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Selected Company:
Final Project:
Process Analysis & Design
Submitted to: Mr. Tahir Aziz KhanSubmitted by: Awais Ahmad CIIT/FA09-MBA-027/LHR
M. Adeel Khan CIIT/FA09-MBA-069/LHRSabahat Abid CIIT/FA09-MBA-130/LHRNajm-ul-HasanCIIT/FA09-MBA-112/LHRGhulam Asghar
CIIT/FA09-MBA-039/LHRSubmitted on: December 31st, 2010
INTERWOOD MOBEL (PVT) LTD
COMSATS Institute of Information TechnologyDefense Road, Off Raiwind Road, Lahoe.
Process Analysis and Design
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INTERWOOD MOBEL (PVT) LTD
Preface
The project named Process Analysis and Design for Interwood Mobel (PVT) LTD is
one of the projects worked on by the members of Syndicators (a study group of COMSATS Institute of Information Technology consisting of 5 members named Muhammad Adeel Khan,
Awais Ahmad, Sabahat Abid, Najm-ul-Hassan and Ghulam Asghar) and includes the physical
visit of the company. After visiting the company, the group analyses the production process
adopted by the company and identifies the non-value added steps in production process. It also
identifies the problems arising during the production and presents some suggestions,
recommendations and advices to the firm. For this purpose, the group members together make
a project report. A copy of this project report is also submitted to the company itself. This project
is also submitted to the instructor Mr. Tahir Aziz Khan and is presented in the class for better
know-how of people about the production process. At the end it includes all of the supporting
data i.e. charts, graphs tables and pictures etc. attached with the project report.
The references and evidences collected are also included in the report and all necessary
information, gathered regarding the persons the group meets. This project is very useful for the
students of MBA, and we hope, with this project report, people will get more knowledge and
learning about how the production is done in a firm.
Awais Ahmad
M. Adeel Khan
Sabahat Abid
Najm-ul-Hasan
Ghulam Asghar
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AcknowledgementsWith the blessings of Allah, we are able to present this report to Interwood Mobel PVT
LTD and COMSATS Institute of Information Technology. We wish to acknowledge our
parents and our teachers especially our instructor Mr. Tahir Aziz Khan for giving us such an
important project and for his efforts with us to complete our project by discussing with us our
Project Outline. We especially acknowledge our friends and members of group for their hard
work and knowledge & skills they provided for the work done. We want to thank our friend Mr. Abdul-Rehman and Mr. Abdul Rauf, who referred us to the production house of Interwood Mobel PVT LTD. We wish to thank Mr. Azher and Mr. Talib who guided us about the complete
production process adopted by the company and briefed us the process of manufacturing.
Lastly we want to thank the Labour involved in production who operated the equipment,
machines and plants just to show us the principle and process of plants and equipments..
The Syndicators:
Awais Ahmad
M. Adeel Khan
Ghulam Asghar
Sabahat Abid
Najm-ul-Hasan
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TABLE OF CONTENTS
Executive Summary.......................................................................................................................6Introduction to the Company.......................................................................................................7Company Profile............................................................................................................................8The Challenge...............................................................................................................................10Company Analysis.......................................................................................................................10
Goals..........................................................................................................................................10Focus/Vision/Mission................................................................................................................10Achievements.............................................................................................................................10
Production Process Analysis.......................................................................................................11Process Activities / Departments...............................................................................................11Flowchart of Major Steps in Process.........................................................................................12Cause & Effect / Fishbone Diagram..........................................................................................12Run Chart / Major Works Executed...........................................................................................13Opportunity Flow Diagram for one plant..................................................................................14Blueprint Flowchart...................................................................................................................15
Issue Tree......................................................................................................................................16Issues and Problems.....................................................................................................................17
Drawbacks in the Process adopted.............................................................................................17Suggestions / Recommendations...............................................................................................18
Appendix/Annexure.....................................................................................................................19Pictures.......................................................................................................................................19Achievements/Certifications......................................................................................................20
Bibliography/References.............................................................................................................23Evidences......................................................................................................................................23
Concerned persons & Designations...........................................................................................23Contact Numbers.......................................................................................................................23Email Address............................................................................................................................23
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Executive Summary
The project of designing a Market Plan for Interwood Mobel Private Limited, which is a manufacturing business concern of furniture and wood items, includes the physical visit of the company in order to collect the required information, as assigned by the COMSATS Institute of Information Technology and Business Administration. The company has been doing woodwork and manufacturing furniture since last three decades. During this period it has grown from strength to strength. It has a share capital of sixty five million rupees. Furthermore, substantial investments have been made both in machinery and personnel to achieve a better quality product at an affordable price. It has worked on a lot of major projects like Dubai Palace, LUMS University and Habib Bank Limited etc. The visit by Syndicators helped to gather the necessary information for the analysis of Production Process by all members of the group. The persons named Mr. Abdul Rouf, Mr. Azher and Mr. Talib working in Production Section provided the information regarding the production process and let us visited to all departments involved in their manufacturing. They helped us to understand the process activities at each and every level of production and showed us each plant used by the company. They also helped us to understand the challenges faced by the company. Furthermore, the labour also helped us by showing the actual process performed by each plant by operating it. One thing should be noted that the company has all production on digital and electronic equipment. The labour is just to operate the equipment. Even for transferring a wooden item from one container to another, there are lifters by which the items are transferred from one process to another. Lacquering section was the most interesting where vapours of lacquer are absorbed by the plant so that the labour can be protected from side effects of lacquer. Each plant has a specific speed of processing; however, it can be adjusted if the fast production is required. There are conveyer belts attached with each equipment and plant, the items are also transferred from one process to another with the help of these belts. A product passes through various steps and lastly is converted to finished goods inventory. Then the packaging section packs the product, and after packing it is put into cartons and are transferred to warehouse or the showrooms for the customers who did not ordered yet. When customers put the orders to get the desired products, it is given to them or supplied to them by the vehicles owned by the company. The company has a large number of customers including individuals and corporate bodies. The company has no competitors within Pakistan yet. It is a Sales Tax and Income Tax Registered Company and the status of this company is Private Limited Company. The nature of its business is that of Manufacturers and Exporters. However, it also provides services in Pakistan. There are about Nine Hundred persons employed by Interwood Mobel Private Limited. The strength of the company includes that it is one and only company that manufactures the furniture of every kind, whether it has luxurious or average type. The company has a great opportunity of growing its business within Pakistan, till it will face its first competitor in Pakistan. The company has more than one sectors of market, including local and foreign banks, hotels, embassies and business houses. The products that it manufactures are wood floors, office furniture, doors, kitchens, computer furniture, kitchen accessories, home furniture, school furniture, restaurant furniture, interior design works, wardrobes, laminate floors and lamps. It gives eight years warranty to its customers for the products it manufactures. Interwood Mobel Private Limited is also registered under the ISO 9001:2000 certification (attached with this report) and has provided with a certificate for that. It has also provided with registration certificate under BS 476 part II certificate for Q-marks fire doors. The company provides a complete one window solution for the home furniture items. The persons whom the members met, also has provided the video CD, in which the process of manufacturing and finishing is shown in detail. The complete process of all departments and the process of finishing the final products is shown in that video, which will be presented in front of public of MBA, with the permission of the instructors. Interwood Mobel Private Limited has a clear objective, goal and mission to give the best possible services to its customers and clients. This company has a lot of benefits and opportunities to grow in Pakistan as well as other foreign countries. The company serves its customers and clients to achieve a
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remarkable status in the world. Ultimately it is serving our country and making our country a prosperous nation. We need such companies which are the resources of our country.
Introduction to the Company
THE WONDERFUL WORLD OF WOOD; “INTERWOOD” produces kitchens, doors wardrobes, office furniture, home furniture and wood flooring. Interwood also sells imported laminate flooring with 8 years warranty and imported kitchen appliances. In fact all our products are covered by our standard warranty.
All Interwood products are made to highest quality standards (Comparable to the best in the world). State of the art seasoning plants, machinery from Italy and Germany and the skill, motivation, enterprise and dedication of Interwood personnel result in products whose Quality-Price Ratio is unmatched by any Pakistani or Imported Product.
Interwood is generally perceived as a company catering for the very rich. Nothing could be farther from the truth. Take for instance Budget Home Package. It is the best offer ever made and if you look at the 16 doors, one kitchen, 3 wardrobes and laminate floor, you will be really amazed at the quality and unmatchable finish of these products.
Similarly for the information of our friends who buy imported kitchens etc. Interwood prices (with similar specifications) are between 1/3rd and half the prices at which you buy an imported kitchen with equivalent, if not better quality.
There is no or little after sale service available in this industry. Usually, these kitchens products are imported by Fly-by-Night importers who vanish after a few years and are not available to provide the necessary after sale service. Interwood has a full fledge Customer Service Department and provides service and parts even after years.
One should be careful about the claim that the kitchen/product is of Italian or other European origin. Usually, only a minor part is from Italy/EU and the major portion is from China/Local.
It is the only company in Pakistan which will give you a complete solution for your home i.e. doors, kitchen, kitchen appliances, wardrobes, wood and laminate floors. It is One Window Operation. You don’t have to hire a carpenter. You will be amazed to see the savings in time and money and of course the Unmatchable Quality is a bonus. The story does not end here. If you want to have your home finished tastefully and economically, you can do it with our home furniture. Thus Interwood provides a complete One Window Solution for your home.
Interwood has a range/solution for every budget, that is, from the clerk to the CEO everybody is taken off. The Budget Range takes care of the people looking for economic solutions. The Crest Range is for people who want to be more elegant and can afford extra expense. On top is the Executive Range for Executives and CEOs with Conference/Board Rooms thrown in to serve ancillary functions.
Intewood has an exciting range of education furniture. Whether it is LUMS, the Staff College, CBM Karachi, Gift University or St. Mary’s School, FC College, Rupali, Lahore, Descon, Lahore, Haidri Homese, Lahore, Ibrahim Fibers Ltd. Lahore, UNDP, Atlas Bank, Lahore School of Economics, Interwood has a solution for class rooms, Laboratories, Offices, Libraries, Hostels and other furniture. This range is wide and varied; however, it also makes furniture to client’s designs subject to reasonable quantities.
The versatility of Interwood is apparent from the fact that it furnished and did the interior work of Parliament Building, Maldives; Karachi and Lahore Airport woodwork and furniture bears the indelible stamp of Interwood.
Interwood is a Brand and Lifestyle which is affordable, aesthetically pleasing, durable and comparable in quality and workmanship to the best in the world.
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Company Profile
Name of Company INTERWOOD MOBEL (PVT) LTDFull Address 56-Sultan Mahmood Road, Shalimar Town
Lahore, PakistanTelephone No. +92-42-6549123Fax No. +92-42-6549126URL www.interwoodmobel.comE-mail Address [email protected] Private Limited CompanyShare Capital Rs. 65 millionYear of Establishment 1974Income Tax Registration No. 1316337-0Sales Tax Registration No. 03-10-9403-003-37Bankers Allied Bank Ltd. (Corporate Branch), LahoreTypes of Activity Manufacturers/ExportersName of the Chamber of Commerce Lahore Chamber of Commerce & Industry& Industry for which it is a member 11-Shahrah-e-Aiwan-e-Tijarat, Lahore, PakistanMembership No. 36177-AISO Certification ISO 9001-2000 Certified (evidence attached)Product Range 1) Wood Floors
2) Office Furniture3) Doors4) Kitchens5) Computer Furniture6) Kitchen Accessories7) Home Furniture8) School Furniture9) Restaurant Furniture10) Interior Design Works11) Wardrobes12) Laminate Floors13) Imported Kitchen Appliances14) Lamps
Number of Employees 900Name of Contact Persons A. Latif Malik
(General Manager)Omar Farooq(Production Director)Khwaja Farooq(General Manager Commercial)
Lahore Showroom:Full Address 7-Babar Block, New Garden Town,
Lahroe-54669, PakistanUAN 111-203-203Telephone No. +92-42-5832463Fax No. +92-42-5838481E-mail Address [email protected] of the contact person Abdul Mustafa
(Sr. Manager Showroom)
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Karachi Showroom:Full Address C-8-C, 26th St. Touheed Commercial Area,
Phase-V, D.H.A, Karachi, PakistanUAN 111-203-203Telephone No. +92-21-58246314Fax No. +92-21-5824316E-mail Address [email protected] of the contact person Ali Farooq
(Director)Islamabad Office:Full Address House No. 454, Street No. 10,
Sector G-10/2, Islamabad, Pakistan.UAN 111-203-203Telephone No. +92-51-2538346Fax No. +92-51-2100243Cell No. +92-321-5152929E-mail Address [email protected] of the contact person Mrs. Saima Sayyad
(Manager)
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The Challenge
Interwood Mobel (PVT) LTD is the only company in Pakistan that produces all wooden
items such as wooden floor, office and home furniture and hotel furniture. The challenge faced
by the company is that of producing furniture for almost all kind of people and corporate bodies
and according to the needs of all businesses, offices and homes. Interwood has a solution for
marketing the new product, when it is introduced on the internet. Interwood has new and latest
plants for cutting, grinding and finishing the wooden items. It produces goods, which cannot be
manufactured by any other company, if any, producing the same products. The quality of
products introduced and launched by Interwood is unmatchable.
Company Analysis
GoalsThe goal of Interwood Mobel (PVT) LTD is to give the customer best value for money.
Focus/Vision/MissionInterwood Mobel (PVT) LTD strives to become a world-class manufacturer of furniture,
kitchens, doors etc. The company is committed to a constant improvement in the designs,
systems and quality of products. The earnest endeavor of Interwood is to upgrade the skill,
knowledge and standards of living of all employees to international standards.
AchievementsThe Quality of the product introduced by Interwood is unmatchable with any Pakistani or
imported product. So, obviously the Unmatchable Quality of the product is a bonus for the
customers of Interwood.
The company has an ISO certification. It is the ISO 9001:2000 certified company. The
evidence of the ISO certification is attached herewith in appendix. It is also rewarded a trada
certification for Q-Mark fire doors which is also attached.
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Production Process Analysis
Process Activities / DepartmentsThe company has 11 departments each doing a separate job. The step by step production is done through these departments and at last, the finished goods are formed. The following diagram shows the flowchart of Interwood Mobel PVT LTD.
Preparation of working drawings by the qualified & well experienced designers,
engineers & architects with the latest & modern design software Auto Cad &
IMOS. Preparation of Bills of Material & Packing Lists.
Sawing of wood by using most modern imported machines.
By vacuum, solar & conventional kilns. Moisture content up to 8-10%.
Cutting, plaining, pressing, lipping, boring, routing, dowelling, profiling and sanding
of wood and board materials on 21st century German & Italian CNC machines &
tools.
Assembly of furniture by a force of highly skilled artisans using imported German
glues and pneumatic tools for carcass assembly fixture, using German & Austrian
hardware.
Application of long life, non-fading imported Italian stains, lacquers, paints etc. in
dust free environment & spraying booths with automatic controls. Recently they
have added latest automatic CEFLA finishing line imported from Italy.
Fabrication of metal parts i.e. cutting, welding, bending, milling, turning and
hydraulic pressing on most modern machines.
Phosphating, electrostatic spraying and baking of metal parts / products.
Upholstery of sofas, chairs with best quality foam, fabric, leather / leatherite with
pneumatic staple guns.
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Proper packing of each product. Palleting of heavy products. Crating of fragile
items.
Storage of finished / packed items. Complete & safe delivery of goods.
Flowchart of Major Steps in ProcessSUPPLIERS INPUTS PROCESSES OUTPUTS CUSTOMERSWood Supply
Company WoodWood,
Equipment,Labor
Wooden Items and Wooden
FixturesPublic
Cause & Effect / Fishbone Diagram
Machine People
More Machines Majority Middle Class
Less Labor Quality More Machines Expensive
Quality More time on repair LessQuality Know-
how High cost ofMachine Less Labor Less Labor Small Local Bulk Shops OrdersHigh Turnover
Cause EffectAnalysis Complex
ProcessLow MoreFlexibility Scrap
More Process Cost High High CostStrict Quality Turnover of materialControl More Plants More
Production Quality Automated Systems Imported Material
Methods Materials
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Run Chart / Major Works Executed*
MAJOR WORKS EXECUTED
0
10
20
30
40
50
60
70
2006
2007
YEAR
AMO
UNT
(MIL
LIO
N)
* This graph shows the major works executed by the company; The graph included the supplies made to both individual and corporate. Green line shows the supplies to corporate abroad, Magenta shows the sales to individuals within Pakistan and Grey shows the sales to Corporate in Pakistan.
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Opportunity Flow Diagram for one plant
Non Value Added Steps
Yes
No
No No
Yes
Yes
No
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Take Wood Item
Plant in
Use?
Wait
Work-ing well?
Check / Repair
Put Wood &
set/adjust
Push Button on
Plant
Takes
Time?
Adjust Speed
Remove Wood Item
Forward to next plant
Value Added Steps
Blueprint Flowchart
Customer Orders Customer
Chooses Design and
Package
Time period is given to
Customer for the completion
of order
Customer approaches to
showroomCustomer gets
his order
ST A RT
FINISH
Inventory (Start
Pro-ductioin)
Design Saw Mill Season MachineCarp-entry Polish Metal
Power Coat
Ware-house Package
Upholster
Show-room
Issue Tree
More Production
SMore Inventory Imported Material
More CustomersComplexProduction High Sales Bulk OrdersProcess
Corporate Clients
Imported Material
High Cost Quality Focus
Less Labor/More Machines
Issues and Problems
Drawbacks in the Process adopted
While conducting the process analysis, Syndicators found the following drawbacks in the Production Process of Interwood Mobel PVT LTD:
1. A few plants found stopped during production and their processing was transferred to alternate plants. Upon asking how much time is required to repair a plant, the concerned person informed that about 4 to 5 days are required to repair it. Syndicators noted the point and decided to include it in drawbacks. If the plants were working, then the work was running on both the alternate and existing plant. It is clear that these stopped plants may stop the production or the production may take more time as compared to the standard time required. The stopped plant showed that the repair service of plants is not in healthy condition and was not appreciable.
2. It was also noted that as the departments are at more length from each other, the transfer of items from one department to another may take more time. The area of production house is so much wide that it takes more time to take items from one plant to another even in the presence of conveyer belts. Furthermore, the adjusting of items at each plant takes longer period of time. The conveyer belts are not attached with each other so it takes time to set the item at each and every plant.
3. Since there is very fast production, still it needs to make production faster. The plants are not joined with one another through conveyer belts, therefore, production is taking a lot of time wastage. This may affect the Just In Time (JIT) production.
4. Scrap and wastages are not properly managed and there is no proper system to reduce the scrap. A few of scrap is used in various other works, but the remaining is sold.
5. Less labor is working in production unit. As a result, the company is not contributing so much in reducing the unemployment rate from the country.
6. The strict quality control is beneficial for the company in one hand, but to the other, it does not allow to introduce flexibility in the production process. The process must be flexible enough so that the production will not stop even in environmental and climate changes.
7. High turnover, more equipment, high machinery cost and advanced technology makes the production process complicated and also difficult to manage. However on the other hand, it reduces the labor cost.
8. The public does not even know the name of the company. Upon asking, the concerned person replied that majority of our people are middle class group. So they prefer to buy the furniture from other small local shops and cannot afford the prices of our company. The company has high prices because it cannot compromise on quality. High quality standards and 8 year warranty requires high price range. Therefore middle class does not prefer to buy from them. However, Elite Class people purchase the products of Interwood with great interest.
9. After the goods are converted into finished, their handling is manual after packaging. The finished goods items also contain some sensitive ones, like glass items (glass doors, glass windows etc.). Their manual handling is not suitable and not appraisable.
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Suggestions / Recommendations
Syndicators group, after visiting of the production unit of Interwood and informing about the problems resulting during the processing now makes some suggestions and recommendations for the company.
1. Although the whole production is on plants and automated systems, still there is a need to improve the process by continuously and regularly check and maintenance over the plants. The plants should be examined carefully before starting the production everyday. Furthermore, competent people should be hired to repair the plants who can repair the plants by taking less time. In this way, most of the time wasted can be minimized.
2. Conveyer belts should be attached to one another so that adjusting of items at each plant can be prevented. The plants should be installed in such hierarchy so that the items can move automatically from one plant to another. This will help to achieve JIT (Just In Time) Production.
3. The scrap which is sold out, should be used in other useful works. This scrap can be recycled and used again and again for many more useful work.
4. Competent people should be hired for running and maintenance of plants, so that the company can contribute in employment activities at nation’s level.
5. The company should prepare a system for abrupt change in climate condition or environmental changes. New plants should be owned with the increasing technological changes.
6. The marketing department should work hard for the promotion campaigns so that such a large business will be introduced to a huge population that does not know the company’s identity.
7. Like other plants and automated systems, the handling of finished goods after their packaging must also have the automatic system so that the loss can be prevented at its maximum level. Manual handling does not leave a good impression after such a huge automated systems.
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Appendix/Annexure
Pictures
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Achievements/Certifications
20
21
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Bibliography/References
The followings are the reference material, from where the information is collected:
1. Production Process - Physical Visit by Syndicators
2. Company Introduction, Run Chart - Company Profile (Privided by the company)
3. Process Stages, Achievements/Certifications - Compnay URL:
(www.interwoodmobel.com)
4. Production Process - Video CD (Provided by the company)
Evidences
Concerned persons & Designations
1. Mr. Anwar Bhatti (Production Manager)
2. Mr. Abdul Rouf (Production & Planning Officer)
3. Mr. Azher (Quality Supervisor)
4. Mr. Talib (Complaint Supervisor)
5. Mr. Abdul Rehman (Referrer)
Contact Numbers
1. Mr. Abdul Rouf +92-323-8453028
2. Mr. Abdul Rehman +92-322-4329885
Email Address
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