Part 1

Et

Targets for ET

Plan for achieving target with weekly time limit

Week 2 :

Gather all the data of production overheads from the various departments for the last twelve
months which help me to understand the trend and fluctuation of various production
overheads. After making the analysis of the data come to know highly fluctuate production
overheads and other expenses which can be minimized. And my daily constant work in finance
department help me to understand the various overheads and costly material used in
production or which have greater portion in costing of finished goods.

Week 3 to 12:

While making the analysis of various departments of production overheads, try to find out the
reason for the fluctuation of production overheads with the production department.

There are various departments in production unit like Process Department, Logistic
Department, Press Department, Kiln Department, Packaging department, Lab, etc. I will
concentrate and observe each department very carefully and try to adopt the method by which
cost and wastage can be minimized.

I will work daily 2 to 4 hour over time daily in following department.

1. Operation Department
2. Logistic Department

3. Packing

4. Sorting of Finished goods.

5. Unload and Quality Department

Working with this department will help to understand how the actual work is carried out and
help me to understand reason and factor affecting to the wastage. This will also help to reduce
wastage, idle time and improving and helping into productivity of the worker. Constantly
working with all departments will help me to develop my overall knowledge about the
company. Working with the all department help me to reduce following point

 Idle time
 Wastage
 To improve productivity

Checking randomly of packed finished goods for the checking of quality according to prescribed
standard quality specially goods which is packed at night production which help to reduce
complain from customer and enhance good prestige and relation with customer.

Identification of Segment

There are various department in production and logistic department. The major department
are

1. Press Department and powder processing : powder is main part of costing so

concentrate in press and quality checking of powder makes the production pre step to reduce
the wastage of running production.
 2. Sorting of W.I.P: proper checking of W.I.P. raw material help production department
to maintain required quality and help to reduce wastage and cost. Wastage biscuit should be
removed so further processing cost can be minimized.

3. Glaze Line Department: glaze line is second process department for making finished
goods. Proper care and randomly checking help to reduce wastage of Glaze and Biscuit. Idle
time is crucial in glaze line so reduction in idle time also help to achieve target.

4. Finished goods Sorting: randomly checking of finished goods help to stop the bad
quality into market and customer. Especially production of finished goods in night always have
some defect in sorting of goods due to lack of supervision at night.

5. Inventory management of finished goods and raw material: stock of finished goods
and raw material block huge money. So proper inventory management helps company to
reduce carrying and holding cost. In this management, continuous discussion with production
department and suggesting the various methods for reducing in holding and carrying cost.

6. Packaging Department: Empty box production is carried out at the Unit.1 so reduce
wastage of craft paper and white box gives me chance to reduce the cost of production cost
and enhance the ET Target.

7. Logistic and Unloading Department: randomly visiting and supervising help to reduce
wastage of finished goods. Reduce in Finished good wastage and proper logistic help to reduce
wastage during transit.

8. Reminding the important date for the payment of various goods

9. Informing the production department in advance to order raw material. It will help to
reduce stock out cost.
Plan to approach segment.

1. Supervision at production site helps to reduce wastage and understanding the

process properly

2. Concentrate as per the ABC analysis. ABC analysis concentrates on the total value of
goods in costing. Concentrate on various factor affecting the high value of raw material goods
like purchase price fluctuation in market, received quantity, and to focus more reduce wastage
of high value of goods.

3. Advantages (benefit) and Disadvantage (cost) of benefit analysis of various methods

of inventory management calculation and suggesting the right method of inventory
management to production house help to reduce holding, carrying cost and stock out cost.

4. Constant touch with production mangaer and discussing help me to develop detail
insight knowledge of production process and discussing and understanding how the production
planning is carried out?

5. Proper visiting and randomly checking at production site help to reduce idle time of
worker and various machineries. Reducing idle time directly increase the production which
reduce the fixed cost of company.
Strategies for achievement

1. Proper and constant supervision and update knowledge and use it in real production
unit.

2. Identification and informing the company guide as soon as benefit is made and
authorize person signature will be taken.

3. Guidance of company guide gives and help to concentrate on crucial part of costing
and area which can help to achieve the ET Target.

4. Overtime working help to achieve ET Target as soon as possible.

5. Daily checking the all data of production department and as perthe books of account
and verifying and making some changes and informing the production department.

6. Taking Help and assisting colleague help to achieve target

7. Work as per the weekly target which helps to achieve target before the time limit
comes.

8. Pre planning to work in both department (Production and Operation) will give me
time to achive target before time limit.
Part B

1) Understanding The Industry

a) Identify the product

Today Ceramic Tiles have become an integral part of home improvement. It can make a huge
difference to the way your interiors and outdoors look and express. Company is making wall
tiles, Luster Wall tiles in Different size like 8*8inches, 8*12inches, 12*16inches in rectified and
unrectified tiles indifferent design and color. Ceramic Tiles are also primarily hygiene products.
Ceramic wall tiles mainly use at bathrooms and kitchens, but now a days due to increase in
awareness of consumer for the hygiene tiles is also used inmedical centers, labs, milk booths,
schools, public conveniences, shopping malls and numerous other centers.

b) indentify the products based on the industry

The main products of ceramic industry are Wall tile, Floor tile, Vitrified tile and Porcelain tile.
The market shares are 35%, 53% and 12% respectively for Wall, Floor & Vitrified/Porcelain tiles.
The tiles are available in a wide variety of designs, textures and surface. floor tiles segment is
growing at a faster rate than the wall tiles mainly due to high excess capacity in the wall tile
segment. Vitrified tiles and Porcelain tiles has increased the size of the market. It is expected
that these products will gradually take away the market from the conventional ceramic tiles
(wall and floor). Market share of wall tiles is 40% in organized industry while market share of
wall tiles in unorganized 57%.
C) Key companies in Ceramic Industry

The Indian tile industry is divided into organized and unorganized sector. Organized industry of
ceramic turnover is Rs. 3000crores while turnover of ceramic in unorganized industry turnover
is Rs. 3500crore. The following are major companies in organized sector of ceramic industry.

1) H&R Johnson (India) Ltd

2) Bell Ceramics Pvt. Ltd

3) Somany ceramics ltd.

4) Kajaria Ceramics Ltd

5) Euro Ceramics Ltd.

6) RAK Ceramics India Pvt. Ltd.

7) Restile Ceramics Ltd.

d. Sales and Profitability Trend of ceramic industry.

Ceramic industry is consistent growth of 12-15 percent in spite of slowdown in economy.

Ceramic industry sales are going to rise more than 10% every year due to boom in housing
sector of India. Ceramic export market is rising at the rate of 15 percent per annum. Export
market selling is rising due to low cost with good quality in tiles. Indian Ceramic industry has
achieved economies of scale due to high production due to technical advancement and
government support for providing resource at low cost and consistent. Investment commission
report states that the retail sales were $206 billion in 2004 and is expected to grow three-fold
in the next 10 years from $206 billion to about $660 billion by 2015. Organized retail was only
$6.4 billion and is expected to grow rapidly to reach $100 billion by 2015 and India is expected
to be among the top 5 retail markets in the world in 10 years.

From above table we can see that the above (studied) company have good margin on their
sales turnover so that there is good potential profit generate capacity in ceramic industry. The
investment in the ceramic tile industry, in the last five years is approximately Rs2000 crores
which showing that good margin and profit attracting the investment in ceramic industry.
Industry Ratio

Somany Kajaria Hind Restile

In Crore March 2008 Nitco
Ceramics Ceramic Sanitary Ceramic

Sales Turnover 351.43 528.91 577.55 651.00 33.85

PBDIT 37.86 85.51 86.73 90.01 5.73

Earning Per Share (Rs) 5.89 2.04 5.19 15.88 0.05

Operating Profit % 10.77% 16.16% 15.01% 13.82%16.92%

Interfence about the Ratio

2) Industry analysis

a) Key Factor influence the Ceramic industry.

1. Real Estate: Real estate is main factor which influence the ceramic industry. There is
positive relation between real estate and ceramic industry. Ceramic tiles has increase by 340
Millions Square meters production per annum. However, this trend is showing due to
expansion housing sector, retail, IT & BPO sectors. The retail boom in the Indian economy has
also influenced the demand for higher end products.

2. Infrastructure Project of Government: other major factor affecting is boom in

government project to improve infrastructure facilities like Hospital, School, Airport, etc.

3. Government Policy

4. New Development in substitute of wall tiles

5. Import : government is promotin export and import between the rest of world. So
import duty is less than china is major player in ceramic industry
b) Porters Five Forces framework :

b. 1. The threat of entry.

There is always threat of new entry in all good earning potential capacity of earning. Profitable
markets that yield high returns will draw firms. This results in many new entrants, which will
effectively decrease profitability. Economies of scale and new technology always attracting new
firm enter into the market due to less cost and high profitable.

In Ceramic industry, every day new firm are entering into ceramic industry.

b. 2. The threat of substitute products

The existence of close substitute products increases the propensity of customers to switch to
alternatives in response to price increases.

In ceramic industry there is no close substitute where the customer switch to the substitute
due to small change in the price of the ceramic goods. Wall color is substitute of ceramic
industry but it is not a close substitute.

b. 3. The bargaining power of customers

In ceramic industry customer bargaining power is high mainly due to high supply of goods than
demand, avability of number of companies, differential advantage (uniqueness) of industry,
buyer volume(specially to builder)
b. 4. The power of suppliers.

The power of suppliers also affect in every business. Power of suppliers is comperat less. But
some supplier have good power like gas supplier, Power supplier where the firm do not have
option to switch suppliers. But due to good governemtn policy do not give right this suppliers to
charge unfair. The power of suppliers tends to be a reversal of the power of buyers. In other
resource ceramic company have option to switch supplier. and till there is no labour union case
in whole industry mainly labour are coming from different geographical area.

b.5.The intensity of competitive rivalry

For most industries, this is the major determinant of the competitiveness of the industry. In
ceramic industry, there is aggressively competition in price war competiton in marketing of
goods. The main reason for aggressive competition are number of competitors rate of industry
growth industry overcapacity Economies of scale Sustainable competitive advantage through
improvisation.
c) PEST Analysis

It is very important for every firm to study environment before beginning the marketing and
operation process.

c.1. Political Factors.

The political Factors has a huge influence upon the regulation of businesses, and the spending
power of consumers and other businesses. The main factor should be consider like stability of
political environments, Tax policy of that particular industry ( Ceramic),government's policy on
the overall economy?

c. 2. Economic Factors

Marketers need to consider the state of a trading economy in the short and long-terms. This is
true when planning for international marketing.

In ceramic export market is increseing day by day s that marketer or firm nedd to study
following factor before starting business

 Interest rates.
 The level of inflation Employment level per capita.
 GDP per capita

c. 3. Sociocultural Factors.

The social and cultural influences on business vary from country to country. It is very important
that such factors like dominant religion,attitudes to foreign products and services, consumers
have for leisure, environment friendly product or not
d. 4. Technological Factors.

Now a days technology plays important role in evry business. In ceramic indsusty technology
have played important role to improve the business efficienc and efficient utilization of
resources. some factor technology factor should be consider before stratin business like low
cost due to technology, innovation and viable for the firm .

D. Herfindahl-Hirschman Index

Herfindahl-Hirschman Index or HHI, is a measure of the size of firms in relation to the industry
and an indicator of the amount of competition among them.

Here we talke about the organized sector, there are 16 firms are organized which have turnover
Rs 3000 crore. In ceramic industry all 16 average market share. No single firm has monopoly in
ceramic or organized ceramic industry. In organized more than 400 firms are running and
numbers of firms are entering into ceramic industry. So it can be said that ceramic industry
moving towards the perfect competition.