th step the worker pack the pieces in boxes and send to the warehouse. Export manager
deliver the whole order to Karachi port or where the customers said.
12. Buyer of Shahkam
Customer Name affiliated with shahkam since
Old Navy 1993
Gap 2007
Sears 2007
Macy’s 2007
Kohl’s 1994
American Eagle 1998
Belk 2006
Europe/six sigma 2002
Tom tailor 2014
Only & sons 2015
Organization policy
STANDARDS OF CONDUCT
The work rules and standards of conduct for Shahkam Industries (Pvt) Ltd are important, and the
Company regards them seriously. All employees are urged to become familiar with these rules
and standards. Any employee who deviates from these rules and standards will be subject to
corrective action, up to and including termination of employment.
While not intended to list all the forms of behavior that are considered unacceptable in the
workplace, the following are examples of rule infractions or misconduct that may result in
disciplinary action, including termination of employment.
• Theft or inappropriate removal or possession of property;
• Falsification of timekeeping records;
13. • Working under the influence of alcohol or illegal drugs;
• Possession, distribution, sale, transfer, or use of alcohol or illegal drugs in the workplace;
• Fighting or threatening violence in the workplace;
• disruptive activity in the workplace;
• Negligence or improper conduct leading to damage of company-owned or customer-
owned property;
• Insubordination or other disrespectful conduct;
• Violation of safety or health rules;
• Smoking in the workplace;
• Excessive absenteeism or any absence without notice
• Unauthorized use of telephones, or other company-owned equipment;
• Using company equipment for purposes other than business (i.e. playing games on
computers or personal Internet usage);
• Unauthorized disclosure of business “secrets” or confidential information;
• Violation of personnel policies; and
• Unsatisfactory performance or conduct.
ATTENDANCE/PUNCTUALITY
The Company expects that every employee will be regular and punctual in attendance. This
means being in the office, ready to work, at their starting time each day. The timing of the
office is 8 to 5. Absenteeism and tardiness places a burden on other employees and on the
Company. If they are unable to report for work for any reason, they have to notify their
supervisor before regular starting time. They are responsible for speaking directly with their
supervisor about their absence. It is not acceptable to leave a message on a supervisor’s voice
14. mail, except in extreme emergencies. In the case of leaving a voice-mail message, a follow-
up call must be made later that day. The company phone number is 111-007-777.
ABSENCE WITHOUT NOTICE
When the employees are unable to work owing to illness or an accident then they must notify
their supervisor. This will allow the Company to arrange for temporary coverage of your duties,
and helps other employees to continue work in your absence. if the employee does not report for
work and the Company is not notified of his/her status, it will be assumed after two consecutive
days of absence that he/she has resigned, and he/she will be removed from the payroll. If the
employee become ill while at work or must leave the office for some other reason before the end
of the workday he/she can go by informing his/her supervisor.
TELEPHONE USE
Shahkam Industries (Pvt) Ltd telephones are intended for the use of serving our customers and in
conducting the Company’s business. Personal usage during business hours is discouraged except
for extreme emergencies. All personal telephone calls should be kept brief to avoid congestion
on the telephone line. To respect the rights of all employees and avoid miscommunication in the
office, employees must inform family members and friends to limit personal telephone calls
during working hours. If an employee is found to be deviating from this policy, he/she will be
subject to disciplinary action.
SMOKING POLICY
The use of tobacco products is not permitted anywhere on the Company’s premises except in
authorized and designated locations. Employees must follow all rules posted in designated
smoking areas and adhere to all policies associated with this policy
INTERNET USE
Shahkam Industries (Pvt) Ltd employees are allowed use of the Internet and e-mail when
necessary to serve our customers and conduct the Company’s business. Employees may use the
Internet when appropriate to access information needed to conduct business of the Company.
Employees may use e-mail when appropriate for Company business correspondence. Not every
employees of the company allow use/access the internet. Specifically those employees access
who have to communicate with their customers or managers. Even not supervisor's access it.
15. WAGE AND SALARY POLICIES
I. Wage or Salary Increases
II. Salary Advance
III. Loan
IV. Timekeeping
V. Overtime
VI. Paydays
Salary
• They have Competitive pay level strategy, based on the ongoing rates within the local
labor market.
• They have developed a hierarchy of Grades and have set a salary structure for each grade.
• Employee’s performance and output are considered as basic measurable units
responsible for each employee’s transfers to an upper grade.
The employees are divided into three major cadres;
i. Management
ii. Permanent Workers
iii. Contracted staff (Piece rate staff)
WAGES
Minimum Wage = 14,000 / Month (Unskilled Worker)
Minimum Wage = 16,000 / Month (Skilled Worker)
Wage day = 5th of every month
O/T Payment = Double (200%)
O/T Payment date = 10th of every month (where Applicable)
16. All employees receive Salary slip on pay day.
SALARY ADVANCE
• Advance against salary can be given to Permanent employees in order to assist them in
meeting their emergency expense.
• Employees can take the advance on or after 25th of current month against current month's
salary.
• Employee forwards the application for advance salary to HR after signature of
department head, CEO, Audit depart.
• After necessary verification the application is forward to the CFO for payment and
adjustment from current month’s salary.
WAGE OF SALARY INCREASE
Salary will be reviewed at least once each year (from the date of the previous compensation
review). Such reviews may be conducted more frequently for a newly created position. Increases
will be determined on the basis of performance, adherence to company policies and procedures,
and ability to meet or exceed duties per job description and achieve performance goals.
Performance is the key to wage increases in the Company.
OVERTIME
At Shahkam Industries (Pvt.) Ltd Over time compensation is paid to non-exempt employees in
accordance with Legal requirements. The standard timing of the employee is 48 hours per week.
Overtime is payable after completed 48 hours per week at a rate of double from the basic pay.
Employee must receive the Supervisor, Manager, officer & Chief Operating officer’s prior
authorization. Overtime worked without prior authorization from the authority as specified may
result in disciplinary action. Overtime is limited to a maximum of two hours a day, under normal
circumstances, over and above the eight hour regular duty.
PAYDAYS
All permanent employees are paid on 5th of every month. In the event that a regularly scheduled
payday falls on a weekend or holiday, employees will receive pay one day before weekend and
17. holiday. Paychecks will not, under any circumstances, be given to any person other than the
employee without written authorization. Paychecks may deposit directly into an employee's
bank account upon request.
LOAN
All permanent employees having at least two years of service can apply for loan, to maximum
amount of their Provident Fund.
Employee forwards the application for loan, on prescribed form, to finance section, duly
recommended by the head of department and CEO. Employee repays from the monthly salary.
The loan in eighteen (18) equal installment starting from the month following the month where
in the loan was granted. CEO may give special approval for 24 installments or more. Finance
department deduct the loan from the salary of employee before monthly salary disbursement.
Only one loan is allowed to an employee at a time and no further loan application is entertained.
BENEFITS AND SERVICES
• Bonus
• Group Insurance
• Health Insurance
• Social Security/EOBI
• Provident fund
• Transportation
• Hajj Policy
• Employee of the month
• Merit based reward for work above quantity, quality & compliance standards
• Holidays
• Leaves
• Training and Professional Development
18. • Eid fund (Eidi)
BONUS
Bonus is related to profit for the Particular Quarter and distributed to all Permanent workers on
Gross Salary.
Employees having completed at least three months service with the organization are eligible for
bonus.
GROUP INSURANCE
All types of employees (included permanent, temporarily and piece rate) are covered under
Group Insurance Scheme.
HEALTH INSURANCE (HOSPITAL & O.P.D)
The organization provides the free medical treatment to any employee (included wife and
children also parents but for those who have less than 20,000 rupees salaries) injured while
performing the organizational duties (within and outside the premises of the organization) or not,
till the employee fully recovers from the injury. Moreover the organization also gives fully paid
special leaves to such employee till full recovery.
EMPLOYEE SECURITY BENEFITS
Social Security: All permanent employees drawing a salary up to PRs. 8000/ month are referred
to Social Security for Medical & other facilities.
E.O.B.I: All types of employees (included permanent, temporarily and piece rate) are registered.
PROVIDENT FUND
All permanent employees after completion of probation period, becomes member of P.F. the
amount of the P.F is 16 percent of the salary and company deduct 8 percentage from employee
salary and 8 percent owner add on it each month.
For example MR KABIR accountant of the company has 30,000 salary with the experience of 4
years so (16% of the salary that are 4800 each month into 48 months)
4800 into 48 = 230,400
19. Employee can only request Loans, against his/her total P.F amount not more than it.
TRANSPORTATION
The company provides free transportation to all employees. Timings are routes of the vehicles
are set and must strictly be observed by the employee.
Chief Officers are provided with car (fuel policy is also defined).
HAJJ POLICY:
The organization sends 4 to 5 employees / year to perform Hajj. Only those medically fit
employees who have served the organization for TWO (2) years or more, and have never
performed the Hajj are eligible.
This year employees are selected through draws.
• 2 employees are selected from the labor.
• 3 employees are selected from the office staff.
EMPLOYEES OF THE MONTH / YEAR
The head of respective department selects best performing employees (workers, clerical staff,
supervisors and officers only) each month as employee of the month.
EID FUND
The company provided half of the salary in Eid-ul-azha and Eid-ul-fitar for shopping expenses to
each employee.
MERIT BASED REWARD FOR WORK
The concerned unit manager along with the signature of the Div. Manager forward the report to
HR office on monthly basis for achieving Quantity & quality targets before assigned dates and
quality standards.
HR & Compliance office verifies the achievement and also attaches a monthly compliance
evaluation report.
If the concern unit is surpassing the performance standards and monthly productivity targets a
specific amount as a reward for their exceptional performance is granted by CEO
20. LEAVES AND HOLIDAYS
Casual: 10 days per year (After completion of probation)
Sick: 8 days per year (After completion of probation)
Annual/Earned: 14 days per year (At completion of 1 year service)
Maternity: 12 weeks (6 weeks each before & after delivery)
Short Leave: In case person has to leave little early than the official timings like he/she
leave the factory in 12 o clock so it will consider half leave.
Gazette leaves: as and when announced (However Company may circulate memo for
working on gazette leave for which CPL will be granted to exempt staff and O/T to non-exempt
staff)
Weekly holidays: as per shift schedule (for General shift this is Sunday)
Organization Structure
Boardof Directors
Shahid Kamal Butt (Chief Executive Officer)
Khuram khan (HR & CSR Manager)
Khawaja Naveed (Finance Manager)
Umair Butt (Units Manager)
Shahbaz Khan (Quality Manager)
Amin Sb (Knitting Manager)
Sheikh shezad (Garment wash Manager)
Rai Shahnawaz (PPC & Merchandizing Manager)
Miss Shagufta (Training & Development Manager)
21. Management and Departmental Hierarchy in Shahkam Industries
Shahkam is consisting of the following departments
• Merchandising
• Production Planning & Control (PPC)
• Industrial engineering
• production
• Cutting
• Enterprise resource planning (ERP)
• Stitching
• Finishing
• Clipping
• Packing
• Shipment
• Quality assurance
• Quality control
• Human Resource
• Information Technology
• Procurement
• Finance
• Forwarding
• Stores
• Marketing
• Transportation
22. • Compliance
• Washing
Number of Employees
Permanent: 4,100
Daily wages: 800
Contractual: 2,350
Hierarchy of shahkam industries
ChiefMarketing
officer
Muhammadsajjad
m
ChiefPPC Officer
Rai Shahnawaz
Div. manager
store
Chiefshipping
officer
ChiefElectric
Officer
Chief
Production
Officer
Chieffinancial
officer
Khawaja Naveed
Chiefquality
officer
Div. manager
HR &
Compliance
Chiefy/Dyeing
& Proc.officer
div. manager
admin
Audit Manager
Div. manager
Dyeing
Div. manager
Garment
Div. Manager
Knitting
Commercial
Manager
Comm. &
Winding
Manager
Div Manager
y/Dyeing
Chief Executive
Shahid k.Butt
23. Departmentalization
Departmentalization is the arrangement of Individuals job activities into groups and
these groups are combined to from larger department and units to form the total organization
The Departmentalization in Shahkam is very clear. These main departments of shahkam are:
Human resources
Marketing/Merchandizing
Production, Planning and Control (PPC)
Finance
Except quality assurance all department are under the supervision.
(1) HR. Department in Shahkam
HR department in SHAHKAM is involved in different types of human resource development
and human resource development activities. Here are the activities of HR department in
SHAHKAM;
• Recruitment
• Training and Development
• Compensation
• Performance Appraisals
• Employee welfare
• Rewards and Punishments
• Retiring and Termination Benefits
1- Recruitment
HR Department in SHAHKAM regarding recruitment is almost online up to the middle
level management and has the following procedure;
24. • Approved strength in each department
• Invitation of vacant or new position applications
• Scrutinizing of applications.
• Test including intelligence and aptitude tests
• Interviews in panel form
2- Training and Development
The training and development process in SHAHKAM is very strong and has following setup
INDOOR TRAINING
• Apprentices
• Trainee supervisors
• Trainee Operators
• Trainee Engineers
• Management Trainees
• Trainee Officers
• Trainee business analysis
OUT DOOR TRAINING
• Training in institutions
• Meetings and reviews
3- Compensation
SHAHKAM has setup for workers as
• Market rate
• Overtime
• Incentives
25. • Vehicles
4- Rewards and Punishment
SHAHKAM gives in terms of rewards
• Appreciation
• Cash Prizes
• Promotions
In SHAHKAM for the control purpose there are also punishments
• Disciplinary Actions
• Show cause notices
• Suspension
• Terminations
• Charge sheets
• Fines
5- Performance Appraisals
Promotion in SHAHKAM has very fair methodology. Personality and job related traits are
evaluated at regular basis. Best performance results are good rewards in SHAHKAM like profit
sharing and promotion.
6- Employee welfare
There are many employee benefits policies being followed in SHAHKAM. Some of them are as
follows;
• Health insurance
• Social Security
• EOBI
• 15% of Profit
26. • Transportation
• Canteen and Mess
• Leave Encashment
7- Retiring and Termination
Gratuity and provident fund is being maintained for the retiring personals in SHAHKAM.
HR department in SHAHKAM is almost computerized and includes
• HRMS ( Human Resource Management System): in which they store all type of data
related to their employee included their name, address, contact number, employee code,
leaves, fine, loan or others.
• GMS (Gate Management System): in which they have a record of each employees
timing, when they enter and leave the factory on daily basis, according to that timing the
make their salaries. They employee daily scan their cards and thump impression both
when they entered and leaved the factory.
• JOB Bank (Yet to be Introduced): in which they entered the EOB data that are
approximately defined 1% of each salary but the operator tell me that he deduct 50 rupees
of EOB from the employees’ salaries who have less than 30,000 salary and 100 rupees
from those who have more than 30,000 rupees.
Objectives of HR Department in shahkam
• To help the organization to reach its goals.
• To give a right job to a right person.
• To increase employee’s job satisfaction and motivation.
• To employ the skills and abilities of the workforce efficiently.
• To develop and maintain a quality of working.
• To communicate and implement HR policies.
27. (2) Merchandising
Customer Merchandiser Factory
Merchandising performs the following functions
• Market analysis
• Data analysis
• Procurement
• Visual presentations
• Feed back
• Product planning
• Pricing
• Distribution
Market analysis includes anticipation of future trends in the market regarding economic, life
style, fashion and competitors. Currently SHAHKAM anticipates the future competitors like
China and India in result of WTO policies and now successfully competing the china in quality
and price.
Analyzing all the available data for improvement and anticipation,
Merchandisers also search about the accessories purchase and to negotiate. Where from they get
good and cheapest things regarding supported to end goods.
Product planning concern about sampling, research and development to see the market trend
they plan for the product design and colors that attract to their customers. They also follow the
customer’s requirement which type of shirts or jeans they want if any changing requires they also
suggest them.
The merchandiser starts his work with new inquires, new inquiries are the customers first knock
at SHAHKAM. The merchandisers increase the sale of products through personal selling,
seminars and physically stall presentation in worldwide cloth fairs and exhibitions. But currently
28. due to high quality of SHAHKAM and customers trust on SHAHKAM quality SHAHKAM only
relying on personal selling or old customer relations.
When new inquires comes in the merchandising department starts working on it on the bases of
customer demand required in the inquiry. Merchandising department prepare samples on their
requirements.
Confirmation of PO and follow up
After the conformation of PO the merchandiser sends it to PPC and production dept. for
performing their functions. The last function of merchandiser is follow up of the PO from sample
to shipment and communicates with the customer.
(3) Production, Planning and Control (PPC)
Merchandising Production
PPC
PPC works as a bridge between merchandising and production. It stands Production planning
and Control. In this department the works starts when new inquire converted into purchasing
order. The merchandiser sends to PPC department which starts work on it.
Functions of PPC
• Optimization of resources (man, machine, material)
• Costing research and development(R&D)
• Purchase order receiving
• Capacity
• Time line (time, action)
• Fabric accessories (stitching and packing)
29. • Fabric demand plan (lead time)
• Accessories demand plan
COSTING
This is the most important responsibilities of PPC department .It is responsible for
accurate costing of production. The price of the single accessory can’t be ignored .On the basis
of cost, given by PPC,
Merchandiser negotiates with the customer. This is crucial point in getting the purchase order
(PO) the main things that are taken into account during costing and pricing of product are as
follows.
1: Fabric Cost (Yarn Dying and Knitting)
2: Stitching Cost
3: Packing and Accessory Cost
4: Overhead Financial Charges
5: Margin and Rejection
6: Freight on Board
PPC Profile
A PPC profile is prepared which contains all the specifications that has been demanded
by customer and distributed to all the concerned departments in which whole execution
of order is done. Following points are included in this profile.
1: Purchase Order
2: Buyer Name
3: Description
4: Quality
5: Color and size Breakdown
6: Time Line
30. 7: Size Chart and cutting Design
8: Packing Program
PPC department
PPC department have two types of planning regarding production
• Martial planning
• Unit planning or time line & machine planning
Martial planning
Martial planning includes,
• Fabric planning
• Accessories planning
FABRIC PLANNING
Each purchasing order has its own demand about fabric. Each purchasing order has its own
product package. Project package means every purchasing order has a different (GSM) gram per
square meter. There is a slight margin in GSM, which is allowed by the customer due to
shrinkage effect, it is up to 5%. Fabric planning also includes that what type of cotton requires
for producing this fabric.
In fabric planning color and size brake down has another important function, when purchasing
order receives it has its own requirement of color and size. The department has check weather
this type of dying facility has available in SHAHKAM mills or it requires some out sourcing.
Then PPC department informs the mills what size sheet is more efficient for this purchasing
order. What type and gage size is required for this fabric? Weather this size of sheet length is
suitable for this order or not.
PPC also plans for marker making (most precise size for different parts cut from lay sheet).
Department plans the size of sheet which has minimum wastages during cutting
There are two types of wastages from sheet.
• Big wastage
31. • Small wastage
85% output are required from the sheet. The fashion body part has less efficiency as compare to
simple wear. PPC department also concern a different sizes of a shirt e.g. large, small, extra,
large, and medium.
How many quantities of each size required by the customer and how much sheets size is more
efficient for each size?
PPC transforms all these information to mills for fabric.
ACCESSORIES PLANNING
• Stitching
• Packaging
Stitching accessories planning includes thread, buttons, labels, or anything extra is customer’s
wants to attach with the shirt. Sometime customer’s gives some instruction cards attach with the
shirt.
In packaging accessories all the martial includes which will used in packaging e.g. Rappers,
paper packaging.
Finance Department
Finance is art of science of managing money.
Shahkam textile mills have a joint finance/ accounts department. As the complexity
and size of the organizations, the finance department of SHAHKAM totally computerized to
record the transactions, instead of recording manually. The finance department of the
SHAHKAM apparel division is connected with the LAN.
The main objective of finance department of SHAHKAM is to manage finance in such a way
that maximum output is taken by minimum input.
SHAHKAM financial administration is very strict in giving information. Company rules are very
strict for it. Following are the main functions of finance department.
32. FinancialManagement
It deals with the cash inflows and outflows major cash inflows are following.
• Sales Collection
• Interest of Deposits
• Sales of Wastes
• Capital Gains
• Sales tax refund
Major sources of cash outflow are:-
• Purchase of yarn.
• Purchase of raw materials.
• Purchase of fuels.
• Purchase of machineries.
• Wages and Salaries Payments.
• Duties and Taxes.
• Utility bills.
• Printers and its accessories.
• Stitching threads.
• And maintenance of anything that support the end goods.
Function of finance
• Preparation of financial statement
• Internal control
• Conduct of audit
• Comparison
33. • Order wise profit and loss account and their analysis
• Checking of wages and salary
• Procurement bills
• Purchase bills
• GRN
• Service purchase voucher (spv)
• Journal voucher
• Depreciation
• I.T bills
• Machine bills
• Dyeing
• Allowances
• Overtime
• EOBI
• Gratuity
• Marriage and death
• Extra payment
• Local sale
Internship program
I am working during internship in Finance departments.
Time/ Duration
Start at 19-july-2016 Ending time 30-Aug-2016
34. Training Program/ job Description
• Data entry
• File update
• Barcode generate
• Ticket scanning
Structure specializationdept. i.e. Finance, Marketing, HRM
Structure of Hr. Department
Human Resource Manager
Sr. Human Resource Officer
Human Resource Officer
Management Trainee
Structure of Merchandising Department
Merchandising Manager
Sr. Merchandiser
Merchandiser
Assistant Merchandiser
Management Trainee
35. Structure of Accounts Department
Finance Manager
Deputy Manager Accounts Deputy Manager Finance
Assistant Manager Accounts Assistant Manager Finance
Accounts Officer Sales Tax Officer
Finance Officer
Marketing Mix
1. Product
Products of Shahkam are garments and the main garments are:
I. Knitted Shirts (Henleys, Polos, Rugby's, V necks)
II. Knitted Pants (Knitted Jackets, Full Zip, Quarter zip, Hoodys)
SHAHKAM exports whole of its products to US, Germany and various other country.
Major portion of yarn are used in manufacturing process and surplus is exported.
Product Line
SHAHKAM is a leading apparel company in Pakistan having expertise &
machinery capable of transforming customer ideas into superior quality garments, which are
taken as the most famous brands in the world.
These includes
Loungewear
Sportswear
Active wear
Sleepwear
Athletic
36. Underwear
2-price:
Pricing is one of the most important elements of the marketing mix, as it is the only
element of the marketing mix, which generates a turnover for the organization. Shahka follow
cost plus strategy. The price of the product is production costs plus a set amount (mark up) based
on how much profit (return) that the company wants to make. Although this method ensures the
price covers production costs it does not take consumer demand or competitive pricing into
37. account which could place shahkam at a competitive disadvantage. Like, if the t-shirt cost is
$2.55 then they sale it on $3.
3-placement(PhysicalDistribution):
SHAHKAM exports its products through two different marketing channels.
Direct Marketing Channels:
SHAHKAM directly contact with its customers through mail,
telephone, and personal contacts and sell its products directly to the ultimately buyers.
Indirect Marketing Channels:
When it comes to indirect marketing channel, distribution is made
through intermediaries. SHAHKAM exports its products through many agents in some cases.
SHAHKAM is using different channels of transportation for the distribution of its products like,
ships, airship etc.
Countries of Export
SHAHKAM is making a good effort to increase the market share. Today
company is exporting its products to many countries like,
• USA.
• Hong Kong
• UK
• Germany
• Malaysia
• Singapore
• Korea
• Thailand
38. 4- Promotion:
Major export of SHAHKAM is made through tally-mail services. Many contracts
are settled through personal sitting. SHAHKAM do not promote its product.
Promotion is one of the four major important elements. The main promotion tools are advertising
and other country business relationship. The SHAHKAM should advertise its products not only
in the world’s trade magazine also in national industry magazine but they don’t. The company
should have to decide how to set the promotion budget and to invest on it.
SWOT ANALYSIS
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues.
Once key issues have been identified, they feed into marketing objectives.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses
are internal factors.
STRENGTHS of the shahkam:
ISO 9002 Certification.
WRAP Certified
Vertically integrated.
Equal to zero % leasing.
Ability to produce own electricity
High quality products.
Excellent market image in international market.
Adequate financial resources.
Latest and efficient machinery.
Adopting information technology.
39. Recruitment on merit.
Promotion on merit that motivate the employee.
Safe and secure environment.
Experienced able staff.
Skilled Labor
Sales tax refundable.
Broad and motivational vision.
Back Track System
WEAKNESSES of shahkam:
Centralized management system
High cost of production because to fulfill all requirements of customers.
There is no weaving units total yarn import.
Low production capacity.
De-motivated Staff.
Non-Corporative culture.
Insufficient benefits for the employees.
Communicational gap among different departments.
Not Well Educated Management.
Highly cost of transportation and fuel.
OPPORTUNITIESof shahkam:
Can expand its division such as entering in weaving sector also.
Can introduce its own label in domestic as well in international market.
Can capture new market segment.
40. Can produce yarn for production purpose as well as for export.
Can increase their production capacity.
Can open their own outlets with their own brand name and slogan within the country and as well
as foreign.
Full potential of entertaining the local market.
Can reduce the cost by proper utilization of resources.
Can hire well-educated and experienced staff.
THREATSof shahkam:
Entry of new competitors just like China & India.
Buyer need and demand changes.
Political instability.
Changing geopolitical situation.
Change of government policies.
Low price offered by competitor within same or little low quality.
Globalization.
Tariff and quotas.
Changing of exchange rate.
Terrorism.
41. Identification of plausible problem(s):
The shahkam is very organized and well-designed because they are following foreign
code of conduct. According to their customer they set their all work that is very effective
and efficient but there is always some area of improvements. There are following
problems that I find:
1) Company name:
shahkam name is look very traditional that is consisting of its owner
and his father name (shah mean shahid and kam mean kamil). It does not show any
position that what they offered. This is not good for company long term memory in
the mind of customer.
2) Marketing department:
Marketing is very important department for any organization. It
plays a biggest role to increase the sale of any company. Shahkam does not has a separate
marketing department nor they focusing in promotional activities included
i. Advertisement: Shahkam does not advertise it product because they just make
orders.
ii. Exhibition: they never organized any exhibition or fashion show to promote their
product.
3) Brand Mantra:
Shahkam does not have any slogan that tells what the objective of the
company is or which type of product they provide to their customers. This is help
customer to decide purchasing. They are working in an international market so they
should have their own slogan. Without slogan it seems that their marketing
department is really weak that do not good for company image in an international
market as well as in domestic market.
4) Own brand:
Shahkam is the biggest exporter of Pakistan but they do not have their
own brand. They just make order of their customers. They do not have any outlet within
42. the country or outside the country. They can easily increase their sale by expanding their
business because they have no issue of further investment. Banks also wishes to invest on
shahkam.
5) Slow printer and paper wastage’s:
In ERP each employee printed 2,000 prints daily
from one printer but these are really slow. One lot consists of 200 to 400 pages and
printer stuck the page after 10 to 20 pages that waste a lot of time and the other lots
remain pending. This also increases the work burden.
One of the big problem in ERP that I find are wastages of papers, sometimes printers
printed paper out of its defined boundary or lower quality of ink that remove the barcode
that force the employees to print it again so a lot of papers are wasted daily.
6) Office staff timing:
They give overtime to their all labor but do not give any extra
money to their office workers. They force their employees to work more than 8 hours in
office 2 to 3 days in week. Sometimes they continuously do work from 8 am to 10 pm in
the office that makes them irritated. This is the main reason behind it that in the next day,
they do not completely focused on their work which makes the work pending. It also
demotivates some employee. Merchandisers face this problem more.
7) High transportation cost:
Company is located in the one of the end corner of Lahore
that is far from the all employees home. So they have to provide transportation facility to
every employee. They provide ac van to every office staff and busses to every labor
worker that is really costly. Its fuel and maintenance cost is very high that they have to
bear each month. Even the single employee of the van leaves the factory late night, its
duty of driver to drop him/her at home that consume extra fuel.
43. 8) Slow software:
As I use both WMS and Acro-logix software, these both are really
slow. Sometime it stuck the system and operator force to restart the computer that waste
their time a lot. It makes the employees angry and increases their workload.
Solution
1) Company name:
I think now they cannot change their company name because it became
famous on international market. The solution of this problem is that they can lounge their
brand with a new name that show what they offered like they can lounge their new brand
with the name of Chroma that mean intensity of color. So by hear or seeing this new
brand name people can think that we can get different lovely and attractive colors of
shirts or other suits from there.
2) marketing department:
They should separate their marketing department, increase the
length of that department and hire some professional marketing managers and
subordinate.
They should invest on promotional activities.
They should advertise their products in different countries where they sale their
product what they make. They can use print media, social media like Facebook
that is very cheapest and useful resource to advertise the products. With the help
of advertise they should ensure their target customers that they offer a quality
product. They realize them that they need their product.
They should organized exhibition on expo centers of their countries. Where they
can promote their product. Present their new design with different colors.
Packing is a biggest trend to promote the brand. They can design a shopping bag
and boxes (on which they deliver their garments to wholesalers) with their
company logo. They can provide shopping bags for their consumers.
They should present their jean, shirts and hood on different fashion shows.
44. 3) Brand mantra:
Brand mantra is very crucial for big company. They should make their
own slogan that presents their uniqueness. Basically they are provided quality product to
their customer that is their uniqueness so they should make it according to their uniqueness.
Like “QUALITY IS EVERYTHING”. OR “MAKE YOUR OWN QUALITY”. Why make
your own quality because they make product on sample so what the customer said us me
make according to it. With this slogan everyone know what the company is providing.
4) Own brand:
They should introduce their own brand which can offer in domestic as well
as in international market in which every item include which they already produce. They
should make it with more high quality than now that will be the good for company long term
image. They can easily sale it to their regular customer and also can attract new customers
with the help of advertisement and different promotional activities like discount, bug 2 get 1
free etc.
5) Slow printers and paper wastages:
They should buy three big printers for ERP
department and hire a one printer operator to operate it. This is efficient for workers to
printed large number of barcode in less time. When they generate barcode in less time so
cutting persons do not have to stay long in ERP and they can go to complete their work. They
should also use high quality ink on it that do not remove barcode from the paper and operator
also check and balances on prints. If any blank paper attach with the printed papers, operator
make it separate from this. It saves the pages.
6) Office staff timing:
They should give authority to their employees to do the work with
their own style. They can give them a target weekly or monthly that will be depend upon the
employee works. They should have check and balances on it. They should motivate them and
als0 compensate them if they achieve their target in given time so they done their work in tie
45. and will not demotivate. When they know they have to do work with their own style then no
one force them to stay office after their standard timing.
7) High transportation cost:
In this time company is bearing high transportation cost
because of their location. First I thought that they should shifted their accounts & finance
department, ppc and other departments in gulberg but the employees of all department comes
from different areas not only from Lahore (rural and urban both), so they cannot shifted it. In
short company has to bear this cost.
8) Slow software:
They should update their software, make budget for it. They should hire an
I.T person who continuously checks out the software problems and update it when needed
that make it more efficient software.
OTHER SUGGESTIONS & RECOMMENDATIONS
There is no doubt SHAHKAM is very organized organization. Still there is always room
for improvements and following are some measures I suggest for improving the
performance of the company.
• Decisions making should be decentralized. Middle and lower level management should
have participation in decision making.
• Company should capture Middle East markets.
• Company should start its own “Apparel Stores Chain”.
• Company should try to reduce workload.
• Promotions, increments and other benefits should be performance based in the company.
• Company shouldn’t depend upon large customers it should also try to capture small ones.
46. • Company should try to develop over all thinking in employees, not only departmental
thinking.
• Company should try to control wastage of fabric. It reduces cost of production.
• Company should try to enhance its customer portfolio by increasing marketing efforts.
CONCLUSION
Shahkam is a big name in knitted garments. Its working environment is simply the
best in Lahore.
The company has fully equipped cutting, stitching and packing units. Its quality
assurance system is one of the best in Pakistan. The company’s infrastructure is good.
Offices are fully furnished. The company is centrally air-conditioned. The company is
working in “Papers less” environment. Computerized bar coding and back tracking
system are there.
Company has good warehousing capacity for fabrics and garments. Customer portfolio of
the company is very broad.
Company has no separate marketing department. CEO and Marketing Manager of the
company perform marketing functions individually.
Company is engaged in merchandising and its merchandising department is very efficient
for taking orders and fulfilling them accordingly. Company’s decision making is
centralized. All major decisions are made by higher management and implemented by
lower management.
Now Company is giving preference to its personals separate personnel department is
established and a ladies wing is also incorporated.
Financially the company is performing well. Its sales are increasing and its profits are
rapidly growing.
Simply I can say that Shahkam is performing well.
