Bata Om Project

7/28/2019 Bata Om Project

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Acknowledgement

On completion of our report, we want to thank first and foremost to Allah the Almighty who

gave us courage and strength to do so.

Then we want to thank our most respected instructor Mr. ShafqatUllah, who really guides and

motivate us to carry our work with real dedication.

Then we want to thank Mr. Shahryar khan (Manager Quality Assurance in Bata,Pakistan) for

giving his precious time to us and sharing with us the information and expertise and letting us

experienced and learned great knowledge.

Regards,

Ali Ahmed Soomro

Umair Ahmed

Jahanzeb Hussain Qureshi

Sumair Khan

Humza Shezad


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Company ProfileBata Pakistan Ltd was formed in Pakistan in 1952. It was a newly growing concern allover the world but in Pakistan it was established its fleet with in very short time. It wasvery tough decision for the Bata International to start its business in a country that wasnewly established. But Batas decision was quite right because there was not so tough competition in Pakistan at that time which helped them to make their foot more strong.Now Bata Pakistan is not only providing the quality shoe with in Pakistan but is alsoexporting its major portion of production all over the world. Within the country Bata isfacing the competition with Service Industries Ltd and other private companies.

According to the survey almost 89 % of the market is covered by the other organizations

and 6 % by Service and 5 % by the Bata Pakistan Ltd.

Brands of BataMarie ClairePowerBubble GummersNorth StarSchollWeinbrennerBata Comfort

PRODUCT DESIGN

They select their product designs according to their customer needs. And they arecontinuously bringing changes as the customers demands for new products. They are using the latest equipment and machinery to meet the customers demand and toprovide them the product they need. Bata Pakistans Production Division is going extramiles to meet ever growing production requirements of PU direct pouring and otherfootwear to cater the needs of our worthy customers. During the current season, theoverall production is going 120% against estimates and 130% against last year.Similarly in the area of PU direct pouring, 123% production has been achieved against

the estimates and 204% against last year. This milestone in production has been aresult of restructuring of Maraka and Rubber Factories. A better production planning,maximum utilization of human resources and teamwork all have been put togetherstrategically to achieve competitive advantage in Bata products over the competition inthe area of quality, prices and sales appeal.

LOCATION


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The manufacturing plant of Bata shoes Pakistan is located near Lahore in Batapur, nearthe canal road Lahore. The location at this area has made the transportation quite easy.The raw material is easy to transport and the finished products are easily supplied to theretail stores and distributors.

DESCRIPTION OF VARIOUS DEPARTMENTS

There are many departments in BPL which are described below :

1. Personal department2. Finance department3. Purchasing department

Local Purchase

Imports

4. Marketing department5. Other department6. Tannery7. Production department

Leather factory

Plastic factory

Rubber factory

8. Designing department9. Laboratory

10 Merchandizing department

Seasonal planning

8 week forecast

4 week forecast

1 week forecast

11 Costing department12 Training department13 Distribution department

PERSONNEL DEPARTMENT

The organizations effectiveness depends not only on how it is structured but also onhow well its personnel are selected, trained, directed motivated and evaluated. The


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personnel department of Bata shoe organization well aware of its responsibilities selectsthe qualified, experienced, hardworking, semiskilled and unskilled persons afterobserving them from different angles. Once the person selected, he or she is motivatedthrough several incentives .The department already has a tradition to offer on the jobtraining to the personnel .A semi skilled or unskilled person while in learning process

enjoys all the benefits offered by the company to all the skilled employees. Employeesare encouraged developed and trained to become more capable and competent in theirjobs so that they can confront to the forthcoming challenges and problems .Severallectures, development programs, and seminars are arranged for the employees in thisrespect. Thereafter employees performances are also evaluated .The department futureorganizes different courses throughout the year to train and develop the personnel.Moreover the company sends many of its personnel to attend local courses organizedby the local institutes. It also sends every year some of its personnel to attend outsidecourses organized by the Bata limited, Toronto and Bata shoe companies all over theworld.

The company invites its employees to give their suggestions regarding improvements inwork methods, saving on materials, improvements in production and sales departments.Bata Pakistan limited publishes a forthrightly bulletin to inform the employees aboutevents took place, development, sales as well as some other items of interest. Somesocial; happenings and educational instructions about discipline, rules and regulations,housekeeping and welfare are broadcast every week for the employees.

For motivational purpose sometimes personnel department assigns a challengingproject to a person. Similarly some sort of other incentives and goals are given to thepersonnel for the purpose of motivation and performance evaluation. All these training,developments and motivational practices ultimately contribute to the overall progress of

the company.

FINANCE DEPARTMENT

Finance, another crucial department of Bata Pakistan Limited, deals with the financialaspects of the company. That department every year prepares aggregate budget of thecompany and that budget is further broken-down into several sub-budgets. As far assub-budgets are concerned each department of company is given the target of annualbudget and if any department wants deviate from the finance department to do so .Thefinance department keeps records of receipts payments, income and expenses of thecompany .That deals with the wages and salaries of the employees .It also has a

responsibility to handle the assets and liabilities released issues .Furthermore ,it plays avital role in the preparation of income Statements ,Balance Sheet and Tax documents.

PURCHASING DEPARTMENT

Purchasing department headed by Purchases Manager, deals with the purchases ofraw material (excluding hides and skins) that is ultimately used to manufacture differentstores of products. Actually that department not only maintains records of material


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essential to produce the products but also considers the average weekly consumptionof one particular material in factory so that production process may not be hampereddue to non-availability of material. That also places orders for instantly needed materialsand keeps record of goods on way. Purchasing department acquires raw materialthrough two channels.

Local Purchases

Imports

LOCAL PURCHASES:

The company mostly acquires raw material from different business people dwelling inPakistan. The company through local purchases on the one side encourages the localbusiness people, on the other side endeavors to safe valuable foreign exchange.Generally, its local purchases are Buckles, Straps, lashes and chemicals that are usedin production of leather, rubber, P.V.C. BSO while working for the progress of the

country, sometimes suffers due to preference given to the local purchases because thelocal businessmen dont possess the quality that can easily be assessed from imports.Instead of having knowledge of all these aspects still the company prefers to buy fromlocal business community.

IMPORTS:

As mentioned earlier the company makes all out efforts to get raw material withinPakistan, then no other option left except the import of that required material from othercountries. The imports are done through letter of credit which is the safest way of doinginternational business. Nevertheless, before placing an order of import, purchasing

department makes comparison list of prices, advantages and disadvantages associatedwith the prospective purchases of material from one businessman to anotherbusinessman. Finally business whose rates are appropriate and yielding moreadvantages is given order to ship that specific merchandise in stipulated time.

Marketing Department

Marketing programs that identify and satisfy customers needs have always been a toppriority in the B.S.O. As a result, entirely new types of selling systems have beencreated and standards developed that have influenced the shoe business worldwide.These have resulted in marketing policies and guidelines being laid down to assist thecompanies in training personnel and introducing modern marketing techniques. Theyhave helped to establish one of the most effect retail distribution systems in internationaltrade, which although standardized, retains enough flexibility to encourage culturaldiversity. Guidelines have been written covering a wide range of subjects, includingstore locations and lay out, design standards, merchandising, inventory control and stafftraining. Which has led to cooperation between the companies and, at the same time,stimulated and encouraged trade between regions and countries? Product developmentand the introduction of brands is another aspect of marketing. Because of the


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importance placed on marketing, standards and programs are constantly beingimproved and updated through seminars and conferences.

The most important meeting of the year takes place each spring in Europe, when morethan 200 participants from product development, marketing, retailing and personnel

attend Shoehorn of one week. If there is a single forum, a point at which the Bata yearis focused, it is the world meeting at Shoehorn.

Shoehorn was originally a shoe conference to which each company brought its bestshoes: from these were selected the shoe lines the organization would sell in comingseasons. Judging the shoes provided a natural, competitive stimulus for the companies,and, as a result, the quality and range of shoes steadily improved year after year.

As Shoehorn matured, it remained essentially a shoe conference, but graduallyexpanded to included satellite conferences in marketing and retailing. Exhibition areaswere expanded to enable the companies to display their most creative work to each

other. As store standardization grew in importance, fully staffed, operating stores werebuilt to show the latest features in design and selling methods. And outside experts in awide range of business areas were brought in to leaven the mix.

The evolution of Shoehorn coincided with fundamental changes in world markets.Fashions and tastes were becoming more universal: styles in Europe were on thestreets of Bangkok or Sao Paulo within weeks sometimes sooner and customers wereresponding to the same marketing stimuli.

In the late Seventies, a complete marketing and advertising program was developedunder the slogan Bata understands Shoes, and offered to all the companies. The

success of the program which ran in newspapers all over the world at the same timewas instantaneous, and today the symbol, an open fan of shoes, is commoneverywhere in the world.

OTHER MATERIAL ACQUISTION

Bata shoe organization acquires raw material (skins and hides) from different parts ofthe country. These purchased skins and hides are transferred to warehouse whereapplication of several chemicals avoids the risk of erosion and enhances the storagelife. Whenever demand arises these skins and hides are transferred from warehouse to tannery.

TANNERY

In tannery, skins and hides undergo the following processes.

i) Soaking

ii) Liming


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iii) Deliming

iv) splitting

v) Drying

vi) Dying

SOAKING:

This is a process where water and chemicals are applied and original position (whenthese were flay of from the animals) of these skins and hides is tried to brought lack.

LIMING:

In this process several chemical are injected in hides which become slight. These limed

and moisturized hides can be kept in stores for a long time. These chemicals injectedhides are also called wet blue leather.

DELIMING:

This process is contrast to the liming process where injected chemicals in limingprocess are dejected from hides so that these can be utilized for shoe manufacturingpurpose.

SPLITTING:

In this process skins and hides under-go splitting to reduce corpulence or thickness.

DRYING:

Here drying up process of skins or hides is done. Mostly two or three methods are usedto dry up the skins and hides.

DYING:

The needed pigment or color is given to the skins and hides in this process. Generallyblack, dark brown and light brown colors are given to the skins and hides. The dyingprocess ends up with the finished from of leather.

Finished leather is transferred to leather store wherefrom it is forwarded to leatherfactory according to the requirement of this unit.

PRODUCTION DEPARTMENT


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LEATHER FACTORY

Leather factory consists of several departments, is a crucial mechanized unit of Batashoe organization where different components of the shoe are prepared andcombinations of these components ultimately produce the shoes. Although leather

shoes are produced in leather factory yet two types of soles are used in manufacturingleather shoes.

i) Rubber sole

ii) Leather sole

If the rubber sole is required to produce a leather shoe that sole is acquired from rubberfactory. On the other side if leather sole is required it is entirely produced in leatherfactory. The latter case happens rarely because most of the time rubber sole is used inleather shoes.

The entire leather factory has been divided into several departments to prepare differentcomponents of leather shoes. In one department different pieces are taken from leathersheet and in another department these pieces are tailored on the sewing machines.

Another department places buckles straps etc. Another department is bewitched infinishing and removing toothed edges. In prices these sorts of process are done inleather factory and ultimately these diversified components are collected together whichmakes the upper side of shoe attached buckles, straps, ties etc. The point of notice isthat whole process in done quite and sewing are skillful and well of experienced,similarly minor faults are not skipped. The process of upper attaching with the solebegins right from here. Both the components (upper and sole) are placed on the

conveyor and the labors are busy to glue the take both the components and attachthese components to each other on the pressure machine, consequently, shoe take itsultimate fabrication.

Although the whole shoe making process ends up here yet shoes are not supplied topacking department rather these are sent for quality control checking. After checkingand scrutinizing laboratory approves to transfer these shoes to packing departmentwherefrom these shoes are forwarded to distribution department.

RUBBER FACTORY

Rubber factorys process are same as that are in leather factory the only differences are(i) In the rubber factory rubber shoes are manufactured whereas in the leather factoryleather shoes are manufactured (ii) In the leather factory lasts of wood or iron metal areused whereas a aluminum lasts are used in the rubber factory. The daily production ofrubber factory in about 31,000 pairs of shoes.

DESIGNING DEPARTMENT


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Bata Shoe Organization always keeps eyes on the changing circumstances, fashions,trends as well as preferences of the customers. However as changes take place inmarket. Bata is also required to cope with metamorphosis in market conditions with thechanges in product line and changes in designs of the products. Therefore BataPakistan limited has poised designing department where the processionals re utilizing

their inherent talent.

The professionals are also sent abroad for training every year to attend designing andother international seminars. This gives the first hand opportunity to survey new trendsin the world market and to distill the best of these in their own designing for thecustomers.

LABORATORY

Bata Shoe Organization has its own laboratory where professionals examine the qualityof materials and ultimate products. Each new brand first checked in the laboratory and

after the confirmation the production starts. The laboratory also conducts systematicresearch med at improving manufacturing process at Batapur.

MERCHANDISING DEPARTMENT

Merchandising department occupies the back bone place in the entire production ofBata Shoe Organization. That department shows whole planning for production.

i) Seasonal Planning

ii) 8 Weeks Forecast

iii) 4 Weeks Forecast

iv) 1 Week Freeze

SEASONAL PLANNING:

This sort of planning is done two times in one fiscal year, besides factory management,the store management also participates and determines what would be producedcoming season.

8 WEEK FORECAST:

Eight weeks before the start of production, management again gets together. Ifmanagement anticipates any amendment is required they do it. Here production relatedissues are profoundly analyzed and discussed.

4 WEEK FORECAST:


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Again 4 weeks before the start of production the raw material production facilities,production related issues and difficulties are seen and discussed. Furthermore, it is triedto pave the way for smoothes production.

1 WEEK FREEZE:

That is the last stage of planning where all the production related issues are finalizedand production orders are issued one week before actual production. After that nochanging in production is possible.

Merchandising Department considering demands and order from different stores givesgreen signal to distribution department to fulfill the orders.

COSTING DEPARTMENT

MAIN OBJECTS OF COSTING:

To provide a forecast of the estimated result on:-

a) Any particular shoes

b) The total factory half year production plan.

To provide a major control over all sections of business by comparing actual results withestimated results and taking corrective action where necessary, using the latter asmeasure of efficiency.

To reduce costs, while maintaining or improving quality. The basis of all their costing isthe seasonal production and sales estimates, which tells the production, deputies andprice and profit, adrift, article-wise.

The retail sale price of shoe comprises of:-

a) Material

b) Wages

c) Expenses or (O/Heads). Gross Margin.

The total of these makes the retail sale price.

SUPPLY CHAIN MANAGEMENT

Bata is using its raw materials from its different suppliers. Some of the suppliers arelocal while some are from Indonesia. Along with their own production, they are also outsourcing for some of their products. They are keeping a check on the quality of the


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products from outsourcing and using their own brand name. The raw material comingfrom their suppliers are stored in the warehouses. These raw materials are then movedto the production area, where the production is being done and the finished goods aremoved towards warehouse again for storage after proper quality inspection. They aretheir own distributers and they have their own stores all over Pakistan. They have four

types of store concepts.

City StoreThe Bata City Store gives you unique shopping experience as it showcases the latestcollections for footwear of local and international brands. The store ambience isdesigned to create a lifestyle store that reflects and responds to your needs andexpectations. The Bata City stores are located in top shopping malls in big city centers.

Family storeBata is the world's leading family chain thanks to the wide assortment of every fashionfootwear available in our stores. The products are primarily the Bata brand, with a

carefully selected assortment of articles from both local and international brands.

SuperstoreBata Superstore offers a wide assortment of fashion, casual and athletic for the entirefamily. Located primarily in urban and suburban shopping center, these spacious storesoffer the best value by providing good quality shoes at great prices. Service is fastthanks to a self-selection shopping environment with qualified staff to serve and assist.

Factory storeFactory stores are the largest and the most value-oriented stores of our retail chain.They are ideally located in power centers, commercial parks and outlet centers witheasy parking facilities. The product selection offers more than 1,000 styles of ladies,men, children and sport shoes with related accessories and apparel sold at attractiveprice points. It is based on a self-service concept with helpful staff available for serviceat any time.


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It appears to me that Bata was very far in the direction of micro managing. I do notbelieve it would have been much fun to work for. But it would have been a rewardingexperience, not just from the point of view of finances, but rather like having a verydemanding teacher. You do not enjoy the experience at the time but you look back onthe experience with a certain fondness. You realize that you grew under the stress; thatyou were stretched and it was good for you. Bata tried to make the need for such micro-management less by the way he developed his system for setting pay and rewards. He

said: "I was seeking a method which would work automatically as the sun rises and thesun sets." He wanted to windup the company and then let it run without his attention. Inthis system, every work unit was engaged in 'buying' and 'selling' goods and services toand from other work units. The prices were established by a central accounting officeand were not negotiable. The 'customer' for the product or service dictated the qualityand schedule. Naturally the setting of these prices was subjected to considerablediscussion and debate. However, all of the facts and figures used in setting the priceswere available to the work unit so they had a basis for their side of the debate. Theprices were set with due regard for prices of similar products which might be availableon the open market. Work units were not constrained to buy only from within thecompany. What made the Bata system different from other methods of cost accounting

was the agreement that if the workers could devise an improved method, which reducedwaste, improved times of delivery and produced a profit beyond expectations, theworkers could share in this profit. In other words, Bata produced a system whichencouraged each work unit to become more entrepreneurial. Bata had a larger purpose.He intended for each worker to become much more conscious of the economics of thefactory, to relate the results of the enterprise to his own fortunes and to become a moreresponsible guardian of wealth. For Bata the system of internal transacting was more


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than a way to run the company; it was a way to train people to become fiscally

responsible in their own lives.

Conclusion:

In brief, Bata Pakistan is doing quite good in their business, as we have already seenhow well they are managing all their departments, and how effectively and efficientlytheir departments are working with great cooperation, by managing their intellectualcapital and motivating them, and having advantage of being in this business for a verylong time, they are operating like all the other well-established firms are in theirrespective marketing, they are able to identify and satisfy their customers needs anddemands as they are in the market for a very long period of time and still competing withall the other well-known brands of the world, which describes how well they aremanaging their all operations till now, they are a big company having several brands,they know what forecasting methods to use for every department, so after analyzing

their all operations and performance we can conclude by saying that whatever they aredoing in their all departments is best they could do relative to the resources available tothem, as we have seen above that BSO is using Seasonal Index Approach for thepurposes of forecasting the demand, the seasonal planning is done two times in onefiscal year, factory management and store management participates and determineswhat would be produced coming season. They also use Eight week forecast i.e. eightweeks before the start of production, management again gets together. If managementanticipates any amendment is required they do it. Here production related issues are

profoundly analyzed and discussed.Thenagain 4 weeks before the start of productionthe raw material production facilities, production related issues and difficulties are

observed and discussed.Then theres a 1 week freeze thisis the last stage of planningwhere all the production related issues are finalized and production orders are issuedone week before actual production. After that no changing in production is possible.Then there comes costing department which is obliged to provide a forecast of theestimated result on any particular shoes, the total factory half year production plan, toprovide a major control over all sections of business by comparing actual results withestimated results and taking corrective action where necessary, using the latter asmeasure of efficiency, to reduce costs, while maintaining or improving quality. The basisof all their costing is the seasonal production and sales estimates, which tells theproduction, deputies and price, profit, adrift, article-wise. The supply chain of BSO isvery well-organized, first they analyze their all alternatives for purchasing raw material,hides and skins, and then they purchase supplies from the supplier which suits best toBSO following all the criteria they use, best quality with minimum cost, then hides andskins goes to tannery, where it is transformed in to leather, then this goes to BSOproduction department, where leather shoes are produced in leather factory, and ifrubber sole is required then it is acquired from rubber factory, then there is also plasticfactory, which produces PVC for Bata shoes. After production, the finished productsthen go to Bata Laboratory, where they are checked for the desired quality, and thenfinally shoes go to Bata owned retail stores for the customers. After seeing all theiroperations and activities like forecasting, purchasing raw material, production, costing,


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Quality control, and distribution, we can say that BSO is carrying out its all operationsvery well, because they are achieving what they desire and they are still in the growingphase, they are still growing their customers, and all of their methods for carrying outdifferent activities and operations are efficient and effective, like while purchasing rawmaterials they analyze all their alternatives, and select the best from those, and

forecasting methods they use are in accordance with the type of business they are in,as they use seasonal indexing method for forecasting the demand. And finally, theydont have any distributor as they have their own retail stores.

Bata Om Project

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