AN ORGANISATION STUDY AT Kansai Nerolac Paints Ltd Chennai A PROJECT REPORT SUBMITTED BY Alex Asirvatham R (Reg. No 2887024) IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION OF MANONMANIAM SUNDARANAR UNIVERSITY, TIRUNELVELI DEPARTMENT OF MANAGEMENT STUDIES
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AN ORGANISATION STUDY
AT
Kansai Nerolac Paints LtdChennai
A PROJECT REPORT SUBMITTED BY
Alex Asirvatham R
(Reg. No 2887024)
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATIONOF MANONMANIAM SUNDARANAR UNIVERSITY,
TIRUNELVELI
DEPARTMENT OF MANAGEMENT STUDIESNESAMONY MEMORIAL CHRISTIAN COLLEGE, MARTHANDAM,
KANYAKUMARI DISTRICT2008-2010
CERTIFICATE
This is to certify that the project study entitled “AN
ORGANISATIONAL STUDY AT KANSAI NEROLAC PAINTS LTD,
CHENNAI” is a bonafide work done by ALEX ASIRVATHAM R, Reg.
No.2887024 and submitted in partial fulfillment of the award of degree in
Master of business Administration, before Manonmaniam Sundaranar
University, Tirunelveli.
Faculty Guide Head of the Department
External Guide
1.
2.
DECLARATION
I Alex Asirvatham R hereby declare that the project “Organizational
Study at Kansai Nerolac Paints Ltd, Chennai” submitted in partial fulfillment of the
award of the Master of Business Administration Degree of the Manonmaniam
Sundaranar University, Tirunelveli, has been carried out by me under the guidance and
supervision of Prof. Shini MBA., faculty of MBA Department, Nesamony Memorial
Christian College, Marthandam.
It has also not being submitted by me or anybody for the award of any
other degree or diploma of this or any other institution earlier.
Marthandam
Date: ALEX ASIRVATHAM R
ACKNOWLEDGEMENT
First of all, I thank Lord Almighty for his abundant blessings bestowed
upon me for the successful completion of my organization study.
I am extremely grateful to my beloved parents for their excellent
encouragement and support without which I would be what I am today.
I extend my heartfelt thanks to Prof C.T.SAM LUTHER, Head of
the Department, for encouraging me to go for this organization study.
I would like to extend my heartfelt gratitude to Mr. Rajasekaran HR
Manager, Mr. Anandh Babu HR, and Mr. Sugumar HR, for guiding me
throughout the study and sharing his valuable time for providing information
and guidance for my endeavor. I would like to thank all the department heads
and management staff who helped me directly or indirectly for getting
information about each department.
I express my thanks to my friends for encouraging and supporting in
every part of my career.
ALEX ASIRVATHAM R
CONTENTCONTENT
S.No.S.No. TopicTopic Page No.Page No.
11 IntroductionIntroduction
22 Objectives of the studyObjectives of the study
33 Methodology Methodology
44 Scope of the studyScope of the study
55 Industry ProfileIndustry Profile
66 Company ProfileCompany Profile
77 Organization StructureOrganization Structure
88 Material ControlMaterial Control
99 Sales & Distribution ControlSales & Distribution Control
1010 Review of Annual AccountsReview of Annual Accounts
1111 SWOT AnalysisSWOT Analysis
1212 Corporate Social ResponsibilityCorporate Social Responsibility
1313 Future PlansFuture Plans
1414 ConclusionConclusion
INTRODUCTION
Colour has fascinated culture throughout history, every age
and every region has produced dyes and pigment depending on the
available resources. Colour has been with us for more than 20,000 years.
Evidence survives in early cave paintings and the ancient Chinese are
considered to have brought its manufacture and use to a state of
perfection tens of thousands of years ago.
OBJECTIVES OF THE STUDY
The objectives of the study are:
To familiarize with business organization.
Getting practical experience regarding the organizational function.
To learn about the policies and functions of the organization.
To understand the culture in the organization and its effect on employees.
To get industrial exposure and experience.
To understand the production and marketing methods.
METHODOLOGY
This study was undertaken by visiting the Plant location of Kansai
Nerolac Paints Limited, Perungudi, Chennai and spanned over a period of one
month. The information was collected by interacting and interviewing with the
concerned personnel of various functional departments.
The methodology used for the study is through the collection of
Primary data is collected through direct observation and live
discussion with the managers and the staff.
Secondary data is collected annual reports, business journals,
existing records and also from the website of the company.
SCOPE OF THE STUDY
The study is mainly based on the details collected from each department.
It provides a better understanding at functional level of each department i.e.
Purchase, materials, production, marketing, finance and human resource
management. Each and every activities of the company is studied very carefully
with the data available.
INDUSTRIAL PROFILE
The Indian paint industry is an Rs 49 billion sector. The demand for
paints is relatively price-elastic but is linked to the industrial and economical
growth. The per capita consumption of paints in India is very low at 0.5 kg per
annum if compared with 4 kgs in the South East Asian nations and 22 kgs in
developed countries. The global average per capita consumption is 15 kg.
In India the organised sector controls 70 percent of the total market with
the remaining 30 percent being in the hands of nearly 2000 small-scale units. In
India the industrial paint segment accounts for 30 percent of the paint market
while the decorative paint segment accounts for 70 per cent of paints sold in
India.
In most developed countries, the ratio of decorative paints vis-Ã -vis
industrial paints is around 50:50. All the industry majors have a vast dealership
network and are required to maintain high inventory levels. Most of the paint
leaders have technical tie-ups with global paint leaders.
Sector comments
Paint is a mixture of four elements - solvents, binders, pigments and
additives. Solvents give the paint a liquid flow while the binder binds it to the
surface. Pigments impart colour and opacity to the paint and the additives give it
special resistance properties.
Sector trends
The recession in the construction and automobile sector had thrown in shades of
grey across the Industry spectrum, but the revival in these sectors is cause for
cheer for the paint industry as well. The balance sheets of the industry majors
are now painted with bright colours.
Sector specifics
On product lines, paints can be differentiated into decorative or
architectural paints and industrial paints. While the former caters to the housing
sector, the automotive segment is a major consumer of the latter. Decorative
paints can further be classified into premium, medium and distemper segments.
Premium decorative paints are acrylic emulsions used mostly in the metros. The
medium range consists of enamels, popular in smaller cities and towns.
Distempers are economy products demanded in the suburban and rural markets.
Nearly 20 per cent of all decorative paints sold in India are distempers and it is
here that the unorganised sector has dominance. Industrial paints include
powder coatings, high performance coating and automotive and marine paints.
But two-thirds of the industrial paints produced in the country are automotive
paints.
COMPANY PROFILE
Kansai Nerolac Paints Limited embarked their journey in 1920 as
Gahagan Paints and Varnish Co. Ltd. at Lower Parel in Bombay. In 1930, three
British companies merged to formulate Lead Industries Group Ltd. In 1933,
Lead Industries Group Ltd. acquired entire share capital of Gahagan Paints in
1933 and thus, Goodlass Wall (India) Ltd. was born.
Subsequently, by 1946, Goodlass Wall (India) Ltd. was known as
Goodlass Wall Pvt. Ltd. In 1957, Goodlass Wall Pvt. Ltd. grew popular as
Goodlass Nerolac Paints (Pvt.) Ltd. Also, it went public in the same year and
established itself as Goodlass Nerolac Paints Ltd.
In 1976, Goodlass Nerolac Paints Ltd. became a part of the Tata Forbes
Group on acquisition of a part of the foreign shareholdings by Forbes Gokak.
In 1983, Goodlass Nerolac Paints Ltd. strengthened itself by entering in
technical collaboration agreements with Kansai Paint Co. Ltd., Japan and Nihon
Tokushu Toryo Co. Ltd., Japan.
In 1986, Goodlass Nerolac Paints Ltd. turned into a joint venture of the
Tata Forbes and the Kansai Paint Co. Ltd., with the latter acquiring 36% of its
share capital.
In 1999, Kansai Paint Company Ltd., Japan took over the entire stake of
Tata Forbes group and thus GNP became a wholly owned subsidiary of Kansai
Paint Company Ltd.
In 2006, on the 11th of July, Goodlass Nerolac Paints Ltd. name has been
changed to Kansai Nerolac Paints Ltd.
During the journey of continuous performance excellence, we have
entered in to many technical collaborations with other industry leaders such as
E.I. Du-Pont de Nemours & Company Inc., USA and Oshima Kogya Company
Ltd., Japan for our different products.
Our incessant journey of successes will go on backed by our present
human asset of over 2000 professionals and a sales turnover of Rs. 1484 crores
KNPL are the second largest coating company in India with a market
share of over 20%. We are the market leader in industrial / automotive segment
supplying over 90% of the OEM requirements. We are the leader in powder
coatings.
NATURE OF PRODUCTS
Vision
KNP is gaining from the positive changes triggered by the fast growing
economy in India. The ‘India shining’ story is likely to continue in the years to
come. Conscious of our responsibility towards the society, we stand committed
to invest in neighborhood communities, more and more and improve the quality
of life and inculcate a sense of well-being amongst the people, settled around.
The Corporate Vision of CSR goes like this, “To behave fairly &
responsibly contributing to sustainable economic development and improving
the quality of life in the neighborhood, in the process maximizing stakeholders’
value.”
• Accountable for impact on stakeholders – work force, their
family, the local community and society at large
• Improving the quality of life of the neighborhood in ways good
for development.
Mission
“To contribute positively to the development of the society, by acting as a
good neighbor, considerate of others, playing the role of a good corporate
citizen with passion and compassion.”
Milestones
During FY 2008, KNPL group has sustained Zero lost time injury. ISO
14001, OHSAS 18001 re-certification
ORGANIZATIOAL STRUCTURE
HR DEPARTMENT
FUNCTION OF HR DEPARTMENT
To maintain good relationship with the employees.
To look into the welfare of the employees.
To maintain leave register.
Attendance making.
Overtime confirmation.
Recruiting new staff.
Giving training
PURCHASE DEPARTMENT
HR OFFICERS
HR MANAGER
OFFICE ASSISTANT
T&D OFFICER
FUNCTION OF PURCHASE DEPARTMENT
Placing order
Inviting quotation
Correspondents
COMMERCIAL MANAGER
MANAGER
PURCHASE
JUNIOR MANAGER
PURCHASE
OFFICE ASSISTANTSOFFICE ASSISTANTS
JUNIOR EXECUTIVE
OFFICER
FINANCE DEPARTMENT
FUNCTIONS OF FINANCE DEPARTMENT
UNIT HEAD
FINANANCE MANAGER
ACCOUNTANT
ASSISTANT
SUPERINDENTENT
OFFICE ASSISTANT
Financial forecasting and planning.
Acquisitions of funds.
Investment of funds.
Maintaining proper liquidity.
Assigning the chief accounts officer and others.
Accounting of all annual accounts and other periodical report and
statement.
Checking of wages and salaries.
Regular payment of stationary dues like provident fund, sales tax etc.
Furnishing necessary records relating to finance cash to managing
director or chief accountant officer.
STORES DEPARTMENT
STORE
SUPERINDENTENT
DEPARTMENT
MANAGER
STORE KEEPER
ASSISTANT
STORE KEEPER
HELPERS
ATTENDERS
FUNCTIONS OF STORES DEPARTMENT
To store the raw materials for the different departments.
To prepare the purchase order.
To prepare the stores records as Bin card and Karade – X card.
General store is the department for storing the raw materials. The
materials are collected as per the order made by the department, which is
known as the purchase order.
QUALITY CONTROL DEPARTMENT
FUNCTIONS OF QUALITY CONTROL DEPARTMENT
To test the quality of raw materials
To check whether the product involves the right proportion of raw
materials.
To maintain the quality of the products.
WELFARE FACILITIES PROVIDED BY THE COMPANY
MANAGER
CHEMIST
TESTER
HELPERS
SAMPLE BOYS
There were several welfare measures provided by the company. They
were provided with the following benefits:
Uniform
Footwear allowances
Washing soap & toilet soap
Turkey towel
Medical reimbursement
Company scholarship
Tour programs
Factory day complement
Special advances
MATERIAL CONTROL
Material control is done by a proper planning. Kansai Nerolac depends
mainly on the planning of the material planning. Another important aspect is
that the centralized purchase of the materials. Rather than buying the materials
for different sources, it is better to purchase from a single vendor, and it is
profitable. The packaging is done locally i.e. in the plant itself so as to reduce
the moving cost and less time.
Another aspect of the material control is done accurately by SAP. The
whole organization is familiar SAP and it accelerates the performance of the
whole unit. A report prepared by SAP is ZMSR report in which the current
stock, last month produced, moving average reports are produced. It helps in
foreseeing the planning and also useful to review the performance of the month.
Purchase policy
The materials to be purchased have to get the approval of the
Research & Development inorder to make a purchase order. And then the
materials are purchased.
In case of scarcity of raw materials substitute materials are also used to make
production. The substitute raw materials have two grades. The 1st material and
the 2nd material. The first material is considered as the low grade (2702) and the
second material is to be the high grade (2356).
Types of purchase
The purchase of raw materials is done only with the well reputed
organization. Everything which is purchased is made by only bulk ordering. The
important material to be purchased for Kansai Nerolac is the Mineral Turbine
oil. It is purchased bulk from BPL (Bharat Petroleum Corporation). In case a
purchase is done outside it should not exceed the period of time. And if it
exceeds the time limit the penalty certificate is issued. Nerolac has a strict
policy on these areas.
Credit Policy
Kansai Nerolac’s credit policy is based on its vendors. Materials are
purchased from different vendors. Normally Nerolac gives credit for the local
vendors for a period of 30days. And this policy differs to the outside vendors.
The main vendor for Nerolac is BPC. And the company has an agreement with
BPC i.e. if the purchase is done between 1-15 days the payment date is 20 and if
the purchase if done between 15-30 days the payment date is 3. Some other
payments for credit for the new vendors are done by negotiations.
Inventory Control
The inventory of Kansai Nerolac is playing an important role in the
organization. The inventory control is mainly based on the requirements of
materials. As it is mentioned above there are two premier products i.e. the
Industrial paints and the Decorative paints. These two raw materials has to be
controlled separately. Industrial paints are kept separately and the decorative
paints to be kept separately. The materials of decorative product can be used in
industrial products in case of scarcity and changes made accordingly. But the
materials of industrial cannot be used in decorative section.
Stores
Kansai Nerolac has 63 depots all over India and 9 factories. The sales
from the stores department are done by certain procedures. Sales request is
given to the stores and also the requirement is to be specified. Then the request
is consolidated by the Head Office. The order, request and consolidated is
updated in the systems and it acts according to the directions given by the Head
Office.
Purchase department asks the stores department about the moving items
and the non moving items in order to make the purchase order for the moving
item. The moving batch is the successful one in the market and the non moving
items are failure batch in the market. According to the information of the
moving and non moving items the purchase order is made for the material. So
there is a link between the purchase department and the stores department. By
having a link with such department the planning, production department focuses
on the business effectively. While making the purchase order the receipts are
maintained. The receipts consist of serial no, date, v.no, time in and time out.
While the materials are to be unloaded into the company, the materials
have to get the QC test certificate. If the QC test certificate is positive the
materials are accepted and it is unloaded from the trucks. And then the store
department gives the out pass receipt with reference to the entry pass.
If the QC test certificate is negative the materials are not accepted and it
is returned back in the initial stage itself. The entry pass and the out pass are
maintained clearly when a vehicle is in and out of the plant.
Each vendor’s material has its unique code number. And each order has
different code numbers. The orders are purchase order [4100], STO (Stock
Transfer Order) [700] and local purchase [460].
SALES AND DISTRIBUTION CONTROL
Kansai Nerolac has a unique indigenous export and sales. The sale is
mainly to the Industrial coatings i.e. the automobiles industry and some other
industry. The sales and the distribution controls are as follows.
Credit Policy
Kansai Nerolac’s credit policy is based on its vendors. Materials are
purchased from different vendors. Normally Nerolac gives credit for the local
vendors for a period of 30days. And this policy differs to the outside vendors.
The main vendor for Nerolac is BPC. And the company has an agreement with
BPC i.e. if the purchase is done between 1-15 days the payment date is 20 and if
the purchase if done between 15-30 days the payment date is 3. Some other
payments for credit for the new vendors are done by negotiations.
Distribution control
The distribution of Kansai Nerolac is playing an important role in the
organization. The distribution control is mainly based on the requirements of
products. As it is mentioned above there are two premier products i.e. the
Industrial paints and the Decorative paints. These two products have to be
controlled separately. Industrial paints are kept separately and the decorative
paints to be kept separately. The product of decorative product can be used in
industrial products in case of scarcity and changes made accordingly. But the
products of industrial cannot be used in decorative section.
Kansai Nerolac has 63 depots all over India and 9 factories. The sales
from the stores department are done by certain procedures. Sales request is
given to the stores and also the requirement is to be specified. Then the request
is consolidated by the Head Office. The order, request and consolidated is
updated in the systems and it acts according to the directions given by the Head
Office.
The sales target for the month period is allotted by the Head Office for
every month. And the marketing executives act accordingly.