Project Lunar 28

Report on organisation study at Lunar Rubbers Pvt. Ltd

CHAPTER IINTRODUCTION

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INTRODUCTION

As a step in to the next millennium managers will be witnessing new dimensions

in designing their organisations. The continuous change in the industrial environment

will force today’s organisations to adapt to the existing system. Study about these

organisations will benefit company and academicians to review the new dimensions in

building up of high-tech corporate of the future.

Organisation is the structural framework of duties and responsibilities required of

personnel in performing various functions with a view to achieve business goals,

through organisations. Classicists have used the term ‘organisations’ in the form of

organizing which is a part of management process. Presently the term organisation is

used in the following ways with or without prefix or suffix.

As an entity.

As a group of people

As structure

As a process

The most frequent use of the term organisation is an entity and is referred to use an

enterprise as a whole, like company , corporation , partnership firm, etc……..In this

firm, organisation is defined as collectively for achieving common objectives..

William R Scott has defined organisation as follows “organisations are collectivities of

people that have been established for the pursuit of relatively specific objectives on

more or less continuous basics.”

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1.1 OBJECTIVES OF THE STUDY

1. To study the organisation as a system and its various functional areas

2. To have a practical knowledge of the application of the management theories.

3. To have the life knowledge of an organisation through various departments.

4. To understand the strategies adopted to confront the challenges faced by the

company

5. Conduct an analysis on SWOT

6. Conduct an analysis on competitive analysis

1.2 METHODOLOGY

The organisation study was conducted by collecting information from primary and

secondary data sources.

The study conducted in three phases

The first phase involved collecting information from various manuals, articles, website

etc.

The second phase involved interviewing departmental heads and other staffs for

understanding the activities of each department. Its structure and the roles played by

each of them

The third phase involved visiting operational sites of various departments. The main

aim of visit was to obtain a physical feel of the departments and observe the activities

performed by it, and its importance of the whole organisation.

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1.3 SCOPE OF THE COMPANY

A well organized or effectively planned organisation forms the base stone of

every successful business. The project study on organisation provides an excellent

opportunity for experiencing or understanding the organisation in its real colours. This

also enables the student to found out the correlation between the theory and the real

business situations. The project helps in developing the internal abilities like

conceptual, inter personal skills and there by encourages the entrepreneurial capabilities

of the student. The study covers the functioning of marketing, personnel (H.R) and

finance & production departments.

REASONS FOR SELECTING THE COMPANY

Lunar is one of the famous Hawai chapel manufacturing companies in Kerala.

Lunar rubbers Pvt. Ltd is situated at Olamattom, Thodupuzha, and Idukki District. They

have a good brand image in Kerala. They are producing Lunar Hawai chapels, Lunar

umbrellas and Lunar bags. But this year onwards company decided to stop the

production of bags. Lunar Pvt. Ltd. have four well functioning departments. The

company officials are very much helpful and supportive for the students, doing projects

in the company. The reputation of the company influenced me also. So I select this

organisation for my study.

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ABOUT THE STUDY

Duration

I spend 30 days in the organisation for the study of various departments.

METHODS OF DATA COLLECTION

Primary Data

I refer to the data that was collected first hand, directly from the source. This

consisted primarily of interviews and discussion with the managers, employees and

other staffs.

Secondary data

I refer to the data that was previously collected by others for another purpose. It

includes

Company booklets

Organisational website

Annual report

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1.4 LIMITATIONS OF THE STUDY

Organisation was reluctant to discloser the financial and other relevant

information required for the study

There is a chance for personal prejudice or bias while interviewing the different

heads for collecting various information about the organisation

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1.5 CHAPTERISATION

The report has been presented in eight chapters are as follows

CHAPTER 1 : Deals with introduction, objective of the study scope an significance of the study, methodology of the study, and limitations.

CHAPTER 2 : Industry profile

CHAPTER 3 : It includes company profile, product profile history, objective, Vision and mission.

CHAPTER 4 : Deals with different functional departments

CHAPTER 5 : SWOT analysis.

CHAPTER 6 : Porter’s Five force analysis.

CHAPTER 7 : Findings and suggestions

CHAPTER 8 : Conclusion

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CHAPTER II INDUSTRY PROFILE

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2.1 FOOTWEAR INDUSTRY

The history of footwear industry goes back many 1000 years. Today footwear

industry manufacture a wide range of footwear varying from leather rubber, and other

synthetic materials of styles varying from casual, formal work and athletic shoes.

Paraffin wax and China clay are the most important raw material. These are

easily available in India. In Kerala English India Clay Ltd. Thiruvananthapuram

provides the china clay for the footwear manufactures.

Important Hawai footwear manufactures in Kerala are Lunar, Paragon, Bata,

Rubco, Vkc etc. Paragon group is the largest manufactures of Hawai chapels in Kerala.

Footwear industry is a high profit and fast growing industry, which provides

good income to the country. There is cut-throat competitions in the Hawai chapel

industry. There are a number of Hawai chapel manufactures and hence if one has to

survive in the industry, it has to strengthen its marketing network. The competition in

the industry rises as the number of Hawai manufactures increases.

Lunar Rubber Pvt Ltd is one of the well known of most advanced

manufactures of footwear and Umbrella. Lunar Rubbers Pvt Ltd. emphasis on providing

customer satisfaction of quality products. Now-a-days, rubber industry is growing

exponentially. Rubber is an important material in modern business world. Every year

the use of rubber is rising. Now the rubber has become an indispensable material, which

has got much demand in daily life.

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2.2 USES OF RUBBER

The use of rubber is widespread, ranging from household to industrial products, enter-

ing the production stream at the intermediate stage or as final products. Tires and tubes

are the largest consumers of rubber, accounting for around 56% total consumption in

2005. The remaining 44% are taken up by the general rubber goods (GRG) sector,

which includes all products except tires and tubes.

Pre-historical Uses

The first use of rubber was natural latex from the Hevea Tree in 1600 BC by the An-

cient Mayans. They boiled the harvested latex to make a ball for sport.

Manufacturing

Other significant uses of rubber are door and window profiles, hoses, belts, matting,

flooring and dampeners (anti-vibration mounts) for the automotive industry in what is

known as the "under the bonnet" products. Gloves (medical, household and industrial)

are also large consumers of rubber and toy balloons, although the type of rubber used is

that of the concentrated latex. Significant tonnage of rubber is used as adhesives in

many manufacturing industries and products, although the two most noticeable are the

paper and the carpet industry. Rubber is also commonly used to make rubber bands and

pencil erasers.

Textile Applications

Additionally, rubber produced as a fiber sometimes called elastic, has significant value

for use in the textile industry because of its excellent elongation and recovery proper-

ties. For these purposes, manufactured rubber fiber is made as either an extruded round

fiber or rectangular fibers that are cut into strips from extruded film. Because of its low

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http://en.wikipedia.org/wiki/Eraser

http://en.wikipedia.org/wiki/Rubber_band

http://en.wikipedia.org/wiki/Carpet

http://en.wikipedia.org/wiki/Manufacturing

http://en.wikipedia.org/wiki/Adhesive

http://en.wikipedia.org/wiki/Balloon

http://en.wikipedia.org/wiki/Toy

http://en.wikipedia.org/wiki/Gloves

http://en.wikipedia.org/wiki/Automotive

http://en.wikipedia.org/wiki/Maya_civilization


dye acceptance, feel and appearance, the rubber fiber is either covered by yarn of an-

other fiber or directly woven with other yarns into the fabric. In the early 1900’s, for ex-

ample, rubber yarns were used in foundation garments. While rubber is still used in tex-

tile manufacturing, its low tenacity limits its use in lightweight garments because latex

lacks resistance to oxidizing agents and is damaged by aging, sunlight, oil, and perspira-

tion. Seeking a way to address these shortcomings, the textile industry has turned to

Neoprene (polymer form of Chloroprene), a type of synthetic rubber as well as another

more commonly used elastomer fiber, spandex (also known as elastane), because of

their superiority to rubber in both strength and durability.

Vulcanization

Natural rubber is often vulcanized, a process by which the rubber is heated and sulfur,

peroxide or bisphenol are added to improve resilience and elasticity, and to prevent it

from perishing. Vulcanization greatly improved the durability and utility of rubber from

the 1830s on. The development of vulcanization is most closely associated with Charles

Goodyear. Carbon black is often used as an additive to rubber to improve its strength,

especially in vehicle tires.

Allergic Reactions

Some people have a serious latex allergy, and exposure to certain natural rubber latex

products such as latex gloves can cause anaphylactic shock. Guayule latex is hypoaller-

genic and is being researched as a substitute to the allergy-inducing Hevea latexes. Un-

like the sappable Hevea tree, these relatively small shrubs must be harvested whole and

latex extracted from each cell.

Some allergic reactions are not from the latex but from residues of other ingredients

used to process the latex into clothing, gloves, foam, etc. These allergies are usually re-

ferred to as multiple chemical sensitivity (MCS).

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http://en.wikipedia.org/wiki/Hevea

http://en.wikipedia.org/wiki/Hypoallergenic

http://en.wikipedia.org/wiki/Hypoallergenic

http://en.wikipedia.org/wiki/Guayule

http://en.wikipedia.org/wiki/Anaphylactic_shock

http://en.wikipedia.org/wiki/Latex_glove

http://en.wikipedia.org/wiki/Latex_allergy

http://en.wikipedia.org/wiki/Carbon_black

http://en.wikipedia.org/wiki/Charles_Goodyear

http://en.wikipedia.org/wiki/Charles_Goodyear

http://en.wikipedia.org/wiki/Vulcanization#Reason_for_vulcanizing

http://en.wikipedia.org/wiki/Elasticity

http://en.wikipedia.org/wiki/Sulfur

http://en.wikipedia.org/wiki/Vulcanization

http://en.wikipedia.org/wiki/Spandex

http://en.wikipedia.org/wiki/Chloroprene

http://en.wikipedia.org/wiki/Neoprene


2.3 OVERVIEW OF THE

INDIAN FOOTWEAR INDUSTRY

The Footwear Industry is a significant segment of the Leather Industry in India. India

ranks second among the footwear producing countries next to China. India produces

more of gents’ footwear while the world’s major production is in ladies footwear. .The

industry is labour intensive and is concentrated in the small and cottage industry sectors.

While leather shoes and uppers are concentrated in large scale units, the sandals and

chappals are produced in the household and cottage sector. In the case of chappals and

sandals, use of non-leather material is prevalent in the domestic market.

The major production centres India are Chennai, Ranipet, Ambur in Tamil Nadu, Mum-

bai in Maharastra, Kanpur in U.P., Jalandhar in Punjab, Agra and Delhi. The following

table indicates concentration of units in various parts of the country:

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The major production centres in India

Region Large & Medium Scale SSI Household

Tamil Nadu 64 31 7

Delhi & up North 4 8 25

Agra, Kanpur 9 34 14

Calcutta 1 3 19

Bangalore 6 3 4

Mumbai 3 11

Others 13 10 32

( Table: 2.1 )

The estimated annual footwear production capacity in 1999 is nearly 1736 million pairs

(776 million pairs of leather footwear and 960 million pairs of non-leather footwear).

Region-wise share of total estimated capacities is as follows:

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Region-wise share of total estimated capacities

Region Leather

shoes

Non-

leather

Shoes

Leather Shoe

Uppers

Leather

Sandals

Non

Leather

Sandals

Percentage

Tamil Nadu 26 5 54 1 0

Delhi & up

North

10 77 4 1 60

Agra, Kanpur 45 0 32 62 0

Calcutta 12 0 2 3 0

Bangalore 3 3 4 0 0

Mumbai 4 2 1 32 0

Others 0 13 3 1 40

Total 100 100 100 100 100

( Table: 2.2)

Shoes manufactured in India wear brand names like Florsheim, Gabor, Clarks, Sala-

mander and St. Micheal’s. As part of its effort to play a lead role in the global trade, the

Indian leather industry is focusing on key deliverables of innovative design, consistently

superior quality and unfailing delivery schedules. India in itself has a huge domestic

market, which is largely untapped.

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The Indian footwear industry is provided with institutional infrastructure support

through premier institutions like Central Leather Research Institute, Chennai, Footwear

Design & Development Institute, Noida, National Institute of Fashion Technology, New

Delhi, etc in the areas of technological development, design and product development

and human resource development.

The availability of abundant raw material base, large domestic market and the opportun-

ity to cater to world markets makes India an attractive destination for technology and in-

vestments.

Import

In 1999, the global import of footwear (leather and non-leather) in terms of value was

around US$ 43278 million, accounting a share of 63.42% in the total global import of

leather and leather products. Out of this, import of leather footwear alone accounted for

US$ 26379 million and non-leather footwear US$ 16899 million.

Export

India’s export of Leather Footwear touched US$ 331 million in 1999-2000, recording

an increase of 3.29% over the preceding year. India thus holds a share of 1.25% in the

global import of leather footwear. The major markets for Indian Leather Footwear are

the U.K., the U.S.A., Germany, Italy, France and Russia. Nearly 71% of India‘s export

of Leather Footwear is to Germany, the U.S.A., the U.K and Italy.

In 1999-2000, export of leather footwear from India constituted 21% share of its total

export of leather and leather products. Nearly 33 million pairs of various types of

leather footwear were exported during the year, out of which shoes / boots constituted

90%.

The different types of leather footwear exported from India are dress shoes, casuals,

moccasins, sport shoes, horrachies, sandals, beallerinas, booties.

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Export of leather footwear during the last three years: (Value in million US$)

Product 1998-99 1999-2000 2000-2001

Leather Footwear 320.25 330.80 348.96

Export projections for the next two years: (Value in million US$)

Product 2001-02 2002-03

Leather Footwear 453 506

Following leading institutes in India are engaged in imparting training to personnel in

the footwear manufacturing as per the requirement of the trade and industry

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Institution For Training Footwear Manufacturing

Name of Institute Address and E-mail

Council for Leather Exports(CLE)

Leather Centre, 53 Raja Muthiah RoadPeriamet, Chennai – 600 003Fax: 044-538 8713/538 7083Email: [email protected]

Footwear Design & Development Institute(FDDI)

A-10/A, Sector-24, NOIDA-201301Email: [email protected]

Central Footwear Training Insti-tute (CFTI)AgraChennai

41-42 Industrial Area, Site C, Sikandra Agra – 282002 (U.P)E-Mail [email protected]/1 GST Road, Guindy, Chennai-600032Tele: 044-2341529/236876Email: [email protected]

( Table: 2.3 )

The CLRI and the FDDI are also equipped to carry out most of the tests for footwear

manufacturing and issue certificates.

2.4 INDIAN FOOTWEAR COMPONENTS INDUSTRY

The Footwear Component Industry is a segment of the Leather Industry in India. The

Footwear components, which are mainly exported from India, are Leather Shoe Uppers

and Leather Unit Soles. The estimated annual production capacity of Leather Shoe Up-

pers is 112 million pairs. The major production centres are Chennai, Ranipet, Ambur in

Tamil Nadu, Agra and Delhi. The components industry has enormous opportunity for

growth to cater to increasing production of footwear of various types, both for export

and domestic market. India’s export of Footwear Components touched US$ 229.49 mil-

lion in 1999-2000, holding a share of 15% in India’s total export of leather and leather

products. Nearly 75% of the total export of footwear components is from the Southern

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Region, followed by the Northern Region, with a share of 13%. The major markets for

Indian footwear components are the U.K., Germany, Italy, the USA, France, and Por-

tugal. Nearly 83% of India‘s export of footwear components is to the above countries.

In the year 1999-2000, India exported footwear components to the tune of 38 million

pairs mainly consisting of leather shoe uppers, leather unit soles and other components,

out of which Leather shoe uppers (gents and ladies) alone constituted a share of 84%.

Export of footwear components during the last three years (Value in million US$)

Product 1998-99 1999-2000 2000-2001

Footwear Components 237.72 229.49 219.81

Export projections for the next two years: (Value in million US$)

Product 2001-02 2002-03

Footwear Components 314 350

2.5 STATE SCENARIO

However, 94% of the natural rubber is produced in Kerala and the balance 6% is

from plantations in other states. But now the production is higher than the demand. The

value is increasing day by day. In these states most of the rubber based industry are

engaged in the production of tyres, rubber bands, thread rubber, Footwear etc.There are

over five thousand rubber goods manufacturing units in the country consuming over 5

lakh tones of rubber per year. Nearly 48% of the rubber consume in the country is by 30

% tyre manufactures. Now there is a big boom in the rubber based industrial sectors of

the state. Kerala entrepreneurs and rubber growers are educated, encouraged and

supported in setting rubber based industries.

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CHAPTER III COMPANY PROFILE

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3.1 COMPANY PROFILE

Lunar rubbers Pvt Ltd. Was promoted by Sri Isaac Joseph based on the wide

experience he has gained as the Managing Director of Viking Rubbers (p) Ltd was

registered as an S.S.I unit. Unit started working from 1976 in the Mini industrial Estate

Olamattom, Thodupuzha. The unit was promoted as part of experience in the field and

limited know how regarding machinery and market the unit could go very far. Yet with

a determination the promoters held on to the proposal and continued the project. All

liabilities from the government and banks were paid up. At present there is no outside

liability other than current liabilities for working capital.

Lunar Rubbers a partnership firm ,was registered as an S.S.I , unit No. 09-11-

00429/PMT/SSI dated 27-11-82 the firm was converted in to a private limited company

during January 1993. Lunar Rubbers Pvt. Ltd could, make a breakthrough in the market

by introducing high quality light weight chapels. The quality of the product attracted

large number of customers in the state and neighboring states. The demand for the

product rose very high and caters to the increasing market additional production

capacity was set up.

The company has got good sales contacts through out South India Gujarat and

Maharashtra and established a reputation in the field of producing and selling Hawai

chapels. It was sneaked in to the market of our neighboring countries also. The

company has production unit at Thodupuzha, Mysore, Coimbathore and Mundakayam

with head office at Thodupuzha.

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LUNAR RUBBERS (P) LTD – AN EMERGING GROUP

Lunar group is promoted by Mr. Issac Joseph . An engineer by profession he is well

experienced in developing and promoting innovative business strategies. Around 40%

of the group is sold out side Kerala including Gulf countries and European countries. In

India Lunar’s Hawai chapel is available in the state of Tmilnadu, Karnataka , Gujarath,

Maharastra , Andrapredesh, Pondichery, Goa, etc. other than kerala. .The group of

expanding its capacity and product line like canvas and leather shoe manufacturing are

on the anvil. The company has entered in the umbrella market, information technology,

tourism , etc. marketing its growth in to yet another lucrative area. With a penchant for

customer satisfaction and a passion of research and development the company is

confident of surpassing its goals.

THE LUNAR GROUP OF COMPANIES

LUNAR RUBBERS (P) LTD -THODUPUZHA

VIKING RUBBERS (P) LTD -THODUPUZHA , CIMBATHORE

NEO RUBBER FOOTCRAFTS (P)

LTD

-THODUPUZHA

AKSHAYA RUBBERS -MYSORE

MISHA RUBBERS -MYSORE

FOOTCRAFT RUBBERS

INDUSTRIES

-MUNDAKAYAM

MATHEW RUBERS -CIMBATHORE

UTHAM RUBBERS -MYSORE

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VISION

1. To become a market leader in the rubber industry in the Indian market.

2. To maintain customer satisfaction

MISSION

1. Optimum utilization of resources.

2. To make every employee feel proud of his organisation.

3. To maintain international quality system standard

GOALS AND OBJECTIVE

1. Increase the market share by maximizing sales and improve the quality of the

product offered.

2. To be competitive at a maximizing value of the money

3. Maintain absolute leadership over the market in the near future.

4. To enlarge their business scale of operation by introducing new technology.

5. The main object of the company is to carry on the business of manufacturing of

footwear’s of different kinds.

6. Some of the major objective are profit maximization, customer satisfaction,

effective utilization of work force, to reduce cost of production, bring financial

stability.

SRATEGIES

Organisation usually follows several plans to reach their goals. Lunar

formulated following strategies to achieve these objectives.

Develop superior quality products using new technology imported from

developed countries.

Company will also continue to identify and explore consumer market by

conducting market researches.

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Thoughtful planning and rightly hiring human resources helps the company to

maintain high level of standard in its operation.

PRODUCT PROFILE

(Chart No 3.1 Products of Lunar )

LUNAR HAWAI CHAPEL

a) Lunar Deluxe

This is blue, beige, black, green in colour for gents, ladies, and kid’s. It is

light in weight and soft and having antiskid bottom with patented TWT sole. This

will get I giant size also.

b) Lunar Cushion

This is blue, black, and beige in colour for gents & ladies.

c) Lunar Dimple:

This is slippers with high heel and having TWT bottom which is specially

designed for ladies.

d) Lunar Lite: EVA

e) PU Footwear:

f) Aerolex – PVC

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Lunar products

Lunar Hawai chapels

Lunar umbrella Lunar school bags & shoes

Tourism ventures


LUNAR UMBRELLA

a) Kids umbrella

b) Two fold umbrella.

c) Three fold umbrella.

d) Gents bent type umbrella.

SCHOOL BAGS AND SHOES

These are newly introduced in to the company. The different styles of bags and

shoes for junior and senior students are available in the market.

TOURISM VENTURES

Green berg holiday resort and Green berg resource facility centre. They are located

at Nadukani, Kulamave, Idukki (Dist) Kerala.

LUNAR HAWAI CHAPEL SPECIAL FEATURES

The Two way thread ( TWT) for greater grip a potential design that has won

great acclaim and appreciation.

The thin, strong and well filing strip of Lunar’s Hawai moulded with superior

quality material provided comfort to the user and a longer life to the chappals.

Surpasses the standards.

Lunar’s light weight rubber Hawai are designed to pamper your feet with extra

care and comfort. These slippers weight only 150 gms per piece and contain

excellent natural rubber. These slippers have increased durability due to absence

of fillers and use of quality materials.

Lunar Hawai available in size ranging from 1 to 12 for various segments like

kids, children, boys, ladies, gents, giants.

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QUALITY OBJECTIVE

Acquiring an export share of 45% by 2009.

Set up and establish a laboratory for product testing with in six months.

Increase the turnover by 20 % every year.

Attend all customers’ complaints within 2 working days.

Collect suggestions from employees and utilize for improvement.

Introduce at least one new product in 2 years.

CERTIFICATE

Lunar Rubbers Pvt. Ltd Is an ISO 9001- 2000 certified Company.

POLICY OF THE COMPANY

We at lunar Rubbers Pvt . Ltd . Are committed to:

Leadership by example.

Utmost customer satisfaction

Non stop quality up gradation.

Assure employee involvement in the quality management system.

Reciprocate by delivering products that moves fast in the market.

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The superiority of Lunar has been understood and recognized throughout. And the

company has been honoured by quite a number of awards in recognition to its

performance.

State Consumer Protection Award for manufacturing consumer products.

Vanijya Ratna Award by Southern Vanijya Federation, Trivandrum.

Business Man of Kerala Award by Indian Junior Chamber, Zone-20.

Best Entrepreneur Award by Commerce Forum, St. Thomas College, Palai.

Best Entrepreneur Award by Kerala State Small Industries Association (KSSIA).

Vijayasree Award by Kerala Vyapari Vyavasayi Ekopana Samiti.

Best Entrepreneur Award by Indian Jaycees, Southern Zone.

ORGANISATIONAL STRUCTURE

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Board of Directors


(Chart No 3.2 organizational structure)

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Clerk

Marketing Officer

Acc.Off.2

Junior Acc.

Clerk

Supervisor

MechanicsPlumbersElectricians.

Sales Officer

Finance Manager

Marketing Manager

HR Manager

Purchase Manager

Fin. & Acc.

Acc.Off 1

Junior Acc.

Marketing Manager

Clerk

Asst. HR Manager Works

Manager

Executive Officer

Maintenanc

Office Assistant

Director 1 Managing Director

Director 2

General Manager

Asst. Gene. Manager

Production Manager

Officer

Junior Officer

Senior Assistant


3.2 MANAGERIAL FUNCTIONS

There will be quarterly meeting of the director board members. The board of

directors in their meeting takes corporate level policies and procedures. In case of any

emergency situation there will be special meetings. The boards of directors appoint the

managing director to be in overall charge of administration of the company and office,

assisted by various officers at the office and the factory. Any strategic decision

involving policy matters will be taken only with concurrence of managing director. He

will be assisted by the general manager, Asst. General Manager, Finance Manager,

Marketing Manager and production Manager.

The managing Director conducts weekly meeting with each department

head, G.M and A.G.M. Functional level decisions are taken at these meeting. In these

meeting each department head will give report of the previous week’s work. These

reports will help to asses the performance of the previous week.

The General Manager is in overall charge of the office with particular charge

of matters connected with Registrar of Companies , Banks , District industry centre,

Sales tax, and Company meeting . He will be assisted by assistant General Manager and

other officers and staff in the proper running of the organisation. The assistant General

Manager will assist the Managing Director and G.M. in successfully carrying out their

work with special reference to P.F, E.S.I, Rubber board, Labour office Insurance

companies, Motor vehicles and Motor vehicles Departments, Tax and Vehicle Finance,

Training and Personnel, Municipal and Panchayath Licenses. Etc…

Planning has primacy over the management functions and is a pervasive

element in organisations. By planning, managers minimize uncertainty and risk.

Planning does not deal with decisions, but with the futurity of present decisions.

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Top level managers of the company are generally concerned with planning involving

activities that will take place six months and above. Lower level managers are

concerned with planning activities for the delay, week or month. The supervisors plan

for the work activities for their people for the day. They are not responsible for

producing sales level and ordering materials to produce products in the future. Top level

managers generally spend more time on planning. They are more concerned with

establishing objectives and developing plans to meet these objectives. Lower level

managers are more involved in executing these.

DECISION MAKING

Decision making is an essential part of the management. A manager’s life is

filled with a constant series of decisions .The managers make hundreds of decisions

consciously and subconsciously every day.

Decision making is the key part of a manager’s activities. It spread through all

managerial functions such as planning, organizing, direction and control. In planning it

is through the process of decision making that objectives and policies and laid down and

the manager decided many things such as what to produce, what to sell, where , when ,

how and so on. In organisation decision making relates to the choice of structure, nature

and for of the organisation, division of the work delegation of authority fixing of

responsibility and the like.

In direction decision making relates to determining the course deciding the

orders and instructions to be given, providing dynamic leadership and similar other

issues. In controlling the decisions relate to the lying down of performance standards,

strategies control points procedure for control and so on. The method of decision

making at various levels in Lunar is directly linked to the process of the level of Board

of Directors and Managing Director. Timely and proper decisions are making the

activities of the company vibrant.

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AUTHORITY

Authority of the superior depends on the willingness of his subordinates to

accept it. The authority becomes somewhat meaningless unless those affected accepted

it and respond it. If the subordinates do not accept authority it is not real and does not

exist. Here in the company the authority is accepted.

RESPONSIBILITY

When a superior assigns some work to a subordinate, it becomes his

responsibility to perform it. Responsibility is the obligation of a person to perform

certain duties .Responsibility is his accountability to his superiors.

The subordinates must have been delegated enough authority to undertake all

the duties which have been assigned to him and for which he has accept responsibility

for activities for which he has no authority.

There is laxity at few places as far as responsibility is concerned. This is a

tendency in part of persons at superior level. This is due to lack of determination to

exert authority. This has to be checked.

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RESPONSIBILITY & AUTHORITY

I MANAGING DIRECTOR (MD): He is the Chief Executive Officer of the

Organisation

Responsibilities are

Document control: to approve policy, manual & procedures

Management review: to Chair Management review meetings

Recourse Management: to provide necessary recourses for the smooth operation of

the organisation

Customer Focus: to review customer requirements and promote the customer

awareness

Purchase: to approve purchase of raw material, chemicals, packing materials,

engineering and capital goods, import of materials

Production provision: to review resource requirement for production and production

plan approval

Continual improvement: to decide are for the improvement and necessary action for

improvement on the basis of data analysis

Control of non Conforming Products: To review abnormal product non –

conformities and action plan for improvement

Corrective of pervasive action: To review Customer’s feedback to review the non

conformity so reported and to decide corrective / preventive action

Marketing: to approve price list, export orders Marketing strategy, promotional

activity

Administration: To approve policies, recruitment of top officials etc.

Performance appraisal of senior staff.

Leave sanction of senior staff.

Payment approval.

Approval of all policy matters.

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GENERAL MANAGER

Overall responsibility of the administrative activities.

Legal matter monitoring.

Monitoring of statutory or regulatory requirements.

Liaison with Govt. / Statutory or bodies.

Labour issues monitoring.

Sales tax and related matters.

Advice MD on all policy matters.

FINANCE MANAGER

Head the finance of Accounts department.

Advice MD on finance matters and Accounts matters.

Recommended / evaluate cost control measures.

Verifying all purchase bills.

Verifying all cheque payments.

Watching all expenses.

Preparation of final accounts and conducting audits.

MANAGEMENT REPRESENTATIVE (MR)

Plant Manager is appointed as the management representative and has the authority and

responsibility to:

Ensure that policy objective (relevant to the function ) are communicated and

understood also ensure the process of the QMS are established and maintained.

Report to management on performance of this system and any need for

improvement.

Promoting awareness of customer requirements throughout the organisation.

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Liaise with external agencies including cerifying body on matters related to this

QMS

Plan and organize internal and external audits and follow up on corrective actions

resulting from the audits.

Plan and organize management review meeting and prepare minutes of the meeting.

PLANT MANAGER

Overall responsibility of the plant.

Quality and quantity of production.

Material requirement information.

Planning of preventive maintenance.

Efficient operation of the plant.

Discussing of giving necessary instructions to subordinates.

Technical problem solving.

Optimizing the utility consumption

Labour Control / Relations.

Appraisal of factory staff.

Quality system implementation, monitoring and improvement.

Controlling production and maintenance records.

Training and discipline of the factory personnel.

Timely manufacturing of products.

Reporting to MD regarding Factory functioning.

WORKS MANAGER

Overall responsibility of the cutting , assembling and packing units.

Arranging products for dispatch in time.

Arranging packing materials.

Co–ordinating with manufacturing units.

Reporting to MD regarding product complaints.

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Performance monitoring of the cutting unit.

Co ordination with out sourcing unit.

CHEMIST- Compounding

Overall responsibility of compounding.

Technical problem solving.

Physical verification of raw materials.

Stock of raw materials and chemicals.

Product rejection analysis.

Process control

Optimization of production cost.

Co- ordination with physical lab.

Ensure the implementation of quality system.

Reporting to MD/PM regarding compounding issue.

Custodian of stock.

Raising purchase indents.

Receipt of materials.

Issue of materials.

Maintenance of all relevant records.

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QUALITY CONTROL OFFICER

Overall responsibility of the incoming, in process and final inspection of the

product.

Control of raw material specification.

Incoming, in – process and final inspection of the raw materials / product against

quality plan.

Calibration of measuring and monitoring equipment.

Finished product checking and reporting quality issue to PM/MD

Co- ordinate with production for process control.

Maintaining lab records.

Periodical testing of raw materials and finished goods.

SHIFT IN CHARGE

Overall responsibility of shift activities.

Quantity and quality of production.

Maintenance activity.

Supervisor control.

Workers control.

SHIFT SUPERVISOR

Supervise the activities in the shift.

Job allocation to the workers and manpower control in the shift.

Quality and quantity of production.

House keeping.

Shift documentation.

Ensure the operational instructions are implemented and followed.

Responsible for the loading and unloading activities.

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Proper arranging and identification of raw materials and chemicals.

Control of loading workforce.

Proper arranging of ready for dispatch materials.

ACCOUNTS MANAGER – 1

Overall responsibility of records.

Verification of journal bills and vouchers.

Payment to parties- verification of payment request, writing of cheques and

preparing vouchers.

Import related matters.

Export related matters like preparation of documents, house stuffing negotiation

with bank etc.

ROC related matters like filling of various forms return etc.

Attending company law related matters like preparation of statutory registers.

Preparation of monthly trail balance.

Finalization of closing entries.

Cash / cheque control.

Preparation of cash flow.

Income tax matters.

ACCOUNTS MANAGER -2

Data entry of raw material purchase.

Verification of sales invoices.

Preparation of branch transfer delivery notes etc.

All work related to provident fund.

Filling of returns and correspondence related to ESI.

All work relating to sales tax.

Verification of accounts related to Coimbatore branch.

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Assistance in maintenance of stick records related to umbrella.

Verification of C forms, from 25, from 18 etc, issue to suppliers.

Assistance in connection with finalization of records.

Verification of vehicle repair bills etc.

All matters related to KGST and CST.

ACCOUNTS ASSISTANT

Preparation of cash vouchers.

General vouchers.

Data entry operation.

Bill verification.

Correspondence.

File maintenance.

PURCHASE MANAGER

Overall responsibility of purchase activity.

Vendor control.

Vendor development.

Price monitoring.

Timely supply arrangement of materials.

Purchase bill verification and recommending payment.

Maintenance and control of the stock control.

MARKETING MANAGER

Overall responsibility of marketing activities.

Market development.

Promotional activities.

Distributor control.

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Preparing of sales plan.

Sales monitoring.

Route planning.

Control of sales office.

Cash collection / monitoring of collection of duties.

Marketing analysis.

Collection of market data.

MAINTENANCE PERSONNEL

Preventive and breakdown maintenance.

Beginning store control.

Intimating engineering requirements to PM.

Verification of incoming engineering materials.

Break down analysis.

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CHAPTER IV DEPARTMENTS & IT’S FUNCTIONS

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HUMAN RESOURCE DEPARTMENT

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4.1 HUMAN RESOURCE DEPARTMENT

Human resource department refers to a set of programs, activities of functions

designed of carried out in order to maximize both employee and organisational

effectiveness.

According to Jucius, “human resource refers to a whole consisting of

interrelated, inter -department and integrity, physiological, psychological, sociological

of ethical components” . Thus human resource represents the quantitative and

qualitative measurement of work force required in an organisation.

The goal of human resource management is to help an organisation to meet strategic

goals by attracting, maintaining employees and also to manage them effectively. The

key word here perhaps it “fit” i.e a HRM approach seeks to ensure a fit between the

management of an organisation’s employees, and the overall strategic direction of the

company [Miller, 1989]

Human resource management comprises several processes. Together they are

supposed to achieve the above mentioned goal. This process can be performed in an HR

department, but some tasks can also be outsourced or performed by line managers or

other departments.

Personnel department of Lunar Rubbers view people as the most important

source of assets to be used for benefit of organisation and society. The human resource

philosophy of the management aims at formulation of policies that promote neutrality,

mutual respect, mutual rewards and mutual responsibilities.

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STRUCTURE OF HUMAN RESOURCE DEPARTMENT

( Chart no: 4.1 Structure of HR department)

HUMAN RESOURCE FUNCTIONS

Recruitment

For recruiting, Lunar seeks help from advertising media and recruiting agencies.

Ability and willingness of person to work hard are considered at the time of

recruitment.

Selection

In Lunar selection is done through tests and interviews. Interview is done by the

managing director and Board of directors in the presence of concerned department

heads.

Placement

Most suitable persons from selection will get placement in the organisation.

IMK, Adoor 42

HR MANAGER

ASST. HR MANAGER


Probation

The probationary period workers and staffs in Lunar is up to six months.

TRAINING AND DEVELOPMENT

The company has well structured training program and the training is given to

all workers. Usually the training period for the workers is 3 to 6 months. The company

selects employee for training by identifying the training needs. Company should give

timely training to the workers of the factory. The company uses the job training and

class room training method.

Promotion

On the basis of employee’s efficiency in performance, commitment or loyalty

the management will give job promotion to the employees.

Personnel Records

The company keeps the personnel records for their reference.

Seniority List

The management keeps a seniority list of the employees.

GRIEVANCE HANDLING

In Lunar the problems of workers should be solved the Managing Director.

Workers can tell their grievances directly to MD and he will take corrective steps to

solve it.

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RECRUITMENT:

Recruitment is the process of searching for employees and stimulating and

encouraging them to apply for the jobs in he organisation

Recruitme

(Chart No 4.2 structure of recruitment)

The main source of recruitment in Lunar Rubbers Pvt. Ltd. is external sources. The

company has eight branches. The recruitment and selection of employees is done by

each branches separately and final approval is from the head office.

No special qualification regarding education is considered for factory workers.

The only factor considered is the ability and willingness of persons to work hard. The

minimum age of workers is fixed as 18 years but no maximum age limit is fixed.

IMK, Adoor 44

External sources

Press advertisement

Educational institution

Placement

Internal sources

Transfer and promotion

Recruitment


SELECTION

Selection is the process of choosing the most suitable person out of the entire

applicant. The purpose of the selection is to pick up the right person for right job and at

the right time and at the right place. Selection is an important function. No organisation

can achieve it’s goal with out selecting the right people.

In Lunar Rubbers Pvt .Ltd, sometimes selection is done through informal

interview. There is no medical examination for fitness for the selection. In selection

process attitude of the person is considered.

SELECTION PROCESS

Sometimes Lunar Rubbers Pvt. Ltd, select people through campus interviews.

TRAINING AND DEVELOPMENT

Employee training is distinct from management development. Training is short

term process, utilizing a systematic and organized procedure by which non managerial

person learn technical knowledge and skill for a definite purpose. On the other hand

development is a long term educational process utilizing a systematic and organized

procedure by which non managerial personnel learn conceptual theoretical knowledge

for general purpose.

In Lunar Lunar Rubbers Pvt. Ltd training is given to almost all workers. The

method of training is on the job training . Training period ranges from 2 weeks to 2

years. Workers will get stipend during the training days.

COMPENSATION

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Employee compensation is a vital part of human resource management. Wages ,

salaries , and other forms of employee compensation constitute a very large component

of operating cost . One of the biggest factors affecting industrial relation is the salary or

the wage the compensation an employee receives for a fair daily work.

1. Basic compensation - Basic pay.

2. Supplementary compensation – incentives and variable payments.

METHODE OF WAGE PAYMENT

In Lunar there are two methods of wage payment.

1. Time wage system: The time wage system is applicable in case of

workers

2. Piece wage system: Under this system workers are paid according to

amount of work done or the number of units completed

CONSTITUENTS OF SALARY

The following are the constituents of salary

* Basic pay * DA * Telephone allowance

* HRA * TA

WORKING TIME

Working time for the office staff is 9.30 am to 6 pm .There are 3 shifts for

factory workers. The workers must work 8 hours / day. First shift is 8.30 am to 5.30 pm.

Second shift starts from 5.30 pm to 1.30 pm and third shift are from 1.30 am to 8.30 am.

The working time will be rotated from each worker. i.e., everyone should

work in all these three shifts. There are 25 working days in month.

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WORK FORCE OF THE COMPANY

There are about 140 employees working in the organisation. Some of them are

skilled and permanent and some are semiskilled and trainees. Proper supervision is

necessary to the factory because a little carelessness on the part of workers leads to the

wastage of the product.

Office Employee Details

Employee in office No. of employees

Accounts 5

Administration 5

Field 5

Total 15

(Table No: 4.1 )

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Factory Employee Details

Employees in factory No Employees

Production manager 1

Supervisor 12

Chemist 2

Skilled 30

Semi skilled 40

Helpers 25

Total 110

(Table no: 4.2 )

INCENTIVES

There is a standard performance beyond which workers will get special

rewards.

LEAVE

One earned leave for 20 days and one ESI leaves for 15 days are given to all

employees. Daily wage is the basis of wage calculation but the wages are paid monthly.

Advance of wages given to the needy workers on Sundays. Supervisors will get

monthly wages on the basis of monthly wage system.

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BONUS

Bonus is given once in a year. I t is in December.

EMPLOYEE GRIEVANCES

In lunar Rubbers Pvt. Ltd the problem of workers should be solved by the

managing director. Workers can tell their grievances directly to Managing director and

he will be take corrective steps to solve it.

PERFORMANCE APPRAISAL:

Performance appraisal is the measuring the relative worthiness of a Person, who

engaged in a job. Based on the performance appraisal, Lunar Rubbers Pvt . Ltd provides

best executive award for the employees.Company uses 90 degree appraisal systm.

FRINGE BENEFITS

1. Medical facility

Workers enjoy ESI hospital facility whole as ESI hospital at Thodupuzha and

Perumbavoor . Those workers who do not have ESI facility get Rs 1000 as medical

allowance . There is a first aid box. (FAB) in the factory.

2. Free chappal and uniforms

Workers are given a spare of chappal and uniform in a year. Reduction in

price is also given when they buy Lunar chappal.

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3. Allowance and other benefit

Night shift allowance is given to workers. Overtime wage is twice as of

normal wage. Gratuity given to all employees who complete 5 years of service

including the training period.

4. Labour welfare

The workers enjoy following facilities:

1. Facility of washing , storing , and drying their clothes at the company premises.

2. Rest rooms are provided to the workers.

3. Facility for drinking water

4. Facility for making food, but there is no canteen facility in the factory.

TRADE UNION

There is two trade unions in Lunar Rubbers Pvt Ltd. AITUC (All India Trade

Union Congress) and CITU (Central Indian Trade Union). Salary hikes are

discussed in the labour office in the presence of union leaders, Managing Director,

two persons from management and labour officer.

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FINANCE DEPARTMENT

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4.2 FINANCE DEPARTMENT

Finance is regarded as the lifeblood of business and enterprise. In modern money

oriented company, Finance is one of the basis foundations of all kind of economic

activities. It is the master key , which provides access to all the sources for being

employed in the manufacturing and merchandising activities. Efficient management of

every business enterprise is closely linked with efficient management of its finance.

Business finance can broadly defined as the activity concerned with the planning,

raising, controlling, & administration of the funds uses in the business.

The finance department is under the control of the finance manager. The finance

manager prepares the budget and he allocates the funds. Other accountants are helping

him in this matter.

In Lunar Rubbers all accounts are computerized and they follow double entry book

keeping. Also the company uses EZ COM accounting software. Company has an

external auditor also, K. J. Anto Association Kochi. Company is insured in New India

Insurance.

FUNCTIONS OF FINANCE DEPARTMENT:

1. Preparation of budgets.

2. Raising funds.

3. Planning, direction, controlling, Utilization of funds.

4. Co-ordinating the operations of the various departments through appropriate

measures to ensure the discipline in the use of finance resources.

5. Credit policy: usually company allows credit to their distributors. The maximum

credit is 30 days if the distributor purchases the goods for ready cash then the

company allows 2% cash discount

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Structure Of Finance Department

Chart no: 4.3 Finance Department structure

IMK, Adoor 53

Accounts officer 2

Junior accounts officer2

Accounts officer 1

Junior accountsOfficer

Clerk Clerk

Finance manager


OBJECTIVES

The basic objectives of finance management are the maintenance of liquid assets

and maximization of the profitability of the firm. Management of liquid assets means

that the firm has adequate cash in hand to meet its obligation at all times. The

organisation gives credit to customers. In recent years, consumer credit is playing an

important role in promoting sales but the realization of these credits is the problem

faced by the company.

In Lunar the Financial Manager prepares the budget and allocates the funds. Other

junior accountant assists him in this matter. The accounts officer 1 is in overall charge

of accounts. Trail balance, balance sheet, and audit of accounts, bank assistance,

payment to credit, and collection from sundry debtors, watching payment of dues, and

all other matters connected with it. He attends all the matters connected with income tax

including collection of form and other material for filling returns, super check of

classification of payments. Receipt maintenance of cash book ledger etc. he is assisted

by junior accountants.

The accounts officer 2 is in charge of all matters connected with sales tax

accounting of purchase and sales bills, security and passing of vouchers for payment.

Preparation of journal accounts, party accounts, branch accounts, bank returns

declaration form -18, collection of cheques , Direction of stock register entries. He also

assists accounts officer 1 in the preparation and finalization of accounts. The junior

officer and accountant assist the accounts officer 2. The junior accounts officer attends

to the all accounts of small units returns and returns of company matters, verification ,

electricity, bills matters connected with SIDCO, computers entry of accounts, printouts,

cash book , ledger, bank returns, etc are also the work of junior accounts officers. Their

work is under the supervision of the accounts officer, the company giving P.P of

workers as mentioned in the Act.

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CREDIT POLICY

Usually company allows credit to their distributors. The maximum credit is 30

days if the distributor purchases the goods for ready cash then the company allow 2%

cash discount.

CAPITAL STRUCTURE

Capital structure of Lunar

Share capital 25%

Reserve surplus 30%

Secured loans 25%

Unsecured loans 15%

Deserved tax 5%

(Table No 4.3 )

FINANCE TURN OVER OF LUNAR

Turn over of the company

FINANCIAL YEAR TURN OVER

2003- 2004 35,00,00,000.00

2004- 2005 40,00,00,000.00

2005 -2006 43,00,00,000.00

2006-2007 58,05,00,000.00

2007-2008 64,00,00,000.00

(Table No 4.4 )

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PRODUCTION DEPARTMENT

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4.3 PRODUCTION DEPARTMENT

Production is the creation of goods and services. It is concerned with terms

forming the inputs in the form of raw material, labour, machinery, men and money in to

output. i.e , goods and services with the help of certain production process . Production

function is the most important function in an organisation around which other activities

of an enterprise via. Marketing, purchasing, and personal etc. revolve.

PRODUCTION DEPARTMENT IN LUNAR

In production department chief is the production manager under him there are

works managers and below them are the supervisors. On getting the projected market

demand for the coming month from the marketing department, the production manager

assisted by the works manager takes steps and makes arrangements for production.

There is also a quality control and inspection wing. All the functions in the production

department are checked by the production manager at the regular intervals.

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STRUCTURE OF PRODUCTION DEPARTMENT

Structure of Production Department

Chart No: 4.4 Production department structure

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Production Manager

Maintenance Manager

Supervisor

Work manager

Worker

Supervisor

PlumberMechanic Electrician


PLANT LAYOUT

1 2

3 4 5 6 7 8 9 10 11

13

12

14 15

1 Lunar sheets unit. 6 Neo mixing unit 11 Raw materials inventory

2 Office 7 strap manufacturing unit

12 Generator room.

3 finished strap unit 8 Sheet pressing room 13 Inventory4 Viking sheetpress 9 Generator room 14 Maintenance

department5 Viking kneader 10 Lunar kneader 15 Engineering room

( Chart no: 4.5 Plant Layout)

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OBJECTIVES

Acquiring an export share of 35% by 208-2009

Set up and establish a laboratory for product testing with in six months.

Increase the turn over by 20% every year.

Attend all customer complaints with in two working days.

Collect suggestion from employees and utilize for improvement.

Introduce atleast one new product in 2 years.

PRODUCTS OF LUNAR PVT. LTD

Lunar Hawai Chappal

Lunar’s Deluxe

Lunar’s Cushion

Lunar’s Dimple

Lunar’s Safari

Active.

Leather Touch

Aerolux Touch

Aerolux – PVC

Lunar’s Lite- EVA

LUNAR UMBRELLA

Children’s umbrella

Two fold umbrella

Three fold umbrella

Gents bent type umbrella

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SCHOOL BAG

These are newly introduced into the company. The bags for both junior and

senior students are available in the market now.

QUALITY CONTROL

There is a quality control inspection wing. They check the product while passing

through various manufacturing process and ensure the quality of the product. Every

morning there is a meeting between the plant manager and works manager. In which

general appraisal will be made of the last days work.

RAW MATERIALS USED IN THE PRODUCTION

Rubber: The most important raw material used in the production is rubber. Two

varieties of rubber are used. Natural rubber and synthetic rubber.

a) Natural rubber: It is the most important raw material used in the

production natural rubber is used in the mixing process. in Lunar natural

rubber is taken from local areas.

b) Synthetic rubber: It is an artificial rubber. This is two types. Neoprene

and Synoprene. Neoprene is used in the mixing. It is very costly than

Synprene.Its function is to give more strength. Synoprene is used in the

mixing. In Lunar synthetic rubber is taken from Korea and China.

Clay: It is used as filler, it is very cheap and very easily available in Kerala, English

India clay provides the clay for Lunar rubbers.

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Pigments and Colours: They are used for giving the pre determined colour of the

footwear. They are used as per need usually organic pigments are preferred the case

of inorganic pigment exceptions being white colour where titanium dioxide and

lithiophone are the pigments used.

Resins and Tackifiers: They are widely used in footwear industry and improve the

addition to take the binding the mineral fillers and rubber that are force enhance the

physical properties of material filled loaded components. Resins improve the

processing capacity and feasibility.

Plasticizers and Softners: These are used in footwear component for

(i) Improving the process ability of raw stock and

(ii) Reduction in vulcanization.

TYPES OF MACHINERY USED IN THE RODUCTION

1. MIXING MACHINE

These machines are of 2 types

a) Kneader

b) Open Mixing Mill

Both are used for mixing there various raw materials. But the capacity and speed of

kneader is higher than the other and it is automatically controlled.

2. HYDROLOIC PRESS

This is used for moulding Hawai sheets, sheets are inserted in to this press and

the required design is moulded on both sides of the sheets.

3. MOULDS

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Hawai sold mould is used for moulding the Hawai sheets strap, 8 pairs of strap

can be moulded at a time.

4. BOILER

It is used for producing required stream.

5. CUTTING PRESS

It is used to cut the moulded Hawai sheets in to required sheets.

5. DRILLING MACHINE

It is used to make the holes in Hawai soles after cutting in to required size.

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Production Process Chart –Chappals

Chart No: 4.6 Production process chart

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1. Dispatch

Raw materialsweighing

Mixing mill kneader

DispatchAssembling Packing

Ageing of 24 hours Sheeting Molding

Raw materials weighing

Mixing mill kneader

Visual examination and lab analysis

Post curingSole cutting

Ageing of 15 days

MoldingSheetingAgeing of 24 hours

Visual examination and lab testing

Sorting defectives

Sole cutting

Trimming2. Upper white part


PRODUCTION PROCESS

The company engaged in the production of high quality light weight Hawai

chapels. The conversion of raw material to footwear involves several processes which

are detailed below. Natural rubber is rolled in to the roller of mixing mill. After

sometime clay is added to the processed rubber and other chemicals are added to this.

Thus we get sheets which are used as the lower blue part of the sole. The upper white

part is also made in the form of sheets. The white is put above the blue sheets. They will

stick together and weighted. The sheets of required size and weight are moulded in the

hydraulic press or in the Hawai sole mould. After moulding the sheets are kept for 14 to

20 days. Then the sheets are cut in to the soles of required size in the cutting press. Then

drilling machine will make 3 holes. After some time the strap are moulded in the strap

press. And Strapsare is inserted in to the sole and are labelled and packed. Then lunar

Hawai chapel is ready for use.

SAFTEY MEASURES

There is an emergency reverse stop for the safety of the workers. In the

emergency situation just pull the stop bar, the machines slowly roll to backward. This is

a new technology developed by the maintenance department in the Lunar factory.

Company provides gloves and masks for workers for their safety. There is a fire

extinguisher and also a first aid box in the company.

INVENTORY MANAGEMENT:

Every enterprise needs inventory for smooth running of its activities. It serves a

link between production and distribution process. There is generally a time lag between

the recognition of a need and its fulfilment. The greater the time lag, higher the

requirement for inventory. The unforeseen fluctuation in demand and supply of goods

also necessitate the need for inventory. It also provide for a cushion for future price

fluctuations.

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RE- ORDERING LEVEL

When a quantity of materials reaches a certain figure then fresh order is sent to

get material again. The order is sent before the material reach minimum stock level. The

rate of consumption, number of days required replenishing the stocks, and the

maximum quality of material required on any day are taken in to account while fixing

reorder level.

Production Department has mainly 3 Sections, Purchase, Production, Stores

On the basis of re order level duly authorized purchase indent is given to

purchase section based on purchasing material. The purchase order is prepared by

purchase section based on the requirement evident from the unlimited through purchase

indent. The purchase order includes the following such as purchase requisition, number

of material description, quantity, rate, total cost, delivery date etc.

The purchase section maintains following records.

(a) Vendor evaluation:

The purchase section maintaining the updating the vendor evaluation records

(b) Purchase order format:

The purchasing section keeps the purchase order format for the further reference

(c) Vendor history registers:

The vendor history registers are also keeps with the purchasing section

(d) List of approved subcontracts:

To know about the approval of the subcontracts the list of contracts keeps with the

purchasing section.

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STORE CONTROL SECTION

The purchase department as per purchase indents produces materials it is received along

with documents like delivery notes, bill of entry and invoice which ever is applicable.

Raw materials and other items are transferred in to quality assurance section for

inspecting the required quality and the status as indicated in the goods received note.

The accepted items are transferred in to the receiving stores and others are sent back to

suppliers for the purpose of efficient inventory management following records are

prepared.

1. Goods Received Notes ( CRN)

2. Bin Card

3. Stock Register

4. Consumption Report.

5. Issuing Notes

6. Follow-Up Notes.

QUALITY CHECKING MACHINE

Lunar Rubbers Pvt. Ltd provides more importance to the quality of products.

For checking or the measuring quality they use a machine called Rheonetor.

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PURCHASE DEPARTMENT

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4.4 PURCHASE DEPARTMENT

Purchase department plays a very important role in an organisation. Its function

is to purchase materials, machines, and tools at the most favourable terms consistent

with maintaining the standard quality. Purchase of material at the right time, in adequate

quantity and quality and at the right price is very important.

PURCHASE DEPARTMENT IN LUNAR

In Lunar purchase department is connected with production department. The

purchase manager is in the charge of purchase of the purchase department. Purchase

officers and storekeepers are there to assist the purchase manager. They will calculate

the requirement of chemicals, verify the purchase order assess plan and purchase items

in consultation with the production manager. When the level of raw material reaches the

re order level, the purchase manager prepares a purchase requisition for raw materials

and it send to the chief executive (MD) for the sanction. Once it is sanctioned the order

is placed. Purchase manager is one who decides from where the materials have to

purchased. There is an easy access to the raw materials fro local sources especially

natural rubber which is abundantly available fro the nearby rubber estate.

When the raw material arrives the quality controller checks its quality and

quantity and verified. It will report to the concerned officer and the bill sanctioned.

Then the raw materials are given to the stores.

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STRUCTURE OF PURCHASE DEPARTMENT

Chart No: 4.7 Purchase Department Structure

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Purchase manager

Executive officer

officer

clerk

Junior officer

Senior assistant officer

Office assistant


FUNCTIONS OF PURCHASE DEPARMENT

1. Receiving purchase requisition.

2. Locating source of supply.

3. Choosing a supplier.

4. Preparing purchase order.

5. Receiving, checking and inspecting materials.

6. Passing of bills of payment.

MAJOR RAW MATERIALS PURCHASED IN LUNAR

Rubber: The most important raw material used in the production is rubber. Two

varieties of rubber are used. Natural rubber and synthetic rubber.

Clay: It is used as filler , it is very cheap and very easily available in Kerala,

English India clay provides the clay for Lunar rubbers.

Pigments and Colours: They are used for giving the pre- determined colour of the

footwear.

Resins and Tacklifiers: Resins improve the processing capacity.

Packing Materials: The company purchases packing materials from Ernakulam

and Trivandrum. The main packing materials are:

1. Sticker

2. Plastic cover

3. Small cartoon

IMK, Adoor 71


Duties and Responsibilities of Purchase Manager in Lunar Pvt Ltd are the

Following

1. Overall responsibility of purchase activity

2. Vendor control.

3. Vendor development.

4. Price monitoring.

5. Timely supply arrangement of materials.

6. Purchase bill verification and recommending payment.

7. Maintenance and control of stock register.

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MARKETING DEPARTMENT

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4.5 MARKETING DEPARTMENT

The American marketing association (AMA) Defines marketing as “ the

performance of the business activates that direct the flow of goods and services from the

producer to the consumer or to the user.”

According to Philip Kotler “ Human activity directed at satisfying needs and

wants through exchange involve sellers, searching buyers, identifying their wants and

making relevant product promoting and strong transporting and distributing them and

negotiating and so on.” It represents the important functional area of business, for the

flow of good and services from the product to the consumer. It helps to the plan and

develops the product on the basis of known consumer needs.

MARKETING DEPARTMENT IN LUNAR

The Lunar Pvt Ltd has well developed marketing department. The marketing

department conducted various meetings to take the decisions regarding the various

activities. The marketing manager presents a report of the previous month’s activities.

These meeting and reports are helpful to study, analyze and control the problems being

faced by the product in the market. They will also assess the target fixed for sales and

compare it with the achievements made. The department conduct studies to explore new

markets and to expand the existing market. The head of the department in consultation

with the managing director takes decision in connection with sales promotion activities,

advertisement etc. Regional sales manager conducts meeting with this junior sales

manager. In this meeting the regional sales manager gets a clean picture of the present

position.

Marketing manager is one who decides the marketing strategies for every major

decision which effecting marketing. Marketing manager takes decision but the chief

executive (MD) takes the final decision.

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Structure Of Marketing Department

( Chart No: 4.8 Marketing department structure)

COMPETITORS OF LUNAR

1. Paragon

2. VKC

3. Eva Hawai.

4. Senor chapels

5. Rubco

The main market leader is Paragon chappals and VKC Pvt Ltd. Lunar has the

third position in the Kerala market. Now the Lunar Hawai have 43% market share in

Kerala..

IMK, Adoor 75

Marketing Manager

Marketing Officer

Sales Officer


THE PRODUCT PROFILE

According to William J Stantson, “A product line is a group of products

indented for essentially similar uses and processing reasonable similar characteristics.”

The product mix is the full list of all products offered for sales by company

Hawai chappal

Umbrella.

School bags.

COMPANY MARKETED VARIETIES OF HAWAI CHAPPALS

1. PVC Product

a) Flighter

b) Aerolux

2. EVC Product

a) Eltee

b) Lunar lite

3. Lunar Cushion

a) Cushion blue.

b) Cushion beige.

c) Cushion black.

4. Deluxe Hawai

a) Lunar deluxe blue.

b) Lunar deluxe green.

c) Lunar deluxe single beige.

d) Lunar deluxe black

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5. Lunar Dimple

a) Lunar dimple blue.

b) Lunar dimple pink.

UMBRELLA

Lunar Rubbers Pvt Ltd has entered in to the umbrella market in the year 1999.

There are 45 varieties of umbrella differing in design (two fold and three fold) and in

colour. Almost all the parts and material required for the umbrella are imported from

the countries like Taiwan, Saudi Arabia. These parts are assembled in various assembly

units.

Lunar introduced one more variety of the umbrella in the name godfather. The

peculiarity of this umbrella is that it is cane framed umbrella, which captured the full

attention of umbrella market.

MARKETING MIX

The combination of marketing methods and programs are known as marketing

mix. There are four elements in marketing mix.

Product mix.

Price mix.

Promotion mix.

Place mix.

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PRICE MIX OF LUNAR RUBBERS

One of the most important and critical area in the marketing management is

the pricing of products. It is the second marketing mix. Decisions of pricing have

considerable effect in marketing. A wrong pricing decision can nullify the effect of all

right decisions relating to the product, promotion and distribution. The price includes

the cost of production and margin of profit. i. e. Lunar Rubbers Pvt Ltd cost plus or

market price policy which is the best approach to pricing.

PROMOTION MIX OF LUNAR RUBBERS

Promotion is “any Marketing effort whose function is to inform and persuade

potential consumer about the availability of certain production or service with

capabilities to satisfy specific human wants”. Advertising, publicity and sales

promotion are the part of the promotion. The goodwill of Lunar Rubbers Pvt. Ltd. helps

to increase sales volume and publicity.

PLACE MIX OF LUNAR RUBBERS

Distribution channels have a vital role especially in the distribution of consumer

goods. The sales of the company are done with the help of privately owned distributors.

The distributor and wholesalers supply the product to various retailers and finally reach

the consumer.

SALES PROMOTION

Sales promotion constitutes a very vital function in case of company which

manufactures consumer goods and consumer durables. Sales promotion is finally

intended to increase the sales. Sales promotion is a bridge or a connecting link between

advertising and sales personal salesmanship. Lunar rubbers undertakes various sales

promotion activities. They are:

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ADVERTISING

It is the major promotional tool the American marketing association defines

advertising as any paid form of non- personal presentation and promotion of ideas,

goods and services by an identified sponsor. It is a form of communication. Lunar

rubbers Pvt Ltd has gone for a massive advertising campaign Media of advertising are,

Television, radio, boards, stickers, banner, cover and outdoor advertisement.

PUBLICITY

The American marketing association defines publicity as any paid form of non- paid

commercially significant news or editorial comment about an idea. Products or

institutons, Lunar mainly concentrating print media publicity.

DEALERS PROMOTION ACTIVITIES

Compliments are provided to dealers as a tool for dealer promotion. Also they

conduct an annual meeting for dealers. They are also promoting customer promoting

activities.

DISTRIBUTION NETWORK OF THE COMPANY

Channels of distribution have a vital role especially in the distribution of

consumer goods. The sale of the company is done with the help of privately owned

distributors. The distributors/wholesalers supplies the product to various retailers and

finally reaches the consumers.

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Distribution Network of Lunar

( Chart No: 4.9 Distribution network )

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Company

Wholesaler

RetailersRetailers

Sub-Wholsaler

Consumers Consumers


MARKETING ACTIVITIES

The various marketing activities are branding, packing, pricing & distribution

Branding

It is an important aspect of product planning. It involves the assignment of a brand

name to the product being offered to the customer.

Lunar Rubbers Pvt Ltd, enjoy a high degree of brand preference among the

consumers. It is said to have high brand equity. High brand equity provides a number of

competitive advantages to the company. The company reduced marketing cost because

of high level consumer brand awareness and loyalty. The company has more trade

leverage on bargaining with distributors and retailers. The main market leaders of

Hawai chapels in Kerala are Parogon, VKC, Lunar, Rubco and Eva. These brands vary

in the amount of power and value they have in the market palce. The popular brands of

umbrella available are Poppy, johns, and Lunar.

The main market of Lunar chappals are Kerala, Tamil Nadu, Karnataka and

Maharashtra.

Packing & Labeling

Once the decision taken on the brand we have to consider the design and makeup of the

packages. Packing is the activity of designing and producing the container or wrapper of

a product Label is a part of the product. It gives the verbal information about the

product and the seller. Curtains are reusable bag printed with advertisements are used

for packing the Hawai chapels and umbrella manufactured by Lunar Rubbers Pvt. Ltd.

IMK, Adoor 81


Pricing

In setting the price of the product, the company should follow the procedures given

below.

1. The company should carefully establish it’s marketing objectives such

as survival, maximum current profit, and market skimming or product

quality leadership.

1. The company determines the demand schedule, which shows the probable

quality purchase per period at alternative price levels. The more inelastic the demand

the higher the company can set its price.

2. The company establishes how its cost varies at different output levels and with

different output levels and with different level of accumulated production experience.

3. The company examines the competitive price as a basis for positioning its own

price.

4. The company selects one of the pricing methods.

Markup pricing, target return pricing, perceived value pricing and sales bid pricing.

5. The Company selects its final price expressing it in the most

Effective psychological way, co-ordinating with other marketing mix elements.

IMK, Adoor 82


CHAPTER VSWOT ANALYSIS

IMK, Adoor 83


5.1 SWOT ANALYSIS

In SWOT analysis the strength, weakness, opportunities, and threats of Lunar

Rubbers Pvt Ltd., Thodupuzha is analysed and noted.

Strengths

Third largest manufacture of Hawai chappals in Kerala.

Since Lunar’s product are manufactured as per the strict quality guidelines, they are

able to make high quality products.

Easy availability of raw materials helps the company to manufacture the product at

lower prices.

Company has a policy of continuous improvement and innovation in the products,

which enables it to maintain high market share.(43% of Kerala market).

Frequent meeting between owners employees helps to build a good employer –

employee relationship.

An ISO 9001-2000 Certified Company.

WEAKNESS

No special educational qualification is considered during recruitment of factory

workers.

Less advertisement of lunar umbrellas

Lunar umbrellas can’t attract the children.

OPPORTUNITIES

Since the products are used in all walks of life the company can target all type of

income groups.

The company can extent the market in to more foreign countries.

IMK, Adoor 84


Since the company has introduced different varieties of product it help the company

to enlarge its market share.

Globalization of the economy has helped the company to overcome operational

restrictions and to make strategic alliance.

THREATS

Increasing competition due to liberalization of economy.

Fast changing technology.

The young generation exhibits less interest in buying Lunar foot-wears.

Well designed products from other companies.

IMK, Adoor 85


CHAPTER VI

MICHAEL. E. PORTER’S FIVE

FORCE ANALYSIS

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6.1 PORTER’S FIVE FORCES – THEORETICAL PERSPECTIVE

Introduction

The model of the Five Competitive Forces was developed by Michael E. Porter

in his book Competitive Strategy: Techniques for Analyzing Industries and

Competitors“ in 1980. Since that time it has become an important tool for analyzing an

organisations industry structure in strategic processes. Porter’s model is based on the

insight that a corporate strategy should meet the opportunities and threats in the

organisations external environment. Especially, competitive strategy should base on and

understanding of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every

market. These forces determine the intensity of competition and hence the profitability

and attractiveness of an industry. The objective of corporate strategy should be to

modify these competitive forces in a way that improves the position of the organisation.

Porters model supports analysis of the driving forces in an industry. Based on the

information derived from the Five Forces Analysis, management can decide how to

influence or to exploit particular characteristics of their industry.

Porter's five forces include three forces from 'horizontal' competition: threat of

substitute products, the threat of established rivals, and the threat of new entrants; and

two forces from 'vertical' competition: the bargaining power of suppliers, bargaining

power of customers

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The Five Competitive Forces are typically described as follows:

1 Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to provide

goods or services.

Supplier bargaining power is likely to be high when:

· The market is dominated by a few large suppliers rather than a fragmented source

of supply,

· There are no substitutes for the particular input,

IMK, Adoor 88


· The suppliers customers are fragmented, so their bargaining power is low,

· The switching costs from one supplier to another are high,

· There is the possibility of the supplier integrating forwards in order to obtain

higher prices and margins. This threat is especially high when

· The buying industry has a higher profitability than the supplying industry,

· Forward integration provides economies of scale for the supplier,

· The buying industry has low barriers to entry.

In such situations, the buying industry often faces a high pressure on margins from

their suppliers. The relationship to powerful suppliers can potentially reduce strategic

options for the organisation

2 Bargaining Power of Customers

Similarly, the bargaining power of customers determines how much customers can

impose pressure on margins and volumes.

Customers bargaining power is likely to be high when

They buy large volumes, there is a concentration of buyers

The supplying industry comprises a large number of small operators

The supplying industry operates with high fixed costs,

The product is undifferentiated and can be replaces by substitutes

Switching to an alternative product is relatively simple and is not related to high

costs

IMK, Adoor 89


Customers have low margins and are price-sensitive

Customers could produce the product themselves

The product is not of strategically importance for the customer

The customer knows about the production costs of the product

There is the possibility for the customer integrating backwards.

3 Threat of New Entrants

The competition in an industry will be the higher, the easier it is for other companies to

enter this industry. In such a situation, new entrants could change major determinants of

the market environment (e.g. market shares, prices, customer loyalty) at any time. There

is always a latent pressure for reaction and adjustment for existing players in this

industry.

The threat of new entries will depend on the extent to which there are barriers to entry.

These are typically

Economies of scale (minimum size requirements for profitable operations)

High initial investments and fixed costs

Cost advantages of existing players due to experience curve effects of operation

with fully depreciated assets

Brand loyalty of customers

Protected intellectual property like patents, licenses etc.

Scarcity of important resources, e.g. qualified expert staff

Access to raw materials is controlled by existing players,

IMK, Adoor 90


Distribution channels are controlled by existing players

Existing players have close customer relations, e.g. from long-term service con-

tracts

High switching costs for customers

Legislation and government action

4 Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices of

better performance parameters for the same purpose. They could potentially attract a

significant proportion of market volume and hence reduce the potential sales volume for

existing players. This category also relates to complementary products.

Similarly to the threat of new entrants, the treat of substitutes is determined by factors

like

Brand loyalty of customers

Close customer relationships

Switching costs for customers

The relative price for performance of substitutes

Current trends

5 Competitive Rivalries between Existing Players

This force describes the intensity of competition between existing players (companies)

in an industry. High competitive pressure results in pressure on prices, margins and,

hence, profitability for every single company in the industry.

Competition between existing players is likely to be high when

IMK, Adoor 91


There are many players of about the same size

Players have similar strategies

There is not much differentiation between players and their products; hence,

there is much price competition

Low market growth rates (growth of a particular company is possible only at the

expense of a competitor)

Barriers for exit are high (e.g. expensive and highly specialized equipment

6.2 HOW FIVE FORCE AFFECT LUNAR RUBBERS PVT LTD

1. Bargaining power of suppliers

The main raw material used for the production in Lunar is rubber. It is of two

type natural rubber and synthetic rubber. These are widely available in Kerala market

itself. Company collect rubber from Idukki, Kottayam, Pathanamthitta , Wayanad

districts.. Other raw materials like clay, pigments and colours are also cheaply

available.

The bargaining power of suppliers on Lunar Pvt Ltd is not so much prominent because

There are number of suppliers.

IMK, Adoor 92


Raw materials are cheaply available.

Switching cost from one supplier to another is low.

There are enormous fragmented source of supply.

Forward integration of supplier is difficult.

2. Bargaining power of customers

Bargaining power of customers is of very high while considering Lunar Rubbers Pvt

Ltd. This is because of following reasons

The main competitors of Lunar Rubbers Pvt Ltd are producing same type of

products exactly of Lunar’s. So the switching cost of customer from one brand to

another is very low. It increases their bargaining power.

Lunar’s products are in a price range which will mostly purchased by the people

who are highly price sensitive.

In footwear, bag. Umbrella industries customers know the production cost of the

products. it increases the bargaining power of suppliers.

There are local producers in umbrella and bag industries. So the company can not

increase the price from certain level.

3. Threat of new entrants

Threat of new entrants in footwear industry is very high because

The footwear industry need high initial investment and fixed cost.

Customers are brand oriented.

Protected intellectual property like patents, licenses etc- for example Lunar uses

TWT (two way thread) technology, Paragon produces footwear for diabetic

patients.

Distribution channels are controlled by existing players.

The companies like VKC, paragon, lunar, have a long history in footwear

industry. So they have a close customer relationship.

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4. Threat of substitutes

This force has a predominant effect on Lunar rubbers Pvt Ltd because of

following reasons

Eventhough Lunar have brand-equity, its products have close substitutes in the

industry. So the switching cost for the customer is very low. For example, in case of

footwear products, Paragon, VKC, Eva , Senor , Rubco have similar products as

Lunar. In case of umbrella industry Popy, Johns, Colombo, are producing very close

products.

The products like shoe, Canvas, sandals are likely to be close substitute for Lunar

chappals.

Different kinds of footwears by the result of new trends in footwear industry is also

a threat.

5. Competitive Rivalry between Existing Players

The footwear industry is highly competitive in Kerala because

more than five companies are actively involving in footwear production. They are

1. Paragon

2. VKC

3. Lunar

4. Senor

5. Eva

6. Rubco

These companies have almost similar strategies

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There is not much differentiation between players and their products, hence, there

is much price competition

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CHAPTER VIIFINDINGS AND SUGGESTIONS

7.1 FINDINGS

In Lunar Rubbers Pvt Ltd., there is no separate department which deals with

management information system. The concept of modern MIS is not yet introduced

in Lunar Rubbers

Lunar Rubbers Ltd Company gives more importance to the quality of the product

The major part of the income is contributed by the Lunar Hawai chappals

Sales and distribution strategies are comfortable

Workers are almost satisfied

IMK, Adoor 96


In case of umbrellas even though it is of high quality than its competitors it is

lagging behind in sales, due to its poor advertisement techniques

Lunar umbrellas can’t attract the children

No special education qualification is considered during recruitment of factory

workers

7.2 SUGGESTIONS

Better media planning with more concentration on television is necessary.

Make advertisement with changing trends and preference of the consumers.

Lunar shall provide sales promotional schemes to attract ore domestic customers.

Technology up gradation shall be done in the production process and in the cutting

unit.

Measures shall be taken to promote personal selling through dealer incentives.

Recruit educationally qualified workers.

Facilitate department with management information system.

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CHAPTER VIIICONCLUSION

8.1CONCLUSION

Lunar is a name that stands for quality Hawai footwear. This company is mainly

producing Hawai chappals and umbrellas. Lunar products are manufactured as per strict

quality guidelines.

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The commitment and efficiency of employees helped Lunar products to capture

the highly competitive market. Product quality enables the organisation to get

prominent place among the competitors.

When analyzed various departments we can understand the dedicated employees

are the key factor in Lunar’s success. The long vision of management helped to win the

competitive market. The marketing strategies and financial decisions are sufficient to

capture the market and lunar have production unit.

The company is now progressing full automation to keep in pace with the expansion

programme for servicing the escalating domestic & international demands

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BIBILIOGRAPHY

Books

1. Aswathappa K. 1999, Human Resource & Personnel Management

Tata McGraw – Hill Publishing Co. Ltd.

2. Kothari C.R. 2004, Research Methodology Methods&Techniques

New Age International Publishers.

3. Kotler Philip 2002, Marketing Management

Prentice – Hall of India Pvt. Ltd.,

Websites:

1. www.lunars.com

2. www.google.com

IMK, Adoor 100

http://www.lunars.com/

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