APRACTICE SCHOOL REPORT

ON

“How do Retail Organization Measure Employee Effectiveness”

and

“Study the Existing Material Handling Equipment’s and analyze its Financial

and Cost aspect.”

At

“ADHIYA”

Submitted byMS. SHARON C. RAJU

[Batch No. 2014-16]

MBA SEMESTER II (MAY 2016)

INDEX

PROJECT A PROJECT BCompany

Profile

Study of Retail Environment Study the Existing Material

Handling Equipment’s and

Analyze its Financial and Cost

aspect

Organogram Study of Information System Process of the Organisation

by Process Costing

SWOT Linear Programming Model Cost & Finance of

Equipment’s

How do Retail Organization

Measure Employee

Effectiveness

Findings

Conclusion

Bibliography

Company Information

Business Name Manilal Stores

Brand Name Adhiya

Total number of Employees Approximately 200

Primary Line of Business School and Industrial Uniforms

Type & No of machines Sewing Machines - 100

They Serve in Gujarat, Maharashtra, Rajasthan,

Jharkhand and Karnataka

Partner Mr. Anish Adhiya and others

Company Profile

“Adhiya” was established in the year 1939, in the name of Manilal Stores.They offer School and Industrial Uniforms. In the year 2007 they startedtheir own designing studio and in 2012 they came up with a new deliverysystem with the launch of this E-commerce website.

They are the first uniform company to launch e-commerce website, inGujarat, with their new brand name “Adhiya”. As on date they have a fullyautomated factory carrying the full procedure from cutting to stitching andfinishing of the garment and nine outlets in the city as well as in other citiesof Gujarat, such as Bardoli and Vapi.

The factory has the capacity to manufacture over two thousand garments aday. They manufacture products like shirts, shorts, skirts, pinafores,blazers, etc. and they trade products like belts, shoes, ties, socks, bags etc.from other manufacturers.

Company’s Mission

“To provide uniforms, the best in quality & comfortable to children”

Organogram

Active Partner

CEO

Management Team

Production Manager

Marketing Manager

Purchase Manager

Factory & Godown

Handles Customers

Contacts Vendors

SWOT Analysis

Strength

• Use of ERP system helped to know the availability of the product easily without searching it manually

• Launching of E-commerce website helped to reduce the rush of customers

Weakness

• Negligence or delay in placements of orders, by the customers, may lead to non-fulfillment of the same in time.

• Even after having so many employees, when more orders come it becomes a big problem to manufacture so many clothes on time

Opportunity

• New opportunities are new customers & every new day is challenging for them

• Continually look for new sales opportunities

Threat

• Schools changing the uniform without informing (deadstock) lead to huge loss.

Project –A

Study of Retail Environment

Meaning of Retailing

Retailing

Retailing means “Every sale of Goods and Services to final

consumer” – Food products, apparel, movie tickets; services

from hair cutting to e-ticketing.

The players involved in this act are known as retailers. Retailers

can be manufactures, distributors or wholesalers

Wholesaler

A wholesaler is an intermediary entity in the distribution channel

that buys in bulk and sells to resellers rather than to consumers.

Manufacturer

The process of converting raw materials, components, or parts

into finished goods that meet a customer's expectations or

specifications.

1. There is direct end-user interaction in retailing

2. Final consumers make many unplanned or implusivepurchases

Large % of customers do not look at ads before shopping

They do not prepare shopping list

Make fully unplanned purchases

Retailer’s ability to forecast, budget , sufficient personnel on the selling floor becomes difficult

3. Functional

Price, convenience and store experience are functional characteristics that make up a strong retail brand. These functional characteristics are common to almost all retail stores.

CHARACTERISTICS OF RETAILING

Major Retailer Types

Specialty store

Department store

Supermarket

Convenience store

Discount store

Off-price retailer

Superstore

Catalog showroom

Franchising – Franchising is a form of licensing in which

franchiser provides the exclusive rights to sell its products

and/or services for a specified period of time in a specified

geographical area. Franchising actually is a French word that

means honesty or freedom.

Retail Environment of Adhiya

Adhiya is a retailer which has retail outlets of uniforms, in the

name of “Manilal Stores” in Surat, which plays an

intermediator role between the manufacturer and the

consumer.

The outcome of the best of marketing procedure:

Marketing helped them in increasing the volume of sales.

By doing research function , they found the requirements of

the customers, identify potential customers, Understanding

your existing customers, to know the targets for areas such as

growth, sales and the introduction of new products/services.

The customer get satisfied by adopting better quality

It helped for attracting new customers to buy their product.

How Adhiya discovers new customers?

A market is a group of potential customers with similar needs who are willing to

exchange something of value with sellers offering various goods and services

that can satisfy these needs. The marketer has the option of either approaching

the entire set of customers with a uniform marketing approach or adopting a

differentiated approach for different sets of customers. So Adhiya uses

Customer Segmentation &.Target marketing.

Adhiya also do product differentiation strategy and segmentation to attract the

right customer.

It helped Adhiya to reduce the risk of deciding to whom their product to be

marketed.

Segmentation- A market segment consists of a group of customers who share a

similar set of needs and wants. Rather than creating the segments, the

marketer’s task is to identify them and decide which one to target. Segment

marketing offers key benefits over mass marketing. The company can offer

better design, price, disclose, and deliver the product or services.

Target market-A target market is the market (customers) a company wants to

sell its products and services to, and to whom it directs its marketing efforts.

Identifying the target market is an essential step in the development of a

marketing plan.

Target Market of Adhiya

Industries Schools colleges Hospitals

Study of Information System

Information System

An information system is a set of interrelated components that

work together to collect, process, store, and disseminate

information to support decision making, co-ordination, control

analysis and visualization in an organization.

Business partnerships and other organizations rely

on information systems to carry out and manage their

operations, interact with their customers and suppliers, and

compete in the marketplace. Information systems are used to

run inter-organizational supply chains and electronic markets.

What are the most common types of information system in an organization?

Transaction Processing System

A small business processes transactions that result from day-to-

day business operations, such as the creation of paychecks and

purchase orders, using a transaction processing system, or

TPS.

Management Information System

Small-business managers and owners rely on an industry-specific

management information system, or MIS, to get current and historical

operational performance data, such as sales and inventories data.

The MIS can create prescheduled reports, which company management

can use in strategic, tactical and operational planning and operations.

Decision Support System

A decision-support system, or DSS, allows small-business managers

and owners to use predefined or ad hoc reports to support operations

planning and problem-resolution decisions.

DSS, users find answers to specific questions as a means to evaluate

the possible impact of a decision before it is implemented.

Executive Support System

The executive support system, or ESS, contains predefined reports

that help small-business owners and managers identify long-term

trends in support of strategic planning and non-routine decision

making.

Study of Information System Used by ADHIYA

What is an ERP System?

Enterprise resource planning (ERP) is business process

management software that allows an organization to use

a system of integrated applications to manage the business

and automate many back office functions related to

technology, services and human resources.

ERP software integrates all facets of an operation, including

product planning, development, manufacturing, sales and

marketing.

How did the ERP System help Adhiya in Retailing?

ERP Software offers different functional departments involved

in the operations or inventory processes are integrated into a

single system.

It helps them to keep track of the inventory, order placements,

loss prevention, to check the availability of the products; ERP

is very important system for this organisation.

SWOT Analysis of ERP in ADHIYA

Strength

Helps in routine decision making

Allow streaming of business process

Wide view of enterprise workflow

It allows integration with systems of associates and business

partners

Weakness

Its usage is complex

They required significant employee training

Security issues

Opportunities

They overlooked retail sector by the major ERP solution

providers.

Threats

High complexity of such systems

Security concerns regarding sharing of data over a network

(Topic-3)

Linear Programming

Linear programming

Linear programming (LP; also called linear optimization) is a

method to achieve the best outcome such as maximum profit

or lowest cost in a mathematical model whose requirements

are represented by linear relationships

Linear programming is a special case of mathematical

programming (mathematical optimization).

Also, linear programming is a technique for the optimization of

a linear objective function, subject to linear equality and linear

inequality constraints

ADVANTAGES OF LP

LP helps in attaining the optimum use of productive

resources. It also indicates how decision-maker can employ

his productive factors effectively by selecting and distributing

these resources.

LP techniques improve the quality of decisions. The decision-

making approach of the user of this technique becomes more

objective and less subjective.

Linear programming is most suitable for solving complex

problems.

Helps in simplicity and productive management of an

organization which gives better outcomes.

Steps In Application

Identify problem as solvable by linear programming.

Formulate a mathematical model of the unstructured problem.

Solve the model

Implementation Linear Programming

Problem Showing LP Model to minimize the cost of production in ADHIYA

Adhiya is a manufacturing company of uniforms. They

produce 2 forms of clothes for Winter (A) and for Formal use

(B).Cost of producing each unit of product A and B is Rs.60

&Rs. 50.Product A requires 2 Machine Hours. The contract is

to supply atleast 500units of product A to its customers. Total

Machine Hours for product A 300hrs. For the product A and B

requires 6 and 4 Labours Hrs. Available labor hrs is 400.

Formulate the problem as LPP to minimize its cost.

Decision Variables

X1= No of units of Product A

X2= No of units of Product B

Data Given

Resources/

Constraints

A B Total

Supply Customers 1 - ≥ 500

Individual

Constraints

2 - ≤ 300

Labour Hours 6 4 ≤ 400

Cost (Rs.) 60 50

Objective Function

ZMin = 60x1 + 50x2

Subject To Constrain

1. Supply Customers = x1 ≥500

2. Individual Constraints = x1 ≤ 300

3. Labor Hours = 6x1 + 4x2 = ≤ 400

Non-Negativity Constraints

X1, X2 ≥ 0

(Topic-4) How do Retail organization measure

employee effectiveness?

"If you can measure it, you can improve it." -Peter Drucker,

Employee Effectiveness

Employee effectiveness means when a worker produces a

desired outcome in the best possible way. Labor output acts

as a key parameter for measuring employee effectiveness.

Employee effectiveness can be developed through a range of

activities that create a better working environment. Some

activities are:

Training and recertification

Improved communications

Rewarding and remuneration

Employee recognition

Improved leadership and teamwork

Re-equipment

Better corporate culture

SIGNIFICANCE OF EFFECTIVENESS

Effectiveness means 'doing the right things or occupying

oneself with the right things.

Effectiveness is essential for improving results; and in order to

perform effectively, clarity is needed.

If your employees do not know what results are expected of

them, there is a risk that they will work but will not perform. They

are not doing the right things and so contribute insufficiently to

the success of your organization.

Adhiya Measures their employees in the following steps:

Step 1: Defining Objectives

This step involves the identification of the organization’s goals and

objectives and the key performance outcomes that provide value for

customers, employees, and the organization in general. The goals of all

departments, divisions, and employees of the organization are united with

its strategic goals.

Step 2: Rating Employees on work performance

This helped their employee to do their jobs better, it identified the need of

training and education needed for their job. Maintained fairness on their

salary, benefits, wages, firing. And some of the workers in Adhiya wants to

know their performance of the job i.e. they need performance feed back to

work effectively according to the need of the organization.

Step 3: Ask to rate their job satisfaction

Adhiya ask their employee to rate on their satisfaction towards the job to

know about their requirements and interest towards the job

Step 4: Digital Tracking

They use a computer software named as PMS that allows to track their

employees on task completeness basis, and to know the time speed.

Step 5: Checking Quality & Quantity

Quantity addresses how much work is produced. A quantity measure can

be expressed as an error rate, such as number one percentage of errors

allowable per unit of work. Quality address how well the work is performed

and/or how accurate or how effective the final product is.

Step 6: Cost Effectiveness

It is measured the work done by employees reducing unit costs, reduce

time and reduce wastage.

Step 7: Absenteeism

The ability for employee to show up at work and on time. How it is

affecting their work performance and other employees.

Step 8: Physical Fitness

Adhiya invest more on employee’s health and physical fitness

(Topic-5) Study the existing Material

Handling Equipment’s

PROJECT- B

Material Handling

Materials handling is the art and science of moving, packing

and storing of substances in any form.

It is the storage, protection, movement and control of

materials of materials during the course of the distribution,

manufacturing, warehousing, consumption and disposal.

Material handling combines a wide range of manual, semi-

automated and automated equipment and systems that

support logistics and make the supply chain work.

Their application helps with:

•Forecasting

•Allocation of Resources

•Production planning

Objectives of Material Handling

Inventory management and control

Customer delivery

After-sales support and service

Lower unit materials handling cost

Reduction in manufacturing cycle time

Better control of the flow of materials

Better working conditions

Better quality

Enhanced storage capacity

Higher productivity

Use of Material Handling Equipment’s in Adhiya&

Types of Equipment’s they use

In this industry they use Material Handling Equipment’s for garment products

after finishing sending it to godown, without any damages products reaches to

godown.

These equipment’s make loading and unloading of goods easily to the place

where it is to be distributed.

It helps them to minimize the use of labourers for lifting products

It is less time consuming activity , it takes less time to reach the place where it

should be placed

It helps them to cut down indirect cost of labour.

Reduces the overall cost by improving material handling

Some of the Material Handling Equipments

used by Adhiya

Fabric Roll Stand- There is several traditional ways

to unwind cloth rolls during the spreading process.

They use custom-made roll stands, generally kept on

the floor. This creates displacement problems and is

prone to tilts during sudden tension. As a practical

and scientific solution to this problem is table

mounted roll stand.

This provides wrinkle free, neat and clean, and easily

adjustable spreading system, depending on the

properties of the fabric. Even fabric width can be

adjustable as per specific requirements.

Besides giving better quality spreading by ensuring

smooth movement of rolls, the stand also eliminates

one/two hands, which are used for maintaining the

roll movement in the conventional system.

Cloth Clamp- These are used in different tailoring

houses for holding the fabric or the clothing to make

incisions saving both time and money

Fabric trolleyCloth Clamp

Fabric Roll Stand

Geared travelling trolleySteel Trolley

Fabric roll fork lift

Carton transfer trolley

Hanger trolley

Sewing machine table

extension (left/right/front)

Table For Sewing Machine are manufactured on

automated cnc machines, from high quality plywood

using a special bonding process for excellent

performance and durability. Our engineering

department is capable of handling complicated and

intricate profiles to match different types of industrial

sewing/lockstitch/overlock machines, etc, as per

requirement of their customer.

Cost & Finance Of Material Handling Equipment’s

Materials handling is the movement and storage of materials at the lowest possible

cost through the use of proper methods and equipment.

The essential requirements of a good materials handling system may be summarized

as:

Efficient and safe movement of materials to the desired place.

Timely movement of the materials when needed.

Supply of materials at the desired rate.

Storing of materials utilizing minimum space.

Lowest cost solution to the materials handling activities

Cost & Finance Of Material Handling Equipment’s

Equipments Cost

Steel Trolly 8000

Geared Travelling Trolly 4500

Sewing Machine table 3100

Fabric Trolly 11500

Fabric Rolling Machine 4.5l

Hanger Trolley 27000

Total 504100

1 Rent Rs. 2,88,000/-

2 Depreciation Rs.2,47,250/-

3 Interest on Capital

Investment

Rs. 20,97,880/-

4 40% of Wages of Staff &

Labour

Rs. 16,12,800/-

5 40% of other contingent

expenses

Rs. 72,000/-

7 Total Fixed Cost: Rs.

43,17,930/-

8 Profit Rs.

42,87,870/-

Use of Process Costing

Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced. Processing cost is used when nearly identical units are mass produced.

An account is opened for each process which is debited with materials cost, labour cost, direct expenses and overhead.

The output of a process is transferred to the next process in the sequence and the finished output of the last process is transferred to the finished Goods Account.

Process Costing is used in such industries producing standardized products

Cost are ascertained separately for each job which is cost unit

Cost are calculated when a job is completed

Process Account showing the process of Garment Production in Adhiya

Process A shows Cutting Expenses,

Process B shows Stitching expenses,

Process C shows Finishing expenses

Process A Process B Process C

Materials 20 35 10

Labour 6 14 8

Direct Expenses 2 5 3

Process A Account

Particulars Per Piece Total Particulars Per

Piece

Total

To Material 200 2000000

To Labour 60 600000 By output transferred

to Process 2

280 2800000

To Direct Expense 20 200000

Total 280 2800000 28 2800000

Output: 10000

Process B Account

Particulars Per Piece Total Particulars Per

Piece

Total

To Material 350 3500000

To Labour 140 1400000 By output transferred

to Process 3

540 5400000

To Direct Expense 50 500000

Total 540 5400000 54 5400000

Process C Account

Particulars Per

Piece

Total Particulars Per

Piece

Total

To Material 100 1000000

To Labour 80 800000 By output

transferred to

Process 2

210 2100000

To Direct Expense 30 300000

Total 210 2100000 21 2100000

Finished Stock A/C

Units ₹

To Process C 10000 2100000

FINDINGS

They use simple method of distribution channel “Manufacturer- retailer-

customer” helped them in direct interaction with the customers, and also

helped them in knowing their requirements, satisfaction level.

For satisfaction of customers and to attract more they do customization for

any customer according to their need. On time availability of uniforms and

provide according to customers interested design helped to attract many

customers to buy from Adhiya stores.

Adhiya’s online supply of uniform to schools gained more trust and to

success of the organization.

Adhiya adopted modern ERP software that provided them automation,

smooth work and kept track of work flow.

Customization can only be done with the help of ERP in Adhiya

They monitor over all work of the organization through ERP.

Use of new technologies in Adhiya like automated cutting machines for

cutting fabrics in bulk, automatic button stichers get them a speedy

workflow.

Adhiya use Linear programming to solve their problems of high cost, for

wastage of resources, manpower planning.

Adhiya initiated to measure employees performance level by rating

employees on work performance basis. Asked them to rate on the

employees job satisfaction level

Started tracking their daily productivity, task completeness through digital

system.

Adhiya use Pallet racking, Carton transfer trolley for storage and handling

the shape & size of the tools according to the product. These are non-

automated equipments. To ensure the safety of product during storage

they use high quality equipments.

Use of fabric Trolley & Fabric roll fork lift help to shift the goods from one place to another and also helped to reduce the labour cost and increased the level of profit

Adhiya’s garment material stored & moved easily reduced the damage of material. It reduced accident during material handling.

Button Sewing machines reduced the use of hand work by labour, it is speedy and in 1 sec- 5 buttons are stitched.

Conclusion

The overall objective of the organization is to Speed up their work with less cost and maximizing the profit. Adopting customization strategy they found a rapid increase in the sales and profit. On time delivery system done by Adhiya gained the trust of people and schools tend to buy uniforms in future also. Placing retail stores in every corner of surat helped customers buy near to home.

Adoping a credit policy encouraged schools and some institutions to buy in bulk that increased the sales turnover. With the implementation of ERP in Adhiyahelped to increase the stock sales, helped to check the availability of products.

ERP also helped Adhiya in formulation of price control. Enables them to have greater insight and visibility into their supply chain operations. By formulating the method of LP Model Adhiya improved their profitability, able to use resources without wastage & also reduced their risks, minimized cost.

Adhiya don’t have any particular scale for measuring effectiveness but they measured by doing some effective steps that helped them to know the job satisfaction level, their performance level, cost effectiveness, interest of the employees towards their job etc.

Adhiya using Fabric Roll Stand for neat, wrinkle free, clean and adjustable spreading of fabric .The main objective is to minimize the cost of material handling. Use of Automated fabric cutter helped to cut the layer of bundle of cloth. It is time consuming 50% of the time is saving by using it.

BibliographyBOOKS:

“Market Your Way to Growth”- PHILIP KOTLER

Aswathappa, Tshaka, M.N. Arora, J.K Sharma, Ravi Kishore

WEBSITES:

https://commlabindia.wordpress.com/2011/03/31/why-is-it-important-to-evaluate-the-effectiveness-of-training-programs/

http://www.slideshare.net/hrtalksblog/employee-engagement-9147086

http://www.slideshare.net/rohit3615/materials-handling-15528281

http://www.adhiya.com

Thank You