REPORT ON ORGANISATIONAL STUDY AT

D.C.MILLS (P) LTD ALAPPUZHA

BINEESH MOHAN

(Reg. No: 85290011)

Under the Guidance of

Dr. Molly P Koshy
Reader, CUSAT

Submitted in partial fulfillment of the requirement for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
to the Cochin University of Science and technology

School Of Management Studies

Kochi-682022, Kerala, India
Year-2010
 DECLARATION

I BINEESH MOHAN, third semester MBA student of school of

management studies at the Cochin university of science and
technology do hereby declare that this report on
ORGANISATIONAL STUDY AT D.C.MILLS ALAPPUZHA
under the guidance of Dr.Molly.P Koshy, Reader, School of
Management Studies in partial fulfillment of the
requirement for the award of the degree of Master of
business administration is a bonafide study I have done in
the organization. I also declare that this report has not been
previously formed the basis of award of any Degree,
Diploma, Associate ship, Fellowship or any other similar
title of this or any other university or institution.

Place: Bineesh Mohan

Date:
 ACKNOWLEDGMENT

The accomplishment of this Organizational Study at D. C. Mills has

been considerably influenced by the valuable assistance received
from various sources.

I’m deeply indebted to Mr. K.J Dennis, Managing Director,

D.C.MILLS (P) LTD ALAPPUZHA, for granting permission to do my
organizational study. I express my sincere thanks to Mr. Lalichen
Arackal Senior H. R Manager for his approvals and guidance. Also
thanking Mr. Joseph Fernandez Asst. Manager HRD for his
support and guidance. I thank Mr. Robin (HR executive) who gave
me necessary instructions and guidance throughout the study.
Sincere thanks to various department managers and staffs for their
help and support.

My special thanks to Dr. Molly P Koshy, Reader, School of

Management Studies, CUSAT for her guidance and encouragement.

I also extend my sincere gratitude to our Director, Prof. Dr. K B

Pavithran, of School of Management Studies of the Cochin
University of Science and Technology.
 ABSTRACT

I underwent an organizational study at D.C.MILLS (P) LTD

ALAPPUZHA to acquaint myself with the business environment for a
period of one month from May 19, 2010 to June 18, 2010 as a part
of the MBA curriculum at the School of Management Studies,
Cochin University of Science and Technology.

The study was conducted to understand the structure, function and

processes of various departments and their interdependence.
During the course of study I was able to successfully interact with
the employees of the organization. They were happy to give me all
possible information.

The methodology consists of data collection through interview,

observation and literature review. The data collected from different
sources are classified, analyzed and interpreted. Based on which an
organizational structure, its functions and various departments are
identified. The various departmental functions are clearly identified
and their processes & activities carried out are recorded. The study
helped me to obtain an exact picture of D.C.MILLS based on which,
a swot analysis is done.

CONTENTS

I. INTRODUCTION.

2. INDUSTRY PROFILE.

2.1 World scenario of coir industry.

2.2 Indian scenario of coir industry.
2.3 State scenario of coir industry.

3. COMPANY PROFILE.

4. PRODUCT PROFILE

4.1 Products made from coir

4.2 Products made from rubber
4.3 Products made from sea grass
4.4 Products made from sisal
4.5 Products made from jute
4.6 Washable collection

5. OBJECTIVES

5.1Quality objectives
5.2 Quality policy
5.3Company policy
6. AWARDS

7. ORGANIZATION CHART

8. DEPARTMENTAL PROFILE
 8.1 Sample department
8.2 Purchase department
8.3 Stores department
8.4 Production department
8.5 Human resource department
8.6 Marketing department
8.7 Finance department
8.8 Information technology department

9. SWOT ANALYSIS

10. Observations

11. Suggestions

12. CONCLUSION

13. BIBLOGRAPHY
 1. INTRODUCTION

Among the several natural industrial ‘hard’ fibers which enter the
world’s markets today, coir occupies a unique place. It is put to
many uses industrial, agricultural and also as a substitute for
certain cordage for which it is claimed to be superior to hemp and
sisal. Coir is one of Kerala’s most important products. Coir is a
natural fiber that helps hold together the coconut shell. When
extracted, it can be spun into one of the world’s strongest threads
and woven into mats and baskets of all kinds.

In most coconut producing countries the main coconut product is

“copra” the coconut meat. The husks are burned as fuel, used as
manure, or discarded. In Thailand, East Africa, India and Sri
Lanka, coconut husk fibers are used additional products. Fifteen
countries of the Asia-Pacific region produce 86% of the coconut in
the world. But only a handful of them are known to be coir
producers. India is the largest producers and exporter of coir and
coir products. SriLanka, Indonesia, Malaysia, Philippines, Thailand
and now Vietnam are the other primary producers of coir with
varying levels of production capabilities.
The coir industry, which was confined to Kerala, has now spread to
other states like Tamil Nadu, Karnataka, Andhra Pradesh, Orissa,
etc over the years largely on account of various developmental and
promotional programmes. Alleppey is the nerve centre of Kerala’s
famous coir industry. Here we can see coconut husks being beaten
into fiber for making beautiful mats and other coir products. Apart
from its traditional use as rope, yarn and floor coverings, coir fiber
is finding new applications as an eco-friendly substitute for wood
and synthetics. A long term biodegrable geo-fabric for soil
bioengineering and garden articles. The by product of coir industry,
coir pith, is increasingly being used as a soil conditioner. The future
of coir industry depends on the non-traditional areas and non-
conventional products.

2. INDUSTRY PROFILE

Coir industry occupies a unique place among the rural traditional

cottage industries in India. The state of Kerala, also known as the
'land of coconuts', is the largest producer of Coir in India. It
accounts for more than 75% of the total production. The
preparation of Coir is a lengthy process. The coconut husk is
immersed in water for Rubberized about a month. Later softened
husk is beaten to separate the fiber from the husk. This then woven
into coir.
Coir-foam, rubberized coir is used to make mattresses and pillow
covers. These have gained popularity due to their softness and
durability. Floor mats, carpets and durries too are made. Other
handicraft items like bags, wall hangings, dolls and animal figures
etc. are made. The jewellery made out of Coir is fascinating because
of its intricate and delicate designs.

Coir is a versatile natural fiber extracted from mesocarp tissue, or

husk of the coconut fruit. The husk contains 20% to 30% fiber of
varying length. After grinding the husk, the long fibers are removed
and used for various industrial purposes, such as rope and mat
making. The remaining material, composed of shot and medium
length fibers as well as pith tissue, is commonly referred to as waste
grade coir. The waste grade coir may be screened to remove part or
all of the fiber, and the remaining product is referred to as coir pith.

2.1World Scenario

Currently, the global annual production of coir fiber is about

350,000 metric tons (MT). Yet, even in the world’s top two
producers, India and Sri Lanka, which account for about 90% of
global coir fiber production, combined, this renewable resource is
underutilized; local coir mills process only a fraction of the available
husks, which accrue more or less year round as a waste during
coconut processing.
Traditional uses for the resilient and durable coir fiber include rope
and twine, brooms and brushes, doormats, rugs, mattresses and
other upholstery, often in the form of rubberized coir pads. In the
1980s and 90s, global exports of coir fiber fell by almost half, as
Western consumers shifted to synthetic foam and fibers. Then,
since 1990, rapidly growing domestic demand in India more than
doubled global production benefiting exclusively the Indian coir
industry.

Finally, since 2001, a rising Chinese demand for coir, an expanding

market for coir-based erosion control products, and the spread of
coir pith as a peat moss substitute in horticulture has further
pushed up global production and prices. In turn, other coconut
growing countries, including Philippines, Thailand and Vietnam are
now expanding their production and export of coir fiber. These
changes are also reflected in the international trade in coir.
Historically, Sri Lanka had been the world’s largest exporter of
various fiber grades, whereas India exports largely value added
products – yarn, mats, and rugs. While in 1990 about 80% of global
production was exported, growth of the Indian domestic market
dropped that rate to below 40%.

Global trade volume for coir fiber, value added products – yarn,
mats, rugs – and coir pith now stands at about $140 million per
year with India and Sri Lanka respectively accounting for about $70
and $60 million of that amount. This may not seem much but in
the coconut regions of producing countries coir is an important
economic factor. The challenge for coir industry is to sustainably
expand markets for this versatile renewable resource while
maintaining its role as employer for the rural poor. This may
require producers to innovate production, improve product
consistency, and in particular develop novel applications – jointly
with their customers in importing countries. Businesses, public
agencies and research institutes are now addressing this challenge
in multilateral projects worldwide – setting examples that global
trade can be beneficial to all parties involved.

The major coir producing countries are India, Sri Lanka and
Thailand, while Philippines, Vietnam and several South American
and African countries have entered the fray looking towards further
expansion. At present only an estimated 10% of the husks from
global coconut production are used for fiber extraction, producing
about 480,000 tons of coir annually. Around 100,000 tons of this
enters the world trade, the balance being consumed locally in coir
producing countries. While fiber demand in importing countries has
declined due to inconsistency in quality and delivery, the global coir
trade decreased from 160,000 tons two decades ago to 123,000
tons.

2.2Indian Scenario

Indian coir industry is an important cottage industry contributing

significantly to the economy of the major coconut growing States
and Union Territories, i.e., Kerala, Tamilnadu, Andhra Pradesh,
Karnataka, Maharashtra, Goa, Orissa, Assam, Andaman & Nicobar,
Lakshadweep, Pondicherry, etc. About 5.5 lakh persons get
employment, mostly part time, in this industry. The exports from
this industry are around Rs. 70 crores. Coconut husk is the basic
raw material for coir products. Around 50 per cent of the available
coir husk is used to produce coir products. Hence, there is scope for
growth of coir industry. India accounts for more than two-thirds of
the world production of coir and coir products. Kerala is the home
of Indian coir industry, particularly white fiber, accounting for 61%
of coconut production and over 85% of coir products. Although
India has a long coastline dotted with coconut palms, growth of coir
industry in other coastal States has been insignificant.

During the Seventh Plan period, encouragement has bee given for
expansion of home market through publicity and advertisement,
product diversification, adoption of new technology, research and
development, training for artisans, including women and social
welfare measures for coir workers, most of whom are SC/ST and
women.

The Eighth Plan programmes for coir industry aimed at increased

utilization of coconut husk for production of coir fiber, growth of the
domestic market, strengthening of research and development to
find out new uses of coir fiber especially in the areas of geo-fiber,
fire retardant, cement and gypsum polymer development, acquiring
of new technology like PVC-tufted coir products, encouragement to
cooperativisation and providing social welfare, civic amenities and
medical facilities to coir workers.
Emphasis would be laid on mechanization in a phased manner
without affecting employment to make Indian coir products
competitive in the export market. Brown coir fiber production would
be encouraged by providing seed capital assistance. Modernization
of coir units has been envisaged by providing incentives for
installation of modern equipments to make coir industry more
competitive in the export market.

Special training programmes have been formulated for women

artisans. Improved modern treadle ratts would be provided to
trained women artisans to increase employment and earnings.
Medical facilities, crèche for children of coir workers, model coir
villages for SC/ST coir workers and social welfare schemes would
be implemented during the Eighth Plan period. Emphasis has been
given on developing devices/equipment/machinery through R&D to
reduce drudgery and to improve productivity of coir workers.
Development of improved variety of ratts and looms would help in
improving the production of coir yarn spinning, coir mats, etc. In
order to boost exports, the scheme of cooperative
publicity/programme in the export markets which was started in
the Seventh Plan would be continued.

Not more than 50 per cent of the coconut husks is utilized in the
coir industry, the remaining being used as fuel in rural areas.
Production in the cooperative fold is not more than 20 to 25 per
cent. The development programmes so far undertaken aimed at
revitalization of coir cooperatives, improvement in quality and
products diversification. Efforts were also made for exploring wider
export markets for coir and coir products. Judged from the increase
in production and employment, the progress has been rather slow
and exports in physical terms have remained mere or less static

2.3State Scenario

The history of coir and its association with the state of Kerala dates
back to the 19tth Century. Sandwiched between the Western Ghats
on the east and the Arabian Sea on the west. Kerala is one of the
most beautiful States in India. A tropical paradise of waving
coconut palms and wide sandy beaches, this thin strip of coastal
territory slopes down from the mountain ghats in a cascade of lush
green vegetation and varied fauna. One of the most commonly seen
tropical trees in Kerala is the Coconut tree. In fact, even the name
Kerala (Keralam in Malayalam) is derived from this tree. Everything
from Kerala’s culture to its dishes is evolved around the Coconut
tree.

Alleppey is the nerve centre of Kerala’s famous Coir industry. Here,

we can see coconut husks being beaten into fiber for making
beautiful mats and other coir products. Both men and women are
actively involved in the production of the coir. The women are
mainly involved in the yarn spinning sector and the men in the
product-weaving sector. Coir industry enjoys the status as the
largest cottage industry in the State of Kerala, giving employment to
over a million people. Kerala also has a very fine natural harbour
located at Cochin had found a place in the minds of Europeans as a
trading centre because of its port and spices.

The coir industry, one of the major traditional industries in the

State and second only to agriculture as a source of employment in
Kerala, provides employment to around 4 lakh persons, of which
84% are women. With 10.05 lakh hectares under coconut
cultivation, this accounts for 45% of the net cropped area in the
State. Concentration of coir industry in the State is Alleppey,
Kayamkulam, and chirayinkeezhu, Kola, North Parur, Trichur,
Kozhikode, Kannur and Vaikom. In this industry varieties of coir
yarn produced such as Ashtamudi, Anjengo, Artary, Vaikom,
Koilandy, Arror Sp, Muppine, Rope Yarn. Main coir products
produced and exported include Mats, Matting, Rubberized coir pith,
Rugs, Carpets, Curled coir.

The various agencies for promoting coir in the state include a Coir
Directorate, Coir Workers’ Welfare Fund Board, Coir Parks, Coir
Fed, Coir corporation, and coir Board and so on. The government
contributes to the coir Workers Welfare Board to provide welfare
measures that include pension to coir workers, educational
assistance to the workers’ children, marriage assistance, and
provision of geriatric centers and so on.

2.4 State Scenario

 The economy of the Alappuzha is predominantly based on
agriculture and marine products. Though Alappuzha is industrially
backward, some traditional industries based on coir and coir
products, marine products, handlooms, different types of
handicrafts, toddy tapping, etc, have been dominating the scene
from the very early times. Alappuzha is known as the traditional
home of coir industry in Kerala.

The easy availability of raw materials and existence of backwaters

and canals suitable for the wetting of green husk and accessibility
of transportation are the main factors for the development of this
industry. Such sources are abundant in the district and these
favorable factors, which have helped the growth of the coir industry
in Kerala.

Since, coir is produced from coconut husks, people started

investing in the industry, mainly southern part of the country,
which was due to the abundance of coconut trees and adequate
facilities for natural retting. As a result of this, Kerala has a major
part to play a role in coir industry, which is the largest
manufacturer of coir products in India. In, Kerala Alappuzha is the
main centre of investment.

The Coir Board was established by the Central Government under

the provisions of the Coir Industry Act,1955. there is a Coir
Research Institute functioning at Kalavoor. The National Coir
Training and Designing Centre were also established at Alappuzha
in 1965. all these institutions are helped the development of coir
industry in Alappuzha.

The water linkage between Alappuzha town and yarn producing

centers and the port facility for shipment of finished products to
various countries abroad accelerated the growth of coir industry in
Alappuzha. In fact it has been rightly called the Venice of the east
due to this reason.

2. COMPANY PROFILE

DC Mills is the first ISO 9001-2000 certified company for coir

products in India from TUV CERT OF RHEINISCH-
WESTFALISCHER TUV E.V. and first in the world for vinyl backed
coir products from TUV CERT. Spanning two decades, DC Mills
foray in the coir products exports is a magnificent example of
growth rooted in determination of a management with a vision
seldom seen.

Attentiveness to customer tastes and preferences, commitment to

quality, dedication to timely delivery and extensive range of
products make D.C. Mills the numero uno in floor covering
business. Their specialties include tailor made designing services in
the areas of export of coir products, jute India, Indian carpets,
natural fiber, rubber and bamboo mats, bath rugs and PVC mats.
They also offer you an exotic range of colors, styles and designs. DC
Mills is recognized as one of the top exporters of coir products in
Kerala, India.

In the year 1982 D C Mills started export of Indian natural fiber

door mats and floor coverings under a young and dynamic
management, with its own manufactories by Mr.K.J.Dennis. Now
they have six manufacturing units with modern and sophisticated
machineries in Valavanadu, puthenambalam, Pollathy,
Pathirappally, U.S.A and U.A.E. D C Mills is presently
manufacturing coco, sisal, jute, wall to wall carpet in 4 meter width
and sea grass.

A Holland made power loom machines used by the company to

manufacture good quality latex backed carpets. Company also
manufacturing high quality door mats and area rugs in good color
fastness in water and sunlight. Its own modern dyeing and printing
factory for the best result of color fastness its quality checking
department ensures the quality to the taste of all global customers.

In 1997 D C Mills started a new factory on 3 million US dollars for

vinyl backed coco rolls and door mats with flock designs of World
class, as same as European style company also manufacturing
different types of rubber doormats and outdoors. Now the customer
can have all the requirements of natural fiber floor covering from D
C Mills collections.

Another new product range from the company for their customers
are the new generation mats made of softolefine, nylon, wool and
yarns. The company has the most modern BCF machine for
extruding yarns and multi operational coating machine for the
square pyramid and bubble backing.

The company also owns highly advanced fully automated tufting

machines imported from England and USA for the production of
poly propylene mats. The present production capacity of the
company is around 100 containers of 40 feet size per month. The
installed capacity of plant is 10000 squire meters per day.

The company has a workforce of more than 1500 employees with

another 5000 people indirectly involved in its operations. At DC
Mills, constant innovation is of prime importance. To this effect, a
modern and a highly sophisticated R & D division equipped with
the latest information software and hardware forms an integral part
of DC Mills. A team of well-experienced software professionals head
the department. The plethora of awards the company has been
earning ever since its inception stands as a solid testimony to the
commitment, success and efficiency of the company’s production
team.

A significant milestone in the growth trajectory of the company was

accreditation by British retail consortium (BRC) in 2008. The
company is now BRC certified global recognition fot safe consumer
products. The company has been regularly receiving awards in
recognition of outstanding export performance. In recognition of
highest performance in export, D.C Mills has received the
prestigious award from the Prime minister of India consecutively for
the past 14 years. The latest award was the one honored by coir
board for the best export of 2006-07.

Group concerns of this company are:

 D C Mills (P) Ltd.

 Detlish Rugs (P) Ltd
 Denny Steels (P) Ltd.

4. PRODUCT PROFILE

DC Mills mainly deals with coir products, rubber products,

washable indoor products (in cotton, nylon and wool), coir rubber
products, jute runners and sisac runner. The major products of the
company are:

 Imperial mat
 Elegant mat
 Croma mat
 Paragon
 Rolex
 Endure
 Coral
 Lovers mat
 Rub flocky
  Coco flock

4.1 Products made from coir:

 Coco shift
 Bangal
 Queen
 Prince
 Classic
 Super form
 Passion
 Rainbow
 Magic mat
 Darken
 Crown

4.2 Products made from rubber:

 Shoe mat
 Iron mat
 Hollow mat
 Hexagon

4.3 Products made from poly propylene:

  Poly rope mat
 Non brush mat
 Raven
 Colombo
 Massio
 Condor
 Crown mat

4.4 Product made from Sea Grass:

 Orissa mat

4.5 Products made of Sisal:

 Sultan
 Mugal
 Bombay

4.6 Products made of Jute:

 Hawal
 Hook
 Miami
 Jaipoor

4.7 Washable collection includes

 Acqa
  Lily
 Lorry
 Milky
 Parry
 Sigma
 Sofine
 Coroma
 Elite
 Eva

 Tribo

5. Objectives Of The DC MILLS (P) LTD.

5.1Quality objectives:
a. To meet the customer demands for new designs and develop.

b. To reduce fuel consumption and production wastage.

c. To reduce customer complaints.

d. To control the cost of manufacturing

e. To improve the online delivery

f. To achieve continual improvement on MIS.

5.2Quality policy:
1 Market innovative products fully conforming to or surpassing

customer specifications, delivered on time.

2. Use ecofriendly manufacturing process.

3. Achieve continual improvement of products and manufacturing

process.

4. Always fulfill social commitments.

5.3 Company Policy:

The DC Mills follows a 30-30-30 policy which was formulated by the
M.D, Mr. K.J.Dennis. Every query from the part of the customer will
be addressed within 30minutes. The customer will be provided with
a sample within 30hrs and the shipment will be made within a
period of 30days from the receipt of the order. This is the 30-30-30
policy.

6. Awards

 Certificate of merit for the export of coir products 3rd position

during the year 1992-93.
 Second position during the year 1993-94.
 Merit certificate for the outstanding performance in pioneering
efforts during the year 1994-95.
 Second position during the year 1995-96.
 Certificate of merit from the government of India for
outstanding export performance in coir mats and matting
during the period 1995-96.
 First position for outstanding performance in the export of coir
products during the year 1996-97

 First position for outstanding performance in the effort in

promoting export and investment in coir industry during the
year 1998-99
 First position for outstanding performance in growth in export
of coir products during the year 1999-2000
 First position for the outstanding performance in research &
development efforts in product development & product
diversification during the year 1999-2000 .
 10.Highest position for the outstanding performance in export
of coir products during the year 1999-2000
 Millennium award for the contribution for the development
&promotion of coir industry
 Award for the top exporter under cepz for 2000-2001
 Award for the top exporter - coir products by Coir Board for
2002
 Award for the top exporter - coir products by Coir Board for
2003
 Award for the top exporter - coir products by Coir Board for
2004
 Award for the top exporter - Chamber of commerce -2005
 Award for the top exporter - Chamber of commerce -2006
 Award for the top exporter - Chamber of commerce -2007
7. ORGANIZATION CHART
8. DEPARTMENTAL PROFILE

Various departments in DC Mills are:

 SAMPLE DEPARTMENT

 PURCHASE DEPARTMENT

 STORES DEPARTMENT

 PRODUCTION DEPARTMENT

 HUMAN RESOURCE DEPARTMENT

 MARKETING DEPARTMENT

 FINANCE DEPARTMENT

 INFORMATION TECHNOLOGY DEPARTMENT

8.1 SAMPLE DEPARTMENT

Sample department is the first and important department that

comes before the production department. The duty of sample

department is to develop the samples according to buyer’s

requirement and developing samples according to the world fashion

and trend.

In sample department first the buyer gives the order of any mat of

his choice to the sample department. When the buyer sends the

request, some time he sends the design of his choice and in some

cases he asks the company to send the design for him. The sample

department has its own designers who draw the design for the

buyers. When the buyer accepts the design send by the company,

then that particular design is given a specific number. If there any

changes recommended by the buyer, it will done and given a new

serial number. Then the buyer sends the acceptance of the design.

After all the acceptance procedure is over, then the sample

department creates a stock order. This checks whether the

company’s store has that much of stock to fulfill the order. Then the

plates and mats are brought and printing is done. Normal cases

there make three sample pieces and out of which one is send to the

buyer. If there any alternation is needed, then it will send back for

modification and buyer places the order. Finally that order moves to

the production department and production starts.

The sample pieces are printed in the sample department itself and

according to the design plates are designed and with the plates the

mats are printed.

8.12 Departmental Structure

PRODUCTION MANAGER

SAMPLE IN CHARGE

ASSISTANTS
8.13 Functions of sample department

 Receiving sample request from buyer through

marketing department.

 Developing own samples with fashion and trend

with the co. ordination of designs.

 Sourcing of new articles in market.

 Checking and Processing.
 Check the faults.

8.2 PURCHASE DEPARTMENT

Purchase department is responsible for bargaining, procuring,

managing and storing the raw material needed for the production.
This department plays a very vital role in carrying out the
production process very smoothly. The main function of this
department is to maintain the needed stock in order to avoid the
delay in production. Purpose of buying of material and the control
of stock are of great importance in any business. If the proper
quantity and style of merchandise is bought at the right place and
time, half the task of selling is completed.
Purchases include:

 Mat Purchase
 Miscellaneous Purchase

Mat Purchase

For this type of purchase, sometime company buys some of the

materials from the local vendors. For the purchase of the materials
like coir and yarn needed for the production of the mats are
purchased from the local vendors. They invite quotations and for
the purchase of materials like PVC powder and glue they out source
the material from out side India. Whenever the material reaches the
company it will pass to the quality section to measure the quality
for the material made by the purchase department.

Miscellaneous Purchase

It will include the purchasing of various materials like machinery

parts, computers and other miscellaneous materials which is
needed for the production as well as administration of the company.

They maintain minimum level of inventory. The department keeps

the quality standard of raw materials by testing raw materials in
their own lab and prepare master safety data sheet. The department
keeps the records like quotation file, purchase order, comparative
statement analysis and various bills copies. Production planning
along with selection of raw materials to be purchased shall be done
by Purchasing Department.

8.21 Departmental structure

PURCHASE MANAGER

ASSISTANT PURCHASE
MANAGER

OFFICERS

OFFICE ASSISTANTS
8.22 The procedure for purchasing

NEED RECOGNITION

VENDOR SELECTION

PREPARATION OF PURCHASE
ORDER

DETERMINATION OF PRICE

ACCEPTANCE OF THE

PURCHASE ORDER

FOLLOW-UP

MAKING PAYMENT
The function of purchase department starts from recognizing the
needs of raw materials as per the requisition of the customers. Then
the vendor selection takes place and after that price is determined.
After this purchase order is prepared and acceptance of it takes
place. Then the payment is made.

 Need recognition
It is the first function in the purchase department. Firstly the
purchase department should find out all the needed items
through the purchase requisition made by the stores
department.

 Vendor rating & Selection

Most of the raw materials of D C Mills are imported.So
company is trying to make use of indigenous products by
seeking alternative supply so as to reduce cost and avoidance
of low stock of material. Vendor rating is done by using ABC
analysis. Quality, delivery, price and service are the factors
taken for vendor rating.

These factors are rated in the ratio of 50:40:5:5.Here A category

includes quality and delivery .B category includes price and service.
The company is having long-term relationship with many of its
vendors. As part of it, company is providing financial and other
assistance to its vendors. 50% of the company’s partners are its
vendors.

 Determination of the price

The next function of this department is to determine the price
needed for purchasing the material. Vendors providing feasible
price is selected.

 Preparation of the purchase order

After selecting the vendor the purchase order is prepared by
the department and sends it to the supplier.

 Acceptance of the purchase order

The supplier accepts the order and then sends the acceptance
receipt and it is accepted and properly maintained by the
company.

 Follow-up
Follow-up is made after all these steps. The main aim of this
step is to ensure timely delivery of the material.

 Making payment
giving Payment is made only to those who maintains and
provides invoice properly. After checking the invoice it is
approved for making payment to the supplier. Modes of
 payment are different in case of different vendors. Immediate
payment is to be made to the local coir vendors. In other
purchases one week to one month credit periods are allowed.
Company is also credit period up to one month for the payment
of its products.

8.23 Functions of purchase department

 Planning inventory level

In purchase department, inventory consists of a list of goods and
materials held available in stock.

 Identifying vendors
The company has a data base which contains a list of vendors.
From these list vendors have to identified.

 Procurement of quality raw materials

For the procurement of quality raw materials, keeping up quality
standards.

 Issue of purchase order

Purchase order being issued by the purchase department.

 Co-ordinate with production department

Purchase department co-ordinate with production department for
achieving the target.
 Periodical feedback to vendor through an evaluation process
By proper evaluation in a periodical manner, purchase
department check the satisfaction of vendors and made changes
if any.

8.3 STORES DEPARTMENT

The stores department is functioning as a part of purchase

department. They are following both FIFO & LIFO method for issue
and receipt of materials. They are maintaining different stock levels
so as to avoid the shortage of stock.

Purchase department make orders according to the instructions of

the stores department. Stores department find out any shortage
and surplus in stock and inform purchase department for giving
and taking orders. Warehousing facility is comparatively less for the
company.

Sub divisions of store department

 PVC Mat Store

  Coir Store
 Dying House Store
 Paint Store
 Chemical Store
 Finished Goods Store
 Stenciling Store

8.4 PRODUCTION DEPARTMENT

Production is the key function in almost all industrial or
manufacturing concerns. Production is the functional area
responsible for turning inputs into finished outputs through a
serous of production process. The production manager is
responsible for making sure that raw materials are provided and
made into finished goods effectively.

DC MILLS have 6 units and its main unit is at Valavanadu. Several

types of Mats are produced here. The production is based on the
orders. The production departments under the head of production
manager is coordinate with all other departments to see that
production is according to the standard of ISO 9001:2000 and then
it tries to achieve the objectives of the organization.
8.41 Departmental structure

PRODUCTION MANAGER

SENIOR EXECUTIVE

SUPERVISORS

WORKERS
8.42 Production process

BLEACHING & DYEING

SPOOLING

SHEERING

PVC TUFTING
 BRUSHING

FLOCKING STENCILING

 Bleaching and dyeing

Bleaching of coir fiber is important for color improvement. After

sorting raw material according to the shade and color variations
which is taken for bleaching. Dye vat machine is used for
bleaching and dyeing. The yarn material and water is filled into
the tub in the ratio of 1:2.Heat up to 65 degree Celsius and mix
the required quality of bleaching chemicals and water with the
help of a motorized stirrer. After washing the bleached yarn is
continued with dyeing process.
 The very same process is followed in the case of dyeing also.
Instead of bleaching chemical, dye and water is heated up to 65
degree Celsius using Hydro extractor for squeezing in order to
remove the water content. After squeezing the yarn is taken to
drier for drying.

 Spooling

After the process of bleaching and dyeing, the yarn is spooled in

to bobbins. The coir is spooled in 465 spools and with the help of
these bobbins further production is done. Then it is passed to the
mixing machine, here the coir is mixed with the pasty PVC mix.

 Pvc tufting

The spooled bobbins are then used in the tuft machines to

produce mat. Using the blade fixed in the tufting machine the
coir is cut to one inched pieces and it is placed over the PVC
mixture which is in a liquid form. PVC backing will set after
passing through the machine. After tufting we get a long mat
with huge width having high temperature.

 Sheering

PVC mat is passed through sheering machine to level the heights

of one inched coir placed on PVC. The finishing work is done
through this machine.
 Mat cutting

After all these process the PVC mat sheet is cutted in to the sizes
needed. Both manual and computerized machines are used for
mat cutting .Using computerized machines mat can be cutted
into different models or designs other than square model.

 Brushing

Brushing process is done to remove the dust and yarn materials

in the mat. Hand brush is done for minimizing the wastes and
then it will go for printing and flocking.

 Flocking/stenciling

After brushing, the mat is gone either to the flocking section or to

the stenciling section. In some cases it is needed to pass through
both the stages. In such case, stenciling is done firstly. Flock
powder and glue is used in the flocking process.

In this process flock powder is spattered into the mat and the
flock powder will get fixed only on the gummy part of the mat. In
stenciling process, paint is sprayed on the mat on which stencils
is placed.
 Packing

After completing the above production functions the products are

forwarded to the packing section for packing .Different types of
packing and labeling are used by the company as per the order.

Steps in packing

 Tagging
 Labeling

8.43 Functions of production department

 Receiving orders from marketing department.

 Receiving original samples from sample department or develop
samples as per buyer specification.
 Production planning according to the time and ordered
quantity.
 Inspection of produced or purchased mat
 Stenciling.
 Inspection.
 Packing.
 Final inspection of goods ready to dispatch.
 Forward to shipping.
8.44 Responsibilities of the production manager

 To establish standards and target for each section of the

production process.
 Effective co-ordination of various production processes.
 Ensure products are produced as per the buyer’s
specifications.
 Try to reduce the cost of production.
 Reduce wastage by the maximum utilization of raw materials.

8.5 HUMAN RESOURCE DEPARTMENT

The human resource department is mainly concerned with the

whole development of work force. For any organization employees
are hidden assets. Without these employees no company can work
effective. HR department is considered as an indispensable part of
every organization. The personnel and administration department
comes under this department.
 Human resource development department is a very important
functional department in any organization. Human factor in any
organizations considered as a significant aspect. Because every
business enterprise must ultimately depends upon the best possible
efforts of the human beings works for it.

8.51 Departmental structure

 SENIOR MANAGER HR

ASST: MANAGER HR

HR ASSISTANT

SECURITY SUPERVISOR

OFFICE ASSISTANTS

DC Mills has an eminent HR department managing around 1500

employees, to enable the smooth functioning of the company. HR
department is practicing various programmes including human
resources planning, recruitment and selection, training and
development, orientation placement and induction programmes,
welfare and social security measures, job analysis and evaluation,
compensation management system, grievance handling measures,
work committee, measures to reduce turnover and absenteeism.
8.52 Functions of human resource department

 Manpower planning

DC Mills is conducting planning and forecasting activities to

assess future need of employees. Manpower planning is the
process of determining manpower requirement and the means for
meeting these requirements in order to carry out the integrated
plans of the organization.

 Recruitment

This is the most important function of HR department.

Recruitment is the development and maintenance of adequate
manpower resources. It involves the creation of a pool of
available labour upon whom the organization can depend when it
needs additional employees. The company adopts following
recruitment methods.

 Registers system- it is the form of register

maintained by the company to recruit employees

 Campus recruitment-company also recruits fresh

candidates from colleges and other professional institutions.
It is mainly done for engineering and managerial post.

 Advertisement in news papers

 Employee reference
  Walk in workers

 Selection

Selection is done for selecting right person for the right job with
requisite qualification and competence to perform the job. D C
Mills have the following selection procedure.

 Preliminary Interview / Group Discussion

 Application Blank
 Employment tests
 Employment Interview
 Reference check
 Medical exam
 Final Selection

 Training and development

Company maintains a training calendar through which a company

forecast its training programme. The company takes suggestion of
supervisors for training methods. Off the job as well as on the job
training methods are provided.
 The company is providing training to existing as well as new
workers as and when necessary. Workers are provided counseling
frequently to give assistance to them in their duties. They are
motivated through the counseling programmes towards the
performance of work and thereby achieving organizational goals.
Company adopts a full fledged training programme for employees.

Chart showing the treatment of a new employee

New employee

Induction to the Identify need through

system directly questionnaire

Prepare training plan

Identify faculty

Evaluate Issue circulars

effectiveness
 Orientation, Placement and Induction programmes

When new people are placed, the company is very cautious in giving
enough orientation and Induction programmes to them. Company is
providing more training and development to them so as to get
acquainted with the nature and functioning of the organization.

 Welfare and Social security measures

Welfare measures include the following,

 Welfare Society

Company maintains welfare society for the welfare of its

members, staff and workers.

 Sneha Bhavan

Company provide house under Sneha Bhavan programme

to those workers who does not have house.

 Tour programmes

Company conducts tour programmes for providing

entertainment to staff and workers each year.
  Wedding Programmes

For the staffs and workers who are in the poorer section
the company conducts wedding programmes.

 Cultural programmes

The company conducts many cultural programmes like

arts and sports for the entertainment of members,
workers and staffs.

 Educational facilities

The company is also providing educational facilities for

the employee’s children.

 Health insurance schemes for employees

 Yearly get together of employers and employees

family members.

 Job Analysis and Job Evaluation

Job analysis is made for each job to know about the nature of
job and the requirements of the job. By doing this, the
 company can understand which type of people are required for
each job and their qualifications and abilities.

Job evaluation and performance appraisal is also done to

know about the performance level of each employee to give
assistance to them to improve this performance level. It also
helps to fix the remuneration to workers. In D C Mills most of
employees are paid on the basis of their performance.
Performance appraisal is made in every three months.

 Compensation Management System

DC Mills is maintaining effective compensation management

system so as to give prompt and correct payment to its
employees. They are also giving incentives to its workers or
employees to motivate their performance of job.

 Grievance Handling Measures

The company is provided grievance box in each working unit

or sections so as to put complaints and suggestions by the
employees.

 Works Committee

To maintain a good industrial relation, D C Mills create works

committee which includes participants from almost all
 departments & sections. Problems of all employees are
discussed & solved in the works committee. Works committee
meets once in three months.

 Measures to reduce Absenteeism

Company is taking measures to reduce turnover and

absenteeism by providing various incentives to employees.
Counseling is given to reduce absenteeism. If it is not
effective, as a final treatment punishment measures are taken
against them.

8.53 Responsibilities of the human resource manager

 To ensure better working condition for the employees.

 To implement the policies framed by the top
management.
 To encourage employees welfare activities.
 Formulation of policies on wage and salary
administration, performance appraisal, welfare
activities etc.
 Establishment of a proper system for the collection of
feed back.
 Problem solving like grievance over distribution of
overtime work, annual increase in pay, transfer
promotion and so on.
8.6 MARKETING DEPARTMENT

MANAGER

EXECUTIVES

OFFICE ASSISTANTS

8.61 Objectives of Marketing Department

 Achieving and sustaining customer satisfaction

 Explore new markets of the company

 Explore new distribution channels

 Develop new marketing policies

 Conducting market research

  Reports at regular intervals.

 Control marketing activities.

In order to achieve the above objectives the department

concentrates on Internal & External communication. There should
ensure proper communication takes place right from the receipt of
enquiry till the goods are on board.

8.62 Order enquiry

In D C Mills order enquiry is made through trade fairs, through

Export, through Promotion councils etc. Samples are developed
according to the buyer’s requirement and forwarded along with
prices. Sample Department takes care of the same.

On acceptance, the buyer forwards an order sheet containing

details as to the item required, quantity, price, and terms of
payment and with Ship date as required.

The company is now going to introduce their washable products

which are produced in their unit at Pathirapally in the local market
taking into account the acceptance of those products in India.

A new marketing department is created by them for this purpose.

Now they are launching advertisements for those products.
8.63 Process taking place on the receipt of the order

RECEIPT OF ORDER

ORDER REVIEW

ORDER ACCEPTANCE-PROFORMA INVOICE

RECEIPT OF L/C PROGRAMME SHEET

PRE-SHIPMENT SHIPMENT PLAN

DOCUMENTS

POST-SHIPMENT PACKING INSTRUCTIONS

DOCUMENTS

DESPATCH OF GOODS

On the receipt of order, the order sheet is reviewed for quantity and
ship date. Once the order is reviewed, the company expresses its
acceptance by forwarding Proforma Invoice, wherein all details
regarding the items to be produced, price, ship date, etc are given.
This enables the buyer to open Letter of Credit.

8.64 Terms of payment

The various terms of payment, which the company accepts by

mutual consent are as follows:

 Telegraphic Transfer
 Cash against document
 Letter of Credit

8.65 Terms of shipping

The terms for shipment include:

 Free on Board
 Cost & Freight
 Cost, Insurance & Freight

8.66 Work order

This is an internal document, which the department issues to the
Production unit. After giving this production facility like dyeing,
weaving, stenciling etc are planned in advance.

8.67 Special instructions and packing instructions

Special instruction is also an internal document, which contains
details as to the quality parameters of a particular item, as required
by the buyer. Packing instruction which also falls under the
internal document, is issued to the production & packing
department, where details of tag & label, stickers if any is given
along with the packing details.

8.68 Invoice
It covers the value of goods, port of discharge, final destination,
terms of payment etc.

8.69 Packing list

It covers packing details of the goods i.e. number of cartons,

number of pieces packed per carton, net weight, gross weight,
volume etc.

8.610 Despatch of goods

Once the goods are inspected and packed, they are ready for
dispatch and arrangements are made for the same.

The goods that are dispatched can be of two types:

1.FCL – Full Load Container

2.LCL - Low Container Load

 8.7 FINANCE DEPARTMENT

This department deals with finance and its management. And also
keeps all the accounts of the company. Finance is the life blood of
the every company. So its management merits special importance.
For the effective functioning of an organization, the primary
necessity needed is adequate finance. Proper allocation of finance at
right time is necessary for the achievement of company goals and
objectives.

8.71 Departmental structure

G M (F&A)

Manager (F&A)

Treasury Accounts Manager Manager

Manager Manager Costing
(Forex)

Accounts Officer

Accounts Accounts Accounts Accounts Accounts Accounts

Asst. Asst. Asst. Asst. Asst. Asst.
8.72 Activities of the finance department
 Sources of finance

 Sales realization
 Credit from supplier
 Short term and long term loans
 Ploughing back of profits

 Maintenance of records

The company using mercantile system for the maintenance of

records. The company preparing cash account all other
statutory accounts.

 Depreciation policy
The company is following written down value of depreciation.

 Budgets

The company is preparing budgets annually to forecast the

expenses and revenues.

 Working capital management

Stock management, Debtors management, Creditors

management, cash management etc are made by the
company as a part of working capital management and using
 all details after assessing the working capital need of the
company.

 Provision for acquisition of assets

Company is not taking much effort to make provision for

acquiring new assets. The reason is that the owner of the
company is using major part of the profit for company’s
expansion and development.

 Credit policy

The company is providing maximum of one month credit to its

buyers and they are getting credit periods of one week to one
month from its suppliers. Some suppliers are needed to be
paid immediately.

 Ratio analysis

The company is making ratio analysis to assess its

operational efficiency. Turn over ratio, current ratio etc are
analyzed every year.
8.73 Functions of finance department

 Financial analysis, planning and control of finance.

 Management of current assets.
 Identification of sources and use of funds.
 Preparation of financial statement.

8.8 INFORMATION TECHNOLOGY DEPARTMENT

DC MILLS are fully computerized and all its transactions are

recorded through computers. DC MILLS have developed a separate
ERP program for its operation. Once the order is entered, it will go
to the purchase department, stores, finance and partially to the
production department. For accounting function visual basics are
used for programming. DBMS is also there in the organization on
an SQL server. In the company there are 60 computers inter
connected as WAN with OFC technology.

8.81 Functions of IT department

 Co- ordination of technology throughout organization.

 Assist departments in applying technology to meet their
respective needs.
 Purchase equipment.
 Concept planning.
 Install, support and maintain systems and standard
technologies
9. SWOT ANALYSIS

Strengths
 It is the first ISO 9002 certificate holder for coir products in
India
 First in the world for PVC backed coir products.
 Keeping quality products by using good and standard raw
materials.
 Well equipped personnel for effective running of the
business
 From the year 2000 onwards, the company has been
honored with the best coir exporter by the Government of
India.
 Customer satisfaction is the key word for the organization.
 The company has its own warehouse in foreign countries
 Company owns most modern machinery
 Effective organizational planning
 Company has a high future growth.

Weaknesses
 Some of the raw materials like glue and some molding
machines are imported. The timely availability of these
materials affects production.
  The costs of these materials are costly.
 No measure to recycle the wastage.
 There is no canteen facility for the employees.

Opportunities

 Being an export company it can enter into foreign market.

 Company has enough facility for future expansion.
 The company can tap newer markets because the company
has its own potential.
 Company is having a good project and implementation
department. This will have the capacity to produce new and
variety products.
 Availability of raw materials.

Threats

 Rigid taxation policy acts as a hinder to enter into foreign

market.
 Tough competition.
 Increase in the price of the raw materials.
 The trade union intervention will occur as a threat.
 Strikes in the coir sector affect the working of the company.
 Rubberized coir from Sri Lanka and coir geo textiles from
Vietnam, cheaper coir products from Thailand, Philippines
 have taken a part of the export share held by Indian coir
products.

10. OBSERVATIONS:

Major observations are:

 DC MILLS is a 100% exporting company. Company is

committed to a process of continuous improvement. It is
market leader of coir exports in India.
 The company has the most modern machine for extruding
yarns and multi-operational coating machine for the square
pyramid and bubble backing.
 DC MILLS is an example of efficient management. All the
functions are fully computerized.
 Company has a good recruitment and selection policy through
which it possess a talented and enthusiastic work force in the
administration as well as operative level.

11.SUGGESTIONS:

 Try to produce all raw materials in India.

 It will be better for the company to procure some of the raw
materials within the country which will reduce the cost of
production.
 It is better for the company to enter into local market.
  Entering into the local market helps to capture the Indian
market along with the foreign market.
 Developing a recycling plant.
 Wastage is part of production. That cannot be eliminated but
can be reduced or can be recycled.

12. CONCLUSION

Being a 100 % export oriented unit D C Mills is now in the position

of the top exporter of coir products in India. They are having a good
reputation in the coir industry by making a major contribution to
the industry. Their constant drive to upgrade quality standards in
all areas of activity and all products has enabled the company to
acquire a dominant position in the foreign market.

The company is now thinking to launch their products in the local

market by keeping in view the benefits they will get by their
entrance in the local market. Company also have a high future
growth and maintains good quality on the products they are
manufacturing.
13. BIBLIOGRAPHY

1. Kothari C.R, Research Methodology, Vishva Prakashan

Pvt.Ltd.New Delhi.
2. Pandey I.M, Financial Management, Vikas Publications
House, 7th Edition.

 www.dcmills.com
 www.coirboard.com
 www.coirindia.com
 www.coirkerala.com