COURSE: OPERATIONS MANAGEMENT PRESENTED TO: MR.

SALMAN EHSAN

2011

MBA-II/SECTION B

Brighto Paints

Asad Ali Ahmed Jawad Hamza Basharat Khurrum Manzoor Rabiya Wahid Sidra Ali

Brighto Paints
Table of Contents
Company Profile ......................................................................................................................... 2 Organizational Structure & Design.............................................................................................. 3 Overview of Visits ...................................................................................................................... 3 Supply of Materials ................................................................................................................. 3 Production Facility .................................................................................................................. 3 Storage Facility ....................................................................................................................... 4 Delivery Process ..................................................................................................................... 4 Process Flow Design ................................................................................................................... 5 Paint Production Process in Detail........................................................................................... 5 Process Flow Chart ..................................................................................................................... 6 Oil Based Paint Process........................................................................................................... 6 Water Based Paints Process..................................................................................................... 7 Machinery & Equipment ............................................................................................................. 8 Quality Control Laboratory ......................................................................................................... 9 Research & Development Laboratory ......................................................................................... 9 Work Force Management .......................................................................................................... 10 Hiring ................................................................................................................................... 10 Training ................................................................................................................................ 10 Compensation & Performance Appraisal ............................................................................... 10 Evaluation................................................................................................................................. 11 Recommendations ..................................................................................................................... 11

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Brighto Paints

Company Profile
Brighto Paints (pvt) limited is one of the largest manufacturers of a wide variety of decorative paints in Pakistan. Founded by Mr. Riaz Ahmed Sikka, Brighto Paints has been operating since 1973. It has always been a self-financed company by its founder and his four sons, and never ventured for any loan up to this date. Originally it was just a small shop located in Shahdrah, Lahore. Mr. Riaz believed that the business must remain within the Khawaja family, therefore, when the business started to expand, one of the eldest sons, Mr. Ejaz Ahmed Sikka, succeeded his father after his retirement as chairman of the company in 1979. A humble man by nature, Mr. Ejaz bent upon the task of organizing the structure of the company and the working hierarchy by offering positions to his other younger brothers, Mr. Khurram as Director of Production Department and Mr. Atif as Director of Sales and Marketing department, who joined the company in 1975. One of the brothers Mr. Naeem-ud-din did not stay in his father's business and opened up a separate business for himself. Brighto Paints (Pvt) Ltd was registered as a private limited firm in the year of 2000. It has total number of employees of 300, of which 200 were employed in Production & Operation department. The factory is located at Raiwind road, opposite Mumtaz hospital at 8 km from Thokar Niaz Baig. Brighto paints (pvt) limited are certified by ISO 9001 which proves its quality beyond doubts. Over 35 years. Brighto paints (pvt) limited, has grown significantly in Pakistan and today its stands known as The Paint of 21st Century.

Products
y y y y y y y y y y y y y y Brighto Super Emulsion Brighto All Weather Exterior Coating (Acrylic Enriched) Brighto Red Oxide Brighto Wall Emulsion Brighto Excellent Plastic Emulsion Brighto Matt Finish Brighto Under Coat Brighto Super Sealer Brighto Super Filler Brighto All Purpose Synthetic Enamel (with Toners) Brighto Aluminium Finish Brighto Metallic Enamel Brighto Clear Varnish Brighto Grey Oil Putty

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Organizational Structure & Design

The organizational Structure of Brighto Paints

CEO

Mechanical

Production

Raw Material

Token

Operations

Finished Goods

Overview of Supply Chain

Supply of Materials
Brighto receives its raw materials for paint manufacturing from local and international suppliers. According to the management of Brighto, the ratio between the local and international suppliers is of 50:50. There is not any specific supplier which means that the company always tries to have its raw materials supplied from the best and cost effective resources. Some raw materials get delivered daily, some weekly and others monthly. There are separate storage places for raw materials coming for oil based paints and water based paints. There are separate workers for both oil based and water based paints who check the supplies, weigh them when it arrives, store them appropriately and weigh them again when the raw material need to be given to manufacturing plant for processing. There is no outsourcing done since the whole process moves in one flow and outsourcing the processing of raw materials would just result in increased costs and it is not feasible for the company.

Production Facility
At this facility, there were two plants, oil-based and water based, where huge tanks were used for mixing the ingredients of paints and automatic filling them in tins and buckets of different SKU's. They were packed with the help of lifters. The thing that differentiated these two types of Page 3

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paints was that in water based paints, it had a slightly different colour of chalky white material. Less labour was required for this process. The wasted material was also re-used.

Storage Facility
The area for this facility was 185/75 square feet. It was a huge place filled with boxes and cylinders of paints. We met Mr. Imran Illias who was the store supervisor for the noon shift. He told us that currently 19 workers were working in the store, which included the shifting of merchandise i.e. paints from the store into the trucks. Two trucks were stationed just outside the store gate, and they were loading the paints to deliver them to retailers inside Lahore. He told us that company had its own four trucks for inside Lahore movement of goods, whereas, for other cities and areas, a vendor was employed for outsourcing. We found out that the loss of paints in case of spillage was recycled and re-used. Everyday five trucks, each having a capacity of 25 tons, were loaded and sent to different retailers inside and outside Lahore, depending on the demand from retailers.

Delivery Process
Once the final product, that is paint, is ready to be shipped off from the storage, the storage supervisor first looks for an order sheet (purchase order), which is send by Territory sales manager, with the appropriate account code to identify the customer order. Based on that order sheet, a delivery challan is issued by storage supervisor. In case of small orders (within city), two or more delivery challans for two different retailers are gathered and together their merchandise is loaded onto small Mazda trucks, which reaches retailers who had requested for the merchandise. Delivery challan is cross checked with stock placed on the trucks and signed receiving is given by the retailer to the SPO, who usually accompanies trucks. In case of big orders (usually outside city), the merchandise is loaded on distributor trucks and there they take the responsibility for delivering the merchandise to retailers. In both the cases mentioned, a gate pass is issued based on delivery challan, which specifies the details of the amount of merchandise to be delivered and their respective codes. In case of damage to merchandise, if the paint leaks from its package then the company is liable for the damage and its pays accordingly, otherwise vendor trucks are responsible if no damage in packaging is detected during the unloading of merchandise. Currently, Brighto has one single vendor for vehicles because of expensive transportation costs. Their delivery is outsourced and no salesperson of the company accompanies those trucks outside the city. Brighto paints give 35% of their merchandise to distributors and 65% to retailers.

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Process Flow Design

There are several processes in the production of all forms of paints are as follows:

Storage

Grinding

Mixing

Quality Control

Filling

Packing

Finished Goods Storage

Paint Production Process in Detail

The current Process at Brighto Paints is a batch shop as there is a relatively stable line of products each of which is produced in periodic batches. Modern paint manufacturing involves a blending process to disperse pigment into a vehicle system. The vehicle system, typically a resin or a varnish type material, is rst charged into a mill with thinner and grinding aids. Pigments and extenders are added. The mill is then operated until the pigment particles are broken down and uniformly dispersed to create a grind paste. The grind paste is extended with additional resins and thinner and dropped into a thin-down tank. There, other materials are added to the tank to make the nished product. At this point, a sample of the material is brought into the quality control laboratory and a number of tests are conducted to compare the batch versus the standard parameters it is designed to meet. Trained technicians evaluate the results and then make adjustments for color matching and other characteristics such as viscosity and gloss. In

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addition to the normal adjustments made to batches, quality checks are performed throughout the manufacturing cycle. There are two basic Types of Product lines 1. Water Based Paints 2. Oil Based Paints All the processes listed above in the production of paints are both common for water based paint facility and oil based paint facility.

Process Flow Chart

Oil Based Paint Process

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Water Based Paints Process

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Machinery & Equipment

There are several machines and equipment which are used both in the oil based and water based paint facility are stated as follows.
S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Title Weighing Machine (Small + Large) Microscopes Centrifuges Dyers Viscometers Colour Matching Crypto meters PH Meters Owen Scrubs Testers Incubator Applicators Mixing Machines Grinding Machines Filling Machines Quantity 10 + 4 4 2 3 6 10 8 6 4 6 4 4 7 11 12 Capacity Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant Irrelevant 800-600 Gallons 1400-400 Gallons Various Sizes

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Quality Control Laboratory

There is a quality control laboratory in between the oil based and the water based plant which is responsible for measuring and checking the standard of paint that is being produced at the facility. There are two people working in the lab in one shift and two people in the second shift. The Lab in charge takes the sample of paint when it is ready before filling and packing. For oil based it takes around 4 hours for the colours to match and clear the product for filling while in water based it takes about 15 minutes. The standards set by the R&D department are that the RPM is set at 125 and PH values of should be in between 7-9. The further production is seized until the quality control department checks and approves the quality of paint which is taken as a sample from the total batch of paint produced.

Research & Development Laboratory

The R&D department at Brighto Paints mainly deals in four basic areas namely: 1. New Product Development 2. Setting Quality Standards 3. Competitor Quality & Product Analysis 4. Random Quality Control Checks Quality control and R&D checks at various steps of production in the plant

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The R&D takes the market analysis input from the Marketing and sales department and study the current trends and demands of the market. They use the data to make such product which are desired by the customer.

Work Force Management

Hiring
The Hiring Process is more of a conventional and traditional approach is followed to hire new staff. There are not as such formal procedures followed to hire individuals but still the manager of concerned department takes the interview and the CEO consults with the manager to make the compensation package. Most of the Labour comes from Shahdra, as it was the place where the old plant was situated and the people working in the company go as far as 3 generations and have been in the company for over 35 years. The new employee or labour force is hired usually through referrals and those who are relatives of the current working labour or employees are preferred. Brighto is not an equal opportunity employer as there is not a single woman in the company.

Training
There is a regular semi-annual training program for labour to avoid the work hazards and proper training is given concerning the fire extinguishing and avoiding fire causing events. For any new employee, he is supposed to work under the supervisor for a month and work with the staff for 2 more months before he is given the actual task or assigned an actual job. So this results in on the job training and job rotation also takes place which gives him experience in working in different departments of the company.

Compensation & Performance Appraisal

No formal performance appraisal system is followed but yet people are compensated by giving bonuses and annual raises on the discretion of the CEOs decision which is influenced by the formal meeting that takes place every 2 months. This meeting is done with the managers and supervisors at the plant to keep the operations as smooth as possible and the labour being the most important part of it are discussed and the future compensation and performance appraisal is done. The CEO is responsible to decide upon the increment in base salaries and other benefits which the company may or may not be giving to its employees and labour in the year and holds the right to change them at his will. Senior managers who mostly are the relatives of the owner or his close friends are compensated on the amount of sales made by the company plus their base salary decided in the group meeting of senior management.

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Evaluation
Production process at Brighto is a not a lengthy process yet its technical and requires expertise. Without proper training its difficult to perform any task thats why company prefers intensive on the job training. Production operation at Brighto is divided into two sub parts one is water based and second is oil based. Water based production is easy and takes less time while oil based is not that simple and takes more time than water based production. All the machinery used in production is locally made so it is easily available and cheap. This makes replacement cost very low. If we look at the overall capacity of the plant we found that grinding is the major bottle neck for oil based manufacturing. In oil based processing grinding takes 4.5 hours to grind 800 gallons of paint material while mixing this takes 1 hour. So for a continuous production---peak season--mixing has to wait for almost 3 hours for the next batch to grind. Moreover mixing has a double capacity i.e. for every one grinding machine there are two mixing machines. Quality checking lab also takes a very long time to test paint. At present no machines are used to dry pain to it takes almost 4 hrs to dry single coat of paint and quality control department has to apply 4 coats so for testing a whole day is needed. This can b reduces by using machine dryers. Staff at bright paint is not highly educated as company has seith culture so they dont prefer highly educated employees because they charge high salary. At present company has no chemical engineer. Company should add educated staff as it will increase efficiency of the system and it might increase R&D progress rate. Brighto should have at least a plant manager with management education background.

Recommendations
As the company will grow in future years, it is necessary for the company to remove its bottleneck and make it as much productive as possible. There is only one grinding machine available in oil based processing plant which takes 4.5 hrs. if company increases the capacity of grinding by installing more machines then it can meet the increasing demand of future with more efficiency and effectiveness. Quality checking laboratory is not very efficient and prompt in checking the quality of paint while its moving through the whole process especially for the oil based paint. Company should install some automated procedure of quality checking rather than manual checking which takes more than 4 hours since oil based paint doesnt dry very quickly. Even in 4 hours oil based paint would not dry completely especially in winter season so this whole process of quality check hinders the flow of manufacturing process. Working conditions and lack of appropriate staff are also one of the weaknesses in Brighto that need to be corrected. Working conditions are very inadequate for the worker. They are constantly

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exposed to harmful chemicals and there are no protective measures to ensure their health and safety. This is one of the reasons of the high turnover rate at Brighto. New employees have a hard time adjusting in such difficult working conditions. Most of the staff employed at Brighto is uneducated or below matriculation. By employing educated and trained individuals Brighto can increase its productivity further. Workers are promoted to higher managerial positions without any adequate managerial training. Because of this fact, they take an extra amount of time in learning how to manage their team and be productive in a short span of time without making massive errors in production. The strategy for coming years must be to improve operations in all spheres of activity. Brighto needs to invest heavily in staff development and infrastructure. To support its ambitious marketing and sales thrust, it needs to invest in the new state-of-the-art manufacturing facility. These improvements will provide Brighto Paints an additional edge over competition, and an enhanced ability to service its valued customers

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