ON SUPPLY CHAIN MANAGEMENT AT OSWAL DENIM PROP: OSWAL WOLLEN MILLS LTD. Submitted in partial fulfillment of requirement for the award of the degree or Master of Business Administration in Finance From Punjab Technical University, Jalandhar
SUBMITTED BY SUKHWINDER SINGH Reg. No: -1324615 SRI SUKHMANI INSTITUTE OF ENGINEERING AND TECHNOLOGY Derabassi, Distt. (Mohali), Punjab-140507 UNDER THE GUIDANCE OF Prof. Jasleen Kaur & Prof. Pooja Pandey DECLARATION
I (Sukhwinder Singh) hereby declare that all the information furnished in this report is my work containing authenticated facts. This piece work is only being submitted to SRI SUKHMANI INSTITUTE OF ENGINEERING & TECHNOLOGY.
Signature ... Name ... ... ACKNOWLEDGEMENT
This report is an outstanding prospect to convey my gratefulness to those many people whose timely help and guidance went a long way in finishing this project work from commencement to achievement. I would like to give my special thanks to R C Kaushal (Accounts Deptt.) project guide for assigning me such an interesting and worthwhile research project and for helping me throughout the project with his constant guidance and support .I would also like to thank departmental guides for his continuous support and advice for the successful completion of the project. An accomplishment requires the efforts of many people and this work is no different. I feel obliged in taking the opportunity to thanks MR. R.M SOOD (Finance Controller) for his help & guidance. I also feel thankful to Mr. R.C.Kaushal (Accounts Manager), who have helped me understanding the project & how working capital management is applied at Oswal Denim. I also express my deep sense of obligation to the management of Oswal Denim (Lalru) for giving me an opportunity to undergo field training in their esteemed organization. During the training period at OSWAL I have learned that how theoretical concepts are applied in a real practice in managing Supply chain Management. I have also learned a lot about the corporate working culture and got a exposure to the various documents which are use in arranging working capital of organization.
PREFACE
We cannot achieve anything worthwhile in any field of knowledge solely on the basis of theoretical knowledge from books to order to achieve practical, positive and concrete results, the classroom learning needs to be effectively wedded to the reality of situation outside the classroom. Working capital means the part of the total assets of the business that change from one form to another form in the ordinary course of business operations. The word working capital is a made of two words working and capital. The word working means day to day operation of the business, whereas the word capital means monetary value of all assets of the business. This project is meant to know Supply chain management in Oswal Denim at Nahar Group of Companies.
EXECUTIVE SUMMARY
My training at Oswal Denim, Lalru was a great exposure to the industry. After going through my summer training, I had a firsthand experience of how an industry as well as Finance department functions.
INTRODUCTION OF PROJECT This project is about the Supply chain management at Oswal Denim. The Working Capital Mangement helps in carrying out day to day activities of organization smoothly.
ORGANISATION After testing the glitter of its products in the Indian and the international sky, Nahar has spread its wings in 2006 in the world of Denims. The technological superiority of the group makes it versatile in the production of the wide range of Denim, from the chic and clean to the fancy and exciting for both international and domestic market The markets of NAHAR GROUP are cries crossed allover the globe with major clientele in Australia, New Zealand, Europe, Middle East, Africa, Russia and Asia.
INTRODUCTION OF THE STUDY Meaning Of Supply Chain Management Supply chain management (SCM) oversees and optimizes the processes of acquiring inputs from suppliers, converting those inputs into a finished product, and delivering those productsor outputsto customers. SCM is an umbrella term that refers to a variety of approaches for the management of natural and human resources from the supplier to the manufacturer or service provider to the consumer and back . This includes the identification and creation of new opportunities for products and services in cooperation with upstream and downstream partners, and the involvement of internal as well as external stakeholders in decision making on supply chain matters. Traditionally, a supply chain is: A network of companies that exchange resources such as materials and information to deliver products to customers. Supply chains consist of a company, its suppliers, its distributors, and its customers. In the traditional supply chain structure resources flow downstream to the consumer. The supply network consists of a focal company and its suppliers, retailers, and customers. Figure shows the basic structure of a supply chain.
Supplier Company Customer Retail INTRODUCTION TO INDUSTRY The Nahar Group is guided by a penchant for perfection, attention to detail, and an abiding respect for nature. Under the aegis of Chairman & Managing Director, Mr. Sukhraj Nahar and Vice-Chairperson Ms. Manju Yagnik, the group has spent the last four decades partnering with globally acclaimed companies and working closely with customers, resulting in the creation of inspirational landmarks across 15 million sq. ft. of residential, commercial and industrial properties in Mumbai, Pune, Ahmedabad, and parts of Rajasthan. The Nahar Group is a story of hard work, success and a never-ending passion for excellence. In this journey, The Group has been awarded and recognized for work excellence several times over. And its not just a contribution to the real estate industry; but also having won many hearts and accolades for social and community initiatives. The collaboration is tremendous everyone brings their own perspectives and expertise to the table, and together, Nahar Group plans and develops its expansions. Nahar Group continues to work together at every stage of the process, right through to the final detail. Many of our partners have been associated with us for decades, and are considered to be a part of the extended Nahar family. Nahar Group has been building such a future where phenomenon of Life applies - Growth. AWARDS Nahars Amrit Shakti was honoured with the Township Award at the Pan-India level, instituted by Times Glory Recognized for Building a Better Future Together by HDFC Nahar Group has consistently bagged Best Innovative Marketing Developer Award, Critics Award Participants Choice And Excellence in Design Development Award at the MCHI Expo Best Residential Developer of the Year Award by Construction Source India
COMPANY PROFILE OSWAL DENI MS A UNIT OF OSWAL WOOLLEN MILLS LIMITED Oswal Woolen Mills NAHAR GROUP established in 1949 surges ahead to establish it self as a reputed industrial conglomerate with a wide ranging portfolio from Worsted Spinning, Cotton Knitted, and Cotton Woven Garments, Woollen Hosiery Etc. The group has spinning capacity of 0.4 millions cotton spindles 25000 worsted spindles with turn over of $500 million inclusive of export turnover of $150 million. Out of total production, 60% of the production is dedicated to exports and the rest 40% for domestic market. The production facility has been awarded ISO 9001:2000. The markets of NAHAR GROUP are cries crossed allover the globe with major clientele in Australia, New Zealand, Europe, Middle East, Africa, Russia and Asia. The objective is meeting the buyers expectations with consistent quality backed by R & D divisions equipped with latest equipment, Cream of highly qualified technocrats and adhering to timely schedules. Today Oswal Woolen Mills LTD. is a company that owes its strength in the market and solidity to foresight of its chairman Sh. Jawahar Lal Oswal, the professional inputs of the board of directors and able to team of highly skilled mangers OSWAL WOOLEN MILLS LTD is the Flagship Company of over US$500 millions NAHAR GROUP OF COMPANIES. NAHAR'S WORLD OF DENIM:
After testing the glitter of its products in the Indian and the international sky, Nahar has spread its wings in 2006 in the world of Denims. The technological superiority of the group makes it versatile in the production of the wide range of Denim, from the chic and clean to the fancy and exciting for both international and domestic markets.
Indian denim market is among the fastest growing market with a projected growth rate of 8-12%. Fashion is driving the sales of this apparel like never before. Fashion mania that is fascinating the jeans market is ubiquitous, cutting across the price segments and brands. Increasing number of middle-income families in India has given a chance for denim apparels to capture a good market. Satellite Televisions have also played their part in creating a fascination for these apparels associated with the Western culture. Brands like Hugo Boss, Tommy Hilfiger, and Rathore jeans make the premium segment with a price tag of more than Rs.2, 000. Pepe, Wrangler, and Lee make the premium segment with products ranging from Rs.1, 000-2,000. Numerous brands exist in the Indian market with a price range of Rs.500 -1,000. Other in store jeans is also available at prices ranging from Rs.400.
Presently producing 40 million meters per annum at two locations. Total 60 Million meters expected by December, 2012. Wide range of innovative and high quality denim fabrics. 100% cotton & cotton tencel
Cotton Lycra
DOW XLA
Cotton T400
Cotton Linen in Indigo
YBIT , GBIT , SBIT , IBST , BBIT
Coated, over dyed , blotched, tinted in the weight range of 5-16 oz.
We cater exclusively a wide range of PRINTED DENIMS, Soft and Silky ready to stitch for our premium buyers and are already catering to VF Corporation and Eddie Bauer. To make the shipment more safe, we bring the container to our Plant and monitor 100% container stuffing. Each roll is stretch wrapped to resist and bear the shipment risk. Washed blankets indicating the shade groups for individual rolls which enable the client to save time and efforts in garment manufacturing.
MANAGEMENT OF THE COMPANY
BOARD OF DIRECTORS Under the articles of Association we cannot have fewer than three directors or more than 12 directors. We currently have 10 directors in the companys Board of Directors. DETAILS OF DIRECTORS MR J.L OSWAL MR SANDEEP JAIN MR DINESH GOGNA MR AMARJEET SINGH MR KAMAL OSWAL MR DINESH OSWAL MRS H.K BAL MR K.S MAINI DR.O.P. SAHNI DR SURESH KUMAR SINGLA KEY MANGERIAL EMPLOYEES: MRS MONICA OSWAL MRS RUCHIKA OSWAL MR NARAYAN DASS JAIN MR SAT PAUL NIJHAWAN MR RUKMESH MOHAN SOOD, 57 YEARS, is the financial controller of our company. He is a qualified fellow member of the institute of chartered Accounts of India. He has 32 years of work experience in the field of finance and accounts .He began his carrier with our company in 1974 and he currently advises our company on finance and accounts. The gross remuneration paid to him in Fiscal 2006 was Rs.50 million. MR VIRENDER SHARMA MR NAVDEEP SHARMA MR PRITAM SINGH MR NITIN SHARMA
FEATURES OF NAHAR GROUP
1. Total no of units 9. 2. Group turnover is Rs 53814.35 in a current year. 3. Export market: U.S.A, United Kingdom, Germany, Russia, Japan, Australia, New Zealand, Holland ,Thailand, Hong Kong Singapore Taiwan, South Africa, Canada, Egypt, Israel and Bangladesh 4. Important brand names areMONTE CARLO and CANTERBURRY OWM were the proud recipient of the BEST exhibited Productsaward from the international wool Secretariat for these two glamours brands. 5. Product Protfolio: Spinning, knitting,fabricsprocessing,hosiery garments.knitware,sugar,infrastructure development and information technology 6. COTTON COUNTY is there emerging ready to wear Brand.
ACHIEVEMENTS OF NAHAR GROUP
The group has also achieved excellence in exports which has also been recognized by the export council as well as the govt. of India by bestowing several export rewards and trophies such as:
1. First gold trophy in global exports in 1989 2. First silver trophy in hosiery exports in 1990 3. Export award consecutively for five years(1989 to1994) for export for woolen hosiery garments 4. International award for excellence performance in exports in 1993 5. Silver trophy for second highest export performance in 1998-1999 6. ISO 9002 received in 2001 7. NAHAR EXPORT LIMITED, is the recipient of best Exporter for the year 2002- 03 8. Also NIEL,GARMENT Unit is the recipient of state level Safety Award
Due to its excellent export performance the company continues to enjoy the status of GOLDEN TRADING HOUSE .The export performance has also enabled the company to win two trophies for non quota category and the second one SILVER TROPHY for the highest export of cotton yarn in non quota category
SWOT ANALYSIS
The SWOT analyses is a systematic identification of internal strength and weaknesses of the business and environment opportunities and threats being faced by that business and provide information that is helpful, in matching the firms resources and capabilities to the competitive environment in which it operates. It is necessary for the organization to analyze its weakness that can be removed by undertaking the project and what opportunities can be exploited and strengths can be strengthen more. As such, it is instrumental in strategy formulation and selection. It is dynamic and useful framework for choosing a staretgy.The following diagram shows how a SWOT analysis fits into an environmental scan.
High Turnover High production capacity Wide range of varieties Cover All classes of society Using Ultra Modern Technology Machines Skilled and Cooperative ManPower
Weakness
Lack of proper management Lack of marketing strategies Low awareness among people No proper system of storage of raw material No proper display room for sampling
Opportunity
More opportunity in export market. Company can target low income group in india Made in India DENIM fabric has made a strong quality perception amongst the highly quality caution customers of EU & US.
Threat
Threat from local mills outside the Punjab as they are enjoying octri and charge less transportation charges benefits.
Fashion may change, impacting the demand for denim, however none of the leading designer of the world expect that tohappen on a permanent basis.
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
Supply chain management (SCM) oversees and optimizes the processes of acquiring inputs from suppliers, converting those inputs into a finished product, and delivering those productsor outputsto customers. SCM is an umbrella term that refers to a variety of approaches for the management of natural and human resources from the supplier to the manufacturer or service provider to the consumer and back . This includes the identification and creation of new opportunities for products and services in cooperation with upstream and downstream partners, and the involvement of internal as well as external stakeholders in decision making on supply chain matters. Traditionally, a supply chain is: A network of companies that exchange resources such as materials and information to deliver products to customers. Supply chains consist of a company, its suppliers, its distributors, and its customers. In the traditional supply chain structure resources flow downstream to the consumer. The supply network consists of a focal company and its suppliers, retailers, and customers. Figure shows the basic structure of a supply chain.
A supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer. Supplier Company Customer Retail Managing the chain of events in this process is what is known as supply chain management. Effective management must take into account coordinating all the different pieces of this chain as quickly as possible without losing any of the quality or customer satisfaction, while still keeping costs down. The first step is obtaining a customer order, followed by production, storage and distribution of products and supplies to the customer site. Customer satisfaction is paramount. Included in this supply chain process are customer orders, order processing, inventory, scheduling, transportation, storage, and customer service. A necessity in coordinating all these activities is the information service network. In addition, key to the success of a supply chain is the speed in which these activities can be accomplished and the realization that customer needs and customer satisfaction are the very reasons for the network. Reduced inventories, lower operating costs, product availability and customer satisfaction are all benefits which grow out of effective supply chain management. The decisions associated with supply chain management cover both the long-term and short- term. Strategic decisions deal with corporate policies, and look at overall design and supply chain structure. Operational decisions are those dealing with every day activities and problems of an organization. These decisions must take into account the strategic decisions already in place. Therefore, an organization must structure the supply chain through long-term analysis and at the same time focus on the day-to-day activities. Furthermore, market demands, customer service, transport considerations, and pricing constraints all must be understood in order to structure the supply chain effectively. These are all factors, which change constantly and sometimes unexpectedly, and an organization must realize this fact and be prepared to structure the supply chain accordingly. Structuring the supply chain requires an understanding of the demand patterns, service level requirements, distance considerations, cost elements and other related factors. It is easy to see that these factors are highly variable in nature and this variability needs to be considered during the supply chain analysis process. Moreover, the interplay of these complex considerations could have a significant bearing on the outcome of the supply chain analysis process. Elements of the Supply Chain A simple supply chain is made up of several elements that are linked by the movement of products along it. The supply chain starts and ends with the customer. Customer: The customer starts the chain of events when they decide to purchase a product that has been offered for sale by a company. The customer contacts the sales department of the company, which enters the sales order for a specific quantity to be delivered on a specific date. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility. Planning: The requirement triggered by the customers sales order will be combined with other orders. The planning department will create a production plan to produce the products to fulfill the customers orders. To manufacture the products the company will then have to purchase the raw materials needed. Purchasing: The purchasing department receives a list of raw materials and services required by the production department to complete the customers orders. The purchasing department sends purchase orders to selected suppliers to deliver the necessary raw materials to the manufacturing site on the required date.
Inventory: The raw materials are received from the suppliers, checked for quality and accuracy and moved into the warehouse. The supplier will then send an invoice to the company for the items they delivered. The raw materials are stored until they are required by the production department. Production: Based on a production plan, the raw materials are moved inventory to the production area. The finished products ordered by the customer are manufactured using the raw materials purchased from suppliers. After the items have been completed and tested, they are stored back in the warehouse prior to delivery to the customer. Transportation: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so that they are delivered on or before the date specified by the customer. When the goods are received by the customer, the company will send an invoice for the delivered products.
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Process View of Supply Chain
Supply chain process cycle illustrates the four cycles and five supply chain stages
Importance of Supply Chain Management
The total time for materials to travels through the entire supply chain management can be quite long . Since the materials spends so much time waiting in inventory at various stages in the supply chain, there is a great opportunity to reduce the total supply chain cycle time leading to a corresponding reduction in inventory, increased flexibility, reduced costs and better deliveries. Customer order cycle Retailer Replenishment cycle Distributor Manufacturing cyce Manufacturer Procurement cycle Supplier Customer Many companies have drastically improved their internal operations and now find it necessary to consider relations with external customer and supplier in the supply chain to gain further improvements in their operations. Supply chain thinking is an application of systems thinking and provides a basic for understanding processes that cut across a companys internal department and processes that extend outside the company as well. The goals of supply chain management are to reduce uncertainty and risks in the supply chain, thereby positively affecting inventory levels, cycle time, processes and ultimately end-customer service levels. The design, planning and operation of supply chain have a strong impact on overall profitability and success. Supply chain management has become a hot competitive advantage as companies struggle to get the right stuff to the right place at right time. All the Total Quality Management, Just-in-Time System, Reengineering, Team work and Delighting the Customers depends on the relationships with supplier and distributors who are part of the supply chain. Supply chain management includes transportation vendors, suppliers, distributors, banks, credit and cash transfers, bills payable and receivable, warehousing and inventory levels, order fulfillment and sharing customer, forecasting and production information.
PURCHASE DEPARTMENT Purchase department plays an very important role in an organization because purchasing has its effect on the manufacture, quality, cost, efficiency, and prompt delivery of goods to customers. Purchasing is the most important function of material management as the moment an order is placed for the purchase of raw materials. A substantial part of the companys finance is committed which affects cash flow position of the company. Here in tis company there is separate purchase department and the responsibility for purchasing all type of materials should be entrusted to this department.
OBJECTIVE OF PURCHASE DEARTMENT
To make continuous availability of materials for production To make purchases competitively and wisely at the most economical prices. To purchase proper quality to minimize wastage To develop good supplier relationship To develop alternative source of supply
FUNCTIONS OF PURCHASE DEPARTMENT
What to purchase ? When to purchase ? Where to purchase ? How much to purchase ? At what price to purchase ? OBJECTIVE OF THE STUDY
To find out the position of Denim among competitors Brand. To study the consumer preferences of DENIM Vis a Vis other competitors. To understand the operational functions of Supply Chain Management Understanding of the operational areas of logistics management and their interrelationships.
RESEARCH METHODOLOGY RESEARCH Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. Research is an academic activity as such the term should be used in a technical sense. Research refers to: Defining and redefining problem Formulating hypothesis or suggested solutions Collecting, organizing and evaluating data Making deductions and reaching conclusions At last carefully testing the conclusions to determine whether they fit the formulating hypothesis.
Scope of Study Scope of research is only restricted to the population of OSWAL DENIMS LALRU. RESEARCH PROCESS Research process consists of series of action or steps necessary to effectively carry out research. These steps are to be followed in the same sequence. These steps are as follows: Specifying research objective Preparing a list of needed information Designing the data collection project Select a sample size Organizing and carrying data and reporting the findings.
RESEARCH DESIGN The research design is a pattern or an outline of the research projects working, it is a statement of only the essential elements study, those that provide the basic guidelines for the details of the project. Further a research design is an arrangement of conditions for collection and analysis of data in that aim to combine relevance to research purpose with economy in procedure. It constitutes the blueprint for collection, measurement and analysis of data. Research design stands for advance planning of the methods to be opted for collecting the relevant data and the techniques to be used in their analysis, keeping in view of the objectives of their research. The present study, being conducted, followed a Descriptive Design. It produces a picture of phenomenon in which decision maker is in trusted. As the data would be responses from a sample containing a large number of sources. Design of descriptive studies includes the nature and source of the data, the nature of expected results and the analytical method. The research design for this study was :-
Descriptive Research:- A type of conclusive research which has as its major objective the description of something- usually market characteristics or functions. In other words descriptive research is a research where in researcher has no control over variable. He just presents the picture which has already studied . Conclusion Oriented Research:- Research designed to assist the decision maker in the situation. In other words it is a research when we give our own views about the research.
Sample Size: The Data and research is based on the sample size of 20 respondents.
Data analysis and Interpretation
1. Which brand of Denim do you usually purchase?
Interpretation and analysis
It is analyzed from the above figure that 51% people of Ludhiana is using Levis Denim, 20% is using Pepe Denim, 15% is Using Monte Carlo Denim , 10% is using Killer Denim and 4% Numero Uno Denim and the highest percentage of Levis .
2-. Which attributes attract you to buy the Denim of different companies?
- Attributes attracts Monte Carlo
Interpretation and analysis
After the customer survey the Monte Carlo the product quality is attract the percentage of product quality is 33% ,Look of the store is 12%, 20% Style and variety ,6 % customer service ,23% Fit(comfort) and 6% price. So the Monte Carlo is famous for Product Quality of the products.
Attributes attracts Pepe Denim
Interpretation and analysis
After the customer survey the Pepe Denim is also famous for the product quality and it is attract the consumer and the percentage of product quality is 33% ,Look of the store is 12%, 20%, Style and variety ,6 % customer service ,23% Fit(comfort) and 6% price. So the the Pepe Denim is famous for Product Quality of the products.
- Attributes attracts Levis Denim
Interpretation and analysis
After the customer survey the Levis Denim the style & variety is attract the consumer the percentage of style & variety is 48% ,Product quality is 17%, 12 % customer service ,11% Look of the store , 9% fit and 3% price. So the Levis Denim is famous for the style and variety of the products.
- Attributes attracts Killer Denim
Interpretation and analysis
After the customer survey the Killer Denim is famous for the Fit and the customer is more prefer Killer Denim the percentage of product quality is 17%, Look of the store is 10%, 20% Style and variety, 7% customer service, 34% Fit (comfort) and 12% price. So the Killer Denim is famous for fit. So the consumer prefers Killer Denim.
Attributes attracts NumeroUno Denim
Interpretation and analysis
After the customer survey the Numero Uno Denim the fit is attract the consumer the percentage of Fit is 27.2% ,Look of the store is 18.8% , 12.12% Style and variety , 21.2% customer service ,15.15% product Quality and 6.06% price. So the NumeroUno is famous for Fit (comfort) of the products.
3- Have you ever seen Denim Advertisement?
Interpretation and analysis
After the survey the 41% consumer looks the advertisement of Denim, 24% Pepe Denim, 24% Killer Denim , 7% of Killer Denim, and 4% Numero Uno Denim so the maximum no people look the advertisement of Monte Carlo.
4-In which medium did you watch the Advertisement?
Interpretation and analysis
After the survey 40% peoples look the advertisement through internet , 28 % of people looks the advertisement of through print media ,22% people through Hoarding and 10% peoples looks the advertisement through Tv commercials.
5. Which price bracket would you prefer to buy the Denim Product?
Interpretation and analysis
After the customer survey peoples like to purchase in the range of 1400-2000 and the percentage is 56% and the bracket of 2000-2500 is the percentage of 41 % and 3% of people like to purchase in the bracket of 2500-3000.
SUGGESTIONS
Must have computerized bin system In the sampling department provide a display room In the product development provide some software for new development The company is facing over stock problem try to solve it More awareness among people Computerized chip system must be used for time keeping Have Proper training Cell