Assignment No. 1 Op.

Management

Study of a Mfg. Co. from Annual Report

Imp. : Select latest Annual report of 2013-14.
No previous report permitted.

Objective of the Assignment
1. To get familiar with Co. Annual Report Which info is lying in which
corner?
2. To understand What-all info can be extracted from such reports.
3. To judge the operational health of Co. thru some selective ratios.


Page 1
Company Name: Cipla Limited.
H.O. Location: Mumbai Central,
Factory Location: Mumbai Central
CEO: Dr. Y. K. Hameed
Products Manufactured: Bulk Drugs, Tablets & Capsules, Liquids, Creams,

Capacity Analysis - 2012-13

Product
Name
Units Installed
Capacity
Production

Sales

Tablets & Capsules Million
Bulk Drugs Tons
Aerosols/
Inhalation
Thousand
Liquids Kilolitre


2013-14

Product
Name
Units Installed
Capacity
Production

Sales

YoY
Increase %
Tablets &
Capsules
Million
Bulk Drugs Tonne
Aerosols/
Inhalation
Thousand
Liquids Kilolitre


Financial Analysis
( All fig. in Rs Cr. except employees)
12-13 % of
Sales
13-14 % of
sales
YoY %
Change
Net Sales
(Excluding other income) Rs.
----- ------
Material Cost
Employee Cost
No. of Employees (write whether
assumed or actual ?)
---- -----
Inventory held on yr. end
Power & Fuel Cost
Interest paid
Depreciation
Exports
Imports
Net Profit (NOPAT)


Average Earning of Employee

Rs. ----- L/Yr Rs. ----- L/Yr
Revenue generated /Employee
( Sales / No. of Emps.)
Rs. ----- L Rs. ------ L
Inventory/Turn-Over ratio

----- Times ----- Times
E.P.S. / Face Value




Students Name 1. __________________ , Roll No. __________

2. __________________ , Roll No. __________

3.
4.







Page 2

1. Go thro all pages of the annual report, particularly Chairmans statement,
Directors Report, Corporate Governance, Explanatory, Notes, Product &
Capacity Details

2. Find answers to following issues and give your comments (not exceeding this
page).

Following is only the indicative list of questions, to be answered.
You may elaborate, if you desire.)

1. Capacity Utilization: How is Production and Sell w r t Installed Capacity?
Is there improvement w r t last year.?
Is company moving with market trends ?

2. Productivity , Quality How do find this companys productivity of their
input resources like Manpower, Capital, Power?
Is there any improvement w r t last year?

3. Inventory Management Is there any improvement over last yr.?
What steps/ measures are taken to curtail it?

4. Profitability - Is there any rise/fall over last yr.?
For what reasons there is rise/ fall?

5. Future Plans - What info do you get from the Chairmans
statement/ Directors Report

Imp. Instructions
1. Group Assignment of 2 students, hence interaction for analysis /
comments is expected. Anyone may be called for viva.
2. Time for Submission : 1 week (- ve marks, if delayed)
3. Copying strictly prohibited Both parties will get 0 marks
4. Following is a template. The same format must be followed.
5. No copy-pasting from the report. Analysis in own wording is expected.
6. Follow the same format. Do not make any change.
7. Only 2 pages, no 3
rd
page, no folder.

Any non-compliance of above will result into negative marks.





Sample Report

OM Assignment No. 1 Pg. 1. Operations Management

Study of a Manufacturing Co. from Annual Report
(Annual report of 2004-05)
Company Name: Maruti Udyog LTD
H.O. Location: New Delhi
Factory Location: Gurgaon, Haryana
Managing Director: Jagdish Khattar
Products Manufactured: A1 (Maruti 800), A2 (Alto, Zen, Wagnor) A3 (Esteem, Baleno)


Product
Name
Units Installed
Capacity (Unit)
Production
(Unit)
(%) Cap.
Utilization
Sales
(Unit)
YOY
(Units)
Passenger Cars and
Light Duty Utility Vehicles
(2003-04)

Nos.

3,50,000 4,72,908 135.11 4,72,122 -
Passenger Cars and
Light Duty Utility Vehicles
(2004-2005)
Nos. 3,50,000 5,40,409 154.41 5,36,301 + 13.6 %

Items 2003-04 % 2004-05 % YoY %
Change
Net Sales (Excluding other income)
(Rs. Cr)
9,018 - 10,911 - 20.98
Material Cost
Employee Cost (Rs. Cr) 177 1.9 196 1.8 10.42
No. Of Employees ( Actual) 3,334 - 3,453 - 3.56
Inventory (Rs. Cr.) 439 4.9 666 6 51.57
Power & Fuel Cost( Rs. Cr) 95 1 58 0.5 (39.35)
Interest (Rs. Cr) 43 0.5 36 0.4 (17.05)
Depreciation(Rs. Cr) 495 5.5 457 4.2 (7.69)
Exports (Rs. Cr) 941
10.5
982 9 4.38
Imports (R/M and M spares) (Rs. Cr) 1,360 20.4 1,608 19.7 18.19
Net Profit (after Int., Dep., Tax) (Rs. Cr) 542 6 853 7.8 57.5

Ratios

Items 2003-04 2004-05
Average Earning of Employee (Rs. L /year) 5.32 5.67
Revenue /Employee (Sales / No. of Emps.) 271 316
Inventory/Turn-Over Ratio 15.2 Times 15.4 Times
E.P.S. (Rs./ Share of FV Rs. . /-) 18.8 29.6






Pg. 2 : Analysis of MUL Operations 2004-05

1. Capacity Utilization:
Co. is utilizing its installed capacity at optimum level, which shows Cos efficiency to
use available resources
MUL also reduced the number of hours required to produce a vehicle. From a high of
100 hours in FY01 to 41.86 hours in FY05, it has come a long way in improving its
Productivity and efficiency.

2. Productivity & Quality :
Productivity Company has implemented the Maruti Production System (MPS) on the
shop floor. MPS has a systematic way to identify and eliminate waste in operations, such
as unnecessary movement of men and material, in-process waiting
Productivity measured in terms of HPV (Hours per Vehicle) i.e. man-hours spent to
produce one vehicle, showed an improvement of 9.2 per cent during 2004-05
To reduce inventory across the value chain, company had adopted a system of e-nagare,
an online system to schedule and order material and other components. Inventory levels at
the MUL plant reduced by 22 per cent
Maruti has improved productivity and cut cost through kaizen practices
Quality-During 2004-05, able to reduce warranty cost per vehicle by 16 per cent compared
to the previous year, and by more than 50 per cent over the last three years
Safety-Using the Japanese practice of Kiken Youchi Training or KYT, employees across
the shop floor regularly identify potential safety hazards in their area of operations. Based
on this feedback, the layout and sequence of the manufacturing process is modified to
prevent accidents.

3. Inventory Management :
MUL follows just-in-time (JIT) inventory principles. Around 70 per cent of components
are outsourced, and manufacturing is undertaken based on JIT inventory principles
MUL has successfully improved average inventory turnover from15.2 in 2003-04 to 15.4
in 2004-05 and average receivables from 17.8 days in 2003-04 to 14 days in 2004-05.

4. Profitability :
Net profit increased 57.5 per cent
Net profit margin (PAT /Net Sales) increased from 6 %t in 2003-04 to 7.8 % in 2004-05
ROCE increased from 22.3 % in 2003-04 to 32.1 % in 2004-05
Return on av. net worth (RONW) increased from 16.5 % in 2003-04 to 21.5 % in 2004-05
EPS increased from Rs. 18.77 in 2003-04 to Rs. 29.55 in 2004-05.

5. Outlook and future strategies :
Identify specific customer segments like teachers and motorbike owners, and offer them
customized schemes and explore new markets for export
Co. is now preparing for further efficiency called the The Next Leap
New Car Manufacturing Plant at located in Manesar, Haryana (2006)



Students Name- ____________, Division ___, Roll No. _______________