INTRODUCTION

India accounts for nearly a quarter of land under production in the world. It is the third largest producer of cotton and has nearly 23 million acres under cotton. Modern textile industry in India has its origin in 19th century. Indias textile industry has a unique place in the economy. The textile industry accounts for 4% of Gross Domestic Product (GDP) and 33% of foreign exchange earnings. India is the largest employer providing direct and indirect employment to 30 million people. The industry accounts for 20% of industrial output. The countrys first textile mill, Express Mill in Nagpur, which was started by TATA in 1854 was the first to down shutters.

1 .1 OBJECTIVES OF THE STUDY

The organizational study is to familiarize ourselves with the working of various departments for a particular period ,so that one can have an exposure to the practical side. The objective is to:

1) To get an idea about the authority, structure and effectiveness of the company. 2) To analyze and study how an organization is managed. 3) To analyze the strength, weakness, opportunities and threats of the company. 4) To study how the activities of various departments are co- ordinate.

5) To study how the management controls various departments for the attainment of the organizational objectives. 1

6) To get an idea about the history and objectives of the company. 7) To get a clear idea about each product of the company. 8) To understand the various functional departments of the firm. 9) To get a clear cut idea about how the managerial theories applies in each practical setting. 10) To learn how different departments in the organization function with proper coordination 11) To get acquainted with the practical side of the business 12) To examine the specific problem faced by the company. 13) To give suggestions for improvement in performance of the company.

1 .2 SCOPE OF THE STUDY

The study was to have a general awareness of the functioning of the various departments and management of Kerala Lakshmi Mills. The study helps to analyze each department and to attain information regarding the strength, weakness, opportunities and threats of various departments. To know the possibilities of developments in future by way of forecasting

1 .3 METHODOLOGY
To conduct the studies different methodologies have been adopted. The study was undertaken by visiting the plant. Both primary and secondary data are used.

DATA COLLECTION Primary sources:

Primary data are those, which are collected fresh and for the first time and thus happened to the original in character. Primary data are collected through questionnaires. Direct interview with the departmental heads , detailed interview

with the divisional heads and by interaction with workers in the company . The data is also collected by observing the functions of the organization.

Secondary sources:
Secondary data means the data that already available i.e., the data which being already collected and analyzed by someone else. Secondary data was collected from magazines, journals and various websites etc. The secondary sources of data are: 1. Organization documents. 2. Departmental manuals. 3. Annual reports 4. Periodicals, books etc. published by the company. 5. Company website-www.NTC.com

1 .4 .CHAPTERISATION

Chapterization is done based on the grouping of activities of the various departments of the organization. The entire organizational study report is divided into seven chapters, described below:

CHAPTER 1-INTRODUCTION
This chapter is classified into five part. They are Objective of the study Scope of the study Methodology Limitation of the study Chapterisation

CHAPTER 2- INDUSTRY PROFILE

This chapter describes the textile industry in world, textile industry in India, textile industry in Kerala, cotton textile industry in Thrissur, new textile policy, National

textile policy, National Textile Corporation, and aim of National textile corporation.

CHAPTER 3-COMPANY PROFILE

This chapter contains three main parts. They are History Strategic intent Organizational chart

CHAPTER 4-FUNCTIONAL AREAS

All the departmental structure, its functions and authorities explain in this chapter. The diagrammatic representation of each department includes in this chapter.

CHAPTER 5- SWOT ANALYSIS

This chapter contains mainly four elements. They are: Strength of the company Weakness of the company Opportunities of the company Threat of the company

CHAPTER 6- PORTERS ANALYSIS

Analysis of Porters five force model analysis on Kerala Lakshmi mills

CHAPTER

7-

FINDINGS, CONCLUSION

SUGGESIONS,

AND

1 .5. LIMITATIONS OF THE STUDY

1. Information collected was limited because of strict rules of company policies. 2. The time allotted for completing the organizational study is only 14 Its not enough for understanding about the organization in detail. 3. The company officials was reluctant to reveal some of its official documents & reports which are kept confidential. 4. There might be errors due to the bias from the respondents. 5. Employers restricted from disclosing their main strength, weakness, matters related to different departments. 6. There is no sufficient data to make inter firm comparison 7. Though the staffs were co-operative, they were constrained by time to their busy schedules. 8. The study cannot be generalized because the sample size selected is restricted to Kerala Lakshmi Mills only 9. Most part of the study is based on the secondary data, thus 100% accuracy cannot be assured or guaranteed. due days.

INDUSTRY REVIEW

2 .1 WORLD SCENARIO The history of development in World Textile industry was started in Britain as the spinning and weaving machines were invented in that country. High production of wool, cotton and silk over the world has boosted the industry in recent years. Though the industry was started in UK, still in 19th Century the textile production passed to Europe and North America after mechanization process in those areas. From time to time Japan, China and India took part in industrializing their economies and concentrated more in that sector.

According to statistics, the global textile market possesses a worth of more than $400 billion presently. In a more globalize environment, the industry has faced high competition as well as opportunities. It is predicted that Global textile production will grow by 25 percent between 2002 and 2010 and Asian region will largely contribute in this regard.

The World Trade Organization (WTO) has taken so many steps for uplifting this sector. In the year 1995, WTO had renewed its MFA and adopted Agreement on Textiles and Clothing (ATC), which states that all quotas on textile and clothing will be among WTO member countries. removed

However the level of exports in textiles from developing countries is increasing even if in the presence of high tariffs and quantitative restrictions by economically developed countries. Moreover the role of multifunctional textiles, eco-textiles, e-textiles and customized textiles are considered as the future of textile industry. 7

2.2 TEXTILE INDUSTRY IN INDIA

The Indian textile industry is the second largest in the world--second only to China. Indian textiles also account for 38 percent of the countrys total exports and are, therefore, a very important industry.

To sustain this growth, it is imperatives that the textile industry produces goods of high quality at reasonable prices. This means that the industry must continuously modernize its machinery. Therefore, the textile machinery industry sector has an integral role to play in the growth of India's textile exports.

Industry analysts note that textile prices are increasingly competitive worldwide as more and more developing countries enter the global textile trade. To maintain, if not increase, its global market share, the Indian textile industry must procure modern, low-cost, textile machinery so that it can produce high quality textiles and garments for export at competitive prices. It is in this context that the market for used textile machinery is viewed as very promising. Used textile machinery permits India to incorporate new technology at low cost. Here are a few important facts about Indias textile :

1. there are approximately 1200 medium to large scale textile mills in India. Twenty percent of these mills are located in Coimbatore (Tamilnadu). 2. India has 34 million cotton textile spindles for manufacturing cotton yarn. Cotton yarns account for 70 percent of India's textile exports. (China has 40 million cotton spindles.)

3. Of the Indian textile yarn exports, almost 80 percent come from coarser yarns (counts below 40s). Consequently, there is a need to upgrade the technology.

4. For the past two years, there has been a significant slow-down in the cotton spinning segment, mainly due to the spiraling price of cotton.

5. The domestic knitting industry is characterized by small scale units which lack adequate facilities for dyeing, processing and finishing.

Location

The industry is mostly located in Gujarat, Maharashtra and Tamil Nadu. The major reasons for this concentration of the industry are:

Availability of raw materials Cheap developed transport facilities Availability of commercial and financial facilities Suitable climate Enterprising capital

2.3 COTTON TEXTILE INDUSTRY IN KERALA

In Kerala there are about 24 cotton textile industries (excluding N.T.C) textile mill of Kerala now operates in hazardous. It has a significant place in the industrial economy of Kerala. Today it is one between the most important medium and large scale industries in the state. Most of the privately owned mill has closed down and as a result, a large number of workers lost their job. The raw materials such as cotton, polyester staple yarn, visco,,se staple yarn for manufacturing cloth is not widely cultivated here. It is either obtained from other states especially from Maharashtra and Tamilnadu or important from outside India.

The handloom industry is one of the largest cottage industries in Kerala, second only to coir, scattered throughout the state and providing employment to over 2 lakhs person. Out of the 27 textile mills now functioning in the state 22 are spinning mills, the government is actively fostering the development of the labour incentive handloom industry. To ensure the supply of yarn to the handloom industry, the government is encouraging the setting up of new spinning mills in the state. Climate condition frequently changes, so the suitable arrangements have to be made in the factory to maintain the desired climate condition for the production of yarn. When new mills are being commissioned, the older one is turning stick. Already 2 mills have been transferred from the private sector to

the public sector because of sickness, 5 are with the national textile corporation (N.T.C) and 2 with the state government. The financial performance of the textile mills in Kerala is not quite satisfactory. Most of the mills are making losses while a few are operating on a major margin of profit. During 1980-1981 only 4 private sector mills in the state declared on equity shares. The poor performance of the cotton mill industry in Kerala calls for a thorough analysis into its profitability and financial position sp as to identify factors responsible for such performance. As the cotton, mill industry is one of the important industries in the state and as the sinning sector of their industry is the supplier of raw materials to handloom industry, it is to strengthen the economy of the state and promote the growth of hand loom industry.

2 .4 COTTON TEXTILE INDUSTRY IN THRISSUR DISTRICT

The raw cotton required by the textile mill comes mainly from other states especially from Maharashtra and Tamil Nadu. An important factor favourably for the industry

10

in Kerala is the availability of electricity at cheap rate compared to neighbouring state. At present there are five mills in Thrissur. They are 1. Co-operative Spinning Mills Vadakkanchery. 2. Rajagopal Textile, Mulamkunnathukavu. 3. Bhagavathi Cotton Mills Thanikudam. 4. Alagappa Textile Mills, Almmagappa Nagar(NTC)

5. Kerala Lakshmi Mills Pullazhi(NTC)

2. 5 NEW TEXTILE POLICY

The government of India declared its new textile policy in 6th June 1985. This new policy aims at increasing production of cloth of acceptable quality at reasonable prices in order to meet the demand for cloth of increasing population in the country. While aiming at this objective, employment potential as also that of export potentiality of the industry are to be kept. The new textile policy frame work has the following dimension:

1) Textile industry will be viewed in terms of its different stages, namely, spinning , weaving and processing: 2) The textile industry is too provided with more flexibility in the use of different types of fibres: and 3) There would be pragmatic policy in regard to capacities of units, all with a view to increase competitiveness and health of the textile industry. The new textile policy has proposed more flexibility to units in using different types of fibers, making available increasing quantities of man-made fibers at reasonable prices by taking steps to increase their domestic production, lowering of taxation on man-made fibers or yarn both with a view to encourage their domestic production and with the hope that the benefits of lower taxation will be passed onto consumer in

11

the form of lower prices, and taking steps to promote the export of manmade fiber and yarn. If absolutely necessary, closure of textile mills should be allowed, if justifiable and provided the interests of closed mills are fully protected. With a view to ensure higher earnings for the power loom sector, there is to be greater emphasis on modernization of power loom sector by introducing new technology , all with a view to improved productivity of the handloom sector, both in regard to quantity as also quality of the products. Also, in the hand loom sector, used of mixed or blended fabrics will be encouraged. A contributory tariff scheme is to provide assistance to hand loom workers who are in a needy position. And lastly, by the end of the seventh five year plan, the entire production of controlled cloth (that is, Janata cloth) is to be transferred to the hand loom sector.

2 .6 NATIONAL TEXTILE CORPORATION

NTC means national textile corporation formed and registered under the companys act 1956. Textile includes yarn or either wholly or partially of cotton, wool jute, synthetics and artificial fibers. It was set up in 1968 with objectives of managing

the affairs of the sick textile undertaking taken over by the government. It was expected to rehabilitate and modernize these mills and expand them

whenever necessary in order to make them economically viable. To begin with there were only 16 mills under NTC. The number of sick units taken over by the government kept increasing and at present NTC is managing 127 mills with an authorized authorized capital of 500 cores and paid up capital of Rs. 437085 crores. The NTC has total installed capacity of 37.21 lakhs spindles and 41.23 thousand looms as on March 31st 1993: in fact the total installed capacity and 25% of the weaving 12

capacity of the cotton textile industry in the country. The NTC mills produced 100.44 million meters and 39.25 million kilogram of yarn against the target of 155.16 million kilogram. In India there is 127 mills under the control of NTC which are divided in to 9 subsidiaries.

Now NTC Ltd has divided into four Regional Offices. Coimbathur is the Southern Regional Office and have around 58 companies as the unit of NTC. The subsidiary units includes mills which includes both Spinning and Composite mills. The following are the 5 mills in Kerala: Kerala Lakshmi, Thrissur -Spinning Mill

Alagappa Textiles (Cochin) Mills, Alagappa Nagar -Spinning Mill Cannanore Spinning & Weaving Mills, Cannanore -Composite mill Parvathi Mill, Kollam Vijaya Mohini Mills, Trivandrum -Composite mill -Spinning Mill

2.7 AIM OF NTC

(a) (b) (c)

To rejuvenate the sick textile undertakings and bring them to normal conditions Provide employment opportunities Improve productivity by means of improvement in productivity in terms of quantity and quality

13

3 .1 COMPANY PROFILE

KERALA LAKSHMI MILLS is situated at Pullazhi in Trichur District Kerala.The Mill was promoted by Late Sri. Karimuthu Thyagaraja Chettiar and it was incorporated in 1961. The production commenced in 1963 with the installed capacity of 24000 spindles. The capacity was raised to 30960 spindles in stages subsequently. The Mill was in financial trouble for quite some time and this led takeover of the management of the Mill in 1972. After nationalization consequent to the implementation of Modernization/Expansion Scheme the installed capacity was raised to 41328 spindles by 1985. At present the Mill is having an installed and commissioned capacity of 41328 spindles. Presently the Mill is manufacturing blended yarn the following counts such as 45s PV, 60sPC, 62sPC. The main raw material Polyester Fibre is procured M/x. Reliance Industry Ltd., and M/s Indo Rama Synthesis (1) Ltd, and Viscose Staple Fibre for 45s PV is supplied by M/s Grasim Industries Ltd, Coimbatore. The raw cotton is mainly purchased form Cotton Corporation of India (A Government of India Undertaking). Actually the KERALA LAKSHMI MILLS LTD, is working under the National Textile Corporation (NTC). The following are the major important organizations are including under NTC in India. These organizations are other units of Kerala Lakshmi Mills. They are as follows: National Textile Corporation (A.P.K.K & M) Limited. 1. AP-Andra Pradesh. a. b. c. d. Azam Jahi Mills, Warangal Adoni Cotton Mills, Adoni Anatapur Cotton Mills, Tadapatri Nataraj Spg Mills, Secunderabad

14

e. 2.

Triupathi Cotton Mills, Renigunta

K-Karnataka a. b. c. d. Minerva Mills, Bangalore Mysore Spg & Mfg Mills, Bangalore M.S.K.Mills, Gulbarga Sree Yallama Cotton Woolen & Silk Mills, Tolahunse.

3.

K-Kerala a. b. Paravthy Mills, Kollam Alagappa Textiles (Cochin Mills), Alagappanagar Cannanore Spg & Wvg Mills, Kannur c. d. Kerala Lakshmi Mills, Thrissur Vijayamohimi Mills, Thiruvananthapuram

4.

M-Mahe a. Pondichery Cannanore Spg & Wvg Mills,

MARKETING DIVISION 1. Karnataka : Minerva Mills Campus,

Magadi Road, Bangalore 56000023. 2. Andhra Pradesh : GaganViharComples (Cellar) M.J. Road Hyderabad 500001

MANAGEMENT NAME PULLAZHI, : KERALA LAKSHMI MILLS FIRM NationalTextile

THRISSUR (A unit of

Corporation(A.P.K.K & M) BUSINESS OF THE FIRM : MANUFACTURING YARNS 15

BOARD OF DIRECTORS :

K.RAMACHANDRAN PILLAI

(Chairman and Managing Director)

B.K. MISHRA(Director of Commercial)

: :

MONIKA .S.CR (FinanceDirector) BRIJESHKUMAR (Company Secretary)

COMPANY Manager

SUNIL LAL (General Manager) : BENOY P.ANDROOS (Personnel Manager)

S.Gunalan

(Spinning Manager)

Present Position of the Company

Licensed

41520

Installed Utilization percentage 73.4% Men employed day

41328

503 Number of working day 351

16

3 .2 HISTORY OF TEXTILE
Modern Textile Industry in India had its origin in the 19th century. The textile industry occupies a pre-eminent place in the Indian economy. The textile industry contributes about 14% of countries industrial production. Apart from clothing for millions, the textile industry accounts for 35% of countrys foreign exchange earnings. The textile sector is closely linked with agriculture, handlooms, power looms, garment manufacturing and a number of ancillary industries and trade. Thus textile industry touches the every day life of a common man. It, therefore follows that the prosperity of the national economy, as a whole largely depends on the sound health of the textile industry. An important development in the 19th century was the expansion of the silk Industry in the country. The countrys first textile mill Empowers Mills in Nagpur, which was started by the Tatas near the first to down shutters. This premier group has sold off two its textile mills, another has been taken over by the NTC. The power loom sector was largely responsible for putting the organized textile industry nearly out of business because it could produce fabric of same quality at a much lower cost and hence sell it cheaper.

Kerala Lakshmi Mill, known as lakshmi mills to local people is textile mill which comes under NTC(National Textile Corporation). This company manufactures threads for texeetiles from cotton. This company biggest employer of the local people.

17

3.3 STRATEGIC INTENT

MISSION & VISION Mission

The mission of Kerala Lakshmi Mills is:1) To excel in the quality of products and services it to industrial and customers and maximize the profit 2) Provide employment opportunities to the people to reduce the gigantic count of unemployment in our country. 3) Increase production capacity and plant capacity 4) Increase sales other

VISION The vision of Kerala Lakshmi mills are:1)Its ultimate vision is to produce yarn at a lower cost of production and make it available to the people at lower cost 2) To widen its market network

18

3 .4 OBJECTIVES OF THE COMPANY

To produce quality yarn at a reasonable rate. To create employment opportunities To provide fair wages To maintain good employer employee relationship To provide better working conditions To maintain good employer employee relationship

CAPACITY The licensed capacity is 41,520 spindles the installed and commissioned capacity of the mills is 41,328. REGISTERED OFFICE National Textiles Corporation 9AP,K,K&M Ltd 3rd floor, Nanjappa mansion, 29/KH Road, Shanthinagar, Banglore 560027.95.

SHARE CAPITAL The mills share holding of Rs.114.46 lakhs is contributed by the subsidiary corporation NTC by way of Equity Share Capital. FINANCIAL POSITION Now the mills on the way to profit and a long term expansion are in a start. It is about 20 crores as a whole for the overall expansion all the old machineries will be replaced by the modern and high production type machinery. The modernization will be full filled with in one year. After the modernization the cost of production may decrease to 20 to 25% only because of the modern machinery.

19

ORGANIZATION AND MANAGEMENT The management and administration of Kerala Lakshmi Mills is vested in NTC Ltd, Bangalore which is the head office of the mills. The holding company of the mill and its head office is NTC Ltd, New Delhi. ADMINISTRATION The chief of the organization is the general managers who a technically qualified person is having sound knowledge and valuable experience in running many textile mills. The persons managing the various departments working under him are also personally qualified in their respective fields. Such as accounting labour management, production and engineering. They are senior personnel backed by long years of experience in textile work. The Kerala Lakshmi Mill is a unit of NTC Ltd. It is spinning mill. The company is engaged only in the manufacture of yarn product. Cotton is the raw material for the production of its desertion as it is under control of NTC Ltd, Bangalore, its head office, the regard raw material is supplied by the NTC and the sales are also made by them through its agents or its department keepers, the cotton purchase may be in either branch or bale. One bale contains 18 kg of cotton. The major suppliers of inputs are 1.Grasim industries Kumarapatnam Viscfose staple fibre (input name) state. 2.Reliance industries ltd, J R FOODS Ltd Polyester staple fibre campus Thirubhyvanan, Pondicheri. 3. Indo Rama Synthetic (P) Ltd Nagpur Polyester AREA OF OPERATION Kerala Lakshmi Mill concentrates markets in India mainly in South. Selling of products is by dividing the market state wise. Company concentrates in Andra Pradesh, Karnataka, Kerala and Mahi. Karnataka

20

Location The mill is situated at Pullazhi about 5km from Thrissur town. OWNERSHIP PATTERN The mill was promoted by late Shri.Karimuthu Thyagaraja Chettiar and it was incorporated in 1961. Due to financial and management problems during the year 1974 the mill was nationalized by Govt. of India under sick textile undertaking Act 1974. The management undertaking) and later with effect from 1-4-1974 it was transferred to its subsidiary company National Textile Corporation.

COMPETITION The main competitions are small spinning units from South India. The company compete with power loom sector and readymade sector. Now there is a trend that most

of the people would like to buy readymade dresses, they are not at all interested to buy cloths from tailors shop, because the price of some readymade garments are cheaper than cloths. The main competitors are as follows. Ananthpur cotton mills Mysore spinning & weaving mills Azam jahi mills Arham Flexipack Pvt.Ltd A/310.Tirthraj Complex, OPP.V.S.Hospital, Andra Pradesh, Gujarat, India Vinayagar Spinning Mills 21, Town Extension, 4 Th street, near Sheriff Colony, Tirupur, Tamil Nadu, India 21

3 .5 INFRASTRUCTURAL FACILITIES
Library Books, magazines journals, news papers which are useful for employees to develop their knowledge are availed by the company and issued in accordance with demand.

Canteen: A hygienic canteen is available in the company compound. It provide the food for every employee in the company. It is providing both vegetable and non vegetable food. Parking: Inside the compound there is enough space to park more than 30 vehicles. Security: Security for the company premises, vehicles, belongings are done in an efficient way. The security is keeping a visitors record with him. And through that the company can know who all entered in the company. Waiting room: Waiting room facility for the visitors which is well furnished and can accommodate up to 20 persons.

3 .6 FUTURE GROWTH AND PROSPECTUS

Kerala Lakshmi mill textiles has a good future, even though the company is incurring loss the company is showing a good performance. The loss incurred by the

22

company is getting down year after year. The following factors is also effecting the future of the company in terms of the Agreement on Textile and Clothing (ATC) there will be no import restriction for any category in any country and whole world would be an open international market without any restrictions on import and export of textile and garments. The competition in international trade in textile is going to be intensified. Till now, Indian textile industry has been a projected/sheltered industry and efforts were being made only for increasing our market share in export trade. But in an integrated world economy, it is a two way process; we have not only to protect our domestic market because the threat of import penetration is real, but also to increase our share in the international trade in textiles and clothing. modernization of plant. Export of the product. New product development. Sale of surplus land. Reinvestment of money for the developments. Fully customer accepted product

23

3.7ORGANISATION CHART
CMD

GENERAL MANAGER

ACCOUNTS MANAGER

ASSISTANT ENGINEER

PRODUCTION MANAGER

PERSONNEL MANAGER

ADMINISTR ATION CLERK DY. SPINNING MANAGER (PRODUCTION) ACCOUNTS FINANCE CLERK DY. SPINNING MANAGER (MAINTENANCE)

COSTING CLERK STORES CLERK COTTON CLERK SALES CLERK SECURITYOFFICER LABOUR WELFARE TIME OFFICER FACTORY (Production) (SQC) STAFF IN CHARGE STAFF IN CHARGE

SECURITY

PF, ESI CLERK

SHIFT TIME KEEPER

24

3.8 PRODUCT PROFILE Polyester/Cotton Blended Yarns Our company brings to our customers polyester/cotton blended yarns in count range up to NE 80 in combed and carded in desired blends or 65:35, 52:48. These are also available in reverse blend of 60:40 in single ply and multifold. This makes them suitable for weaving and knitting purposes. We can also offer dyed from counts 20s till 30s in single ply and double ply. Some of the other varieties on offer are: Ring Spun: NE 12s to NE 80s in Combed & Carded Open End: NE 8s to NE 16s only in single ply Auto coned CVC: Ring Spun Yarns from count NE 20s to NE 80

25

DEPARTMENTS OF Kerala Lakshmi MILLS

There are ten functional departments in Kerala Lakshmi Mills are: 1. Finance Department 2. Purchases Department 3. Stores Department 4. Electrical Department 5. Production Department 6. Maintenance department 7. Statistical Quality Control 8. Sales Department 9. Personnel Department 10. Security department.

4 .1 FINANCIAL DEPARTMENT
In the modern business society finance functions are drawing increasingly more and more attention of all those who are responsible for running financial administration. There is always a problem with every organization for managing it expanding and ambitious plans with financial resources. The financial management has therefore been assigned the task of planning and controlling the long and the short term financial needs of the firm.

26

Structure of Finance Department

Accounts Manager (Finance Manager)

Central excise & Yarn clerk

Cotton clerk Cashier Accountant Cost assistant

Stenographer Accounts clerk

Functions of financial department:

1. Maintaining Proper accounts 2. Timely payment to creditors 3. Making collection from the debtors 4. Maintain good relationship with bank 5. Maintain proper costing techniques 6. Payment of tax 7. Budgeting 8. Preparing annual accounts 9. Maintain proper liquidity 27

10. Payment of wages and salaries 11. Valuation of stocks, inventories, stores items etc.

Books maintained Books maintained by the finance department are as follows: Cash book Bank book Purchases book Sales book Journals etc General ledger Fixed assets ledger Debtors ledger Creditors ledger etc.

Budget The budget is prepared within the company for yearly basis. It prepared on the basis of the fund allotted by the regional office. All the plans such as production, purchase, salary and wages, credit policy etc. are prepared on the basis of this allotment from the regional office. There is a review conducted in a quarterly basis. And appropriate actions are taken if deviation is found.

Working capital Working capital is the amount which helps the company in its day to day operations. As the company is working in loss and the net worth is negative, the working capital management is very difficult. The company acquires working capital assistance from the holding company. Sometimes the funds are acquired through raising secured and unsecured loans from the bank. The transactions of the company are done through State Bank of Travancore, Thrissur 28

Audits There are two types of audit conducted in the company. One is the internal audit and the other one is an external audit/ statutory audit. There are internal auditors to ensure the accounts are fair and accurate. Statutory audit is the audit which is mandatory for the companies formed and registered under the Companies Act 1956

Main applications Payroll system Processing of input from payroll department and payroll calculation Banks advise statement preparation Preparation of overtime hours statement and man hour statement Preparation of earning and deduction summaries Monthly non managerial increment processing Automatic payroll journal general for payroll accounting Pension computation Estate information report Preparation of half yearly and yearly statement of pension Insurance scheme details

Generating gratuity data for actuarial Yearly performance incentive computation for mill staff Contract employee Monthly and half yearly statement Provident fund application Loan request processing

29

Members balance statement preparation Monthly contribution statement preparation PF annual ledger preparation METHOD OF ACCOUNTING Preparation of monthly journal, ledger and tribal balance Preparation of half yearly consolidation of ledger Link schedule preparation Profit and loss preparation Balance sheet preparation SYSTEM OF ACCOUNTING Computerization is going on the mill. A little bit earlier it was very difficult to keep and maintain records and files. Now computerized accounting is going to introduce in the mill.

AUDITING SYSTEM The mill conducts 4 types of auditing Internal audit conducted by NTC Banglore Statutory Audit conducted by chartered accountant Auditing by AGs office (Govt.of India) Central excise audit

30

4 .2 .PURCHASE DEPARTMENT There are two types of purchases made in this organisation. The first one centralized purchasing and other one is the local purchasing. The former is otherwise known as Centralized Stores Purchasing Operation (CSPO). There is a committee formed in this organisation for performing purchase activities. The committee is headed by the General Manager. Production manager, Accounts manager, Engineer and Store Keeper are the other members of the committee. The purchasing committee possesses the power up to the limit of Rs.30, 000. Any purchase above this limit needs a confirmation from the Regional Office. In case of CSPO, the Regional Office fixes the rate and terms of purchase with the supplier and sends the Purchase Order to the unit. The suppliers directly send the material to the unit. The unit receives it and makes payment to the supplier as per the terms fixed by the Regional Office.

Cotton purchase Cotton purchases are being arranged from the Regional Office i.e. from Coimbathur. The unit informs the requirement of raw materials to the regional office and the raw material is allotted according to this. There is a committee called Centralized Purchase Committee for making this purchase operation easy. Raw materials are purchased both from private and government sectors. Cotton Corporation of India is the largest supplier of the raw materials. This mill gets supply mostly from Tamil Nadu, Andra Pradesh, Maharashtra, Himachal Pradesh and Garidabadh etc.

Polyester purchase Polyester is a synthetic product manufactured out of Petroleum by-products. The requirement of the fiber is informed to the Regional Office every month and the purchases will be arranged as regard

31

to this. At present INDORAMA SYNTHETIC (P) LTD, Nagpur is the supplier of Polyester to the mill.

Viscose Synthetic Fiber purchase Viscose Synthetic Fiber is being used long with other fibers for producing the final yarn. These fibers are manufactured out of pulp. Grassim Industries is the main supplier of Viscose Fiber. Presently there is no production taking place in the company using this raw material.

General procedures for purchasing of raw materials are calling quotations from different suppliers. The order will be placed at lowest rate. The suppliers are offering cash discounts at 30 Paise per Kilo gram for making payments within 2 days of supply. If the unit fails to pay the amount within 30 days, they will charge the interest.

Purchase Procedure The purchase procedure followed by the organisation is narrated below: 1. Determination of purchase budget It guides to identify requirements. Such as quantity, quality, size, amount etc. It also helps to identify the requirements of the enterprise. 2. Receiving purchase requisition or indents A purchase requisition is a formal request initiated by the store keeper for replenishment of stock of items. Sometimes the purchase requisition is also initiated by production departments for specific materials. Such an intend is called special intends. Generally printed forms are used for this purpose. The purchase department makes purchase on the basis of intends. Two copies are prepared and send to purchasing department, production department. 3 Determination of quantity to be purchased 4 Inviting tenders and selecting suppliers 5 .Placing orders 32

A purchasing order is a contract by which the purchaser has legal obligation to accept the specified materials. It includes details of: Order number & date Suppliers name and address Description of each item ordered Mode and date of delivery Packing and forwarding instructions Cash discount Signature of official authorized to place the order

Five copies are prepared and subsequently send to: a) Supplier b) Receiving department c) Accounts department d) Initiating department e) Purchase department

6 .Follow up the orders to ensure timely supply 7.Receiving and inspecting materials When the materials are received, the cotton clerk verifies the materials with the help of delivery note sent by the supplier. The physical quantity and quality are carefully checked before passing them to the store. The materials are entered into Cotton Arrival Register. A Material Inspection Note will be prepared after checking the materials. Four copies of such are prepared. He will send it to: Purchasing department Accounting department Stores department One for himself

8 .Passing the bill for payment On the receipt of invoice, the purchase department clerk checks and compares it with the purchase order, material debit note etc. To see that the materials received are as per the order. The purchase manger scrutinizes invoices and if satisfied, approves 33

them for payment. The invoices are now send to accounts department where the clerk verifies arithmetical accuracy. Finally the invoices are passed over to the cash department for making payment by cheque.

Proper purchasing of materials can contribute greatly to efficiency of an organisation. Proper purchasing decisions are based on definite policies. The payments are made at an agreed rate either by the Central Purchasing Committee or by the Purchase committee of the unit. Creditors allow a cash discount of 50 Paise per Kg if the payments made within a week. And there is some interest charged for late payments at prevailing bank rate.

4 .3. STORES DEPARTMENT

The department works under store keeper. All the departments need certain items for the smooth working. These items were always kept minimum in the store. The items will be issued by producing a material issue voucher to the concerned departments. But some items, the production or concerned departments give an indent form is to make quotations for necessary items .The production or other departments gives an indent form to the store keeper. The indent form is to make quotations for necessary items by the store keeper.

There are two types of purchases one is centralized purchasing and the other is local purchases. The local purchases are made for the stores purchases. Bill of materials is received for the purchases. And these are recorded in Inwards Receipts Book. The Inward receipts Book includes the following details: 1. Name of supplier 2. Time and date of purchase 3. Quantity of materials purchased 4. Place 5. Name of person who purchased 6. Name and designation of person who received and inspected the material 7. Register number of vehicle in which the goods had been brought in 34

8. Transportation cost

Each item in the store has been given a unique code number and they are stored according to the code number and according to the cost centres. Bin card is used for recording the receipts and issues of various materials. Proper or scientific way of analyzing is not maintained in the company.

Even though the traditional techniques are being used in stores management and the system is not suitable for the modern era of industry, the personnel in stores manages to ensure each items in time when it is needed.

Method of valuation of inventories

i. ii. Stores, spares, dyes and chemicals and coal at average cost Raw materials at moving weighted average cost or net realizable value, whichever is lower iii. iv. Finished goods-packed yarn at cost or net realizable value which ever is lower Stock with retail shop at landed cost/latest landed cost or realizable value after making provisions for obsolescence, which ever is lower v. vi. Waste at net realizable value Material in process: spinning &weaving in progress, loose yarn at lower of cost or net realizable value vii. The unfinished job conversion contracts for yarn are recognized as work-in-progress valued at contracted price less expenses still to be incurred for making it ready for delivery

4.4 ELECRICAL DEPARTMENT

The electrical department is under supervision of Electrical engineer. There is a power house is located at the mill and the power supply is controlled through this. The

capacity of the power house is 2600 KVA. The company is using 11 KV supply from 35

KSEB Pullazhi Sub Station. Four step-down transformers are used (2x800 KVA and 2x500 KVA) in the company. The daily consumption will raise up to 40000 units a day and the machines are working on motors of 3500 HP in total.

In case of power failure, the company has an alternate source of power generation using fuels. Only 10% of the total capacity of the plant can be utilized through an alternate source.

There are around 15 personnel are there in the department. The generation is of Kirloskar Cummins. The company has a siren and other types of signals. They are operated from the power house itself.

The electrical department is working hand by hand to the production and maintenance department and plays a big and inevitable role in the organisation.

4.5 . PRODUCTION DEPARTMENT

Production concepts are one of the oldest concepts in marketing. production concepts holds that consumers will favour those products are widely available and at low cost. The assumption that consumers are primarily interested in product availability and low price holds in at last two situations. The first is, where the demand for a product exceeds supply in developing then in its fine points, and supplies will concentrate on finding ways to increase production. Second situation is where the products with high cost and has to be decreased to expand the market. Texas instrument (IT) is one of the leading U.S.exponents of the Get-out production, cut the price. In early stages the stress was on controlling the labour costs because labour cost was the major element of the total cost of production.

36

Earlier periods there was no mechanization of production system like the one they have nows. It was too old tradition compared to this new millennium. The process of mechanization was slowly improved step by step.

STRUCTURE OF PRODUCTION DEPARTMENT Production Manager (Spinning Manager)

Asst.Spg.Manager (Maintenance)

Dy. Spg. Manager (Production)

Staff in Charge

Staff Charge

in

Senior technical assistants

Storekeeper

Assistant storekeeper Technical assistants

37

FUNCTIONS OF PRODUCTION MANAGER The various functions of production manager in Kerala Lakshmi Mills are: Production Planning Quality control Inventory control Work measurement Production analysis Plan layout Material handling Other functions

DOUBLER WINDING

DETAILS OF RAW MATERIAL Material is based on the bales. The bales of three different raw materials are three different type of raw material. There are three kinds of raw materials used by the organization They are as follows Cotton Polyester staple fibre (psf+cotton) Viscose staple fibre (vsf+cotton)

38

QUANTITY AND PRICE OF RAW MATERIALS The quantity of raw materials quantities and prices they are as follows. Name Cotton Quantity per bale 170kg Price Rs.46 to 56 Polyester Staple fibre Viscos staple 250kgs and 252kgs Rs.74 380kgs 466kgs Rs.70

Raw material consumption per day in mill a) Cotton b) psf c) vsf 10bales 12bales 3bales

NUMBER OF MACHINES 1. Mixing 2. Blow room 3. Carding 4. Drawing 5. Simplex 6. Ring frame 7 Winding 12 no machine no machine 2 50 10 13 96

7. Packing

39

PRODUCTION PROCESS
MIXING Mixing is the process of combing different varieties of cotton in order to prepare the desired quantity and to produce the yarn of expected quality at a expected price. Cotton is of different quality and variety as it is purchased from different states. Mixing is done in order to bring uniformity in the quality of raw cotton and humidity etc. proportion of different variety cotton to be mixed is decided in order to produce the desired count. After hand mixing bale feedings is done. Cotton is passed through different process to cleaning it the process of opening and clearing is known as blow room process. BLOW ROOM It is one of the primary activities of the production process. Here cotton is brought down to in proper cotton. There are five hating points in the blow room. The imparities in which cotton are made loose and they are rolled in sheets of 40 meters each a4meter roll is a ball or lops. They are transferred to the carding department.

CARDING In this process parallelization, cleaning and drafting is done. This is a process of individualization, which means that material is separated from fiber to fiber and the resultant product is called silver, which is used in next process. There is further removal of water about 5% of the lap weight. Hence the cardigan can be considered as the most important process of cleaning section. DRAWING In this process the uniformity of silver is increased. Hence the eight carded silver is converted into silver. This is a common process for both carded yarn and combined 40

yarn. Blending paellaelisation and drafting of the carded/combined silver is carried out in this stage. To maintain the court constant the length of the resulting silver is increased using drafting in which the delivery rollers rotate faster than the previous rollers. This will result in the extension of silver. In the process the combined or carded silver is converted to draws from silver. ROWING Silver from the flame re generally to coarse in lank number for immediate presentation to the spinning frame for drafting and twisting in to yarn. Therefore the silver is subjected to one or more drafting process before being

erected to the spinning frame. But any reduction in the lank of silver would make it so weak and difficult for handling. Hence a certain amount of twist or inserted and wounded. Bobbins for further processing. The output of this process is known as fly frame, rowing frames and speeders. SPINNING In this process, rowing yarn is given adequate twist using ring frame in order to suit to the next operation. The number of machines in this process is 114 the machines work continuously and automatically for the length of time needed to produce a full bobbin of yarn after which these bobbins are removed and the machine is set to make another set of bobbins. The capacity of the mills expressed the term of number of spindles. The capacity of the mill is limited to 49,532 spindles. DOUBLING Doubling signifies the twisting together of 600 or more strands of single yarn in to a simple or compound form for the purpose of making sewing threads, lace, embroidery yarn, hosiery yarn, netting yarn, special purpose yarn and fancy yarn. The doubled or folder yarn thus produced has greater strength, elasticity and smoothness than a single thread of equal count. 41

WINDING PROCESS The yarn produced from the spinning process is wounded on a cone by using winding machine. The tests are done in one winding stage. The spinning processes are repeated along with winding and rewinding breakage study the output of the process is the corn yarn. REELING Prior to the weaving operations, the yarn is reeled into links of convenient is usually reeled so that firm consolidated package can be obtained thereby minimizing transport charges. The reeling operation consists of winding the yarn or swifts as they are technically termed having circumstances of 54 inches. PACKING The output of the production is in the form of cone yarn by corn winding and hank yarn by reeling. It is packed in bale or board which contains 180kg. 120 yarns is equaled to one lea and 7 leas are equalized to one hank. The production is of various counts. First of all counting by spinning manager is done then it is packed. There are checked and packed by supervisors on behalf of spinning manager

42

WORK FLOW MODEL

MIXING

BLOW ROOM

CARDING

DRAWING

SIMPLEX

SPINNING

WINDING

PACKAGING

43

4.6 .MAINTENANCE DEPARTMENT The maintenance department ensures the machines are in good working condition. It ensures the required level of output in quantity and quality. The various types of maintenance techniques followed by kerala Lakshmi Mills are as follows: a. Preventive Maintenance: This maintenance activity includes oiling, cleaning, tightening etc. These activities are performed by the workers called Cleaning Gang. There are separate cleaning gangs provided for each section. These cleaning gangs perform the preventive maintenance activity in regular intervals. b. Breakdown Maintenance Breakdown maintenance is a maintenance activity performed immediately after the machine breakdown. The operator of the machine informs his immediate supervisor about the machine breakdown and the supervisor informs Deputy Production Managers of production and maintenance. The Deputy Production Managers arrange the maintenance function. The Mill has a maintenance schedule and they are strictly following it.

4 .7 .STATISTICAL QUALITY CONTROL (SQC) Statistical Quality Control is an important department headed by the Deputy Spinning Manager. Quality is essential for the working of an organisation. It has to pay attention from the selection of raw materials itself.

Raw materials account the major portion of the textile industry. And the quality of raw material is the mail reason for the quality of the final yarn. So the proper care should be taken from the selection of raw materials. In case of yarn production, the quality of the raw material is identified by the staple length of the raw material.

44

At the time of receiving the raw materials, a sample is drawn from each bale and they are send to Coimbathur. And the laboratory tests are conducted there. The quality is tested as per the specifications of South Indian Textile Research Association (SITRA). The result is sent to the unit. SQC department will take care of the result obtained.

The quality is ensured in each of the production process. While mixing the cotton with polyester, the quality is ensured by using the results obtained from the testing of sample raw material at Coimbathur. In blow room the quality is checked by weighing the lap. One lap should possess 18kgs with a deviation of 500 grams. Sampling for quality checking was conducted in carding department done once in a week. Sample is taken three times in a day from drawing department (day shift). The sample is drawn once in a day from simplex machines. Spinning department makes the quality assurance once in a day (day shift). In spinning number of breakages is also considered. Once in a day in winding also.

Mathematical and statistical methods are used for measuring the quality at each stage. Various methods/ machines used for measuring the quality are given below: Anamed Textile Balance Model Tz Evenness Tester Lean Machine Weighing Machine

These machines help to measure the quality of the product. Reports are generated about the quality of products and send to the production manager along with the suggestions and findings. The copy of the report is also sent to the concerned departments also. With the recommendations, suggestions, and rectification orders etc.

45

4 .8. SALES DEPARTMENT All the marketing functions are done at the regional office level. The finds the market, contacts with the customers and fixes the terms of sales. The sales department in the mill is at a dummy state. The regional office will send the Sales Order to the unit. The sales order may contain the following details: 1. 2. 3. 4. 5. Name and address of the customers Quantity in bags Specification (count) Rate per Kg Date etc.

The delivery of goods is made within a week of receiving the sales order. The sales clerk will take care of it. He accounts the sales. A copy of the bill sent to the accounts department. The credit period is allowed up to 28 days. The amount is received through banks.

The mill has no direct contact with its customers. All the marketing functions are done by the regional office. The textile market is a buyers market. The regional office always gives orders to consignment agents. They are making fruit of the effort of NTC units.

The customers are given discounts for making payments at an agreed rate if they make payments within a week. Late payments are charged at the prevailing bank rate.

46

4.9.PERSONNEL DEPARTMENT
An organization is a human grouping in which work is done for the accomplishment of some special goals or mission. To look after the various functions set for the organization, adequate resources in men and materials have to be arranged by individuals who serves as managers or supervisors within the organization. Such people have to make things happen in the achievements of organizational objectives. Without human effort an organization cannot accomplish their objectives. So in order to handle precious human resource Kerala Lakshmi Mill maintaining a personal department. Total strength of the mill is 550 including staff. The main functioning of the mill and maximum efficiency is connected with temporary workers ie gate bathally. Workers can be divided into two categories, skilled workers and unskilled workers.

SKILLED WORKERS Those who engaged in the maintenance wing and electrical section, workshop etc are skilled workers. UNSKILLED WORKERS The operating workers who engaged for machine operation are unskilled i.e in different department, they are engaging after a particular training. Regarding the staff strength of the mill staff can be divided into three categories i.e. managerial staff, technical staff and clerical staff. Ever since the inception of the company two decades

ago, one of the visions of the management was to promote Industrial Relations all across the company. Consequent to this, it has been possible for the management to motivate all employees and making them actively associated with the quality management systems to ensure customer satisfaction.

47

PERSONAL DEPARTMENT

PERSONNEL MANAGER

HEAD TIME KEEPER

SECURITY OFFICER

SENIOR TIME KEEPER

PERSONNEL MANAGER

ESI PF CLERK

PRODUCTION CLERK

WAGE CLERK

48

WORK OF UNIT

The company works on all days in the week. The company works for 24 hours in 3 shifts. The time of the 3 shits and general shifts will be as follows. General shifts 1st shift 2nd shift 3rd 7am to 3.30pm 7am to 3pm 3pm to 11pm 11pm to 7pm

The office staff works from Monday to Saturday.

FUNCTIONS Attendance Procedure For managerial staff, duty timings are 10 am to 5pm about which they are very particular. Even if a staff member is 5 mins. Late in the morning without any specific reason, he is marked for half day leave. Workers are doing their work in three shifts of 8 hours each. The staff of each employee goes in changing every month. Records of all these are maintained by personnel department. Salaries & Wages Personnel department makes decision on salaries and wages. These are calculated per month for each employee keeping into consideration the attendance. Employees are paid differently during training period.

Provident fund scheme In 1932 P.F Act has been introduced with a view of providing maintenance to the family of the employee after his retirement or death. This act is applicable at Kerala

Lakshmi Mills Ltd. In P.F scheme employee has to contribute 12% of his salary and the management has to contribute to P.F in the same proportion that of the 49

employees share. An employee can take, and he is eligible for taking loans from P.F during the time of his retirement he can family members are eligible for that amount. ESI Scheme The main objective of Employees State Insurance scheme is employee welfare. It comes under the provision of employees state insurance act 1948. Employees are benefited, especially in case of accident or death. The employee has to contribute 1.5% of his salary and company 4% ESI to avail the benefit.

Grievance Handling Procedure A grievance is any dissatisfaction whether expressed or not, whether valid or not, arising out of anything connected with the company which an employee thinks, believes of even feels to be unfair. In Kerala Lakshmi Mills Ltd if works have any problem they can immediately report to the supervisor. If it cannot be solved at this level they can directly report to head respective department or to G.M. Trade Union A Trade Union is any combination of persons whether temporary or permanent, primarily for the purpose of regulating the relations between workers and employees or between workers & workers for imposing restrictive conditions on the conduct of any trade or business and includes the federation of two or more Trade Unions. In Kerala Lakshmi Mills Ltd main trade unions are INTUC and CITU. These trade unions are creating such an environment in the organization, which maintains good relationship between workers & management. Salaries & Perk It is the personnel department that is dealing with calculating of Salaries & Park. The various parks which are provided by the company to its employees are: HRA (House Rent Allowance) LTA (Leave Traveling Allowance) Subsidized food & Canteen facilities

50

Employees welfare fund Employees children education allowance Personal accident insurance scheme Loan for house building Employees state insurance (ESI) -6% of salary i.e. 1.5% given by employee himself and 4.5% of salary given by organization. Medical reimbursement Bus facilities is arranged to the workers for coming to and going from the company.

Leave Rules

Casual leaves 10 days per year More than 3 casual leaves at a time or in a month are not allowed. Casual leaves lapse if not utilized.

Sick leave Sick leaves can only be obtained after 6 months of recruitment. To avail the benefits under this scheme employees should submit medical certificate.

Advance & Loans Personnel department takes care of decisions regarding advance & loans. Advance are given according to the requirements of the customers.

51

4.10. SECURITY DEPARTMENT

This department is responsible for the security of the entire company. Their main duty is at the main gate of the factory premises from where all the goods enter or leave the company. The security department is maintaining the following registers. 1. Inward register for incoming material It contains information about date, item. Quantity, place from where it is coming, bill number, medium of transport, vehicle number etc. The concerned person is allowed to enter the factory premises along with material that they are bringing. A stamp is put on the bill that they are brining. Stamp contains information regarding date, entry number etc. Then the concerned person goes to the store and from there he goes to the accounts department where the payment is done after confirming the stamp. 2.Outward Register for outgoing stuff In this register quantity, date and time of dispatching the material is recorded. The concerned authority checks quantity mentioned in the gate pass.

3.Visitors register

Visitors register is maintained to record the name of the person coming, his purpose of visit, whom he wants to meet. His time of arrival the time at which he is leaving the company etc. 4. Vehicle incoming/outgoing register This register is maintained to have a record of vehicles coming and going out of the company. Visitors are not allowed to park their vehicles along with the vehicles of employees. Separate arrangements are made for parking the vehicles of both employees and visitors. 5. Guards duty register It contains details of daily duties of guards in shift wise. 52

SWOT Analysis
SWOT Analysis is an important aid for the management when it comes making critical decisions. SWOT is an acronym for Strengths, Weakness, Opportunity and Threat. The Strengths and Opportunities represent the positive aspects, where as the Weakness and Threats represent the negative aspects that the company should try to overcome. Strengths and Weakness are internal to the organization in relation to the strategies implemented, its position in relation to competitors, etc.Whereas opportunities and threats are external to the organization, i.e. which is caused by the external environment. The aim of conducting a SWOT analysis is to isolate the key issue which would be important in the future for the organization.

Internal assessment of the organization

Strength

Weakness

SWOT ANALYSIS

Opportunities

Threats

External assessment of the organization

53

STRENGTH WEAKNESS Less effort to motivate employees Trade unions problems Less delegation of authority to department heads Less initiative is planning of activities and coordination of work Since the machines are old huge expense due to repairs of machinery The average age of employee is very high. Due to freeze on recruitment the number of younger professionals is decreasing. Employee morale at lower level is less Fluctuation in raw material quality High market competition Slow technology up gradation Presence of highly technically qualified executives Company and its workers are strongly committed to quality Fully and semi automated production system Technical abilities of the machineries Well developed technology Quality of the product Pricing policy Productivity of the product Very good infra structure Availability of raw materials

OPPORTUNITIES The company can make use of the existing facilities more productively There is an increase in the demand of cotton fabric in the national as well as international market. Constant demand for cotton products. Technology up gradation is possible.

54

THREATS

Stiff competition from other spinning and weaving mills Increase in cost production due to more wastage Less basic and recreational facilities provided to the workers may result in uneasiness among workers in future Competition faced in the price polices Fluctuation in the prices of raw materials

Hence SWOT analysis helps the organization in understanding it position with regard to the internal and external environments. It helps the firm to analyze its positive aspects thereby helping it to capitalize on its strength and diminish its negative aspects, which could relate the possibilities of growth.

55

PORTERS ANALYSIS

1 BARGAINING POWER OF CUSTOMER

India, in particular, is likely to benefit from the rising demand in the home textiles and apparels segment, wherein it has competitive edge against its neighbors .Hence, the bargaining power of customers is strong. For that reason, it is of importance for a producer of apparel to differentiate their products or production so it will not compete with price as primary mean .Differentiation is accomplished either by quality or service. Differentiation can be considered as especially important in the Indian textile industry since contracts are usually set on short-term basis and are rarely set more than six months ahead. Hence, there is a need to tie the customer to manufacturers without the need of explicit contracts. And Thus, the bargaining power for the Customer is improved. 56

Indian textile companies are facing a tough competition from Chinese, Brazilian and South Korean companies as they are able to produce at a lower cost compared to Indian companies .This industry is fragmented and there are large number of players in the industry, therefore buyer get the option of choosing from many suppliers Indian textile industry is no more just a mass producer of textile rather it has moved into niece segment and has developed capability to produce finest quality of fabric which provides them distinctive competencies against other countries as well as small players who could cater to mass consumers only. Therefore overall buying power of buyer will defer from company to company. Companies like Aravind mill, Raymond, aditya birla group have achieved certain degree of distinctive competencies therefore with them buying power of buyer is negated to large ext ent against their competencies. But many small companies who are mass producer of textile face a strong buying power of buyer

2.BARGAINING POWER OF SUPPLIERS

India is a country where we have numerous players in textile industry which all are varied in terms of size and power. There has been increase in production and supply of textile products in last few decades globally, mainly due to rapidly changing social and economic structure of the countries worldwide. In past few years, especially after the removal the trade related tariffs and non tariff barriers in 2005, Asian countries such as India, china, Hong Kong and Japan have emerged as major players in this particular industry, mainly due to their changes on economic front and infrastructure developments. The large number of available suppliers in India gives an initial indication of a weak bargaining position for the supplier group .Additionally, the supplier group lacks switching costs and has a low level of product differentiation. This leads to great possibilities for textile manufacturers to scout the supplier group for best terms and prices for production. As a result, manufacturers can contact a large number of suppliers and play suppliers against each other. Such behavior weakens the bargaining power for suppliers and as a result pushes prices down and makes prices similar among suppliers.

57

An advantage which the Indian Suppliers group have capitalized on is ,Due to their ability to integrate forward in value added chain, they have achieved a better bargaining position towards textile manufacturing. As previously seen, companies in the textile and apparel sector have established forward to create vertically integrated company groups. Deep relationships between manufacturers and suppliers illustrate how important the textile manufacturing industry is for the supplier group. An example of this is how suppliers and manufactures interact in activities such as research and development (R&D). By this process the supplier obtains knowledge on what customers downstream in the value added chain demands.

BARRIERS TO ENTRY

1. Customer switching cost: As earlier mentioned that the existing players are operating in this industry for a long period and also have established long term relationship with their customers. Over a period of time these companies have customized their products as per the needs of the customers therefore customers also prefer to still to the existing suppliers rather than moving to others as there is a high switching cost involved here and if the customers switch to new suppliers than again he need to train the suppliers as Per their requirements

2. Economies of Scale: The textile industry across the value chain is largely decentralized Units mostly independent and small scale in nature, rather than composite units Undertaking all activities together Large scope for entry of organized integrated textile manufacturers

3. Brand Loyalty The existing players have been in the industry for a long period of time and have established a good

58

Reputation with their customers in domestic as well as foreign market. This has resulted in the high brand loyalty by customers. But this will not act as a potential barrier for other companies because most of the Indian textile companies operate in B-To-B segment and all the players keep competing among themselves for new consignments from the clients.

4. Absolute cost Advantage

Abundant availability of raw material is one of the key advantages of the Indian textile industry; this also gives a major opportunity to Indian textile industry and creates a barrier for foreign players to compete with Indian companies in cost advantage. India is more cost competitive vis--vis countries like Brazil, China and South Korea in manufacture of textiles Cost advantage arises mainly from the large in India

pool of low cost but skilled manpower available

In case of textured yarn and fabric, India is less competitive, which is a result of the higher tax burden (excise duty) on manmade textiles in the country? Indias position is strong vis--vis other countries in most raw materials Largest producer of jute Second largest producer of silk Third largest producer of cotton, accounting for nearly 16% of global production Third largest producer of cellulosic fiber/yarn Fifth largest producer of synthetic fibers/yarn Eleventh largest producer of wool India also leads the world in cultivated area under cotton (roughly 8.82 million hectares in 2004-05) Jute - Occupies an important place in the Indian economy Has a strong contribution to direct employment as well livelihood in the tertiary sector and allied activity.

59

4 THREAT OF SUBSTITUTE PRODUCTS

When using such a broad term as Textile, there are obvious reasons for identifying substitute product groups proves difficult. Of course, there are variations in types of clothing and material. Variations in textile segment can also be identified as trends in fashion and styles. Hence products within the apparel segment can act as substitutes but the general conclusion still stands; theres no substitute to apparel.

5 COMPETITIVE RIVALRIES WITHIN THE INDUSTRY

The textile manufacturing segment in India is made out of numerous manufacturers which all are varied in terms of size and power. It is a massive sector with thousands of companies producing apparel. The apparent high growth rate of total textile exports indicates that the rivalry between manufacturers is low. The growth rate is high in some product segments but even negative in others. Hence, the rivalry between apparel manufacturers is diverse since they enjoy different growth rates .Additionally, textile as a perishable product group is in the risk of temptations to cut prices when demand slackens. For example, when there are recessions in the business cycle apparel prices will drop significantly in price. Both these factors exemplify and indicate that the rivalry between manufacturers is high .As Indian apparel manufacturers are pressured to lower prices in order to stay competitive with companies abroad, the overall rivalry within the industry gets companies to expand their customer base in order to keep profits up. It is therefore reasonable to believe that such expansions may occur on the behalf of competitors if possible, and thereby increase the rivalry in the industry

60

FINDINGS
The company incurred losses continuously for the last few years. The company suffers from the shortage of working capital. The company is following the both centralized purchasing and local purchases The company is now in the stage of modernizing Checking the quality of raw material is done at Coimbathur. The company have good industrial relations The company has good structure as well as management system. It provides canteen facility for all workers at subsidized rate.

The company is running three shifts. It ensures optimum utilization of man power which in turn increases labour productivity.

SUGGESTIONS GENERAL It is suggested to implement computerization in all section, So as to reduce cost,

obtain speed and accuracy in the work.

Right now the interest charged by NTC for their loan is much higher. It is

recommended to make negotiations to reduce the interest rate.

The company may prepare budgets for each activity which will provide it a better control and coordination mechanism. This will aid in reduction of production costs.

The company has to follow more safety measures because there is a risk of fire

in the factory layout

Purchase Department More suppliers of raw materials are needed, to meet the unpredictable demand. To finds more sources of raw materials providing high quality at low prices. It is better to make local purchases in case of some local items 61

Production Department For meeting the competition at the international level, there should be sufficient production capacity. New technology must be incorporated.

Sales Department They should make proper speculations before entering in to a totally new market. The buying behavior of the customers should be studied, i.e. try to understand what makes the customer buy a particular product. Customer complaints must be reduced through mass communication Advertisement must be increased through the various Medias

Finance Department Decision making in relation to the finance of the company is important. The financial

team should help the top management in taking the right decisions by providing them the required data

Accounts Department It should provide for budgeting of policies.

Human Resource Department There should be more training programs to develop the skills of the employees. From the general analysis, due to labour absenteeism the company cannot use its full production capacity. Reduce employee turnover by providing better salary and remunerations 62

 The company should aim at the improvement of the workplace communication so that it will increase the improvement of employee productivity level. The company has to follow more safety measures because there is a risk of fire in the factory layout. They take feedback after training. They have to take the employees feedback

seriously and make changes accordingly

63

CONCLUSIONS

The organizational study done at Kerala Lakshmi Mills Ltd, Thrissur has helped to acquire a practical knowledge about the management practices. The functions of different department of the organization were studied. The company has a very quick response mechanism to track the market needs and has been very agile in the lunching new products to satisfy the challenging customer needs and preferences. With focus on quality, the companys products continue to enjoy the strong customers preference across all the segments. The company is always in the forefront of absorbing and adapting the latest in product and manufacturing technology to maintain its leadership in the industry and this could help them to achieve the goal of being one of the noteworthy global players in the industry.

64

BIBLIOGRAPHY Helen G. Chambers & Verna Moulton (1996), Clothing Selection, Onford & IBH

Publishing Company, Culcutta www.irmi.co.in www.textileindia.com www.textile industry.com WWW.google .com Office records of Kerala Lakshmi Mills. WWW. NTC.co.in www.keralalakshmi mills.com

65