STUDY ON PERCEPTION OF EMPLOYEES ON COST REDUCTION AND CONTROL

AT ASIAN PAINTS INDIA LTD

Project submitted in partial fulfilment of the requirements for the

Award of the degree

MASTER OF BUSINESS ADMINISTRATION

OF

BANGALORE UNIVERSITY

SUBMITTED BY

BY

BHARATH K

17YUCMD044

Under the guidance of

SHALINI H S

Associate professor

ACHARYA BANGALORE B-SCHOOL

Bangalore University

2018-19

1
TABLE OF CONTENT

CHAPTER.NO PARTICULAR PAGE NUMBER

1
INTRODUCTION

INTRODUCTION TO THE
2
INDUSTRY

RESEARCH
3
METHEDOLOGY

DATA ANALYSIS &

4
INTERPRETATION

FINDINGS, SUGESSIONS&
5
CONCLUSIONS

BIBLIOGRAPHY

2
CHAPTER 1 - INTRODUCTION

3
 INTRODUCTION

The current business is very demanding with a continues demand from the market forces to
reduce the product price .The pricing as demand by the market , forces the business to reduce
product development and manufacturing costs to remain competitive.

Manufacturing costs of a product can be broadly categorized in the following heads:

 Raw material
 Labour
 Process that is technology driven

 Raw material- bring down expenses for crude materials acquirement. new provider contracts
mean limit crude materials chance setting up instruments and learning to guarantee maintainable
and stable crude materials the board and the capacity to respond rapidly to cost decrease.

 Labour - enhancing item while monitoring costs is a consistent battle. Here are a few hints on
approach to lessen costs in cost reduction

 Provide excellent training

 Invest in innovative technology
 Chang process or layout
 Use right materials
 Enhance safety
 Reduce overtime

1. Provide Excellent Training

A well-trained workforce enhances productivity and reduces re-work. Establish a training plan
for employees that includes both initial training to ensure they quickly get up to speed, and
ongoing training to ensure employees stay current.

4
2. Invest in Innovative, Efficient Technology

We live in a world with consistent change. Put resources into new hardware that builds your
workers' proficiency. Inventive new innovation and hardware can disentangle and streamline
fabricating forms, and give a brisk rate of return.

3. Change Your Process or Layout

At the point when was the last time you evaluated your assembling procedure or format to
amplify efficiency? Advances in innovation and workforce abilities may empower alterations
that can help efficiency, streamline producing space and decrease work costs.

4. Use the Right Materials

Utilizing the most minimal value information sources may cost you cash. Substituting greater
expense or higher quality crude materials may lessen fabricating steps and increment line speed,
advocating the greater expense.

5. Enhance Safety

Your workers are esteemed resources. Ensure you're giving them a spotless, sound and safe
workplace. Actualizing best-in-class wellbeing conventions can lessen the shot of mishaps and
exorbitant specialists pay claims.

6. Reduce Overtime

When you're feeling strain to rapidly build generation, paying extra time appears like an easy
decision, however additional time expenses can rapidly eat into benefits. Diminish dependence
on additional time by including a different line, impermanent specialists or new innovation to
build your yields while controlling expenses.

 Process that is technology driven: Process driven critical thinking is the utilization of a
formal procedure as your primary way to deal with taking care of issues. The principle
favourable circumstances are: The procedure can substantially more effectively be executed by a

5
group of issue solvers. This makes the methodology versatile. Since the procedure is formally
characterized it very well may be constantly progressed.

it begins with the planning procedure. An entrepreneur contrasts real outcomes and the planned
desires, and if real expenses are higher than arranged, the board makes a move. For instance, an
organization can acquire offers from different merchants that give a similar item or
administration, which can bring down expenses.

Cost control is a vital factor for keeping up and developing productivity. Redistributing is
utilized as often as possible to control costs on the grounds that numerous organizations think
that its less expensive to pay an outsider to play out an errand than to go up against the work
inside the organization. Corporate finance, for instance, is regularly redistributed on the grounds
that finance impose laws change continually, and representative turnover requires visit changes
to finance records. A finance organization can ascertain the net make good on and government
obligation retentions for every labourer, which spares the business time and costs.

6
CHAPTER 2 – COMPANY PROFILE

7
Introduction To The Industry

Asian Paints Limited (BSE: 500820, NSE: ASIANPAINT) is an Indian multinational paint
company headquartered in Mumbai, Maharashtra. The Company is engaged in the business of
manufacturing, selling and distribution of paints, coatings, products related to home decor, bath
fittings and providing of related services. Asian Paints is India's largest and Asia's third largest
paints

History

The organization was begun in a carport in Mumbai by four companions Champaklal Choksey,
Chimanlal Choksi, Suryakant Dani and Arvind Vakil in February 1945. Amid World War II and
the Quit India Movement of 1942, an impermanent prohibition on paint imports left just remote
organizations and Shalimar Paints in the market. Asian Paints took up the market and revealed
yearly turnover of ₹ 23 crore in 1952 yet with just 2% PBT edge. By 1967 it turned into the main
paints maker in the nation.

The four families together held the dominant part offers of the organization. In any case, debate
began once again the worldwide rights in 1990s when the organization extended past India. The
question brought about Choksey moving their 13.7% offers and leaving in 1997. Champaklal
kicked the bucket in July 1997 and his child Atul assumed control. After fizzled coordinated
effort converses with the British organization Imperial Chemical Industries, Choksey's offers
were commonly purchased by the rest of family and Unit Trust of India. Starting at 2008, the
Choksi, Dani and Vakil families hold an offer of 47.81%.

8
Marketing and advertising

In 1950s the organization propelled a "launderable distemper", which was a harmony between
the shabby dry distemper that stripped effortlessly and the more costly plastic emulsions.
Advancing their image Tractor Distemper, the organization utilized "Don't lose your temper, use
Tractor Distemper" in their advertisings. In 1954, "Gattu" – a fiendish kid with a paint pail in his
grasp – was propelled as mascot. Made by R. K. Laxman, the mascot discovered intrigue with
the white collar classes.

He was utilized just in print promotions and bundling till 1970s and by 1990s was likewise
observed on TV ads. Gattu helped in bringing the product drove business of painters to the real
end clients of home-owners.Ogilvy and Mather, the promoting office related with Asian Paints,
propelled showcasing methodology by concentrating on happy events in 1980s with their slogan
"Har Ghar Kuch Kehta Hain" (Every home says something regarding its proprietor). Relating
with celebrations and vital life occasions like relational unions and labor, the organization
publicized it as an event to paint homes by interfacing on enthusiastic dimension. In 1990s, the
promotions concentrated on the home outsides concentrating on how the paints could stay with
the outsides timeless company.

9
 ASIAN PAINTS INDIA LTD

Type Public

Industry Chemical

Founded

Founder(s) CHAMPAKLAL CHOKSEY, CHIMANLAL

CHOKSI, SURYAKANT DANI AND
ARVIND VAKIL

Headquarters
MUMBAI MAHARASHTRA
INDIA

Area served Worldwide

10
 Key people ASHWIN CHOKSI (NON EXECUTIVE
CHAIRMAN)
ASHWIN DANI (NON EXECUTIVE VICE
CHAIRMAN)
K. B. S. ANAND (CEO & MD)
ABHAY VAKIL (NON EXECUTIVE
DIRECTOR)

Products Basic And Industrial Chemicals,

Decorative Paints,
Industrial (Re)Finishingproducts, Coatings

Revenue 15852 crores INR (2016)

Operating income 2808 crores INR (2016)

Net income 1778 crores INR (2016)

Total assets 6205 crores INR (2016)

TRADE AS BSE: 500820

NSE: ASIANPAINT

11
 Employees 6067 AS PER 2016

Website www.asianpaints.com

Vision

We need to be an inventive, deft, and responsive world class research and innovation association that is
adjusted to future client needs and catalyses the development of the organization crosswise over existing
and future organizations.

Mission

To boost investors esteem by creating and conveying imaginative and best answer for our clients,
reliably outflanking our friends and giving a dynamic and testing workplace for their
representatives.

Strategy

The business methodology of AP has been based on procuring a progression of transient upper
hands by embracing estimates that raised the Cost of working together for every one of its rivals
by bringing the cleanliness factor up in the business. Up until now, Asian Paints has been
utilizing its dissemination quality and strategic effectiveness to accomplish this favourable
position. The preferred standpoint acquired by utilizing on dissemination quality is brief and at
last imitable. In addition, AP has set up such a broad system, to the point that getting gradual
preferred standpoint out of enhancing the circulation system could be exceptionally troublesome.
The following legitimate advance for AP to search for to increase upper hand would be through
either channel control or through possessing mind space. AP should endeavor to expand the
window of upper hand by utilizing Marketing as an apparatus to obtaining upper hand. A portion

12
of the business attributes could be utilized to pick up experiences about the focused extent of
Asian Paints.

The organization pursues a three-pronged development procedure – advertise extension,

obtaining and redistributing.

PRODUCTS OF ASIAN PAINTS

Royale Aspira: the best finish

- Perfect Finish: Royale Aspira gives the smoothest finish in a high sheen for your walls.

- 5 year performance warranty: Royale Aspira is the only product from Asian Paints to offer you
5 years of Performance Warranty in Interiors. The warranty covers film integrity, protection
against flaking or peeling, shade fading and fungus attack.

- Crack bridging property: Aspira has the exceptional ability to stretch to almost 400%. This
ensures hairline cracks remain covered and your walls remain beautiful for years to come.

13
Royale Atmos: helps purify air
- with Activated Carbon Technology. Reduces indoor air pollutants such as such as
Formaldehyde, VOC and malodour from the air making it cleaner than before.Royale Atmos has
a mild fresh fragrance that lasts for weeks after painting.

14
Royale Lustre: the best lustre

- Low odour: Ordinary lustre paints are solvent based and give off a pungent odour for weeks
after painting. Royale Lustre is water based which makes it virtually odourless. This ensures that
your irritation during painting is minimized.

- Enhanced durability: Royale Lustre is specially formulated to be extremely durable, making it

last far longer than regular emulsions.

- Rich lustre finish: Offers a rich shimmer to your walls that enhances the interiors of your home.
Royale Lustre can be done in a dana finish or a smooth finish.

15
Apex Ultima Protek

Asian Paints Apex Ultima Protek is a ultra tough outside emulsion paint figured with built
unadulterated acrylics latex dependent on nanotechnology. Its interesting surface cross
connecting highlight combined with natural inorganic nano composite based design add to its
exceptional mechanical and against carbonation properties and durable toughness

16
apexUltima Allura Graniza

Asian Paints Apex Ultima Allura Graniza is a grainy finished complete imported from Argentina
which gives a special stone appearance establishing a distinct connection to your outsides. It
repeats shaded rock look on those noticeable zones which makes you stand separated. It is a
water-put together item based with respect to propel acrylic co-polymer in watery scattering.

17
Aquadur Interior

Asian Paints Aquadur PU Interior gives your furnishings a rich, premium complete, without hurting you
or the earth. Being a water based PU, Aquadur has low VOC and is for all intents and purposes scentless,
as against regular PU.

18
PU Palette Interior

PU Palette is a scope of hued completes, extraordinarily intended for wood alongside every one
of the advantages of PU. The 150 + shades and 20 clear completes can be connected on wooden
surfaces including MDF and Particle sheets to give your furnishings a top notch look.

CHAPTER-3: RESEARCH DESIGN

19
Royale Luxury Emulsion
Royale Luxury Emulsion offers the walls a unique, satin shimmer that complements and
enhances the interiors of the home. It is an exquisite emulsion paint that provides a luxurious
finish and a silky glowing appearance to your walls

20
Melamyne Clear
Asian Paints Melamyne is a corrosive restored premium wood complete which gives great
obstruction against day by day mileage like stains and scratches

21
OBJECTIVES

STATEMENT OF THE PROBLEM:

The need for cost reduction is growing as more companies struggle with global competition and
the faltering economy. One way that companies can regain control over their costs is not only to
assess these costs, but also systematically classify and identify product costs. Using a systematic
approach to perform cost reduction not only yields cost improvement but provides decision-
makers with the trade-off involved in achieving this study.

Objectives

1. To study the current costing method followed by the company

2. To study and understand the cost reduction and control measuring being used by the
Asian paints company
3. To study the perception of employees towards cost management techniques

RESEARCH METHODOLOGY:

A research process consists of stages or steps that guide the project from its conception through
the final analysis, recommendations and ultimate action. The research process provides a
systematic, planned approach to the research project and ensure that all aspects of the research
project are consistent with each other.

RESEARCH DESIGN

The research is descriptive is nature.

22
TYPE OF RESEARCH

Descriptive research: The present study is Descriptive in nature as it involves the primary data
which is used in analysis.

TOOLS FOR DATA COLLECTION

The methods used for exploratory research was

 Primary Data
 Secondary Data

PRIMARY DATA

Primary data is the one which is collected by the investigator (researcher) himself for the purpose
of a specific inquiry or study. Such data is original in character and is generated by surveys
conducted by individual or research institution. Relevant primary data will be collected through
administering a structured questionnaire.

SAMPLING

Sample data will be collected through survey among the employees of Asian paints.

SAMPLE SIZE: 50 employees

SAMPLING METHOD: Simple random sampling

SECONDARY DATA

Secondary data taken through internet, Catalogues, Magazines, journals, Newspapers, Websites
and the other relevant study materials.

23
RESEARCH METHODOLOGY

24
Research Methodology

Research Process:

Before setting out on the details of research approach and procedures, it appears to be
fitting to exhibit a brief outline of the research procedure. Research process consists of series of
activities or steps important to adequately do inquire about and the ideal sequencing of these
steps.

1. Formulating the research problem

2. Extensive literature survey
3. Development of working hypothesis
4. Preparing the research design
5. Determining the research design
6. Collecting the data
 By interacting through personal interview
 By questionnaires
Research Process:

The research was completed according to the steps of the employee research process. The figure
below depicts a model of employee research about process.

Define the Objectives of the Research

Collecting and evaluating secondary data

Designing a primary research study

Collection of Primary data

Processing and Interpretation of Data

25
Therefore to accomplish objectives of my research I have utilized Descriptive method for
research.

Sample plan for the project

1. Data source : Primary

2. Research approach : Survey method
3. Geographical area : Peenya
4. Sampling unit : Asian paints India ltd Peenya
5. Sample size : 50 Employees.
6. Research instrument : Questionnaire.
7. Contact method : Personal contact

26
 CHAPTER - 4
DATA ANALYSIS AND INTERPRETATION

27
1. Are you aware about the cost control?

No of response % Of Response
YES 30 60%
NO 15 30%
SOME WHAT 3 6%
AWARE
CAN’T SAY 2 4%

ii

60%

50%

40%

30%

20%

10%

0%
YES NO SOME WHAT CAN’T SAT
AWARE
% Of Response

Interpretation:
From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were more than 50% employees aware about the cost reduction.

28
2. Are you know about the cost drivers in your organization?

No of response % of response
Yes 29 58%
No 13 26%
Can’t say 8 16%

Chart Title

60%

50%

40%

30%

20%

10%

0%
Yes No Can’t say

% of response

INTERPRETATION:
From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were to know about the cost driven in organisation from the employees most of
employees aware about this.

29
3. Are you maintaining separate warehouse for raw material?

No of response % of response
Yes 35 70%
No 10 20%
Can’t say 5 10%

% of response

80%

70%

60%

50%

40%

30%

20%

10%

0%
% of response
Yes No Can’t say

INTERPRETATION:
From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were the employees aware of warehouse facility to their ready product which are
they produce in the firm.

30
4. How you are considering transport charges?

No of response % of response
Shown separately 13 26%
Included in cost of goods 37 74%

Chart Title

80%
70%
60%
50%
40%
30%
20%
10%
0%
Shown separately Included in cost of
goods

% of response

INERPRETATION
: From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were to know about the transportation cost which is incurred in cost reduction .

31
5.Whether firm arranges training programs for employees towards cost reduction?

No of response % of response
Yes 33 66%
No 13 26%
Some time 3 6%
Can’t say 1 2%

Chart Title

70%

60%

50%

40%

30%

20%

10%

0%
Yes No Some time Can’t say

% of response

INTERPRETATION:
rom The above graph it was shown that most of the respondents we spoke to for our survey
purpose were to the employees aware of their transportation charge is include their production
cost.

32
6. Is motivation provided by the company to employees?

No of response % of response
Yes 38 76%
No 12 24%

Chart Title

80%
70%
60%
50%
40%
30%
20%
10%
0%
Yes No

% of respose

INTERPRETATION:
From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were is the firm motivate their employees to reduce the cost of production and to
use the available resource.

33
7. What are the barriers in Activity Based Costing?

No of response % of response
Costly 15 30%
Time consuming 18 36%
Complicated 12 28%
Not useful 5 10%

Chart Title

40%
35%
30%
25%
20%
15%
10%
5%
0%
Costly Time consuming Complicated Not useful

% of response

INTERPRETATION:
From The above graph it was shown that most of the respondents we spoke to for our
survey purpose of to know the barriers while cost reduction and control activity in the purpose
of employees.

34
8. Whether the firm is using inter firm comparison technique among their products?

No Of response % Of response
Yes 33 66%
No 11 12%
Some times 6 12%
Can’t say 0 0%

Chart Title

70%

60%

50%

40%

30%

20%

10%

0%
Yes No Some times

% Of response

INTERPRETATION:

From The above graph it was shown that most of the respondents we spoke to for our
survey purpose is the firm using any comparison techniques while production time.

35
9. Is Activity Based Costing helpful for decision making?

No of response % of response

Yes 20 40%

No 15 30%

Some times 10 20%

Can’t say 5 10%

Chart Title

40%
35%
30%
25%
20%
15%
10%
5%
0%
Yes No Some times Can’t say

% of response

INTERPRETATION:

From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were the employees decision is help to reduce the product cost while producing.

36
10. Do you know about process of Activity Based Costing?

` No of response % of response

Yes 27 58%

No 23 46%

Some time 7 14%

Can’t say 3 6%

Chart Title

60%

50%

40%

30%

20%

10%

0%
Yes No Some time Can’t say

% of response

INTERPRETATION:

From The above graph it was shown that most of the respondents we spoke to for our
survey purpose of the what are the process are the employees conducting to reduce the cost in the
organisation

37
11. Is Activity Based Costing helpful for cost reduction and cost control?

No of response % of response

Yes 40 80%

No 3 6%

Some time 4 8%

Can’t say 3 6%

Chart Title

80%
70%
60%
50%
40%
30%
20%
10%
0%
Yes No Some time Can’t say
% of response

INTERPRETATION:

From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were the more than 80% employees are aware of the cost activity is helps to
reduce the cost and cost control.

38
12. Is the firm appointed independent person for Activity Based Costing?

No of response % of response

Yes 35 70%

No 12 24%

Some time 3 6%

Chart Title

70%

60%

50%

40%

30%

20%

10%

0%
Yes No Some time

% of response

INTERTPRETATION

: From The above graph it was shown that most of the respondents we spoke to for our
survey purpose were the independent employee activity can reduce the cost minimisation at the
production time.

39
 CHAPTRER-5

FINDING SUGGESTION AND CONCLUSION

40
FINDINGS

1. Most of the respondents said most of the employees aware of cost reduction.
2. The employees are mostly inspired by the activity which are conducted by the firm.
3. The employees come to know about reduction of cost through training and motivating by
the firm.
4. The activity based on cost reduction help to know the methods of cost reduction
5. The training program is helps to the cost reduction.
6. Most of the people motivated by the company activity towards cost reduction
7. Most of the employees says the time consumption is the main barrier to the cost control .
8. Inter firm comparison technique is better to know the methods of cost reduce.
9. The activity which are conducted in the company it helps to take a better decision
10. Most of the employees aware about the process of cost reduction.

41
SUGGESTIONS

1. The employees aware about the cost of the product and the expenses of the product to
reduce the cost while production time and what are skills required to reduce and control the cost
the employee have to adopt those skills
2. The company should arrange some activity to the employees towards reduce the
production cost to increase their profit in the market
3. The employees should motivate their subordinates to put their complete effort at the work
place towards reduce the manufacturing cost.
4. Employees attend the all activity which are conducted by the company to improve the
skills in the firm.
5. To reduce their cost the employees locate at the near place from the company to reduce
the transportation charge.

42
CONCLUSION

The principle target of this examination was to enhance the general execution of development
building ventures in Asian paints by applying the fitting administration way to deal with the
procedure from the Contractor point of view. This objective was accomplished by building up a
proposed cost control Construction Framework. This structure is considered as a cost control
usage rule. This structure was produced dependent on 3 establishments:

1) Literature review to explore the advantages of utilizing cost control approach in development

2) Questionnaire in various development extends in Egypt to assess the elements influencing

undertakings' execution, measure the attention to engineers about cost control development and
assess their worries about the primary cost control standards

3) Modern Project Control approach and its impact on the development procedure being a
receptive methodology. The created system comprises of four parts:

1) cost control strategy in a development venture.

2) Used Modern cost control instruments/systems

3) Fundamental issue looked by the contractual worker in controlling the expenses nearby

4) Qualified ability. To confirm the created Framework, it was executed on Case Study in Egypt.
An altered reproduction display was produced in Excel to demonstrate the impact of the
movement put together costing ideas with respect to the task cost control for part of the works
depicted in the structure.

43
 CHAPTER -6

BIBLIOGRAPHY

44
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