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MTM Internship
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Internship Report
MASOOD TEXTILE MILLS LIMITED
SUMITTED TO:
HUMAN RESOURCE MANAGER
PREPARED BY:
AHSAN MUSHTAQ MUBEEN ARSHAD MUHAMMAD WAQAS AHMAD NAUMAN SALEEM ZAHID LATIF (GROUP # 5)
THE ISLAMIA UNIVERSITY OF BAHAWALPUR
1
RAHIM YAR KHAN CAMPUS
Preface
It is the age of information & competition. The scientific
advancement has made the life more dynamic & competitive
worldwide. So one must have practical knowledge and trained
enough to live successfully in present competitive situation because it
is becoming difficult to survive without creating changes & adapting
ourselves according to these changes.
The students of MBA receive knowledge during their study, has
completely theoretical base. Their ideas remain unsaturated, unless
students do not have any practical experience. So to provide the
students an extensive exposure of practical business aspects,
department of business management sciences arrange a compulsory
6 weeks internship program, for all of its MBA students, in a well-
known organization. This thing enables the young business
executives to familiarize with professional business approach. To
enhance their writing skill, the students are also required to make the
written presentation of their experiences during internship program.
Masood Textile Mills Ltd. (Apparel Division) a leading
organization in Garment sector was assigned to me for internship.
This report is about my experience & knowledge, which I have gained
during my internship program. In this report I have made a humble
attempt to express most efficiently and effectively what I experienced
& observed at Masood Textile Mills (Apparel Division). I think that this
2
report will be really helpful for those who want to know about Masood
Textile Mills Limited (Apparel Division) Faisalabad.
ACKNOWLEDGEMENT
First of all we thanks Allah for whom our all praises are for Him.Then we thank our university who send us for internship program with intent to have a great knowledge and experience in Masood Textile Mills Limited.Our most respect for human resource department in Masood Textile Mills Limited who gave us chance to work for best of our skills. We especially thanks to Miss Uzma Meraj, Mr. Naeem, Mr. Tahir coordinator of internship program. We also thanks to all the respective department managers like Mr. Belal……… (HR Dept.)Mr. Kumar………… (QA Dept.)`Mr. IrfanMr.Tayyab………… (Forwarding Dept.)Mr. Farooq………… (Costing)Mr. AbbasMiss HinaMr. Zulfqar………… (MRP Dept.)Mr. Irfan……………. (Production Dept.)Mr. Sajjad………….. (PPC Dept.)
Now our thanks to Mr. Mahboob A. Shah Director Rahim Yar Khan Campus, Mr. Tariq javed Incharge Internship program and Mam. Nomeeta Zainab Sultan Deputy Director Rahim yar Khan Campus.
3
Dedication
“We dedicate our all efforts to my affectionate, loving
and kind parents, Teachers, Friends whose spiritual
inspiration helped us in all the path of lives. And also
the effort is dedicated to Human Resource Manager of
the Masood Textile Mills (Apparel Division) and all the
relevant department Managers who helped us in all
the duties which are assigned to us”.
4
Sr. # Description
01 Preface
02 Acknowledgements
03 Executive Summary
04 Introduction of Organization
05 Mission, vision and objectives of organization
06 Organizational structure
07 Working of various Division/ Departments
08 Sales and employees volume
09 Financial analysis
10 SWOT analysis
11 Suggestions and recommendations
12 Conclusion
13 Glossary
5
Executive summary
The facts and figures of Masood Textile mill (Garments and Head
office) make base of this report. MTM, having state-of-the-art
technology have its own spinning, knitting, processing, stitching and
finishing Divisions. The establishment of MTM in 1984 was in the
shape of spinning mill, later on in 1994 its activities expanded to
worldwide popular garments business. Mr. Shaid Nazir is the sole
proprietor and CEO of MTM.
Yarn, Fabrics and apparels are the famous products of MTM. MTM
worldwide renowned customers are Sears, JC Penny, Nautica,
Dockers and Vantage. Eighty-five (85) % of the products are exported
to USA and 15 % to Europe. Fashion garments like Polo, Rugby and
Henley shirts along with basic garments like Crew Neck Tee, Sweat
shirt, Boxer shorts and Bikinis are produced almost 120,000 dozens
per month. In-house embroidery facility is available and equipped
with Tajima machine.
Professionals including two hundred MBAs are part of the team who
actively show the skills in true spirits that gave such heights to this
mill. Textile engineers and Industrial engineers are the others whose
contribution cannot be questioned.
Masood Textile Mill feels pride for the achievement of its staff in
shape of achieving WRAP and ISO 9002 CERTIFICATION. The
latest computerized Barocade system of MTM that assures quality in
6
every operation of production from spinning to packing make it unique
and the only mill in Pakistan with such state of the art technology.
Bar codes are fixed on every product that assures to be traced back
to the first stage and can be used to find out the root cause of
shortcoming in the process.
Having in-house Yarn, Knitting, Fabric dyeing, Processing, and
Laundry and Apparel Manufacturing facilities make MTM a fully
vertical mill.
The turn over of 55.83 million dollar in year 2004 depict its very
profiting venture.
For constant exploration of quality products the R & D department is
very aggressively performing. They work hard to achieve TQM in
order to full fill their vision statement of “To be the world’s best
apparel company.”
7
INTRODUCTION OF ORGANIZATION
MTM(apparel division) is a SBU of Masood group.Masood
group was founded by Mr.Ch Nazir Ahmad father of Mr.Shahid
Nazir.Kohistan bus service was the first professional step by Ch.Nazir
Ahmad .After wards dreamland hotel,sangeet cenima and aizad
beverages were established in 1978 and 1983 respectively.Mr.Shahid
Nazir and Mr.Zahid Nazir helps his father by the formation of
industrial cooperative bank along with the development of Rabia trust
hospital.kakakhel Ghee mills and a flying training school were
founded in 1994.
MTM Apparel Division was established by Mr. Shahid Nazir
(CEO) in 1995. It is located on Sargodha road Faisalabad. MTM is
one of the largest knitted garment manufacturers of Pakistan.
Masood is a 100% export oriented company the major markets of
MTM are USA and Euorpe. Quality is the core competency of MTM. It
is a ISO 9002 certified company, it also having certifications of WRAP
(Worldwide Responsible for Apparel Production), JC-Penny
(Operational Excelence Award 2003) and Russel Corporation
(Global Quality Recognition 2003).
8
Vertical line of Operation
The details of vertical operations of Masood are as follows:
Spinning
Knitting
Dyeing, Processing & Laundry
Stitching
Embroidery
Spinning
Spinning Division of Masood Textiles is capable of producing
25,000 lbs. of carded and 10,000 lbs. of combed Ring spun yarn
every day (based on 20/s count). The division, equipped with
most modern machinery from Japan, England and Switzerland,
produces a vast range of yarn counts from 10/s to 40/s. To ensure
consistent quality, spinning laboratory has been equipped with
latest and most modern testing equipment. 60% of yarn
production is exported to Hong Kong, Japan, Korea, Malaysia and
Thailand. The rest of capacity is used for in house production of
fabric, converted subsequently into apparel.
9
Yarn
MTM Spinning is capable of producing more than 35,000 lbs of Combed &
Carded ring spun yarn from 6/s to 40/s count. Spinning is equipped with state of
the art machines from Japan, UK and Switzerland.
MTM yarn is famous for its consistent quality because of stringent QC system
and most modern lab equipments.
Knitting
Knitting Department has 16 machines capable of making Jersey,
Pique, and Fleece, Interlock and Rib in addition to the mini
jacquard designs of single knit jersey. The gauge ranges from 20
to 28 for single knit, 20 to 24 for Interlock and 15 for Rib
machines. Most of the machines are equipped with Lycra
attachment. Moreover, it has 9 flat bed machines for collar and
armband making. 100% production is inspected and only ‘A’
grade fabric is transferred to the subsequent operations.
10
Fabric
One of the largest Fabric facility in Pakistan having the capability to produce all kinds of
knitted fabrics in 100% cotton & blends.
o Single knit
Single Jersey
Pique
Fleece
o Flat knit
Collar & Cuffs
Flat Knit Panels
o Strippers
Feed Striper
Auto Striper
Engineered Striper
o Double knit
1x1 Rib
Variegated Rib
Interlock
o Textures
11
Herring Bones
Pique Jersey
Waffles
o Jacquards
Mini Jacquard
Dyeing, Processing & Laundry
The Processing Department has an installed capacity of dyeing
140 Tons per week. Equipped with these dyeing machines from
Germany, it is capable of dyeing both 100 % cotton and Poly-
cotton blended fabrics. The machine size selection provides
flexibility in dye lot size ranging from 100 Kgs to 1,000 Kgs .
The department has three Santex finishing lines from Switzerland
including hydro extractors, dryers and compactors for tubular as
well as open width fabrics. Moreover state of the art sueding
equipment makes Masood capable of adding value to the delicate
knit fabrics. A separate testing Laboratory with latest equipment
is in place to ensure that the processed fabric quality is
maintained to meet the required parameters of our buyers
Cutting department
Cutting is the first step in production. Here, fabric is cut according
to the customer’s specification. The main objective or aim of this
department is to minimize the wastage of fabric. Now they use
12
Gerber Plotter which is new technology to maximize the use of
fabric.
.
Stitching (process flow)
To get maximum production they follow the principle of “Division
of Labor” and principle of convenience. That’s why process flow is
used for stitching. The copy of process flow, which is attached in
annexure, tells how a shirt is stitch (First moon overlock, then
moon attach, then pocket hem, then pocket marking and so on).
Here they attach the identification codes to the garments, which
help in back track system. Quality, which is one of the core
competencies of massood, is maintained by 100% check from
Inline supervisors. These Inline supervisors check the stitching
and plucking, if there is any fault they try to remove it
immediately. If we see the process flow attached we will find four
inspections, at first inspection there is 100% check, at second
there is 62% check, at third there is 64% check and at last which
is inter inspection there is 34% check .
13
Garments
mTm is a leading apparel company in Pakistan having expertise &
machinery capable of transforming customer ideas into superior quality
garments, which are taken as the most famous brands in the world.
14
Ironing
When stitching is complete these garments are ironed. This
process is of great care because this may damage the fabric. This
is done with the help of steam irons. Inline supervisors work
doesn’t end at stitching. They have to check any possible
damage and the quality of ironing .
Finishing Check
After ironing finishing check is made. This includes three kinds of
checks.
a. Stain
If there are any stains on garment and they are removable
then they are washed with steam and chemicals.
b. Raffu
If there is any small hole then that garment is sent for raffu .
c. Re Stitch
If there is any skip stitch then that garment is sent for Re
Stitch
15
.
Packing Accessory Attachment
After final check packing accessories like company stickers,
hang tags are attached.
Packing
In this stage garments are packed according to customer’s
requirement. Inline supervisors check whether packing is as
per requirement or not.
16
MISSION STATEMENT
“Our mission is to be a dynamic, profitable and growth oriented
company by providing good return on investment to its shareholders
and investors, quality products to its customers, a secured and friendly
environment place of work to its employees and to project Pakistan’s
image in the international market”.
17
Company Vision ;
"Our vision is of continual improvement and sustained growth,
and of a family of workers. Who are given the best
compensation benefits and working conditions in the region. In
this respect, mTm continues to emphasize the need to invest in
and develop its most precious resource - its human capital.
mTm continues to provide training courses and self-
enhancement opportunities for all our workers".
18
CORPORATE OBJECTIVES ;
1. Maximization of wealth of shareholders.
2. To increase market share.
3. To achieve customer satisfaction.
4. Making arrangements towards achieving total quality
standards.
5. To get growth through professional management.
6. To reduce the cost of production up to minimum
level.
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7. To control the atmosphere by installation of latest
machinery.
8. To continue to improve/ surpass past achievement.
9. To lead the local manufactures.
10. To attain a good word of mouth and to make
company image stronger in the international market.
Organizational Structure:
Main Offices:
Head Office
Universal house, west canal Road Faisalabad - Pakistan.
Ph : +92 41 8734910
Fax : +92 41 8731180
Mills (Yarn & Fabric Division)
32 K.M. Sheikhupura Road, Faisalabad - Pakistan.
Ph : +92 41 4689470
Fax : +92 41 4689469
Garments
20
Sargodha Road, Near Police Station, Faisalabad – Pakistan.
Ph : +92 41 8787931-34
Fax : +92 41 8781361
Lahore Office
16/3A, Eden Homes, Main Gulberg , Lahore – Pakistan.
Ph : +92 42 5753620
Fax : +92 42 5753629
Karachi Office
1-C, 13th Commercial Street, Phase 2, DHA. Karachi – Pakistan.
Ph : +92 21 5800583
Fax : +92 21 5800584
Comments on the Organization Structure:
Masood Textile established in 1994. Founder of the Masood Group is Ch. Nazir
Ahmad (late). MTM was a private organization in start. In 1999 Masood Textile
turned from a private company to a public limited company and listed in KSE.
Masood Textile strive to lead in creating, developing and manufacturing of knitted
apparel products right from basic to highly fashioned garments thus responding
to emerging trends in the industry. They translate conceptual ideas of our
customers into reality and shape them through its technical bent and professional
acumen. The team here strongly believes that Customer satisfaction is the
essence of business today. mTm has the technology with expertise,
products with knowledge and most importantly
the right mindset to achieve total
customer satisfaction.
21
DEPARTMENTS/WORKING OF VARIOUS DIVISIONS
Human Resource Department
The human resource is very strong in Masood. Like any other
human resource department, the objective of this department is
to maximize the efficiency and satisfaction of employees. They
22
adopt al those practices which can help them in achieving their
goal
Functions of HR Department
Functions of the HR department in Masood Textile Mills can
broadly be differentiated into these points:
1. Recruitment
2. Training and Development
3. Compensation & Benefits
4. Motivation
Recruitment
The HR department does the recruitment. Recruitment is done
basically for two classes. Class S is for labors and supervisory
level while class M is for Management. For recruitment in both
classes Job Analysis is done that where new vacancies can be
arranged or where there occurs a vacancy for a job and what kind
of qualified person is required for the job. Human Resource
Department does Strategic Planning for new jobs in Masood. Jobs
are normally announced after every six months. Selection is done
in two ways. Number one is that Internal Sourcing is done
according to the capability and performance of worker. External
recruitment is done for the officers. For recruiting officers they
take test and interview, and the succeed ones are appointed as
Management Trainees. After a period of three months they are
again evaluated the persons who qualified become the
23
permanent members of Masood’s Team. The workers are hired on
trial. If there work is satisfactory then they are selected.
HR department also keep the personnel record either the worker
is a contractual or permanent worker. A profile of every worker is
maintained in the computer based Human Resource Management
System (HRMS).
Training and Development
Although it is the function of Human Resource Department but in
Masood they have recently establish a separate Training &
Development Department. The responsibility of this department
is to train new employees and to develop a clear career path for
the employees. This department also arranges training for
employees who are promoted to next level. After providing
complete training the work of this department doesn’t end. They
take feed back to evaluate the results of training.
Compensation and Benefits
The HR department carries out wage surveys. HR department
checks pay and other legal benefits and benefits like overtime,
bonus, leave encashment, gratuity, subsidized mess and vehicles
are also under HR department.
24
Motivation and Performance Appraisal
HR department makes the performance appraisal and is
responsible of giving increments or rewards to the workers. For
creating motivation and competitive environment among the
workers certain incentives are given:
1 .Cash prizes
2. Trophy
The best inline inspector receives a cash prize. To create a
competition between workers a trophy is given to the best
stitching hall on the criteria selected by the management, every
month. O.35% of the P.O. is given to the best stitching hall. This
0.35% is distributed among all the personnel, belonging to
different departments, for their contribution e.g respective
merchandiser, PPC staff, Cutting persons etc.
25
Administration Department
The activities performed by this department include:
1. Control of the admin. office
2. Gate office
3. Transport
4. House keeping
5. Utilities
6. Security
Gate office
This office is required to Gate office works under the
administration department. They are required to submit the
reports of all goods going out of the factory or which are
received. The admin manager sings gate passes.
Transport
To control the facility of transport and maintenance of the
transport of the transport vehicles is controlled by the admin
department.
House Keeping
To arrange the facility of accommodation for the employees is
also done by the administration department. The wear and tear
26
of the factory building is also taken care by the admin
department
.
Utilitie
The utilities such as kitchen budget, electricity, maintenance of
automobiles and the machines is also done by the administration
department. Other responsibilities are like the civil kind i.e.
sanitary, boiler, and carpenter for the repair of the furniture.
Security
Masood has a tight security system. There is an efficient security
crew working in the Masood Textile Mills. The security is in the
control of the security in charge who works under the admin
manager. Security people check every employee coming in and
going out of the factory for safety reasons
.
27
Merchandising department
Marketing manager who directly report to the general manager control
the marketing department. The major responsibility of this department is to
access the customer’s needs and wants and set the products according to
the customer’s satisfaction. Products distribution and promotion are also
the part of this department. This department plans for future market and
maintain strategies for existing markets. This department remains always
in struggle for attracting new customers. The merchandising department
works in the following manner.
Receive development sheet from production planning and control
department.
Pricing from concerned department.
Development of new inquires.
Proto/pattern development.
Fabric development
Lab dips development
Salesman sample if required
Size set in original fabric & color
Pre production approval
Imported accessories follow up
Complete follow up & monitoring of purchase order start from yarn to
shipment.
28
Marketing Strategies of MTM
Marketing Department cannot be ignored in any organization.
Because it is the heart & soul of the organizations.
MTM cannot ignore the pivotal importance of this department. The
marketing manager with the Chief Executive officer performed the marketing
activities jointly. They not only promote their department but also visit the
foreign markets to search their new customers .
Marketing Manager performs the following activities,
Look overall problems of the departments and the problems
faced by the customers.
Devises all the marketing related policies.
Delights the customers by solving their problems.
Co-ordinates with the merchandising department.
Checks and observes all the activities of textile sectors
especially keeping focus on the competitors activities.
The marketing department with the help of merchandising
department makes it possible that the order place by the customers
should be completed within specified time.
MTM sell the product with the brand name of the customers.
29
Competitive Strategy
Back track system
Masood textile mill is the only mill in Pakistan with latest computerized barcode
system that assures quality in every operation of production from spinning to
packing. Products of each department carry bar code stickers, which bear all the
details and history of the operations of that product. Hence if any problem is
reported, one can trace back the root of the problem and enable to prevent
occurrence of the same in future
.
Vertically integrated operations
Besides, Masood is one of the few fully vertical textile mills in Pakistan having in-
house yarn, knitting, fabric dyeing, processing, laundry and apparel
manufacturing facilities. The vertically integrated operations help Masood in
achieving shorter lead time and greater flexibility to cater the customer’s
demand.
30
Customer profile
Masood is proud to work with world’s best labels. This exposure to the brand
labels has been a continuous learning experience for the entire team. Currently,
85% of production is exported to the U.S. while rest 15% to Europe
.
Champion Chaps Calvin Klein Dockers
www.championusa.com www.polo.com www.cklien.com www.dockers.com
GAP Hanes JC penny Levi’s
www.gap.com www.hanes.com www.jcpenny.com www.levis.com
Nautica Polo Polo R.L Russell
www.nautica.com www.polo.com www.polo.com www.russellcorp.com
Speedo Tomy Hilfger
Tom Tailor Vantage
www.speedo.com www.tomy.com www.tom-tailor.com
www.vantageapparel.com
31
Sears Jockey Guess Foot Locker
www.sears.com www.jockey.com www.guess.com www.footlocker.com
Stitching diversity
With over 2700 stitching machines, Masood is producing about 10 lacks pieces
per month of fashion garments like Polo, Rugby and Henley shirts along with
basic garments like Crew Neck Tee, Sweat shirt, Boxer shorts and Bikinis.
Masood has in-house embroidery facility equipped with Tajima machines.
Experienced professional management
The Masood team comprises a balanced blend of experienced professionals
including over 200 MBA’s, Textile engineers and industrial engineers. Masood is
WRAP certified and ISO 9002 certified as well.
Aggressive R&D facility
A very aggressive and creative R&D department is always busy in exploring
innovative product development enabling Masood to be ahead of many in the
field.
32
FINANCE DEPARTMENT IN MTM
In my opinion there is a stock and inventory controlling department at Mills
division of MTM, which is named as finance department or I can say that it is only
a part of accounts department not the finance department .
This department has three sections.
-Spinning
-Knitting
-Dyeing
Spinning:
Following reports are prepared in the spinning section:
-Daily Cotton Stock Report
-Daily Yarn Stock Report
-Daily Management Report
This report is reported to the Finance Manager (Head Office and Mills), Accounts
Manager (Head Office), and Accounts Officer (Head Office) for the submission to
the Textile Commissioner (Bureau of Statistics, Lahore).
Knitting:
In the knitting section following reports are prepared;
-Date Wise Yarn Receiving Detail
33
-Date Wise Yarn Returned from Outside
-Date Wise Yarn Returned to Outside
-Date Wise Grey Fabric Received from Party
-Date Wise Yarn Issuance Detail
Dyeing:
In the dyeing section, the reports prepared are as followed:
-Party wise receiving summary
-Party wise issuance summary
-Party wise production summary
-Party wise issuance summary
Besides, above mentioned reports following documents are also maintained;
-Vouchers
-Bill for Daily Expenses
-Payment to Employees
-Collection and Deposit of Cash from Head Office
Some documents used in Finance Department:
Goods inspection Report/Receipts notes (GRN):
Issued for purchased items by purchasing department. These documents sent to
Head Office and they clear the bills means payment of these bills. Store
department saves these documents by using some oracle program.
34
Application form for Leave Encashment:
Total leaves 32
Annual leaves 14
Sick leaves 08
Casual leaves 10
Calculation of leave encashment
Total salary / 30 * No. of leaves spare= Amount payable
Social security contribution of employees
Some portion of total salary separated for social security contribution. Benefit for
employees. In MTM 8.83% of total salary is contributed for social security. Rs.20
is deducted from employee’s salary and balance is provided by the owner.
Over time
Payment of over time is given to employees by using following formula.
Net salary / 26 / 8 * No. of hours= Over time pay
4000 / 26 / 8 * 31=596.15
Total working days in a month =26
35
Total working hours in a day =08
Contribution
Employee’s contribution Rs.20
Employer’s contribution balance (remaining)
Guzted day’s amount
Basic pay / 26 / 8 * 24 No. of Guzted days.
Net pay = 4000
Basic pay =Net pay * 2 / 3
Basic pay =4000 * 2 / 3=2666.66
Basic Pay =2666.66
Gusted day =03
Basic pay / 26 / 8 * 24 * No. of guzted days
2666.66/ 26 / 8 * 24 * 3= 923 Net payable
Final settlement
Salary + Benefits – Deductions = Net Payable
Final clearance form
Employee must be cleared from the following departments,
Head of department
Main store
Office mess / canteen
Security
Administration
36
Human resource
Information technology
Petrol and maintenance allowances are given to different persons according to
their designation. Whether they have company’s provided conveyance or
personal. Bills issued by petrol pumps, CNG and maintenance are attached with
summary. Then checked the date, serial no, vehicle no, limit of petrol, limit of
maintenance charges etc. then these bills checked by account officer etc. then
send to head office they also checked it and send amount to MTM Apparel in the
shape of cheques , from cashier specific persons get their allowances.
Following limits provided ,
Purchase order
It is Prepare by purchase departments. This form includes quantity, description,
rate, total amount issue date and delivery requirement date, terms of payment
etc
Bill
It is Issue by the selling company (packages club). It includes the quantity and its
price per unit.
No. of units * price per unit = total amount including sales tax.
Journal voucher
When we purchases on credit then journal voucher is necessary and we make
the following entry.
Store-code A/c
Sales tax A/c
Packages club A/c
Narration: being store purchased bill received and adjusted
Transactions
Daily
37
Fortnight
One month
One year
Types of vouchers
1 Cash voucher
Cash payments voucher
Cash receipts voucher
2 Bank voucher
Bank payments voucher
Bank receipts voucher
3 Journal voucher
Sales voucher
Purchase voucher
Parties exempted from deduction of withholding tax u/s 153(5) of income tax
ordinance 2001.
Cement, petrol, some computer accessories.
When the invoices are more than fifty thousand then for the purpose of refund we
make payment within 180 days. Payment evidence is necessary for tax refund.
Payment evidence includes cheques and challan number of tax.
Debit note -------- issue against purchase return
Credit note-------- issue against sale return
In case of 15% excess booked in purchases will be refunded after
purchases.
In case of work in process things we can claim 15% GST.
In case of end user cannot claim 15% GST. E.G tyres, AC etc.
Entry at the time of purchases:
Expense/store –code A/c
Sales tax A/c
To party A/c
38
Entry at the time of sale:
Party A/c
To sales A/c
To sales tax A/c
After 15 days when we return file:
Sales tax A/c (out put)
Less: sales tax (in put)
=refundable sales tax
Entry:
Sales tax refundable A/c
To in put/out put tax
When tax department rejected some tax then entry:
Rejected sales tax A/c
To refund receivable A/c
When sales tax refunded:
Bank A/c
To refund receivable A/c
Sales tax return form includes,
1. Sales tax registration number.
2. N.T.N.
3. Name
4. Tax period.
5. Excess amount of input tax carried forward from the preceding tax period,
if any
39
6. Unclaimed input tax from immediate three preceding tax period (excluding
column #05)
7. Sales
8. Purchases
9. Arrears/additional tax/recoveries pointed out by audit.
10.Penalty for late filing.
11.Net amount payable including arrears additional tax and penalties.
FORWERDING DEPARTTMENT
EXPORT
Process
Firm must be registered in export promotion bearue. If a firm has national tax
number then that specific firm can export its products without registration.
Then company prepares its product’s samples and shows to different buyers who
want to purchase it. If the samples are up to the mark then they give sample
order (trial order) to the company, the order consist of minimum quantity means
only to check that the product is according to the sample. Buyer check the
quality, color, dye, reactive dye, yarn dye, shrinkage, weight in grams, size, and
freight charges etc. Freight charges mean who will bear the charges buyer or
seller and what its effect on price per unit. Negotiations on price, when the price
settled the buyer place the order. To fulfill an order, the meeting held between
managers to check the requirement.
Arrange yarn
Knitting
Dyeing
Drying
Cutting
40
Stitching
Labeling
Pressing
Packing
Packing list
Shipment
Prepare document, one copy send to Air port or sea port. Custom officers check
these documents for clearance.
Air way bill ----------- in case of air port
Bill of lading ----------in case of sea port
Term of shipment
1. Freight on board (FOB)
Freight charges from Faisalabad to Karachi are bear by factory other
charges bear by the buyer.
2. Carriage and Freight (C & F)
From factory to buyer’s destination port charges born by the selle
3. Carriage, Insurance and Freight (CIF)
From factory to buyer’s destination port charges born by the seller
including insurance expenses .
4. Cash against documents (CAD)
Payments at sight means when documents received by buyer then
payment will be made .
Letter of Credit (L/C) types
1. L/C at sight
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When seller submits documents into the bank then payment will be
made to buyer .
2. 30 days from shipment date.
Payment will be made after 30 days of submission of documents.
3. 60 days from shipment date.
Payment will be made after 60 days of submission of documents.
4. 90 days from shipment date.
Payment will be made after 90 days of submission of documents
.
5. 120 days from shipment date.
Payment will be made after 120 days of submission of documents
Mode of shipment
1. By Air.
2. By Sea.
3. Trans shipment.
Types of documents
1. Custom clearance documents.
Original commercial invoice (6 copies)
Original packing list (6 copies)
Form “E”.
Narcotics certificate (if shipment by Air)
2. Buyer’s requirements.
Commercial invoice.
Packing list.
Bill of lading / Air way bill.
Certificate of origin.
Issued by Chamber of Commerce for Gulf countries, it is
necessary for exporting products to Gulf countries.
Single country declaration.
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We give guarantee to buyer that the material used in this
product was made only in Pakistan .
Multiple countries declaration.
For the finished goods or completion of goods we used
imported material from different countries.
Annexure iii.
Used for Panama, we send the Air way bill / shipment bill by
mail to buyer, then buyer check it and send back to seller by
mail. These documents send to chamber of commerce for
stamping and again send to buyer by mail, and then he
approved it. It is used for custom clearance in the buyer’s
country .
Quality control report.
Buyer’s agent checks the quality and other documents etc.
Inspection certificate.
This certificate is used only for export in Canada.
Canadian custom invoice.
General system of preference (GSP).
It is used for European countries. It is used for custom
purpose in the buyer’s countries .
Container sizes
20 feet (standard)
40 feet
40 feet high cube.
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PPC (production planning & control)
PPC is the bridge between merchandising and production department. PPC
department plays an indispensable role in a garment manufacturing company. Its
responsibilities start from the negotiation between merchandiser and customer
and ends on the shipment of PO. This department works on the basis of 3M’s
(Man, Machine, and Material).
Functions of PPC:
Optimization of resources (man, machine, material)
Costing research and development(R&D)
Purchase order receiving
Capacity
Time line (time, action)
Fabric accessories (stitching and packing)
Fabric demand plan (lead time)
Accessories demand plan
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Production Merchandising
PPC
Costing-:
This is the most important responsibilities of PPC department .It is
responsible for accurate costing of production. The price of the single accessory
can’t be ignored .On the basis of cost, given by PPC, merchandiser negotiates
with the customer. This is crucial point in getting the purchase order (PO) the
main things that are taken into account during costing and pricing of product are
as follows.
1 :Fabric Cost (Yarn Dying and Knitting)
2 :Stitching Cost
3 :Packing and Accessory Cost
4 :Overhead Financial Charges
5 :Margin and Rejection
6 :Freight on Board
Production Allocation:
PPC fulfill this responsibility by making a schedule, which deals it
when and from where fabric is received, when cutting is done to which production
unit order will be process, and so on.
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PPC Profile:
A PPC profile is prepared which contains all the specifications that has been
demanded by customer and distributed to all the concerned departments in
which whole execution of order is done. Following points are included in this
profile.
1 :Purchase Order
2 :Buyer Name
3 :Description
4 :Quality
5 :Color and size Breakdown
6 :Time Line
7 :Size Chart and cutting Design
8 :Packing Program
9 :Accessory Sheet
10 :Fabric Order Confirmation Sheets
11 :Action Calendar
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Production Department:
There are total 12 stitching units. Orders of different companies are processed in
different units according to their skills. They operate under the objective of “Zero
Defect”. Here quality control is merged with the production.
Observations:
As practical work is done in units so we observed a lot of
implementations of our subjects. Here what we like most is the TQM
implementation. Each and every employee is conscious about Quality and they
all work as a team to maintain it. Quality is the core competency of Masood
textile mills that differentiates Masood from its competitors. The main tasks of
production department are Quality maintenance and on time delivery.
Process:
Production process Is as follows:
1:Stitching (Process flow)
2:Ironing
3:Finishing checks
4:Packing accessory attachment
5:Packing
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Stitching (Process Flow)
To get maximum production they follow the principle of “Division of Labor” and
principle of convenience. That’s why process flow is used for stitching .The
process flow which we saw for a specific garment tells how a garment is
stitched (first moon over lock, then moon attach ,then pocket hem, then pocket
making and hem and so on).
Here they attach the identification codes to the garments, which help in back
track system. Quality which is the core competency of Masood textile mills is
maintained by inline supervisors. These inline supervisors check the stitching
and plucking and faults is removed immediately.
Ironing:
After completion of stitching the garment is ironed. This process is of great care
because this may damage the fabric .This is done with the help of steam irons.
Inline supervisors work doesn’t end at stitching .They have to check any possible
damage and the quality of ironing.
Finishing Checks:
1: Stain
2: Rafu
3: Re Stitch
Packing Accessory Attachment:
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After final check packing accessories like companying stickers,
hanging tags are attached.
Packing:
In this stage garment is packed according to customer’s requirement.
Finishing Supervisors check whether packing is as per requirement or not.
Process Observations:
Cutting (machine arrange, SAM, chain flow, man power)
Induction (barcodes, bundles)
Sewing (inline inspection for quality control)
Clipping
Pressing
Final inspection
Super Final inspection
Packing
Internal audit
External audit
X factory
In line inspection most of the faults are ruffo, puckering, stain and alteration.
Same inspection is performed in final and super final inspection. The method of
final inspection is clockwise.
Types of machines:
(1) Lock stitch (L/S)
Single Needle
2 needles
(2)Over lock (O/L)
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4 Threads
3 Threads
(3)Flat lock (F/L)
Minicylender
Cylinder bed
Flat bed
Feed of arm
Auto trimmer
Feedo
flat lock 4 needle
)4 (Zigzag
)5 (Button attach (B/A)
)6 (Button holes (B/H)
)7 (Bar take
Operations of some Machines:
Single needle L/S:
Placket making, collar attach, cuff thoka, side went, half moon attach
4 thread O/L:
Neck rib, shoulder attach, cuff attach
Main parts of machines:
Gauge set:
-Pressure foot
-Needle plat
-feed dogs
-Needle bar
Thread tension post:
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it is used for losing and tighten the thread.
Stitch dial:
Increase or decrease the stitches.
Brands:
1 (Yamato (F/L, O/L)
2 (Pegasus (F/L, O/L)
3 (Siruba (L/S, B/H, O/L)(
4 (Juki (L/S, B/A, B/H, Feedo)
5 (Mitsubishi (L/S)
6 (Taking (Feedo)
7 (Toyota (O/L)
8 (Kansai (F/L 4 Needle)
Flow Of A Polo Shirt: machines
(1) Half Moon cutting O/L
(2) Main label L/S
(3) Moon attach 2 NEEDLE L/S
(4) Shoulder attach O/L
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(5) Shoulder attach top stitch F/L
(6) Placket A L/S
(7) Collar thoka L/S
(8) Collar attach O/L
(9) Collar top stich L/S
(10) Neck B L/S
(11) Cuff cutting O/L
(12) Cuff attach O/L
(13) Cuff top stitch F/L
(14) Sleeve attach O/L
(15) Sleeve top stitch F/L
(16) Body hem F/L
(17) Side seam O/L
(18) Side vent (check) L/S
(19) Kaj
(20) Button attach
(21) Bar take
(22) Inter inspection
(23) Clipping
(24) pressing
(25) Final inspection
(26) Super final inspection
Specs of garments:
(1) straight shoulder
(2) across shoulder
(3) sleeve opening
(4) sleeve inseam
(5) sleeve length
(6) sleeve length from HPS
(7) sleeve hem height
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(8) upper arm/bicep
(9) across chest
(10) chest
(11) side seam
(12) bottom
(13) neck back drop
(14) arm hole straight
(15) arm hole curve
(16) neck front drop
(17) sleeve length from CBN
(18) shoulder slope
(19) waist
(20) collar bad width
(21) placket opening
(22) placket length
(23) waist band width
(24) side seam excluding waist band
(25) side seam including waist band
(26) leg opening
(27) leg hem height
(28) fly opening
(29) crotch seam
(30) full seam
(31) front rise
(32) back rise
(33) Thai
(34) hip
Garment types:
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Tops:
(1) Crew neck
(2) Polo
(3) Rugby
(4) Hood
(5) Qzp
(6) Full zipper
(7) Raglan
(8) Tank top
(9) Henley
)10(High neck
)11(Mock neck
)12(V-neck
)13(V-insert
)14(Sleeve less
Bottoms:
(1) Pant
(2) Short
(3) Boxer brief
(4) Boxer short
Accessories, which are used:
Labels:
The following labels are used during preparing any garments
a) Main label:
These labels mostly show company brand name.
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b) Size label:
It shows size of the garment whether it is (S, L, M, XL, XXL).
c) Care label (side label):
In this label the instructions are mentioned like washing.
d) Fire label:
The purpose of this label is don’t go near fire because fabric
Has polestar.
e) Patch label (company promotion label):-
This label shows the company name, it is mostly attached
on the back side of the pent or trouser. It is seamed on all sides.
Type of tapes:
a) Feedo tape:
It is making with body fabric and cutting in unit and attached with
feedo machine.
b) Twill tape:
It is specially knitted tape.
Other accessories:
Draw cord
Fusing
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Types of threads:
a) Cotton thread
b) Diner
c) Intermingle
Buttons:
a) Straight
b) Cross
Needles:
PARTS OF NEEDLE ARE
(1) Shank
(2) Needle Tip Hole
(3) Needle Eye
(4) Scarf (Cut)
(5) Taper
(6) Needle Blade
(7) Groove
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QUALITY ASSURANCE;
Quality:
It is a standard achieved by process to render defect free product.
Quality control:
Implementation of process to achieve the required standard.
Quality assurance:
Preventive measures taken to make defect free product.
Responsibilities of quality assurance:
There are three responsibilities of quality assurance.
(1) Monitoring the system
(2) evaluating staff involved
(3) assuring quality of product
Working:
Quality is the major concern, to maintain the quality; there are quality checks at
every stage of manufacturing starting from raw cotton, yarn, fabric, processing,
cutting stitching and end at packing. In apparel division, fabric is first checked
and when find per customers requirement then it is issued to cutting department.
Here fabric is checked for shrinkage, finished g/cm2 etc.Then next check point is
in quality pieces move to the stitching units. The next check point is in production
department. In production department there are inline inspectors for inspection
on the spot and now Masood has hired an expert Quality Assurance team from
Sri Lanka they are responsible for assuring the Quality measures of each
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Garment. Internal and External Audits are one of the most important
checks .Internal auditors are from Masood’s end and external auditors from
buyers end.
Corrective and Preventive Actions:
The corrective and preventive actions are very strong in
Masood.Strong preventive actions are designed to ensure the quality and
avoid any kind of faut.But if any thing goes wrong then relevant person
immediately take corrective action.
1: Preventive Actions:
a) Fabric Audit
b) Cutting Audit
c) Inline Audit
d) Measurement Audit
e) Finishing Audit
f) Final Good Audit
Corrective Actions:
a) Warnings
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b) Demotions
c) Dismissals
CLOSE LOOP CORRECTIVE ACTION (CLCA):
Inspection
Solution (preventive measure) Identifying the defect
Root cause of defect
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Sale & employees volume :
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FINANCIAL ANALYSIS
We are analyzing the company’s current position to assess that the company
is how much efficient. We calculate vertical & horizontal analysis and then
to different ratios to assess our findings and then compare it with industry’s
past data. We start our analysis from the auditor’s report to know that is the
company following the generally accepted accounting principles. Because a
GAAP are basics to know that the company financial reports are fair and
giving right information to its users. In the auditors report the auditors
opinion shows
“THE COMPANY HAVE BEEN DRAWN UP INCONFIRMITY WITH
COMPANIES ORDINANCE 1984 ”|
The companies financial statements are,
Balance sheet
Profit & loss account
Cash flow statement
Owner equity statement
We firstly calculate the vertical and horizontal analysis to know the
companies past and current trend.
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Short Term Liquidity Position
Short term debt paying ability is Important to all users of financial statements. If the entity can not maintain a short term debt paying ability it will not be able to maintain a long term debt paying ability nor it will be able to satisfy its stock holders. Profit ability of the firm does not determine the short term debt paying ability. In other words using accrual accounting, the entity may report high profits but may not have the ability to pay its current bills.
The account R/A Turnover indicates the liquidity of the R/A, means that how many tines our R/A is converted into cash in a year.
A/R Turnover = Net Sales Avg. Gross R/A
Interpretation
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In 2006 account receivable turnover ratio is 3.4624 which shows the decreasing trend and in this way our sales rapidly decreases and concludes that liquidity position weakened.
Liquidity ratios
To know that the company is how much is efficient to pay its short and long term obligations. It is necessary to calculate the liquidity of the firm as when analizing the short term debt paying ability of the firm. We find a close relationship between the current and the current liabilities. Generally the current
liabilities will be paid with cash .
Current Ratio
Interpretation
For many years the gridline for the minimum current ratio has been 2. As the company’s current ratio is declining in 2006 due to increase in current liabilities with
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compare to 2005. So, we conclude that company are so much successful in staying above a current ratio 2 and indicates an incline in liquidity of the firm.
Quick ratio;
The asset test ratio relates the most liquid assets to current liabilities. Inventory is removed from current assets when computing the acid test/ quick ratio. The usual guideline for the quick ratio is “1” a comparison should be made with firm past acid
test ratios and with major competitors .
Quick Ratio
Interpretation ; The efficient quick ratio “1” company meets this standard .
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As the company quick ratio is declining leads to more bankruptcies and great risk for creditors and investors.
Profitability Ratio :
Stockholders derive revenue in from of dividend. Profitability is the ability of the company to generate earnings dividends are pay out of profit/ earnings. Further, increased profits can cause a rise in market price, leading to capital gain. Creditor’s also attracted towards profit because it is a source of debt coverage.
Net Profit Ratio
Interpretation
Net Profit Ratio in 2006 decrease to 2.483% which shows that our net Profit decrease with compared to 2005 that concludes the profitability of the
company decline which shows the bad image to the creditors .
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Return on Equity Capital
Return on Total Equity measures the return to both common and preferred shareholders. It means once one dollar invested by the shareholder earns how much net income. In this ratio equity means both common shareholders and preferred shareholders
Interpretation :
In 2006 return equity is 40.556% which shows that investors invest 1 rupee in the company and gets profit of 40.556% which is an increasing trend with compared to the past data. This shows the profitability increases .
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Return on Assets :
Return on Assets measures the ability of firm to utilize its assets to create profit by comparing profits with the assets. How efficiently the company yses its assets and earn from them.
Interpretation:
Due to capacity company assets shows low return which is not suitable for company as we shows that in 2006 its goes to 1.866% which is 4.91% in 2002 which is a great decline and shows the low profitability ratio.
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Earning Per Share
The amount of income earned on a share of common stock during an accounting period is the earning per common share. One share of common stock ears how much dollar of income in a year is the interpretation of Basic Earnings per Common share
Interpretation:An increasing trend looks in 2006 regarding earning per share its means a share holder invest 1 rupee and earned 4.06% it when compared with 2002 shows Decreasing trend but an increasing trend looks when 2004 and 2005.and increasing the investor position in the company
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SWOT ANALYSIS
Managers of MTM always review the mission and goals and then they scan the
internal and external environment to identify elements that influence the
organization performance. To determine such elements SWOT analysis is
conducted .
SWOT is a method that helps managers identify the organizational strengths (S)
Weakness (W) Opportunities (O) Threats (T).
Strengths
Latest machinery
The mill has latest machinery, which they have imported from foreign
country to meet the international quality standards
ISO 9002 Certificate
The company has got ISO 9002 certificate which insure the quality
standards.
High Financial Resources
The company has high financial resources.
Strong market image
The company has strong market image in foreign market. The buyer can
purchase same product from the competitor at low price but due to strong
marker image they purchase from MTM.
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Proven management
MTM has proven management. All management is very competent. They
know how to satisfy their customers.
Products innovation abilities
The management has product innovation abilities.
Weaknesses
Centralized management
The management at MTM is centralized. All type of decisions is made at
top level. Due to centralized, delegation of power only managers have no
authority to make decision.
High cost of production
The cost of production increased, such as material labor quota charges
and other production accessories.
Small international market share
The MTM has small market share at international level.
No motivated staff
The staff is not properly motivated due to lake of incentives and less
wages offered by the company.
Less promotional activities
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The company has very less promotional activities in local an international
media.
Opportunities
Potential in market
Entering new markets
Addition new product line
Faster market growth
Potential in market
Threats
Political instability in country
Economic instability
Though competition
Adverse government policies
Easy access of buyers in world markets
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Conclusion & Recommendation for Improvement :
Conclusion-:
Following conclusion is based on my learning during the stay period of Masood
Textile.
The overall acceptable environment but needs to be
improved.
Decentralization of authority.
Good image in the international market.
Good reputation of product in the mind of customer.
Well defined and systematic recruitment criteria.
Lack of authorities in the hands of Managers.
Highly Qualified Management.
Masood is one of the best apparel producer in Pakistan,
most probably number 1 in PAKISTAN and number 3rd in
ASIA.
Masood has one of the best Oracle data base & I.T System
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Recommendation-:
Masood should try to reduce per minute & per unit cost too
meet the buyer’s requirement regarding low prices.
Masood should try to reduce the financial cost that normally
incurred to meet the huge level of business volume.
Need to develop a culture of cooperation and teamwork. For
this purpose a revolutionary commitment from higher
management is required at this time, otherwise mtm may not
be able to cash the benefits of quota elimination.
The misbehavior of some responsible managers with the
working force is creating unrest and feelings of being treated
like slaves among the workers. For the purpose of
improvement in this sector the line management should be
trained and must be educated how to behave the workforce.
Employees should be encouraged to come up with
revolutionary thoughts.
Proper training at each level should be given to the
employees.
Special incentives should be given to the good employees
for motivation and encouragement.
Need to improve fabric to induction process to avoid air
shipments.
The biggest problem of this time is needed to improve proper
execution of customer purchase orders.
Need to improve utilization of available capacity to reduce
per unit cost.
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Need to improve cost of white elephant of apparel division
i.e. high rejection, excess cutting, excess consumption of
accessories, air freight, unabsorption of fixed overhead,
overtime etc.
Glossary
GSM Gram Per Square Meter
P.O Purchase Order
SPI Stitch Per Inch
PPK Product Package
WRAP World Wide Responsible Apparel Process
CBL Central Back Length
CBN Central Back neck
Wales vertical Lines
Cordses horizontal lines
Lead Time Order to Shipment Time
CPO Cutting Planning Officer
CPI Cut Panel Inspection
Splices A separator between the fabric plies which are cut
PPC Production Planning and control
GGT Garments Gerber Technology
R&I Receive and Issue
Scarf cut
GRN Goods Received Now
IGP Interword Gate Pass
OGP Outword gate Pass
FID Fabric Inspection Department
IE Industrial Engineering
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