An REPORT ON ORGANIZATION STUDY ATCRYPTMS, THODUPUZA

Sub. Code No. CC338

A project Report Submitted to the Mahatma Gandhi University

In partial fulfillment of the Requirements for the award Of the Degree of Master of Business Administration

ByTREESA PUNNOOSE

REG NO: 90658

Under the Guidance ofMr. DAWN JOSE ROY MATHEW

School of ManagementST. JOSEPH’S COLLEGE OF ENGINEERING AND

TECHNOLOGY, CHOONDACHERRY, PALA

1

2009-2010

School of ManagementST. JOSEPH”S COLLEGE OF ENGINEERING AND

TECHNOLOGY

Certificate

Certified that, this is a bonafide report on the organization study conducted by Ms. Treesa Punnoose, II Semester MBA student of St. Joseph’s College of Engineering & Technology, at ‘Cryptms Confectionaries’ Thodupuzha. This has been conducted under the Guidance of Mr. Dawn Jose Faculty, and School of Management and submitted to Mahatma Gandhi University, Kottayam in partial fulfillment of the requirements for the award of Masters Degree in Business Administration.

Project Guide Head School of Management

Viva-voce held on: …………………………………………

Panel Members Name Signature1. _______________________ ______________2. _______________________ ______________

2

DeclarationI hereby declare that the project entitled

“ORGANISATION STUDY” is a record of bonafide

research carried out me under the supervision of Mr.

DAWN JOSE ST. JOSEPH’S COLLEGE OF ENGINEERING &

TECHNOLOGY.

Pala TREESA PUNNOOSE

3

Acknowledgement

First of all I immensely and whole heartily thank

god for giving me an opportunity for successful

completion of my project.

With great pleasure, I sincerely thank a number of

people who have provided understanding and

assistance in this effort. The speedy and neatly

completion of the study achieved due to the sincere co-

operation and help of Mr. Roy Mathew, Finance

Manager CRYPTMS group of companies. So I

acknowledge with sincere thanks for his active co-

operation and helps rendered.

I am also thankful to the staff of CRYPTMS group of

companies who helped me to complete the project

successfully.

I am extremely thankful to all the faculty members

in the school of management for their valuable

guidance and encouragement

4

Finally, with deep feelings of indebt ness, I express

my warm thanks to my parents, friends and well-

wishers who have directly and indirectly contributed a

lot towards this project.

Pala TREESA

PUNNOOSE

CONTENTS

CHAPTER HEADINGS

CHAPTER I

CHAPTER II

CHAPTER III

General Introduction

Objectives of study

Study Plan

Data Process

Limitation

Chapter Scheme

World Scenario

State Scenario

Indian Scenario

Company Profile

Objectives of the company

Organization Structure

5

CHAPTER IV

CHAPTER V

CHAPTER VI

CHAPTER VII

Future Plan

Departments

Functions & Responsibilities

Structure of each Department

SWOT analysis

Observations & Suggestions

Conclusion

Bibliography

List of Charts and Structures

Structures

Organization Structure

Organizational chart Project Division

Structure of Production Department

Structure of Purchase Department

Structure of Accounts Department

Structure of Marketing Department

6

Structure of Finance Department

CHAPTER I

7

Introduction

Everybody irrespective of their age likes sweets. Confectioneries are very

much popular among the people. The confectionary industry is a very

competitive one. Various new companies came into this field.

Kerala is a state with many large medium scale industries. Confectionary

industry is one of the leading industries, which occupy whole of the state.

Confectionaries have a better demand all over the world. About 22 confectionary

companies are working in Kerala; they all sell about 75 varieties of chocolates

all over Kerala and in India.

In recent years, many new companies come into field. The leading

confectionary companies in Kerala are CRYPTMS, Foster, craze, Cukoo, Royal,

Ruby, Pritis, Priya, Toffo, Sakthi, and Derby etc. Every Company in Kerala is

8

facing stiff competition, mostly from Parrys, Nutrine, Nestlle, Carbury etc. Each

company is producing at least 15 varieties of candies and toffees etc.

History of Chocolates

As with most good things in life, the study of chocolates gives back to the

beginning of the civilization. It comes from the beans of cocoa tree that grows

wild across much of Central and South America. The scientific names of the tree

(Theobrom) literally mean “Food of Good”. Chocolates reputation as an item of

luxury contained well into the 18century when as French Commenter wrote, “the

great tasks it sometimes, the old often the people never”. Perhaps it wasn’t so

surprising, even in 1971 the retail value of one pound of vanilla chocolate was

roughly equivalent to the average weekly wage of a farm labourer.

Although the fame of chocolates continued to spread it was still

consumed only in liquid from as drinking chocolate or cocoa. It was not until the

early 19 century, that Conrad Van Houghton; a Dutch Chemist developed a

process to remove some of the fat and paved the way for the production of the

first edible bars of chocolates. In 1976, Daniel Peter of Switzerland had the idea

of adding the dried milk to produce the milk chocolate and the modern chocolate

industry was born.

The confectionery industry was started in India quite casually in some

sugar mills just extra arrangement confectionary items. It also has the capacity as

9

an energizer like sugar or glucose; moreover it has a very good demand and then

new production units started. Since then confectionery industry was dancing to

the tone of availability of sugar, but it was in a gradual rise till 1965.

The decade 1965 to 1975 is marked as “ dark decade” in the confectionary

industry as the production down from 24,000 tones in 1968 to a mere 9,000

tones in 1973. This was due to sudden imposition of excise duty, but during later

years, it was relaxed and in 1980, with reservation of confectionery in the

exclusive sector of small scale the number of mechanized units went up from 24

in 1979 to 40 in 1988. Then it has bright future and lot of improvements and

innovations came to this line in the next decade. Today the industry is producing

about 75000 tones in the organized sector

Methodology of the study

It is the way to systematically solve the problem. In it one can

found various steps that are generally adopted by a researcher in studying this

research problem along with the logic behind them. It is necessary for the

researcher to design the methodology for the problem. Exploratory research has

used to collect the data relating to the topic under the study.

Personal observation, interview with key personnel of each

departments and information drawn from company manual and journals

10

facilitated the collection of required data. Collection of data includes both

primary and secondary data.

Primary data is a data collected by the investigator himself for the

purpose of a specific inquiry or study. The data was collected through

observation and using data collection instrument questionnaire and pilot study

was conducted in order to edit or eliminate error. Secondary data was collected

from the internal records of the company, library references and Internet

Sources of data

Primary and secondary sources were used to collect the information

required for study. Primary data are collected by making direct interview with

the authorities, officials, and workers and by observation.

Secondary data are collected from information regarding the company, its

history and profile from company manuals, journals and websites and from other

company records.

Objectives of studyPrimary objective

To study the organizational structure and departments of the Company

Secondary objective

11

To get a real life exposure to human resources management, marketing

techniques and financial management, knowledge, this gained through

management studies.

To get awareness about the overall performance of the company

To assess the efficiency of different Department

To check out whether there is a need for introducing corrective measures in

any of the company strategies.

To make study about organization including all departments

To ascertain the organization structure

To ascertain the process of each Department and structure of each

Department

To Know the duties and responsibilities of Key personnel

To Know department Future plan

To know the function of each department

To give suggestions to the company for improvement

Getting practical experience regarding the organizational function

To Improve Management skill

Limitation of the study

12

No scientific tool is administrated for any of the evaluation

Deficiency of time and business of key personals act as stamping in the path for proper

data collection

ABOUT COMPANY

Name & address:

Registered office:

Established:

Area of company’s network:

Subsidiaries:

CRYPTMS Confectionaries (India) Pvt. Ltd

Post box.10 kanjiramattom road

Thodupuzha, pin; 685 583

Kerala

Thodupuzha

1986

Kerala, Tamilnadu and Andhra Pradesh

Bristo food India (Pvt) ltd

Megha home products (Pvt) Ltd

Unipack India (Pvt) Ltd

13

No. Of Wholesalers:

No. Of Workers:

No. Of Products:

Target Growth of sales:

Comfort cartons India (Pvt.) Ltd

Efficient marketing India (Pvt.) Ltd

200

500

48

15%

CHAPTER II

14

INDIAN SCENARIO OF CONFECTIONERY

Confectionery in India industry profile is an essential resource for top-

level data and analysis covering the confectionery industry. It includes detailed

data on market size and segmentation, plus textual analysis of the key trends

and competitive landscape, demographic information, and descriptions of the

leading companies.

Scope

* Contains an executive summary and data on value, volume and segmentation

* Provides textual analysis of the industry's prospects, competitive landscape

and Leading companies

* Includes a five-year forecast of the industry

15

* Supported by the key macroeconomic and demographic data affecting the

market

CADBURY INDIA TODAY

Index stock on BSE and NSE.

Rs. 15 billion market capitalization.

48,000 + shareholders.

1,900 + employees

Rs. 5,711 million sales in 2000:

1. 76% Confectionery

2. 24% Food Drinks.

Rs. 1,069 million PBDIT

Rs. 2,345 million total assets.

OUR PLACE IN CADBURY SCHWEPPES GROUP

1.8% of group sales

1.2% of group net assets.

1.8% of group PBIT (Profit before interest and tax)

Part of 'developing markets' region

Full support from group.

16

Branded Impulse Market includes Chocolates, Biscuits, Ice Creams,

Salted Snacks, and Soft Drinks

There are over 1.5 million retail outlets for FMCG in India. Over two-

third of this stock branded impulse products, but fewer than 25% sell

chocolate.

Branded Impulse Market

Current chocolate value share of total impulse category is 6.1% (CIL

4.4%). Though this is relatively small, changing tastes and lifestyles of

consumer offer tremendous scope for growth.

Chocolate confectionery is sold at premium in India compared to other

branded impulse products.

Consumer - Growth Opportunities

Impulse snacking is an Indian habit.

Attitude and disposable income changes are favourable to impulse foods.

Large youth population, 47% of urban India is growing dominant

chocolate consuming segment.

Child and gifting segments expected to grow at faster rate.

17

Current low penetration of Chocolates, 22% adults in urban India.

Creating Value in Future

Effectively managing growth drivers

1. Gifting Child Connectivity and low end VFM.

2. New channels.

Optimizing manufacturing efficiencies.

Aiming for best in class TMC in Cadbury Schweppes plc. (CS) for CDM

and Éclairs.

Competitiveness in logistics and distribution using IT.

Exploiting mass media to create / maintain large brands.

10+% Advertising / Sales

Chocolate Imports

Greater presence of imported products

Low volume high trade margin segment

Reducing restrictions and duties

Threat as well as opportunity.

CS International portfolio being evaluated.

18

Impact of WTO - Lifting of QRs

Window of opportunity for importing from CS group companies.

1. Better cost effectiveness for trying new products

2. Possibility of providing huge variety

3. Good speed of response to consumer likings

4. Large opportunity in Sugar Confectionery category

Our Vision

Cadbury in every pocket

Superior shareholder value.

This Requires

Broadening our consumer appeal and extending our reach to newer

markets.

Sustained growth of our market share through aggressive product

development.

Striving for international quality in our products and processes.

Focusing on cost competitiveness, productivity and innovative utilization

of assets. Energizing and developing our people.

19

GLOBAL SCENARIO OF CONFECTIONERY

Confectionery in the United States

Confectionery in the United States industry profile is an essential

resource for top-level data and analysis covering the confectionery industry. It

includes detailed data on market size and segmentation, plus textual analysis of

the key trends and competitive landscape, demographic information, and

descriptions of the leading companies.

Confectionery in Austria to 2010

Introduction

Confectionery in Austria to 2010 is a detailed information resource

covering all the key data points. It includes comprehensive value volume

20

segmentation and market share data. The data book supplies actual data to 2005

and full forecasts to 2010.

Scope of this report

Contains information on 4 categories: Chocolate, Gum, Sugar

confectionery, Cereal bars.

Provides market value, volume, and expenditure and consumption data by

market, segment and sub segment.

Includes company and brand share data by category, as well as

distribution channel data.

Contains market value segmentation by demographic and socioeconomic group

Key reasons to read Confectionery in Austria to 2010:

Discover the major quantitative trends affecting the Confectionery

markets.

Understand consumers' consumption and expenditure patterns.

21

Understand the future direction of the market

22

CHAPTER III

Company ProfileCryptms Confectionaries (India) Pvt. Ltd. was incorporated in the year

1987 at Thodupuzha, in the Idukki District of Kerala. The company’s marketing

office is at Cochin. The first year itself the company achieved a turnover of Rs.

One crore with the financial help of Kerala Finance Corporation (KFC), Canara

Bank etc. This was achieved with the dedicated services of experienced

employees of the organization. Well-organized distributors also played an

important role in brining the company to such a height.

They found that there is a scope on the biscuit market. So they had started

a new biscuit unit named ‘MEGHA HOME PRODUCTS PRIVATE LTD’. They

manufactured in the brand name ‘CRYPSY BISCUITS’. This is a registered

small scale industrial unit with authorized capital of Rs. 10 lakhs.

23

Now the company extends its coverage all over south India with hundreds

of distribution and by using effective sales operations. The company’s major

strength is its distribution channels. Companies field representative accompany

the distributors for taking orders and to understand the taste preference and

opinion of dealers and consumers and the market situation.

The company has more than 50 distributors in Kerala. The Keralamarket is

divided into 4 regions and each region having different supervisors, one

marketing manage department for. The marketing manager co-ordinates various

activities of its maximizing the turnover of the company. Competition is

increasing day by day and introduction of new products in every year is a must

for exist the market. Apart from new products, sufficient advertising and

supporting schemes are necessary

Cryptms made large-scale advertising through TV and Radio to increase

the awareness of the products among consumers. Nutrine and parry are the major

competitors of Cryptms. Cryptms possess the third position in the confectionery

industry in India.

The employee of the organization is divided into four categories, workers

both temporary and permanent, office and administrative staff, marketing staff

and security staff. The organization gives importance to the welfare of the staff

and workers because development of the organization can be attained through the

development of its employees.

24

The representative of the workers are also includes promotion of the

employees in the managerial decision is based on the performance appraisal and

seniority. For expanding the business operations of the company, Cryptms started

a new plant at Palakkad, which named as ‘BRISTO’; this new unit is having the

production capacity three times than that of the old plant. Cryptms-Confectioners

through its associate company, megha home products is now entering into biscuit

market by name; CRYPSY’ biscuits in four varieties such as glucose, milke,

Arrowroot and Marie. The other leading suppliers in the biscuit market are

Britania, Craze, Priya, Boon Ambro and Nutrine.

Objectives of the company

The objectives of the company includes following:

Quality

Profit maximization

Cost minimization

More employment

Time delivery

Consistency in sales and services

25

Values of a company

High quality products

Customer Orientation

Team work among employees

Profits for invention and innovation

Future Plan of Cryptms

Cryptms is trying for future expansion and diversification. It has entered

into export arrangement with Messer. Omni Exports, USA and Sigma

International Inc introducing more Products into the market. Every year

company is aiming an annual growth of 15%.

HISTORY & PHILOSOPHY

The activity of Cryptms has been diversified with establishment of

following units:

A. Bristo Food (Pvt.) Ltd

26

The growing demand of the product in the market inspired the promoters

to go for a new unit. Bristo Food (Pvt.) Ltd was started in the year 1995. This

unit produces the Cryptms confectionery products. This unit’s annual

production capacity is 3500 tons of sweets.

B. Megha Homes India (Pvt.). Ltd

Crypsy biscuits were introduced as a part of diversification programme of

Cryptms. The company’s subsidiary, Megha home products Pvt. Ltd produce

the Crypsy biscuits. This was formed in 1993; the existing network of Cryptms

is used for marketing crypsy biscuits.

C. Unipack India (Pvt.) Ltd

The company established Unipack India (Pvt.) Ltd in the year 1989 to

produce the packing materials for cryptms. The company is able to undertake

production of the same for outside companies in the future. The company needs

further expansion. This unit is located in Alapuzha District.

D. Comfort Cartons India (Pvt.) Ltd

Comfort Cartons India (Pvt.) Ltd was established to produce the

packing materials for the company. This unit is capable of producing quality

packing cartons and allied materials.

27

E. Efficient Marketing (Pvt.) ltd

This was established in the year 1993 as an independent and

professionally managed marketing organization. This unit having its head office

at Cochin. The marketing activities of the products of Cryptms Group are

carried on by these units

SHARED VALUE

Guiding concepts, fundamental ideas around which a business is builds

must be simple, usually stated at abstract level have great meaning inside the

organization even through outsiders may not see or understand them.

The shared value of ‘CRYPTOMS’ confectionaries as follows:

Vision statement

“Quality products through continues improvement”

Mission Statement

“Spreading quality sweets through out the world”

Social Activities

28

The company is doing a number of social activities. The company had

given much remarkable contribution to the society. The company usually

sponsors many charitable works organized by different people from society as

well as by the charitable organization. The company had sponsored award at

taluk Hospital, waiting Sheds at Thodupuzha Private Stands and other Places.

The activities have gained much appreciation from the society.

Awards

Cryptms confectionery got FACT MKK Nair Memorial Productivity

Award 1999-2000 for being second in the category of small scale industries

Product ProfileThe production unit of Cryptms in Thodupuzha at present produces 60

tons of sweets in per month. The maximum production capacity is 110 tons per

month. Now they are producing 15 major varieties of sweets, out of which 5

items are candies and 10 items of toffees. Éclairs come under the category

toffees. The price varies from 25 paisa to 1 rupee. Each candy weights 5 grams.

The products are packed in ½ KG packets.

PRODUCT DETAILS

Superlacto Candy with the taste of milk and butter

Coffee cube Toffee with the taste of coffee

Caramel Toffee with the taste of milks

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Coconut Cookey Candy with the taste of coconut milk

Éclairs Toffee, Chocolates with cocoa flavour added in its center

Orange Excel Candy with the taste of orange

Happy Birthday Toffee with the taste of vanilla

Mango Treat Candy with the taste of mango

Paradamen Toffee with the taste of honey and milk

Love Toffee with the taste of honey and milk

Coconut toffee Toffee with the taste of milk and coconut

White Éclairs Toffee with a milk solid at its center covered by Chocolate

Limca Candy with the taste of lemon

Pine Rich Candy with the taste of pineapple

ORGANIZATION STRUCTURE

30

BOARD OF DIRECTOTS

EXECUTIVE DIRECTORS

MANAGING DIRECTOR

PRODUCTIONMANAGER

FINANCEMANAGER

PERSONALMANAGER

R & DMANAGER

MARKETING

MANAGERSUPERVISOR FINANCIAL

OFFICERPERSONALSTAFF

R & DDEPARTMENT

PURCHASEMNAGER

31

WORKERS ACCOUNT STAFF

NORTH AREA

SALES OFFICERRS

SUPERVISION

REPRESENTATIVES

CENTRAL AREA

SALES OFFICERS

SUPERVISION

REPRESENTATIVES

SOUTH AREA

SALES OFFICERS

SPERVISION

REPRESENTATIVES

CHAPTER IV

DEPARTMENTS

PURCHASE DEPARTMENT

PRODUCTION DEPARTMENT

32

MARKETING DEPARTMENT

FINANCE DEPARTMENT

PERSONAL DEPARTMENT

PURCHAE DEPARTMENT

The purchase department plays a very important role in an organization

because purchasing has its effect on every vital factor concerning the

manufacture, quality, cost, efficiency and prompt delivery of goods to

customers. Its function is to procure materials, supplies, services, machines and

tools at the most favorable terms consistent with maintaining the desired

standard quality. Purchasing is the most important function of materials

33

management as the moment an order is placed for the purchase of materials; a

substantial part of the company’s finance is committed which affect cash flow

position of the company. The purchase system is centralized in Cryptms.

Centralized Purchase department means that all the purchase functions

are routed through one department. This means all purchases should be made by

the purchase department to avoid duplication, overlapping and non-uniform

procurements.

Purchasing is the most important function of materials management as the

moment an order is placed for the purchase of materials, a substantial part of the

company’s finance is committed which affect cash flow position of the

company.

Objectives of purchase department

o To make continuous availability of materials so that there may be

uninterrupted flow of materials for production

o To make purchase competitively and wisely at the most

economical prices

o To make purchases in reasonable quantities to keep investment in

materials at minimum

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o To purchase proper quality of materials to have minimum possible

wastage of material & loss in production

o To develop good supplier relationship which will ensure the best

terms of supply of materials

Functions of Purchase Department

1. What to Purchase?

2. When to Purchase?

3. Where to Purchase?

4. How much to purchase?

5. At what price to Purchase?

To perform these functions effectively, purchase department follows the following

procedure:

a. Receive the purchase Requisitions

b. Exploring the sources of supply and choosing the supplier

c. Preparation and execution of purchase order

d. Receiving and inspecting Material

e. Checking and passing of bills for payment

35

Procedure of placing purchase order

The company invites quotation received from different suppliers. Based

on these an appropriate supplier is selected and places orders with them. To

ensure the quality of the product, the company checks the quality of the

product.

To receive goods are kept in the stores. The supervisor in charge of

production is the person to supply the materials on the basis of demand from the

production department

Structure of purchase department

36

Managing Director

Executive Director

Purchase Manager

Board of directors

PRODUCTION DEPARTMENT

PROCUREMENT OF RAW MATERIAL

PROCEDURE OF PLACING THE PURCHASING ORDER

PRODUCTION PROCESS

PRODUCTION PROCESS FLOW CHART

37

Purchase AssistanceStorekeepers

Helpers

PRODUCTION DEPARTMENT

The production process of Cryptms is carried out in its plant situated at

Thodupuzha. The main raw materials used for production are liquid glucose and sugar.

The other ingredients used in the production are milk products, vegetable fat, coconut

powder, Chocolate cocoa paste, flavors etc. Different ingredients are used according to

the nature and type of toffee and candies.

Procurement of raw materials

Procurement of raw materials is one of the responsibilities of production

department. With the help of a bin card the daily stock of raw materials are assesses

and recorded. A minimum quantity of stock is determined for each of the ingredients.

Once the reorder level is reached, purchase order is placed.

Items Main Sources

38

Sugar Tamilnadu

Glucose Tamilnadu & Kerala

Cocoa Karnataka

Butter Kerala

Inner foils Tamilnadu

Production Process

The products can be mainly classified as candies, toffees and éclairs.

Candies are hard sweets toffees are used in these different products.

Production process for the three items is same except the natural curing

process for the toffee and éclairs.

Process

Different ingredients are mixed according to the formula. This mixture is

fed into vacuum batch cooker. They cook the mixture and add other ingredients

like flavors, colour, preservation etc. Water removed using the dehumidator and

the mass is pulled into the cooling table.

The cooled mass is fed into the batch roller which consists of three

cylindrical rods tapering towards one end and rotates in both directions. The

batch roller makes the cooled mass into a cope like from and is passed through

size where the cope is shaped into required size. It is then passed through

forming machine or cutting machine where the candies or toffees are cut into

39

desired shape. After cutting, it is passed through the conveyor belt which is

equipped with drying blower, where air is blown to make the candies separated

each other. Then it is ready for packing.

The Candy items are packed readily. Toffees are packed only after

natural curing. Curing machine and wrapping machine are used for this. The

products are packed in ½ kg or 1 kg packets. They are stored safely at the

godown.

Production Flow Chart

40

Receipt & storage ofRaw materials

Vacuum Batch Cooker

Cooling Table

Batch Roller

Size or performer

Forming & cutting

STRUCTURE OF PRODUCTION DEPARTMENT

41

Separator

Wrapping Machine

Curing Machine

Warehousing

Board of directors

Managing Director

Executive Director

Production Manager

RESPONSABILITIES OF KEY PERSONALS

RESPONSABILITIES OF PRODUCTION

MANAGER

o Prepare weekly wage list and ensure disbursement of weekly wage by

the cashier

o Ensure that an approved list of schedule of wages is available as and

when changes Takes place

o Prepare a monthly salary statement and hand over to the account

department.

42

Supervisors Plant Operators Mechanics

Workers

Helpers

o Maintain the attendance register for production staff

o Ensure leave sanction of all employees and one copy of leave

application is forwarded to HR department

o Ensure that the effluent treatment plant log book is properly maintained

by operators

o Ensure that the pollution control norms are properly informed

Responsibilities of supervisor

Ensure all out sourced products are checked, packed, stocked correctly

Ensure that all out sourced items are received at the respective godown

Inform export department regarding the position of the order well in advance

Oversees duties of packing and dispatch supervisors

FUNCTIONS OF PRODUCTION DEPARTMENT

Production Department is important for an industry. Many manufacturing

organizations are divided up on functional lines. Clearly the most important

department in a manufacturing company is often the production department.

The production department coordinates the production and manufacturing of

each title.

Production department is deals with the process of producing Product.

That means converting input into output. A material is a very important factor

43

of production. It includes physical commodities used to manufacture the final

end product. Production is manufacturing. Manufacturing is understood to

refer to the process of producing tangible goods whereas production includes

creation of both tangible as well as intangible service.

o Establish points of inspection and test at a selected points in the

production processes

o Assure that purchased materials conforms to the requirement of

purchase confirms to the requirements of purchase orders and

specification

o Perform inspection and tests at selected points in the production process

o Collect and analysis inspection and tests data and provide information on

process and product quality levels

Machinery

The selection of machinery is important since better utilization of

machines gives higher return for the money spent. The plant is equipped with

modern machineries and operations are organized under efficient supervisors.

44

Storage

Production department has separate stores for raw materials and finished

goods. Raw materials are gathered with the help of contractors and is stored out

side the company premises. They always take steps to ensure that the raw

materials are never out of stock. Once in a week stock verification is conducted.

PERSONAL DEPARTMENT

PERSONAL STRUCTURE

45

WAGE-SALARY ADMINISTRATION

MANAGEMENT-WORKERS RELATIONSHIP

PERSONAL DEPARTMENT

The development of the organization can be achieved through the

development of the people of the organization. So we can say that workers are

the back bones of the organization. The impressive level of productivity is a

hallmark of cryptms and today the company have highly committed and

disciplined workforce which leads a high degree of productivity with

impressive levels of quality.

46

The company gives importance for employee welfare and individual

development of them. The organization promotes the concept of participative

management, especially in quality circle, employee suggestion schemes etc.

Personnel structure

The employee of the organization can be classified as Managerial,

technical, factory, workers, office, administrative staff and security staff . The

workers are again classified into skilled, semi-skilled and unskilled workers.

All Sundays are holiday for the employees. There are thirteen holidays

except the Sunday in a year. The workers shall to be sick leave, casual leave,

privilege leave and earned leave. The marketing staff consists of marketing

manager at the top followed by area manager, sales officers and representatives.

This sales force provides information on current market condition more

accurately

The company provides training facilities to employees. They provide on

the job training to the workers for the period of one year with stipend and are

promoted as probationary workers for the period of two years, after the

completion of this period, on the basis of supervisors report. Able employees

are appointed as permanent workers.

Wages-Salary Administration

47

Salary of the office staff consist of basic pay and HRA. For marketing

staff, a certain percentage of the sales turnover is given as commission. The

workers are paid according to scale. It consists of basic pay, fixed DA and

variable DA. They also provide provident fund, contribution towards pension

fund, bonus and gratuity. The workers are also providing with ESI benefits.

The employees are promoted on the basis of performance appraisal and

seniority. The company provides health, welfare and safety measures to the

employees. Uniform is given every year to the workers. The companies also run

a canteen for the employees where subsided food is subsided food is supplied

during the working hours.

Management- Workers Relationship

The management having a view that the success of the company depends

very much on the healthy relationship between the management and staff, the

secret of the success of any depends upon that. The management

encouragement encourages employee participation in the overall activities of

the company. The company conducts competition for the employees in sports

and games field.

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The workers come under trade union namely CITU and BMS. 70% of the

workers are under CITU and others, 30% under BMS. The management having

good relationship with these unions and so far there is no strikes or problems.

The management goes hand with the workers and trade unions.

FUNCTIONS OF PERSONNEL DEPARTMENT

Promotion & Transfer

Remuneration

Performance appraisal

Financial & Non-financial incentives

Keep pace with New Development

Optimum utilization of Manpower

Ensuring Job Satisfaction

Placement of manpower

STRUCTURE OF PERSONAL DEPARTMENT

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Board of directors

Managing Director

Executive Director

MARKETING DEPARTMENT

MARKETING ADMINISTRATIONMARKETING SEGMENTATION

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HR manager

Personal Staff

TechnicalStaff

Managerial Staff

FactoryWorkers

Office & administrative

SkilledWorkers

Semi skilledWorkers

UnskilledWorkers

PRICINGDISTRIBUTION CHANNELADVERTISEMENTCOMPRTORSMARKET OUTSIDE KERALASALES OF VARIOUS PRODUCT

MARKETING DEPARTMENT

Marketing is the most complex and challenging function to be preformed

by every business firm. It is the process of finding and fulfilling consumer

desires in such a way that to achieve profit to the organization and to satisfy the

customers.

Marketing is the analysis, planning, implementation and control of

programmes designed to bring desired exchange with target audiences, for the

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purpose of personal and mutual gains. It relies heavily on the adaptation and co-

ordination of product, price, promotion and place for achieving response.

Market segmentation

Once the market has been identified, it becomes easy for an organization

to make a product satisfies customers and differ from those of competitors. The

market segmentation is the strategy that subdivides the largest market in to

subgroups of consumers with definable, distinct and differentiated marketing

programmes for each subgroup in order to enhance satisfaction to consumers and

profit to the marketer.

The market for toffee and candies are segmented according to age and

behavioral patterns, usually kids and teenagers are the potential consumers of

these products. Marketing concentrates on this group. Any products at its

introduction stage bring only a low profit due to the expenses in sales promotion.

Similarly to capture the market a lot of changes can be done to the existing

product, like changes in shape cover, change in colour etc.

Pricing

The slightest variation in the price affects the sale in candies or toffees

due to the cut throat competition in the market. Thus the pricing depends upon

many factors such as:

i. Competitors price

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ii. Cost of production

iii. Buying pattern of the consumers

iv. Distribution channel

Some products of the company gets a high profit while others get a less

amount of profit only. Even then for the existence in the market and to push up

the sales of other products, the company continues to sell those products also in

the market.

Distribution

Cryptms has more than 50 distributors all over Kerala. For proper

distribution the entire market is divided into different zones under district

supervisors.

Distribution Chart

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Warehouse

Factory

Cryptms Advertisement

Advertising is the process through which the consumers are getting

information about the product. IT persuades the consumers to buy the product.

It increases the sales and helps in creating a brand name and consumer loyalty.

Advertisement may be

i. Informative or competitive

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Distributor

Wholesaler

Consumer

Retailer

ii. Product oriented ocompany oriented

While informative advertisement given information about the product,

competitive advertisement tries to put down the competitors products.

Similarly, the product alone, where as the company oriented advertisement

focuses on the whole products of the company or the company as a whole.

Cryptms spent a large amount on advertisement. The advertisement

efforts can be channeli zed as follows:

Wall painting

Boarding and boards

TV\Radio\Newspaper

Side panels on KSRTC Buses

Competitors of cryptms

Competitors are increasing day by day. In the confectionery market parry

enjoys the first position followed by Nutrine and then Cryptms. Parry captures

the majority of the market share. They sell large volume of product at a low

cost. Both parry and Nutrine spends large amount on advertisement.

In Kerala market, Cryptms enjoy the first position. Other competitors

include Triffani, Ruby, Craze, Foster etc.

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Markets outside Kerala

The company does not enter directly into the market outside Kerala. All

the dealings outside the state are done through carrying and forwarding agents.

Interpretation

It is observed that out of total sales volume of Cryptms, 18% HAPPY

BIRTHDAY are sold more by the retailers and then comes 16% LOVE and

15% Éclairs, 13% PRADAMAN, 11%COFFEE CUBES, 7% CARAMEL, 6%

ORANGE TREAT, 5%SUPER LACTO, and 3% Coconut cookie. HAPPY

BITHDAY, LVE AND ECLAIRS are selling in larger proportion. Super lacto

and coconut cookie are being selling very less proportion.

VARIETIES SALES VOLUME(1KG.PKTS) IN PERCENT

Super lacto 35 5

Coconut cookies 20 3

Orange Excel 40 6

Coffee Cube 73 11

Caramel 52 7

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Éclairs 110 15

Happy Birthday 125 15

Mango Treat 40 6

Pradaman 90 13

Love 115 16

Total 700 100

SALES OF VARIOUS PRODUCTS

Structure of Marketing Department

57

Board of directors

Managing Director

Executive Director

FINANCE DEPARTMENT

58

Marketing Manager

North area

Sales officers

Supervision

Representatives

Central area

Sales officers

Supervision

Representatives

South area

Sales officers

Supervision

Representatives

OBJECTIVES OF FINANCIAL DEPARTMENT

FINANCIAL POSITION

COST ACCOUNTING SYSTEM

FINANCE DEPARTMENT

Finance department is the lifeblood of every business. Availability of

sufficient funds at the required time is the key of success of a concern. As a

matter of fact finance may be said to the “circulatory system of the economic

body” making possible co-ordination between the different activities.

Functions of financial Department

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The function of financial management is to make intensive and economic

use of capital resources of the organization. Since business firms are profit

seeking organization, there functions are to maximize the companies’ wealth.

The primary functions are:

1. Profit Maximization

2. Maximization of return

Financial position of cryptms

The credit of the success of Cryptms goes to the finance department

because of the efficient administration of the firms financial resources and its

clever utilization helps to make successful completion each year business

targets.

The company has a paid up capital of 44.78 lakhs. Fixed assets contributes

to about 90.28lakhs... This consists of land at Thodupuzha, Factory and office

building, plant and Machinery, furniture and fixtures at factory and office,

electrical fittings at office, vehicles etc. Depreciation is provided following the

written down value method.

The current asset of the company includes sundry Debtors, inventories,

loans and advances, cash in hands and cash at bank. The current liabilities of

the company are sundry creditors, liabilities on salary, sales tax etc.

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The Canara bank provides the necessary working capital to the company.

The long term loans are provided by KFC. The company follows mercantile

system of keeping books of accounts. All the transactions are dealt through

cheque, bills of exchange, And Demand draft etc. The excise duty is paid in

advance.

Cost Accounting System

The costing system ensures strict control over expenses. Strict labour

control techniques are used for increasing the labour productivity and reducing

the idle time. Cryptms adopt standard costing system. Costing per month is

done for all the products. Cost per batch is considered. The standards are

compared with the actual. If the actuals vary from the standards, corrective

measures are taken by the executives. The company keeps cost cards for

accurate cost accounting records. The main ingredients of the products liquid

glucose, sugar, vegetable, fats, butter, milk powder etc. The purchase system is

centralized.

Structure of finance department

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Board of directors

Managing Director

Executive Director

Responsibilities of cost accountant

Provide a correct analysis of cost both by process or operations and by

different element of cost

Helps in preparation of budget & implementation of budgetary control

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Finance Manager

Accountant Cashier Clerk

Data entryOperators

Advice management on future expansion of policies and proposed capital

project

Organize the internal audit system to ensure effective working of different

department

Organize the cost reduction programmes with the help of different

department managers

Supply useful data to management for taking various financial decision

Helps in supervising the working of punched card accounting or data

processing through computers

Exercise effective control of stock of raw materials, work-in-progress,

consumable stores and finished goods in

Need of accounting system

The staff and officers working in various accounting section of the

division shall carry out there work effectively and efficiently as per the

guidelines. There should be close coordination and exchange of information

between the accounting sections of the division to ensure uniformity in the

accounting transaction, also the head of the various accounting section will

maintain close coordination with other department

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Needs of accounting system are:

To ascertain the result of operation i.e. profit or loss

To ascertain the financial position of the business i.e. solvency

To provide control over the assets and liabilities of the company

To provide information to tax authorities like sales tax, income tax , central

excise etc

Significance of accounting policies

a. Basis of accounting

The financial statement are prepare on accrual basis except sales return

which is accounted on receipt basis.

b. Fixed assets\ Depreciation

Depreciation on fixed asset is provided on straight line method at the rates

specified under schedule number XIV of the companies Act, 1956.

c. Investment

Investments are stated at cost.

d. Valuation of inventories

i. Raw material & Packing Material : At cost

ii. Stores and spare and consumables : At cost

iii. Finished Goods : Net realizable value

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iv. Work-in progress : At cost

e. Revenue Recognition

i. Revenue from sale of goods is recognized from passage of title to the

customer, which coincide with delivery.

ii. Sales comprises of sale value of goods less sales return

f. Earnings per share

Earnings per equity share are calculated by dividing earnings after tax by

number of equity shares held during the year.

g. Foreign Exchange Earning

It is converted at the rate of exchange prevailing one the date of transaction.

h. Income tax

Current year’s tax is determined in accordance with income tax Act, 1961

Sources of finance

Shares, Revenue and surplus and loan funds are the main sources of fund. Loans

are secured mainly from Canara Bank

RESEARCH & DEVELOPMENT DEPARTMENT

Cryptms has a fully equipped and well staffed research and development

division and a complement of the most modern and sophisticated machinery to

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test the quality and efficiency. This has been possible through a systematic

R&D programme under the able guidance of the technical officer.

The research and development department has evolved stringent method

for analyzing and testing raw materials and end products. A dedicated team of

research scientists and quality experts are engaged in research and development

of new formulation and standardization of sweets.

Specific areas

Raw material Standardization

Development of new products

Safety and efficacy study of new formulation

Benefits

Increasing quality of products

Development of new products

Continuation of new product development

Standardization of quality parameters of existing range of product

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CHAPTER V

67

SWOT ANALYSIS

Strength

High availability

High quality at low price

Efficient and well trained employees

The goodwill of the company

Weakness

Limitation of production capacity

Limited market penetration

Less variety of chocolates toffees, such as bar chocolates, lollypops etc.

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Opportunities

Improvement in market penetration

Expansion of production capacity

Introduction of product varieties and improved promotional efforts through

audio-visual media

Threats

Introduction of tattoos and stickers by competing confectionary companies

Advertising monopoly of parries and nestle in audio-visual media

Extended network of multinational companies with improved technology and

attractive packaging

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CHAPTER VI

Observations

The product are not expensive

There is no shortage of product

Cost of Inventory shows an increasing trend

The trend analysis of average working progress decline shortly in the

second year followed by a huge increase.

Majority of the people are aware about the brand name

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Goodwill of the company is high among customers

Most of the consumers are satisfied with the quality, price and durability

of Nirapara product.

Efficiency of inventory management is satisfactory and goes on better

position

SUGGESTIONS

Motivate all the retailers to purchase cryptms by providing

incentives and benefits to them.

Introduce stickers and tattoos to attract more consumers, especially

children

To concentrate more on promotional activities, particularly

advertisements through television channels and medias like magazines,

story books for children and newspapers

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Maintain the rate of margin and make this fact to all the retailers.

Introduce more number of varieties with new flavors

Provide more benefits and incentives to attract the retailers and to

ensure that incentives and benefits given by the company are reaching the

retailers.

Maintain the quality of the products and to conduct comprehensive

study to find out the company expectations and consumer specifications.

The company has to widen the market to other territories.

The company has to maximize the production to its capacity of 110

tones and thereby the company can reduce its cost.

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CHAPTER VII

CONCLUSION

The activities of the plant office and all other departments are functioning

at the impressive standards for achieving the organizational objectives. The

commitment and efficiency of the employee helped cryptms in capturing highly

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competitive market. Product diversification enables the organization to get a

prominent place among the corporate entities.

Sales turnover can be enhanced with the help of providing more

commission to retailers and damage allowances, van allowances, credit facility

etc. to distributors. Increasing the frequency of advertisement on mass media

will improve the product awareness among the public.

Productivity can be increased with the help of complete automation of

the production process. Strict quality control with the help of modern

equipments will enable the company to enter the international market.

BIBLIOGARPHY

PHILIP KOTLER - MARKETING MANAGEMENT.

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Various magazines like business India, India today etc

www.wikipedia.com

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