Industrial Visit

FORE SCHOOL OF MANAGEMENT

A Report on

Industrial Visit to PARLE and RELAXO

Date Of visit : 11th Oct. 2010

Submitted By Hiralal Senapati 191087 FMG-19-B

The company began as a small enterprise in the year 1976 and was officially incorporated in 1984 and further went into public listing in 1995. According to the 2008 Business Survey, it has now emerged as the second largest footwear producer in India. Relaxo Footwear commenced its journey with the manufacture of Hawaii slippers. It has now grown into a large-scale entrepreneurship catering to the basic needs of the quintessential Indian citizen. From a modest sale figure of Rs. 1 million in 1977 to more than Rs. 5000 million last year; the company has experienced a record-breaking growth since inception. Today, the company manufactures over 3 lakh pairs of footwear per day, which approximately adds up to over 10 million pairs per year. Each pair is given thorough attention by the dedicated and skilled employees working at the 10 state-of-theart manufacturing units in Northern India. Thus, it is no small wonder that the annual turnover has multiplied 2.4 times in the last 3 years from Rs. 305 crore in 2007-08 to a whopping Rs. 550 crore in 2009-10. What’s more, with over 30 years of experience and 100 million satisfied customers, Relaxo keenly looks forward to achieving an estimated annual turnover of Rs. 1000 crore by the year 2012.

Operations The factory works for 16 hours a day, 6 days a week. The entire production is divided into shifts of 8 hours. It is a having a mixed type of layout. All the production process is done in the ground floor. Cutting, finishing, fixing the parts, printing, packing, labeling etc is done in the first and second floors. Relaxo makes the “Flite” brand in this facility, wherein the production is done using the EVA injector technique which is of one of its

2

kind in manufacturing footwear in India. They use Ethyl Vinyl Acetate (EVA) and Poly Vinyl Chloride (PVC) for making the slippers. There are around 20 odd injectors on floor and each doing 60-70 injections in 12 hours. Floors have clear demarcations for workers to have uninterrupted work. They use both manual operated and pneumatic machines for the fixing purposes. As far as the design part is considered, they come up with new designs in every month which helps them to keep pace in market with the competitors. They gives more importance to product design and development.

Marketing Rural market is the main focus of the Relaxo Footwear as rural India accounts for 70% of population. Thus the product is relatively cheaper. With launch of Sparx brand Relaxo is now targeting the urban markets with fancy looking sandals etc. They have 150 own retail stores scattered across the nation. Products of various designs are available in Relaxo. Now they are targeting the North India mainly, even though a portion of sales comes from all parts of the country. In future, they are planning to expand their business mainly to all parts.

Human resources A total of 850 workers are there in Relaxo, working for 16 hours a day, 6 days in a week. The workers are trained and skilled in what they do (specifically the testing team department), as most of work is done manually except for injection process. The management is not so stringent towards the employees which give them stress free environment for working. They are also provided with canteen facilities.

Financial Management The management has experts to do with the finance aspects of the company. Since the raw materials needs to be procured 6 months in advance, the forecast on the cost must be properly done for the cost calculation. They do well in thos thing by the experience they acquired in years. The turnover for the last financial year touched the mark of 550 crores.

Recommendation

3

Being a rubber and chemical user, steps must be taken regarding eco friendly environment. Processing gases should be converted to harmless forms to make pollution less severe.

In 1929, a small company by the name of Parle products emerged in British dominated India. The intent was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. The company knew that it wouldn’t be an easy task, but they decided to take the brave step. A small factory was set up in the suburbs of Mumbai, to manufacture sweets and toffees. A decade later it was upgraded to manufacture biscuits as well. Since then, the Parle name has grown in all directions, won international fame and has been sweetening people's lives all over India and abroad. Apart from the factories in Mumbai and Bangalore Parle also have factories in Bahadurgarh in Haryana and Neemrana in Rajasthan, which are the largest biscuit and confectionery plants in the country. Additionally, Parle Products also has 7 manufacturing units and 51 manufacturing units on contract. Parle Products has been India's largest manufacturer of biscuits and confectionery, for almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands, the Parle name symbolizes quality, nutrition and great taste. With a reach spanning even the remotest villages of India, the company has definitely come a very long way since its inception.

Products Parle produces more than 32 prodcts in its plants. It deals in biscuit goodies, sweets and snacks segment. Biscuit goodies

4

•

PARLE G

•

Krackjack

•

Magix

•

KREAMS

•

PARLE 20-20 COOKIES

•

NIMKIN

•

Hide & Seek Bourbon

•

Chox

•

Hide and Seek

•

Hide & Seek Milano

•

Parle Marie

•

Milk Shakti

•

Digestive Marie

•

Golden Arcs

•

Monaco Jeera

•

Kreams Gold

PARLE FACTORY - BAHADURGARH This Parle industry makes three main types of its products namely Parle-G biscuits, Monaco Biscuits and Krack-Jack biscuit. The oven present in this site is the largest oven in Asia and also the whole length of the manufacturing unit is also the longest which is around 300 feet.

Operations Making biscuits consists of raw materials testing and mixing it, then molding and the baking and finally cooking and then packaging follows the last. The workers are to wear

5

separate clothes and often applied on anti bacterial spray. This site produces nearly 175 tonnes of products everyday and around 1.5 to 2 % of wastes can be encountered. For making candies, glucose and water are mixed first in the required amount of proportion and then filtered. They are then cooked and then processed in the forming state. Then sorting is done and wrapping of the candies are done which is finally followed by the packaging of the items. Except for the production of Monaco, all the others are fully automated. Packaging has been done carefully here in the Bahadurgarh site.

Steps involved in biscuit making Raw material testing

Mixing

Molding

Baking

Cooling

Packaging

6

Steps involved in toffee making

Milk

Syrup

EdibleOil

Toffee cooker

Cooling

Pulling jar

Wrapping

7

Steps involved in candy making process Sugar

Liquid glucose

Water

Steam

Dissolver

Filter Press

Candy cooking machine

Blending

Kneading

Forming

8

Sorting

Throughout India, Parle has 90 Depots through which their products pass through. These Wraping are directly owned by the company. After that, they have around 10,000 distributors which are not owned by the company but have been working for Parle since many years. They also have a very aggressive supply chain management system. The product lines are very high and the brand equity it has is also high. Plus Parle used to be a monopoly in terms of biscuits years ago.

Marketing The company itself does speak of the imitators that are making biscuits and other forms to imitate the products of the Parle Products. As a market leader, Parle cannot go on and find the culprits. Instead they are more concerned about making newer and better products. They are mainly targeting the rural markets. Demand for their product is increasing day by day giving a challenge to their production capabilities.

Human Resources Parle family consists of all the employees and owners and treated each and everyone as their own family members. Job is more secured here in Parle. It’s the leading FMGC product manufacturer. Parle has a very long time relationship with the suppliers. They even have sugar mill in a certain part in Haryana. They have strong CSR activities. Recently, they have established schools and colleges in Delhi and Haryana. Also, they have provided pre-lunch for the school kids in Haryana.

Financial management Being a large profit making company, Parle has a strong surplus fund reserve with it. It could be used for further expansion when they needed. One interesting point worthy to be mentioned about Parle products is that despite the economic slowdown and price rise, the

9

prices of Parle products have never risen as such. This is whole due to its concentration on productivity. Increase in automation and waste management that brought down wastes percentages from 8 to around 2 % also helps in maintaining price level. And finally, cost cutting through proper hiring which is enabled by a good HR team also helps in maintaining prices of Parle. Parle Products, which makes the ubiquitous ‘Parle-G' glucose biscuits, had attained volume leadership in the market. Now, with a total turnover of around Rs 4,000 crore coming from biscuits, Parle Products has emerged as the clear market leader, with a difference of almost Rs 1,000 crore.

Recommendations It will be more beneficiary for Parle if they come to the business of cool drinks and other beverages. They have their brand value as their main advantage, which can be utilized by introducing new products.

10

11