Professional Documents
Culture Documents
PROJECT REPORT ON
In partial fulfillment of the requirement for the Programme: Academic Year: Subject: Duration: SUBMITTED BY Names of group members ADITYA. J. PATEL JAY. G. PATEL LAUKIK R. PATEL JIGAR N. PATEL SUBMITTED TO Exam Nos. 11070 11103 11116 11106 SEMESTER IV B.B.A. 2011-2012 Practical Studies
V.M. PATEL COLLEGE OF MANAGEMENT STUDIES Ganpat Vidyanagar Campus, Kherva 382711, Mehsana-Gandhinagar Highway, Dist. Mehsana, North Gujarat, India.
1 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that Mr. / Ms. ________________________ of SEM IV BBA, Division: __ , Roll No: ___ , Exam No: ___ , has satisfactorily completed his / her Project Report in partial fulfillment of the requirement for the Subject: Practical Studies in the academic year 2011-12.
Signature of Principal
College Stamp
V.M. PATEL COLLEGE OF MANAGEMENT STUDIES Ganpat Vidyanagar Campus, Kherva 382711, Mehsana-Gandhinagar Highway, Dist. Mehsana, North Gujarat, India.
PREFACE
This Project Report has been prepared in partial fulfillment of the requirement for the Subject: Practical Studies of the Semester IV BBA Programme in the academic year 2011-2012. For preparing the Project Report, I have visited the company during the suggested duration from - 20/1/2012, to1/02/2012 avail the necessary information. The blend of learning and knowledge acquired during my practical studies at the company is presented in this Project Report. The rationale behind visiting the company and preparing the Project Report is to study the evolution of the company, its development, its strategies and its functional departments like production department, marketing department, human resource department and financial department. The Project Report starts with the basic general information of the company and covers the information regarding its functional departments like production department, marketing department, human resource department and financial department. The information presented in this Project Report is obtained from sources like Company Personnel, Company Websites, Other Websites, Company Reports, and Other Literature.
ACKNOWLEDGEMENT
MADHUR DAIRY, GANDHINAGAR It was indeed an opportunity for me to visit ______________________________ and prepare a Project Report on the same during Semester IV BBA Programme. During my visit to the company for preparing this Project Report, I learnt many interesting things about the company, along with the aspects of industry as a whole. Preparation of such kind of report, which is based on secondary information, requires data gathering from many sources like Company Personnel, Company Websites, Other Websites, Company Reports, and Other Literature. I am thankful to Mr. ___________________, who permitted me to visit the company and allowed me to prepare the Report. I am also thankful to the Departmental Heads of the company, who provided me the required information. Moreover I thank all those who supported me directly or indirectly in preparing this Report, without whose assistance, preparing this Report might have been much difficult for me. I would like to express my gratitude to Dr. K. M. Chudasama, ( Principal), Ms. Kinvanti Patel (Project Coordinator) and other faculty members of the college for their valuable guidance and help in preparation of this Report. At last but not least, I am thankful to all my friends and other people, who helped me in preparation of this Project Report.
Table of Contents (use table for followings and maintain order of u r information as follows
4 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
Page No.
I Ii Iii Iv
1 1.1 1.2 2
Production Department Introduction Organization Structure of production department Product List in detail Names of Raw materials used,Price and Production cost Production Process Quality Control Quality Assurance Product Packaging Plant & Machinery details Research & Development Location Advantage Value Chain analysis Marketing Department Introduction Organization structure Pricing strategy Marketing Strategy Distribution Network Advertising i.e. STP Analysis (Segmentation,Target and Positioning) Sales Promotion Market Research Human Resource Department Introduction Organization structure Recruiment & Selection Training & Development Programmes Performance Appraisal Promotion & Transfer Recreation Facilities Time Keeping System Wages & Salary Structure Employees Services & Benefits 5 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
4 4.1 4.2
MADHUR DAIRY, GANDHINAGAR Trade union 5 Finance Department Introduction Organization structure Financial Planning Ration Analysis Trend Analysis Du pont chart SWOT Analysis Findings Limitations Conclusion Bibliography Anexxure-Balancesheet and Profit and Loss account
GENERAL INFORMATION
OBJECTIVES
To provide maximum services to customers To monitor the process to ensure the environ safety. To provide necessary resources required for management system to prove excellence To provide maximum services to milk producers
TECHNOLOGY
Madhur Dairy purchases machinery from i. ii. iii. Refinery from USA Chiller, Packaging Machine From BOMBAY Some Equipments from DELHI
GOVERNMENT ASSISTANCE
The industry became significant with the launching at the operation flood programme under 9th 5year plan. The government for the development of this industry took following steps. Dairy will now be focused as a viable enterprise. International animal health code will be integral part of animal health management Operation flood will be developed for the international market. Buffalos milk product will be developed for the international market. Foreign investment in food packaging, dairy equipments, technology driven units are training centers of dairy industry will be encouraged.
Registration No:108707
Number Of Members:92
Board Of Directors:1. Shree Vikrambhai Kantibhai Patel 2. Shree Hathibhai Nathabhai Patel 3. Shree Prahladbhai Somabhai Patel 4. Shree Vikramsinh Hemtujee Bihola 5. Shree Babuji Thakor 6. Shree Knatibhai Maganbhai Patel 7. Shree Hitendrakumar Govindbahi Patel 8. Shree Khodajee Shanajee Jadav 9. Shree Nagarjee Babajee Thakor 10. Shree Mafajee Vaghela
Special Auditor(Milk):Mr. H.N. Darjee (Audit Office, Ahmedabad) Working Office Gandhinagar
PRODUCTION DEPARTMENT
WHAT IS PRODUCTION?
Production is a process of conversion of raw material into finished goods with the help of different resources. And the production process is the combination of certain steps to obtain the final product. These steps collectively are said as process. Because of the processing the life expectancy of these perishable items increases and they may be preserved and retained for a longer period without any deterioration in the quality.
PRODUCTION FUNCTION
RAW MATERIAL
After collecting of milk laboratories check the fats and SNF of milk. So their some raw material requirements are Milk, Salt, Acids, and some other chemicals.
PASTEURIZATION
After collecting, checking and conducting the laboratory test the Pasteurizing process is conducted. The milk is passed through these Pasteurizing Machines with help of Water Pumps. Here the milk is heated at 80 to 82 degree Celsius for 15 seconds after that it is cooled at 4 degree Celsius. By this method they destroy the bacteria present in the raw milk. After this process some milk goes to the separate machines and remaining to the packing machine. This method was invented by a scientist called JAMES PASTUE thats why this process is known as Pasteurization.
SEPARATION
Separation machine separates two kinds of the products: skimmed milk and cream. This milk is taken to the tanks. The milk in every tank has different proportion of SNF. Whenever the milk is needed from tank it is tested in the laboratory and the deficit proportion fat is added by mixing Cream.
PACKING PROCESS
Now in this necessary fats and SNF are added and packed in pouches of 500ml. The packed pouches are kept in the basket. The milk goes to the packing machines through pipes. At sporadic interval sample of pouches are weighed on the electronic weighing machine.
STORAGE
After packing various pouches the dairy has to store the fresh and packed milk. The milk pouches are then taken to the cold storage under the temperature of 8 to 10 degree Celsius. It is maintained with the help of fans having silicon chips. The pouches are stored here for the whole night and in morning they are distributed.
MANUFACTURING PROCESS
Processing-Storage
Packing
Storage
Dispatch
16 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
3) MADHUR Sweets: Penda Chocolate Barfi Rajvadi Penda Rajvadi Halvo Mohanthad Magas Kajukatri Kaju Barfi
4) MADHUR Ice-Cream: Venila Kaju Draksh Butter Skotch Kesar-Pista Strawberry Cone 18 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
6. Butter Milk
It is a by-product of Ghee and Costs no money, but the dairy charges 6 to 7 Rs. Per liter. Butter milk is packed in 500ml pouches. It becomes sour within 2 days. Therefore fresh butter milk is generally provided to the ultimate consumers. 7. Toned Milk (Tea Special) MADHUR Tea Special Milk is processed with Homonized for its consistency. Therefore this milk is more suitable for Tea, Coffee and Bournvita preparation. This milk contains 1.5% Fat and minimum 9% SNF. Madhur Tea special is available in 1 liter Pouch Packing.
COLD STORAGE
In this plant the excess milk is packed. The milk cannot be distributed in to the whole sellers at a time because it takes time reach out and beside the time at which milk is to be made available to the customers is also to be considered. Therefore during the gap the milk is stored in a cold storage of the unit. The temperature in the cold storage range from 5 degree to 10 degree Celsius and in the night the milk is dispatched in the trucks.
MADHUR DAIRY, GANDHINAGAR demand for Ice-Cream is more. In winter it produce Ice-Cream, which is produced as a supplementary product to other items. List of Ice-Creams Manufactured by MADHUR Vanilla Kaju-Draksh Butter Skotch Kesar Pista Strawberry Cone Candy
Preparation of Tank Pasteurizing (200 liter per hour) Homogenize Aging Vat (Stable) Freezer [-2 c to -3 c] Fruit Feeder[automatic Cup Filling machine [automatic]
21 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
Dispatch
MARKETING
DEPARTMENT
INTRODUCTION
Today it is fashionable to talk about the new economy. We hear the businesses are operating in a globalize economy: that things are moving at a nanosecond pace: that markets are characterized by hyper competition: that disruptive technologies are challenging every business: and that business must adopt to the empowered consumer. The old economy seemed simpler. It was based on industrial revolution and on managing, manufacturing industries. Manufacturers applied certain principles and practices for the successful operation of their factories. They standardize products in order to bring down costs. They aimed to continually expand their market size to achieve economy of scale. They tended to replicate their producers and policies and every geographic markets. The goal was efficiency: and to accomplish this firm was managed hierarchically, with a boss on top issuing orders to middle managers, who in turn guided the workers. The new economy, in contrast is based on the digital revolution and management of information. Information has no of attributes. It can be infinitely differentiated customized and personalized. It can be dispatched to a great number of people who are on a network and it can reach them with great speed. To the extent that the information is public and accessible, people will better informed and able to make better choices. Todays companies also have a new set of capabilities. Companies can operate powerful new information sells channel with augmented geographical reach to inform and promote their businesses and products. By establishing one or more websites, a company can list its product and services and its history, its business philosophy, its job opportunity, and their other information of interest to visitors. Unlike the ads and brochures of the past, the internet permits them to transmit an almost unlimited amount of information. Each company has the option of turning its websites into sales channels as well as information channel. Further more, since the internet is world wide, people from anywhere can learn about the company and place the orders.
ORGANISATION CHART
General Manager
Workers
PRODUCT PLANNING
Product is a key element in the market offering. Marketing-mix planning begins with formulating an offering to meet target customers need and wants. The customer will judge the offering by three basic elements: 1. Product feature 2. Service Mix and quality 3. Price A product is anything that can be offered to satisfy a want or need. Products that are marketed include physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas. In planning its market offering, the marketer needs to think through five level of the product. Each level adds more customer value and the five constitute a customer value hierarchy. The most fundamental level is the core benefit: the fundamental services or benefits that the customer is really buying. A patient is buying cure for his disease not medicines. At the second level, the marketer has to turn the benefit into a basic product. A patient is buying medicines, which are instantly effective. At the third level, the marketer prepares an expected product, a set attributes and conditions buyers normally expect when they purchase this product. A patient expects that the medicines have minimal side effects. At the third level, the marketer prepares an augmented product that exceeds customers expectation. Pharmaceutical company may produce medicines, which not only cure the diseases but also prevent it from reoccurring. Todays competition essentially takes place at the product augmentation level. In less developed countries, competition takes place mostly at the expected level. Product augmentation leads the marketer to look at the users total consumption system: the way the user performs the task of getting and using products and related services. 26 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
At the fifth level stands the potential product, which encompasses all the possible augmentation and transformations the product or offering might undergo in the future. Here is where companies search for new ways to satisfy consumers and distinguish their offer.
PRODUCT CLASSIFICATION
Marketers have traditionally classified products on the basis of characteristics: 27 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
CONSUMER-GOODS CLASSIFICATION
The vast array of goods consumers buy can be classified on the basis of shopping habits. We can distinguish among convenience, shopping, specialty and unsought goods. Medicines come in specialty goods. Specialty goods have unique characteristics or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort.
PRODUCT MIX
MADHUR DAIRY, GANDHINAGAR A product mix (also called product assortment) is the set of all products and items that a particular seller offer for sale. A companys product mix has certain width, length, depth and consistency.
PRODUCT RANGE
Madhur dairy is producing the following things.
5) MADHUR Milk: Full Cream Standard Toned Milk Cow Milk Flavored Milk
7) MADHUR Sweets: Penda Chocolate Barfi Rajvadi Penda Rajvadi Halvo Mohanthad Magas Kajukatri Kaju Barfi
MADHUR Ice-Cream: Venila Kaju Draksh Butter Skotch Kesar-Pista Strawberry Cone Candy
9) MADHUR Chass
Chass
WIDTH:
The width of the product mix refers to how different lines the company carries. The madhur dairy carries product mix width of 5 lines. LENGTH: The length of a product mix refers to the total number of the items in the mix. In case of madhur, the product mix length is 23.
DEPTH:
The depth of a product mix refers to how variants are offered of each product line.
CONSISTENCY:
The consistency of the product mix refers to how closely the related product lines are in end use, production requirement, distribution channel or some other ways. These 4 product mix dimensions permit the company to expand its business in 4 ways. It can add new lines, thus widening its product mix it can lengthen its each product line. It can add more product variants to each product and deepen its product mix. Finally, a company can pursue more line consistency. 30 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
PRICING POLICY
31 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR Price is the only element of the marketing that produces revenue, the other elements produce costs. Prices are the easiest marketing mix element to adjust; product features, channels, and even promotion take more time. Price also communicates of its product or brand. Price is all around us. You pay rent for your apartment, tuition fee for your education, and fee to your doctor or dentist. The airline, railway, taxi, and bus companies charge you a fair; the local utilities call their price a rate; and the local banks charge you interest; for the money you borrow. The price of an executive is a salary, the price of a salesperson may be a commission, and the price of a worker is a wage. Finally economists would discharge. Many of us feel that income taxes are the price we pay for the privilege of making money. Throughout most of history prices were set by negotiation between buyers and sellers. Bargaining is still a sport in some areas. Setting one price for all buyers is a relatively modern idea that arose with the development of large scale retailing at the end of the nineteenth century. Traditionally, price has operated as the major determinants of buyers choice. This is still the case in poorer nations, among poorer groups, and with commodity type products. Although non price factors have become more important in recent decades, price still remains one of the most important elements determining markets share and profitability. Consumers and purchasing agents have more access to price information and price discounters. Consumers put pressure on retailers to lower their prices. Retailers put pressure on manufacturers to lower their prices. The result is a market place characterized by heavy discounting and sales promotion. Many companies do not handle pricing well. They make these common mistakes: pricing is too cost-oriented; price is not revised often enough capitalized on market changes; price is set independent of the rest of the marketing mix rather than as an intrinsic element of marketpositioning strategy; and price is not varied enough for different items, market segments, distribution channels and purchase occasions.
CHANNELS OF DISTRIBUTION
Most producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel which is also known as trade channel or distribution channel. Some intermediaries such as whole sellers and retailers buy, take title to, and resell the merchandise, they are called merchants. Other-brokers, manufacturers representatives, sales agents search for customers and may negotiate on the producers behalf but do not take till to the goods; they are called agents. Still other transportation companies, independent warehouses, and banks, advertising agencies assist in the distribution process but neither takes title to goods nor negotiate purchases or sales; they are called facilitators. Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption, marketing channel decisions are among the most critical decisions facing management, the channels chosen intimately affect all the other marketing decisions. A distribution system is a key external resource. Normally it takes years to build, and it is not easily changed. It ranks in importance with key internal resources such as manufacturing research, engineering and field sales personal and facilities. It represents a significant corporate commitment to large numbers of independent companies whose business is distribution and to the particular markets they serve. It represents, as well, a commitment to set policies and practices that constitute the basic fabric on which is woven and extensive set of long term relationship. Companies that manage hybrid channels must make sure these channels work well together and match each target customers preferred ways of doing business. Intermediaries normally achieve superior efficiency in making goods widely available and accessible to target market. 33 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR Through their contacts, experience, specialization, and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Intermediaries smooth the few of goods and services, this procedure is necessary in order to bridge the discrepancy between the assortment of goods and services generated by the producer and the assortment demanded by the consumer. The discrepancy results from the fact that manufacturer manufactures typically produce a large quantity of a limited variety of goods, whereas consumers usually desire only a limited quantity of a wide variety of goods. ZERO LEVEL CHANNEL TWO LEVEL CHANNEL
MANUFACTURER
MANUFACTURER
RETAILER
CONSUMER
CONSUMER
MARKET SEGMENTATION
A company cannot serve all customers in a broad market such as computers or soft drinks the customers are too numerous and diverse in their buying requirements. A company needs to identify the market segments it can serve effectively. Here we will examine levels of segmentation, patterns of segmentation, market-segmentation procedures and bases for segmenting consumer and business markets, and requirements for effective segmentation. Many companies are embracing target marketing. Here sellers distinguish the major market segment, target one or more of these segments, and develop products and marketing programs tailored to each. Instead of scattering their marketing efforts (a shotgun approach) they focus on the buyers they have greatest chance of satisfying (a rifle approach). Target marketing requires marketers to take three major steps: 1. Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation). 2. Select one or more market segment to enter (market targeting). 3. For each target segment, establish and communicate the key distinctive benefits of the companys market offering (market positioning).
SEGMENT MARKETING
A market segment consists of groups of customers who share a similar set of wants. The marketer does not create the segments; the marketers task is to identify the segments and decide which one to target. Segment marketing offers several benefits over mass marketing. The company can create a more fine-tuned product or service offering and price it appropriately for the target segment. The company can more easily select the best distribution and communication channels and it will also have a clearer picture of its competitors, which are the companies going after the same segment.
NICHE MARKETING
MADHUR DAIRY, GANDHINAGAR A niche is a more narrowly defined group seeking a distinctive mix of benefits. Marketers usually identify niche by dividing a segments into sub segments. An attractive niche is characterized as follows: The customers in the niche have a distinct set of needs; they will pay a premium to the firm that best satisfies their needs; the niche is not likely to attract other competitors; the nicer gains certain economies through specialization; and the niche has size, profit, and growth potential.
SALES PROMOTION
Sales promotion is a key ingredient in marketing campaigns, consists of a diverse collection of incentives tools, mostly short teems, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Whereas advertising offers a reason to buy, sales promotion offers an incentives to buy. Sales promotion includes tools for consumer promotion (samples, coupons, cash refund offers, price off, premiums, prizes, patronage rewards, free trails, warranties, tie-in promotion, crosspromotion, point of purchase displays, and demonstration); trade promotion (price off, advertising and display allowances, and free goods); and business and sales-force promotion (trade shows and conventions, contests for sales reps, and specially advertising). These tools are used by most organizations, including non-profit organization. 36 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
A decade ago, the advertising-to-sales promotion ratio was 60:40. Today, in many consumer packaged-goods companies, sales promotion accounts for 65 to 75 percent of the combined budget. Sales promotion expenditure has been increasing as a percentage of budget expenditure annually for the last two decades. Several factors contribute to this rapid growth, particularly in consumer markets. Promotion is now more accepted by top management as an effective sales tool; more product managers are qualified to use sales-promotion tools; and product managers are under greater pressure to increase current sales. In addition, the number of brands has increased; competitors use promotions frequently; many brands are seen as similar; consumers are more Price oriented; the trade has demanded more deals form manufacturers; and advertising efficiency has declined because of rising costs, media clutter- for instance, by offering larger coupons redemption values or using more dramatic point-of-purchase displays or demonstration. Sales promotion tools vary in their specific objectives. A free sample stimulates consumer trial.
Sellers use incentive-type promotion to attract new tiers, to reward loyal customers, and to increase the repurchase of occasional users. Sales promotion often attracts brands switchers, who are primarily looking for low price, good value, or premiums. Sales promotions are unlikely to turn them into loyal users. Sales promotions used in markets of high brand similarity produce a high sales response in the short run but little permanent gain in market share. In markets of high brands dissimilarity, sales promotions can alter market shares permanently.
ADVERTISING
Advertising can be traced back to the very beginning of recorded history. Any paid form of non-personal, presentation and promotion of ideas, goods or a service by an identified sponsor is known as advertising. Advertising is very important tool to combat competition. The advertising by MADHUR Dairy is being done by following ways. Wall Painting 37 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR Hoardings Calendar Posters Vehicle Painting Vehicle Sticker On milk collection sticker Cinema Slide Signboard Plastic Banner
MARKET RESEARCH
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MADHUR Dairy sends its marketing officers to the different market fields to examine the market situation for their products in the different areas of Gandhinagar. After examining and analyzing each and every Criteria marketing officers suggests to give or open a distribution outlets over there or not. Marketing officers of the dairy are considering the following things for opening an outlet in a particular area. Demand for the product Density of the area
HUMAN
RESOURCE
DEPARTMENT
INTRODUCTION
40 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR Human Resource Management is Management that helps manager recruit, select, train and develop members of an organization. Obviously, HRM is concerned with the peoples dimensions in organization. Taking a look at the world of human beings is a rewarding experience. Contrasts abound in this world. Beauty is juxtaposed with ugliness, mercy with cruelty and compassion with indifference, health with disease, happiness with misery, industriousness with laziness and affluence with poverty. These contrasts remain so, despite the passage of time, sweeping political and economic changes and cultural differences. Contrast notwithstanding, one thing is certain- it is the people who makes the organization a success or allows it to be hanged over to the Board for Industrial and Financial Reconstruction. Who are these so-called patrons? How to attract them? How to retain them? How to motivate them? These and other such question needs an in-depth study. We make an attempt to study these questions. The essential or core points to be noted are as under. Organization is not mere bricks, mortar, machinery or inventory, They are people. It is people who staff and manage organization. HRM involves the application of management function and principles. The function and principles are applied to acquisition, developing, maintaining and remunerating employees in organization. Decision relating to the employees must be integrated. Decision on different aspect of employees must be consistent with other human resource decision. Decision made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high products supplied at reasonable costs. HRM functions are not confined to business establishment only. They are applicable to non-business organization, too, such as education, healthcare recreation and the like. Thus HRM refers to a set of programmes, functions, activities and designed and carried out in order to maximize both employees as well as organization effectiveness.
ORGANISATION CHART
Manager Production
Manager Marketing
Manager Account
Assistant Manager
HRD INITIATIVES
HR has been taking various initiatives to be an easier in linking the people in the firm to system that build desired competences within the organization. Chief among these initiatives is the freshly cast Performance Management System (PMS) and the elaborate and well structured Management Trainee Programmed. We believe that the best way of shaping a strong firm for tomorrow is to invest in our best resource; our best people. Those people who will take this organization into the future and who hold the key in helping the company reach the lofty goals that it has set for itself. Such people we know can be found anywhere across this vast organization in any function in any role.
PERFORMANCE APPRAISAL
MADHUR DAIRY, GANDHINAGAR An organizations goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his or her best performance on a give job? The answer is Performance Appraisal. Employee assessment is one of the fundamental jobs of HRM, but not an easy one? In simple terms, performance Appraisal may be understood as the assessment of an individuals performance in a systematic way, the performance being measured against such factors as job knowledge, quality, co-operation, judgment, versatility, health and the like. Assessment should not be confined to past performance along. Potentials of the employee for future performance must also be assessed. A formal definition of Performance Appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or potential for development. A more comprehensive definition is: Performance Appraisal is a formal, structured system of measuring and evaluating an employees job, relating behavior and outcomes to discover hoe and why the employee is presently performing on the job and how the employee can perform more effectively in the future. So that the employee, organization, and society all benefit. The definition includes employees behavior as part of the assessment. Behavior can be active or passive do something or do nothing. Either way, behavior affects job results. The other terms used for performance Appraisal are: Performance Rating, Employee Assessment, Employee Evaluation and Merit Rating. In a formal sense, Employee Assessment is an old as the concept of management and in an informal sense, it is probably as old as mankind.
MADHUR DAIRY, GANDHINAGAR Generally promotion means increasing the salary, status, duties and responsibilities of employee in the company. Thus this company is giving promotion on the basis of seniority to its employees. Promotion means an improvement in pay, prestige and position, responsibilities of an employee within his or her organization. A mere shifting of an employee to a different job which has better working hours, better location and more pleasant working condition that does not amount to promotion. The new job is a promotion for the employee only when it carries increased responsibilities and enhanced pay. A promotion represents the ultimate accomplishment for some employees. Many achieve it though hard work and good performance. A few follow short cuts to achieve the desired goal. Instead of trying to deserve a promotion through better performance, they believe in staying close to the boss. Cynics may say that the easy way of climbing the ladder of promotion is belong the community of the boss, marry into his or her family, or at least come from the same region as he or she does. For some employees, a promotion is not worth trying for. In fact, some refuse to be promoted on the ground that, once promoted, they lose the benefits of overtime and profit-sharing bonus, and become liable to transfer. Promotion is double-edged weapon. If handled carefully, it contributes to employee satisfaction and motivation. If mishandled, it leads to discontentment, frustration, skepticism and bickering among the employees, and culuminates in a high rate of labour turnover. It is the responsibility of the HR department to lay down a sound promotional policy and ensure its implementation. The policy of promotion should be clear on the following matter:
The management must take it clear whether to fill up higher position by internal promotion or recruit people from outside. Generally speaking, top positions in an organization are filled through external recruitment. The lower positions however, are filled up by promotions from within.
MADHUR DAIRY, GANDHINAGAR When it has been decided to fill up higher positions with promotions, a future decision on determining the basis of promotion should be made up the management. The basis of promotion may be seniority or merit or both. If seniority is the basis for promotion an employee with the longest period of service will get promoted, irrespective of whether he or she is competent to occupy higher post or not. This is the practice followed in unionized industrial establishment, government owned undertakings and educational institutions.
TYPES OF PROMOTION
There are three types of promotion methods.
1. HORIZONTAL PROMOTION
This type of promotion involves an increasing responsibilities and pay and a charge in designation. But the employee concerned does not transgress the job classification.
2. VERTICAL PROMOTION
This type of promotion results in greater responsibilities, prestige and pay, together with a change in the nature of the job.
3. DRY PROMOTION
Dry promotion is sometimes given in lieu of increases in remuneration. Designations are different but no change in responsibilities. Promotion may be given one or two increments.
TRANSFER
A transfer involves a change in the job of an employee without a change in responsibilities or remuneration. A transfer differs from a promotion in that the later involves a change in which a 46 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR significant increase in responsibility, status and income occur, but all these elements are stagnant in the former.
TYPES OF TRANSFER
1. Those designed to enhance training and development. 2. Those making possible adjustment to verifying volumes of work within the firm. 3. Those designed to remedy the problems of poor placement. PRODUCTION TRANSFERS: - As mentioned earlier, a shortage or surplus of the labor force is common in different departments in a plant or several plants in an organization. Surplus employees in a department have to be laid off, unless they are such transferred to another department. Transfers affected to avoid such imminent layoffs are called as production transfers. REPLACEMENT TRANSFERS: - Replacement Transfers, too, are intended to avoid imminent lay-offs, particularly, of senior employees. A senior employee to avoid lying off the latter may replace a junior employee. A replacement transfer programmed is used when all the operations are declining, and is designed to retain long-services employees as long as possible. VERSATILITY TRANSFERS: - Versatility Transfers are affected to make employees versatile and competent in more than one skill.
REMEDIAL TRANSFERS: - Remedial transfers are affected at the request of employees and are, therefore, called Personnel Transfers. Remedial transfers take place because the initial placement of an employee may have faulty or the worker may not get along with his or her supervisor or with other worker in department. He or she may be getting too old continue in his or her regular job, or the type of job or working conditions may not be well-adapted regular job, to his or her present health or accident 47 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR record. If the job is repetitive, the worker may stagnate and would benefit by transfer to different kind of work.
MADHUR DAIRY, GANDHINAGAR prospective jobholders. The next logical step is to hire the number of people of the right type to fill the job. Hiring involves two broad groups of activities 1) Recruitment and 2) Selection Though, theoretically, recruitment process is set to end with the receipt of a application, in practice the activity extends to the screening of application so as to eliminate those who are not qualified for the job. Recruitment represent the first contract that a company TRIO with potential employees. It is through recruitment that many individuals will come to know a company, and eventually decide whether they wish to work for it. A well-planned and well-managed recruiting effort will result in high quality applicants, whereas, a haphazard and piecemeal effort will result in mediocre ones. High quality employees can not be selected when better candidate do not know of job openings, are not interested in working for the company, and do not apply. The recruitment process should inform qualified individuals about employment opportunities, create a positive image of the company, provide enough information about the jobs so that applicants can make comparison with their qualifications and interests, and generate enthusiasm among the best candidate so that they will apply for the vacant position. The negative consequences of a poor recruitment speak volumes about its role in an organization. The failure to generate an adequate number of reasonable qualified applicants can prove costly in several ways. It can greatly complicate the selection process and may result in lowering of selection standards. The poor quality of selection means extra costs on training and supervision.
SOURCES OF RECRUTMENT
There are two sources of recruitment: 1. Internal Source of Recruitment 2. External Source of Recruitment
INTERNAL SOURCES
49 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR 1. Present Permanent Employees 2. Retired Employees 3. Present Temporary Employees 4. Dependent of deceased, disable employees Promotion to the higher positions has several advantages they are It is good public relation It builds moral It encourages competent individual who are ambitious It improves the probability of good selection, information on the individual performance is readily available It is cheaper then going outside to recruit Those chosen internally are familiar with the organization When carefully planned promotion from within can also act as a training device for developing middle and top level managers.
EXTERANAL SOURCES
Professional or trade Associations Advertisements Employment Exchange Campus Recruitment Walk-ins, Write-ins and Talk-ins Contractors Displaced Persons Radio and Televisions Acquisitions and Mergers Competitors International Recruiting
SELECTION
50 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
Next to recruitment theological step in the HR process is selection of qualified and competent people. Selection is the process of choosing the individuals who possess the necessary skill, abilities and personality to successfully fill specific jobs in the organization. Although, some selection methods can be used within an organization for promotion or transfer, this chapter focuses on selection applicants from out side the organization. Recruitment and selection are the crucial steps in the HR process and are often used interchangeably. There is, however, a fine distinction between the two steps. While recruitment refers to the process of identifying and encouraging prospective employees to apply for jobs, selection is concerned with picking the right candidates from a pool of applicants. Recruitment is said to be positive in its approach as it seeks to attract as many candidates as possible. Selection, on the other hand, is negative in its application inasmuch as it seeks to eliminate as many unqualified applicants as possible in order to identify the right candidates
EMPLOYEE SERVICES
MADHUR DAIRY, GANDHINAGAR The success of the organization depends on its employees. Hence it is necessary for a firm to satisfy its employees. To satisfy employees different kind of benefits or incentives are provided to the employees. FACILITIES PROVIDED TO THE EMPLOYEES OF THE MADHUR DAIRY Education Allowance City Compensation Allowance Transportation Allowance Canteen Facility Uniform Facility Leave Accident Benefit Scheme Bonus Rest Intervals
PERSONNEL RECORD
53 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
In personnel record, complete up to date information is maintained about the employees. So that these records might be referred for the purpose of transfer and promotion. Such records include information relating to personnel qualification, special interest, aptitude, results of tests and interview, leaves, promotions, rewards and punishment.
FINANCE DEPARTMENT
INTRODUCTION
55 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR The term nature as applied to financial management refers to its relationship with the closely related fields of economics and accounting hits function scope and objectives. Financial management as an academic discipline has undergone fundamental changes in its scope and coverage. In the early years of its evolution it was treated synonymously with raising of funds. In the current literature pertaining to financial management a border scope so as to include in addition to procurement of funds efficient use of resources is universally recognized. Similarly the academic thinking as regards the objective of financial management is also characterized by a change over the years. The objective of this department is to describe the evolving functions and objectives of financial management. Finance is closely related to both macroeconomics and microeconomics. Macroeconomics provides an understanding of the institutional structure in which the flow of finance takes place. Microeconomics provides various profit maximization strategies based on the theory of the firm. A financial manager uses this to run the firm efficiently and profitably. Similarly he depends on accounting as a source of information or data relating to the present and future financial position of the firm. This interdependence note with standing finance and accounting differ in that financial management is concerned with flows willed accounting provides accrual-based information and the focus of finance is on decision making but accounting collection of data. The financial management in the modern sense of the term covers decision making in three interrelated areas namely investment including working capital management and second is financing and dividend policy. The financial manager has to take these decisions with reference to the objective of the firm. Wealth maximization as measured by the market price of share emerges as a superior normative objective of financial management as compared to profit maximization, mainly because the latter is inapplicable in real situation due to technical limitations. It ignores timing of benefits and does not consider the quality or uncertainty of benefits. Though management is the agent of shareholders they are likely to act in a way incompatible with the interest of agency. The responsibilities for financial management is spread through out the organization in the sense that financial management is an integral part of the job for the manager involved in planning, allocation of resources and control. For instance the production manager shapes the investment policy and the marketing manager or analyst provides inputs in 56 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR forecasting and planning and the sales manager has a say in the determination of receivables policy nevertheless financial management is highly specialized in nature and is handled by specialists.
1) The assets are shown after deducting depreciation. 2) Investments are shown at their 3) Stock is shown at cost price
LEVERAGE
A firm can make uses of different sources of financing whose costs are different. These sources may be, for purpose of exposition, classified into those, which carry a fixed rate of return, and those on which returns vary. The fixed returns on some sources of finance have implications for those who are entitled to a variable return. Thus, since debt involves the payment of a stated rate of interest, the return to the ordinary share holders is affected by the magnitude of debt in the capital structure of a firm. The employment of an asset or source of funds for which the firm has to pay a fixed cost or fixed return may be termed leverage. Consequently, the earnings available to the share holders as also the risk are affected. If earnings less the variable costs exceed the fixed cost, or earnings before interest and taxes the fixed return requirement, the leverage is called favorable. When they do not, the result is unfavorable leverage. There are two types of leverage:- Operating and Financial. The leverage associated with investment activities is referred to as operating leverage, while leverage associated with financing activities is called financial leverage. While we are basically concerned with financial leverage for purposes of the financing decision of a firm, the discussion of operating leverage is 58 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR to serve as a background to the understanding of financial leverage because the two types of leverage are closely related. Operating leverage is determined by the relationship between the firms sales revenues and its earning before interest and taxes(EBIT). The earnings before interest and taxes are also generally called as operating profits. Financial leverage represents the relationship between the earning before interest and taxes ( Operating Profits) and the earnings available for ordinary share holders. The operating profits are, thus, used as the pivotal point in defining operating and financial leverage.
OPERATING LEVERAGES
Operating leverage results from the existence of fixed operating expenses in the firms income stream. The operating post of a firm fall into three categories: 1) Fixed cost which may be defined as those which do not vary with sales volume; the are function of time and are typically contractual; they must be paid regardless of the amount of revenues available: 2) Variable cost which vary directly with the sales volume: and 3) Semi variable or semi fixed cost are those which are partly fixed and partly variable. They are fixed over a certain range of sales volume and increase to higher levels for higher sales volumes. Since the last category of costs can be broken down into fixed and variable components, the cost of a firm, in operational terms, can be divided into a) Fixed, and b) Variable. The Operating leverage may be defined as the firms ability to use fixed operating costs to magnify the effects of changes in sales on its earning before interest and taxes. Operating leverage can also be defined and illustrated in another way. This is a more precise measurement in terms of degree of operating leverage (DOL). The DOL measures in quantitative terms the extent or Degree of Operating Leverage.
DOL =
% Change in EBIT
59
% Change in Sales
FINANCIAL LEVERAGE
Financial Leverage relates to the financing activity of a firm. The sources from which funds can be raised by a firm from the point view of the cost/charges can be categorized into: 1) Those which carry a fixed financial Charge. 2) Those which do not involve any fixed charge. The sources of funds in the first category consist of various types of long term debt, including bonds, debentures, and preference shares. Long Term debts carry a fixed rate of interest, which a contractual obligation for the firm. Although the dividend on preference share is not a contractual obligation, it is a fixed charge and must be paid before anything is paid to the ordinary share holder. The equity share holders are entitled to the remained of the operating profits of firm after all the prior obligations are met. We assume in the subsequent discussion that all preference dividends are paid in order to ascertain the operating profits available for distribution to ordinary share holders. Financial leverage results from the presence of fixed financial charges in the firms income stream. These fixed charges do not vary with the earnings before interest and taxes or operating profits.
EBIT
EBIT-1
RATIO ANALYSIS
Ration analysis is a widely used tool of financial analysis. It is defined as a systematic use of ratio to interpret the financial statement so that the strength and the weakness of the form as well as its historical performance and its current financial condition can be determined. The term Ratio refers to the numeric or quantitative relationship between two variable or items.
TYPES OF RATIO
Ratio can be classified into four broad groups 1. Liquidity Ratio 2. Capital Structure or Leverage Ratio 3. Profitability Ratio 4. Activity Ratio
LIQUIDITY RATIO
The importance of adequate liquidity is in the sense of the ability of a firm to meet current or short term obligations. When they become due to payment can hardly be over stressed. In fact, liquidity is a prerequisite for the survival of the firm. The short term creditors of the firm are interested in the short term solvency or liquidity of a firm. But liquidity implies, from the view point of utilization of funds of the firm that funds are ideal or they earn very little. A proper balance between the two contradictory requirements i.e. liquidity and profitability is required for the efficient management. The liquidity ration 62 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR measures the ability of the firm to meet the short term obligations and reflect the short term strength or solvency of a firm.
CURRENT RATIO
The Current Ratio is the ratio of total Current Assets to Current Liabilities. It can be calculated by dividing Current Assets by Current Liabilities. The current assets of the firm, as already stated, represent those assets which can be, in the ordinary course of business, converted into cash within a short period of time, normally not exceeding one year and include cash and bank balances, marketable securities, inventory of raw materials, semi finished (Work In Progress) and finished goods debtors net of provision for bad and doubtful debts, bills receivable and prepaid expenses. The current liabilities defined as liabilities which are short term maturing obligations to be met, as originally contemplated, within a year, consist of trade creditors, bills payable, bank credit, provision for taxation, dividends payable and out standing expenses.
Current Ratio = Current Assets Current Liabilities 2010 = 61219553 62445074 = 2011 0.98
The higher the current ratio, the larger is the amount of rupees available per rupee of current liabilities, the more is the firms ability to meet current obligations and greater is the safety of funds of short term creditors. Thus, current ratio, in a way, is a measure of margin of safety to the creditors.
MADHUR DAIRY, GANDHINAGAR The acid test ratio is a rigorous of a firms ability to service short term liabilities. The usefulness of the ratio lies in the fact that it is widely accepted as the best available test of the liquidity of the firm.
PROFITABILITY RATIO
A part from the creditors, both short term and long term, also interested in the financial soundness of a firm are the owners and management or the company itself. The management of the firm is naturally eager to measure its operational efficiency. Similarly, the owner invests their funds in the expectation of reasonable returns. The operation efficiency of the firm and its ability to ensure adequate return to its share holders depends ultimately on the profit earned by it. The profitability of a firm can be measured by the profitability ratios. In other words profitability ratios are designed to provide answer to the questions such as: is the profit earned by the firm is adequate? What rate of return does it represents? What is the rate of return for the different divisions and segments of the firm? What is the earning per share? What was the amount paid in dividends? What is the rate of return to equity share holders? And so on.
A high net profit margin would ensure return to the owners as well as enable a firm to withstand adverse economic conditions when selling price is declining and cost production is raising and demand for the product is falling. Net Profit Ratio = Net Profit After Tax Sales
ACTIVITY RATIO
66 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
Activity ratio is concerned with measuring the efficiency in asset management. This ratio is also called efficiency ratio or Asset Utilization ratio. The efficiency with which the assets are used would be reflected in the speed and rapidity with which assets are converted into sales. The greater is the rate of turnover or conversion, the more efficiency is the Utilization or Management. For this reason such ratio is also designated as turnover ratio. Turnover is the primary mode for measuring the extent of efficient employment of assets by relating the assets to sales. An activity ratio may, therefore, be defined as a test of the relationship between sales and the various assets of a firm. Depreciation upon the various types of assets, there are various types of activity ratios.
CONCLUSION BIBLIOGRAPHY
CONCLUSION
I visited MADHUR DAIRY, GANDHINAGAR for a period of 21 days. A response from every department helped me a lot to collect information, thats why I am very thankful to MADHUR 68 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR DAIRY. The main objective of industrial visit is to develop practical knowledge of industrial activity that may not be achieved by just getting through looks. This point helped me a lot to get practical experience with knowledge. So that I am thankful to the officers and employees of MADHUR DAIRY who helped me during my industrial visit.
BIBLIOGRAPHY
REFERENCE BOOKS:1) Marketing Management:- Philip Kotler 69 V. M. PATEL COLLEGE OF MANAGEMENT STUDIES
MADHUR DAIRY, GANDHINAGAR 2) Finance:- Prasana Chandra 3) HRM:- K. Aswathappa Mahajan Prakashan