FAZAL CLOTH MILLS

TEXTILE INDUSTRY OF PAKISTAN

In 1947, at the time of independence Pakistan Textile Industry was like a feeble child with only three cotton mills, a small woolen spinning, whereas weaving, hosiery and knitwear were features of cottage industry. Now when we have entered into new millennium, Pakistans Textile Industry has become a stalwart fellow, which has grown in all sections. Now we are not only self sufficient but are also exporting surplus products. Today we have over 8.358 million installed spindles, 166,000 installed rotors 20,000 shuttle less looms, 200 , 000 power looms, 8,000 terry towel looms, 7620 canvas looms, 157,000 woolen/worsted installed spindles, 15,000 woolen looms, 12,000 knitting machines, over 600 processing units and over 2500 garments units.

We all know, journey of textiles starts from seed and culminates at ready-towear garments and in present competitive world scenario, it is combination of high production efficiencies, most appropriate technologies and work methods, together with trained work force, management and marketing skills which can give any industry a successful status.

Textile industry today is the backbone of economy of Pakistan and provides the largest number i.e. about 40% of total industrial jobs and very vast industrial service opportunities. It has always been the pillar of Pakistans economy contributing substantially to Govt. revenues. It also has a dual linkage. As a major consumer of domestic cotton, it provides a market for a leading cash crop and thus has a critical influence on the growth and

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FAZAL CLOTH MILLS productivity in agrarian sector. Hence the performance of the textile industry has a vital impact on the over all growth and development of the economy. The industry also tops, as an earner of ever-so- scarce foreign exchange and exported goods worth US $4.9billion last year and this amount is about 60% of the total national exports. Its share in total GDP is 8.5%. The investment in Textile Industry is 31% of total investment. The interest that banks and other financial institutions earn from Textile sector is RS. 4 billion per annum. The salaries and wages that Textile sector provides to workers is Rs. 40 billion per annum. Its contribution to R & D is RS.116 million per annum. This very remarkable achievement did not come easily and is due to the combined and tireless efforts of the Govt. Planners. Currently total textile Pakistan which are registered with All Pakistan industries in Textile Mills

Association(APTMA) are 442. In which, 345 are spinning units ,53 composite units and 44 weaving units.

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PROBLEMS OF TEXTIEL INDUSTRY

The main problem the industry is confronted with are summarized below: Supply of raw cotton is uncertain and below the required level. The cotton crop grown in Pakistan is mostly of short and medium length while long. Stapple cotton is required for producing of fine quality of yarn and cloth. There is need to increase production of long stapple, cotton to shift textile industry to the production of: Fine products rather than inferior yarn and cloth. Scoaring lint cotton prices have croded. Competitiveness of local industry visa-a-vis supplies of Cheap production like India, China, South Korea and Bangladesh. Lack of availability of polyester staple fiber (PSF) and man-made fibers (MFP) The textile industry is also facing the problems pf closure of mills and financial constraints. The solution of these problems is under active consideration of the Government. Economic revival package 1997 and export enhancement measures are already under implementation, which aimed at the rival of the sector. The Govt. is accelerating the pace of the implementation of these reforms. The installed and effective capacity of the textile industry is summarized in the table.

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TEXTILE INDUSTRYS ECONOMIC CONTRIBUTION

Description Exports Manufacturing Employment Investment Market Capitalization Interest Salaries and Wages Contribution to Research and Development Gross Domestic Product (GDP) Contributions 64% of total exports (US$ 4.9 Billion) 46% of total manufacturing 38% of total employment 31% of total investment 7% of total market capitalization Rs. 4 Billion per annum Rs. 40 Billion per annum Rs. 116 million per annum 8.5% of total GDP

This sounds a triumph like situation at a glance. There is how ever much more than it meets the eyes when you go into details, which carry some failures also to weep on. This industry has not performed as well as it should have. It is struggling for its survival for the past 7 years. The textile industry at present is passing through a transition phase. It is sailing smoothly under the protected cover of the quota system, however it has to face the rough waters of the open sea when globalization of trade is implemented under WTO agreement in 2004. Three years have already gone unnoticed. The fast approaching deadline sounding a note of warning for re-structuring of all the segments of the cotton and textile industries on war footings to enable it to face the future challenges of fierce competition amongst the low cost Asian manufacturers to capture share of their higher cost European counter-parts when the gates of the global economies are open.

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Cotton Based
Cotton, the most precious commodity from Pakistans economic point of view, has become a bone of contention between textile industry and the growers, ginners and exporters of raw cotton. Pakistan, being the fourth largest cotton producing country provides a strong base for development substance of textile industry in spite of tremendous growth in all the area of textile industry, including: Cotton Ginning Spinning Processing Because Egypt has been able to develop good quality staple as against the poor quality cotton, despite the lavish spending on Research and Development, which turns into billion of rupees every year. However, in Pakistan the major chunk of the funds allocated for research and development go into salary bills of white elephant hired by the governments on political considerations in the past. We failed in developing even a single variety of long staple cotton, which is the major handicap of the textile industry in producing yarn of the fine quality.

Number of units and classification

In the organized section there are232 listed textile companies of which 153 are spinning units, 28 weaving and 51 composite units
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FAZAL CLOTH MILLS while the total no of textile units both listed and non-listed however are 443.

Import of Machinery
The industry imported textile machinery from abroad the detail of which for last few years is as below, it represents a decline in import of machinery in yearly: Year 1996-97 1997-98 1998-1999 Value (million) 789.2 352.7 294.9

Contribution in Employment
Textile unit constitute 38% of employment generated by the manufacturing sector while textile being largest industry has got other forward and back ward relation where it must had played its role in generating employment in related industries for example shipping industry will definitely by mainly depended upon textile industry.

Share in Value addition

As the table indicates the status of textile industry among other production units, it constitutes for almost 26% of total value added by the manufacturing sector this value addition for textile sector was Rs.8596 million in 1985-86. It has increased to Rs.29251 million in 1999.

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Contribution in Forex
Textile exports constitute about 60-65% of the total exports of Pakistan, but textile industry also has to import the raw material the data for which is given below:

IMPORTANCE OF COTTON IN THE ECONOMY OF PAKISTAN

Cotton the silver fiber of Pakistan is the backbone of Pakistans economy. A simple notion one million bales of cotton means to Pakistan, plus or minus one percent gross domestic products (GDP) narrates the vital importance of cotton in Pakistans economy. Pakistan was ranked as third largest cotton exporting country in the world in 1991 when its production of cotton reached its climax (12.82 million bales). The anticlimax began thereafter and in the very next year cotton production decreased to 9.05 million bales and further to 8.86 million bales in 1993. The major biotic factor responsible for the downfall was the leaf curl disease of cotton that pervades through out the Cotton Belt. The production of cotton during 1998-99 was 1,372,000 metric tons (7.22 million bales), which is 13.6% less as compared to the previous year. Pakistan exported 2,000 metric tons and imported 142,000 metric tons of cotton during that year. The quality of Pakistani cotton is not very good. There is contamination in the cotton and there is not proper grading of cotton in Pakistan. The average ginning out

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FAZAL CLOTH MILLS turn (%), fiber length (mm), fineness and strength (000ppsi) is 36.8, 28.2, 4.4, and 94.2 respectively. It will be interesting to note that the export value of our raw cotton which was $1.03/kg some 45 years ago in 1951-52, while it is still moving around $1.47kg. The value of Egyptian cotton is more than double of Pakistan cotton in the international market simply because they have been able to develop good quality staple as against the poor quality cotton produced in the country despite the lavish spending on R&D which runs into billions of rupee every year. The major chunk of the funds allocated For R&D GO INTO SALARY BILL OF THE WHITE ELEPHANT HIRED BY THE different governments on political consideration in the past. We failed in developing even a single variety of long staple cotton, which is the major handicap of textile industry in producing of yarn of fine quality. The textile industry at present is passing through a transition phase. It is sailing smoothly under the protected cover of the quota system. However it has to face the rough water to the open sea when globalization of trade is implemented under WTO Agreement in 2004. Three-year have already gone unnoticed. The fast approaching dead line sounding a note of warning for restructuring of all the segments of the cotton & textile industries on war footings to enable it to face the future challenges of fierce competitions amongst the low cost Asian manufacturers to capture share of their higher

GROWTH OF TEXTILE SECTOR IN PAKISTAN

Year Spindles (000) Looms (000)

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FAZAL CLOTH MILLS NO. of Mills 70 83 144 219 494 442 Installed 78 1,581 1,967 3,366 4,445 8,610 8,358 Working 78 1,488 1,852 2,823 2,872 6,262 6,631 .76 2.82 .60 4.05 2.27 -.12 % Growth Installed 3 26 31 29 23 14 10 Working 3 24 28 25 10 5 5 3.33 -3.33 -4.17 -6.67 -23.08 % Growth

1948 1958-59 1964-65 1974-75 1984-85 1994-95 1998-99

COMPANY

INFORMATION

BOARD OF DIRECTORS:
SH. NASEEM AHMAD Chairman/Chief Executive Mr. MUHAMMAD AFZAL ULLAF SIDDIQUI Director (NIT) SH. SHAUKAT MASUD Director SH. AMIR NASEEM Director MR. REHMAN NASEEM

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FAZAL CLOTH MILLS Director MR. FAZAL AHMAD SHEIKH Director MRS. FARRUKH MUKHTAR Director

COMPANY SECRETARY: MR. M. D. KANWAR AUDITORS: M/S HAMEED CHAUDHRY & CO. CHARTERED ACCOUNTANT BANKERS: HABIB BANK LIMITED NATIONAL BANK OF PAKISTAN LTD. ASKARI COMMERCIAL BANK SONERI COMMERCIAL BANK MILLS: FAZAL NAGAR, JHANG ROAD, MUZAFFARGARH REGISTERED OFFICE: ROOM NO. 102-103, INTERNATIONAL PLAZA, BOHRA STREET, MULTAN CANTT.

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COMPANY PROFILE
COMPANY NAME:
FAZAL CLOTH MILLS LIMITED:

VANUE
MILLS: HEAD OFFICE: FAZAL NAGAR, JHANG ROAD, MUZAFFAR GARH ROOM NO, 102-103, INTERNATIONAL PLAZA, BOHRA STREET, MULTAN CANTT.

The company was incorporated in 1966 as a public limited company under the companys ordinance, 1984. The mill is situated at a piece of land measuring 368 kanals. Te company does not enjoy tax Holidays for some period from the date of its company production. The company has imported most modern spinning unit from different advanced countries, which is the best combination. Letter of credit for import of machinery was established by the Muslim commercial bank ltd.

GROUP PROFILE
There are certain other organizations, which are managed by the same group. A list is as follow: -

1. AHMAD TEXTILE MILLS LTS. RAHIM YAR KHAN 2. FATAMA SUGAR MILLS LTD. 3. RELIANCE TEXTILE MILLS LTD. 4. RELIANCE WEAVING MILLS LTD.

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Highlights
Yunus Brothers is the flagship company and trading arm of the group which was formed in 1962 by Chairman (Late) Haji Abdul Aziz Tabba. Starting as a small commercial Exporter of Yarn and Grey Cloth to Far Eastern countries, the company developed rapidly and expanded its Exports to Europe also. The continuous growth and development of the business launched the group into Industrial activity in the year 1983. Starting with the very small Weaving facility, the Yunus Brothers Group today has Two most modern Spinning Mills, with 245,000 Spindles, Weaving Mill with over 750 Looms and has just started most modern vertically integrated Textile Mills of USD. 30/- Million having 214 Air Jet Looms with state of the art processing and stitching facilities. Yunus Brother Group is recognized internationally in the world of Textiles and enjoying a strong reputation in respect of consistent quality, reliability and superb customer services. The Yunus Brother Group has been a frequent recipient of various awards and trophies for the Export Performance by the Government of Pakistan. Yunus Brothers is actively involved in international trading of various products including Cotton & Blended Yarn, Cotton & Blended Fabrics, Garments, Rice, Sugar, Fertilizer, Earth moving equipments, Chemicals, Spare Parts and Automotive Vehicles etc. Yunus Brothers is one of the largest export houses of the Pakistan exporting mainly to the European, US, Far Eastern, Middle Eastern and African markets. Yunus Brothers annual sales turnover exceeds USD 300/- million with 95% of the sales geared towards the export markets. Spinning activities of the Yunus Brothers Group is being carried-out under the name of ; FAZAL TEXTILE MILLS LTD. ( 60,000 SPINDLES) GADOON TEXTILE MILLS LTD. ( 185,000 SPINDLES) Total installed spindles are 245,000 for the production of approximately 150 M/Tones of yarn everyday. Gadoon Textile Mills Ltd (GTML) was established in 1988 and came into commercial production in 1990. GTML is located in the Gadoon Amazai Industrial Area, approximately Two-hours drive from the city of Islamabad. GTML started production by producing Poly/Cotton yarn with 14,400 Spindles but later the Management expanded its production capacity by making huge investments. Over a period of 12 years the GTML capacity has increased to 185,000 Spindles which are producing various types of yarns. Now Gadoon Textile Mills Ltd is producing the Best Quality Compact_yarn , Murata_Jet_Spinning yarn , Core_Spun_Yarn, besides 100%_Grey_Cotton_Ring_Spun_Yarn, Synthetic_yarn & Poly/Cotton yarns.

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FAZAL CLOTH MILLS Apart from above items, Gadoon Textile Mills Ltd is engaged in the production of Compact Core Spun yarn. Gadoon Textile Mills Ltd. is the first Mill in the world starting production of Compact Core Spun Yarn. Presently, besides GTML, there is only one other mill situated in Italy producing Compact Core Spun Yarn. GTML is producing top grade Compact Core Spun yarn in count Range from Ne 30/1 upto Ne 80/1 with Duponts Lycra and the Air Jet Weavers of Pakistan, Far East, Europe and India are enjoying the quality of Gadoons Compact Core Spun yarn. Gadoon Textile Mills Ltd. recently received an award for being one of the top 5 buyers of Lycra from Dupont Pakistan. Initially GTML was using raw cotton of Pakistani origin but now it is producing different varieties of yarn with Pakistani, Chinese, West African, Australian, Egyptian as well as Pima Cotton in Normal and Extra Long Staple in the count range from Ne 6/1 to Ne 140/1 and double of the same counts. GTML is certified with Oeko-Tex_100 Standards. We believe that in textiles, Quality means Best Raw Material, State of the art Machinery & Highly Trained and Skilled Human Resources. The Quality Management at our Mills believes in implementation of all three.

Souring of Raw Materials

The Market environment today has become increasingly competitive with the consumer becoming more Quality conscious. Therefore, besides sophistication in terms of speed and technology of machinery, it is very important for a mill to know all the important properties of the Fiber. In the case of Raw Cotton, especially, it is necessary to know Fiber properties of each and every bale and to understand how the fiber properties interact with the processing conditions to determine the Yarn quality and the performance of the process itself. Raw Cotton Fiber characteristics vary from field to field. This variation is due to genetic and environmental factors such as harvesting and ginning conditions. Therefore, our Raw Cotton selectors choose Raw cotton based on its Physical characteristics, Length of Fibre, Trash Percentage, Micronaire, Pressley and Colour grade. The quality monitoring starts at the cotton procurement stage. Only cotton which meets all the required characteristics is purchased. We also Import Raw Cotton from America, Australia, Egypt, West Africa, C.I.S. China depending on the type of yarn to be produced as per the customers requirement.
Processing ( Machinery & and Professional Human Resource)

NO SUBSITITE OF BEST QUALITY is the reality we believe in, and we strive to service our customers at every stage according to that belief by adopting the following procedure:

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We carry out mixing of the cotton in three shifts, round the clock. Trained and expert workers open bales, which are laid down properly by trained labourers after the bales have been tested by the quality department. All the important parameters of fiber are tested to keep the mixing even throughout the season. Our Blow room line consists of Trutzschler machines. To keep the yarn free from contamination we employed persons on the feed lattice for manually picking out contaminants. Fiber growth, neps and waste extraction is monitored throughout the blow room line using most modern testing equipment, including AFIS.

We use different Origin of Cotton such as US PIMA, EGYPTIAN GIZA, Chinese, among others. Unlike these growths, Pakistani Cotton has some inherent contamination and we use the following procedures to minimize the contamination presence in yarn: 1. We have manual Contamination Picking System at our Blow Room level so that maximum quantity of foreign Matters can be removed at the early stages. 2. LOPTEX CONTAMINATION SORTER: Our blow rooms are equipped with Two Loptex Sorters in one line to remove the remaining contamination before it reaches the Carding stage. The Loptex Sorters can detect and remove visible contamination of upto 1 square centimeter effectively. 3. All Autoconers are equipped with Loepfe Yarn Master Spectra, which further controls and eliminates the contamination in the yarn.

The card machines have a chute feed system and consist of Trutzschler DK 903, Crosrol MK5D and Rieter C51 equipped with Auto-levelers. Waste percentage, Card U% and wrapping is carried out daily to check the performance of the Cards. The maintenance cycle of Card machine is monitored using AFIS N module. Every individual card is tested for neps fortnightly using spin test technique along with continuous checking of neps with the help of AFIS-nep module to keep the neps under control. The Toyoda drawings are used as breaker for cotton carded yarn. Card U% and Sliver Wrapping is checked for each machine daily to ensure proper working of machine within our quality parameters. The Automatic Unilap machines are used to feed the E62 Rieter combers. All combers are checked throughout the day for sliver wrapping and a weekly cycle of checking of waste percentage is carried out to ensure proper removal of short fibers. The extracted waste is also checked on the AFIS to ensure that the Noil percentage is sufficient. Neps are again monitored during combing process with the help of AFIS. Spin tests are also carried out keeping in view that every comber must be checked at-least once a month.

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Our Auto leveler Rieter D35 and Trutzschler HSR1000 Finisher Drawings are equipped with Sliver Quality Monitoring System. It allows 24 hour on-line checking and detection of faults that could cause Drawing Sliver to deviate from its required mean. Additionally Uster Tester-4 is used to test evenness of sliver daily for each machine. Toyoda FL-16 and FL100 Simplex machines are used to convert sliver into roving of our required parameters. Evenness of roving is checked for every machine daily by using wrapping drums and Uster Tester-4. The Uster standards are strictly followed through out the back process to produce high quality roving. Our Ring department consists of Toyoda RX240 and Chinese EJM 128A with SKF-225 German drafting system. Every individual count spun on our Ring machines is checked daily for count, twist / inch, strength and evenness using Uster Autosorter, Zweigle Twist Tester, Uster Tensorapid and Uster Tester-3 and 4 respectively. We practice to keep all quality parameters of yarn within Uster Statistics category of 5%. Some individual values may exceeds to Uster category of 12% but they are always monitored, and we try to keep it within Uster category of 5%. Yarn from Ring department is converted onto required package using Schlafhorst-238, 338, Savio Espero and Savio Orion winders. The Schlafhorst machines are equipped with Loepfe Yarn master 930 Plus and Uster Quantum clearer. On-line classimat is performed on Savio Espero to check the yarn parameters daily for each individual count. The contamination clearance is also carried out on these machines to produce contamination-controlled yarn.

By employing the above stringent measures we try and keep the quality of our products consistent.

MACHINERY
BLOW ROOMS Truetzschler Germany Rieter Switzerland ELECTRONIC CONTAMINATION CLEARER (At Blow Room Stage) CARDINGS Loptex Sorter (Optical & Sonic) Italy

Truetzschler Germany Crossrol England

COMBERS DRAW FRAMES

Rieter Switzerland Truetzschler Germany

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Rieter RSB-D35 Switzerland Toyota Japan (With Auto-Leveller & OnLine Sliver monitoring) SIMPLEXES Toyota FL-100 Japan Howa Japan RING FRAMES Toyota RX-240 (With Auto Doffing) EJM-128 China Drafting system) COMPACT SPINNING (With SKF German

Suessen Elite Germany Toyota RX-240 Japan. (With Compact)

JET SPINNING LYCRA ATTATCHMENTS COMPACT) WINDERS (RING &

Murata MJS Japan Pinter Spain

Schlafhorst-338 Germany Savio Espero Italy Savio Orion Italy (With On-Line Classimate of Loepfe Switzerland)

ELECTRONIC YARN Winding Stage) DOUBLER/TWISTERS KNITTING MACHINES

CLEARERS(At

Loepfe Yarn Master YM-930 Uster Technologies Quantum

Spectra

Fukuhara Japan

LABORATORY EQUIPMENTS
FIBER Afis-LM&T Switzerland) Fiber Glow Switzerland) (Uster Technologies

380

(Uster

Technologies

Fibrograph 530 Switzerland) Stelo Meter Switzerland) Micronaire-770 Switzerland) YARN

(Uster (Uster (Uster

Technologies Technologies Technologies

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Uster Tester-3 Switzerland) Uster Tester-4 Switzerland) Auto Sorter Switzerland) Lea Twist Strength Tester (Uster Technologies

(Uster

Technologies

(Uster

Technologies Japan) Germany)

(Asno (Zweigle

Hairiness Tester (Zweigle Germany)

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ORGANIZATION STRUCTURE
The organization gram shows the structure of the company. It sows that head office and Production, Maintenance; Quality Control handles the Purchase and Sales Department and the Mills controls Administration. The responsibilities and authorities can be summarized as follows: -

1. CHIEF EXECUTIVE
He is responsible for overall operation of the company and finally responsible for the quality of the products of the company.

2. GENERAL MANAGER/MANAGEMENT REPRESENTATIVE

He is responsible for quality maintenance, planning and upgrading of the project and also responsible for all activities at the Mills. General Manager as Management Representative.

3. QUALITY CONTROL DEPARTMENT/MILLS MANAGER

This department is responsible for all testing and inspection activities to predetermine the information obtained are issued to make decisions for raw material purchases, process control and corrective actions.

4. TECHNICAL MANAGER
He is responsible for the production and maintenance department.

MAINTENANCE DEPARTMENT

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FAZAL CLOTH MILLS This department is responsible for the proper function of all the machinery. This department has prepared a preventive maintenance schedule and maintained the plant according to it.

PRODUCTION DEPARTMENT
This department is responsible for the activities about quality production and its affecting aspects. Te technical Manager is responsible for production and he shall repot to the General manager. He is also responsible for the training of the production staff.

5. ADMINISTRARION DEPARTMENT
This department is responsible to receive the ginned cotton, its storage and waste handling, it is also responsible for the issue of raw material according to the laboratory instructions, for the Blow Room prior to the production. It also handles the packing and dispatch of finished yarn, saleable wastes, receipt/issue of general goods stores. It also arranges the Internal Audits.

6. ISO 9002 COORDINATOR

He is responsible for the documentation and documents control, training records and also maintain the minutes of the meetings.

7. PURCHASE DEPARTMENT
Responsible for purchasing the Raw Material ((Cotton etc.), Spare Parts, Equipments and Packing Material.

8. SALES DEPARTMENT
Sales Department is responsible for optimum sales, smooth flow of shipment and provide the after sales services to the customers.

RESOURCES
Fazal Cloth Mills Ltd. s executive management commits to provide all resources required for the effective implementation and maintenance of the quality
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FAZAL CLOTH MILLS system. The management review activity acts as a forum to address all resources requirement and approvals.

MANAGMETN REVIEW:
In order to control the quality system and to ensure its continuing effectiveness, a system of management review meeting has been instituted. The management review Meeting is held every month in order to discuss all quality related issued. The agenda will always include: -

* * * * * *

Corrective Actions arising from previous meeting. Customer Complaints. Result of Corrective Actions. Resources Requirements. Other quality related matters. Achievement of Quality Objectives.

Complete records are maintained and kept by the Management Representative through ISO-9002 Coordinator.

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Vision Statement

A leading producer of textile products by producing the highest quality of products ad services to its customers. To strive for excellence through commitment, integrity, honesty and team work. Highly ethical company and be repeated corporate citizen to continue playing due role in the social and environmental sectors of the company. To develop and extremely motivated and professional trained work force, witch would drive growth through innovation and renovation. Sustained growth in earning in real terms.

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Mission Statement: Our mission is to be a dynamic, profitable and growth oriented company by providing good return on investment to its shareholders and investors, quality products to its customers, a secured and friendly environment place of work to its employees and to project Pakistans image in the international market.

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Organizations Values Trust Integrity Respect Customer profile FAZAL Textile Mills has also proud of work with world best Labels like JC Penney (Stafford, Arizona, St. Johns Bay) War Naco (Chaps Ralph Lauren, Calvin Klein) Indus (Vantage, Champs, Tom Taller)

Vanity fair Lee, Wrangler Perry Ellis Levi

Corporate Objectives
1. Maximization of wealth of shareholders. 2. To increase market share 3. To achieve customer satisfaction. 4. Making arrangements towards achieving total quality standards. 5. To get growth through professional management. 6. To growth through professional up to minimum level..

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7. To control the atmosphere by installation of lated machinery. 8. To continue to improve/ surpass past achievement. 9. To lead the local manufactures. 10.To attain a good word of month and to make company image. 11.Stronger in the international market Management Hierarchy Top Management
Chief Executive Officer

General Manager

Middle Management
Manager

Senior Officer

Deputy Manager

Assistant Manager

Officer

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ADMINISTRATION DEPARTMENT
ADMINISTRATION MANAGER

LABOUR OFFICER

SECURITY OFFICER

GATE KEEPER

TIME OFFICER

This is very important department of the organization. As the name shows this department is to administer all the operations of the organization. This is headed by the R.D. (Resident Director) of the company. It deals with all the matters that are related with personnel Section of this department are divided into officer as under: A) B) C) D) Labor Office Security Guard Office Gate Office Time Office

A) LABOUR OFFICE
As required by the Labor Department of the Government of Pakistan this office has been set up to deal with all the matters that are related with labor. It is the duty of Labor Office to inform the management regarding update information of legal requirements concerning the labor and company affairs. It is his duty to satisfy himself regarding payment of bonus, gratuity and other benefits to labor.

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B) SECURITY GUARD OFFICE:

The main objective of the Security Office is to safe handling of the good form / to the mail premises. For the achievement of such objectives a team of security guards has been employ by the company.

C) GATE OFFICE:
This office has been made to keep the record of each and every thing coming into and going out of the organization. For this purpose Gate Office Clerk maintains two types of registers called: 1) Outward Going Pass (Register) 2) Inward Going Pass (Register)

C) TIME OFFICE:
This office keeps the record of all the workers on Time Cards and Pay Register for the final costing of the workers` salaries.. 1. It is also helpful in keeping the record of workers at ten dances, which is then used to prepare salaries, bonus on the monthly basis for all workers. 2. It also keep the record of the leaves, number of days worked of all the workers. 3. It also keeps the record of Social Security. EOBI, Education Cass etc. of each worker/employee payable to the Government treasury.

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FINANCE DEPARTMENT
FINANCE CONTROLLER/Chief Accountant

i)

Deputy Chief Accountant Accounts Assistant Accounts Assistant

ii) Deputy Chief Accountant Accounts Assistant Accounts Assistant

This Finance Department is situated at head office i.e. Muzafar Garh. The Chief Accountant Mr. FAIZAN UL HAQ who is a highly qualified and experienced person heads it. It also deals with the both the units of shipping units. The staff of the finance department is also very competent and hard working.

JOB FUNCTION OF ACCOUNTS MANAGER

The Accounts Manager of fazal Cloth Mills is responsible for the following function: * To look after and control the work of the department * To sign: (a) Cheques (b) Cash/Bank payments, vouchers, journal voucher etc. * To check monthly/quarterly/annual accounts, funds movement sheets, stock statement for banks, reconciliation of accounts statements. * * * To deal with banks and cotton suppliers in respect of payment and audits etc. To prepare projected profile and loss statements, balance sheet and cash flow statements. To prepare projected profile and loss statements, balance sheet and cash flow statements.

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ACCOUNTING DEPARTMENT
The accounts department of Fazal Cloth Mills is responsible for the entire accounting process of the organization and for an efficient handling of the accounts the Accounts Department mainly performs the following functions: -

1.MAINTENANCE OF PURCHASE ACCOUNT:

The Assistant Accountant is responsible for entire accounting process to record the purchase made. The process to purchase and afterwards records the purchase is as follows: _ i) The requisition department sends Demand Note to main store. ii) If the goods are not available, than store sends that Demand Note to the purchase department who decides either to purchase locally or import the goods. After approval for Director the purchase department prepares a purchase order and the purchase is made. The goods are received at head office. Purchase department prepare four copies of delivery order and the goods are sent to the mills with three copies. When goods are received on gate, an Inward Gate pass is made. After physical checking of purchase in the store, they prepare store receipt Voucher in triplicate. The goods with two copies of SRV are sent to the relevant department for quality checking. When department approves goods then one copy of SRV is sent to purchase section and one to the accounts department. Purchase department attaches Inward Gate Pass and original bill of the supplier along with that approved SRV and sent to the accounts department. Accounts department entcom pares the copy of SRV with the copy of same SRV sent to them from the mills and

iii) iv)

v)

vi)

vii)

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FAZAL CLOTH MILLS prepares a voucher an enter the transaction in the relevant books.

2.MAINTENANCE OF SALES ACCOUNT:

The company sale is of two types:1. 2. 1.FINISHED PRODUCT SALE: (a) The companys finished product is yarn. First of all a contract is made between the company and the customers. Then the goods are forwarded or supplied to the customer. (b) A detail of goods sold is entered on the bill with reference to its description, quantity, are per unit and the total amount of the goods sold. (c) When goods are reached on gate an outward Gate Pass is prepared and both the document are sent to the accounts office. The accounts office records the transaction in the sales book, customer ledger and ultimately in general ledger. 2.WASTE SALES: Waste sale is of the following types: i) Soft Waste Sale: When cotton is blowed in blowing room, some quantity of cotton is wasted during its process. Sometimes a defected or sub standard bale of cotton is also sold as soft waste. Hard Waste Sale Sometimes the yarn produced by the company is not up to the standard. The company sells its substandard product as hard waste. Finished Product Sale. Waste Sale.

ii)

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3.CASH AND BANKING TRANSACTION:

The cash and bank sections of the accounts department make payment to the suppliers and receive payment from the customer. This section also maintains a cashbook in which all receipts and payment are recorded.

PAYMENT TO SUPPLIERS
On receipt of the proper purchases documents, the cash, bank payment, voucher of the party is prepared and the payment is made mill site for mill employees. Salaries are fixed and are prepared by earning the attendance record of the employees. Addition of different allowances deductions of different liabilities and funds contribution are made there from. Pay slips of all employees are prepared and distributed to their relative account number by sending a bank advice. In this way salaries are paid to the employees. When payment made 3 % tax deduct of NTN not allowed then 5% deduction made

WAGES
All sorts of wages are prepared at the mill site. For this purpose, record of data and hours worked for each worker is maintained. Therefore the wages are calculated accordingly and payment is made to the workers.

5.

INVENTORY CONTROLLING

Inventory controlling plays an important role in any manufacturing concern. There are two types of store in Fazal Cloth Mills, which are: 1) The main Store 2) Raw Material Store 1) The main store contains: i. Spare parts. ii. Electric goods. iii. Packing material. iv. Stationary v. Workshop

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FAZAL CLOTH MILLS ii) While the raw material store contains: a) Cotton b) Polyester. c) Acrylic d) Viscose. The functions of store controlling can be further sub divided into two parts:1) Purchase for stores. 2) Stores Issued

PROCEDURE OF STORE PURCHASES

In Fazal Cloth mills, the company purchase come material on regular basis such as stationary, packing material etc. and maintains the average quantity of theses goods every time, these are considered as stores. Other store goods such as spare parts, electric goods etc. are purchased on requirements. When a department needs any goods, it prepares a Demand Note for these particular goods and sends it to the shift in charge, which signs it. Then this demands sent to general manager for approval. After it is delivered to the main store. Store department examine the demand and then enters it in demand register. This demand is then sent to etc purchase department. On receipt of demand note from the mills, the purchase department decides either the goods are available form the local market or it should be purchased from the foreign market. If the required goods are note available in local market, the demand is transferred to import department to purchase the goods from foreign markets. Otherwise quotations are called oft the required goods and then purchases Assistant prepare the comparative statement of the prices of the goods. The comparison statement is first examined by the purchase Manager and then it is sent to the resident directors for approval. After approval the goods are purchased from the specified supplier. The goods are received ate the head office. The purchase department sends all the goods to the mill with three-purchase department advice.

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FAZAL CLOTH MILLS The goods are received at mill and the details of the goods are entered in the Inward Register and Inward Pass is prepared. The goods then reach the stories. A store receipt Voucher is prepared. The goods then reach the store and store receipt voucher number is written on the Inward Gate Pass. The concerned foreman/in charge is called to inspect the goods and the sub standard goods are rejected which are returned to the supplier. The goods then are recorded on the store receipt register. After that they are posted to Bin Card.

PROCEDURE OF STORE ISSUE

In Fazal Cloth mills, store department has issued an issue book to every department. The requisitioning department fills the store issue note and signs it from departmental heal and mills manager. The storekeeper issues the goods to the specified department and makes an entry in the issue file. Three copies of the store issue note are prepared. One copy is kept in the relevant department, the second copy is sent to the accounts department and the third copy is kept in the store record.

BOOK KEEPING
The following books are maintained at the Fazal Cloth Mills Ltd1. General Journal 2. Ledger 3. Purchase Book 4. Sales Book 5. Supplier Book 6. Customer Ledger 7. Cash Book 8. Bank Book

PREPARATION OF FINANACIAL STATEMENT

Different financial statement such as balance sheets and income statement are prepared to show the working of the business. The accounts department prepares the Trial Balance of a Company every month. And then Accounts Manager prepares the other financial statements.

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MARKETING DEPARTMETN
MARKETING MANAGER

Import Officer

Export Officer

Marketing officer

MARKETING DEPARTMENT
The market department of Fazal Cloth Mills consists of three section: i. Local Sale ii. Export Section iii. Import Section

1.

Local Sale

The local sale is made from the head office at Muzffargarh. Yarn is supplied mainly to the weavers and partially to the knitters. Volume of local sale is very much high.

YARN PRICES
As the yarn size decreases the prices of yarn increase. It means that higher the count number the more will be the price. It is because as the count numbers increase the size of yarn decrease but price increase. It is due to the reasons that think yarn gives more production in pounds while the thin yarn gives less production in pounds. Thus as the production decrease the cost will increase and so the price will automatically increase due to the more cost. That is why the higher counts have prices.

PRICE STRATEGY:
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The prices of the yarn fluctuate in the market on day-to-day basis. The price of every textile mills is different for the some count. The Marketing Manager of Fazal Cloth Mills has introduced the fixed price strategy of their yarn in the market. Their prices do not change with the market. This is because they produce very high quality tarn on the latest machinery. Although they face some problems to this fixed price but overall they receive good response from the parties, which rely on quality.

EXPORT SECTION:
The whole yarn is sold in the local market except a little portion, which is exported. This little portion is exported to Middle East and Japan, U.S.A. and other worlds advanced countries. About six months ago, export was very good due to high rates. But in ordinary conditions, we shall see it in detail in export chapter.

IMPORT SECTION:
The import section of the Fazal Cloth Mills is headed by the import discharge that is highly qualified and dedicated person. The Import Officer assists him.

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FAZAL CLOTH MILLS

PURCHASES DEPARTMENT
PURCHASE MANAGER
Purchase Officer

Purchase Assistant

Purchase Assistant

The efficiency of purchase department directly effects the production and efficiency of the company. The purchase department of Fazal Cloth Mills is in the head office, under the control of purchase manager who is highly qualified and experienced person. The staff of the department is also very experienced.

JOB FUNCTION OF PURCHASE MANAGER

Purchase Manager is responsible of the following functions: i. To fulfill the demand of purchase of the department. ii. To maintain stocks and store of goods level within the approved budget. iii. To control on purchase price of stores. iv. To exercise general checking of store.

TYPES OF PURCHASE:
The purchase in the textile industry is of two types as given below: 1. Purchase of goods. 2. Purchase of raw material.

PURCHASE PROCEDURE OF STORE GOODS:

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FAZAL CLOTH MILLS The stores are used to buffer the emergency conditions; therefore no limit is fixed to purchase these types of goods. These goods are consisting of spare parts, electrical goods and other general items. When a department needs any goods, it prepares a Demand Note of these particular goods and sends to the Shift Incharge, which signs it. Then this demand is sent to the General Manager for approval, and then it is delivered to the main store. Store department examine the demand and then enters it in Demand Register. This demand is sent to the purchase department. Purchase department decides either to purchase the goods locally or form foreign markets.

FLOW OF PURCHASE RAW MATERAIL:

The directions make the raw material purchase. The directions negotiate with the supplier. The supplier sends the cotton to the specified unit where cotton is received at gate and Gate Inward Pass is prepared. The cotton is unloaded in go down after measuring the weight. A weigh statement is prepared when the cotton is weighed.

ARRANGEMENT OF ITEMS IN MAIN STORE

The main store is categorized in different sections. The main sections are as: 1. 4. 7. 10. BLOW ROOM 2. DRAWING 5. AUTO CONE 8. AUTO CONE (AC) CARD 3. SAMPLE 6. ELECTRICAL 9. COMER RING WORKING

With every stand of an item Bin Cards are placed. On these bin cards the Issue or Receipt of different amounts of the items is recorded. Theses cards also help to locate the items.

PROCEDURE TO ISSUE ITEMS FROM STORE

In Fazal Cloth Mills, store department has issued an Issue Book to every department. The requisitioning department fills the store issue note and gets approval form the General Manager mills. The store issues the required goods to the specified department. The storekeeper at that time makes required entries in the Issuance Register at mill. Three copies are prepared, one copy is kept in department, second copy is sent to accounts and the third copy is kept in the record at store.

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FAZAL CLOTH MILLS

PRODUCTION DEPARTMENT
GENERAL MANAGER

Technical Manager

Mills Manager

Electric Manager

Administraion Manager

Spinning Manager

Assistant Manager

Labor Officer

Gate Officer

Supervisor
Time Record Officer

Assistant Spinning Manager

Foreman

Security Officer

Foreman

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INTRODUCTION TO SPINNING UNITS

The Fazal Cloth Mills Spinning unit is situated at muzaffarGarh. The highly automated imported machine is installed in all the units. The spinning consists of the following sections. 1. BLOW ROOM SECTION 2. CARDING SECTION 3. DRAWING SECXTION 4. SIMPLEX SECTION 5. RING SECTION 6. AUTO CONE SECTION All the department takes part to convert the balls of raw cotton in to form of fine yarn.

1. FUNCTION OF BLOW ROOM.

When blow room send a demand note for cotton, the cotton is issued the blow room and a cotton statement is prepared. The cotton, which is sent to blow room, should contain the maximum level of moisture. When cotton bales are reached to blow rooms these are opened and the cotton is stoned into small pieces y hand. The temperature of the blow room is maintained highly to eliminate the moisture. The cotton is passed through the blow machines which blow cotton and the salvage is separated form the cotton. This cotton is reached into the carding section through pipes automatically.

2. CARDING SECTION
The cotton, which reaches in this secition from blow room, is rolled on big rings called Lapse. These laps contain fine cotton in the form of a layer on big rollers. Theses rollers are used and silver of this cotton is prepared and collected in big plastic canes, which are filled with the silver in drying section.

3. DRYING SECTION
In this section two types of machines used, which are called: INTERNSHIP REPORT 39

FAZAL CLOTH MILLS 1. BREAKER MACHINE 2. FINISHER MACHINE

4. SIMPLEX SECTION
In simplex section, the cone of cane of silvers, which are made in drying section, is used and big size bobbins are prepared. During preparation of these bobbins, machines, which are used in this section, separate the cotton, which is not up to the standard to prepare the very fine yarn.

5.RING SECTION
The ring section converts the big bobbins into the small size bobbins. This section is not only changes the bobbins but also makes the thread finer. Now it is the final product and it is ready to prepare and cones of yarn. These small bobbins are sending to the auto cone section.

6. AUTO CONE SECTION

In Fazal Cloth Mills Ltd. The auto cone machines of very highly quality and modern technology are installed. All the working on these machines is automatic and theses are looked as an appreciable invention of man. Now this prepared yarn is sent to packing department where it is packed in cartoon and sold to the customers.

PROCEDURE OF PRODUCTION CONTROL

First of all, the cotton is issued to blow room on demand and it is recorded in raw material transaction register. It contains the details of lots is issued to blow room such as: OPENING BALANCE NUMBER OF LOTS ISSUED WEIGHT OF LOTS TOTAL BALANCE OF COTTON IN BLOW ROOM

The production department examines the daily cotton consumption by the cotton quantity being work in process in blow room. It has a record of opening balance and issuance cotton of the day. Therefore, it calculates the consumption of the cotton of the day.

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FAZAL CLOTH MILLS It prepares the production report, which contains the information about the yarn prepared, the soft waste and the hard waste obtained. The production department prepares daily useable waste report and also daily saleable waste part. Finally the packing department prepares the daily cone packing report, which contains the following information: 1) OPENING BALANCE 2) CONES PACKED ON THIS DAY 3) BALANCE OF PACKED OR UNPACKED YARNS.

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FAZAL CLOTH MILLS

EXPORT DEPARTMENT
EXPORT MANAGER

Assistant Export Manager

Assistan Export Manager

The export department consists of export manager who is a qualified and experienced person. His subordination is also not less than him in efficiency and experience. During the current year, the company exported a lot of cotton yarn. The directions are hopeful that approximately 70% of the total production will be exported in the near future.

EXPORT PROCESS:
This process starts form a bargain. A buyer contacts the company and tells them about their demand. This contact may be direct or through an agent. In response to this contact, the director often settles the price and terms and conditions thorough visit, fax, telex, telephone etc. when the contract is matured three copies of the contract are issued to the buyer. They sent back one copy to Fazal Cloth Mills, which is in full arrangements and conditions. If any agent is involved, three copies are sent to the agent. After agreement of both the parties on terms and conditions, the buyer opens letter of credit in his bank. That foreign bank sends that letter of credit to the bank in Pakistan and that bank gives the original letter of credit to Fazal Cloth Mills. The company after fulfilling the requirements of the letter of credit dispatches the material to be exported. To get letter of credit, company has to fill the following documents: -

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FAZAL CLOTH MILLS 1) INVOICE 2) PACKING LIST 3) CERTIFICATE OF ORIGIN 4) FORM E 5) BILL OFEXCHANGE

QUOTA RECTRICTIONS
After discussing export process the main thing is to discuss export process in those countries on which quota is levied. Mostly European countries use quota restrictions. These countries inform exporting that how much they can export. Then through associations like Textile mills Association the companies are informed about the quota. The association distribution the quota on the basis of option and past performance. If a company, due to certain reasons, cannot expert then they sell the quota in the open market.

ROLE OF GOVERNMENT IN EXPORT:

To boost up exports, Government has given rebate facility to the exports. The Fazal Cloth mills is also availing this facility. They are getting rebate on packing material and the chemicals used in the polythene bags.

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FAZAL CLOTH MILLS

DATA PROCESSING DEPARTMENT

E.D.P. MANAGER

Programmer

Computer Co-ordinator

Assistant programmer

Operator Operator

Operator

Operator

A successful businessman always has a curiosity and keenness to know about the requirements of the age and tries to adopt the new technology to services in the competing world. In the mid of 19 th century a same invention attracted all the progressive and foresighted people. It was the introduction of the computer. The computer makes able a businessman or industrialist to expand his business. Keeping the manual records up to date is becoming more and more time consuming. Therefore a computer allows you speeding up the processing of transaction and makes enable to expand the business without the need of additional staff.

APPLICATION
The areas, which have computerized, are as under: i. General ledger ii. Inventory control iii. Payroll accounting iv. Purchase accounting
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v. Administration block vi. Sales and receivable vii. Imports viii. Exports There systems help the company in various aspects i.e. time decision, accuracy of work etc. and keeping is ahead in competition.

FUNCTIONS OF DATA PROCESSING DEPARTMENT

I. Training II. Services III. Development

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M. I. S TEAM
FINANCE CONTORLLER
Deputy Finance Manager

Assistant Finance Manager

Assistant Finance Manager

The management information teams of the Fazal Cloth Mills include very competitive and qualified persons. They produce report of different nature. Theses reports are presented to the Finance Controller and the company Directions. Theses reports help the company in timely decision. These report include: Production Report Bank position Report Consolidation Production and Sales Repot Master Payment Plan Fund and Non Fund liabilities Yield and Waste Report Inventory Report Consolidated Production and Sales Report Consolidated Balance Sheet & Profit & Loss Account Ratio Analysis Report Stock Valuation Report Yarn Costing Report Daily Daily Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly As and when required

Those all reports generated in minutes and hours on requirement very accurately and stored on auxiliary media for the future use. Thus M. I. S team is considered as an essential part of the company because of its performance.

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ISO 9000
The ISO 9000 is major consideration for the very type of organization and especially for the industry. No firm can export its production products in future without ISO 9000 certificate. Realizing the situation organization is analyzing the situation for necessary action. This discussion includes the following topics:-

ISO 9000:
ISO 9000 quality system standard are currently one of the highest criteria of quality in the world trade. Up to now more than 65 countries in the world have officially adopted this standard. The European Community (EC) is the most active region in promoting them. Presently companies that produce regulated products, such as medical devices, must be registered. The European Community encourages all producers to register their products.

QUALITY OF MANAGEMENT IN PAKISTAN

The industrial culture undergoes changes from traditional information management to modern formal management. With the wide spread establishment of management schools, increasing collaboration with international companies, and deregulatio9n policies of the Government, the management crises in industries is minimizing. The industries are expanding and people are looking more and more into new avenues for exports. Due to this phenomenon, the competition in both local and export market is increasing.

QUALITY COST IN PAKISTAN

In a survey of more than one hundred companies in Pakistan, through in plant training programs and counseling it was found that the rate of rejection produced in the average Pakistani industries is about 10%. In monetary terms, this ranged from Rs.20 to 150 million per company per year. It is estimated that annual collective loss to Pakistani industries due to Nonconformance in quality is more than Rs.100 billion.

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FAZAL CLOTH MILLS Total cost of quality is even higher. It is an incredible loss about which few are aware of. This national problem needs immediate attention jointly by the Government and the industries.

WHAT IS ISO 9000?

The ISO (International Organization for Standardization) is a world wide federation of national standard bodies who prepare and issue standards. The ISO 9000 series was issued for the first time in 1987 and had a great impact on the manufacturing industries. They establish requirements for Quality Assurance and Quality Management Systems of manufacturing, services and other organizations. They do not refer to any specific technical specification of products. The elements that are described in then cover organizational structure, personal responsibilities, authorities, training procedures, documentation and records, process control and resources allocation for production and all related departments that directly affect the product quality. These standard are generic and apply to all types and size of companies. However, they are written in general terms. While applying these standards to a company, they must be interpreted professionally to suit the applicability. Clear concepts, professionalism and involvement of all employees (from top to bottom) are required. The basic aim of ISO 9000 is to provide a management framework to prevent Non-Confirming in every stage, from design through to after sales servicing. It is a basis for contracts between purchaser and suppliers. ISO 9000 registration is given only after assessment by an approved registration body. There are a number of bodies operating worldwide. A company seeking registration in free to chose any approved registration body. After a company applies to way registration body, its quality auditors, who are specialist in two areas, formally visit the plant, interview personal, evaluate the plant and if it complies with the standards, issue a certificate to the company.

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FAZAL CLOTH MILLS

ABOUT THE COMPANY

The ISO 9002 was awarded to the Fazal Cloth Mills four years before. Now the products of the company are made are maintained the quality. Mr. Anwar is the Coordinator for ISO 9002 program in the company. All the related persons, authorities are doing their efforts to continue the production of cotton yarn up to international standard. A full time ISO 9002 Coordinators is appointed. The organization is enjoying healthy uplift export after maintaining this standard.

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Value chain analysis

Value chain analysis is widely used to determine where cost improvements could be made or value creation improved. This process involves the analysis of all the activities starting from the raw material provisions to the distribution of final product. That is why it is necessary to understand the complete procedure of production and distribution. Organization Value Chain All these activities are broadly categorized into two main heads, which are Primary activities and Support activities. Primary Activities The primary activities of the organization are grouped into five main areas: inbound logistics, operations, outbound logistics, marketing and sales & services. Cottonseed oil mills perform the inbound activity in Fazal cloths Mills, which provide basic raw oil to firm. This activity should be efficient in order to increase recovery rate by obtaining good quality oil. So in order to receive good quality of oil, Fazak Cloth Mills has its own cotton factories which provide required quality of cottonseeds. The operations are the production process of ghee/oil where the major value addition is made. The management subcontracts the outbound activity, and the distribution is through dealers. The company owner believes that marketing has no benefit until unless they dont utilize the enough production capacity.

Production Process When decanting tanks of oil entered in the factory first of all they have stored in main storage tanks with the help of pumps. Then they transfer oil from main storage to refinery section where first of all the oil pass through pre-neutralizer then through post-neutralizer then after filtration they pass ghee and oil from pre-bleacher and then post bleacher. Then they pass ghee and oil from deodorization then after deodorization they got the oil in the final stage where as for ghee they pass for hydrogenation at particular temperature in the presence of nickel then after filtration they got ghee in the final stage which is free from nickel. Support Activities The support activities can be divided into four groups, which are procurement, technology development, human resource management and infrastructure. As the prime input of ghee is available locally and some material has to import from out side countries. So procurement for long time is not possible in case of raw material, which is locally available. Where as the material that has to be import the company has a lead-time of 2-3 months. So the department of inbound logistics is sufficiently performing the activity of procurement. R & D and Process development researches are very important in ghee/oil industry in Pakistan. So in the company value chain this thing should be emphasized much, rather

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FAZAL CLOTH MILLS it has a big contribution in total value addition. Human resource management involves the training and development of workers and employees in order to increase their productivity and efficiency. For this purpose company make their employees to work with the senior worker to get the experience, but they dont have any separate training program for new employees. The company has good planning, quality control systems and future orientation, which although does contribute directly in value addition and increase the effectiveness of whole process. The organization has the policy that the dealer who distributes their product will not distribute the products of any other competitors or substitute. Analysis All the value creation does not happen in the organization itself rather much of it can be occur in the supply and distribution chains. So the whole process needs to be analyzed. For this purpose we can divide it into three areas: suppliers, organization and channel members. Suppliers Suppliers play a very vital role in total value creation. The whole of the profitability depends upon the quality of raw material; if supplier does not provide the good quality of oil then the desired level of quality of ghee/oil cannot be achieved. The price structure of the country de-motivates the grower to produce better quality of cottonseed. But good relationship with the suppliers and fair and prompt payment can enforce the grower to cultivate better variety. Organization Within the organization the value addition activity is focused only on ghee/oil production, which is their core competence. In order to provide the superior quality of ghee/oil to customers, Fazal Cloth Mills pass the raw material from two different machines. Channel Members There is a difference of 1-2 rupees per Kilogram in the Ex-mill price and market price and the middlemen create this difference. As shown in the distribution network diagram, the ghee/oil is not directly sold to the ultimate consumer rather it goes through a long process. And everyone involves in this process take its share in terms of commission. Here the value addition takes place in terms of price increase.

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FAZAL CLOTH MILLS

SWOT ANALYSIS SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. Once key issues have been identified, they feed into marketing objectives. It can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Force analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Strength could be: Your specialist marketing expertise. A new, innovative product or service Location of your business Quality processes and procedures Any other aspect of your business that adds value to your product or service. A weakness could be: Lack of marketing expertise Undifferentiated products and service (i.e. In relation to your competitors) Location of your business Poor quality goods or services
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Damaged reputation Opportunities and threats are external factors. For example: An opportunity could be: A developing market such as the Internet. Mergers, joint ventures or strategic alliances Moving into new market segments that offer improved profits A new international market A market vacated by an ineffective competitor A threat could be: A new competitor in your home market Price wars with competitors A competitor has a new, innovative product or service Competitors have superior access to channels of distribution Taxation is introduced on your product or service

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FAZAL CLOTH MILLS

STRENGTHS
1. 2. 3. 4. 5. ISO 9000 Certification. WRAP Certified Vertically integrated. High quality products. Excellent market image in the local and international market. 6. 7. 8. 9. Highly qualified management. Adequate financial resources. Competitive advantage. Adopting information technology.

WEAKNESSES

1. Increased employee turnover 2. Centralized management system 3. High cost of production. 4. Low production capacity. 5. De-motivated Staff. 6. Non-Corporative culture. 7. Insufficient benefits for the employees. 8. Stereotype machinery for processing. 9. Communicational gap among different departments.

10. Recruitment on merit. 11. Loyal customers. 12. Skilled Labor. 13. Broad and motivational vision. 14. Back Track System

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OPPORTUNITIES

THREATS 1. Entry of new competitors just like China & India. 2. Buyer need and demand changes. 3. Political instability. 4. Changing situation. 5. Change policies. 6. Low price offered by competitor 7. Globalization. of government geopolitical

1. Can expand its division such as entering in weaving sector also. 2. Can introduce its own label in domestic as well in international market 3. Can capture segment. new market

4. Full potential of entertaining the local market. 5. Can reduce the cost by proper utilization of resources. 6. End of quota restrictions by the end of year 2009. 7. Can hire well-educated and experienced staff.

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Observations & Suggestions

As the Textile Industry is in crisis but Fazal Cloth Limited is performing very well in such difficult economic conditions. The avenues are always open for further improvement. I hope that the suggestions given by me will not only benefit to the management for getting business but the workers will also efficient in performing their duties. There is centralization of authority. All the decisions are taken by the Chief Executive and Working Directors. The authority should be decentralized, because delegation of authority creates responsibility. If the management will delegate some authority to the employees then employees will feel themselves responsible and they would work with zeal, by doing this the top management can save important time which will be utilize in other matters which will benefit the organization. Because the delegation of authority creates the confidence among the employees and they will perform their work efficiently. I would like to recommend that the management should develop some policies for the promotion of efficient workers. As there is no any policy for the promotion of workers so it is creating unrest among the workers. The management should make sound policies for the promotion of efficient workers. This will not only increase the productivity of workers but the management can low the turnover rate of employees.

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FAZAL CLOTH MILLS There is need for refresher courses for the managerial level employees. If the owners would make arrangement to provide training to the employees then they would work efficiently. By doing this the productivity of the employees will increase. The culture of the organization should be made

according to the well established organization. The control of the Top Management should be strict over the employees so that employees will take responsibility for their assigned job. Proper training should be given to new employees as well as to existing employees for improving their efficiency and productivity. There is no any procedure for evaluating the employees and hence there are no extra benefits to the efficient employees. The Owners should start some criteria for the evaluation of employees and there should be some reward for efficient workers. This reward may be non monetary such as Employees of the Day, Employees of the Month, Employees of the Year. This will not increase any monetary burden but will increase the efficiency and productivity of the worker. Similarly, some monetary benefits should also be given to the employees on better performance of the work. There is flat rate of increment for all the employees. This flat rate is also minimal. This is breeding discontent among the employees. This flat rate should be abolished

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FAZAL CLOTH MILLS and increment should be given on the basis of

performance and efficiency. There is lack of staff members in the office, so new employees should be appointed for the proper working and removing burden on other employees to achieve efficiency and better results.

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