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CHAPTER I

INTRODUCTION

1.1

Background

In Nepalese context industrialization does not seem so advance but over all developing of a country depends upon its industrial development. The industrialization has played vital role in the growth of national income and living standard of people. Thus, industrialization is the backbone of the developing country. Today is the world of industrialization most of the developing countries are implementing industrial policy for the economic development of the country. In today's age the field of the business is vast and within the business field the small business is established. It is very hard for the general people to reach the big business so for the people having less capital and who is educated so, small business plays vital role for them. Small business is an organization which is engaged in production and marketing small business is an organization which is engaged in production and market along with different activities like manufacturing, services, construction, trade and transport. The Industries Enterprise Act 2049 has defined small industry in Nepalese context with the capital up to 30 million (Rs. 3 crores) small industry may be also described as any economic activity performed by an individual with the profit motive such activity may relate to lither to production or distribution of the goods or service or both. Small industries of business are a part of an economic activity of every country. The Industrial Policy of 1974 has classified the industries into four categories: they are cottage industry, small scale industry, medium scale industry and large industry. Small scale industry or small business is an economic activity. Small scale business may be described as an economic activity performed by ban individual with profit motive. Such as activity may relate to either to production or distribution of goods or services or both. The owner established manages the business to attain personal objective. The business is an extension of the owners needs, objectives and personality. The business growth is not

primary objective. The aim is to continue operations over period of time. Small business is established for self employment and to reach individual objective. The definition of small size varies between different forms of business activities, such as manufacturing and non-manufacturing. It also varies between countries. The number of employees yardstick is transparent, comparable and easily available. Defining small business is difficult. A number of definitions exist for small business. The US definition is: (Small Business Act 1953) A small business is one that is independently owned and operated and not dominant in its field of operation. According to Nicholas Siropolis Typically, a small business is mom-and-pop stores. Businesses may be looked upon as big or small, depending on the yardstick and cut-off point used. According to Timothy Hatten A small business is independently owned, operated, and financed, has fewer than 100 employees, and has relatively little impact on its industry. According to Longenecker, Moore and Petty A small business has financing supplied by one individual or a small group, has geographically localized operations except marketing, is small compared to the biggest firms in industry and has employees usually fewer than 100. Small business management focuses on running a business over a long period of time. It is small in terms of size, capital base and employees. There are various Measures of Small Business. They are highlighted below: In USA, manufacturing firms employing up to 500 employees are regarded small. For wholesale, retail and service firms, the annual sale should not exceed US$ 3.5 million. In UK, manufacturing firms employing up to 200 employees and construction/mining/quarrying firms employing up to 25 employees are regarded small.

In Japan, it is less than 300 employees for manufacturing/mining, less than 100 employees in wholesaling and less than 50 for retail/service. In Australia, it is less than 100 employees for manufacturing and less than 20 employees for non-manufacturing. In India, it is capital assets up to Rs. 10 million (original value of plant and machinery only). In Nepal, it is fixed assets up to Rs. 30 million for small industry. Fixed assets include specified movable and immovable assets. UNDP defines small business as one that employs 20 to 100 employees.

1.2

History

Puspanjali (copy) Industry and General Suppliers is one of the small business firms in Biratnagar that manufactures exercise books (copy), registers. PIGS have been putting a tremendous effort on producing these products for educational institutions, offices, homes where the products are highly consumed. Mainly, the target market for PIGS is the students who use the exercise book for recording their lessons, lectures and home works. Puspanjali Industry and General Suppliers is a small scale industry located at Bargachhi, Biratnagar - 4. It was established in B.S. 2067 with the starting capital of Rs 10 lakhs. PIGS is established in a partnership form by 5 partners who are the owners of the firm. The owners are Damber Narayan Mehta, Bandhu Pokhrel, Nand Kumar Yadav, Tanka Dhamala and Tulasi Barakoti. Nanda Kumar Yadav is the Production Manager where as Damber Narayan Mehta is the Administrative Chief. At the present time 8 workers have been working in PIGS. It has been just 2 years of establishment and PIGS is running in a starting phase of business which aims to catch a rapid growth. PIGS have a profit objective to gain 5-10% profit where it has a growth objective to increase its production level upto 100% in 5 years. PIGS have been producing varieties of exercise books and registers. These products vary in term of number of pages, paper quality and its size. In the market we can find special long, fancy, rough exercise books which differ from no. of pages (i.e. 36, 44, 72, 100, 120, 140, 160, 200, and 240). And these products have price range from Rs. 30 to Rs. 500 per dozen. PIGS have some popular brand names Palpasa, Arshi, Sweet, Nature are the popular brand names of exercise book and First Choice is the popular brand name of registers in the market.

Biratnagar is its local market where as different places of Morang, Sunsari, Jhapa, Illam, Pachthar, Taplejung districts are the major markets. Since there are nearly 45 stationary industries in Biratnagar, PIGS has been facing a tough competition in the market. Almost every small business is started with the purpose of earning profit through the transactions of products. PIGS are not exception in view at this objective. It was established with the profit motive.

1.2.1

Organization Structure

The business of PIGS is small one. So it has small organizational structure. There are production department and administrative department. The sales activities are done from administrative department. The organization structure of PIGS includes owners; Owners are accountable towards all the departments of the organization. This organization has participative management where the suggestions and opinion of each level of employees or worker are invited in decision making.

1.2.2

Organization Chart Owners

Production Manager Workers

Administrative Manager

Fig. 1.1: Showing Organization Chart

1.3

Area of the study

The main area of study is production process of PIGS. So the field work is directed towards the production process of exercise book. Production process converts the raw materials into the final product after processing them. This study is conducted to have general knowledge about the production process of exercise book in PIGS. The study is done to know how the

exercise books are produced, about the raw materials needed, the factors affecting the production process, the type of technology used in PIGS etc.

1.4

Issues to be addressed

PIGS is a profit motive organization. To earn more profit there must be higher sales of the exercise book. But this organization is not able to achieve its goal due to flexibility in the production units of exercise book. PIGS is not able to produce the exercise book as per the demand in the market. The main issue of PIGS is addressed on the factors affecting the production. PIGS is not getting its efficiency level in production. There is variation in the average daily production units. Within the organization thee are some factors that affects the production process. Due to these factors, the organization is not meeting its target in terms of production. Following are the questions to be answered.

How are the exercise book produced? What technology do PIGS use for production of exercise book? How efficiently is PIGS using its machines? Are the workers satisfied to their jobs? What about the labor turnover in PIGS?

1.5

Objective of the study

PIGS want to achieve its maximum production level. There are some factors that affect the production process. To find out, what factors affects the production process is the objective of the study. The objectives are:

To gain the practical knowledge about the scenario of PIGS. To know the production process and distribution of exercise book. To find out the factors and how they affect the production process in PIGS.
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To find out the problem of PIGS and to give some recommendation for them.

1.6

Need of the study

This study report will help PIGS to know the reason of ineffective production system. The study is done to fulfill the practical requirement of BBA, 5 th semester. This study will also be helpful to juniors as a guide, and they can collect relevant information. Also the study helps the researcher to develop personality, ability, skills, and knowledge. And of course the finding of the study will help the organization to correct the errors, improve its production affecting factors and achieve the efficient level.

1.7

Limitation of the study

The main problem of the study is time, budget, availability of data and others. We have to complete the research report within the fixed time period. Research study is very difficult to find the fact things due to the some limitations of the study. a. The study is based on the production process and distribution made by PIGS. b. The study is limited only to low involvement consumer products, especially: copy. c. The field survey is confined within Biratnagar city. d. The resources like time and money are major constraint. e. It ignores the qualitative factors.
f. The data provided by the staff of PIGS is assumed true and data are round up in

figures.
g.

The study is based mainly on secondary data so this study is not free from the limitation of secondary data.

The marketing activity of PIGS is spread throughout the Biratnagar. It doesn't cover all the aspects of marketing but focuses only on the production process and distribution channel of stationary products mainly exercise books (copy), registers, telephone diary, rough copy etc. The opinions, attitudes and recommendations of all the dealers and the consumers could not be ascertained. Hence, a selected few was only taken into consideration, which is another

limitation of the study. Lack of proper literature and studies about the production process and distribution aspect of PIGS was a limitation for the study.

1.8

Organization of the study

Organization of study is the description of the research setting, method, and procedures used in the study. The organization of study has been divided under the following heads in order to make the research study an effective one. a) Research Design b) Research Methodology a. Research Design Research design means an overall framework or plan for the activities to be undertaken during the course of a research study. The research design serves as a frame work for the study, guiding the collection and analysis of the data, the research instruments to be utilized, and the sampling plan to be followed. Hence, to collect the information and fulfill the proposed objectives of research, the study has been designated as field study, historical and descriptive research of sample survey. b. Research Methodology Research methodology is a systematic way of recording of collected observations that may lead to the development of generalizations, principles or theories, resulting in prediction and possibly ultimate control of events. It deals with the data collection activity. Collecting data is the connecting link to the world of reality for the researcher. The data collection activity consists of taking ordered information from the reality and transferring it into some recording system so that it can later be examined and

analyzed for patterns. Researcher has used two sources of data collection method for report writing as, a. Primary Source b. Secondary Source a. Primary Source Primary data are the original data gathered for the research project at hand. It requires effort on the part of researcher and it is not readily available. Questionnaire and direct interview has been used as the primary source of data for the research. The questionnaire used is of open end for knowing the true picture as perceived by the employees. In the absence of direct contact with the employee, direct observation and questionnaire were used. b. Secondary Source Secondary data are often in the form of raw data and published materials that are collected from sources outside the company. For report writing, researcher used internets, magazine and case study reports.

CHAPTER II
PRESENTATION AND ANALYSIS OF DATA

2.1

Presentation of Information

2.1.1 (Production Process of Exercise Book Copy) PIGS produce mainly two products: Exercise book (copy) and Register book. Both the products follow the same manufacturing process. Exercise book (copy) are made in different varieties in terms of size, no of pages (ranges from 36 to 240), and paper quality. Also different colorful front and back covers are used to give some difference. And the difference of products will be decided as per the local market demand. The production process of exercise book is quite simple where both manual and semi-automatic machines are used. The machines used in this process are given here: Ruling machine Stitching machine Cutting machine

The raw materials used in the production of exercise book are white paper sheets (44-58 GSM 18x622 Ream), grey broad sheets, printing ink (red, blue, black, pink), level cover

sheets, or printed card boards, gum, binding cloth, thread, stitching ware or pins, plastic, consumables, etc. The production process of the exercise book relies on 4 key steps:1. Ruling 2. Folding 3. Stitching 4. Cutting The manufacturing process of exercise book in PIGS can be shown in figure:

Basic raw materials

Preparation of materials Ruling

Folding

Covering

Stitching

Cutting

Packaging

Fig. 1.2: Exercise Book Producing Channels

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1. Basic raw materials: The basic raw materials, mentioned above like paper sheets, inks, gum etc are needed for the production of exercise book. 2. Preparation of materials: At this step the required raw materials are made appropriate for production of exercise book. The white paper sheets which are in the size of 900 X 620 mm, they are cut down through cutting machine in to appropriate size for ruling over it. Also the cover sheets are cut down into required size for covering the exercise book. 3. Ruling: Now the appropriate sized white paper is ruled with the help of ruling machine as per the local requirements. Both the red (margin line) and blue lines and other required margin lines are drawn in this step. 4. Folding: The ruled paper sheets are folded into the required size of exercise book. At this step, workers determine the number of pages (ranges between 36 to 240) of the exercise book by using their hands. After the determination of size, the paper sheets are folded into the size of exercise book. 5. Stitching: In this step the folded paper sheets are stitched through stitching machine to fix them. Some types of product are stitched directly with the prepared cover sheets. These products are of low price level. 6. Covering/ Binding: After stitching folded paper sheets, binding are done over it with covers, grey boards levels as per requirement of product design. And they are attached by pasting gum. 7. Cutting: After pasting covers, cutting is done through cutting machine to give them the finishing touch. This cutting step will give the final required size of exercise book. 8. Packaging: At last workers pack the finishing exercise book, dozen wise. And then bundles are made of 4-6 dozens for each bundle which are ready to delivery.

2.1.2 (Distribution Channel of PIGS)

Concept of Distribution:

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When manufacture produces goods or when products are ready for the market, the need for channel arises to bring products into the hands of the final consumer. Channel of distribution is the route taken by the right of ownership of the goods as they move from producers to consumers. This is the path through which goods and services move to ultimate targets and not selecting the proper channel of distribution the expenses of producers will increase and hence the efforts of the manufacturers will be wasted. So there is a need to pay more attention to the distribution management so as to utilize the channel operation in a very satisfactory and effective way. The modern marketing system and its sub-system can be shown in the diagram as like this. (
ENVIRONMENTAL FACTORS

TECHNOLOGY

CULTURE

ECONOMY

CONVENIENT POLICY COMPETITOR SS

ORGANIZATION WHOLESALERS, RETAILERS AND OTHER INTERMIDIARES

MARKET

Source: HMG/N Performance of PE's Nepal, A Managerial Analysis CCC & ISC, 1980, p64.) Fig. 1.3: A Modern Marketing System and its Sub System

A marketing channel is identified as involving a series relationship among organization and final users to whom marketing effort directed. Goods that are produced by manufacturer are often not sold directly to the end users. Most producers work with marketing intermediaries to bring their products to bring their products

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to the market. Within the scope of marketing, distributing is concerned with all the business activities centering on the problem of getting merchandise from the producer to the final consumer. Distribution may be defined as an operation or a series of operation. This physically brings the goods, manufactured or produced by any particular manufacturer into the hands of the final consumer or users. After determining the product policy strategies and setting the price of the product, the next step involved in marketing is the establishment of distribution strategies, which is also known as the place variables. Distribution deals with two aspects of product movement, distribution channel and physical distribution or distribution logistics.

Distribution Channel
A distribution channel consist of the set of people and firms involve in the transfer of title to the product as the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user. A channel of distribution always includes both the producer and the final customer for the product in its present form as well as any middlemen such as retailers and wholesalers.

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ORDER PROCESSIN G RAW MATERIAL

SELLING SALES PROMOTION

MANUFACT URE

PROD DEM

DISTRIBUTION CHAIN

PRODUCTS SUPPLY

CUT

PROD DISP WAREHOU -SING DISTRIBUTION PLANNING PRODUTS DELIVERIN G MARKET OUTLET

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ORDER PROCESSIN G RAW MATERIAL

SELLING SALES PROMOTION

MANUFACT URE

PROD DEM

DISTRIBUTION CHAIN

PRODUCTS SUPPLY

CUT

PROD DISP WAREHOU -SING DISTRIBUTION PLANNING PRODUTS DELIVERIN G MARKET OUTLET

(Source: Peter R Attwood "Planning and Decision System" Grower Press Ltd. Great Britain. 1971. p-2) Fig. 1.4: A Modern Distribution Chain

The role of distribution is getting a product to its target market. A distribution channel carries out this assignment with middlemen performing some tasks; A middleman is a business firm that renders services directly related to the purchase and/ or sale of a product as its flows from producers to consumers. Middlemen can be eliminated from a channel, but someone still has to carry out their essential functions.

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In today's economy most producers do not sell their goods directly to the final users. Between them and the final users stand a host of marketing intermediaries performing a variety of functions and bearing a variety names. The marketing institutions considered as channel components are: All kinds of merchant middleman, such as wholesaler and retailers who buy, take title to and resell the merchandise. 1. All kinds of agent middlemen, such as commission agents, brokers, manufacturers, representative, etc. who search for customer and may act on their behalf. 2. All other facilitating agency such as transportation companies independent warehouses, banks, advertising agencies, etc. who assists in the performance of distribution but neither take title to goods or negotiate of sales. The above mentioned channel are linked in the marketing system by one or more of marketing flows or movements such as Forward Flow, Backward Flow, and Two way Flow.

Major Channels of Distribution

Diverse distribution channels exist today. The most common channels for consumer goods, business goods and services are described below. Distribution of Consumer Goods: Five channels are widely used in marketing tangible products to ultimate consumers:

Producer Consumer The shortest, simplest distribution channel for

consumer goods involves no middlemen. The producer may sell form door to door or by mail.

Producer Retailer Consumer Many large retailers buy directly from

manufacturers and agricultural producers. To the chagrin of various wholesaling middlemen, wall mart has increased its direct dealing with producers.

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Producer Wholesaler Retailer Consumer If there is a traditional

channel for consumer goods that is it. Small retailers and manufacturers by the thousands find this channel the only economically feasible choice.

Producer Agent Retailer Consumer Instead of using wholesalers,

many producers prefer to use agent middlemen to reach the retail market, especially large 0scale retailers.

Producer Agent Wholesaler Retailer Consumer To reach small

retailers, producers often use agent middlemen, who in turn call on wholesalers that sell to large retail chains and / or small retails stores. Among these five channels of distribution PIGS mainly uses three. They are producer to consumer, producer to retailer to consumer and the last one is producer to wholesaler to retailer to consumer. PIGS has adopted producer to consumer channel of distribution in order to get feedback directly from the consumer sides in order to improve their product. Similarly, PIGS has adopted another channel of distribution that is producer to retailer to consumer. PIGS use this channel of distribution in order to avoid the marketing costs of selling merchandise in smaller lots. In this if retailer orders in larger lots, the producer (PIGS) may be interested to sell directly. This way, producer (PIGS) can save a part of the usual discounts allowed to wholesalers. And the last type of channel of distribution that PIGS has adopted is producer to wholesaler to retailer to consumer. PIGS have adopted this channel of distribution in order to distribute intensively with the target of achieving widest possible market coverage. Merchandise distributed widely only when the producer (PIGS) uses wholesalers to reach large number of retail outlets in different market segments.

2.2

Analysis of data
Following table shows yearly production units produced by PIGS:

Year

Production units (dozens)


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066/67 067/068 068/069

8000 10000 16000

Table 1.1 Yearly production units produced by PIGS Note: PIGS, since its establishment year is 2066 B.S., it is in starting phase of business. So, it has only two years of production.

Yearly Production of PIGS

18000 16000
Production Unit (Dozens)

16000

14000 12000 10000 8000 6000 4000 2000 0 066/67 067/068


Year

10000 8000

068/069

(Source: Official records of PIGS) Fig. 1.5: Yearly Production of PIGS Analysis: - The above table and graph shows that the yearly production of exercise books is increasing year by year. This is the good indicator for economic growth for PIGS. Since PIGS was established in the year 2067. It is in the starting phase of its business. So it has only two years of production. In the above table, we see 10000 dozens of exercise books were produced which values Rs 18 lakhs. In the next year 068/069, production units were increased to 16000 units which values Rs 28 lakhs. We can see that PIGS is increasing its production year by year.

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S.N.
1 2 3 4 5 6 7 8 9 10 11 12

Months
Baisakh Jestha Ashad Shrawan Bhadra Ashoj Kartik Mangsir Poush Magh Falgun Chaitra

Production units (dozen)


2200 1900 1100 800 700 550 500 650 1000 1800 2300 2500

Table 1.2 PIGS is increasing its production year by year

Monthly production units of in 2068 PIGS

3000 2500
Production Units

2200 1900 1800

2300

2500

2000 1500 1000 500 0

1100 800 700 550 500 650

1000

s ir

Ba is a kh

an

n Fa lg u

sh ad

ar ti k

ad ra

Je sth

M an g

Po

M ag h

ra w

Sh

Months

(Source: Official records of PIGS) Fig. 1.6: Monthly production units of in 2068 PIGS
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Ch

Bh

ait ra

sh o

us h

Analysis: Above table and graph (diagram) shows the monthly production of exercise book in dozens, produced by PIGS in year 2068. We can see, in the month of Falgun, Chaitra and Baisakh, high number of units are produced. Because of every school year or school term is to be started, there is a high demand of exercise book in the month of chaitra, Baisakh and Jestha. To meet this high demand, production is raised up to the higher level from the month of Magh to Jestha. As the demand decreases the production level is also decreased as we can see in the month of Shrawan to Kartik. Although the total production unit has been increased as compared to previous year, PIGS has been facing various problems. The paper sheets not being available on time, fluctuation on paper price and of course load shedding are the problem affecting the entire production of PIGS. Here are the other factors within the organization that affects the production of PIGS.

Labor Management:
PIGS is a small scale industry. There are only few workers and some administrative staffs. The management is effective in making proper co-ordination between administration and workers. Following table shows the detail of labors (beside administrative staffs):Labors Skilled Semi skilled Un skilled Total Number 2 2 4 8 Percentage (%) 25 25 50 100

Table 1.3 Detail of labors (beside administrative staffs)

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Classification of Labor in PIGS

25% Skilled Semi skilled Un skilled 25%

50%

(Source: Official records of PIGS) Fig. 1.7: Classification of Labor in PIGS Analysis: - In the above table and chart, we see 8 labors are working in PIGS. Among them 25% are skilled, 25% are semi skilled and 50% are unskilled labors.

Labor Turnover:
Labor turnover is one of the major factors affecting the production in PIGS. Following table shows the turnover of Labor from the time of establishment till now.

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Labor Turnover in PIGS 14 12 10 Labors 8 6 4 2 0 4 months 8 months Life of PIGS 10 months 18 months 5

12 10 8

Fig. 1.8: Labor turnover in PIGS Analysis: In the above diagram we can see that initially, at the time of establishment 12 workers were working in PIGS. They worked till 4 months of life of PIGS. After 4 months two labor left PIGS. Then after 4 months again, 5 more labor left PIGs. At this time, lack of labor was realized and only 1 labor was appointed. But this was not enough, so after 2 months 2 more labor were appointed. And thereafter till now 8 workers have been working in PIGS. Within the 18 months of establishment, we see several times of labor turnover in PIGS.

Machine Efficiency:
As there are 3 types machines used in PIGS. Machine efficiency will show how efficiently of frequently the machines are used. The following figure shows how much the machines are used of its total capacity.

Cutting Machine:

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22

Used Capacity Total Capacity

78

Ruling Machine:

26 Used Capacity Total Capacity 74

Stitching Machine:

31 Used Capacity Total Capacity 69

Fig. 1.9: Showing machine efficiency in PIGS

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Analysis:- In the above pie-charts we can see how efficiently the machines are used. It is clear that all three machines are used less than its total capacity. Lack of proper knowledge and skill to use the machines is the main reason behind this. Here are the detail of 3 machines efficiency. 1) Cutting Machine: The cutting machine which costs Rs 2 lakhs has the total capacity to cut down 140 paper sheets per minute that is 67200 paper sheets a day. But PIGS carries only 78% of its total capacity. It means 52416 sheets per day are cut down. 2) Ruling Machine: The ruling machine which costs Rs 1.5 lakhs has the total ruling capacity about 120 sheets per minute and can handle sheets of even wider dimension. The capacity is ruling 57600 sheets a day. But PIGS uses only 74% of its total capacity that is only 42624 sheets a day. 3) Stitching Machine: The stitching machine which costs Rs 50000 has the total capacity to stitch 1200 folded exercise book per day. But workers of PIGS stitch only 828 folded exercise book a day. This is only 69% of its total capacity.

SWOT Analysis:
SWOT analysis refers to the analysis of strength, weakness, opportunities and threats

of PIGS. SWOT analysis can be classified in internal and external to the organization.
a) Internal environment analysis: Strengths and weakness of an organization are

internal environmental elements. Strength and weakness of PIGS are as follows: Strength analysis: Strength is the characteristics of the organization that gives it an advantage over others. A firms strengths are its resources and capabilities that can be used as a basis for developing competitive advantages. The strength of PIGS is its management faculty who always try to put their total effort to this organization.

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Weakness analysis: Weakness is the limitations that place disadvantages relative to other. The absence of certain strength may be viewed as a weakness. Labor turnover, unskilled labor, machine inefficiency, are some weaknesses of PIGS, which limits the new opportunities. Since PIGS is in its growing phase of the business, the organization doesnt have much experience in the field of production. This may also be termed as weakness.

b) External environment analysis: Opportunities and threats are the external

environmental elements. The opportunities and threats of PIGS are as follows: Opportunity analysis: Opportunities are the external chances to improve the performances that will increase the profit and growth. Since the population of areas where the market of PIGS exists, is increasing the number of educational institutions is also increasing. This may be a big opportunity for PIGS.

Threats analysis: Threats are the external elements in the environment that could cause trouble for the business. Since there are almost 45 stationary industries in Biratnagar which produces mainly exercise book, PIGS is facing a tough competition in the market. Some of the competitors like, OM Copy Udhyog, Sagarmatha Stationary Udhyog, Star Copy Udhyog are big threats for PIGS.

2.3 Major Findings:


This study shows the following major findings about the PIGS in the production sector. They are:

1. PIGS has followed the general (not the modern) production process which is based on manual and semi- automatic machine.
2. The firm has been given more emphasis on unskilled labor.

3. The firm has been facing problem of frequent labor turnover.

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4. The firm has been unable to use the maximum efficiency of machines.
5. Almost with every aspect more than half number of workers is satisfied.

6. No quality test is extended.


7. The firms production system has been facing problem such as load shedding, strikes,

non availability of raw materials, frequent fluctuation on paper price, delay on payment and increasing competition.

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CHAPTER III
SUMMARY, CONCLUSION AND RECOMMENDATION

3.1

Summary

Small business is an economic activity performed with profit motive along with other motives. PIGS is an partnership formed organization in Biratnagar. Carrying a profit motive, it has been providing a quality exercise book (copy) and registers to the local educational institutions, offices. This study has been conducted to get the knowledge about the production process of exercise book in PIGS and the factors affecting the production process. For the required information, a face to face questionnaire had been conducted with the production manager Nand Kumar Yadav and accountant Suman Pokhrel. Also the labors working in PIGS were asked some sort of questions for the informations that the study requires. This entire collected information were analyzed. The field work report is classified into three major chapters. Where the entire collected information was put accordingly. The first chapter deals the introduction part of the field work. Which carries the topics like history and background of the organization PIGS. The area of the study, issues to be addressed/questions to be answered, objectives of the study, need of the study and organization of the study. The second chapter deals with the presentation and analysis of collected information. It carries the data, figures charts, graphs related to production of PIGS and how some of the factors affect the production process. The last chapter of the field work consists, summary of the report, major conclusions derived from the analysis of data and some of the recommendations are given

3.2

Conclusion

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On the basis of presentation and analysis of information in the chapter two, it can be concluded that there are many factors affecting the production process of PIGS. In spite of these factors PIGS has been increasing its production level each year comparing with the previous one. But due to the factors that affects the production process, PIGS is not able to get its efficient level. The organization has been failed to use the maximum efficiency of the resources within it. After conducting the survey it is found that PIGS is following a general process for the production of exercise book. Which consists of both manual and semi-automatic machines. And these machines are used below its total efficiency. PIGS has sufficient number of workers but almost 50% are unskilled. And the unskilled labors are lacked by the skilled and knowledge required for the production process. Some of the labors are unsatisfied with some terms and conditions of the organization. This may be the reason behind the labor turnover problem which has been occurring frequently from the age of establishment. These are the factors within the organization that affects the production process in PIGS. Besides these factors some of the other factors outside the organization like price fluctuation in raw materials, unavailability of raw materials in time, increasing market competition, load shedding etc affects the production process of PIGS.

3.3

Recommendation

After the study made on the survey done on production process of PIGS. Following recommendation can be given: 1. PIGS is recommended to adopt a modern technology for the production of exercise book, replacing the existing general one.
2. The firm should use the machines up to its maximum efficiency level if the general

production process is not replaced. 3. PIGS should give more emphasis on skilled manpower to increase the productivity. It should give training and other skill development program to unskilled labors.
4. The reason of labor leaving the jobs should find out and resolve the problem of

frequent labor turnover.

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5. Some of the employees are unsatisfied. PIGS should introduce their unsatisfied matters and motivate them to increase the production level. 6. A quality test should be extended at the end of the production process by PIGS. So that a quality of product can be maintained.
7. PIGS can make easy availability of raw materials by keeping the raw materials in

stock, for future use in emergencies.


8. To solve the problem of price fluctuation on raw materials some other markets should

be searched instead of current market. 9. PIGS can solve the problem of load shedding by managing alternative source of electricity like generators.

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