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DEEPTHY Ramakrishnan Reg. No. 52553 submitted to the MAHATMA GANDHI UNIVERSITY In partial fulfillment of the requirements for the award of the degree of MASTER of BUSINESS ADMINISTRATION.
DEEPTHY Ramakrishnan Reg. No. 52553 submitted to the MAHATMA GANDHI UNIVERSITY In partial fulfillment of the requirements for the award of the degree of MASTER of BUSINESS ADMINISTRATION.
DEEPTHY Ramakrishnan Reg. No. 52553 submitted to the MAHATMA GANDHI UNIVERSITY In partial fulfillment of the requirements for the award of the degree of MASTER of BUSINESS ADMINISTRATION.
Submitted to the MAHATMA GANDHI UNIVERSITY In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION
Under the guidance of
Mr. SANTHOSH S. Associate Professor
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT ALUVA, COCHIN, KERALA 683106
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT ALUVA, COCHIN, KERALA 683106
CERTIFICATE
This is to certify that the report entitled, An Organizational study on, MK Trading CO LLC, Wadi Al Kabir, Oman is a bonafide record submitted by Ms. Deepthy Ramakrishnan, Reg. No: 52553, in partial fulfillment of the requirements for the award of the Degree of Master of Business Administration during the academic years 2013-2015.
Date: Dr. RADHA P. THEVANNOOR DIRECTOR
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT ALUVA, COCHIN, KERALA 683106
CERTIFICATE
This is to certify that the report entitled An Organizational study on, MK Trading CO LLC, Wadi Al Kabir, Oman has been successfully completed by Ms. Deepthy Ramakrishnan, Reg. No: 52553, in partial fulfillment of the requirements for the award of degree of Master of Business Administration, under my guidance during the academic years 2013-2015.
Date: Mr. SANTHOSH S ASSOCIATE PROFESSOR
Company Certificate
DECLARATION
I, Deepthy Ramakrishnan hereby declare that the report entitled, An Organizational study on MK Trading CO LLC, Wadi Al Kabir, Oman is my original work. I further declare that this report is based on the information collected by me and has not previously been submitted to any other University or Academic body.
Date: DEEPTHY RAMAKRISHNAN Reg.No:52553
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ACKNOWLEDGEMENT In preparing this Internship training report I have been fortunate enough to get support from a number of people to whom I shall remain grateful. First and foremost I thank god almighty for giving me the ability to do this study and make the venture a success I express my sincere gratitude to my college, SCMS School of Technology And Management(SSTM) for giving me such a fantastic exposure of the real corporate scenario. I place my sincere thanks to Dr. Radha P. Thevannoor, Director, SSTM, for providing me an opportunity to do an organizational study in the company, as part of the curriculum. I am deeply grateful to my faculty in charge and guide Mr. Santhosh S, who was always a source of inspiration and helped me in the fulfillment of this project. I also express my deep felt gratitude to the General Manager, Mr. Anwar Shafique, the Divisional Manager, Mr. V.S. Boban and the Project Coordinator, Mr. Solomon and all other staffs in MK Trading CO LLC, for rendering timely relevant information, valuable suggestions, assistance and encouragement which I found extremely useful for the organizational study. Without which it could have been difficult for me to complete my organizational study. I express my profound gratitude to the management for having kindly permitted me to undertake an organization study in their esteemed organization MK Trading CO LLC. Last but not least, with deep feelings of indebtedness, I express my heartfelt thanks to my parents, friends and well-wishers who have directly and indirectly contributed towards this organizational study. vii
EXECUTIVE SUMMARY The organizational study was conducted at MK Trading, Wadi Al Kabir, Oman. The reason I choose this organization is because there is a rising demand for pre engineered steel buildings in the present scenario. And MK Trading has been one of the well established companys of Oman in the pre engineered steel building sector. They design, fabricate and install steel buildings such as warehouses and multi storey buildings for Lulu, Oman Oil etc. The main strength of the company is their skilled laborers, highly qualified engineers with a good amount of technical skills, use of advanced technology and also is to design cost effective buildings in the shortest duration. All buildings are designed and manufactured to comply with American and British Design codes and latest softwares. The study was conducted from May1 st 2014 to June 1 st 2014. For the project I had the access to meet the employees of various departments for the considerable time duration which helped me to gain insight about the type of work they do and study the role and functions of each department in the organization. The report is an endeavor to cover the overall organization structure, department, procedures and functions of the organization and also cover the industry profile and company profile with their objectives that the company have. The report gives an inside managerial functions, operative functions towards the product and the employee of the organization.
TABLE OF CONTENTS Chapter No: Title Page No: Acknowledgement vi Executive Summary vii List of Figures ix One Introduction Introduction to the study 1 Scope of the study 2 Objectives of the study 2 Methodology 3 Limitations of the study 3 Two Analysis Of Business Environment Analysis of remote external environment 6 Industry Profile 10 Industry Analysis 16 Competitor Analysis 21 Three Organizational Analysis Overview of the Organization 23 Organization Structure 32 Functional Analysis 34 Organizational Analysis 72 Four Observation And Conclusion Observations and Suggestions 75 Conclusions 77 BIBLIOGRAPHY 78 ix
LIST OF TABLES AND FIGURES
Tables Page No Table 1 Competitor Analysis 21 Table 2 Business Performance for last 5 years 28 Table 3 Strength of Manpower 29 Figures Figure 1 Iron and Steel Production in 2013 12 Figure 2 Number of Registered Companies in Gulf Steel Sector 15 Figure 3 Porters Five Force Analysis 16 Figure 4 Corporate Structure 32 Figure 5 Business and Departmental Structure 33 Figure 6 Marketing Department Structure 34 Figure 7 Marketing Design Data Sheet 36 Figure 8 Estimation Department Structure 39 Figure 9 Estimation Quotations 41 Figure 10 Design Department Structure 42 Figure 11 Design and Detailing Drawings 46 Figure 12 Production Department Structure 47 x
Figure 13
Pre Engineered Building Structure
48 Figure 14 Main Frames 49 Figure 15 Steel Sheet Fabrication 52 Figure 16 Sandwich Panel 53 Figure 17 Finance Department Structure 54 Figure 18 Purchase and Store Department Structure 57 Figure 19 Purchase, Receipt and Order Notes 60 Figure 20 Human Resource Department Structure 61 Figure 21 Quality Department Structure 66 Figure 22 Safety Department Structure 70
CHAPTER- 1 INTRODUCTION
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Introduction Introduction to the Study An organization is a social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating from its environment. Organization is the association formed by a group of people who see that there are benefits available from working towards achieving a common goal. Organizational study is the examination of how individuals construct organizational structures, processes, and practices and how these, in turn, shape social relations and create institutions that ultimately influences people. Organizational studies comprise different areas that deal with the different aspects of the organizations, many of the approaches are functionalist but critical research also provide alternative frame for understanding in the field. It is the study of individual as well as group dynamics within an organization. Whenever people interact in the organization many factors come into play. Organizational study attempts to understand and model these factors. It is very essential to an MBA graduate as it helps to associate theory with practice. In an organization study each and every departments in an organization is being observed and analyzed in detail. The study gives important to every departments of an organization and projects their need towards the organization in achieving its objectives. The study also gives the management trainees an opportunity for interacting with the people working in the organization and to internalize their good qualities. Organizational structure means the systematic and orderly arrangement of personnel in an organization and delegation of authority in order to avoid raw conflict So after an organization study the trainee will have a very clear picture of the functioning and the method adopted in the organization and will help the trainee in knowing a lot about the basic functioning of the organization.
Scope of Study The organizational study was carried out to know the functioning of the various departments as knowing it on a practical basis will have different perspective from the 3
theoretical view. Also to know what all steps could be taken by the management for future development. The study also gave me the opportunity to study the efficiency of each employee in completing the tasks assigned in the time allotted which ultimately affects effective functioning of each department.
Objective of Study To get an organizational exposure. To study about the way in which the design, fabrication and erection of the steel structures is performed. The study is helpful in understanding the various problems faced by the organization and what necessary actions could be taken by the management to overcome these issues. It helps in understanding the functioning of each department and the interdependence among each department. It also helps in analyzing what factors are responsible for attaining job satisfaction of the employees. The study also helps in analyzing the superior- subordinate relationship which is very essential in attaining the goals of the organization. An overall analysis of the performance can be done by using the SWOT analysis
Methodology of Study The study was carried out for a period of 4 weeks and in the meantime, required information was gathered from the following sources. 1. Primary Data Sources 2. Secondary Data Source Primary data sources. Primary data are the data that is collected for the first time. Information was collected by conducting personnel interviews and discussions with Managers and other officials, employees of the company and also by direct observation. 4
Secondary data sources. Secondary data was collected from books, periodicals, literature published, Internet and from other various documents. Secondary data like information regarding the company, its history and profile are collected from company manuals, journals, brochures, website, and from other company records.
Limitations of the Study Difficulty in meeting with all the Top level Officials. Time allotted for the study is insufficient. Busy schedule of the officers and employees prevented lengthy discussions. Most of the data is collected by personnel interview and hence the information may be wrong or incomplete. Some company documents are confidential so it was not possible to include them. Some personal interviews were affected by some personal bias.
CHAPTER-2 BUSINESS ENVIRONMENT ANALYSIS
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Analysis of the Business Environment Analysis Of The Remote External Environment The external environmental factors that affect the companys business could be analyzed using PEST analysis. Political Factors : Omans political system has remained comparatively stable under the rule of His Majesty Sultan Qaboos bin Said al-Said, thus providing a supportive environment for local and foreign businesses for over 30 years. The Sultan has guided the country along a sound economic path with a focus on building good infrastructure and the provision of decent public services a path, which has proved popular in spite of the lack of a democratic government, thus keeping the risk of political instability low. In early 2011 there was a surge in frustration among certain parts of the population centered on the current employment situation, low wages, alleged corruption in parts of government and rising food prices. To respond to these demands, the Sultan reshuffled his ministerial team. Limited Government : Oman has no income tax, and the corporate tax rate is 12 percent. There is also no consumption tax or value-added tax (VAT). The overall tax burden is 2.2 percent of gross domestic income. Government expenditures equal about 38 percent of GDP. Oil and gas revenues, which constitute 84 percent of total revenue, have helped to keep public debt low at less than 10 percent of GDP. Regulatory efficiency: Discouraging more dynamic job growth, labor laws enforce the Omanization policy that requires private-sector firms to meet quotas for hiring native Omani workers. ,the number of Omanis employed in the private sector is rising as result of the Omanization process (since 1988), aimed at replacing existing expatriate workers with local labour. In this context, the Government has introduced quotas, penalizing companies that do not hire Omanis. Obtaining necessary permits for starting a business takes more than 150 days. Open Markets: 7
Omans average tariff rate is 3.2 percent. Licensing procedures for several products deter imports. Foreign investors may not own land. The financial sector continues to evolve, and commercial banks perform well. Most credit is offered at market rates, but the government uses subsidized loans to promote investment. The Muscat Securities Market is active and open to foreign investors. Economic Factors : The Omani Government promotes and supports foreign direct investment (FDI) as part of its efforts to expand the private sectors role in the economy. FDIs are allowed in most sectors of the economy, however, the level of foreign ownership is often limited and foreign investors are required to employ Omani labour. FDI flows grew 41% in 2013 to OMR570 million ($1.48 billion), up from OMR404 million ($1.05 billion) in the previous year. The World Bank recently projected Oman's real GDP growth at 4.9 per cent in 2014 and five per cent in 2015. Oman's gross domestic product (GDP), calculated at market prices, grew by 2.8 per cent to OMR 30,627.7 million in 2013, up from OMR29,797.7 million posted the previous year. Oman is an important exporter of oil. The contribution from non-petroleum activities is expected to go up this year at a faster pace than petroleum sector. The growth in manufacturing and tourism sectors will be the key drivers for the increased contribution. Significant imports include transport equipment, electrical machinery, mechanical appliances, and mineral products. One of the countrys largest trade partners is the neighboring UAE, accounting for 11% of exports and 27% of imports. The steel imports has thus increased from Al Jazeera Steel and JFE Steel, UAE and hence beneficial to the industry for steel fabrication and erection. The NCSI (National Centre for Statistics and Information) data also showed that total non-petroleum activities grew by 7.6 per cent in 2013, reaching OMR17, 229.6 million, from OMR16, 008.1 million the previous year.
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Social Factors : Omans health care system, which is largely based on public sector providers, performs well providing almost universal access to services for Omanis. There have been heavy investments in medical facilities and human resources since 1970 and the Government spending on healthcare has averaged more than 5 per cent of total public expenditure over the past five years. The Omani social insurance system was established by Royal Decree No. 72/1991 and has been in place since 1992, providing old age, death and disability pensions to public and privatesector employees. The female population is also given equal importance and hence no gender bias. The number of Omanis employed in the private sector is rising as a result of the Omanization process, aimed at replacing existing expatriate workers with local labour but creating jobs for young Omanis will remain a big challenge in the coming years. Technological Factors : The Oman steel industry has reduced its CO 2 emissions per ton of steel shipped by 30 percent since 1990. Because of the industrys voluntary investments in R&D and resulting new technologies, Oman steelmaking processes are highly optimized. New processes are developed which will revolutionize steelmaking and take advantage of alternative energy sources. Most modern large-capacity blast furnaces represent extremely efficient chemical reactors, capable of stable operation with an impressive range of reactant feed materials. The injection of pulverized coal, natural gas, oil, and, in some cases, recycled plastics to replace a portion of the metallurgical coke used as the primary reluctant and source of chemical energy represents an important development in the process. The current expected lifetime of newly rebuilt furnaces is 20 years or greater. Automatic welding machines have also replaced the manual welding with more accuracy.
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Environmental Factors : The Omani Government is committed to environmental protection and has introduced a set of environmental laws and regulations, such as the law on the Conservation of the Environment and Prevention of Pollution, regulations for water, waste, chemicals, radioactivity, environment permits and others. Oman is also committed to a wide range of international environmental treaties and accords including the Basel Convention on the Control of Trans boundary Movements of Hazardous Wastes.
Legal Factors: Collective bargaining is a relatively new concept in Oman, with the royal decree making it possible to use collective bargaining to set wages and working conditions. In cases when there is no trade union, collective bargaining can take place between the employer and five representatives selected by the workers of the enterprise. Only one trade union federation is allowed: the General Federation of Oman Trade Unions (GFOTU). There must be at least 25 employees for a union to be formed, regardless of the size of the company and the Ministry of Employment may refuse to register a trade union.
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Industry Profile About Steel Industry. The industry directly employs more than two million people worldwide, with a further two million contractors and four million people in supporting industries. Considering steels position as the key product supplier to industries such as automotive, construction, transport, power and machine goods, and using a multiplier of 25:1, the steel industry is at the source of employment for more than 50 million people. World crude steel production has increased from 851 megatonnes (Mt) in 2001 to 1,607 Mt for the year 2013. (It was 28.3 Mt in 1900).World average steel use per capita has steadily increased from 150kg in 2001 to 217kg in 2012. India, Brazil, South Korea and Turkey have all entered the top ten steel producers list in the past 40 years.
Global Scenario. Economic scenario around the world continues to be challenging but hopefully seems to be bottoming out. Euro Zone, the single biggest source of concern is struggling to stabilize with active support and leadership from Germany and France. The US economy staging a slow & steady recovery faces tough scal deadlines. The world has apparently come to terms with slower growth in China. Stakeholders are in fact optimistic even with this growth as it is over a large base. Demand is driven largely by the needs of other industrial companies and is therefore linked to economic growth. The profitability of individual companies depends on technical expertise and efficient manufacturing. Large companies have economies of scale in purchasing raw materials. The specialized nature and use of many products allows smaller companies to compete effectively. In the global steel industry, there is growing cause for optimism, as we continue to edge away from the recession. There are a number of factors that are leading to improved conditions for steel companies, but there are also several lingering, fundamental issues that the industry will need to address if it is to see sustained, long-term growth. In the coming year, the World Steel Associations forecast sees global steel production increasing by about 3.3 to 3.4 percent. This would be in line with the 3.5% growth, seen in 2013. 11
The year 2014 will be an important transition year for the global steel industry, because it will mark the first time since 2011 that all major steel-consuming countries show positive growth. The year will also mark the first time since 2006 that the growth rate in China (about 3 percent) will be exceeded by the rate for the rest of the world (about 3.5 percent). This pattern is likely to persist for the indefinite future as China shifts to a services and consumer-driven economic growth model, and growth in the other emerging economies takes stronger hold. These developments suggest that the industry has turned the corner and is headed into recovery, and several current trends point to continued improvements in 2014. These include: Gradually improving capacity utilization, (78.1% in 2013 vs 76.2% in 2012), as excess capacity is slowly absorbed or closed. Here, there is potential for dramatic improvement if China decides to accelerate the closing of aging plants and facilities with especially pollution-intensive operations. Less disruption in steel trade as Chinese exports slow, in response to the anti-dumping rulings that have come down in many countries throughout the world. Indeed, the OECD report 2013 saw a record number of anti- dumping and countervailing trade cases filed since 1999. Expected further softening of raw material pricesespecially iron oreas new supply enters the market. This should provide some relief from the squeeze created by higher material costs and the inability to pass those costs on to customers. In short, the industry is getting healthier, but its condition is still somewhat tenuousand it will be important to keep a cautious eye on events as they unfold in the coming year. The industry will need to maintain the discipline to keep eliminating excess capacity, even as demand creeps up. And as always, companies will need to focus on operational excellence and efficiency. Efforts in those areas will be valuable regardless of whether the industrys growth stalls in the near term or continues for the long termand they will be key to taking advantage of todays opportunities while preparing for an uncertain future. 12
Figure 1 Iron and Steel production in 2013 Source: Adapted from World Steel Association, www.worldsteel.org/statistics- archive 2013
Oman and Middle East Scenario. While some projects to increase steelmaking capacity in the Middle East and North Africa have proceeded more slowly than originally envisaged large and temporarily immobile inventories of billet and rebar plunging in value in the wake of the financial crisis several years ago forced reconsideration of their pace of progress significant advances have been made. Projects at Emirates Steel in UAE, Sulb in Bahrain and Jindal Shadeed in Oman are examples of regional expansion. The fundamental advantages of producing steel in the region are unchanged. An abundance of reasonably priced power for such an energy-intensive industry is one of them. A plentiful supply of natural gas as a reducing agent for making direct reduced iron (DRI) is another. In the Middle East, the most stunning progress will be made in steelmaking itself. It expects crude steel output to double in the Middle East to 50 million tonnes by 2018 and to almost 18 million tonnes in North Africa. 13
Jindal is building a 2 million tpy EAF for completion in 2013 that will be fed from its existing DRI plant in Oman. It then has plans to move further downstream with an initial investment in a medium section mill, although this has yet to be confirmed.
One of the strongest regions for growth has been in the Gulf Co-operation Council (GCC) market. High oil and gas prices have provided a budgetary boost to governments. In turn, they appear to have undertaken a political commitment to invest in infrastructure and to diversify into manufacturing in what remain quite centrally-driven economies. This is hugely steel-intensive and will underpin medium-term steel demand growth for at least the next 2-3 years, with Saudi Arabia the key example. This is not only important for rebar and structural sections, but also for products such as wire rod. As an example, the Omani governments private investment group Takamul is building a 60,000 tpy galvanized wire plant in 2013 in conjunction with Singapores Global Steel Industries.
One of the biggest planned investments in the region is the Jindal Shadeed integrated steel mill in Oman, which will eventually comprise a 7 million tpy iron ore pelletizing plant, a Midrex DRI/HBI plant, a 2 million tpy melt shop and a long products rolling mill. Indias Jindal Steel & Power (JSPL) acquired the Shadeed DRI project for $464 million in 2010, and the 1.5 million tpy Midrex DRI/HBI module started up at the end of that year. Prior to the melt shop commissioning next year, Shadeed has been exporting the HBI produced just over 1 million tonnes were sold last year. JSPL is now engaged in expanding the project at Sohar Industrial Port into a complete steelmaking complex, and a 2.0 million tpy melt shop is scheduled to commission in the final quarter of 2013. The Danieli-built melt shop will be fed directly by hot DRI, and comprise a 150-tonne EAF, a 150-tonne ladle furnace, a 200-tonne twin-tank vacuum degasser, and a 2 million tpy 6-strand billet/bloom caster. The associated infrastructure also includes an air separation plant, a 4,800 cu metre/day desalination plant and extensive port facilities. The semis produced will be initially targeted mainly at the Saudi market, as well as domestic re-rollers supplying Omans infrastructure projects. In time, however, it is planned that much of the billet produced will be taken up by a 1 million tpy rolling mill for rebar and 14
merchant bar, plus a seamless pipe mill, which are expected to start around 2015. These represent a $400 million investment, while the melt shop is put at $475 million.
Jindal foresees the DRI plant expanding from 1.5 million to 5 million tpy over the next five years, which will be fed by a 7 million tpy iron ore pelletizing plant now in the planning stage. Like several steel mills in the region, Omans Sohar Steel started out as a pure rolling mill for rebar, and has since integrated back into steelmaking. The rolling company, Sharq Sohar Steel Rolling Mills (SSSRM), has a capacity for 300,000 tpy of 8- 32 mm diameter rebar, which can be epoxy coated. Sister company Sohar Steel was built with a 36-tonne EAF and ladle furnace feeding a 3-strand caster for 100, 120 and 130 mm sq billet. It can produce 250,000 tpy of billet. The port of Sohar is developing into a focus for steel products in the Gulf, with Al Jazeera Steel Products also being established there. This company buys billet and has four ERW tubes making lines with a total capacity of 300,000 tpy of international- standard tube products with plain, threaded and coupled ends. It also has three galvanizing lines for corrosion-protected tube up to 219 mm diameter. Al Jazeera Steel has subsequently commissioned a 300,000 tpy merchant bar mill for producing angles, channels, squares, flats and rounds. The company says it is exporting products to 25 countries, including North America, Europe and Australia.
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Figure 2 The number of registered companies in Gulf steel sector Source: Adapted from World Steel Association, www.worldsteel.org/statistics/gulf sector
Steel consumption across the GCC region has increased underpinned by significant investment in the construction sector. Saudi Arabia is the largest market in not only GCC but the MENA region. Saudi Arabia's Hadeed is the world's 40th largest producer of steel with a production of around five million tons. The GCC countries will continue to remain a major consumer of steel products, which constitute 60 % of the estimated demand as these countries continue to invest in infrastructure and the petrochemicals sector to sustain economic growth. Saudi and Qatar have regulatory mechanisms in place and hence the steel prices are controlled in these two markets. Though there are firms that import at cheaper prices and sell below the administered prices, these two markets have guidelines and are not subject to wild price fluctuations. Oman uses UAE steel as the benchmark and moves in tandem with the pricing from Emirates Steel. The Bahrain steel prices are administered by Qatar Steel and Emirates Steel and it is not a very capricious market. There have been swings in the UAE market but with Emirates Steel playing an active role, the major swings have been dampened a bit. 16
Industry Analysis Porters Five Force Analysis
Figure 3 Porters Five Force analysis Source: Michael Porter, Competitive Strategy, 1980, Adapted from www.notesdesk.org/encyclopedia Threat of New Entrants The threat of new entrants is high, providing you have the engineering expertise, sufficient startup capital and necessary tooling, anyone can start an engineering workshop specialising in steel fabrication. Through repetition, economies of scale can be gained. Fabricating steel beams for a high rise building is an example of this. There is not strong brand identity for steel fabricators. They rely on reputation with the prime contractors and previous experience. Any new entrant would be assumed to have the level of expertise necessary to provide steel fabrication for these large projects. There are no switching costs for the prime contractors, as each new project is put out to tender. 17
Steel fabrication companies focus on producing for the local market. MK Trading do not tender for overseas jobs due to shipping costs. They concentrate on areas in Oman itself like Sohar, Ghala, and Rusayl etc. Contracts are obtained through tender and are most likely to be won if tendered at the lowest price. Barriers to entry are therefore low in the steel fabrication business.
Threat Of Substitute Products The substitutes at this level of the industry are concrete, composite steel concretes and fibre composite. Composite "I" beams could replace the steel "I" beams in building structures in high earthquake risk areas as a substitute because it is tough and flexible Bonding methods used to fabricate composites are as good as welding with current technology. Bargaining Power Of Suppliers The determinants of Supplier Power are quality, reliability, price and delivery. Suppliers have little power as the steel fabricator can switch from one to another depending on who is offering the best price and can meet logistical requirements. Supplier concentration tends to be in the main centres where the construction is taking place. MK Trading have relationships with all the steel merchants in the industry. There are a number of steel merchants in the Rusayl area. Each individual merchant possesses little supplier power. A steel fabricator could purchase a steel merchant business and therefore maximise its buyer power. This would result in a decrease of existing supplier power. MK Trading cannot purchase directly from steel manufacturers like Al Jazeera. Steel manufacturers will only supply to steel merchants who on sell 18
to steel fabricators. Al Jazeera has purchasing criteria that must be met; for example a minimum purchase quantity of 200 tonnes. The highest cost component of the job is the purchase of the raw material, steel. If the purchase price of steel is dropping then it decreases as a percentage of the total cost of the job. As a consequence of this the steel supplier power will weaken. From above arguments our conclusion is that the suppliers power is weak in this industry. Bargaining Power of Buyers The buyers in this industry are the Prime Contractors, large construction companies that have won tenders to construct the high rises. They respond to invitations to tender and are selected by price. The Prime Contractors have the balance of power in this process of tendering and making the decision on which steel fabricator is selected. This industry is price sensitive, usually the lowest price wins the tendering process. There is again no real brand identity in the steel fabrication business. The Prime contractor will take into account the companys reputation and quality of work in the past. The quality and performance of the material the steel fabricators use is important as all construction in Muscat is subject to quality control, this includes materials used. The Prime Contractor wants the best quality, the best performance at the lowest price. All sub contractors delivering their part of the project on time and at the quality level required provides an increase in margin for the Prime Contractor. The more effectively the co-ordination of project changes are dealt will also have a positive or negative effect. The bargaining power of the buyer is the greatest among the 5 forces. All tenders come from the Prime Contractors without them there would be no work for construction steel fabricators. 19
Competition/ Rivalry The building differences at this level of the industry tend to be driven by the design of the building. The architects and engineers have a major input into the design and therefore the product required from the steel fabricator. They determine the quality, the sections and the overall shape and profile of the building. Brand identity is not important or relevant at the steel fabrication level but is very relevant for architects. There are no switching costs in the industry at this level of construction. Sub contractors for building high rise constructions are obtained through a tendering process; therefore switching costs are not really relevant. The diversity of competitors in the industry ranges from small locally owned companies to large multinationals. Some companies are only steel fabricators; others offer a range of engineering services. MK Trading has a great competitive advantage over its competitors as it has other engineering as well as fabrication services. A lot of the time they dont know what price their competitors are quoting. Therefore they need to maintain their solid reputation for quality and reliability. Industry Key Players. The following firms are some of the key players in the industry Kirby Steel Builders : Kirby Building Systems is one of the largest pre-engineered steel building (PEB) companies in the world and is a 100% subsidiary of Kuwait- based multinational and multi-billion dollar business conglomerate - Alghanim Industries, one of the largest privately-owned companies in the Middle East. Kirby pioneered the PEB technology first in Middle East in 1976 and later in India in 1999. Its product list consists of pre-engineered steel buildings (PEB) applicable for factories, warehouses, metro rails, supermarkets, aircraft hangars, sports stadiums, auditoriums, etc. Other products include structural steel, sandwich panels, storage solutions, Kirby Roof (KR), Kirby Wall (KW), Kirby Deep Decking Panel and Kirby Standing Seam Panel (KSS-600).
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Mammut Steel Builders: Founded in 1997 in Jebel Ali, Dubai and has grown to its present position as a leading manufacturer of Pre-engineered Building in the Middle East. Mammut has been on upward growth fuelled by investment in people and technology which resulted in the construction of its factory in Hamriya Free Zone, Sharjah, and UAE. Since 2001 Mammut has occupied a total covered area of 25000 square meter factory in Hamriya which has the capacity to deliver a total of 7000 tons per month of steel buildings and over 180000 square meters of polyurethane injected sandwich panels. In April 2007 Emaar Industries and investments (EII) acquired a majority stake in Mammut Building Systems FZC and has since been involved in assisting the company in its expansion and growth plans. Emaar Industries and investments (EII) is focused on maximizing its subsidiaries long term value, exposing them to industrial best practices, providing a solid and flexible capital base.
Zamil Steel Builders : Zamil Steel was founded in 1997 to design, manufacture and supply top quality pre-engineered steel buildings for use as factory buildings, warehouses, workshops, distribution centers, showrooms, aircraft hangars, schools, sports halls, supermarkets, office buildings, car parking sheds, and virtually any one, two or three storey building.
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Competitor Analysis
Table 1 Competitor Analysis
Company MK Trading North West GSS Years OF Experience Established in 1983 and hence over 30 years experience with a better brand value. Established in 1995 and has nearly 20 years experience. Established in 2004 and hence only 10 years experience. Certification 1SO 9001-2008 certified ISO 9001-2000 certified No such certification Area of the Manufacturing plant The area is upto 12000 sq m The area is upto 8000 sq m. The area is upto 5000 sq m. Market Share 30% of the total market share 22% of the total market share 13% of the total market share Tons produced per month Nearly 600 tons are produced monthly Nearly 500 tons are produced monthly Nearly 400 tons are produced monthly Products manufactured Steel frames, fascias, crane and eave gutters, rafters, sandwich panels, purlins, bracings, roof and cladding, profile sheets and steel shuttering. Steel frames, purlins, fascias, rafters, roof and cladding, profile sheets, crane structure frame. Steel frames, purlins, fascias, rafters, crane and eave gutters, profile sheets.
CHAPTER 3 ORGANIZATIONAL ANALYSIS
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Organizational Analysis Overview Of The Organization
Background And History. Mustafa And Kamal Ashraf Trading Co Llc was established in the year 1983 to facilitate its growth in Steel fabrication and Pre-Engineered industry in Oman and GCC. MK Trading further expanded its services into civil contracting, MEP contracting, sandwich panel manufacturing & switchgear manufacturing. They design, fabricate and install steel buildings such as warehouses, multi-storeyed buildings and filling stations for Shell Oman, Oman Oil & Al Maha and also have in depth experience in fabrication of special products such as core-Loc shuttering and various steel shuttering works. They are ISO 9001-2008 certified to ensure quality in various fields of operations. The projects undertaken are on turnkey basis and provide complete end-to-end solution of our clients requirements. These include Factory building, Extension of existing facility, Logistic warehouses, Commercial complex, Food processing industry and Poultry Houses. The address and the contact details of the organization is as given below MUSTAFA AND KAMAL ASHRAF TRADING Co LLC PO Box 2756 Ruwi, Postal Code 112, Sultanate of Oman Telephone: 24812067, 24810725 & 24810471 Fax: 24811427 & 24810581 Email: mktho@omantel.net.om Website: www.mktrad.com
The Vision And The Mission Vision: MK Tradings vision is to become the trusted partner in the steel industry renowned for excellence, leadership and greater values. To set benchmark for value creation and excellence, building stronger relationship with clients based on tolerance understanding and mutual cooperation. Providing equal opportunities for employees to grow within the organization. Mission: To exceed customer expectation by professional practice in engineering, manufacturing, delivering high quality products and service. They concentrate in achieving 24
growth through diversification, acquisition and expansion and maintain a superior level of integrity in interaction with business partners and associates. The employees serve the customer with highest level of technical knowledge.
Values They Promote I ntegrity: In MK the quality of having strong moral principles are integrated by the core purpose of the company. Commitment: They are dedicated to a policy and committed to achieve superior quality and service in all our activities. Teamwork: We strongly believe in combined effective action of a group in pursuing common goal. Perform: We constantly strive to achieve the highest possible standards in our day to day work and in the quality of products and services we provide.
Products Pre Engineered Steel Building :The PEB conceptor the Metal Building System was first originated in the United States Of America after the World War II, as one of the solutions to the demand of fast economic growth, and then transferred the concept to other industrialised countries. It consists of a complete steel framed building system, with pre- designed componenets to best suit the unique customer requirements. The final product is a complete building shell with sub structural systems including mezzanine floors, crane sysytems, canopies, fascias and interior partitions. The Peb system offers multiple advantages to the end-user; the most notable are low initial investment, fast construction time, low maintenance cost, large clear spans, infinite choice of layouts, inherent resistance to earthquakes,ease of expansion and unique attractive appearance. PEB System is since long a standard in commercial and industrial market segments such as wearhouses, distribution centres and industrial facilities, are continuing to make greater inroads into the low-rise sophisticated building market. Commercial office buildings are mixed use facilities. Instituitional and governmental constructions are some of the areas where PEB building systems are being used more and more. These buildings are increasingly recognized as reliable, aesthetically pleasing, energy efficient and cost-effective building alternatives. The 25
sustainable green attributes of metal building systems with their recycled content and recycle- ability makes them a natural choice for todays building owners and specifiers. Purlins: In architecture, structural engineering or building, a purlin (or historically purline, purloyne, purling, perling) is any longitudinal, horizontal, structural member in a roof except a type of framing with what is called a crown plate. In steel building construction, secondary members such as purlins (roof) and girts (wall) are frequently cold-formed steel C, Z or U sections, (or mill rolled) C sections. Cold formed members can be efficient on a weight basis relative to mill rolled sections for secondary member applications. Additionally, Z sections can be nested for transportation bundling and, on the building, lapped at the supports to develop a structurally efficient continuous beam across multiple supports. Rafters: A rafter is one of a series of sloped structural members (beams) that extend from the ridge or hip to the wall plate, down slope perimeter or eave, and that are designed to support the roof deck and its associated loads. A pair of rafters is a couple. Fascias: Fascia is an architectural term for a band running horizontally and situated vertically under a roof edge, or which forms the outer surface of a cornice, visible to an observer. Typically consisting of a sheet metal. The horizontal "fascia board" which caps the end of rafters outside a building may be used to hold the rain gutter. The finished surface below the fascia and rafters is called the soffit or eave. A rain gutter is a narrow channel, or trough, forming the component of a roof system which collects and diverts rainwater shed by the roof. It is also known as an eaves trough, eaves channel guttering or simply as a gutter. The eave is the bottom edge of a roof. The eaves normally project beyond the side of the building forming an overhang to throw water clear of the walls and may be highly decorated as part of an architectural style. Columns: Column or pillar in architecture and structural engineering is a structural element that transmits, through compression, the weight of the structure above to other structural elements below. In other words, a column is a compression member. The term column applies especially to a large round support with a capital and base. 26
Beams: A beam is a structural element that is capable of withstanding load primarily by resisting bending. The bending force induced into the material of the beam as a result of the external loads, own weight, span and external reactions to these loads is called a bending moment. Braced Frames: A Braced Frame is a structural system which is designed primarily to resist wind and earthquake forces. Members in a braced frame are designed to working tension and compression, similar to a truss. Braced frames are almost always composed of steel members.
Accessories Roller shutters: A roller shutter, roller door or sectional overhead door is a type of door or window shutter consisting of many horizontal slats (or sometimes bars or web systems) hinged together. The door is raised to open it and lowered to close it. On large doors, the action may be motorized. It provides protection against wind and rain. Ridge Ventilators: A ridge vent is a type of vent installed at the peak of a sloped roof which allows warm, humid air to escape a building's attic. Louvers: A louver or Louvre is a window blind or shutter with horizontal slats that are angled to admit light and air, but to keep out rain, direct sunshine, and noise. The angle of the slats may be adjustable, usually in blinds and windows, or fixed.
Sandwich panels: Aluminium composite panel (ACP) also aluminium composite material, (ACM) is a type of flat panel that consists of two thin aluminium sheets bonded to a non-aluminium core.The core is commonly low density polyethylene, or a mix of low density polyethylene and mineral material to exhibit fire retardant properties. Aluminium can be painted in any kind of colour, and ACPs are produced in a wide range of metallic and non-metallic colours as well as patterns that imitate other materials, such as wood or marble.
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Services Design Services: They have a strong engineering strength to design cost effective buildings in the shortest duration. All buildings are designed and manufactured to comply with American and British Design codes and latest softwares. These include: Staad pro - 3D Structural Analysis and Design Engineering Software Metal building system (MBS) -Complete package from design, detailing, bill of materials, shop drawings and erection drawings. Tekla structures -Detailing Software Autocad -Drafting software Codes followed are : Load on all buildings are applied in accordance with: IBC, MBMA & BS 5950. Manufacturing & erection tolerance applied as per: METAL BUILDING SYSTEM (MBS) Hot rolled & Built-up designed as per: AISC, BS 5950. Cold Formed member design as per: AISI. Welding done in accordance with: AWS D.1.06.2006.
Manufacturing services : Once the shop drawing released to factory, required materials identified from the stock and allotted for each jobs as per the bill of quantity. Once the material is ready then it will be fed to the CNC machines which are programmed with the appropriate values to achieve the different parameters as per the requirement of each job. The cut plates are then assembled and welded into place to form the final structure before being checked for accuracy. After fabrication proper surface preparation is carried out and painted based on the required specifications. The skilled and experienced team of operations, fabricators and welders are equipped with all the advanced machineries needed to carry out accurate and timely manufacturing.
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Erection and I nstallation: They have fully dedicated erection team with all required tools and tackles for PEB & other structural steel erections and follow proper safety at site. Our erection methodology and practices are well appreciated by the clients. Once the anchor bolt cast in place and cured, the major components of PEB are erected as primary and secondary structural systems. After this the roof and wall sheeting will be installed along with the appropriate accessories. They monitor and supervise the entire project until completion ensuring timely delivery and excellent product quality.
Business Performance The financial performance of the company for the last 5 years is given in the table below.
Table 2 Performance Business
YEAR APPROX TURNOVER(OMANI RIAL IN MILLION) APPROX PROFIT(% VALUE OF TURNOVER)( IN MILION) 2008-2009 15 10% of 15= 1.5 2009-2010 12 7.5% of 12= 0.9 2010-2011 10.5 6.25% of 10.5= 0.66 2011-2012 11.25 7% of 11.25=0.78 29
2012-2013 12 7% of 12= 0.84 Strength Of Manpower Table 3 Strength Of Manpower
CATEGORY NUMBER OF EMPLOYEES Managers 9 Engineers 22 General Support Staff 14 Supervisory Workforce 11 General Workforce 88 MALE EMPLOYEE FEMALE EMPLOYEES TOTAL MANPOWER: 138 6 144
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Client And Consultant List
Client List : Petroleum Development Oman Saud Bahwan Group Ministry of Defense Oman Oil Dhofar Municipality LULU Hypermarket Khimji Ramdas Al Shadeed Steel Shell Oman Diwan of Royal Court Oman Dental College Modern Poultry Farm
Consultant List: Al Hatmy Engineering Consultancy LLC Jurong Engineering Simon Engineering Gulf Engineering Consultancy Dawood Consultancy Triad Oman Consultants International Emaar Engineering Consultancy Muscat Municipality Scott Wilson Ltd
List Of Projects 31
Some of the projects completed : Sheraton Extension Toyota warehouse at Amrat Oman Dental College Omani Marble- Rusayl Oman cable industry Galfar headquarters at Ghala Hydrauchloric Acid Plant at Sohar Chips factory at Rusayl Poultry farm at Barka Production unit for Switz Group
Some of the ongoing projects : Lulu Bowsher Asain paints at Sohar Lulu at Barka and Ibra Youth complex at Salalah Khimji extension
Recognition And Certification : MK Trading is one of the first companies in Oman to receive ISO 9001 2008 quality certificate for our management system from TUV Nord Cert GMBH.
GENERAL MANAGER DIVISIONAL MANAGER ADMIN AND FINANCE MANAGER ESTIMATION MANAGER MARKETING MANAGER MANAGER PROJECT AND PLANNING FINANCE DEPARTMENT HR DEPARTMENT PURCHASE DEPARTMENT DETAILING MANAGER DIRECTORS 33
Figure 4 Corporate Structure
Business And Departmental Structure DIRECTORS
QUALITY CONTROL DEPARTMENT DIVISIONAL MANAGER MARKETING MANAGER ESTIMATION ENGINEER MANAGER PROJECTS PLANNING ENGINEER PROJECTS ENGINEER PRODUCTION ENGINEER DETAILING ENGINEER DESIGN DEPT DRAUGHTSMAN HR DEPT ACCOUNTS HEAD ACCOUNTS DEPT QUALITY CONTROL PURCHASE DEPT STORES GENERAL MANAGER ADMIN AND FINANCE MANAGER DIRECTOR PROJECT COORDINATOR 34
Marketing is considered to be the head of an organization. It is the most important department in an organization. One of the important reasons behind the success of the company is its marketing strategy compared to their rivals. The system followed by MK Trading is very unique and it has been very effective. They deal with the clients either directly or indirectly. The indirect dealings are maintained through consultants. Marketing Department of MK Trading consists of senior marketing manager and two sales officers working under him. Functions of Marketing Department: To maintain well established contacts and relationships with the clients, contractors and consultants. They should mainly focus on Business Development Should adopt good marketing strategies in order to acquire the quotation from the client. The quotation will be given to few sub contractors at the same time for the same job so its in the hands of the marketing and sales person to convince the client that the job could be completed in the most optimized way at the least cost and thus acquire that particular quotation. He should help the client in making the proposal based on his technical knowledge. Maintain trust, clarity and transparency with the clients, contractors and consultants so that more jobs will be awarded in the future. Keeps informed on competitors' selling policies, tactics, services, and prices offered. Maintain a good accordance with the estimation and design department as a number of meetings have to be attended for acquiring the quotation as a number of negotiations have to be carried out. 36
Value engineering is to done to get better offers. Under value engineering, then after submitting the offer, the job might have to be re- submitted according to the planned changes made and in order to get the job. Make sure that the payment terms are acceptable to the company as in if there is enough cash flow and that there is good financial strength.
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Figure 7 Marketing design data sheet Source: Copy of the sample design sheet obtained from the Marketing Department
Data sheet details: In order to acquire the quotation, the client will have given a particular design to the 38
consultant who then will give it to many sub contractors and will select the optimized one. Based on the design, a data sheet that is to be submitted by the Marketing and Sales department to the estimation department. All the details mentioned in the data sheet should be accurate. Procedure: The estimation and the design team will work on it and then submit the design for acquiring the quotation. The sales, estimation and design officers will then go for meetings, negotiations are done with client and consultant The sales person has to be well informed about the project and he should be in such a position to convince the client to quote the job. Main competitors: These are some of the main competitors in Oman. North-West steel company Bilad Oman group GSS Steel Some of the other main competitors are from Dubai : Zamil Steel Kirby Steel Mamut Steel Mabani Steel
Pricing: MK Trading offers quotations at low price compared to others. Its usually accepted because of the good reputation and goodwill. Technology: The technology used is Computer Numerical Control. And automatic welding machines are mostly used. With advancement in technology they are planning to generate 1000 tonnes per month from 600 tonnes. 39
Marketing Strategies: Respond immediately to the enquiries and take in more critical jobs. The market share at present is 30% and they are planning to extend it to 50% by the end of this financial year by starting to take international projects from Dubai and African countries. Weekly meetings are held along with weekly visit plans. The jobs are awarded at a faster rate with a good economical design.
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Estimation Department
GENERAL MANAGER 40
Figure 8 Estimation department
Estimating the cost of the project is the basic step in ensuring the successful implementation of the proposed plans of action for any project. Estimating engineer helps in estimating the cost of the project after studying and gathering all the relevant details about the project. The estimation department of MK Trading consists of a senior estimation manager and two JUNIOR ESTIMATION ENGINEER JUNIOR ESTIMATION ENGINEER 41
junior engineers working under him.
Functions of Estimation Department:
Their main task is to acquire the enquiries from the sales engineers and to quote for the same. They identify all the requirements and make sure that all the elements are considered and verified. He confers with the engineers, contractors, clients, etc., on the adjustments or changes that need to be made in the cost estimates and helps in determining the feasibility of the project. He determines the scope of work and contents of the project estimate by preparing a list of bid quantities and items. He is responsible for calculating the statistical data, prices of various materials, labor cost, equipment, etc before submitting it to the contractor and client by discussing with the design department. Identify and correctly enter item numbers into the Quoting System, to include all supporting documents. Confer with Purchasing and Inventory to ensure needed materials are in stock or available for purchase. He should have direct contact with the client and consultant and should also be well prepared for negotiations in order to acquire the quote for job. The estimated cost and calculations will be carried out only in the estimated team and wont be shared with any other department. Any mistake in the estimation can lead to loss to the company.
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Figure 9 Estimation Quotations Source: the Copy of the Quotations send to the Main Contractor, Al Jood Trading.
Design department is split into three divisions starting with design then onto the draughtsman and then where the final shop drawings are made which is the detailing team. 1. Design team: Once after getting the enquiries then the design team will make the design according to the specifications given. If the contract is obtained then the design has to be again modified with any respective changes to be made and much more accurate and precise details are given. There are certain set of standards used based on the code of practice : American British The client will give concept drawings with different views & elevations giving a overall view of his requirement. The details of the column length, the rafter length, the wind pressure, and many such items are given in detail. The design if done manually will take a long time and hence are done using softwares. The 2 softwares used here are: MBS (Metal Building Software) STAAD Pro ( Structural Analysis & Design) MBS Software: It is custom made software for PEBs like warehouses and Industry buildings. It is time saving software as it does the design, drawings and details in one go. With this, the designer along with the design can generate the drawings without the help of the draftsman. STAAD Pro Software: It can be designed for buildings of any complexity, not necessarily PEBs. The only limitation here is that the drawings have to be made for 45
each component separately whereas in MBS, everything could be done together.
2. Draughtsman They take inputs from the design team and then will prepare the drawings using the drawing software - AUTOCAD, They prepare line diagrams from the drawings given by the designers and specifying each part like columns, rafters etc. with their actual dimensions, quantity etc. These are the drawings that are sent for approval to the consultant. The consultant will review and will put stamp on it if its approved. In some cases some comments are written which are to be modified and re-submitted, Once these approved drawings are received then its sent to the detailing team.
3. Detailers: He prepares two types of drawings by using TEKLA software. Shop Drawings: Shop drawings, also called detail drawings, are used to specify the exact detailing requirements for fabricating each individual member (or "piece") of a structure, and are used by the steel fabricator to fabricate these members. Complete shop drawings show material specifications, member sizes, all required dimensions, welding, bolting, surface preparation and painting requirements, and any other information required to describe each completed member. The shop drawings are intended for use by the fabrication shop, and thus contain little or no information about the erection and installation of the steel members they depict; this information belongs in the erection drawings.
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Erection Drawings: Erection drawings are used to guide the steel erector on the construction site ("in the field") as to where and how to erect the fabricated steel members. These drawings usually show dimensioned plans to locate the steel members, and they often also show details with specific information and requirements, including all work that must be done in the field (such as bolting, welding or installing Anchor Bolts) Since the erection drawings are intended for use in the field, they contain very little specific information about the fabrication of any individual steel member;
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Figure 11 Design and Detailing drawing Source : The copy of the drawings, provided to the client: Asian Paints Middle East, the consultant: Semac & Partners and main contractor: Al Rawahi obtained from Design Department
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Production Department
Figure 12 Production Department Source: Primary Data
GENERAL MANAGER DIVISIONAL MANAGER MANAGER PROJECTS PROJECT COORDINATOR PROJECT ENGINEER PLANNING ENGINEER PRODUCTION ENGINEER FABRICATION SUPERVISOR ERECTION SUPERVISOR 49
Manufacturing
Figure 13 Pre Engineered Building Structure Source: Bansal Metallics, Adapted from www.machineryforbuildings.com/preengineered buildings
Primary members consist of columns, rafters, beams etc. These are fabricated from high. Strength Grade 50 or Grade 43 GI Plates. Plates are cut to size and shape. Built up sections are made from these plates in Automatic Beam welding Line by submerged Arc Welding. The most common primary framing systems are shown below. All are shown symmetrical about the ridge line. Framing systems unsymmetrical about the ridge line and Multispan Framing Systems with unequal width modules are possible but may require more engineering time and possibly longer deliveries. Practically any frame geometry is possible.
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Figure 14 Main Frames Source: Bansal Metallics, Adapted from www.machineryforbuildings.com/preengineered buildings
Steel Sheet fabrication: Sheet metal is metal formed into thin and flat pieces. It is one of the fundamental forms used in metalworking, and can be cut and bent into a variety of different shapes. Sheet metal is available in a variety of thickness and its thickness is called its gauge. The gauge of sheet metal ranges from 30 gauge to about 8 gauge. The higher the gauge, the thinner the sheet metal. The Steel material is available in the form of cold rolled steel. Sheet metal can be cut, punched, bent, welded and rolled to form all different structures. They can be made into sheet metal enclosures, card cages, housings, front panels, chassis, 51
cabinets, parts and more. Manufacturing Technology: The technologies involved are CNC punching, shearing, plasma cutting, welding and sandblasting. Production capacity: About 600 tonnes are produced in one month. In some cases the work shift will be increased to two shifts per day hence doubling the production. Sheet Metal Fabrication: 1. Shearing Shear is a piece of sheet metal separated by applying a force to cause the material to separate. When a great enough shearing force is applied, the shear stress in the material will exceed the ultimate shear strength and the material will separate at the cut location. A punch (or moving blade) is used to push the work piece against the die (or fixed blade), which is fixed. In cases of separating high thickness sheets then CNC plasma cutting machine is used. Plasma cutting is a process that is used to cut steel and other metals of different thicknesses (or sometimes other materials) using a plasma torch. In this process, an inert gas (in some units, compressed air) is blown at high speed out of a nozzle; at the same time an electrical arc is formed through that gas from the nozzle to the surface being cut, turning some of that gas to plasma. The plasma is sufficiently hot to melt the metal being cut and moves sufficiently fast to blow molten metal away from the cut. 2. Drilling Drilling is a cutting process that uses a drill bit to cut or enlarge a hole of circular cross- section in solid materials. The drill bit is a rotary cutting tool, often multipoint. The bit is pressed against the work piece and rotated at rates from hundreds to thousands of revolutions per minute. This forces the cutting edge against the work piece, cutting off chips from the hole as it is drilled. 3. Built up section The different materials like purlins, columns, rafters to be made into I beams. A Kentex built up machine is used where the thickness of each plate is given and then they are 52
produced accordingly. 4. Assembling The different units or plates generated will have to be joined according to the requirement.
5. Welding : This is often done by melting the work pieces and adding a filler material to form a pool of molten material (the weld pool) that cools to become a strong joint, with pressure sometimes used in conjunction with heat, or by itself, to produce the weld. It is done here mostly manually and in some cases using shielded arc welding.
6. Sand blasting Sandblasting is a general term used to describe the act of propelling very fine bits of material at high-velocity to clean or etch a surface. Sand used to be the most commonly used material, but since the lung disease silicosis is caused by extended inhalation of the dust created by sand, other materials are now used in its place. Here steel is been used to spray.
7. Painting The final step is painting where according to the details of the drawings it is painted.
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Figure 15 Steel Sheet Fabrication Source: The pictures collected during the study at Rusayl Workshop.
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Sandwich Panel: A sandwich-structured composite is a special class of composite materials that is fabricated by attaching two thin but stiff skins to a lightweight but thick core. The core material is normally low strength material, but its higher thickness provides the sandwich composite with high bending stiffness with overall low density. The chemical used for the thick core is Polyurethane with a density of 35-38 kg/m 3 . The sandwich panels here can be of 4 types: Galvanized iron (GI) on both top and bottom Aluminum sheet on the top and bottom. Top with profile and bottom with plane sheet Flat panel on both top and bottom The thickness of the sandwich panel can be 50mm or 100mm.
Figure 16 Sandwich Panel Production Pictures Source: The pictures collected during the study at Mabellla Workshop
The activities expected from a finance department cover a wide range from basic bookkeeping to providing information to assisting managers in making strategic decisions. What to expect from the finance department will depend largely on factors such as how much involvement the owner/manager has in the organization. The major function of the finance department is to have an overall control of both inflow and outflow of the financial resources. Sources of funds: The main sources of funds are: I nternal sources of funds : The main sources of internal funds are the money generated from the sales. Reserves are the sources of funds other than the income from sales. Current losses are adjusted from these reserves. External sources of funds: The sources of external funds are banks like Bank Muscat, National Bank of Oman.
Functions of Finance Department Prepare and present final accounts: The Finance team are responsible at the end of each financial year, to record how well the organisation has performed financially. In order to show how well the organisation has performed the Trading, Profit and Loss Account and the Balance Sheet are prepared. The above documents will then be presented to Senior Management who will be informed of how much money the organisation has made or lost over the year. This helps management in making decisions for the future. For example, if they need to cut costs they may decide to make some staff redundant. Or, alternatively, if they have made large profits, they may decide to open up a new store so that they can grow. Paying Bills on behalf of the Organisation/Departments: The Finance team are responsible for paying for all purchases made within the organisation. The design department will submit a requisition form to the 57
Purchases department for new resources. This information is then passed on to the Finance team who actually pay for the goods ordered. When the supplier sends an invoice, the Finance team will check that it is correct. For example, check the quantity ordered; the price of each item etc. It is essential that all invoices received are paid promptly to the supplier. This will help establish the supplier relationship which could lead to discounts and trade credit being offered in the future. The most common method of payment the Finance team use is a cheque. The Finance team will ensure that an accurate record of all cheques paid is kept to make sure that cash is being transferred appropriately. The person who signs the cheque will be an authorised employee of the Finance team. There will be a limited amount of employees who are allowed to sign cheques to make sure that nobody is misusing the organisations cash. Paying Employees Wages: It is very important that the Finance Department works closely with the Human Resources Department in ensuring that all employees are paid the correct amount and on time. The Human Resources Department informs the Finance Department exactly how much each individual employee should receive at the end of each month/week. Once the Finance team have processed this information in their records, the wages are automatically paid into each individuals bank account.
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Purchase And Stores Department
Figure 18 Purchase and Stores Department Source: Primary Data
PURCHASE HEAD SENIOR ASSISTANT OFFICE ASSISTANT OFFICE ASSISTANT 59
Purchase Procedures:
Purchase Requisition: It is a document through which the user department requests the purchase manager to arrange for purchasing the material required. Each department head prepares the purchase requisition and send it to the purchase manger on receipt of purchase requisition report. The purchase manager will make necessary steps for purchasing material that has been mentioned in the purchase requisition. Plans are made by the purchase department by discussing with the procurement team about what to purchase, how to purchase, when to purchase and so on. Purchase manager invite quotations for the supply of materials from different suppliers. Usually minimum 3 supplier enquiries are taken and the best from them is chosen. Normally the orders are made in bulk quantity. The approval is obtained from the Financial Manager The purchase manager then discuss with the supplier about rate, quality, requirements, quantity, delivery time and packaging. Then both parties agree that they will enter in to purchase contract according to supply and payment. Making of purchasing order: Six copies of the purchase order will be prepared and it is signed by the Finance Manager. The company will send two copies of local purchase order to the supplier, one copy to the purchase department, one copy to the finance department, one copy to the stores department and the last one will keep it in their running file. The supplier will send back one copy, an invoice as a token of confirmation. A purchase order will contain the details such as, the name of the material, quantity to be supplied, agreed rate, quality specification, time in which it is to be supplied (delivery date), place of delivery, rate whether inclusive of tax, packing of material, mode of transportation, option if the material is not supplied on due date and mode of payment. Generally, 90 per cent of the payment will be made in the next day. In case the delivery is not made on due date, this 10 per cent will be adjusted. Receiving and inspection of material: When the material arrives, the drivers have to report at the gate. The guards will inform it to the purchase department who will 60
give permission to enter into the company. It is mostly taken directly to the sites where the construction takes place. The Goods Received Note (GRN) will be prepared and send it to the purchase department. All the goods are checked and in case of any damage then the purchase department will inform the supplier after getting the approval from the Financial Manager.
Materials used for the manufacture of main frames and sandwich panels: The most important material used is galvanized steel and mild steel which is mostly imported from Dubai and in some cases from India, Korea etc.
Maintenance of stock: Specifications of the materials required are communicated to the supplier who supplies the materials as per specifications. The load of materials entering the factory will be registered at the factory gate. The load is then sending to the store where the store officials check the materials for visual defects. Maximum storage capacity of the store is 2000 tons. The company maintains a minimum stock level of 15 days a minimum of one and a half months.
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Figure 19 Purchase Request, Receipt Note and Order Source: The copy of the Purchase Request, Order and Goods Receipt provided to Khimji Permoglaze (Oman) obtained from Purchase Department
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Human Resource Department
Figure 20 Human Resource Department Source: Primary Data
Human resource is of paramount importance for the success of any organization. It is a source of strength, aid and, it is the most important asset of an organization. Human resources are the wealth of an organization which can help it in achieving its goals. Human resource management is the planning, organizing, directing and controlling of procurement ,development, compensation, integration, maintenance and reproduction of human resources to the end of the individual, organizational and societal objectives are accomplished. They spend about 10000 Oman Rial approx. per year for the welfare activities.Human resource management is the qualitative improvement of human beings who are considered the most valuable assets of an organization. It is the strategic approach to the acquisition, motivation, development and management of the organizations human resources. The primary objective of HRM is to ensure the satisfactory accomplishment of the objectives of an organization and of its employees and management. It helps workers in accomplishing individual and organizational goals. The HR manager organizes the HR department to carry out the functions entrusted to him. In MK Trading personnel department functions are controlled by Personnel Manager. J ob Environment: Reporting to factory executive/head of personnel functions; however keep rapport and liaison with section in chargers in all functional areas. Current informal ways of working; practice of working on oral instructions and getting such actions ratified in due course. Want of documentation by way of proper system and procedures. Habitual cases of absenteeism and in discipline. The slow pace of work among the staff, as a part of past work practice . HR Policy: The basic principles of MK Trading human resource policies include:
Recruitment based solely on merit by following well-defined and systematic selection procedures without discrimination. Sustain motivated and quality work force through appropriate and fair performance evaluation, reward and recognition systems. 64
Identify training needs within the organization and design and implement those need based training programmes resulting in continuous up gradation of knowledge, skill and attitudes of the employees. Maintain a quality human resource management system plan, design, and train, equip and motivate the department staff to meet this standard of expectation. Recruitment: MK Tradings greatest asset is its employees. It is committed to attracting, retaining, and developing the highest quality and most dedicated work force possible in today's market. While recruiting new employees MK Trading takes adequate care to identify the right candidates guard focus on recruiting candidates who display a high degree of learn ability, i.e. candidates who are open to learn new things and supply the same in new situations we also place significant importance on professional competence, academic excellence, analytical ability, term work, leadership potential, communication and innovative skills, along with a practical and structured to problem solving. MK Trading follows Internal Recruitment technique as well as External Recruitment system. External Recruitment is done by giving advertisement in newspapers, thorough recruitment agencies. Executives- Assistant Managers and above: Recruitment is usually done through reference or consultants. CV is collected from the candidates. It is then scrutinized and the list of the candidates is prepared based on the CV. Interview is conducted under the observation of the HR and the respective departmental HOD. Staff supervisors, line employees: Recruitment is done through reference or consultants. Machine operators: They are usually recruited from India and Bangladesh. In need of any workers like welders etc. then the information seeking them would be sent to the authorized agents in these places. They would then advertise in local newspapers and would conduct interview. Based on the experience and skill level the process of recruitment takes place. In case of any training required then the company has a tie-up with some of the training institutes like National Training Institute LLC where 3 months training is given in fabrication, welding etc. 65
Training: MK Trading human resource department believes that quality is the hallmark of any successful venture. Quality training and development of human resource is realized through Identifying training needs within the organization and designing and implementing those need based training programs to bring about continuous up gradation of knowledge, skill and employee attitudes. A week long induction program for freshers. It is conducted by the HODs and the HR. Development of top performer through leadership development programs aimed at bringing up future leaders. During the induction program the company policies, programs, procedures, rules and regulations, plant overview, job overview are explained to the employees. This kind of induction program helps the employees gain knowledge about the operations and the works carried out. Performance appraisal The first step towards carrying out performance appraisal at MK Trading is the evaluation of personal skills for the tasks assigned to an employee during the period of appraisal . To evaluate the performance ,different criteria like timeliness ,quality of work carried out by the employee, customer satisfaction .peer satisfaction and business potential is considered. The personal skill of the employees are also evaluated based on their learning and analytical ability ,communication skills, decision making, planning and organizing skills. Each of these criteria is measured on a scale and then evaluated. A performance appraisal system is a strong tool in the development of human resources in the organization. It is considered as a mutual feedback to the management and thereby help to decide the carrier growth, training needs and other human resources development, interventions required for each of them thereby aiding their self- development. It is vitally important that every individual has a clear understanding of his or her work, objectives, and responsibilities, because performance will measure against these. 66
Wages and salary administration: In MK Trading, the managers analyze and interpret the needs of the employees so that reward can be individually designed to satisfy their needs. Here the workers are paid wages and the staff officers managers etc are paid salary. The wage/ salary system which is followed is the time rate system. Under this system workers are paid according to the work done during a certain period of time. He is paid at the settled rate as soon as the time contracted for is spent. The basic purpose of salary administration is to establish and maintain an equitable wage and salary structure. As benefits to the workers, the company provides co- operative stores with credit facilities, canteen with subscribed food ,staff mess, staff recreation club, ambulance, festival advance etc. Attendance: Every employee shall be given a ticket or attendance card free of cost, showing his number or name or classification etc. They shall punch their attendance card at the punching machine and deliver up their card or ticket at the place provided in the time office before the commencement of each session of the shift in a day. In case of workmen exempted from availing rest interval, shall punch his card before the commencement of the shift and soon after his shift work is over. Provided with the purpose of if a workman fails to punch his attendance card, he shall lose his attendance for the period unless he makes the report to the manager of his failure within two hours. Grievance handling: The company has a Grievance Handling Committee. On receiving a complaint Committee will sent a memo to the concerned parties. Parties should give reply within 24 hours. If the Committee is not satisfied with the reply, they can make enquiry about the complaint. If anyone found guilty, in the enquiry, they may be punished with four days suspension, increment cutting, dismissal, court action etc. If the employee is not satisfied with the redressal then he can file case in the labor court. 67
Quality Control Department
Figure 21 Quality Control Department Source: Primary Data
GENERAL MANAGER DIVISIONAL MANAGER QUALITY CONTROL ENGINEER QUALITY CONTROL ENGINEER 68
MK Trading Company LLC provides engineering services including design, fabrication, supply and erection of steel structure. The aim is to provide service to the customer comparable with the highest quality in their field confirming to specified requirements and cost effective product in the shortest time by the adoption of the Right First Time principle. Functions of this department is to ensure that the quality objectives of the firm are relevant to meet the requirements of the product quality and are periodically measured and compared against product quality requirement. A major purpose of this department is to ensure that the quality policy of the firm is conformity with the objectives of this department. Key Elements of the Quality policy are: To exceed the customer expectations by ensuring appropriate two-way communication to enable them to fully understand and fulfill their requirements. Setting measurable targets to monitor the achievement towards pre-determined objectives. To identify the performance against these targets to identify progress. To provide appropriate resources and a suitable working environment To monitor, audit and review the systems to identify areas to continually performance. The company recognizes that their staff is the single most important resource in the achievement of this policy and so encourage a positive and open culture by providing development and training. The quality policy will ensure that the customer requirements are recognized and that consistent control of requirements is established and maintained. Objectives of the Quality Department: To establish and maintain a Quality Management System which gives a control in the organization. To reduce the delay in the submission of tenders and quotations. To reduce the delay in getting the approval drawings from the client by 10% To reduce the delay in preparing fabrication drawings by 10% 69
To reduce the time taken in issuing LPO (Local Purchase Order) from 10 days to 7 days. To reduce the error in manufacturing by 5% To reduce the error at site by 10% To reduce the delay in the delivery of material as well as reduce multi delivery by 10% To reduce the losing jobs on tender by 20% To increase turn over by 10% To increase the quality assurance of the products and reduce the consumption of electricity by 3% To reduce the wastage in workshop by 10% Procedures for Quality Assurance: Control of Documents: This procedure outlines the system of preparation, authorization, storage, issue, review and modification of documents or data relating to the Quality Management System developed by the company. Control of Records: To ensure that all required valid records are maintained with proper identification in the right location for an easy access. It applies to all the records and incoming/ outgoing correspondence of the company. Procedure for Corrective and Preventive Action: The purpose is to control corrective and preventive action activities required as a result of actual or potential non- conformances. The non- fulfillment of requirement is called non-conformance. The action taken to eliminate the cause of an existing non-conformance, defect or other undesirable situation in order to avoid recurrence is the corrective action. The action taken to eliminate the cause of potential non-conformance, defect or other undesirable situation in order to avoid occurrence. Emergency Response Procedure: Emergency is the abnormal occurrence which cannot be handled or controlled by the equipment or personnel available in the immediate area. Fire at office Fall from a height Electric shock
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Procedure for Internal Audit: Prior to the audit an opening meeting may be held with the relevant Department Head during which the auditor/ team will explain the scope of the audit, the method of reporting and confirm the closing meeting. During the audit the auditor may observe areas within the system where there may be potential for non- conformance or improvement. Any such information shall be recorded. All actual non- conformance detected during the audit shall be recorded using a non-conformance report form. Upon the completion of the audit the auditor/team shall prepare an audit report. The auditor/team shall communicate the results of the audit, including any observations and incidents of non- conformance, to the relevant staff, the Department Head during the closing of the meeting. The auditor shall take the corrective or preventive action as required. Then a follow up audit shall be prepared to verify the implementation and efficiency of the action taken.
Management Review Procedure : To review the performance Integrated Management System(IMS) , effectiveness and suitability, continuous improvements and ensuring its continuing capability to meet the requirements of the Product Quality, Environmental Performance, Occupational Health and Safety Management. Company has set up SMART (Specific. Measurable, Achievable, Realistic and Time based) objectives at all levels within the organization based on company level objectives which are based on: Views, needs and expectations of the owners, customers, society and staff Outputs of the management review meetings, planning and internal audit results Process and product performance Competitor analysis
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Safety Department
Figure 22 Safety Department Source: Primary Data
GENERAL MANAGER DIVISIONAL MANAGER SAFETY ENGINEER HEAD SAFETY SUPERVISOR SAFETY SUPERVISOR 72
MK Trading is fully committed to the Health, Safety, Environment Protection and security of the employees and workers of the organization. It is the companys policy to provide healthy, safe and secure working conditions and give due consideration to the preservation of the environment in accordance with relevant standards and guidelines and complies with the applicable national and international laws, rules and regulations. It shall conduct its activities and operations with the following objectives: No harm to people Provide for safe practices and safe environment Establish safeguards against all identified threats and risks. Protection of the environment. MK Trading shall ensure that these objectives are achieved by: Maintaining the industry standards of safety and security consciousness, personal discipline and individual accountability by adherence to an adequate and documented system of training. Actively promoting employee participation in measures aimed at improving health, safety, security and protecting the environment Keeping all personnel informed of any known or potential hazards and threats that may affect themselves, their colleagues, their construction workplace or the environment by pertinent documentation. Ensuring adherence at all times to the documented operating procedures by system of internal verification of activities and procedures. Continuously reviewing all mandatory rules, regulations, industry code and guidelines that are relevant for the specific projects carried out. Take all practicable steps to ensure that the contractors work in line with the procedures.
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Organizational Analysis Swot Analysis: The basic objective of the SWOT analysis is to provide a framework to reflect on the ability to overcome barriers and to avail of opportunities emerging in the changing environment, the diagnosis of the strength and weakness can be fruitfully on if the environment factors and the market conditions are considered always with internal capabilities. SWOT analysis is an important tool to find the Strength, Weakness, Opportunities and Threats. These factors reveal the internal and external factors that affect the company.Strength, Weakness, Opportunities and Threats are the elements or the key factors that influence the survival and development of the organization. The following are the SWOT analysis of MK Trading: Strengths: Close relationship with customers, consultants and main contractors. Have got a good reputation due to a large number of years of experience They have got a good brand image. Well qualified and technically skilled manpower. Efficient use of input materials and expertise in recycling. High degree of differentiation, specialization and functional flexibility giving the ability to adapt to the changes in customer preferences immediately. The company has a sophisticated quality control system. The companys goodwill is an asset. ISO certification Weakness: Only limited exporting. High level of dependency on imported raw materials increases vulnerability against availability and price fluctuations. 74
Labor intensity is causing high labor costs as the employees and work force are demanding more with the price fluctuations.
Opportunities: Strengthen the relationship with the customers through the use of IT. Use group purchasing with other steel fabricators to gain a discount. Acquire steel supplier. Use of new technology based equipments is rising. Growing demand for steel fabricated buildings.
Threats: Increasing availability of substitutes in the market Existing competitor or new entrant able to produce and tender at much lower price. Prime contractor could become a competitor. Overseas player enter the market
CHAPTER FOUR OBSERVATION AND CONCLUSION
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Observation and Conclusion
Observation The demand for steel fabricated buildings is rising and the clients prefer to approach MK Trading due to its goodwill and reputation. A very good employee-employer relationship is maintained. The employees and workers are very much dedicated to work as there is no unnecessary indulgement in any talks other than company matters. Each employee is always free to contact directly with the divisional manager at any time. As the company meets the changing preference of the customer, it has a healthy customer relationship. The company has ISO 9001-2008 certification. The market share is 30% and they are looking forward to increase to 50% The marketing and sales team has got a very good communication with the contractors, consultants and clients. The employees and workers are given enough number of sick leaves and vocational holidays. The company has got a very good infrastructure along with good recreational facilities to the employees are provided. There is no wastage of the raw materials as all the left overs sold as scrap.
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Suggestions It is advisable to provide a better advertising for attracting more clients and consultants. The safety of the workers should be taken more into consideration by ensuring they are wearing safety helmets and boots while at work. Company can introduce a customer care service for handling complaints and suggestions. It is recommended to consider each employee as an individual and provide support during personal crisis. Monthly counseling could be provided to the employees. The canteen facility is not at a walk able distance and so each employee has to depend on their own vehicles to go and have food. In order to avoid this, the canteen could be shifted within the company locality. The Research and Development unit could be made as a whole separate unit instead of having their functions done by the administration team. Better performance appraisal systems and grievance handling could be provided. The financial grants could be increased based on the experience and performance. The management should respond quickly to the leave application of the employees.
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Conclusion MK Trading is one of the well performing companies in the Sultanate of Oman, engaged in the process of steel fabrication. The company was established to meet the growing need of the Pre Engineered Building. It is reaching new boundaries with its performance. In due course they have acquired and developed fully fledged capacity in design, fabrication and erection of any kind of steel structure in infrastructure are as well as industrial development area. From the study conducted I was able to understand that the customer tastes and preferences are changing, the competitors are bringing in new sales promotion strategies, and our company is adapting well to these changes and able to keep up the trust of the customers due to its brand image, quality ensured and timely finishing of the projects undertaken. The analysis of each department was carried out and I came to know that the various processes are carried out and controlled by skilled and efficient staff. With the cooperation of the staff and the extended interaction of the employees and the management of the company, it has given in depth knowledge of the organization by giving information about the manufacturing process, the various departmental functions, and the organizational structure and also about the interdependence between the employees and the departments.
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BIBLIOGRAPHY Kotler, Philip. (1985). Marketing Management. New Delhi: Prentice Hall of India Pvt. Limited. Metal Bulletin Focus. (2013). Middle East Steel Supplement, UAE. Retrieved from www.metalbulletin.com. MK Trading Company, (2014). Company Profile, Muscat. Retrieved from www.mktrad.com. SCI, (2012) .Steel Construction Info, UK. Retrieved from www.steelconstruction.info The Business Year, (2013) Diversification Dreams- Oman Economy, Oman. Retrieved from www.thebusinessyear.com. Times Of Oman, (2013).Growth of Market in 2013, Muscat. Retrieved from www.timesofoman.com World Steel Association,(2013), Iron and Steel Statistics , Belgium Retrieved from www.worldsteel.org/statistics-archive 2013 .