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A STUDY ABOUT PRODUCITVITY LEVEL IN

NATURAL CAPSULES LIMITED, PUDUCHERRY
SUMMER PROJECT REPORT
Submitted by
M. SARAVANAN
REGISTER NO.: 27348336
Under the Guidance of
Mrs. M. JANAKIRAMA, M.B.A., P.G.D.C.A.,
Faculty, Department of Management Studies
In partial fullfilment of the award of degree of
MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES
SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE
PONDICHERRY UNIVERSITY
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PUDUCHERRY
SEPTEMBER 2007
SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE
MADAGADIPET, PUDUCHERRY
DEPARTMENT OF MANAGEMENT STUDIES
BONAFIDE CERTIFICATE
This to certify that the project work entitled A STUDY ABOUT PRODUCTIVITY
LEVELS IN NATURAL CAPSULES LIMITED is a bonafide work done by
M.SARAVANAN [ REGISTER NO: 27348336 ] in partial fulfillment of the requirement for
the award of Master of Business Administration by Pondicherry University during the academic
year 2006 2008.
GUIDE HEAD OF DEPARTMENT
Submitted for Viva-Voce Examination held on
EXTERNAL
EXAMINER
ACKNOWLEDGEMENT
First and foremost, I thank the God for his substantial blessing and mercy at all stages in the
completion of the project.
I take this opportunity to express my deep sense of gratitude to SHRI.N.KESAVAN, Founder

Chairman, SHRI.M.DHANASEKARAN, Managing Director and SHRI.S.V.SUGUMARAN,
Vice-Chairman of our college for their good wishes for this project.
I express my immense gratitude to my Principal DR.V.S.K.VENKATACHALAPATHY for his

support and encouragement for the completion of my project.
I extend the immense gratitude to the Head of the Department MR.S.JAYAKUMAR for his
motivation, inspiration, and encouragement for the completion for my project.
The valuable and unflinching requital support in this Endeavor MRS.M.JANAKIRAMA my

internal guide, Department of Management Studies whose assistance was immeasurable to the
completion of this project.
I also thankful to all other faculty members of the department for the constant co-operations and
encouragement in pursuing my project work.
I am sincerely thankful to MR.V.SIVA, Administrator for giving me an opportunity to do this

project work at NATURAL CAPSULES LIMITED, Puducherry and for guiding me throughout
the project duration.
My heart gratitude to all employees of NATURAL CAPSULES LIMITED, Puducherry for

providing me details about the company for the completion of the project. Last, but not the least, my
heart felt gratitude to my parents, relatives and my friends for their constant encouragement, support,
help and valuable advice to make this project a success.
ABSTRACT
The study was carried out at NATURAL CAPSULES LIMITED. The study is related to the
productivity levels. An analysis was taken among the various input in NCL to know their
productivity levels and studying relationship between revenue and cost in relation to sales
volume of a business enterprise.
The data required for the study were collected from both primary and secondary sources. The
primary data were collected through the personal interview and discussions with production
manager, administrator, cost accountant, etc., who were responsible for production department in
Natural Capsules Limited. The secondary data were collected mainly from of accounts, annual
reports and other publications of Natural Capsules Limited.
One of the main areas of the project is the analysis part, where the data are analysis &
interpretation was done, to find out how the factors of production are managed. Different
productivity measures and trend analysis were used to analysis the productivity levels. And
also Break even analysis and Margin of safety were analysed.
The study reveals that the data collected from the study conducted, is observed the
productivity levels are not satisfied in that organization. So the management will
control the different factors of production in future means the productivity levels
will be improved. By this productivity improvement the organization will be more
profitable.
And then conclusions, limitations & scope for further study were discussed.
CONTENT
CHAPTER
TITLES
PAGE NO
LIST OF TABLES
LIST OF CHARTS
INTRODUCTION
1
PROFILE OF THE COMPANY

2
CORPORATE VISION & MISSION

3
I
PRODUCT
5
MANUFACTURING PROCESS
6
NEED FOR THE STUDY
9
II
REVIEW OF LITERATURE
10
III
OBJECTIVES OF THE STUDY
20
IV
RESEARCH METHODOLOGY
21
V
DATA ANALYSIS AND INTERPRETATION
23
VI
FINDINGS OF THE STUDY,
45
47
SUGGESTION AND RECOMMENDATIONS
VII
CONCLUSION
49
VIII
LIMITATIONS OF THE STUDY
50
SCOPE FOR THE FUTHER STUDY

51
BIBILIOGRAPHY
52
LIST OF TABLES
Table No.
Name of the Table
Page No.
5.1.1
Material productivity
23
5.2.1
Labour productivity
26
5.3.1
Capital productivity
29
5.4.1
Energy productivity
32
5.5.1
Othermanufacturing expenses productivity
35
5.6.1
Total productivity
38
5.7.1
Sale and cost
41
5.7.2
Break even analysis
43
LIST OF CHARTS
Chart No.
Name of the Charts
Page No.
5.1.1
24
5.2.1
Labour productivity
27
5.3.1
30
5.4.1
Energy productivity
33
5.5.1
Other manufacturing expenses productivity
36
5.6.1
Total productivity
39
5.7.2
Break even analysis
44
CHAPTERI
INTRODUCTION
Productivity is being better today than yesterday, and that tomorrow will be
better than today
The concept of what is better and how to become better is changing. Productivity is now seen to
depend on the value of the products and services and the efficiency with which they are produced
and delivered to the customers.
Productivity is the result or the sum of all effort that it takes to deliver a product or service.
Productivity is frequently referred to as output and, to some degree, can be measured. The output
generated by a person, organization, or other entity is measured in terms of (the number of) units
or items produced and services performed within a specified time frame. Thus, productivity is the
economic value of goods and services. It becomes the value or result of the "price" of a product
or service minus all "costs" that go into the effort.
Total productivity is a productivity measure that incorporates all the inputs required to make a
product or provide a service. The inputs could be grouped in various categories as long as they
determine the total inputs required to produce an output.
PROFILE OF ORGANISATION
Natural Capsules Limited is a Public Limited Company established in the year 2003 at
Pondicherry, Its head quarters were located in Bangalore established in the year 1993. Natural
Capsules Limited is a well-equipped modern manufacturing plant to manufacture Hard Gelatin
Capsule shells, Hard Cellulose Capsule shells and Pharmaceutical Dosage Forms in Capsule
Dosage Form. The logical integration of NCL hard shell manufacturing to formulation was
initiated in the year 1998.
NCL is having an on going research and development activity to develop value added products.
The company has successfully exported Gelatin Capsules to mainly South-East Asian countries.
These capsules are also sold in domestic and also exported to several countries. The Company
meets the statutory requirements as laid down by the authorities in respect to cGMP and cGLP
practices. Since its inception, Natural Capsules has ensured to provide turnkey solutions to all its
customers.
The Pharmaceutical and Dietary supplement industries count on Natural Capsules to supply hard
two-piece Gelatin and Cellulose capsules. With manufacturing sites at Bangalore and
Pondicherry, we are serving customers on quick service no matter where they are located. For the
past 12 years, with the greatest respect to the Customers, Natural Capsules has dedicated itself to
the production of the highest quality capsules.
OBJECTIVES OF THE ORGANISATION
The main objective of the company is to manufacture and market Hard Gelatin Capsule shells
and Hard Cellulose Capsule Shells
Vision Statement
Natural Capsules is committed to:
Be the Global Leader for supply of Cellulose Capsules
Providing superior Quality two-piece hard Gelatin Capsules
Be the Best Service provider to the Customers all around
Invest in Research and Development of new capsule technologies and application
Mission Statement
Internationally benchmarked Quality and Regulatory Systems
Customer relationship through outstanding products and services
State of the art manufacturing facilities
To understand our customer needs and adding value to our customers
products, so that we grow together
Natural Capsules believes in a mission to constantly innovate and produce products that are an
outcome of responses received from the market as well as its customers. Natural Capsules assures
to provide the Highest Quality products on a consistent basis both to its National and
International customers. We truly believe in Relating Technology to Nature..
Organizational Chart
Natural capsule Ltd. Unit II Puducherry.
MANAGING DIRECTOR
GENERAL
SR. MANAGER
PER. & ADMIN.

MANAGER
ADMIN.
EXICE / SALES
TAX PURCHASE
STATUTORY
COMPLIANCE
PRODUCTION
UTILITY
SR. MANAGER QA
MANAGER
MANAGER
IPQC
PLANT
WORKSHOP
INSPECTOR
OPERATORS
OPERATORS
GEL. ROOM
TECHNICIANS
CHEMISTS
ANALYTICAL
CHEMISTS
ASST. MANAGER AIR
ELECTRICIANS
CONDITIONING DEPT.
ASST.
MANAGER
PRINTING
E.T.P
STORING
DEPT.
INCHARGE
PRODUCTS
About Products
NCLs constant endeavor to research & most customer specific requirement has resulted in
manufacture of a wide range of capsules. The Cellulose capsules and newly introduced variants
form a part of NCls niche products. NCLs facility of dedicated manufacturing lines adopts
stringent procedures to manufacture Hard Gelatin Capsules. Each of this manufacturing line is
housed as an independent unit to eliminate the risk of cross contamination.
NCL manufactures Hard Capsules for pharmaceutical and dietary supplement industries in sizes
00, 0el, 0, 1, 2, 3 & 4. All operations are assured through our comprehensive QA procedures to
conform to Indian Pharmacopoeia and United States Pharmacopoeia standards and the specific
requirements of the customers.
PRODUCTS
o Hard Gelatin Capsule Shells
o Hard Cellulose Capsule Shells
o BSE / TSE Free Gelatin Capsule Shells
o Shiny Gelatin Capsule Shells
o SLS Free Gelatin Capsule Shells
o Halal Certified Gelatin Capsule Shells
o Fortified Gelatin Capsule Shells
o Sweet Gelatin Capsule Shells
o Fast Release Gelatin Capsule Shells
o Printed Gelatin / Cellulose Capsule Shells

MANUFACTURING PROCESS
Product: Empty hard gelatin capsules
Raw materials:
The main raw materials required for the manufacture of gelatin capsules is capsule grade gelatin
granules. This is proposed to be procured indigenously and is available in plenty in the country
today. The major manufacturers of gelatin granules in the country today are M/s. Narmada
Gelatin ltd., Chennai, Raymon Glue Chemicals, Baroda, M/s. Sterling Bio-tech., Ooty.
Process:
The gelatins are weighed as per the batch size and prepare the gel (paste) to the melter mix for
the purpose of uniform mix at a uniform temperature. From the metler mixer the paste (gel) is
loaded to the trollies which will be mounted on the capsulation machine. When machine switched
on the pin bars will move horizontally in the process these pin bars are moved in different
temperature monitors, which will helps in formation of capsules on the pin bars. Then trimmer at
other end of the machine will cut or trim the capsules to pre determined sizes. Then the capsules
body and cap will join automatically. These capsules are collected and packed on to sorting
department for sorting the defective ones. After sorting good quality capsules are sent to packing
section for final packing.
For a specific request from the buyers the capsules are overprinted as per their requirements such
as product name, brand name and logos of the respective companies.
End users:
The company proposes to manufacture empty hard gelatin capsules for use in the pharmaceutical
industry, Gelatin capsules are used for filling oral drugs and medicines, capsules are generally
manufactured in sizes 0,1,2,3,4 and5. the major areas of usage are analgesics, antipyretics, non-
steriods, anti-inflammatory, chemotherapy and antibiotics.
Process Flow Chart
Hard Gelatin Capsule Shells
Hard Cellulose Capsule Shells

Facilities
Manufacturing capacity of more than 3 billion capsules per annum
Isolated and dedicated Automatic Manufacturing Lines for manufacturing Hard Gelatin
and Hard Cellulose capsule shells of sizes 00, 0el, 0, 1, 2, 3 & 4
Capability of Circular and Linear printing on capsules. Printing can
be customized and can be done in two colors
Capsules are sorted online through Automatic Diametrical Sorting machines
A continuous and dedicated effort of the R & D team ensures development of innovative
ideas & implementation of those ideas.
Each of the manufacturing line is housed as an independent unit to eliminate the risk of
cross-contamination
Usage of Automatic machines for encapsulation in dosage form
Various types of packaging are available for Formulations of non-betalactom,

neutraceutical & herbal products
Services we offer
Contract Research in Synthetic Chemistry.
Dosage Development.
Dossier in CTD Format.
Manufacturing of APIs and Finished Dosage Forms.
Development of Dossiers/ ANDAs for products of the customers choice.
Contract Research and Analytical
Online Enquiry
Contract Manufacturing
Chating Services
NEED FOR STUDY
The success of any manufacturing organization depends largely on the productivity.

High productivity refers to doing the work in a shortest possible time with least
expenditure on inputs without sacrificing quality and with minimum wastage of
resources.
The NATURAL CAPSULES LIMITED is a manufacturing unit to manufacture the

hard gelatin capsules, so they need to know the productivity levels, this study was
mainly undertaken to identify the different productivity leveling NCL and also to
know the relationship between revenue and cost in relation to sales volume of a
business enterprise.
This study helps the Natural Capsules Limited to identify the ways to improve the
productivity to the highest possible level and to reduce the maximum wastage of
resources and also helps to improve the profit level of that organization.
CHAPTER II
REVIEW OF LITERATURE
MEANING OF PRODUCTIVITY
Productivity is a relationship between the output (product/services) and the input (resources
consumed in providingthem) of a business system.
Output Productivity = -------------------
Input
For the survival of any organization, this productivity ratio must be at least 1. If it is more than
one, the organization is in a comfortable position. So, the objective of the organization should be
to identify ways and means to improve productivity to the highest possible level.
Definitions of productivity:
Productivity is a function of providing more and more of everything to more and more people
with less consumption of resources.
The volume of output attained in given period of time in relation to the sum of the direct and
indirect efforts expended in its production.
Productivity is the multiplier effect of efficiency and effectiveness.

DIFFERENT PRODUCTIVITY MEASURES
It shows the quantitative relationship between the total output and the material input
Material productivity = Total output

Material input
Labour productivity
It shows the quantitative relationship between the total output and the material input
Labour productivity = Total output

Labour input
It shows the quantitative relationship between the total output and the Capital input
Capital productivity = Total output

Capital input
Energy productivity
It shows the quantitative relationship between the total output and the Energy input
Energy productivity = Total output

Energy input
Other manufacturing productivity
It shows the quantitative relationship between the total output and the other manufacturing
expenses input
Other manufacturing expenses productivity = ___________Total output________

Other manufacturing expenses input
Total productivity
It shows the quantitative relationship between the total output and the total resources input
(material, labour, capital, energy, and other manufacturing expenses)
Total productivity =
Total output
(Material +labour+ capital +energy+ other manufacturing expenses) input
FACTOR INFLUENCING PRODUCTIVITY
Factors influencing productivity can be classified broadly into two categories
(a) internal factor and (b) external factor
INTERNAL FACTOR
o Product factor
o Plant and equipment o Technology
o Material
o Energy
o Human factor o Work method
o Management style
EXTERNAL FACTOR
o Government policies o Infrastructure

o Natural resources
SEVERAL STRATERGIES FOR IMPROVING PRODUCTIVITY
Increased output for the same input.
Decreased input for the same output.
Proportionate increase in output is more than the proportionate increase in the input.
Proportionate decrease in input is more than the proportionate decrease in output.
Simultaneous increase in the output with decrease in the input.
Increased output for the same input
In this strategy, the output is increased while keeping the input constant. Let us assume that in a
steel plant, the layout of he existing shops is not proper. By slightly altering the location of the
billet-making section, i.e. bringing it closer to the furnace which produces hot metal, the scale
formation at the top of ladles can be reduced to a greater extent. The molten metal is usually
carried in ladles to the billet-making section. In the long run, this would give more yield in terms
of tons of billet produced. In this exercise, there is no extra cost involved. The only task is the
relocation of the billet-making facility by shifting it closer to the furnace which involves
insignificant cost.
Decreased input for the same output
In this strategy, the input is decreased to produce the same output. Let us assume that there exists
a substitute raw material to manufacture a product which has the required properties and it is
available at a lower price. If we can identify such material and use it for manufacturing the
product, then certainly it will reduce the input cost. In this exercise, the job of the purchase
department is to identify an alternate substitute material. The process of identification does not
involve any extra cost. So, naturally, the productivity ratio will increase because of the decreased
input by way of using the cheaper raw material to produce the same output.
Proportionate increase in the output is more than the proportionate
increase in the input
Consider the example of introducing a new product into the existing product mix of an
organization. Let us assume that the existing facilities are not fully utilized. So, the R&D wing of
the company has identified a new product which has a very good market and which can be
manufactured with the surplus facilities of the organization. If the new product is taken up for
production, then the following will result.
There will be an increase in the revenue of the organization by way of selling the new product in
addition to the existing product mix.
There will be an increase in the material cost, and operation and maintenance cost of machineries
because of producing the new product.
If we closely examine these two increases, we find that the proportionate increase in the revenue
will be more than the proportionate increase in the input cost. Hence, there will be a net increase
in the productivity ratio.
Proportionate decrease in the input is more than the proportionate decrease in

the output
Let us consider the reverse case of the previous example, i.e. dropping an uneconomical product
from the existing product mix. This will result in the following:
There will be a decrease in the revenue of the organization because of dropping a product from
the existing product mix.
There will be decrease in the material cost, and operation and maintenance cost of
machineries because of dropping an existing product from the product mix.
If we closely examine these two decreases, we find that the proportionate decrease in the input
cost will be more than the proportionate decrease in the revenue. Hence, there will be a net
increase in the productivity ratio.
Increase in the output with decrease in the input:
Let us assume that advanced automated technologies like, Robot, Automated Guided Vehicle
System (AGVS), etc., are available in the market which can be employed in the organization of
our interest. The outcome of these modern tools can be summarized as followings.
There will be a drastic reduction in the operation cost. Initially, the cost on equipment would be
very high. But, in the long run, the reduction in the operation cost would break-even the high
initial investment and offer more savings on the input.
These advanced facilities would help in producing more number of goods because
they dont experience fatigue. The increased production will therefore yield more revenue.
In this example, there is an increase in the revenue while there is a decrease in the input in the
long run. Hence, the productivity ratio will increase at a faster rate.
Productivity Trend Analysis
Productivity is an important field for the production and financial management. In production
analysis the direction of change over a period of time is of crucial importance. It is therefore,
very essential for a production manager to make a study about the trend and direction of
productivity
For the productivity analysis, the indices of Material input, Labour input, Capital input, Energy
input, other manufacturing input and Total output have been calculated.
Break even analysis
Break even analysis is the method of studying relationship between revenue and cost in relation
to sales volume of a business enterprise.
According to Matz Curry & Frank a break even analysis determine at what level cost and
revenue are in equilibrium.
Terminologies used in Break even analysis:
Contribution
It is a difference between sales and the variable cost of sales. Contribution = Sales - variable cost.
Profit Volume Ratio
It expresses the relationship of contribution to sales. It is popularly known
as P/V Ratio.
P/V Ratio = Contribution X 100

Sales
Break even point
It may be defined as that point of sales volume at which total revenue is equal to total cost. It is
the point of NO Profit and No Loss. If sales is increased behind these level there shall be profit to
the organization.
Break even point = Fixed cost (Sales volume) P/V Ratio

Margin of Safety
It indicates the value/volume of sales directly contribute to profit, as fixed
cost have already been recovered at Break even point.
Margin of Safety = Actual Sales Break even sales.
Margin of Safety ratio = Margin of Safety X 100

Actual sales
Break Even Chart
It shows the interrelationship between cost, volume and profit. It is considered to be a most
useful graphical representation of accounting data.
JAPANESE SHISEIDO CORPORATION
(Suggestion for increase the productivity)
Companies can increase productivity in a variety of ways. The most obvious methods involve
automation and computation which minimize the tasks that must be performed by employees.
Recently, less obvious techniques are being employed that involve ergonomic design and worker
comfort. A comfortable employee, the theory maintains, can produce more than a counterpart
who struggles through the day. In fact, some studies claims that measures such as drastic effect
on office done by productivity. They suggest that productivity could be increased by means of
perfuming or deodorizing the air conditioning system of work place. Increase the productivity
also can influence society more broadly, by improving living strands, and creating income.
NEW CONCEPTS OF PRODUCTIVITY AND ITS IMPROVEMENT
Arturo L. Tolentino
The globalization of manufacturing and the increased concern about social and ecological issues
make productivity improvement more important. At the same time, a broader meaning of
productivity calls for a wider set of indicators to catch and reflect the new elements and
parameters involved. The broader conception of productivity is incorporating wider definitions of
what the outputs and inputs are of the production-distribution process. The social and ecological
impacts are now increasingly considered as outputs of the production process in addition to the
traditional physical and value measures of outputs. Similarly, the social and ecological costs are
now also being recognized as inputs in the productivity equation. With increasing concerns on the
social and ecologic impacts of the operations of enterprises, the definitions of what are inputs and
outputs are changing. Social and ecological inputs and outputs are increasingly being factored-in
the efficiency and effectiveness performance of the enterprise.
European productivityagency
Productivity is an attitude of mind. It is the mentality of progress, of the constant improvement

of that which exists. It is the certainty of being able to do better today than yesterday and
continuously. A major problem with productivity is that it means things to many people.
Economists determine it from Gross National Product (GNP), managers view it as cost cutting
and speed up, engineers think of it in terms of more output per hour. But generally accepted
meaning is that it is the relationship between goods and service produced and the resources
employed in their production.
Rgis Bonnelli - Ministry of Economy
From the point of view of global manpower productivity - measured by the production/ potentially
active population ratio - it is only possible to increase its value in the medium term by increasing
production (numerator of the fraction). The solution of deliberately reducing the denominator
fortunately has not been considered since the defeat of Nazism. It is an elementary question that to
maintain constant the number of busy or employed people, and at the same time to increase the
manpower productivity it is necessary to increase the production in the same proportion. For a
country with a growing potentially active population it is necessary to grow even more in order to
maintain the occupation rate. Exporting workers - which in a way we are already doing - does not
seem a desirable solution for a country with natural resources like Brazil.
CHAPTER III
OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVE:
To find out the over all performance and different productivity in operational unit.
SECONDARY OBJECTIVES:
To suggest to improve the productivity level.
To compare performance of each resource amongst one another.
To ascertain the value of sales at which the total cost are equal to revenue.
To ascertain the margin of safety.

CHAPTER IV
RESEARCH METHODOLOGY
RESEARCH
Research is a process in which the researcher wishes to find out the end result for a given
problem and thus the solution helps in future course of action. The research has been defined as
A careful investigation or enquiry especially through search for new facts in branch of
knowledge
RESEARCH DESIGN
The research design used in this project is Analytical in nature the procedure using, which
researcher has to use facts or information already available, and analyze these to make a critical
evaluation of the material.
NATURE AND SOURCE OF DATA
Primary Sources
Data are collected through personal interviews and discussion with the administrator production
manager, accountant and who were responsible for production department of NCL.
Secondary Sources
From the annual reports maintained by the company. Books and journals pertaining to
the project.
Data are collected from the companys website.
PERIOD OF STUDY
The present study has taken into account Four years viz., 2001-2002 to 2004-2005.
TOOLS USED IN ANALYSIS
DIFFERENT PRODUCTIVITY MEASURES:
Material Productivity Labor productivity Capital productivity Energy

productivity
Other manufacturing expenses productivity Total productivity
Productivity measures to calculate the different types of productivity in that firm.
TREND ANALYSIS
Productivity trend analysis to know the changes over a period of time.
BREAK EVEN ANALYSIS & MARGIN OF SAFETY
Break even analysis helps to know the relationship between the different cost.
CHAPTER V
DATA ANALYSIS AND INTERPRETATION
5.1 Material Productivity
TABLE 5.1.1
Year
2001 2002
2002 2003
2003 2004
2004 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Material
3,06,60,847
3,11,37,954
3,79,64,809
5,15,63,400
Input
Material
1.99
1.96
2.01
1.92
productivity
Inference
This Material productivity table shows the quantitative relationship between the Material input
and the Total output (goods produced) of the company, which registered a fluctuating trend
throughout the study period from 1.96 to 2.01. This productivity varied from during the study.
The average productivity is 1.97, this implies that Natural Capsules Limited maintaining a
considerable level of material input in proportion to total output.
CHART 5.1.1
Material Productivity
2.02
1.98
1.96
1.94
1.92
1.9
1.88
1.86
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y ; b = XY
2
n X
MATERIAL PRODUCTIVITY
Material
YEAR
x
X = x 2.5
2
X
productivity
XY
2001-2002
1
-1.5
2.25
1.99
-2.99
2002-2003
2
-0.5
0.25
1.96
-0.98
2003-2004
3
0.5
0.25
2.01
1.01
2004-2005
4
1.5
2.25
1.92
2.88
TOTAL
5.90
7.88
-0.08
a
=
7.88
=
1.97
b
=
-0.08
=
-0.01
5.90
= 1.97 0.1 (2.5)
1.93
Inference:
By using trend analysis we can found that the MATERIAL PRODUCTIVITY for the year 2006-
2007 will be about 1.93
5.2 Labour productivity
TABLE 5.2.1
Year
2001 - 2002
2002 - 2003
2003 - 2004
2004 - 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Labor input
40,51,302
50,68,318
66,53,065
91,33,496
Labor
15.12
12.09
11.46
10.89
productivity
Inference
This Labor productivity table shows the quantitative relationship between the Labor input and the
Total output (goods produced) of the company, which registered a fluctuating trend throughout
the study period from 10.89 to 15.12. This productivity varied from during the study.
considerable level of labor input in proportion to Total output
CHART 5.2.1
Labour productivity
16
14
12
10
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y
;
b = XY
2
X
LABOUR PRODUCTIVITY
Labor
YEAR
x
X = x 2.5
2
X
productivity
XY
2001-2002
1
-1.5
2.25
15.12
-28.68
2002-2003
2
-0.5
0.25
12.09
-6.01
2003-2004
3
0.5
0.25
11.46
5.73
2004-2005
4
1.5
2.25
10.89
16.34
TOTAL
5.90
49.56
-6.62
a
=
49.56
=
12.39
b
=
-6.62
=
-1.66
5.90
= 12.39 1.66 (2.5)
6.58
Inference:
By using trend analysis we can found that the LABOUR PRODUCTIVITY for the year 2006-
5.3 CAPITAL PRODUCTIVITY
TABLE 5.3.1
Year
2001 - 2002
2002 - 2003
2003 - 2004
2004 - 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Capital input
59,82,948
59,80,562
68,19,867
78,36,192
Capital
10.24
10.25
11.18
12.69
productivity
Inference:
This Capital productivity table shows the quantitative relationship between the Capital input and
the Total output (goods produced) of the company, which registered a fluctuating trend
throughout the study period from10.24 TO 12.69. This productivity varied from during the study.
considerable level of capital input in proportion to Total output
CHART 5.3.1
14
12
10
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y
;
b = XY
2
X
CAPITAL PRODUCTIVITY
Capital
YEAR
x
X = x 2.5
2
X
productivity
XY
2001-2002
1
-1.5
2.25
10.24
-15.36
2002-2003
2
-0.5
0.25
10.25
-5.13
2003-2004
3
0.5
0.25
11.18
5.59
2004-2005
4
1.5
2.25
12.69
37.73
TOTAL
5.90
44.36
22.83
a
=
44.36
=
11.09
b
=
22.83
=
3.87
5.90
= 11.09 + 3.87 (2.5) = 24.63
Inference:
Byusing trend analysis we can found that the CAPITAL PRODUCTIVITY for the year 2006-
5.4 ENERGY PRODUCTIVITY
TABLE 5.4.1
Year
2001 - 2002
2002 - 2003
2003 - 2004
2004 - 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Energy input
68,61,514
73,79,506
1,14,93,432
1,40,63,214
Energy
8.92
8.31
6.63
7.07
productivity
Inference
This Energy productivity table shows the quantitative relationship between the Energy input and
the Total output (goods produced) of the company, which registered a fluctuating trend
throughout the study period from 6.63 to 8.92. This productivity varied from during the study.
considerable level of energy input in proportion to Total output
CHART 5.4.1
Energy Productivity
10
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y
;
b = XY
n
2
X
ENERGY PRODUCTIVITY
Energy
YEAR
x
X = x 2.5
2
X
productivity
XY
Y
2001-2002
1
-1.5
2.25
8.92
-13.38
2002-2003
2
-0.5
0.25
8.31
-4.16
2003-2004
3
0.5
0.25
6.63
3.32
2004-2005
4
1.5
2.25
7.07
10.61
TOTAL
5.09
30.93
-3.61
a =
30.93
=
7.73
b =
-3.61
=
-0.61
5.90
Y=
7.73 - 0.61 (2.5)
=
5.59
Inference:
By using trend analysis we can found that the ENERGY PRODUCTIVITY for the year 2006-
5.5 OTHER MANUFACTURING EXPENSES PRODUCTIVITY
TABLE 5.5.1
Year
2001 -2002
2002 - 2003
2003 - 2004
2004 - 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Other
18,19,725
21,93,140
22,63,450
24,85,315
manufacturing
expenses input
Other
manufacturing
33.66
27.96
33.69
40.02
expenses
productivity
Inference
This other manufacturing expenses productivity table shows the quantitative relationship between
the other manufacturing expenses input and the Total output (goods produced) of the company,
which registered a fluctuating trend throughout the study period from 27.96 to 40.02. This
productivity varied from during the study.
considerable level of other manufacturing expenses input in proportion to Total output
CHART 5.5.1
Other manufacturing expenses productivity
45
40
35
30
25
20
15
10
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y
;
b = XY
2
X
Other
manufacturing
YEAR
x
X = x 2.5
2
X
expenses
XY
productivity
2001-2002
1
-1.5
2.25
33.66
-50.94
2002-2003
2
-0.5
0.25
27.96
-13.98
2003-2004
3
0.5
0.25
33.69
16.85
2004-2005
4
1.5
2.25
40.02
60.03
TOTAL
5.90
135.33
11.96
a
=
135.33
=
33.83
b
=
11.96
=
2.03
5.90
Y=
33.83 + 2.03 (2.5)
=
38.91
Inference:
By using trend analysis we can found that the OTHER MANEFACTURING EXPENSES
PRODUCTIVITY for the year 2006-2007 will be about 38.91
5.6 TOTAL PRODUCTIVITY
TABLE 5.6.1
Year
2001 - 2002
2002 - 2003
2003 - 2004
2004 2005
Total output
6,12,67,111
6,13,22,450
7,62,53,863
9,94,63,512
Material input
3,06,60,847
3,11,37,954
3,79,64,809
5,15,63,400
Labor input
40,51,302
50,68,318
66,53,065
91,33,496
Capital input
59,82,948
59,80,562
68,19,867
78,36,192
Energy input
68,61,514
73,79,506
11,493,432
1,40,63,214
other manufacturing
18,19,725
21,93,140
22,63,450
24,85,315
expenses inputs
Total input
4,93,76,336
5,17,59,480
6,51,94,623
8,50,81,617
Total productivity
1.24
1.18
1.16
1.17
Inference
This total productivity table shows the quantitative relationship between the total input (total
resources used for production) and the Total output (goods produced) of the company, which
registered a fluctuating trend throughout the study period from 1.24 to 1.17. This productivity
varied from during the study.
considerable level of total input in proportion to Total output.
CHART 5.6.1
TOTAL PRODUCTIVITY
1.26
1.24
1.22
1.2
1.18
1.16
1.14
1.12
2001 - 02 2002 - 03 2003 - 04 2004 - 05

TREND ANALYSIS
Y = a + bX
Where a = Y ; b = XY
2
n X
TOTAL PRODUCTIVITY
Total
YEAR
x
X = x 2.5
2
X
productivity
XY
2001-2002
1
-1.5
2.25
1.24
-1.86
2002-2003
2
-0.5
0.25
1.18
-0.59
2003-2004
3
0.5
0.25
1.16
0.58
2004-2005
4
1.5
2.25
1.17
1.76
TOTAL
5.90
4.75
-0.11
a
=
4.75
=
1.19
b
=
-0.11
=
-0.02
5.90
= 1.19 - 0.02 (2.5)
1.12
Inference
Byusing trend analysis we can found that the TOTAL PRODUCTIVITY for the year 2006-
5.7 BREAK EVEN ANALYSIS
TABLE 5.7.1
Sales & Cost Table
Particulars
2001-2002
2002-2003
2003-2004
2004-2005
Sales
6,61,53,810
7,48,83,181
10,38,41,515
11,88,89,233
Variable cost
4,33,93,388
4,57,78,918
55,83,74,754
7,72,45,425
Fixed cost
59,82,948
59,80,562
68,19,867
78,36,192
Total cost
4,93,76,336
5,17,59,480
6,51,94,623
8,50,81,617
INFRENCE
In above table shows the data for different years from 2001-02 to 2004-2005. It shows the
sales volume of the organization.
Variable cost includes material, labour, energy and other manufacturing cost. Fixed cost
includes repair & maintenance and depreciation.
Sample calculation for the period of 2001-2002
Contribution = Sales - variable cost.
6,61,53,810 4,33,93,388
2,27,60,422
P/V Ratio = Contribution X 100

Sales
2,27,60,422 X 100
6,61,53,810
34.40 %
Break even point = Fixed cost (Sales volume) P/V Ratio
59,82,948
40 %
1,73,92,291
Margin of Safety = Actual Sales Break even sales.
6,61,53,810 - 1,73,92,291
4,87,61,519
Margin of Safety ratio = Margin of Safety X 100
Actual sales
4,87,61,519 X 100
6,61,53,810
73.70 %
GRAPICAL REPRESENTATION OF BREAK EVEN SALES
FOR THE YEAR 2001-02
TABLE 5.7.2
BREAK EVEN ANALYSIS
Particulars
2001-2002
2002-2003
2003-2004
2004-2005
Contribution
2,27,60,422
2,91,04,263
4,54,66,761
4,16,43,808
P/V Ratio
34.40 %
38.86 %
43.78 %
35.03 %
Break even sales

1,73,92,291
1,53,90,021
1,55,77,586
2,23,69,946
Margin of safety
4,87,61,519
5,94,93,160
8,82,63,929
9,65,19,287
Margin of safety
73.70 %
79.44 %
84.99 %
81.18 %
Ratio
INFERENCE:
This table shows Contribution, P/V Ratio, Break even sales, are in increasing trend from 2001-
2002 to 2004-2005 for the organization.
Margin of safety & margin of safety ratio also shows increasing trend from 2001-2002 to 2003-
2004 but in the year 2004-2005, shows decline
RELATIONSHIP CHART BETWEEN BREAK EVEN SALES, MARGIN OF

SAFETY & ACTUA L SALES
CHART 5.7.1
12000000
10000000
80000000
60000000
40000000
20000000
2001-
2002-
2003-
2004-
2002
2003
2004
2005
Break even sales
Margin of safety
Actual sales
CHAPTER VI
FINDINGS
It is founded that, there is a variation in the material productivity from 1.99 to 2.01 we
found a small deviation in material productivity, it clearly shows that the NCL company
will not utilize the material input at an optimum level, they utilize some what better but
not an optimum.
The labour productivity showing decreasing trend from 15.12 to 10.89 in the year 2001-
02 to 2004-05, the forecast labour productivity for the year 2006-07 is 6.5, the forecast
labour productivity is also shows decline trend continues so it clearly shows that there is
no effective utilization of labour resource.
The energy productivity showing decreasing trend from 8.92 to 7.07 in the year 2001-02
to 2004-05, the forecast labour productivity for the year 2006-07 is 5.59, the forecast
energy productivity is also shows decline trend continues so it clearly shows that there is
no effective utilization of energy resource.
The capital productivity showing increasing trend from 10.24 to 12.69 in the year 2001-
02 to 2004-05, if we forecast the capital productivity in the year 2006-2007 it shows
24.63, so since it is a increasing trend it shows that the NCL company will use the Capital
input effectively.
There is a variation in the other manufacturing expenses productivity from 27.36 to 40.02,
we found that there is only in the year 2002-03 decrease in other expenses remaining it
will be in increasing stage its clearly tells after the year 2002-03 the company focusing on
other manufacturing expenses that is why after the year 2002-03, other manufacturing
expenses productivity will increase.
The total productivity in NCL for all the years is above one, if the total productivity is
above one the company is in normal position, but the total productivity showing
decreasing trend from 1.24 to 1.17, the forecasting total productivity for the year 2006-07
is 1.12, it clearly tells there is decrease in total productivity, from this we can conclude the
company is not achieving the optimum level of total productivity.
This different productivity measures tells that NCL company used the capital input and
the other manufacturing expenses input some what better comparing to other inputs.
From this it is clearly found that labour input and energy input are not effectively used to
produce the output. Due to that lack of control in labour and energy input, the company
will not reach the optimum productivity level.
The break even sales shows Rs. 1,73,92,291 and the company actual sales is 6,61,53,810,
the company will sell above the break even sales so, it is clearly found that the company
runs in the profitable position.
The Margin of safety ratio showing increasing trend from 73.70 % to 84.99 % in the year
2001-02 to 2003-04, but in 2004-05, margin of safety ratio will decreased to 81.18 %.
SUGGESTIONS AND RECOMMENDATIONS
FOR IMPROVING THE MATERIAL PRODUCTIVITY
The substitute raw material to manufacture a product which has the required properties and it
is available at a lower price. If we can identify such material and use it for manufacturing the
product, then certainly it will reduce the input cost. So, naturally, the productivity ratio will
increase because of the decreased input by way of using the cheaper raw material to produce
the same output.
Proper planning and control of material will help to use the material effectively, result in
increased output, Finally, Material productivity is also increasing.
Try to maximum wastage elimination and Material recycling & reuse will help to increase the
output result in material productivity improvement.
FOR IMPROVING THE LABOUR PRODUCTIVITY
Education, training and development are the basic foundation for raising Labour productivity
levels. The acquisition of expertise through education and training, coupled with the best
equipment and resources within an efficient and safe environment, can be maximized by
developing employees into people who want to learn, who want to work at their potential, and
who want to continuously improve, These factors are best achieved when an employee is
motivated to take pride in the work he or she does. A motivated, self-starting employee is one
who adds value to an organization and contributes to the overall productivity of him or
herself, a work group in an organization.
Utilize the labour effectively will increase the output result in improvement in labour
productivity.
Eliminate the unwanted labour will decrease the labour input cost, This also result in increase
in labour productivity.
FOR IMPROVING THE ENERGY PRODUCTIVITY
Efforts to reduce energy consumption bring about considerable improvement in productivity.

Optimum energy utilization and energy savings, This will help to increase the Energy
productivity.
FOR IMPROVING THE TOTAL PRODUCTIVITY
The only way to improve the total productivity is to increase the output with same input by
effective utiliasition of all the factors of production (Material, Labour, Energy, Capital, and
Other manufacturing expenses).
In NCL, Material, Labour, and Energy inputs are in decline stage so, if they utilize this three
inputs effectively then automatically it will increase the output then result in total productivity
improvement.
When all factors operate at optimum, the productivity is said to be at its highest level, so NCL
operate its factor at a optimum point then they achieve the highest productivity level.
CHAPTER VII
CONCLUSION
From the study it was found that the productivity levels in Natural Capsules Ltd is not optimum
level. Thus it can said that management can improve the productivity level by effective use of
resources. High productivity refers to doing the work in a shortest possible time with least
expenditure on inputs without satisfying quality and with minimum wastage resource. So, this
helps the management to achieve the optimum level of profit.
Any one need not search for opportunities for productivity improvement, they exist in every
workplace situation all of the time. It's for managers, supervisors, trainers and employees at any
level who wish to develop their understanding of productivity and their ability to improve the
efficiency and utilization of resources in their organizations and who see achieving targets and
budgets as merely minimum starting standards.
This study helps the management to improve the productivity.

CHAPTER VIII
LIMITATIONS OF THE STUDY
Due to the lack of time I cannot get the data for monthly wise.
All the data are expressed in the value of cost & not in terms of unit.
The study does not take into the account for the inflation.
SCOPE FOR FURTHER STUDY
It helps to productivity improvement.
Productivity improvement result in lower cost per unit by effective utilization of all the
resource & reducing wastages.
Lower cost per unit contributes increase in profit.

BIBLIOGRAPHY
References
Martand Telsang Industrial Engineering & Production Management S Chand & Co.
R.Paneerselvam Production & Operations Management Prentice hall Of India Private Ltd.
B.M. Lall Nigam I.C. Jain Cost Accounting Prentice hall Of India Private Ltd.
S.P. Iyengar Cost & Management Accounting Sultan Chand & Sons.
www.naturalcapsules.com

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A STUDY ABOUT PRODUCITVITY LEVEL IN

SUMMER PROJECT REPORT

REGISTER NO.: 27348336

Under the Guidance of

Mrs. M. JANAKIRAMA, M.B.A., P.G.D.C.A.,

Faculty, Department of Management Studies

In partial fullfilment of the award of degree of

MASTER OF BUSINESS ADMINISTRATION

SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE

DEPARTMENT OF MANAGEMENT STUDIES

GUIDE HEAD OF DEPARTMENT

Submitted for Viva-Voce Examination held on

I take this opportunity to express my deep sense of gratitude to SHRI.N.KESAVAN, Founder

I express my immense gratitude to my Principal DR.V.S.K.VENKATACHALAPATHY for his

The valuable and unflinching requital support in this Endeavor MRS.M.JANAKIRAMA my

I am sincerely thankful to MR.V.SIVA, Administrator for giving me an opportunity to do this

My heart gratitude to all employees of NATURAL CAPSULES LIMITED, Puducherry for

PROFILE OF THE COMPANY

CORPORATE VISION & MISSION

SCOPE FOR THE FUTHER STUDY

Natural Capsules is committed to:

Be the Global Leader for supply of Cellulose Capsules

Providing superior Quality two-piece hard Gelatin Capsules

Be the Best Service provider to the Customers all around

Invest in Research and Development of new capsule technologies and application

Internationally benchmarked Quality and Regulatory Systems

Customer relationship through outstanding products and services

State of the art manufacturing facilities

To understand our customer needs and adding value to our customers

products, so that we grow together

Natural capsule Ltd. Unit II Puducherry.

PER. & ADMIN.

ASST. MANAGER AIR

o Hard Gelatin Capsule Shells

o Hard Cellulose Capsule Shells

o BSE / TSE Free Gelatin Capsule Shells

o Shiny Gelatin Capsule Shells

o SLS Free Gelatin Capsule Shells

o Halal Certified Gelatin Capsule Shells

o Fortified Gelatin Capsule Shells

o Sweet Gelatin Capsule Shells

o Fast Release Gelatin Capsule Shells

o Printed Gelatin / Cellulose Capsule Shells

Product: Empty hard gelatin capsules

Process Flow Chart

Hard Gelatin Capsule Shells

Hard Cellulose Capsule Shells

Manufacturing capacity of more than 3 billion capsules per annum

Capability of Circular and Linear printing on capsules. Printing can

be customized and can be done in two colors

Capsules are sorted online through Automatic Diametrical Sorting machines

Various types of packaging are available for Formulations of non-betalactom,

Contract Research in Synthetic Chemistry.

Dossier in CTD Format.

Manufacturing of APIs and Finished Dosage Forms.

Development of Dossiers/ ANDAs for products of the customers choice.

Contract Research and Analytical

NEED FOR STUDY

The success of any manufacturing organization depends largely on the productivity.

The NATURAL CAPSULES LIMITED is a manufacturing unit to manufacture the

Output Productivity = -------------------

Productivity is the multiplier effect of efficiency and effectiveness.

DIFFERENT PRODUCTIVITY MEASURES

Other manufacturing expenses productivity = ___Total output