2. Case Study

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ONTENT

Page No.

Introduction 1

Manufacturing Unit 1 : Ghaziabad, Uttar Pradesh 2-8

Manufacturing Unit 2 : Sonipat, Haryana 9-16

Manufacturing Unit 3 : Chennai, Tamilnadu 17-20

Manufacturing Unit 4 : Mumbai, Maharashtra 21-25

Manufacturing Unit 5 : Hyderabad Andhra Pradesh 26-29

Manufacturing Unit 6 : Wazirpur, New Delhi 30-33

Manufacturing Unit 7 : Firozabad, Uttar Pradesh 34-38

Manufacturing Unit 8 : Ghaziabad, Uttar Pradesh 39-44

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Case study Report Productivity & Competitiveness of Utensils, Cutlery, and Glassware Sector

National Productivity Council Page 1

Diagnostic Case Studies

Introduction

A case study is one of several ways of doing research whether it is social science related or

even economic related. It is an intensive study of a single group, incident, community orsector. Rather than using samples and following a rigid protocol to examine limited number of

variables, case study methods involve an in-depth, longitudinal examination of a single

instance or event: a case. They provide a systematic way of looking at events, problems,

analyzing issues, and reporting the results.

This Report contains diagnostic case studies of the Utensils, Cutlery and Glassware

manufacturing units selected from different product categories across India. The aim of these

case studies is to understand the operation of units in this sector and figure out the factors

critical to boost productivity and competitiveness of the units. The case studies presented in

this report cover various aspects of the manufacturing units like unit profile, its background,

the products manufactured, infrastructure and manpower issues, quality related policies

SWOT analysis of the units, problems faced by the units and Government intervention

required.

Product Categories and the manufacturing units studied

S.No Product Category Manufacturing Units

1.Cutlery, Kitchenware, Bar Accessories,

TablewareGhaziabad, Uttar Pradesh

2. Stainless Steel Kitchen/Table/Bar Accessories Sonipat, Haryana

3.Cutlery, Kitchenware, Bar Accessories,

TablewareChennai, Tamilnadu

4.Utensils, cutlery, Kitchenware, Bar

Accessories, TablewareMumbai, Maharashtra

5. Utensils, Bar Accessories, Tableware Hyderabad, Andhra Pradesh

6. Stainless Steel Utensils Wazirpur, New Delhi

7. Glassware Firozabad, Uttar Pradesh

8. Glassware Ghaziabad, Uttar Pradesh

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Manufacturing Unit 1: Ghaziabad, Uttar Pradesh

Product category: Cutlery, Kitchenware, Bar Accessories, Tableware

About the Unit

This Manufacturing Unit is one of the most reputed companies engaged in the manufacture

and export of a wide range of stainless steel cutlery, kitchenware, bar accessories and

tableware in India. Established in the year 1977, the unit has succeeded in building an

enviable reputation in the international market and is known for strong customer-centric

approach and industry expertise. The business strategy of the firm is to keep delivery on time,

and keep cost and quality of the good as desired according to customers need. With over

thirty two years of experience, the unit’s emphasis is on continually upgrading its

manufacturing techniques and keeping abreast of the latest technology to further enhance the

quality of its products. The company participates in various fairs organized by different

industries group and associations. For example, the company does participate in EPCH Fair,

which is held twice in a year, and also participates in industrial fair in the UP Stall. These

fairs showcase products and give the firm a chance to publicize itself in foreign and as well as

in domestic market. The firm has the quality certificate of: ISO- 9001-2000.

Objective and Corporate Philosophy

Customer satisfaction is the core of corporate philosophy and providing esteemed customers

the best value for their money is the commitment of the unit. The large manufacturing and

storage facilities enable the firm to produce a wide range of world class stainless steel house

ware items which can be shipped out at a short notice. Due to the persistent efforts and

commitment to perfection, unit’s name has become a trust-worthy brand in the stainless steel

house ware sector.

Product Spectrum

Constantly striving to design and manufacture products that meet client’s taste and

requirements of the unit, products are a fine blend of quality and innovation. The unit offers a

comprehensive range of product that includes.

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• Cutlery: Spoons, forks, knives, table knives, steak knives, fish forks, fish knives,

cheese knives, coffee spoons, soup spoons, parfait spoons, syrup spoons, fruit

forks, dessert spins, dessert forks, dessert knives, baby spoons, etc.

• Kitchenware: Kitchen tools, spoon rest, ladle, skimmer, spaghetti server, salad

server, cake server, colanders etc.

• Bar Accessories: Cocktail shakers, wine coolers, tool set, trays, stirrer jigger, ice

buckets, ice tongs, ashtray. Etc.

• Tableware: Coaster, table trivets, salt and pepper shakers, paper napkin holders,

flower vase, serving tray, etc

An alluring range of all-occasion gift sets is another specialty of the unit.

Advantage of Infrastructure of the Unit

The company has a strong and comprehensive infrastructure comprising of state-of-art

technology and sophisticated machinery that makes each product a work of art. The modern

facility in the manufacturing Unit also boasts of an in-house Research and Development wing.

From rolling, cutting, polishing to finishing and packaging of the products, all activities are

undertaken in-house to ensure strict adherence to the unit’s own quality standards.

Empowered By Skilled Workforce

A pool of skillful and multi-tasking workforce that comprises of metallurgical experts,

production and service personnel, and designers who, over the years, have gained experience

in their respective fields is the main strength of the unit. The company is constantly engaged

in conceiving innovative and creative designs that makes the unit, a trend setter in its chosen

field of expertise.

A Penchant for Quality

The products of the unit confirm to the internationally prescribed standards of quality.

Commitment to quality remains a prerequisite for the firm’s own self evaluation and

motivation for progress. All products of the unit go through stringent checks, right from the

procurement of raw material from reputed vendors to the final stage of packaging and

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delivery. The unit’s own ‘check and test’ facility helps ship only flawless and world class

products.

Foot Print across the Globe

This has earned many accolades in its sphere of expertise by addressing the exact

requirements of rapidly growing world-wide clientele. Since the inception of the firm, the

firm has managed to outgrow the competition and capture the imagination of unit’s esteemed

clients across the Global Market.

Annual Turnover

The unit mainly deals in Cutlery, Kitchenware, Bar Accessories, and Table ware. The growth

of the unit has been impressive in the past few years, but declined due to relocation of the unit

from Delhi to Uttar Pradesh. The annual turnover for the last four years is given in the

following table:

Year Annual Turnover (in crore Rs.)

2005-2006 4.5

2006-2007 3

2007-2008 4

2008-2009 4.5

The unit manufactures customized products on demand for both foreign and domestic

markets. 80% of the unit’s output is consumed by domestic market only. The unit exports

mainly to USA, UK, and Turkey. Profitability in domestic market is higher as compared to

foreign market. The firm has no foreign collaborations. The firm has not undergone any

merger and acquisition. 5-star Hotels, restaurant encompasses majority of the domestic

market. The unit has been the leader for its products especially for hotel industry. Now a days

due to recession the unit has been facing low demand in terms of domestic and foreign

demand for its products.

Employment

The firm employs local labour. There is no such problem with labour. The firm has 20-22

total numbers of workers. The firm does not give any incentive to its workers. But do pay

extra wages for overtime of workers according to per hour wage rate plus dinner.

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Problems faced by the unit

Relocation of the unit

Manufacturing Unit was relocated from Delhi to Uttar Pradesh in 2006. Relocation slowed

down the growth of the unit. The cost of relocation (shifting cost + operations starting cost) put an extra burden on the unit and thus affected the growth of the unit negatively.

Raw Material and Cartelization

At present the per kg cost of steel is about Rs.80. The total cost of raw material as a share of

total cost of production is about 80%.The unit uses steel (patta) as a raw material for the final

product of the unit. One of the renowned company manufacture the steel rollers. The firm

encountered the problem of shortage of raw material as this steel rollers manufacturing unit

exported most of its steel products to China.

Further these rollers are then turned into steel (Patta) as the raw material for the unit. Recently

the factories which transform the steel rollers into steel (Patta), clubbed together and made

their group, exactly a cartel. Now the supply of steel (Patta) totally depends on the decision of

this group. In the recent past, they have shown spurious shortage of raw material and charged

higher prices for their output. Furthermore, the partial treatment of state government in taxes

like anti-tax on buying raw material from outside the state, stock transfer tax, etc. has been

increasing the prices of the raw material and thus cost of production. The future paths will be

impressive for the firm if Government provides help in setting up agency which will

continuously monitor the steel (patta) prices and by not levying the partial taxes on the raw

material.

Infrastructural Issues

The firm has no such problem in terms of power supply, transportation, road, etc. But the firm

faces problem in road transportation at border areas of state, where the quality of roads is in

deplorable condition. The firm requires space to expand its operations. Earlier the firm shifted

to Uttar Pradesh from Delhi due to space constraints. In the present financial recession

situation the firm has also been facing the problem of lack of enough funds to expand its

business operations.

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Technological Constraints and Competitiveness

The unit does not use automated technique to produce its final output. This restricts the firm’s

capacity in production. On the other hand the foreign countries having automated techniques

are able to fulfill the large order demand of the customer. Due to the problem of no

automation technique the firm cannot produce with coils. Chinese products have much better

quality as compared to the Indian firms because of lack of technological upgradation. But

recent steps taken by Delhi government have helped the industries in adopting the automated

techniques.

Low Margin

Low margins or profitability is a major cause of lesser number of firms in this industry. After

going through the different processes of manufacturing a lot of steel becomes scrap. And the

low price of this scrap increases the cost of raw material (steel) and thus shrinking

profitability.

Government Intervention Required

The unit is satisfied with the Foreign Market Policy of the Government. The products of the

unit come under the category of Duty Drawback (DPEB), therefore no export duty is levied.

The Unit seeks from the state government (Uttar Pradesh) not to levy partial taxation system.

The UP government has put anti-tax by putting tax on buying raw material from outside UP

area. Similarly, government has put stock transfer tax of 4%, according to which if a firm

wants to transfer its stock from UP to any other state then that firm has to pay 4% tax to

government. The unit wants relief from this kind of partial taxation system.

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SWOT ANALYSIS

STRENGTHS

• Well educated and experienced

management

• Strong R&D

• Good infrastructure

• Strong marketing network

• Well established brand in

international market

• Enhancing customer value with

innovation and design

• Delivering quality products to

customers

• Developing the best in class

organization

WEAKNESSES

• Price sensitiveness of the Indian

customer

• Environmental hazards

• The problem of making cartel of steel

(patta) producing factories

• Low/ limited capacity

• The prices of raw material are very

high

• Low scrap items prices.

• Discrimination by state government in

terms of taxes

OPPORTUNITIES

• Huge potential in domestic market

• Favorable central government polices

for SMEs

• Good consumer base in both

international and domestic market

• Increasing demand in international

market

• Align strategy for growth.

• Align and upgrade environment for

future

THREATS

• Fluctuation in dollar-rupee exchange

rate

• Stringent quality norms of EU

countries

• Cheap imports from china and other

Asian countries

• Cartelization of raw material producing

firms

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Conclusion

In the present globalization period if a country wants to compete in the foreign market then it

has to focus more to make its industry more efficient and competitive. This is what is needed

for the manufacturing Unit. The partial taxation at state level and cartelization of raw material

producer are hindering the growth as well as competitiveness of the unit. Therefore

government has to withdraw from such taxation system and make a monitoring agency to help

the firm and industry.

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Manufacturing Unit 2: Sonipat, Haryana


About the Unit

This manufacturing unit is 25 years old unit engaged in the production of premium stainless

steel kitchen/ table/ bar accessories. It is promoted by a family having experience of three

decades in the production of stainless steel products. Steel is a challenging material to play

with, to craft as per one’s creative needs. Its durability, shining and hygiene is not a new thing

for all of us. But due to its toughness, very few have succeeded in moulding this material to

their deep sense of creativity.

Right from its inception in 1984, the unit has been breathing, sensing, imagining and admiring

creativity and art of craftsmanship for stainless steel cutlery, kitchen tools and utensils. Three

quarters of unit’s total sale are attributable to international markets. The unit is, therefore,

fully aware of the fact that differences in eating habits do not always run parallel to a

countries border. The specialists monitor the changes taking place and often know from

previous experience in which direction these changes are heading. The deep rooted melody of

crafting cutlery and kitchen tool has given birth and a new meaning to the world of utensils.

The long standing experience has nurtured the unit’s new plant at Kundli for meeting the everrising demand of its domestic as well as global customers. Situated at Delhi- Haryana border,

manufacturing unit is well equipped with latest state of the art technology and knowhow. A

world ever getting smaller increases the market opportunities. A coordinated effort combining

people, location and time is the key to success. A separate and parallel R& D section is

assisting the different manufacturing processes. The products of the unit impart pure look and

originality in style. This high order of quality is achieved through stringent quality control at

every step.

Unit Profile

Total Factory Area 80,000 sq. ft.

Year of Establishment 1984

Management Executives 20

Research and development 5

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Sales and Marketing 8

Production Staff 700

Quality Control 20

Applicable Standard AISI/JIS

Quality standard ISO 9001-2000

Total Annual turn over Rs. 400 crores

Product Category

Unit offers creativity and art of craftsmanship for Stainless Steel Cutlery, Kitchen Tools and

Utensils. The Unit has formulated the established most comprehensive technological process

for the manufacturing of Kitchenware, Table Cutlery, Table top tools, Bar tools and

Handcrafted cutlery. These include:

• Regular Canister

• Cocktail Shaker

• 6 Pieces Kitchen Tools with Stand

• 5 Pieces Kitchen Tools with Square Caddy

• 6 Piece Tube Set

• Tea Spoon & Table Spoon

• Cake Fork & Table Fork

• Table Knife

• Oval Ring Kitchen Tool

• Spaghetti Server

• Basting Spoon Perforated, Slotted, Solid

• Masher & Sauce Ladle

Objective of the Unit

“To excel in the Global Market by having a competitive advantage over others”.

Organization Structure

The responsibility and authority of the unit personnels, who manage, perform and verify work

affecting quality is clearly defined with the organization structure with freedom and authority

in terms of the following:

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1. Execute all the action needed to discharge the authority and Responsibility in

performing there process and quality system.

2. To ensure that quality system is established, implemented and maintained in

accordance with the international standard.

3. To liaison with external parties on matters relating to quality system.

4. To identify and record any problems relating to the products process and quality

system.

5. To initiate, recommend or provide solution to designated channels.

Human Resource Management Policies

Participation of workers and inviting views of its customers have been a tradition for the unit.

Resultantly, low priced, functional products with modern designs have become a normal

phenomenon. Above all regular quality audit has had an added advantage on increasing the

working efficiency of the unit. An integrated team of designers, products developers and

purchasers are formed for discussing design, materials and suitable suppliers in achieving

specialization for each and every product of the unit. Radiantly, these fully awakened efforts

are breathing fresh oxygen into the lungs of its workmen. The unit has established strict

norms for health and safety of its workers by taking precautions on all health hazards factors.

Prohibition of child labour has always been given a top priority.

Business Strategy

The unit has been in process of shifting its distribution channel from Importer based network

to Agency based network. The unit has already set up its authorized agents in Italy, Israel,

Greece and many more are under their process of formation. This allows the products to reach

the market with a competitive price tag inspite of their good quality. The products are

regularly updated, modified and further improved to respond to customer’s needs and latest

design trend.

To meet the changing expectations of its customers and environmental policies of the

Government the unit is putting its consistent efforts for an all round development like:

• Cost reduction.

• Cost control fixation of new standards in production

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• Quality and innovative designs are evolving as a major concern for shaping a better day-

to-day life for a common man.

• Modern manufacturing facility giving a thrush of relief from polluted environment.

• Most competitive prices offered have already been set an example to be followed by

others.

Technological Manufacturing Process

The unit has formulated and established most comprehensive technological process for the

manufacturing of products.

A Good Management Practice

Press Working Technology

• The raw material is further processed into various sheet metal press, working

technological operations by means of precession press tools/sheet metal dies,

designated, developed and manufacture in tool room, leading to successful contribution

to achieve quality products during production stages.

In-Process – Production Quality Inspection

• During each stage of press working, the quality control engineers carry out vigilance

inspection of all products to ensure dimensional accuracy, free from any manufacturing

defects.

• Non-confirming products are RED-MARKED and kept in rejected material bins for

rejected storage areas.

• Only quality-inspected products are further allowed to process into subsequent

manufacturing operations with Inspection Tags.

Store-Handling

• Black production materials are sent to Store for storage and handling for further issue of

materials to polishing contractors under Store Requisition Form.

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Polishing/Satin Operations

• Quality control engineers carry out 100% vigilance inspection of polished materials with

regards to

1. External finished surface quality.

2. Material defects such as Dents, scratches, Marks, Unfinished polish areas,

Etc.

3. Fixation of – Bar codes/labels/Electrical Stamping/Stickers, etc.

4. Accessories-Any packing special material requirements.

Packing Carton Marking/Weight Marking

• Special care is taken by the packers to ensure that only quality approved materials are

packed in required packing cartons.

Weighing of Materials

• Each master cartons are marked with respect to:-

1. Net weight in kgs.

2. Gross weight in kgs.

Marking of Carton Nos.

• According to the packing list each master carton are marked by respective nos. to avoid

any short shipment of supply.

Transportation of Material – Forwarding Division

• Finally forwarding division transports the “packed cartons” as per packing list for “on-

ward” containerized loading to “Mumbai” port for final destination as per invoice

details.

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Labour Productivity

Year No. of EmployeesAnnual Turnover

(in Lakhs)

Turnover/Wor

ker (In Lakhs)

2003-04 50 134 2.68

2004-05 80 1321 16.51

2005-06 110 1916 17.42

2006-07 120 2820 23.50

2007-08 180 2987 16.59

Environmental Norms and Relocation

The patti-patta is manufactured through rolling process and in this process the pickling

process is also involved. This combined process is called as “Stainless Steel Pickling.” During

this process acid is evolved. This acid is neutralized by mixing alkali (caustic soda) in it. New

Delhi Pollution Control Committee, Department of Environment, Govt. of NCT of Delhi has

issued a notice saying, ”It is hereby directed that all such units, engaged in the activities

falling under prohibited/ negative list shall stop their activities and relocate themselves

outside Delhi on or before 6th

February 2010, without fail. Failure to do so will invite strong

regulatory action as per provision of Air (Prevention and control of Pollution) Act, 1981 and

Water (Prevention & Control of Pollution) Act, 1974”.If these manufacturing units which areengaged in the production of patti-patta are closed on the basis of above notice then not only

these units will be effected but those units which are engaged in the manufacturing of utensils,

cutlery and kitchen tools will also be closed down.

Although the pollution created by the pickling process is neutralized by mixing alkali in it, but

even then if the Government does not agree with it then the time period of minimum of two

years may be given to these units and the alternate site may be allotted to these units. If this

problem is not taken seriously, then the Indian market will be flooded with China made

utensils, cutlery and kitchen tools. Impact of this order is minimized in case of the unit as it is

not involved in production of patti-patta but unit purchase it from other manufacturers. If

these manufacturing units will be closed down then it can make impact on cost of patti-patta,

which will hit directly the profit of the unit.

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SWOT ANALYSIS

STRENGTHS


management

• Strong R&D



• Well established brand in international

market




customers


organization

WEAKNESS

• Negligence toward domestic market

• Power cuts

• Customer’s negligence toward brand


customer


OPPORTUNITY


• Favorable government polices for

SMEs

• Availability of cheap source of

financing


market

• Align strategy for growth


future

THREATS

• Fluctuation in dollar-rupee exchange

rate

• Stringent quality norms of EU countries

• Higher export duties on final products

• Higher import duties on raw material

• Cheap imports from China and other

Asian countries

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Although there exists various clusters of cutlery sector in India, but they are not given due

recognition and facilities. Government should strengthen its cluster development policy.

Some special attention needs to be provided to these clusters in order to ensure further growth

in these sectors.

Conclusion

The unit is among the leading manufactures & exporters of stainless steel cutlery, Kitchen

tools Barware, Utensils etc. and handcrafts of India, they always strive for the excellence in

style and function. It exports to more than 40 country across globe and also have strong

presence in Indian market. Unit’s major market include Germany, U.K., France, Italy,

Australia, Middle East, North America and Latin America. Unit’s experience of more than

two decades always aspire to meet the identical demands of the customer and have

endeavored to find a way by offering fancy and elite products to satisfy long standing

requirements of the customer. Unit has annual turnover of Rs. 400 crores and running

successfully in profit since inception. Unit has gained the global status in quality, profit,

customer satisfaction, widening of markets and export to China.

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Manufacturing Unit 3: Chennai, Tamil Nadu


About the Unit

This Manufacturing Unit is a 50 years old unit engaged in the production of premium stainless

steel kitchen/ table/ bar accessories.

Product Spectrum

Constantly striving to design and manufacture products that meet client’s taste and

requirements of the unit, products are a fine blend of quality and innovation. About 200

products are being manufactured by the unit. The unit offers a comprehensive range that

includes:

• Cutlery: Spoons, forks, knives, table knives, steak knives, fish forks, fish knives,

cheese knives, coffee spoons, soup spoons, parfait spoons, syrup spoons, fruit

forks, dessert spins, dessert forks, dessert knives, baby spoons, etc.

• Kitchenware: kitchen tools, spoon rest, ladle, skimmer, spaghetti server, salad

server, cake server, colanders etc.

• Bar Accessories: Cocktail shakers, wine coolers, tool set, trays, stirrer jigger, ice

buckets, ice tongs, ashtray. etc.• Tableware: Coaster, table trivets, salt and pepper shakers, paper napkin holders,

flower vase, serving tray, etc


“To excel in the Global Market by having a competitive advantage over others”.

Human Resource Management Policies

There are about 280 employees working in the factory. Out of the total 280 employees, 200

are permanent and about 80 are on contract basis. The wages paid to the workers are as per

norms of the factory act. The wages have gone up by 1.5 times in the past five years. There is

no category of skilled labour in the factory.

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SWOT ANALYSIS

STRENGTHS


management• Strong R&D




market.




customers


organization.

• Availability of electricity is sufficient.

WEAKNESSES


customer• Low/ limited capacity

• The prices of raw material are very

high

• Low scrap items prices.

• Discrimination by state government

in terms of introducing the Anti

Dumping Duty.

• Wastage is on a very higher side.

• The wastage cost is very low

OPPORTUNITIES



except the Anti Dumping Duty




market



future

THREATS

• Fluctuation in dollar-rupee

exchange rate

• Stringent quality norms of EU

countries


Asian countries

• Monopoly for the supply of raw

material

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Findings

The firm has the automated technique, which provides quality products to the firm.

The sufficient space is available for the working.

The cartelization of important raw material producers.

No Monitoring agency for the steel prices.

Intense competition in terms of quality from other countries, especially from China.

No extra taxation system at the state level except Anti Dumping Duty.

Transportation facilities provided are sufficient and cheaper

The power supply is sufficient.

Conclusion

The introduction of Anti Dumping Duty by the state government has resulted in increasing the

cost of production and thereby creating a problem for the competition in the local as well as in

the international market especially with China made products. Therefore government has to

withdraw such taxation system and make a monitoring agency to help the firm and industry.

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Manufacturing Unit 4: Mumbai, Maharashtra

Product category: Utensils, Cutlery Kitchenware, Bar Accessories,

Tableware

About the Unit

The unit is a manufacturer and exporter of a number of stainless steel products of flatware and

hollow ware for institutions, households, gifts, sales promotion users and restaurant supplies

like bars, desserts, table, bathroom accessories and gift wares.

Unit profile

Total Factory Area 30,000 sq. ft.

Year of Establishment 1994 Number of employees 331

Total Annual turnover Rs. 40 crores

Manufacturing facilities at the Unit

The unit owns one of the finest manufacturing facilities and state-of-the-art machinery to meet

the escalating demands of the competition. The factory covers approx. 30,000 sq.ft. area.

Some of the manufacturing facilities comprise of the following:

OperationNo of

Machines

Blanking (30 –150T) 6

Shearing (3mm x 1m) 3

Deburring Vibrator 3

Embossing 12

Deep Drawing (50T – 150T) 12

Rolling / Spinning Lathe 25

Stamping 6

Spot Welding 9

Pulse TIG Welding 4

Electric Arc Welding 2

Chemical Etching 3

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Plastic Coating Plant 1

Lacquering Plant 1

Shaping, Milling, Surface, Drilling etc. 11

Besides this, the unit has separate in house tool manufacturing section comprising of CNC

WIRE EDM cutting and supporting machines with 23 skilled tool makers.

Experience of the Unit

With the experience of seven generations in this business of Sheet Metal Forming and the

present infrastructure of over 700 products, 2000 tools and in house quality control

department, the unit is maintaining Uniform Superior Quality and timely shipment for bulk

quantities and are confident to satisfy the customers’ need. The entire process is executed

under expert supervision of trained supervisors.

Foot Prints across the Globe

The high quality products are in demand all over the world and are manufactured by the unit.

99% of the products are being exported to different countries. The unit supplies to more than

185 customers in 45 countries like USA, UK, West European, East European, Australia, Far

East, South Africa, CIS countries and others with a customer retention ratio of 95% and

growth rate of 40-45% every year.

Quality Policy

The unit believes that quality is a combination of stringent and disciplined evaluation. It is a

decisive factor in the success of a unit and its products. The unit believes that a satisfied

client is the first step towards repetitive orders. To match with the expectations of their clients

and ensure only the best reaches their customers, the unit constantly upgrades the quality

checks. The unit has underlined the following 3-Point Quality check process.

1. Inward Raw Material Inspection

Inward raw material inspection constitutes the first phase of the quality check. Every

raw material entering the production premise is checked for its quality. The raw

materials are only added to the raw stock after the quality check professionals are

convinced of its quality.

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2. Online Inspection

Online Inspection forms the second phase of the quality check program. The engineers

keep a vigilant check on every stage of the production process. This online monitoring

of the production process helps unit control the quality at vital junctures, ensuring

right actions at the right time for best results.

3. Pre-packaging Inspection

Pre-packaging Inspection forms the final phase of the quality inspection process. In

this stage each and every product is personally checked for any physical irregularity in

the shape, size, finish and a host of other criteria’s specially laid down to ensure only

the best products reach the clients.

Further, the unit’s management is currently undergoing extensive learning to

implement “KAIZEN” and “SIX SIGMA” process improvement techniques for better

management of the resources and profitability.

Anti Dumping Duty

The basic raw material used for the manufacturing of utensils, cutlery and kitchen tools is flat

stainless steel. Industries located in Maharashtra buy it from Jodhpur, Ahmedabad and Delhi.

On the raw material (flat stainless steel) “Anti Dumping Duty” has been imposed by the

Maharashtra Government.

At present the China Made kitchen products have flooded Indian markets as well as the

World markets and it has become very difficult to compete with the China Made products in

the local as well as in the international markets due to the imposition of this Anti Dumping

Duty by the Maharashtra government. It was also pointed out that the non sticky utensils are

available in the market which has no brand. These non sticky utensils are so cheap in themarket that the Indian Manufacturers cannot compete with it. These are approximately 30%

cheaper than the Indian products.

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SWOT ANALYSIS

STRENGTHS


management• Strong R&D




market



• Delivering quality products to customers

• Minimum wastage/scrap.

WEAKNESSES

• Price sensitiveness of the Indian customer

• The prices of raw material are very high

• Low prices of scrap items

• Discrimination by state government in

terms of introducing the Anti Dumping

Duty.

OPPORTUNITIES



except the Anti Dumping Duty




market


future

THREATS

• Fluctuation in dollar-rupee exchange rate

• Stringent quality norms of EU countries


Asian countries

• Monopoly of the suppliers of raw material

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Findings

The firm has been using automated technique and processes, which manufactures

quality products to the market.

The sufficient space is available for the working.

No Monitoring agency for the steel prices.

Intense competition in terms of quality from other countries, especially from China.

No extra taxation system at the state level except Anti Dumping Duty.

Transportation facilities provided are sufficient and cheaper

The power supply is sufficient

Conclusion

The introduction of Anti Dumping Duty by the state (Maharashtra) government increases the

cost of production and thereby degrading the competitiveness in the local as well as in the

international market especially with China made products. Therefore. government should

withdraw such taxation system and make a monitoring agency to help the unit and industry.

In the state of Maharashtra the government is helping and providing sufficient facilities to

every industry and industries engaged in the manufacturing of utensils, cutlery and kitchen

tool is also one of them. The industry engaged in the production of utensils, cutlery andkitchen tools are quite satisfied with the supply of electricity.

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Productivity staff 30

Quality control staff Nil

Quality standard Nil

Total annual turnover 75 lacs

Human Resource Management (Management, Employees, Incentives system etc.)

At present the number of employees working in the firm is 41. The monthly pay of these

workers ranges from Rs 4000 to Rs.10000 per month according to the work assigned. The

wages paid to the workers are as per norms of the Factory Act. The wages have gone up by

1.5 times in the past five years. The raw hand labor is picked up, work is assigned to the

person and after acquiring the requisite skills, the labour is called the skilled labour. There are

no as such targets for any worker for the completion of job either on a daily basis or on a

monthly basis. The unit employs a special incentive scheme for outstanding workers in the

form of extra pay of one month. The firm has given a top priority for prohibition of child

labour.

Business Strategy & Productivity

The firm aspires to grow using its own resources and thus reinvests the profit generated in the

firm. To meet the market competition and production the unit is making efforts on the

following grounds

1. Maintaining Cost competitiveness

2. Providing good quality products

Plant & Machinery

The three machines naming Rolling Mill, Press and Spinner machines are deployed for

manufacturing aluminum utensils. The unit has not upgraded its machinery since long. The

unit is of the opinion that its work is going on smoothly with the old machines and thus there

is no need to make investments in upgrading and buying new machines

Waste Minimization: A Good Practice

The volume of production by the factory is between 10 tonnes to 15 tonnes per month. The

unit doesn’t follow any fixed targets for the production. The raw material is easily available

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Products

Unit offers creativity and art of craftsmanship for the raw material for the manufacturing of

stainless Steel Cutlery, Kitchen Tools and Utensils.

Human Resource Management (Management, Employees, Incentives system etc.)

At present there are 60 employees working in the factory. The wages paid to the workers are

as per norms of the factory act. The wages have gone up by 1.5 times in the past five years.

There is no category of skilled labors in the factory. The raw hand labour is picked up, work

is assigned to him and after learning the specified job the labour is called a skilled labour.

There is no target fixed for any worker for the completion of job either on daily basis or on

monthly basis. The routine work is being done by every worker. There is no special incentive

provision for any worker except on the occasion of Holi/ Diwali a bonus is provided,

equivalent to one month’s extra pay.

Production and Turnover

The production of patti- patta is 9-10 tonnes daily. There is no such target fixed for the

production. The raw material is available easily and it is purchased from one of the leading

steel manufacturing industry. The total cost of production on patti-patta comes out to be Rs.

18/- per kg excluding the cost of the raw material and the cost of patti-patta is Rs. 40/- per kg.

while its cost was RS. 55/- in October 2008.

Problem faced by the unit

Environmental Regulation

The patti-patta is manufactured through rolling process and in this process the pickling

process is also involved. This combined process is called as “Stainless Steel Pickling.” During

this process acid is evolved. This acid is neutralized by mixing alkali (caustic soda) in it. Now

DELHI POLLUTION CONTROL COMMITTEE, Department of Environment, Govt. of

NCT of Delhi has issued a notice saying, “It is hereby directed that all such units, engaged in

the activities falling under prohibited/ negative list shall stop their activities and relocate

themselves outside Delhi on or before 6th

February 2010, without fail. Failure to do so will

invite strong regulatory action as per provision of Air (Prevention and control of Pollution)

Act, 1981 and Water (Prevention& Control of Pollution) Act, 1974”. If these manufacturing

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units which are engaged in the production of patti-patta are closed then not only these units

which are in the production of patti-patta will be affected but those units which are engaged in

the manufacturing of stainless steel utensils, cutlery and kitchen tools will also be effected.

Although the pollution created by the PICKLING process is neutralized by mixing alkali in it,

but even then if the Government does not agree with it then the time period of minimum of

two years may be given to these units and the alternate site may be allotted to the units. If this

problem is not taken seriously, then the Indian market will be flooded with China made

utensils, cutlery and kitchen tools as Indian products would be taken out of the market..

SWOT ANALYSIS

STRENGTHS


management


• Not so strong marketing network


innovation


customers


organization

WEAKNESSES

• Negligence toward domestic market

• Power cuts

• Customer’s negligence toward brand

Price sensitiveness of the Indian

customer


• Weak R&D

OPPORTUNITIES


• Availability of cheap source of

financing

• Increasing demand in local market



future

THREATS

• There is a threat of DELHI

POLLUTION CONTROL

COMMITTEE notice for the shifting of

the industry within a limited time period

and without allotting any space for the

industry.

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Conclusion

Although the unit is a leading firm for the manufacturing of raw material for stainless steel

utensils, cutlery and kitchen tools which is known as patta-patti (re-rolled steel), but there is

no skilled labor used by the firm for any operation used for the manufacturing of patta-patti.

Some of the processes involved for this production are highly technical like press work where

weight and thickness of the patta-patti sheet is controlled. In this process also the firm is

taking work from the unskilled labor.

In the last 23 years the production of the firm has been increased about 10 times and like wise

the production of the stainless steel utensils, cutlery and kitchen tools has increased about 10

times. The production wing is quite strong of the firm, but sale wing is quite poor from the

administrative angle. There is no R&D wing in the unit on the marketing side.

Due to notice issued by DELHI POLLUTION CONTROL COMMITTEE, Department of

Environment, Govt. of NCT of Delhi there is a threat to these manufacturing units which are

engaged in the production of patti-patta and may be closed on the basis of above notice. If this

happens, then not only these units which are in the production of patti-patta (re-rolled steel)

will be affected but those units which are engaged in the manufacturing of stainless steel

utensils, cutlery and kitchen tools will also be affected.

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Manufacturing Unit 7: Firozabad, Uttar Pradesh

Product category: Glassware

About the Unit

The unit has been engaged in the manufacture of Doubled Walled Glass Refills (Glass Liners)

for Vaccum Flasks since its inception in 1946. Manufacturing Unit 6is today the largest

Manufacturer-Exporter of Glass Refills from India with a share of about 75% of India's export

of this product. Under the leadership of its owners, who have long experience of over 4

decades in different spheres of glass production and under their management the unit thrives

to be a forward looking and a market driven unit. Other interventions of the unit involves

glass production for lighting industry and Table Ware, bangles, lead tube, bulb shells, soda

lime tube and glass ware. The manufacturing plant is spread over 25000 sq. meters of land at

Firozabad about 250 Kms away from New Delhi, India's capital and 40 Kms from Agra, City

Of Taj. The plant has state-of-art glass refill production facilities including Tank Furnace,

Silvering and also vaccuming facilities. The unit uses the original German 'Einedrucker

Technology' which has been further refined over years of producing the glass refills consistent

with continuously upgraded international standards.

Unit Profile

Total Factory Area 25000 sq. meters

Year of Establishment 1946

Management Executives 40

Productivity Staff 260

Quality standard ISO 9001-2000

Total Annual turn over Rs.12 crore


“Assurance to provide the best quality product”

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Power Shortage

Infrastructure is not a problem for the firm, i.e., it is moreover satisfied with the infrastructure

arrangements around the unit. But firm does face problem of electricity shortage.

Impact of Government Policies

1) Foreign sector: The firm has been a major exporter in this sector and has been an

important forex earner for the country, but due to the global slowdown, the firm is

facing a shortage in demand and thus shifting to domestic market to keep its growth

intact. The firm complains of higher export taxes, inspection fees and most

importantly procedural delays for hindering the exports. The firm demands ease of

procedures for exporting the items, especially in these gloomy times if we have to stay

competitive in the international markets.

2) Taxation: The firm is of the opinion that excise duties should be reformulated on the

basis of compound taxation and there should be any limits as is the case now.

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SWOT ANALYSIS

STRENGTHS

• Reputation and goodwill in the market





customers


organization

• No foreign competition in domestic

market

• Huge market share of firm

WEAKNESS

• Continuous Power cuts


customer

• High price of soda ash as

compared to other competing

countries

• Fall in demand due to global

slowdown

OPPORTUNITY

• Huge potential in the domestic market


future

• Creating a bigger brand image may

help

THREATS

• Tough competition from China in

the international market

• High cost of production as

compared to competing countries

like China

• Acute shortage of natural gas, the

main fuel for the furnace

• Low labor productivity

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Manufacturing Unit 8: Ghaziabad, Uttar Pradesh

Product Category: Glassware

About the Unit

The unit was setup in 1974, at Uttar Pradesh and commenced manufacturing of glass

containers in June 1976. The Unit manufactures Glass bottles and Jars of various sizes for

liquor, soft drinks, food products and pharmaceuticals. In 1982 the unit underwent merger

with another bigger unit and became a subsidiary unit under that. The annual turnover of the

unit is around 100 crore. The unit is a medium scale enterprise with an annual turnover of

around 100 crores.


“Consistently deliver enhanced value to its customer.”

Sales and Production

More than 50% of the production of the unit is consumed for distilleries. Remaining about

50% is used for soft drink (Pepsi, Coke, etc.), Food Products and Pharmaceuticals. The unit

produces all kinds of bottles and items made by glass both for domestic and foreign market.

But unit produces mainly to meet the demand of domestic consumers and a small part goes to

satisfy the demand of foreign customers. The unit produces 7-8 lakh bottles per day;

depending on the demand and order size. The demand for the product that firm produce do

vary with season. The sale and production of bottles increases by 20% in summer and rainy

seasons. The unit mainly caters to corporate customers. Hindustan Sunglasses, Hindustan

Sanitary ware, AGI, Somani, Gujarat Glass, etc. are other big players in the Glassware

market. The consolidation process in the past reduces the number of firms for the glassware in

the industry.

The unit has no collaboration either with domestic or foreign entity. But takes technical help

from outside for the designing purposes. Presently the unit is growing at good pace and has

nearly a market share of 5% in the glassware industry. FDI was allowed in the glassware

industry but Indian market situations did not suit the foreign players.

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Currently the core business of the firm is production of bottles mainly for corporate

customers. To expand, the glassware industry requires huge investment. The unit has not been

able to raise the required finance for the unit. This affects the productivity and

competitiveness of the unit in the present scenario, but still the unit has managed to withstand

the peer pressure with good market share in the glassware industry.

Technological Capability

The unit has two natural gas fire furnaces. There are five fully automatic I.S. Glass forming

machines capable of manufacturing bottles and jars with the capacities ranging from 100ml to

1400ml. This division has installed micro process based computerized batch house. It has an

automatic weighing and feeding systems to ensure quality glass.

The in-house power generating capacity is sufficient to operate the plant in case the power

supply from State Electricity Board fails.

This unit receives continuous supply of natural gas from the Gas Authority of India Limited

(GAIL).

Supply Chain Inefficiency- A bottleneck

The main inputs for the final products of the unit are: Silica, Lime-Soda, and Natural Gas.

These inputs are mainly brought from other areas to the location of the unit, like silica is

brought from Rajasthan and Allahabad and Soda bring from Gujarat, Soda-Ash is imported

from Kenya. Silica is the main input for the final product of industry, and it is used near about

80 tonnes per day and 35000 tonnes annually. Silica shares about 5% of total cost and Soda

part nearly 25% of total cost. Natural gas is mainly used for the burning purpose. All kinds of

raw material cost near about 35% of total cost. The uploading of major input (Soda-Ash) for

the unit from Kenya to the Nevashera port located in Gujarat, takes 15-30 days delay which is

a major hindrance in supply chain. This problem leads to affect the cost of producing the final

output in the firm. If this problem is solved then it leads to improve the productivity and

efficiency of the firm to a large extent.

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Infrastructural Issues

Infrastructure has not been a major problem for the firm. But firm has to manage with some

lacuna in terms of transportation costs and water availability. The unit has to arrange drinking

water from outside. The transportation costs are a major part of total cost. These

transportation cost is borne by firm while bringing various inputs like soda-ash, silica, etc

from other areas to factory location. The firm faces some problem at port while importing its

important inputs.

Stringent Labour Laws

Stringent Labour laws causes problem for the firm. The labour availability has not been a

problem with the unit rather it is the labour laws regarding the permanency of labour, which

are affecting the unit. The unit used to employ all categories of labour viz. skilled, unskilled,workers, etc. The firm also employs contractual labour. These contractual labours are

employed based on the work allocation criterion. Contractual workers comprise of about 25-

30% of total labour force in the firm.

To improve the efficiency of the manufacturing unit follows the following rule:

Total Wages= Fixed Wages + Incentives.

So firm pays fixed wage upto some threshold level of output produce by the labour and pays

some incentives if output exceed that threshold level. So workers total salary depends on

output produce by him. This incentive system leads to improvement in output level of the

firm.


1. Infrastructure: The erratic power cuts are a major problem in the smooth production.

This is a major concern of the unit as it requires continuous power supply.

2. Labour Reforms: Although labour is available to firm, it is the permanency of labour

according to old labour laws which are affecting the working of the unit. Thus, the

firm is looking forward for labour reforms on the part of Government. To minimize

the labour problems, the unit uses the contractual labour which solves this problem

only to a limited extent. Thus to make the unit efficient and competitive the labour

reforms should be made flexible.

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3. Foreign sector: The firm is dependent for its key inputs on other foreign markets.

Thus it needs help of government to foster its growth and competitiveness. Although

unit is benefiting with the excise duty policy of the government on soda, which

according to the firm is an important step taken by government to overcome backlash

of slowdown of U.S., Japan etc and is also helping the unit in competing with

imported foreign goods. The firm does not face much foreign competitor in the market

for bottles. But it faces problems when importing its key raw material, like importing

the soda-ash from Kenya, as firm quotes from one of its experience that it takes a long

time in delivery and then reaching at the unit area.

4. Supply Chain Bottleneck: Higher cost of raw materials particularly soda-ash, which

is a major input, according to the manufacturers, is a major factor contributing tohigher cost of production. The manufacturers claim that the three major producers of

soda-ash have cartelized the market which has also contributed to the rising costs. The

uploading of major input (Soda-Ash) for the unit from Kenya to the Nhava Sheva port

located in Gujarat, takes 15-30 days delay which is a major bottleneck in supply chain.

This problem leads to affect the cost of producing the final output in the firm. If this

problem is solved then it will improve the productivity and efficiency of the firm to a

large extent.

5. Manufacturers also claim that government should ban the reuse of glass containers as

it is not quite possible to decontaminate all types of glass containers and reuse them

safely. They suggest that to take full advantage of India’s integration with the world

economy the government should adopt uniform standards, which would pass not only

in India, but also in the developed countries. They also suggest that in case the total

ban on reuse of glass bottles is not immediately possible, then it the suggested to

immediately prohibit re-use of bottles.

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SWOT ANALYSIS

STRENGTHS


management

• Strong R&D





customers


organization

• Immunization to recession

• No foreign competition in domestic

market especially for bottles.

• Huge market share of firm

WEAKNESS

• Continuous Power cuts


customer

• Continuous labor problem

• Face problem in importing critical

raw material at port (Soda-Ash)

• The unit is a part of bigger

conglomerate and the fund

allocation is insufficient

• Mainly concentrate on domestic

market

OPPORTUNITY


market


future

• Strong brand of the parent firm.

• Mainly focus on corporate customer

so still huge scope in domestic

market as far as small customers isconcerned.

THREATS

• Second usage of firms output

hurting the firm

• FDI may affect the firm in future.

• Foreign competition

• Duty on Soda Ash which is a major

raw material

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Conclusion

The unit is progressing at a good pace and keeping its commitment of providing quality

product at competitive prices. But the discontinuity of power supply and transportation

problems at the Nhava Sheva port located in Maharashtra in importing its key imports hinders

not only the growth of the firm but also affecting competitiveness and efficiency of the firm.

The permanency of labour is another problem that firm is facing. To solve this problem the

firm is looking towards the government for the labour reforms. In the present competitive

world to protect the domestic industry government has to look at all these problems and help

the industry as much as possible, so that the domestic industry can grow and compete in the

world market.

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2. Case Study

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