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TOTAL QUALITY MANAGEMENT
FINAL PROJECT
SUBMITTED TO:
DR.NAWAR KHAN
SUBMITTED BY:
SAADAT ULLAH (01-120092-050)OMER SALIM TIPU
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DEDICATION
Dedicated to our beloved parents and to all those,whose prayers always pave the way to success for us.
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ACKNOWLEDGEMENTFirst of all we would like to thanks a millions to Almighty ALLAH, whose
blessing endowed us to complete this project timely and successfully. We
would also like to pay tribute to the Holy Prophet Muhammad S.A.W
(Peace be upon him), whose life is perfect model for whole humanity. We
owe this success to our parents, who are real source of encouragement
forever.
Thanks to Almighty Allah for giving us knowledge, power and strength to
accomplish this task. We learned a lot while doing this project and this
will certainly help us in our forth coming life. Many friends of us helped
us during this project but we are really thankful to the help and support
of Dr. Nawar khan from the Institute of management sciences, who
helped us in all the phases of this project. His supervision helped us a lot
during the times of difficulties. In the end we would like to thank all of
our friends for their support and encouragement.
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THE GROUP IN BRIEF
The ICI Group is one of the largest specialty products, coatings and
materials companies. ICI has over 50,000 products more than 200
manufacturing sites and offices in over 55 countries; some 59,000 employees
worldwide. ICI has leading international positions in industrial adhesives,
specialty starches, electronic and engineering materials, fragrances, flavors,
food ingredients, specialty agrochemicals, catalysts, synthetic lubricant base
stocks and formulations, personal care ingredients, paints, acrylics,
polyurethane chemical and systems based on MDI (diphenylmethane
diisocyanate), ozone benign refrigerants and titanium dioxide pigments.
STRUCTURE
ICI BOARD
The ICI Board consists of the Chairman, five Executive Directors and five
Non-executive Directors. The Board is responsible for determining the
direction and board policies of the Group consistent with the objective of
being the industry leader in creating value for customers and shareholders.
EXECUTIVE MANAGEMENT TEAM
The management of ICI is through an Executive Management team headed
by the Chief Executive and comprising the Vice Chairman, Chief Operating
Officer, Chief Financial Officer, five Executive Vice Presidents, the Senior
Vice President of Human Resources and the General Counsel.
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INTERNATIONAL BUSINESS
An Executive Vice President or a Chief Executive Officer heads ICIs
International Businesses. Each is responsible for the financial performanceof their business under the strategic general guidance of the Executive
Management Team.
VISION
Today's ICI is about winning - winning to achieve the vision of becoming
the industry leader in creating value for customers and shareholders and to
become the most admired specialty products, paints and materials company
in the world.
ICI aims to achieve this through:
Market-driven innovation in products and services.Winning in quality growth markets worldwide ICI will invest in growth markets in which it has leading market
positions.
ICI's aim is to have all its businesses in such positions and it will do thisby concentrating efforts on the best quality opportunities around the
globe.
Inspiration and reward of talented peopleICI is determined to create a way of working that releases the energy and
talents of everyone in the Group.
Exemplary performance in safety and health.ICI's goal is to have an exemplary performance in safety and health and
become the world leader.
Responsible care for the environment. Relentless pursuit of operational
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excellence
HISTORYICI was formed on December 7, 1926, by the merger of four of the largest
chemical companies in the UK. Its purpose was to create a British company
capable of competing in world markets with large corporations in America
and in Germany. The four companies merged were Brunner, Mond &
Company Limited, Nobel Industries Limited, British Dyestuffs Corporation
Limited and United Alkali Company Limited.
The plan for the new company was agreed on board the Cunard Line vessel,
Aquitania, on a voyage from New York to Southampton. The architects of
the merger were Sir Harry McGowan, Chief Executive of Nobel Industries,
and Sir Alfred Mond, later Lord Melchett, the Chairman of Brunner, Mond
& Company, who became the first ICI Chairman.
With 33,000 employees, ICI's main products included chemicals, explosives
and accessories, fertilizers, insecticides, dyestuffs, domestic chemicals,
leather cloth, printing, sporting ammunition and paints. In its first year of
business, ICI sold GBP 27 million worth of these products and made a pre-
tax profit of GBP 4.5 million.
Throughout its history, ICI has been at the forefront of scientific discovery
and developing inventions for the marketplace with products such as
fertilizers, plastics, manmade fibres, anaesthetics, heart drugs, herbicides,
pesticides, commercial explosives, waterborne paints, reactive dyes and
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biodegradable plastics.
In 1993, ICI demerged its bioscience businesses of pharmaceuticals,agrochemicals, specialities, seeds and biological products into a separate,
publicly listed company, Zeneca Group PLC.
ICI has always emphasized research and innovation and is continually
engaged in development programs. The Group relies on 4,000 research,
technology and engineering specialists to maintain a strong technical base
and ensure competitive advantage through the development of new or
improved products and processes.
The ICI Group today is one of the largest chemical companies in the world,
with international strengths in the areas of paints, materials, explosives and
industrial chemicals. ICI operates its main businesses on an international
basis. In addition, regional businesses located in Pakistan, India, Argentina
etc. reinforce the Group's worldwide competitive strengths.
ICI IN PAKISTAN
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ICI in Pakistan, a leader in industrial chemicals and paints, manufactures and
sells a diversified range of products. The Company's vision is to be the
industry leader in creating value for customers, shareholders, suppliers andemployees.
ICI in Pakistan has played an active role in the Country's industrial
development and progress, for well over half a century, and continues to do
so, with investment in the future.
OUR
BUSINESSES?
AGROCHEMICAL
&
SEEDS
PAINTS
POLYESTER
SODAASH
PHARMACEUTICALS
CHEMICALSPURE
TEREPHTHALIC
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ICI Pakistan Limited's predecessors have been operating in the country well
before independence. Its first manufacturing plant for Soda Ash in Khewra
was established over fifty years ago. Since then, it has progressively movedto produce a diversified range of products including decorative, refinish and
industrial paints, polyester fibre, sodium bicarbonate, agrochemicals,
specialty chemicals and pure terephthalic acid. The Company also markets
toll manufactured, pharmaceuticals and animal health products, in addition
to a range of imported industrial chemicals and seeds.
In June 1998 ICI Pakistan's latest investment in a USD 490 m plant to
annually produce 400,000 tonnes of Pure Terephthalic Acid (PTA) was
commissioned. This is ICI Pakistan's largest single investment to-date. With
annual sales of over Rs 11 billion in 1998 and a sustained record of financial
viability, the Company continues to add value for its shareholders.
ICI in Pakistan is investing in the future, in order to respond to and meet
the challenges of the coming century. By developing an ability to compete
internationally, focusing sharply on customer needs and having a culture of
continuous improvement, ICI Pakistan plans to achieve its vision of
enhancing value for the shareholders and the customers, also meet the
challenging targets it has set for the Company's safety, health and
environmental performance by the year 2000.
Mission Statement
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The ICI paints team intends to remain market leaders in the Paints
Business.We wish to be recognized for offering the best products & excellent
customer services. We will run a high quality, profitable and growth oriented
business in an exciting and safe environment.
Introduction of Paint Industry
Paint
A chemical oriented liquid used to protect and decorate different kind of
surfaces
Paint industry is divided into sectors:
1. Organized Sector
2. Mushroom Sector
Organized Sector
It includes the companies listed in Stock Exchange or the firms registered,
having planned promotional activities with relatively high prices. They fall
under the capacity tax system and distribute in more the one province.
Mushroom Sector
It includes the unregistered firms, having city based distribution with
seasonal brands, having lower prices with no planned promotional activities.
They fall under fixed tax system.
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Companies listed in stock exchange are:
ICI Dulux
Berger Paints Pakistan Ltd. Buxly Pains Kausar Paints.
Competitors of ICI
Berger Master paints Mushroom industry Baxley paints
ICI DULUX------ THE MARKET LEADERS
ICI Dulux is the market leader not only w.r.t the quality but also with
respect to turnover. ICI has an edge over it competitors due to its
diversified fields. It is known throughout the world and has good name in
other sectors as well, which has given the advantage to Dulux in paints.
As far as the government is concerned, ICI Dulux is paying all its taxes
properly and so it is not being bothered different government policies.
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PRODUCTION
Product Lines
ICI has diversified product lines like:
Paints Polyester Staple fiber Soda ash Specialty chemicals Medicines
Market share of different Product line in Pakistan:
Paints 70%
Soda ash 80%
Polyester 25%
Medicines 45%
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Product range (Paints Business)
ICI Dulux is producing both WATER BASED paints as well as OIL
BASED paints.
Water Base Paints
Dulux Pentalite Special Plastic Emulsion (Washable, for masonrysurfacestone structure)
Dulux Pentalite Natural Whites (for sensitive people from smell,washable with smooth and durable finish
Dulux Weather Shield (protective paints against extreme weather) Paintex Plus Emulsion ( for price sensitive people) Maxilite (Economical , quality distemper)
Solvent Base Paints
Dulux systhetic Enamel (for wood & metal surfaces) Dulux Pearl Glo (for all surface) Dulux Prime ON (perfect base for emulsion coating) Dulux Red Oxide And Zinc Primer ( to protect metal rust) Dulux Water Repellent (prevents from water and fungal attacks) Dulux Aluminum (for resisting high heat)
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Production Process (Paints)
Dispersion Section
In this stage raw materials (Pigment, Resin & Solvent additives) are issued
from the material control department to production department according
to the requirement. In production department raw material are first sent todispersion section where Wall Mixer Machine is used to mix all the
ingredients. Once the ingredients are mixed then they are sent to various
Grinding Mill Base Machines (Sand Mill, Basket Mill, Bead Mill). These
mills process and grind ingredients for smoothness and dispersion. Here
the Gage plate (0-50 microns) is used to check to smoothness/dispersion. In
this section mixture is thicker.
Mixing Section
In this section, adding more Resin & Solvent, Additives does further mixing
process to reduce thickness of the mixture. Resin is added to increase the
quality, volume and for further smoothness. Other chemicals are also used
to kill the germs and to create fragrance.
Color Match & Quality Control Section
In this section, special chemicals called Tinters are to add color to the
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mixture according the requirement of customers. After adding the color
then the quality is checked in the Quality control laboratory where the
followings things are checked:
ColorViscosity (thickness)Weight per liter Glass (shinning) Drying
In color checking, the company has set predetermined color standards
(according to the customer demand) and stable product color is matched
according to the standards. If there is variation then more or less tinters are
used to make it according to the standards.
Filling Section
After matching the colors, the finished product is sent to the Filling Section
where Fix Mixers are used to fill the tins/containers according to their
capacity. Ink Jet Machine is used to print the manufacturing date, expiry
date, product price, sales tax, color, quantity/volume and product codes.
After filling the containers, weight is measured on the computerized scale.
Now the paints are filled in plastic containers for the customer benefits.
LOCATION
The location of businesss facilities has a significant impact on companys
operating cost, the price it charges, and its ability to compete in the market.
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ICI started operation in Pakistan 1964, its manufacturing plant for paints
Business situated at 346 Ferozepur Road, Lahore.
Corporate offices
Lahore Islamabad Peshawar Hyderabad Faisalabad Multan
Regional Offices
Rahim Yar KhanVehari Quotta Sahiwal Gujranwala
Warehouses
Karachi Multan Hydraabad Islamabad
FACTORS AFFECTING LOCATION SELECTION
Following are a few of the factors that can affect the decision of location
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selection:
Proximity to markets.
State & local Government policies. Labor cost. Labor availability. Utilities, taxes & real estate costs.Transport available. Quality of life. Community attitude. Expansion potential etc.
Capacity
It is the maximum rate of output for a facility that even achieved.
NO. OF PLANT AND THEIR CAPACITY
ICI has one plant for paints manufacturing located at Lahore. The total
capacity of this plant is 18 million liters per year
UTILIZATION
Maximum Total capacity = 18 million liters per year
Actual production = 14 million liters per year
Normally they are using two shifts per day.
Utilization ( %) = actual capacity/max capacity = 77.77%
Capacity cushion= 100%-77.77% = 22.23%
FORECASTING
It is a prediction of future events used for planning purposes. ICI uses
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following approaches in forecasting.
APPROACHES TOWARDS FORECASTINGForecasting is a function of demand, and three approaches are normally
available for making the forecast of future demand as:
(A)QUALITATIVE APPROACH
This approach incorporates important factors like decision makers
emotions, experience, judgment, etc.
It includes:
Executive opinion Sales force forecast Consumer market survey
(B)QUALITATIVE APPROACH
This approach employs a variety of mathematical models that use historical
data to make a demand forecast but ICI uses average method on the basis of
historical data.
Demand Pattern
ICI Paints have a seasonal demand pattern. They have a greater demand in
peak periods like September, October , November, February and March due
to Eid and marriage occasions. But they have demand is less in rainy
seasons.
INVENTORY & MATERIAL MANAGEMENT
Material management is concerned with following tasks
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Inventory control at stores etc. Supplier selection
Issuing purchase releasesWork force schedules Inbound transportation & Outbound transportation Inventory control at distribution center
Inventory level determination and inventory management is the crucial
events for any organization. Determination of inventory level depends on
the future demand.
USES OF INVENTORY
Inventory is used to
Provide the stock of goods to meet anticipated demand De-couple production from distributionTake advantage of quantity discounts Hedge against inflation Protect against shortage Permit operations to continue
TYPES OF INVENTORY
Following are the types of inventory that might be found in any
organization
Raw material inventoryWork-in-process inventory Finished goods inventory
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INVENTORY MANAGEMENT AT ICI
Management at ICI carries out the basic functions of inventory management
in a sophisticated way. Basically, ICI gives close focus to the inventoryfunctions like purchasing and distribution.
ICIS RAW MATERIAL INVENTORY INCLUDES:
Pigment Resin SolventsAdditives
INVENTORY CONTROL & RECORDS AT STORES IN ICI
ICI is very concerned with inventory records and controls, which is one of
the factors contributing towards their success. Store is headed by store
supervisor or store officer. They told me that they keep record of every
type of material with their weight and quality. They have to maintain record
of ledgers manually and computerized as well. When some departments
require certain part then they issue with the permission of manager (Dept) &
record in their books.
Relationship with suppliers
ICI maintains a very cooperative relationship with their local and foreignsuppliers. They also invite their suppliers to their organization
PROCUREMENT DEPARTMENT
This department arranges for purchase of an item and when that item is to
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be purchased. Then store records it and keeps it in a specified location &
issues it to the desired department.
PROCUREMENT PROCEDURE
Production demand & monthly forecasting is considered keeping in view
lead-time & minimum stock level. ICI purchase its raw material from local
as well as from other countries. They import some items like Titanium
dioxide, which is used in paints and purchased some, items locally
Account department issues checks for payment Lead time for imported
items is 30 to 70 days. When purchased items enter the factory gate then
they are checked by gatekeepers & send to store.
DISTRIBUTION SYSTEM
The distribution system of ICI Dulux is dealer oriented. It has a wide
network of distribution throughout Pakistan but all the distribution is done
through dealers. ICI Dulux has its own warehouses and from there the
products are directly transported to the dealers who ultimately sell them to
the customers.
Therefore the Distribution Channel of all sort of paints is
ProducerDealerConsumer
Dealers
ICI has certain requirements, after these requirements are fulfilled a dealer is
registered and is legally allowed to start the distribution.
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Special accounts with Dealers Code (DC) are opened in thecomputer.
A Promissory Note is signed.
Dealers have to sign a blank cheque for security. Dealers have to submit a copy of their Identity Card (ID card) and a
few more documents.
Lahore and Karachi are advance payment markets where as Multan and a
few other small cities have a credit market.
MODE OF TRANSPORTATION
For delivery purposes, ICI uses Mazda trucks, pickups and small vans.
INVENTORY INSPECTION
At ICI, inspection of inventory is made. Actually, the purpose of inspection
is to see that whether the inventory level has reached to the level that has
been designated as reorder point. If this reorder point is reached then the
order is placed.
MATERIAL REQUIREMENT PLANNING
The basic ingredients of Material Requirement Planning are:
Master Production Schedule Bills of Material On Hand Inventory
MRP AT ICI
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As ICI is dealing with the production of standard products so it has full
knowledge about the ingredients and the quantity of ingredients requiredmaking one container.
At ICI, MRP is not done with great zeal because the company gets theforecasted demand for the whole year and the whole years demand is
segregated into monthly demand by marketing department of ICI. So, the
company gets the real information about the raw material and component
requirement so as to satisfy forecasted demand. Hence, the forecasted
demand plays a vital role in MRP at ICI.
TOTAL QUALITY MANAGEMENT AT ICI
At ICI, quality is employed in each and every step of production process
and it starts from the purchase of raw material and ends at the final product.
RAW MATERIAL CHECKING
All raw materials and their quality are checked so as to ensure that no
material with bad quality could harm the quality of finished product.
QUALITY TESTING
ICI Paints has a proper and standardized Quality Control Laboratory, which
test the quality of paints. They check opacity, density, smoothness, drying,
glass, color, life, viscosity and weight.
Employees involvement in TQM
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It is very necessary every employee should take interest in maintaining the
quality of product. ICI are taking various steps to involve their employees
in TQM by giving them training, continuous feedback, incentives andawards & by encouraging teamwork. They give annual rewards to those
employees who give more suggestions to improve quality.
ISO Certification
The ISO 9000 Standards
ISO 9000 is a set of standards governing documentation of quality program.ICI become certified in 1999 by complying the requirements of ISO 9001.
ISO 9000 actually consists of five documents:
ISO 9000-9004. ISO 9000 is an overview document, which provides
guidelines for selection and use of the other standards.
ICI & ISO 9001
ICI has got ISO 9001 in 1999 by meeting all the requirements, which are
included in this standard. ISO 9001 is a standard that focuses on 20 aspects
of a quality program for companies that design, produce, install and service
products. These aspects include:
Management responsibility Quality system documentation Purchasing Product design InspectionTraining Corrective action
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Produce Installation
Service
ICI & ISO 14001
The ISO 14001 standards require participating companies to keep track of
their raw materials use and generation, treatment, and disposal of hazardous
wastes.
ICI has got ISO 14001 in 1999, covering the areas of :
Environment management system Environmental performance evaluation Environment labeling Life cycle assessment
ICI & MRP 2 Class A
MRP stands for Manufacturing Resource Planning. It is a very complicated
and tough to get, only there 23 companies have got this certificate all over
the world in which ICI is one.
Benefits of ISO 9000 & MRP 2
Enhance the firms quality image Competitive edge Management System improvements
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Good relations with government agencies Enhance Customer satisfaction
Cost reduction Improved productivity and efficiency Increase market share Improve personal job satisfaction and moraleWon more agreements/contracts
SWOT ANALYSIS
Strengths
Having a professional management Friendly and cooperative working environmentTechnical know how & well qualified staff Back selling team, focused directly at consumers, give a way to
communicate directly with consumers.
Brand loyal customers. Excellent financial resources.Well established research and development
Weaknesses
Decision-making on collective basis leads to late decisions.A bureaucratic way of goal setting
Opportunities
Entering into a new market or segment. New governmental and industrial projects. Innovations.
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Threats
Invisible trade barriers. Mushroom industries Strict government policies