malabar cements project report

AN ORGANISATION STUDY REPORT ON MALABAR CEMENTS LIMITED

PALAKKAD, KERALA

SUBMITTED TO

MAHATMA GANDHI UNIVERSITY, KOTTAYAM in partial fulfillment of the requirements for the third semester MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY Mr. AKHIL RAJ P REG.NO. 40912

UNDER THE GUIDANCE OF Mrs. ANNEY CHACKO FACULTY, BIMS

2012-2014

DECLARATION

I, Mr. Akhil Raj P, hereby declare that this organization study report of Malabar Cements Limited is an authenticate record of work done by me and submitted in partial fulfillment of the third semester requirement for the award of the Degree of Master of Business Administration of Mahatma Gandhi University, Kottayam under the supervision and guidance of Mrs. Anney Chacko, Faculty Guide, Berchmans Institute of Management Studies during my period of study. The contents in this report are based on the data collected by myself from Malabar Cements Limited. I also state that all the information given are true to my knowledge and I have not submitted it before, either in part or in full for the award of any other degree.

Changanacherry

AKHIL RAJ P

ACKNOWLEDGEMENT “With God behind us and His arm before, we can face whatever lies before us”. First of all I would like to thank God Almighty for His love, mercy and abundant grace that He has showered upon me during my project period and preparing the report. I would like to express my sincere thanks to Rev.Dr.Tomy Joseph padinjareveetil, Principal St.Berchmans’ College for giving me an opportunity to do the Organizational Study. I would also like to thank Dr. Mathew Joseph Head of the Department, BIMS for all the help in completing this Organization Study. I am indebted to Mrs. Anney Chacko, Faculty Guide, BIMS who guided me with valuable suggestions and encouragement to complete this study. I express my gratitude to Mr. K. Padmakumar, General Manager of Malabar Cements Limited Palakkad for providing me the opportunity and facilities to do this organization study. I express my sincere gratitude to Mr. Suliman Personnel officer, who has my guide during the study and facilitated my performance. I express my heartfelt thanks to all the department heads and other supporting staffs who provide me insights on their respective department functioning. Finally I would like to express my sincere thanks and gratitude to my friends, parents and to all my well wishers who have provided all necessary support to make this Organization Study a success. AKHIL RAJ P

TABLE OF CONTENT SL. No

1

2

3

4

Chapter

Particulars

Page No.

1 1.1 1.2 1.3

INTRODUCTION Objectives of Study Scope of the study Limitations of the study

1 3 3 3

2 2.1 2.2 2.3

INDUSTRY PROFILE History of Cement Industry Cement Industry in India Future Outlook

4 5 6 9

3 3.1 3.2 3.3 3.4 3.5 3.6 3.7

COMPANY PROFILE History Company Policy Growth Story Certification and Achievements Plant and Factor Details Organizational Structure Product Range

10 11 13 14 15 16 17 18

4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8

DEPARTMENT ANALYSIS Purchase Department Production Department Stores Department Quality Control Department Human Resource Department Finance Department Marketing Department Systems Department

19 20 23 26 28 31 46 50 57

5

SWOT ANALYSIS

59

6

FINDINGS AND SUGGESTIONS

62

7

CONCLUSION BIBLIOGRAHY APPENDIX

64 66 68

5

6

7

LIST OF FIGURES

SL. No

Chapter

Figure Number

1 2 3 4 5 6 7 8 9 10

3 4 4 4 4 4 4 4 4 4

3.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9

Title Organizational Structure Purchase Department Structure Production Department Structure Production Process Human Resource Department Structure Time Office Structure Finance Department Structure Marketing Department Structure Market Share Analysis Systems Department Structure

Page No. 17 20 23 25 31 41 46 50 56 57

LIST OF TABLES SL. No

Chapter

Table Number

Title

Page No.

1

4

4.1

Criteria for signing Purchase Order

22

2

4

4.2

Raw materials and its sources

22

3

4

4.3

Quality Parameters

28

4

4

4.4

Packaging

55

EXECUTIVE SUMMARY The Organization Study Programme is conducted at “Malabar Cements Limited.” Walayar, Palakkad. The report consists of well defined set of objectives to understand the practical applications learned in class and give suitable suggestion to organization, primary data and secondary data, were sources of information also the detailed description about the entire history of the industry and with continued growth and demand in the economy and industry, the products of Malabar Cements are being lapped up by the eager market. The various external factors like promoters; competitors which effect the working of the organizations are discussed in detail. Then the report gives details of the internal factors and their analysis. The various departments of the organization are discussed in detail like the marketing, human resource, production, finance etc. The report also constitutes the mutual existence of each departments to improve the performance of the organization and its policies. Lastly, the report gives the analysis of the strengths, weakness, opportunities, threats of the organization. Findings and recommendations are derived out of the analysis of available information. The various sources of information are also produced in the bibliography.

Malabar Cements Limited

CHAPTER 1 INTRODUCTION

Berchmans Institute of Management Studies

Page 1


1.INTRODUCTION Organization is the foundation upon which the whole structure of management is built. Organization is related with developing a frame work where the total work is divided into manageable components in order to facilitate the achievement of objectives or goals. Thus, organization is the structure or mechanism (machinery) that enables living things to work together. In a static sense, an organization is a structure or machinery manned by group of individuals who are working together towards a common goal. Alike 'management', the term 'organization' has also been used in a number of ways. Definitions of Organization Different authors have defined organization in different ways. The main definitions of organization are as follows: •

According to keith Davis, "Organization may be defined as a group of individuals, large of small, that is cooperating under the direction of executive leadership in accomplishment of certain common object."

•

According to Louis A. Allen, "Organization is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives."

Organization Study Organizational study is an effort towards understanding the organization, its policies, structure and methodology adopted. It gives us brief description of the overall functioning of the company or organization. Organizational studies is "the examination of how individuals construct organizational structures, processes, and practices and how these, in turn, shape social relations and create institutions that ultimately influence people", organizational studies comprise different areas that deal with the different aspects of the organizations, many of the approaches are functionalist but critical research also provide alternative frame for understanding in the field. Berchmans Institute of Management Studies

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Organizational study at MALABAR CEMENTS LIMITED, PALAKKAD was very much helpful to achieve these objectives. Here I would like to make study on its success, & trying to concentrate on the organization and the role of its various departments.

1.1 OBJECTIVES OF THE STUDY To familiarize with functioning of business organization. To familiarize with the different departments in the organization and their functioning. To understand how key business processes are carried out in organizations. To understand the various policies and programs of the organization. Understand how information is used in an organization for decision making at various levels. To relate theory with practice. 1.2 SCOPE OF THE STUDY The study is limited to MCL Limited, Walayar. It concentrates on the functioning of different departments in the organization. The study focuses on the organizational structure of MCL. It is purely based on the information obtained from the departmental heads and other staffs of the organization. 1.3 LIMITATIONS OF THE STUDY Period of the study is limited to one month within one month an entire organization cannot be understood to its fullest. Study is based on the information obtained from the department heads and other staffs of the organization which may sometimes coloured.


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CHAPTER 2 INDUSTRY PROFILE


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2 INDUSTRY PROFILE 2.1 HISTORY OF THE INDUSTRY Cement is one of the core industries which plays a vital role in the growth and expansion of a nation. It is basically a mixture of compounds, consisting mainly of silicates and aluminates of calcium, formed out of calcium oxide, silica, aluminium oxide and iron oxide. The demand for cement depends primarily on the pace of activities in the business, financial, real estate and infrastructure sectors of the economy. Cement is considered preferred building material and is used worldwide for all construction works such as housing and industrial construction, as well as for creation of infrastructures like ports, roads, power plants, etc. Indian cement industry is globally competitive because the industry has witnessed healthy trends such as cost control and continuous technology up gradation. The word “cement” derived from "caementum" in Latin meaning hewn stone chips and then started to be used in the meaning of “binder”. The date of the first reinforced concrete building is 1852 but yet the use of binding agents in the construction of buildings dates back to very old times. The first material used as binding agent is lime. Although there are no precise findings, it is possible to say that the binding property of lime was discovered in the early period of human history, in 2000s B.C. Examples of the use of lime as a construction material have been encountered in different regions of the Ancient Egypt, Cyprus, Crete and Mesopotamia. The Ancient Greeks and Romans used lime as a hydraulic binder. Architect Vitruvius (70-25 B.C.), in his 10-volume book "On Architecture", mentions the hydraulic properties of pozzolana and lime and even gives a mixing ratio that can be used in the buildings to be constructed by rivers and seas. Throughout the history, many different binding agents symbolizing the civilization of that period were used in the Egyptian Pyramids and the Great Wall of China and in the castles built at different times. Later on, nearly 2000 years ago, the Romans mixed hydrated lime with volcanic ashes and afterwards with dusts obtained from fired brick and thus started to use a hydraulic binder having properties similar to those of today’s cement. The first cement production plant in the world was founded in 1848 in England. The first German Cement Standard was created in


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1860. And, the establishment of the American Concrete Institute (ACI) and the creation of the first American Regulations coincide with 1913. Although cement production and sales commenced in 1878 in the world, cement sector was introduced to Turkey primarily in 1912 with private sector’s initiative. The 34-year delay in question results from insufficient hydraulic lime production and the fact that those years coincided with the fall of the Ottoman Empire. 2.2 CEMENT INDUSTRY IN INDIA The history of the cement industry in India dates back to the 1889 when a Kolkata-based company started manufacturing cement from Argillaceous. But the industry started getting the organized shape in the early 1900s. In 1914, India Cement Company Ltd was established in Porbandar with a capacity of 10,000 tons and production of 1000 installed. The World War I gave the first initial thrust to the cement industry in India and the industry started growing at a fast rate in terms of production, manufacturing units, and installed capacity. This stage was referred to as the Nascent Stage of Indian Cement Company. In 1927, Concrete Association of India was set up to create public awareness on the utility of cement as well as to propagate cement consumption. The cement industry in India saw the price and distribution control system in the year 1956, established to ensure fair price model for consumers as well as manufacturers. Later in 1977, government authorized new manufacturing units (as well as existing units going for capacity enhancement) to put a higher price tag for their products. A couple of years later, government introduced a three-tier pricing system with different

pricing

on

cement

produced

in

high,

medium

and

low

cost

plants.

Cement Company, in any country, plays a major role in the growth of the nation. Cement industry in India was under full control and supervision of the government. However, it got relief at a large extent after the economic reform. But government interference, especially in the pricing, is still evident in India. In spite of being the second largest cement producer in the world, India falls in the list of lowest per capita consumption of cement with 125 kg. The reason behind this is the poor rural people who mostly live in mud huts and cannot afford to have the


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commodity. Despite the fact, the demand and supply of cement in India has grown up. In a fast developing economy like India, there is always large possibility of expansion of cement industry. The Indian cement industry is extremely energy intensive and is the third largest user of coal in the country. It is modern and uses latest technology, which is among the best in the world. Also, the industry has tremendous potential for development as limestone of excellent quality is found almost throughout the country. Current Scenario The Indian cement industry is the second largest producer of quality cement. Indian Cement Industry is engaged in the production of several varieties of cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc. They are produced strictly as per the Bureau of Indian Standards (BIS) specifications and their quality is comparable with the best in the world. The industry occupies an important place in the national economy because of its strong linkages to other sectors such as construction, transportation, coal and power. The cement industry is also one of the major contributors to the exchequer by way of indirect taxes. Facts Of Indian Cement Industry

The Industry recorded an exponential growth with the introduction of partial decontrol in 1982 culminating in total decontrol in 1989.

India ranks second in world cement producing countries.

It contributes to environmental cleanliness by consuming hazardous wastes like Fly Ash (around 30 Mn.t) from thermal power plants and the entire 8 Mn.t of slag produced by steel manufacturing units.

As a part of Corporate Social Responsibility (CSR), the cement Industry employs around 0.1 million people and takes care of the social needs not only of the employees but also adopts several villages around the factories providing free drinking water, electricity, medical and educational facilities.


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The cement Industry produces a variety of cement to suit a host of applications matching the world's best in quality.

Exports Cement/Clinker to around 30 countries across the globe and earns precious foreign exchange.

Statistics According to Ministry of Commerce & Industry data for November 2012,cement production registered a negative growth of (-) 0.2 per cent in November 2012 against its 17.0 per cent growth in November 2011. The cumulative growth of cement production was 6.7 per cent during April- November 2012-13 compared to its 4.8 per cent growth during the same period of 201112. Key Drivers Of Cement Industry

Buoyant real estate market

Increase in infrastructure spending

Various governmental programmes like National Rural Employment Guarantee

Low-cost housing in urban and rural areas under schemes like Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Indira Aawas Yojana

Technological advancements Modernization and technology up-gradation is a continous process for any growing industry and is equally true for the cement industry. At present, the quality of cement and building materials produced in India meets international standards and benchmarks and can compete in international markets. The productivity parameters are now nearing the theoretical bests and alternate means. Substantial technological improvements have been brought about and today, the industry can legitimately be proud of its state-of-the-art technology and processes incorporated in most of its cement plants. This technology up gradation is resulting in increased capacity, reduction in cost of production of cement.


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Major Players

Ultratech Cement

Century Cements

Madras Cements

ACC

Gujarat Ambuja Cement Limited

Grasim Industries

India Cements Limited

Jaiprakash Associates and

JK Cements.

Holcim

Foreign Direct Investment The cement sector has been gradually liberalized. 100 per cent FDI is permitted in the cement industry. 2.3 FUTURE OUTLOOK A recent report has been published by research company RNCOS titled 'Indian Cement Industry Forecast to 2012'.The report has found that, even in the tough conditions of economic turbulence, Indian cement industry sustained its growth rate. It further stated that, in the backdrop of the government backed construction projects almost every cement major expanded their installed capacity as, these projects have created strong demand for cement in the country. The report forecasted that the cement production is expected to increase above 9 per cent yearon-year during 2010-11 against the previous fiscal year. The research report has also anticipated that the industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a CAGR of around 12 per cent during 2011-12 to 2013-14 to reach 303 Million Metric Tons.


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CHAPTER 3 COMPANY PROFILE


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3 COMPANY PROFILE 3.1 HISTORY Cement is a necessary constituent of infrastructure development and a key raw material for the construction industry. As late as the 70’s, the State of Kerala was virtually starving for cement. The state lacked a Portland cement factory in either private or government Sector. In 1961-62, the Geological Survey of India located a limestone deposit in the Pandarethu valley of the Walayar region on the northern side of the Palakkad gap. Located in dense forest area, the hilly terrain was required heavy investment to mine. The State Govt. ventured to put up a Cement factory in the region. The feasibility study conducted revealed that the construction of a 1200 tpd dry process cement plant using the Pandarethu limestone is feasible. KSIDC obtained an Industrial License for the manufacture of cement in November 1976 and decided to go ahead with the project and formed “Malabar Cements Limited” to set up, own and operate the proposed cement plant. The Company was incorporated in April 1978. The plant was successfully commissioned in 1984 and the commercial cement production started on 1984. Malabar Cements Ltd., a fully owned Govt. of Kerala Undertaking, is synonymous with superior quality cements, vouched by customers spread across the state of Kerala. The launch of two Superior quality products under the brand name ‘Malabar Super’ and ‘Malabar Classic’, in the year 1994-95 gave a boost to the market presence. Various modifications carried out since 1995 have improved production and productivity of Malabar Cements. A 2.5 MW multi-fuel power plant was commissioned in June 1998 to complement 25% of the total power requirement for the Walayar plant operations. At Malabar Cements, product improvement is not just a onetime strategy for boosting sales, rather a quest of excellence. Perfecting the product quality is everybody's concern here. Our distinction begins with scientifically selecting the best raw materials for clinker. Stringent quality control is exercised right from pre-blending raw materials, clinkerisation, clinker grinding, and finally to cement packing. Now the company has three brands viz, "Malabar Super", "Malabar Classic" & "Malabar Aiswarya".


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Malabar Cements contributes to the developmental activities of the State by supplying the basic construction material. Only Malabar Cements can supply its cement, 'factory fresh', without any deterioration in the original strength either due to moisture or humidity, within 12 hrs anywhere in Kerala. With a production capacity of 4.2 lakh tons of cement per annum, the unit at Walayar is the largest. As part of expansion programmed, it has commissioned a 2.0 lakh tons clinker-grinding unit at Cherthala in Alappuzha district in August 2003. Thus the total installed capacity of MCL is 6.2 lakh tons. Malabar Cements is the first public sector company to receive ISO Certification & to win the National Award for best achievement in Energy Conservation. Till date, MCL has experienced no loss of production due to labour unrest. In just over 15 years of commissioning, Malabar Cements has been able to meet about 10% of total cement consumption in Kerala. Malabar Cement Limited is a glittering performer among the state public sector undertakings in Kerala. Malabar Cements also has the distinction of being the only grey cement manufacturer in Kerala. While the full fledged main plant is located at Walayar in Palakkad district, the cement grinding unit (CGU) is at Cherthala in Alappuzha district. MCL provides direct employment to nearly 1000 persons and to a corresponding number indirectly. The Limestone mine is located at Pandarathu hill inside the Walayar reserve forest. The limestone raised and crushed at the mine is bought to the Walayar plant through mono cable ropeway about 6km long, through the lush green dense forest. The cement produced by MCL, constitutes 10% of the Kerala requirement, is exclusively marketed within the state where by the company is passionately committed to the development of Kerala. MCL has been maintaining excellent operating parameters at par with global standards in almost all areas of operations and this fact is well accepted and valued by both the department related parliamentary standing committee on commerce(DRPSC), Government of India and Bureau of Indian standards(BIS). Keeping aside one or two year in which it had to inevitable suffer loss due to indispensible reasons beyond its control, MCL has been persistently and successively running on profits: the saga of success unique to MCL only. Every year MCL contributes several hundreds of crores of rupees to central and state exchequers by way of various statutory levies.


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In terms of capacity utilization, it is remarkable to note that MCL has been paramount among the Public Sector cement companies in the country. Further, its achieved capacity utilization has also been well above the industry national coverage. As part of CSR, MCL adopts and implements various social welfare activities unfailingly. One among several of such prominent activities is the adoption of the Nadupathy Girijan settlement at Walayar. As a responsible PSU committed to the cause of nature, MCL constantly endeavors to keep its environment unsoiled and pollution free. Its pollution control systems are regularly updated to contain the emission levels even well below the standards promulgated by the pollution control board from time to time. We are blessed with an astounding nature to live in and each and every one of us has the greatest inevitable responsibility of keeping the green around us Ever-Green. Though MCL has been planting honest efforts for quite sometimes to guarantee a clean and buoyant environment, to put supplementary stress on such a vital social obligation, this year, it has decided to emphasis more on the priority of caring the nature. 3.2 COMPANY POLICY OBJECTIVE

Manufacture and sell best quality cement at affordable price to general public of the state and to be an important part in the socio-economic development of the state. QUALITY P OLICY

Every employee of Malabar Cements Limited commits to comply with all requirements to continually improve the effectiveness of the Quality Management System and strives: To identify various groups of customers serviced by him To understand their respective needs and desires either stated or not stated To ensure best possible quality in products and services To meet and exceed their expectations


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Vision & Mission VISION

“To help in building a better habitable Kerala by providing best solutions in the field of constructions.” MISSION

“To provide quality products & services to the public through effective intervention in the market.” 3.3 GROWTH STORY Some of the major milestones…

Feasibility Study for a cement plant at Walayar. - 1975

Industrial License for the manufacture of Cement - 1976

Date of Incorporation of Malabar Cements - 1978

Commencement of mining activities - 1981

Commissioning of Walayar Plant - 1984

Commencement of clinker production - 1984

Commercial Cement Production started - 1984

43-grade OPC cement – ‘Malabar Super’ launched - 1994

New product: ‘Malabar Classic’ launched - 1994

Obtained ISO : 9002 certification, first PSU in Kerala to secure this certification 1996

Installation of 2.5 MW multi-fuel power gen. set - 1998

Introduction of ‘Malabar Aiswarya’ brand - 2003

Commissioned of 600 tpd cement grinding unit at Cherthala - 2003

Modernization of Cement Mill to close circuiting - 2005

Introduced ERP system for integrated operation of all functional areas. - 2007

Switched over to Quality Certification ISO : 9001 :2008 – 2010


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3.4 CERTIFICATIONS AND ACHIEVEMENTS ISO Certification

“IS/ISO 9002 : 1994” certification obtained in November 1996. First PSU to secure this certification.

Switched over to the revised standard ISO 9001 : 2000 in Aug’2003.

Switched over to Quality Certification ISO : 9001 :2008 in 2010

Awards Kerala State Pollution Control Board Award - 1990-91 Secured first State award for Energy conservation - 1992 VSSC Rolling Trophy for safety measures - 1994 & 1995 NCBM National Award for the Best improvisation in energy - 1998 Kerala State Energy Conservation Award - 1998 Govt. of Kerala awarded for outstanding achievement in Pollution abatement - 2007 Introduced ERP system for integrated operation of all functional areas. - 2007 Kerala Trade Award of Kerala Government – 2010 Significant Factors For Success Customer satisfaction Varied product range Permissible discounts Timely delivery of the production Organization structure is reviewed from time to time Strong brand image and awareness Prevention of price wars High product quality Information system power Large marketing resource budget


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3.5 PLANT & FACTORY DETAILS The Geological Survey of India had identified a cement grade limestone deposit in the Walayar reserve forest way back in 1961-62. The Mineral Exploration Corporation Limited confirmed its efficacy. Malabar Cements Ltd., fully controlled by the Government of Kerala, is the only Portland cement manufacturer in Kerala. The company was incorporated in April 1978 and commenced commercial production in 1984 with capital outlay of Rs. 680 million and paid up equity capital of Rs. 260 million. The 1200 TPD plant at Walayar has continuously registered profit year after year. The company has upgraded the plant with state-of-the-art technologies through the years. After the inception and in line with technological developments, company has carried out lot of modifications in the system for minimizing energy consumption, Pollution control measures, process modifications etc. Some of the salient features of the plants are listed below: Limestone reserve of about 10 million tons. Modern 110 TPH Closed Circuit Cement Mill. Strict Quality Control system to ensure quality of the product. Most modern Instrumentation & Control system for efficient process engineering. Modern dry process manufacturing technology with four-stage suspension pre heater system. Elaborate pollution control system to meet pollution control standards.


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3.6 ORGANIZATIONAL STRUCTURE

Figure 3.1 Organizational Structure Berchmans Institute of Management Studies

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3.7 PRODUCT RANGE Malabar Cements uses the state of the art, dry process technology for the manufacturing of super quality cement and the quality is much above the national standards. For Various applications, the company has three brands viz, "Malabar Super", "Malabar Aiswarya" & "Malabar Classic" Malabar Super A fabulous product in every sense: Super in strength, Wonderful in workability, Incredible in aging, Implausible in durability, and Fantastic in strength gain. An AMAZING performer! Tests carried out by Bureau of Indian Standards have established unshakeable credentials of Malabar Super. Super strength accelerates setting time and fine finish. Malabar super is superior in strength to ordinary '43' grade cement. It attains the 28 days' strength required as per IS in just 7 days time. Not only that, the strength attained in 28 days time is about 50 percent more than the IS specification. The amazing strength of Malabar Super arises from it's unequalled particle fineness, 33 percent more than the IS specification and consistency in composition, made so by computerized process control system Malabar Classic Superior in its class of cements, it offers better setting properties delayed initial set and early final set offering more working time and reduced observation time. Structures achieve excellent dimensional stability with the heat resistant properties of MALABAR CLASSIC. It also reduces heat generation during hydration, making it a better workable finished product absolutely reliable. The extra fineness welded into it allows MALABAR CLASSIC better coverage and finish in wall and roof plastering. This in turn reduces paint consumption. Malabar Aiswarya It brings prosperity in many ways. It increases the life of your structures by safeguarding against sulphate attack. Aiswarya offers high quality at reduced price. Aiswarya generates less heat of hydration, reduces the formation of getting cracks. This product is best studied for constructions in soil and water with excess alkali metals, sulphates, alumina, iron and acidic waters. To obtain the best quality cement, only glassy granulated slag is used for product manufacturing. With very low magnesium oxide content this provides shape stability for concrete structures.


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CHAPTER 4 DEPARTMENT ANALYSIS


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4.1 PURCHASE DEPARTMENT Objective: Ensure all items purchased are only from established sources meeting specification requirement

DEPARTMENT STRUCTURE

MaterialsManager

Assistant Manager Material

Plant Engineer Material

Assistant Purchase Officers

Senior Assistants Purchase

Assistant Purchase

Helpers Figure 4.1 Purchase Department Structure Documents Prepared REQUEST FOR QUOTATION(RFQ) PURCHASE ORDER


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Purchase Process Purchase requisition is made by the user department quoting their respective requirements with technical specifications. Request for quotation is prepared and placed by the purchase department before the ventors.

Items valued upto 1lakh enquires will be floated to the registered ventors.

Items valued above 1 lakh E-tendering will be opened.

For Original Equipment Manufacturer (OEM) even if value is above 1lakh purchase will be directly made from the OEM supplier.

After Receipt of quotation it is foreword to the technical department for scrutinizing. The same will be forwarded to user department for technical evaluation. After evaluation the file will be put up to tender committee for approval. After approval order will be placed. Art of Negotiation After quoting and selecting the vendor a discussion is made as to the order payment, price and freight charges. Supplier Rating Rating is done every six months on suppliers of critical item. The master list of approved suppliers is modified once in six months. Rating equations SR = 100(A+B+C) A = 0.45(QA+0.5QC)/QS B = 0.45(QS/QO) C = 0.0(IF NON ISO COMPANY) AND 0.1(IF ISO COMPANY) Where, SR = Supplier Rating in % ; QA = Quantity Accepted ; QS = Quantity Supplied QO = Quantity Ordered ; QC = Quantity Replaced/Rejected


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Order for purchase of material is placed by purchase department, store receives the material supplied (QS) and request the intender for inspection. The accepted material is taken in to stock (QA) and rejection is returned to supplier (QC) by store. The supplier rating is recorded in form 71. A supplier rated between 50% and 75% is advised to improve up on quantity and services. The supplier rated below 50% is removed from the list. Signing of purchase orders Purchase orders are signed by various authorities based on the amount. Below tabular column shows the criteria for it. Order value

Authorized Signatory

Less than Rs.50,000

Assistant Manager Materials

Above Rs. 50,000 and less than Rs.1,00,000

Manager Materials

Above Rs.1,00,000 and less than Rs.1,00,00,00

Deputy CE (Instrumentation)

Above Rs. 1,00,00,00

Managing Director Table 4.1 Criteria for signing Purchase Order

In the absence of the Manager Materials, Assistant Manager Materials is authorized to sign purchase orders upto Rs.1,00,000. In the absence of General Manager, Manager Materials is authorized to sign the orders amounting to Rs.1,00,00,000. Managing Director issues all Purchase orders above Rs.1,00,00,000 and purchase the work orders on specific projects in capital expenditure budget. Raw materials and its sources MATERIALS LIME STONE ADDITIVE LIME STONE LINKAGE COAL IMPORTED COAL LATERITE DRY FLY ASH GRANULATED SLAG CHEMICAL GYPSUM

SOURCE MCL MINES TAMILNADU SCCL, ANDHRA SOUTHAFRICA/ AUSTRALIA KCCP, KANNUR NLC, MTPS & TNPL VISLL, BHADRAVATHI & JSW, SALEM FACT, COCHIN

Table 4.2 Raw materials and its sources


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4.2 PRODUCTION DEPARTMENT Objectives Maximum production with high quality and quantity Production of clinker with quality To ensure high man power productivity To maintain good working environment in the factory To ensure safety and security to the employees DEPARTMENT STRUCTURE

MANAGING DIRECTOR

GENERAL MANAGER (WORKS) PLANT ENGINEER (CHEMICAL) SENIOR OFFICER (PRODUCTION) ASSISTANT ENGINEER (CHEMICAL) SHIFT OFFICERS

OPERATING STAFF

Figure 4.2 Production Department Structure


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PRODUCTION PROCESS MCL manufactures cement through the most modern dry process method based on worldrenowned German technology. The major raw materials for cement manufacture are limestone and laterite, which are natural minerals obtained within the state. These raw materials provide all necessary ingredients of cement like lime, silica, alumina and iron oxide. The entire manufacturing process is computer controlled from a central control room and stringent quality control measures are applied at all stages of production. We are in the process of installing X Ray Analyzer for better quality control. The state of the art pollution control measures like bag filters are also being installed. The process generally involves three stages of production. 1. RAW MEAL PRODUCTION The limestone obtained from captive mines is enriched with higher quality limestone procured from nearby states as and when required. The raw mix normally contains 95% limestone and 5% laterite. The raw materials are crushed to around 20-25 mm size and the proportioned raw materials are ground in a ball mill in dry condition to a very fine powder. The resultant product is called raw meal and is stored in concrete silos where it is pneumatically homogenized to get a uniform product. 2. CLINKER PRODUCTION Clinker is produced in a rotary kiln, which is a cylindrical steel shell of 65m length and diameter 4.2m, lined with refractory bricks. The kiln is inclined at 3% and set rotating at a speed of 2 – 2.2 rpm. It is provided with a 4-stage multi cyclone pre-heater system through which the homogenized raw meal is fed to the kiln inlet by means of belt bucket elevators. The Kiln is fired with pulverized coal and maintained at a temperature of about 14500C-15000C. In the pre-heater and kiln, the raw meal undergoes a series of physical as well as chemical changes giving rise to the cement minerals. The resultant product in nodular form obtained from the kiln is called clinker. Clinker is immediately quenched in the clinker cooler to stabilize its properties and stored in the clinker stockpile.


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3. CEMENT PRODUCTION Cement is produced by grinding clinker with 3-5% gypsum in a closed circuit ball mill to required fineness. Gypsum is added to control the setting properties of cement. Grinding clinker and gypsum produces ordinary Portland cement (OPC). Fly ash / Slag at required proportion is ground along with clinker and gypsum to produce Portland pozzolana cement (PPC) / Portland slag cement (PSC). The ground cement is stored in concrete silos and packed in 50 Kg bags using electronic packing machines. PRODUCTION FLOWCHART Tamilnad u lime Mining

Primary crushing

Secondary crushing

Lime stone yard

MCL lime stone Laterite

Raw material

Blending &

Cooling

Clinkerisation

Blending & storing

Filtering through bucket elevator

Raw meal

Gypsum

Clinker

Cement mill

Filtering through bucket elevator

Blending & storing

Packing& Dispatchin

Fly ash Figure 4.3 Production Process Berchmans Institute of Management Studies

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4.3 STORES DEPARTMENT Objective: - Ensure that spares and products are properly stored and maintained for user departments. In MCL store department is using SAP technology in making stock entries. Each item is coded in eight digit numbers and kept in different racks of same kinds. Racks and sections are given unique number for its easy identification. Functions Receipt of Goods Verify the number of cases/items in the cases received with the party’s delivery challans/packing list. Make entries in the computer for MIGO. Inform user departments regarding arrival of goods. Arrange inspection of goods and shift the accepted items to respective locations. Shift the rejected items to the specified locations with proper identification tags. Inform vendors regarding rejections through purchase. Preservation of Goods Ensure that accepted goods are properly stored. Keep the electronic items in a separate enclosure under lock and key custody. Issue of Goods Issue items to user departments against reservation Issue after verifying the reservations. Document Prepared Good Receipt Notes


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Determination of Stock Levels Average of five year consumption of the item is determined from that average consumption of 0ne year is found out and their after average one month consumption is taken. Safety stock = monthly consumption x 1.5 Reorder level= monthly consumption x 4 EOQ = monthly consumption x 6 Maximum level = safety stock + EOQ


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4.4 QUALITY CONTROL DEARTMENT Functions

Inspection and testing of incoming raw materials Inspection and testing of in progress materials Inspection and testing of final product Coordination with statutory agencies like BIS, Central Excise etc. Optimization of raw mix design and product quality Coordination of material handling activities Coordination with marketing department for attending customer requirements

Quality parameters of different materials MATERIALS

PARAMETERS

LIME STONE

Moisture, total carbonate, silica, aluminium oxide, iron oxide, calcium oxide(lime), magnesium oxide, loss on ignition

COAL

Moisture, ash, volatile matter & calorific value

LATERITE

Moisture & chemical composition

FLY ASH

Fineness, chemical & physical properties as per BIS requirement

GYPSUM

Moisture and purity

RAW MEAL

Total carbonate, Residue & chemical composition Litre weight, free lime, chemical composition

CLINKER CEMENT

Fineness, setting time, chemical composition and other physical composition as per BIS

Table 4.3 Quality Parameters


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Infrastructure Well equipped quality control lab to meet the requirement of BIS Equipment / Instruments 1. Electronic balance (.1 mg accuracy) 2. Electric muffle furnace (12000 C) 3. Electric oven (3500 C) 4. Flame photo meter 5. Spectro photometer 6. Bomb calorimeter 7. Compression testing machine 8. Vibrating machine 9. Auto clave etc ISO CERTIFICATION

“IS/ISO 9002: 1994” certification obtained in November 1996. First PSU to secure this certification.

Switched over to the revised standard ISO 9001: 2000 in Aug’2003.

Switched over to Quality Certification ISO: 9001:2008 in 2010.

5S HOUSE KEEPING PRACTICE IN MALABAR CEMENTS LIMITED The 5S concept in Malabar Cements was initially started since 2006. At the inception, they faced lot of difficulties to change the mindset of people as it is purely an attitude based activity. In fact 5S is a people oriented and practice oriented approach. First they established the confidence among a small group of employees in various departments to practice 5S by way of giving training and support through factory visits and interactive sessions with various agencies. The first mental constraint was that it cannot be adopted in a cement factory as there will be dust generation at several points in the plant. But, the fact was that Indian Cements had adopted the practice successfully and claimed that they could reduce environmental pollution and increase productivity to a great extent. In 2007, MCL started the real go in implementation of 5S in Ropeway section. The employees were divided into different teams and zones. The entire activities were monitored by a Steering Committee. With great enthusiastic effort the 5S programme was started there and finally then


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Managing Director at that time Sri.K.S. Sreenivas formally inaugurated the 5S implementation by unveiling a 5S emblem at Ropeway Unloading section. The effort was well established in the minds of all employees. The team members in mechanical workshop had then decided to practice 5S in their work area. After 6 months of team work the programme was successfully implemented in mechanical workshop also. The morale of each employee there had greately boosted hen they were appreciated by visitors and other external officials for the involvement in sustaining the practice. In 1st January 2008, the 5S activities were started in the general store. As part of Sorting, the scraps were segregated and disposed thereby getting revenue of about Rs.75 lakhs. The spares and accessories are stored in numbered racks. The location code are marked and entered in SAP system so that the item with in a fraction of seconds and minimize the time lost for searching. Now the entire sections of the company is practicing 5S concept of housekeeping thereby enhancing efficiency in operations.


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4.5 HUMAN RESOURCE DEPARTMENT Objective: Human Resource Department is engaged in recruiting right person for the right job so that they could contribute well towards the organization. There are totally 1050 employees working in Malabar Cements Limited. DEPARTMENT STRUCTURE

Managing Director

General Manager

Manager (P&A)

Medical Officer

Lady Medical Officer

Assistant Manager (P&A)

Welfare Officer (Mines)

Personnel Officer

Welfare Officer (Plant)

Staff

Assistant Administrative officer

Staff Staff

Staff

Figure 4.4 Human Resource Department Structure Berchmans Institute of Management Studies

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RECRUITMENT AND SELECTION PROCESS Identifying the vacancies Notification of vacancies •

Through news paper, website & employment exchange.

Receiving application Registration of applications (record maintaining) Screening of applications Conducting written test/interview •

Interview committee consist of Government nominee, subject expert and persons from HR department

Preparing minutes of recruitment proceeding Preparing the rank orders of applicants Sending appointment letter to selected candidate TRAINING Malabar Cements has allocated 50 lakhs for training in 2012-13 same amounts is reallocated for 2013-14. MCL spend huge amount to impart various training to employees internally and externally. Concern department will give instruction or inform the training department regarding the requirement of training on the job and off the job. Along with performance appraisal form every year requirement of training is incorporated with a view to identify the need based training. Presently training department headed by Deputy Manager P&A assisted by personnel office & supporting staffs. MCL nominates officers managerial & non managerial staffs in various institutes in India like.

CENTRE FOR WORKERS EDUCATION , CALICUT

PRODUCTIVITY COUNCIL, KALAMASSERY (for non managerial)

BEML, BANGLORE & MADRAS etc.


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In mean time they are also sending instructors to train on the job. Mean while MCL is extending helping hand to the trainees and apprentice govern under the various statutes. ADMINISTRATION The administration section takes care of the company’s administration. Functions Security Control The AAO oversees the security procedures followed at MCL. He also decided about the numbr of security to be appointed in the company. Vehicle Control and Maintenance The company owns a large number of vehicles especially Lorries bring coal and other materials required for the production. All these vehicles are being controlled by the AAO and he gives the instruction when the vehicles have to come in and go out. License & ID issue The AAO takes care of the license, which is provided for the Spirit, which is used in the laboratory, gun, which is provided to the securities, diesel tank, which is built for the production purpose and the explosives, which are used for blasting rocks in the mines. The AAO issues the ID cards to all the employees. Reception Control The reception connects all the incoming calls to various departments. Moreover it has to guide the visitors to the respective departments. LEGAL OFFICE The Legal Officer looks after all the legal activities of the company. If any case is filed against the company or if the company has to file a case against any person, it is the legal officer who looks into it. The legal officer approaches the lawyers and the lawyers appear before the court on behalf of the company. Berchmans Institute of Management Studies

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EMPLOYEE COUNSELLING Counseling is given to habitual absentees. There are two categories of absentees.

Habitual absentees

Absenting from duty to avoid hard work

Other (employees working with trade unions)

As on date no systematic counseling system prevailing in the company, counseling is done by personnel officer, industrial relation officer and Deputy General Manager as and when required. TRADE UNIONS MCL have four recognized trade unions INTUC (Indian National Trade Union Congress) CITU (Central Indian Trade Union) STU (State Trade Union) Every three years trade unions are recognized based on their membership and securing 50% of vote among the total employees and getting recognition from registration office. Trade unions work based on Trade union act of 1947. As per the act 7 person forming a group could make an union of their own. It is pertinent to note that the Industrial Relation in MCL is excellent. It has created a record of 25 years without man days lose on part of trade union strike. They put the whole hearted cooperation. LABOUR WELFARE

It can be undoubtedly stated that our company is providing numerous measures both statutory and non-statutory when compared to neighbouring industries as well as other Public Sector Undertakings in the State. Here is the List of welfare measures provided by the company.


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Canteen Full-fledged round the clock canteen facilities are provided in plant and mines for employees on duty. These provide food at subsidized rates. Medical Centre and Ambulance A full-fledged Medical Centre with two bed facility is situated in Township for the benefit of employees and their dependant family members and the treatment & medicine are provided free of cost. The services are rendered by two Medical Officers. Apart from Medical Centre one Ambulance each is provided at the Plant and mines for meeting emergency medical assistance of the employees. Compliments & Gifts Annual gifts are distributed among all employees in appreciation of their efforts in writing home good profit. During the last two years, 4 gm Gold Coin was issued to each employee as annual gift while a gold coin of 8gms was gifted to each of the employees retiring on superannuation. Employees completing 25 years of regular services in the company were given 10 gm Gold Coin. Gifts are also given away to employees annually in connection with Safety Day Celebrations. School / Festival Advance Interest free recoverable advances are paid to all employees in connection with Onam festival and school re-opening. In addition to this festival advances are also paid. Medical Reimbursement Medical Reimbursement to the tune of one month salary per year is provided to those employees who are not covered under the ESI Act. Welfare Fund A welfare fund constituted by the company lends a helping hand to needy employees at times of financial crises. The Governing committee consists of Management as well as elected representatives of the workmen.


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Apart from financial assistance for treatment of specified diseases, retirement benefit, death benefit etc., the fund is also linked with Group Medical Insurance through which members and their dependents can avail cashless facility/reimbursement for inpatient treatment. In the case of death, dependent benefit is also paid by the employer. The employee contribution = Rs.150 per month. The employer contribution = Rs.150 per month. If the employee is hospitalized and the expense is between Rs.5000 and Rs.50000 then the company will refund the amount. In the case of accidental death, Rs.65000 is given to the family as compensation to the family. Cement at Subsidy Rate Cement at subsidy rate is provided to employees who have completed 10 years of regular service, on request. On superannuation, employees are offered a cement agency subject to the rules and regulations applicable. Conveyance Conveyance facility on the Walayar – Palakkad route is provided for the employees for their to and fro journey to attend duty. Free conveyance is also provided to school/college going children of employees from township to Palakkad. Compassionate Employment Scheme This scheme provided employment in the company to the dependant of the employees die while in service. Accommodation Family and bachelor accommodation is provided for the company employees Employees Co-Operative Society An Employees Co-operative Society is functioning in Township with ample assistance from the company. The Society is providing provisions, stationary items etc. to the employees on credit, which will be deducted from their salary.


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Employees Recreation Club & Library A recreation club is working to boost the creative talents of employees and their children in the field of arts and sports. A full-fledged Library graded as ‘A’ by State Library Council is also functioning in the Township. Community Hall A community hall with a seating capacity of more than 300 is constructed in the Township. The community hall is used as Indoor Stadium also for games like Badminton, Table Tennis, Carroms etc. Provident Fund The employees of MCL are provided with the facility of Provident Fund. For Provident Fund, The employee contribution = 12% of salary (of the 12% towards PF, 8.33% goes to the employees pension scheme). SOCIAL WELFARE Every industrial establishment especially profit making Public Sector Undertakings have major role in the social upliftment of surrounding population and Malabar Cements Limited is fulfilling it in a unique way. Nadupathy Tribal Colony : The company has adopted the tribal school in the Nadupathy Colony for the total upliftment of the tribal community. CORPORATE SOCIAL RESPONSIBILITY 1.Streetlights Street light with electrical connection from the company line is provided through NH from Chandrapuram Check post to Township covering around 3 kms. 2.Special Block at Medical College A block was at Calicut Medical College was renovated by MCL in the year 2010 3.Afforestation in mines As part of our commitment to the mother earth we have implemented an Afforestation Programme in our Mines.


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EMPLOYEE STATE INSURANCE Employee State Insurance, shortly known as ESI, is a social security measure provided by the company to the employees. The ESI act was passed in 1948. An Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. All the employees who earn a salary less than Rs.15000 per month automatically come under the ESI scheme. For ESI, The employee contribution = 1.75% of salary. The employer contribution = 4.75% of salary. Employees who are under the ESI scheme are entitled for benefits like, Sickness benefit. Temporary disablement benefit. Permanent disablement benefit. Dependents benefit. Maternity benefit. Medical benefits to the family members. Funeral benefits. Obligations of ESI: The obligations of the Employer are: Registration of employees (Form 1) Recovery of ESI Contribution and remittance. Every 6 months, the return of contribution (form 6) should be submitted to the Employee State Insurance Corporation (ESIC). Submitting the accident report to the local officer (Form 16) Maintain register of employees (Form 7) Record maintained 1. Register of employees (Form 7): Insurance number. Name of insured person. Occupation. Berchmans Institute of Management Studies

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Department and shift, if any. If appointed during the contribution period, date of appointment. Number of days for which wages payable / paid. Total amount of wages payable / paid. Employees share of contribution Average daily wages Remarks 2. Accident Register Serial number. Date of notice. Time of notice. Insurance number. Name and address of the employee. Date of accident. Time of accident. Place of accident. How the accident occurred. What exactly the person doing at the time of accident? Name and address of the person who give the notice. Name and address of two witnesses Sign and address of the person who makes the entry in accident book. Remarks. 3. Return of Contribution GRIEVANCE HANDLING Grievances are general in every organization and need to be taken care of before it creates serious issues. Malabar Cements Limited addresses all sorts of grievances with good spirit. Being a Government company the management is taking all effort to address the pending issues in consultation with trade unions and obtain guidance from the statutory authority. The Managing Director of the company is directly engaged to hear the grievances of different parties during his visit to company.


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The disputes that are not settled amicably the statutory authorities under various acts are utilized or approached b trade union to settle the industrial disputes or grievances. Management and trade union are having the liberty to approach the statutory authority to settle their disputes. PERFORMANCE APPRAISAL Performance appraisal is a routine process in Malabar Cements and is carried out every three month after selection. Immediate superior is in charge to record the performance of the persons working under him. Point method is practiced and the report is submitted to the Personnel Department and the recorded facts are considered for confirmation of increment and promotion. Attendance is a major criterion in performance appraisal. WAGE AND SALARY ADMINISTRATION Employees of Malabar Cements are classified in to two major classes: Managerial Non-Managerial Managerial employees are paid by an agreement between Government and the Company. In the case of non-managerial personnel cement wage board fixes the pay packages. Pay packages are revised every five year. TIME OFFICE Malabar Cements Limited is a 24x7 working company mainly having three shifts and General shift. ‘A’ shift

- 6.00am-2pm

‘B’ shift

- 2.00pm-10pm

‘C’ shift

- 10.00pm-6am

General Shift – 8.30am – 5pm The time office records the in-coming and outgoing time of the employees. This is done by using a punch card. Each employee will be given a punch card where his code number will be typed. When he enters in, he must feed the card into the machine, which will record the accurate time.


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Time Office Structure DEPUTY GENERAL MANAGER (P&A) ASSISTANT MANAGER (P&A)

CHIEF TIME KEEPER

SENIOR TIME KEEPER

TIME KEEPERS PEONS Figure 4.5 Time Office Structure

Functions To maintain the employee’s attendance. To maintain the leave details. To record the incoming and outgoing time of the employees through gate pass. Leave Rules Casual Leave

7 days CL in a calendar year.

CL will not be sanctioned for more than 2 days at a time.

CL will not be combined with any paid leave.

Unveiled CL will not be carried foreward to next year.

Sick Leave

12 days in a calendar year.

Application for more than two days at a time shall be accompanied by a medical certificate.

Intervening holidays/weekly off will be counted as a sick leave, a SL can be accumulated up to 180 days.


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Earned Leave

Confirmed employees are eligible for earned leave at the rate of one day for every 20 days worked during the preceding year.

EL shall be accumulated up to 90 days.

Intervening holidays/weekly off will be counted as EL.

EL shall not be availed for more than 4 occasions in a year.

Application for earned leave shall be submitted 15 days in advance. CAREER PLANNING AND PROMOTION POLICIES The career planning and the promotion policies depend on certain rules and regulations of the organization. the employees of MCL Ltd are eligible for promotion once they complete a period of either 5 or 7 years in the organization and also in the particular department. At the time of internal promotion, qualification, experience and knowledge of the employees are taken into account. If the employee is eligible he is promoted or else company goes for external recruitment. Each position in the organization is well defined which included length of the service, education, seniority etc. The criteria for promotion for the managerial position depend on the seniority and the merit. Whenever there is a vacancy for the managerial position the employees existing post is evaluated based on the seniority and service record and then promotion interview is held and when the employee satisfies the criteria he is promoted. In case of non managerial position promotion tests are conducted and the employee who is eligible is promoted. The employees eligible for promotion are required to satisfy the basic criteria of marks. The total of 150 mark is awarded for every employee in which 50 marks is for the written test which normally test the knowledge of the employee in the particular section of the department and the remaining 100 mark is for the attitude of the person, service he rendered to the company, length of service, performance and attendance.


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INDUSTRIAL SAFETY & HEALTH ENVIRONMENTAL, HEALTH AND SAFETY (EHS) POLICY Shall continually improve the Environment, Health and Safety standards in our organization by integrating EHS objectives in our business process. MCL commit to: Take appropriate measures for: i.

Optimum utilization of energy and other resources

ii.

Preventing and Control of pollution

iii.

Reducing potential hazards and risks

iv.

Waste minimization /Disposal

Comply with applicable legal and other requirements Integrate EHS concerns into decision making to achieve sustainable development Ensure EHS compliance through total employee involvement at all levels Communicate to all employee and business associates our EHS policy and their individual obligations to achieve EHS objectives.

EHS Initiatives and objectives In order to meet our overall need for sustainable development of our EHS initiative draws the following objective continuation and expansion of activities such as production, distribution and trade along with -a still more stringent control of its environment impacts -Supplying markets products with improved performance -Achieving and sustaining: •

Zero accident

•

Zero occupational diseases

•

Zero non-recovered waste


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•

Integrate EHS approach for better global comprehension and efficiency.

Malabar Cements is always committed to sustain development of health and safety working environment complying with all statutory requirements. We undertake various programmes, methods and initiatives towards this by adopting proactive safety approach rather than reactive ones. The plant uses sophisticated pollution control devices in various parts such as raw mill, cement kiln, coolers and cement mill. In addition, the mining technologies that have been implemented are also based on environment safeguard norms. Periodical inspection and assessment of working conditions is considered as the key tool for identifying hazards and risk involved in each activity. We give utmost importance to enhance competency of human resources by providing adequate awareness, training with the help of an established Full-fledged Training & Development department. Company believes that safety is an integral part of all jobs and that can be achieved only through active participation and involvement of employees from all levels, from top to bottom. Promise workers participation in safety management by establishing Safety Apex Committee and departmental safety sub committees. These committees oversee the implementation of our OH & S policy. Company practices Japanese 5S concept of housekeeping to achieve excellence in maintaining clean and hygienic working conditions. Their keen attention is always to create a green & healthy environment. In its endeavor towards greenery, the company has initiated various types of afforestation, horticulture and tree planting programs. To comply with in the numerous standards and norms stipulated in various statutes of environment conservation, timely Modernization plans are prepared and implemented. Safety Guidelines All workers are bound to observe safety precautions as directed and notified from time to time and use safety equipment or clothing supplied by the company as may be required. Workman shall engage themselves only in operation at the machine and duties to which they have been posted. Removal of guards or safety devices on machines while they are running is expressly forbidden and shall amount to misconduct.


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Safety equipments are intended for use inside the factory premises and shall not be taken out. Reason for Accident Unsafe Act 88% Unsafe condition 10% Grace of God 2% Hazard Identification & Control Identifying Risk and Providing Control (mandatory requirement)

Risk = Probability x Severity

Providing training & awareness

Keeping Near Miss Near Hit Report

Controlling Systems Fire hydrant system Pull cord Ambient air quality control Green Belt etc., Vulnerable Places Mines Coal Yard Coal Mill Kiln General Store


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4.6 FINANCE DEPARTMENT DEPARTMENT STRUCTURE

Managing Director

General Manager

Finance Manager

Deputy finance Manager

Assistant Manager Finance

Deputy finance Manager

(costing & budgeting)

Assistant Accounts officer



(Salary)

Staff

Staff

Staff

Staff

Figure 4.6 Finance Department Structure Objectives Finance Department is considered as the backbone of any company. No doubt Malabar Cements Limited has a very dynamic finance department which records all the financial transactions in a systematic manner and carries the Company towards Success.


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Functions: Monthly accounting of invoices. Making correction in the price. Providing Discount. The major function of the finance department is to account all the transactions in a systematic manner. The bill of various departments such as production, marketing, administration, welfare is entered into goods received register by the stores person in the store. Then the bills are sent to the respective departments for payment. Once the bills received are proper in all respects, then the bills are entered into the system. The other cash payments made are to be approved by the proper authority. Once the approved bills come to the Accounts department, the vouchers are prepared and the cashier makes the payment. Authorized person from the respective department has to acknowledge for voucher payment. Cost Accounting The finance department has also an important section known as Cost Accounting. This function identifies the entire cost centre and calculates the cost associated with them. Since it is very important in the company’s decision making to analyze the cost structure, the cost accounting is considered as an important function. Through cost accounting, the company can find out the normal cost as well as excess costs and take appropriate corrective action to control and reduce the cost of production which in turn provides more cost benefit and profit to the company. The Malabar Cements Limited follows good cost accounting system. Cost structure: Material Transportation Power


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Fixed expense Salary Administration & Selling. Interest Cashier The cashier, who works in the finance department, performs the following functions Makes the daily cash transactions. Arranges all the direct payment of money as well as the receipt of money. Controls the liquid cash flow. Maintenance of registers. Capital Structure The company raises the capital by issuing shares only. There are 8 shareholders in the company. 7 having only one share and the 8th one is in the name of the Governor of Kerala. The company comes under the industrial department of the state and the Government of Kerala makes the issue of shares. Similarly the transfers of shares are also made by the Government of Kerala. Dividend is paid to the Government. Working Capital Working Capital is the fund used for to the day-to-day operations of the company. Working Capital = Current Asset – Current Liability. Presently 15 crore is allocated for working capital management. This is a part of profit. Apart from this they can acquire overdraft from bank but now they are not at all using the overdraft facility. Budget: The budgets are prepared based on past year budgets and the cost of raw materials. In MCL there are two types of budgets called revenue and capital budget. Capital budget is prepared yearly


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once by getting proposal from various departments and then getting approval from the board of director and then the capital budget I implemented. Bankers: The following mentioned below are the banks operated by MCL for transferring salary through bank transfer. State Bank of Travancore. State Bank of India Canara Bank. Syndicate Bank Indian Bank Union Bank of India HDFC. Palakkad District Co-Operative Bank. State Bank of Travancore and HDFC banks are used for doing payment by sending E-mail in the prescribed format given by respective banks. Dividend: Dividend is given based on the profit level. It is decided by the Board of Directors. Interim dividend is paid quarterly by the Board of Directors. The Board of Directors should represent the decision in Annual General Meeting lead by Government. Sources of Finance Sources of finance are profit and KVAT (Kerala Value Added Tax). The amount payable for KVAT is retained in the organization and it is payable after every five year without interest. The present money retained is Rs.50 crore.


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4.7 MARKETING DEPARTMENT MARKET The market territory of Malabar Cements Limited is confined to 14 districts of the state of Kerala. SALES ORGANIZATION Sales Department is headed by the Head of Sales Department, who is in charge of all functions related to sale of cement produced both at Walayar and Cherthala Grinding Unit (CGU) throughout the state as well as the neighbouring States. He is assisted by a team of officers both in the field and in the Office. MARKETING DEPARTMENT STRUCTUR MANAGING DIRECTOR

GENERAL MANAGER

MARKETING MANAGER

DEPUTY MANAGER

ASSISTAND SALES MNAGER

SALES OFFICERS

JUNIOR SALES OFFICERS Figure 4.7 Marketing Department Structure


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MARKETING PLAN Annual Marketing Plans for a given financial year is prepared prior to commencement of the financial year and is included as part of the Business Plan. Targeted sales for each type of cement and each type of packaging are estimated and included as a part of the plan. Subsequently, detailed targets for each district with break up of type of product and type of packaging is prepared prior to the commencement of each month. Specific responsibilities are assigned to the field officer for the sale of the monthly targeted quantities in respect of each district. Monthly reviews are made at the level of managing director to assess the target Vs. achievement and corrective actions are taken wherever required. PRODUCT Government has made it compulsory to manufacture cement according to the standards specified by the Bureau of Indian Standards. Malabar Cements produces three brands of cements. BIS specifies the minimum requirements. But Malabar cements limited is maintaining consistently much superior quality in its products to satisfy and exceed the customer expectation. Product Profile Ordinary Portland Cement-43 grade (OPC- MALABAR SUPER) Portland Pozzolana Cement (PPC – MALABAR CLASSIC) Portland Slag Cement (PSC – MALABAR AISWARYA) PRICING In the given market territory the market share of Malabar brand cement is in 8% only. The market is controlled by giant private sector companies such as Indian Cements (Sankar), ACC, Madras Cements (Ramco), Ultratec, Dalmia cements, Chettinad cements etc. of neighboring States. Malabar Cements Limited is therefore compelled to follow competitors pricing strategy.


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Method of Price Fixing The system of market intelligence followed in order to understand the price behavior of the competing brands by collecting the trading price of different brands at dealer/retail point directly by the field officer of the respective district on a regular basis. They submit reports on a weekly basis to the sales department. The above field reports are analysed by the head of the Sales department. There is a pricing committee consisting of the heads of sales, finance, production and materials and also chief engineer (instrumentation), to review the market situation and to fix the price. The convenor of the pricing committee is manager. Pricing Methods EX-FACTORY PRICE It is being fixed such a way to cater Palakkad and the peripheral markets such as Malappuram and Thrissur also. Billing is done at the factory freight from the factory to the destination and the arrangement of transport is by the buyer/stockists. Once the material has been loaded to the lorry, the sole responsibility of the material rest with the consignee/stockists FREE-ON-TRANSPORT PRICING In distant places where ex-factory price is not feasible, we offer FOT prices through company transport contractor. Billing is done at factory. Transport arrangement and freight is the responsibility of the company. The freight to the destination will be paid to the transporter on production of consignee receipt certificate received by him from the buy him from the buyer or stockists. Once the material has been loaded to the lorry at the factory the entire responsibility of delivering the material in good condition at destination within the territory of the consignee/stockists as specified by him to the transport contractor. EX-DEPOT PRICING (STOCK TRANSFER BY ROAD) This is followed when there is problem in rail movement. Stock is transferred to depot by road instead of rail. Billing is done at the depot office.


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Stock so reached at the depot will be billed directly from there without any handling expenses. In this system the freight to the concerned taluk will be reimbursed to the transporter on certification from the depot office. RAIL-HEAD PRICING Price fixed at the destination rail head. In this billing is done from the depot movement of cement by rail is mainly on endorsement basis. Cement is moved by rail is being endorsed in the name of the stockists against payment. For endorsement cases, clearing charges fixed by the pricing committee from time to time is being reimbursed. But all demurrage charges and incidental expenses if any has to be borne by the stockists. PHYSICAL DISTRIBUTION The market is divided primarily to three segments institutions/Government and direct customers and stockists. Institutions Cement is also being supplied to private as well as Government Institutions in bulk quantities at a rate fixed by the pricing committee in order to ensure bulk movement of cement. The rates for such supply will be decided based on the market conditions from time to time by the pricing committee. Government Bodies The requirement of cement for Government bodies also being met by the company against their orders. Direct Consumers the consumers who want cement directly from the company are also being catered to at a rate fixed by the pricing committee. Open Market The open market is serviced through a network of stockists in case of open market sale, the stockists place orders with payment and take delivery, either at the factory or at the railhead or at our depots.


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Open market sale is the major distribution channel. There is a network of stockists in all the districts of the state. However, Stockists are appointed based on the requirement of the company at appropriate outlets to ensure free availability of our cement to the extent possible throughout the state. SALES PROMOTION There is an annual budget for Sales Promotion for every year. The promotional aspects involves in the case of cement sales are build up of brand image among the current and potential customers largely by advertisement sales promotion and promotion of dealers for pushing higher volume. (almost all the dealers are dealing in multiple brands and their loyalty depends on the thrust being given to them in the promotional angle) The budget provision for advertisement dales promotion is through the advertising agency selected for a year. The agency is selected through tendering process. This would include both pricing media and visual media. The industry practice in respect of dealer promotion includes: Cash Discount : all major cement companies are offering cash discount to their dealer in the range of Rs.3.00 to Rs.7.00 per bag at present. Annual gold scheme : based on the quantity lifted monthly volume discounts including dispatch through wagon(wagon discount) Annual Incentives: certain companies credit their annual incentives to their security deposit account of the stocklist which can be utilized as and when they require for lifting cement. All major companies conduct Forien Trips for their best performing dealers. Offer Price Difference differences in bearish markets to protect the stock of their dealers. Mansons Meets, Engineers Meet And Dealer Meets At Railheads, they Operate Through C&F Agents so the dealer is under no pressure to lift a particular volume on a single day. He can lift cement directly from the rake as per his requirement. The company will shift the balance quantity to their warehouse through the C and F agents. This also ensures availability of the material on a daily basis.


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The Company Bears The Entire Clearing And Handling Expenses which may come to Rs.7/- per bag at present. The Company or the C&F Agents Pay the Demurrage/Wharf age Charges. MCL selectively choose a few among to the above schemes depending on the market situation. In addition to the above, special schemes also become necessary for liquidating the stock in the event of huge build up of clinker stock. This is also decided by the pricing committee. PACKAGING TYPES OF PACKING

BIS NO:

Poly propylene(PP) packaging

IS 11652:2000

Laminated Polypropylex(LP)

IS 11652:2000

Paper Packaging(P)

IS 11761:1997 Table 4.4 Packaging

PAYMENT TERMS Generally payment against delivery is being followed. Cheque facility against Bank Guarantee is at the sole discretion of the Managing Director. The industry practice is that they (competitors) offer credit facility to their dealers. In ex-factory sales, the payment by demand draft/cheque is collected at the sales office. The instrument will be entered into the party account through SAP system. In depots, the payments are received at the respective Sales office and the amount is creditied to the company’s Bank Account. The payment details will be entered into party accounts through SAP system. The fund also banked at the depot bank account will be transferred to the HO bank A/C on a weekly basis. Malabar cements limited is in the process of adopting RTGS system for payment collections on an experimental basis. In this system, the fund will be directly transferred from the party’s bank account to company’s account. By this, we are eliminating undue delay in depositing the instruments in the bank and transferring funds to head quarters at Walayar.


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MRKET SHARE ANALYSIS

MARKET SHARE OF MCL OTHERS 10%

MALABAR CEMENTS 10%

ACC 16% SHANKAR 20%

RAMCO 17%

ULTRA TECH 9%

CHETTINAD 11%

DALMIA 7%

Figure 4.8 Market Share Analysis

MAJOR COMPETITORS ACC Cements Ambuja Cements Bharathi cements Chetinad Cements Dalmia cements Jayajyothi cements Jindal Ramco Cements Ultratech Cements Bhavya


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4.8 SYSTEM DEPARTMENT Department Structure

MANAGING DIRECTOR

DEPUTY MANAGER (IT)

SYSTEM ENGINEER

PROGRAMMER

TECHNICIAN

STAFF Figure 4.9 System Department Structure

Type of Network Optical fiber, Twisted pair, WIFI, LAN, VAN Office automation facilities SAP ONLINE IS USED Number and Nature of Workstations Total of 250 computers Type of Servers IBM Servers • IBM Production (contain actual data) • IBM Development (contain training data) • IBM Domain (contain domain data)


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Security Systems Network antivirus servers, password protections Internet Connectivity / VSAT BSNL WIFI & Several Net setters Type of Operating Systems Used

WINDOWS 2000 WINDOWS XP WINDOWS 2007 WINDOWS 2008 WINDOWS VISTA

Number of Licensed Software Versions Kaspersky Anti Virus WINDOWS (every version) System Backup Facilities San storage facility of IBM is used and data’s are recoverable as and when required. Redundant power supply is available to ensure uninterrupted functioning.


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CHAPTER 5 SWOT ANALYSIS


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SWOT ANALYSIS OF MALABAR CEMENTS LIMITED

STRENGTH: It is having a good image and brand loyalty among customers. Service is good They have same price prevailing for wholesale at dealers/stockiest retailers end. Have a committed work force. Quality in every steps and a powerful quality assurance. WEAKNESS: The competitors are doing much promotional activities rather than Malabar Cements. Limited that is why it facing more problems in selling of product in the market. Lack of awareness program for consumers. Shortage of own Lime stone reserve. Shortage of manpower in many critical positions. OPPORTUNITY: Rapid growth is taking place in Kerala like building of apartments, bridges, roads etc. People are opting for more stable structures and intensive use of cement is taking place, even government is spending heavily on infrastructure projects. Thus this is the right time to fully tape these markets. As Indian core industry is also growing at rate of nearly 10% per annum it is having a good future. Foreign direct investment in infrastructure sector going to increase in coming years, which will increase the demand of cement. Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads.


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THREATS: Large number of players in cement industry makes it more competitive for MCL to carefully price its product and at the same time satisfy its dealers and customers. Players such as Ambuja Cement, Prism Cement and ACC are eating up considerable market share. Due to India’s exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war. The emergence of small players in this market may increase the competition and start the malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other benefits.


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CHAPTER 6 FINDINGS & SUGGESTIONS


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FINDINGS MCL has been an excellent Human Resource Department and there exists a good relation between the management and the employees. As part of welfare activities there are several committees formed for making a good working environment Implementation of SAP ERP has reduced the paper works to minimum. SAP also brought all departments under one umbrella. When it comes to social responsibility the company sponsers almost all the Governement programs and adopted certain tribal villages in the region and worked hardly for the development of them. In environment engineering, as the company deals with dry material only air pollution is happening in the region and MCL has implemented three electro static precipitator(ESP) and three bag filters for this purpose. Presence of rope way has reduced the transporting cost to minimum. The strategic location of the company has made possible to supply the material in a speedy way ISO certification has made possible for the company to come out with quality products The life of MCL mines will only last for another 15 to 20 years Over depends of external supply of limestone SUGGESTIONS AND RECOMMENDATIONS The company has to permanently keep one technical support staff for the maintenance of SAP system. The company should look out for other limestone resources and hence expand the production capacity, this can help the company to expand its market from 10%. Company should resort to extensive promotional programs for Malabar Aiswarya, especially in the coastal region. The company should try to supply its products in all parts of Kerala Company should see the critical positions are occupied by right persons in every time. proper human resource forecasting need to be made time to time.


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CHAPTER 7 CONCLUSION


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CONCLUSION The organization structure of the company is well organized and all the activities are assigned and delegated in an effective manner. The organization follows a good management principle and run by effective and qualified top management people and because of that the company has weathered from the rough times to become a more profitable and professional company. Work is done in correct time due to the organized structure and all the departments of the organization are functioning in an effective manner. Departments are coordinated in such a way that the information from each department is used for the smooth functioning of the organization. Management has made sure that all the best principles are put into place to make the company competitive in all business function. Sincere dedication and hard work from the Top Level Management, Middle Level Management, and Employees of Malabar Cements has made the company to emerge as one of the best run Public Enterprise in Kerala. I personally thank Malabar Cements Ltd for guiding me from time to time in successful completion of my Organizational study. I also thank each and every department staff for their help in providing me with valuable information required for this study.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

Kotler Philip & Keller Kelvin, Marketing Management, Pearson Education, India. K Aswathappa, Human Resource Management – Text & Cases Tata Mc Graw Hill. C R Kothari, Research Methodology, 3rd edition Aiswarya house Magazine, Malabar Cements Limited, Vol:21, Issue 1 www.malabarcements.com


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APPENDIX


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malabar cements project report

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