SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST

GRADUATE DEGREE IN INTERNATIONAL BUSINESS

ESTIMATING PRODUCTION AND MAKING SHIPPING BILLS OF HAND KNITTING YARN

SUBMITTED BY:
PRIYANK MAHAJAN

MBA-IB (2004-2006)
Roll No.: A1200306C62

INDUSTRY GUIDE FACULTY GUIDE

Mr. Mukti Ranjan Prof. Samit Sen Gupta
Officer (Commercial Department)

CENTRE OF INTERNATIONAL BUSINESS

AMITY BUSINESS SCHOOL-NOIDA
AMITY UNIVERSITY – UTTAR PRADESH
 CERTIFICATATE OF ORIGIN

This is to certify that Mr. Priyank Mahajan, a student of Post Graduate Degree in M.B.A.-IB, Amity Business
School, Noida has worked in the Vardhman Spinning & General Mills, Ludhiana, under the able guidance and
supervision of Mr. Mukti Ranjan, designation Officer (Commercial), Company Vardhman Spinning & General
Mills. The period for which he was on training was for 8 weeks, starting from 20th April 2005 to 14th June 2005.
This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in
International Business. To the best of our knowledge no part of this report has been reproduced from any other
report and the contents are based on original research.

Samit Sen Gupta Priyank Mahajan

(Faculty Guide) (Student)
 PREFACE

The present era is that of business and trade, without which probably the world would not survive for even the
second day. Amongst increasing competition, quick thinking, faster decision making based on a complete
knowledge and proper implementation of the decisions taken has become a must.

Keeping all this into mind, MBA course has been designed to make the students learn the virtues of how business
is to be managed efficiently and effectively, keeping into mind the long-term objectives of growth as well as
profitability.

A part of the completion of the course involves summer training after second semester for a period of 8 weeks in
the industry which helps the students get complete practical exposure to the ways in which business is done and
also get an insight into management practices followed by the industry. My summer training gained more
significance as I did my training at one of the most professionally and efficiently managed corporates in India:
VARDHMAN SPINNING AND GENERAL MILLS LTD., which was a tremendous learning experience for me.

The project assigned is “Estimating the production to be done in Hand Knitting Yarn in every month of every
quality” under the guidance of Mr. Mukti Ranjan. I learned a lot regarding administration of business from Mr.
Mukti Ranjan during my tenure, an experience which will probably help me a lot when I will join the corporate
world.
 STUDENT DECLARATION
I hereby declare that the dissertation entitled
To estimate the production to be done in Hand Knitting Yarn

Submitted in Partial fulfillment of requirements for the degree of

Masters of Business Administration
Centre of International Business
Amity Business School
Noida, Sector – 44
Is my original work is not submitted for the award of any other
Degree, Diploma, Fellowship or other similar title or prizes.

PLACE: VARDHMAN SPINNING AND GENERAL MILLS LTD. LUDHIANA

DATE: 15th July, 2005

PRIYANK MAHAJAN
 ACKNOWLEDGEMENT
As I write this acknowledgement, I must clarify that this is not just a formal acknowledgement but also a sincere
note of thanks and regard from my side. I feel a deep sense of gratitude and affection for those who were associated
with the project and without whose cooperation and guidance this project could not have been conducted properly.

It was a great privilege to work as summer trainee in VARDHMAN SPINNING AND GENERAL MILLS LTD.
Every person in this Vardhman group guided me to their heart content to help me paying my way towards the
success.

Words fail me to express my regard towards Mr. Mukti Ranjan, who was not only my coordinator during the
training but also a good companion from whom I learnt a number of virtues of business and of life.

I would like to thank Mr. V.K. Goyal C.E.O. VSGM ltd. Ludhiana, Mr. N.K. Bansal, Sr. Vice President
Commercial Department, Mr. Rahul Kapur, Mr. Raj Kumar, Mr. Satish Arora, Mr. Suresh Bhalla and Mr.
Maninder Sharma for their valuable guidance and support.

A note of thanks to my college also, especially to Dr. Gurinder Singh (Deputy Director General, CIB), and my
major advisor Mr. Samit Sen Gupta who have always encouraged, motivated and given expert guidance to me.

In the end, I dedicate this effort of mine to those persons who are lights of my life: My Grand Father, My Father
and My Mother who have been behind every successful endeavor in my life.

Priyank Mahajan
 EXECUTIVE SUMMARY
The project assigned to me was “Estimation of production in Hand Knitting Yarn of different months”. In this
project I have seen the production process of the different qualities of Hand Knitting Yarn. I have studied the
month wise sales and year wise sales of each quality and its shade of Hand Knitting Yarn. I have seen the packing
process of the qualities prepared in hand knitting yarn. In the project I have also learned how to write the challans
and How to make the Shipping Bill of the ordered quantity. I have also learned the ERP system used by the firm
and the working of the Customer order processing system (COPS) and DISPO. I have also learned to transfer the
stock from one warehouse to other warehouse through the ERP system. I have also visited the sales depot of the
Vardhman Spinning and General mills and had the knowledge of the yearly sales planning of Hand Knitting Yarn.
Vardhman has 1200 dealers both wholesalers and retailers in India. The sales orders are through agents and
through networks. Vardhman has 13 agents for different states. Agents book the order from the dealers and submit
the order with the sales office for the final execution. Payment is through agent and Agent is responsible for the
payment for which he gets the commission.
Data for the sales of Hand Knitting Yarn is collected from the ERP system used. The data collected from the ERP
system was then converted into Tables in MS-EXCEL for analysis and presentation. In this project report I have
included the literature to explain the terms and included the case study of Vardhman Spinning and General Mills.
This project report includes the profile of Vardhman and spinning mills and it shows the sales data, budget for the
Hand Knitting Yarn and the Estimation of production in terms of percentage. The data incorporates each and every
quality and its shade. This project report also includes all the terms and conditions that are required in commercial
department for its efficient working and the procedure of making Shipping Bills.
 RESEARCH METHODOLOGY

 PRIMARY OBJECTIVE
 To estimate the production of different qualities of hand knitting yarn.
 To find out the top three most selling qualities of hand knitting yarn.

 DATA COLLECTION
 Secondary Data was collected.
 Data was collected through the ERP system used by Vardhman under the profile of my
coordinator.
 The data collected was then converted into tables in Microsoft Excel.
 Data regarding the sales budget for the year 2005-06 of hand knitting yarn was collected from
the sales depot.
 The data collected shows the month-wise sales of different qualities and different shades of
each quality of Hand Knitting yarn.

 LIMITATIONS
 Only one year sales data was available so no statistical tool was applied.
 The production estimation according to the last year sales was done on the increase or decrease in
percentage.
CRITICAL REVIEW OF LITERATURE

COMMERCIAL DEPARTMENT
 ERP SYSTEM

There are many different systems in a large company's "back office," including planning, manufacturing,
distribution, shipping, and accounting. Enterprise resource planning (ERP) is a system that integrates all of
these functions into a single system, designed to serve the needs of each different department within the
enterprise. ERP is more of a methodology than a piece of software, although it does incorporate several
software applications, brought together under a single, integrated interface.

An ERP system spans multiple departments in a corporation, and in some cases an ERP will also go beyond
the corporate boundary to incorporate systems of partners and suppliers as well, to bring in additional
functions like supply chain management because it is so vast and all-encompassing, the ERP system goes far
beyond being just a simple piece of software. Each implementation is unique and is designed to correspond to
the implementer's various business processes. An ERP implementation can cost millions of dollars to create,
and may take several years to complete.

An ERP system likely represents a company's largest IT investment, so some companies prefer to implement
ERP in a more incremental fashion rather than all at once. Some ERP vendors provide modular software units
together with a unified interface to allow for this gradual approach.

Regardless of how a company approaches it, ERP is sure to bring significant changes to how a company does
business. It tinkers with the workflows, and alters long-standing processes. Companies often meet with
resistance on the part of employees who are reluctant to let go of their proven methods. Employees may also
fear for their jobs; since ERP makes such radical changes to business processes, it's not unusual for job
descriptions to change or be eliminated altogether.
Once implemented however, the ERP system brings tremendous advantages. Because all systems are joined
together, all departments can more easily share information. The workflow that takes place between
departments can become much more automated, and ultimately, customers are better served because the
individual using the customer-facing applications will have access to every bit of information regarding each
relevant process. For example, someone in sales would easily be able to log into a single system to determine
the status of a customer order that is still in manufacturing. All this comes at a cost though; training costs are
high because employees must not only learn how to use new software, they must also learn new processes.

There are many reasons a company undertakes an ERP implementation. The ERP system integrates
information, such as order information and financial data. It can speed up the manufacturing process by
automating processes and workflow, and as a result, it also reduces the need to carry large inventories.
Although the up-front costs may be enough to give the CFO nightmares, in the end, if implemented correctly,
the rewards will give the company implementing the system a major competitive edge.
 PRODUCTION PLANNING & CONTROL
Commercial department being in constant touch with the central marketing would know about what can be
and should be sold and how much. Planning shall be done in consultation with production department
because it has to consider its limitations and strengths towards what it can provide. This involves balancing
of machine and overall capacity, efficiency levels, quality levels and other production parameters.

Factors to be considered in production planning shall be:

 Market demand and marketability of products as seen by Central marketing
 Availability of raw materials.
 Existing inventory of different items and the urgency to clear up before further production of the particular
items is taken up.
 Minimum level requirement of each item in inventory as per inventory policies defined in annual objectives.
 Pending orders, despatches and the delivery schedules.
 Continuity of supply of established product items or to established customers.
 SALES PLANNING, BUDGETING & REVIEW
It shall be done to set targets of sales and thus to give indications of expected profitability.
 Annual budgets
 Monthly budgets
Various statements contained in the budget shall be
 Budgeted production – Count wise / Variety wise based on production planning
 Budgeted sales- variety wise sales
 Cash budget – Based on
 Present inventory of finished stocks
 Pending orders & contracts
 Production budget & programme
 Demand in the market (forecasted)

SALES ADMINISTRATION
 The customer shall be offered only those materials, through central marketing, which can be manufactured in
the unit and delivered.
 An offer when confirmed becomes a contract and makes it obligatory for both supplier and buyer to fulfil it.
 The contract as finalized by Central marketing/Branch.
 Each contract shall bear a number given by the marketing dept.
 Referring to opening stock position on a day and preparation of daily despatch programme. The despatches will
be made as per the Production received against pending orders & in case of Daffodil despatches will be made as
per COPS in ERP system received from Ludhiana Branch Marketing Office.
 SELLING ARRANGEMENTS
 Type of goods
 Dyed 100% Acrylic Yarn( 2/31 Dolby, 2/51 DMM , etc.)
 Dyed 100% Cotton Yarn (2/20 Carded, 2/20 Combed, etc.)
 Daffodil (Fiber Dyed 100% Acrylic Yarn)
 Dyed Acrylic/Cotton yarn
 Hand knitting yarn
 Fancy Yarns
 Printed Yarns

 Selling is carried on through

 Central Yarn Marketing
 Branch offices (Ludhiana, Delhi, Mumbai, Kolkata, Tirupur)
 Sale depot (for Hand Knitting yarn)
 Consignment Agents
 Direct contracts

 Selling agents at:

 Ludhiana
 Amritsar
 Delhi
 Mumbai
 Tirupur
 Consignment agent at:
 Merrut

 Commission to the agents:

Rate Product
2% Dyed Acrylic yarn, Daffodil, Fancy Yarns
2% Dyed Cotton yarn, Dyed Acrylic/Cotton yarn
 Cash Discount:
Rate Product
2% Dyed yarns
(Acrylic, Cotton, Blended yarns)
 Credit period:
Product No. of days
Dyed yarns 30

For payments later than the specified period, interest of 24% p.a. shall be charged.

 Dyed yarns: - The contract shall be finalized by central yarn marketing and forwarded to the department
in ERP system. The order for dyeing shall be further forwarded to the dyeing dept. through COPS in ERP
System with instructions like count, shade, waxed and packing specifications etc. Accordingly material
shall be processed in dye house and a lot no. shall be given and material will go to hank to cone winding
dept. Every COPS shall have its own number and in accordance with the packing list, the material shall
be despatched to the customers. The Lot No. will bear the COPS No. which will help to despatch the
material to the respective Customer.
  Finished Goods shall be despatched according to the quality .The record of Quality Status of the
product shall be available in ERP system, where

 Quality 1 shall mean that quality of product is O.K. and

 Quality 2 shall mean that quality of product is NOT O.K.
DOCUMENTATION

 The department shall see to it that all the required documents are appropriate, accurate, adequate and
processed within the stipulated time frame.
 All the documents shall be prepared as per Govt. Policy and prevailing rules & regulations.
 A representative authorised for this purpose shall sign all documents.
 Retention of documents for statutory purposes shall be for period as prescribed by government policies (List
of retention of records for the prescribed period attached at last.)
 Sr. Manager (Commercial) shall be responsible for the maintenance, issue upgradation and preparation of
these documents. He shall be the controlling authority for the documents.
 Sales Accounting: Invoicing shall be done in ERP system that automatically updates the customer ledger
Outstanding statements, prepared through computer, help in credit control and payment collection.
 Preparation of Documents:
Invoice - Invoice shall be prepared from computer in ERP system and 4 copies shall be printed. Original
copy for buyer, duplicate copy for transport, triplicate copy for assessee, fourth is master copy (extra).

Retention of records shall be as given below: -

NAME OF DOCUMENT PERIOD (IN YEARS)

1. INVOICES 5
 2. ER1 (RT-12) 5
3. JOBWORK CHALLAN 5

PROCEDURE FOR STORAGE AND TRANSPORTATION

OF FINISHED GOODS

 PACKING
 Proper and adequate packing is essential to avoid damages, spoiling of the material and for preservation
and identification of goods.
 All the material shall be packed as per the specification list issued by excise authorities.
 Material shall be packed in HDPE bags. Carton packing shall be supplied only in case of specific demand
by the customer.
 For dyed yarns carton packing shall be used for outstation deliveries and bag packing for all the local
deliveries & Delhi market orders.
 To facilitate the identification of the product different markings shall be given.
 Fastness test report shall be provided by dye house with every lot in case of cotton and blended dyed
yarns.
 Each bag of dyed yarns shall carry information on its top and list inside as well, giving gross wt./net
wt./count/shade/no. of cones, lot no. and date of packing.

 MATERIAL HANDLING
  Material shall be shifted from packing section to our godowns for storage and then despatching to the
customer’s place.
 Material shall be moved in such a manner to prevent damage or deterioration.
 Hook shall not be used while lifting the bags so as to avoid damage to cartons/ bags.
 Labour shall be hired on contract basis for shifting the material from production to respective godown
and customer’s place.
 While stacking, the side of bags or cartons with excise number shall be placed on the front side to
facilitate its recording by the ASST (M.K.Y)
 Cartons-packed material shall be stored with arrow pointing upwards so that the base of the cones
remains down.
 Labour shall be instructed to load the material on the vehicles according to our despatch schedules and
in case of local deliveries, labour shall unload the material at agent’s/customer godown.
 Procedure for Loading/Unloading of material shall be as follows: -
 Loading/Unloading of material shall be done in presence of representative of Commercial/Security
dept.
 Quantity loaded/unloaded will be verified by proper weighment /measurement/counting etc
 Loading/Unloading shall be done with proper care to prevent damage to the material.
 The Commercial department, before clearance of material from gate, shall provide documents
complete in all respects.

 FINISHED INVENTORY CONTROL AND STORAGE

 Material shall be stored in godowns & stacked count/variety wise, lot wise and shade wise.
 Planning according to orders pending, production schedules and market demand.
 To avoid overstocking conditions, certain selling policies shall be brought out like special discounts or
liberal credit period.
  Counts/Variety in demand shall be stocked and out of demand counts tried to be cleared out so that
minimum working capital is blocked unnecessarily.
 Different godowns shall be used for different goods. We have two godowns for this purpose.
 Control through ERP system will be maintained as ERP system provides real time stock position.
 Natural lighting shall be provided in godowns by the use of fiberglass sheets and electric connection to be
installed in H.K.Y godown only.
 Material shall be prevented from direct Sunlight and Water.

 TRANSPORTATION OF GOODS
 EXTERNAL
 Own carriers
 External transport

 INTERNAL
 Own carriers

PROCEDURES
 Despatch schedule for each day according to orders to be despatched on that particular day and
availability of stock shall be prepared.
 Contacting outside carriers/transporters and arranging for carrier vehicles.
 Optimum utilization of carrier load capacity by combining and distributing total despatch to
agents/cities/sale depot etc. in the same direction.
 Transportation shall be made through faster, reliable carriers to deliver the goods in safe condition at
minimum cost.
 Necessary documentation as invoices/challans etc. for local despatches.
 IDENTIFICATION AND DISPOSAL OF
NON-CONFORMING PRODUCTS

 Any non-confirming material, as identified by Quality Control Cell/Production Dept., shall be packed as
“second”.
 For differentiation, nonconforming product shall be marked with red ink, also word “SECOND” shall be
written on any package having non-conforming material.
 Record of non-conforming /non-moving/slow moving material will be available to all concerned, on line,
in ERP system.
 Non-conforming material will be stored separately.

DISPOSAL/DESPATCH OF NON-CONFORMING PRODUCTS

  The marketing dept. shall arrange to dispose off the Non-conforming products separately after
consulting the customer.
 The marketing dept. shall ensure that non-conforming material shall be sold to the identified customer
with information about quality of the product.
 No quality complaint /claim shall be accepted after sale of non-conforming product.

EXCISE OBLIGATIONS
Excise and customs are extremely important because of: -
 Govt. regulations,
 Compulsory nature,
 Minor mistakes and omissions can cause extensive damage.

FUNCTIONS:
 Update knowledge about tariff stipulations, rules and regulations and any modifications made therein from
time to time. The Excise manual shall be lying with Sr. Manager (Commercial)
 To maintain statutory records of excisable goods.
 Check and examine the production of excisable commodities.
 Follow up of refund claims.
 Dealing with seizure and offence cases, if any, and disposing of show cause and demand notices.
 Dealing with customs and excise duties etc.
 Representation and appeals against the orders issued by various authorities.
  Attend the excise auditors.
 Preparations of documents which are required under Excise Laws.

STORAGE, ISSUE AND CONTROL OF RAW MATERIAL

In any manufacturing organisation raw material occupy a very vital and critical position in its resources. It is
particularly so in the dyeing industry where cost of Raw material in finished product ranges between 60-80%. The
department shall forward to the raw material department at corporate level their anticipated requirement (in
consultation with production dept) for the next year, depending upon the unit’s funds, availability of machine,
storage capacity and the demand (as Per central marketing). Besides sending annual requirement as above the
department shall forward to the corporate their precisely worked out monthly requirement and daily stock
statement to ensure regular supply to its production centers.

 RECEIPT IN MILL AND ACCOUNTING

When the raw material is received the entries will be made in Form IV register in computer. On receipt of
any raw material from company other than VSGML; MRN shall be prepared in ERP System. This ensures
the accounting of the received material for future reference and for issue of material to production units.
 QUALITY OF RAW MATERIAL
The quality of all Grey yarns (Raw Material) received for Dyeing shall be ensured with the help of Yarn
Technical Data (Test Report) available in ERP System.
 ISSUE FOR CONSUMPTION
 On receipt of Grey Yarn requisition slip on prescribed Performa from the production Dept.,
Counts/Varieties demanded will be issued to the production dept. after purchasing the grey yarn from
VSGM, Unit-Ion day to day basis & also from stock of Raw material in the Godown and entries will be
made in ERP system.
 The material will be issued by the Contract labour engaged for this purpose.
 The production dept. shall inform Commercial Dept in writing if they do not receive material as per
demand. The matter will be brought to the notice of Sr. Manager (Commercial) to arrange for the same.

 STORAGE
 Raw material will be stored in the raw material godown.
 The work regarding unloading of vehicles, stacking of stocks in godowns, issues will be done by
contractors labour. This labour will be paid handling charges etc. on rates as per approved list.
 In case of rejection the material will be separately stored and it will be marked with Red ink as
“REJECTED” to segregate it from fresh material.

 MATERIAL HANDLING
Following precautions are taken while receiving or issuing the raw material:
 The truck should be parked preferably where there is ample space for unloading.
 The material should be segregated qualitywise/countwise/lotwise.
 Before shifting bales to godown for stocking purposes, bales should be checked from all side.
 The material from unloading point to stacking place shall always be taken through best possible clean
route.

 PACKING
 The packaging process is not applicable for raw material as the raw material are received in packed form but
some times if the bale is damaged or broken while handling then it is again stitched so that there may not be
any damage to quality.

 INVENTORY CONTROL
There are no guidelines for inventory control because of following reasons:
 Availability of funds.
 Seasonal demand for hosiery products.
 For Hand Knitting Yarn, raw material stocks are planned keeping in mind annual production
programme and variety wise requirement for each month.

MANAGEMENT OF WASTE
 The production units will give grade wise waste everyday to the waste section of the department. On receipt
of waste, entries will be made in ERP system for receipt of waste.

 The waste will be segregated, classified, sorted into grades.

 The waste will be disposed off in the market. Sr. Manager (Commercial) will contact various
customers/suppliers/ keepers and on basis of negotiation these wastes will be sold directly to buyer. No
claim for any waste once sold will be entertained. Neither any waste once sold will be taken back from buyer
due to any reason. Advance payment will always be taken for the sale of waste along with the form ST-XXII
C /Sale tax.
 HAND KNITTING YARN (HKY)
Hand Knitting Yarn is the most profitable product for Vardhman Group. Hand Knitting Yarn is the yarn where we
produce the wool to be knitted by Hand. There are about 50 qualities of Hand knitting Yarn out of which
Milenium, Indica and Brilon are the top three qualities. Each quality has different shades. Shades are
classified into four parts. 1) Basic shades like white, black. 2) Pastel Shades like pink 3) Traditional colors or
cultural Colors like Rani color, Royal Blue 4) Trendy Colors.
The maximum sale of Hand knitting Yarn is in Ludhiana, Delhi, Amritsar in India.

The products of Hand Knitting Yarn are packed into 3 forms

 Hanks
 Lachis
 Balls

 Hanks: Packing of 3 kg
 Lachis: Packing of 200g
 Balls: Packing of 800g (4 balls of 200g)

 There are Approx -45 Qualities in HANKS

 There are Approx -19 Qualities in BOXES.
 There are Approx -11 Qualities in LACHHI.
 There are - 04 Qualities in cuddles & Aao Bune.

 TOTAL 79 Qualities.

 In 79 qualities there are approx 30 shades in each qualities.(Total approx.2370 shades.)

 Standard weight of each bundle contain 3 Kgs (HKY).
 Standard weight of each ball is 25 gms to 50 gms and in one box there are 4 balls to 6 balls (125 gms to 300
gms) each box.

 In lachhi there 150 gms to 200 gms in one packet and in one bundle there are 3 Kgs to 4 Kgs in each bundle.
 They receive 30 Kgs, 60 Kgs, 120 Kgs, & 160 Kgs. Lot size in one shade of H.K.Y. from dye house.
 In one matador 300 bundles (HKY) load =Approx. 900 Kgs.
 In one matador 1200 boxes load =Approx. 250 Kgs to 400 Kgs.
 In one matador 3400 packets lachhi load =Approx. 680 Kgs.
 There are two matadors for transfer the material to sale depot and local parties.
COMPANY PROFILE
AN INSIGHT INTO THE LOGO
  The “flame” signifies the growth of each and every individual associated with it whether he or she is a
worker, an employee, shareholder or a customer.

 The “stick” symbolizes cotton, which is basic raw material of the core product of Vardhman.

 The “v” stands for Vardhman Group.

Company Name: Vardhman Spinning and General Mills Ltd.

Firm Type: International public company
Location: India
Phone: 91 161 266 2543/7
Fax: 91 161 260 1048
Web: http://www.vardhman.com/
Email: info @ vardhman.com
Employees (Verification Letter): 4727
Revenue (Verification Letter): $146.30 M SALES
Fiscal Year End: 31-DEC-04
Year Founded: 1962
Primary SIC: Yarn Spinning Mills
Primary NAICS: Yarn Spinning Mills
Description: Manufacturing: Manufacture and distribution of cotton yarn

MISSION
Vardhman aims to be world-class textile organization producing diverse range of products for the global textile
market. Vardhman seeks to achieve customer delight through excellence in manufacturing and customer service
based on creative combination of state-of-the-art technology and human resources. Vardhman is committed to be
responsible corporate citizen.
The dawn of a new century is a welcome event signifying major changes and new beginnings. To us at Vardhman,
the new century symbolizes new horizons, new scopes and new aspirations. The global business is undergoing a
shift putting most industries on the move in search of finding sustainable competitive advantage. The textile
industry is one of the world’s most volatile industries at the juncture. The industry is simultaneously facing
incessant recession, global reorganization and relocation. Therefore the industry is passing through most difficult
circumstances all over the world.

In step with the changing times, the Vardhman group is striving to transform itself to face emerging challenges of
market led domestic economy and global economic integration as also seize new opportunities in the enlarged
market place. The group is on steady growth path and is building competitive strengths in products, processes,
markets and people for sustainable growth over the coming years.

S.P. OSWAL
(CHAIRMAN CUM MANAGING DIRECTOR)
SWOT ANALYSIS OF THE VARDHMAN GROUP

STRENGTHS

 Good Brand Equity.

 Good Technological base with foreign collaborations.
 High Quality Standard.
 High Production Capacity.
 Own Research and Development Department.
 Commitment for growth.
 Human Capital.
 Culture and Philosophy.
 Optimum production with zero wastage.

WEAKNESSES

 Comparatively High Prices.

 Lesser degree of Promotional Activities.
 Long Hierarchy.

OPPURTUNITIES

 As quality is good and prices are comparatively high, Vardhman can easily liquidate stock pressure by slight
reduction in prices.
 As brand image is very good and production base is too wide, Vardhman can have some good customers
with wham direct business can be established. With this Vardhman will have better quantity and regularity
of sales.
 Strict payments are strengths at times as well as weakness. If a moderate policy, as per present conditions are
adopted, the dealers and customers shall be attracted to buy more and on regular basis.
 Shortened hierarchy shall provide scope for better customer service.
 THREATS

 Smaller players in the market are using Vardhman Prices as a shield to push their products at lower prices.
 Companies from South are entering into Ludhiana Market.
 Capacity of Yarn Spinning is increasing rapidly in comparison to increase in market size, resulting into the
addition of new players. This would result in price cuts, liberalization of payment terms and conditions etc.
of the various functional areas.

VARDHAMAN CULTURE AND IT ASPECTS

 Professionalism

 Commitment to quality

 Excellence with economy

 Cost Consciousness

 Human Resource Regarded Ad Valuable Asset

 Emphasis on Teaching of Development

  Preference to Human value

 Management by Participation

 Open Door Policy in sharing Ideas and Suggestions

 Cordial Environment

 Customer Focus

 Honor and Reward

MAJOR FOREIGN COLLABORATIONS

UNITS COLLABORATING COMPANY

 VMT Spinning Co. Ltd. Marubeni Corp. and Tobo Ryon, Japan
  Fiber/Yarn Dyeing House Nihon-Sanno Dyeing Co. Ltd., Japan

 Gas Mercerized Dyeing Kyong Bang Ltd., South Korea.

 Acrylic Fiber Plant Marubeni Corp., Japan

OBJECTIVES OF COMMERCIAL DEPT

 To reduce the stock of dyed H.K.Y by 25 MT.

 To reduce the stock of dyed Daffodil by 80 MT.

 To reduce the stock dyed cotton, fancy yarn by 10 MT.

 Ensure to deliver the material as per commitment dates.

 Provide information to other departments without any delay.

  To ensure that the cost saving measures are implemented and expected saving is achieved.

 To make all the members of the department fully conversant about operating knowledge of ERP system.

 Update excise records regularly.

 Delivered the material to our customers timely.

DATA COLLECTION

Secondary data for the month wise sales of Hand Knitting Yarn was collected from the ERP system. Then the data
was converted into table in Microsoft Excel for further analysis and interpretation. The data for the budget of hand
knitting yarn was collected from the sales office and was also converted into tables in Microsoft Excel. The
required information was then put up into charts for analyzing the sales. The tables and the charts are shown in
Annexure.
 RESEARCH AND FINDINGS

 There is both increase and decrease in the expected sales of each quality of Hand Knitting Yarn.
 There is decrease in the expected sales of the most running qualities because of the increase in price of those
qualities.
 New products will be launched with a success.
 Top three running qualities of Hand Knitting Yarn are
 MILENIUM
 INDICA
  CRYSTAL

 These qualities are sold through out the year, so there production should be done through out the
year according to the budget.

 To find out the estimated production of every quality and shade just sum up the percentage
calculated in the comparison table with 100 and multiply it with the shade of that quality. It will give you the
product quantity to be produced in each and every month.

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