ICL Internship Report

Ittehad Chemical Limited

Zain Nawaz

ITTEHAD CHEMICAL LIMITED

Ittehad Chemicals Limited, Kala Shah Kaku, G. T Road, Sheikhupura. URL: http://www.ittheadchemicals.com

Submitted To. Mr. Asmat Nawaz Khattak Department of Human Resource

Submitted By. Zain Nawaz BBA-FA09-154

Submission Date 04 September 2010 M. A. Jinnah Building Defence Road, Off Raiwind Road, Lahore http://www.ciitlahore.edu.pk Tel: +92 (42) 111-001-007 Fax: +92 (42) 9203100

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Internship Report On Ittehad Chemical Limited

Submitted To. Mr. Asmat Nawaz Khattak

Submitted By. Zain Nawaz BBA-FA09-154

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Dedication Dedicated to my Family and all those who helped me in this internship.

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

ACKNOWLEDGEMENT

All the praise are for “Almighty Allah” whose uniqueness, oneness and wholeness are absolute. Who gave me enough courage, knowledge and ability to accomplish this assignment?

All respects are for His “Holy Prophet Hazrat Mohammad peace be upon him “Who enabled me recognizes oneness of my Creator? My Parents whose rising gave me character and a compassionate heart.

So I pay my gratitude to Mr. Asmat Nawaz Khattak whose cooperation on every step of this subject is highly appreciable. Without his cooperation it was not possible to complete this task. And Special Thanks those who help me during the internship period.

ZAIN NAWAZ 4

COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

PREFACE Ittehad Chemical work and research based on assignment are an integral are an integral part of BBA program. This practical work known as “INTERNSHIP”, play the vital role for a student of management to come across the practical aspects of the theoretical concepts of books. Bookish knowledge is of no value without exposure to the practical. The internship provides an opportunity to see and observe the working environment of the organization.

This study of internship is conducted Ittehad Chemical Limited (ICL) a pioneer electronics manufacturer in Pakistan in which different services and products, procedures and practices discussed.

This report will give you brief description about Ittehad Chemical Limited; first part is about the Executive Summary. Other part of this report is about General functions. And in the end there is SWOT analysis and conclusion about Ittehad Chemical Limited.

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Ittehad Chemical Limited

Zain Nawaz

Table of Contents Executive Summary:...................................................................................................................................... 9 Vision:...................................................................................................................................................... 10 Mission: ................................................................................................................................................... 10 Core Values: ............................................................................................................................................ 10 Culture (People): ..................................................................................................................................... 10 Culture (Quality & Training): ................................................................................................................... 11 Background: ................................................................................................................................................ 11 Awards won by ICL: ..................................................................................................................................... 13 28th FPCCI Export Trophy Awards 2003-04: ........................................................................................... 13 LCCI Achievements Award 2005: ............................................................................................................ 13 33rd FPCCI Export Awards 2008-09 (July-June): ..................................................................................... 13 DEPARTMENT OF ITTEHAD LIMITED: .......................................................................................................... 14 My internship departments: ....................................................................................................................... 14 Human Resource Department .................................................................................................................... 15 Time Office: ............................................................................................................................................. 16 Gate Office: ............................................................................................................................................. 17 Security system: ...................................................................................................................................... 17 Medical Office: ........................................................................................................................................ 17 Transport Office: ..................................................................................................................................... 17 Canteen/mess Department: ................................................................................................................... 18 Estate Office: ........................................................................................................................................... 18 Record Office: ......................................................................................................................................... 18 Personnel Department:........................................................................................................................... 18 Internal audit department: ......................................................................................................................... 19 Analyses Operations ............................................................................................................................... 20 Reviews Compliance ............................................................................................................................... 20 Recommends Controls ............................................................................................................................ 20 Assures Safeguards ................................................................................................................................. 21 Financial Statement Audits: .................................................................................................................... 21 Operational Audits: ................................................................................................................................. 21 Information Technology Audits: ............................................................................................................. 21

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Ittehad Chemical Limited

Zain Nawaz

Management and Special Requests:....................................................................................................... 21 Purchase to pay cycle:................................................................................................................................. 22 Indent: ..................................................................................................................................................... 22 Comparative statement: ......................................................................................................................... 23 Purchase order: ....................................................................................................................................... 23 Goods Receivable and Inspection Report: .............................................................................................. 23 Invoice: .................................................................................................................................................... 23 Account payable: .................................................................................................................................... 24 Check or money: ..................................................................................................................................... 24 Order to cash cycle: .................................................................................................................................... 24 Sale order: ............................................................................................................................................... 24 Checking availability of inventory: .......................................................................................................... 24 Checking customer credit limit: .............................................................................................................. 24 Preparation of Delivery of Goods: .......................................................................................................... 25 Invoice: .................................................................................................................................................... 25 Account receivable:................................................................................................................................. 25 Check or money: ..................................................................................................................................... 25 Post-audit: ................................................................................................................................................... 25 Production Department: ............................................................................................................................. 26 Interaction between R&D and Production: ............................................................................................ 27 Ittehad Chemical’s Products: .................................................................................................................. 27 Quality Control & Ware House Department:.............................................................................................. 28 Purchase Department: ................................................................................................................................ 29 Purchasing Cards: .................................................................................................................................... 30 Tactical purchasing: ................................................................................................................................ 30 Marketing Department: .............................................................................................................................. 31 Market research:..................................................................................................................................... 31 Quantitative ........................................................................................................................................ 32 Qualitative ........................................................................................................................................... 32 Finance Department: .................................................................................................................................. 32 Bookkeeping ........................................................................................................................................... 33 Profit and Loss......................................................................................................................................... 33

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Ittehad Chemical Limited

Zain Nawaz

Update Managers ................................................................................................................................... 33 Financing ................................................................................................................................................. 33 Functions:................................................................................................................................................ 33 Accounts Department: ................................................................................................................................ 34 SWOT analysis: ............................................................................................................................................ 35 STRENGTHS: ............................................................................................................................................ 36 WEAKNESS: ............................................................................................................................................. 36 OPERTUNITIES: ........................................................................................................................................ 36 THERATS: ................................................................................................................................................. 37 Conclusion: .................................................................................................................................................. 38 Glossary:...................................................................................................................................................... 39 References: ................................................................................................................................................. 40 Information Taken from persons: ........................................................................................................... 40

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Ittehad Chemical Limited

Zain Nawaz

Executive Summary: Ittehad Chemicals Limited (ICL) was established in 1962 under the name of United Chemicals by a private entrepreneur. ICL was commissioned in the year 1964 with an installed capacity of 40 MT/day of Caustic Soda. The initial plant was set up by M/S Oronzio Denora of Italy. Under the Economic Reforms Order, United Chemicals was nationalized in 1971 along with other industries of the country and renamed as Ittehad Chemicals. It was initially managed by the Board of Industrial Management and thereafter the Federal Chemicals & Ceramics Corporation Ltd under the Ministry of Production, Govt. of Pakistan. During the state enterprise period its production capacity was raised by another 90 tons/day during the year 1984-85. The factory was ultimately denationalized in 1995 by the Privatization Commission Govt. of Pakistan. It was acquired by the Chemi Group of Industries, a Karachi based dynamic entrepreneurial group. The new management immediately undertook the task of refurbishing the factory, its infrastructure, and updating its production line to improve efficiency and capacity. I did my internship in the Human Resource and Internal Audit department of ICL I learned a lot during my internship period. The personnel department is under the Human Resource (HR) department and it’s another name is Administration department which handle the all workers of the factory. Human Resource department’s duty is to assign the jobs, hiring and right sizing of employees, Training and development and compensation system. And these areas come under direct supervision of HR department at ICL. Security and fire fighting, Gate supervision, Fair price shops, Canteen supervision and Dispensary and health care. The Internal Audit department whose work is to check and balance of every department. I learned mostly in this department that how check and balance of finance department and check the vouchers of purchasing goods after this order for the product.

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Ittehad Chemical Limited

Zain Nawaz

Vision: To be the first choice of preference by customers looking for premium quality chemical products. They aspire to be a trend setter in our industry and always look to the future with courage and a commitment to excellence in all their practices.

Mission: They work for their customers to provide a trusted and reliable source of chemical products. Hence, through constant innovation and research they pride their selves on their unrealities drive to continuously add-value to their stakeholders, employees, and customers. They strive for sustainable growth in harmony with their environment and suppliers to foster a cordial and mutual relationship.

Core Values: They have made a commitment to their customers to deliver the highest quality of chemicals in their chosen segments of operation. They have purposed is to honor this promise and continue to meet and exceed both their customer and stakeholder expectations.

Culture (People): The tremendous success of ICL has attracted high profile employees from near and far. ICL is located at Kala Shah Kaku, District Sheikhupura. This area is reputed for growing high quality high aroma extra long grain rice. The quality of its rice produced is second to none and is acclaimed world-wide. The skilled / semi skilled workers mostly belong to this area and its surrounding vicinity. The establishment of ICL way back in 1962 brought about a revolutionary change in the life style of the people of the area. By nature, the people of the area are hard-working and pride themselves on their commitment. Over the years, Kala Shah Kaku has developed into a hub of commercial,

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Ittehad Chemical Limited

Zain Nawaz

industrial, and educational activities contributing directly towards the prosperity of the local people.

Culture (Quality & Training): We believe that quality input can only produce quality output. Accordingly, we develop training programs that help polish our human intellectual capital. Our training programs are based on in-house and on-the-job exposure. Accordingly, we constantly monitor the performance and value-addition of our employees through an annual appraisal and compensation system. This assures that our employees are motivated, committed, and constantly updating themselves for the benefit of all parties involved.

Background: Ittehad Chemicals Limited (ICL) was established in 1962 under the name of United Chemicals by a private entrepreneur. ICL was commissioned in the year 1964 with an installed capacity of 40 MT/day of Caustic Soda. The initial plant was set up by M/S Oronzio Denora of Italy. The factory is strategically located on the 19th/20th Kilometer of GT Road and spread over an area of 106 acres. It is approachable from the Lahore-Islamabad Motorway as well as from the main city of Lahore, being less than an hour drive. The place is known as Kala Shah Kaku, an industrial site which has seen the growth of industries over the past decades stretching up and beyond Gujranwala along the G.T Road. Apparently, Kala Shah Kaku and its neighboring vicinities have both gained tremendous importance and become a hub of commercial, economic and educational activities. As industrialization flourished over the years, a large number of small townships also mushroomed in and around the vicinity due to availability of livelihood to the local residents at their doorsteps.

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Under the Economic Reforms Order, United Chemicals was nationalized in 1971 along with other industries of the country and renamed as Ittehad Chemicals. It was initially managed by the Board of Industrial Management and thereafter the Federal Chemicals & Ceramics Corporation Ltd under the Ministry of Production, Govt. of Pakistan. During the state enterprise period its production capacity was raised by another 90 tons/day during the year 1984-85. The factory was ultimately denationalized in 1995 by the Privatization Commission Govt. of Pakistan. It was acquired by the Chemi Group of Industries, a Karachi based dynamic entrepreneurial group. The new management immediately undertook the task of refurbishing the factory, its infrastructure, and updating its production line to improve efficiency and capacity. Shortly after the takeover, the plant capacity was soon raised to over 200 tons/day. The environmental friendly “Ion Exchange Membrane Plant” was added to the production line in the year 2003 with a capacity of 163 tons/day. This was shortly enhanced to 240 tons/day with the addition of more IEM Electrolyzes. The new technology is not only environment- friendly but also power-conscious. However, due to its subtle and urbane nature, it requires an uninterrupted power supply for trouble-free operations. Accordingly, the company established its own state-of-the-art Power Plant of 30 MW capacity in the year 2005. With a rich and illustrious history, ICL is the founding company in Pakistan for the Chloralkali industry. It has paved the way for other organizations competing in the local market. With a growing interest for ICL products in the international market, the organization has made the necessary arrangements (and will continue to do so in the future) to cater for the growing demand.

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Ittehad Chemical Limited

Zain Nawaz

Awards won by ICL: 28th FPCCI Export Trophy Awards 2003-04: Federation of Pakistan Chambers of Commerce & Industry Merit Trophy Awarded to M/S Ittehad Chemicals Ltd. for export of Hydrochloric Acid, Liquid Chlorine, & Bleaching Earth

LCCI Achievements Award 2005: The first ever LCCI Achievements Award was presented by Mr.Shaukat Aziz (at the time - Prime Minister of Pakistan) to Ittehad Chemicals Ltd.

33rd FPCCI Export Awards 2008-09 (July-June): The Federation of Pakistan Chambers of Commerce & Industry Presents the Merit Export Award Certification To: Chemi Chloride Industries Limited, Lahore For: Export of Calcium Chloride Prills.

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Ittehad Chemical Limited

Zain Nawaz

DEPARTMENT OF ITTEHAD LIMITED: The departments which are currently in operation at ICL are as follows: 1. Production Department 2. Mechanical Department 3. Electrical Department 4. Instrument Department 5. Planning & Development Department 6. Quality Control & Ware House Department 7. Systems & Technical Department 8. Power Plant Department 9. Finance Department 10. Admin(HO) Department 11. Internal Audit Department 12. Marketing Department 13. Purchase Department 14. Personnel Department 15. Human Resource Department 16. And others Departments.

My internship departments: My internship departments are Human Resource & Personnel Department and Internal Audit Departments and some other departments are briefly explained.

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Ittehad Chemical Limited

Zain Nawaz

Human Resource Department Human resource is a term used to describe the individuals who comprise the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials 'HR'. Human resources are a relatively modern management term, coined in the 1960s. The origins of the function arose in organizations that introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. From these terms emerged a largely administrative management activity, coordinating a range of worker related processes and becoming known, in time as the 'personnel function'. Human resources progressively became the more usual name for this function, in the first instance in the United States as well as multinational corporations, reflecting the adoption of a more quantitative as well as strategic approach to workforce management, demanded by corporate management and the greater competitiveness for limited and highly skilled workers. Human Resource Department is the most important and key department of every organization. It not only deals with the employees of the organization but also help in management of the affairs of the company. Ittehad chemical limited has a full fledge HR Department known as HR or Administration department with the staff main managers are two employees. The GM is the top executive in the HR department and there is one manager of HR to facilitate the work of G.M. and personnel and admin officer. HR Department’s activities are spread over the whole organization. The following areas come under direct supervision of HR department at ICL. 1. Hiring and right sizing of employees

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Ittehad Chemical Limited 2. Training and development 3. Compensation system 4. Security and fire fighting 5. Gate supervision 6. Telephone exchange 7. Fair price shops 8. Canteen supervision 9. Dispensary and health care

Human resource or Administration department’s under following departments.

Establishment Section

Time Office Gate Office Security system Medical Office Transport Office Canteen/mess Department

Estate Office Record Office Personnel Department

Time Office: The office where Appointment letters are receiving and all the record of attendance of employees, there record the overtime which is granted to the employees. Due to time

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Ittehad Chemical Limited

Zain Nawaz

office we can make easily employees salaries. All employees leave to the time office and at the end of the month time office prepared a report about employee’s attendance. And send it to Finance department.

Gate Office: Gate Office record all gate inward and gate outward. Where goods when purchase from any company and when these goods enter in the factory then check the goods and entered in workplace. The gate office prepared gate inward and outward and send it to finance department and then finance department send it to internal audit department where they check it.

Security system: Security is practiced in different silos, which prevents standardization or a real understanding of what the company's risk level is. To address the issue, a CISO position must be created, and that officer should be responsible for security in all of these areas. He/she has to set up processes, communication structures and reports. ICL have a security system in factory on the both gate of factory they checked all worker and vehicles.

Medical Office: Medical department is created for the employees that whenever in factory incident incurred they facilitate the employees. This welfare is granted by company management.

Transport Office: The transport facilities are given to all employees of the organization where they pit up them from their homes to factory and then back to home at the time. The transport have

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Ittehad Chemical Limited

Zain Nawaz

root from factory kala shah kaku sheikhupura road to head office empress road Lahore. Morning timing is 7:30 and then return time is 4:30.

Canteen/mess Department: The facility of mess is only given to the staff officers and internship students and managers. This facility is given by almost every organization because without eating something a person cannot leave.

Estate Office: Estate office measures the estate of factory and estimate which place is good for any work. In ICL a small estate office where they just tell the company value of the estate and inform after every period.

Record Office: In the record office records of every employee of the organization. In the record offices most of companies use the computers. All employees’ daily attendance also record in record office. in the record office they also record of leaves of employees. In ICL the Fazal Abass is the officer of record office.

Personnel Department: The Corporate Personnel Department is functioning under the overall control and guidance of Director (P, A&W) with GM (Personnel) as Head of the Department. There are five wings in Corporate Personnel Department which are under the charge of a senior officer namely, Industrial Relations, Personnel Management, Recruitment, Welfare and Executive Establishment. The G.M (Personnel) will oversee and coordinate the functions in each wing.

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Ittehad Chemical Limited

Zain Nawaz

The Department is playing key role in streamlining industrial relations, personnel policies and in implementing all the measures being initiated by the Management as part of bringing about reforms in the Company. This process entails involving constant communication with workmen and dealing with unions in a fair and transparent manner with a view to make them agree to the proposed measures. All efforts are made for timely implementation of the agreed items in the past settlements so as to avoid usual complaints from the unions of non-implementation of agreed items. All the policies relating to promotions/transfers, up gradations, punitive actions are carried out in a transparent manner so as to create credibility of the management in the perception of the workmen. Constant efforts are also being made to improve the existing systems so as to keep pace with the changes by focusing on key result areas like improving discipline among workmen, minimizing flash strikes, taking action against chronic absentees who are not contributing to the growth of the Company, improving work culture, etc. In the personnel department give daily base jobs and all record of every employee. EOBI is also prepared in personnel department as Under Section 22 of the Employees Old-Age Benefits Act, 1976, age limit for men was fixed at 60 and 55 for women through an amendment in the Act in 1986. In the case of miners, in 2002 it was reduced to 55 for those who had worked for at least 10 years in this occupation immediately preceding their retirement. In most organizations, the retirement age for employees, especially men, has been fixed at 60. Therefore, it appears logical that institutions like EOBI should also start paying the pensions from this age. They make all record of EOBI.

Internal audit department: Helps ensure the company operates as effectively and economically as possible; to this end, Internal Audit provides assurance services through the following approaches: •

Analyses Operations

•

Reviews Compliance

•

Recommends Controls 19

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Ittehad Chemical Limited •

Zain Nawaz

Assures Safeguards

Analyses Operations Internal Audit reviews procedures and operations closely, confirming that they are being followed correctly and that they support the company’s goals and objectives. After examining processes and procedures, Internal Audit reports its findings and works closely with auditees to provide accurate and pertinent recommendations that help the company to adhere more closely to its objectives.

Reviews Compliance Internal Audit supports Senior Management and the Audit Committee of the Board of Governors by staying fully educated about the intricacies of, implementation strategies for, and compliance with current regulations and legislation. Internal Audit is responsible for explaining and detailing the impact that non-compliance would have on the company, for informing Senior Management and the Audit Committee about signs of major non-compliance, and for identifying areas that do not conform to policies and guidelines.

Recommends Controls Internal Audit evaluates the efficiency and effectiveness of current controls and determines if those controls can truly mitigate the risks that can threaten the company. Effective internal control is a built-in component to the management process and keeps the company on course toward its objectives and mission. Internal control promotes effective and efficient operations, reduces the risk of asset loss, and both heightens the reliability of financial reporting and strengthens compliance with laws and regulations.

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Ittehad Chemical Limited

Zain Nawaz

Assures Safeguards Internal Audit reviews the means used by the company to protect its assets, and assesses whether the appropriate safeguards are in place. If company assets are not well protected, then Internal Audit must recommend how to address the issue identified. To fulfill our responsibility, we provide the following services to the company:

Financial Statement Audits: Determines the fairness of the presentation of financial data.

Operational Audits: Determines whether internal controls are adequate and working as intended, and whether operating procedures are performed efficiently and cost-effectively.

Information Technology Audits: Includes participation in system development projects and committees, pre- and postimplementation reviews for application systems, operational integrity reviews, system evaluations, consultation, and programming across the company's information systems environment.

Management and Special Requests: Includes performance of various reviews at management’s request, including management audits, fraud reviews and other special services.

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Ittehad Chemical Limited

Internal audit department

Pre-audit

post-audit

Purchase to pay cycle

Order to cash cycle

Indent

Sale Order

Comparative Statement

Checking Availability of Inventory

Purchase Order

Checking Customers Credit Limit

Goods Receivable and Inspection Report Preparation of Delivery of Goods Invoice

Invoice

Account Payable

Account Receivable

Check

Check

Purchase to pay cycle: Indent: An indent can be an addition to a legal contract. The purpose of this document is to explain what indent orders are, and how to choose indent orders when required. At the last indent check by the internal audit department.

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Final Report

Ittehad Chemical Limited

Zain Nawaz

Comparative statement: Analysts like comparative statements because they show the effect business decisions have on a company's bottom line. Analysts can identify trends and evaluate the performance of managers, new lines of business and new products on one statement instead of having to flip through individual financial statements from different periods of time. When comparing different companies, a comparative statement can show how businesses react to market conditions affecting an entire industry. Internal audit department check the purchase orders to different companies for product and then select one of them company which gives them low rate of price.

Purchase order: After comparative statement the internal audit purchase orders to the selected company. This order prepared on the new business software SAP (system analysis & program development.

Goods Receivable and Inspection Report: After purchase order the selected party delivers the goods and after receiving the goods then they give invoice.

Invoice: After receiving the goods they prepared invoice. The commercial invoice is a key document in international trade. In addition to playing an essential role in the commercial transaction, it has an important function as a source of information and supporting document for administrative procedures in the importing and the exporting countries.

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Ittehad Chemical Limited

Zain Nawaz

Account payable: After preparing the invoice the sale company written as an account payable. On the due date they give them check or money.

Check or money: On the due date the buying company gives check or money.

Order to cash cycle: Sale order: Seller generated document that authorizes sale of the specified off-the-shelf item(s), issued after receipt of a customer's purchase order. It usually implies that there will be no additional labor or material cost incurred for the sale, except where it is used to initiate a production process.

Checking availability of inventory: After the sale order the company checks the availability of inventory. That how many inventory they have in hand.

Checking customer credit limit: Then they also check the customer credit limit. This is check and balance by internal audit department.

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Ittehad Chemical Limited

Zain Nawaz

Preparation of Delivery of Goods: After checking customer credit limit preparation of delivery of goods this is also check by the internal audit department.

Invoice: After receiving the goods they prepared invoice. The commercial invoice is a key document in international trade. In addition to playing an essential role in the commercial transaction, it has an important function as a source of information and supporting document for administrative procedures in the importing and the exporting countries.

Account receivable: After preparing the invoice the purchase company written as an account receivable. On the due date they give them check or money.

Check or money: On the due date the buying company gives check or money.

Post-audit: In post-audit the internal audit sometimes check the final report which is prepared by external audit. This report presented to the board of directors. On the behalf of this report banks give loans easily.

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Ittehad Chemical Limited

Zain Nawaz

Production Department: Production is the functional area responsible for turning inputs into finished outputs through a series of production processes. The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. He or she must make sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable. The function of the production department is to produce our products on time, to the required quality levels, at the defined product cost. Of major concern to the production manager is monthly output. In both EEL and DUL production managers have monthly targets which they are expected to strive to meet or exceed. Note that Production can only meet its targets if Sales secure orders. Also production costs are dependent on the price we pay for components and materials, etc. Securing sales is outside the direct control of Production, but the relationship between Production & Sales is intense. If sales are down, production targets cannot be met, on the other hand if Production fails to meet its target output monthly income is down and customers are likely to complain about late delivery. There is scope for friction between sales and production personnel. Component and materials procurement is another factor that strongly influences production, production targets and delivery. If components cannot be purchased at the target price, profits are down. If components arrive late at our factory production targets may not be met and customers may experience late delivery. Purchasing of components and materials is carried out by the Purchasing section of Production. We shall say more about Purchasing later in this unit. We may consider the relationship between Production, Sales and Purchasing as some form of eternal triangle. The relationship between R&D and Production is also very important: if R&D are late in developing a new product the loss in income to our company may be severe. If this occurs it may not be possible to meet production targets for extended periods. We shall now consider the interaction between R&D and Production in more detail. Knowledge of these interactions should assist our newly appointed managers.

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Zain Nawaz

Interaction between R&D and Production: The principal interaction between R&D and Production in EEL is the exchange of information. R&D provides the following information to Production:•

Product manufacturing information

•

Product parts list

•

Work instructions

•

Product test schedule

•

Product quality plan

The product quality plan is covered in the unit on Quality. Production provides R&D with information about our manufacturing capability. For example what size of components our surface mount machine can handle, what type of automated soldering capability we have, what type of production test equipment we have.

Ittehad Chemical’s Products: •

Caustic Soda (Liquid / Solid / Flakes)

•

Sodium Hypochlorite

•

Liquid Chlorine

•

Hydrochloric Acid

•

Shaffaf (Bleaching Earth)

•

CP (Chlorinated Paraffin)

•

Zinc Sulphate

•

Barium Sulphate

Caustic Soda also known as Sodium Hydroxide forms a strong alkaline solution when dissolved in water. ICL produces Caustic Soda in the form of flakes, solid, liquid (31% and 50% concentration). In solid form, it is hygroscopic and as such readily absorbs water from the air. Hence, it is stored in airtight containers.

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Caustic Soda is used in a wide variety of industrial applications. It is used as a reactant in the manufacture of other sodium components, having its use as a household Bleach and Disinfectant and Sodium Phenol ate, required for making antiseptics and for the manufacturing of Aspirin. It is used in the manufacturing process of Soaps and Surfactants used in soap powders and also in the Textile Industry to remove containments. As bleach, it is used in the treatment of scoured cloth and to improve luster and dye absorption. Caustic Soda Liquid (31% and 50% conc.) Caustic Soda Liquid is manufactured commercially by the electrolysis of brine in electrolytic cells, where 31% membrane grade and 50% Rayon grade Caustic Soda liquid is produced. Caustic Soda (Solid / Flakes). It is produced by evaporation of liquid Caustic Soda solution to the anhydrous state, and subsequent conversion to either a Solid or a Flakes form.

Quality Control & Ware House Department: Quality control is the basic organizational objective of ICL. Quality check is made from zero level to final products. Quality control is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects: 1. Elements such as controls, job management, defined and well managed processes[1][2], performance and integrity criteria, and identification of records 2. Competence, such as knowledge, skills, experience, and qualifications 3. Soft elements, such as personnel integrity, confidence, organizational culture, motivation, team spirit, and quality relationships. The quality of the outputs is at risk if any of these three aspects is deficient in any way. Quality control emphasizes testing of products to uncover defects, and reporting to management who make the decision to allow or deny the release, whereas quality

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assurance attempts to improve and stabilize production, and associated processes, to avoid, or at least minimize, issues that led to the defects in the first place.

Purchase Department: Purchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise. Though there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations. Typically the word “purchasing” is not used interchangeably with the word “procurement”, since procurement typically includes Expediting, Supplier Quality, and Traffic and Logistics (T&L) in addition to Purchasing. Purchasing managers/directors, and procurement managers/directors guide the organization’s acquisition procedures and standards. Most organizations use a threeway check as the foundation of their purchasing programs. This involves three departments in the organization completing separate parts of the acquisition process. The three departments do not all report to the same senior manager to prevent unethical practices and lend credibility to the process. These departments can be purchasing, receiving; and accounts payable or engineering, purchasing and accounts payable; or a plant manager, purchasing and accounts payable. Combinations can vary significantly, but a purchasing department and accounts payable are usually two of the three departments involved. When the receiving department is not involved, it's typically called a two-way check or two-way purchase order. In this situation, the purchasing department issues the purchase order receipt not required. When an invoice arrives against the order, the accounts payable department will then go directly to the requestor of the purchase order to verify that the goods or services were received. This is typically what is done for goods and services that will bypass the receiving department. A few examples are software delivered electronically, NRE work (non reoccurring engineering services), consulting hours, etc...

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Ittehad Chemical Limited

Zain Nawaz

Historically, the purchasing department issued Purchase Orders for supplies, services, equipment, and raw materials. Then, in an effort to decrease the administrative costs associated with the repetitive ordering of basic consumable items, "Blanket" or "Master" Agreements were put into place. These types of agreements typically have a longer duration and increased scope to maximize the Quantities of Scale concept. When additional supplies are required, a simple release would be issued to the supplier to provide the goods or services.

Purchasing Cards: Another method of decreasing administrative costs associated with repetitive contracts for common material is the use of company credit cards, also known as "Purchasing Cards" or simply "P-Cards". P-card programs vary, but all of them have internal checks and audits to ensure appropriate use. Purchasing managers realized once contracts for the low dollar value consumables are in place, procurement can take a smaller role in the operation and use of the contracts. There is still oversight in the forms of audits and monthly statement reviews, but most of their time is now available to negotiate major purchases and setting up of other long term contracts. These contracts are typically renewable annually.

Tactical purchasing: This trend away from the daily procurement function (tactical purchasing) resulted in several changes in the industry. The first was the reduction of personnel. Purchasing departments were now smaller. There was no need for the army of clerks processing orders for individual parts as in the past. Another change was the focus on negotiating contracts and procurement of large capital equipment. Both of these functions permitted purchasing departments to make the biggest financial contribution to the organization. A new terms and job title emerged – Strategic sourcing and Sourcing Managers. These professionals not only focused on the bidding process and negotiating with suppliers, but the entire supply function. In these roles they were able to add value and maximize

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

savings for organizations. This value was manifested in lower inventories, less personnel, and getting the end product to the organization’s consumer quicker. Purchasing manager’s success in these roles resulted in new assignments outside to the traditional purchasing function – logistics, materials management, distribution, and warehousing. More and more purchasing managers were becoming Supply Chain Managers handling additional functions of their organizations operation. Purchasing managers were not the only ones to become Supply Chain Managers. Logistic managers, material managers, distribution managers, etc all rose the broader function and some had responsibility for the purchasing functions now.

Marketing Department: Marketing involves a range of processes concerned with finding out what consumers want, and then providing it for them. This involves four key elements, which are referred to as the 4P's (the marketing mix). A useful starting point therefore is to carry out market research to find out about customer requirements in relation to the 4Ps.

Market research: There are two main types of market research:

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Quantitative research involves collecting a lot of information by using techniques such as questionnaires and other forms of survey.

Qualitative research involves working with smaller samples of consumers, often asking them to discuss products and services while researchers take notes about what they have to say. The marketing department will usually combine both forms of research. The marketing department will seek to make sure that the company has a marketing focus in everything that it does. It will work very closely with production to make sure that new and existing product development is tied in closely with the needs and expectations of customers. Modern market focused organizations will seek to find out what their customers want. For example, chemical’s organizations will want to find out about what sort of chemical’s customers want to purchase and the standard of product they expect to get.

Finance Department: Finance is the heart of a business. Its functioning efficiently directly affects the rise and fall of a business. It is the source on which the entire edifice of a business rests. No finance - no business. Source it from anywhere before conceiving any business idea, its scale, its strategic budget, scope of expansion/ staying in the business. Finance department must control accounting system effectively and keep proving essential information to higher management about break even analysis, financial information over a particular period, interpretation of the ' financial' to enable the non-finance management team also follow it. It is the finance department which advices the management what share of the profit may be put in investment portfolio for acquisition, expansion, maintenance of the 'fixed capital', repayment of interest on borrowed capital, dividend to be paid to share holders,

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

payment of salary and wages, bonus, other facilities, benefits to be passed on to the consumers. The finance department is one of the most important departments in a business, as it helps provide the financing and accounting information necessary to make various decisions. However, this department has a role that encompasses a number of duties.

Bookkeeping The finance department is responsible for keeping track of all sales and capital spending at a business.

Profit and Loss Another responsibility of the finance department is to provide management with a profit-and-loss statement that will show the overall strengths or weaknesses of a business.

Update Managers Managers need the most current information to make the best decisions for their departments. The finance department has a duty to provide them with the most accurate and timely information possible. This would include information such as costs to produce a product.

Financing The finance department plays an integral role in helping the business receive the necessary financing it needs, how the money will be paid back and distributing dividends to shareholders.

Functions: 1. Administration of Public Revenue.

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

2. Assets and Liabilities Committees. 3. Audit of receipt and expenditure. 4. Banking 5. Communication of financial sanctions. 6. Creation of new posts and examination of schemes of new expenditure. 7. Examination of all proposals for the increase or reduction of taxes. 8. Floatation and Administration of Provincial Loans. 9. Framing of financial rules for guidance of Government Departments. 10. Supervision of maintenance of Provincial and District Accounts. 11. Local Fund Audit Department. 12. Management of Public Funds 13. Public Accounts and Public Accounts Committee 14. Public Debt. 15. Report of Auditor General. 16. Service matters, except those entrusted to the Services, General Administration and Co-ordination Department. 17. Treasuries and Sub-Treasuries.

Accounts Department: The Accounts Department looks after the financial matters. Accounts department for both power and appliances division have similar functions as below unction’s This particular department has the responsibility to prepare and keep an upto date record of following: •

Financial keep of daily, including the income statement and balance sheet.

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Book keeping of daily monetary transactions.

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Production maintenance reports

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Cost data on labor, materials and overheads.

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Remittances and loans

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited •

Expense reimbursement

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Tax statement

Zain Nawaz

Financial deals with the banks, leasing companies, Moradabad companies, DFIs and other government agencies through Finance Center. The finance department maintains record of all its expenses through vouchers. Generally the following types of vouchers are used for this purpose. •

Cash payment vouchers for cash transactions recording.

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Purchase vouchers

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Bank payment vouchers

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Journal vouchers for general expenses

SWOT analysis: SWOT analysis is a strategic planning method used to evaluate the strengths, weakness, opportunities and threats involved in a project or business venture. It involves the specifying the objectives of business ventures or projects and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. This technique is credited to Albert Humphrey who led a convention at Stanford University in the 1960s and 1670s using data from Fortune 500 companies. •

Strengths: attributes of the person or company that is helpful to achieving the objective(s).

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Weaknesses: attributes of the person or company that is harmful to achieving the objective(s)

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Opportunities: External conditions that is helpful to achieving the objective(s).

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Threats: external conditions which could do damage to the objective(s).

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

STRENGTHS: •

Ittehad Chemicals has large numbers of competent workers that are working under good conditions these are near about 4000 employees 40 of them are permanent and others are at daily wages or contract basis.

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It has two chemical plants in Lahore one is manufacturing chemicals and second is manufacturing products from these chemicals and it also uses the waste on one plant in second as a raw material.

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It has a large product length as capered to its competitors in Pakistan as well as in Asia.

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It uses modern technology to manufacture chemicals.

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It is the king of chemicals manufacturing industry.

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It also has its own carriage container to distribute the chemicals in all over the Pakistan.

WEAKNESS: •

The company has a labor union that consists of many top level supervisors to deal the problems of the workers in the company but this union is very harmful for the company that many times it happens the union leader black mail the top management with the power of workers as strike and etc...

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Company has its own energy source (power generation) but it is not enough for the company to maintain its power in this period as there is lack of electricity in Pakistan.

OPERTUNITIES: •

There are no big competitors of Ittehad Chemicals Limited in the market expect Sitara Chemicals Pvt. Limited. But Sitara Chemicals does not have a large

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

product length and line that it can compete the Ittehad Chemicals Ltd. It is big opportunity for ICL that it has competitive edge over its competitor.

THERATS: •

In this modern period Ittehad chemicals Limited also facing many problem from the pressure groups.

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The most growing competitor of Ittehad Chemicals Limited is Sitra Chemicals that is increasing its product line and length towards the ICL and SCPL manufacturing the same product and selling them to their customers that are diversifying from ICL to SCPL.

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Conclusion: It is a very informative and worth learning internship at the Ittehad Chemicals. What I learnt in my institute, this industry gave me a chance to see its practical applications. I have learnt a lot of things and this report is a slight expression of it.

I am very thankful to the administration, Human resource manager, personnel Depty manager and the internal audit trainees for entertaining me and giving me full details about the department work going on there. Due to their guidance I am able to make this report.

Ittehad Chemical is a very vast industry having a large department assembly. I have spent four weeks there, one week on one site. I have studied three departments of industry Human Resource department, Personnel department and Internal Audit department.

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

Glossary: ICL: Ittehad Chemical Limited HR: Human Resource department QC: Quality Control 4P's: the marketing mix P-Cards: Purchase Cards NRE work: Non reoccurring engineering services T&L: Traffic and Logistics R&D: Research and development department DUL: Dial-up User List. EOBI: Employees Old-Age Benefits Institute

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COMSATS Institute Of Information Technology

Ittehad Chemical Limited

Zain Nawaz

References: http://www.businessdictionary.com/definition/sales-order.html http://scclmines.com/perssonel_home.asp http://labspace.open.ac.uk/mod/resource/view.php?id=360986 en.wikipedia.org/wiki/Quality control http://www.thetimes100.co.uk/theory/theory--aims-marketing-department--181.php http://www.ehow.com/facts_5683333_role-finance-department-play-business_.html http://www.fdsindh.gov.pk/site/cms.php?page=functions en.wikipedia.org/wiki/Purchasing http://www.scribd.com/doc/28072266/Ittehad-Chemicals-Limited-SWOT-Analysis

Information Taken from persons: Depty manager of Personnel department: Mr. Malik Mohammad Ashraf and Officer Fuzal Abass. Human Resource Manager of HR department: Asmat Nawaz Khattak. Trainee of Internal Audit department: Mr. Farooq anjum, Mr. Khazir and Mr. Jahangeer.

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COMSATS Institute Of Information Technology