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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 EXECUTIVESUMMARY .........................................................................................................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
- 3. ORGANIZATION STRUCTURE……………………….………………………………………………………17 BOARD OF DIRECTORS…….…………………………………………………………………………15 DEPARTMENTS …………………………………………………………………16 HIERARCHY………………………………………………………………………..16 DEPARTMENTALIZATION FUNCTON…………………………..…………………………………………………….20-30 Structure specialization dept …………………….……………………………….31-32 Marketing Mix…………………….…………………………………………………….32-35 PRODUCT……….………………………………………………………………………32-33 PRICE…………………………………………………………….34 PLACEMENT……………………………………………………………………………………………… ………………………………….34 PROMOTION………………………………………………………………..35 SWOT ANALYSIS………………………………….………………………………….35 STRENGTHS …………………………………………………..35 WEAKNESSES ………………………………………………………………36 OPPORTUNITIES ……………………………………………….....37 THREATS………………………………………………………………….37 IDENTIFICATION OF PLAUSIBLE PROBLEM(S)………………………………………..38-39 SOLUTION……………………………………………………………………………………..40-42 SUGGESTIONS & RECOMMENDATION…………………………………………………………………42-43 CONCLUSION……………………………………………………………………43 Bibliography………………………………………………………………………………….44
- 4. EXECUTIVE SUMMARY This internshipreport 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 canlounge 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 firstnine 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 competitorsof 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 wereadded 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 orderto 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 (COMPLETEPAPER 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 wholebusiness 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 CustomerName 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 underthe 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 inextreme 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 SALARYPOLICIES 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 receiveSalary 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 willnot, 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 onlyrequest 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 DepartmentalHierarchy 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 Numberof 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 thearrangement 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 strengthin 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- Rewardsand 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 • Canteenand 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 MerchandiserFactory 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 highquality 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 demandplan (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 Chartand 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 withthe 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 wiseprofit 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/ jobDescription • 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 AccountsDepartment 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 isone 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 couldplace 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 exportof 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 onmerit. 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 produceyarn 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 plausibleproblem(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 oroutside 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: AsI 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: Brandmantra 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 notdemotivate. 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 shouldtry 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.
- 47.