Organisation Study On Sitharam

An Organizational Study Report on Sitaram Textiles Limited, Thrissur.
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Nirmala College of Information Technology, Chalakudy

INTRODUCTION TO THE STUDY

Organisational study is the systematic study and careful application
of knowledge about how people as individuals and as groups act within
organisation. Purpose of an organisational study is to define the legal and corporate
structure of the business. An organisation study may also include professional
background information about the business and the principles of the business and
what skills they can contributes to the business.
As part of Master of Business Administration programme, the
researcher conducted organisational study Sitaram Textiles Ltd, Thrissur. This work
will give a complete picture about the organisation structure and departments of the
organisation and also study each department process and function. The researcher
selected this topic to understand the well organised managerial structure of the
organisation. So the study, regarding this topic is very crucial to analyse the factors
which contribute to the quality of textile products as well as the factors regarding
the defects of organisational climate development of an organisation.
While conducting the study the researcher got a real idea about the
structure of the management and harmonious working conditions of employees in
Sitaram Textiles Ltd, Thrissure. A fair organizational study will help an
organization to develop a lot. The suggestions given by the researcher will help to
improve the efficiency and effectiveness of the organization in a systematic manner.


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OBJECTIVES OF THE STUDY

The main objectives of the study are :-
To understand more about the organization.
To get more awareness about the departments of the company.
To understand the overall performance of the company.
To study the problems of the company.
To give suggestions based on the findings for the improvement of efficiency and
profitability of the company.
To analyse the strength and weakness as well as opportunity and threats of the
company to enhance the organizational performance.


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LIMITATIONS

Busy schedule of officers and employees is adversely affected the researcher.
The information provided by the company assumed to be authentic.
Certain areas are restricted, so a detailed study is not possible.
The success of the study depends upon the response made by the employee.

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INDUSTRY PROFILE

INTRODUCTION

Textiles industry in India is the second largest employment generator
after agriculture. The modern textile industry in India has to origin in the 19th century.
The textile industry plays an important role in the Indian economy. And Indian is next
only to China among the worlds largest producers of textiles and garments. It holds
significant status in India as it provides one of the most fundamental necessities of the
people. Textile industry was one of the earliest industries to come into existence in
India and it accounts for more than 30% of the total exports. In fact Indian textile
industry is the second largest industry in the world.

The country is rich in natural resources such as cotton, just, and silk.
Textile industry is unique in the terms that it is an independent industry from the basic
requirement of raw materials on the final products, with huge value addition at every
stage of processing. Textile industry in India has vast potential for creation of
employment opportunities in the agricultural, industrial, organised and decentralised
sectors and rural and urban areas particularly for women.

Textile and garment manufacturers and exporters in India were
expecting a bright future in the days to come as more International buyers were
turning their attention to Indian markets following hike in prices of textile and
garments in China, which had the largest share in the export market. Buyers from
various countries, including US and European countries, were now started placing
fresh orders with the textile garment exporters here.


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HISTORY OF THE INDUSTRY

The terms TEXTILE is a Latin word originating from the TEXERE
which means to weave Textiles refers to a flexible material comprising of a network
of artificial fibers, known as yarn.

The development of the world textile industry was started in Britain as
the sinning and weaving machines were invested in that country. High production of
wool, cotton and silk over the world has boosted the next year. Through the industry
was started in UK, in 19
th
century the textile production passed to Europe and northern
America after mechanisation process in those areas. From time to time Japan, China,
and India took part in industry their economic and concentrated more in that sector.

India has been well known for her textile goods since very ancient
times. The traditional textile industry of India was virtually decayed during the
colonial regime. However, the modern textile industry took birth in the early 19
th

century, when the first textile mill in the country was established at foster glisters near
Calcutta in 1818. The cotton textile industry however made its real beginning in
Bombay in 1850s. The First cotton textile mill of Bombay was established in 1854 by
a Parsi cotton merchant then engaged in overseas and internal trade. Indeed the vast
majority of the early mills were the handy work of Parsi merchants engaged in yarn
and cloth trade at home and Chinese and African markets. The first cotton mill in
Ahmadabad, which was eventually to emerge as a rival centre to Bombay, was
established in 1861. The spread of the textile industry to Ahmadabad was largely due
to the Gujarati trading class.

The cotton textile industry made rapid progress in the second half of the
19
th
century and by the end of the century there were 178 cotton textiles mills; but
during the year 1900 the cotton textile industry was in bad state due to the great
famine and a number of mills of closed down for long periods.

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PRESENT STATUS OF THE INDUSTRY

Modern textile industry in India has its origin in the 19
th
century. The
textile industry plays a pivotal role in the Indian economy. This industry is very
significant today because, this sector contributes substantially in providing
employment and earning foreign exchange.

The Indian textile industry has a significant presents in the economy as
well as in the international textile economy. Its contribution to this Indian economy is
manifested in terms of its contribution to the industrial production, employment
generation and foreign exchange earnings. It contributes 20% of industrial production,
9% of excise collections, and 18% of employment in the industrial sector, nearly 20%
to the countrys total export earning and 4% of the GDP.

The country is in rich natural resources such as cotton, jute and silk. The
textile industry is the second largest employer after agriculture, with a total work force
of around 35 million. India is next only to China among the world worlds largest
producers of textiles and garments. The activities in textiles range of from the
production of natural raw material such as cotton, jute, silk and wool to the
manufacture of quality products such as cellulose fibre, synthesis filament and span
yarn. But during the last four years the industry has been suffering from a lot adverse
factors. The major problem is technology lag. Recently the union government has
come out with ambitions, technology up gradation fund of a possible magnitude of
Rs.25,000 crores to help the industry catch up with the trends in the global market.

Here are a few important facts about Indians textile industry.
1. There are approximately 1200 medium ti large scale textile mills in India. 12 % of
these mills are located in coimbatore (Tamilnadu)

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2. India has 34 million cotton textile spindles for manufacturing cotton yarn. Cotton
yarns account for 70% of Indias textiles exports. (China has 40 million cotton
spindles)
3. For the past tow years there has been a significant, mainly due to the increasing
price of cotton
4. Of the Indian textile yarn exports, almost 80% come from coarser yarns
consequently, there is a need to upgrade the technology.

FUTURE SCOPE OF THE INDUSTRY

Garment manufacturing and exporters in India were expecting a bright future in
the days to come as more international buyers were turning their attention to Indian
markets following hike in price of textile and garments in China, which had the largest
share in the export market.

Buyers from various countries, including US and European countries,
were now started placing fresh orders with the textile garments exporters here. Erode
textile garment exporters association secretory S Sivandhan told it was reported that
production and export of garments from China have started declining, due to various
reasons including price hike of raw materials and increase in production cost.

Considering the continual capital investments in the textile industry, the
government of India may extend the technology up gradation fund scheme (TUFS) by
the end of the 11th five year plan (till 2011 -2012) in order to support the industry.
The Indian textile industry is massively investing to meet the targeted output of $85
billion by the end of 2010, aiming export of $ 50 billion. There is substantial potential
in Indian export of technical textiles and home texts as most European company want
to setup facilities near by the emerging markets, such as India and China.


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Union Ministry of Textiles certified Apparel Export Promotion Council
(AEPC) has taken the responsibility to motivate the foreign investors to invest in
Indian Textile Industry by exhibiting it massive unexplored domestic market. The
objective is to trigger the foreign investment towards instituting textile units in India
by offering numerous allowances to global investor like low priced work force and
intellectual right fortification.

The government India has also taken few initiatives to promote the
textile industry by permitting 100% Foreign Direct Investment (FDI) in the market.
the Indian Textile Industry symbolized a strong existence in the complete value
chain from raw commodities to finished products. The Synthetic and Rayon Textile
Export Promotion Council (SRTEPC) has taken all the required steps to meet the
target of doubling the synthetic textile export in India to US $ 6.2 billion by seizing
4% of market share by financial year 2011 -2012.

COTTON TEXTILE INDUSTRY

The cotton textile industry occupies a permanent place in the Indian
economy, contributing to about 23.5% of the countrys industrial production. The
textile sector is closely linked with agriculture, handlooms, power looms, garment
manufacturing and a number of industries and trade, thus touching everyday life of
the common man. Cotton textile industry is one of the oldest and largest industries in
India which has made rapid change in the economy. The countrys first textile mill
Express mill in Nagpur which was started by Tata was the first to down shutters.
The premier group has sold of its textiles mills another has been taken over by
National Textile Corporation (STC) Which has also taken over mills like Kohinoor.


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COTTON TEXTILE INDUSTRY IN INDIA

The cotton textiles industry occupies an important place in the Indian
economy as its contribution to industrial production, employment generation and
export earning are significant. Currently the industry possess 26 million spindles 2
lakh looms in the mill sector above one million power loom sector about 4 million
looms in the handloom sector and a large number of process houses with total capacity
of dyeing, printing and finishing of 10 million metres of per Annam. The industry
place an important role in the Indian economy and as its accounts for nearly 60% of
industrial production and large scale employment. It is also a foreign exchange earns
as it contribute over 30% of the countrys total exports.
The first Indian cotton textile mills was established at Fort Glisters near
Calcutta as early as in 1838. The first cotton textile mill was in Bombay was the
Bombay spinning and weaving company started in the year 1851. The cotton textile
industry is admittedly the single largest organized industry in India and occupies
second place among the countries of the world in cotton textile mills are located in
those status like Maharashtra, Gujarat, Tamilnadu,West Bengal and Kerala.

COTTON TEXTILE INDUSTRY IN KERALA
The state has number of Textile mills. Kerala cotton textile mills generate direct and
indirect employment opportunities. There are more than 30 textile mills working in the
state. The major raw materials used by the industry are cotton polyesters, synthetic
fibres etc. These raw materials are not widely manufactured in Kerala. It is either
obtained from other states especially from Maharashtra and Tamilnadu or they are
imported from abroad. Since the climate conditions of Kerala frequently changes,
Suitable arrangements should be made to maintain the desired conditions for the
production of Yarn.


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The present condition of textile industries of Kerala is not good. Most of the private
owned mills have closed down and as a result large number of workers lost their job.
Similarly some of the private operated mills are fairly the problem of taking over by
the Government. Some of the mills are taken by the textile corporation of Kerala,
National Textile Corporation and Kerala government. Some of them located in
Thrissur are:

Sitaram Textile Ltd, Thrissur.
Alagappa Textiles, Alagappa Nagar
Kerala Lakshmi Mills, Pullazhy


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PROFILE OF THE ORGANIZATION

Sitaram textile is a public limited company incorporated under
the Indian companies Act 1956. It is a composite textile mill, fully owned by
government of Kerala situated in Punkunnam, Thrissur. The registered office and
production unit of the company is also situated in Punkunnam-[XXXXI /306
Punkunnam, Thrissur 680002, Kerala state.]. The cotton yarn and fabrics were the
products of the company till 2000. Now the company produce only the cotton yarn and
polyester yarn. The main objective of the company is to provide employment
opportunities.

HISTORY OF THE COMPANY
Sitaram textile Ltd a composite textile mill, fully owned by government of
Kerala situated at Thrissur in central Kerala was incorporated on 11
th
February 1975
under the Indian companies Act 1956. The Sitaram spinning and weaving mills
originally managed as a family concern was started as a power loom unit in the year
1903. It was started by Late Shri T.R.Ramachandra lyer. Slowly and steadily, with the
passage of time the unit was expanded, diversified and become a public Ltd company.
The Sitaram textile Ltd is a government of Kerala undertaking. Its
registered office is situated in Punkunnam, Thrissur. As Sitaram textile Ltd is a public
sector undertaking a brief expansion of the nature and outline of the public Ltd,
companies relevant here. A public limited company is a company formed and
registered under any of the previous companies act. It is an association of persons
called members. But has existence apart from the members.
Sitaram textile Ltd, Thrissur is a composite mill engaged in fabrics. The
activities involved are spinning, weaving preparation, weaving and processing. The

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finished products (yarn) are directly marketed to the depots in Bombay. Different
varieties of cotton purchased from outside state such as Tamilnadu, Andrapradesh,
Karnataka and Maharashtra. The products of the company were cotton yarn and
fabrics till 2000. Now the company produces only cotton yarn and polyester yarn.

OBJECTIVES OF THE COMPANY

The main objectives of Sitaram textile are as follows;

To carry on manufacture of yarn at low cost.
To produce high quality products
To provide more employment opportunities
To believe in healthy industrial relations and human treatment to its
employees
To maintain higher ethical standards with its suppliers and customers.
To continuously upgrade the quality of human resource of the company and to
promote development.
To enter in to foreign collaboration.
To establish technical institution to provide the training to the employees.

VISION
Sitaram believes in continuous up gradation of its product quality by
investment in the latest technology and its successful implementation. It also focuses
on providing employment opportune
MISSION
To be the most significant supplier of cotton yarns and polyester
yarns to the world market.

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BOARD OF DIRECTORS

Board of Directors has ultimate authority of the company. The share
holders of the company are Government of Kerala. Board Of Directors of Sitaram
Textiles Limited are :-

Chairman : N.R.Balan
Managing Director : C.K.Gopalakrishnan Nair
Directors
B.Prakash (Govt. of Kerala{joint secretary})
K.Ramachandran Pillai (CMD, NTC)
K.S.Lakshmirani (Finance joint secretary)
K.A.Chandrasekheran (Director: Handloom and Textiles)


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CAPITAL OF THE COMPANY

Capital refers to the money or moneys worth introduced or invested
by the owner into business. The authorised capital of the company is 600000 equity
shares of Rs.100 each. The starting capital investment of Sitaram Textiles was 2.5
crores. The present capital investment is 594 crores. This is raised by issuing
594000 shares of Rs.100 each. All these shares are owned by the Government of
Kerala..

The chart show the organisation has in net loss from the year
2006 to 2009. And in year 2010 the company has in profit at rs 3547606.

YEAR SALES PROFIT/LOSS
2006 63670571 (-)17100000
2007 67253459 (-)9267268
2008 79532217 (-)23519720
2009 74528657 (-)15523681
2010 98402628 3547606

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PRODUCTION UNIT

The Sitaram Textiles has only one production unit which is
situated in Punkunnam (Thrissur) in an area of 10 acres of land, engaged in the
production of cotton yarn and polyester yarn.
The raw material used in this conversion is cotton and polyester.
They have eight different steps involved in this conversion process that are mixing,
blow room, carding, drawing, simplex, spinning, cone winding, and packing. And
this process are helps to maintain the quality and smooth production of yarn.


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ORGANIZATION STRUCTURE

Board of Directors
Chairman
Managing Director
Personnel
Manager
Production
Manager
Accounts
Officer
Store
Keeper
Supervisors
Workers
General Manager

GENERAL MANAGER
Head Time
Keeper
Clerk
Staffs
Production
Staff
Accounts
Staffs
Marketing
Manager
Assistant.
Marketing
Manager
Purchase
Manager
Supervisor
Workers

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FUNCTIONAL ORGANIZATION STRUCTURE

The organization structure of the Sitaram Textiles is functional
organization structure. Functional organization structure is one in which the
employees are grouped on the basis of their functions. These functions are put under
the charge of specialists. A functional head can give directions throughout the
organization related with his functions.

Advantages
1. It is the most logical and easier form of an organization structure.
2. It provides specialisation thus making possible efficiency in operations.
3. It facilitates delegation of authority.
4. If facilitates better co-ordination of activities within each department.
5. Better supervision is facilitated since an individual manager is familiar with related
tasks and activities.
6. It helps in training of specialist managers rather than generalist managers.


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PRODUCT LINE
The products of the company were cotton yarn and cotton
fabrics till 2000. Now the company produces only cotton yarn and polyester yarn.
For producing cotton yarn, the period of time is one week.
Cotton yarn - 60 counts
Polyester yarn -70 counts
The term count implies the qualities of yarn. Higher the count
higher the quality. The waste of cotton are categorised into three that is saleable
waste, reusable waste and invisible waste.

The saleable wastes are gutter fly waste, lick ring fly cleaner,
cowing ends, comber no in opener, hard waste and sweeping waste flat strap waste.


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BUSINESS OPERATION

The company is situated in 10 acres of land engaged in the
manufacturing of yarn. Two types of yarns are manufacturing there. Cotton yarn
and polyester yarn. Around 200 employees are working in the organization. Now
the company is in its growth stage. The company is incurring profits after a decline.
The main objectives of the company is providing employment opportunities and
carrying on manufacture of quality yarn with minimum cost.

Nature of business

The products of the company were cotton yarn and cotton fabrics till
2000. Now the company produces only cotton yarn and the polyester yarn. . The
finished product (yarn) is directly marketed to the depots in Bombay. The company
gets advance order for producing yarns. So they undertake Just-In Time
manufacturing system.

Size of business
The company is undertaking its production on a large scale.
The company consist of more than 200 employees. The company has well qualified
and skilled labours.


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Business Operation cycle

The business operation of Sitaram Textiles is start from cash
converted into raw materials then the raw materials are processed and converted to
finished goods. That is cotton yarn and polyester yarn. The finished product is
directly marketed to the depots in Bombay and then the finished goods to debtors
and debtors to bills receivables. The business operation goes on this flow and bills
receivable to cash is next.

Cash
Raw
material
Finised
Goods
Debtors
Bills
receivables

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TRADE UNION PRESENCE

Trade union as a continuous association of wages earners for the
purpose of maintaining or improving the condition of their working lives. It is the
association of employees designed primarily to maintain or improve the condition
of employment of its members. Unions are primarily concerned with the terms and
conditions of employment. The main objective of trade unions is to present their
needs before the management. The trade unions in this company are:-
INTUC [Indian national Trade Union Congress]
AITUC [All India Trade Union Congress]
CITU [Central Indian Trade Union]
[BMS + CMP] co-ordination.

Functions

The main function of trade union in this organisation is to protect the
interest of employees. Trade Union help to improve the working conditions in the
company by negotiating for better pay packages, working conditions, and other
allowances and present all the needs of employees before the management.


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MARKET SHARE

Sitaram Textiles,
2%
NTC, 60%
Thrikkot Mill, 3%
GTN, 2%
Others, 33%
COMPANIES MARKET
SHARES
Sitaram Textiles
2%
NTC
60%
GTN
2%
Thrikkot Mill
3%
OTHERS
33%

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COMPANY LIFE CYCLE

Sitaram Textiles Limited

profit

1975 1985 1995 2005 2010 2011 2015
year

Present status of the company

The company is in its growth stage. In this stage the demand and
sales of the product increased rapidly. In this the profit is increasing. Till 2008 the
company incurred continuous loss, but during the year 2010 and 2011 the company
earns profits because of higher demand of the products. And the company expect
the future growth.


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COMPETITORS OF SITARAM

At the time when Sitaram Textiles Limited started it was the one and
only concern in the field. Later new companies emerged in the field which increases
the competition. Now Sitaram is facing cut throught competition.

NTC under taking mills are:-
1. Alagappa Textiles, Amballur
2. Vijaya Mohini mills,Trivandrum
3. Kerala Lakshmi Mills, Pullazhy.
4. Parvathy Mills, Kollam.
5. Spinning and weaving mill, Kannur.

Private firms are:-
1. Palakkad Thrikkott Mills.
2. GTN Industries Limited, Aluva

It faces competition from the private firms in Bombay working under
this industry. They have to spend only less cost of transportation. All the above
mentioned competitors are producing the same counts of yarn.


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FUTURE PROSPECTS AND GROWTH PLAN

Textile and garment manufacturers and exporters in India were
expecting a bright future in the days to come as more International buyers were
turning their attention to Indian markets following hike in price of textile and garments
in China, which had the largest share in the export market. Buyers from various
countries, including US and European countries, were now started placing fresh orders
with the textile garment exporters here.
Considering this opportunity, the company is looking to
increase the production with minimum investment. For these the company is planning
to modernise the entire existing machinery with automatic machines with an outlay of
INR 396 lakhs. Now the company is working with 30 year old machinery. After the
implementation, the unit becomes a viable one.
The future plans are.
Promote the high Sales
Quality Should Precede Production
Maintenance Should properly done, and that will be increase quality
Effective communication, co-ordination and co-operation


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DEPARTMENTS

In every organisation there will be departments. The main
advantage of the department is the work can be done very easily and in a smooth
way. Otherwise it will be very difficult to carry out work in an organisation.

Human Recourse Department
Purchase Department
Marketing Department
Production Department
Finance Department
Quality control department


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HUMAN RESOURCE DEPARTMENT

Personnel
Manager
Head Time
Keeper
ESI and PF clerk
Security Officer
Wage clerk
Security Guards
Senior Time
Keeper
Shift Time
Keeper

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The Human Resource Management (HRM) function covers a wide
range of activities. Human resources are the lively elements of an organization. An
organization utilises human resources along with technological, financial, physical
and other resources.
In HRM, is related with the management of man power. The
important task of HRM is to help every employee to grow himself to the maximum.
It is mainly concerned with methods of recruitment, selection, training and
placement of personnel and performance appraisal. Personnel manager is a staff
officer in the organization. He gives advice to top-level management in relation
with personnel policies and programmes. Human Resource Management checks
whether the workers are given fair working conditions, allowances etc. There are
more than 200 people working in Sitaram Textiles.
Functions
The functions and responsibilities of human resource management
are as follows
1. To establish good relation with employees.
2. To develop human capital.
3. To forecast and balance the demand for and supply suitable personnel.
4. To have efficient performance of the managerial functions.
5. To effectively utilise the technology and other resources.
6. To maximise productivity.
7. To develop higher employee morale.
8. To motivate human resources for better performance.
9. To ensure optimum utilisation of human resources.


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Strength of the company

Wages & other benefits
Basic wages
Increase in basic wages in certain categories on account of special increase given by
the management. Increase in basic wages as per the terms of IRC (Industrial
Relation Committee of Textile) settlement dated 29 June 1999.

Workers 161
Officers 8
supervisors 5
Office
assistant
15
Drivers 5
Security 5
Peons 3
TOTAL 202

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Revised occupational wages
Occupational wages means the basic wages fixed for the category or occupation
under the IRC settlement and doesnt include the annual increments.
Dearness Allowance.
Dearness allowance will be on the basis of Trivandrum cost of living index with
1970=100
Employees State Insurance (ESI)
The employment State Insurance Act provides benefits to employees in case of
sickness, maternity or any injury. An employee drawing salary less than Rs 10000
per month will come under this act. It is applicable to both accidents and Sickness.
The employee will get free treatment and compensation. The employee can take 90
days leave for sickness and accidents. For accidents leave, he or she will get 75% of
their basic wages and dearness allowance. In case of sickness leave, the employee
can draw 50%of their wages and dearness allowance.
Employee Provident Fund Scheme.
The employee contribution towards provident fund is 10%of monthly contribution
by the company. It is the amount received by the employee at the time of retirement
in lump sum. From the companies contribution Rs541 will be paid to every
employees pension fund each month.
Maternity Benefit
The maternity benefit is also provided as per the provisions of ESI act 1948. 84
days leave will be granted as Maternity benefit. If delivery is done at hospitals
referred from ESI hospital then the full amount of treatment will be reimbursed.
Gratuity
If the employees complete a five years of continuous service, they are eligible to get
gratuity. In case of death or disablement the qualifying period of 5 years is not
necessary. Sitaram textile Ltd, provide gratuity to the act, 1972.


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Canteen
Sitaram textile Ltd, Punkunnam provide a well established canteen. Both the
management and workers can use the canteen facility. Canteen extends its service
for round the clock.

Shelters and rest room
There is sufficient number of shelters and rest rooms are arranged separately for the
men and women workers. They can utilize the rest room at the leisure time or for
taking meals.
Leave with pay
For every employee, one day granted as leave for every 20 working days. The
employee has to work minimum days in the previous years.
Travelling allowances
The employees of Sitaram textiles get a travelling allowance of Rs 26 per month for
26 working days.
Pension
Workers 1000 to 1500
Staff - 7000 to 8000
Supervisors- 7000
Junior manager 8000
Assistant manager- 9000 above
Deputy manager- 10000
Manager- 12000
General Manager 14000
Managing director- 20000

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Selection of employees
The staffs of the organisation are appointed through the
PSC (Public Service Commission) and the lower workers are recruited through
agreement between trade unions & workers.

Shift of workers
There are three shifts in the company. They are

FROM TO
7.00 AM 3.30
PM
3.30 PM 12.00
AM
12.00AM 7.00
AM

Man power requirements
Mixing attendant
Schutcher attendant
Cording Tender
Combers
Drawing Tender
Simplex Tender
Simplex Doffing Boys

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Spinning Slider
Doffing Boy
Cone winners
Packing
Filter
Assistant Filter
Filter Helper
Cleaning gang
Shift Electrician
Jobbers and others

Employees turnover of Sitaram
Labour turnover is the rate of change in the labour force of
an organisation during a given period. Therefore it signifies the shifting of work
force from one organisation to another and also the loss of manpower due to
discharge, retirement, death etc.
Employees turnover of Sitaram is 3 to 5 employees per
annum. It is mainly because of retirement.


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PRODUCTION DEPARTMENT

Sitaram textile Ltd manufactures different count of yarns. In order
to have a clear understanding, the manufacturing process can be sequenced as
follows.

Production Manager
Supervisors
Production Staffs
Workers

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The products of the company were cotton yarn and cotton fabrics till
2000. Now the company produces only cotton yarn and polyester yarn. For
producing cotton yarn, the period of time is one week. The total consumption per
day is 2000kg.
Cotton yarn - 60 counts
Polyester yarn -70 counts
The term count implies the qualities of yarn. Higher the count
higher the quality. At the time of production wastes are created. The waste of cotton
are categorised into three that is saleable waste, reusable waste and invisible waste.
Reusable waste can be used for production of yarn. The saleable
wastes are gutter fly waste, lick ring fly cleaner, cowing ends, comber no in opener,
hard waste and sweeping waste flat strap waste. Invisible waste cannot be count but
it is estimated as 2% out of total input.


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PRODUCTION CHART

MIXING BALE
AUTO MIXER
SCUTCHER
CARDING
COMBER
DRAWING
SIMPLEX
CONE WINDING
RING FRAME (SPINNING)
PACKING
BLOW
ROOM
A. SILVER LAP
B. RIBBON LAP

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Production process

The raw material used in this conversion is cotton and
polyester. The different steps involved in this conversion are as follows.

a. Mixing
There are mainly two type of mixing. That is polyester
mixing and cotton mixing. Mixing is done at both manually and mechanically.

b. Blow room
In this section, mainly opening and cleaning of bale take
place. Firstly the bale passes through the bale breaker for the opening of the
compressed bales. Secondly it passes through a machine called step cleaner which
is used for cleaning the bale by step by step process. Thirdly, it passes through a
machine called Hopper feeder, which is also known as temporary storage area of
raw materials. Lastly the raw material passes through another machine and the lap
from of raw material is obtained with impurities removed to a certain extent.

c. Carding
The lap form of raw materials are processed and cleaned to
remove all the impurities and they are converted to slivers. These slivers are
collected in drums. This is of non uniform thickness. The machine used for carding
is called card machine and product is known as card sliver.


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d. Drawing
Here, the card sliver is processed to get sliver of uniform
thickness. This process is done twice. So the thickness is reduced and made
uniform. The product obtained by it is drawing sliver.
e. Simplex
The thin uniform sliver is passed in to the spindle machine
for the purpose of raring it. A number of spindles are used for it. The raw is further
thinned and the sliver is converted in to actual yarn and it is wound in the bobbins.
If there is break in one spindle, the machine automatically switched off. The
bobbins can carry 2 kg of yarn. The rowing bobbins are then passed to the next
department known as spinning department.

f. Spinning
The cop winding is started in this department. There are
number of machines used for it. Five machines are controlled by one worker. In this
section, works of workers are more. But it is not very risky work.

g. Cone winding
The cop form of yarn is wound on the paper cone by using
power 100m. The cone can carry 1.25 kg of yarn. This is used for selling
distribution. In cone winding, yarn from a single cop is wound one by one to make
1.25 kg of cone. Like cone winding there is also double winding. In these type of
winding instead of winding yarn from a single cone at a time, two cops is wound at
the same time, by this the yarn become stronger.
h. Packing
The cone of 1.25 kg is packed first in plastic. So that it
does not get wet and damaged while in transit. The product is sold in bulk quantities
is a bag of 50 kg. 40 cones are packed together and slip specifying the type of yarn
is also kept with the pack.

39

STORES DEPARTMENT

This department works under the store keeper. The entire
department needs certain items for the smooth working. These items were always
kept optimum in the store. The items will be issued by producing a material issue
voucher to the concerned departments.
There are two types of purchases. One is centralized purchasing
and the other is local purchases. The local purchases are made for the stores
purchases. Bill of material is received for the purchase. And these are recorded in
Inwards Receipt book. The inward receipts books include the following details.

1. Name of the supplier
2. Time and date of purchase
3. Quantity of material purchased
4. Place
5. Name of person who purchased
6. Name and designation of person who received and inspected the material.
Store Keeper

Staffs

40

7. Registered number of vehicle in which the goods had been brought in.
8. Transportation cost.

Each item in the store has been given a unique code number
and they are stored according to the code number and according to the cost centres.
Bin card is used to recording the receipts and issues of various materials. Proper and
scientific way of analyzing is not maintained in the company.

Even though the traditional technique, are being used in stores
management and the system is not suitable for the modern era of industry, the
personnel in stores manages to ensure each items in time when it is needed.

Methods of valuation of inventories

1. Stores , spares and coals at average cost

2. Raw materials at moving weighted average cost or net realizable value
whichever is lower

3. Finished goods -packed yarn at cost or net realizable value whichever is lower

4. Stock with retail shop at landed cost/ latest landed cost or realizable value after
making previous for obsolescence whichever is lower

5. Waste at realizable value

6. Material in processing. Spinning and weaving in progress. Loose yarn at lower
cost or net realizable value


41

7. The unfinished job conversion contracts for yarn are recognized as work in
progress valued at contracted price less expense still to be incurred for making it
ready for delivery.

Store department is responsible for storing the raw materials,
finished goods and spare parts required for the smooth functioning of the
organization. In this highly competitive companies cannot survive without a well
managed stores department. Inventories are the stock of the product. The store
keeper in the Sitaram keeps an inventory of finished product to be sold to customers
whenever they demand.

Raw material inventory
These are materials inputs of production process. These are
used to manufacture the final products. Sitaram uses the raw materials like cotton,
polyester etc
Work in progress inventory
These are semi finished products. These are the products that
need more work before they become finished products.
Finished goods inventory
These are finished or final products which are ready for sale.
The finished product of Sitaram is yarn.


42

FINANCE DEPARTMENT

The main function of finance department is to record day to
day transactions of business. The chief of finance department is finance manager.
Finance department plays a role of providing relevant financial information to all
departments

Functions of finance department

Two main functions of finance department are as follows
1. Accounting function
2. Finance function

1. Accounting function
Accounting function involves of keeping or recording day to
day accounts. The transactions namely receipts, disbursement of money transactions
Accounts Officer
Accounts Staffs

43

relating to purchase, production, sales, other income , fixed amount salaries& wages
and other expenses like manufacturing , administration, selling and distribution.

Objectives of accounting function

All assets and liabilities are recorded and classified properly in accordance with the
statutory requirements to reflect the financial position of the company as at any
particular date.
To maintain the truth and fairness of financial statements, via profit & Loss account
and balance sheet.
Receipts and payments of money are accurately recorded so that all payables
receivables are correctly reflected...
All expense and income of a particular period are accurately reflected in accordance
with the relevant statistics to understand the working result of that period.
The company maintains adequate books of accounts. There by
complying with the procedure of companys Act1956. Sitaram textiles fully
computerized its accounting functions. The following are the books of accounts
maintained by the company.

A. General ledger
B. Cash book
C. Day book
D. Sales register

44

E. Purchase register
F. Store inventory register
G. Store issue register
H. Semi finished goods register
I. Finished goods register
2. Finance function
It includes procurement of funds and effective utilization of
the same of the business. The finance function will help us to control all expenses
with comparing budgeted expenses and actual expenses.
Objectives of finance function
Selection of an optimum mix of different source of capital
Profit maximization and more importantly wealth maximization
To ensure control over expenses by constantly watching expenditure and income.
To provide dividends to share holders of the company
To utilize funds in such a manner that is rupee is made to work at its optimum level
without endangering the financial solvency of the company through decision such
as capital budgeting, profit planning, tax management and working capital
management.

Capital structure of the company
The share capital of the company is divided in to equity shares with
an authorized capital of 6 crores (6, 00,000 equity shares of Rs.100 /each) and
issued and paid up capital of Rs.5.94 crores (5, 94,000 equity shares of Rs 100/
each). All these shares are owned by the Government of Kerala.


45

PURCHASE DEPARTMENT

Purchasing is the procuring of goods as per the needs either for
further sale, use or storage- against payment of an optimum price.
The main item produced in the mill at present is yarn. The cotton
yarn and polyester yarn is manufactured by the company. The main raw material of
the product is raw cotton. The raw material in the mill is compressed from cotton
bales which weight 185 kg. Different varieties of cotton purchased from outside
state that is mainly from Tamilnadu, Andra Pradesh, Karnataka and Maharashtra.

Purchase Manager
Workers
Supervisor

46

Objectives of purchase function
The main objectives of purchase management are to ensure
availability of required goods of services, as and when they are needed by the
organization. This is to maintain a proper flow of supplies of goods as per the
specifications and on a cost effective basis.

The purchase should be done when the stores are required.
Purchase are always made on the principle of optimum price and cost effectiveness.
The acquiring of goods as per defined specifications.

PURCHASE ORDER

FROM
TO
RELATED
DEPARTMENT
PURCHASE
DEPARTMENT
STORE
KEEPER

47

MATERIAL MANAGEMENT AT A GLANCE

The main raw material is raw cotton.

REORDER POINT - 52 Days
MINIMUM QUANTITY LEVEL - 90000kg

RAW COTTON
Credit availability - 60 Days
Consumption per day - 2000kg.

OUT PUT - 100%
Saleable output - 70%
Saleable waste - 13%
Reusable waste - 15%
Invisible waste - 2%
Total 100%

REORDER OUTPUT - 30 days
Total cost of consumption - 2.5 lakh


48

QUALITY CONTROL DEPARTMENT

The main product of the company is cotton yarn and polyester yarn.
The yarn quality is termed as count. Higher the count higher the quality. The
count is calculated by using this formula:-

Count = length in hanks / weight of pounds.

1 hank = 840 yarn length
1 khandi = 355kg.

The quality control department works under production manager.
Actually there are two sides for the production process. One is production and the
other is the quality control. The quality is checked from each stage of production
and from raw material to finished goods.

49

MARKETING DEPARTMENT

Marketing is one of the most important operative functions of
management. It is the process by which goods produced are made available to the
consumers. Thus goods produced are to be stored and transferred from the place of
production to the place consumption thereby creating time and place utilities.
The products of Sitaram Textiles are cotton yarn and polyester yarn.
Certain present of the waste of products can also be sold. The products of the
company are highly qualified. So the demand of the product is high. The company
follows direct distribution channel (zero level marketing).
Direct marketing
Direct marketing becomes common in this world. The company do not create dealer
network. The products are directly marketed to the depots in Maharashtra. Direct
marketing is very beneficial for customers as well as seller and producers. It
eliminates the gap between producer and consumer. The products can be effectively
displayed and demonstrated right in front of the customers. These goods and
services are available at fair price.

Marketing manager
Ass. Marketing Manager

50

The company did not give importance to promotional activities
because the company has high demand in its products. They produce finished goods
after receiving orders. The price of the product is fixed by the government of
Kerala.
Management and workers have a strong confidence to success in the
market. If the government of Kerala provides the working capital (at least 2 crores)
but the company has to deliver the goods in time with consistency in quality.
Therefore the company can able to increase the order. So that the company can
definitely capture the entire market.
Now the company is facing cut throught competition from the firms
which carries same business operations. Severe price competition from the
unorganized power loom sector has restricted its operation to producing yarn.


51

SWOT ANALYSIS

Swot analysis is under taken to understand the firms external and
internal environments. A conscious identification of the relevant environment
enables an organization to focus its attention on these factors which are intimately
related to its mission, objectives and strategies.

STRENGTH
The company has a well defined internal control system.
The company provides high quality products.
The company is blessed with highly qualified and skilled personnel.
The company has cordial relationship with employees .The employees are more co-
operative.
The company ensure workers participation in management for improvement.
The company is situated in10 acres of land. So expansion is possible.
The company has taken various steps to improve productivity.
Industrial relations are maintained harmonious.
The company has productive work force.


52

WEAKNESSES.

The trade union of the company are powerful.
The company has not repaid interest towards principal amount of loan.
High transportation cost offset the profits of the company.
Technological obsolesce is the major problem, now the company is used 30 year old
machinery.
Shortage of capital prevents the companys effective performance.
High labour turnover of employees. Employees turnover is mainly because of
retirement.
The loss of control is an important weakness of the company.
The company follows direct marketing so the company cant capture the whole
market.
The company has not followed any promotional activities so the company cannot
attract the customers.
Frequent change of BOD adversely affects the performance of management. The
BOD is selected by government of Kerala.
No facility for research and development.


53

OPPORTUNITY
The company need to focus on product development.
Proper up gradation of the technology helps the company to make quality good with
minimum cost of production.
The company can capture the foreign markets.
Proper recruitments and selection of personnel for vacant posts
Control of the department functions will helps the company for improvement.
By changing the distribution channel the company can widen the market
opportunity.
A research and development wing helps the company to improve the products
quality and aiso helps to invent new products to the customers.
By introducing new production plants the company can improve their capacity.

THREATS
The cut throat competition from the similar field.
Frequent changes in political policies and system are a threat of the company.
Increasing trend in the price of raw material.
The pollution created by the invisible waste of the cotton may cause health
problems.
Frequent changes in government policies obstruct the effective performance of the
company.


54

The Swot analysis give the clear picture about the organization both
in terms of internal and external environment. The organization have high quality
strength and opportunity to minimises weaknesses and threats. And the strength can
be use to utilises the maximum opportunity and the maximum utilisation of the
creative and productive opportunity that helps to avoid the weaknesses and
minimises the threats and producing quality product with new technology. The good
relation with the employees that helps to increase the production and minimises the
chance of making problems of the trade unions in the organization. And these better
strategies are formulated that can helps to increase the market share of the
organization.


55

CONCLUSION

The research entitled An Organizational Study of Sitaram Textiles
Limited Was under taken with a view to study, understand, learn, analyses about
the operation of the organization. It also helps the researcher to gain more
knowledge and to get practical experience about the functions of each department.
In this era, companies should ensure that they offer job satisfaction and labour
remuneration to the perspective knowledge in the organization. There is a greater
co-operation between and the management and employees. The firm must also
communicate regarding their product and services.


56

Organisation Study On Sitharam

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An Organizational Study Report on Sitaram Textiles Limited, Thrissur.

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