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Introduction
Introduction to Study
An Organization refers to consciously coordinated social unit composed of two or more
people that functions on relatively continuous basis to achieve a goal.
Organization study is “the examination of how individuals construct organizational
structures, processes and practices and how these, in turn shape social relations and create
institutions that ultimately influence people.
The wood industry is one of the industries with great potential and it is mainly concerned
with furniture, plywood, hardboard, decorative wood, densified laminates, wood floorings,
Building material, material for interior decoration, ship building, automobile
manufacturing, and refrigerator etc.
The Western India Plywoods is one of the pioneers in Plywood and Hardboard Industries
in India. They have increased their product range from plywoods to all kinds of wood
products. The products of WIP are high in demand since their inception, and it is all due to
the stringent quality controls and reputation in the market. The purpose of the study is to
get an exposure about the industry and its functioning and to know how it feels to be a part
of an organization.
Scope of the study
This study is aimed at understanding the functioning of different departments of the
organization. It provides a better understanding about each functional department of the
organization and how they cooperate and coordinate with other departments to achieve the
organizational goals. To obtain information regarding strength, weakness, opportunity and
threats of the organization and to gather information about the market position and
financial position as well as the employees opinion about the organization. The study is
limited to ten departments of the organization and to the details that could be collected
during the period of study.
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Objective of the Study
To know about the basic functioning of an organization.
To get practical and theoretical knowledge about various departments of an
organization.
To study about the organizational culture and its influence on employees.
To learn about the mission, vision, policies and procedures of the organization.
To understand the strength, weakness, opportunity and threats of the organization.
To study the relationship between management, employees and customers.
Methodology
The methodology of study involves collection of data through primary and secondary
sources and analysis of activities of individuals by the means of constant observation and
enquiry. This task was carried out by building formal and informal relationship with the
staff members of the organization.
Primary Data. Data was collected through formal and informal discussion and
exchange of views with the company officials and employees. Technical data was collected
from the technicians and supervisors of the respective domains.
Secondary Data. The sources of secondary data are annual reports, qualitymanuals, periodicals, Company Newsletters, Organizational documents and Internet.
Limitations of the Study
The information collected was mainly from the employees under their busy schedule and
are subject to personal bias. Further much of the data required for the purpose of study
were drawn from secondary sources, so the project cannot be free from the defects of
secondary data. The data collected are subject to the limitations and are not available for
public scrutiny. It was not possible to interview the top officials of the firm due to their
busy schedules and this was a setback to the study because they are the people who have
an overall idea about the organization, their help could have improved the quality of
information. The time given was sufficient but if more time was given then it would be
helpful to blend in the organization and feel the organization culture.
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CHAPTER -TWO
ANALYSIS OF BUSINESSENVIRONMENT
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Industry Profile and Analysis
Trees are the nature’s greatest gift to mankind. They provide us with shelter, fuel,
medicines, tools, timber and much more. Nature develops trees as a mother brings up
children, making each one a separate individual. It is an amazing sight to see the natural
abstract rhythm of line, colour and texture in wood. Nothing from nature indoors gives
such a long lasting enjoyment as the natural beauty of wood. Flowers fade, but the beauty
of decorative wood is enhanced by age.
Global Scenario . Competition is keen in the plywood industry. Plywood
manufacturers and exporters are suffering from decreasing profit margins. Many
companies strive to reduce their cost of production and increase efficiency. Some relocate
their manufacturing operations to other areas with lower operation cost, such as theChinese mainland. On the other hand, foreign manufacturers are taking steps to strengthen
their domestic production through product specialisation.
To stay globally competitive, Hong Kong plywood manufacturers strive to reduce costs,
initiate quality control, improve design concepts and capability, and upgrade management
skills and increase marketing and sales effectiveness. Many manufacturers have obtained
or are applying for ISO 9000/9002 certification.
Hong Kong's plywood makers also started to develop their own brands. Plywood
Manufacturers also become more careful about the choice of raw materials to meet
international standards, such as compliance with legal or other environmental requirements
in their target markets. China is the largest plywood exporter to many countries, including
the US and Japan. The total plywood exports of China exceeded US$6,683 million in 2002,
with the US being its largest market. Guangdong province is the major manufacturing
centre of plywood on the Chinese mainland. Apart from Hong Kong, manufacturers from
Taiwan and even the US have also set up production plants on the mainland. In China,
most of the production is on an OEM basis. China also offers a huge potential market for plywood maker
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Indian Scenario . The Indian plywood industry owes its origin to the development
of tea industry in the state of Assam, West Bengal, Kerala and the difficulty created by the
two World wars in the way of imports of tea chest plywood. Except for the setbacks
suffered in the post war period, the plywood sector was booming since 1947.
In 1947 India was a net importer of plywood, mainly tea chest plywood of approximately
Rs.2 crore per annum. During 1992 India manufactured 150 million sq. meters of plywood
types that earned approximately Rs.1000 crore. The industry has grown both in small-scale,
medium and large scale sector.
The plywood industry consumes about 15 million m3 timbers of primary and secondary
species. In fact the plywood industry has provided main outlet for the maximum utilization
of secondary species of timber there by making available contribution in the forest
economy. Later, the plywood industry aided for the development of farm forestry sector plantation, which benefits the ordinary farmers in the country.
Industry Analysis
Industry Key Players
Figure 1:
Top players in India
Adapted from http://www.sourcinghardware.net/shrd/industry_report.html
14% 8%
3.50%
1.50%
1%
1%
70%
Competitor Analysis
Greenply Centuryply Merino Archidply Uniply WIP Others
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CHAPTER-THREE
ORGANIZATIONAL ANALYSIS
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Organizational Analaysis
Overview of the Organization
Background and History . Western India Plywood Ltd, is the largest integrated
wood-processing complex in the country as well as in southern Asia. It was established in
1945 and it started manufacture of sawn timberland plywood on a modest scale with a few
indigenous and lend lease machinery. The founder of Western India Plywood was Mr. A.K
Kunhiman Haji, Later he handed over the company to his son in law Mr. A.K. Kaderkutty
Sahib. The Company made progress through the years and expanded to its present status.
The company grew over the next two decades into a well integrated wood processing unit
with finely tuned skill in new product development and manufacturing. WIP is an ISO
9001:2000 certified company.
Plywood manufacturing was stepped up steadily by addition of new machinery, mostly
imported. They also diversified from the production of the Tea-Chests and Commercial
plywood to manufacture of decorative plywood, block board, flush door, shuttering
plywood, and aircraft plywood etc. The company also installed its synthetic resin unit in
1959 with a capacity of 200 tonnes. The hard board manufactured by the company found
ready acceptance in the market so that the company decided on an expansion project in
1977 to increase the output of the hardboard to 24700 tons per year. The expansion projectwas completed in 1980. Recently in 1990, the company added pre finished hard board and
plywood to its impressive product range. A state of the art production line imported from
Italy utilizes technology from the market leaders in the field of U.V curable paints
TREFFERT of Germany. Process employed in plant is totally environment friendly and
does not involve any harmful emission.
The company is the first in the country to put up a plant for irradiating wood in
collaboration with Bhabha Atomic Research Centre, Mumbai in order to aggregate the low-
grade timber.
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Company Mission, Vision and Values
Vision . Continue to remain the best plywood panel corporation in India with agrowth in allied areas.
Mission
To provide utmost satisfaction to the the consumer through best quality andcustomer care.
To continuously upgrade the product through innovation and convergence of new
technology and to produce the best quality product.
To respect the dignity of all employees and together to become instrumental in the
development of the country while protecting the environment.
To utilizes the surpluses for the welfare of employees and the society at large.
To safeguard and enhance shareholders values.
Objective
To promote the quality of products.
To attain self reliance.
To serve the national economy.
To build the reputation of Western India Plywoods Ltd.
To maintain the brand loyalty of its customers.
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Compreg Slats Customised Densified Wood Used in Railway Coaches
Densified Moulded Densified Wood Used in Railway Coaches,
Moulded Seats Auditoriums & Restaurants etc.
WESTIND PLY BWR &BWP grade Used for boat building, Concrete
Plywood Shuttering, Furniture, Paneling etc
HARDBOARDS Wooden Board made from Extensively used in automobile
crushed wood Industry, furniture elements, Clock
frames, Photo frames etc
Adapted from 69 th Annual Report (2103-2014) of WIP
Product Mix
Figure 2Pie Chart representation of product mix
Adapted from 69 th Annual Report (2103-2014) of WIP
57.07%18.06%
17.92%
2.45%
2%2.06%
Product Mix
Hardboard Plywood Compreg
PreCompressed Board PFB Furniture
Other Miscellaneous Sales
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WIP’s list of first in the country
First to make irradiated wood.
First to make aircraft plywood.
First to make synthetic resin adhesive bonded plywood using hot pressingtechniques.
First to make high pressure industrial laminates.
First to make quality hardboard way back in 1959-60.
First to manufacture Di Ally phthalate moulding powder.
First to manufacture GI – Plywood-GI sandwich panel for anechoic chamber.
First to make pre- finished Plywood’s and hardboards using UV cured surfacefinishing techniques.
First to develop weather proof, marine and fire retardant hardboards.
First to get ISO 9000 certification for hardboard and prefinished boards.
The company has earned special appreciation from leading industries in theautomotive sector, Footwear sector, ISRO, BARC, Indian Railways etc.
Area of Operation
National
Kerala Karnataka
Tamilnadu
Andhra Pradesh
Maharashtra
Uttar Pradesh
Delhi
International
USA
EUROPE
AFRICA
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CHINA
JAPAN
KOREA
SRI LANKA
MIDDLE EAST
Awards, Recognitions and certifications
National Association for Applications of Radio Isotopes and Radiations inIndustry (NAARI) Award -1984
Chemical and Allied Products Export Promotion Council India(CAPEXIL)Awards:
o CAPEXIL Special Export Award 1975-76.
o CAPEXIL Certificate of Merit 1976-77.
o CAPEXIL Special Export Award 1977-78.
o CAPEXIL Special Export Report 1982-84.
o CAPEXIL Special Export Report 1984-85.
o CAPEXIL Special Export Report 1985-86.
o CAPEXIL Certificate of Merit 1985-86.
o CAPEXIL Special Export Award 1986-90.
o CAPEXIL Special Export Award 2002-03. ISO 9002 Certified Company for Hardboard & Prefinished Boards.
Business Performances . WIP is the fourth biggest plywood factory in Asia. The
factory is situated in Kannur district in Kerala state. WIP collects timber and firewood
through import from Malaysia, Africa, Burma, Russia etc. and local purchase. Thus it is
being processed at the factory and converted into various finished products such as
different varieties of plywood, hardboard, furniture, wood floor etc. WIP exports 80% of
total production to Germany, USA, Canada, Italy, Australia, Japan, Sweden, Papua New
Guinea Middle East and Gulf Countries regularly.
The rest of 20% is being through retail outlets and Company’s sales depots throughout
the country WIP Ltd., the largest integrated wood processing complex in the country, was
incorporated in 1945 immediately after second world war.
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The company has three divisions mainly i.e Hardboard, Plywood and Furniture divisions
with an employee strength of 1300 including 87 office staff members. Now the company
is one the leading in plywood and Hardboard industries in India and is supplying to
international market also.
Hardboard. A Hardboard plant with an installed capacity of 12.5 tons was set up
in 1959- 60 with West German technical collaboration. Today WIP’s hardboard division is
the market leader in hardboards with state of the art production lines manufacturing over
120 tones today. WIP’s hardboard like its plywood products, commands a premium in the
market, due to its intrinsic quality which is recognized by loyal customers.
The product range of Hardboards include
o Standard Hardboard
o Oil Tempered Hardboard
o Perforated Hardboard
Plywood. Plywood is the first type of engineered multipurpose wood form that was
invented. It is made from slices of wood shots called as veneer or piles. The veneer layers
are starched together and pressed under strong adhesives and heat. Plywood is preferred
over ordinary wood because it having good stability and good resistance to change.
Strategic plans and Future Programmes . WIP has a built a reputation and
goodwill in the market which they are striving hard to maintain it .They are constantly
satisfying the customer needs and satisfaction through constant improvement in quality of
products and by doing in house Research and Development to ensure 100% utilization of
wood.Here in WIP the Wood being the major raw material, they give utmost importanceto procurement of timber for the purpose of manufacture of plywood and Hardboard as
well as furniture. The company is looking forward to such Joint Ventures in the future as a
part of expansion and growth in international market.
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The Board of Directors are at the top level of the corporate structure where the long term
plans are formulated and policies are framed. They are followed by Managing Directors
and then by the various Departmental Heads. Each department is under the control of the
departmental heads and they are followed by the Managers & Executives.
Business and Departmental Structure . WIP has the following functional
departments for the ease of carrying out the business process.
Production Department
Human Resource Department
Finance Department
Purchase Department Export Import Department
Sales Department
Marketing Department
Timber Department
Central Excise Department
Research & Development Department
Stores Department
EDP Department
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Functional Analysis
Production Department
GENERAL MANAGER
PRODUCTION WORKS MANAGER MANAGER
SHIFT IN CHARGE
SUPERVISOR
OPERATOR
WORKER
Figure 4:Production Departmental structure
Adapted from Primary Source
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Production involves conversion of rawmaterial into finished products/goods.It can briefly
explained as follows
Input Conversion process Output
In WIP the raw material that are used to the output is steam,wood,chemichals. After
introducing these raw materials to a series of process the finished goods are obtained.The
wood that is required for production is acquired from both local as well as international
markets.The company is mainly having 5 major plants to produce 5 different products.
They are Hardboard, Plywood, Compreg, Furniture and Precompressed boards.
Raw Materials . The major raw materials used by the company are Wood, Steam
and Chemicals. Wood constitutes the majority of the raw material consumed.Wood. Wood is mainly imported by WIP from Malaysia, South Africa, Sweden,
Myanmar and other South Asian countries. The woods used for general purpose are
Kalpine, Mango, Panda Pine, Eucalyptus, White Cedar, Neeli, Swiss Pine, Kussia, Pali,
Beech etc. For furniture use Teak, Rosewood, Mahogany, Pad Oak etc are used.
Steam. Steam energy is used to operate the machines. They are generated in huge
boilers and supplied through pipelines to different manufacturing plants inside the
company. Boilers need fuel to produce steam and based on this the boilers are classified as
follows:
Saw Dust Boiler
Fire Wood Boiler
Agricultural Boiler
Fuel Bed Combustion Boiler
Chemicals Various chemicals and substitutes are used for manufacturing of plywood,
Hardboards etc.Some of them are Formaldehyde, Acrylate, Phenol Formaldehyde etc.
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Plywood. Plywood is made up of piles of wood wafers stacked together and glued.These layers
of wood are known as veneers. They can be bent to any shape.
Production process of Plywood.
LOGYARD
CROSS CUTTING
BOILING
PEELING
CLIPPER
GLUING
FREEPRESS & HOTPRESS
TRIMMING & SANDING
FINISHING
Figure 5
Plywood production process
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
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Logyard . It is the area where the Wooden logs are kept. In WIP’s log yard consists
of a part of Valapattanam River and the logs are allowed to be soaked in water. It is actually
what we call as a warehouse of a company.
Cross Cutting. The Wood is transported from the logyard to the Cross Cutting
section for cutting into pieces using a chain saw and making it in sizes of 3 to 8 ft.
Boiling . Timber being a hardwood, in order to make it soft and easy to cut it is
boiled in hot water using pressurized steam at 80-160 0centigrade.
Peeling. The boiled logs are put into the peeling machine and peeled. There are two
types of peeling machines in the plant, they are spindle peeler and spindle less peeler.
Spindle less peeler is used to peel further what is left over by the spindled peeler. The
peeled log wafers are called as veneers.
Clipper . The veneers are put into clippers and cut into sizes of 3 to 8 ft. There are
two types of clippers, i.e. wet and dry clippers. Wet clippers are used for cutting hard logs
which were boiled. Dry clippers are used to cut the dry veneers.
Gluing. Gluing is the process of pasting the core veneer with adhesives on both
sides and sticking it to the face veneer in opposite right angled directions. The glue roller
machine is used to spread the adhesives.
Free press and Hot press. In Free Press the wooden board is compressed under
pressure without any temperature. In Hot Press the board is compressed at high temperature
of 140 to 2000 centigrade and 270k pressure.
Trimming & Sanding. Trimming is the process of cutting the edges to shape the
plywood and straighten the edge. Circular saws are used for trimming. Sanding is the
process of smoothening the surface of plywood through a sanding machine.
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Finishing. Finishing is the process of beautifying the plywood and preparing it as a
finished product. The board is cleaned off damages and cracks and crevices are filled with
French powder.
Organization chart for Plywood
Figure6:
Organization Chart of plywood
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
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FREE PRESS
HOT PRESS
TRIMMING
FINISHING
Figure 7:
Production process of hardboard
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
Logyard. This is the place where the logs are stored and it acts as a warehouse for
the company.
Chipper. Chipping is the process of crushing large blocks of wooden logs into small
pieces of wood chips. The wooden logs are transported to the chipping machine using the
conveyer belt. WIP has two chippers for this purpose.
Washing. The chipped wood is washed to remove mud and sand and other
impurities. The chips are put into a wooden chamber and mixed with water thoroughly.
The sand and mud gets settled down due to gravity. After washing the chips alone fall into
Chip Silo.
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Chip Silo. In Chip Silo the washed wooden chips are stored temporarily. A screw
conveyor is fixed at the bottom of the conical tank for collecting the chips.
Preheater. Preheater is a tank that is used for heating the wooden chips in order to
soften the chips and drain excess water.
Defiberator. It is used to convert chips into fibrous form. This is done by grinding
and heating the chips.
Cyclone. Here the grounded chips are mixed with water in a conical tank to form a
paste like mixture. It is mixed uniformly to form a pulp like substance.
Defiberator Chest. The defiberator chest is used store the pulp temporarily and it is
sent to equalizer.
Equalizer. Here the pulp’s thickness is adjusted and made uniform in size and
passed to the machine chest.
Head Box. The head box spreads the pulp into uniform flat surface to form a
rectangular shape. This pulp is transported through the conveyor belt.
Board Forming. The board is formed when it is cut using pressurized water in a
specific shape. The edges and corners are also shaped. This process is automated and so its
precision in cutting is very high
.
Free press. Here the shaped substance is compressed using metal plates to remove
the excess of water in the pulp.
Hot press. Here the wooden sheet that comes from the free press is compress and
heated at a temperature of 200 o centigrade and 200kg/m 3 pressure. This is done for 3
consecutive periods for a single board. The hot press can be loaded with 13 boards at a
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time.
Trimming & Finishing. Trimming is the process of cutting the board in regular
dimensions or customer defined sizes. This is done with trimming machine fixed with a
pair of saws at both sides. The finished product is sent for quality check and clearance.
Organization Chart of Hardboard
Figure 8:
Organization chart of HardboardAdapted from Primary Source
MANAGING DIRECTOR
GENERAL MANAGER
MECHANICHALENGINEER
ELECTRICALENGINEER
CHEMIST
WORKERSWORKERSOPERATORS
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The annual installed capacity of the various products being manufactured by the company
is summarized below
Table 2:
Annual Installed capacity of products
Plywood (in million sqm of 3ply x 4mm basis) 2.5
Hardboard (in M Tonnes) 34000
Densified wood (in M Tonnes) 2000
Resins(in M Tonnes) 2400
Furniture(in units) 15810
Dialyl phthalate(in M Tonnes) 10
Glass Reinforced plastics( in M Tonnes) 800
Prefinished boards (in lakhs sq.m) 9.0
Pre – compressed press board(in M Tonnes) 660
U.V Top coat and Basecoat(in kgs) 82600
Adapted from Organization Manual (2013-2014) prepared by Chief General Manager
Specifications
IS 303: specification for plywood for general purpose(Boiling water resistant)
IS 303: specification for moisture resistant
IS 710: specification for Marine plywood
IS 709: specification for Aircraft plywood
IS 1328: specification for veneered decorative plywood
IS 5509 : specification for Fire retardant plywood
IS 4990 : specification of shuttering plywood
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Human Resource Department
Figure 9:
Human Resource Departmental StructureAdapted from Organization manual (2013-2014) prepared by Chief General Manager
WIP Ltd is having the best governed Human Resource Department which is the heart and
soul behind the success of gigantic estabilishment.General Manager is the head of the
department followed by the factory executive who deals with all the matters in the personal
department.He is assisted by Personnel Officer and Welfare Officer.The time clerks deals
with the attendance leave and the time management of the workers in shifts and generalshifts.Besides there also provide people dealing with ESI,PF,Canteen token,wage and
salary administration and disciplinary action.
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Recruitment & Selection. In WIP the process of recruitment includes both internal
and external sources. Based on the vacancy or need for workforce manpower planning is
done. The internal sources include promotion, job rotation etc. External sources include
referral programme, campus selection, freshers and deputation. A panel of members
interviews the candidate and sends him/her for induction.
Training. One year training is given to the new entrance.Training is restricted not just
for a specific work but an overall training is given to workers so that they can fill in any
post of the absentee.This makes the worker more versatile.Stipend is given to the trainee
during the training periods.
Classification of Workers
Permanent Workers
Probationers
Substitutes
Temporary Workers
Casual Workers
Apprentice
Ticket or Attendance Card. Every workman shall be given a ticket or attendance
card free of cost showing his number or name,classification etc.Every workman shall
punch his attendance card at the punching machine and deliver up his card or ticket at the
place provided in the time office before commencement of each session of the shift in a
day.
Retirement. Any worker who is declared mentally unfit or found to continue ill health
or reach the age of 58 shall be retired from service according to Gratuity Act.
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Factory Timings. The factory runs for 24 hours and is not shutdown on any day. The
workers are allocated with three different shift timings for works. The timings are as
follows:
I shift 6:30 am to 2:30 pm II shift 2:30 pm to 10:30 pm
IIIshift 10:30 pm to 6:30 am
General shift 7:30 am to 4:00 pm
Office time 9:00 am to 5:00 pm
Since the work shifts can vary every time, most of the workers are local residents of
Valapattanam or Kannur District.
Disciplinary Action. Any employee found guilty of misconduct is liable to be
dismissed without notice or compensation in lieu of notice or alternatively to be suspended
for a period not exceeding 4 days or to be fixed up to 2% of his wages in accordance with
the provision of payment in Wages Act.
Leave & Holidays
The staff members are allowed for one leave for every 10 days of work. National and Festival leaves with wages will be allowed to workmen.
Leave for sickness, accident will be allowed to employees.
Wages. Factory workers are given with weekly wages whereas the office staff and
permanent workers get monthly salary. The administrative department draws monthly
salary which is credited to their bank accounts.
Welfare Measures
Employees Provident Fund. This act is applicable to those employees whose
drawing pay not exceeding `6500 /month. This act is applied to every factory in 20 or
more workers are employed.12% of employee’s wages and an equal of employer’s
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contribution is transferred to the EPF.
Employees State Insurance Scheme . The company follows ESI Act 1948. This act
provides medical benefits to the employees in case of sickness or accident during work. At
present the coverage of this scheme is restricted to employees not drawing wages not
exceeding `7500/ month. This may include salary, DA and HRA. The employee contributes
1.75% of the usage and 4.75% of the wage is contributed by the employer.
Canteen Facility. WIP runs a canteen where food is available at concessional rate
to the workers. Tokens have to be taken in advance for this facility.
Safety Provisions Walkway for movement of personnel
Masks and Protective covers
Mechanised Material Handling
Effluent Treatment as per KPSCB norms.
Saw dust absorbers
Proper lighting
Ambulance and First aid
Safety Day celebrations for awareness on March 4 th
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Finance Department
Figure 10:
Finance Departmental Structure
Adapted from Primary Source
Finance department is one of the core departments of an organization. The General Manger
of Finance is head of the department. The Company secretary is also the Finance GM of
WIP. The company follows double entry system of accounting for recording the
transactions.The finance department has direct interaction with all other departments since
all the payments and collections are made through here.This department follows a written
form of communication.All department payments and receipt are finally reported to the
finance department
GM FINANCE
ACCOUNT MANAGER
ASSISTANT A/C
MANAGER
ASSISTANT A/C
MANAGER
ASSISTANT A/C
MANAGER
ACCOUNTSTAFF
ACCOUNTSTAFF
ACCOUNTSTAFF
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The following accounts are maintained by WIP
Journal
Ledger
Sub Ledger
The following records are maintained by WIP in finance department
Total Debtor Account
Total Creditor Account
Purchase Day Book
Sales Day Book
WIP publishes annual report every year after the annual general meeting which is attended
by the board of directors and major share holders. It includes P&L account, Balance Sheet,
Accounting Policies of the business, Consolidated Cash Flow Statement etc.
Sources of Finance
Shares
Reserves & Surpluses
Secured Loans Unsecured Loans
The company maintains the following types of journals
Cash payment book (CPB)
Bank payment book (BPB)
Cash receipt book (CRB)
Bank receipt book (BRB)
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For these types of journals sub ledgers are maintained, they are as follows:
Accounts receivable book
Accounts payable book
Personnel ledger
Sources of Fund. The main sources of funds are
Internal sources. The main internal sources to fund WIP are income generated from
sales. Reserves are the sources of fund other than income from sales. Current losses are
adjusted by these reserves.
External sources. The main external source of fund is term loan form bank and financialinstitutions like SBI, Canara Bank, Punjab National Bank etc.
Bankers . The main bankers of WIP are
State Bank of India
Canara Bank
Indian Overseas Bank
Bank of India
Dena Bank
State Bank of Travancore
Urban Bank of India
Other functions of Finance department are issue of cash & cheque, cheque receipt, auditfinalization, wages and salary and banking related tasks.
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Revenue Distribution
Figure 11:
Pie Chart Representation of Revenue Distribution
Adapted from 69 th Annual Report (2103-2014) of WIP
Share Holding Pattern
Figure 12:
Pie Chart Representation Share Holding Pattern
Adapted from 69 th Annual Report (2103-2014) of WIP
46%
14%
4%
5%
10% 1%
Revenue Distribution
Material Consumption Employee Benefits Finance Charges
Depreciation Other Expenses Profit
46%41%
12%
1%Shareholding Pattern
Public Promoters Financial Institutions BodiesCorporate
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2) Quick ratio = Quick asset/Current Liability
Quick asset = Total Current Asset - Inventory
= 613389177 - 381284311
Quick Asset= 232104866Cr
3) Total current liability = 139620950Cr
Quick ratio = Quick Asset/Current Liability
=232104866/139620950
Quick Ratio= 1.66
An ideal quick ratio is 1:1.In 2014 quick ratio is 1.66
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Purchase Department
Figure 13 :
Purchase Departmental StructureAdapted from Organization manual (2013-2014) prepared by Chief General Manager
The Western India Ltd has well developed and efficient purchase department,which is deals
with the purchasing of raw materials.Company usually makes three kinds of purchasing:
Local Purchase
Direct Purchase
Purchase through bank
Company has broadly classified its purchase department into Timber purchase department
and all other purchase departments.Other department does the buying of all other items
other than wood i.e timber.It is involved in purchasing of consumer
MANAGINGDEPARTMENT
GENERAL MANAGER
PURCHASE MANAGER
PURCHASE STAFFPURCHASE STAFF
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product,spares,oils,acids,chemichals and other ancillary raw material used for
manufacturing its products.
Timber purchasing department dals only with the purchase of Timber.Timbers are
purchased through bank or direct purchasing.An intend will be received from the stores
department about the item to be purchased.The production manager should sign it.An
enquiry will be made and following that the quotation will receive.Suitable quotations will
be selected and it will be sent to the production department mentoning the criteria of
selection.After receiving the quotation the purchase department will make order with
specified conditions.If the goods are sending through bank intimation will receive from the
bank that the goods are ready for delivery.The money is paid as per terms and conditions
and the goods are delivered .In the case of direct purchasing money is directly paid to thesupplier and the goods are received
Purchase Procedure. Invites for quotation from various parties.From the quotation the
actual buyer will be identified based on price and quality.Order for the goods.Goods will
be sent to the nearest parcel offices from there the customer company will collect the
consignment.Documentation through bank or direct supplier.Sometime advance payment
is also undertaken.Emergency purchases can be authorized by MD/ED by passing the
above step.
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Export & Import Department
MANAGING DIRECTOR
GENERAL MANAGER
EXPORT/IMPORTEXECUTIVE
EXPORT/IMPORTASSISTANTS
CLERKS/TRAINEES
Figure 14:Export & Import Departmental Structure
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
The Export & Import department of WIP deals with export of finished goods to overseas
and import of raw materials (timber) from other countries.Export dealing is coming
directly under the managing director and import dealings are controlled by the general
manager .Export and import executives carry out functioning of thr department and they
are assisted by assistants.
EXPORT
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Nearly 30% of the sales is from exports, WIP exports Hardboard to Australia, U.A.E,
New Zealand, Malaysia, Tanzania, Papua New Guinea, U.S.A, Europe and other Gulf
Countries.
Export Procedure
Proforma Invoice
Pre Shipment documents
Invoice preparation
Packing List
Bill of lading
Quality certificates
Post Shipment documents
Import WIP imports Timber, veneers and machines from countries like Malaysia,
Myanmar, France, Ecuador, Sweden, Italy, Kenya, U.S.A etc.
Import Procedure
Enquiries
Request for Proforma Invoice Selection of suppliers
Placing the Order
Clearance Procedure
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Sales Department
Figure 15:
Sales Departmental Structure
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
Western India Plywoods markets their products through agencies and depots.They use
sales representatives also,Their main promotion method is direct contact by sales
representatives to canvas govt. and railway.Enquiries are made through tenders.The main
tool used to catch government order is by the lowest quotation.
The Western India Plywood Ltd provides both cash as well as credit sales.The credit period
allowed is usually 30 days.The sales depots are run both by company as well as by some
external agencies.There were more than 40 depots in India of which 14 are in Kerala.Each
depot is handed and controlled by depot manager
ype Of Sales
Industrial sale
Export sale
Local or domestic sale
GENERAL MANAGER
SALES MANAGER
SALES STAFF DESPATCH
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The main industrial customer of this company are Indian railway,HMT,KSRTC,shipyard
etc.ProductsaremainlyexportedtocountrieslikeUSA,Netherlands,France,Srilanka,Japan
and Canada.
Methods of Sales
Depot System. WIP uses depot system in distribution showing its wide range of
market potentially.Each depot is headed and controlled by a depot manager and one or two
assistance assist him.
Manufacture Agent Industrial buyers
Direct Sales. The company sells directly to consumer.The major way of direct
marketing is e-mail,post and leadership.
Manufacture Industrial buyers
Dealership System. Approved stockiest or dealers purchase the goods and sell in
the retail market.
Process. Sales starts when the orders are received from the customers, they are sent
to the factory stating the requirement of the goods. The order is processed and
manufactured according to the specifications. The customer receives intimation when the
product is ready for delivery. Company allows credit sales to its loyal customers who have
been doing business with WIP from time to time.
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Figure 16:
Sales of last four years
Adapted from 69 th Annual Report (2103-2014) of WIP
In the year 2013-14 WIP made a turnover of 103 Crores.Excise Duty is 12.5%.Central
sales tax for registered is 2%.While for unregistered is 14.5%
90
92
94
96
98
100
102
104
2013-14 2012-13 2011-12 2010-11
Sales(Rs in Crores)
Sales(Rs in Crores)
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Marketing Department
Figure 17:
Marketing Departmental Structure
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
As we know that marketing is one of the important functions of any business organization.
WIP has a marketing department which most dynamic among other departments. The goal
of marketing is to satisfy the customer needs with profitability. Marketing department is
well established and marketing is done for its high quality products.The company targets both high income and low income group. Apart from that they also
target retail and wholesale buyers of their products. The name and goodwill of the company
is far enough to market the products of WIP. The company’s reputation plays an important
role in marketing strategy of WIP.
MARKETING
MANAGER
MARKETINGCOORDINATOR
MARKETINGOFFICER
BUSINESSDEVELOPMENT
OFFICER
MARKETINGEXECUTIVE
REPRESENTATIVE
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Marketing Strategy. WIP is producing high quality goods with international
and/or national standards.So the company cannot compromise to the price factor.They
follow ‘High Quality,High Cost,High Price’ marketing.The company is aiming at quality
conscious customers and is not ready to compete with local manufactures.
WIP’s marketing strategy is ‘Niche Marketing.Under this marketing strategy company
offers technologically superior products and where quality is the determining criterion.The
company is not entertaining any short term promotion schemes.Long term brand building
is undertaken through promotional tools.
Market Segmentation. The company believes in quality and standard. So WIP’s
products undergo stringent quality tests. The prices of WIP’s products are comparatively
high since there is no compromise on quality. WIP is marketing more than 300 products.
The market is segmented follows:
Domestic Market
Industrial Market
Export Market
Export Market
Australia
Sri Lanka
U.S.A
U.A.E
Malaysia
Burma
African Countries
Europe
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Industrial Market
Car Manufacturers
Clock Manufacturers
Railways
Other Major Industries
Local Market. These include local customers who purchase plywood or Hardboard for
ceiling separation, door separation and furniture.
Positioning. The WIP Ltd has positioned its brand in the upper and in the market target
those segment which requires or desire the quality offers backed by willingness to pay for
it.The WIP Ltd commitment to niches the latest technologies in the field of wood
processing and continuously upgraded its process and machinery.
Product Branding And Loyalty. WIP Ltd is a reputed company in producing wood
based products.The company is try ing to use this ‘goodwill’ in marketing their
products.They are not trying to sell their products using their brands and brand loyalty.WIP
has given WESTINED for their plywoods,furniture and for decorative floorings.The
company’s hardboard is branded as ‘WESTON’.The Densified wood and prefinished boards are individually branded.Most of the customers are showing company loyalty as
company is having very good image in their minds.
Marketing Mix
Product. WIP’s Hardboard has super mechanical and physical properties. WIP’s
Hardboards are exported worldwide. WIP’s plywood is also having good sales over the
market since they produce since they produce boiling water proof, boiling water resistant,
fire retardant plywood, aircraft grade plywood etc.
Pricing. As said earlier WIP’s products are more expensive than their competitors due
to their state of art technology and unmatched quality. They are sold through exclusive
retail outlets all over the country. The customers are retained due to their brand loyalty
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since the product is of good quality.
Place. WIP has 27 exclusive retail outlets all over India for the sale of their products,
which are either owned by the company or commission agents. The hardboard is sold
through leading dealers in the country since they are products of mass consumption
Promotion. WIP concentrates on long term promotional activities. Brand building is
done through personnel selling and direct mail marketing. It has a public relations
department for promotional activities. It also conducts and participates in Exhibitions and
Trade Fair etc to attract potential customers.
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Timber Department
GENERAL MANAGER
PUBLIC RELATION
CLERKS
Figure 18:
Timber Departmental Structure
Adapted from PrimarySource
Timber department procures the wood required for production which is the main raw
material of the company. The raw material procured is used for plywood, hardboard and
compreg production.
Sources of Timber are :
Private Sources. Timber is sourced from private parties if the quality of the timber
is good and the price is reasonable. The company negotiate with the parties and fix the
price according to the market value
Government Source. The Forest department puts forward the wood for quotation
every year. The company can collect the wood after acquiring the order. There is scarcity
in the Government sources recently.
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Import Sources. Recently WIP has started a Joint Venture in Malaysia for import
of timber and other quality raw materials. About 80% of the wood is sourced from imports.
Timber is mainly imported from countries like Myanmar, Sri Lanka, Germany, Africa,
Europe and Kenya etc.Different types of wood imported are vellapine
wood,beech,Redcede,kalpine,keruing,kussin,Paliwood.
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Documents Maintained
A copy of personal ledger accounts with records and details of payments
Central credit account
ER-1(Excise Return) CR-6(Chelan Receipts)
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Research & Development Department
Figure 20:
R&D Departmental Structure
Adapted from Primary Source
WIP has an in house R&D department which is found rarely in wood and allied industry.
This is an added advantage to the company. The R&D department works on plywood and
allied products in WIP. This department is recognized by Department of Science &
Technology of Government of India.
This approval is to be renewed every two years and has to present a future plan for the nexttwo years to be implemented and a detailed report the performance of the previous two
years.
GENERAL MANAGER
HEAD R&D
EXECUTIVES QUALITY CONTROL
CHEMIST TECHNICIAN CHEMIST TECHNICIAN
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The department undertakes projects on resin development, plywood development and
prefinished boards. Some of the developments of R&D department are
Water based UV curing paint
12KV/mm insulation based on precompressed board
Wooden based compost
Bricket made of by products for Furnace Oil
The R&D department is allowed with tax benefits for the raw materials consumed and it
can source the raw materials in subsidised rates from Government of India. The recent
development was on Diethyl Phthalate, Resin based Glues and Sheet Moulding
components which are prominently used in electronic compound industry. The DAP
moulding compound was first manufactured in India by WIP by their state of the art
technology. This is an import substitution now used.
Differrent types of testing done on R&D department are
Density test
Glucious test
Modulus of fracture
Modulus of elasticity
Tensile strength Compressive strength
Block sheer strength.
Thickness swelling test
Smoke density test
Toxicity test
Vertical impact test
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Stores Department
GENERAL MANAGER
STORE OFFICER
STORE KEEPER
STORE HELPER
Figure 21:
Stores Departmental Structure
Adapted from Primary Source
The Stores department is responsible for stocking of the tools, spares, necessary raw
material and other components.
It is headed by the General Manager, followed by the Store Officer and Store Keeper.
The Store Keeper is assisted by the Store helper.
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The Stores department maintains the following documents
Store Identification Label
Positive Recall Slip
Goods Rejection Note
Store Indent
Goods Inward Note
The goods ordered are delivered at the store house by the supplier. The store keeper keeps
a record of these items and stocks them at the store house.
The inspection department verifies whether the purchase goods are in accordance with the
purchase order.
The inspection department collects information such as quantity inspected, quantity
purchased, quantity rejected and the reason for rejection. The indents are signed by the
Works Manager and Store Keeper. The WIP store is well stacked and ordered to get ISO
9002 certified in 1996. It is bound to inspection for every 6 months.
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EDP Department
GENERAL MANAGER
EDP
CLERKS
Figure 22:
EDP Departmental Structure
Adapted from Organization manual (2013-2014) prepared by Chief General Manager
The EDP department deals with the computer systems and network of the company. Thisis a small section in WIP and not a fully utilized or developed department. The company
office is LAN connected to each system but it is restricted to internet access, only few
systems are internet accessible. The EDP department prepares and edits
WIP’s monthly newsletter named “WOODTALK”.
The company doesn’t have its own technician for hardware maintenance. The maintenance
is outsourced to an external party. The EDP department takes care of the travel
arrangements for the organization heads and officials for official meeting and outstation
trips.
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Organizational Analysis
Key Resources
The key resources of the company include a vast pool of human resource and a state of art
technology and imported quality wood. They launch high quality products in the marketthrough constant innovation and persistent hard work. The company employs 1300
employees, which shows that a huge workforce is working for the improvement and
development of the company. WIP is highly dependent on good quality timber for
production of quality products, which they either import or source locally.
Swot Analysis. . SWOT analysis is an important aid for the management when it
comes to making critical decision. SWOT is an acronym for Strengths, Weakness,
Opportunities and Threats. The strengths and opportunities represent the positive aspectswhereas the weakness and threats represents the negative aspects that the company should
try to overcome. Strength and Weaknesses are internal to the organization. It is related to
the strategies implemented by the Organization, its position in relation to competitors etc.
Generally these parts are controllable whereas Opportunities and Threats are external to
the organization, which are caused by the external environment.
The aim of conducting a SWOT analysis is to isolate the key issues which would
be important in the future for the organization. Every successful firm’s success comes up
when they implement the outcomes of the SWOT analysis in the best possible manner
Strength . WIP is the one of the largest plywood manufacturing company in South
East Asia.They have stringent quality control techniques. The company is one of the very
few hardboard producing industries in India. The company has a well established in house
R&D, one of the best in industry. Installation and Licensed capacity is very high, so that it
can increase its production if needed. The company has an operational experience of 65years with dedicated workforce. WIP has larger dealer network in India for plywood and
hardboard sales.
Weakness . The company experiences an acute shortage of good raw material which has
forced the company to import good quality timber. As the raw materials are imported the
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company experiences high cost of production leading to low profit. Promotional activities
are insufficient to boost up the sales as the promotional activities of competitors are better
than that of WIPThe prices of the goods are high compared to its competitors. Lack of good
distribution network as compared to competitors
Oppurtunities. The company has a vast area where the there is a scope for growth &
development. Wood products are high in demand hence there is always stable demand in
the market. The goodwill and reputation can help in further diversification. R&D
department can supplement the development of new products. Modernization and
automation can be carried out for better production and competitive growth
Threats. As timber is a scarce resource there is a shortage of good quality timber and itcan affect the company in the long run. High cost of production and increasing cost of
furnace oil can lead to lower growth of the company. Environmental threats have adversely
affected the company since wood is a natural resource. Imported plywood is available at
cheaper cost compared to WIP’s plywood.
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Observations & Conclusion
Observations . The company has performed well over past few decades and has got many
accolades for it. The company gets a major chunk of profits from export activities.
Company emphasizes of 100% utilization of wood and zero wastage as wood is a scarce
natural resource.
The company is not fully computerized and not MIS employed so every action is recorded
manually. The company uses imported high quality machineries but it is high time to
replace the same. The company is unable to meet the demand as the production is not
sufficient to satisfy the market demand. WIP concentrates on high quality products and
hence stringent quality checks are conducted.
Since the inception of the company in 1945, WIP has experienced a steady growth through
constant innovation and persistent hard work to build a reputation and goodwill among its
customers.Due to its integrated production technique WIP achieved 100% utilization of
wood which sets an example for other companies as wastage of natural resources is a crime
to mankind. The company doesn’t aim to compete with local players and doesn’t have any
target or deadline to achieve. These all achievements has come into existence due to
effective leadership of the authorities.
WIP has stepped into next millennium and is a pioneer is allied wood products in the
country. These all came into being due to the dynamic vision WIP’s founder and visionaryMr. A.K. Kaderkutty.
Conclusion . Western India Plywoods Ltd., the second largest wood processing industry in
South East Asia, therefore it has a bright future in this field. During the running period
since 1945, the company has achieved various milestones. The high-end production
technology of WIP is well acknowledged among the wood processing industries in India.
WIP Ltd. stands for superior product performance and provides value for money to its
customers. It is backed by WIP’s commitment to harness the latest technology in wood
processing industry and continuously upgrade its processes and machinery. Due to the high
quality maintained, the company has found a ready market both India and abroad. The
company has better future prospects in the country in Wood and allied products
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