Bineesh Final

REPORT ON ORGANISATIONAL STUDY AT

D.C.MILLS (P) LTD ALAPPUZHA

BINEESH MOHAN

(Reg. No: 85290011)

Under the Guidance of

Dr. Molly P Koshy

Reader, CUSAT

Submitted in partial fulfillment of the requirement for the award of the

degree of

MASTER OF BUSINESS ADMINISTRATION

to the Cochin University of Science and technology

School Of Management Studies

Kochi-682022, Kerala, India

Year-2010

DECLARATION

I BINEESH MOHAN, third semester MBA student of

school of management studies at the Cochin university of

science and technology do hereby declare that this report

on ORGANISATIONAL STUDY AT D.C.MILLS ALAPPUZHA

under the guidance of Dr.Molly.P Koshy, Reader, School

of Management Studies in partial fulfillment of the

requirement for the award of the degree of Master of

business administration is a bonafide study I have done in

the organization. I also declare that this report has not

been previously formed the basis of award of any Degree,

Diploma, Associate ship, Fellowship or any other similar

title of this or any other university or institution.

Place: Bineesh Mohan

Date:

ACKNOWLEDGMENT

The accomplishment of this Organizational Study at D. C. Mills

has been considerably influenced by the valuable assistance

received from various sources.

I’m deeply indebted to Mr. K.J Dennis, Managing Director,

D.C.MILLS (P) LTD ALAPPUZHA, for granting permission to do my

organizational study. I express my sincere thanks to Mr.

Lalichen Arackal Senior H. R Manager for his approvals and

guidance. Also thanking Mr. Joseph Fernandez Asst. Manager

HRD for his support and guidance. I thank Mr. Robin (HR

executive) who gave me necessary instructions and guidance

throughout the study. Sincere thanks to various department

managers and staffs for their help and support.

My special thanks to Dr. Molly P Koshy, Reader, School of

Management Studies, CUSAT for her guidance and

encouragement.

I also extend my sincere gratitude to our Director, Prof. Dr. K B

Pavithran, of School of Management Studies of the Cochin

University of Science and Technology.

ABSTRACT

I underwent an organizational study at D.C.MILLS (P) LTD

ALAPPUZHA to acquaint myself with the business environment for

a period of one month from May 19, 2010 to June 18, 2010 as a

part of the MBA curriculum at the School of Management Studies,

Cochin University of Science and Technology.

The study was conducted to understand the structure, function

and processes of various departments and their interdependence.

During the course of study I was able to successfully interact with

the employees of the organization. They were happy to give me

all possible information.

The methodology consists of data collection through interview,

observation and literature review. The data collected from

different sources are classified, analyzed and interpreted. Based

on which an organizational structure, its functions and various

departments are identified. The various departmental functions

are clearly identified and their processes & activities carried out

are recorded. The study helped me to obtain an exact picture of

D.C.MILLS based on which, a swot analysis is done.

CONTENTS

I. INTRODUCTION.

2. INDUSTRY PROFILE.

2.1 World scenario of coir industry.2.2 Indian scenario of coir industry.2.3 State scenario of coir industry.

3. COMPANY PROFILE.

4. PRODUCT PROFILE

4.1 Products made from coir4.2 Products made from rubber4.3 Products made from sea grass4.4 Products made from sisal4.5 Products made from jute4.6 Washable collection

5. OBJECTIVES

5.1Quality objectives5.2 Quality policy5.3Company policy

6. AWARDS

7. ORGANIZATION CHART

8. DEPARTMENTAL PROFILE

8.1 Sample department8.2 Purchase department8.3 Stores department8.4 Production department8.5 Human resource department8.6 Marketing department8.7 Finance department8.8 Information technology department

9. SWOT ANALYSIS

10. Observations

11. Suggestions

12. CONCLUSION

13. BIBLOGRAPHY

1. INTRODUCTION

Among the several natural industrial ‘hard’ fibers which enter the

world’s markets today, coir occupies a unique place. It is put to

many uses industrial, agricultural and also as a substitute for

certain cordage for which it is claimed to be superior to hemp and

sisal. Coir is one of Kerala’s most important products. Coir is a

natural fiber that helps hold together the coconut shell. When

extracted, it can be spun into one of the world’s strongest threads

and woven into mats and baskets of all kinds.

In most coconut producing countries the main coconut product is

“copra” the coconut meat. The husks are burned as fuel, used as

manure, or discarded. In Thailand, East Africa, India and Sri

Lanka, coconut husk fibers are used additional products. Fifteen

countries of the Asia-Pacific region produce 86% of the coconut in

the world. But only a handful of them are known to be coir

producers. India is the largest producers and exporter of coir and

coir products. SriLanka, Indonesia, Malaysia, Philippines, Thailand

and now Vietnam are the other primary producers of coir with

varying levels of production capabilities.

The coir industry, which was confined to Kerala, has now spread

to other states like Tamil Nadu, Karnataka, Andhra Pradesh,

Orissa, etc over the years largely on account of various

developmental and promotional programmes. Alleppey is the

nerve centre of Kerala’s famous coir industry. Here we can see

coconut husks being beaten into fiber for making beautiful mats

and other coir products. Apart from its traditional use as rope,

yarn and floor coverings, coir fiber is finding new applications as

an eco-friendly substitute for wood and synthetics. A long term

biodegrable geo-fabric for soil bioengineering and garden articles.

The by product of coir industry, coir pith, is increasingly being

used as a soil conditioner. The future of coir industry depends on

the non-traditional areas and non-conventional products.

2. INDUSTRY PROFILE

Coir industry occupies a unique place among the rural traditional

cottage industries in India. The state of Kerala, also known as the

'land of coconuts', is the largest producer of Coir in India. It

accounts for more than 75% of the total production. The

preparation of Coir is a lengthy process. The coconut husk is

immersed in water for Rubberized about a month. Later softened

husk is beaten to separate the fiber from the husk. This then

woven into coir.

Coir-foam, rubberized coir is used to make mattresses and pillow

covers. These have gained popularity due to their softness and

durability. Floor mats, carpets and durries too are made. Other

handicraft items like bags, wall hangings, dolls and animal figures

etc. are made. The jewellery made out of Coir is fascinating

because of its intricate and delicate designs.

Coir is a versatile natural fiber extracted from mesocarp tissue, or

husk of the coconut fruit. The husk contains 20% to 30% fiber of

varying length. After grinding the husk, the long fibers are

removed and used for various industrial purposes, such as rope

and mat making. The remaining material, composed of shot and

medium length fibers as well as pith tissue, is commonly referred

to as waste grade coir. The waste grade coir may be screened to

remove part or all of the fiber, and the remaining product is

referred to as coir pith.

2.1World Scenario

Currently, the global annual production of coir fiber is about

350,000 metric tons (MT). Yet, even in the world’s top two

producers, India and Sri Lanka, which account for about 90% of

global coir fiber production, combined, this renewable resource is

underutilized; local coir mills process only a fraction of the

available husks, which accrue more or less year round as a waste

during coconut processing.

Traditional uses for the resilient and durable coir fiber include

rope and twine, brooms and brushes, doormats, rugs, mattresses

and other upholstery, often in the form of rubberized coir pads. In

the 1980s and 90s, global exports of coir fiber fell by almost half,

as Western consumers shifted to synthetic foam and fibers. Then,

since 1990, rapidly growing domestic demand in India more than

doubled global production benefiting exclusively the Indian coir

industry.

Finally, since 2001, a rising Chinese demand for coir, an

expanding market for coir-based erosion control products, and the

spread of coir pith as a peat moss substitute in horticulture has

further pushed up global production and prices. In turn, other

coconut growing countries, including Philippines, Thailand and

Vietnam are now expanding their production and export of coir

fiber. These changes are also reflected in the international trade

in coir. Historically, Sri Lanka had been the world’s largest

exporter of various fiber grades, whereas India exports largely

value added products – yarn, mats, and rugs. While in 1990 about

80% of global production was exported, growth of the Indian

domestic market dropped that rate to below 40%.

Global trade volume for coir fiber, value added products – yarn,

mats, rugs – and coir pith now stands at about $140 million per

year with India and Sri Lanka respectively accounting for about

$70 and $60 million of that amount. This may not seem much but

in the coconut regions of producing countries coir is an important

economic factor. The challenge for coir industry is to sustainably

expand markets for this versatile renewable resource while

maintaining its role as employer for the rural poor. This may

require producers to innovate production, improve product

consistency, and in particular develop novel applications – jointly

with their customers in importing countries. Businesses, public

agencies and research institutes are now addressing this

challenge in multilateral projects worldwide – setting examples

that global trade can be beneficial to all parties involved.

The major coir producing countries are India, Sri Lanka and

Thailand, while Philippines, Vietnam and several South American

and African countries have entered the fray looking towards

further expansion. At present only an estimated 10% of the husks

from global coconut production are used for fiber extraction,

producing about 480,000 tons of coir annually. Around 100,000

tons of this enters the world trade, the balance being consumed

locally in coir producing countries. While fiber demand in

importing countries has declined due to inconsistency in quality

and delivery, the global coir trade decreased from 160,000 tons

two decades ago to 123,000 tons.

2.2Indian Scenario

Indian coir industry is an important cottage industry contributing

significantly to the economy of the major coconut growing States

and Union Territories, i.e., Kerala, Tamilnadu, Andhra Pradesh,

Karnataka, Maharashtra, Goa, Orissa, Assam, Andaman & Nicobar,

Lakshadweep, Pondicherry, etc. About 5.5 lakh persons get

employment, mostly part time, in this industry. The exports from

this industry are around Rs. 70 crores. Coconut husk is the basic

raw material for coir products. Around 50 per cent of the available

coir husk is used to produce coir products. Hence, there is scope

for growth of coir industry. India accounts for more than two-

thirds of the world production of coir and coir products. Kerala is

the home of Indian coir industry, particularly white fiber,

accounting for 61% of coconut production and over 85% of coir

products. Although India has a long coastline dotted with coconut

palms, growth of coir industry in other coastal States has been

insignificant.

During the Seventh Plan period, encouragement has bee given for

expansion of home market through publicity and advertisement,

product diversification, adoption of new technology, research and

development, training for artisans, including women and social

welfare measures for coir workers, most of whom are SC/ST and

women.

The Eighth Plan programmes for coir industry aimed at increased

utilization of coconut husk for production of coir fiber, growth of

the domestic market, strengthening of research and development

to find out new uses of coir fiber especially in the areas of geo-

fiber, fire retardant, cement and gypsum polymer development,

acquiring of new technology like PVC-tufted coir products,

encouragement to cooperativisation and providing social welfare,

civic amenities and medical facilities to coir workers.

Emphasis would be laid on mechanization in a phased manner

without affecting employment to make Indian coir products

competitive in the export market. Brown coir fiber production

would be encouraged by providing seed capital assistance.

Modernization of coir units has been envisaged by providing

incentives for installation of modern equipments to make coir

industry more competitive in the export market.

Special training programmes have been formulated for women

artisans. Improved modern treadle ratts would be provided to

trained women artisans to increase employment and earnings.

Medical facilities, crèche for children of coir workers, model coir

villages for SC/ST coir workers and social welfare schemes would

be implemented during the Eighth Plan period. Emphasis has

been given on developing devices/equipment/machinery through

R&D to reduce drudgery and to improve productivity of coir

workers. Development of improved variety of ratts and looms

would help in improving the production of coir yarn spinning, coir

mats, etc. In order to boost exports, the scheme of cooperative

publicity/programme in the export markets which was started in

the Seventh Plan would be continued.

Not more than 50 per cent of the coconut husks is utilized in the

coir industry, the remaining being used as fuel in rural areas.

Production in the cooperative fold is not more than 20 to 25 per

cent. The development programmes so far undertaken aimed at

revitalization of coir cooperatives, improvement in quality and

products diversification. Efforts were also made for exploring

wider export markets for coir and coir products. Judged from the

increase in production and employment, the progress has been

rather slow and exports in physical terms have remained mere or

less static

2.3State Scenario

The history of coir and its association with the state of Kerala

dates back to the 19tth Century. Sandwiched between the Western

Ghats on the east and the Arabian Sea on the west. Kerala is one

of the most beautiful States in India. A tropical paradise of waving

coconut palms and wide sandy beaches, this thin strip of coastal

territory slopes down from the mountain ghats in a cascade of

lush green vegetation and varied fauna. One of the most

commonly seen tropical trees in Kerala is the Coconut tree. In

fact, even the name Kerala (Keralam in Malayalam) is derived

from this tree. Everything from Kerala’s culture to its dishes is

evolved around the Coconut tree.

Alleppey is the nerve centre of Kerala’s famous Coir industry.

Here, we can see coconut husks being beaten into fiber for

making beautiful mats and other coir products. Both men and

women are actively involved in the production of the coir. The

women are mainly involved in the yarn spinning sector and the

men in the product-weaving sector. Coir industry enjoys the

status as the largest cottage industry in the State of Kerala,

giving employment to over a million people. Kerala also has a

very fine natural harbour located at Cochin had found a place in

the minds of Europeans as a trading centre because of its port

and spices.

The coir industry, one of the major traditional industries in the

State and second only to agriculture as a source of employment

in Kerala, provides employment to around 4 lakh persons, of

which 84% are women. With 10.05 lakh hectares under coconut

cultivation, this accounts for 45% of the net cropped area in the

State. Concentration of coir industry in the State is Alleppey,

Kayamkulam, and chirayinkeezhu, Kola, North Parur, Trichur,

Kozhikode, Kannur and Vaikom. In this industry varieties of coir

yarn produced such as Ashtamudi, Anjengo, Artary, Vaikom,

Koilandy, Arror Sp, Muppine, Rope Yarn. Main coir products

produced and exported include Mats, Matting, Rubberized coir

pith, Rugs, Carpets, Curled coir.

The various agencies for promoting coir in the state include a Coir

Directorate, Coir Workers’ Welfare Fund Board, Coir Parks, Coir

Fed, Coir corporation, and coir Board and so on. The government

contributes to the coir Workers Welfare Board to provide welfare

measures that include pension to coir workers, educational

assistance to the workers’ children, marriage assistance, and

provision of geriatric centers and so on.

2.4 State Scenario

The economy of the Alappuzha is predominantly based on

agriculture and marine products. Though Alappuzha is industrially

backward, some traditional industries based on coir and coir

products, marine products, handlooms, different types of

handicrafts, toddy tapping, etc, have been dominating the scene

from the very early times. Alappuzha is known as the traditional

home of coir industry in Kerala.

The easy availability of raw materials and existence of backwaters

and canals suitable for the wetting of green husk and accessibility

of transportation are the main factors for the development of this

industry. Such sources are abundant in the district and these

favorable factors, which have helped the growth of the coir

industry in Kerala.

Since, coir is produced from coconut husks, people started

investing in the industry, mainly southern part of the country,

which was due to the abundance of coconut trees and adequate

facilities for natural retting. As a result of this, Kerala has a major

part to play a role in coir industry, which is the largest

manufacturer of coir products in India. In, Kerala Alappuzha is the

main centre of investment.

The Coir Board was established by the Central Government under

the provisions of the Coir Industry Act,1955. there is a Coir

Research Institute functioning at Kalavoor. The National Coir

Training and Designing Centre were also established at Alappuzha

in 1965. all these institutions are helped the development of coir

industry in Alappuzha.

The water linkage between Alappuzha town and yarn producing

centers and the port facility for shipment of finished products to

various countries abroad accelerated the growth of coir industry

in Alappuzha. In fact it has been rightly called the Venice of the

east due to this reason.

2. COMPANY PROFILE

DC Mills is the first ISO 9001-2000 certified company for coir

products in India from TUV CERT OF RHEINISCH-WESTFALISCHER

TUV E.V. and first in the world for vinyl backed coir products from

TUV CERT. Spanning two decades, DC Mills foray in the coir

products exports is a magnificent example of growth rooted in

determination of a management with a vision seldom seen.

Attentiveness to customer tastes and preferences, commitment

to quality, dedication to timely delivery and extensive range of

products make D.C. Mills the numero uno in floor covering

business. Their specialties include tailor made designing services

in the areas of export of coir products, jute India, Indian carpets,

natural fiber, rubber and bamboo mats, bath rugs and PVC mats.

They also offer you an exotic range of colors, styles and designs.

DC Mills is recognized as one of the top exporters of coir products

in Kerala, India.

In the year 1982 D C Mills started export of Indian natural fiber

door mats and floor coverings under a young and dynamic

management, with its own manufactories by Mr.K.J.Dennis. Now

they have six manufacturing units with modern and sophisticated

machineries in Valavanadu, puthenambalam, Pollathy,

Pathirappally, U.S.A and U.A.E. D C Mills is presently

manufacturing coco, sisal, jute, wall to wall carpet in 4 meter

width and sea grass.

A Holland made power loom machines used by the company to

manufacture good quality latex backed carpets. Company also

manufacturing high quality door mats and area rugs in good color

fastness in water and sunlight. Its own modern dyeing and

printing factory for the best result of color fastness its quality

checking department ensures the quality to the taste of all global

customers.

In 1997 D C Mills started a new factory on 3 million US dollars for

vinyl backed coco rolls and door mats with flock designs of World

class, as same as European style company also manufacturing

different types of rubber doormats and outdoors. Now the

customer can have all the requirements of natural fiber floor

covering from D C Mills collections.

Another new product range from the company for their customers

are the new generation mats made of softolefine, nylon, wool and

yarns. The company has the most modern BCF machine for

extruding yarns and multi operational coating machine for the

square pyramid and bubble backing.

The company also owns highly advanced fully automated tufting

machines imported from England and USA for the production of

poly propylene mats. The present production capacity of the

company is around 100 containers of 40 feet size per month. The

installed capacity of plant is 10000 squire meters per day.

The company has a workforce of more than 1500 employees with

another 5000 people indirectly involved in its operations. At DC

Mills, constant innovation is of prime importance. To this effect, a

modern and a highly sophisticated R & D division equipped with

the latest information software and hardware forms an integral

part of DC Mills. A team of well-experienced software

professionals head the department. The plethora of awards the

company has been earning ever since its inception stands as a

solid testimony to the commitment, success and efficiency of the

company’s production team.

A significant milestone in the growth trajectory of the company

was accreditation by British retail consortium (BRC) in 2008. The

company is now BRC certified global recognition fot safe

consumer products. The company has been regularly receiving

awards in recognition of outstanding export performance. In

recognition of highest performance in export, D.C Mills has

received the prestigious award from the Prime minister of India

consecutively for the past 14 years. The latest award was the one

honored by coir board for the best export of 2006-07.

Group concerns of this company are:

D C Mills (P) Ltd.

Detlish Rugs (P) Ltd

Denny Steels (P) Ltd.

4. PRODUCT PROFILE

DC Mills mainly deals with coir products, rubber products,

washable indoor products (in cotton, nylon and wool), coir rubber

products, jute runners and sisac runner. The major products of

the company are:

Imperial mat

Elegant mat

Croma mat

Paragon

Rolex

Endure

Coral

Lovers mat

Rub flocky

Coco flock

4.1 Products made from coir:

Coco shift

Bangal

Queen

Prince

Classic

Super form

Passion

Rainbow

Magic mat

Darken

Crown

4.2 Products made from rubber:

Shoe mat

Iron mat

Hollow mat

Hexagon

4.3 Products made from poly propylene:

Poly rope mat

Non brush mat

Raven

Colombo

Massio

Condor

Crown mat

4.4 Product made from Sea Grass:

Orissa mat

4.5 Products made of Sisal:

Sultan

Mugal

Bombay

4.6 Products made of Jute:

Hawal

Hook

Miami

Jaipoor

4.7 Washable collection includes

Acqa

Lily

Lorry

Milky

Parry

Sigma

Sofine

Coroma

Elite

Eva

Tribo

5. Objectives Of The DC MILLS (P) LTD.

5.1Quality objectives:

a. To meet the customer demands for new designs and develop.

b. To reduce fuel consumption and production wastage.

c. To reduce customer complaints.

d. To control the cost of manufacturing

e. To improve the online delivery

f. To achieve continual improvement on MIS.

5.2Quality policy:

1 Market innovative products fully conforming to or surpassing

customer specifications, delivered on time.

2. Use ecofriendly manufacturing process.

3. Achieve continual improvement of products and manufacturing

process.

4. Always fulfill social commitments.

5.3 Company Policy:

The DC Mills follows a 30-30-30 policy which was formulated by

the M.D, Mr. K.J.Dennis. Every query from the part of the

customer will be addressed within 30minutes. The customer will

be provided with a sample within 30hrs and the shipment will be

made within a period of 30days from the receipt of the order. This

is the 30-30-30 policy.

6. Awards

Certificate of merit for the export of coir products 3rd

position during the year 1992-93.

Second position during the year 1993-94.

Merit certificate for the outstanding performance in

pioneering efforts during the year 1994-95.

Second position during the year 1995-96.

Certificate of merit from the government of India for

outstanding export performance in coir mats and matting

during the period 1995-96.

First position for outstanding performance in the export of

coir products during the year 1996-97

First position for outstanding performance in the effort in

promoting export and investment in coir industry during the

year 1998-99

First position for outstanding performance in growth in

export of coir products during the year 1999-2000

First position for the outstanding performance in research &

development efforts in product development & product

diversification during the year 1999-2000 .

10.Highest position for the outstanding performance in

export of coir products during the year 1999-2000

Millennium award for the contribution for the development

&promotion of coir industry

Award for the top exporter under cepz for 2000-2001

Award for the top exporter - coir products by Coir Board for

2002

Award for the top exporter - coir products by Coir Board for

2003

Award for the top exporter - coir products by Coir Board for

2004

Award for the top exporter - Chamber of commerce -2005

Award for the top exporter - Chamber of commerce -2006

Award for the top exporter - Chamber of commerce -2007

7. ORGANIZATION CHART

8. DEPARTMENTAL PROFILE

Various departments in DC Mills are:

SAMPLE DEPARTMENT

PURCHASE DEPARTMENT

STORES DEPARTMENT

PRODUCTION DEPARTMENT

HUMAN RESOURCE DEPARTMENT

MARKETING DEPARTMENT

FINANCE DEPARTMENT

INFORMATION TECHNOLOGY DEPARTMENT

8.1 SAMPLE DEPARTMENT

Sample department is the first and important department that

comes before the production department. The duty of sample

department is to develop the samples according to buyer’s

requirement and developing samples according to the world

fashion and trend.

In sample department first the buyer gives the order of any mat

of his choice to the sample department. When the buyer sends

the request, some time he sends the design of his choice and in

some cases he asks the company to send the design for him. The

sample department has its own designers who draw the design

for the buyers. When the buyer accepts the design send by the

company, then that particular design is given a specific number. If

there any changes recommended by the buyer, it will done and

given a new serial number. Then the buyer sends the acceptance

of the design.

After all the acceptance procedure is over, then the sample

department creates a stock order. This checks whether the

company’s store has that much of stock to fulfill the order. Then

the plates and mats are brought and printing is done. Normal

cases there make three sample pieces and out of which one is

send to the buyer. If there any alternation is needed, then it will

send back for modification and buyer places the order. Finally

PRODUCTION MANAGER

SAMPLE IN CHARGE

ASSISTANTS

that order moves to the production department and production

starts.

The sample pieces are printed in the sample department itself

and according to the design plates are designed and with the

plates the mats are printed.

8.12 Departmental Structure

8.13 Functions of sample department

Receiving sample request from buyer through

marketing department.

Developing own samples with fashion and trend

with the co. ordination of designs.

Sourcing of new articles in market.

Checking and Processing.

Check the faults.

8.2 PURCHASE DEPARTMENT

Purchase department is responsible for bargaining, procuring,

managing and storing the raw material needed for the production.

This department plays a very vital role in carrying out the

production process very smoothly. The main function of this

department is to maintain the needed stock in order to avoid the

delay in production. Purpose of buying of material and the

control of stock are of great importance in any business. If the

proper quantity and style of merchandise is bought at the right

place and time, half the task of selling is completed.

Purchases include:

Mat Purchase

Miscellaneous Purchase

Mat Purchase

For this type of purchase, sometime company buys some of the

materials from the local vendors. For the purchase of the

materials like coir and yarn needed for the production of the mats

are purchased from the local vendors. They invite quotations and

for the purchase of materials like PVC powder and glue they out

source the material from out side India. Whenever the material

reaches the company it will pass to the quality section to measure

the quality for the material made by the purchase department.

Miscellaneous Purchase

It will include the purchasing of various materials like machinery

parts, computers and other miscellaneous materials which is

needed for the production as well as administration of the

company.

They maintain minimum level of inventory. The department keeps

the quality standard of raw materials by testing raw materials in

their own lab and prepare master safety data sheet. The

department keeps the records like quotation file, purchase order,

comparative statement analysis and various bills copies.

Production planning along with selection of raw materials to be

purchased shall be done by Purchasing Department.

8.21 Departmental structure

PURCHASE MANAGER

ASSISTANT PURCHASE MANAGER

OFFICERS

OFFICE ASSISTANTS

NEED RECOGNITION

VENDOR SELECTION

DETERMINATION OF PRICE

8.22 The procedure for purchasing

PREPARATION OF PURCHASE ORDER

ACCEPTANCE OF THE

PURCHASE ORDER

FOLLOW-UP

MAKING PAYMENT

The function of purchase department starts from recognizing the

needs of raw materials as per the requisition of the customers.

Then the vendor selection takes place and after that price is

determined. After this purchase order is prepared and acceptance

of it takes place. Then the payment is made.

Need recognition It is the first function in the purchase department. Firstly the

purchase department should find out all the needed items

through the purchase requisition made by the stores

department.

Vendor rating & Selection Most of the raw materials of D C Mills are imported.So

company is trying to make use of indigenous products by

seeking alternative supply so as to reduce cost and

avoidance of low stock of material. Vendor rating is done by

using ABC analysis. Quality, delivery, price and service are

the factors taken for vendor rating.

These factors are rated in the ratio of 50:40:5:5.Here A category

includes quality and delivery .B category includes price and

service. The company is having long-term relationship with many

of its vendors. As part of it, company is providing financial and

other assistance to its vendors. 50% of the company’s partners

are its vendors.

Determination of the price The next function of this department is to determine the price

needed for purchasing the material. Vendors providing

feasible price is selected.

Preparation of the purchase order After selecting the vendor the purchase order is prepared by

the department and sends it to the supplier.

Acceptance of the purchase order The supplier accepts the order and then sends the

acceptance receipt and it is accepted and properly

maintained by the company.

Follow-up Follow-up is made after all these steps. The main aim of this

step is to ensure timely delivery of the material.

Making payment giving Payment is made only to those who maintains and

provides invoice properly. After checking the invoice it is

approved for making payment to the supplier. Modes of

payment are different in case of different vendors. Immediate

payment is to be made to the local coir vendors. In other

purchases one week to one month credit periods are allowed.

Company is also credit period up to one month for the

payment of its products.

8.23 Functions of purchase department

Planning inventory level

In purchase department, inventory consists of a list of goods

and materials held available in stock.

Identifying vendors

The company has a data base which contains a list of vendors.

From these list vendors have to identified.

Procurement of quality raw materials

For the procurement of quality raw materials, keeping up

quality standards.

Issue of purchase order

Purchase order being issued by the purchase department.

Co-ordinate with production department

Purchase department co-ordinate with production department

for achieving the target.

Periodical feedback to vendor through an evaluation

process By proper evaluation in a periodical manner, purchase

department check the satisfaction of vendors and made

changes if any.

8.3 STORES DEPARTMENT

The stores department is functioning as a part of purchase

department. They are following both FIFO & LIFO method for issue

and receipt of materials. They are maintaining different stock

levels so as to avoid the shortage of stock.

Purchase department make orders according to the instructions of

the stores department. Stores department find out any shortage

and surplus in stock and inform purchase department for giving

and taking orders. Warehousing facility is comparatively less for

the company.

Sub divisions of store department

PVC Mat Store

Coir Store

Dying House Store

Paint Store

Chemical Store

Finished Goods Store

Stenciling Store

8.4 PRODUCTION DEPARTMENT

Production is the key function in almost all industrial or

manufacturing concerns. Production is the functional area

responsible for turning inputs into finished outputs through a

serous of production process. The production manager is

responsible for making sure that raw materials are provided and

made into finished goods effectively.

DC MILLS have 6 units and its main unit is at Valavanadu. Several

types of Mats are produced here. The production is based on the

orders. The production departments under the head of production

manager is coordinate with all other departments to see that

production is according to the standard of ISO 9001:2000 and

then it tries to achieve the objectives of the organization.

SENIOR EXECUTIVE

SUPERVISORS

WORKERS

8.41 Departmental structure

PRODUCTION MANAGER

SPOOLING

PVC TUFTING

BRUSHING

FLOCKING STENCILING

8.42 Production process

BLEACHING & DYEING

SHEERING

PACKING

Bleaching and dyeing

Bleaching of coir fiber is important for color improvement. After

sorting raw material according to the shade and color

variations which is taken for bleaching. Dye vat machine is

used for bleaching and dyeing. The yarn material and water is

filled into the tub in the ratio of 1:2.Heat up to 65 degree

Celsius and mix the required quality of bleaching chemicals

and water with the help of a motorized stirrer. After washing

the bleached yarn is continued with dyeing process.

The very same process is followed in the case of dyeing also.

Instead of bleaching chemical, dye and water is heated up to

65 degree Celsius using Hydro extractor for squeezing in order

to remove the water content. After squeezing the yarn is taken

to drier for drying.

Spooling

After the process of bleaching and dyeing, the yarn is spooled

in to bobbins. The coir is spooled in 465 spools and with the

help of these bobbins further production is done. Then it is

passed to the mixing machine, here the coir is mixed with the

pasty PVC mix.

Pvc tufting

The spooled bobbins are then used in the tuft machines to

produce mat. Using the blade fixed in the tufting machine the

coir is cut to one inched pieces and it is placed over the PVC

mixture which is in a liquid form. PVC backing will set after

passing through the machine. After tufting we get a long mat

with huge width having high temperature.

Sheering

PVC mat is passed through sheering machine to level the

heights of one inched coir placed on PVC. The finishing work is

done through this machine.

Mat cutting

After all these process the PVC mat sheet is cutted in to the

sizes needed. Both manual and computerized machines are

used for mat cutting .Using computerized machines mat can be

cutted into different models or designs other than square

model.

Brushing

Brushing process is done to remove the dust and yarn

materials in the mat. Hand brush is done for minimizing the

wastes and then it will go for printing and flocking.

Flocking/stenciling

After brushing, the mat is gone either to the flocking section or

to the stenciling section. In some cases it is needed to pass

through both the stages. In such case, stenciling is done firstly.

Flock powder and glue is used in the flocking process.

In this process flock powder is spattered into the mat and the

flock powder will get fixed only on the gummy part of the mat.

In stenciling process, paint is sprayed on the mat on which

stencils is placed.

Packing

After completing the above production functions the products

are forwarded to the packing section for packing .Different

types of packing and labeling are used by the company as per

the order.

Steps in packing

Tagging

Labeling

8.43 Functions of production department

Receiving orders from marketing department.

Receiving original samples from sample department or

develop samples as per buyer specification.

Production planning according to the time and ordered

quantity.

Inspection of produced or purchased mat

Stenciling.

Inspection.

Packing.

Final inspection of goods ready to dispatch.

Forward to shipping.

8.44 Responsibilities of the production manager

To establish standards and target for each section of the

production process.

Effective co-ordination of various production processes.

Ensure products are produced as per the buyer’s

specifications.

Try to reduce the cost of production.

Reduce wastage by the maximum utilization of raw

materials.

8.5 HUMAN RESOURCE DEPARTMENT

The human resource department is mainly concerned with the

whole development of work force. For any organization

employees are hidden assets. Without these employees no

company can work effective. HR department is considered as an

indispensable part of every organization. The personnel and

administration department comes under this department.

Human resource development department is a very important

functional department in any organization. Human factor in any

organizations considered as a significant aspect. Because every

business enterprise must ultimately depends upon the best

possible efforts of the human beings works for it.

ASST: MANAGER HR

HR ASSISTANT

SECURITY SUPERVISOR

OFFICE ASSISTANTS

8.51 Departmental structure

DC Mills has an eminent HR department managing around 1500

employees, to enable the smooth functioning of the company. HR

department is practicing various programmes including human

resources planning, recruitment and selection, training and

development, orientation placement and induction programmes,

welfare and social security measures, job analysis and evaluation,

compensation management system, grievance handling

measures, work committee, measures to reduce turnover and

absenteeism.

SENIOR MANAGER HR

8.52 Functions of human resource department

Manpower planning

DC Mills is conducting planning and forecasting activities to assess future need of employees. Manpower planning is the process of determining manpower requirement and the means for meeting these requirements in order to carry out the integrated plans of the organization.

Recruitment

This is the most important function of HR department. Recruitment is the development and maintenance of adequate manpower resources. It involves the creation of a pool of available labour upon whom the organization can depend when it needs additional employees. The company adopts following recruitment methods.

Registers system- it is the form of register

maintained by the company to recruit employees

Campus recruitment-company also recruits fresh

candidates from colleges and other professional

institutions. It is mainly done for engineering and

managerial post.

Advertisement in news papers

Employee reference

Walk in workers

Selection

Selection is done for selecting right person for the right job with

requisite qualification and competence to perform the job. D C

Mills have the following selection procedure.

Preliminary Interview / Group Discussion

Application Blank

Employment tests

Employment Interview

Reference check

Medical exam

Final Selection

Training and development

Company maintains a training calendar through which a company

forecast its training programme. The company takes suggestion

of supervisors for training methods. Off the job as well as on the

job training methods are provided.

The company is providing training to existing as well as new

workers as and when necessary. Workers are provided counseling

frequently to give assistance to them in their duties. They are

motivated through the counseling programmes towards the

performance of work and thereby achieving organizational goals.

Company adopts a full fledged training programme for

employees.

Chart showing the treatment of a new employee

New employee

Prepare training plan

Induction to the system directly

Identify need through questionnaire

Orientation, Placement and Induction programmes

When new people are placed, the company is very cautious in

giving enough orientation and Induction programmes to them.

Company is providing more training and development to them so

as to get acquainted with the nature and functioning of the

organization.

Welfare and Social security measures

Welfare measures include the following,

Welfare Society

Company maintains welfare society for the welfare of its members, staff and workers.

Sneha Bhavan

Issue circulars

Identify faculty

Evaluate effectiveness

Company provide house under Sneha Bhavan

programme to those workers who does not have house.

Tour programmes

Company conducts tour programmes for providing

entertainment to staff and workers each year.

Wedding Programmes

For the staffs and workers who are in the poorer section

the company conducts wedding programmes.

Cultural programmes

The company conducts many cultural programmes like

arts and sports for the entertainment of members,

workers and staffs.

Educational facilities

The company is also providing educational facilities for the employee’s children.

Health insurance schemes for employees

Yearly get together of employers and employees

family members.

Job Analysis and Job Evaluation

Job analysis is made for each job to know about the nature of

job and the requirements of the job. By doing this, the

company can understand which type of people are required

for each job and their qualifications and abilities.

Job evaluation and performance appraisal is also done to

know about the performance level of each employee to give

assistance to them to improve this performance level. It also

helps to fix the remuneration to workers. In D C Mills most of

employees are paid on the basis of their performance.

Performance appraisal is made in every three months.

Compensation Management System

DC Mills is maintaining effective compensation

management system so as to give prompt and correct

payment to its employees. They are also giving incentives

to its workers or employees to motivate their performance

of job.

Grievance Handling Measures

The company is provided grievance box in each working

unit or sections so as to put complaints and suggestions by

the employees.

Works Committee

To maintain a good industrial relation, D C Mills create

works committee which includes participants from almost all

departments & sections. Problems of all employees are

discussed & solved in the works committee. Works

committee meets once in three months.

Measures to reduce Absenteeism

Company is taking measures to reduce turnover and

absenteeism by providing various incentives to employees.

Counseling is given to reduce absenteeism. If it is not

effective, as a final treatment punishment measures are

taken against them.

8.53 Responsibilities of the human resource

manager

To ensure better working condition for the

employees.

To implement the policies framed by the top

management.

To encourage employees welfare activities.

EXECUTIVES

OFFICE ASSISTANTS

MANAGER

Formulation of policies on wage and salary

administration, performance appraisal, welfare

activities etc.

Establishment of a proper system for the collection of

feed back.

Problem solving like grievance over distribution of

overtime work, annual increase in pay, transfer

promotion and so on.

8.6 MARKETING DEPARTMENT

8.61 Objectives of Marketing Department

Achieving and sustaining customer satisfaction

Explore new markets of the company

Explore new distribution channels

Develop new marketing policies

Conducting market research

Reports at regular intervals.

Control marketing activities.

In order to achieve the above objectives the department

concentrates on Internal & External communication. There should

ensure proper communication takes place right from the receipt

of enquiry till the goods are on board.

8.62 Order enquiry

In D C Mills order enquiry is made through trade fairs, through

Export, through Promotion councils etc. Samples are developed

according to the buyer’s requirement and forwarded along with

prices. Sample Department takes care of the same.

On acceptance, the buyer forwards an order sheet containing

details as to the item required, quantity, price, and terms of

payment and with Ship date as required.

The company is now going to introduce their washable products

which are produced in their unit at Pathirapally in the local market

taking into account the acceptance of those products in India.

A new marketing department is created by them for this purpose.

Now they are launching advertisements for those products.

8.63 Process taking place on the receipt of the order

RECEIPT OF ORDER

ORDER REVIEW

ORDER ACCEPTANCE-PROFORMA INVOICE

RECEIPT OF L/C PROGRAMME SHEET

PRE-SHIPMENT SHIPMENT PLAN

DOCUMENTS

POST-SHIPMENT PACKING INSTRUCTIONS

DOCUMENTS

DESPATCH OF GOODS

On the receipt of order, the order sheet is reviewed for quantity

and ship date. Once the order is reviewed, the company

expresses its acceptance by forwarding Proforma Invoice, wherein

all details regarding the items to be produced, price, ship date,

etc are given. This enables the buyer to open Letter of Credit.

8.64 Terms of payment

The various terms of payment, which the company accepts by

mutual consent are as follows:

Telegraphic Transfer

Cash against document

Letter of Credit

8.65 Terms of shipping

The terms for shipment include:

Free on Board

Cost & Freight

Cost, Insurance & Freight

8.66 Work order

This is an internal document, which the department issues to the Production unit. After giving this production facility like dyeing, weaving, stenciling etc are planned in advance.

8.67 Special instructions and packing instructions

Special instruction is also an internal document, which contains

details as to the quality parameters of a particular item, as

required by the buyer. Packing instruction which also falls under

the internal document, is issued to the production & packing

department, where details of tag & label, stickers if any is given

along with the packing details.

8.68 Invoice

It covers the value of goods, port of discharge, final destination,

terms of payment etc.

8.69 Packing list

It covers packing details of the goods i.e. number of cartons,

number of pieces packed per carton, net weight, gross weight,

volume etc.

8.610 Despatch of goods

Once the goods are inspected and packed, they are ready for

dispatch and arrangements are made for the same.

The goods that are dispatched can be of two types:

1.FCL – Full Load Container

2.LCL - Low Container Load

8.7 FINANCE DEPARTMENT

This department deals with finance and its management. And also

keeps all the accounts of the company. Finance is the life blood of

the every company. So its management merits special

importance. For the effective functioning of an organization, the

primary necessity needed is adequate finance. Proper allocation

of finance at right time is necessary for the achievement of

company goals and objectives.

8.71 Departmental structure

G M (F&A)

Manager (F&A)

8.72 Activities of the finance department

Sources of finance

Sales realization

Credit from supplier

Short term and long term loans

Ploughing back of profits

Maintenance of records

The company using mercantile system for the maintenance

of records. The company preparing cash account all other

statutory accounts.

Depreciation policy

The company is following written down value of

depreciation.

Treasury Manager

Accounts Officer

Accounts Asst.

Accounts Asst.

Accounts Asst.

Accounts Asst.

Accounts Manager

Manager Costing

Manager

(Forex)

Accounts Asst.

Accounts Asst.

Budgets

The company is preparing budgets annually to forecast the expenses and revenues.

Working capital management

Stock management, Debtors management, Creditors

management, cash management etc are made by the

company as a part of working capital management and

using all details after assessing the working capital need of

the company.

Provision for acquisition of assets

Company is not taking much effort to make provision for

acquiring new assets. The reason is that the owner of the

company is using major part of the profit for company’s

expansion and development.

Credit policy

The company is providing maximum of one month credit to

its buyers and they are getting credit periods of one week to

one month from its suppliers. Some suppliers are needed to

be paid immediately.

Ratio analysis

The company is making ratio analysis to assess its

operational efficiency. Turn over ratio, current ratio etc are

analyzed every year.

8.73 Functions of finance department

Financial analysis, planning and control of finance.

Management of current assets.

Identification of sources and use of funds.

Preparation of financial statement.

8.8 INFORMATION TECHNOLOGY DEPARTMENT

DC MILLS are fully computerized and all its transactions are

recorded through computers. DC MILLS have developed a

separate ERP program for its operation. Once the order is

entered, it will go to the purchase department, stores, finance and

partially to the production department. For accounting function

visual basics are used for programming. DBMS is also there in the

organization on an SQL server. In the company there are 60

computers inter connected as WAN with OFC technology.

8.81 Functions of IT department

Co- ordination of technology throughout organization.

Assist departments in applying technology to meet

their respective needs.

Purchase equipment.

Concept planning.

Install, support and maintain systems and standard

technologies

9. SWOT ANALYSIS

Strengths

It is the first ISO 9002 certificate holder for coir products

in India

First in the world for PVC backed coir products.

Keeping quality products by using good and standard raw

materials.

Well equipped personnel for effective running of the

business

From the year 2000 onwards, the company has been

honored with the best coir exporter by the Government of

India.

Customer satisfaction is the key word for the

organization.

The company has its own warehouse in foreign countries

Company owns most modern machinery

Effective organizational planning

Company has a high future growth.

Weaknesses

Some of the raw materials like glue and some molding

machines are imported. The timely availability of these

materials affects production.

The costs of these materials are costly.

No measure to recycle the wastage.

There is no canteen facility for the employees.

Opportunities

Being an export company it can enter into foreign market.

Company has enough facility for future expansion.

The company can tap newer markets because the company

has its own potential.

Company is having a good project and implementation

department. This will have the capacity to produce new and

variety products.

Availability of raw materials.

Threats

Rigid taxation policy acts as a hinder to enter into foreign

market.

Tough competition.

Increase in the price of the raw materials.

The trade union intervention will occur as a threat.

Strikes in the coir sector affect the working of the company.

Rubberized coir from Sri Lanka and coir geo textiles from

Vietnam, cheaper coir products from Thailand, Philippines

have taken a part of the export share held by Indian coir

products.

10. OBSERVATIONS:

Major observations are:

DC MILLS is a 100% exporting company. Company is

committed to a process of continuous improvement. It is

market leader of coir exports in India.

The company has the most modern machine for extruding

yarns and multi-operational coating machine for the square

pyramid and bubble backing.

DC MILLS is an example of efficient management. All the

functions are fully computerized.

Company has a good recruitment and selection policy

through which it possess a talented and enthusiastic work

force in the administration as well as operative level.

11.SUGGESTIONS:

Try to produce all raw materials in India.

It will be better for the company to procure some of the raw

materials within the country which will reduce the cost of

production.

It is better for the company to enter into local market.

Entering into the local market helps to capture the Indian

market along with the foreign market.

Developing a recycling plant.

Wastage is part of production. That cannot be eliminated but

can be reduced or can be recycled.

12. CONCLUSION

Being a 100 % export oriented unit D C Mills is now in the

position of the top exporter of coir products in India. They are

having a good reputation in the coir industry by making a major

contribution to the industry. Their constant drive to upgrade

quality standards in all areas of activity and all products has

enabled the company to acquire a dominant position in the

foreign market.

The company is now thinking to launch their products in the local

market by keeping in view the benefits they will get by their

entrance in the local market. Company also have a high future

growth and maintains good quality on the products they are

manufacturing.

13. BIBLIOGRAPHY

1. Kothari C.R, Research Methodology, Vishva Prakashan

Pvt.Ltd.New Delhi.

2. Pandey I.M, Financial Management, Vikas Publications

House, 7th Edition.

www.dcmills.com

www.coirboard.com

www.coirindia.com

www.coirkerala.com