Internship Report: UniLever Pakistan

What UniLever is?

Unilever is dedicated to meeting the everyday needs of people everywhere. Around the world UniLever foods and home and
personal care brands are chosen by many millions of individual consumers each day. Earning their trust, anticipating their
aspirations and meeting their daily needs are the tasks of UniLever local companies. They bring to the service of their consumers
the best in brands and both UniLevers international and local epertise.
!or more than "# years Unilever has been providing consumers with $uality products and services. UniLever has a portfolio of
global, regional and local brands. %ome, such as Bertolli,Dove, Hellmanns, Lipton, Lux, Magnum, Omo and Vaseline, are popular
around the world. &thers are the first choice for consumers in particular countries. As traditional structures and lifestyles around
the world are being rapidly transformed, Unilever continues to respond to consumers present needs and, at the same time, to
anticipate their future ones. &ur strength lies in the deep understanding we have of local culture and markets. Unilevers strategy
is to focus research and development and marketing on our top performing brands, that is, those that are most in demand from
consumers. Through our etensive knowledge of trends identified today, we will continue to develop our brands to meet the needs
of our consumers tomorrow. , feel and smell great.
UniLever products are at home everywhere' favorites with consumers throughout
the world, from the emerging markets of Asia and Latin America to the
developed economies of (estern Europe and )orth America.
UniLever meets the needs of consumers around the world, in both new and
established markets. *onsumers vary from country to country in their
preferences and habits and UniLever adapt many of its brands to suit local tastes.
!or eample, among UniLevers many teas, it produces around +# separate
brands of black tea specifically tailored for consumption in over +# different
countries and UniLever is constantly sharpening the flavors to suit all its local
markets. ,n some societies, consumers have traditionally washed up by sponging
ash, sand or detergent onto their dishes, before rinsing. Learning from these
established practices, we developed our Vim dish wash bar, to bring improved
cleaning to eisting washing routines. %hopping habits also vary and the
availability of our brands is a key concern of local managers. UniLever adapt the
distribution of its brands to suit local realities. ,n Europe, customers benefit from
swifter, easier dispatch through online ordering of fro-en foods. (hile, in
Tan-ania, UniLever has piloted bicycle delivery of products to villages
inaccessible to motor transport. .uilding on a presence that in places stretches
back nearly a century, it keeps closely in tune with local consumers. UniLever is,
in every sense, a multi/local multinational.
Unilevers research and development teams help to anticipate and meet
consumer needs. UniLevers research and development epertise allows to anticipate the evolving needs of consumers and to
create the innovations to meet them. ,nternet technology is improving the way UniLever share best practice and innovation
around the world.
UniLevers 012 activity is focused on si ma3or laboratories and a network of innovation centers around the world. 0ecent
successes have demonstrated UniLevers practical ability to respond to consumers and bring innovations to the marketplace. They
include laundry tablets, which it has rolled out in more than 4# countries5 Lipton Cold Brew tea bags, which take away the need to
boil water when making ice tea5 and its cholesterol/owering spreads, which have been widely rolled out under the Take
Control, Becel and lora brands. UniLever continues to look for new innovation opportunities. !or instance, UniLever research
into the human genome means they can now decode the make/up of skin. This can reveal such secrets as an individuals tendency
for dryness or their skin protein mi. %uch knowledge forms the foundation for new, more personal products.
UniLevers global ,T system helps them to share information around the business and to use their scale and scope to meet
consumer needs and reduce their costs. UniLever drives to provide better value for customers and consumers, they have always
valued the sharing of information across product sectors and geographical locations. ,T has boosted this knowledge/sharing
culture, allowing us to make the most of the vast amount of ,nformation held by our people around the world. UniLevers
computer networks provide over 6#,### employees worldwide with common tools for sharing information 7allowing them to deal
with millions of electronic messages every working day. They also have a Unilever ,ntranet, which helps them to manage
innovation and best practice around the world. 8lobal teams, for eample, pool information, marketing success stories and
knowledge via dedicated sites, making this knowledge available to UniLevers people locally, wherever they are.
UniLever is committed to doing business in a responsible and sustainable way. ,n partnership with organi-ations around the
world, UniLever works to reduce their impact on the environment and to act as a responsible corporate citi-en.
Unilever believes in sustainable development 7 meeting the needs of the present without compromising resources for future
generations. This commitment begins and ends with their consumers. UniLever believes that by constantly evolving to meet their
changing needs, they can continue to develop their business in both a profitable and an environmentally sustainable way. ,n
working towards sustainable development, they focus on three areas that are directly relevant to their business. These are fish
conservation, clean water stewardship and sustainable agriculture. An eample of their work in the area of fish conservation is the
!ish %ustainability ,nitiative, which aims to meet their ob3ective of sourcing all supplies from sustainable fisheries by
+##9. ilegro, an Alaskan salmon/based dish, was our first product to come from a sustainable fishery, as certified by the :arine
%tewardship *ouncil. ,n clean water stewardship, as in other areas, UniLever 3oins with partners to achieve maimum impact. !or
eample, through their sponsorship of the 8lobal )ature !unds Living Lakes initiative, they work with a network of private and
government organi-ations to help communities better manage their local lakes and wetlands. ,n sustainable agriculture, UniLever
has set up of an epert eternal advisory board. ,ts task is to advise and inform its business and suppliers on new sustainability
standards.
Unilevers commitment to corporate social responsibility is an integral part of their operating tradition. ,t is outlined in their
*orporate ;urpose and in their *ode of .usiness ;rinciples. ,t finds practical epression in the worldwide standards they have set
their selves' to ensure the health and safety of Unilever people at work, to secure the $uality and safety of products and to
minimi-e the environmental impact of their operations. UniLever aims to be as professional in their management of its social
responsibilities as they are in any other area of business. UniLever recogni-e the need to be eplicit about what their social
commitment means in practice' to articulate their policies, and to demonstrate its performance. UniLever reports on their
approach and progress in its %ocial 0eview. Unilever has a tradition of support for the local community wherever it operates, in
particular in the areas of education, environment and health. !or eample, in ,ndia access to oral care is limited, with few dentists
per head of population. ,n +###, UniLevers oral health and hygiene education programme brought advice and care to over +.9
million schoolchildren. ,n *hina, Unilever has sponsored <inghai provinces first Art =ope %chool. ,n a region where few can
afford the cost of basic schooling, it offers the opportunity of a general education and free tuition in traditional dance, music and
modern art.
,nternet technology is providing a two/way communication channel, helping UniLever to get to know its consumers better.
*ompetition in markets is intense. To further develop their relationships with consumers and communicate the benefits of their
brands, UniLever uses a variety of media, not only highly creative television advertising campaigns but also new one/to/one
communication via the internet. UniLever brand communication has always made the news. ,n the >69#s, they produced the first
ever television commercial in the U?. As the +>st century began, they screened the U?s first interactive T@ commercials,
marketing their Colmans and Oliviobrands.
Lever Brothers Pakistan Limited
Lever .rothers ;akistan Limited is largest fast moving consumer ;roducts *ompany in ;akistan. Lever .rothers ;akistan Limited
is a part of UniLever/ a global company. Lever .rothers ;akistan Limited is producing more than 9# brands in ;akistan.
Mission Statements
>' (e are the leading consumer product company in ;akistan, a multinational with deep root in country.
+' (e attract and develop high talented people who are ecited, empowered and committed to deliver double digit growth.
4' (e serve every day needs of all consumers every where for food, hygiene and beauty through brands products and service that
deliver the best $uality and value.
A' (e strive to remain and every simple and enterprising business.
9' (e use our superior consumer understanding to products breakthrough innovation in brand and channel.
B' &ur brands capture the hearts of consumer through outstanding communication.
"' Through managing a responsive supply chain we maimi-e value from supplier to customer.
C' (e are eemplary through our commitment to business ethics, safety, health, environment and involvement in the community
Statement of Chairman& Chief Executive of Lever Brothers Pakistan Limited
D , am $uite convinced that +##+ is poised to be a passionate year for us, which is why we should reflect on some eciting
possibilities it has to offer'
;ower of teamwork, based on truth and trust.
;assionate pursuit to grow and win.
!un environment at work, inspired by enterprise culture.
.rands which rank highest in consumers minds and hearts.
%ystem that transform the shape of our business.

The challenge for us is to liberate our energies to help grow our business, and to lead and deliver the results that we have
committed ourselves to. , would encourage everyone to believe in and grasp the Dart of possibilityE and focus on the :ust (ins for
our business.E
Product Lines of UniLever Pakistan Limited
;E0%&)AL (A%=
TOILET SOAPS
Lifebuoy Fcarbolic soapG
Lifebuoy 8old F+ varietiesG
Lu FA varietiesG
0eona F4 varietiesG
Liril F+ varietiesG
.ree-e
!A.0,* A)2 =&:E *A0E
FABRIC AS!

Ultra %urf
%urf micro
%urf Ecel
;ower %urf
%unlight (ashing ;owder 1 %oap
(heel
!O"E CARE

@im 2ish (asherH%courers
@im .ar
@im ;owder
;E0%&)AL ;0&2U*T%
!AIR CARE

%unsilk %hampoo FA varietiesG
Lifebuoy %hampoo
=armony %oap
S#I$ CARE
!air 1 Lovely skin cream and lotion
;onds skin cream
;onds talc
%E$TAL CARE
*lose/up Tooth paste
;epsodent Tooth ;aste
&,L A)2 2A,0I .A%E2 !&&2
BA$ASPATI
2alda
COO#I$& OIL
2alda *ooking &il F%oya .eanG
2alda %unflower oil
;lanta
"AR&ARI$E

.lue .and
I$%'STRIAL FATS

A whole range of products for the bakery 1 oils for the industry.
TEA
LEAF TEA

Iellow Label
Iellow label 2anedar
0ichbru
Top %tar
Taa-a Leaf
%upreme
%'ST TEA
;earl 2ust
0uby 2ust
A>
"I(T'RE TEA

Taa-a
,*E *0EA:
*ornetto F4 varietiesG
!east F+ varietiesG
!east %tickless
Top Ten
%tar *up FA varietiesG
*allipo
%plit
!ruiti
;eddle ;op F4 varietiesG
4/2
%olo F4 varietiesG
;olka *up
;anda
2racula
!amily ;acks
PROU!"#O$ U$#"S
2ifferent factories of L.;L are operating in different areas of ;akistan. .rief information about theses units is given below'
RA!I")AR #!A$ *RF+
The largest and the oldest of L.;L is situated in 0ahim Iar ?han. .asically at this factory personal products, soaps, glycerin and
dish wash bar are manufactured.
#ARAC!I TEA FACTOR) *#F+
This factory was established in >69# and it is situated in west (harf area. !ormerly it was owned and managed by Lipton ;akistan
Ltd. ,n the last A4 years many modifications are made here. And the factory has epanded considerably. ,n this factory only tea is
produced and packaged.
#ARAC!I E%IBLE FACTOR)
,t is situated on =ub 0iver in %.,.T.E. A1. &il ,ndustries established the factory in >69C and the production of the vegetable oil
began in >6B+. ,n >6B9 Lever ac$uired the factory. .anaspati, cooking oil and margarine are produced here and distributed all over
the country.
ICE CREA" FACTOR)
This is recently established on :ultan 0oad in district ?asur. The plant was commissioned in >66A having the most modern and
latest machines installed. (alls ,ce cream is being manufactured here. L.;L, when ac$uired the ;olka, also purchased its two
factories, one in Lahore and other in ?arachi.
BEST FOO%S FAISALABA%
0ecently L.;L has ac$uired 0afhan :ai-e ;roducts from .est !oods ,nternational.
TEA PROCESSI$& PLA$T *"A$SE!RA+
The new Lever .lack Tea ;rocessing ;lant has been set up at 2hodial, >+ km north of :ansehra on the main ?arakoram =ighway
on +.9 acres of land with the ;rocessing ;lant built/in area of >>,C## s$. ft. The plant is epected to process 9# kg per hour or
approimately a ton of made tea a day.
The plant has cost 0s. >> million whereas 0s. >+ million has been spent on the building and infrastructure. The plant has been
inaugurated on "
th
of %eptember, +##>.
Lever Brothers Pakistan Limited %Rahim &ar 'han (actor)*
Lever .rothers ;akistan Limited F0ahim Iar ?han !actoryG is situated at Leghari road near the main city. The factory deals in
ma3or three types of products, which are categories as under'
!ersonal "as#
!ersonal !roducts
Laundr$ and Detergents
;ersonal wash has a wide range of soaps and the main soap of Lever .rothers ;akistan Limited is Life .uoy, Lu, 0eona and
!air1Lovely soap.
;ersonal product include &ral F*lose Up tooth pasteG, =air care F%un %ilk, Life .uoyG and *reams F!air1Lovely and ;ondsG.
Laundry and 2etergents includes Laundry F%urf Ecel and (heelG and 2etergents F@im bar and (heel magic barG
LOCATIO$
Location is the process of determining a geographical site for a firms operation. &rgani-ations must weigh many factors when
assessing the desirability of a particular site that can be
;roimity to customers
;roimity to suppliers
Labor costs
Transportation cost
L.;L 0ahim Iar ?han !actory is situated in the middle of the city. ,t was established in >6AC. The main reason for choosing this
location for the factory was'
The land for the factory was donated by the )A(A. of the .ahawalpur %tate.
,t was the ideal location to cover the ,ndo/;ak border areas.
,t was the central location of ;akistan so it was a convenient location from the distribution point of view.
Availability of the cotton seeds because south ;un3ab is cotton area.
8overnment ta free area
Availability of inepensive labor
PRO+#M#"& "O M,R'-"S
The site of 0.I. ?han ;lant was chosen in >6AC. The main reason was its central location. This location is the middle of Lahore and
?arachi that were the main markets at that time. %o the company can easily cover whole market fro ?arachi to Lahore.
PRO+#M#"& "O SUPPL#-RS ,$ R-SOUR!-S
At that time the company was only producing oil for which cotton area was suitable. This site was suitable for processing the raw
material that was cotton and 0.I. ?han was main cotton area.
",+-S ,$ R-,L -S","- !OS"
,t was the ta/free area. The land was gifted by the A..A%, family, so there was no real estate cost.
"R,$SPOR","#O$ !OS"S
Transportation cost is also a ma3or determinant, which directs the location decision. Transportation cost is a ma3or factor not only
in terms of the raw material but also in terms of raw material. As 0.I ?han is situated at the center of ;akistan, the movement of
finished goods cost minimum here across ;akistan. 0.I. ?han 0ailway %tation is situated along with the factory so transportation
through rail is very easy.
,.,#L,B#L#"& O( U"#L#"#-S
The factory is facilitated with electricity, natural gas and telephone.
/istor)
Unilever
Unilever was formed in >64# when the 2utch :argarine *ompany :argarine Unie merged with .ritish soap maker Lever
.rothers. .oth companies were competing for the same raw materials, both were involved in large/scale marketing of household
products and both used similar distribution channels. .etween them, they had operations in over A# countries.
:argarine Unie grew through mergers with other margarine companies in the >6+#s. Lever .rothers was founded in >CC9 by
(illiam =esketh Lever. Lever established soap factories around the world. ,n >6>", he began to diversify into foods, ac$uiring fish,
ice cream and canned foods businesses.
,n the Thirties, Unilever introduced improved technology to the business. The business grew and new ventures were launched in
Latin America. The entrepreneurial spirit of the founders and their caring approach to their employees and their communities
remain at the heart of UnileverJs business today.
Unilever )@ and Unilever ;L* are the parent companies of what is today one of the largest consumer goods businesses in the
world. %ince >64#, the two companies have operated as one, linked by a series of agreements and shareholders that participate in
the prosperity of the whole business. UnileverJs corporate centers are London and 0otterdam
Lever Brothers Pakistan Limited %Rahim &ar 'han (actor)*
The factory site was selected in >6AB. The construction of the factory started in >6A6. !irst of all factory started the production of
the Edible &il by establishing the Edible !ats ;lant in >69+. The factory started the production of soap n soapry unit in >69A. Then
the company epand the business by establishing the Animal !eed ;lant in >6B#. *ompany
decided to enhance the product range and establish the ;ersonal ;roduct ;lant in >6C>. )on %oap 2etergent F)%2G based on
sulphonic acid, instead of conventional manufacturing of soap base on Tallow, started in >6C4. Then the company decided to
epansion in soapry plant in >66>. *ompany installed sulphonation in >66+.
%,TE %ELE*T,&) >6AB
*&)%T0U*T,&) %TA0TE2 >6A6
E2,.LE !AT% ;LA)T >69+/>66"
%&A;E0I >69A
A),:AL !EE2 ;LA)T >6B#/>6C#
;E0. ;0&2U*T% ;LA)T >6C>
)%2 .A0 ;LA)T >6C4
%&A;E0I EK;A)%,&) >66>
%UL;=&)AT,&) ;LA)T >66+
The total area of the factory is 69 acres out of which +CL F+" acres G for factory and B4LF B# acresG for the Estate. 6L FC acresG
area is allocated for evaporation beds and solid waste dumping.
T&TAL A0EA 69 A*0E%
!A*T&0I' +" A*0E% F+C LG
E%TATE' B# A*0E% FB4 LG
E@A;&0AT,&) .E2% 1 %&L,2 (A%TE 2U:;,)8 %,TE #C A*0E% F6 LG
Organi0ation Structure
!om1an) #nformation2
Board of irectors
:usharif =ai
C#airman % C#ie& 'xecutive
:r.0obert Moon
:r.;arve- =ussan ?han
:r.!atehali (.@ellani
:r.,rti-a =usain
:r.;ervai- :ahboob :alik
:r.%oomro :ohammad ,brahim
:r.&mar =.?arim
!om1an) Secretar)
:r.Amar )aseer
,uditors
:essrs A.!.!erguson 1 *o
%tate Life .uilding )o. >/*
,.,.*hundrigar 0oad ?arachi
Registered Office
Avari ;la-a. !atima Ninnah 0oad, ?arachi
Management ,ctivities in Lever Brothers Pakistan Limited
Path to 3ro4th
,ntroduced in +###, path to growth is UniLevers corporate strategic agenda which aims to double the si-e of the business in seven
years and to grow profits faster than the competition, thereby ensuring that we are the leaders in similar type companies in
providing top value to our shareholders.
Six Strate,ic Thrusts
The si strategic thrusts that make up the path to growth are
-. Reconnect /ith Consumer
.y having real insights into consumer needs, preferences and future needs. This means knowing and understanding consumers
lifestyles, habits and attitudes and creatively adapting brands to their changing needs.
0. Brand Focus
8row their leading international brands by concentrating our resources behind them while still supporting Ogolden regional
brands and local 3ewels. ,nnovation will be the keystone to ensuring our brands are attuned to consumers future needs.
1. Pioneer $e/ Channe2s
(iden their means of Ogoing to market i.e. reaching consumers and customers. This means developing new channels such as
direct selling, home/vending, fashion outlets, travel, food service and out/of home.
3. or2d C2ass Su4425 Chain
To close the gap to global world class within three years by establishing brand synergies, superior logistics and supply chain and by
establishing a world program.
6. Sim42if5
Everything that they do by reducing compleity, duplication and by making the best use of ,.T. to provide high $uality information
once.
7. Enter4rise Cu2ture
.y creating a culture which shapes the mindset and actions among all employees towards winning in the market/place by building
an organi-ation fit for growth.
"PM
Total productive maintenance is global standard of efficient production, which cuts waste, save money and make factories safer
places to work. ,t gives machine operators the knowledge and confidence to investigate and eliminate root causes of machine error
or breakdown as well as the chance to work in teams with managers to achieve improvements on product lines.
UniLever started introducing T;: sometimes known as Total ;erfect :anagement or Total ;eople :otivation in Napan in >6C6
ahead of global roll/out program. Today, around +## sites are using T;: techni$ues. The level one Oecellent award applies
simply to the factory floor, Oconsistently ecellent is for sustained performance and the Ospecial award, much harder to achieve,
also includes innovation, manufacturing, sourcing and distribution.
5 S6s of Work1lace Organi0ation.
The 9 %s are a group of techni$ues to promote workplace organi-ation, ensure adherence to standards and foster the spirit of
continues improvement.
The -
st
S8 Sort
O78ective2 To get rid of unwanted items. 2ecide what is needed to be kept, and what is not needed and to be discarded.
The 0
nd
S8 Set Location and Limits
O78ective2 To locate a specific place for specific items of a specific $uantity, where needed. 2etermine addresses for materials and
e$uipment. ;ut them in that place and keep them there.
The 1
rd
S8 Shine and S/ee4
O78ective2 To use cleaning to identify abnormalities and areas for improvement. *lean the workplace and at the same time
visually sweep for abnormalities or out or control conditions.
The 3
th
S8 Standardi9e
O78ective2 To consolidate the first 4 %s by establishing standard procedures. 2etermine the best work practices and find ways of
ensuring everyone does it the same DbestE way.
The 6
th
S8 Sustain
O78ective2 To sustain improvements and make further improvements by encouraging effective use of the O*heck/Act/;lan/2o
cycles. ?eep all current improvements in place and develop an environment for future improvements.
Managerial /ierarch) of Lever Brothers Pakistan Limited
%Rahim &ar 'han (actor)*
O1erations of Lever Brothers Pakistan Limited %Rahim &ar
'han (actor)*
Material Store
:aterial store is a place where raw material is store. :y period of internship is spent in material store, where , learn the different
function of material store and stock maintenance. The management structure of material store is as follows'
%taff of material store is as follows.
Assistant :anager :r.Naffar :edhi
Noiner :anager F&il 1 !atG :r.0a-a
Noiner :anager F0aw and ;ackingG Empty
%&A F&n receipt of materialG :r.=ashim
%&A F&n issue of materialG :r.Asgar
:r.=ashim is working on the seat of 3oiner manager F0aw and ;ackingG on temporary basis.
:aterial %tore 2epartment consists of two hangers and one perfume store. Total area of each hanger is +9B >#" feet. :aterial
store has an over flow depot outside the factory.
:aterial %tore 2epartment handles near about B9# items of raw material.
(unction of Material Store2
Two main functions of material stores are
() *eceipt o& Material
+) ,ssue o& Material
9. Material Recei1t Process2
:aterial store receive two type of material
&il and !at, 2!A, Li$uid *austic
;acking and 0aw :aterial
The process of receiving these materials is different from each other. (e will discuss these processes one by one.
%a*. Recei1t of Oil and (at, (,, Li:uid !austic2
The process of receiving &il and !at includes following steps.
Ste4 -8 ei,h Brid,e8
!irst step in material receipt system is weigh bridge where vehicles reach. *apacity of weigh bridge is C# tons. There are two
operators on the weigh bridge.
The !unction of weigh bridge in goods receipt process is as follows.
Truck or other type of vehicle driver come on weigh bridge and gives truck invoice to weigh bridge operator which is issue by the
supplier of material. The weigh bridge operator check the type of material load on truck and note the truck number and its timing
of arrival. ,f material is packing and raw then it is sent to material store for unloading. ,f material is &il and !at tankers are sent to
sampling point. Lab assistant takes sample from tanker. &perator of weigh bride makes a sample chit and then this chit is sent
with sample of material to lab for inspection. %ample chit consists of date, sample no, indent no, supplier name, $uality, $uantity,
and truck no. The operator is informed by telephone from lab that sample is ok. Then operator on weigh bridge take the first
weight of loaded tanker and feed data in system with the help of software (eigh.ridge which includes serial number, supplier
name, truck number, material name, sample no and first weight. ;rint of this data is attached to truck invoice. Then operator
makes a weigh bridge slip and give it to driver and send driver to unloading point. (eigh bridge slip contains date, party name,
truck no, material name, and signature of weigh bridge operator. &ne portion of weigh bridge slip is filled by the operator on
weigh bridge and other part is filled by the operator on receipt on material. The part of weigh bridge slip which is filled by the
operator on receive contains received, material name, truck no, and tank no where material is unloaded.
After unloading tankers come back to weigh bridge. 2river gives back the weigh bridge slip to operator and unloaded tankers are
weighted. The operator feed this weight in (eight.irdge software and calculates net weight. Then print of data is attached to truck
invoice. &perator checks the difference between net weight and weight written on truck invoice. ,f it is minor difference than it is
ignored. ,f it is ma3or difference than it is mentioned on truck goods receipt which operator makes after second weight. Two copies
of T80 are given to driver and two for office. Truck good receipt contains following data. %upplier name, date of receipt, city name,
date of sending, $uantity, packing type, description of goods and truck no.
&perator feed this data is daily sheet, which is made in ecel. 2aily sheet contains data about date of receipt, arrival time, truck no,
T80 no, indent no, item code, supplier, commodity, sample no, dispatch weight, received weight, difference, out time, system
postedFyesHnoG, remarks, weigh bridge operator. After it, the operator feed this data in :!8 ;ro.
Process Ma1 of Weigh Bridge

Ste4 08 'n2oadin, of Oi2 and Fat: %FA: Caustic8
&il and !at, 2!A and Li$uid *austic are unloaded on different point and process of unloading is different.
%7*. Oil and (at2
The point where oil and !at is unloaded is call Tallow 2ecanting area. !ollowing materials are unloaded at this point.
Tallow >.9
Tallow #.9
*oronal &il
*otton %eed &il
,f material loaded on tanker is coronal oil and cottonseed &il than the oil is shifted to storage tank through pipeline and with help
of pump. .ut before shifting oil the operator on unloading clear the line with help of steam.
Tallow area uses following storage tanks store the material.
%T B9 and %T >+ is use to store tallow #.9 which is use in Lu. %T >4 and %T ># is use to store tallow >.9 which is use for life buoy.
%T BA is use to store ;? &il.
The capacity of %T BA,>+,>4,B9 is A## tons and capacity of %T># is 9## tons. Temperature of storage tanks is maintained with help
of hot water running in pipelines inside the tanks. A meter gage shows the level of material store in tanks.
Tallow comes in two types of tankers. &ne is private companys tanker and others are lever brother tankers. The process of
unloading these tanks is different with each other.
Private !om1an) "ankers2
!ive tankers of +9 tons each can be unloaded at a time. Truck driver brings truck to tallow decanting area and give weigh bridge
slip to operator on unloading. &perator note the time when unloading start.
,f tallow is in free-e condition in tanker than with the help of steam operator melt the tallow and then unload tallow in drop tank.
!rom drop tank tallow is shift to 2ecanters. Tallow area contains two decanters having capacity of +## tons each. Temperature of
these decanters is maintained according to material. This material is than shifted to storage tank from decanters. .efore shifting
material to storage tank the operator on receipt clear the pipe line to storage tank with help of steam and when line clear than
material is shifted with help of pipe line. After unloading operator note time and fill the weigh bridge slip and give it back to driver.
Lever Brothers "ankers %Big Bell)*2
*ompany has its own tankers, which are called .ig .elly. These tankers have facility to maintain the temperature of material.
:aterial loaded in big belly is directly stored in storage tank with the help of pump. .ut before unloading pipeline is clear with the
help of steam.
Process Ma1 of "allo4 ecanting
%c*. (,2
Truck loading 2!A reaches at unloading point. 2!A is unloaded and store in storage tank directly from tanker with the help of
pipeline and pump.
%d*. Li:uid !austic
Truck loading caustic reach at unloading point. 2river gives weigh bridge slip to operator. *austic is first unloaded in drop tanks
and from drop tanks caustic is shift to storage tank with help of pump. Two drop tanks are use to unload the tankers. *apacity of
these two drop tanks is +9 tons each. Two storage tanks %T BB and %T +9 is use to store the caustic. *apacity of these tanks is >9#
tons each. After unloading operator fill the weigh bridge slip and give it back to driver.
Process Ma1 of (, ; Li:uid !austic ecanting
%e*. Recei1t of Packing and Ra4 Material
;acking and raw material is unloaded in two hangers. &ne is hanger no + where personal product packing and soapry chemicals.
&ther is hanger no 4 where packing soapry and raw material is stored. Truck loading packing and raw material first reach to weigh
bridge where operator on weigh bridge not the truck number and time of arrival and send it to hangers for unloading.
&perator on receipt of packing and raw material check the truck invoice which contain name of material, type of material,
purchase order number, and $uantity. &perator unloads the truck and keep material to their specific place. 2uring unloading
operator also take sample of material which is sent to lab for inspection. &perator checks the material, count it and match the
$uantity received with $uantity written on truck invoice. After unloading material truck good receipt is prepared which contain
supplier name, $uantity received packing, and description of product and discrepancy. Tow copies of this receipt is given to driver
and two copies are keep in office. T80 contains the following data. %upplier name, date of receipt, city name, date of sending,
$uantity, packing, description of goods, discrepancy if any. After T80 is issued the data is posted in Ledger. !ollowing data is
posted in ledger. 2ate, truck no, purchase order number, name of company, invoice number, item code, description, $uantity,
pack, price, 80,0 no, $uantity ordered, and remarks. (ith the help on entries in ledger than data is feed in :!8 ;ro.
Process Ma1 of Recei1t of Packing ; Ra4 Material
<. Material #ssue Process2
,ssue process of oil and fat, 2!A, li$uid *austic, packing and raw material is different with each other.
Issue Process of Oi2 and Fat8
%torage tanks are kept full. &perator notes the level of material store in storage tank with the help of meter gage. Then he shifts oil
and fat from storage tanks to pan room tanks. 2uring issue he takes sample of material and makes a sample slip and send sample
with sample slip to lab. After issuing operator note the level of tank. Then $uantity of issue is calculated by subtracting last level
noted from current level note. Then operator fills the issue sheet and makes two copies of it. &ne is given to operator of ;A) room
who is present there. &il and fat issue sheet contains following type of data. .atch no, shift, $uality, tank no, staffing, sample no,
net, refineryHpan room tank no, signature of :aterial %tore 2epartment operator, signature of pan room operator, and remarks.
&ther copies are sent to office where related officer with the help of this sheet feed data in :!8 ;ro and makes a $uality order and
send it to lab.
Issue Process of %FA.
&perator notes the level of 2!A storage tank. 2!A is directly issue to ;A) room from storage tank. After issuing operator check
the level of storage tank and notes the difference on issue sheet. &ne copy of issue sheet is given to ;A) room operator and other
copy is send to office. )et day pan room sends an issue note to office and related officer feed data in :!8 ;ro.
Issue Process of Li;uid Caustic.
&perator notes the level of storage tank. Level of tank is measured with help of measuring tape. After issuing operator check the
level of storage tank and notes the difference on issue sheet. &ne copy is issue sheet is given to operator of ;A) room and other is
send to office. )et day ;A) room sends an issue note to office where related officer feed data in :!8 ;ro.
Process Ma1 of #ssue of Oil ; (at
Issue of Packin, and Ra/ "ateria2
,ssue of packing and raw material handle three operators. &ne operator issues packing material to personal product department.
%econd issues packing material to soapry and raw material to )%2. Third operator issues chemicals to soapry and personal
product department, perfumes and colors.
,ssue note is sends to material store one day before issue from manufacturing departments. 0elated officer in store notes the name
of material and $uantity of issue on notebook of related operator.
)et day operator note the $uantity of issue on lot card from where he is issuing and notes this lot number in his notebook. (ith
the help of fork lifter material is send to manufacturing departments. After issuing material operator notes this lot number in issue
note. 0elated officer post this data in :!8 ;ro.
Return of Material2
,ssued material can be return to material store from manufacturing departments because of two reasons.
8oods not re$uired
0e3ected due to any problem.
,f goods are returned on first base than manufacturing department send a return note with material to store. This material is
stored near the lot from where it was issued. A new lot number is posted on this material. 0elated officer post return note in
system. This material will issue first on re$uirement.
,f goods are return on second basis than first a lab assistant check the material. ,f material is re3ected than it is stored sprat place
specific for re3ected material.
A card which contain lot number from where it was issued and number of issue note against which it was issued is posted on this
material. 0elated officer sends e/mail to %upplier *ompany. The %upplier *ompany inspects the material and if it is re3ected than
it send fresh material to company.
Process Ma1 of #ssue of Packing ; Ra4 Material
Bu)ing e1artment
The word DbuyingE means purchase of any thing or any merchandise or item. This function is performed by buying department in
any organi-ation.
.uying or purchase is one of the ma3or functions of any company of organi-ation. (ithout it no one organi-ation can run
successfully in the field of business. %o we may say that buying is the soul of company. (ithout buying all departments of the
company will be failed.
O<=ectives of <u5in, de4artment
The main ob3ectives of any buying department is to purchase merchandise and services with the ob3ect of ensuring the
specification, $uality, price, time of payment and timing of supplies are consistent with the overall need and ob3ectives of the
business.
Functions
!ollowing functions are performed by the buying department of 0.!.
To buy all production raw materials including all types of material and packing material.
To buy administration department re$uesting items.
To buy all engineering re$uesting items Fall types of machinery 1 spare partsG.
;urchase of medicine for surgery.
;urchaser of (.*.%.&. seasonally for ?.! 1 0.!.
All types of factory purchases through buying department.
%ales of scraped or surplus items of various department relating capital goods.
Procedure of the 4urchase of ,oods
The company has maintained a fine system of buying. ,n fact, buying department 0.!. performs its functions on local basis. .ut
imported raw material 1 packing material is bought by the central buying department head office. The procedure of buying can be
eplained with the help of following charts'
;urchase re$uisition
<uotations calls
%ummary of $uotations is made
;urchase order
8oods receipt
80,0 is prepared
%tore report
80,0 is accepted
;ayment
Purchase re;uisition
Any department which has a need of something sends purchase re$uisition regarding its re$uirement to buying department, who
arranges for the purchase of re$uired items as soon as possible. Three copies of purchase re$uisition are prepared. These copies
distributed as follow'
>
st
1+
nd
for buying
4
rd
for re$uisitioning department Fre$uest for purchase itemsG
Ca22in, summar5 of ;uotations & 42acin, of order
!irst of all the buying department invites to general public for $uotations and to some particular parties. After receiving $uotations
summary of $uotations is prepared and made comparison with price $uality etc. After that the party is decided on which an order
is to be placed according to the terms 1 conditions. Then purchase order is prepared in the favor of succeeded party. All
information regarding delivery and freight is mentioned in purchase order. !our copies of purchase order are prepared and
distributed as follow'
>. (hite for accounts department
+. ;ink for re$uisitioning department
4. 8reen for buying department
A. .lue for payment department
Recei4t of ,oods & 4re4aration of &RIR
(hen goods are received from supplier then 80,0 is prepared by material store department and sends to lab for inspection. ,f
goods are accepted in the laboratory then these are placed in the concern store other wise not. !our copies of 80,0 are prepared
and distributed as follow'
>
st
for account department
+
nd
for buying department
4
rd
for concern department
A
th
for laboratory
,n case if the material is not accepted then a sundry sales F%%AG advice or sundry sales credit will be made to return the goods to
the supplier. Three copies of %%A are prepared'
!irst for re$uisitioning department
%econd for accounts department or distribution department
Third for buying department
Pa5ment
(hen 80,0 is accepted then one copy of it is submitted to payment department, where the payment department prepares
payment sheet and makes advice to the cash office for payment after satisfying the other formalities.
SUPPL& !/,#$ M,$,3-M-$"
The firm has segmented structure of supply chain :anagement. The purchasing, production control and distribution departments
have responsibility for material management.
%,TA0A *=E:,*AL% is the supplier of local raw material of soda ash, caustic soda etc.
%upplier selection is based on price, $uality and delivery.
%A!ETI %T&*?
+ to 4 weeks for basic FimportedG material
+ weeks for packaging material
L-, "#M-
>4/ +# weeks
(OR-!,S"#$3
%emand Forecastin,
-. &orecast is t#e prediction o& &uture events used &or t#e planning purposes/)
Forecastin, Techni;ues
T#ere t#e t#ree &orecasting tec#ni0ues are availa1le &or t#e purpose o& t#e &orecasting o& t#e demand, w#ic# are as under)
2udgmental Met#od)
Causal Met#od)
Time 3eries Met#od)
The usage of these techni$ues depends upon the availability of the data about the past.
Forecastin, at LBPL
The forecasting techni$ue, which is being followed by L.;L, is the 0ualitative techni$ue.
Sa2es Force Estimate
%ales force estimate of forecasts compiled by the members of the companys sales force Ftheir dealers in each regionG about the
future demand of the product. They are using this techni$ue because they believe that their estimates are correct since the dealers
are much near to the market. :arketing 2epartment is actually involved much in forecasting. They observe the trend of the
market and they set their target of sale then they tell to the production that what is their target then production department make
productions according to the target set by marketing department.
Time Series
2emand for the future periods is also determined by the time series method. =istorical data about the past demand is the basis for
the time series. The data is used for the demand pro3ection for the coming periods.
"arketin, Research
:arketing research is also conducted by the firm. 2ata obtained is used to determine the customer demand pattern, and trends.
Effective Ca4acit5
,t is the maimum output that a process or firm can economically sustain under normal conditions. (hen operating close to peak
capacity, a firm can make minimal profits or even lose money despite high sales levels.
&perations manager must eamine the three dimensions of capacity before making capacity decisions'
3i4ing capacit$ cus#ions
Timing and si4ing expansion
Linking capacit$ and ot#er operating decisions
The capacity cushion is the amount of reserve capacity that a firm maintains to handle sudden increases in demand or temporary
loses of production capacity it measures the amount by which the average utili-ation falls below >## percent.
C.!.C,T5 C63H,O7 8 (99: ; 6T,L,<.T,O7 *.T' =:>
Another issue of capacity strategy is when to epand and by how much there are two etreme strategies'
T#e 'xpansionist 3trateg$, which involves large infre$uent 3umps in capacity. ,n this strategy organi-ation remains ahead/of/
demand.
T#e "ait and 3ee 3trateg$ could be to follow the leader, epanding when others do. :anagement may choose one of these two
strategies or one of closely linked to strategies operate between these etremes. *apacity decision should be considered
throughout the organi-ation. (hen managers make decisions about location, resource fleibility and inventory, they must
consider the impact on capacity cushions.
*apacity cushion buffer the organi-ation against uncertainty as do resource fleibility, inventory and longer customer lead times.
,f a system is well balanced and a change is made in some other decision area, then the capacity cushion may need changes to
compensate.
The categories and si-es of the soaps manufactured at 0! are given below'
!ard Soa4
L,!E.U&IF 0ed 1 (hiteG >A#gms.
69gms.
T&,LET %&A;%
LUK ;,)? >A#gms
;U0;LE 1
80EE) 69gms
(=,TE
L,!E.U&I 8&L2
;ink 1 (hite >A#gms
69gms
.0EEME C9gms
L,0,L !0E%= >A#gms
0A,) !0E%= 69gms
Main point a1out t#e capacit$ are given 1elow
*apacity is measured in terms of output.
:easuring unit is per ton
%i-ing capacity cushions are used for the capacity
;lanned lead/time for changing a dice is C hours.
A lines are available for the hard soap FlifebuoyG.
*apacity of per line is +># tablets H min.
%hift production is A# tons H shift
2aily production is >+#/tonsH day with 4 daily shifts.
!or toilet soaps 4 lines and 9 machines are available.
*apacity for toilet soaps is >6#H min while the average capacity is >C#H min.
Annual production capacity for life buoy is 4#### tons to 49### tons.
Utili-ation P Avg. *apacityH *apacity
Utili-ation for toilet soap is 69L
Utili-ation for hard soap is 6"L Effective capacity
Utili-ation for toilet soap is 6#L ;eak *apacity
Utili-ation for hard soap is 64L
!ost e1artment
This department provides very useful services to the company and is responsible for costing of the products. This department does
the yield calculations of the followings'
%oapery fatty acids
*rude glycerin
0efined glycerin
Edibles
!or the calculation of yield, these elements are taken into consideration'
%torage lossHgain
.leaching loss
;acking lossHgain
Un/accounted loss
%torage LossH8ain
(hen oil and fats are received by the material store, sample is taken for measuring percentage of !ree !atty Acids F!!AG and
moisture. All these materials are received by the stores and then issued to production department.
At the $uarter end, cost department do the stock taking of all the tanks of oil and fats and also draw a sample for determining
moisture. )ow the cost department see that what is the difference between the physical nPand book stock. This deference will be
the loss or gain and charged to the production account.
B2eachin, Loss>&ain
!or the purpose of bleaching the Activated Earth is used. The Activated Earth absorbs some amount of tallow. This absorption is
called bleaching loss. *ost department calculates this loss.
Packin, Loss>&ain
(hen the finished products are packed some packing loss or gain took place at this stage. %ome products are packed above the
standard weight and some less. ;acking loss or gain is also determined.
'n?Accounted Loss
%ome losses are not seen in manufacturing process, these are called Un/accounted losses.
Re4orts of Cost %e4artment
*ost department looks into the yield and performance of the factory with the help of various reports. These are following'
>. 2aily stock report
+. ;roduction accounts
4. 2aily production report
A. ;ower 1 %team production report
-. ail) Stock Re1ort
This report tells that how much raw material is transferred to plant, what is the weight of activated earth used, how much fats are
spoon/fed, soap cleaned, lye transfer to glycerin section, lye treated and refined glycerin effected into drums. (ith the help of
these information, this department takes care of yield.
0. Production accounts of the 1roducts
*ost department makes production accounts of all products with the help of followings'
0aw material cost
chemicals
;acking material
@ariable direct material
Ra/ materia2 cost
@alue of material consumed is taken from consumption schedule and is charged to production accounts after making ad3ustment
of opening and closing stock.
Chemica2s
*ost of chemicals and taken from consumption schedule and prorated on products pack wise and in these cases whose closing
stocks are chemical mied value is charged to production accounts after ad3ustment in opening and closing stock.
Packin, materia2
;acking material but is taken from consumption schedule and then total cost is charged to production accounts of the products.
@aria<2e direct materia2
,t is 3ust as packing material but at present crude glycerin stock has accumulated hence we have to keep variable chemicals value
e$uivalent to its weight in stocks.
%team and power are taken from variable direct schedule in total against their location but same case with crude glycerin, which
has been eplained, in variable direct chemicals.
1. Po4er ; Steam 1roduction re1ort
Steam
(eekly steam production report is received and from these $uarter reports are prepared. :eter reading of all steam main meter
and sub/meter are done at $uarter end. *ost of steam is calculated and transferred to all the production departments where steam
is used. *ost of burners used in factory is subtracted from total %ui gas bill.
Po/er
:eter reading of (A;2A main meter, and own generator and sub/meter in the factory are done at $uarter end. ;ower is allocated
on all factory location on the basis of sub/meter5 the technical management gives the standard bases. The cost of power is changed
to production accounts.
3. ail) 1roduction re1ort
The reports of daily production are submitted by the production department to cost department. This report helps in watching
what is the production of certain product on certain day, and how many transferred to warehouse and what is the present balance
on department floor.
Cost contro2 documents 4re4aration
!ollowing documents are prepared for cost control purpose.
%tandard yield vs. Actual yield
%tandard chemical valuation vs. Actual chemical which is used in production
%tandard stem 1 power vs. Actual steam 1 power
%tandard man hours vs. Actual man hours
*alculation of variable cost of sales
*ost department prepares daily, monthly and annual cost reports. These reports are used by the management for control purpose
whether the cost is according to the standards are not. The area of difference is pointed out and a better control is eerted for the
future. ,t is also important because if a company is able to lower its production it works more than to increase the market share. ,t
is easy for a company to lower its cost because it is in its own control while the market is beyond the control of management.
,n Lever .rother the cost of sales is calculated in a very simple way according to the standards of accounting.
The report starts with the opening stock of :aterial, %teamH;ower and 2istribution. ,n these opening stocks the cost of oil and fats
which comes from oil 1 fat consumption report, the chemical cost which is obtained form chemical consumption report, cost of
packing material obtained of packing material consumption report, cost of steamHpower obtained from steamHpower consumption
report, for that day production is added and it gives variable cost of production. !rom this variable cost of production the closing
stocks of material, steamHpower and distribution that day is deducted which gives total cost of sales.
Pa)ment e1artment
2ifferent department of L.;L 0.! are working under *ommercial 2epartment. ;ayment 2epartment is one of them. ;ayment
2epartment is also called A;@ FAccounts ;ayable @ouchersG. The purpose of this department is to make the arrangements for the
payments of the factory liabilities.
A;@ section is further classified into two sections
A;@ >
A;@ +
,P.9
A;@ > is classified into further three sections'
;acking and materials payment section
Local payment section
*hemicals and engineering stores payment section
Functions of AP@ -
!ollowing functions are performed by A;@ > department'
-. Local 1a)ment2
Local payment includes'
Engineering stores items Fspare partsG
0epair of building
,tems of canteen, mess, entertainment etc.
(ash white of building
:edical bills of non/management staff
+) ;ayment of oil 1 !acts
?. ;ayment of utilities bills
@. ;ayment of packing material
A. ;ayment of chemicals and perfumes
B. ;ayment of stationery and printing
C. ;ayment of medicine
D. Allocation of head office debt and credit notes.
E. ;reparation and submission of weekly and monthly
%tatements through advance ta system.
,P. <
A;@ + makes a payment of wages and salaries for the workers of LA.;L 0ahim Iar ?han !actory.
Functions of AP@ 0
!ollowing function are performed by A;@ +
;ayroll relating to are permanent, temporary, badli and apprentices
;ayments to all contracted employees
;ayments to all transporters and other contractors
Wages ; Salaries
Employees of the company are divided into two groups'
() Management
+) 7on;Management 3ta&&
Every department of production sends a location sheet to account department in which it mention that how many hours have been
spent on each location. The A;@ + also receive information about the over time etc. on the bases of these information it prepares
salaries sheet and submits to A;@ > for making che$ues. A;@ > prepares che$ue or salary sheet and sends to :uslim *ommercial
.ank Limited 0I?. That bank is situated within the premises of L.;L 0.!.
)on/:anagement salaries and wages are paid by the :*. 0ahim Iar ?han. :*. is rendering very useful services to the company
and its employees.
!or salaries of management, 0.!. receives debit note from the head office because salaries to the management are paid by the head
office. All managements salaries are transferred to managers bank accounts. (ages of workers are paid on 4
rd
, and management
on +>
st
of every month.
;rocess of (ages 1 salaries !low charts'
Procedure of 4a5ment
All payments have the similar procedure. (hen any department of the factory want to purchase any item for production, repair
etc. then it sends re$uisition to the buying department. These items can be purchased from 0.I.?. as well as from other cities of
the country and some items are also imported.
Those items which are purchase from 0I? are called Dlocal purchasesE and the payments of such items are known as Dlocal
paymentsE. (hen goods are bought from outside 0.I.?. such purchases are known as Doutside purchasesE and payments of such
purchases are called Dout side paymentsE.
A;@ section makes the payment sheet at that time when it receives the following documents'
;urchase order
80,0 accepted
,nvoice from supplier
;urchase order is send by the buying department to A;@. 80,0 is submitted by the re$uisitioned department F(ho re$uest to
buying department for the purchase of itemG. ,nvoice is send by the supplier to the payment department. ,f the 80,0 has been
accepted by the concerned department then payment department will prepare the payment sheetHpayment voucher.
The payment sheet includes the following information'
;arty code number
0eference number
,f payment through che$ue then the che$ue number
.ank name
*lassification number
8ross amount payable
Ta deduction Faccording to various ratesG
)et amount payable
(ith the help of above information if amount is 0s.>9# then payment is made on cash voucher. (hen this amount is more than
0s.>9# then payment is made through che$ue. (hen payment is made through che$ue then re$uisition for cash office is generated
through system with the help of payment sheet. The re$uisition is prepared by the computer automatically. The system also
mentions the che$ue Q on the monitor that is also written down on the payment sheet. After that payment sheet is submitted to
the cash office. The cash office prepares the che$ue through computer. The che$ue is send to authori-ed person for authori-ation
of payment. After that if the payment is re$uired to make through 2.2HT.T then 2.2HT.T is prepared. The che$ue is posted or
given by hand to the respective supplier. The suppliers get the amounts from the banks of L.;L. ,n this way the payment is made
to the respective supplier.
After making the payments to the concerned persons the cash office sends the payment sheet to A;@. The payment department
has various registers. &ne for local purchases, one for outside purchases, and one for engineering sores items and so on. All the
information is transferred to respective registers.
,n register there is companys name, companys code, address, phone Q etc. if there is no name of a company then its name is
written down ,n the register and then information are transferred to the register.
Ca4ita2i9ation of Ca4ita2 Pro4osa2
,n a year four Times capitali-ation procedure is completed. At The end of each $uarter capitali-ation of *apital ;roposal is done by
the *apital ;roposal Account 2epartment. !or various head of accounts, *ompany has mentioned various numbers of *apital
;roposal 3ust like as
6>HLH>#>
6+HLH4#>
64HLH4#B
6AHLH4#C
Assets Transferred advice8
Assets transferred advice is that memorandum which is used to transfer various assets from one location to another location. %o
we may say that it is Dinter Unit adviceE.
!our copies of ATA are prepared, of their authori-ation5 one copy is send to Account 2epartment and others to respective
departments.
Bookin, authorit58
,t is the permission of 3ourney. (hen any employee travels for company business or for personal matters then he or she has to take
the permission from some person who has been authori-ed by the company to give the permission to such person for business
purpose. Traveling facility is provided to :anagement and )on/:anagement staff FNunior :anager and aboveG.
After this when certain person comes back, he sends a DTraveling Ependiture %tatementE with his signature, to A.:. Accounts
2epartment. .ooking authority is affiliated of this traveling approval from authori-ed person.
Summar5 of Credit Sa2es of PO%>Estate Sho4
!or factory employees including all management and non/management, certain companys manufactured goods are sold to them
on subsidy like as soaps, 8hee, (heat, tea etc on concision rates. !or this purpose one shop has been opened by *ompany in Lever
Estate named D;&2 or Estate %hopE.
!rom ;&2 shop daily D*ash %ales %ummaryE is received with cash memo to the Accounts 2epartment. At the end of each month
one N@ is passed for this subsidy and charged to. This summary ,s prepared according to book month because it is internal
transaction of the company.
Locum ATenses Authorities8
This is a memorandum which means transfer of responsibilities to another responsible person. (hen one manager goes on leave
then he sends a copy of locum tenses authority to accounts department that now this person is responsible for my 3ob.
orkin, ca4ita28
To know the financial position of the business each month of the financial year Dworking *apital reportE is prepared. (ith the help
of (orking *apital 0eport, company knows how much capital is circulated in business. And also know that how many accounts
receivable, accounts payable and inventories eist.
Two copies of (orking *apital report are prepared. &ne is sent to head office monthly basis while second is for office use.
Over !ead Ex4enditure re4ort8
To control the repair epenses of the factory D&ver =ead Ependiture 0eportE is prepared on monthly basis. All locations
mentioned in workshop, for eample (orker Administration 2epartment, for their salary, traveling epense, building of the
workshop administration department all revenue ependitures are *alled overhead Ependiture report.
After obtaining this report one N@ ,s passed by Accounts 2epartment according to various aHc Q and locations.
"onth End ork Order re4ort8
This report is received from 0.!. Engineering 2epartment. ,t shows the detail of that work done on repair and maintenance, in
other words those epenses which incurred on repairs and maintenance up to at the end of each month. This final report is send
by Engineering 2epartment to Accounts department. Against this report Accounts 2epartment prepares two N@s5 one for *apital
;roposal Administration 2epartment while second against various locations.
Reconci2iation
0econciliation functions are also performed in financial section. !ollowing 0econciliation %tatements are prepared in this
department.
0econciliation %tatement .etween (alls ,ce cream and 0ahim Iar ?han !actory
0econciliation %tatement .etween Engineering stores 1 ;ayment section
0econciliation %tatement between ?arachi Tea !actory F?T!G
0econciliation %tatement between ?arachi edible oil The 1 8hee !actory
0econciliation %tatement between =ead office and 0.!
0econciliation %tatement between .rook .ond And 0.!
-m1lo)ees Relations e1artment
The assets of the organi-ation like machinery. According to the ;ersonnel 2epartment of L.;L 0.!., there are things which are
common between workers and machinery of the organi-ation. !or eamples'
R :achinery re$uires repair where as workers re$uired training.
R .oth are used for production purposes.
R .oth re$uire improvement.
R .oth become inefficient if proper attention is not given.
There are many 2epartments which work for different areas. %uch as ;roduction 2epartment works for the controlling of
production. %ales 2epartment works for the sale of ;roducts. !inance 2epartment arranges the finance for the organi-ation and so
on. Therefore there must be a department for the controlling, motivation and training of the employees. !or this purpose L.;L
0.!. has an Employees 0elation 2epartment. The ;ersonnel 2epartment of L.;L 0.!. performs the following functions'
(unctions
S Employment
S Transfer and ;romotion
S Training
S *ompensation Administration
S =ealth and safety
S .enefits and %ervices
S :aintain relations with labor
S =uman 0esource planning
Em42o5ment8
;ersonnel 2epartment makes arrangements for the recruitments of the employees. !or this purpose it collects information about
the desired employees functions and then defines the 3ob re$uirements and 3ob profile. The ;ersonnel 2epartment makes all the
arrangements for the report meant of new employee, ,t sees better such employee is available in the organi-ation or not. ,n case of
no, it gives the advertisement in the newspapers. ,t also collects all the applications of the applicants. ,t also makes arrangements
for test. The ;ersonnel 2epartment uses different tests for different applicants. After that it arranges the interviews for the
succeeded applicants. Usually the interviews are bland of different types of interviews. These interviews include panel interview,
structured $uestions etc. The background information about the succeeded applicants is also gathered by the ;ersonnel
2epartment.
Transfer and Promotion8
The ;ersonnel 2epartment transfers the workers from one department to other department according to the circumstances. The
function of promotion of the workers is also performed by this department after consulting with the top management and
analy-ing the past record of the workers.
Trainin,8
!or smooth production and efficient work there must be some training programs for the workers, staff and management. Training
function is also performed by the ;ersonnel 2epartment. ,t provides on the 3ob training to the eisting workers and arranges
programs for new employees.
The ;ersonnel 2epartment provides the following training facilities to management, staff and workers.
R &n the 3ob training
R Lectures
R %eminars
R *onferences
The company has a full time training manager who conducts the different training programs according to circumstances. The
management is also sent abroad for certain training programs.
Com4ensation and Administration8
The Lever .rothers ;akistan Limited conducts the wages survey in the market and of the ma3or competitors after every two years
and compares the results with its own package and there is any difference then ad3ustment is made. The desire of L;.L 0.!. is that
its employees must be satisfied in every aspect because ,t has the opinion that satisfied employees are more productive as
compared to dissatisfied. The L.;L gives 4# different types of allowances to its employees. %ome of these are annual, some are
semi/annual, and some are monthly while some are once in the whole employment period.
!ea2th and Safet58
L.;L 0.!. is much conscious about the health and safety. ;roper e$uipments are available in all areas of the production where
sensitive machinery is in operation. !urthermore, the organi-ation has a well e$uipped :edical *enter where :..% doctors are
available in order to meet with emergency cases. The ;ersonnel 2epartment provides all possible instruments to all workers and it
has the desire that every worker should use those instruments in order to avoid losses. !ollowing are the ,nstruments which are
provided to the workers'
R Long shoes
R =elmets
R 8loves
R !ire ,nstruments
Benefits & Services8
L.;L 0.!. also provides certain benefits and services to all its employees. A list of some benefits and services is given below'
R Attendance Allowance
R 8ood attendance award
R 2eath *ompensation
R *anteen allowance
R Tea Epenses
R *onveyance Allowance
R !amily medical allowance
R !amily medical care
R =ouse rent Allowance
R Utilities allowance
R :eal Allowance
R 0ehabilitation Allowance
R 0etirement
R Nersey
R %hoes
R Tonga Allowance
R Traveling Announce
R =a33
R :arriage Assistance To minorities
The organi-ation has a club for the employees of the organi-ation. ,ndoor and outdoor facilities are also available. The company
also celebrates Annual %ports 2ay on which different games are played and pri-es are given to the succeeded players by the
company.
/uman Resource Planning2
The most important function performed by the department is the =uman 0esource ;lanning. !or a smooth production there must
be an effective =uman 0esource ;lanning. !or This purpose it makes long term and short term plans to make the labor available
for production. %hort term ;lans are made for those places where workers have gone on holidays or absent. Under these plans it
has two types of recruitment'
>. .adli
+. Temporary
!or long term plans workers are recruited from the temporary workers who have become skilled one.
Motivation2
The organi-ation has the opinion that motivated workers are more productive than unmotivated workers. To motivate its
employees the organi-ation uses both intrinsic and etrinsic approaches for motivation its employees.
Intrinsic A44roach8
R Nob rotation
Extrinsic A44roach
R Training
R Appreciation letters
R .onuses
R *ash awards
R 8ifts
R %hields
R *locks
R ;ut the name of the workers on the notice board who perform an ecellent performance. To motivate the employees the
organi-ation has introduced a program name &!, F&pportunity !or ,mprovementG.
,M#$#S"R,#"#O$ -P,R"M-"$"
Lever .rother ;akistan 0.!. has also an administration department that is controlled by the personal department. !ollowing
functions are performed by the Administration 2epartment'
R Arrangements for providing for providing transport facility to management staff.
R Arrangements for the 3ourney of management 1 non/management staff.
R Arrangements of stationery and printing.
R ,ssuance and maintenance of stationery record.
R To provide entertainment to management during working hours.
R 0eceipts and dispatch of letters, documents etc.
"rans1ort (acilit) to Management Staff
Usually the management staff has to go to =ead &ffice ?arachi for business matters then they need transport. This arrangement is
made by the administration department. The company has its own transport for drooping and leaning of management staff at the
Air ;ort, or 0ailway %tation.
,rrangement for =ourne)
(hen a :anager, Assistant :anager or any Nunior :anager wants to go outside the city either for personal or business purpose,
they inform to the administration department about their intention. They instruct to the department for making the arrangements
of 3ourney.
An arrangement of 3ourney includes reservation of seat in train or in airplane as the case may be. After making such arrangements
the administration department informs to the concerned person about the reservation and other information.
Purchase of stationer) ; 1rinting of desired documents
%tationery includes pen, paper, pencils, rubber, sharpener, etc. all these items are purchased by the administration department. ,t
sends the purchase re$uisition to the buying department for the purchase of desired items.
The administration department also prints all these documents, vouchers invoices sheets etc. which are used by various
department of the company.
#ssue of stationer)
All stationery is issued by the administration department to various departments of the company. ,t also maintains the record of
such stationery. Administration department prepares reports about the issuance of stationery on monthly basis.
Maintenance of Building
Arrangements of the repair and maintenance of factory building is made by the administration department.
-ntertainment (acilit)
Tea is provided to all management during working hours in order to keep the staff fresh and to improve their efficiency. All
arrangements for entertainment are performed administration department. Arrangements for entertainment includes purchase of
milk, sugar tea etc.
Recei1t and dis1atch of mail
The administration department receives mail and distributes it to the relevant person. ,n the same way it dispatches all the mail of
the company. :ail is made through &*%, T*%, or postal method.
#S"R#BU"#O$
)ow a days business is etended to a great etent. :arkets are widening briskly, so there is a great need to meet the re$uirements
of this large market successfully. There should be such a system of distribution that the supply of products to the markets should
be according to the needs5 this system should be Dsales loss proofE.
Lever .rothers has a system, which gives maimum results. %upply of product is monitored in such a way that there are minimum
chances of shortage in supply.
(U$!"#O$S
,n L.;L 0I? 2istribution department performs falling functions'
R 0eceives finished products from production departments.
R 0eceives monthly or weekly ;lans for distribution from :arketing 1 %ales 2epartment =&.
R To makes daily dispatch plan.
R To arrange transport facility for delivery of products.
R To pay Ecise 2uty and arrange ;rovision for Ecise 2uty according to legal 0e$uirements.
R To pay %ales Ta liability at the end each month up to +#
th
day of net month.
R And some :isc. 8eneral !unctions.
#S"R#BU"#O$ PRO!-UR-
!irst of all production is transferred to distribution warehouse by the production department. 2istribution department has two
warehouses, which are capacity wise "##T>9# tons Ffor soap and personal productsG and 9##T+## tons Ffor cooking oil.
2istribution department arranges the dispatch plan that is provided by the consumer services head office. Therefore products are
dispatched according to the dispatch plan. *ompany has various sales depots located in different cities throughout the country.
%uch as'
U aisala1ad
U Farac#i
U "a4ira1ad
U La#ore
U *a#im 5ar F#an =central>
U *a#im 5ar F#an =sout#>
U Dera ,smail F#an
U Multan
2istribution department sends products directly to distributors or to sales depots as per instruction of sales department head
office. %ales department makes sales contracts with different parties and supply by advising distribution in 0ahim Iar ?han
!actory.
All sales depots are controlled by head office. %ales department send plans for despatch to these depots which take necessary
action according to plan.
0ahim Iar ?han %outh depot covers the area of .aluchistan and %ind while *entral covers the area of ;un3ab and )(!;. There is
another depot named Dover flow depotE in 0ahim Iar ?han. (hen there is shortage of space in factory warehouse, production is
transferred to this depot.
2istribution department 0ahim Iar ?han !actory sends despatch plans to over flow depots. This depot arranges the supply
accordingly. !or all the despatches a despatch advice is prepared in which the full detail of the products are maintained. !ive
copies of despatch advice are prepared.
R &ne copy is sent to consignee through transporter.
R &ne copy of 2.A is sent to customer service head office.
R &ne copy is sent to accounts department.
R &ne is for distribution department 0ahim Iar ?han
R &ne copy is given to transporter that is called acknowledgement.
#S"R#BU"#O$ !/,$$-LS
L.;L has a centrali-ed distribution system in which the products are distributed from one warehouse to the selected distributor of
the company, and then the distributor make the product available to the wholesalers and at the end the product is transformed to
the retailers to be purchased by the final customer.
The company had direct relations only with the distributors for making the product available to the target market. ,t deals with the
distributors on net and advance payment bases and does not give any credit facility to them. =owever the company provides
different commissions incentives. There are many certified distributors of L.;L operating in almost all ma3or areas of the
country.
%ometimes when the company introduces the same product line in different innovation style then it uses the following channel of
distribution. The company has specifically directed its distributors to provide that innovative products to retailers skipping out the
wholesalers in the channel. The basic reason for doing this was to eliminate the wholesaler commission so that the price can be
placed at relatively lower level.
*hannel is like this
:anufacturer FL.;LG *ompany warehouse
*onsumer 0etailer 2istributor
,n short the intense coverage of market is the basic aim of L.;L distribution policy.
>U,L#"& !O$"ROL
<uality is the use of techni$ues and activities to achieve, sustain and improve $uality. ,t involves integrating the following related
techni$ues and activities'
>. %pecification of what are needed.
+. 2esign of the product or service to meet the specifications.
4. ;roduction or installation to meet the full intent of the specification.
A. ,nspection to determine conformance to the specification.
9. 0eview of usage to provide information for the revision of specification if needed.
B. Utili-ation of these activities provides the customer with the best product or service at lowest cost. The aim should be
continuous $uality improvement.
OB=-!"#.-S
R &!, 7 &pportunity !or ,mprovement
R Always looking for improvement.
R The continuous improvement of all services through total involvement of all employees.
R The developing and the strengthening of partnership with eternal and internal customers and suppliers.
R ;roviding innovative and higher $uality products and services to achieve total customer satisfaction by understanding their
re$uirements and anticipating their future epectations or needs.
(U$!"#O$S
R :onitoring annual targets for $uality improvements in all areas.
R *reating a culture of customer focus striving to become the lowest cost producer through agreed annual cost reduction program.
R @alue people by understanding and drawing upon their strength i.e. abilities and knowledge and make efforts for their training
and development.
S",3-S
RA "ATERIAL8
(hen raw material is received the $uality of raw material is inspected according to the standards. According to these standards if
the personnel of receiving department will inspect according to the standards. ,f there are a lot of 9## and they choose >4 samples
from the whole lot then they select the sample from the upper and lower and right and left side of the whole packet. ,t means that
they select the sample by way of diversifying the area. ,f the + units of the sample are re3ected then the whole lot will be re3ected
and if the lot is re3ected then they call back the vendors and vendor check that lot again. ,f the lot is very much needed by the
production department then they place a written re$uest. The >##L inspection is done on it. ,n this case, they call the vendors or
their inspectors and they check it on >##L basis. .ut this happens in very rare cases.
&n the other hand if the lot is accepted then it is remarked as 80L Fgood received lotG and sent to the store. (hile four copies of
80L are made and sent to the following four departments'
-. ;urchase 2epartment
0. <uality *ontrol 2epartment
1. %tore
3. !or computer entry
%'RI$& T!E PROCESS8
(hen the product is in/line then $uality inspector check it at every stage of process. ,f these inspectors will sign it for net process
then product will go for net process. ,f they do not sign it then the work will stop. Then for the accepted and re3ected production,
the $uality inspector will give report. This report has also included the sign of supervisor of process area. %o that analy-ing the
re3ection and acceptance Lage for net rectification and improvement.
Then report will pass to the production manager so on this base they can make the weakly and monthly report. And it will pass to
the top management. ,n this inspection is done at every stage and will pass towards the top management. The ,%& has given them
standard for the whole process. ,t also includes the initial cost but the running cost is more safe and effective because the chances
of re3ection are reduced. (e can say that the chances of re3ection will be controlled. ,n this way the $uality level is much improved
and it reduces the customer complaints. :onthly charts are also made and management also takes correction actions.
,f there is a need of corrective action then they will re$uest. The immediate action will be taken on that form and until the
corrective action will not be taken they production level will be ceased.
<uality control department has given their dimensions. And if there is any deviation from these dimensions then even the :2 of
the company cannot start the production. And charts are also following these dimensions everywhere in the production area.
(inancial anal)sis
Financial Highlights
Six months ending
Reference 30.6.01 31.12.00 30.6.00 31.12.99 30.6.99
Sales Rs.'000s 1 9,642,559 10,790,801 9,717,415 9,426,775 9,939,479
Profit after tax Rs.'0002 623,270 843,209 495,905 415,168 348,792
Diidends Rs.'000 3 498,520 1,103,869 438,698 332,586 332,347
Shareholders' e!"it#
$or %et assets& Rs.'000
4 1,383,352 1,258,602 1,517,879 1,538,483 1,451,690
%"m'er of shares 000s 5 13,294 13,294 13,294 13,294 13,294
(e# Financial
)enchmar*s
Sales +er share $Rs& 6=1/5 725.33 811.70 730.96 709.10 747.67
%et +rofit margin $,& 7=1/2 6.46% 7.81% 5.10% 4.40% 3.51%
-+s $Rs& 8=2/5 46.88 63.43 37.30 31.23 26.24
Diidend +er share
$Rs&
9=3/5 37.50 83.00 33.00 25.00 25.00
Diidend +a#o"t $,& 10=3/2 79.98% 130.91% 88.46% 80.11% 95.29%
)oo*.al"e +er share
$Rs&
11=4/5 104.06 94.67 114.18 115.73 109.20
Ret"rn on e!"it# $,& 12=2/4 45.06% 67.00% 32.67% 26.99% 24.03%
Sales2
The companyJs revenue streams are reported under three heads' foods, beverages, and detergents Fincluding personal/care
productsG. The foods group covers brand names J2alda .anaspatiJ and J;lantaJ cooking oil, and J(allsJ and J;olkaJ icecream. The
beverages group covers brand names JLiptonJ and J.rooke .ond %upermeJ tea. The detergent covers J%urfJ and J@imJ. ;ersonal care
products includes JLuJ, JLifebouyJ soap and J%unsilkJ shampoo.
2uring >=#> the company introduced new food packagings which resulted in greater volumes. The icecream units did well because
of enhanced product visibility made possible by door to door mobile vending. The overall sales under foods head improved by 0s.
++m F>=#>' 0s. +,B>+, >=##' 0s. +,96#G.
Lipton Iellow Label is the principal brand alongwith .rooke .ond %upreme in beverages. The biggest threat to its growth comes
from smuggled tea, available at 4#/A#L below company product prices, due to evasion of import duty and sales ta. The recent
move to increase import duty from +9L to 4#L is likely to benefit tea smugglers only. The policy makers needs to realise that its
overall revenue from tea imports increased significantly in >66C when the duty was reduced from 4#L to +9L.
&n the other hand if conserving foreign ehange and encouraging local cultivation of tea are the motivations behind the increase
in import duty then the best course of action for the company is to redouble its efforts in local cultivation of tea in :anshera,
where the ;resident :usharraf formally inaugurated the facility on " %eptember +##>. =owever the sheer whimsical adhocism of
bureaucracy can hardly be pardoned on these grounds.
The sales in beverages decreased by 0s. >>> m F>=+##>' 0s. A,#66, >=+###' 0s. A+>#G. (e epect sales to improve only
moderately in this category in the +=#> without much contribution to the bottom line.
Lastly, detergents are facing stiff contest from JArielJ of rivals ;rocter 1 8amble Fan important fact not mentioned in *hairpersonJs
reviewG. The personal care products also take a pinch from products of other Unilever group companies in :iddle East. 8iven the
lack of Jbe ;akistani, buy ;akistaniJ ideology in end/users, the personal care products are smuggled in huge $uantities and en3oy
the benefit of being eempt from sales and other taes, but the fact is not overtly highlighted in chairpersonsJ report. The sales in
detergent and personal/care group for >=#> decreased marginally by 0s. >9m F>=#>' +,64+, >=##' +,6>"G. (e epect sales to
increase only moderately in this category in the +=#>.
Re7ates ; ,llo4ances.
2uring the si months period ending 4#th Nune +##> the gross sales of the company was greater than the corresponding period
but the rebates and allowances showed an increase of 0s. 64m from 0s. 44#m in >=+### to 0s. A+4m in >=+##>.
-arning Per Share.
The improvement in eps is noticeable. ,n +=## the eps scaled new heights, unlikely to be matched or surpassed in the current
+=#>. This is further confirmed by :s. :usharaf =ai, *hairman and *hief Eecutive in her candid review when she says' Jcurrent
economic environment and uncertainty...may slow down revenue growth and profitability in the second halfJ. (e believe that the
eps for the current half will be in the range of 0s. A# to 99. The target eps is epected to be around 0s. 9#.
ividends ; Pa)out.
!rom shareholderJs point of view, the final dividend announcement of 0s. C4 per ordinary share on +#th :arch +##> was an
unepected but pleasant surprise. The presence of distributable reserves of 0s. B#A m makes it possible for the company to
maintain final dividend at last yearsJ level but such feat is unlikely to be repeated for atleast net couple of years. =owever the
strong payout of the company Frow ># aboveG is worth noticing.
!onsistentl) #m1roved Margins.
The most important thing to observe is that the company has been able to improve its bottom line, indicated by net profit margin
Frow "G, which considering only BL growth in revenues from >666 to +### is an achievement, the basic reason for which is the
improved cost control.
!ashflo4s.
Another important factor Fnot detailed in above table because of space limitationsG is that the company has recorded significant
cash earnings after a long time, which is good news for its shareholders. As a result, the overdrawn balance has gone down by 0s.
>BB m, from 0s. >6A in +=## to 0s. +C m in >=#>, which is no mean achievement. The half/yearly accounts of +##> also show that
0s. > billion is payable by the company in the net twelve months, which will be a drain on its cash resources but given the ability
of the company to borrow funds at reasonable financial charge from elsewhere, this too will pass. The company as a fast mover of
consumer goods needs to carry heavy inventory but gladly it has been able to control its inventory, and receivables properly. The
role of creditors as a source of financing is also significant. *reditors etc have balloned considerably by 0s. ">6 m from 0s. +,494m
at +=## to 0s. 4,#"+ m in >=#>. *reditors etc are almost >9#L of the net assets and it sure is an indication of over/trading. The
level of creditors etc needs to be bought down
Stock !hart
.
SWO" ,nal)sis
Strengths
Largest producing company of consumer products in ;akistan
En3oying economies of scale
8ood will in the market
%trong financial position
%ome of its brands have become the generic name for those products as 2alda in ghee 1 surf in detergents
:arket leader in tea industry with Lipton 1 .rook .ond
*apture "# percent market share of ice cream industry
=ighly sales brands in skin care i.e. ;onds and !air 1 Lovely
=ave %trong distribution channel in ;akistan
(ide product line in home wash
Weakness
=igh rates of skin care products
0atio of success of new product is low
=uge inventory stocks of raw material and finished goods
!ew new products are introduce in the market
O11ortunities
*apturing food industry by ac$uiring 0affan .est !oods
(ide scope of confectionery business for L.;L
L.;L is looking to ac$uire Tapal tea
"hreats
!acing tough competition in 8hee and *ooking &il
!acing tough competition in ice cream.
L.;L is facing a very tough competition in personal care and detergents by ;18
There is very tough competition in detergents and soap markets
=igh inflation rate is increasing the cost of imported raw material day by day
9?9?@AB
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