Devi Exports Corporation proposes to impart in-house training to its staff at all levels in order to increase efficiency and productivity. Devi Exports Corporation formulates new growth strategy on an annual basis after detailed analysis of the progress made in the previous financial years. The strategies are formulated and implemented as a growth strategy or a remedial strategy if there are weak areas of business which needs remedial measures. Devi Exports Corporation primarily being an export house is facing stiff competition from many of its competitors i.e. local, national and international. Devi Exports Corporation, though leading in business feels the need to increase efficiency and output to cater to their existing clients in a better way providing them with more financial benefits which in turn would increase sales by satisfied clients giving Devi Exports Corporation the benefit of word of mouth publicity.
The training to be provided would be the latest training methods specially designed to save time, cost, raw materials which would consequents make the produce cheaper and the cost benefits could be transferred to the clients helping them bond with us for longer.
By employing the analytical tools of S.W.O.T., Payback Period, Average Rate of Return, Extensive research comprising of primary and secondary research techniques, it shall be seen if the proposal of providing training and development to increase efficiency and output at Devi Exports Corporation is commercially viable or apt business strategy.
Will training and development increase efficiency and output at Devi Exports?
Rationale for Study:
Devi Exports Corporation is an export house of international standard and repute with a clientele spread across the country and overseas. Devi Exports Corporation is primarily engaged in the business of exporting textile products. The current market scenario is increasingly competitive and the need to strategize assumes importance. Devi Exports Corporation plans on imparting training to their existing workforce as a part of their growth and development strategy.
My rational of study is to see if this strategy is a commercially viable on for Devi Exports Corporation.
- Economies of Scale
- S.W.O.T. Analysis
- Payback Period
- Average Rate of Return
1) CEO of Devi Exports Corporation – Mr. A.R.M. Gopinath.
2) Manager of Field Operations of Devi Exports Corporation–Mr. Ashok Rajamani.
3) Business Consultant of Devi Exports Corporation – Mr. A.R.M. Ravi Kumar
- Internet Sources
- Record Books
- Government Sources
Plan of Action:
Obstacles in accessing data of Devi Exports Corporation.
No prior data available for reference.
Internet sources may not prove to be of utility.
Conducting polls could prove a waste if people are not co-operative.
Action plan/ Research time
|October 2009||Topic Selection|
|2/10/09 – 15/10/09||Write Business proposal|
|16/10/09 – 29/10/09||Initiate the research|
|November 2009||Plan an interview and confirm the interview timing|
|4/11/09||Interview with the President and CEO|
|5/11/09||Consulting the teacher|
|8/11/09 – 10/11/09||Review company’s information and reports|
|12/11/09||Looking up books and internet and start writing|
|25/11/09 – 5/12/09||Economies of scale, SWOT analysis, payback and average rate of return|
|11/12/09 – 16/01/10||Complete draft-1|
|18/01/10 – 30/01/10||Re-Draft and complete draft-2|
|February 2010||Consulting Teacher|
|3/02/10||Submit Final Draft|
Devi Export Corporation was incorporated in 1984 and is based in Chennai. Devi Export Corporation is a subsidiary of the Rs. 350 million-Devi Group.
This organization has proved to be the country’s fastest growing manufacturer. As an exporter of fabrics, garments and home textiles, Devi commands a premium position in the world markets spanning Japan, Europe, and the US.
Devi Export Corporation has a centralized, modern production hub in Chennai set on Japanese quality standards and a long-standing exclusive network of affiliated manufacturing units across India’s renowned handloom and power loom clusters. The unique, flexible and cost-effective manufacturing tie-ups enables Devi Export Corporation to scale up its supply quite rapidly, to meet the clients diversified needs without compromising on quality.
The mission statement of Devi Export Corporation is to be the most respected textile manufacturer in the global markets, setting standards for quality and reliability
Devi Export Corporation considers itself to be an organization of the people and places the consumers before itself working towards the clients happiness by providing quality and a sense of reliability and giving them a high value in terms of returns for the money.
PROCEDURE AND METHOD OF FACT FINDING
The proposed training and development program is a business strategy which would require ample market research such as primary and secondary, co-ordination and planning at different stages and financial budgeting.
After conducting primary research such as interviews with C.E.O., Marketing head and other employees of Devi Exports Corporation relating to training and development programs, requirement of working capital to fund the program, the time element involved in the training program, the objectives of sales set by Devi Exports Corporation for its employees after the completion of the training, the cost effectiveness arising on account of the training and other issues related, it has been concluded that the business strategy to be implemented by Devi Exports Corporation of training and development to increase output is a good business strategy which would yield quick benefits.
Besides good and increased output, there would be increased client loyalty towards Devi Exports Corporation.
After interaction with the existing clients, it was learnt that the clientele would increase as they desired their imports to be cost effective as they too are dealing in a retail consumer market which is highly competitive and they need to give a cost benefit to their direct consumers in order to survive in this market.
Human Resource Development
Devi Exports Corporation has a staff of several thousand workers comprising of weavers, spinners, textile machine operators, supervisors, and departmental heads.
Training imparted at every level would enhance the productivity of the said personnel and reflect in the output. Training at a managerial level of Devi Exports Corporation would enable the business managers to bring out better performance from workers whereas training at worker level would enable the workers of Devi Exports Corporation to perform better and increase productivity.
Better Sales and Subsequent profits:
Devi Exports Corporation currently has a production of 30000-50000 meters of cloth per months. After provision of sufficient training to the staff at all levels, it is expected that the production would increase by 30% which would garner better profits. As the productivity increases, the unit cost per meter drops down. Not only is it expected that the unit cost drop down but the quality of produce is expected to increase too thereby giving the clients the benefit of low cost and high quality. The subsequent increase in volume of sales would contribute to better profits. The additional profits so earned could be ploughed back for expansion or diversification.
The expansion of Devi Export Corporation would create more employment opportunities thereby solving the unemployment problems of the country to a good extent. Devi Export Corporation would thus be in a small way contributing to aiding in the social and widespread national issue of unemployment.
Another important aspect would be the different economies of scale that would be enjoyed by Devi Export Corporation on imparting training.
Economies of Scale:
Economies of scale could be understood to be achieved when increased units of goods or service could be manufactured or made available on a larger scale with comparatively less costs of inputs. As an alternative, it implies as in the case of Devi Exports Limited, when this export firm grows and the units of production increase, Devi Export Corporation stands a better chance to reduce its costs. As per the theory, growth in terms of business can be ascertained when there is realization of economies of scale.
The bankers of Devi Export Corporation would be in a position to provide loans of short and long term duration at a lower rate of interest as the borrowing and other financial transactions of Devi Export Corporation would increase after the training program would be implemented. Training would lead to increased output at lower cost which would increase the sales and subsequent demand. In order to meet the demand more production would have to be carried out for which increased banking activities would be necessary for Devi Export Corporation thereby enjoying financial economies of scale.
Devi Export Corporation would train their business managers. The managerial staff of every department such as manufacturing, accounting, dispatching etc would be amply trained to execute their functions with speed and efficiency and in the doing so they would save cost and increase productivity. Training the existing managers would be cost effective than hiring professional managers which would add on to the cost
Devi Export Corporation would train staff to adapt to the new technology in order to enjoy technical economies of scale. The new technology would help produce better and durable quality of textiles and training provided to the technical staff of Devi Export Corporation would ensure that the organization enjoys technical economies of scale.
Raw Material Economies:
Devi Export Corporation, after provision of training to staff would have increased sales and in order to cater to the growing demand for their products the purchase of raw material in bulk would be a necessity. Devi Export Corporation would enjoy raw material economies of scale on the purchase of raw material in bulk as the volume of sales would have increased making it necessary to make bulk purchases and thereby earning huge discounts.
In the terminology of business organizations, one could understand S.W.O.T. analysis as analyzing the organization on the basis of its Strengths, Weakness, Opportunities, Weakness.
All business organizations are faced with numerous threats and have several weaknesses. At the same time they too have several aspects which are their strength and may opportunities present themselves to them. It is very important for an organization to identify its strengths, weaknesses, opportunities and threats which are in existence. The S.W.O.T. analysis help organizations to formulate growth strategies formulate policies and take remedial measures to reduce weaknesses and eliminate threats.
The S.W.O.T. analysis of Devi Export Corporation would assist in knowing how training and development would prove to be its strength, reduce weaknesses, increase opportunities and eliminate threats to the organization.
Devi Export Corporation essentially caters to buyers based within the country and overseas. The objectives of Devi Export Corporation are significantly to provide client satisfaction by making their exports available at a rate lesser than that of the competitors and quality better than any other exporter in the local, national or international market. Hence the training and development program becomes vital to fulfil this objective.
This program would make it possible to bring out better output which would be cost effective, better quality and at a lesser time.
S.W.O.T. analysis would enable us to determine the viability of this proposal of training and development.
Currently at Devi Export Corporation, the production activities are carried out in a manner which has been in existence since the incorporation of Devi Export Corporation. The methods utilized are obsolete. The strength of Devi Export Corporation is the human resource department. 90% of the staff of Devi Export Corporation has been in the organization since its incorporation and hence the employer-employee relationship is more on a personal level than a professional level facilitating the process of communicating instructions with ease. The employees share a special bond with the organization. This bonding would making the training and development program a success as the employees of Devi Export Corporation are eager to learn and implement the training to bring cost effective output. The staffs are educated and technically qualified. This aspect makes it easy to impart training.
The only weakness perceived by Devi Export Corporation would be the fact that during the training and development program, the entire production unit would be involved in the program and all production activities would come to a standstill. There would be temporary backlog of work. But this weakness would be overcome by the staff of Devi Export Corporation as they would be willing to work overtime to clear the backlog.
Other than this aspect, no other major issues which might result in a weakness for Devi Export Corporation is perceived.
For Devi Export Corporation this training and development program would prove to be a boon. This program would equip the staff to such an extent that the organization could explore new markets without worrying about meeting up with delivery commitments. Devi Export Corporation would also gain opportunities of acquiring new clients because the training and development program would eventually lead to creating a stronger brand image of Devi Export Corporation. Cost effectiveness, lowered rates, prompt delivery and other aspect could lure more clients into placing orders with Devi Export Corporation.
For Devi Export Corporation the threat involved in training and development to increase efficiency are none or minimal. Many other firms may follow suit and commence such programs to compete with the firm. But the relationship shared by the employees of Devi Export Corporation with the organization is unique and hence not possible threat is visible.
This training and development program would eventually lead to higher sales and hence the need to increase the employees might be felt sooner and by this Devi Export Corporation would be generating more employment opportunities solving the governmental issues relating to unemployment problems within the country.
Devi Export Corporation would make a capital investment of Rs. 2, 00,000 for the training and development program for the employees and the contribution for the same would be approximately Rs.40, 000(forty thousand) per month and hence the payback period would be 4 years 5 years.
= 5 Years.
ARR: (AVERAGE RATE OF RETURN)
This is the Average Rate of Return per year on the sum invested by Devi Export Corporation for the training program. The training would reduce the cost of production thereby resulting in an increase in profits.
= 80 %
Conclusions and Recommendations
It is recommended that Devi Export Corporation at the earliest should impart training and development programs to its employees to help serve its clients by providing exports goods at lower prices. This strategy would boost the sales of Devi Export Corporation to a large extent overpowering the intense competition in the process. Devi Export Corporation would carve a niche for itself in the process. The best professionals in the field of imparting training should be hired to fulfil the task.
To conclude with, Devi Export Corporation would visualize the training and development program to increase staff efficiency a commercially apt and viable proposition because the ARR is a good 80% and this figure is a conducive one to begin the project.
This program would improve the corporate image through its professionalized service. The government would benefit too by way of increased tax revenue from Devi Export Corporation and also the employment opportunities the organization would provide.
The most vital aspect of this proposal would be the fact that the product would be cost effective and the consumer would get the product at a discounted rate boosting more sales in the process benefitting Devi Export Corporation and its clients in the process
DEVI EXPORTS PRIVATE LIMITED
WILL TRAINING AND DEVELOPMENT INCREASE EFFICIENCY AND OUTPUT AT DEVI EXPORTS?
YES. THE TRAINING AND DEVEOPMENT PROGRAMMES WILL INCREASE THE EFFICIENCY AND OUT PUT. IN DEVI EXPORTS 15 TO 20 % EFFICIENCY AND OUT PUT INCREASED FOR THE YEAR OF 2009- 2010
DO YOU HAVE A HUMAN RESOURCE MANAGER?
YES. Mr. PURUSHOTHAMAN IS THE HUMAN RESOURCE MANAGER AT DEVI EXPORTS
DO YOU HAVE ANY TRAINING PROCESS?
YES. DEVI EXPORTS HAVE A TRAINING PROCESS
WHAT TYPE OF TRAINING DO YOU FOLLOW FOR EMPLOYEE ?
THERE ARE TWO TYPES OF TRAINING FOLLOWED TO THE EMPLOYEES AT DEVI EXPORTS.
1) JOB REQUIRMENT
2 ) SYSTEM REQUIREMENT
JOB REQUIREMENT :
NEWLY JOINED EMPLOYEES ( TAILORS ) HAVE BEEN TRAINED AT SEPRATE TRAINING SECTION BY TRAINING SUPERVISOR. TRAINING SUPERVISOR GIVES TRAINING MATERIALS TO THE EMPLOYEES AND RECORD THEIR EFFICIENCY. SEVEN DAYS TRAINING WILL BE GIVEN FOR EACH EMPLOYEE. DURING THE TRAINING PROGRAMME, THE SUPERVISOR WILL EDUCATE THE EMPLOYEES AND CREATE AWARNESS FOR ASPECTS LIKE – NAME AND PARTS OF THE MACHINES, HOW TO HANDLE THE OPERATIONAL PARTS, USE THE PROPER TOOLS DURING OPERATIONS, PRODUCT KNOWLEDGE AND SAFETY ASPECTS ETC. ALL TRAINING WILL BE IN HOUSE.
JOB REQUIREMENT FOR FIRE DRILL TRAINING:
IN DEVI EXPORTS, FIRE DRILL TRAINING WILL BE GIVEN TO THE EMPLOEES. EMPLOYEES ARE SELECTED FROM SECTIONWISE AND TOTALLY 20 EMPLOYEES ARE TRAINED. THEY ARE SEPARATELY IDENTIFIED THROUGH THE TRAINING ID CARD WITH THEIR UNIFORM. THIS TRAINING PROGRAMME, WILL BE REVIWED EVERY 3 MONTHS BY EXTERNAL/ INTERNAL TRAINERS. THEY ARE ALERTED DURNG THE EMERGENCY TIMINGS.
JOB REQUIREMENT FOR FIRST AID TRAINING:
DEVI EXPORTS HAVE GIVEN FIRST AID TRAINING TO THE EMPLOYEES BY EXTERNAL TRAINNER (St. John Ambulance) THERE ARE 15 FIRST AID TRAINNERS AVAILABLE AT DEVI EXPORTS. THEY HAVE TO WEAR SEPRATE FIRST AID KIT AND ARE TRAINNED IDENTIFIED BATCHES. THEY WILL BE EASILY IDENTIFIED FROM OTHER EMPLOYEES. THEY WERE ALTERTED AND USED FOR FIRST AID TRAINING TO THE EMPLOYEES DURING EMERGENCY TIMINGS.
HOW DO U IDENTIFY THAT TRAINING IS NEEDED FOR A EMPLOYEE?
A. WE RECORD THE PRODUCTION /WORKERS ON THE FLOOR. IF THEY DON’T ACHIEVE THE REQUIRED PRODUCTION TARGET CONTINUOUSLY FOR TWO DAYS, THE THIRD DAY THEY WILL BE SENT TO TRAINING SESSION TO SPECIALISE IN THE OPERATION. MEANWHILE, THEY WILL BE REPLACED WITH OTHER EFFICIENT TAIB. TRAINING WOULD BE PROVIDED TO OBTAIN MAXIMUM EFFICIENCY AND ALSO TO AVOID WASTAGE TO THE MINIMUM EXTENT POSSIBLE.
DO YOU HAVE ANY PROCEDURE FOR TRAINING?
YES. DEVI EXPORTS HAS THE TRAINING PROCEDURE WHICH IS DOCUMENTED.
HOW MANY YEARS DO THEY HAVE TRAINING AND WHERE?
DEVI EXPORTS HAS ANNUAL TRAINING PLAN AND ALL TYPES OF TRAINING ARE GIVEN AS PER TRAINING SCHDUDLE TO THE EMPLOYEES THE TRAININGS ARE HELD AT SEPRATE TRAINING HALL / SECTION INSIDE THE FACTORY PERMISES..
WHAT IS THE ORGANISATIONAL STRUCTURE?
YES DEVI EXPORTS HAS THE DOCUMENTED ORGANISATIONAL STRUCTURE.
– WHAT IS THE PRODUCTION FOR 2008 – 2009?
01.04.08 TO 31.03.09 – 4, 80,000 PCS
01.04.09 TO 31.12.09 – 2, 76,000 PCS
HAS TRAINING LED TO INCREASE IN THE PRODUCTIVITY?
YES TRAINING LEAD TO INCREASE IN THE PRODUCTIVITY. AT DEVI EXPORTS, THERE IS 15 TO 20 % INCREASE IN THE PRODUCTIVITY.
WHAT ARE THE PRODUCT MIX?
APPARELS FOR MENS, WOMEN AND KIDS EG. MENS SHIRTS, SHORTS. WOMEN’S BLOUSES AND SHIRT
KIDS TOP, BOYS SHORTS AND GIRLS DRESS.
WHAT ARE THE QUALITY ISSUES?
(2) LOOSE THREAD –IMPROPER FINISH
THERE ARE NO MAJOR QUALITY ISSUES. ONLY MINOR QUALITY ISSUES. THEY ARE IDENTIFIED AND RECTIFIED IMMEDIATELY BY THE QUALITY CHECKERS. THE QUALITY ISSUES ARE REVIEWED AT THE PLANT COUNCIL MEETING AND THE MANAGEMENT REVIEW MEETING.
DO YOU IMPLEMENT WITH NEW TECHNOLOGY (MACHINES)?
YES, DEVI EXPORTS HAS IMPLEMENTED NEW TECHNOLOGY FOR MACHINES FOR INCREASE IN THE PRODUCT EFFIECENCY AND TO REDUCE THE WASTAGE.
Interview with the President: Mr.Rajamani
HOW TRAINING NEEDS TO BE IDENTIFIED IN YOUR ORGANISATION?
a. NEW JOIN TAILORS: FOR EXAMLPE AS A TAILOR, THE EMPLOYEE WILL BE IDENTIFIED AS PER THEIR BIO DATA WHETHER HE HAS KNOWLEDGE TO OPERATE THE MACHINE. IF THE EMPLOYEE IS NEW, HE/ SHE WILL BE TAKEN UP FOR TRAINING FOR SEWING. DURING THE TRAINING THE EMPLOYEE WILL BE EVALUATED, THOROUGHLY. THE PERIOD OF THE TRAINING WILL BE LIMITED. 7 DAYS FOR JOB WORK AS TAILORS.
FOR OTHER JOBS, EMPLOYEES ARE TRAINED INTERNALLY BY THE SECTION SUPERVISORS.
FOR ALL TRAINNERS – TRAINING EVALUATION FORM, EMPLOYEE HISTORY RECORD FOLLOWED.PERIODICALLY.
BASED ON THEIR DAILY OUT PUT, AGAINST THE TARGET, WORKER WILL BE ANALYSED IF ANY ADDITIONAL TRAINING IS NECESSARY TO IMPROVE THE PRODUCTIVITY AND DEVELOP THEIR EFFICEIENCY.
DO YOU HAVE A TRAINING BUDGET EVERY YEAR? WHY
YES BECAUE TRAINING IS THE KEY PROCEES TO THE IMPLOYEES. IT HELPS AND USED TO DEVELOP MOREGENERAL SKILLS AND KNOWLEDGE THAT CAN BE USED IN A VARIETY OF SITUATIONS. For eg. ON THE JOB TRAINING GIVEN TO THE NEW JOINED EMPLOYEES – TRAINING TOOLS, TRAINING MATERIALS ETC. ALSO JOB TRAINING OF FIRE DRILL AND EVACUTION FIRST AID TRAINING WILL BE CONDUCTED . TRAINING WILL BE GIVEN TO THE EMPLOYEE THROUGHOUT THE YEAR. SO CERTAIL BUDGET WILL BE ALLOTED FOR THE TRAINING AND IT WILL BE FOLLOWED.
TRAINING BUDGET WILL WORKOUT TO RS.3.00 LACS PER YEAR.
DO YOU FEEL THAT TRAINED EMPLOYEES ARE BETTER PRODUCTIVE?
YES. TRAINED WORKERS ARE BETTER PRODUCTIVE BECAUSE WE TRAIN THEM AS PER OUR NEEDS WHICH IS BEST SUITED FOR OUR COMPANY.
IS THERE A LINK BETWEEN TRAINING AND IMPROVING EFFICIENCY?
YES. THERE IS A LINK BETWEEN TRAINING AND IMPROVING EFFICIENCY.
WHAT ARE THE MOTIVATIONAL TECHNIQUES USED AT DEVI EXPORTS ?
WE MOTIVATE THE FRESH WORKERS AS THE FRESHER WOULD BE PAID TRAINEE SALARY. BASICALLY, WE CLASSIFY TRAINEE AS “C” GRADE WHEN INJECTED IN PRODUCTION LINE. ONCE THEY IMPROVE, THEY WILL BE MOVE TO “B” GRADE WITH FURTHER IMPROVEMENT, THEY MOVE TO “A” GRADE.
A GRADE SALARY – Rs.4500 – 5000 p.m.
B GRADE SALARY – Rs.3500 -4500 p.m.
C.GRADE SALARY – Rs.2400
SUCH MONETARY BENEFITS WOUKLD CERTAINLY ENCOURAGE THE EMPLOYEES.
WE ALSO HAVE A MEETING EVERY WEEK AND EVALUVATE THEIR PRODUCTION. WHEN EMPLOYEES EXCEED THEIR TARGETS, THEIR NAME WILL BE ANNOUNCED IN THE DAILY MORNING MEETING AND CONGRATULATE THEM. THIS GIVES “ IMMENSE CONFIDENCE AND JOB SATISFACTION “ WHEN THEY ARE APPRECIATED IN FRONT OF THE WHOLE FACTORY WORKERS.
DO YOU MORE OF FINANCIAL OR NON FINANCIAL MOTIVATION ?
YES . DEVI EXPORTS HAS MORE FINANCIAL MOTIVATION IN LINE WITH PROMOTING THEM FROM GRADE C TO GRADE A.
DO YOU HAVE PERFORMANCE APPRAISAL?
YES WE HAVE PERFORMANCE APPRAISAL
WHAT IS LABOUR TURNOVER?
YEAR (January to Dec.)
PRESENT EMPLOYEES IN
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