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FCML

INTRODUCTION:
Fazal Cloyh Mills Limited is a Public Limited Company listed on the Karachi Stock Exchange. The company was incorporated in 1966.The company Owns and operates five Ring Spinning plants comprising 176472 spindles and 780 rotors, and a weaving unit comprising 117 picanol air jet looms. All units have captive gas fired power plants with a capacity of 28 mega watts. All plants are equipped with state of the art equipment. The units are located around Multan, heart of the cotton belt of Pakistan. Customer Satisfaction, From order Placement to after sales service, is given priority over every other aspect as a policy. Customer reinvestment is made to modernize and balance manufacturing facilities with an aim to diversify, improve and expand product base. Investment in human resource development is an integral part of the companys business plan. Strict attention is placed on environment concerns and plants are regularly inspected to ensure compliance of relevant environmental regulations. Annual sales worldwide are in excess of US $275 Million,bulk of which are generated from Exports.

OBJECTIVE OF AN ORGANIZATION
OBJECTIVE OF THE ORGANIZATION
The code recognizes that the objectives of the organization are to work to highest standards of professionalism, to attain the highest levels of performance and generally to meet the interested groups requirements set out above. The objectives require four basics needs to be met.

Credibility: In the whole of society there is need for credibility in information systems

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Professionalism: The customers, employees and other interested parties can rely on the professionalism of the organization Quality of Services: There is a need for assurance that all services provided are carried out to the
highest standards of performance.

Confidence: Interested groups should be able to feel confident that there exists a framework of
professional ethics, which governs the provision of services provided by the organization to the community and the country.

FUNDAMENTAL PRINCIPLES
In order to achieve the objectives of the organization, employer and employees have to observe a number of prerequisites or fundamental principles. The fundamental principles are:

Integrity: An interested group connected with the organization should be straight forward and honest
in performing professional services.

Objectivity: The organization should be fair and should not allow prejudice or base or influence of other to override objectivity. Professional Competence, Due Care and Timeliness: An organization should perform and
provide goods and services with due care, competence and diligence and has a continuing duty to maintain a level required to ensure that a customer or employee receives goods and service based on up to date product line. Further all industrial obligations should be adhered to for timely compliance.

Confidentiality: The organization should respect the confidentiality of information acquired during
the course of providing goods and services and should not use or disclose any such information without proper and specific authority or unless there is a legal or professional right or duty to disclose.

Organizational Behavior: The organization should act in a manner consistent with the good
reputation of the industry and refrain from any conduct, which might bring discredit to the company.

Technical Standards: The organization should provide goods and services in according with the
relevant technical and professional standards. The organization has a duty to follow with care and skill, the instructions of the customers insofar as they are compatible with the requirements of commercial trade practices. In addition they should conform with the technical and professional standards promulgated by:

PCSIR (Pakistan Council for Scientific & Industrial Research) (1) International Standards (2) Relevant Legislation

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FCML In addition to observing the fundamental principles listed above, the organization should be and appear to be free of any interest, which might be, regarded, whatever its actual effect, as being incompatible with integrity, objectivity and independence.The objectives as well as the fundamental principles are of a general nature and are not indented to be used to solve the organization's ethical problems in a specific case. However, the code provided some guidance as to the application in practice of the objectives and the fundamental principles with regards to a number of typical situations occurring in the industrial process and company procedure.

Fazal MILLS Main Products


Spinning Division
Cotton Carded/ Combed Yarn Pima Cotton Combed Yarn 100% Polyester Yarn 100% Rayon Yarn Polyester Rayon Blended Yarn Polyester Acryllic Blended Yarn Spun Yarn with Lycra Melange Yarn Modal/ Tencel Yarn 100% Acryllic Yarn Plied Yarn CVC Yarn TC Yarn Core Twills Percales Sheeting Poplin Canvas

Weaving Division
Satins/ Stripped Satin Stretch Twill/ Poplin Raw Materials Dobby Articles Double Pick Fabrics

Raw Materials Of Productions Are


Yarn Polyester Ginned Cotton

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Manufacturing Units

Fazal Cloth Mills Limited


(UNIT NO # 1)

This unit is located at Fazal Nagar, Jhang Road, Muzaffargarh, Pakistan. . The strength of the unit is the result of a highly professional working atmosphere and dedicated group of executives who are efficiently managing the operations of the project. This approach of management not only produces better quality results but also helps the company to maintain its competitive edge. This unit specializes in production of single/double yarns for weaving and has an installed capacity of 70,392 Spindles.

Count Range
100% Cotton Ne 4/1 - Ne 32/1 Carded 100% Rayon: Ne 10/1 - Ne 40/1 TWO FOR ONE TWISTED YARNS Ne 5/2 - 30/2 Carded

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Fazal Cloth Mills Limited


(UNIT NO # 2)

This unit is located at Fazal Nagar, Jhang Road, Muzaffargarh, Pakistan. . The Unit Caters to the weaving, denim and terry towel industries. It has an installed capacity of 18,240 Spindles.

Count Range
Ne 8/1 - Ne 40/1 CARDED/COMBED YARNS CORE SPUN YARNS MODAL/BAMBOO COTTON BLENDED YARNS Multi count/Multi twist/Slub yarns

Fazal Cloth Mills Limited


(UNIT NO # 3)

This unit is located at 18-Km, Khanewal Road Multan, Pakistan. The Unit produces high quality yarns for knitting and weaving industries. It has the distinction of being one of the first three mills to be "USTERIZED" (a certification from Zellweger Uster Technologies Inc.

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certifying that products produced meet the highest quality standards) in Pakistan. It has an installed capacity of 33,120 Spindles.

Count Range
Ne20/1-Ne 100/1 Combed Conventional / Compact K-44 Yarns Supima, Giza, and Medium Staple Cotton Yarns

Fazal Cloth Mills Limited


(UNIT NO # 4)

This unit is located at Fazal Nagar, Jhang Road, Muzaffargarh, Pakistan. . It is equipped with state of the art machinery and has an installed capacity of 21,024 Spindles. Its manufacturing process has been approved by SKAL for production of Organic Cotton Yarns.

Count Range
100% Cotton Ne 4/1 Combed - Ne 40/1 Combed Work Force: The Company has a total work force of 2,873 people including skilled and unskilled. CAPACITY: Number of Spindles installed 141816
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Number of Spindles worked Number of Shifts per day Number of working days

141816 03 365

MARKETING MIX
Marketing mix is the set of marketing tool that the firm uses to get its marketing objective in the target market.

PRODUCT
FCML is dealing in the textile area, the products which the FCML is manufacturing is the yarn. FCML is producing the best quality yarn there and the different types. FCML produces the yarn of different counts. From 1 count to 20 count yarn & above, according to the specification of the customers. FCML exports about 85% of its produce to the foreign markets. It exports to the Europe, Asia & the other neighboring countries. Due to the spinning unit. Fazal Group has an advantage in the weaving, that they use their own yarn in the manufacturing of the fabric also has the different quality constructions. The combed & the carded yarn. The combed is the yarn which is more refined as compared to the carded. The products are produced according to the specification of the customers. FCML also sells & purchase the products from the local market to fulfill its orders. These products are building the image the progress and developments of the organization. (Its main product standard in Spinning Unit Spun Grey Carded / Combed Cotton Yarn produced with Local / Imported Cotton. Producing Fiber Yarn with Bamboo Fiber / Modal Fiber) (Count Range is 5/1 to 100/1 (Including Double Yarn) and producing Ply Yarn & Fancy Yarn)

PRICE
PRICING OBJECTIVES
The obvious pricing objectives, of FCML are, Maximization of profit To achieve the target return and targeted sales. Maintain the market share.

PRICING METHOD

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FCML The pricing method FCML is adopting is profit based. The FCML policy about pricing is that the profit should be reasonable. And also they keep in mind the competitors because they are also providing the products at the competitive rates.

Fixed Cost Variable Cost


The total cost is calculated. while all the expenditure related to the products production are added. The total expenditures are divided by the production. There per unit cost is obtained, also a margin is added.

FIXED COST
Fixed cost in value, the cost related to the machinery. Building cost. Electricity change. Salaries & wages Insurance expenses Plant cost.

VARIABLE COST
Part time workers. Transportation charges Miscellaneous.

FIXED COST + VARIABLE COST +DESIRED PROFIT


The profit margin depends upon the quality of the yarn. The price will be different to attract the customers in foreign and local markets.

PRICE METHOD FOR THE EXPORT


Pricing method for the export products is different from the local pricing method. In the export, all the expenditure related to the export such as the custom clearance charges, port clearance charges, shipping line freight and other foreign agent commission is added. Also the charges related to the transportation and bank handling expenditures are considered while calculating the price of the export items.

PRICE METHOD FOR LOCAL

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Pricing method for the local sale is different because all the cost involved in the export procedures is not included. So the price would be lower in this market.

PLACE / DISTRIBUTION
FCML exports about 85% of its produce. Therefore the distribution channel of the FCML is as follows.

FCML TO CUSTOMER
FCML is dealing directly with the customers. As in the local market and the foreign, the buyers directly contact with the FCML. So the export department fulfills their orders by the transformers. The transporter helps in delivering the products. The transporters are helping a lot in progressing the textile industry. The delivery to the buyer is the greatest service to the customer, timely delivery is important for the success and development of the organization. FCML has a direct contact with the shipping port and customer clearance agents. They clear the containers from the port.

INDIRECT CHANNEL
FCML to his customers via agents. In the export of textile products, the agents are the back bone of
textile industry. They receive the order on behalf of the buyer, give to the seller. They receive their commission form the buyer and the seller. The agents also purchase the products; sell them directly to other buyers. So in this trading they earn enough profit. In Lahore & Karachi, there have been a large number of agents which are working for their organizations, in foreign countries as well as in this country. Mostly the export business is through these agents. The agents have been successful due to the credibility and honesty of their work. FCML mostly receive orders through agents, located in the Lahore and Karachi. FCML pays commission to them. Mainly the responsibilities lie on the agents in case of delayed shipments, payment problems and the quality problems. Mainly the products are exported through the different shipping lines.

PROMOTION
FCML promotes its products, but to a limited extent. FCML provides the company broachers to the buyers. FCML provides the samples of the yarn to the customers. FCML has a direct contact with the local and the foreign agents, so they also promote the company products. FCML marketing manager also visits its customers. FCML high quality yarn is also promoted by the cloth which is produced by Fazal Groups weaving unit which is also promoting the company and establishing image and goodwill.

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FCML FCML provides the timely information to customers which help in promoting. Marketing Department may be divided into two main other Departments for understanding all major activities which are made under marketing department as under;

1. Export Department 2. Import Department

PURCHASE DEPARTMENT
The purchase department is divided into two categories, cotton purchase department and store purchase department.

PURCHASE DEPARTMENT

COTTON PURCHASE

STORE PURCHASE

Cotton Purchase Department


Cotton purchase department is most important department in textile industry. Quality of yarn depends upon cotton that has been purchased. It becomes most important when there is business of export. There is no question of compromise on quality. Because your minor mistake may result in huge losses. Moreover you will loss your credibility. From director to cotton selectors all are involved in cotton purchase process.

Visit of cotton selectors


The cotton selectors of FCML visit the cotton ginning factories. Cotton selectors may visit the factories on their own behalf and some times the cotton factories call them. Their visits are very important because purchase process starts from here.

Purchase Process
The following steps are involved in the purchase of raw material i.e. cotton. Demand of purchase from mill Purchase Requisition Sample from different suppliers and quotations

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FCML Sample testing decision making Agreement with the party Writing delivery order for factory INGATE pass + D.O + Purchase Invoice + Purchase Requisitions are supplied to accounts department

Selecting the Sample


Samples are selected from huge amounts of cotton. Samples are taken from different suppliers. These samples are then tested. The most suitable sample at lowest price is selected for Purchase of cotton. As there is centralized management system so the Director himself takes the decision of selection and purchase of cotton. In other words Director is final authority in making decision.

Store Purchase Department


Stores Incharge heads the store purchase department. The setup of purchase department is as under: Director Purchase Officer Assistant Purchase Officer Purchase Clerk The store purchase department is responsible for the purchase of items like Spare parts of machinery Electric items Stationery items General Store, Store and Packing material spares Oil and lubricants Building Material

Documents
Demand Requisition. Delivery Order Invoice of Purchase In Gate Pass

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Procedure
The following is the procedure for local purchase department.

Demand of purchase from mill


Purchase Requisition

Sample from different suppliers and quotations Sample Testing Decision-making Agreement with the Party Receiving consignment Writing delivery order for factory In gate pass + D.O + Purchase Invoice + Purchase Requisitions are supplied to accounts
department

The purchase department receives the demand requisition from store in charge at store at mills this is in fact an intention or requirement of commodities at mill the purchase demand requisition contains a full detail of quality and quantity of commodities required. It also contains price detail of goods purchased previously the purchase department on the basis of indent does an inquiry for rate from at least two suppliers from approved suppliers list. After inquiry Purchase Manager discusses with Director for approval of rate and other necessary requirement. After the approval the Purchase Department purchases the items from suppliers and sent those to the mill with three copies of delivery orders In case of no rejection of items store in charge send one copy of delivery order back to the purchase department along with one copy of In Gate Pass. Store in charge also keeps a copy of delivery order and in Gate Pass for his own record.

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In case of rejection of items store in charge sends all copies of Delivery Orders with items back to the purchase department at Multan Office of FCML.

Process of Ginning the Cotton


It is the first steps, in which the seeds are separated from the cotton. The separated cotton is classified according to its quality and standers. Finally it is tied up in to bales to bring them for next phase. The machines that separate seeds can be used to prepare oil, feeds etc.

Spinning Process
When the cotton bales reached the spinning mill, these bales are opened and cotton is torn in to small pieces. This cotton is finally prepared as thread cones of different quality. The different departments play an important role in the progress of conversion such as blow room, carding section, simplex section, and ring section and auto cone section. A detail report of these sections will be provided in the later discussion.

Weaving Process
It is the process in which cloth is prepared from thread. The machinery, which performs key functions in specified process, is called loom. These looms are used to prepare the cloth. International Marketing Procedure Export Procedure Introduction to the Export Process

PRODUCTION
Fazal Cloth Mills Limited Company has four Spinning Units. These units are equipped with highly modern and automated machinery. Following sections are there in their Production Department or Spinning Unit.

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Production Process

Cotton Godown

Bale Opener
Air Feeding

Mixing Department

Blow Room

Card Section

Ring Frame

Simplex

Drawing Draw Frames

Auto Cane PLUCKER ROOM

Packing

Now a days most of the Spinning Mills are using the Auto Pucker Plants. The function of this plant is the breaking and opening of the bales of cotton. The cotton in these bales is in the pressed form. It cannot be used for further processing until and unless it is opened and made in the loose form. Firstly the cotton bales were opened manually but in that way, so much cotton was wasted and instead of remaining clean it became dirtier. Further more it took a lot of time. Along with opening, the blending of different lots is done in this plant, a lot is consisted of 100 bales of cotton. For blending the bales contain the specifications as given below:
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Lot Number Station Kind of Cotton/Quality of Cotton Weight.

CONDITIONING
Conditioning is a term, which is directed towards a task in which the opened cotton from plucker room is placed in open form before feeding in the Blow Room. In this way the cotton absorbs the air and automatically comes into loose form, which is helpful in the smooth functioning of Blow Rom machines. For the purpose of conditioning the cotton poles are allowed to lie for 12 to 16 hours.

BLOW ROOM
The main function of the Blow Room is cleaning and purifying the cotton. In Blow Room, the raw cotton is first time processed. Input of this room is the raw cotton while the output is the lap. In Blow Room, the Bale Breaker machines are installed. These perform the function of breaking cotton into the loose form then cotton is passed artificially the lighted path so that any impurity such as stones, clots can be removed. The Bale Breaker machine contains the beaters in them these beaters move the cotton into different ways and open it the spikes installed on the edges help in splitting the cotton.

DISTRIBUTORS
These are the pipes through which the cotton is sent to Scutchers where the raw cotton takes the shape of final product of Blow Room. Firstly, the cotton was put into scutchers manually therefore lot of cotton was wasted but now the help of distributors the cotton is not wasted.

Scutchers
These are the machines where output of Blow Room Lap is shaped.

Hopper Feeders
Hopper Feeders are used to regulate the flow of cotton to Scutchers. These ensure the uniform supply of cotton to scutchers.

Krischner Beater

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These are the beaters installed in scutchers. They perform the function of opening and cleaning. They contain wooden laps and spikes which are installed on the edge of these

CARDING SECTION
The completed lap, which is the output of the Blow Room, is the input of the Carding section. So, the out product is the Card Sliver. Here the laps are opened; cleaned, drafted and short fiber is extracted from the Card Sliver. Sliver is fiber of cotton in the shape of thick rope. Drafting in the process in which the length of the cotton fiber is increased through automatic machine process. The lap, which is raped on the lap rod, is placed and feuded to these machines; these machines perform different functions to convert this lap into Sliver. The production speed of the carding machines is 122m/m. The rollers and cylinders in these machines, which perform these functions, include the followings:

Feed Roller Taker in Cylinder Doffer Stripping Roller DRAWING SECTION


Here the functions including doubling, drafting, and parallelization and straightening are done. Doubling refers to the doubling the length of cotton fiber. This section is divided into the two sections including the Passage 1 and Passage

Drafting
In drafting the length of the fiber is increased 50% that it can be converted into yarn/

Parallelization
In parallelization process the fibers of the sliver rope are make in the parallel form to each other this is done along with drafting the sort fiber is extracted.

Straightening
Here the fibers are made the straight, the hooks of the fibers are removed, and all the zigzagging is eliminated to reduce the waste.

FINISHER DRAWING

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Here the input is breaker drawing sliver, the cross canning is done also in this section as was in previous section so as to bet evenness sliver.

Pre Comber
Here the pre combing machines are used the main objectives of which are the followings: Parallelization Removed of short fiber Doubling Straightening Drafting

Lap Former
Lap former is the machine, which are reserved for the formation of lap of drawn, breaker sliver. Its main purpose is lap formation by doubling. 452 cones are used for making one lap. The lap is rapped on the plastic bobbins.

Yellow bobbins Pink and green

(Are used for the combed yarn) (Are used for the carded yarn.)

Comber
Comber machines perform two basic functions: Parallelization Extraction of short fiber

SIMPLEX SECTION
Here roving machines are installed, the functions involved are twisting, and drafting in twisting the machine twists the thread so as to make it cohesive. In this way the string gets the strength and cannot break easily so ensuring the smooth functioning of the machines. Here the in product is finisher-combed sliver and out product is the Roving. The relative humidity needed is 55% to 60%. Weight of roving package is 1.52 kg.

RING SECTION
The main function of this section is drafting and twisting. The machinery in this section is the most expensive of all. Main functions of the spindles are to wrap the thread bobbins and the

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speed difference between speed of the spindles and of the rings is the cause of the winding but both travels in the same direction. There are overhead cleaners in this section they are moving overhead cleaner and ensure the cleaning in this section they by providing the air pressure, for two machines there are one overhead cleaner. The waste material is extracted from the sucking pump in the plant these plants are installed on the floor. Here the input is roving package and the output is the Yarn.

AUTO CONE SECTION


Here the yarn formed by the ring section is wrapped on cones. An important aspect about the cone formation is that different types of thread are wrapped on cones of different colors. Following features of Yarn are adjusted. Thinness of Yarn Thick places adjustment Short thick places Here if the thread breaks it is automatically rejoined and the waste is removed ultimately, overhead cleaners are also installed there.

CHEESE WINDING SECTION


Some companies demand doubling Yarn production so for that purpose thread from two cones are twisted combines into one and wrapped into one cone this is the fine output.

PACKING ROOM
It is also yarn condition room the relative humidity is 90% and is provided to the combed yarn in this way the cotton regains the 8.5% moisture and it is the natural. The cones are then packed and different types of packaging is used for example for export purpose first it is packed into the polythene and then into the cartons and the cartons contain all details about the yarn including Count Brand Gross Weight Net Weight The final mark that is Made in Pakistan is placed.

TYPES OF PRODUCTION REPORTS

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Different types of reports are prepared when yarn is received from the spinning section an all records are maintained completely. These are as under: Yarn Report Waste Report Daily Cotton Consumption Report Efficiency Report (Spindles Worked) Daily Production Report

QUALITY CONTROL MANAGEMENT


Quality Control refers to setting certain standards for production and matching production with those standards. Management of every company is specially committed to the good quality both in production and end results. The Management of FCML has been successful in creating and maintaining the quality culture in the organization. Daily quality report is sent to headquarter and it is checked here. 85 to 90 percent of production is exported; therefore, it is highly intensified. Following are the characteristics of the Yarn that are checked for the equality assurance: Weight of Fiber Length and Strength Dia Weight and Final Yarn Evenness of Yarn Relative Humidity Temperature

Count
(1.5 meter) X (80 round) Hank (120 yards) X (7) = =

Lycra
120 yard 840

On the scale put on one side on pound and on the other side put the hanks. Then count the hanks that will be our count. Suppose that there are 30 hanks equal to one pound our cont will be NE 30/1.

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FCML Internal And External Customer: a. Internal Customer 1. Rana textile mills limited 2. U.S. Emporio 3. M.N. Textile(private) Limited 4. Nishat dying & Finishing mills 5. Fazal Rehman Fabrics Limited 6. Fatima EnterprisesLTD.(Textile unit2) b. External Customer 1. Wide Way Textile Limited. 2. Zhejiang Hing Fung Weaving Dyeing & Printing Co. l 3. If Trade Ag Merkurstrasse 4. TAT CHI Textile Limited 5. Shenzhen Kotawa Investment Co. LTD 6. Ads Textile Handel Gmbh FCML Supplier: 1. Acro Textile Mills Ltd. 2. Ahmad Fine Textile Mills LTD 3. Ahmed Oriental Textile Mills Limited. 4. Al-Sehar Manufacturer (PVT) Limited 5. Basfa Textile (private) Limited 6. Best Exports (PVT) LTD.

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STRENGTH
Cotton is also available at cheaper rates. It has its own spinning unit and the weaving unit also which is reducing the cost of production? FCML has well qualified staff. FCML has good financial resources. So they can invest in other textile related products. FCML has food relations with local foreign buyers. Good know how about the textile business which is improving the progress of the company? Cheap labor is available to FCML which is reducing as per unit cost. The products are at compatible prices. FCML has its better market information system.

WEAKNESS
Delivery time is more due to this the shipment are delayed There is more decentralization in FCML. Less competitive in the fine count. Our cotton fiber is short. This is decreasing our productivity in fiber. Per unit cost is not decreasing .So we are less competitive in count Fiber.
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FCML is not exporting value added products. Lack of HR resources development. Lack of promotional activities. FCML should do the more effort in promotion. Non-professional attitude which is decreasing efficiency?

OPPORTUNITIES
FCML has opportunity to explore new international and growth-oriented markets for the exports of Fabric. FCML can play the role of agent. So they can save the commission, which is paid to the agents. FCML can better the marketing techniques. The company should import the latest technology to decrease unit cost of the production. The company should go in dying process also. The company should make efforts to improve the technical skills of the labor and employees which will improve the overall efficiency and productivity of the organization Govt. is also providing lot of incentives to the exporters. The FCML can move in horizontal and the forward integration. The decreasing interest rates on the loans. FCML has opportunity to export to the U.S.A and the Europe markets. There is more scope of exporting to these markets.

THREAT
Govt. strict policies about the textile sector. The unreliable agriculture sector. Quotas are lifting FCML will face the major threat. FCML has a threat from the domestic and the international competitors. China, Thailand and Indonesia are the emerging giants in textile. The FCML will face tough competition in domestic and international markets. WTO regime will be a great threat. Political instability is also a major threat.

RECOMMENDATIONS
Keeping in view SWOT analysis we are able to make following recommendation that we can suggests. Company should focus on the domestic market to increase its share Company has limited exports in the North American countries and in Europe. Company should enhance efforts to increase the export. Company should move towards the value addition. As it has more potential and it is the need of time. In this way company can earn lot of foreign exchange for the country.
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After the WTO implementation there is great chances to expand the business but there would be more competition from the other countries like china and India and other countries from the region. So expertise in the marketing field would be the key to success. Human Resource is the only competitive advantage that can not be imitated. So Human Resource development should be of prime focus. Company should try to improve the skills of their existing managers. There should be clear hierarchy in the different department. There should be clear policy of promotion in the company. Monetary rewards should be clearly based on the performance. There is substantial need of computerization of the system. Integration of information between the production department and the store department should be through Information Technology. Prefer to Market Driven manufacturing

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