Internship Report of Service Industries Limited

The star in your life

INTERNSHIP REPORT

SERVICE INDUSTRIES LIMITED GUJRAT

MBA 6th


DEDICATIONS

Dedication is a devotion to which we love, who benefactors are, who pray for us and who

made us capable of doing all these things with full devotion and these are two

personalities which are our parents and our teachers.

I dedicate my work & efforts first of all to Almighty Allah and His beloved Prophet

(P.B.U.H) and my Parents and teachers with dedication, love and gratitude without whom

caring support it would not have been possible”


ACKNOWLEDGEMENT

Praise to Almighty Allah, the Omnipresent, the Omnipotent, Who bestowed upon me the

potentially and ability to accomplish this work. No sequence of works can express my

sincere gratitude to our respected teachers of MBA department without their valuable

guidance, rich experiences, helpful advice, useful suggestions and constructive criticism

and comments. I could not have been able to complete this Internship Report. I have

honor to express my heart-full gratitude to the every executive and staff members of

SERVIS GROUP OF INDUSTRIES GUJRAT, who kindly gave them acceptance to the

topic of my Internship Report along with many useful suggestions which encouraged me

to complete my work. Thanks for all those who extend their cooperation for conducting

the work of internship report.


PREFACE

It is the requirement of all Master Degree programs’students to undergo the practical

work in shape of internship. It not only helps to get an exposure to the practical world and

to get familiarized with the practices followed by different organizations while in pursuit

of their objectives but also one can learn to face the professional challenges that are

dramatically different from the educational world. This period called the “learning period

“, if spent properly and sincerely, enables the students to be more confident, more

knowledgeable, and more responsible and, above all, more committed to their work. By

the Grace of Almighty Allah, I am able to bring out Training report on"Service

Industries Ltd. G.T Road, Gujrat"

I hope that It will assist everybody who wants to know about “Service Industries Ltd.

G.T Road, Gujrat”at its best level.

This report is the result of help, which I received from the respected staff of Service, who

appreciated my efforts and informed me about my weaknesses. I worked in this leading

organization and this training report enabled me to draw a line of distinction between

theory and practical. I learned that the procedure in theory and practical is same but we

cannot learn theory without practice and practice.

In preparing this report, I have put all of my best efforts and have tried hard to

give maximum knowledge. Despite of my all the coherent efforts, I do believe

that there will be a room for improvement.

ECECUTIVE SUMMARAY


The internship report is for the purpose of presentation to the management and to the

department to enable them to know my finding during internship.

Theservis industries limited is large manufacturing concern with greater market share in

footwear and tyre& tube. This larger company enables me to learn about how accounting

is carried out in computerized environment (ERP) oracle and how to keep the records of

all the employees in the industry in the human resource department.

How ERP works when accounting financial aspects of different accounting events is

recorded. In start of the report I give introduction to report, history and organization. I

also included company mission, objective, values and field of activities in report to get

early understanding.

SERVICE INDUSTRIES LTD deals in retail and whole sale of Leather shoes, cycle and

motor cycle tyre& tube and Rag division.

Here I worked in accounts dep’t of the SIL (Gujrat) and human resource department.

Where I observed and performed various accounting function during my internship.

There are two production setups of the Service group, one is situated in Muridkey while

other in Gujrat. My focus is on Gujrat factory only. The Gujrat factory is producing the

famous brands in tyres and shoes, the departments which I have visited for my internship

are main departments of this setup. This report covers their structure, working, functions,

strategies and liaison with other departments for the completion of their day to day

activities. As it mentioned above that Gujrat factory producing tyres and shoe but my

focus remains to shoes as it’s generate huge revenue for the industry.

The organization has strengthened market share not in local but also emerging in the

Europe market. Their Slogan is seen on different documents as “The largest exporter of

footwear in Pakistan”. It is right to claim that because they have captured the most of the

European countries some of them may include England, Germany and Italy. It is to be

note that they are exporting the shoe with the name of their clients. They are not


Exporting their own brands to the European markets. Recently they have started to open

their outlets in Dubai and Saudi Arabia.

The sale analysis in under head volume of business is showing that sale of footwear and

tyres&tubes is increasing, but the cost of goods sold is also increasing that is the main

problem organization facing.

In accounts department double entry system is followed importance functions and

procedures that are verification of bills and payments to suppliers A/P, and all the

receipts in term of sales A/R. moreover allocation of expenses with their relevant heads

posting of vouchers, ledger and trial balance.

In human resource department which is leading by the HR manager and other competent

staff ,that department is using the human resource information system (HRIS) and

SMARTERM ,that software’s are being used for keeping all the personal record of each

and every employee of the industry.

The main challenges faced by the Servis are high prices due to high taxes; increase the no

of products, energy crisis. I have also analyzed the external and internal conditions of the

organizations through SWOT analysis with the help of which I came to know about the

strengths, weaknesses, opportunities and threats.

INTRODUCTION OF SERVICE INDUSTRIES


The Service Industries is a Public Limited Company Incorporated as a private limited

company on 20th March 1957 in Pakistan under the Companies Act 1913 (Now

Companies Ordinance, 1984) and converted in to public limited company on 23rd

September 1959, having its registered office located at Lahore. The word, ‘SERVIS’ is

the Brand name and ‘SERVICE’ is the registered name of the Company. It is a public

limited company listed in Karachi and Lahore stock exchanges. It is a part of Servis

Group. Its annual revenue of PKR. 7.68 billion. It is merely engaged in the manufacturing

and sale of footwear, tyre tube and technical rubber products and has been the largest

exporter of footwear from Pakistan for a decade.

The company employs more than 9,000 people in its facilities located in Gujrat and

Muridke. Besides capturing local market the company’s products are also exported

primarily to Germany, Italy, France and United Kingdom.

Service Industries Limited is the largest shoe manufacturing enterprise in the country.

The govt. appreciated the efforts of the company, for the first time in 1968 when it

awarded the PRESIDENT’s EXPORT TROPHY CLASS I. Since then, the company is

the lancets Exporter of manufactured articles; Leather, canvas shoes. The company was

again awarded the PRIDE OF PERFORMANCE TROPHY by the PCCI in 1977. In

the subsequent years, the company has been awarded numerous trophies of awards as an

acknowledgement of its sheer hard work of dedicated efforts.

At present the company has the shoe manufacturing factories at GUJRAT and

MURIDKE. There are four factories operating at Gujrat employing 5083 employees.

These are:-

Leather Shoe Factory (LSF).

Cycle Tyre& Tube Factory (CTT).

Motorcycle Tyre& Tube Factory (MCTT).

RAG Division.

The factory has highly sophisticated test laboratory manned by qualified and trained

personnel. Other than the MCTT & RAG Div own well-equipped laboratories. It is here

that the further products are developed & tested thus ensuring the success of the


company.Leather Shoe Factory and MCTT are ISO 9001 certified where as other

companies are under process.

Each factory comprises of about five hundred to thousand workers depending upon the

workloads. The factory’s peak season starts from September to April. During this period,

the factory hires extra workers and lays them off after the period once the production is

normal.

SIL’s Head Office is located at Lahore. The entire organizational authority is represented

with the help of Organizational Chart, which is headed by a RESIDENT DIRECTOR.

THE LEATHER SHOE FACTORY

The Leather Shoe Factory comprises of about 2,500 employees. LSF production capacity

per day is about 32,500 pairs in which 20% sports shoes, of export and domestic articles.

Now the management decided to install a new machine keeping in view the perspective

increased demand of its products. In return it will enhance its production by

approximately 1,500 per day. To improve its products quality standard and well-

controlled rejection limit allowed is 2.5-3.0 % moreover 95 % of its total exports are

meant for European customers. It have no hesitation in claiming that Service makes the

most complicated and diversified range of footwear for its export customers including the

tough & rugged Motorcycle Boots for its United Kingdom’s customer the whole year

round.

In domestic market Service offers its unique range of polyurethane shoes, which no

competitor has equaled or excelled. Service sports shoes are the most popular brand in

the market which has achieved the Brand Award 2008.

The factory follows the motto “customer satisfaction at priority” and that is the reason

it is thriving for the last many years.

TYRE DIVISION


Tyre Division is one of the group of Service Industries comprises of two leading units

Motor Cycle and Cycle Tyre& Tube Factories located at G. T. Road, Gujrat. It also holds

market share of 45% and 55% in Motorcycle and Bicycle tyre and tube respectively.

Tyre Division has been supplying tyres& tubes to all major original equipment

manufacturers with high share like 50% to Atlas Honda Limited (AHL), 50% to Dawood

Yamaha and 100% to Sohrab Bicycle Manufacturing Company, Lahore. Tyre division

sales network comprises of 12 major distributors in which 5 distributors are for bicycle

tyre& tube and 7 for motorcycle tyre& tube sales.

The company employees all in all 5,083 at present but tyre division comprise about 900

employees. The production capacity per day of bicycle tyre& tube is 18,200 and 22,000

in number with rejection 2.5% and 1% respectively.

Similarly production capacity per day of Motorcycle, Scooter, Trolley, Rickshaw and

ULT tyre& tube is 11,365 and 30,815 respectively in numbers with rejection rate of 1.5%

and 0.5 % respectively. Rejection material wastage and claim percentages are itself a

measure of quality standard.

COMPANY INFORMATION

BOARD OF DIRECTORS


Mr. ArifSaeed (Chairman)

Mr. ShahidHussain (Chief Executive)

Mr. M Ijaz Butt

Mr. Mohammad Akram

Mr. Hassan Javed

Mr. Shahid H. Kardar

Mr. Riaz Ahmed

Mr. Manzoor Ahmed

ADVISOR

Ch. Ahmed Saeed

COMPANY SECTAREY

Mr. Sultan Anwar

AUDIT COMMITTEE

Mr. Shahid H. Kardar (Chairman)

Mr. M Ijaz Butt (Member)

Mr. AnisWahabZuberi (Member)

Mr. Riaz Ahmed (Member)

BANKERS

Habib Bank Limited


United Bank Limited

Muslim Commercial Bank Limited

Faysal Bank Limited

Royal Bank of Scotland Limited

AUDITORS

S.M Masood& Company Charted Accountants

LEGAL ADVISOR

Bokhari, Aziz &karim

2-A Block-G, Gulberg-||, Lahore

SHARE REGISTRAR

HameedMajeed Associates (Pvt.) Ltd

IST Floor, H.M House.7- Bank Square

The Mall, Lahore

FACTORIES

G.T Road, Gujrat.

Muridke-Sheikupura Road, Muridke

OVERVIEW OF THE ORGANIZATION

HISTORY OF THE COMPANY:-


In the year 1941, three young friends like CH. Nazar Mohammad, CH. Mohammed

Hussainfrom Gujrat district and Mr. Mohammad Saeed from District Gujranwala, fresh

college graduates started business at a small scale at Lahore. It started its functions at

Servicepura, a town 20 km. from Lahore, as an independent Co., Governed by its Board of

Directors (Ch. Nazar Muhammad, Ch. Muhammad Hussain, Ch. Muhammad Saeed) and

operated by its own management.

Within years, their business flourished and they were making supplies of their products in

every corner of undivided India. Although the company suffered huge losses, at the time

of partition, due to outstanding payments for supplies made on the other side of the border.

The company had to take a new start and search for new markets. The Directors of the

company were not discouraged and continued their honest efforts and worked hard.

Once the business expanded, they had to look for new sites for the installation of factories.

GUJRAT, being the home district, they decided to install the new factories here. As a first

step, ‘Hilal Tanneries’ was built in Gujrat which started functioning in 1954.

Ten years later, in 1964, the shoe factory followed by a textile mill was also set up in

Gujrat. This was in addition to a shoe factory. Their organization was then built up in a

most organized and scientific manner.

The company had opened its own WHOLE SALE and RETAIL SHOPS all over the

country, enlacing the consumers to buy shoes at fixed prices which were a new trend at

that time. This was much appreciated by the consumers. The company then took another

step and entered into the EXPORT market realizing that the country was in dine head of

foreign exchange.

VISION STATEMENT


“To be a market leader providing quality footwear, tyre& tube and allied products.To

strive for excellence and global recognition by continuous improvement, innovation,

dedication and growth.”

MISSION STATEMENT

To be result oriented and profitable company by consistently improving market share,

quality diversity, presentation, reliability and customer acceptance.

To emerge as a growth oriented concern ensuring optimum return and value addition to

its shareholders.

To ensure cost consciousness in decision making and operation without compromising

the commitment to quality.

To create an efficient resource management and conducive business environment.

Evolving an effective leadership by creating a highly professional and motivated

management team fully equipped to meet any challenge.

To keep abreast with modern technology and designs to optimize production and

enhance brand image to attain international recognition for the company’s products.

To set up highly ethical business standards and be a good corporate citizen, contributing

toward the development of the national economy and assisting charitable causes.

To adopt appropriate safety rules and environment friendly policies.

OBJECTIVE OF THE COMPANY


The product should meet the customer expectations

The basic concern is to satisfy customers

To provide good job opportunities and satisfactions to the people

To respect our competitors

The employees are as important as external customers

Teamwork and cooperation are more important than individual action

Never be satisfied with the low level of the quality always strive for

continuous improvement.

No compromise on Quality

SERVICE GROUP OF COMPANIES

Resident Director

General ManagerGhulam Muhammad

Manager Account Manager Costing

Manager I.T Support Manager ProcurementChief Security& Canteen

Manager HR


Service Group is Pakistan's largest footwear manufacturer and exporter. It also has

interests in retailing its Group Company, Service Sales Corporation, is the country's

largest retailer and wholesaler of footwear. The Group has diversified interests in Rubber

products including tyres and in defense industry products.

The Group was set up in 1958 and today has sales of more than Rs.7.68 billion (US $

90.35 million). The Service Group employs 9000 people in its following Group

Companies. Service Industries Limited, Gujrat is one of the biggest manufacturing

concern firm, Service Industries manufacture the Leather, Canvas, Tyres and Tubes in

Pakistan. Followings firms are include in Service Group;

Service Industries Limited.

Service Sales Corporation (Pvt.) Limited.

Shoe Planet (Pvt.) Limited.

Servis Pharmacy (Pvt.) Limited.

Soul Collections.

ORGANIZATION HIRARCHY CHART


INTRODUCTION OF DEPARTMENTS

Departmentalization is the clustering of individuals into units and units into departments

and larger units in order to facilitate achieving organizational goals. Organizational goals

are achieved more efficiently by the concerted efforts of different departments and there


functions. The functional structure groups jobs into units based upon similarity of

expertise, skills, and work activities.

Service has divided its departments according to functions. Each department is

responsible to handle different tasks. It has number of employees being headed by a

department’s head, which is mostly a manager.

The Service industries situated at Gujrat do not have its sales, marketing and product

development department. Departments are working at head office. These departments

work in coordination so that output of the one department makes the input of the other

and hence this process goes on until the completion of the process in unified way.

Following is the list of departments working at Service Gujrat.

Human Resource

Accounts

I.T Supporting

Industrial Relation

Security

Canteen

Costing

Material Management

Industrial Engineering

Finished Goods Warehouses

Engineering Supporting

Technical Department

Quality Assurance

Production department

HUMAN RESOURCE DEPARTMENT

The H.R department plays vital role in the prosperity of the organization. In S.I.L Gujrat

the H.R develop job descriptions and Organizational chart and define responsibilities and


authorities of the employees who manage, perform and verify their work accordingly.

Two persons are appointed in the department one is H.R Assistance Manager and other is

his deputy assistant human resource manager while H.R manager is also there to control

and over look all the working of that department.

ACCOUNT & FINANCE

At S.I.L Gujrat one manger along with the deputy manager and assistant manager is

leading the accounts department. Double entry book keeping system is being used by the

company. There are about twelve employees working in this department each person

perform specific and separate task. Old database software is gradually wiped out due to

implementation of E.R.P system which is running smoothly and more efficient then

legacy.

This department is divided in to two sections. One section is purely accounts in nature

while other is dealing with wages and salaries issues. The account section has delegated

two persons for cash handling and disbursement.

This department dealt with wages, salaries, provident fund, budgets, bill verification,

payments A/P, receipts A/R, pensions, loans day-today expenses and accounts

management. The wages to the workers are paid fortnightly while salaries are paid

monthly.

IT SUPPORTING

Basically there is numerous motivation of implementing management information

system. This system should be capable to provide the necessary data for decision making

immediately to top management, managers and front line managers.


The propose of system is as follow,

Greater work processing

Data Storage

Cost Reduction

Strict control on resources

Strict control on process and production

Avoid work repetition

Base for Activity Based Costing

I.T department is working as the system support department for all the other departments

so that they can perform their activities efficiently and efficiently. I.T department of the

S.I.L Gujrat is responsible to manage all the activities relating to computer systems and

database.

The persons are appointed in the department are I.T literate. They generate different

reports in database on the requests of managers. This department holds the strength of six

employees which includes two programmers, one assistant, and hardware supervisors

headed by a manger and an assistant manager.

INDUSTRIAL RELATION

This department maintains the record of workers like H.R. In the Service industries Ltd.

Gujrat record of staff is prepare and maintains by H.R and workers record is maintain by

I.R. Moreover departments’ responsibilities are to arrange the meetings with other

companies if there is need for any visit by the management. This department arranges the

classes of newly appointed work in the training school.

SECURITY


In the S.I.L Gujrat the security department is responsible to keep the law and order inside

the factory. They are responsible to handle any misconduct and to keep the eye on the

workers to stop theft.

This department is being run by the retried major in a much arranged manners. The

security staff is appointed at gates and other important places inside the factory. They are

responsible to check the vehicles and coming persons.

Now automatic security system is installed in the factory close circuits cameras are fixed

to check out activities inside the factory.

CANTEEN

Canteen or mess is meeting the food requirements of its more than 2000 employees at

one time. The rate for food is fixed by the management and it is very economical there

are 2 sections for canteen, one is responsible for all the activities involve in making and

distributed food and other is responsible for the purchasing of required edible things

along with grocery.

There is a management committee for the smooth running of canteen matter, headed by

factory managers. The other members of the canteen committee are head of different

departments.

The canteen is divided in to three portions:-

One portion is reserved for worker

Other is reserved for non-managerial staff

One is for the managerial staff.

COSTING

Costing department performing very important function it allocate the materials and their

quantities to be required for the bulk production and prepare the cost sheet of each article.


Cost sheet is very important document that comprises very important detail for top

management. It includes the value of material, overheads, percentage of gross profit, net

profit, and contribution margin of one unit. It is divided in to two sections one is called

costing shoe division and other costing Tyre division.

Department receives the orders from planning department raise bill of material that

Includes how much material to be required to produce the order and how much value it

carries. It works on the basis of specifications received from model room and standard

rates of material received form material management.

Main Responsibilities & Documents of Costing Department

Preparation of cost sheet

Preparation of Material Estimate sheet

Material requisition issue to store

Pre-costing and post-costing

Monthly profit & loss statement

Calculate the Material, Labors and F.O.H

Prepare the annual budget on production base

Valuation of Work in process on daily and monthly basis

Apportionment of overheads to their relevant cost centers

Comparison of budgeted vs. actual overheads.

MATERIAL MANAGEMNT

Material management perform vital role in the organization this department made of all

type of purchases includes domestic and foreign the responsibility of this department.

Department is divided in two segment local and foreign purchases separately.

Local department further divided in to 6 sections that include:-

Leather


Packing

Chemical

Synthetic

Grinderies

Technical equipments.

Moreover working on inventory management and arrange the material timely is the key

responsibility of this department. Manager of material management is responsible to

ensure the delivery in time and manage the raw material inventory level stable.

Whole production is depending on it for example if the material is not received in time or

any quality discrepancy in the material the production will ultimately suffer. There are

fourteen employees working in this department. Manager of material management is

responsible to controlling various sub departments which are reporting to him that are:

Procurement of Material

Raw Material Stores

Material Inspection Store (Receiving Room)

PROCUREMENT DEPARTMENT

Procurement department is the back bone of Service Industries limited because at each

level of production raw material is needed and there are so many items involved of

different and colours. Procurement department raise the purchase order on the basis of

bill of material that receive from costing department and made all adjustment of material


to avoid dead stock. Department establish and maintain relations with suppliers and

ensure them to delivery within the lead time. Lead time for local purchase is 40 days and

for import is 3-months.

SCOPE

Purchase, Planning and Quality Assurance.

RESPONSIBILITIES

Procurement Officer determines whether to negotiate new purchase orders or amend

existing orders based on the manufacturing schedule. Planning Officer reviews purchase

orders based on the quantity of the order and the delivery requirements and ensures all

items ordered be adequately defined through "Estimation Sheet" or sample or according

to the specification of the product. These Records are available for reference to

communicate with customer.

RAW MATERIAL RECEIVING ROOM

As per company policy that all material which has receives in the factory main gate first

unloads at receiving room. The receiving rooms inspect the material to make sure that the

material is according to documents enclosed which is called delivery challan. It only

ensure the quantity and not quality. If the material is found complete it generates

approval slip which is sent to the quality department along with the sample of the

material for quality checking.

MAIN RESPONSIBILITIES OF RECEIVING ROOM

Receiving all commodities

Counting of material

Bulk quantity will be refer directly to the related store

Checking the material according to Challan


Issuance of approval slip

Inspection of material & comparing with sample

Sending of material for production reference

Placing passed material at write section & rejected in rejected portion

100% quality needs to be checked of synthetic

RAW MATERIAL STORES

Stores are built in the organization to hold the stocks and for safety of material. Material

is lying in the stores is very organized manners along with their bin card and computer

codes. There are numbers of stores which include chemical store, technical store, leather

store, packing store, synthetic store, grindery store, technical store and sole store.

Stores receive the materials from the receiving room after approval then it counts the

materials and if found correct it generates the receiving report which assures that the

material is taken on charge as stock in hand and credited to supplier.

The store is also responsible to issue the materials to the production unit against indent.

The materials in the stores are kept in manners; whole store is divided in the plots or

blocks and racks. The materials are kept in the plots by attaching the identification card

so that it can be traced easily.

FINISH GOODS WAREHOUSE


The shoes which are manufactured in the production hall are sent to the finished goods

godowns, where they are stored until they are dispatched to its destination. Before

dispatching they are segregated according to the requirements of the depots and the retail

outlet. There are four stores for the finished goods which are retail store, wholesale,

export godown and MCTT and CTT godown.

The retail is responsible to dispatch its goods to retail outlets, while wholesale godown

delivers its goods to the depots; the export godown dispatches it to the port at Karachi

where it is to be dispatched abroad via sea. The two stores retail and wholesale deals in

the local brands and they are under the supervision of the Service Sales Corporation and

not by the factory.

INDUSTRIAL ENGINEERING

It is new department exist recently in service Gujrat. Purpose to create this department is

to measure and improve the output and operational efficiency of the production unit. To

check the discrepancies in production hall i.e. in plant or worker output if any found then

try to remove it. So that productions not suffer and product can be produce with their full

capacity. Three persons are employed for this department in which one manager is

leading other two.

ENGINEERING SUPPORT

It is supporting department chief engineer heads this department with number of engineer

and technicians. This department supporting in term of:-

Maintenance of Tyre and Footwear section

It comprises Electronics and Electrical division

To monitor and controlling the compressor work efficiency

To monitor and controlling the Boiler work efficiency

Power house working

TECHNICAL SUPPORTING


Chief Technical Manager is the head of this department. All material that includes

process of chemicals is control by this department. It includes Raw Rubber processing,

Main Laboratories and P.V.C Molding and pressing.

There are two laboratories at SIL Gujrat one for shoe division called main laboratory

other for tyre division both these laboratories are being headed by the chief technical

manager and there are number of qualified technician are sporting him. The laboratory

inspects the incoming material which required lab test that they are free from band

chemical and recording to their specification.

They also undertake any other test recommended by the quality department to check the

material they also instigate the material during the process of production to know any

effect of process on the shoe during manufacturing.

If any problem is diagnose at any stage of process they are responsible to come up with

reasons of that problem and suggest measure to control the laboratory is equipped with

latest Technology of the time and they have very sensitive machine to exclude the

chances of any miner machine error.

QUALITY ASSURANCE DEPARTMENT

Quality assurance manager is appointed to check out the qualities matters and responsible

to deliver the goods to finish godowns to avoid end customer complaints and to goodwill

for the company.

The Company’s Management has defined and documented its policy for quality, which

includes its objectives and commitment to quality and customer expectations.

The company ensures that its quality policy is understood, implemented and maintained

at all levels of the organization to guarantee maximum benefits and achievements in the

shortest possible time.

The company has developed job Descriptions of all the personnel who affect quality so

that they are aware of their reporting function and detailed job parameters.


The company identifies and provides adequate resources regarding men & materials, up-

gradation of machines, tools and equipment to maintain and improve its quality system

for production verification and other activities.

The Management Representative in addition to his other duties is responsible to establish,

implement and maintain the quality system and gives feedback to the management

regarding performance and progress.

The Management Review Meetings are held to review the quality system at defined

intervals sufficient to ensure is continuing suitability and effectiveness in satisfying the

requirement of ISO 9001: 2000 standards.

CLAIM AND RETURN GOODS

It is duty of Quality assurance manager look after the claim goods. This department

receives these shoes and makes report of its defects and sends to the relevant persons to

check whether the claim is justified or unjustified. If the claim is justified means that the

customer is right to claim the defective is replaced with the new one and the measured are

taken to rectify the error in future. If is not justified no replacement is made.

PRODUCTION DEPARTMENT

In manufacturing concern the largest and the far most important department in any

factory is always is production department. Production department is divided according

to their functions and operation wise they are in align in such a way that output of the one

is the input of the other. In the service industries Footwear section main production

department is Leather Shoe Factory (LSF).

Factory manager is leading this department with his team. Further this department

comprises severaldepartments and sub-departments. In Leather shoe factory main

departments are Lasting and P.U. in lasting departments assemblies lines produce

sandals, chapples and children shoes while in P.U department automatic direct injections

machines are used and it made close supports shoes. More then 500 persons are

employed in the L.S.F. other departments are includes in LSF are:


PLANNING DEPARTMENT

Planning department also controlled by factory manager. Planning department is

responsible to checking out projections, capacities and routing of orders. Planning

department perform very effective work in the factory without planning it is not possible

to complete the job.

All the jobs are issued through planning with allot plan numbers to all list down

departments.

Upper Cutting

In this departments cut the skins in pieces for further process and transfer to next

department along with delivery report.

Closing Section

In this department cutting pieces are assembled and stitched then transfer to assembly

room correspondingly with delivery report is issued at each job.

Assembly room

In this department complete upper without sole are received from preceding department

and stores in organized manner to issued for job accomplishment.

Lasting & P.U Department.

In this department semi finished product are completed and packed. Then products are

transfer to finish godowns with tagging and marking.


MARKETING DEPARTMENT

Marketing Department plays very effective role all the orders are being processed in the

factory premises are receive form marketing department. Marketing department of

Service industries is performing following functions:

Marketing department working on the assessing customer need.

Developing the marketing mix i.e., product, price, place and promotion.

Analyzing sale of products.

Collecting the Orders.

Helps to create the design of product and negotiation prices to customers.

Delivering the order to manufacturing department to convert in product form.

Deliver the right product to right place to right people on right time.

Where as in perspective of export the export department works on it they have their agent

in the outside the countries they charge their commission and perform their work for

service.

BENEFITS OF FUNCTIONAL STRUCTURE OF DEPARTMENT

Service industry Gujrat is using Functional structure that is a type of

departmentalization in which positions are grouped according to their main functional (or

specialized) area.

Typical functional form of organization has several major advantages that the service is

enjoying that are.

In-depth development of expertise is encouraged.

Employees have clear career paths within their specified function.

Resources are used more efficiently.

Economies of scale may be possible because of specialized people and equipment.

Intradepartmental coordination is facilitated and it improves efficiency.


COMMENTS ON THE STRUCTUREOF ORGANIZATION

The structure of service industry limited Gujrat is functional. Hierarchy of each

department is defined according to need of organization. It has large number of

departments in which positions are grouped according to their main functional (or

specialized) area. There are very few cases at SIL Gujrat where two or more department

are being headed by a single person like canteen and shoe division.

There is a long chain of command, each chain member having one or more sub-ordinates

there are large number of level like resident director, general manager, managers,

Assistant managers, executives, staff, supervisor, and workers. A very short spans of

control each member having.

Every manager at SIL is trying to keep most of the authority in his own hands; they are

not willing to delegate these powers to the subordinates and or at continuous try to

increase their power by holding maximum resources. They also keep the key decisions at

their own and do not interested to share the key matters with team members.


WORK DONE BY ME

I joined the servis industries for my practical training and for the purpose of learning as

I am the student of accounting and finance so I selected the two departments where I have

done my internship are:-

Human resource department

Accounts department

In both of these department from the first day I have learned a lot starting with arranging

the files to than ended with working on the software’s used by the servis industries:-

Human resource information system

Smarterm

ERP

In these two department I not only got the knowledge that who to work in the practical

life but also my discussion with the staff members helped me a lot for aiming my future

goals and my proper implantation of theoretical knowledge in practical life.

PROCESS OF DATA COLLECTION

Human Resource department of Service Industries Limited organized and route my

training program in such a way that it is list down in scheduled form and indicating the

day and date in all the departments, factories which has been approved by GM. I have

used the following methods of data collection during training;

Discussions and conversations with department’s heads and their Assistant

Managers and also discussion with subordinates

Study the hierarchy chart of organization and observe the daily reports has been

generated by relevant department.

Meet the marketing representative during his visit at the service.

Study of website of service.


WORKING IN ACCOUNTS DEPARTMENT

MANAGEMENT HIERARCHY OF ACCOUNTS DEPARTMENT


At S.I.L Gujrat one accounts manger along with the deputy manger and assistant manger

is leading the accounts department. Double entry book keeping system is being used by

ACCOUNTS MANAGER

DEPUTY ACCOUNTS MANGER

ASSISTNANT MANGER ACCOUNTS

SENIOR ACCOUTNS OFFICEER

ASSISTANT ACCOUNT

MANAGERS

ASSISTANT ACCOUNT

MANAGERS

ASSISTANT ACCOUNT

MANAGERS

ASSISTANT ACCOUNT

MANAGERS

JUNIOR ACCOUNTS OFFICER


the company. There are about twelve employees working in this department each person

perform specific and separate task.

Old database software is gradually wiped out due to implementation of E.R.P system

which is running smoothly and more efficient then legacy. This department is divided in

to two sections. One section is purely accounts in nature while other is dealing with

wages and salaries issues. The account section has delegated two persons for cash

handling and disbursement.

This department dealt with:-

Wages,

Salaries,

Provident Fund,

Budgets,

Bill Verification,

Payments A/P,

Receipts A/R,

Pensions,

Loans Day-Today Expenses

Accounts Management.

The salaries to the workers are made and distributed after every 15 days, while salaries to

the staff if are below 10,000 are distributed monthly at the factory. If the amount is more

than the 10,000 then it is credited to the employees account. The pay to the workers is

also being made twice a month. The persons are performing their work at department are

very experienced.

SALIENT FEATURES OF ACCOUNTS DEPARTMENT


It is based on double entry system.

All procedure to maintain the accounts is now computerized.

Oracle ERP System (E-Business Suite) has been implemented.

The competitive priority of Accounts & Finance Deptt.is to implement the Oracle ERP

System with an investment of Rs. 50 million. Its functional module is fully implemented

and achieving targets whereas payroll and supply chain module is in pipeline.

The accounting procedures employed in a company reveal the overall condition of the

company management. Accounting in the simple words is the counting of incomings and

outgoings of an organization. For this purpose all the companies hold record of every

transaction in their books through the accounts.

The books employed for this purpose are called ledgers. Service Industries Ltd has

installed modern accounting procedures. The head office receives vouchers regarding the

happenings at their factories daily. Service Industries Ltd maintains the following

statements or vouchers in its accounting procedures at the factory.

Voucher System:

“A piece of paper that may be exchanged for goods or services.”

For an unqualified audit report the essential document is Voucher. Every transaction is

recorded through Vouchers. There are several kinds of Vouchers for example cash

payment voucher, journal voucher, bank receipt voucher and bank payment voucher.

1. Cash payment voucher:

A voucher is made when any cash transaction taken place. For example we purchase any

supply and made payment through cash then we record it by cash payment voucher.

2. Journal voucher:


Journal voucher is to record every transaction made either purchase or sale of any goods.

It has fixed heads of accounts.

3. Bank receipt voucher:

A bank receipt voucher is made when any payment received by cheque/bank. For

example we sold out any inventory we record it by bank receipt voucher.

4. Bank payment voucher:

A bank payment voucher is made when any payment paid by cheque/bank. For example

we purchased any material we record it by bank receipt voucher.

Also I have learnt how to maintain the Journal, Ledger, and Trial Balance in ERP. I have

also gained knowledge of cash flow statement.

Sources of receipts:

The following are the sources of receipts in SIL Gujrat;

1. Recovery from C.T.T & MC TT.

2. Recovery from sales of shoes/Tyre tubes through fair price shop.

3. Recovery from SSC on account of shoes sold on direct basis.

4. Sales proceeds of left over raw material.

5. Retail stores’ sales of shoes.

Payments:

The following are the payments in SIL Gujrat;


1. Wages to workers.

2. Salaries to staff.

3. Fringe benefits.

4. Utilities expenses are made on reimbursement basis.

5. Government Dues.

The following payments are made to Government;

1. Custom Dues

2. Sales tax.

The following payments are made to Suppliers;

1. The suppliers are paid on credit/cash basis

2. Venders are paid on cash basis.

3. Foreign suppliers are paid up to a limited level.

Authorized Signatories:

The persons on whose signature bearing documents/ cheques are considered valid with

reference to making payments are drawing cash from accounts office. These are:

Seat Vacccant Resident Director, SIL, GRT.

Mr. Ghulam Muhammad G.M. SIL, GRT.

Mr. MushtaqBaigMirza Manger Accounts

Mr. Habib-ul-Rehman Manager Costing-TD

OBSERVATION ON ACCOUNTS DEPARTMENT


I have observed with the implementation of E.R.P system the work load has increased on

the employees due to which company hire more people that also carrying cost. Repetition

of work is increase a like posting in legacy as well as in E.R.P. This is happening because

the system is not interlinked with material management module. It is in process so that

the invoices are being posted in the accounts department instead of procurement.

HUMAN RESOURCE DEPARTMENT


The H.R department plays vital role in the prosperity of the organization. In S.I.L Gujrat

the H.R develop job descriptions and Organizational chart and define responsibilities and

authorities of the employees who manage, perform and verify their work accordingly.

MANAGEMENT HIERARCHY OF HUMAN RESOURCE DEPARTMENT

FUNCTIONS OF HUMAN DEPARTMENT

HRM & ADMIN MANAGER

CSO

ASSISTANTSECURITY OFFICER

IR MANAGER

ASSISTANTIR

MANAGER

CLERK LABOUR OFFICER

ADMIN OFFICER

DEPTUY MANAGER

TIME KEEPER

ASSISTANT MANGER


The HR department is responsible to provide the man power to the all other departments.

This department receives demand of the employees from the department heads where

needs the employees. Then H.R officials evaluate the job with the head of department and

after approval by the G.M the H.R assistant manager appoint the person.

There is much specified and organized way to hire the person that includes:-

Advertising

Screening

Testing

Interviewing the candidate

More over this department perform following functions:

Hiring and firing of the Staff Members

Transfer of staff if needed and job rotation

Describe the job specification and job description

Hold and maintain the record of employee

To conduct the frequent training sessions of the employees

Determine the additional human recourse requirement.

Sort out the matters of employees

Internship of the students is also arranged by this department along with the visits of the

factory to delegations or visitors.

SWOT ANALYSIS


SWOT is very famous model to analyze different internal and external factors. SWOT

breakup is as follows:

Strength

Weaknesses

Opportunities

Threats

STRENGTHS

SIL is very old and larger organization. It has much strength some of them are as follows:

Old management & workers:

Old management & workersis one of the key to success. The management knows enough

the organizational systems. These all are qualified and competent they know how to run

the organization. This management and staff are all committed to the quality slogan of

the SERVIS GROUP

Strong group:-

Strong group can easily support all of its organization. SERVIS GROUP also influence

SIL shares market value, image and market share. It counters financial problem for

working capital and investment for further developments.

Owned go downs SIL has large number of go downs all over the country. This creates

efficiency in its logistic operation.

Forward integration:-


Forward integrationRetail stores are owned by its associate company SERVIS SALE

CORPORATION (SSC). This gives SIL a chance to serve customer in an efficient

manner with out relying out side retailers. This type of group structure has saved middle

man margin for its own group.

Old brand:-

Old brandname has enabled the group further tap other segments of market. Customers

are confident at the quality foot wear products and tyre and tube of SERVICE

INDUSTRIES LIMITED.

Strong market position :-

Servis has been established since 1941. It has it has strong relationship with its customer

and has very large market share as compared to its competitors. As service supply

customer with quality and reliable product which gain customer confidence. Now the

current position of SIL shows that Servis has beaten it competitors out of market and

captured their market share. Tyre division has strong relationship from very long time.

All motor bike manufacturer and Assembler use Servistyres and tubes. All major

customers are Servis industries client.

WEAKNESSES

There are many weaknesses in any of the organizational system along with its strengths.

Following are some weaknesses

Staff Motivation problem:-

Staff is working with no motivating factor. Demotivation causes inefficiency in staff

work. Salary packages should related adjusted for variable factor .

Centralization:-

Centralization prevents the staff to work free and local management is not in position to

take quick decision according to local requirements. On the other hand it create


horizontal communication barrier. Top head office control approach cause less teamwork

and lower motivation.

Inconsistent office work :-

Head office control the SIL accounts department. The staff is always seen disturbed due

H.O interruption. And not so much sure about there real job description staff consider the

job as task base jobs. It means staff has to fulfill the task what is required by H.O in terms

of any type of reconciliation, report about customer suppliers and any financial report.

Salary package

Salary packages for middle level staff are not so hand some to motivate them so that they

work with full devotion. Middle level staff salary package should be adjusted for monthly

performance allowance. Workers wages should also be adjusted for the quality of work.

As this will further make positive impact on other workers and compel them to work and

produce quality output.

Lack of communication

There is communication barrier between the high management and lower level staff. This

cause lower quality and efficiency in the staff work. This is really Importance to educate

the staff and worker for quality of work.

OPPORTUNITIES

Product development :-

Service industries Limited group structure allow it to easily market new products to

exiting customer as well as it can bring innovation in it exiting products. It has capacity

to introduce new product articles so that it can increase profitability. As its exiting

infrastructure has capacity and flexibility to extend it product and segment portfolio.


SIL manufacture only tyres and tubes for cycles and motor bikes. Company has never

still taped the auto tyres and tubes manufacturing as if we compare it with it competitor

like PANTHER which has started manufacturing tyre and tubes for various types of

vehicles like cars, tractors, trawlers and wagons. If SIL start manufacturing and

marketing the tyres and tubes for heavy vehicle this cause service to have unbeatable

position in the market.

Market development :-

Servis group has still never has marketed it product to many globally attractive markets.

These untapped markets can bring large amount of revenue for the nation. Especially,

AFRICA, MIDDLE EAST and GULF countries.Servis manufacture it products at low

cost that why SIL in position to offer it customer product at low price.

SIL also manufacture high quality products for elite class of the population. This will

counter the competitive rivalry of companies which manufacture and market high quality

product.

Diversification:-

SIL has strong financial position so that it can easily further diversify it activities. As

there are various types of diversification option available:

i. Forward integration

ii. Backward integration

iii. Horizontal diversification

iv. Conglomerate diversification

Forward integration:-

Currently SIL is manufacturing Foot wear products and tyres& tubes in Gujratplant.If it

adopt forward integration than it should invest in retail business for it products. Current

SIL’s associate company has its own retail shops for foot wear products. Company has an

opportunity to invest for retail business of tyre and tubes.


Backward integration:-

Purchasing supplier is backward integration. SIL purchase all types of materials from out

side companies. This can cause various problems for SIL:

Uncertainty of supplies

Quality of supplies

No control over prices in case of supplier’s monopoly

Middle man margin of profit

This situation can be countered backward integration. SIL can takeover it major supplier

to remove all types of uncertainties. For example NATIONAL PETRO CARBON LTD is

major supplier of raw material for tyre division products. SIL has to agree at there terms

due to there monopoly. The uncertainty related to these types of parties can be removed

by acquiring these of companies.

Horizontal diversification:-

Horizontal diversificationmeans acquiring company with same nature of business and

typeof operations. For example, acquiringBata company production plant and Borejan

company production plant is horizontal diversification.

Conglomerate diversification:-

Conglomerate diversificationis unrelated diversification. This of portfolio hasvery

unrelated businesses and products in the portfolio.

Like acquiring flour mills and textile mills for better diversification and smooth annual

profits.

THREATS

New players enter the market this mean that as time passes new investors come in

footwear sector and tyre tube manufacturing business. This causes increase in

competitive rivalry. Price war, increase in quality expectation by customer increased


marketing cost. As recently many company entered the foot wear industry. Many

Chinese Company entered the market with low price products.

Uncertain Govt policies:-

Security energy and financial problem Govt policies has no certain direction and policies

about how support businesses to sustain in the current highly competitive environment.

Heavy taxes &Govt levies:-

Government of Pakistan has not taken broader steps for development of business.

Recently Govt increases sales tax from 16% to 17% SED 1% is already applicable. This

increase in taxes discourages growth in sales.

On the other hand import duties increased the cost of imported goods. No relaxation has

been given to investors in this financial year.

High Inflation & Interest rate:-

High inflation rate cause increase in cost of production, high depreciation cost hence

lower profitability.

Interest rate rises causes high finance cost as SIL has many leased assets which cause

mostly power generator.

Competitor policies:-

Competitor policiescan also influence the organization as it is possible that it they

decrease their product sale price so that SIL might have to turn around for better

customer response. SIL should always be ready itself to adjust its policies according to

the competitor action. This would avoid erosion of market share of the SERVICE

INDUSTRIES LIMITED.


CONCLUSION

Service industries (LTD). is in a great position as a leader in the market to earn

profits. But ignoring the aspect that china has entered in the market and fastly

capturing the market as it has captured the word market. So local footwear

industry needs to be aware and conscious about the technologies the china is

using.

An other fact that I have observed by studying the annual reports of SIL that their

profit are increasing due to increase in prices not by increase in the units sold, it is

alarming situation because it would not be possible in the future as when china

will have made stron position in the market in next 10 years.

They are also doing business in the tyre tube industry. Its good because this sector

has a great potential and they can make great profits.

At the end I would suggest that they should adopt cost effective measures and try

to increase their unit sales because of competition.


RECOMMENDATIONS

The management is ignoring the Middle East market it has the chance to become

multinational due to shift in politics in Middle East.

Expanding the company’s product line to meet a broader range of customer’s

needs the management is ignoring the segment that is design and extra quality

conscious like not introducing leather shoe in the local market.

Using the internet and E-commerce technology to drastically cut costs the

management is reluctant to consider roll of information technology factor in

reducing cost.

Acquisition of rival firms or companies. Bata and there are many others emerging

footwear stores in local market the management should use acquisition and

merger to run its plants with full swing to gain economy of scale.

Alliance or joint ventures that expand the firms market coverage or boost its

competitive capability.

The management should use these tools to gain exposure and experience.


REFRENCE AND SOURCES

I use following source during preparing internship report.

For definitions I use following search engines.

www.google.com

www.service.com

www.wikipedia.com

For the purpose of different important concepts and terms, I use the following books as

references:

Accounting by SohailAfzal ,M.Arif

Accounting By Mukhar G AndZubari

Fundamental of Financial Management by James C. Van Horns

I concert the following further material:

Annual Financial Report of Service industries Ltd.

2011

http://www.wikipedia.com/

http://www.service.com/

http://www.google.com/


2010

2009

2008

THE END

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